PARIS (Reuters) – Airbus <EADSY> posted its biggest January order haul in at least 15 years on Thursday as it booked a major leasing order that has been in the pipeline for several months, and carried out 31 aircraft deliveries.
The European planemaker said it had taken orders for 296 aircraft in January, including the recently finalised order for 102 planes from Air Lease Corp <AL> as well as 100 jets from U.S. low-cost carrier Spirit Airlines <SAVE>. After cancellations, it started the year with 274 net orders.
Cancellations included 20 single-aisle jets from Colombia’s Avianca, balanced by 20 orders for broadly similar aircraft from leasing company BOC Aviation in what some industry sources have described as a swap to ease their financing. Neither firm was available for comment.
Lufthansa <LHA.DE> canceled two A350 wide-body jets.
Rival Boeing, whose sales and deliveries have been affected by the grounding of its 737 MAX, has yet to post January data.
Airbus said on Thursday its deliveries from an overseas assembly plant in China had been halted amid the coronavirus outbreak. Airbus has joined other local companies in extending a routine shutdown planned for Chinese New Year, due to the impact of the health scare on its supply chains and logistics.
Airbus is expected to give targets next week and barring a worsening of the coronavirus crisis could shoot for record deliveries of at least 900 jets in 2020 as Boeing remains on a backfoot due to the MAX grounding, industry analysts say.
(Reporting by Tim Hepher; Editing by Alexandra Hudson)
FILE PHOTO: Logo of Airbus is pictured at the aircraft builder’s headquarters of Airbus in Colomiers near Toulouse
DEARBORN, Mich. (Reuters) – Investors sent Ford Motor Co shares skidding on Tuesday after the company delivered a weaker-than-expected 2020 forecast, warning of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars.
Shares in the No. 2 U.S. automaker plunged 9.4% in after-hours trading, shaving more than $3 billion off the company’s value. In comparison, electric carmaker Tesla closed up nearly 14%, pushing its market cap to $160 billion, more than four times the size of Ford’s $36.4 billion.
“The results were not OK in 2019,” Ford Chief Financial Officer Tim Stone told reporters at the company’s headquarters outside Detroit.
“As I look to 2020 and beyond, I’m very optimistic,” he said, while cautioning that Ford’s lower guidance does not yet account for the potential impact of the coronavirus outbreak in China.
In an after-hours call with financial analysts, Chief Executive Jim Hackett was more blunt about the challenge of balancing Ford’s protracted turnaround efforts with its continuing work on future technology, including electric and self-driving cars.
“I don’t think this company can keep straddling the old and new worlds forever … This company has to change,” Hackett said.
Ford said it expects 2020 operating earnings to be in the range of 94 cents to $1.20 a share. Analysts were expecting $1.26 a share.
Stone said Ford expects to continue its quarterly dividend of 15 cents, which could cost the company $2.4 billion in 2020. Asked about continuing the dividend after lowering its 2020 guidance, Hackett said, “We like to return value to shareholders.”
The disappointing 2020 forecast, coming after Ford previously trimmed its 2019 outlook, is a blow for Hackett, who took the helm in May 2017.
He has been asking investors to be patient with a restructuring that has seen the formation of a wide-ranging alliance on commercial, electric and autonomous vehicles with Volkswagen AG <VOWG_p.DE> and the sale of its money-losing operations in India to a venture controlled by India’s Mahindra & Mahindra.
But by Ford’s own accounting, the restructuring is far from complete. It has booked $3.7 billion of the projected $11 billion in charges it previously said it would take, and expects to book another $900 million to $1.4 billion this year.
For the fourth quarter of 2019, Ford reported a net loss of $1.7 billion, or 42 cents a share, compared with a loss of $100 million, or 3 cents a share, a year earlier.
The quarter included a loss of $2.2 billion due to higher contributions to its employee pension plans, something it disclosed last month.
Revenue in the quarter fell 5% to $39.7 billion, above the $36.5 billion Wall Street had expected.
Ford’s adjusted free cash flow fell 67% in the fourth quarter to $500 million, including the $600 million cost of bonuses related to a new labor deal with the United Auto Workers union. The UAW deal also played a role in driving North American automotive profit margins down to 2.8% in the fourth quarter.
Ford said its operating losses in China last year totaled $771 million, including a loss of $207 million in the fourth quarter. It lost $1.5 billion in 2018. Ford’s market share in China in the fourth quarter fell to 2% from 2.3% last year.
In December, Ford said it would halve its operating loss in 2019 and nearly halve it again in 2020, followed by further improvement in 2021.
