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Monday, March 16th, 2020

FAA launches probe after in-flight incident results in 12-inch crack in older Southwest 737 jet

The FAA is to launch an in-depth investigation after a Southwest Airlines (Southwest) 737, en route to Boise, Idaho from Las Vegas, Nevada, experienced a gradual loss of cabin pressure, during which, over a six-minute period, the pilots began a rapid descent from 36,000 feet down to 22,000 feet, an altitude deemed much safer for passengers. The jet continued its flight to Boise without further incident.

The cabin depressurization was sufficiently slow that at no time were oxygen masks automatically deployed from above the passengers and no injuries were reported. On landing at Boise, the older-model 737 was thoroughly inspected and a 12-crack was discovered in the plane’s crown immediately behind the cockpit. This particular area is scheduled for inspection every 1,500 flights and according to a Southwest spokesperson, the last inspection fell within that flight period. According to the Wall Street Journal, when reporting the incident to the Federal Aviation Authority (FAA), Southwest also confirmed that during routine maintenance checks, the carrier had found external cracks on two other aircraft.

In 2011 a five-foot-long hole ripped opened in another Southwest 737, forcing pilots to make an emergency landing at a military base in Arizona. Investigators blamed fatigue cracks in the plane’s skin. The American carrier’s maintenance record has come under close scrutiny before, with the FAA proposed a US$10.2 million fine in 2008 against Southwest for failing to conduct mandatory inspections for fatigue cracks on a number of its aircraft.

In February of this year, according to US News, the Transportation Department’s inspector general confirmed that Southwest had flown used planes it had purchased without obtaining verification of their maintenance and repair histories. The agency added that, “Many officials throughout the FAA have expressed concern about the safety culture at Southwest Airlines,'' though Southwest has denied the allegations.

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oneworld, SkyTeam and Star Alliance member airlines call on governments and stakeholders for extraordinary support

On behalf of their member airlines, the three global airline alliances oneworld®, SkyTeam
and Star Alliance are jointly calling on governments and stakeholders to take action to alleviate the unprecedented challenges faced by the global airline industry amid the COVID-19 pandemic.

The three global alliances, which represent almost 60 airlines around the world that contribute
more than half of global airline capacity, are strongly supporting a request by the International Air Transport Association for regulators to suspend slot usage rules for the northern summer 2020 season as the airline industry suffers from extraordinary reductions in passenger demand.

The alliances welcome the moves in recent days by some regulators who have suspended slot regulations temporarily and urge others to follow suit promptly. They also request that regulators consider extending the suspensions for the entire operating season.

The impact of COVID-19 on the airline industry is significant, with IATA estimating up to US$113 billion in revenue losses for global passenger airlines. The impact is expected to have a ripple effect through the value chain that supports the airline industry. The forecasted revenue loss scenario does not include travel restrictions recently imposed by the US and other governments. U.S. restrictions on passengers from the Schengen Area will place pressure on the US-Schengen market, valued at over US$20 billion in 2019.

To alleviate the immense pressures faced by airlines in the current operating environment, and in support of IATA’s statement on 12 March, the three alliances urge governments worldwide to prepare for the broad economic effects from actions taken by states to contain the spread of COVID-19, and to evaluate all possible means to assist the airline industry during this unprecedented period.

The alliances also call on other stakeholders to provide support. For example, airport operators are urged to evaluate landing charges and fees to mitigate the financial pressure faced by airlines due to a severe decline in passenger demand.

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Leonardo posts net profit of €822 million for full year 2019

Leonardo has posted 2019 full year results. Revenues amounted to €13,784 million an increase of 12.6% compared to 2018. EBITA, amounted to €1,251 million, showed significant growth compared to 2018 (€1,120 mln), thus confirming a sound profitability (ROS of 9.1%, in line with the previous year).

EBIT, amounted to €1,153 million, an improvement of 61.3% compared to 2018. Net Result before extraordinary transactions, amounted to €722 million, mainly benefitted, compared to the previous year, from an improvement in the operating profit, net of related tax charge.

Net Result amounted to €822 million, included the effects of the release of a large part of the provision set aside against the guarantees given upon the sale of the transport business of Ansaldobreda S.p.A. following the subsequent signature of the transaction with Hitachi. The data for 2018 included the effects of the judgment of acquittal towards Ansaldo Energia and another minor transaction, which had led to the recognition of proceeds of €89 million among the result from Discontinued Operations.

Free Operating Cash Flow (FOCF), posted a positive value of €241 million (€ 336 mln in 2018).

Finnair cuts capacity by 90% from April 1

The coronavirus epidemic has had a severe impact on demand for air travel, and several countries have set restrictions on air travel.

Finnair has released that it is now making substantial adjustments to its traffic and will reduce approximately 90% of its normal capacity, compared to 2019, starting from the beginning of April 2020. These adjustments will be in effect until the situation improves.

As of April 1, Finnair will temporarily operate only approximately 20 routes, ensuring certain critical air and cargo supply connections for Finland during this exceptional situation. Finnair will start transitioning to the limited network immediately and will cancel between 1,500 to 2,000 flights from March 16 to March 31. 

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American announces phased suspension of additional long-haul international flights from the U.S.

