by Lufthansa Flyer | Apr 15, 2012 | Airlines, Industry News |
In an AP (Associated Press) Release today, Virgin’s Richard Branson is still on the war path against the IAG (parent company of British Airways and Iberia) acquisition of BMI from The Lufthansa Group. I’m starting to sense all that Branson is doing is crying foul too little too late for something that its out of his control at this point. I don’t like the deal anymore than he does (After all I did enjoy BMI’s Diamond Club and their outstanding benefits). Branson and Virgin had ample opportunity to step up buy the airline from DLH when it had the chance. Now that the deal has been approved, and logistics are being sorted through, it’s not going to help anyone to have Virgin continuously cry foul and present an argument that they were somehow victimized or discriminated against. It may be time for all parties involved to move on.
The AP Story:
LONDON – Virgin Atlantic boss Richard Branson says he will challenge a European regulator’s decision to approve the takeover of airline BMI by the owner of British Airways and Iberia.
Branson says the deal would put BA’s owner, International Airlines Group (IAG), in a position of “total market dominance.”
Branson said Sunday that Virgin would “challenge every aspect of this process which, if allowed to stand, will undoubtedly damage the British airline industry for years to come.”
Last month the European Commission approved the acquisition of British Midlands Ltd. by IAG.
The approval is conditional on IAG giving up 14 daily takeoff and landing slots at London’s Heathrow airport to boost competition.
Branson called the condition “completely inadequate.”
by Lufthansa Flyer | Apr 12, 2012 | Industry News |
Interesting article today about a potential deal between Delta And JP Morgan’s Commodity team that may lead to Delta owning it’s own refinery as a way to help curb it’s fuel expense.
According to the Reuters article below, Delta may decide to spend $100-200 million dollars to purchase an idled ConocoPhillips refinery in Trainer, Pennsylvania. The deal would have JP Morgan actually manage the refinery and then sell the jet fuel exclusively to Delta at wholesale prices. JP Morgan would sell the non-jet fuel by-products in the open market and keep the proceeds for it’s own coffers.
This is certainly an interesting idea and in theory it should work (stress the “in theory” part). Large industrial complexes (airports, etc) usually have their own power generation stations, so why can’t an airline have its own gas pump? Delta may be on to something, but to play devil’s advocate, what happens to Delta’s return on investment should oil prices ever fall to levels we had 10-15 years ago? Refineries usually get shuttered when they don’t make sense to operate due low energy prices. However in this environment the thought of record low fuel prices seems like a ridiculous notion….
The Reuters Article:
NEW YORK (Reuters)-Delta Air Lines may partner with JP Morgan to help run the ConocoPhillips’ idled 185,000 barrel per day Trainer, Pa., refinery if the carrier decides to purchase the plant, CNBC reported on Wednesday, citing sources familiar with the matter.
Under the proposal, the No. 2 U.S. air carrier would purchase the refinery for $100 million to $200 million, and JP Morgan’s commodities team would finance the refining process, including purchasing and shipping crude from overseas, CNBC reported.
Delta, which has struggled with high fuel costs, would then buy the jet fuel from JP Morgan at a wholesale rate, and the bank would sell the other products made by the refinery into the market, the report said.
In addition, CNBC said, at least two oil companies have partnered with Delta in a swaps arrangement in which they would give the airline jet fuel in exchange for some of the other fuel produced by the refinery. The report did not identify which oil companies are involved in the swap deal.
A source familiar with negotiations told Reuters the deal had not been sealed and that the Trainer refinery had several other bidders besides Delta.
A JP Morgan spokeswoman contacted by Reuters declined to comment on the report. A Delta spokesman said the airline cannot comment on the CNBC story or rumors on the refinery.
“J.P. Morgan is most likely insisting that that if they are going to manage the crude, they are going to manage the product offtake as well,” one veteran oil products trader, who asked not to be named, told Reuters. “There is a lot of financial risk for the Trainer deal. This would be one way for JPM to keep tabs on what Delta is doing.”
Earlier this month, the board of Delta had met twice to discuss a potential bid in an unprecedented effort to hedge fuel costs for Delta, the world’s largest commercial buyer of jet fuel, a source familiar with the negotiations told Reuters.
