Air Canada completes aircraft sale and leaseback transactions

Air Canada today announced that it recently completed sale and leaseback transactions for three Boeing 737 MAX 8 aircraft with Jackson Square Aviation and six Boeing 737 MAX 8 aircraft with Avolon Aerospace Leasing Limited for total proceeds of US$365 million (C$485 million) and long-term lease commitments of US$345 million (C$458 million). The nine aircraft were delivered to Air Canada over the past three years.

“Since the start of the COVID-19 crisis, Air Canada has accessed financial markets numerous times and has successfully raised almost $6.0 billion in liquidity, on reasonable terms and conditions, including with this transaction, as it continues to maintain liquidity levels to mitigate the challenges and uncertainty ahead. We are very pleased to be extending our strong relationship with Avolon and beginning a new relationship with Jackson Square Aviation,” said Michael Rousseau, Deputy Chief Executive Officer and Chief Financial Officer of Air Canada.

Since the start of the COVID-19 pandemic in the first quarter of 2020, Air Canada has raised almost $6.0 billion in liquidity. Additionally, it recently completed two long term financings to replace $1.4 billion in short-term debt coming due within the next nine months.

Air Canada is utilizing the net proceeds from these transactions to supplement its working capital and for other general corporate purposes. The net proceeds from the transactions will serve to increase Air Canada’s cash position, thereby allowing for additional flexibility in the implementation of mitigation and recovery measures in response to the COVID-19 pandemic.

Air Canada will update the amount remaining in its unencumbered asset pool as part of its third quarter 2020 financial reporting process. Air Canada will continue to explore financing arrangements as additional liquidity may be required or to refinance existing debt to push out maturities.

British Airways says farewell to its last two Boeing 747s

Despite cloudy weather, British Airways today bid farewell to its last two Boeing 747-400s at London’s Heathrow Airport. The airline issued this statement:

British Airways’ remaining two Boeing 747 aircraft based at Heathrow taxied for take off for the last time today.

To commemorate the occasion the airline’s two aircraft took to the skies one after the other from runway 27R. Once in the air, G-CIVY circled back over the southerly runway in an emotional farewell to its home before heading to St Athan where the aircraft will be retired.

G-CIVB, painted in the airline’s historic Negus livery and G-CIVY, in its current Chatham Dockyard livery, are going to be retiring in the UK at Kemble and St Athan, respectively. Between the two aircraft they have flown an impressive 104 million miles in their 47 years of service and carried millions of British Airways customers.

To express its gratitude to the millions of people who flew on the jets, British Airways is also offering a jumbo reduction on seven hundred and forty seven (747) Club World seats which will be on sale on ba.com for just £999 for the lucky customers that find them. The limited number of ultra-low fare seats are live now to popular destinations that the airline’s Queen of The Skies used to fly to which will include Miami, Dallas and Cape Town.

At 7:47am this morning, hundreds of aviation enthusiasts and customers flooded social media sharing their favourite 747 memories using #BA747farewell.

Alex Cruz, British Airways’ Chairman and CEO said, “Today was an emotional milestone in the retirement of our 747 fleet as it was our last chance to see the Queen of the Skies depart from our home at Heathrow airport. The 747s have played a huge role in our 100-year history, forming the backbone of our fleet for over 50 years. I know I speak for our customers and the many thousands of colleagues who have spent much of their careers alongside them when I say we will miss seeing them grace our skies.”

In July, British Airways announced that its remaining 747s had sadly flown their last commercial services as a result of the impact the Covid-19 pandemic has had on the airline and the aviation sector. The fleet is being replaced by quieter more fuel efficient aircraft as part of the airline’s commitment to achieving net zero carbon emissions by 2050.

British Airways expects the last 747s (currently positioned in Wales) to leave the fleet by the end of the year.

British Airways 747 G-CIVB

Date it entered service	February 15, 1994
Retirement date	September 08, 2020
Popular/recent routes	Last passenger flight was April 6, 2020 from Miami to Heathrow
Livery	Current livery: Negus Previous livery: Landor and was named ‘City of Litchfield’
Fact and stats (approx.)	Operated 13,398 flights Flown for 118,445 hours Flown 59 million miles

British Airways 747 G-CIVY

Date it entered service	September 29, 1998
Retirement date	September 08, 2020
Popular/recent routes	March 20, 2020 last passenger flight from Chicago to Heathrow April 5, 2020 last freighter flight from Dallas to Heathrow
Livery	Chatham Dockyard
Fact and stats (approx.)	Operated 11,034 flights Flown for 90,161 hours Flown 45 million miles

