Latest News
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Virgin Australia is seeking to raise $442.8 Million in IPO term sheet.
Virgin Australia, owned by Bain Capital According to a termsheet seen on Wednesday, is hoping to raise A$685 (442,78) million in an initial public offer. Virgin has set its offer price at A$2.90 a share. The offer size is 30% of Virgin's issued capital. Bain Capital didn't immediately respond to our request for a comment. The term sheet stated that the airline, Australia's 2nd largest after Qantas, would sell 236.2 millions shares to value the company A$2.32 Billion on a fully diluted base. Virgin's enterprise value will be A$3.6 billion after subtracting its A$1.31billion net debt. According to the terms sheet, Bain's stake will drop from 70% to 39.4% after the IPO. Qatar Airways will keep a 23% share.
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CANADA-CRUDE-Discount on Western Canada Select heavy crude widens; wildfires reduce Canadian output
The discount between the benchmark North American West Texas Intermediate (WTI) futures and Western Canada Select (WCS), widened Tuesday, but was still in historically tight territory due to wildfires that continue to disrupt Canadian oil output. WCS for Hardisty, Alberta delivery in July settled at $9 per barrel below the U.S. benchmark WTI according to brokerage CalRock. It had settled at $8.80 per barrel under the U.S. standard on Monday. Calculations show that wildfires in Canada's oil producing province of Alberta reduced Canada's daily crude output by about 7%. Although no significant infrastructure was damaged, companies shut down production of 344,000 barrels a day and evacuated some workers as a precaution. * The fires occur at a moment when Canadian heavy crude is already trading at an historically low discount, in part because of the Trans Mountain Pipeline expansion that was opened one year ago. This increased the country's capacity to export oil. Canadian crude also benefits from U.S. Sanctions on Venezuela and other nations, which boosts demand for heavy crude producers who are not sanctioned. * Oil prices rose about 2% globally on Tuesday, reaching a two-week peak as geopolitical tensions persist between Russia and Ukraine, and the U.S.
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ONEOK purchases remaining Delaware Basin Joint Venture stake for $940 Million
U.S. Pipeline Operator ONEOK announced on Tuesday that it has purchased the remaining stake in Delaware Basin Joint Venture from NGP XI Midstream Holdings for $940 million in cash and stock. By acquiring the remaining interest of 49.9%, ONEOK gained the sole ownership of this basin. It operates natural gas gathering, processing, and storage facilities in West Texas, and New Mexico’s Delaware Basin. The total processing capacity is over 700 million cubic feet a day. In the last two years, the operator of the pipeline has diversified its portfolio through acquisitions. These include a Gulf Coast NGL system from Easton Energy, and the purchase of Medallion Midstream, and EnLink Midstream. These moves are part a larger effort to increase its presence in Permian basin amid the growing consolidation of the U.S. Energy sector. The deal is worth $530 million cash and $410 millions in ONEOK common shares, according to the company. ONEOK has a pipeline network of 60,000 miles that transports crude oil, refined products and natural gas liquids. (Reporting and editing by Mohammed Safi Shamsi in Bengaluru. Katha Kalia is based in Bengaluru.
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US Airlines seeks 2-year delay in secondary cockpit barrier rule
The Federal Aviation Administration said that major U.S. carriers want to delay for two years, by August of this year, the requirement to install a secondary barrier in the cockpit to prevent intrusions. Airlines for America, a trade group that represents American Airlines, United Airlines and Delta Air Lines as well as other major carriers, argued in a petition to the FAA that it should delay the finalization of the 2023 requirement because the FAA has yet to approve a secondary cockpit barricade and there are no approved manuals, training programs or procedures. The FAA announced that it would be accepting public comments on the airline's request until June 23. The FAA adopted security standards for the flight deck after the September 11 hijackings of four U.S. planes. These standards are designed to prevent forcible entry and unauthorized access. In the petition, the airlines said that they expected the FAA would certify the barriers by June or July. The FAA declined to comment immediately. This rule requires aircraft manufactures to install a physical second barrier on all planes that are used for commercial passenger services in the United States. In 2023, the FAA stated that the additional barrier would protect the flight deck from intrusions when the flightdeck door is opened. Air Line Pilots Association president Jason Ambrosi criticised the industry's request. He said: "We urge FAA to reject the latest stalling tactics and implement the secondary barrier requirement, as Congress mandated, without delay." Boeing, Airbus and Airlines for America argued for three years, but unions in 2023 wanted the rule to take effect immediately after publication. According to a federal law passed in 2018, the FAA had to adopt rules by 2019. However, it has stated that it must follow certain procedural rules to be able to impose new rules. The FAA does not require retrofitting of existing aircraft. The FAA set up rules in 2007 to address the security of the flight deck when the cockpit doors were opened. These included requiring that the door must be locked while the aircraft is in operation unless it was necessary to unlock it for authorized personnel. (Reporting and editing by Leslie Adler, Marguerita Choy and David Shepardson)
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Bayer executive: Airlines need to sign long-term agreements on greener fuels in order to increase volumes.
