UPDATE: Spanair Talking To Star Alliance Partners On Investment
November 16 2010 - 1:49PM
Dow Jones News
Spanish airline Spanair said Tuesday that it is talking to some
of its partners in the Star Alliance about taking a stake in the
loss-making carrier.
Spanair, which is 28%-owned by the regional government of
Catalonia, is talking to Colombian airline Avianca, Germany's
Deutsche Lufthansa AG (LHA.XE) Singapore Airlines (C6L.SG) United
Continental Holdings Inc.'s (UAL) Continental Airlines, and Turkish
Airlines, said a spokesman for Spanair.
He said that Spanair is looking for a partner to help it to
improve its long-haul offering. It wants to expand to Latin America
next year, and to Asian destinations such as Shanghai and Delhi,
the spokesman said.
The talks come as some European low-cost airlines have been
questioning the legality of the aid that Spanair has received from
the Catalan government.
Earlier this month, Spanair said that it will receive a EUR20
million capital injection from a company controlled by the Catalan
government. That comes on top of a EUR10 million injection by
another government-controlled company in October.
The European Low Fares Airline Association said earlier this
week that it has asked the European Commission to investigate these
subsidies, saying it was "in blatant violation of European
competition legislation and state aid rules." Officials from
Spanair and the Catalan government had no comment on the
accusation.
Spanair was sold to a group of Catalan investors by Scandinavian
airline SAS AB (SAS.SK) last year for EUR1. SAS still owns 11.9% of
the company, while several Catalan business groups control the rest
together with the local government.
Spanair expects to report a loss of EUR10 million in the second
half this year, down from EUR60 million in the same period last
year. It doesn't expect to make a profit until 2012, the spokesman
said.
Spanair, based in Barcelona, flies to 18 destinations in Spain
and 59 outside the country.
-By Ana Garcia, EFE Dow Jones, 91 4518271,
ana.garcia@dowjones.com