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Tuesday, March 1st, 2022

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EU sanctions will see hundreds of leases cancelled for Russian planes

Multiple lessors are set to terminate lease agreements with Russian airlines by March 28 following sanctions imposed by the EU.

It is estimated that 777 of 980 commercial passenger jets currently in operation are leased, of which 515 jets with an estimated value of £7.5 million are rented from foreign companies in the predominantly Ireland-based industry. Lessors affected include AerCap with roughly 5% of its fleet by net book value leased in Russia at the end of 2021. The company has 152 planes combined on lease in Russia and Ukraine. Russian airlines which are clients of AerCap include Aeroflot, S7 Airlines, Rossiya, Azur Air and Ural Airlines.

The world’s second-biggest leasing company, Avolon, has under 20 airplanes in Russia and a couple in Ukraine from a total fleet of over 550 aircraft. BOC confirmed that it had 18 planes, representing 4.5% of its owned fleet, based in Russia, which have been placed with Aeroflot subsidiary Pobeda as well as Ural Airlines, S7 Airlines and AirBridgeCargo Airlines.

It is believed that Dubai Aerospace Enterprise (DAE) has a minimum of three Russian airline customers, including Aeroflot, based on its website’s details. While cancelling the leases may be straightforward, retrieving the planes may not be so simple with the potential for Russian carriers and Russian aviation authorities failing to comply. In addition, with the EU and the UK having banned all Russian-owned, leased or chartered aircraft from using its airspace, and Russia having retaliated by closing its airspace to all UK and EU aircraft, getting to the aircraft to repossess them may also be difficult and potentially dangerous.

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Iberia Maintenance awarded V2500 engines contract from Qatar Airways

Iberia Maintenance has been awarded a 10-year contract for the repair and maintenance of V2500 engines from Qatar Airways. This strategic agreement will result in scheduled visits over 10 years.

All events will be carried out at Iberia Maintenance's engine workshop at its facilities next to Madrid airport, with more than 52,000 m² dedicated to MRO and engineering services.

Iberia Engine Workshop serves airlines and lessors around the world, provides a high-quality service and offers a very differentiated and competitive programme for the V2500 engines in terms of TAT (turnaround time) and efficiency.

Leonardo signs €380 million contract for technical-logistical support of Italian Air Force’s C-130J fleet

The Aeronautical Armaments and Airworthiness Directorate (DAAA) has approved a contract for the technical-logistical support of the Italian Air Force’s C-130J Super Hercules airlifter fleet. The agreement, which lasts five-years and is worth a total of €380 million, was signed on Jan. 28, 2022, between the Italian Air Force and the Temporary Business Grouping (RTI) formed by Leonardo, Avio Aero and Lockheed Martin Aeronautics.

Contract activities, as defined by the Logistic Command’s 2nd Division, include the implementation of a technical-logistical model that provides integrated logistical support (ILS), "in house" engineering support and "on-site" support through operational technical representatives at the 46th Air Brigade in Pisa. Aircraft maintenance activities, planned and managed by at the Air Force Logistic Command’s 11th Maintenance Depot in Sigonella, are also envisaged at Leonardo's plant in Tessera near Venice and Avio Aero plant in Brindisi as complementary support to those provided on the Pisa base, as well as repairs, spare parts, material logistics, inspection activities, software and technical publications maintenance and updates.

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Finnair withdraws guidance and is preparing for prolonged potential closure of Russian airspace

Finnair has released that the potential Russian airspace closure would notably impact air traffic between Europe and Asia, which plays an important role in Finnair’s network. The negative financial impacts on Finnair will be significant especially if the situation prolongs. Due to this, the company withdraws its guidance related to Q1 2022 and the operational environment in H2 2022, provided in connection with the Q4 2021 result.

“The crisis in Ukraine touches all Europeans, and we understand the EU’s decision to close its airspace. We are implementing our contingency plan as the situation has a considerable impact on Finnair. Bypassing the Russian airspace lengthens flight times to Asia considerably and, thus, the operation of most our passenger and cargo flights to Asia is not economically sustainable or competitive”, Topi Manner, Finnair CEO, says.

Bookings in European and North American markets are clearly growing as the impacts of the pandemic are decreasing. Finnair is currently preparing new traffic and cost savings plans in case the situation prolongs.

“Despite the massive negative financial impacts that the pandemic had on us, our cash position is still strong, c. €1.7 billion at the end of 2021. This includes the currently undrawn €400-million-hybrid loan granted by the State of Finland, which also supports our equity”, Manner said. “The State owner has stated that Finnair is a company of strategic interest. Under these new circumstances, we as a company feel that functioning flight connections are even more important for the Finnish economy, safety and security of supply. The company is considering different solutions in case the situation prolongs, and it has an active dialogue with the State of Finland.”

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Air Sial entrusts the APUs of its Airbus A320s to EPCOR

Air Sial has signed an exclusive long-term contract with EPCOR for the comprehensive maintenance of the auxiliary power units (APUs) equipping its fleet of three Airbus A320 aircraft.

EPCOR has designed an adaptive, competitive offer for its new customer, adapted to the needs of a young airline. As part of the AFI KLM E&M network, EPCOR is providing Air Sial with its airline-MRO mindset: the benefits of its first-rate technical know-how, as well as its experience as an operator in the management of the maintenance plan. In order to secure its operations and limit the risks of AOG, Air Sial will be able to rely on PROGNOS® for APU, the predictive maintenance solution developed by EPCOR.

Maintenance services will be delivered by EPCOR, the AFI KLM E&M subsidiary that is recognised worldwide for its expertise on a wide range of APUs solutions. Thanks to this extensive know-how, Air Sial will benefit from a single point of contact to facilitate its operations. Indeed, the particularity of its fleet is that it includes both Pratt & Whitney APS3200s and Honeywell GTCP131-9As. Two types of APUs for which EPCOR is a leading dual licensed APU MRO.

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Dwight James joins Wheels Up Board of Directors

Wheels Up, Delta’s strategic private jet partner, has reported that Dwight James, S.V.P. – Customer Engagement & Loyalty and CEO – Delta Vacations, has joined its Board of Directors.

James fills the unexpired term of Eric Phillips, S.V.P. – Airport Customer Experience & Cargo, who is stepping down to focus on other commitments. James is expected to stand for election to a full-term on the board at the company’s annual meeting of shareholders later this year. He will also fill Phillips’s role on the board’s safety and security committee.

Delta is Wheels Up's exclusive commercial airline partner and largest shareholder. An agreement in early 2020 combined Wheels Up with Delta Private Jets, creating one of the world's largest owned and managed fleets of nearly 200 private aircraft. Wheels Up members can access both private jet and Delta flights and enjoy an array of benefits including earning miles through Delta SkyMiles and the ability to earn toward Medallion Status based on spend on Wheels Up flights.

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