Friday, July 12th, 2019

Norwegian Air Shuttle CEO Bjørn Kjos steps down

After 17 years as the CEO of Norwegian Air Shuttle, Bjørn Kjos will leave the position and continue in a new role as an advisor to the Chairman, with effect from July 11th. Until Norwegian appoints a new CEO, CFO Geir Karlsen will act as interim CEO, while Chairman Niels Smedegaard will take on a more active role in the management.

Bjørn Kjos has been the Chief Executive Officer (CEO) of Norwegian since October 2002. He is one of the founding partners of Norwegian Air Shuttle and was the Chairman of the Board from 1993 to 1996. Kjos was also Chairman during the start-up of the Boeing 737 operation from June to September 2002.


First Air and Canadian North to begin merging operations

First Air and Canadian North have completed the transaction that will enable them to begin merging their operations into a strong and unified airline that will provide safe and sustainable air service to Northern customers and charter clients under the name ‘Canadian North’.

During the initial stages, First Air and Canadian North will continue to serve customers under two separate brands. Scheduled services customers will continue to book, fly and ship cargo with either airline, and charters clients, partners and vendors will also continue to work with the team members and departments they are familiar with. The integration is expected to take 18 to 24 months.

Vienna Airport to invest €500 million in terminal renovation

July 11, saw the ground-breaking ceremony for a large-scale terminal modernisation at Vienna Airport. A major investment of about €500 million is for the renovation of Terminal 2 and the Pier East and construction of a large additional building, the “T3 Southern Enlargement” with 70.000 m².

It is expected that Vienna Airport will be a construction site for four years. The advantages for passengers will be greater comfort in travelling, a new central security checkpoint, an additional baggage claim area, more space at the gates and attractive new shopping and food and beverage offerings.

SR Technics

VirginOrbit completes keydrop test

Virgin Orbit, Sir Richard Branson’s small satellite launch company, has successfully completed a keydrop test of its LauncherOne vehicle, the last major step in the development programof the company’s novel launch service. In the run-up to its first space shot, VirginOrbit has completed a steady progression of test flights with its “flying launch pad”

Cosmic Girl and LauncherOne vehicle — and today’s achievement marks the beginning of the company’s transition to its orbital test flight launch campaign. On this flight, Virgin Orbit released a fully built, fully loaded — although inert —LauncherOne rocket from Cosmic Girl, a modified Boeing 747 that serves as the rocket’s carrier aircraft. This latest test flight began with a takeoff from the Mojave Air and Space Port at Mojave, CA, at 8:43 A.M. Pacific; the drop itself occurred at 9:13 A.M. Pacific from an altitude of 35,000 feet over a testing range at Edwards Air Force Base.

The primary purpose of the test was to monitor the few critical seconds just after release, to ensure the rocket and aircraft separate cleanly and to observe how the rocket freefalls through the air. The drop test represents the last major step of a development program that began in 2015, focused not just on designing the LauncherOne vehicle but proving it out alongside the modified 747 that serves as the company’s carrier aircraft.

Norwegian posts increased revenue and reduced cost

Norwegian’s second quarter results are characterised by reduced growth and improved profitability, in line with the company’s strategy. Despite the reduced production growth and grounding of the Boeing 737 MAX aircraft, the underlying operating result before ownership costs more than doubled from the same quarter in 2018.

The underlying operating result before ownership costs was more than NOK 2.3 billion, the highest ever in a second quarter and NOK 1.2 billion higher than last year. The unit revenue (RASK) increased by 13% and the revenue per passenger per kilometer (yield) increased by 11%. For the second quarter, the total revenue was more than NOK 12 billion, an increase of 19% from the same period last year, primarily driven by intercontinental growth. Almost 10 million passengers flew with Norwegian this quarter, on par with the same quarter in 2018. The load factor was 88%, up 1.2 percentage points from last year.

Norwegian’s key priority is returning to profitability through a series of measures, including an optimised route portfolio and an extensive cost-reduction program. The production growth (ASK) in the second quarter was 6%, down from the peak growth of 48% in the second quarter of 2018. The company’s internal cost reduction program #Focus2019 continues with full effect and achieved cost reductions this quarter were NOK 554 million, consequently reaching the goal of NOK 1 billion so far in 2019.

The 737 MAX grounding has affected both demand, operating expenses and production negatively. Norwegian expects the negative impact on the 2019 results to be approximately NOK 700 million.

