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Friday, December 17th, 2021

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Air France-KLM orders 100 Airbus A320neo family aircraft - with purchase rights for an additional 60 aircraft

The Air France-KLM Board of Directors made the decision to move forward on the Group’s goal to improve its economic and environmental performance through the introduction of next generation aircraft. In doing so, the Group also demonstrated its ability to leverage purchasing synergies.

Air France-KLM placed a firm order for 100 Airbus A320neo family aircraft - with purchase rights for 60 additional aircraft, to renew the fleets of KLM and Transavia Netherlands and to renew and expand the fleet of Transavia France. The order covers Airbus A320neo and Airbus A321neo aircraft. The first deliveries are expected in the second half of 2023. These aircraft will operate medium-haul routes in Europe, notably from Amsterdam-Schiphol - KLM's global hub and Transavia Netherlands' main base, and from Paris-Orly, Transavia France's main base.

Furthermore, the Group signed a Letter of Intent (LOI) for the purchase of four Airbus A350F Full Freighter aircraft with purchase rights for four additional aircraft, to increase cargo capacity at Air France. In the context of a steady and sustainable growth of demand for air cargo, this order would increase Air France-KLM’s cargo capacity. Air France-KLM would be among the launch operators of the Airbus A350F Full Freighter. This order would come with full substitution rights to Airbus A350 passenger aircraft, which constitute the new spearhead of the Air France long-haul fleet. The airline currently operates 12 of the 38 aircraft of the type on order.

IAG steps back from current Air Europa acquisition to assess options

With every indication that European competition regulators would likely veto the takeover of Air Europa by IAG, IAG has opted to withdraw from current negotiations to assess the potential for some form of future tie-up. IAG owns multiple airlines including Spanish carriers Iberia, Vueling and Level.

Indications are that European regulators were concerned that the takeover of Air Europa by IAG would have a damaging effect on competition in the Spanish domestic market and also international routes to the country. Air Europa, which is owned by Spanish company Globalia provides connections to Latin American countries as well as flying to European destinations. The acquisition of the Spanish carrier was intended to help IAG’s hub in Madrid to compete more successfully against European competitors.

This move by IAG comes after a recent renegotiation on the originally agreed acquisition price as a consequence of the effects of the global pandemic on air travel. IAG had reduced its offer for Air Europa by 50% to €500 million (£423.7 million) and also required deferment of the payment for six years. IAG had done its best to counteract the concerns of competition regulators by foregoing 13 short- and medium-haul routes and two long-haul routes at Barcelona and Madrid airports, but this was understood to be insufficient to allay their concerns. Indications are that in walking away from the table prior to an official rejection from competition regulators of the proposed takeover, this will leave IAG in a stronger position should it come up with an alternative proposition.

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Nok Air signs two strategic agreements with Sabre to power growth

Thai airline Nok Air announced strategic new long-term agreements with both Sabre Corporation and its subsidiary company, Radixx, to support the evolution of the carrier’s new business strategy. 

Nok Air has selected an extensive suite of products from Sabre and Radixx to expand distribution and revenue generation opportunities. The agreements support the carrier’s repositioning to serve its growing customer base of premium travellers and value-based customer segments. The Sabre and Radixx products will power future business model evolution as Nok Air expands its international operation, develops new airline partnerships and explores further technical capabilities and innovations beyond today. 

Radixx will provide a fully integrated passenger service system for Nok Air that spans reservations, inventory, pricing, e-commerce, agency distribution, departure control, load control, loyalty and other related capabilities. In parallel, under a new Sabre distribution deal, Nok Air will distribute its airline content across Sabre’s global travel marketplace, opening the door to new international markets and growing its Thailand home market on the Sabre Global Distribution System (GDS).

Ryanair opens new aircraft maintenance facility in Seville, Spain

Ryanair has opened its newly expanded maintenance facility at Seville Airport, delivering further investment in the region and creating 250 high-skilled jobs, including licensed engineers, mechanics and support staff – bringing Ryanair’s local headcount to 500 by 2023.

Ryanair has invested over €30 million in this state-of-art, five-bay maintenance facility (20,000m²) since it first opened in 2019. The Seville line maintenance station is one of the most environmentally friendly facilities and will maintain a large portion of Ryanair’s fleet of aircraft, which will grow to 600 aircraft by 2026.

With over 2,500 engineers across Europe, Ryanair Line Maintenance Engineering, is responsible for all aircraft maintenance activities, ensuring that Ryanair aircraft take its customers to their destination, safely and on time.

