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LATEST NEWS
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Monday, April 20th, 2020
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GECAS, the aircraft leasing arm of General Electric Co, has canceled an order for 69 of the Boeing 737 MAX jets that has remained grounded since March 2019, citing a desire to evaluate its order book during the COVID-19 pandemic.
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Currently, GECAS maintains 29 737 MAX jets and still has a further 82 of the jets on order. However, the COVID-19 outbreak has had a massive impact on air travel and many carriers are now deferring deliveries of planes until such time as the demand for air travel returns. Referring to developments last Friday, April 17, Greg Conlon, chief executive officer of GECAS, said in a statement: “Today’s agreement will help GECAS better align our available fleet with the needs of our global customer base.”
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According to Reuters news agency, Boeing said on Friday it had “come to an agreement with GECAS to restructure their MAX order book.” Referring to the respiratory disease caused by the virus, Boeing also said: “In light of the COVID-19 pandemic, this adjustment helps to balance supply and demand with market realities, especially in the leasing channel,” adding that “Disciplined adjustments provide us with greater flexibility to manage the 4,000 outstanding 737 orders and protect the value of the MAX in the marketplace.”
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Having confirmed that two updates for the flight control computer on the 737 MAX will be made this month to address a couple of new issues, Boeing hopes that a key certification test flight will take place next month. In the meantime, with the announcement that commercial plane production will resume in Washington state this week, shares in Boeing rose 12 per cent.
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Skyworld Aviation has arranged the sale of two ERJ 145 EP aircraft on behalf of owner Cymus Holding AB of Sweden. Skyworld has lease-managed both aircraft since leaving original operator Skyways of Sweden, back in 2004, when the two aircraft went through an FAA conversion and moved to the U.S.
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Both aircraft operated with a large regional airline for seven years, and then went on to operate with small independent airlines in the U.S. Serial numbers 145169 (N359AD) and 145185 (N459AD) were delivered to its new owner, a U.S.-based regional aircraft sales and leasing firm, last month.
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GE Aviation has signed an exclusive Authorized Repair and Services Provider Agreement with Brightwater United Aero Group (UAG) to cover certain non-military customers flying GE’s reliable
T700 helicopter engine.
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Brightwater UAG, based in Shelton, Connecticut, in conjunction with Brightwater Arista Aviation Services Group, Alabama, and the worldwide network of GE Licensed Maintenance, Repair and Overhaul Facilities, supports T700 engines powering restricted category and public use Blackhawk helicopters. This includes Blackhawks performing utility and firefighting missions.
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“This specific helicopter marketplace is rapidly expanding and wanted an OEM sponsored solution. We, at UAG and Arista, are delighted to participate with GE in servicing an incredible group of
customers who operate this equipment providing a range of essential missions,” said Jamie Gelder, President of United Aero Group
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The agreement covers the repair, upgrade, lease and exchange of T700 engines and parts for these fleets. It not only includes the use of new OEM parts, but now includes the opportunity to incorporate used serviceable material that meets OEM standards.
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In the coming weeks, Lufthansa will temporarily decommission the entire Airbus A340-600 fleet. Three aircraft of this type have already been flown to Teruel, in northeastern Spain, where the long-haul aircraft will be parked at the airport.
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Lufthansa plans to transfer the entire A340-600 fleet, equaling 17 aircraft, to Teruel where they will be decommissioned over the next 2-3 months. These aircraft will not be operating within the regular scheduled services for at least the next one to one and a half years.
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A decision on the future use of the aircraft or a possible reactivation of a maximum of ten aircraft will be taken at a later stage in time.
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Teruel Airport is located between Zaragoza and Valencia in the northeast of Spain. With around 240 days of sunshine a year and little rainfall, the region is particularly suitable for parked aircraft.
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In its latest meeting, the Board of Directors of SN Airholding has decided to appoint Jan Smets as its Co-Chairman. He takes over with immediate effect from Etienne Davignon who remains member of the Board of Directors.
