Monday, November 11th, 2019

FAA rejects Boeing 737 documentation – American and Southwest Airlines delay its return to service until March 2020

With the U.S. Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA) flagging a number of issues during a documentation audit of how the latest 737 MAX software update was developed, the outcome is a number of carriers having to further amend their schedules to take into account the fact that the grounded jet is unlikely now to receive FAA approval to return to the skies until the beginning of the new year.

The FAA has always made it clear that it will require a full month subsequent to any successful test flight for the software update and additional safety improvements to the 737 MAX, while the EASA would require approximately two months. According to Boeing spokesman Gordon Johndroe, the company: “provided technical documentation to the regulators as part of the software validation process. The documentation was complete, and it was provided in a format consistent with past submissions. Regulators have requested that the information be conveyed in a different form, and the documentation is being revised accordingly.”

However, according to Reuters news agency, one person briefed on the matter characterized the issue differently and said Boeing’s paperwork had gaps, was substandard and this meant regulators could not complete the audit, a crucial step before the plane can be certified to return to service. Southwest Airlines and American Airlines Group Inc confirmed on Friday they are extending Boeing 737 MAX flight cancellations until early March. Between them the two carriers are having to cancel 300 flights a day as a result of the MAX grounding.


Air Partner opens office in Dubai to grow presence in Middle East

Air Partner plc, the global aviation services group, has opened its new office in Dubai as it looks to extend its offering to the Middle East and grow market share in the region.

The office, which is located in Dubai Multi Commodities Centre (DMCC), offers Air Partner’s full suite of Charter solutions, comprising Group Charter, Private Jets and Freight. In addition, clients have access to the Group’s Consulting & Training services in Aviation Safety Management and Fatigue Risk Management.

It is headed up by Jobby George, who was recently appointed as General Manager. George has extensive experience in VIP and commercial aviation in the region, having previously worked at Chapman Freeborn in Dubai for nine years, most recently as Commercial Manager for Middle East & India. Prior to this, he held sales and finance roles at Air Partner for five years, also in Dubai.

The Dubai office is the fourth Air Partner office to be opened in the last 18 months, following openings in Los Angeles in June 2018 and Houston and Singapore in early 2019, as the Group continues to invest for future organic growth.

SAS reports strong passenger figures and improved unit revenue, revises outlook

SAS’ outlook in the third quarter report was “that it will be challenging to reach a positive result before tax and items affecting comparability in fiscal year 2019”. As a result of strong passenger figures and an improved unit revenue, the outlook is revised as SAS’ earnings before tax and items affecting comparability is estimated to be in the range of SEK 700-800 million for the fiscal year 2019.

SAS’ total traffic capacity increased with 2.2% and the number of passengers increased with 3.6% compared to October 2018. Regularity and punctuality also showed a strong improvement with an increase of 0.8 percentage points and 1.5 points respectively.

Domestic revenue passenger kilometers (RPK) increased by 5.7% across the three Scandinavian countries. The growth was also substantial on European/Intrascandinavian routes where RPK increased with 5.5%. Total passenger load factor increased with 0.7 points to 76.3% and supported an improved currency adjusted unit revenue and yield, which increased with 2.3% and 1.6% respectively.

GA Telesis

BOC names news CCO for Asia Pacific and the Middle East

BOC Aviation has announced a change to its senior management due to retirement. Gao Jinyue (Chris) will retire from his role as Chief Commercial Officer (Asia Pacific and the Middle East) with effect from November 9, 2019. Gao Jinyue joined BOC Aviation as a Non-executive Board Director in December 2006, and joined the senior management team as Chief Commercial Officer in December 2014.

Replacing Gao Jinyue as Chief Commercial Officer (Asia Pacific and the Middle East) with effect from November 11, 2019 is Deng Lei (Lenny). Deng Lei is responsible for overseeing all revenue activities within the Asia Pacific and the Middle East and is primarily responsible for airline leasing and sales within the region.

Vietnam Airlines expands relationship with Sabre

Sabre Corporation has signed a multi-million-dollar agreement with long-standing customer Vietnam Airlines. The carrier will adopt Sabre Revenue Optimizer and SabreSonic Inventory solutions to enable responsive real-time origin & destination (O&D) revenue management. This will further strengthen Vietnam Airlines’ forecasting and inventory control capabilities, helping maximize its revenue and setting the foundation for dynamic offer creation.


Héroux-Devtek posts solid fiscal 2020 second-quarter results

Héroux-Devtek, a leading international manufacturer of aerospace products, has reported strong results for the second quarter ended September 30, 2019.

Consolidated sales grew 52.1% to CA$145.5 million, up from CA$95.6 million last year, including a 14.3% organic growth and a solid performance by the Corporation's recent acquisitions, which contributed CA$36.1 million. Commercial sales grew 38.1% from CA$47.0 million to CA$64.9 million, while defence sales were up 65.7%, from CA$48.6 million to CA80.6 million.

