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AviationRegister E-Xpert Witness Journal
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Global developments presenting risks and rewards for the aircraft trading and financing market
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Headline News was last updated: December 19, 2009
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B787 graphic pinpointing the wrinkle problem: Click on Aircraft link to view.
May 2009/June 2009
Airlines are cutting new and used capacity as demand for air travel continues a decline which began in September 2008.
Revenues generated by U.S. airlines fell 16% in April vs. April 2008 - the 6th straight monthly decline, according to ATA.
Airbus, Boeing and Embraer have all announced aircraft production cutbacks.
•A320 Down from 36 to 34 aircraft per month.
A320 Down from 36 to 34 aircraft per month.•B777 down from 7 to 5 aircraft per month.
B777 down from 7 to 5 aircraft per month.•Qantas is to defer 4 of 7 A380’s due for delivery in 2009 and 2010.
Qantas is to defer 4 of 7 A380’s due for delivery in 2009 and 2010.•Emirates shifts delivery of A380’s from 2009 to 2010.
Emirates shifts delivery of A380’s from 2009 to 2010.Boeing net order book to end-May 2009 is zero!
The change in gross orders was:
•B737:42 ordered, 1 cancelled.
B737:42 ordered, 1 cancelled.•B747:1 cancelled.
B747:1 cancelled.•B767:5 cancelled.
B767:5 cancelled.•B777:10 ordered, 1 cancelled.
B777:10 ordered, 1 cancelled.•B787:13 ordered, 57 cancelled.
B787:13 ordered, 57 cancelled.Total:65 ordered, 65 cancelled for a total net order position of zero.41 B737s and 9 B777s were ordered against the cancellation of 1 B747, 5 B767s, and 44 B787s.
B787 delays possible due to weight issues and shorter range as reported by AllianceBernstein’ Bernstein Research unit.
•(The U.S. Department of the Treasury selected AllianceBernstein as one of three
(The U.S. Department of the Treasury selected AllianceBernstein as one of three firms to manage its TARP portfolio).•Bernstein has issued six B787 production and forecast reports so far.
Bernstein has issued six B787 production and forecast reports so far.•Bernstein relied on feedback from B787 customers and suppliers.
Bernstein relied on feedback from B787 customers and suppliers.•Boeing provided a B787 certification briefing on April 29.
Boeing provided a B787 certification briefing on April 29.•B787 customers face delivery delays of up to six more months according to
B787 customers face delivery delays of up to six more months according to Bernstein.•Production B787s may be 8% overweight, with 10%-15% less range than promised for early deliveries.
Production B787s may be 8% overweight, with 10%-15% less range than promised for early deliveries.•That translates into a range near 6,900 nm vs. the promised 7,700-8,200 nm range.
That translates into a range near 6,900 nm vs. the promised 7,700-8,200 nm range.•Bernstein cast doubt on the B787 certification time line as it may be difficult to
Bernstein cast doubt on the B787 certification time line as it may be difficult to get all six test aircraft ready for testing as planned. •Bernstein says production will not hit the target rate of 10 aircraft per month until
Bernstein says production will not hit the target rate of 10 aircraft per month until mid-2013. •Boeing may miss the first delivery in Qtr1 2010 to All Nippon Airways.
Boeing may miss the first delivery in Qtr1 2010 to All Nippon Airways.•Boeing reiterated its plan to fly the B787 by June 30th.
Boeing reiterated its plan to fly the B787 by June 30th.Airbus is to miss targets for gross aircraft orders.
•Airbus sold 30 aircraft in the first four months of 2009.
Airbus sold 30 aircraft in the first four months of 2009.•Airbus is relying on its record backlog of 3,600 aircraft to maintain production and minimize price discounting.
Airbus is relying on its record backlog of 3,600 aircraft to maintain production and minimize price discounting. •Emirates and Qatar Airways re reportedly being offered heavy discounts to keep order positions in place.
Emirates and Qatar Airways re reportedly being offered heavy discounts to keep order positions in place. •Airbus points several factors for the fall off in aircraft orders:
Airbus points several factors for the fall off in aircraft orders:-The current economic crisis;-The aviation downturn; and-Customer requests for aircraft delivery deferrals.A380 production and sales targets changes as market conditions change.
•A380 production is two years behind schedule due to cost overruns and financing issues.
A380 production is two years behind schedule due to cost overruns and financing issues.•Development cost of the A380 has risen from $12Bn to $18Bn.
