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Wednesday, March 3rd, 2021

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China still not ready to re-certify 737 MAX while COMAC C919 production nears lift-off

China’s Civil Aviation Administration (CAAC) remains one of the last major markets to withhold re-certification of the Boeing 737 MAX, with no clear indication being given of any anticipated timeline for the troubled jet to return to its skies.

China was one of the first countries to ground the 737 MAX after two fatal crashes, the first involving Lion Air and the second involving Ethiopian Airlines. China has indicated it wants to examine and approve all changes to the 737 MAX software, while also having its pilots retrain on the new software, prior to awarding re-certification. Additionally, China wants investigations into the causes of the Ethiopian and Indonesian crashes to be completed prior to re-certification. This would be a major blow for Boeing, though investigators in Ethiopia have indicated that the final report could be issued on the second anniversary of the crash, which is March 10.

China’s three largest carriers Air China, China Southern, and China Eastern, operate the 737 MAX, as do ten other Chinese airlines. Combined, Chinese airlines accounted for a quarter of current MAX sales prior to its grounding. With the 737 MAX having returned to the skies in the U.S., Europe, Australia, Brazil, and Saudi Arabia, China is yet to confirm when it will carry out final testing so that recertification can take place.

This will be an anxious time for Boeing as production of the jet was wound down prior to re-certification, and deliveries are now behind schedule, while every effort is currently being made to get China’s COMAC 919 into production. It may be that as Chinese carriers look to recover from a very difficult year in 2020, they will turn to their home-grown jet. Boeing has estimated the Chinese market over the next twenty years stands at approximately 8,500 jets for an approximate value of US$1.4 trillion in sales.

Correction: In yesterdays leading article it was not made clear that CAE was acquiring only the military training division of L3Harris Technologies. The article has been amended for greater clarification and we apologise to readers, CAE, and L3 Harris Technologies for the erroneous reporting.

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January passenger demand falls further

The International Air Transport Association (IATA) announced that passenger traffic fell in January 2021, both compared to pre-COVID levels (January 2019) and compared to the immediate month prior (December 2020).

Because comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted all comparisons are to January 2019 which followed a normal demand pattern. Total demand in January 2021 (RPKs) was down 72.0% compared to January 2019. That was worse than the 69.7% year-over-year decline recorded in December 2020. Total domestic demand was down 47.4% versus pre-crisis (January 2019) levels. In December it was down 42.9% on the previous year. This weakening is largely driven by stricter domestic travel controls in China over the Lunar New Year holiday period.

International passenger demand in January was 85.6% below January 2019, a further drop compared to the 85.3% year-to-year decline recorded in December.

Asia-Pacific airlines’ January traffic plummeted 94.6% compared to the 2019 period, virtually unchanged from the 94.4% decline registered for December 2020 compared to a year ago. The region continued to suffer from the steepest traffic declines for a seventh consecutive month. Capacity dropped 86.5% and load factor sank 49.4 percentage points to 32.6%, by far the lowest among regions.

European carriers had an 83.2% decline in traffic in January versus January 2019, worsened from an 82.6% decline in December compared to the same month in 2019. Capacity sank 73.6% and load factor fell by 29.2 percentage points to 51.4%.

Middle Eastern airlines saw demand plunge 82.3% in January compared to January 2019, which was broadly unchanged from an 82.6% demand drop in December versus a year ago. Capacity fell 67.6%, and load factor declined 33.9 percentage points to 40.8%.

North American carriers’ January traffic fell 79.0% compared to the 2019 period, up slightly from a 79.5% decline in December year to year. Capacity sagged 60.5%, and load factor dropped 37.8 percentage points to 42.9%.

Latin American airlines experienced a 78.5% demand drop in January, compared to the same month in 2019, worsened from a 76.2% decline in December year-to-year. January capacity was 67.9% down compared to January 2019 and load factor dropped 27.2 percentage points to 55.3%, highest among the regions for a fourth consecutive month.

African airlines’ traffic dropped 66.1% in January, which was a modest improvement compared to a 68.8% decline recorded in December versus a year ago. January capacity contracted 54.2% versus January 2019, and load factor fell 18.4 percentage points to 52.3%.

Mesa Air Group eyes international growth

Mesa Air Group has entered into a conditional agreement with Gramercy Associates based in London, England, to develop a European-based joint venture. The joint venture will apply for a new Air Operator’s Certificate (AOC) in the European Union using CRJ-900 aircraft with the goal of introducing a Capacity Purchase Agreement or ACMI (Aircraft, Crew, Maintenance, and Insurance) in passenger or cargo services in Europe. Gramercy Associates is headed by Tony Davis, former CEO of Tiger Airways and bmibaby.

Under the agreement, Mesa will own 49% of the partnership once the Air Operator’s Certificate is obtained. The current plan is to begin operations by the end of 2021.

