Just over two months after launching operations, US start-up carrier Avelo Airlines is pulling back service to several of its launch cities, and raising prices. The low-cost airline, headquartered in Houston, on 7 July published its schedule through mid-January, and conspicuously absent were three destinations to which it started flights in April and May: Bozeman (Montana), Mesa (Arizona) and Grand Junction (Colorado). Avelo’s home base is Hollywood Burbank airport, in the Los Angeles metropolitan area, and its aircraft typically run out-and-back trips on all of its routes, returning to Burbank every evening. Test flight bookings on the company’s website to Mesa, Grand Junction and Bozeman showed no direct flights to those destinations beyond mid-September. ”These schedule changes include two markets where current customer demand is insufficient for us to justify continuing to fly beyond the summer,” Avelo says. ”We will re-evaluate returning to both markets for the summer of 2022.” The flights to Grand Junction will cease on 16 August and to Bozeman on 15 September, Avelo says, but it did not comment on the cessation of flights to Mesa.<br/>
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Hong Kong Airlines has defaulted for the third time on consecutive semi-annual instalments of interest payments on a US$683m perpetual bond issued in 2017 through Blue Skyview Company, a vehicle belonging to the airline. The three deferrals on the notes mean that the accumulative interest due has now reached around US$149m, local media reported on July 7 citing a disclosure to investors. As a result of the failure to settle, the rate of the interest in July 2020 was raised to 12.125%, and missing the payments in January and July 2021 means that the rate will increase to 15.76%. Hong Kong Airlines reportedly first warned investors that it would default on the payments last July. That implied at the time that it would have to bear a higher interest rate, 12.125% instead of 7.125%. With Blue Skyview’s new announcement to investors that the interest originally scheduled to be paid on July 26 will be deferred again, the total owed, based on the same 15.76% calculation, is about US$149m.<br/>
Malaysia’s low-cost airline AirAsia Group is considering a listing of its digital arm via a special-purpose acquisition company (SPAC) in the United States to raise at least $300m, its chief said on Wednesday. Group CE Tony Fernandes said that a few SPACs focused on technology have approached the group, and AirAsia has engaged auditors for a deal to list the unit, which comprises a travel and lifestyle services platform, logistics and fintech businesses. “We have now recruited our auditors to start preparing for an American listing so that’s very much on the table,” he said, adding that Rothschild is working on the listing that could happen in five months. The group is also in discussions with other suitors, including Malaysian and Indonesian private equity, Fernandes added.<br/>
AirAsia Group said it will buy Indonesian ride-hailing and payments firm Gojek’s Thailand business in a stock swap, giving Gojek a 4.76% stake in the airline’s lifestyle platform. AirAsia will acquire Gojek’s business in return for $50m worth of shares in AirAsia SuperApp, valuing the division at around $1b, more than the pandemic-hit airline’s current market value of $868m at a time when it has been looking to raise more capital. The agreement with the Indonesian startup unicorn comes just a week after AirAsia applied for a digital banking licence in Malaysia, signalling a shift in focus towards digital business as most of its fleet remains grounded amid coronavirus restrictions. “By taking on Gojek’s well-established Thai business, we’ll be able to turbo-charge our ambitions in this space,” AirAsia CE Tony Fernandes said.<br/>
The process of listing Thai AirAsia on the local stock exchange will take about three to four more months, AirAsia Group CEO Tony Fernandes told reporters on Wednesday. “That’s being run by Bangkok Bank and is progressing quite nicely,” he said when asked about listing plans of its Thai unit. “Take about three, four more months.” <br/>