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IBA Newswatch Volume 11 - Issue 43


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IBA Newswatch Volume 11 - Issue 43

  1. 1. NEWSWATCH 11th November 2011 Volume 11; Issue 43In this Issue: Kingfisher Seeks Government Bailout, 40 More Flights Cancelled  Kingfisher Seeks Government Beleaguered Kingfisher Airlines today sought government Bailout, 40 More help for a bailout on a day when its shares crashed to a Flights Cancelled record low amid continuing debt fears, as it cancelled more flights for the fifth straight day with 40 flights being  Chinas MA600 to Make International withdrawn. Debut With his cash-strapped airline hitting an air pocket, Owner  Aeroflot to buy Vijay Mallya made an urgent request to Finance Minister A320s, SSJ-100s Pranab Mukherjee and Civil Aviation Minister Vayalar Ravi for Regionals to help his carrier with infusion of funds through banks at low interest rates, besides other concessions in line with  Airbus Halts Production of what Air India was getting, sources said today. Long-Haul A340 The stocks of the airline plunged to an all-time low to 19.1 Aircraft per cent in early trading on the Bombay Stock Exchange to  Airbus to Delay a record low before recovering to 9.45 per cent. A350 By as Much Hundreds of passengers were inconvenienced after the as Six Months private airline went on a cancellation spree amid reports  1st Airplane of of travel agents not taking bookings. With todays Peach Aviation cancellation of 40 flights, at least 160 scheduled flights Arrives at Kansai were not operated since Monday. Airport Observing that Kingfisher was "facing a problem", Ravi said  ILFC Secures Sale- Mallya had met him and explained the problem. Leaseback Deal With American "I will also talk to the Finance Minister ... (so that) some Airlines assistance from the lead banks is granted. ... Closing down of flights affects the travelling public.”  Qatar Airways Hints at ‘Major’ "Whether it is private or public sector is immaterial. It is Order For Airshow an Indian carrier. He could not get financial assistance, so  CIT Announces he talked to me," Ravi told reporters here. Order With However, there was no official word immediately on Embraer For Up to whether any step was being taken on Mallyas request, 30 E-Jets which he made earlier this week.  IBA Group News Ravis comments drew sharp criticism from BJP leader and former Finance Minister Yashwant Sinha, who said there was "no case for a government bailout for Kingfisher. We IBA Group Ltd. cannot support such a step." IBA House 7 The Crescent Congress spokesperson Manish Tewari said it remains to be Leatherhead, Surrey KT22 8DY seen whether in a market economy the government will United Kingdom walk the extra mile to bail out a private company or Tel: +44 (0) 1372 224488 should allow the shake-out to take place and the fittest to Fax: +44 (0) 1372 224489 survive". Source: – 11th November 2011 Page 1
  2. 2. NEWSWATCH 11th November 2011 Volume 11; Issue 43 Chinas MA600 to Make International DebutChina-made turboprop airliner Modern Ark 600 (MA600) will IBA’s Comment:make its international debut during the upcoming Dubai “The MA600 isAirshow, China News Service reported on Wednesday. another exampleThe 60-seat plane arrived in Dubai on November 9th and will of a very capablemake 8-minute demonstration flights every day from November13th to 17th during the air show. regional aircraftThe MA600, manufactured by Aviation Industry Corp of China to compete with(AVIC), is an improved version of the MA60. It is powered by existingtwo Pratt & Whitney Canada PW127J turboprops with aneconomical cruise speed of 430 kilometers per hour. The Western-builtmaximum fuel range of the plane is 2,600 kilometers, according models, whichto AVICs official website. has failed to"MA600 will fly with a new look during the air show anddemonstrate its maneuverability," Chen Guanjun, head of secure sufficientAVICs international business department, told China News orders toService. threaten theThe turboprop has accumulated 16 orders, including two from current marketthe Laos government. players – in thisChen said AVIC plans to show models of the L-15 trainingaircraft, Z-9 helicopter and SD10A air-to-air missile at its 200- case, ATR andsquare-meter exhibition booth, with an L-15 flight simulator for Bombardier. ATRinteracting with visitors, according to the report. has secured anAnother focus of the Dubai Airshow is the JF-17 fighter jet ofthe Pakistan Air Force (PAF). An earlier Xinhua report impressive 145confirmed that three of PAFs China-made JF-17s will orders in 2011”participate in the air show. – David RusheThe Dubai Airshow, which happens every two years, is believedto be the most influential air show in the Middle East.Source: – 11th November 2011 Page 2
