Kuwait Airways is seeking $350 million loan to pay for planes

The state-run airline is talking to banks to raise a five-year facility.

TFMNews

Kuwait City: Kuwait Airways Corp. is seeking a $350 million loan that will help the Gulf carrier pay for planes, people with information of the deal stated.

The state-run airline is talking to banks to raise a five-year facility, said the people, asking not to be identified because the information is private. It’ll be used to make early payments for narrow-body jets, they said.

Kuwait Airways has 15 Airbus SE A320neo narrow-body planes on order as well as eight A330neos, five A350s plus 10 Boeing 777s. It currently has a fleet of 17 planes, according to information on its website.

A spokesman for Kuwait Airways didn’t immediately respond to a request for comment.

Source: GulfNews

– TFM News

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Boeing 737 MAX planes restricted in Indian airspace following Ethiopian crash

  • Indian civil aviation ministry had stated late on Tuesday that it would ground 737 MAX immediately.
  • Jet Airways Ltd and SpiceJet Ltd, two top Indian airlines, operate Boeing 737 MAX 8 aircraft.
  • It has not detailed the types involved, but FlightRadar24 data shows its five once-active 737 MAX jets were grounded before the Ethiopian crash.

By ReutersTFMNews

BENGALURU (Reuters) – India will not allow U.S. plane maker Boeing Co’s 737 MAX aircraft to enter or transit its airspace after 1030 GMT, the ministry of civil aviation said on Wednesday, following the fatal crash of a plane of the same type in Ethiopia on Sunday.

“The time line is to cater to situations where aircraft can be positioned at maintenance facilities & international flights can reach their destinations,” the ministry said in a tweet.

Indian civil aviation ministry had stated late on Tuesday that it would ground 737 MAX immediately.

Jet Airways Ltd and SpiceJet Ltd, two top Indian airlines, operate Boeing 737 MAX 8 aircraft.

SpiceJet suspended operations of the 737 MAX after the regulators decision to ground the aircraft, the airline’s spokesman stated on Wednesday.

It expects to complete grounding of the Boeing jets by the 1030 GMT deadline. The airline has 13 737 MAX jets in its fleet, according to FlightGlobal.

Jet Airways, in a response to customer queries on Twitter, said it was not flying the 737 MAX.

The airline, which is struggling financially, has said that 32 of the planes in its fleet have been grounded for non-payment to lessors.

It has not detailed the types involved, but FlightRadar24 data shows its five once-active 737 MAX jets were grounded before the Ethiopian crash.

The European Union’s aviation safety regulator has already suspended all flights in the bloc by Boeing 737 MAX planes, joining a wave of suspensions of the aircraft across the globe.

SpiceJet’s shares plunged as much as 8.8 percent to their lowest since Dec. 11, before recovering to trade down 2.9 percent later in the day. Jet fell as much as 3.4 percent.

Shares of low-cost airline InterGlobe Aviation, which does not fly 737 MAX jets, rose as much as 4.4 percent.

Source: Reuters

– TFM News

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Stakeholders approved deal to sell 80% of Brazil’s Embraer commercial jet division to Boeing

Stakeholders approved deal to sell 80% of Brazil’s Embraer commercial jet division to Boeing

The exchange esteems Embraer’s commercial aircraft operations at 5.26 billion USD and Boeing’s 80% offer at 4.2 billion USD.

– TFM Watch

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Stakeholders of Brazilian aircraft producer Embraer endorsed the pact to sell 80% of the its commercial jet division to Boeing, framing a partnership which will contend with Airbus in the market for planes with up to 150 seats.

The proposition goes with 96.8% votes for the exchange, while cooperation in the vote likened to 67% of all outstanding share. The exchange esteems Embraer’s commercial aircraft operations at 5.26 billion USD and Boeing’s 80% offer at 4.2 billion USD.

In this way, Boeing will completely control the new venture. The arrangement with Boeing concerns just the Embraer commercial aircraft division, based on which the joint venture will be created. Divisions for the making of business and military aircrafts in the contract to make a joint venture does not appear.

Embraer investors likewise consented to a joint dare to advance and grow new markets for the multi-mission medium KC-390 airlifter. Under the terms of that proposed partnership, Embraer will claim a 51 percent stake in the joint venture and Boeing the rest. Embraer’s defence and executive jet business and service operations related with those products would remain an independent, publicly traded company.

“This noteworthy association will position the two organizations to convey a more grounded offer for our clients and other stakeholders and make more create more opportunities for our employees. Our understanding will make common advantages and lift the intensity of both Embraer and Boeing”, said the President and CEO of Embraer, Paulo Cesar de Souza e Silva.

On Friday, a court in Brazil suspended discussions on the formation of a joint venture between the American aircraft manufacturing concern Boeing and a business aircraft improvement unit of the Brazilian organization Embraer. The conclusion was requested in the high court and the date for the gathering of investors was confirmed for February 26.

The Brazilian government has effectively confirmed the formation of a Boeing and Embraer partnership.

