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Tuesday, February 5th, 2019
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Michael O’Leary, the abrasive CEO of Ryanair, Europe’s largest low-cost carrier, is to step down from the role of day-to-day running of the airline to take up a new role as CEO of a restructured Ryanair overseeing CEOs of the company’s four airlines – Ryanair DAC, Ryanair Sun, Ryanair UK and the newly acquired Laudamotion. O’Leary has been heavily blamed for much of Ryanair’s staffing discontent which led to a number of strikes last year.
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Despite surviving a shareholder rebellion last year which wanted to see him removed as Group Chairman, David Bonderman has agreed to step down from the role next year, to be replaced by current director, Stan McCarthy. With O’Leary taking up his new role, a new CEO of Ryanair DAC is expected to be appointed within the next few months.
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News of the departure of Bonderman was welcomed as a victory by the International Transport Workers’ Federation (ITF). Stephen Cotton, the ITF general secretary, said: “Having taken on one of the world’s worst employers, workers have shown that collective action can help shift dodgy corporate practices.
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The Group’s restructuring comes at a time when Ryanair announced that it had slipped into the red for the last three months of 2018 as air fares tumbled, losing €19.6m (US$22.3m) compared to a
€105.6m (US$120.4m) profit for the same period in 2017.
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O’Leary said it was disappointing but added: “We take comfort that this was entirely due to weaker than expected air fares, so our customers are enjoying record low prices, which is good for current and future traffic growth.”
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Ryanair carried 10 million passengers in January and over 140 million for the past 12 months, an increase of 8% year on year.
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Delta Air Lines has reported operating performance for January 2019. The company carried 14.1 million customers across its broad global network.
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Total system traffic for January increased 5.9% and the load factor for the month was flat at 79.7%. Total capacity improved 5.9% compared to the previous year.
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Alain Flourens, currently Head of Engineering for Airbus Helicopters, has been appointed Head of Industry for Airbus Helicopters, following Christian Cornille’s departure from Airbus. Flourens will be replaced in his current position by Stefan Thomé, currently Head of New Business Models & Services at Airbus Defence and Space. These management changes are effective on April 1, 2019.
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Alain Flourens joined Airbus Helicopters in February 2017 from Airbus Commercial Aircraft, where he held several assignments including Head of the A380 Programme, Head of the Single Aisle Programme, and Executive Vice President, Head of the Airbus Centres of Excellence.
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With almost two decades of experience in helicopter engineering, Stefan Thomé held multiple management positions at Airbus Helicopters prior to joining Airbus Defence & Space in 2018. From 2013 to 2018, he worked as Head of Vehicle Integration & Doors Engineering, leading and managing all associated activities across Airbus Helicopters, while contributing to the definition of the Division’s research and innovation policy.
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The Qantas Group has taken a 19.9% shareholding of Australian-based charter operator, Alliance Airlines.
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Alliance Airlines is a significant service provider to the resources sector, which continues to stimulate travel demand in Western Australia and Queensland in particular. Alliance is a profitable, well-managed business with high levels of operational maturity. It is also a long-term provider to the Qantas Group and flies regional services on behalf of the national carrier.
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The 19.9% stake was acquired for an average price of AU$2.40 per share and for a total cost of AU$60 million.
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Qantas expects to ultimately seek regulatory approval from the ACCC to build on its current shareholding, with a longer-term view of taking a majority position in Alliance Airlines in order to better serve the charter market by unlocking synergies.
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American Airlines has taken delivery of the first of 100 A321neos on order from Airbus, powered by CFM International LEAP-1A engines.
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The aircraft, MSN8647, departed Hamburg early Friday for the trans-Atlantic ferry flight toPittsburgh where American’s technicians will get the A321neo ready for customer flights.
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Eirtech Aviation has announced the opening of its newest office in Dublin city centre. The office will be staffed with Sales, Engineering and CAMO personnel who will be readily available to meet with customers as required.
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The office will be open from Monday 4th February 2019 and will enable Eirtech to respond to the growing needs of their customers and continue to deliver the highest level of service.
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Air Canada and Chorus Aviation, parent company of Jazz Aviation (Jazz), have confirmed that all conditions have been met and the previously announced amendment and extension of the Capacity Purchase Agreement (CPA) between Air Canada and Jazz has become effective. As announced on January 14, 2019, the improved CPA is effective retroactively as of January 1, 2019 and extends to December 31, 2035.
