TrueNoord acquires two Embraer E195s from Azul with leases attached to Portugalia

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TrueNoord, the specialist regional aircraft lessor, continues its growth path with the addition of two Embraer E195 aircraft on lease to Portugália. Both aircraft, MSN19000407 and MSN19000429, were purchased with leases attached from Brazilian operator Azul. The project was financed by TrueNoord’s revolving warehouse facility underwritten by Citibank, Société Générale and Royal Bank of Canada.  Legal counsel for TrueNoord on the acquisition was CMS, with Milbank advising on the financing. With this acquisition, TrueNoord completes another significant milestone and reaches a fleet of 50 modern regional aircraft.

Garry Topp, Sales Director for TrueNoord responsible for the Americas, comments: “This was a complex transaction carried out during the COVID-19 crisis.  It was conceived, negotiated and executed by people working remotely on all sides. There was a real commitment to get it done and everyone involved showed great creativity, patience, discipline and teamwork to achieve success.”

Anne-Bart Tieleman, CEO – TrueNoord, adds “Considering the market disruption caused by the COVID-19 crisis and the pressures this has created across the aviation industry, it is a credit to the team at TrueNoord, Azul and Portugália that they remained focused and worked together to close this multifaceted transaction. We appreciate the support of our shareholders and banks in these difficult times as we plan for the future, and we are proud to welcome Portugália to our business as a new lessee.

On behalf of Azul, Alex Malfitani, CFO said “This transaction shows that there is interest in the market for assets such as the Embraer E195 even with the challenges that the aviation industry is facing amidst the pandemic. We feel fortunate to have valuable partners to count on while facing such an unprecedented crisis. Truenoord have come to us with creative and practical alternatives that generate value to our business, and we look forward to continuing to develop our relationship with them.”

Valter Fernandes, Managing Director of Portugália, commented “These have been extremely challenging times for the aviation industry and due to a great deal of effort and endurance from all involved, we are delighted to join TrueNoord with two ERJ195s and look forward to building our relationship at the highest level. It is with great pleasure and enthusiasm that we embrace this new venture.”

Portugália Airlines is a Portuguese regional airline. It is a subsidiary of TAP Air Portugal and operates scheduled international and domestic services from its bases at Lisbon Airport and Porto Airport under the brand TAP Express. Renovation of their regional fleet has been a major initiative for the past five years and TAP Express operates the Embraer 190 and 195, as well as the ATR72-600, across its route network.  These aircraft benefit from low emission characteristics and provide the airline with significant savings in fuel consumption.

Boeing 737 MAX gains first order for 2020 from Enter Air

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Boeing and Enter Air have announced the Polish airline is expanding its commitment to the 737 family with a new order for two 737-8 planes plus options for two more jets.

An all-Boeing operator and Poland’s biggest charter carrier, Enter Air began operations in 2010 with a single 737 aeroplane. Today, the airline’s fleet includes 22 737 NGs and two 737 MAX aircraft. When this new purchase agreement is finalised it will mean Enter Air’s 737 MAX fleet will rise to ten airframes.

Enter Air and Boeing have also finalised a settlement to address the commercial impacts stemming from the grounding of the 737 MAX fleet.

Editor’s Comment: Ryanair’s ready to adapt and remain

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Ryanair, the Dublin-based LCC, has revealed that its bookings had “weakened over the last ten days” which it claims has been due to the uncertainty over the current advice given about COVID-19. The carrier revealed that due to the drop in bookings, at what would normally be one of its busiest periods, it has decided to cut flight capacity by a fifth in September and October, as it believes further travel restrictions will be introduced in some European countries.

While the drop in forward bookings is disappointing for any airline, given the current confusion across Europe, with each respective government offering differing advice as to how to deal with the pandemic and, a growing number of nations requiring holidaymakers to undergo a two-week quarantine when they return home, it’s no wonder people are apprehensive about travelling.

What could be looked upon by some observers as Ryanair overreacting, I view as a precautionary and prudent move by the airline? The LCC has proved itself flexible enough to react to any challenge it has faced of late, from the delayed delivery of its massive 737 MAX order, through to a Europe-wide ban on air travel at the start of the pandemic.

Contrary to many other airlines, Ryanair has publicly stated that the reductions in the frequency of flights will not impact any jobs.

The 20% reduction will be focused on Spain, France and Sweden but it’s anticipated that further countries may be added to this list.

