Hospitality Ireland presents a round-up of the latest airline and aviation news from around the world.
AirAsia X Reports Record Quarterly Loss
Malaysia's AirAsia X Bhd on Monday September 27 posted a record quarterly loss of $5.9 billion, eight times more than a year ago, as a multi-billion-dollar provision to cover debts drove operating costs higher.
It was the ninth loss in succession for the airline, an affiliate of AirAsia Group Bhd.
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The net loss for the April-June period widened to 24.6 billion ringgit ($5.88 billion), from a 305.2 million ringgit loss a year ago.
The airline said it made an accounting provision of 23.8 billion ringgit to its creditors during the quarter as it is in default under the contract terms.
Revenue dropped 20.9% to 72.3 million ringgit, versus 91.4 million ringgit.
In a stock exchange filing, it said the impact of the provision should be temporary.
"The contractual liabilities for which the provision is made will be waived upon a successful completion of the proposed debt restructuring exercise," it said.
To reduce costs, the airline group plans to operate a reduced fleet and return excess aircraft to the lessors. It said it has returned one aircraft and is in discussions with other aircraft lessors "to achieve the optimal fleet size".
Discussions to reduce future lease rental rates are ongoing, as are talks with other service providers to reduce maintenance costs.
The airline, which is looking to convene meetings with creditors to propose a restructuring scheme by the end of October, proposed last October to restructure its 64.15 billion ringgit debt into a principal amount of 200 million ringgit.
It said that it is making good progress in negotiations.
The implementation of a fund-raising exercise involving a rights issue and a share subscription for new investors to raise 500 million ringgit, will start provided the upcoming creditors' meeting approves it, it said.
AirAsia X also plans to apply for a government guaranteed loan of up to 500 million ringgit, it said.
The group at the end of last year changed its financial year end from December 31 last year to June 30 this year.
Qatar Airways Annual Losses Double
Qatar Airways Group on Monday September 27 reported a doubling of annual losses to 14.9 billion riyal ($4.1 billion), hit by the COVID-19 collapse in long-haul travel and aircraft impairment charges.
The state-owned group, which includes the airline and other aviation assets, said it booked a one-off impairment of 8.4 billion riyal on its fleet 10 Airbus A380s and 16 A330s jets.
Its operating loss shrank 7% to 1.1 billion riyal.
Chief Executive Akbar Al Baker has cautioned that the A380s, the world's biggest passenger jet, may never return to the airline's operational fleet due to the impact of the pandemic.
The financial result for the year to March 31 compares with a 7.3 billion riyal loss in the year prior, which was also hit by a airspace ban by Saudi Arabia and others that ended in January.
Total revenue and other operating income fell 42.5% to 29.4 billion riyal. Passenger revenue fell nearly 80% to 7.9 billion riyal.
The number of passengers carried dropped 82% to 5.8 million.
Qatar Airways also reconfirmed it had received $3 billion in state support since the onset of the pandemic, provided via equity injections from its sole shareholder, the State of Qatar.
It said it did not receive any subsidies in the form of salary support, tax relief or grants, while employees took a 15% temporary pay cut and the workforce shrank 27% to 36,707.
Dubai's Emirates lost $5.5 billion in the same period and has received $3.1 billion in equity injections from the state throughout the COVID-19 pandemic.
Qatar Airways and Emirates have no domestic markets to cushion against border restrictions and closures introduced to stop the spread of COVID-19.
After drastically cutting services last year, airlines have gradually increased services as countries increasingly ease travel restrictions with more of their population vaccinated.
Qatar Airways said it now flies to over 140 destinations, up from a low of 33 during the pandemic.
Canada Seeks To Attract US Frequent Flyers With Perks On Air Canada
Canada is trying to use the lure of travel perks to convince America's frequent-flying elite to fly north on Air Canada, as the country steps up efforts to revive crucial traffic from the United States, a Canadian official said.
COVID-19 has battered travel from Canada's largest tourism market. During the first half of 2021, Canada had only about 178,000 overnight arrivals from the United States, compared with 6.8 million during the same period in 2019, according to government data.
To help reverse that decline, government tourism body Destination Canada on Monday rolled out its first campaign targeting US frequent flyers, in partnership with the country's largest carrier.
