South African carrier Comair has detailed the expected benefit on its full-year financial results following settlement of an anti-competitiveness case against South African Airways. The carrier had entered into a final settlement deal under which SAA would pay just over R1.1 billion ($74.3 million) plus interest, with a payment schedule commencing on 28 February this year. Comair says the agreement will result in full-year earnings per share of 192.4 cents on 30 June 2019 which is 175% higher than the 69.8 cents figure generated at the end of the 2017-18 financial year. “The increases are a direct consequence of the award [from the SAA case],” says the carrier, adding that the overall effects will be disclosed in its final full-year results. Comair was originally awarded the sum in early 2017, the culmination of a case which had been started 16 years ago. It had alleged in 2003 that SAA had engaged in exclusionary practices by rewarding travel agents in order to retain loyalty.

Source: FlightGlobal

Delta Air Lines is investing $2 million to research the feasibility of developing biofuel products from forest floor debris in an effort to improve sustainability, the airline says on 17 September. The study, which the Atlanta-based carrier is conducting with Northwest Advanced Bio-fuels (NWABF) in Washington State, comes as the broader airline industry eyes ambitious carbon-reduction goals. Delta expects its project will be complete by mid-2020, when it will evaluate next steps. The airline says sustainable aviation fuel made from wood residue and forest debris could be used in Delta operations in Seattle, Portland, San Francisco and Los Angeles. It could be delivered as soon as 2023. Delta says it is studying alternative fuels as a means to help reach a goal of reducing carbon emissions 50% by 2050.
The broader aviation industry has committed to similar goals under an ICAO-led framework called the Carbon Offsetting and Reduction Scheme for International Aviation. That effort calls for the airline industry to cap carbon output at 2020 levels and to cut emissions to half of 2005 levels by 2050. Some industry observers, citing the projected expansion of air travel, have raised doubt about the industry's ability to meet that goal. If successful, Delta's biofuel project could provide about 10% of its annual jet fuel consumption in the West Coast and serve as a blueprint for future projects, the airline says. Several US airlines, including United Airlines, Alaska Airlines and JetBlue Airways, are likewise exploring means to make air travel more environmentally friendly.

Source: FlightGlobal

Virgin Australia will buy back a 35% stake in its Velocity loyalty programme for A$700 million ($481 million) from private equity firm Affinity Equity Partners. The airline states in a stock exchange that it has signed a term sheet for the acquisition, which is expected to occur before the end of 2019. In July, the airline disclosed that Affinity was exploring options to exit its stake in the programme, and some media reports indicated that it was likely to seek an initial public offering of the company. Velocity has been a profitable unit for Virgin, reporting earnings before interest and tax of A$122 million for the year to 30 June, as revenue rose 39% to A$411 million. Virgin has not disclosed how it intends to finance the transaction, but it seems likely that it may have to raise additional debt from bank sources or bond issuances. At 30 June the airline had cash and cash equivalents of A$1.33 billion, however it has around A$1.1 billion of debt maturing over the 2020 financial year. That includes a $400 million US unsecured bond redemption and the redemption of its Enhanced Equipment Trust Certificates that were issued in 2013.

Source: FlightGlobal