  3. 3. NEWSWATCH 11th November 2011 Volume 11; Issue 43 Aeroflot to Buy A320s, SSJ-100s for RegionalsRussias flagship airline Aeroflot will buy Airbus A320s andSukhoi Superjet 100s to upgrade its regional subsidiaries fleets, “Aeroflot hasAeroflot General Director Vitaly Savelyev said today. also ordered 30"Aeroflot prefers Airbus A320s. These planes, which will beused initially on international routes, will partly renew the SSJ-100s tofleets of our regional daughter companies," Savelyev said. replace itsAeroflot has also ordered 30 SSJ-100s to replace its existingTu-134s on internal routes. This year the company is to be existing Tu-134ssupplied with 10 planes, with 12 planes in 2012 and eight on internalplanes in 2013. routes. This yearThe company plans to use SSJ-100s mainly on internationalroutes, but they may also serve regional routes. the company isMeanwhile Russian mid-sized carrier Angara airlines, which to be suppliedoperates mainly in Siberia, is to lease 10 short-haul Antonov with 10 planes,An-148 passenger planes, the government of the Irkutsk region,where Angaras owner is based, said on its website on Friday. with 12 planes in"A preliminary agreement to lease An-148s for 15 years has 2012 and eightbeen signed. The airline is likely to get three planes at the planes in 2013.”beginning of next year and will start using them in the secondquarter. After that Angara will get another seven planes in thenext two years," the Irkutsk administration said.The new planes will replace An-24s and An-26s.Source: – 11th November 2011 Airbus Halts Production of Long-Haul A340 “"We have Aircraft acceptedEuropean planemaker Airbus said on Thursday it wasabandoning production of its A340 long-haul four-engine reality. We haveaircraft, which failed to compete with Boeings 777. not sold any"We have accepted reality. We have not sold any A340s for A340s for nearlynearly two years," Airbus Finance Director Hans Peter Ring saidduring a presentation on the third-quarter results of Airbus two years,"parent company EADS. -Hans PeterThe abandoning of the programme will allow Airbus to write Ring, Airbusback into its books a provision of 192 million euros ($261 Finance Directormillion) it had made on the programme. Page 3
  4. 4. NEWSWATCH 11th November 2011 Volume 11; Issue 43The A340 first flew in April 1992 and in 1993 it scored a recordfor the longest non-stop flight, between Paris and Auckland,New Zealand.The Boeing 777 was launched two years later and had thesame capacity, but with only two engines it was more fuel-efficient.Source: – 11th November 2011 Airbus to Delay A350 By as Much as Six MonthsAirbus will delay the delivery of its A350 Extra Wide Body jetby as much as six months, the company said on Thursday. “Airbus willEADS, the parent company of Airbus, announced the schedule start finalslide in its third quarter earnings report. The company took a assembly of its$273 million charge in the third quarter for the A350 delay. A350XWB in theAirbus likely wont hand over its first A350XWB until 2014,about six months later than previously expected. first quarter ofThe delay will help "to ensure that the aircraft is mature and 2012. After thetrouble-free when delivered," Hans Peter Ring, Airbus Chief aircraft is built,Financial Officer, said in a conference call with reporters. it will enterLike Boeings 787, Airbus A350 is a mostly composite aircraft.The use of new technology and materials, as well as its flight testing anddependence on a global supply chain, forced Boeing to delay then isits 787 by more than three years. Boeing delivered the firstDreamliner jet in September. scheduled for itsAirbus A350 will challenge Boeings 777 as well as force Boeing first delivery into decide about developing a larger version of the 787. the first half ofAirbus will start final assembly of its A350XWB in the first 2014.”quarter of 2012. After the aircraft is built, it will enter flighttesting and then is scheduled for its first delivery in the firsthalf of 2014."Its not about simply meeting deadlines," Ring said. "We wontmove to the next phase without finishing the previous one."Source: – 10th November 2011 Page 4
