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Tuesday, August 20th, 2019
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The loss-making carrier Norwegian Air has agreed to sell its 17.5% stake in Norwegian Finans Holding (NOFI) for 2.2 billion kroner, a move which saw its share price jump 5.8%. The stake is being sold to Cidron Xingu Limited, which is indirectly controlled by Nordic Capital Fund IX and Sampo, a leading Finnish financial services group. The deal includes Bank Norwegian, a credit card company set up and owned by Norwegian Air. The Scandinavian carrier has struggled to turn a profit for some time owing predominantly to overcapacity and also the grounding of its 18 Boeing 737 MAX jets. The sale will see its cash holdings increase to 934 million kroner and provide an accounting gain of 196 million kroner.
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"The sale of the NOFI shares is part of Norwegian's strategy to strengthen our core airline operations and focus on the transition from growth to profitability," Norwegian Air's acting Chief Executive Geir Karlsen said in a statement. Though the sale may help the airline refinance a €250 million (US$305.25) bond maturing in December, it is possible Norwegian Air may need to raise more cash from shareholders at a later date. Market analysts Bernstein commented in a research note that: "Without an ongoing sustained improvement in the unit revenue position or unit cost position of the business, we struggle to see how the company can get through the next nine months without needing to return to capital markets for additional equity.” (US$1.00 =8.97 kroner (NOK).)
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Embraer will invest US$ 30 million in the expansion of its Eugênio de Melo unit, in São José dos Campos (São Paulo, Brazil). Through the construction of new facilities, the site will have capacity for over 4,000 employees. The site currently has 1,500 employees working in manufacturing, development, engineering, structural and system testing, and training, among other administrative and research activities.
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At least 600 temporary job opportunities were created for the construction of four new buildings. The buildings will be dedicated to the company's global engineering and technology center, to customer service and training―housing flight simulators and other technologies to provide technical
instruction to the company's aircraft operators, to administrative areas and to the company’s historical center―dedicated to Embraer's 50-year history and the advancements the company has created for the national aviation industry.
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Embraer is also making improvements, as well as expanding the current facilities, such as the restaurant, concierge, bus platforms and parking. The improvements are expected to be completed in the last quarter of this year and will increase the facility from 754,000 ft² (70,000 m²) to 1.2 million ft² (110,000 m²). The unit is located on a 121 acre (530,000 m² ) site and began operations in 2001.
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thyssenkrupp Materials Services, the distribution and service provider of the thyssenkrupp Group, is investing around €70 million in the modernization and expansion of its European warehousing and logistics network. A state-of-the-art logistics center and new warehouses are to be built in Germany, Poland and Hungary.
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The investments are an important part of thyssenkrupp Materials Services’ strategy. Under its “Materials as a Service” approach, the western world’s biggest materials distributor is focusing on expanding its portfolio of services supplementing its core business.
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A state-of-the-art logistics center with around 36,000 m² of storage space is to be built in Rotenburg/Wümme (Lower Saxony). The company is investing around €60 million in the site, which will store up to 20,000 tons of materials to guarantee maximum material availability. The groundbreaking is planned for the end of the year. Serving customers in the north of Germany, the new logistics and processing center is scheduled to go into operation in 2021.
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thyssenkrupp Materials Services is investing a total of €11 million in the expansion of its sites in Nowe Marzy, Poland and the Hungarian capital Budapest. Two new modern warehouses are to start operation at the end of September. With around 13,500 m² of storage space, the new warehouse in Nowe Marzy is an addition to the hub in north Poland, which was built in 2017. The new facility in Budapest will cover a space of around 6,500 m² .
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AAF Spares, the joint venture business between Avtrade and AFI/KLM E&M, have relocated to a new building. Moving from a 15,000 ft² building to a new state-of-the-art 50,000 ft ² warehousing facility will provide access to an inventory valued at US$760 million and will further improve and expand support to the North and South American markets.
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The new facility in Doral, only eight miles from Miami International, will allow a significant increase of inventory to be stocked locally. This will optimise the speed of delivery for AOG and urgent requirements, and lead to significant cost reductions for customers.
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With two strong parent companies already well established in the spares trading and MRO markets, AAF Spares will continue to strengthen and grow, acquiring more aircraft for teardown and increasing stock to better suit the demands of the world’s airlines. The increase of locally held components across a wide range of aircraft types, including Boeing, Airbus and Embraer, will assist in all aspects of the customer supply chain and will complement services such as repair management, logistic solutions, customer surplus management and other new support initiatives currently in development.
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NR Investments, a Guernsey, Channel Islands property investment vehicle formed in 2007, has agreed to acquire 95% of the concession company of Chisinau International Airport, the largest and sole international airport in Moldova. The agreement was ratified between representatives of Avia Invest (Avia Invest) and NR Investments’ sole beneficiary, Nat Rothschild, on August, 19.
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The operations and management of Chisinau International Airport transferred to a concessionaire - Avia Invest - in November, 2013, under a private-public partnership model, whereupon a three-stage investment programme was determined over six years. During that time Avia Invest has overseen a full modernisation of the airport, including a smart new passenger terminal, runway and apron modernisation, multi-level car park and other enhancements to airport infrastructure.
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Avia Invest has also successfully marketed the airport, which sits at the crossroads of the passenger flows between Asia and Europe, attracting new full service and low-cost carriers. Sixteen airlines currently include the airport in their networks, serving 38-strong destinations, including
London, Dublin, Paris, Istanbul and Moscow.
