United Airlines Raises $1.32B to Boost Fleet, Airbus Ups 20-year Delivery Forecast, and More
Aviation news brief June 14
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United Airlines Raises $1.32B to Boost Fleet
United Airlines raised $1.32 billion in secured notes to finance 39 new Boeing aircraft, marking a return to traditional aircraft financing methods after the pandemic disruption.
This debt issuance reflects a positive shift for airlines and investors, given the global demand for thousands of new planes over the coming years. The airline industry is preparing for a potentially historic summer, with nearly 1% increase in passenger numbers over 2019 predicted.
The increased costs of borrowing, due to a rise in federal funds rate and yield on 10-year U.S. Treasury bonds, didn't deter United's plans for fleet expansion. source
US Travel Association Warns of Upcoming Challenges for Aviation Sector
The US aviation sector is set to face a challenging summer with anticipated record-breaking travel demand, according to the US Travel Association. Major issues include a shortage of air traffic controllers, outdated technology, and pilot scarcity, all exacerbated by uncertain weather conditions.
Concerns also exist about the sector's financial and operational ability to handle the expected passenger volume, given its history of breakdowns.
Plans to increase staffing levels and modernize technology are underway but may not provide immediate relief. Potential solutions include robust investment in the aviation infrastructure and better coordination between airlines and the FAA. source
Airbus Ups 20-year Delivery Forecast with Focus on Replacements
Airbus has increased its 20-year forecast for airplane deliveries from 39,490 to 40,850, with the emphasis shifting toward replacing older aircraft rather than fleet expansion.
The projection now includes 39,930 passenger and 920 freighter planes, a majority of which are expected to be single-aisle jets. Airbus also revised its estimate of older planes to be replaced in the next two decades to 17,170, up from 15,440.
The company anticipates the global fleet to more than double from pre-COVID levels by 2042, despite a potential slowdown in growth and increase in retirements. source
Archer Aviation Hires Former FAA Boss to Advance eVTOL Certification
Archer Aviation, an eVTOL (electric vertical take-off and landing) aircraft developer, has hired Billy Nolen, former acting administrator of the Federal Aviation Administration (FAA), as its Chief Safety Officer.
The move is aimed at advancing Archer's progress toward certification and commercialization of its eVTOL aircraft, Midnight. During his tenure at the FAA, Nolen led efforts to safely integrate eVTOL aircraft into national airspace.
He brings over three decades of experience in aviation safety and operations, bolstering Archer's plans for commercialization in 2025. source
Saudi Arabia's Riyadh Air to Rival Luxury Offerings of Emirates, Qatar Airways
Riyadh Air, a Saudi airline set to launch in 2025, aims to rival Emirates and Qatar Airways by embracing luxury. Historically, Saudi Arabia's flag carrier, Saudia, has focused on serving religious passengers journeying to Mecca, adhering to strict social norms, which contrasts with the luxury offerings of other regional carriers.
Unlike Saudia, Emirates, Qatar Airways, and Turkish Airlines have transformed air travel with amenities such as in-flight showers, butlers, and bars, turning their hubs into destinations for global travelers. source
Safran CEO Warns of Ongoing Aerospace Supply Crisis
Safran's CEO, Olivier Andriès, has warned of a persistent "unprecedented crisis of supply" in the aerospace industry, resulting from the resurgence in demand and supply chain issues from the Covid-19 pandemic and the Russia-Ukraine conflict.
The crisis is expected to continue into 2024, limiting the speed of increased production. Despite these hurdles, Safran anticipates a sales growth of about 20% this year. The company is looking into major acquisitions and further share buybacks, with ongoing discussions to buy the flight controls unit of Raytheon Technologies for an estimated $1bn. source
Multi-Regional Trajectory-Based Operations Takes Flight in a Global Test
A Boeing 787 has successfully completed a test flight demonstrating a new air traffic management system called trajectory-based operations, which could optimize flight routes across multiple regions.
The concept, jointly developed by aviation authorities from Singapore, Japan, Thailand, and the US, allows a more direct and quicker path across different airspaces, potentially reducing fuel burn by up to 10%, cutting travel time and cost.
Current international flight operations are managed independently by each country's air traffic authority, but this new system aims to coordinate flight paths across regions. source
flynas Set to Announce Major Airbus Deal at Paris Air Show
Saudi Arabian budget airline flynas is reportedly close to finalizing a deal with Airbus to increase its fleet. The order, potentially to be announced at the upcoming Paris Air Show, is part of flynas's strategy to compete more effectively within the region.
Currently, flynas operates 58 aircraft, with an existing order for 41 A320neo and 10 A321neo planes. The airline, which transported 2.4 million passengers in Q1 2023, plans to expand its international network with 10 new routes in Asia and Europe this summer. source
Duluth's Cirrus Aircraft Taps Hong Kong Market for IPO
Duluth-based Cirrus Aircraft has submitted paperwork to the Hong Kong Stock Exchange for a potential initial public offering (IPO), aiming to secure approximately $300 million in capital for expansion.
The move follows the company's acquisition by China Aviation Industry General Aircraft (CAIGA) in 2011. With CAIGA's backing, Cirrus has grown significantly, reaching $765 million in billings from the sale of 629 aircraft last year.
The company says that the IPO proceeds will facilitate further investment in people, product development, production capabilities, global service capabilities, and IT and business infrastructure. source
SITA and UrbanV Partner to Digitize Passenger Experience at Rome Vertiports
Air transport IT provider SITA and Italian vertiport operator UrbanV have signed a memorandum of understanding to develop a digital-first passenger experience for vertiports in Rome, set to commence operations in 2024.
The partnership aims to design, test, and improve a new passenger processing and operating ecosystem to support the first flight between Fiumicino and Rome's city center.
SITA and UrbanV will also explore potential commercial synergies worldwide to foster a joint go-to-market strategy in the Advanced and Urban Air Mobility segment. source
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