Star Alliance News

[Keith T 2]

CO to join *A!

 

http://www.iht.com/articles/ap/2008/06/19/...es-Alliance.php

 

http://www.chron.com/disp/story.mpl/front/5846440.html

 

Continental said today it's moving from the SkyTeam alliance — led by Delta and Northwest airlines, which are merging — to the Star Alliance. That will make United and US Airways its new domestic partners along with Air Canada, Lufthansa, Singapore Airlines and others.

 

Separately, Continental CEO Larry Kellner and United CEO Glenn Tilton are signing their own alliance today in Chicago.

[KC Sim 2]

Continental Airlines entry into Star Alliance will suddenly strengthen what is already the most powerful alliance - given its strong and increasing TransPacific and TransAtlantic reaches - and deal a huge blow to Skyteam.

 

Skyteam will probably now be searching high and low for new members to put a positive spin on the future - and indeed the relevance - of its alliance. Perhaps entry barriers will be lowered somewhat to allow for airlines such as MAS to enter the alliance. Both oneworld and Skyteam have poor coverage of SE Asia and MAS will provide some relief there.

 

Star Alliance is going from strength to strength . . . and perhaps TAM along with a Russian carrier (either Transaero or S7 Airlines) might be a good fit.

 

The airline alliance landscape has suddenly come alive again.

 

KC Sim

[Keith T 2]

Personally the upside for this might be a much stronger case for AA/BA antitrust immunity, as the transatlantic competitive position is looking to be in *A's favour when open skies is taken into acct.

 

Official announcement on their website:

http://www.continental.com/web/en-US/apps/...t.aspx?i=PRNEWS

 

Note the following:

Antitrust Immunized Joint Ventures

 

Through this new partnership, Continental and United plan to establish joint ventures allowing them to cooperate with each other and with other Star Alliance airlines in international regions and compete more effectively in an increasingly global air travel market.

 

Initially, Continental will request the U.S. Department of Transportation (DOT) to allow it to join United -- along with Lufthansa, Air Canada and six other carriers -- in their already established antitrust immunized alliance. This will enable Continental, United, Lufthansa, Air Canada and other immunized Star Alliance carriers to work closely together as other antitrust immunized alliances do, and to establish trans-Atlantic and other international joint ventures so they can deliver highly competitive flight schedules, fares and service. The planned trans-Atlantic joint venture, in which Continental, United, Lufthansa and Air Canada will pool revenue, will permit the carriers to compete more effectively with the proposed joint venture involving certain SkyTeam members that was recently granted antitrust immunity. The trans-Atlantic joint venture will combine the strength of the carriers to create a more efficient and comprehensive trans-Atlantic network for the carriers' customers.

 

Joint ventures are also planned for the Latin America and Asia/Pacific regions, involving Continental, United and other members of the Star Alliance. Both antitrust immunity and code-sharing are subject to receipt of approvals from applicable national authorities.

 

...

 

Continental Joining Star Alliance

 

Continental's plans to join the Star Alliance and the other planned cooperation are subject to receipt of certain regulatory and other approvals and the termination of certain contractual relationships, including Continental's existing agreements with SkyTeam members that restrict its participation in another global alliance. Continental intends to terminate its existing agreements with SkyTeam members and obtain the necessary approvals to enter the Star Alliance, although Continental may not be successful, and the time period for doing so may be out of Continental's control. For example, a principal contractual restriction will not terminate until nine months after the closing of the proposed Delta/Northwest merger. Continental intends to transition out of SkyTeam and into the Star Alliance in a customer friendly manner.

Edited June 20, 2008 by Keith T

[EricD 0]

Friday, 11 July 2008, 11:13 AM

Egyptair formally joins Star Alliance

 

 

CAIRO: Egyptair has officially become the 21st member of Star Alliance, bringing with it 1624 weekly flights to 69 destinations around the world.

 

Egyptair is the nation’s flag carrier, and will strengthen the alliance’s network throughout Africa and the Middle East.

 

The announcement at the Cairo International Airport marked the end of a nine-month integration project in which the airline adapted its reservation, ticketing, frequent flyer and other customer-oriented programmes to work more closely with the infrastructure of the other members of the alliance.

 

“Star Alliance was Egyptair’s choice of alliances mainly because it is the biggest, strongest and most dynamic of the alliances, focusing on rendering high quality services to passengers while minimising costs – a concept that Egyptair wholeheartedly agrees with,” said Captain Tawfik Assy, CEO, Egyptair Holding Company. “Egyptair’s strategic regional location will enable Cairo Airport to become a major hub for the Star Alliance family and a gateway for the Middle East and North Africa,” he said in a statement.

 

“With the addition of Egyptair to the alliance we have become the major alliance serving Africa, with half of our members flying to the African continent,” said Jaan Albrecht, CEO, Star Alliance. “The economic and business climate of Africa is getting the world’s attention. Star Alliance is well positioned to serve the business interests of the continent by having Egyptair in the north, South African Airways in the south, and nine other member airlines flying to Africa.”

 

As a major part of its increased role as a hub, the Cairo Airport Authority is completing work on a new terminal. When Terminal 3 opens this fall, it will be a dedicated Star Alliance terminal serving passengers of seven Star Alliance members. The new terminal will have a capacity to serve 11 million passengers annually.

 

Source : Aviation Record

[Pieter C. 5]

Austrian Air CEO Open To Majority Takeover

 

 

Austria is open to all options for Austrian Airlines but a strategic partner taking a stake in the national carrier was the most likely scenario, Austria's finance minister said on Tuesday.