MONTREAL (Rtrs), June 3, 2008 - If airlines want to increase global volumes of lower-emission fuel needed for industry climate goals, they need to sign long-term agreements that will allow them to purchase larger quantities of sustainable aviation. The International Air Transport Association's airline members are committed to the goal of zero net emissions by 2050, despite warnings from experts that they will have difficulty meeting such sustainability goals because of low production of SAF - which is more costly than conventional jet fuel. IATA, who concluded a summit in India Tuesday, expects sustainable aviation fuel production to double by 2025, reaching 2 million tons, or 0.7% of airline fuel consumption. In Montreal, Matthias Berninger said that while airlines have asked for more action from energy companies and partners to increase SAF volume, there should be more long-term purchasing of the fuel. This is similar to certain commitments made in the renewable energy industry. Bayer's Monsanto division sells seeds and insecticides to farmers that grow crops used as biomass feedstocks for biofuels. Berninger said that if airlines commit to buying a certain quantity over a period of time we can guarantee farmers will grow the crop and processors will process the crop. Berninger spoke on the sidelines the International Civil Aviation Organization’s aviation climate week. "And whether or not this supply meets the demand (market) depends on the long-term buying contracts of the airline sector sending a very clearly defined demand signal similar to what we currently have in the renewables space." SAF is made from plants, waste, cooking oil, and other products. (Allison Lampert, Montreal; Editing and proofreading by David Gregorio).
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Aerospace and airline industries warn that US tariffs may put safety at risk.
On Tuesday, groups representing U.S. and global airlines warned that new tariffs on imports of commercial aircraft, jet engine parts and other components could threaten air safety or the supply chain, and have unintended consequences. After President Donald Trump announced in April sweeping duties against trade partners, the industry is already facing 10% tariffs. The Commerce Department launched an investigation called Section 232 last month to examine the risks imported goods pose to U.S. security. This could lead to even higher tariffs for imported planes, engines, and parts. In a recent filing, the Aerospace Industries Association (which represents Boeing, Airbus and hundreds of other aerospace companies) urged the Commerce Department to extend the period for public comments on Section 232 from 90 days to 180 days, and not impose any new tariffs during that time. The group also urged for further consultations with the industry regarding "any Section 232 Tariffs" to ensure that they accurately reflect national safety concerns and don't put supply chain and aviation security at risk. The AIA highlighted the impact of a fire that occurred at a Pennsylvania aerospace fastener manufacturer in February on production, and the difficulty in finding parts from new suppliers. The group stated that it could take as long as 10 years to find a new supplier in the country and to ensure they have all of the necessary safety certifications. Airlines for America warns that tariffs will increase the cost of shipping and plane tickets. The airlines stated in comments filed with the Commerce Department that "injecting higher costs will weaken our economy and national security, and have a debilitating effect on the domestic commercial aircraft industry's capacity to grow, compete and innovate." The trade group warned that the tariffs could destabilize the aviation supply chain and lead to more counterfeit parts being sold. They also said the tariffs would have unintended and unexpected consequences. Airlines and manufacturers are lobbying Trump for a return to the tariff-free regime of the 1979 Civil Aircraft Agreement. The U.S. sector benefited from a $75 billion trade surplus each year. The agreement stipulates that parts must be approved by the Federal Aviation Administration in order to qualify for tariff-free status. (Reporting and editing by David Shepardson, Nia Williams and Chizu Nomiyama)
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Beta Technologies performs the first all-electric aircraft touchdown
Beta Technologies, the company and port officials announced on Tuesday that it was the first U.S. firm to land an electric aircraft in the New York/New Jersey area. In a press release, the airline said that a flight from New York to John F. Kennedy International Airport took 45 minutes. The pilot was accompanied by four passengers. Airlines and transportation companies are developing services that use electric aircraft powered by batteries, which can land and take off vertically. This allows them to transport travelers on short city trips while avoiding traffic. The Federal Aviation Administration (FAA) finalized in October comprehensive training and certification rules for air taxi pilots. They called it "the last piece of the puzzle" for safely introducing this aircraft in the near future. Beta also raised $318 in equity capital for production, certification and commercialization of its electric aircraft. This brings the total value raised to over $1 billion. The Vermont-based firm was founded in 2017. Kyle Clark, the CEO and founder, stated in a statement that the aircraft had undergone years of safety testing. (Reporting by Aishwarya Jain in Bengaluru; Editing by Maju Samuel)
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Venture Global shares increase after it announces CP2 site work
Venture Global Inc.'s shares rose nearly 20% on Tuesday, after the Louisiana-based producer of LNG announced that it had started construction on its proposed CP2 facility in the state following federal approval. CP2 is the largest LNG export facility for the United States, with a capacity of 20 million metric tons per year. This will help the nation remain competitive. The world's largest supercooled gas exporter The company stated that CP2 expects to deliver the first LNG in 2027, and has already made significant progress in terms of engineering, procurement, and contracting. Venture Global stated that off-site maintenance of the modules and equipment at the plant will help to speed up construction. Venture Global is yet to officially approve the final financial approval of the project. Venture Global will be the biggest LNG exporter of the U.S. if the project is built. Cheniere Energy will not even come close. (Editing by Nick Zieminski).
