Tag: vueling

IAG Ups Bet on Latin America with Air Europa Takeover

November 4, 2019 / WIL BALDWIN

* Buys Air Europa for 1 bln euros

* To be funded by external debt

* Shares rise more than 2%

* To be run by Iberia CEO

* Regulators may set requirements -analysts

Nov 4 (Reuters) – IAG, the parent of British Airways and Spain’s Iberia, announced a 1 billion euro ($1.12 billion) takeover of Spain’s Air Europa to boost its presence on routes to Latin America and the Caribbean.

The deal follows a setback in Latin America for IAG after Chile’s Supreme Court ruled against a plan that would have allowed it to bolster cooperation with partners in the oneworld airlines alliance.

**BA parent IAG ups bet on Latin America with Air Europa takeover**
Ryanair Chief Executive Michael O’Leary attends a Reuters Newsmaker event in London

Chile’s LATAM Airlines in September then announced it planned to leave the alliance, opting instead for a tie-up with SkyTeam member Delta Air Lines.

IAG shares initially rose more than 2% following the Air Europa takeover announcement but some analysts said IAG may have to shed routes in order to win regulatory approval.

IAG shares were up 1.2% at 1315 GMT.

Ryanair CEO Michael O’Leary said his company will ask the UK’s market watchdog to force IAG to make divestments as part of its Air Europa takeover, a deal he said would be bad for competition.

“Potential remedies, perhaps in the form of slot release or behavioural restrictions, may be required and these could impact the potential synergies,” an analyst at Liberum wrote in a note.

IAG also owns carriers Iberia Express, Level, Ireland’s Aer Lingus and Vueling.

“We are not convinced that having just another brand platform is the optimal move, and could see it potentially combining with Level, Vueling or potentially Iberia Express after some time,” analysts at Bernstein said.

FILE PHOTO: An Air Europa-branded Boeing 737 MAX aircraft is seen grounded at a storage area in an aerial photo at Boeing Field in Seattle

Air Europa serves 69 destinations, including long-haul routes to the Americas and the Caribbean. It had a fleet of 66 aircraft at the end of 2018.

Air Europa’s Spanish parent company Globalia earlier this year received authorisation from the Brazilian government to explore the possibility of flying domestic routes within Latin America’s largest economy.

It is unclear if that authorisation will remain with Globalia or be transferred to IAG.

Air Europa will initially keep its brand and as it gets integrated into the existing hub at Madrid it will be a standalone operation run by Iberia boss Luis Gallego, IAG said.

It will also withdraw Air Europa from the SkyTeam alliance once the deal is completed. Air Europa has a joint venture with Air France-KLM.

“This is of strategic importance for the Madrid hub, which in recent years has lagged behind other European hubs,” said Gallego, adding that Madrid had the potential to serve as a gateway between Asia and Latin America.

IAG said it expected the Air Europa deal, which will be funded through external debt, to close in the second half of next year and for it to add to its earnings in the first full year after the closure.

($1 = 0.8951 euros) (Reporting by Yadarisa Shabong in Bengaluru; additional reporting by Andres Gonzalez in Madrid and Marcelo Rochabrun in Sao Paulo, editing by Patrick Graham and Jason Neely)

An Air Europa Boeing 737 airplane takes off at the airport in Palma de Mallorca

Boeing 737 MAX Boosted by IAG Plan to Order 200 Jets

June 18, 2019 / WIL BALDWIN

PARIS, June 18 (Reuters) – Boeing’s grounded 737 MAX jet received a boost on Tuesday after British Airways-owner IAG signed a letter of intent to order 200 of the planes and said it was confident that it would return to service in the coming months.

Boeing said the deal had a value of more than $24 billion at list prices.

IAG said the mix of 737-8 and 737-10 aircraft, to be delivered between 2023 and 2027, would be powered by CFM Leap engines and used across a number of its airlines including British Airways, Vueling and Level.

The MAX 737 was grounded in March following two deadly crashes, and Boeing has been working on a software fix to get the jet back flying by the end of the year.

IAG Chief Executive Willie Walsh said he had experienced Boeing’s MCAS anti-stall software in person, adding it was “very helpful to see it in operation” and to “understand the changes” that Boeing was proposing.

