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Wednesday 20th September 2017
Dublin Aviation Summit
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Intrepid closes AFIC-backed financing
Intrepid Aviation has closed its first Aircraft Finance Insurance Consortium (AFIC) backed-financing for one 747-8 Freighter (747-8F) on long-term lease to AirBridge Cargo Airlines. The financing was arranged and underwritten by ING Capital and Apple Bank.

This is the second of two new 747-8F aircraft that Intrepid acquired from Boeing and leased to ABC this year.

The transaction represents the first non-payment insurance backed financing ever closed by an operating lessor and further diversifies Intrepid’s banking group with the addition of ING Capital.

Available exclusively through Marsh, AFIC provides an alternative aircraft finance insurance product for new aircraft deliveries and is underwritten by four global insurance companies, Allianz, AXIS Capital, Sompo International (formerly Endurance), and Fidelis. AFIC has closed nine deals so far and is set for a rapid increase in business. Airline Economics spoke to Bruce Fine, Global Leader of AFIC for Marsh, in Issue 37 shortly after it was announced that Bob Morin was joining the team. Click here to read the article.

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Airline News
Ryanair publishes list of flights to be cancelled up to end of October
On September 18, Ryanair published the full list of flight cancellations between September 21 and October 31. The low-cost carrier said that it has allocated these cancellations where possible, to Ryanair’s bigger base airports, and routes with multiple daily frequencies so that Ryanair can offer disrupted customers the maximum number of alternate flights and routes. The routes are mainly from Barcelona, Brussels Charleroi, Dublin, Lisbon and London Stansted. All customers impacted by the cancellations were emailed by Ryanair with offers of alternative flights or full refunds, and details of their EU261 compensation entitlement.

Ryanair has apologised continuously to passengers but maintains that the cancellations will “affect less than 2% of all customers over the next six weeks, and the majority of these passengers will be offered alternative flights on the same or next day.”

“While over 98% of our customers will not be affected by these cancellations over the next 6 weeks, we apologise unreservedly to those customers whose travel will be disrupted, and assure them that we have done our utmost to try to ensure that we can re-accommodate most of them on alternative flights on the same or next day,” said Ryanair’s Michael O’Leary. He reiterated that the airline is “not short of pilots” but that it “messed up the allocation of annual leave to pilots in Sept and Oct because we are trying to allocate a full year’s leave into a nine-month period from April to December.” O’Leary reassured customers that this issue would not recur in 2018 as Ryanair goes back onto a 12-month calendar leave year from 1st Jan to 31st December 2018.

“This is a mess of our own making,” he said. “I apologise sincerely to all our customers for any worry or concern this has caused them over the past weekend. We have only taken this decision to cancel this small proportion of our 2,500 daily flights so that we can provide extra standby cover and protect the punctuality of the 98% of flights that will be unaffected by these cancellations.”

Air Malta enters the low-cost market
Air Malta has dropped its fare to remain competitive with other low-cost airlines. The flag carrier’s ‘Go-Light’ option offers passengers the chance to fly with a 10kg hand luggage from just €39.

Air Malta has said it will continue to give out free water and bread rolls until the end of the year. After that the price will no longer cover an all-inclusive trip, but just the ticket fare.

Wideroe buys one Dash8
Avmax has recently sold one Dash8-103 msn 501 to Wideroe, Norway.

Leasing News
Magi Partners announces rebrand, name change and new website www.magi.aero
Magi Partners, the aircraft finance and leasing specialist, has today unveiled its new corporate identity and website. Effective 20 September the company name is changed to Magi Aviation Capital Limited.

“The new name better represents where we are today and makes clearer our business focus and Magi’s role in the aviation industry,” said Peter Vardigans, Co-founder and Partner. “We believe that this will resonate with our existing and future clients as our company continues to grow and evolve as an originator and manager. Just three years after closing our first deal as Magi Partners, we believe we have established our reputation with a track record of delivery by our highly experienced team. We look forward to further developing our origination, structuring and aircraft management capability through the provision of innovative finance and leasing solutions to the global aviation community.”

