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Tuesday, June 8th, 2021

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KKR acquires Atlantic Aviation for US$4.475 billion

Macquarie Infrastructure Corporation (MIC) and KKR, a global investment firm, have signed a definitive agreement for MIC to sell its Atlantic Aviation business to KKR for US$4.475 billion in cash and assumed debt and reorganization obligations. Atlantic Aviation operates one of the largest networks of fixed base operations (FBOs) in the U.S. providing a full suite of critical services to the private aviation sector.

The purchase price implies a multiple of Atlantic Aviation’s 2019 Earnings Before Interest Taxes and Depreciation (EBITDA) of 16.2 times.

MIC expects to receive US$3.525 billion at closing following the reorganization of MIC into a limited liability company, Macquarie Infrastructure Holdings (MIH). The reorganization was approved by MIC shareholders on May 6, 2021 and is expected be completed shortly before the closing of the Atlantic Aviation sale.

The Atlantic Aviation sale is expected to result in cash proceeds of approximately US$3.298 billion being available for distribution to unitholders after a disposition payment by MIH to MIC’s external manager of approximately US$227 million. The disposition payment was calculated in accordance with the disposition agreement entered into by and between MIC and the company’s external manager on October 30, 2019. The MIH board of directors is expected to authorize a cash distribution of approximately US$37.35 per unit following closing of the transaction.

The sale of Atlantic Aviation is expected to close in the fourth quarter of 2021, subject to customary regulatory approvals and approval from MIC shareholders. MIC expects to seek approval of the Atlantic Aviation sale at a special meeting of shareholders to be conducted as soon as practical following clearance of the related proxy statement by the Securities and Exchange Commission.

KKR is making its investment in Atlantic Aviation primarily through its global infrastructure investors and core investments strategies.

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U.S. and U.K. aviation heads meet ahead of G7 for transatlantic travel corridor reopening

Ahead of the G7 meeting in Cornwall, U.K. later this month, the heads of major airlines in both the U.S. and U.K. have convened a meeting to discuss the potential for reopening the transatlantic travel corridor between the two countries. The driver behind the push to lift restrictions on travel lies in the fact that both countries have substantially reduced the number of COVID-19 cases and vaccination programs are progressing well with 63.5% of U.S. citizens having received at least one dose of the vaccine, while that figure stands at around 75% for the U.K.

Those attending the meeting hosted by Duncan Edwards, Chief Executive of BritishAmerican Business, were American Airlines CEO Doug Parker, British Airways CEO and Chairman Sean Doyle, Delta Air Lines CEO Ed Bastian, Heathrow CEO John Holland-Kaye, JetBlue CEO Robin Hayes, United CEO Scott Kirby, U.S. Travel Association President and CEO Roger Dow, and Virgin Atlantic CEO Shai. They discussed the merits of having the U.S. on the U.K.’s ‘green list’ (meaning travellers from the U.S. would no longer need to self-isolate on arrival in the U.K.), as well as the benefits that would arise from the U.S. lifting the U.K.-related travel ban.

The U.S. is the U.K.’s largest trading partner and U.K. businesses are losing £23 million daily while transatlantic links remain shut. In 2019, 900,000 tons of cargo also travelled between the two countries. The group has encouraged the U.S. government to consider lifting entry requirements for U.K. travellers who provide a negative COVID test prior to arriving in the U.S. or are fully vaccinated or can present proof of recovery after contracting the virus.

A recent York Aviation report stated that a second ‘lost summer’ of international travel would result in £55.7 billion in lost trade and £3.0 billion in tourism money if reopening is delayed until September. If international travel remained restricted, it would cost the U.S. economy US$325 billion in total losses and 1.1 million jobs by the end of 2021, according to analysis from the U.S. Travel Association. (£1.00 = US$1.42 at time of publication.)

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World2Fly takes delivery of new Airbus A350-900 from ALC

Air Lease Corporation has delivered one new Airbus A350-900 aircraft, featuring Rolls-Royce Trent XWB engines, on long-term lease to World2Fly, based in Palma de Mallorca, Spain. This aircraft is the first of two new A350-900 aircraft confirmed to deliver to the airline from ALC’s order book with Airbus.  

“We are delighted to deliver our first of two new A350-900 aircraft to our new customer, World2Fly,” said Matthew Stevens, Assistant Vice President of Marketing at Air Lease Corporation. “ALC is pleased to help launch World2Fly with new A350-900 aircraft and we are confident the A350-900 will help distinguish World2Fly in the marketplace.”

Spirit AeroSystems named exclusive nacelle provider for Rolls-Royce Pearl 10X engine

Spirit AeroSystems has entered into an exclusive agreement with Rolls-Royce to design and build the next generation of slim-line nacelles for the company’s newest engine, the Pearl®10X. The company’s brand new, ready-for-assembly ultra-slim nacelle improves laminar flow to improve aircraft performance and acoustic impedance. The Rolls‑Royce work is another example of Spirit’s diversification strategy to grow its presence in the business jet market.

