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LOT Sees IPO In H2 2009 At Earliest

 

August 20, 2008

The long-delayed public offering of Poland's flag carrier LOT will take place in late 2009 at the earliest as it restructures to return to profitability, its chief executive said on Wednesday.

 

Earlier this month, LOT warned the state-controlled airline needed immediate restructuring to avoid a possible cash crunch in the face of rising fuel prices, soaring costs and increasing competition from no frill carriers such as Ryanair.

 

"After the third quarter of 2009, if we find the level of restructuring as satisfactory, it will allow us to move to other strategic targets, including an IPO (initial public offering)," said LOT's recently appointed CEO Dariusz Nowak.

 

"I wouldn't see it before the end of the second quarter of 2009," he said.

 

He said new management will decide within a year whether LOT is "floatable".

 

Poland had planned to sell down its 68 percent stake in early 2009 along with a quarter of the airline in the hands of the administrator of Swissair -- a hangover from LOT's first failed privatization.

 

LOT, which has had five chief executives in five years, wants to return to profit in 2010 after an operating loss of PLN275 million zlotys (USD$122.2 million) expected this year and PLN120 million in 2009.

 

Global airlines have suffered from high oil prices and concerns that economic woes would weigh on passenger numbers, with some analysts warning that the weakest carriers may have a difficult time surviving.

 

(Reuters)

 

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See lah... I was so afraid for MAS when they started serving snack boxes that they would go down this route. Thankfully IJ and tean seems to be wising up a bit and somehow the PR spiel about the 93% approval rate has all but died a silent death.

 

As far as UA is concerned, they are making an overall substandard offering even worse. Yes they have tough domestic competitors pulling them down yada-yada-yada but how about making their domestic and internatonal divisions have separate account books? This way the respective honchos can effect better control and no longer will the excuse of leaky domestic performace zapping the overall balance between red and black.

 

I will only pity the FAs who will bear the brunt of the passengers' wrath. There was even talk on airliners.net of this practice spilling over the the JCL cabins, but thankfully PCL will be left alone. First they had the rather blah looking new-JCL reveal, and now this.

 

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.

Looking at the prices they are charging, it is not cheap for those crappy el-cheapo train station deli menu they are offering. You honestly get better value from the Lebanese kebab shops along Oxford Street in Sydney! Better tasting too I am sure!

 

Bad showing UA... Bad showing!

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Buy on Board will also be introduced for JCL on domestic 3 class services; drinks continue to be complimentary.

 

Another bonehead move from the US based carriers - this sets a v bad precedent. :(

Edited by Keith T

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I'm due to fly UA for 3 hours flight, should I bring water with me? or that still "complimentary" ?

UA will realize that this is just a dumb move where pax can choose other US carriers for long haul, or even better SQ :drinks: I would expect this kind of news from AA, oh well...

Edited by Seth K

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cheehh cheaper to ask McD's to cater and sell on board UA flights - heck they might even make a bigger profit that way.

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I'm due to fly UA for 3 hours flight, should I bring water with me? or that still "complimentary" ?

UA will realize that this is just a dumb move where pax can choose other US carriers for long haul, or even better SQ :drinks: I would expect this kind of news from AA, oh well...

 

Buy water? cant even carry water onboard due LAG.....Pax are really being squeezed. Sad Sad. :drinks:

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Austrian Airlines To Launch Capital Increase

 

August 22, 2008

Austrian Airlines said on Friday it would launch a capital increase, issuing 57 million new shares with subscription rights to existing shareholders at a price above its current share price.

 

The first 1,000 shares would be offered at 4.89 euros to all existing shareholders, and any further shares would be offered at 7.10 euros, Austrian spokeswoman Pia Stradiot said.

 

The shares not allocated to existing shareholders would be offered to the company of Saudi-Austrian investor Sheikh Mohamed Bin Issa al Jaber -- in an amount corresponding to 20 percent of shares in the airline operator, Austrian said in a statement.

 

In a deal announced in March, the Saudi-Austrian investor agreed to take the stake via a capital increase for about EUR150 million euros (USD$223 million).

 

He later pulled out, saying he had been misled about the airline's results and Austrian said it put the issue in the hands of its lawyers.

 

"We decided to execute the capital increase because we had to do it, otherwise we would have been in breach of contract," said Stradiot. "We have valid contracts with al Jaber."

 

The spokeswoman said Austrian had no signal from al Jaber on whether he would be interested in taking up the offer, adding the capital could be increased by up to EUR428 million.

