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Uganda Airlines II, starting to take shape, but I am not liking many of the decisions made so far. CEO Ephraim Bagenda has just 6 years of aircraft maintenance experience at Rwandair? really? when commercialisation will make or break the new airline? they have a CEO with no commercial, finance, sales, marketing, RM, etc. experience? it is just not the right qualification for a CEO for a new national carrier. Now, Uganda Airlines has the unique distinction of being the the only buyer of the A330-800 in the whole world? why?, though it did get a 58.4% discount (to $US 108M) on the $US 259.9M list priced aircraft, they could have leased a new B787-8/9 or A350-900? Meanwhile Bombardier is showing its desperation to sell its struggling CRJ’s by selling 4 x CRJ900’s to Uganda Airlines for $US 110.8M ($US 27.7M each), which is a discount of 40.4% from the list price of $US 46.5M each, very good for Uganda Airlines, but could have leased them also or E175’s/190’s, but now the fleet resembles that of Rwandair (except no B737’s yet). So what did AA pay for the 15 + 15 CRJ900 order a few weeks back? surely more than 55% off ($US 20.9M for each)? which is not far from the estimated cost of $18.8M, leaving a small margin for the new Regional Aircraft Division now that CSeries is part of Airbus for free. Looks like great deals are plenty today from all 4 commercial jet aircraft OEM’s.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Reviving Uganda Airlines: How government plans to raise the money – Daily Monitor – July 24, 2018   By Dicta Asiimwe & Raymond Tamale         Uganda hurriedly firmed up plans to revamp the country’s defunct airline in March 2019, after signing a … Continue reading

SUMMARY: Farnborough International Airshow 2018

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       Farnborough Airshow wrap-up    The Farnborough 2018 Airshow was stolen by freighter orders, proving to many that the air cargo market is restoring to strength. We could therefore argue that Farnborough 2018 further shows that carriers such as Emirates (as one major example) … Continue reading

Ethiopian Airlines (ET) is on a roll with is domination of the African skies as it takes equity positions in many new state owned airlines, the latest being tiny Eritrean Airlines (1 x ACMI leased B737-500), now that peace has come at least between the two neighbours. Ethiopian Airlines has for years had minority ownerships in ASky of Togo (40%) and Malawian Airlines (49%), but now it has gone on a binge of ownerships and partnerships from new national carrier start-ups and existing state carriers like Zambia Airways II (45%) to Guinea, Ghana, Chad, Mozambique, Equatorial Guinea, DRC and now possibly newly announced Nigeria Air. As Africa’s biggest and best managed airline (private and state owned) in Africa, ET is well positioned to dominate the continent with its equity and partnership ‘alliance’ strategy. Helping local airlines like Malawian Airlines (ex-Air Malawi) is very good, but when you start controlling a dozen plus airlines, it begins to be worrying, competition is being limited, and that is something Africa needs more of, not less. Now, new start-ups that plan to compete with Ethiopian, especially in long-haul, like Air Tanzania and Uganda Airlines and to a lesser degree for now, Senegal Airlines II face a mighty competitor that is going to pull traffic from all corners of Africa, N.A., Europe, Middle East and Asia with 100+ aircraft through Addis Ababa, and the small carriers will find it very hard to compete on costs, price, schedules, network to service. It is a very tough business to be entering today.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     Ethiopian Airlines confirms it is eying stake in Eritrean Airlines   Avitrader – July 20, 2018       Tomas’s Comment:   This peace between Ethiopia and Eritrea, (a country of 5.5 million people) is good news for sure, the first flight in years … Continue reading

EC approval of Ryanair and LaudaMotion deal, where Irish Rynair is buying 75% of LaudaMotion (up from existing 24.9%) sparks war of words with Lufthansa, which was forced to drop its bid for NIKI in December, 2017 after the EC’s Directorate General for Competition warned that the tie-up would have harmed passengers in Germany, Austria and Switzerland. NIKI was part of airBerlin and had been kept going through a combination of as much as 10 million euros ($12 million) in weekly support from Lufthansa and a 150 million-euro government loan granted to Air Berlin in August to prevent a wholesale grounding of flights. Lufthansa was successful in acquiring some other Air Berlin assets, including multiple aircraft, crew and slots, as well as regional air carrier LGW, subject to conditions set by the EC to avoid competition “distortions”. These included a reduction of Lufthansa’s project acquisition of slots at Dusseldorf airport and the transfer of 11 aircraft to LaudaMotion.

    Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/         EC approval of Ryanair/LaudaMotion deal sparks war of words with Lufthansa   19 July 2018 by Naomi Smith – Getting The Deal Through           Lawyers from Cleary Gottlieb Steen & Hamilton have helped Ryanair win unconditional … Continue reading

Two of Europe’s biggest regional airlines, Air Nostrum and CityJet aim for closer cooperation , with a combined fleet of 88 aircraft and up to Euro 700 million in revenue from wet lease and franchise contracts they are out to conquer the regional market in Europe? Yet they are both over dependent on 1 major customer each for their survival, CityJet on SAS and Air Nostrum on Iberia Regional, they both have a large fleet of what I call “loser” aircraft programs as CityJet has 7 (+8 on order) of the 95 passenger Russian Sukhoi SSJ100’s, the ONLY operator in Western Europe, and only the 2nd western airline to operate it commercially (after Mexico’s Interjet), its cheap and it is about to get the boot from LH’s Brussels Airlines for poor dispatch reliability! Air Nostrum has 27 of the 60 delivered (just 68 ordered in 8 years of production) 100 passenger CRJ1000’s (a 18.2 meter stretch of the 1970’s CL-600 Challenger business jet), that airlines just don’t want or need, it is a very long tube from the back, and noone is buying it, airlines know best as to what is good and bad, it is why aircraft orders say novels about any aircraft no matter what an OEM says or thinks!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     July 17, 2018   100 passenger CRJ1000 of Air Nostrum (Spain)   95 passenger Sukhoi SSJ100-95 of CityJet (Ireland)       Tomas’ Comment:   Interesting development, but no surprise, CityJet has been looking to buy other other operators as it looks for M&A … Continue reading

SUMMARY: DAY #2 at Farnborough International Airshow – July 17, 2018

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       July 17, 2018, Airfinance Journal:   Day two of the Farnborough air show saw David Neeleman’s new US airline commitment for 60 Airbus A220-300 aircraft. Deliveries will begin in 2021.     Aircraft announcements:     Vistara agreed to purchase six Boeing 787-9 aircraft and take … Continue reading

SUMMARY: DAY #1 at Farnborough International Airshow – July 16, 2018

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/         July 16, 2018,  Airfinance Journal:        Day One of Farnborough 2018 belonged firmly to Boeing in terms of firm orders, although the US manufacturer saved up many of its largest announcements from deals done earlier in the year.   Airbus, meanwhile, … Continue reading

The Caribbean wide aviation reform (aka “Bang On” to some) which targets air service liberalization for better connectivity, high air ticket taxes and high airport charges, which are all holding back the development of a profitable Caribbean air transport system today. The Bahamas alone can have a $415 million gross domestic product (GDP) expansion and the creation of over 16,000 jobs. It estimated that air arrivals to this nation would increase by 1.058 million or 42 percent above baseline, with the majority – 901,035 – coming from abroad and representing the high-spending stopover tourists the Bahamas is targeting. None of this is new, it is old hat for decades, we need new young politicians to step forward and push for REAL changes, instead of talking about them over and over again! Time for big political change like in Barbados 2 months ago! out with old inept ‘dinosaurs’ politicians and in with the new young visionaries that want to make real changes for the betterment of the good people of the Caribbean, no more excuses. Money losing state owned inefficient airlines need to kick the addiction of using public money to stay afloat, swim or sink and make room for private capital to takeover from where the state has failed for 50+ years in the region!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       ‘Bang On’ Over $415m Aviation Boost For GDP As of Wednesday, July 11, 2018 – Tribune 242 – By NEIL HARTNELL           #Research showing The Bahamas will enjoy a $415m economic boost if it participates in Caribbean-wide aviation reform … Continue reading

