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Airline Finance News - Europe.

Jan 8, 2007

Air France, Alitalia

Air France and Alitalia each own a 2 percent stake in the other. Air France declined to comment on the launch of the tender. Italian carriers Meridiana and Eurofly declined to comment on whether or not they would bid. Detailed requirements for Alitalia's buyers, such as maintaining minimum levels of service and national coverage, will be specified at a later stage, the Treasury said. Italy plans to conclude the process within six months, Economy Minister Tommaso Padoa-Schioppa said earlier this month. Should the competitive bidding process fail, Italy may also use a public offer or share swaps to cede its Alitalia stake, the Treasury said. It reiterated it would pick the winning bid based on its economic offer and the ability of its industrial plan to "develop and relaunch" the ailing airline. Jan 2, 2007

Alitalia

Alitalia Unions Wary After Meeting Financier. Trade unions representing workers at Alitalia remained wary on Tuesday after meeting with a little-known Italian financier who has expressed an interest in buying a stake in the airline. Jan 9, 2007

Alitalia

Investment bank Rothschild is working on a consortium of investors who aim to bid for a stake in Alitalia that Rome is putting up for sale, a source close to Rothschild said on Tuesday, confirming press reports. Asked whether the bank was looking at forming a consortium for the ailing airline's privatization, the source said: "Yes". The Italian government has opened the bidding process for the sale of at least 30.1 percent of its 49.9 percent stake in Alitalia and will accept expressions of interests until January 29. Several newspapers said on Tuesday the Rothschild-led consortium for the airline would include Italian as well as two US funds. Jan 9, 2007

Alitalia

Alitalia remains unprofitable after all efforts. Due to a legacy of purchasing choices made for political purposes, it operates five different types of aircraft built by as many manufacturers, multiplying maintenance and pilot-training costs. Due to local pressures and political indecision, the carrier also continues to operate out of both Malpensa and Rome's Fiumicino Airport. Most other airlines cut costs by using only one hub. Analysts have speculated on possible bids for the airline by rivals such as Air One and long-time potential suitor Air France KLM, but no leading contenders have emerged so far. Jan 2, 2007

Alitalia

Alitalia, which has a market capitalization of EUR1.37 billion (USD$1.81 billion), has not made an operating profit in the last five years. The last time it posted a net profit was in 2002, and that only after Dutch carrier KLM paid it EUR200 million to break an alliance. The privatization plan has drawn criticism from some quarters, however. A Lombardy regional government official on Friday attacked it for not specifying measures to protect Milan's Malpensa Airport, one of Alitalia's two main hubs. Since his appointment in 2004, Alitalia Chief Executive Giancarlo Cimoli repeatedly clashed with the carrier's 10 unions as he cut one-fifth of the workforce and split the carrier in two, putting the services and maintenance units into a separate company called AZ Servizi with the aim of selling them. Jan 2, 2007

Alitalia

Italy Opens Bidding For Alitalia. Italy has opened the bidding process for state-controlled Alitalia, hoping that private investors will succeed in reviving the unprofitable carrier after repeated injections of state aid failed. Italy has invited offers of interest for at least 30.1 percent of Alitalia's shares, and possibly as much as the entire Treasury stake of 49.9 percent. In setting the terms of the bidding process, the Treasury said the buyers must keep a stake of at least 30.1 percent in Alitalia until they met the targets of an industrial plan, as well as maintain the carrier's "national identity". Under Italian law, a buyer of more than 30 percent of a company must make a public offer for the rest of the outstanding shares. Jan 2, 2007

British Airways

British Airways Agrees Pension Deal With Unions. British Airways has reached an agreement with its four main unions on a package of reforms to tackle its GBP2.1 billion (USD$4.05 billion) pension deficit, the airline has confirmed. Jan 7, 2007

British Airways

British Airways flew 9.12 billion RPKs in December, a 0.5% drop from the year-ago month. Capacity dipped 0.1% to 12.33 billion ASKs and load factor was down 0.3 point to 73.9%. BA canceled more than 800 flights as fog shut down London-area airports prior to Christmas. Jan 5, 2007

Cyprus Airways

Cyprus Airways said it has completed its restructuring process and is expecting to turn a profit this year. It lost CYP23.2 million ($53.1 million) in 2005 and has not announced its 2006 results. The carrier cut 500 employees from a staff of 1,800 and implemented salary cuts of up to 25% but in line with an increase in productivity. It also announced the addition of Sofia, Heraklion and Rhodes to its network. It is 67% state-owned and operates two A319s, six A320s and two A330-200s to 29 destinations, transporting about 1.6 million passengers per year. It will celebrate its 60th anniversary in 2007. Jan 4, 2007