 

The exact volume of the capital increase would be determined after the end of the subscription period, which runs from August 25 to September 8, Austrian said.

 

Austrian is currently searching for a strategic partner, and the country's state holding company OeIAG, which holds a 43 percent stake in the airline operator, has invited potential bidders for Austrian to notify their interest by August 24.

 

Austrian's board has screened possible buyers and sources close to the board say a majority supports Lufthansa. The board sees Air France-KLM, Aeroflot and Turkish Airlines as second choices.

 

(Reuters)

 

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Swiss Flight Diverted Due To Bomb Hoax

 

August 24, 2008

Swiss International Air Lines said on Saturday that flight LX2114 from Zurich to Malaga in Spain was diverted to Geneva following a bomb threat.

 

The Airbus A320 landed safely in Geneva, the Lufthansa unit said in a statement.

 

The airline later said that police found no explosive devices on the plane. "This has been a false alarm," a spokesman for the airline said.

 

(Reuters)

 

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Lufthansa Logs Interest In Austrian Air Stake

 

August 25, 2008

Lufthansa has formally announced its interest in acquiring a stake on offer in Austrian Airlines, a spokesman for the German carrier said.

 

Austrian state holding company OeIAG is offering its 43 percent share in the airline, worth around EUR157 million euros (USD$233.4 million), but said the size of the stake sold would depend on preserving an Austrian group of core shareholders owning 25 percent between them.

 

OeIAG invited potential bidders for Austrian Airlines to notify it of their interest by August 24.

 

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

 

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

 

(Reuters)

 

1st the Western Alpine flank, and now the Eastern one as well: well done Lufty !!! :pardon:

Next will be the UK with Bmi, and finally SAS in the North ??? :huh:

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Russia's S7 Shows Interest In Austrian Air

 

August 25, 2008

Russia's number 2 airline S7, formerly called Sibir, is eyeing a stake on offer in Austrian Airlines, a spokeswoman for the Russian carrier said on Monday.

 

Austrian state holding company OeIAG is offering its 43 percent share in Austrian, worth around EUR157 million euros (USD$231.8 million), but has said the size of the stake on offer may change. A 25 percent stake must remain under control of Austrian core shareholders.

 

"We're examining the possibility of taking part in bidding for Austrian. We're interested in this from the point of view of business development as well as its international component," S7 spokeswoman Irina Kolesnikova said.

 

OeIAG invited potential bidders for Austrian Airlines to notify it of their interest by August 24.

 

Earlier on Monday, Austrian shares rose nearly 15 percent to 5.69 euros -- the highest level in more than five months -- as possible suitors for the carrier lined up, including a formal announcement of interest from Germany's Lufthansa.

 

Air France-KLM and Turkish Airlines are also seen as possible matches. Russia's Aeroflot had shown interest but backed out, saying risks would outperform any benefits.

 

In 2007, S7 flew 5.7 million passengers.

 

(Reuters)

 

At Least 5 Interested In Austrian Airlines

 

August 26, 2008

At least five airline operators have logged their interest in buying a stake in Austrian Airlines, Austrian daily Die Presse reported on Tuesday.

 

Aside from Lufthansa and Russia's number 2 airline S7 -- which have both stated their interest -- Air France-KLM, Air China and Turkish Airlines had also notified Austrian state holding company OeIAG of their interest before the deadline expired on Sunday, the daily reported.

 

OeIAG is offering its 43 percent holding in Austrian, worth around EUR157 million euros, though the size of the offer may change as a 25 percent stake must remain under control of Austrian citizens or companies.

 

(Reuters)

 

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Turkish Air Confirms Interest In Austrian

 

August 27, 2008

Turkish Airlines has registered its interest in Austrian Airlines, the company said in a statement to the stock exchange on Wednesday.

 

Austrian state holding OeIAG is offering its 43 percent holding in Austrian Airlines, worth around EUR157 million euros (USD$230.9 million), although the size of the offer may change as a 25 percent stake must remain in the control of Austrian citizens or companies.

 

"We have sent communication regarding our position of interest in the privatization tender of Austrian Airlines," the company said in the statement.

 

Austrian Airlines' board has screened possible buyers, and sources close to the board have said a majority support Lufthansa. The board sees Turkish Airlines, along with Air France-KLM as second choices.

 

A newspaper report on Wednesday said besides Lufthansa and Russia's number 2 airline S7 -- which both stated their interest -- Air France-KLM and Air China had also stated their interest.

