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State Owned Airlines

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Six ERJ-145 regional jets are joining the eight EMB-120 at Inter-Caribbean Airways of the Turks & Caicos

  https://www.linkedin.com/in/tomas-chlumecky-aviation-doctor-3200a021/   SIX NEW JETS FOR InterCARIBBEAN By Hayden Boyce & Todeline Defralien – The Sun – September 9, 2018       Over 60 airlines have failed in the Caribbean since 1981:  Aero Wings  Carib Aviation  Caribbean Star  RedJet  Trans Island Air 2000  Air Monserrat  Air Caribbean … Continue reading

The “new” Guyana Airways Corporation (GAC) is in trouble, as the Government of Guyana removed the privately-owned Guyana Airways Corporation Inc. (GAC) from the Companies Register two years after the entity was duly registered because the name is identical to two previous companies. Now out of the blue just 2 months away from starting with 2 x B737’s there is a problem with the name? This is a classic political “shakedown” of a new company by someone high up in the Government looking for bribe, nothing else makes sense with this, the nation has waited 15 years to have its own airline, and the now that it almost has one, someone wants to pillage it before it gets off the ground. GAC (aka Guyana Airways II) is already facing challenges, as Guyana is a FAA Category 2 country, so no carrier from Guyana can fly directly to the US, where a large Guyanese diaspora lives, especially in New York. Guyana Airways now plans to just serve Port of Spain, Barbados and Havana, going up against Caribbean Airlines (CAL) will not be easy, but then a JKF service may have to face JetBlue soon and this October American will start Miami to Georgetown, as a start-up you do not want to face the BIG airlines head on right from the start, many that have, died quickly.

    https://www.linkedin.com/in/tomas-chlumecky-aviation-doctor-3200a021/   Starbroek – August 25, 2018   Boeing B707 of Guyana Airways after the 2001 bankruptcy, a sad cannibalized aircraft rotting in Georgetown       Start of new local airline delayed over name-company deregistered by commercial registry Millions in losses loom for a new local airline as the start of operations … Continue reading

Jet Airways seeking $400 million from global equity firms to stay alive while Turkish Airlines had a good year, but the collapse of the Turkish Lira versus the $US, will create major problems this year for Turkish, 2 big airlines now in trouble for different reasons, and add to that Air India which has 23% of its 118 aircraft, grounded at any given time due to a lack of spare parts, yes $US 3.6 billion in assets parked waiting!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       Airline Economics  August 13, 2018         Jet Airways is reported to have begun a formal stake-sale process to raise $350-400 million from global private equity firms.     Local media sources suggest that Blackstone, TPG, Cerberus Capital Management and Indigo … Continue reading

The sad Rise and Fall of Curacao based InselAir took another “dubious” twist 2 weeks ago, in line with the ‘disappeared’ $US 97 million in Venezuela “mystery” that brought the airline down in the first place. The the Curacao Government and 51% owner (after a $US18.3 million loan) of what is left of the airline (1 operational Fokker F50), selected One Laser Group LLC of Miami, to be Insel Air’s 49% strategic partner. The Government claims that ‘InselAir is Bankrupt Without One Laser Group’. The Group is to invest $US 11.1 million into InselAir’s revival, yet the problem is, that there is NO information on the company, executives, history, business dealings, press releases, not even a web page, just a Florida based LLC (limited liability company), basically a “shell company with 1 key person. The company claims it is a “conglomerate of companies that invest in various sectors like air freight, logistics in food & pharmaceuticals and oil supply”? whatever! What the hell is Curacao thinking? I am sorry, but I believe this is just another BS airline scam in the works, like the recent BVI Airways, PAWA Dominicana, Baltia Air Lines/USGlobal Airways and others I have covered and exposed. With 4 CEO’s since January, 2017 it says novels about the ‘fiasco’ within InselAir today.

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/               Tomas’s Comment:   This industry is never dull, always something and sadly too often I find some funny business going on, as this industry due to its high asset value seems to attract a lot dubious entrepreneurs, executives and … Continue reading

