Latest News
-
Safran shares rise as French jet engine maker raises outlook
Safran, the French aerospace company, raised its annual forecasts on Thursday after reporting higher-than expected first-half profit. Its shares rose more than 4% thanks to a brisk demand of spare parts for jet engine. Safran, who together with GE Aerospace produce engines for Airbus medium-haul aircraft and Boeing long-haul jets reported higher maintenance profits, and its cabin interiors business, which had been struggling, saw further progress in the black. After certain adjustments, the company's closely-watched recurring operating income increased 27% to 2,51 billion euros ($2,87 billion) as revenues rose 13% to 14,77 billion euros. According to a consensus compiled by the company, analysts expected an average operating profit of 2,39 billion euros for the first half of 2014 on revenues of 14,74 billion euros. Safran has raised its forecast for the full year of the same profit measure from 4.8 to 4.9 billion euros to a range between 5.0 and 5.1 billion euro. This is an increase over a previously stated range. It forecast revenue growth of the low teens instead of 10%. Analysts at Bernstein said that Safran's aftermarket indicators, which are used to determine how much money engine manufacturers make during their regular visits to engine shops, exceeded expectations. Analysts say that the growing demand for air travel and the shortage of planes caused by a lack of deliveries from aircraft manufacturers have forced airlines into flying planes longer. This has led to extra maintenance. Safran shares rose 3.9% at midday. Shares of UK engine manufacturer Rolls-Royce rose also After improvements in its large wide-body engines led to strong first-half performance, it raised targets. ENGINE AGREEMENT Airbus, a jet maker that has been firing at engine manufacturers for delays in delivering new engines into jet factories because parts are diverted to repair shops to keep existing aircraft flying. Airbus and CFM have been strained by the tug-of-war between airplane hangars and aircraft factories over parts, while Pratt & Whitney, a rival engine manufacturer is gaining ground. Also under scrutiny Safran CEO Olivier Andries admitted that CFM was behind on deliveries to Airbus, partly due to a French strike. But he told reporters that the plans to catch up were "challenging, but totally achievable". He confirmed that CFM and Airbus had reached an agreement on the number of engines to be delivered in the remainder of the year, as the planemaker strives towards its delivery target. Airbus CEO Guillaume Faury On Wednesday The engine makers have agreed to help meet its delivery targets. Safran announced separately plans to build a carbon brakes plant in France, near Lyon. This follows a competition with Quebec and Oregon State, U.S.A. for the new major site. Safran, which was founded 20 years ago by the merger of Snecma, a state-owned engine manufacturer, and Sagem Electronics (now part of Sagem), acquired the Collins Aerospace actuation and control business for $1.8 billion last week. The company also sold a small U.S. operation to comply with the demands of regulators for the Collins acquisition. Safran estimated that the combined transactions will add between 600 and 700 millions of euros to the group's revenues for the remainder of the year.
-
Air France-KLM withdraws from the process to purchase stake in Spain's Air Europa
A spokesperson for the Franco Dutch airline group announced on Thursday that Air France-KLM had pulled out of the deal to purchase a stake in the privately owned Spanish airline Air Europa. The spokesperson for Air France-KLM said that Globalia, the company that controls Air Europa and is controlled by Air France, could not come to an agreement. Globalia's spokesperson did not respond immediately to a comment request. German Lufthansa, Turkish Airlines and IAG-owned British Airways have made bids to Globalia for a 20% stake in Spanish airline IAG. Air Europa, a Spanish airline that connects Madrid to large Spanish cities throughout Europe and Latin America and flies across Spain, is looking to raise money to pay back a loan from the government granted during pandemic. Airlines are under increasing pressure to consolidate their operations in Europe so that they can better compete against major global competitors from the United States or the Middle East. Many airlines are looking to expand on popular routes in Southern Europe. (Reporting and editing by Inti landauro, Bernadettebaum and Joanna Plucinska)
-
Sources say that India's GMR Airports has finalized details for its largest bond issue
Three sources familiar with the development said that GMR Airports in India has finalised terms for what will be its largest corporate debt offering. The company aims to raise over 60 billion rupees (685.13 millions dollars). The second largest airport operator in the country will raise 18 billion rupies through 18-month bonds. The issue will be primarily placed with mutual fund. The sale of bonds for three years will raise an additional 42 billion rupees, and large foreign lenders are expected to absorb the supply. Sources said that the company would pay a coupon of 10.50% annually on both maturities and the fundraising was expected to be complete in the next couple of days. The sources all requested anonymity, as the discussions are private. GMR Airports didn't respond to an email asking for comment. Crisil has rated the bonds of this company A+. The company manages several airports, including those in Delhi, Hyderabad and Bangalore. $1 = 87.5740 Indian Rupees (Reporting and editing by Dharamraj Dhutia, Khushi malhotra)
