Tuesday, October 14, 2014
AviTrader Daily Aviation News Alert
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February 20, 2015 · 542 Views
The bitter dispute between US- and Gulf-based airlines has reached a new level after Emirates flatly rejected an open apology made concerning what was seen as incredibly tactless and insensitive remarks made by Delta’s Chief Executive, Richard Anderson. The unfortunate incident relates back to comments made by a group of American airlines that a number of the larger Gulf carriers had benefited from state subsidies amounting to a figure in excess of US$40bn. As a consequence the American airlines either wanted to renegotiate or scrap the current Open Skies agreement.
Offended by such claims, the Gulf carriers retaliated by questioning whether or not US airlines had received government subsidies totaling US$5bn in the wake of 9/11. Unfortunately Delta’s Anderson, responding to this claim on CNN, said: “It’s a great irony to have the United Arab Emirates from the Arabian Peninsula talk about that, given the fact that our industry was really shocked by the terrorism of 9/11, which came from terrorists from the Arabian Peninsula.” While the UAE and Qatar, two of the States’ allies who have offered either military or logistical support for international operations were particularly upset by these comments, Delta simply made it clear that Anderson had been responding to claims regarding post 9/11 subsidies. “He didn’t mean to suggest the Gulf carriers or their governments are linked to the 9/11 terrorists. We apologize if anyone was offended.”
Unfortunately the largest of the three main Gulf carriers did not see this as acceptable. “We believe that the statements made this week by Mr. Anderson were deliberately crafted and delivered for specific effect,” it confirmed in a statement. However US airlines continue to complain that they have lost significant numbers of bookings since 2008 as a result of Gulf competition and cited documents they indicate demonstrate aid which has allowed their competitors to offer cheap fares. In retaliation, Gulf officials say that most US carriers do not fly the same routes and are losing business only because they offer an inferior service.
This is not a dissimilar situation to the one between Gulf airlines and European carriers, including Lufthansa, and coincidentally has come at the same time as US airlines are trying to have US Exlm Bank closed down. They believe Gulf carriers are benefitting to a greater degree from the export credit agency. The tit-for-tat dialog continues with Western airlines showing concern for the safety of thousands of service industry jobs, a complaint to which Gulf carriers have responded by making it very clear they support at least as many jobs in the aerospace sector with their huge orders for aircraft.
February 20, 2015 · 640 Views
Snecma (Safran), a leading manufacturer of aircraft engines, and Hindustan Aeronautics (HAL), a leading aerospace manufacturer, signed a Memorandum of Understanding (MoU) on January 28th, 2015 in Bangalore to explore establishing a joint venture in India for the production of aero-engine parts. The proposed joint venture will initially focus on the manufacture of high-tech parts for the Dassault Rafale’s Snecma M88 engine, then subsequently contribute to other major aerospace projects of HAL & Snecma, in India and worldwide. Spanning over 30,000 m², the proposed joint venture’s new plant is expected to benefit from substantial investment by the two partners, providing it with state-of-the-art machinery and equipment. This agreement marks a major step forward in the long-standing collaboration between Snecma and HAL. The proposed joint venture will further broaden the scope of the excellent relations established over the past 60 years between Safran affiliates and the Indian aerospace industry. For example, Snecma manufactures the M53 engines powering the Mirage 2000H “Vajra” fighters operated by the Indian Air Force.
December 2, 2014 · 195 Views
On the 7th January 2013 a fire was reported on board a Boeing 787 Dreamliner while parked at Boston’s airport in the USA. The fire was put down to a problem with one of the plane’s lithium-ion batteries. A week later an All Nippon Airways 787 Dreamliner had to make an emergency landing after smoke was discovered inside the plane which was subsequently traced back to another lithium-ion battery. As a consequence of this incident, all 787 Dreamliners were grounded until April of that year until further acceptable testing and improvements were carried out to the battery system on board the plane. The battery itself was manufactured by GS Yuasa and comprised eight individual cells making up a combined weight of 63lbs.