Facts and stats:

Boeing has been manufacturing 747 aircraft for more than 50 years
BOAC flew its first 747 flight on 14th April 1971
British Airways took delivery of its first 747-400 in July 1989 and its last in April 1999
At its height, the airline had a fleet of 57 747-400s
British Airways was the world’s biggest operator of 747-400 aircraft
The 747-400 has 6ft high winglets on the tips of its wings to improve efficiency
It has 16 main wheels and two landing nose wheels
The wings of a 747-400 span 213ft and are big enough to accommodate 50 parked cars
The tail height of 64ft is equivalent to a six-storey building
The 747-400 is 231ft longAbout British Airways’ retro liveries:
Last year to mark its centenary British Airways re-painted three of its jumbo jets in heritage colours donning it’s historic BOAC, Negus and Landor livery The BOAC jet put in a guest appearance with the Red Arrows much to the delight of spectators at the Royal International Air Tattoo.

British Airways aircraft photo gallery (Boeing):

Croatia Airlines to downsize to its smaller Q400s to survive the winter

Croatia Airlines is planning to assign its six smaller Bombardier DHC-8-402 (Q400s) to most of international routes during the lean winter months. The winter schedule commences on October 25.

During this month, Croatia Airlines will connect Croatia with the most important European cities and transport hubs, with air connections within Croatia provided on scheduled domestic flights.

During October, Croatia’s frag carrier airline will connect Croatia directly with 15 international destinations (Amsterdam, Vienna, Berlin, Brussels, Düsseldorf, Frankfurt, Copenhagen, London Heathrow, Lyon, Munich, Paris, Rome, Sarajevo, Skopje and Zurich). From these transport hubs, passengers are offered connecting flights to destinations around the world, particularly on flights of Croatia Airlines’ partners from Star Alliance.

As far as scheduled international flights are concerned, Croatia’s capital, Zagreb, will be directly connected with 12 European destinations, Split with 10 European cities, Dubrovnik with two international destinations, and Rijeka will continue to be connected with Munich.

As for scheduled domestic flights, Croatia Airlines will be connecting Zagreb with Croatia’s five airports (Split, Dubrovnik, Zadar, Pula and Bol on the Island of Brač), with flights continuing to be operated on the Osijek-Split and Osijek-Dubrovnik routes as well.

Croatia Airlines aircraft photo gallery:

Wizz Air enters the Norwegian domestic market

Wizz Air has announced it will connect Oslo with Bergen, Tromsø and Trondheim starting on November 5. Flights will compete against SAS and Norwegian.

This will be its first base in Scandinavia. Initially one Airbus A321 will be based at Oslo Gardermoen Airport. A second A321 will arrive in December.

In 2020 Wizz Air already has introduced six new routes to Norway: Krakow to Bergen, Haugesund, Stavanger, Tromsø and Trondheim and from Larnaca to Bergen.

End of an Era: The last two British Airways Boeing 747s prepare to depart London Hearthrow

British Airways has made this announcement:

British Airways’ last Heathrow based 747s will retire on the morning of Thursday, October 8, 2020
Social media users are invited to share their memories of the aircraft at 7.47am and 7.47pm on Thursday to mark the occasion using #BA747farewell
The retirement of the airline’s fleet of 747-400 was brought forward as a result of the impact the Covid-19 pandemic has had on the airline and the aviation sector, which is not predicted to recover to 2019 levels until 2023/24

British Airways has announced that its final two Heathrow based Boeing 747 aircraft are scheduled to depart from the airport for the very last time tomorrow morning (Thursday, October 8). One aircraft is painted in its heritage ‘Negus’ livery and the other in its current Chatham Dockyard livery.

Thousands of British Airways flight crew, cabin crew and engineering teams have worked over several decades on and with the aircraft during their time at British Airways during a period when they represented the heart of the airline’s long-haul fleet.

To commemorate G-CIVB and G-CIVY’s final take-off from the airport at 08:30am, the airline has arranged a special send off with a unique and rarely seen synchronised dual take off on parallel runways*, which will be followed by fly past along the southerly runway by one of the aircraft (G-CIVY in current BA livery) as it bids its home a final farewell.

