Saab AB (Stockholm: series B: SAABb)President and CEO Micael Johansson says “The geopolitical tensions are impacting our industry and driving the largest increase in defence investments in the last 30 years, particularly in Europe. In the third quarter, high demand for Saab’s broad defence portfolio continued to result in significant order intake, strong sales growth and improved profitability.”
Key highlights Q3 2023
Order intake amounted to SEK 14,977m (7,772) with strong growth in all order sizes in the quarter.
Sales increased to SEK 11,527m (8,751) with an organic growth of 31%, driven by growth in all business areas.
EBITDA increased 28% and amounted to SEK 1,424m (1,115), corresponding to an EBITDA margin of 12.4% (12.7).
Operating income (EBIT) increased 51% and amounted to SEK 859m (568). The EBIT margin was 7.5% (6.5) with improvements in several business areas in the quarter.
Net income for the period increased to SEK 656m (324) and earnings per share amounted to SEK 4.84 (2.28).
Operational cash flow in the quarter was SEK -2,058m (559) mainly due to timing of customer payments combined with higher investments.
Net liquidity position in the quarter was SEK 1.4 bn (0.4).
Upgraded outlook for organic sales growth 2023: organic sales growth to be between 19-23%, compared to previous outlook of 16-20%.
Around 2,500 frontline Qantas and Jetstar employees will be stood down for an estimated two months in response to ongoing COVID outbreaks.
The stand down is a temporary measure to deal with a significant drop in flying caused by COVID restrictions in Greater Sydney, in particular, and the knock-on border closures in all other states and territories. No permanent job losses are expected.
Today’s decision will directly impact domestic pilots, cabin crew and airport workers, mostly in New South Wales but also in other states given the nature of airline networks. Employees will be given two weeks’ notice before the stand down takes effect, with pay continuing until mid-August.
Income support in the form of government disaster payments will be key to helping eligible employees get through this challenging period and the Qantas Group welcomes the targeted Federal Government support offered for those stood down outside of declared hotspots and to retain domestic aviation capability.
Qantas Group CEO Alan Joyce said the difficult decision to trigger stand downs reflected the reality confronting many businesses operating in New South Wales.
Deutsche Lufthansa AG has been informed by the Economic Stabilization Fund (WSF) of the Federal Republic of Germany that the WSF has approved the stabilization package for the company. The Executive Board also supports the package.
The package provides for stabilization measures and loans of up to EUR 9 billion.
The WSF will make silent participations of up to 5.7 billion euros in total in the assets of Deutsche Lufthansa AG. Of this amount, approximately EUR 4.7 billion is classified as equity in accordance with the provisions of the German Commercial Code (HGB) and IFRS. In this amount, the silent participation is unlimited in time and can be terminated by the company on a quarterly basis in whole or in part. In accordance with the agreed concept, the remuneration on the silent participations is 4% for the years 2020 and 2021, and rises in the following years to 9.5% in 2027.
Furthermore, the WSF will subscribe to shares by way of a capital increase in order to build up a 20% stake in the share capital of Deutsche Lufthansa AG. The subscription price will be 2.56 Euro per share, so that the cash contribution will amount to about 300 million Euro. The WSF may also increase its stake to 25% plus one share in the event of a takeover of the company.
In addition, in the event of non-payment of remuneration by the Company, a further portion of the silent participation is to be convertible into a further shareholding of 5% of the share capital at the earliest from 2024 and 2026 respectively. The second conversion option, however, only applies to the extent that the WSF has not previously increased its shareholding in connection with the above-mentioned takeover case. Conversion should also be possible for dilution protection. Subject to the full repayment of the silent participations by the company and a minimum sale price of EUR 2.56 per share plus an annual interest of 12%, the WSF undertakes, however, to sell its shareholding in full at the market price by 31 December 2023.
Finally, the stabilization measures are supplemented by a syndicated credit facility of up to EUR 3 billion with the participation of KfW and private banks with a term of three years. This facility is still subject to the approval of relevant bodies.
The expected conditions relate in particular to the waiver of future dividend payments and restrictions on management remuneration. In addition, two seats on the Supervisory Board are to be filled in agreement with the German government, one of which is to become a member of the Audit Committee. Except in the event of a takeover, the WSF undertakes not to exercise its voting rights at the Annual General Meeting in connection with the usual resolutions of ordinary Annual General Meetings.
The stabilization package still requires the final approval of the Management Board and the Supervisory Board of the company. Both bodies will come together shortly to adopt resolutions on the stabilization package. The capital measures are subject to the approval of an extraordinary general meeting.
