Thursday, November 10, 2011

AviTrader Daily Aviation News Alert

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Future of Bombardier CSeries uncertain after talks with Airbus fail

October 7, 2015 · 191 Views

Already years overdue and billions of dollars over Budget, Bombardier are faced with an uncertain future over its CSeries. For some time Bombardier had been wanting to break into the narrow-body 110 – 130 seat sector of the market that was being monopolized by Airbus, Boeing, Comac and Embraer. In July 2004 it announced plans to concentrate on the C110 and C130 models, having decided to abandon the previous plans for the BRJX wider body jet. At the time it was estimated that the CSeries aircraft would be operational by 2013. It is understood that at the time it had been estimated that there was a market valued at US$250bn over 20 years for the 110-130 seat aircraft and with its anticipated 20% saving on running costs compared to its competitors, Bombardier believed they could attract up to 50% of that market. More recently the CSeries has been dogged with problems. While in 2005 substantial funding towards the US$3.5bn project was obtained from both the Canadian and UK governments, the project was shelved in January 2006 for a year owing to a lack of advanced orders. No mention of any potential delays had been mentioned, even in March 2012 when an announcement was made that the first flight would take place in December that year, and deliver would commence in 2013. The first delay of six months was announced in November 2012 owing to supplier problems; this was then followed by delays with the system integration process, resulting in the maiden flight taking place in September 2013. January 2014 saw delays in obtaining flight certification push entry-into-service dates well into 2015, while an uncontained engine failure on May that year saw testing suspended and the manufacturer miss out on the extremely important Farnborough Airshow. A slashing of the workforce and resumption of testing in August 2014 led to a statement in March 2015 that Bombardier expected to obtain certification in this year with entry into service next year.
Continual delays saw a cancellation of orders, and the program run considerably over budget, to the point where having completed approximately 80% of the project, and certainly the most costly part with exceptional one-off costs completed, the company is now struggling financially. A lack of orders sees Bombardier without the financial cushion it currently requires, which is why it made an approach to Airbus to offer a controlling stake in the CSeries in order to see the project completed and aircraft finally delivered. The offer itself required very little financial input from Airbus, which raised some eyebrows as that clearly indicated that Bombardier’s problems extended beyond cashflow. As at June 30, Bombardier had US$9bn in long-term debt and US$3.1bn in cash on hand, after getting through US$808m in free cash flow in the quarter. It was hoped that with their involvement, Airbus would be able to increase orders for the aircraft through its own highly successful sales team. Bombardier’s current situation is such that it has 243 orders compared to approximately 7,000 between Airbus and Boeing for similar sized aircraft. In addition to this it was anticipated that a number of costs involved in bringing the CSeries into operation could be substantially reduced through combined supply chain management and procurement.
However despite comprehensive negotiations, today it was announced that Airbus would not consider investing in Bombardier. It was believed that part of their reason for investing in the company would be from a strategically defensive angle in blocking any access from China to a virtually ready aircraft, however it was felt they would only do so if the stake could be acquired at a rock-bottom price. Clearly while the Canadian Government has always been committed to supporting Bombardier, it is likely now that overseas investment may well be targeted, while the company also seeks investment in other arms of the business, including rail and business jet units.

ATSG’S adjusted pre-tax earnings up 34%

November 8, 2011 · 41 Views

Air Transport Services Group reported sharply improved third quarter financial results after excluding non-cash impairment charges. Pre-tax losses from continuing operations were $6.7m while net losses from continuing operations totaled $4.8m. Third-quarter 2011 earnings included $27.1m in impairment charges related to reductions in business with DB Schenker that began in September, and $1.9m in unrealized losses on derivative instruments related to the company’s new credit facilities adopted in May. Excluding impairment and derivative charges, pre-tax and net earnings from continuing operations increased by 34% and 22%, respectively, versus the third quarter 2010 results. Adjusted pre-tax earnings were $22.4m excluding the impairment and derivative charges, up from $16.7m in the third quarter of 2010, principally because of increased earnings from ATSG’s freighter leasing business. Net earnings from continuing operations excluding those charges and their related tax effects were $13.9m, up from $11.4m in the third quarter of 2010. Net interest expense under the new credit agreement reached in May 2011 decreased $1.3m for the third quarter compared to a year ago. Pre-tax losses for the quarter generated an income tax benefit of $1.8m. Third-quarter EBITDA, adjusted for non-cash impairment and derivative losses, totaled $48.3m, up 10% from $44.0m in the third quarter of 2010. Revenues increased 17% to $195.5m, including customer-reimbursed costs, with increases evident from each of the company’s reported segments and other business units. Excluding reimbursements, ATSG’s revenues increased 19% to $151.4m.

