Tuesday, May 22nd, 2018



Airlines faced with critical decision making as jet fuel prices rise

With fuel coming second only to wages as an airline’s greatest outgoing, a period of critical planning awaits them with rising prices coinciding with the traditionally busy summer season.
In 2018 alone jet fuel prices have risen 15 percent, while over the last twelve months they have risen by approximately 60 percent.

With schedules and ticket prices set many months in advance, today’s passengers are free from any likely change in strategy to combat rising fuel prices. More to the point, passengers are benefitting from anything up to a reduction of 9 percent on ticket costs compared to summer last year for international flights, and 6 percent for domestic flights. The result has seen airline capacity between the U.S and abroad rise by 4.3 percent compared to the same period last year.

The options available to carriers will likely come from one of three options – raise prices, trim less cost-effective routes, or charge for extras on no-frills flights. American Airlines has indicated it will be cutting one Chicago-Beijing flight from its schedule, while some South American routes will also be dropped. On the whole, airlines are reluctant to pare back route schedules as low-cost carriers are still looking to expand theirs.

However, with airlines facing stiff competition and passenger loyalty to any specific brand at a low, one wrong move could prove costly, and shareholders will always be quick to punish. Currently, airlines will be playing their own version of ‘chicken’ and will likely withhold making any radical changes to fares or schedules for as long as possible for fear of losing customers to their competitors.


Lufthansa Cargo adds direct freighter services to Chengdu

Lufthansa Cargo has further increased its freighter network in China by adding direct services to and from Chengdu (CTU). Since 5 May 2018, a Boeing 777F with flight number LH8410 departs Frankfurt every Monday and Saturday and returns from Chengdu every Tuesday and Sunday.

“We are very proud to now be serving the western Chinese mega city of Chengdu twice a week with Boeing 777 freighter flights. This extension to our network will allow us to offer solutions for the booming markets in the west of China”, says Frank Naeve, Vice President Asia Pacific at Lufthansa Cargo.

Chengdu is the carrier’s fifth freighter destination in China and joins Shanghai, Beijing, Guangzhou and Hong Kong. In addition, Lufthansa Cargo offers the

Ryanair full year 2018 profits rise 10% to €1.45 billion

Ryanair has reported a 10% increase in full year profit after tax to €1.45bn, as lower fares (down 3%) stimulated 9% traffic growth to over 130m guests and 95% load factor. Average fares last year declined by 3% and traffic grew 9% to over 130m with Germany, Italy and Spain being the 3 largest growth markets. Ryanair expects above average EU capacity growth to continue into FY19, which will have a downward effect on fares.

During full-year 2018, which ended March 31, Ryanair took delivery of 50 new B737’s, and increased its Boeing order to 135 firm MAX-200 Gamechangers, with a further 75 under option (210 in total). Ryanair opened 4 bases in Burgas, Memmingen, Naples & Poznan and launched over 260 new routes.

In full-year 2019 Ryanair will invest substantially in its people, its systems and its business as the carrier scales up the operation to take delivery of 210 Boeing Gamechanger aircraft over the next 6 years. This will lead to a modest increase in ex-fuel unit costs next year but will underpin Ryanair's growth to almost 600 aircraft and 200m guests p.a. by FY24.

Staff costs are expected to rise by almost €200m, half of which is higher pay for its front line people and half is additional headcount for growth.


Airbus supplier Cotesa to be taken over by Chinese group

The Saxon aircraft construction supplier Cotesa has been taken over by a Chinese group. A hanging game for companies and employees is over: The supplier from Saxony wants to grow among the new owners.

The investors are backed by a Chinese state-owned corporation. The transaction has also prompted the Ministry of Economics. To date, Cotesa has supplied Airbus and Boeing with carbon fiber components. Through the commitment of AT&M (Advanced Technology & Materials), a subsidiary of the state-owned China Iron & Steel Research Institute Group, the company gains access to the Chinese market. In the future, the Saxons also want to supply the state-owned Chinese aircraft manufacturer Comac. AT&M has announced the construction of a new plant in China.

At the end of December it had become known that the Federal Ministry of Economics was reviewing the transaction in accordance with the stricter Foreign Trade and Payments Act. The release took place in mid-April according to company information.

