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Thursday, February 18th, 2021

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Ryanair to appeal EU ruling on state aid

To date, Ryanair, Europe’s largest low-cost carrier, has launched 16 lawsuits against the European Commission in relation to state aid it has allowed for individual carriers such as Lufthansa, KLM, Austrian Airlines and TAP, as well as national schemes that mainly benefit flag-carrying airlines.

Ryanair feels that what, to all intents and purposes, is financial aid to offset the cost of the COVID-19 pandemic, is discriminatory. However, the top European Court has declared such schemes which have benefited rivals such as SAS and Air France are not discriminatory, so Ryanair has announced that it will be taking the matter to the Court of Justice in the EU.

The court said the French and Swedish schemes were in line with the bloc's rules. "That aid scheme is appropriate for making good the economic damage caused by the Covid-19 pandemic and does not constitute discrimination," the court said, referring to the French scheme. Regarding the Swedish scheme, the court said: "The scheme at issue is presumed to have been adopted in the interest of the European Union."

Ryanair is challenging the European Commission for clearing a French scheme allowing airlines to defer certain aeronautical taxes and Sweden's loan guarantee scheme for airlines. In a statement following the ruling on Wednesday this week, Ryanair said it will now refer the matters to the Court of Justice of the EU. "We hope that the Court of Justice will overturn the European Commission's approvals of the French and Swedish schemes, to give airlines and consumers a glimmer of hope," the airline said.

A Ryanair spokesperson said that one of the EU's greatest achievements is the creation of a true single market for air transport, underpinned by the principle of a common EU airline license - one for each airline. "A nationality condition in a State aid scheme is plainly incompatible with the single market," the spokesperson added. "Ryanair is a truly European airline. We have no rich and powerful "home country" to subsidize us in times of trouble. Nor do we want discriminatory aid. Our instinct in a crisis is to seek efficiencies and cost savings, to offer more routes at lower fares - while remaining Europe's greenest airline," the airline added.

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Airbus posts consolidated full-year 2020 financial results

Airbus has reported consolidated full-year 2020 financial results.

Net commercial aircraft orders totalled 268 (2019: 768 aircraft) with the order backlog comprising 7,184 commercial aircraft as of December 31, 2020. Airbus Helicopters booked 268 net orders (2019: 310 units), including 31 NH90s for the German Bundeswehr in Q4 and 11 H160s. Airbus Defence and Space’s order intake by value increased 39% year-on-year to €11.9 billion, a book-to-bill above one, mainly driven by major contract wins in Military Aircraft. This included a contract signed in November to deliver 38 new Eurofighters for the German Air Force.

Consolidated order intake by value decreased to €33.3 billion (2019: € 81.2 billion) with the consolidated order book valued at €373 billion on 31 December 2020 (year-end 2019: €471 billion). The decrease in the value of the commercial aircraft backlog reflects the higher number of deliveries compared to order intake, the weakening of the US dollar and an assessment of the backlog’s recoverability. 

Consolidated revenues decreased to €49.9 billion (2019: €70.5 billion), driven by the difficult market environment impacting the commercial aircraft business with 34% fewer deliveries year-on-year. A total of 566 commercial aircraft were delivered (2019: 863 aircraft), comprising 38 A220s, 446 A320 Family, 19 A330s, 59 A350s and 4 A380s. During the fourth quarter of 2020, a total of 225 commercial aircraft were delivered including 89 in December. In 2020, Airbus Helicopters delivered 300 units (2019: 332 units) with revenues increasing by around 4%, benefiting from a favourable product mix and growth in services. Revenues at Airbus Defence and Space decreased by around 4%, mainly reflecting lower volume as well as the impact of COVID-19 on business phasing, mainly in Space Systems. 

Consolidated EBIT Adjusted totalled €1,706 million (2019: €6,946 million). This mainly reflects the weaker commercial aircraft performance, which was supported by a strong contribution from Airbus Helicopters and Airbus Defence and Space.