Comlux Aviation Services appoints Tony Bailey as CEO

November 8, 2011 · 44 Views

Comlux Aviation Services,based in Indianapolis, the exclusive jet maintenance center of Comlux, The Aviation Group reported the appointment of Tony Bailey to the Chief Executive Officer position by the Comlux Aviation Services Board of Directors.

Lao Airlines takes delivery of first CFM56-5B-powered Airbus A320 aircraft

November 8, 2011 · 96 Views

Lao Airlines, the national carrier of the Lao People’s Democratic Republic, launched a new era in its history by taking delivery of the first of two new CFM56-5B-powered Airbus A320 aircraft.   The airline plans to use the new aircraft primarily on international services to Singapore, Bangkok, Hanoi, and Hong Kong.

CTS Engines announces $25m capital expansion program

November 8, 2011 · 41 Views

CTS Engines, a leading, independent jet engine Maintenance, Repair, and Overhaul (“MRO”) facility, announced the implementation of a $25m capital expansion program.  The investment, which will be provided by parent company Neff Capital Management LLC, is expected to greatly increase both the size and scope of the company’s on-site MRO capabilities over the coming year. 

The capital expansion program includes the opening of a second, 60,000 square foot facility co-located in Ft. Lauderdale, the acquisition of additional tooling and machinery, including a high-speed blade tip grinder and a vertical machine center, and the building of two high thrust engine test cells in Palm Beach County, Florida.  Additional capital has been allocated for the purchase of dedicated spares to support the company’s base MRO business.

Bombardier Customer Services’ Belfast and Dallas MRO facilities deliver on quality

November 8, 2011

Bombardier Customer Services’ maintenance, repair and overhaul (MRO) facilities in Belfast and Dallas have been accredited with the internationally recognised quality standard AS9110 Revision A. Achieving the standard, which defines the quality system requirements at all levels of the MRO process, is an endorsement of Bombardier’s adherence to best practice in the aerospace maintenance industry. The standard’s rigorous assessment process has resulted in improved performance at its Belfast and Dallas MRO sites, across quality and operating efficiencies.

For MRO providers, Revision A raises the bar from the original AS9110 standard. The latest revision is process driven and focuses on risk assessment and mitigation, key priorities for the maintenance sector. Registrants must complete a two-stage audit process and both Bombardier’s Belfast and Dallas MRO facilities have successfully completed the first stage audits with zero non-compliance issues.

Finnair’s load factor down to 63% in October

November 8, 2011 · 45 Views

Finnair traffic rose by approximately 9.1% October 2011, as the overall capacity grew by 14.8% compared with October 2010. The load factor was down 4.1 pts to 63.4% compared to the same period in 2010. Asian capacity grew by 26.9% and traffic increased by 14.1%.

Republic Airways confirms order for 80 Airbus A320neo Family aircraft

November 8, 2011 · 82 Views

Republic Airways Holdings has confirmed its order with Airbus to purchase 60 A320neo (New Engine Option) and 20 A319neo aircraft. Republic had signed a letter of intent for the purchase in mid-June. The aircraft, which will be powered by CFM’s LEAP-X engines, will be flown by Republic’s Frontier Airlines subsidiary. Frontier currently operates 59 Airbus A318, A319 and A320 aircraft.

Spain extends Airbus Military maintenance contract for C212 fleet

November 8, 2011 · 45 Views

The Spanish Ministry of Environment, Rural Affairs and Fisheries has extended its existing contract with Airbus Military for the maintenance of three C212 aircraft for two more years. These C212 aircraft are used by the Fisheries Inspections Department for the surveillance of Spanish territorial waters. The original contract was signed in 2000 and has already been extended on three previous occasions. The agreement covers the full and complete maintenance of these three aircraft and includes services such as repairs, parts provision, and scheduled and non-scheduled maintenance checks during the two year contract.

Copa Holdings releases monthly traffic statistics for October 2011

November 8, 2011 · 41 Views

For the month of October 2011, Copa Holdings’ system-wide passenger traffic increased 14.7%, while capacity increased 20.8%.  System load factor for October 2011 was 74.0%, a 3.9 pt decline when compared to October 2010.

Republic Airways Holdings post 3rd quarter results

November 8, 2011 · 42 Views

The Company reported operating revenues of $767.9m for the quarter ended September 2011, an increase of 7.9% compared to the same period last year. The increase in revenues is primarily due to a 10.0% increase in Frontier Airlines’ unit revenues. On a GAAP basis, the Company reported net income of $9.0m for the quarter ended September 2011, compared to net income of $21.2m for the same period last year. On an ex-item basis, the Company is reporting net income of $20.4m compared to an ex-item net income of $25.9m for the three month periods ended September 2011 and 2010, respectively.

