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27th November 2018

UTC to split into three independent companies; completes acquisition of Rockwell Collins
United Technologies (UTC) has completed its acquisition of Rockwell Collins and has announced its intention to separate its commercial businesses, Otis and Carrier (formerly CCS), into independent entities. The separation will result in three global, companies: United Technologies, comprised of Collins Aerospace Systems and Pratt & Whitney, which will be the systems supplier to the aerospace and defensce industry – Collins Aerospace was formed through the combination of UTC Aerospace Systems and Rockwell Collins; Otis, which manufactures elevators, escalators and moving walkways; and Carrier, a global provider of HVAC, refrigeration, building automation, fire safety and security products with leadership positions across its portfolio.

“Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth, lead its industry in innovation and customer focus, and maximize value creation,” said United Technologies Chairman and Chief Executive Officer Gregory Hayes. “Our products make modern life possible for billions of people. I’m confident that each company will continue our proud history of performance, excellence and innovation while building an even brighter future.  As standalone companies, United Technologies, Otis and Carrier will be ready to solve our customers’ biggest challenges, provide rewarding career opportunities, and contribute positively to communities around the world.”

United Technologies, comprising Collins Aerospace and Pratt & Whitney, had combined sales of $39.0 billion in 2017 on a pro forma basis.  Collins Aerospace supplies electrical, mechanical and software solutions across all major segments of the aerospace industry and serves commercial and military customers.  Pratt & Whitney is the aircraft propulsion manufacturer with a growing number of engine programs including the Geared TurbofanTM commercial engine and the F135 military engine for the F-35 Joint Strike Fighter program.

The proposed separation is expected to be effected through spin-offs of Otis and Carrier that will be tax-free for UTC shareowners for US federal income tax purposes.

Gregory Hayes will oversee the transition and will continue in his current role as UTC Chairman and CEO following the separation.

The three independent companies will be appropriately capitalised with the financial flexibility to take advantage of future growth opportunities. Each independent company is expected to have a strong balance sheet and to maintain an investment grade credit rating.  Any existing or potential liabilities that are not associated with a particular entity will be allocated appropriately to each of the businesses.

The separation is expected to be completed in 2020, with separation activities occurring within the next 18-24 months.  There can be no assurances regarding the ultimate timing of the separation or that the separation will be completed.

Victoria Tozer-Pennington

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Airline News
Turkish Airlines orders three additional 777s
Turkish Airlines has ordered three 777 Freighters, boosting its cargo fleet.”We are excited to expand our efficient cargo fleet with the 777 Freighter. This aircraft has contributed greatly to Turkish Cargo, Turkish Airlines’ successful sub brand, becoming the fastest-growing air cargo carrier in the world. The additional aircraft will provide us more flexibility to serve even more destinations as we continue to grow our global freight network,” said İlker Aycı, Turkish Airlines Chairman of the Board and the Executive Committee.

The new order comes days after Turkish Airlines posted record profits for the first nine months of 2018 on strong passenger and cargo demand. The carrier’s air freight business saw a 25% tonnage increase and a 29% revenue increase compared to the same period a year ago. The results extend the airline’s success in recent years as Turkey has become one of the largest and fastest-growing aviation markets.

In line with the rapid growth, Turkish Airlines has steadily expanded its current and future fleet. Last January, the carrier announced the order of three 777 Freighters. Two months later, Turkish finalized an order for 25 787-9s and five options to prepare for growing demand at Istanbul’s third airport.

“Turkish Airlines has achieved significant success over the past decade. In addition to introducing innovations that have powered the growth of Turkey’s commercial aviation sector and anchored a new state-of-the art airport, the airline is delivering outstanding results and rising in the ranks of elite airlines. We are extremely honoured that Turkish Airlines has placed its trust and confidence in Boeing’s flagship airplanes: the 737 MAX, the 777 and the 787 Dreamliner,” said Kevin McAllister, president and chief executive officer of Boeing Commercial Airplanes.

To support the long-term growth of the Turkish aerospace industry and strengthen Boeing’s presence in the country, Boeing launched a strategic partnership program in Turkey last year, called the National Aerospace Initiative. Aligned with the targets of Turkey’s Vision 2023 that set for the 100th anniversary of Turkish Republic’s foundation, the initiative lays out a strategic collaboration framework in four key areas: industrial development, technology acceleration, services collaboration and advanced-skill training.

