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T, March 6th, 2020

U.K.’s Flybe goes into liquidation six months after Thomas Cook collapses

Only six months after the collapse of Thomas Cook which left over 150,000 passengers stranded across the globe, the U.K.s Flybe has now gone into liquidation, despite promises six weeks ago from the government to bail out the ailing domestic carrier.

Flybe, which employed over 2,000 staff, announced that all further flights had been grounded as of today (Wednesday March 5). Flybe had been operating at an annual loss of £20 million (US$26 million) per annum when the domestic carrier, which was responsible for approximately 40% of all domestic U.K. flights, was taken over by Connect Airways, a consortium comprising Virgin Atlantic, Stobart Aviation and Cyrus Capital Partners some nine months ago.

At the beginning of January, the government was approached to aid the loss-making carrier in the form of deferring an overdue tax payment, providing a potential loan and a review of air connectivity along with air passenger duty (APD) charges. The principal bone of contention was that APD charges were levied on all passengers departing a U.K. airport but, as Flybe’s flights were domestic, the APD charge was doubled for them on either leg of a return flight.

The carrier was also struggling with increased fuel costs and disruption to flight demand caused by uncertainty through Brexit. However, the ‘final straw’ came with the outbreak of COVID-19 and the consequent reduction in passenger numbers. Unite’s national officer for aviation, Oliver Richardson, said: “The UK economy is highly dependent on a viable and supported regional airline and airport network. For central government not to support and nurture this, especially as we deal with the twin uncertainties of the Covid-19 virus and the changes that will come with Brexit, is unhelpful and irresponsible.”

Shadow Transport Secretary Andy McDonald said the loss of Flybe would create “real anxiety” across the U.K. The British Airline Pilots’ Association, BALPA, hit out at the government and Connect for the collapse. The trade union’s general secretary, Brian Strutton, commented: “Six weeks ago, when the ownership consortium lost confidence, the government promised a rescue package, apparently at that time recognizing the value of Flybe to the regional economy of the U.K. Throughout, pilots, cabin crew and ground staff have done their jobs brilliantly, while behind the scenes the owners and, sadly, government connived to walk away. Flybe staff will feel disgusted at this betrayal and these broken promises.”

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CALC to invest in TransNusa Aviation

CALC (the Group), a full value chain aircraft solutions provider for the global aviation industry, announced that it would be investing in an Indonesian airline operating company, PT TransNusa Aviation Mandiri (TAM), through a subscription agreement with Aviation Synergy, under which the Company agreed to indirectly invest and acquire a 35.68% equity interest in TAM for a total cash consideration of US$28 million (equivalent to approximately HK$ 218.4 million) at completion.

This is a significant move for CALC to expand its downstream footprint to cover the entire aviation value chain, aligning the Group’s business strategy in combining vertical integration and horizontal expansion.

Norwegian reports higher unit revenue in February

Norwegian’s traffic figures for February show that the company continues to deliver on its strategy of moving from growth to profitability, with significant improvements in unit revenue and a better punctuality. Due to the COVID-19 virus Norwegian currently experiences reduced demand on some routes and have decided to cancel 22 flights between Europe and the U.S.
Norwegian carried 1,955,585 customers in February. Traffic for the month was down 21%, while capacity was down 22% compared to February 2019. The punctuality for February was 84.2% and the load factor was 81.7%, up 0.2 points compared to the previous year.

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Finnair and Neste partner to reduce CO2 footprint

Finnair, the airline specialized in connecting Europe and Asia, and Neste, one of the largest producer of sustainable aviation fuel from renewable waste and residues, have signed a new agreement which will gradually and considerably increase Finnair’s use of sustainable aviation fuel in its operations.

The new partnership will be a key contributing factor in Finnair’s long-term target of carbon neutrality. Sustainable aviation fuels are a key part of the long-term solution for reducing the CO2 footprint of aviation, as they reduce the CO2 emissions by up to 80% compared to fossil fuels.

The partnership will not only increase Finnair’s use of sustainable aviation fuel, but it will also
boost the production of sustainable aviation fuel in Finland. Growing availability is also important in order to make sustainable aviation fuel more widely used and affordable for Finnair’s future flight operations.

