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Private equity company to buy WestJet in $C5bn deal

WestJet Onex takeover $5bn
WestJet's first Boeing 787 wings its way to Calgary. Photo: WestJet/Twitter

Canada’s WestJet says its focus on employees and passengers will continue in the wake of a surprise move by private equity player Onex to acquire the Calgary-based airline for $C5 billion($US3.7bn).

The cash transaction will see Onex Corporation and its affiliated funds acquire WestJet for $C31.000 a share, a 67 percent premium on Friday’s closing price.

Founded in 1984 by Canadian billionaire Gerald Schwartz, the Toronto-based Onex has $US31 billion in assets under management.

The WestJet deal isn’t its first tilt at the aerospace industry: it unsuccessfully attempted to buy Air Canada in 1999 and merge it with Canadian Airlines.

That takeover foundered after a dramatic court battle and Canadian media say he has been circling for another major aviation prize ever since.

Other aerospace investments include Aerosystems, bought from Boeing in 2005 and sold in 2014, a stake in catering business Sky Chefs and a less successful investment in Hawker Beechcraft.

READ Our ratings for WestJet

The deal comes as WestJet’s share price and profitability have declined in recent years and Onex has yet to outline its plans for the carrier.

Onex managing director Tawfiq Popatia described the airline in the takeover announcement one of Canada’s strongest brands for which his company had tremendous respect.

“WestJet is renowned internationally for its unparalleled guest experience and employee culture,” he said. “We’re thrilled to be partnering with WestJetters and continuing this remarkable Canadian success story.”

But WestJet founder and chairman Clive Beddoe said the deal retained WestJet’s commitment to provide better options for the Canadian traveling public.

“I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created,’’ Beddoe said.

“Onex’ aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future.”

WestJet chief executive Ed Sims said: “We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small.

“Integral to this relationship is a commitment to our employees and our unique ownership-driven culture.”

WestJet’s board formed a special committee to consider the offer after an approach by Onex in March.

The airline said an extensive review of the transaction led to the committee unanimously recommending the transaction to the wider board.

“The WestJet board of directors, having received and considered the recommendation of the special committee, determined that the transaction is in the best interests of WestJet and unanimously recommends that WestJet shareholders vote in favor of the transaction at the special meeting of shareholders to be held to approve the transaction,’’ it said.

The company plans to mail an information circular in late June for a special meeting of shareholders expected to be held in July.

 

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First A330neo for the Americas delivered to Azul

Azul A330neo first Americas
Azul's first A330neo takes off. Photo: Airbus.

It may not have the impact of Christopher Columbus turning up in 1492, but the first Airbus A330neo to be delivered to the Americas has gone to Brazil’s Azul Linha Aereas.

The aircraft, leased from Avolon and one of 15 ordered by the Dublin-based company, will be used Azul to expand its international operations between Brazil and Europe and the United States.

It comes in a three-class configuration, sporting the Airspace cabin with 34 business class, 96 economy Xtra and 168 economy seats.

READ our ratings for Azul

The more efficient neos will progressively replace older A330-200s and boast 25 percent lower fuel burn per seat than previous generation competing aircraft.

“We are very proud to be the first A330neo operator in the Americas,’’ Azul chief executive John Rodgerson said in the announcement.

“This new aircraft will play a key role in the expansion of our international markets supporting our strategy of having a modern and fuel-efficient fleet.”

The airline was established in 2008 by JetBlue founder David Neeleman and has grown rapidly since.

It is now Brazil’s biggest carrier by number of flights and cities served and offers 820 daily flights to 113 destinations.

Azul said in March it expected to grow capacity by 18 to 20 percent in 2019.

This included a 16 to 18 percent rise in domestic available seat kilometres due to the replacement of smaller aircraft with A320neos and a 20 to 25 percent boost to international capacity mostly related to the introduction of three A330s.

It expected the proportion of ASKs flown by next-generation aircraft to rise from 30 percent in 2018 to 40 percent in 2019 with the addition during the year of 12 A320neos, six Embraer E2s and the three A330neos.

