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Tuesday, October 20th, 2020

PIMCO and GECAS to create US$3 billion aviation leasing investment platform

Investment Management PIMCO and GE Capital Aviation Services (GECAS), have reached a preliminary agreement to develop an aviation leasing platform to support up to US$3 billion in aircraft asset financings. The transaction is subject to customary closing conditions and receipt of required regulatory approvals.

This strategic investment platform will enable GECAS and PIMCO­-advised accounts to acquire new and young fuel-efficient aircraft to meet the needs of a diverse set of global airlines over many years.

The platform looks to provide much-needed financing for airlines which are looking to upgrade their fleets with young and new aircraft. The portfolio will initially focus on narrow-body aircraft while allowing flexibility to invest in attractive opportunities in the wide-body market. PIMCO and GECAS will consider a range of investment criteria including an airline’s assets and credit quality and also geographic factors.

PIMCO is already one of the world’s largest investors in aviation-backed debt and its presence in aviation financing markets combined with GECAS’ leadership role in the aircraft-leasing segment will provide this joint platform enormous flexibility to provide funding to the global airline industry. GECAS will source transactions for the platform, act as servicer and provide asset management services for the platform.

SRT_09 (2020-10-05)

Alaska Airlines launches Embraer 175 jet service in the state of Alaska

Alaska Airlines has added jet service on the Embraer 175 aircraft in the state of Alaska. The E175, operated by regional partner Horizon Air, serves select markets in Alaska.

With the reduction of air service in Alaska earlier this year, the E175 jet gives Alaska Airlines the flexibility to increase daily frequency between Anchorage and Fairbanks, and to provide year-round service to King Salmon and Dillingham.

At 76 seats, the E175 is the ideal size for many communities where larger jets are not the best option throughout the year. With no middle seats, the regional jet is configured with 12 seats in First Class, 12 in Premium Class and 52 in Main Cabin.


Frontex selects Airbus and partner IAI for Maritime Aerial Surveillance

The European Border and Coast Guard Agency (Frontex) has awarded a contract to Airbus Defence and Space Airborne Solutions (ADAS), a 100% subsidiary of Airbus Defence and Space, and its long-term partner Israel Aerospace Industries (IAI) to operate a Medium Altitude Long Endurance (MALE) RPAS for Maritime Aerial Surveillance services.

The service will be delivered in Greece, and/or Italy and/or Malta within a framework contract. The service includes the provision of a RPAS platform, payload, communication equipment and capacity, mission storage and all necessary experts managing the system and providing operational support. Under the contract, Airbus and IAI will provide the service for pre-planned assignments as well as for ad-hoc calls.

The maritime Heron RPAS from IAI serves a range of customers worldwide and is a part of the well-known "Heron family” which accumulates over 450,000 flight hours, day and night missions under all weather conditions. The system is capable of flying more than 24 hours in full operational configuration and creates a comprehensive, real time, naval picture in geographical areas for potential surveillance interests, e.g. in the context of coordinated European monitoring activities.


U.S. exceeds 1 million airline passengers screened on October 18th

For the first time since March this year, over one million airline passengers were screened on Sunday, October 18, though the exact total of 1.03 million still saw a 60% reduction in passenger numbers when compared to the same period last year. While 1.26 million passengers were screened on March 16, that figure dropped to a low of 87,000 for one single day in April.

U.S. carriers are currently burning through cash at a rate of US$5 billion each month and since the previous payroll program ceased on September 30, there has been little sign of Congress approving a US$25 billion bailout that would keep 32,000 airline employees on the payroll for a further six months.

Recently American Airlines was forced to furlough 19,000 employees, while United Airlines has furloughed 13,000 employees. Democrats and Republicans on both the House and Senate committees have been struggling to reach agreement on a standalone airline bill and it looks increasingly unlikely any meaningful progress will be made prior to the forthcoming election.

A4A (Airlines for America) which represents American Airlines, United and Delta Air Lines, has calculated that passenger volumes are down 79% internationally and 62% domestically, adding that U.S. carriers are operating at a 48% reduction in flight numbers with nearly one-third of their fleets lying idle.


AvAir completes full asset management contract with Icelandair

AvAir, an inventory solutions provider for the aviation aftermarket, has partnered with Icelandair on a full asset management contract for all surplus materials including a variety of Boeing parts.

Icelandair has been in operation for 83 years and has more than 44 destinations, 524 connections and 4.4 million passengers traveling internationally. Icelandair Group’s fleet comprises 51 aircrafts with 34 attributed to Icelandair.

With this transaction, AvAir has added a wide range of Boeing aircraft material to its inventory including 757, 767, 737NG and 737MAX. The parts will be stored in AvAir’s Dublin facility with many parts already in stock and more to arrive soon.

SkyWorks releases Leasing and Asset Management Group activities

SkyWorks Holdings has released transactions and activities performed during the third-quarter 2020. Leasing and Asset Management Group activities included the completion and repossession of 17 aircraft, including 11 A321-200s, four 787-9s and two A350-900s on behalf of a group of bondholders in the LATAM 2015-1 EETC.

On behalf of a US-based financial institution, SkyWorks has managed the lease return of two DHC8-300s from Jazz Aviation and the subsequent sale to a U.S. investor. On behalf of a Middle Eastern-based leasing company, SkyWorks arranged the sale of one A321 on lease to British Airways to an Ireland-based lessor and arranged the sale of three A300F4-605R aircraft on behalf of a US-based investor.

Furthermore SkyWorks continues to work with Copa Airlines on the sale of up to 20 737-700/800 aircraft.


Finnair cuts approximately 700 jobs, long-term temporary layoffs continue for thousands of employees

Finnair has completed the co-operation process started in September on its plans to reduce up to 1,000 jobs, to make other structural changes and to implement additional temporary layoffs due to the impacts of the corona pandemic. Due to the dramatic market changes caused by the pandemic, Finnair cuts approximately 600 jobs in Finland. The redundancies will be implemented by the end of March 2021. The co-operation process concerned all Finnair employees in Finland except for cabin and cockpit crew, altogether 2.800 employees.

Similar discussions have been held outside Finland, and redundancies outside Finland amount to approximately 100 jobs. In total, Finnair currently employs approximately 6.500 employees.

In addition to the redundancies, Finnair continues temporary layoffs impacting most of its employees in Finland. For many, the temporary layoffs may continue for a long time as the recovery of aviation will take several years according to the industry estimates.

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Tamar Jorssen
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Email: tamar.jorssen@avitrader.com
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