Weekly Digest - January 23rd, 2012

Qatar Looking at an European Takeover Target
The second-biggest airline in the Gulf has indicated that it has chosen a target or targets for acquisition on the Old Continent. The airline already acquired a stake in Cargolux, Europe's largest freight carrier, and hinted about its intentions to become the biggest player in that market by 2015.

Company CEO Al Baker announced plans to make a strategic investment in passenger transportation and the shares of SAS and AerLingus (the two European state-backed airlines rumored as potential targets) immediately rose on the news.

Industry analysts point out that such investments have the largest impact in Germany, where barriers of entry have been imposed for Gulf carriers. Meanwhile, Germany's Cartel Office approved Etihad's bid to raise its stake in Air Berlin from the current 2.99% to 29.2%. Etihad is paying EUR 72.9 M to become the largest shareholder in the European discount carrier and has put up additional $255 M in 4-year debt financing.

Source:   http://www.bloomberg.com/
               http://online.wsj.com/


Qunar Considers US IPO
The Chinese travel site, primarily owned by China's search engine Baidu, is exploring US appetites for its stock. The company sold a $306 M majority stake to Baidu and now looks for other ways to capitalize on the soaring Chinese travel demand. The Boston Consulting Group forecasts the market will grow at 14% annually, reaching $871 B by 2020 and surpassing Japan as second-biggest after the US.

Qunar broke even in 2010. The company CEO reported that the travel site more than doubled sales in 2011.

Source:    http://www.bloomberg.com/

 

Earnings Reports
Southwest is the first US airline to post Q4 numbers. The airline reported a 16% rise in earnings to $152 M in Q4 2011 compared to $131 M a year earlier. 2011 yearly profit came up to $330 M excluding special items like fuel hedges. Southwest plans to keep capacity flat for 2012 as a measure against rising fuel prices.     

Royal Jordanian just released its Q3 figures. The Jordanian flag carrier announced a net loss of $4.2 M for the period, while revenue is up 8% for the three months ending Sept.30, 2011 at $309.7 M.   

Source:   http://online.wsj.com/
               http://www.centreforaviation.com/

EU Carbon Scheme Non-Negotiable
While the EU told US Secretary of State Clinton it was open to discussions on emissions, the Union was adamant it would not repeal its emissions trading scheme. As a concession to the US, the European Commission offered to exclude US carriers from the scheme if the companies participated in a similar initiative in their home country.
 
The scheme has been met with severe resistance ever since its initial announcement. The US cited 41 countries as having objections to the legislation, and is pushing for a bill in Congress to prevent US carriers from participating. China, another strong opponent of the legislation, threatened to put some of the Airbus orders in jeopardy if the EU persisted with the emissions charges.

Source:   http://online.wsj.com/
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