It is part of broader, C$14 million ($11.2 million) efforts by the tourism commission to boost traffic after Canada recently opened its borders to vaccinated travellers. It is not clear how much the specific frequent flyer campaign will cost.
"This is super-focused in terms of our ability to reach frequent flyers," Gloria Loree, Destination Canada's chief marketing officer told Reuters, ahead of the launch.
Under the plan, up to 20,000 US frequent flyers with carriers like American Airlines, Southwest Airlines Co and Delta Air Lines could get matching status when flying Air Canada north of the border.
Delta declined to comment and American Airlines did not immediately respond.
Southwest, which does not serve Canada directly, said by email that the government arm's support contributes to the industry's collective efforts "to restart substantive air travel."
Frequent-flyer status gives travellers perks like priority boarding that would normally cost a premium fare or a fee.
While status-matching is common among airlines, Destination Canada said this is the first time a tourism organization has used the practice to attract tourists to their country.
"This is the push to get them coming to Canada," Loree said.
Eligible US frequent flyers who book and travel north on AC before Jan. 15, 2022, will keep their status with the carrier for all of 2022, she said.
It comes as countries ease restrictions on international travel, with the United States set to reopen in November to vaccinated air travelers from 33 countries.
Loree said funding frequent-flyer status matching is no different from other incentives paid for by Destination Canada, such as a separate campaign this year with Air Canada's rival, WestJet Airlines.
Loree said the goal is to restore routes from the United States, while trying to attract travelers who will return to Canada.
In April, hard-hit Air Canada received an estimated C$5.9 billion ($4.7 billion) government aid package with the country gaining a stake of roughly 6% in the carrier.
While Canada's high vaccination rate could reassure tourists, the cost of the country's COVID-19 PCR test requirements for arrivals could dissuade some travelers, said Frederic Dimanche, director of the Ted Rogers School of Hospitality and Tourism Management at Ryerson University.
Loree said targeting US frequent flyers is a plus because they are largely accustomed to those requirements.
"They've figured out how to travel," Loree said. "So we want them to consider Canada as their next trip."
Air Canada shares closed up 3.48% in Toronto trade.
Boeing Showcases Eco-Friendly Tech As Industry Faces Pressure
Boeing Co showcased efforts to boost efficiency in its aircraft on Monday September 27, a week after rival Airbus staged a similar conference, as global aviation faces growing political pressure to cut emissions and demands by environmental groups for curbs to air travel.
The US plane maker is just one of many companies in the industry playing up its efforts to make its products more environmentally friendly, though there is debate over the speed at which new technology will be adopted.
Boeing's event at its flight test hangar in Seattle was anchored by an Alaska Airlines 737 MAX 9 flying demonstrator equipped with potential upgrades like a drag-reducing warning light and cabin sidewalls made from recycled carbon fiber.
"Many of our improvements come with a lot of small things at once," Boeing Vice President of Product Development Mike Sinnett told Boeing employees, industry and government officials and media gathered inside the building.
Aviation produces up to 3% of man-made CO2 emissions and 12% of CO2 from transport, the industry says. It has pledged to reduce net carbon emissions to 50% of 2005 levels by 2050.
Europe's Airbus last year announced plans to develop a hydrogen-powered airplane from 2035.
Boeing conversely has emphasized the expanded use of sustainable aviation fuels (SAF), which are made from feedstocks such as used cooking oil and animal fat, though it does not rule out generational technology leaps.
"Focussing on SAF is really important because there are thousands of airplanes already flying. The airplanes that will go into service for the next ten years have already been designed and those engines have been certified," Sinnett told reporters later.
"To have any meaningful impact we are going to have to...expand the use of sustainable fuels," he said, calling hydrogen and other technologies "a longer-term play."
Boeing has promised that its fleet would fly on 100% sustainable aviation fuels by 2030.
SAF at present accounts for only a miniscule amount of overall jet fuel use and jet engines are currently certified to run on up to 50% of the fuel.
Illustrating the scale of the challenge facing the industry, the world's two largest planemakers in 2020 delivered jets estimated to be responsible for total emissions equivalent to 600 million tonnes of CO2 over their lifetimes, a figure dampened by lower deliveries during the coronavirus pandemic.
