JetBlue Airways reached a deal to buy Spirit Airlines on Thursday, a merger that could reshape the airline industry by putting pressure on the nation’s four dominant carriers. The deal, which values Spirit at $3.8b, would create the nation’s fifth-largest airline, with a share of more than 10% of the market, behind United, which has a nearly 14% share. Delta and Southwest control more than 17% each, while American Airlines has more than 18%. The merger is likely to face a thorough investigation from the Biden administration’s antitrust regulators, who have taken an aggressive stand against corporate consolidation, especially in industries already dominated by a few businesses. Given that reality, JetBlue’s top executive sought to cast the Spirit deal as a way to make his industry more competitive, rather than less. “Our argument is clear: The best thing we can do in the US to create a more competitive industry is to allow JetBlue to grow,” Robin Hayes, the company’s CE, said in an interview. The agreement is a victory for JetBlue, which spoiled a rival offer: Frontier Airlines and Spirit called off a merger deal on Wednesday after Spirit struggled to persuade its shareholders to back the offer, which fell short of JetBlue’s by about $1b. JetBlue and Spirit said they expected to seek approval for the deal from Spirit’s shareholders this fall and from regulators by early 2024. The airlines plan to close the transaction no later than the first half of 2024 and begin operating as a single carrier by the first half of 2025. But the merger could be hard to complete. Regulators have already sued JetBlue and American over a partnership at airports in Boston and New York. And on Wednesday, the Federal Trade Commission filed a lawsuit to block the social media giant Meta’s acquisition of a small virtual reality company, Within.<br/>
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JetBlue Airways finally won over Spirit Airlines with a $3.8b takeover deal. Now it needs to win over antitrust regulators. The New York-based airline snatched Spirit away Frontier Airlines with an all-cash offer that torpedoed the cash-and-stock deal the two discount airlines had forged earlier this year. Hours after Spirit and Frontier said they terminated their merger agreement, which lacked shareholder support, Spirit said it agreed to sell itself to JetBlue. JetBlue said it expects to win regulatory approval in the fourth quarter of next year or the first three months of 2024. The carriers expect the deal to close in the first half of 2024. If regulators sign off, it would mean the end Spirit, a brand that has become a punchline about the indignities of discount air travel, where passengers trade comforts like standard legroom, snacks and free cabin baggage for a cheap fare. Will regulators allow an ultra-low-cost airline to get absorbed during the hottest stretch of inflation in decades and remodeled into JetBlue’s image, which more closely resembles large carriers? The regulatory hurdle is high. President Joe Biden’s Justice Department has vowed to challenge out any deals that could harm competition. Last year, it sued to block JetBlue’ alliance with American Airlines in the Northeast. A trial is set to begin in late September. JetBlue is optimistic. The DOJ lawsuit alleges American could overpower JetBlue and says the alliance, which lets American and JetBlue coordinate routes in busy airports serving New York and Boston, amounts to “a de facto merger.” JetBlue CEO Robin Hayes said a combined Spirit and JetBlue, which would become the country’s fifth-largest airline, would create a strong competitor to the big four US carriers: American, Delta, United and Southwest. After more than a decade of consolidation, those carriers control roughly three-quarters of the US market.<br/>
Frontier Airlines CEO Barry Biffle issued a stern warning to travelers that use Spirit Airlines: Beware of soaring ticket prices should regulators approve the airline's merger with JetBlue. "If you are a Spirit customer, you will see the biggest inflation you have ever seen," Biffle told Yahoo Finance Live (video above). "You're going to see fares jump up over 40%. It's going to be hundreds of dollars per family. And so that's why I think it's a challenge for their consumers. There are going to be millions of people that get priced out." Said a Jetblue spokesperson to Yahoo Finance, "Customers will continue to benefit from JetBlue’s unique combination of low fares and award-winning service. Importantly, our presence on new routes is proven to bring down legacy fares more than ultra-low-cost carriers, benefitting customers and stimulating demand. So this is a win for customers – whether you fly JetBlue or another airline.” Spirit terminated Frontier's cash-and-stock deal to acquire the low-cost airline late Wednesday after failing to garner enough support from shareholders. On Thursday, JetBlue stepped in and said it would look to buy Spirit for a total equity value of $3.8 billion.<br/>
