star

South African Airways (SAA) Friday exited a local form of bankruptcy protection called business rescue after roughly 17 months. SAA was placed under administration in December 2019, and its long-standing financial woes worsened during the COVID-19 pandemic. All operations were mothballed in September 2020. Its administrators said that they had filed a notice of "substantial implementation" of a business rescue plan with South Africa's Companies and Intellectual Property Commission. That meant they had "effectively discharged the business rescue and handed over the operations of SAA back to its board and executive team", adding SAA was now solvent. The airline is one of a handful of South African state companies that depend on government bailouts, placing the budget under huge strain at a time of rapidly rising debt. The Department of Public Enterprises (DPE), the ministry responsible for SAA, said the government was in the final stages of negotiations with a preferred equity partner for SAA. "A purchase and sale agreement should be concluded in the next few weeks. This will enable capital, and much-needed technical and commercial expertise to be brought in to ensure a competitive flag carrier emerges," it said.<br/>

ANA Holdings Inc. issued a surprise profit outlook for the fiscal year, even as international air travel to and from Japan remains limited and countries across the globe recover from the pandemic at different speeds. Operating profit for the year through March 2022 will be 28b yen ($257m), Japan’s No. 1 carrier said Friday, seeking to deliver on last year’s pledge to return to profit despite the spread of Covid-19. That compares with analysts’ average projection for a 93.6b yen loss, according to data compiled by Bloomberg. The aviation industry has been pummeled as countries closed their borders and international travel dried up, and the recovery will likely be slow. Airlines are expected to lose a combined $48b in 2021, the IATA has said. Still, ANA CEO Shinya Katanozaka said the company will turn cash-flow positive around July, with current spending sustainable for another three years. ANA’s operating loss for the year through March was 465 billion yen, in line with a narrower forecast issued last week. Revenue fell 63% to 729b yen. “It’ll be hard for ANA to achieve the forecast without cutting a lot of costs,” said Yasuo Hashimoto, principal consultant at Japan Aviation Management Research. “The second quarter, including summer holidays, will be an important source of income as it’s a high season.” The airline has been lowering costs by retiring large aircraft including Boeing 777s, and dispatching employees to other companies instead of shedding jobs. It has also reduced office space as more staff work from home.<br/>

Singapore Airlines Ltd said on Monday it had raised about S$2b ($1.50b) through sale-and-leaseback deals for 11 of its planes to help bolster liquidity as it grapples with the pandemic-related plunge in travel. The airline said it would continue to explore other ways to raise liquidity after reaching deals with four parties over seven Airbus SE A350-900s and four Boeing 787-10s. "The additional liquidity from these sale-and-leaseback transactions reinforces our ability to navigate the impact of the COCVID-19 pandemic from a position of strength," Singapore Airlines CE Goh Choon Phong said. Singapore Airlines said it had access to more than S$2.1b of undrawn credit lines and an option to raise up to S$6.2b in convertible bonds before its annual meeting in July 2021. The airline lacks a domestic market and has been hit hard by the virtual halt to international passenger travel because of border controls and quarantine measures.<br/>

Air New Zealand has extended its strategic alliance partnership with Air China for another five years, as both carriers reiterated their commitment to work together as the airline industry recovers from the coronavirus pandemic. The alliance agreement — covering areas like codesharing and frequent flyer benefits — is now extended to 2026. Air NZ chief Greg Foran says the partnership with its fellow Star Alliance carrier will “help New Zealand rebuild together”. “The renewal of our strategic cooperation with Air China will be a vital boost for our tourism industry as it recovers from the severe impact of Covid-19. Our alliance with Air China has delivered, and will continue to deliver, real benefit to New Zealand – including greater choice, extra seats and more flights into New Zealand,” Foran says. Before travel restrictions shut off international borders, Air New Zealand flew between Auckland and Shanghai, while Air China flew between Auckland and Beijing.<br/>

Private Chinese carrier Juneyao Air announced it is setting up an investment firm with strategic investors to invest in airlines, and financial magazine Caixin said the new company is bidding for bankrupt HNA Group’s assets. Juneyao said in a securities filing on Thursday its investment arm Shanghai Juneyao Aviation Investment Co and strategic investors with whom it has a long partnership will set up Shanghai Jidaohang Aviation Technology Partnership Enterprise to be capitalised at a maximum 30 billion yuan ($4.64 billion). It did not name the airlines in which the new firm will invest in. But Caixin, citing unnamed sources, reported late on Thursday the new company is being set up to bid for airline assets under HNA Group. It added that Juneyao was very cautious about a potential acquisition of the HNA assets, and any deal would depend on conditions attached by both sides. HNA Group, whose flagship business is Hainan Airlines, has been placed under a bankruptcy and restructuring process and is looking for private capital to avoid liquidation. The Caixin report said four private companies are participating in the bidding for HNA’s airline assets, without naming the other companies.<br/>