 

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

 

(Reuters)

 

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Lufthansa To Buy Stake In Brussels Airlines

 

August 28, 2008

Lufthansa, Europe's second-largest airline, plans to pay EUR65 million euros (USD$96.1 million) for a 45 percent stake in fledgling carrier Brussels Airlines with the option to buy all of the company in two years.

 

Lufthansa, which intends to buy the stake as part of a capital increase by the airline's parent, will get an option to buy the remainder which it can exercise at the earliest in two years, the German company said on Thursday.

 

"The price of this option is linked to the prospective performance of Brussels Airlines," it said.

 

Brussels Airlines is owned 70 percent by Belgian companies and 30 percent by Richard Branson's budget carrier Virgin Express.

 

It was created in 2004 by merging Virgin Express and SN Brussels Airlines, the successor of the country's state airline Sabena.

 

German paper Handelsblatt had reported in April that Lufthansa was considering buying the Belgian airline, which flies from Brussels to Europe and Africa.

 

(Reuters)

 

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It's getting busy at Austrian's doorstep !!! :blink: :blink:

 

British Airways Interested In Austrian

 

August 29, 2008

British Airways has logged its interest in the sale of a stake in Austrian Airlines, Austrian daily Die Presse said in an article to be published on Saturday, giving no further details.

 

Austrian state holding company OeIAG is offering its 43 percent holding in Austrian Airlines, worth around EUR157 million euros, though the size of the offer may change as a 25 percent stake must remain under the control of Austrian investors.

 

British Airways declined to confirm or deny the report. "We don't comment on rumour or speculation," a spokeswoman said.

 

Germany's Lufthansa and Russia's second biggest airline S7 have both already said they have registered their interest in taking a stake.

 

According to media reports, Air France-KLM, Air China and Turkish Airlines have also notified the state holding of their interest.

 

All interested parties need to present their concepts by September 12 to the state holding company, which will then draw up a shortlist, according to an OeIAG spokesman.

 

(Reuters)

 

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Thai Air Says Passengers Canceling Due To Unrest

 

September 2, 2008

Thai Airways said on Tuesday that passengers, particularly from other Asian countries, were canceling flights because of political unrest.

 

"Passengers have cancelled their flights. Our flight bookings have fallen by more than 10 percent in the past one or two days," President Apinan Sumanaseni said.

 

The flight cancellations mostly involved tourists from Japan, South Korea and China after various governments issued travel warnings, he said.

 

The airline would cut costs to help shore up its earnings for the year, he said. Thai Airways posted a net loss of THB7.04 billion baht (USD$205 million) for the first half of 2008 due to surging jet fuel costs and a huge foreign exchange loss.

 

Its shares hit a record low of 13.3 baht in early trade on Tuesday as the political unrest and emergency rule imposed by the government raised fears about tourist arrivals.

 

The shares have fallen 10.4 percent since Friday, when anti-government protests forced the airport in Phuket, a major tourist destination in the south, to close. A few other airports were affected but all have since reopened.

 

(Reuters)

 

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US Airways To Launch Flights To Israel

 

September 2, 2008

US Airways will begin flying daily nonstop flights to Tel Aviv beginning next July in a move expected to boost US visitors to Israel, the country's tourism ministry said on Tuesday.

 

The carrier, formed in 2005 from the merger of America West and the former US Airways, is expanding internationally while many US airlines have been cutting capacity, mainly on domestic routes, as they grapple with high fuel costs.

 

"We expect US Airways' presence in the US-Tel Aviv market to enhance economic growth and tourism opportunities for both the US and Israel," Rami Levi, director of the Israel tourism ministry's US Western region, said in a statement.

 

The ministry expects the new service to significantly add to an already record number of US tourists visiting Israel, which amounted to about 500,000 in 2007.

 

Israel is on track for a record year of tourism at more than 2.5 million in 2008.

 

US Airways last month said it had applied for both US and Israeli government approval to operate the flights, which will fly from its hub in Philadelphia to Tel Aviv. It also began flights to London Heathrow in March.

 

Tel Aviv will become the 21st transatlantic destination served by US Airways from Philadelphia and the first to the Middle East. The 5,700 mile flight will be US Airways' longest nonstop segment and will be made using long-range Airbus A330-200 aircraft that are slated for delivery in the spring of 2009.

 

US Airways would become the third US carrier to fly nonstop flights to Israel.