Consolidated net loss was €-1,133 million (2019 net loss: €-1,362 million). It includes the financial result of €-620 million (2019: €-275 million). The financial result largely reflects interest results of €-271 million, Repayable Launch Investment re-measurement impact in the other financial result of €-157 million, as well as a net €-149 million related to Dassault Aviation financial instruments. It also includes the impairment of the OneWeb loan, recognised in Q1 2020.

Consolidated free cash flow before M&A and customer financing amounted to €-6,935 million (2019: €3,509 million), including the payment of the compliance-related penalties of  €-3.6 billion in Q1 2020. The Q4 2020 free cash flow before M&A and customer financing of € 4.9 billion reflects the solid level of aircraft deliveries in the quarter, the good performance from Helicopters and Defence and Space, as well as a strong focus on working capital management. 

As the basis for its 2021 guidance, the company assumes no further disruptions to the world economy, air traffic, the company’s internal operations, and its ability to deliver products and services. The company’s 2021 guidance is before M&A. On that basis, Airbus targets to at least achieve in 2021 the same number of commercial aircraft deliveries as in 2020, EBIT Adjusted of €2 billion and breakeven free cash flow before M&A and customer financing.

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ORIX Aviation signs service agreement for package of 14 B737 MAX8 and B787-9 aircraft

ORIX Aviation Systems have been appointed as the exclusive remarketing agent in respect of a package of 14 aircraft, consisting of 12 B737 MAX-8 (LEAP 1B engines) and two B787-9 (Trent 1000 engines), on behalf of the secured financiers of the aircraft. All 14 aircraft are currently leased to Norwegian Air Shuttle.

ORIX Aviation was established in 1991 in Dublin, Ireland and is a 100% subsidiary of ORIX Corporation of Japan. ORIX Aviation owns and manages over 200 aircraft and leases them to more than 50 airlines located in over 30 countries.

ORIX Aviation is headquartered in Dublin with offices in Hong Kong and a team of over 100 professionals with a fleet value in excess of US$6.5 billion. ORIX Aviation is a 30% shareholder in Top 3 lessor Avolon.

Aviator expands market presence with SAS startups in Norway

Following a previously secured agreement with Scandinavian Airlines in late July 2020, Aviator Airport Alliance AB successfully launched the start-up of ground handling operations for the airline across multiple airports in Norway. Over the next five-year period, commencing February 1, 2021, Aviator will be the provider of ground handling and de-icing services for SAS at the airports in Bergen, Tromso and Kristiansand. These three new collaborations come as a valuable addition to the previously established SAS/Aviator partnership at Bardufoss airport.

As a full-range provider of aviation services across 15 airports in the Nordic region, the operational start-up of ground handling services provision by Aviator was initiated simultaneously at the three airports. The extensive preparation from Aviator to position its teams and equipment to meet the demand and relative size of SAS’ operations has resulted in the profound success of the start-up.

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Qantas to build new flight training center at Brisbane Airport

The Qantas Group has announced the future locations of its flight simulators, with pilots to be trained in Brisbane, Sydney and Melbourne.

The relocation has been triggered by the need for Qantas to move its current simulator center from Mascot in Sydney to make way for a major roads project. This process has subsequently formed part of the airline’s broader review of its property footprint, aimed at reducing its overall costs as it seeks to recover from the COVID-crisis.

The relocation will see Qantas, with support from the Queensland Government, build a new flight training centre at Brisbane Airport. Work to construct the new facility will begin in March with the first pilots due to commence training there from November 2021. The national carrier is also working with the NSW Government on plans for a Flight Training Center in Sydney, with at least four simulators and other training equipment to be permanently based in Sydney from 2023.

Qantas will expand its existing Flight Training Center in Melbourne to accommodate an additional four simulators and training equipment to ensure there is no disruption to training programs. Qantas Group Executive John Gissing said the changes were made possible through support from the state governments.

MTU Aero Engines reports net income of €294 million for 2020

MTU Aero Engines AG has presented its preliminary figures for 2020: revenue was €3,977 million, compared with €4,628 million in 2019. The operating profit was €416 million (2019: €757 million) and the EBIT margin was 10.5% (2019: 16.4%). Net income was €294 million in 2020, compared with €538 million in 2019.

