by Lufthansa Flyer | Apr 20, 2012 | Airlines, Industry News |
Singapore Airlines has recently begun rolling out the “interweb” on a limited part of its long haul fleet. Currently a handful of their A380s are equipped with an OnAir satellite based system. Fortunately, voice calls are not enabled so the cabin will not be full of chatter. This includes Skype as well.
Rates for the service are $12 for 10MB of data and $30 for 26MB. For some reason, even first class passengers will be required to pay if they want to surf.
In addition to the A380’s there are a few A340s that serve between Singapore and the USA that also have internet connectivity installed.
Singapore Airlines stated that the product will ultimately be installed on all of their A340-500s, A380s and Boeing 777 aircraft. A formal rollout is planned in the coming weeks.
by Lufthansa Flyer | Apr 19, 2012 | Airlines, Industry News |
As was widely expected, Austrian Airlines’ board today announced plans to reorganize Austrian Airlines and has forced pilots and flight attendants to have their contracts shifted to Tyrolean Airways (Austrian Subsidiary). The decision to make this change was due to the fact that Tyrolean has a far more efficient structure as far as employee contracts are concerned. Under this change, Austrian expects a savings of 45 million Euros annually.
I suspect the 2100 Austrian Pilots and Flight Attendants affected by this will not take this sitting down. As part of the new agreements, pay raises will no longer be automatic and other benefits will cut that the airline can no longer afford.
I suspect we’ll hear a loud and clear response from the unions representing the pilots and flight attendants shortly. I hope they understand and appreciate that they still have a job and need to adapt to a structure that should help ensure future success. Lufthansa could have very easily pulled the plug on Austrian. Instead, it has committed to injecting 140 million Euros to help the Airline revamp its operations and become profitable.
The Reuters Article:
* Shifting contracts to help save 45 mln euros/year
* Supervisory board approves shift as “Plan B”
* Around 2,100 staff contracts to move to Tyrolean Airways (Adds statement from AUA supervisory board)
VIENNA, April 19 (Reuters) – Deutsche Lufthansa’s loss-making Austrian Airlines (AUA) will slash costs for pilots and flight attendants by shifting their contracts to a sister company offering less generous terms.
The step will help save 45 million euros ($59 million) a year on annual staff costs, Chief Executive Jaan Albrecht told reporters after the AUA supervisory board sanctioned the move.
The disputed measure sets the stage for a legal battle with representatives of the 600 pilots and 1,500 flight attendants affected by the move, which would take place as early as July. Contracts for ground staff are not affected.
AUA’s board approved on Thursday moving the on-board staff contracts to regional carrier Tyrolean Airways, after negotiations with labour failed to come up with an agreement on cost cuts.
“This decision formally lays the final building block in the 220 million euro restructuring programme,” AUA, which has become a major drag on the German group, said in a statement.
Pilots had refused to give up packages – including annual pay rises of up to 7 percent and attractive pensions – that the company has said it could no longer afford.
Their pay has now been frozen rather than cut, but would no longer rise automatically at Tyrolean. Pilots will also fly more hours each month, helping to boost productivity, Albrecht said.
Forty pilots have already quit and more may follow, AUA said, but it expected no disruptions to the peak summer season.
Lufthansa will inject as much as 140 million euros of fresh equity into AUA as it seeks to restructure the unit, the group’s chief executive said last month, calling the situation “critical”.
AUA made a 2011 operating loss of 62 million euros as it struggled with unrest in the Middle East, the Fukushima disaster in Japan, soaring fuel prices and the European debt crisis.
Lufthansa has said the unit’s results should improve this year but were unlikely to break even. Albrecht said how quickly AUA can make profits again depended on fuel prices, market developments and how quickly it can switch contracts. ($1 = 0.7621 euros) (Reporting by Angelika Gruber; Writing by Michael Shields; Editing by Elaine Hardcastle)
by Lufthansa Flyer | Apr 18, 2012 | Airlines, Industry News |
Only yesterday did I post about IAG’s appetite for acquisitions with its recent buy of BMI and rumors around a potential offer for Portugal’s TAP.
However it’s a new day, therefore there must be another airline rumored for consolidation…..