 

Continental flies two flights a day from Newark Liberty while Delta operates daily flights from both JFK New York and Atlanta.

 

American Airlines this week began adding its codes to flights on Israeli flag carrier El Al.

 

(Reuters)

 

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Up To 15 Parties Eye Austrian Airlines Stake

 

September 4, 2008

Up to 15 parties have registered their interest with Austrian state company OeIAG for the sale of its stake in Austrian Airlines, according to a source familiar with the situation.

 

The state holding company is offering its 43 percent holding in the airline, worth about EUR250 million euros (USD$361 million), though the stake size on offer may change, as a 25 percent stake must remain under control of Austrian investors.

 

"The number of interested parties is in the double-digits, it is up to 15," the source said. "Among them are not only airline operators, but also financial investors."

 

Those interested had to notify the holding company by August 24 and will have to present their concepts by September 12, after which a shortlist will be drawn up.

 

The source added that strategy would be key in the decision, while the purchase price had not yet been debated.

 

Germany's Lufthansa, Russia's second-biggest airline S7 and Turkish Airlines have already said they have registered their interest in taking a stake.

 

According to media reports, Air France-KLM, Air China and British Airways have also stated their interest to the state holding company.

 

Asked about a media report stating bidders would have to submit binding offers by October 21, a spokesman for OeIAG said this would be a bit late, though October would be the probable month for such a deadline.

 

(Reuters)

 

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Singapore Air To Trim Asia-Pacific Fuel Surcharges

 

September 8, 2008

Singapore Airlines said on Monday it will reduce fuel surcharges from Tuesday for tickets on short and medium-haul flights, following a recent easing of jet fuel prices.

 

It said the surcharge on flights between Singapore and other cities in Southeast Asia will drop to USD$36 from USD$40.

 

The surcharge on flights to other parts of Asia, Australia and the Middle East will fall to USD$100 from USD$110.

 

The additional charge on longer-haul flights to Europe and North America remain unchanged.

 

(Reuters)

 

 

Al-Jaber Won't Buy Austrian Shares

 

September 8, 2008

Saudi investor Mohamed Bin Issa al Jaber will not buy Austrian Airlines shares in the rights issue the carrier launched two weeks ago, a source with knowledge of the situation said on Monday.

 

The share issue is not related to the ongoing process of selling part of the Austrian government's stake in the airline, but was part of a deal earlier this year under which al Jaber would have bought 20 percent. The deal fell apart in May.

 

Though al Jaber has made clear he does not feel bound by the agreement and would not buy the shares, Austrian Airlines went ahead with the share issue to honour its part of the deal and bolster its case in a legal wrangle with al Jaber.

 

Some Austrian media reported last week that the airline's rising share price -- at times last week it was above the 7.10 euros price of the share issue -- might tempt al Jaber to buy his stake anyway, and sell it on for a higher price.

 

Austrian Airlines and al Jaber declined to comment on the rights issue. The subscription period ended earlier on Monday at 1000 GMT. Austrian said it would report the results on September 15.

 

Austria's government holding agency OeIAG last month started the process to sell a stake in the airline, which has attracted interest from carriers including Germany's Lufthansa, Russia's S7 and Air France-KLM.

 

Interested bidders will present their strategies for Austrian to OeIAG and its advisers Merrill Lynch this Friday.

 

(Reuters)

 

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Air France-KLM To Bid For Austrian Air Stake

 

September 9, 2008

Air France KLM confirmed it would bid for a stake in Austrian Airlines, while repeating it was interested in taking a minority stake in a relaunched version of Alitalia.

 

"We have said we are interested and we will respond to the tender according to deadline and conditions set by the Austrian government's adviser," Air France-KLM Chairman Jean-Cyril Spinetta told reporters on Tuesday.

 

"So we'll make an offer. But we don't yet know precisely what the conditions are."

 

Austria's government holding agency OeIAG last month started the process of selling a stake in the airline, which has also attracted interest from carriers including Germany's Lufthansa and Russia's S7.

 

Interested bidders must present their strategies for Austrian to OeIAG and Merrill Lynch this Friday and a shortlist will then be drawn up.

 

Austrian and Alitalia are part of increasing European merger moves driven by high oil prices which have made many airlines unprofitable.

 

Air France-KLM pulled out of talks to buy Alitalia earlier this year when talks with Italian unions collapsed. But under the latest rescue plan, Italian investor group CAI plans to buy Alitalia's flight operations while the rest, including its ground service operations and cargo unit, are liquidated or sold.