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As part of the agreement to amend the CPA, Air Canada has also completed the CA$97.26 million equity investment in Chorus previously announced on January 14, 2019. Air Canada has acquired 15,561,600 Class B Voting Shares in the capital of Chorus, representing approximately 9.99% of the issued and outstanding Class A Variable Voting Shares and Class B Voting Shares of Chorus on a combined basis.
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In total, the 17-year contract will provide Jazz CA$2.5 billion in minimum contracted revenues, of which CA$1.6 billion, or 65%, will be generated from aircraft leasing revenue, supporting the continued transformation of Chorus' business through the migration of CPA earnings to aircraft leasing. The amended CPA will provide for total incremental contracted revenue of CA$940 million; CA$310 million in fixed fees and CA$630 million in aircraft leasing under the CPA.
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Air Canada Deputy Chief Executive Officer and Chief Financial Officer, Michael Rousseau, will be appointed to the board of directors of Chorus.
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Magnetic MRO, a global provider of Total Technical Care for aircraft operators and lessors, issued bonds in total aggregate value of €8 million. The company has submitted an application to Nasdaq Tallinn Stock Exchange Listing & Supervisory Committee for listing the bonds on the multilateral trading facility First North. Capital raised with the bond issue will be used for acquiring a competitor operating in the same industry and further expanding Magnetic MRO’s business.
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Magnetic MRO has seen rapid growth fuelled by banks and private equity funds. Capital markets are seen as a strategical step to secure the funding of next milestones.
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Magnetic MRO arranged a non-public offering of bonds to Baltic institutional investors and private banking customers in December 2018. In primary offering, Magnetic MRO issued bonds in total nominal value of €8 million with option to increase the issue size to €15 million. Bonds will be redeemed on December 21st, 2021, and investors will receive annual interest of 8% in quarterly payments.
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BlocBox has announced the addition of a new member to its advisory board; Priveen Raj Naidu, who is currently the Founder and Chief Executive Officer of Reapra Aviation Partners (RAP), an aviation subsidiary of Reapra.
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As one half of the two-member team that set up AirAsia in Singapore back in 2003, Priveen has extensive experience in the aviation industry that saw him take up overlapping responsibilities of branding, strategizing, business development and curating consumer experience for the low-cost
carrier. His determination to grow and expand his skillsets motivated him to leave AirAsia after nearly a decade, and he subsequently joined Temasek Polytechnic’s aviation management department as a lecturer. During his stint as a lecturer in the polytechnic, he spent a lot of
time working with industry partners to formulate and review existing content to ensure standards and policies are aligned to the aviation industry.
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Priveen’s enduring passion for the aviation industry brought him to found Reapra Aviation Partners in late 2017, a company that helps the region increase its aviation capabilities through working with government stakeholders to increase their aviation economies in the airline, airport and
training space.
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With current debts of approximately US$1.14 billion resulting mainly from fierce competition, high oil prices and the depreciation of the rupee, India’s Jet Airways has agreed to the majority of
terms laid down by Gulf carrier Etihad Airways (Etihad) in a much-needed financial bail-out and company ownership restructuring. Currently, Etihad holds a 24% stake in the airline which will increase to 40%, while current 51% majority shareholder Naresh Goyal will reduce his stake to 22% and step down from the board.
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Jet Airways holds approximately one-sixth of the burgeoning Indian aviation market but owes money to banks, aircraft vendors and lessors, some of whom are threatening to repossess a number of aircraft. However, the stricken carrier is hoping to obtain shareholder approval in February to convert existing debt into equity while also allowing lenders to nominate directors to its board.
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State Bank of India (SBI) is one of the principal lenders, but as yet has not confirmed how much of a stake it was prepared to take in the carrier if the equity swop is approved by shareholders.
Combined, it is expected that lenders would end up with a 30% stake in Jet Airways through debt conversion.
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According to Reuters, Jet Airways is also struggling with payment to pilots, though it had agreed to pay an outstanding 25 percent of salary for October and 75 percent for November by January, with
the remainder cleared in tranches by April. The pilots’ union is hoping to meet with management next week to discuss the issue of outstanding wages.
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The airline's directors are expected to discuss the legal formalities of the deal and other details at a board meeting on February 14. If Jet Airlines agrees to the terms, Etihad will immediately
pump in US$35 million.
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UPCOMING EVENTS
February 19 - 20, 2019 – Palma de Majorca, Spain
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