EasyJet still interested in Alitalia’s short-haul business

EasyJet has submitted an expression of interest for Alitalia. (AFP)
Updated 06 September 2018

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.”


Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.