Nearly two years later and the results of the investigation into the first incident have concluded that the lithium-ion battery installed in the plane should not have received certification by the FAA. The National Transport Safety Board (NTSB) were also critical of Boeing who they believed had erroneously ruled out the chances of thermal runaway in its assessment of the battery’s safety. Boeing’s battery tests to obtain original certification included crushing battery cells, driving nails through them and deliberately introducing short circuits to cause failure. Boeing found “nothing adverse happened” while these tests were carried out, and so deemed the battery’s box and internal protection to be of an acceptable standard. Boeing stated that it had followed the certification process set out by the FAA. It would seem that while the cause of the fire has been clearly identified, responsibility for its occurrence has not been accepted in full by anyone.
November 5, 2014 · 162 Views
Back in February this year, Rolls-Royce, the FTSE-100 engine maker, lost over £3bn of its value after shocking the market with its first profits warning in a decade. To announce a second one this October has created considerable concern and Rolls-Royce has decided that over the next 18 months they need to reduce costs by up to £80m a year by axing 2,600 jobs, the majority of which will be in the aerospace sector in Britain and the United States. The focus is on Rolls-Royce’s key Trent engines as they move from the development to the production phase, which consequently requires fewer engineers.
Back in February John Rishton, Rolls-Royce group’s Chief Executive, had admitted that the future was “bumpier than I had expected”, while blaming the current problems on deteriorating economic conditions and a tit-for-tat trade war between the EU and Russia over the Ukrainian crisis which had affected its nuclear and energy business as well as its power-systems unit. This week Rishton has had to admit that “We are taking determined management action and accelerating our progress on cost. The measures announced today will not be the last; however they will contribute towards Rolls-Royce becoming a stronger and more profitable company.”
Another consequence of the situation is the unexpected departure of Finance Director, Mark Morris, leaving the company after 27 year without any explanation. He will be replaced by David Smith, who is being promoted from Finance Director of the Rolls-Royce Aerospace division. This second profit warning saw share value fall 11% to 832p, wiping a further £2bn off the company’s value. However, news of the redundancies was well received by investors and the share price rallied by 2%, currently standing at 832p. This is clear confirmation of comments made by Espirito Santo’s analyst, Ed Stacey, who indicated that investors would be expecting a clear message from the new Finance Director and tight control on all finances.
March 25, 2014 · 111 Views
Air France-KLM selected the GEnx-1B engine to power its 25 Boeing 787 Dreamliners and 12 leased 787 aircraft. The total engine order is valued at more than $1.7bn. Air France-KLM and GE Aviation have also signed an agreement that will allow Air France-KLM to offer maintenance, repair and overhaul (MRO) services for the GEnx-1B engine. Under this agreement, Air France-KLM will be licensed to perform maintenance and overhaul work on the GEnx-1B engine and GE will provide technical support and assistance on overhaul workscoping and component repair licenses, comprehensive material support and training.
March 7, 2014 · 78 Views
International Lease Finance Corporation (ILFC) has closed a new senior secured term loan of $1.5 billion. The loan will bear interest at LIBOR plus 275 basis points with a 0.75% LIBOR floor, is priced at 99.5% of par value, and will mature in 2021. The collateral used to support the transaction has an initial weighted average age of 9.1 years. It will be secured primarily by a first priority-perfected lien on the equity of certain of ILFC’s subsidiaries, which directly or indirectly own a pool of aircraft and related leases. ILFC plans to use the proceeds for general corporate purposes, including purchasing aircraft and supporting the company’s liquidity cushion.