The national flag carrier of Fiji is Fiji Airways, whose history goes back to 1951, and which was until May 2012 known as Air Pacific, and from 2012 it has become a very profitable airline national airline under 2 excellent previous airline executives, American CEO’s Dave Pflieger (Ex-CEO Hawaiian Airlines and after Fiji Airways he went on to Silver Air, Island Air and now RAVN Alaska), German Stefan Pichler (Ex-CEO Thomas Cook AG, Ex-COO Virgin Australia, Ex-CEO Jazerra Airways, Ex-CEO airBerlin and now CEO Royal Jordanian) and now highly regarded and talented South African CEO Andre Viljoen (Ex-Comair, SAA, Ex-CEO Air Mauritius). Fiji Airways has grown its fleet to 12 jets (6 x A330-200, 1 x A330-300, 1 x B737-700, 4 x B737-800 and 6 on order, 1 x A330-300 and 5 x B737-8’s). The airline is part of the Air Pacific Group, which also owns 100% of Fiji Link (1 x ATR-42-600, 2 x ATR-72-600, 3 x DHC-6-300’s to be replaced by 4 x Viking Air’s Series 400 Twin Otters), with the Government of Fiji owning 51% of Air Pacific Group, 46.32% owned by QANTAS and 2.68% ownership spread out between Air New Zealand and the Governments of the Pacific island states of Kiribati, Tonga, Nauru and Samoa.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     FIJI AIRWAYS, THE LITTLE AIRLINE WITH A BIG HEART   Written by Tom Ballantyne July 14, 2018 – June 2018 edition of Australian Aviation.       It’s the little airline with a big heart. In the South Pacific, where history suggests financial success … Continue reading

The Chairman of Estonia’s Nordica resigns. Remember this was the airline that took over Estonian Air routes the very day Eastonian Air shut down (November 8, 2015) as per European Commission orders to give back to the Estonian people the Euro 85 million in illegal aid that was used to keep the struggling national airline alive as it distorted competition. With no money to give back, Estonian Air had to shut down, just like Hungary’s Malev (February 3, 2012) and Cyprus Airways (January 9, 2015) for using illegal state aid. The Estonians learned from the Malev and Cyprus Airways EC ruling on how to circumvent EC rulings, and Nordica (Nordic Aviation Group) was readied and waiting in the wings for 2 months before the EC Ruling with Euro 72.7 million in new Estonian state aid for a “new” state airline. Now it has 18 aircraft (6 x ATR-72-600, 2 x CRJ700 and 10 x CRJ900) and is 49% owned by LOT. Has Nordica and Estonia circumvented EC rules? did they find a way to beat the EC and just let the old national airline collapse and start a new one with no repercussion? You know, all EU states should get out of the airline ownership business, airlines today need to swim or sink and state aid distorts competition, especially with private airlines who need make a return for their shareholders. Time for the EU states to get out of the airline business finally! No more public money for EU airlines, that is what the EC should be aiming for now.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Chairman of the Management Board of Estonian airline Nordica submitted his resignation   July 14, 2018 –  The Nordic Times       Jaan Tamm, Chairman of the Management Board of Estonian airline Nordica, submitted his resignation to the Supervisory Board of Nordic Aviation Group … Continue reading