Avelo Airlines' summer of expansion continues. After opening a new crew base in Orlando last month, the airline announced a series of new routes this week, all of which, it says, are enabled by its growth in Orlando. "From the start, we have focused on bringing more choice, convenience and affordability in air travel to underserved communities. The addition of these four great markets to Avelo’s expanding network is the latest example of how we are making travel raiser for more people," Jim Olson, a spokesperson for Avelo said by email. "Our new Orlando base is making this expansion possible – but we are just getting started as we continue to execute our flight plan for growth in the weeks and months ahead." The new destinations mean Avelo will serve a total of 29 cities by the middle of November. Story has full details.<br/>
US carrier Southwest Thursday predicted that its Q3 revenue will exceed pre-pandemic levels on strong travel demand during the summer, but warned of capacity constraints for the rest of the year. The Texas-based airline expects operating revenue for the quarter through September to rise 8% to 12% compared to the same period in 2019, though capacity growth is expected to remain flat. As more people start to fly for holidays as well as for work, US airlines are enjoying their strongest travel season in recent years even though they are hamstrung by a labor shortage and higher fuel costs going into the second half of 2022. “We experienced inflationary pressures and headwinds from operating at suboptimal productivity levels in second quarter, which we expect will continue in second half 2022,” Southwest CE Bob Jordan said. Southwest, which has been protecting itself from volatile oil prices through hedging, reaffirmed its goal of being “solidly profitable” for the full year. The carrier, which has stepped up hiring, said it would slow the pace in the second half, in line with other US companies amid growing economic uncertainty. Southwest said 2022 capacity, or available seat miles, is expected to be down about 4% compared with 2019, as jet deliveries from Boeing Co are expected to be lower than the prior forecast. Boeing, which flagged “real constraints” in the supply chain on Wednesday, is expected to hand over 66 jets this year compared to a previous goal of 114, Southwest said. Southwest does not expect any deliveries of the 737 Max-7 this year, which is yet to be certified by US regulators.<br/>
Southwest passengers now have extra flexibility when their plans go awry. The airline announced Thursday that the credits it provides when travelers need to cancel their tickets will no longer expire, no matter what kind of ticket they purchased. " 'Flight credits don’t expire' aligns with the boldness of a philosophy to give our customers definitive simplicity and ease in travel, just like 'bags fly free,' just like 'no change fees,' just like 'points don’t expire – they're a first-in-our-industry combination of differentiators that only Southwest offers," Southwest CEO Bob Jordan said. Customers don't have to do anything to take advantage of the new policy, Ryan Green, Southwest's chief marketing officer said. "The only thing that they need to know is they don’t need to take any action. They don’t need to do anything. We are taking care of this for them in the background," he said.<br/>
SkyWest Airlines’ second-quarter revenue surged 22% year-on-year after it added almost four dozen aircraft to its fleet. The St George, Utah-based regional carrier generated $799m in revenue during the quarter ending 30 June, up from $657m in the same quarter of 2021. But SkyWest’s profit slipped to $54m in Q2, down from $62m one year earlier, due partly to higher employee and fuel expenses. SkyWest’s expenses for the quarter came in at $710m, up from $542m in the second quarter in 2021. SkyWest says revenue jumped partly because it acquired 43 aircraft in the last year. The revenue bump also reflects “Covid-19 revenue concessions given to our major airline partners” in the second quarter of last year. “The quarter results reflect the continued strong demand for our product and the impact of our improved fleet mix, as we continue investing in our E175 fleet,” says CE Chip Childs. He notes strong demand for SkyWest’s flights but cites “the constraints of an ongoing pilot imbalance and industrywide staffing challenges”. SkyWest flies regional routes for American Airlines, United Airlines, Delta Air Lines and Alaska Airlines. It has been expanding its Embraer 175 fleet and now operates 223 of the type, plus 44 Bombardier CJR900s, 114 CRJ700s and 140 CRJ200s, for a total 521 aircraft. SkyWest expects to receive two E175s for American Airlines in the third quarter. It placed 15 E175s into service with American in the first half of 2022 and expects to operate five more by year-end. SkyWest received two E175s for Delta in the second quarter and expects to receive 14 more later this year. For Alaska’s operation, SkyWest received six E175s in the second quarter. It expects to take one more E175 for Alaska in the first half of 2023.<br/>
