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Friday, May 1st, 2020

€7 billion bailout package for Air France comes with major environmental caveat

French finance minister Bruno Le Maire has announced that the €7 billion (US$7.7 billion) package of state and bank loans being offered to the ailing French-flag-carrying Air France will come with significant “green strings” attached to it.

The principal demand is that in return for financial support, Air France sets itself a target of becoming the world’s most environmentally friendly carrier. In addition to the €7 billion aid from the French, the Dutch will be providing €3 billion (US$3.3 billion) to KLM, it’s partner airline. Specifically, Le Maire made it clear that by 2030, Air France would have to halve carbon emissions per passenger and per kilometer against 2005 levels. Overall emissions from domestic flights would also have to be halved by 2024, which would basically necessitate a substantial reduction in the number of short-haul flights the French carrier would operate. In addition, by 2025, the airline would have to set a target to source two per cent of its aviation fuel from sustainable sources.

"Lastly, investments will have to be directed in the coming years to renewing the fleet of long and medium-range planes to more effectively fight emissions," Le Maire said, as reported by Reuters news agency. In this week’s Petersberg Dialogue climate conference, many ministers stressed the importance of climate action plans being included in airline bailout packages. Last week, in a letter from a number of MEPs, it was argued that state aid approval should only be granted to support packages that ensure airlines present credible emissions’ reduction plans, commit to pay tax on fuel, and curb short-haul flights where trains offer a viable alternative.

"If taxpayers are to bail out airlines, there must be a quid pro quo - this industry must help secure our future in the face of an unfolding climate emergency," the letter stated. Contrary to the French and Dutch government’s approach, Greenpeace has discovered through use of the Freedom of Information Act that easyJet lobbied heavily against green taxes before receiving a £600 million (US$756 million) bailout loan from the U.K. government that ultimately came without any climate-related conditions.

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American Airlines officially retires Embraer E190 and Boeing 767 fleets

As flying schedules and aircraft needs are fine-tuned during this period of record low demand, the carrier will take the unique step of retiring a total of five aircraft types.

American has officially retired the Embraer E190 and Boeing 767 fleets, which were originally scheduled to retire by the end of 2020.The airline has also accelerated the retirement of its Boeing 757s and Airbus A330-300s. Additionally, American is retiring 19 Bombardier CRJ200 aircraft operated by PSA Airlines.

These changes remove operating complexity and will bring forward cost savings and efficiencies associated with operating fewer aircraft types. It will also help American focus on flying more advanced aircraft as it continues receiving new deliveries of the Airbus A321neo and the Boeing 737 MAX and 787 family. American’s narrow-body fleet also becomes more simplified with just two cockpit types – the Airbus A320 and the Boeing 737 families. This benefits American’s operational performance through training efficiency and streamlined maintenance.

GE Aviation Awarded US$707 million for F110 engine production

The U.S. Air Force Life Cycle Management Center (AFLCMC) has awarded GE Aviation four contract actions valued at around US$707 million for F110-GE-129 engine production. These contracts which fall under an existing indefinite-delivery/indefinite-quantity (IDIQ) contract, will provide F110 engines, installs, spares and modernized engine management system computers for Lockheed Martin F-16C/D Block 70 aircraft, as well as the Boeing F-15QA Advanced Eagle. The contracts involve Foreign Military Sales to Bulgaria, Slovakia, Qatar and Taiwan.

GE’s F110 engine powers 86% of F-15s delivered globally over the last 15 years and 70% of today’s most advanced USAF F-16C/D fleet. GE Aviation also powers two-thirds of U.S. military fighters and helicopters.

Over the last two months, GE Aviation has been awarded more than US$1.2 billion in contracts to produce engines and hardware to support the U.S. military and international customers.

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United Airlines reports first-quarter net loss of US$1.7 billion

United Airlines (UAL) has reported first quarter 2020 financial results with a net loss of US$1.7 billion, and an adjusted net loss of US$639 million.

The company's total liquidity as of the close of business on Wednesday, April 29, 2020 was approximately US$9.6 billion, including US$2 billion under its undrawn revolving credit facility. The company currently expects daily cash burn to average between US$40 million and US$45 million during the second quarter of 2020.

United has entered into an agreement to receive approximately US$5.0 billion from the U.S. Treasury Department through the Payroll Support Program under the CARES Act in the form of a US$3.5 billion grant and a US$1.5 billion ten-year loan which will be used to protect the salaries and benefits of employees through Sept. 30, 2020. In connection with this funding, UAL will issue warrants to purchase approximately 4.6 million shares of UAL common stock to the federal government. The first installment of approximately US$2.5 billion was received by United on April 21, 2020 and warrants to purchase approximately 2.3 million shares of UAL common stock were issued.