“It gave me confidence both in terms of the aircraft and the changes that Boeing introduced,” he said at the announcement of the deal at the Paris Airshow.

“I am confident in Boeing.”

Boeing shares rose 2% on the announcement. The company is working towards a certification flight with regulators soon.

Boeing commercial airplanes boss Kevin McAllister said the decision of when the MAX flies again was in the hands of the regulators.

(Reporting by Tim Hepher, Eric M. Johnson and Alistair Smout Editing by Jane Merriman and Mark Potter)

BA Owner IAG Expects No Earnings Growth in 2019

February 28, 2019 / WIL BALDWIN

LONDON, Feb 28 (Reuters) – British Airways owner IAG said it expected earnings in 2019 to be flat after it weathered the impact of rising fuel costs and air traffic control disruption to meet expectations for its 2018 results on Thursday.

IAG reported a 9.5 percent rise in operating profit before exceptional items for the year to December 31 to 3.23 billion euros, but said there would be no growth in 2019 as earnings would be in line with the previous year’s results.

“This was a very good performance despite three significant challenges: fuel prices increasing 30 percent, considerable Air Traffic Control disruption and an adverse foreign exchange impact of 129 million euros,” Chief Executive Willie Walsh said.

IAG said that passenger revenue rose 6.2 percent across the group, with passenger unit revenue up 2.4 percent.

In a separate statement, IAG said it would order 18 Boeing 777-9s and options for 24 more for British Airways to replace 14 747-400s and four 777-200s between 2022 and 2025.

(Reporting by Alistair Smout, editing by James Davey)

International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. The company operates under the British Airways, Iberia, Vueling, LEVEL, IAG Cargo, Avios, and Aer Lingus brands.

IAG Rules Out New Bid for Norwegian Air

January 24, 2019 / WIL BALDWIN

LONDON/OSLO (Reuters) – British Airways owner IAG (ICAG.L) said on Thursday it would not make a new bid for Norwegian Air (NWC.OL) and would sell its remaining stake in the budget airline, sending Norwegian’s shares sharply lower.

Shares in Norwegian, which has been under pressure over the past 18 months to control costs and shore up its balance sheet, dropped as much as 26 percent after IAG’s statement to hit their lowest since November 2012.

“International Airlines Group (IAG) confirms that it does not intend to make an offer for Norwegian Air Shuttle ASA and that, in due course, it will be selling its 3.93 percent shareholding in Norwegian,” IAG said in a statement.

IAG’s shares turned positive after its statement, and were up 1.5 percent at 1305 GMT.

Norwegian, which has shaken up long-haul rivals by offering cut-price transatlantic fares, said in May it had received two conditional proposals for a full takeover from IAG, but had rejected them because they undervalued the company.

IAG CEO Willie Walsh last year ruled out launching a hostile takeover approach for Norwegian, and also said he wouldn’t get drawn into a bidding war. In addition to British Airways, IAG also owns Iberia, Vueling and Aer Lingus.

A spokeswoman for IAG declined to give further details on the decision not to pursue Norwegian further, but said “we wish Norwegian every success in the future”.

NO MARGIN OF ERROR

“Norwegian’s plans and strategy remain unchanged. The company’s goal is to continue building a sustainable business to the benefit of its customers, employees and shareholders,” Chairman Bjoern Kise said in a statement.

Norwegian has quickly built its long-haul route network, and in October overtook IAG’s British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area.

But the Nordic carrier has had to take action to improve its financial position in recent months. In December, it announced a $230 million cost savings programme and refinanced one Boeing (BA.N) 787 Dreamliner as part of a series of steps it said would generate more than $30 million in liquidity.

“Norwegian’s finances are already under pressure, and a share sale (by IAG) will put pressure on the stock, making it hard for them to raise money,” analyst Per Hansen of brokerage Nordnet said in a note to clients.

“They no longer have any margin of error. If they were to need cash, and no alternative buyers emerge, the stock price could end up looking like a jetliner running out of fuel.”

(Reporting by Alistair Smout in London and Terje Solsvik in Oslo, additional reporting by Helen Reid in London and Stine Jacobsen in Copenhagen, Editing by Paul Sandle and Mark Potter)

British Airways Loses New York Crown To Norwegian

October 8, 2018 / WIL BALDWIN

LONDON (Reuters) – Norwegian Air Shuttle (NWC.OL) has overtaken British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area, in the latest illustration of the low cost carrier’s move into British Airways territory.