-
Heathrow airport in London is hit with more flight cancellations following an air traffic failure
On Thursday, at least 16 flights were cancelled to and from London Heathrow Airport. This was a day following widespread disruptions caused by technical issues with Britain's air-traffic control system. National Air Traffic Services, which controls air traffic for planes in UK airspace as well as the eastern part North Atlantic, announced on Wednesday that its systems are fully operational and capacity has returned to normal following the switch to a backup system. Cirium, an aviation analytics company, reported that the second NATS outage in two years also affected Gatwick Airport, near London, Edinburgh Airport, Scotland, and other locations. As of 1830 GMT, Wednesday, there were 122 cancellations. Heidi Alexander, Transport Minister, said that she would be meeting with NATS Chief Executive Martin Rolfe to "understand what happened and prevent a reoccurrence". Alexander, a social media user on X, wrote that NATS works closely with airports and airlines to clear up the backlog. Heathrow’s website indicated that 16 flights were cancelled Thursday, including those to and from New York, Berlin and Toronto, as well as departures. In March, the airport, Britain's biggest and Europe's busiest was also affected by an electrical fire in a sub-station, which left thousands of passengers stranded. Neal McMahon, Ryanair's Chief Operating Officer, called for NATS' Rolfe resigning. He said that no lessons were learned since the August 20, 2023 disruption brought about by a malfunction in the automatic processing flight plans. NATS did not respond immediately to an inquiry about McMahon’s remarks, despite apologising to those who were affected by the incident on Wednesday. (Reporting and editing by William Schomberg, Catarina demony)
-
Air France-KLM and Lufthansa defy worries about a trade war with Q2 growth
European airlines Lufthansa, Air France-KLM and United Airlines reported higher profits in the second quarter on Thursday. This was despite concerns that U.S. tariffs and economic uncertainty could affect transatlantic travel. The transatlantic routes are the most profitable for airlines. In recent years, British Airways owner IAG has benefited from this as European competitors have struggled. Delta was among the U.S. carriers that abandoned their full-year forecasts in spring due to a weakening of travel demand. This followed President Donald Trump’s tariffs, which shook consumer and business confidence. However, European airlines are bucking this trend. Lufthansa reported on Thursday that demand for its premium products in the United States was strong, despite the weakening dollar. Air France-KLM also highlighted the strength of their premium offerings. Lufthansa announced a 27% increase year-on-year in its second quarter operating profit, which reached 871 million euro ($995 millions), exceeding the analysts' average estimate of 805million euros. In a press release, Carsten Spohr, Chief Executive Officer of the company said: "Despite the fact that the second quarter saw a return to geopolitical crisis and economic uncertainty, we confirm today our positive outlook for this year." CONTRAST WITH THE UNITED STATES Bookings for U.S. Airlines have improved since late June, after a sharp decline in March and April following Trump's trade war. Although demand has stabilised, airline executives claim that it is still below the estimates made at the beginning of the year. The spending of price-sensitive travelers is also down, despite the uncertainty surrounding the U.S. economic situation and rising costs. Europeans are often known to be more price sensitive than Americans and have less spending power. The wealthy Americans who are visiting Europe this summer are not poor. Delta and United Airlines have performed better despite the fact that domestic U.S. travel is struggling, affecting budget airlines. FIXING WEAKNESSES, NEW STRENGTHS In a client note, Bernstein analyst Alex Irving stated that the investment in Italy's ITA Airways contributed a "surprisingly large" profit to group's bottom-line. Since the pandemic, Lufthansa struggled to cope with increasing labour costs and a slowdown in traffic from Asia. The airline issued two profit warnings. The company stated that the decision to focus on Italy as a cost-savings measure was paying off. Rome is much cheaper to maintain than German base. Air France-KLM’s operating profit for the second quarter rose to 736 millions euros, up from 513million euros a year ago. This is in line with analysts' expectations. Air France has been able to capitalize on the strong demand for flights to Paris, and its appeal as a luxury French airline. KLM has had ongoing problems at Schiphol Airport near Amsterdam.