In line with these goals, Boeing is planning to open an engineering center in Istanbul that would specialize in research and support Turkey’s growing aerospace capability. The company also recently expanded its collaboration with Turkish Technic, the maintenance arm of Turkish Airlines. Under the agreement, Turkish Technic becomes a strategic supplier for Boeing’s Global Fleet Care program, providing operators with line maintenance, heavy maintenance, component service and repair for multiple aircraft models. Additionally, Boeing and Turkish Technic will partner to train and certify aircraft technicians.

“We continue to expand our commitment to grow in Turkey, together with Turkey. Our new engineering center and our growing cooperation in so many areas with the Turkish aerospace sector reflect our confidence in the country’s capabilities,” said McAllister.

TAP takes delivery of the first A330neo
TAP Air Portugal has taken delivery of the world’s first new generation widebody A330neo, powered by Trent 7000 engines. The Portuguese carrier will take delivery of a further 20 A330-900s in the coming years.

TAP Air Portugal’s first A330-900 is leased from Avolon.

John Higgins, Avolon President and CCO, said: “Avolon was one of the launch customers of the A330neo in 2014 and we are proud to deliver the world’s first A330neo to TAP Airlines. The A330neo is a new technology twin-aisle aircraft that will generate savings through reduced fuel burn; unit cost improvements; and offer TAP Airlines greater opportunities to carry more passengers further. We have a strong partnership with TAP and we look forward to strengthening that relationship in the period ahead.”

The new aircraft features 298 seats in a three-class lay-out with 34 full-flat business class, 96 economy plus and 168 economy class seats. The aircraft will be deployed on routes from Portugal to the Americas and Africa.

“I am delighted to welcome the first Airbus A330-900 into our expanding fleet. Its unbeatable economics and efficiency will power our business forward,“ said Antonoaldo Neves, TAP Air Portugal CEO. “The A330neo will give us a lot of operational flexibility thanks to its commonality with the other Airbus aircraft in our fleet. This aircraft will be the first equipped with the new Airspace cabin, which is a new concept shaped to meet TAP’s ambition to offer the best product in the industry to our passengers,“ he added.

Rolls-Royce also celebrated the delivery of the aircraft, which features the exclusive
Trent 7000 engine type.  The 68-72,000lb thrust Trent 7000 delivers a step change in performance and economics compared to the Trent 700. Benefitting from a bypass ratio double that of its predecessor, the Trent 7000 will improve specific fuel consumption by 10%, and will significantly reduce noise.

Chris Cholerton, Rolls-Royce, President – Civil Aerospace, said: “We are proud to power the delivery of the A330neo and warmly congratulate both TAP Air Portugal and Airbus on this delivery milestone. We are now focused on supporting TAP Air Portugal and ensuring a smooth entry into service that demonstrates all the outstanding attributes of this aircraft.”

Air France announces new service to Belgrade 
For the 2019 summer season (March 31 to October 26, 2019), Air France will offer its customers Belgrade (Serbia) on departure from Paris-Charles de Gaulle. This route will be operated with one daily flight from 31 March 2019.

In addition, with its partner Air Serbia, Air France customers will benefit from a total of 21 weekly flights between Paris and Belgrade (7 flights operated by Air France and 14 code-share flights operated by Air Serbia).

Adria Airways signs LOI for 15 SSJ100s; signs MRO JV MOU
Adria Airways has signed a Letter of Intent (LOI) for 15 SSJ100s. The delivery is to be started at the beginning of 2019. They will be handed over under a long-term lease arrangement. In addition, the airline and Sukhoi Civil Aircraft Company signed a Memorandum of Understanding (MOU) upon establishing an SSJ100 Maintenance and Repair Organization (MRO) at Ljubljana Airport in Slovenia.

Sukhoi Civil Aircraft Company President Alexander Rubtsov, the CEO of ADRIA Airways Holger Kowarsch and AA Aviation’s Managing Director Dr. Martin Vorderwulbecke indicated that the agreements signed opened a new chapter towards a strategic relationship between the Parties

“It is our pleasure to partner with JSC Sukhoi Civil Aircraft Company,” said Kowarsch. “They will totally support Adria Airways´ development strategy. During the past two years we were analysing the SSJ100 type and came to the conclusion that all the technical and operational characteristics of this aircraft would suit best for our strategic goals.”

