Air France-KLM (OTC: AFLYY) today announces that it has entered into exclusive discussions with Apollo Global Management (NYSE: APO) regarding the potential financing of E1.5bn to a dedicated operating affiliate of Air France-KLM. This entity will hold the trademark and most of the commercial partner contracts related to Air France and KLM’s joint loyalty program “Flying Blue”, and will become the exclusive issuer of miles for the airlines and partners.
This financing would be non-dilutive, structured through a quasi-equity instrument, similarly to those raised by Air France on a pool of spare engines in July 2022 and maintenance activity components in July 2023. Under this agreement, Apollo-managed funds would subscribe to perpetual bonds issued by this dedicated operating affiliate of Air France-KLM.
This financing would be accounted as equity under IFRS, allowing Air France-KLM to make a further step towards its commitment to restore its equity and strengthen its balance sheet, aside from net profit generation and/or straight hybrid bonds.
The contemplated structure related to this financing would incur no change on the operation of the program vis-à-vis the Flying Blue members, no change on social aspects nor Air France, KLM or Air France-KLM employee’s contracts.
Air France-KLM would pursue managing and operating its loyalty program and Air France and KLM would keep full ownership rights of the Flying Blue customer database.
Niel Golightly resigned today as Senior Vice President of Communications at the Boeing Company. Boeing has initiated a search for his successor. In the interim, the communications function will report to Greg Smith, Executive Vice President of enterprise operations and chief financial officer until a permanent successor is named.
Niel’s decision to resign stems from an employee complaint that brought to the Company’s attention an article he wrote in 1987 while serving in the military, about whether women should serve in combat.
Boeing does not agree with the views expressed in the article, and it does not reflect Niel’s views today. “My article was a 29-year-old Cold War navy pilot’s misguided contribution to a debate that was live at the time. My argument was embarrassingly wrong and offensive. The dialogue that followed its publication 33 years ago quickly opened my eyes, indelibly changed my mind, and shaped the principles of fairness, inclusion, respect and diversity that have guided my professional life since. The article is not a reflection of who I am; but nonetheless I have decided that in the interest of the company I will step down,” said Golightly.
“Niel and I discussed at length the article and its implications for his role as the Company’s lead spokesman,” said David Calhoun, President and CEO. “I greatly respect Niel for stepping down in the interest of the company. I thank him for his contributions to the Boeing Company, which have been substantial even in a short time. Our Executive Council and I thank him and wish him all the best in his future endeavors.”
Mr. Calhoun added, “I want to emphasize our Company’s unrelenting commitment to diversity and inclusion in all its dimensions, and to ensuring that all of our employees have an equal opportunity to contribute and excel.”
Since the COVID-19 outbreak began, Emirates and dnata have been adapting operations in line with regulatory directives as well as travel demand.
The airline has aimed to maintain passenger flights for as long as feasible to help travellers return home amidst an increasing number of travel bans, restrictions, and country lockdowns across the world. It continues to maintain vital international air cargo links for economies and communities, deploying its fleet of 777 freighters for the transport of essential goods including medical supplies across the world.
With many of its airline customers dramatically reducing flights or ceasing services altogether, dnata has also significantly reduced its operations, including temporarily shutting some offices across its international network.
HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group said: “The world has literally gone into quarantine due to the COVID-19 outbreak. This is an unprecedented crisis situation in terms of breadth and scale: geographically, as well as from a health, social, and economic standpoint. Until January 2020, the Emirates Group was doing well against our current financial year targets. But COVID-19 has brought all that to a sudden and painful halt over the past 6 weeks.
“As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries re-open their borders, and travel confidence returns. By Wednesday 25 March, although we will still operate cargo flights which remain busy, Emirates will have temporarily suspended most of its passenger operations. We continue to watch the situation closely, and as soon as things allow, we will reinstate our services.”
Having received requests from governments and customers to support the repatriation of travellers, Emirates will continue to operate passenger and cargo flights to the following countries and territories until further notice, as long as borders remain open, and there is demand: the UK, Switzerland, Hong Kong, Thailand, Malaysia, Philippines, Japan, Singapore, South Korea, Australia, South Africa, USA, and Canada. The situation remains dynamic, and travellers can check flight status on emirates.com.
