Delta Goes Wheels Up
Now we know where Delta is spending the new revenue it’s getting as everyone tries to earn MQDs to maintain their status in Delta’s Medallion Race to the Bottom, as the carrier leads a group of investors that’s putting $500 million into the private jet operator Wheels Up.
The $500 million shakes out as a $350 million loan from all four companies combined (which will be written off when the company fails soon enough), a $100 million revolving credit facility from Delta (which will be drawn down and then written off when the company fails soon enough), an additional $50 million term loan (you know where this is going), 400 pounds of ground up Biscoffs to be used at the base for a cheesecake, and 10 SkyClub passes which just became far more valuable than they were a week ago.
In exchange for their generosity, the companies will receive common stock of Wheels Up that represents 80% of its outstanding equity (which will be worthless when the company fails and blah blah blah). Following stockholder approval of the deal, the four lenders will own 95% of Wheels Up and will have rid themselves of a lot of ground up Biscoff. Wheels Up also is changing its board of director structure, with it now being composed of four directors from Delta, two each from both Certares and Knighthead, one from Cox, and one rotating Delta Platinum Medallion — chosen from the remaining 3 that still qualify — on a monthly basis.
Qantas Ironically Wants Refund from CEO
Qantas is seeking to receive A$14.4 million of the A$21.4 million paid to its former CEO Alan Joyce back after the executive
was fired resigned over the airline’s selling of flights it knew had already been canceled and was then very slow to refund.
The carrier posted its annual report this week which disclosed the princely sum paid to Joyce, with the airline saying two-thirds of the comp is subject to being returned if it can prove Joyce’s actions were detrimental to Qantas. In addition to a potential clawback scenario from the CEO, Qantas is also withholding all executive bonuses while the Australian government’s investigation continues. In the meantime, all regular compensation is being paid out, but it is being paid in Vegemite instead of hard currency as a hedge against future legal action.
Of the A$14.4 million at risk of being returned to Qantas, A$8.3 million is attributed to long-term bonuses, while A$3.9 million is tied to the airline meeting certain metrics for customer satisfaction, on-time performance, and profit, while the remaining A$2.2 million is withheld as per the board while it awaits the outcome of the federal government’s investigation.
Air Belgium Says Bye-Bye to Passengers
Air Belgium is ending passenger services on October 3 and will focus on being a cargo carrier and dabbling in the occasional wet-lease it will operate for other airlines. Flights scheduled for the carrier after October 3 are going to be canceled and customers can expect to receive a refund. Any questions about refunds are to be directed to Qantas.
Despite no longer offering flights to paying customers beyond the next two weeks, the carrier’s loyalty program is still expected to be more customer friendly than the new Delta program well into 2024 and beyond.
Air Belgium is currently flying between London and Chicago on behalf of British Airways, and is planning to begin operating between Warsaw and New York on behalf of LOT shortly. Those wet-lease operations will continue, and the carrier will continue to offer all passengers a blow dryer and towel upon boarding to deal with the wet-lease conditions. The airline blamed external factors for its failure to maintain passenger operations, including the war in Ukraine and the pandemic, which is a fair and valid point as Air Belgium is the only airline that’s been affected by either war or pandemic.
BA Offers to Cover Pilot Training Costs
British Airways’s latest plan of action to address a looming pilot shortage is to cover costs for up to 60 pilots per year, for as much as $100k per pilot, a figure which includes all tuition costs plus room, board, and food at its Speedbird Pilot Academy.
As we all know, there’s always a catch. While it will fund housing and food costs, the food will be leftover economy class catering, with unclaimed trays on London-bound flights being served to the prospective pilots. As for housing, everyone in the program will have a “bed” but it will also serve as the only chair in the living space and comes with a tiny tray table to eat meals and work on, a 14-inch TV that only works above 10,000 feet, and the only bedding on offer will be what the pilots themselves claim when cleaning planes as part of their repayment to BA for the free access to the program.
