Activist investor Elliott Management on Monday said it wanted to bring in new leadership at Southwest Airlines, reconstitute the board and overhaul the carrier’s strategy and operations. Elliott sent a letter to Southwest’s board of directors saying CE Bob Jordan had delivered “unacceptable financial and operational performance quarter after quarter”, while costs have increased and revenues have lagged behind other airlines. The fund said the airline’s board had reinforced an “insular culture” and that only one of Southwest’s eight most senior executives had experience at another airline. Elliott has taken a $1.9b position in Southwest. The airline, which has an $18bn market capitalisation, now counts the fund as one of its largest investors with an 11% ownership stake. Southwest’s share price closed at $27.25 on Friday, below its pre-pandemic level in March 2020 before Covid-19 devastated global aviation. The stock jumped 7% on Monday to $29.70. “We believe Southwest’s stock can achieve $49 per share within 12 months,” Elliott said in the letter. Southwest said in a statement that it was first contacted by Elliott on Sunday, and looked forward “to better understanding their views on our company”. “The Southwest board of directors is confident in our CEO and management’s ability to execute against the company’s strategic plan to drive long-term value,” the airline said. Savanthi Syth, analyst at Raymond James, said Southwest’s brand, fleet and balance sheet with net cash of more than $11bn make it “unique among US airlines”, and an unsurprising activist target. While the airline is no longer distinguished by its policy of not charging change fees or cancellation fees, it could improve in other ways, such as adding red-eye flights or assigned seating, she added. “There aren’t structural changes that cannot be overcome with sufficient ‘shots on goal’ to drive margin recovery,” Syth said.<br/>
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WestJet is discontinuing several flights out of the Hamilton International Airport. The airline declined an interview, but spokesperson Madison Kruger told CBC Hamilton the airline will suspend and remove flights to Halifax, N.S., and St. John's, N.L., as of July 1. Kruger said winding down flights to the East Coast came down to "performance" and plans to provide eastern Canada "non-stop connectivity" to Calgary. WestJet also said it would reduce service to Orlando, Fla. It didn't say why. But the airline will still offer Hamiltonians year-round service to its global hub in Calgary. "The decision to remove service is never taken lightly and we understand this is disappointing news for our guests and the community of Hamilton and sincerely apologize for the impact this may have," Kruger said.<br/>
Canadian carrier WestJet Airlines and Virgin Atlantic are pursuing an expanded codeshare partnership that will allow WestJet’s customers to access a host of cities via London Heathrow airport. WestJet disclosed on 10 June that, starting this winter travel season, it will sell itineraries – including those for Virgin-operated flights to London – to destinations throughout Virgin’s network. By summer 2025, WestJet will connect domestic air travellers to Virgin’s recently announced route between Toronto Pearson International airport and London. The carriers established their codeshare partnership in 2019. ”With daily flights from our global hub in Calgary to London, Canadians have never had better international access from across western Canada to the United Kingdom and beyond,” says John Weatherill, WestJet’s CCO. Through the codeshare, WestJet’s customers will be able to book single-itinerary flights from Calgary to London and points beyond – expanding WestJet’s partnership network to Africa, India and the Middle East for the first time. Destinations accessible through the planned expansion include New Delhi, Mumbai, Bengaluru, Johannesburg, Cape Town, Lagos, Dubai and the Maldives. ”WestJet’s expanded codeshare agreement with Virgin Atlantic will be the airline’s first-ever agreement enabling connectivity beyond Europe through London Heathrow, a significant milestone in growing WestJet’s global network to even more destinations through partnerships,” the carrier says. <br/>
As Virgin Atlantic Airways Ltd. celebrates its 40th anniversary, founder Richard Branson plans to more closely integrate the airline with his cruise ships and hotel businesses to offer travelers a one-stop shop. Branson said he would look to make the brands work more seamlessly, with people traveling on Virgin Voyages cruises getting airline loyalty points, while adding more hotels in the destinations the carrier flies to. “It’s something which we should have done fifty years ago,” the 73-year-old Branson said in an interview at the company’s hotel in Las Vegas on Monday. “We had all these different Virgin companies, it is pulling the Virgin companies together under one umbrella.” The upstart airline that took on British Airways back in the 1980s is now entering its fifth decade of service. Some of its innovations — from seat back entertainment screens to premium economy cabins — have been adopted widely, and in some cases more effectively, by rivals. Instead of attempting to compete with deep-pocketed Middle East carriers on hardware, Virgin plans to focus on its service and allowing customers to more seamlessly book across business units. Virgin brought its holidays brand into the airline business during the pandemic, and has rebadged it as Virgin Atlantic Holidays. The airline follows others such as British Airways in seeking to extract more money out of its holidays and loyalty business, with BA signaling at its latest earnings that it would combine the two units as both grow rapidly. <br/>
