Ravn Air’s bankruptcy impacts Alaska’s remote communities

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According to simplyflying.com in a message dated 27 May and posted to its official website, Ravn Air announced that the US Bankruptcy Court had approved the airline’s liquidation of assets. The regional Alaskan carrier filed for Chapter 11 protection on 5 April, following a 90% drop in bookings and revenue due to the arrival of COVID-19. But, the company and its services were critical for many remote communities in Alaska.

According to local news reports, Alaskan residents of some remote arctic villages are unable to receive their supplies as a result of Ravn Air’s shutdown. This was the case for Atqasuk resident and tribal-coordinator Millie Frankson, who had a Can$535 order that was supposed to be flown in.

Instead, Frankson had to drive two hours on a makeshift road across the ice to reach the city of Utqiagvik, where her purchase was stored. Commenting on the fact that this is not always possible, Frankson said, “I was lucky enough that the ice road was still open,” adding “[Ravn’s closure] was just a big shock to the whole North Slope Borough. Like, how are we gonna get our food, our mail, our medical needs?”

Ravn Air was only given a few hours notice before it had to shut down its operations on 4 April, with caught many residents unawares. With the airline grounded, more than 115 Alaskan communities have had to make other arrangements in order to receive supplies. 570 News reports that nearly all the communities are accessible only by plane or boat as 82% lack road connections, according to the state’s transportation agency. Furthermore, for about 20 villages, Ravn Air was their sole air service provider.

A message on the airline’s website stated that is a buyer for the operator could be found, then services would resume, but with the filling of a Chapter 11 bankruptcy this is now unlikely.

The latest update on the Ravn Air Group’s wesbite states that it has been conditionally approved by the US Treasury to move forward and seek payroll grants under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Payroll Support Program. This assistance will help pave the way for buyers who are seeking to purchase the entire Air Group, maximise creditor recoveries, and enable a successful exit from Chapter 11 that will preserve Alaska’s largest and most vital regional air carrier and the many jobs and essential air service it provides.

INFORM GmbH’s GroundStar optimisation software chosen by IndiGo

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INFORM GmbH (INFORM), a leading global provider of advanced optimisation software for the aviation industry, announced that it has entered into an agreement with InterGlobe Aviation Limited (IndiGo), a LCC airline operating out of India. It will provide its comprehensive optimisation software suite, GroundStar (GS) to IndiGo, to enhance the airline’s workforce management processes. With a fleet of over 250 aircraft, IndiGo is India’s largest passenger airline and holds approximately 47.5% of the market share in the country.

Specifically, IndiGo will be using INFORM’s GS Planning, GS WorkforcePlus and GS RealTime modules, which provide a strong value proposition by supporting aviation companies to optimally plan, schedule and allocate its manpower and equipment resources.

“We are excited to work with one of the most dynamic airlines in the world,” says Altay Fellah, INFORM, Director Business Development Aviation. “Our ability to provide real-time agility to workforce and equipment scheduling challenges makes us a perfect match for IndiGo’s fast-growing operations. INFORM is a perfect partner for low-cost carriers that want to stay lean while they grow, yet still deliver superior on-time performance and customer service. Many low-cost airlines perceive us as a supplier to mainly large flag carriers. I believe our partnership with IndiGo will change this perception. Our system provides value to carriers and service provider of all sizes,” Fellah adds.

Once the solution is operational across all stations, IndiGo will begin deriving benefits from the enhanced planning capabilities GroundStar provides in terms of automation, improved operational visibility, enhanced service quality and customer satisfaction.

Editor’s Comment: Knowing a better way than a knee-jerk response

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It’s been an interesting few weeks watching the countless announcements from airlines as to how they are treating their staff during the COVID-19 crisis. For those of us reporting on news within the industry, barely a week has gone by when we are not publishing a story on another regional or LCC furloughing staff or simply letting them go. While the goal for many airline CEOs is to ensure the long-term future of their airline, there does appear to be an unhealthy outlook in the way certain airlines made the announcement to its staff. From pilots to cabin crew, all were let go due to the lack of demand, particularly in Europe, with swathes of staff, no matter how senior or junior, pushed out of a job that for many had been a lifetime goal.

Perhaps many of these operators could have taken a lesson from the current co-operation between Delta Air Lines and its pilots’ union in trying to avoid furloughing more than 2,300 pilots. Although still a significant number, this figure could have been far higher had it not been for the airline shifting around 7,000 pilots to various bases and different aircraft types. And yet the airline is still trying to minimise additional furloughs. Delta and the pilots’ union allowed its members to openly bid for other positions across its network and on different routes in order to “keep the team together”. At the time, the Chairman of the Delta Master Executive Council at the Air Line Pilots Association, Captain Ryan Schnitzler, stated:

“Undoubtedly, processing the largest surplus bid in our history and how it impacts you and your family has weighed on us all since it was posted. No matter where you sit on the seniority list, the impact of being displaced – and its impact on your quality of life – is stressful. Some of you may have to commute for the first me in your career or slide back into the right seat after a recent upgrade.”