Ryanair is proving that it can adapt to what is an extremely difficult time for the industry, let’s just hope that others can too.

Skyborne goes electric with ten Bye Aerospace eFlyers

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Skyborne Airline Academy has become the first UK pilot training school to place an order for Bye Aerospace’s all-electric aircraft.

Producing zero CO2 emissions and using clean, renewable energy; six eFlyer 2 and four eFlyer 4 planes will be added to Skyborne’s ever-growing fleet. Bye Aerospace estimates the eFlyer will eliminate 5 million metric tons of CO2 generated every year during airline pilot training worldwide.

Lee Woodward, Chief Executive Officer, Skyborne, says: “We are radically redefining every aspect of airline pilot training and that includes incorporating all-electric aircraft into our fleet as we invest in the latest technology for our trainees and staff.

“The eFlyers are great for the environment, economical to operate and have the right blend of avionic technology and handling characteristics required to train our future airline pilots.

“A significant reduction in global carbon emissions is the goal for most socially responsible organisations in our industry, and with the help of Bye Aerospace we aim to lead the way in the UK. It’s vital for the next generation that we invest in measures to make flying more sustainable. Electric is the future of aviation.”

George E Bye, founder and Chief Executive officer, Bye Aerospace, adds: “Skyborne is a pioneer of electric aviation in the UK and has been particularly resilient in their approach to flight training during the pandemic.

“Their ability to recognise and prepare for the benefits of electric aviation, while adjusting to the challenges presented by coronavirus, has been impressive.”

Bye Aerospace’s eFlyer 2 aims to be the first all-electric training airplane to achieve Part 23 airworthiness certification from the US Federal Aviation Administration (FAA). The Critical Design Review for eFlyer 2 was achieved on 5 June, with the next phase of the flight test programme currently underway.

The first two-seater eFlyer aircraft are expected to join the Skyborne fleet in autumn 2022, with the four-seater model following in 2023.

British Airways to make Cornwall-Heathrow link even more successful

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After months of discussions and planning, Cornwall Airport Newquay launched British Airways’ Public Service Obligation (PSO) operation to and from London Heathrow on 24 July, following the administration of Flybe and the temporary absence of a vital connection to the UK capital.

“It was a big loss for the Airport when Flybe collapsed, as they had built up a strong market on their multi-daily service into London Heathrow following the switch from London Gatwick last year,” comments Pete Downes, Managing Director, Cornwall Airport Newquay. “Between March 2019 and March 2020, the Heathrow link carried over 163,000 passengers. The flight operated with an average load factor of nearly 80%, clearly demonstrating its popularity.”

The UK’s flag carrier has launched the route at a time in which people are looking to return to summer holiday breaks, and businesses are starting to pick up again following the restrictions put in place during the recent COVID-19 pandemic. “July has historically been the peak month for Newquay-Heathrow traffic, with a load factor of 91% this time last year informs Downes. “With people now looking to take a long-overdue summer break, this is the perfect time for British Airways to introduce its brand to the service. We look forward to working with them to establish this link into Heathrow and continuing to push the message of how the route not only opens up Cornwall to the capital, but the world.”

While the previous service had offered limited code-share connection opportunities via Heathrow’s Terminal Two, the offering by British Airways opens up many more opportunities for people to reach all corners of the world with a seamless process at Terminal Five. “British Airways offers a huge network of destinations from Heathrow in the summer, creating a lot more variety for the Cornish community wanting to explore the world, at the same time opening many new markets for our local business community and advancing inbound tourism potential,” highlights Downes. “It is this level of service which sees the UK’s national carrier elevate the product offering substantially from anything that has been available to our passengers previously.” British Airways will operate flights to Cornwall Airport Newquay daily using its fleet of A320s.

Editor’s Comment: Masking a problem, or making an issue?

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For those passengers now willing or able to fly to their desired destinations, they now face myriad checks and new processes prior to boarding their flight to stop the spread of COVID-19, yet a number of them have hit the headlines and been removed from the cabin for not wearing a face mask.

