Airline Finance News - Europe.


New York, Geneva (AirGuideBusiness - Airline Finance News Europe) Mar 4, 2012

Aer Lingus Aer Lingus management cautions on selling governmentOs 25% stake. Aer Lingus executives are concerned the planned sale of the Irish governmentOs 25% stake will put its profitable business model at risk. Aer Lingus reported a net income of U71.2 million ($95.6 million) for 2011, up 65.7% from a U43 million net profit in 2010. The Irish government last week announced plans to sell its 25% shareholding in Aer Lingus as part of a U3 billion disposal program of state assets per a bailout agreement with its main lendersNthe European Union, European Central Bank and International Monetary Fund. The country, which received an U85 billion aid package in 2010, said it would dispose of its EI stake when market conditions are more favorable for the airline. OThe sale [of the 25% stake in EI] is a matter for the government, but at Aer Lingus we would like to stress that our success is very much linked to building connectivity and partnerships with multiple airlines,O EI head of communications Declan Kearney said. OIreland is an island and we see it as our primary mission to connect Ireland with the world. If the stake is sold in a way that is offensive to any of our partners, that would damage our business model and the connectivity of the country,O Kearney said. EI left oneworld in 2007 and since has extended its network through codeshares with airlines across all three alliances: Air France KLM/SkyTeam, British Airways/oneworld and United Airlines/Star Alliance. It also has a sales agreement with JetBlue. Ryanair, which is Aer LingusOs largest shareholder with a 29.8% stake, said the government should sell its stake to Ryanair, The Irish Times reported. Ryanair has launched two unsuccessful take-over bids for its smaller competitor in the past. OIf the Irish government had any sense they would sit down and ask what is best for Ireland Inc. going forward. It is clearly to merge the two Irish airlines,O CEO Michael OOLeary said. OIf it is not sold to Ryanair, if it is sold to anybody else, it is inevitable that Aer Lingus will be broken up because everybody else only wants certain bits: the Heathrow slots and maybe the long-haul. Nobody wants the short-haul, because they will have to compete with Ryanair.O Mar 2, 2012

Aer Lingus Aer Lingus reports improved 2011 net earnings. Aer Lingus Group has reported a consolidated net income of U71.2 million ($95.6 million) for 2011, up 65.7% from a U43 million net profit in 2010, marking its second year of profitability. Aer Lingus credited the results to moving away from the pure low-fare model and repositioning itself as a Ovalue airline,O focusing on yield instead of load factors, a demand led network strategy and pushing its Greenfield cost reduction program. It said that both the groupOs long- and short-haul networks continued to be profitable. In 2009, before it adapted the new strategy, long-haul was significantly loss-making and short-haul was just barely breakeven. Operating profit before net exceptional items fell 6.5% to U49.1 million from a U52.5 million profit in 2010. Exceptional items comprised a U37.2 million credit in 2011. OWhile the 2011 operating result was lower than that reported for 2010, it was nonetheless significantly ahead of our expectations at the start of 2011 and was achieved against a difficult backdrop of non-controllable fuel price inflation, increased airport charges and challenging demand conditions in our primary markets,O said CEO Christoph Mueller. Revenue rose 6% to U1.29 billion and passenger revenue rose at the same rate to U1.23 billion, with increases in both short- and long-haul revenue. Passengers carried in EI mainline increased 1.8% to 9.51 million while the average fare per passenger rose 4.8% to U112.27 and retail revenue per passengers inched up 0.4% to U17.73. RPKs rose 1.1% to 14.05 billion on a 1.8% increase in ASKs to 18.58 billion; load factor decreased by 0.5 points to 75.6%. EI said it has received free allowances amounting to 80% of its 2012 requirement under the EU emissions trading system (EU ETS) and it has purchased the balance of its requirements for the year for U1.66 million. Looking forward, Aer Lingus said it expects key markets to remain very competitive this year and plans to keep capacity flat. OOur expectation for 2012 is that the group will remain significantly profitable albeit below 2011 levels. This will require Aer Lingus to drive increased passenger volumes and to also generate a higher average yield per seat across the network,O it said. Feb 29, 2012

