Pluna is reportedly on the verge of bankruptcy and a two-day strike which will suspend all services for the next 48 hours, according to a Bernama report. The strike action is protesting working conditions and impending redundancies as the carrier attempts to restructure. The carrier currently owes UYU532 million (USD25 million) in fuel bills to Uruguayan petrol company Administración Nacional de Combustibles Alcoholes y Portland (ANCAP).
Pluna on verge of bankruptcy as strike cancels flights; owes USD25m for fuel
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LOT Polish Airlines: now restructured, and long haul focus is on 2020 growth. Partnerships critical
On 8-Sep-2016 LOT Polish Airlines announced its "2020 profitable growth strategy". This involves a goal to achieve "sustainable viability", after a restructuring programme which returned LOT to operating profit in 2014 after six loss-making years. Its privatisation may even be back on the agenda.
LOT currently ranks behind LCCs Ryanair and Wizz Air by share of traffic in Poland, which offers superior traffic growth potential versus Europe as a whole. The airline aims to increase passenger numbers from 4.3 million in 2015 to 10 million in 2020, growing its fleet from 43 to 70 aircraft. LOT's expansion will focus on long haul, particularly North America and Asia, where it currently has only five routes and where competition is considerably lower than on short/medium haul. Initial plans include the launch of Warsaw-Seoul this winter and a return to Warsaw-New York Newark next summer.
According to data from LOT, its restructuring has left it with a fairly efficient cost base by legacy airline standards and this will be important in competing with LCCs (but there is still a cost gap with LCCs). LOT's growth will focus on long haul but will need short-haul European feed – and partnerships. Although LOT no longer appears to be considering leaving the Star Alliance, it remains excluded from American and Asian JVs. Further, those JVs preclude members from working with LOT. Partnership growth will be as critical as it will be challenging.
American, Delta and United's varying approaches to shareholder rewards & balance sheet management
The three large US global network airlines – American, Delta and United – are all at different phases of their respective balance sheet evolutions. Delta is enjoying its newly minted status of reaching investment grade according to two ratings agencies; United has decided to expand its level of shareholder returns after lagging its peers in that metric during its still ongoing merger integration. Even after recently deferring some Airbus widebody orders, American remains in the middle of a significant fleet revamp. The company is also still completing certain facets of its merger integration with US Airways, which is one driver for American’s larger cash balances compared with its global network peers.
Each of the three airlines seems to be striving for the right balance of investment in their businesses – maintaining a robust balance sheet and delivering ample shareholder returns. The difference is in the strategies followed.