Airbus to transform its European set-up in aerostructures

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Airbus has provided more details to its social partners during a European Works Council (SE-WC) meeting about the Company’s ongoing assessment of its industrial set-up in Europe, notably regarding aerostructures activities in France and Germany.

Airbus has reaffirmed its intention to build a stronger aerostructures assembly value chain across its industrial system to its social partners, and considers aerostructures assembly as core to its business. Airbus presented its plans to create two integrated aerostructures assembly companies at the heart of its industrial system in order to reinforce its value stream management and prepare the Company for its short- and long-term future.

As part of these plans, and upon successful completion of the ongoing social process, the new company in France would bring together the activities currently managed within Airbus in Saint-Nazaire and Nantes together with those of STELIA Aerospace worldwide. Another company in Germany would bring the activities of Stade and Structure Assembly of Hamburg together with those of Premium AEROTEC in Nordenham, Bremen and partly in Augsburg, while rebalancing activities towards the upper part of the value chain and reviewing its involvement in the manufacturing of detail parts.

These two new aerostructures assembly companies, both wholly owned by Airbus, would no longer be suppliers to Airbus but become integrated within the Airbus perimeter, simplifying both governance and interfaces in a new industrial setup. Their distinct status would also enable them to focus on their industry segment and be leaner and more agile, fostering competitiveness, innovation and quality to the benefit of the Airbus programmes of today and tomorrow.

Airbus also intends to create a new global player in the detail parts business, anchored in Germany. Born out of today’s Premium AEROTEC, this new entity, with its scale and advanced technologies, would be empowered to capitalise on the significant long-term growth prospects with Airbus as well as external customers, on both civil and military platforms.

In Spain, Airbus continues to work on solutions with its social partners to optimise the current industrial and aerostructures set-up in the Cádiz area in order to ensure its viability, resilience and competitiveness for the future.


Flybe to fly again…

By Featured, General News

Flybe has moved closer to its reentry into operations with the completed purchase from new owners Thyme Opco.

Having operated at 81 airports for domestic UK routes outside London, the Exeter- based had a strong presence at UK airport bases such as Southampton, Aberdeen, Belfast City, and Manchester before the wake of the coronavirus pandemic. The carrier entered administration in March 2020 resulting in the loss of 2.400 jobs and the collapse of its route network.

However, Flybe sold its business and certain assets to Thyme Opco on 4 November, 2020, and with the finalisation of its new owner on 14 April, Flybe has set its sights to return to operation in the summer season of 2021.

Flybe’s new owners Thyme Ocpo – linked with Cyrus Capital – will now be renamed Flybe Limited.

“We are extremely excited to announce the conclusion of almost six months of dedicated hard work by the great team at Flybe, the UK Civil Aviation Authority, the European Commission, and the many others who made this announcement possible,” said a Flybe Limited spokesperson. “Subject to further success with vaccinations and relaxation of travel restrictions, we plan to launch a new and much-improved Flybe sometime this summer on many of our former routes where there remains a critical need for a strong, reliable, and customer-focused airline.”

The regional carriers return to service intends to reestablish regional connectivity across the UK and EU and tap into the local communities previously served by the airline, but with a reduced fleet.

“While our company will initially be smaller than before, we intend to grow, create valuable jobs, and make significant contributions to essential regional connectivity in the UK and EU,” said Flybe Limited spokesperson.


Boeing finds more B737 MAX issues, 16 operators affected

By Featured, General News

Several airlines around the globe have temporarily grounded their B737 MAX jets after Boeing identified “a potential electrical issue” in a specific group of the aircraft. The US manufacturer said in a statement on 9 April that it had recommended to 16 unspecified operators that they verify that their B737 MAX have a sufficient ground path for a component of the electrical power system.

“We are working closely with the US Federal Aviation Administration on this production issue,” it said. “We are also informing our customers of specific tail numbers affected and we will provide direction on appropriate corrective actions.”

Sources familiar with developments told Reuters that around 90 MAX around the world are affected. David Seymour, CCO of American Airlines, told staff in an internal memo seen by the news agency that Boeing had traced the issue to a production change made in the installation process.

“[It] occurred after our last aircraft was delivered before the fleet grounding in March 2019,” he said, adding that the issue affected 17 of AA’s most recently delivered B737 MAX.

Southwest Airlines said 30 of its 58 MAX were affected, while United Airlines removed 16 of its 30 MAX from operation. Alaska Airlines has grounded all four of its B737-9s. In Europe, Blue Air has grounded its recently delivered B737-8, reported, as a precaution even though Boeing has yet to notify it on whether its jet is among those affected.

