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Hedge fund Marshall Wace has taken a large stake in BA owner IAG, one of the first big investment groups to bet on a sector battered by the coronavirus pandemic. The London-based group, one of the world’s largest hedge funds with about $48b in assets, disclosed a 3% holding on Wednesday. Marshall Wace and IAG declined to comment on the trade. The bet is a sign the group believes there is value in UK stocks, said a person familiar with its thinking. Hedge funds have been looking at sectors savaged by the coronavirus pandemic such as airlines in recent months as they hunt for bargains in the wake of plunging share prices. IAG’s shares have tumbled 60% to 98p since the end of February. The company, which owns carriers including BA and Iberia, launched a discounted E2.75b rights issue last month to cope with Q2 losses. Some funds have profited from well-timed bets in the airlines and aerospace sectors. Dan Loeb’s Third Point made money from buying Boeing bonds this year. Some hedge funds also built up short positions against IAG ahead of its rights issue, according to data from IHS Markit, which are likely to have proved profitable as the shares fell. However, other funds have been burnt, creating wariness over betting on an industry that may take years to recover. Lansdowne Partners chalked up big losses in its main hedge fund this year in part due to airline bets. Said Tazi, senior portfolio manager at Syz Private Banking, said airline stocks had fallen “probably for good reasons”. He added: “Let’s remember that, even in normal times, most airlines have not performed well relative to the market. The economics of the industry are unappealing: tough competition, high capex, strong unions, and of course oil price volatility.”<br/>

Malaysia’s Khazanah Nasional has the option to channel funds to low-cost carrier Firefly which could become the country’s national airline if Malaysia Airlines was shut down, the head of the sovereign wealth fund was quoted as saying on Wednesday. The comments by Shahril Ridza Ridzuan to the newspaper Berita Harian are the fund’s first public statements since it emerged that Malaysia Airlines’ parent company has warned that the flagship airline could be wound up if lessors did not agree to steep discounts. Firefly, which operates a fleet of 12 twin turboprops, mainly within the country, is currently a fully owned subsidiary of Malaysia Aviation Group (MAG). According to a MAG letter sent to lessors, Firefly would obtain narrow-body planes and subsequently wide-body aircraft from the market in a “Plan B” scenario. Khazanah, the sole shareholder in MAG, will discuss next steps when the outcome of restructuring talks becomes clearer, the newspaper reported. “If Khazanah continues to finance Malaysia Airlines which does not have a strong financial position and often suffers losses, Khazanah will have to dispose of its holdings in other strategic assets or increase debt,” Shahril was also quoted as saying.<br/>

A “flight to nowhere” for lifestyle bloggers and influencers arranged free of charge by the low-cost sister airline of Cathay Pacific has drawn criticism amid looming job cuts at Hong Kong’s flag carrier and growing environmental unease over the global trend for the aerial jaunts. HK Express said Thursday’s preview flight would allow key drivers of public opinion to experience the joy of flying again – following months of pandemic-related restrictions largely grounding services – before the opportunity was extended to the general public. The budget airline revealed last week it was offering three 90-minute “nowhere” commercial flights in early November. All 360 tickets put on sale last Friday were sold out in 90 minutes. The HK Express move has been panned by some working for its parent company, Cathay Pacific, which is in the limelight ahead of an expected announcement of massive job cuts. A Cathay insider said: “What value and what gain can you make from operating these nowhere flights, especially when you’re not in a stable financial situation? What are you trying to generate when business isn’t coming back?” HK Express said that Thursday’s flight was a preview for the commercial ones, which would allow people “to rediscover the joy of flying”. Members of the public pay as little as HK$388 (US$44) for the flight, during which social-distancing rules are observed, while the influencers taking part are not charged. But the ticket revenue would need to cover the costs of running all four flights. HK Express declined to comment on the cost of operating the four flights without in-flight meals, or the revenue it would generate. The airline reiterated its green credentials, adding it would fully offset its carbon emissions. An equivalent 90-minute flight, from Hong Kong to Kaohsiung, emits 0.06 tonnes of carbon dioxide, according to Cathay, but it is unclear if that calculation is based on a narrowbody or larger twin-aisle jet, or whether the plane is full or not.<br/>

Iberia said Wednesday it would offer its clients discounted Covid-19 tests before their flights, as a growing number of nations require incoming passengers to show a negative result to enter. Under an agreement signed with health services firm Quironprevencion, Iberia passengers will be able to take a polymerase chain reaction (PCR) virus test at one of its clinics for 20% less than the "market price", it said in a statement. A standard PCR test, which provides results within 48 to 72 hours, costs between 130 euros ($150) and 240 euros in Spain, according to Spanish consumer association OCU. Iberia said this will "facilitate the procedure for all those travelling to destinations requiring passengers to present a PCR test certificate carried out a few hours or days before the date of arrival." <br/>

An airline’s ability to invest in new aircraft and other measures aimed at mitigating the industry’s environmental impact will become a “differentiating factor” in the future, according to Finnair CE Topi Manner. Noting that the issue of sustainability will “come back swinging” in the post-pandemic world, Manner told FlightGlobal during an 8 October interview that meeting the challenge depends on “balance sheet strength” and “how strong you come out from the crisis”. “The investment capability for new aircraft, synthetic fuels, hydrogen, you name it… will be a differentiating factor,” Manner states of the future industry landscape, having noted that Finnair has developed a “financial bazooka” of measures to survive the coronavirus crisis. Pre-pandemic, sustainability became one of the biggest challenges facing the airline industry – particularly in Europe, where some government airline bailouts in recent months have included environmental stipulations. Finnair’s own ambitious targets around sustainability – “we want to go carbon-neutral by 2045 and… by the end of 2025 we want to reduce our carbon footprint by 50%” – mean that the carrier is still eyeing a narrowbody order in the coming years. “We are sticking to these goals amidst the pandemic… that also means that since new, more fuel-efficient aircraft are probably the biggest lever in our roadmap towards those goals, then we are keeping it on the agenda,” Manner states. In the “short run” an order is “not on the cards”, he adds, because the airline currently has too much capacity. “But then, looking medium term, three to four years, something like that, then the narrowbody order is definitely still on the agenda.” <br/>

Finnair will start selling business class airplane food in supermarkets in a move to keep its catering staff employed and to offer a taste of the airline experience to those missing flying in the COVID-19 times. The state-controlled airline said that in a pilot scheme the handmade meals, called “Taste of Finnair," would initially be offered at one store as of Thursday. The ready-made dishes include options like reindeer meatballs, Arctic char and Japanese-style teriyaki beef and are suited for Nordic and Asian palates and would cost about E10 to E13, Finnair Kitchen said. Finnair is one of the main airlines flying between Europe and Asia, and several Asian chefs and cooks work at its catering unit. The move comes as airlines around the world try to employ their idled resources during the pandemic and tap into people's desire to fly when most planes are grounded. Some are offering simulated flights, fake trips where the aircraft takes off and lands in the same location, or even just time to sit in the plane. Kimmo Sivonen, store manager at the K-Citymarket Tammisto which will sell the Finnair meals, told the newspaper Ilta-Sanomat that the dishes have been modified to have less salt and spices than those offered in the air, where people's sense of taste is dulled by high altitude. “I think everyone has a bit of wanderlust these days and we can now satisfy that need a bit," K-Citymarket's Sivonen said.<br/>