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Chisinau International Airport handled 2.8 million passengers in 2018, a 14.8% cumulative annual increase since 2010. In 2019 it is expected to surpass three million passengers.
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Aircraft and asset specialist Vallair, has signed an LOI to lease the first A321P2F (Passenger to Freighter) aircraft conversion to Qantas. This A321P2F MSN835 is intended to be operated by Qantas Freight on behalf of its customer - Australia Post.
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Qantas will be the first airline to operate the A321 as a freighter aircraft. To service the recently announced strategic alliance between Qantas and Australia Post the A321P2F will add nearly 50% more capacity - or an additional nine tonnes - compared to the existing fleet. The first A321P2F leased from Vallair is due to be delivered in 2020.
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Brazilian airline Ocean Air Linhas Aéreas S/A, headquartered in São Paulo and formerly doing business as Avianca Brasil, will formally leave Star Alliance with effect from September 1, 2019.
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Ocean Air’s withdrawal follows several months of bankruptcy protection and the withdrawal of its Air Operator Certificate (AOC) by Brazilian regulator ANAC.
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The Star Alliance network maintains a significant and long-time presence in the Brazilian market continuously since its founding in 1997. As of September 1, 2019, the Alliance will number 27 member airlines.
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Frankfurt Airport (FRA) welcomed more than 6.9 million passengers in the reporting month, up 0.8% compared to July last year. For the first seven months of the year, passenger traffic at FRA rose by 2.6%. Aircraft movements in July 2019 climbed by 1.0% to 47,125 takeoffs and landings, while accumulated maximum takeoff weights (MTOWs) expanded by 2.4% to over 2.9 million metric tons. FRA’s cargo throughput (airfreight + airmail) also grew by 1.5% to 178,652 metric tons.
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Across the Group, airports in Fraport’s international portfolio reported differing development in passenger traffic. Slovenia’s Ljubljana Airport (LJU) achieved a 4.2% jump in traffic to 207,292 passengers. Fraport’s two Brazilian airports in Fortaleza (FOR) and Porto Alegre (POA) together received about 1.3 million passengers – a decline of 9.9% year-on-year. This decline, among other things, can be attributed to the bankruptcy of Avianca Brasil – whereby other carriers temporarily were unable to fully absorb the traffic volume.
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With nearly 2.1 million passengers, Peru’s Lima Airport (LIM) recorded a further 4.9% rise in traffic. The 14 Greek airports together welcomed some 5.3 million passengers in July 2019, decreasing 0.8% year-on-year. This light downturn resulted from the consolidation of flight offers by some airlines serving the Greek market.
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On the Bulgarian Black Sea coast, the Twin Star airports of Varna (VAR) and Burgas (BOJ) together served about 1.2 million passengers. The resulting 13.2% drop in passengers is a continuation of the consolidation trend seen in previous months, following the rapid passenger growth in figures at the Twin Star airports in recent years. In contrast, Antalya Airport (AYT) on the Turkish Riviera reported almost 5.4 million passengers, again recording strong growth of 11.7% in July 2019. Registering some 2.2 million passengers, Russia’s St. Petersburg Airport (LED) also achieved growth of 4.9%. Traffic at China’s Xian Airport (XIY) almost reached 4.3 million passengers, a 7.4% gain compared to the same month last year.
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Honeywell has opened its first aviation service center in Latin America in São José dos Campos, a city located 94 km from the state capital. On site, the company will offer services such as aircraft parts replacement, repair and overhaul.
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São José dos Campos was chosen for its history in the aviation market and the proximity of Embraer and the city of São Paulo, besides other urban centers in the southeast region where the main airlines in the country are located. The Service and Maintenance Center is in a 500 m² area in the Technological Park of São José dos Campos.
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Aerospace is one of Honeywell’s four business units and has been responsible for aviation innovations such as the first autopilot flight control and the first commercial weather radar system. In total, the company’s portfolio has 84 product lines that focus on creating more economical, practical and environmentally friendly airplanes.
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Embraer has unveiled images of the demonstrator aircraft with 100% electric propulsion technology, which is currently under development. The prototype has a special paint scheme and is ready to receive systems and components.
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The aircraft's electric motor and controller are being manufactured by WEG at the company's headquarters in Jaraguá do Sul, Santa Catarina, Brazil, as part of the scientific and technological cooperation agreement for jointly development of electrification technologies.
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Advances on the project include the partnership with Parker Aerospace that will be responsible to
supply the cooling system for the demonstrator aircraft.
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On the forthcoming months, the companies' technical teams will continue to test the systems in the labs preparing the integration in the demonstrator aircraft for testing under real operating conditions. The first flight of the prototype is scheduled for 2020.
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BOC Aviation has released its unaudited results for the six months ended June 30, 2019. The company has achieved a major milestone in June 2019 as its cumulative net profit after tax (NPAT) exceeded US$4 billion since inception. BOC Aviation reported NPAT of US$321 million in the first half of 2019, an increase of 8% compared with the same period last year.
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Revenue rose 13% to US$930 million from US$825 million, and its fleet net book value grew 6% to US$15.9 billion from December 31, 2018, as the company continued to take delivery of modern, fuel efficient aircraft. The 8% rise in the interim dividend declared underpins its continued focus on delivering good long-term returns for its shareholders.
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