Airline Finance News - Europe

AirGuide Business, Jan 7, 2008

Jan 7, 2008

Airlines throughout the world are contending with antitrust charges made at the end of 2007 by the European Commission, which has accused at least 11 and as many as 25 carriers of "cartel" activity relating to airfreight transport. In addition to British Airways, Japan Airlines, Air France KLM, SAS Group and Cargolux (all of which confirmed receipt of statements of objections from the EC before Christmas) All Nippon Airways, Air New Zealand, Air Canada, Cathay Pacific Airways, LAN Airlines and Singapore Airlines have admitted to being charged. Carriers charged late last year have two months from the receipt of statements of objections to respond in writing to the EC and also have the option of requesting a formal hearing. An airline found guilty or admitting to guilt can be fined up to 10% of its annual revenue. Jan 3, 2008

EC may charge 25 carriers in antitrust probe. Up to 25 airlines may face antitrust charges by the European Commission related to cargo price-fixing. Carriers found guilty or admitting guilt may be fined up to 10% of their annual revenues. Jan 3, 2008

Aer Lingus

Aer Lingus wants to cut costs by EUR20 million euros to help stave off the threat posed by rival budget carriers such as Ryanair. The National Implementation Body said in December proposals for a deal had been reached on finding EUR10 million in savings with the remaining EUR10 million to be negotiated. Aer Lingus said it welcomed SIPTU's stance. Aer Lingus, which has been battling with unions to cut overheads since its privatization in 2006, averted flight disruptions in October after reaching a last-minute deal with pilots over a disputed new base in Northern Ireland. The former state carrier's announcement in August that it was transferring London Heathrow slots from Shannon in Ireland to Belfast angered pilots who say staff at the new base will be employed on less favorable pay and conditions. Jan 3, 2008

Aer Lingus

Aer Lingus Workers Agree Mediator Plan On Pay. Aer Lingus workers agreed on Thursday to a plan proposed by a mediator aimed at averting industrial action by staff over working conditions. In November Irish union SIPTU called off planned airport stoppages to give more time for talks with Aer Lingus management and Ireland's industrial relations mediator, the National Implementation Body (NIB). The dispute centered on plans by the airline to change working conditions for temporary employees. Jan 3, 2008

Air Berlin

Air Berlin said investment company Vatas has become the airline's single largest investor with a 15.4% stake. Jan 4, 2008

Air France

Air France KLM launches consolidation with Alitalia talks, VLM buy. Exclusive negotiations between Air France KLM and Alitalia on a possible merger were scheduled to start yesterday following the official approval of Italian Minister of Finance Tommaso Padoa-Schoppia last Friday, according to widespread press reports. The Franco-Dutch group's interest in consolidation does not end with Alitalia. On Christmas Eve, it announced an agreement to acquire VLM Airlines. Financial details of the transaction were not disclosed. VLM operates a fleet of 18 F50s and one BAe 146 and is the largest carrier at London City Airport. Jan 3, 2008

Air France

Air France firms up Alitalia. Air France KLMAos bid to buy the stricken Italian flag carrier Alitalia has been backed by the Italian government. The two airlines will now begin two months of exclusive talks regarding the takeover. Chairman and CEO of Air France-KLM, Jean-Cyril Spinetta, responded saying: AuWe are very satisfied with this decision, which represents a key stage in the process, and we are committed to rapidly reaching a solid agreement that paves the way to the profitable growth of Alitalia.Au Jan 2, 2008

Air France KLM

Assn. of European Airlines elected KLM President and CEO Peter Hartman as chairman for 2008. Hartman takes over from Iberia Chairman and CEO Fernando Conte. Jan 3, 2008

Air France KLM, Alitalia

When Air France bought KLM in 2004 there were extensive guarantees and protection granted to the Dutch state and other interest groups, and it appears the Alitalia board expects a similar approach Ai its statement said the French carrier Auexplicitly states its willingness to undertake commitments towards the Italian State concerning the safeguard and value enhancing of AlitaliaAos brand, logo, and livery with an equal standing to the two other companies of the groupAu, and the Aupreservation of an adequate coverage of the Italian marketAu. It is also thought by some to be a bad time for a takeover deal involving such an ailing company, with the International Air Transport Association warning of a downturn in international airlinesAo operating margins this year due in part to soaring fuel prices. Jan 2, 2008

Alitalia

Alitalia announced the sale of three of its 13 slot pairs at London Heathrow for C[umlaut]92 million ($134.2 million). It called the slots "nonstrategic" and said it will report a C[umlaut]54 million gain on its 2007 balance sheet and a C[umlaut]38 million gain in 2008. Jan 3, 2008