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LATEST NEWS
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Wednesday, April 29th, 2020
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In a virtual shareholders’ meeting on Monday this week, Boeing CEO David Calhoun warned that the world’s second-largest planemaker will need to raise further cash over the next six months and will be unlikely to pay any shareholder dividends for many years to come. “That process could take three to five years... It’s going to be a while before dividends come back,” Calhoun said.
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The aerospace giant is suffering, financially, from the dual problems of the effects of the COVID-19 pandemic on the industry and ongoing problems which has seen its 737 MAX jet remain grounded for over 13 months. “We know we’re going to have to borrow more money in the next six months in order to get through this really difficult moment, to provide the right liquidity to the supply chain that represents our industry,” Calhoun said during the company’s virtual annual general meeting, adding that: “Our first priority is going to be to pay that back, the principle and the interest that goes with it.”
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Boeing’s intention is to maintain the current supply chain by ordering parts and services from smaller companies to ensure their continued survival. Boeing will report first-quarter earnings Wednesday, April 29, while last month it drew down its entire US$13.8 billion credit line and suspended its dividend. Boeing’s first- quarter deliveries were down one third compared to the same period last year. The anticipated return to service of the 737 MAX by mid-year no longer seems to be feasible with a key certification flight test unlikely to take place before the end of May, though Calhoun was keen to point out the company’s continued confidence in the MAX.
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Bombardier has begun the process of recalling most of its Canadian-based employees who were placed on furlough following government mandates enacted to slow the spread of COVID-19. Suspended manufacturing and service activities will gradually resume as of May 11.
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Nearly 11,000 employees are expected to be back to work within the next few weeks across the company's aviation and transportation segments and Bombardier’s Corporate Office. Return-to-work schedules will vary by site and be subject to new procedures to ensure employee health and safety.
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Site and function leaders will be communicating specific plans and dates directly to employees. All recalled employees whose physical presence is not required at Bombardier’s production or service sites will be asked to work from home until further notice.
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STS Aviation Services (STS), an MRO provider to the global aviation industry, is now AS9110C certified in the United Kingdom. This certification grants STS Aviation Services the authority to maintain, repair and overhaul both civilian and military aircraft in accordance with aerospace law and global regulatory requirements.
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Having just recently entered the MRO market in the United Kingdom after acquiring Apple Aviation and purchasing the former MAEL base maintenance facility in Birmingham, STS Aviation Services considers this AS9110C accreditation a significant signal of progress and a great indicator for what’s to come.
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GA Telesis' MRO Services Group has received approval from the Civil Aviation Administration of China (CAAC) for its Miami-based landing gear operation. This new rating allows GA Telesis MRO Services to repair and overhaul CRJ900 landing gears for China Express Airlines (China Express).
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In 2019, the company has entered into a long-term agreement to overhaul landing gears for China Express’ entire fleet of CRJ900 aircraft. The maintenance commenced this year on a US$27 million contract. Landing gear repairs and overhauls for this aircraft type will occur in the Miami facility located across from Miami International Airport.
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GA Telesis MRO Services began landing gear overhauls mid-2019 and has entered into several contracts to perform overhaul and repairs on regional aircraft. “This certification provides the Company with an entry point into the Asia-Pacific market and fulfils its strategic plan to increase its product offerings for this year,” said Pastor Lopez, President MRO Services.
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The Company will deliver the first landing gear shipset this month.
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Airbus has reported consolidated financial results for its first-quarter 2020.
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Consolidated revenues decreased to €10.6 billion, -15% compared to first-quarter 2019, reflecting the difficult market environment impacting the commercial aircraft business with 40 less deliveries than a year earlier, partly offset by a better mix and more favourable foreign exchange environment.
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A total of 122 commercial aircraft were delivered (Q1 2019: 162 aircraft), comprising eight A220s, 96 A320 Family, four A330s and 14 A350s. Airbus Helicopters delivered 47 rotorcraft (Q1 2019: 46 units) with its 19% increase in revenues reflecting the favourable delivery mix and growth in services. Revenues at Airbus Defence and Space were stable year-on-year. One A400M transport aircraft was delivered in the quarter.
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Airbus reported EBIT Adjusted of €281 million, down 49% from the previous year. The company reported a net loss of € -481 million for the first-quarter. Consolidated free cash flow amounted to € -8,030 million and included the payment of € -3.6 billion in penalties related to January 2020’s compliance agreement with the authorities.
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Finnair Group has posted first-quarter 2020 results. Revenue decreased by 16.0% to €561.2 million compared to €668.2 million the previous year. Unit revenue (RASK) decreased by 7.3%, unit cost (CASK) increased by 5.1%. Unit cost excluding fuel increased by 4.0%.
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Fuel costs decreased by only €1.3 million (-0.9%). The coronavirus-related decline in capacity was almost fully netted by the impact of the fuel price.
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The comparable operating result was €-91.1 million compared to €-16.2 million the prior year. The operating result was €-95.6 million compared to €-17.6 million in 2019.
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Financial net expenses increased significantly, with €55 million of the increase related to jet fuel and foreign exchange hedging that was reclassified from other comprehensive income.
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Net cash flow from operating activities was €-133.5 million compared to €148.3 million in the first quarter 2019, and net cash flow from investing activities was €-67.3 million compared to €-70.2 million.
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Field Aerospace has been selected as an awardee on the Kits, Recovery, Augmentation, Components and Engines (KRACEn) Multiple Award Contract (MAC) supporting the United States Navy.
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Commander, Fleet Readiness Center (COMFRC) awarded a 10-year, US$6.1 billion, enterprise contract vehicle to 42 small business industry partners on April 14, enabling U.S. Navy, government customers and international partners to procure aircraft maintenance services and sustainment support quicker.
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The Kits, Recovery, Augmentation, Components and Engines—commonly called KRACEn—is an indefinite-delivery, indefinite-quantity (IDIQ) MAC that will provide maintenance services and support for single satellite sites, small aircraft quantities, personnel to augment government maintenance teams, and overhaul capabilities for aircraft components and subsystems.
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This is COMFRC’s first, multi-billion contract award. The MAC’s scope of work, which is set aside for small-businesses, includes modification kit build and installations, recovery of downed aircraft, repair and overhaul of aircraft and components, repair and overhaul of engines, and augmentation labor supplement for maintenance both ashore and afloat.
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BOC Aviation has promoted David Walton to Deputy Managing Director, a position he will hold in addition to his current role of Chief Operating Officer.
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Walton joined BOC Aviation as Chief Operating Officer and a member of the senior management team in November 2014. He has responsibility for legal and transaction management, portfolio management, technical, strategy and market research, compliance and corporate affairs, investor relations and corporate communications and information technology.
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Walton has more than 33 years of experience in the aircraft leasing and finance industry. Prior to joining the Company, he served as a general counsel and a chief operating officer for both privately held and publicly listed companies.
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