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Thursday, March 18th, 2021

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ATR reveals recovery plan for 2021 and beyond

Based at Toulouse Blagnac airport in France, ATR (Aerei da Trasporto Regionale or Avions de Transport Régional), the aircraft manufacturer has revealed its plans for 2021 and beyond for dealing with the devastating effects of the COVID-19 pandemic on the aerospace industry as a whole.

2020 was not such a disastrous year for ATR as it managed to deliver ten aircraft and receive six gross orders during a year which saw nine new operators using ATR aircraft and 84 new routes opened. Additionally, ATR operators launched services in three new countries, while last December, the first purpose-built freighter (ATR 72-600F) was delivered to FedEx.

For 2021 the company is looking to implement incremental improvements into the ATR aircraft family, to enhance operational efficiency, and reduce maintenance costs through system upgrades and state-of-the-art avionics. It is now well positioned to benefit from the resilience of a cargo market which is already at pre-COVID level. ATR expects air cargo to double its capacity over the next 20 years and point to point express deliveries can best be served by its aircraft.

While the Short Take Off and Landing variant of the ATR 42-600 will open a range of opportunities in airports with airstrips between 800m and 1,000m, ATR has estimated that approximately 900 older regional turboprop aircraft will need to be replaced in the coming years, and the company is well positioned to meet demand for new aircraft with its more sustainable, cost-efficient and modern planes.

Stefano Bortoli, CEO of ATR, stated: “2020 has been a challenging year for the travel industry, and we will not see an improvement until the end of the current year. However, the vital connectivity that regional air travel has offered throughout the crisis, have made the ATR more attractive for Europe and North America, while turboprops remain the best choice for several underserved regions, where land infrastructure is not a practical choice, in Asia, Latin America, and Africa.”


Europe’s aviation sector welcomes Digital Green Certificate proposal

Europe’s aviation sector welcomed the proposal by the European Commission for a Digital Green Certificate system. This proposal requires EU States to issue common, inter-operable and mutually-recognized certificates for COVID-19 vaccination, testing and recovery status that will facilitate free movement during the COVID pandemic and support the restart of travel.

Industry associations Airlines for Europe (A4E), ACI EUROPE (Airports Council International), ASD (Aerospace and Defence Industries Association of Europe), CANSO, European Regions Airline Association (ERA), and International Air Transport Association (IATA) view these certificates as a key tool to facilitate a safe and efficient resumption of travel and tourism in Europe. They call on the EU Council and the European Parliament to urgently approve the Commission proposal, and for all EU States to immediately begin preparations for their implementation.

Recent polling showed that 54% of Europeans aim to take a trip before the end of July 2021, revealing the strong pent-up demand for mobility. Among this group, 41% wish to travel to another European country, underlining the benefit of a common EU framework. 89% of people agree that governments need to standardize testing and vaccine certificates.

The associations are therefore urging EU governments to ensure the certificates are operational in time for the peak summer travel months - with vaccination certificates, in particular, enabling the elimination of all restrictions to travel whilst recognizing that vaccination should not be mandatory in order to travel.

But even if the COVID-19 situation permits the restart of travel, the industry warned that a more detailed plan is needed to energize economic recovery and restore freedom of movement as soon as governments are able to re-open their borders.

With utmost urgency, work on an EU roadmap setting out the conditions, criteria and possible timing for the easing and lifting of travel restrictions must begin. This should also include a simple, harmonized implementation of testing policies.

In stark contrast to the restart roadmap set out by the U.K., EU work has yet to be initiated on this – leaving hundreds of thousands of travel and tourism businesses and their employees across Europe in the dark as to their prospects for a restart and related planning. It is also preventing Europeans from planning longed-for family reunions, business trips or holidays, which will be crucial in helping to restore Europe’s economies.

The latest data released by ACI EUROPE shows the striking milestone of over 7500 lost air routes across Europe’s transport network has just been passed. Air passenger traffic remains in the doldrums as a direct consequence of the current restrictions. The situation is particularly acute in the EU/EEA/Switzerland and the UK, with a -89.3% decrease in passenger volumes in February compared with the previous year. This contrasts with the rest of the wider European market (including Russia and Turkey) who are reporting only a 56% decrease.

A planning roadmap is essential because a restart of air travel is complex. The industry is operating at massively reduced capacity, with hundreds of thousands of employees laid off or on salary support. A successful restart will include bringing aircraft and terminals back into service, and marketing and ticketed services brought back online.

Bearing in mind these facts, say the associations, the need for urgent coordinated and forward-looking planning at EU level is self-evident. The ICAO Council’s recent approval of requirements for globally accepted COVID-19 test certificates, including the technology framework for secure digital versions and the future incorporation of vaccination certificates now provides a global framework for further action.


IAI and Aviatic to establish aircraft maintenance center in Lithuania

Israel Aerospace Industries (IAI) has signed a Memorandum of Understanding (MOU) with Aviatic MRO UAB for a strategic cooperation in establishing an aircraft maintenance center at the Siauliai Airport, Lithuania.

The new site will provide aircraft maintenance and overhaul services, the conversion of B737NG passenger airplanes into cargo configuration, and the training, certification, and licensing of personnel.