Boeing's 737 MAX 9 ecoDemonstrator, the latest configuration in a decade-old test program, is set to fly to Glasgow ahead of a United Nations Climate Change Conference in November, a person familiar with the plan said.
Boeing And GAMECO To Set Up Two 767 Freighter Conversion Lines In China
Boeing Co and Guangzhou Aircraft Maintenance Engineering Co Ltd (GAMECO) will establish two 767 freighter-conversion lines next year, company executives said on Tuesday September 28, citing high air cargo demand.
GAMECO, a maintenance, repair and overhaul (MRO) provider part-owned by China Southern Airlines Co Ltd, had already been running three 737-800BCF lines converting passenger planes through earlier deals with Boeing.
The 767 deal will make it Boeing's biggest freighter conversion centre globally, GAMECO CEO Norbert Marx said on the sidelines of Airshow China, the country's biggest air show.
Airlines and leasing firms have been rushing to permanently convert older passenger jets into freighters since the start of the pandemic, betting on a boom in e-commerce as the value of used planes tumbles.
Marx said air cargo demand was strong, in part because of to a restructuring of the global supply chain.
The conversion boom is also helping aviation MRO groups offset some of the lost business from the decline in passenger flights.
Airbus Talking To China's Aviation Regulator About A220 Certification - Exec
irbus SE is in talks with China's aviation regulator about certifying its A220 narrowbody plane that has received strong interest from domestic airlines, the head of Airbus' China business said on Tuesday September 27.
Airbus China CEO George Xu said that the A220 would help airlines fill the gap between regional aircraft and larger narrowbodies and could be of particular use in the less developed western part of China.
The A220, which is larger than China's homegrown ARJ21 regional jet and smaller than the upcoming C919 narrowbody, has been in service elsewhere since 2016 but it has still not been certified by China's aviation regulator.
Xu's comments were made on the sidelines of Airshow China, the country's biggest air show.
EasyJet Reports 93% Take-Up Of £1.2bn Rights Issue
British airline easyJet said its investors had bought 93% of the new shares on offer in its £1.2 billion rights issue, designed to help fund its recovery from the pandemic.
The airline announced the cash call, its second during 18 months of COVID-19, earlier this month, at the same time as revealing it had rejected a takeover approach from an unnamed suitor, believed to be low cost rival Wizz Air.
EasyJet's chief executive, Johan Lundgren, said the extra funds would enable it to take advantage of new opportunities likely to arise as carriers like British Airways-owner IAG , Air France-KLM and Lufthansa retreat.
"The success of this capital raise, thanks to great support from investors, will enable easyJet to strengthen its balance sheet and accelerate its post-COVID 19 recovery plan," he said in a statement on Tuesday.
The airline's biggest shareholder, the family of founder Stelios Haji-Ioannou, decided not to participate in the rights issue, and their stake is set to reduce to around 15% from 25% when the shares go live at 0800 GMT on Tuesday September 28.
The founder has in the past clashed with management over its growth plans.
EasyJet shares fell 3% to 686 pence in early deals, after the underwriting banks, including Credit Suisse, BNP Paribas and Goldman Sachs, said they would sell the remaining 21 million shares via an accelerated book build. They closed the book at 0655 GMT, saying it was oversubscribed at 690 pence.
China's Domestic Aviation Manufacturers See Expansion In Post-Pandemic Boom
Commercial plane makers touted strong post-pandemic prospects for the Chinese aviation market as the country's largest air show opened on Tuesday September, with an increasing share of the spoils expected to go to domestic manufacturers.
The normally biennial Airshow China in the southern city of Zhuhai, delayed by a year because of COVID-19, is being held from September 28 to October 3, allowing Beijing to parade its growing aviation prowess.
China is a key hunting ground for deals for foreign aviation firms, thanks to the quick recovery in domestic travel since the depths of the pandemic, but the outlook is complicated by Beijing's desire to grow its own champions.
The country's aviation regulator may be a stumbling block for foreign planemakers looking to boost sales in the world's biggest market for new planes.
As Commercial Aircraft Corp of China (COMAC) ramps up production of the 90-seat ARJ21 regional jet, the regulator has not certified slightly larger offerings from Airbus SE and Brazil's Embraer SA that feature more advanced and fuel-efficient engines.
