Short Takes
October 30th 2020
SIA Engineering Company (SIAEC) and Cebu Air (CEB) said this week they had unwound their two joint-venture businesses – Aviation Partnership Philippines Corporation (APPC) and SIA Engineering Philippines Corporation (SIAEP). Read More » SIAEC said it was selling its 51% holding in APPC to CEB for US$5.61 million in cash. At the same time, CEB will sell its 35% equity in SIAEP to SIAEC for $7.74 million in cash, a transaction that will result in SIAEP being a wholly-owned subsidiary of SIAEC. SIAEC said in a statement the two transactions were "not expected to have a material impact on the net tangible assets or earnings per share” for fiscal 2021.
SIAEC said in a regulatory filing to the Singapore Exchange (SGX) this week it expected to recognise a "non-cash impairment provision against its base maintenance unit’s assets" in its fiscal 2021 first half results. The company was determining the size of the impairment charge, which it expected to have a material impact on the bottom line. "The COVID-19 pandemic continues to have an unprecedented adverse impact on the aviation industry and consequently on the MRO business. All segments of the group were impacted during the first half of the financial year as low flight activities resulted in low work volume," SIAEC said.
Honeywell Aerospace said this week it had released a "high-efficiency mode upgrade" for its 131-9A auxiliary power unit (APU) for single-aisle Airbus aircraft expected to increase the average time-on-wing by 1,200 flight hours and reduce fuel burn by 2%. The upgrade was a "one-time modification enabled with software" and could be installed during regularly scheduled maintenance events. It did not require additional downtime to implement, Honeywell said. "This new upgrade enables extended usage and better efficiency for our customers' 131-9A auxiliary power units to help control costs now and in the future," Honeywell Aerospace vice president for engines and power systems, David Shilliday, said in a statement.
Taiwanese carrier, StarLux Airlines, this week confirmed launch dates for its nonstop flights from Taipei Taoyuan. Taoyuan-Bangkok Suvarnabhumi service will commence on December 1, Taoyuan-Osaka Kansai on December 15 and Taiyuan-Tokyo Narita the following day. The three routes will operate twice a week. Full service StarLux commenced flying in January with services to Da Nang, Macau and Penang. It suspended all flights between March and June due to the coronavirus pandemic.
Virgin Australia (VA) and Alliance Airlines have applied to the country's competition regulator for approval to cooperate on about 40 regional routes and two international routes. The pair said in an application to the Australian Competition and Consumer Commission (ACCC) it was seeking authorisation to cooperate on flight schedules, capacity and pricing, enter into commercial agreements and potentially set up risk and revenue sharing mechanisms "to efficiently manage capacity and quickly respond to changes in demand due to the COVID-19 pandemic". The ACCC said the public consultation period for interim authorisation, which would allow the parties to begin cooperation ahead of a final decision, was open until November 10.
Thailand LCC, Nok Air, said in a regulatory filing to the Stock Exchange of Thailand (SET) this week there were no objections to the company's rehabilitation petition when it was presented to the country's Central Bankruptcy Court on Wednesday. It said the court had ordered the rehabilitation petition be issued on November 4. Nok Air applied to the Central Bankruptcy Court for business rehabilitation at the end of July.
Engine maker Pratt & Whitney (P&W) posted an operating loss of US$615 million for the three months to September 30, 2020, compared with an operating profit of US$520 million a year ago. Its parent company, Raytheon Technologies, said in its latest quarterly financial report. P&W delivered 114 large commercial engines in the quarter, down from 165 in the same months a year earlier. Net sales fell 28% to US$3.5 billion. "The decrease in commercial sales was primarily due to a significant reduction in shop visits, related spare part sales and commercial engine deliveries, principally driven by the current environment," Raytheon said of P&W's financial performance. It said the weakness in the commercial sector was offset by higher military volumes.
GE Aviation reported an operating profit of US$356 million for the three months to September 30, 2020, down 79% from US$1.71 billion in the prior corresponding period, parent company GE said in its latest quarterly financial report. Revenue declined 39%, to US$4.9 billion, while the value of orders was 54% lower, at US$4.1 billion. GE said the fall off in revenue was "driven by 385 fewer engine sales year-on-year, including a sales decline of 172 LEAP-1A and -1B units, from 283, last year". "Services revenue also was down, primarily due to lower commercial spare part shipments and decreased shop visits, but military revenues increased," GE said of its aviation business.
Singapore and Germany have agreed to establish a reciprocal green lane (RGL) to offer essential travel for business and official purposes between the two countries. No starting date has been announced with operational details, including procedural requirements, health protocols, and application process, to "be announced in due course", the foreign offices of both countries said in a joint statement.
Japan’s ZIPAIR has followed its Tokyo-Narita- Seoul service, launched on October 16, with a Tokyo Narita-Bangkok route from October 28. ZIPAIR also operates an all-cargo service between its home hub and Thailand’s capital.
Separately, the Ministry for Land, Infrastructure and Transport has announced it will distribute up to 500 billion yen (US$480.26 million) for cash flow support and boosts to the capital of domestic carriers struggling to stay alive during COVID-19 and beyond.
