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WestJet, Delta Air Lines Obtain Clearance for Joint Venture

June 27, 2019 /

WestJet and Delta Air Lines today announced that their proposed U.S. – Canada transborder joint venture has received clearance under Canada’s Competition Act from the Canadian Competition Bureau. The CCB issued a no-action letter confirming that it does not intend to challenge the proposed joint venture agreement between WestJet and Delta Air Lines.

“Today’s clearance by the CCB is an important step towards satisfying the conditions necessary to implement the proposed WestJet-Delta transborder joint venture,” said Ed Sims, WestJet President and CEO. “We thank the CCB for its timely and thorough review. The joint venture will lead to more consumer choice, connectivity, and economic benefits on both sides of the border by growing U.S.-Canada business and tourism travel.”

Ed Bastian, Delta’s CEO, said, “This significant achievement brings us closer to implementing a joint venture that provides a world-class experience for customers travelling between the U.S. and Canada. The joint venture between Delta and WestJet will create an expanded network with more frequencies and destinations, improved airport connections and significantly enhanced frequent flyer benefits.”

The proposed joint venture between the two airlines is still subject to regulatory approval from the U.S. Department of Transportation.

Upon receipt of all regulatory clearances or approvals in the U.S., the new joint venture will enable Delta and WestJet to deepen their existing partnership with expanded codesharing, reciprocal elite frequent flyer benefits, optimized growth across the U.S.-Canada transborder networks, and co-location at key hubs with initiatives designed to deliver a more seamless guest experience. The partners will also begin implementing joint sales and marketing activities and increase belly cargo cooperation.

Further information about WestJet and Delta Air Lines is available at westjet.com and delta.com.

Alitalia Rescue at Risk as Suitors Set Conditions

March 13, 2019 /

ROME (Reuters) – Delta Air Lines and easyJet have set strict conditions for investing in Alitalia that could jeopardise a government-led plan to rescue the troubled Italian airline, a source close to the matter said.

Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans.

Italy’s populist government, which has made the re-launch of the flagship carrier one of its priorities, is sponsoring a plan that would see state-owned railway Ferrovie inject fresh funds and revamp the carrier together with industrial partners.

Delta and easyJet, which have expressed interest in Alitalia, are in talks with Ferrovie, but the three investors do not see eye to eye on the structure of the deal.

Without an industrial partner fully on board, Alitalia could soon find itself in trouble since neither Ferrovie nor the state have the skills to run the carrier, the source said.

EasyJet has said several times it is interested in Alitalia’s short-haul operations and positions at primary airports, adding the alliance should be commercially viable.

The British low-cost carrier would be open to taking a stake of 15 percent in the Italian airline but only if it wins control of certain Alitalia assets, the source said.

That condition has irritated the three special commissioners in charge of the airline, who fear it could lead to a break-up of the company. The administrators have the power to decide on the offers.

At the same time Delta is also planning to take a 15 percent stake, spending around 100 million euros in the proposed 900 million euro (773.6 million pounds) rescue plan, but does not want to inject more than that, the source said.

A participation of 30 percent or less by the industrial partners, compared with a stake of around 40 percent Ferrovie was counting on, would force the government to find additional investors, probably among state-controlled companies, a second source said.

Ferrovie is expected to take a stake of between 30 and 49 percent in the new carrier, the second source said, making a full involvement of Delta and easyJet crucial.

According to Italian newspaper Il Messaggero, Ferrovie CEO Gianfranco Battisti will fly to Atlanta in the coming days to try to convince Delta’s CEO Ed Bastian to pump more money into the rescue plan.

Ferrovie, easyJet declined to comment on the issue, while Delta was not immediately available for comment.

Ferrovie is racing against the clock to meet a March 31 deadline set by the Italian government to present a rescue plan for Alitalia.

Should that deadline be missed, it would jeopardise the repayment of 900 million euro state loan to the airline, which must take place by the end of June.

(By Giselda Vagnoni. Additional reporting by Francesca Landini in Milan, Alistair Smout in London, Tracy Rucinski in Chicago, Writing by Francesca Landini; Editing by Keith Weir)

Air Lease Says Boeing Going ‘Full Speed Ahead’ on Midsized Jet

March 7, 2019 /

(Reuters) – Boeing Co is indicating “full speed ahead” for a new midsized airplane in what would be the first all-new jet program for the world’s biggest planemaker in more than a decade, Air Lease Corp’s chief executive, John Plueger, said on Wednesday.

Boeing reiterated on Wednesday that it will make a decision in 2020 on whether to launch the plane, which aims to address the middle of the jet market between traditional narrowbody jets with one aisle and long-distance widebody planes. It can start seeking offers in 2019, subject to launch.

