Avolon issues jumbo bond; Interlining goes digital

Eleanor Steed
By Eleanor Steed September 14, 2017 09:38

Avolon issues jumbo bond; Interlining goes digital

Avolon has issued $950 million senior unsecured notes due 2023 via its subsidiary Park Aerospace Holdings (Park), priced at 4.500%, at par, and $300 million senior notes due 2021 priced at 3.625%, also issued at par. The notes have been rated Ba3 by Moody’s while Kroll Bond Rating Agency (KBRA) has assigned the bonds a senior unsecured rating of BBB with a Stable Outlook.

The notes will be fully and unconditionally guaranteed by Avolon and by certain of the aircraft-owning subsidiaries of Park Aerospace Holdings. The offering is expected to close on or about September 25, 2017.

Avolon intends to use the net proceeds from the offering for general corporate purposes, which may include the future repayment of outstanding indebtedness.

Standard & Poor’s has also upgraded Park’s rating on the senior unsecured notes due 2022 and 2024 from BB- to BB, with a stable outlook.

Yesterday, easyJet challenged the age-old concept of interline agreements with the launch of Worldwide by easyJet – a digital booking platform that allows low-cost easyJet passengers to connect to other long-haul airlines.

Legacy airlines have traditionally offered connectivity through interline and codeshare agreements and procedures, with Worldwide by easyJet these will be replicated by self-connect and sales partnerships through a digital, virtual hub which will offer the same sort of connectivity but more simply and efficiently.

Worldwide by easyJet customers can connect their easyJet flight with partner airline flights with launch partners WestJet and Norwegian using the GatwickConnects product.

easyJet says it will sign other airlines up to Worldwide by easyJet with talks already “far advanced with middle-eastern and far eastern carriers amongst others”. As well as adding partners at Gatwick Airport easyJet plans to expands to other key easyJet airports in Europe such as Milan Malpensa, Geneva, Amsterdam, Paris Charles De Gaulle and Barcelona.

easyJet is also starting to sell stand-alone tickets on behalf of partner airlines alongside the connectivity product on easyJet.com. Loganair is signed up as a further launch partner and its tickets will be available on easyJet.com from October. Loganair operates a complementary network to easyJet and will allow easyJet passengers to easily book onward flights – e.g. from Glasgow and Edinburgh with Loganair to Scotland’s Highlands and Islands, including the Glasgow – Barra link, the world’s only scheduled service to a beach airport. The appeal to the partner airlines is access to one of the biggest travel websites in Europe with around 360m visits in the past twelve months.

Worldwide by easyJet will also allow easyJet passengers to connect with other easyJet flights through Gatwick Airport. Currently around 200,000 “self-connect” on easyJet – booking separate easyJet flights and the GatwickConnects product themselves in three different transactions.

All of this new connectivity has been enabled by technology partner Dohop whose platform allows easyJet customers to book connections and forward flights on easyJet.com

Worldwide by easyJet won’t impact on easyJet’s punctuality, its asset utilisation or operating model. The airline will not hold flights for connecting passengers. Worldwide by easyJet is subject to a 2 hour 30 minute ‘Minimum Connection Time’, which will give customers plenty of time to transfer between flights and/or terminals. Should a passenger miss a connecting flight they will be transferred to the next available flight.

Carolyn McCall, easyJet’s CEO explained the strategy behind Worldwide by easyJet: “Around 70m passengers flying through an easyJet airport each year are connecting on to other flights, mainly long haul, and it is this market segment that Worldwide by easyJet will open up for us.

“Because of easyJet’s strong positions at Europe’s leading airports and our customer focus long haul carriers have been asking to work with easyJet for some time and the new technology platform has now allowed us to do so.

“Our own customers and those who fly with other airlines, short and long haul, have also asked us to make it easier to connect with easyJet flights and this simple booking platform makes it easy for them to do so.
“By opening this new market segment this now means that easyJet can access a greater range of passengers flying across Europe.”

Peter Duffy, Chief Commercial Office for easyJet, commented: “The way we have designed Worldwide by easyJet means that we can profitably access a major new pool of customers without undermining easyJet’s operating model and punctuality.

“We know there is a real customer demand for making flight connections on easyJet easier.  Almost 200k easyJet passengers a year already self-connect their easyJet flights through Gatwick Airport. That’s c.1% of our passengers at the airport and that doesn’t include those connecting between easyJet and long haul flights.

“We are delighted with the partners who have signed up for our launch today. We are confident it will be popular with customers and look forward to announcing more partners in the near future.

“Whilst Worldwide by easyJet is launching with our largest base London Gatwick we will broaden our focus to include our other biggest airports – such as Milan Malpensa, Geneva, Amsterdam, Paris Charles De Gaulle and Barcelona. Between them they have tens of millions of connecting passengers each year whose journeys start or end in Europe.

“Worldwide by easyJet will also allow airlines with complementary networks to easyJet to sell their seats to our customer base – accessing the 360m visitors to easyJet.com every year.”

Eleanor Steed
By Eleanor Steed September 14, 2017 09:38