January 2010
Japan Airlines (JAL) might post a 2009 full-year loss of $13.3B based on a massive restructuring charge says the Nikkei business daily.
JAL has made a loss in four of the last five years, has debts of $16B, and has been bailed out by the Japanese government four times.
JAL applied for a bailout from the Enterprise Turnaround Initiative Corp of Japan (ETIC) in October 2009.
JAL is expecting a $3.3B bailout from the ETIC as part of a planned bankruptcy filing.
IATA will now have to change its projected 2009 $11B loss for the 230 airlines it represents in 120 countries that carry 93% of the world’s international scheduled traffic.
IATA is forecasting a net loss of $5.6B for the airline industry in 2010 vs. the $3.8B predicted earlier in 2009. The 2010 projection may have to be revised.
JAL is Asia's largest airline by revenue.
Cyprus Airways will lease three A320s from CIT.
Hawaiian Airlines carried 8.3M passengers in 2009 vs. 7.9M in 2008.
Southwest Airlines reports traffic (RPMs) rose 1.3% in 2009 vs. 2008 on 5.1% lower capacity; however, enplanements were down 0.6%.
Ryanair has cash reserves of $3.6B and expects that to grow 'substantially' by March 2013 because of the planned cut back in aircraft buying.
Ryanair rejects speculation that it was preparing a third bid for Aer Lingus after pulling out of talks to buy 200 aircraft from Boeing.
Ryanair has cash reserves of $3.6B and expects that to grow 'substantially' by March 2013 because of the planned cut back in aircraft buying.
Aer Lingus Group (Ireland) formalized its code-share agreement with United Airlines to jointly operate scheduled service beginning 28 March 2010.
Mesa Air Group bankruptcy: Mesa (Founded 1982, Phoenix) filed for CH 11 to eliminate surplus aircraft and reach a faster resolution in its lawsuit against Delta.
Mesa says it faces an untenable financial situation because of aircraft leases that are excess to requirements.
Mesa is suing Delta Air Lines for $70M for breach of contract.
Mesa operates 130 aircraft with over 700 daily departures to 127 cities, 39 states, Canada and Mexico.
Mesa operates as US Airways Express, Delta Connection, and United Express under contractual agreement with US Airways, Delta, and United.
Mesa also operates independently as Mesa Airlines and Go!-Mokulele (Hawaii). Go!-Mokulele is not filing for CH11.
Mesa operations: Between 1995 & 2000, 95% of Mesa’s flying came from operations associated with code sharing agreements with Major carriers.
Mesa operations: From 2000 to date, 75% of Mesa’s flying comes from revenue guarantee contracts with US Air, Delta, and United.
Mesa operates a fleet of 130 aircraft including CRJ100ER/LR, CRJ200ER/LR, CRJ700, CRJ900, Dash8, ERJ145 & Beechcraft 1900. Mesa has 10 aircraft on order and 106 on option.
Mesa’s agreement with United for 26 CRJ200s and 10 Dash 8s expires in April 2010.
Fleet surplus: Mesa expects to park 26 CRJ200s and 10 Dash 8-200s by April bringing the total to 70 stored aircraft.
Mesa may reduce or eliminating its fleet of ERJ-145s and CRJ200s according to a report from AAR.
Mesa & manufacturer relationships: In 2001, Mesa became the launch customer for the 86-seat Bombardier CRJ 900 & has 38 in service & 60 optioned.
Mesa status: Mesa topped $1B in revenue and moved from “regional” to “national” carrier as measured by the US Department of Transportation.
Turkish Airlines: As part of a fleet expansion plan of 105 aircraft, ordered 14 A321s, six A319s for 2011-2012, option 10 A319/A321s for 2013.
Japan Airlines: State-owned Development Bank of Japan doubles its credit line to $2.1B for Japan Airlines. JAL shares jumped 31% on the news.
Japan Airlines is said to favor the Delta Airlines investment plan as the company president said he is against the bankruptcy option.
American Airlines safety: FAA will increase oversight of American Airlines because of three mishaps in less than a month.
American Airlines aircraft overshot a runway in Jamaica on 22 December and aircraft wingtips touched the ground on landings twice in December.
American Airlines records: The FAA will examine aircraft records, pilot training methods, and increase cockpit inspections.
American Airlines – consequences: The FAA can impose a heavy fine if the incidents under review prove to be cases of systematic weaknesses.
Delta/Northwest merger approved by the FAA approval. They now operate under one certificate, merge reservation & flight schedules, use common technical manuals.
Mesa Air has filed notice with the Securities and Exchange Commission that it is delaying filing its annual results for 2009.
