Author Archives: MS

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Textron Aviation’s Flagship Longitude Receives FAA Type Certification

Category:News

The Longitude received the most robust testing of a Cessna Citation to date.


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Carlyle Group completes €1 billion purchase of aerospace manufacturing firm

Category:News

Global investment firm The Carlyle Group has completed the acquisition of Forgital, for approximately €1 billion.

Forgital is an Italian-based manufacturing company producing large forged and machined components for use in the aerospace and industrial sector.

Equity for the transaction will come from Carlyle Europe Partners V, a European-focused upper-mid market buyout fund and Carlyle Partners VII, a US-focused buyout fund.

Established in 1873 with headquarters in Vicenza, Italy, Forgital is a specialist manufacturer of machine-finished forged and laminated rolled rings, made from several different materials, including steel, aluminium, titanium and nickel-based alloys used in several applications across many industries.

Forgital employs over 1,100 people across nine facilities in Italy, France and United States and through its dedicated global salesforce.

Source: AE


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Boeing signs near $1 billion contract with US Air Force

Category:News

Boeing has signed a new contract with the US Air Force (USAF) worth $999 million to maintain A-10 Thunderbolt II sustainment work under an Indefinite Delivery/Indefinite Quantity (IDIQ) contract award.

The contract will cover the production of a maximum of 112 wing sets and spare kits.

The USAF ordered 27 wing sets immediately at contract award.

“Boeing is honored to be selected to continue as the A-10 Thunderbolt II wing kit contractor,” said Pam Valdez, vice president of Air Force Services for Boeing Global Services. “Our established supply base, experience with the A-10 structures, and our in-depth knowledge of the U.S. Air Force’s requirements will help us deliver high-quality wings to meet the customer’s critical need.”

Boeing will team with Korean Aerospace Industries and other key suppliers to deliver the first wing sets to Hill Air Force Base in Ogden, Utah.

Under a previous contract, Boeing delivered 173 enhanced wing assemblies.


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Gulfstream Delivers First G600

Category:News

The initial U.S. customer delivery marks a milestone for the jet.

Gulfstream Aerospace delivered its first G600 business jet to a U.S. customer from its facility in Savannah, Georgia, on August 8, 2019. The initial delivery marks an important milestone for the program, just one month after the FAA granted the aircraft’s type and production certification, on June 28.

Mark Burns, president of Gulfstream, called out this team effort dedicated to making the ambitious timeline in his remarks. “We always strive to exceed our customers’ expectations, and our first G600 delivery is a prime example of that,” said Burns in a company release. “The effort put forth by our team enabled this award-winning, technologically advanced aircraft to move from certified to delivered in an extremely short period of time.”

With the ability to travel at an average speed of Mach 0.90 from Paris to Los Angeles, in an award-winning interior, the Gulfstream G600 has already established itself as true top contender in both speed and luxury. In fact, it has notched more than 10 city-pair speed records. The aircraft logged more than 100,000 flight hours in company labs—more than half of that logged in the program before its first flight—and more than 3,200 hours in flight test prior to its entry into service.

Source : Flying


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Tamarack Aerospace Restarts the Clock on Warranties

Category:News

Active winglet airplanes returned to flying status.

On July 10, the FAA approved an alternative method of compliance (AMOC) for all Active Winglet equipped Citation jets, which returned CJ1, CJ2, CJ3 and M2 aircraft to flying status. EASA regulators also recently resolved flight restriction issues in Europe created around the recent Emergency Airworthiness Directive (EAD) against Tamarack active winglet installations awaiting a final resolution to the EAD. The AMOC requires aircraft operators to comply with Service Bulletin 1480 prior to flight that calls for replacing or upgrading a small actuator on the trailing edge of the camber surface. Tamarack is providing the product improvements from SB 1480 free of charge to all customers.

Tamarack’s Atlas active winglets came under scrutiny following several upset incidents in which pilots struggled to maintain control of the aircraft. EASA issued its AD on April 19, stating, “Recently, occurrences have been reported in which Atlas appears to have malfunctioned, causing upset events where, in some cases, the pilots had difficulty to recover the aeroplane to safe flight.” In the United States, the FAA issued its corresponding AD on May 24. Company president Jacob Klinginsmith told Flying, “The company has sold three sets of active winglets in just the last month.”

On a topic related to the active winglets, Klinginsmith said reports of his products being investigated by the NTSB following a Citation accident last November in Memphis, Indiana, are not accurate. “Our active winglets are not a focus of the investigation. The upset that caused authorities to look at Tamarack Aerospace winglets took place in April 2019,” fully six months after the Indiana crash.

In order to show the company’s gratitude to customers caught by the grounding, Tamarack Aerospace is restarting the clock on Atlas equipment warranties, no matter when the aircraft was originally modified, providing an additional 24 months of coverage. Tamarack Aerospace filed for bankruptcy in early June.