He also added that SSJ100 operation would allow to offer more of the current CRJ and Airbus aircraft for ACMI service.

Rubtsov added: “We realise that the SSJ100 after-sales support at the entry to the European market should be organised profoundly and professionally. Together with Adria Airways we will create a joint maintenance and repair organisation for SSJ100 at the Ljubljana Airport. That service platform will secure the operational reliability of SSJ100 aircraft in Europe.”

Air France-KLM and China Eastern sign extension of their joint venture 
On Monday, November 26, Air France-KLM and China Eastern Airlines signed an agreement to extend their joint venture partnership. Among those present were Liu Shaoyong, Chairman of China Eastern Airlines, Tang Bing, EVP of China Eastern Airlines, Anne-Marie Couderc Chairman of Air France-KLM and Air France, Benjamin Smith, CEO of Air France-KLM and Air France, and Pieter Elbers, KLM President and CEO.

As part of this enhanced agreement, the three SkyTeam airlines (Air France, KLM, and China Eastern Airlines) will extend their joint venture partnership as of January 1, 2019 on two additional routes, Paris-Wuhan and Paris-Kunming. Air France, KLM, and China Eastern will offer their respective customers new codeshare and connection opportunities. Air France-KLM and China Eastern are thus continuing to develop their strategic commercial partnership aimed at offering an ever-expanding range of services to customers travelling between Europe and China.

“I am very pleased to be finalizing this agreement with China Eastern,” said Benjamin Smith, CEO of Air France-KLM and CEO of Air France. “It solidifies our objectives, as outlined in July. Our strong and long term strategic partnership with China Eastern Airlines offers our customers even more extensive and harmonized benefits across all airlines. China is an essential market for the Air France-KLM Group, with strong growth, and we must be able to offer our customers the best possible travel experience.”

Liu Shaoyong, Chairman of China Eastern Airlines added: “It is really a pleasure to witness this historical moment in cooperation with Air France and KLM. The document we signed today is not only an extension of our Joint Venture Agreement, but also an indication of our continuous joint commitment to provide best possible service to our customers, with better connections and a larger variety of flight choice.    Entering into this second phase of Joint Venture, China Eastern Airlines, will further enhance the cooperation with Air France and KLM, and jointly serve the travelling public with our best resources.”

Air France and China Eastern started their cooperation in 2000 in the form of a codeshare agreement on the Paris-Shanghai route. The partnership was formalised in 2012 thanks to a joint venture agreement. KLM joined this joint venture in 2016, extending the agreement to the Amsterdam-Shanghai route.

Since October 2017, China Eastern has held 8.8% of Air France-KLM’s share capital, and has one member on the Air France-KLM Board of Directors.

Norwegian launches the UK’s cheapest flights to Brazil 
Norwegian has launched the UK’s first low-fare flights to Brazil with a brand-new direct route from London to Rio de Janeiro from £240 one way.

From Sunday 31 March 2019, Norwegian says that it will “break the monopoly” on flights to Brazil with a new service to Rio de Janeiro–Galeão International Airport (GIG) from London Gatwick Airport. Four weekly flights will operate on Monday, Wednesday, Friday and Sunday using Boeing 787-9 Dreamliner aircraft with up to 344 leather seats in an economy and premium cabin configuration.

Bjorn Kjos, Chief Executive Officer at Norwegian said: “We’re building on our expansive global network by launching the UK’s most affordable flights to Brazil and making South America available to even more consumers.

“Our new Rio de Janeiro route breaks the monopoly on direct flights between the UK and Brazil as we’re committed to lowering fares and making travel more affordable for all holidaymakers and business travellers.

“Brazil is a fantastic addition to our global network and we look forward to welcoming customers on board.”

Loftleidir Icelandic’s subsidiary submits binding offer for majority shares of Cabo Verde Airlines
Loftleidir Icelandic, a subsidiary of Icelandair Group, will, together with Icelandic investors, submit a binding offer for a 51% of the shares in Cabo Verde Airlines on Cape Verde. Authorities in Cape Verde and Loftleidir Icelandic have been cooperating for some time. In August 2017, Loftleidir Icelandic signed a management agreement with the Cape Verde Government on restructuring Cabo Verde Airlines. The agreement also aimed to strengthen the international airport in Cape Verde, to develop the islands as a promising tourist destination and to build an international hub for connecting flights. Coinciding with the agreement, it was announced that the company was due to be privatised. Cabo Verde Airlines already has operating licenses to fly scheduled flights to Europe and the United States.

