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Monday, April 6th, 2020

COVID-19 and continued 737 MAX grounding sees Avolon cancel 75-jet order from Boeing

The dramatic impact of the coronavirus, combined with the longer-than-expected grounding of the Boeing 737 MAX jet has seen Avolon, the world’s third-largest commercial jet lessor, cancel an order for 75 737 MAXs as well as four Airbus A330neos.

Boeing has confirmed the cancelations, describing them as by mutual agreement. However, Avolon was keen to remain committed to the beleaguered 737 MAX by rescheduling delivery of a further 16 of the jets due for delivery between 2020 and 2024, now scheduled for 2024.

The current state of play is that Avolon has 55 MAX jets currently on order with the American planemaker. The original deal for the 75 canceled jets was made in 2017, with an option for 20 additional jets and, at the time, had an estimated value of US$11 billion at list prices and on canceling the order confirmed that it had not placed any of them with lessees.

Avolon has recently reduced its aircraft commitments to 165 aircraft from 284 between 2020 and 2023, which will substantially reduce its near-term capital commitments. The aircraft lessor is 70% owned by China’s Hainan Group and is currently experiencing lease payment relief requests from 80% of its customers in light of the current coronavirus situation and anticipates agreeing short-term rental deferral agreements with them.

According to Reuters news agency, Avolon ended the first quarter with unrestricted cash and undrawn secured warehouse facilities in excess of US$5 billion, with commitments to sell 21 narrow-body and wide-body aircraft with an approximate value of US$747 million to the Sapphire 2020-1 vehicle. Avolon ended the first quarter with an owned and managed fleet of 549 aircraft, with total orders and commitments for 306 aircraft.


Nordic Aviation Capital appoints new Chief Funding Officer

Regional aircraft lessor Nordic Aviation Capital (NAC), has appointed Gareth Halpin as Chief Funding Officer, effective April 6, 2020. Halpin will be based out of NAC’s newly opened Headquarters in Limerick and will report to the company’s CEO, Søren M. Overgaard.

Prior to Avolon, Halpin served in several senior executive roles in the financial services and aircraft leasing sector, as Deputy Head/Senior Manager of the Debt Restructuring division in IBRC bank and as Director of Marketing and Risk Management in Pembroke Group (now Standard Chartered Aviation Finance). He started his career with KPMG in the financial services sector.

Furthermore, Morten Mikkelsen will assume the position of Chief Financial Officer with immediate effect. Mikkelsen will continue to be based in the Billund office and will report to the company’s CEO, Søren M. Overgaard.

Japan Coast Guard orders two more H225 helicopters

Japan’s largest Super Puma operator, Japan Coast Guard (JCG), has placed a new order of two H225 helicopters. This follow-on order brings JCG’s Super Puma fleet to 15, comprising two AS332s and 13 H225s. The new helicopters will be utilised for territorial coastal activities, security enforcement, as well as disaster relief missions in Japan.

The JCG’s H225s are covered by Airbus’ HCare Smart full-by-the-hour material support. This customised fleet availability programme allows JCG to focus on its flight operations whilst Airbus manages its assets.


FAA and CAAI certify IAI's conversion of Boeing B737-800 aircraft from passenger to freighter configuration

Israel Aerospace Industries (IAI) has reported that the Federal Aviation Administration (FAA) of the United States and the Civil Aviation Authority of Israel (CAAI) have certified IAI's Aviation Group's conversion of Boeing B737-800 aircraft from passenger to cargo configuration. The Aviation Group has now delivered the first two converted aircraft of this model.

With the COVID-19 crisis forcing many airlines into halting passenger service, the demand for cargo flights, crucial to the delivery of medical supplies, medicines, food, and other necessary equipment, has been rising.

Founded in January 2019, the Aviation Group consolidated all of IAI's activities involving manned aircraft, both military and civilian, into one business unit. It is one of the few facilities in the world that specializes in converting passenger aircraft into cargo configuration. The Group handles both wide-body and narrow-body aircraft, which are operated by some of the world’s largest shipping companies, such as Amazon and DHL.

CAVU Component Repair enhances service offerings with EASA Part 145 approval

CAVU Component Repair (CCR), a division of CAVU Aerospace, has received EASA 145 maintenance organization approval (certificate EASA.145.6925) in their 80,000 ft² state-of-the-art Mesa, Arizona facility.

With this certification, CCR will look to enhance its aftermarket services and migrate towards enhancing its MRO capability across multiple platforms.

