unaligned

Three listed units of China’s indebted HNA Group announced plans to recoup at least 112b yuan ($17b) of misused funds, undisclosed debt guarantees and questionable investments by its major shareholders and their affiliates. Hainan Airlines Holding Co. will ask its parent to repay part of its debt while two other group firms are paring the stake held by their controlling shareholders. The carrier will transfer interest-bearing debts of at least 72.5b yuan to HNA and HNA Aviation Group, holding them responsible for the wrongdoings, according to a Feb. 9 exchange filing. The plan has been endorsed by the majority of its creditors, the filing said. The clawback plan comes nearly two weeks after the three companies disclosed misappropriation of funds by some of its shareholders and related entities, deepening the woes of the once high-flying Chinese conglomerate whose global acquisition spree left it with a crushing debt load. The revelations have raised concerns that the corporate governance lapses may scare away any possible suitors.<br/>

Southwest Airlines Chief Executive Gary Kelly and the leaders of the airline’s unions urged President Joe Biden not to mandate COVID-19 testing before domestic flights, warning it would put “jobs at risk.” The letter dated Tuesday and released by the airline on Wednesday said “such a mandate would be counterproductive, costly, and have serious unintended consequences.” The CDC last month said the Biden administration was “actively looking” at expanding mandatory COVID-19 testing to travelers on US domestic flights. <br/>

A malfunctioning automatic throttle may have caused the pilots of a Sriwijaya Air jet to lose control, resulting in the Boeing 737-500’s crash into the Java Sea last month, Indonesian investigators said Wednesday. National Transportation Safety Committee investigators said they are still struggling to understand why the jet nosedived into the water minutes after taking off from Jakarta on January 9, killing all 62 people on board. The investigators issued a preliminary report that provided new details of the pilots’ struggle to fly the plane from almost as soon as it became airborne. The lead investigator, Nurcahyo Utomo, said the left engine’s throttle lever moved backward on its own while autopilot was engaged, reducing the power output of that engine before the jet plunged into the sea. He said pilots of previous flights had reported problems with the automatic throttle system on the 26-year-old jet. The pilots’ last conversation with air traffic control was about 4 minutes after take-off, when the crew responded an instruction to go up to 13,000 feet. The plane’s flight data recorder showed the plane reached an altitude of 10,900 feet and then began declining, Utomo said. While on autopilot, power to the left engine was reduced while the right engine’s power remained steady. The pilot fought to bring the plane up, but it rolled onto its left side, Utomo said. A minute later the data recorder showed that the automatic throttle had been disengaged as the plane pitched down. The flight data recorder stopped recording a few seconds later. Story has more.<br/>

The parent company of Mesa Airlines reported an operating profit of $27m during its Q1 2021 as it plans to continue to allow its mainline customers to defer payments to aid their recovery during the ongoing coronavirus pandemic. The Phoenix-based regional carrier’s operating profit was roughly flat compared with the $27m it generated during Q1 2020, which on Mesa’s earnings calendar ends 31 December. Mesa and other regional carriers have been somewhat insulated during the coronavirus pandemic because mainline customers American Airlines and United pay a fixed amount each month to operate regional flights on their behalf. Since the start of the pandemic travel downturn, Mesa has allowed these payments to be deferred and counted as revenue at the end of their contract terms. During Q1 Mesa deferred $5m in revenue from United and American. It forecasts that $33m in total revenue will be deferred for both fiscal 2020 and 2021.<br/>

Air Arabia has managed to achieve a second profitable quarter for 2020, enabling it to contain its full-year net loss to Dhs192m ($52m). It turned in a Q4 surplus of Dhs20m, despite a 53% reduction in revenues, having also been profitable in the first. While the Q4 figure is heavily down on the previous Dhs199m profit, Air Arabia attributes the performance to “early measures” to control overall costs while maintaining business continuity. Chairman Sheikh Abdullah bin Mohamed Al-Thani says the result is “testament to the robust business model”. He says the Sharjah-based airlines is “confident” about the “fundamentals” of the air transport sector and its role in economic recovery.<br/>

