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Friday, June 3rd, 2022

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CMA demands CHC Group sell off newly acquired Babcock’s UK helicopter services

The UK Competitions and Market Authority (CMA) has concluded its investigation into the acquisition of Babcock’s UK, Denmark and Australian operations by the U.S.-based operator CHC Group (CHC). As a consequence, the CMA has informed CHC it must divest itself of all UK-related oil and gas operations, citing the acquisition’s adverse effect on rivalry.

CHC purchased Babcock’s oil and gas aviation business in September 2021 for £10 million and the demand by the CMA does not affect other elements of the business. In April this year CHC had approached the CMA with the suggestion of a partial sale of UK-based operations to help mitigate concerns the regulatory body had over a lack of competition, but this was rejected. CHC had argued that while a perceived lack of competition may not be to the CMA’s liking, the market sector is struggling with oversupply and loss-making contracts after two market downturns. Babcock posted a pre-tax loss of £383 million in 2021. CHC has stated that the merger “takes place in the context of an extremely challenging market which has gone through a prolonged downturn”, in which demand has significantly declined, “leaving an over-supply of helicopters and in which the customers exercise substantial leverage over the operators”.

Chair of the inquiry, Kip Meek, said the sale “will support competition in future tenders for these important services.”

In response to the CMA’s demand, CHC said: “We are disappointed by the CMA’s decision. The CMA has fundamentally failed to understand the vital need for consolidation in what is a highly challenging market environment. With that said, we are looking forward to integrating the Australia and Denmark business at the appropriate time. “We will be analysing the CMA’s Final Report in more detail before deciding on next steps. In the meantime, our operation continues as usual with a continued focus on delivery of safe and efficient services to our customers.”

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United expands Flight Training Center to prepare for pilot hiring surge

United Airlines is expanding its Flight Training Center as the airline seeks to hire an additional 10,000 pilots by 2030. The airline will add a new four-story building on the 23-acre campus in Denver’s Central Park neighbourhood that will house 12 additional advanced flight simulators, training classrooms, conference rooms and offices. The expansion project is expected to be completed before the end of 2023.

United’s campus – seven buildings, across 550,000 ft² of training space – is the sole training facility for the airline’s 12,000 active pilots and all newly hired pilots. Every nine months pilots must visit the training centre to remain up to date on certifications. At any one time, there may be up to 600 pilots training at the facility.

United’s Flight Training Center campus currently has 39 full-motion flight simulators and 15 fixed training devices – the additional building means United will soon be capable of having a total of 52 full-motion simulators and 28 fixed training devices.

United expects to add more than 2,000 new pilots this year alone and is on track to hire 10,000 pilots by 2030. The airline plans to train around 5,000 pilots by that date through United Aviate Academy, the airline’s own pilot training school. United’s goal is to have at least half of the pilots trained at the United Aviate Academy be women or people of colour.

Gulfstream to add more than 200 new positions at Appleton, Wisconsin facility

Gulfstream Aerospace is investing more than US$55 million (£43.6 million) and hiring for more than 200 new positions at its Appleton, Wisconsin, facility to meet customer demand and growth in its fleet. The new investment is a continuation of expansion across the company, including new facilities in Fort Worth, Texas, and Mesa, Arizona and an expansion of its Customer Support call centre in Farnborough, England.

“We are in a period of rapid growth and are currently hiring for a wide range of positions. We have openings for engineers, mechanics, avionics technicians and highy-skilled trade and craftspeople. Gulfstream offers excellent training to assist in starting a new career in aviation,” said L.D. Buerger, Vice President of Completions, Gulfstream. “Gulfstream creates the world’s finest business aircraft, designed and outfitted with beautiful interiors. We are excited about this expansion and the opportunity to recruit and hire new talent to join the Gulfstream team at our Appleton facility.”

Gulfstream is constructing a world-class aircraft paint facility in Appleton which is set to begin operations in the third quarter of 2023. The custom-designed, 73,000 ft²/6,782 m² facility uses a proprietary paint booth design developed by Gulfstream in conjunction with Wisconsin-based paint booth manufacturer Global Finishing Solutions. The new facility will have the ability to paint up to 48 aircraft per year and will allow Gulfstream to perform the entire aircraft completions process start-to-finish in Appleton.