 

Surprising news

 

Royal Jordanian Prepares Austrian Air Bid

 

July 18, 2008

Royal Jordanian is preparing an offer for the Austrian state's stake in loss-making Austrian Airlines and may present it as early as next week, an Austrian newspaper reported on Friday.

 

Royal Jordanian, which was the first Arab airline to be privatized last year, has hired PricewaterhouseCooper to advise it on the bid, Austria's Wiener Zeitung daily reported, quoting unidentified diplomatic sources.

 

A spokeswoman for the Austrian government's holding company OeIAG declined to comment on the report. She said OeIAG was not entitled to discuss a sale of its stake before it received a government mandate to sell it.

 

Royal Jordanian was not available to comment.

 

The Austrian government has asked for a review of the options for the carrier, which last month predicted it would make a loss of up to EUR90 million euros (USD$143 million) this year due to rising fuel prices.

 

The review will be presented to Austrian Airline's supervisory board on July 28.

 

The outgoing Austrian government is deeply split about a possible sale of the stake.

 

(Reuters)

 

[Pieter C. 5]

Turkish Airlines Passengers Up 15.6 Percent

 

June 11, 2008

THY Turkish Airlines, one of the fastest growing airlines in Europe, carried 8.2 million passengers in the January to May period, up 15.6 percent year-on-year, it said on Wednesday.

 

The Turkish flag carrier said in a statement to the stock market that available seat kilometres rose 9.8 percent year-on-year to 17.3 million for the five-month period, and revenue passenger kilometres rose 14.9 percent to 12.5 million.

 

THY has said it aims to increase passenger traffic to 23.5 million in 2008, up from 19.6 million passengers last year.

 

(Reuters)

 

Continental Seeks To Join Star Alliance

 

July 24, 2008

Continental Airlines formally sought permission from the US government on Wednesday to join the Star Alliance.

 

In a filing with the Transportation Department, the group also sought immunity from antitrust restrictions on scheduling, fares and service.

 

Joining Star and executing a separate domestic code share with United would strengthen the alliance's East Coast presence with US Airways in Philadelphia, Washington Reagan National, and Charlotte, United at Washington Dulles and Continental in Newark.

 

The move for an alliance comes after Continental this spring opted against a merger with United, which subsequently decided not to merge with US Airways.

 

Continental chose to exit the SkyTeam alliance after Delta Air Lines and Northwest Airlines proposed their merger this spring. Those carriers hope to close the deal by year's end, pending antitrust approval.

 

(Reuters)

[Pieter C. 5]

Keith,

 

Hope you won't be flying Lufty next monday

 

Lufthansa Ground, Cabin Staff To Strike

 

July 25, 2008

Ground and cabin staff at German airline Lufthansa have voted to go on strike from Monday over pay, threatening travel chaos at the height of the summer travel season, Germany's Verdi union said on Friday.

 

"From Monday we will be taking industrial action," Erhard Ott, head of the Verdi services union, told reporters at a news conference held to announce the result of a strike ballot.

 

He said the mood among staff was "explosive" and said the strikes would start at 2200 GMT on Sunday. They could take place all over Germany.

 

Some 90.7 percent of the ground staff and cabin crews represented in the union voted for action.

 

Verdi is calling for a pay rise of 9.8 percent for its roughly 52,000 members. Flag carrier Lufthansa has offered an increase of 6.7 percent in two steps and a one-off payment.

 

At a time when Europe's biggest economy is seeing a spike in inflation, several unions are seeking bigger wage deals after restraint in recent years.

 

(Reuters)

 

 

Surprising news

 

Royal Jordanian Prepares Austrian Air Bid

 

July 18, 2008

 

This looks a lot more logical to me:

 

Lufthansa To Meet Bankers On Austrian Air

 

July 25, 2008

Lufthansa will meet bankers on Friday to pick an advisor for the possible acquisition of a stake in Austrian Airlines, the daily newspaper Die Presse said on Friday.

 

Die Presse said Lufthansa's chief executive, Wolfgang Mayrhuber, an Austrian, has invited bankers to present their proposals for a Lufthansa move on the loss-making carrier controlled by Austria's government.

 

The newspaper did not say where it got the information. Lufthansa declined to comment.

 

Austrian Airlines has hired The Boston Consulting Group to evaluate its options after it reckoned that rising fuel prices would lead to a net loss of up to EUR90 million euros (USD$141 million) this year.

 

Sources close to the situation say that Boston Consulting will recommend a partial sale to another airline and that it would find most advantage in a tie-up with Lufthansa, Aeroflot or Air France-KLM.

 

The report will be presented to Austrian Airline's supervisory board on Monday.

 

Austrian Airlines and the government's holding company OeIAG have declined to comment on its contents before that.

 

(Reuters)

 

[Pieter C. 5]

United To Charge Fee To Check Single Bag

 

June 12, 2008

United Airlines on Thursday became the latest airline to begin charging USD$15 to check a single bag on domestic flights, matching the controversial fee launched in May by American Airlines as the industry struggles to offset high fuel prices.

 

United also raised the fee it charges to check three or more bags, overweight bags or items that require special handling to USD$125 from USD$100, or to USD$250 from USD$200, depending on the item.

 

The changes apply to customers who purchase a ticket on or after June 13 for travel within the United States and to or from Canada, Puerto Rico and the US Virgin Islands on or after August 18. The USD$15 fee does not apply to some customers who are members of United's loyalty programs.

