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Monday, May 2nd, 2022

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Qantas places major Airbus aircraft order to shape its future

Australia’s Qantas Group has confirmed that it will order 12 A350-1000s, 20 A220s and 20 A321XLRs. The news was announced at a ceremony in Sydney attended by Qantas Group CEO Alan Joyce and Airbus Chief Commercial Officer and Head of Airbus International, Christian Scherer.

The A350-1000 was selected by Qantas following an evaluation known as Project Sunrise and will enable the carrier to operate the world's longest commercial flights. These will include linking Sydney and Melbourne with destinations such as London and New York non-stop for the first time ever. Featuring a premium layout, the A350 fleet will also be used by Qantas on other international services. The A350-1000 is powered by the latest generation Trent XWB engines from Rolls-Royce.

In the single aisle category the A220 and A321XLR were chosen under an evaluation called Project Winton. The aircraft will be used by the Qantas Group on domestic services across the country, which can extend to over five hours. In addition, the A321XLR offers the range capability for flights from Australia to Southeast Asia, enabling the Qantas Group to open up new direct routes. The A220 and A321XLR fleets will both be powered by Pratt & Whitney GTF engines.

This agreement is in addition to the existing order for 109 A320neo-family aircraft, which includes the A321XLR for the Qantas Group low-cost subsidiary Jetstar.


Southwest Airlines reports first-quarter net loss of US$278 million

Southwest Airlines has reported its first-quarter 2022 financial results. The company posted a net loss of US$278 million, excluding special items, net loss of US$191 million down 8.8% compared with first-quarter 2019. Cash provided by operations was US$1.1 billion.

The company was encouraged by the sharp rebound in revenue trends in March 2022, despite US$430 million of headwinds experienced during first quarter 2022. Approximately US$380 million of the operating revenue headwinds related to softness in bookings and increased passenger cancellations in January and February 2022 associated with the Omicron-variant, which is higher than the company's previous estimate of US$330 million. In addition, the company's flight cancellations in January 2022 due to available staffing challenges—exacerbated by weather—resulted in a US$50 million negative impact to operating revenues, as previously estimated.

The company's first quarter 2022 revenue performance from its loyalty programme was strong and included incremental revenue from its new co-brand credit card agreement, as expected. First-quarter 2022 managed business revenues decreased 55%, compared with first-quarter 2019. March 2022 managed business revenues decreased 36% compared with March 2019, outperforming the company's previous guidance of down approximately 40%, driven by an increase in business passengers and yields and boosted by its participation in Global Distribution System (GDS) platforms. Despite March 2022 managed business passengers and revenues below March 2019 levels, managed business fares exceeded March 2019, representing the first monthly increase relative to respective 2019 levels since the pandemic began.

Thus far in April, the company continues to experience strong leisure bookings for spring and summer travel and improving managed business revenue trends broadly across the network. The company currently expects April 2022 managed business revenues to decrease approximately 30%, compared with April 2019 and currently expects continued sequential improvement in May and June 2022, compared with its respective 2019 levels.

Virgin Australia looks to Boeing as it targets greater capacity while lowering emissions

Virgin Atlantic has unveiled the first phase of its fleet growth programme which will see it acquire four new Boeing 737 MAX 8 aircraft introduced to its network and those Fokker twin-engine F100 aircraft which are retired from service will be replaced by Boeing 737-700s. The carrier currently operates a fleet of 10 F100s.  

The MAX 8 will help reduce carbon emissions by up to 15% when compared to the carrier’s current 737 NG jets, while the 737-700 will be able to carry more passengers with the same fuel burn, resulting in a 30% reduction in emissions per aircraft seat when compared to the F100. Virgin Australia’s current Boeing 737 fleet comprises 737-700 and 737-800 variants of the narrow-body jet and will grow to 88 aircraft once the four MAX 8 aircraft have been delivered, their delivery scheduled to commence in February 2023.

The Virgin Australia Group also has 25 Boeing 737 MAX 10s on order which will further reduce emissions by 17% when compared to existing 737 NGs. “We are on track to return to 100% of pre-COVID domestic capacity by June this year and expect to well exceed those levels by year’s end, and our resources sector and contract flying in WA is in high demand. This investment in our fleet reflects the increased demand we are experiencing in all parts of Virgin Australia,” Hrdlicka said, adding that: “With growth comes a larger carbon footprint, so it’s vital that we take the right steps now to ensure that as we do more flying, we are also working to reduce our emissions.”


Wizz Air takes delivery of 1,000th GTF-powered Airbus A320neo-family aircraft

Pratt & Whitney has released that 1,000 Airbus A320neo-family aircraft powered by GTF engines have now been delivered to airlines around the world. The 1,000th aircraft was an A321neo delivered to Wizz Air in Budapest, Hungary. The airline has selected GTF engines to power 276 A320neo family aircraft, of which 54 have now been delivered. Pratt & Whitney also powers the airline’s fleet of 105 A320ceo-family aircraft with V2500® engines.

“We are thrilled to accept the 1,000th GTF-powered A320neo-family aircraft,” said Owain Jones, chief development officer at Wizz Air. “The industry-leading technology in the GTF engine is helping to power our growth, while significantly reducing our impact on the environment and further reducing our already best-in-class operating costs. Our collaboration with Pratt & Whitney has helped us make air travel affordable for more people than ever before and they are now partnering with us through our efforts to help our Ukrainian brothers and sisters reach safe destinations.”

Boeing unveils first T-7A Red Hawk advanced trainer jet

Boeing has unveiled the first T-7A Red Hawk advanced trainer jet to be delivered to the U.S. Air Force. The jet, one of 351 the U.S. Air Force plans to order, was unveiled prior to official delivery.