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

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

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

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

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

SUMMARY: Nigeria has cleared its IATA backlog of $US 600m owed to airlines from ‘blocked’ ticket sale repatriations, which is a deplorable act against global airlines that serve those states. There is no legal reason for any government to seize such funds from airlines. At the end of 2017 $4.9b was being illegally kept by various governments from IATA airlines. Now 16 countries are still blocking IATA airlines ticket sales repatriations still. The worst culprit is technically bankrupt Venezuela, which is headed for total collapse soon at $3.78b, followed by Angola still owing $386m (from a high of $500m), Sudan at $170m, Bangladesh at at $95m, Zimbabwe at $76m, plus 11 more states owing around $170m. This practice must stop, IATA needs to take action to help airlines repatriate those funds, and I say its time to seize the aircraft of those states national carriers when they land at a jurisdiction that allows the seizure of the aircraft, until the IATA accounts payable are straightened out, that means seizing aircraft of Conviasa (Venezuela), TAAG Angola, Sudan Airways, Biman Bangladesh, Air Zimbabwe and Zimbabwean Airways (ZANU-PF government corruption scam has 2 national carriers right now in Zimbabwe) and any other state owned airline aircraft, where the government has illegally been blocking IATA airline repatriation of funds, simple as that! and watch the governments pay up fast!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Nigeria clears foreign airlines’ $600m trapped funds Published June 6, 2018 – Maureen Ihua-Maduenyi – Punchng.com       Tomas’s Comment:   When governments start to hold IATA airline ticket sales repatriation, it is theft in my book, and for too long IATA and its 290 … Continue reading

Start-up Vietnamese airline, Bamboo Airways, has committed to purchasing 20 787-9 Dreamliners and 24 x Airbus A321neo’s back in March. The airline will be up against state owned and soon to be 49% privatized Vietnam Airlines with 83 aircraft and 28 on order, LCC VietJet Air with 55 aircraft and 179 on order and lastly Jetstar Pacific with 19 aircraft, if all airlines take their orders, Vietnam should have 4 airlines operating a total of 408 commercial jet airliners by +/- 2024, that is going to be a highly competitive market for sure.

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Airline Economics Online- June 27, 2018       Tomas’s Comment:   Bamboo Airways, is a startup airline by a Vietnamese construction company, FLC Group. It will start in late 2019? and will serve destinations where FLC Group has heavily invested in tourism infrastructure, as well as other secondary domestic routes.   … Continue reading

SUMMARY: The 2nd last multi-national owned airline left in the world, SAS Scandinavian Airlines, the state carrier of Sweden, Norway and Denmark since 1951, is about to lose Norway as its shareholder, as it is selling the last of its 9.88% of the airline (down from the original 14.3%). Multi government airlines don’t work, from Air Afrique, Gulf Air, MSA, East African Airways to LIAT, they served their purpose but now its time for owners to go their own way, state owned airlines are hard to run imagine 11? it is time for that business model to be put to rest.

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   June 26, 2018 – Airwise Norway has announced it will sell its remaining shares in flag carrier SAS Scandinavian Airlines.   The Norwegian Ministry of Trade and Industry on Tuesday launched the sale of its remaining 37.8 million shares, representing 9.88 percent of the airline.   Norway originally held a 14.3 percent … Continue reading

SUMMARY: The Etihad Airways “Equity Alliance Strategy” was a disaster just like the 1990’s Swissair “Hunter Strategy” which bankrupted Swissair in 2001, now Etihad has to dig itself out of a mess and right size its business, which means less aircraft, which is bad news for Boeing’s B777X order book, but with just 25 orders out of a total of 326 its a small hit, the big hit will be on Etihad which now has to be thinking of joining Emirates and flyDubai under one Group ownership, that will take some soul searching and loss of pride in Abu Dhabi, but it makes sense for the future of Etihad.

SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Etihad B777-300ER     $6 Billion Order Loss For Boeing? Jun.18.2018 – Seeking Alpha -Dhierin Bechai         Tomas’s Comment: Etihad Airways has 8 x $394.8 million B777-8’s on order and 17 x $425.8m B777-9’s on order since November, 2013 when life was good for Etihad Airways, and ordering 25 … 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

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

SUMMARY: The Chinese COMAC C919 airliner made its first flight today (May 5, 2017), and hopefully it will not be long before it is delivered to its first customer, China Eastern. The Comac ARJ-21-700 regional jet (evolved from the locally built MD-82’s and MD-90-30’s programs) took an incredibly long 2,769 days (93.3 months or 7.6 years) from its first flight to delivery to its first customer. This C919, is NO ARJ-21, this is an aircraft China can be proud of and one that can and will compete with Airbus, Boeing, Irkut and Bombardier when it gets its EASA Type Certificate which will take time, as the shadow certification of the ARJ-21 with the FAA did not materialize. Yes, there will be many issues with very poor sales & marketing, product support and after sales service, something Comac has no experience with and AVIC is horrible at. The ARJ-21 has no FAA certification and most likely never will, and will be relegated to flying for Chinese airlines and the very few “dubious” nations that do not require EASA or FAA certification for local registration and operations. The C919 has 99 orders, 227 options and 566 “commitments” so well over its stated break-even of 400 units. A proud day indeed, given the fiasco with the ARJ-21, now Comac will work with EASA to shadow certify the C919, but that will take a few years for sure, so no immediate concerns for the other 4 competing OEM’s. Lastly, this C919 is not the first Chinese indigenous jet airliner, back in 1970 the Chinese then under Chairman Mao Zedung, developed the Shanghai Y-10, a close similarity to the Boeing B720/B707, but it started way before President Richard Nixon’s famous trip to China in 1972 with Air Force One, a C-137 Stratoliner, a modified long range Boeing B707, referred to as SAM26000 (special air mission), in service from 1962 to 1999.

