Category Archives: News

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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 However, it seems most algorithms are slightly misplaced and out of date, choosing to have the European flag carriers as their bellwethers when in Europe at least, when Ryanair is coughing, you can bet all other airlines already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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FAA Grounds Citation 525s With Tamarack Winglets

Category:News

AD allows a ferry permit with flight restrictions.

The FAA today issued an airworthiness directive effective immediately that grounds all Cessna Citation CJ 525, 525A and 525B models operating with Tamarack active load alleviation system (ATLAS) winglets installed in accordance with STCSA03842NY. The agency said malfunctioning of the ATLAS could lead to loss of control of the entire aircraft.

The European Aviation Safety Agency issued a similar AD against Tamarack-equipped CJs last month explaining, “the active load alleviation system, when operational, deflects the Tamarack active control surfaces on the outboard wings. Recently, occurrences have been reported in which ATLAS appears to have malfunctioned causing upset events where, in some cases, the pilots had difficulty recovering the aircraft.” EASA required operators to deactivate ATLAS and fix those control surfaces in place within 10 hours of flight. The European agency also added a number of operational limitations and repetitive pre-flight inspections to these aircraft. The NTSB is investigating whether Tamarack winglets played a role in the earlier loss of a Citation 525.

The FAA, however, does not allow Tamarack CJs to operate with the ATLAS disabled. The agency did not agree with the disabling solution provided by the STC holder, Cranfield Aerospace Solutions, for the use of speed tape around the Tamarack active camber surface to prevent movement. The agency said further flight would be unsafe because an operational ATLAS may reduce the pilot’s ability to control the airplane and hence should be grounded pending incorporation of an FAA-approved modification estimated to cost $175.

Until repairs have been made, the FAA is allowing a ferry permit on individual aircraft as long as no passengers are aboard. Until repairs are completed, the aircraft is also restricted to flight at FL250 or below and airspeeds not to exceed 140 knots on the 525 and 161 knots on the 525A & B models.

Source: Flying


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Senate Grills FAA Nominee on Boeing 737 Max Issues

Category:News

Former Delta executive Steve Dickson’s path to confirmation as the next FAA Administrator is expected to be a smooth one despite pointed questions from senators.

Former Delta Air Lines executive Steve Dickson faced heated questions in the Senate on Wednesday about whether regulators could have done more to prevent two fatal crashes of Boeing 737 Max jets.

Dickson, who was senior vice president of flight operations at Delta until his retirement last October and a former F-15 fighter pilot, is President Donald Trump’s nominee to head the FAA. Under questioning from senators, he pledged to look into issues ranging from the FAA’s “delegation” of some of its oversight to the companies it regulates to pilots’ manual flying skills when automation fails.

The hearing in the Senate Committee on Commerce, Science, and Transportation came after President Donald Trump in March announced the nomination of Dickson to a five-year term as FAA Administrator.

Senators praised Dickson’s extensive experience in aviation, but also asked pointed questions about how he will handle the challenges the FAA faces.

“Bureaucratic inertia is powerful,” said Sen. Ted Cruz (R-Texas) during the hearing. “What I’m asking you to do, if confirmed, is be pissed off that 346 people died.”

Dickson asked Cruz not to mistake his calm demeanor for satisfaction “or saying that any accident is acceptable — it is not.”

Despite the pointed questioning during the hearings, Dickson is widely expected to be confirmed as the next FAA Administrator as aviation groups strongly supported his appointment.

General Aviation Manufacturers Association (GAMA) president and CEO Pete Bunce praised Dickson for his strong leadership abilities, particularly with regard to advancing the FAA’s NextGen programs.

“I have known Steve for more than 40 years and am deeply familiar with his demonstrative leadership in aviation, both as an Air Force fighter pilot and as a senior executive at Delta Air Lines,” Bunce said. “GAMA members also deeply value the contributions Steve has made to advancing air traffic modernization through his roles as chairman of the NextGen Implementation Task Force and as industry co-chair of the RTCA NextGen Advisory Committee Working Subcommittee.”