 

United's single-bag fee is the second such fee launched by a major airline. The airline was the first legacy carrier to implement a USD$25 fee to check a second bag.

 

The new fees are part of a broader effort by airlines to charge passengers for services that used to be included in the price of a ticket. Some carriers charge for in-flight perks such as meals, drinks and snacks.

 

"With record-breaking fuel prices, we must pursue new revenue opportunities, while continuing to offer competitive fares, by tailoring our products and services around what our customers value most and are willing to pay for," John Tague, UAL's chief operating officer, said in a statement.

 

United said fees for checking the first and second bags would generate revenue of about USD$275 million a year.

 

American Airlines was sharply criticized for its single-bag fee by passengers who consider the charge excessive.

 

(Reuters)

 

[Pieter C. 5]

Lufthansa Says Flights Not Hit By Strike

 

July 28, 2008

A strike by Lufthansa ground and cabin staff over pay has so far barely disrupted flights to and from German airports, the airline said on Monday.

 

Tens of thousands of passengers had faced travel chaos at the height of the peak summer season due to walkouts by up to 5,000 members of the Verdi services union.

 

The strike, which officially started at midnight (2200 GMT on Sunday) at some of Germany's largest airports, including international hubs Frankfurt and Hamburg, threatened to hit areas from catering and cargo to maintenance and repairs.

 

"Almost 100 percent of our flights are flying on time," Lufthansa spokesman Klaus Walther told ZDF TV. Television pictures showed planes taking off in rapid succession and departure boards indicating only minor delays.

 

Lufthansa had sought to limit the impact of the strike by reassigning non-striking staff to other tasks.

 

Disruption could grow during the day, however, and some analysts have put the cost of the strike at about EUR5 million euros (USD$7.85 million) per day for Lufthansa, Europe's second biggest airline by passenger numbers.

 

Verdi said the aim of the strike was to hurt the company rather than to cause a large number of cancellations.

 

"Our strike is going very well," Verdi negotiator Erhard Ott told ZDF, saying workers in Frankfurt, Munich, Cologne, Hanover and other cities had downed tools.

 

Cargo, maintenance and catering had been hit, he said.

 

"The effects of the strike are likely to grow in the course of the day and in coming days," added Ott.

 

Verdi, which represents 52,000 air industry workers, wants a 9.8 percent pay rise for one year. Lufthansa is offering 6.7 percent over 21 months and a one-off payment.

 

Some 91 percent of union members backed the strike in a ballot.

 

Other unions have said they will not join in, however, among them the UFO union, which claims to be the main union for cabin crew and is demanding a 15 percent pay rise for its members.

 

Last week, Lufthansa was forced to cancel almost 1,000 regional flights at its Eurowings and CityLine subsidiaries after pilots walked out in a separate pay dispute.

 

Several German unions are seeking bigger wage deals after restraint in recent years, as inflation spikes in Europe's biggest economy.

 

(Reuters)

 

[Pieter C. 5]

Austrian Air Says Government Should Sell Stake

 

July 28, 2008

Austrian Airlines' supervisory board recommended the Austrian government sell its stake in the company to a strategic partner, the carrier said in a statement on Monday.

 

In a separate statement, Austrian Airlines posted a 52 percent rise in second-quarter net profit to EUR11.7 million euros (USD$18.4 million), better than analysts had feared, and reiterated its full-year outlook.

 

(Reuters)

 

Aeroflot Drops Interest In Austrian Air

 

July 30, 2008

Aeroflot will not place a bid for the Austrian government's stake in Austrian Airlines, the Russian carrier said on Wednesday.

 

"The risks outweigh the reward," Aeroflot spokeswoman Irina Dannenberg said.

 

Aeroflot, seeking potential acquisitions in Europe to bolster its market position outside Russia, had expressed interest in the 43 percent government stake in Austrian.

 

Aeroflot was on a short list including Lufthansa, Air France-KLM and Turkish Airlines. A majority on the Austrian carrier's supervisory board preferred to sell to Lufthansa, a source close to the board said on Monday.

 

The German carrier's chief financial officer, Stephan Gemkow, said Lufthansa would deal with the issue of the Austrian stake sale as necessary but said there was no clarity on the sale process.

 

Air France-KLM declined to comment.

 

Austrian Airlines chairman Peter Michaelis said on Tuesday the government should move quickly to sell the entire stake to avoid drastic cost cuts.

 

(Reuters)

 

What's on Aeroflot's mind ?

1st AZ and bail-out, now OS and bail-out - doesn't seem trustworthy to me...

 

 

 

Lufthansa Cuts 70 Flights As Strike Continues

 

July 29, 2008

Lufthansa said it would cancel about 70 of its 2,000 daily flights on Tuesday as a strike by thousands of ground and cabin staff over pay enters its second day.

 

The routes affected are short-haul services with high frequencies, enabling it to switch passengers to other flights, a Lufthansa spokesman said. No long-haul services would be affected, he added.

 

"We are unable to operate 3 percent of our total flight offering," the spokesman said.

 

Six aircraft in Frankfurt and three in Munich could not be readied for flying on Tuesday and would not be available for flights, he said.

 

The open-ended strike began on Monday and hit Germany's largest airports, including Frankfurt. The union pledged the impact of the strike by members of the Verdi services union would grow in the coming days.

