Corporate Travel News For The Americas

Air France-KLM reported (16-Oct-2017) it expects to take delivery of 15 new Boeing 787s by the end of the winter 2017/18 season. KLM is slated to receive 10 787s to serve 18 destinations, including Dubai, Mauritius, San Francisco, New York, Washington, Minneapolis, Calgary, Rio de Janeiro, Bogota, Cartagena, San José, Osaka, Colombo, Mumbai, Beijing, Hangzhou, Xiamen, Chengdu and Shanghai. Air France is slated to receive five 787s to serve seven destinations, including Cairo, Toronto, Boston, Panama City, Sao Paulo and Abidjan. [more - original PR]

Etihad Airways plans to reduce Abu Dhabi-Los Angeles frequency from daily to five times weekly, effective 15-Jan-2018 to 30-Apr-2018, according to a 16-Oct-2017 GDS display. The airline will replace Boeing 777-200LR with 777-300ER equipment on the service during the same period.

Airbus and Bombardier signed (16-Oct-2017) an agreement to become partners in Bombardier's C Series aircraft programme. Details include:

• Agreement scope: Airbus will provide procurement, sales and marketing, and customer support expertise to the C Series Aircraft Limited Partnership (CSALP). According to Bombardier and Airbus, the C Series is highly complementary to Airbus' existing single aisle aircraft portfolio, which focuses on the higher end of the single aisle business;
• Interest: Airbus will acquire a 50.01% interest in CSALP. Bombardier and Investissement Québec (IQ) will own approximately 31% and 19% respectively;
• Impact on Canadian aerospace sector: Airbus affirmed it is strongly committed to Canada and its aerospace sector with Canadian suppliers extending their access to Airbus' global supply chain. Airbus and Bombardier expect the partnership will "strengthen and accelerate the C Series' commercial momentum", by leveraging Airbus' supply chain expertise. CSALP's headquarters and primary assembly line and related functions will remain in Québec, with the support of Airbus' global reach and scale. Airbus' global industrial footprint will expand with the Final Assembly Line in Canada and additional C Series production at Airbus' manufacturing site in Alabama, US;
• CSALP funding plans: Bombardier will continue its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of USD350 million, and during the second and third years following the closing up to a maximum aggregate amount of USD350 million over both years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%, with any excess shortfall during such periods to be shared proportionately amongst Class A shareholders;
• Call and put rights: Airbus will benefit from call rights in respect of all of Bombardier's interest in CSALP at fair market value, with the amount for non-voting participating shares used by Bombardier capped at the invested amount plus accrued but unpaid dividends, including a call right exercisable no earlier than 7.5 years following the closing, except in the event of certain changes in the control of Bombardier, in which case the right is accelerated. Bombardier will benefit from a corresponding put right whereby it could require that Airbus acquire its interest at fair market value after the expiry of the same period;
• CSALP board of directors: Will initially consist of seven directors, four of whom will be proposed by Airbus, two of whom will be proposed by Bombardier, and one of whom will be proposed by IQ. Airbus will be entitled to name the CSALP chairman;
• Warrants: Subject to obtaining the required approval from the Toronto Stock Exchange, the transaction provides for the issuance to Airbus, upon closing, of warrants exercisable to acquire up to 100 million Class B shares of Bombardier, at an exercise price per share equal to the USD equivalent of CAD2.29 (USD1.80), which represents the volume weighted average price of the Class B Shares over the five trading days ending 13-Oct-2017. The warrants will have a five year term from the date of issue, will not be listed and will provide for market standard adjustment provisions, including in the event of corporate changes, stock splits, non-cash dividends, distributions of rights, options or warrants to all or substantially all shareholders or consolidation. The issuance of the warrants and their terms were negotiated between Bombardier and Airbus at "arm's length" and will not materially affect control of Bombardier. Security holder approval will be required under Toronto Stock Exchange rules due to the fact that the warrants will be issued later than 45 days from the date upon which the exercise price was established. Such approval is expected to be obtained by way of written consent of shareholders holding more than 50% of the voting rights attached to all of Bombardier's issued and outstanding shares;
• Approvals: The transaction has been approved by the boards of directors of both Airbus and Bombardier, as well as the Cabinet of the Government of Québec. The transaction remains subject to regulatory approvals, as well as other conditions usual in this type of transaction. There are no guarantees that the transaction will be completed and that the conditions to which it is subject would be met. Completion of the transaction is currently expected for 2H2018. [more - original PR]

OAG released (16-Oct-2017) OTP star ratings for Oct-2017. Highlights include:

