ARC NEWS
Alaska Air Group sells A321neo fleet to American Airlines
October 23, 2023
Alaska Air Group has reached an agreement to sell its 10 Airbus A321neos to mainline rival American Airlines. Aircraft sales will begin in the fourth quarter of 2023, Alaska says in a 19 October announcement. The sale completes the transition to an all-Boeing fleet for the Seattle-based carrier, which retired its remaining A321neos in September, after stating in March 2022 that the aircraft would exit the fleet before the end of 2023. In March, it was revealed that Alaska was in discussions to buy the 10 Airbus A321neos in its fleet from lessors and then resell the aircraft to a single buyer. At the time, it was also considering selling the aircraft to a lessor. Alaska Air Group inherited the aircraft from its 2016 acquisition of Virgin America. Prior to that deal Alaska Airlines operated only Boeing 737s. Matt Grady director of investor relations says on a 19 October earnings call that the transaction is "probably one of the more complicated ones that I've seen in my 25 years of doing this". "But our thinking on it is really simple," he adds. "We've been public in that there's six to eight years left on these above-market leases that Alaska acquired as part of the Virgin transaction. And our objective was just to find a transaction and build it that economically offset those remaining obligations." Emily Halverson, vice-president, finance, controller and principal accounting officer, says Alaska has reported special charges on its income statements over the past 12 to 18 months in relation to these transactions. "Cash-wise, we're about two-thirds of the way through the cash that we're going to incur with this. Of course, as we've purchased the lease or the planes from the lessors and then we sell the planes to American, there will be cash inflows and outflows," she said on the same earnings call. "So about two-thirds of the $300 million to $350 million total cash exposure that we've shared with you guys previously, we've already incurred that. And then the remaining one-third will happen over the next two quarters."


Pilots at Qantas unit push back strike plans
October 23, 2023
Pilots at Qantas's Network Aviation unit have withdrawn plans to strike for a second time on 24 October and given the airline an assurance that they will not take further industrial action until after 27 October. The Australian Federation of Air Pilots states that it has withdrawn the planned strike "to give Qantas subsidiary Network Aviation every opportunity to come to its senses". Schedules data indicates that if the strike had gone ahead, it would have impacted 56 scheduled services to ports including Broome, Paraburdoo and Karratha, as well as closed charter services for resources clients, including Rio Tinto, Chevron and Fortescue Metals Group. “If the company’s management is serious, it will spend next week focusing on listening and responding to its pilots to allow a resolution to be reached,” says AFAP senior industrial officer Chris Aikens. “However, if Qantas does not take this opportunity to reach an agreement that is acceptable to both parties, then we have no other option but to escalate with further [protected industrial action].” The union and Qantas have been at loggerheads over a pay increase for the pilots, which operate most of Qantas's regional services in Western Australia. Reports indicate that the union is pushing for major pay increases for pilots which are operating under an agreement that expired in 2016. Fleets data shows that Network operates 15 Fokker 100s and 15 Airbus A320ceos. The withdrawal of the strike comes a day after Qantas terminated its plan to take over fellow operator Alliance Aviation Services, months after Australia's competition regulator announced that it would oppose the acquisition.


Ryanair loses four pandemic-era state-aid challenges
October 20, 2023
Ryanair has lost four separate legal cases contesting the decisions to approve state aid to European airlines through the pandemic. The EU General Court ruled four times on 18 October that the approval of state aid to former Italian carrier Alitalia, plus Air Baltic, Brussels Airlines and Nordica, were valid, dismissing Ryanair’s various challenges. The low-cost airline was ordered to pay the defendants’ costs. In each case, Ryanair was seeking action against the European Commission, the state providing the aid, and, in the case of Air Baltic and Brussels Airlines, the carriers themselves. It had argued that aid amounted to unfair subsidies and was anti-competitive, with the Commission having failed to follow proper procedure or fully examine the implications of the financial support being provided. It therefore sought to have the court annul the approvals. This was rejected by the Commission who argued, in each case, that the airline in question played an important role in their national economy, and therefore were sole beneficiaries of state aid that had met legal and procedural benchmarks.


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