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Hospitality Ireland Presents Round-Up Of Global Airline, Travel And Aviation News

By Dave Simpson

Hospitality Ireland presents round-up of global airline, travel and aviation news.

Investors Challenge Budget Airline Wizz Air Over Labour Rights

A group of 14 investors has called on Wizz Air to allow employees to form and join trade unions, saying their research suggested the London-listed budget airline was discouraging the practice in breach of staff rights.

The investor group, which raised their concerns in a letter seen by Reuters, included Britain's Ardevora Asset Management and Denmark's AkademikerPension. The Danish fund threatened to sell its holding if the Budapest-based firm did not respond.

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Wizz Air told Reuters it could not comment on specifics as it was in "active discussion with the investors directly".

But it said it took engagement with staff "very seriously" and was confident that structures and processes to support open and transparent engagement were working "extremely well".

In the letter, the investors said freedom to unionise was enshrined in global and regional conventions and laws but said their research suggested a pattern of behaviour at the company to block employees doing so.

The letter highlighted six examples dating back to 2014, when a Romanian court fined the company after 19 employees were dismissed shortly after starting a union.

The letter quoted an interview in June 2020 with Chief Executive Jozsef Varadi in which he said the firm was "keeping out unions everywhere" as they were "killing the business".

In April 2021, Wizz Air rejected calls from unions in Italy to agree a labour contract with them and told Italy's labour ministry it planned to operate without engaging with unions.

"There is a growing body of evidence of workers being blocked to join unions or sacked when they do so. This is completely unacceptable," said Jens Munch Holst, chief executive of AkademikerPension, a $23 billion Danish pension fund.

"Our message is clear to the company. We will wait until 20 December and if our meeting requests are not met, expect exclusion," he said, adding that respecting workers' rights was also about caring for passenger safety.

In the letter, investors acknowledged the company had sought to manage labour relations through an internal body known as the Wizz People Council but were concerned about its effectiveness.

Wizz Air said the council provided a forum for employees to discuss important issues, held frequent employee engagement surveys and had a programme for "regular two-way dialogue" with the chief executive.

The investors' letter pointed to a whistleblower report flagging concerns about pilot fatigue and flight safety, adding that recognising workers' freedom to form and join unions was "also an important risk mitigation strategy."

"To remedy our concerns, we therefore encourage Wizz Air to publicly and formally recognise employees' rights to form and join unions; and commit to non-discrimination on the basis of union membership," it said.

Singapore Airlines Backs New Airbus A350 Freighter

Singapore Airlines (SIA) has thrown its weight behind efforts by Airbus to penetrate the booming air cargo market, signing a provisional deal to buy seven A350 freighters and become the first major airline operator of the plane.

The backing from a blue-chip Asian carrier is a fillip for the European planemaker's efforts to break into a lucrative niche long dominated by its U.S. archrival Boeing.

Deliveries will begin in the fourth quarter of 2025, the airline said on Wednesday December 15. It did not provide a value for the order.

A letter of intent includes a quid pro quo, however, allowing the airline to swap part of the order for 15 A320neo jetliners and two A350-900 passenger versions that it had previously ordered from Airbus and remain to be delivered.

Those 17 planes had a list value of $2.3 billion when Airbus last published prices in 2018, roughly the same price as the estimated value of the freighters.

While order prices typically fall well below catalogue ones, this is a possible indication that the planemaker is not making major extra revenue from the deal, analysts said.

Until now, Airbus has been reluctant to let many airlines cancel planes, preferring to delay delivery and keep orders on its books. But a big-name endorsement for its latest assault on the cargo market might have tipped the balance, several industry sources said.

Airbus will also easily find homes for the in-demand A320neos and is anxious to prop up weak wide-body A350 production, making it a net winner from the deal, they added.

The deal also represents the first key order for the A350 since Airbus was plunged into a dispute with the plane's launch customer, Qatar Airways, over erosion to the surface of existing jets.

Reuters reported in November that Airbus was aiming to land an A350 freighter deal with Singapore as Qatar Airways looked likely to back rival Boeing's 777X freighters.

Qatar Airways Chief Executive Akbar Al Baker appeared to confirm a major upcoming 777X order on Tuesday, days after Airbus took the increasingly bitter dispute to lawyers.

"I was looking very positively at (Airbus) freighters. But they have destroyed that relationship," Al Baker told the South China Morning Post in an interview. "I don't think that they will ever get a single size of order that we would have placed for the freighter."

Industry sources say Qatar Airways is expected to order at least 34-35 777X freighters to renew its current fleet.

Singapore Airlines said its seven new A350 freighters, along with options for another five, would replace its own fleet of seven ageing Boeing 747 freighters and reduce carbon emissions.

It is the third customer for the A350F freighter after lessor Air Lease Corp and French cargo company CMA CGM.

"The selection of the A350F to replace the 747F is sensible as SIA already has the world's largest A350 passenger fleet, creating attractive synergies for its future cargo operation," said Singapore-based aviation analyst Brendan Sobie.

He said the conversion of 15 A320neos made sense because the airline had too many such planes on order for the post-pandemic world. Others have been buying such jets, however.

Cargo accounted for two thirds of SIA's revenue in the six months to Sept. 30. The airline, which lacks a domestic market, has been hit hard by pandemic-related border closures.

SIA on Wednesday December 15 said it should reach 45% of pre-pandemic passenger capacity in December, up from an earlier estimate of 43% as Singapore gradually opens its borders. In November, it filled about a third of its passenger seats.

FOCUS-Airlines Place Their Bets, Looking Past Pandemic To Renew Fleets

As the world hunkers down for Omicron, some investors might expect the global jet market to be withering away. Far from it.

Business has begun humming again as airlines look to snap up the greener passenger and freight planes they believe will give them an edge in a post-pandemic recovery driven by predicted travel demand plus the relentless rise of online shopping.

From Arizona to Amsterdam, some of the industry's sharpest buyers are eyeing efficient jets for the second half of the decade, aiming to get ahead of the long waiting lists they fear could derail their growth and environmental targets.

On Wednesday December 15, Singapore Airlines kicked off a trio of major decisions, with a tentative order to replace its cargo fleet with a new A350 lightweight freighter offering from Airbus.

