JetBlue Airways Corp. has held talks with lenders for a potential $2.75b debt offering that would be backed by its loyalty program, making it the latest carrier to undertake such an deal. The company is working with banks including Barclays Plc and Goldman Sachs Group Inc. on the transaction, which would be a mix of bonds and leveraged loans to refinance debt, according to people with knowledge of the matter who asked not to be identified as the details are private. Conversations are preliminary and details of the financing may change, they added. Spokespeople for JetBlue, Barclays and Goldman declined to comment. The so-called premarketing process, during which banks try to get investors committed to a deal, follows JetBlue’s financial chief saying last week that its loyalty program could be a source of collateral if the airline pursued a debt deal. Ursula Hurley also said at the time that JetBlue is looking to address convertible maturities “as quickly as possible.” Those include a $750m note due in 2026. Using a loyalty program as collateral has been a popular tactic for airlines, which are capital intensive but have valuable assets like their mileage programs. When the pandemic sent airlines into a cash crunch, Delta Air Lines Inc. and United Airlines Holdings Inc. were among borrowers that pledged their loyalty programs as collateral.<br/>
unaligned
The UK watchdog has banned a Virgin Atlantic advertisement for making “misleading” claims about the environmental impact of sustainable aviation fuels, as it steps up its crackdown against airlines over “greenwashing”. The Advertising Standards Authority said the claims in the airline’s ad about the first transatlantic flight to be powered entirely by the aviation fuels made from sustainable sources had breached the regulator’s code. The aviation industry hailed the November flight, which was backed by the previous UK government and powered by a blend including waste cooking oil and other by-products, as a milestone in its push to decarbonise. Virgin Atlantic ran a radio ad celebrating its “unique flight mission . . . to become the world’s first commercial airline to fly transatlantic on 100 per cent sustainable aviation fuel”. But the ASA said the phrase “100 per cent sustainable aviation fuel” gave listeners “a misleading impression of the fuel’s environmental impact”, by implying that the fuel was both zero carbon emissions and had no negative environmental effects. The ruling marks the first time the regulator has banned an ad because of claims regarding sustainable aviation fuels (SAFs), in a blow to an aviation industry that is relying on the development of the fuels to meet its promises to hit net zero emissions by 2050. “It’s important that claims for sustainable aviation fuel spell out what the reality is, so consumers aren’t misled into thinking that the flight they are taking is greener than it really is.” said Miles Lockwood, director of complaints and investigations at the ASA. While SAFs, which are often derived from waste products, crops or fats, emit much less carbon over their life cycle than fossil fuels, they are not emission free. The UK government says the use of SAFs can reduce emissions by up to 70% compared with the kerosene-type used in most commercial flights. Virgin estimated that the net CO₂ emissions produced by the flight across the Atlantic was around 64% lower than comparable flights powered by traditional jet fuel.<br/>
Italy's ITA Airways has extended a suspension of its flights to and from Tel Aviv until Aug. 8 "due to the geopolitical developments in the Middle East and to ensure the safety of its passengers and crews," the airline said on Tuesday. ITA Airways had previously suspended flights to and from the Lebanese capital until Aug. 6. Airlines are avoiding Iranian and Lebanese airspace and cancelling flights to Israel and Lebanon, as concerns grow over a possible wider conflict in the region after the killing of senior members of militant groups Hamas and Hezbollah.<br/>
Russian flag-carrier Aeroflot has filed a claim against aerospace firm Yakovlev with the Moscow arbitration court. While the fundamental argument and details of the case have not been revealed, the claim sum disclosed by the court filing is just under Rb7.3b ($86m). Yakovlev is the manufacturer of Superjet 100s – and is developing a more domesticated version, the SJ-100 – as well as the MC-21. Aeroflot reached an agreement with Yakovlev, under its previous name Irkut, almost two years ago which covered purchase of 339 aircraft, among them 210 MC-21s and 89 SJ-100s. Whether the case, dated 2 August, relates to this agreement, a dispute with the current Aeroflot fleet, or a separate matter, is unclear. Aeroflot was recently reported to be negotiating a restructuring of the agreement, indicating it would be converted entirely to MC-21s. CE Sergei Aleksandrovsky had been quoted as saying that the change was driven by delays in deliveries. Aeroflot is a large user of Superjet 100s although group sister carrier Rossiya has been lined up as the focal point of operations with domestically-built aircraft. Russia’s government had revised an industrial forecast for domestic civil aircraft production in May this year, pushing back delivery schedules by about two years – to 2025 for the MC-21 and 2026 for the SJ-100. Aeroflot has newly disclosed half-year financial results which claim to show a continuing trend of “gradual improvement” for the company, with revenue growth outpacing the rise in costs owing to strong passenger numbers and load factors.<br/>