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Wednesday, February 19th, 2020

Air Canada shares fall as carrier misses forecast profit – blames grounding costs of MAX 737

Air Canada has reported adjusted net income of CA$47 million or CA$0.17 per share for the fourth quarter of 2017 against an average predicted quarterly earning of CA$0.38 per share, resulting in a drop of 2.4% in early morning trading of shares.

The carrier has been hit hard by increased operating costs of less-efficient aircraft brought in to replace its 24 grounded Boeing 737 MAX jets, which have also restricted the ability to fly more passengers. Air Canada has also been forced to cancel all flights to Beijing and Shanghai from January 30 through to February 29 owing to the coronavirus outbreak, with flights to China representing approximately 6% of its available seat miles.

According to Reuters news agency, the airline expects aircraft maintenance expenses to increase 15%, or by about C$150 million this year from 2019. It expects EBITDA (earnings before interest, taxes, depreciation, and amortization) to drop by C$200 million during the first quarter of 2020 largely due to the absence of the MAX, one of its most-efficient aircraft.

For the full year 2020, Air Canada is expecting a “small” increase in EBITDA. Analysts were expecting 2020 EBITDA to rise more than 10% to C$4.05 billion, according to IBES data from Refinitiv. Commenting on the current situation, Michael Rousseau, Air Canada’s CFO, “There is some impact from not flying to China for two months of Q1, including cargo as well, but certainly, the ... MAX is the single biggest item.” 

Air Canada is replacing its Airbus narrow-body fleet with Boeing aircraft and had expected to be flying 50 737 MAXs by mid-2020. Rousseau said the carrier has been in discussions with Boeing to reach a financial arrangement in the wake of the grounding, adding that: “an initial settlement payment was made to Air Canada in the fourth quarter of 2019, with any further amounts subject to the finalization of the agreement.” (US$1.00 = CA$1.33 at time of publication.)


Bii purchases B737-800 for teardown and part-out

Specialist aircraft component support provider Bii.aero has purchased a B737-800 airframe for teardown.  The twenty-year-old aircraft (MSN 28381) was previously owned by lessor Aircastle and operated by Indonesian carrier, Sriwijaya.

This aircraft is the first asset acquired by Bii in a pro-active program that will see the company use in-house expertise and market valuations to rapidly expand its teardown operations throughout 2020. Bii’s CEO, Francis Cradock, and his team have been engineering a dynamic growth strategy to incorporate one aircraft a month which will sustain Bii’s high-quality inventory of commercial parts to meet burgeoning global requirements.

Bii’s B737-800 aircraft is now being dismantled for parts at ComAv Technical Services in Victorville, California.  In a predicted 3-month process, all parts will be carefully assessed by Bii’s technical team before being sent to specialist repair shops for overhaul, testing and re-certification as necessary.  

Qatar Airways and Bulgaria Air sign codeshare agreement

Qatar Airways has signed a codeshare agreement with Bulgaria Air. First codeshare flights will operate from March 2.

The agreement will provide Bulgaria Air passengers with a seamless connection to destinations in Africa, Asia and the Middle East. Qatar Airways’ passengers will benefit from access to two new destinations in Bulgaria: Varna and Burgas.

Qatar Airways first launched services to Sofia, Bulgaria on September 22, 2011, beginning with a four-times weekly service. In the years since, due to the strong demand by travellers, the service has grown to 14 weekly flights.


Indra revolutionises air traffic control with artificial intelligence remote tower

Spanish Technology and consulting company Indra, has developed a revolutionary remote tower solution for air control, which offers unprecedented safety and efficiency levels during landing and take-off thanks to its use of artificial intelligence.

The new system enables savings that can be as high as 50%, since it eliminates expenses related to construction of a physical tower and it increases efficiency and operational use, mainly through work load balancing in “multi-airport” systems.

It is the first solution to incorporate artificial intelligence functions to execute critical air control processes without any need for human intervention. More specifically, the system employs advanced Deep Learning architectures that have been trained to carry out multiple operative
tasks through autonomous machine vision. It is capable of detecting any operational anomalies in the aircraft’s configuration to report them to the operator. If, for example, the plane’s landing gear is not deployed or if its flaps are not properly open before take-off, the controller is alerted immediately.

In the same way, the system can identify and follow any moving aircraft, vehicle or person autonomously. It monitors the areas of greater interest more closely, alerting to the presence of unauthorizedvehicles, people, animals, birds, and even drones that may represent a security risk.

Indra’s remote tower solution is complemented by the company’s ARMS anti-drone system, which can selectively neutralize any UAV. This solution has been implemented to avoid any recurrence of situations such as the ones in December 2018 in Gatwick and Heathrow.