Trainer is one of three refineries in the Philadelphia area which have been pushed to the brink of closure by the high cost of crude oil feedstock and waning fuel demand. The plant makes a higher percentage of jet fuel than any other refinery on the East Coast, accounting for a third of the jet-kerosene capacity for the region.
Delta spent $12 billion on jet fuel last year, with its average pricing rising by 31 percent to $3.06 a gallon. Last year, the company’s aircraft consumed 3.86 billion gallons or just over 250,000 barrels per day (bpd) of jet fuel.
While many airlines use derivatives or even long-term physical deals in an effort to control their future jet fuel costs, buying a whole refinery would mark an extraordinary step to ease the pain of rising prices.
Analysts have said Delta could struggle to make the refinery profitable after many integrated oil companies and independent refiners have incurred large losses in their downstream business as high crude costs have squeezed margins.
Tom Claugus, founder of GMT Capital Corp., a hedge fund in Atlanta that owns Delta Air Lines shares, said earlier this week that buying a refinery was a bad idea for the carrier.
“It’s good for management teams to think very broadly and look at all sorts of different options, but my own view would be that owning a refinery borders on the bizarre,” he said. “It would be a significant error.”
by Lufthansa Flyer | Apr 11, 2012 | Industry News |
In a press release today from Boeing, they have announced the next leg of the 787’s World Tour. This segment takes the aircraft primarily to Europe with stops in the UK, Norway and Italy and then back to the USA with stops in Washington DC, Dallas and St. Louis.
Boeing has been showing off it’s latest marvel (that is until the 747-8i enters service in a few weeks 🙂 ) around the world taking it to the home airports of some of the 787’s initial customers, as well as bringing the 787 to the home airports of some of the vendors involved in the construction of the aircraft. Response has been nothing short of spectacular during these tours.
On a personal note to Boeing, why no GRR on the agenda? remember where the avionics and landing gear came from! 🙂
Here is the press release from Boeing detailing the next phase of the tour:
EVERETT, Wash., April 11, 2012 /PRNewswire/ — Boeing (NYSE: BA) will bring the 787 Dreamliner to seven more cities on the sixth leg of the Dream Tour later this month and continuing into May. Stops include cities in the U.K., Norway, Italy and the U.S.
“The Dream Tour has provided us with a great platform to show customers, partners, government officials and other stakeholders just what the team has achieved with the 787,” said Larry Loftis, vice president and general manager of the 787 program. “It’s an honor to showcase this airplane as we bring it around the world.”
The airplane will depart from Seattle on April 21. The dates listed below are landing dates for each city or airport. Customers, employees, partners, government officials and other stakeholders will be invited to attend tour events at each location. There are no general public tour opportunities.
April 22– London’s Heathrow Airport
April 23 – Manchester Airport
April 25 – London’s Gatwick Airport
April 27 – London’s Heathrow Airport
May 1 – Oslo, Norway
May 4 – Taranto, Italy
May 7 – Ronald Reagan Washington National Airport – Washington, DC
May 11 – Dallas, Texas
May 14 – St. Louis, Missouri
More than 44,500 guests from around the world will have toured the airplane at the end of the fifth segment of the tour later this week and the airplane will have logged more than 82,366 nautical miles (152,542 km). The sixth segment will add an estimated 12,750 more guests and an additional 15,500 nmi (28,702 km).
The Dream Tour airplane, ZA003, is outfitted with the 787’s special cabin features including a welcoming entryway, dramatically larger dimmable windows, bigger bins and dynamic LED lighting. The airplane is configured with a luxurious business-class cabin, an overhead crew rest compartment and an economy class section.
Dates and locations for additional tour stops will be announced approximately one month in advance. At many of the stops, local media will have the opportunity to participate in tours of the airplane and discussions with Boeing executives and pilots.
For updates on the 787 Dream Tour, including videos, photos and reports from the tour stops, visit www.newairplane.com/787/dreamtour.
Contact:
Lori Gunter
787 Communications
+1 206 931 5919
SOURCE Boeing
