Industry news
JetBlue strikes $3.8bn deal to acquire Spirit Airlines
acquisitions
American budget carrier JetBlue Airways has reached an agreement to purchase rival Spirit Airlines in a deal valued at $3.8bn, following a protracted bidding war.
This combination will create the nation’s fifth-largest airline. According to the definitive merger agreement, JetBlue will acquire Spirit by paying $33.50 a share in cash.
This includes a $2.50 per share prepayment once Spirit stockholders clear the deal. JetBlue also agreed to pay a monthly ticking fee of $0.10 from January next year until deal completion.
This deal was signed after Spirit Airlines moved away from the merger transaction with Frontier Group Holdings, the parent of Frontier Airlines.
JetBlue believes that the consolidation would expedite its growth plan with more than 1,700 daily flights operating to more than 125 destinations across 30 countries.
The deal also awaits regulatory approval, with completion anticipated by the first half of 2024. Until the deal is closed, the two companies will operate as independent business entities.
The merged group will be based in New York, having a combined fleet of 458 aircraft and an order book of over 300 Airbus aircraft. The combined entity will serve 77 million customers.
Covid-19
Beijing resumes international air travel after Covid-19 ban
The Chinese capital of Beijing has restarted the commercial operation of incoming passenger flights from abroad after remaining secluded for over two years due to the Covid-19 outbreak, as per a Bloomberg report.
Despite relaxing pandemic-induced curbs, parts of the country still witness severe isolation norms.
According to information available on Air China’s website, the carrier has resumed a direct daily flight from Paris, France. Another airline, ANA, is set to restart weekly flights from Narita, Japan, next month.
Early this month, China National Radio informed that Etihad Airways recommenced direct flights to Beijing late last month.
The resumption followed after China cut the quarantine duration for inbound passengers by half to seven days.
China’s Civil Aviation Administration barred the arrival of direct international flights in early 2020.
It has mandated people looking to visit Beijing to first arrive at a pre-approved place for quarantine and then to proceed with further travel in the country.
Business & Operations
LHR reports £321m H1 loss, rules out dividend for 2022
London Heathrow Airport (LHR) in the UK has registered a £321m adjusted pre-tax loss in the first half of this year despite passenger volume returning to near pre-Covid-19 levels.
It said that the loss was due to staff shortages, as well as an increase in costs.
Revenue in the six months ended 30 June 2022 stood at £1.28bn, a 268% surge from £348m in the prior year.
Heathrow also highlighted the shortage of ground handling staff, which is said to have constrained its capacity.
According to the airport, the situation has improved after it restricted daily passenger numbers to 100,000.
This cap is expected to be in effect until airlines raise the number of ground handlers.
The airport also said that it is still loss-making and does not expect to offer dividends for the rest of this year.
Heathrow added that the passenger numbers, revenues and operating costs are in line with its H7 business plan that was submitted to Civil Aviation Authority.
Workforce
BA workers at Heathrow accept new pay offer
British Airways (BA) workers employed at London Heathrow Airport (LHR) have accepted a new pay offer, which averts the prospect of strike actions by the staff over this quarter.
Last month, BA workers, which includes mainly check-in staff, voted to go on a strike to overturn a 10% pay cut imposed by the airline during the pandemic period.
However, BA made a new offer following extensive negotiations between the parties. The workers, represented by the GMB and Unite unions, have agreed to the new payment terms.
GMB members would now receive a consolidated pay rise of 8% and a one-off bonus. Additional payment for irregular shifts has also been reinstated.
Unite said that the new offer is worth 13% for the workers. The payment will be made in multiple stages.
The proposed strike action would have caused significant disruption at Heathrow airport during the busy holiday period. The airport has already limited the daily passenger count to 100,000 until 11 September.
FUels
ZeroAvia and EIA partner to develop hydrogen infrastructure
Hydrogen-electric aircraft developer ZeroAvia has partnered with Edmonton International Airport (EIA) in Canada to work on hydrogen infrastructure development for zero-emission flights.
The duo will explore hydrogen use for airport operations decarbonisation and the broader airport ecosystem, with plans to develop hydrogen infrastructure at both Villeneuve Airport and the main airport.
They will conduct a pilot programme using a hydrogen ecosystem to fuel a demonstrator aircraft and other operations.
Thereafter, the two will collaborate to set up some of the world’s first commercial routes.
The initial focus will be to use gaseous hydrogen as a fuel. This will be done using ZeroAvia’s knowledge in operating and developing its Hydrogen Airport Refuelling Ecosystem.
Fuels
UK sets SAF mandate and unveils advanced 'Jet Zero' plan
The UK Department for Transport has launched the new ‘Jet Zero’ strategy with objectives to boost the country’s sustainable aviation fuels (SAF) sector and attain net-zero emissions in domestic aviation by 2040.
This new strategy pledges net-zero emissions at all airports in England by the same year.