Mesa Air has a large fleet of stored aircraft and hinted at the prospect of a CH11 filing.
Fleet surplus: Mesa expects to park 26 CRJ200s and 10 Dash 8 aircraft by April bringing the total to 70 stored aircraft.
Mesa’s agreement with United for 26 CRJ200s and 10 Dash 8s expires in April 2010.
Mesa may reduce or eliminating its fleet of ERJ-145s and CRJ200s according to a report from AAR.
Mesa is restructuring as it negotiates a contract dispute with Delta and renegotiate 70 aircraft leases.
Mesa Air did expect to report a lower net loss in 2009 than the $29.2M loss reported for the fiscal year to Sept. 30, 2008.
2009 activity: Mesa established a profitable operation in Hawaii, had a costly court battle with Aloha, a contractual dispute with Delta, & lost two flying contracts with United.
December 2009
United Airlines (UAL) will sell $500M in bonds due in 2013, secured by selected routes, slots, and airport gate leases.
Start-up LCC in USA: A new long haul low cost carrier (LCC), California Airlines, will service LAX, Hawaii, Guam & Tokyo using B757s or B767s.
Japan Airlines has made a loss in four of the last five years, has debts of $16B and has been bailed out by the Japanese government four times.
Air Jamaica (Flag carrier), has accumulated losses of $1.2B, has been for sale since 2007 but the Government has not found a buyer.
Caribbean Airlines (Trinidad flag carrier, replaced BWIA in 2007) is the front-runner but is unlikely to meet the sellers’ requirements.
Air Jamaica brand must be maintained, adequate airlift must be provided, the partner must have extensive airline experience, matched with the appropriate capital.
Travel restrictions are on the rise as President Obama works to quell criticism of the government's handling of an attempted Al Qaeda airline attack.
Airlines end a loss-making year facing four challenges, a weak economy, high oil prices, bad winter weather, and terrorist attacks.
Travel anxiety: A Nigerian man was arrested (Sunday) on Northwest in Detroit after locking himself in the toilet. All 256 passengers were deplaned. (AP)
Japan Airlines (JAL) per-share price fell 60% from $2.4 a year ago to $1 today on fears that the bankruptcy is about to happen.
JAL is unable to service its $16B in debt even though the Japanese government has bailed it out four times since 2001.
JAL decision pending: The state-backed fund - Enterprise Turnaround Initiative Corp (ETIC) – will decide in January if it will support JAL financially.
JAL financial aid: Japan’s Finance Minister said Japan would not give the airline any more loans.
ETIC could approve a bankruptcy filing as part of JAL’s financial restructuring.
JAL bankruptcy could make the bid by American Airlines and Delta to buy minority stakes in the carrier more complicated.
Airbus $7B order at risk as Air Comet closes down. It has 12 A321s, 25 A320s, 13 A330s, 10 A350s, and 4 A380s on order from Airbus via parent Grupo Marsans.
Air Comet (Spain) will file for protection from creditors after an attempt to sell the failed airline collapsed.
Air Comet's parent company Grupo Marsans SA reports that the London High Court ordered Air Comet to stop selling tickets and to ground its fleet of A330s.
Grupo Marsans is a subsidiary of Autobuses Urbanos del Sur, SA and it is the largest tourism and transport group in Spain and the fourth largest in Europe.
Air Comet has been suspended from the IATA Clearing House as of 11 February 2009, due to non-payment of January balance.
Flyglobespan (UK) went into administration after E-Clear, the credit card handling company, refused to pay over $58M due to the carrier.
All Nippon (ANA) ordered five B777-200ERs for 2012-2014 delivery and five B767-300ERs for 2010-2012 delivery.
Japan Airlines rescue: Japan will not guarantee loans to the financially distressed airline.
Malaysia Airlines (flag carrier) signed $5B LOI with Airbus for 15 A330-300s and 10 options for delivery between 2011 & 2016.
Malaysia will fund the purchase from a proposed share issue and borrowings.
Malaysia has six A380-800s scheduled for delivery in 2011 for use on long-haul routes.
TAM has acquired Pantanal, a regional airline based in Sao Paulo, Brazil. Established in 1993 and operates five ATR 42s.
Ryanair negotiations with Boeing for an order of up to 200 B737s have been terminated. The aircraft were to be delivered from 2013 to 2016. www.aviationregister.biz
Ryanair still has 112 B737s on order for delivery up to 2013.
Ryanair said there were no plans to re-open talks with Boeing or any other aircraft manufacturer.
Ryanair will significantly reduce its growth and capital spending plans for 2012 through to 2015 & will maximize cash distributions to shareholders.