Boeing is closing in on its second-largest order for the 737 Max jet this year from El Al Israel Airlines after a near-catastrophic accident on the model in January put the planemaker into crisis mode. The airline will conduct exclusive negotiations with Boeing and aircraft lessors for about 30 Boeing 737 Max aircraft, the carrier said in a statement Monday. The narrow-body jet order, including replacement engines and spare parts, will cost between $2b to $2.5b. The single aisle planes will gradually replace El Al’s existing 737-800 and 737-900 jets, according to the statement. The carrier, which operates an all-Boeing narrow-body and wide-body fleet, had been considering a proposal from European planemaker Airbus SE. This would be Boeing’s second-largest deal for the jet in 2024, behind an American Airlines Group Inc. order for 85 of the narrow-body aircraft in March. The US planemaker has come under fire from regulators, lawmakers and airlines following the January accident in which a fuselage panel blew off a 737 Max mid-flight.<br/>
Russian media are widely reporting that Aeroflot is restructuring its fleet-modernisation agreement with United Aircraft in favour of additional Yakovlev MC-21s. Aeroflot Group signed for 339 aircraft nearly two years ago, comprising 210 MC-21s and 89 of the domestically-revamped SJ-100, plus 40 Tupolev Tu-214s. But CE Sergei Aleksandrovsky is cited as having told broadcaster Rossiya 24 that the operator was negotiating a “complete transfer of the entire fleet” to MC-21s – suggesting the other two types would be dropped. Speaking to the channel during the St Petersburg International Economic Forum, Aleksandrovsky indicated that the rethink is due to delivery schedules “moving to the right”. Several civil aircraft programmes are facing delays and the Russian government recently revised downwards its expectations on production by the end of the decade. This revision listed the initial deliveries of MC-21s taking place in 2025 and those of SJ-100s in 2026. Tu-214 production would also begin ramping-up over this two-year period. Aleksandrovsky reportedly said that Aeroflot would take the MC-21 in two variants, including a shrunk version which, while previously planned, has yet to be developed.<br/>
The biggest shareholder in India's IndiGo airline will sell a 2% stake, worth 32.93b rupees ($394m), in the low-cost carrier's parent on Tuesday, according to a term sheet seen by Reuters. Interglobe Enterprises, which has a 37.75% stake in Interglobe Aviation, the operator of IndiGo, will sell the shares at a base price of 4,266 rupees each, the term sheet showed. That is a 6.6% discount to the stock's closing price on Monday. The stock dropped 3.3% to 4,418 rupees in early trade on Tuesday. Interglobe -- whose managing director is Rahul Bhatia, the co-founder of IndiGo -- will sell the stake in block deals. Around 1.1m Interglobe shares changed hands via block trades on Tuesday, per National Stock Exchange data, all at a discount to the last closing price, but above the base price.<br/>
India’s aviation sector remains robust but external pressures pose the biggest risks for growth, according to the CEO of Vistara Airlines. Aviation demand in India is “still progressive” and headed in a positive direction, Vinod Kannan said. However, factors such as fuel costs as well as the strong U.S. dollar could impact growth, he added. “The airlines within India have always been extremely sensitive to external pressures. Fuel costs, for example, and the U.S. dollar compared to the Indian rupee because depreciation always has an impact on our bottom line,” he told CNBC’s Sri Jegarajah. Fluctuations in oil prices is also something that needs to be watched closely, he added. Brent crude prices have risen 6.46% in the last 12 months, while U.S. crude prices are up 7.64% in the same period, according to FactSet data. India is witnessing an aviation boom, with the world’s most populous country set to be the fourth-largest global travel spenders by 2030, largely due to a growing middle-income population that will see a substantial rise in household earnings. The domestic air passenger traffic in India in the financial year ended March 2024 is estimated to stand at $154m — up about 13% year-on-year, according to credit rating agency ICRA. “Outlook on the Indian aviation industry is stable, amid the continued recovery in domestic and international air passenger traffic, and relatively stable cost environment and expectations of the trend continuing in fiscal year 2024-25,” it said.<br/>
Bonza appears almost certain to be wound up after the administrators determining the troubled airline’s future terminated its staff. Guardian Australia understands administrators from the firm Hall Chadwick told staff during a meeting on Tuesday they had been sacked. Employees subsequently voiced their frustrations at how the administration process had been conducted, sources say. The budget airline’s 323 employees had been stood down since 30 April when the airline appointed administrators after its fleet of six Boeing 737 Max-8 aircraft was abruptly repossessed. It later became clear that Bonza’s local business leaders had been blindsided by a breakdown in the relationship between 777 Partners – the airline’s private equity sole owners – and that firm’s financier, the US insurance giant Advantage Capital Holdings, known as A-Cap, which led to a change in the ownership structure of the leased aircraft last month. Early on in the administration process, the administrators had been confident of finding a buyer for the airline, but those hopes faded in recent weeks. Interested buyers had been given until last Friday to put in offers for Bonza. Guardian Australia understands none were received by the deadline. A spokesperson for the administrators told Guardian Australia a statement would be released on Tuesday afternoon detailing the future of the airline – after staff had been notified.<br/>