Virgin Atlantic has written off the normally busy Easter travel season and now expects a recovery in passenger numbers to begin in May-June, CE Shai Weiss has indicated. Noting that he has been forced to repeatedly push back his expectations for a recovery in travel demand, Weiss now foresees “very little travel in the coming months” with a “a summer resumption [now] more realistic”. He added that Virgin Atlantic’s passenger numbers would not return to 2019’s levels until 2023/24, despite expectations of pent-up demand. Even when traffic does return, “the mix will be different”, says Weiss, predicting an “inherent reduction in business travel”, although some corporate travel will still be necessary given the limitations of video conferencing, something he believes the pandemic has underlined. Leisure travel is likely to have greater resilience over the long term, given the public’s “tremendous pent-up demand” to return to the skies.<br/>

International travel is likely to remain subdued until the end of the year as countries reintroduce tough restrictions to control COVID-19 infections, the head of Dubai-based airline Emirates said on Wednesday. The comments from Tim Clark represent a more pessimistic view after he said last month he did not believe the recovery would be further impeded by a new wave of infections and restrictions. “It is going to take longer than I would have hoped and I think probably we are going to see some difficulties. We are not going to see capacity return that I hoped in July and August, I think, maybe (it will return) in the last quarter this year,” Clark said. Britain this week announced passengers arriving from certain countries would have to enter mandatory hotel quarantine for 10 days, a similar system to Australia. Clark, who has delayed his retirement to tackle the coronavirus crisis, said countries like Britain had taken “fairly draconian positions” with regards to international travel.<br/>

Emirates Airlines President Tim Clark said on Wednesday Boeing’s 777x jet was unlikely to be delivered before the first quarter of 2024. Boeing has been developing the widebody jet, a new version of its 777 series, with the goal of releasing it in late 2023, already three years later than planned. “The 777x was due to come in June of last year, Now it’s unlikely to be, I think, before the first quarter of 2024,” Clark said. A Boeing spokeswoman said the planemaker still anticipated 777x deliveries to start in late 2023. The 777X will be the first major jet to be certified since software flaws in two Boeing 737 MAX planes caused fatal crashes and prompted accusations of cozy relations between the company and the US FAA.<br/>

Britain must set out how it will ease coronavirus travel restrictions, easyJet’s CE said Wednesday, a day after the government tightened already strict travel rules in a further blow for airlines. Johan Lundgren, easyJet CEO, said there was strong demand for leisure travel but the success of what could be a make-or-break summer for Europe’s airlines depends on the effectiveness of vaccines against new variants of the coronavirus. “Most important now is that the government comes out with a plan on how they’re going to unwind these restrictions,” Lungren said. “I’m positive for a strong summer if the vaccination programmes are successful, if it works on the variants... then we know that there’s a big urgent need for the government to unwind these restrictions,” he said.<br/>

Indian low-cost carrier IndiGo’s parent Interglobe Aviation has agreed to pay Rs21m ($288,000) to India’s securities regulator to settle a case involving compliance violations alleged by a co-founder of the airline. Interglobe is making the settlement “without admitting or denying the findings of fact and conclusions of law”, according to a 9 February settlement order signed by G. Ramar, an adjudicating officer at the Securities and Exchange Board of India. The case relates to allegations raised by Indigo co-founder Rakesh Gangwal of violations relating to corporate governance norms, related party transactions, and timely disclosure of “important information” to the company’s board. In addition, Gangwal alleges misrepresentation in the company’s red herring prospectus dated 16 October 2015. Indigo launched an IPO in October 2015, raising Rs12.7b. Finally, Interglobe was accused of “failure… in making timely disclosure of material information which was likely to have a significant market reaction”, which would be in violation of SEBI’s listing obligations and disclosure requirements.<br/>