Idiots everywhere! an Air China B737 Flight CA106 enroute from Hong Kong to Dalian in China, carrying 153 passengers and 9 crew members suddenly dropped to 10,000 feet, prompting oxygen masks to be deployed. The jetliner descended from 35,000 feet to 10,000 feet in just 10 minutes. co-pilot tried to hide the fact that he was smoking but accidentally shut off the air-conditioning, causing oxygen levels to fall. Shutting off the air conditioning units triggered an alarm and prompted the crew to perform an emergency pressure relief procedure, which then released the cabin’s oxygen masks. After the rapid descent, the crew realized the problem and reactivated the air conditioning, allowing cabin pressure to return to normal. Reportedly the pilot has been fired!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     Air China co-pilot caught smoking, caused emergency descent AeroTime News Hub – July 14, 2018       An emergency descent made by an Air China passenger plane after the cabin lost pressure on July 10, 2018, had experts scratching their heads. Now, a … Continue reading

Smart way for Estonia to avoid illegal state airline support? On November 8, 2015 state owned Estonian Air was forced to shut down after the European Commission declared it cheated with state aid to stay afloat and that it return Euro 84.9 million. Estonia knew this decision was coming and had already decided that the country must have a Estonian airline at all cost and two months before the closure it set up two new public aviation companies, Nordica and OU Transpordi Varahaldus, with Euro 72 million allocated by the state, and screw the EC, they were going to use state aid for another state owned airline to distort and compete with other EU based airlines? Ho wcan the EC allow this, should the Hungarian and Cypriot Governments have put up new money again for a new state airline when Malev and Cyprus Airways was forced into bankruptcy for illegal state aid? The EC needs to get its act together, the Estonians laughed in their face, and started flying their new state owned airline Nordic Aviation Group, the same day estonian Air stopped flying! What was the point? and what is the lesson for other EU state airlines, and where it the protections for privately owned airlines against state owned airlines like SAS, LOT, airBaltic, Croatian Airlines when the EC rulings are circumvented?

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     This article was written and first published on gediminas.ziemelis.com on 13th February 2018   Smart way for Estonia to avoid illegal state airline support?         Tomas’s Comment: A sad story on how the European Commission failed privately owned airlines in the … Continue reading

Oman Air Targets Africa for Potential Network Expansion, another non-African airline moving into Africa competing with local airlines for traffic out of Africa. If African airlines do not meet the challenges soon, foreign carriers (Emirates, Qatar, Turkish, Saudia, flyDubai, etc.), will dominate flights out of Africa to their respective 1-stop hubs and local African carriers will struggle to make their non-stop long haul services profitable, as the BIG players have much lower costs, and feed to and from many different destinations to fill their flights.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Oman Air Targets Africa for Potential Network Expansion Aviation Tribune – July 11, 2018           Oman Air (47 aircraft, 4 x A330-200, 6 x A330-300, 23 x B737-800, 3 x B737-8, 5 x B737-900ER, 4 x B787-8, 3 x B787-9, plus … Continue reading

There is good news and there is bad news out of Surinam Airways (SLM), first the good news, long time CEO Robbi Lachmising is gone and hopefully more executives will go at the top, as really little has been done to turnaround SLM, a drain on public funds, and not the driver of economic and tourist development a national airline should be. The new CEO is Greg Lau and the new CFO is Steve Silos, and they are not from the airline industry and what I know, they are not political appointees of President Desi Bouterse’s NDP (National Democratic Party), unlike the previous CEO. This is all good, a fresh set of eyes, ears and ideas is finally running the show at SLM, and hopefully ready and willing to look at new business models and strategies, beside the one that has changed very little since independence on November 25, 1975. The bad news, is really not that bad, it is just another loss for the last fiscal year 2017-2018 of $US 3.0 million, which seems better, but in light of a small fleet of 3 aircraft (1 x A340-300, 1 x B737-700 and 1 x B737-300) it is just another indication SLM needs a major overhaul of its business, fleet and staff, as +/-800 employees for 3 aircraft is at least 4 times what it should be, to be efficient and competitive with any airline in the Caribbean Basin.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   SLM suffered losses of US $ 3 million JULY 9, 2018 – Armand Snijders       Tomas’s Comment:   I know SLM pretty well, I was first there in the early 1980’s and I love the place and its people, the last time I … Continue reading