 

Verdi, which represents some 50,000 ground and cabin staff at Lufthansa, wants an immediate 9.8 percent pay rise. Lufthansa is offering 6.7 percent over 21 months and a one-off payment. Ninety-one percent of union members backed the strike in a ballot.

 

The rival UFO union, the dominant union for cabin crew, is not taking part in the dispute.

 

(Reuters)

 

[Pieter C. 5]

Lufthansa Cuts More Flights As Strike Continues

 

July 30, 2008

Lufthansa scrapped about 78 of its 2,000 daily flights on Wednesday as thousands of ground and cabin staff staged a strike over pay for a third day.

 

Europe's second-biggest airline said mainly European and domestic flights would be affected as nine aircraft remained grounded because they could not be readied for flight.

 

The carrier also said it would cancel some long-haul flights for the first time during the strike, including three services from Frankfurt and one from Munich.

 

Lufthansa Chief Financial Officer Stephan Gemkowhi said the strike could weigh on the carrier's efforts to match last year's operating result this year. "How long will the strike last? No idea," he said.

 

The open-ended strike by about 5,000 members of the Verdi services union began on Monday and the union said on Tuesday the impact of the strike would grow in coming days.

 

Verdi, which represents some 50,000 ground and cabin staff at Lufthansa, wants an immediate 9.8 percent pay rise. Lufthansa is offering 6.7 percent over 21 months and a one-off payment.

 

"We're here because we want more money," said striking Lufthansa worker Richard Matthay at Munich airport. "But our main concern is for Lufthansa to restart the talks with us, so that this strike can end as quickly as possible."

 

Ninety-one percent of union members backed the strike in a ballot.

 

Lufthansa on Tuesday repeated calls for the union to resume talks to bring the strike to an end as quickly as possible, though a spokesman would not say whether it was considering making a new pay offer.

 

Passengers would be rebooked onto other services with Lufthansa or its Star Alliance partners, the airline said.

 

Analysts estimate a day's strike costs the airline around EUR5 million euros (USD$7.87 million).

 

(Reuters)

 

[Pieter C. 5]

Lufthansa Cuts 10 Percent Of European Flights

 

July 30, 2008

Lufthansa will scrap about 10 percent of its flights to German and European destinations in the next five days in response to a strike by ground and cabin staff over pay, it said on Wednesday.

 

Europe's biggest airline by passenger numbers said in a statement late on Wednesday it was introducing a new flight schedule to minimize disruption for passengers.

 

About 5,000 members of the Verdi services union started an open-ended strike on Monday, and though delays and cancellations have been relatively slight so far, the union says it expects the impact to increase over time.

 

Lufthansa had already cancelled about 80 of its 2,000 daily flights on Wednesday as aircraft could not be made ready.

 

The carrier had also cancelled long-haul flights for the first time during the strike, including four routes to northern America and flights to India and Dubai. Lufthansa said it would announce a new schedule for long-haul flights soon.

 

Some analysts estimate the walkouts could cost the company EUR5 million euros a day, and Lufthansa Chief Financial Officer Stephan Gemkowhi said the strike could weigh on the carrier's efforts to match last year's operating result this year.

 

"How long will the strike last? No idea," he said after the company announced first-half results and warned about the longer-term impact of high fuel costs.

 

Germany's BDI industry association called on the Verdi union to return to the negotiating table.

 

"The strike is damaging air traffic, tourism, logistics and the whole economy," said BDI Managing Director Werner Schnappauf in a statement.

 

"It is too much when some people push their interests with a strike without looking at the economic consequences," he said.

 

Verdi, which represents some 50,000 ground and cabin staff at Lufthansa, wants an immediate 9.8 percent pay rise. Lufthansa is offering 6.7 percent over 21 months and a one-off payment.

 

"We're here because we want more money," said striking Lufthansa worker Richard Matthay at Munich airport. "But our main concern is for Lufthansa to restart the talks with us, so that this strike can end as quickly as possible."

 

Some 91 percent of union members backed the strike in a ballot.

 

Lufthansa has called on the union to resume talks to end the strike as quickly as possible, though a spokesman would not say whether it was considering making a new pay offer.

 

Passengers would be rebooked onto other services with Lufthansa or its Star Alliance partners, the airline said.

 

(Reuters)

 

[Pieter C. 5]

Kudos to ANA: well done

 

ANA Posts Quarterly Profit Rise

 

July 31, 2008

All Nippon Airways reported a 10.5 percent rise in quarterly operating profit on Thursday, despite high fuel prices and an economic slowdown, which have also battered rivals around the world.

 

ANA, Japan's second-largest airline, kept its full-year operating profit forecast at JPY80 billion yen.

 

Operating income during the April-June period came to JPY14.6 billion (USD$135 million).

 

High oil prices were the airline industry's worst enemy during the quarter, with carriers worldwide shedding thousands of jobs and scrapping routes as losses mount, threatening some of them with insolvency.

 

The world's airlines stand to lose more than USD$6 billion this year if fuel costs remain at about USD$135 a barrel, the International Air Transport Association estimated recently.

 

In an attempt to survive, ANA's global peers are cutting planes and routes as well as staff.

 

Australia's Qantas Airways has said it will cut 4 percent of its work force and scrap its growth plan for the coming year, saying the business would be at risk if it fails to offset high fuel prices.

 

Bigger rival Japan Airlines is set to report its first quarter results on August 7.