With the Comac C919 making its first flight, China finally has a commercial aircraft it can be proud off, and this aircraft will be able to compete with the Airbus A320neo, Bombardier’s CS300, Irkut MC-21, Boeing B737-7 and, B737-8 in time as it will require years to get its EASA certification, but Chinese airlines who … Continue reading

UPDATE: Bombardier stock (TSE:BBD.B) has been at $1.00 all day today, and late this afternoon it went south of that “psychological” barrier and became a “penny” stock, as it closed at a 25 year low of $0.99 on the Toronto Stock Exchange. Investors are dumping their shares for good reasons. No new CSeries order since September, 2014, lost United deal to Boeing, 3 of the 4 first CSeries orders from 2009-2011 are NOT happening (Lease Corp. International, Odyssey, Republic add up to 53 ‘firm’ orders and 57 options) and the 4th is Gulf Air (2011 order for 10 x CS100’s and 6 options) that last week ordered 19 x A320/321 with 10 x A320 already on order, and their CEO Maher Salman Al Musallam comments on the CSeries are not optimistic “I don’t know, as a small airline, whether we are able to operate a third type or not”, “whether it’s going to be viable for Gulf Air to continue to renegotiate a delivery date with Bombardier or something else”, also today, the CEO of Gulf Air offered his resignation, no reason given. Meanwhile, Bombardier eyes Iran, but Iran will order 127 Airbus airliners this week, meanwhile Delta Air Lines order that Bombardier wants so badly, will not be any time soon and then will require a very good price, that will have to compete with Embraer, Boeing and maybe Airbus. Bombardier wants Federal government to buy 50% of CSeries, yet Quebec’s Mayors block East pipeline that western Canada desperately needs for its oil. If Bombardier gets money from the Feds, western Canada will NOT be happy with Ottawa. I say NO to any funding until current special voting shares by which 60% control is still in the hands of the 2 families, eliminated and then some sizable injection of capital by the 2 families that today control Bombardier and who orchestrated the current fiasco, otherwise I say NO to Federal money for Bombardier, too many other needs in Canada. Lastly, Bombardier needs to just stop talking about all the deals they are working on, it is bad PR when they lose and it is un-professional, when you sold something then brag about it but don’t brag about being in this or that campaign, because the sad reality is they will lose +85% of the campaigns when competing with the duopoly of Airbus and Boeing, it is just sad they are so “desperate” for any good news.

This is the event few would have expected at Bombardier a few years ago, but today the Bombardier shares (TSE:BBD.B) went to $0.99 a share, the lowest in +25 years (since 1991), and it is a “penny” stock today, this is how bad the company is now perceive don the market, a total mess from … Continue reading

