Tag Archives: DHC8100

The SAS Group receives approval to sell Wideröe

The SAS Group’s (Scandinavian Airlines-SAS) (Stockholm) sale of Wideröe Flyveselskap AS (Bodo and Oslo) has been approved by the Norwegian competition authority. The closing of the sale is expected to take place in September 2013.

The cost reductions and the divestments performed in accordance with the 4XNG plan will lead to an improvement in SAS financial position and liquidity.

According to the group, “In November 2012, SAS renegotiated its revolving credit facilityof MEUR 366 to an amortizing credit facility of MSEK 3,500, divided into two tranches with separate conditions for drawdown and with a maturity in March 31, 2015. Lenders are SAS four majority owners, including the Scandinavian states and a syndicate of seven merchant banks, all participating on the same terms.

In connection with the divestment of Wideröe, the amortizing credit facility has been re-negotiated and amended. The actions under the 4XNG plan have made it possible for SAS to reduce the facility to MSEK 2,000. The facility is divided into two tranches with separate conditions for drawdown, one with a maturity in June 1, 2014 one with a maturity in March 31, 2015. The facility remains undrawn.”

Copyright Photo: Ton Jochems/AirlinersGallery.com (please click on the photo for the full size view). All others by Wideroe. Bombardier DHC-8-103 LN-WIA (msn 359) and crew await the next group of passengers at Trondheim, Norway.

Wideroe: AG Slide Show

Video: A typical approach and landing at Hammerfest, in northern Norway:

Copyright Photos: Wideroe. A typical approach at a rural Norwegian airport.

Wideroe Approach (Wideroe)(LR)

Wideroe FA (Wideroe)(LR)

Current Wideroe Route Map:

Wideroe 6:2013 Route Map

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Hawkair to start the Terrace-Prince George-Calgary route on June 3

Hawkair Aviation Services (Terrace, BC) will start the Terrace-Prince George-Calgary route on June 3. The new route will be operated as a Central Mountain Air (Smithers, BC) flight using Hawkair’s Bombardier DHC-8s.

Hawkair 5-2013 Route Map

Copyright Photo: Ton Jochems/AirlinersGallery.com. Hawkair introduced this new look in June 2012. The unique tail design was created by Roy Henry Vickers.

Hawkair logo

Video:

Hawkair: AG Slide Show

Piedmont Airlines’ pilots ratify the new contract

Piedmont Airlines (US Airways Express) (2nd) (Salisbury), a wholly-owned subsidiary of US Airways (Phoenix), represented by the Air Line Pilots Association (ALPA), have voted to ratify a new five-year collective bargaining agreement that was reached on February 1. The new contract was ratified by Piedmont Airlines’ 375 ALPA-represented pilots who are based in Charlottesville, Virginia.; Harrisburg, Pennsylvania.; New Bern, North Carolina; Roanoke, Virginia and Salisbury, Maryland.

Copyright Photo: Bruce Drum. Piedmont Airlines’ (2nd) Bombardier DHC-8-102 N807EX (msn 292) taxies to the runway at the Charlotte-Douglas International Airport hub.

Piedmont Airlines: AG Slide Show

Map: US Airways keeps the historic name and logo in play with Piedmont although the aircraft are branded as US Airways Express (soon American Eagle). Piedmont operates the regional feeder routes for US Airways in the eastern United States mainly serving the Philadelphia and Charlotte hubs:

Piedmont (2nd) 3:2013 Route Map

 

Piedmont Airlines and the Air Line Pilots Association (ALPA) reach a tentative agreement on a new contract

Piedmont Airlines (2nd) (US Airways Express) (Salisbury), a wholly-owned subsidiary of US Airways (Phoenix), has announced that it has reached a tentative agreement with the Air Line Pilots Association (ALPA), which represents the airline’s 375 pilots. The tentative agreement is subject to language being finalized, which is expected to occur over the next few weeks.

Copyright Photo: Bruce Drum. Piedmont Airlines’ Bombardier DHC-8-102 N936HA (msn 145) taxies to the runway at the Charlotte hub.

US Airways Express-Piedmont Airlines (2nd): AG Slide Show

SAS to implement a new “Final Call” austerity program, including eliminating 800 jobs, reduced wages and pension obligations and an asset sale including the sale of Widerøe

Scandinavian Airlines-SAS (Stockholm) has announced a new restructuring plan to achieve profitability including selling some of its assets including subsidiary airline Widerøe’s Flyveselskap AS (Bodo and Oslo) in Norway. The airline wants to reduce costs by another $440 million annually.

The company issued several statement this morning including this:

A new comprehensive plan will pave the way for a new, strong and competitive SAS. The plan needs to be fully implemented and new collective agreements must be signed in a very short space of time in order for SAS to have access to necessary funding.

This plan will give SAS a fresh start and will create a completely new platform for the future. It is a profound plan that demands a lot from the entire organization, but that needs to be implemented to allow the company to adapt to the current market conditions. It will enable SAS to compete effectively in the expanding private travel market, while retaining its strong position in the important business travel market. SAS will therefore be able to continue to offer its 27 million passengers a superior network and competitive travel services.

This plan will ensure that the conditions in all of the collective agreements are fully in line with the market, it will eliminate complexity by centralizing and reducing administration, and it will make SAS more flexible by outsourcing more work to external suppliers.

SAS’s banks and main shareholders have given this plan their full support and will make credit available to SAS on equal terms. However, this support is conditional upon SAS delivering fully to this plan and upon the new collective agreements being signed in a very short space of time.

The plan will result in total annual savings of around SEK 3 billion and will also see some of SAS’s assets being sold at a value of around SEK 3 billion. This will make SAS less dependent on external lenders in the future.

