Elliott Investment Management has requested a special meeting at Southwest Airlines, formalizing the launch of a long-signaled proxy fight for control of the carrier’s board. The activist is seeking a meeting date of Dec. 10, it said Monday. Elliott has also trimmed the size of its board slate from 10 director candidates to eight, after Southwest shrunk its board size from 15 to 12. CNBC reported last month that Elliott was preparing to call a special meeting. Southwest’s campaign will be Elliott’s first U.S. proxy fight since it took on Arconic in 2017. Elliott has an 11% stake in the airline and is seeking the ouster of CEO Bob Jordan. It had also been looking to remove executive chairman Gary Kelly, but the former CEO announced he would step off the company’s board in the September shuffle that shrank Southwest’s board. David Hess, who joined Southwest’s board in 2021, was also on the board of Arconic in the midst of its proxy fight with Elliott. Hess, whom Elliott is targeting for removal, ultimately became CEO of the Alcoa spinoff shortly before the company settled with Elliott. Elliott has never before called for a special meeting, which at Southwest carries a higher threshold of approval compared with voting at a regularly scheduled shareholder meeting. Elliott will have a little less than two months to solicit votes from shareholders large and small. One top Southwest shareholder, Artisan Partners, while not an activist investor, has already publicly expressed its support for Elliott’s campaign. Southwest described the move as “unnecessary and inappropriate considering the extreme nature of Elliott’s demands.” The airline’s shares slipped roughly 1% in Monday morning trading on the news.<br/>
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Azul SA is rushing to raise cash as part of a deal it reached last week with its aircraft lessors, a key step in the Brazilian carrier’s attempt to again rework its debt. The company was able to strike an agreement with lessors and parts suppliers that reduces its debt by 3b reais ($540m) in exchange for 100m new preferred shares. The announcement sent shares rallying as much as 22%. But the boost proved short-lived. The stock eked out gains of less than 1% for the week, and remains down more than 60% this year, the worst performance on Brazil’s benchmark Ibovespa index. While welcome by investors, the deal doesn’t provide any of the fresh capital Azul needs to bolster liquidity. And the agreement itself is contingent on the company obtaining new financing, said Carolina Chimenti, an analyst at Moody’s Ratings. “Getting new money remains crucial,” she said. The renegotiation “was the first step toward avoiding a Chapter 11 filing and the company is still at work.” The situation underscores Azul’s delicate financial position. It’s the only carrier of the three that dominate Latin America’s largest air travel market to have avoided filing for bankruptcy protection. But it has struggled to shore up its balance sheet and deal with the impact of a weak Brazilian real, despite having renegotiated with lessors and carrying out a debt swap that pushed back maturities. About $68m comes due in bond payments this month, according to Moody’s, and analysts have said the company can manage those. As of June 30, Azul had 1.5b reais ($268m) of debt maturing in the short term and around 1.4b reais readily available cash, according to Fitch Ratings.<br/>
EasyJet has hired Jan De Raeymaeker as its finance chief from European rail freight operator Lineas, replacing Kenton Jarvis as he moves to become the budget airline's CEO. The company said on Monday that Raeymaeker, a Belgian national, would take up his role on Jan. 20. Prior to working as CFO at Lineas, he was CFO at Brussels Airlines. "As CFO, Jan will lead the company's finance function as well as several other key business areas, including strategy, fleet, analysis and reporting, and risk and assurance," an easyJet spokesperson said. Earlier this year, easyJet said CE Johan Lundgren, who led the carrier's recovery from the pandemic, would step down early in 2025 when he will have served seven years as CEO. It said Jarvis, who analysts saw as a candidate that would provide continuity in strategy, would become CEO on Jan. 1.<br/>
Air Astana intends to modify its entire fleet of 11 Airbus A321LRs with additional fuel tanks, following the successful launch of non-stop flights to London Heathrow from Almaty. Airline chief Peter Foster says the modifications are expected to be completed by end-2025, allowing the Kazakh carrier to operate more long-range, non-stop flights, on top of London. Foster, who was speaking at a media roundtable in Almaty, has however ruled out any commitments for the A321XLR, noting that it is still not fully known “what the aircraft can or cannot do”. “We would rather take something we know works rather than take a chance,” Foster says. Following the service entry of the first modified A321LR, Foster says two more aircraft have been inducted to be fitted out with additional fuel tanks, a fourth A321LR will be inducted in November, he adds. The modifications will also extend to the seven new A321LRs being brought in from Air Lease that will be delivered from 2026. Foster says one possible route for the modified aircraft is between Almaty and Tokyo, which it will launch in early 2026 following the signing of a codeshare agreement with Japan Airlines. <br/>
