star

Lufthansa’s shareholders have voted through a E9b bailout package that gives the German government a stake in the group almost a quarter of a century after it was first privatised. The deal, which allows Berlin to raise its holding to a blocking minority in the event of a hostile takeover bid, had been in jeopardy after the airline’s largest investor, billionaire Heinz Hermann Thiele, indicated that he wanted to reopen negotiations with Angela Merkel’s administration. However, Thiele, who built a 15.5% position in the airline in the months following the Covid-19 outbreak and could have single-handedly blocked the bailout because of the low turnout at Thursday’s extraordinary general meeting, ended up supporting the package. Overall, more than 98% of those registered voted to approve the bailout. In his opening remarks at the meeting, CE Carsten Spohr defended the size of the deal, which he previously said was larger than the amount Lufthansa needed to avoid insolvency. “Viability is the sum of competitiveness plus ability to invest,” the former pilot said. Spohr also said the German carrier had “no alternative for meeting our capital requirements”, and reiterated that Lufthansa will emerge from the crisis a smaller group, with at least 100 fewer aircraft. Rival airline Ryanair has vowed to challenge the bailout in court. The success of the bailout vote is a blow to a number of US and UK hedge funds, which had stood to profit if the rescue package was scuppered.<br/>

Ryanair has filed a complaint to EU antitrust regulators about alleged talks between Lufthansa's Italian unit Air Dolomiti and three Italian airlines to fix prices, the chief legal officer of Europe's biggest budget airline said on Thursday. The complaint also cites alleged price fixing in Austria involving Lufthansa's local unit Austrian Airlines. "I can confirm that the price fixing cartel complaint was filed with the European Commission," Ryanair's Juliusz Gomorek said. "In Austria, where Lufthansa has a subsidiary, in the context of the bailout of that subsidiary, we have government officials talking about potentially introducing minimum prices," he said. Earlier this month, Austria said it would introduce a minimum ticket price of on average E40, a shot at budget airlines' heavy discounts and following its E450m bailout of Lufthansa's Austrian Airlines. Gomorek also pointed to Italy "where Lufthansa has its subsidiary, we have that subsidiary talking about getting together with three other airlines to discuss and maybe agree what price levels they may feel comfortable at."<br/>

United ’s second attempt to pull off a debt sale looks to have worked. The airline boosted the size of the offering on Thursday, with investors clamoring to get a piece of the debt backed by its frequent-flyer program. The package was increased to $6.8b from $5b, and the yields are significantly lower than the double-digit ones offered on a $2.25b bond sale that the carrier nixed last month after it was unsatisfied with the terms. The company is now planning to sell $3.8b of senior-secured bonds after initially pitching a $3b deal, while the leveraged loan portion has been increased by $1b to $3b, according to people familiar with the matter. Total orders for the combined offering were more than $16b earlier Thursday, the people said, asking not to be identified discussing a private matter. United’s bond may yield 7% to 7.26%, the same as levels discussed prior to the size increase. The debt is expected to be sold at a discounted price of 98.75 cents on the dollar. The discounted price offered on the loan portion was earlier narrowed to 98 cents on the dollar from 97 cents, and may yield around 7.03% to 7.3%.<br/>

Air NZ CE Greg Foran says crew on international flights are unjustly being singled out as targets of fear about Covid-19 coming into the country. In a message to staff he said the airline was working closely with the Ministry of Health to keep staff and the public safe. "But I know this doesn't make it any easier. Upon returning home, our crew are often unjustly the focus of people's fear of another spike of Covid-19, and I know this is hard for them and their families," Foran said. Air NZ is operating a skeleton service between Los Angeles and Auckland and the Government this week tightened up on rules covering air crew as alarm over border bungles grew. Foran said the reduction in flying hours had hurt crew financially and when they did fly "it's very different to what they are used to". There were changes to service and procedures, as well as being confined to hotel rooms during the layover, which can sometimes be days. When returning from the US, which with high levels of community transmission is considered a high-risk area, there are also self-isolation requirements upon their return to New Zealand, which placed extra strain on crew and their families, he said. "Please know that we stand with you and appreciate what you are doing to return people to their homes and get our economy moving again," Foran told staff.<br/>

