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Air France-KLM and private equity firm Castlelake LP have increased their planned investment in the bankrupt Scandinavian flag-carrier SAS AB by $25m to $1.2b, SAS said Saturday. SAS on Oct. 3 had announced an investment of $1.175b from the investment group to help rescue the carrier, which filed for Chapter 11 bankruptcy protection in July amid headwinds from the Covid-19 pandemic, high fuel prices and a pilot strike. The deal promises to further the post-Covid consolidation of Europe’s aviation industry around Air France-KLM and two other major carrier groups, Deutsche Lufthansa AG and IAG SA. IAG is taking over Spain’s Air Europa, while Lufthansa has agreed to buy part of Italy’s state-owned ITA Airways, the successor to Alitalia. The final offer for SAS announced Saturday includes $725m in secured convertible debt, as well as Castlelake providing a $500m facility to help with refinancing, the carrier said in the statement. <br/>

Lufthansa reported the “highest revenue and profit ever achieved in one summer” as the German airline said that holiday travellers have kept spending on first-class tickets despite spiralling prices. The Frankfurt-based group on Thursday reported Q3 adjusted operating profits of E1.5b, up 31% from a year before, on an 8% increase in sales to E10.3b, pushing its shares up 7%. Carsten Spohr, the carrier’s CE, said that even with the “challenging” geopolitical situation, the company’s “booking outlook gives us reason to be positive — not only for a very good group result this year, but also beyond”. Demand for both long and short-haul flights had remained strong among leisure travellers well into October, Lufthansa said, adding that the trend towards more bookings in premium classes continued. “The very good summer demand has extended into October,” it added. European carriers — many of which were on the brink of collapse during the pandemic lockdowns — have benefited strongly from pent-up demand for travelling. IAG and Air France-KLM have also reported record sales over the summer. Leading airlines, including Lufthansa, this year rushed to invest in their first-class cabins and lounges as post-pandemic luxury travel demand jumped — a trend that has coincided with significantly higher ticket prices for flights across the board. The group confirmed its full-year guidance of adjusted operating profit of more than E2.6b. Despite buoyant travel demand, the rise in the price of oil and inflation as well as concerns over geopolitical uncertainty have weighed on airline shares over the past few months. Alexander Irving, analyst at Bernstein, questioned how long the booming demand for premium travel among holiday makers would last with inflation and high interest rates dampening consumer spending. “To my mind the question is not where we are now — possibly with still some pent-up demand — but where we are going,” he said. Is that going to continue once we’ve eaten through any remaining excess savings?” Lufthansa said that it had continued to squeeze costs, despite inflation, with unit costs, or costs per passenger per mile, down 0.9% compared to the same period last year, while bookings for Q4 were up by “double digits in percentage terms”.<br/>

Improved performance across all its carriers means Lufthansa expects all of its airline units to be profitable for the first time this year. Lufthansa Group disclosed all its passenger airlines boosted their adjusted EBIT profit in third quarter compared with the same period last year. It means Lufthansa, Swiss, Austrian, Brussels Airlines and Eurowings are all profitable over the first nine months of the year. While Lufthansa Cargo barely broke even in the third quarter, amid what the group calls a “normalisation” of the air freight market, it too is profitable at the nine-month stage and Lufthansa sees the logistics unit making a positive contribution in the fourth quarter. The airline also notes cargo yields remain above pre-pandemic levels. ”For the first time all our airlines will end the year profitably,” said Lufthansa Group CE Carsten Spohr during a Q3 results briefing on 2 November. While Lufthansa Cargo posted record profits in 2022, only Swiss and Austrian were in the black among its passenger airlines last year. And though in the years prior to the pandemic the group’s network carriers and Lufthansa Cargo were profitable, its leisure unit Eurowings had been loss-making. Notably, amid continued strong leisure demand, Spohr highlights the importance of the restructured Eurowings business and its recently rebranded Discover Airlines unit. ”From an economic perspective we can look back at the best summer in our history, showing we have set the right strategic course in the past – more than 10 years ago – when we decided to complement our leading market position in corporate travel by significantly strengthening our private travel business,” he says. ”And without that… successful realignment of Eurowings – which took us some years, but it has finally happened – and the recent establishment and expansion of Discover Airlines, with new destinations to popular markets around the world, I think we it’s fair to say the group’s summer would not have been as successful as we are able to present today.” While the airline is dealing with higher fuel costs, Lufthansa has retained its full-year guidance of a group adjusted EBIT of more than E2.6b. That compares with a E1.5b adjusted EBIT in 2022, driven largely by its cargo business.<br/>