The purchase price is confidential. However, the acquisition would partly be paid for by the work already completed by Loftleidir Icelandic’s employees. The acquisition is made through a new company, Loftleidir Cabo Verde. Loftleidir Icelandic holds a 70% stake in the company, and other investors 30%. Loftleidir Icelandic’s acquisition of Cabo Verde Airlines does not have significant effect on Icelandair Group’s financial statements since Cabo Verde Airlines will not be reflected in the group’s consolidated financial statements. The share will classified as an associated company.

Árni Hermannsson, Managing Director of Loftleidir Icelandic, said: “The participation in the acquisition of a majority share in Cabo Verde Airlines holds great opportunities for Loftleidir Icelandic, especially in light of the expected growth in passenger demand in Africa in the coming years. We have already participated in the restructuring of the company, and Cabo Verde Airlines’ operations are well suited to Loftleidir Icelandic’s projects around the world. The knowledge and experience already available within Loftleidir Icelandic and its sister companies has come to good use in restructuring the company and will continue to assist in further developments. Further opportunities are related to shared use of airplanes from Icelandair Group’s fleet, and crews where applicable, as is already being done in various projects. In developing connecting routes, we can also draw further on Icelandair’s experience. In the case of Cabo Verde Airlines, we have opportunities for well-organized connecting routes between Europe and South America on one hand, and West Africa and North America on the other, along with West Africa and Europe. The island’s location is ideal for developing connecting flights.”

Leasing News 
Stratos continues growth, managed portfolio exceeds $1bn
Stratos has recently arranged the acquisition, financing and delivery of two Airbus widebodies leased to Asian flag carriers which has increased the size of its managed portfolio to 14 aircraft worth over $1bn.

Stratos has rapidly expanded its portfolio since adding lease management to its capabilities in mid-2017. Providing full aircraft servicing to investors, Stratos has grown its platform from the former GPA offices in Shannon, Ireland. In addition, Stratos is actively raising and syndicating aircraft-backed debt, remarketing and sourcing aircraft for airlines and investors and has recently secured commitments to double its aircraft portfolio in the next 6 months. To date, Stratos has remarketed 27 aircraft worth $600m, sourced 28 aircraft worth $1.3bn and raised or traded $800m in senior debt.

Gary Fitzgerald, CEO of Stratos, said “We are delighted to have achieved this milestone of $1bn under management which brings us into the top 50 aircraft servicers by portfolio value. We have gathered an experienced team since inception exactly five years ago, and are looking forward to the next phase in our development, continuing to serve our airline, banking and investor clients”

Dr. Peters opens new London office
Dr. Peters Group is expanding its international institutional investors business with the opening of a new London office in 33 Cavendish Square, Marylebone, W1G 0PW London.

Albert Ganyushin, Head of Capital Markets who has been working at Dr. Peters Group since 2017, will head up the new UK office. As part of his role he oversees Dr. Peters’ relationships with international investors and advisers. Albert also leads and coordinates Dr. Peters’ activities in providing its specialists real asset capabilities to international investors across all asset classes.

Anselm Gehling, CEO of Dr. Peters Group, comments: “London is one of the key global centres where capital formation takes place. We are confident that we can build long term relationships with existing and new investors through our growing base in London. Ultimately, our goal is to substantially increase our international institutional investor business. The opening of the London office marks our commitment to this strategy.”

People News
André-Hubert Roussel proposed as CEO of ArianeGroup
Joint shareholders Airbus and Safran have proposed to the Board of Directors of ArianeGroup André-Hubert Roussel, 53, currently head of operations at Airbus Defence and Space, to succeed Alain Charmeau, 62, as chief executive officer (CEO) of ArianeGroup, effective 1 January 2019.