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Thorsten Dirks, Member of the Lufthansa Group Executive Board & Chief Officer IT, Digital & Innovation, will chair next to Jan Smets and herewith keeps his position as Co-Chairman of the Board.
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In parallel, Christina Foerster, Member of the Lufthansa Group Executive Board, Customer & Corporate Responsibility and former CEO of Brussels Airlines, will join the SN Airholding Board of Directors as new member, herewith replacing Jörg Beissel, Head of Corporate Controlling at Deutsche Lufthansa AG.
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With almost two thirds of all aircraft financed by asset backed securities (ABS) now grounded due to the COVID-19 crisis, receipts of both aircraft rental and maintenance payments are likely to fall, according to aviation consultants IBA.
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Data from IBA.iQ indicates that 62% of all aircraft in ABS finance structures created since 2015 are
either parked or stored, compared to 48% of the overall global aircraft fleet. Within the ABS structures, widebodies make up the highest proportion of grounded aircraft due to the effects of COVID-19 on long haul travel.
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This situation is likely to cause cashflow pressures within aircraft ABS structures as operators seek rental payment holidays and groundings cause uncertainty in the level of unplanned maintenance
costs.
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This uncertainty has the potential to cause defaults in ABS structures in the medium term (six to 12 months from now) once the total cost of unplanned maintenance impacts overall liquidity.
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Data from IBA.iQ also illustrates that returning grounded aircraft to service in China is only just
beginning and currently at a very low level. With the impact of COVID-19 in China reported to be 2-3 months ahead of other countries, IBA forecast that aircraft groundings in other regions will continue through the second quarter of 2020 (April – June).
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Phil Seymour, President of IBA, says: “Aircraft ABS structures are set to suffer the effects of aircraft groundings in the year ahead. A combination of prudent cash management and active engagement with lessees will be crucial to effectively managing outlooks in the medium and long term.”
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With unplanned lease ends set to increase as aircraft are grounded and operators face financial challenges, ABS structures will face significant costs which will not have been planned or modelled. These include ferry flights, maintenance, redelivery, reconfiguration and regulatory liaison.
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Kellstrom Aerospace has acquired an A320-214 (MSN 2180) with serviceable CFM56-5B4/P engines. The A320 airframe was acquired for disassembly in the U.K. The engines will be remarketed through Kellstrom Aerospace Asset Management.
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This project will enhance Kellstrom Aerospace’s unique and innovative lifecycle solutions portfolio by supporting both Kellstrom Aerospace Asset Management division with additional short to mid-term lease assets and the aftermarket supply business.
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Embraer Defense & Security and Sierra Nevada Corporation (SNC) announced the first of 12 A-29 Super Tucano light attack, combat and reconnaissance aircraft for the Nigerian Air Force (NAF) successfully completed its inaugural flight at the production facility in Jacksonville, Florida.
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The full fleet of A-29 Super Tucano aircraft for the NAF are currently in production by SNC and Embraer at the Jacksonville facility with delivery to the NAF expected on schedule in 2021.
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The NAF A-29 aircraft will now begin mission modification and final testing in Centennial, Colorado. Following final testing, before delivery, NAF pilots will train in the aircraft.
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EU authorised benchmark administrator the Baltic Exchange has partnered with air cargo pricing publisher TAC Index Company of Hong Kong. The Baltic Exchange and TAC will provide new regional general air cargo rate assessments. TAC’s Regional General Air Cargo Indices
will be rebranded as the Baltic Air Freight Index (BAF Index) powered by TAC Index and come under the governance of Baltic Exchange Information Services Limited (BEISL). TAC Index will act as the Calculating Agent.
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TAC Index provides weekly average assessments for general cargo on 32 major air trade lanes and is based on transaction data submitted by global freight forwarders. Launched in 2016, the TAC Index is widely referenced in the air cargo market and has established itself as a trusted and independent source for market freight rates.
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The Baltic Exchange will initially undertake a rigorous review of the TAC Index’s methodology and processes to establish a governance structure which will ensure the index's compliance with U.K.’s Financial Conduct Authority’s (FCA) rules for benchmarks.
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