HNA Group completes restructuring
April 26, 2022
HNA Group has completed its restructuring after more than two years of work that began in 2020, the Chinese conglomerate said on its official WeChat on 23 April. A joint working group was set up on 29 February 2020 to handle the restructuring and that risk disposal work "has basically been completed", the company said in the post Saturday on the popular Chinese social media platform. The four reorganisation plans have been implemented and received court approval, it adds. HNA Group’s creditors in October 2021 voted to approve four plans relating to its restructuring. Of the four parts of HNA Group's restructuring, three relate to its aviation businesses. One of these is related to 321 companies, including some airlines, that were grouped together and treated for the purposes of the restructuring as one company via a legal concept known as "substantive consolidation". Bohai Leasing, a lessor controlled by the group, said in a filing on 24 April to the Shenzhen stock exchange that the reorganisation plan for the substantive merger and reorganisation of the 321 companies including HNA Group “has been completed”. The second involves Hainan Airlines and 10 of its subsidiaries. The implementation of that reorganisation plan was completed on 31 December 2021. The third pertains to HNA Group's airport businesses, while the fourth is not specifically related to aviation. HNA Group said in the WeChat post on 23 April that it “sincerely thanks all parties for their support for the risk disposal work of HNA Group”.
Airlines voice fury over Schiphol fee hikes
April 25, 2022
A proposed hike in airport charges at Amsterdam Schiphol risks damaging the recovery of air travel in the Netherlands, airline association IATA and Dutch carrier KLM have warned. Following a formal review of the fees, Dutch regulator ACM announced on 21 April that it accepted Schiphol's argument that airport charges should rise to account for pandemic-era losses. This would increase airport fees by a cumulative 37% over the next three years. Declaring its intention to fight the decision, KLM says it is "extremely disappointed" with a ruling that disregards "almost all" of the airlines' objections to the charge hike. "In the opinion of KLM, KLM Cityhopper, Transavia, Martinair and Air France, this is an extremely strict interpretation of the Aviation Act and an interpretation of the settlement mechanism that ignores its original purpose," says KLM, referencing the legislation governing airport fees. "According to the airlines mentioned above, the ACM does not protect the users against excessive charges by the monopolist Schiphol (the original purpose of the Aviation Act), but instead shifts all of the monopolist's business risks that have arisen during the Covid period on to the airlines." KLM plans to lodge an appeal against the ACM decision with the Dutch trade and industry appeals tribunal. Likewise, IATA warns that although the recovery in passenger demand is taking hold, "the foundations are weak". Its Connectivity Index shows that the Netherlands remains 35% below pre-pandemic levels, making it important that air travel in the country is supported, in its view. "Schiphol airport and its regulator have completely failed to consider the exceptional circumstances that were created by Covid-19," states Rafael Schvartzman, IATA's regional vice-president for Europe. "The cost recovery system was never expected to operate in circumstances where demand would totally collapse for an extended period due to government-imposed travel restrictions." IATA adds that airlines are already facing increased cost pressures across the board, including from environmental taxes, that are damaging the competitive position of Dutch airlines. It is therefore also considering an appeal against the decision. Mirroring the position at Schiphol, the association has been heavily critical of London Heathrow airport's plans to raise charges on airlines. Director general Willie Walsh has warned that the action threatens the recovery of air travel in the UK. Heathrow was last year given approval to increase charges from £30.19 ($40.10) on an interim basis from 1 January 2022, representing a more than 50% increase on the airport's previous £19.36 charge. "Placing the financial burden of a crisis of this proportion back on your customers, just because you can, is a commercial strategy that only a monopoly supplier could dream of," stated Walsh. IATA contrasts the approach of rising charges with the position taken in some other European countries where the focus has been on protecting consumers. In Spain, for example, the regulator rejected the calls from the airport operator to increase charges, freezing them for three years on the grounds that the recovery would bolster airports' finances, notes IATA.
Alaska pilots weigh strike option if contract talks fail
April 25, 2022
Pilots at Alaska Airlines represented by the Air Line Pilots Association (ALPA) union will vote during May on whether to seek permission to go on strike if contract negotiations with the airline break down. Leaders of Alaska's union on 22 April unanimously decided to tally votes from 3,100 members at the airline from 9 May to 25 May on whether to approve the option of a strike when the union is legally permitted to do so. Negotiations between Alaska’s pilots and the Seattle-based carrier are scheduled to resume by the end of April, including representation from the US National Mediation Board for the first time in those talks. Retaining pilots and recruiting new ones is key for the airline's capacity goals, Alaska chief executive Ben Minicucci said on 21 April during an earnings call, adding "we are entirely focused on getting a deal with our pilots". If approved by the union members, ALPA states a strike could only be legally permitted "if negotiations break down and the federal government authorises a walkout after the parties exhaust the required procedures of the Railway Labor Act".
Before a strike could take place, the federal mediator would have to release the two sides from mediation. A 30-day "cooling-off period", ALPA states, would then have to pass before the union could organise a strike or the airline could begin a lockout. The union wants to avoid a strike but wants to keep a legal strike as an option to achieve a better contract, Alaska's ALPA chairman Will McQuillen states. “We lag behind our peers in several significant areas which has resulted in dozens of pilots leaving for better career opportunities elsewhere,” McQuillen says. “If Alaska Airlines management wants to run a competitive airline with ample growth, then they need to get serious about reaching a new pilot agreement that’s competitive that provides job security, stronger work rules, and enhanced quality-of-life provisions that provide flexibility and reasonable schedules.” Alaska’s vice-president of labour relations Jenny Wetzel said on 31 March that the carrier has a proposed a “competitive” collective bargaining agreement that enables the company to grow its fleet and network while providing “increased pay, job security and greater work flexibility”.