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Thursday, April 2nd, 2020

IATA predicts airlines will post second-quarter loss of approaching US$39 billion

The International Air Transport Association (IATA) has released its latest analysis of the forthcoming quarter in which it predicts that airlines will burn through US$61 billion of their cash reserves up until June 30, leading to a quarterly net loss of US$39 billion.

The analysis is based on a continued severe restriction in travel for the next three months, resulting in a 38% fall in full-year demand and a drop of US$252 billion in passenger revenue, both figures compared to 2019 results. The second quarter would see a 71% drop in demand, but revenue would fall by slightly less at 68% through continued cargo operations. Variable costs are expected to drop sharply at around 70%, which would align with a 65% cut in second-quarter capacity. While the cost of fuel has dropped sharply, hedging would likely see that benefit capped at 31%.

Airlines are also faced with the challenge of refunding sold but unused tickets as a result of numerous cancellations resulting from government-imposed restrictions on travel. The second-quarter liability for these is a massive US$35 billion “Airlines cannot cut costs fast enough to stay ahead of the impact of this crisis. We are looking at a devastating net loss of US$39 billion in the second quarter. The impact of that on cash burn will be amplified by a US$35 billion liability for potential ticket refunds. Without relief, the industry’s cash position could deteriorate by US$61 billion in the second quarter,” said Alexandre de Juniac, IATA’s Director General and CEO.

De Juniac also added that “Travel and tourism is essentially shut down in an extraordinary and unprecedented situation. Airlines need working capital to sustain their businesses through the extreme volatility. Canada, Colombia, and the Netherlands are giving a major boost to the sector’s stability by enabling airlines to offer vouchers in place of cash refunds. This is a vital time buffer so that the sector can continue to function. In turn, that will help preserve the sector’s ability to deliver the cargo shipments that are vital today and the long-term connectivity that travelers and economies will depend on in the recovery phase.”


J&C Aero and Colibri Aero develop first EASA-certified commercial Cargo Seat Bags for Airbus passenger cabins

Colibri Aero, an international supplier of aircraft parts and interior solutions, together with J&C Aero, an international aircraft design and production organization, have developed universal Cargo Seat Bags for commercial and humanitarian cargo transportation inside Airbus A319/A320/A321 passenger cabins. The newly developed interior modification kit has already been approved by the European Aviation Safety Agency (EASA) and has received its Supplemental Type Certificate (STC).

The Cargo Seat Bag comes as a spacious
76x76x147 cm (30x30x58 inches) kit for a triple seat, with up to 75 kg (165 lb) of cargo
to be stored on the seat and additional 9 kg – under the seat, totaling 252 kg
(555 lb) per a triple seat block.

The kit can be easily installed within just several minutes and can include a wide range of cargo types: from postal correspondence, household goods, electronics and other commercial cargo to medical equipment and other kinds of humanitarian supplies.

The kits are developed in compliance with structural integrity, fire protection, and emergency evacuation requirements.

STS Aviation Services gains EASA approval for base maintenance at BHX facility

STS Aviation Services (STS) has gained CAA Part 145 approval to conduct base maintenance operations at its state-of-the-art aircraft maintenance facility in Birmingham, United Kingdom.

Aircraft types included in the new approval cover the A320 family, A330, B737NG and B757 with additional aircraft to be added in the coming months. The STS team will immediately focus on aircraft modifications, structural repairs, engine changes, A Checks, C Checks, lease transition and bridging checks.

SRT_05 (2020-03-11)

ALA – Advanced Logistics for Aerospace acquires German-based Industrio GmbH

ALA – Advanced Logistics for Aerospace has acquired a majority stake in Germany-based Industrio GmbH.

ALA is an Italian private company owned by entrepreneurs Fulvio Scannapieco and Vittorio Genna and specialized in distribution, logistics and service provision to the aerospace and defense, energy and industrial markets.