Australia's Qantas Airways on Thursday December 16 selected Airbus to replace its fleet of ageing narrowbodies in what Chief Executive Alan Joyce has described as a "one-in-a-generation" decision that involved a switch from Boeing.

The European planemaker also looks likely to seize a narrowbody order from Dutch airline KLM as early as Thursday December 16.

"People are thinking about long-term fleet plans and especially about ESG (environmental, social and governance)," said Rob Morris, global head of consultancy at Ascend by Cirium.

"It's a case of: 'If I don't think about my replacement cycle now, am I going to get left behind'," he added.

Airbus and Boeing are sold out on benchmark medium-haul models until mid-decade after a previous, much larger order boom that was losing momentum when the pandemic wreaked havoc.

But with such long lead times before jets can be delivered, the focus is now turning towards the second half of the decade and a move to get in the front of the queue for future capacity.

"It's a buyer's market and a great time to take advantage of that," said aviation consultant Brendan Sobie.

The starting pistol was fired last month when two industry heavyweights, Air Lease Corp Executive Chairman Steven Udvar-Hazy and a stable of airlines led by Indigo Partners founder Bill Franke, ordered over 300 jets at the Dubai Airshow.

Some were sceptical, noting the PR value of such events. But others said the delivery dates pointed to a preemptive strike.

"It is pretty obvious that ESG considerations are going to be critical through this cycle. There is a bit of a feeding frenzy again with people worried they will not be able to get enough slots," Morris said.

Not everyone is hungry for new capacity. Singapore Airlines cancelled some orders for passenger jets even as it ordered its new freighters. Asia is expected to be among the slowest regions to recover.

Nonetheless, combined gross orders for Airbus and Boeing jets have trebled to 1,439 in the first 11 months of the year, compared to the pandemic-depressed levels of a year ago, lifted also by a surge in demand for the Boeing 737 MAX after it was cleared to fly following a safety ban.

That figure is about 200 higher than at the same point of 2018, the last year of data undisturbed by the MAX crisis.

Whether investors who are gambling on buying new jets are proved right depends on factors that remain difficult to gauge, though. They include global travel demand, China's tight border controls and the impact of the Omicron variant, analysts warn.

Eamonn Brennan, director general of air traffic control agency Eurocontrol, cautioned that any delay in reopening China's massive market beyond the fourth quarter of next year could delay the whole aviation recovery by a year.

Planemakers are playing up emissions savings of 15% compared to most earlier models as the industry strives to reach a target of net zero emissions by 2050. In the near term, the industry is otherwise reliant on energy firms to make more sustainable fuel.

Frontier Airlines CEO Barry Biffle stressed the benefits of locking in those savings soon, rather than waiting for 2050, as he took part in the Indigo Partners order in Dubai.

A possible green order wave comes with new risks for some companies in the aviation industry, however.

The combination of pent-up demand from the pandemic and pressure from investors and customers - especially in Europe - to curb emissions could drive the previous generation out of service sooner than expected and upset industry economics.

That would be a pay-day for manufacturers who rely mainly on selling new product, but a blow for leasing and engine firms whose profits are spread over the whole life of a jet.

Olivier Andries, head of French engine maker Safran, told reporters earlier this month that the average retirement age of single-aisle jets could fall to 20 or more years from 23 years once the dust settles from the pandemic.

United Airlines CEO Defends Vaccine Mandate At Senate Hearing

United Airlines Chief Executive Scott Kirby on Wednesday December 15 defended a decision to mandate COVID-19 vaccines for workers amid criticism from some Republican senators.

"We did this for safety. We believe it saved lives," Kirby said at a Senate Commerce hearing on aviation issues. "We don't compromise on safety."

Republican Senator Ted Cruz criticized United's vaccine mandate, calling it "disturbing" and was "disregarding the rights of your employees."

Cruz noted American Airlines and Southwest Airlines both have said they do not plan to fire any employee over the vaccine requirements.

Kirby said about 200 employees did not comply with United's mandate and were fired of its 67,000 employees. He added about 6 pilots were fired and 80 on unpaid leave out of about 13,000.

On Monday, a panel of the 5th U.S. Circuit Court of Appeals rejected an emergency request for an injunction blocking the mandate while the employees appeal a November ruling by a federal judge in favor of United.

United Airlines was the first major air carrier to issue a vaccine requirement and others followed. United granted around 2,000 religious and medical exemptions to employees. Kirby said about 80% of those seeking religious exemptions were granted.

The wide ranging aviation hearing covered a number of issues.

Airlines said they were ramping up hiring and struggling to find enough pilots. Kirby said United effectively had nearly 100 regional airplanes grounded "because there's not enough pilots to fly them.... The country is going to need thousands of pilots."

Southwest Chief Executive Gary Kelly said at the hearing: "I think the case is very strong that masks don't add much if anything in the air cabin environment -- it's very safe, very high quality compared to any other indoor setting."

Republican Senator Roger Wicker asked when passengers will be able to stop wearing masks. This month, the Biden administration extended transportation mask requirements through March 18.

Sara Nelson, president of the Association of Flight Attendants-CWA, said lifting mask requirements was up to medical experts but added "we absolutely look forward to the day that we no longer have the mask requirement."

FACTBOX-Countries Making COVID-19 Vaccines Mandatory

Governments have been making COVID-19 shots mandatory for health workers and other high-risk groups, pushed by a sharp upturn in infections caused by the Delta variant and a slowdown in vaccinations as well as the new Omicron variant.

A growing number of countries are also making shots compulsory for public servants and other workers.