Finnair

Finnair Group airlines together transported 659,886 passengers, up 0.7 percent year-on-year in December. Finnair Group carried last year about 8.8 million passengers, 3.2 percent more than a year ago. Passenger load factor grew by 2.5 percentage points to 75.2 percent, in scheduled traffic 3.9 percentage points to 71.6 percent. Jan 9, 2007

Finnair

Finnair said its unit revenues, based on RPKs, were in the fourth quarter on a par with the year ago period, but unit revenue for 2006 fell 3 percent. The group said higher ticket prices had not been enough to compensate for increased costs, such as fuel costs. In Asian traffic RPK was up 29.8 percent, but due to even sharper capacity increase the passenger load factor fell 2.3 percentage points to 72.6 percent, it said. Jan 9, 2007

Finnair

Finnish national carrier Finnair's passenger traffic rose year-on-year in December, boosted by strong demand for Asian flights, it said on Tuesday. Finnair's passenger revenue kilometres (RPKs) rose 9.1 percent to 1.56 billion in December, after a 2.3 percent increase in November, it said in a statement. The overall passenger load factor -- a measure of how well an airline fills its seats -- rose 1.2 percentage points to 75 percent. Jan 9, 2007

KLM

KLM will invest more than [euro]100 million ($132.5 million) in the next two years to equip some 130 aircraft with a "fresher, more modern interior." It also will repaint the Fokkers flying for KLM cityhopper in the mainline livery. New Koito lie-flat seats, which boast on-demand entertainment and in-seat power, will be installed in World Business Class aboard KLM's 22 747-400s and 10 MD-11s, bringing them in line with its new 777s and A330s. TV screens aboard 747s will be replaced with Matsushita/Panasonic LCD screens. Economy seats in the MD-11 fleet will be renewed and eventually equipped with on-demand IFE. Interiors will be reconfigured from 2-4-3 to 3-3-3 seating. Jan 4, 2007

Lufthansa

Lufthansa will add around 3,000 new employees in 2007, according to Bild. The carrier is looking for 1,200 flight attendants, 800 ground staff and 240 pilot cadets. It currently employs 94,000, up from 92,300 at the end of 2005. Jan 3, 2007

Lufthansa, SAS

Lufthansa said the SAS takeover talk was "all speculation" and that it had not given Goldman Sachs a mandate for any merger and acquisition transaction. A spokesman for SAS said he was not aware of any bid approaches. A Lufthansa spokesman said Goldman was advising KarstadtQuelle after the German retailer agreed to buy out joint venture partner Lufthansa's stake in tourism firm Thomas Cook for EUR800 million (USD$1.04 billion) last month. Given the involvement of the three governments in SAS, any selloff in the airline is expected by analysts to be complicated. This is also because Norway has been against any sale of its stake. Jan 9, 2007

Meridiana, Alitalia

Smaller Italian airline Meridiana, which is controlled by Prince Karim Aga Khan, is also expected to put in a bid for Alitalia, according to press reports. Last month, Meridiana bought 30 percent of fellow carrier Eurofly. Little-known Italian financier and consultant Paolo Alazraki said last week he was working with 16 unidentified investors to study a bid for Alitalia, the first open expression of interest in the carrier. Alitalia, which has a market capitalization of about EUR1.47 billion (USD$1.91 billion), has not made an operating profit in the last five years. Long-term potential suitor Air France has so far made no comment on the Alitalia sale. The two airlines own a 2 percent stake in each other. Jan 9, 2007

SAS Scandinavian

Scandinavian airline SAS said on Tuesday that its group traffic (revenue passenger kilometres) fell 2.2 percent in December due to lower planned capacity during the Christmas holiday period. It said in a statement that total load factor for last month dipped 1.2 percentage points to 66.1 percent. The yield for November, the latest month available, was up 12.9 percent. It expected a higher rise in yield for December. It repeated that it saw no signs of a slowdown in the air travel market, though there was continued uncertainty due to competition and high fuel costs. Jan 9, 2007 Z Editor: Aram Gesar, eMail: edit@AirGuideOnline.com

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Jan 1, 2007
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