Obviously, Delta still has an opportunity to further reduce furloughs and travel still has to pick-up, which allows the operator to bring back even more pilots, but at least one airline out there is simply not kicking its staff out of the terminal in a knee-jerk response.

easyJet feels the squeeze and cuts its workforce

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easyJet has announced that its to trim staff levels by as many as 4,500 workers as a cost-saving measure. The airline stated that 30% of its workforce could go, along with a significant number of its aircraft. This comes just days after shareholders voted against Sir Stelios Haji-loannou’s bid to remove senior executives from the company,

The UK LCC has not revealed how many staff will go, but given that its current staff level is 15,000, 30% would mean around 4,500 employees. In a statement seen by simpleflying.com, Chief Executive Johan Lundgren said:

“We realise that these are very difficult times and we are having to consider very difficult decisions which will impact our people, but we want to protect as many jobs as we can for the long term.

“We remain focused on doing what is right for the company and its long-term health and success, following the swift action we have taken over the last three months to meet the challenges of the virus.”

The airline is planning to restart flying on 15 June, but with a significantly reduced network of flights. Currently, the UK government’s proposal to quarantine arriving passengers from 8 June has dashed any hope easyJet may have had to capture some summer holiday traffic.

CPaT Global releases its new Airbus A220 aircraft systems course

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As the Airbus A220 enters widespread service, CPaT has announced the release of its new A220 Aircraft Systems Course. This in-depth and interactive distance learning course provides an advanced teaching experience for A220 pilots and is available now for training.  CPaT’s team of highly qualified subject matter experts and course developers created a detailed course to support the growing number of A220 operators and pilots.  CPaT’s A220 Aircraft Systems Course can be modified or “tailored” to meet your unique training and regulatory requirements.

Captain Greg Darrow, Vice President of CPaT Global, stated that, “CPaT has developed this comprehensive training course for pilots flying the A220 due to growing demand from our clients and the airline industry.  Our training syllabus provides detailed and interactive instruction that keeps pilots engaged in remote learning.  Clients have responded quickly to our new offering and CPaT has already delivered the course to airlines in Asia and Europe.”

Editor’s Comment: What a difference a day makes….

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Well OK, maybe it’s slightly longer than an actual day, but it doesn’t seem too long ago that LARA’s February/March issue was reporting on the potential of Mitsubishi’s SpaceJet in the competitive regional jet market. Now it appears that Washington State, where the jet was undergoing flight testing at the Moses Lake Flight Center in Renton, is set to lose its investment from the Japanese company, with the announcement by Mitsubishi Heavy Industries on 22 May that it is set to close the centre and headquarters at Renton. Although this press release was quickly followed by the statement that a small team will be kept on site to maintain some of the aircraft.

The move is viewed as Mitsubishi Heavy Industries (MHI) long-term goal of consolidating its commercial aircraft operations, which will also see a reduction in the development budget for the SpaceJet due to the COVID-19 impact which has decimated the commercial airline industry.

By shutting down operations in Washington State, MHI will now consolidate all SpaceJet development at Nagoya in Japan. The four test aircraft at Moses will be put into storage and will receive maintenance as and when required. The shutting down of the facility will in some way compensate for the US$275 million loss MHI announced in March but does not help with the $2.4 billion MHI spent on the SpaceJet last year.

The change in strategy by MHI may also see the suspension of the M100’s development, with a focus across the company now on reducing costs.

MHI said: “The COVID-19 pandemic presents an unprecedented challenge for society as a whole, and there are parts of MHI Group’s business that are already facing significant impact, especially in industries like commercial aviation… MHI Group is working on measures to help us overcome this crisis.”

As to the future of the SpaceJet, let’s hope that by the end of the day, this great looking jet, does indeed have its time to shine in the land of the rising sun.

Norwegian receives much-needed loan

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Norwegian has announced that it has a new series of owners, has completed its much-needed restructuring and has secured a US$271 million governmental support loan.

Over the last few years, the airline has been fighting numerous financial issues and was hoping to shift into profit in 2020, before COVID-19 struck the airline industry.

The uncertainty across the industry, the lack of passenger demand and grounding of its fleet resulted in the airline quickly running out of money and brought it close to collapse.

With a secure outlook now in place through bondholders, lessors and shareholders agreeing to a US$1.27 billion debt conversion and share sale. This has helped boost Norwegian’s equity which has met a key condition of the agreement from the Norwegian government.

“Now we can access the state loan guarantee, we can continue to transform the company,” said Norwegian’s CEO Jacob Schram.

The restructuring means that lessors AerCap will now hold 15.9% and BOC Aviation 12.67%.

Despite the challenges ahead over the next few months Norwegian now has a firm base to move into the future.

Rolls-Royce reorganises amid COVID-19 impact

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As Rolls-Royce struggles to deal with the impact of COVID-19, it has revealed that its commercial aerospace division will take several years to recover to the levels seen at the start of 2020. In order to address the problem and strengthen the financial resilience of the business, the company has announced that at least 9,000 employees from its global workforce of 52,000 will be made redundant.