It also planned to remove 15 Embraer E-195 E-1s to end the year with 129 operating aircraft.

Watch the Airbus video of the making of the Azul A330neo:

Proposed biofuel projects now half-way to commercialization ‘tipping point’

Biofuels half way comerialization
United Airlines is among the airlines investing in biofuels. Image: United Airlines

Biofuel production will need to reach 7 billion litres annually if it is to reach the commercialization tipping point of two percent of the aviation fuel supply by 2025, an industry forum has been told.

A forum convened by the not-for-profit Air Transport Action Group heard that almost 180,000 commercial flights had been made using biofuel, also known as sustainable aviation fuel (SAF),  usually made from waste resources.

While that was a small proportion of overall fuel use, biofuel production would start over the next few years at a number of facilities currently under construction or financing.

READ: Ryanair adopts space-based tracking system

“To reach a commercialization tipping point – around two percent of our fuel supply by 2025 – will require some seven billion litres of SAF a year,’’  ATAG executive director Michael Gill told the Global Sustainable Aviation Forum.

“Current estimates show that production facilities to meet half that volume have already been announced.

“Importantly, we need to ensure that the output from those facilities is directed to aviation and not road transport which should be transitioning to electricity – governments have a key role to play in setting the right policy track for that.

“Let us push ourselves and help activate not just the coming six years of fuel supply, but what has to become the main source of aviation energy in the coming decades.”

Aviation was a global leader in setting up long-term goals for an industry with a pledge to reduce net CO2 emissions in 2050 to half their 2005 levels.

Gill noted this was in line with the Paris Agreement’s pledge to keep the temperature rise below 2 C but conceded it was a “considerable challenge” for the growing aviation industry, particularly when global politics were layered in.

A key mid-term measure to help the industry reach its goal is the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

This is a market-based mechanism allowing airlines to offset carbon emissions from international air travel to which about 80 states have signed up.

It is due to be implemented in phases from 2021 and is expected to provide more than $US40 billion for climate projects offsetting at least 2.5 billion tonnes of CO2 over 15 years.

Gill called on governments meeting at the International Civil Aviation Organization to reaffirm their support for CORSIA.

“The next two years are crucial to getting this system underway,’’ Gill said.

“The industry is fully on board and airlines are already complying with the initial stages.

“With 80 States volunteering for the early phase of CORSIA, around 80 percent of the growth in international aviation emissions will be covered.

“Let’s boost this level and deliver a robust offsetting process on which we can all rely.”

ATAG is a cross-industry association with about 50 members including major associations such as the International Air Transport Association,  the Civil Air navigation Services Organization and Airports Council International as well as aircraft and engine manufacturers.

Shock as American Airlines pilot charged with triple homicide

American pilot triple homicide
Image: WDRB/Christian County Detention Center.

Passengers thought the pilot of their American Airlines flight may have failed a random drug and alcohol test but were shocked to find it was far more sinister.

The 51-year-old pilot had been arrested at Louisville International Airport in Kentucky  Saturday and charged with killing three people in 2015.

Christian Richard Martin, has been charged with murdering Calvin and Pamela Phillips and their neighbor Edward Dansereau in November 2015.

Calvin Phillips was found shot dead in his home in Pembroke, Kentucky, while the bodies of the other two were found in a nearby cornfield in a burned car.

In addition to the murder charges, Martin faces a count each of attempted burglary and three counts of tampering with physical evidence.

READ: Myanmar pilots landed after landing without nose gear.

Passenger Ashley Martin, who is not related to the accused, said the arrest scene was like “something you would totally see in a movie”.

Her mother, Frances Wise, told TV station WDRB: “I think it was very tense. You could tell employees knew something was going on.”

A number of passengers also took to Twitter to express their dismay and the jet took off three hours later than scheduled.

American Airlines said Martin had been a Bombardier CRJ first officer for affiliate PSA Airlines since the beginning of 2018.

The carrier said it was made aware of the indictment after Martin’s arrest at the airport.