Domestic routes to resume as London City Airport gears up for the British summer

By Featured, General News

London City Airport has welcomed the restoration of key regional routes, with flights to resume to Edinburgh, Glasgow (both with British Airways) and Dundee (with Loganair), re-establishing important domestic connectivity and tourism links between Scotland and the heart of London.

As momentum starts to build ahead of the summer and the potential restart of international travel, British Airways operated by BA CityFlyer (BACF), will resume flying to Edinburgh on 15 April and Glasgow from 17 May. Both routes will start with two rotations per week, but as the UK gears up for the summer holiday, the expectation is that frequencies will increase.

Separately, Loganair has announced that it will resume operating the only direct flight between Dundee and London from 16 April. It too will operate with two rotations per week initially, enabling Dundonians to travel from the Tay to the Thames in less than two hours.

The reintroduction of Scottish flights from London City comes as travel restrictions between the home nations begin to ease, which will open up staycation opportunities in the three Scottish cities as well as nearby holiday destinations such as Loch Lomond, Gleneagles and the Borders.

The restoration of the Scottish services also comes ahead of the much-anticipated England vs Scotland football match at Euro 2020 which is taking place at Wembley on 18 June, enabling fans to travel quickly and safely into the heart of London.

Anne Doyere, Head of Aviation, London City Airport, said: “Regional air connectivity is vital for the recovery of aviation, tourism and the UK economy, which is why we are delighted that our airlines have restored key domestic regional routes with flights resuming shortly to Edinburgh, Glasgow and Dundee.”

“With travel restrictions to ease further in the coming weeks, many people will be eager to embark on a well-earned holiday or staycation within the UK. The speed, safety and convenience of London City Airport means we are well placed to welcome back our passengers when they are ready to fly again.”

Editor’s Comment: MAX, you’re back. Well…

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I had expected more coverage within the wider media concerning Boeing’s 737 MAX certification by the various aviation governing authorities worldwide. Still, although many of us within the industry knew it was taking place, I cannot recall seeing a mainstream news report announcing the aircraft’s return to service. Perhaps, given what occurred and the reasons for its grounding, this low-key, respectful approach was best. But, for those of us in Europe, where the MAX has yet to serve in the same numbers as North America, it is clear this is only a temporary measure with the announcement that British carrier TUI has become the first airline to receive a newly delivered 737 MAX aircraft. The jet flew from Boeing Field at King Country International Airport to TUI’s operating hub at Gatwick.

The new MAX, named Naples with registration G-TUMJ, has an all-economy 189-seat configuration, matching TUI’s older fleet of 737-800 aircraft.

The delivery flight occurred on 27 February and is significant in being the first delivery after Europe’s regulators lifted the ban on the type.
The TUI Group has purchased 72 Boeing 737 MAX aircraft in total and will be viewed as one of the key European operators of the 737 MAX, but only a few of these aircraft have been delivered due to the worldwide grounding.

It’s a familiar thought that I have mentioned before in LARA about how the wider public will react to flying on a MAX? But, given all that has occurred in the world since the two tragic accidents, which must never be forgotten, it appears that regional airlines and LLCs, and I expect those keen to get away after months of lockdown, will have confidence in Boeing’s baby. It is simply a case of whether the US aircraft manufacturer can edge itself into a more positive light with the general public. It’s going to be an interesting year for the US giant, as it finds itself on unfamiliar ground in terms of its reputation.

Editor’s Comment: Aftershock and adaptability…

By Featured, General News

After what has been a horrific year, and with the world potentially on the road to recovery in the fight against COVID-19, it appears that the recovery road might be far rockier for commercial airlines. With some of the big players within the industry, such as Cathay Pacific Airways, introducing new rotation rules for its crew members, which will mean after a 21-day shift, they will then have to self-isolate for two weeks at a designated hotel arranged by the airline, then be medically monitored for seven days, followed by 14 days off work. With a predicted cost of US$52 million per month, how long this will be enforced remains unknown? It’s likely that only the larger airlines will be able to cope with such an onerous financial outlay. Given that many airlines are seeking to reduce costs, Thai Airways has announced that it would be cutting some executive positions as part of its restructuring plan. It will mean that around 240 employees will lose their jobs. However, the airline has sought voluntary redundancies and is currently embroiled with a ‘financial rehabilitation’ process that it has yet to submit to the Central Bankruptcy Court for approval.

While the ‘big boys’ may well be struggling post-pandemic to get their airlines back in the black and operating to a reasonable level, it could be either positive or negative for the smaller regional carriers. The saying ‘size isn’t everything’ may well be appropriate for these LCCs and regional outfits that can be far more responsive and flexible to commercial pressures. With the 737 MAX now cleared to return to service, many operators who struggled to maintain their fleet numbers during the worldwide grounding may well be in the best position of all to return to regular business. With passenger numbers set to increase by the summer, it’s a safe bet that many holidaymakers won’t be going long-haul and may well be relying on regional carriers to get their long-awaited ‘holiday sunshine fix’.

