Spirit Airlines urged shareholders to reject a hostile bid by JetBlue Airlines Thursday, saying it was "a cynical attempt to disrupt" its merger with Frontier. JetBlue says its $30 a share offer is superior to the value of Frontier's cash-and-stock deal and regulatory concerns are not a reason to reject its bid. Shareholders are set to vote on Frontier's offer, which currently values Spirit at about $20.33 per share. Spirit questioned JetBlue's disclosure Monday that acquiring Spirit has been a "strategic" objective for many years, adding that antitrust issues would mean a deal could not be completed. JetBlue, which in early April offered $33 per share, argues a deal will help it better compete with the "Big Four" US airlines that control nearly 80% of the passenger market. The sixth largest US passenger carrier, JetBlue would operate Spirit under the JetBlue brand, but promised a $200 million reverse break-up fee, or $1.80 per Spirit share, if the deal did not go through for antitrust reasons. "During the extensive discussions held between Spirit and JetBlue, JetBlue itself admitted that a lawsuit from DOJ seeking to block the merger was a 100% certainty; therefore, JetBlue would have to prevail or settle (which would be contrary to DOJ's avowed enforcement approach) in order to consummate its proposed acquisition of Spirit," Spirit said. JetBlue responded Thursday to Spirit saying "both deals are subject to regulatory review, and both deals have a similar risk profile.... Frontier offers less value, more risk, and no regulatory commitments, despite a similar regulatory profile." JetBlue reiterated its argument the "Spirit Board, driven by serious conflicts of interest, continues to ignore the best interests of its shareholders by distorting the facts to distract from their flawed process and protect their inferior deal with Frontier."<br/>
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German leisure airline Condor may return to profitability from next year and aims to boost its fleet capacity as people rush to book long-awaited holidays after the lifting of COVID-19 restrictions. The carrier’s announcement adds to the positive news coming from the travel sector, including strong sales at holiday Group TUI, Germany’s flag carrier Lufthansa and airport operator Fraport. “I expect Condor to grow - if I have my way, quite significantly,” said CE Ralf Teckentrup, who plans to retire at the end of 2023. Condor’s fleet shrank to 53 aircraft from 61 in 2019 amid restructuring following the bankruptcy of its former parent company Thomas Cook, but Teckentrup is aiming to return to 60 planes in the medium term, which he said would be “a fine number”. “At the moment, financial stability is our top priority. Once that is done, we can also grow,” he said. While the company will not reach profitability in the current fiscal year ending Sept. 30 due to difficulties last winter, it may stop making losses in 2022-2023, Teckentrup added. “I’m firmly convinced we can be very profitable there - assuming there will be a decent winter like before corona followed by a decent summer like before corona,” he said. Competition from Lufthansa’s new budget long-haul flight subsidiary Eurowings Discover and the resulting price war will cost the smaller rival E30-40m in operating profit each year, Teckentrup said. He added that Condor plans to look for new long-haul destinations and pay more attention to mass markets such as New York or San Francisco, where Lufthansa has higher costs.<br/>
Low-cost airline easyJet said the operational problems plaguing the airline industry would not derail a strong summer, but cautioned that the financial pressures facing consumers might threaten demand later in the year. The London-listed airline said on Thursday that it expected to fly 90% of its pre-pandemic schedule between April and June, rising to 97% for the following three months. Bookings have risen to 6% above 2019 levels in the past 10 weeks, thanks to a surge in demand for leisure and domestic flying as travel restrictions have eased. EasyJet’s aims are slightly more cautious than rival Ryanair, which this week outlined plans to fly 115 per cent of its 2019 flight schedules in the summer. The rapid recovery has come as parts of the aviation industry have struggled to cope with the sudden influx of passengers. EasyJet was forced to cancel scores of flights this spring because of staff shortages exacerbated by a wave of Covid-related absences. The airline went as far as stripping out some seats from its planes to allow it to fly with fewer crew under flight safety regulations, but CE Johan Lundgren said the problems had not hit bookings and that people were still keen to travel. “Bookings are not affected and are particularly strong, it shows the pent up demand is there,” he said. Despite the optimism, the company joined Ryanair in declining to give guidance for the rest of its financial year, which ends in September, pointing to “the continued level of short-term uncertainty” driven by customers booking later than was normal before the pandemic. Lundgren said he expected the cost of living crisis to “certainly have some effect”.<br/>
