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Thursday, March 26th, 2020

FACC scraps dividend and reassess Croatia plans

FACC, owned by China’s Aviation Industry Corporation, is rapidly reassessing its €33 million (US$36 million) project to build an automated, digitized production complex in Croatia. In addition, the company has opted not to pay a dividend for last year.

The situation has come about through the aviation industry’s reaction to the COVID-19 outbreak and, as a result, the company will also be reducing the working hours of many of its employees from April 6 for the next three months.  FACC is responsible for the manufacture of plane parts, predominantly wings, tail assemblies and fuselages as well as engines and cabin interiors for all major plane manufacturers, employing over 3,500 staff in 13 countries across the globe.

“The situation is very uncertain and changes daily or hourly,” Chief Executive Robert Machtlinger said. “We have to find an optimal balance between protecting our workforce... and struggling to achieve the necessary economic stability, secure financial stamina and maintain the trust of our customers,” adding that US$800 million in existing orders was an encouraging sign.

However, as a consequence of such an uncertain future, the Group would refrain from issuing a detailed forecast on its 2020 and 2021 earnings until the summer.

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Vortex Aviation Dublin facility receives EASA certification

Vortex Aviation, a global “On-Wing” turbine engine support company, providing 24/7 AOG support across Europe and neighboring countries, announced that its Dublin facility has received maintenance approval under EASA certification from the competent authorities (IAA) Irish Aviation Authority.

Vortex Aviation located in Dublin Ireland, provides engine hospital shop visit maintenance activities to support its global customer base of lessors, owners and operators helping reduce heavy maintenance costs.

The maintenance approval covers the majority of narrow-body and wide- body engine-types, for “On-Wing” and “Off-Wing” maintenance and includes Top Case and Engine Modular repairs on limited engine types.

“I am proud to announce our new facility for Vortex Dublin,” said Jeff Lund, President and CEO, Kellstrom Aerospace Group. “Over the last two years, Vortex has become a global company building larger facilities in the US, Ireland and Singapore to meet the needs of global demand for on wing support and surgical type repairs. The state-of-the-art facility in Dublin will allow Vortex to continue to meet the needs of our European customers to save engine maintenance cost. With the global epidemic and the amount of aircraft and engines on the ground, this facility will allow capability to store, preserve and provide lower cost maintenance to support Airlines, MRO, Financial Institutions, lessors and OEM’s.”

London City Airport temporarily suspends commercial and private flights 

Following the Government’s latest instructions in response to the Coronavirus outbreak, London City Airport has made the decision to temporarily suspend all commercial and private flights from the airport. This will begin today, Wednesday March 25 and is expected to last until the end of April.


GECAS appoints John Bordeaux as new Chief Investment Officer

John Bordeaux has been appointed as GECAS’ Chief Investment Officer. He will take up the role from April 2020.

Bordeaux will be responsible for the various teams that are involved in making GECAs' portfolio and investment decisions, namely Aircraft Trading, Commercial Operations and Portfolio Strategy. Having all these under one leader will ensure that the company is taking a holistic view of its portfolio and buy-hold-sell decisions.

Bordeaux is currently the Global Financial Planning & Analysis leader of GE Capital, a role he has held since May 2018. Prior to this, he has held several key roles in Finance and Capital Markets, namely serving in Managing Director roles in GE Energy Financial Services (EFS) and serving as Finance Leader for GE’s Global Growth Sales & Project Finance team.

Cessna SkyCourier starts ground engine tests

Textron Aviation has successfully completed initial ground engine tests on the prototype Cessna SkyCourier twin utility turboprop, featuring Pratt & Whitney Canada PT6A-65SC engines. These ground engine tests verified the functionality of the fuel system and engines, as well as the interface with the avionics and electrical systems.

The Cessna SkyCourier program continues to advance with assembly of the prototype and additional five flight and ground test articles. The tail was installed to the fuselage in early February 2020. Power to the aircraft’s electrical system was turned on in January, and the wings were successfully mated to the fuselage in December 2019.


Triumph Group provides update on steps to mitigate COVID-19 impact

Triumph Group has provided an update on the current impact of the coronavirus (COVID-19) on the business and the steps the company is taking to mitigate it. The company is expanding its actions to limit the spread of COVID-19 consistent with U.S. and international government safeguards. 

Although the situation remains fluid, all factories remain operational.  Triumph is complying with all mandates for closure of non-essential operations. Triumph will adjust its plans as government decisions and company policies evolve.

Given Boeing's plans to close their Washington state factories for 14 days, Triumph will evaluate the need to furlough employees at a subset of Triumph plants where capacity is largely dedicated to Boeing Commercial Aircraft programs.