  5. 5. NEWSWATCH 11th November 2011 Volume 11; Issue 43 1st Airplane of Peach Aviation Arrives at Kansai AirportThe first aircraft of Japanese low-cost carrier Peach AviationLtd. arrived at Kansai International Airport, Osaka Prefecture, “The Airbuson Thursday, prior to the launch of its services in March. A320, colouredThe Airbus A320, coloured white, purple and pink, will be usedfor crew training at its home airport until its inaugural flight, white, purplethe budget carrier partially owned by All Nippon Airways Co. and pink, will besaid. used for crewPeach Aviation, which plans to fly between Japanese cities andalso between Japan and South Korea, will introduce a total of training at its10 A320s. The airline also said it will use a model fitted with home airportnarrower seats than usual passenger planes to accommodate until itsmore passengers and no in-seat movie screens to cut costs. inaugural flight”Peach Aviation CEO Shinichi Inoue released a comment saying,"We would like to thank our fans and supporters for helping usreach this point and we are extremely happy about the arrivalof Peach Aviations first aircraft."Source: – 10th November 2011 ILFC Secures Sale-Leaseback Deal With IBA’s Comment: American Airlines “The operatorsInternational Lease Finance Corporation (ILFC), a wholly owned certainly holdsubsidiary of American International Group, Inc., announced the upper handtoday that it has completed an agreement with American these days inAirlines to purchase and leaseback 15 Boeing 737-800 Next terms of saleGeneration aircraft. The agreement covers certain aircraft thatAmerican had previously ordered and that have been delivered and leasebackor are scheduled for delivery during 2012. agreements, particularly in“ILFC is pleased to be able to support American Airlines in thisstrategic manner,” ILFC Chief Executive Officer Henri Courpron the crowdedcommented. “Our ability to work with one of the largest space forairlines in the world to execute fleet management decisions is A320/737NGcore to our business initiatives.” deals. It is likely“We are pleased to establish a strategic relationship with that AA haveILFC,” said AMR Chief Financial Officer Bella Goren. “This secured a verytransaction, which will provide financing for 15 of our new favourable deal- Page 5
  6. 6. NEWSWATCH 11th November 2011 Volume 11; Issue 43737-800 aircraft, is an effective means for diversifying ourfunding sources and we look forward to a long-term partnership despite itswith ILFC.” questionableThe Boeing 737 aircraft family has been widely received in the financial state”market. Earlier this week, ILFC took delivery of its 425th 737 – David Rusheaircraft, which was delivered to Korean Air and represented the690th Boeing aircraft to be delivered to ILFC in its nearly 40-year relationship with the manufacturer. ILFC is Boeing’slargest lessor customer and Boeing’s fourth largest customeroverall including airlines.Source: – 9th November 2011 Qatar Airways Hints at ‘Major’ Order For AirshowState-backed Qatar Airways has said it expects to make a“major” announcement at next week’s Dubai Airshow, aspokesperson for the carrier said on Tuesday. “The Gulf airlineThe Gulf airline already has orders outstanding for more than already has200 aircraft with a value in excess of $40bn at list prices, and orderssaid the announcement would be in line with its rapid outstanding forexpansion plans. more than 200“Qatar Airways will have a formidable presence at the Dubai aircraft with aAirshow,” a spokesperson for the airline said in a statement toQatar News Agency. The carrier will make a “major value in excessannouncement” at the event, the spokesperson added. of $40bn at listCEO Akbar Al Baker in October said the carrier will make a prices, and saiddecision on the Airbus A320neo at the event, after failing to thesign a deal for the plane at the Paris Air Show in June. announcementThe carrier has already signed a deal for the planemaker’s would be in lineA380, but the size and value of the order will not be disclosed with its rapiduntil the Dubai show, which begins on November 13th. expansionQatar Airways is one of the world’s largest buyers of new plans.”aircraft, with orders for 80 Airbus A350s, six Boeing 777-300ERand five Airbus A380s, among others.The Doha-based carrier operates about 100 aircraft to morethan 100 destinations worldwide, and plans to serve more than120 routes by 2013 with a fleet exceeding 120 planes. Page 6