Industrio GmbH is an aerospace distribution company with a significant footprint in the German-market. The company, headquartered in Neumarkt in der Oberpfalz, Germany, will change its name and trade as ALA Germany GmbH effective from April 1, 2020 and will be led by Bill Holler as general manager.

With facilities already in Italy, the United Kingdom and France, the acquisition now gives ALA more business opportunities in the European aerospace marketplace to serve its international customers.

Gatwick Airport will consolidate operations into South Terminal from April 1

The severe and unparalleled impact of COVID-19 on the global aviation sector has led Gatwick to consolidate passenger processing and facilities into the airport’s South Terminal and to limit scheduled flights on its runway to between 1400 and 2200, with effect from April 1, 2020.

The airport’s operations will be consolidated into the South Terminal and the runway will remain open for emergency landings and diversions only outside these hours.

The temporary closure of the North Terminal will last a minimum of one month and the situation will be kept under regular review. A decision taken on reopening the North Terminal when airline traffic increases and Government public health advice – including on social distancing – is relaxed.


Avion Express enters cargo transportation market

Originally established as a cargo and passenger airline back in 2005, Avion Express, ACMI operator with 15 years of experience, announced the re-entering of the airfreight market.

This move comes as a response to a rapidly changing situation in the market. Although commercial passenger flights were suspended around the world due to the COVID-19 pandemic, cargo-carrying flights are in huge demand. Passenger aircraft are being turned into cargo to carry medical supplies, equipment of various kinds, industrial parts and high-demand consumer goods.

"The transportation doesn’t stop with passenger flights being suspended. While the very last repatriation flights are still taking place, people and organizations around the world are in great need of supplies, food, medical equipment. As Avion Express has always been characterized by its flexibility, we are now adapting our operations in accordance with market requirements. Although we are currently mostly focusing on the transportation of humanitarian aid and medical equipment in the fight against COVID-19, other cargo requests are also very welcomed and thoroughly considered", said Darius Kajokas, CEO Avion Express.


FL ARI receives EASA Part 145 Maintenance Organization certification for line maintenance in China

FL ARI Aircraft Maintenance & Engineering Company (FL ARI), a maintenance, repair and overhaul (MRO) service provider based in Harbin, China, has received certification approval as an EASA Part 145 Maintenance Organization.

FL ARI is a joint venture between China Aircraft Leasing Group (CALC), its mid to end-of-life aircraft solutions arm Aircraft Recycling International (ARI), and FL Technics, a provider of MRO services in Europe. FL ARI is now cleared to provide line maintenance support for aircraft from the Boeing 737 NG series to Airbus A320 families.

FL ARI provides MRO services for aircraft in China and Asia. Established in 2018, FL ARI focuses on aircraft line and base maintenance, aircraft disassembly, and engineering services consultation. Currently, FL ARI‘s facility holds multiple approvals including the CAAC 145 line maintenance certificate, EASA Part 145 and China's first accredited aircraft disassembler under the CAAC's CCAR 145 Civil Aircraft Maintenance Organization Certificate Regulations. FL ARI is currently providing line maintenance and repair services for two reputable airlines in China.


AAR and Sumitomo Corporation launching joint venture

AAR, a leading aviation services provider to commercial airlines and governments worldwide, and Sumitomo Corporation, a top Japanese trading company, are launching a joint venture ― AAR Sumisho Aviation Services. This Chicago-area-based joint venture will distribute aircraft parts and offer aviation logistics management solutions to the Japanese defense market. Additionally, the partnership will distribute parts from OEMs based in Japan to the global aviation aftermarket.

This business initiative builds upon the parties’ successful, long-standing relationship, under which AAR has served as a stocking distributor for OEM factory-new parts to Japanese defense customers via Sumitomo Corporation since 2012.

“We look forward to partnering with AAR to serve our Japanese customers and make our services more accessible to customers around the world,” said Eiji Ishida, Sumitomo Corporation Executive Officer and GM of the Lease, Ship & Aerospace Business Division.


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Tamar Jorssen
Vice President Sales & Business Development
Email: [email protected]
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