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LATEST NEWS
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Wednesday, March 25th, 2020
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U.S. airline stocks surged as U.S. lawmakers came much closer to agreeing up to US$32 billion in grants, as opposed to loans, for passenger and cargo airlines, together with associated contractors. Shares in American Airlines Group Inc rose 35% to $13.90, Delta Air Lines increased 22%, United Airlines went up 25% and JetBlue Airways Corp increased by 30%.
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The total amount of the aid will be divided up along the lines of an expected US$25 billion for airlines, US$4 billion for cargo carriers, and US$3 billion for contractors, such as caterers, etc. A critical element to the bailout, which was originally in the form of loans, is that it will now be in the form of grants, the former requiring repayment at some point, the latter not requiring repayment.
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With the collapse of the travel industry owing to the COVID-19 outbreak, carriers had been threatening to lay of hundreds of thousands of staff if financial aid was not forthcoming. Last Sunday, a Senate Republican aid package was offered in the form of $US58 billion in loans, while yesterday, House Democrats had suggested US$40 billion in grants. As part of the deal, the aid will be used principally to pay staff wages up until August 31 and stock buyouts and dividends would be suspended, while senior executives’ pay would also be limited, though the CEOs of Southwest, JetBlue, Delta and United Airlines announced last week that they would either be forgoing all pay, or taking a substantial cut, during the current crisis.
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Following Boeing's announcement to temporarily suspend production at its Washington state facilities, Spirit AeroSystems will also suspend Boeing work performed at its facilities in Wichita, Kansas, and in Tulsa and McAlester, Oklahoma. This action will begin Wednesday, March 25, and last 14 calendar days, until April 8. Spirit will continue to support 787 work for Boeing's Charleston, South Carolina, facility as needed.
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Spirit will use the time to further deep clean and sanitize work spaces and facilities as the company will continue to take precautions to protect the health and safety of its team.
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AJW Group has purchased a CFM56-5B4 engine for tear-down in support of expanding engine management programs.
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The high-quality engine parts will be stored at AJW Group’s HQ in Sussex, U.K. and shipped to its strategic hubs around the world ready for exchange and sale to support its airline customers’ extensive portfolio of A320 family aircraft.
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Thomas Global Systems has achieved another regulatory certification milestone with receipt of Transport Canada Civil Aviation (TCCA) Supplemental Type Certificate (STC) approval for its TFD-7000 Series plug-and-play LCD flight displays for Boeing 737/757/767 CRT-equipped aircraft.
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Transport Canada approval of the TFD-7000 Series follows FAA Technical Standard Order (TSO) authorization for Boeing 737/757/767 aircraft in July of 2019, and FAA STC approvals for Boeing 757/767 and 737-3/4/500 aircraft in July and October of last year, respectively. The TFD-7000 LCD solution is currently being installed in the U.S. on all three Boeing fleet types.
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With Transport Canada 737/757/767 STC approval achieved, Thomas Global is proceeding with validation of FAA approvals with the European Aviation Safety Authority (EASA) and other foreign regulators.
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Trenchard Aviation Group has appointed Sohaib Ahmed as its Technical Sales Manager. Ahmed has worked in the aviation industry for over eight years and has held several sales positions within aircraft cabin interiors and MRO businesses.
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With an extensive technical sales background across the aircraft cabin interiors sector, he has worked with many of the world’s leading airlines, leasing companies and MROs delivering complex line-fit and retrofit projects.
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At Trenchard Aviation Group, Ahmed will be working closely with airlines, seating OEM’s and aftermarket suppliers delivering sales of Life Vest Pouches and providing technical and commercial support from inquiry through to delivery and aftermarket care.
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Bombardier has released that in support of the recent mandates from the Governments of Quebec and Ontario to help slow the spread of the COVID-19 pandemic, it will suspend all non-essential work at most of its Canadian based operations starting March 24 at 11:59 pm, until April 26, 2020, inclusively. This suspension includes Bombardier’s aircraft and rail production activities in the provinces of Quebec and Ontario.
