Star Alliance News

[Pieter C. 5]

Lufthansa CEO: Foreign Investment Would Help US

 

November 20, 2008

The chief executive of Lufthansa expressed frustration on Wednesday over the United States' restrictions on foreign ownership of airlines.

 

Lufthansa holds a 19 percent stake in JetBlue Airways, but the US Congress has resisted pressure to lift a 25 percent cap on foreign ownership of US airlines.

 

"Yes, we would have loved to do more (with JetBlue) but we are limited," Lufthansa chief executive Wolfgang Mayrhuber said in New York.

 

Asked if Lufthansa expected to ever increase its stake in JetBlue, Mayrhuber said: "We leave it open. That's the current regulation -- nobody should be afraid of foreign direct investment."

 

Mayrhuber said a lot of investments by American companies around the world were not limited and that fresh capital would be of benefit to the United States.

 

European airlines have been hoping the second stage of the US-EU Open Skies agreement, now under discussion, would force the United States to lift foreign ownership restrictions on its airlines by 2010.

 

President George W. Bush supported that goal, but US union groups and Democrats have opposed the idea, fearing it would mean job losses for financially weak US airlines.

 

Mayrhuber said the United States was the driver of foreign direct investment around the world and benefited a lot from it, so it was curious it placed restrictions on foreign investment in US airlines.

 

"It does not mean we have a lot of cash and want to buy everything here, but it's curious -- we can re-regulate or stay where we are and not move at all," said Mayrhuber, who spoke at a Yale Club luncheon and afterward to reporters.

 

"If we believe this is a global industry... why should we then limit ourselves in areas like ownership?" he asked.

 

Asked if Lufthansa is considering investing in another US airline, Mayrhuber replied: "Not at the moment."

 

Lufthansa has been leading the pack in European airline consolidation and is currently the exclusive bidder for state-controlled, loss-making Austrian Airlines. A deal is expected within a month.

 

"It's no secret we talked to them and put an offer in," Mayrhuber said.

 

But he added: "We will only be interested if we have a fair share of the debt... we would be willing to do it, but we will not take all the baggage."

 

Lufthansa is demanding that it assume only half of Austrian Airlines' EUR900 million euros debt.

 

Asked if Lufthansa was still interested in a tie-up with Italian carrier Alitalia, Mayrhuber said: "They make the decision, not us."

 

The Italian government said on Wednesday it agreed to sell Alitalia's assets to a group of Italian businessmen at an improved price.

 

(Reuters)

 

Australia Watchdog Rejects Air NZ-Air Canada Pact

 

November 20, 2008

Australia's competition watchdog on Thursday refused to approve a cooperation agreement between Air New Zealand and Air Canada, saying it would harm competition on the Australia-Canada route.

 

In a draft determination, the Australian Competition and Consumer Commission said it would deny the airlines the authority to put the agreement into effect. "Air New Zealand and Air Canada are two of the four main carriers on the route," it added.

 

(Reuters)

 

How on earth can Australia block a New-Zealand airline from cooperating with a Canadian airline ???

 

[Pieter C. 5]

Singapore Air Says Not Cutting Salaries For Now

 

November 25, 2008

Singapore Airlines, the world's largest airline by market value, said on Tuesday it is not looking to cut staff salaries to cope with a severe global economic slowdown.

 

"There are existing mechanisms in place which determine how much of the variable component of staff salaries need to be suspended, but we are not at that point where we are looking at it now," SIA spokesman Stephen Forshaw said.

 

(Reuters)

 

[Pieter C. 5]

United Reaches New Deal With Card Processor

 

November 25, 2008

United Airlines parent UAL said on Tuesday it had altered its deal with its largest credit card processor, suspending a requirement to maintain additional cash reserves if its balance falls below USD$2.5 billion.

 

UAL said in a regulatory filing that in exchange for the relaxing of the requirement, the company had granted Paymentech a security interest in certain aircraft with a current value of at least USD$800 million.

 

Previously, UAL was required to put up additional money if its balance of unrestricted cash, cash equivalents and short-term investments was to fall below USD$2.5 billion.

 

Shares of UAL rose 24.75 percent at USD$11.04 on Nasdaq, supported by the news, said Calyon Securities analyst Ray Neidl. "That probably helped. It increased the liquidity," he said.

 

Neidl said the entire sector was up on a sharp decline in the price of oil, which is linked to the price of jet fuel.

 

"Oil is down over three bucks," he said. "And it's generally a moderately positive market today."

 

Continental Airlines closed up 9.05 percent at USD$14.46 on the New York Stock Exchange. Delta Air Lines was up 14.15 percent at $8.39, also on the NYSE.

 

UAL and its rivals have been working to bolster liquidity this year as high oil prices and a weak economy batter the industry. Oil prices have shed about USD$95 a barrel since July, diminishing the value of fuel hedging contracts at many airlines.

 

UAL also said in the filing that it expected to take losses of USD$232 million cash from fuel hedging and USD$138 million non-cash from mark-to-market fuel hedging in the fourth quarter.

 

UAL said it expected mainline passenger unit revenue to rise 2 percent to 4 percent in the quarter.

 

(Reuters)

 

SAS Sees USD$16 Mln Norway Dispute Cost

 

November 25, 2008

Scandinavian airline SAS said a dispute between SAS Norway and Norwegian Cabin Crew union NKF, dating back to 2004, has been resolved by a court ruling which is negative for the SAS Group.

 

As a result all employees in SAS Norway will have their pension payouts restated from 66 percent to 70 percent with retroactive effect from December 1 2004.

 

This will lead to a one off negative economic employed effect of SEK130 million Swedish kroner (USD$16.27 million) and SEK30 million per year thereafter SAS said.

 

(Reuters)

 

[Pieter C. 5]

Alitalia Suitor Lufthansa To Set Up Italian Airline

 

November 26, 2008

Lufthansa will set up its own Italian airline early next year, even as it courts Alitalia, as the battle to make inroads into the lucrative Italian air travel market heats up.

 

Lufthansa, which is vying with arch-rival Air France-KLM to strike an alliance with Italy's bankrupt national carrier, said its move did not mean it was "closing the door" on its ambitions to tie up with the Italian airline.

 

The German carrier was also closing in on its planned acquisition of a government stake in loss-making Austrian Airlines, which Austrian state holding company OeIAG said it planned to sign with Lufthansa next week.

 

If Lufthansa did lose out to Air France-KLM on Alitalia, its new airline would allow it to pressure Alitalia on its home-turf just as the Italian carrier tries to reinvent itself after years of losses and strikes.