 

"This group of investors contacted us saying their proposal could only succeed if they had the support of a very large European operator," Spinetta told reporters on the sidelines of a ceremony to launch Paris airport terminal 2G.

 

"They approached us, and maybe others, and we replied by letter that we would be ready to take a very minority-level stake in this new Italian company if we were sure it would be profitable. We are ready to participate, maybe not immediately but over the medium term."

 

(Reuters)

 

Russia's S7 Says AUA Partnership 'Win-Win' Deal

 

September 9, 2008

The head of Russia's number 2 airline S7 Airline said on Tuesday a partnership with Austrian Airlines, which is seeking a buyer for a major stake, would allow both carriers to generate new business.

 

S7 chief executive Vladislav Filev stopped short of repeating earlier statements saying he would bid for a stake put up for sale by Austria's government holding company OeIAG, which has gagged bidders with confidentiality agreements.

 

But he made clear his view that a deal with S7 would mean potential for expansion at Austrian, rather than the downsizing analysts expect to follow a possible takeover by contenders such as Lufthansa or Air France-KLM.

 

Air France-KLM said on Tuesday it would bid for a stake.

 

"A partnership with AUA can become a 'win-win' situation for both companies," Filev told a news conference in Vienna. "We can help each other to generate new business."

 

Unlike Russia's biggest airline, Aeroflot, which S7 believes will also bid for Austrian, S7 does not have a network of foreign destinations, and Vienna -- Austrian's main hub -- was well situated between Russia and Europe, he said.

 

S7's plan was to bring Russian passengers to Vienna and connect them to European and American destinations via Austrian, Filev said. He added that he expected passenger volume of around 3 million by 2012 for this business.

 

S7 transports 5.7 million passenger a year mainly on domestic flights and expects to generate USD$1.8 billion in revenues this year.

 

Apart from S7, Lufthansa, Air France-KLM and Aeroflot, Air China, British Airways and Turkish Airlines have also expressed interest in Austrian with Merrill Lynch, the adviser handling the sale, according to media reports.

 

OeIAG is offering its 43 percent stake in Austrian, but may sell less than that because the deal is tied to the condition that an Austrian core shareholder group must retain 25 percent of the carrier.

 

(Reuters)

 

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Thai Airways Says Unrest To Hit 2008 Revenue

 

September 10, 2008

Thai Airways International said on Wednesday it expected revenue this year to drop from the THB174 billion baht (USD$5 billion) it earned last year due to political problems in Thailand that have hit tourism.

 

"This year's revenue will surely drop from last year due to the current political unrest triggering flight cancellations," President Apinan Sumanaseni told reporters.

 

The national carrier also expected its "cabin factor" -- the percentage of seats sold -- to drop in 2008 from an average 77 percent last year, Apinan said.

 

So far this month, the airline's cabin factor is at only 60 percent, compared with 75-80 percent a year earlier. Passenger numbers from Europe fell 5-10 percent from the previous month and those from Asia showed a 20 percent drop, he added.

 

The airline said last week passengers, particularly from Japan, South Korea and China, were cancelling flights after several governments issued travel warnings when the Thai government imposed emergency rule in Bangkok to control political unrest.

 

On Tuesday Prime Minister Samak Sundaravej was forced to step down after a court ruled there was a conflict of interest when he was paid to host a cooking program on commercial TV while in office.

 

"If the political turmoil goes on, our third quarter will be in trouble, and that will continue into the fourth quarter, when it is our high season," Apinan said.

 

The airline was planning to cut costs, including cutting back on flights, to cushion the drop in revenue, he added.

 

Thai Airways, already hit hard by surging fuel costs, reported a net loss of THB7.04 billion in the first half of 2008, partly due to a foreign exchange loss, and it earned THB105 billion in revenue.

 

(Reuters)

 

 

Turkish Airlines Jan-Aug Passengers Up 15.4 Percent

 

September 10, 2008

THY Turkish Airlines, one of the fastest-growing airlines in Europe, carried 14.9 million passengers in the January to August period, a rise year-on-year of 15.4 percent, it said on Wednesday.

 

The Turkish flag carrier said in a statement to the stock exchange that available seat kilometres rose 10.4 percent year-on-year to 30.1 billion for the period, and revenue passenger kilometres rose 13.9 percent to 22.5 billion.