SAS Group reports traffic increase for October

November 8, 2011 · 41 Views

SAS Group’s traffic increased by 2.6% during October and capacity increased 3.3% compared to the same period last year. The passenger load factor decreased by 0.5 pts in October to 75%. SAS Group carried 2.6 million passengers in October, up 3.9%.

Aircastle reports 3rd quarter net income of $22.7m

November 8, 2011 · 45 Views

For the third quarter of 2011 Aircastle reported lease rental revenue of $145.9m and EBITD of $137.6m, net income of $22.7m and adjusted net income of $15.4m. The company reported adjusted net income plus depreciation and amortization of $80.2m. During the quarter Aircastle purchased four aircraft for a total acquisition cost of approximately $210m, including two new Airbus A330s from their order stream, sold two aircraft for a total pre-tax gain of $9.0m and entered into new five-year forward starting interest rate swap arrangement for Securitization No. 2 at an average fixed rate of 1.27% effective June 2012.

During the third quarter Aircastle repurchased an additional 2.6m shares of common stock at an average price of $11.37 per share for total cost of $30m, bringing the total number of common shares repurchased to 7.6m shares for a total cost of $90m during 2011.

Vueling reports traffic increase of 6% for October

November 9, 2011 · 31 Views

Vueling reported traffic increase of 5.9% for October 2011, while capacity increased 3.5% year over year. The company has reached a load factor of 76.8%, 1.8 points higher than last year.

Caribbean Airlines takes delivery of first ATR 72-600

November 9, 2011 · 65 Views

Caribbean Airlines took delivery in Toulouse of its first ATR 72-600 aircraft. The Port-of-Spain-based carrier, which becomes one of the very first operators of the new ‘ATR -600 series’, booked earlier this year a US$ 200 million-valued contract for the purchase of a total of 9 of these aircraft. The aircraft are configured with 68 seats and equipped with the new ATR -600s standards of comfort, including In-Flight Entertainment. With this new ATR 72-600 delivery, Caribbean Airlines will start replacing its fleet of five 50-seat Q-300s and introducing newest and most technologically advanced turboprops into its domestic routes. The airline will also add passenger capacity and develop new routes and frequencies within Trinidad and Tobago. Caribbean Airlines will also operate some of its new ATR 72-600s in the domestic route network of Air Jamaica, which was recently acquired by Trinidad and Tobago’s flag carrier.

Aeroflot integrates third Sukhoi Superjet 100 aircraft

November 9, 2011 · 34 Views

Aeroflot Russian Airlines integrated its third Sukhoi Superjet 100 aircraft (SSJ100). The aircraft performed its first scheduled flight SU713/714 on route Moscow  – Nizhny Novgorod – Moscow. The Sukhoi Superjet 100 MSN 95011 was delivered to Aeroflot under contract with VEB-Leasing JSC on financial lease. The delivered aircraft is designed to carry 87 passengers in a comfortable two-class layout (12 – business class and 75 – in economy class). Aeroflot ordered 30 SSJ100 aircraft in total.

Bombardier extends inlet cowl repair capability to Hong Kong

November 9, 2011 · 35 Views

Bombardier Customer Services has extended its repair capability on the inlet cowl for the Trent 700 engine to Hong Kong. Through a strategic service agreement with Hong Kong Aircraft Engineering Company Limited (HAECO), Bombardier is now offering repair capability on the Trent 700 inlet cowl in Hong Kong, in addition to its Belfast and Dallas MRO facilities. As original equipment manufacturer (OEM) of the Trent 700 inlet cowl, Bombardier has been providing a full range of maintenance support for more than 15 years in Belfast, and recently in Dallas. This Bombardier service is now available to be performed at HAECO’s component and avionics overhaul centre in Tseung Kwan O,50 km east of Hong Kong International Airport.

HAECO signs ITM service contract with Cathay Pacific for Boeing 747-8 Freighters

November 9, 2011 · 37 Views

Hong Kong Aircraft Engineering Company (“HAECO”) has entered into an ITM contract with Cathay Pacific Airways to provide Inventory Technical Management (ITM) services for the airline’s fleet of 10 new Boeing 747-8 freighters, to be delivered between 2011 and 2012. The ITM service includes inventory management, reliability management, supply chain management, technical services, and comprehensive 24/7 Aircraft-on-Ground (AOG) support, covering Boeing 747-8F peculiar components for Cathay Pacific’s Hong Kong base and its line station network.