Sheikh Ahmed added: “Emirates Group has a strong balance sheet, and substantial cash liquidity, and we can, and will, with appropriate and timely action, survive through a prolonged period of reduced flight schedules, so that we are adequately prepared for the return to normality.”
Cost reduction measures
The Emirates Group has undertaken a series of measures to contain costs, as the outlook for travel demand remains weak across markets in the short to medium term. This includes:
Postponing or cancelling discretionary expenditure
A freeze on all non-essential recruitment and consultancy work
Working with suppliers to find cost savings and efficiency
Encouraging employees to take paid or unpaid leave in light of reduced flying capacity
A temporary reduction of basic salary for the majority of Emirates Group employees for three months, ranging from 25% to 50%. Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction
Presidents of Emirates and dnata – Sir Tim Clark and Gary Chapman – will take a 100% basic salary cut for three months
The Emirates Group has strong liquidity, with a healthy cash position but it is prudent that it take steps to reduce costs at this time. Emirates remains committed to serving its markets and looks forward to resuming a normal flight schedule as soon as that is permitted by the relevant authorities.
Safeguarding customers, employees, and communities
Emirates Group closely monitors the situation and keeps in regular contact with all relevant authorities, so that it can implement the latest guidance to keep travellers and its employees safe and healthy.
The company has strongly discouraged its employees from non-essential travel, implemented work from home policies for all employees where operationally feasible, enhanced cleaning and disinfection protocols at its facilities, introduced temperature screening at its key office entry points, and launched internal educational campaigns on hand hygiene and health practices to reduce risk of COVID-19.
Over the past weeks, the airline has also implemented enhanced cleaning and disinfecting measures on all of its aircraft departing Dubai as a precaution, and worked closely with airports to implement screening measures as required by the local authorities.
Frontline employees such as crew and airport teams have also been provided with support to stay safe while on duty, including providing hand sanitizers and masks where required.
The Emirates Group fully supports all initiatives to safeguard the health of communities in every market where it operates, including the UAE’s national COVID-19 response.
Jacobson, who was named the airline industry’s best CFO eight times, will remain at Delta while a successor is named and throughout the transition.
Paul Jacobson, Delta’s Chief Financial Officer, is retiring after a remarkable career at Delta that spanned more than two decades.
Jacobson will remain at Delta while a successor is named and throughout the transition. He joined the company in 1997 and was named CFO in 2012.
“Paul played a crucial role in Delta’s bankruptcy process and the strategy that led Delta to regain our investment-grade balance sheet while also investing billions in our people, product and service,” Delta CEO Ed Bastian wrote in a memo to employees Friday. “Paul has a gift for sharing financial messages that are clear, actionable and easily comprehended, ensuring that Delta people understand our financial standing, goals and path forward.”
Jacobson was named the airline industry’s best CFO eight times by Institutional Investor magazine’s poll of Wall Street analysts and investors. In his memo, Bastian also highlighted Jacobson’s service to the community, including his mission to raise awareness and funding for the American Heart Association after a member of his team experienced a heart attack at work.
Jacobson also helped establish the Delta Air Lines Aviation Education Building at his alma mater, Auburn University, providing resources for the next generation to learn to fly and pursue careers in aviation.
“When he leaves Delta later this year, his legacy will be our strong financial foundation and a best-in-class Finance team,” Bastian wrote.
Core to Delta’s mission of connecting the world is our work to first reflect and respect the world. Often, misunderstanding can be one of our biggest barriers to connection.
To broaden understanding of ourselves, our world, our differences and all that we share, Delta hosted our second Day of Understanding with over 300 guests at the Delta Flight Museum in Atlanta.
The day was one pin on Delta’s map to seek diversity and promote inclusion, following Ed Bastian’s commitment to the CEO Action for Diversity & inclusion, a movement including more than 850 of the country’s leading CEOs and presidents to advance diversity and inclusion in the workplace.
