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Friday, March 5th, 2021

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Airbus agrees to avoid forced redundancies in Germany

Airbus has announced that as a result of successful negotiations with IG Metall union and works council, which represents workers in Germany, no redundancies will be enforced in Germany before year-end 2023. As Airbus aims to implement a restructuring program which will affect 15,000 positions in its workforce, it will be looking to early retirements, voluntary redundancy policies, and internal transfers to provide the solution to a situation created by a drop in demand for aircraft during the COVID-19 crisis.

Airbus employs approximately 55,000 workers in Germany and 1,300 employees have taken voluntary redundancy, while 1,000 employees at its subsidiary, Premium Aerotec, which manufacture major plane components, took voluntary redundancy between November 2020 and February 2021, according to Holger Junge, head of the group works council.

“Production figures have stabilized,” Junge confirmed, “But we have not overcome the crisis.” He added that Airbus has agreed to avoid further job cuts through short-time work and reducing hours by up to 20% from 2022. Airbus is now in an awkward position as a consequence of extended lockdowns in Europe as, in January, it chose to adopt an optimistic outlook with ambitions for a partial recovery in aircraft production of up to 22% from 2022 onward.

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MTU Maintenance weathers 2020 better than expected

MTU Maintenance saw a reduction of only -18% in incoming engines across its entire portfolio in 2020, which was above market expectations of -45% in shop visits for the global aftermarket for commercial engines.

MTU Maintenance attributes this stability to its broad engine portfolio, with 30 engine types, including the newly added LEAP engine as well as other popular narrow-body engines such as the CFM56, PW1100G-JM and V2500 engine families, which are likely to recover faster after the crisis. Further, MTU Maintenance has a diverse customer base, which include among others cargo operators, who have flown consistently throughout the pandemic, and military customers such as the U.S. Air Force at its facility in Vancouver, Canada.

“In fact, we even saw campaign wins of US$5.5 billion, the second highest in MTU Maintenance history,” says Michael Schreyögg, Chief Program Officer, MTU Aero Engines. “This is proof that customers trust in us, our financial strength and intelligent solutions in critical times. Our engine expertise and ability to get the most out of an engine at minimum cost is highly valuable to both airlines and lessors both now and in time, when our industry recovers.”

“These campaign wins included over 300 new engine MRO contracts, including for single shop visits, and 56 new customers or existing customers sending new engine types to our facility,” adds Martin Friis-Petersen, SVP MRO Programs, MTU Aero Engines. The CFM56 engine family made up over one third of these customers. “In turn, we are confident in this program and are even adding a CFM56-7B line to our facility in Berlin to ensure fast response and high flexibility for our customers.”

On the basis of this, MTU Maintenance remains committed to its organic growth strategy and is continuing with on-going investments for instance in the ramp-up at EME Aero, Poland, and expansions at its sites in Berlin-Brandenburg and Hannover in Germany, moving to a new facility in Vancouver, Canada, as well as constructing a second facility at MTU Maintenance Zhuhai, China, and a new greenfield repair facility, MTU Maintenance Serbia.

American Express Ventures makes strategic investment in Boom Supersonic

Boom Supersonic has announced a strategic investment from American Express Ventures. The funds will support the continued development of Boom’s flagship product, the supersonic airliner Overture.

Overture is Boom’s 65- to 88-seat supersonic airliner, capable of running on 100% sustainable aviation fuel. The supersonic aircraft is slated to roll out in 2025 and begin commercial flights by 2029. Built on the core principles of
speed, safety and sustainability, Overture will fly twice as fast as conventional jets over more than 500 transoceanic routes worldwide. Boom currently has US$6 billion in pre-orders of Overture aircraft.

“Boom is building a supersonic passenger aircraft that will make travel faster and more sustainable,” said Harshul Sanghi, Global Head of Amex Ventures. “Travel has been a key part of American Express’ heritage and it remains an integral part of our Card Members’ lifestyles. We are excited to support Boom’s development and invest in the future of travel.”

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Etihad Airways posts financial results for full-year 2020

Etihad Airways has announced its financial and operating results for 2020, recording a 76% fall in passengers carried throughout the year (4.2 million, compared to 17.5 million in 2019) as a result of lower demand and reduced flight capacity caused by the unparalleled global downturn in commercial aviation.

As a consequence of the COVID pandemic and ensuing flight and travel restrictions, total passenger capacity was reduced by 64% in 2020 to 37.5 billion Available Seat Kilometres (ASKs), down from 104 billion in 2019, with the seat load factor declining to 52.9%, 25.8 percentage points lower compared to 2019 (2019: 78.7%).

The airline recorded US$1.2 billion passenger revenues in 2020, down by 74% from US $4.8 billion in 2019, due to fewer scheduled services and drastically fewer people travelling. A contributing factor to this was the total suspension of passenger services into and out of the UAE from end of March until early June 2020 to limit the spread of COVID, in line with a UAE government mandate. More than 80% of total passengers carried in 2020 were flown during the first three months of the year, demonstrating the precipitous drop in demand as the global crisis deepened over the course of the year.

