New York (AirGuideBusiness - Company Watch) Oct 23, 2011
AAR CORP. to Acquire Telair[umlaut] International and Nordisk Aviation. AAR CORP. announced today that it has signed a definitive agreement to purchase Telair International GmbH (Telair) and Nordisk Aviation Products, AS (Nordisk) from Teleflex Incorporated. The acquisition significantly adds to AAR's commercial manufacturing business and greatly enhances the Company's ability to capitalize on commercial aircraft build cycles as a Tier-1 supplier to Airbus and Boeing. Telair is a leader in the design, manufacture and support of cargo loading systems for wide-body and narrow-body aircraft with established positions on the world's most popular current and next-generation passenger and freighter models. Telair provides standard container-based systems for Airbus A330/340 aircraft types, as well as the future Airbus A350 and recently launched Boeing 747-800. In addition, the business manufactures systems and components for the Boeing 737 and Airbus A320 families of aircraft, and for converted Boeing 767-300s and 747-400s. Approximately 40% of Telair's revenue is generated from aftermarket spares and support for its installed base of cargo systems. Telair operates from facilities in Germany,Sweden and Singapore. Nordisk designs and manufactures heavy-duty pallets and lightweight cargo containers for commercial airlines from facilities in Norway and China and also has a strong aftermarket position. The purchase price of the acquisition is USD 280 million, which will be initially funded through the Company's existing revolving credit facility. The transaction is subject to customary closing conditions and is expected to be completed before the end of the calendar year. After closing, the Company will update its revised guidance for fiscal year 2012, which was provided on October 5, 2011 at the Company's Investor Day conference. The transaction is expected to generate, on a full-year basis in fiscal year 2013, more than USD225 million of revenue, be immediately accretive to margins and result in earnings accretion between USD0.20 and USD0.25 per diluted share, based on initial estimates of purchase accounting adjustments and excluding synergies resulting from the acquisition. The businesses will operate as part of AAR's Structures and Systems segment. The combination of Telair and AAR Cargo Systems creates a formidable market leader in the design, production and servicing of aircraft cargo systems for both commercial and military platforms. Following the integration of these businesses, the Company expects to achieve significant operational synergies, leading to further margin improvements and accretion. Oct 21, 2011
Accor aims for 200 new hotels in Asia-Pacific region. Accor is pushing for expansion in the Asia-Pacific region with a target of more than 200 hotels by 2014. The company's pipeline focuses on China, with 60 planned hotels; India, with 63; and Indonesia, with a target addition of 35 hotels. Oct 17, 2011
Airline ancillary revenue soars to USD$32.5 billion worldwide in 2011. Ancillary revenue has become a crucial component in the global airline industryOs profit toolbox. The International Air Transport Association slashed its 2011 industry profit outlook to $USD billion and revealed that carriers will spend USD10 billion more on jet fuel this year. The USD32.5 billion contributed by ancillary revenue has lifted the airline industry from a loss-making position and continues to provide a very effective hedge against runaway fuel bills. Earlier this year, Amadeus and IdeaWorks reported the ancillary revenue disclosed by 47 airlines in 2010. These statistics were applied to a larger list of more than 200 airlines to provide a truly global projection of activity for 2011. The Amadeus Worldwide Estimate of Ancillary Revenue for 2011 is the second year Amadeus and IdeaWorks have undertaken the task of calculating global ancillary revenue activity. OAs ancillary revenues continue to grow rapidly, we are now seeing increasing interest from full service carriers around the world, which are also starting to implement ancillary services through global distribution systems, such as Amadeus. KLM and Iberia, for instance, have just joined the ranks of carriers implementing the Amadeus Ancillary Services solution for travel agencies. The model is now focusing on services that increase the scope of the product offering and reinforce the brand rather than unbundle the ticket price,O said Holger Taubmann, VP Distribution, Amadeus. The IdeaWorks analysis reveals natural groupings (or categories) based upon a carrierOs ability to generate ancillary revenue. The Opercentage of revenueO results associated with four defined categories were applied to a worldwide list of operating revenue disclosed by 203 airlines.2 The following describes the four categories: [yen]Ancillary Revenue Champs. These carriers generate the highest activity as a percentage of operating