As cabin staff around the world finally get some standardised safety protocols to work with, numerous scientific studies have been released to the media related to the pandemic and how the airliner industry will take years to recover. I don’t agree with this, as has been demonstrated by the rapid progress of some airlines in getting back to regular service. But there are occasions when one scientific study causes a pause for thought. In this case it was a report by Massachusetts Institute of Technology (MIT) published on 8 July. Doctor Arnold Barnett, the George Eastman Professor of Management Science and Professor of Statistics at MIT Sloan School of Management, showed that a blocked middle seat could reduce the risk of contracting COVID-19 from a nearby passenger by around 50%. He went on to prove that when aircraft are full, the risk was estimated to be one in 4,300. While with the middle seat empty, that would go down to one in 7,700, which is nearly half that of a full flight. The study assumes that every passenger is wearing a mask prior to boarding.

While I find that these studies are certainly worth reading, the complex nature in the way they are often presented to the wider public can be confusing, with many individuals simply not having the time to wade through paragraph after paragraph simply to get to the conclusion, which seldom ends with a categorical action plan of dos or don’ts.

Other studies have also capitalised on the possibility of contracting the virus whilst flying. But, all of them, no matter how they’re presented have come to the same conclusion. Providing that the wearing of face masks is adhered to, flying is not currently a very high-risk activity. Without a face mask, the risk is very similar to ignoring the current advice in a confined public area.

It’s simply using common sense, adhering to pre-flight guidance, listening to the cabin crew and following their advice, and hopefully, as a regular passenger, you have been doing that for years already.

Editor’s Comment: Further battles ahead for a weary Boeing…

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I have touched on Boeing’s 737 MAX many times in these editorial comments and, to be honest, I had hoped that the next time I covered the subject it would be to announce that the aircraft was due to enter regular service once again, following its successful flight tests. But it appears that that is not the case and Boeing’s reputation continues to take a hammering. It has emerged that the aircraft manufacturer had failed to submit certification documents to the FAA, back in 2016, on the modification made to MCAS installed on the 737 MAX. The MCAS system has the capability of lowering the airliner’s nose automatically, under certain flight conditions.

It has now emerged in a report, released on 1 July 2020, by the US Department of Transportation Inspector General’s office that FAA flight test personnel were aware of the change, but “key” agency certification engineers and those staff responsible for establishing if any additional levels of pilot training were necessary told the Inspector General’s office that they were not informed.

Additionally, the report revealed that as Boeing’s safety analysis did not assess system-level safety risks as significant, so company engineers designed MCAS to rely on data from just one aircraft sensor on the MAX. However, Boeing did not relay to the FAA the formal safety risk assessments related to MCAS until November 2016 and January 2017, a delay of up to four and five years respectively into the five-year certification process. Senior managers with the FAA told the Inspector General’s office that “it isn’t unusual” for aircraft manufacturers to complete and submit a safety assessment near the end of the approval process, so this did not raise any concerns.

As Boeing presented the software as a minor modification to the 737’s existing speed trim system that would activate itself only in a limited, highly specific condition, the FAA did not focus too heavily on the MCAS system during its certification process. The result is that a thorough evaluation of the system did not take place between either the engineers within the FAA or Boeing. The FAA focused its attention on what it thought were the high-risk areas on the aircraft, such as the larger engines, fly-by-wire spoilers and modifications made to the undercarriage.

It has been explained as a miscommunication, a lack of clarity, or Boeing allegedly trying to conceal something, in a desperate race to remain ahead of its greatest rival Airbus, which was effectively taking orders away from the company with its new models.

While this has often been stated as a wake-up call for the entire aviation industry, I believe it to be regarded as one of the most significant events in aviation history. The lessons learnt from this need to be remembered and drummed into the next generation of aircraft designers, engineers and CEOs who will always put safety above profit.

Embraer’s 1,600th E-Jet delivered to Helvetic Airways

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On 1 July, Embraer celebrated the delivery of its 1,600th E-Jet, an E190-E2. Helvetic Airways of Switzerland received the milestone aircraft. Airlines and leasing companies from some 50 countries have added Embraer E-Jets to their fleets since the first-generation jets entered revenue service in 2004. The new, highly fuel-efficient second-generation E-Jets family, the E2s, started flying with airlines in 2018.

“It’s an honour in my new role as President and CEO of Embraer Commercial Aviation to deliver this landmark aircraft. It’s a tremendous milestone in the E-Jets program and in the company’s history,” said Arjan Meijer. “Over the years I have been personally remarkably close to Helvetic and their E-Jets fleet planning project. Everyone at Embraer is extremely proud to see such a renowned airline flying our 1,600th production E-Jet.”

