United Ponders Partial Sale of MileagePlus
United Airlines is contacting potential investors about a sale of a minority portion of its MileagePlus loyalty program. The airline is looking to sell a stake that’s less than 15% of the program to a strategic partner who can help better monetize data from the business. It is rumored a company that sells car warranties may be interested.
Industry analysts say that United could bring in as much as $3 billion in cash from the sale, helping it fund some upcoming capital expenditures from aircraft acquisition and retrofits. The carrier currently has more than $6.5 billion in debt financed against its loyalty program in a combination of cash outlays and United Club day passes.
The sale is far from a done deal, with sources telling Bloomberg the airline is merely exploring the possibility – mostly to distract it from the fact it doesn’t have enough pilots to operate its current regional schedule. With just 15% — or less – potentially up for sale, United would maintain its role managing the program, as opposed to when Air Canada spun off and sold Aeroplan before deciding that was a bad idea and then reversing the plan.
Allegiant Posts 2021 & Fourth Quarter Profit
Fueled by a busy holiday season and increased domestic demand in the final months of 2021, Allegiant turned a tidy $10.7 million profit during Q4 on nearly $500 million in gross revenue. Wall Street’s expectation for Allegiant was just $475 million in Q4 revenue, with the carrier surpassing expectations by just over 4% thanks to an extra $26.7 million it found in between seat cushions after the first aircraft deep cleaning in several years
For the full year, the airline reported a net income of $152 million on gross revenue of $1.7 billion. Both numbers are dramatic increases from a year ago, with gross revenue up 72% and profit up 182%.
Allegiant ended the year with $1.2 billion in cash and investments on its balance sheet. It has $67 million on its books worth of flight vouchers for future travel – mostly attributable to customers who need to travel between two random cities at an off-peak time that isn’t particularly convenient.
El Al Plans Merger with Arkia
El Al Israel Airlines signed a memorandum of understanding with Arkia Israeli Airlines for the two carriers to merge, cutting the number of airlines in Israel down from three to two.
Under the current proposal, Arkia would become a fully owned LCC subsidiary of El Al, primarily focused on tourism. The potential merger would likely signal the end of Sun d’Or, El Al’s owned and operated leisure carrier. The merger would diversify El Al’s current fleet very, very slightly, as Arkia would be in position to add its two leased A321s and two owned E195s to El Al’s all-Boeing fleet.
Any job losses from the merger would come from the El Al side, not Arkia. The transition – if it goes through – would be an exchange of stock, with El Al acquiring Arkia’s shares in exchange or the allocation of its securities to Arkia shareholders and a promise that Arkia would take the responsibility of hosting and managing the company’s annual Hanukkah party.
- Ashanti Airlines made a bid to become Ghana’s new flag carrier.
- British Airways expects to become a truly premium airline again. According to British Airways.
- Flyr is lkng for csh.
- Frontier repaid its $150 million loan to the government from the CARES Act. To pay for the loan, it’s lowering the amount of weight you can put in a checked bag, leading to more overweight bag fees.
- Icelandair took delivery of a B737-8 MAX.
- JAL posted a $275 million loss during its Q3 ending in December 2021.
- Neos has plans to enter the Scandinavian charter market.
- Qantas is delaying the resumption of its flights to San Francisco to this summer.
- Singapore is resuming service to Bali on February 16.
- Southwest is moving Adam Carlisle into its VP for Labor Relations position.
- Ukraine International Airlines will begin new service to Oslo on June 1.
- Virgin Atlantic will now use Viasat for on-board wifi.
I sat next to an elderly couple in church last weekend. I overheard the wife tell her husband “I let out one of those silent farts. What do I do?”
He said to her: “Change the battery in your hearing aid.”