Wednesday, May 29th, 2019

SAS pilot strike hits second-quarter results hard

The six-day pilots’ strike which ended May 2, is estimated to have cost Scandinavian Airlines 650 million kroner (US$68 million) and contributed heavily to the carrier’s 1.2 billon kroner (US$125 million) loss for the second quarter of its financial year. The strike, which began April 26, was the consequence of a breakdown in negotiations between SAS and SAS Pilot Group, which represented 95% of the carrier’s pilots in Sweden, Denmark and Norway. In total, over 4,000 flights were canceled, affecting more than 370,000 passengers.

To summarize the second-quarter results (2018 figures in brackets):
  • Revenue: SEK 10,187m (9,916m)
  • Income before tax (EBT): SEK -1,216m (-488m)
  • Income before tax and items affecting comparability: SEK -1,211m (-309m)
  • Net income for the period: SEK -933m (-349m)
  • Earnings per common share SEK -2.44 (-1.0)
  • Income before tax negatively affected by strike SEK -430m
  • In the light of the strike and the macro development, the outlook is revised as it will be challenging to reach a positive result before tax and items affecting comparability in fiscal year 2019
SAS President and CEO Rickard Gustafson made it clear the poor results for the quarter were also a result of the impact of an increase in fuel price and a weakening of the kroner. Without these two factors and the cost of the strike, overall results would have been comparable to 2018. He added: “…we need to increase the pace of transformation to adapt our company to the current market conditions and secure future profitability.”

Commenting on the outcome of the pilots’ strike Gustafson confirmed that: “The new three-year collective bargaining agreements with the pilot unions in Denmark, Norway and Sweden give us the
stability and time to continue our transformation efforts. In total, the net pilot cost across Scandinavia increases with approximately 5.4% over the three-year period and includes productivity improvements that to some extent mitigate increased compensation and other costs.” (US$1.00 = SEK9.58 at time of publication.)


EmbraerX, Atech and Harris Corporation to collaborate on urban air traffic management concept

EmbraerX is championing the development of a truly collaborative ecosystem which enables people to imagine a world where electric vertical take-off and landing vehicles (eVTOL) will be part of our
daily lives. In partnership with dozens of air traffic controllers, academics, pilots and industry experts, Embraer’s disruptive business subsidiary published “FlightPlan 2030,” a white paper which proposes a procedures-based vision for a new paradigm of air traffic management for the future urban air mobility industry.

“Urban air mobility will evolve to become a significant mode of transportation in the next decade and will require a truly collaborative ecosystem,” said Antonio Campello, President & CEO of EmbraerX. “Our Urban Air Traffic Management (UATM) concept ensures equitable and safe access to urban airspace for a broad spectrum of aircraft, including conventional helicopters, fixed wing aircraft and eVTOLs. FlightPlan 2030 presents what we believe are the necessary first steps towards autonomous capabilities.”

This vision is based on existing technology from Atech, an Embraer company that develops the air traffic control systems used in multiples countries around the world. This project also involved the collaboration of Harris Corporation, a leading ATM technology innovator for the FAA and a global provider of ATM systems that meet the demands of the next generation of air travel around the world.

SpiceJet posts full year 2019 loss

SpiceJet reported a profit of INR 56.3 crore for the traditionally weak quarter ended March 31st, 2019 as against INR 46.2 crore in the same quarter last year. In comparison to Q3 FY19, the airline managed to generate higher profits despite challenges on account of seasonality and more importantly grounding of its 13 MAX aircraft. The reported quarter profit does not include any form of reimbursements or compensation on the grounded aircraft and for which the Company
continues to work with the manufacturer. The airline reported a net loss of INR 316.1 crore in FY 2019.

Operating revenues were at INR 2,531.3 crore for the reported quarter and INR 9113.2 crore for the fiscal 2019. On an EBITDA basis, profit is INR 122.8 crore for the reported quarter and INR 48.4 crore for the fiscal 2019. On an EBITDAR basis, the profit is INR 523.3 crore for the reported quarter and INR 1,345.1 crore for the fiscal 2019.

The year under review posed multiple unprecedented challenges such as the world-wide grounding of the Boeing 737 MAX which led to the overnight grounding of SpiceJet’s MAX fleet. This could have led to huge cancellations and passenger disruptions but the Company swiftly moved by mounting additional frequencies, inducting planes on wet lease and rationalising and optimising the use of its existing fleet. Further, this year saw a 25% increase in aviation turbine fuel prices and 9% depreciation of the Indian rupee that resulted in cost escalations of INR 695 crore and INR 285 crore respectively. (1 crore (10m INR) = US$143,500 at time of publication)


Airbus Helicopters and Hungarian Government to establish manufacturing site in Gyula

Airbus Helicopters and the Hungarian Government have selected the town of Gyula in the Békés County as the site for a new aerospace enterprise in Hungary. Gyula is located in the country’s eastern part. The new installation will be built up from scratch and will be the core of an emerging Hungarian aeronautics cluster. At the end of 2018, Airbus Helicopters and Hungary had signed a Memorandum of Agreement to create an industrial cooperation for long term aviation projects.

