Thursday, January 16th, 2020

Immediate backlash as U.K. government agrees to help struggling Flybe

No sooner had the U.K. government confirmed it was prepared to provide financial assistance to help keep struggling domestic carrier Flybe afloat than the backlash from competitive airlines began. There have also been a number of questions raised as to why the government is prepared to help Flybe when it refused to provide any help for the now defunct Thomas Cook last year.

IAG chief Willie Walsh has already lodged a complaint with the EU that the actions of the U.K. government represent a “blatant misuse of public funds.” The European commission said it was ready to discuss the bailout and warned that any state aid should not distort competition. Johan Lundgren, CEO of easyJet has complained vociferously that financial assistance provided to Flybe contravenes all the rules relating to state aid.

The U.K. government has been keen to defend its actions, advising that the financial aid being provided is fully compliant with all state aid regulations and has also made it clear that it’s decision to help Flybe and not Thomas Cook was made solely on the basis that it did not consider Thomas Cook a viable proposition and investing in the travel company would have been a case of throwing good money after bad. It believes, however, that Flybe’s fortunes can be turned around and therefore any investment makes more sense.

Financial aid from the government will not be in the form of a cash injection, but the deferment of over payment of £100 million owed to the government in the form of Air Passenger Duty charges. Passengers taking off from UK airports are subject to a £14.00 air passenger duty levy which the airline charges passengers and should then pass on to the government. Flybe has long been complaining about the problems this duty creates for the carrier as, being a predominantly domestic operator servicing 24 airports throughout the UK, air passenger duty is charged twice for return domestic flights, which is not the case for international flights.

In addition, the agreed deferment of payment of air passenger duty is on the condition that the consortium which owns Flybe - Virgin Atlantic, Cyrus Capital and Stobart Group – agrees to invest a considerable amount of capital into the stricken carrier itself. It is understood that this agreement is now in place, though the sums involved have not been disclosed.


TP Aerospace and SAS Scandinavian Airlines sign multiyear wheels and brakes program

At the end of December, 2019, TP Aerospace and SAS Scandinavian Airlines have signed an all-inclusive wheels and brakes program covering the support of 124 aircraft. The program is set to go into effect January 15, 2020.

SAS Scandinavian Airlines has chosen TP Aerospace's fully integrated, all-inclusive and highly flexible Cycle Flat Rate (CFR) program to support its full fleet of A319, A320, A321, A330, A340 as well as B737-700 and B737-800 aircraft.

The Program includes key support elements such as Component Maintenance Services (CMS), Component Pool Services (CPS), Component Inventory Services (CIS) and Logistic Services (LS) on a fully integrated basis.

Commercial Jet names R. Rick Townsend as Vice President Sales & Marketing

Commercial Jet is welcoming R. Rick Townsend as Vice President Sales & Marketing. Townsend brings to Commercial Jet over 35 years of MRO industry experience encompassing senior level sales, business development, marketing, and customer support roles. Townsend has also played important roles in helping to build a couple of MRO facilities (FFV / Ascent) from the ground up in addition to senior roles at mature MRO enterprises including Avianor, Lufthansa Technik and AAR Aircraft Services.

At Commercial Jet, Townsend will be responsible for leading all sales and business development efforts for the company’s broad portfolio of maintenance, modification and refurbishment services for Boeing, Airbus and Bombardier CRJ aircraft.


Boeing and U.S. Navy complete first super hornet IRST Block II flight

For the first time, Boeing and the U.S. Navy flew an F/A-18 Super Hornet equipped with an Infrared Search & Track (IRST) Block II pod in late 2019. IRST Block II is a critical component of the Block III Super Hornet. The Block III conversion will include enhanced network capability, longer range with conformal fuel tanks, an advanced cockpit system, signature improvements and an enhanced communication system. The updates are expected to keep the F/A-18 in active service for decades to come.

IRST is a passive, long-range sensor incorporating infrared and other sensor technologies for highly accurate targeting.

Currently in the risk reduction phase of development, IRST Block II flights on the Super Hornet allow Boeing and the Navy to collect valuable data on the system before deployment to the fleet. The Block II variant will be delivered to the Navy in 2021, reaching Initial Operational Capability shortly thereafter.

Virgin Galactic appoints Enrico Palermo as Chief Operating Officer

Virgin Galactic, a vertically integrated aerospace company, has appointed Enrico Palermo as Chief Operating Officer (COO), effective immediately. In this newly created role, he will be responsible for helping maintain efficiency and peak performance across the enterprise as it develops as a public company, and will lead the execution of specific company strategies and initiatives.

Palermo currently serves as President of The Spaceship Company (TSC), the wholly-owned aerospace manufacturing and development subsidiary of VG. In this role, he leads over 500 employees at the company’s facilities in Mojave, California. Palermo joined Virgin Galactic in 2006 as one of its first employees. He will maintain his capacity of TSC President.


TrueNoord leases two further ATR 72-600s to US-Bangla

TrueNoord, the specialist regional aircraft lessor, has placed two more new ATR 72-600 aircraft on long-term operating leases with expanding Bangladeshi domestic and international operator, US-Bangla. The aircraft have been financed by Citibank, Société Générale and Royal Bank of Canada under TrueNoord’s revolving warehouse facility. Milbank represented TrueNoord and Clifford Chance advised the banks on the financing side of the transaction.