Gross profit as a percentage of sales decreased during the second quarter to 15.3%, from 16.2% last year, mainly due to the 0.6% negative net impact of exchange rate fluctuations and higher manufacturing costs at the Longueuil facility. These negative factors were partially offset by the positive impact of the CESA acquisition.

Operating income increased to CA$10.5 million, or 7.2% of sales, up from CA$5.3 million, or 5.5% of sales last year, mainly driven by lower selling and administrative expenses as a percentage of sales. Last year's operating income also reflected non-recurring acquisition-related costs, as opposed to this year. Adjusted EBITDA, which excludes non-recurring items, stood at CA$21.5 million, or 14.8% of sales, compared with $13.2 million, or 13.8% of sales, a year ago. For the same period, EPS doubled from CA$0.09 last year to CA$0.18 this quarter, while adjusted EPS grew 50%, from CA$0.12 last year to CA$0.18 in Q2.

Airbus unveils first Canadian-made A220-300 aircraft destined to a Canadian airline

Air Canada’s first Airbus A220 was unveiled last week when it rolled out of the painting hangar at the A220 final assembly line in Mirabel. In December, Air Canada will become the first Canadian airline to take delivery of this Canadian-designed and developed aircraft when it receives the first of its 45 A220s on order. The A220 features an innovative cabin design, as well as significantly lower emissions and a reduced noise footprint.

Now that the aircraft is decked out in Air Canada’s livery, it has moved to pre-flight activities in the A220 flight line hangar in Mirabel, before taking off for its first flight later this fall.

Currently, there are 94 A220 aircraft flying with six operators on regional and transcontinental routes in Asia, America, Europe, the Middle East and Africa, proving the great versatility of Airbus’ latest family member. The A220 has an order book of 530 aircraft as of the end of October 2019.


Fly Leasing reports third-quarter 2019 financial results

Fly Leasing has reported its financial results for the third-quarter of 2019. The company reported net income of US$51.7 million and adjusted net income of US$59.8 million. Fly Leasing sold eight aircraft for a gain of US$38.9 million, a 17% premium to book value. During the quarter the company purchased two aircraft for US$53.7 million.

Fly Leasing's book value was US$25.85 per share at quarter-end, a 20% increase since December 31, 2018 and net debt to equity ratio of 2.6x

Boeing delivers first P-8A Poseidon to United Kingdom’s Royal Air Force

Last week Boeing has delivered the first of nine P-8A Poseidon maritime patrol aircraft (MPA) to the United Kingdom Royal Air Force (RAF). The United Kingdom is acquiring the multi-mission aircraft through the Foreign Military Sales process with the U.S. Navy. The P-8A Poseidon replaces the U.K.’s retired Nimrod aircraft.

Boeing formally delivered the aircraft on Oct. 29 to the U.S. Navy during a ceremony at the Boeing Military Delivery Center in Tukwila, Wash. From Tukwila, the aircraft flew to the U.S. Navy’s Naval Air Station Jacksonville, Florida, where U.S. Navy leaders officially turn the aircraft over to the United Kingdom. At JAX, Royal Air Force crew will work with the aircraft before flying it to the United Kingdom in January 2020. All nine P-8A aircraft will be based at Lossiemouth, Scotland.

As part of a collaborative program with the U.S. Navy, pilots and maintainers from the United Kingdom's RAF have been stationed at Naval Air Station JAX since 2012. Called “Project Seedcorn,” the arrangement has allowed RAF members to fly the P-8A with Patrol Squadron Thirty
(VP-30), the Navy's Maritime Patrol and Reconnaissance Fleet Replacement Squadron, to maintain their maritime patrol skills in advance of receiving the P-8A.

TP Aerospace

Embraer elects Antonio Garcia as new CFO

Embraer's Board of Directors has elected Antonio Carlos Garcia as the company’s new chief financial officer and investor relations officer, replacing Nelson Salgado, who will serve as Embraer’s chief operations officer. The change will be effective as of January 1, 2020 and Salgado will remain in his current position as Chief Financial Officer and Investor Relations Officer until January 1, 2020.

Antonio Garcia has extensive experience in Finance, Accounting and Procurement at multinational companies. He worked for nine years at ThyssenKrupp, where he served as the global CFO of the Forged Technologies business unit, in Germany. Previously, he worked for six years at the ZF Group, in Brazil, and over 18 years at Siemens, in various business segments. Garcia earned a Bachelor’s degree in Accounting and a Master's degree in Business Administration.


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Dubai Airshow
November 17 - 21, 2019 – DWC, Dubai, UAE

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February 26 - 18, 2020 – Makuhari Messe, Chiba-city, Japan