 

"This move puts the Italians under pressure to act," LBBW analyst Per-Ola Hellgren said. It also sent a message to the CAI group buying Alitalia that Lufthansa could set up competing operations if it is not picked as foreign partner, he said.

 

The CAI consortium of Italian businessmen is buying Alitalia for EUR427 million euros (USD$553.5 million) and working to relaunch it as a smaller, more efficient carrier next month.

 

The airline picked as foreign partner is expected to buy a 20 percent stake, though Lufthansa chief executive Wolfgang Mayrhuber said a price or size of stake had yet to be discussed.

 

At a news conference at Milan's Malpensa Airport, where plans for the new airline were announced, Mayrhuber said the Lufthansa ought to be selected as partner because of its multi-hub strategy and high traffic between Germany and Italy.

 

Lufthansa's new airline, which will fly under the "Lufthansa Italia" banner and seek an Italian operating license, will be based around Milan's Malpensa hub, where Alitalia has cut back sharply in a bid to reduce costs and turn itself around.

 

It will fly to eight European destinations, including Paris Charles de Gaulle and London Heathrow. The initial flights will take off in February and the airline will start with a fleet of six Airbus aircraft.

 

Malpensa will become part of Lufthansa's multi-hub system under the plans, said Giuseppe Bonomi, chairman of Milan's airport operator SEA.

 

Fearing job losses and a hit to the local economy, Bonomi and other Milan officials and politicians had waged a bitter fight to force Alitalia to rethink its plans to reduce its presence at Malpensa.

 

Lufthansa's ambitions in Italy are part of its broader plans to grow amid a cut-throat battle in the European aviation market to survive as recession bites.

 

The carrier is not actively seeking to sell parts of subsidiary bmi, Mayrhuber said.

 

He also said he would be "extremely surprised" if the EU blocked a purchase of Austrian Airlines -- where it is the only remaining bidder after Air France and Russia's S7 dropped out of the race.

 

Austrian state holding company OeIAG said on Wednesday it expected to rubber-stamp the sale in a supervisory board meeting on December 5 and to sign it on the same day.

 

As the deal involves the Austrian government assuming EUR500 million of debt from Austrian Airlines, it needs EU approval for this form of state aid on top of a review of the impact on competition.

 

(Reuters)

 

[Pieter C. 5]

Lufthansa Plans Won't Hurt Alitalia Tie-up Chance

 

November 27, 2008

Lufthansa's plans to set up its own Italian airline do not make it less of a candidate to be Alitalia's partner, a member of the investor group buying the Italian carrier's assets said on Thursday.

 

The German carrier said on Wednesday it would set up an Italian airline early next year as it vied with Air France-KLM to strike an alliance with bankrupt Alitalia. Its assets are being bought by the CAI consortium of Italian businessmen.

 

Lufthansa said the move did not mean it was "closing the door" on its ambitions to tie up with the Italian airline.

 

When asked if Lufthansa's move would hurt its prospects for becoming Alitalia's partner, Pirelli Chairman Marco Tronchetti Provera, an investor in CAI, told reporters: "It doesn't change anything."

 

He told a briefing the priority for CAI was to choose a partner that would help it build a competitive airline.

 

CAI is buying Alitalia for EUR427 million euros (USD$550.8 million) and working to relaunch it as a smaller, more efficient carrier next month.

 

The airline picked as foreign partner is expected to buy a 20 percent stake.

 

On CAI's launch date, Italy civil aviation regulator ENAC said CAI would not be able to start airline operations on December 1 as planned. In a statement, it did not give a date for the start-up.

 

ENAC has completed its examination for awarding CAI its passenger license and operator certificate. ENAC can only issue these when it has evidence CAI has available the necessary financial resources for operating, it said.

 

"In addition, the documentation has to be finalized for the transfer of ownership of planes between the old and new companies," it said.

 

(Reuters)

 

 

SAS Airliner Lands In Norway After Engine Problem

 

November 27, 2008

A Scandinavian airline SAS plane bound for Chicago was forced to land at Trondheim in Norway on Thursday because of an engine problem, the airline said.

 

The Airbus A330 aircraft from Stockholm was carrying 193 people, a spokesman said.

 

"The plane had problems with one of its two engines -- the pilots tried to fix it but failed, and then chose to land at the nearest airfield," said Anders Lindstrom, SAS spokesman.

 

"This Airbus A330 can land and fly with only one engine, and the pilots made a normal, controlled safety landing," he said.

 

Lindstrom added that technicians were examining the engine but he had had no report on what caused it to fail.

 

SAS Bombardier aircraft made three crash-landings within the space of weeks last year due to problems and a flight by its Spanair unit crashed in August, killing 154 people.

 

An SAS spokeswoman in Norway said that a different plane would pick the passengers up either later on Thursday or on Friday morning and take them to their destination.

 

(Reuters)

 

[Pieter C. 5]

Lufthansa To Park Seven Planes On Slow Demand

 

December 1, 2008

Lufthansa said on Monday it had taken four long-haul aircraft temporarily out of service and that it planned to park a further three planes to counter a drop in demand.

 

Four Airbus A300-600s have been grounded and three A340-300s are slated to be put out of service for an unspecified time, a company spokesman said.

 

The airline had earlier reported in an internal publication for employees that some aircraft would have to be grounded.

 

Lufthansa had warned in October that its 2009 capacity, excluding its Swiss subsidiary and new routes from Milan Malpensa Airport, would shrink.

 

(Reuters)

 

Air Canada Gets Cash From Frequent Flyer Partner

 

December 1, 2008

Air Canada said on Monday that Aeroplan, the operator of the airline's frequent flyer plan, has agreed to speed payment for reward tickets issued under the plan, raising CAD$70 million (USD$56.6 million) for the cash-strapped carrier.

 

Air Canada, the country's biggest airline, said in a statement the payment is for reward tickets issued by Aeroplan until May 29, 2009. The airline also said Air Canada and Aeroplan have also agreed to unspecified "commercial terms that are beneficial to both parties."

 

Air Canada said the deal was a part of a move to improve short and long-term liquidity by "both traditional and nontraditional means".

 

Last month the airline said it had CAD$1.114 billion in cash on hand, not far above the CAD$1 billion Air Canada said it considered to be a comfortable amount, and it planned to take steps to raise additional money.

 

"Air Canada has indicated they are looking for new sources of liquidity," said Cameron Doerksen, an analyst at Versant Partners. "This is obviously part of that plan."

 

(Reuters)

 

 

[Pieter C. 5]

Lufthansa Bid For Austrian Airlines Goes Ahead

 

December 4, 2008

Lufthansa launched its bid for struggling Austrian Airlines on Wednesday after the German airline's board approved a plan to make it Europe's biggest carrier.

