Hospitality Ireland presents a round-up of the latest airline and aviation news from around the world.
EasyJet Shareholder Stelios Haji-Ioannou Shuns Rights Issue - Source
EasyJet's biggest shareholder, the family of founder Stelios Haji-Ioannou, has decided not to participate in the British airline's £1.2 billion rights issue and has sold its rights to buy new shares, a source familiar with the situation said.
The Haji-Ioannou family has sold 76.3 million nil paid rights at £1.65, a 15% discount to the closing price of the rights on Thursday September 16, said the source.
The family has repeatedly said it did not plan to plough more money into easyJet while the airline sticks to a deal with Airbus to buy more planes.
As a result of the rights issue, the family's stake is set to reduce to 15.2% from 25.3% when the new shares go live on September 28.
Both easyJet and a representative for the family declined to comment.
Alitalia To Kick Off Brand Sale With Base Price Of €290m
Alitalia will kick off the sale of its brand on September 18 with a base price of €290 million plus taxes, the airline said on Friday September 17 as it prepares to give way to a new, state-owned carrier.
Last week, the Italian government received the go ahead from Brussels to inject €1.35 billion into a new carrier named Italia Trasporto Aereo (ITA), which is due to start flying in place of Alitalia in mid-October.
As agreed with the European Commission, Alitalia will sell its brand in an open tender and ITA can present an offer to buy it together with other potential buyers by September 30.
Airbus Reaches Deal To Restructure AirAsia Jet Order - Sources
Airbus has agreed to cut prices or reschedule delivery for hundreds of jets ordered by Malaysia's AirAsia to salvage a contract worth tens of billions of dollars with its largest Asian customer, industry sources said on Friday September 17.
The restructuring deal resets relations between two of the industry's closest partners, torn apart by the financial impact of the coronavirus crisis, and lifts uncertainty over the fate of up to 400 A320-family single-aisle jets yet to be delivered.
Airbus declined comment, while AirAsia did not immediately reply to a request for comment.
The AirAsia deal does not involve cancelling jets on order but includes a new delivery schedule and price cuts or other improvements in terms, the sources said.
AirAsia said last year that it would stop taking deliveries of all Airbus jets and review remaining orders.
Industry sources said it had also stopped sending progress payments to Airbus, prompting the planemaker to suspend plans to produce jets on order pending the new restructuring deal.
The deal comes as other airlines in Asia that have ordered hundreds of jets to secure their growth are in the midst of restructuring or are expected to press for relief.
Other suppliers are also expected to come under pressure to negotiate new conditions, one of the sources said.
Lufthansa Launches €2.14bn Capital Increase To Repay State Bailout
Lufthansa said on Sunday September 19 that it would launch a capital increase that was expected to raise €2.14 billion to pay back part of a state bailout Germany's top airline received during the coronavirus crisis.
The subscription period for the widely-expected rights issue, involving the issue of approximately 597.7 million new shares, would run from September 22 to October 5, Lufthansa said.
The airline will use the net proceeds to repay a chunk of the €9 billion government bailout it received last year to stay afloat throughout the COVID-19 pandemic, which resulted in the Economic Stabilisation Fund (ESF) taking a stake in the group.
"We have always made it clear that we will only retain the stabilisation package for as long as it is necessary," Chief Executive Carsten Spohr said.
"We are therefore proud that we can now deliver on our promise and repay the measures faster than originally expected. We can now fully focus on the further transformation of the Lufthansa Group," he said.
Lufthansa said that based on its operating performance in July and August it expected to post positive adjusted earnings before interest and tax in the third quarter.
Insiders told Reuters this year that Lufthansa was planning a capital increase of approximately €3 billion but Spohr has said lower pension liability had reduced the need for fresh capital in the past months.
A number of funds under the management of Blackrock have entered into a sub-underwriting agreement for a total of €300 million as part of the capital increase and have committed to fully exercise their subscription rights, Lufthansa said.
If it participates in the rights issue the ESF has committed to selling its current 15.94% stake in Lufthansa six months after the completion of the share sale at the earliest, while it will be sold no later than two years later, Lufthansa said.
"We also remain committed to further explore portfolio measures when full value can be achieved to maximize the value and strategic flexibility of the Group," Lufthansa Chief Financial Officer Remco Steenbergen said.
American Airlines Joins Bill Gates-Backed Programme To Boost Clean Energy
Several US companies, including American Airlines Group Inc, General Motors and Microsoft Corp, on Monday September 20 build on their commitment to clean energy by joining billionaire and Microsoft co-founder Bill Gates' Breakthrough Energy programme.
The initiative aims to boost development of technologies to achieve the target of net-zero carbon emissions by 2050.
Its catalyst program aims to raise money from governments, philanthropists and companies to make capital investments to bring down the cost of clean technology.
Bank of America Corp, steelmaker ArcelorMittal SA, Boston Consulting Group and the philanthropic arm of asset manager BlackRock Inc have also joined the program, Breakthrough Energy said on Monday September 20.
American Airlines said in a statement it has invested $100 million. The programme will initially focus on four key areas: direct air capture, green hydrogen, long-duration energy storage and sustainable aviation fuel.
The support from US companies comes against the backdrop of President Joe Biden's plans to accelerate carbon cutting. Earlier this month, the White House said that it was targeting 20% lower aviation emissions by 2030.
Cathay Pacific Lowers Q4 Capacity Forecast
Hong Kong's Cathay Pacific Airways Ltd said on Monday September 20 that it had lowered its passenger capacity forecast for the remainder of the year to 13% of pre-COVID levels.
The 13% forecast is down from an earlier 30% target for the fourth quarter as travel restrictions linger.
The airline said that it continued to target cash burn of less than HK$1 billion ($130 million) a month for the rest of the year.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