Charmeau will retire in 2019 after a transition phase from 1 January to 31 March 2019, during which he will serve as special advisor to the new CEO of ArianeGroup. A veteran of Airbus, he previously led programmes for the company such as Ariane 5, the Automated Transfer Vehicle, the Columbus science laboratory for the International Space Station and the French deterrence missile activities. Since 2015, Charmeau has been at the helm of ArianeGroup, a 50-50 joint venture between Airbus and Safran, and has successfully integrated Europe’s space launcher powerhouse.

“Alain has done a tremendous job at ArianeGroup and before at Airbus and Aerospatiale. Since almost 40 years he has contributed much to the success of our defence and space programmes. With this succession, we bid farewell to a great colleague and one of Europe’s preeminent space industry leaders. Alain is not easy to replace but I am convinced André-Hubert with his impressive space and operations experience is the perfect choice to take ArianeGroup to the next level,” said Tom Enders, CEO of Airbus.

“I would like to thank Alain Charmeau most sincerely for his work since the creation of ArianeGroup more than three years ago, both in reorganising the European launchers sector in order to increase competitiveness and efficiency during the development of Ariane 6, and also within the defence sector. We have complete confidence in André-Hubert Roussel to continue this exciting task, which will enable Europe to retain its independent access to space, and for which the support of ESA and the European nations, as well as the national space agencies, is also essential”, said Philippe Petitcolin, CEO of Safran.

Since 2016, André-Hubert Roussel has been serving as Head of Operations and Member of the Executive Committee at Airbus Defence and Space. Since July 2018, he has also been a member of the ArianeGroup Board of Directors. Previously, he was in charge of Engineering at Airbus Defence and Space. Before assuming those duties, Roussel was Head of Engineering, Operations and Quality for the Space Systems business unit inside Airbus Defence and Space. In 2014, Roussel took the lead for the Launcher Programmes at Airbus and played a decisive role in the launch of the Ariane 6 programme as well as in the creation of the ArianeGroup joint venture. He began his professional career in 1990 and holds a degree in Engineering from École Polytechnique and École Nationale Supérieure des Télécommunications. Roussel is married with four children.

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Airline News 
El Al announces third quarter results
El Al Israeli Airlines revenues for the third quarter of 2018 amounted to approx. US$642 million compared to approx. US$ 626 million for the third quarter of 2017, indicating a growth of about 2.5%.Operating profit for the third quarter of 2018 amounted to approx. US$62 million compared to approx. US$69 million for the third quarter of 2017, indicating a decrease of about 11%.

Profit before tax for the third quarter of 2018 totalled approx. US$54 million, compared to profit before tax of approx. US$63.8 million for the third quarter of 2017.

Net profit for the third quarter of 2018 amounted to approx. US$42 million compared to approx. US$49 million for the third quarter of 2017.

EBITDA for the third quarter of 2018 amounted to US$99 million compared to US$109 million for the third quarter of 2017.

EBITDAR for the third quarter of 2018 amounted to US$137.7 million compared to US$147.3 million for the third quarter of 2017.

The company’s cash and deposit balances as of September 30, 2018 totalled approx. US$246 million.

The number of flight segments in the third quarter of 2018 declined by approx. 0.7% compared to the third quarter of 2017; however, passenger revenue per kilometre flown (RPK) increased by approx. 1.3% and available seat per kilometre (ASK) increased by about 1.2%.

Average total income per RPK (Yield) for the third quarter of 2018 grew by about 2.1%.

Aircraft load factor for the third quarter of 2018 stood at 85.4%, similarly to the third quarter of 2017.

The company’s revenues for the first nine months of 2018 amounted to approx. US$1,649 million compared to US$1,585 million for the first nine months of 2017, reflecting a growth of about 4%.

Operating loss for the first nine months of 2018 amounted to approx. US$4 million compared to an operating profit of approx. US$62 million for the first nine months of 2017.

Loss before tax for the first nine months of 2018 amounted to approx. US$26 million compared to a profit before tax of US$47 million for the first nine months of 2017.

Net loss for the first nine months of 2018 amounted to approx. US$21 million compared to US$35.4 million for the first nine months of 2017.

IATA:  Safety, competitiveness, infrastructure, harmonisation, key to delivering aviation’s benefits in Africa
The International Air Transport Association (IATA) urged governments in Africa to maximise the positive social and economic power of aviation by working together to promote safe, sustainable and efficient air connectivity.