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Employees impacted by these temporary shutdowns will be placed on furlough, as will corporate office employees whose support functions are less critical in the short-term. During this furlough period, Bombardier’s CEO and senior leadership team will forgo their pay, and the Chairman and members of Bombardier’s Board of Directors have agreed to forgo board compensation for the remainder of 2020.
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Bombardier is also suspending its 2020 financial outlook as it evaluates the impact of temporarily closing its Canadian operations, as well as other actions being taken in response to the COVID-19 pandemic.
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Norwegian has reported that two Nordic banks have obtained credit committee approval to provide a guarantee for the required 10% for the first tranche of NOK 300 million. Norwegian will secure the necessary headroom to pursue further guarantees from the Norwegian Government.
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On March 19, the Norwegian Government proposed a guarantee of NOK 6 billion for the Norwegian airline industry, of which up to NOK 3 billion is directed to Norwegian. The guarantee will be up to 90% from the Norwegian Government provided that financial institutions contribute with the remaining 10%. The guarantee scheme will consist of three tranches with a maximum two years maturity.
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Currently, most of the fleet is grounded and the Company has reduced its operations to a minimum. The Company will now primarily operate domestically in Norway and Sweden and between the Nordic capitals, in order to deliver on its corporate responsibility of maintaining critical infrastructure so that people and necessary goods and medical supplies can be transported during this unprecedented crisis.
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The International Air Transport Association (IATA) updated its analysis of the revenue impact of the COVID-19 pandemic on the global air transport industry. Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet US$252 billion or 44% below 2019’s figure. This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year.
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IATA’s previous analysis of up to a US$113 billion revenue loss was made on March 5, 2020, before the countries around the world introduced sweeping travel restrictions that largely eliminated the international air travel market.
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“The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst case scenario is looking better than our latest estimates. But without immediate government relief measures, there will not be an industry left standing. Airlines need US$200 billion in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit,” said IATA’s Director General and CEO, Alexandre de Juniac.
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The latest analysis envisions that under this scenario, severe restrictions on travel are lifted after 3 months. The recovery in travel demand later this year is weakened by the impact of global recession on jobs and confidence. Full year passenger demand (revenue passenger kilometers or RPKs) declines 38% compared to 2019. Industry capacity (available seat kilometer or ASKs) in domestic and international markets declines 65% during the second quarter ended June 30, compared to a year-ago period, but in this scenario recovers to a 10% decline in the fourth quarter.
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ePlane, the advanced AI driven, B2B Sourcing and Business Intelligence platform for the Aerospace Parts and Repair markets announced the investment led by major Japanese trading and investing company, Marubeni Corporation, and current investors totaling US$9 million.
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ePlane is changing the way companies in the Aerospace industry are conducting business. The revolutionary online platform enables users to trade aircraft parts, locate repair services, and improve supply chain bottlenecks and the cost structure of its users. The Aviation Maintenance, Repair and Overhaul (MRO) market is impressive. With an US$80 billion global MRO market and an expected growth to US$116 billion by 2029, the industry is ready for more efficient, modern, and effective methods to improve the way it transacts.
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By bringing efficiency to the MRO industry, ePlane has catapulted it into the 21st century, providing centralized sourcing, BI, and a marketplace for buying, selling, repairing, loaning, and exchanging aircraft parts. The platform digitizes the procurement process, syncing enterprise resource planning (ERP) systems and custom inventories, to ensure that inventories are most up to date in real time.
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“We are delighted to see Marubeni joining us and see this partnership as an important one to the ongoing growth and success of ePlane. This is a strategic step,” said Benny Shabtai, one of ePlane’s initial investors and Board Members who previously sold mobile instant-messaging, voice and video calling app, Viber, to Japanese tech giant Rakuten.
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