The coronavirus outbreak is unexpectedly providing an opportunity to SIA to grab a share of the lucrative Indian market held by rivals Emirates and Etihad through a local affiliate. Vistara, which Singapore Airlines jointly owns with Indian conglomerate Tata Group, is about to get its second Boeing 787 Dreamliner jet, and expects demand for long-haul international travel from India to rise when travel restrictions lift, chief commercial officer Vinod Kannan said. While the outbreak has delayed expansion plans for the airline, people will prefer direct flights as demand returns towards the end of the year, he said. "There will be an increase in the number of people who want to travel direct, say, from India to Europe, because they don't want to transit through another hub that increases travel time, that increases exposure," Kannan said this week. "There's actually a silver lining for us" both in terms of business travellers and people flying to visit their friends and relatives, he said. The advantage for SIA will come from the fact that India doesn't allow foreign airlines to directly fly passengers to a third country. That is where its local affiliate will step in, providing non-stop connections overseas and luring passengers away from Emirates and Etihad. The success of Vistara is crucial for SIA - which just raised about US$6.2b by selling shares and convertible bonds - as it needs more connections to its sprawling network in absence of a domestic market.<br/>

SIA has confirmed that it is taking back Boeing 777-200s it is leasing to joint venture airline NokScoot. NokScoot said on 24 June that it will return three aircraft to their lessor by the end of June, as part of a rationalisation of its business amid the pressures of the Covid-19 pandemic. It is also making an unspecified number of staff redundant. “We are progressively taking back aircraft leased to NokScoot. This is because NokScoot does not have the ability to make lease payments,” Singapore Airlines said. “The future of NokScoot is a matter under discussion by all shareholders.” Cirium fleets data show NokScoot operates a fleet of seven Boeing 777-200s and owns all the aircraft.<br/>

Air Canada’s CE Calin Rovinescu has excoriated the government of Canada for maintaining coronavirus-prompted travel restrictions he says are hindering the air transport industry’s ability to return to any semblance of normalcy.<br/>Rovinescu questioned why the government of Canada is “continuing with these broad and indiscriminate measures” that are “disproportionate [and] out of step with other countries”. The measures remain in place some four months into a crisis that grounded much of global air travel earlier this year. “In imposing comprehensive, blanket quarantine and other travel restrictions, our government effectively deployed its emergency powers. And, at the time, broad-brush, immediate blanket prohibitions may well have been necessary, having been introduced at the peak of the crisis,” Rovinescu said. “Now, more than 100 days later, aviation in our country is still largely closed and an enormous amount of people in Canada are severely impacted. Our government needs to act reasonably in discharging its broad powers. They do need to consider alternatives that achieve the public health objectives in a way that minimises damage to the economic and social well-being of Canadians and apply objective, evidence-based measures that carefully balance the many competing interests and other rights at play, especially as the curve has flattened."<br/>

EgyptAir announced Wednesday the schedules of its international flights after the State’s decision to resume the aviation movement as of July 1. Egypt’s national carrier said on its website that its flights’ schedules from July 1 to 7 will include the destinations of Sharqa, Abu Dhabi, Athens, Addis Ababa, Iraq’s Erbil, Amsterdam, Paris, Berlin, Brussels, Budapest, Beirut, Toronto, Juba, Dubai, Rome, Frankfurt, Vienna, London, Milan, Munich, New York and Washington. The flights' destinations from July 8 to 14 will include Baghdad, Guangzhou, Geneva and Copenhagen, it added. EgyptAir noted that flights' destinations as of July 15 would cover Barcelona, Dar Essalam and Madrid. The Egyptian national carrier asked its customers who booked any of the international flights before June 15 to confirm their reservations on the scheduled international flights that will operate from July 1 till mid-September.<br/>