Monday, 29 October 2007

Global News (source: Wall Street Journal)

It appears that the global credit market turmoil has not affected British Airways ability to secure funding to buy planes. Mr George Stinnes commented in a conference on Friday regarding a £1.7 billion ($3.49 billion) debt British Airways has secured for aircraft to be delivered over the next five years. The airline said it has concluded arrangements for the financing and Mr George Stinnes said the cost of funding for the planes was very consistent with what the company had done in the past. The arrangement which allows British Airways to draw down money in any currency that is suitable, will satisfy the company’s aircraft purchasing until the end of 2011.

Scandinavian airline, SAS AB, said it would stop using Dash 8 Q400 aircraft after a series of crash landings, the latest on Saturday in Copenhagen. The airline, which has 27 of the planes, had only recently resumed flights of the Q400 turboprops after it had been forced to ground its fleet following two crash landings last month in Lithuania and in Denmark. No one was seriously injured in any of the three crash landings, which all involved problems with landing gear.

Kia Motors Corporation, reported a wider third-quarter net loss because of lower production levels amid holidays and strikes, and said it is unlikely to meet its full-year operating profit target. The South Korean auto maker, 38.6% owned by Hyundai Motor Company, posted a net loss of 55.1 billion won ($60.6 billion), compared with £43.9 billion won a year earlier. Operating losses widened to 116.5 billion won from 88.6 billion won, while sales fell 6.7% to 3.268 trillion won.

Tata Steel Ltd., the worlds sixth largest steelmaker by capacity, said its fiscal second quarter unconsolidated net profit rose 8.2% from a year earlier. Gains on foreign-exchange transactions offset higher interest costs. Unconsolidated net in the quarter ended September 30, rose to 11.91 billion rupees ($303 million) from 11.01 billion rupees a year earlier. Net sale rose 14% to 47.85 billion rupees.

Emirates Airlines founded by Dubai’s rulers in 1985, is considering an initial public offering (IPO) that could value the Gulf carrier at up to $20 billion (£9.7 billion). Emirates, which are a state-owned carrier, would likely seek a primary listing of up to a quarter of its stock in Dubai. DP World (the company that bought P&O last year) and Emirates could then seek secondary listings in London to gain access to a larger international market.

Sheikh Ahmed, CEO of Emirates said: “I think more and more Dubai companies will see that this is important in the near future. The DP World IPO is a very positive thing. I think for sure Emirates will also, in the future, do something like that. Our vision is that Dubai’s GDP will grow from $38 billion to $108 billion by 2015. This is something that we ought to do but to do so we need to develop new businesses here, like our financial market.”

The airline will not use the money to buy European airlines, as some analysts have predicted. Sheikh Ahmed ruled out a bid for a rival such as British Airways, saying Emirates would focus on its own growth strategy.

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