February 26, 2014 · 78 Views
In 2013, Airbus achieved a new industry record of 1,619 gross commercial orders (FY 2012: 914 gross orders) with net orders of 1,503 aircraft (FY 2012: 833 net orders), excluding ATR. Gross orders comprised 1,253 A320 Family aircraft, 77 A330s, 239 A350 XWBs and 50 A380s. Fourth-quarter orders included Emirates Airline’s agreement for 50 A380s and Etihad Airways’ order for 50 A350 XWBs, 36 A320neos and one A330-200F. Airbus Military (now part of Airbus Defence and Space) received 17 net orders (FY 2012: 32 net orders). Airbus’ net order intake increased sharply to €202.3bn (FY 2012: €88.9bn). At the end of 2013, Airbus’ consolidated order book was valued at €647.4bn (year-end 2012: €525.5bn). The Airbus Commercial backlog was worth €627.1bn (year-end 2012: €505.3bn), comprising 5,559 Airbus aircraft (year-end 2012: 4,682 units) and representing over eight years of production. Airbus Military’s order book was worth €20.8bn (year-end 2012: €21.1bn). Airbus series aircraft deliveries increased to 626 aircraft (FY 2012: 588 aircraft, including three A330s without revenue recognition). Airbus Military delivered 31 aircraft (FY 2012: 29 aircraft). Airbus’ consolidated revenues increased seven percent to €42,012m (FY 2012: €39,273m), reflecting higher commercial and military aircraft deliveries. The Division’s consolidated EBIT rose to €1,710m (FY 2012: €1,252m). Airbus Commercial’s revenues rose to €39,889m (FY 2012: €37,624m). The Airbus Commercial reported EBIT was €1,595m (FY 2012: €1,147m) with the EBIT before one-off at €2,216m (FY 2012: €1,669m). Airbus Commercial’s EBIT before one-off benefitted from the improved operational performance, including favourable volume, some better pricing and an improvement in A380 losses. It also included higher A350 XWB programme support costs. Revenues at Airbus Military rose to €2,893m (FY 2012: €2,131m), driven by the A400M ramp-up and higher volumes from both light and medium transport planes and tankers. The EBIT at Airbus Military was €166m (FY 2012: €93m).
January 29, 2014 · 74 Views
Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7bn and full-year revenue increased to a record $53bn on higher delivery volume. Fourth-quarter operating margin improved to 10.3% and full-year operating margin grew to 10.9% on the higher volume, favorable delivery mix and continued strong operating performance. During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM). Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.
January 9, 2014 · 65 Views
The A350 XWB development aircraft, MSN3, is in Bolivia where it will perform a series of tests at the high altitude airfields of Cochabamba and La Paz. Cochabamba is around 8,300 feet above sea level, and La Paz is one of the world’s highest airports at 13,300 feet. Operations at such high altitude airfields are particularly demanding on aircraft engines, Auxiliary Power Unit (APU) and systems. The aim of these trials is to demonstrate and validate the full functionality of engines, systems, materials as well as to assess the overall aircraft behaviour under these extreme conditions. A number of take-offs with all engines operating and with simulated engine failures are being performed at each of the airfields to collect data on engine operating characteristics and validate the aircraft take-off performance. The autopilot behaviour will also be evaluated during automatic landings and go-arounds. Since the A350 XWB’s first flight with MSN1 on June 14th 2013, over 800 flight test hours have been performed in close to 200 test flights by both MSN1 and MSN3. In total the A350 XWB flight test campaign will accumulate around 2,500 flight hours with the fleet of five aircraft. The rigorous flight testing will lead to the certification of the A350-900 by the European EASA and US FAA airworthiness authorities, prior to entry into service in Q4 2014.
July 5, 2013 · 64 Views
Firefly, Malaysia Airlines’ subsidiary carrier has taken ownership of its first brand-new ATR 72-600. The aircraft is the first of 20 latest generation firm ATRs, plus 16 options, ordered by Malaysia Airlines in December 2012. Firefly currently operates 12 ATR 72-500s, and with the arrival of the new ATR 72-600s will almost triple its exclusively ATR 72 aircraft fleet, taking the total to over 30 aircraft.
