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Regional Aircraft

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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

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 #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 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

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

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

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

Fastjet hits back at media for being to harsh on it, yet while no one can be as bad as Fastjet was in 2016, with an operating loss of $US 63.9m (yes, -48% operating loss margin) operating 3 x A319’s, things have not changed much since August 1, 2017. The airline received $US 72.8m in new investment in 2017 and had an operating loss of $25.3 million and in that 18 months it has burned it all away with a smaller fleet (3 x ERJ-145, 2 x E190)? yes it reduced expenses, off course with smaller aircraft, but burning cash at $4.0m a month one has to really ask is this ‘new’ business model any better? as load factor is 71% and revenue per seat of just $60.90 means its yield is way too low, again another carrier offering LOW FARES, but NOT a LOW COST CARRIER! and PRASK is well below CASK, and they want more money? seriously?

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       Tomas’ Comment: They can paint a rosy picture, but it has been under a turnaround since August, 2016, so 22 months of restructuring they should be further along in their recovery, but they are not and yes they have down-gauged to much smaller … Continue reading

SUMMARY: NO surprise! Fastjet of South Africa is on the brink of failure, without a cash immediate injection, as cash on hand is down to $US 3.3m, this airline’s LCC business model with A319’s was broken for years, then they abandoned the model for regional jet flying with 3 x ERJ-145’s and 2 x E190’s. With operations in Mozambique (under Solenta Aviation Mozambique), South Africa (“branding licence”? with Federal Airlines), Tanzania (Fastjet Tanzania 49% owned) and in Zimbabwe (FastJet Zimbabwe 49% owned) and still cannot make money, share price fell 70% today, and yet still the airline is valued at $US 29m seriously?

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Fastjet warns it cannot continue without equity raising Airline Economics Daily – June 27, 2018 Tomas’s Comment: This is a sad story, the LCC model was a disaster, in 2016 it lost $US 48m on $US 68.5m in revenue? a -70% loss margin? what kind of business is that? They found a … Continue reading

SUMMARY: The Chairman of the Republic of China (ROC) (aka Taiwan) based Daily Air, has been detained over fraud. It is alleged the airline created fake invoices to get more state subsidies, and at this point no word if there was any ‘irregularities’ with the recent acquisition of 4 x DHC-6 Series 400’s from Viking Air which has a value of $US 30 million. The airline flies into the highly volatile and politicized islands of Penghu, Kinmen, and Matsu, which are claimed by the Peoples’ Republic of China (PRC) which considers the islands and Taiwan, its territory, and makes no bones about the fact the ‘renegade’ province will one day be part of the PRC again, ideally peacefully but by military force if need be. The ROC is now, sadly down to just 17 UN member states that recognize it over the PRC out of 193 UN member states, the tide is turning against Taiwan and its once big aspirations of full independence.

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Head of Taiwan’s Daily Air detained over fraud June 21, 2018 Daily Air’s new Viking Air DHC-6 Series 400 Twin Otter     The Chairman of Daily Air Corporation (4 x DHC-6 Series 400 from Viking Air and 2 x Do228-212), a state-subsidized domestic airline, serving several of the offshore islands of … Continue reading

SUMMARY: Canada’s PAL Aerospace, owned by Winnipeg based Exchange Income Corporation (EIC), is waiting for Guyana’s government approval to work with local operator Roraima Airways to provide aerial surveillance/patrol flights to the emerging oil and gas industry off shore.

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     PAL Aerospace not yet in operation in Guyana-will not be working without gov’t approval, Gouveia says Guyana New – June 20, 2018     PAL Aerospace King Air 200 MPA (maritime patrol aircraft), the aircraft that put Provincial/PAL on the map for MPA ————————————————————————————————————————     Tomas’s Comment:   PAL Aerospace … Continue reading

After 8+ years, the Sukhoi SSJ100 program still struggles with just 125 in service, now launching their new 75 seat SSJ75 to take on the E175-E2, MRJ90 and CRJ900, while a SSJ130 is in the works with 115 seats to take on the E190-E2 and the CS100? just can’t compete as latest orders from small & weak, sanctioned or Russian airlines shows (Aero Mongolia, S7, Iran Air Tours and Aseman Airlines)

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/ READ: Several previous articles on this site on the Sukhoi SuperJet Sukhoi SuperJet from Russia, with hope CAPA- June 19, 2018   Tomas’s Comment: Since now 86 months since the 1st SSJ100 was delivered to launch customer Armavia (Armenia) which took 1 of 2 on order on April 21, 2011 and went bust … Continue reading

Nepal’s aviation sector removed from ICAO’s SSC (significant safety concern) list

You can read more of my Articles and Posts on LinkedIN at:   https://www.linkedin.com/in/tomas-chlumecky-3200a021/    The Himalayan Times – June 22, 2018 – RASTRIYA SAMACHAR SAMITI Nepal’s aviation sector removed from ICAO’s SSC list Minister for Culture, Tourism and Civil aviation, Rabindra Prasad Adhikari, has said that International Civil Aviation Organisation (ICAO) has removed Nepal’s aviation … Continue reading

Bombardier signs agreement with DAIR to spur innovation in Ontario’s aerospace sector, but referring to Bombardier’s innovation and aerospace is a self contradiction (oxymoron) given its massive reliance on developing its product line by stretching the 1970’s CL-600 Challenger (ALL CRJ’s and ALL Globals) or stretching the DHC-8-100 into the Q400, stretching an aircraft for decades is not innovation in my book.

