Norwegian Air has raised US$168m in a share sale to help fund its expansion and cope with higher fuel costs after warning of a larger than expected loss in the current quarter. The budget airline is trying to crack the transatlantic market by undercutting established rivals but faces pressures to control costs and shore up its balance sheet. Its fate rests on the still unproven strategy of adapting the model of low-cost short-haul travel to longer routes. A share price decline of more than a third over the past year indicates that some investors have doubts. The company said on Wednesday it had sold shares at 155 crowns each, a 9.7% discount to Tuesday’s closing price. At 0948 GMT, the stock was down 3.1% at 166.2 crowns. “The equity issuance provides breathing space,” said Davy Research, which has a neutral rating on the stock. The airline is massively expanding its transatlantic network to try to win market share, with routes between Canada and Europe starting in July. It recently launched flights from Britain to Argentina, and will also fly within the south American country. It plans to raise its capacity by 40% in 2018.<br/>
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China Southern said Wednesday it had placed an order for 30 Boeing 737 MAX narrowbodies for its Xiamen Airlines subsidiary in a deal the plane maker said was worth more than $3.6b at list prices. The order, including 20 737 MAX 8s and 10 737 MAX 10s for delivery between 2019 and 2022 will be used to increase efficiency and capacity, China Southern said in a filing to the Hong Kong Stock Exchange. Xiamen Airlines in July had signed a provisional deal during the 2017 Paris Airshow to join the group of launch customers for the 737 MAX 10, the largest version of the Boeing narrowbody family. Boeing said the firm order for 30 jets for Xiamen Airlines had been booked in 2017 and attributed to an unidentified customer at the time. <br/>
El Al Israel Airlines reported higher Q4 losses Wednesday, citing increased salary and jet fuel expenses and as its market share continued to erode in the face of intensifying competition. Israel’s flag carrier has met with stiff competition from rivals including Turkish Airlines, Aeroflot, easyJet and WizzAir, which offer lower fares even though some flights require a layover. “During 2017 the company faced increasing competition in the Israeli aviation market as a result of a significant increase in the number of seats of foreign airlines, especially low-cost carriers,” said CE Gonen Usishkin. The company said it lost $29.7m in the final three months of the year, compared with a $2.4m loss a year earlier. Revenue grew by 11% to $512m, but this was more than offset by a 17% rise in expenses, mainly from salaries and jet fuel. El Al remained the market leader at Ben Gurion International Airport near Tel Aviv, but its market share fell to 28.5% last year from 32.6% in 2016. Passenger numbers rose 2.4% last year while the total number of travellers at Ben Gurion was up 16%. El Al is banking on a more than $1 billon overhaul of its long-range fleet to win back customers while also revamping its short-haul fare structure.<br/>
Ryanair has revived plans to extend its network further east than ever before with flights from Ukraine, according to the European country’s premier. A deal formalizing the expansion should be signed later this week, Ukrainian PM Volodymyr Hroisman said Wednesday. The airline had previously aimed to serve the capital Kiev and the western city of Lviv, projecting demand amounting to more than 500,000 passengers a year. It put that plan on hold in July, saying Kiev airport had failed to honor terms of an outline growth agreement. Ryanair is ramping up competition with Budapest-based Wizz Air in eastern Europe as western markets become increasingly saturated. While demand is currently limited, the potential for expansion is high, with the company saying Kiev has about three airline passengers a year per head of population compared with 15 in Dublin, where it is based.<br/>
Investors are fretting over Southwest Airlines' warning that it's struggling with persistently low airfares. The no-frills carrier said Wednesday that it expects revenue for each seat it flies a mile, a key industry gauge of how much airlines can charge for a seat, to be flat compared with the first three months of 2017. The airline had previously expected a revenue increase of 1 to 2%. Shares of the airline lost close to 5% to end at $57.78. Revenue trends outside peak demand periods, such as holidays, "have been below the company's previous expectations primarily due to the competitive fare environment that continues to pressure passenger revenue yields," Southwest said in a filing. It also blamed a "sub-optimal" Q1 flight schedule on the retirement of its Boeing 737-300 fleet, which it is replacing with Boeing's new 737 MAX line, a more fuel-efficient model. Southwest said it still expects to grow revenue per seat mile in 2018. <br/>