However, that forecast was before the appearance of the fast-spreading coronavirus and its crippling effects on China’s economy.
Ford’s China sales fell about 15% in the fourth quarter and 26% for the year as it continued to lose ground in its second-biggest market. Ford has been struggling to revive sales in China since its business began slumping in late 2017.
Detroit rivals General Motors Co and Fiat Chrysler Automobiles are scheduled to report their results on Wednesday and Thursday, respectively.
(Reporting by Ben Klayman and Paul Lienert; Editing by Tom Brown)
KUALA LUMPUR (Reuters) – Shares of Malaysia’s AirAsia Group <5099.KL> fell on Monday, after allegations by Britain’s Serious Fraud Office that Airbus <EADSY> paid a bribe of $50 million to win plane orders from Asia’s largest budget airline group.
AirAsia shares fell as much as 11% to 1.27 ringgit – their lowest since May 2016 – while those of AirAsia X tanked 12% to their all-time low of 11.5 Malaysian sen.
Malaysia’s anti-graft agency is investigating the allegations from Britain. AirAsia has said it never made any purchase decisions that were premised on Airbus sponsorship, and that it would fully cooperate with the Malaysian Anti-Corruption Commission (MACC).
Malaysia’s Securities Commission said on Sunday it would also examine whether AirAsia broke securities laws.
The allegations were revealed on Friday as part of a record $4 billion settlement Airbus agreed with France, Britain and the United States. Prosecutors said the company had bribed public officials and hidden payments as part of a pattern of worldwide corruption.
Airbus said at the weekend it would not comment on the Malaysian investigations.
Analysts said the accusation against AirAsia comes at a particularly bad time as airlines grapple with a slowdown in business because of the fast-spreading coronavirus epidemic that has killed more than 300 people in China and disrupted air travel.
“Besides being embroiled in this corruption scandal, we expect a tough operating environment to persist over the medium term with maintenance cost remaining high … and concerns over the Wuhan virus outbreak which could derail propensity for air travel in the region,” Malaysia’s Kenanga Investment Bank wrote in a research note.
TA Securities downgraded AirAsia Group stock to “sell” from “buy”.
“We choose the ‘sell first, ask questions later’ approach to avoid the uncertainty in association with the corruption investigation by MACC, where the impact on AirAsia could be significant in terms of corporate governance,” it said in a note.
(Reporting by Krishna N. Das; Editing by Himani Sarkar and Christopher Cushing)
FILE PHOTO: Thai AirAsia Airbus A320 plane prepares for take off at Don Mueang International Airport in Bangkok
Organisers expect reduction in exhibitors, visitors
South Korea’s air force reviewing participation
By Jamie Freed and Allison Lampert
SYDNEY/MONTREAL, Feb 3 (Reuters) – Some aerospace companies including business jet manufacturers Textron Inc and General Dynamics Corp’s Gulfstream division said they no longer planned to attend the Singapore Airshow due to the new coronavirus epidemic.
The trade portion of Asia’s biggest airshow, held every two years, is set to begin on Feb. 11 under the shadow of the fast-spreading virus that has prompted Singapore to deny entry to any non-resident with a recent history of travel to China, where the virus originated.
The death toll from the coronavirus has risen to 361 in China, bringing the number of confirmed infections to 17,205 in the country. The flu-like virus, which can be transmitted from person to person, has spread to more than two dozen other nations and regions.
Experia Events, the organiser of the Singapore Airshow, said last week the show would continue as planned, but the government measures meant it would “undoubtedly see a reduction in terms of the number of expected exhibitors and visitors this year”.
The organiser said there would be doctors and medics on standby to attend to visitors who were feeling unwell.
In 2018, there were 54,000 trade attendees from 147 countries and 1,062 participating companies who come to network, examine products and sign deals covering commercial aviation, defence, maintenance and repair operations and business jets.
Typically, it is not a major show for commercial plane orders but talks during the show can set the stage for deals that are completed later in the year.
Boeing, Airbus and Lockheed Martin Corp , among the biggest exhibitors, said they still planned to attend the show.
Textron and Gulfstream said their decision to not attend was a precautionary measure to protect the health of employees.
Russian aerospace group Rostec plans to send a reduced delegation to the show, Russian media reported. Rostec did not respond immediately to a request for comment.
A spokesman for South Korea’s Air Force said on Monday it was reviewing whether to participate in the Singapore Airshow, but it had not made a final decision.
The deputy administrator of the Civil Aviation Administration of China, Li Jian, is no longer listed as a speaker at a pre-show leadership conference on Feb. 10.