TrueNoord receives new investment from Aberdeen Asset Management
TrueNoord, the regional aircraft lessor, has announced that Aberdeen Asset Management, the global asset management firm and part of the newly merged investment company – Standard Life Aberdeen, will be co-investing in the company alongside BlackRock who joint as investor in June this year, and Bregal Freshstream who invested in the company in 2016.

As TrueNoord intensifies the pace of its acquisition strategy in the regional aircraft sector, the company states that this additional investment will further facilitate the intended growth of its regional aircraft portfolio under lease. It enables TrueNoord to facilitate airlines seeking specialist regional programmes.

TrueNoord recently acquired regional aircraft with leases attached which are operated by AeroMexico, TUI (Jetairfly) Belgium, Air Astana, HOP! and Regional Jet.

Chairman of TrueNoord, Nigel Turner, comments: “We are delighted to have further institutional investment on board supporting our aims in the regional aircraft sector. This new investment from Aberdeen Asset Management, will underpin TrueNoord’s defined acquisition strategy of Embraer / Bombardier / ATR aircraft types. It will support our expansion across Europe, as well as key growth markets like South East Asia and Latin America where the demand for regional aircraft is ever increasing.”

AviaAM Leasing delivers one A320 to Aeroflot by SkyCo International Financial Leasing
AviaAM Leasing has completed the arrangement of aircraft delivery to Aeroflot. The aircraft was acquired and leased to the carrier by SkyCo International Financial Leasing.

“Conducting business between Asia and Europe is always about trustworthy partnerships and know-how in the business peculiarities. The recent delivery in partnership with SkyCo International Financial Leasing is clear-cut proof of that. Our long-standing partnership with Aeroflot laid a strong ground for the start of the project, while combined knowledge of the leasing companies led to its success. We are delighted to continue supporting the growth of Aeroflot’s operations in diverse ways,” comments Tadas Goberis, CEO and Chairman of the Board at AviaAM Leasing.

“Cooperation in aircraft leasing is inevitable and one always looks for experience, as well as flexibility in choosing the partner. It is our first delivery for Aeroflot and we are delighted that it was an incredibly smooth one working hand-in-hand with AviaAM Leasing,” commented SU MINGHUI, General Manager of SkyCo International Financial Leasing.

SkyCo International Financial Leasing was formed in 2015 as a joint venture between Guangdong Airport Authority, Guangdong Aerocity Holding and other shareholders. It has ever since successfully started its operations in aircraft leasing market.

Avolon reprices $5bn term loan B
Avolon has successfully repriced its senior secured US$5.0 billion term B-2 loan facility (the TLB-2). TLB-2 was issued with a tenor of five years and originally priced in March 2017 at LIBOR plus 2.75% with a LIBOR floor of 0.75%. This has now been repriced at LIBOR plus 2.25% with a LIBOR floor of 0.75%. The repricing is expected to close around October 4, 2017. The repriced TLB-2 is in addition to Avolon’s senior secured US$500 million term B-1 loan facility entered into in March 2017.

This repricing follows the pricing of a private offering by Avolon’s wholly-owned subsidiary, Park Aerospace Holdings of US$1.25 billion of unsecured senior notes on September 14. The offering was increased from an initial target size of US$1.0 billion. These notes are in addition to the unsecured senior notes issued in January 2017, which include US$1.75 billion, aggregate principal amount, of 5.25% senior notes due 2022 at par; and US$1.25 billion, aggregate principal amount, of 5.50% senior notes due 2024, at par. The offering increases the level of unsecured debt within the Avolon capital structure.

Year to date, including the US$1.25 billion notes, Avolon will have raised US$14 billion of total capital. This includes both new equity and new debt, US$9.75 billion of which will have been raised in the capital markets.

“We are delighted to have successfully repriced our US$5 billion Term Loan B and completed our second unsecured issue in the debt capital markets this year,” said Andy Cronin, Avolon Chief Financial Officer. “This will bring our total capital raised in 2017 to US$14 billion. Our target is to continue to increase our balance of unsecured funding and to grow our unencumbered asset pool.”

Environment News
Sustainable aviation fuels one step closer
Responding to the announcement that the Renewable Transport Fuel Obligation will include sustainable aviation fuels in future, Chief Executive of the AOA, Karen Dee said:

“Sustainable aviation fuels are one step closer in the UK now they will be included in the Renewable Transport Fuel Obligation. This will encourage investment in the production and supply of sustainable aviation fuels, enabling the industry to fly cleaner and greener.