Air China, CFM, FLY Leasing Aircraft News. Air China has taken delivery of an Airbus A321-200 Feb. 29, as part of its re-fleeting and investment program. This aircraft is part of a mandate to finance six A321-200s under a French optimized lease structure combined with ECA loan, with Natixis as arranger of the French lease structure and ECA agent and KfW IPEX-Bank and Natixis as arrangers of the ECA debt. CFM International has letter agreements from International Lease Finance (ILFC), CIT, AerSale, and GE Capital Aviation Services (GECAS), to include their engines in the TRUEngine program. More than 6,990 in-service CFM56 engines are enrolled in the TRUEngine program, over 40% of the in-service CFM56 commercial fleet worldwide. FLY Leasing Ltd. has acquired two Boeing 737-700 aircraft on lease to GOL Airlines. It now has a fleet of 111 commercial aircraft on lease to 54 airlines in 29 countries. Mar 2, 2012

Air France Air France revisits plans for Ivory Coast airline partnership. Air France has relaunched plans for a partnership in a new airline in the Ivory Coast, which would make it a regional hub. The carrier, Air Cte d'Ivoire, could begin operations at the end of April with two leased Airbus A319s, La Tribune reported, citing AF CEO Alexandre de Juniac who was in the West African country last week to discuss the venture. The Ivory Coast government would hold a 51% stake and the Air France KLM Group would hold a 35% stake with partner Aga Khan Fund for Economic Development of the Ivory Coast. Local investors would hold the remaining 14% stake. For Air France KLM, the move is part of a strategy to maintain its strong position in Africa and fend off increasing competition from Emirates Airline and Star Alliance carriers Turkish Airlines and Brussels Airlines. AFOs goal is to build Abidjan Port Bouet Airport (ABJ) as a regional hub and secure a regional feed in West Africa. OAbidjan has a very privileged location in the area,O de Juniac said. AFOs plan is to build a strategic partnership in the region. He said the venture has what he called a defensive component and said it would be Orisky not to take part.O Last summer, Ivory CoastOs Transport Minister Gaoussou Toure told Bloomberg the government planned to start a new airline to replace Air Ivoire with Air France KLM Group holding a minority stake. Air France operates a daily Paris Charles de Gaulle-ABJ service. Feb 29, 2012

Alitalia Alitalia narrows 2011 deficit. Alitalia Group (AZ) reported a 2011 net loss of U69 million ($92.9 million), a 58.9% improvement from an U168 million deficit in 2010. Operating loss was reduced from U106 million to U6 million Owith a negative margin of 0.17% on revenues, in line with the operating breakeven objective,O the company said in a statement. Revenue increased 7.9% to U3.48 billion on a 5.5% rise in passengers carried to 25 million, of which 1.4 million flew with its low-cost carrier Air One Smart Carrier (AP). International and intercontinental revenue from increased 7.2% and accounted for 62% of total passenger revenue. The group said that effective capacity management, cost-cutting measures and the development of ancillary revenue helped to successfully mitigate fourth-quarter challenges that included rising fuel prices, falling demand in Japan and North Africa, and dropping yield. Load factor gained 0.8 points to 72.8%. The group added 13 new aircraft during the year and phased out 12, bringing its fleet at year end to 152 with an average age of 8.3 years. It will phase out 16 older aircraft this year and raise the rate of new aircraft deliveries to at least 20, including five Airbus A330s to support its intercontinental expansion. It will also revamp the cabins of 10 Boeing 777s. AZ warned that prospects for the air transport sector for 2012 remain challenging and said the industry is likely to undergo a further fall of profits Omainly due to a slowdown in volumes growth, a fall in high yield demand and higher fuel costs. The Eurozone is particularly exposed to such factors as a consequence of the expected GDP fall in the area,O it stated. Separately, the company confirmed that Andrea Ragnetti will replace outgoing Rocco Sabelli as CEO, effective March 5. Ragnetti is a former executive of Royal Philips Electronics. Feb 28, 2012

Alitalia Alitalia's Board of Directors Approves the Group Financial Statement for 2011. The Board of Directors of Alitalia -...

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