Thursday, July 25th, 2019

Kenya’s parliament votes to nationalise loss-making Kenya Airways

On Tuesday, July 23, Kenya’s parliament voted in favour of nationalising the country’s flag-carrying airline in a bid to help it overcome problems with mounting debts. With a failed expansion program behind it and a slump in air travel which forced the carrier to restructure US$2 billion of debt in 2017, rather than allow Kenya Airways to take over the profitable running of Nairobi’s main airport, the country’s lawmakers proposed an alternative solution.

Currently the carrier is 48.9% government-owned and with Air France-KLM holding a 7.8% stake. The Kenyan transport committee has proposed nationalisation that would see the struggling carrier operate more along the lines of profitable Ethiopian Airlines, which is state owned. The Ethiopian government runs air transport assets including airports and fuelling operations under a single company, using funds from the more profitable parts to support other elements, including its airline.

The transport committee’s report has proposed that Kenya set up an aviation holding company with four subsidiaries, one of which would run Kenya Airways, while another would operate Nairobi’s main international airport. The committee’s report also recommended the holding company be given tax concessions for a period to be determined and that it be exempted from paying excise duty on all goods, including jet fuel.

Commenting on the proposal, Kenya Airways Chairman Michael Joseph told Reuters the vote was “great news”. Esther Koimett, the principal secretary at the ministry of transport stated that: “The government is keen to take a consolidated view of aviation assets of the country in order to make sure they work in a coherent and efficient way to support the (Nairobi aviation) hub,” dismissing concerns that nationalisation could lead to further mismanagement as Kenya’s state-owned enterprises sector is riddled with problems allegedly caused by theft and poor management.

VAS Aero

Courts reject BA’s attempts to halt impending pilots’ strike

British Airways’ (BA) attempts to get a high-court injunction against its pilots’ threatened strike has failed. Rather than return to the negotiating table, BA will now look to appeal the decision, though no date has been given for this.

Despite over 90% of BA’s other staff, represented by unions including Unite and GMB, looking to accept an 11.5% pay deal spread over three years, the British Airline Pilots Association (BALPA) recommended rejection of the offer which was ratified by ballot with 93% of BA’s 4,000 pilots voting in favor of strike action. BA’s grounds for a proposed injunction were that there were flaws in the ballot papers submitted to pilots and that the union had failed to provide BA with details of the vote for each category of pilots, i.e. their rank and the fleet they worked on. Commenting on the decision, BALPA’s general secretary, Brian Strutton, said: “I’ve just heard from British Airways that instead of coming back to the negotiating table with us they’re going to appeal. Now that means the next few days, maybe the next week, is going to be spent preparing for an appeal hearing, whereas I’d actually rather they came back to Acas and tried to find a resolution with us.”

A spokesperson for British Airways said: “We are very disappointed with today’s decision. We will continue to pursue every avenue to protect the holidays of thousands of our customers this summer.

WestJet receives securityholder support for acquisition by Onex

WestJet Airlines' shareholders and optionholders have overwhelmingly voted to approve its previously announced proposed transaction with Onex Corporation, at a special meeting held July 23.  Of the votes cast at the Meeting, more than 92.5% of shareholders and optionholders who voted were in favour of the proposed transaction.

WestJet and Onex entered into a definitive agreement on May 12, 2019 for the proposed acquisition of WestJet by Onex under a plan of arrangement, pursuant to which each outstanding share of WestJet will be exchanged for CA$31.00 in cash subject to the terms and conditions of the Arrangement Agreement, following which WestJet will operate as a privately-held company.

Magellan Group

GE and XTI to study hybrid propulsion solution for TriFan 600 with GE's Catalyst

XTI Aircraft Company has selected GE’s CatalystTM engine as the core of its TriFan 600 hybrid-electric propulsion system. The two companies will work together to define a series hybrid architecture that will meet the TriFan performance requirements.

GE’s Catalyst is the first clean-sheet turboprop engine to hit the general aviation market in more than 30 years, enabling better performance through proven GE commercial technology. Operating as a series hybrid generator, GE’s Catalyst is designed to answer the propulsion and system needs of aircraft in the emerging megawatt hybrid propulsion market.

It currently has 98 patented technologies and is the first engine in its class to introduce two stages of variable stator vanes, cooled high-pressure turbine blades and more 3-D printed parts than any other commercial engine in history. It performs at an industry-best 16:1 overall pressure ratio. These key technologies enable GE’s Catalyst to extract more power at altitude, as well as excess thermodynamic power for growth in aircraft capability over the lifetime of a system.

Catalyst is designed to incorporate a Full Authority Digital Engine Control (FADEC) to allow simpler integration with the aircraft’s autopilot, flight control systems, and avionics, enabling seamless
control for the pilot while protecting all engine limits in all phases of flight.

The TriFan 600 will have the speed, range and comfort of a business jet and the ability to take off and land vertically, like a helicopter. Using three ducted fans, the TriFan 600 lifts off vertically. Its two wing fans then rotate forward for a seamless transition to cruise speed and its initial climb. It will reach 30,000 feet and cruise to the destination as a highly efficient business aircraft. The TriFan 600 will incorporate advanced safety features, including autopilot and computerized controls for takeoff and landing.

