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Thursday, October 29th, 2020

More jobs to go at Boeing as planemaker posts fourth consecutive quarterly loss

In April Boeing announced its intentions to reduce its 160,000-strong workforce by 10%. Following the fourth consecutive quarterly loss, the company’s CEO, Dave Calhoun, announced that by the end of 2020 Boeing’s workforce will be reduced to 130,000, cutting job numbers by 14,000 more than anticipated.

“As we align to market realities, our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our company,” Calhoun said in a staff note. “We anticipate a workforce of about 130,000 employees by the end of 2021. Throughout this process, we will communicate with you every step of the way.”

The current struggles have resulted from two separate problems, the COVID-19 pandemic and the continued grounding of the MAX 737. The company reported negative free cash flow of US$5.08 billion, better than analysts’ estimates and an improvement on the previous quarter’s negative US$5.6 billion, according to FactSet. “While we’re still aiming to turn cash positive in late ’21, the recovery and the continued elevated virus cases make the path much more challenging,” said Boeing’s CFO, Greg Smith, on an earnings call. “Based on what we know today, it’s looking more likely that we will be cash flow positive in the 2022 timeframe.”

Boeing showed a net loss of US$466 million in the third quarter compared to a profit of US$1.2 billion in 2019. Sales generated US$14.1 billion, down 29% from a year ago but slightly ahead of analysts’ expectations for US$13.9 billion in revenue. Sales declines were heaviest in the commercial aircraft unit where revenue fell 56% from US$8.2 billion in the third quarter of 2019 to US$3.6 billion this year.

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Aviation Concepts Technical Services achieves 8A/8C check on Gulfstream fleet

Philippines-based Aviation Concepts Technical Services Inc. (ACTSI) has upgraded its capability to 8A/8C from the Federal Aviation Administration (FAA). With a strong and experienced Gulfstream team, the ACTSI MRO is now capable to provide maintenance services for Gulfstream IV-X (G350/G450) and GV-SP (G500/G550), with Limited Engine - 8A / 8C, 72-month, 96-month, and 144-month inspections.

ACTSI, a new facility for aviation maintenance, repair, and overhaul (MRO) services, recently opened at the Subic Bay International Airport (SFS/RPLB), is transforming the former US Navy base into a 24/7 hub for business aviation in the Asia Pacific. Strategically located within an 18,000 m² hangar, ACTSI is to become a premier parking and MRO service provider for business jets within the region which can easily match OEM and client standards.

MTU Aero Engines presents nine-month figures and forecast

In the first nine months 2020, MTU Aero Engines AG generated revenue of €2,956.6 million (1-9/2019 €3,403.7 million). The operating profit was €310.8 million, compared with €557.7 million in the prior-year period. The EBIT margin was 10.5% (1-9/2019: 16.4%). In line with adjusted EBIT, adjusted net income dropped from €391.7 million to €219.2 million.

“Based on these results, we can now provide a more precise guidance for the full year,” said Reiner Winkler, CEO of MTU Aero Engines. “We now assume that revenue for the year will be between €4 and €4.2 billion. Our adjusted EBIT margin is likely to be around 10%, which is at the upper end of the range forecast to date.” At the end of July, MTU forecast a broader revenue range of €4 to €4.4 billion and assumed an adjusted EBIT margin of between 9% and 10%. The company expects adjusted net income to develop in line with adjusted EBIT.

MTU registered a substantial drop in revenue in the first nine months of 2020 especially in the commercial engine business, where revenue fell from €1,137.8 million to €850.2 million. The highest revenue generators were the PW1100G-JM for the A320neo and the V2500 for the classic A320 aircraft family. Over the year as a whole, the organic decline in revenue is likely to be in the mid-to-high twenties in the commercial series production business and the high twenties in the spare parts business.

Revenue from the commercial maintenance business was €1,866.3 million in the first nine months of 2020, compared with €1,995.9 million in the same period the previous year.

The order backlog at the end of the quarter was €18.8 billion (December 31, 2019: €19.8 billion). “This still represents a high level and arithmetically secures our capacity utilization for more than four years,” said CFO Peter Kameritsch. The majority of these orders are for the V2500 and the Geared Turbofan™ engines of the PW1000G family, especially the PW1100G-JM.


Volocopter and Lufthansa Industry Solutions cooperate to build VoloIQ

Volocopter, the pioneer in Urban Air Mobility (UAM), has announced a cooperation with Lufthansa Industry Solutions. Together they are building Volocopter’s proprietary intelligent and integrated “Urban Air Mobility Software Platform” that will run on Microsoft Azure: VoloIQ. It offers complete digital visibility of the complex UAM ecosystem in real-time.

