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Airline Finance News - Europe.

Mar 5, 2007

EU, US Agree Tentative 'Open Skies' Deal. The European Union and United States agreed on Friday to the outlines of a new pact to open transatlantic aviation markets, smoothing over a rift on airline ownership in the hope of boosting traffic and creating jobs. The executive European Commission said the provisional "open skies" deal covered ownership and control rights over US airlines by EU investors and would allow the EU to restrict US investment in EU airlines. Mar 1, 2007

Experts pushing US to make concessions to save open skies. Open skies talks between the US and EU are set to resume today in Brussels with experts warning that the lack of an accord--or at least an initial agreement--could postpone a potential transatlantic air pact indefinitely and create increased tension for US-EU flight operations. "The US cannot surrender its role of leadership in the international aviation community," attorney Allan Mendelsohn, former assistant secretary for transportation affairs at the US State Dept., said last week. He suggested that the US should ease its foreign ownership restrictions, a move that would increase the likelihood of reaching a deal with the EU. He emphasized, however, that such rule changes should come through legislation rather than the withdrawn, "ill-conceived" Notice of Proposed Rulemaking the US Dept. of Transportation attempted to push through last year. "Amend [the law] so that foreign investors except for [foreign] governments could own US carriers subject to all applicable US laws," he said. Mendelsohn advocated seeking a multilateral open skies pact with nations around the globe rather than merely an EU-US pact. "A much better way of amending all these [bilateral] agreements [the US has with various nations, including EU member states] is to do it multilaterally. . .It's long past due that we look at multilateral solutions rather than the bilaterals that have governed aviation." Feb 26, 2007

Aeroflot

Aeroflot reports earnings rise but feels limited by Russian e-ticket regulations. Aeroflot said it expects to report a 2006 net profit of RUB6.98 billion ($267.1 million), which would represent a 15.6% improvement over the RUB6.03 billion earned the year before when it suffered a slight drop in net earnings. Mar 1, 2007

Aeroflot

Aeroflot revenues grew 13.5% to RUB71.32 billion. The airline carried 7.3 million passengers last year, up 8.9%. Load factor rose 1 point to 70.1%. In conjunction with the announcement, the Aeroflot board issued a plea to the Russian government to expedite the implementation of e-ticketing. "The current regulatory framework of the Russian Federation does not allow Aeroflot to realize its potential in full for full value introduction of technology of e-ticketing similar to existent international practice. This deprives domestic customers of many conveniences," the carrier said in a statement. The board said it instructed SU management and executives to make "suggestions on improving the legal framework of the Russian Federation." Mar 1, 2007

Aeroflot

Aeroflot said it sold more than 40,000 tickets on its website last year and attracted 200,000 "prospective customers" to its site each month. It added functionality in six European and three Asian languages and said it hopes to sell more than 1 million tickets through the Internet by 2009 and 25%-30% of all tickets through the Web by the following year. Mar 1, 2007

Airbus

Airbus EADS board unanimously approved Airbus's Power8 restructuring plan, details of which will begin to be revealed to employees Wednesday. The board said in a statement that it "fully supports" the cost-cutting program, adding: "Power8 shall enable Airbus to better face the challenge of the US dollar weakness, the financial burden related to the A380 delays as well as its future investment needs." The approval followed last week's Franco-German summit that brokered compromises on job cuts and facility closures aimed at easing German opposition to the restructuring plan. Company officials now will have to convey the plan's merits to labor groups that have threatened work disruptions. Feb 27, 2007

AiRUnion

AiRUnion has big plans, AiRUnion President Alexsandr Abramovich is expecting approval soon from the Russian government to complete the merger of the alliance's five constituent airlines. "We are in the final phase. The application is at the table of the president of Russia," Abramovich told last week in the Siberian city of Krasnoyarsk. The tie-up would be the largest of its kind in Russia. Currently, AiRUnion is a combined marketing platform comprising KrasAir, Domodedovo Airlines, Sibaviatrans, Samara Airlines and Omskavia. Feb 26, 2007

AiRUnion

AiRUnion reported 2006 turnover of $1.15 billion, up 36% on 2005, and posted an 11% rise in passenger numbers to 3.7 million. It serves 67 destinations and claims a 12% market share, equal to that of S7 Airlines and 12 points behind Aeroflot. Regarding AiRUnion[sup.1]s plans to acquire Malev Hungarian Airlines, Abramovich said it is a "good project that will not affect our newly established cooperation with Austrian Airlines". Malev is scheduled to join oneworld in the spring while OS is a member of Star Alliance. Nevertheless, AiRUnion's strategic plan includes joining either Star or oneworld by 2015. Feb 26, 2007

AiRUnion

AiRUnion[sup.1]s short-term plan includes merging the five carriers' product into one by the end of 2008, with fleet renewal scheduled to conclude in 2010. "We are absolutely not satisfied with our current fleet, which has an average age of around 15 years," he said. On the network front, AirUNion plans to hub at Moscow Domodedovo and Krasnoyarsk for European, Asian and polar North American routes. Samara will function as a secondary hub. Feb 26, 2007