Bastian hosted the event in partnership with the Office of Global Diversity and Inclusion and the Diversity and Inclusion Council.
“Our journey of diversity and inclusion at Delta is one of continuous progress. And it is not a journey we will win alone, nor a milestone that can be achieved overnight. Like the value diversity places on unique perspectives, it will take each of our unique commitments to seeing this succeed at Delta,” said Bastian. “I am personally invested in seeing Delta continue to grow and improve in this space, but it will truly take a shared responsibility from each member of the Delta family to make this a success.”
Eric Phillips, Senior Vice President – Pricing and Revenue Management and Chairman of Delta’s Corporate Diversity and Inclusion Council, added: “Diversity and inclusion is not this altruistic term. It’s a business imperative, and importantly, it’s a skill and a capability. We want to be world-class in diversity & inclusion the same way we’re world-class in operational reliability, the same way we’re world class in revenue generation, the same way that we’re world class in taking care of our customers.”
The event included a moderated training on how to have “R.I.C.H.” dialogues – which Reggie Butler, CEO of Performance Paradigms, calls conversations around race, identity, culture and heritage. Within the next 18 months, Delta is aiming to train people at every level of the organization with programs for employees and leaders at every level of the company to engage in a similar dialogue in smaller groups.“It’s our differences that add perspective and value that Delta needs,” said Keyra Lynn Johnson – Chief Diversity & Inclusion Officer. “As we talk about our similarities, I don’t ever want us to overshadow that our differences are an important part of what makes Delta unique. And we are going to put those differences to work today.”
D&I teams and employees from Coca-Cola, Expedia, The Home Depot, Korn Ferry, PwC, and UPS joined Delta’s event. Special guests also included Delta Board of Directors members Kathy Waller, William “Bill” Easter, and David Taylor.
“We have heard time and time again that it is the Delta people that make [diversity and inclusion] happen. And you ought to know that that is authentically said because in the boardroom we hear it each meeting,” said David Taylor, Chairman, President and CEO of The Procter & Gamble Company.
“To create a culture that’s truly inclusive, that unlocks the potential in this room and throughout the company… it’s going to be a force to be reckoned with. More than just the best company in your industry, you’ll impact so many people.”
Take the “I Act On” pledge to check your bias, speak up for others and show up for all here. Learn more about how Delta is seeking diversity, promoting inclusion and celebrating Black History this month here.
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)
(Reuters) – American Airlines Group Inc <AAL> said on Monday it had reached a confidential agreement with Boeing Co <BA> to address damages the airline incurred in 2019 due to the ongoing grounding of its fleet of Boeing 737 MAX aircraft.
American, the largest U.S. airline, said the compensation will be received over several years. The airline will use more than $30 million of the compensation for the airline’s 2019 employee profit-sharing program.
American said it does not expect any material financial impact of the agreement to be realized in its fourth-quarter 2019 earnings and it will continue talks regarding compensation for damages related to the MAX grounding beyond 2019.
The Association of Professional Flight Attendants, which represents American Airlines’ 28,000 flight attendants, said it welcomed the news about compensation, and was evaluating the details.
Boeing said it does not comment on discussions with airlines.
Boeing’s best-selling 737 MAX has been grounded since two fatal crashes in five months killed 346 people. The company is halting production this month. A number of airlines have struck confidential settlements with Boeing in recent weeks.
(Reporting by David Shepardson, Editing by Rosalba O’Brien)
An American Airlines Boeing 737 Max 8, on a flight from Miami to New York City, comes in for landing at LaGuardia Airport in New York
WASHINGTON, Dec 9 (Reuters) – A former Boeing Co employee who warned of problems with 737 production will testify on Wednesday at a U.S. House hearing on the Federal Aviation Administration review of the grounded 737 MAX.
The aircraft has been grounded since March after two fatal crashes in five months killed 346 people. Federal officials say the FAA is not expected to authorize the plane to fly until January at the earliest.