Airbus China CEO George Xu said on the show's sidelines that the manufacturer was still in talks with China about certification, which along with support services was the key to customer confidence in placing orders.
Embraer did not respond immediately to a request for comment about Chinese certification.
"We believe the Chinese aviation market will become world's largest in the future. Embraer has already built a strong and positive presence on the market providing a solid foundation for our most advanced jet, the E2," Embraer Commercial Aviation CEO Arjan Meijer said in a statement.
Outside China, the Airbus A220 entered service in 2016 and the Embraer E-Jet E2 family in 2018.
China, however, has policies that favour its homegrown planes such as offering them favourable airport slots, Civil Aviation Administration of China (CAAC) said last year.
COMAC on Tuesday September 28 forecast that over the next 20 years, Chinese airlines would need 953 regional jets with 90 seats, the size of the ARJ21. That compared with 261 planes with 120 seats like the more popular E2 models and the smaller version of the A220.
COMAC deputy marketing manager Yang Yang said there was enough room in the market for all players.
"The aviation market is as vast as the Pacific Ocean, where we have our own competitive territories," he told reporters.
COMAC expects local certification this year of its larger 160-seat C919, a rival to the Airbus A320 and Boeing Co 737 families, though it will take time to ramp up production.
"It reminds us that we need to fully listen to our customers and use our best products and best services to support our customers, because the post-COVID aviation market is full of competition, which is more intense than before COVID," Airbus' Xu said of the C919's entry into the market.
China's defence capabilities were also on display at Zhuhai.
The flying demonstration on a hot and hazy day that had crowds scrambling for shade included a colourful display with J-10s by the Bayi aerobatic team following an opening ceremony attended by military and government officials.
China's J-20 fighter jet flew at the show with domestic, rather than Russian-made engines for the first time, state media reported.
On the ground, China showcased a prototype of the CH-6 long-endurance drone capable of reconnaissance and strike operations and the WZ-7 high altitude surveillance drone.
The show is a mostly domestic affair because of tight quarantine rules, and local aerospace and defence firms have ramped up their presence. Some foreign companies, only able to send staff based in China, have smaller booths than they did at the last show in 2018.
Organisers announced the next Airshow China will be held from November 8 to November 13, 2022, returning to the pre-pandemic schedule.
Demand For Lufthansa Flights To US Soars On Reopening
Demand for transatlantic flights has jumped since the United States announced plans last week to reopen to fully vaccinated travellers from countries including most of Europe, German airline Lufthansa said on Tuesday September 28.
On some days last week, bookings for transatlantic flights were up threefold from the week before, with demand on some routes nearing pre-crisis levels, it said in a statement.
For the large traditional European airline players, such as British Airways-owner IAG, Lufthansa and Air France-KLM , the decision represents a chance https://www.reuters.com/business/aerospace-defense/easing-restrictions-will-boost-us-airlines-business-travel-still-unclear-2021-09-20 to recover the transatlantic routes that are key to their profits.
Lufthansa said bookings for December flights to the United States reached pre-crisis levels last week.
Both leisure and business travellers snapped up tickets for flights from Zurich and Frankfurt to New York and to Miami.
Bookings last week for Premium Economy, Business and First Class flights to the United States was up compared with the same period in 2019.
Lufthansa said it was launching additional flights to the United States to meet the jump in demand, offering three flights daily to Miami from November on carriers Lufthansa and SWISS.
It is also considering adding more connections to New York, in addition to up to 55 weekly connections from its European hubs that it already has scheduled, to meet demand for pre-Christmas travel.
As demand for flights to the United States soars, Lufthansa is also adding more feeder flights within Germany and to its European hubs in Austria, Belgium and Switzerland.
SAA And Kenya Airways Have Long-Term Plan For Pan-African Airline Group
South African Airways (SAA) and Kenya Airways (KQ) have signed a cooperation agreement with a long-term view to create a pan-African airline group, the two companies said on Tuesday September 28.
"It is not a merger but a partnership that seeks to re-organise KQ and SAA assets into an ecosystem that will make the South African and Kenyan aviation sector more competitive," Kenya Airways said in a statement.
