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LATEST NEWS
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Wednesday, April 1st, 2020
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Having announced two weeks ago that it was to retire 34 Boeing 757s and 17 Boeing 767s, American Airlines has announced that with the dramatic downturn in world travel, it will now be retiring 76 Boeing 737s that the carrier acquired between 1999 and 2001. In addition, it will also be retiring nine Airbus and 20 Embraer E190s according to Reuters news agency.
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There is also the distinct possibility that a number of its 50-seat regional jets will also be retired. American Airlines sees this as an opportune moment to retire an additional number of jets with a view to replacing them with Boeing 737MAX jets that are currently on order but awaiting the lifting of the model’s grounding after two fatal crashes.
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“Decisions beyond the 757 and 767 have yet to be finalized, and we continue to make refinements to our overall fleet plan,” American spokesman Ross Feinstein said, adding that decisions would be based on demand. The move to newer, more fuel-efficient jets, while avoiding costly retrofitting that may have been required on older 737s, will still require considerable expenditure, but running costs will be significantly reduced as a consequence.
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While many carriers may now choose to dispose of older aircraft, this could prove beneficial for the manufacturing side of the aerospace sector as a demand for new jets could increase substantially with an increased rate in retirements. To date, American Airlines has temporarily parked 135 out of 150 wide-body jets — including 787 Dreamliners — and more than 300 single-aisle jets, and may continue to park more of its smaller aircraft as the COVID-19 crisis continues, the carrier’s president, Robert Isom, told employees.
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The executive board of MTU Aero Engines AG resolved to withdraw the guidance for the financial year 2020. The Company’s decision is based on the assessment of market scenarios presently deemed likely, and on a catalogue of expenditure reduction measures. The previous guidance was published on February 20, 2020, already with the reservation to review it during the year due to the Corona pandemic.
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Especially due to significant reductions in passenger air traffic and the consequences for airlines, revenues and adjusted EBIT for the financial year 2020 are expected not to grow with a high single digit percentage as forecast. The cash conversion rate, expressing the ratio of free cashflow to net income adjusted, is also likely not to reach the forecast 70% in 2020.
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Due to the dynamic of worldwide developments in the context of COVID-19 a specification of expectations with regard to revenues, adjusted EBIT and especially the cash conversion rate, based on the developments of the coming weeks and the resulting consequences for the Company’s performance, can be made only at a later point in time.
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Acro Aircraft Seating has appointed Neil Cairns as the company’s Chief Executive Officer effective from March 9, 2020.
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Cairns brings with him many years’ aerospace seating experience, covering products in all seating classes. He has a wide-ranging track record of lean process improvement and performance improvement, most recently holding positions as the Vice President and General Manager at Collins Aerospace based in Tucson, Arizona and Winston Salem, North Carolina based in the U.S.A. and previously running the B/E Aerospace seating facility in Kilkeel, Northern Ireland.
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Dubai Aerospace Enterprise (DAE) has ended the first quarter 2020 with available liquidity of approximately US$2.8 billion. DAE’s owned, managed and mandated-to-manage fleet exceeded 400 aircraft. During the first quarter, DAE sold or novated 15 aircraft, acquired four aircraft and transitioned or extended leases on eight aircraft.
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Firoz Tarapore, DAE’s Chief Executive Officer said, “In these unprecedented times, DAE has positioned itself to operate calmly and to balance the needs of all our important constituents – employees, customers, bondholders and banks, and shareholders.
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TUI AG has received the approval of the German government for a bridging loan of €1.8 billion from the KfW. The funds of Germany’s state-owned development bank are to be used to increase TUI's existing credit line with its banks amounting to €1.75 billion (Revolving Credit Facility).
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The KfW bridge loan is subject to the approval of the banks. Talks on this have already started and will be continued. One of the conditions of the KfW bridge loan is that TUI waives dividend payments for the duration of the bridge loan. This would give TUI access to financial resources and credit lines totaling €3.1 billion at the present time.
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TUI had decided to apply for the KfW bridging loan to cushion the unprecedented effects of the COVID 19 pandemic until normal business operations could be resumed. Following travel restrictions and travel warnings from almost all countries, the Group had to suspend its touristic offers in mid-March, including packaged tours, cruises, and hotel operations, until further notice.