Here are some countries' vaccine mandates, listed according to categories of people affected:

ALL ADULTS

** AUSTRIA: all over 14s from February 2022; holdouts can be fined up to 3,600 euros every 3 months

** GERMANY: plans to make mandatory for all adults from February

** INDONESIA: all adults, with fines or refusal of social assistance or government services for the unvaccinated.

** MICRONESIA: all adults

** TAJIKISTAN: all over 18s

** TURKMENISTAN: all over 18s

GOVERNMENT EMPLOYEES, PUBLIC AND PRIVATE SECTOR WORKERS

** CANADA: all federally regulated workplaces from early 2022

** COSTA RICA: all state workers

** CROATIA: all public sector employees, citizens who need services in public institutions

** CZECH REPUBLIC: police officers, soldiers and some other professions from March

** DENMARK: workplaces allowed to require a digital "corona pass" for employees

** EGYPT: vaccination or weekly COVID-19 test required from public sector employees to work in government buildings

** FIJI: public servants, employees at private firms

** FRANCE: public officials or employees, including civil security pilots, flight personnel providing care for victims, soldiers permanently assigned to civil security missions, firefighters

** GHANA: targeted groups including all public sector and health workers from Jan. 22

** HUNGARY: employees at state institutions

** ITALY: all workers, school staff, police, military

** LATVIA: required for lawmakers to be able to vote and to receive full pay; businesses allowed to fire unvaccinated workers

** LEBANON: all civil servants and workers in the education, tourism and public transport sectors from Jan. 10

** NEW ZEALAND: workers of border, prison, police and defence force sectors; education sector by Jan. 1

** POLAND: teachers, security personnel and uniformed services from March 1, 2022

** RUSSIA: workers with public-facing roles in Moscow;

** SAUDI ARABIA: public and private sector workers wishing to attend a workplace; people entering government, private, or educational establishments

** TUNISIA: officials, employees and visitors accessing public and private administrations

** TURKEY: some sectors including teachers and domestic travel employees

** UKRAINE: public sector employees including teachers; extension to medical personnel and municipal employees under consideration

** UNITED STATES: all federal workers, contractors (temporarily blocked from enforcing nationwide), private sector workers in companies with 100 or more employees (temporarily blocked by federal appeals court), public-sector workers (contested in New York court)

HEALTH WORKERS

** AUSTRALIA: high-risk aged-care workers, employees in quarantine hotels

** BRITAIN: care home staff in England, health workers in England by April 1

** CROATIA: health and social care workers

** CZECH REPUBLIC: hospitals and nursing homes employees from March 2022

** FINLAND: plans to make vaccines mandatory for health and social care workers

** FRANCE: healthcare and care home workers, home aids and urgent care technicians; postponed for health workers in Martinique and Guadeloupe islands to Dec. 31 following protests

** GERMANY: workers of hospitals, doctor's offices and nursing homes by mid-March.

** GREECE: nursing home staff, healthcare workers

** HUNGARY: healthcare workers

** LEBANON: health sectors from Jan. 10

** NEW ZEALAND: health and disability sector workers

** POLAND: health care workers from March 1, 202

OTHER WORKERS

** Western Australia: employees of mining, oil and gas exploration sectors by Jan. 1

** CHINA: booster shot required in Beijing for key workers on construction sites, including cooks, security guards and cleaning personnel

** PHILIPPINES: in-office workers and employees in public transportation services

** KAZAKHSTAN: mandatory vaccinations or weekly testing for people working in groups of more than 20

CHILDREN

** COSTA RICA: over 5s

** LITHUANIA: over 16s, considering for over 12s

ELDERLY

** CZECH REPUBLIC: over 60s from March

** GREECE: over 60s

** MALAYSIA: over 60s and all adult recipients of the Sinovac vaccine required to get a booster dose by Feb.

** RUSSIA: over 60s and chronically ill in St. Petersburg

ENTRY TO PUBLIC VENUES

** AUSTRIA: public places including restaurants, hotels, theatres and ski lifts

** BRITAIN: vaccination or negative test for all over-18s at night clubs and other venues in Scotland; at nightclubs, some indoor and outdoor unseated venues and all venues with more than 10,000 people in England

** BULGARIA: "health pass" for visitors of public venues such as cafes, hotels, concert halls, museums and swimming pools

** CZECH REPUBLIC: vaccination certificates or testing status required at restaurants and clubs

** DENMARK: health pass required for entry to indoor bars, restaurants and other public places

** EGYPT: vaccination mandatory for public university students to access campuses

** FRANCE: health pass required for restaurants, cafes, cinemas and museums, other public venues. Booster shots will be required for a valid health pass

** GERMANY's: vaccination required for all but the most essential businesses such as grocery stores, pharmacies and bakeries

** ITALY: vaccination required for indoor seating at bars, restaurants, visiting museums, cinemas, clubs, attending sporting events; basic green health pass obligatory for all public transport

** KENYA: court temporarily halted vaccination requirement by Dec. 21 to access public services including schools, transport services, immigration and other state offices, hotels, bars, restaurants, national parks, wildlife reserves

** LEBANON: vaccine certificate or antibody tests required for entry to restaurants, cafes, pubs and beaches

** MOROCCO: vaccine required for access to all government buildings, spaces such as cafes, restaurants, cinemas, gyms, transportation

** NETHERLANDS: health pass mandatory to enter bars, restaurants, clubs or cultural events

** ROMANIA: health pass, negative COVID-19 test or proof of recovery mandatory for entry to most public venues including majority of non-essential ones

** SERBIA: health pass mandatory to visit indoor cafes, hotels and restaurants after 10 p.m.

** SINGAPORE: vaccination necessary to enter shopping malls; considers requiring a booster shot to qualify as fully vaccinated

** SWITZERLAND: proof of vaccination, recovery or a negative test required to access bars, restaurants and fitness centres

** SOUTH KOREA: vaccine pass mandatory to access 14 designated public spaces, including hospitality and entertainment venues; requirement extended to over 12s from February

** SWEDEN: vaccine passes required for indoor events with more than 100 people; to be extended to smaller gatherings, such as in restaurants.

UKRAINE: restrictions for unvaccinated on access to restaurants, sports and other public events

End Of An Era: Airbus Delivers Last A380 Superjumbo To Emirates

Airbus is set to deliver the final A380 superjumbo to Dubai's Emirates on Thursday December 17, marking the end of a 14-year run that gave Europe an instantly recognised symbol across the globe but failed to fulfil the commercial vision of its designers.

Production of the world's largest airliner - capable of seating 500 people on two decks together with perks like showers in first class - has ended after 272 were built compared with the 1,000 or more once predicted.

Airbus, a planemaking conglomerate drawn together from separate entities in Britain, France, Germany and Spain to carry out their brainchild of mega-jets to beat congestion, pulled the plug in 2019 after airlines went for smaller, leaner models.