SAA said in a separate statement that the pact did not preclude either firm from pursuing commercial cooperation with other carriers and said collaborating would help contain costs.
State-owned SAA restarted domestic flights last week and this week launches a scaled-down international service to five African capitals, after its longstanding financial woes were exacerbated by the COVID-19 pandemic.
It exited administration in April thanks to another state bailout, and the government has said it will sell a 51% stake in the airline to a local consortium.
Kenya Airways' passenger business has also been severely constrained by COVID-19, and it has focused on cargo to minimise losses.
Kenya has plans to renationalise the airline, whose code-share agreement with Air France-KLM for Africa-Europe routes ends this month.
Spain To Keep Cap On Airport Tariffs For 2022-2026
Spain has approved a €2.25 billion investment plan for its airports for 2022-2026, which includes a freeze on tariffs charged by airport operator AENA to airlines, the transport ministry said on Tuesday September 28.
"The freeze...places AENA's tariffs among the most competitive and will therefore contribute to attracting new companies and the recovery of the air transport sector," the government's statement said.
The plan, which expects an average €450 million in investment a year and is known as DORA-II, aims to ensure adequate provision of airport services.
Environmental sustainability and innovation will also be pillars of the new plan, which will introduce half a dozen new environmental markers among its measures of quality in service.
AENA said in a statement the decision "gives stability" for airports management for the next five years and will guarantee "an adequate level of investment to maintain and improve the airport infrastructure".
Spain passed a law last week ordering AENA to reduce commercial rents in direct proportion to the passenger flow in each local airport until the pandemic subsides.
The airport operator said it could lose up to €1.5 billion in revenue between 2020 and 2025 due to the decision.
Passenger volumes should recover by 2023 for the partly state-owned operator, while the bulk of commercial uncertainties should abate in the next 12 or 18 months as traffic improves, Bank of America analysts said in a recent note to clients.
Jordan's State Carrier To Resume Flights To Syria For First Time In A Decade
Jordan's state carrier, Royal Jordanian, will soon resume direct flights to Damascus for the first time in nearly a decade, in the latest step to restore extensive business ties with Syria hurt by conflict in the latter, government officials said on Tuesday September 28.
Flights have been suspended since the start of the decade-old conflict in Syria, even though other airlines continued to fly to Amman from Damascus. Indicating the government announcement was slightly premature, Royal Jordanian later on Tuesday September 28 said that an October 3. date to resume flights announced by the government still awaited final approvals. The airline said it planned a shuttle service to transfer passengers from Amman to Damascus airport by land.
The decision to resume flights was part of several taken at a two-day ministerial meeting that ended on Tuesday in Amman to boost bilateral trade, investment and transport ties. Jordan will fully reopen its main border crossing with Syria from Wednesday September 29 after imposing pandemic-related restrictions.
Before the conflict in Syria, the Nasib-Jaber crossing was a transit route for hundreds of trucks a day, transporting billions of dollars of goods between Europe and Turkey and the Gulf.
Although the Jaber crossing has been open since 2018 after the Syrian government drove rebels from southern Syria, bilateral trade has yet to recover to the $1 billion pre-war level.
The kingdom hopes cross-border trade and renewed transport links will help boost its debt-ridden economy, which was hurt by a steep economic contraction last year amid the pandemic.
"This is an important step to ease flow of goods between the two countries and Lebanon and the Gulf," said Daif Allah Abu Akula, chairman of the country's customs clearance companies association.
Jordan, a staunch US ally that supported mainstream rebels fighting against Syrian President Bashar al-Assad's rule, has pushed for rapprochement with Damascus in recent months, officials said.
Jordanian businessmen had largely shunned dealing with Syria after the 2019 Caesar Act - the toughest US sanctions yet that prohibited foreign companies trading with Damascus.
Jordanian officials say they have lobbied Washington to ease some of the tough sanctions placed on business dealings with Syria to help revive dealings with a main trading neighbour.
Jordan also said it was hopeful Washington would allow Syria to benefit from a plan to supply Egyptian gas to Lebanon via an Arab pipeline that crosses through its territory to ease a crippling power crisis.
Syria, which blames crippling Western sanctions on the plight of its economy, hopes wider business links with its southern neighbour will help it recover from the devastating impact of conflict and bring in much-needed foreign currency.