Héroux-Devtek signs landing gear re-manufacturing contract with AAR

Héroux-Devtek an international manufacturer of aerospace products, has signed a 4-year agreement with AAR Corporation (AAR).

Under the terms of the agreement Héroux-Devtek will perform the as-needed re-manufacturing of landing gear assemblies of the KC-135 aircraft, the manufacturing of spare parts for the C-130 and KC-135 aircraft and the manufacturing of other landing gear components, all in support of a contract AAR was recently awarded from the US Air Force.

The contract’s total value could exceed CAD$65 million.

Component Control

C&L Aviation Group completes Hawker 800XP ADS-B Garmin ADS-B installation

C&L Aviation Group has installed the first Garmin ADS-B Out solution for a Honeywell Primus II-equipped Hawker 800XP. The installation was done in cooperation with Elliot Aviation at C&L’s Bangor, Maine, facility, and it complies with the FAA 2020 ADS-B Mandate and DO-260B standards.

As a distributor for Garmin International, C&L offers its customers the full line of Garmin products—including ADS-B upgrades, communications, navigation equipment and full-glass cockpits—to support corporate aircraft owners. C&L also offers a wide range of other avionics equipment to compliment ADS-B upgrades.

West Star Aviation receives Part 145 Repair Station Certification for Houston Satellite Location

West Star Aviation has reported that their satellite location at Conroe-North Houston Regional Airport (CXO), has received FAA Part 145 Repair Station Certification.

In operation since 2016, the facility has provided quality maintenance and support services for aircraft at nearby Houston metropolitan airports. As a satellite location for West Star, this location offers 24/7 on-call AOG mobile service, limited maintenance and troubleshooting, as well as avionics repair.

Additionally, satellite locations can assist with obtaining ferry permits so customers can utilize one of the three full service MRO facilities located at East Alton, IL (ALN), Grand Junction, CO (GJT), and Chattanooga, TN (CHA).


DAE signs landmark unsecured revolving credit facility

Dubai Aerospace Enterprise (DAE) has signed a landmark unsecured four-year revolving credit facility with an initial commitment of US$480 million and an accordion feature that allows the facility to be increased to up to US$800 million at any time after the initial closing. The facility includes both conventional and Islamic tranches and will support the future financing needs of the business.

Firoz Tarapore, Chief Executive Officer of DAE said: “We are pleased to sign this landmark regional transaction lead by Al Ahli Bank, First Abu Dhabi Bank and Noor Bank. This transaction underlines both the regional liquidity available to top quality names and the strength of the DAE franchise. This facility further diversifies our funding sources and adds to the unsecured component of our liquidity profile increasing our unsecured revolving credit facilities to US$1,125 - US$1,445 million depending on the final committed amount of this facility. On a pro forma basis as of December 2017, if this facility is fully drawn and if the proceeds are used to pay down secured indebtedness, DAE’s percentage of unsecured debt would increase from 26% to a range of 31%-34%.”

TRUEAERO appoints Edward Kokoszka Vice-President, Global Sales & Marketing for TRUEAERO Asset Management

TRUEAERO has appointed Edward Kokoszka VicePresident, Global Sales & Marketing for TRUEAERO Asset Management (TAAM). Kokoszka comes to TAAM after a long career in marketing, management, leasing and aftermarket support with engine manufacturer Pratt & Whitney and its affiliated International Aero Engines (IAE), starting in 1974. His most recent position at Pratt & Whitney was General Manager, Sales, Global Leasing, European Region, Middle East and Russia. Kokoszka assumed his new position on May 7.



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Technical Aspects of a Leased Asset 2018
June 5, 2018 – Jury’s Inn Hotel, Prague

Maintenance Reserves Seminar 2018
June 6, 2018 – Jury’s Inn Hotel, Prague

Engine Leasing Seminar
September 18, 2018 – Copthorne Tara Hotel, Kensington, London, UK

Transactional Support & Risk Management Seminar, London
September 19, 2018 – Copthorne Tara Hotel, Kensington, London, UK

Aircraft Economic Life Summit 2018
November 20, 2018 – Gibson Hotel, Dublin, Ireland
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