These new aircraft supplement the recently re-marketed ATR72-600 which TrueNoord transitioned from Air France HOP! in October and bring TrueNoord’s total fleet placed with US-Bangla to three ATRs. This aircraft type now shapes the backbone of the airline’s modern regional fleet.

Qatar Airways and Malaysia Airlines announce significant codeshare expansion

Qatar Airways will expand its codeshare cooperation with Malaysia Airlines, starting from January 27, 2020. The new codeshare agreement will strengthen the two airlines’ strategic partnership, first initiated in 2001.

Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker, said: “Since 2001, both airlines have witnessed the significant benefits codeshare cooperation have brought, providing passengers with unrivalled service and seamless connections. The expansion of codeshare cooperation between Qatar Airways and Malaysia Airlines is a natural next step in the strengthening of our partnership.”

With 10 Qatar Airways destinations covered by the airlines’ current codeshare cooperation, the expanded agreement will allow Malaysia Airlines passengers to book travel to 20 additional Qatar Airways gateways in Europe, America, and Africa.

In turn, Qatar Airways passengers will benefit from access to four exciting new destinations in South East Asia. They can now book travel on Malaysia Airlines’ flights to Sibu, Malaysia; Alor Setar, Malaysia; Medan, Indonesia; and Surabaya, Indonesia. This brings the total number of codeshare routes in Malaysia Airlines’ network to 24.


Frankfurt Airport serves more than 70.5 million passengers

Frankfurt Airport (FRA) has served more than 70.5 million passengers in 2019 – achieving a new all-time record by exceeding the 70-million mark for the first time in a calendar year. Compared to the previous year, this represents a passenger increase of 1.5%. Following a positive trend in the first half of 2019 (up 3.0%), passenger volumes largely stagnated in the second half of the year (up 0.2%). In the months of November and December 2019, passenger numbers declined for the first time since November 2016. The relatively weaker growth in full-year passenger numbers can be mainly attributed to domestic traffic (down 3.4%) and European traffic (up 1.2%). In contrast, intercontinental traffic to and from FRA increased by 3.4% in 2019.

The airports in Fraport AG’s international portfolio continued to show largely positive performance during 2019. Affected by the bankruptcy of home-carrier Adria Airways and other factors, Ljubljana Airport (LJU) in Slovenia recorded a 5.0% traffic decline in the reporting year (December 2019: down 21.6%). In contrast, Fraport’s two Brazilian airports of Fortaleza (FOR) and Porto Alegre (POA) posted combined traffic growth of 3.9% to 15.5 million passengers (December 2019: up 0.3%). Peru’s Lima Airport (LIM) continued the strong performance of previous years, with traffic rising by 6.6% (December 2019: up 5.4%).

Traffic at the 14 Greek regional airports expanded slightly by 0.9% to nearly 30.2 million passengers in 2019 (December 2019: down 2.2%). Following years of dynamic growth, traffic at Varna (VAR) and Burgas (BOJ) airports in Bulgaria declined by 10.7%, due to airlines consolidating their flight offerings (December 2019: up 23.3%).

In 2019, traffic at Turkey’s Antalya Airport (AYT) once again advanced rapidly by 10.0% to almost 35.5 million passengers (December 2019: up 2.8 %). Pulkovo Airport (LED) in St. Petersburg, Russia, saw traffic climb by 8.1% to some 19.6 million passengers (December 2019: up 5.7%). At Xi’an Airport (XIY) in China, traffic jumped by 5.7 percent to more than 47.2 million passengers (December 2019: up 4.7%).


Falko outlines 2019 portfolio activity

Falko Regional Aircraft (Falko) has provided a summary of its 2019 market activity.  In 2019, Falko acquired 49 regional aircraft, sold 11 aircraft and signed lease agreements or extensions relating to a further 6 aircraft.  Total transaction value exceeded US$1billion. As at December 31, 2019, Falko’s portfolio totaled 115 aircraft on lease to 19 customers worldwide.

Aircraft acquisitions focused on regional jets with 12 Embraer E195s, 12 Embraer E190s, 4 Embraer E175s, 14 Bombardier CRJ900s and 7 Bombardier CRJ200s, being added to Falko’s portfolio with Delta, Air Canada, TUI, Alitalia and Arkia all becoming new customers.

In addition, Falko closed its second equity fund in July 2019 raising US$650 million of equity capital focused on regional aircraft investments. 

Falko is an aircraft operating leasing company focused on the regional aircraft sector. It is one of the longest standing and largest managers of regional aircraft globally, having acquired 140 aircraft with a total value of US$2.0 billion since its expansion into all regional aircraft types in 2013.


Alaska Air Group reports December 2019 load factor of 85.9%

Alaska Air Group has posted December operational results on a consolidated basis, for its mainline operations operated by subsidiary Alaska Airlines and for its regional flying operated by subsidiary Horizon Air Industries and third-party regional carriers.

On a combined basis for all operations, Air Group reported a 9.4% increase in traffic on a 4.7% increase in capacity compared to December 2018. Load factor increased 3.7 points to 85.9%.


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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