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Friday, January 30, 2015

AviTrader Daily Aviation News Alert

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Emirates reject Delta’s apology regarding Anderson’s 9/11 comments

February 20, 2015 · 556 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.

Snecma and HAL to create joint venture and build a new production facility in India

February 20, 2015 · 655 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.

Design flaws led to 787 battery fire

December 2, 2014 · 197 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.

Rolls-Royce forced to axe 2,600 jobs after second profit warning this year

November 5, 2014 · 164 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.

Air France-KLM selects GEnx engines for Boeing 787 fleet

March 25, 2014 · 113 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.

ILFC closes $1.5bn senior secured term loan

March 7, 2014 · 80 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.

Airbus Commercial reports another year of financial improvement

February 26, 2014 · 80 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).

Boeing Commercial Airplanes reports full year revenue of $53bn

January 29, 2014 · 76 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.

A350 XWB in Bolivia for high altitude testing

January 9, 2014 · 67 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.

Firefly welcomes first ATR 72-600

July 5, 2013 · 66 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.

GE’s Passport engine begins first full engine test

June 26, 2013 · 42 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.

Rolls-Royce wins order from CIT to power 23 aircraft

May 22, 2013 · 55 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.

Kaman awarded long term agreement by Boeing for KC-46A Tanker Fixed Trailing Edge kits

January 29, 2015 · 350 Views

Kaman Corporation announced that its Aerosystems division (Kaman) has been awarded a multi-year contract for the production of the fixed trailing edge (FTE) kits and assemblies for the Boeing KC-46A Tanker Program. Kaman delivered its first KC-46A Tanker FTE kit to Boeing in March 2014. To date Kaman has provided more than 1,000 FTE kits and assemblies for the 767 program since 1986. Kaman is a leading supplier of integrated structures, including metallic and composite structural assemblies and detail metallic parts, for OEM and Tier I aerospace companies engaged in commercial and military aircraft programs. Kaman provides complete aero-structure solutions including design, tooling, manufacturing, testing, and product support.

B/E Aerospace reports full year and 2014 financial results

January 29, 2015 · 322 Views

B/E Aerospace reported 2014 revenues of US$2.6bn increased 18.0% as compared with the prior year.  Adjusted operating earnings were US$466.4m, an increase of 19.8% and adjusted operating margin of 17.9% increased 20 basis points as compared with the prior year. On a GAAP basis, operating earnings were US$384.0m. 2014 adjusted EBITDA of US$571.1m increased 21.1% as compared with the prior year. Adjusted net earnings and adjusted net earnings per diluted share were US$261.9 million and US$2.51 per share, representing increases of 26.3% and 25.5%, respectively, as compared with the prior year. On a GAAP basis, net earnings and net earnings per diluted share were US$57.7m and US$0.55 per share. Record bookings for 2014 were more than US$2.7bn and increased 21% as compared to the prior year. Backlog as of December 31st, 2014 was approximately US$3.0bn, while awarded but unbooked backlog was approximately US$5.0bn, bringing total backlog, both booked and awarded but unbooked, to approximately US$8.0bn. Commercial aircraft segment (“CAS”) revenues of US$2.06bn increased 15.4%, adjusted operating earnings of US$375.1m increased 17.1% and adjusted operating margin of 18.2% increased 30 basis points, as compared with the prior year. On a GAAP basis, CAS operating earnings were US$356.3 million. Business jet segment (“BJS”) revenues of US$540.1m increased 29.0%. Adjusted operating earnings were US$91.3m, an increase of 32.1%, and adjusted operating margin of 16.9% increased 40 basis points, as compared with the prior year. On a GAAP basis, BJS operating earnings were US$50.0m.

JetBlue posts 4th quarter 2014 net income of US$88m

January 29, 2015 · 331 Views

JetBlue reported operating income of US$169m in the fourth quarter. This compares to operating income of US$115m in the fourth quarter of 2013. For the full year 2014, JetBlue reported operating income of US$515m. This compares to operating income of US$428m in 2013. Pre-tax income of US$140m in the fourth quarter. This compares to pre-tax income of US$77m in the fourth quarter of 2013. For the full year 2014, on a GAAP basis JetBlue reported pre-tax income of US$623m. Excluding special items, pre-tax income in 2014 was US$382m; this compares to pre-tax income of US$279m for the full year 2013. On a GAAP basis, net income for the fourth quarter was US$88m. Excluding special items, net income was US$87m this compares to JetBlue’s fourth quarter 2013 net income of US$47m. For the full year 2014, on a GAAP basis, JetBlue reported net income of US$401m. Excluding special items, net income was US$232m, this compares to net income of US$168m for the full year 2013.

Finnish competition authority approves Flybe Nordic transaction

January 29, 2015 · 349 Views

The Finnish Competition and Consumer Authority has approved the transaction in which Flybe Uk’s 60% ownership of Flybe Nordic venture will be transferred to StaffPoint Holding and G.W. Sohlberg (GWS). The letter of intent on this transaction was announced on January 7th 2015. Upon completion of the sale, StaffPoint’s ownership in the joint venture will be 45%, GWS’s 15% and Finnair’s 40%. The transaction is expected to be closed in early February 2015. Flybe Nordic owns fully the Finnish subsidiary Flybe Finland, which is in charge of Finnair’s regional airline operations. Flybe Finland currently operates to a number of domestic and European destinations from Helsinki on behalf of Finnair on a contract-flying basis. In addition, Flybe Finland operates to five domestic destinations as well as Tartu, Estonia and Norrköping, Sweden at its own commercial risk.

