Ryanair reported its weakest annual profit in 4 years Monday and said earnings could fall further as European airlines wage what CE Michael O'Leary described as "attritional fare wars." After initially falling 6%, the shares made up some ground after O'Leary argued that lower fares and profitability for a couple of years were a price worth paying to boost market share and hasten consolidation. O'Leary said the lower fares and profit were cyclical and that 4 or 5 European airlines were likely to emerge as the winners in the sector. "Our strategy would be to keep adding capacity as quickly as we can in all the markets where we can," said O'Leary. "Will it be painful for a year or two, yes it will. But will it shake out more of the competition, yes it will." <br/>
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Ryanair predicted that its customers will embrace Boeing’s stricken 737 Max jetliner once the model returns to service after being grounded. “We see no indication yet from passengers of any concern about the Max aircraft,” CE Michael O’Leary said Monday. Once passengers fly on the plane “they will love it, and it will be a massive success for Boeing,” he said. The airline had been due to get the first Max of 135 on order in April, but deliveries were frozen after the deadly loss of an Ethiopian Airlines plane March 10 highlighted concerns about an anti-stall system. O’Leary said he expects the US FAA to return the jet to service in June or July after the approval of fixes, followed by EASA a month later. Ryanair is the biggest European customer for the grounded Boeing plane model <br/>
Virgin Australia boss Paul Scurrah has given his clearest indication yet that the airline intends to retain a majority stake in Velocity, the airline's frequent flyer program, even as it weighs a float of the lucrative loyalty business. Virgin owns a 65% stake in Velocity, while its partner Affinity Equity Partners owns the remaining 35% and there is a strong expectation that in the market that at the least Affinity is looking to sell out its share. Looking for another investor has promoted Virgin to consider whether to reduce its holding as well, while retaining a controlling stake, to strengthen its financial position. While a straight sale to another industry player or private equity firm has been touted as a likely outcome, sources said Virgin is also exploring the possibility of an IPO for Velocity. <br/>
IndiGo CE Ronojoy Dutta has dismissed as “baseless speculation” reports of a rift between its 2 major shareholders, Rahul Bhatia and Rakesh Gangwal. He took the extraordinary step of issuing a lengthy statement May 18 to address several reports circulating in the Indian media that the 2 shareholders are taking legal advice to resolve a dispute. “These reports have in turn fuelled further speculation as to what those areas of disagreements could be including future direction of the company, management changes, control issues and the like. I would like to forcefully address these baseless speculations as they are not in the best interests of our shareholders, our employees and the travelling public,” Dutta says. <br/>
Taiwan’s Far Eastern Air Transport (FAT) has abruptly canceled over 30 international flights after it came close to flying beyond its monthly limits set by the country’s CAA. The Taipei-based carrier canceled all flights to Palawan and Boracay in the Philippines May 17 then canceled service to Vietnam’s Da Nang May 18. It is also suspending flights to Japan, South Korea and China by end of May. FAT’s poor safety records and quarter-century old fleet forced the CAA to limit its monthly flight hours to 1,350 hrs. The airline said that it had already reached 1,270 hrs. and had no choice but to cancel its international flights. About 1,084 passengers are affected by the cancellation. FAT has 8t McDonnell Douglas MD-82 family aircraft in service, ranging from 21 to 28 years old. <br/>
TUI Group will decide by the end of May whether to extend contingency plans put in place to offset the impact of the grounding of its 15 Boeing 737 MAX 8s. If it does not become clear during May that the MAXs will resume operations by mid-July, TUI will need to extend the measures through the summer season, the company said May 15. The group’s MAXs, which comprise about 10% of its fleet, served the UK, Belgium, the Netherlands and Sweden. After the worldwide MAX groundings, TUI began using spare aircraft in its fleet, extended expiring leases for aircraft that were supposed to be replaced by MAX aircraft and leased additional aircraft. The grounding has been costly, with the group expecting a one-off impact of E200m (US$223m). <br/>
Kenya Airways LCC subsidiary Jambojet plans to receive 4 more Bombardier Q400s in 2019 under the leadership of new CE Allan Kilavuka. “ Kilavuka said:. “That’s a doubling of our fleet. We’ll use it for regional expansion.” The former General Electric executive became the airline’s CE in January, succeeding founding CE Willem Hondius, who held the position for 5 years before returning to KLM Royal Dutch Airlines as senior advisor for alliance development. The four additional aircraft are scheduled to arrive in July, August, September and November. Kilavuka said Jambojet hopes to add flights to Bujumbura (Burundi), Goma (Congo), Juba (South Sudan), Kigali (Rwanda) and Zanzibar (Tanzania). “What has stifled our growth a little bit is the speed at which we’re getting the rights to fly to some of these places,” he said. <br/>