Source: Flying


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British Airways facing record £183 million data break fine

Category:News

British Airways is facing a record fine of £183 million in relation to last year’s breach of its security systems.

“We are surprised and disappointed in this initial finding from the ICO. British Airways responded quickly to a criminal act to steal customers’ data,” British Airways chairman and chief executive officer Alex Cruz, said.

“We have found no evidence of fraud/fraudulent activity on accounts linked to the theft.”

The proposed fine relates to a cyber incident notified to the ICO by British Airways in September 2018. This incident in part involved user traffic to the British Airways website being diverted to a fraudulent site.

Through this false site, customer details were harvested by the attackers. Personal data of approximately 500,000 customers were compromised in this incident, which is believed to have begun in June 2018.

The ICO said it was the biggest penalty it had ever handed out and the first to be made public under new rules.

BA has 28 days to appeal. Willie Walsh, chief executive of IAG, said British Airways would be making representations to the ICO.

“We intend to take all appropriate steps to defend the airline’s position vigorously, including making any necessary appeals,” he said.

 


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Garuda Indonesia shares tumble as regulator orders fixing of financial numbers

Category:News

Indonesia’s financial regulator (OJK) and stock exchange has ordered Garuda Indonesia to “repair and restate” its annual accounts – this has in turn sent the airline’s shares tumbling 7.6%, its lowest level since January.

The news comes just weeks after its two biggest private shareholders alleged it had misrepresented a $240 million transaction.

OJK has ordered Garuda Indonesia to fix unspecified errors in its 2018 annual accounts and submit a corrected version within 14 days. It has subsequently fined each of the airline’s directors Rp100m ($7,083).

According to a report from Reuters, the companies published a letter saying they had taken issue with the way the airline had forward-booked earnings from a deal with a technology provider in October 2018, saying it should have shown an additional $240 million loss.

The allegations were denied at the time by the airline’s chief financial officer Fuad Rizal. Garuda posted $5.02 million net profit on $4.37 billion of revenues in its 2018 annual report.

This figure is now under scrutiny.


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Lufthansa lowers outlook; IMO 2020; and the lead story from Paris

Category:News

Lufthansa shares fell by 11.5% this morning at the open after the German flag carrier lowered its profit outlook for 2019 from €2.4-3bn to €2-2.4bn, citing price competition from low-cost rivals. In a statement, Lufthansa said: “Yields in the European short-haul market, in particular in the group’s home markets, Germany and Austria, are affected by sustained overcapacities caused by carriers willing to accept significant losses to expand their market share.”

This is pressure on the Eurowings low-cost arm of Lufthansa, which is being put into retreat by the likes of Ryanair, easyJet, Wizz Air and Norwegian; in the same manner that AirBerlin and Germania were previously.

Indeed, when Ryanair announced that its margin was down by 29% a month or so ago the market should have priced-in the fact that if it is down then every other airline around it will be down. However, it seems most algorithms are slightly misplaced and out of date, choosing to have the European flag carriers as their bellwethers when in Europe at least, when Ryanair is coughing, you can bet all other airlines already have a cold.

Easyjet was trading down today by 3.2% and IAG down by 2.7% at one point with Ryanair down some 4%. Surely if Ryanair competitors are feeling the heat then Ryanair shares should be moving up – there seems to be good value in airline shares across Europe today.

The real demon on the horizon remains Jet-A refining capacity. The market seems to have pushed the looming risk of the IMO2020 global sulphur cap, which will force the majority of the global shipping fleet to switch to use of marine gas oil at the end of this year, way to the back of the priority list. Once IMO202 comes into force, some two million barrels of consumption per day by shipping will switch to refined gas oil, which requires increased use of naphtha/kerosene in fuel oil blending.

That is a huge swathe of global refining capacity and naphtha/kerosene now taken-up by shipping at the expense of other fuel types such as heating oil and Jet-A. This should lead to car fuel, heating oil and Jet-A prices skyrocketing from 2020, because refining capacity across the globe has not increased sufficiently to deal with this looming problem. Indeed, at this time no one can hedge beyond 2020 in any meaningful manner since it was announced that merely expanding hydro-desulfurisation capacity in the refining system will not be enough to meet the new targets.

Add into this mix a bunch of nutcases putting limpet mines onto tankers in the Gulf of Hormuz and you have a toxic mix. Airlines will be hit very hard indeed – all save for Delta which will be slightly insulated due to its refinery, but remember it too still need to source Kerosene for refining, which is now going to be in short supply from the end of this year as the full weight of shipping consumption becomes clear for all to see. Either way Delta will have an edge over competitors and going long on Delta might be a wise move in the here and now.