Flyglobespan (UK) went into administration after E-Clear, the credit card handling company, refused to pay over $58M due to the carrier.
Flyglobespan (Est. in 2002 & Scotland’s biggest airline) has been placed in administration as all flights are cancelled. www.twitter.com/avreg
Flyglobespan operated nine aircraft including B767-300ERs, B737-700s, B737-800s and had B787s leases agreed with ILFC.
Flyglobespan trustee: Bruce Cartwright of PricewaterhouseCoopers has been appointed as Administrator.
Flyglobespan earnings: Flyglobespan claimed to have made an operating profit of $1.8M in 2009 after a loss of $28M in 2008.
Flyglobespan refinancing: Attempts to conclude a re-financing deal with Halcyon Investments (Jersey) failed.
Flyglobespan has a contract with the U.K. Ministry of Defense (MoD) to transport troops to and from destinations such as the Falklands.
Fees cost market share: Southwest says the no-fee policy helped increase its domestic market share by about 1% ($800M to $900M).
Fees for checked baggage added $1.24B in revenue for U.S. airlines in the first half of 2009.
Aercap signed up for two debt facilities totaling $127M, Norddeutsche Landesbank Girozentrale ($67M) to fund 2 A330s, & Natixis ($60M) for investments.
B787 taxi test. Boeing completed high-speed taxi tests on the first B787. The first flight is scheduled at 10 a.m. PST on Dec. 15.
B787 reportedly hit speeds of 150 mph during runway testing and the aircraft performed beautifully.
Sky Holding Co; (Ex Pegasus) & Oaktree Capital Management (Aaron Bendikson) announced a new partnership that will provide capital to airlines around the world.
Sky funding: $500M investment from funds managed by Oaktree and will enable Sky to finance over $2B in aircraft annually.
Rich Wiley, Sky's founder and CEO says Sky Holding Co; sale/leaseback trading will begin in Q1 of 2010.
Sky Holdings & Oaktree between them executed on over $6B in aircraft transactions between 2004 and 2007.
Sky (Rich Wiley is Sky's founder and CEO) is a full-service aircraft leasing company based in San Francisco with offices in Seattle, Miami, and Buenos Aires. A European office will open in 2010.
Sky’s team, which had previously worked together at Pegasus Aviation, has over 90 years of combined industry experience.
Sky’s team, collectively acquired over $10B of aircraft, purchased and/or remarketed over 400 aircraft, and had relationships with 30 l lenders and investment banks.
Oaktree is a premier global alternative and non-traditional investment manager with over $67B billion in assets under management.
Oaktree was founded in 1995 by a group of principals who have worked together since the mid-1980s.
US Administration tells the nation's biggest banks that lending can spur the economy & to take steps to lend to small business and homeowners.
Emirates fleet financing: Dubai’s Emirates Airline says it raised the $1.13B to finance 6 A340s. through Citibank & Doric Asset Finance.
Citibank & Doric helped to fund three of A340s each, the first to be delivered on an Emirates order for fifty-three.
United ordered 25 A350 XWB & 25 B787 aircraft & has options for 50 of each for delivery between 2016 & 2019. www.twitter.com/avreg
United Fleet retirement plan: It will retire its B747s and B767s flying on international routes between 2016 and 2019. www.twitter.com/avreg
United fleet rationale: The A350 has a range 11% greater than the B747, & the B787 has a range 32% greater than the B767. www.twitter.com/avreg
United engine selection: A350 /Rolls Royce Trent XWB engine, and the B787 powered by either the Rolls Royce Trent 1000 or the GE GEnx. www.twitter.com/avreg
United fuel burn advantage: It will reduce its fuel costs and carbon emissions from the 50 aircraft by about 33%. www.twitter.com/avreg
United maintenance advantage: It expects average lifetime maintenance costs for the new aircraft to be approximately 40% lower per available seat mile than the aircraft that will be retired. www.twitter.com/avreg
Japan Airlines 4th bailout since 2001: Japanese government provides $7.7B in loan guarantee other funds from financial bodies. www.aviationregister.biz
JAL need a capital injection from state-backed ETIC, American Airlines or Delta Air Lines to say in business. www.aviationregister.biz
Japanese government loan-guarantee will short-term finding from financial institutions in JAL. www.aviationregister.biz
ETIC (Enterprise Initiative Turnaround Corporation) will decide in January 2010 how much public money to give to JAL. www.aviationregister.biz
JAL’s Equity offer: Delta has offered a $1.1B package, American and TPG (Hedge fund) offered a $1.1B deal. Expect a decision by end 2009. www.aviationregister.biz
Cargolux shareholders approved the issue of $200M in new shares as part of a turnaround plan. www.aaviationregister.biz.