Regarding the Company's plans to respond to the COVID-19 crisis, and to conserve cash and maintain long-term competitiveness, the following actions are underway: Approximately 250 full-time salaried employee and 250 contractor positions will be eliminated. Severance will be paid to impacted employees consistent with existing policies. These reductions are expected to be completed by May 1, 2020. 

The Company will implement furloughs for certain salaried employees of two weeks over fiscal 2021 to minimize reductions in force.  Additional furloughs may be required based on site closures or reductions in customer demand for Triumph's products and services. Base salaries and wages for hourly and most salaried employees will be maintained. Medical benefits will continue during furloughs. 

Triumph will suspend merit pay increases for all team members until the crisis has passed while forgoing management increases for one year. 

Senior executives, including the CEO and direct reports, will forgo 10 percent of their base salaries starting April 1, 2020 during the crisis.

Triumph's Board of Directors has elected to reduce their cash compensation during the crisis by 25%. The Board will continue to adjust executive and Director compensation as the situation warrants.

Triumph disclosed on March 20, 2020 via Form 8-K filed with the SEC that it would suspend payment of a dividend for the foreseeable future to conserve cash for operational use.  As a result of Triumph's decision to draw down its revolving credit facility as disclosed on March 19, 2020, the company has cash of approximately US$400 million and over US$100 million of availability to support its working capital requirements.


First passenger aircraft full of air cargo lands in Frankfurt

Loaded with around 30 tons of freight, a Lufthansa passenger aircraft landed in Frankfurt on March 25, after a flight time of 11 hours and 6 minutes. In addition to the cargo compartments of the Airbus A330, the cabin including the stowage compartments above the seats was also loaded.

On board the aircraft with the registration number D-AIKI were various highly urgent goods, mainly from the medical sector, including masks and other protective equipment. The required permits for the flight were issued in excellent cooperation with the foreign ministries and embassies of the People's Republic of China and the Federal Republic of Germany.

Lufthansa Cargo is making every effort to strengthen security of supply by air. About half of the goods are normally transported in freighters, the other half in the bellies of passenger aircraft. Due to the far-reaching cancellations of passenger connections, valuable airfreight capacity is lacking. The Lufthansa Group and Lufthansa Cargo are therefore looking into the possibility of operating further flights exclusively for cargo transport on passenger aircraft.

Especially in emergency and crisis situations, logistics and airfreight are of particular importance. In addition to urgent spare and machine parts, mainly sensitive pharmaceuticals and fresh goods are transported intercontinental by air. A Boeing 777F freighter has a standard load capacity of 103 tons.


Qantas secures AU$1.05 billion in additional liquidity

The Qantas Group has completed a new round of debt funding, securing AU$1.05 billion in additional liquidity to strengthen its position as it manages through the Coronavirus outbreak.

This debt has been secured against part of the Group’s fleet of unencumbered aircraft, which were bought with cash in recent years. The loan has a tenure of up to ten-years at an interest rate of 2.75%.

This funding increases the Group’s available cash balance to AU$2.95 billion with an additional AU$1 billion undrawn facility remaining available.

The Group’s net debt position remains at the low end of its target range, at AU$5.1 billion, with no major debt maturities until June 2021. In line with the rest of the Qantas debt book, the new funding contains no financial covenants.

With a further AU$3.5 billion in unencumbered assets, the Qantas Group retains flexibility to increase its cash balance as a prudent measure in the current climate. As previously announced, various steps have been taken to significantly reduce activity levels and costs given the dramatic revenue impact of the Coronavirus pandemic and the related travel restrictions on Jetstar and Qantas passenger services.


Leonardo extends training services capabilities to rotorcraft unmanned aerial systems

Leonardo is extending its training services capabilities to include rotor craft unmanned aerial systems (UAS) to provide 360° training solutions to its growing customer base for maximised mission effectiveness and safety. The Company has recently obtained an Authorized Training Organization Certificate for UAS released by ENAC (Italian National Civil Aviation Authority). With this certification Leonardo is now able to supply training services for light and very light category remotely piloted systems (up to 25 kg) through its Helicopter Training Academy headquartered in Sesto Calende (Northern Italy).

This certification adds to the overall quality level and versatility of training services provided by Leonardo, making the company the first rotorcraft OEM with this capability -  it is expected to be recognised by EASA in 2021. This latest service addition allows Leonardo to respond to the evolving market demands by those helicopter operators who are increasingly using small UAS for their missions, including those carrying out disaster relief and emergency response tasks.


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