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In the past financial year 2019, TUI Group generated a turnover of around €19 billion and operating results of €893 million, including the costs of almost €300 million for the flight ban on the Boeing 737 MAX. Excluding the costs from the flight ban, operating results were at the level of the record year 2018 (€1.2 billion). At the beginning of February 2020, bookings for the current summer were 14% higher than previous year. January 2020 was the strongest booking month in the company's history.
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Transport Canada Civil Aviation has approved Aeronautical Engineers' (AEI) STC (ST01827LA) for the 11-pallet position B737-400SF freighter conversion and the 10-pallet position B737-300SF freighter conversions.
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Foreseeing an uptick in demand for the B737 Classic freighter programs, AEI initialized the approval process with Transport Canada in the fourth quarter of 2019. In addition to FAA, EASA, and now Transport Canada approvals, AEI’s B737-400SF and B737-300SF freighter conversions are also approved in Russia, Brazil, India, Australia, and China.
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The AEI converted 11-pallet position B737-400SF freighter offers a main deck payload of up to 47,100 lbs. (21,364 kg), while the 10-pallet position B737-300SF freighter offers a main deck payload of up to 42,900 lbs. (19,460 kg). Both freighter conversions include a large 86” x 140” Main Cargo Door with a dual vent door system, 9g rigid cargo barrier and a flexible Ancra Cargo Loading System.
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AEI announced two firm orders for the B737-800SF conversion for Allied Air earlier this month and has also announced at least five B737 classic freighter conversions with various customers in the first quarter of this year alone.
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On January 24, 2020, Avia Solutions Group signed an agreement with BB Holding EHF for the full acquisition of Bluebird Nordic, which entails a 100% stake ownership of the company’s shareholdings. On March,
31, 2020, following the completion of all prerequisites and receipt of relevant clearances from competition authorities, the transaction was finalized.
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Bluebird Nordic uses a fleet of six aircraft and operates scheduled as well as charter flights under its brand. The airline also offers cargo export and import services from and to Iceland, serving more than 100 locations worldwide.
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“We are happy that Bluebird is now a member of Avia Solutions Group and look forward to working with the new owners to grow and strengthen the company. We are certain that the company, its employees and customers will feel the benefits of belonging to such a strong aviation industry player”, says Steinn Logi Björnsson, Managing Director of Bluebird Nordic.
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As a part of Avia Solutions Group, Bluebird Nordic is expected to develop further, expand its existing service portfolio and improve its operations.
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The U.S. Navy has awarded Boeing a US$1.5 billion production contract for the next 18 P-8A Poseidon aircraft. The contract includes eight aircraft for the U.S. Navy, six aircraft for the Republic of Korea Navy and four aircraft for the Royal New Zealand Air Force.
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The Republic of Korea Navy and Royal New Zealand Air Force acquired the aircraft through the Foreign Military Sales process and will receive the same P-8A Poseidon variant designed and produced for the U.S. Navy. The Royal New Zealand Air Force is expected to begin receiving aircraft
in 2022 and the Republic of Korea Navy is expected to begin receiving aircraft in 2023.
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AeroCentury, an independent aircraft leasing company, has reported a fourth quarter 2019 net loss of US$7.0 million, compared to a net loss of US$3.8 million for the fourth-quarter of 2018. Net loss for the year ended December 31, 2019 was US$16.7 million, as compared to a net loss of US$8.1 million in 2018. The results for the fourth quarter of 2018 and subsequent periods reflect the combined operations of AeroCentury and its subsidiary, JetFleet Holding, which was acquired by the company on October 1, 2018.
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The termination of the leases for, and repossession of, four aircraft from one of the Company’s lessees (Repossessed Aircraft) in the third quarter of 2019 had a substantial adverse impact on the Company’s results. As a result of those events, the Company recognized maintenance reserves revenue of US$17.0 million with respect to the Repossessed Aircraft at the time of repossession, but also recorded impairment losses for the Repossessed Aircraft of US$22.3 million and US$6.1 million during the third and fourth quarters, respectively, based on third-party appraised values for three of the aircraft and expected sales proceeds for the fourth aircraft.
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Results for the year ended December 31, 2019 also included impairment losses totaling US$2.6 million, based on third-party appraised values or expected sales proceeds, for three older turboprop aircraft, a spare engine and an older turboprop aircraft that is being sold in parts.
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