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LATEST NEWS
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Wednesday, August 5th, 2020
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A month after announcing that it had secured financing to ensure the airline’s continuation for the next 18 months, Britain’s Virgin Atlantic has filed for Chapter 15 bankruptcy protection in the U.S.
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The move is a strategic one employed by non-U.S. companies to restrict creditors from tying up assets or filing a lawsuit in the U.S. The move comes hot on the heels of Virgin Australia, another carrier in the Virgin Group, which went into administration in April with debts of US$6.8bn and over 12,000 creditors. In addition to filing for bankruptcy protection in the southern district of New York, the debt-ridden carrier also filed proceedings in a London court where Virgin Atlantic obtained approval on Tuesday to convene meetings of affected creditors to vote on a restructuring plan on August 25.
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The situation is not as bleak as may seem for Virgin Atlantic as it has successfully negotiated a deal with stakeholders “for a consensual recapitalization” that will get debt off its balance sheet and “immediately position it for sustainable long-term growth”.
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51%-owned by the Virgin Group and 49%-owned by Delta Air Lines, the British carrier has seen flight reservations drop 89% when compared to the same period last year, while second-half 2020 demand has dropped to 25% of 2019 levels. In July the carrier confirmed it had agreed a rescue deal with shareholders and creditors worth £1.2bn (US$1.57bn) to secure its future beyond the coronavirus crisis.
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The DC Aviation Group has completed the successful upgrade of a Global 5000 with the Gogo Elite Smart Cabin System (SCS Elite). The aircraft was also equipped with an Inmarsat SwiftBroadband High Data Rate Service and a new satellite communication system.
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With the upgrade of a Global 5000 with the Gogo Elite Smart Cabin System (SCS Elite), an Inmarsat SwiftBroadband High Data Rate Service and a new satellite communication system, the DC Aviation Group has been able to successfully complete a major maintenance contract on schedule.
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With the highly integrated intelligent cabin system, passengers can control the cabin environment with a single interface. The Inmarsat SwiftBroadband High Data Rate (HDR) system offers significantly improved data transmission rates. The satellite communication system could also be seamlessly adapted to today's standards.
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DC Aviation emerged in 2007 from the former DaimlerChrysler Aviation, a DaimlerChrysler AG subsidiary that was founded in 1998, with branches in Dubai, Malta, and additional locations in Moscow and Paris.
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The International Air Transport Association (IATA) announced that Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East (AME), will be appointed Senior Vice President for Customer, Financial and Digital Services (CFDS), based in Geneva and effective March 1, 2021. At that time Aleks Popovich, who currently holds the position, will retire.
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Albakri joined IATA in January 2017 after more than a decade in the leadership team of Saudi Arabian Airlines where he successfully fulfilled the roles of Chief Financial Officer, Chief Information Officer and Senior Vice President for Transformation. At IATA, Albakri has been an agent of change, transforming the Africa and Middle East regional team to better serve member needs and pioneering the work of IATA’s Digital Transformation Advisory Council.
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Sabre has renewed its long-term, worldwide distribution agreement with Air New Zealand.
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Under the renewed agreement, Sabre will continue to distribute global Air New Zealand content to hundreds of thousands of travel agents and thousands of corporations globally through its extensive travel marketplace. The agreement also includes an opt-in content program in New Zealand and Australia, which provides agencies with access to Air New Zealand’s preferential content through the Sabre marketplace.
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Sabre is mission-critical to the world’s travel ecosystem, playing a key role in facilitating the marketing and sale of airfares and other types of travel to travel agents, corporations and online travel agencies across the world.
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The airport operator Fraport posted a sharp drop in revenue during the first half of 2020, with a clearly negative Group result. The operating performance, which already slowed down in the first quarter of the year, weakened further during the second quarter, in line with expectations. Frankfurt Airport’s passenger traffic plummeted by 94.4% year-on-year in the April-to-June 2020 period, while falling by a total of 63.8% during the entire first half. Also at Fraport’s Group airports worldwide, passenger traffic came to a virtual standstill in the second quarter.
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In the first half of 2020, Group revenue was down by 48.9% to €910.6 million year-on-year. Adjusting for revenue from construction relating to capacitive capital expenditure at Fraport’s subsidiaries worldwide (based on IFRIC 12), Group revenue decreased by 47.6% to €720.4 million. Group EBITDA declined by 95.6% to €22.6 million, while Group EBIT fell to minus €210.2 million (first half 2019: €279.1 million). With minus €308.9 million, the Group EBT also moved noticeably into negative territory (first half 2019: €214.8 million). The Group result (net profit) dropped to minus €231.4 million year-on-year (first half 2019: €164.9 million). With the exception of the Lima subsidiary, all of Fraport’s international airport subsidiaries also made negative contributions to the Group’s financial performance.
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Fraport responded to the COVID-19 crisis quickly by reducing costs and introducing short-time work. In the second quarter of 2020, more than 16,000 of the approximately 22,000 employees of the Fraport Group companies in Frankfurt were working short-time. On average, working hours were reduced by around 60% across the entire workforce.
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Dr. Stefan Schulte Fraport AG’s executive board chairman said: “We responded quickly and comprehensively to the crisis and were thus able to lower costs with immediate effect. But this will not be enough in the medium term. Even in 2022/2023, we still expect passenger volumes at Frankfurt Airport to be around 15 to 20% below the high of 2019. We must therefore streamline and downsize our company to make it even more efficient.”
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The plan is to shed around 3,000 to 4,000 of the approximately 22,000 jobs across Fraport’s Group companies in Frankfurt. In addition to natural job turnover and largely forgoing new hires, various socially responsible measures are currently being negotiated between management and employee representatives. The extent to which compulsory redundancies will be required will depend primarily on the implementation of these measures.
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Fraport raised about €1.3 billion in additional financing in the first half of the year. In July, the Group issued a corporate bond, further increasing liquidity by some €800 million. This means that the company currently has nearly €3 billion in cash and committed credit lines. As a result, liquidity is secured until at least the end of 2021.
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Embraer has announced a Medevac solution for Phenom 300 series aircraft, the Phenom 300MED, which is also available for retrofit through a partnership with umlaut and Aerolite. Embraer and umlaut are jointly developing and certifying a new supplemental type certificate (STC) utilizing Aerolite equipment.
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The Phenom 300MED, which is now available for customer configuration, is representative of Embraer’s modern and versatile product portfolio and the company’s intent to deliver the ultimate experience in business aviation, now including the Medevac segment. Designed as an ideal solution for both civil and government applications, the Medevac solution will be installed exclusively by Embraer's Services & Support organization, ensuring the highest quality, reliability, and service experience, direct from the manufacturer.
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Together, Embraer and umlaut are developing a comprehensive set of configuration alternatives for the Phenom 300MED, which will feature either one or two stretchers, as well as the ability to carry an incubator and additional medical equipment. The aircraft will also feature hospital-grade trim and finishing. As a purpose-built Medevac solution, created in collaboration with the leading companies in the industry, the Phenom 300MED is designed to be quickly and easily configured to meet the various needs of both healthcare providers and patients.
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