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LATEST NEWS
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Monday, June 3rd, 2019
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A combination of an escalating trade war and increased oil prices saw global airlines cut profit forecasts by 21% as the threat of an industry slowdown looms. According to the International Air Transport Association (IATA), which represents 80% of the world’s air traffic through approximately 290 carriers, December’s forecast of US$35.5 billion has been slashed to a profit of US$28 billion for 2019. At IATA’s general meeting in Seoul. IATA Director general Alexandre de Juniac commented that “Airlines will still turn a profit this year, but there is no easy money to be made,” adding that: “Creeping protectionist or isolationist political agendas are on the rise.”
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This was witnessed last Friday, May 31, when stock markets tumbled in the wake of President Trumps shock announcement of tariffs on Mexican goods, a move that some fear will see further escalating trade tensions push the U.S. and other major economies into recession. IATA has voiced its concern regarding trade tensions, noting that several Asian carriers have either grounded or delayed taking delivery of air freighters, a move that could overflow into the commercial jet market. According to Reuters, Passenger capacity growth, which reached 6.9 percent in 2019, is forecast to slow to 4.7 percent this year, with average fares flat following a 2.1 percent decline in 2018
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Many airlines have recently managed to cover the cost of their capital through squeezing their expenses and restructuring. However, analysts are concerned that aviation is reaching the end of an extended business cycle. One leading consultant, Peter Harbison, has warned airline CEOs that with such heavy reliance on North America for half of global profits, the current industry’s good fortunes should be seen as a “temporary aberration.”
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Lufthansa Group Chief Executive Officer, Carsten Spohr, has assumed his duties as Chairman of the IATA Board of Governors (BoG) for a one-year term effective from the conclusion of the 75th IATA Annual General Meeting in Seoul, Republic of Korea. Spohr is the 78th chair of the IATA BoG. He has served on the BoG since May 2014.
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Spohr succeeds Qatar Airways Group Chief Executive His Excellency Akbar Al Baker, who will continue to serve on the BoG.
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The change of name of CSALP to Airbus Canada Limited Partnership, which was announced in March 2019, came into effect on June 1.
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The new name reflects the majority interest of Airbus in the partnership since July 1, 2018. The partnership is adopting the Airbus logo as its single visual identity.
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Over the course of the coming weeks, the new name will be applied to the limited partnership’s documentation, materials and branded items. The Airbus and Bombardier logos will continue to be displayed side-by-side on the building exteriors in Mirabel, reflecting production activities on the site for both the Airbus A220 and Bombardier CRJ aircraft families.
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Headquartered in Mirabel, Québec, the limited partnership is responsible for the development and manufacturing of the Airbus A220 Family of single-aisle passenger aircraft. Majority owned by Airbus SE, partners include Bombardier Inc. and Investissement Québec (acting as mandatory for the government of Québec). The limited partnership employs approximately 2,200 at its headquarters and manufacturing facilities in Mirabel. The second A220 manufacturing facility in Mobile, Alabama will start production in the third quarter of 2019.
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With the departure of flight WS6 tonight, WestJet becomes the only airline operating a non-stop route between Calgary and Dublin. The airline's newest route provides historic access between Western Canada and Ireland and is the last of three 787 Dreamliner inaugurals that are central to WestJet's global strategy and focus on Calgary as its initial Dreamliner hub.
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WestJet's newest Dreamliner route adds to its existing 787-9 flights between Calgary, Paris and London (Gatwick), supporting tourism and trade between Europe and Canada. In addition, WestJet's Calgary-Dublin service complements its existing seasonal Halifax-Dublin route. WestJet has been operating flights to Dublin from Eastern Canada since 2014.
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Geven has been approved as "Boeing Offerable Seat Supplier", for line-fit installation of Economic Class seats on the 787 Dreamliner.
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This milestone is the result of a long Boeing evaluation and qualification process, involving all Geven departments, especially focused on engineering and manufacturing capabilities.
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During the past decade, Geven has reached and maintained high levels of performance, with outstanding on-time deliveries and after sales support.
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Stratos, the global aircraft investment specialist, has closed the inaugural ABS featuring securitised debt, with equity sourced from the Japanese Operating Lease (“JOL”) market. The transaction was arranged on behalf of JP Lease (Japan), the leading JOL arranger. JP Lease sponsored the deal and underwrote the equity to sell to its diversified pool of Japanese corporate clients.
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The fifteen securitized aircraft were acquired with leases attached (to Air Canada, Scoot, Qatar, FlyDubai, Gulfair, Air Asia, Malindo, Philippine Airlines, TACA, Brussels Airlines and Batik) from two separate sellers (GECAS and Standard Chartered). Stratos arranged the acquisition and novation of the aircraft, the debt bridge funding, warehouse loan, ABS issuance and will service the portfolio through to lease maturity. Stratos’ portfolio under management has doubled following the acquisition of the portfolio and further develops its position as one of the fastest growing independent aircraft servicers.