 

(Reuters)

 

[Pieter C. 5]

Lufthansa, Verdi Union Reach Wage Deal

 

August 1, 2008

Lufthansa has reached a wage agreement with staff to end a strike that has caused hundreds of flight cancellations, both sides said on Friday.

 

Trade union Verdi said it planned to abandon the strike from early Saturday after reaching the deal.

 

However, Lufthansa said on its web site it would take two weeks before it returned to operating its normal flight schedule as checks to aircraft had been backed up during the strike. Some 90 percent of European flights would run in the next four days.

 

Under the deal, Lufthansa ground staff will get a 5.1 percent pay rise backdated to July 1 and a further 2.3 percent rise from July 2009. They will also receive a one-off payment, the airline said.

 

The deal would last 21 months and cabin staff pay would rise in line with that of ground staff, Lufthansa said, adding that it had to confirm this with the Ufo union.

 

Ufo, representing flight attendants, said the pay offer that Verdi had agreed was far too low.

 

About 5,000 members of the Verdi services union started walkouts on Monday to press for an immediate 9.8 percent pay rise. Lufthansa had offered 6.7 percent over 21 months and a one-off payment.

 

Lufthansa has grounded planes because of a shortage of technical staff. Catering and freight workers and some check-in staff have also stopped work.

 

The airline said the cost of the strike had so far reached a double-digit million euros figure. On Wednesday, the group said high fuel costs and a possible weakening of demand were set to push earnings down this year.

 

Europe's biggest economy is experiencing a sharp rise in inflation and several unions are seeking bigger wage deals after restraint in recent years.

 

Lufthansa usually runs about 2,000 flights per day.

 

(Reuters)

 

[Pieter C. 5]

Share Fall Stirs China Eastern-SIA Talk

 

August 1, 2008

A steep slide in share prices has revived talk of a possible stake sale by China Eastern Airlines to Singapore Airlines, even though China Eastern's shareholders have already rejected the deal once.

 

Also potentially boosting prospects for a deal are recent government moves to broker a merger between China Eastern, one of the country's three major airlines, and Shanghai Airlines, which would create a dominant carrier with a 60 percent share of domestic flights at China's financial hub.

 

Singapore Airlines and its majority owner Temasek agreed in November 2007 to buy a 24 percent stake in China Eastern at HKD$3.80 per share, or half its H-share price at the time, valuing the deal at about USD$920 million.

 

The plan was vetoed in January by China Eastern's minority shareholders, with many harshly criticizing the carrier for agreeing to sell the stake too cheaply.

 

Its Hong Kong-traded H shares have been in a steady downtrend since then, however, dipping below the HK$3.80 mark in late March. They were trading at HKD$2.59 on Friday.

 

A senior China Eastern executive said the share price fall may improve the chances of winning shareholders' approval for a Singapore Air deal.

 

"We don't want our share price to fall but that has actually taken ammunition away from our critics (over the Singapore Air deal)," said the executive, who declined to be identified due to the sensitive nature of the matter.

 

However, the executive said a deal was unlikely to be completed before the August 9 expiry of the agreement with Singapore Airlines given government orders to focus on transport safety issues and Olympics-related matters as Beijing prepares to host the Games from August 8 to 24.

 

Singapore Air has said its talks with China Eastern were now focused on business cooperation rather than buying shares.

 

China Eastern, dogged by a reputation for poor service and keen for a foreign partner with the expertise to help shore up its operations, has said it would focus once more on talks with Singapore Air after the Olympics.

 

Airline industry and government sources said the prospects for an equity deal seem stronger than they were a few months ago, due in part to the possibility of a merger between China Eastern and Shanghai Air.

 

China's central government and the Shanghai city government are discussing merging the two Shanghai-based carriers into an airline that could better compete with foreign rivals, the sources said.

 

If the government decides to go ahead with a merger, China Eastern would first have to move on any deal with Singapore Air, a government source said, as the government would want that matter settled before proceeding with the Shanghai Air merger.

 

"The possible merger with Shanghai Air should be good news to China Eastern and Singapore Airlines, as the government has now become involved and it is keen to solve relevant issues, which have been hanging out there for too long," the source said.

 

But many uncertainties still cloud the outlook for a deal.

 

After reporting a 15 percent drop in its first-quarter profit due to surging fuel prices, Singapore Air may have a harder time gaining approval from shareholders, especially in a slowing global economy that has dimmed the outlook for travel demand.

 

The International Air Transport Association issued a gloomy outlook in June, forecasting a USD$6.1 billion loss for the global industry in 2008, a sharp turnaround from the USD$4.5 billion profit it predicted in April, as oil prices rose.

 

In China, monthly air passenger volume, which had been growing at double-digit rates for years, slipped in May and June, and industry executives said the downtrend may extend into October as stricter security due to the Olympics deters travel.

 

Chinese flag carrier Air China had also been opposed to the original deal. Its parent had proposed a strategic partnership with Chinese Eastern, which was rebuffed, but it is not known if it still has intentions to buy into the airline.

 

But analysts see merit in a deal for SIA.

 

"It is true that Singapore Air faces pressure from its shareholders amid a weak market," said Ma Ying, an industry analyst at Haitong Securities.

 

"But a tie-up with China Eastern gives it a foothold in China's affluent east coast, which will offer benefits from a long-term perspective."

 

(Reuters)

 

 

Austrian Air Says Government Should Sell Stake

 

Government To Discuss Austrian Air Sale

 

August 1, 2008

The leaders of Austria's ruling coalition will discuss the sale of the state's stake in Austrian Airlines ahead of a full government meeting on August 12, a government spokesmen said on Friday.