 

Frankfurt-based Lufthansa said it would pay up to EUR377 million euros (USD$476 million) in a performance based deal. It revealed its interest in Austrian in August of this year and the pair have been in exclusive talks since November.

 

The German carrier is to pay an initial EUR366,000 for the Austrian government's 42 percent stake, and may pay a further EUR162 million for it, depending on Austrian's future performance and on the Lufthansa share price.

 

The outstanding shares not owned by the Austrian government would then cost Lufthansa an additional EUR215 million at 4.44 euros per share, it said.

 

Shares in AUA climbed 40 percent on the news to 3.70 euros.

 

Lufthansa said that despite the troubles facing the industry, the outlook for the combined company was good.

 

"The consequences of the financial markets crisis and its effects on the real economy have a major impact on the aviation industry," Lufthansa said in a statement. "Structural changes increase the likelihood of Lufthansa and Austrian Airlines sharing a brighter future."

 

Lufthansa shares were up 0.3 percent at 10.36 euros, unchanged from where they were before the company released the statement.

 

Airlines throughout Europe including British Airways and Air France-KLM are seeking tie-ups to better weather an economic downturn due to the finance crisis after having to battle with record fuel prices.

 

Sluggish consumer spending is chipping away profitability, just as oil prices easing off from record highs are taking pressure off airlines' massive fuel bills.

 

With the takeover and with British bmi as well as Brussels Airlines -- both of which Lufthansa is about to acquire -- Lufthansa would increase its annual sales to EUR27 billion, overtaking Air France-KLM as Europe's largest airline.

 

The bid of 4.44 euros per shares hinges on Lufthansa acquiring at least 75 percent of the Austrian airline and the European Commission approving EUR500 million in restructuring aid for AUA from Austria, Lufthansa said.

 

Lufthansa trades at about 8.5 times its estimated 2009 earnings, at a premium to Air France-KLM and British Airways.

 

The two peers are also looking to expand. British Airways is seeking a tie-up with Spain's Iberia and Australia's Qantas, while Air France is competing with Lufthansa for a minority stake in Alitalia.

 

(Reuters)

 

Lufthansa approves minimum €215.4 million takeover of Austrian

 

Thursday December 4, 2008

Lufthansa's supervisory board yesterday approved the acquisition of Austrian Airlines Group, starting with the purchase of state holding company OIAG's 41.56% share for €366,000 ($463,000).

 

LH said it also will issue a debtor warrant potentially worth up to €163 million, "depending on Austrian Airlines' economic performance and the Lufthansa share outperforming its competitors."

 

The German company then will make a €215 million bid for Austrian's remaining shares at €4.44 per share, subject to approval from Austrian competition authorities. The per-share price equals the average weighted market price over the past six months.

 

"Gaining the support of our supervisory board for the acquisition of Austrian Airlines is an important step which paves the way for OIAG, the government in Vienna and the European Commission to make their decisions following due consideration of the transaction," LH CEO Wolfgang Mayrhuber said.

 

"Our bid is fair," he added. "It takes the interests of all those concerned into account and shares the encumbrances and risks fairly. The consequences of the financial markets crisis and its effects on the real economy also have a major impact on the aviation industry. Structural changes increase the likelihood of Lufthansa and Austrian Airlines sharing a brighter future."

 

The offer remains contingent upon the Austrian government assuming €500 million of AAG's approximately €900 million debt, Lufthansa holding 75% of all AAG shares at the conclusion of the unspecified acceptance period for the public takeover bid and European Commission approval. OIAG is expected to meet and confirm the deal Friday.

 

 

[Hakan 2]

Expecting the most preferable to see aircraft will be files in Turkish Airlines. THY is wet leasing 3 B777-300ER from Indian Jet Airways. According as unofficial news, first aircraft will be arrive to Istanbul middle of december and begins crew training and will be make first flight on behalf Turkish Airlines in January 2009. Others triple sevens will be join after new year and they will be begin flights before summer sessions. At the middle of 2009 leasing type will be change from WET to DRY for long term.

 

 

Turkish Airlines starts to fly a few long haul flights in this year. Sydney Australia, Toronto Canada, Sao Paulo Brazil and maybe LosAngeles or San Francisco. Last month THY has been add a new A343 leased from Air Jamaica and reached 9th A340 in the fleet.

 

With the new longhaul aircrafts, THY is increases frequents also negotiate for new destinations.But a new problem is seen at horizon. THY's base airport LTBA Atatürk Airport hasn't got enough wide body parking gate or stand. Also the longest runways 36/18 L&R(9840ft) are not seems enough for fully load 777-300ER takeoffs for long haul flights. Probably 777s needs a technical stop somewheres.

 

 

 

[Pieter C. 5]

Lufthansa Aims To Become European Leader With Austrian

 

December 5, 2008

Lufthansa was due on Friday to sign a deal for the purchase of loss-making Austrian Airlines in a move that would make it Europe's biggest airline, as the sector struggles with the economic downturn.

 

Lufthansa, in a first step, will agree to buy Austrian state holding company OeIAG's 42 percent stake in Austrian Airlines (AUA) but plans to take it over completely for up to EUR377 million euros (USD$482 million) once Brussels approves the tie-up.

 

Airlines are in upheaval around the world, battling wild swings in fuel prices and falling demand as a global recession looms, and Lufthansa is vying with Air France KLM and British Airways to emerge as European industry leader.

 

AUA adds to a string of regional airlines the German carrier is buying: Brussels Airlines, Britain's bmi, and Lufthansa's German partner Eurowings. It is also competing with Air France for an alliance with Alitalia.

 

BA this week revealed it is in talks with Australia's Qantas after earlier this year starting talks with Spain's Iberia, which are still ongoing.

 

Ryanair is trying to buy Irish flag carrier Aer Lingus.

 

November traffic numbers published on Friday confirmed the bleak state of the industry. Scandinavian airline SAS reported a 13 percent drop in revenue passenger kilometres, while Aer Lingus traffic sagged by 9 percent.

 

Airline industry body IATA has warned that commercial aviation could lose more than USD$5 billion this year.

 

The Austrian government had to accept only a nominal price for its AUA stake -- it may get more if AUA meets future earnings targets -- and had to assume EUR500 million of AUA's debt to make the deal happen.