You can read more of my Articles and Posts on LinkedIN at:   https://www.linkedin.com/in/tomas-chlumecky-3200a021/  Bombardier signs agreement with DAIR to spur innovation in Ontario’s aerospace sector AviTrader-June 22, 2018     Tomas’s Comment: It’s interesting and good for aerospace education, but let’s be real, Bombardier is not a big innovator in aerospace, outside the miserably failed … Continue reading

SUMMARY: While India’s aerospace industry is growing, most of it is on the military side while commercial aviation is far behind, yet HAL (Hindustan Aircraft Ltd) started with license production of the Hawker Siddley 748 turboprop airliner almost 40 years ago (89 built) and then in the mid-1980’s continued with the Dornier 228 (till now +125 built), and that is is ? Oh, lets not forget the never ending 29 year development of the NAL Saras, a 14 passenger pusher turboprop resurrected earlier this year again, for what ? its too small for India’s needs. The Indians know they need bigger aircraft, have the “plans” for the 80-90 seat Regional Transport Aircraft (RTA) turboprop and the 70-100 seat Indian Regional Jet (IRJ), but as of now its just talk and nice computer generated pictures. Of the top 7 major aerospace manufacturing nations, India is ranked 7th, yet was ahead of the Chinese 30 years ago, but it has not moved forward, while the Chinese now have the ARJ-21, C919 and soon MA-700 turboprop, all India has is the little 19 passenger Dornier 228, and that is it. What is India waiting for ? it has a huge market for aircraft between 19 to 100+ passenger turboprops and jets, it could have been a major competitor in that segment to Brazil, Canada and China, but its out of the game, too late now because too many new players in the market, Japan (MRJ-75/90), Turkey (TR/TRJ-628), Russians (SSJ100, MC-21) and Indonesia (N219), and other nations to come ?

 India’s commercial aircraft industry struggles to get “off the ground”, yet it has had years of experience and some success, but today it is sadly out of the game. Hindustan Aeronautics Ltd. (HAL) first licence production was in the early 1980’s to 1988 the 44 passenger British HS-748 turboprop, of which 380 were built, and … Continue reading

SUMMARY: Canada’s Viking Air is shutting down its expensive $7.5M Series 400 Twin Otter production for 90 days and laying off 212 workers (46% of work force) as deliveries have exceeded sales for sometime and one cannot live off one’s backlogs for too long before you have “white tails”, which apparently there are 6 right now in Calgary. The 19 seat utility market is tough, roughly 33 aircraft deliveries per year by just 4 OEM’s, and surely no one really makes money in the market ? While Viking has delivered 120 in the past 7 years, it is far short of the 2006 forecast of 440 (at a price of $3.195M) over 10 years (off by 300%). Could the much higher price (+134% on 2006 price) have something to do with the lower demand ? off course like with all the other OEM’s, the high price ($279,000 to $447,000 per passenger seat) has killed the market (B737-800/A320 at around $275,000 per passenger seat), but with very low production rates what can you do ? Nothing ! Now, Viking is looking at the out of production turbine powered $37M per copy CL-415 water bomber as a possible new production program. The turbine CL-415 had just 90 deliveries in 22 years of production (4.1 per year) while the radial engine CL-215 had 125 deliveries over 21 years (6.0 per year), so no BIG market here in water bombers, maybe 4 to 5 per year ? but I think a 30 seat regional amphibian can make a difference, the CL-215C ‘Transport’ (2 delivered to Venezuela long ago) is a 30 to 36 passenger certified version and the market is out there all over the world, more than for a firefighter, and surely another 4 to 5 CL-415C ‘Transport’ per year, can change the business case for re-starting the production line for the CL-415 ? 10 aircraft and $+375M in annual revenue sounds good (that is equivalent to 50 x Series 400’s).

READ” Blog on 2016 Turboprop Market (click General Aviation) for more info on the 19 seat market in the March 9, 2017 issue   Viking Air has announced on May 31, 2017 that it is shutting down production of its $7.5 million Twin Otter Series 400 for 90 days and will lay off 212 starting … Continue reading

SUMMARY: The Caribbean is a “graveyard” for airlines over 40 in the past 30 years, with 6 government owned airlines still flying and still burning taxpayers money, destined to never make money because they never change, till now. Cayman Airways, owned by the British Overseas Territory of the Cayman Islands has been changing quietly for years, reducing its debt, modernizing its fleet with 4 x B737-8 (Max8’s), but still dependent on $20+M per year from the government. A new modern fleet will help reduce operating costs but lease rates will be 6 times more than the B737-300’s, and new routes like the latest to Roatan, Hondurans are a good sign of expansion. It is at least a change, the other 5 government owned airlines are ‘business as usual’, politicians sticking their noses into everything they don’t understand, no new initiatives, no new strategy, no new leadership, just sitting around their desks “doing the same things over and over again expecting different results” (Einstein’s definition of insanity) and it applies so well to these 5 perpetual money losers. Only radical change will bring about a brighter future for Government owned Caribbean airlines, its time for surgery to revive them or its time for euthanasia, and cut off their life support (aka taxpayers money) ? one or the other, but things cannot keep going on usual, at some point creditors will have had enough, and then its THE END.