Celebrating the occasion in a virtual way to keep spectators safe, the airline will be live streaming moments from the departure on its Facebook page and is also inviting its colleagues, aviation enthusiasts and customers to share any special memories or photos of British Airways’ 747s on social media channels at 7:47am and 7.47pm on their departure day using the hashtag #BA747farewell.

Alex Cruz, British Airways’ Chairman and CEO, said “Tomorrow will be a difficult day for everybody at British Airways as the aircraft leaves our home at Heathrow for the very last time. We will pay tribute to them for the incredible part they have played in our 100-year history and to the millions of customers and BA colleagues who have flown on board and taken care of them.

“We hope that Britain will join us in sharing their memories with us on social media at 7:47am and 7.47pm on Thursday using #BA747farewell.”

IATA: Looming cash crisis threatens airlines

IATA made this announcement:

The International Air Transport Association (IATA) warned that the airline industry will burn through $77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute), despite the restart of operations. The slow recovery in air travel will see the airline industry continuing to burn through cash at an average rate of $5 to $6 billion per month in 2021.

IATA called on governments to support the industry during the coming winter season with additional relief measures, including financial aid that does not add more debt to the industry’s already-highly-indebted balance sheet. To date, governments around the world have provided $160 billion in support, including direct aid, wage subsidies, corporate tax relief, and specific industry tax relief including fuel taxes.

IATA estimates that despite cutting costs just over 50% during the second quarter, the industry went through $51 billion in cash as revenues fell almost 80% compared to the year-ago period. The cash drain continued during the summer months, with airlines expected to go through an additional $77 billion of their cash during the second half of this year and a further $60-70 billion in 2021. The industry is not expected to turn cash positive until 2022.

Airlines have undertaken extensive self-help measures to cut costs. This includes parking thousands of aircraft, cutting routes and any non-critical expense and furloughing and laying off hundreds of thousands of experienced and dedicated employees.

Sector Wide Action Needed

“Government support for the entire sector is needed. The impact has spread across the entire travel value chain including our airport and air navigation infrastructure partners who are dependent on pre-crisis levels of traffic to sustain their operations. Rate hikes on system users to make up the gap would be the start of a vicious and unforgiving cycle of further cost pressures and downsizings. That will prolong the crisis for the 10% of global economic activity that is linked to travel and tourism,” said de Juniac.

There will be little appetite among consumers for cost increases. In a recent IATA survey, some two thirds of travelers have already indicated that they will postpone travel until the overall economy or their personal financial situation stabilizes. “Increasing the cost of travel at this sensitive time will delay a return to travel and keep jobs at risk,” said de Juniac.

According to the latest figures from the Air Transport Action Group, the severe downturn this year, combined with a slow recovery, threatens 4.8 million jobs across the entire aviation sector. Because each aviation job supports many more in the broader economy, the global impact is 46 million potential job losses and $1.8 trillion dollars of economic activity at risk.

DHL (EAT) adds Brussels – Miami freighter service

Miami International Airport made this announcement:

DHL subsidiary starts five weekly flights from leading European hub for meds and vaccines.

As preparations for distribution of a COVID-19 vaccine continue worldwide, Miami International Airport welcomed on October 1, 2020 (top photo) the launch of more all-cargo flights from Brussels, Belgium – Europe’s leading hub for handling temperature-sensitive pharmaceutical (pharma) products such as vaccines. European Air Transport (EAT) Leipzig, a wholly owned subsidiary of Deutsche Post DHL Group, began five weekly flights with Airbus A330-200F aircraft capable of carrying 65 tons per flight.

European Air Transport (EAT) Leipzig’s LEJ hub:

EAT Leipzig’s new Brussels service follows launches by DHL Express and Amerijet, which began cargo flights between Brussels and MIA in March and April, respectively. Combined, the airlines now provide 13 weekly flights between the two pharma hubs. Brussels Airport and MIA were the first two airports in the world designated as Pharma Hub Airports by the International Air Transport Association (IATA), and have been working on expanding their shared pharma route for the past decade. IATA’s Pharma Certification Program certifies that pharma products are transported in accordance with global best practices.

Last year, MIA handled a total of $3.7 billion in pharma imports and exports, with Belgium ranking as one of MIA’s top 10 trade partners for pharma imports at $12.7 million. Belgium was also responsible for $30.9 million in pharma exports. Additionally, with 18% of MIA’s pharma imports coming from Europe and 80% of MIA’s exports going to Latin America and the Caribbean by volume, the new Miami-Brussels cargo flights adds more muscle to MIA’s already strong connections with its U.S., European, Latin American and Caribbean markets.

