Tuesday, August 13th, 2019

Sale of India’s Jet Airways under threat as two potential investors walk away

The sale of India’s Jet Airways has been thrown into doubt after two potential investors have backed away. Anil Agarwal, the head of Vedanta and whose family trust, Volcan, had investigated taking a stake in the failed airline has confirmed that there is no longer any interest from their side. Etihad, the Gulf carrier which has held a 24% stake in Jet Airways since 2013, has also confirmed that it has no intentions of investing further owing to the Indian carrier’s liabilities, stating that: “Etihad remained engaged in the process, but despite the endeavors of everyone involved there remained very significant issues relating to Jet’s previous liabilities.”

Expressions of interest (EOIs) in Jet Airways have to be submitted by August 13, and while there had been three EOIs submitted, that number is likely to be reduced to two with the withdrawal of Volcan. The only criterion that has been set for submission of an EOI is that any bidder must have a minimum net worth of 10 billion Indian rupees (US$140 million). With the current situation little different to that where Jet Airway’s lenders had previously requested submissions of EOIs and had failed to attract any firm bidders, the carrier is now stuck in what appears to be a state of limbo, which can only decrease any value left. The carrier ceased all operations in April this year after racking up over US$1 billion in debt, with over 90% of its planes grounded either through maintenance difficulties or aircraft being seized by lessors for lack of lease payments.

SR Technics

New Cambridge Airport Director has high hopes for growth

Cambridge Airport's new Director, Kevan Craske, has unveiled ambitious plans to increase business at the airport. Among his initiatives are major upgrades to the airport's navigational aids and a high profile marketing campaign to help attract more executive and light aviation customers.

Craske took up the permanent role as Airport Director last month with full responsibility for airport operations, air traffic services and fire and security, having been in post on an interim basis since the spring. He's been with the Marshall Aerospace and Defence Group since March 2010 and is seen as an industry heavyweight, with a track record for business improvement and strategic growth.

Willis Lease Finance posts quarterly pre-tax profit of US$21.8 million

Willis Lease Finance has reported pre-tax profit of US$21.8 million and total revenues of US$95.8 million in the second quarter of 2019. The Company’s second quarter 2019 pre-tax results were driven by continued revenue growth in its core leasing business and spare parts sales as well as gains associated with the active management of its portfolio. Aggregate lease rent and maintenance reserve revenues were US$71.5 million for the second quarter of 2019.

Total revenue increased by 21.7% to US$95.8 million in the second quarter of 2019 compared to US$78.7 million in the same quarter of 2018. Lease rent revenue was US$45.0 million in the second quarter of 2019; 4.5% growth from US$43.1 million in the same quarter of 2018. Quarterly maintenance reserve revenue increased by US$4.4 million, or 20.1%, to US$26.5 million in the second quarter of 2019, compared to US$22.0 million in the same quarter of 2018. Spare parts and equipment sales increased by 25.2% to US$14.6 million in the second quarter of 2019, compared to US$11.7 million in the same quarter of 2018. Other revenue increased by US$2.7 million to US$4.6 million in the second quarter of 2019, compared to US$1.9 million in the same quarter of 2018, primarily reflecting performance fees earned managing engines on behalf of a third party. Earnings before tax were US$21.8 million in the second quarter of 2019, compared to US$11.6 million in the same quarter of 2018 and were US$49.6 million year to date, compared to US$21.2 million in the first half of 2018.


Embraer Praetor 500 and Praetor 600 business jets make LABACE debut

Embraer will exhibit the new Praetor 500 and Praetor 600 business jets at LABACE, the largest business aviation show of Latin America. The Praetor jets, Embraer’s latest aircraft, are the most technologically advanced aircraft in their categories and they will be on static display from August 13–15 at Congonhas Airport, in São Paulo.

The Praetor 500 is a midsize jet with a continental range of 3,250 nautical miles (6,019 km) for up to nine passengers, capable of single-stop flights from São Paulo to any city in South America or to destinations in Europe or North America. The Praetor 600 is a super-midsize jet for up to 12 passengers, with an intercontinental range of 4,018 nautical miles (7,441 km), the farthest among its competitors, allowing for nonstop flights between São Paulo (Brazil) and Miami, Rio de Janeiro
(Brazil) and Fort Lauderdale, or Madrid (Spain) and Recife (Brazil).

Prague Airport is introducing Digital Signage in six languages

Digital signage, which was launched for passengers at Prague Airport and is located at the entrance to pier B in Terminal 1, is available in six language versions. The signage offers information displayed on digital screens and reflects the current traffic and passenger flow throughout the day. The new technology is now being tested. If it proves successful, the airport is planning to install it in other locations as part of its daily operations.

The new digital signage system can be found at the entrance to pier B in Terminal 1 and includes a total of eight screens. It responds in six selected languages depending on the specific locations from where passengers have come or to where they are going at any given moment. This means that during the day, active language versions change depending on the composition of the passenger flow. In addition to the standard Czech and English versions, the navigation also offers Arabic, Russian, Korean and Chinese, which are the main languages for passengers who may not be able to speak English well enough.

Thanks to its state-of-the-art technology, the signage system provides much more information than conventional information boards. In pier B, it shows passengers who are getting ready to depart which gate they have to go to and how many minutes they will need to get there. With the help of pictograms, passengers can learn about the services located in the vicinity, such as restaurants and bathrooms, as well as where they can find a first aid defibrillator. Passengers arriving in Prague can read which path to take to reach a specific part of the airport, such as passport control, how long it will take them to get there, which carousel will have their luggage, and what the current weather in Prague is. The digital signage system also displays, in a flexible and quick manner, necessary and clear information about any unexpected situation or non-standard operation at the airport.

