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Wednesday, April 15th, 2020

Boeing sees further 75 cancellations for 737 MAX while production remains at standstill

Following on from the month of March where the world’s second-largest planemaker posted 150 MAX cancellations, which included 75 from Avolon, the Irish leasing company, April has now seen a further 75 cancellation. These include 34 of a 135-jet order from Brazil’s GOL.

This is now the thirteenth month since the 737MAX was grounded following two fatal crashes and it was back in January this year that production for the beleaguered jet was stopped, a difficult situation which has been compounded by the COVID-19 pandemic, and there is no current set date when FAA approval of modifications to the jet will be obtained.

The COVID-19 pandemic has also hit deliveries of Boeing’s larger jets, though the company confirmed the delivery of 50 planes in the first quarter, down from 149 in 2019. Orders for March include 12 787 Dreamliners, a 767 freighter and 18 pre-Max versions for the P-8 maritime patrol program, with additional orders in the quarter bringing the total number of orders up to 49 and a negative 147 orders for the three months.

According to Reuters news agency, after further accounting adjustments representing jets ordered in previous years but now unlikely to be delivered, Boeing’s adjusted net orders sank to a negative 307 airplanes.

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Qatar Airways and Standard Chartered sign aircraft financing agreement

Qatar Airways and Standard Chartered have successfully signed a US$850 million financing in respect of seven Boeing 787-9 aircraft.

Qatar Airways Group Chief Executive His Excellency Mr. Akbar Al Baker stated, ”I am grateful to Standard Chartered for their continued support to Qatar Airways.  The bank has been a close partner of Qatar Airways for many years and have proven their support for the airline by closing this transaction during difficult times resulting from COVID-19.  Qatar Airways focus remains on finding solutions to get as many people back to their homes to be with their families and loved ones during these difficult times and this is made possible by the support we have from so many people including our close partners such as Standard Chartered.”

Luxembourg Armed Forces A400M makes maiden flight

The Airbus A400M new-generation airlifter ordered by the Luxembourg Armed Forces has made its maiden flight, marking a key milestone towards its delivery. The aircraft, known as MSN104, took off from Seville (Spain), where the final assembly line is located, at 16:08 local time (CET) and landed back on site 5 hours later.

The Luxembourg aircraft will be operated by the armed forces of Belgium and Luxembourg within a binational unit based in Belgium. MSN104 is scheduled to be delivered in the second quarter of 2020.

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US-government supports airlines with billion-dollar aid program

Among the ten airlines that have agreed to the rescue package are the four largest U.S. carriers Delta, American, United and Southwest Airlines.

American Airlines Group has released that the U.S. Department of the Treasury has approved US$5.8 billion in financial assistance from the Payroll Support Program (PSP) created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Southwest Airlines has also reached an agreement in principle with the United States Department of Treasury and is expecting disbursements of more than US$3.2 billion under the government program, consisting of more than US$2.3 billion in direct payroll support and a nearly US$1 billion unsecured term loan (loan).

Delta Air Lines has reached an agreement for US$5.4 billion in emergency relief. The agreement with Treasury includes US$5.4 billion from the payroll support program. The payment includes an unsecured 10-year low-interest loan of US$1.6 billion, and Delta will provide the government with warrants to acquire about 1 percent of Delta stock at US$24.39 per share over five years.

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MTU Aero Engines plans gradual restart of operations

Following the current three-week suspension of operations, MTU Aero Engines is planning a gradual restart of operations at its German sites. Capacities will be increased according to demand and the
situation in the supply chain. Extensive measures have been prepared to protect employees’ health.

Short-time working will apply from April 20, 2020, at the company’s largest facility in Munich. This will be successively adjusted according to capacity requirements. In the first few weeks, a gradual increase in the presence of employees from both industrial and administrative areas is planned. In the week from April 20, around 20% of employees will already be working. In the following weeks, the volume of work will further increase gradually.

The restart at MTU Maintenance’s facilities in Hannover and Berlin will commence on April 27. Some of the international maintenance locations are already operating at a high level, while others are adjusting very flexibly to suit customer needs and demand. Capacity adjustment measures, which may include short-time working, are still being determined.

