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Spanair is about to close

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Spanair is about to close

Old 13th May 2011, 18:20
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Spanair is about to close

The former owners of Spaniar, the airline SAS (Scandinavian Airlines Systems), given by certain bankruptcy of the Catalan company and are covering their backs to the markets. SAS´s new president, Rick Gustafson, has initiated a series of meetings with analysts to prepare their shareholders and investors to the fall of Spanair. Scandinavians want to protect their action before the close of events.

In a meeting with investors held on Tuesday, Gustafson said that SAS provides all possible scenarios regarding its former subsidiary. Among them, more likely, according to his predictions, is that Spanair will not pay the 200 million still owed by the airline's fall Catalan.

Gustafson did not wait for questions from analysts who attended the presentation of the results of first quarter loss of SAS-reduced 48% to 41 million, and proactively decided to explain what the impact would cause maximum Spanair its outcome. The implosion of the airline Catalan generate minimal damage thanks to writting down was made of this risk, the analysts explained.

Forewarned

Thanks to this operation accounts, SAS Spanair exposure would be limited to between 22 and 33 million euros (200 to 300 million SEK). "If such an event will occur," said the president of SAS to reassure financial analysts, our security guarantee that would achieve the objectives of this year with a good margin. "

As its subsidiary, SAS owns 11% of Spanair, "the numbers do not come with the Scandinavian company. After breaking the sale negotiations with Lufthansa and the announcement of the government ordered the abandonment of the shareholders of SAS Scandinavian, northern European airline depends on itself to secure its future.

In this environment, its new chief executive does not want to scare stock. According to industry sources, Gustafson is putting the band before the wound on its industrial participation in Spanair. Scandinavians sit on the board of directors of the Catalan and as knowledgeable about the situation first hand would take containment measures in all areas, being the main financial headache remedy.

A million a day

Gustafson's concerns are based on a number: one million euros a day. This is the rate at which losses grow Spanair. Estimates calculated in the sector and sent the Catalan government, the airline chaired by Ferran Soriano would have lost in the first quarter, with fuel cheaper than now, 50 to 70 million.

On the other hand, the cost per seat-mile would be offered the highest in the industry with a projection of 0.6 euros, almost double the average. Spanair would be paying too much more expensive fuel than its competitors because of the impossibility of recruiting coverage with banks to help cushion the kerosene bill. Spanair had hired $ 105 per barrel fuel commitments are estimated to have accessed the Digital Economy.


Just for information, another Airline is going to close...
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Old 13th May 2011, 19:55
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Whilst I found your post extremely difficult to read (I'm guessing English isn't your first language) the interim report to investors SAS Group Interim Report January-March 2011 | Cision Wire hardly says Spanair's failure is imminent. It's more about the financial situation of SAS.

From the press release

Stable financial position
It is also satisfying to be able to state that our financial position is stable. This is exemplified by the new bond loan that was issued in March 2011. At the end of March, our financial preparedness was SEK 11.9 billion, which is satisfactory and provides us, for example, with the scope to implement fleet renewal, which we have now begun. SAS has a remaining exposure in Spanair. In the event of Spanair going bankrupt, SAS’s total exposure is SEK 1.8 billion, but with a limited negative liquidity effect of MSEK 200-300. If such an event were to occur, this means that we would still meet our financial preparedness target with a good margin.

My interpretation:

1) We've just issued some new bonds and have loads of cash available to us - 11.9 Billion Swedish Krone to be exact. And we're going to begin renewing our fleet (hey Allegiant you want our last 26 MD-80s? one careful owner and all that...)

