Friday, October 25th, 2019

Norwegian shares jump as plane deal and increased earnings reduce financial pressure

Stock in Norwegian Air (Norwegian) soared by as much as 23% as the Scandinavian airline not only announced a Q3 net income of NOK1.67 billion, up from a previously forecast NOK 1.47 billion, but also announced a leasing deal to offload 27 new Airbus jets it is committed to purchasing.

Norwegian has raised its 2019 savings goal and outlined plans to cut capacity while increasing operating profit by NOK4 billion over two years. The carrier has also finalized a joint venture deal with China Construction Bank where the latter will take a 70% stake in a new leasing company which will purchase the 27 Airbus A320neo jets Norwegian is committed to buying between 2020 and 2023. Norwegian will look to transfer additional planes to the leasing joint venture, while these 27 aircraft will save US$1.5 billion in capital expenditure, helping to reduce its NOK61.7 billion debt.

“This company is pulling out all the stops to get better,” said Bernstein analyst Daniel Roeska, who recently warned that Norwegian was approaching a key debt default threshold. “With a potential gain of up to US$10 million per aircraft, it could remove some of the pressure on the equity covenant,” Roeska said in a note to clients according to Reuters news agency.  The carrier has cut its spending guidance by US$200 million this year and has raised it by US$100 million for 2020 as it adjusts to the grounding of the 737 MAX, which it expects will return to service in March at the earliest, according to Chief Executive Geir Karlsen.

Full-year cost cuts will amount to NOK2.3 billion, an improvement on the NOK2 billion predicted. Norwegian has also narrowed its operating profit goal to between NOK6.1 and NOK6.5 billion from NOK6-7 billion in earnings before interest, taxes, depreciation, amortization and restructuring. (US$1.00 = NOK9.13 at time of publication.)


Jet ConneX activated on over 600 business jets worldwide

Inmarsat’s Jet ConneX (JX) business aviation inflight Wi-Fi solution has now been installed and activated on over 600 business jets worldwide.

The milestone was celebrated at NBAA 2019 in Las Vegas, USA, the business aviation exhibition, highlighting the rapid uptake of Jet ConneX services in just under three years of commercial availability. Powered by Inmarsat’s global Ka-band satellite network, Jet ConneX offers a reliable, consistent and high-speed Wi-Fi experience, bringing business travellers a level of connectivity in the air that has previously only been available on the ground. Installations have been growing rapidly, with a 50% increase in the past year alone.

The latest installation milestone follows a series of announcements this year detailing Inmarsat’s fully-funded development roadmap for its global Ka-band network, Global Xpress (GX), which currently consists of four high-throughput satellites. The next evolution of the network will
deliver eight additional payloads, marking a transformative step-change in inflight broadband capabilities. As part of this programme, Inmarsat will also become the only provider of inflight connectivity in the Arctic region.


Spirit Airlines and Airbus sign MoU for up to 100 A320neo Family aircraft

Airbus and Florida-based ultra-low-cost carrier Spirit Airlines have agreed to a Memorandum of Understanding for the airline to acquire up to 100 A320neo Family aircraft. Spirit announced its intention to place firm orders for a mix of A319neo, A320neo, and A321neo to meet its future fleet requirements.

“This new order represents another milestone for Spirit,” said Spirit Airlines’ President and CEO Ted Christie. “The additional aircraft will be used to support Spirit’s growth as we add new destinations and expand our network across the U.S., Latin America, and the Caribbean. We look forward to working with our valued partners at Airbus to finalise our agreement.”

Qantas posts first-quarter full-year 2020 revenue of AU$4.56 billion

The Qantas Group continued to deliver revenue growth in the first quarter of FY20, up 1.8% to AU$4.56 billion compared with AU$4.49 billion in the prior corresponding period. Group Unit Revenue increased 2.1% versus the prior corresponding period.

Total Group capacity was down 0.2%, driven by a 0.6% decrease for Group International, while Group Domestic increased by 0.5%, due largely to growth in the resources market.

Group International Unit Revenue increased by 4.4%. This was led by a reduction in competitor capacity as well as benefits of network and fleet changes in Qantas International, which had its own capacity decrease of 2.5% and a Unit Revenue increase of over 6%.

Protests in Hong Kong will negatively impact the Group’s first half profit performance by AU$25 million, with ongoing capacity reduction in place to minimise the second half impact.

VAS Aero

The German Armed Forces take delivery of first NH90 Sea Lion helicopter

Airbus Helicopters has delivered the first NH90 Sea Lion naval multi-role helicopter to the
Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), with a further two to be delivered by the end of the year.

In total, 18 Sea Lions have been ordered for the Germany Navy, with deliveries expected to be completed in 2022. The selection of the Sea Lion, as the successor to the Sea King, was made in March 2013 and the corresponding contract was signed in June 2015.

When deployed, NH90 Sea Lions will take on a wide range of roles including search and rescue (SAR), maritime reconnaissance, special forces as well as personnel and material transportation missions. In addition to its land-based use, the Sea Lion will also operate on Type 702 (Berlin class) combat support ships.