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The securitisation, led by Goldman Sachs and Deutsche Bank, featured A and B notes totalling US$530m distributed to over twenty investors - mainly US insurers and fund managers. US$20m of C notes were retained by Stratos and JP Lease. Both S&P and Kroll rated the A and B notes A and BBB respectively.
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The recent groundbreaking at Jet Aviation’s FBO in West Palm Beach, Florida, for new hangar and office space is just the latest step in the company’s efforts to expand and improve its global FBO network, now at 35 locations. The company is investing heavily to ensure its facilities are designed and equipped to meet all the business-aviation needs of its global customer base.
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Jet Aviation’s FBO business in EMEA and APAC saw significant growth in 2018. First the company acquired the Hawker Pacific chain of FBOs throughout Australia and Asia in May. Then in September it established ground-handling services at Prince Abdul Mohsin Bin Abdulaziz Regional Airport in Yanbu, the Kingdom of Saudi Arabia, followed by the acquisition of the KLM Jet Center businesses in Amsterdam and Rotterdam in October.
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This year, Jet Aviation continues to expand its locations and services. The company plans to provide FBO services from a newly refurbished 600 m² state-of-the art, double-story facility at Riyadh’s King Khalid International Airport (KKIA) by the end of 2019, its 40th Anniversary year in Saudi Arabia.
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In the U.S. and Caribbean, construction or renovation is under way – or soon will be – at seven of Jet Aviation’s 12 regional locations. This includes its newest in Scottsdale, Arizona, where Jet Aviation recently announced it has acquired a stake in the Scottsdale Jet Center. It also includes the entirely new FBO and hangar complex nearing completion at Van Nuys, California and hangar expansions in Teterboro, New Jersey, San Juan, Puerto Rico and West Palm Beach, Florida. Finally, significant renovations will soon be underway at the FBOs in Teterboro, New Jersey and Dallas, Texas and a storm-damaged hangar will be replaced in Houston, Texas.
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Rob Soen has been appointed as Non-Executive Director to the Nasmyth Group Board effective
from 1 June 2019.
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Soen's role will be to continue his support as advisor to the Board providing a strategic view and guidance to ensure compliance as part of the ongoing expansion of the Nasmyth Group.
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He has a wealth of experience having spent 23 years in Automotive and 16 years in Aerospace working amongst others Dunlop, Tennaco Europe, Unipart and Thyssen Krupp – and more recently he retired from GKN as Senior Vice President Supply Chain.
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Star Alliance has announced plans for THAI Smile Airways to become the next Connecting Partner in its global network.
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The Chief Executive Board of Star Alliance, meeting on the sides of the 75th IATA Annual General Meeting in Seoul, approved the application of THAI Smile Airways to become a part the Alliance’s Connecting Partner model.
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The Connecting Partner model was established by Star Alliance in June 2016 to complement its membership model.
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In contrast to full membership in the Alliance, requiring building of commercial ties with all full members, the more regional Connecting Partner scope calls for commercial relationships with a minimum of three carriers only.
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Customers travelling on an itinerary which includes a transfer between a Star Alliance member airline and a Connecting Partner will be offered standard Alliance benefits such as passenger and baggage through check-in. In addition, customers who have achieved Star Alliance Gold Status in
their frequent flyer programme will enjoy premium customer benefits.
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Once all entry requirements are fulfilled, which is expected by the end of the year, THAI Smile Airways will become the second Connecting Partner, joining Juneyao Airlines that entered in 2017.
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Connecting Partners allow Star Alliance to close network gaps that may exist of a regional basis. THAI Smile Airways will add 11 new destinations to the Star Alliance network, which already comprises over 1,300 airports in 194 countries.
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SmartSky Networks announces that it has initiated the final site completion phase of its next generation Air-to-Ground (ATG) network for business and commercial aviation, launching later in 2019.
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SmartSky’s airborne network, which began its nationwide deployment a few years ago, incorporates many 5G wireless technologies that have been experienced during a large number of highly successful inflight demonstrations for the media and market. The company’s unique technology has received the critical threshold regulatory certifications from the Federal Aviation Administration and the Federal Communications Commission.
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SmartSky’s track record of innovation speaks for itself. “We are able to provide customers an experience inflight comparable to their in-home experience. We have 128 patents granted and another 90 pending to protect the many innovations required to make a next generation network live up to customer expectations,” said SmartSky Chairman and CEO Haynes Griffin. “Further, SmartSky agrees with the market that cybersecurity is critical to business, and therefore we won’t put our customers’ data at risk. by relying on Chinese companies such as ZTE.” ZTE has been under significant scrutiny by the U.S. government.
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