El Al has entered discussions with fellow Israeli carrier Arkia over a possible business combination, the flag-carrier has disclosed. Under the proposed transaction El Al would acquire Arkia shares in exchange for handing its own securities to Arkia shareholders. El Al has not confirmed the size of the transaction or the extent of the shareholdings being discussed. “No memorandum of understanding or binding agreement has been signed between the parties,” the carrier stresses, adding that the negotiations have only just started. “There is no certainty that the potential transaction will be concluded and a binding agreement signed.” It also points out that, even if the tie-up is agreed, it would still need to clear regulatory hurdles. El Al had previously attempted to merge with Israeli operator Israir, through a combination with El Al’s Sun D’Or division. But although the drawn-out discussions eventually resulted in an agreement, the plan was blocked by the Israeli competition authorities in 2018. Israir was sold by its parent company to an investment firm at the beginning of this year, during a bidding process in which a merger with Arkia was mooted. While El Al is exclusively a Boeing operator, Arkia uses a small fleet of Airbus A321neos and Embraer 195s. Both airlines have been struggling under the impact of the pandemic.<br/>
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Air Madagascar has been placed under a court-appointed restructuring process, the Indian Ocean island nation’s government has disclosed. The flag carrier is now under a collective liabilities settlement procedure, or procedure collective d’apurement des passifs after incurring an “operating deficit/cumulative loss” of around $80m, says the transport ministry. A statement from the Malagasy presidential office highlights ATR leasing costs at “double” the normal price and “uncontrolled” management costs, which it links to Air Madagascar’s partnership with Air Austral. It adds that Air Madagascar’s fixed charges have also continued to rise and that employee numbers “far exceed what the company really needs”. An in-depth audit of all the debts incurred by the airline will now be undertaken by the accounts commissioner. In addition, all agreements or contracts entered into by Air Madagascar must be terminated. The stated objective of the restructuring process, the ministry says, is to ensure “reliability, regularity and punctuality”, while also implementing a digitisation of management procedures and ticketing operations. The airline tells Cirium that because legal proceedings are still ongoing, it is not possible to give any information about the restructuring process and its modalities at this point. An official and detailed communication will be made as soon as possible, it adds.<br/>
A new airline with ties to Beijing is trying to muscle into Hong Kong, a patch long dominated by stalwart Cathay Pacific Airways. Founded by property magnate Bill Wong, Greater Bay Airlines has ambitions to fly to 104 destinations in mainland China and North, South and Southeast Asia, including Bangkok and Phuket. Scheduled flights haven’t begun yet, with the carrier only receiving its air operator’s certificate at the beginning of the month and an air-transport license still to be procured. Starting an airline at the tail end of a pandemic that’s decimated travel worldwide may sound unwise. But 62-year-old Wong, dubbed the Li Ka-shing of Shenzhen for his expansive business empire across the border, isn’t a total novice. He already owns one carrier, Shenzhen-headquartered Donghai Airlines, which services a raft of Chinese cities as well as a few regional routes. Greater Bay Airlines’ entry into Hong Kong is also coming at a low point for Cathay, the iconic Asian carrier controlled by conglomerate Swire Pacific, whose parent is UK-based private family group John Swire & Sons. Even before Covid, its business had been impacted by its association with the 2019 pro-democracy protests in the former British colony, forcing a change in management at the airline. Now, as Hong Kong hews to a Covid Zero strategy, Cathay can only watch on as carriers in neighboring places such as Singapore and Indonesia prepare to ramp up international routes. With no domestic market and mainland China’s borders still closed even to Hong Kong, Cathay’s passenger traffic languishes at about 5% of pre-pandemic levels.<br/>