Lufthansa threatens to move MUC traffic to Brussels, Vienna, Zurich

Korea's Asiana loses appeal against ₩8.1bn conspiracy fine

Asiana Airlines (OZ, Seoul Incheon) has lost a legal battle to avoid a KRW8.1 billion won (USD6.13 million) fine over a 2016 catering contract signed with Gate Gourmet Korea (GGK). The transaction saw GGK pick up exclusive catering rights at Asiana Airlines in exchange for acquiring KRW160 billion (USD121.1 million) worth of warrants in another subsidiary of Asiana's parent company, Kumho Asiana Group (Kumho).

In 2015, a Kumho acquisition vehicle required capital to fund its planned acquisition activities. Kumho issued a 30-year inflight catering contract in exchange for the successful bidder agreeing to put equity into their acquisition company by purchasing warrants. The successful bidder was GGK, a joint venture between the Switzerland-based Gate Group (operators of the Gate Gourmet brand), HNA Group, and Asiana Airlines. GGK proceeded to purchase the warrants bearing a 0% interest rate.

The long-time caterers, LSG Sky Chefs (a subsidiary of Lufthansa (LH, Frankfurt International)), generated most of its revenue from providing Asiana Airlines, plating up 30,000 plus meals per day, but declined to participate in the...

Cathay Pacific eyes B777-8F order - reports

Cathay Pacific (CX, Hong Kong International) has reportedly decided to order the B777-8F over the A350F, according to Reuters. The airline intends to take six of the type to begin replacing its B747-400(F) fleet.

The report cites "industry sources" and says the carrier is close to placing the order. Since launching the freighter variant in early 2022, Boeing has booked orders from multiple airlines, including Lufthansa, Silk Way Airlines, Cargolux, and Qatar Airways.

Boeing says it is on track to start deliveries of the B777-8F in 2027 while the delivery date for the first A350F has slipped from 2025 to 2026. Cathay Pacific's cargo division operates a total of twenty B747Fs, including six B747-400ERFs and fourteen B747-8Fs.

During an analyst's briefing late last year, then Cathay Pacific Chief Commercial Officer Ronald Lam indicated that the airline was beginning to look at ordering new freighters. However, he said any decision to do so would be made in a "measured and responsible way."

EU court annuls Italian state aid approval

Ryanair (FR, Dublin International) has welcomed a ruling at the General Court, Europe’s second-highest court, on state aid favouring Italian airlines during the Covid-19 pandemic. The court backed the low-cost carrier’s challenge and annulled the European Commission-approved aid.

In October 2020, the EU competition authority allowed Italy to give EUR130 million euros (USD140 million) in subsidies to airlines holding an Italian operating licence. As ch-aviation reported at the time, while the country’s then-flag carrier Alitalia had received EUR199.45 million (USD213.6 million) in Brussels-backed state support in September 2020, three other local carriers, Air Dolomiti, Blue Panorama Airlines, and Neos Air, appealed to the Italian government “to act as quickly as possible” to release the newly-approved EUR130 million.

However, in its May 24 ruling the Luxembourg-based court said that the authority had “failed to provide a statement of reasons for its finding that the measure at issue was not contrary to EU law provisions other than those governing state aid.”

The court explained that “according to settled case-law, a decision not...

Lufthansa to buy 41% of Italy’s ITA for €325mn

Lufthansa (LH, Frankfurt International) and Italy’s Ministry of Economy and Finance have struck a deal on the future of ITA Airways (AZ, Rome Fiumicino) following weeks of negotiations that began in January but were extended beyond their initial deadline of April 24. The German flag carrier announced on the evening of May 25 that it will initially buy a 41% stake in its state-owned Italian counterpart.

It will pay EUR325 million euros (USD349 million) for the minority stake through a capital increase, which is more than the amount sources close to the talks had previously reported. Lufthansa at first proposed, unnamed Italian government sources told the newspaper Corriere della Sera earlier this week, an investment of EUR250 million (USD268 million), but the figure rose during the extended negotiations.

As part of the new agreement, the ministry has also itself committed to a capital increase of EUR250 million (USD268 million) into ITA.

In addition, the German and Italian sides “agreed on options to enable a potential acquisition of the remaining shares by...