Norwegian carried 1.67 million passengers to or from airports in the New York area in the 12 months to the end of July, compared with the 1.63 million carried by British Airways, data from the Port Authority of New York & New Jersey showed.

No-frills carrier Norwegian has been rapidly expanding in the transatlantic market over the last five years, prompting the owner of British Airways, IAG (ICAG.L), to try to buy it earlier this year.

The data showed four U.S. airlines, led by United, are the biggest carriers of international passengers out of the main airports in the New York area, which include John F. Kennedy International, LaGuardia and Newark Liberty International.

Air Canada is the biggest non-U.S. carrier of international passengers, but its dominance is on travel between the United States and Canada.

Norwegian, and other relatively recent entrants to the market such as Wow Air, have led a charge to shake up Europe’s long-haul flight market, offering ticket prices that can be as little as half those charged by traditional carriers.

The traditional airlines have responded by selling a new budget class of ticket, as well as setting up, in IAG’s case, new airline Level to compete directly with Norwegian on price.

Lufthansa has also started budget long-haul flights using its Eurowings brand.

Norwegian said in May it had rejected two approaches from IAG, which also owns the Iberia, Aer Lingus and Vueling brands, because they undervalued the company. IAG owns a 4.6 percent stake in Norwegian.

The pace of Norwegian’s growth – figures from July 2017 show it only carried 750,000 passengers into and out of the New York region – has weighed on its finances and it faces mounting pressure to control costs and shore up its balance sheet.

British Airways did not immediately respond to a request to comment on the figures.

(Reporting by Sarah Young; Editing by Mark Potter)

Will IAG buy Norwegian

April 12, 2018 / WIL BALDWIN

Parked Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air are pictured at Stockholm Arlanda Airport March 6, 2015. REUTERS/Johan Nilsson/TT News Agency

By Sarah Young

LONDON (Reuters) – British Airways-owner IAG (ICAG.L) said it is considering making an offer for Norwegian (NWC.OL), a low-cost carrier worth about $1.2 billion, in a deal which would expand its budget offerings and give it control of a struggling rival.

IAG said on Thursday it had bought a 4.61 percent stake in Norwegian as a platform for starting talks, and that could lead to it making a full offer for the airline founded by former fighter pilot Bjorn Kjos.

“IAG confirms that no such discussions have taken place to date, that it has taken no decision to make an offer at this time and that there is no certainty that any such decision will be made,” IAG said in its statement.

Shares in Norwegian, a stock which this year has been pounded over worries about its profitability, surged 37 percent on the news. https://reut.rs/2qqcSn6

A trailblazer of low-cost long-haul flying in Europe, Norwegian has been leading the charge to eat into the trans-Atlantic market where traditional full-service carriers like British Airways have historically made most of their profits.

Norwegian has already made its impact felt: British Airways and others have recently tried to compete more directly with Norwegian by introducing basic economy fares.

But Norwegian’s fast expansion has left it under pressure to control costs and shore up its balance sheet.

That has provided IAG, formed in 2011 through the merger of traditional flag-carriers British Airways and Iberia and led by CEO Willie Walsh, with an opportunity, say analysts.

Seasoned deal-maker Walsh was much quicker than rival full-service airlines Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE) to embrace budget flying, buying short-haul carrier Vueling in 2015 and setting up IAG’s own long-haul low-cost carrier Level last year.

“Willie Walsh has long been interested in the low-cost long haul concept, long before the creation of Level. This may be an attempt to accelerate its development, while also adding to the scale and reach of Vueling in the intra-European market,” Liberum analyst Gerald Khoo said.

Adding Norwegian’s short-haul operations in Europe to Vueling would create a budget carrier better placed to compete against the continent’s two biggest low-cost airlines Ryanair (RYA.I) and easyJet (EZJ.L).

Bernstein analysts said a full takeover could be expensive but suggested a partnership deal would benefit both parties.

