WestJet is reportedly in talks with Delta Air Lines to form a codeshare agreement after an agreement with Southwest Airlines was placed on hold indefinitely in May-2009 (Reuters, 30-Mar-2010). WestJet is expecting to receive five daily slots at New York LaGuardia Airport from Delta if a slot agreement with US Airways and other carriers is approved by the US DoT.
WestJet reportedly in talks with Delta Air Lines to form codeshare deal
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Air Canada Part 2: Financial progress makes investment grade metrics more tangible
A decade ago it would have been unheard of for Air Canada to contemplate reaching an investment grade credit rating. The airline had emerged from bankruptcy protection, but was still struggling financially. It would teeter on the verge of another formal restructuring before setting out on a course to restructure its financial foundation – a process that has allowed the airline to improve its balance sheet and leverage.
Air Canada’s leverage targets for YE2018 will not meet the general proxy for an investment grade rating; however, its lower capital commitments and debt refinancing could create an opportunity for achieving that status beyond 2018.
Attaining an investment grade credit rating likely remains a longer term goal for Air Canada as its major financial goals in the short term remain paying down debt that is creeping up due to a fleet renewal, as well as funding growth to drive long-term shareholder value. More meaningful shareholder returns will likely occur once the company reaches what it deems as acceptable progress in debt management, and reaches a certain maturity level in growing its international network.
This is Part 2 in a two part series on Air Canada. Part 1 dealt with long haul LCC subsidiary, rouge.
Alaska Air Group: locked in limbo until the government renders a decision on Virgin America merger
Alaska Air Group remains in limbo as it waits for the US Department of Justice (DoJ) to complete a review of the proposed Alaska-Virgin America merger. Alaska had originally hoped to gain government approval and close the deal in early 4Q2016, but the regulatory review unsurprisingly is taking longer than expected. However, Alaska remains confident of finalising the arrangement before the end of 2016, and is taking the proper financial steps to finance its acquisition of Virgin America.
In the short term Alaska is experiencing slightly improving trends in the US marketplace, and its unit revenue improved on a sequential basis from 2Q2016 to 3Q2016. Another positive development for Alaska is a slowing of competitive capacity growth in its markets in 4Q2016 and in early 2017. The tempering of growth is reflective of most US airlines planning to lower capacity expansion in 2017 as higher oil prices heighten the importance of returning to positive unit revenue.
Alaska also plans slower capacity growth of 7% in 2017, versus 8.5% in 2016. Approximately 3ppt of the increase is driven by longer stage lengths and the annualisation of nearly 10 new routes launched in 2016 – a mix of smaller and larger markets with varying levels of competition.