Warren East, Rolls-Royce, CEO said: “This is not a crisis of our making. But it is the crisis that we face and we must deal with it. Our airline customers and airframe partners are having to adapt and so must we. Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce. But we must make difficult decisions to see our business through these unprecedented times. Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there. We have to do this right, which means we will work closely with our employees and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected, and treat our people with dignity and respect.”

The savings generated from this reduction in staff along with cuts in production facilities, property, and other indirect costs, will reduce expenditure across the company by an anticipated annual saving of more than £1.3bn, of which the reduction in staff salaries will contribute around £700 million. The restructuring costs related to other actions will likely generate a saving of around £800 million.

Warren East added: “The strategic choices that we have made over the last few years have helped us to respond rapidly to COVID-19 and the synergies between our divisions leave us well placed to capitalise on the long-term potential of our markets. The world on the other side of this pandemic will need the power that we generate to fuel economic recovery. I absolutely believe the call for that power to be more sustainable will be stronger than ever. This plays to our strengths. We must ensure that we are able to continue to innovate and play our leading role in enabling the vital sectors in which we operate to achieve net-zero carbon emissions. We have emerged from troubled times before, to achieve incredible things. We will do so again.”

 

 

A statement from HMG Aerospace

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As the COVID-19 pandemic continues, we find ourselves feeling increasingly proud of the industry’s ability to adapt, respond and become ever more resilient to the critical challenges that confront it. Although the long-term effects of this crisis will reach far and strike deep, many within the industry have already taken the first few steps back towards normal – or at least “new normal” – service. Ryanair has announced that as of July 1, it plans to reinstate 40% of its scheduled service. Wizz Air intends to increase operations from Gatwick Airport, and Boeing has asked its largest supplier of 737 MAX parts to restart manufacturing. Whilst many airlines have had to reshape and resize their operations, this forced restructure gives them the opportunity to strengthen their business model and consolidate their fleet. They will rebuild on stronger and hopefully greener foundations.

The pandemic has created a more charitable and democratic aviation industry. The web is awash with news stories detailing the contributions made by businesses around the globe to the fight against COVID-19. From helicopter manufacturers like Leonardo supplying HEMS helicopters for aircraft availability and mission effectiveness, to airlines like flydubai operating flights across four continents to repatriate citizens, the industry has shown willing to rally round and support those in need. In addition, there has been a significant increase in companies seeking to engage with their customers, offering them the chance to directly influence future business decisions. We have been particularly impressed by a recent Eurowings initiative, whereby the company utilises social media to ask its customers what services they would like the airline to provide both during and post-COVID-19. Discussions and decisions are being released from the confines of the corporate boardroom and presented to the people who will be most affected by them: the passengers.

Taking inspiration from the industry we serve, here at HMG Aerospace we have adapted in order to continue delivering. We have taken advantage of the various digital services available to ensure that our products are published on schedule and that our editorial content is topical, rich and often exclusive. From dynamic digital magazines to video interviews with senior aviation executives; from digital marketing solutions to news websites and weekly newsletters, not forgetting our participation in pioneering online broadcast events like FlightPlan by Inmarsat Aviation and APEX, HMG Aerospace remains as committed as ever to supporting and reporting on the industry.

On behalf of all the team at HMG Aerospace, keep safe and well.

Best wishes,

Mark Howells and Becky Howells

Editor’s Comment: “They’re regionals Jim but not as we know it…”

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The first signs that Europe’s regional airlines are slowly getting back into the air has been reported by numerous media organisations, although concerns over how and where passengers will be seated, and what will actually happen during a flight remain uncertain. For some operators, the changes are even bigger. A restructuring of its fleet means airBaltic is resuming its services as an all-Airbus A220 airline and has already started flying between the Baltic capitals of Riga, Tallinn and Vilnius. Further destinations in Europe will be added in the coming weeks, the airline has revealed, but only if suitable precautions are in place.

With the need to get back into the sky and generate income, it’s a brave decision by airBaltic to go all-A220. It means that the airline has effectively lost 40% of its fleet, but perhaps it’s the ideal time to make such a move, with air traffic in Europe only slowly emerging from a global grounding. On the other hand, the airline’s fleet of Dash 8-400s and 737-300 aircraft was ageing and, for an airline, finding a good time to retire its old aircraft is always a fine balance based on profit and passenger demand. But the COVID-19 grounding has effectively allowed airBaltic the time to remove the 737-300s and Dash 8-400s without creating any operational backlash, and in the process allowed the airline to re-enter the market leaner and more efficient than ever before.

Might we see similar moves by other regional carriers as they seek to recover lost revenues? The need for a vast fleet of single-aisle aircraft is unlikely to be necessary anytime soon, with many LCCs and regional operators choosing to take a slow, gradual build-up to their schedules, which is unlikely to reach 2019 levels before the end of 2020. So, I wonder if airBaltic’s bold new plan of a leaner if not necessarily meaner approach may well be copied by other carriers as they also seek to go for a single type.