 

(Reuters)

 

[Pieter C. 5]

Mayrhuber on Austrian: 'We are here to make money'

 

Monday December 8, 2008

Austrian state holding company OIAG's supervisory board approved the sale of its 41.56% stake in Austrian Airlines Group to Lufthansa for €366,268.75 ($464,865) on Friday, continuing the German airline's aggressive European shopping spree.

 

Lufthansa approved the transaction the day before and will receive a €500 million paymen next week to cover a portion of AAG debt in exchange for a debtor warrant worth up to €162 million that will depend on Austrian's "economic development" and LH's share price relative to competitors after three years, the companies confirmed. Next spring, LH will submit a takeover offer to all AAG remaining shareholders of €4.44 per share.

 

OIAG CEO Peter Michaelis called the sale "the right decision" that will "consolidate" Austrian's status "as a leading carrier in Central and Eastern Europe" while allowing it to "remain a legally independent company" with its own brand, crew, fleet and Austrian identity.

 

"Only by combining our powers can we hope to find an answer to the global challenges currently facing our industry," LH Chairman and CEO Wolfgang Mayrhuber said, calling the AAG acquisition "another step along this path." LH said it expects approximately €80 million in annual synergies to result from the merger and that Austrian will return to profit in around three years.

 

No long-haul cutbacks are planned, but Mayrhuber did stress that a "profitable job is a secure job" and that LH "cannot make promises" regarding employees owing to the current industry downturn. It will try to maintain staffing levels. "We came to Austria to invest for a long-term period. We are here to make money.

 

Vienna will be LH's preferred hub for routes to Central and Eastern Europe while Zurich (Swiss International Air Lines) and Brussels (Brussels Airlines) will be the centers for its African operations.

 

Austrian CEO Alfred Oetsch said the combination "removes our structural weaknesses, such as a lack of international sales strength and disadvantages in purchasing. Together with our own measures, this will enable the almost total retention of our network strength." He called AAG's financial situation "serious".

 

 

[Pieter C. 5]

Virgin Atlantic Airways President Richard Branson yesterday said that "talks will take place with Lufthansa, maybe are taking place, to see whether it makes sense for the two companies to work together," the Associated Press reported. "There is some logic in the two companies getting together," Branson said. Virgin has maintained interest in either a stake or cooperation with UK rival bmi, which Lufthansa will take over early next year. It also has been working to derail British Airways' tie-up with American Airlines and Iberia. "I would urge governments to beware of companies who use what is going to be a temporary financial crisis to try to bring about mergers that would be against the public interest," Branson said.

 

 

Virgin Atlantic In Talks With Lufthansa About Bmi

 

December 10, 2008

Virgin Atlantic, which is interested in buying bmi, said it is in talks with the British airline's majority owner, Lufthansa about the future of the airline.

 

The news on Wednesday adds another thread to the industry's current wave of merger mania, coming a week after British Airways and Australia's Qantas Airways said they were in merger talks to create the world's biggest airline in an industry desperate to cut costs in the global downturn.

 

"These discussions may or may not lead to an agreement and a further announcement will be made in due course," Virgin Atlantic said in a statement.

 

Its chief executive, Steve Ridgway, said in October a tie up with bmi would be a "very compelling opportunity" that would make his airline a stronger competitor to London Heathrow kingpin British Airways.

 

Virgin believes its long-haul operations would sit well with bmi's predominantly short-haul business.

 

Virgin is particularly interested in bmi's slots at Heathrow which at 12 percent is more than Virgin's 3 percent share but much less than BA which has over 40 percent of slots.

 

In October, bmi founder Michael Bishop exercised an option for Lufthansa to take control of bmi by raising its stake to about 80 percent by buying 50 percent plus one share in bmi from Bishop.

 

Lufthansa Chief Financial Officer Stephan Gemkow said in November that it would consider selling bmi's low-cost carrier bmibaby, although chief executive Wolfgang Mayrhuber has said it is not actively looking to sell bmi assets.

 

Elsewhere in Europe, Irish budget carrier Ryanair has made a hostile offer for Aer Lingus, and is looking to woo regulators and investors.

 

(Reuters)

 

[Pieter C. 5]

No wonder, Lufthansa will start Lufthansa Italia, as it's probably bye-bye to their Star Alliance partner Air One now

 

Alitalia Investor Group Buys Smaller Rival Air One

 

December 11, 2008

Alitalia's smaller rival Air One agreed on Thursday to sell its operations to the consortium buying Italy's flagship carrier, moving the CAI investor group another step closer to its acquisition of Alitalia.

 

Air One said its president, Carlo Toto, had signed an agreement with CAI chief executive Rocco Sabelli to sell Air One and various subsidiaries to CAI, in line with an accord set in August.

 

Closing will take place by the end of the year. The process of integrating Alitalia and Air One to create "the new flagship carrier" will begin from January 13, the Air One statement said.

 

Air One said Toto would reinvest EUR60 million euros in the new airline.

 

(Reuters)

 

 

More Star Alliance (bad) news:

 

Spanair To Cut 517 Jobs In Turnaround Plan

 

December 11, 2008

Spanair, the Spanish subsidiary of Scandinavia's SAS, will cut 517 jobs and reduce the working hours of almost 200 others, it said on Thursday, as part of a plan to turn around the loss-making airline.

 

Spanair reiterated its plan would allow it to boost earnings by EUR90 million euros in 2009 and to break even in the 2010 financial year "or even close with some profit."

 

The number of jobs cuts announced on Thursday is a final figure which had been pending government approval. Spanair originally presented a recovery plan in July which envisaged cutting 900 jobs, around one third of the work force.

 

The airline will reduce the working hours of 185 pilots, cabin crew and mechanics on top of the job cuts, it said.

 

"We have been the first to announce a crisis in the sector and we are also the first Spanish airline to adopt necessary measures to survive," Spanair Director General Marcus Hedblom said in a statement.

 

SAS has been trying to sell Spanair, which made a SEK515 million kroner (USD$64 million) loss in the first half, but abandoned the process earlier after Spanish flag carrier Iberia and former owners, travel company Marsans, both pulled out of the bidding.

 

A Spanair jet crashed on takeoff at Madrid Airport on August 20, killing 154 people. SAS said in October the crash would have an impact of SEK500 million on its results.

 

British investment fund First Mile Investment said on Wednesday it was studying a bid for the airline.

 

Under the recovery plan, Spanair will cut its bases from seven at present to just two: Madrid and Barcelona.

 

(Reuters)

 

[Pieter C. 5]

Star adds Brussels Airlines, targets up to 50 members

 

Friday December 12, 2008

Star Alliance yesterday confirmed that Brussels Airlines, which is owned partially by Lufthansa, will join the organization, and Star CEO Jaan Albrecht said the 21-member group eventually may more than double in size.