 

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

 

(Reuters)

 

 

Turkish Airlines Trips In Bid For Austrian Air

 

September 11, 2008

Turkish Airlines said on Thursday it is unable to take part in a tender for the privatization of Austrian Airlines, because it missed a deadline for expressing interest. :rofl:

 

Austrian state holding OeIAG is offering its 43 percent holding in Austrian Airlines, worth around EUR157 million euros (USD$222.2 million) and Turkish Airlines had expressed its interest in taking a stake.

 

"We were told that we cannot take part in the tender process because our notification reached the relevant authority after the stated deadline," Turkish Airlines said in a statement to the Istanbul stock exchange.

 

Up to 15 parties have shown interest in Austrian Airlines. Those interested had to notify the holding company by August 24 and have to present proposals by September 12, after which a shortlist will be drawn up.

 

Germany's Lufthansa and Russia's second-biggest airline S7 have said they have registered their interest in the airline.

 

According to media reports, Air France-KLM, Air China and British Airways have also stated their interest.

 

(Reuters)

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Norway Aware SAS Considering Other Owners

 

September 12, 2008

Norway's Trade and Industry Minister said on Friday she was aware that Scandinavian airline SAS was considering bringing in new owners.

 

Sources familiar with the matter said that Lufthansa is examining a takeover of its smaller peer to bolster its position in the consolidating airline industry.

 

SAS confirmed that it was in talks about a possible structural solution, but noted that no decision had been taken.

 

"We are aware that SAS is considering whether it is an advantage to bring in other owners," Trade and Industry Ministry Sylvia Brustad said.

 

The Norwegian government holds a 14.3 percent stake in SAS. In the past, Norway's cabinet has said it has no plans for changing its SAS stake.

 

Denmark also owns 14.3 percent of SAS and Sweden owns a 21.4 percent stake in the airline.

 

(Reuters)

 

Norway Says SAS Needs Changes, Would Evaluate Bid

 

September 14, 2008

The Norwegian government is willing to evaluate any bid it receives for Scandinavian airline SAS because the company needs "changes", the trade minister was quoted as saying on Saturday.

 

Sources on Friday said that Germany's Lufthansa is in talks to buy SAS and the Scandinavian carrier confirmed it was pursuing strategic options without naming potential partners. Lufthansa has not commented.

 

Analysts said any deal faces a number of hurdles, including coordination between the governments of Sweden, Denmark and Norway, which jointly own 50 percent of SAS.

 

Norway, which has 14.3 percent of the airline, has been cool towards privatization but Trade and Industry Minister Sylvia Brustad told daily Dagens Naeringlsiv that the airline's "results show there is a need for changes in SAS".

 

"Should a bid be received, we will go thoroughly through it," Brustad told daily Aftenposten when asked whether the state would sell its stake.

 

(Reuters)

 

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Wow, Lufthansa is buying 'quietly' neighbour airlines, be it South, West or North....who will be next ? :huh:

Bmi ? SAS ? Luxair ? Austrian ? :o

 

Lufthansa To Buy Brussels Airlines

 

September 15, 2008

Lufthansa has agreed to pay up to EUR250 million euros (USD$350 million) for smaller Belgian rival Brussels Airlines to expand its flight network and add premium travellers.

 

Lufthansa, which is seen as one of the key players in the consolidation of the European airline industry, has been linked to a number of other carriers -- including loss makers Alitalia, Austrian Airlines and Scandinavia's SAS.

 

The German carrier on Monday confirmed it planned to buy a 45 percent stake in the airline for EUR65 million, with an option to buy the rest from 2011. The total price would depend on performance-related factors and initially on 2010 results.

 

Lufthansa chief executive Wolfgang Mayrhuber said the purchase was a further sign of his company's transformation from a purely national carrier to a "European airline system" able to compete with Asian and North American giants.

 

Brussels Airlines would bring a prime location where the European Union and NATO are based, logistics experience and a wide network, notably including many flights to and from Africa.

 

It would operate as a largely independent carrier and retain its brand, as well as its headquarters and management in Brussels. It would also likely join the Star Alliance global network, of which Lufthansa is a member.

 

The German carrier added that it expected to be able to achieve a mid-double-digit million euro improvement in earnings and costs annually within three years of regulatory approval by combining the airlines.

 

This would come from greater leverage in costs, such as purchasing planes, and from higher revenues from more routes. Job cuts were not initially envisaged.

