Airberlin sells Niki and LGW to Lufthansa

Niki-The Spirit of Niki (flyniki.com) Airbus A320-214 OE-LEX (msn 2867) ZRH (Rolf Wallner). Image: 922611.

Airberlin issued this statement on October 12, 2017:

Air Berlin PLC and Air Berlin PLC & Co. Luftverkehrs KG have reached an understanding with Deutsche Lufthansa AG on October 12, 2017 that entities of the Deutsche Lufthansa group will acquire certain business units from entities of the Air Berlin group, including in particular NIKI Luftfahrt GmbH as well as Luftfahrtgesellschaft Walter mbH (LGW). The combined purchase price of approximately EUR 210 million will be subject to adjustments upon closing of the transaction.

The transaction is, amongst others, subject to regulatory approvals.

The negotiations with easyJet Airline Company Limited and other bidders, in each case in respect of different units of the Air Berlin group, are still continuing.

Lufthansa issued this statement:

After intense negotiations over the past few weeks, Deutsche Lufthansa AG and the Air Berlin Group have signed a contract on October 13, 2017 regarding the purchase of NIKI Luftfahrt GmbH (NIKI) and Luftfahrtgesellschaft Walter mbH (LGW).

These two carriers are projected to increase the capacity of the operational fleet at Eurowings as follows:

LGW with 870 employees, as well as 17 Bombardier Dash 8 Q400 and 13 Airbus A320 aircraft
NIKI with 830 employees, as well as 20 Airbus A320 type aircraft

This means that the wet-lease operation that is currently still provided for Eurowings by Air Berlin Group will be taken over by Eurowings’ own operational fleet. Eurowings also plans to acquire additional aircraft on the market and hire 1,300 more employees.

Eurowings remains the fastest-growing airline in Europe

“Our strategic modernization initiatives have paid off. We have regained the capacity to invest and grow, in order to play an active role in the consolidation of the European airline market with Eurowings. As the fastest-growing airline in Europe, Eurowings can now expand the range of services it offers customers,” says Carsten Spohr, Chairman of the Board of Directors at Deutsche Lufthansa AG.

Eurowings expands its market position in Germany and Europe

The fleet marketed by Eurowings (program fleet) is projected to grow from 160 to 210 aircraft with the finalization of the transaction and purchase of additional aircraft, with 189 short- and medium-haul aircraft and 21 long-haul aircraft, making Eurowings the third-largest in European point-to-point traffic. The number of flight operations will grow to a total of eight, including the aircraft operated by TUIfly and Sun Express on a wet-lease basis. With its platform concept, Eurowings is oriented towards the integration of flight operations and is predestined to actively advance the consolidation of the European aviation market.

At the same time, the number of employees is expected to grow from currently around 7,000 to roughly 10,000. Eurowings has approximately 50 new short-haul and medium-haul connections planned for the summer of 2018 and – not related to the transaction with Air Berlin – additional long-haul connections in North Rhine-Westphalia, Berlin and Munich. The airline will be growing particularly strongly at these locations. Eurowings is anticipating a total of 80,000 additional flights and 12 million additional passengers per year. This would increase the point-to-point traffic sales volume of the Lufthansa Group by up to 40 percent. Eurowings is expanding its competitive position in the German and European market with this. It will be able to produce at competitive costs with the acquired capacity and generate positive profit contributions as soon as the integration is complete.

The finalization of the transaction is subject to approval by the relevant committees and the competition authorities. Lufthansa expects the transaction to be finalized by the end of the year.

Top Copyright Photo: Niki-The Spirit of Niki (flyniki.com) Airbus A320-214 OE-LEX (msn 2867) ZRH (Rolf Wallner). Image: 922611.

Bottom Copyright Photo: Airberlin (airberlin.com) (LGW) Bombardier DHC-8-402 (Q400) D-ABQI (msn 4264) ZRH (Andi Hiltl). Image: 907142.

Airberlin (airberlin.com) (LGW) Bombardier DHC-8-402 (Q400) D-ABQI (msn 4264) ZRH (Andi Hiltl). Image: 907142.

