by Lufthansa Flyer | Mar 18, 2012 | Airlines, Industry News |
According to various reports coming out of Europe. Lufthansa has indicated that it is willing to shut down BMI if the sale of the British carrier to IAG (parent of British Airways and Iberia) is blocked by EU regulators.
Lufthansa is concerned about ongoing losses being incurred while the sale hangs in limbo, and any additional delays in the EU’s approval process will only extend the losses to Lufthansa.
I suspect Lufthansa is using this position as leverage to “help” the EU regulators approve the sale. Otherwise, the shutting down of BMI would lead to widespread job loss which is in no one’s best interest.
I Wonder if this opens the door to Virgin Atlantic coming back with a proposal that is less “anti-competitive”……a boy can dream can’t he??
Here is the Marketwatch.com article sourced from The Times (London)
LONDON (MarketWatch) — Lufthansa AG is considering shutting down its loss-making British Midland Ltd. – known as BMI – if its sale to International Consolidated Airlines Group (IAG.LN) is held up by anti-trust authorities in Brussels, the Sunday Times reports citing unidentified sources.
The German airline agreed in December to sell BMI to IAG, the parent company of British Airways and Iberia, for a maximum GBP172.5 million. But the deal could be held up following Brussels’ rejection last week of concessions offered by IAG, which the competition regulator said were inadequate, the paper says.
Lufthansa wants to avoid continuing losses at the carrier which would result from a protracted investigation, it adds.
A representative for Lufthansa said that the company’s position was unchanged.
“We are aiming for regulatory approval in Phase 1 and are on track with the deal process,” he said.
Reporting annual earnings Thursday, the German carrier attributed its poor performance partly to losses at BMI and said that the sale will bolster its earnings performance, which should enable Lufthansa to post a net profit this in 2012 after the EUR13 million net loss in 2011.
by Lufthansa Flyer | Mar 18, 2012 | Airlines, Industry News |
In news from Vienna, Lufthansa has called on the Austrian government to waive the air ticket tax that Austria attaches to each ticket.
Lufthansa’s CEO Christop Franz has asked Austria to completely abolish the air ticket tax to help Austrian’s competitiveness but the request apparently fell on relatively deaf ears. Austria’s Ministry of Finance responded predictably by saying there’s no room in the budget for such a cut and went as far as to suggest that it is Lufthansa’s responsibility to manage it’s business model. I can see this becoming the proverbial political “hot potato” should Austrian continue to struggle to the point that Lufthansa one day decides to stop the subsidies. Right now it looks like the beginning of a “Game of Chicken” between carrier and government.
As part of the recently announced capital injection of 140 million Euros, Lufthansa expects to reorganize Austrian based on the existing arrangements that are in place for Austrian subsidiary Tyrolean unless Austrian’s worker council agrees to substantial austerity measures.
Reading through the comments of various German and Austrian media, it looks like Lufthansa expects upwards of 300 pilots to leave Austrian should the carrier need to reorganize. Apparently each pilot is entitled to severance that would range between 30 and 60 thousand Euro, costing Lufthansa up to 18 million Euro in pilot severance alone. Lufthansa also left open the possibility of layoffs at Austrian to help curb expenses.
Lufthansa has stood by Austrian and is committed to its success. It had said that the capital injection will allow for new long-haul aircraft, modernization of current cabins, new Airbus aircraft to help standardize their fleet and construction of Vienna’s new Skylink Terminal. Lufthansa has no desire to turn Austrian into a regional carrier, but I think that may not be a destiny that they can control. Without the support of labor and government, it becomes a difficult road for Lufthansa and Austrian to navigate.
source: Friedlnews.com
by Lufthansa Flyer | Mar 12, 2012 | Airlines, Industry News |
In news out of Boeing today, the FAA is banning the filling of the 747-8i Fuel Tanks located in it’s rear horizontal stabilizer. The reason for this decision by the FAA is due to a vibration that apparently develops in flight when the tanks are full. According to Boeing, the fuel tanks in question add about 600nm to the range of the 747-8i. The 747-8i can still reach all of it’s typical destinations without having any fuel in those tanks. Boeing is obviously working on finding a solution for the problem.
Lufthansa is set to take delivery of it’s first 747-8i within the next few weeks, and everything that I’ve read about this minor setback does not indicate that there will be any delays in the delivery. Lufthansa is set to receive 20 747-8i’s over the coming months and years.
I’ll update this later if anything new is released by Boeing.