RIP: Australia’s, Adelaide based charter operator Rossair goes into administration after 50 years in business, never recovering from its fatal May 30, 2017 crash of its Cessna 441 Conquest II with all 3 on board killed.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       CHARTER OPERATOR ROSSAIR GOES INTO ADMINISTRATION written by AustralianAviation.com.au on July 4, 2018     Tomas’ Comment: It sad to see an operator/airline shut down after 50 years of service (October 19, 1967), and its a reminder of the devastating consequences of a … Continue reading

Possibly the ‘WORST AIRLINE’ in the world today financially, South African based Fastjet Group (once a LCC with 3 x A319’s, ex-Fly540), now just a point to point regional 2 x E190’s, 3 x ERJ145’s. Just received $10 million from shareholders to stay alive, after losing $48 million in 2016 on revenues of $68.5 million (-70% loss margin), and in 2017 it lost $24.5 million on revenues of $46.2 million (-53% loss margin) while it received $72.8 million in new investment in the same year along on top of its $35.2 million in debt. With cash balance down to $3.3 million on June 18, 2018 it was on the verge of collapse, having “burned” $16.7 million in 6 months and the investors have saved its ass again, but WHY? This fastjet has lost $303.4 million since 2012 on revenues of $308.1 million (-98% loss margin), and retained earnings at the end of 2017 were at a negative $338.5 million? its yield ($/RPK) is lower than its CASK, for a 108% breakeven load factor? Yet more money is forthcoming? as are 3 new ATR-72-600s’ to add more capacity and it wants to buy South Africa’s regional airline, Federal Air (aka FedAir, runs 18 x CE-208’s to Beech 1900D’s)? WHERE is the light at the end of the tunnel for this LOSER?

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   July 9, 2018     Tomas’ Comment:   So Fastjet gets another $10 million? this is the troubled airline that lost a ridiculous $48 million in 2016 on revenues of $68.5 million (-70% loss margin), then came in a new team in August 2016 and … Continue reading

A South Korean court granted a reprieve to the CEO of Korean Air Lines (KAL) Cho-Yang-ho early Friday, denying prosecutors an arrest warrant based on multiple allegations, including embezzlement and fraud.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   South Korean airlines face operational and familial headwinds By EUN-YOUNG JEONGThe Wall Street Journal – July 7, 2018 It was a rare bit of good news for Cho Yang-ho, the head of Korean Air Lines Co. He is the patriarch of a clan whose string … Continue reading

Aviation consultancy IBA has questioned whether airline profitability may have peaked considering the current macroeconomic outlook. A number of airlines are today operating with negative margins and may find the times ahead particularly difficult. Costs will continue to rise and more airlines may begin to feel the squeeze later in the year.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Airline Economics Daily – July 5, 2018     Tomas’s Comment:   We all know the airline business is a tough business to make a living in, margins are low and many costs are not controllable and the industry is very dependent on economic growth … Continue reading

The European Court of Justice has said that liability for delayed flights under Regulation EC 261/2004 doesn’t extend to airlines that wet lease aircraft and crew to other carriers. The court found that a carrier that decides to perform a particular flight, including fixing its itinerary, and therefore enters into a contract of air carriage with members of the public in the process, must be considered the operating air carrier for the purposes of compensation under regulation 261. If the purpose of the regulation is to ensure “a high level of protection for passengers”, then it is the air carrier which actually planned and operated the flight which should be held responsible for delays, the court said.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     Lessors don’t count as “operating air carriers” under Reg 261, ECJ rulesNews – 05 July 2018 by Naomi Smith         The European Court of Justice has said that liability for delayed flights under Regulation EC 261/2004 doesn’t extend to airlines that … Continue reading

Boeing and Embraer sign MOU for a new strategic partnership

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Airline Economics Daily – July 5, 2018       Putting an end to speculation, Boeing and Embraer have signed a Memorandum of Understanding (MOU) to establish a strategic partnership that will focus on the development of a commercial airplane portfolio that ranges from 70 … Continue reading