unaligned

Allegiant Airlines will buy new aircraft for the first time, in a purchase valued at $1.2b, as the discount carrier speeds its shift to a fleet of all Airbus Group planes by mid-2019. Buying the 12 A320 jets with currently available engines allows the airline to add planes “opportunistically” as Airbus switches its focus to pricier models with new, more fuel-efficient turbines, Allegiant CEO Maury Gallagher said Friday. The purchase of new aircraft doesn’t represent a change in the low-cost carrier’s strategy, he said. While the value is based on list prices, discounts are customary in such transactions. The jetliners will build on Allegiant’s efforts to improve operations after diverted flights and emergency landings raised concern at the carrier over the last year. Federal regulators said last week that while they found deficiencies in training manuals and practices during an extensive review, the shortfalls were minor and “non-systemic.” The purchases will move up the retirement of Allegiant’s oldest planes from an earlier plan for the fall of 2020. The economic terms of the purchase “were very good,” Tom Doxey, Allegiant’s VP for fleet and corporate finance, said on a call with investors and analysts. “We are focused on buying used airplanes on a continuing basis,” COO Jude Bricker said. “We look at this as any other spot transaction we do, and it will augment our purchase of used airplanes.”<br/>

Gol Linhas Aereas Inteligentes SA CFO Edmar Lopes is stepping down, a key departure amid the struggling airline’s effort to gain solid footing through negotiations with suppliers and creditors. Richard Lark will replace Lopes, taking over the task of helping the airline survive Brazil’s toughest recession in at least a century. Lopes was unable to persuade enough investors last month to accept an exchange offer for $780m in dollar-denominated debt. The offer was deemed a crucial part of the company’s efforts to survive in Brazil’s shrinking air travel market. Lark takes Lopes’s place leading negotiations with aircraft lessors to return 20 Boeing 737s from its 143-plane fleet by the end of the year. The company is also talking with Banco do Brasil SA and Banco Bradesco SA about the terms of 1.05b reais (US$319m) in local-currency bonds. The banks already waived a convenant. Lark has the benefit of additional breathing room due to the real’s gains since the beginning of the year, making up ground after last year’s dramatic drop. The Brazilian currency is the best performer among major currencies, with a 22% increase against the dollar this year. <br/>

Moves by no-frills Thai Lion Air (TLA) to expand its international footprint are gathering pace as its domestic network growth appears to be slowing. <br/>After its commencement of twice-daily services from its Don Mueang airport base to Yangon on July 22, the subsidiary of Indonesia's Lion Air Group has Vietnam as its next immediate target. Daily non-stop flights from Bangkok to Hanoi and Ho Chi Minh City are now set for launch in October, according to TLA chief executive Aswin Yangkirativorn. But China remains top of TLA's near-term international expansion plan as it gears up to tap the vast number of Chinese visitors to Thailand, their top overseas destination. TLA will add more cities to its roster of charter services and upgrading certain charter flights to regular scheduled flights with ticket sales being offered to the general public, rather being opened just for the Chinese market, starting later this year and next year, said Aswin. <br/>

Spirit Airlines reported 2016 Q2 net income of $73.1m, down 4.7% from a $76.7m profit in the year-ago period. The airline said that continued competitive pressure made the end of Q2 challenging. Revenue for Q2 rose 5.5% to $584.1m while expenses increased 7.2% to $462m, producing an operating profit of $121.8m, almost flat from an operating profit of $122m in the prior-year quarter. During peak demand travel, the airline said its fares were too low. “During the quarter, we pushed through several fare increases. This was a first for Spirit,” CEO Bob Fornaro said. “Unfortunately, the benefit of these increases was largely diluted by aggressive competitive pricing actions during that period. However, thanks to our ultra low-cost structure, we were still able to deliver solid profits and among the highest in the industry,” he said. “While our bottom line results were in line with expectations, we are disappointed with the yield performance … despite our efforts, yields were and continue to be pressured by more fare discounting by our competitors than what is typical for a peak summer travel period. International … underperformed our system average. While the beach destinations are fine, many of the VFR (visiting friends and relatives) markets continue to be negatively impacted by macroeconomic conditions in the region,” Spirit CFO Ted Christie said. Revenue per passenger segment for the quarter declined approximately 15% year-over-year, he added.<br/>

Cebu Pacific has placed a firm order for two Airbus A330-300s, the manufacturer said July 29. The new aircraft will expand Cebu Pacific’s existing fleet of six A330s, which operate on long-haul services to the Middle East and Australia, as well on certain domestic and regional sectors. “The A330 has proven to be the right choice for our long-haul low-fare product,” Cebu Pacific president and CEO Lance Gokongwei said. “The newly ordered aircraft will enable us to add more long-haul routes, including the launch of our first flights to the US.” Cebu Pacific operates 49 Airbus aircraft, including six A330s and 43 A320 family single-aisle aircraft. In addition to the contract announced today, the airline has 32 A321neo aircraft on order. It is also a customer for ATR turboprops.<br/>