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Tuesday, May 5th, 2020

13,000 jobs to go as GE Aviation cuts workforce by up to 25%

General Electric Co (GE) has confirmed that in 2020 it intends to reduce its aviation sector workforce by 25%, which equates to the loss of approximately 13,000 jobs. The cuts will include both voluntary and involuntary layoffs, the company citing the knock-on effects of the COVID-19 pandemic for the drastic action.

With American passenger air travel demand having plummeted by 95% and a general consensus that little will change until 2021, along with it likely taking many more years before travel returns to 2019 levels, GE has joined the ranks of Boeing Co which announced last week that it was reducing its workforce by 10%, which equates to approximately 16,000 jobs, while Spirit AeroSystems Holdings is to cut a further 1.450 jobs in Kansas.

The announcement includes the 10% cut in workforce announced in March as part of a US$3 billion cost-cutting and cash-saving exercise at GE Aviation. According to GE Aviation’s chief executive, David Joyce, the “deep contraction of commercial aviation is unprecedented, affecting every customer worldwide. Global traffic is expected to be down approximately 80% in the second quarter.”

GE Aviation had previously invoked furloughs covering roughly 50% of its maintenance, repair and overhaul workforce and new engine production. To date, neither GE nor Boeing have applied for U.S. government assistance from the US$17 billion treasury fund.


Startup Cascadia Air launches amid COVID-19

Cascadia Air, British Columbia’s newest commuter airline has opted to forego the launch of its commercial air-taxi flights to instead provide Rapid Emergency Air Delivery (READY) services, to support smaller remote communities across BC, as they slowly recover from the social and economic disruptions caused by COVID-19.

With more than three decades of commercial aviation, medical, air ambulance and crisis management experience, the airline’s senior staff began these initiatives in late February with the goal of supporting BC residents during one of the most challenging periods in recent history.

Cascadia Air’s READY services comprise separate aircraft dedicated to carrying personnel and cargo supplies capable of landing in remote communities and smaller unpaved airstrips. Flights transporting essential personnel are maximized at 60% of the aircraft’s seating capacity to allow for continued safe distancing between passengers.

Boeing rolls out first Loyal Wingman unmanned aircraft

A Boeing-led Australian industry team has presented the first unmanned Loyal Wingman aircraft to the Royal Australian Air Force.

The aircraft, which uses artificial intelligence to extend the capabilities of manned and unmanned platforms, is the first to be designed, engineered and manufactured in Australia in more than 50
years. It is Boeing’s largest investment in an unmanned aircraft outside of the United States.

As the first of three prototypes for Australia’s Loyal Wingman Advanced Development Program, the aircraft also serves as the foundation for the Boeing Airpower Teaming System (ATS) being developed for the global defense market.

The Loyal Wingman prototype now moves into ground testing, followed by taxi and first flight later this year.


Qantas secures further AU$550 million in debt funding

The Qantas Group has secured a further AU$550 million in funding against three of its wholly-owned Boeing 787-9 aircraft. This follows the AU$1.05 billion raised in March against seven Boeing 787-9 aircraft.

Net debt is now within the middle of the target range, at AU$5.8 billion. The Group has no financial covenants on any existing or new debt facilities and no significant debt maturities until June 2021.

The Group has sufficient liquidity to respond to a range of recovery scenarios, including one where the current trading conditions persist until at least December 2021. The Group currently has AU$2.7 billion in unencumbered aircraft assets and can raise funds against these if required.

At the start of the crisis, the Group acted quickly to wind down cash burn through employee stand downs, a pause on virtually all capital and operating expenditure, and revised agreements with key suppliers. As a result, and based on current conditions, the Group expects to reach a net cash burn rate of AU$40 million per week by the end of June 2020.

Since the last cash balance update in March, the Group has seen outflows including a AU$250 million bond repayment, elevated levels of annual leave payments from standing down more than 25,000 employees ahead of the JobKeeper program starting, and payment of bills from its pre-crisis levels of flying activity.

As at close of business May 4, 2020, total short-term liquidity stands at AU$3.5 billion, including a AU$1 billion undrawn facility.


Fokker Techniek expands support to customers with 20+ additional parking spots

Fokker Techniek, a business of GKN Aerospace, has expanded its current operations with additional aircraft parking spaces during the current challenging period. The Completion and Maintenance facility in Woensdrecht, the Netherlands, has implemented reinforced cleaning and disinfection of the infrastructure, tooling and equipment, as well as adopting appropriate social distancing measures, to ensure that employee welfare and customer support remains top priorities.

Jeff Armitage, the company’s Managing Director said: “Our paramount focus is to keep our employees, their families and customers safe. We are fully aligned with the Governmental restrictions and guidelines and we are proud to see that our staff here at Fokker Techniek continues to be very supportive to secure and fulfill all ongoing work commitments. On top of the existing infrastructure and parking spots we have introduced another 20+ aircraft parking positions, which are immediately available to support our customers. We are in this together and we want to remain a solid partner providing services in these unprecedented times.”

Fokker techniek offers engineering, airframe and component maintenance activities, as well as
executive VIP completions or refurbishments to the global aerospace industry.


Airbus and Koniku embark on disruptive biotechnology solutions

Airbus and Koniku Inc. have made a significant step forward in the co-development of a solution for aircraft and airport security operations, by extending research activities to include biological hazard detection capabilities, as well as chemical and explosive threats.

The disruptive biotechnology solution, which was originally focused on the contactless and automated detection, tracking and location of chemicals and explosives on-board aircraft and in airports, is now being adapted, in light of the COVID-19 crisis, to include the identification of biological hazards.

Based on the power of odor detection and quantification found in nature, the technical solution, developed to meet the rigorous operational regulatory requirements of aircraft and airport security
operations, uses genetically engineered odorant receptors that produce an alarm signal when they come into contact with the molecular compounds of the hazard or threat that they have been programmed to detect.

Airbus and Koniku Inc. entered into a cooperation agreement in 2017, leveraging Airbus’ expertise in sensor integration and knowledge of ground and on-board security operations within the aviation and defense industries as well as Koniku’s biotechnology know-how for automated and scalable volatile organic compound detection (via their Konikore™ platform).


Aero Norway invests in five more CFM56-3 engines

Aero Norway, the independent engine MRO provider, has invested in five more CFM56-3 engines which it will introduce into the refurbish and sell program. The original plan was to undertake a total of six refurbish and sell CFM56-3 engines for 2020 however to support its customers and fill the slots caused by deferred -5B/-7B workscopes caused by COVID-19, five more CFM56 -3 engines have been added to its portfolio.

Throughout March and April, the Company has inducted mostly CFM56-3 engines for repair and overhaul as the COVID-19 pandemic has seen operators of the classic freighters burn more hours than ever before to support today’s increased cargo demand. It will continue to do so throughout this year as engine maintenance requirements from freighter customers are set to increase, and the acquisition of five serviceable engines will help these operators sustain seamless flight manoeuvres.

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BOC Aviation appoints CCO Europe, Americas and Africa

BOC Aviation has appointed Paul Kent as Chief Commercial Officer (Europe, Americas and Africa), with effect from June1, 2020. He will be based in London and will report directly to Robert Martin, Managing Director and Chief Executive Officer.

Kent will be taking over from Steven Townend, who will step down from his current role as Chief Commercial Officer (Europe, Americas and Africa) from June 1, 2020, and will start in his new role as Deputy Managing Director and Chief Financial Officer with effect from October 1, 2020. In the interim, Townend will support a smooth transition of his existing role to Kent.

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Tamar Jorssen
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Email: tamar.jorssen@avitrader.com
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