 

Any deal struck during the leaders' talks is unlikely to be turned down in the subsequent government meeting, making the talks crucial to the possible sale of Austrian.

 

Conservative leader and Finance Minister Wilhelm Molterer will invite "the relevant decision-makers" to the talks, his spokesman said, but he declined to be drawn on a date and on who would take part in the talks.

 

Austrian daily Die Presse reported on Friday that outgoing Chancellor Alfred Gusenbauer, new Social Democrat leader and Transport Minister Werner Faymann, and Finance Minister Molterer would meet next Tuesday to discuss the airline.

 

The head of government holding company OeIAG, which holds the government's 43 percent stake in the airline worth EUR140 million euros (USD$218 million), will also take part in the meeting, Die Presse said. OeIAG declined to comment.

 

With elections looming in September, the stake sale is supported by Conservatives, but opposed by many Social Democrats, though Faymann has said he would back it if a deal protected Austrian interests such as keeping Vienna Airport as Austrian's hub.

 

After Russia's Aeroflot took itself out of the race this week, the remaining realistic candidates to buy the stake are Air France-KLM and THY Turkish Airlines.

 

(Reuters)

 

[Pieter C. 5]

US Airways To Cut 1,700 Jobs, Reduce Capacity

 

June 13, 2008

US Airways said on Thursday it will reduce its work force by 1,700, or about 5 percent, and will cut more capacity than planned and introduce new fees as the airline industry battles record fuel prices and a weakening economy.

 

The airline will reduce its fourth-quarter domestic mainline capacity by 6 to 8 percent, having previously planned a 2 to 4 percent cut.

 

For 2009, US Airways plans to cut domestic mainline capacity 7 to 9 percent from 2008 levels.

 

The airline will also return 10 aircraft to leasing companies and cancel deliveries of two aircraft.

 

US Airways said its new fees will include the introduction of a USD$15 service fee for a first checked bag for many customers from July 9.

 

"Our industry is profoundly challenged by the dramatic increase in fuel prices, and we must write a new playbook for running a profitable airline in this new and challenging environment," said US Airways chief executive Doug Parker in a statement.

 

US Airways said its fuel expense will be about USD$1.9 billion more in 2008 than it was last year.

 

Other measures to combat fuel prices will include a reduction of the airline's Las Vegas flights.

 

Effective September 3, US Airways said its Las Vegas night operation will be closed, except for limited night service to the East Coast.

 

It said daily departures from Las Vegas, which were as high as 141 during September 2007, will drop to 81 with the September 3 changes and Las Vegas daily departures will drop further to 74 by the end of 2008 as aircraft are retired.

 

Parker said that as demonstration of his confidence in US Airways, he intends to invest the equivalent of his 2008 salary in the company.

 

US Airways, which merged with America West Airlines in 2005, made an unsuccessful bid for Delta Air Lines last year and recent talks with United Airlines ended without a merger.

 

The airline is the latest of the major US carriers to announce large cutbacks as they grapple with a weakening economy and unprecedented oil prices, which have doubled in the past year.

 

Continental Airlines said on Thursday it will cut flights from its hubs to more than 40 domestic and international destinations as of September 3.

 

United Airlines has announced plans to cut jobs and flights, following a similar move by American Airlines.

 

(Reuters)

 

[Pieter C. 5]

Well done TG

 

Thai Airways Q2 Net Loss Better Than Forecast

 

August 13, 2008

Thai Airways reported a slightly smaller-than-expected net loss in the second quarter on Wednesday, hit by high jet fuel costs and a huge foreign exchange loss.

 

The national carrier said in a statement it made a net loss of THB9.25 billion baht (USD$275 million) in the April-June quarter compared with a net loss of THB430 million a year earlier.

 

Analysts expected some recovery in the third quarter, helped by a recent increase in its fuel surcharge. Falling oil prices should also reduce fuel costs and passenger volume is expected to start recovering.

 

(Reuters)

 

No more strikes @ LH !!!

 

Union Resolves Pay Row With Lufthansa

 

August 13, 2008

German trade union Verdi said on Wednesday it had resolved a wage dispute with Lufthansa, with a ballot of members returning a 51 percent majority in support of a pay deal with the airline.

 

The vote far surpassed the 25 percent support needed for the deal to apply.

 

Under the deal, which the union and airline struck earlier this month, Lufthansa ground staff will get a 5.1 percent pay rise backdated to July 1 and a further 2.3 percent rise from July 2009. They will also receive a one-off payment.

 

(Reuters)

 

 

[Pieter C. 5]

SAS Makes Small Q2 Loss, Plans More Cost Cuts

 

August 14, 2008

Scandinavian airline SAS posted a smaller than expected second-quarter pretax loss on Thursday and said it would extend a plan to boost revenues and cut costs.

 

The airline made a pretax loss of SEK106 million kroner (USD$17 million) in the second quarter and a profit of SEK762 million in the same period a year earlier.

 

"The reasons for the decrease in earnings are well known: rapidly rising jet-fuel prices to record-high levels combined with weaker economic trends and overcapacity in the market," chief executive Mats Jansson said in a statement.

 

"There is no doubt that the situation in the air travel industry is serious and probably the most difficult it has ever been."

 

SAS said it would extend its Profit 2008 plan with an additional SEK400 million of measures, aiming to give a total earnings boost of SEK1.5 billion this year.