Thursday's handover is expected to be low key, partly because of COVID restrictions and also because Airbus is these days focusing its PR on environmental benefits of smaller jets.

That's in stark contrast to the spectacular light show that revealed the new behemoth in front of European leaders in 2005.

Emirates is by far the largest buyer and still believes in the superjumbo's ability to lure passengers. Even though no more A380s will be built, it will keep flying them for years. Many airlines disagree and have axed the A380 during the pandemic.

Airline president Tim Clark refuses to bow to sceptics who say the days of spacious four-engined jets like the A380 are numbered as an airline seat becomes a commodity like any other.

"I don't share that view at all ... And I still believe there is a place for the A380," Clark recently told reporters.

"Technocrats and accountants said it was not fit for purpose ... That doesn't resonate with our travelling public. They absolutely love that airplane," he said.

The A380's demise left deserted one of the world's largest buildings, a 122,500-square-metre assembly plant in Toulouse.

Airbus plans to use part of it to build some of the bread-and-butter narrowbody models that dominate sales like a deal with Qantas announced earlier on Thursday December 16.

But it is in Hamburg that some of the most striking features of the A380 evolved.

Clark recalled how he huddled with Airbus developers in northern Germany to persuade Airbus chiefs in France to pay for the engineering needed to make in-flight showers a reality.

"There was a lot of arm-folding and my friends in France were a little circumspect," Clark said.

"I had to sit with friends in the development unit in Hamburg having to build the showers, and then asked Toulouse management to see how it could be done, and so they bought in."

That innovation generated headlines but did not translate into sales needed to keep the A380 going.

The plane was designed in the 1990s when travel demand was soaring and China offered seemingly unlimited potential.

By the time the first delivery came in 2007, the plane was more than two years late. And when Emirates got its first A380 a year later, the emerging financial crisis was already forcing analysts to trim their forecasts for the biggest jets.

Boeing was meanwhile capturing orders for a revolutionary new 787 Dreamliner, to be followed by the Airbus A350.

"There was a slowing down of appetite and enthusiasm. We didn't share that view; we put this great (A380) aircraft to work," Clark said on the sidelines of an airlines meeting.

"We have what I think is one of the most beautiful aircraft ever flown."

Qantas Switches Domestic Fleet To Airbus In Blow To Boeing

Qantas Airways on Thursday December 16 picked Airbus as the preferred supplier to replace its domestic fleet, switching from Boeing in a major win for the European planemaker that also triggered an upheaval in engine supplies.

The Australian national airline said it had committed to buying 20 Airbus A321XLR planes and 20 A220-300 jets, along with options for 94 aircraft, pushing shares in France-based Airbus 3% higher in early European trading.

"This is a clear sign of our confidence in the future and we've locked in pricing ahead of what is likely to be a big uptick in demand for next-generation narrowbody aircraft," Qantas Chief Executive Alan Joyce said.

Qantas is the latest airline to join a growing race for efficient medium-haul jets as carriers look past the pandemic to lower fuel costs and help emissions targets.

The agreement is subject to board approval, expected by June 2022 after negotiations with pilots.

Deliveries would start in mid-2023 and continue over 10 years to replace an ageing fleet of 75 Boeing 737s and 20 717s.

The win caps a successful week for Airbus after Singapore Airlines on Wednesday agreed to launch the A350 freighter and the planemaker looks poised to seize a narrowbody order from KLM, in what could become the second defection in 24 hours.

For Boeing, the loss of the coveted Qantas contract, first reported by Bloomberg News, is a further blow to its 737 MAX.

It interrupts a strong run of sales since the jet was cleared for flight late last year following a safety ban and means a further loss of narrowbody market share to Airbus.

Qantas has operated Boeing jets since 1959 and was once the world's only airline with an all 747 fleet. The U.S. planemaker will now supply only its long-haul 787 Dreamliners.

Joyce said he was not concerned that his airline would be overly reliant on Airbus.

"I'm sure that Boeing will be very, very aggressive to maintain their relationship with us, which is a big one with the 787s, when other competitions come up," he told reporters.

Joyce said the flexibility to combine the Qantas narrowbody order with one already placed by low-cost arm Jetstar for more than 100 A320neos was a key attraction of the Airbus deal.

The world's third-oldest airline has been the scene of epic battles in the global plane duopoly including a hotly contested face-off in 2005 between the 787 and A350, which went to Boeing and prompted Airbus to tear up its original design.

The latest contest triggered a double defection as Qantas also switched to U.S. engine maker Pratt & Whitney.

Qantas plans to order the Raytheon Technology subsidiary's engines for the fresh batch of Airbus A320neo-family jets, having chosen CFM International engines from GE and Safran for much of the Jetstar order.

"Pratt & Whitney gave us the best arrangements," Joyce said. "We do feel that since both airlines will have a large amount of aircraft there are not mixed fleet issues."

CFM's engines are available on both Boeing and Airbus narrowbodies, meaning it has less incentive to weigh in with aggressive bids to help sway the aircraft choice, analysts say.

Qantas is separately looking at A350 widebodies capable of the world's longest commercial flights from Sydney to London. A decision on "Project Sunrise" is expected next year.

Malaysia's AirAsia X Gets Court Approval For Restructuring Scheme

A Malaysian court has approved a restructuring scheme for budget long-haul carrier AirAsia X Bhd that will pay just 0.5% of debt owed and end existing contracts, the airline said in a Thursday December 16 filing.

The High Court of Malaya granted a sanction order at a hearing on Thursday and "the proposed debt restructuring will take effect upon lodgement of the sanction order with the Registrar of Companies of Malaysia," the filing said.

Last month, AirAsia X's creditors agreed to the scheme to restructure 33.65 billion ringgit ($8 billion) of liabilities.

Around half was owed to its largest creditor Airbus SE for terminating airplane orders.

It first proposed restructuring in October last year, but faced more than a dozen creditors including lessors who sought court action to dismiss its scheme.

The airline, a sister carrier to cash-strapped AirAsia Group Bhd, had warned of liquidation if creditors did not agree to the plan, which will be followed by a 500 million ringgit equity raising.