Go First, India’s No. 2 airline, is planning to raise 36b rupees ($464m) through an initial public offering in July as air travel recovers from the pandemic, according to a person familiar with the matter. Go First’s share sale comes as air travel is rebounding in the South Asian nation driven by pent-up demand as people emerge from one of the world’s worst coronavirus outbreaks. India, the world’s fastest-growing major aviation market before the pandemic, expects local traffic to exceed pre-pandemic levels of 415,000 daily fliers within a year. Indian airlines are also adding capacity to capture a revival as international flights resume. The IPO will be crucial for debt-laden Go First, which is losing money and is planning to rely on proceeds from the share sale to repay debt and dues to creditors including Indian Oil Corp. Go First, previously known as GoAir, had obligations of about 81.6 billion rupees as of April last year, according to its draft preliminary prospectus. Go First, which ranks second after Indigo, expects to lose the No. 2 spot when Tata Sons merges its airlines -- Vistara, Air India and AirAsia India, the person said. Go First is expecting to turn profitable this quarter, boosted by a surge in demand for leisure travel, the person said. To capture the travel rebound, Go First will begin adding 10 new Airbus SE A320neo aircraft starting August, bringing its total fleet count to 62 by March 2023, the person said. The airline has 144 A320neo jets on order. Go First will use the new aircraft to increase flight frequency on routes to Abu Dhabi and Kuwait, and to add more destinations in Southeast Asia such as Vietnam, Indonesia and Cambodia.<br/>
Hong Kong Airlines has asked pilots to take several months leave on sharply reduced pay as Covid-19 lockdowns in China snarl supply chains, weakening demand for air freight—the carrier’s key source of income during the pandemic. The financially troubled carrier is calling for volunteers to take leave starting in June through until the end of the year, according to a memo, which cited the “unpredictable” local and global pandemic situation. At the same time, Hong Kong Airlines is seeking to bring back a handful of narrowbody A320 planes and staff to cater to “some” demand for passenger flights, the memo said. The memo was sent by the airline’s human resources team to senior management and all A330 pilots on Tuesday. Pilots were asked to state by Friday if they were willing to take time off. They will be paid just 1.6 months of basic salary and fixed allowances for the seven months, which won’t be paid until January 2023. Pilots were asked to think about the “sustainability of our business” as well as “maintaining the employment of most of our colleagues,” in what will be the carrier’s fourth cost-cutting drive during the pandemic. Hong Kong Airlines employs 200 pilots, half of whom currently fly the A330, according to a person familiar with the matter. The carrier has been operating three A330 aircraft in the Asia-Pacific region, mostly as cargo flights, and is planning to bring back three A320s for passenger services, the person said. A freight service to Sydney, which was operating daily, has been cut to as little as twice a week because cargo is stuck in Shanghai—which is only gradually emerging from a six-week lockdown that disrupted manufacturing and logistics—and amid a general decline in exports to Australia from China via Hong Kong.<br/>
Bangkok-based long-haul, low-cost carrier Thai AirAsia X has filed for business rehabilitation, though it stresses its daily operations will not be affected by the process. The airline on 19 May says the objective of business rehabilitation “is to revamp the company’s administration process and restructure its debts, delivering greater efficiency and a solid platform for robust future growth after weathering the Covid-19 pandemic”. It adds that its application was approved by the Thai Central Bankruptcy Court on 18 May. It did not state when it expects the process to wrap up. The move comes as the carrier begins to restart its international network, after being grounded for nearly two years of the pandemic, when borders were mostly shut. Thai AirAsia X notes that the rehabilitation process will not impact its decision to resume flights to South Korea and Japan, which were due to commence from June. The airline adds it has “further plans for expansion” in the near- to medium-term. Airline chief Patima Jeerapaet says: “Thai AirAsia X has entered into rehabilitation at an appropriate time with tourism recovering and the nation reopening. We assure that this process will have no impact on our services of passengers or flight plans during this process.” <br/>