EasyJet still interested in Alitalia’s short-haul business

EasyJet has submitted an expression of interest for Alitalia. (AFP)
Updated 06 September 2018
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EasyJet still interested in Alitalia’s short-haul business

  • EasyJet, Germany’s Lufthansa and fellow budget carrier Wizz Air submitted expressions of interest this year for Alitalia or parts of its business
  • EasyJet Chief Executive Johan Lundgren said that any deal had to be strategic, had to be something the firm could handle operationally and had to make commercial sense

LONDON: EasyJet is still talking to the Italian government over Alitalia’s short-haul operations but the head of the budget airline stressed on Thursday that any deal needs to make commercial sense.
EasyJet, Germany’s Lufthansa and fellow budget carrier Wizz Air submitted expressions of interest this year for Alitalia or parts of its business, but the lengthy formation of a new anti-establishment government delayed the process.
EasyJet Chief Executive Johan Lundgren said that any deal had to be strategic, had to be something the firm could handle operationally and had to make commercial sense.
“Those are the things we are looking for and those are the discussions we are having. And sometimes the discussions are progressing faster and sometimes they are progressing a little bit slower,” he said at the Aviation Festival industry event.
Earlier on Thursday easyJet also said Singapore Airlines was joining “Worldwide by easyJet,” a service it launched last year to offer long-haul destinations without the need for costly and complex interline and codeshare agreements.
Closer to home, Lundgren said that he had been reassured by both Brussels and London that at least a basic agreement would be in place to enable flights to continue after Brexit next March.
Alitalia, a symbol of Italy’s post-war economic boom but now struggling to compete against low-cost carriers and high-speed trains, was put under special administration last year.
Italy’s previous government initiated a sale process, but the country’s new administration wants the majority of the loss-making carrier under state control.
Transport Minister Danilo Toninelli said in July there was a need for 51 percent of Alitalia to be kept in Italian hands “but with a strong investor next to it.”
However, the state-appointed commissioners who are running Alitalia said last month that three offers they had received were not appropriate, and they had not entered exclusive negotiations with any bidder.
“The government and the state would like to have a stake in there but that still leaves things open for potential other partnerships,” Lundgren told reporters. “So that’s what we are in discussions with them about.”
Under the Singapore Airline’s agreement, easyJet’s customers will be able to connect with Singapore’s flights via Milan Malpensa and with Singapore’s low-cost subsidiary Scoot via Berlin Tegel later this year.
Lundgren said 10 airlines, including Norwegian and WestJet, were now partners in the program, and he was in talks with other carriers to join.
He also said easyJet was working on contingency plans to cope with Brexit and it wanted clarity on Britain’s future trading relationship with the European Union.
“We know regardless of what’s going to happen in terms of deal or no deal that there will be a bare bones agreement in place,” he said.
“That’s very clearly confirmed to us in the discussions we had both from Brussels but also from Westminster. It would be inconceivable there would be no flying between UK and mainland Europe.”


US-China trade deal hopes grow as oil prices decline

Updated 19 June 2019
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US-China trade deal hopes grow as oil prices decline

  • Data suggested a smaller-than-expected fall in American crude inventories
  • Preparations underway for Donald Trump to meet Xi Jinping next week at the G20 summit in Osaka

LONDON: Oil prices declined on Wednesday as data suggested a smaller-than-expected fall in American crude inventories, as hopes for a US-China trade deal continue to grow.
Brent crude futures were down 51 cents at $61.72 a barrel.
US West Texas Intermediate crude fell 25 cents to $53.65 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.
After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482 million, the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1-million-barrel drop analysts had expected.
Official estimates on US crude stockpiles from the US government’s Energy Information Administration are due during afternoon trading.
US President Donald Trump offered some support, saying preparations were underway for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan, amid hopes a trade deal could be thrashed out between the two powers. Trump has repeatedly threatened China with tariffs since winning office in 2016.
European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that he would ease policy again if inflation failed to accelerate.
Tensions remain high in the Middle East after last week’s tanker attacks. Fears of a confrontation between Iran and the US have mounted, with Washington blaming Tehran, which has denied any role.
Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.
On Wednesday, oil markets shrugged off a rocket attack on a site in southern Iraq used by foreign oil companies.
“It is interesting to note that the crude oil futures market could not rally on hawks planting bombs in the Strait of Hormuz but could rally on doves planting quantitative easing,” Petromatrix’s Olivier Jakob said in a note.
“This is an oil market that doesn’t know how to react when an oil tanker blows up but knows how to react when the head of a central bank makes some noise.”
Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.
OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.