Billionaire Larry Ellison lost more than US$67m in his now-defunct Island Air and could be liable for US$30m more in backpay penalties, unpaid debts, and potential punitive damages, reports Hawaii News Now. Ellison was testifying last week in a jury trial in the Hawaii District Court in the 2019 case filed by bankruptcy trustee Elizabeth Kane representing creditors, and two unions representing Island Air’s employees, the Airline Pilots Association (ALPA), and the Hawaii Teamsters. The complainants charge that Island Air’s owners acted in self interest when they allowed Island Air to go bankrupt and closed down the carrier without giving its 400 employees the required 60-day notice, and withholding final pay cheques and medical aid premiums. Transcripts of court proceedings are currently withheld, but according to Hawaii News Now and Honululu Civil Beat, Oracle co-founder Ellison testified he had bought Island Air in 2013 to provide a high-quality service to his resorts on the island of Lanai. Ellison sold two-thirds of Island Air to Jack Tsui of Panda Travel in February 2016. By 2017, the airline was losing money. As reported, Island Air suspended all operations on November 11, 2017, after lessor Elix Aviation Capital decided to act against the carrier over outstanding lease payments on three DHC-8-Q400s. Ellison testified that Island Air was losing more than a million dollars a month competing with the much bigger Hawaiian Airlines, with insurance companies and lessors demanding payments. Amongst others, the airline faced multiple payroll crises during the summer of 2017. In July of that year, it had processed payroll with an US$840,000 overdraft. Ellison claimed the competitor "did everything they could to run us out of business”, including undercutting its fares.<br/>
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Several weeks into operating flights to the East Coast of the USA, BermudAir no longer plans to configure its cabins exclusively with business-class seats. The Bermuda-based regional airline disclosed on 10 October it is now targeting dual-class cabins with a mix of “aisle class” and economy seating for its pair of Embraer 175s. “The strategic shift in service enables the airline to honour its commitment to Bermuda, while also responding to evolving market dynamics and preliminary guest feedback from its phased launch,” the carrier says. ”The dual-class cabin will also allow guests to choose a travel experience that aligns with their individual needs and preferences.” The carrier had previously planned to retrofit both its 88-seat E-Jets with 30 single-suite ”pods” by the beginning of November. As an interim strategy to give customers more space, BermudAir had been selling half of its available seats since launching on 1 September. ”After nearly 170 successful flights, it’s clear that there is strong demand for direct, short-haul and premium flights between Bermuda and the East Coast,” says CE Adam Scott. ”We’ve had overwhelmingly positive feedback from our guests… but guests also desire more options and flexibility. ”BermudAir is uniquely positioned to fill that need with our dual-class cabin,” he adds. Work to retrofit BermudAir’s cabins will be completed in the fourth quarter, but the precise seating configuration and total number of seats have yet to be finalised, the carrier tells FlightGlobal. Meanwhile, the start-up will continue flying from Bermuda to Boston, Fort Lauderdale, Florida and Westchester County outside of New York. Both premium and economy seats are now on sale. <br/>
US start-up Avelo Airlines recently raised pilot pay rates in an effort to attract qualified crew members and support fleet-expansion plans in 2024. Avelo currently employs 170 pilots to operate 16 Boeing 737NGs, and plans to continue hiring captains and first officers to support the addition of “at least five” mid-life 737s next year, the company disclosed on 10 October. The California-headquartered carrier claims its hourly pilot pay rates now exceed those of “all regional carriers and most ultra-low-cost carriers” (ULCCs) in the USA. “The pay increase we are announcing today, combined with the other exceptional benefits and quality of life Avelo offers, will continue to make Avelo a very attractive destination for pilots,” says CE Andrew Levy.<br/>First-year captains with Avelo now make an hourly wage of $240, with rates topping out at $298 hourly after 12 years flying for the company. Hourly rates for first officers are $131 initially and max out at $201. Avelo did not disclose its pilot pay rates prior to the recent bump – the fifth wage hike the ULCC has given its flight deck crews since launching in April 2021, the company says. The carrier’s pitch to pilots emphasises quality-of-life factors, with COO Greg Baden claiming that crew members “get home every day on time”. Also in 2024, the discount carrier expects to open a new pilot and flight attendant training centre at its operational base in Orlando, Florida. North American airlines have been struggling to hire and retain flight deck crews amid a widespread shortage of qualified pilots, which is affecting regional carriers most severely. <br/>