Turkish Airlines is turning to the lessor market to ensure its growth plans remain on track amid delays in finalising its major fleet order and aircraft availability. The Istanbul-based carrier last month agreed to lease 25 Boeing 737 Max 8s and three Boeing 787-9s from lessor AerCap for delivery from next year through until 2026. It also in September ordered 10 more Airbus A350-900s from the manufacturer for delivery from 2025. Turkish Airlines has been working on an order for 400 narrowbodies and 200 widebodies as it looks to double its fleet to more than 800 aircraft over the next decade. It had initially hoped to finalise that deal this summer, but CFO Murat Seker previously said completion has been complicated by challenges securing delivery slots at Airbus and Boeing and current engine supply issues. Speaking during Turkish Airlines’ Q3 results call on 2 November, Seker said the order has been delayed for ”numerous reasons” and the challenges he had flagged previously are continuing. ”Neither of the OEMs are in a position to fill [our requirement] in the short-term, so we decided to make more aggressive use of the leasing market,” says Seker. He expects the airline to end this year with a fleet of around 440 aircraft – taking in 61 aircraft and withdrawing 15. It will add 40 more aircraft next year, 25 of which will be leased. “In 2025 we expect to add an additional 40-50 aircraft,” he says, noting again around 25 of those will be leased. ”We have the negotiations [still], but we have made progress on our short-term needs with the operating leases,” Seker adds. The airline is also working to mitigate ongoing issues with Pratt & Witney’s geared turbofan (GTF) engines, which prompted the manufacturer to recall 1,200 PW1100Gs for inspection. Turkish Airlines has 56 GTF-powered A320neos and Seker had previously said the airline expected to ground 10-12 aircraft by end of the year. ”Our current expectation is 14-15, as new deliveries come from Pratt & Whitney. So we are not far away from our expectations,” he says. ”This has an effect on 4Q capacity,” he says, but the airline remains in the range of its guidance in expecting full-year ASK capacity to be between 17-19% higher than in 2022. ”We might end up grounding up to 40 aircraft next year [because of the GTF issue],” Seker adds. ”We are trying to fill the gaps, so the net impact of the grounding will be quite limited.”<br/>

Korean Air's acquisition of Asiana Airlines got a step closer to getting antitrust approval from the European Commission, as the nation’s largest air carrier submitted a revised merger plan that includes a selloff of Asiana’s cargo operation and giving up more routes to European cities. Industry watchers, however, say uncertainty remains about the high-profile 1.8t won ($1.3b) deal that also awaits approval from Japan and the US. “The chances are now higher for Korean Air to win the commission's approval as the company has fulfilled the remedies that the commission has asked for,” said an industry source familiar with the matter. Earlier in May, the commission delayed its decision on the merger plan, citing antitrust concerns that the potential tie-up between the nation's top two air carriers could restrict competition in the markets for passenger and cargo air transport services. “Korean Air would have not pushed ahead with the sale of Asiana’s cargo business if not for the commission’s request,” the source said. “It would be difficult for the commission to turn down Korean Air’s new remedies, which included what the commission requested.” Immediately after Asiana's board of directors voted in favor of the selloff of the cargo business on Thursday, Korean Air submitted its new merger plan to the commission later in the day. The revision also included its plan to divest some of its flights to four European cities -- Frankfurt, Paris, Rome and Barcelona. Korean Air expects the commission's decision to be made by the end of January 2024. But Yoon Moon-gil, a business professor at Korea Aerospace University, stressed that the amendments do not guarantee the commission's approval. “(We) cannot say definitively if the commission will approve Korean Air’s acquisition of Asiana Airlines at the moment,” Yoon said. "The commission may even ask Korean Air to clarify which Korean air carrier is actually capable of taking over Asiana’s cargo business. The commission could ask for a letter of intent to make sure of the planned selloff."<br/>

Air India has entered an interline partnership with Alaska Airlines, which will allow Air India flyers to "avail seamless connections from New York JFK, Newark-New Jersey, Washington DC, Chicago, San Francisco, and Vancouver gateways to and from 32 destinations in the US, Mexico, and Canada on Alaska Airline's network", according to a press release. An interline arrangement refers to a pact to issue and accept tickets for flights that are operated by the partner airline. When selling an interline ticket, the operating airlines' own flight numbers are used. The release said the scope of the partnership includes bilateral interlining which allows both the airlines to sell tickets on each other's network. "The two airlines have also entered a Special Prorate Agreement, which allows Air India to file 'through fares' on routes covering Alaska Airlines' network," it added. This arrangement means that a passenger can have a single fare for a single ticket covering all destinations in an itinerary.<br/>

A man who attempted to open the emergency exit during the descent of a flight on Friday has been detained, local media reported. The incident occurred on Juneyao Airlines flight HO1338, traveling from Kansai International Airport near Osaka, Japan, to Shanghai Pudong International Airport. The suspect, surnamed Zhou, allegedly attempted to open the emergency exit during the descent process, as reported by the Shanghai-based media outlet Knews, citing sources from Pudong's airport police department. Quick response from onboard security guards and cabin crew prevented any disruption to the flight. The man has been detained and may face criminal charges. Although modern civil airplanes are pressurized during flights, pressure differences can occur during descent. Lawyer Hu Lei, who specializes in civil aviation-related laws, explained that the exit could potentially be opened if subjected to significant force during descent. Such an event would lead to discomfort for passengers and the possible deployment of emergency slides, jeopardizing the safety of the aircraft.<br/>

Royal favourite Emilia Wickstead has been announced as the new designer of Air New Zealand’s uniforms. The airline revealed the news Monday with the New Zealand-born, London-based designer flying in for the announcement in Auckland. The designer said designing a uniform for Air New Zealand had “always been a dream of mine”. ”It’s where I’m from, it’s where I was born and raised and it’s a real passion project for me.” Wickstead was chosen to lead the uniform refresh for pilots, flight attendants and ground crew, beating out more than 40 New Zealand designers in a competitive pitch project. Air New Zealand Chief Customer and Sales Officer Leanne Geraghty said the selection panel was ‘blown away’ by Wicksted’s concepts. “Emilia presented outstanding initial designs that were creative, unique, will set Air New Zealand apart on the global stage.” Geraghty said “She also demonstrated her understanding of the importance in creating a uniform that is both functional and comfortable for our people.”<br/>