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Tuesday, November 17th, 2020

Korean Air to acquire Asiana Airlines with major help from Korea Development Bank

Korean Air has announced its intention to acquire ailing Asiana Airlines (Asiana) despite strong protests from Asiana’s shareholders. Korea Development Bank (KDB) will be providing Korean Air with a loan of 800 billion won to help finance the deal. KDB is also a major creditor of Asiana. KDB hopes to finalize the deal by the year end, despite the concerns of many that major carriers are struggling to cope with the effects of the COVID-19 pandemic on the airline industry.

KDB will inject the capital into Hanjin KAL, the holding company of Korean Air's parent Hanjin Group. Korean Air will increase its capital of 2.5 trillion won through a new shares issuance next year. Hanjin KAL will purchase these shares worth 730 billion won using the KDB capital. Korean Air also plans to purchase Asiana shares and bonds worth 1.8 trillion won, as part of a last step in becoming the biggest shareholder of the nation's second-largest carrier.

"The new integrated airline will be able to secure competitiveness, and a reputation as the world's 10th largest carrier following the deal," KDB Chairman Lee Dong-gull said in an online press conference Monday. "The decision came amid growing calls for the KDB to take a more pre-emptive measure to salvage the aviation industry which has suffered the most damage from the prolonged coronavirus shock."

This latest deal to be put forward comes in the wake of the September collapse of Hyundai Development Company’s collapsed takeover bid. Asiana’s union is concerned that the latest deal could see a severe paring back of the carrier’s employees through organizational restructuring, though the Fair Trade Commission is unlikely to intervene on the grounds of the creation of a potential monopoly as this appears to be the only option available to save Asiana. (US$1.00 = 1,105 won at time of publication.)


BAA Training becomes first ENAC partner to provide flight training in Europe

Having passed the compliance audit, the BAA Training flight base in Lleida-Alguaire has received official approval from ENAC to carry out flight training for ENAC’s students. The consent to audit the BAA Training’s Spanish flight base was given to ENAC by Civil Aviation Authority (DGAC). ENAC acts as an ATPL and MPL pilot training provider for such airlines as Air France, China Eastern, Lao Airline, China Southern, Air Macau, and Royal Air Maroc.

Egle Vaitkeviciute, the CEO of BAA Training, acknowledges: “BAA Training is very proud of successfully building a partnership with ENAC - the leading aeronautics and aviation university in Europe. Receiving a flight training approval from ENAC, governed by the French Civil Aviation Authority, empowers BAA Training to work with major European and Asian airlines, such as Air France and others, and contribute to training their future pilots. Being a trusted flight training partner of ENAC reinforces our obligations to keep the highest training standards while delivering competency-based aviation training services.”

MTU Maintenance signs contract with new customer Air Serbia

MTU Maintenance and new customer Air Serbia have signed an exclusive V2500 engine maintenance repair and overhaul (MRO) contract. The six-year agreement covers MRO, engine trend monitoring and spare engine services for Air Serbia’s v-powered A319 and A320 aircraft fleet. 

The Serbian flag carrier was founded in 1927, and in 2020, has already flown to a total of 63 destinations across eastern and western Europe, the Middle East and North America. The airline is headquartered in Belgrade and operates a total of 21 aircraft including A330 for transatlantic flights. 


Diehl Aviation responds to long-term slump in sales, to cut 1,400 jobs

Aviation supplier Diehl Aviation, a leading supplier of cabin interiors and aircraft systems as well as related services, has presented a concept for its future positioning. The concept will assist the company in securing its leading position in the aviation industry.

Diehl Aviation is commencing implementation of a future-oriented project with the objective of  providing the division by the end of 2022 with an economically sustainable and future-oriented cost structure, through restructuring and an innovation campaign. Since the spring of 2020, the aviation industry has suffered a slump in demand by about half due to the fall-out from the corona pandemic. Airlines and aircraft manufacturers assume that it will take years to get to back to pre-crisis levels.