Austrian Airlines

Austrian Airlines operates 566 weekly flights, including codeshare operations, to 45 Eastern and Central European destinations. The 2 million passengers it transports on those routes constitute a quarter of its business. Among Western European carriers it serves the second most destinations in Russia after Lufthansa's 10. Feb 27, 2007

Austrian Airlines

Austrian Airlines takes more than 200,000 passengers to Russia each year and expects its alliance with AiRUnion to produce 100,000 additional passengers. Meanwhile, AiRUnion is preparing to offer flights to Vienna from Samara and Krasnoyarsk. Feb 27, 2007

British Airways

British Airways Keen To Join Consolidation. British Airways wants to take part in global consolidation but expects regulatory hurdles to hinder cross-border deals, Chief Executive Willie Walsh said on Thursday. BusinessWeek magazine reported last month that American Airlines parent AMR may be a buyout target by a group including British Airways and Goldman Sachs, although sources familiar with the matter said the two parties had no current plans to bid for the American Airlines parent. Mar 1, 2007

Hungarian Airlines, AirBridge

Malev Hungarian Airlines sale to AirBridge, a consortium led by Russian carrier KrasAir, concluded Friday. The purchase price was a little more than $1 million, according to press reports. The consortium committed to capital investment of $66 million and the repayment of $68 million in debt by year end, according to UPI, while the BBC reported that KrasAir CEO Boris Abramovich said Malev will return to profitability within two years. Feb 27, 2007

Iberia

Iberia carried 27.8 million passengers in 2006. Traffic rose 7% to 52.49 billion RPKs on a 3.4% increase in capacity to 65.8 billion ASKs, improving load factor 2.7 points to 79.8%, a new record for the Spanish carrier. Yields gained 2.6% to [euro]0.076 and passenger unit revenues climbed 6.2% to [euro]0.06. Operating expense per ASK was ahead 5.8% to [euro]0.08, or 0.2% to [euro]0.062 excluding fuel. Feb 28, 2007

Iberia

Iberia fourth quarter ended Dec. 31, net loss reached [euro]9.4 million, widened from a [euro]5.8 million deficit in the year-ago period. Revenues rose 7.8% to [euro]1.37 billion and expenses grew 4.4% to [euro]1.33 billion. EBIT was [euro]48.6 million, which the company said represented a sixfold increase over the 2005 quarter. Feb 28, 2007

Iberia

Iberia in line with its 2006-08 strategic plan, IB began restructuring its short- and medium-haul networks while raising ASKs on long-haul operations by 8.6%. The number of long-haul passengers grew 10.3% to 3.9 million and load factor improved 2.5 points to 85.6%. Occupancy of its intercontinental Business Plus class also climbed 10 points year-on-year. Yesterday it announced the launch of a five-times-weekly Madrid-Washington Dulles service on June 2 aboard 260-seat A340s. Feb 28, 2007

Iberia

Iberia still profitable but doesn't compare to banner 2005. Iberia Group yesterday reported a net profit for the 11th consecutive year, though earnings of [euro]57 million ($75 million) in 2006 fell a precipitous 85.6% from the [euro]396 million posted in 2005 when the company benefited from gains from the sale of Amadeus and Savia. Feb 28, 2007

Iberia

Iberia[sup.1]s last year's operating revenues increased 10.5% to [euro]5.46 billion, with growth in all divisions. Expenses rose just 4.2% to [euro]5.33 billion, owing mainly to a 36% jump in fuel spend to [euro]1.18 billion. Fuel accounted for 22.4% of all operating expenses, up from 14.2% in 2004. Operating income was [euro]122 million, up 4.7% from the [euro]116.6 million earned 2005. Excluding adjustments for new international accounting standards, 2006 EBIT surged 67.7% to [euro]150.4 million. Feb 28, 2007

Icelandair

Icelandair, based on the full-year pro-forma report, the company posted an operating profit of ISK3.33 billion on revenues of ISK56.14 billion and costs of ISK50.09 billion. Separately, the airline announced contracts for a new Thales IFE i4500 system and new seats from Aviointeriors worth a combined ISK1.8 billion. The deals are part of its effort to renew its 757 fleet and "a clear statement that Icelandair intends to offer full service on board," CEO Jon Karl Olafsson said. Mar 2, 2007

Icelandair

Icelandair Group reported a ISK550 million ($8.3 million) loss in the three months ended Dec. 31, its first quarter since splitting from investment company FL Group. The company was acquired by a consortium called Icelandair Group Holding, which then merged with Icelandair Group on Nov. 1. Full-year figures, which showed a ISK2.62 billion profit, were presented on a pro-forma basis "to provide information about how the Group's operations and cash flows might have been" if the sale occurred at the beginning of 2006. Year-ago comparisons were not provided. Principal investors in Icelandair Group are Langflug (32%), Naust (14.8%) and Fjarfestingafelagid Mattur (11.1%). Mar 2, 2007

