star

Air New Zealand reported its first full-year loss in 18 years and said it is unlikely to return to profit soon as the coronavirus pandemic cripples international travel. The carrier posted a net loss after tax of NZ$454m ($300m) for the year ended June 30, down from a NZ$276m profit a year earlier. While unable to provide specific earnings guidance, it said current modeling suggests it will make another “significant” loss in 2021. The Auckland-based airline, which traditionally generates two thirds of its revenue from international travel, doesn’t expect passenger demand to return to 2019 levels until 2023 or beyond. “Until global borders reopen, we will continue to be significantly impacted by this crisis,” CEO Greg Foran said. “The unfortunate reality is that we don’t expect to see a return to long-haul travel for some time and until then we will be a keenly focused domestic airline.” Air New Zealand has laid off about 4,000 staff and grounded some aircraft, while domestic services have been hampered by a second lockdown in largest city Auckland after a new Covid-19 outbreak there. “Some airlines will not survive this,” Foran said. “The actions we have taken to date, albeit painful, are with a view to setting ourselves up for success in whatever competitive and demand environment emerges on the other side of this crisis.”<br/>

Swedish-Danish SAS said Wednesday that a growing number of bondholders had indicated they backed the debt to equity conversions needed for the airline to move ahead with recapitalisation plans to see it through the pandemic. The airline, part-owned by the governments of Sweden and Denmark, is looking to drum up support among bondholders for the conversions on which the owners’ cash injections for the 14b Swedish crown ($1.61b) recapitalisation plan hinge. The company said it had been informed that owners of 72.5% of the bonds and 77.0% of holders of hybrid notes had so far authorised an agent to vote in favour of the conversions. This represented a sizable increase from earlier this month, when SAS said holders of 42% of bonds and 53% of hybrid notes supported the plan and leaves it far closer to securing the necessary support for the scheme to go ahead. At bondholder meetings scheduled for Sept.2, at least 80% of the attending nominal amount of the bonds, and at least two thirds of that of the hybrid notes, must vote in favour for the swaps to go ahead.<br/>

China’s biggest airlines could provide some much-needed encouragement for an aviation industry starved of good news when they report earnings later this week. While the coronavirus will still likely saddle Air China, China Eastern Airlines and China Southern with losses for the latest quarter, financial statements from the so-called Big 3 may point to a nascent recovery in air travel thanks to demand in their vast domestic market. July traffic figures were promising, with passenger numbers for the three airlines rising about 25% from June as travel within China picked up. The trio flew a total of 22m passengers domestically last month, more than 500 times as many flown at all by Hong Kong-based Cathay Pacific Airways, which has no home market to fall back on. Revenue passenger kilometers also jumped, though the numbers remain far below a year ago, pre-pandemic. After being the first hit by Covid-19, China is emerging from the crisis; it’s the only major economy on track to expand this year. Businesses have reopened and people are traveling again after the government eased restrictions on movement, including for inter-provincial group tours. Popular Chinese destinations include Jiuzhaigou, famous for its colorful lakes, and Yangshuo and cities such as Chengdu, Shanghai and Beijing. Some places are receiving almost three times the number of visitors than last quarter, HSBC Holdings analysts led by Parash Jain wrote in a note dated Aug. 17, citing Trip.com data. Hotels have also become busier after the curbs were lifted. <br/>

The Indian government has extended the deadline for the sale of flag carrier Air India by a further two months, attributing it to the Covid-19 pandemic. In an eighth corrigendum published by the Department of Investment and Public Asset Management, the deadline to submit of expressions of interest has been pushed back to 30 October, from 31 August. Qualified interested bidders will also be informed of the outcome on 20 November instead of 14 September. “The above changes are as per the requests received from the [interested bidders] in view of the prevailing situation arising out of Covid-19,” it says. Until recently, Tata Group had been the only interested bidder for the airline, though local business newspaper Financial Express reported on 21 August that Hinduja Group, Lufthansa, Etihad Airways and Singapore Airlines may also throw their hats into the ring. <br/>

Croatia Airlines has disclosed that it has been discussing the cancellation of its Airbus A320neo order, the latest twist in a single-aisle situation dating back 12 years. Its order for four of the re-engined jets was placed in September 2015 – four months before the type entered service – with the first pair due for delivery in 2021. But the agreement was a conversion of a previous order for four conventional A319s which had languished on Airbus’s backlog since the deal was originally agreed in October 2008. At the time of the conversion to A320neos, Croatia Airlines attributed the dormancy of the A319 order to its previous management team which had “several times delayed” the deliveries. The carrier had claimed the A320neos would be acquired at about the same price as the original A319s, under a deal which had taken the airline two years to negotiate as the carrier restructured its operations. But the order faces further uncertainty. Croatia Airlines, in its half-year financial statement, says it had already begun negotiating the “termination” of the order in autumn last year – as part of a broader long-term strategy – long before the downturn resulting from the coronavirus crisis. The crisis has interrupted the discussions but the carrier is keen to continue them “as soon as possible”.<br/>