“We have an unwavering commitment to safety and security of our customers and team members and we will provide any investigative assistance possible to law enforcement throughout their investigation,’’ it said.

American told CBS a criminal background check had been conducted on Martin and found no criminal history that would disqualify him from being a commercial pilot.

Relatives of the dead couple had offered a $US100,000 reward for help in solving the case and said they were “overwhelmed with this positive step towards resolution for people we love dearly”.

Qantas to launch frequent flyer-only “Points Planes”

Qantas Points Plane
A Qantas A380. Photo: Qantas

Qantas is testing a new concept that will see it dedicate entire aircraft to frequent flyers seeking to redeem Qantas points

The first “Points Plane” ‘will be an Airbus A380 operating from Melbourne to Tokyo Narita on October 21 and is Qantas Loyalty says the idea is one of many being explored to give its frequent flyers the opportunity to redeem points.

Bookings open May 16 and members will be able to book any seat on board at the standard points redemption rate. All status levels will have an equal opportunity to secure a berth.

The A380 has 14 seats in first class, 64 in business, 35 in premium economy and 371 in economy.

READ Qantas sells Melbourne terminal, sees ‘mixed’ domestic demand.

The scheme recognizes that flight redemptions are the most popular way for frequent flyers to use their points and that they can be frustrated by not being able to do so.

The airline said it occasionally moved unscheduled aircraft around the network for a range of operational and commercial reasons and this created opportunities for initiatives like Points Planes.

“This is the first time we have dedicated an entire aircraft – let alone an A380 – to our frequent flyers, and we are expecting to see significant demand for these flights,” Qantas loyalty chief executive Olivia Wirth said.

“Four flight redemptions are made every minute and sixty upgrades are confirmed every hour. We know our members love to redeem their points on travel, so we’re excited to be able to give them new ways to access these rewards.

“Member-exclusive flights mean more redemption opportunities for our members and less time searching for reward seats.

“If this concept is a success, which we think it will be, Qantas hopes to operate more regular Frequent Flyer only flights to other international and domestic destinations in the near future.”

Japan was chosen because it is a popular destination for Qantas Frequent Flyers and one of the top five most searched destinations on qantas.com.

On the way back, members have the choice of booking on an A330 return Points Plane on October 26.

People wanting to travel on another date can try for a classic reward seat with Qantas or a partner airline on another date or use Points Plus Pay for any commercially available seat.

Those wanting to book on the inaugural Points Plane will need to find 35,000 points for economy, 54,000 for premium economy, 72,000 for business and 108,000 in first.

There will also be the usual taxes, fees and carrier charges.

Separately, a Qantas Boeing 747 traveling from Tokyo to Sydney had an unscheduled landing at Cairns Sunday after the pilots shut down an engine due to a problem.

Ryanair adopts space-based tracking system

Ryanair space-based ADS-B
Photo: Ryanair

Ryanair has adopted a space-based system allowing it to more closely track aircraft using satellites that monitor transmissions from its planes.

The European low-cost giant announced the deployment of GlobalBeacon, which combines FlightAware’s data processing and web display prowess with the global space-based  Automatic Dependent Surveillance-Broadcast  (ADS-B)  capabilities of Aireon.

European airlines are already required by the European Union Aviation Safety Agency to track the position of their aircraft at least once every 15 minutes. By 2021, it is expected they will need to track an aircraft every minute if it is in distress.

The 15-minute reporting requirement was brought in by the International Civil Aviation Organisation as a result of the losses of Air France Flight 447 and Malaysia Airlines Flight MH370.

It took almost two years to locate the flight recorders from  AF447 and the Boeing 777 lost in the MH370 tragedy still has not been found more than five years later.

READ: Space-based tracking to revolutionize aviation.

Aireon will help minimize the chances of another airliner disappearing in the way MH370 did and provide additional insights into aircraft accidents

It was also Aireon that provided the refined data that prompted US and Canadian authorities to ground the Boeing 737 MAX after a fatal March 10 crash in Ethiopia.