• Safair topped OAG's list of 5 star airlines having achieved the highest OTP of any qualifying airline with 94.9% of services on time over the 12 months to Sep-2017;
• Iberia was the largest airline to feature among those with 5 star ratings, achieving average OTP of 87.3% for over 200,000 services. SAS, KLM and Vueling were the largest airlines in Europe to achieve 4 star ratings;
• In North America, Hawaiian Airlines achieved a 5 star rating while Delta Air Lines achieved a 4 star rating;
• Jetstar Asia was the only Asia Pacific carrier to achieve a 5 star rating, while three airlines in Latin America - Copa, LATAM Airlines Ecuador and Sky Airline - achieved 5 star ratings;
• Nine Japanese airports were awarded 5 star ratings with Tokushima Airport and Kochi Airport achieving the highest average OTP of any airport;
• In Latin America there were 12 5 star airports, including Tocumen International Airport and Brasilia International Airport. [more - original PR]

ForwardKeys CEO Olivier Jager, speaking at the CAPA-ACTE Global Summit, stated (13-Oct-2017) the Chinese traveller is "very resilient", however the US travel ban's associated uncertainty impacted travel from China to the US. Mr Jager stated a lack of clarity around the ban could have made Chinese travellers suspect more difficult visa conditions, or feel "unwelcome". Mr Jager stated travellers from China "travel everywhere they're allowed to", while confirming large scale growth in certain destinations after visa regimes were relaxed. Moldova, Serbia and Tunisia saw Chinese traveller increase of 253%, 183% and 240%, respectively, following the relaxation of visa regimes.

Qantas announced (13-Oct-2017) its Los Angeles based aircraft will be powered by biofuel from 2020, reducing the airline's carbon emissions on its services operating between the US and Australia. Over the next ten years, the airline will purchase 30 million litres of renewable jet fuel p/a from SG Preston. The fuel will be used by Qantas' aircraft operating from Los Angeles International Airport to Australia and follows the Qantas Group's successful domestic biofuel trial flights in 2012. The fuel consists of 50% renewable jet fuel produced from non-food plant oils, blended with 50% traditional jet fuel. Compared to standard jet fuel, the biofuel emits half the amount of carbon emissions per gallon over its life cycle. Qantas International and Freight CEO Gareth Evans said the commercial biofuel agreement is the first of its kind in Australian aviation history. [more - original PR]

CAPA - Centre for Aviation executive chairman Peter Harbison, speaking at the CAPA-ACTE Global Summit, stated (12-Oct-2017) "super connectors" in the Middle East and Turkey are "losing steam", after "transforming aviation" over the last 20 years. Mr Harbison stated an average growth estimate of 13% p/a over the last 10 years slowed to just 0.5% in 2017. Mr Harbison said seat growth at Emirates, Etihad Airways, Qatar Airways and Turkish Airlines increased 159%, 210%, 253% and 241% respectively, over the past decade, slowing to 2.8%, -3.6%, 0.8% and 1.8% in 2017. He also pointed to investment strategies of the carriers. Emirates grew organically since its inception, while Etihad formed partnerships that "in a lot of ways didn't work" and is cutting back on expansion as a result. Mr Harbsion said Qatar Airways is a "victim of some unfortunate circumstances", but still "pretty resilient" with investments in IAG and LATAM. Turkish Airlines is also cutting back on expansion due to "troubles at home".

TAP Portugal attributed (11-Oct-2017) strong growth on Brazil and US services to partnerships with Azul Linhas Aéreas Brasileiras, Gol Linhas Aereas, jetBlue and United Airlines. TAP reported its codeshare with Azul "brought" 65,000 passengers to TAP from Jan-2017 to Jul-2017. TAP's codeshare with Gol contributed 47,000 passengers. jetBlue contributed 35,000 while United accounted for 15,000 passengers during the period. [more - original PR - Portuguese]

Finnair repurchased (11-Oct-2017) the remaining equity stakes in Nordic Regional Airlines (Norra) from StaffPoint Holding Oy (StaffPoint) and Kilco Oy, subject to regulatory approval. StaffPoint and Kilco previously held 45% and 15% stakes respectively. Finnair director of operations Jaakko Schildt stated: "Our goal is to find a new, industrial partner to develop Norra's operations with us... the past few years have shown that the joint venture model works well for the domestic and Nordic markets". Norra operates a fleet of 24 ATR and Embraer aircraft serving Finnish domestic and Nordic and Baltic regional markets. [more - original PR - English] [more - original PR - Finnish]

Air New Zealand chief revenue officer Cam Wallace reported (11-Oct-2017) the carrier's operation to Houston is "unlocking huge demand for travel to New Zealand from across the South, Mid-west and Mid-Atlantic regions". Annual arrivals to New Zealand from Texas have increased 21% year-on-year, and are up 25% from New York. Houston also offers New Zealand travellers better onward connections to US East Coast destinations like New York, Boston and Miami. Air New Zealand recently launched its global marketing campaign 'A Better Way to Fly in North America', marketing to Americans and Canadians to travel with the airline to New Zealand and Australia. [more - original PR]