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Finnair acquires the remaining 60% of Nordic Regional Airlines AB (Norra)

Norra - Nordic Regional Airlines ATR 72-212A (ATR 72-500) OH-ATK (msn 848) HEL (Ton Jochems). Image: 937419.

Finnair has acquired 60% of Nordic Regional Airlines AB (Norra) from Staffpoint Holding Oy (StaffPoint) and Kilco Oy (Kilco). Finnair currently owns 40% of the company, and following the transaction Norra will transfer full ownership to Finnair on an interim basis. The transaction has no impact on Norra’s operations or personnel.

Norra operates Finnair’s domestic and European routes as purchase traffic with a total of 24 ATR and Embraer aircraft. Following the changes in StaffPoint’s ownership base disclosed on 5 October 2017, StaffPoint and Kilco have decided to withdraw from the ownership of Norra. Finnair aims to find a new majority owner for Norra.

”Recent years have shown that the partnership model can be successful in domestic and regional purchase traffic. Our aim is to find a new, industrial partner to develop Norra’s business further with us,” says Finnair COO ­Jaakko Schildt.

The transaction requires approval by the Finnish Competition and Consumer Authority.

Copyright Photo: Norra – Nordic Regional Airlines ATR 72-212A (ATR 72-500) OH-ATK (msn 848) HEL (Ton Jochems). Image: 937419.

 

WestJet partners with The Chopped Leaf

WestJet announced today that it has partnered with fresh casual restaurant, The Chopped Leaf, in a move that will see the restaurant’s whole-food offerings available on board WestJet aircraft.

WestJet has partnered with fresh casual restaurant, The Chopped Leaf, to offer the restaurant's whole-foods on board WestJet aircraft. (CNW Group/WestJet)

“WestJet and The Chopped Leaf have a common goal to break down the ‘airline food’ stigma,” said Rossen Dimitrov, WestJet Chief Guest Experience Officer. “The ingredients in our new menu have been sourced to provide healthier options with quality and taste in mind. We continue to evolve our onboard offerings to meet the needs of our 22 million annual guests.”

“WestJet values are very similar to ours at The Chopped Leaf,” said Nick Veloce, Innovative Food Brands Inc. President & COO parent company The Chopped Leaf. “We want to ensure our customers are delighted with their food experience and take great effort in making sure that each person who visits our locations leaves with a positive experience. This partnership with WestJet is now perfectly aligned to delivering on this wherever our customers are.”

Ingredients in The Chopped Leaf items are made from real food including whole grains, vegetables and meats that contain little to no preservatives. Specific menu items can be viewed in the onboard menu in seat pockets of WestJet flights. The Chopped Leaf meals will be rotated throughout the pre-purchase and buy-on-board menus as more products and variety are developed.

WestJet will offer guests on more than 250 daily flights the ability to pre-purchase or buy-on-board whole bowls, multi-grain sandwiches and salads. The Chopped Leaf products will be available for purchase on flights beginning November 15, 2017 and pre-purchase is available now for flights starting the same day.

In addition to its partnership with The Chopped Leaf, as of September 1, 2017 WestJet is now offering prosecco and a selection of international wines on board.

Boeing, Air India celebrate airline’s 125th delivery

Boeing and Air India celebrated on October 11, 2017 the delivery of the airline’s 125thairplane from Boeing. The airplane is the 27th 787-8 Dreamliner (VT-NAC, msn 36299) for the national carrier.

Air India was an original member of the 787 Dreamliner launch group and took delivery of its first 787-8 in 2012. In all, the airline now operates 27 787-8 Dreamliners, along with 777-200LRs (Longer Range), 777-300ER (Extended Range), and 747-400s.

The Air India 787 Dreamliners offer a host of passengers-pleasing features such as large overhead bins, comfortable reclining seats, LED lighting, cleaner air, larger dimmable windows and an exclusive in-flight entertainment experience to passengers.

Air India operates the 787 Dreamliner to all its destinations in Europe and to other cities in the Gulf, Asia and Australia.

Photo: Boeing.

WestJet officially unveils Canada’s first Boeing 737-8 MAX 8

The Boeing 737-8 MAX 8 for WestJet, delivered on September 29, 2017

WestJet on October 11, 2017 officially unveiled its first Boeing 737-8 MAX 8 aircraft, one of 50 scheduled for delivery in the next four years.