The company has recently made several enhancements to the facility to improve customer and employee experiences. Investments include a new office area for completions customers and pilots, a new wood finishing area, an upgraded shipping and receiving area and a completions hangar featuring an employee entrance, breakroom, and lockers.

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Bombardier appoints Jianwei Zhang as Chairman, Bombardier China

Bombardier has appointed Jianwei Zhang as Chairman, Bombardier China, effective immediately.

The appointment of the seasoned professional reaffirms Bombardier’s commitment to China where the company continues to offer market-leading business jets and provide aftermarket services at its strategically located service centre in Tianjin.

Zhang, who was previously part of Bombardier’s management team, will report to Éric Martel, President and Chief Executive Officer. He brings more than 26 years of experience in the aerospace and transport industries, most of them spent in multiple roles with Bombardier.

Bombardier maintains a strong presence in China where it offers its innovative, long-range Challenger and Global aircraft families, famous for their cutting-edge cabin design, performance and reliability. The company also provides a full range of maintenance and support services at its service centre in Tianjin.

Atlas Air takes delivery of first of four B747-8 freighters

Atlas Air has taken delivery of a Boeing 747-8 freighter, which will operate on behalf of its customer Cainiao, the logistics arm of Alibaba Group, as part of a previously announced long-term agreement. The aircraft will increase capacity on routes between China and the Americas. This aircraft is the first of four new 747-8 freighters that Atlas expects to receive from Boeing this year.

Atlas’ investment in these new aircraft underscores its commitment to environmental stewardship through the reduction of aircraft emissions, resource consumption and noise. The iconic Boeing 747 programme has been in operation for over 50 years and will continue to play a critical role in keeping global supply chains moving for decades to come. The 747-8 is the only factory-built freighter with nose-loading capability in production, which will serve the long-term needs of the airfreight market.

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Frontier Airlines and Spirit Airlines announce amended merger agreement

Spirit Airlines and Frontier Group Holdings, parent company of Frontier Airlines, have announced an amendment to their previously announced merger agreement dated February 5, 2022.

Under the terms of the amended merger agreement, which has been unanimously approved by the boards of directors of both companies, Frontier would pay a reverse termination fee of US$250 million, or US$2.23 per share, to Spirit in the unlikely event the combination is not consummated for antitrust reasons.

William A. Franke, the Chair of Frontier's Board of Directors and the managing partner of Indigo Partners, Frontier's majority shareholder, said, "We continue to believe in the strategic rationale of a combined Spirit and Frontier, which brings together two complementary businesses to create America's most competitive ultra-low fare airline. Given our conviction that regulators will find this combination to be pro-competitive, we have agreed to institute a reverse termination fee. We look forward to bringing these two companies together and delivering on the benefits for all stakeholders."

Ted Christie, President and CEO of Spirit, said, "Since announcing our transaction with Frontier, we have had extensive constructive conversations with our stockholders, who have expressed support for the strategic rationale of our combination but a desire for additional stockholder protections. After discussing this feedback with the Frontier Board and management team, we have agreed to amend the merger agreement. We look forward to closing the transaction and bringing more ultra-low fares to more people in more places." (£1.00 = US$1.26 at time of publication.)

ALC places three new Airbus A321neo aircraft on lease to LATAM Airlines

Air Lease Corporation (ALC) has announced long-term lease placements for three new Airbus A321neo aircraft with LATAM Airlines. The aircraft are scheduled to deliver to LATAM in summer and fall of 2023 from ALC’s orderbook with Airbus.

“We are pleased to announce the long-term leases of three new Airbus A321neo aircraft to the largest airline in South America: LATAM Airlines,” said Steven Udvar-Házy, Executive Chairman of Air Lease Corporation. “This is another important step in LATAM’s fleet modernisation and network strategy optimisation.”

LATAM is Latin America’s leading airline group, with presence in five domestic markets in South America: Brazil, Chile, Colombia, Ecuador and Peru, along with international operations within Latin America and to Europe, U.S. and the Caribbean. The group operates a fleet including Boeing 787, Airbus A350, A321, A320neo and A319 aircraft, the most modern models of their kind.
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