Local creditors of Latam Airlines Group are up in arms over a bankruptcy plan that would leave them with next to nothing even as holders of overseas bonds get almost all their money back. BancoEstado SA, a Santiago-based bank acting on behalf of local noteholders, has asked Latin America’s largest airline to improve its terms. The investors are threatening to sue if their demands aren’t meant, and contend that as a Chilean company, Latam should have filed for protection in local courts -- instead of New York -- that would have treated domestic creditors better. It’s easy to see why they’re mad. Local bonds have plunged since the airline’s latest plan to exit bankruptcy was filed in November, with inflation-linked notes due in 2029 trading at 10 cents, according to extrapolated prices calculated by data provider LVA Indices. Overseas bonds, meanwhile, have been among the country’s best performers. Securities due in 2024 have surged to 96 cents on the dollar, from as low as 20 cents in the weeks after the bankruptcy filing in May 2020. Overseas creditors will probably get about 100 cents on the dollar for their bonds after the restructuring is over, compared with just 20 cents for holders of the domestic bonds, according to estimates from AlixPartners cited in minutes from a local creditors meeting in December.<br/>
oneworld
UK competition regulators have dropped their probe into the IAG-Air Europa merger, after the two sides terminated the tie-up in the form originally envisioned. IAG had proposed to acquire the whole of Spanish carrier Air Europa’s share capital from parent Globalia, an agreement which was subsequently amended a number of times last year. The UK Competition and Markets Authority had opened an inquiry in mid-November 2021, inviting comments on whether the merger would reduce competition in the UK sector. But within a month IAG and Globalia opted to abandon the original agreement and its subsequent revisions in full, and this has prompted the UK authority to halt its investigation. “Accordingly, on the basis of the information available to it, the [Competition and Markets Authority] does not believe that it is, or may be, the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation,” it states. While the authority would have had to decide whether to submit the deal to a more in-depth investigation by 19 January, it states that, as a result of the situation, it “does not…have a duty” to refer the merger under UK enterprise legislation.<br/>
Cathay Pacific said Thursday that transfer and transit services at Hong Kong International Airport will be banned to passengers coming from places deemed at high risk of coronavirus from midnight on Jan. 16 until Feb. 15. High-risk places including the United States, the United Kingdom, Australia, Canada, France, Germany and Japan. Passengers on flights arriving from cities in the Chinese mainland and Taiwan may continue to connect to onward flights, the airline said in a statement on its website, saying the measure is in response to the rising number of Omicron cases around the world. <br/>
Indonesia’s Ministry of State-Owned Enterprises (SOEs) has launched a probe into alleged corruption involving aircraft procurement and leases at Garuda Indonesia. The probe will also involve Indonesia’s attorney general, says the ministry. “Garuda is currently in the restructuring stage, but what we also know is that the data are valid, indeed in the process of procuring its aircraft, the leasing has indications of corruption, with different brands,” says SOE Minister Erick Thohir. Thohir also singled out a specific aircraft type, the ATR 72-600. “We are focused on transforming Garuda to be more accountable, professional and transparent,” he says. “It’s not the time to accuse, we act based on evidence.” Cirium fleets data indicates that Garuda has six ATRs in service, with seven examples in storage. All 13 are managed by Nordic Aviation Capital. Garuda has been associated with graft in the past. In 2020, former CE Emirsyah Satar was jailed for eight years for taking kickbacks related to the acquisition of Airbus aircraft and Rolls-Royce engines.<br/>
Qantas has pared about a third of planned domestic and international capacity in the March quarter to better match travel demand after a rise in COVID-19 infections, it said on Thursday. The airline, which ends its financial year in June, said it would provide more details on the impact of the changes when it issues half-year results in late February. Qantas has not made material capacity adjustments for Q4, it added. The Australian carrier is the latest airline globally to make major March quarter capacity cuts as the highly infectious Omicron variant of the coronavirus spreads globally, dampening travel demand and leading to rising sick calls among staff. Qantas said it would run 70% of its pre-COVID-19 domestic capacity in the third quarter, down from a prior forecast of 102%, at a time when Australia is reporting record numbers of COVID-19 cases due to a runaway Omicron outbreak. International capacity will fall to 20% of pre-COVID-19 levels from 30% due to tighter travel restrictions in countries including Japan, Indonesia and Thailand, Qantas added.<br/>