Development cost of the A380 has risen from $12Bn to $18Bn. •The A380 list price is $327M although prices have been quoted as low as $220M.
The A380 list price is $327M although prices have been quoted as low as $220M.•The market for large widebodies such as the A380 is estimated at 1,200 aircraft over 20 years.
The market for large widebodies such as the A380 is estimated at 1,200 aircraft over 20 years.•Break-even production for the A380 started at 270 aircraft.
Break-even production for the A380 started at 270 aircraft.•It was raised to 260 aircraft in 2006.
It was raised to 260 aircraft in 2006.•Airbus is not providing a break-even estimate as of 2009.
Airbus is not providing a break-even estimate as of 2009.EADS profits slump by 40% in Q1 due to delays in A380 deliveries.
Airbus is to cuts A380 deliveries as Air France and Kingfisher Airlines defer orders.
•2007 delivery target was 1 A380 delivery.
2007 delivery target was 1 A380 delivery.•2008 delivered 12 A380s in 2008, the first full year of production.
2008 delivered 12 A380s in 2008, the first full year of production.•2009 delivery target reduced from 18 to 14 deliveries. The previously revised target was 21 deliveries.
2009 delivery target reduced from 18 to 14 deliveries. The previously revised target was 21 deliveries.•2010 delivery target reduced to 20 from previous targets of 30 to 40.
2010 delivery target reduced to 20 from previous targets of 30 to 40.A350 XWB design is finalized by Airbus ahead of the Paris Air Show in June.
•Airbus is to start detailed production design for the A350 XWB (Extra Wide Body).
Airbus is to start detailed production design for the A350 XWB (Extra Wide Body). •The aircraft incorporates the significant use of composites materials (plastics).
The aircraft incorporates the significant use of composites materials (plastics).•A350 production tooling, aircraft systems and the passenger cabin are in course of development.
A350 production tooling, aircraft systems and the passenger cabin are in course of development.• The A350 is a development of the A330 which in turn is a development of the A300 and A310.
The A350 is a development of the A330 which in turn is a development of the A300 and A310. •The A350 competes directly with the B787 and indirectly with the B767 and B777.
The A350 competes directly with the B787 and indirectly with the B767 and B777.•The A350 fuselage will be wider than that of the B787 which Airbus sees as a selling point.
The A350 fuselage will be wider than that of the B787 which Airbus sees as a selling point.Airbus parent EADS to take a charge on the A300M.
•Parent EADS took $2.3Bn in charges on the A400M military transport aircraft.
Parent EADS took $2.3Bn in charges on the A400M military transport aircraft.•EADS shares have been hit by the news.
EADS shares have been hit by the news. ATR winds its first orders in 2009.
•Royal Air Maroc ordered four ATR42s and two ATR42s.
Royal Air Maroc ordered four ATR42s and two ATR42s. ATR launches its Door-2-Door maintenance plan.
•ATR takes responsibility for the entire maintenance supply chain management process for ATR42s and ATR72s operated by customers who sign up
ATR takes responsibility for the entire maintenance supply chain management process for ATR42s and ATR72s operated by customers who sign up for the plan.•Czech Airlines signed a seven-year maintenance agreement valued at $14M covering the repair of LRUs on 12 ATR aircraft.
Czech Airlines signed a seven-year maintenance agreement valued at $14M covering the repair of LRUs on 12 ATR aircraft. Porter Airlines of Canadian (Deluce family) may order more Q400s.
•Could place launch order for the proposed Q400 X (90-seats).
Could place launch order for the proposed Q400 X (90-seats). Bombardier Aerospace’s reported $10Bn in revenues for the year ended January 31, 2009.
•Order backlog was $23.5Bn as at January, 2009.
Order backlog was $23.5Bn as at January, 2009. •For the fiscal year 2009, Bombardier received 367 net orders and delivered 349 aircraft.
For the fiscal year 2009, Bombardier received 367 net orders and delivered 349 aircraft.•Bombardier commercial aircraft lead the industry in the 20- to 149-seat category, with a 30 per cent cumulative net order market share for aircraft
Bombardier commercial aircraft lead the industry in the 20- to 149-seat category, with a 30 per cent cumulative net order market share for aircraft currently in production. •Delivered more than 1,525 CRJ Series regional jets
Delivered more than 1,525 CRJ Series regional jets•The Bombardier CRJ regional jet Series is the most successful regional aircraft program in history.