The Board has given its unanimous support to this plan and recommends that all of the company’s employees support it as well. The Board will meet again on Sunday November 18, 2012 to decide if the conditions for the implementation of the plan exist.

“This truly is our ‘final call’ if there is to be a SAS in the future. We have been given this final chance to make a fresh start and to carry on these fundamental changes. I know that we are asking a lot of our employees, but there is no other way. I hope that our loyal and dedicated employees are willing to fight for the survival of SAS and for our jobs. If we do this, we will be able to invest in new aircraft in the long term and to further develop our operations. This will ensure that SAS will continue to play an important role for millions of people in Scandinavia in the future,” says Rickard Gustafson, President and CEO of SAS.

Internal meetings will be held today and over the next few days to inform SAS employees of the plan and the requirements contained in the new agreements.

The 4 Excellence Plan, which was announced in September 2011, is on target to deliver approximately 5 bn SEK in EBT effect. Despite this success, SAS foresees the need for further improvements to secure its long-term competitiveness. In a challenging environment for airlines, SAS must take decisive action to address its cost structure, improve its capital structure on a long-term basis, and takesteps to reduce the negative impact on equity in 2013 due to changed pension accounting regulations.

4 Excellence Next Generation to improve profitability

The Board of SAS has approved the 4 Excellence Next Generation (4XNG) plan to address the issues facing SAS. The 4XNG plan will improve EBT by approximately 3 bn SEK on an annualized basis and improve the overall cost flexibility through:

· New union agreements for personnel
· Centralization of administration functions
· Reduction of compensation to market levels
· New pension terms
· Outsourcing of Call Centers and Ground Handling

1.5 bn SEK in improved EBT is expected to be realized in the financial year 2012/13, with most of the remaining annualized benefits realized in the financial year 2013/14. The plan is self-financing and requires no new capital.

The restructuring cost and one-off implementation costs will be approximately 1.5bn SEK, whereof 0.9-1.0 bn SEK in financial year 2012, and will be fully funded from expected savings.

New pension terms will mitigate the need for new equity

As a result of the revised IAS19, that will be applied by SAS as of November 2013, the SAS Group’s shareholders’ equity will be reduced when all unrecognized deviations from estimates and plan amendments will be recognized in full in shareholders’ equity. The 4XNG plan will result in a transition, for the majority of the employees, from the current defined benefit plans to defined contribution plans.  These changes will mitigate the negative impact on equity by an estimated 2.8 bn SEK, reduce defined benefit obligations by 19 bn SEK (58%) and reduce volatility in future earnings resulting from changes in pension assumptions. These pension changes, together with the other actions announced today, provide SAS with the confidence that it will retain a strong equity position.

Asset Disposal and Financing Plan to increase liquidity

The Plan involves a commitment to complete an asset disposal and financing plan, which totals approximately 3 bn SEK in potential net cash proceeds. The proceeds will improve SAS’ internally generated financial preparedness and allow SAS to further reduce its financial leverage. The asset disposal and financing plan includes:

· Widerøe, a subsidiary regional airline in Norway
· Airport realated real estate interests;
· Ground handling; and
· Aircraft engines

In addition, SAS will also actively consider opportunities to realize further value from its financed aircraft portfolio and other assets.

3.5 bn SEK Revolving Credit Facility conditional on signed union agreements and parliamentary approvals

SAS has reached an agreement to increase its existing 3.1 bn SEK revolving credit facility to 3.5 bn SEK and extend the term of the facility to 31 March 2015. SAS’s bilateral facilities in the amount of 1.25 bn SEK will be cancelled as these facilities provide limited benefit at a significant financial cost.

This new revolving credit facility alongside SAS’ cash resources will provide the required financial preparedness while it completes its asset sales and realizes the full benefits from its cost reduction plans.

The new revolving credit facility is being provided by seven current lenders and SAS’ core shareholders (The Kingdom of Denmark, the Swedish State, the Kingdom of Norway and KAW) on equal terms. The availability of the new revolving credit
facility is subject to final documentation, parliamentary approval where required, and it is conditional on signed union agreements that are a central and integral part of the 4XNG plan.

SAS has initiated discussions with its relevant unions and will initiate a broad communication effort towards its employees to obtain their consent to the changes in the union agreements within a very short time.

Oddly SAS also reported a third quarter net profit of $64 million.

Read the local media report by The Copenhagen Post: CLICK HERE

Copyright Photo: Ton Jochems. Wideroe’s Bombardier DHC-8-103 LN-WIO (msn 417) waits for its passengers at Trondheim above the Arctic Circle in Norway.

Scandinavian Airlines-SAS: 

Wideroe: 

 

Jazz Aviation LP announces tentative agreement with its Maintenance and Engineering’s union

Jazz Aviation LP (Halifax) has announced it has reached a tentative labor contract with its Maintenance and Engineering employees represented by the Canadian Auto Workers (CAW) Local 2002.

The agreement is subject to a ratification vote by union members and covers approximately 885 CAW-represented Maintenance and Engineering employees at Jazz.

Copyright Photo: TMK Photography.

Piedmont Airlines’ fleet and passenger service employees ratify the contract

Piedmont Airlines (2nd) (subsidiary of US Airways) (US Airways Express) (Salisbury) fleet and passenger service employees have voted to ratify the new collective bargaining agreement previously announced on May 31. The new four and a half year agreement was ratified by Piedmont Airlines’ more than 3,000 employees who are represented by the Communications Workers of America (CWA).

Copyright Photo: Bruce Drum.

US Airways Express-Piedmont Airlines: