Corporate Travel News

Australia's Government will contribute AUD3 million (USD2.35 million) to the AUD6.7 million (USD5.25 million) project to construct new roads serving Ballina Byron Airport, according to Ballina Shire Council Mayor David Wright and Federal Member for Page Kevin Hogan (The Echo/The Northern Star, 16-Oct-2017). Ballina Shire Council will contribute the remaining funds. The project involves extending two existing access roads and constructing the new 'Airport Boulevard', which is expected to open 30 hectares of industrial land near the airport. The project is scheduled to be complete in Sep-2018.

Hobart Airport will review its AUD25 million (USD19.6 million) terminal redevelopment plan in response to stronger than expected growth in arrivals and new services (The Mercury, 16-Oct-2017). Passenger numbers increased 34% since 2012, exceeding the airport's expectations. The airport is making arrangements to ensure departures and arrivals areas are able to meet demand over the 2017/18 summer period. The airport stated: "This is a complex redevelopment, compounded by an unprecedented growth in the numbers of the travelling public as well as balancing the need to continue to operate the airport while undertaking these works. We anticipate this fantastic growth will continue into the future, and so have taken the opportunity to revisit our terminal plans, mindful of our forecast demand, and are continuing to negotiate these plans with our airline partners. Our aim is to provide sufficient space and facilities to provide for this ever-growing demand". The terminal redevelopment is the final part of a seven year, AUD100 million (USD78.4 million) investment, which is on track to be complete by 1H2018.

Lufthansa Group submitted (16-Oct-2017) a confidential offer expressing interest in establishing a "NewAlitalia". Lufthansa expressed interest in Alitalia's global network traffic and European and domestic point-to-point business. The offer also includes proposals for a newly structured Alitalia with a focused business model ("NewAlitalia"). [more - original PR]

Fiji Airways stated the Boeing 737-700 involved in a cabin depressurisation incident on 10-Oct-2017 has not yet returned to service, with executive GM corporate affairs Shaenaz Voss.stating: "Our engineering teams are working on the aircraft with Boeing to determine the cause of the fault and all associated factors before undertaking a thorough rectification program to return it to serviceability" (Fiji Times, 17-Oct-2017). "The aircraft will only return to commercial service until that process is concluded and it's cleared for operations by the Fiji Airways and Boeing teams", he added.

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]

Air New Zealand reported (16-Oct-2017) traffic highlights for Sep-2017:

• Passengers: 1.6 million, +4.4% year-on-year;
  • Short haul: 1.4 million, +5.2%;
  • Domestic: 1.0 million, +6.4%;
  • Tasman/Pacific: 356,000, +1.9%;
  • Long haul: 194,000, -1.0%;
  • North America/UK: 118,000, -0.8%;
  • Asia/Japan/Singapore: 76,000, -1.4%;
• Passenger load factor: 82.5%, -1.8ppts;
  • North America/UK: 86.7%, -1.2ppts;
  • Long haul: 83.2%, -3.3ppts;
  • Tasman/Pacific: 82.6%, -0.9ppt;
  • Short haul: 81.6%, +0.1ppt;
  • Domestic: 79.9%, +2.0ppts;
  • Asia/Japan/Singapore: 77.7%, -6.5ppts;
• Year-to-date RASK: +0.8%;
  • Short haul: +4.6%;
  • Long haul: -5.0%. [more - original PR]

Morocco's Office National Des Aeroports (ONDA) CEO Zouhair Mohammed El Aoufir stated (16-Oct-2017) the agency is working to develop commercial activity at Moroccan airports through various initiatives, including:

• Development or redevelopment of commercial spaces;
• Diversification of airports' commercial offerings;
• Adoption of a new management model. [more - original PR - French]

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]

SalamAir CEO Mohamed Ahmed said the airline plans to expand its fleet from three to 20 aircraft within five years (Gulf News, 14-Oct-2017). The airline expects to receive three or four aircraft in 2018 and four to six p/a from 2019. The carrier will expand its network to about 30 short and medium haul destinations in the Middle East, South Asia and CIS over the same period. The carrier is considering adding services to Bangladesh, Egypt, India, Iran, Iraq, Khartoum, Pakistan and Saudi Arabia. The airline is considering all aircraft options, including Boeing 737s, and will "proceed with the best deal", according to Mr Ahmed.

Deutsche Lufthansa AG outlined (13-Oct-2017) expansion plans for Eurowings following an agreement to acquire airberlin subsidiaries Luftfahrtgesellschaft Walter mbH (LGW) and NIKI. Highlights include:

• 1700 LGW and NIKI employees to be transferred to Eurowings;
• 50 aircraft to be transferred including Bombardier Dash 8 Q400 and Airbus A320 equipment;
• Plans to to acquire additional aircraft on the market and hire 1300 more employees;
• Fleet projected to grow from 160 to 210 aircraft including 189 short and medium haul aircraft and 21 long haul aircraft;
• Eurowings will be third largest carrier in European point-to-point traffic following expansion;
• Flight operations will increase to eight, including the aircraft operated by TUIfly and Sun Express on wet lease basis;
• Employees forecast to increase from 7000 to approximately 10,000;
• Eurowings has up to 50 new short and medium haul routes planned for launch in summer 2018 unrelated to the acquisition of LGW and NIKI.

Deutsche Lufthansa AG chairman Carsten Spohr commented: "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". [more - original PR]