Ryanair likely ‘kingmaker’ in any IAG further bid for Aer Lingus

Ryanair likely 'kingmaker' in any IAG further bid for Aer LingusRyanair is today being portrayed as the ‘kingmaker’ in efforts by International Airlines Group to take over Aer Lingus in a €1 billion-plus deal.

The Irish flag carrier rebuffed the offer from the British Airways parent company run by former Aer Lingus boss Willie Walsh.

With Aer Lingus rejecting the IAG approach it is increasingly apparent that Ryanair, Europe’s largest airline, will play the kingmaker if the takeover goes hostile, The Times reported.

The low cost carrier holds a 29% stake in Aer Lingus and there was growing speculation last night that chief executive Michael O’Leary could vote his stake in favour of IAG’s overtures.

In addition to the Ryanair shareholding, built up during three failed takeover attempts in recent years, 25% of the airline is owned by the Irish government. A further near-5% is held by Etihad Airways.

Sources in Dublin were last night suggesting the hand of O’Leary in the timing of IAG’s approach, according to the newspaper.

The UK’s Competition and Markets Authority is due to make a ruling soon that could result in the forced disposal or sell-down of Ryanair’s Aer Lingus stake on the grounds of market interference.

“Do you think Ryanair would rather have some regulator forcing it to sell its shares at a predetermined price or do you think it would rather take control of the situation and do a deal on its own terms?” a source was quoted as sayings. “Ryanair has spent its whole life trying to destabilise Aer Lingus.”

“With Ryanair intent on remaining kingmaker whether or not it can hold onto its block-holder 25% stake in Aer Lingus, this will once again be Willie Walsh versus Michael O’Leary battle,” Neil Shah, director of research at investment firm Edison, told The Telegraph.

IAG and Ryanair previously teamed up in Ryanair’s third abortive takeover of Aer Lingus, when IAG stepped in to offer to take Aer Lingus’s take-off and landing slots at Heathrow as a potential competition remedy.

Aer Lingus’s 23 slot pairs at Heathrow are seen to be central to the IAG approach. Aer Lingus is the third-largest holder of slots at Heathrow, where such pairs can be worth at least £30 million each.

Walsh was credited with saving Aer Lingus in a massive post-9/11 cost-slashing programme. On the back of that he was handed the chief executive’s job at BA in 2005, later becoming chief executive at IAG.

With Aer Lingus’s shares soaring following bid speculation, IAG was forced to confirm that it had “submitted a proposal to make an offer for the company which has been rejected by the board of Aer Lingus”.

Aer Lingus said later: “The board confirms that on December 14 it received a preliminary, highly conditional and non-binding approach from IAG.

“The board has reviewed the proposal and believes that it fundamentally undervalues Aer Lingus and its attractive prospects. Accordingly the proposal was rejected on December 16.”

BA and Aer Lingus previously had a joint venture that saw the airlines operate as one on the London-Dublin route.

Sourced from Travel Weekly

Air France-KLM issues third profits warning of the year

Air France-KLM issues third profits warning of the yearA third profit warning of the year has been issued by Air France-KLM, with the airline blaming continued price weakness and a worse than expected impact of a two-week pilots’ strike.

The group said earnings before interest, taxes, depreciation and amortisation would be €200 million lower than recently forecast.

The Franco Dutch carrier began the year predicting EBITDA of €2.5 billion, but is now set to gain as little as €1.5 billion to €1.6 billion.

The group suffered a two-week strike in September which cost it nearly half a billion euros, prompting a downgrading of its earnings forecast. The carrier issued its first warning in July.

The company said last night that “persistent weakness” in several long-haul markets since the summer have hurt profits while new financial regulations in Holland are affecting pension costs.

The cost of the two-week strike by Air France pilots was higher than expected due to the cost of flying passengers on other airlines during the period.

The group had previously said that the strike could cost around €320 million to €350 million directly in lost revenue with an estimated €150 million more as passengers delayed bookings.

The company added it had also seen little benefit from the fall in oil price because it has fallen by more than the price of jet fuel.

It plans to accelerate its cost-cutting measures and scale back its investment plans.

CEO Alexandre de Juniac said: “By significantly stepping up our cost-cutting efforts and adapting the investment plan, Air France-KLM can gain the resources and be well prepared to tackle 2015 despite the difficult competitive environment.”

The company said it was sticking with its long-term Perform 2020 growth plan, which includes investing €1 billion in low cost arm Transavia to expand from 47 to 100 aircraft by 2017.

“The Perform 2020 dynamic is under way across all the Group’s activities, based on the imperatives of an ongoing improvement in competitiveness and strict financial discipline,” said de Juniac.

Sourced from Travel Weekly

Tui brands offer ‘thousands’ of free child places in peak campaign

Tui brands offer 'thousands' of free child places in peak campaignDiscounts of up to £400 per person, “thousands” of free child places and offers on other selected holidays are being made available today (Friday) by Thomson and First Choice.

The Tui Group operators’ turn of year campaign also highlights ‘sunshine super saver’ deals with price cuts of £345 per person for a Thomson Couples holiday to Mauritius and £290pp to Cyprus.