Airbus Defence and Space announces management and organisational changes in Military Aircraft, A400M business segment

January 29, 2015 · 388 Views

Airbus Defence and Space released that Fernando Alonso has been named as Head of  its Military Aircraft business unit as per 1st of March. Bernhard Gerwert, CEO of Airbus Defence and Space, will act as interim Head of Military Aircraft until this date. Fernando Alonso replaces Domingo Ureña-Raso, who has resigned from his position.

Further to the top management changes, the A400M programme will be restructured.  These organisational changes are designed to allow more efficient operations inside the Airbus Defence and Space Division and to put the A400M programme as well as its industrialisation in a position to best address currently existing shortfalls:

– Responsibility for all industrial-related activities is being shifted to the Operations organisation, which is led by Pilar Albiac-Murillo.

– Programme-related activities such as development and customer deliveries will remain in the scope of the Military Aircraft business unit, under the lead of Rafael Tentor, who serves as Head of the A400M programme.

The current aircraft in service are showing good performance with the aircraft exceeding its specifications in its strategic, logistical role. The military capabilities consisting of aerial delivery, cargo handling system, Defensive Aids Subsystems (DASS) and air-to-air refuelling with pods will be integrated in the second half of 2015, following certification and qualification for each capability.  Flight testing of these capabilities is continuing at a high pace. Additional military capabilities will be integrated gradually up till 2018 as contractually agreed.


GE Aviation announces more jobs and additional investment in Lafayette

January 29, 2015 · 301 Views

GE Aviation reported plans for additional investment at the site of its new engine assembly facility in Lafayette, Indiana. The additional US$15M investment in machinery and equipment will allow for maintenance, repair and overhaul capability for the new LEAP engine of CFM International, a 50/50 joint company of GE and Snecma (Safran) of France. GE plans to hire an additional 30 people, bringing the total commitment to 230 employees by 2020. Hiring will begin next month. The new jobs and investment will position Lafayette to play a pivotal role across the entire life cycle of the engine—beginning with capability for final assembly of new make engines, and extending to maintenance, repair and overhaul of the engines once in service. Construction on the new 300,000-ft² facility in Lafayette has begun and the facility will be operational by January of 2016.

After months of struggling, Skymark Airlines eventually files for bankruptcy protection

January 29, 2015 · 104 Views

It was on the 29th July 2014 that alarm bells started to ring for the future of Japan’s Skymark Airlines Inc. when it announced it was struggling over negotiations with Airbus SAS over their order for six A380 jets. The order had been signed in 2011 at a cost of 191.6bn Yen (US$1.88bn) and Skymark was keen to renegotiate the price based on the airlines struggle against competition from JAL and ANA, plus the falling value of the Yen. Though fearful of Airbus’ hefty penalties that might be incurred for breach of contract, Airbus simply cancelled the order and instead began legal proceedings against Skymark over unpaid deposits, though classed as a US$700m cancellation fee. Unlike JAL and ANA, Skymark had no hedge defense against sharp rate drops in the yen and while aiming to capture the low-cost element of the Japanese market, had suffered heavily in that sector with competition from Malaysia’s AirAsia and Australia’s Qantas. Skymark then also flagged it had doubts about its ability to continue trading, citing problems paying Airbus. In September Skymark warned of an anticipated annual loss of 13.7bn Yen (US$115m) for the year to March 2015, as opposed to a previously anticipated profit of 354m Yen (US$3m.) Curiously, back in 2010 Skymark surprised the airline industry when placing an original order with Airbus for four A380 aircraft, while aggressively hiring pilots from JAL which was itself undergoing restructuring then subsequent to filing for bankruptcy protection.
On Tuesday of this week Skymark Airlines finally waved the white flag and filed for protection from creditors with liabilities of 71.09bn Yen (US$603.6m.) Board member Masakazu Arimori has taken over from Chief executive Shinichi Nishikubo, who has resigned from the board with immediate effect. Skymark has made it clear that while the company will be delisted from the Tokyo stock exchange on the 1st March, the Tokyo-based private equity firm Integral has agreed to provide financing to assist the airline in restructuring, subject to court approval.
The Airbus debacle began with Nishibuko, an internet entrepreneur, deciding to take on the likes of JAL and ANA by intending to offer cut-price fares on the lucrative routes to destinations such as New York, despite struggling with rising running costs. The airline’s demise will now see the vultures circling the carcass as Skymark has 36 landing slots at Tokyo’s crowded Haneda airport, JAL currently holding 184.5 and ANA, together with its subsidiaries, holding roughly half of the 465 slots. In December Skymark made it clear it would hold talks with JAL and ANA on code-share flights while seeking more funds from investors.

Gogo Vision now installed on more than 1700 commercial aircraft

January 29, 2015 · 113 Views

Gogo’s  wireless in-flight entertainment product – Gogo Vision – is now installed on more than 1,700 commercial aircraft across six major airlines the company reported and continues to roll out in the business aviation market. Today, more than half of the aircraft flying around the world with wireless in-flight entertainment are equipped with the Gogo Vision product. Gogo Vision allows passengers to rent movies and television shows on their own Wi-Fi enabled laptops, tablets or smartphones. Gogo has currently licensed more than 200 movies and close to 200 television shows from most of the major Hollywood studios. Most content is in the DVD release window, but Gogo is the first provider of wireless in-flight entertainment with some content in the early release window.