EasyJet CE Carolyn McCall has acknowledged the UK’s vote to leave the EU has taken its toll on airline values, although she declined to comment on recent takeover speculation. In August, vague rumours emerged of a potential EasyJet takeover bid, with the airline’s founder, Stelios Haji-Ioannou, or leasing company AerCap tipped as would-be acquirers. “I don’t know where that [takeover] speculation came from and I wouldn’t comment on it, even if I did know,” McCall said. “Airlines are very undervalued at the moment. That is the market reaction [to Brexit], so it’s not surprising that everyone is looking at everything.” She added that EasyJet’s share price dropped by a third within 24 hours of the UK’s vote to leave the EU. “Any time there’s that of kind of swing in share price as a result of a political event, you’re going to look at the sector.” <br/>
unaligned
Southwest Airlines’ international expansion could take it to Canada, and an executive for the company did not rule out eventual transatlantic flights. Flights to the UK from some of Southwest’s US east coast cities are within the theoretical range of the Boeing 737 MAX aircraft, and Southwest MD-business development Dave Harvey said the carrier might one day consider transatlantic flights. But transatlantic service is far down on the list of Southwest’s priorities, he said. “We have so many other places in the US, the Caribbean, South America and Central America that we are considering first.” However, Southwest will serve “far international,” as Harvey termed transatlantic flying, when it begins interlining. The carrier has no interline agreements yet. <br/>
Once again, Southwest Airlines is going it alone. The only one of the 4 major airlines without bag fees is also the only one that is aggressively pursuing a hedging strategy -- one more indication that in its 45-year history, Southwest has never been an airline that follows the pack. CE Gary Kelly said Southwest's strategy has been consistent. "If we can have 50% of consumption hedged by the start of the year, that's a rule of thumb for us," he said. "We've had very successful hedging over 25 years," Kelly said. "We like to have protection if {prices rise}. If prices go down, we will be fine." Notably, in 2008 Southwest reported a US$1.3b hedging gain, although more recently it has been losing money. As of July 18, the carrier said the fair market value of its fuel hedges for the second half of 2016 was a net liability of $545m. <br/>
Allegiant Air’s service to Newark, launching in November, is an attempt to reach what COO Jude Bricker said is the “top leisure destination” in the US—New York City. The carrier will fly to Newark from Savannah, Georgia; Asheville, North Carolina; and Knoxville, Tennessee, each less than daily. The routes to Newark were made possible earlier this year when FAA loosened slot constraints at the airport, Bricker said. Newark is an unusual destination for the Las Vegas-based carrier, which has typically flown leisure routes from small and mid-sized cities. The carrier also serves Los Angeles, but the Newark routes are its first to the country’s largest metropolitan area. “We expect Newark to be a destination market,” he said, adding the carrier does not expect to originate much traffic from the New York area to start. <br/>
Portuguese carrier Azores Airlines will lease 6 new Airbus A321neos—including 4 A321LR long-range versions—from Air Lease Corp. The CFM Leap 1A-powered aircraft will be delivered between Q4 2017 and early 2021. The airline will use the aircraft on its transatlantic network, as well as on services to mainland Portugal and elsewhere in Europe, replacing older A310s. The LR version of the A321neo has a range of up to 4,000nm, allowing it to serve several North American destinations, including Boston, Providence, Toronto and Montreal. The new aircraft will give the carrier the option of introducing new routes and increased frequencies. “The A321neo and the A321LR new technology Airbus family aircraft...is considered ideal and most economical for Azores Airlines’ extensive route network,” ALC EVP Marc Baer said. <br/>
Fastjet’s losses more than tripled during the first half, and the airline said that although it has “sufficient resources” to keep chugging along until Sept 2017, “the headroom over available cash resources is not large”. Pre-tax losses ballooned to US$31.3m during the 6 months to June, up from $9.9m during the same period last year. The airline burned through almost all of its cash reserves during the last year, which fell to $3.8m June 30, down from $71m the same date last year. It has since managed to raise $20m through an open offer in August. This comes as a much needed boost to new CR Nico Bezuidenhout. As it looks to slash costs and turn itself around, the company is currently trying to flog the only aircraft it owns and is pursuing social media as “it offers a cost-effective promotional channel for generating ticket sales”. <br/>