How many airlines are ready to take onboard a clear hit from IMO 2020 related fuel cost increases? Very few are in a good position outside of the US market, but I would argue that the news from Lufthansa about the pressure on Eurowings is nothing if not good news for Ryanair, Easyjet and Wizz as they need to drive out competitors fast in order to increase prices down the line to subsidise fuel price increases. So right now things do seem to be moving forward to the overall benefit of Ryanair and Easyjet over the mid-term at least.

The mighty IAG also seems to be in a very strong position across the board at the expense of its competitors, and that leads us to one very important final point – IAG avoids competing with Ryanair directly where possible – Lufthansa has been fighting them head-on with Eurowings – and that is why Lufthansa and IAG are where they are today.

Meanwhile in Paris the Goldilocks aircraft has arrived.

The Paris Air Show began this morning with the launch of the Airbus A321XLR. The aircraft is not too big, it is not too small, It is just right for so very many segments in the airline market right now. The aircraft should do very well indeed and even if it does not blow the roof off of air shows in the future with thousands of orders then we can bank on the fact that this aircraft should carry a lease rate premium well into the future, being as it is an aircraft in a mass market segment with no real competitor. It might put pressure on aircraft slightly smaller and slightly larger aircraft offerings in the Airbus range though, but that is worth the risk.

The A321XLR  has 4,700nm range and is said to bring 30% lower fuel burn per seat than previous-generation aircraft. The aircraft is also a fleet manager’s dream since it combines single-aisle economics with long-haul widebody cabin comfort, thus making the aircraft easy to fill as the market continues to downsize in favour of frequency — something that may be curbed in the future, maybe within a decade, by environmental taxation, which will turn the market on its head in the 2030s. But the more things change the more they stay the same – Air Lease Corp was the launch customer for the A320XLR with 27 orders.

Airbus has launched the very aircraft type that Boeing desperately wanted to bring to market via the NMA. Boeing cannot launch a new type while they have the MAX on the ground and while the 787 is causing so many headaches, with further delays to deliveries with RR engines on wing announced this quarter.

Indeed Tewolde Gebremariam, the CEO of Ethiopian Airlines, made very sure this weekend that Boeing could not put the MAX issue to one side for this week when he arranged a round of interviews with the global press broadsiding the Boeing senior management for stating that if US pilots were in the cockpit the crash would not have occurred. Boeing senior management would do well to sit down with airlines at the show and not conduct too many press conferences. They certainly cannot make any big splashes without looking slightly out of touch.

The Air Lease Corp order this morning showed a flight to quality with in addition to the A321XLR 27 some 50 A220-300s and 23 A321neos were ordered. Both aircraft are unquestionably two of the very best aircraft in service anywhere in the world at this moment, both of which are sought after by airlines.

There is no question that this is an Airbus rally today and this is a fine set of orders so far in a tough market.


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Magnetic MRO looking to raise capital with issue of new shares

Category:News

Magnetic MRO (MMRO) has reached an agreement with investors to raise additional capital by up to €8.95 million ($10.1 million).

Chinese company Shenzhen Yongtai Trading and Hong Kong-based Sapphire Investment Holding will acquire shareholdings of up to 13.44% and 1.6% respectively.

The total share capital of Magnetic MRO will be increased from €1.09 million to €1.23 million by way of issuing up to 30,158 new shares with the nominal value of €6.4 euros each for the aggregate issue price of up to €8.95 million.

“Magnetic MRO has total 11 different business units. Some of them are more focused on profitability and others are more driven towards fast growth. A significant part of the above equity injection will be allocated into fuelling organic growth in our growing business units,“ commented Risto Mäeots, the CEO of Magnetic MRO.

After the subscription of the new shares in full, the registered share capital of MMRO shall be €1,283 million and the total number of shares of MMRO shall be 200,500. The shareholding of Hangxin Aviation Services Co., Limited, the existing sole shareholder, may decrease as a result of the issue of new shares from 100% to 84.96%.

Source: Airline Economics


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Wheels Up Network Grows With New Acquisition

Category:News

Light jet aircraft will complement Wheels Up’s existing fleet.

New York City-based Wheels Up, a private member-based aircraft operator, today said it was adding Travel Management Company (TMC) to its portfolio. The acquisition is responding to the increasing demand from Wheels Up members for high-quality light jets that meet Wheels Up’s stringent safety and operational standards. TMC is the largest wholesale-focused light jet operator in the U.S. operating an owned and leased fleet of Hawker 400XP aircraft across North America. TMC’s fleet of 26 Hawker 400XP aircraft will complement Wheels Up’s current fleet of 93 aircraft.

TMC will continue to operate out of its current Elkhart, IN, location as an independent subsidiary of Wheels Up providing the same service to its existing wholesale channel partners. TMC customers and wholesale channel partners will continue to engage with their respective TMC contacts, including Phil Dodyk and the TMC leadership team. The deal was effective May 31, 2019, although specific financial terms of the transaction were not disclosed.

Source: Flying


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