“We are very excited at the potential to expand our regional business overseas. As Mesa continues to diversify, we are looking forward to working with Gramercy on this new European venture,” said Jonathan Ornstein, Chairman and Chief Executive Officer.

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Recaro Aircraft Seating enters regional market with Embraer

Recaro Aircraft Seating is entering the regional jet market with its first Embraer installation. The BL3710 and SL3710 seats will be retrofitted on the Embraer E190 and line fitted in Brazil on the Embraer E195-E2 for KLM Cityhopper, the regional arm of KLM Royal Dutch Airlines.

 “Expanding into the regional jet market is a tremendous opportunity for Recaro to grow our capabilities and strengthen our customer base,” said Dr. Mark Hiller, CEO and Shareholder of Recaro Aircraft Seating. “Embraer has been a fantastic party through this experience. I have great confidence in this move and our ability to rise to a new challenge.”

KLM Cityhopper is the first regional jet customer for Recaro. Slated for a Q1 2021 delivery, the BL3710 and SL3710 seats are positioned in a hybrid layout on the E190 and E195-E2 KLM Cityhopper regional jets. The E195-E2 is configured with 132 seats, while the E190 has 100 seats.

The lightweight SL3710 combines an ergonomic design and durable parts to create a comfortable seat with a reduced total cost of ownership for airlines. Specifically created for short and medium-haul flights, the BL3710 offers a six-way adjustable headrest, additional back support, and the modular seat design ensures a streamlined cabin layout and minimal maintenance.

GA Telesis signs agreement for acquisition of fleet of 777-300ER aircraft

GA Telesis has signed an agreement to acquire a fleet of 777-300ER aircraft, powered by GE90-115B engines, with an undisclosed seller. With the world's leading aviation ecosystem and given the relative size of the acquisition, GA Telesis’ plan for this fleet will encompass a broad strategy of aircraft leasing, engine leasing, as well as airframe and engine part-out.

GA Telesis has achieved great success with the 777 platform, from the world's first-ever 777 part-out to the multitude of aircraft it has acquired and managed over the past decade. Most recently, GA Telesis acquired three aircraft from All Nippon Airways for part-out, which followed an award for the Cathy Pacific 777 fleet disposition contract over seven years.

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ATS Texas Pneumatic Systems selected as Honeywell channel partner

ATS (Aviation Technical Services) has released that its subsidiary business of Texas Pneumatic Systems (TPS) has been selected by Honeywell to join Honeywell’s global channel partner network.

This agreement enables TPS to be listed as a certified Honeywell repair station for select aviation parts, creating a partnership benefiting mutual customers surrounding the repair, overhaul, and service of a range of airframe and engine components and their related accessories.

Jet MS acquires RAS Group and extends services to London Biggin Hill Airport

On February 26, Jet MS, a global provider of base and line maintenance services for business and regional aircraft, and a part of the global aerospace business group Avia Solutions Group, has acquired the U.K.-based RAS Group, comprising of RAS Completions and RAS Interiors. RAS Group is a long-established aircraft interior, exterior, and completions company specializing in interior repairs, manufacturing, and exterior paint refinishing for both VIP and commercial aircraft.

Founded in 1996, RAS Group is based at London Biggin Hill Airport, a world-renowned center for international business aviation. RAS Group’s wide range of aviation services, including aircraft exteriors, VIP and business jet interiors, commercial interiors, paintwork protection, aircraft interior design, aircraft seating, helicopter painting, military aircraft painting and coatings, aircraft galleys, and cabin stowage, makes the acquisition a valuable one-stop-shop for all aircraft interior and exterior requirements and acts as a bolster for Jet MS’s existing position in the market.

In addition to RAS Group’s excellent suite of interior and completion services, Jet MS plans to expand the offering to include base maintenance, line maintenance, and spare parts trading services to its clients. To further these goals and ambitions the Jet MS team is working in close cooperation with the airport team with a focus on further improving and expanding capabilities and employment opportunities for the future.

Jet MS’s CEO, Vytis Žalimas said: “The acquisition of RAS Group gives Jet MS a valuable and complementary range of services to offer its international clients. We are excited to welcome RAS Group’s founders Russell Pitt and Chris Ransley, along with their industry-leading team, to our growing family of aviation professionals and we are thrilled about the next chapter of growth for our enlarged and strengthened group of businesses.”

Breeze Airways takes delivery of second Embraer E190 aircraft

Nordic Aviation Capital (NAC) has delivered one Embraer E190, MSN 19000055, to Breeze Airways on lease. This is the second aircraft to deliver as part of a fifteen E190 aircraft lease agreement made with Breeze Airways.

Breeze Airways is a new ultra-low-cost airline start-up scheduled for take-off in 2021. Breeze’s mission is to make the world of travel simple, affordable, and convenient by offering point-to-point flights from smaller, secondary airports, bypassing hubs for shorter travel times, and improving the guest travel experience.
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