European Air Transport (EAT) Leipzig’s routes from the LEJ hub:

SAS reports a traffic reduction of 73% in September

Scandinavian Airlines-SAS made this announcement:

In September SAS carried 0.6 million passengers and reports a capacity reduction of 73% compared to the same period last year.

The COVID-19 pandemic continues to impact SAS’ traffic negatively. In September, the total number of passengers ended at 0.6 million, a decrease by 2.3 million, and total capacity was down by 72.7% compared to the same period last year. Demand for domestic travel continues be stronger than for European and Intercontinental traffic and SAS has adapted its network accordingly.

“Since March, when nearly all traffic was halted, we have slowly started to rebuild our network. Today SAS operates up to 380 daily flights servicing 75 destinations and I am pleased that we now have resumed our presence at mainland China after 9 months interruption. Overall demand is heavily dependent on imposed travel restrictions. In September more countries were unfortunately classified as “red”, reducing the number of passengers somewhat versus August. However, in the last six months we have seen a slow but steady recovery in demand, and in September SAS reports half a million additional passengers than in April. Looking ahead, we continue to monitor the market development and stand ready to make further adjustments in accordance with how demand evolves,” says Rickard Gustafson, CEO SAS.

SAS scheduled traffic	Sep20	Change¹	Nov19-Sep20	Change¹
ASK (Mill.)	1 254	-71.3%	21 132	-52.0%
RPK (Mill.)	448	-86.7%	12 802	-60.6%
Passenger load factor	35.8%	-41.5 p u	60.6%	-13.2 p u
No. of passengers (000)	595	-78.6%	11 723	-54.4%

Geographical development, schedule	Sep20 vs. Sep19		Nov19-Sep20 vs. Nov18-Sep19
	RPK	ASK	RPK	ASK
Intercontinental	-97.3%	-84.7%	-66.8%	-57.7%
Europe/Intrascandinavia	-88.6%	-74.9%	-62.5%	-55.5%
Domestic	-56.9%	-37.3%	-40.9%	-30.6%

SAS charter traffic	Sep20	Change¹	Nov19-Sep20	Change¹
ASK (Mill.)	58	-86.6%	979	-72.9%
RPK (Mill.)	46	-88.6%	843	-74.3%
Load factor	79.2%	-13.9 p u	86.1%	-4.7 p u
No. of passengers (000)	20	-87.5%	285	-76.6%

SAS total traffic (scheduled and charter)	Sep20	Change¹	Nov19-Sep20	Change¹
ASK (Mill.)	1 312	-72.7%	22 111	-53.6%
RPK (Mill.)	494	-86.9%	13 646	-61.9%
Load factor	37.7%	-41.0 p u	61.7%	-13.4 p u
No. of passengers (000)	614	-79.1%	12 008	-55.4%

¹ Change compared to same period last year. p u = percentage units

Preliminary yield and PASK	Sep20	Nominal change	FX adjusted change
Yield, SEK	1.25	19.0%	26.1%
PASK, SEK	0.45	-44.9%	-41.7%

			Sep20
Punctuality (arrival 15 min)			96.2%
Regularity			99.4%
Change in total CO₂emissions, rolling 12 months			-50.3%
Change in CO₂emissions per available seat kilometer			-4.5%
Carbon offsetting of passenger related emissions			37%

Definitions:

RPK – Revenue passenger kilometers
ASK – Available seat kilometers
Load factor – RPK/ASK
Yield – Passenger revenues/RPK (scheduled)
PASK – Passenger revenues/ASK (scheduled)
Change in CO₂emissions per available seat kilometers – SAS passenger related carbon emissions divided with total available seat kilometers (incl. non-revenue and EuroBonus), rolling 12 months
Carbon offsetting of passenger related emissions – Share of SAS passenger related carbon emissions compensated by SAS (EuroBonus members, youth tickets and SAS’ staff travel)

From fiscal year 2020 we report change in CO₂ emissions in total and per Available Seat Kilometers (ASK) to align with our overall goal to reduce our total CO₂ emissions by 25% by 2025, compared to 2005.

AirAsia X restructures in order to survive

AirAsia X Berhad (AirAsia X) today announced a restructuring plan geared at facilitating an injection of fresh equity which will allow the airline to fly again. AirAsia X also appoints Dato’ Lim Kian Onn as the Deputy Chairman to lead the airline restructuring. He is a Chartered Accountant and was an investment banker. He has been a Board member of AirAsia X since 2012.

