Airline Finance News - Europe

AirGuide Business, Sept 8, 2008

Sep 8, 2008

Air France KLM, Iberia, Cathay Pacific and Singapore Airlines are among those who have posted weaker results in past months, while British Airways said the economic slowdown and high fuel costs had created the worst trading conditions it had endured. Japan's All Nippon Airways and Japan Airlines have stopped flights on certain routes and Bisignani said 26 or 27 airlines have suspended operations or shut down in the last year -- more than in the wake of the September 11, 2001 attacks when airlines previously suffered tough conditions. Sep 3, 2008

European Commission opened its investigation into whether the transatlantic joint business agreement between American Airlines, British Airways and Iberia for flights violates European antitrust regulations. The trio applied two weeks ago for worldwide antitrust immunity from the US Dept. of Transportation together with oneworld partners Royal Jordanian and Finnair. An EC spokesperson said the probe is not the result of competitors' complaints and was launched under the regulator's own initiative. "It's not a merger investigation and has no specific deadline," the spokesperson said. Virgin Atlantic Airways, which has been a vocal opponent of the tie-up, said the EC investigation shows it "understand[s] that consumers will be worse off if this alliance proceeds." Sep 1, 2008

Aer Lingus

Aer Lingus carried 1.01 million passengers in August, or 8.8 percent more than a year earlier, though individual flights were slightly less full, the carrier said on Friday. Ireland's former state airline said its load factor was 80.5 percent in August, compared with 81.7 percent a year ago. Passenger traffic, measured in revenue passenger kilometres (RPKs), rose 8.8 percent from the same period in 2007, the airline said in a statement. On short-haul routes the load factor rose to 83.0 percent from 82.9 percent a year earlier, while RPKs were 15.6 percent higher. On long-haul flights, the load factor fell to 77.5 percent from 80.3 percent last year, with RPKs up 0.8 percent. Sep 5, 2008

Aeroflot

Aeroflot profit could almost halve to USD$150 million - USD$170 million in 2008 because of high fuel costs but Russia's national carrier is still on the look out for acquisitions abroad, CEO Valery Okulov said on Thursday. High fuel prices and the lack of ways to hedge jet fuel costs inside Russia mean Aeroflot will spend an additional USD$130 million on fuel in 2008, said Okulov, a former pilot who has headed the company since 1997. Okulov said the fuel crisis as well as import duties on foreign aircraft and ground servicing costs would slice profit to USD$150 million - USD$170 million in 2008 from USD$313.4 million last year, according to international accounting standards. Sep 4, 2008

Aeroflot

Aeroflot announced the implementation of a fuel efficiency and environmental program designed to save up to 1.5 million tons of fuel per year. Sep 1, 2008

AirBerlin

AirBerlin To Introduce Savings At LTU. German pilot union Cockpit fears that cost savings at Air Berlin will lead to job cuts at its charter airline subsidiary LTU and shrink the LTU fleet by 20 percent, business magazine Wirtschaftswoche wrote in an article ahead of publication on September 8. Air Berlin was planning to cut LTU's fleet by six to 22 aircraft and spread them around to Berlin, Hamburg and elsewhere away from their home base in Dusseldorf, the article said, citing a letter obtained from the union's wages council. An Air Berlin spokesman said he could not comment in detail.

The airline pointed to agreements under which LTU is supposed to account for 20 percent of Air Berlin's total fleet. This would be continued, he said. The savings program came in mid-June when high jet fuel costs on the heels of oil price rises forced airlines to reconsider their strategies. The article also quoted chief executive Joachim Hunold as saying plans for the winter season will be finalized at end-September at the earliest. This would be just four weeks before the new winter flight schedules would apply. Sep 6, 2008

AiRUnion

AiRUnion is run by two Russian brothers -- Boris and Alexander Abramovich -- and the alliance's members are mostly state-controlled. The brothers also have stakes in some of the alliance's members. No one answered phones at AiRUnion on Friday. But in a statement on August 20, the firm apologized to passengers, saying revenues did not cover fuel costs. It was not immediately clear how the alliance's debts -- which Russian Technologies said amount to USD$800 million -- would be paid off. Moscow city government said on Friday it would not seek to bankrupt the companies in the alliance. "We are not yet rich enough to use bankruptcy procedures to get an improvement," Deputy Mayor Yury Roslyak told reporters.

Sources close to the alliance said part of the debts are secured by stakes owned by the Abramovich brothers in the alliance. They could not be reached for comment. Russian Technologies, chosen by the Kremlin to wrest back state control over troubled assets, grew to become one of Russia's most powerful industrial groups under Putin. The group is headed by Sergei Chemezov, a close ally of Putin who worked for an obscure Soviet trade body in East Germany when Putin worked as a KGB spy. Sep 5, 2008