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LATEST NEWS
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Monday, March 23rd, 2020
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Boeing has confirmed that to assist with its request for government aid to aid both itself and other manufacturers in the aerospace supply chain, it will suspend paying any dividends, the company CEO will forego his salary, and the current embargo on share buybacks will remain in place, indefinitely.
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Like many companies in the aerospace sector, Boeing has been badly hit by the widespread economic effect of the COVD-19 outbreak and government aid will be critical to the survival of many. Boeing has been especially hard hit as it has been dealing with the fallout from the grounding of the 737 MAX nearly a year ago after two fatal crashes.
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“Boeing is drawing on all of its resources to sustain operations, support its workforce and customers, and maintain supply chain continuity through the COVID-19 crisis and for the long term,” the company said late on Friday. Both Democrats and Republicans have made it clear that government aid should be subject to limitations on executive compensation, buybacks and dividends.
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According to Reuters news agency, U.S. President Donald Trump said he would demand limits on any company receiving assistance. “When we did a big tax cut, and when they took the money and did buybacks, that’s not building a hangar, that’s not buying aircraft, that is not doing the kind of things that I want them to do,” Trump said.
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Boeing also announced at the end of last week that former United Nations ambassador Nikki Haley had resigned from its board after opposing its bid for government financial assistance. “I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position,” Haley said in a letter to the company’s management released by Boeing on Thursday.
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Singapore Airlines (SIA) will be cutting 96% of the capacity that had been originally scheduled up to end-April, given the further tightening of border controls around the world over the last week to stem the Covid-19 outbreak.
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This will result in the grounding of around 138 SIA and SilkAir aircraft, out of a total fleet of 147, amid the greatest challenge that the SIA Group has faced in its existence. The Group’s low-cost unit Scoot will also suspend most of its network, resulting in the grounding of 47 of its fleet of 49 aircraft.
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The SIA Group diversified its network and set up Scoot to cater to a wide range of passenger and market segments. However, without a domestic segment, the Group’s airlines become more vulnerable when international markets increasingly restrict the free movement of people or ban air travel altogether.
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It is unclear when the SIA Group can begin to resume normal services, given the uncertainty as to when the stringent border controls will be lifted. The resultant collapse in the demand for air travel has led to a significant decline in SIA’s passenger revenues. The Company is actively taking steps to build up its liquidity, and to reduce capital expenditure and operating costs.
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Lilium, the Munich-based aviation company developing an all-electric, vertical take-off and landing aircraft for regional air mobility, has completed an internal funding round worth more than US$240 million. The round was led by Tencent, with participation from other existing investors including Atomico, Freigeist and LGT.
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The new funds bring the total sum raised to date to more than US$340 million. They will be used to support further development of the Lilium Jet as well as underpinning preparations for serial production in Lilium's newly-completed manufacturing facilities.
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As well as designing and manufacturing the Lilium Jet, the company plans to operate a regional air mobility service as early as 2025 in several regions around the world. It recently celebrated the completion of the first stage of flight testing, with the five-seater Lilium Jet demonstrator flying at
speeds exceeding 100 km/h.
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Sabre Corporation, the software and technology company that powers the global travel industry, is taking significant measures to strengthen its financial position in response to the current industry conditions. The travel industry continues to be adversely affected by the global health crisis caused by the outbreak of COVID-19, as well as by government directives that have been enacted to slow the spread of the virus.
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As part of these cost reductions, Sabre has begun implementing several immediate actions with regard to its workforce and other costs during this difficult business climate. These actions include:
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A reduction in the cash retainer for members of its Board of Directors, Sabre’s 401(k) match program will be temporarily suspended for US-based employees who contribute to its 401(k) program,
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On a global basis, Sabre is offering voluntary unpaid time off, voluntary severance and a voluntary early retirement program, and is reducing third-party contracting, vendor costs and other discretionary spending.
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On March 16, Sabre’s Board of Directors voted to suspend the payment of quarterly cash dividends on Sabre’s common stock, effective with respect to the dividends occurring after the March 30, 2020 payment, and Sabre announced the suspension of its share repurchase program.
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Air Lease Corporation (ALC) has delivered one new Airbus A320-200neo aircraft on long-term lease to Air Seychelles. Featuring CFM International LEAP-1A26 engines, this aircraft delivered from ALC’s order book with Airbus.
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“We are pleased to announce this new A320-200neo delivery to Air Seychelles and further ALC’s long-time relationship with the airline,” said Steven F. Udvar-Házy, Executive Chairman of Air Lease Corporation. “This new A320neo replaces an A320 aircraft that Air Seychelles previously had on lease from ALC and will enhance the airline’s current fleet operations.”
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Airbus will bolster its liquidity and balance sheet in response to the COVID-19 pandemic as it continues to assess the ongoing situation and the impact on its business, customers, suppliers and the industry as a whole.
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Airbus’ management has received approval from the Board of Directors to secure a new credit facility amounting to €15 billion in addition to the existing €3 billion revolving credit facility. The company will withdraw the 2019 dividend proposal of €1.80 per share with an overall cash value of approximately €1.4 billion and suspend the voluntary top up in pension funding.
