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Tuesday, May 8th, 2018
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LATEST NEWS
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The Supervisory Board of Deutsche Lufthansa AG has approved the order of up to 16 additional aircraft in a meeting on May 7. The list price of the aircraft is approximately €2.1bn. Delivery is scheduled to take place in stages until 2022. The investment plan for the 2018 fiscal year remains unchanged.
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The order includes two Boeing 777-300ER long-haul aircraft for SWISS, which are expected to supplement the existing SWISS fleet beginning in early 2020 and will be used to expand the route network. An additional two Boeing 777F will be ordered for Lufthansa Cargo. The modern freight aircraft will replace MD11 cargo planes in the future. This will decrease fuel consumption, noise emissions and unit costs at the same time. The investment in fleet expansion at SWISS and a more modern cargo fleet reflect the economic success of the two companies. In the first quarter, traditionally a weak quarter for airlines, SWISS had a profit margin of over nine percent; Lufthansa Cargo’s was over ten percent. The order for the new long-haul aircraft highlights the strategy of Lufthansa Group to predominantly allocate the growth within its multi-hub system where cost and quality offer the best conditions for profitable investments.
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The Supervisory Board has also approved the order of up to twelve short- and medium-haul A320-type aircraft. This includes six delivery options for aircraft of the Airbus A320neo (new engine option) type in 2022 that were converted to fixed orders. When they are delivered, they will replace older aircraft in the flight operations of the Lufthansa Group. Depending on availability, up to six additional A320ceo (current engine option) will be ordered. The plan is to deploy them at Lufthansa this year already, in order to offset delivery delays for Airbus A320neo aircraft.
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United Airlines will increase service between Houston's George Bush Intercontinental Airport and Havana's José Martí International Airport beginning July 20. Subject to government approval, United will operate the new daily service with either Boeing 737-800 mainline aircraft or Embraer E175 regional aircraft operated by Mesa Airlines as United Express.
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"This expansion to Havana will provide significant public benefits to our city, region and state. As a diverse global city – in which many people speak Spanish – we are heavily reliant on international travel for our economic success," said Houston Mayor Sylvester Turner. "Worldwide access to Houston by air helps bring financial health back to Houston after Hurricane Harvey. The addition of Havana to Houstonians' travel options will also help us build cultural bridges with our neighbor nation across the gulf."
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Alaska Air Group's board of directors named Max Tidwell Vice President of Safety and Security for Alaska Air Group and Alaska Airlines. Tidwell will oversee all safety functions, develop and execute long-term safety and security strategies and continue to advance Alaska Airlines' world class safety culture.
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Tidwell was most recently the FAA division manager for Air Carrier Safety Assurance, with offices in Atlanta and Miami. He has held multiple roles at the FAA over his 22-year career, including as manager for Seattle, where he worked with Alaska Airlines.
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Under the EU Merger Regulation, the European Commission has approved the acquisition of Rockwell Collins by United Technologies Corporation (UTC) subject to UTC’s divestment of businesses in actuators, pilot controls, ice protection and oxygen systems. The Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the European Economic Area (EEA). The decision is conditional upon full compliance with the commitments.
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“When we take a trip on a plane, we usually don't think about all the different components that go into building the aircraft. UTC and Rockwell Collins are two of the biggest suppliers of these components to aircraft makers worldwide. We need to ensure that competition is preserved for all of them. We can allow this merger to go ahead because in all the markets where we raised concerns, UTC has committed to divest activities covering the entire overlap between the two companies," said Commissioner Margrethe Vestager, who is in charge of competition policy.
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Both UTC and Rockwell Collins supply aerospace systems and equipment to aircraft producers such as Airbus and Boeing, manufacturing a wide range of products, with largely complementary portfolios. While UTC focuses more on products such as power generation, propulsion systems and landing systems, Rockwell Collins tends to focus more on avionics and different cabin interior products.
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UTC, based in the US, provides high-technology products and services for the building systems and aerospace industries worldwide. The UTC group comprises the following business units: (i) Otis Elevator Company, (ii) UTC Climate, Controls & Security, (iii) Pratt & Whitney, and (iv) UTC Aerospace Systems.
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RBR Maintenance, a Part 145 Repair Station based at Dallas Love Field, will relocate its Challenger maintenance program to nearby Dallas Executive Airport (KRBD) to better accommodate rapid growth the program has been experiencing. The additional location will occupy an 18,000 ft² maintenance hangar (150 ft x 120 ft), alongside Ambassador Jet Center complete with pilot's lounge, large conference facilities and a staffed reception area.
