TAP swings back to profit
March 22, 2023
TAP Air Portugal has reported a return to annual profitability well ahead of its own expectations after benefiting from surging sales into the final quarter of 2022.. The airline made a €65.6 million ($71 million) net profit in 2022, after a loss of €1.6 billion in 2021. Passenger numbers reached 13.8 million, representing a more than doubling against the prior year and 81% of 2019 levels. Capacity was at 87% of pre-crisis levels and load factor, at 80%, just 0.1 percentage point below the 2019 level. Fuel costs more than tripled to €1.1 billion. TAP says its hedging programme only "marginally" reduced the effect of higher prices, by €85.5 million. The Portuguese government is set to reveal a plan for TAP's privatisation over the coming months, having reportedly carried out pre-market assessments of interest. TAP was renationalised amid the pandemic in 2020, with the state emerging as the majority shareholder of the carrier. Airline groups IAG, Air France-KLM and Lufthansa have all expressed an interest in purchasing TAP.

Thai Airways aims for modest profit in 2023
March 21, 2023
Thai Airways International expects to eke out "at least Bt10 million" ($300,000) in net profit in 2023, on the back of operational and cost measures it has taken as part of its restructuring. The carrier says it has increased flight frequencies, launched new routes and "accelerated the expansion" of its fleet by reactivating aircraft and introducing additional aircraft "to serve the growing demand for travel". Thai says it has cut staff-related expenses and increased performance as an organisation "consistent with changes in the industry to allow Thai to operate sustainably in the long run". It also highlights plans to increase revenue from its aviation-support business, identifying the segment as a "key factor that helps Thai's net profit from normal operations recover and be positive again". Thai's financial estimates also reaffirmed its target for shareholder equity to turn positive in 2024, in line with a 7 April 2024 deadline to reach the milestone to avoid being delisted from the Stock Exchange of Thailand. Despite the optimistic financial projections, the airline cautioned that its net equity "may remain less than zero" by the deadline, and that it may have to apply for a one-year extension of the business reorganisation period. "Thai's financial estimation is based on the assumptions of capital restructuring and other factors which impact business expansion, economic forecast as well as domestic and international aviation industry, which may differ from the actual performance of Thai in the future," it states. Thai reported a net loss of Bt251 million in 2022, versus the Bt55.1 billion in 2021. The core airline made a pre-tax profit of Bt1.25 billion, down from a profit of Bt55.5 billion. The group says it suffered losses from debt restructuring and foreign exchange but also recorded one-time gains from reversal of losses on impairments, and gains on sale of certain assets.

​Lufthansa to launch new subsidiary
March 21, 2023
Lufthansa Group plans to launch a short and medium-haul airline called City Airlines. In a website for the new Munich-based carrier, it states that it will “combine the quality of Lufthansa and the experience of Lufthansa CityLine with the dynamism of a new company.” The airline will use a “modern and economical” Airbus fleet, working technically and administratively with Lufthansa CityLine and the wider group, it adds. Job openings for the new company, including pilots and crew, will be advertised this summer. “As a new airline and the youngest member of the Lufthansa Group, we are thrilled to fly daily from our home base in Munich to major European cities and remote regions,” it states. “At our hub, we also offer fast and convenient connections to the worldwide Lufthansa route network.” Lufthansa Group’s recent 2022 financial results made a brief mention of the new airline to state it is entirely owned by the group, is registered in Munich and was established on 6 April last year. However, group chief executive Carsten Spohr said during a results presentation in March last year that the intention was to create “a second CityLine," given the constraints on the fleet size of its existing domestic and regional carrier. The idea, he continued, is to extend its low cost production and feed passengers into Lufthansa's hubs, potentially also providing employment for the roughly 250 pilots of Germanwings that would otherwise be made redundant. This will create "critical mass from the beginning," with the pilots enjoying the same collective labour agreement, said Spohr. "We needed the union to extend CityLine, we have no approval so we need to make a new AOC."


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