The fully digitally designed aircraft was built and tested using advanced manufacturing, agile software development and digital engineering technology significantly reducing the time from design to first flight. The aircraft also features open architecture software, providing growth and flexibility to meet future mission needs.

“We’re excited and honored to deliver this digitally advanced, next-generation trainer to the U.S. Air Force,” said Ted Colbert, president and CEO, Boeing Defense, Space & Security. “This aircraft is a tangible example of how Boeing, its suppliers and partners are leading the digital engineering revolution. T-7A will prepare pilots for future missions for decades to come.”

The T-7A Red Hawk incorporates a red-tailed livery in honor of the Tuskegee Airmen of World War II. These airmen made up the first African American aviation unit to serve in the U.S. military.


AFI KLM E&M and Air Canada renew multi-year GE90 support contract

The historic cooperation between AFI KLM E&M and Air Canada marks new milestones with the renewal of a multi-year GE90 support contract. The original contract was signed in 2010, mobilising a package of repair and maintenance services specially adapted to meet the Canadian airline’s requirements for the GE90-115B engines on its fleet of Boeing 777s. Through this extended engine support contract, the solutions delivered by AFI KLM E&M include shop visits, LRU support, provision of spare engines and on-wing/on-site support.

Air Canada’s decision to extend and expand its relationship with AFI KLM E&M constitutes a mark of confidence and satisfaction regarding the support solutions designed and implemented by the Airline-MRO provider, which bases its service approach on attentiveness and close-knit relationships with the customer.

Rex and Delta Air Lines announce partnership

Rex, Australia’s independent regional and domestic airline, has signed a Letter of Intent (LOI) with Delta Air Lines, confirming the parties’ intention to enter into a ‘definitive commercial agreement’. The final agreement will see Rex and Delta providing reciprocal interline ticketing and baggage services to each other commencing during the third quarter of 2022.

“This is a milestone moment for Rex and our passengers. Rex is delighted to forge a partnership with America’s most awarded airline. Our tie-up with Delta will help boost the post-COVID return of long-haul international travel,” Rex Deputy Chairman, the Hon John Sharp AM, said.

“Delta will not only connect international travellers on Rex’s trunk domestic routes, but could also allow them easy access to Rex’s expansive network of over 60 routes throughout regional Australia,” Sharp ontinued. Rex’s passengers will be able to connect seamlessly on Delta’s daily, non-stop flights between Sydney and Los Angeles, a frequency which will increase to ten flights a week beginning December 18, 2022, and from there to nearly 50 cities in the U.S.

IBA outlines continued buoyancy of the freighter aircraft marketplace

IBA, the aviation industry consultant, has outlined the continued buoyancy of the freighter aircraft marketplace, even as the recovery from the pandemic gathers pace.

The Boeing 737-800 freighter fleet has almost doubled in size to 113 from 59 a year ago, demonstrating its sustained appeal as an aircraft of optimal size and value for conversion. Despite its increasing legacy status, the Boeing 767-300 freighter fleet has also continued to grow from 127 to 156, driven by the plentiful availability of feedstock aircraft from retiring passenger fleets.

Despite their much smaller baseline numbers, data from IBA’s InsightIQ platform demonstrates a clear growth in the Airbus converted freighter fleets. The A321 freighter fleet has doubled from four to eight aircraft over the past year, while the size of A330 (-200 and -300) fleet has also increased from 10 to 16.

The growth in demand for all of these aircraft types is illustrated by the increasing number of conversion centres for each, with at least nine facilities becoming active for the A321, six for the A330 (with IAI still to announce) and 15 for the Boeing 737-800.

The number of conversion lines for the Boeing 777-300ER is also growing as demand increases. IAA, which initially unveiled its conversion programme for the aircraft in 2019 with a single line, has approved two others. Further conversions programmes have now been rolled out by NIAR WERX and Mammoth Freighters.

Over the past twelve months, IBA estimates that the market values of most freighter types have remained stable with only a slight drop, especially in younger model aircraft. The value of a 2006 build Boeing 737-800BCF has dropped by just 3.7% to US$21.23 million, and the value of a 2001 build A321-200PTF has declined by 6.3% to US$22.79 million. The only major exception are the Boeing 737 ‘Classic’ types where, for example, a 1999 build 737-400BDSF has fallen by a more significant 14% to US$7.05 million.

IBA’s initial views on the new purpose built wide-body freighter types is that both will command a considerable premium on the existing in production Boeing 777F which is valued at US$157 million. IBA estimates that a new Airbus A350F, with its cargo capacity of 109 tonnes, will have a value of US$172 million while a new Boeing 777-8F, with its marginally greater capacity of 112 tonnes, will have a value of US$187 million.

During the webinar, IBA also outlined the impact of the Russia – Ukraine crisis on the freighter aircraft market. InsightIQ information shows that there are 23 freighter aircraft on lease within Russia from non-Russian lessors – a fraction of the notable number of passenger aircraft in the same situation, though still significant in terms of asset value. The non-Russian lessors with the greatest exposure in the freighter market are AerCap, with ten freighters placed in Russia, followed by Voyager Aviation and Airwork both with five, although the latter has repossessed one of its aircraft.

More widely, the restrictions on Russian wide-body freighters operating outside of the country, coupled with detours caused by airspace closures and rising fuel prices have cumulatively affected air freight rates which, as of March 2022, were up 27% year on year.

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Tamar Jorssen
Vice President Sales & Business Development
Email: tamar.jorssen@avitrader.com
Phone: +1 (788) 213 8543