Spanish airline Air Europa has suffered a cyberattack on its online payment system that let some of its customers' credit card details exposed, the company said on Tuesday. The airline emailed customers whose credit card details were affected and notified the relevant financial institutions, it added. It did not specify the number of customers affected, nor did it estimate the financial impact of the cyberattack. The company said no other information had been exposed. "There is no evidence that the breach was ultimately used to commit fraud," the airline said. An email received by an Air Europa customer and seen by Reuters on Tuesday advised that the card used to pay on the Air Europa website should be cancelled and replaced "to prevent possible fraudulent use of your information" following the incident. Spanish consumer association OCU recommended that users who receive the email follow Air Europa's advice and called on the country's data protection watchdog to investigate when the cyberattack occurred as unauthorised use of the exposed cards could pre-date the company's alert. In 2021, the airline was fined for its mishandling of another breach that affected 489,000 customers in 2018, the OCU said in a statement. Air Europa reported that incident 41 days after it happened, whereas companies are required to do so within 72 hours. Madrid-based Air Europa is in the process of being taken over by British Airways-owner International Consolidated Airlines Group.<br/>
Existing Boeing widebody operator TAAG Angola Airlines is renewing its fleet with an order for four 787s from the US manufacturer. The African carrier already has five 777-300ERs and and three 777-200ERs in its fleet. TAAG CE Eduardo Fairen says: “The 787 option suits our intent for modern, size-wise and efficient equipment, able to progressively replace our current widebody fleet, and provide our customers with an improved flight experience.” No engine selection for the aircraft, nor timeline for deliveries, have been disclosed. Dreamliners are powered by either GE Aerospace GEnx or Rolls-Royce Trent 1000 engines. Cirium fleets data shows four of TAAG’s 777s-300s are in active service, while the older 777-200s and the oldest -300 are in storage. The Angolan carrier, which also operates 737-700s, has been updating its narrowbody fleet with Airbus A220-300s – including a follow-on commitment for three more of the type via lessor Azorra disclosed at this summer’s Paris air show. Cirium fleets data shows TAAG has 15 A220s currently in service alongside three 737-700s and five De Havilland Canada Dash 8-400s. <br/>
Emirates is to purchase a pair of Airbus A380s owned by a Guernsey-based investment vehicle. Emirates is acquiring the two jets – MSN77 and MSN90 – which it leases from the vehicle, Doric Nimrod Air Two. The entity purchased the aircraft respectively in October and December 2011. Emirates agreed to lease the A380s – both fitted with Engine Alliance GP7200 powerplants – for a 12-year period. The leases will each expire before the end of this year, and Doric Nimrod Air Two says it will sell the aircraft to Dubai-based Emirates for $35m each. Emirates took delivery of 123 A380s and still has 120 in operation, according to Airbus’s latest figures. Doric Nimrod Air Two is aiming to distribute capital to shareholders early in 2024, once the transaction is complete. It still owns five other A380s whose lease periods expire over the course of October-November next year.<br/>
Pakistan will appoint an adviser to draft a plan to privatise its money-losing national airline, the caretaker government's Privatisation Minister Fawad Hasan Fawad said on Tuesday. The outgoing coalition government said in August that PIA will be privatised together with the outsourcing of operations at three major airports. The privatisation of PIA, a state-owned enterprise, comes after Pakistan agreed to devise a policy on such loss-making entities as part of fiscal discipline plans with the International Monetary Fund. Pakistan secured a US$3b IMF bailout in June to avert a sovereign debt default. "We will appoint a single transaction adviser," the minister told reporters in Islamabad, adding that the appointment will probably be finalised on Wednesday as the country's ailing US$350b economy could not afford further delays. The financial adviser's report will enable the government to take a final decision, he said. "We're trying our best to keep the PIA flying," Fawad said, adding it was nevertheless a very difficult job. "No financial institution in the country has got any appetite to loan any more money to the PIA." He said the airline was recording yearly losses of about 156b Pakistani rupee (US$556.96m), adding that 15 aircraft, including six on lease, out of a fleet of 34 were grounded due to financial constraints. The airline had accumulated over 713b rupee (US$2.55b) in losses as of June 2023, the minister said. "We're not in a position to bear it anymore," he said. Pakistan hopes to resume PIA flights to Britain in the next three months after services were suspended following a fake pilot scandal in 2020. PIA flights to Europe and the UK have been suspended since then after the European Union's Aviation Safety Agency revoked the national carrier's authorisation to fly to the bloc following the pilot licence scandal.<br/>
When he learned that Pakistan International Airlines is facing a cash crunch, Edmontonian Shakil Meenai's first instinct was to check the status of his domestic flight from Lahore to Karachi. Meenai, 60, has plans to travel to Pakistan, his home country, in mid-October, a trip he makes once a year. He decided to book with Pakistan's national carrier for his short trip between the two Pakistani cities. Without him being notified, Meenai's flight from Lahore to Karachi was cancelled and rebooked to a flight seven hours later. "This was done without my consent and without any sort of intimation to me," Meenai told CBC in an interview. "Other airlines, if the flight schedule changes by 10 or 15 minutes, even in those cases they give you a heads-up." Last month, Pakistan International Airlines (PIA) began scaling back its operations as unpaid bills racked up and lessors moved to block