AirAsia X is facing severe liquidity constraints. Travel and border restrictions have grounded all scheduled flights and there is no imminent return to normalcy.

An imminent default of contractual commitments will precipitate a potential liquidation of the airline.

A major debt restructuring and a renegotiation of its financial obligations are pre-requisites for any raising of fresh equity which will be required to restart the airline.

For 13 years AirAsia X, as a market leader in medium-haul low-cost flying, has delivered affordable flights to many destinations and created jobs for the airline, related travel and tourism industries as well as contributing to Malaysia’s GDP growth.

The Board and management have assessed various options and propose a restructuring plan which if approved, will secure the airline’s continued ability to fly again. The plan includes:

A. Debt Restructuring Scheme

proposed debt settlement and waiver of debts involving unsecured creditors, aimed at enabling the Group to address its debt obligations in an orderly manner and to arrive at a debt structure that is sustainable from future operating cash flows;

B. Revision of the Group’s Business Plan

route network rationalisation, aircraft fleet right-sizing, cost base overhaul and workforce optimisation, all aimed at ensuring a leaner and more sustainable business going forward;

C. Engagement with Business Partners

key success factors to the proposed restructuring plan include the support from business partners to continue the long-term relationship pre- and post-restructuring. AirAsia X continues to engage all key business partners and hopes to enter into contracts, agreements and/or arrangements that are reflective and supportive of the airline’s revised business plan upon successful completion of the restructuring which is critical to the future viability of the business;

D. Airline customer and Travel Agents

under the Proposed Scheme, AirAsia Unlimited Pass holders and guests with valid flight bookings will receive travel credits with extended validity for future travel or purchase of seat inventory.

The proposed restructuring plan and establishment of new contracts, agreements and/or arrangements based on terms to be agreed upon which are sustainable based on the Group’s revised business plan is aimed to right-size the Group’s level of operations and financial obligations, which is crucial to the Group’s continued existence in the aviation landscape. These exercises are pre-requisite for the raising of any fresh capital, comprising both equity and debt needed to implement the Group’s revised business plan.

In the last two months the Company has had extensive discussions with all major creditors. Whilst there are varying degrees of support for the restructuring scheme as has been proposed, all of them have expressed strong support for a continuation of the airline business.

AirAsia X CEO Benyamin Ismail said, “AirAsia X and other airlines the world over are struggling to survive amidst the global crisis of COVID-19 pandemic. We remain committed to our guests, Allstars, business partners and shareholders to ensure we build a viable and sustainable airline for the long-haul, and for the survival of this airline, the proposed restructuring plan is our only option.

“It has been extremely difficult for the airline during this period as we had to ground all scheduled flights, implement salary cuts and retrenchment for the first time in the company’s history as a consequence of the pandemic. Similar exercises are likely to continue during the restructuring process, but our focus is to ensure a successful restructuring to keep as many jobs as possible.

“We have a low cost base, we are in the right part of the market and many of our key markets are in green zones which are likely to reopen first. We have a robust recovery strategy in place, and with the continued support from our stakeholders, we will overcome all challenges and come out stronger.”

Benyamin Ismail also added, “In order to safeguard Malaysia’s vested interest through the aviation industry, regional air connectivity is essential for trade, businesses and economic growth, especially to our core markets of China, Japan, Korea and Australia where we have established a strong foothold. The closure of these markets can impact the stimulus spending, GDP contribution and employment within the supply chain of the aviation industry. As other airlines struggle in the current market condition, AirAsia X strives to emerge stronger once the market recovers. Our immediate focus is to obtain all necessary approvals and execute the proposed restructuring plan over the next few months.

“Under the Proposed Scheme, AirAsia X Unlimited Pass holders and guests with valid flight bookings will receive travel credits with extended validity for future travel or purchase of seat inventory. We assure you that we will resume operations as soon as possible once the border restrictions are lifted. Your steadfast support is greatly appreciated.”

AirAsia X continuously reviews its network resumption timeline and has an ongoing dialogue with tourism and airport authorities, governments and other industry stakeholders to pave the way for the prospect of travel bubbles in green zone countries.

Despite the unprecedented setback brought by COVID-19, this also provides an opportunity for AirAsia X to transform and reinvent the product and business strategy to emerge in a stronger and more sustainable financial position, capable of attracting new equity and debt funding critical to the long-term viability and continuity of AirAsia X.

AirAsia X aircraft photo gallery: