Tuesday, January 14th, 2020

Flybe trying to dismiss talk of its imminent collapse

Despite having been taken over by a consortium of businesses less than a year ago, Flybe, which handles over half of all U.K. domestic flights outside of London, is fighting for its survival, with wide speculation that the low-cost domestic carrier is about to fold.

When Virgin Atlantic Cyrus Capital and Stobart Group bought the struggling carrier last year for £2.8m for its operations and a further £2.2m for its parent company, the consortium promised to inject £100m into a turnaround plan. It was also intended to rebrand the carrier as Virgin Connect this year. While Flybe’s chief executive has requested that staff do not publicly disclose any details about the carrier’s finances, Mark Anderson has also written to all 2,400 staff advising them that it is business as usual, warning them of “unhelpful and unproductive speculation”.

Despite Thomas Cook failing to obtain assistance from the U.K. government, Flybe is looking to the Minister of Transport for a financial package to keep the airline afloat. The carrier has been beset by a number of problems which has seen it continue to run at a loss. Brexit has affected the volume of travelers, while also weakening the pound. The majority of Flybe’s payments towards running costs are in U.S. dollars, while most of its revenue is in sterling. Neither Virgin nor Flybe have recently released any financial results for the company. However, Virgin Atlantic boss Shai Weiss told City A.M. in October that turning the struggling company around, and to “keep Flybe flying”, was still a priority. (£1.00 = US$1.30 at time of publication.)


Lufthansa Group Airlines welcome more than 145 million passengers on board in 2019

In 2019, the airlines of the Lufthansa Group carried a total of 145 million passengers on board. This represents an increase of 2.3% compared to the previous year. With around 1.2 million flights the seat load factor amounted 82.5%. This represents an increase of 1.0 percentage point.

The network airlines recorded an increase in the number of passengers in 2019, in particular at the hubs in Zurich (+5.7%), Vienna (+5.1%) and Munich (+2.5%). The number of passengers at the Frankfurt hub grew by 0.4% in 2019.

The network airlines Lufthansa, SWISS and Austrian Airlines carried a total of some 7.5 million passengers in December, 2.5% more than in the same month last year. The number of seat-kilometers offered in December was 2.9% up on the same month last year. Sales in seat kilometers rose by 6.3% in the same period. The seat load factor increased by 2.6 percentage points to 81.3%.

In point-to-point traffic, the Lufthansa Group carried 2.4 million passengers with the airlines Eurowings (including Germanwings) and Brussels Airlines in December, of which around 2.2 million on short-haul flights and 258,000 on long-haul flights.

This represents a decrease of 7.9%t over the previous year. The 11.3% decrease in the number of flights on offer in December was offset by a 10.1% decrease in sales. At 79.1%, the seat load factor was 1.0 percentage point higher than in the same month last year.


Spirit AeroSystems to lay-off 2,800 employees at Wichita, Kansas facility

Spirit AeroSystems has issued a notice under the Worker Adjustment and Retraining Notification Act of layoffs affecting approximately 2,800 employees at its Wichita, Kansas facility. Spirit is taking this action because of the 737 MAX production suspension and ongoing uncertainty regarding the timing of when production will resume and the level of production when it does resume.

This decision allows Spirit to begin aligning its cost structure to the production suspension and, after such suspension, what Spirit expects will be production levels lower than Spirit’s levels in 2019.

Spirit is a significant supplier on the 737 MAX program, with its workshare accounting for 70% of the airplane’s structure. This includes the entire fuselage, thrust reversers, engine pylons and wing components. In addition, the MAX represents more than 50% of Spirit’s annual revenue.

Spirit has not received notice from its customer, Boeing, on how long the production suspension will last or what the production rate will be in the future. Spirit believes that, when production resumes, the levels will be lower than previously expected due, in part, to the customer’s need to consume over 100 MAX shipsets currently in storage at Spirit’s facilities. In addition, Boeing has several hundred MAX airplanes built but not yet delivered to its customers.

Spirit plans to implement smaller workforce reductions later this month for its plants in Tulsa and McAlester, Oklahoma, which also produce components for the MAX. Based on final production rates agreed with Boeing, Spirit may have to take additional workforce actions in the future.

Gulfstream names Matt Baer Regional Vice President

Gulfstream Aerospace has promoted Matt Baer to regional vice president of sales for the northeastern U.S. and eastern Canada.

Baer joined Gulfstream in the spring of 2019 as a regional sales manager for the northeastern region. Prior to that, he was a vice president of global corporate aircraft finance with Bank of America Merrill Lynch. He has worked in the aviation industry for a decade and is a licensed pilot.