-
Heathrow airport in London is hit with more flight cancellations following an air traffic failure
On Thursday, at least 16 flights were cancelled to and from London Heathrow Airport. This was a day following widespread disruptions caused by technical issues with Britain's air-traffic control system. National Air Traffic Services, which controls air traffic for planes in UK airspace as well as the eastern part North Atlantic, announced on Wednesday that its systems are fully operational and capacity has returned to normal following the switch to a backup system. Cirium, an aviation analytics company, reported that the second NATS outage in two years also affected Gatwick Airport, near London, Edinburgh Airport, Scotland, and other locations. As of 1830 GMT, Wednesday, there were 122 cancellations. Heathrow’s website indicated that 16 flights were cancelled Thursday, including those to and from New York, Berlin and Toronto, as well as departures. Heathrow Airport, Britain's and Europe's busiest, has not responded to an immediate request for comment about the recent cancellations. Neal McMahon, Ryanair's Chief Operating Officer, called for NATS CEO Martin Rolfe's resignation. He said that no lessons were learned since the August 20, 2023 disruption caused due to a malfunction in the automatic processing flight plans. NATS did not respond immediately to an inquiry about McMahon’s remarks after it apologized to those who were affected by this failure on Wednesday. In March, Heathrow also suffered a fire in a sub-station that stranded thousands. (Reporting and Editing by William Schomberg.)
-
After 25 people are injured by turbulence, a Delta flight is diverted to Minneapolis.
The airline released a statement saying that 25 people were hospitalized on Wednesday, after a Delta Air Lines flight diverted from Amsterdam to Salt Lake City due to severe turbulence. Delta Airlines said that flight DL56 had been diverted to Minneapolis-Saint Paul International Airport due to "significant turbulence". New York Times, citing airline, reported that the plane carried 275 passengers, and 13 crew. Delta said that medical personnel evaluated all passengers after the A330 900 landed safely at Minneapolis. Twenty-five people on board the plane were taken to hospitals in their locality for treatment and evaluation, it stated without providing any further details. After reaching an altitude of 37,000 feet (11 277.6 meters), the aircraft experienced turbulence. It briefly climbed to 38,000 feet, before descending to just under 35,800 feet. Flightradar24, a flight tracking service, reported that it stabilised at 37,000 feet. (Reporting and editing by Kate Mayberry in Bengaluru, with Disha Mishra reporting from Bengaluru)
-
Rolls-Royce increases profit and cash-flow outlook after strong H1
Rolls-Royce, a British aero-engineer, raised its outlook for the full year in terms of both operating profit as well as free cash flow. This was after navigating supply chain challenges and overcoming tariffs. The company's operating profit guidance was increased by 400 million pounds (300 million pounds) to 3.2 billion pound and its free cashflow by 200 million pounds, to 3.1 billion pound. Tufan Erginbilgic is the chief executive of Rolls-Royce, and has been in charge since 2023. He said that his multi-year turnaround continues to produce results. He said that despite the challenges posed by the supply chain and the tariffs, "our actions have led to strong results in the first half of the year." He said Rolls has improved the time that its engines are on the wing, a demand of its airline clients. It also improved the profitability in its maintenance services. He said that the power systems division had grown as a result of gaining business from government and data centre customers.
ITA Airways' business plan aims for long-haul expansion and deeper Lufthansa ties
In a Wednesday statement, ITA Airways said that the board had approved a business plan for 2026-2030, which focuses on long-haul growth, fleet renewal and closer integration with Lufthansa.
Italian airline, owned by the Italian government in majority and by Lufthansa at 41%, plans to expand intercontinental flights from Rome to North America, South America and Asia to increase tourism and trade.
The airline plans to upgrade its fleet by adding one new long haul aircraft every year starting in 2026. By 2030, it hopes to operate around 100 Next-Generation jets.
ITA is expecting deeper synergies between Lufthansa and ITA, including joining Star Alliance by 2026 and taking part in joint ventures on transatlantic and Japanese routes.
"We are laying down the foundations to continue to be Italy's reference airline with a role strategic for the national economy system and to improve connectivity with the rest the world," stated chairman Sandro Papalardo.
ITA CEO Joerg eberhart said that the strategy will create jobs and have a positive impact on the industry. (Reporting and editing by Angelo Amante)
(source: Reuters)