Cargolux: The first $100M capital injection will be concluded by the end of 2009. www.aviationregister.biz
Cargolux will now modernize its fleet with more efficient and less polluting aircraft starting in 2010. www.aviationregister.biz
Luxair, BCEE, SNCI bought SAirlines 33.7% stake in Cargolux. www.aviationregister.biz
Luxair, BCEE, SNCI and Luxembourg State are Cargolux shareholders and SAirlines is part of defunct Swissair Group. www.aviationregister.biz
JAL’s corporate credit rating was cut by S&P to “selective default” from “CC” after it missed payments on bank loans. (www.aviationregister.biz)
JAL reached an agreement with creditors on Nov. 20 to proceed with out-of-court talks with creditors as it restructures outstanding debts.
JAL creditors agreed the carrier could ceases payments on certain obligations for a period of these negotiations.
JAL needs $1.4B in loan commitments before April 2010 to stay in business.
Aer Lingus board has decided to cut $140M worth of costs from the airline after management and unions failed to reach agreement on alternative plans. (www.aviationregister.biz)
Aer Lingus will cut capacity and eliminate unprofitable routes. (www.aviaationregister.biz)
United management change: John Tague (47)' has been appointed as president of United, the first airline professional appointed to that post in years.
Tague, whose father was an airline operator, worked for Midway, Air South, Vanguard & ATA. None existed before deregulation, and none operates today.
November 2009
Recovery: Projections for 2010 Global GDP recovery are in the 2% range vs. The 7% growth experienced in recoveries from earlier deep recessions.
Recovery in Air Transport: An average global GDP growth rate in the 2% range for 2010 is inadequate for the airline industry to return to profitability.
Sunday 29th November 2009
Dubai fallout: Indians form 42.3% of the population of Dubai and major layoffs would affect remittances and travel to India.
Dubai is serviced by an estimated 95 airlines including many major flag carrier and low cost carriers servicing the Middle East.
Carriers at risk from lost Dubai revenue: Air Arabia, Air India, IndiGo, Jazeera Airlines, Kingfisher, and RAK Airways.Friday 27th November 2009
Dubai, in default, has total government debt estimated at $80B & about 65% of that is held by local investors.
Airbus, Boeing, GE/Pratt, & Rolls-Royce have commitments from Dubai Aerospace and Emirates Airlines for orders valued in excess of $87B.
Airbus and Boeing production lines for the A320, A350, A380, B737NG, B777, and B747 have slots allocated to Dubai Aerospace and Emirates Airlines.
Dubai decision to restructure Dubai World debt affects aerospace banks: Barclays, HSBC, RSBC, Deutsche Bank and ING Group.
Dubai Aerospace subsidiary DAE Capital has an aircraft portfolio comprising 37 single aisle and wide-body aircraft.
DAE Capital has 24 aircraft delivery commitments of which 15 are being purchased for lease back to existing operators.
DAE Capital has committed to invest $27B that will include 100 A320s and A350 XWBs, 100 B737NGs and wide-bodies for delivery from 2010.
Emirates Group is owned by the Government of Dubai via the Investment Corporation of Dubai.
Emirates Group is headquartered in Dubai and is a public international travel and tourism conglomerate holding company.
Emirates Group has 50 business units and employs about 48,000 people.
Emirates Group owns Emirates Airline, the national airline of Dubai and the largest airline in the Middle East.
Emirates, (Est. ’85 with two leased aircraft) has 137 aircraft, flies to 100 cities, carries 25M passengers, $12B revenues, & $265M profits.
Emirates has invested heavily since 2000 in a state-of-the-art fleet.
Emirates operates four wide-body types: A330, A340, A380, and the B777.
2008(July): Emirates received its first A380-800 and in August 2008, it became the second airline to fly the A380-800.
Emirates has firm orders for 163 aircraft, and options for 70 more, 134 aircraft from Airbus and 39 Boeing aircraft; value $60B.
2000 (April): Emirates was a launch customer for the A380, and ordered five A380-800s and two A380-800Fs.
2001: Announced the largest order in aviation history for 58 Airbus and Boeing aircraft valued at $15B including 15 more A380-800s.
2003: Ordered 21 A380-800s.
2005: Announced the largest-ever order for 42 B777 family of aircraft valued at $9.7B.
2006 (April): Ordered two more A380-800s & cancelled the A380 freighter orders.
2006: Signed a Heads of Agreement for 10 B747-8Fs fitted with GE’s GEnx engines, and valued at $3.3B.
2007: Announced a historic civil aviation aircraft order for 120 A350s, 11 A380s, and 12 B777-300ERs, valued at $34.9B.