The airline says anyone between the ages of 18 and 55 when they start their training can apply for the program. No prior flying experience is necessary, which ironically is the same language Pakistan International Airlines uses for its pilot hiring program as well.
France Continues Crusade Against Low Airfares
The French government has surprisingly not yet surrendered in its battle over placing a pricing floor on airfares within the EU as it continues to push its agenda designed to reduce the environmental impact of flying.
Airlines are — shockingly — against the proposal, especially the numerous LCCs in Europe, with an entire business model based on low fares and high fees. The French government faces an uphill climb to get any sort of its measure enacted beyond its own borders, as discussions amongst EU countries on aviation fuel taxes have hit a wall. Belgium recently introduced a €10 tax per passenger on flights shorter than 500km, and a €2 fee per passenger on EU routes, causing Ryanair to end its flying to Brussels/Zaventem.
The EU currently has a law on the books that allows airlines to set their prices without government interference, so it would require a new EU-wide law, led by the French which just seems like an oxymoron anyway.
- Air Canada will allow smoked meat fans to sample the offerings of two cities when it begins daily flights between Montreal and St Louis in May
- Air India Express and AirAsia India announced the start of an interline agreement before they eventually combine.
- Air Peace is peacefully demanding slots at London/Heathrow
- AirAsia Cambodia is the airline you didn’t know you needed.
- airBaltic can’t stop adding summer 2024 destinations.
- British Airways is going ahead and beginning a codeshare with IndiGo.
- Condor seems to think San Antonio has finally earned its stripes for long-haul service to Europe as it launches 3x weekly flights to Frankfurt beginning in May.
- Cubana brought back a Tu-204 into service because what’s old is new again. Or at least, what’s old is the only thing still functioning.
- Delta is ending its Dusseldorf – Atlanta route next month, which will signal the end of any direct service between DUS and the United States. When asked why the flight was ending, Delta CEO Ed Basitan reminded us that he’s not in charge anymore, and that if anyone has a problem with any decision to leave him alone and “ask Tom.”
- flyBondi doubled its fleet from one airplane to two.
- Icelandair still expects to turn a profit this year, just ask Icelandair.
- JSX is either too cool for Austin, or Austin is too cool for JSX.
- Kenya Airways donated a B737 to a local high school. The plane joined both the drama club and the yearbook staff but declined to join the aeronautics club for fear of being typecast.
- Kuwait Airways named Ahmed Alkreebahni as its acting CEO. This was needed because apparently the previous guy did a poor job acting as CEO.
- Level will begin to level off between Barcelona and Miami three times a week, beginning in March.
- New Pacific, the airline that’s had as many name changes as it’s had successful routes, is adding two more (routes, not names): Ontario to Nashville (3x weekly beginning Nov 17) and Ontario to Reno (3x weekly beginning Nov 16).
- Nok Air is at risk of being nok’d out of the Thai Stock Exchange.
- Norwegian‘s merger with Widerøe hit a roadblock.
- SriLankan established an interline agreement with Emirates.
- Spirit is being sued by a Detroit woman who says a $5,700 watch plus thousands of dollars worth of designer clothes were stolen from her checked bag during a Montego Bay – Philadelphia – Detroit journey on the airline. Spirit is fighting the lawsuit using common sense as it said in its filing “we know damn well no one flying our airline could afford any of the stuff she claims to have lost. Also, who’s dumb enough to check a bag with us on a connecting itinerary?”
- TAP‘s newest owner could be tapped as soon as next week.
- United promoted Mike Leskinen to Executive Vice President and CFO.
- UPS Airlines named Bill Moore as its next president. Moore is expected to sign his contract just as soon as FedEx delivers the darned thing.
- Virgin Australia will take your tired, poor, huddled
- Volotea is preparing for an IPO.
I joined the gym nearly a year ago, and I haven’t seen any personal progress. One of these days I’m going to go there in person and see what all the fuss is about.