 

"We have a lot of requests from carriers" to join the alliance, he told ATWOnline yesterday at Star's annual board meeting in Chicago. "We are now working on a new concept that we can see up to 50 member carriers in the future. That could mean maybe 30 or 40 or even more carriers." He said greater size will mean greater strength during downturns like the one currently facing the industry. "We developed from a 'good weather' alliance to a global alliance that can handle difficult situations like now," he said.

 

Star already is set to add Continental Airlines (now in SkyTeam), Air India and TAM. Albrecht said it is talking to "several carriers" regarding future membership, especially in Africa and Latin America. "But we don't need a hub in the desert. We are not talking to Middle East carriers about joining Star," he said.

 

To handle its much larger future, Star is examining restricting its leadership and management, Albrecht revealed. He said that smaller carriers will provide "local leadership" while Star linchpins like LH or United Airlines will offer "global leadership." He said management strategy "is one of the main topics we are working on currently." He assured that membership will not be stratified and that every Star airline, regardless of size, will be considered a full member.

 

No timeline was revealed regarding SN's membership. It will become Star's 10th European member and operates 45 aircraft on approximately 300 flights to 55 European and 15 African destinations. Lufthansa reached agreement to purchase 45% of SN in September and has an option to acquire the remainder in 2011. UA Chairman, President and CEO Glenn Tilton cited Brussels' "greater connectivity throughout Europe and Africa" as its appealing feature. LH will sponsor SN through the membership process.

 

 

[Pieter C. 5]

Lufthansa Resumes Talks To Buy SAS Stake

 

December 14, 2008

Lufthansa has resumed talks on buying a stake in Scandinavian airline SAS, German newspaper Sueddeutsche Zeitung said, citing industry sources.

 

Talks could be concluded in 2009, the newspaper said.

 

A spokesman for Lufthansa declined comment on the report.

 

Last month a source familiar with the matter said Lufthansa had temporarily broken off talks to buy loss-making SAS to focus its efforts on Austrian Airlines and Alitalia.

 

The German airline last week signed a deal to buy Austrian Airlines, a move that will make it Europe's biggest airline as the industry struggles with the economic downturn. It is also competing with rival Air France-KLM for an alliance with Alitalia.

 

Sueddeutsche Zeitung said the talks to buy a stake in SAS were more difficult than those concerning Austrian Airlines had been as it needed to negotiate with the governments of Sweden, Norway and Denmark, which together own 50 percent of SAS.

 

Chief Financial Officer Stephan Gemkow said last month that Lufthansa was in principle still interested in SAS, but said the company would wait for SAS to restructure its business first.

 

German media had reported that Lufthansa did not want to take over SAS's loss-making unit Spanair.

 

(Reuters)

 

[Pieter C. 5]

SAS Says Renegotiating Collective Agreements

 

December 16, 2008

Loss-making Scandinavian airline SAS is renegotiating its collective agreements with workers' unions, a SAS spokesman said on Tuesday.

 

SAS spokesman Bertil Ternert said the airline, half of which is jointly owned by Sweden, Norway and Denmark, was hoping to unveil the outcome of the negotiations by the middle of next week.

 

The remarks came after Swedish news agency TT reported earlier on Tuesday, without identifying its sources, that SAS was expected to unveil savings measures by the end of the week.

 

TT said the airline had in a letter urged employees to agree to pay cuts and longer working hours to help it survive.

 

Ternert declined to comment on the content of the negotiations with the unions.

 

State flag carriers such as SAS have been struggling for years with overcapacity and competition from more nimble, no-frills airlines. Rising oil prices and the impact of the financial crisis on economic growth have added to the burden.

 

(Reuters)

 

[Pieter C. 5]

Lufthansa targets European network

 

Thursday December 18, 2008

Lufthansa Chairman and CEO Wolfgang Mayrhuber told recently that acquisition of Austrian Airlines and Brussels Airlines is a "logical step" toward creating a pan-European network.

 

Speaking at Star Alliance's annual board meeting in Chicago, Mayrhuber said LH is targeting further consolidation. "From the LH management perspective, we can do more," he told this website. "What we have already done is no surprise."

 

He declined to say whether LH will bid for either SAS Group or LOT Polish Airlines, but said the company's goal is to "create our own Star Alliance network" with a "modular" concept comprising the amalgamation of several airlines. He called it LH's "European answer" to the need for consolidation.

 

The company continues to have its sights set on Alitalia and Mayrhuber said he will not back down despite speculation that Air France KLM is leading the race to partner with Compagnia Aerea Italia. "Our logo is the crane, not a chicken," he said. Lufthansa board member Holger Hatty told Il Messaggero yesterday that LH would offer AZ "more than" €500 million ($686 million) in synergies and that a "multihub and multibrand" network would feature a Rome Fiumicino hub "focus[ed] on tourism" and a Milan Malpensa hub "focus[ed] on business."

 

Lufthansa decided against a bid for Iberia last year, when it displayed considerable caution as consolidation started to unfold.

 

The short-term outlook remains gloomy, however, and Mayrhuber said LH has planned no growth next year. "You should only produce what you can sell," he said.

 

 

[Pieter C. 5]

LOT looks for relief

Monday December 15, 2008

Under pressure from the industry downturn and, potentially, Lufthansa's acquisition of Austrian Airlines, LOT Polish Airlines is seeking help from both Star Alliance and a future industry partner, President and CEO Dariusz Nowak told ATW.

 

Speaking to this website on the way to last week's Star board meeting in Chicago, Nowak said LOT is working on selling a 49% stake to a strong industry partner. "We will try to sell it next year, preferring a European airline," he said.

 

He did not reveal a favorite but said LH will be on the list, an irony considering that its merger with Austrian may exact a toll on LOT. "Now there is Munich, Frankfurt and Vienna in our neighborhood as [gateways] to Eastern Europe. This will have an impact [on LOT], depending on what role Vienna plays with LH," he stated. He said neither LOT nor Warsaw Frederic Chopin is as well known to travelers and both face an uphill battle competitively.

 

While LOT restructures and prepares for the stake sale, it is asking for more help from Star, especially at Warsaw. "WAW is one of the most expensive airports in Europe in terms of cost. We would like to have, for example, a Star Alliance lounge," Nowak said. "And mostly what we want is support from Star Alliance to help develop our network to Eastern Europe." He said LOT's biggest strength is its presence in Poland, Europe's ninth-most-populous nation, and its Eastern European network.

 

Time is short. Nowak said LOT is not well-positioned for the global recession and faces a lack of flexibility on both costs and capacity. It has reduced capacity 5% since September.