SkyWest Airlines hopes to launch its SkyWest Charter subsidiary “shortly”, a move the airline says will enable it to serve secondary cities with on-demand charters. Some of those cities do not have, or are at risk of losing, air service. “We have been more than surprised about the outside interest of our charter operation,” SkyWest chief executive Chip Childs said on the company’s quarterly earnings call on 28 July. “There are a lot of parties that want this thing to work.” SkyWest applied to the US Department of Transportation (DOT) for commuter authority on 21 June. In its application, it requested to operate 30-seat Bombardier CRJ200s to 25 destinations under a charter subsidiary called SkyWest Charters. The proposal would also allow SkyWest to hire pilots with less aeronautical experience than required for commercial scheduled operations, taking pressure off the pilot shortage plaguing many US carriers but hitting regional airlines hardest. The commuter flights would operate under Federal Aviation Regulations Part 135 rules, which govern charter operations, as opposed to Part 121 rules, which govern scheduled commercial aviation operations. SkyWest chief commercial officer Wade Steele says the DOT and airline are “working through the application”. “Hopefully in the next couple of months we will get this all sorted out,” he adds. In its June application, SkyWest said it aimed to have the subsidiary running by October, with a five-month ramp-up during which three to four aircraft and four to five markets would be added monthly through April 2023.<br/>
Brazilian airline Gol Linhas Aereas Inteligentes Thursday reported a steep second-quarter net loss mainly due to foreign exchange variations, sending its shares down even as its net revenue more than tripled over the same period of 2021. The company also provided new forecasts for 2022 to reflect frequent jet fuel price increases and pass-through effects on fares, lowering its outlook for key metrics such as EBITDA margin and load factor but increasing its revenue forecast. Gol's quarterly net loss reached 2.85b reais ($544m) versus a profit of 658m a year earlier, but the company said the bottom line was heavily affected by currency swings. Shares were down 5.3% at 8.55 reais in morning trade, erasing part of a 10.9% jump the previous day and making them the biggest losers on Brazil's Bovespa stock index (.BVSP), which was virtually flat. Gol's operating net revenue jumped 215.3% to 3.24b reais, topping the 3.11b expected by analysts polled by Refinitiv. "The company recorded the highest yield in its history as well as the highest net operating revenue in a second quarter," the airline said in a securities filing. Gol also said it expected full-year net revenue to reach about 15.4b reais, up from a previous estimate of 13.7b, even as its load factor was seen reaching 80% in the period, versus 82% in a previous forecast. The carrier kept its outlook unchanged for capital expenditure, net financial expenses and net debt/EBITDA ratio in the year, but said EBITDA margin would reach about 8% - down from 10% seen earlier.<br/>
Long-haul carrier Norse Atlantic Airways said on Thursday it had entered into partnerships that will allow customers of low-cost airlines easyJet, Norwegian Air and Spirit to book transatlantic flights. Launched in 2021 and starting operations only last month by flying routes between Europe and the United States, Norse needs local partners on both sides of the Atlantic to secure enough passengers, analysts have said. The so-called virtual interliner agreements give Norse’s passengers access to the extensive networks of the three other carriers, with over 600 weekly connections across major European and U.S. hubs, the company said. “Norse Atlantic is in talks with other airline partners who will join the booking platform soon, we look forward to announcing further agreements in due course,” the company said. <br/>
Spain-based cabin crew at easyJet have suspended a planned strike at the weekend after reaching a deal with the budget airline that includes higher salaries, local union USO said on Thursday. The airline's flight attendants in Spain went on strike from July 1 to 3 and again from July 15 to 17. But they have cancelled a further three days of strike action planned for late July after the company offered better pay and benefits in ongoing negotiations. "After weeks of strike action and months of negotiations, the company has made us an economic proposal that, without being exactly what we were demanding, does represent an important approach to the salaries and conditions of our colleagues in Europe," Miguel Galan, general secretary of USO's easyJet section said. The basic salary for easyJet's Spanish staff, which excludes bonuses and extra pay, stands at 950 euros - far lower than in countries such as France and Germany, the union leader said. The airline welcomed the agreement. "This is great news for the airline, for our employees and also for customers, who can book with more confidence," it said in an email sent to Reuters. "We have always been committed to continuing to work constructively with the unions," the company added. Cabin staff at easyJet's larger rival Ryanair (RYA.I) have also called for strikes in Spain in July, and Spanish unions USO and SITCPLA have planned to continue calling for such action on a weekly basis until January seeking to obtain better economic benefits and more holidays. <br/>