June 26, 2013 · 40 Views
Certification testing is underway on the first Passport development engine at GE Aviation’s Peebles Testing Operation in Ohio. The engine began ground testing on June 24th and ran for more than three hours, reaching more than 18,000 lbs. of standard day sea-level takeoff thrust. Eight Passport engines and one core will be involved in the engine certification program. Flight testing on GE’s flying testbed is scheduled for 2014. Engine certification is expected in 2015. The Passport engine certification program follows three years of validation testing. GE Aviation has conducted validation tests on the fan blisk design, including two fan blade-out rig tests, ingestion tests and a fan aero rig test to demonstrate fan efficiency. Testing is complete on the third eCore demonstrator, and GE has accumulated more than 300 hours of testing on eCore demonstrators to date.
May 22, 2013 · 53 Views
Rolls-Royce has won an order from US leasing company CIT Aerospace for Trent XWB engines, to power ten Airbus A350 XWB aircraft and Trent 700 engines to power 13 Airbus A330 aircraft. The Trent XWB engines will power ten CIT A350 aircraft that were announced in January 2013 which were in addition to five A350 XWB aircraft already on order. The Trent XWB, specifically designed for the Airbus A350, is the fastest selling Trent engine ever, with more than 1,200 already sold. The engine variant that will power the A350-800 and -900 was awarded European Aviation Safety Agency (EASA) type certification in February. The engine will power the first flight of the Airbus A350 XWB this year and the aircraft’s first in-service flight in 2014.
October 13, 2014 · 83 Views
Marshall Aviation Services at Cambridge signed an agreement with Blink, the six-year-old Blackbushe, UK-based air taxi and jet charter operator, to provide multi-year MRO and technical support for its six Cessna Citation Mustang VLJs. Marshall, drawing on its 40 years’ experience providing Citation support, will provide base support in the UK at its Cambridge headquarters, together with AOG support in Europe. Blink has grown significantly since being established in 2008. The brainchild of Harvard MBA graduates, Cameron Ogden and Peter Leiman, Blink’s business model is a replica of the successful low cost carriers, offering a regionally operated air taxi on flexible schedules around Europe.
October 13, 2014 · 57 Views
Embraer delivered the first Legacy 500, its new midsize executive jet. The launch customer, a Brazilian company, received the aircraft during a ceremony at Embraer headquarters, in São José dos Campos, Brazil. The entry into service of the Legacy 500 is yet another important achievement by our Company,” said Marco Túlio Pellegrini, President and CEO, Embraer Executive Jets. “Our teams developed a revolutionary product, which symbolizes our commitment to offer our customers the most innovative solutions in the industry.” The Legacy 500 is the first of a new generation of business jets, and redefines the midsize category. With sophisticated technologies never before seen in their respective classes, this aircraft also brings innovation to the manufacturing system, with extensive use of automation, robotics and paperless assembly processes.
October 13, 2014 · 87 Views
Precision Aircraft Solutions has finished the conversion of MSN 28718, a 757, for DHL affiliate Blue Dart Aviation. The aircraft was modified at TAECO in Xiamen, PRC, and will fly in India. The weight upgraded (high payload) freighter represents the fifth 757-200PCF to join the Bluedart fleet. DHL global network air providers currently operate 15 Precision-converted aircraft, including several in India, Australia, North America, the Republic of Panama and the Kingdom of Bahrain.