Embraer and Azul sign Flight Hour Repair Management Program contract

Embraer has signed a multiyear Flight Hour Repair Management Program contract with Azul Linhas Aéreas Brasileiras to provide materials support for the carrier’s fleet of first generation E-Jets of commercial aircraft E190 and E195.

Through Embraer’s TechCare portfolio of solutions, the multi-year agreement covers more than 300
repairable part numbers and includes both materials and engineering services supported from Embraer's spare parts facility in Ft. Lauderdale, Florida, USA.

With this agreement, Azul now secures the OEM state-of-the-art support for its entire Embraer fleet, including the airline’s new E2 fleet, the new generation of the E-Jets family, which is already covered by Embraer Pool Program. Azul has relied on Embraer for its materials requirements since 2008, when it began operating their first generation of E-Jets, supported by Embraer materials solutions.

American Airlines Group reports solid third-quarter profit

American Airlines has posted pre-tax earnings excluding net special items for the third quarter of 2019 of US$835 million, a 16% year-over-year increase from the third quarter of 2018. Excluding net special items, net income was US$630 million.

Strong passenger demand drove a 3% year-over-year increase in third-quarter 2019 total revenue to a record US$11.9 billion. Driven by a 3-percentage point increase in total passenger load factor, passenger revenue per available seat mile (PRASM) grew 3% to 14.50 cents. Cargo revenue decreased 20% to US$208 million due primarily to a 17% decrease in cargo ton miles. Other revenue was down 4% to US$708 million. Third-quarter 2019 TRASM increased by 2% year over year to 15.71 cents on a 1% increase in total available seat miles, marking the 12th consecutive quarter of growth.

Total third-quarter 2019 operating expenses were US$11.1 billion, up 2% year over year. Total operating cost per available seat mile (CASM) was 14.64 cents in the third quarter of 2019, up 1% from the third quarter of 2018. Excluding fuel and net special items, third-quarter 2019 CASM was 11.07 cents, up 5% year over year due primarily to higher salaries and benefits, maintenance and regional expense, and lower than planned capacity.

American has removed all MAX flying from its flight schedule through Jan. 15, 2020. With the flight cancellations extending through the remainder of 2019, the company now expects the MAX cancellations will negatively impact its full-year 2019 pre-tax income by approximately US$540 million.


CDB Aviation delivers first of four Embraer E190 aircraft to Amaszonas

CDB Aviation, a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., (CDB Leasing), has delivered the first of four Embraer E190 aircraft to Bolivia-based Amaszonas Línea Aérea (Amaszonas).

The Embraer regional jets, configured with 110 seats in a single class layout, will modernize the Amaszonas fleet, offering more than double the capacity. The E190s will serve the carrier’s growing route network, which connects its main hub at Santa Cruz de la Sierra’s Viru Viru Airport to domestic and international destinations. The airline will also operate the E190s at Montevideo’s Carrasco International Airport in the future. The three remaining jets are anticipated to join the carrier’s fleet between the end of October and early January 2020.

Skyworld Aviation arranges sale of ATR 72-500, and onward lease to FlyCAA

Skyworld Aviation has sold an ATR 72-500 to a U.S.-based regional aircraft leasing firm. Serial number 685, re-registered as 9S-AAD, will operate with FlyCAA Congo under a lease arrangement, also facilitated by Skyworld. The aircraft was previously operated by Vietnam Airlines and arrived in Kinshasa on October 20, 2019.

FlyCAA now operates two ATR 72-500s and one A321. The airline was established as CAA - Compagnie Africaine d’Aviation in 1992. The operator specialises in scheduled passenger operations based at Kinshasa, serving domestic destinations in the Democratic Republic of Congo.

ASI Aero

Aireon signs agreement with COCESNA to expand global air traffic surveillance

Aireon (Aireon) and COCESNA (Corporación Centroamericana de Servicios de Navegación Aérea) have signed an agreement to deploy space-based Automatic Dependent Surveillance-Broadcast (ADS-B) in Belize, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The agreement also establishes a strategic partnership to enhance the operations and collaboration of air traffic surveillance in the Central American region.

Spanning the entire Central American flight information region (FIR), COCESNA’s region encompasses more than 2.6 million square kilometers terrestrial airspace and extensive oceanic areas in the Caribbean Sea and Pacific Ocean. Its central location in the Americas positions COCESNA as the major air traffic control provider at the crossroads of the Caribbean, North, South and Central America.

In addition to deploying space-based ADS-B throughout the region and within its member States, this agreement establishes a partnership by which COCESNA can utilize the Aireon data to support its leading role in advancing operations across the region. The strategic partnership brings a greater level of collaboration to the existing agreement and also enables the use of space-based ADS-B data for airspace and traffic optimization projects such as the CANSO ATFM Data Exchange Network for the Americas (CADENA) initiative.


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

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