 

It said it planned to cut an additional 7 aircraft as part of the Profit 2008 plan, bringing the total to 18 planes.

 

SAS's Spanair unit, which it failed to sell earlier this year, will also cut 15 planes.

 

Like many other airlines, SAS has struggled to compete in recent years with cut-price rivals and overcapacity. The recent rise in oil prices has added to the burden. SAS's fleet of older aircraft burn more fuel than competitors'.

 

SAS said fuel costs increased by SEK1.4 billion compared with the second quarter of 2007. Second quarter revenues were SEK17.7 billion.

 

(Reuters)

 

[Andrew K 0]

BANGKOK, Aug 13 (Reuters) - Thai Airways International PCL THAI.BK reported a slightly smaller-than-expected net loss in the second quarter on Wednesday, hit by surging jet fuel costs and a huge foreign exchange loss.

 

The national carrier said in a statement it made a net loss of 9.25 billion baht ($275 million), or 5.45 baht per share, in the April-June quarter compared with a net loss of 430 million baht a year earlier.

 

The loss was below the average 9.33 billion baht loss forecast by six analysts surveyed by Reuters.

 

Analysts expected some recovery in the third quarter, helped by a recent increase in its fuel surcharge. Falling oil prices should also reduce fuel costs and passenger volume is expected to start recovering. ($1=33.66 Baht) (Reporting by Arada Therdthammakun; Editing by Alan Raybould)

 

And from Korea...

 

SEOUL, Aug 14 (Reuters) - Korean Air Lines Co Ltd (003490.KS: Quote, Profile, Research), South Korea's top air carrier, reported on Thursday its first quarterly operating loss in five years, hit by higher oil prices and slowing demand.

 

Korean Air, also the world's largest air cargo carrier, posted a 116.4 billion won ($112 million) operating loss in the second quarter ended June 30, smaller than a 166.7 billion won loss forecast by 8 analysts polled by Reuters.

 

The operating loss was the first deficit since the second quarter of 2003, when Asia's airlines were hurt by an outbreak of Severe Acute Respiratory Syndrome (SARS).

 

It compares to a 75.4 billion won operating profit in the second quarter of 2007 and a 19.6 billion won profit in January-March this year.

 

Korean Air also reported a 288.9 billion won net loss for the April-June period, narrower than a 382.4 billion won loss forecast by the Reuters poll.

 

That compares with a 214.4 billion won loss a year earlier and a 325.5 billion won loss in the previous quarter.

 

Korean Air is expected to benefit from recent falls in oil and fuel prices in the second half, but its outlook remains clouded by the weaker won and a sluggish global economy, analysts said.

 

Reflecting these concerns, shares in Korean Air, valued at $3.3 billion, lost 7.9 percent in the second quarter, underperforming a 1.7 percent fall in the wider market . ($1=1039.5 Won) (Reporting by Park Ju-min and Cheon Jong-woo; Editing by Marie-France Han and Jonathan Hopfner)

[M. Sofian H. 0]

my feeling anxiously waiting for MH second quarter result

[Pieter C. 5]

SAS To Sell airBaltic Stake

 

August 14, 2008

Scandinavian airline SAS said on Thursday it planned to sell its 47.2 percent stake in airBaltic.

 

"I can confirm that," SAS spokesman Mikael Lindberg said when asked whether SAS planned the sale.

 

SAS said its decision was due to the fact the Latvian government had recently dropped plans to privatize airBaltic.

 

(Reuters)

 

Austrian Air To Cut Fleet If No Stake Sale

 

August 8, 2008

Austrian Airlines will need to halve its fleet to 40 to 50 planes if no strategic partner bought into the carrier, a board member said.

 

Austria's government earlier this week agreed to offer part of its 43 percent stake in the carrier to foreign airlines after Austrian warned of widening losses this year due to the rise in fuel prices and the global economic slowdown.

 

A majority of Austrian's board supports a sale to Lufthansa, though other possible buyers discussed by the airline operator include Air France KLM, Aeroflot and Turkish Airlines.

 

"Without a large partner we simply cannot stem the synergies we need for our long-distance routes," Andreas Bierwirth, Austrian's chief commercial officer, told journalists during a trip to Syria's capital Damascus.

 

"Without a partner, Austrian Airlines would have to shrink to 40 or 50 aircraft," from around 100, he said.

 

Faced with increasing competition from budget airline operators in eastern Europe, Austrian would venture further east, for example to Kazakhstan, as well as focusing on destinations in the Middle East.

 

Declining to name his preference, Bierwirth said any of the four possible buyers mentioned could be a match.

 

"We can do it with anyone on the list, and the interest is there. Lufthansa said it was interested, Air France didn't say anything to the contrary, and Aeroflot could always come back."

 

Aeroflot said it would not place a bid for a stake in Austrian as the risks outweighed the rewards.

 

(Reuters)

 

 

Austrian Airline Buyers Will Seek Majority

 

August 12, 2008

The Austrian government is embellishing its plan for loss-making Austrian Airlines, complicating an already difficult sell as it searches for a "strategic partner" to save jobs and its national identity.

 

What it may have to accept is surrendering ownership.

 

"Regardless of which 'strategic partner' it will be, they are going to want more than 50 percent," said Paul Wessely, an analyst at UniCredit.

 

Only that would allow a buyer to reap benefits from cutting costs by cutting uncompetitive long-haul flights and focusing on Austrian's key strength -- its dense network of destinations in central and eastern Europe.

