The blocked acquisition of Spirit Airlines by JetBlue Airways could have some bearing on another potential blockbuster deal in the US market: Alaska Airlines’ bid for Hawaiian Airlines. Following the 16 January shock judicial decision denying New York-based JetBlue its wish to acquire ultra-low-cost carrier (ULCC) Spirit, that airline’s shares fell as much as 60% before recovering to $7.92, or 47% lower, by the close of trading. But while the US government has been cracking down on airline consolidation, not all acquisitions are built the same, analysts say. “We still believe there are important differences that drive a higher probability for the Alaska-Hawaiian merger to prevail,” says Savanthi Syth, aviation analyst at Raymond James. “Importantly, the proposal does not suggest the removal of seats and it doesn’t eliminate a price-disrupter model,” says Syth, adding that Alaska and Hawaiian are “hybrid” carriers with business models mixing features of low-cost and full-cost carriers. By comparison, JetBlue is a low-cost airline and Spirit is an ultra-low-cost player. JetBlue had planned, following the acquisition, to remove seats on Spirit’s aircraft to make those jets more like JetBlue’s. Syth says Alaska and Hawaiian have little network overlap. But, she adds, “There could be concentration concerns in the Hawaii-continental US market. Of note, the failing company doctrine had little sway on Judge Young in his review of the JetBlue-Spirit case.” Last week, TD Cowen’s Helane Becker wrote that, “if the DOJ keeps an open mind, [the Alaska-Hawaiian] merger should be approved”. Alaska Airlines, meantime, says the JetBlue-Spirit decision “does not impact our plans to combine with Hawaiian Airlines”.<br/>
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British Airways owner IAG expects EU antitrust regulators to open a full-scale investigation into its plan to buy Spain's Air Europa and will offer remedies to address their concerns, IAG's CE said on Tuesday. The deal is part of a wave of consolidation in the airline sector, with Germany's Lufthansa, seeking to buy a minority stake in Italy's state-owned ITA Airways, and Korean Air looking to buy Asiana. EU regulators have recently taken a tougher line when deciding whether to approve deals, and now sometimes want acquiring airlines to divest assets and not just give up some routes or airport slots to address competition concerns. "We have informed the (European Commission) case team that we will formally present remedies in Phase 2 to allow them to fully assess the viability and relevance of our proposals," IAG's Luis Gallego said. Phase 2 refers to the full-scale investigation that the Commission is set to launch at the end of its preliminary review on Jan. 24. "In the meantime, we continue to test interest from a range of remedy takers to ensure they meet the Commission's requirements," Gallego said. IAG, which also owns Iberia, in February last year said it had agreed to pay E400m to Spain's Globalia for the 80% of Air Europa it did not already own.<br/>
SriLankan Airlines Ltd. missed a third coupon payment on its dollar bond due later this year, according to a filing on Tuesday. The company said a further event of default would occur because it doesn’t intend to pay the coupon due on Dec. 25, having already missed payments in December 2022 and June 2023. The airline’s board intends to communicate further with the holders of these notes, it said. The bond with semi-annual payments matures on June 25 this year, according to Bloomberg-compiled data. The airline recently extended the deadline to seek investor interest for its sale. Selection of pre-qualified bidders is now set for mid-February instead of end-January, according to a notice posted on the Finance Ministry website earlier this month. It didn’t give a reason for the postponement. Sri Lanka has been looking to sell its national airline at least since mid 2022, with President Ranil Wickremesinghe then saying the country’s poorest people who’ve never flown shouldn’t be saddled with its losses. The carrier serviced 126 destinations in more than 60 countries prior to the pandemic.<br/>