The new solution arises as the result of Indra’s long accumulated experience in developing these solutions.

For the first time in the history of aviation, the company, - together with Avinor, the Norwegian navigation services supplier, and the Kongsberg company- has made it possible for a commercial aircraft to land at an airport with the help of controllers who were hundreds of kilometers away.

This milestone was achieved on October 19, 2019, when a passenger plane requested permission to land at Rost Island airport from the Bodo control tower, which is located on Norway’s mainland.

The controllers supervised the landing maneuver and remotely provided the instructions to land safely.


SAS and Lufthansa Technik renew and expand long-term contract

SAS Scandinavian Airlines has prematurely extended its existing component support contract with Lufthansa Technik and added further services.

Under the new agreement running until December 2026, Lufthansa Technik will provide an integrated material supply (Total Component Support, TCS®) for the airline's entire Boeing and Airbus fleet, including the carrier's new A350s. In addition, Lufthansa Technik will provide Airframe Related Components (ARC®) services for the Boeing and Airbus fleets including LEAP-1A nacelle support.

Under the Total Component Support (TCS®) contract, Lufthansa Technik supplies spare parts to the airline's Scandinavian hubs. Lufthansa Technik is also responsible for base maintenance of the carrier's A330 and A340 long-haul aircraft as well as for the
maintenance and repair of composites structures (Airframe Related Components,

The contract expansion also covers nacelle support for SAS' fleet of A320neo aircraft, powered by LEAP-1A engines. Additionally, the agreement entails A350 wheels and brakes services.

The first of eight Airbus A350s on order has just recently entered the SAS fleet. As part of the modernization of the short and long-haul fleet, SAS will take delivery of new Airbus A320neo (80), Airbus A330 Enhanced (5), Airbus A350 (8) and Airbus A321LR (3) aircraft before the end of

Moscow Domodedovo passenger traffic rises 13% in January

Moscow Domodedovo Airport welcomed 2.1 million passengers in January, a 13% year-over-year increase. Domestic passenger traffic reached 1.3 million passengers, up 13% year-to-year.

International traffic rose 14% in January, to 826 thousand compared to the same period last year. Antalya, Doha, Istanbul, Minsk and Verona were key growth drivers. The airport served 164 thousand travelers on these routes, a 47% year-over-year rise.


TAM broadens customer offering - ATR 72s to complement Saabs

Täby Air Maintenance, TAM, has announced its most important new customer offering for decades: the current wide range of services for the Saab family of regional airliners is complemented with a full range of support for the ATR 72.

The first batch of technicians is already licensed and a full set of tooling has been delivered, in due time to be ready when the first aircraft is due to arrive in mid March.

Bombardier to focus on Business Aviation after sale of Transportation Division to Alstom

Bombardier has made the strategic decision to focus exclusively on business aviation and plans to accelerate its deleveraging through the sale of its rail business.

"Today marks an exciting new chapter for Bombardier. Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market-leading US$7.0 billion business aircraft franchise. With a stronger balance sheet after the completion of this transaction, an industry-leading portfolio of products, a strong backlog, and a rapidly growing aftermarket business, we will compete in this market from a position of strength,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.

Bombardier has signed a Memorandum of Understanding (MOU) with Alstom SA and the Caisse de dépôt et placement du Québec (la Caisse) for the sale of its Transportation business to Alstom. Under the transaction, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of US$8.2 billion (EUR ~7.45 billion). Total proceeds, after the deduction of debt-like items and transferred liabilities, including pension obligations, and net of BT cash, are expected to be approximately US$6.4 billion, subject to upward adjustments of up to US$440 million. After deducting la Caisse’s equity position between US$2.1 billion and US$2.3 billion, Bombardier would receive net proceeds of between US$4.2 to US$4.5 billion, including US$550 million of Alstom shares for a fixed subscription price of EUR 47.50, monetizable after a three-month lock-up post-closing, subject to closing adjustments, indemnities and the EUR to USD exchange rate. Bombardier intends to direct these proceeds towards debt paydown and will evaluate the most efficient debt reduction strategies.


Joramco signs maintenance agreement with Avion Express

Joramco, the Amman-based MRO and the engineering arm of Dubai Aerospace Enterprise (DAE), has entered into the first maintenance agreement with Avion Express, one of the largest narrow-body ACMI operators.

The agreement, which was signed in August 2019, included heavy maintenance on six of the carrier’s A320 aircraft. Checks began in October 2019 and have continued into the New Year; the final aircraft is currently undergoing maintenance and is projected to be delivered early March.


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

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March 24 - 26, 2020 - London, UK

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