The purpose of the plant is to manufacture high precision metallic elementary parts for the dynamic systems of helicopters for the complete Airbus product range. The production is expected to start in 2021. The Hungarian Government plans to establish capabilities for metallic surface treatment and a Hungarian Aerospace Academy to support the new Airbus site by training the future workforce.

The new entity will be a joint venture between Airbus and a Hungarian governmental partner. Airbus will hold the majority of the shares and will operate the plant.

Werner Aero

Air Partner's fright division reports second year of record results

The Freight division at global aviation services group Air Partner has delivered a second year of record results. As announced in Air Partner’s recent full year results for the year ended 31 January 2019, Freight gross profit for the year was up 45.3% to £4.9 million, accounting for 13.8% of the group’s overall gross profit.

Over the course of the last financial year, the group invested in people across its regional offices, expanded its team in Turkey and established a new team in the US, in addition to winning sizeable
mandates from a variety of new and existing clients. Cargo work has been carried out across a range of sectors, including automotive, aid, aerospace and energy, with customer requirements ranging from the transportation of a small box via Air Partner’s growing on-board courier service to chartering the largest aircraft in the world, the An-225.

The introduction of a Freight offering in Fort Lauderdale has proven particularly successful, helping to push Freight gross profit and customer numbers to their highest ever level. The team there had a very busy year working on numerous projects, including the co-ordination of 30 charters carrying humanitarian aid to Guam and Saipan during the typhoon season.

Outside of the US, the Turkey office arranged the transportation of 500 tonnes of construction materials to West Africa and the UK benefited from its work supporting airlines in their aircraft on ground (AOG) recovery, as well as government flying. The German office also continued to see high levels of activity from the automotive sector and delivered its 11th consecutive year of growth.

Furthermore, Air Partner opened two new offices in Singapore and Houston in early 2019, both of which offer Freight services, thereby broadening the division’s geographic reach even further.

ATSG’s bank credit facility expands to support fleet growth

Air Transport Services Group has obtained lender commitments for a one-year extension through May 2024 of its secured credit facility, and an expansion of the facility’s revolver portion.

The amendment to ATSG’s agreement with a consortium of banks, led by SunTrust, increases the revolving credit portion of the facility by US$100 million, to US$645 million. ATSG is exercising its access to additional credit, with lender consent, through an accordion feature of the facility. The exercise reduces the additional credit available under the accordion feature to US$300 million from US$400 million.

AJW Group

Elix Aviation Capital delivers one ATR 42-500 to Air Corsica

Elix Aviation Capital has delivered one ATR 42-500 MSN 637, on lease to Air Corsica.  This new customer for Elix expands its turboprop leasing footprint in Europe and adds the first ATR 42-500 into the Air Corsica fleet.

Air Corsica operates over 20,000 flights annually across 33 routes with a fleet of 12 aircraft including the Airbus A320, ATR72 and now ATR42 serving four Corsican airports along with mainland destinations in France, Belgium and United Kingdom.

Bii teams up with Rostrom Leasing for CFM56 -3 engine parts

Specialist aircraft component support provider Bii.aero has teamed with Dublin based aircraft and engine leasing firm Rostrum Leasing to market a suite of engine piece parts resulting from the phased tear-down programme of selected B737-300 Classics and CFM56 spare engines formerly operated by Southwest Airlines. Bii.aero has all available piece parts to serve the used materials market at their warehouse near LGW for sales and distribution.

To strengthen the expertise within the Bii team, Bii has recently appointed James Burley to head up the engines division. Burley has extensive experience in all aspects of commercial aircraft and engine leasing and technical management following his previous appointments with Avtrade and recently Aircraft Leasing and Management ltd.


AviaAM Leasing sells A321-200 with lease attached

AviaAM Leasing has sold one Airbus 321-200 to Aergo Capital with lease attached to SmartLynx Airlines. The aircraft was acquired earlier this year and, after comprehensive technical preparation, refurbishment and repainting, has been leased to a Latvian ACMI operator.

Currently, the aircraft is being operated by the lessee under an ACMI contract with German leisure airline – Condor.

Flybe CEO Christine Ourmières-Widener to step down

Flybe has released that Christine Ourmières-Widener has decided to step down from her role as Chief Executive Officer of Flybe Limited on July
15th, 2019, following the successful sale of the business to Connect Airways.

The Company expects to announce Christine’s successor before her departure to ensure a smooth handover.

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ap&m Europe 2019 - The Global MRO Procurement Expo
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Managing Technical Aspects of a Leased Asset & Maintenance Reserves Seminar Training Seminar
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Paris Air Show 2019
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Advanced Engineering 2019
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