Ryanair said GlobalBeacon far outperformed the current 15-minute requirement and would enable Ryaniair to meet future flight tracking expectations because it provides minute-by-minute updates.

“At Ryanair, the safety of our customers, crew and aircraft is our number one priority and this latest partnership adds to our already industry-leading safety record,’’ Ryanair chief operating officer Peter Bellew said.

“ Without installing any new equipment on our fleet, we are able to monitor our aircraft without gaps in coverage and will be immediately alerted if one of our aircraft is in distress.

“ FlightAware has made this service extremely cost-effective and easy to deploy.”

Bellew is a former chief executive of Malaysia Airlines and acutely aware of the value of being able to closely track aircraft.

Aireon’s tracking system officially went live in April and uses the Iridium NEXT satellite constellation to provide full, continuous air traffic surveillance across the globe.

Myanmar pilots lauded after landing without nose gear

Myanmar landing gear
The E-190. Photo: Myanmar Ntional Airlines

Skilful piloting of a  Myanmar National Airlines Embraer ERJ-190 saw passengers escape injury after the aircraft landed without the nose gear.

Flight  UB-103 from Yangon to Mandalay with 82 passengers and 7 crew was on approach to Mandalay’s runway 17 at about 9:00 am local time when the crew discovered they could not extend the nose gear landing gear.

The Aviation Herald reported the crew worked the related checklists and attempted an alternate gear extension, which also could not extend the nose gear.

READ: Major endorsement of Boeing 737 MAX from biggest pilot union.

“A low approach confirmed the nose gear was still not extended,’’ the Aviation Herald reported.

“ The crew prepared for a nose gear up landing and landed on Mandalay’s runway 17, keeping the nose up as long as practicable, bringing the aircraft to a halt on the runway on both main gear struts and the nose of the aircraft.

“Smoke entered the cabin after the nose touched down. The aircraft was evacuated via slides. There were no injuries, the aircraft sustained substantial damage.”

The aircraft overflew the runway twice to have tower check the landing gear and entered a holding pattern to burn off fuel.

A video of the plane landing shows the pilot bring the nose of the plane down after touchdown and sparks flying before it slowly comes to a halt.

Myanmar Civil Aviation Department deputy director general Ye Htut Aung told AFP the pilots tried to lower the landing gear manually after the plane’s systems failed to do so.

“They tried hard twice by flying around twice and asked to check whether the nose wheel dropped or not,” Ye Htut Aung said fault”.

“So they had to land with the back wheels… The pilot could land it skillfully.”

“There were no casualties.”

The incident came less than a week after a Biman Bangladesh Airlines skidded off the runway while landing at Yangon airport.

 

 

Cathay moves beyond to adopt new branding

carthay Move Beyond brand
Photo: Cathay Pacific

Cathay Pacific’s  “Life Well Travelled”  slogan has joined the well-traveled afterlife after the Hong Kong carrier unveiled new branding saying it would “Move Beyond”.

The airline says the slogan is a call action and reflects the airline’s determination to challenge existing norms “to reach levels of service and customer experience that place it among the world’s great service brands”.

“For us, it is to have an ambitious leadership mindset,’’ chief executive Rupert Hogg said.

“We choose to lead and blaze a trail of progress. It represents our continued commitment to delivering personal service that moves people emotionally. To never stand still.”

READ Cathay the first to fly A350-1000 to Melbourne and  Perth.

A number of commentators have questioned whether the new brand is an improvement on its predecessor and Cathay is no doubt hoping that the call to action does not include passengers moving beyond the airline if it fails to live up to expectations.

Those expectations, according to the airline’s announcement, embody three “core values”: thoughtful, progressive and can-do spirit.

Cathay says these mean:

  • Thoughtful – to respect and care for everyone, wherever they’re from and wherever they’re going to, treating them as the airline’s people would wish to be treated themselves. Cathay Pacific goes to great lengths to understand and help them on their way in life.
  • Progressive – inspired by the airline’s dynamic home of Hong Kong and the Asia-Pacific region, Cathay Pacific brings modern, forward-thinking attitudes and ideas to its customers, in a simple way. The use of technology makes customers’ journeys easy and enjoyable.
  • Can-Do Spirit – inspiring confidence and trust among its customers with positivity and determination.