 

It also is affected by the 787 delay. It is the aircraft's European launch customer. "We wait for news from Boeing. We expect to have the first aircraft by the end of 2010," Nowak said. Meanwhile, it is in talks with the manufacturer regarding an extension of leases on the 767s it operates across the Atlantic.

 

 

[Pieter C. 5]

SAS Agrees Spanair Deal, FMI May Launch Rival Bid

 

December 18, 2008

Troubled Scandinavian airline SAS said on Thursday it had signed a preliminary deal to sell a majority stake in its loss-making Spanair unit to a Spanish investor group, the latest step in a multi-pronged turnaround effort.

 

However, British investment fund First Mile Investment (FMI) said earlier on Thursday it still planned a rival Spanair bid.

 

SAS also announced on Thursday it had signed an agreement to sell its 47.2 percent holding in airBaltic to airBaltic's management for around SEK220 million Swedish kronor, resulting in a gain of approximately EUR175 million.

 

Earlier this week, Latvia rejected an offer by SAS to sell its stake in airBaltic back to the state for 47 million lats (USD$95.39 million).

 

SAS has said it wished to sell its airBaltic shares because the Baltic state, the majority shareholder in airBaltic, had refused fully to privatize the airline.

 

Like others in the industry, SAS has been forced in recent years to contend with cut-price rivals and overcapacity. It has lost money in every quarter so far this year.

 

The carrier -- half-owned by the governments of Sweden, Norway and Denmark -- said the Spanair deal was with a group of investors in Spain led by the Consorci de Turisme de Barcelona and Catalana d'Iniciatives.

 

It did not disclose financial details.

 

SAS put Spanair up for sale in 2007 but potential buyers shied away from a purchase, deterred by high fuel costs, falling demand and overcapacity in the Spanish market.

 

Spanair has had a rough year so far. The unit lost SEK515 million (USD$70 million) in the first half. Then, on August 20, a Spanair jet crashed on takeoff at Madrid airport, killing 154 people. SAS said in October the crash would result in a SEK500 million hit to its results.

 

"It is positive that they are working on it, but the information is fairly vague so far. We don't know anything about the price tag, or whether they will sell 51 percent or 90 percent," said Erik Gustafsson, analyst at Carnegie.

 

SAS spokesman Sture Stolen said the company could not disclose financial details as the transaction was still being negotiated.

 

"We are not over the last hurdles, but we can confirm that we are in a process and have signed a preliminary agreement and are taking the process further," Stolen said.

 

He said SAS will remain a shareholder in Spanair.

 

SAS plans to sign a final agreement before January 31, 2009.

 

Catalana d'Iniciatives is a private equity fund based in Catalonia that collaborates with the local Catalan government on various projects. Its direct and indirect investment totals some EUR700 million euros (USD$ billion).

 

Potential rival bidder First Mile Investment said last week the company, set up by six private investors three years ago, was studying a bid for Spanair, an investment that would fit in with FMI plans to invest between EUR700 million and EUR800 million in different sectors in Spain.

 

Spokesman Javier Ruiz said on Thursday that FMI bosses would call SAS in the coming days to sound out management before presenting a firm, rival offer before the end of the year or in early January.

 

"We are putting together a firm offer right now. As far as we are concerned nothing has changed. We want to develop an operation without public intervention, to collaborate with Catalan institutions but outside the shareholding.

 

"We would be prepared to substitute part of the debt, and with a long term project to refinance the revision of the whole fleet," he said.

 

Ruiz said FMI, with its Spanish partner Gadair, would offer to assume part of Spanair's debt and would propose that SAS remained as a long term holder of 20 percent of Spanair or that it wound down a 20 percent stake over three or four years.

 

"I don't think (the terms of the offer) will change. There are other deals in the market to go with other airlines in a better position and a bit competitive as well."

 

(Reuters)

 

SAS agrees to unload stakes in airBaltic, Spanair

 

Friday December 19, 2008

SAS Group's restructuring took a significant step forward yesterday with announcement of the sale of its airBaltic stake and a new majority investor in Spanair.

 

AirBaltic, in which SAS holds 47.2%, will be sold to the airline's management for LAT14 million ($27.5 million) in cash by Jan. 31, SAS announced, resulting in a SEK175 million ($22.5 million) capital gain for the Scandinavian company.

 

"This divestment is in line with our strategy not to maintain minority holdings in our airlines. We are pleased to have built airBaltic to a strong Baltic airline . . .and we are confident that the new owners will continue to develop the company in a positive direction," SAS President and CEO Mats Jansson said. It announced its intention to divest airBaltic over the summer.

 

The Latvian government turned down the opportunity to pay LAT47 million for the stake, a Transport Ministry official told reporters this week. Latvia owns the other 52.8% of the carrier. AirBaltic will continue to cooperate with SAS on flights to/from Riga, CEO Bertold Flick said.

 

SAS said it will remain a "core shareholder" in restructuring Spanair but has agreed to introduce a group of Catalonian majority investors led by Consorci de Turisme de Barcelona and Catalana d'Iniciatives. It has tried several times to offload the airline but appeared resigned to keeping it when Iberia backed off in June. SAS said final negotiations are ongoing and the final agreement is expected to be signed by Jan. 31. Terms were not disclosed.

 

 

[Pieter C. 5]

Turkish Air Extends Plane Purchase Tender

 

December 18, 2008

THY Turkish Airlines has extended the deadline of a tender for 105 planes to January 19 at the request of Boeing and Airbus, the airline said on Thursday.

 

Turkish Airlines announced the planned plane order on October 14 and the tender was scheduled for completion on December 17.

 

The order, worth over USD$6 billion at list price, reflects a bid by one of Europe's fastest growing carriers to strengthen its position in the region.

 

"The plane purchase tender has been extended until January 19, 2009 at the request of the manufacturing companies," the THY statement said.

 

THY, partly owned by the Turkish state, invited Airbus and Boeing to bid.

 

It had said it would place a firm order for 25 wide-body, long-haul planes and 50 narrow-body, medium-haul aircraft. It would also place options for 10 wide-body and 20 narrow-body aircraft.

 

The fleet expansion comes as the industry battles to cope with the global financial crisis and economic slowdown.

 

(Reuters)

 

[Pieter C. 5]

Turkish Air Jan-Nov Passengers Up 15 Percent

 

December 19, 2008

Turkey's leading carrier, THY Turkish Airlines, said on Friday the number of passengers it carried in the first 11 months of the year rose 15.1 percent year-on-year to 20.8 million.

