Airbus signed (26-Jan-2010) an MoU with the CDB Leasing Co Ltd (CLC) on cooperation in aircraft financing and leasing. Under the MoU, CLC, one of China's leasing companies, will provide aircraft delivery financing solutions to airlines for the acquisition of aircraft ordered from Airbus. CLC will provide financing support by way of sale and leaseback transactions with its airline customers in the amount of up to USD4 billion over the next five years for all Airbus aircraft types, including aircraft assembled at the Airbus Final Assembly Line China (FALC) as well as Airbus' Final Assembly Lines in Europe. CLC is also considering purchasing a certain number of aircraft directly from Airbus for future leasing needs of airlines worldwide. [more]
Airbus and CDB Leasing Co Ltd sign MOU on aircraft financing solutions
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Spring Airlines seeks to redefine itself in a more crowded Chinese LCC market
The company folklore of the Chinese low cost carrier Spring Airlines has become entrenched in aviation history, with photos of Spring staff on duty trips sharing hotel rooms while eating instant noodles.
For the Chinese market this thriftiness, and regular candid interviews with billionaire founder Wang Zhenghua, became synonymous with the growing number of budget flights on Spring Airlines. The public became educated about China's only notable LCC, which was markedly different from the cookie cutter format of full service domestic airlines.
But the spectrum of airlines in China is widening and Spring, now under the leadership of Stephen Wang, needs to reassert its position in the Chinese market.
Mr Wang addressed CAPA's Americas Aviation Summit in Orlando in Apr-2017. There are new LCCs and airlines transitioning to LCCs with different service levels, making Spring wonder if it should be an "ULCC". The reality of a government orchestrated market means Spring needs to consider widebody operations for domestic trunk routes, and possible long haul flying. Spring also needs to diversify its presence: its home hub of Shanghai is high yielding but this has invited envy, and an aviation hub overhaul could mean that LCCs are moved to a new and remote third airport in Shanghai.
Alaska Air Group ups merger synergy targets as the margins for 2017 compress
Alaska Air Group has revised projected synergies from its merger with Virgin America upwards in both costs and revenue as it leverages the power of a larger network with a broader footprint in California, and uses the combined fleet to maximise profitability on transcontinental routes by placing higher gauge aircraft in those markets.
The existing Airbus narrowbodies operated by Virgin America will remain in the combined airline’s fleet for the foreseeable future. As a result, those aircraft are being reconfigured to offer standard interiors, including Alaska’s first class seat.
Similarly to Virgin America prior to the merger, Alaska has decided that a lie flat seat offering does not fit into its strategy in the contested US transcontinental market. In fact, choosing not to develop a lie flat product could put Alaska in a more favourable position when an (inevitable) economic down cycle occurs.
Despite the more favourable synergy estimates, Alaska will face some margin pressure due to Virgin America’s overall lower margin business. However, even though its margins are likely to drop in 2017, Alaska is stressing that its pretax margin performance will best the industry average.