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Thursday, March 12th, 2020

Despite interest in wide-body jets, Boeing posts negative 28 orders for February

Having failed for the first time in decades to post any orders for the month of January, while sales of wide-body jets improved, cancelations and conversions of orders for the stricken 737 MAX led to a disappointing month for the American planemaker.

Having delivered 95 planes to customers in the first two months of 2019, this figure dropped to just 30 for the first two months this year. Boeing was not alone in feeling the backlash of the coronavirus outbreak with Airbus also witnessing requests from airlines to postpone deliveries and cash down payments for ordered jets. Airbus recorded no orders for the month of February.

According to Reuters news agency, Boeing's orders included a conversion by Air Lease Corp of nine MAX orders into three 787s, reflecting greater demand from airlines for the wide-body 787. Oman Air converted ten 737 MAXs into four 787s, while Boeing attributed one 767 for FedEx Corp and 10 787s to “unidentified customers”. Air Canada and Japan Investment Advisors canceled 11 and ten MAXs planes, respectively, from the order book.

After an accounting adjustment representing jets ordered in previous years but now unlikely to be delivered, Boeing’s net total for orders in February sank to a negative 28 airplanes.


Textron Aviation, WSU Tech and IAMAW launch aerospace tooling apprenticeship

Textron Aviation, WSU Tech and the International Association of Machinists and Aerospace Workers (IAMAW) have announced a new collaborative apprenticeship program to address long-term production and tooling requirements for the company’s aircraft programs.

The two-year program, the first of its kind in the region, will provide students both factory and classroom training in a wide range of skills needed to help design, build and maintain production tooling, which covers everything from specialized hand-held tools to large jig assemblies supporting aircraft parts and assemblies.

As Textron Aviation employees, program participants will not only earn a full-time salary and benefits, but the company will also cover related tuition and fees at WSU Tech.

“Textron Aviation has long been committed to building educational and community partnerships that benefit both the company and the region, particularly in developing a well-paid, skilled workforce that maintains our advantage in a very competitive, global market,” said Maggie Topping, senior vice president of HR and Communications at Textron Aviation. “Through the new apprenticeship program with WSU Tech, our students will get the benefit of an advanced curriculum designed specifically for this program, as well as learn on the job from our highly skilled tradespeople.”


Zurich Airport posts full-year 2019 profit of CHF 309 million

Flughafen Zürich AG has reported an encouraging result in 2019. In the reporting period, Flughafen Zürich AG's revenue increased by 5.0% to CHF 1.2 billion. The airport operator posted a profit of CHF 309.1 million. Additional provisions (CHF 45.8 million after taxes) for sound insulation measures in the previous year depressed the result for 2018. When adjusted for this one-off effect, profit was lifted year-on-year by CHF 25.5 million or 9.0%.

A total of 31,507,692 passengers traveled via Zurich Airport in 2019, a year-on-year increase of 1.3%. The number of local passengers rose moderately by 0.1% to 22.2 million. The number of passengers transferring at Zurich Airport increased by 4.2% to 9.2 million. At 29.3%, the share of transfer passengers was above the previous year’s figure (+0.9 percentage points). Flight movements totaled 275,329 in 2019, down 1.1% from the prior-year period. A total of 451,827 tonnes of freight were transported via Zurich Airport. The freight volume thus declined by 8.4% over the previous year.

TrueAero promotes Chris Luke to Senior Vice President of Leasing

TrueAero has promoted Chris Luke to Senior Vice President of Leasing.

Luke's leadership of TrueAero Asset Management has led to TrueAero's excellence in aircraft leasing, asset trading, origination, customer service, and marketing. Under his stewardship, TrueAero Asset Management has broken into the top third of commercial aircraft lessors worldwide.


Rolls-Royce launches new electronics manufacturing capability at Purdue University

Rolls-Royce has created new engine controls capability near the campus of Purdue University to support the company’s U.S. defense business, including the F130 engine competing for the U.S. Air Force B-52 program.

Rolls-Royce will assemble and test electronic engine controllers, which help manage in-flight engine operations. The first controller has been completed at Rolls-Royce in the Purdue Research Foundation’s Discovery Park District adjacent to the Purdue campus at West Lafayette, Indiana, and will be installed onto a Rolls-Royce AE 3007H engine, manufactured at the company’s facilities in Indianapolis, U.S.

The very first engine equipped with the new controller will be delivered to Northrop Grumman for installation on a U.S. Navy Triton aircraft. Additionally, the new controllers will be installed on AE 3007 engines bound for the U.S. Air Force Global Hawk and the U.S. Navy MQ-25 Stingray aircraft.

