Tag: protests

United Beats Wall Street Expectations Despite 737 MAX Delays

January 21, 2020 / WIL BALDWIN

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

United Airlines to Record $90 Million Charge Related to Hong Kong Routes

January 7, 2020 / WIL BALDWIN

(Reuters) – United Airlines Holdings Inc <UAL> said on Tuesday it expects 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.

The Hong Kong protests escalated in June over a now-withdrawn extradition bill, but have since developed into a broader movement.

“Due to a decrease in demand for the Hong Kong market and the resulting decrease in unit revenue, the company determined that the value of its Hong Kong routes had been fully impaired,” the U.S. carrier said.

Several airlines including India’s SpiceJet Ltd <SPJT>, Malaysia’s AirAsia Group Bhd <AIABF>, South Korea’s JejuAir Co Ltd <089590> reduced the number of flights to the city in the fourth quarter as the protests grew increasingly violent, disrupting daily life.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta)

Air France Plans to Run Flight Schedule Despite Jan 6-7 Strikes

January 5, 2020 / WIL BALDWIN

PARIS (Reuters) – Air France <AFLYY> said on Sunday it planned to run its entire flight schedule on Jan. 6 and Jan. 7, despite calls by some crew unions to strike as part of ongoing nationwide protests over the government’s efforts to reform the pension system.

“On January 6 and 7, 2020, Air France plans to operate its entire flight schedule,” the airline said in a statement, which also cited discussions between the government and unions that it said had resulted in guarantees for flight crews’ future pension system.

(Reporting by Sudip Kar-Gupta; Editing by Gareth Jones)

An Air France Airbus A319 plane takes off from the Nantes-Atlantique airport in Bouguenais near Nantes

Cathay Pacific Cuts 2020 Capacity Plan as Hong Kong Unrest Continues

November 30, 2019 / WIL BALDWIN

SYDNEY (Reuters) – Hong Kong carrier Cathay Pacific Airways Ltd <CPCAY> plans to cut passenger flight capacity by 1.4% next year, reversing an earlier plan for a boost of 3.1% because of a challenging business outlook, an internal memo reviewed by Reuters showed.

The capacity reduction follows Cathay Pacific cutting its second-half profit guidance earlier this month, the second cutback in less than a month, because of anti-government protests that began in Hong Kong in June that have discouraged travel to the city.

“Given the immediate commercial challenges and the fact that our position has deteriorated in recent weeks, we must take swift action to adjust our budget operating plan for 2020 downwards again,” Chief Executive Augustus Tang said in the memo.

“Put another way, rather than growing our airlines in 2020, for the first time in a long time, our airlines will reduce in size.”

Revenue performance continues to be disappointing and advance bookings into 2020 remain much lower than expected due to weak traffic from some of its key markets, particularly mainland China, the memo said.

A Cathay representative said the carrier had no comment.

Full-service carrier Hong Kong Airlines, backed by indebted Chinese conglomerate HNA, also said on Friday it would further reduce its capacity to mitigate the impact from the political unrest.

Several Asian airlines have also cut flights to Hong Kong, as the protests in the financial hub and an escalating China-U.S. trade war have pushed the Chinese-ruled territory into recession for the first time in a decade.

Hong Kong has enjoyed a week of relative calm since local elections on Sunday delivered an overwhelming victory to pro-democracy candidates.

But protesters stirred support for more rallies over the weekend, as police withdrew on Friday from a university campus where some of the worst clashes with security forces had occurred as part of nearly six months of unrest.

Shares in Cathay rose 0.8% on Friday, outperforming a 2% drop in the broader market.

(Reporting by Jamie Freed in Sydney; Writing by Miyoung Kim; Editing by Clarence Fernandez and Christian Schmollinger)

A passenger walks to the First Class counter of Cathay Pacific Airways at Hong Kong Airport in Hong Kong

Hong Kong to Allow Airlines to Keep Airport Slots Despite Cutting Capacity

November 28, 2019 / WIL BALDWIN

Nov 29 (Reuters) – Airlines that fly to and from Hong Kong will be able to keep their prized airport slots even if they temporarily cut capacity due to weak travel demand through March, according to the Hong Kong Civil Aviation Department.

Many airlines, including flagship home carrier Cathay Pacific Airways Ltd, South African Airways and Malaysia’s AirAsia Group Bhd have cut flights to and from Hong Kong temporarily as a result of sometimes violent anti-government protests that have led to a sharp fall in tourist and business travel demand.

More than 5,800 people have been arrested since the unrest broke out in June over a proposal to allow extraditions to mainland China, the numbers grew in October and November as violence escalated.

