Only 22 A220s to be used for airBaltic’s new plan

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Latvian carrier airBaltic has approved a new business plan called Destination 2025 CLEAN, which is intended to allow the airline to operate in a post-COVID-19 environment.

The updated five-year strategy includes several key points. One of them is fleet reduction. After global flight restrictions are lifted, airBaltic plans to operate just 22 Airbus A220-300 aircraft. This means that the airline will leave its Q400s and 737-300s on the ground.

“The new plan takes into account the reduced capacity for the years 2020 and 2021, while at the same time foresees a return to growth with up to 50 Airbus A220-300 aircraft by the end of 2023,” the airline said in a statement.

The airline aims to become a one-aircraft-type airline flying only Airbus A220 aircraft.

According to Martin Gauss, CEO of airBaltic, the situation is difficult, requiring “serious and clear decisions for positive business development”. Looking forward to 2025, the carrier estimates to see increases in passenger growth and revenue.

Abu Dhabi’s new LCC receives Air Operating Certificate

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Air Arabia Abu Dhabi, a new LCC of the capital city of the United Arab Emirates, has been awarded its Air Operating Certificate (AOC) to begin commercial operations.

Air Arabia Abu Dhabi is a joint venture established by Etihad Airways and Air Arabia as a new independent airline that will operate from Abu Dhabi International Airport.

“Air Arabia will continue to work closely with the General Civil Aviation Authority (GCAA) to finalise the launch date as market conditions improve and the skies are open again,” said Air Arabia in a statement.

The airline’s positive attitude demonstrates the importance of commercial aviation within the UAE and the industries that support it in the nation.

The rise in low-cost carriers in the region will also see Wizz Air Abu Dhabi take to the air, despite the global halt in air operations. Wizz Air is still planning to launch operations in the region shortly after the control measures are lifted.

Boeing halts tie-up with Embraer

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Boeing has announced that it has stopped its planned strategic partnership with Embraer and terminated its Master Transaction Agreement (MTA) with the Brazilian aircraft manufacturer.

The joint venture would have seen “Boeing Brazil – Commercial” created, with Boeing expected to own 80% of the new company, with Embraer having the remaining 20%.

By the end of 2019, all the appropriate governing bodies had approved the merger, with only the European Commission holding up proceedings, but it was due to approve the process shortly.

Now Boeing in a press statement has revealed that: “Embraer did not satisfy the necessary conditions.”

“Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We aimed to resolve those by the initial termination date, but it didn’t happen,” said Marc Allen, Boeing’s President of Embraer Partnership & Group Operations.

However, Embraer has a different view on the agreement and confirmed that it received a notice of termination of the MTA.

The Brazilian aircraft manufacturer said it had achieved all of the conditions required by 24 April, and believes Boeing “wrongfully terminated the MTA, that it has manufactured false claims as a pretext to seek and avoid its commitments to close the transaction and pay Embraer the US$4.2 billion purchase price.”

Embraer claims Boeing is at fault in delaying the transaction because of its financial situation with the 737 MAX grounding and the damage it has caused to the company’s reputation.

Kuwaiti lessor files suit against Boeing

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Kuwaiti aircraft lessor Alafco has issued a suit against Boeing for the failure to return payment on undelivered 737 MAX 8 aircraft, according to website AINonline. The filing claims rights to return US$336 million in advance payments for the first 10 of 40 aircraft on order, the first delivery of which Boeing had set for March 2019.

Although Boeing notified Alafco of delays with the delivery of the aircraft, it has not given the lessor an estimate of the revised schedule.

The filing indicates that Alafco contacted Boeing terminating the aircraft scheduled for delivery in March on a non-excusable delay. Boeing countered in a letter dated 3 December that it “respectfully disagrees” with Alafco’s assertion of non-excusable delay rights and refused to return the payment. On 6 March 2020, Alafco cancelled the orders for all 40 aircraft after Boeing failed to state an anticipated delivery of the initial 10 MAX aircraft.

