The new chief financial officer of American Airlines Group Inc. has a message for skeptical voices in the credit community as the company seeks to secure a ratings upgrade: The $15b debt-cutting plan is on track. After spending around $24b to upgrade its fleet in the run-up to the pandemic, following a bankruptcy and the merger with US Airways, the nation’s most-leveraged carrier is halfway through its biggest ever debt-reduction program. Two months into the job, CFO Devon May is upbeat about the carrier’s ability to generate sufficient revenue through 2025 to raise its credit standing from B- to BB, in what would be the strongest rating since the merger about a decade ago. High costs for labor and jet fuel — not to mention the threat of a severe recession — may yet throw a wrench into the plan. But with the US economy still firing on all cylinders, profits are returning to the business, helped by diminished capacity across the airline industry and higher fares. “What you’re going to see from us over the next decade or so is just a more balanced approach to capital,” May said in an interview with Bloomberg News. The company is signaling a new era of budgetary restraint is a priority, against the backdrop of higher interest rates, a $12b capital-expenditure program through 2027 and big debt payments on the horizon in 2025. By the end of the year, American is aiming to bring a key leverage metric — net debt to earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs — to the lowest since 2017. It also plans to pay down $2b to $3b in debt using free cash flow this year, according to May, 47. “We’ll obviously have some just baseline level of growth that’s going to require some amount of capital expenditures, but you probably aren’t going to see the fluctuations like you saw pre-pandemic,” May said.<br/>
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Finnair is gearing up for a pivotal summer season as it turns to the Middle East and the United States to make up for a fall in traffic on Asian routes, the airline's CEO told Reuters. Finnair has traditionally relied on Asian routes, benefiting from shorter flying times over Siberia, but the airline was shut out of Russian airspace after Moscow's invasion of Ukraine, having already experienced a slump in passenger numbers due to pandemic lockdowns. Asian routes currently account for around 30% of Finnair's ticket revenue, down from 50%, Topi Manner said. While Chinese airlines now have an unfair advantage in being able to cross Russian airspace, he said there is enough pent-up demand after China's reopening to also bolster Finnair's bookings. "We are getting ready to increase flights to China during the summer, especially from the start of the third quarter," Manner told Reuters, adding that Beijing and Shanghai would be the major routes. "We are focusing on these two mega cities because we don't think it is possible to make secondary Chinese cities profitable...with the uneven playing field," he said. To offset the drop in Asian traffic, Finnair is adding routes to U.S. destinations such as Seattle and Los Angeles and cities in the Middle East via Doha, while expanding its short-haul European network. "We see very strong demand for European short-haul traffic and when we for example look at leisure traffic to Mediterranean countries, we are already at pre-pandemic levels or even a bit above," Manner said.<br/>
Qantas has announced plans to create 8500 new jobs over the next decade to grow Australia’s biggest carrier now it’s back to reporting billion-dollar profits after COVID-19. The group made the commitment amid announcing plans to open an engineering academy in 2025 to train up to 300 engineers each year. Qantas said the academy would not only provide engineers for the airline but the broader aviation industry, including defence contractors, and said a particular focus would be to encourage more women to join the field. Qantas came under fire for axing 9800 roles from its 30,000-strong workforce during the COVID-19 pandemic as part of a $1 billion restructure. The Friday announcement prompted critics to accuse the carrier of using the hiring spree to re-correct the impact of its 2020 restructure. Qantas is currently appealing a Federal Court verdict that the airline’s decision in 2020 to outsource 1700 ground handling positions was unlawful. Qantas CE Alan Joyce said the carrier expects to create more than 2000 new jobs over the next 18 months and committed to incentivising new hires with cash bonuses and 25% airfare discounts. “During COVID we lost a lot of people who left the industry and that’s why we’re having to do this big recruitment this year and next year. They just didn’t know when the industry will come back, and I fully respect that we lost particularly a lot of cabin crew who went on to other jobs, and that’s what we’re improving at the moment on bandwidth.” Joyce dismissed fears the carrier will struggle to fill the roles and said 25,000 people applied for 2,500 vacancies at Qantas last year. He also doubled down on last week’s defence of the current cost of air travel and reassured customers prices will continue to fall as capacity and competition returns. The new roles to be created over the next decade will include 4500 new cabin crew positions, 1600 pilot roles, 800 engineers, and a further 1600 in other operational positions. Qantas employs about 23,500 people. The new recruits and replaced roles will bring the carrier up to a total headcount of 32,000 by 2033.<br/>