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LATEST NEWS
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Thursday, February 2nd, 2023
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Five days after UK regional carrier Flybe filed for bankruptcy, Norwegian domestic carrier Flyr has been forced to go down the same route after failing to raise only half of the needed cash to see it through the winter season and enable it to prepare for spring demand.
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"There is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation," the company said in a statement, adding the board's decision was unanimous. Weak markets and uncertainty over demand were blamed for Flyr’s inability to raise sufficient funds. The carrier had been operating a fleet of 12 Boeing 737 jets, including six 737 MAXs on lease from Air Lease Corp.
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Flyr confirmed on Monday it had tried and failed in recent days to secure NOK330 million (£27 million) of funding, triggering a 78% drop in its share price. Further trade in the stock will be suspended, Flyr said on Tuesday.
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Scandinavian carriers have been hard hit over recent years with rival carrier Norwegian Air undergoing restructuring supervision through Irish courts in 2021, resulting in a slimline version of the original carrier, while SAS is currently undergoing reorganisation under U.S. Chapter 11 bankruptcy protection proceedings.
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Norwegian low-cost airline Flyr has entered administration just 18-months after starting operations. IBA Insight reveals that Fly operated a fleet of 12 leased aircraft (six Boeing 737 NGs and six Boeing 737 MAXs). Seven of these were owned by Air Lease Corporation.
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Flyr was a very seasonal operation, with its top city pairs featuring summer flights between Oslo and Alicante, Malaga, Barcelona and Rome, as well as domestic flights within Norway.
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The airline cut its capacity over the winter of 22/23 to save costs, but ultimately failed to raise the required financing to continue operations. Flyr’s demise follows shortly after the collapse of British regional airline Flybe.
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This shows hat it is not easy to remain cashflow positive in the weaker winter months, during a high oil price environment. It also makes the strong profits reported by Ryanair in the third quarter even more impressive.
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Jet kerosene prices remain very elevated at USD 1,153 per metric tonne, in part due to a very wide crack spread caused by a lack of refinery capacity. The last time we saw such high kerosene prices was in 2008, just before the global financial crisis. This period saw a similar playbook, with weaker players exiting the market, thereby reducing market capacity and giving other airlines more pricing power to cover higher fuel prices.
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IBA remains positive on the general aviation recovery presented in its outlook for 2023, but it anticipates further failures and airline consolidation to occur amongst some of the weaker players in the coming weeks.
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Ascendance Flight Technologies, the French start-up specialising in aviation decarbonisation, has named Stéphane Viala as Director of Engineering & Programme. As of February 1, 2023, he will oversee the technical management of the young aircraft manufacturer’s two flagship programmes: the STERNA modular hybrid propulsion system and the hybrid-electric VTOL aircraft ATEA.
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The aeronautical engineer from ISAE-ENSMA also holds a PhD in turbulence modelling from SUPAERO/ONERA. He was previously SVP Engineering and Head Of Design Organisation of French-Italian aircraft manufacturer ATR, which he joined in 2015.
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Before being appointed by ATR, he had been in various leading positions at Airbus for 16 years. He first headed the aerodynamic methods and A350 flight dynamics teams before leading the A30X flight physics and flight dynamics integrated team. He also defined products evolution, multidisciplinary methods and technology in R&T programmes during four-years, as head of Overall aircraft Design, encompassing flight physics, engine, flight test bed and methods and tools perimeter. He was the A320 incremental development chief engineer before joining ATR. He holds several patents in the aerospace field and has published several technical articles.
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The Department of Transportation’s Bureau of Transportation Statistics (BTS) has released U.S. airlines’ December fuel cost and consumption numbers indicating U.S. scheduled service airlines used 1.471 billion gallons of fuel, 5.3% more fuel than in November 2022 (1.398 billion gallons) and 5.2% less than in pre-pandemic December 2019. The cost per gallon of fuel in December 2022 ($3.14) was down 18 cents (5.3%) from November 2022 ($3.32) and up US$1.14 (57.0%) from December 2019. Total December 2022 fuel expenditure (US$4.63B) was down 0.3% from November 2022 (US$4.64B) and up 48.7% from pre-pandemic December 2019.
