Air France-KLM and Delta Air Lines Partner to Bid 51 percent stake in Virgin Atlantic

Air France-KLM and Delta Air Lines are said to have partnered up for a potential bid on a 51% stake in Virgin Atlantic, the carrier owned by British entrepreneur Sir Richard Branson. The SkyTeam alliance members have reportedly appointed Goldman Sachs to advise them on a possible approach.

Sir Richard’s 51% stake is valued from £500 million to £1 billion by analysts. He hired Deutsche Bank to examine the airline’s strategic options after British Airways and Iberia completed their £5.2 billion merger, as well as made a transatlantic pact with American Airlines. The other 49% of Virgin Atlantic is owned by Singapore Airlines, after the carrier purchased it in 1999 for £600 million.

Air France and Delta teamed up last year to invest £1.3 billion in Japan Airlines. The Asian airline rejected the offer in favor of continuing its membership in the Oneworld alliance with British Airways and American Airlines.

Other airlines around the world have been consolidating and forging partnerships recently so that they can survive the recession and other factors, like the rising price of oil. However, Virgin Atlantic hasn’t become a member of any big alliances, and a review of the carrier’s position found several possible outcomes. These include a codeshare deal, selling part of Singapore Airlines’ stake to a 3rd party, joining an alliance and for Sir Richard to give up majority control as part of a bigger transaction.

Another airline interested in a bid on Sir Richar’s stake is Etihad Airlines. Chief executive James Hogan wrote to Deutsche Bank, expressing his interest in a deal, and he has hired Bank of America Merrill Lynch for advice.

UAE Air Traffic Expected to Increase Ten Percent This Year

The UAE air traffic will grow over ten per cent this year, according to a leading member of the trade body for airlines around the world.

Speaking on Emirates on Dubai One, Dr Majdi Sabri, the Regional Vice-President, Mena, of the International Air Transport Association says that the global airline industry is seeing a “shift eastwards”.

Members of the Iata represent over 93 per cent of global airline traffic, and Dr Sabri says that the UAE is at the forefront of regional growth: “There are two very strong airlines with an aggressive growth strategy. This is coupled with efficient airports and infrastructure”.

The UAE is also reaping the benefit of its position as a travel hub with an explosion of passengers from Asia and the rest of the Middle East.

Dr Sabri said the travelling middle class will double or triple in numbers by 2030, but will remain steady in Europe and the US.

Airline Trade Group Expects To Chop Loss In Half In 2010

Rising demand will reduce carriers’ red ink to $5.6 billion, the International Air Transport Assn. predicts. A U.S. group, citing volatile fuel prices, is not so optimistic.

The airline industry will rebound modestly next year, losing only about half of what it is expects to lose in 2009, a trade group predicted Tuesday.
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American Airlines Steps Up Efforts To Woo JAL

American Airlines on Thursday stepped up efforts to save its partnership with Japan Airlines, the troubled carrier that is the lynchpin of its Asian network, by promising a $1.1bn investment to support the group.

The investment – much of which would be provided by US private equity group TPG – exceeds a rival offer from Delta Air Lines, which is trying to lure JAL away from Amercian’s OneWorld alliance.

Last month Delta and its SkyTeam partners offered to inject $500m of new equity into JAL and to extend another $500m in asset-backed financing and compensation for the cost of switching teams.
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American Airlines Future investment in Japan Airlines Corp.

American Airlines said preparations for an investment in Japan Airlines Corp. are at an advanced stage after Delta Air Lines Inc. announced a package of incentives to lure the Asian carrier into a new alliance.

Japan Air, as the airline is known, would face a regulatory risk in leaving American’s Oneworld group and joining Delta’s SkyTeam, Theo Panagiotoulias, American’s Pacific director, told reporters today in Tokyo.
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Airlines Stock Reported : Airline Stocks Traded Higher, Gains On September

Airline stocks traded higher Monday, gaining as major U.S. carriers released their September traffic statistics.

At last check, the NYSE Arca Airline Index (XAL) added 1.2% to 27.25 points as all but one of its 13 components moved into the green. In the last 52 weeks, the benchmark index has moved in a range of 30.95 to 12.62 points.
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Cyprus Airways Posts H1 Loss On Passenger Drop

Cypriot national carrier Cyprus Airways posted a net loss of EUR3.48 million euros (USD$5 million) in the first half of the year, with higher losses avoided by gains on the sale of older aircraft.

Revenue fell 17 percent to EUR116.3 million on a 53,000 drop in passenger numbers compared with 2008.
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Frontier Airlines Reports July Net Profit of $17.8 Million

Frontier Airlines Holdings, Inc. today reported a net profit of $17.8 million for the month of July and its ninth consecutive monthly operating profit. The results were filed in the Company’s unaudited Monthly Operating Report for July 2009.
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US Airline Shares Slip As Recessionary Fears Take Hold

Shares of major U.S. air carriers were slipping Thursday with the wider market on new recessionary concerns, but at least one analyst said that some airlines have fared surprisingly well despite fewer passengers. Read more