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LATEST NEWS
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Wednesday, September 14th, 2022
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The Lufthansa Group (Lufthansa) has signed a Memorandum of Understanding (MoU) with Österreichische Mineralölverwaltung Aktiengesellschaft (OMV), the global chemicals and energy group, for the supply of in excess of 800,000 litres of sustainable aviation fuel (SAF) over a seven-year period between 2023 and 2030.
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The already existing partnership between the two companies will now be further enhanced through the addition of new locations for the production and off-take of SAF as well as the addition of new technologies.
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As of March 2022, OMV has been supplying SAF to Lufthansa’s Austrian Airlines at Vienna International Airport. Currently Lufthansa is the largest user of SAF in Europe and the company sees SAF as critical to the carbon-neutral future of the aviation industry as a whole.
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SAF is aviation fuel that is produced without the use of fossil energy sources, such as crude oil or natural gas. Various production processes exist, and different feedstock are available as energy sources. The current generation of SAF, which saves 80% CO2 compared to conventional kerosene, is mainly produced from biogenic residues, for example from used cooking oils. To meet the Green Deal climate goals, the European Commission's current plan includes the use of at least 63% SAF out of the aviation fuel demand by 2050 for EU air transport. Sustainable fuels will play a major role in decarbonizing this sector.
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OMV is an Austrian multinational integrated oil, gas and petrochemical company which has a subsidiary, OMV Petrom S.A. in Romania. The subsidiary announced in June this year that it would begin to produce SAF at its Petrobrazi refinery by co-processing locally produced rapeseed oil. OMV Petrom has been certified as an HVO producer based on the CERTROM audit, and the company aims to increase the production capacities in the future, in order to produce advanced sustainable fuels based on various waste feedstocks (e.g., used cooking oil).
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Safran Helicopter Engines has signed an agreement with Airbus Helicopters to continue supporting Arriel engines powering the U.S. Army UH-72 Lakota helicopter fleet. This contract formalizes a Maintenance, Repair and Overhaul (MRO) and service agreement supporting over 900 Arriel 1E2 and Arriel 2E engines, operated by the U.S. Army on its UH-72As and UH-72Bs.
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This contract will be managed by Safran Helicopter Engines USA, from its Grand Prairie, TX facility and its office located in Daleville, AL supporting the training fleet located at Fort Rucker, AL.
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Safran Helicopter Engines assembles, tests and supports several Arriel engine variants in Grand Prairie, including the Arriel 1E2s and the Arriel 2Es. The Arriel engine has a solid reputation of reliability and footprint in the U.S., with more than 3,000 engines in service. The U.S. Army Arriel fleet has flown in excess of 2.5 million engine flight hours.
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Parker-Hannifin Corporation, a global leader in motion and control technologies, has completed its acquisition of Meggitt PLC for approximately £6.3 billion. Meggitt, headquartered in Coventry, UK, had annual revenue of approximately £1.63 billion for the 12-months ending June 30, 2022 and employs more than 9,000 team members serving customers around the world. Meggitt has diverse aerospace and defence exposure with technology and products on almost every major aircraft platform.
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The transaction is expected to drive significant value creation for shareholders through increased organic growth, stronger cash flow and add to Parker’s earnings per share, excluding one-time costs and deal related amortisation. Meggitt will add complementary technologies, increase Parker Aerospace’s aftermarket mix through recurring revenue and enhance growth opportunities through commercial aerospace recovery, anticipated global aircraft fleet renewal, and in emerging trends such as electrification and low-carbon technologies.
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Vallair, the mature asset specialist, has purchased an Airbus A321 (MSN 1008) for imminent part-out. The 1999 vintage aircraft was previously operated by AtlasGlobal and managed by TrueAero.
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The airframe will be fully disassembled at Vallair’s facility in Montpellier, under the supervision of Armando Filho, Director of Material Management.
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“Part of the Group’s strategy is to build and sustain a good-quality spares hub in France. We are fully committed to supporting this aircraft type for airlines, lessors and asset managers,” he said. Intelligent repair management with an integrated supply chain and global network of audited MRO facilities ensures that Vallair provides a streamlined service to support the market needs. Filho explained that parts will be removed from the A321 aircraft, processed and made available for sale in Q4 2022.
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Vallair’s Material Management team works in close partnership with the teardown function and manages the
processing of hundreds of aircraft parts every month alongside Vallair’s in-house aero structures repair shop
based in the Châteauroux facility.
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AJW Group, an independent aircraft component parts, repair, and supply chain solutions provider, has appointed Tathiana Victoria Rice as Senior Sales Director for North America. Rice’s responsibilities will encompass sales team leadership, accelerating AJW’s revenue through expanding AJW’s presence in the region and contributing to the company’s marketing and business strategies.
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Rice brings over 15 years of sales and client relationship experience in aviation to AJW. Prior to joining AJW, she gained expertise in the Used Serviceable Material (USM) sales, procurement and supply chain environment in the North American region and globally at Airbus / Satair, GA Telesis and Regional Airline Support Group.
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She has a Bachelor of Science degree in Electronical Engineering & Computer Science from FAU (Florida Atlantic University).