Commercial Aircraft Corp of China (COMAC), which is developing the C919 narrowbody jet, had been due to attend the show before the travel ban was announced.
COMAC did not respond immediately to a request for comment.
(Reporting by Jamie Freed in Sydney and Allison Lampert in Montreal; additional reporting by Anshuman Daga in Singapore, Joyce Lee in Seoul and Brenda Goh in Shanghai; Editing by Himani Sarkar)
WASHINGTON/CHICAGO (Reuters) – Delta Air Lines Inc <DAL> and American Airlines Group Inc <AAL> decided on Friday to temporarily suspend all remaining U.S.-China flights after the U.S. State Department elevated a travel advisory over concerns about the coronavirus.
U.S. officials were due to hold a call with airlines later on Friday to discuss the Chinese flights. Some airline officials worried that if they did not voluntarily halt flights it would prompt the Trump administration to take formal action, potentially complicating any subsequent flight resumption.
The United States told citizens on Thursday not to travel to China due to the epidemic that has infected nearly 10,000 people and been declared a global emergency.
Pilots and flight attendants have been demanding airlines stop flights to the country, with American Airlines’ pilots filing a lawsuit on Thursday seeking an immediate halt.
“The decision to file a lawsuit was made out of concern for the safety of our pilots,” said Dennis Tajer, a spokesman for the Allied Pilots Association which represents American’s pilots.
As of Thursday United Airlines Holdings Inc <UAL> was still planning to operate some flights from San Francisco, even after its pilots union told its members they would be allowed to drop their trip without pay if they were concerned about flying to the country.
Delta and American had both announced lighter schedules to China earlier this week.
On Friday, American said operations to and from China would be halted starting on Friday through March 27. The carrier will continue to fly to Hong Kong.
Delta said its last China-bound flight departing the United States will leave on Monday, Feb. 3, with the last U.S. return flight departing China on Feb. 5.
The Delta suspension is set to last through April 30.
U.S. airline shares have posted heavy losses this week on concerns of the financial impact of the virus.
Other airlines that have stopped their flights to mainland China include Air France KLM SA <AFLYY>, British Airways <ICAGY>, Germany’s Lufthansa <DLAKY> and Virgin Atlantic.
Major Chinese carriers were still operating flights to and from the United States as of Friday.
(Reporting by David Shepardson and Tracy Rucinski; Editing by Nick Zieminski and Tom Brown)
FILE PHOTO: Delta Airlines sit at Reagan National Airport outside Washington.
WASHINGTON/PARIS/SINGAPORE (Reuters) – A pilots union filed a lawsuit on Thursday seeking to immediately halt American Airlines U.S.-China service, as cabin crews worldwide voiced unease about exposure to the rapidly-spreading coronavirus which has killed more than 170 people in China.
Sri Lankan Airlines staff wear masks at Bandaranaike International Airport after Sri Lanka confirmed the first case of coronavirus in the country, in Katunayake
The Allied Pilots Association, which represents American Airlines pilots, cited “serious, and in many ways still unknown, health threats posed by the coronavirus.”
American, the largest U.S. carrier, did not immediately comment on the suit, filed in a Texas court. The Fort Worth, Texas-based airline announced on Wednesday it would next month suspend flights from Los Angeles to Beijing and Shanghai, but continue flights from Dallas.
The World Health Organization on Thursday declared the coronavirus outbreak in China a global emergency as cases spread to 18 countries.
The lawsuit came as an increasing number of airlines stopped their flights to China. Air France-KLM, for example, suspended its Beijing and Shanghai flights after cabin crews demanded an immediate halt.
Others that have dropped mainland Chinese destinations besides Wuhan, the outbreak’s center, include British Airways and Germany’s Lufthansa. Wuhan is closed to commercial air traffic.
Virgin Atlantic also said on Thursday it would suspend its daily operations to Shanghai from Sunday for two weeks because of the safety of customers and staff and a declining demand for tickets, but would continue flights to Hong Kong.
Other major carriers have kept flying to China, but protective masks and shorter layovers designed to reduce exposure have done little to reassure crews.
Thai Airways is hosing its cabins with disinfectant spray between China flights and allowing crew to wear masks and gloves.
“I don’t think it’s safe at all even with gloves and masks, because you catch it so many ways, like your eyes,” said one flight attendant, who spoke on condition of anonymity.
“My friends also feel unsafe and don’t want to fly,” she said. “When we fly, we don’t sleep a lot.”
Delta Air Lines and United Airlines are operating fewer China flights, with Delta offering food deliveries so crew can stay in their hotels.