It’s going to be an interesting start to the year to watch the different business plans put into place by the various airline CEOs and discover who will be adaptable enough to finally take advantage of the good times when they finally get here for us all.

Editor’s Comment: Keeping their heads above the clouds

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As we are all patiently waiting to get vaccinated against the COVID-19 virus here in the UK, there are signs of a more positive vibe when taking to people, particularly within the aviation industry. While some may be overly optimistic as to when a ‘new normal’ returns, at least now we know it will.

For those that work within the commercial aviation industry it has been a tough time, with many pilots, cabin crew and airport service workers having to find alternative work and income far removed from their previous careers. Their stories are inspiring and no doubt prove that there’s a common thread that all these people share; that none are sitting around and feeling sorry for themselves.

An example of the strength of character of cabin crew can be demonstrated by Filipino Maurice Maureen Avila, who lost her flight attendant role during the pandemic and has now turned her hand to selling liquefied petroleum gas tanks to her neighbours. With some help from her family, she franchised her business and started delivering the gas tanks on a trolley.

“So instead of my usual trolley as a flight attendant, I started pulling trolleys with gas,” laughs Maurice.

Pilots have also been hit hard by the pandemic as well. Joe Townshend, one of the youngest qualified Captains at Thomas Cook Airlines, lost his job when Thomas Cook Airlines collapsed in 2019. No problem, soon afterwards, he joined Titan Airways. Unfortunately, this was in January 2020, just two months before the COVID-19 crisis struck.

“I remember thinking I can’t believe that this is happening again after such a short period. It had been three months and I was really excited to start a new job. I just couldn’t believe that in such a short time space I would have to look for a new job again. And this time it wasn’t just one company but the whole aviation industry was affected,” Townshend said.

After losing his pilot’s position, Joe still needed to provide for his family. Since the possibility to get back to the cockpit had been significantly curtailed by the travel restrictions, he took a job delivering shopping for a supermarket in the UK.

“I was grateful to have that job and some income.”

However, the former Captain started to look for wider horizons. Alongside the new job as a delivery person, Joe decided to set up his own business in the coffee industry. After nine months of preparation work, he launched his coffee roastery called ‘Altitude Coffee London’ and immediately attracted customers’ attention.

“It was something I had always dreamed of doing for several years and, in the situation when I had no job, I figured why not give myself a try. I spent last year building physical premises and building the brand. Now we are selling to our customers, which has been fantastic. We’ve had a very good response so far, with lots of orders and lots of positive reviews for our products. So, I’m really happy. It’s a fantastic experience,” said Townshend.

We all know the impact that COVID-19 has had on the airline industry and the people within it. I hope that those who loved working within the industry will all be able to return to their ‘dream’ jobs when passengers are allowed back and confidence returns. As many who have found themselves in similar situations to Maurice and Joe, it’s all been character building, and that can only be a benefit to passengers when we next see them in the cabin when all this is over.

Editor’s Comment: Rolls-Royce makes some tough decisions

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Leading UK engine manufacturer Rolls-Royce released a statement on 7 February that it plans to shut down its Civil Aerospace division for two-weeks this summer. The temporary closure is an effort to cut costs within this sector.

“As we continue to manage our cost base in response to the ongoing impact of the COVID-19 pandemic on the whole commercial aviation sector, we are proposing a two-week operational shutdown of Civil Aerospace over the Summer,” Rolls-Royce said in an emailed statement, that was seen by Reuters.

Although the shutdown is still awaiting approval from the company’s unions, Rolls-Royce plans to introduce further cost-cutting measures across its commercial aircraft sector according to the report.

Like many aircraft and engine manufacturers, the company’s profits have been hit hard by the impact of COVID-19, as the demand for new aircraft engines has reduced to a trickle.

The company had previously said that its cash outflow in 2021 would be worse than previously anticipated, as the new COVID-19 variants have prolonged the crisis in the aviation sector.

“More contagious variants of the virus are creating additional uncertainty,” Rolls-Royce said in a trading update published on 26 January. “In this environment, financial forecasts remain highly sensitive to changes in external conditions and, while we are continuing to drive cost reduction, our current forecasts indicate a free cash outflow in the region of £2 billion ($2.7 billion) in 2021.”

However, Rolls-Royce said it had about £9 billion ($9.7 billion) of liquidity it could make use of and that the company was “confident that despite the more challenging near-term market conditions we are well-positioned for the future”.