Green Costs To Push Up Travel Prices But Demand To Stay - Jet2
The boss of British airline Jet2 expects ticket prices to rise because of environmental demands but believes travel demand will stay robust as consumers prioritise holidays and find alternative ways to live a greener life.
After COVID-19 brought many airlines to the brink, the industry has refocused on an even bigger risk: climate change and an expected barrage of environmental taxes, legislation and new related costs over the next decade.
"I think a lot of things in life are going to become more expensive and we've got to accept that that will be the case," Jet2 Chief Executive Steve Heapy said.
Demand will return to pre-COVID levels despite rising environmental consciousness and "flight shaming," he said, referring to social pressure to avoid flying over emissions concerns.
"Maybe people will give up red meat twice a week to have an annual holiday. It's all going to be about choices," he said.
Jet2, which also sells package holidays, has committed to hitting net zero carbon emissions by 2050, as have a number of other airlines.
It plans to offset every tonne of carbon not covered by its contribution to existing schemes from 2022, has signed a deal to buy dozens of new Airbus A321neo jets, which are more fuel efficient than current plans, and will start using sustainable aviation fuel in its jets from 2026.
But low-emission bio-based fuels are in short supply and can cost at least three times more than kerosene. That, combined with the threat of new flying taxes, could spell trouble for airlines.
Heapy's main concern was that governments could impose consumption taxes on airlines, potentially hurting demand and making air travel accessible largely to the wealthy.
"We've got to be seen as an industry to be taking the right steps to decarbonize as quickly as possible," he said, calling on Britain to raise its investment in sustainable aviation fuels.
In the shorter term, Heapy said Jet2's bookings for this winter and summer 2022 had shot up since Britain relaxed travel rules earlier this month.
"We could be in for a very good winter but it all depends on what the government does," he said, adding that holiday companies needed stability and not the last-minute rule changes that have characterised Britain's travel rules so far in 2021.
Asked about a recent bid for British competitor easyJet , believed to have been from low-cost upstart Wizz Air, Heapy said, "I think that there probably will be consolidation. We have no plans to be involved in that."
United Airlines Ready To Fire Workers For Defying Vaccine Mandate
United Airlines said on Tuesday September 28 that nearly 600 US-based employees faced termination after failing to comply with the carrier's vaccination policy.
United Airlines said on Tuesday September that more than 99% of its US-based employees have been vaccinated against COVID-19.
In a staff memo, the airline said it will begin the separation process for the less than 1% of employees who decided not to get vaccinated.
In early August, the company became the first US carrier to require COVID-19 vaccinations for all domestic employees, requiring proof of vaccination by Monday September 27.
The carrier said it would start on Tuesday September 28 that the process of firing 593 employees who decided not to get vaccinated.
"This was an incredibly difficult decision but keeping our team safe has always been our first priority," Chief Executive Scott Kirby and President Brett Hart told employees in a memo.
The workers can save their jobs if they get vaccinated before their formal termination meetings, the company officials said.
United has received requests for vaccine exemptions from employees for religious and medical reasons. Those employees account for less than 3% of the airline's 67,000 U.S. workforce, United officials said.
The company had plans to put employees who received religious exemptions on temporary, unpaid personal leave from October 2. Those plans, however, have been put on hold until October 15 because of a lawsuit challenging the policy.
Excluding those who have sought an exemption, United said more than 99% of US-based employees have been vaccinated against COVID-19.
A company spokesperson said the airline plans to hire about 25,000 people over the next few years, and vaccination will be a condition of employment for all new hires.
United will also require students at its pilot training school to get vaccinated, the spokesperson said.
The company dismissed the notion that the vaccine requirement was deterring applicants for jobs at the air carrier.
United received 700 applications for approximately 400 job postings last month at a Denver career fair. Similarly, it has received more than 20,000 applications for approximately 2,000 open positions for flight attendants, the spokesperson said.
Boeing 737 MAX Test Flight For China's Regulator A Success - Exec
Boeing Co's 737 MAX test flight for China's aviation regulator last month was successful and the planemaker hopes a two-year grounding will be lifted this year, the head of Boeing's China business said on Wednesday September 29.