Purdue University has been designated as a Rolls-Royce University Technology Partnership and collaborated on research including advanced engine technology, materials and testing capability with Rolls-Royce investment at the university topping US$18 million since 2015 and more than 600 Purdue graduates among the company’s workforce in Indianapolis. Rolls-Royce and Purdue have also collaborated on initiatives in cybersecurity and digital technology, as well as the new controls project.


BOC Aviation reports record profit for 2019

BOC Aviation has reported profit before tax of US$775 million and net profit after tax of US$702 million for the full-year ended December 31, 2019, both increasing by 13% year-on-year. The company delivered a return on equity of 16.0%, exceeding its average return on equity of 15.1% since 2007.

The company achieved a strong result in 2019, ending the year with a solid balance sheet and as of today, has more than US$5 billion in available liquidity, positioning the company well to meet new challenges and pursue new opportunities in 2020.

In January 2020 BOC Aviation announced an order for 20 Airbus A320neo aircraft – starting the year strongly, and in March 2020 committed to acquire 22 new Boeing 787-8 aircraft for lease to American Airlines. As at March 11, 2020, the company had a total fleet of 561 aircraft comprising 316 owned, 40 managed and 205 aircraft on order.

S7 Technics and Satair sign consignment agreement

Russian MRO services provider S7 Technics has signed a consignment stock agreement with Satair, the aviation spares and solution provider.

The agreement covers the exclusive distribution of over 350 part numbers from a number of suppliers over a multi-year period and constitutes the first of its kind between Satair and customers in Russia and the CIS region. The agreement furthermore facilitates the plans of growing the cooperation between S7 Technics and Satair further over the coming years.

The new strategic partnership between the two companies will expand the scope of S7 Technics’ maintenance capabilities, increase the overall productivity, and allow the release of aircraft from maintenance checks more efficiently.


APEX encourages global tax relief for airline industry

APEX (Airlines Passenger Experience Association) strongly encouraged governments worldwide to issue immediate tax relief in an even-handed manner for the airline industry in the wake of COVID-19 (Novel Coronavirus). Representing nearly every major airline in the world, APEX believes that governments around the globe have a responsibility to reduce taxation upon airlines during this unprecedented disruption due to the COVID-19 public health emergency.

Aviation remains one of the most heavily taxed industries worldwide with an estimated US$136 billion in taxes being paid via airlines this year ranging from 5% to over 50% of total passenger ticket cost. As airlines are a leading global economic driver, APEX has put forward three key recommendations:
  1. Reduce all possible global tax burdens on airlines during this stressful time,
  2. Suspend “hidden taxes” such as forced slot and gate utilization, and
  3. Remove any new aviation taxes / penalties from consideration.
“Airlines are critical to our world’s economy and connecting the lives of billions,” said APEX CEO Dr. Joe Leader. “APEX’s recommendations for governments reducing taxation, penalties, and slot/gate bureaucracy in the midst of a crisis will go a long way toward ensuring economic recovery. Now more than ever, we need to enable airline resources and funds to go into both the health of our industry and our customers worldwide.”

APEX’s position on the slot rule suspension aligns with IATA’s recent request to suspend global slot rules due to the COVID-19. Following the initial steps taken by the European Union this week, this would allow airlines the opportunity to better manage the total number of flights at the over 200 slot-coordinated airports worldwide during these extraordinary times. Given the severity of the crisis, APEX expects that all slot and gate allowance measures extend fully through the summer season effective immediately.


Qantas grounds eight A380s until mid-September

The Qantas Group has announced further cuts to its international flying, reducing capacity by almost a quarter for the next six months.

The latest cuts follow the spread of the coronavirus into Europe and North America over the past fortnight, as well as its continued spread through Asia, which has resulted in a sudden and significant drop in forward travel demand.

These additional changes will bring the total international capacity reduction for Qantas and Jetstar from 5% to 23% versus the same time last year and extend these cuts until mid-September 2020.

The biggest reductions remain focussed on Asia (now down 31% compared with the same period last year). Capacity reductions to the United States (down 19%), the U.K. (down 17%) and Trans-Tasman (down 10%) will also be made in line with forward booking trends.

Rather than exit routes altogether, Qantas will use smaller aircraft and reduce the frequency of flights to maintain overall connectivity. This approach results in eight of the airline’s largest aircraft, the Airbus A380, grounded until mid-September. A further two A380s are undergoing scheduled heavy maintenance and cabin upgrades, leaving two of its A380s flying.

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Tamar Jorssen
Vice President Sales & Business Development
Email: [email protected]
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