“We are proud to make history as the first Canadian airline to receive the Boeing 737 MAX,” said Ed Sims, WestJet Executive Vice-President, Commercial. “The MAX’s design updates, including Boeing’s Advanced Technology winglets and the Boeing Sky Interior, will contribute to improvements in fuel efficiency and overall guest experience. We look forward to welcoming guests on board our sleek new aircraft along with our signature caring, people-driven service.”

“We worked closely with WestJet to make sure the 737 MAX raises the bar when it comes to efficiency, reliability and the passenger experience,” said Brad McMullen, Boeing’s Vice-President of Sales for the Americas. “This is a great airplane for a great customer, and we’re excited to see WestJet put the MAX into service.”

The aircraft, which has been at WestJet’s Calgary hangar since September 29 for inspections, training and test flights, is the first of 50 Boeing 737 Max scheduled to be delivered through 2027. The aircraft is expected to officially enter service on November 9, 2017, when it operates from Calgary to Toronto (Pearson).

The Boeing 737 MAX is powered by CFM International’s LEAP-1B engines, designed for fuel efficiency and noise reduction. Overall, the aircraft is 14 per cent more fuel-efficient than current 737 Next-Generations and have a reduced operational noise footprint of up to 40 per cent through quiet-engine technology.

WestJet’s 737 MAX 8 aircraft feature a single cabin with 174 seats. Its seating configuration consists of three rows of Plus in addition to 11 more rows with a seat pitch of 34 inches. Further enhancing WestJet’s guest experience, the aircraft comes with Boeing’s new Sky Interior which has features such as customizable LED lighting and new speakers to improve sound and clarity of onboard announcements.

WestJet’s current fleet consists of 117 Boeing Next-Generation 737s, four Boeing 767s and 42 Bombardier Q400 NextGen aircraft. WestJet has also entered into a definitive purchase agreement for 10 Boeing 787-9 Dreamliners with the first aircraft expected to be delivered in January 2019. With one of the youngest fleets in the airline industry, WestJet continues its global growth while controlling operating costs and providing an award-winning guest experience.

Copyright Photo: WestJet Airlines Boeing 737-8 MAX 8 C-FRAX (msn 60510) BFI (Joe G. Walker). Image: 939453.

Delta Air Lines announces a 2017 third quarter profit

Delta Air Lines Boeing 747-451 N667US (msn 24222) LAX (Brandon Farris). Image: 905925.

Delta Air Lines on October 11, 2017 reported financial results for the September quarter 2017. Highlights of those results, including both GAAP and adjusted metrics, are below and incorporated here.

2017 Sept Earnings Graphic

Adjusted pre-tax income for the September 2017 quarter was $1.7 billion, a $182 million decrease from the September 2016 quarter.  Pre-tax income includes a $120 million reduction from the operational disruption following Hurricane Irma that hit the Caribbean, Florida, Georgia and, specifically, Delta’s hub in Atlanta.

“While we faced a number of challenges this quarter, including multiple hurricanes and an earthquake in Mexico, I am proud of how Delta people responded and still delivered an outstanding performance this quarter,” said Ed Bastian, Delta’s chief executive officer.   “Having just completed the busiest summer travel season in our history, we have good momentum, a determined team and a solid pipeline of initiatives to grow earnings and margins.”

To assist customers and employees in affected regions, Delta operated nine humanitarian flights, added more than 12,000 additional seats to impacted cities and shipped more than 600,000 pounds of relief supplies. In addition, Delta and the Delta Air Lines Foundation made $2.75 million in contributions to Red Cross organizations, while Delta employees contributed $250,000 to the American Red Cross and another $250,000 to the Delta Care Fund that directly supports fellow employees.

Revenue Environment

Delta’s operating revenue of $11.1 billion for the September quarter was up 5.5 percent, or $577 million versus prior year, despite a $140 million reduction from Hurricane Irma.

Passenger revenue increased $328 million, including $160 million from Delta’s Branded Fares initiatives.  Passenger unit revenues increased 1.9 percent on 1.6 percent higher capacity.