“Boeing is signalling full speed ahead but there’s still a lot to be decided in these programs,” Plueger said at a conference, noting the company had met with Boeing in Seattle on Friday.

In an emailed statement, Boeing said it is still working through the business case for the new jet, adding: “If we decide to offer the airplane and the market responds positively, we will proceed with a launch decision sometime in 2020.”

Air Lease, one of the largest aircraft lessors, said it sees interest in Boeing’s proposed mid-market aircraft from airlines, some of which are looking for longer range while others, such as Asian carriers, seek the lowest possible cost per seat kilometre.

Still, Boeing is taking a “thoughtful approach” to the potential project following a series of cost overruns and delays with its last jet program, the 787, and has yet to discuss possible pricing, Air Lease Executive Chairman Steven Udvar-Hazy said.

Air Lease will meet on Saturday with Airbus SE, which is preparing to counter the potential new jet by Boeing with a new version of its A321 and the larger A330neo.

While Boeing and Airbus have traditionally launched new jets alongside purchase commitments from airlines, interest by aircraft lessors like Air Lease is forming an increasingly important role in the decision-making process, industry sources have said.

Delta Air Lines Chief Executive Ed Bastian said on Monday that it is interested in a mid-market aircraft from Boeing to replace 200 757 and 767 aircraft over the next decade.

Last month, Rolls-Royce dropped out of the race to power Boeing’s planned jet, strengthening a leading position in the high-profile contest for a transatlantic venture involving General Electric Co and France’s Safran.

“Somebody had to drop out and the competition at this point is progressing normally,” Plueger said.

Pratt & Whitney is also a potential supplier for the new Boeing jet.

(Reporting by Tracy Rucinski in Chicago; Editing by Matthew Lewis)

Interest is rising for Boeing’s new 757 replacement jet!

Delta May Order 200 New Jets, Considers Alitalia Investment

March 5, 2019 /

(Reuters) – Delta Air Lines fueled the appetite of planemakers on Tuesday after Chief Executive Ed Bastian said the airline planned to replace some 200 Boeing 757 and 767 aircraft over the next decade.

The plans come as the second largest U.S. airline seeks to grow internationally, though Bastian said at a conference that the company had not yet decided whether to invest in struggling Italian carrier Alitalia.

Atlanta-based Delta’s potential fleet order, which analysts say would be worth over $10 billion, could boost proposals by Boeing Co to launch a new plane in that segment while Airbus is preparing to counter with a new version of A321 and the larger A330neo.

Delta is “very interested” and in discussions with Boeing about its proposed new midsized airplane, known as the NMA, Bastian said. Boeing will decide in 2020 whether to produce the plane which industry sources say would have two aisles and seat seven across.

The plane aims to address the so-called middle of the jet market between traditional narrowbody jets with one aisle and long-distance widebody planes.

“Hopefully they’ll decide to go,” Bastian said.

Delta is already in the process of replacing one-third of its mainline fleet, one of the largest and oldest among U.S. airlines, in the next five years.

Delta shares were up 2.5 percent at $50.03 in afternoon trading after Bastian said spring and summer travel demand was solid.

Delta Air Lines reveals their first A220 in Atlanta, Georgia at the TechOPS engine shop at Hartsfield Jackson International airport on Monday October 29,2018. (Chris Rank/Rank Studios)

ALITALIA INVESTMENT?

Bastian said it was too early to decide whether to invest in Alitalia, which was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans, leaving the Italian government seeking a buyer to save the airline.

Italy’s state-controlled railway Ferrovie dello Stato (FS) said last month it would start negotiations with Delta and EasyJet Plc to draft a rescue plan, the third in a decade, for the struggling airline.

Delta executives have held talks in Rome in recent weeks, according to Italian industry sources, but doubts remain whether an outside investor would be willing to take a minority stake in the strike-prone airline.

Bastian said that the numbers being thrown around for Alitalia are “pretty large” and “not the kind of numbers that we’re considering, just to quell any concerns.”

Still, he said it makes sense to consider an investment in Italy, an important market for U.S. consumers, and noted that Delta’s global growth over time will skew toward international rather than congested domestic markets.

That growth could come through direct investments in overseas carriers.

“You can’t actually own partner carriers so you have to find ways to influence them beyond just a commercial contract as a partner, and what we have found is that by making an investment into these businesses we can get actually inside the board room and help to start shape the strategy.”

(Reporting by Tracy Rucinski in Chicago, additional reporting by Tim Hepher in Paris; Writing by Nick Zieminski; Editing by Phil Berlowitz and Lisa Shumaker)

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