2007, Emirates A380-800 order book now stood at 58.
2007 Order: Comprises firm orders for 50 A350-900s and 20 A350-1000s, plus 50 options for the A350-900s, delivered begin in 2014.
2007 Order: Emirates brought its total firm order for the A380s to 58.
2009: With the new order for 12 777-300ERs, valued at $3.2B, Emirates has 48 pending delivery and is set to become the world’s largest B777 operator.
Gulf International Bank (Saudi owned) postponed a bond auction scheduled for next week.
Dubai World is the main investment vehicle owned by the government of Dubai.
Dubai World is unable to redeem $3.5B of Islamic bonds (sukuk) in December and will not be able to pay it until at least May 2010.
Dubai World Islamic bond issue was one of the largest ever issued.
United Arab Emirates government failure to support Dubai undermined the assumption that the
Emirates would stand behind the debt of state owned companies.
Dubai rating: Standard & Poor’s has downgraded Dubai based banks with exposure to state owned companies.
Credit insurance: The cost of insuring Dubai’s debt has increased 400% since the Dubai World default was announced.
October 2009
China's cargo industry is consolidation to contain heavy losses.
Rates: CAAC is promoting mergers, approving increased freight rates and providing subsidies in to help airfreight operators turn a profit.
China has nine cargo carriers that operated an estimated 70 freighter aircraft.
China’s logistics giant Sinotrans signed a cooperative agreement with China Eastern Airlines (CEA).
Sinotrans may sell a stake in its Grandstar Cargo to CEA or Air China.
Grandstar is a JV cargo airline with Korean Air (25%) set up in 2008.
Air China may form a cargo JV with Cathay Pacific in Shanghai in 2010.
CEA subsidiary China Cargo Airlines may merge with Shanghai Cargo Airlines once CEA completes its takeover of Shanghai Airlines.
Profits: China's airlines reported an $897M profit for the 1st nine months of 2009 vs. a loss of $813M in the year-ago period.
Profits & China: CAAC says total operating revenue fell 2.2% in the 1st nine months and operating expenses fell 3.8%.
Passenger & China: Boarding’s increased by 20% to 170M for the 1st nine months of 2009 and load factor increased to 75.9%.
Cargo & China: CAAC says cargo traffic rose 0.4% to 3.1M tones, for the 1st nine months of 200, the first growth reported in 2009.
Japan Airlines gets government approval for $1.1B in emergency loans to stop grounding of flights.
Gulf Air, national carrier of the Kingdom of Bahrain and the Sultanate of Oman, has announced a 24 months (2012), $825M restructuring program.
Gulf Air estimates the changes will save the Bahraini Government up to $2.65B in financial support over the next five years.
Gulf Air: In September, the government of Abu Dhabi withdrew from Gulf Air as a shareholder in order to focus on Etihad Airways, launched in 2003.
Gulf Air is losing more than $1M a day, a figure that if other costs such as financing were added could be substantially higher.
Gulf Air has accumulated losses and costs up to 2007 of $675M.
Gulf Air will downsize by 25%, move to an all-Airbus fleet and the network will be fundamentally restructured.
Gulf Air will refurbish the cabins of its existing Airbus aircraft and its ground facilities, such as lounges.
Gulf Air has 20 A330s on order.
Gulf Air is in discussions with Boeing about realigning its existing order for B787s.
Gulf Air ordered 16 B787s valued at around $4B and took options for eight (+$2B) for delivery from 2016.
Gulf Air will add to its fleet of 15 A320s it ordered in May 2008 "whilst reducing its requirement for wide body aircraft.
Gulf Air will add regional jet aircraft as early as 2010 but it has not announced the preferred type.
US Airways said it will defer delivery of 54 Airbus aircraft that had been previously set for between 2010 and 2012 to 2013 and beyond
US Airways: This move will cut its aircraft spending by about $2.5B over the next three years.
US Airways: A350 XWB operations, deliveries will be delayed from 2015 to 2017.
US Airways will continue to operate aircraft it had previously scheduled to replace until 2017.
US Airways will take delivery of two A320s and two A330s in 2010 and 24 A320s in 2011 and 2012.
Air India subsidy: Indian government will inject $1.12B into the ailing national carrier to be paid out in phases.
Air India lost $875M in the fiscal year ending in March 2009.
Air India must agree to restructure the business, boost revenues, and cut cost by $650M spread over two years.
Southwest Airlines reported a Q3 loss $16M vs. a $120M loss in the year ago period.
Japan Airlines (JAL) is seeking its fourth state bailout since 2001 but lenders may reject requests for a large debt write-off.
