Friday, June 28th, 2019

Air Canada gets approval to acquire Air Transat parent for CA$520 million

Air Canada and Transat A.T. have concluded a definitive Arrangement Agreement that provides for Air Canada's acquisition of all issued and outstanding shares of Transat and its combination with Air Canada. Under the terms of the binding agreement, unanimously approved by the Board of Directors of Transat, Air Canada will acquire all outstanding shares of Transat for CA$13 per share. The value of the all-cash transaction is approximately CA$520 million.

"We are delighted to have reached this definitive agreement to combine Transat with Air Canada to achieve the best possible outcome for all stakeholders. For shareholders of Transat and Air Canada, this combination delivers excellent value, while also providing increased job security for both companies' employees through greater growth prospects. Air Canada intends to preserve the Transat and Air Transat brands and maintain the Transat head office and its key functions in Montreal.

Both companies have demonstrated excellence as evidenced by the 2019 Skytrax Awards. Travelers will benefit from the merged companies' enhanced capabilities in the highly competitive, global leisure travel market and from access to new destinations, more connecting traffic and increased frequencies. The Quebec economy will derive maximum advantage of having a Montreal-based, growth-oriented global champion in aviation, the world's most international business," said Calin Rovinescu, President and Chief Executive Officer at Air Canada.

TP Aerospace

West Jet and Delta Air Lines obtain clearance from Canadian Competition Bureau for transborder joint venture

WestJet and Delta Air Lines have announced that their proposed U.S. – Canada transborder joint venture has received clearance under Canada’s Competition Act from the Canadian Competition Bureau. The CCB issued a no-action letter confirming that it does not intend to challenge the proposed joint venture agreement between WestJet and Delta Air Lines.

Upon receipt of all regulatory clearances or approvals in the U.S., the new joint venture will enable Delta and WestJet to deepen their existing partnership with expanded codesharing, reciprocal elite frequent flyer benefits, optimized growth across the U.S.-Canada transborder networks, and co-location at key hubs with initiatives designed to deliver a more seamless guest experience. The partners will also begin implementing joint sales and marketing activities and increase belly cargo cooperation. 

Beach Aviation Group

Peach Aviation posts full year net loss of 193 million yen

Japanese low cost carrier Peach Aviation, has released its financial statement for fiscal 2018 (ended on March 31, 2019). Operating income totaled 60,409 million yen (previous year’s result: 54,740 million yen), operating profit was 4,136 million yen (previous year’s result: 5,793 million yen), and current net loss was 193 million yen (previous year’s result: net profit of 3,728 million yen).

During the year in question, Peach posted figures of 6.8% as the operating profit rate, 87.8% for the average passenger load factor (seat occupancy), with approximately 5.51 million paying passengers.

More problems for the grounded 737 MAX as U.S. regulator finds new flaw

The U.S. Federal Aviation Administration (FAA) announced Wednesday, June 26, that it has found a new problem with the 737 MAX that it says Boeing must also address before the jet can return to service. It is understood it was discovered during a simulator test last week. As a consequence of the new discovery, it is unlikely any planned certification test flight will be scheduled before July 8 at the earliest, after which the FAA will still require an additional two to three weeks to scrutinise the flight data before deciding whether or not to allow the jet to return to service.

Up until now, Boeing has been working on a software upgrade to the MCAS stall-prevention
system which is believed to have been the root cause of both the Lion Air crash in Indonesia in October last year and the Ethiopian Airlines crash in March this year, which resulted in the combined loss of 346 lives. “On the most recent issue, the FAA’s process is designed to discover and highlight potential risks. The FAA recently found a potential risk that Boeing must mitigate,” the
FAA said in the statement emailed to the Reuters news agency. “The FAA will lift the aircraft’s prohibition order when we deem it is safe to do so.”


Singapore Airlines and Malaysia Airlines step up cooperation

Singapore Airlines (SIA) and Malaysia Airlines Berhad (MAB) have inked a Memorandum of Understanding (MOU) to significantly step up co-operative ties.

Under the terms of the MOU, the two airline groups will explore a wide-ranging strategic partnership to build on their existing codeshare agreement that covers flights between Singapore and Malaysia. Enhanced ties could include a significant expansion of codeshare flights beyond Singapore-Malaysia routes, as well as enhancements on the frequent flyer programme front.