October 13, 2014 · 104 Views
GE Capital Aviation Services (GECAS), the aircraft leasing unit of GE signed an agreement to acquire Milestone Aviation Group, the Dublin-based helicopter lessor, for $1.775 bn. The acquisition is in line with GE Capital’s strategic plan of growing and enhancing value in core areas aligned with GE’s industrial domains including energy, aviation, oil & gas and healthcare, while reducing the overall size of GE Capital through the disposition of non-strategic assets such as the recently executed IPO and planned split-off of our North American Retail Finance business and the sale of our consumer banks in the Nordics. Helicopter finance represents a fast-growing sector in aviation. Since Milestone’s founding in August 2010 by aviation and leasing industry veteran Richard T. Santulli and other members of the former NetJets executive management team, the company has quickly grown into a leading helicopter leasing company. Today, Milestone’s fleet includes 168 helicopters worth $2.8bn as well as a strong forward order and option book of $3bn with a variety of helicopter manufacturers. The helicopters in Milestone’s fleet are primarily used in offshore oil and gas, search and rescue, emergency medical services and mining, as well as other industries, and are currently leased to 31 operators in 25 countries.
October 13, 2014 · 77 Views
Customers in Europe and the Middle East who operate large-capacity, long-range “heavy” helicopters now have a convenient, highly skilled option for major refurbishments of their aircraft. Heli-One Poland recently completed its first G-Check inspection, of an Airbus Helicopter Super Puma AS322L aircraft, for CHC Helicopter, Heli-One’s parent company and now is extending that service to other operators. The G-Check, repainting and other modifications of the CHC aircraft by Heli-One’s Rzeszow team were completed at the new customized, 65,000 square-foot hangar here. Heli-One had been operating from a temporary facility in Rzeszow since February 2013. The new facility has a maintenance hangar which can accommodate up to six large airframes, along with office and shop space.
October 13, 2014 · 77 Views
The European Commission requested a meeting between the European Union and the United States to discuss Norwegian Air International’s pending application for a foreign air carrier permit before the U.S. Department of Transportation. The extraordinary meeting, which is being requested by the Commission on behalf of the European Union as a party to the U.S-EU Open Skies Agreement, sends a clear message that the European Union is closely watching Norwegian Air International’s application, to fly to the U.S from several cities in Europe which has been pending for over eight months. Norwegian Air International welcomes the European Union’s action to protect the rights of European airlines under the U.S.-EU Open Skies Agreement, which obligates parties to grant operating authority “with minimum procedural delay.” Asgeir Nyseth, CEO of Norwegian Air International, said, “We are confident that the Department of Transportation will do the right thing and grant our application without further delay.” Norwegian Air International’s application has taken nearly four times as long as applications of other European carriers applying for the same authority. “We look forward to bringing new competitive and affordable fares on new Boeing 787 Dreamliner aircraft to the U.S.-Europe market,” said Nyseth. With over 300 U.S. based crew, and plans for a pilot base in New York, Norwegian’s new service will bolster the U.S. economy through increased tourism, jobs, and support of the nation’s largest exporter, Boeing.
October 13, 2014 · 83 Views
The Finnair Board of Directors has approved a one-off long-term incentive plan for Finnair pilots. The plan is a part of the savings agreement between Finnair and the Finnish Air Line Pilots’ Association (SLL) that brings Finnair €17m in permanent annual savings. The savings agreement was contingent on the realization of the incentive plan. The plan period is 2015-2018 and the prerequisite for rewarding pilots based on this plan is the materialization of the agreed cost savings over this time period. In addition, the company share price must at least be €4 at the end of the incentive plan. If these conditions are met, the pilots are entitled to a cash payment. The amount of the payment is based on the Finnair share price. The total reward to pilots amounts to €12m if the share price is €4 or a maximum of €24m, if the share price reaches at least €8. Divided over the four year period, the annual earnings potential for an individual pilot is equivalent to 5-10 per cent of annual base salary. Finnair plans to hedge the additional costs above the € share price with a market-based call option. If the conditions of the plan are met, the associated total cost over the four year period is thus limited to approximately €12m. The closing price of Finnair share was €2.39 on October 10th, 2014. The number of pilots eligible to participate in the plan is approximately 700. The cash reward will be paid to pilots in spring 2019, provided that the aforementioned performance criteria are met.