Under more normal conditions, it is tough for airlines to get take-off and landing slots at Hong Kong’s airport because it lacks capacity until a third runway will come into operation in 2024.

A “use-it-or-lose-it” rule stipulates an airline normally only keeps slots out of historic precedence if it can demonstrate it used them at least 80% of the time in the previous airline scheduling season.

The current winter season, which began on Oct. 27, ends on March 28, 2020.

Hong Kong’s Civil Aviation Department said in a statement to Reuters on Thursday evening that in order to provide airlines with greater flexibility in aircraft deployment to deal with the fall in passenger demand, the “use-it-or-lose-it” rule had been temporarily suspended for the winter season.

Airport Authority Hong Kong reported declines in October of 13% in passengers and 6.1% in the number of inbound and outbound flights – the steepest falls since the unrest began.

(Reporting by Jamie Freed in Sydney Editing by Marguerita Choy)

Cathay Pacific Shares Fall Nearly 4% After Chairman Resigns

September 4, 2019 / WIL BALDWIN

Slosar attends a news conference in Hong Kong

HONG KONG (Reuters) – Shares in Cathay Pacific Airways Ltd fell nearly 4% in early trade on Thursday following the resignation of its chairman after the market closed on the previous day.

The departure of John Slosar was announced less than three weeks after mounting Chinese regulatory scrutiny led to the shock exit of its chief executive, Rupert Hogg.

Cathay shares had closed 7.2% higher on Wednesday as the Hong Kong market was lifted by reports of the withdrawal of a controversial extradition bill, which was officially announced after the market closed.

Long-serving Swire Pacific Ltd executive Patrick Healy was appointed as Cathay’s new chairman on Wednesday following the resignation of Slosar, who had served in the role since 2014.

“As John would have retired soon anyway it’s not really a huge setback as a business,” an analyst said of Slosar’s departure. “However it’s always awful to see when politics dictate like this.”

The analyst, who was not authorised to speak publicly about personnel changes, said he believed if the political situation in Hong Kong stabilised, the situation at Cathay should as well.

Daiwa Capital Markets analyst Kelvin Lau said the extradition bill’s withdrawal was positive for Cathay, even though protests were not expected to end immediately.

“We expect this to be a turning point where the situation would at least not worsen,” he said in a note to clients, adding that recent personnel changes at the airline should satisfy the requirements of the Chinese regulator and were likely to instill confidence among customers.

China’s aviation regulator last month said crew who engaged in the anti-government protests in Hong Kong posed a threat to safety and should be suspended from staffing flights to the mainland and over its airspace.

(Reporting by Donny Kwok and Jamie Freed, writing by Jamie Freed, editing by Richard Pullin)

New Macau Leader Backed by Beijing

August 25, 2019 / WIL BALDWIN

HONG KONG, Aug 25 (Reuters) – The Chinese territory of Macau elected former legislature head Ho Iat Seng as its leader on Sunday – the sole approved candidate.

Ho, who has deep ties to China, is expected to cement Beijing’s control over the special administrative region and distance it from protests in neighbouring Hong Kong.

He secured 392 votes from a 400-member pro-Beijing committee to lead the world’s largest gambling hub for at least the next five years, public broadcaster TDM reported.

The 62-year-old’s highly scripted appointment comes as the former Portuguese colony tries to position itself as a beacon of stability and model for the Chinese government’s “one country, two systems” formula through which Beijing administers Macau and Hong Kong.

Although anti-government protests have roiled the former British colony of Hong Kong for nearly three months, Macau has seen little dissent to Beijing’s rule.

Ho said local youth could resist the influence of Hong Kong’s protesters and support measures to boost patriotism in Macau.

(Reporting by Farah Master; Editing by Raju Gopalakrishnan)

Cathay Pacific Shares Rise After CEO Hogg Resigns

August 18, 2019 / WIL BALDWIN

HONG KONG (Reuters) – Shares of Cathay Pacific Airways rose more than 2 percent early on Monday after CEO Rupert Hogg resigned in a shock move, as the carrier grapples with the involvement of some of its employees in the city’s anti-government protests.

Cathay’s shares rose as much as 2.3 percent to HK$10.84, their highest in two weeks. The carrier has emerged as the highest-profile corporate target as Beijing looks to quell protests in the territory that have gone on for 11 straight weeks.

Cathay Pacific was blindsided this month when China’s aviation regulator demanded it suspend staff supporting the anti-government protest movement.

(Reporting By Anne Marie Roantree and Donny Kwok; editing by Richard Pullin)

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