The Bombardier CRJ regional jet Series is the most successful regional aircraft program in history.•Headquartered in Montréal, Canada, employs more than 28,000 people worldwide.
Headquartered in Montréal, Canada, employs more than 28,000 people worldwide.Bombardier CS100/300 orders mark the entry of the regional aircraft manufacturer into the mid-sized aircraft segment.
•Lufthansa ordered 30 110-seat CS100s.
Lufthansa ordered 30 110-seat CS100s.•Lease Corporation International ordered 17 130-seat CS300s and four CS100s.
Lease Corporation International ordered 17 130-seat CS300s and four CS100s. Dash8 production comes to an end.
•Bombardier is manufacturing the last two Q300s, serial numbers 671 and 672.
Bombardier is manufacturing the last two Q300s, serial numbers 671 and 672.•This marks the end of Dash8-100/200/300 production otherwise known as the Q100/Q200/Q300.
This marks the end of Dash8-100/200/300 production otherwise known as the Q100/Q200/Q300. •Air New Zealand and the military will acquire these aircraft.
Air New Zealand and the military will acquire these aircraft. Helicopter replacement program for 28 aircraft was cancelled at President Obama’s request.
•Lockheed Martin won the order valued at $6.8Bn but it has since grown to $13.2Bn.
Lockheed Martin won the order valued at $6.8Bn but it has since grown to $13.2Bn.•More than $3.2Bn has been spent on the project to date.
More than $3.2Bn has been spent on the project to date.•The helicopters were due into service in 2011.
The helicopters were due into service in 2011.•Design in-service life is 5 to 10 years.
Design in-service life is 5 to 10 years.•Range is 200 miles without refueling.
Range is 200 miles without refueling. GA manufacturers Cessna, Embraer and Gulfstream are growing in optimism amid signs of improved deposits and loosening credit markets.
Raytheon and a team of five other companies will develop NextGen airspace management architecture for the National Airspace System from 2018 to 2025.
Piper Aircraft was sold to hedge fund Imprimis.
American Capital sold Piper Aircraft to Imprimis an investment fund based in Bangkok.
•The new owner is committed to production of the PiperJet.
The new owner is committed to production of the PiperJet. •American Capital purchased Piper in June 2003 for $34M.
American Capital purchased Piper in June 2003 for $34M. •Piper will seek long-term growth in the Asia market.
Piper will seek long-term growth in the Asia market.Air Canada management threatens second bankruptcy in six years.
•Reported a Q1 loss of US$344M.
Reported a Q1 loss of US$344M. •Reported a $566M in Q4 of 2008.
Reported a $566M in Q4 of 2008.•Reduced capacity by 3.5% to save $80M, negotiated concessions from suppliers and labor cuts to save $35M in cost for 2009. Management is
Reduced capacity by 3.5% to save $80M, negotiated concessions from suppliers and labor cuts to save $35M in cost for 2009. Management is renegotiating pension’s obligations.•Management wants to avoid a bankruptcy filing but the recession is proving more prolonged than expected.
Management wants to avoid a bankruptcy filing but the recession is proving more prolonged than expected.•The carrier is hoping to raise cash through the sale and lease back of “dozens of planes” it now owns.
The carrier is hoping to raise cash through the sale and lease back of “dozens of planes” it now owns.•Unions rejected a request for a one-year moratorium and less restrictive work practices.
Unions rejected a request for a one-year moratorium and less restrictive work practices. Air Canada management threatens second bankruptcy in six years.
•Reported a Q1 loss of US$344M.
Reported a Q1 loss of US$344M. •Reported a $566M in Q4 of 2008.
Reported a $566M in Q4 of 2008.•Reduced capacity by 3.5% to save $80M.
Reduced capacity by 3.5% to save $80M.•Negotiated concessions from suppliers and labor cuts to save $35M in cost for 2009.
Negotiated concessions from suppliers and labor cuts to save $35M in cost for 2009. •Management is renegotiating pension’s obligations.
Management is renegotiating pension’s obligations.•Management wants to avoid a bankruptcy filing but the recession is proving more prolonged than expected.
Management wants to avoid a bankruptcy filing but the recession is proving more prolonged than expected.•The carrier is hoping to raise cash through the sale and lease back of “dozens of planes” it now owns.
The carrier is hoping to raise cash through the sale and lease back of “dozens of planes” it now owns.•Unions rejected a request for a one-year moratorium and less restrictive work practices.
Unions rejected a request for a one-year moratorium and less restrictive work practices. Air Canada's Q1 2009 accomplishments.
