Canada is reluctant to force Air Canada's pilots back to work if they go on strike, a government source told Reuters this week, even though Ottawa took that step to end a work stoppage at the country's two railroads earlier this month. Air Canada's estimated 5,400 pilots, who want the airline to offer pay close to the wages earned by their U.S. peers, said on Friday they would strike if necessary as early as Sept. 18. Their 10-year contract expired nearly a year ago, and no negotiations are scheduled, the pilots said. If a strike drags on, the inconvenience to travelers and the economic damage would compound. The Air Line Pilots Association, which represents the Air Canada pilots as well as those at most U.S. airlines, said it fears federal intervention as happened at the country's two main freight railways. The government source said Ottawa is committed to collective bargaining and would not be trigger happy when it comes to using its power to end labor disputes.<br/>Labour Minister Steven MacKinnon, who ordered an end to the rail dispute, told union workers on Wednesday his hand had been forced by the extreme economic impact of the rail stoppages. The Teamsters union is challenging the decision in court. "We found ourselves in exceptional circumstances," he said. The two rail companies held an effective duopoly. Air Canada controls about 44% of domestic air travel seat capacity with the remainder divided among at least three other carriers. Reluctance to intervene at Air Canada could also reflect political considerations. Prime Minister Justin Trudeau's minority Liberal government depends on support from the pro-union New Democratic Party in parliament. The Liberals also want to win union votes ahead of an election due by end-October 2025.<br/>
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Lufthansa CEO Carsten Spohr is set to meet with Portuguese government officials on Monday as the German airline group weighs a possible investment in state-owned airline TAP SA, according to people familiar with the matter. Acting on a request by Lufthansa, Portugal’s finance minister and infrastructure minister will hold talks with the CEO, said one of the people. Italian newspaper Corriere della Sera reported earlier on Sunday that Lufthansa will seek to buy an initial 19.9% stake in TAP, citing Portuguese institutional sources. Talks are still at a preliminary stage, said one of the people, who asked not to be identified discussing private deliberations. Officials for Lufthansa declined to comment. Portugal’s government reaffirmed its plans in July to privatize TAP, adding that the terms of the sale remain to be defined. The previous administration had aimed to sell at least 51% of the carrier. Lufthansa, as well as Air France-KLM and IAG SA, the parent company of British Airways and Iberia, have publicly stated their interest in TAP. The Lisbon-based airline’s biggest attraction lies in its links to Brazil, of which it’s the largest European provider. It also maintains a strong presence in Africa and operates a number of flights to North America. Spohr recently managed to get clearance for Lufthansa’s takeover of a stake in Italian carrier ITA Airways. IAG, on the other hand, dropped its pursuit of Air Europa amid opposition from regulators. Air France-KLM completed a purchase of a stake in Scandinavian carrier SAS AB last week. <br/>
Scandinavian carrier SAS has formally become the 21st member of the SkyTeam alliance, having joined the group after withdrawing from Star Alliance. SAS’s membership of SkyTeam – effective from 1 September – follows its emergence from US Chapter 11 protection, during which it underwent extensive restructuring. As part of this restructuring SkyTeam’s Air France-KLM invested in SAS, taking a shareholding of 19.9%, with a view to SAS’s becoming a SkyTeam partner. SAS is already codesharing with Air France-KLM and it states that options for codeshares with other alliance members will “follow later”. The carrier is seeking approval for an extensive codeshare with Delta Air Lines. Customers will have “seamless” connectivity to more than 1,060 destinations in the SkyTeam network, SAS states, adding that its membership means SkyTeam will fly to both Svalbard in Norway and Ushuaia in Argentina – which claim to be the world’s most northerly and southerly commercial airports. “Our customers will experience a smooth transition to SkyTeam, thanks to the tireless efforts of all SAS colleagues,” says CE Anko van der Werff. “The partnership will open new opportunities for our passengers, expand our global network, and allow us to collaborate closely with like-minded airlines.” Air France-KLM Group invested $144.5m in SAS’s parent company, taking its minority stake after obtaining regulatory approval in Europe and the USA. “SAS will enhance the group’s footprint in the Scandinavian markets,” says Air France-KLM chief Ben Smith.<br/>
China's leading state-owned airlines posted losses in the first half of the year, weighed down by a slower-than-expected rebound in international travel, domestic oversupply, and more intense competition as aviation capacity returns globally. China's top three airlines - Air China, China Southern Airlines and China Eastern Airlines - last reported annual net profits in 2019 before the COVID-19 pandemic took hold. China Eastern, headquartered in Shanghai, reported a first-half loss of 2.8b yuan ($395m) on Friday, compared with a loss of 6.2b in the same six months of last year. "Ticket prices in the domestic market have decreased year-on-year ... due to intensified competition in the domestic passenger transportation market, lower-than-expected recovery of some international markets, as well as the competition from high-speed rail," it said in a filing. The country's flagship carrier Air China posted a first-half net loss of 2.78b yuan, narrower than a loss of 3.45b in the same period last year, it said on Thursday. China Southern Airlines reported a net loss of 1.23b yuan in the first half, narrowing from a 2.9b loss a year earlier. The Guangzhou-based airline made a 760m yuan profit in the first quarter. Air China said international traffic grew in the first half, with passenger numbers above 80% of 2019's pre-pandemic levels. But it said its traditionally "advantageous" North American routes were recovering slowly.<br/>
India cleared the last roadblock to national carrier Air India’s merger with smaller rival Vistara, approving a S$360m ($276m) investment by Singapore Airlines into the new combined carrier. The deal paves the way for the operational merger of planes, staff and routes. Air India expects to complete the merger with Vistara by the end of the year, Singapore Airlines said in a filing Friday. The Singaporean carrier, which jointly owns Vistara with the Tata Group, will hold a stake of about 25.1% in the enlarged Air India Group. The Air India-Vistara merger, more than 18 months in the making, adds to a wave of industry deals, with Air France-KLM taking a 19.9% stake in SAS AB this week while Deutsche Lufthansa AG secured a E325m investment in Italy’s ITA Airways in July. Ongoing airline transactions include Alaska Air Group Inc.’s and Hawaiian Holding Inc.’s $1.9b merger, and Korean Air’s $1.4b bid for smaller rival Asiana Airlines Inc. Not all proposed deals have succeeded however, with US carriers JetBlue and Spirit abandoning a $3.8b pact and IAG SA terminating a bid to take over Spain’s Air Europa. The Indian merger will give Singapore Air greater exposure to one of the world’s fastest-growing travel markets and make it the only foreign player to have a significant stake in one of the country’s airlines. Vistara said in a statement that starting Sept. 3, customers will progressively no longer be able to make bookings with Vistara for travel on or after Nov. 12. “All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India’s website,” Vistara said. The deal also widens Singapore Air’s reach beyond its smaller home market, with its reliance on international travel hurting the company during the Covid-19 pandemic. The carrier has wrapped up a flurry of tie ups in recent years including joint-venture deals with neighbors Malaysia Airlines and more recently Garuda Indonesia. It is also seeking a similar pact with Japan’s All Nippon Airways.<br/>