Using artificial intelligence, VoloIQ will enable amongst others:
  • Global scale air taxi operations,
  • seamless customer service (such as simple booking) and integration with smart cities, existing mobility providers, and new services
  • Increase safety and efficiency, decrease costs, and ensure a reliable and smooth user experience off- and online
  • optimized aircraft utilization and an increased lifetime for individual components
Urban Air Mobility connects the complete ecosystem of city authorities, existing mobility options e.g. public transportation and ride hailing, flight and ground operations, as well as customer facing services. VoloIQ will process information of all participating components in the ecosystem and make them and their interdependencies digitally visible at all times.

“VoloIQ is the digital backbone for enabling the whole Volocopter Urban Air Mobility Services ecosystem and serves as the brain for our air taxi services. Using big data, it will continuously improve efficiency and have a significant positive impact on our customer service quality,” says Florian Reuter, CEO of Volocopter. “We selected Lufthansa Industry Solutions because of their leading know-how in certified aviation processes and large-scale aircraft operations. I am very much looking forward to the exciting outcomes of this cooperation.”

“Digital platforms and integrated solutions are the key to scale operations globally. They allow a seamless connection between existing ecosystems and new services,” says Bernd Appel, Managing Director of Lufthansa Industry Solutions. “We look forward to being part in this newest sector of aviation. With our vast knowledge and experience we will build a unique solution for Volocopter, bringing to life the VoloIQ.”


Spirit Airlines posts third-quarter net loss of US$99.1 million

Spirit Airlines has reported total operating revenue for the third quarter 2020 of US$401.9 million, a decrease of 59.5% year over year as demand for air travel remains depressed due to the COVID-19 pandemic. Based on current demand and level of operation assumptions, Spirit estimates its fourth quarter total operating revenue will be down approximately 43 to 45% year over year.

The Company continues to experience a significant decline in demand due to COVID-19. Load factor for the third quarter 2020 was 68.1% on a year-over-year capacity decrease of 33%.

For the fourth quarter 2020, Spirit estimates its capacity will be down approximately 25% year over year. On a monthly basis, Spirit estimates its capacity for October will be down approximately 36% and that November and December will both be down about 20% compared to the same periods last year.

For the third quarter 2020, total GAAP operating expenses, including US$148.3 million of special items, were US$501.4 million, a decrease of 42.2%, year over year. Adjusted operating expenses for the third quarter 2020 were US$649.7 million, a decrease of 24.3% year over year. These changes were primarily driven by a 62.9% decrease in aircraft fuel expense due to decreases in both fuel rate and volume.

Spirit reported a net loss of US$99.1 million for the third quarter of 2020 and ended the quarter with unrestricted cash, cash equivalents, and short-term investment securities of US$2.1 billion.


GA Telesis Engine Services appoints Randy Harker Sales Director - Americas

GA Telesis Engine Services OY (GATES) has appointed Randy Harker as Sales Director Americas. As part of the company’s Turbine Vision 2020
(TV 2020) strategy, GATES is stepping up its global presences with both talent and strategic operations.

Harker is one of several industry pros to join GATES as the scope of TV 2020 grows. He will be responsible for the North and South American markets and brings nearly 20 years of sales experience with extensive knowledge of the aircraft engine repair business.

Before joining GATES, he was with GE Aviation for 13 years, where he held various positions encompassing component repair, engine shop visits, Used Serviceable Materials (USM), and fleet engine sales.


FL Technics Engine Services quick turn activities’ shop opens doors

FL Technics Engine Services has received Part-145 approval from the Transport Competency Agency of Republic of Lithuania (TCA) approved by the European Union Aviation Safety Agency (EASA) for its engine MRO quick turn activities. The new facility will provide airlines, lessors and asset management organizations with high quality tailor-made solutions for aircraft engine life cycle’s optimization.

The quick turn engine shop will allow customers to optimize their engines’ Time on Wing (ToW), simultaneously optimizing and minimizing costs using the full scope of FL Technics Engine Services and FL Technics one-stop MRO services.

This brand new fully authorized 3-bay quick-turn activities engine shop will cover three main generations of CFM International CFM56 engines namely CFM56-3, CFM56-5B and CFM56-7B that power the Boeing 737 Classic, Airbus A320ceo and Boeing 737 Next Generation (NG) aircraft families, respectively. FL Technics Engine Services is the first approved Part-145 Engine Maintenance Organization for Turbofan Commercial Engine Repair in Lithuania.

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