Even after shares in the Brazilian airline Azul SA leaped 34% year to date, many investors are still underestimating the company’s earnings potential as domestic demand rebounds and ticket prices increase, according to analysts at Itau BBA and Raymond James. Azul posted its best first half of a year since its initial public offering in 2018 amid lower fuel prices, a pickup in demand for its regional routes and a recent debt restructuring plan. The company was founded by David Neeleman, who has started several commercial airlines, including JetBlue Airways in the US. “Investors still don’t fully realize that Azul has become a different company in the last six months,” said Itau BBA analyst Gabriel Rezende. “The asymmetry of risk and return is much more favorable.” Within the sector, Azul stands out based on its ability to offer routes to smaller markets where it has little to no competition. At the same time, a debt restructuring finalized in the last month prompted Moody’s Investors Service Inc. to raise its credit grade one notch to Caa1, while revising its outlook to positive from negative. “Azul’s debt restructuring will lead the stock to return to radars of investors that, back in 2018 and 2019, stopped following because the perception of risk had grown substantially,” Rezende said. “We have now returned to a more normalized scenario.” What’s more, regional competitor Gol Linhas Aereas Inteligentes has been in free fall after it sold almost 2b of warrants in early August, triggering a downgrade from Citi.<br/>
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Flybe’s largest creditor DLP Holdings – a Luxembourg company linked to the airline’s owners – is unlikely to receive the entirety of the near GBP50m it is owed, according to the administrators of the defunct UK regional carrier. Detailing the progress of their administration on 17 August, David Pike and Mike Pink from Interpath Advisory, said DLP Holdings will “suffer a shortfall in their indebtedness”. However, that figure is not quantified. DLP Holdings, which had in April 2021 acquired assets, including the brand, from previous incarnation of Flybe after that business failed in March 2020, had lent the new airline a total of GBP49m through separate agreements. A term loan facility saw it advance GBP20m, while separate deals saw a further GBP29m loaned out, both secured against Flybe’s assets. However, the GBP20m loan was subject to a so-called “subordinated clause agreement” between Flybe, DLP Holdings and the UK Civil Aviation Authority, designed to ensure that other creditors are paid first. DLP Holdings is wholly owned by funds managed by Cyrus Capital Partners, a company behind Flybe’s previous iteration. The airline’s preferential creditors – its 279 employees and the UK’s tax authorities – should be paid the entirety of their respective GBP243,000 and GBP218,000 claims, the report says. However, the picture for Flybe’s 28,000 unsecured creditors is less rosy: although the administrators forecast a “small” dividend will be paid, they note the amount is dependent on the total value of claims and the costs related to agreeing and distributing the funds. Claims from unsecured creditors were put at GBP20.9m in the directors’ statement of affairs, issued in March. Any dividend will also be drawn from the “prescribed part” only – a ring-fenced total capped at GBP800,000 before costs.<br/>
A plane carrying Israelis home from the Indian Ocean island nation of Seychelles made an emergency landing in Saudi Arabia before flying back to Tel Aviv on Tuesday, in what Israel praised as a sign of goodwill as Washington works to establish formal relations between the two countries. The Air Seychelles flight carrying 128 passengers was forced to land Monday because of an electrical malfunction. Israel’s Foreign Ministry said the passengers spent the night at an airport hotel in Jeddah and were flown back by the airline on an alternate plane. Passengers described a frightening stretch of time as an acrid burnt smell filled the cabin and the pilot came over the intercom to say the plane would be forced to make an emergency stop in Saudi Arabia, a kingdom with which Israel has no air links or diplomatic ties. With dozens trapped on board and the plane idling on the tarmac, tension grew, passengers said, while Israeli officials scrambled to figure out what to do. Soon Saudi security forces escorted the Israelis to a hotel.“It was very scary,” passenger Mayama Stahl recalled as she streamed out of Israel’s Ben Gurion International Airport later Tuesday with the dozens of others, some seemingly surprised by the swarm of reporters, photographers and party balloons that greeted them. “But we were all welcomed very well (by the Saudis). ... We were very excited to see that we were OK and safe.” The passengers told The Associated Press their experience in Jeddah was pleasant, with some Saudis even greeting them in Hebrew. Tracking data from FlightRadar24.com showed the Air Seychelles Airbus A320, flight No. HM22, diverted to Jeddah on Monday night while it was over the Red Sea. The airline did not respond to a request for comment. Another Air Seychelles A320 flew to Jeddah on Tuesday from Dubai to pick up the travelers and carry them on to Tel Aviv. In 2022, Saudi Arabia lifted its ban on Israeli overflights during a visit by President Joe Biden to the kingdom. Israel and Saudi Arabia do not have official ties, although they have developed strong but informal connections over recent years over their shared concerns about Iran’s growing influence in the region. <br/>