AirAsia X will now start a recapitalisation, expected to be completed in the first quarter of 2022.

Portugal Confident EU Will Approve TAP Rescue Plan By Christmas

The Portuguese government is confident the European Commission will approve a €3.2 billion restructuring plan for the ailing airline TAP by Christmas and is preparing to inject more funds, Finance Minister Joao Leao said on Thursday December 16.

"The process is in its final phase. We are confident, we expect that it can be approved by Christmas," Leao told Reuters.

If Brussels rejects the plan, the company, which is 72.5% controlled by the Portuguese state, would have to immediately repay rescue loans already provided by the state, which would lead to its insolvency.

EU antitrust regulators have been examining since mid-July whether the plan, which involves around 2,000 job cuts and pay cuts of up to 25%, is proportionate and complies with state aid rules, and whether it affects competition.

Out of the €3.2 billion rescue package requested by Lisbon, the government has already lent the airline €1.7 billion.

Leao said he expected to lend TAP "€500 million this year and then around €1 billion next year."

In May, the European Union's second-highest court upheld Ryanair's.fight against a €1.2 billion rescue loan TAP received in 2020 with the European Commission's blessing, on the grounds that the Commission failed to justify the huge cash injection.

British Airways Owner To Pay Air Europa Parent €75m As Deal Falls Through

IAG said on Thursday December 16 it would pay €75 million to privately held Spanish company Globalia, after the British Airways-owner and Air Europa agreed to abandon their deal and work on alternative structures.

IAG had announced plans to buy Air Europa from Globalia for €1 billion in 2019, but the price was cut in half this year after the airline industry was sent into a tailspin by the COVID-19 pandemic.

The British airline group this week said it was set to cancel its takeover of Air Europa after European regulators indicated they would not allow it to go through without further concessions.

IAG said it would pay €35 million, on top of the €40 million break-up fee, after agreeing that the amount would be used to reduce any future purchase price if a new deal is reached and to avoid litigation.

IAG And Air Europa Cancel Deal, Examine Alternative Options

Iberia-owner IAG and Air Europa are looking at alternative ways to work together, with a deadline set for the end of January, after they cancelled a takeover deal more than a year after it was struck.

IAG, which also owns British Airways, said on Thursday December 16 it would pay €75 million to Air Europa's privately held Spanish owner Globalia.

"IAG has also reached an understanding with Globalia to evaluate, before the end of January 2022, alternative structures that may be of interest to both companies and offer significant benefits for their shareholders, customers and employees," the company said.

IAG had announced plans to buy Air Europa from Globalia for €1 billion in 2019, but the price was cut in half this year after the airline industry was sent into a tailspin by the COVID-19 pandemic.

The British airline group this week said it was set to cancel its takeover of Air Europa after European regulators indicated they would not allow it to go through without further concessions.

IAG said it would pay €35 million, on top of the €40 million break-up fee, after agreeing that the amount would be used to reduce any future purchase price if a new deal is reached and to avoid litigation.

Delta Air Lines Expects Profit In 2022, Sees Limited Hit From Omicron

Delta Air Lines Inc said on Thursday December 16 it expects to post an annual profit in 2022, as strong domestic holiday bookings helped power its fourth quarter earnings despite fears around the Omicron coronavirus variant.

The U.S. airline, however, said Omicron had slowed international bookings as many countries imposed new travel restrictions since the strain was first reported.

"Omicron not going to impact our holiday bookings," the airline's chief executive officer, Ed Bastian, said in an interview to CNBC, but added that it will have some impact in the first quarter.

Rising COVID-19 cases as well as the newly imposed restrictions have threatened to upend a nascent recovery in the industry.

International travel, typically more lucrative for airlines, is crucial for the sector as it seeks to return to profits and shake off pandemic-related losses. Transatlantic routes accounted for up to 17% of 2019 passenger revenues for the major U.S. carriers. Delta itself had reported a 450% spike in international bookings in November.

Shares of the Atlanta-based carrier rose 2.40% in the pre-market trading as the company also said it expects to generate an adjusted pre-tax profit of $200 million in the December quarter.

The carrier in October had flagged a pre-tax loss for the fourth quarter due to rising fuel costs. It now expects fuel costs per gallon between $2.20 and $2.30 down from $2.25 to $2.40 forecast earlier.

EUROPEAN COMMISSION: CONFIRMS DISCUSSIONS WITH IAG, AIR EUROPA AND PROPOSED REMEDY PACKAGE THUS FAR WERE NOT ABLE TO ADDRESS COMPETITION CONCERNS

Boeing Delivers 34 Aircraft In November, Picks Up Southwest Order

Boeing Co said on Tuesday December 14 that it handed over 34 airplanes to carriers in November, while adding 109 jets to its 737 MAX order tally.

The delivery tally - closely scrutinized by investors as deliveries generate much-needed cash during the coronavirus crisis - compares with 27 planes in October, and seven in the year ago period when Boeing was in the throes of the 737 MAX safety crises.

Again in November, Boeing failed to deliver its advanced carbon-composite 787 Dreamliner, which remains mired in inspections and retrofits likely to keep the jets sidelined until April 2022.

Of the 34 aircraft delivered last month, 28 were 737 MAX planes - 10 of which were for European low-cost carrier Ryanair . Boeing also turned over one P-8 maritime patrol aircraft to Norway, Boeing said.

The remaining jets were larger widebodies: one 767 apiece for FedEx Corp and United Parcel Service, one 747-8 for the Egyptian defense ministry, and two 767 tankers for the U.S. Air Force, Boeing said.

During the pandemic, many airlines have been forced to idle unused passenger jets, driving up demand for cargo space on dedicated freighters at a time when e-commerce has been a lifeline for many.

This year through November, Boeing has delivered 302 aircraft, more than twice the 118 aircraft it delivered in the first 11 months of 2020.

Boeing had 91 orders for aircraft in November, after cancellations and instances where a buyer converted an order for one type of aircraft to another.

It had 109 gross orders, all of which were for its 737 MAX jetliner, which returned to service in late 2020 after a near two-year safety ban.

That includes an order for 72 MAX jets from India's Akasa Air, a deal valued at nearly $9 billion at list prices that could help the U.S. planemaker regain lost ground in one of the world's most promising markets.