2) We still have a bit of liability if Spanair goes belly up but we've taken steps to limit this to 300 million SEK so about 2.5% of our total cash pile. DON'T WORRY - EVERYTHING'S FINE AT SAS
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Old 14th May 2011, 06:15
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DON'T WORRY - EVERYTHING'S FINE AT SAS
I think the posting was refering to Spanair.
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Old 14th May 2011, 09:11
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If Spanair goes bust who will the Spanish Controllers have to vector infront of us on approach?
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Old 14th May 2011, 15:18
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Does that mean BA (being married to IB now) for once score a victory over LH (which has Spanair within Star) ? Amazing. Sure, considering FR and EZY fly to every village in Spain from pretty much every corner of Europe, not a surprise. JK completely disqualified themselves when managing to crash their DC-9 (ok, it was a MD-82, but similar old design).
Spanair Flight 5022 - Wikipedia, the free encyclopedia
We had a similar event at LUX, also with shocking neglect on the side of maintenance, management and crew, and many people still mistrust Luxair. New management had to rebuild Luxair from scratch, which Spanair hasn't done. So they would deserve to disappear into history. I hope LH has learnt the lesson and doesn't even think about starting a 'Lufthansa Espania' or 'Spanishwings'. Is LH codeshare a Kiss Of Death these days ? Surely considering those airline's independence.
 
Old 14th May 2011, 15:55
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Remember that SAS only own 20% of the company - so SAS' position doesn't have too much of an impact like it could have. It can sell the it's stakehold if it has issues, but I can't see too much reflection on Spanair really..?
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Old 15th May 2011, 08:54
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While I am not flying for Spanair, I see on the flight I operate every day the huge impact that Spanish ATC has on my airline. In term of fuel, delays, sometimes causing change of crew or cancellation, the impact must be extremely heavy on an airline already in financial difficulty.
Thanks again to the Spanish ATC who contributed largely to this.
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Old 15th May 2011, 10:30
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Spanair for catalan people are considerd as a national airline. The latest adv of Spanair is based on national spirits, proud of be catalan, slogan is "We belive in Barcelona" (in catalan language). This adv is everywhere in Barcelona city and airport.
For this national spirit the catalan government don't leave Spanair to close, probably also using illegal state aid.
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Old 15th May 2011, 10:32
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I thought Vueling was the 'Catalan' airline. Spanair's base is Palma de Mallorca, which although the offical language is Catalan (or is it officially Mallorquin?), is not quite the same.
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Old 15th May 2011, 10:49
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Vueling is the first airline of BCN, but is a sister of Iberia and Iberia is not loved in catalunya because is a Madrid based carrier and has close all flight from BCN.

Last edited by cesare.caldi; 15th May 2011 at 16:47.
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Old 15th May 2011, 19:57
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Originally Posted by Capetonian
I thought Vueling was the 'Catalan' airline. Spanair's base is Palma de Mallorca, which although the offical language is Catalan (or is it officially Mallorquin?), is not quite the same.
IIRC Spanair relocated its HQ and registered office from Palma to Barcelona in 2009, and figuratively speaking wrapped itself pretty tightly in the Catalan flag.
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Old 15th May 2011, 20:34
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Sorry for repeating my question:

The thread title is "Spanair is about to close"

Yet all I can find is an SAS press release saying that IF Spanair fails then it won't damage SAS. Can anyone actually substantiate Spanair's imminent demise?
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Old 16th May 2011, 08:15
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Dear rareair,

"Spaniar is about to close" is my headline, that´s all.

According to SAS, Spanair is bankrupt
The new president of the Scandinavian Airline wants the market begins to assume the bankruptcy of the Catalan Company to protect its titles from the punishment of the shareholders. Spanair may be losing a million euros a day.

On the other hand, Spanair continues to pay salaries and suppliers thanks to the Generalitat of Catalonia & Banks, in other words, is the Catalan Government which prefers to cut the money in Health and Education in order to benefit Spanair which is not self-financing.

Health and Education in Catalonia is experiencing many financial cutbacks due to economic crisis. However, the Government would rather spend the money of citizens in Spanair which has a lot of problems.

In my opinion, Spanair is about to close, that´s my headline, unless they find investors ready to waste its money.

I´m sorry for the employees & citizens

B.R & Thanks.
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Old 16th May 2011, 08:55
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NEWYEAR

Your thread title and posts are highly irresponsible.