JAL is reported to wants $3.4B in debt relief a claim denied by the carrier.
Fares: U.S. carriers will try to implement domestic airfare increases in Q4 in addition to the surcharge some carriers will apply for travel during holiday season.
Mokulele (Majority owned by Republic), agreed a JV with Mesa Air Group, the parent of go! to create Hawaii's second-largest carrier.
Mesa Air will own 75% of the new venture, while Mokulele shareholders will get 25%.
Mokulele shareholders will fund up to $1.5M to capitalize the deal. Republic will forgive Mokulele's $3.1M in debt. Jet Airways is the largest airline in India by passenger numbers.
Jet Airways has an estimated debt burden of around $3B as of July 2009.
Jet Airways needs to reduce its debt burden so that it can go ahead with international expansion plans.
Jet Airways’ plans to raise $400M in equity from foreign institutions has been approved by the Foreign Investment Promotion Board (FIPB).
Jet Airways is also planning to raise $200M through the sale of land.
FIPB is the Indian government arm that clears foreign investment proposals.
If Jet raises the $400M, the holding of Jet Airways chairperson Naresh Goyal, will shrink significantly from the current 80%.
Jet Airways refinancing plan requires Cabinet clearance.
Jet Airways’ issue of fresh capital to foreign investors faces a 49% cap on foreign direct investment and a ban on selling a stake to foreign airlines.
Far Eastern Air Transport (FAT) (Taiwan) is to resume operations under new management.
After Huafu Enterprise Co
FAT financial difficulties forced the carrier to suspend operations in 2008 but it did not declare bankruptcy.
Taiwan’s Civil Aeronautics Administration rescinded FAT’s international flight rights but FAT can resume domestic flights by the end of 2009.
Aer Lingus' long-haul operations are in serious jeopardy as the Irish airline tries to return to profitability.
Aer Lingus: Says 70% of losses can be attributed to long-haul operations and there is a real risk that it will not be able to continue them.
United, Aer Lingus plan to move ahead with their trans-Atlantic route joint venture.
Avianca (Columbia) (2/3rd) and -based TACA (El Salvador) (1/3rd) will form a holding company to cut costs and bolster market influence in South America.
Avianca/TACA brands will remain separate with combined revenues of $3B.
Avianca/TACA has a combined fleet of 129 aircraft serving 100-Plus destinations in Americas and Europe.
Avianca’s owner is German Efromovich, Brazilian- Colombian-businessman and the Kriete family owns TACA.
September 2009
JAL: Will cut operating costs by 30% over the next three years, to March 2012.
JAL is forecasting losses of $700M through to the end of March 2010.
AMR Corp, parent of American Airlines will issue $500M worth of stock and debt to raise cash as it prepares for the slower winter travel season.
AMR will issue 34M shares & sell $287.5M in senior convertible notes converted.
Citigroup, Morgan Stanley, and UBS are managing the AMR debt & equity offerings.
AMR unit revenue to fall 14.3%-15.3% year-over-year, based on a US Securities and Exchange filing Friday.
AMR expects to end Q3 with a cash and short-term investment balance of at least $3.7B, including $460M in restricted cash and short-term investments.
AMR's Q3 consolidated unit cost is expected come in at 12.83 cents and AA mainline at 12.28 cents, down 12.2% from the year-ago quarter.
AMR’s CASM excluding fuel will rise in both Q3 and full year. It expects to have special items of $94M in Q3 and $180M for the full year.
AMR raised $2.9B in financing last week and its shares rose 20%.
AMR arranged the $2.9B financing by selling frequent-flier program to Citi, mortgaging aircraft & doing sale-leasebacks on future aircraft deliveries.
AMR sold $1B frequent-flier miles to Citigroup, which offers an American-branded credit card.
AMR raised $1.6B from the sale & lease back of ordered Boeing aircraft to General Electric.
Porter Airlines, a Canadian regional airline, owned by the Deluce family, increased its fleet by 30% to 18 Q400s from a year earlier.
Air France-KLM is to reduce seating capacity by 2% during the winter season because of falling demand.
Japan Airlines: Nikkei Business Daily reports that JAL creditors are to seek government agreement for a major restructuring of the carrier.
JAL may be broken up and the loss making businesses may be placed in a separate operating unit.
Aeroflot will cut its workforce by 13% (2,000 jobs) in the next six months and more job losses will follow.
Aeroflot profits plunged due to lower passenger numbers, losses at its cargo operation and higher fuel costs.
Aeroflot, 51% Russian government owned, net profit fell by 88% to $37M in 2008, down from $313M in 2007.
BOC has 127 aircraft out on lease and 64 new aircraft on order.
