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Tuesday, September 7th, 2021

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Negotiations on new 737 order end after Ryanair and Boeing reach pricing stalemate

After months of heavy negotiations, Irish low-cost carrier and one of Boing’s largest customers, Ryanair, has walked away from the table without placing a new order which was projected to be in the order of 250 of the 230-seat 737 MAX 10 model. The deal would have been worth approximately US$33 billion before any anticipated discount which could reduce the order value to nearer US$10 billion. The new order would have been a major boost for Boeing as it looks for large orders to instil a new-born confidence in the troubled 737 series after two fatal MAX crashes.

Currently Ryanair has 210 of the 197-seat MAX 8-200 variant on order. In announcing the collapse of negotiations, Ryanair Group Chief Executive Michael O’Leary commented: “We are disappointed we couldn’t reach agreement. However, Boeing have a more optimistic outlook on aircraft pricing than we do, and we have a disciplined track record of not paying high prices for aircraft.” However, Boeing has stood firm on the subject of discounts. “Ryanair is a long-standing partner. We value their business and are committed to supporting them,” a Boeing spokesperson said. “At the same time, we continue to be disciplined and make decisions that make sense for our customers and our company.”

Boeing is confident that the market is finally moving back in its favor, having recently won several orders, including one for 150 MAX 10s from United Airlines. However, Airbus remains a thorn in the side of Boeing and one of the principal reason’s Ryanair is not considering the A321neo is the long waiting list, though O’Leary pointedly remarked that Airbus was doing deals at the moment with other Boeing customers. Britain’s Jet2 last week closed a deal for 36 A321 neo aircraft worth about US$4.9 billion. In August Delta, which has bought aircraft from both Boeing and Airbus, placed a new order for 30 A321neos.

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ACC Aviation names Julian Aldana Vice President Technical Services

ACC Aviation is adding a new pillar of expertise to its business from September with the creation of a Technical Services division. The new division sees ACC add a fourth practice area to its consultancy offering, following its move into aviation finance services earlier this July.

Leading the new business unit, as Vice President Technical Services, is Julian Aldana, an experienced aviation technical professional with specialist skills in aircraft asset management, aircraft inspections and technical consulting services.

Aldana brings 16 years of aviation technical experience to ACC, having previously spent the last two years as Technical Manager Americas for IBA Group, based in Toronto. Prior to this, he also held several senior technical roles with airlines such as Etihad, Air Berlin and Swiss.

ACC Aviation’s Technical Services Division will offer aircraft inspection services (from pre-purchase to final assembly); lease returns, asset recovery, and transitions; maintenance event management; airworthiness assessments; and technical due diligence.

The newly added services closely complement ACC’s established activities in asset management, aviation finance and consulting, widening the expertise offered to lessors, lenders and airlines on a global basis; leveraging an office network that spans Europe, Middle East, Africa, USA and Asia.

Aldana commented: “It’s a great challenge to lead this new Technical Services division. ACC Aviation is a well-respected, well-backed, diverse group, with structure.  These were major factors for me in joining them and I’m also looking forward to being back in Dubai again, re-establishing business relationships and forging new ones. The market is opening up after 18 months of pandemic distress and a Dubai base is the right location to explore business opportunities in EMEA and Asia.”

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GEODIS in Hong Kong unlocks priority customs facilitation and inspection with AEO Accreditation

GEODIS announced that its division in Hong Kong has been accredited as an Authorized Economic Operator (AEO) by the Hong Kong Customs and Excise Department. AEO status recognizes excellent security and safety procedures amongst those within the supply chain industry. With the accreditation, GEODIS in Hong Kong must now be given access to priority customs facilitation and inspection, allowing the logistics provider to optimize its local operations, delivering agile, secure, and reliable solutions for customers.

The need for such efficient systems has become more vital than ever, given ongoing supply chain disruption to shipping schedules and factory production across Asia. These delays have also been accompanied by a continuing surge in consumer demand for Asian goods, challenging logistics partners to cope with an increasingly volatile supply chain ecosystem. As a key link between Mainland China and the rest of the world, these service providers in Hong Kong, in particular must work to keep processes up-and-running in the most seamless way possible.

“This initiative affirms our continuous efforts to reinforce the infrastructures, processes and information systems required to ensure the most advanced and reliable security measures within the current dynamic environment,” said Christopher Cahill, Managing Director, North Asia Sub-Region. “GEODIS will continue to innovate, leveraging on new technology and automation to keep our operations in Hong Kong scalable and efficient.”

Singapore Airlines and Heston MRO extend maintenance agreements

Singapore Airlines (SIA), national carrier of Singapore, and Heston MRO have extended their MRO partnership for another three years.