“Analysis by the Sustainable Aviation coalition has shown that sustainable fuels can help us achieve a CO2 emissions reduction of up to 24% by 2050. This is a major step towards our goal of halving net CO2 emissions by 2050, while facilitating the expected passenger growth. It will also help with air quality, as sustainable fuels have significantly lower particulate emissions.

“This announcement will create green jobs in the UK. A domestic sustainable aviation fuels industry could generate a Gross Value Added of up to £265 million a year by 2030 and support up 4,400 jobs.”

Insurance News
Global Aerospace launches aviation professional services liability insurance
Global Aerospace, which provides aerospace insurance, has introduced Aviation Professional Services Liability insurance for the aerospace industry. The coverage will be available to aerospace contractors, aircraft maintenance providers, auditors and engineers, among others.

The Global Aerospace Aviation Professional Services Liability policy will provide the industry with coverage for financial loss and defence costs arising from acts, errors or omissions in performing aviation professional services. Financial loss arising from these activities is a primary exposure for aviation specialists and Global Aerospace has developed this new offering to address the risks involved.

Chris Proudlove, Senior Vice President, manager Northeast regional office and UAS risks at Global Aerospace commented, “Aviation Professional Services Liability insurance is one of the most important business investments aviation professionals can make. Global Aerospace is excited to lead the way by introducing this solution to our industry.”

Cargo News
IATA: Quarterly Cargo Market Analysis
In its latest quarterly Cargo Market Analysis, the International Air Transport Association (IATA) reports that annual growth in air freight tonne kilometres (FTKs) accelerated to 11.8% in the three months ended July. Airline heads of cargo remain positive about the outlook over the year ahead, although indicators suggest that the current cyclical upturn in year-on-year FTK growth may be nearing a peak. Rising cargo yields are helping to offset upward pressure on breakeven loads from increased input prices. Given the recent increase in freight loads and freighter utilization, this is supporting financial performance.

MTU Maintenance
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Airline News
Buffair Services buys one Fokker F50
Avmax has recently sold one Fokker F50, msn 20243, ex Flugfelag Islands EHF to Buffair Services Limited, Kenya.

Charles Taylor Aviation Asset Management
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Maintenance News
Air Canada and AAR conclude $500M CAD agreement for airframe maintenance in Québec, Canada
AAR and Air Canada have signed a 10-year agreement to provide airframe maintenance for the airline’s Airbus narrow-body fleet of A319, A320 and A321 aircraft, as well as a new five-year agreement for Air Canada’s Embraer E-190 fleet. AAR will perform the work at its Maintenance, Repair and Overhaul (MRO) facility at Trois-Rivières Airport in Québec, previously known as Premier Aviation.

The work to be performed on Air Canada’s fleet of 125 narrow bodies will require approximately 350 aircraft mechanics at AAR’s Trois-Rivières facility. The total value of the contract over its term is estimated to be approximately $500 million CAD.

“We have been very pleased with the quality and turnaround time of AAR and the Trois-Rivières facility for the work performed on our narrow-body fleet over the past five years, and are especially delighted that additional work can now be performed in Trois-Rivières Québec,” said Richard Steer, Senior Vice President, Operations at Air Canada. “This contract further supports the development of Québec’s aviation sector by encouraging industry expertise and job growth in the coming years, and Air Canada is proud to be a significant contributor to the economy of the region.”

“We are honored by Air Canada’s confidence in AAR’s airframe heavy maintenance expertise, and look forward to continuing our long-term relationship,” said Chris Jessup, Chief Commercial Officer, AAR.

AAR to acquire two MRO facilities from Premier Aviation
AAR has agreed to acquire two of Premier Aviation’s aircraft maintenance, repair and overhaul (MRO) facilities – one at Trois-Rivières Airport in Québec and one at Windsor International Airport in Ontario.

“We are excited to add an experienced workforce and two world-class facilities to our award-winning MRO network, and we look forward to growing our position in, and bringing more flexibility and value to, the Canadian market,” said John Holmes, President & Chief Operating Officer, AAR. “The culture of continuous improvement and execution excellence at these facilities is consistent with AAR’s commitment to the highest levels of service.”