Beach Aviation Group

Thomas Cook in talks to secure additional £150m with creditors

Thomas Cook has released that it is in advanced discussions with its largest shareholder, Fosun Tourism Group and its affiliates (Fosun), and its core lending banks on the key commercial principles on which they would make a substantial new capital investment as part of a proposed recapitalisation of the Group.

Since this announcement, Thomas Cook has made significant progress towards finalising the key transaction terms of the recapitalisation with Fosun, the Group’s core lending banks and subsequently with noteholders representing approximately 50% of the Company’s 2022 and 2023 senior notes.

The discussions with noteholders include the injection of additional capital on top of the
previously announced £750 million. This additional capital, of approximately £150 million, will provide further liquidity headroom through the coming 2019/20 winter cash low period and ensure the business can continue to invest in its strategy.

As stated in the Company’s announcement on 12 July 2019, the proposed recapitalisation will
require a reorganisation of the ownership of the Tour Operator and Airline businesses which would result in a significant amount of the Group's external bank debt (£650 million) and bond debt (€1.15bn) being converted into equity, resulting in a substantial deleveraging of the Group. Existing shareholders are therefore expected to be significantly diluted as part of the recapitalisation, although they may be given the opportunity to participate in the recapitalisation on
terms to be agreed between among others, the Company, Fosun, and the converting financial creditors. The Group expects to implement the recapitalisation in early October 2019.

The recapitalisation proposal remains subject to certain conditions including performance conditions, due diligence, further discussions and reaching agreement with a range of company stakeholders (including the pension trustees, noteholders, other financial creditors and Fosun’s shareholder approval), and receipt of any regulatory and anti-trust clearances or approvals.

Australia Post and Qantas Freight renew agreement

Australia Post and Qantas have expanded their domestic and international air freight agreement to support the growing demand for parcels.

Marking nearly a century of partnership between the two brands, it will benefit online shoppers and businesses across Australia by increasing capacity and providing greater network flexibility to meet customer expectations.

The seven-year agreement valued at over AU$1 billion will give Australia Post customers access to Qantas Freight’s dedicated freighter aircraft and priority access to the cargo space on up to 1,500 Qantas and Jetstar passenger flights to over 110 destinations each day, in addition to space on partner airlines globally.

It will also see the introduction of up to three Airbus A321P2Fs (Passenger to Freighter) to the freighter network used for Australia Post. Qantas will be the first airline to operate the A321 as a freighter aircraft.

Each A321P2F will add nearly 50% more capacity – or an additional nine tonnes – compared to the existing Boeing 737 freighters, with the first A321P2F due to enter the fleet in October 2020.

TP Aerospace

IAG reports July traffic up 4.9%

International Airlines Group (IAG) traffic in July 2019 increased by 4.9% versus the same period last year while IAG capacity rose by 3.9% versus the same period last year. The load factor for July increased 0.9 points to 88.8%

2020 will see Delta become largest U.S. carrier serving Tokyo Haneda Airport

Delta Air Lines (Delta) will move all its Tokyo-bound flights from Tokyo’s Narita Airport to the city’s closer and more convenient airport, Haneda, in March 2020. Subsequent to the move, the airline will become the largest U.S. carrier serving Japan’s capital city, with seven daily flights between Haneda and Seattle, Detroit, Atlanta, Honolulu, Minneapolis, Los Angeles and Portland. As part of its Asia-Pacific network strategy, Delta will also suspend flights between Narita and Nina Aquino Airport, Manila in March 2020, while launching a new daily flight between Incheon International Airport, Seoul, and Nina Aquino Airport, Manila.

In September the carrier intends to shelve its Narita to Singapore direct connection, though through its partnership with Korean Air, Delta passengers will still able to reach Singapore by flying to Incheon International Airport and then connecting onwards to Singapore with Korean Air. “We have proudly served Japan for more than 70 years and our commitment to our Tokyo legacy remains strong,” said Steve Sear, President - International and Executive Vice President - Global Sales. “This new service is a game-changer for Delta’s ability to offer competitive and comprehensive access to the city, which is one of the world’s most important business markets. It’s a win for our customers, giving them much quicker access to the city center, and it complements our overall strategy of growth across the Pacific.”

Magellan Group

Air Canada increases purchase price for Air Transat

Air Canada has agreed to increase the purchase price for the acquisition of all issued and outstanding shares of Transat A.T. , from CA$13 to CA$18 per share and have amended the Arrangement Agreement dated June 27, 2019 accordingly. Based on the increased consideration, the value of the all-cash transaction is approximately CA$720 million.

Air Canada has also entered into a lock-up and support agreement with Transat's largest shareholder, Letko Brosseau & Associates Inc., who beneficially owns or has control or direction over 7,277,104 Class B voting shares or approximately 19.3% of all issued and outstanding shares of Transat. Under the terms of its Lock-up and Support Agreement, Letko Brosseau has agreed to support and vote all of the Class B voting shares of Transat it controls at the Special Meeting of Shareholders of Transat on August 23, 2019 or at any adjournment or postponement thereof, in favour of Air Canada's acquisition of Transat.


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Engine Leasing Seminar
September 17, 2019 – Holiday Inn Kensington High Street, London, UK

Effective Risk Management in Aircraft Leasing and Aviation Finance
September 18, 2019 – Holiday Inn Kensington High Street, London, UK

Advanced Engineering 2019
October 30 - 31, 2019 – NEC, Birmingham, UK

EyeforTravel Revenue Optimization and Marketing Summit
November 26 - 27, 2019 – Hotel Novotel Amsterdam City, Amsterdam, NL