CX/BOC deal is the largest sale-and-leaseback arrangement in Cathay's history and is consistent with CXs cash-preservation priority.
CX/BOC sale-and-leaseback covers six B777-300ERs due for delivery between Q4 2009 and Q2 2011
CX arranged an aircraft sale-and-leaseback deal with BOC Aviation (BOC) to increase its liquidity.
CX has no plans to cancel aircraft orders but it is negotiating delivery deferrals.
CX has 39 aircraft due for delivery through 2012. CX has 19 B777-300ERs on order from Boeing.
CX fleet consists of 97 owned and 25-leased aircraft.
CX will sell its 20.7M shares in HAECO, or 12.5% of its holding, for approximately $245M to Swire Pacific.
Cathay Pacific (CX)/HAECO) deal will reduce CXs share in the MRO HAECO to 15% & increase Swire's holding to 46%.
Delta Air Lines is planning a private offering of $500M of senior secured notes due 2014.
Delta is using the offering, together with initial borrowings under its proposed new senior secured credit facilities, to repay all outstanding borrowings under Northwest's senior corporate credit facility and to use any remaining net proceeds for general corporate purposes.
Cathay Pacific will sell part of its stake in maintenance company HAECO to parent Swire Pacific for USD$245M to raise needed cash.
Delta is to become the biggest shareholder in Japan Airlines (JAL), Asia's largest airline by revenue.
JAL reported a $563M operating loss for the year to March 2009 and is forecasting $653M loss through to March 20110.
JAL has received $1Bn in credit facilities backed by the Japanese government and is reporting its second successive year of losses.
Japan Airlines (JAL) is restructuring under state supervision.
SIA and Airbus reached an agreement to delay the delivery of eight A380s as much as one year
SIA operates nine A380s, with two more due for delivery in the fiscal year ending March 31, 2010.
Singapore Airlines (SIA) lost $210Bn in its fiscal Q1 ended June 30, its first loss since 2003. It cut capacity by 13.7% including three B747-400s during the quarter.
Austrian-Lufthansa merger is completed as Lufthansa considers the sale of its share in BMI. BA and Virgin Atlantic are considered to be potential buyers.
August 2009
Qantas is cutting costs by $1.2 Bn over three years in response to its first loss in six years that resulted from 8.7% drop in annual revenues.
Air China is to add to its 17.5% share in Cathay Pacific by buying a 13% block for $765M from CITIC Pacific. Swire Pacific will remain the largest shareholder in Cathay.
Air France A380 flight from Paris Charles de Gaulle to New York JFK on November 23 will be the first to fly transatlantic between Europe and the US.
Air India may cancel six new B777s part of the 2006 order for 23 B777s, 27 B787s & 18 B737-800s.
American Airlines parent AMR Corp. closure a $276M private placement offering of senior secured notes due 2016 in part to be used to refinance debt due for repayment in October.
ANA emergency $315M income recovery plan through March 2010 based on cutting domestic routes & implementing a la carte items to achieve a full-year profit of $280M.
ANA It reported a $28M net loss in fiscal Q1 ended June 30
Austrian Airlines Group said it is "highly probable" that its deal with Lufthansa will be by the end of September the latest now that the EU Commission approved the merger.
China Southern Airlines is selling 6 A300-600Rs + 5 PW4158-3 engines and spare parts for $124M.
Jazeera Airways (Kuwait), an LCC, reported a Q2 loss of $4.5M vs. a loss of $3.1M in Q2 of 2008.
Korean Air Lines Q2 net income was $64M vs. a net loss of $235M a year earlier as sales fell 16% to $1.68 Bn.
Norwegian: US lender Private Export Funding Corp., supported by the US Export-Import Bank is providing a term loan for 7 B737-800s scheduled for delivery between this summer and winter 2010.
Ryanair reached agreement with BNP Paribas, Calyon, and Sumitomo Mitsui Banking Corp. for the $1.6 Bn Ex-Im funding agreement financing 55 B737-800s scheduled for delivery between November 2009 and October 2010.
Thai Airways reported a Q2 $158.6M loss resulting from falling passenger demand, foreign exchange losses, political unrest, & the H1N1 flu outbreak.
July 2009
Ethiopian Airlines ordered 5 Boeing B777-200LRs ($1.3Bn) & 12 Airbus A350-900s ($2.9Bn). Deliveries of the B777-200LRs begins in October 2010 & the A-350-900s in 2017.
Virgin Blue (Australia) raised $111M in fresh equity & plans to raise a further $82M aimed at building up cash reserves to protect against losses from weak travel demand & expansion of international routes.
Virgin Blue lost $138M in the year ending June 2009 and is projecting breakeven results for fiscal year 2010.