Source:Flying


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Van Nuys Airport Holds Another Successful Aviation Career Day

Category:News

1,200 students heard from dozens of exhibitors.

Van Nuys Airport, one of the busiest general aviation facilities in the U.S., last week held its 14th annual, “The Sky’s the Limit: Aviation Career Day.” This year more than 1,200 students got a first-hand look at dozens of job opportunities possibly awaiting them in the aviation industry. Since the first VNY Aviation Career Day in 2006, nearly 20,000 Los Angeles area kids have taken part in the event.

One of the highlights of Aviation Career Day was the panel discussion, “How to Enter a Career in Aviation,” which included industry professionals offering insider tips based on their own career experiences. Personnel from the Los Angeles Airport Police and Los Angeles Fire Department also were on hand to talk about their careers. In addition to the speakers, industry experts and informational booths, there were numerous aircraft available with which students took photos and selfies. Display aircraft included a U.S. Navy F-18, a NASA Armstrong Research Center C-12, a drone display from Helinet Aviation, Los Angeles Fire Department air rescue helicopters, and two WWII-era Condor Squadron AT-6’s. Participants were treated to a behind-the-scenes look at the history and daily operations of VNY.

Flora Margheritis, Airport Manager, VNY said, “Aviation Career Day allows us to share our passion for airports and open kids’ eyes to the wide variety of careers available in our profession. Whether they’re into art, science, math or writing, there is a career path for these students in the aviation industry, and we want them to know that we want them to be part of our team.”

“As I always say, you can’t be what you can’t see,” said Los Angeles City Councilwoman Nury Martinez. “Aviation Career Day exposes our children to achievable high paying career paths. In a time when the aviation industry is experiencing a shortage of pilots, air traffic controllers, and other aviation fields, it is now more important than ever to introduce aviation to our students.”

“Twenty years ago, Van Nuys-based Western Jet Aviation started with one employee, today we have 75, many of which have been hired right out of our local schools. We look to hire local workers for all areas of our business, and we’re always seeking out new talent,” said Jim Hansen, Western Jet Aviation owner and founder. “Our hope is that someday soon, one or more of these students will come back and knock on our door, ready to join our team.”

Source: Flying


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Pilatus Delivers PC-24 to U-Haul

Category:News

The 27th Super Versatile Jet joins other Pilatus airplanes in corporate fleet.

When you think about U-Haul, you probably envision a small or medium sized truck used for personal moving. But this week, the company took delivery of one of the most advanced business jets on the market – the Pilatus PC-24. Featuring an orange paint scheme reminiscent of the design on the easily identifiable trucks, the Super Versatile Jet will be based in Phoenix, Arizona. U-Haul is already operating two PC-12 turboprops and will soon add a second PC-24 to the fleet

“When Pilatus announced the new jet, we were confident that it would be a real workhorse that, alongside our two PC-12s, would help us manage our growing operations throughout North America,” Joe Shoen, chairman of Amerco, U-Haul’s parent company said as he took delivery of the airplane at the Pilatus facility in Broomfield, Colorado..

“Joe Shoen and his flight department have been on board with Pilatus and the PC-24 since we first introduced the concept to them more than five years ago,” said Thomas Bosshard, CEO of Pilatus Business Aircraft Ltd, the U.S. subsidiary of Pilatus. “Throughout the development and certification of the aircraft they’ve been looking forward to this day, and we are thrilled to celebrate it with them.”

The Pilatus PC-24 is the first business jet designed to land on unpaved airstrips. It has an impressive climb performance of more than 4,000 fpm and can cruise as fast as 440 knots, yet its stall speed can be as low as 82 kias.

U-Haul’s PC-24 is the 27th production version of the Swiss business jet, and the fleet has accumulated more than 4,000 hours to date. That’s an impressive number of deliveries for this clean-sheet design, which first entered the market a little more than one year ago. The PC-24 was one of Flying’s Editor’s Choice Awards winners.

Source: Flying


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PBS Series Looks at The Airplane, An Idea That Changed the World

Category:News

Series explains how other influencers helped the Wright Brothers create the airplane.

