Alaska Air Group is close to reaching a settlement with US antitrust officials that will allow it to complete its proposed $2.6b acquisition of Virgin America, according to a person familiar with the matter. Virgin America's shares rose as much as 5.9% to a record high of $58.70, before giving up some gains to be up 2% in afternoon trading on Friday. Alaska Air's shares were little changed at $79.33. "Alaska believes that (the) Department of Justice review will likely be completed by the end of November," a spokeswoman for the airline said. Discussions with the Justice Department, which has been considering the impact of the merger on competition and airfares, have included the possibility of Alaska jettisoning part of one or more code-sharing agreements it has with larger US carriers, sources told Reuters last month. Alaska Air agreed in April to buy California-based Virgin America to expand in Los Angeles and San Francisco and offer more connections to international airline partners.<br/>
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Emirates, known for luxurious planes with showers and bars, is considering adding cheaper long-distance flights in order to better fend off aggressive competition from low-cost carriers. “More and more international network carriers will be starting to move into the long-haul, low-cost market,” Emirates president Tim Clark said. “That will be the shape of things to come.” Traditional airlines such as Lufthansa and Air France-KLM are trying to expand their low-cost offerings as discount carriers including Norwegian Air Shuttle ASA and Singapore’s Scoot push into the sector’s most lucrative segment. The rivalry is burdening network carriers such as Emirates at a time when terrorism, the economic slowdown in the Middle East and the UK’s planned exit from the EU are already depressing travel and reducing fares. Emirates, which has exploited its Persian Gulf location to turn its Dubai hub into an inter-continental crossroads, has had a particularly rough year. Low energy prices have sapped demand for lucrative premium bookings from executives in the oil and gas industry, while terrorist attacks in Europe have scared off travelers from Asia. Profit at the airline’s parent company Emirates Group plunged 64% in the first half to 1.3b dirhams, the company said last week. Airlines are operating in a world “fraught with volatility,” Clark said. The difficult conditions are especially troublesome for Emirates, the world’s largest international carrier, because it has ordered $112b of aircraft that it will somehow have to fill at a profit. The outlook for fares and passenger demand for the rest of this year “looks fairly flat, but we’ll continue to grow our business because we have planes coming,” Clark said. “Full-service network legacy carriers will have to adjust their businesses for what will be a fierce segment.”<br/>
Emirates said it’s unhappy with performance shortfalls afflicting $6.1b’s worth of Rolls-Royce Holdings engines ordered to power a batch of 50 Airbus Group SE A380 superjumbos. Feedback on the Trent 900 powerplants indicates “technical issues” that need to be resolved before the first plane is delivered to Emirates next month, Tim Clark, the Dubai-carrier’s president, said Friday in Frankfurt.“We have a new engine coming on and there are some issues with that at the moment,” Clark said. “We want the engines as promised in the contract.” Emirates last year ordered 217 Trent 900s -- sufficient to power the 50 four-engine A380s, plus spares -- after previously purchasing GP7000 powerplants from an alliance of General Electric and Pratt & Whitney for its first 90 superjumbos. The deal with Rolls included unspecified “quality improvements.” Clark said Emirates will “hopefully” still take the first Rolls-Royce powered plane on Dec. 2 as planned, adding that talks are underway with the manufacturer on resolving the performance problems and whether it should compensate the airline. Rolls-Royce said that it is “working with Emirates and Airbus to meet the planned entry into service of the Trent-powered A380 within the Emirates fleet.” Clark said that officially deferring delivery of the planes isn’t an option since doing so would impact the model’s entire supply chain. Emirates is due to take 25 Rolls-powered A380s between now and 2019, plus 25 more from 2021 on.<br/>
A Victorian teenager who suffered burns to his genitals when a coffee was spilt on an international flight is suing Virgin Australia. Rhett Butler, 16, suffered burns, blisters and scarring to his thighs, groin, genitals and midriff when a cup of coffee served by cabin crew slipped from a tray table into his lap on the May 2015 flight, according to a statement of claim filed in the county court of Victoria. The incident occurred soon after takeoff on the Los Angeles to Sydney flight and Rhett’s father, Brian Butler, had to provide medical assistance for the rest of the journey in the “absence” of help from the crew, the claim states. The tray table did not have a recess to hold a cup securely and was defective, tilting downwards towards the teen, it’s alleged. Virgin Australia on Monday confirmed “an incident did occur on flight VA2 from Los Angeles to Sydney on 3 May 2015”. “Virgin Australia takes the safety and comfort of our passengers extremely seriously, however given this particular matter has not yet been resolved it would not be appropriate to comment any further,” a company spokeswoman said.<br/>
Lions Air’s subsidiary, Wings Air, has opened a new route connecting two cities in Southeast Sulawesi, Bau-Bau and Kendari, following increased demand. Lion Air Group airport manager in Bau-Bau, Komang Astawa, said that the new route was launched on Wednesday and would fly once per day. The Bau-Bau administration had asked for the service to open since last year, but the airline only realized the plan this year as it was awaiting newly built planes from France. Manufactured at the Avions De Transport Regional (ATR) factory, the turboprop powered ATR 72600 aircraft can accommodate 72 passengers. <br/>