The airline’s cargo operation, on the contrary, recorded an extremely strong performance, with a 66% increase in revenue from US$0.7 billion in 2019 to US$1.2 billion in 2020, driven by huge demand for medical supplies such as Personal Protective Equipment (PPE) and pharmaceuticals, paired with limited global airfreight capacity. Cargo yield saw an improvement of 77%.

Operating costs meanwhile decreased by 39% year-on-year, from US$5.4 billion in 2019 to US$3.3 billion in 2020, due to a combination of reduced capacity and volume-related expenses, as well as a focus on cost containment initiatives. Overheads reduced by 25% to US$0.8 billion (2019: US$1.0 billion) in this timeframe, despite their fixed nature, owing to cash and liquidity management initiatives during the crisis, while the finance cost reduced by 23% through an ongoing focus on balance sheet restructuring.

Overall, this resulted in a core operating loss of US$1.70 billion (2019: US $0.80 billion) in 2020, with the EBITDA turning to negative US$0.65 billion (2019: positive US$0.45 billion).

RECARO Aircraft Seating receives additional orders to outfit Alaska Airlines’ new B737 MAX aircraft

Recaro Aircraft Seating has received additional orders to outfit Alaska Airlines’ (Alaska) new B737 MAX aircraft with 13 shipsets of the CL4710 and BL3530 seats. Alaska is the first carrier to order more Boeing B737 MAX aircraft after it was cleared by the FAA.

The BL3530 offers passengers premium comfort and innovative amenities, and its low weight appeals to customers because it contributes to reduced fuel consumption and minimizes the aircraft’s carbon footprint.

“I’m glad that Alaska has appreciated the quality of our robust CL4710 and BL3530 seats to select them on several different occasions. We are inspired by their mission to enhance the passenger journey while remaining committed to sustainable solutions,” said Mark Hiller, CEO and Shareholder at Recaro Aircraft Seating. “If 2020 proved anything, Recaro and Alaska both face challenges head-on, and we are privileged to have called them a partner for the past decade.”

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Stevens Aerospace authorized to install PRIZM Lighting systems in all four facilities

Stevens Aerospace has announced that all four of the company’s MRO facilities have been designated as authorized installation centers for the highly regarded PRIZM LED Cabin Lighting systems. The solid-state technology is cost-effective, app-based and provides a cabin environment that creates stunning aesthetics and even impacts passengers’ state of mind.

PRIZM’s customizable full-color LED spectrum mood lighting can be controlled three ways: via a mobile app, by browsing directly to the system, or in conjunction with existing cabin lighting controls. The system offers upwash, downwash, lower accent, galley, lavatory and cupholder lighting.

According to Stevens Director of Sales and Marketing Phil Stearns, part of the value of PRIZM’S technology is in the longevity of the LED lighting. “Not only does the PRIZM Lighting system give owner-operators control of colors and zones at a very affordable price, the cost of ownership over the years will be considerably less because LED technology lasts 10 to 15 times longer than the more expensive florescent tubes.”

GKN Fokker Services redelivers first Alliance Airlines aircraft as part of heavy maintenance checks deal

Fokker Services, a GKN Aerospace company, has redelivered its first Alliance Airlines Fokker 70 aircraft as part of a five-year heavy maintenance checks agreement. The Fokker Services Asia facility now provides base checks for the Australian operator’s fleet of Fokker 70 and Fokker 100 aircraft. This new deal, effective until 2025, builds on Fokker Services Asia’s reputation as a trusted and highly skilled aircraft MRO provider in the Asia-Pacific region.

Fokker Services first partnered with Alliance Airlines in 2002, when the airline began operating Fokker aircraft. Over the years it has provided services and capabilities including repairs, engineering services, parts trading, and modifications such as ADS-B Out for Alliance Airlines’ Fokker aircraft. Along the way, Fokker Services’ has continuously leveraged its OEM expertise as the Type Certificate holder. This new agreement builds on the 2018 Fokker Services Asia heavy maintenance checks deal for the airline’s Fokker 50 fleet.

Two of China’s major airlines go live with Sabre’s technology

Software and technology provider Sabre Corporation has announced the implementation of Sabre’s Recovery Manager Operations solution for China’s national flag carrier Air China as well as China Eastern Airlines, to enhance their operational recovery capability and future growth.

Air China and China Eastern are both now using Sabre’s Recovery Manager Operations solution to identify operational issues across their extensive domestic and international networks which will help to further increase the footprint of Sabre’s advanced decision support solutions in China’s marketplace.

Recovery Manager Operations will empower the airlines to manage flight disruptions by proposing immediate contingency and recovery plans, while minimizing downline impact, improving operational performance, maximizing staff productivity and, ultimately, boosting customer satisfaction.
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Tamar Jorssen
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Email: tamar.jorssen@avitrader.com
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Tamar