Korean Air Lines Co Ltd and Singapore Airlines are sending additional crew to fly each plane straight back, avoiding overnight stays.
The South Korean carrier also said it was loading hazmat suits for flight attendants who might need to take care of suspected coronavirus cases in the air.
The outbreak poses the biggest epidemic threat to the airline industry since the 2003 SARS crisis, which led to a 45% plunge in passenger demand in Asia at its peak in April of that year, analysts said.
(Reporting by Laurence Frost, Aradhana Aravindan, Chayut Setboonsarng, David Shepardson and Tracy Rucinski Additional reporting by Caroline Pailliez in Paris, Josephine Mason in London, John Geddie in Singapore, Panu Wongcha-um in Bangkok, Jamie Freed in Sydney and Joyce Lee in Seoul; Writing by Jamie Freed and Tracy Rucinski; Editing by Marguerita Choy)
FILE PHOTO: An American Airlines Airbus A321 plane takes off from Los Angeles International airport
CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> said on Tuesday it was suspending some flights between the United States and Beijing, Hong Kong and Shanghai between Feb. 1 and Feb. 8 due to a “significant decline in demand” as the new coronavirus spreads.
“We will continue to monitor the situation as it develops and will adjust our schedule as needed,” United said in a statement.
The coronavirus that originated in Wuhan, China has killed 106 people in the Asian country and spread across the world, rattling financial markets.
United’s suspension affects a total of 24 flights.
The other two U.S. airlines that fly to China, Delta Air Lines Inc <DAL> and American Airlines Group Inc <AAL>, said they had not reduced their flights at this time but were closely monitoring the situation.
(Reporting by Tracy Rucinski; Editing by Chris Reese and Bill Berkrot)
CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> on Tuesday beat Wall Street estimates for quarterly profit and held to its 2020 profit target, with a turnaround strategy overseen by its outgoing CEO underpinning growth even as the Boeing 737 MAX remains grounded.
Chicago-based United is one of three U.S. airlines cancelling more than 1,000 monthly flights in a hit to profits as the 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia. Boeing Co <BA> said on Tuesday it does not expect approval for the 737 MAX’s return to service until mid-year, later than previously forecast.
While United has warned of a hit from the MAX grounding, it did not disclose any estimated financial impact from the fallout and stood by its full-year adjusted EPS range of $11 to $13.
Total operating revenue rose 3.8% to $10.89 billion, boosted by strong travel demand and Chief Executive Oscar Munoz’s three-year strategy to build up the airline’s flight connections through its main U.S. hubs. United President Scott Kirby will succeed Munoz as CEO later this year.
Revenue per mile flown, a closely watched industry measurement, rose 0.8% in the fourth quarter and United forecast similar growth in the first quarter given solid bookings.
However, unit costs excluding fuel and profit-sharing expenses, a concern for investors in a year of contract negotiations with pilots, rose 2.7%.
United had already announced a non-cash impairment charge of $90 million in the fourth quarter related to its Hong Kong routes, following anti-government protests in the city.
Shares of United closed 4.4% lower at $85.79 before the earnings release, tracking sharp declines for U.S. airline and travel stocks on concerns over the Wuhan coronavirus in China, which J.P.Morgan analyst Jamie Baker said poses a near-term overhang for airlines.
United did not comment on the outbreak in its results but separately said there is no impact on its operations and it remains in close contact with U.S., Chinese and other Asian authorities on safety.
United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EST (1630 GMT).
Adjusted net income rose to $676 million, or $2.67 per share, in the fourth quarter to Dec. 31, from $657 million a year earlier, topping a Wall Street consensus forecast for $2.65 per share.
Fellow U.S. MAX operators Southwest Airlines Co <LUV> and American Airlines Group Inc <AAL> are due to report quarterly results on Thursday.
The three airlines are scheduling without the MAX until early June though that timeline will likely need to be pushed back following Tuesday’s guidance from Boeing.
United, which had 14 737 MAX jets in its fleet at the time of the grounding, said it plans to take delivery of 28 MAX variants in 2020 depending on U.S. regulatory approval and Boeing’s subsequent pace of production and deliveries.
Among other aircraft orders, it expects to take delivery of two Boeing 777-300’s and 15 Boeing 787’s in 2020 but has decided to assign its purchase obligations for 20 Embraer 175’s to one of its regional partners once each jet is delivered.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Dominic Roshan K L in Bengaluru; Editing by Matthew Lewis)
An American Airlines Boeing 737 MAX 8 flight approaches to land at Reagan National Airport in Washington