Baer is based in Gulfstream’s Manhattan Sales and Design Center and reports to Peter Vasconcelos, regional senior vice president of sales for the northeastern U.S. and eastern Canada.


Rolls-Royce develops technology for next-generation Tempest program

Over the last five years Rolls-Royce has been pioneering world-first technology that will contribute to the UK’s next-generation Tempest program.

In an aim to be more electric, more intelligent and to harness more power, Rolls-Royce recognized that any future fighter aircraft will have unprecedented levels of electrical power demand and thermal load; all needing to be managed within the context of a stealthy aircraft.

Before the launch of the Tempest program, Rolls-Royce had already started to address thedemands of the future. Back in 2014, the company took on the challenge of designing an electrical starter generator that was fully embedded in the core of a gas turbine engine, now known as the Embedded Electrical Starter Generator or E2SG demonstrator program.

Phase two of this program has now been adopted as part of Rolls-Royce’s contribution to the Tempest program.

BelugaXL enters into service

The BelugaXL has entered into service, providing Airbus with 30% extra transport capacity in order to support the on-going production ramp-up of commercial aircraft programs.

The aircraft, which is an integral part of Airbus’ industrial system, made its first operational flight on January 9. This is the first of six BelugaXL to begin work alongside the BelugaST predecessors, with the additional aircraft being introduced between 2020 and 2023.

Launched just over five years ago, in November 2014, the entry into service milestone marks yet another successful achievement for the internal aircraft program that was awarded Type Certification by the European Aviation Safety Agency (EASA) in November 2019, following an intensive flight test campaign that saw the BelugaXL complete more than 200 flight tests, clocking over 700 flight hours.

At 63 metres long and 8 metres wide, the BelugaXL has the largest cargo bay cross-section of all existing cargo aircraft worldwide. The BelugaXL can carry two A350 XWB wings compared to the BelugaST, which can only carry one. With a maximum payload of 51 tonnes, the BelugaXL
has a range of 4,000 km. (2200nm).

The BelugaXL is based on an A330-200 Freighter, enabling the re-use of existing components and equipment, and is powered by Rolls-Royce Trent 700 engines. The lowered cockpit, the cargo bay structure and the rear-end and tail were newly developed jointly with partners, giving the aircraft its distinctive look.


Magnetic MRO receives CAAC certification

Magnetic MRO has received the Civil Aviation Administration of China (CAAC) certification, proving the company has qualifications and meet local regulatory requirements for the maintenance, repair and overhaul organizations. 

Obtaining this certification allows the company to expand its capabilities and provide maintenance service on Chinese registered aircraft and its engines. The CAAC certification complements the European Aviation Safety Agency as well as Federal Aviation Authority certificates held by Magnetic MRO.

Munich Airport passenger figures up by 4% in 2019

Munich Airport has released that 2019 total traffic increased by 1.7 million, or four percent, to 47.9 million passengers. For the Bavarian hub, this result represents the tenth consecutive record-setting year for total passenger traffic. The number of take-offs and landings was up by around one percent to over 417,000 aircraft movements.

Airlines substantially increased the number of destinations served especially in the intercontinental segment, which saw a year-on-year rise of over six percent in take-offs and landings to a total of approximately 34,000 and an impressive nine percent increase in total passengers.

In European traffic, the passenger numbers were around four percent higher. Meanwhile, the number of passengers on domestic routes within Germany again declined by around 1 percent.

Chorus Aviation Capital adds 34 aircraft on-lease in 2019

Chorus Aviation Capital (CAC) has added a total of 34 aircraft on-lease in 2019. With this strong market performance, CAC’s third-party lease portfolio has now reached 641 aircraft.

Year-end, and previously unannounced transactions, include the acquisition of two mid-life Dash 8400 aircraft (MSN 4300 andMSN 4301) on lease to Croatia Airlines and an additional sale leaseback of two new ATR 72-600 aircraft (MSN 1545 and MSN 1552) with IndiGo. Additionally, CAC has extended its lease agreements with Aerolitoral, S.A. de C.V. (d.b.a. Aeromexico Connect), a subsidiary of Aerovías de México, S.A. de C.V. (d.b.a. ‘Aeromexico’), on three Embraer 190 aircraft previously acquired in 2017.


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MRO Latin America
January 22 - 23, 2020 – Cartagena, Columbia

Manufacturing World
February 26 - 18, 2020 – Makuhari Messe, Chiba-city, Japan

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