the carrier from flying their aircraft unless it can catch up on overdue payments. The Pakistani government rejected the airline's request for an emergency bailout of about $100m. Instead, it directed the state-owned carrier to secure commercial bank loans, according to ch-aviation, a Swiss airline intelligence agency. This time of year is peak travel season for Canadians wanting to visit family and friends in Pakistan. Weather is generally favourable and it's also prime wedding season. But travellers say they're flocking to other airlines because they no longer see PIA as a reliable option. PIA does not fly out of Edmonton International Airport. The airline does offer direct flights to several Pakistani cities from Toronto's Pearson International. Meenai said cancellations, delays, high ticket prices and poor customer service are making people turn to other airlines. "The only people who fly internationally with PIA, especially from Canada, are those who are basically either not comfortable in transiting through other countries or our seniors," Meenai said.<br/>
Nepal Airlines Corporation, trading as Nepal Airlines, is asking NPR220m Nepalese rupees (US$1.65m) for five Chinese-manufactured aircraft that have sat unused at Kathmandu's Tribhuvan International Airport since mid-2020. According to The Kathmandu Post, an independent assessor, US-based Aviation Asset Management Inc., arrived at the scrap value price after being commissioned to appraise the planes earlier this year. The recommendation to sell the two 56-passenger MA-60s and three Y12s for scrap follows several failed campaigns by NAC to offload them. The recommendation, which cost the state-owned NAC USD20,000 to commission, has reportedly left the airline and government in a quandary. The airline is keen to dispose of the aircraft but reluctant to do so at such a low price, given the Chinese government, via the EXIM Bank of China, provided a NPR3.72b (US$27.9m) soft loan plus a NPR2.94b (US$22.1m) grant to buy the planes. Nepal's Ministry of Finance took out the loan in November 2012. It came with a seven-year holiday on interest and principal repayments. However, the holiday is now over. In addition to principal repayments, the ministry is now paying interest of 1.5% p.a. on the outstanding amount plus an annual service and management fee comprising 0.4% of the outstanding amount. In turn, the ministry is charging NAC interest of 1.75% on the outstanding amount. But neither the airline nor the ministry are believed to have made any interest or principal repayments, and the EXIM Bank has begun compounding interest. In addition, NAC is racking up parking fees at the airport.<br/>
Bain Capital has pushed back plans for a Virgin Australia Airlines initial public offering to as soon as 2024, according to people familiar with the matter. The US buyout firm is no longer considering a listing for the carrier in 2023 and will monitor market conditions next year to determine the potential timing, said the people, who asked not to be identified as the discussions are confidential. Bain will look to end-of-year holiday travel to bolster Virgin’s earnings before a possible IPO, one of the people said. Bain earlier this year appointed Goldman Sachs Group Inc., UBS Group AG and Barrenjoey Capital Partners Pty Ltd. as lead managers and was targeting a listing in November, Bloomberg News has reported. Details of the potential listing could change and there’s no guarantee it will happen next year, the people said. A spokesperson for Bain declined to comment, while a representative for Virgin referred requests for comment to Bain. Virgin’s IPO was set to be one of Australia’s largest this year, and a rapid return to public markets less than three years after the airline collapsed under a mountain of debt. Bain bought Virgin in a A$3.5b ($2.2b) rescue deal that wiped out much of unsecured creditors’ claims.<br/>
Virgin Australia has reported its first annual profit in 11 years on the back of record leisure travel demand, and as business transformation efforts continue to bear fruit. Net profit after tax stood at A$129m ($82.7m) for the year ended 30 June, with revenue more than doubling year on year to more than A$5b. Meanwhile, underlying EBIT for the year was A$439m. Virgin Australia points to “record travel demand for leisure”, coupled with the return of small- and medium-sized enterprise customers for the improvement in earnings. “Efficiency initiatives delivered a significant increase in profitability in spite of higher fuel prices. Virgin Australia continues to see healthy demand as customers prioritise travel in the face of cost-of-living pressure,” the airline adds. Virgin Australia filed for voluntary administration in early 2020 at the onset of the coronavirus pandemic, in a bid to recapitalise its operations. It had been in a shaky financial state, having been in the red in each of the previous seven financial years. It emerged from administration in November 2020 under new owners Bain Capital, relaunching as a mid-market operator, eliminating all widebodies from its fleet and operating just Boeing 737s on domestic and short-haul flights. Airline chief Jayne Hrdlicka hails the “important milestone” for the airline, noting that the financial results “signal that the transformation of Virgin Australia is progressing well”. “By creating a systemically lower cost base and a conservative balance sheet as well as investing heavily in technology and our frontline, we are well positioned for the future,” Hrdlicka adds. Airline finance chief Race Strauss says that Virgin Australia is “in a very strong capital position” after more than two years of business transformation. <br/>