Air India Engineering Services to perform Pratt & Whitney GTF™ maintenance

Air India Engineering Services (AIESL) will provide maintenance, repair, and overhaul (MRO) services in support of Pratt & Whitney’s GTF™ engines and customers in India. AIESL will service PW1100G-JM engines at its facility in Mumbai.

AIESL’s introduction to GTF maintenance will be a phased approach, starting with engine upgrade and module exchange capabilities as immediate support of the GTF fleet in India. The facility has already received its first GTF engine.

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Allegiant to establish new aircraft base in Concord, North Carolina

Allegiant Travel Company has announced plans to establish a base of operations at Concord-Padgett Regional Airport (USA). The Las Vegas-based company will invest US$50 million to establish the new base in Concord, creating at least 66 high-wage jobs and housing two Airbus aircraft.

The company, which focuses on linking travelers in small-to-medium cities to world-class leisure destinations, plans to begin its base operations in Concord on October 7, 2020. Concord-Padgett Regional Airport will become the airline's 21st aircraft base.

Vytis Zalimas assigned as new CEO of Jet Maintenance Solutions

Jet Maintenance Solutions (JET MS), a global provider of integrated aircraft maintenance, repair and overhaul solutions for business and regional aviation, has appointed Vytis Zalimas as the new Chief Executive Officer (CEO) of JET MS effective March 9, 2020.

Zalimas has been leading and transforming different sales and customer care teams for more than 12 years at ICT, Banking and Aviation industries. For the past five years, he held the position of Head of Corporate Customers at Telia Company and Head of Contact Center at a major banking institution in the Baltic Countries.

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Lufthansa Group cancels all flights to Israel

The extended refusal of entry of the Israeli authorities, which apply from March 6, among others also for travelers from Germany, Switzerland and Austria, will lead to a considerable drop in demand for flights to Israel. As a result, Lufthansa, SWISS and Austrian Airlines will cancel all their flights to Tel Aviv and Eilat as of Sunday March 8, 2020 for the remaining winter timetable period until March 28. The Lufthansa Group sees itself forced to make this cancellation for economic and operational reasons, as many passengers are no longer entitled to enter the country.

So far Lufthansa has canceled 7,100 European flights in March. Due to the exceptional circumstances caused by the spread of the coronavirus and the decline in demand, the Lufthansa Group has decided to reduce capacity by up to 25%. The route cancellations and frequency adjustments correspond to a calculated capacity of 150 aircraft, of which 125 are short- and medium-haul and are 25 long haul. The Lufthansa Group fleet currently comprises around 770 aircraft, including some 180 long-haul aircraft.

In addition, the Lufthansa Group has announced further cost-cutting measures in the areas of personnel, materials and project budgets.

STARLUX Airlines selects Sabre to drive growth plans

Sabre Corporation has signed a new partnership with Taiwan’s newest carrier, STARLUX Airlines. The long-term agreement to connect to Sabre’s GDS platform, will provide the airline access to Sabre’s rich global travel marketplace, comprising over 425,000 travel agents worldwide; supporting the carrier as it aims to become a leading luxury, full-service boutique carrier within the Asia Pacific region and beyond.

With its inaugural flights to Penang (Malaysia), Da Nang (Vietnam), and Macau (China), having taken off in January, STARLUX Airlines aims to grow its passengers amid extensive plans to grow its fleet and unveil new destinations throughout Asia and North America over the coming years. In addition to providing the carrier with the ability to market and feature its content to Sabre’s extensive global network of travel agents, the agreement will also give STARLUX the capacity to leverage a wide range of services under the Sabre GDS to promote, personalize and sell its products to travel management companies, corporate travel departments and travel agents around the world.

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UPCOMING EVENTS

Operating Lease & Aviation Finance Seminar 2020
March 24 - 26, 2020 - London, UK

Technical Aspects of a Leased Asset 2020
April 21, 2020 - Amsterdam, Netherlands

Maintenance Reserves Seminar 2020
April 22, 2020 - Amsterdam, Netherlands

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