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Year-over-year increases in fuel consumption and cost for December include 3.0% in domestic fuel consumption, 51.4% in domestic fuel cost, and 47.0% in cost per gallon. Domestic fuel consumption increased 4.2% from November to December in 2022, while decreasing 5.0% from December 2019. Increased fuel consumption reflects an increase in airline passenger travel over the same period.
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Fuel cost per gallon for U.S. airlines (total) scheduled service:
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SkyWorks Holdings has released transactions and activities performed during the fourth quarter of 2022 for its Leasing and Asset Management and Investment Banking & Advisory Groups.
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Leasing & Asset Management Group activities included the following:
On behalf of an institutional investor client, SkyWorks arranged the lease extension of two Airbus A319-100 aircraft on lease to American Airlines and arranged the sale of two Boeing 737-700 aircraft on behalf of a U.S. based investor, on lease to a U.S. network carrier. SkyWorks concluded its role as backup-servicer for a large financial institution in respect of certain portfolio assets.
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Investment Banking & Advisory Group activities included the following:
SkyWorks was retained by a North American low-cost carrier to provide fleet-related advisory services in respect of a prospective aircraft order.
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The company completed an assignment acting as an advisor to Southwest Airlines with respect to the buyback of 39 Boeing 737-700 aircraft on lease with AerCap. Furthermore, SkyWorks completed an assignment on behalf of a leading lessor client, which has resulted in purchase agreements with CFM and Pratt & Whitney with respect to engine selections for its A320neo-family aircraft order book. The company completed an assignment with a North American network carrier on which it advised on fleet-related matters.
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SkyWorks completed the sale and leaseback financing programme for Spirit Airlines’ 2023 Airbus A320neo deliveries encompassing 17 aircraft in total. SkyWorks and Spirit closed on lease agreements with Orix Aviation, Fuyo General Lease and ICBC Aviation Leasing. The company has been engaged to arrange Spirit’s 2024 sale and leaseback programme.
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SkyWorks continued to provide aircraft and engine sourcing advisory services for Airbus A320neo and Embraer E2- family aircraft to an EMEA flag carrier.
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Qatar Airways and Airbus have reached an amicable and mutually agreeable settlement in relation to their legal dispute over A350 surface degradation and the grounding of A350 aircraft, avoiding a UK court trial. A repair project is now underway to get these aircraft safely back in the air.
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The details of the settlement are confidential, and the parties will now proceed to discontinue their legal claims. The settlement agreement is not an admission of liability for either party.
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This agreement will enable Qatar Airways and Airbus to move forward and work together as partners.
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Embedded Ventures, an early-stage deep tech venture capital firm, has announced the first closing of its US$100 million inaugural fund. The minority-led firm takes a commercial-first approach to investing in early-stage start-ups with applications that can serve the Department of Defence, focusing on cutting-edge start-ups in Digital Engineering, Advanced Manufacturing and Space Operations.
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Co-founders Jenna Bryant and Jordan Noone both have non-traditional backgrounds and are more hands-on than the typical VC-firm, offering potential founders not just capital, but also their extremely talented and forward-thinking team.
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Co-founder and CEO Jenna Bryant shares what this inaugural fund close means for the future of Embedded Ventures, “With this first close, we will be able to continue deploying capital to under-noticed and under-valued companies in the market, where we can help them realise their true value.”
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“Our national security and economic prosperity are at an inflection point, making investment into the technologies that will transform static markets and introduce entirely new ones more critical than ever,” says co-founder and CTO Jordan Noone.
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To date, the fund has announced investments in Akash Systems Inc., Chromatic 3D Materials, Inversion, KittyCAD, Slingshot Aerospace and Skyryse.
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