ARC NEWS
JetBlue-Spirit merger decision 'a positive for us': Alaska chief
March 13, 2024
A US district court judge's rationale for blocking JetBlue Airways from acquiring Spirit Airlines bodes well for Alaska Airlines' proposed acquisition of Hawaiian Airlines, in the view of Alaska chief executive Ben Minicucci. In his 16 January ruling, Judge William Young of the Massachusetts District Court permanently blocked the JetBlue-Spirit merger, stating: "Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one's for you." Young ruled in favour of the US Department of Justice, which had argued that New York-based JetBlue's acquisition of Spirit would reduce ultra-low-cost fare options – in particular, those offered by Spirit – and incentives for airlines to compete, including on 40 routes operated by both carriers. "I think it's a positive for us," Minicucci said on 12 March during the JP Morgan Industrials Conference, in reference to the court decision on JetBlue-Spirit. "The judge was clear in saying that he's blocking the deal because of the elimination of an ultra-low-cost carrier that has benefit to consumers in the country. And our deal [with Hawaiian] is nowhere near that. Our deal is completely different. We're actually the low-cost, low-fare airline acquiring Hawaiian." In December 2023, Hawaiian Airlines parent Hawaiian Holdings and Alaska parent Alaska Air Group agreed to combine under a $1.9 billion deal set to close within 12-18 months. Minicucci says Alaska and Hawaiian have "very few overlap markets", putting the number at 12. A merger would "give Hawaiian residents three times more choice than they have today to connect to the continental US, [and] more choice internationally with our Oneworld partnership", he asserts. He adds that the mayors of the four largest Hawaiian islands support the deal. Additionally, Minicucci expects that US regulators will view favourably Alaska's reputation for serving remote communities and the resulting brand loyalty. The DOJ will, he posits, likewise keep in mind Alaska's commitment to retaining the target's brand, which was not the case with JetBlue and Spirit. "We'll have a dual-brand exterior with one platform in the background, which is something we're working through. [There are] going to be a lot of questions how we're going to pull that off, but I think it's a unique way of us positioning this acquisition versus the Spirit and JetBlue [deal]. So I hope that the merits of the case will shine through." The carriers' fleets have very little overlap, although on an operational level this would seem not to be a positive. Alaska's in-service fleet is entirely comprised of Boeing 737s, while Hawaiian operates a mixed fleet. Alaska is flying 165 737NGs and 65 Max jets, and has 80 Max aircraft on order, Cirium fleets data shows. It is storing 14 A320s, remnants of its 2016 acquisition of Virgin America. Minicucci notes that Alaska has 47 Max deliveries scheduled over the next two years", but adds. "We're not going to get 47 deliveries over the next two years – it's obvious. We have 23 deliveries in 2024 – 10 airplanes are built, awaiting delivery. Of course, Boeing is under FAA scrutiny, [and there's] the DOJ investigation. It's going to take a while for us to get those 10 airplanes." Of the Virgin America acquisition, he remarks that the "rat is through the snake", elaborating thus: "We had 72 Airbus [aircraft] that we [received] from the Virgin acquisition that we went single fleet. That's 72 extremely bad leases that we [had] to get out of, and then purchase replacement Max airplanes. So that was massive capital that went through in the last couple of years." Hawaiian's fleet comprises 25 A330s, 23 717s, 18 A321s and one 787, The airline has another 11 787s on order. Minicucci says that in the case of the Hawaiian merger, there is "not that sense of urgency" to pursue a single-fleet plan as there had been with the Virgin America acquisition. "Virgin did not own any airplanes, or maybe just a handful with very onerous leases," he says. "Hawaiian owns two-thirds of their fleet, 40% of which are unencumbered. So: totally, totally different. That gives us a lot more flexibility in what to do. Is there opportunity for optimisation and rationalisation? Yes." He adds: "The reason we went single fleet [with Virgin] is, we had two aircraft types performing the same mission in the lower 48 [states]… With Hawaiian, they have different airplanes performing different missions – inter-island, they have some domestic long-haul international, and now they just got their first 787. "So we have to look at that and just really understand which airplanes play a certain role for us. And then we're going to rationalise. But we've got time. The good thing is they own most of their fleet, and it gives us more opportunity than we did with Virgin."


Transavia to serve Granada
March 12, 2024
Transavia plans to launch flights from Amsterdam's Schiphol airport to Granada in Spain. The carrier says it will serve the route twice-weekly from 30 September. Schedules data shows the Dutch low-cost arm of KLM is scheduled to operate a network of 104 routes in March.


Air NZ pauses Auckland-Chicago service over Trent 1000 issues
March 12, 2024
Air New Zealand will pause its Auckland-Chicago nonstop service for nearly seven months from 31 March to 25 October due to “ongoing challenges with the availability of serviceable Rolls-Royce Trent 1000 engines” that power its Boeing 787s. The airline says that it currently has “up to three aircraft unavailable for an extended period”, prompting it to review flight schedules, in a 12 March market announcement. Fleets data shows that Air New Zealand has a fleet of 14 787-9s powered by Trent 1000 engines, out of its wider fleet of 104 in-service and five stored jets. It has outstanding orders for two more 787-9s and six 787-10s, both powered by General Electric GEnx-1B engines that are set to start delivering from June 2025 onwards. Air New Zealand operates about “two to three weekly services” on Auckland-Chicago in April and June, as part of its schedule of “up to 35 [weekly] flights” to six ports across Canada and the USA, including Houston and New York. “It was a difficult decision to make, but one that results in the least number of customers impacted,” Leanne Geraghty, the airline’s chief customer and sales officer says. The airline does not expect the paused service to impact its full-year guidance for the 2024 financial year of NZ$200-240 million in pre-tax profit. This is not the first service suspension due to engine issues. In November 2023, the airline indicated it would suspend services to Hobart and Seoul from early April due to inspections required on its Pratt & Whitney PW1000G-JM and Trent 1000 engines, which power its Airbus A320neo and A321neo and 787 fleets. The carrier said then it will consolidate flying on transtasman and Pacific routes upon further understanding the inspections required on the geared turbofan engines powering its 17 A320neos and A321neos. The airline in February said the inspections on its PW1000G-JM engines would see “up to five… aircraft out of service at any one time across the next 18 months at least”.


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