Icelandair

Icelandair reported three-month revenues of ISK12.59 billion, expenses were ISK12.25 billion and the operating result was a ISK394 million loss. The scheduled airline operation posted a ISK390 million net loss on revenues of ISK9.29 billion. Icelandair Group comprises 14 subsidiaries. Mar 2, 2007

KrasAir, AiRUnion

The city of Krasnoyarsk is investing $550 million in the rebuilding of its airport, which it intends to transform into a transportation hub for central Russia. Private investors contributed 45% and the remainder is coming from the government. Construction will commence this year. The airport has a current capacity of 2 million annual passengers and eventually should handle up to 10 million. Aircraft movements should grow from 12 per hr. to 60. No schedule for completion of the work has been released. Yegorov expects 10% annual passenger growth through 2014 for AiRUnion alone. "We expect that 2.4 million of our 8 million passengers by 2015 will be transit passengers. We think this is a realistic timeframe," he said. . Feb 28, 2007

LTU German Airlines

LTU German Airlinessaid talks are continuing with potential investors in the airline. LTU last month revealed it was in talks with several parties interested in taking a stake in the airline, including Condor's majority owner Thomas Cook - which is being acquired by retailer KarstadtQuelle. LTU is 55% owned by investment group Intro and 45% by Meerbusch-based Marbach Beteiligung und Consulting (MIC), the investment organisation linked with LTU chief Jurgen Marbach Mar 2, 2007

LTU German Airlines, Airbus

LTU German Airlines unveils new livery, investor talks continue. German leisure carrier LTU has unveiled a new livery to coincide with delivery of its latest Airbus A330-200 and signifying its development beyond pure charter operations. LTU's latest A330-200, which will take its long-haul fleet up to a dozen, enters service in May and will debut LTU's new livery. While retaining red and white as its principle colours, the new design scaps the current red colouring across the upper fuselage. The tail remains red and this slopes to and runs along the underside of the fuselage. A silver strip will separate the red and white portions of the fuselage. Mar 2, 2007

LTU German Airlines, Condor

LTU German Airlines and Condor confirmed they are discussing a possible tie-up six months after LTU MD Juergen Marbach said the two might forge a partnership in the wake of Air Berlin's acquisition of dba. "We are in concrete talks. Currently we are discussing what cost savings could be achieved," LTU majority owner Hans Rudolf Woehrl told the dpa news service. He said he believes a merger could achieve [euro]70 million ($92.5 million) in savings but that progress would be slow, in large part because Condor is involved in other partnerships and is majority owned by KarstadtQuelle. Lufthansa holds 25% of Condor. Mar 2, 2007

LTU German Airlines, Condor

LTU German Airlines is working to reposition itself through an extension of its long-haul network and an effort to attract more business travelers. It will add an A330-200 this month and by the next winter schedule will launch 14-times-weekly flights to Bangkok, thrice-weekly service to Los Angeles and twice-weekly flights to Las Vegas from either Munich or Dusseldorf. It is expecting positive results in 2007 after more than a decade in the red. Marbach said he is anticipating a 5% increase in revenue this year. LTU flew 5.75 million passengers last year with an 82.1% load factor. Mar 2, 2007

Lufthansa

Lufthansa Offers To Collect Climate Friendly Fees. Lufthansa said it was studying plans for the collection of a voluntary climate protection fee from passengers in a bid to fight global warming. He said plans for the scheme were still sketchy but could be turned into action later this year. They entailed the collection of voluntary supplements which would be handed over directly to climate protection projects in developing and emerging countries, but those still needed to be identified. Feb 26, 2007

Lufthansa

Lufthansa said the size of the climate protection fee supplement was not yet clear, the spokesman said, describing the 68 euros for a Frankfurt-New York-Frankfurt trip, which the Spiegel report mentioned, as only a sample calculation by the magazine. Germany's aviation industry has only recently warmed to the idea of possibly joining carbon dioxide emissions trading schemes which so far focus on energy producers, aligning itself with demands from Brussels and Germany's transport ministry. Lufthansa still remains doubtful and says a worldwide solution for the industry is necessary. Emissions trading sets commercial incentives on carbon avoidance, which would be in contrast to emissions taxation models. Feb 26, 2007

Royal Jordanian

Jordanian government plans to retain a 26% stake in Royal Jordanian when it proceeds with the carrier's privatization later this year but may eventually sell, RJ President and CEO Samer Majali said. "I'm not sure that the Jordanian government intends to remain a shareholder over the long term," he said last week. In order to maintain traffic rights, the airline must be at least 51% owned by Jordanians, but there is no requirement that the government control a portion of that holding. RJ will become a member of oneworld on April 1. Feb 27, 2007 03/05/2007

Z

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Feb 26, 2007
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Date:Mar 5, 2007
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