Finally, the stabilization package is subject to the approval of the European Commission and any competition-related conditions.
AKARTA (Reuters) – An Indonesian court on Friday jailed Emirsyah Satar, a former chief executive of Garuda Indonesia, for bribery and money laundering related to procurement of planes and engines from Airbus and Rolls-Royce, his laywer said.
Satar’s lawyer Luhut Pangaribuan said his client had been given an eight-year sentence and fined S$2 million ($1.4 million) by the country’s corruption court.
Indonesia’s Corruption Eradication Commission (KPK) had indicted Satar, CEO of Garuda from 2005 to 2014, over payments from a businessman via a third party for the procurement by Garuda Indonesia of Roll-Royce Trent 700 engines and Airbus A320 and A330 planes.
The indictment also related to the procurement of Airbus planes for PT Citilink Indonesia, a unit of Garuda.
In 2017 Rolls-Royce agreed to pay authorities more than $800 million to settle charges after an investigation by the U.S. Justice Department and Britain’s Serious Fraud Office into alleged bribery of officials in six countries in schemes that lasted more than a decade.
Airbus in February this year agreed to pay a record $4 billion in fines after reaching a plea bargain with prosecutors in Britain, France and United States over alleged bribery and corruption stretching back at least 15 years.
Satar, who had previously denied wrongdoing, will decide next week whether to appeal against his sentence, said Pangaribuan.
($1 = 1.4139 Singapore dollars)
(Reporting by Agustinus Beo Da Costa; Writing by Ed Davies; Editing by David Goodman)
JetBlue (NASDAQ: JBLU) has issued the following message to its 23,000 crew members.
It has been a very tough few weeks. We are so proud to see once again how the JetBlue culture brings us together during times of crisis. Thank you for continuing to serve our Customers and deliver the JetBlue experience, particularly when your own lives are being disrupted in so many ways.
With safety our #1 value, we continue to take the measures necessary to protect your health. But as it relates to our business, we are not going to sugarcoat it. Demand continues to worsen, and the writing is on the wall that travel will not bounce back quickly.
We’d like to give you some color on what we are seeing. Last year on a typical day in March we took in about $22 million from bookings and ancillary fees. Throughout this March, our sales have fallen sharply and in the last several days we have taken in an average of less than $4 million per day while also issuing over $20 million per day of credits to Customers for canceled bookings. This is a stunning shift, which is being driven by fewer new bookings, much lower fares, and a Customer cancel rate more than 10 times the norm. If you do the math, $4 million per day does not come anywhere close to covering our daily expenses. It is hard to predict how long these conditions will last and how much more challenging the environment may become.
We are not alone. Virtually every major carrier is taking actions that were almost unthinkable a few weeks ago, making huge schedule reductions and parking significant portions of their fleets.
Even though we entered this from a position of strength with a strong balance sheet and cash in the bank, because of the dramatic fall-off in bookings, we need to reduce our spending immediately so that we can continue to fund JetBlue’s operations and ensure your jobs are protected. We have already announced an initial capacity reduction, pay cuts for our officers (VPs and above), voluntary time off programs, re-negotiated Business Partners agreements, and other spending reductions.
We’ve taken swift and decisive actions to protect you, but we must do more and do so quickly to weather this storm.
Reducing our flying to reflect demand We are reducing our capacity in the coming months, with a reduction of at least 40% in April and May. We also expect substantial cuts in June and July, and given the unpredictability of this event, we will ground some of our aircraft. We know this is not an easy move – it will impact hours for many frontline Crewmembers, but it is also essential that we reduce capacity in the face of dramatically falling demand.
We will be notifying Customers of their specific cancellations in a phased approach so that we do not overwhelm Customer Support as they continue to receive exponentially more calls than they ever have before.
Reviewing our fleet plan One of our most substantial capital expenses is the purchase of new airplanes. In collaboration with Airbus, we are looking at our order book for opportunities to slow deliveries and reduce aircraft pre-delivery payments (PDPs). We will also defer the four previously used airplanes that we announced earlier this year.
Cutting our capital and operational spending We will reduce spending wherever we can to preserve our cash, and both of us will be taking a 50% pay reduction during this crisis.
We entered the year with a list of major initiatives to invest in our infrastructure, technology and real estate. As of today, we have paused or stopped more than 75% of these projects and will continue to stand down work wherever we can.
Increasing our cash reserves The dramatic loss of revenue in recent days means we will have to start dipping into our cash savings. Although we came into this with about $1.2 billion, our expenses total millions of dollars each day. The good news is we have secured a new liquidity facility – an extra credit line – which allowed us to borrow $1 billion. This is not free money – it’s a band-aid solution that holds us over and we have to pay it back with interest. Even with these cash reserves we, like the rest of the industry, will need significant government support to help us through these losses.
