Sell, sell, sell

Victoria
By Victoria March 12, 2012 15:12

Sell, sell, sell

The Airline Group, a group of UK airlines who together own 42% of NATS the UK air traffic control service, have hired Rothschild to protect their interests while the UK government sells off its 48.9% stake. In fact the Airline Group, along with the UK government, will each sell down to a 20% holding each leaving any new investor as the controlling stake holder. It is understood that Chinese investors are very keen on grabbing a controlling stake in NATS at this time.

Should the sale go ahead as planned the Airlines who form the Airlines Group (British Airways & BMI, Easyjet, Monarch Airlines, Thomas Cook, Thompson Airways & Virgin Atlantic), will all receive a windfall in this year’s accounts and so expected losses for the coming fiscal year could be less than many expect due to this one off gain.

BAA still owns 4% of NATS and it remains unclear if they will be willing to sell any of their shares.

Also in the news – again – Aer Lingus is said to be talking to JetBlue Airways about the purchase of the stake in the airline that the Irish government is due to offload soon. It is very hard to see what either JetBlue or Aer Lingus would gain from linking up. Aer Lingus is in no position to be a feeder of note to the New York market. Aer Lingus needs to look to the Japan Airlines template for a way forward and would be better off with a cash-rich investor intent on expanding the future prospects of the carrier.

Also in the news: GKN is finally making a move for Volvo Aero in a deal that could be worth up to £800m. Volvo’s aerospace business has been for sale now since September 2011. GKN is understood to be working on the deal with investment bank Gleacher Shacklock.

This news comes after MTU Aero backed out of negotiations for the purchase of Volvo Aero last month; it also comes on the back of news yesterday that GKN is selling off its wheels business which could see the UK firm raking in around £130m.

GKN is riding high on the wave of aircraft deliveries filtering through the global market and thus this is its chance to expand while its cash position is strong. If it does a deal with Volvo GKN will be in a market leading position across commercial aerospace components but its position in the military field will also be strengthened, this may draw attention from the European Commission. We shall see.

Also look to APAC airlines as Kingfisher’s fuel bill was called-in over the weekend forcing the grounding of a great many flights.

Victoria
By Victoria March 12, 2012 15:12
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