Source: Wings Herald

– TFM Watch

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Malaysia’s AirAsia recorded its third consecutive quarterly loss

Malaysia’s AirAsia X posts Q4 net loss on impairment, higher fuel expense

The long-haul offshoot of Malaysia’s flagship budget airline AirAsia Group said in an exchange statement it provided an impairment due from a joint venture amounting to 24 million ringgit ($5.89 million) during the fourth quarter.

TFM Watch

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Malaysia’s AirAsia X recorded its third consecutive quarterly loss on Thursday, dragged down by an impairment provision while rising fuel costs also dented its performance in the October-December period.

The long-haul offshoot of Malaysia’s flagship budget airline AirAsia Group said in an exchange statement it provided an impairment due from a joint venture amounting to 24 million ringgit ($5.89 million) during the fourth quarter.

The airline’s average fuel price rose 29 percent from $69 to $89 per barrel during the period, and it also accounted for higher deferred tax.

AirAsia X said it will be adding up to five aircraft through operating leases this year, via its Thai operation.

Its Malaysian operation is expected to remain with 24 aircraft. It will maximise utilisation of its current fleet, including new route launches as well as increasing frequencies of core routes.

The airline expects its prospects to remain encouraging, it said, with forward booking trend and average fares in the first quarter of 2019 performing within expectations.

In an earlier statement detailing its preliminary operating statistics, the airline said it increased seasonal flight frequency to certain destinations in Australia and Japan, and to Taipei and Bali during the quarter.

Routes to Japan and Indonesia were hit by natural disasters during the quarter, while redeployment of capacity to core markets led to the airline’s load factor – which measures how full plane are – to drop by 5 percentage points to 78 percent.

AirAsia X also commenced flights to two new China destinations which it said softened the load factor in the near term as the routes mature.

The number of passengers carried fell by 3 percent to 1.49 million on the back of a 2 percent increase in capacity.

The airline posted a net loss of 99.27 million ringgit for the fourth quarter versus a net profit 84.4 million a year ago.

Excluding the impact of the impairment, its net operating profit fell 77 percent to 27.4 million ringgit.

Revenue was 6 percent lower at 1.15 billion ringgit.

Its year-ago performance was boosted by favourable foreign exchange and stronger passenger volume in the seasonally busier quarter.

($1 = 4.0760 ringgit)

Source: Reuters

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SBI and PNB agreed to provide Rs.500 crore in emergency to Jet Airways

SBI and PNB may pump in Rs.500 crore in Jet Airways if other lenders agree

The fund would allow the cash-strapped Jet Airways to continue operations until the lenders agree to a restructuring plan for the airline, which has a debt of over Rs.8,000 crore.

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State Bank of India (SBI) and Punjab National Bank (PNB) have agreed to provide Rs.500 crore in emergency funding to Jet Airways on a condition that other lenders in the consortium do not object, The Economic Times reported..

The fund would allow the cash-strapped Jet Airways to continue operations until the lenders agree to a restructuring plan for the airline, which has a debt of over Rs.8,000 crore.

The details of the loan, however, are yet to be worked out.

“Only SBI and PNB have agreed to step in and provide the loans,” a source told the paper, adding that none of the other lenders are willing to lend more.

Fresh debt would be given the first preference in the event of a loan recovery, the source told the newspaper, adding: “Since it will be treated on a higher pedestal on the debt waterfall, it needs an okay from other lenders.”

On February 14, Jet Airways’ board approved a rescue deal that would make its lenders its largest shareholders and fix a near $1.12 billion funding gap.

Under the proposed provisional resolution plan by Jet Airways top lender SBI bank may convert a part of the debt into 114 million shares by paying a token Re 1 apiece, based on Reserve Bank of India (RBI) restructuring guidelines. The move would give lenders majority shareholding (50.1%) in the company.

This plan, however, is yet to get the approval of other lenders. Its approval may get delayed due to the crucial emergency funding proposal.

The airline had recently posted its fourth consecutive quarter of losses in the October-December period. It posted a loss of Rs.587.8 crore in Q3 FY19 against a profit of Rs.165.2 crore in the same period last fiscal and loss of Rs.1,297.5 crore in the July-September quarter of 2018.

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Rescue Deal: Jet Airways to seek approval from its shareholders to convert debt into 114 million shares

Debt-laden Jet Airways edges closer to safety

Jet will take the resolution plan to its shareholders later in the day where it will seek their approval to convert debt into 114 million shares.

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(Reuters) – India’s Jet Airways Ltd, after several attempts at finding help to save the carrier from a crippling pile of debt, last week approved a rescue deal which will make its lenders its largest shareholders and fix a near 85 billion rupee funding gap.

Jet, which had debt exceeding 80 billion rupees ($1.12 billion) as of September-end, has been steadily losing market share to its rival and low-cost carrier IndiGo, which is owned by InterGlobe Aviation Ltd.

The airline has also seen its share price suffer as it navigated through several negotiations with its lenders and shareholders.

Jet will take the resolution plan to its shareholders later in the day where it will seek their approval to convert debt into 114 million shares.