Under the newly extended agreements, Heston MRO will handle all incoming and departing SIA passenger flights in Melbourne, Brisbane, and Perth, utilizing Boeing 777, 787, and Airbus 350, 380 aircraft types. The handling agreements also cover SIA’s Boeing 747 freighter flights to Melbourne. Under the signed extended agreements, the scope of services include full handling of aircraft transits, defect rectification, local warehousing, and logistics support.

‘This is great positive news for Heston MRO in the COVID-19 affected aviation world’, comments Asta Zirlyte, CEO of Heston MRO. ‘Despite the current travel restrictions, airlines in Australia and the Southeast Asian region are gearing up for the post-pandemic market recovery. Heston MRO is positioning itself to play an active role in the upcoming market recovery. We are extremely honored with the trust that Singapore Airlines Group puts in Heston MRO as its long-standing technical support partner in Australia.’

With more than 25 years of operating history and airside presence in Sydney, Melbourne, Brisbane, Perth, Adelaide, and other airports in Australasia, Heston MRO is the largest independent MRO organisation in the region. Its Total Technical Care services are offered to airlines, leasing companies, and OEMs in the Australasian and Southwest Pacific region.

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Air Malta and Network Airline Services extend Total Cargo Management Agreement

Air Malta and Network Airline Services (NAS) have extended their Total Cargo Management (TCM) Agreement for a further two years.

Whilst NAS has provided a TCM solution to Air Malta over the last few years, it has assisted the airline to vastly expand its cargo business as well as establishing itself in the global air freight marketplace, whilst increasing distribution channels. This has allowed the partnership to build a strong platform for future growth of its cargo business as an important revenue contributor.

Since the TCM agreement began, NAS has secured income for Air Malta month on month, year on year, whilst allowing a better synergy shared between NAS and Air Malta, including important functions such as sales, marketing, pricing and revenue management, cargo reservations, revenue accounting, back-office administration, IT systems, cargo handling and interline contracts.

The TCM solution is becoming increasingly popular by several global airlines as it represents opportunities to generate additional cargo revenues from the maximization of aircraft cargo hold capacities. Network Airline Services has proved this solution generates new business opportunities from various sources, whilst Air Malta concentrates on its core business of being a passenger airline.

“NAS has a proven track record of growing airlines cargo revenues through its global network of offices and IT teams to build a carrier’s cargo brand as well as target new revenue streams on their behalf. NAS looks forward to diversifying Air Malta’s product range and global coverage even further, the extension of this TCM agreement allows us to do so. We will continue to develop further relationships with other carriers and listen to our customers to gauge how we can further tailor our service around their individual needs.”

Emerald Airlines becomes Ireland’s newest airline, securing Air Operator Certificate

Emerald Airlines has announced its Air Operator Certificate (AOC) grant, making it Ireland’s newest airline. Securing the AOC further highlights Emerald Airlines’ professional capabilities, adherence to the highest standard of safety regulations needed for aircraft operations and proves its fitness-to-fly capability following the successful completion of rigorous inspections by the Irish Aviation Authority (IAA).

Commenting on the announcement, Conor McCarthy, Founder and CEO of Emerald Airlines said: “Being granted the first AOC in Ireland since the pandemic is not only a major milestone on our journey as an airline, but a significant one for the Irish Aviation industry as it begins its recovery following the worst crisis in its history. We are now able to progress towards the launch of scheduled services, which will be rolled out progressively as our aircraft are delivered and market conditions allow. We will be working very closely with Aer Lingus on this now that we have our AOC in place.  I would like to thank all at the IAA for their invaluable support throughout this process.”

Emerald Airlines recently announced that it has entered into a franchise agreement with Aer Lingus which will commence on January 1, 2023, for a period of ten years for the operation of Aer Lingus Regional flights. Although the contract is not due to commence for 17 months, Emerald Airlines continues to work closely with Aer Lingus to evaluate options with respect to an earlier contract start date.

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Korean Air partners with SK Energy to adopt carbon-neutral jet fuel

Korean Air has partnered with SK Energy to introduce carbon-neutral jet fuel to actively counter climate change. Through the partnership, the airline will purchase a month’s worth of carbon-neutral jet fuel for domestic flights departing from Jeju and Cheongju.

Carbon-neutral jet fuel can be achieved by measuring the total amount of greenhouse gas emissions produced through fuel production, transport, and consumption, and purchasing carbon credits to offset the carbon footprint.

Greenhouse gases generated from aircraft operations account for 2 to 3% of total global emissions. In line with the global aviation industry’s efforts for sustainable growth, Korean Air is seeking various methods to reduce carbon emissions to achieve carbon-neutral growth and fight climate change.

Korean Air is actively participating in the International Civil Aviation Organization (ICAO)’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and introducing eco-friendly and high-efficient aircraft. The airlines recently introduced A220-300 is equipped with the latest engine, which reduces carbon emissions per seat by 25% compared to existing models of similar capacity.
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