revenue. The average achieved by this group was 19.8%, which is slightly up from 19.4% for 2010. Examples include AirAsia, Aer Lingus, easyJet, Ryanair and Spirit Airlines. [yen]Major US Airlines. US-based majors generate strong ancillary revenue through a combination of frequent flier revenue and baggage fees. The average for this group was 11.9%, which is a sizable increase above the 2010 rate of 7.2%. Examples include Alaska, American and United. [yen]Low Cost Carriers. LCCs throughout the world typically rely upon a mix of la carte fees to generate good levels of ancillary revenue. The average in this group was 6.5% and is above last yearOs 5.4%. Examples include AirTran, Blue1, IndiGo, Jazeera Airways, Pegasus and Spring Airlines. [yen]Traditional Airlines. This category represents a catch-all for the largest number of carriers. Ancillary revenue activity may consist of fees associated with excess or heavy bags and limited partner activity for a frequent flier program. The average here remained at 2.9%. Examples include Air China, Emirates, Finnair, LAN, Qatar Airways and Singapore Airlines. OOutside of the US market and the global LCC sector, airlines tend to choose a model that complies with industry standards rather than a customized approach to the development and deployment of their ancillary services,O said Julia Sattel, VP Airline IT, Amadeus. OWhatever the model, there is no doubt that the growth of ancillary sales is here to stay. The Electronic Miscellaneous Document (EMD) standard for the fulfillment of ancillary sales is rapidly gaining momentum. According to IATA, there are now 28 airlines in the world that are EMD capable, 15 of which are using AmadeusO EMD Server and have issued over 2.5 million EMDs this year alone,O said Sattel. The US Major Airlines category continues to produce a commanding share of global ancillary revenue: The USD12.5 billion result (38% of the global total) represents just seven airlines: Alaska Airlines, American, Continental, Delta, Hawaiian, United, and US Airways. Compare this to the second largest piece of the pie at USD10.9 billion (34% of the global total) which is generated by a far larger group of 140 airlines, the Traditional Airline category. As proven by this revenue result, US-based airlines have readily adapted to an la carte world, but they also benefit from consumers who are keen to get frequent flier miles. IdeaWorks believes that the majority of ancillary revenue for US major airlines is generated by the sale of frequent flier miles, notably those linked to co-branded credit card activity. This financial activity exceeds USD6.5 billion annually in the US alone. Baggage fees for US carriers represent approximately 20% of their ancillary receipts. The remaining revenue is produced by a large array of la carte and commission-based activities. Other sources include on-board sales of food, beverages, Wi-Fi, and hotel bookings. In addition, airlines offer an ever-increasing selection of services that add to traveler convenience such as priority security screening, early boarding, and exit row seat assignments. The ancillary revenue profile outside the US is difficult to define due to carrier-by-carrier differences. The outsized presence of frequent flier program revenue is most obvious in the US. However, major carriers in other countries, such as Australia, Brazil, and Canada, do generate significant revenue from the sale of miles and points to banks, hotels, retailers, and even direct to program members. Carriers in North America began to emphasize ancillary revenue after the oil price shock of 2008. Not surprisingly, this region leads the world for ancillary revenue production. IdeaWorks estimates the region achieved a stunning 72% increase above the level estimated for 2010. Ancillary revenue rose across the globe and was largely driven by traffic and passenger revenue increases as the industry recovered from the 2009 recession. IdeaWorks believes that 48% of the USD9.9 billion worldwide increase can be attributed to the higher overall level of revenue and passenger activity. Simply stated, an increase of the base generates a larger calculated result. The remaining 52% is attributed to carriers becoming more focused on ancillary revenue through better financial disclosure, stronger merchandising efforts, and adding more la carte services for sale. Savvy airline managers have learned ancillary revenue should not rely upon forced choices, but rather allow consumers to tailor travel according to their budget. Consumers who are treated fairly and receive good value will undoubtedly provide airlines with another good year of ancillary revenue growth for 2012. Oct 19, 2011
Apple comes up short, but analysts expect Q4 comeback. Apple says it sold more than 4 million iPhone 4S devices during their first three days of availability -- more than twice the volume sold when the iPhone 4 launched last year -- despite the carping of analysts and the media...