Skyworld Aviation places ERJ 145 with Aerodynamics

November 9, 2011 · 30 Views

Skyworld Aviation announced that Aerodynamics (ADI) of Michigan has taken delivery of an Embraer ERJ 145 aircraft which has been placed on lease. The aircraft recently completed a long term lease with Republic Airways Holdings of the U.S., and was delivered directly to ADI on behalf of Cymus Holdings of Sweden. Serial number 145169 was originally delivered new to Skyways Sweden in 1999, and then placed on a seven year lease with Republic in 2004. The aircraft started it’s lease term with it’s new operator this week and has been re-registered as N359AD.

AeroCentury reports third quarter 2011 results

November 9, 2011 · 27 Views

For the third quarter ended September 30, 2011, AeroCentury reported total revenues of $6.2m  compared with total revenues of $6.90m for the same period a year ago.  For the nine months ended September 30, 2011, the Company reported total revenues of $17.9m compared with revenues of $24.8m for the same period a year ago. The Company reported a net loss of $243,000 for the third quarter of 2011, compared to net income of $241,000 for the third quarter of 2010 and a net loss of $2.7m for the nine months ended September 30, 2011, compared to net income of $2.7m for the same period of 2010.

ILFC secures sale-leaseback deal with American Airlines

November 9, 2011 · 28 Views

International Lease Finance Corporation has completed an agreement with American Airlines to purchase and leaseback 15 Boeing 737-800 Next Generation aircraft. The agreement covers certain aircraft that American had previously ordered and that have been delivered or are scheduled for delivery during 2012.

Copa Holdings reports net income of US$70.3m

November 9, 2011 · 32 Views

Copa Holdings reported net income of US$70.3m for 3Q11, excluding special items, Copa Holdings would have reported an adjusted net income of $90.1m, a 44.3% increase over adjusted net income of US$62.5m. Operating income for 3Q11 came in at US$102.2m, a 38.2% increase over operating income of US$73.9m in 3Q10. Operating margin for the period came in at 21.4%, compared to 20.4% in 3Q10, despite a 37.9% increase in the effective price of jet fuel.  Total revenues increased 31.3% to US$476.8m, outpacing a strong capacity expansion.

Willis Lease Finance reports nine month net income up 50%

November 9, 2011 · 27 Views

Willis Lease Finance Corporation , a leading lessor of commercial jet engines, reported third quarter pretax profits grew 19% compared to the year ago period. Net income was $2.3m in the third quarter of 2011, compared to $3.1m in the third quarter a year ago. The current quarter’s net income was reduced by $1.3m due to the inclusion of a tax adjustment related to the accounting for the sale of engines to the recently formed JV with Mitsui. After payment of preferred dividends, net income available to common shareholders was $1.5m compared to $2.3m a year ago.

For the first nine months of 2011, net income grew 35% to $10.9m from $8.0m in the first nine months a year ago. Net income attributable to common shareholders increased 50% to $8.5m from $5.7m in the first nine months of 2010.

ST Aerospace receives CAAS and EASA Part 147 Maintenance Training Organisation approvals

November 9, 2011 · 30 Views

ST Aerospace has been certified as a Part 147 Maintenance Training Organisation (MTO) by the Civil Aviation Authority of Singapore (CAAS) and European Aviation Safety Agency (EASA) to provide aircraft type training for narrow-body and wide-body aircraft.  The training courses will be conducted at ST Aerospace’s dedicated technical training centre in Paya Lebar, Singapore.

TIMCO formally opens new interiors manufacturing facility in North Carolina

November 9, 2011 · 32 Views

TIMCO Aerosystems, a unit of TIMCO Aviation Services, formally opened its new 120,000 square foot aircraft interiors manufacturing facility in Wallburg (Davidson County), North Carolina, near its Greensboro headquarters. The facility adds new capacity to TIMCO’s existing seat manufacturing operations in Pacoima, California, including assembly of its popular FeatherWeight series of seats which save airlines fuel and maintenance cost through lighter weight and fewer parts.

Boeing receives $1.7bn for 7 more US Navy P-8A Poseidon aircraft

November 9, 2011 · 32 Views

Boeing received a $1.7bn low-rate initial production (LRIP) award from the U.S. Navy for seven additional P-8A Poseidon maritime surveillance aircraft. LRIP-II is the follow-on to an initial LRIP-I contract awarded in January to provide six Poseidon aircraft. Overall, the Navy plans to purchase 117 Boeing 737-based P-8A anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft to replace its P-3 fleet.

As part of the contract, Boeing will provide aircrew and maintenance training for the Navy beginning in 2012, in addition to logistics support, spares, support equipment and tools. The training system will include a full-motion, full-visual Operational Flight Trainer that simulates the flight crew stations, and a Weapons Tactics Trainer for the mission crew stations.