Airline Finance News - Asia / Pacific.

For more airline finance news, data and analysis, please go to: http://www.airguideonline.com/professional.htm Jun 26, 2006

Air China

Air China yesterday offered HK$3.23 billion ($416 million) to increase its stake in Cathay Pacific Airways to 17.5% as part of a transaction that will privatize China National Aviation Co., which controls Air Macau and catering, maintenance and ground handling services. CNAC agreed to sell its stake in Dragonair last week as part of the deal in which Cathay is taking over its fellow Hong Kong airline. "For Air China, the privatization will bring the operating units of CNAC under our direct control and simplify our shareholding in Cathay Pacific," Air China Chairman Li Jiaxiang said in a statement, according to Bloomberg News. "For CNAC shareholders this privatization reflects an excellent return on their investment." Air China plans to use bank loans to fund the CNAC privatization. Jun 23, 2006

Air India 

Air India said it received expressions of interest from seven parties/consortia in serving as its consultant in preparing a "road map" for its merger with Indian Airlines. Its board will invite the bidders to make presentations June 26-27. Jun 19, 2006

All Nippon - ANA, Japan Airlines

ANA and Japan Airlines face a limited 24-hr. strike on June 21 by some pilot unions "over dissatisfaction with the management stance on career progression," among other issues. International flights will not be affected but up to 25% of domestic flights for both airlines will be impacted. Jun 20, 2006

Jet Airways

Jet Airways takeover of rival Indian airline Air Sahara has fallen through, at least for the time being. Jet says it was paying too much after due diligence. This leaves Air Sahara in a difficult position, the airline in some ways already an effective part of Jet. As far as London is concerned Air Sahara had dropped its little promoted daily Boeing 767 service several months back, the aircraft in a maintenance hangar prior to reemerging for Jet Airways proposed Ameristar - Heathrow route. This service has now been delayed. Jet Airways has however confirmed that it is going double daily LHR - BOM from 10 July. http://www.jetairways.com http://www.airsahara.nettop Jun 24, 2006

Jet Airways

Jet Airways-Air Sahara deal falls through. Five months after sealing a merger that would have created an airline with control of nearly half the Indian market, Jet Airways and Air Sahara have parted ways in acrimonious fashion and will head to court.Neither carrier issued a statement, but press reports from India said that Jet, which agreed in January to purchase its rival for $500 million, pulled out of the deal after struggling Air Sahara refused to renegotiate for a lower price ahead of Wednesday night's deadline. One report suggested Jet wanted to cut the purchase price by 20%-25%. Air Sahara reportedly holds a 9%-13% market share, while Jet has 35%. Analysts were quoted as saying Jet would have had to pour too much money into the smaller carrier to turn it around. The airlines have filed lawsuits against each other to prevent the withdrawal of money placed into a common account, The Times of India reported. Jun 23, 2006

Qantas

Qantas will scale up its aggressive cost reduction program following Wednesday's warning that a combination of redundancy payouts and a A$1 billion ($737.8 million) additional impost from rising fuel prices will see its full-year earnings fall by 27%. In a statement to the Australian Stock Exchange, CEO Geoff Dixon indicated that further job cuts may be necessary despite the progress made with the carrier's five-year, A$3 billion cost and efficiency improvement agenda. He said Qantas already faces A$153 million in restructuring costs associated with 2,000 recent redundancies and the closure of its heavy maintenance base in Sydney (ATWOnline, March 10). The loss of a further 1,000 management positions will be accounted for in next year's results. Jun 23, 2006

Qantas

Billion-dollar fuel increase darkens Qantas forecast. Qantas revealed yesterday that its pre-tax profit for the fiscal year ending June 30 will be approximately A$670 million ($494.3 million), which falls at the bottom of the A$670-A$895 million range forecast by analysts. The total is affected by an estimated $153 million in restructuring costs. Jun 22, 2006

Qantas

Qantas has decided against selling its catering operation, the expected proceeds of which were included in the forecast. Instead it will restructure the operation and expects to see annual EBIT improvements of 45%, or more than A$15 million. The restructuring will include realigning its two Sydney catering bases so that one handles only client services and the other only Qantas catering. Jun 22, 2006

Singapore Airlines

Singapore Airlines reported an 8.9% year-on-year growth in May RPKs to 6.75 billion. Capacity rose 3.7% to 9.55 billion ASKs, lifting load factor 3.3 points to 70.7%. Jun 19, 2006