The airline also points to  more tangible improvements such as new seats, Wi-Fi across the majority of its long-haul fleet and enhanced food and beverage offerings in all classes.

There are several youtube videos on the theme and this is one of them:

Emirates reports full-year profit slump

Emirates profit slump
Emirates A380s at the airline's Dubai hub. Photo: Emirates

Dubai-based Emirates Group has reported a 44 percent fall in annual profit as it faced higher oil prices, a weaker US dollar and increased competition.

The group profit fell to $US631m even as revenue increased by 7 percent to $US29.8 billion.

Profit from its airline operations dropped a bigger 69 percent to $US237m with a thin profit margin of 0.9 percent.

But it was still able to record its 31st consecutive profit, a stark contrast to the $US1.28 billion 2018 loss at financially-embattle Etihad in nearby Abu Dhabi.

READ:  Etihad posts another massive loss in 2018.

Emirates chief executive Sheikh Ahmed bin Saeed Al Maktoum described 208-19 as a “tough” and said the company’s performance was “not as strong as we would have liked”.

He said it was difficult to predict the year ahead but both Emirates and sister company dnata were “well positioned to navigate the speed bumps”.

“Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets,’’ he said.

“The uptick in global airfreight demand from the previous year appears to have gone into reverse gear, and we also saw travel demand weaken, particularly in our region, impacting both dnata and Emirates.

“Every business cycle is different, and we continue to work smart and hard to tackle the challenges and take advantage of opportunities.

“Our goal has always been to build a profitable, sustainable, and responsible business based in Dubai, and these principles continue to guide our decisions and investments.”

Total operating costs at the airline increased 8 percent as the airline’s fuel bill rose 25 percent. Revenue rose 6 percent to $US26.7 billion.

Traffic remained steady at 58.5m passengers, up 0.2percent, with capacity growth of 4 percent producing a slightly lower passenger seat factor of 76.8 percent.

The airline said an increase in market fares and a favorable class mix saw passenger yield rise more than 3percent to 7.1 US cents per revenue passenger kilometre.

The airline received 13 new aircraft during the financial year: seven Airbus A380s and six Boeing 777-300ERs.

It phased out 11 aircraft to bring its fleet count to 270 at the end of March with an average age of 6.1 years.

The Dubai carrier launched three new passenger destinations in 2018-19: London Stansted (UK), Santiago (Chile) and Edinburgh (Scotland)

 

 

 

 

Major endorsement for Boeing 737 MAX by largest pilot union

canada MAX training
The 737 MAX

In a major endorsement for the changes made by Boeing to the 737 MAX the world’s largest pilots’ union will not ask the US regulator the FAA to require additional mandatory simulator training on the Maneuvering Characteristics Augmentation System (MCAS) scenarios before pilots can fly the aircraft again.

According to Aviation Week, The Air Line Pilots Association (ALPA) will just recommend scenario training as part of routine recurrent training.

Aviation Week says that ALPA “will make its views known in comments on a draft of proposed minimum 737 MAX training standards out for public comment. The Flight Standardization Board (FSB) draft report does not recommend simulator sessions as part of transition training for 737 Next Generation pilots upgrading to the 737 MAX, opting for less costly computer-based training instead.”

READ: Women kicked off plane after ignoring safety briefing 

It adds: “A person with knowledge of ALPA’s comments tells Aviation Week that the pilots’ union will go a step further, calling for hands-on simulator training at the earliest scheduled opportunity. Under this scenario, MAX pilots would fly simulated MCAS-related scenarios within a year or so as MAX simulators become available, but not before they return to line operations once flight restrictions on the model are lifted. Some regulators are expected to require simulator training as conditions for removing their operations bans, and Air Canada has said it is already using its MAX simulator—the only one in airline hands in North America—to run its 420 MAX pilots through MCAS-related scenarios.”

READ Aviation Week’s full story here.

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