German public sector strikes to hit air travel on Tuesday

Frankfurt, above, and Munich airports are the two biggest hubs for Lufthansa, Germany’s largest airline. (Reuters)
Updated 09 April 2018

German public sector strikes to hit air travel on Tuesday

BERLIN: German public-sector workers will extend strikes to airports across the country, labor union Verdi said on Monday, predicting flight disruption as it seeks to increase pressure in pay talks.
Verdi, which is asking for a 6 percent pay rise for around 2.3 million employees in various public-sector roles across Germany, said ground staff and some fire services staff would be on strike on Tuesday at Frankfurt, Munich, Cologne and Bremen airports.
Frankfurt and Munich are the two biggest hubs for Lufthansa, Germany’s largest airline.
Verdi said the strike at Frankfurt airport would run from 5 a.m. to 6 p.m. local time (0300-1600 GMT) on Tuesday and involve security staff, as well as workers who load and unload planes.
Frankfurt airport operator Fraport warned passengers to expect significant disruption on Tuesday. A spokeswoman said security checkpoints would likely have to be closed due to the strike.
Similar strikes four years ago led to hundreds of flight cancelations at Germany’s largest airport, particularly on short haul flights.
Public transport, swimming pools, garbage collection, and childcare facilities are also areas that have been targeted by strike action in the latest pay dispute.
A third round of pay talks is scheduled for April 15 and 16.
“Employers have not yet put forward an offer. With strikes and industrial action, employees are increasing the pressure on employers to end their blocking tactics,” Verdi boss Frank Bsirske said in a statement.


Cathay Pacific shelves US dollar bond plans amid Hong Kong unrest

Updated 25 min 16 sec ago

Cathay Pacific shelves US dollar bond plans amid Hong Kong unrest

SINGAPORE: Cathay Pacific Airways has shelved plans for its first US dollar debt deal in 23 years, the airline said on Friday, after sources told Reuters that global investors had questioned the pricing due to civil unrest in Hong Kong.

The airline, the biggest corporate casualty of widespread anti-government protests in the Asian financial hub, on Friday lowered its second-half profit expectations, citing “incredibly challenging” conditions in its home market.

Cathay had started meeting investors in Hong Kong and Singapore on Sept. 24 after it mandated four banks to explore carrying out a US dollar denominated bond, according to a term sheet issued at the time, seen by Reuters.

It would have been the first US dollar debt deal for Cathay since 1996 and had been touted as a landmark transaction for the airline given all of its debt is denominated in Hong Kong dollars.

The issuance was to be unrated, and two sources with knowledge of the matter said that Cathay was willing to pay 200 basis points over the US Treasuries rate to secure three-year or five-year funding, with the size and term of the placement dependent on demand.

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Cathay has only carried out 12 bond transactions in the past decade and all were priced in Hong Kong dollars.

However, investors demanded a higher price of at least 300 basis points over US Treasuries, which made the deal more expensive for Cathay, said the sources, who were not authorized to speak publicly about the matter. Cathay’s term sheet had said the transaction would be reliant on market conditions. A Cathay spokesman on Friday said the Hong Kong dollar private placement market was providing more funding opportunities and a debt issuance in that market was completed last month. “We will continue to monitor the US dollar bond market in future,” he said in a statement.

Dealogic data showed that Cathay raised $102 million in October and $64 million in May through Hong Kong dollar denominated deals.

The airline has only carried out 12 bond transactions in the past decade and all were priced in Hong Kong dollars.

Cathay had mandated Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank and HSBC to work on the shelved US dollar bond deal.