I have written about the Caribbean airline fiasco for years, you can read previous Blog articles on LIAT, Surinam Airways, InselAir, etc.by clicking on State Owned Airlines (under Categories) For many years I have written about the plight of Caribbean airlines, and the infamous region I call a “graveyard” for airlines. Yes, the list of … Continue reading

UPDATE: Bombardier Inc. ex-President & CEO, and as of today also ex-Executive Chairman, Pierre Beaudoin is out at least ! and so are 1st Quarter, 2017 financials. In the first 3 months of 2017, Bombardier’s revenue is down to $3.6B (-7.7% on 1Q/2016) continues its revenue slide (down $3.77B or -18.7% since 2014). Aircraft deliveries for 1Q/17 are down to just 44 aircraft (15 Commercial and 29 Business) , Q400 deliveries were 6 with just 26 orders in backlog (13 months), CRJ deliveries were 8 with just 54 orders in backlog (20 months), and only 1 CS300 delivered. Bombardier delivered 29 business jets, more skewed to light jets as the top end market is struggling these days, not good news for the new Global G7000. Meanwhile, only 2 x CS300’s orders in the past 11 months ? the program has a serious problem selling the aircraft, and two, selling above cost at some point is important, no ? Now, Boeing wants US Commerce Dept. to place a $13.4M “price dumping” tariff on the CSeries deal with Delta Air Lines and ban the aircraft from further US sales, meanwhile ATR and Embraer are complaining to the WTO of Canadian “illegal state aid” to Bombardier, criminal bribery investigation under way in Sweden and yet the top 5 executives wanted a 50% increase for an “Exceptional 2016” seriously ? One wonders what “planet” these executives live on ? and where is this “magical” 7,000 deliveries in 20 years in the 100 to 150 passenger market ? This CSeries program is still with just 320 orders (no 40 for Republic, just PR deferral till the end of time) after 9 years ? maybe they got the market positioning all wrong ? What happened to the “game changer” ? and the “dream team” ? that was suppose to sell lots of CSeries ? Those Top 5 executives need to go, 1 down 4 to go ? Lastly, Porter Airlines (Canada) placed a conditional order for 12 x CS100’s and 18 options in April, 2013, show the price offered to Porter and we will all know if they are “price dumping” in the US market or not, easy no ? Behind all the denials they know they are “price dumping” its sadly the only way they know how to sell the CSeries, yup all 340 orders below cost !

READ more on Bombardier on this Blog, just click Bombardier under Categories on the right side of menu.   The 1st Quarter results are out for Bombardier, but the most important news is that Executive Chairman, Pierre Beaudoin is stepping down after numerous problems and Revenue declines. The man I refer to as the “Destroyer” … Continue reading

SUMMARY: A small airline in Thunder Bay, Ontario, North Star Air Ltd. has been bought for $C 31M ($US 23M) by Winnipeg based North West Company (NWC), a large Canadian grocery and retail company with +218 stores, many in remote and isolated communities across Canada’s North. The driver of this deal was to control its distribution by having its own cargo airline, and not being dependent on what is basically a air cargo monopoly by Calm Air in the Manitoba, Nunavut and Kivalliq regions, where NWC has many stores, and where the First Nations communities are totally dependent on aircraft for all their local needs for most of the year. The acquisition raises the problem of a lack of competition in many parts of the North, where communities and suppliers have all but one choice of airline in and out of many communities, which in many cases allows for high margin “monopoly” pricing. Canada has no Essential Air Service (EAS) like the USA, which subsidizes scheduled air services to 150 markets of which 44 are in remote parts of Alaska with single engine turboprops like the CE-208B to SF340’s and CRJ-200’s at a cost of $250M a year (President Trump looking to cut that). Canadian passengers and suppliers in the North have no choice but to pay the very high fares and freight rates demanded by air operators. Time for a new fresh look at affordable air access in the North ? if we are to develop the North as Ottawa says, then we cannot burden and punish the people there with high fares and freight rates, that make life their very expensive as everything in most communities goes by air, from groceries, lumber to even fuel for electric generators.

It has been pretty quite on the Canadian airline mergers and acquisition front since the late June, 2016 acquisition of Transwest Airlines (Prince Albert, Saskatchewan) by local rival West Wind Aviation (Saskatoon, Saskatchewan). That deal created another Provincial regional airline monopoly, just as EIC (Exchange Income Corporation) has in neighboring Manitoba, where it now owns … Continue reading