  7. 7. NEWSWATCH 11th November 2011 Volume 11; Issue 43Emirates Airline, Dubai’s flagship carrier, has also said it islikely to place orders for new planes at the show. The largestinternational carrier has around 199 planes on order, scheduledfor delivery through to 2019, but has said it may expand itsfleet further.“I would say it’s more positive that we might sign something,”Sheikh Ahmed bin Saeed Al Maktoum told reporters inSeptember.Source: Claire Ferris-Lay, – 8th November 2011 CIT Announces Order With Embraer For Up to 30 E-JetsCIT Group Inc., a global leader in transportation finance, today “After moreannounced that CIT Aerospace placed an order for up to 30 than 1,000 firmEmbraer 190 and/or Embraer 195 jets, ten of which are firm. orders, spreadDeliveries are scheduled through 2015. over 60“We are pleased to announce our first direct order with operators in 40Embraer for the E190/E195 aircraft, which will enable CITAerospace to offer an even more diverse set of products to its countries, thiscustomers,” said C. Jeffrey Knittel, President of Transportation investment byFinance at CIT. “This order allows CIT Aerospace to continue to CIT is furthermaintain one of the youngest and most technologicallyadvanced fleets in the industry and will help us meet our confirmationcustomers’ increased demand for this size aircraft.” that the E-Jets"Embraer is very pleased to have such an important lessor as have achieved aCIT Aerospace join the E-Jet program, said Paulo Cesar de high level ofSouza e Silva, Embraer President, Commercial Aviation. “After attractivenessmore than 1,000 firm orders, spread over 60 operators in 40countries, this investment by CIT is further confirmation that for the top-tierthe E-Jets have achieved a high level of attractiveness for the investortop-tier investor community." community."CIT owns or finances a fleet of approximately 300 commercialaircraft. With this new order, the Company now has a totalorder book of 172 aircraft scheduled for delivery through 2019.Source: – 7th November 2011 Page 7
  8. 8. NEWSWATCH 11th November 2011 Volume 11; Issue 43 IBA Group News Press Releases & Presentations can be viewed in the News & Views section of our website, www.ibagroup.comConference Dates20th – 22nd November 2011 – 43rd African Airlines Association Annual General Assembly, Marrakech - Ben Jacques andAdrian Lee will attend1st – 2nd December 2011 – Aviation Investors Summit, London – Phil Seymour and Owen Geach will be speaking24th – 26th January 2012 – Euromoney 14th Annual International Aviation Finance Conference, Dublin – IBA is sponsoringand will be speaking - IBA’s Phil Seymour, Owen Geach, Steve Fisk and Dr Stuart Hatcher will attend7th - 8th February 2012 – 2nd Annual International Corporate Jet and Helicopter Finance Conferrence, London – PhilSeymour, Owen Geach, Ben Jacques and Mark Wooller will attend Phil Seymour’s Notes on the WeekWhat a few weeks we have had: New Greek leadership, new Italian leadership; a Eurozone that is struggling toprovide a robust policy, and is creating a ripple around the World, the so called Arab Spring has continued into theWinter, new Libyan leadership, etc, etc.Volatile airline results this week: Asiana posting a loss, Thai improving and Air France KLM just about squeezing aprofit, but 95% down on the same period, mostly due to cargo traffic down and fuel price increases. To cap it allEADS will cease production of the A340! What is the World coming to?!I will spend the weekend rummaging through various cupboards and drawers as I am pretty sure I still have someGreek Drachmas and Italian Lire hidden away somewhere, looks like I might be able to spend it after all.Phil Publications – 2011 Editions Please contact for more information.Aircraft Values Book Published in February 2011 & August 2011 £660 per yearLease Rate Digest Published in February 2011 & August 2011 £360 per yearEngine Values Book Published in April 2011 £650 per yearMaintenance Cost Journal Published Quarterly £200 per year “Newswatch” is a free weekly round-up collated by IBA Group Ltd. Go to our website to find the last year editions of Newswatch archived. To either SUBSCRIBE or UNSUBSCRIBE to this newsletter, please send an email to with your request.The items in this document do not necessarily represent the opinion of IBA, and is intended to be for information purposes only. Therefore, IBA assumes no responsibility or legal liability for any action taken, or not taken, by the addressee, or by any other party, with regard to the information and views contained. As a leading independent aviation consultancy, IBA Group Ltd. offers technical advice, commercial business solutions & asset valuations for our worldwide client base. Compiled & Edited by Mike Yeomans Tel: +44 (0)1372 224488 Fax: +44 (0)1372 224489 Page 8