Premier Aviation established the MRO facility in Trois-Rivières in 2002 and expanded it to 150,000 square feet in 2011. The facility can accommodate up to seven narrow-body aircraft. Premier began operating in Windsor in 2012 in a new 143,000-square-foot hangar with full back shop capability and capacity for six narrow-body aircraft. The facilities have made significant investments in tooling over the past few years and currently employ over 300 well-trained aviation mechanics and personnel who will retain their positions based on expected workload.

“We are honored that a company with the reputation, breadth and depth of AAR has recognized the quality of our MRO facilities, and we are pleased that the customers and employees of these facilities will continue to be well-supported,” said Ronnie DiBartolo, President of Premier Aviation. “This transaction also allows Premier to focus its resources on future areas for growth at our other two MRO facilities.”

Holmes added: “This Canadian presence will be complementary to our U.S. MRO operations and workforce.”

Technology News
Airbus reaches milestone number of aircraft flying in North America
The number of in-service Airbus commercial aircraft in North America reached a new high of 1,500 following the delivery of an A321 to American Airlines on Friday. The company delivered its first North American-operated aircraft to U.S.-based Eastern Airlines in 1977 and has gone on to tally more than 2,000 orders with 25 airline companies and lessors in the region.

A celebration was held at the Airbus U.S. Manufacturing Facility in Mobile, AL, with delivery teams from American Airlines and Airbus marking the milestone.

Paul Oliver, Vice President-Customer Services for Airbus Americas, praised the teamwork of both Airbus and American citing their commitment to hard work in advancing the future of airline transportation. “This milestone showcases the continued growth of commercial aviation in North America – and our four decades of commitment to providing the right aircraft at the right time with benchmark customer support for our customers. We’re proud to recognize this milestone with our partners at American Airlines, and it’s gratifying for it to happen with an aircraft built in the U.S.”

Joe Maloy, Director of Fleet Acquisitions, Dispositions and Records for American Airlines was in Mobile to accept the aircraft. “As the world’s largest operator of Airbus aircraft, American Airlines is proud to accept the 1500th in-service Airbus aircraft in North America, and that the aircraft was built at the state-of-the-art manufacturing site in Mobile, Alabama. American greatly values our relationship with Airbus. Congratulations to Airbus for reaching this milestone!” he said.

In its lifetime, Airbus has globally received 17,287 orders across its product line, with more than 10,000 delivered. Over the next 20 years, Airbus predicts that more than 5,900 new aircraft will be required in North America.

Airbus U.S. Manufacturing Facility Receives 50th Shipset
The Airbus U.S. Manufacturing Facility in Mobile has reached a key milestone as it has received the 50th shipset of major component assemblies (MCAs) just two years after taking delivery of the first shipset. The components will eventually become the 50th Airbus aircraft produced in the U.S.

“The arrival of the 50th shipset is right on time to a schedule that was created more than two years ago,” said Daryl Taylor, Vice President and General Manager of the Airbus U.S. Manufacturing Facility. “The production team here in Mobile, and our Airbus colleagues around the world, have continued to work together to ensure we keep our promises to our customers. I am proud of what we’ve achieved together.”

A shipset includes front and aft fuselage sections, a vertical and horizontal tailplane, and wings. The MCAs, which are manufactured in various facilities around Europe using parts and systems from around the world (including the U.S.), are brought together and shipped from Hamburg, Germany, to the Port of Mobile and transported by road to the Airbus U.S. Manufacturing Facility.

Since production began in 2015, Airbus has delivered 37 aircraft from Mobile to four customers: American Airlines, Delta Air Lines, Jetblue and Spirit. The facility will produce four aircraft a month by the fourth quarter of 2017. In addition to Mobile, Airbus delivers A320 Family aircraft from Hamburg, Germany; Toulouse, France; and Tianjin, China.

Thomas Global secures long-term supply of new Cathode Ray Tubes for Cockpit Displays
Thomas Global has confirmed long-term supply arrangements with Toshiba, the OEM of cathode ray tubes (CRTs) for use in avionic cockpit display units. The long-term supply of factory-new OEM CRTs underpins Thomas Global’s long-term support commitment for a range of CRT-based avionic displays used in narrow and wide bodied commercial, business and military aircraft.