Despite the global vaccine programmes now taking place, it’s clear that if aerospace giants such as  Rolls-Royce predict that 2021’s recovery is still some way off yet, what does it mean for those myriad of smaller aviation companies – will they be able to survive for another year?



Editor’s Comment: Bagging a bargain airline…

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British Airways and Iberia is moving ahead with the purchase of Air Europa despite the impact of COVID-19, although the pandemic has cut the purchase price of the airline by 50%. Iberia, which will buy Air Europa on behalf of its parent International Airlines Group (IAG), will now only pay €500 million for its Spanish rival, which is a reduction of €1 billion in cash to which all parties agreed when the deal was first revealed in November 2019. Additionally, Iberia will defer payment until the sixth anniversary of the acquisition’s completion. Sources within IAG state that the contract will be completed by late 2021.

The contract had initially been due to be completed last year, but COVID-19 and a bailout of Air Europa by the Spanish government prompted the IAG to revise its conditions of the planned takeover with Globalia, the tourism conglomerate that owns Air Europa.

“This transaction is a great effort by all of us and is the best way to recover tourism, transport in Spain, and the Madrid hub,” commented Globalia CEO Javier Hidalgo.

According to IAG CEO Luis Gallego, who took over from Willie Walsh in September last year, belonging to a large group is the “best guarantee” to overcome current market challenges. “I am pleased that we have reached agreement with Globalia to defer payment until well into the expected recovery in air travel following the end of the pandemic and when we expect to be realising significant synergies resulting from the transaction,” he said.

IAG said it continues to believe that the Air Europa acquisition remains strategically important for the future of the group and positions the company to benefit from growth opportunities as the industry recovers.

The amended deal remains conditional on what IAG described as the “satisfactory negotiation” between Iberia and Spanish state-owned industrial holding SEPI regarding non-financial terms associated with loans provided by SEPI.  The acquisition also needs the approval of the European Commission.

It is a brave move by IAG, but also shows faith within the industry too. After months of doom and gloom, with the airlines asking for assistance and help from their governments, it appears that for some, its time for them to help themselves. There may well be a few bargain airlines that can be snapped up at a reduced price; it might well be a better alternative than collapsing. For others, such as Norwegian, it’s a major reassessment of their services.

While the opportunity for recovery might now be in sight for the commercial aviation industry, when we get there, it might well be very different with some operators under new management, while others will just be a memory.

Norwegian to focus on a strong European network

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Norwegian’s Board of Directors has today outlined a simplified business structure and dedicated short haul route network. With this plan, Norwegian can build a robust and solid company that will attract investors and continue to serve new and existing customers.

Norwegian has long been recognised as an industry leader in low-cost travel, winning numerous awards. The company will build on this foundation, focusing on its core Nordics business, operating a European short haul network with narrow body aircraft. The airline will continue to meet its customers’ needs by offering competitive fares across a broad range of domestic routes in Norway, across the Nordics and to key European destinations.

“Our short haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Jacob Schram, CEO of Norwegian.

The current plan is to serve these markets with around 50 narrow body aircraft in operation in 2021 and to increase that number to around 70 narrow body aircraft in 2022. Furthermore, Norwegian targets to reduce its debt significantly to around NOK 20 billion and to raise NOK 4 – 5 billion in new capital through a combination of a rights issue to current shareholders, a private placement, and a hybrid instrument. The company has received concrete interest in participation in the private placement. Norwegian has recently reinitiated a dialogue with the Norwegian government about possible state participation based on the new business plan.

“I am pleased to present a robust business plan today, which will provide a new start for the company. By focusing our operation on a short haul network, we aim to attract existing and new investors, serve our customers and support the wider infrastructure and travel industry in Norway and across the Nordics and Europe,” said Schram.

The COVID-19 pandemic has profoundly affected the entire aviation industry. Travel restrictions and changing government advice continue to negatively influence demand for long haul travel, and Norwegian’s entire Boeing 787 Dreamliner fleet has been grounded since March 2020. Future demand remains highly uncertain. Under these circumstances a long-haul operation is not viable for Norwegian and these operations will not continue. The consequence of this decision is that the board of directors of the legal entities employing primarily long-haul staff in Italy, France, the UK and the US have contacted insolvency practitioners. Norwegian will continue to assess profitable opportunities as the world adapts and recovers from the impact of COVID-19.

“Our focus is to rebuild a strong, profitable Norwegian so that we can safeguard as many jobs as possible. We do not expect customer demand in the long-haul sector to recover in the near future, and our focus will be on developing our short haul network as we emerge from the reorganisation process, said Schram. “It is with a heavy heart that we must accept that this will impact dedicated colleagues from across the company. I would like to thank each one of our affected colleagues for their tireless dedication and contribution to Norwegian over the years.”