Trade barriers, plane delivery delays challenge global airline growth
On Monday, the head of the global airline industry said that increasing trade barriers could harm the economy and air travel sector. He also stated that "unacceptable delays" in plane deliveries were hampering growth plans during a period of record passenger numbers.
IATA (International Air Transport Association) has slashed its key profit forecast for the industry in 2025, blaming rising trade tensions and a decline in consumer confidence.
Willie Walsh, IATA's Director General, said that flying is a form of connectivity which makes the world more prosperous. He made this statement at the annual meeting of the group in New Delhi.
"That is in stark contrast to the isolationism of trade barriers, and the fragmentation multilateral system based on rules. They destroy wealth and lower standards of living. This is a very important message for the times in which we live," he said.
The tariffs that President Donald Trump imposed have caused consumers to postpone or cancel their travel plans, especially in the United States.
The threat also includes a pact that was signed by more than 30 nations to eliminate all duties on aircraft parts and components.
Walsh claimed that there is no evidence to suggest aircraft prices have increased because of tariffs. However, he added that airlines will resist any attempts by aerospace manufacturers (or their agents) to increase prices. He also called on governments to keep aerospace out from trade wars.
IATA represents more than 300 airlines, which account for over 80% of the global traffic.
Walsh stated that the progress made in environmental sustainability is not as good as it could be. He criticized energy firms for failing to produce enough sustainable aviation fuel, which is made of waste oil and biomass and costs more than traditional jet fuel.
IATA has warned that airlines may struggle to reach their sustainability goals. But Walsh said the industry still aims for net-zero emission by 2050, based on a gradual shift to SAF.
Delivery Delays
After a recovery in the passenger market following the pandemic, more people are now flying. However, airline growth is being hindered by prolonged plane delivery delays as well as supply chain bottlenecks that increase maintenance and repair times.
Walsh said that predictions of delays in aircraft deliveries throughout the decade were "absolutely unacceptable". Walsh said that the airline industry is evaluating its legal options in regards to the delays but prefers to work collaboratively with manufacturers.
He said, "The manufacturing industry is in a bad state."
IATA reported that the number of 2025 deliveries was 26% lower than what had been promised a year earlier, but at 1,692, this would still be the most new planes delivered since 2018.
IATA's update on its industry outlook stated that "further downward revisions will be likely given the supply chain issues expected to persist through 2025, and perhaps even the next decade."
Tim Clark, the president of Dubai's Emirates Airlines, the largest international airline in the world, stated on Sunday that pandemics were no longer acceptable as an excuse for delays. He challenged the planemakers to accept responsibility.
Flyadeal, a Saudi low-cost carrier, also expressed similar frustration.
"Delays have become inexcusable." To be honest, we are getting more and more agitated because of the lack of transparency. How can we plan anything else? "It's just beyond a joke," Flyadeal CEO Steven Greenway said.
Boeing, the U.S. aircraft manufacturer, is trying to stabilize and ramp up its production after a quality problem and a strike last year slowed down output.
Airbus, Europe's largest aircraft manufacturer, warned airlines last week that they could face another three years in delivery delays.
In spite of the challenges, airlines are still seeking to buy more planes in order to meet future demand for travel.
Air India, a Tata Group company, is in negotiations with Airbus or Boeing to place a massive new order, including 200 additional single-aisle aircraft. This deal will be a top-up of a huge 2023 deal as the former government carrier pursues an ambitious multi-billion dollar revamp. (Reporting and writing by Lisa Barrington in New Delhi, editing by Jamie Freed.)
(source: Reuters)