 

Mayrhuber declined to say more than that the German company was on the look out, but that its profitability was the number one concern.

 

"We are looking at all options that are coming up but we are not confirming anything," he told a news conference.

 

Brussels Airlines first flew as a single operator in March 2007 after the 2006 merger of British entrepreneur Richard Branson's budget carrier Virgin Express and SN Brussels Airlines, the successor of state airline Sabena.

 

The two airlines had been brought under the control of SN Airholding in 2004. A group of companies and regional investment funds hold 70 percent of Brussels Airlines, Virgin the rest.

 

It carried 5.8 million passengers in 2007, compared with Lufthansa's 63 million. Its revenue rose 2 percent to EUR921 million and consolidated net profit rose 66 percent to EUR23.1 million.

 

Lufthansa added that the acquisition still needed approval from regulators, Lufthansa's supervisory board and the board of directors and shareholders of SN Airholding.

 

(Reuters)

 

 

United Doubles Second-Bag Fee To USD$50

 

September 15, 2008

United Airlines said on Monday it is doubling the fee to check a second bag on a domestic flight from USD$25 to USD$50 one-way.

 

United estimated the fee will apply to only one out of seven customers.

 

The fee will not apply to customers in the United First or United Business programs, those with Premier status with United or Star Alliance, or active duty military personnel traveling on orders.

 

United said the potential revenue from its merchandising efforts, including checked bag fees, will be USD$700 million in 2009.

 

On June 12, United introduced a USD$15 fee to check a single bag.

 

Amid high fuel prices and a slowing US economy, airlines have been introducing fees, raising fares, and cutting routes, capacity and jobs in order to survive.

 

(Reuters)

 

 

Three Shortlisted For Austrian Air Sale

 

September 15, 2008

Germany's Lufthansa, Air France-KLM and Russia's S7 were shortlisted for buying a stake in Austrian Airlines, Austrian newspaper Die Presse reported on Monday.

 

British Airways did not make it onto the list because the business plan it filed for the loss-making Austrian carrier was incomplete and not convincing, Die Presse reported, citing experts advising on the sale.

 

The decision was made by Austrian government holding company OeIAG's privatization committee on Monday, Die Presse reported. OeIAG, which is offering its 43 percent stake in the auction, declined to comment.

 

Austrian, worth around EUR532 million euros (USD$746 million) at Monday's share price, is one of several European airlines being sold as rising fuel prices and a declining economy weigh on airlines' earnings.

 

The others include Spain's Iberia, Alitalia, Brussels Airlines and Scandinavia's SAS.

 

Lufthansa on Monday signed a deal to buy an initial 45 percent in Brussels Airlines for EUR65 million with an option to buy the rest from 2011. It is also in talks with SAS.

 

The three shortlisted bidders can now begin to look at Austrian Airlines books in a due diligence process and have to make a binding offer saying what they are ready to pay for the carrier within the next month.

 

(Reuters)

 

 

Air NZ To Fit Winglets To Cut Fuel And Emissions

 

September 16, 2008

National carrier Air New Zealand is to fit winglets to its Boeing 767-300ER planes to cut fuel consumption and reduce carbon dioxide emissions, the airline said on Tuesday.

 

The airline said it expected the modifications would save more than NZD$7.5 million (USD$4.9 million) in fuel costs and cut CO2 emissions by around 16,000 tonnes a year.

 

The winglets, developed by Aviation Partners Boeing, are 3.4 metres (11 feet) high wing-tip devices, and reduce the drag near the wing tip, which means the aircraft uses less fuel, and can climb faster.

 

"As a result of this initiative we expect to reduce the fuel consumption across our 767 fleet by around 1.6 million barrels annually," said General Manager Airline Operations David Morgan.

 

Air NZ's five 767 planes fly to Australia and around the Pacific and will be modified from next July.

 

The airline said it would look at fitting the winglets to planes on long range services such as its Boeing 777-200ERs.

 

It said it would also fit electrically-powered dryers to all its fleet to reduce moisture trapped in aircraft insulation, which would also save fuel and cut carbon emissions.

 

The driers could be expected to typically remove from each aircraft around 200 kilograms (440 pounds) of water caused by passengers exhaling and condensation from cold temperatures outside the aircraft.

 

No cost for the two initiatives was given.

 

(Reuters)

 

1st 767's with winglets IMHO, right ? :huh:

 

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Russian Move On Austrian A Boon For Lufthansa

 

September 18, 2008

Lufthansa appears to be the preferred and most natural buyer of Austrian Airlines -- but not the one that will pay most or is the likeliest to accommodate wider Austrian interests.

