Less than two months before the new Berlin Brandenburg International airport is scheduled to open after years of delays, the airport’s operator Flughafen Berlin-Brandenburg (FBB) will need an additional 300 million euro ($354 million) if it is to remain solvent on its opening day. That is the essence of a letter the German Finance ministry sent to the federal parliament’s budget committee earlier this week, according to reports in German media on 9 September. "Without the financial commitment from the shareholders, FBB’s ability to meet financial obligations in 2020 is not secured," the ministry’s state secretary Bettina Hagedorn wrote in the letter. The company needs the additional funds to make up for losses experienced by the other Berlin airports it manages – Tegel and Schoenefeld – due to the coronavirus pandemic earlier this year. The planned aid would consist of a grant of 99 million euro, and loans of about 201 million euro. The federal government owns 26% of FBB’s shares, and the states of Berlin and Brandenburg each hold 37%.
Opposition lawmakers in parliament had hoped to stop the additional financial assistance for the airport, which is scheduled to open for business on 31 October, more than eight years late. But the federal government stepped in to support the aid. "We are prepared, along with the other shareholders, to secure the necessary liquidity," German finance minister Olaf Scholz told the German parliament on 9 September. The federal government’s share is worth 78 million euro. The states of Berlin and Brandenburg have not yet released their portions. But that is not all. Depending on the development of air traffic in the coming months as the industry recovers, the new airport could require another 500-700 million euro to stave off a potential bankruptcy. Berlin Brandenburg International airport has a long and troubled history. The project was launched in 1996 but years of financial issues hampered its construction, and the costs skyrocketed. In the meantime the project’s total pricetag has risen to more than 7 billion euro. Design and building flaws as well as numerous management changes slowed completion, and just a few weeks before its planned commissioning in June 2012, a series of safety inspection failures prompted authorities to abruptly halt the airport’s opening. In early 2020, eight years after its proposed completion, the coronavirus pandemic threatened to derail the opening yet again. But FBB says its preparations are almost complete, and testing of the facility is currently in full gear. Volunteers are playing the role of passengers in testing of the airport’s operations.

Source: Cirium

Alaska Airlines' Oneworld alliance membership has been pushed to at least early 2021. This is slightly later than its most recent estimate of "around the end of the year", but still on track for its original estimate of mid-2021 when announcing its intention to join in February. "We’re hoping by sometime late Q1 we’ll be a full-fledged Oneworld member," Alaska Airlines president Ben Minicucci said during the 9 September online Cowen 2020 Global Transportation & Sustainable Mobility Conference. "This feeds into our strategy in Seattle about being not only a domestic airline, but an airline that can give our loyalty members and our customers access to the world [through] American’s international network as well as Oneworld." Alaska announced plans to join Oneworld in February, when it also said it would form an international alliance on the West Coast with American Airlines. Alaska does still have restrictions on national codeshares with American related to a previous agreement with Virgin America, which merged with Alaska in late 2016. "A lot of those restrictions from the integration or the acquisition of Virgin are still in place, and time will tell if we seek any relief to that or not," chief financial officer Shane Tackett says. "But it is really focused on the international network – that’s really the piece of the puzzle that we don’t have that American and the rest of the Oneworld family has in spades."

Source: Cirium

Ratings agency Moody's has downgraded the debt of IAG and its subsidiary British Airways, citing the slow pace of airline recovery in Europe. Both organisations' family corporate ratings were lowered from Ba2 to Ba1, with the outlook remaining negative. Moody's also notes the organisations' "large exposure to long haul, cross-border and corporate travel which is expected to remain weaker than the industry as a whole". Despite a proposed equity rights issue that is credit positive for IAG, "liquidity headroom remains a consideration if wider coronavirus outbreaks and extensive travel restrictions and quarantine measures inhibit meaningful recovery", Moody's says.. The ratings agency expects IAG's increasing debt burden to weigh on a "slow recovery", limiting the airline's ability to recover its balance sheet over the next two to three years. Significant execution risks remain as the company looks to restructure and cut costs, although the agency notes IAG's strong track record in achieving such programmes. IAG has proposed an equity rights issue to raise up to €2.75 billion ($3.21 billion) that will be voted on during an annual shareholder meeting in Madrid today. The equity issuance is supported by an "irrevocable commitment" from Qatar Airways, which owns a 25.1% equity stake in IAG. The company has also received £750 million ($967 million) from American Express for the renewal of IAG's global partnership and an advance sale of air miles. Moody's believes these funds will support IAG's operations for around 500 days if demand does not improve from estimated levels in the third quarter 2020. "There is a high degree of uncertainty in this estimate, however Moody's considers that the company's liquidity is weaker compared than similarly Ba-rated airlines," it states. "Nevertheless, the company has further levers to generate additional liquidity including through its remaining unencumbered aircraft fleet. Moody's also notes that the proposed equity issuance will improve IAG's ability to support British Airways' balance sheet and help the company to restore its leverage metrics." The ratings agency notes that British Airways may be forced to adjust its business model away from the previously lucrative business and corporate travel markets to leisure, and as a result "it may face challenges to return to prior levels of profitability". As well voting on the company's equity raise, shareholders at IAG's annual meeting are expected to approve Luis Gallego as group chief executive replacing Willie Walsh, whose departure was delayed from March in order to maintain continuity through the start of the coronavirus pandemic.

Source: Cirium