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’Class struggles at Virgin Atlantic
Hot on the heels of British Airways’ dismal 2008 results comes a stunning near-doubling of pre-tax profit from self-proclaimed arch-rival Virgin Atlantic.
From Virgin’s press release:
Virgin Atlantic,
Erstwhile Dreamliners of RBS Aviation
On Monday, we mentioned RBS’s role in financing the purchase of Phenom aircraft for a new business jet operator.
Dublin-based RBS Aviation Capital leases and finances aircraft and engines, with ownership of 372 aircraft and loans secured against some 320 planes,
Very light jets look very vulnerable
An Irish-based, low-cost executive jet airline is all set to launch this September, reports CIARAN HANCOCK
IN AVIATION parlance, JetBird chief executive Stefan Vilner has “pushed back” and is about to begin his taxi to the runway.
RABid BAA
BAA, owner of London’s Heathrow airport, has just released its first-quarter results. They are not pretty.
The debt-laden airport-operator, currently under regulatory orders to dispose of its two other London airports,
Aer Lingus needs a pot of cash
Irish carrier Aer Lingus dropped a real downer of a first-quarter trading statement into the markets this morning.
Revenue dropped 16 per cent in the first three months of 2009, passenger numbers fell 6.5 per cent and yields,
Aerospace mothballs
Ahead of Boeing’s results on April 22, we thought this chart might be instructive. Click to enlarge.
That’s the number of aircraft in temporary storage. The increase in late 2008/early 2009 is startling — and much worse than in the previous down cycle,
The finance of flying fat
European discount carrier Ryanair has long been a big proponent of discretionary charges. Paying for things like check-in and excess baggage charges, added €132m to their third-quarter results, accounting for 22 per cent of total revenue.
AffAer Lingus
Aer Lingus CEO Dermot Mannion’s abrupt departure from the Irish airline on Monday morning has left many bewildered.
So far, all we have by way of explantion is this tidbit from the official statement:
Diverging strategies, airline edition
While most of the world’s airlines weather recession by hunkering down, trimming capacity to cut costs and deal with slackening demand, there are those that have a somewhat different strategy. Spot the odd ones out in this Bernstein chart.
ILFC: The ‘F’ stands for…
ILFC, the plane-leasing unit of black-hole insurer AIG, may be seeking its own bailout soon.
March 25 (Bloomberg) — American International Group Inc.’s plane-leasing unit said it may not be able to survive without help from its parent company or new access to credit.
A suspension of space for airlines
A sign of the times for airlines:
March 10 (Bloomberg) — European Union regulators proposed to suspend an obligation on airlines to use their airport slots at least 80 percent of the time to avoid losing them,
The return of business-class only
London’s Luton airport may once again see all-business-class flights as BWAA prepares to start services this year.
BWAA, which stands for British West African Airways, plans to fly between London Luton and Nigeria,
Fun with maths at Airbus
Saj Ahmad, of aerospace blog FleetBuzz Editorial, points us in the direction of some interesting numbers from Airbus yesterday.
The European planemaker announced a cut in production rates for its aircraft on Thursday.
A British Airways yield condundrum
British Airways has just unleashed a £127m net loss in the nine-months through Dec. 31, 2008.
It’s already guiding for a £150m operating loss in the full-year (through March 2009) because of further “economic weakness”
Aerospace datapoint du jour
From Ryanair’s third-quarter results. (FT Alphaville’s calculations).
Proceeds from sales of Boeing 737-800 in Q3 2008 – €26.5m each. (Five aircraft sold for roughly €132.6m)
Proceeds from sales of Boeing 737-800 in Q3 2009 – €21.2m each.
London Gatwick, the saga continues
News broke last week that airport operator Hochtief’s bid for London’s Gatwick airport had been excluded.
The reason? According to Bloomberg’s unnamed sources:
Essen-based Hochtief submitted an initial offer that was too low,
British Airways’ nosedive
British Airways has just unleashed a bombshell of a trading statement.
Further economic weakness in January and the outlook for February and March combined with the fall in sterling, are impacting our outlook for the year ended 31 March 2009.
Flying like it’s 1991
Airline tickets, which have so far managed to resist deflationary pressures, may be moving towards a rather pronounced collapse.
Yesterday, we saw a JP Morgan economist speculate that the 34 per cent 12-month increase in air fares contained in the UK’s December inflation figure was on the verge of a “reversal”.
Inflation’s upside surprise
UK December inflation came in higher than expected, though it still fell the most since 1992. From the FT:
UK inflation fell in December by the most since 1992 as the cut in VAT came into effect and stores slashed prices in an attempt to attract customers,
12 private jets, a helicopter and $30m worth of art
… represent just some of the assets Lehman Brothers’ restructuring advisers are attempting to sell, according to page 21 of this presentation. (H/T Footnoted)
Alvarez & Marsal, who are acting for Lehman,
Where have all the bankers gone?
Fuel costs may finally be down, but it’s now a revenue game for the airlines.
To wit, British Airways has just announced a 12.1 per cent fall in premium traffic last month — its biggest decline since April 2003 (the 26.4 per cent drop in that month impacted by the timing of Easter).
BAntas dead: The autopsy
Sorry for the morbid headline. We just thought we’d add a bit more detail on the death of the BA-Qantas merger.
FT Alphaville noted yesterday that there were two major sticking points to a BA/Qantas tie-up:
BA, Qantas, RIP
British Airways and Qantas Airways have ended their merger talks, the airlines said in a statement early Thursday morning GMT.
Qantas had this to say on its website:
Qantas Airways and British Airways Plc (BA) are announcing that after detailed discussions about a potential merger of the companies,
British Airways’ pension puff
While we’re on the subject of airports, here’s a a little tidbit on British Airways’ pension deficit, sourced from a 52-page note by Citi’s airline analyst, Andrew Light:
… BA had total pension assets of £12.3bn (of which roughly £5 billion in equities) and pension liabilities of £14.0bn as of end March to give an actuarial combined deficit of £1.7bn as at last March.
Airport purchasing parity
All buyers are not created equal, at least in the UK Competition Commission’s eyes.
The antitrust watchdog has set out some very strict criteria for any potential buyer of BAA’s assets today, after confirming the airports company,
Ryanair, a lesson in shareholder equality
Is it any surprise that the airline run by this man has breached Irish takeover rules?
Probably not. What’s more worrying, however, is what this might do to Ryanair’s second bid for its long-standing Irish rival,
When customers get what they want: Aerospace edition
Boeing’s Vice President of Marketing came under a lot of flak for a post on his blog a few months back:
… some “white noise” can be desirable on an airplane, and even soothing (the difference, say, between the sound of a power saw in the background,
Ryanair 50:50
Ryanair is fond of showing this chart at investor presentations, so we thought we’d reprise it here.
That’s a history of airline mergers approved by the European Commission in recent years, with Ryanair’s 2006 hostile takeover attempt of Aer Lingus the only one to have been blocked by the competition authorities.
Flying forces
Oil has come down to about $57 a barrel compared with the lofty $147 that airlines were complaining of this summer.
Good news for the aviation industry, right? Not quite.
For a start, the airlines still have the crack spread to deal with.
Airbus prepares to double vendor financing
Airbus is preparing to double the amount of vendor financing it offers to about €2bn next year to support commercial aircraft sales and maintain deliveries as its customers struggle to obtain funding from traditional sources such as banks and lessors.