Due to the fall-out from the corona pandemic Diehl Aviation expects that the business volume in 2022 will be slightly more than half of 2019 sales levels. In its concept for the future, the company plans to retain all of its sites in Germany and to employ around 4,000 people worldwide and 3,000 people in Germany. Following a peak in employment in 2019 with around 6,000 employees and steps to improve flexibility already implemented since then, this corresponds to a reduction of up to 1,400 jobs in Germany by 2022. Lay-offs due to restructuring should be avoided to the extent possible by taking socially acceptable steps, including partial retirement, volunteer program, intra-group job portal, etc.

This will affect all divisions, sites and companies, albeit to varying degrees and to a different extent. These measures will enable Diehl Aviation to reverse the trend by 2022 and to return to profitability by 2023.

Moreover, Diehl Aviation will develop new products and get involved in new projects. Among other things, these include product innovations for touchless cabin functions in commercial aircraft, entering the Urban Air Mobility (UAM) market segment as well as taking part in the multi-national military Future Combat Air System (FCAS) project and also the development of sustainable lightweight materials as well as systems for flying with zero emissions.


Boaz Levy appointed Chief Executive Officer of IAI

Israel Aerospace Industries (IAI) Board of Directors has approved the search committee's recommendation to nominate Boaz Levy as IAI's Chief Executive Officer (CEO). Levy succeeds Maj. General (ret.) Nimrod Sheffer, who stepped down as CEO on October 31, 2020.

The nomination will be submitted to the Minister of Defense, Lt. General (ret) Benjamin Gantz, and the Minister for Cyber & National Digital Matters, Dudi Amsalem who supervising the Israel Government Companies Authority.

Spirit Airlines brings back international service from Orlando with six routes launching in December

 Spirit Airlines will head back to Latin America from Orlando just in time for the holidays. The Florida-based carrier is re-launching six nonstop international routes. It marks the first time Spirit’s bright-yellow planes will fly internationally from Central Florida since border closures began in March.

Spirit plans to reintroduce Latin American destinations from Orlando International Airport (MCO) gradually throughout the month of December, beginning with service to Colombia and Honduras. Within weeks, the airline will add Mexico, Guatemala and El Salvador along with additional Colombian flights.

In the Caribbean, people travelling to Puerto Rico will have more options at the beginning of 2021. Spirit plans to reactivate its service to Aguadilla (BQN) once the airport re-opens in January. Daily flights to the island’s north-western tip will complement Spirit’s existing service to San Juan (SJU), which runs up to five times each day.


Qatar Airways to become launch customer for Panasonic's ECOFM 10" IFE upgrade

Panasonic Avionics (Panasonic) has announced Qatar Airways as the launch customer for its new EcoFW 10” inflight entertainment (IFE) upgrade program.

The seatback IFE monitors on the airline’s fleet of 37 Boeing 777 aircraft will be updated with Panasonic’s new EcoFW 10” monitor upgrade - creating a next-generation HD passenger experience while extending the life of the fleet’s IFE system, and reducing operational costs.

Panasonic’s IFE upgrade program, which can be achieved on an aircraft during routine overnight maintenance, includes the installation of a new passenger entertainment server.

This provides passengers with a wider range of content and helps to modernize the airline’s offering and keep up-to-date with the demands of changing consumer preferences. This also enables the airline to achieve faster media loading times – all without any increase in weight, and with dramatically improved reliability levels.

The first aircraft from Qatar Airways’ 777 fleet has completed its IFE upgrade this week.


Airstream arranges Bombardier DHC-8-311 sale

Aircraft remarketing specialists Airstream International Group are pleased have arranged the sale of a Bombardier DHC-8-311 aircraft on behalf of a US Investor.

MSN 527 will be converted to a freighter and is the third aircraft that Airstream has placed with Air Inuit with the relationship dating back to 2012.

Airstream has been very active placing DHC-8 aircraft, successfully arranging the sale or lease of 30 Bombardier aircraft in the last 5 years.

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Tamar Jorssen
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Email: tamar.jorssen@avitrader.com
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