“Thomas Global is pleased to have secured one of the industry’s largest orders of new avionic CRTs, meaning that we can offer operators continued, best-in-class support across a range of Honeywell, Thales, Rockwell Collins and GE CRT-based cockpit displays for years to come” said David Barnes, COO of Thomas Global. “We will ensure that our customers continue to have cost-effective CRT display support options, based on our strategic supply of high-quality Toshiba CRTs. As industry attention turns to newer technologies, we aim to provide an efficient end-of-life for these critical displays.”

People News
Vedder Price expands global transportation finance practice with London Partner Dylan Potter
Attorney Dylan Potter has joined Vedder Price as a partner in its Global Transportation Finance group in the firm’s London office.

Potter advises on a broad range of financing, leasing, capital markets and fund products involving commercial and corporate aviation, shipping, satellites, utilities and industrial equipment. He represents lenders, export credit agencies, operating lessors, lessees and equity investors in these sectors.

“I am excited to join Vedder Price as a Partner in its market leading transportation finance practice,” said Potter. “I look forward to serving my clients alongside my new colleagues and helping grow our aviation, maritime and equipment finance practices.”

Potter joins from the Structured & Asset Finance practice in Allen & Overy’s London office. He has been involved in many innovative and award-winning transactions, including the first export credit supported Sukuk, which remains the largest ECA supported capital markets offering in the aviation sector, as well as large scale satellite financings, portfolio and company acquisitions and divestments involving multiple aircraft and vessels, distressed debt transactions, restructurings and structured, tax-based and cross-border leasing.

“Dylan is a great fit for our London transportation finance practice,” said Dean N. Gerber, Vedder Price Board of Directors member, Executive Committee Vice Chair, and Chair of the firm’s Global Transportation Finance team. “His experience further enhances our capabilities to serve our clients on an international level and we look forward to what he offers to our growing client base.”

In addition to Potter, the London office has also welcomed solicitors Ryan Cheung and Georgia Harris to the Global Transportation Finance group.

A4A names Vaughn Jennings as vice president, communications
Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, has promoted Vaughn Jennings to serve as the new vice president, communications.

Since joining A4A in November 2012 as Managing Director for Government and Regulatory Communications, Jennings has played an integral role in successfully developing, driving and advancing the industry’s public and media relations priorities on a wide range of issues important to A4A’s member airlines. Prior to joining A4A, Jennings was a long-time Capitol Hill aide, holding several positions with senior Members of Congress, including House Leadership.

As Vice President, Jennings will oversee the department’s advocacy campaigns and its two managing directors, with a focus on further expanding A4A’s strategic communications initiatives and earned media outreach.

Jennings assumes his new role effective immediately and will report to Todd Burke, A4A’s senior vice president, communications.

“Vaughn is an expert communicator, who completely understands the intricacies of the airline industry and Capitol Hill,” Burke said. “He is a vital part of our current communications department and by stepping into this new role, his talent and leadership skills will only continue to grow, to the benefit of our A4A team, our member airlines and the traveling public.”

Jennings received his Bachelor of Arts degree in political science from Wake Forest University.

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Airline News
ANZ hit by fuel disruptions
Air New Zealand has been forced to cancel 41 flights since Sunday after a pipeline shut-down from a refinery in Northland, causing cancellations for up to 3000 Air New Zealand customers and disruption for a further 6000 people.

Air New Zealand staff in Melbourne have been working to contact customers during the fuel crisis.

The airline had imposed a restriction on long-haul ticket sales late Tuesday, but lifted this on Wednesday, although some restrictions remained on some trans-Tasman and Pacific Island services.

Maintenance News
HAECO Landing Gear Services completes first 747-8 landing gear repair and overhaul
HAECO Landing Gear Services, a HAECO Group company that specialises in repair and overhaul of landing gear, has recently completed the first Boeing 747-8 landing gear repair and overhaul.

In support of the Boeing Landing Gear Overhaul and Exchange Programme, HAECO Landing Gear Services becomes the first MRO in the world to provide service to the Boeing 747-8 aircraft type.