“African aviation supports $55.8 billion of economic activity and 6.2 million jobs. To enable aviation to be an even bigger driver of prosperity across the continent, we must work closely with governments,” said Alexandre de Juniac, IATA’s Director General and CEO, speaking at the 50th Annual General Assembly (AGA) meeting of the African Airline Association (AFRAA) in Morocco.

Safety was highlighted as a positive example of progress through collaboration. “Africa has had no jet hull losses for two years running and is two years free of any fatalities on any aircraft type, it’s clear that progress is being made. But more needs to be done. We urge governments to recognize the IATA Operational Safety Audit (IOSA) in their safety oversight programs. With IOSA carriers performing three times better than airlines not on the IOSA registry, we have a convincing argument. Similarly states must push forward greater adoption of ICAO Standards and Recommended Practices (SARPS),” said de Juniac.

Only 24 African states comply with at least 60% of ICAO SARPS. “That is not good enough,” said de Juniac who encouraged states to make global safety standards a top priority.

Closer Cooperation with Governments IATA called for an aviation agenda to focus on:
Improving competitiveness, developing effective infrastructure, modernising the regulatory framework focusing on global standards and connectivity; and ensuring a well-trained and diverse workforce.

Airlines in Africa, on average, lose $1.55 for every passenger carried. Establishing competitive cost structures that enable growth and reducing blocked funds are essential to improving the competitiveness of African aviation.

“Africa is an expensive place for airlines to do business. There is no shortage of examples illustrating the heavy burden that governments extract from aviation. Jet fuel costs are 35% higher than the rest of the world. User charges, as a percentage of airlines’ operating costs, are double the industry average. And taxes and charges are among the highest in the world. On top of that, $670 million of airline funds are blocked. Too many African governments view aviation as a luxury rather than a necessity. We must change that perception,” said de Juniac.

“In Africa we have infrastructure problems in two extremes. In some cases it is overbuilt and expensive. In other cases, it is deficient and cannot meet demand. Dialogue between industry and government is critical to ensure that there is sufficient capacity to meet demand, that airline technical and commercial quality standards are met and that the infrastructure is affordable. Achieving that will create the platform on which aviation’s economic and social benefits can be maximized,” said de Juniac.

IATA expressed strong support for the Single African Air Transport Market (SAATM) initiative. “The low density of the African intra-continental network makes it impossible to realize the potential benefits of a connected African economy. SAATM—if implemented—gives Africa the potential for economic transformation. History has shown that opening markets leads to rapid advances in connectivity,” said de Juniac.

To date, 27 African governments have committed to SAATM and IATA encourages the remaining 28 African Union member states to come on board quickly to enjoy the potential benefits of a connected African economy.

Leasing News 
DAE increases bond repurchase program by US$300 million
Dubai Aerospace Enterprise’s (DAE) Board of Directors and Shareholders have authorised an additional US$300 million for bond repurchases to be conducted through open market transactions. To date, DAE has repurchased US$295 million of principal amount of its publicly traded bonds under the previous authorization of US$300 million.

DAE Chief Executive Office Firoz Tarapore said: “The current trading levels of our bonds are not consistent with our current credit ratings, strong financial performance or our projected ratings trajectory. We continue to generate cash and capital at a rate that allows us the flexibility to remove inefficient components of our liability structure, and improve our gross leverage ratios.”

DAE currently has US$3.0 billion of publicly traded bonds outstanding in the US capital markets.

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Airline News 
Caribbean Airlines selects the 737 MAX
Caribbean Airlines has chosen to enhance and renew its single-aisle fleet with the 737 MAX 8. The carrier, which has long operated the Next-Generation 737, will take delivery of 12 MAX airplanes in the coming years.”Boeing has been by our side since Caribbean Airlines was founded twelve years ago using the 737-800. The 737 MAX allows us to continue offering a safe and comfortable experience for our passengers, while significantly improving fuel efficiency and environmental performance,” said Caribbean Airlines Chief Executive Officer, Garvin Medera. “All of these elements position us for long-term success.”

The 737 MAX 8 – part of a fuel-efficient family of airplanes – will seat up to 160 passengers in Caribbean Airlines’ three-class configuration featuring the “Caribbean Plus” cabin, and will provide more than 500 nautical miles more range than the existing aircraft.