Calling for government intervention The governmental warnings and actions taken to manage this health crisis have hit both domestic and international travel hard. We have been coordinating with Airlines for America (A4A) and other U.S. airlines to ensure government leaders understand the threat to our global economy if air travel is not supported. When this pandemic passes – and it will – air travel will play a major role in getting life back to normal and supporting economic recovery. We are going to need significant government help to do that. This is not a position we’d like to be in, but government assistance will help us protect our 23,000 Crewmembers who are our most important priority as we navigate these turbulent times.
From the beginning we have faced many challenges and, against all odds, we have thrived through some incredibly difficult events. Now we are faced with what is by far the biggest challenge our company and our industry has ever seen. While we know this is an incredibly difficult time for all of you as you work to juggle your own concerns around coronavirus, we have come through other challenges in our 20 year history and we can – and will – come through this together.
The next few months won’t be easy, but please know that all the steps we’re taking today are focused on protecting the health and safety of our Crewmembers and Customers and ensuring JetBlue remains a great place for you to work well into the future.
United Airlines, Chase Card Services and Visa today announced a multi-year extension of the United MileagePlus credit card program. The extension continues the more than 30-year relationship between the number one card issuer in the U.S., the U.S. airline with service to the most U.S. cities and most countries around the world and the world’s leader in digital payments.
The agreement, which extends into 2029, builds on one of the industry’s strongest co-brand card portfolios with seven consecutive quarters of double-digit year-over-year growth and a long history of providing cardmembers with extra benefits that reward people traveling United’s expansive global route network.
“United Airlines, Chase and Visa have a longstanding partnership that delivers top benefits to customers to help them get the most out of their travel, while returning robust value to our respective businesses,” said Luc Bondar, United’s vice president of Loyalty. “This extension strengthens ties with our partners at Chase and Visa and is expected to drive growth across our industry-leading credit card portfolio, enhance our cardholders travel experience and provide more opportunities to easily earn and redeem miles to travel United’s industry leading route network.”
“We’re pleased to extend our decades-long relationship with United and Visa in order to deliver even more value to our joint cardmembers,” said Ed Olebe, president of Chase Co-Brand Cards. “The program has deep cardmember loyalty and fantastic momentum, with exciting new offerings and experiences for our customers to look forward to in 2020 and beyond.”
The extended agreement will build on one of the world’s strongest co-brand card portfolios, with premium customers in premium markets. The portfolio of cards includes the new United Business Card, United Explorer Card, United Club Card, United Club Business Card and United TravelBank Card. Customers traveling with eligible MileagePlus credit cards have access to benefits that make traveling United’s leading route network better than ever including perks such as free checked bags, priority boarding and increased mileage earn on every day spending.
“Visa is proud to extend our partnership with United and Chase to bring best-in-class card benefits and travel experiences to cardholders,” said Kirk Stuart, senior vice president, head of North America Merchant at Visa. “We look forward to building on the program’s success to deliver more value, enhance cardholder engagement and create rewarding payment experiences.”
Earlier this year, United and Chase launched a new Business card and celebrated with the highest ever bonuses for all United co-brand cards for the first time ever. In 2018, United and Chase launched the award-winning United Explorer card, with even more best-in-class benefits including an up to $100 Global Entry or TSA Pre-Check statement credit and 2X earn on hotel stays and restaurant purchases.
United also continues to invest in making MileagePlus the top loyalty program for its members. Last year the airline announced that MileagePlus miles never expire and announced a partnership with CLEAR to offer free and discounted memberships to MileagePlus members. United also introduced PlusPoints, a new industry-leading upgrade benefit for Premier members.
United Airlines Her Art Here California Livery – Side View
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
FILE PHOTO: FILE PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse
PARIS/LONDON/WASHINGTON (Reuters) – Airbus <EADSY> bribed public officials and hid the payments as part of a pattern of worldwide corruption, prosecutors said on Friday as the European planemaker agreed a record $4 billion settlement with France, Britain and the United States.
The disclosures, made public after a nearly four-year investigation spanning sales to more than a dozen overseas markets, came as courts on both sides of the Atlantic formally approved settlements that lift a legal cloud that has hung over Europe’s largest aerospace group for years.
“It was a pervasive and pernicious bribery scheme in various divisions of Airbus SE that went on for a number of years,” U.S. District Judge Thomas Hogan said.