Emirates, the world’s largest international airline and a major buyer of Boeing Co. widebody aircraft, said it will have “serious conversations” with the US planemaker in coming months following an announcement that the 777X model will be delayed yet again. “Emirates has had to make significant and highly expensive amendments to our fleet programmes as a result of Boeing’s multiple contractual shortfalls,” President Tim Clark said in a statement, adding that given Boeing’s current situation “I fail to see how Boeing can make any meaningful forecasts of delivery dates.” The tersely worded statement highlights the growing frustration among airline customers who have waited for years to get the aircraft they’ve ordered, only to see promised deadlines slip again. Boeing said late on Friday that first delivery of its largest widebody model will be delayed to 2026, more than five years after the giant plane was originally set to reach customers. Aircraft delays and a shortfall in deliveries have become a broader issue across the industry that’s also afflicting Airbus SE. As a result, airlines are being forced to fly older aircraft for longer, often retrofitting them with new interiors and other upgrades at considerable expense. Emirates has built its fleet around two main models: the Boeing 777 and the Airbus A380 double-decker. With Boeing’s next-generation model of that plane delayed and Airbus ending production of the A380, Clark has been forced to extend the existing jets’ lifespan by putting them through an extensive and expensive retrofit program.<br/>
The European Union backed a package of sanctions targeting Iran for providing Russia with ballistic missiles, with measures including restrictions on Iran Air and two procurement firms. A total of 14 individuals and entities were listed, including three airlines, as well as firms involved in the proliferation of Iranian arms to Russia, according to a news release. The sanctioned officials include Iran’s deputy defense secretary, Seyed Hamzeh Ghalandari, and the manging directors of two EU-listed defense companies. The sanctions approved Monday by EU foreign ministers, which include asset freezes and travel bans, are a first response to the provision of missiles and additional listings are being assessed, Bloomberg previously reported. Iran has previously been sanctioned for providing Russia with attack drones.<br/>
South Korean low-cost carriers (LCCs), such as Jeju Air Co. and Air Busan Co., are set to challenge Korean Air Lines Co.'s dominance over the Bali, Indonesia route, a market that the Korean flagship carrier has until now dominated operationally among Korean airlines. This shift to a more competitive landscape is expected to reduce ticket prices from more than 1m won ($736.86) round trip to less than half that amount. According to sources from the aviation industry on Monday, Jeju Air will be the first Korean LCC to launch a new Incheon-Bali route, offering seven flights per week starting on October 27th, 2024. The airline will offer a limited-time promotional fare of 99,300 won for a one-way ticket (including fuel surcharge and airport tax) until October 31st. Air Busan will also begin operating a new route from Busan (Gimhae Airport) to Bali, with four flights per week starting on October 30th. To celebrate its inaugural flight, the airline will offer one-way tickets at a special price of 249,000 won until October 17th. Korean Air and Garuda Indonesia were the only two carriers to operate the Incheon-Bali route. With Korean Air effectively monopolizing the route, ticket prices have been considered high relative to the flight time of around 7 hours, with one-way fares typically ranging from 500,000 won to 800,000 won. With LCCs entering the market, Korean Air is also preparing to respond proactively.<br/>
Virgin Australia said on Monday it had recorded its second consecutive annual profit and a 6.8% year-on-year increase in revenue, putting it in a stronger financial position as it looks to pursue an eventual initial public offering. Qatar Airways said two weeks ago it would buy a 25% stake in Australia's No. 2 carrier, which would serve as a cornerstone investment ahead of an anticipated return of Virgin Australia into public ownership. The airline was bought by U.S. private equity firm Bain Capital after it collapsed into voluntary administration in 2020, and the key rival to Qantas Airways last year returned to profit for the first time in 11 years. "Continued improvement in profitability means we are well-positioned to deliver great value and choice to Australian travellers," Virgin Australia CEO Jayne Hrdlicka said in a statement. "It is essential to our ability to re-invest in our business and customer experience, and vigorously compete with our major competitor." Hrdlicka, who said in February she planned to step down as CEO when a replacement was found, said it had been a challenging year for the aviation industry. CFO Race Strauss identified cost inflation as a key challenge.<br/>