Employees in short-time working will receive their salary from MTU proportionate to the number of hours worked, the short-time working allowance financed by the German Federal Employment Agency and a subsidy from the company. The Executive Board and senior management have waived income and set up a solidarity fund of more than four million euros for cases of particular hardship during short-time working.

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Finnair to deepen cooperation with Juneyao Airlines

Finnair and Shanghai-based Juneyao Airlines have signed a Letter of Intent to deepen their cooperation between China and Europe subject to required regulatory approvals. 

The aim is to establish a joint venture on the Helsinki – Shanghai route enabling Finnair and Juneyao Air to offer their corporate and leisure customers a seamless travel experience through a wider choice of destination, schedule and fare options via their main hubs, Helsinki Airport (HEL) and Pudong International Airport (PVG).

“Despite these immensely challenging times for our industry, we at Finnair remain steadfast in our belief and commitment to China as a key market and to Juneyao Air as a key partner. Over the last year we have built up a close and mutually beneficial partnership with Juneyao Air. Taking the important step to evolve this into a deeper cooperation focused on our Shanghai and Helsinki hubs will allow us to not only serve our current customers even better, but also to lay a platform for further growth in the future, once the aviation market starts to normalise”, says Ole Orver, Chief Commercial Officer at Finnair.

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Triumph furloughs 2,300 employees across U.S. and Europe

Given that Boeing has extended closure of its Washington state factories indefinitely, and closed its Charleston, South Carolina plant until further notice, Triumph has announced furloughs for approximately 2,300 employees across its plants in the U.S. and Europe for two to four weeks to reduce capacity associated with Boeing Commercial Aircraft programs. These plants will remain operational and continue to support other customer demands. Triumph will provide one week of company pay and will cover the employee share of medical premiums during the furlough period. 

In addition to the previously announced 500-person reduction in force as part of its austerity measures, Triumph will eliminate approximately 200 full-time positions due to decreased demand. Triumph will pay severance to impacted employees consistent with existing policies. These reductions are expected to be completed by May 1, 2020.

To reduce working capital requirements, the company will also adjust its supply chain demand consistent with updated OEM production and aftermarket forecasts.

Triumph's prior restructuring and austerity actions, and those listed above, preserve Triumph's liquidity while customer plants are closed, allowing Triumph to continue to support its customers' forecasted rates of production. Further workforce adjustments may be required based on site closures or changes in demand for Triumph's products and services. As previously reported, Triumph has adequate liquidity to support its operational requirements.

Although the situation remains fluid, all but two of Triumph's factories are operational. The company's two facilities in Mexico (Zacatecas and Mexicali), which employ approximately 1,900 individuals, are complying with a government mandate for 30-day closure of non-essential operations effective March 31, 2020. Triumph will adjust its plans as government decisions and Company policies evolve.

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Boeing’s F-15 Qatar advanced jet completes successful first flight

Boeing successfully completed the first flight of the F-15QA fighter. Developed for the Qatar Emiri Air Force (QEAF), the jet demonstrated its next-generation capabilities during its 90-minute mission. The flight took off and landed from Lambert International Airport in St. Louis.

Boeing’s flight test team implemented a precise mission checklist to test the multi-role aircraft’s capabilities. The aircraft demonstrated its maneuverability during its vertical “Viking” takeoff and by pulling nine Gs, or nine times the force of earth’s gravity, in its subsequent maneuvering in the test airspace. Checks of systems such as avionics and radar were also successful. A test teammonitoring the data in real time confirmed the aircraft performed as planned.

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C&L Aviation Services names Brian Sprecher as Regional Sales Manager – Corporate MRO

As part of the company’s increased customer demand and continued expansion, C&L Aviation Services, a C&L Aviation Group company, announced that Brian Sprecher has joined the company in the position of Regional Sales Manager for the Corporate MRO, for the Southeast United States.

Sprecher will assist C&L’s corporate aviation customers with maintenance packages, including modifications, avionics upgrades, interior and paint services. Sprecher’s experience includes two decades in the corporate aviation industry. Prior to C&L, Sprecher served as Regional Sales Manager for the Southeast United States for Constant Aviation. He will be based out of Winston-Salem, NC.

C&L has been growing in the corporate aircraft MRO market for several years with a focus on Embraer, Challenger, Hawker, Citation, and Beechjet aircraft.

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Tamar