Low deposits starting at £75pp and £200 per family for short/mid haul and £125pp and £300 per family are available for long haul on Thomson and First Choice holidays

The early booking deals for summer 2015 are being promoted across 650 in-house agency branches, online and over the phone.

Consumers can browse and book their holidays through the MyThomson and MyFirstChoice apps for the first time following their re-launch for iPads last month.

Thomson and First Choice commercial director Andrew Flintham said: “We’re dedicated to offering customers a holiday that suits their tastes, as well as their budgets.

“That’s why over the past year we have increased our offering to include some great new destinations like Mauritius and Puerto Vallarta flying on the Thomson Dreamliner, more exclusive concept hotels including the new Sensatori Resort in Jamaica and increased capacity in popular short haul destinations such as Croatia.

“We have some great deals available for the New Year and with thousands of free kids places we anticipate that customers will book early to take advantage of these fantastic offers.”

Thomson deals lead in at £199pp for seven nights self-catering in Zante based on a family of four between May 1-13.

First Choice all inclusive offers start at £289pp for seven nights in Corfu at the same time in May.

Sourced from Travel Weekly


Wizz Air to make Bristol debut next summer

Wizz Air to make Bristol debut next summer Eastern European budget carrier Wizz Air is to make its debut at Bristol airport next summer.

The airline is to operate a twice-weekly service to Katowice in Poland from June 26 on Mondays and Fridays.

The route will be served with a 180-seat Airbus A320 with fares starting at £25.99 one way.

Bristol airport aviaition director Shaun Browne said: “We are delighted to welcome Wizz Air to the southwest of the UK.

“The Katowice service will be a popular addition to the route network available from Bristol Airport, further strengthening links with Poland.”

A Wizz Air spokesman said: “With six UK airports, the Wizz low-cost offer is a great opportunity for UK consumers explore central and eastern Europe and we look forward to carrying many passengers on our new Bristol-Katowice service.”

Sourced from Travel Weekly

Greater competition from airport expansion will spark fall in air fares, Airports Commission chairman argues

Greater competition from airport expansion will spark fall in air fares, Airports Commission chairman argues Airline ticket prices could fall spurred by greater competition if either Heathrow or Gatwick is allowed to expand.

The suggestion comes today from Airports Commission chairman Sir Howard Davies.

Writing in the Financial Times, he said: “If either is allowed to expand, there will be greater opportunity for competition between airlines, and ticket prices may therefore fall, offsetting the higher landing charges new capacity would entail.

“If this analysis is correct, removing the capacity constraint should benefit passengers, increasing the choice of routes and carriers, potentially at lower cost.”

New analysis prepared for the Commission by the International Transport Forum and SEO Economic Research, published this week, argues that UK aviation is likely to be driven by two developments.

“The first is the rise of inbound travel from emerging market economies and the associated rise in competition from airlines serving them,” said Sir Howard. “The growth of middle classes countries predominantly in south-east Asia is likely to lead to more point-to-point long haul traffic.

“The second development will be new aircraft that are coming into operation, notably the Boeing 787 and the Airbus A350 – both at least 20% more fuel-efficient than the models they replace.

“They are also quieter, meaning fewer local residents will be affected by noise. They will make it easier for lower-cost carriers to enter the long-haul market, though many have been ordered by network carriers that will also benefit from lower operating costs, potentially adding previously unviable spokes to their hub networks.

“With additional runway capacity around London, these trends suggest more direct routes will be available to economically significant destinations, and an increase in the frequency of service on existing routes.

“Passengers and freight operators would benefit from the time saved from taking a more convenient or more direct route. There would be more airline competition, too, which would be likely to reduce costs.”

He added: “The research also shows that London’s constrained capacity comes with a cost. Where demand for airport capacity exceeds supply, airlines can earn a return higher than the average cost of supplying a take-off or landing slot.

“Airports cannot capture these excess returns if their charges are capped, as at Gatwick and Heathrow.”

Sir Howard did not indicate a preference but said: “If Britain is to keep pace in the global economy, south-east England needs an additional runway.

“But this vital infrastructure will come at a high price, and the question is where the money is most effectively spent.”

The Commission will make its recommendation on additional capacity for the new government after next May’s election.

Consultation papers published last month suggest a price tag of up to £19 billion at Heathrow, for a full-length runway with related infrastructure; and about £9 billion at Gatwick.

“The numbers are huge but the private-sector owners of London’s largest airports believe the investment can be financed and will yield an acceptable return,” said Sir Howard.

“Airlines, and more importantly passengers, are concerned about what the investment will mean for the landing charges each departing passenger pays as part of the ticket price.

“At £20, Heathrow’s charges are already the highest in Europe, and we estimate they could rise to as much as £32. Gatwick’s are lower but would rise significantly.

“These large increases lead some to question the viability of all the proposals we are evaluating and to ask whether it might prove more cost-effective to expand regional airports instead.

“We considered that option in last year’s interim report and rejected it. While it is vital that other airports – including Stansted – expand, it is not possible to direct airlines to fly from airports where they do not believe demand is adequate.