"It went off without a hitch," Boeing China President Sherry Carbary said of the test flight, speaking on the sidelines of Airshow China, the country's biggest air show.
Boeing working with the Civil Aviation Administration of China (CAAC) as it sifts through data and finalises reports before deciding whether the plane can be returned to service, Carbary said.
The ban, which has been lifted in the West and several Asian countries, could be eased in China around November, people close to the matter have told Reuters.
"We are hopeful it will happen by the end of the year," Carbary said, declining to be more specific. "It is up to CAAC. But I can tell you we are doing all we can to support them and we're encouraged about how closely they are working with us."
Before the 737 MAX was grounded in March 2019 after two fatal crashes, Boeing was selling one quarter of the planes it built annually to Chinese buyers.
The company's China sales have also been hobbled by US-China trade tensions.
US Commerce Secretary Gina Raimondo said on Tuesday September 28 that the Chinese government was preventing its domestic airlines from buying "tens of billions of dollars" of Boeing planes.
Carbary declined to comment directly on the remarks but she said free and fair trade was important to enable Boeing to deliver its planes around the world.
"I think right now our two governments are having some competitive issues on some sensitive issues that are legitimate and the two countries need to work through those," she said.
China's HNA Group And Strategic Investors To Offer Cash And Shares To Repay Debt - Sources
China's Liaoning Fangda Group and Hainan Development Holdings will offer cash and equity to settle debt owed to retail investors in HNA Group, four sources told Reuters, in the latest step to restructure the bankrupt company.
The details were disclosed by a Chinese government team that is carrying out HNA's restructuring at a meeting on Wednesday September 29 organised for creditors, two of the sources said.
During the meeting, retail investors were told that Hainan Development Holdings, owned by the provincial government of Hainan where HNA is headquartered, will offer 200 million yuan ($30.93 million) in cash to settle the debt, the two sources said.
It will also offer 500 million shares of HNA Infrastructure Investment Group that it holds to settle the debt, they added.
The team did not verbally provide details of Fangda's investment during the meeting, but three of the four sources said the Chinese industrial conglomerate will provide 3 billion yuan in cash towards resolving the retail investors' debts, citing details HNA had shared with other investors.
The sources also said HNA Group itself will give 1.7 billion yuan in cash. The remaining debts will be repaid by shares of Hainan Airlines, HNA Infrastructure Investment Group and CCOOP Group, they said.
All four sources declined to be identified due to the sensitivity of the issue.
HNA, Hainan and Fangda did not immediately reply to requests for comment.
In the 2010s, HNA used a $50 billion global acquisition spree, mainly fueled by debt, to build an empire with stakes in businesses from Deutsche Bank to Hilton Worldwide.
But its spending drew scrutiny from the Chinese government and overseas regulators. As concerns grew over its mounting debts, it sold assets such as airport services company Swissport and electronics distributors Ingram Micro to focus on its airline and tourism businesses.
After creditors filed a petition, a Hainan court placed the once highly acquisitive HNA in bankruptcy administration in February and in March it gave the go-ahead for 321 related companies to be merged as part of the conglomerate's restructuring.
Under the latest restructuring plan, HNA will receive strategic investment of 38 billion yuan after its restructuring, which will go to eleven of its entities including its flagship carrier Hainan Airlines, Reuters has reported.
Hainan Airlines said in September that Fangda will become a strategic investor and possibly its controlling shareholder. It did not disclose how much Fangda was investing at the time.
Etihad Working On Third Sustainable Financing
Etihad Airways is working on what would be its third financing transaction linked to sustainable investment considerations, the Abu Dhabi government-owned airline's treasurer said on Wednesday September 29.
Environmental, social and governance (ESG) concerns are gaining ground in the oil-rich Gulf region, with borrowers setting up ESG frameworks to transition to greener economies and capitalise on a global surge in awareness of sustainability risks following the COVID-19 pandemic.
"We’re now working on what would be our third transaction in the space", Daniel Tromans, group treasurer at Etihad said on Wednesday September 29, without disclosing details other than to say announcements could be made in the next few weeks.
He was addressing a panel on sustainability at the ACT Middle East Treasury Summit, an online event.
Etihad established a Sustainable Development Financing Framework in 2019, under which it raised €100 million to help fund the expansion of the "Etihad Eco-Residence", a sustainable apartment complex for cabin crew.