Former Boeing employee Edward Pierson, who had worked as a senior operations manager in the flight test and evaluation unit, will testify before the U.S. House Transportation and Infrastructure Committee, the panel said in a notice.
Pierson’s concerns were referenced at an Oct. 30 hearing — though he had not been named previously.
“All my internal warning bells are going off and for the first time in my life, I’m sorry to say that I’m hesitant about putting my family on a Boeing airplane,” Pierson wrote to Boeing management in mid-2018 before the first crash, according to an email obtained by the committee. He warned “the alternative of rushing to build is far riskier.”
Boeing spokesman Gordon Johndroe said Monday that “although Mr. Pierson did not provide specific information or detail about any particular defect or quality issue, Boeing took his concerns about 737 production disruption seriously.” He added that after Pierson retired and raised the issue again as recently as this year “those concerns received renewed scrutiny at the highest levels of the company.”
Johndroe added “the suggestion by Mr. Pierson of a link between his concerns and the recent MAX accidents is completely unfounded.”
Pierson could not immediately be reached on Monday.
Representative Albio Sires, a Democrat, on Oct. 30, questioned Boeing CEO Dennis Muilenburg about concerns raised by a Boeing employee about Boeing’s 737 production and his recommendation that production be halted. Sires said the employee wrote directly to Muilenburg in December 2018 after he had retired.
Johndroe confirmed Monday Pierson was the employee referenced by Sires.
“He raised some good concerns. We went back and took a look at his concerns and in some cases we identified areas where we thought his issues had already been addressed,” Muilenburg said at the hearing. Boeing did not slow production after Pierson’s concerns.
FAA Administrator Steve Dickson, FAA Aircraft Certification Service Executive Director Earl Lawrence and a member of the FAA’s Technical Advisory Board, Matt Kiefer, as well as former FAA employee G. Michael Collins will also testify.
(Reporting by David Shepardson; Editing by Dan Grebler and Lisa Shumaker)
– Conrad Chun, a nine-year Boeing employee, named vice president of Communications for Boeing Commercial Airplanes
CHICAGO, Nov. 12, 2019 /PRNewswire/ — Boeing [NYSE:BA] today announced the appointment of Conrad Chun as vice president of Communications for Boeing Commercial Airplanes, effective immediately.
Chun most recently served as vice president of Communications for Boeing Global Services where he was responsible for media relations, employee and executive communications, digital communications, government and customer relations, and product and services marketing communications in support of Boeing’s fastest-growing business unit.
Previously, Chun served as director of Communications for Global Services & Support and Boeing Military Aircraft, both of which were divisions of Boeing Defense, Space & Security.
In his new role, Chun will continue reporting to Anne Toulouse, senior vice president of Communications, and Stan Deal, president and CEO of Boeing Commercial Airplanes.
“Stan and I are confident in Conrad’s abilities to help us prepare to safely return the 737 MAX to service and continue to drive progress across our commercial airplanes business,” Toulouse said.
Chun joined Boeing in 2010 after retiring from the U.S. Navy as a captain with 24 years of service. Chun is a graduate of the U.S. Naval Academy. He holds a bachelor’s degree in economics and a master’s degree in information systems from the Naval Postgraduate School. Chun currently serves as chairman of the board of directors for the Military Spouse Corporate Career Network (MSCCN), a nonprofit organization that focuses on job-placement solutions for military-affiliated spouses and caregivers to war-wounded veterans.
Chun succeeds Linda Mills, who announced she will be leaving the company.
“We thank Linda for her many contributions and wish her all the best in the future,” Toulouse said.
Alexa Marrero, current director of Communications Operations for Boeing Global Services, will serve as interim head of Communications for Boeing Global Services until a permanent replacement is selected.
Boeing is the world’s largest aerospace company and leading provider of commercial airplanes, defense, space and security systems, and global services. As the top U.S. exporter, the company supports commercial and government customers in more than 150 countries. Boeing employs more than 150,000 people worldwide and leverages the talents of a global supplier base. Building on a legacy of aerospace leadership, Boeing continues to lead in technology and innovation, deliver for its customers and invest in its people and future growth.