It also included an order for 30 737 MAX jets for Miami-based 777 Partners, which owns part of Canadian low-cost carrier Flair Airlines, and a previously undisclosed order for seven 737 MAXs for Southwest Airlines.

At the same time, buyers canceled orders for 18 737 MAX jets.

Gross orders for the year increased from 720 to 829, or from 373 to 457 after cancellations, conversions and stricter accounting standards were applied, Boeing said.

EU Energy Talks Paused As Poland Seeks Carbon Market Curbs

Poland urged the European Union on Thursday December 16 to do more to curb volatile prices in the EU carbon market, which it said are driven by financial speculators and have burdened businesses.

EU country leaders met in Brussels for a summit to discuss issues including soaring energy prices, but the energy section of the talks was paused in the afternoon as countries could not agree on issues including their response to high carbon prices.

Speaking before the summit, Poland's Prime Minister Mateusz Morawiecki criticised fluctuating CO2 prices, which he said benefited mainly speculators.

"ETS prices should be fairly constant and reasonably predictable, not in spikes," Morawiecki said, adding that the Polish government had proposed changes regarding the carbon market to the European Commission.

Europe's benchmark carbon price soared to a record high of 90.75 euros per tonne last week, having increased by more than 50% since the start of November amid rising gas prices and the looming expiry of ETS options. The CO2 price started the year at roughly 31 euros per tonne.

A draft of the leaders' summit conclusions, seen by Reuters, said countries would invite the European Commission to "deepen the examination of the functioning of the electricity markets, as well as supervision of EU ETS trading".

Countries did not agree on that wording, and EU officials said Poland, the Czech Republic and a handful of other countries had sought stronger wording on curbing the role of speculators in the system. Spain has also called for speculative activity to be restricted in the ETS in recent months.

The carbon market is the EU's core policy for cutting greenhouse gas emissions causing climate change. It forces power plants and factories to buy a permit for each tonne of CO2 they emit, and the Commission has proposed expanding the scheme to cover shipping and impose higher CO2 costs on airlines.

A preliminary investigation by the EU securities watchdog last month said there was no proof of abuse in the carbon market. Its full report is due by early 2022.

Airbus Lands Air France-KLM Jet Order, Capping Trio Of Deals

Airbus completed a triple crown of aircraft orders at the expense of rival Boeing on Thursday December 16 with a deal to supply 100 narrowbody jets to Air France-KLM subsidiaries in the airline group's largest purchase based on number of jets. The planemaker's third big win in 36 hours - after deals in Singapore and Australia - involves Dutch subsidiary KLM and a pair of low-cost units, all of which have traditionally relied solely on Boeing for widely used medium-haul passenger planes.

The contract covers Airbus A320neo and A321neo aircraft and will renew the medium-haul fleets of KLM and Dutch low-cost unit Transavia Netherlands, while also allowing for both the renewal and expansion of the fleet at sister unit Transavia France.

The bigger-than-expected order from Europe's second-largest airline group by fleet size came hours after Airbus clinched a deal to supply two tranches of aircraft to Australia's Qantas in a separate defeat for existing supplier Boeing.

Air France-KLM said it had also signed a letter of intent to buy four Airbus A350 freighters.

Collectively, those orders cap a dramatic week for Airbus after Singapore Airlines threw its weight behind its efforts to break Boeing's grip on the cargo plane market, with its own tentative order for seven A350 freighters.

Reuters reported earlier on Thursday December 16 that Airbus was poised to win all or part of the widely watched Air France-KLM deal after emerging as front-runner last week.

First deliveries are expected in the second half of 2023, with the bulk of deliveries expected beyond mid-decade.

Neither side gave a value for the deal, which experts said is worth billions of dollars.

Factors in Airbus's favour in recent months have included a gradual thawing of relations between French and Dutch arms of the airline group, which have different suppliers, and tensions over recent Boeing 787 delays, industry sources said.

U.S. analysts said pressure from European governments to buy Airbus planes in return for bailouts may have played a role.

Even so, Boeing is ahead on firm orders so far this year as of the end of November, due to a sharp recovery in sales of the 737 MAX after it returned to service following a safety ban.

Boeing is expected to grab at least one more order before year-end and has the edge in a relaunched narrowbody contest at British Airways owner IAG, industry sources said.

Airlines are once again placing orders for jets as the industry starts to map growth beyond the pandemic and take advantage of lower fuel costs and emissions.

Aeromexico Tender Offer To Value Shares At Fraction Of Market Value

Mexican carrier Aeromexico on Thursday December 16 said an unnamed third party would make a tender offer valuing its oustanding shares at a fraction of their previous market price as part of its efforts to emerge from bankruptcy.

News of the planned tender offer, which would offer 0.01 peso for each outstanding share, sent its shares tumbling nearly 75%.

Shares in the company, which filed for Chapter 11 bankruptcy protection in the United States last year amid the pandemic, closed at 3.89 pesos on Wednesday December 15. They were trading at 1.84 pesos in early afternoon in Mexico.

The offer gives existing shareholders the chance to withdraw from current capital stock prior to the capitalization of debts.

Delta Air Lines Inc, which had controlled a majority of Aeromexico, would not be taking part in the offer, a statement noted, and its stake will be diluted to 20%. Aeromexico gave no further details about the third party.

Carlos Hernandez, senior analyst at Masari Casa de Bolsa, said ownership and management changes often spook the market.

"They can represent uncertainty for investors and even more so when some financial elements are compromised," Hernandez said. "Right now, we do not have a defining position for the company."

Still, Aeromexico emphasized that several of its longtime shareholders would remain with the company, including a core group of Mexican investors, with 4.1%, as well as Delta.

Aeromexico's biggest stakeholder coming out of bankrutpcy will be Apollo Global Management, a fund which often invests in bankrupt companies, with 22.38%. Apollo last year provided Aeromexico with $1 billion in debtor-in-possession financing.

Last week Aeromexico said a bankruptcy court had approved a disclosure statement regarding a plan for the reorganization of the company and its subsidiaries.

Up to 331,480,713 shares are expected to be acquired under the tender offer. That would represent up to 49% of the capital stock prior to the dilution resulting from the restructuring plan, which would leave them representing less than 0.01% of the reorganized company's outstanding shares, Aeromexico said.