In addition to flying Boeing airplanes, Caribbean Airlines also uses Boeing’s services to optimize its operations. The carrier participates in the Fuel Dashboard Program, for example, which allows operators to look across their fleet and identify fuel savings. Caribbean also uses Boeing’s consumable and expendable material services to ensure it has the parts it needs when it needs it.

Air Canada finalises Aeroplan loyalty program acquisition
Air Canada, with the financial support of its partners, The Toronto-Dominion Bank (TD), Canadian Imperial Bank of Commerce (CIBC), and Visa Canada Corporation (Visa), has entered into a definitive share purchase agreement with Aimia for the acquisition of Aimia Canada, owner and operator of the Aeroplan loyalty business.

Concurrently with the signing of the share purchase agreement, Air Canada, TD, CIBC and Visa signed various commercial agreements relating to the acquisition, including credit card loyalty program and network agreements for future participation in Air Canada’s new loyalty program, all of which are conditional upon closing of the acquisition of Aimia Canada. Additionally, Air Canada remains in negotiations with American Express, which also issues Aeroplan co-branded products, to secure its continued participation in the Aeroplan program after 2020.

“We are extremely pleased to have concluded the agreement for the purchase of Aimia Canada and to have reached definitive agreements on our co-branded credit card programs with each of TD and CIBC. Subject to closing the purchase transaction, these agreements will produce the best outcome for our customers as well as those of our partners as they will facilitate a smooth transition to our new loyalty program launching in 2020, safeguarding all Aeroplan Miles and providing convenience and value for millions of Canadians. Our program is expected to be one of the best loyalty programs in the industry, which will be exciting for our customers and we are looking forward to communicating details later next year,” said Calin Rovinescu, President and CEO of Air Canada.

The acquisition of Aimia Canada remains subject to Aimia shareholder approval and certain other closing conditions, including receipt of applicable regulatory approvals. The closing of the acquisition is expected to occur in January 2019.

The aggregate purchase price consists of $450 million in cash subject to post-closing adjustments and includes the assumption of approximately $1.9 billion of Aeroplan Miles liability. Air Canada will receive payments from TD and CIBC in the aggregate amount of $822 million. Visa will also be making a payment to Air Canada.  In addition, TD and CIBC will make payments to Air Canada, at closing, in the aggregate amount of $400 million as prepayments to be applied towards future monthly payments in respect of Aeroplan miles.

Leasing News 
ALC places 15 new aircraft with Vistara
Air Lease Corporation (ALC) has announced long-term lease agreements for nine Airbus A320-200neo and six Airbus A321-200neo aircraft with Vistara, an Indian full-service airline that is a joint venture of TATA Sons and Singapore Airlines (SIA). The nine A320-200neo aircraft will feature CFM56 LEAP-1A26 engines and will be delivered to Vistara starting in the first quarter of 2021 through 2022. Featuring CFM56 LEAP-1A32 engines, the six A321-200neo aircraft will be delivered to the airline starting the first quarter of 2020 through 2021. All 15 aircraft will be delivered from ALC’s order book with Airbus.

“ALC is pleased to announce this significant lease placement of 15 aircraft with Vistara,” said Kishore Korde, Executive Vice President of Air Lease Corporation. “The A320-200neo and A321-200neo offer the most modern, fuel-efficient new technology that will greatly enhance Vistara’s fleet operations and passenger experience. ALC looks forward to a long and successful relationship with Vistara as we work together to modernize and grow the airline.”

With these 15 A320neo family aircraft and the A320-200’s already leased by ALC to Vistara, ALC is expected to become the lessor with the largest share in Vistara’s fleet as measured by number of aircraft as well as by aircraft value.

Maintenance News
Barfield reinforces partnership with TAME
Barfield, an Air France KLM Engineering & Maintenance (AFI KLM E&M) subsidiary in the Americas, has signed a multi-year components maintenance agreement with Ecuadorian based airline TAME. The flat rate agreement covers TAME’s Airbus A330 aircraft.

“This agreement gives Barfield the opportunity to continue to strengthen our partnership with TAME. Our focus is to provide them with the best dependability, engineering support, and the most helpful customer service in the industry to keep their dispatch reliability at the highest level possible” said Hervé Page, Barfield Chief Operating Officer.