The deal, effectively a corporate plea bargain, means Airbus has avoided criminal prosecution that would have risked it being barred from public contracts in the United States and European Union – a massive blow for a major defence and space supplier.
Prosecutors said individuals could still face criminal charges, however.
Airbus, whose shares closed down 1%, has been investigated by French and British authorities for alleged corruption over jet sales dating back more than a decade. It has also faced U.S. inquiries over suspected violations of U.S. export controls.
“In reaching this agreement today, we are helping Airbus to turn the page definitively” on corrupt past practices, French prosecutor Jean-Francois Bohnert said.
France’s financial prosecutor said the company had also agreed to three years “light compliance monitoring” by the country’s anti-corruption agency.
The U.S. Department of Justice said the deal was the largest ever foreign bribery settlement.
CODE NAME ‘VAN GOGH’
In a packed hearing at London’s Royal Courts of Justice, an Airbus lawyer said the settlements “draw a clear line under the investigation and under the grave historic practices”.
Outlining detailed findings, the UK’s Serious Fraud Office (SFO) said Airbus had hired the wife of a Sri Lankan Airlines executive as its intermediary and misled Britain’s UKEF export credit agency over her name and gender, while paying $2 million to her company. The airline could not be reached for comment.
Caesars Entertainment Corporation (NASDAQ:CZR) (“Caesars Entertainment” or “Caesars”) and VICI Properties Inc. (NYSE:VICI) (“VICI Properties” or “VICI”) today announced they have signed an agreement to sell Harrah’s Reno Hotel and Casino (“Harrah’s Reno”) to an affiliate of CAI Investments (the “Buyer”) for $50 million. The proceeds of the transaction shall be split 75% to VICI and 25% to Caesars, while the annual rent payments under the Non-CPLV Master Lease between Caesars and VICI will remain unchanged.
Under the terms of the agreement, Caesars will continue to operate the property upon closing of the transaction pursuant to a short-term lease with the Buyer, which will allow Caesars to cease operations at the property during the second half of 2020. At the end of the term, Caesars will deliver the property to the Buyer to be redeveloped into a non-gaming hotel and mixed-use development.
“We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago and our role in the community. We are pleased the Buyer is committed to the community and supports the redevelopment of this wonderful asset. We have worked closely with the Buyer to provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs, including priority consideration for relevant openings at our other properties in Nevada, including Lake Tahoe and Las Vegas,” said Tony Rodio, CEO of Caesars Entertainment.
“The sale of Harrah’s Reno demonstrates our ability to continuously work constructively with our tenants to improve our individual businesses. This disposition will allow VICI to optimize the quality of our real estate portfolio and redeploy the proceeds toward other attractive growth opportunities while maintaining the existing financial terms of the Non-CPLV Master Lease with Caesars,” said John Payne, President and COO of VICI Properties.
“Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property,” said Christopher Beavor, CEO of CAI Investments. “CAI is excited to be working with Gryphon Private Wealth Management as capital partners for the project. Kirk Walton and Philip Oleson, Principals of GPWM Opportunity Zone Funds, which will be investing the required capital for the project, believe in the long-term growth potential of Reno.”
The agreement allows for Caesars to retain its guest data and places no restrictions on Caesars’ marketing activities. Reno will continue to be part of the Caesars Rewards network during the term of the short-term lease with Buyer.
The transaction is subject to the closing of the Eldorado/Caesars combination, regulatory approvals and other customary closing conditions.
MGM Resorts International (NYSE: MGM) said Tuesday that it plans to sell the MGM Grand and Mandalay Bay properties to a joint venture of MGM Growth Properties LLC (NYSE: MGP) and Blackstone Real Estate Income Trust, Inc. for $4.6 billion.
The Blackstone Real Estate Income Trust will purchase $150 million in MGM Growth Properties Class A shares. MGP will own 50.1% of the joint venture, and BREIT will own 49.9%.
MGM Resorts will enter into a long-term triple net master lease for the MGM Grand and Mandalay Bay and will continue to manage and be responsible for the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments.
The transaction is expected to close in the first quarter of 2020.
“We are pleased to announce this partnership with BREIT, which illustrates the numerous opportunities available to grow our business and emphasizes the strong institutional demand for gaming real estate assets,” MGP CEO James Stewart said in a statement.
“Along with the contemplated cash redemption of $1.4 billion of MGM’s operating partnership units as announced by MGM, we expect this transaction to be accretive to AFFO while allowing us to maintain pro rata net leverage of 5.6x.”
MGM shares were down 0.45% at $33.22 at the time of publication Tuesday. The stock has a 52-week high of $33.87 and a 52-week low of $23.68.
