Germany's Hochtief said there are three bidders remaining in its sale of its airports interests, with the sale price expected to be more than EUR1.3 billion, according to a Reuters report. Vinci, HNA and a consortium of Fraport and Deutsche Bank fund, RREEF, are reportedly all offering around the same amount for the assets, which include Hochtief's stakes in airports in Athens, Budapest, Dusseldorf, Hamburg, Sydney and Tirana. A consortium comprising Allianz and Global Infrastructure Partners (GIP) is reportedly no longer in the running.
Three bidders remain in Hochtief Airports sale
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Ryanair's Frankfurt move puts pressure on Lufthansa and supports its German growth ambitions
Ryanair and Fraport announced on 2-Nov-2016 that the Irish ultra-LCC will open its 85th base at Frankfurt Airport, Lufthansa's main hub. Ryanair will base two aircraft at the airport and launch four new leisure routes in Mar-2017. With a daily departure to each of Alicante, Faro, Malaga and Palma de Mallorca, it expects to attract 400,000 passengers pa.
Although Ryanair has been increasing its primary airport presence for some time, CEO Michael O'Leary had previously said that Frankfurt Airport was one of the few, alongside London Heathrow and Paris CDG, that Ryanair would not serve. Frankfurt was seen not only as too expensive, but also as too congested for Ryanair's short turnaround times. Details of Ryanair's agreement with Frankfurt Airport have not been disclosed, but it is likely that the airline has secured favourable terms in return for traffic growth targets.
Ryanair's move into Frankfurt is relatively small compared with its operations in Berlin Schoenefeld and Cologne/Bonn, but this development supports its growth ambitions in Germany. Ryanair's average revenue per passenger is half that of Lufthansa's network airlines. Its move increases the competitive pressure on Germany's national airline.
Virgin Australia to commence Beijing and Hong Kong services in 2017 under HNA deal, if slots allow
Virgin Australia's long haul network will double in 2017 as Abu Dhabi and Los Angeles are complemented with daily flights to Beijing and Hong Kong, which Virgin intends to launch from an undisclosed Australian city on 01-Jun-2017. The A330-200 flights help Virgin move widebodies out of the domestic Australian market. The Beijing and Hong Kong flights will be part of an alliance with mainland China's HNA Group, which has announced an investment of 13% in Virgin with the intent of taking it up to 19.99%.
Beijing is the home of the HNA flagship Hainan Airlines, while Hong Kong is home to HNA's Hong Kong Airlines. Restrictions in China and bilateral constraints in Hong Kong mean that the HNA group airlines cannot fly trunk routes. Virgin Australia is free of the restrictions that Hainan Airlines faces in China, and can use the available frequencies for Australian airlines to Hong Kong (Hong Kong-based airlines have exhausted their allocation).
Virgin will however need to secure slots in these opaque markets – Beijing especially. Its partners could help or even give slots, but protective action by competitors should not be underestimated. The focus turns to the commercial arrangement and whether it will be profitable for Virgin. Hong Kong will generate some outbound Australia traffic, but the routes will be heavily sold by HNA – its airlines and travel agency partners. The Hong Kong service will be able to tap into Hong Kong Airlines' mainland China network, with some connections more efficient through Hong Kong than Beijing.