The Netherland's Schiphol Group and France's Aéroports de Paris (ADP) may reportedly participate in Brazil's upcoming privatisation of Rio de Janeiro Galeão International Airport, together with an unnamed Brazilian bank and construction firm, according to a report by EFE. Schiphol spokesperson Mirjan Snoerwang said, "The Brazilian authorities want to partly privatise the airport in Rio de Janeiro and we are studying a bid together with our French partner Aéroports de Paris and two private investors in Brazil, one of which is a construction company." ADP said, "If we decide to make an offer, it will be with Schiphol [Group]." The two operators hold at 8% stake in each other. As previously reported by CAPA, Brazil plans to sell 51% stake in Galeão and Belo Horizonte Tancredo Neves International Airport to boost investment in the facilities before the 2014 FIFA World Cup and 2016 Olympic Games, and hopes to raise BRL11.4 billion (USD5.8 billion) from the privatisations, which are expected to occur in Sep-2013.
Schiphol Group and Aéroports de Paris interested in Rio de Janeiro GIG privatisation: report
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Air France-KLM: margin grows, but performance and profit below IAG & Lufthansa airline groups.
The first of Europe's big three legacy airline groups to report results for 2Q2016, Air France-KLM improved its operating margin and still expects higher operating free cash flow for FY2016. However, it remains less profitable than the other two big legacy groups, IAG and Lufthansa, and is still reluctant to give a profit target for FY2016.
Air France-KLM's commentary on the outlook implies that it now expects to make a lower profit this year than previously anticipated, even if this is likely to be higher than in 2015. In effect, this completes a full set of profit warnings from the big three legacy groups, since IAG and Lufthansa have already signalled a lowering of their profit outlook for 2016.
By contrast, LCCs have generally been more positive in their 2Q reporting and outlook (with the notable exception of easyJet). All European airlines have highlighted a weakening outlook for unit revenue, due to industry capacity growth plus geopolitical and macroeconomic risks, but low cost airlines such as Ryanair and Wizz Air appear better placed to cope with this outlook, given their lower unit costs. At this point in the cycle, new Air France-KLM CEO Jean-Marc Janaillac will need to balance growth against productivity.
Air France-KLM: 1Q margin gain beats IAG & Lufthansa, but lack of 2016 target betrays low confidence
Air France-KLM narrowed its operating loss in 1Q2016 – mainly thanks to lower fuel prices, and also helped by lighter downward pressure on unit revenue than was felt by either IAG or Lufthansa. This probably reflects its tighter capacity management. Moreover, Air France-KLM's operating margin improvement from a year earlier was greater than both IAG's and Lufthansa's.
However, Air France-KLM's margin remained well below those of its rivals, both for the group as a whole and also for its LCC subsidiary Transavia in comparison with the LCC divisions of the other two. Emphasising the uncertain outlook for unit revenue (and echoing comments made by both IAG and Lufthansa in this respect), it does not expect its relative strength in 1Q to continue throughout the year.
Furthermore, Air France-KLM is still the only one of the three leading European legacy airline groups without a 2016 profit target. It rightly continues to prioritise capacity discipline, unit cost reduction and the lowering of net debt, while working to gain pilot union agreement to vital productivity improvements. However, as the global industry is enjoying cyclically high margins, Air France-KLM's reticence over profit guidance reveals its lack of confidence. The incoming CEO, Jean-Marc Janaillac, will need to rebuild this.