The second episode of a new PBS series, “Breakthrough: The Ideas That Changed the World,” premieres tomorrow night April 24 with “Airplane,” a look at the people who inspired the Wright Brothers to create the first practical aircraft.

The journey to the first successful flight is a story full of passion, danger and death, and this episode showcases the revolutionaries and visionaries who made it possible to leave the ground. Tomorrow’s episode looks at Abba Ibn Firnas, the Moorish/Islamic scholar and the world’s first pilot; Leonardo da Vinci; British inventor Sir George Cayley; French inventor and engineer Alphonse Penaud; German aviation pioneer Otto Lilienthal; famed pilot Wiley Post; and RAF officer and inventor, Frank Whittle, creator of the first jet engine.

Told through six iconic objects that modern people take for granted, the six-part Breakthrough series shows how science, invention and technology built on one another to change everything. The episode begins at 10 p.m. EST, but be sure to check your local PBS show listings.

Source: Flying


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Major Airlines Suffer from Boeing 737 Max Issue

Category:News

Thousands of flights cancelled as a result of recent crashes.

Major U.S. airlines have been forced to cancel hundreds of flights as a result of the grounding of Boeing’s 737 MAX fleet after two accidents in the past six months, one in Indonesia and the other in Ethiopia, killing a total of nearly 350 people. American Airlines reported it is grounding all 737 MAX flights through August 19. The decision amounts to 115 cancelled flights each day during the summer.

“…by extending our cancellations through the summer, we can plan more reliably for the peak travel season and provide confidence to our customers and team members when it comes to their travel plans,” said a statement from American’s chairman and CEO Doug Parker and president Robert Isom. “We remain confident that the impending software updates, along with the new training elements Boeing is developing for the Max, will lead to recertification of the aircraft soon. We have been in continuous contact with the FAA, Department of Transportation (DOT), National Transportation Safety Board (NTSB), [and] other regulatory authorities, and are pleased with the progress so far.” In the meantime, the company’s reservations team is finding alternatives for customers booked on 737 MAX flights this summer.

Reuters reported that United expects the grounded 737s to return to service this summer. The company currently only has 14 MAX airplanes in its fleet, but was expecting another 16 to be delivered this year. United still expects to receive some of those airplanes before the end of the year.

Source: Flying


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Piper Introduces Pilot 100 and Pilot 100i Trainers

Category:News

New trainers come at a value-focused price point.

Piper Aircraft announced two new value-priced additions to its trainer-class of aircraft on the opening day of Sun N’ Fun at Lakeland Florida. The company showed off its proof of concept Piper Pilot 100 and Pilot 100i. The basic 100 includes Garmin G3X Touch Certified avionics and a standard two pilot configuration while the instrument version, the 100i comes standard with a Garmin G3X Touch and a GFC500 autopilot. The VFR-equipped 100 will enter the marketplace at $259,000 and offers the durability and functionality of the Archer TX. The IFR version, the 100 is priced at $285,000.

A major change to this branch of the Piper line is the powerplant, a newly designed 180 hp Continental Prime IO-370-D3A engine that includes new generation magnetos designed to eliminate hot starting problems, an especially annoying problem for people learning to fly. The Continental engine gives the new aircraft a 128-knot cruise speed and a range of 522 miles with a 45-minute reserve.

Piper CEO Simon Caldecott said the new aircraft was identified following extensive research and the rapid expansion of trainer sales, as well as from increased demand for aircraft at a price point that could support the growing demand for professionally trained pilots. Since 2014, sales of the single-engine Piper Archer have grown more than 93 percent. For 2018, sales of the robust single engine Archer grew by nearly 50 percent year over year, while twin-engine Seminole deliveries rose 117 percent.

The new Piper Pilot 100 / 100i rounds off Piper’s portfolio of training aircraft products. With five model series now including the Pilot 100, Archer TX, Archer DX, Arrow, and Seminole, Piper says it now offers the widest range of training aircraft of any aircraft manufacturer

The Piper Pilot 100 will be touring flight schools around the country this summer as the company finalizes the aircraft’s design. Both aircraft will be available in limited quantities beginning in 2020.

Source: Flying


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