UPDATE: The national airline of Slovenia, Adria Airways has been sold for a mere $US 1.2 million, the buyer is an unknown German/Luxembourg company, 4K Invest that has a nice web page but absolutely no information about the company, it’s executives or past deals. It’s one of many recent “funny” deals going on in Europe’s airline industry. We had a Sukhoi “agent” invest into airBaltic looking to sell SSJ-100 regional jets, we have Ireland’s City Jet buying up to 25 x SSJ-100’s the first in Western Europe and very risky for any airline these days, and yet as quickly as the ink was dry on the Sukhoi deal, the owner of City Jet, Germany based Intro Aviation (aka “turnaround specialist”) is negotiating to sell the airline and bail out before any SSJ-100 operations begins ? does that seem odd ? To go through all the “trouble” of putting in a new Russian airliner that no one has bought in Western Europe. They praise the SSJ “game changer” as if they found the holy grail, and then sell the airline once a SSJ deal is done ? It shows that they do NOT have confidence in the long term success of the SSJ’s and City Jet. Who is the new buyer ? well apparently they are new to the airline business but not aviation. I wonder if they realize what they are getting into ? or is it the Russians coming through the back door ? it is all possible these days. Intro Aviation once was known for turning around troubled airlines, now it has lost it’s touch as on top of City Jet’s loses it could not turn around it’s own InterSky (Austria) DHC8/ATR-72 operation either, and tried to sell it in September, but no takers, so it shut it down in November due to a debt of EUR 5.0 million ?, while it also sold money losing VLM Airline in 2014 in a MBO (management buy out) and surprise and behold, it wanted to buy/lease 12 x SSJ0100’s right away (makes one wonder who funded the MBO ?) , seems SSJ’s orders follow the company. Intro Aviation was also one of the 3 German companies in the running to buy Adria Airways, which is a perfect target for SSJ-100 sales as it operates 7 x CRJ700/900’s today, and surely had it won, SSJ’s would be flying in Adria Airways livery in 2016, and maybe still will given that so little was paid and so little is known about K4 Invest. Russia’s President recently declared NATO as major security threat, and therefore Western European airlines should NOT be buying Russian airliners or leasing them, as they are built by the Russian military complex, Sukhoi is a big Russian arms manufacturer and is currently on the EU/US economic sanctions list, time to put the SS-100 SuperJet on that list as well. We cannot support the Russian arms industry and Europeans should not buying, leasing or flying on Russian airliners (basically that was the Latvian Government’s addition to airBaltic’s shareholders agreement in November, to stop a “undesirable” new investor form making a SSJ-100 deal going forward).When Putin thinks we are the enemy and talks of the possibility of using tactical nuclear weapons in a limited engagement we have no choice but to say NYET to Russian aircraft. “Beware of false prophets, who come to you in the sheep’s clothing, but inwardly are ravenous wolves” (Matthew 7:15), as the Russians are doing everything and anything possible to sell the poor selling SSJ100 (40+/- current sitting “white tails”) to the West, if it fails, then the Irkut MC-21 will fail as well, and for Airbus, Boeing, Comac and Bombardier and the West, that is a good thing.

The Slovenian Government approved a capital injection plan of $US 3.3 million for national flag carrier, Adria Airways and simultaneously sold the airline to German investment group, 4K Invest (www.4k.ag), which is to inject only $1.1 million for the 91.58% owned by the government and pay Adria Airways another $US 100,000 ? The Slovenian Government … Continue reading

SUMMARY: The good airline news out of Europe is that TAP Portugal is finally 61% privatized and in good hands for the future while the Irish Government gives the go ahead for IAG’s buyout of Aer Lingus. The bad news is that Lithuania’s small national airline, Air Lituanica becomes the 5th European airline this year to shutdown (27 in 2014), while Croatian Airlines and Adria Airways nervously wait for their privatization as it is “swim or sink” time for them and others like LOT, TAROM, Estonian Air, Czech Airlines, AirBaltic, etc. as they have all taken or will take their last “one time” EU allowed state aid packages, and from now on for most, if they run out of money, they have NO choice but to file for bankruptcy. The low cost carriers (LCC) in Europe continue to grow at a fast pace and challenge the existence of national carriers as incumbents cannot muster any significant competitive response against the LCC onslaught in Europe. Meanwhile, fully government owned AirBaltic of Latvia becomes the launch customer for Bombardier’s CS300 (20 on order, 13 + 7 options), the $US 1.44 billion aircraft cost and launch customer designation is not realistic from an airline based in Latvia that lost $US 220 million since 2010, bailed out by the Government in 2011 and has made only $US 11 million in net profit in the past 2 years on revenues of $US 688 million (a slim 1.6% net profit margin), it is a barely a financially viable carrier without the new and expensive CS300’s. The airline has 24 aircraft today (B737-300/500, Q400’s) making it the 36th largest airline in Europe (following ‘big’ names like Onur Air and Norwind Airlines ?) is this a joke ? Bombardier has NO “better” customer for the launch of the CS300 ? the quality of its current customer order book is sad indeed after Lufthansa and Korean. It reminds me of the Sukhoi SSJ-100 tragic launch customer Armavia (of Armenia), which was an absolute PR and marketing disaster, as it accepted the 1st aircraft, could not finance the 2nd aircraft, and then went bust. Anyway, the plight of the small/medium government owned and private airlines in Europe continues, what is their future ? or is there one ? Air Serbia pulls off an incredible corporate turnaround in 1 year under its “white knight” equity partnership with Etihad Airways, but other airlines may not be so lucky, time to look at new business models for survival before the wave of European bankruptcies begins as surely 50 European countries cannot all have a national airline !

The European airline industry is tough, unstable and very dynamic, the latest casualty is little known Air Lituanica of Lithuania, which is the 5th European airline victim in 2015 (not counting Russia), following Cyprus Airways, EuroLot (Poland), Tend Air (Romania) and Wizz Air Ukraine into the history books. The European airline industry is in trouble … Continue reading