It also has a Transition Finance Framework through which it can raise cash via transition bonds, sukuk or loans, either through public transactions or private placements.
Proceeds from debt sales under that framework are eligible to finance investments in next generation aircraft to replace old fleet and for research and development into sustainable aviation fuels.
The airline has committed to net zero carbon emissions by 2050.
Etihad last year raised $600 million via "transition" sukuk, or Islamic bonds - meant to help companies gradually switch to more environmentally sustainable operations.
Air France-KLM Sees Decision Soon On Major Jet Order
Air France-KLM aims to decide in the coming months on an order of at least 80 medium-haul jets for its Dutch network and Transavia budget subsidiaries in what would be its biggest fleet transaction ever, its chief executive said.
The Franco-Dutch airline launched a tender earlier this year to renew and expand the medium-haul Boeing 737 fleets at KLM and the French and Dutch operations of Transavia.
Chief Executive Ben Smith said that the deal could involve a firm purchase of 80 aircraft with options for another 60 to 80.
Analysts have said the competition is Boeing's to lose after a long association with KLM, but Smith stressed the group was in talks with both the US plane maker and European rival Airbus. He said it was in parallel talks with engine makers CFM and Pratt & Whitney.
Smith was speaking at a ceremony to mark the arrival of the first Airbus A220 regional jet as part of a multi-stage effort to simplify fleets and reduce unit costs at the group.
Next up will be separate competitions around 2023 to replace the A320/A321 medium-haul jets and the A330 long-haul model operating on the Air France network, Smith said.
For the A320 replacement, Air France would be interested in a possible longer version of the Canadian-designed A220, if Airbus decided to launch one, he said.
The first of 60 Airbus A220 jets with 148 seats will enter Air France-KLM's French network from OctoBER 31, starting with flights to cities such as Berlin and Madrid.
Air France is beginning to see some recovery in business travel on domestic routes but premium travel remains far below pre-crisis levels, the unit's Chief Executive Anne Rigail said.
"We are seeing some signs in particular on domestic routes, with some conferences taking place especially in the south of France, but we are still very far from 2019 levels at this stage," Rigail told reporters when asked about business traffic.
Funds Demand Science-Based Emissions Targets From 1,600 Firms
Funds managing nearly $30 trillion in assets called on Wednesday September 29 for 1,600 of the world's most polluting companies to set science-based emissions reduction targets as a matter of urgency.
The 220 investors, including Fidelity International and Amundi, said they had written to CEOs of companies they invest in demanding targets that would help to cap global warming at no more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels by 2050.
Their call comes just over a month before world leaders meet in Britain for the latest round of global climate talks, with all countries challenged to set tougher targets as the impact of climate change becomes more pronounced.
The group said in a statement that the companies in question collectively account for 11.9 gigatons of so-called Scope 1 and 2 emissions, those tied to their own operations, which totalled more than the European Union and United States combined.
It said Hyundai Motor Company, chemicals company BASF and German airline Lufthansa were among those approached.
A Lufthansa spokesperson pointed to the airline's commitment to be net zero by 2050, and halve its net carbon emissions and be carbon neutral in its ground operations by 2030.
A spokesperson for Hyundai referred to a Sept. 6 statement in which the company pledged to become carbon neutral by 2045, helped by increased sales of zero-emission vehicles.
Coordinated by non-profit disclosure platform CDP, the institutions said they wanted all the companies to set targets through the Science-Based Targets Initiative, an independent body that checks goals are robust.
BASF said in a statement a quality framework to compare corporate climate targets was important and the SBTi was one of many frameworks.
"At this time, SBTi has not defined a sector-specific framework that would be important for us to reflect the specific characteristics of the chemical industry. SBTi has expressed interest in including us in the development process and we are happy to work with them."
The group did not specify in its statement what if any action its signatories would take if companies did not do as asked, but as shareholders they can use their voting powers to attempt to force change if it is not forthcoming.
"As long-term investors seeking to allocate capital responsibly, we expect our portfolio companies to develop, commit to and execute on science-based emissions reduction plans aligned with the Paris Agreement," said Barnaby Wiener, head of sustainability and stewardship at MFS Investment Management.