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The North American aviation market is recovering strongly following the COVID-19 pandemic according to insights revealed by IBA, a leading aviation market intelligence and consultancy company.
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In a webinar entitled “What does the future hold for aviation in the Americas?”, a panel of IBA experts detailed a range of key metrics that demonstrate the improving health of the North American aviation market. These include returning airline profitability, lower levels of aircraft storage, increasing utilisation, strong aircraft orders, and growing values.
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They also cautioned about a number of economic headwinds, including increases in labour costs and fuel prices, and labour shortages, coupled with higher levels of debt which grew during the pandemic.
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Looking first at fares and yields being achieved by North American carriers, data presented from IBA Insight, their intelligence platform, showed a strong rebound, especially in the ultra-low-cost carrier segment, with a revenue positive trend across the North American airline sector as a whole. However, fuel costs are starting to impact airline bottom lines and, as consumer spending comes under pressure from economic headwinds, IBA forecasts an increasing level of fare discounting by airlines, triggering the post-pandemic return of a more traditional market cycle.
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North America is leading the globe in airline profitability and is the only region expected to return to profitability in 2022, with a predicated average net profit margin of 3%. Government support and the elasticity of the North American airline sector – which enabled it to dial up domestic capacity when international travel restrictions were in place – played a crucial role in restoring the North American market back to profitability despite increasing costs.
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Fleet storage levels for North American carriers have fallen back to levels rapidly approaching those prior to the pandemic. From a level of 16% prior to Covid-19, aircraft storage rocketed to over 60% during the pandemic, but is now down to 22% - representing around 3,000 aircraft.
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The number of flights operated by North American carriers has rebounded strongly, with the buoyant US domestic market aiding the airline sector’s strong recovery. Domestic flight traffic was back at around 90% of pre-pandemic levels by the start of 2022, but the lagging international market has been catching up as restrictions have been lifted and now represents almost 15% of all North American flights – up from less than 10% a year ago.
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In parallel, North American airline capacity has recovered strongly, with the ultra-low-cost carrier segment ahead of others and now at 113% of pre-pandemic levels. The network and value carrier segments are currently at 94%.
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At over 10,000 aircraft, the North American fleet is the largest in the world, but has one of the highest average aircraft ages at around 16 years – driven by the large number of mid-life narrow-bodies in service, with the Boeing 737-800 and A320ceo alone accounting for around 15% of the fleet.
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North American carriers are leading the way globally in re-fleeting post pandemic, with over 1,100 aircraft orders in 2021 and thus far in 2022. North America now has the second highest share of order book in the globe, accounting for 25% of all commitments, behind only Asia Pacific at 35%. The North American airline sector’s total backlog of around 2,600 aircraft is dominated by the A320 neo and Boeing 737 MAX families which collectively account for approximately 1,900 aircraft.
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From an emissions perspective, North America remains the world’s most carbon intensive region, but the average CO2 emissions per-seat per-mile of the region’s carriers have fallen 5% since 2018 as they have stored and retired older, less efficient aircraft. IBA forecasts that rising fuel costs and the journey towards net zero will continue to accelerate the current fleet renewal being undertaken by North American airlines.
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While aircraft leasing is less prominent in North America, investor demand for aircraft based in the region is stronger than prior to Covid-19. Around 35% of the North American fleet is leased, compared to 56% in Europe and 69% in Latin America. However, North American based aircraft accounted for 27% of all leasing transactions in the 2022 year to date, compared to under 18% in 2017.
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Etihad Cargo, the cargo and logistics arm of Etihad Aviation Group, will reinforce its commitment to the China market with the introduction of an additional 30 tonnes of belly capacity via two new weekly direct passenger flights to Guangzhou from October 10, subject to regulatory approvals.
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With this latest addition to the carrier's network, Etihad will become the first international airline to operate long-haul passenger and cargo services to the top three Chinese gateways since the start of the pandemic.
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In July, the carrier announced the introduction of direct passenger flights to Beijing, bringing the total number of direct passenger and freighter flights for China to 15. With the introduction of an additional two direct passenger services per week to Guangzhou using a two-class Boeing 777, Etihad Cargo will offer 1,520 tonnes of total cargo capacity into and out of China per week.
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In addition to offering cargo capacity on passenger flights, Etihad Cargo also operates six Boeing 777-200 freighter flights for Shanghai and five dedicated freighter services for Hong Kong per week.
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Rex, Australia’s independent regional and domestic airline, has signed new industrial agreements with two key sections of the airline’s workforce. The new Enterprise Agreements (EAs) were overwhelmingly endorsed by both the airline’s domestic flight attendants and Regional Express aircraft engineers.
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In separate ballots held over the last two weeks, 75% of flight attendants and 92% of engineers voted in favour of the new enterprise agreements. The enterprise agreements, which were finalised after 18-months of negotiations, will run for three and four years respectively and include pay rises for both groups.
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“The Board is delighted with the strong endorsement and support from the staff groups which is reflected in the way we are not experiencing the extreme chaos the other major carriers are facing,” Rex’s Executive Chairman, Lim Kim Hai, said. “We are at the final stages with other Enterprise Agreements, and we are planning to put these out to a vote soon.”
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