Other potential co-operation could involve cargo as well as maintenance, repair and overhaul services. All these are subject to obtaining the necessary regulatory approvals. A formal agreement is intended to be finalised in the coming months and will also include SIA subsidiaries SilkAir and Scoot, as well as Firefly, the sister airline of MAB.

DAE signs new US$440 million unsecured revolving credit facility

Dubai Aerospace Enterprise (DAE) has signed a new long-term unsecured revolving credit facility with First Abu Dhabi Bank PJSC and HSBC Bank Middle East Limited as Bookrunners and Mandated Lead Arrangers.

Following an oversubscription in syndication the Facility was closed at an amount of US$440 million with a group of 12 lenders. The Facility will support the future financing needs of the business.


Moscow Domodedovo Airport to join NetZero2050 commitment

Moscow Domodedovo Airport has become the first Russian airport to sign ‘NetZero2050’ resolution during the 29th ACI EUROPE Annual General Assembly. The initiative addresses global climate change. Within the frameworks of ‘NetZero2050’ resolution, 194 airports representing 24 countries across the globe have committed to reaching net zero carbon emissions by 2050. The initiative will lead to annual CO2 emissions reductions of 3.46 million tons by 2050, considering European airports’ current traffic volumes and its estimated carbon footprint.

Dr Michael Kerkloh, President of ACI EUROPE and CEO of Munich Airport commented “Europe’s airports have been leading climate action with annual reductions announced every year for the past decade. 43 of them have actually become carbon neutral, supported by the global industry standard Airport Carbon Accreditation. However, today’s commitment brings a new dimension to this – no offsets. Crucially, with its NetZero2050 commitment, the airport industry is aligning itself with the Paris Agreement and the new Climate goal adopted just last week by the EU.”

Transport Canada Civil Aviation (TCCA) successfully completes audit of AJW Technique

AJW Technique, the maintenance hub for the AJW Group's component repair and overhaul service, based in Montreal, has undertaken the Transport Canada Civil Aviation (TCCA) Process Inspection (PI) with zero findings and zero observations.

In addition to a detailed review of the large number of work orders, the TCCA also audited the Oxygen Mask facility at AJW Technique and concluded that the facility, the work and records were of a high quality.

TCCA approval is a pre-requisite for any organisation in Canada to perform maintenance services on aircraft components and issue certificates to fly.


BOC Aviation delivers Boeing 737-800NG to Skymark Airlines

BOC Aviation has delivered the final Boeing 737-800NG aircraft from its orderbook. This marks an 18 year association with the Next Generation programme. During this period, the Company took delivery of 209 Boeing 737 Next Generation aircraft, including 161 737-800NG aircraft. 

Today’s aircraft has been delivered to Skymark Airlines and will mark BOC Aviation's ten year business anniversary with Skymark. The aircraft is powered by CFM International CFM56 Engines.

American Airlines to retire its fleet of 26 MD-80s

As part of its strategy of having “the youngest fleet of global network carriers”, American Airlines has announced it is to retire the final 26 of its original mainline fleet of 30 MD-80 aircraft
nicknamed “Mad Dog”. The final flight, Flight 80, will leave the carrier’s main base at Dallas Fort Worth International Airport, Texas for Chicago O’Hare International Airport on September 4, after which it will be ferried to Roswell International Air Center in New Mexico.

In what American Airlines describes as a “bittersweet but well-earned retirement” the MD-80, also known as the Super 80, was the carrier’s workhorse during the 1980s. American Airlines took delivery of its first MD-80 in 1983 according to Boeing’s order and delivery log. The current average age of the fleet of 26 “Mad Dogs” is over 20 years.

American Airlines is believed to operate 957 aircraft in its mainline fleet, with a further 607 aircraft in its regional fleet. In 2018 it placed a combined order for an additional 47 Boeing 787- 8
and 787-9 Dreamliners to take the place of its aging 767s and other older, wide-body models. Delivery of the Dreamliners is scheduled to being in 2020. In addition to starting to take delivery of Airbus A321neo jets this year, American Airlines also placed an order at the Paris Air Show on June 19 for a total of 50 of the new A321 XLR (Xtra Long Range) jet, which included a conversion of 30 previously ordered A321neos.

While the retirement date for the “Mad Dog” has been confirmed, American Airlines is still uncertain as to when its fleet of Boeing 737 MAXs will become operational again. Having previously penciled in August 19 as a return-to-the-skies date, this has been postponed for a second time, now aiming for early September.

Magellan Group

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