Vietstar Airlines receives Aircraft Operator Certificate

The Vietnam Civil Aviation Authority Monday granted the Aircraft Operator Certificate (AOC) to Vietstar Airlines, making it the sixth airline in Vietnam. The AOC is a certificate approved by a regulatory authority, allowing a carrier to operate aircraft for commercial purposes within a specified scope of activities.

Vietstar Airlines is allowed to operate two types of aircrafts including Embraer Legacy 600, and Beechcraft King Air B300. Vietstar Airlines was founded in 2011 with a registered capital of VND400 billion (US$17.6 million). It has been providing ground handling, aircraft maintenance and pilot training services since. In 2015, it sought permission to flying passengers and cargo, but was asked to raise its registered capital before it could get a license. It has since raised its charter capital to VND800 billion (US$34.33 million) and in September 2016, the Ministry of Transport's aviation department said Vietstar Airlines was qualified to get the license for offering passenger and cargo transport services.Vietstar has targeted to serve 500,000 passengers and carry 32,000 tons of cargo in the first year of operation.

At present, national flag carrier Vietnam Airlines, two budget carriers, Vietjet Air and Jetstar Pacific, the Vietnam Air Services Company (VASCO) and new start-up Bamboo Airways, have been competing in a market that served some 50 million passengers last year, up 10.1% from 2017.


Boeing becomes sole provider of aftermarket parts for new Tecnam P2012 traveller

Boeing has signed a multiyear agreement with Tecnam to be the sole provider of aftermarket spare parts and distribution services for the P2012 Traveller, Tecnam’s first commuter airline aircraft.

Boeing will assume distribution responsibilities, including forecasting, ordering and delivering all original equipment manufacturer (OEM) genuine replacement parts for the P2012 Traveller through its Aviall distribution network.

The P2012 has completed European Aviation Safety Agency (EASA) certification and Federal Aviation Association (FAA) certification and is ready to be delivered to Tecnam’s launch customer, Boston-based regional airline Cape Air.

Tecnam currently utilizes Boeing’s navigation and charting data through an existing agreement with Jeppesen.

Smartwings selects Airinmar’s component Value Engineering Services for optimal cost control

AAR subsidiary Airinmar has signed a three-year agreement with Smartwings, a Czech airline, to provide component Value Engineering Services for maximum cost savings.

In May, Airinmar began applying its Value Engineering expertise and in-house support systems to identify and deliver opportunities to reduce the cost of maintenance on a wide range of aircraft equipment, including landing gear, nacelles, avionics, hydro-mechanical, actuation, interior components and more.

Airinmar’s Value Engineering Services analyzes all costs associated with the repair process, including price quotes from suppliers and service vendors, labor, flight-hour agreements, and power-by-the-hour (PBH) pricing and warranties. Based on the data analyses and findings, Airinmar identifies for cost reductions, as well as process improvements.

TP Aerospace

Hi Airlines of South Korea takes delivery of two ATR 72-500s

Skyworld Aviation and Peter Greensmith of Papa Golf Aviation have partnered up to arrange the sale of two ATR 72-500 aircraft to Hi Airlines of South Korea. The aircraft were previously in operation with Air Tahiti. Serial number 862 was the first to deliver to Hi Airlines on April 5, 2019, with the second, serial number 806, following on July 8, 2019.

Hi Airlines is a new airline based in Seoul, South Korea. The airline will initially focus on domestic routes utilising a fleet of ATR 72’s. By 2020, the airline plans to start short haul regional routes and later an International schedule.

Boeing reports biggest ever second quarter loss of close to US$3 billion

The Boeing Company has reported second-quarter revenue of US$15.8 billion, GAAP net loss of (US$2.9) billion, loss per share of (US$5.21) and core loss per share (non-GAAP) of (US$5.82), reflecting the previously announced 737 MAX charge (which reduced revenue by US$5.6 billion and earnings by US$8.74 per share) as well as lower 737 deliveries partially offset by higher defense and services volume. Boeing recorded operating cash flow of (US$0.6) billion and paid US$1.2 billion of dividends.

The previously issued 2019 financial guidance does not reflect 737 MAX impacts. Due to the uncertainty of the timing and conditions surrounding return to service of the 737 MAX fleet, new guidance will be issued at a future date. Boeing is working very closely with the FAA on the process they have laid out to certify the 737 MAX software update and safely return the MAX to service. Disciplined development and testing is underway and Boeing said it will submit the final software package to the FAA once they have satisfied all of their certification requirements. Regulatory authorities will determine the process for certifying the MAX software and training updates as well as the timing for lifting the grounding order.

Boeing also reported that the 777X program is progressing well through pre-flight testing. While the company is still targeting late 2020 for first delivery of the 777X, there is significant risk to this schedule given engine challenges, which are delaying first flight until early 2020. 

Commercial Airplanes backlog remains healthy with more than 5,500 airplanes valued at US$390 billion.

Beach Aviation

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