“A partnership that looks to maximize the synergies of the two networks, minimise duplications of capacity and investment on key routes, and use IAG’s travel management capabilities to improve Norwegian’s expertise in this area could all provide some of the benefits of consolidation without the likely high cost of a deal,” they said.

NORWEGIAN UNDER PRESSURE

Highlighting the difficult state of Norwegian’s finances, the airline last month raised $168 million in a share sale after warning of a larger than expected first-quarter loss.

Norwegian said in its statement on Thursday that it had no prior knowledge of IAG’s actions, but welcomed the investment.

“Norwegian believes that IAG’s interest in the company confirms the sustainability and potential of our business model and global growth,” it said.

Norwegian’s shares, temporarily halted after the IAG news, rose as much as 39 percent to 250 crowns when they resumed trading, valuing the company at 9.5 billion Norwegian crowns ($1.22 billion).

Whether it proceeds with an offer for Norwegian or not, through its new investment, IAG will at least be well-placed to influence its rival.

“If there is no imminent bid for Norwegian, IAG is just the first vulture to have landed that would like a say in how Norwegian’s long-distance fleet … is dismantled and sold,” Norne analyst Karl Johan Molnes said.

There will be no buying Norwegian on the cheap, however, said SEB analyst Jo Erlend Korsvold.

Even after Thursday’s rally, Norwegian’s founder and top owner, CEO Kjos who controls a quarter of the company’s shares, is expected to demand a significantly higher price before selling, said Korsvold.

Kjos was not available for comment when contacted by Reuters.

IAG’s interest in Norwegian would see a wave of consolidation in European air travel which started last year extend its reach to long-haul travel.

Lufthansa and easyJet expressed interest in Italy’s struggling Alitalia [CAITLA.UL] this week.

Ryanair last month agreed to buy a majority stake in a new Austrian leisure airline founded by Formula One former champion Niki Lauda, while easyJet bought a parts of failed airline Air Berlin last year.

Shares in IAG initially dropped 3.4 percent on the news before recovering to trade down 0.7 percent at 611 pence. The company has a market capitalisation of about 12.6 billion pounds ($17.89 billion).

($1 = 7.7844 Norwegian crowns)

($1 = 0.7043 pounds)

(Reporting by Sarah Young, additional reporting by Terje Solsvik and Ole Petter Skonnord in OSLO and Victoria Bryan in BERLIN,; editing by Kate Holton and Adrian Croft)

London Luton Airport sets new January traffic record

February 13, 2018 / WIL BALDWIN

London Luton Airport has started the new year like it ended the last, with record traffic figures, as it handled over one million passengers in January for the first time in its history.

In total, 1,021,954 passengers (+3.6%) passed through the gateway in January to ensure that it has welcomed over one million passengers every month for 12 consecutive months.

Airport CEO, Nick Barton, says: “Last year was another record breaker at LLA, and we look forward to welcoming even more passengers as we enter our 80th year.

“Throughout 2018, passengers will see the airport transformed as we officially open our new terminal and reach the first phase of construction for the Mass Passenger Transit system, which will replace the current shuttle bus and create a rapid link between the train station and the terminal.

“However, this is only part of the solution to better public transport links and is why we continue to call on the government for four fast trains per hour between central London and Luton Airport Parkway.”

The newly expanded terminal will add eight new boarding gates and a greater variety of shops and restaurants.

The airport notes that passengers will also benefit from an increased number of destinations served from LLA due to the launch of a number of new routes in 2018.

They include Wizz Air introducing eight new services to cities such as Athens, Larnaca, Keflavik and Bari; and new easyJet routes to Genoa, Reus and three other destinations.

This follows a significant expansion of LLA’s route network in 2017, which saw the addition of 22 new routes, meaning that passengers can now choose from more than 140 destinations across Europe, Asia and Africa.

Formula One Champ Niki Lauda Rescues His Old Airline

January 25, 2018 / WIL BALDWIN

The former Formula One champion Niki Lauda has rescues the airline named after him. Niki, formerly Aero Lloyd Austria, was acquired by Lauda and renamed in 2003 before being partnered with Air Berlin a year later. He later sold the airline to the larger Air Berlin in 2011, where it ferried Austrian and German sun-seekers to Mediterranean beaches.

Click the link below for the full story!

Niki lauda rescues his old airline

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