The agreement also increases Barfield’s long term partnership with TAME with the support of AFI KLM E&M. Indeed, for Franck Becker, AFI KLM E&M Regional Vice President Sales Americas, “The trusted relationship between TAME and Barfield as seen with this new agreement, increases and strengthens AFI KLM E&M position on the South American market.”

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Airline News
Shenzhen Airlines flies to London Heathrow
Shenzhen Airlines has become the 25th Star Alliance member carrier to fly to London Heathrow. Shenzhen Airlines connects London with its home town of Shenzhen three times a week with an Airbus A330-300 offering 16 seats in Business Class and up to 261 in Comfort Economy and Economy Class combined.At Heathrow, Shenzhen Airlines operates from Terminal 2 | The Queen’s Terminal, as do all other Star Alliance member carriers. Operating from a single terminal at Heathrow ensures that Star Alliance member carriers can offer approximately 18 million annual customers using the airport a vastly improved travel experience, including shorter connecting times.

Finance News
JP Lease funds one A350-900
Crédit Agricole CIB has closed the Japanese operating lease financing of an Airbus A350-900 operated by Vietnam Airlines. The aircraft was acquired by a subsidiary of JP Lease Products & Services (JP Lease). Crédit Agricole CIB acts as mandated lead arranger, facility agent, security trustee and senior lender. KDB is acting as arranger and senior lender, alongside KDB Tokyo Branch as senior lender. IBJ Leasing is the sole junior lender. This is the second financing of an A350-900 operated by Vietnam Airlines arranged by Crédit Agricole CIB for JP Lease over the past 12 months.

Cargo News 
Vallair delivers first Boeing 737-400F to Chinese operator Longhao
Vallair, the aircraft trading, leasing and specialist MRO organisation, has completed delivery of its first B737-400F to Guangdong Longhao Aviation Group of China for a Boeing 737CL. The aircraft (MSN27916) was previously operated by Japan Transocean Airlines and was converted at Gameco in Guangzhou under a Pemco STC. Guangdong Longhao Aviation Group operates five B737-300F using its own fleet, as well as leased aircraft.  Its mission is to become southern China’s preferred neutral asset provider of freighter aircraft capacity.

Longhao Airlines is a Chinese cargo carrier based at Guangzhou Airport. It was established by Guangdong Longhao Aviation Group, with a registered capital of CNY400 million (US$61.6 million). The carrier operates freight services on domestic and international sectors, including Hong Kong, Macau and Taiwan. Longhao Airlines was approved by the Civil Aviation Administration in 2016, achieving operational qualification and undertaking its maiden voyage in nine months.

Operations were launched in March 2017, with a Guangzhou-Nantong service. Since then nine cargo routes have been opened and three Boeing 737 freighters have been introduced to the fleet in the first half of 2018.

The aircraft is one of a number of Boeing 737 aircraft that Vallair has purchased for cargo conversion, and the first Vallair B737-400 to be converted at Gameco’s facility.

Norbert Marx, CEO of Gameco stated: “Since entering our co-operation with Pemco, Vallair is our first customer for cargo conversion under the Pemco STC in Guangzhou. Our technical team has worked closely with Vallair’s cargo conversion specialists to ensure that Longhao has the optimum aircraft for their needs. Our chosen provider partnership with Vallair in the Asia region establishes a strong commitment to timely completions of the highest standard and the whole team of engineers and technicians at Gameco is extremely proud to deliver this great aircraft.”

Peter Koster, Head of Cargo Conversions at Vallair, highlights the Company’s focus on leased cargo converted assets as it follows a controlled growth strategy. “Vallair takes a long-term view with regards to its Chinese portfolio, we are carefully building a fleet of Boeing and Airbus commercial aircraft that will form the bedrock of our cargo conversion programme. As these mature aircraft come to the end of their operational lease agreements we are extending the life of these assets in the most economically beneficial way through our cost-effective conversion programme.”

Pemco World Air Services, who designed the STC for the B737-400 conversion has extended their presence in China, adding Guangzhou to the map of conversion sites. Mike Andrews of Pemco commented, “The assignment of freighter conversions to our new partner Gameco has proven to be a valid choice. Quality and efficiency are key drivers for conversion programme and Gameco delivered excellence for Vallair via their highly skilled workforce.”