Equity stakeholders are frequently diluted or even wiped out entirely during Chapter 11 reorganizations, in which debt is typically swapped for equity stakes.

The rest will be distributed among new investors and creditors who swap their claims for Aeromexico's future stock, the airline said.

End Of An Era: Airbus Delivers Last A380 Superjumbo

Airbus delivered the final A380 superjumbo on Thursday December 16, to Dubai's Emirates, marking the end of a 14-year run that gave Europe an instantly recognised symbol across the globe but failed to fulfil the commercial vision of its designers.

Production of the world's largest airliner - capable of seating 500 people on two decks together with perks such as showers in first class - has ended with just over 250 delivered to airlines compared with the 1,000 or more once predicted.

Airbus, a planemaking conglomerate drawn together from separate entities in Britain, France, Germany and Spain to carry out their brainchild of mega-jets to beat congestion, pulled the plug in 2019 after airlines went for smaller, leaner models.

The 123rd superjumbo delivered to Emirates, by far the largest customer, departed Hamburg in gloomy twilight before making a farewell lap of the port city and heading for the Gulf.

Thursday's handover was kept deliberately low key, partly because of COVID restrictions and also because Airbus is these days focusing its PR on environmental benefits of smaller jets.

That is in stark contrast to the spectacular light show that revealed the new behemoth in front of European leaders in 2005.

Emirates still believes in the superjumbo's ability to lure passengers. Even though no more A380s will be built, it will keep flying them for years. Many airlines disagree and have axed the A380 during the pandemic.

Airline president Tim Clark refuses to bow to sceptics who say the days of spacious four-engined jets like the A380 are numbered, as an airline seat becomes a commodity like any other.

"I don't share that view at all ... And I still believe there is a place for the A380," Clark recently told reporters.

"Technocrats and accountants said it was not fit for purpose ... That doesn't resonate with our travelling public. They absolutely love that airplane," he said.

The A380's demise left deserted one of the world's largest buildings, a 122,500-square-metre assembly plant in Toulouse.

Airbus plans to use part of it to build some of the bread-and-butter narrowbody models that dominate sales, like a deal with Qantas announced earlier on Thursday.

But it is in Hamburg that some of the most striking features of the A380 evolved.

Clark recalled how he huddled with Airbus developers in northern Germany to persuade Airbus chiefs in France to pay for the engineering needed to make in-flight showers a reality.

"There was a lot of arm-folding and my friends in France were a little circumspect," Clark said.

"I had to sit with friends in the development unit in Hamburg having to build the showers, and then asked Toulouse management to see how it could be done, and so they bought in."

That innovation generated headlines but did not translate into sales needed to keep the A380 going.

The plane was designed in the 1990s when travel demand was soaring and China offered seemingly unlimited potential.

By the time the first delivery came in 2007, the plane was more than two years late. And when Emirates got its first A380 a year later, the emerging financial crisis was already forcing analysts to trim their forecasts for the biggest jets.

Boeing was meanwhile capturing orders for a revolutionary new 787 Dreamliner, to be followed by the Airbus A350.

"There was a slowing down of appetite and enthusiasm. We didn't share that view; we put this great (A380) aircraft to work," Clark said on the sidelines of an airlines meeting.

"We have what I think is one of the most beautiful aircraft ever flown."

Airbus Exec Says Latest Order Wins Strengthen Case For Jet Output Hike

Recent order wins by Airbus have strengthened the European planemaker's case for raising production of its A320-family narrowbody jets beyond a firm target of 65 a month, a senior executive said on Thursday December 16.

Asked whether deals with Qantas and Air France-KLM had reinforced Airbus' ambitions to go ahead with further increases, opposed by some suppliers and leasing firms, Chief Commercial Officer Christian Scherer said "yes."

"What we are seeing materialise in formal decisions is something that we could see coming for months now," Scherer told Reuters in an interview.

"It now publicly strengthens what we kind of knew all along," he said, adding he did not want to seem over-confident.

Airbus has been arguing for months that post-pandemic demand for the industry's most widely used narrowbody models will justify an increase in output to well above pre-crisis rates.

Airbus A320-family output reached a record 60 a month in 2019 before falling back to 40 a month when the crisis hit air travel last year.

Airbus now plans to increase output to 65 a month and has said it is pondering rates as high as 75.

Engine makers and some other suppliers have voiced reservations, fearing the snapback in demand would either be short-lived or would push existing jets into retirement too quickly, harming their maintenance profits for older jets.

Others say supply chains remain too tight to raise rates.

However, the latest Airbus orders generated a significant breakthrough for U.S. engine maker Pratt & Whitney at Qantas.

"It would seem that Pratt & Whitney's recent success indicates they are in agreement with the Airbus view of the market," Scherer said.

He hailed the sale of new A350 freighters to two airlines - Singapore Airlines and Air France-KLM - in as many days.

After launching the jet mid-year, Airbus had to wait several months to win the first order at last month's Dubai Airshow.

This week's tentative deals for a combined total of 11 freighters are the first from major network carriers.

"We were right to believe in it and were ... surprised by how quickly and how forcefully the market has endorsed the product," Scherer said.

Boeing Co is expected to hit back with a freighter version of its future 777X in an effort to maintain its dominance of the air cargo market, with Qatar Airways dangling a large order.

EU Energy Talks Dissolve Over Carbon, Green Finance Fights

Talks between European Union country leaders on energy policy ended with no agreement on Thursday December 16, as states squabbled over how to respond to record-high carbon prices and upcoming green investment rules.

EU country leaders met in Brussels for a summit to discuss several issues, including soaring energy prices, but some member states - notably Poland - pushed the EU to curb volatile prices in the carbon market by limiting speculative activity, a stance at odds with that of other countries, including Germany.

Another squabble emerged over whether the EU should label gas and nuclear energy as climate-friendly investments, with some states seeking to hurry the European Commission into proposing this month the rules on its "sustainable finance taxonomy", a policy that has become the focus of intense lobbying from governments.

The talks broke up with no agreement on any energy issues, after leaders could not agree on a final text.