Ryanair Q2 net income was $175M & is picking up former full-service travelers as the worst recession in half a century prompts fliers to seek better deals.
Ryanair (Dublin) CEO of Europe’s largest LCC says he is willing to fill seats at almost any price over the fall and winter as he withdraws more capacity from the UK.
Jet Airways cut flights to the U.S. and other long-haul destinations in a move to cut cost by $600M through the end of the year.
Jet Airways cut flights to the U.S. and other long-haul destinations in a move to cut cost by $600M through the end of the year.
Jet Airways generating lower yields due to intense competition and over capacity in the Indian market, interest costs and finance charges.
Air India: Government owned parent company NACI has to submit a cost cutting proposal as part of a bailout plan.
Iran Air: Concluded agreements to buy 400 TU-154s, TU-204s and replace 70 old aircraft say Iran Air CEO.
Virgin Blue (Australia) forecasts a $136M loss for 2009 vs. $80M profit in 2008 & asks shareholders for $189M equity injection as CEO steps down.
Alaska Air/Horizon Air reported Q2 profits of $29.1M vs. $63.1M for the same period a year ago.
Alaska Air revenue fell to $843.9M vs. $930.8M for the same period a year ago.
Alaska Air traffic fell 2.6% in Q2 as capacity was cut by 4.1%.
Alaska Air has $1.Bn in unrestricted cash and marketable securities sufficient to take it through Q3 and Q4.
Southwest rating: Moody's lowered Southwest Airlines' senior unsecured debt rating to Baa3 from Baa1due to continuing weak fundamentals of the airline sector.
Southwest Moody's believes that weak yields in the North American airline industry will likely constrain Southwest's credit metrics until overall economic conditions materially strengthen.
Southwest full-fare mix is down 5% from a year ago to 18%.
Southwest: Heavy discounting since April has been necessary to stimulate traffic due to the sharp falloff in business travel.
Southwest: Aggressive discounting drove Q2 load factor to 77%, which was close to a record but passenger revenue yields per RPM declined
AirTran (Orlando), a low cost carrier that competes with Delta, reported a net profit of $78.4M profit in Q2 vs. a net loss of $14.8M in Q2 of 2008, helped by lower capacity and fuel costs.
AirTran Q2 revenue decreased 12.9% to $603.7M.
Air Trans Q2 earnings included $31M of unrealized gains on its fuel hedge portfolio, $3.3M gains on debt payoff & $2.4M write-off of capitalized interest on aircraft sales.
Delta, with a Q2 loss of $257M, no longer expects to post a profit in 2009 because of the recession and its negative effect on air travel.
Delta: with a load factors of 83% (full aircraft), total operating revenue fell 23% as unit revenue fell 17%, had $390M in fuel hedge losses.
United is to cut 9,000 jobs by the end of 2009.
Iberia’s chairman, Fernando Conte steps down earlier than planned for former Altadis chairman Antonio Vazquez as BA merger remains open.
CargoItalia is owned by Intesa SanPaolo & ALIS. Operates MD11Fs on an ACMI basis. Has 8 A330-200Fs on order.
CargoItalia is a merger of CargoItalia (suspended ops in 2008), Alitalia full cargo division.
CargoItalia is owned by ALIS, & Intesa SanPaolo Bank.
ALIS is owned by the family of CargoItalia chairman and CEO Alcide Leali, Benetton, van den Heuvel & Banca Intermobiliare
ABX Air is to cut over 1,000 jobs from its Wilmington, Ohio, base when its airport services contract with DHL ends on August 15th.
DHL Express moved out of the US market in November 2008 moving its freight operations back to Cincinnati-Northern Kentucky International Airport.
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Headline News was last updated: January 8, 2010
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SkyEurope, a prominent low-cost carrier in Europe has closed down.
September 2009
FAA is investigating American Airlines over structural repairs to its aging fleet of MD80s
FAA investigation centered on repairs to the rear bulkhead of the MD80 series aircraft.
American has 270 MD80s representing 44% of its fleet.
Q. What are the definitions of network and low-cost carriers?
A. Network carriers operate a significant portion of their flights using at least one hub where connections are made for flights on a spoke system. Low-cost carriers are those that the industry generally recognizes as operating under a low-cost business model.
(Source: Bureau of Labor Statistics)
British Airways has agreed with its pension trustees that its pension deficit is $6.8B, a 76% increase on the deficit of $3.4B in 2006.
The deficit means that the assets in BA's two pension schemes are insufficient to meet the pensions that will need to be paid out to members during the coming 80 years and threatens the Iberia merger.
December 14, 2009
