GMR Infrastructure announced (16-Jan-2020) plans to divest 49% of GMR Airports Ltd to TRIL Urban Transport Private Limited (part of TATA Group), an affiliate of GIC and SSG Capital Management. This is an increase from the 44.44% stake GMR previously agreed to divest to the investors. [more - original PR]
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If there was any doubt that environmental stewardship is rapidly gaining traction among investors, look no further than the annual letter from the BlackRock (Investment) CEO declaring that sustainability is taking centre stage in the company’s investment approach. The declaration is not surprising; however, it should serve as a wake-up call to business executives worldwide that their respective companies need to have a viable environmental, social and governance (ESG) plan in place in order to attract investment.
The scrutiny of the aviation industry’s environment footprint continues to grow, and airlines are touting a range of environmentally responsible practices they have adopted, but arguably it is tough to garner a unified message from the industry.
The letter from BlackRock shows that environmental responsibility will become a core part of business for industries worldwide – sooner rather than later. For its part, Delta Air Lines has pledged to become more vocal in the environmental movement in 2020.
Boom Supersonic commits to using Prometheus carbon-neutral fuel for XB-1 flight testing (Boom Supersonic report)
Turkish government to launch carbon-free airport project (Turkey's Minister of Transport and Infrastructure report)
Clean Sky publishes 11th call for proposals with EUR45m budget (Clean Sky report)
VINCI Airports to introduce environmental incentive/penalty scheme across its airport network (VINCI Airports report)
Premium Analysis
Swoop Airlines: low competitive threat, high opportunitiesThe Canadian ultra low cost airline Swoop recently marked a milestone when it reached two million passengers carried since its launch in Jun-2018. That is an accomplishment for an airline that entered the market under intense scrutiny as sceptics questioned whether Swoop’s parent WestJet could effectively execute owning an airline with a distinctively different business model and brand.
The consistent message Swoop sends is simple – it is in the business of passenger stimulation. And for now, the airline sees no shortage of opportunity for spreading the ULCC model across Canada. Swoop believes it is also benefitting from having little direct competition over its network of secondary bases.
Swoop also seems poised to quickly apply lessons quickly learned as it evolves, ranging from distribution to network strategy.
Headlines
World Economic Forum: Global risk perceptions have shifted from the economy to the environment (WEF report)
Etihad Airways targets zero net carbon emissions by 2050
Lufthansa Group to increase fuel efficiency by 1.5% in 2020
Hi Fly targets carbon neutrality by end of 2021
Regional Jet OÜ to save paper as part of Paper free Cockpit project
Swedavia: it is 'absolutely essential' to develop infrastructure adapted to fossil-free aviation (Swedavia report)
Schiphol Group commits to implement nitrogen reduction measures on advice from Remkes Committee (Schiphol Group report)
VINCI commits to 40% reduction in CO2 emissions by 2030, carbon neutrality in 2050 (Vinci report)
Aéroports de la Côte d'Azur details net-zero emissions 2030 strategy (Aéroports de la Côte d'Azur report)
Dortmund Airport website now CO2 neutral (Dortmund Airport report)
Tourism New Zealand: 93% of New Zealanders agree international tourism is good (TNZ report)
UK Health secretary Matt Hancock: 'We shouldn't be flying less' (BBC news report)
Aviation Environment Federation: 'No justification for cutting APD to save Flybe'
The UK government's decision to help Flybe financially, deferring some of its air passenger duty payments, signals the socio-economic and political importance of regional air services.
It has also prompted criticism from rivals. IAG has complained that the deal breaks EU state aid rules (although, with Brexit imminent, the Boris Johnson-led government may not care). EasyJet and Ryanair have argued that taxpayers should not prop up a rival airline.
The deal is thought to be conditional on Flybe's shareholders (Virgin Atlantic, Stobart Group and Cyrus Capital) investing new capital, less than a year after they bought it. Before the government's intervention, they had appeared reluctant.
After others (Monarch, bmi regional, Thomas Cook) were allowed to go bust, this marks a sharp change of direction by the UK government on bailing out struggling airlines. The case focuses on jobs, regional connectivity (Flybe is the biggest UK domestic regional airline), and Flybe's importance to several smaller airports.
Flybe's change of ownership has not changed its structural problems and neither will this bailout. Instead, a more structural solution would be to split Flybe into three: competing for justifiable subsidy on designated public service obligation routes; operating those routes that can be commercially profitable; and exiting routes with no prospect of sustainable profitability.
Recorded at CAPA-Aviation Week Network Airline Operations Leaders' Summit & Awards Gala Dinner, 2-3 Dec 2019
Market Consolidation: Impact On Aftermarket Services
What impact does the consolidation have on airline operations? When vendors merge, what proactive actions should airlines take?
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Air Mauritius established (16-Jan-2020) a transformation steering committee, effective 16-Jan-2020. The committee will consult with stakeholders, evaluate proposals of appointed consultants, propose actions to the board and monitor the implementation of approved programmes. The carrier appointed Sherry Singh as chairperson of the committee. [more - original PR]
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17-Jan-2020 2:59 PM
Delta Air Lines CEO: 'seeing some weakness' in Asia, US corporate travel 'doing quite well'
Delta Air Lines CEO Edward H Bastian stated (14-Jan-2020) "We're certainly seeing some weakness" in Asia, due to "the China issues and some of the tariff discussions that's bled over into Korea and a few of the other Asian economies". Mr Bastian stated despite the weaknesses: "The health of our businesses in the US and the US corporate's doing quite well". [more - original PR]
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17-Jan-2020 2:07 PM
Joby Aviation completes USD590m series C financing for eVTOL R&D, Toyota lead investor
Joby Aviation announced (16-Jan-2020) it received USD590 million series C financing for development and production of its electric vertical take-off and landing (eVTOL) aircraft. Toyota was the lead investor contributing USD394 million. [more - original PR]
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17-Jan-2020 1:11 PM
Bombardier 'reassessing its ongoing participation' in A220 partnership with Airbus
Bombardier announced (16-Jan-2020) that with its exit from the Commercial Aerospace segment, the company is reassessing its ongoing participation in the Airbus Canada Limited Partnership (ACLP), which produces the A220 under a JV with Airbus. Bombardier stated that while the A220 programme continues to win in the marketplace and demonstrate its value to airlines, the latest indications of the financial plan from ACLP calls for additional cash investments to support production ramp-up, pushes out the break-even timeline, and generates a lower return over the life of the programme. This may "significantly impact" the JV value. Bombardier will disclose the amount of any write-down when it completes its analysis and report its final 4Q2019 and full year 2019 financial results on 13-Feb-2020. [more - original PR]
Duty Free International reported (16-Jan-2020) the following financial highlights for the three months ended 30-Nov-2019:
- Revenue: MYR197.2 million (USD47.2 million), +25.6% year-on-year;
- Profit before tax: MYR12.1 million (USD2.9 million), -41.0%;
- Net profit: MYR9.5 million (USD2.3 million), -44.0%;
- Total assets: MYR826.5 million (USD197.9 million);
- Cash and cash equivalents: MYR350.6 million (USD84.0 million);
- Total liabilities: MYR258.5 million (USD61.9 million). [more - original PR]
*Based on the average conversion rate at MYR1 = USD0.2395
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