Today’s edition of “Airline Acquisitions” focuses on SAS. In a Reuters.com story, SAS leadership discussed the impending wave of consolidation coming to the European Airline industry (no thanks in part to the EU’s brilliant Carbon Trading Scheme). Though current CEO Rickard Gustafson thinks SAS can make a go of it alone, the state’s ownership share of the airline may have other thoughts for SAS’ future. Though SAS has been in an out of the rumor mill frequently of the the last few years, no suitor has been mentioned in the most recent speculation.
Last year, SAS lost 1.6 billion Swedish kronor (237.4 million USD/180.8 million Euro), thanks in part to its 10.1% stake in now-defunct Spanair. It hasn’t been profitable in the last 7 years. In the last 11 years, it netted a profit in only 4 of thos years.
I wonder who will be in tomorrow’s edition of “Airline Acquisition”…….
The Article As Published By Reuters.com:
By Simon Johnson
STOCKHOLM | Wed Apr 18, 2012 5:54am EDT
(Reuters) – A global economic slowdown and sky-high jet fuel prices will push the airline industry into a new wave of consolidation, the top executive of Scandinavian airline SAS (SAS.ST), itself a long-rumoured takeover target, said on Tuesday.
European carriers face a collective loss this year due to soaring fuel costs and slack demand and with spare capacity in the industry there is little room for airlines to hike fares.
“I would be surprised if we didn’t see an accelerated activity in terms of consolidation in the airline industry driven by this situation,” Rickard Gustafson, CEO of loss-making SAS said in an interview.
“I do believe that … when capacity outruns demand in very tough market conditions … that is a pretty lethal cocktail.”
SAS is among the airlines most widely touted to be gobbled up in any industry reshuffle. Late in 2010, German carrier Lufthansa was rumoured to be close to making a bid for SAS, half owned by Sweden, Norway and Denmark.
Gustafson would not be drawn on the future ownership of SAS, which has failed to make a full-year profit since 2007 and has only been in the black in three of the last 11 years.
Recent years have seen a number of mergers with Air France fusing with KLM (AIRF.PA), British Airways and Iberia forming International Airlines Group (ICAG.L) as flag carriers look to cut costs and catch up with more nimble, no-frills airlines like Ryanair (RYA.I).
In the latest move, British Airways bought regional British airline bmi from German carrier Lufthansa (LHAG.DE). More than 1,000 jobs are set to go in the integration process.
FIT TO BE SOLD?
Unlike predecessor Mats Jansson, who was explicit about his goal of readying the airline for a takeover, Gustafson said he did not see his job as making SAS fit for sale though its state owners have all opened the door to an eventual deal.
“I know the owners have said they would like to do some kind of exit,” he said. “But my strategy and my focus is how do we create … a sustainable business model that is actually working and stands on its own merits.”
Despite a decade of cost-cutting, SAS made a loss of 1.6 billion Swedish crowns in 2011, due to the bankruptcy of Spanair, in which it had a 10.9 percent stake.
The airline has speeded up its latest, 5 billion crown, efficiency programme, but has not given an outlook for the current year.
Getting back to profitability will be tough. In its latest report, The International Air Transport Association (IATA) said it expected Europe’s airlines to make a collective loss of around $600 million this year due to soaring fuel prices.
SAS’s fuel costs increased by nearly a third in 2011 to 7.8 billion crowns. Only payroll costs were a bigger part of expenses, according to the company’s annual report.
European airlines face an additional burden from inclusion in the EU carbon trading scheme.
“I am extremely concerned about the way the European Union decided to implement this and basically open up for a trade war,” Gustafson said.
“That would only have a negative impact on European carriers … so let’s go back to the drawing board with the ambitions to get a global trading scheme.”
Despite the pressures on SAS, Gustafson said he did not expect the company to have to go to shareholders for more cash.
“At the moment we have a strong financial preparedness with close to 9 billion Swedish crowns in liquidity,” he said.
“We have 12.4 billion crowns in equity. So at the moment, I do not really see the need.”
SAS raised around 11 billion crowns in rights issues in 2009 and 2010.
The airline reports its first quarter results on May 3.
Singapore Airlines has recently begun rolling out the “interweb” on a limited part of its long haul fleet. Currently a handful of their A380s are equipped with an OnAir satellite based system. Fortunately, voice calls are not enabled so the cabin will not be full of chatter. This includes Skype as well.