•Introduced one B777-300ER in Q1.
Introduced one B777-300ER in Q1.•Air Canada has taken delivery of 17 B777s to date.
Air Canada has taken delivery of 17 B777s to date.•The 18th and final B777 is due for delivery in Q3 of 2009.
The 18th and final B777 is due for delivery in Q3 of 2009.•Air Canada is the first North American carrier to operate the B777-300.
Air Canada is the first North American carrier to operate the B777-300.•Refurbishment all of its planned operating aircraft except for one A330 and 3 B767-300ERs.
Refurbishment all of its planned operating aircraft except for one A330 and 3 B767-300ERs.•Achieved on-time arrivals performance of 72.6% in Q1.
Achieved on-time arrivals performance of 72.6% in Q1.•Received tentative approval from the U.S. DOT to form a transatlantic joint venture with Continental Airlines, United Airlines and Lufthansa.
Received tentative approval from the U.S. DOT to form a transatlantic joint venture with Continental Airlines, United Airlines and Lufthansa.•Continental Airlines has also received tentative approval to join the anti-trust immunized alliance of Air Canada and eight other Star Alliance
Continental Airlines has also received tentative approval to join the anti-trust immunized alliance of Air Canada and eight other Star Alliance carriers.•Web penetration for domestic Canada sales in Q1 of 2009 was 68 %- an increase of 3% over Q1 2008.
Web penetration for domestic Canada sales in Q1 of 2009 was 68 %- an increase of 3% over Q1 2008. •Paid out $6M in Q1 of 2009 to employees under the company's monthly incentive program.
Paid out $6M in Q1 of 2009 to employees under the company's monthly incentive program.•Contributed $112M to funding its employees' defined benefit pension plans.
Contributed $112M to funding its employees' defined benefit pension plans.Air Canada's Non-GAAP Measures
•Air Canada uses adjusted earnings (loss) per share to assess share performance without the effects of foreign exchange gains (losses).
Air Canada uses adjusted earnings (loss) per share to assess share performance without the effects of foreign exchange gains (losses). •This measure is not a recognized measure for financial statement presentation under Canadian GAAP.
This measure is not a recognized measure for financial statement presentation under Canadian GAAP.•EBITDAR is a non-GAAP financial measure commonly used in the airline industry to assess earnings before interest, taxes, depreciation,
EBITDAR is a non-GAAP financial measure commonly used in the airline industry to assess earnings before interest, taxes, depreciation, amortization and aircraft rent. •EBITDAR is used to view operating results before aircraft rent, depreciation and amortization.
EBITDAR is used to view operating results before aircraft rent, depreciation and amortization.•These costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets.
These costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. •Adjusted earnings per share and EBITDAR do not have standardized meanings and are unlikely to be comparable to similar measures presented by
Adjusted earnings per share and EBITDAR do not have standardized meanings and are unlikely to be comparable to similar measures presented by other public companies.Air Canada & GECAS sale and leaseback Arrangement.
Air Canada completed the sale and leaseback of one B777-300ER with GE Commercial Aviation Services (GECAS), a GECC subsidiary in March 2009:
•12 year lease back period.
12 year lease back period.•Transaction provided Air Canada with US$38M of funding.
Transaction provided Air Canada with US$38M of funding.•This completed the full funding under all the agreements with GECC, providing Air Canada with total financing of US$193M.
This completed the full funding under all the agreements with GECC, providing Air Canada with total financing of US$193M.•The two previous secured financings with GECC were for US$80M completed December 2008 and US$75M completed January 2009.
The two previous secured financings with GECC were for US$80M completed December 2008 and US$75M completed January 2009.•Seabury Group LLC acted as financial advisor with respect to the GECC transaction as part of a broader mandate to assist in securing long-term
Seabury Group LLC acted as financial advisor with respect to the GECC transaction as part of a broader mandate to assist in securing long-term capital funds for general working capital purposes.JetAmerica a new Florida based low-cost carrier is using Wall-Mart’s business model.
•Sun America, Inc., d/b/a JetAmerica, is a scheduled public charter carrier based in Clearwater Florida founded March 10, 2009.
Sun America, Inc., d/b/a JetAmerica, is a scheduled public charter carrier based in Clearwater Florida founded March 10, 2009.•JetAmerica is the former Air Azul, which rebrand itself in early May 2009.