Alafco claims a provision in the contract that limits Boeing liability in the event of an excusable delay does not apply, stating that responsibility for the grounding of the airliner is the fault of the manufacturer.

Austrian revises its fleet amid COVID-19 pandemic

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The effects of the COVID-19 pandemic is impacting airlines around the world, the latest of which is Austrian Airlines, which has announced that it’s taking steps to secure its future business operations, which halted due to a worldwide grounding since 18 March.

“This year Austria’s flag carrier predicts a 25-50% drop in demand. A maximum of 75% of the pre-coronavirus level is expected by the end of 2021”, the airline said in a statement.

As part of the Lufthansa Group, the airline operates 80 aircraft and in order to continue future operations with an optimal fleet, which can meet a decreased demand, Austrian has begun retiring a number of types.

Last year, Austrian had begun withdrawing its 18 Dash Q400s. Now, the company has decided to retire seven A319s and decomission three of its six Boeing 767s.

“Since it is mainy smaller aircraft that are being decommissioned, this corresponds to a capacity reduction of around 20%” stated an airline spokesperson. Austrian is not expecting to begin flying again before 17 May.

Heston MRO adds Part 147 Technical Training Organisation

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Heston MRO, the largest independent MRO organisation in Australasia, has announced that it’s added Part 147 Technical Training capability to its range of services.

On 7 April, Australian Civil Aviation Safety Authority (CASA) approved Heston MRO MTOE and issued a Part 147 Approval Certificate, allowing Heston MRO to deliver technical training courses, conduct examination, as well as issue completion certificates to qualifying trainees.

The launching Part 147 capability covers Airbus 318/319/320/321 CEO and NEO generations with all types of engines, including Theory and Practical training courses. The rapid course expansion is planned to include A318/319/320/321 Difference Courses, Boeing 787- 8/9/10 Type Courses, and others.

The newly acquired Part 147 approval allows Heston MRO to conduct training courses via Virtual Synchronous Delivery. This means trainees can be located in any one of Heston MRO’s training facilities in either Brisbane, Sydney, Melbourne or Perth whilst the instructor can be located at a different training facility, delivering training via a video conference platform.

“Despite the challenging times in Covid-19 environment, Heston MRO is staying focused on its strategic direction to become a true Total Care partner for operators in Australasian region’, comments Chris Holmes, HR and Training Manager of Heston MRO. ‘Our newly acquired Part 147 Technical Training capability provides the needed flexibility in upskilling of our own staff, as well as opportunity to fill the niches for third parties in the aviation skills market in Australia.”

With 20 years of operating history and airside presence in Sydney, Melbourne, Brisbane, Perth, Adelaide, and other airports in Australasia, Heston MRO is the largest independent MRO organisation in the region. Besides Line Maintenance, recently launched Components and Technical Training capabilities, the company is currently adding certification for Engine On-Wing technical services. The resulting Total Technical Care services is offered to airlines, leasing companies, and OEMs in the Australasian and South West Pacific region.

MAX receives a further blow from lessor GECAS

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Boeing’s 737 MAX series has taken a further blow with the announcement that GE Capital Aviation Services (GECAS) has cancelled its order for 69 of the type. The move is seen as part of a “mutually agreed rebalance” by the lessor during the pandemic crisis.

“We have had ongoing conversations with GECAS regarding their 737 MAX portfolio and the impacts from the past year,” said Boeing in a statement. “We have come to an agreement with GECAS to restructure their MAX order book. In light of the COVID-19 pandemic, this adjustment helps to balance supply and demand with market realities, especially in the leasing channel. Additionally, since last year, where it has made sense, we have adjusted our production skyline to the fact that we are building fewer MAX airplanes than planned. Disciplined adjustments provide us with greater flexibility to manage the 4,000 outstanding 737 orders and protect the value of the MAX in the marketplace.”

Although Boeing still has an outstanding order for 82 MAX 737s from GECAS, which currently has 29 within its fleet.

Boeing is due to restart its MAX production line this week, with employees operating on staggered shifts in order to provide as much social distancing as possible.