Helvetic Airways is currently transitioning from a fleet of first-generation E-Jets to E2s. The carrier received its first E190-E2 in October 2019 and has added four more since as part of its fleet renewal program. Helvetic flies the airplanes in a 110-seat single-class configuration on domestic and international routes. The carrier has firm orders for 12 E190-E2s and purchase rights for a further 12 E190-E2s with conversion rights to the E195-E2, bringing the total potential order to 24 E2 aircraft.

“We are especially proud to receive an E2 aircraft in these challenging times for our industry,” adds Tobias Pogorevc, CEO of Helvetic Airways. “And it’s a genuine privilege to share this special moment with Embraer. We have received positive feedback on the E190-E2, from our passengers and our crews since we introduced it into our fleet. We could not be happier with the aircraft’s performance. The fuel burn is even lower than expected, which makes the airplane even more environmentally friendly. And we’re looking forward to resuming operations soon – with our milestone E190-E2 as well.”

Editor’s Comment: I’m stuck in the middle with you

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Airlines are in a state of confusion as to whether they should block the middle seat. Some airlines have totally committed themselves to the new configuration to bring social distancing to the cabin, while others have made half-hearted attempts. An indication of what airline CEOs are having to juggle with is demonstrated by the current problem carriers are facing in the United States. American Airlines is joining United by easing social distancing guidelines ahead of the Independence Day (4 July) holiday weekend. From mid-week, flights can operate at full capacity.

It’s a dilemma that also has to be practical. No airline can operate its aircraft when they are just 60% full, for any long duration of time. Many airlines are prepared to resume flying but have capped bookings at between 60% and 70%.

In contrast to American Airlines and United, Delta and Southwest Airlines have pledged to keep the middle seat free until at least 31 September, and JetBlue is following suit until the end of the month.

It’s going to be an interesting exercise for these carriers, as COVID-19 cases continue to rise in the United States.

In Europe, LCC and regionals continue to state that social distancing will not work onboard aircraft, but they have introduced all the practical measures they can to get back into the air, such as leaving the middle row free.

IATA estimates airlines have to hit 87% of filled capacity for a flight to break even and blocking the middle seat prevents flights from getting close to this target. Flights across Europe are slowly resuming following tough negotiations to establish air bridges that will enable passengers to avoid two weeks of self-quarantine when returning home. The demand for seats on aircraft has reached a fever pitch, with people eager to enjoy some semblance of a summer holiday. With the need to reclaim lost revenue and passengers queuing up to fly, just how long will the vacant middle seat ruling stay in place?

Editor’s Comment: Plans, patience and PPE

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It might be an issue for more airlines in the future, but Qantas is the first to find itself in a rather unusual dilemma. The airline is keen to avoid involuntary layoffs of aircrew, and, by the end of the month, is trying to come up with a plan to avoid such action.

This was announced to Qantas’ pilots directly on 22 June, according to Reuters. If the airline sacked its flight crews in the coming months, it would be a “failure”, stated the CEO of Qantas International, Tino La Spina.

But La Spina stressed that there must be flexibility within the workforce, including early retirements, voluntary layoffs, and a possible pilots’ salary reduction for the Australian operator to avoid flight crew redundancies over the next few months.

Following the announcement by the Australian government, that it may not reopen the country’s borders until 2021, Qantas confirmed that it had cancelled all of its international flights through until late October. The sole exception will be flights to New Zealand since the two nations plan to establish an air bridge over the Tasman Sea.

But in an ironic twist, Australia’s regional flights have never been so popular as Qantas and its low-cost subsidiary, Jetstar, have launched a substantial seat sale campaign. The LCC set new records, according to a press release, while bookings for Qantas’ regional flights have doubled in number.

Part of this rise can also be blamed on the collapse of Virgin Australia earlier in the year, but I wonder if we’re going to see a similar pattern across Europe.

Europe’s regional and LCCs are slowly getting back into the air albeit with a deluge of conflicting cleaning instructions. They are also having to contend with the need to ensuring social distancing measures are adhered to and that passengers wear their masks appropriately during a flight.

Every airline CEO is keeping a wary eye on what everyone else is doing and how they are coping. We’re only in the early stages of getting back to normal, but it’s clear that these new actions will become routine and familiar to anyone who has to fly for work.

While we may find things slightly inconvenient, spare a thought for the air and cabin crews who’ve had to practice and maintain these new procedures on a daily basis while worrying if they’d have a career to return to. A bit of patience will keep us all safe when we fly for work or pleasure over the next few months.