News
China Southern Airlines confirms $200m stake sale to American Airlines
According to BBC Source The US airline will buy $200m (£159m) worth of shares in the Chinese firm and the two will “seek to increase cooperation”.
China Southern is the latest of China’s top airlines to bring in an investor from outside the mainland.
The deal should offer American Airlines more possibilities to tap into China’s growing aviation market.
In a filing to the Hong Kong stock exchange, China Southern said the two sides would work together to share transport, staff and airport facilities – as well as cooperating on code sharing and passenger loyalty programmes.
China Southern is the last of China’s three major airlines to bring in a strategic investor from outside mainland China. Hong Kong’s Cathay Pacific holds about 18% in flag carrier Air China while US airline Delta bought a 3.6% stake in China Eastern in 2015.
American Airlines will own a 2.7% share of its new partner.
Chinese carriers have been aggressively expanding their fleets and boosting international destinations to cater to the strong growth in outbound Chinese travel. China is one of the biggest sources of tourists to the US.
Airlines
Alaska Airlines Acquisition of Hawaiian Airlines Reshapes the Air Travel Landscape
Alaska Air Group, Inc. (NYSE: ALK) and Hawaiian Holdings, Inc. (NASDAQ: HA) jointly announced today the execution of a definitive agreement, signifying Alaska Airlines’ acquisition of Hawaiian Airlines at a cash price of $18.00 per share. The total transaction value stands at approximately $1.9 billion, encompassing Hawaiian Airlines’ net debt of $0.9 billion.
The combination of complementary domestic, international, and cargo networks
This strategic union is poised to open up an array of additional destinations, providing consumers with increased choices in crucial air service options across the Pacific region, Continental United States, and globally.
The transaction is anticipated to establish a robust platform for growth and competition in the U.S., offering enduring employment opportunities, ongoing community investments, and a commitment to environmental stewardship.
Key Points:
- Acquisition Overview:
- Fleet Expansion and Network Reach:
- Creates the fifth-largest U.S. airline with a fleet of 365 narrow and wide-body airplanes.
- Enables access to 138 destinations through combined networks and over 1,200 destinations via the oneworld Alliance.
- Hub Development and Connectivity:
- Honolulu to become a key hub for the combined airline, offering expanded services to the Continental U.S., Asia, and the Pacific.
- Tripling the number of destinations from Hawai‘i to North America, while maintaining robust Neighbor Island service.
- Commitment to Hawai‘i:
- Strong commitment to Hawai‘i, ensuring robust Neighbor Island air service.
- Aiming for a more competitive platform supporting growth, job opportunities, community investment, and environmental stewardship.
- Employee and Union Commitment:
- Commitment to maintaining and growing the union-represented workforce in Hawai‘i.
- Immediate value creation with at least $235 million of expected run-rate synergies.
- Investor Call and Timeline:
- Investor conference call scheduled for today at 5:00 p.m. ET / 2:00 p.m. PT / 12:00 p.m. HT.
- Anticipated closing of the transaction within 12-18 months.
- Strategic and Financial Rationale:
- Complementary networks to enhance competition and provide greater choice for consumers.
- Preservation of both Alaska and Hawaiian Airlines’ brands on a single operating platform.
- Expected to deliver high single-digit earnings accretion for Alaska Airlines within the first two years.
- Community and Sustainability Commitment:
- Focus on growth in union-represented jobs and strong operational presence in Hawai‘i.
- Commitment to environmental stewardship, aligning with Alaska Airlines’ five-part path to net zero by 2040.
- Synergies and Accretion:
- Expected run-rate synergies of at least $235 million.
- Transaction multiple of 0.7 times revenue, approximately one third the average of recent airline transactions.
- Conditions to Close:
- Approval by regulatory authorities and Hawaiian Holdings, Inc. shareholders.
- Expected to close in 12-18 months, with the combined organization based in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci.
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