The Pearl 10X is a powerful and efficient engine, enabling operators to travel ultra-long distances at nearly the speed of sound for outstanding airport accessibility. For production, Spirit will leverage its composite and fabrication capabilities at its Wichita facility to support the program. Spirit will provide competitive aerostructures with kits that Rolls-Royce can seamlessly install during final assembly, helping to speed up processes.

As a significant provider of engine strut and nacelle products for all kinds of aircraft, Spirit learned from its work on the BR725, a Rolls-Royce engine, to create process improvements to confidently produce the volume of nacelles required for the new Pearl 10X program. The company applied advanced digital design techniques to continue to advance the affordability of robotic manufacturing and industrialization.

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Finnair traffic performance in May 2021

In May, Finnair carried 82,800 passengers, which was 210.4% more than in May 2020. The COVID-19 impact was clearly visible already then as Finnair operated only a minimum network due to strict and extensive travel restrictions. The number of passengers in May 2021 was 2.3% more than in April 2021 (month-on-month figures are not fully comparable as there is one day less in April compared to May).

The overall capacity measured in Available Seat Kilometres (ASK) increased in May by 318.3% year-on-year but decreased by 0.6% month-on-month. Finnair operated 65 daily flights (cargo-only included) on average which was 80.6% more than in May 2020 but 3.0% less than in April 2021. The differences between capacity figures compared to May 2020 are explained by the longer average stage length of operated flights and by the larger gauge of operated aircraft. Finnair's traffic measured in Revenue Passenger Kilometres (RPKs) increased by 305.9% year-on-year and by 9.1% month-on-month. The Passenger Load Factor (PLF) decreased by 0.9% points to 29.0% year-on-year but increased by 2.6% points month-on-month.

The ASK increase in Asian as well as in North Atlantic traffic was 100.0% year-on-year as there were no related passenger flights in May 2020. In European traffic, the ASKs were up by 67.6%. The ASKs in domestic traffic increased by 141.7%.

RPKs increased in Asian and North Atlantic traffic by 100.0% year-on-year, in European traffic by 193.8% and in domestic traffic by 257.8%.

The PLF was 11.8% in Asian traffic but it was supported by the strong cargo operations and a high cargo load factor. The PLF was 22.7% in North Atlantic traffic, 49.6% in European traffic and 69.9% in domestic traffic.

Passenger numbers increased in Asian and North Atlantic traffic by 100.0% year-on-year, in European traffic by 179.2% and in domestic traffic by 239.6%.

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StandardAero extends long-standing relationship with Vietnam Airlines

Vietnam Airlines, the national flag carrier of Vietnam, has awarded StandardAero a new contract for the support for Pratt & Whitney Canada PW127M engines, powering its fleet of ATR 72-500 regional turboprops. StandardAero will support the airline from its OEM-authorized PW100 Designated Overhaul Facility (DOF) in Gonesse, France.

This new contract award extends the long-standing relationship between the two companies. StandardAero has supported Vietnam Airlines’ PW127M engine fleet from its Gonesse facility since 2013, providing a range of services including overhauls, hot section inspections (HSIs) and engine repairs.

Eve and Helisul announce partnership to develop UAM products and services in Brazil including order of up to 50 eVTOLs

Eve Urban Air Mobility (Eve) and Helisul Aviation, one of the largest helicopter operators in Latin America, have announced a partnership that will focus on creating an ecosystem-wide approach to prepare for Urban Air Mobility operations in Brazil. In addition to collaborating on a suite of products and services, the partnership includes an order for up to 50 eVTOLs with deliveries expected to start in 2026.

Over the last few years, Eve and Helisul have been collaborating to evaluate how to co-create solutions for Urban Air Mobility, leveraging Brazil’s existing air taxi infrastructure – one of the largest in the world – for the use of Eve’s electric vertical take-off and landing aircraft (eVTOL).

Helisul and Eve plan to begin their partnership working together in a proof of concept (POC) operation, using helicopters in order to validate parameters that will apply to the future eVTOL operations. This partnership aims to develop new services and procedures that, together with communities and other industry stakeholders, can create a safe and scalable operating environment for eVTOL operations to expand, focusing on critical aspects to design for all users, including how to maximize accessibility and inclusiveness in vertiports and eVTOL boarding operations.

Eve is a new, independent company dedicated to accelerating the Urban Air Mobility (UAM) ecosystem. Benefitting from a startup mindset, backed by Embraer’s more than 50-year history of aerospace expertise, and with a singular focus, Eve is taking a holistic approach to progressing the UAM ecosystem, with an advanced electric vertical takeoff and landing vehicle (eVTOL) project, a comprehensive global services and support network, and a unique air traffic management solution. Eve is the first company to graduate from EmbraerX
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