Cargo revenue increased 11.5 percent, driven by higher volumes in freight and mail.  Other revenue increased 18.4 percent primarily due to higher loyalty revenue and third-party refinery sales.

“Three of four entities reported positive unit revenues, and we see continued opportunity in business yields.  We expect fourth quarter unit revenues to be up two to four percent with all entities in positive territory by year end,” said Glen Hauenstein, Delta’s president.  “Our commercial platform of delivering network efficiency, driving customer innovation and improving customer choice should allow us to deliver sustained positive unit revenue, while maintaining our industry-leading revenue premium.”

2017 Sept Earnings Chart 1
December 2017 Quarter Guidance

For the December quarter, Delta is expecting continued pressure on margins as its unit revenue momentum catches up to the rise in fuel prices that began in July.

2017 Sept Earnings Chart 2

Cost Performance

Adjusted fuel expense4 increased $230 million compared to the same period in 2016 as market fuel prices increased throughout the quarter.  Delta’s adjusted fuel price per gallon for the September quarter was $1.68, which includes $0.03 of benefit from the refinery.

CASM-Ex, including profit sharing increased 4.8 percent for the September 2017 quarter compared to the prior year period which includes pressure from Hurricane Irma-related flight cancellations.  Normalized CASM-Ex, including profit sharing increased 2.6 percent versus the prior year period, driven by employee wage increases, product investments, and accelerated depreciation associated with Delta’s narrowbody fleet initiatives.

Non-operating expense declined $35 million for the quarter due to foreign exchange favorability.

“For the full year we expect non-fuel unit costs to be up approximately four percent as harmonization of profit sharing plans, accelerated depreciation of narrowbody aircraft and pressure from weather-related cancellations have added over a point of pressure to costs from our previous guidance,” said Paul Jacobson, Delta’s chief financial officer.  “However with the productivity from our fleet, maintenance and technology initiatives combined with the determination of the Delta team, we are confident we can deliver our long-term two percent cost target for 2018 and beyond.”

Cash Flow, Shareholder Returns, and Adjusted Net Debt

Delta generated $1.6 billion of operating cash flow and $471 million of free cash flow during the quarter. The company used this cash generation to invest nearly $1 billion into the business for aircraft purchases and improvements, facilities upgrades and technology, as well as $175 million to complete its 49% ownership of Aeromexico.

Adjusted net debt at the end of the quarter was $8.8 billion, up $2.7 billion versus year end as a result of Delta’s March quarter 2017 unsecured debt issuance used to accelerate pension funding.  The company’s unfunded pension liability has declined by $3.8 billion at the same time from $10.6 billion at the end of 2016 to $6.8 billion at the end of the September quarter.

For the September quarter, Delta returned $769 million to shareholders, comprised of $550 million of share repurchases and $219 million in dividends.  The company completed the 2015 $5 billion share repurchase authorization during the September quarter and December quarter purchases will be made under its 2017 $5 billion share repurchase authorization.

“Delta’s improved financial position was recognized with an investment grade credit rating by Standard & Poor’s this quarter – the third agency to grant Delta this status,” Jacobson continued.  “With strong cash flows and a systematic approach to shareholder returns through share buybacks and dividends, we are committed to maintaining our durable franchise.”

September Quarter Results

Special items for the quarter consist primarily of mark-to-market adjustments on fuel hedges.

2017 Sept Earnings Chart 3

End Notes

  1. Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release to the comparable GAAP metric and provides the reasons management uses those measures.
  2. CASM – Ex, including profit sharing: In addition to fuel expense, Delta believes adjusting for certain other expenses is helpful to investors because other expenses are not related to the generation of a seat mile. These expenses include aircraft maintenance and staffing services Delta provides to third parties, Delta’s vacation wholesale operations and refinery cost of sales to third parties. The amounts excluded were $387 million and $247 million for the September 2017 and September 2016 quarters, and $975 million and $845 million for the nine months ended September 30, 2017 and 2016, respectively. Management believes this methodology provides a more consistent and comparable reflection of Delta’s airline operations.
  3. Normalized CASM-Ex, including profit sharing: Delta’s new pilot contract was ratified on December 1, 2016 and was retroactive to January 1, 2016. As a result, Delta recognized $380 million in retroactive wages and other benefits in the December 2016 quarter. On a normalized basis, approximately $140 million of this amount related to the September 2016 quarter. We believe that adjusting this period allows investors to better understand and analyze the company’s core operational performance on a year-over-year basis.
  4. Adjusted fuel expense reflects, among other things, the impact of mark-to-market (“MTM”) adjustments and settlements. MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash received or paid on hedge contracts settled during the period. These items adjust fuel expense to show the economic impact of hedging, including cash received or paid on hedge contracts during the period. See Note A for a reconciliation of adjusted fuel expense and average fuel price per gallon to the comparable GAAP metric.
Copyright Photo: The Boeing 747-400 fleet will be retired by the end of 2017. Delta Air Lines Boeing 747-451 N667US (msn 24222) LAX (Brandon Farris). Image: 905925.

