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Monday, Febuary 1st, 2021

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China’s HNA Group starts bankruptcy reorganization proceedings

As a result of a petition from an unnamed creditor, the Hainan High People's Court has initiated bankruptcy reorganisation proceedings against HNA Group. "On January 29, 2021, HNA Group received a formal notice from the Hainan High People’s Court," the holding said in a statement.

"The main content of the notice is: a creditor has filed an application for the initiation of reorganization procedure against our company, on grounds that we cannot pay off due debts to the creditor."

The HNA Group owns a massive 2,300 companies and approached the province of Hainan for assistance back in February 2020 after its own “self-rescue” efforts had failed, after which the province set up a working group to establish a clearer picture of the Group’s assets and debts and took over the running of the Group. However, this latest move will not affect the aviation arm of the group, which comprises some 14 companies and 700 aircraft.

Shortly prior to HNA Group's announcement, Bloomberg reported that the Chinese government was planning to downsize the holding through the sale of all non-aviation assets via a trust. The group's airline businesses would then continue to operate albeit as state-owned entities. HNA Group's numerous creditors would then be offered either a stake in the trimmed-down, aviation-only holding, or participation in the proceeds from the trust-run sell-off. The plan has yet to be formalised.


ANA reports financial results for period ended December 31, 2020

ANA Holdings (ANA HD) has released its results for the financial period ended December 31, 2020. In the first nine months (April 1, 2020 - December 31, 2020) of fiscal year 2020 ANA has faced an unprecedented, worldwide and severe contraction, resulting from passenger demand which dramatically decreased by immigration restrictions and stay-at-home request in Japan.

Under these economic conditions, operating revenues decreased to 527.6 billion yen due to the severe impact across all segments. As a result, ANA HD implemented measures to cut costs by 473.0 billion yen through reducing fixed costs, in addition to reducing variable expenses by curbing the scale of operations. However, due to the extremely large reduction in operating revenues, operating loss was 362.4 billion yen, ordinary loss was 350.7 billion yen and net loss attributable to owners of the parent was 309.5 billion yen.

ANA HD recorded special losses of 76.0 billion yen for business transformation expense, due to large-scale retirement of aircrafts aimed at improving the revenue balance.

BAA Training Spain starts operations with brand-new Airbus A320ceo FFS

The first brand-new Airbus A320ceo Full Flight Simulator (FFS) starts being assembled this week, which will mark the beginning of BAA Training Spain operations. After all of the preparational works and auditing procedures are finalized, the FFS will be ready for training in March this year. The first groups of Type Rating pilot students will start training in March/April 2021.

The state-of-the-art Airbus A320ceo FFS manufactured by CAE is suited to meet the specific needs of carriers and is certified according to EASA requirements. It has the latest innovative Tropos 6000XR visual system, offering pilots an authentic visual feel. The device is also fully suited for completing the Upset Prevention Recovery Training.

No later than 2021, a total of five more simulators, in addition to the Airbus A320ceo, will be added.


Air Archipels orders cargo door equipped Beechcraft King Air 260C

Textron Aviation was awarded a contract by Air Archipels of Tahiti (French Polynesia) for one Beechcraft King Air 260 and one cargo door equipped King Air 260C aircraft. The aircraft are planned to be delivered to Air Archipels in the second half of 2021.

Air Archipels currently operates a fleet of Beechcraft Super King Air B200s in French Polynesia. The first cargo door King Air 260 was ordered by Air Archipels and it will be the first to enter service.

Air Archipels carries out 3,000 hours of flight per year, most of which are for medical emergency evacuations. Their new King Air 260C will be configured for the air ambulance mission incorporating a LifePort medical interior.

DAE announces early redemption of US$500 million 5.75% Senior Notes

Dubai Aerospace Enterprise (DAE) had delivered a notice of early redemption (the Redemption Notice) to the holders of the Company’s US$500 million 5.75% Senior Notes due 2023. The redemption date is scheduled for March 1, 2021. The outstanding principal amount as of the date of the Redemption Notice was approximately US$456.1 million.

The Notes will be redeemed in accordance with the terms and conditions of the applicable indenture at a redemption price equal to 102.875% of the principal amount of the Notes plus accrued and unpaid interest.

Wells Fargo Bank, N.A. is the trustee and paying agent for the Notes.


Bombardier closes sale of transportation business to become pure-play business jet company

Bombardier has confirmed the closing of the previously announced sale of its transportation business to Alstom.

Total proceeds to the vendors after the deduction of debt-like items and transferred liabilities are US$6.0 billion. After deducting la Caisse de dépôt et placement du Québec equity position of US$2.5 billion, transaction costs, and including the impact from closing adjustments and obligations related to achieving a minimum cash balance at Bombardier Transportation at the end of 2020, Bombardier expects net proceeds of approximately US$3.6 billion. This amount includes US$488 million of cash from the redemption of equity and a US$125 million loan reimbursement by Transportation, settled in conjunction with the transaction closing. Net proceeds also include approximately US$600 million of Alstom shares (€500 million representing 11.5 million shares for a fixed subscription price of €43.46 per share), monetizable starting in late April 2021.

“With this transaction now complete, Bombardier begins an exciting new chapter focused exclusively on designing, building and servicing the world’s best business jets,” said Éric Martel, President and Chief Executive Officer, Bombardier. “With an unmatched product portfolio, a world class customer services network and incredibly talented employees, we have a strong foundation to build upon as we use the proceeds from the transaction to begin addressing our balance sheet challenges through debt paydown.”

Pro-forma net debt is approximately US$4.7 billion, which includes long-term debt of US$10.1 billion, net of US$1.8 billion cash on hand at Bombardier (excluding Transportation) as of December 31, 2020, and the approximately US$3.6 billion proceeds from the transportation sale. The company intends to deploy available proceeds from the sale of transportation towards debt paydown and continues to evaluate the most efficient debt reduction strategies.

SIA Engineering Group records third-quarter FY 2020/21 net profit of SG$7.7 million

SIA Engineering Group has recorded revenue of SG$104.6 million for the third quarter of full-year 2020-21, SG$147.5 million lower year-on-year (-58.5%). Even as cost-cutting measures and grants from government support schemes remained, the reduction in Group expenditure of SG$132.5 million (-56.1%) could not fully offset the reduction in revenue. Consequently, the Group recorded a lower operating profit of SG$1.1 million (-93.2%) compared to SG$16.1 million in the same quarter last year.

Share of profits of associated and joint venture companies was SG$12.3 million, a reduction of SG$27.3 million (-68.9%) year-on-year. Contributions from associated and joint venture companies were similarly impacted by the reduction in flying hours and extended maintenance intervals, partially offset by cost saving measures and government support.

Net profit was SG$7.7 million for the quarter ended December 31, 2020, 85.7% lower than the same quarter last year.

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