It builds on the government’s economy-wide goal of reaching net-zero emissions by 2050 and the Transport Decarbonisation Plan.
As part of the new strategy launched at Farnborough International Airshow, the government plans to have at least five commercial SAF plants under construction by 2025.
It also mandated the production of at least 10% of aviation fuel from sustainable sources by 2030.
WORKFORCE
Paris airport staff end strike after pay agreement
Employees of ADP, Paris’ main airport operator, have cancelled plans for further strikes after a pay hike agreement of 3% from management.
ADP Group, which operates the Paris-Charles de Gaulle and Orly airports, has agreed on individual salary increases for nearly 1,800 staff.
The unions were earlier demanding a 6% pay increase, which dated back to 1 January, in order to compensate for inflation.
The latest agreement has averted strikes planned for this weekend, which would have created chaos at the beginning of the French summer holidays.
Employees, including ground staff and firefighters, have been holding strikes over wages and working conditions since June, leading to hundreds of flights at Paris airports being cancelled.
Recently, a technical glitch at the Paris-Charles de Gaulle airport’s baggage sorting system caused 15 flights to leave without passenger luggage.
This worsened disruptions that were already occurring at the airport due to workforce shortages, caused due to headcount reduction measures carried out during the pandemic.
CARGO
Amazon’s cargo hub plan at EWR falls through
Plans by Amazon to create a freight hub at Newark Liberty International Airport (EWR), New Jersey, US, have been abandoned after opposition by environmental and labour groups.
The project involved a 20-year lease for two airport buildings that the e-commerce giant planned to redevelop into an air cargo campus.
Last August, the Port Authority of New York and New Jersey entered an agreement with Amazon Global Air for the project.
It would see the e-commerce giant invest $125m in the overhaul of the two buildings and pay the Port Authority more than $300m over 20 years.
The project was anticipated to create 1,000 jobs.
However, activists demanded some concessions from Amazon, including a zero-emissions benchmark at the facility and labour agreements.
Along with the impediment that the facility would increase pollution in the already-polluted area, activists also raised concerns about Amazon’s poor track record in labour working conditions.
They also criticised the lack of opportunities for public comment on the project.
In brief
AAHK extends airport relief package
Airport Authority Hong Kong (AAHK) has announced a further extension of the relief package for the local aviation sector by two more months until September 2022.
KLIA to deploy A-CDM system
Kuala Lumpur International Airport (KLIA) has unveiled plans to deploy the Airport Collaborative Decision-Making (A-CDM) integrated system to boost efficiency in its operations.
Aena swings to profit in first half following losses in eight quarters
Spanish airport operator Aena reported a net profit of €163.8m in H1 2022 as against a loss of €346.4m in the same period last year.
TPA begins biometric screening at departure gates
Tampa International Airport (TPA) has deployed biometric screening at some of its departure gates. This follows a year-long pilot and is aimed at improving safety and efficiency during boarding.
TAV concludes initial phase of SKD digitalisation
TAV Airports’ unit TAV Technologies has wrapped up the initial phase of work to completely digitalise the operations of Samarkand International Airport (SKD) in Uzbekistan.
workforce
Paris airport staff end strike after pay agreement
Employees of ADP, Paris’ main airport operator, have cancelled plans for further strikes after a pay hike agreement of 3% from management.
ADP Group, which operates the Paris-Charles de Gaulle and Orly airports, has agreed on individual salary increases for nearly 1,800 staff.
The unions were earlier demanding a 6% pay increase, which dated back to 1 January, in order to compensate for inflation.
The latest agreement has averted strikes planned for this weekend, which would have created chaos at the beginning of the French summer holidays.
Employees, including ground staff and firefighters, have been holding strikes over wages and working conditions since June, leading to hundreds of flights at Paris airports being cancelled.
Recently, a technical glitch at the Paris-Charles de Gaulle airport’s baggage sorting system caused 15 flights to leave without passenger luggage.
This worsened disruptions that were already occurring at the airport due to workforce shortages, caused due to headcount reduction measures carried out during the pandemic.
cargo
Amazon’s cargo hub plan at EWR falls through
Plans by Amazon to create a freight hub at Newark Liberty International Airport (EWR), New Jersey, US, have been abandoned after opposition by environmental and labour groups.
The project involved a 20-year lease for two airport buildings that the e-commerce giant planned to redevelop into an air cargo campus.
Last August, the Port Authority of New York and New Jersey entered an agreement with Amazon Global Air for the project.
It would see the e-commerce giant invest $125m in the overhaul of the two buildings and pay the Port Authority more than $300m over 20 years.
The project was anticipated to create 1,000 jobs.
However, activists demanded some concessions from Amazon, including a zero-emissions benchmark at the facility and labour agreements.
Along with the impediment that the facility would increase pollution in the already-polluted area, activists also raised concerns about Amazon’s poor track record in labour working conditions.
They also criticised the lack of opportunities for public comment on the project.