"We have realized that there were divergent opinions around the table and we were unable to reach agreement on the conclusions presented," said EU summit chair Charles Michel. He said leaders would discuss the issue again at a future meeting.

Polish Prime Minister Mateusz Morawiecki criticised fluctuating CO2 prices, which he said benefited mainly speculators.

"ETS prices should be fairly constant and reasonably predictable, not in spikes," Morawiecki said, adding that Poland had proposed changes regarding the carbon market to the European Commission.

Europe's benchmark carbon price soared to a record high of 90.75 euros per tonne last week, having increased by more than 50% since the start of November amid rising gas prices and the looming expiry of ETS options. The CO2 price started the year at roughly 31 euros per tonne.

A late draft of the summit conclusions had asked the European Commission to deepen its monitoring of EU ETS trading, including possible speculation by financial intermediaries. Spain has also called for speculative activity to be restricted in recent months.

Another attempt at a deal in the energy talks would have asked Brussels to decide whether to label gas and nuclear energy as climate-friendly investments by the end of this month.

The Commission has said it plans to propose the rules this month, but has struggled to resolve infighting between countries that disagree on which fuels deserve a "green" label.

The carbon market is the EU's core policy for cutting greenhouse gas emissions causing climate change. It forces power plants and factories to buy a permit for each tonne of CO2 they emit, and the Commission has proposed expanding the scheme to cover shipping and impose higher CO2 costs on airlines.

Boeing Wants To Build Its Next Airplane In The "Metaverse"

In Boeing Co's factory of the future, immersive 3-D engineering designs will be twinned with robots that speak to each other, while mechanics around the world will be linked by $3,500 HoloLens headsets made by Microsoft Corp.

It is a snapshot of an ambitious new Boeing strategy to unify sprawling design, production and airline services operations under a single digital ecosystem - in as little as two years.

Critics say Boeing has repeatedly made similar bold pledges on a digital revolution, with mixed results. But insiders say the overarching goals of improving quality and safety have taken on greater urgency and significance as the company tackles multiple threats.

The planemaker is entering 2022 fighting to reassert its engineering dominance after the 737 MAX crisis, while laying the foundation for a future aircraft program over the next decade - a $15 billion gamble. It also aims to prevent future manufacturing problems like the structural flaws that have waylaid its 787 Dreamliner over the past year.

"It's about strengthening engineering," Boeing's chief engineer, Greg Hyslop, told Reuters in his first interview in nearly two years. "We are talking about changing the way we work across the entire company."

After years of wild market competition, the need to deliver on bulging order books has opened up a new front in Boeing's war with Europe's Airbus, this time on the factory floor.

Airbus Chief Executive Guillaume Faury, a former automobile research boss, has pledged to "invent new production systems and leverage the power of data" to optimize its industrial system.

Boeing's approach so far has been marked by incremental advances within specific jet programs or tooling, rather than the systemic overhaul that characterizes Hyslop's push today.

The simultaneous push by both plane giants is emblematic of a digital revolution happening globally, as automakers like Ford Motor Co and social media companies like Facebook parent Meta Platforms Inc shift work and play into an immersive virtual world sometimes called the metaverse https://www.reuters.com/technology/what-is-metaverse-2021-10-18.

So how does the metaverse - a shared digital space often using virtual reality or augmented reality and accessible via the internet - work in aviation?

Like Airbus, Boeing's holy grail for its next new aircraft is to build and link virtual three-dimensional "digital twin" replicas of the jet and the production system able to run simulations.

The digital mockups are backed by a "digital thread" that stitches together every piece of information about the aircraft from its infancy - from airline requirements, to millions of parts, to thousands of pages of certification documents - extending deep into the supply chain.

Overhauling antiquated paper-based practices could bring powerful change.

More than 70% of quality issues at Boeing trace back to some kind of design issue, Hyslop said. Boeing believes such tools will be central to bringing a new aircraft from inception to market in as little as four or five years.

"You will get speed, you will get improved quality, better communication, and better responsiveness when issues occur," Hyslop said.

"When the quality from the supply base is better, when the airplane build goes together more smoothly, when you minimize re-work, the financial performance will follow from that."

Yet the plan faces enormous challenges.

Skeptics point to technical problems on Boeing's 777X mini-jumbo and T-7A RedHawk military training jet, which were developed using digital tools.

Boeing has also placed too great an emphasis on shareholder returns at the expense of engineering dominance, and continues to cut R&D spending, Teal Group analyst Richard Aboulafia said.

"Is it worth pursuing? By all means," Aboulafia said. "Will it solve all their problems? No."

Juggernauts like aircraft parts maker Spirit AeroSystems have already invested in digital technology. Major planemakers have partnerships with French software maker Dassault Systèmes. But hundreds of smaller suppliers spread globally lack the capital or human resources to make big leaps.

Many have been weakened by the MAX and coronavirus crises, which followed a decade of price pressure from Boeing or Airbus.

"They not only tell us what hardware we can buy, they are now going to specify all this fancy digital junk that goes on top of it?" one supply chain executive said.

Boeing itself has come to realize that digital technology alone is not a panacea. It must come with organizational and cultural changes across the company, industry sources say.

Boeing recently tapped veteran engineer Linda Hapgood to oversee the "digital transformation," which one industry source said was underpinned by more than 100 engineers.

Hapgood is best known for turning black-and-white paper drawings of the 767 tanker's wiring bundles into 3-D images, and then outfitting mechanics with tablets and HoloLens augmented-reality headsets. Quality improved by 90%, one insider said.

In her new role, Hapgood hired engineers who worked on a digital twin for a now-scrapped midmarket airplane known as NMA.

She is also drawing on lessons learned from the MQ-25 aerial refueling drone and the T-7A Red Hawk.

Boeing "built" the first T-7A jets in simulation, following a model-based design. The T-7A was brought to market in just 36 months.

Even so, the program is grappling with parts shortages, design delays and additional testing requirements.

Boeing has a running start with its 777X wing factory in Washington state, where the layout and robot optimization was first done digitally. But the broader program is years behind schedule and mired in certification challenges.

"This is a long game," Hyslop said. "Every one of these efforts was addressing part of the problem. But now what we want to do is do it from end to end."

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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