 

Publication of an official tender for the Austrian stake on Wednesday will force bidders to show their hand.

 

Austrian's board has screened possible buyers and sources close to the board say a majority supports Germany's Lufthansa. Air France-KLM, Aeroflot and Turkish Airlines are seen as runner-ups.

 

As campaigning for the country's snap elections is heating up, Austria's antagonized outgoing coalition has come around to approving a partial sale of the flag carrier, weighed down with rising fuel prices, no-frills competitors and a slowing economy.

 

Management did its part in convincing the government partner by talking itself down. It warned of a possible net loss of EUR90 million euros (USD$134 million) this year, and said it would have to sell half of its aircraft if no partner was found and threatened "gruesome" cuts.

 

But the mandate to sell the government's 43-percent stake -- worth EUR158 million -- comes with some sugar-coating making it palatable to politicians:

 

Austrian core shareholders -- be it the state or a group of private investors, or both -- must hold 25 percent after the deal to be able to block key decisions by the "strategic partner," as the buyer is called. The brand, the Vienna airport hub, and as many jobs as possible must stay.

 

As Austrian -- loss-making, indebted and with a business model eroded by low-cost airlines such as Ryanair or SkyEurope -- is unattractive as a financial interest, analysts expect any buyer to aim for a majority stake.

 

But with the government's mandate to sell restricted by the requirement of an Austrian core shareholder, the only way for a buyer to reach a majority will be to add a capital increase or a buyout of the free float to the purchase of the government stake.

 

Both versions are not necessarily good for Austrian's current shareholders. A capital increase would dilute their holdings, while a buyout offer would have to wield an unlikely 32 percent premium to compensate only this year's share decline.

 

Austrian's shares hit an all-time low in mid-July, when the company's entire equity was worth as little as four Airbus A320 aircraft. They have doubled since, trading up 2.7 percent at 4.25 euros on Tuesday, but still less than half from a year ago.

 

In trying to have it both ways and make the sale of Austrian appear to not really be a sale, the government has complicated an already difficult sell.

 

Therefore some bankers looking at the process believe that, once the election is over, the terms of the deal may change: the core shareholder requirement may fall, or the government may take on some of Austrian's debt.

 

"There are still some politicians who believe that this is a jewel," said a banker who is looking at the deal but does not have a mandate in it.

 

"Not everybody in Austria seems to have understood that the question is not what they want, but what they will have to accept," said the banker, who required anonymity.

 

(Reuters)

 

Austria Invites Airline Bidders By August 24

 

August 13, 2008

Austrian state holding company OeIAG is inviting potential bidders for Austrian Airlines to notify their interest by August 24, it said in an advertisement in daily Wiener Zeitung on Wednesday.

 

OeIAG is offering its entire 43 percent stake in Austrian, worth around EUR157 million euros (USD$234 million), but said the size of the stake sold would depend on preserving an Austrian group of core shareholders owning 25 percent between them.

 

Potential investors are requested to register their interest with Merrill Lynch, OeIAG's advisers in the deal, and will then receive an information memorandum, it said in the advertisement.

 

Austrian's board has screened possible buyers and sources close to the board say a majority supports Germany's Lufthansa.

 

The board sees Air France-KLM, Aeroflot and Turkish Airlines as second choices.

 

(Reuters)

 

[Pieter C. 5]

Well done TG

 

Thai Airways Q2 Net Loss Better Than Forecast

 

 

BANGKOK, Aug 13 (Reuters) - Thai Airways International PCL THAI.BK reported a slightly smaller-than-expected net loss in the second quarter on Wednesday, hit by surging jet fuel costs and a huge foreign exchange loss.

And from Korea...

 

SEOUL, Aug 14 (Reuters) - Korean Air Lines Co Ltd (003490.KS: Quote, Profile, Research), South Korea's top air carrier, reported on Thursday its first quarterly operating loss in five years, hit by higher oil prices and slowing demand.

 

See respective dates: was published already here and at the Skyteam topic previously....

[Georg Burdicek 1]

http://www.bloomberg.com/apps/news?pid=206...nterstitialskip

 

Aug. 19 (Bloomberg) -- United Airlines, struggling to curb losses from record fuel prices, will become the first U.S. carrier to stop serving free meals in the coach cabin of some overseas flights.

 

Instead, the second-largest U.S. carrier will offer food that can be purchased aboard trips to Europe from Washington's Dulles International Airport starting Oct. 1,

 

[...] Dulles is United's ``gateway'' to Europe, with about 33 daily international flights. Food in first and business classes will remain free.

 

The carrier will charge $6 for snack boxes that include cheese, crackers, fruit, yogurt and a pastry, and $9 for salads and sandwiches. Salads with turkey and chicken, which come with fruit, will be available, along with chicken and turkey wraps and a beef, ham and salami sandwich.

 

And they don't even bother to offer proper food for purchase... But I don't think that this will be a rule model for modern air travel, more in the contrary - United will lose lots of customers.

What happens to Passengers who are booked on codeshare flights? How can such a huge service difference within Star Alliance (Singapore Airlines vs. United) be acceptable?

 

Georg

[Y. J. Foo 0]

At least AirAsia X still offers nasi lemak for sale...

[Hakan 2]

they are cutting everything, luggages, clean water, handbaggages, adding extra fees plus tickets.....so why they are flying?

 

are ticket prices goes down when they stopped meal service? really I'm curious that.

 

what will be next step in future; "we are stopped to carry over than 65kg passangers in economy class due fuel prices!"