Two regional airlines battered hard by the pandemic will merge next year to shed billions of yen in annual costs, but will maintain separate business operations to hold onto key flight slots to Tokyo.
The move by Sapporo-based Airdo Co. and Miyazaki-based Solaseed Air Inc., announced on May 31, is intended to cut costs through joint procurement of fuel and supplies, as well as through streamlining back-office operations, including human resources and financial affairs.
They aim to slash 3 billion yen ($27 million) to 5 billion yen in annual costs within four to five years after the merger, which is planned to take place in October 2022.
Japanâs Outperforming Travel Bonds Show Bets Worst Is Behind
May 25 2021, 11:24 AM
May 25 2021, 9:59 AM
May 25 2021, 11:24 AM
(Bloomberg) The global spread of Covid-19 variants recently has taken the shine off a rally this year in many travel-related financial securities, but investors are still betting that firms with stronger finances will put the worst behind them.
(Bloomberg) The global spread of Covid-19 variants recently has taken the shine off a rally this year in many travel-related financial securities, but investors are still betting that firms with stronger finances will put the worst behind them.
Japan is an example of that. Its two main carriers, ANA Holdings Inc. and Japan Airlines Co., are both planning debt sales, and yield premiums on their outstanding notes have decreased from highs last year.
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May 19, 2021
Japan Airlines Co. is planning a yen bond sale next month, people familiar with the matter said, in what would be its first debt sale since March last year as its yield premiums fall.
The Tokyo-based carrier has hired banks for an offering of about ¥10 billion ($92 million) of five-year notes, said the people, who asked not be identified because the discussions are private. A Japan Airlines spokesperson declined to comment.
The yield premium on JAL’s 2023 bonds widened more than 50 basis points to 104 basis points in May last year as the COVID-19 pandemic put the brakes on international travel, but the spread has decreased 25 basis points since then as vaccine rollouts spark expectations of a gradual recovery in tourism, Bloomberg-compiled data show.
By Andrew Tangel Boeing Co. is nearing a fix for engine covers like the one that broke apart on a United Airlines 777 jet over Colorado earlier this year, people briefed on the matter said. The fix, expected to be completed as soon as early June, would strengthen the engine covers to prevent plane parts from detaching midair and striking the aircraft or falling to the ground below, these people said. After a United 777 s engine failed shortly after takeoff from Denver in February, its external cover broke apart, raining metal on a nearby suburb. No one was injured, and the flight landed safely.