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RBR's Challenger program, led by Program Manager Paul Castleberry, includes FAA-certified and trained teams dedicated to both scheduled and unscheduled maintenance events, engine, APU and general airframe maintenance support on Challenger 601, 604 and 605 aircraft. Inspection capabilities include 12, 24, 36, 48, 96, & 144-month inspections as well as 600, 1,200, 2,400 and 3,000-hour inspections. Additionally, the location will have avionics service and installation capabilities onsite.
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Norwegian has reported that total traffic increased by 44% in April 2017, while the capacity increased by 51%. The load factor was 83%, down 3.6 points compared to the same period in 2018. The high capacity growth is primarily due to the company’s long-haul routes, which has more than doubled since April last year.
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FL Technics, a global provider of integrated aircraft maintenance, repair and overhaul services, has completed a CAMO audit and OASES integration project for Spanish long-haul carrier Plus Ultra Líneas Aéreas. The airline entrusted FL Technics with Airbus A340 fleet’s airworthiness data check, smooth CAMO software integration and training of its engineering team.
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Plus Ultra Líneas Aéreas decided to integrate the continuing airworthiness management system OASES for three long-range, wide-body Airbus A340. The aim of innovating the carrier’s CAMO processes was to centralize all data in one, cloud-based place, improve maintenance planning and optimize both time and financial costs related to scheduled and un-scheduled MRO works.
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Following the audit and update of the airline’s CAMO documentation, as well as its integration into OASES, FL Technics engineers have conducted a specialized training for their colleagues at Plus Ultra Líneas Aéreas. The training has enabled the carrier’s team to update and otherwise interact with OASES software on a daily basis.
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Aircastle has reported that net income for the quarter was US$57.5m, an increase of US$15.1m, or 36%, versus the prior year. Lower total revenues of US$2.4m were offset by interest expense of US$6.0m, lower depreciation of US$4.2m and a mark to market benefit from interest rate hedging of US$3.2m.
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Total revenues were US$202.7m, a decrease of US$2.4m or 1.1%, from the previous year. The decrease was driven by a US$7.7m decline in lease rental and finance and sales-type lease revenues, partially offset by a $5.0 million increase in the gain on the sale of flight equipment. Rental revenues were lower primarily due to the impact of wide-body lease transitions and extensions which occurred during the fourth quarter of 2017 at lower lease rates.
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Adjusted EBITDA for the first quarter was US$191.1m, a decrease of US$2.2m, or 1.2%, from the first quarter of 2017, due primarily to lower rental revenues, partially offset by higher gains from aircraft sales. We sold four aircraft for a gain on sale of $5.8 million during the first quarter of 2018 versus one aircraft sale that was closed during the first quarter of 2017.
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During the first quarter 2018, Aircastle acquired four aircraft for US$111m and had commitments to acquire twelve additional aircraft in 2018 for more than US$490m. These sixteen aircraft have a weighted average age of 4.7 years and a weighted average remaining lease term of 5.6 years. All of the aircraft that the company has acquired or has committed to acquire this year are narrow-body aircraft.
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As of March 31, 2018, Aircastle owned 222 aircraft having a net book value of US$6.7bn. The company also manage twelve aircraft with a net book value of US$634m on behalf of its joint ventures.
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Safran has reported adjusted revenue in the first-quarter of 2018 was €4,222m, an increase of 12.0% on a reported basis. At constant scope (excluding the contribution from Zodiac Aerospace), adjusted revenue grew 2.3%, including €-295m negative currency impact.
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Adjusted revenue increased 10.2% organically, thanks to positive momentum in Propulsion, Aircraft Equipment and Defense.
Civil aftermarket grew 16.4% in USD terms, driven by spare parts sales. Considering the strong seasonal increase in revenue recognition for service contracts, Safran confirms its annual assumption for civil aftermarket activities to grow in the high single digits in 2018.
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Production and backlog of narrowbody aircraft engines
Combined shipments of CFM engines (LEAP and CFM56) continued to increase in Q1 2018: 498 units were delivered compared with 426 in the year-ago period.
Customer's demand remains strong: 827 LEAP orders and commitments were taken in Q1 2018. The LEAP backlog amounted to 14,278 engines.
The combined backlog for the two engine programmes (CFM56 and LEAP) amounted to 15,090 engines at March 31, 2018.
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UPCOMING EVENTS
June 5, 2018 – Jury’s Inn Hotel, Prague
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