 

A possible solution to that dilemma for the Austrian government has emerged in the form of Russia's S7 -- if Austria is ready to take the political risk involved.

 

Austrian government holding agency OeIAG has whittled away unworthy bidders for its 42 percent controlling stake in loss-making Austrian over the past month to draw up a shortlist of three possible buyers this week: Lufthansa, S7 and Air France-KLM.

 

The trio is now delving into Austrian's books to come up with binding offers by October 21.

 

Bankers and advisers involved in the deal say OeIAG and Austria's finance ministry have made clear in informal talks that they believe Lufthansa is the only serious contender. OeIAG denies it has a preference for the German carrier.

 

On top of its long-standing relationship with Austrian -- the two codeshare and have a lucrative joint venture that operates flights between the two countries -- Lufthansa appears like a safe haven in a time of turmoil in the airline industry.

 

The prospect of a smooth handover to a culturally compatible buyer outweighs concerns Lufthansa may sideline Vienna Airport and re-route flights to its Frankfurt and Munich hubs, and may cut costs aggressively.

 

But those bankers and advisers also say that Austria's courtship is one-sided.

 

Lufthansa, which agreed to buy Brussels Airlines last week and which sources say is more keen on Alitalia or SAS than on Austrian, is trying hard not to appear overly excited by the prospect of an Austrian buy.

 

"Their message is, 'Don't take us for granted'," says one banker who is looking at the deal but does not have a mandate.

 

A key reason is that Lufthansa has the least to gain, another banker looking at the deal says.

 

"Lufthansa is already today realizing maybe 80 percent of the possible benefits through its close cooperation (with Austrian) in the Star Alliance," says this banker who also does not have a mandate.

 

Lufthansa's main interest in the sale is to make sure Air France does not win the bid and moves Austrian into rival Air France-led alliance Skyteam, those bankers and airline analysts say.

 

Thus a sale of Austrian to S7, Russia's biggest domestic airline that is seeking to expand abroad and is not part of an airline alliance yet, would catch two birds with one stone from Lufthansa's point of view.

 

If the deal would be followed by S7 joining Lufthansa's Star Alliance and preserve the German-Austrian joint venture, Lufthansa could keep most of its benefits from its cooperation without exposing itself to a messy restructuring and a deterioration of its balance sheet with indebted Austrian.

 

Smelling its chance, S7 has stepped up its lobbying in Austria. Chief executive Vladislav Filev has traveled to Vienna several times in the last few weeks to dispel doubts.

 

"They really want this deal," says one source close to Austrian's non-executive supervisory board.

 

But with Russia's relations with the West deteriorating after last month's war in Georgia, Filev's charm offensive cannot easily overcome the Austrian government unease about the risk of exposing its airline to a political crisis that may still have unpredictable consequences.

 

"It wouldn't be a bad solution at all," the first banker said. "But whether the political background allows it, is the big question."

 

(Reuters)

 

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Boeing Strike Delays Air Canada Deliveries

 

September 24, 2008

Air Canada's fleet renewal plan has been dealt another blow as a strike at Boeing delays delivery of new fuel-saving wide-body aircraft, its chief executive said on Wednesday.

 

Air Canada CEO Montie Brewer said the country's biggest carrier does not know when it will receive two Boeing 777s it had expected by the end of this year. It had also banked on one additional 777 in the first quarter of 2009.

 

"They'll come late," Brewer told an investor conference in Montreal. "(Boeing has) given some initial indication day to day, but obviously they don't really know until the strike ends and they can understand how the supply chains and the whole process can begin back up again."

 

Air Canada has so far taken delivery of 15 777s.

 

This year, it has had already pushed its timetable for receiving new-generation 787s back by two years to 2012.

 

Development of that aircraft had been fraught with costly delays before nearly 27,000 Boeing machinists walked off the job in early September, stopping production at the company's Seattle-area plants.

 

Both aircraft types are seen as key to Air Canada's long-haul flying strategy.

 

Brewer said the company will "manage through" the delay getting the remaining 777s. He did not elaborate.

 

Earlier this year, as oil prices headed toward a record above USD$147 a barrel, Brewer said Air Canada might retire wide-body Airbus A330-300s sooner than planned, and use replacement jets to reduce fuel costs before the 787s start entering the fleet.

 

(Reuters)

 

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