 

The flag carrier said in a statement that available seat kilometres rose 11.1 percent to 42.2 billion and revenue passenger kilometres rose 13 percent to 31.4 billion.

 

Istanbul-based THY has embarked on an ambitious expansion project, with plans to buy up to 105 wide-bodied and single-aisle aircraft from Boeing and Airbus.

 

(Reuters)

 

[Pieter C. 5]

Turkish Airlines Signs Bosnia Carrier Deal

 

December 22, 2008

Turkish Airlines on Monday signed a deal to buy a 49 percent stake in Bosnia's Muslim-Croat federation flag carrier BH Airlines.

 

Under its first joint venture deal Turkish Airlines will cover the EUR5 million euros (USD$6.98 million) cost of leasing two aircraft and invest an additional EUR5 million in BH Airlines, its chief executive Temel Kotil said.

 

"Our aim is to help BH Airlines increase its fleet, improve the services and expand the links Europe-wide," Kotil told a news conference after he signed the contract with Prime Minister of Bosnia's Muslim-Croat federation Nedzad Brankovic.

 

The federation government owns a 51 percent stake in BH Airlines.

 

Turkish was picked as the best bidder in an auction for BH Airlines in October. Malaysia's Comintel and a Jordanian consortium that included Royal Jordanian Airlines were among firms that made binding bids for the stake in the company.

 

Kotil said that Turkish Airlines plans an ambitious expansion program to become one of Europe's leading airlines and pledged to assist BH Airlines in following the suit in the Balkans.

 

According to the contract Turkish will in two months provide BH Airlines with a Boeing 737, and with another Airbus passenger plane in 2010.

 

It will keep all BH Airlines employees and the company's name and headquarters.

 

BH Airlines went bankrupt in 2003 but resumed operations in 2005 after a deal with Hypo Alpe Adria Bank to settle most of its debt. It employs 89 people and transported about 70,000 passengers in 2007.

 

Following the deal BH Airlines expects to increase its share of the Bosnian air travel market to 30 percent from the current 15 percent.

 

(Reuters)

 

Surprising to see, what TK will see in such a small airline, like BH !!!

 

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Virgin hopes to create 'true network carrier' at LHR with bmi mainline acquisition

 

Tuesday December 23, 2008

Virgin Atlantic Airways is not interested in acquiring bmi regional or bmibaby and is negotiating with Lufthansa solely about the acquisition of bmi's mainline operation at London Heathrow, Virgin CFO Julie Southern confirmed.

 

"We are in the very early stage of talks, and whether they go anywhere or not we don't know," Southern said, reiterating VS's statement that "discussions may or may not lead to an agreement". She added that "if bmi happened, I suspect that joining Star Alliance would be something that would follow on from that, but talks are at such an early stage it is premature to be thinking about that now."

 

She acknowledged that combining bmi's short-haul and Virgin's long-haul operations would change VS's present point-to-point model. "It will be a challenge but I still think it would be the right thing to do if that ever becomes a serious possibility," she said, noting that a potential deal was not about the slots. Bmi holds some 12% of LHR's slots and VS 3.5%. "If you acquired all those slots and used them for long-haul routes. . .that does not work as a business model. It's about bringing the feeder traffic together, combining the long-haul network with the short-haul network. This would be about both businesses benefiting from synergies, both in terms of revenue and cost."

 

In addition, Southern argued, the creation of a "true network carrier" at LHR would provide passengers with "badly needed competition" for British Airways. Virgin is a fierce and outspoken opponent of BA's and American Airlines' application for antitrust immunity. Virgin and Air France are the only carriers filing objections to the US Dept. of Transportation regarding the immunity sought by oneworld partners BA, AA, Iberia, Finnair and Royal Jordanian. DOT requested further information from BA, AA and IB last Friday, according to press reports.

 

Meanwhile, LH Chairman and CEO Wolfgang Mayrhuber told Frankfurt's Borsen Zeitung that the German company will evaluate the future of bmi only after the UK carrier returns to profit. Bmi has said it expects a loss this year.

 

Southern also conceded that the group's intent to sell or reduce its 49% shareholding in Virgin Nigeria has been put on hold owing to the current credit crunch. "The business is increasingly independent and we would be happy to sell or reduce our shareholding as part of a private placement capital-raising process. Clearly, that has been temporally put on hold for the moment because the markets just won't support it. So for now we maintain our shareholding, the brand remains on the business and even beyond the sale the brand could remain on the business," she said.

 

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Lufthansa's Price For Austrian Airlines Increased

 

December 23, 2008

Austria's Takeover Commission has set the price Lufthansa will offer shareholders in Austrian Airlines at 4.49 euros per share, slightly more than indicated earlier, Lufthansa's law firm said late on Monday.

 

In a two-step deal, Lufthansa agreed this month to buy Austrian state holding company OeIAG's 42 percent stake in AUA, and said it would take full control for up to EUR377 million (USD$528 million) once the European Commission approved the tie-up.

 

Lufthansa had said it expected to offer 4.44 euros per share for shares not owned by OeIAG. It said the Takeover Commission's calculation included more data then it had used originally.

 

While AUA shares have risen 34 percent since Lufthansa first announced the indicative price it would offer on December 3, the bid is still 26 percent above Monday's closing price of 3.56 euros.

 

Lufthansa said it expected to launch the public tender for shares in the last week of February. Its bid for AUA is conditional on reaching a 75 percent stake.

 

(Reuters)

[Pieter C. 5]

Brussels looks to redefine itself ahead of LH acquisition, Star entry

 

Wednesday December 24, 2008

Brussels Airlines is considering repositioning itself again as a full-fledged network airline and reintroducing a business class on its European network, steering away from the "new generation carrier" concept introduced in March 2007 when it merged the operations of full-service SN Brussels Airlines with low-cost Virgin Express.

 

The probable shift in SN's service model follows the September takeover agreement with Lufthansa and the subsequent invitation to join Star Alliance. Although never really positioned as a true LCC, the carrier integrated several low-cost elements from VEX such as an all-economy configuration on its European network. It could retain its dual economy class concept--flexible full service (38% of passengers) and low fare--on its European network while adding a full-service business class to align its product offering with its Star partners and better contribute to LH's multihub strategy.

 

SN offers business class to three medium-haul destinations and on its African network, which it is planning to expand from the current four A330-300s (it is considering leasing two more A330s) operating to 14 destinations. Last week it opened an Africa Zone at Brussels Airport's Terminal A that includes a business class lounge. Star is looking to make the terminal a dedicated alliance facility.

