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LATEST NEWS
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Tuesday, April 21st, 2020
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Over recent weeks, billionaire Sir Richard Branson has been on the receiving end of negative press in relation to his request to the British government for a £500 million (US$625 million) bailout to stop Virgin Atlantic going bust. Many feel he should use part of his estimated £4.7 billion (US$5.88 billion) personal fortune instead. Branson has lived on his privat island, Necker Island in the British Virgin Islands, for the last 14 years.
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In his defense, Branson, who holds a 51% stake in the carrier he founded back in 1984 (Delta Air Lines holds the remaining 49%), made it clear that the funds being sought were on the basis of a commercial business loan that would have to be repaid and that he was not looking for a ‘hand out’. Having been turned down by the government, who advised him to exhaust all other possible avenues for fundraising, Branson on Monday, April 20, promised to “raise as much money against the island as possible to save as many jobs as possible.”
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Referring to what he called the “devastating impact this pandemic continues to have”, Branson said in a public blogpost that: “The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. We will do everything we can to keep the airline going – but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.”
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Heston MRO, the independent MRO organisation headquartered in Brisbane, Australia, has added Part 147 Technical Training capability to its range of services.
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On April 7h, Australian Civil Aviation Safety Authority (CASA) approved Heston MRO MTOE and issued a Part 147 Approval Certificate, allowing Heston MRO to deliver technical training courses, conduct examination, as well as issue completion certificates to qualifying trainees.
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The launching Part 147 capability covers Airbus 318/319/320/321 ceo- and neo-generations with all types of engines, including theory and practical training courses. The rapid course expansion is planned to include A318/319/320/321 difference courses, Boeing 787- 8/9/10 type courses, and others.
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The newly acquired Part 147 approval allows Heston MRO to conduct training courses via Virtual Synchronous Delivery (VSD). This means trainees can be located in any one of Heston MRO’s training facilities in either Brisbane, Sydney, Melbourne or Perth whilst the instructor can be located at a different training facility, delivering training via a video conference platform.
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For the first-quarter of 2020, United Airlines Holdings (UAL) and United Airlines, a wholly-owned subsidiary of UAL, recorded a pre-tax loss of US$2.1 billion, $1.0 billion pre-tax loss on an adjusted basis. Total revenues were US$8.0 billion, a 17% decline year-over-year. The results are preliminary and final results for the first quarter may change.
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As of April 16, 2020, the company had US$6.3 billion of cash, cash equivalents, short-term investments and undrawn amounts, including US$2 billion under its undrawn revolving credit facility. As previously disclosed, in March and in early April 2020, United has borrowed an aggregate of US$2.75 billion under new secured term loan facilities each of which must be repaid in a single instalment on the applicable maturity date, which, in each case, is twelve months from the borrowing date.
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On April 17, 2020, the company submitted an application to the Loan Program under the CARES Act. Under the Loan Program, the Company expects to have the ability through September 30, 2020 to borrow up to approximately US$4.5 billion from the U.S. Treasury Department for a term of up to five years. Any loans issued under the Loan Program are expected to be senior secured obligations of the company, with collateral to be determined. If the company borrows any amounts under the Loan Program, UAL expects to issue to the U.S. Treasury Department warrants to purchase shares of UAL common stock.
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The company has experienced, and continues to experience, a material decline in demand for both international and domestic travel resulting from the spread of coronavirus (COVID-19). The company has cut approximately 80% of its capacity for April 2020 and currently expects to cut 90% of its capacity for May 2020, with similar cuts expected for June 2020. The company plans to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand.
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Mesa Air Group has released that it expects to receive US$92.5 million in assistance from the Treasury Department under the Payroll Support Program as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The funds can only be used for the continuation of payment of employee wages, salaries, and benefits for the period April 1, 2020, to September 30, 2020. The company is finalizing the agreements with the Treasury Department and expects it will be completed shortly.
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The company has agreed to certain conditions under the program, such as: prohibitions against involuntary furloughs and reductions in employee pay rates and benefits through September 30, 2020; the elimination of share repurchases and dividends until September 30, 2021; and limits on executive compensation until March 24, 2022. Because the amount of payroll support is less than US$100 million, the company will not be required to enter into a loan or equity agreement with the Treasury Department. The company is also considering applying for federal loans through a separate program under the CARES Act.
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Mesa Air Group, headquartered in Phoenix, AZ, is the holding company for Mesa Airlines, a regional carrier operating as American Eagle and United Express Airlines pursuant to the terms of capacity purchase agreements entered into with American Airlines and United Airlines.
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Southwest Airlines has also finalized an agreement with the United States Department of Treasury. Southwest will receive more than US$3.2 billion in disbursements over the next several months. The funding supports job protection for more than 60,000 Southwest Employees through September 30, 2020.
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The deal allows Southwest to receive an immediate payment of approximately US$1.6 billion of the more than US$3.2 billion total proceeds, and the remainder will be paid in installments during May, June, and July.
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Singapore Technologies Engineering (ST Engineering) has secured new contracts worth about S$1.6 billion, secured by its Aerospace and Electronics sectors in the first quarter of 2020. These contracts are over and above a defence contract that its Land Systems arm secured.
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The Group’s Aerospace sector secured about S$838 million across its spectrum of aviation manufacturing and MRO businesses. The MRO contracts included A320 heavy maintenance contracts and CFM56-7B engine maintenance contracts from Chinese airlines, and a component Maintenance-By-the-Hour (MBHTM) contract from a Southeast Asian airline to provide comprehensive component maintenance services for its entire fleet of Boeing 737 and Bombardier Q400. These 1Q contracts comprised those previously announced in February during Singapore Airshow 2020, namely: multi-year engine and component MRO contracts from a South Korean airline; a fiveyear nacelle maintenance contract and a three-year airframe heavy maintenance contract.
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The Group’s Electronics sector secured about S$730 million worth of contracts for products and solutions in smart mobility, cybersecurity, data analytics as well as training and simulation.
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HAECO Cabin Solutions has launched new, certifiable devices to allow package stowage in the main passenger cabin.
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As the COVID-19 environment developed, the company noted that airlines were beginning to use passenger flights strictly for cargo. At the same time, social distancing directives were being instituted nationwide. HAECO quickly developed solutions to allow airlines to carry cargo and passengers at the same time, optimising passenger and cargo yield, using packages to distance
passengers, and maintaining proper weight and balance requirements.
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Four unique solutions moved from concept to offerable in less than a month. The solutions will be certified through a Supplemental Type Certificate (STC) and are unique in the amount of weight that can be carried. The palletised variant can hold 1000 lbs., the all-in-one seat frame can hold 500 lbs., and the seat and floor storage systems can each hold up to 240 lbs. These options give
airlines specific load authorisations and the capability of carrying larger items in the cabin that otherwise would have been stored in the aircraft’s belly, except for hazardous materials.
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The solutions build upon existing seating and interior technologies and can be delivered in four to six weeks. Variants can be combined for both single and twin aisle aircraft to achieve an ideal operational payload. The installation process follows techniques used for economy seating, which can be accomplished quickly and without the need for special tools.
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BOC Aviation (USA) has reported that it entered into an agreement with United Airlines pursuant to which it agreed to purchase six Boeing 787-9 aircraft and 16 Boeing 737-9 MAX aircraft from the United and to lease the aircraft back to the airline.
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The Transaction is scheduled to close in 2020.
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