“Our swift and decisive action in the face of the coronavirus crisis has paid off. We managed the challenges due to the coronavirus pandemic well and posted respectable earnings in 2020 despite the crisis,” said Reiner Winkler, CEO of MTU Aero Engines AG. “While our revenue was at the lower end of our target range in 2020 as a result of lower maintenance volumes and the unfavorable development of the dollar exchange rate, earnings were slightly above our forecast.”

Outlook

In 2021, the commercial maintenance business is expected to recover most clearly from the effects of the coronavirus crisis, with revenue growth of around 15 to 25%. Here, the revenue contribution from the Geared Turbofan™ should increase considerably. At the Capital Market Day in November 2020, MTU initially assumed revenue growth in the commercial MRO business in the twenty percent range. The commercial spare parts business is expected to post revenue growth in the low to mid single-digit percentage range. At the Capital Market Day, a slight rise in revenue was forecast for the commercial spare parts business. For the commercial series business, MTU is forecasting slight revenue growth. Until now, it had expected this business to make a stable revenue contribution. The military business has not been affected by the coronavirus crisis and should post further slight growth in 2021. Overall, MTU expects revenue to be between €4.2 and 4.6 billion. The adjusted EBIT margin should be between 9.5 and 10.5%. Adjusted net income is expected to develop in line with adjusted EBIT. The cash conversion rate, which shows the ratio of free cash flow to adjusted net income, is expected to be in the mid double-digit percentage range in 2021 (2020: 36%).

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Skyways Technics Asia extends workshops and capabilities

Skyways Technics A/S has announced that its fully owned subsidiary Skyways Technics Asia Sdn Bhd, established in Subang, Malaysia in 2014, has successfully extended its structural repair workshops and warehousing facilities to more than 3,000 m². The workshops’ surface area has tripled, with the installation of additional shops for sheet metal and composite works. Furthermore, the warehouse has doubled in size, increasing the space for both owned and consigned structural components that are available for loan, exchange and outright sale. The components also further support operators in AOG situations.

Skyways Technics Asia continues its focus on regional aircraft support and is now able to release structural repairs for all ATR interior, fuselage, wing, nacelle, and door items, with both EASA and CAAM certification. The scope includes sensitive components such as radomes, outboard and inboard flaps, and flight control surfaces (ailerons / elevators / rudders).

Amaury Parent, Regional Manager in charge of Skyways Technics Asia development, says: “This substantial capability addition is a natural step after the successful launch of our MRO operations in Malaysia two years ago – a launch that was greatly welcomed by operators, MROs, and lessors throughout the Asia-Pacific region”.

Going forward, the proximity and competitiveness of these unique capabilities in Asia are set to grow the level of regional support provided to the Asia-Pacific aviation industry. Skyways Technics is focused on the continued strong development and increase in workshop capabilities also as it regards more aircraft types and Civil Aviation Approvals from neighboring countries.

“We have a great setup established in Malaysia and a team of highly skilled and motivated employees that we want to do so much more with”, adds Regional Manager Amaury Parent. “We have a very strong relationship with and obligation towards amazing operators and lessors throughout Asia Pacific, with whom we believe we can bring further value with an increased offering of Skyways Technics Services. We really love what we do – we feel we just started and that the potential is fantastic”.

Benjamin Nielsen, CEO of Skyways Technics, also strongly believes in the resurrection of the aviation industry post-Covid-19 pandemic. “Having a regional presence in Europe, the Middle East, Asia, and the Americas, we currently see that the world and demand for our services are developing in different ways, depending on the present situation and level of restrictions. Since March 2020, the level of investment in aircraft (maintenance and spares) has been very low. However, regardless of whether the aircraft are flying or on the ground, several maintenance tasks are due ref. calendar times. So even with a post-COVID start that is relatively slow, there is a lot of accumulated maintenance that needs to be taken care of, and Skyways Technics is ready to support just that, when needed”.
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Tamar Jorssen
Vice President Sales & Business Development
Email: tamar.jorssen@avitrader.com
Phone: +1 (788) 213 8543
Tamar