 

Separately, SN VP-Communications Geert Sciot told this website that the carrier installed a management partnership team together with Lufthansa to plan integration projects "including ground handling, network development, cargo. . .However, they are only projects until we obtain regulatory approval" for the acquisition, he said. The European Commission is expected to announce next month whether it will clear the takeover or open an in-depth investigation.

 

SN also announced the launch of a weekly BRU-Palermo service on April 4 aboard a 737, operating twice-weekly in July and August.

 

 

[Pieter C. 5]

Crisis Threatens A380 Sale To All Nippon

 

January 5, 2009

All Nippon Airways (ANA), Japan's second-biggest airline, will scrap plans to buy the Airbus A380 as it and bigger rival Japan Airlines slash capital spending, a newspaper reported on Monday.

 

The global economic downturn has been hitting airlines as fewer people travel for business and leisure, forcing carriers to review capital spending and ditch less profitable routes.

 

Japan's Yomiuri newspaper, without citing sources, reported that ANA would cut capital spending by JPY100 billion yen to JPY200 billion (USD$1.09 billion to USD$2.18 billion) from a planned JPY900 billion in the four years to March 2012.

 

ANA, which has been considering adding the Airbus A380, Boeing's 747-8 and others to its fleet from fiscal 2012, said that while it has postponed choosing new aircraft, it has not cancelled its plans.

 

"As we said in December, the decision has been postponed and not scrapped," said ANA spokesman Rob Henderson. He added that the evaluation process would remain on hold until business conditions become more positive.

 

In Europe, Airbus said it understood the postponement announced in December.

 

"We hope ANA will resume its large aircraft selection process as soon as the financial market situation brightens. We are convinced the A380 has already demonstrated lower operating costs and excellent revenue opportunities," a spokesman said.

 

The A380 entered service at the end of 2007.

 

ANA spokeswoman Nana Kon said the company had no comment about the change in its capital spending plans as reported in the Yomiuri.

 

ANA is reviewing its business plans and aims to announce them, including a possible change in its capital spending budget, by early February, Kon said.

 

The economic slump has taken a toll on the airline industry. Last week the International Air Transport Association (IATA) said international airlines saw a 13.5 percent fall in cargo traffic in November and a 4.6 percent drop in passengers.

 

Japan Airlines (JAL), Asia's largest carrier, said last month that it may reduce its capital spending budget for the three years to March 2011 by nearly a quarter, prompted by falling demand for international flights.

 

ANA, meanwhile, cut its full-year operating profit forecast by about one-third in October, saying business conditions were likely to get tougher in the latter half of the business year.

 

An Airbus sale in Japan would be a big breakthrough for the European plane maker, since it has only about 4 percent of the Japanese market, compared with a 50 percent share elsewhere.

 

Nikkei business daily had reported in July that Airbus would sell five A380s to ANA, its first sale of the world's biggest passenger plane to a Japanese airline.

 

The ANA campaign has been central to a battle between Airbus and Boeing on two fronts, according to industry executives.

 

There is a battle for market share as Airbus tries to break Boeing's longstanding dominance of the Japanese market.

 

And a battle is being waged globally over the future of Boeing's most recently launched model, the Boeing 747-8.

 

This is an enhanced jumbo jet designed to defend Boeing's position in the large-capacity segment from the 525-seat A380 -- even though the plane makers disagree over the importance of this market, with Boeing focusing mainly on the 250 to 350 seat range.

 

The 747-8 boasts increased fuel efficiency and is popular with freight carriers but has only one traditional airline customer for its passenger version, Germany's Lufthansa.

 

Many airlines hesitate to invest in new models until they have at least two customers to reduce maintenance risks, so getting a second buyer has been seen as vital for Boeing which has so far said it remains committed to building the plane.

 

Airbus scored a pre-emptive victory last year when it fought efforts by Boeing to make Abu Dhabi's Etihad the all-important second 747-8 customer, selling it more Airbus A380s instead.

 

Etihad nonetheless did place a USD$9 billion order for Boeing's mid-sized wide-bodied jets, including 35 new 787s.

 

ANA is set to be the first carrier to fly the lightweight 787, which has been delayed by up to two years by production problems and a strike.

 

(Reuters)

 

[Pieter C. 5]

Thai Airways Delays Airbus Payment For 3 Months

 

January 6, 2009

Thai Airways said on Tuesday it had agreed with Airbus to postpone the first payment for six A330 aircraft to be delivered in 2009 after being hit by the global crisis and Thai airport closures.

 

The first payment will be postponed to April from January and subsequent payments will also be delayed for three months, acting President Narongsak Sangapong said.

 

"We sent a letter to Airbus requesting a payment delay of three months and they replied that they agreed to our request," Narongsak said.

 

Thai Airways has suffered from a week-long shutdown of Bangkok's two main airports by political protests towards the end of 2008 plus a fall in passengers due to the global economic crisis, he said.

 

The national carrier has ordered eight A330 aircraft and six of them will be delivered this year, with the first due in April, he said, adding that the delivery of six A380 superjumbos was still on track for December 2010.

 

Thai Airways planned to revise a decommissioning plan, which would be discussed at a board meeting next week, Narongsak said.

 

The airline has said it aimed to lease or buy 34 planes as part of a 10 year plan to renew its fleet.

 

The airline, which is considering ways to cut costs and boost revenue, said last month the global crisis and the airport shutdown would pull 2008 revenue growth below 10 percent and the impact would continue to be felt in 2009.

 

(Reuters)

 

[Pieter C. 5]

Thai Air Seeks Delay Of Airbus A330 Deliveries

 

January 7, 2009

Thai Airways said on Wednesday it planned to ask Airbus to delay the delivery of six A330 aircraft due later this year because of the sluggish airline business.

 

The national carrier, hit by the global financial crisis and Thai airport closures late last year by political demonstrators, had no pressing need for the new planes and the postponement should help ease its financial burden, Chairman Surachai Tansitpong said.

 

"We will ask Airbus to delay the delivery of the six planes. It's not necessary for us to have new planes at the moment," Surachai said.

 

The plan came a day after Thai Airways said it had agreed with Airbus to postpone the first payment for the six A330 aircraft to April from January, with subsequent payments also delayed for three months.

 

The national carrier has ordered eight A330 aircraft, with six of them to be delivered this year, the first in April. It has also ordered six A380 superjumbos to be delivered from December 2010.

 

Plans to revise a decommissioning plan will be discussed at a board meeting next week.

 

Thai Airways said last month the global crisis and the airport shutdowns would pull 2008 revenue growth below 10 percent and the impact would continue to be felt in 2009.

 

(Reuters)