Europe Airline Daily: Main News: 29 April 2008

Lufthansa and TUI are reportedly making little progress in talks to merge their LCC subsidiaries, Germanwings and TUIfly (Reuters, 28-Apr-08). Some important points reportedly remain unresolved after three months of discussions, although some progress was reportedly made on technical issues during the latest talks at the end of last week. The original plan was to have an agreement in place by the start of the Summer 2009 schedule, although this is increasingly unlikely to occur.

Ryanair announced (28-Apr-08) plans to increase baggage and airport check-in charges on 05-May-08, from EUR9 to EUR10, and EUR4 to EUR5, respectively. The carrier is increasing charges to encourage passengers to check in on-line and travel within the 10kg hand luggage allowance. Meawhile, the carrier appointed Ms Sinead Finn as its new Director of Commercial Revenue. [more at Peanuts.aero]

Ryanair: “40% of Ryanair passengers currently avoid queues at both check-in and boarding by availing of our free web check-in service, and this increase in baggage fees will result in fewer checked-in bags and more passengers changing to online check-in… We will continue to increase baggage fees until half of our passengers check-in online, which will allow us to reduce check-in and handling costs and pass on these savings to our passengers in the form of Europe’s guaranteed lowest fares,” Peter Sherrard. Source: Ryanair, 28-Apr-08.

UK International Airlines, a Sheffield-based carrier that ceased operations in Dec-07, has formally entered insolvency proceedings (Sheffield Star, 28-Apr-08). A court appointed administrator is hoping to find an investor willing to resurrect the carrier, which has had its two B767s repossessed. UK International Airlines operated services from East Midlands Airport to Sharjah and Islamabad.

Virgin Atlantic’s acquisition of seven Air Jamaica slots at London Heathrow will come under investigation by the Jamaican Contractor General (CaribWorldNews, 28-Apr-08). The slots were sold in Mar-08 for USD10 million, but their revenue value has been estimated at USD364 million by the Jamaican Government.

Corsairfly launched a once weekly Paris-Havana service, using B747-400 equipment (Alternative Airlines, 28-Apr-08) – see Route Changes Table for more information.

Finnair and Icelandair signed (23-Apr-08) a codeshare agreement covering Helsinki-Reykjavik service operated by Icelandair, and Helsinki-Warsaw service operated by Finnair, effective 01-May-08.

Lufthansa requested Indian Civial Aviation Ministry permission to operate A380 equipment to India from 2010, potentially becoming the first carrier to deploy the aircraft in India (livemint, 28-Apr-08). The carrier has shortlisted Delhi and Mumbai as preferred destinations for A380 operations. Kingfisher Airlines is scheduled to take delivery of the first two of five A380s in 2011/12.

Lufthansa announced plans to base six E-195s at Milan Malpensa International Airport from the beginning of 2009, to operate on intra-European routes (Reuters, 28-Apr-08). The aircraft will be operated by Lufthansa subsidiary, Air Dolomiti.

SEA, the operator of Milan's airports, stated it would continue with its EUR1.3 billion damage claim against Alitalia over the airline's downscaling of operations at Milan Malpensa International Airport (Thomson Financial, 28-Apr-08). According to SEA, Alitalia broke contractual agreements to operate a hub at Malpensa, for which new arrivals fail to compensate. The airport has already replaced more than half of the 800 weekly flight movements reduced by Alitalia.

Anadolujet, a new subsidiary of Turkish Airlines, officially launched operations on 23-Apr-08, commencing Ankara-Van and Ankara-Erzurum services (OZG-MS, 27-Apr-08). Anadolujet plans to operate over 20 domestic routes in the near future from its operating base at Ankara.

CSA Czech Airlines and Letiste Praha International Airport could both be sold to one investor, according to Deputy Finance Minister, Ivan Fuska (Thomson Financial, 28-Apr-08). The privatisation of both companies could also take place simultaneously. Czech private equity group, Penta Investments, and Indian industrial conglomerate, Essar, in a JV with Hochtief, are among potential bidders in both companies. Air France, Aeroflot, Czech Penta and US investment group, Odien Group, are reportedly interested in the airline, while Essar, GMR Group and Changi Airport were named among bidders for the airport.

Tunis Air will reportedly acquire 12 A320s and four A350 XWBs from Airbus, according to French diplomatic sources (Reuters, 28-Apr-08).

United Airlines and US Airways are reportedly in advanced merger negotiations, after Continental Airlines announced it has decided not to pursue a merger with another airline, and moved away from similar merger negotiations with United (Reuters, 28-Apr-08). A merger agreement could reportedly be finalised in the next few weeks, and would include “meaningful” capacity reductions.

Thai Airways confirmed it is conducting a wide-ranging cost-cutting programme to help it cope with the "hostile operating environment" (Bangkok Post, 29-Apr-08). The carrier is reviewing its fleet modernisation plan, including potentially reducing the number of aircraft it plans to acquire.

Qantas stated it is willing to consider merger talks with another airline (Sydney Morning Herald, 29-Apr-08).

Qantas: “We keep saying we are interested and will keep looking. The rest of the world will keep consolidating because the industry needs to rationalise. Whether this brings anybody else that might be interested - we will keep a lookout for that. Like in any relationship, both parties need to be interested”, Peter Gregg, CFO. Source: Sydney Morning Herald, 29-Apr-08.

Etihad Airways confirmed it is considering establishing a “budget” subsidiary, although it has no formal plans to establish another unit at the present time (Air Transport Intelligence, 28-Apr-08). Etihad leased six A320s for regional operations in late 2007 and early 2008.