CAVU Aerospace Partner, Ken Kocialski commented, “receiving EASA approval for CCR was the next step in showing our commitment to better serve the industry and our customers.  We are excited our hard work is paying off.” 


Boeing extends temporary suspension of Puget Sound production operations

Boeing has released that it is extending the temporary suspension of production operations at all Puget Sound area and Moses Lake sites until further notice. These actions are being taken in light of the company's continuing focus on the health and safety of employees, current assessment of the spread of COVID-19 in Washington state, the reliability of the supply chain and additional recommendations from government health authorities.

During the suspension, the company will continue to implement additional health and safety measures at its facilities to protect employees. These measures include new visual cues to encourage physical distancing, more frequent and thorough cleaning of work and common areas
and staggering shift times to reduce the flow of employees arriving and departing work, among many other improvements.

Lufthansa Chief Financial Officer Ulrik Svensson resigns

Lufthansa has released that Ulrik Svensson, Member of the Executive Board and Chief Financial Officer has informed the Chairman of the Supervisory Board of the company that he has to resign from his office for health reasons.

Svensson has announced that he will resign from his office and terminate his Executive Board activities with effect from next Monday, April 6, 2020. A predecessor has not been announced at this time.

Svensson has been a member of the Board of Directors since January 1, 2017. Prior to this, he had been responsible for the finances of the Swiss airline Swiss.

SPL_06 (2020-03-23)

BOC Aviation rounds up successful first-quarter 2020

In the first quarter of the year BOC Aviation has signed agreements to purchase 48 aircraft, of which 38 have already been placed on long-term leases with the remaining 10 unplaced A320neo due to be delivered in 2023-4. As of March 31, the company's balance sheet comprised liquidity of US$3.6 billion.

The company closed the first quarter with a total portfolio of 567 aircraft comprised of 323 owned, 40 managed and 204 on-order aircraft. BOC's owned portfolio remains one of the youngest in the industry with an average fleet age of 3.4 years and long average remaining lease term of 8.5 years. The company has achieved a 100% utilisation rate and 94% collection rate for the first quarter.

During the first quarter, BOC Aviation has raised an additional US$1.3 billion in financing from the loan and bond markets and repaid more than US$950 million of bonds on schedule under its Global Medium Term Note (GMTN) program. The company increased the limit of its GMTN program to U$15 billion from U$10 billion, which provides the flexibility to continue accessing the debt capital markets for its future funding needs and supports the growth of its business.  

United Technologies and Raytheon complete merger

Raytheon Technologies has successfully completed the all-stock merger of equals transaction between Raytheon Company and United Technologies Corporation on April 3, 2020, following the completion by United Technologies of its previously announced spin-offs of its Carrier and Otis businesses. Headquartered in Waltham, Mass., Raytheon Technologies is one of the largest aerospace and defense companies in the world with approximately US$74 billion in pro forma 2019 net sales and a global team of 195,000 employees, including 60,000 engineers and scientists.

Raytheon Company shares ceased trading prior to the market open on April 3, 2020, and each share of Raytheon common stock has been converted in the merger into the right to receive 2.3348 shares of United Technologies common stock. Upon closing of the merger, United Technologies’ name has changed to "Raytheon Technologies Corporation," and its shares of common stock have started trading on April 3, on the NYSE under the ticker symbol "RTX." United Technologies shareowners will continue to hold their shares of United Technologies common stock, which now constitute shares of common stock of Raytheon Technologies Corporation.


Airbus deploys A350-1000 aircraft in fight against COVID-19

Airbus continues to purchase and supply millions of face masks from China, the large majority of which will be donated to governments of the Airbus home countries, namely France, Germany, Spain and the UK.

An Airbus flight test crew has just completed its latest mission with an A350-1000 test aircraft. This is the third of such missions between Europe and China. The aircraft returned to France with a cargo of 4 million face masks on Sunday April 5.

The A350-1000 left Toulouse, France, on Friday April 3, reaching the Airbus site in Tianjin, China on April 4, and returning to Hamburg the same day.

Since mid-March, the previous two missions were performed by an A330-800 and an A330 Multi-Role Tanker Transport (MRTT). Airbus also deployed an A400M and its Beluga fleet to transport shipments of masks between its European sites, in France, Germany, the UK and Spain.

Airbus will continue to support the fight against the Coronavirus pandemic wherever possible.


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