“As we work to return the 737 MAX to service, our focus remains on addressing our customers’ fleet needs while optimizing the delivery of the more than 4,000 airplanes in our 737 backlog,” Boeing added. “As normal market conditions return, Boeing anticipates that lessors who have restructured or reduced their order books will continue to add MAX aircraft to their portfolios through sale-leaseback agreements with airlines. Longer-term we expect these lessors will again place orders for direct MAX purchases.”

Editor’s Comment: Boeing pushes through and remains focused

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Anyone associated with the commercial aviation industry knows that Boeing has had an extremely tough couple of years and, despite its best efforts, when it looked as though things might well be getting back on track, COVID-19 struck the civil aviation market heavily causing an unprecedented impact, the socio-economic effects of which will last far beyond 2020.
But the US aircraft manufacturer is resilient. While many global aircraft companies have halted production or been reduced to a mere token of its employees to ensure that the lights still work and the power is still on, Boeing is introducing a “phased-approach” return to work for its employees at its Puget Sound-region production facility beginning this week.
Following this, production will begin next week at Renton, Everett, Auburn and Frederickson, which means that the company’s backlog of 737, 767 and 777 aircraft will begin being filled once again. However, the production site at South Carolina will remain closed until further notice.
“The health and safety of our employees, their families and communities are our shared priority,” said Boeing Commercial Airplanes CEO Stan Deal. “This phased approach ensures we have a reliable supply base; our personal protective equipment (PPE) is readily available, and we have all the necessary safety measures in place to resume work for our customers.”
In an effort to support the continued social distancing of its staff, Boeing is introducing extra shift-start times in order to reduce the flow of its production staff through the gate during busy periods. Employees will be required to wear face masks, and PPE will be provided for those working in close proximity with one another for extended periods. Boeing will routinely conduct “wellness checks” on its staff at the beginning of their shifts.
While many analysts continue to pour scorn on Boeing over what’s happened during the past two years, it’s clear the company’s board members are aware that they have a lot of work to do in order to regain the trust of the world’s public.
It’s a case of small steps, such as caring for your own, which may well lead to bigger things, and perhaps, as it did in the past, lead Boeing to being the most trusted of brands for the world’s airline passengers.

Virgin Australia to enter into administration

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According to reports in both The Sydney Morning Herald and The Australian Financial Review, Virgin Australia will be entering voluntary administration after a board meeting between the airline’s directors.

Virgin Australia was seeking a AUS$1.4 billion loan from the federal government prior to switching its focus to secure help from states across Australia.

According to the newspapers, both initially reported that two private equity firms were considering to purchase the airline’s assets when it went into administration, one of which was believed to be BGH, a private equity firm owned by Ben Gray.

Among the company’s current shareholders are Singapore Airlines, China’s HNA Group and Nanshan Group and Richard Branson’s Virgin Group.

The crisis began on Saturday when a row broke out over where the company should locate its new headquarters and the Palaszczuk government offered Virgin a AUS$200 million lifeline on the provision that other states contribute and the airline’s business remained in Brisbane.

The following day, NSW Treasurer Dominic Perrottet implied that any contribution from his government would be on the proviso that that headquarters would be loacted in Sydney instead.

Minister for State Development in Queensland, Cameron Dick hit back saying that this woud require more than 1,200 staff to move states in order to keep their jobs.

“It’s a nonsense to think the Prime Minister would even consider a New South Wales plan to move the airline there,” he stated.

Boeing expects to lose 150 737 MAX orders in March

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Boeing has revealed that in March it was expecting to lose 150 pre-orders for its 737 MAX aircraft. This rise in cancellations has been the result of the global COVID-19 impact, with many airlines adjusting the number of aircraft they’re operating and reducing any additional expenditures, during the global lockdown.

“Boeing cotinues to adjust its order book to adapt to the lower-than-planned 737 MAX production in the near term”, a company spokesman said.

A reflection of the crisis now facing Boeing is that the manufacturer received just 49 orders for its commercial aircraft in the first quarter of 2020.