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Monday, June 8th, 2020

Singapore Airlines secures S$10 billion in fresh liquidity

Singapore Airlines (SIA) has raised S$10 billion of liquidity through its recent Rights Issue, as well as a mix of secured and unsecured credit facilities. This puts SIA on a steady footing as it tackles the challenges posed by the global Covid-19 outbreak.

SIA secured S$8.8 billion in liquidity through the successful completion of the rights issue on June 5, 2020. A further S$900 million was raised through long term loans secured on some of SIA’s Airbus A350-900 and Boeing 787-10 aircraft.

In addition, the company has also arranged new committed lines of credit and a short term unsecured loan with several banks, which provide further fresh liquidity amounting to more than S$500 million.

Separately, all existing committed lines of credit that were due to mature during the course of 2020 have been renewed until 2021 or later, thus ensuring continued access to more than S$1.7 billion in liquidity.

During this period of high uncertainty, SIA will continue to explore additional means to shore up liquidity as necessary. For the period up to July 2021, the Company also retains the option to raise up to a further S$6.2 billion in additional mandatory convertible bonds, which will provide additional liquidity if necessary.

Atlas Air Worldwide appoints Lillian A. Dukes Senior Vice President, Technical Operations

Atlas Air Worldwide Holdings has named Lillian A. Dukes Senior Vice President, Technical Operations. Dukes will lead the company’s Technical Operations, overseeing all maintenance and engineering activities at the Company, and report to James A. Forbes, Executive Vice President and Chief Operating Officer.

She will have responsibility for management of the total technical operations function, ensuring the establishment and control of safety, technical, and airworthiness standards for the aircraft fleet and the related maintenance of test equipment and facilities.

SPL_04 (2020-01-17)

SWISS reports first-quarter operating loss of CHF84.1 million

As a result of the corona-virus pandemic and its unprecedented impact on the air transport sector, SWISS incurred an operating loss of CHF84.1 million for the first quarter of 2020 (which compares to an operating profit of CHF 48.3 million for the prior-year period). First-quarter revenues also declined to CHF923 million, some 20% below prior-year level (Q1 2019: CHF1.15 billion ).

SWISS  transported 21.4% fewer passengers in the first three months of 2020 than it had in the same period last year. First-quarter systemwide seat load factor amounted to 73.3%, a decline of 5.3 points.

No forecasts can currently be made of results for 2020 as a whole, in view of the still highly unpredictable nature of the present developments.

Nordic Aviation Capital to inject US$60 million of new equity into company

Proactively and in light of the COVID-19 pandemic, shareholders of Nordic Aviation Capital (NAC), the regional aircraft lessor, agreed to inject US$60 million (€53.5 million) of new equity into the company.

Separately, the company has had constructive discussions with its largest lenders over a possible debt standstill and deferral to counteract the negative impact that COVID-19 has had on the business and to ensure stability as the aviation market gradually recovers. In light of these discussions with lenders, the company has applied to the High Court in Dublin, launching a Scheme of Arrangement (the Scheme) under the Irish Companies Act.

If approved, the Scheme would be an agreement between NAC and its lenders to standstill and defer the payments of interest and principal on its borrowings, covering the next 6-12 months. It is a mechanism available under Irish law that allows solvent companies to implement arrangements with lenders. It requires court approval and the agreement of lenders voting in classes representing 75% by value and more than 50% by number.

NAC has entered the current global crisis in a strong liquidity position, having recently posted its strongest first-half financial performance to date. It has delivered 23 years of consistent profitability and growth. It owned 500 aircraft as of January 1, 2020 and had shareholders’ equity of US$1.8 billion at June 30, 2019.

As a result of the COVID-19 outbreak and the consequent unprecedented depression of demand for air travel, the NAC, in common with its peers, has encountered a large number of lessees deferring lease payments. As a result of this, the company has been liaising with lenders concerning the standstill and deferral of its debt obligations.

The long-term equity shareholders in NAC, EQT Partners, KIRKBI Invest, GIC (the sovereign wealth fund of Singapore) and Martin Moller, its founder and Chairman, have committed US$60 million of new equity as a signal of their confidence in the prospects for the business and their support for its strategy.


First companies sign up to EASA program to monitor COVID-19 operations in practice

The first aviation companies have signed up to the European Union Aviation Safety Agency’s (EASA) charter for the return to normal operations under COVID-19, pledging to work with their national authorities to put measures in place to support health safety – and to report back on their experiences to help other organisations with their real-life implementations.

Ten companies from across Europe declared they would abide by the guidelines developed by EASA and the European Centre for Disease Prevention and Control (ECDC) on request of the European Commission. The COVID-19 Aviation Health Safety Protocol is based on current scientific information about the spread of COVID-19 and the expert opinion of the two Agencies, and is designed to ensure safe travel for passengers and air personnel.

The first mover group comprises seven airport operators including: AENA, Athens International Airport S.A., Brussels Airport Company, Fraport AG, S.E.A. Aeroporti di Milano, Aéroport Nice Côte d'Azur and Paris CDG Airport and three airlines – Aegean Airlines, easyJet and Wizz Air.

The challenge now for these companies is to determine exactly how to implement the guidelines in their facilities and services so as to achieve the best possible compliance despite the operational

Primary recommendations of the guidelines are to observe physical distancing wherever possible, to wear a medical face mask throughout the journey and to practise scrupulous and frequent hand hygiene.

Passengers themselves are expected to take personal responsibility. For example, passengers who have COVID-19 compatible symptoms (fever, cough, sudden loss of smell, shortness of breath) or who are aware that they have come in contact with a COVID-19 case should not even travel to
the airport.

Eirtech Aviation Services receives Cayman Island CAMO approval

The Civil Aviation Authority of the Cayman Islands (CAACI) has approved Eirtech Aviation Services as a Continuing Airworthiness Management Organisation. This additional approval further increases the range of Eirtech’s CAMO services available to customers from aircraft airworthiness management and ARC recommendations for lease transition aircraft to supporting airlines and operator CAMO requirements.

Eirtech Aviation Services is an EASA Part M (Subpart G and Subpart I) approved CAMO organisation. Its team of expert and highly experienced CAMO personnel are available to provide CAMO support for aircraft on EASA, 2REG, IOMAR, Bermudan registrations and now also the Cayman Islands register.


Bombardier Aviation to reduce workforce by 2,500 employees

Bombardier Aviation will adjust its workforce to align with current market conditions reflecting the extraordinary industry interruptions and challenges caused by COVID-19.

When the pandemic first arose, Bombardier Aviation responded quickly, suspending manufacturing operations to support local government efforts to slow the spread of the virus and to protect the health and safety of employees, partners and customers. Over the past month, Bombardier
Aviation guided by health professionals and industry best practices, implemented comprehensive procedures and safeguards to further protect employees and communities as manufacturing operations resumed. Now with business jet deliveries, industry-wide, forecasted to be down approximately 30% year-over-year due to the pandemic, Bombardier must adjust its operations and workforce to ensure that it emerges from the current crisis on solid footing.

Accordingly, Bombardier Aviation has decided to reduce its workforce by approximately 2,500 employees. The majority of these reductions will impact manufacturing operations in Canada and will be carried out progressively throughout 2020. Bombardier’s worldwide customer service operations have continued to operate largely uninterrupted throughout the pandemic.

Bombardier expects to record a special charge of approximately CA$40 million in 2020 for this workforce adjustment and will provide further information on its market outlook when it reports its second quarter financial results on August 6, 2020.

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Tamar Jorssen
Vice President Sales & Business Development
Email: tamar.jorssen@avitrader.com
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