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Aviation Industry Updates: June 7, 2022

By June 7, 2022June 14th, 2022Industry News

JetBlue Increases Offer For Spirit As Bidding War Heats Up

  • JetBlue on Monday improved its offer for smaller rival Spirit Airlines in an attempt to outstrip competition in the race to buy the low-cost carrier.

  • Shares of Spirit rose 1.6% in early trading.
  • Under JetBlue’s revised terms, Spirit shareholders would receive $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee soon after Spirit shareholders vote to approve a deal.
  • JetBluelast month offered $30 in a hostile takeover bid for Spirit after initially offering $33 per share.
  • The move comes days ahead of a Friday shareholder vote on a competing offer from Frontier.
  • JetBlue Chief Executive Robin Hayes told CNBC that the airline had made “unprecedented divestiture commitments” to win regulatory approval.
    “We know what it takes to get this deal done,” Hayes said. “We need the Spirit board to seriously consider our offer.”

CNN

American Gives Rosier Outlook For Summer Revenue

KEY POINTS:

  • American Airlines on Friday raised its forecast of second-quarter revenue, joining a growing list of airlines expecting demand this summer to top previous forecasts as the travel industry recovers from the pandemic.
  • American predicted that revenue will rise 11% to 13% above the second quarter of 2019. That easily beat the airline’s earlier forecast of a 6% to 8% increase over 2019.
  • Still, shares of Fort Worth, Texas-based American fell more than 8% in midday trading amid a drop in broad market indexes.
  • Delta, Southwest, JetBlue and others have raised revenue forecasts recently, as the number of people flying in the United States creeps closer to pre-pandemic levels. At the same time, airlines are offering fewer flights than they did in 2019, which is helping them push average fares much higher.
  • American said revenue per seat will jump by up to 22% compared with 2019, easily beating an earlier forecast of up 14% to 16%.

Register Citizen

United Plans $100 Million Training Center Expansion

KEY POINTS:

  • United Airlines plans to break ground Wednesday on an expansion of its training center in Denver, an initiative aimed at getting thousands of pilots ready to fly passengers as the carrier goes on a hiring spree.
  • The project will cost about $100 million. The new four-story building at its training campus will allow United to add six new flight simulators. The airline plans to add an additional six simulators later on. It currently has space for 40 simulators.
  • The new simulators will be to train pilots on the Boeing 737 Max and Airbus jetliners, after a massive order last year, as well as the Boeing 787 Dreamliner, Marc Champion, managing director of the flight training center, told CNBC.
  • The carrier expects the project to be completed before the end of next year. Champion said the training center expansion project has been in the works for about a year.
  • Like other carriers, United is facing intense competition for pilots as the industry recovers from the Covid pandemic. The airline is planning to hire about 10,000 pilots between now and the end of the decade, Champion said. The Chicago-based carrier expects to add about 2,000 pilots this year.

CNBC

American Parks 100 RJ’s Due To Pilot Shortage

KEY POINTS:

  • American Airlines is the latest U.S. carrier to announce that its parking some regional jets due to a shortage of pilots.
  • Speaking at an event for Wall Street analysts on Friday morning, American’s CEO, Robert Isom, said that the carrier has parked about 100 aircraft.
  • “We have probably a hundred aircraft — almost a hundred aircraft that aren’t, aren’t productive right now, that aren’t flying,” Isom said at the Bernstein Strategic Decisions Conference.
  • American has not changed any capacity guidance as a result, Isom said. This implies that the airline has largely parked its lower-efficiency 50-seat aircraft. At American Eagle, that’s the Embraer 145 operated by two regionals — Envoy Air and Piedmont Airlines — and owned by American. The airline has shifted capacity to larger aircraft, such as the Canadair Regional Jet 700, 900 and the Embraer 175.
  • “So just like we have done some up-gauging on the mainline side of things, we’ve done that on the regional side, too,” Isom said. “So we’ve been able to offset quite a bit of the loss of pilots.”

The Points Guy

NGPA Doubles Aviation Scholarships

  • The National Gay Pilots Association (NGPA) is offering $300,000 in aviation scholarships this year, doubling last year’s amount. The scholarships are funded through industry partners and membership donations. Industry partners offering scholarships through NGPA in the 2022 program include Alaska Air Group, American Airlines, American Flight Schools, Coradine, Delta Air Lines, Envoy, Epic Flight Academy, FedEx, Flex Air, Netflix, Piedmont, PSA, Republic Airways, Solairus Aviation, Southwest Airlines, and United Airlines.
  • “NGPA is starting off Pride Month by opening our scholarship program. Over $200,000 of this year’s scholarship offerings are extended to students participating in the United Aviate Academy through our partnership with United Airlines. We’ve helped many young people achieve their aviation goals, and we are excited to continue doing that through like partnerships,” says NGPA v-p Troy Merritt.
  • The scholarships are available for all levels of flight training and other aviation-related higher educational training. They are awarded regardless of an individual’s gender identity, expression, or orientation, but all applicants are asked to provide evidence of their contributions to the LGBTQ community. All applicants must be members of the organization; membership can be purchased or renewed at NGPA’s website. The application window is open through July 31, 2022.

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