If all you have to base your comments on are that SAS article, which you have put your own twist on, then would you mind desisting and even better remove the thread altogether.

Your ramblings could be taken the wrong way and there are peoples jobs and livelihoods at stake.
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Old 16th May 2011, 10:53
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IB

What poster is showing is that the airline and a continuing major shareholder in Spanair is giving a clear indication that its investment is now worthless and it expects to lose money as a result of airline imploding.

It isn't nice to see this BUT do people wish to bury their head in the sand and say "How did this happen" rather than be aware that future may be imperilled.

It also has to raise questions to the regulator of Spanair regarding its operations with questions to its management.
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Old 16th May 2011, 11:49
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This is a forum to debate and discuss aviation issues.

If the Moderators of this forum think they should delete my post and my opinion, they can do it. I will not delete my post because some fellow members do not like to read the truth, my deductions and opinions which are shared by many aviation professionals. Spanair is about to close if it can not find investors who squander their money, in my opinion.
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Old 16th May 2011, 12:38
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What the report says is should, and they consider it a likely possibilty, the airline fails the effect on SAS has been mitigated. They do not say the airline is going to close.

What the OP objects to is the subsidies paid to the airline instead of it being spent on health care et al.

Given that the thread title is misleading to say the least.
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Old 16th May 2011, 12:45
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As the original posting was in somewhat stilted English (I'm being polite here) I suspect it may be a machine translation. If this is the case, may we have the original article, then at least those of us who speak Spanish or Catalan could read it in its original version.
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Old 16th May 2011, 13:05
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Catalan government expenditure on airlines and related infrastructure

As a Catalan resident taxpayer,with a passing non-professional interest in airline travel, the balance of expenditure on both Spanair and Ryanair over against other more necessary public services seems noteworthy.

In my opinion, whilst the massive direct subsidies to Ryanair are mentioned tangentially and infrequently in the local press, the monies to/ for Spanair do not generally even merit such brief coverage.

As for expenditure on infrastructure on the ground,the airport at Lleida is to all intents and purposes empty I believe.

I was in the (old) BCN terminal 2 last night and the place was deserted.

All these monies are justified as maintaining the vital tourist industry and its related jobs in a region where 20% is the unemployment figure but, as always, the issue of priorities and of attempting to use state funds to distort free (sic) markets does seem extremely complex.
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Old 16th May 2011, 14:11
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Here are some relevant quotes;

Press Release, Source: SAS On Tuesday May 10, 2011.

SAS Group Interim Report January-March 2011

SAS has a remaining exposure in Spanair. In the event of Spanair going bankrupt, SAS’s total exposure is SEK 1.8 billion, but with a limited negative liquidity effect of MSEK 200-300. If such an event were to occur, this means that we would still meet our financial preparedness target with a good margin.

Rickard Gustafson President & CEO


The Catalan Government has come to the rescue of the Spanair airline with a new urgent credit of 20 million €. The money has been granted by the Catalan Finance Institute.

The Generalitat Catalan administration has a 26.7% share in the airline, while total public participation is between 35 and 40% as the Fira de Barcelona, Turismo de Barcelona and Catalana de Inciatives are all also shareholders in the company.

Catalan Government spokesman, Francesc Homs, said that the Government wanted to save the company from ‘imminent sinking’, but he warned that there will be no more options for credit until Spanair can show ‘a certain financial stability’.

Spaniar ended 2010 at a loss despite carrying seven million passengers over the year, the company has not wanted to make the size of the loss public, and says it does not expect a return to profit until 2012.
Source Typically Spanish - Spain Business Jan 26, 2011

Note that the extra cash has been known about since January this year, it is not a new event and is being provided by some of the present shareholders in Spanair.

The quote from SAS of last week contains the only reference I can find in that press release regarding Spanair.

This will not be the first thread of this type on this forum regarding an airline's imminent demise, by someone who is an interested party, or works for one and/or has an axe to grind and wishes to see that airline fail.
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