The company submitted an application to the Loan Program under the CARES Act. Under the Loan Program, the company expects to have the ability through Sept. 30, 2020 to borrow up to approximately US$4.5 billion from the U.S. Treasury Department for a term of up to five years, with any loans issued expected to be senior secured obligations of the company. If the company borrows any amounts under the Loan Program, UAL expects to issue to the U.S. Treasury Department warrants to purchase shares of UAL common stock, with the number of warrants dependent on total borrowings.

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Norwegian ANSP chooses Airways' simulator solution

Airways International has been selected by Avinor Air Navigation Services (ANS) to deliver TotalControl simulator systems at six air traffic control units throughout Norway.

Avinor ANS awarded the contract to Airways in mid-April following a rigorous contract tender and negotiations process involving ATC simulator providers across the globe. The Avinor ANS contract is to supply and install multiple Tower and Approach simulation systems at Avinor ANS’ facilities at Gardermoen Tromsø, Bodø, Værnes, Flesland and Sola airports. The contract also includes 17 custom aerodromes and six mobile simulators.

The first TotalControl simulator is scheduled to be installed and operational at Gardermoen Tower by October 1, 2020. Airways International has also signed a five-year contract with Avinor ANS for simulator license, support and maintenance.

Airbus developing solution for airlines to use widebody aircraft for pure cargo operations

Airbus is developing a modification for A330 and A350 family aircraft which will enable airlines to install freight pallets directly onto the cabin floor seat tracks, after removal of the economy-class seats.

This solution will help any airline's own business continuity, and also alleviate the global shortage of ‘belly-freight’ air cargo capacity due to the widespread grounding of long-haul aircraft in the context of the COVID-19 pandemic. Additionally, it helps the industry to address the high demand for humanitarian flights to rapidly transport large quantities of medical equipment and other supplies over large distances to where they are needed.

Compared with loading cargo onto seats, this Airbus solution facilitates easier and quicker loading and unloading operations, as well as reduced ‘wear & tear’ to the seats themselves. Other important benefits include the added security of robust fire protection, and the 9g load restraint capability to prevent anything from shifting in flight.

The modification is packaged for operators as an Airbus Service Bulletin (SB). Under this arrangement Airbus defines the engineering workscope and also manages the process for obtaining the one-time certification from the European Union Aviation Safety Agency (EASA).

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O2 Aero Acquisitions acquires Aerox Aviation Oxygen Systems

O2 Aero Acquisitions has acquired Shaw Aerox (Aerox), a leading designer and manufacturer of installed and portable oxygen systems and accessories for aviation and medical users, for an undisclosed amount. Scott E. Ashton, O2 Aero Acquisitions Managing Director, has been named President and CEO.

The company, which has been rebranded as Aerox Aviation Oxygen Systems, LLC, was established in 1981 and provides the aviation industry with innovative oxygen delivery systems and products for general aviation, EMS, medical, and OEM manufacturers.

Among its products are installed cabin emergency oxygen systems for pressurized aircraft, portable oxygen systems for light aircraft operators, personal emergency oxygen systems, and TSO-approved oxygen masks for business aircraft. Aerox pioneered long-duration portable oxygen systems with its Aerox® Oxysaver Conserving Cannula. Aerox also operates an FAA Repair Station and is ISO9001 and AS9100D certified.

Second Boeing 777X takes to the skies

Boeing has conducted a productive and successful first flight of the second 777X airplane. The aircraft flew for 2 hours and 58 minutes over Washington state before landing at Seattle's Boeing Field.

Designated WH002, this airplane is the second of four in a dedicated flight-test fleet and will test handling characteristics and other aspects of airplane performance. An array of equipment, sensors and monitoring devices throughout the cabin allows the onboard team to document and evaluate the airplane's response to test conditions in real time.

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Commsoft announces management restructuring

Communications Software (Airline Systems), Commsoft, has announced a management restructuring programme which will position the company for future international growth. Patrick Cusk joins the Commsoft team as Presiden. Cusk is also Vice President of Operations at Valsoft Corporation (which acquired Commsoft last year) and has a background in vertical software applications, structured finance and commercial law.

John Wilson has been appointed as the new Director of Technology. He was previously COO at Black Ball Solutions and has a deep understanding of the aviation industry and agile methodology.

As part of the new management restructure there have been a number of internal promotions. Pete Lambert has been promoted to Director of Operations. Lambert was previously Head of Technical Operations and has been at Commsoft for over 21 years. Julian Beames has been promoted to Head of Customer Accounts. He was previously Business Development Manager for over nine years.

After an exemplary 12 years of leading the business, Nick Godwin is moving on from his role as Managing Director and will remain in close partnership with the business moving forward. As a Senior Consultant, Godwin will be assisting the team with sales and global new business opportunities and continuing to provide Commsoft with the benefit of his extensive market knowledge and experience.

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