Lufthansa eyes struggling Etihad partner Airberlin after reporting best ever first half

Lufthansa is interested in taking more ‘wet lease’ aircraft from Airberlin, a partner airline of Abu Dhabi-based Etihad Airways. (Reuters)
Updated 03 August 2017
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Lufthansa eyes struggling Etihad partner Airberlin after reporting best ever first half

LONDON: Lufthansa wants to lease more aircraft from Airberlin, the struggling partner of Abu Dhabi’s Etihad Airways.
The German flag carrier would also be interested in taking part of the Airberlin business under the right conditions, as Etihad reviews its so-called equity alliance strategy that saw it invest in struggling European carriers including Airberlin and Alitalia.
Lufthansa chief financial officer Ulrik Svensson made the disclosure on an analyst call after the carrier reported the best first-half results in its history.
It comes just weeks after Etihad sold its minority stake in European regional carrier Darwin Airline, the first divestment since launching a strategic review.
“We are looking at a number of different scenarios when it comes to Airlberlin, and we would indeed be interested to take on more wet leases,” Svensson said on Wednesday.
“We are very interested in Airberlin, and if the right conditions are there we would be interested in taking part of their business of course.”
Etihad’s minority stakes in its codeshare partners, which include Airberlin and Italy’s Alitalia, have come under scrutiny as the Abu Dhabi-based carrier grapples with losses.
Etihad last week reported a net loss of $1.87 billion for 2016, despite carrying record passenger numbers, as losses from some of its equity alliance partners hit home.
It took total impairments of $1.9 billion, including an $808 million charge on exposures to equity partners, mainly related to Alitalia and Airberlin.
Svensson said three main challenges remain around an investment in the low-cost carrier: Its cost base, debt pile and potential cartel issues. He ruled out any interest in Alitalia, but said the wider Italian aviation market holds potential.
The Italian government has invited non-binding offers for Alitalia, which has been beset by persistent financial woes and industrial relations strife.
The airline collapsed into administration in May, more than two years after former Etihad chief executive James Hogan pledged to “reinvent” the struggling Alitalia brand.
The Italian government has agreed to spend €600 million ($709.8 million) keeping Alitalia afloat for six months, and hopes to find a buyer by year-end.
While as many as 10 parties have submitted non-binding bids, some are believed to be driven by gaining intelligence rather than representing serious interest.
Lufthansa raised its profit target for the year to above last year’s €1.75 billion. Other European carriers, including British Airways owner IAG and low-cost carrier EasyJet, have also boosted profit targets.


Filipino remittances from the Middle East down 15.3% in 2018

Updated 17 February 2019
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Filipino remittances from the Middle East down 15.3% in 2018

  • Cash remittances from OFWs in Saudi Arabia fell 11.1 percent last year to $2.23 billion from $2.51 billion previously
  • Personal remittances are a major driver of domestic consumption

DUBAI: Money sent home by overseas Filipino workers (OFWs) in the Middle East went down 15.3 percent to $6.62 billion in 2018 from $7.81 billion a year earlier, latest government data shows.
Lower crude prices, which affected most OFW host countries in the region, the job nationalization schemes of Gulf states and a deployment ban last year of household service workers to Kuwait were the primary reasons for the decline, a reversal from the 3.4 percent remittance growth recorded in 2017.
A government study has noted that Saudi Arabia was the leading country of destination for OFWs, with more than a quarter of Filipinos being deployed there at any given time, together with the United Arab Emirates (15.3 percent), Kuwait (6.7 percent) and Qatar (5.5 percent).
Cash remittances from OFWs in Saudi Arabia fell 11.1 percent last year to $2.23 billion from $2.51 billion a year before; down 19.9 percent to $2.03 billion in the UAE from $2.54 billion in 2017; 14.5 percent lower in Kuwait to $689.61 million from $806.48 million and 9.2 percent down in Qatar to $1 billion in 2018, from $1.1 billion a year earlier.
The Philippine government issued a deployment ban for Kuwait early last year, and lasted for five months, after a string of reported deaths and abuses on Filipino workers in the Gulf state.
OFW remittances from Oman, which implemented a job nationalization program like that of Saudi Arabia and the UAE, dove 33.8 percent to $228.74 million in 2018 from $345.41 million a year before. In Bahrain, cash sent by Filipinos rose 2.2 percent to $234.14 million last year from $229.02 million previously.
Meanwhile, overall OFW remittances grew 3 percent year-on-year to $32.2 billion, the highest annual level to date.
“The growth in personal remittances during the year was driven by remittance inflows from land-based OFs with work contracts of one year or more and remittances from both sea-based and land-based OFs with work contracts of less than one year,” the Philippine central monetary authority said.
Personal remittances are a major driver of domestic consumption and in 2018 accounted for 9.7 percent of the Philippines’ gross domestic product.