Ten months after handing over the first 737 Max 8, Boeing has now delivered the second major variant in re-engined single-aisle family with Thai Lion Air taking the first 737-9 in a 21 March ceremony in Renton, Washington. The stretched single-aisle powered by CFM International Leap-1B engines completed a 10-month certification effort in January, clearing the way for the Lion Air subsidiary to accept the first aircraft from Boeing. "The 737 has been the backbone of our business since we began and we will use the added capacity the airplane provides to expand our network and start additional routes to Bangladesh, China and India," says Darsito Hendro Seputro, CE and chairman of Thai Lion Air. Another Lion Air subsidiary, Malindo, took delivery of the first 737-8 and launched operations last May. In addition to a stretched fuselage, the 737-9 includes the same package of upgrades that Boeing introduced with the Max family. To reduce fuel consumption, Boeing replaced the CFM56 on the 737NG family with the Leap-1B, added the dual-feather Advanced Technology winglet and resculpted the tail cone into a cleaner, circular shape.<br/>
Virgin Australia’s growing wet-lease and codeshare relationship with Alliance Airlines has been performing well for both carriers. “Alliance really came on board in the first half of last year. The rollout in Queensland went extremely well,” says Virgin Australia group executive Rob Sharp. That saw Alliance take over operations of Virgin’s routes from Brisbane to Mount Isa and Rockhampton, while it also launched its own services from Brisbane to Port Macquarie, Nundaberg, Moranbah, which are codeshared with Virgin. In part, that was driven by Virgin's decision to remove the Embraer 190 jets from its fleet, and to reduce its fleet of ATR 72s. The carrier is now set to use Alliance’s Fokker 100 and 70 jets to start a Brisbane-Alice Springs route from 19 June, which will operate twice-weekly.<br/>
Following Transport Canada’s suspension of Vancouver-based Orca Airways’ air operator’s certificate (AOC) last week, Alberta carrier Integra Air will take over Orca’s scheduled passenger and cargo flights in British Columbia, Integra CEO John Macek said March 19. Transport Canada suspended Orca Airways’ AOC March 15, citing Orca’s “repeated non-compliance with aviation safety regulations … including maintenance, operational control, documentation and quality assurance.” Based at Vancouver International Airport, Orca operated regular scheduled passenger service between Vancouver and four Vancouver Island airports. The airline’s fleet is comprised of Beechcraft King Air and Piper Navajo turboprops. Macek said Integra Air was in the process of negotiating aircraft and crew to take on the Orca routes, and indicated the two airlines have been working toward a merger for months, including shifting Orca’s AOC over to Integra. Integra Air operates scheduled regional routes between Calgary and northern Alberta communities Dawson Creek and Bonnyville, as well as flights between Edmonton and Lethbridge in southern Alberta.<br/>
Thai AirAsia X is eyeing potential flights to Europe, but this year will be focused on bolstering its North Asian network. “It’s a long-term plan, we have been studying again,” said the carrier’s CE Nadda Buranasiri. He admits though that the airline still needs to “fully understand” the market before it launches any routes to Europe. Nadda adds that the carrier has, in the past, been too aggressive and failed to fully analyse the markets it entered. It had to pay the price for it - especially when it comes to entering into markets that are still dominated by travel agents, rather than the independent travellers that are its core target. “In 2016 we were too fast in two markets that were not developed in online travel markets,” he admits. This year, the carrier will take delivery of three Airbus A330-300s, which will take its fleet to nine of the type. The aircraft are being sourced from 49% shareholder AirAsia X. While it will launch services from Bangkok Don Mueang to Sapporo in April, the bulk of the additional capacity this year will focus on adding frequencies to existing routes.<br/>