Ryanair has carried over 22 million customers to/from Seville since its operations began in 2003 and has played a vital role in Seville and Andalucía’s traffic and tourism recovery post COVID-19.

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Qantas selects Airbus as preferred aircraft for domestic fleet renewal

Qantas has selected the Airbus A320neo and Airbus A220 families as the preferred aircraft for the long-term renewal of its domestic narrow-body fleet.

A firm commitment for 40 aircraft – 20 A321XLR (extra long-range) and 20 A220 aircraft – is expected to be placed with Airbus by the end of FY22, following discussions with employees about arrangements to operate the new aircraft types and a final decision by the Qantas Board.

Qantas will also have a further 94 purchase right options on aircraft over a ten-plus year delivery window as its existing Boeing 737-800s and 717s are gradually phased out.

The order is in addition to Jetstar’s existing agreement with Airbus for over 100 aircraft in the A320neo family. Part of this new deal includes combining these two orders so that the Group can draw down on a total of 299 deliveries across both the A320 and A220 families as needed over the next decade and beyond for Qantas, QantasLink and Jetstar.

This announcement follows a detailed review by the airline’s engineering, flight operations, customer experience, network, fleet procurement and finance teams. The airline conducted detailed evaluation of the A320neo and B737 MAX families as well as the smaller A220 and Embraer E190/195-E2s.

AviaAM Leasing continues strengthening presence in air cargo market through (P2F) conversion project

AviaAM Leasing, a global aviation holding company engaged in tailored aircraft leasing and trading services, continues its complex Passenger-to-Freighter (P2F) conversion project.

The ongoing Passenger-to-Freighter (P2F) conversion project was the first of its kind for the company, with the first Boeing 737-800 for conversion acquired by AviaAM Leasing in March 2021. Now the company continues moving forward to its commitment of having 25 converted aircraft of different types in the upcoming four years.

Recently, the P2F conversion of the second B737-800 aircraft was completed by the Guangzhou Aircraft Maintenance Engineering Company (GAMECO) facility in Guangzhou, China. The aircraft was ferried to FL Technics Kaunas facilities for further maintenance and painting in the lessee's corporate livery. The 737-800BCF (Boeing Converted Freighter) will join the fleet of Bluebird Nordic – a rapidly growing Iceland-based cargo airline, offering ACMI and full-service Cargo services.

The third B737-800 aircraft is being converted to freighter configuration by Boeing at the Taikoo (Shandong) Aircraft Engineering (STAECO) facility in Jinan (TNA), China with re-delivery expected by the end of December this year.

ASI Aero forms joint venture with initial investment of US$32 million

Aeronautical Support International (ASI Aero) announced the formation of Team Aero Partners to target investments in aviation commercial assets to support the Used Serviceable Material (USM) and “Green-Time” aircraft engine leasing markets. ASI Aero entered into this joint venture agreement with a New York-based private capital partner.

As the operating member ASI Aero will source engine assets for the joint venture and subsequently manage these assets through consignment programmes. Team Aero Partners will initially dedicate US$32 million to the venture.

“This is a great opportunity for ASI Aero to increase our inventory and to support our Airline and MRO customers around the world as the market returns to pre-Covid levels. This also makes other pools of capital available to expand and to diversify our business,” said ASI Aero President, Dean Morgan.

ATR receives EASA approval for extension of type Cmaintenance visit intervals by 60%

Regional aircraft manufacturer ATR has received approval from EASA to extend the intervals between Type C maintenance checks from 5,000 to 8,000 flight hours, for all of its aircraft series. Through this 60% increase in intervals, ATR operators will benefit from a significant reduction in aircraft maintenance costs and increased availability.

With a global fleet of over 1,200 aircraft, flown by 200 operators in 100 countries, ATR is constantly looking for ways to reduce direct maintenance costs and increase revenue potential for its customers. In February 2019, ATR had already received certification from EASA to extend the intervals between Type A maintenance checks from 500 to 750 hours, for all of its aircraft series.

More recently, in November 2021, the manufacturer has set a new standard in operating economics for regional aviation, with the introduction of its new PW127XT engine series as the standard engine for the ATR 72 and 42 aircraft. ATR’s customers will benefit from 40% extended time on wing, bringing the engine overhaul to 20,000 hours, resulting in fewer events over the lifecycle of the aircraft. This will allow a 20% reduction in engine maintenance costs.
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Tamar Jorssen
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Email: tamar.jorssen@avitrader.com
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Tamar