Aeroflot is formally inviting interest in acquiring shares in the company, following the earlier approval of a hike in its authorised capital. The airline states that 5.42b ordinary shares are being placed under the capital increase, through an open subscription. Investors who held shares on 11 May had a pre-emptive right to purchase shares in proportion to their existing interests. The window of 12 working days to exercise such rights closed on 25 July. Aeroflot states that 1.53b pre-emptive shares have been placed as a result. This leaves 3.89b shares outstanding, and the airline has opened a formal invitation to acquire them. It gives the placement price of the shares as Rb34.29 ($0.57). Aeroflot Group has disclosed its operating performance for the second quarter, the first full quarter since the beginning of the Ukrainian conflict which resulted in heavy sanctions on Russian airlines. The figures shows the company’s international passenger traffic fell by 63% in the three months to 30 June. But this decline is relative to a period already affected by the pandemic. Aeroflot Group’s international traffic figure for the second quarter 2022 was 91% down on the pre-pandemic level of 2019. Although Aeroflot itself transported 18% fewer passengers in the second quarter, adjustments to its network meant domestic passenger traffic increased by 24% against last year, even as domestic passenger numbers fell.<br/>
The Emirates airline announced on Wednesday that it plans to expand its Tel Aviv schedule with a second daily flight. The flights – set to begin from 30 October 2022 – were added “to boost connectivity and increase travel options for customers flying between Dubai and Tel Aviv”, according to the airline. The news comes just over one month after Emirates touched down in Tel Aviv on 23 June on its first ever service into Israel. The flights were supposed to begin last December but were halted due to concerns over the Omicron coronavirus variant. “The additional morning frequency is in response to high demand for travel to/from Israel, and builds on the success of Emirates’ existing operation, as the airline reaffirms its commitment to growing its presence in the country,” Emirates said. The second daily flight between Dubai and Tel Aviv “will also provide another 20 tonnes of cargo belly-hold capacity for businesses, further opening global trade lanes through enhanced import and export opportunities,” according to the airline. The flight will be served by the Emirates Boeing 777-300ER in a three class configuration.<br/>
Iran is investigating a claim of a near-miss in its airspace between two Pakistan International Airlines (PIA) passenger jets due to human error by air traffic controllers, state media said. The report comes days after the airline said two of its planes flying at high altitude over Iran came within 1,000 feet (300 metres) of each other on Sunday. The flag carrier said Iranian air traffic controllers had cleared Peshawar-bound flight PK-268 to descend to 20,000 feet from 36,000, leading to the close call with flight PK-211 — both operated by PIA — which was at 35,000 feet and en route to Dubai. The Civil Aviation Organisation of the Islamic Republic of Iran said an investigation had been launched into the near-miss. “Appropriate measures have been taken to obtain documents of the country’s control centre, and we requested reports from the pilots of the planes for further investigation,” said CAO deputy head Hassan Khoshkhoo. “Normally, after receiving all the documents, the issue is reviewed… and the final result is announced,” he told state broadcaster IRIB. PIA spokesman Abdullah Hafeez Khan told AFP a cockpit “collision avoidance system helped the two pilots to correct the course and avoid a collision after the planes came close to each other”. Khoshkhoo said the planes had been equipped with a system that “gives the necessary warnings from a long distance,” adding that “such incidents have also happened in other countries”.<br/>
A SpiceJet airplane was forced to abort its takeoff on a Mumbai runway on Thursday because of a caution alert, but there was no safety problem, the Indian airline said. A SpiceJet Q400 aircraft scheduled to fly from India's financial hub Mumbai to Kandla in the western state of Gujarat aborted take off "owing to illumination of a caution alert," the airline said. The incident comes a day after India's aviation regulator ordered SpiceJet to slash its approved fleet by half this summer for eight weeks citing safety snags and said it would put the domestic airline under "enhanced surveillance". "The aircraft stopped well within the runway length available. Crew acted as per the SOP. There was no safety scare," the airline's statement said. A senior official at the Directorate General of Civil Aviation told Reuters it was "looking into the aborted flight incident", calling it routine. The official declined to be named due to sensitivity of the matter. The plane was "almost at full speed" on the runway when it was suddenly stopped and the pilot aborted the takeoff, announcing later it was a technical problem, Vishal Vikram, one of the passengers on board, told Reuters. The incident caused panic among some passengers, who "were in shock," he said.<br/>