Airline Finance News - Europe

AirGuide Business, July 21, 2008

7/21/2008

AirBerlin, Condor Airlines

AirBerlin confirmed Friday that it no longer is interested in acquiring Condor Airlines from Thomas Cook Group. It said the share swap deal, announced last fall, was "canceled by mutual agreement." In a statement to the German Federal Cartel Office, AirBerlin and Thomas Cook said the changing economic environment, including the soaring cost of fuel, was the "main reason" for the contract's cancellation. 7/14/2008

Austrian Airlines

The Austrian government has asked for a review of the options for the carrier, which last month predicted it would make a loss of up to EUR90 million euros (USD$143 million) this year due to rising fuel prices. The review will be presented to Austrian Airline's supervisory board on July 28. The outgoing Austrian government is deeply split about a possible sale of the stake. 7/18/2008

British Airways

British Airways said that it would struggle to avoid losing money this year as its annual fuel bill rises beyond an earlier forecast of [pounds sterling]3 billion, or $6 billion. British Airways said that it would struggle to avoid losing money this year as its annual fuel bill rises beyond an earlier forecast of [pounds sterling]3 billion, or $6 billion. British Airways fell as much as 5.7 percent in London trading after Chairman Martin Broughton said breaking even in the 12 months through March will be a "considerable achievement" and that the London-based airline must "make changes" to report a profit. 7/15/2008

British Airways

British Airways will cut flights next winter due to the rising cost of fuel which is threatening to wipe out their profits this year, the two companies said on Tuesday. British Airchairman Martin Broughton said the airline is looking at extra fuel costs this year of more than GBP1 billion pounds (USD$2 billion), which is more than last year's record profit of GBP875 million. The British flag carrier will cut flight frequencies but it will not cut any long-haul routes, Chief Executive Willie Walsh told reporters at a press conference after the meeting. But he added there could be "one or two" short-haul suspensions in the plan, which will be finalized in the next fortnight. 7/15/2008

British Airways, Chorion

Chorion, the UK IP firm behind Noddy and Paddington Bear, has launched a new division to build consumer and corporate brands through its classic characters, and has already signed up British Airways. Chorion Brand Partners will create strategic partnerships with third-party blue-chip firms, enabling them to enhance their brand image through alignment with iconic Chorion brands, which also include Mr Men and Little Miss, and Beatrix Potter. The first deal to be secured by the division is to establish Paddington Bear as the face of British Airways children's travel. From October, all BA flights in and out of the UK will distribute Paddington-branded travel packs for junior Skyflyers aged three to five. 7/16/2008

Delta Air Lines, Northwest Airlines

The European Commission on Wednesday suspended its review of Delta Air Lines' proposed purchase of rival US carrier Northwest Airlines. The Commission suspended its review of the deal, worth more than USD$3 billion, because information sought was incomplete. There is no fixed date for when the review will begin again, but it will depend on when the information is provided. The deadline had been July 29 and was an initial one-month review. If given regulatory approval, the new airline, led by Delta chief executive Richard Anderson, will be headquartered in Atlanta and operate under Delta's flag with over USD$35 billion in annual revenue and about 75,000 employees. Delta and Northwest both exited bankruptcy last year. 7/16/2008

Equinox, Alitalia

Investors Equinox and Miro Radici Finance are looking at the cargo assets of Alitalia and have informed the near-bankrupt airline's sale adviser of their interest, the two companies said on Thursday. Equinox is a Luxembourg-based private equity firm while Miro Radici Finance is the holding company of the Miro Radici Family of Companies. After two failed attempts to sell its controlling stake in Alitalia, the Italian government embarked in May on its latest effort to settle the airline's fate, picking Italian bank Intesa SanPaolo as the sale adviser. The new company could be based at Milan's Malpensa airport, they said. 7/17/2008

Finnair

Finnish flag carrier Finnair has started investigating importing jet fuel to Finland as prices are increasing and competition among providers is limited, a senior official was quoted as saying. Finnair, along with other airlines, is suffering from high fuel costs and Arle said this year's fuel bill is likely to top EUR600 million euros (USD$943 million). 7/15/2008

Iberia

Iberia said on Monday that greater demand for long-haul flights drove passenger traffic higher in June. As measured in terms of revenue passenger kilometres, traffic in June rose by 0.9 percent from a year earlier to 5.645 billion kilometres. Iberia makes most of its profit from high-margin long-haul flights between Spain and Latin America. Overall, long-haul traffic rose by 4.3 percent in June to 3.397 billion kilometres. The passenger load factor declined to 81.1 percent compared to 83.8 percent in June 2007. Iberia added in a statement that it was "permanently analyzing capacity on offer with a view to evaluating profitability" due to rising fuel prices. To save fuel, Iberia said it would withdraw its less fuel-efficient MD-88 aircraft from service in October. 7/15/2008