American Airlines will implement a phased suspension of additional long-haul international flights from the U.S. starting on March 16. This suspension will last through May 6. This change is in response to decreased demand and changes to U.S. government travel restrictions due to coronavirus (COVID-19). The airline will reduce international capacity by 75% year over year — from March 16 to May 6, while continuing to operate one flight daily from Dallas-Fort Worth (DFW) to London (LHR) and one flight daily from Miami (MIA) to LHR and three flights per week from DFW to Tokyo (NRT).

Short-haul international flying, which includes flights to Canada, Mexico, Caribbean, Central America and certain markets in the northern part of South America, will continue as scheduled.

In addition to the international changes, the airline anticipates its domestic capacity in April will be reduced by 20% compared to last year and May’s domestic capacity will be reduced by 30% on a year over year basis.

Air France to ground A380 fleet, KLM Boeing 747 fleet

Faced with growing restrictions on the possibility of travelling and a strong downward trend in demand which has resulted in a drop in traffic and sales over the last few weeks, the Air France-KLM Group released that it is obliged to gradually reduce its flight activity very significantly over the next few days, with the number of available seat kilometers potentially decreasing between -70% and -90%.

This reduction in capacity is currently scheduled to last two months, and the Group will continue to monitor the evolution of the situation on a daily basis andadjust it if necessary. As a result of this reduction in capacity, Air France will ground its entire Airbus 380 fleet and KLM its entire Boeing 747 fleet.

The Group has already taken a number of strong measures to secure its cash flow. Last week, the Air France-KLM Group drew a revolving credit facility for a total amount of €1.1 billion and KLM drew a revolving credit facility for a total amount of €665 million. As of March 12, the Group and its subsidiaries had more than €6 billion in cash and cash equivalents.

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EASA issues safety directive to combat spread of COVID-19 via airline travel

The European Union Aviation Safety Agency (EASA) has issued a safety directive to reduce the risk of spread of the novel coronavirus through flights to and from high risk areas. This is the first EU-wide operational measure to control the spread of COVID-19 in Europe.

The safety directive specifies measures to be taken for flights serving high-risk destinations. It mandates thorough disinfecting and cleaning of aircraft which operate from high-risk destinations after each flight. Exceptions can be made only when disinfectants with a longer-lasting effect are used – but even in those cases a thorough disinfection is mandated no later than 24 hours after departure from a high-risk airport.

“We need to reassure the passengers, the airline crews and the airport staff that their health and safety is our top priority,” European Commissioner for Transport Adina Valean said. “EU is taking
concrete measures to limit and to slow the spread of the novel coronavirus. That’s why EASA issued a new safety directive concerning the full disinfection for all the aircrafts after each flight from the
high risk areas both in Europe and beyond.”

The definition of high risk geographical areas will be based on all available information, taking into account World Health Organisation (WHO) situation report assessments, guidance issued by the European Centre for Disease Prevention and Control (ECDC) and regional public health assessments.

EASA further recommended that airlines operating on all routes step up the frequency of cleaning, disinfect as a preventative measure and ensure full disinfection of any aircraft which has carried a passenger who was suspected or confirmed as being infected with COVID-19. Airport operators should similarly disinfect terminals regularly.

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Lufthansa Executive Board proposes to suspend dividend payment

The Executive Board of Deutsche Lufthansa AG has decided to propose to the Annual General Meeting that the dividend payment for the financial year 2019 shall be suspended.

Lufthansa Group closed the year 2019 with an adjusted EBIT of EUR 2,026 million. The adjusted EBIT margin was 5.6%, within the range of the 5.5% to 6.5% forecast given in June 2019.

The spread of the coronavirus is having a major impact on global demand for air travel. This includes travel restrictions for passengers originating from the European Union imposed by the U.S. authorities. Over the course of the last week, new bookings at the Group airlines were around 50% lower, compared to the same time last year. Furthermore, the airlines are recording a significant increase in the number of flight cancellations.

Over the next few weeks, the flight schedule may be reduced further by up to 70% compared to the original plan. The Group is also reducing material and project costs, intends to implement reduced working hours, and is negotiating the postponement of planned investments. Despite these countermeasures, the Group expects Adjusted EBIT in 2020 to be significantly below the prior-year result.

CAVU Aerospace increases capacity for short term and long-term storage of aircraft

CAVU Aerospace has increased capacity for short-term and long-term storage, maintenance and dismantling at their Roswell, NM. (KROW), Victorville, CA. (KVCV) and Stuttgart, AR (KSGT) facilities. With the global health crisis, the aviation industry is seeing there will be a rapid increase for support of aircraft storage and maintenance. CAVU Aerospace continues to provide quality expert fixed base and mobile dismantling services.

“We have to be efficient and effective as an industry in times like this. It is important to find creative ways to work together with our airline and lessor customer base to weather this storm, which is why we are increasing capacity in all of our CAVU locations. Our teams both stationary and mobile are ready to respond when the call comes.” said Ken Kocialski, Partner CAVU Aerospace.

CAVU Aerospace works with all lessors, airlines and suppliers and is ready to respond to new requirements given the forecast for parked aircraft.

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