TP Aerospace

Indonesia’s domestic airfares soar – KPPU may investigate claims of price setting

Domestic travelers are feeling the pinch in Indonesia, the world’s fifth-largest domestic aviation market. Over the last year, despite government intervention to cap prices, the cost of airfares has virtually doubled on many domestic routes. The situation has been exacerbated by the fact that the country’s two principal airlines, Lion Air and Garuda, hold a 47% and 48% share of the Indonesian market, respectively, operating a virtual duopoly, with Air Indonesia only holding a 2.4% share of the market. Garuda also took over operational control of Sriwijaya Air last November.

According to Reuters news agency, since the cap on pricing, Garuda has changed its operating policy by slashing domestic seat capacity 15% and no longer offering heavily discounted fares. Ordinarily carriers will load prices for peak traveling times, and heavily discount them for quieter periods. This is no longer the case, with prices virtually uniform for all flights and set at near maximum-allowable rates across the board. According to Garuda data, passenger yields, which measure what each flier pays per kilometer, a proxy for average fares, rose 43% in the five months ended May 31 in Garuda’s domestic operation and were up 94% at Sriwijaya Air for the same period.

The increase in fare prices has had a far-reaching effect with the country’s largest airport, Jakarta Soekarno-Hatta International, seeing domestic traffic fall 22% in the first four months of the year to the lowest level since 2011. Hariyadi Sukamdani, chairman of Indonesia’s Hotel and Restaurants Association, said hotel occupancy rates were down 10% to 30% – depending on the region – for the first six months of 2019. The KPPU, Indonesia’s anti-monopoly agency is now investigating whether or not the two major carriers are operating a cartel, while also looking into Garuda’s business practices since it took over Sriwijaya Air. “We believe there is price setting,” KPPU Commissioner Guntur Saragih said, adding that the agency plans to say next week whether it will take the airlines to court.

Delta reports 2nd quarter revenue of US$12.5 billion

Delta Air Lines has reported financial results for the June quarter 2019. Delta’s adjusted operating revenue of US$12.5 billion for the June quarter improved 8.7%, US$1 billion higher than prior year quarter. This revenue result marks a record for the company, driven by improvements across Delta’s business, including a ten percent increase in premium product ticket revenue and double-digit percentage increases in loyalty and third-party maintenance revenue.
Adjusted earnings per share were US$2.35, reflecting a 32% increase year over year and US$1.8 billion of free cash flow.

Cargo revenue during the quarter declined 17% driven by lower volumes and yield. Other revenue declined by US$24 million as growth in loyalty and third-party maintenance was offset by US$176 million lower third-party refinery sales.


Aeroflot chooses Spatial to supply A321 Door Trainers

Spatial, a provider of cabin crew training simulators, has been chosen by Aeroflot to supply two A321 Door Trainers.

The Door Trainers will be used to train Aeroflot’s cabin crew to become completely proficient in the safe operation of the A321 aircraft emergency exits and doors including procedures for all normal, abnormal and emergency scenarios. The high-fidelity devices will simulate all faults that may ever be encountered on the A321 aircraft door types including door and handle jams, power assist failures, automatic and manual slide inflation failures and door indicator malfunctions.

The trainers will provide all legacy and current A321 exit types, including the A321NX ACF semi-automatic Over Wing Exit (OWE) - as well attendant stations, passenger seating, replica overhead stowage bins and both standard and emergency lighting. The simulators will be seamlessly controlled by an intuitive, easy to use Instructor Operator Station (IOS).

After being manufactured at Spatial’s state-of-the-art manufacturing facility in Dubai, the A321 Door Trainers will be installed at Aeroflot’s Crew Training Centre at Moscow’s Sheremetyevo Airport.

BOC Aviation delivers first of three Airbus A330 Freighter aircraft to Sichuan Airlines

BOC Aviation has delivered the first of three Airbus A330 Freighter aircraft committed for lease to Sichuan Airlines. All three aircraft are part of the Company’s existing owned and managed portfolio. The remaining two aircraft are scheduled for delivery to Sichuan Airlines in the second half of 2019.

Sichuan Airlines is a full service carrier with more than 270 routes carrying nearly 30 million passengers annually. Established over 30 years ago, Sichuan Airlines’ shareholders include three other airlines and its largest investor is the Sichuan provincial government. It currently operates an all-Airbus fleet with more than 140 single and twin-aisle aircraft.


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