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Given the limited visibility due to the evolving COVID-19 situation, the 2020 guidance is withdrawn. Operational scenarios, including measures to minimise cash requirements, have been identified and will be activated depending on the further development of the pandemic.
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With these decisions, the Company has significant liquidity available to cope with additional cash requirements related to the coronavirus. Liquidity resources previously standing at approximately €20 billion, comprising around €12 billion in financial assets at hand and around €8 billion in undrawn credit lines, were further bolstered by converting an existing €5 billion credit line into a new facility amounting to €15 billion. Available liquidity now amounts to approximately €30 billion.
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Following the country lockdowns, travel restrictions and changes to travel advice across its network, easyJet will ground the majority of its fleet of aircraft from Tuesday, March 24 onwards.
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The carrier will continue to operate rescue flights as required to repatriate customers and anticipate most of its rescue operations to be completed by today, March 23.
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The airline said it anticipates to operate a minimal schedule of essential services on some routes. This will be a maximum of 10% of its usual capacity during this time of year and mainly routes to, from and within the UK.
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OneWeb, the global communications company announced the successful launch of 34 more satellites, aboard a Soyuz launch vehicle from the historic Baikonur Cosmodrome, Kazakhstan. Lift-off occurred on March 21. OneWeb’s satellites separated from the rocket and were dispensed in nine batches.
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This is the second of its 34 satellite launches in six weeks, an achievement made possible by the pace and execution of OneWeb Satellites’ high-volume production factory in Florida. This launch brings the total number of satellites in the constellation to 74.
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The company has now successfully deployed and tested satellites, installed ground stations globally, secured valuable spectrum and has a range of user terminals in development to meet customer needs. In the execution phase of its system deployment, OneWeb looks forward to bringing its services to markets including aviation and maritime, and working with carriers to provide services in rural and remote areas.
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The current global health and economic crisis underscores the tremendous need and demand for connectivity, especially for rural and under-connected communities worldwide. From remote working, to online learning, to accessing healthcare information and medical advice, there is an overwhelming need to have more solutions available to connect people everywhere. OneWeb is making significant strides to deliver the connectivity that is currently lacking around the world.
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Longview Aviation, parent company of De Havilland Aircraft of Canada and Viking Air, announced the immediate suspension of manufacturing operations for new production Dash 8-400 aircraft at De Havilland’s Downsview facility in Toronto, and new production Series 400 Twin Otter aircraft at Viking’s facilities in Victoria, BC and Calgary, Alberta.
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Production on these aircraft will be paused until further notice. Approximately 800 employees or 65% of De Havilland’s current workforce, and 180 employees or 40% of Viking current workforce will be affected.
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The global aviation industry is facing unprecedented uncertainty as a result of the novel coronavirus (COVID-19). Longview and its subsidiaries have been in close communication with customers and
suppliers over the last several weeks. On the basis of these discussions, and against the backdrop of significantly reduced airline activity, Longview determined that it is necessary to pause all new
aircraft production activity at this time.
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The suspension applies only to new aircraft production. Both De Havilland and Viking will continue to provide full product support and technical services to all in-service De Havilland and Viking aircraft. All other Longview business activities will continue as usual.
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Finnair is implementing a substantial funding plan in order to secure the company’s future even in a prolonged coronavirus situation. The plan includes funding instruments such as available credit lines, sale and leasebacks of unencumbered aircraft and a substantial, market-based pension premium loan.
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The available credit lines included in the funding plan consist of a revolving credit facility totaling to €175 million which has already been raised. The statutory pension premium loan totals to €600 million, and it has been proposed that the State of Finland would guarantee the loan. The Finnish Government’s Ministerial Committee on Economic Policy has considered the guarantee matter on March19, 2020. It is still required that the Finnish Parliament approves the guarantee arrangement. The premium pension loan can be raised, if necessary. With the state guarantee, Finnair aims to further solidify its cash position and business continuity even if the coronavirus situation would prevail longer than currently anticipated.
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“The coronavirus is already now the biggest crisis in the 100-year history of aviation,” says Topi Manner, Finnair’s CEO. “Even though Finnair is among the strongest airlines at the start of the coronavirus crisis and we have a strong cash position and a healthy balance sheet, with this plan we aim to secure that we weather the exceptional situation and, considering the circumstances, are able to continue our operations from a steady basis once this situation is over.”
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MTU Aero Engines will temporary suspend a large proportion of operations across several facilities in Europe. In doing so, the company is taking into account the interruptions in material supply that have begun. At the same time, it is doing its part to protect employees and contain the spread of the virus. In the areas that are required to stay operational, the company has enforced measures to protect its employees from infection.
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The temporary suspension will first affect MTU’s manufacturing facilities in Munich, Germany, and Rzeszów, Poland, where engines are assembled or engine components manufactured. Activities will be ramped down by the end of the week in a coordinated approach. Operations are expected to be suspended for three weeks from Monday, March 30.
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A week later, the company will suspend operations at its engine maintenance, repair and overhaul (MRO) facilities in Hannover and Ludwigsfelde, near Berlin. By deferring this slightly, the company will be able to complete shop visits and ensure an organized start to the suspension. Operations at these facilities are expected to be reduced to an absolute minimum for three weeks, the company will remain available to its customers.
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