Here are some major developments in Jet’s story:

  • Aug 3 – Jet denies report that it cannot fly beyond 60 days, and dismisses conjecture of stake sale
  • Aug 9 – Airline defers board meet for first-quarter results
  • Aug 11 – After State Bank of India chairman says Jet’s loan is on the bank’s watch list, Jet says it is regular in payment obligations to all banks
  • Aug 20 – Sources tell Reuters that private equity firm TPG Capital is considering investing in Jet, but is not close to finalising a deal
  • Aug 27 – Jet posts loss for the June-quarter, says it will inject funds and cut costs by more than 20 billion rupees in two years
  • Sept 6 – Jet says it paid salaries to 84 percent of its employees after reports emerge that pilots warned ‘non-cooperation’ over salary default
  • Oct 4 – Rating agency ICRA downgrades here the company’s long term loans and NCDs
  • Oct 18 – Report says Indian conglomerate Tata Group is in talks to buy stake in Jet. Jet calls report “speculative”
  • Oct 30 – U.S.-based Delta Air Lines Inc expresses interest to buy Jet stake from promoter Naresh Goyal and Etihad Airways
  • Nov 5 – Report says Tata aims to buy the 51 percent stake in the airline owned by Naresh Goyal, and Etihad Airways’ 24 percent stake, and merge Jet with Vistara
  • Nov 12 – Jet posts third straight quarterly loss
  • Nov 13 – Tata Sons begins due diligence to buy Jet, reports say
  • Nov 15 – Shares surge nearly 25 percent following reports that the debt-laden airline was nearing a rescue deal with Tata Sons; another report says the Indian government asked Tata to explore buying Jet
  • Nov 16 – Tata Sons says discussions on Jet is preliminary and no proposal has been made
  • Nov 22 – Independent director Ranjan Mathai resigns, citing rising pressure from other commitments
  • Dec 3 – Jet says it will stop providing free meals to most domestic economy class passengers from January
  • Dec 5 – Jet and Etihad Airways have been holding rescue talks with Jet’s bankers, sources tell Reuters
  • Dec 6 – Jet tells its pilot union it will clear all salary dues by April, a source tells Reuters
  • Dec 7 – ICRA cuts here Jet rating yet again
  • Dec 14 – Goyal’s penchant for control has come up as a major obstacle as the airline tries to negotiate a rescue deal, several people who have worked closely with him or known him over the years tell Reuters
  • Jan 2, 2019 – The airline says it has delayed payment to a consortium of Indian banks, led by SBI; ICRA cuts rating again
  • Jan 10 – Jet proposes to creditors that it will catch up with debt payments in arrears by September, and from April will meet debt payments as they come due, according to a document seen by Reuters
  • Jan 11 – Some aircraft lessors were prompted to explore taking back aircraft from Jet, people familiar with the matter told Reuters. Etihad is not “in any position to sink new equity into Jet at this juncture”, says a person familiar with Etihad’s position.
  • Jan 14 – Report states Goyal is likely to step down from the board and give up majority control
  • Jan 16 – TV channel reports that Etihad offered to buy Jet shares at a 49 percent discount and immediately release $35 million.
  • Jan 17 – Top creditor SBI says Jet’s lenders are considering a plan to resolve its debt issues, amid further reports that Goyal is willing to invest 7 billion rupees in the airline and pledge all his shares but wants to retain a 25 percent stake.
  • Jan 24 – India capital markets regulator says it has no “view” on relaxing norms for a Jet bailout
  • Jan 25 – Etihad appoints Alvarez & Marsal to conduct due diligence on Jet, sources tell Reuters
  • Jan 30 – Jet denies its aircraft had been grounded by GE Capital Aviation Services
  • Feb 1 – Jet agrees to most conditions set by Etihad Airways for a lifeline, a report says
  • Feb 8 – Airline grounds four aircraft after failing to make payments to lessors
  • Feb 14 – Jet’s board approves a rescue deal which will make its lenders its largest shareholders and fix a near 85 billion rupee funding gap
  • Feb 15 – Jet is seeking an $840 million bailout from shareholders and a state-backed fund, Business Television India reports

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Air France and KLM have reached a compromise on tightening ties between the airlines

Air France and KLM end power struggle, agree to closer ties

Air France-KLM Chief Financial Officer Frederic Gagey said the Air France-KLM plan involves better coordination and closer sharing of activities such as purchasing.

The Associated Press

Airfrance

Air France and KLM have reached a compromise on tightening ties between the airlines, ending a power struggle that had alarmed the Dutch government, staff and shareholders.

Air France also secured a salary agreement with pilots after protracted conflict. The alliance said on February 20 that strikes shaved 335 million euros off last year’s profits.

Details of the deals weren’t released.

Air France-KLM Chief Financial Officer Frederic Gagey said the Air France-KLM plan involves better coordination and closer sharing of activities such as purchasing.

Gagey told reporters that the agreement allows Pieter Elbers to stay on as KLM’s chief executive.

Air France-KLM CEO Benjamin Smith had reportedly pushed for an even closer alliance that Elbers opposed. That raised concerns in the Netherlands that Elbers would be pushed out and KLM’s role diminished.

Read More Merger & Acquisition

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