Aviatic will run the maintenance center and will support the interaction with the Lithuanian regulators, including planning and infrastructure development.

Thomas C. Hutton named Chief Executive Officer of GAMMA Aerospace

The Board of Directors of GAMMA Aerospace, has appointed Thomas C. Hutton as Chief Executive Officer of the company. Hutton joins GAMMA Aerospace after having served as Chief Executive Officer of Cadence Aerospace, a provider of highly complex aerospace components and assemblies to commercial and defense customers.

Headquartered in Mansfield, Texas, GAMMA Aerospace is a specialized, end-to-end provider of engineered air frame and flight components for leading original equipment manufacturers and Tier I suppliers in the aerospace and defense industries.


IAI financial year 2020 net income increased 48%

Israel Aerospace Industries, Israel's largest national military and civilian security defense company, issues its consolidated financial statements for the year ended December 31, 2020.

The company's revenues in 2020 reached a record of US$4,184 million, compared with US$4,108 million in 2019. The increase is mainly a result of the increase in the sales of the ELTA Group and the Systems Missiles & Space Group. The sales of the Military Group in 2020 increased by 14% to US$3,508 million compared with US$3,080 million last year, an increase of US$428 million. The Aviation Group’s sales in 2020 decreased by approx. 18% to US$1,187 million compared with US$1,442 million last year – US$25 million of the decrease can be attributed to the crisis in the global aviation industry.

Sales for export in 2020 accounted for 71% of sales at approx. US$2,991 million (approx. US$1,193 million to Israel, representing 29% of sales), similar to the figures recorded in 2019.

Net income in 2020 grew by 48% to approx. US$133 million (approx. 3.2% of sales), compared with net income of approx. US$90 million in 2019. The Military Group’s net income in 2020 increased by approx. 13% to approx. US$248 million compared with approx. US$219 million in 2019, an increase of US$29 million. The Aviation Group’s net loss in 2020 amounted to approx. US$32 million compared with a loss of approx. US$21 million in 2019.

EBITDA in 2020 amounted to approx. US$ 397 million, compared with approx. US$324 million in 2019, an increase of approx. 23% compared to last year.

Gross profit in 2020 grew by 15% to approx. US$665 million (about 16% of sales) compared with approx. US$577 million (approx. 14% of sales) in 2019. The growth in gross profit derives mainly from increased sales of the Systems Missiles & Space Group and the ELTA Group. The Military Group’s gross profit in 2020 increased by 15% to approx. US$598 million compared with approx. US$520 million in 2019, an increase of approx. US$78 million. The Aviation Group’s gross profit in 2020 increased to approx. US$78 million compared with approx. US$74 million in 2019.

Operating income in 2020 grew by 61% to approx. US$195 million (approx. 4.7% of sales), compared with operating income of approx. US$121 million in 2019 (approx. 2.9% of sales), an increase of approx. US$74 million. The Military Group’s operating income in 2020 grew by 18%to approx. US$285 million compared with approx. US$241 million in 2019, an increase of US$44 million. The Aviation Group’s operating loss in 2020 amounted to approx. US$10 million compared with an operating income of approx. US$1 million in 2019.

Net finance expenses in 2020 amounted to approx. US$21 million compared with approx. US$12 million in 2019.


EU Commission approves hybrid loan by the State of Finland to Finnair

Finnair and the State of Finland have signed an agreement on a hybrid loan of maximum €400 million to support Finnair. The decision was made by the Plenary Session of the Government on February 18, 2021. The arrangement has the approval of the EU Commission’s competition authority in line with the European Union’s state aid rules. The COVID-19 pandemic has led to travel restrictions which have caused severe losses to Finnair, which has been taken into account in the interest rate of the hybrid loan.

Of the credit limit, approximately €350 million can be used by Finnair based on the state aid decision made by the Commission on March 12, 2021. Finnair is able to access the funds, if its cash or equity position would drop below the limits to be defined in the facility’s terms and conditions. The remaining approximately €50 million-share will be brought to approval by the Commission at a later stage. Finnair’s equity was €896.6 million at the end of 2020 and cash reserves were €823.7 million.

MHIRJ teams up with IBM to build its consolidated aviation business on the cloud

IBM and MHIRJ, the Montréal-based aviation group created from the acquisition of Bombardier’s CRJ Series program by Mitsubishi Heavy Industries, announced their collaboration to build MHIRJ’s consolidated business on the cloud.

MHIRJ, which provides aircraft maintenance, repair and overhaul services, has chosen to deploy SAP S/4HANA ERP solution hosted on the IBM cloud to create a transparent and streamlined view of its business. The new open hybrid platform will allow MHIRJ to control its overhead expenses, while reducing its physical footprint.

Although the frequency of flights has decreased significantly due to the COVID-19 pandemic, commercial aircraft still require maintenance. In fact, many airlines are shifting their focus to smaller aircraft, like the CRJ serviced by MHIRJ, while the largest aircraft have been grounded for months. By investing in innovative technology, MHIRJ will be able to drive down costs, drive up efficiency, and improve customer service in the aftermarket supply chain.

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Tamar Jorssen
Vice President Sales & Business Development
Email: tamar.jorssen@avitrader.com
Phone: +1 (788) 213 8543