Ex-Virgin Atlantic G-VWOW is now with Virgin Orbit as N744VG “Cosmic Girl”

Ex-Virgin Atlantic G-VWOW

Virgin Orbit is the newest member of the Virgin Group:

“We are the newest member of the Virgin family, and we are thrilled to be here! Our team is hard at work launching the smallsat revolution. Right now, our engineering-driven team are integrating rockets, filling up our launch manifest, preparing for our initial orbital flights, and yes, finding time here and there to build out a full website. While we get that last one finished up, here’s a bit more about our technology, our mission, and our team.”

Virgin Orbit continues;

WE ARE IN THE FINAL STAGES OF TESTING AND PREPARATION FOR LAUNCHERONE, A TWO-STAGE, EXPENDABLE, LOX/RP-1 ROCKET THAT LAUNCHES FROM OUR MOBILE AIR LAUNCH PAD, A DEDICATED 747-400 CARRIER AIRCRAFT, CALLED COSMIC GIRL.

Cosmic Girl will carry LauncherOne to an altitude of approximately 35,000 feet before release for its rocket-powered flight to orbit. Starting each mission with an airplane rather than a traditional groundbased launch pad offers performance benefits in terms of payload capacity, but more importantly, air-launch offers an unparalleled level of flexibility.

LauncherOne will operate from a variety of locations independently of traditional launch ranges—which are often congested with traffic—and will have the ability to operate through or around weather conditions and other impediments that delay traditional launches.

Once released from the carrier aircraft, the LauncherOne rocket fires up its single main stage engine, a 73,500 lbf, LOX/RP-1 rocket engine called the “NewtonThree.” Typically, this engine will fire for approximately three minutes. After stage separation, the single upper stage engine, a 5,000 lbf LOX/RP-1 rocket engine called the “NewtonFour” will carry the satellite(s) into orbit. Typically, the second stage will execute multiple burns totaling nearly six minutes.

At the end of this sequence, LauncherOne will deploy our customers’ satellite (or satellites) into their desired orbit. Both stages of LauncherOne will be safely deorbited, while the carrier aircraft will return to a predetermined airport, where it can be quickly prepared for its next flight.

LauncherOne is capable of delivering 300 kilograms to a 500 kilometer Sun-Synchronous Orbit.

  • TO LEARN ABOUT THE VEHICLE’S CAPACITY TO OTHER ORBITS OR OTHER TECHNICAL STATS, CHECK OUT OUR SERVICE GUIDE.

We have built LauncherOne from a blend of classic, proven techniques and tailored high-tech investments. Both the NewtonThree and the NewtonFour are highly reliable liquid rocket engines designed, tested, and built by Virgin Orbit. We are at the forefront of hybrid manufacturing, automated flight safety systems, composite structures, and ultra-responsive launch operations—cutting edge developments that allow us to offer unparalleled service to the small satellite market.

Videos:

Top Copyright Photo: Virgin Orbit Boeing 747-41R N744VG (msn 32745) (Virgin Atlantic colors) LGB (Michael B. Ing). Image: 939465.

Virgin Atlantic:

Bottom Copy Photo: Virgin Atlantic Airways Boeing 747-41R G-VWOW (msn 32745) LHR (Keith Burton). Image: 911204.

Virgin Atlantic Airways Boeing 747-41R G-VWOW (msn 32745) LHR (Keith Burton). Image: 911204.