“Constraining supply of take-off slots in the south-east, where demand is highest, would result in lower overall connectivity and a less efficient, less carbon-efficient network.

“Still, to assess whether expanded capacity in the south-east is likely to be a good investment, we need to consider the market reaction.

“Although we expect runways and terminals to be privately financed, some related public infrastructure spending will be needed — more at Heathrow than Gatwick.

“Forecasting airline and passenger responses is not simple. Few foresaw the dramatic growth in low-cost carriers at the expense of national airlines; will that continue? In particular, will the low-cost model spread to long-haul routes or will the attractions of the large network airlines (especially to time-pressed businesspeople) allow them to maintain or increase market share?

“Does the future lie with “hubs”, collecting and distributing traffic to smaller airports, or point-to-point traffic?”

Sourced from Travel Weekly

Ground handlers threaten two-day pre-Christmas strike

Ground handlers threaten two-day pre-Christmas strikeImage via Shutterstock

Air travellers face the threat of pre-Christmas airport chaos if a two-day strike threatened by ground handlers goes ahead.

Workers at Heathrow, Gatwick and Manchester airports backed strike action in a ballot by 83% in a row with ground handling company dnata over pay.

The Unite union warned that more than 460 members based mainly at Heathrow would walk out for two days from Tuesday if the company refuses to negotiate.

The union called on dnata to engage in talks via the conciliation service Acas to resolve the dispute over a ‘divisive’ pay offer.

The row centres on a pay offer which the union claims will see supervisors get 4.5% – double the 2.25% of other staff.

Unite represents around a quarter of the 1,900 Dnata staff who carry out check-in, ground crew and cargo duties at Heathrow, Gatwick and Manchester airports.

Dnata’s main customers are Emirates, Virgin Atlantic, Cathay Pacific, Qatar Airways, Iran Air, Turkish Airlines, Saudi Arabian Airways, New Zealand Airways, Pakistan International Airlines, US Airways, Eva Air, Qantas and Oman Airways.

Unite regional officer Kevin Hall said: “Strike action is very much a last resort and our members are mindful of the potential disruption it could cause.

“But they feel frustrated with an employer that has refused point blank to go to Acas and negotiate in a sensible manner.

“Instead hardworking staff have seen their supervisors enjoy a pay rise double the amount that was imposed on them.

“Our members are angry over the inequality being shown within dnata and we would urge management to join us at Acas to reach a fair pay deal.”

A spokesman for dnata told the Daily Mail that contingency plans to help passengers were being implemented, adding: “Unite members are a minority of our team in the UK.”

Any strike action at Heathrow would affect Terminals 2, 3 and 4. The walkout will not affect Terminal 5, where British Airways is based.

A Heathrow spokesman said it would have extra staff on hand, adding: “Passengers should allow plenty of time for travelling through the airport and speak to their airline if they have any concerns.”

A spokesman for Virgin Atlantic said: “We are being kept informed of the situation. Should the strike action take place, we are confident that dnata will have contingency plans to keep disruption to passengers to a minimum.”

Gatwick confirmed that as Dnata has only a small operation at the airport, no passengers would be affected if the strike goes ahead.

Sourced from Travel Weekly

Nats calculating rebate to airlines following computer glitch

Nats calculating rebate to airlines following computer glitchA rebate for airlines is being calculated by air traffic control company Nats in the wake of last Friday’s flight disruption.

It comes as the firm’s chief executive told MPs as many as 120 flights were cancelled and 500 delayed by an average of 45 minutes.

Apologising to ”customers, airports and the travelling public” for the computer glitch, Nats chief executive Richard Deakin said his company’s contingency and back-up plans worked well.

The company said: ”Nats confirms that there will be a financial consequence for the company from the delay caused by the technical problem at Swanwick on December 12 2014.

”Under the company’s regulatory performance regime, customers will receive a rebate on charges in the future.

”The amount is being calculated and will be notified to customers in due course.”

Appearing before the House of Commons transport committee, Deakin said around 10,000 passengers were affected by the Friday problem which occurred at Nats’ headquarters at Swanwick in Hampshire.

Heathrow, Luton and Gatwick airports were the ones mainly affected by the problem, Deakin said.

He told the committee: ”Any complex system will have failures”, adding that it would be ”unrealistic” to expect there would be no failures.

Deakin was appearing with Nats operations managing director Martin Rolfe as well as Andrew Haines, chief executive of the Civil Aviation Authority, which has already announced that an independent inquiry will be held into the failure.

The committee has already taken evidence this week from transport secretary Patrick McLoughlin who described the flight delays as ”unacceptable”.

Rolfe told MPs that the piece of equipment that failed last week dated from the mid-1990s and had dealt with 20 million flights and had been upgraded continually, The Telegraph reported.

Asked if he agreed with McLoughlin that the failure last week was ”unacceptable”, Deakin said: ”For the passengers who got caught up in all this, yes, it was unacceptable and by implication it was unacceptable for us as well.

”We are not proud of what happened. We are proud of how we responded.”

Asked about future performance, Deakin said: ”I can guarantee that this particular problem will not happen again but I cannot honestly sit here and say we will never have a computer glitch again.”

Sourced from Travel Weekly


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