October 13, 2014 · 126 Views
China Aviation Supplies Holding Company (CAS) and Airbus have signed a General Terms Agreement (GTA) for the purchase of a total of 70 Airbus A320 Family aircraft, reflecting the strong demand from Chinese carriers for the leading Airbus single-aisle Family for domestic, low cost, regional and international operations.
October 13, 2014 · 143 Views
Final assembly of VietJetAir’s first A320 on order from Airbus is now underway in Toulouse, France. This is the first of up to 100 of the best-selling single aisle aircraft that will be acquired by the airline under a deal finalised in February this year. The acquisition plan covers firm orders with Airbus for 63 aircraft, plus 30 purchase rights. In addition the airline will lease seven more aircraft from third party lessors. VietJetAir will start taking delivery of its new A320 Family fleet in Q4 of this year. The aircraft will join an existing fleet of 15 leased A320s at the fast-growing low cost carrier and will be operated on the airline’s expanding network of domestic and regional services.
October 13, 2014 · 127 Views
Boeing and Garuda Indonesia announced an order for 50 737 MAX 8s, valued at $4.9bn at current list prices. The flag carrier of Indonesia will purchase 46 737 MAX 8s and will convert existing orders for four Next-Generation 737-800s to 737 MAX 8s. The order was previously accounted for on Boeing’s Orders and Deliveries Web site, attributed to an unidentified customer. Garuda Indonesia currently operates 77 Boeing 737s. The new order gives the airline the flexibility to grow and to update its fleet as the market demands.
October 13, 2014 · 287 Views
Airbus Group N.V. has successfully signed an amended and extended €3bn revolving syndicated credit facility, in a move designed to benefit from the current favourable loan market conditions. The facility, which was amended and restated on October 10th, 2014, has a maturity of five years plus two one-year extension options and carries an opening margin of 20 basis points per annum. It replaces an existing €3bn facility dated April 14th, 2011 of the same maturity. The facility is for general corporate purposes. It received very strong support from banks and closed oversubscribed. The Bank of Tokyo-Mitsubishi, Crédit Agricole Corporate and Investment Bank, The Royal Bank of Scotland (RBS), and UniCredit Bank acted as Coordinators.
October 13, 2014 · 160 Views
Just a few weeks after Embraer received regulatory approval for its medium-sized Legacy 500 business jet, the Brazilian company broke ground on the construction of its Legacy 500 and Legacy 450 assembly complex in Melbourne, Florida. The 236,000 ft² premises should be operational by 2016 and will feature four new buildings. These will include an assembly hangar, a paint facility, a completion center and flight preparation facility, and a new dedicated delivery center. Embraer has come a long way in the 6 short years since it first started US operations from a 212,000 ft² building in Brevard county. Back then the company held a modest 3% of the business-jet market. Today the company holds an impressive 18% and growing. This new set-up will see staff levels increase from 400 to over 1,000 over the next four years and Embraer continue to take full advantage of Florida’s removal of sales tax on manufacturing equipment which has allowed them to be so competitive. However onlookers should not be deceived into thinking that Embraer are settling for a solid holding in the mid-range business jet market. They are fully aware that while the Legacy 500 can carry up to 12 passengers, it has a range of only 3,000 nautical miles, which means the Gulfstream G650 will still remain the jet of choice for the CEO’s of this world. With a range of 7,500 nautical miles that means the long-range G650 can fly non-stop to Beijing from New York with 18 passengers on board. Embraer will also be keeping a close eye on Bombardier too, who are venturing further into the long-range jet market with their Global 7000 and 8000 models which will be operational in 2016 and 2107 respectively and which will be able to carry up to 19 passengers over 7,000 nautical miles. With the way the globe is opening up economically, the long-range business jet is seen as an area of the market which should expect to see steady growth in the years to come, so don’t be surprised to see Embraer’s name appearing in the long-range sector of the business jet market in the near future.