JetAmerica is the former Air Azul, which rebrand itself in early May 2009.•JetAmerica is not related to the Jet America Airlines that operated MD80s from a Long Beach base during the 1980s and that was acquired by Alaska
JetAmerica is not related to the Jet America Airlines that operated MD80s from a Long Beach base during the 1980s and that was acquired by Alaska Airlines.•JetAmerica aircraft and crews are being provided on a wet-lease basis by Miami Air.
JetAmerica aircraft and crews are being provided on a wet-lease basis by Miami Air.•John Weikle is CEO of JetAmerica.
John Weikle is CEO of JetAmerica.•Weikle also worked for Airborne Express and US Airways Express.
Weikle also worked for Airborne Express and US Airways Express.•He founded bankrupt Columbus, Ohio-based Skybus in 2008.
He founded bankrupt Columbus, Ohio-based Skybus in 2008.•Skybus lost $56M on revenues of $80M in nine months and ordered 65 new A319s from Airbus.
Skybus lost $56M on revenues of $80M in nine months and ordered 65 new A319s from Airbus.•The Wal-Mart business model started out by serving cities of less than 50,000 people due to less competition.
The Wal-Mart business model started out by serving cities of less than 50,000 people due to less competition. •JetAmerica will mimic the success of Allegiant Air and Ryanair, other low cost carriers that make profits by serving smaller cities and staying away
JetAmerica will mimic the success of Allegiant Air and Ryanair, other low cost carriers that make profits by serving smaller cities and staying away from the competition.•JetAmerica is targeting small and midsize cities that have seen the number of daily flights fall over the last five years.
JetAmerica is targeting small and midsize cities that have seen the number of daily flights fall over the last five years. •Cities targeted are those with populations of 3M to 6M within 75 miles of uncongested airports and without direct, non-stop service on large jets to
Cities targeted are those with populations of 3M to 6M within 75 miles of uncongested airports and without direct, non-stop service on large jets to destinations such as New York and Florida.•JetAmerica is targeting travelers who now drive as far as 100 miles to major airports for lower fares.
JetAmerica is targeting travelers who now drive as far as 100 miles to major airports for lower fares. •Airfares increase at those airports as daily flights decreased.
Airfares increase at those airports as daily flights decreased.•One new B737-800, 189Y has been leased from Miami Air on a wet lease basis. A second will be added in the first month and four by July of 2009.
One new B737-800, 189Y has been leased from Miami Air on a wet lease basis. A second will be added in the first month and four by July of 2009. •The business plans calls for one B737-800 to be leased every four months.
The business plans calls for one B737-800 to be leased every four months.•Miami Air will provide backup aircraft as needed
Miami Air will provide backup aircraft as needed•Each B737-800 will fly to four cities daily.
Each B737-800 will fly to four cities daily.•JetAmerica estimates revenue at more than $50M in year one and about $150M in year two.
JetAmerica estimates revenue at more than $50M in year one and about $150M in year two.• JetAmerica is offering fares that are half of what competitors offer.
JetAmerica is offering fares that are half of what competitors offer.•Prices will start at $9 a seat and top out at $199.
Prices will start at $9 a seat and top out at $199. •Passengers will pay $15 to check a bag. Food, drinks and in-flight TV will be paid for.
Passengers will pay $15 to check a bag. Food, drinks and in-flight TV will be paid for. •Cities served are to include Toledo, Ohio; South Bend, Ind.; Melbourne, Fla.; Newark, N.J.; Minneapolis and Lansing, Mich.
Cities served are to include Toledo, Ohio; South Bend, Ind.; Melbourne, Fla.; Newark, N.J.; Minneapolis and Lansing, Mich. •May add Greensboro and Winston-Salem in 2009.
May add Greensboro and Winston-Salem in 2009.•Lansing, South Bend, Melbourne and Toledo airports are providing subsidies worth $1.4M in its first year, plus $867,000 in waived airport fees and
Lansing, South Bend, Melbourne and Toledo airports are providing subsidies worth $1.4M in its first year, plus $867,000 in waived airport fees and $1.1M in marketing and advertising support.•The subsidies are being provided from the U.S. DOT’s Small Community Air Service Development Program,
The subsidies are being provided from the U.S. DOT’s Small Community Air Service Development Program, •DOT awarded $104M to 223 recipients since 2002 aimed at restoring lost service and to bring fares down.
DOT awarded $104M to 223 recipients since 2002 aimed at restoring lost service and to bring fares down.Lufthansa expands by acquisition and partnerships.
•Lufthansa is the fifth largest carrier in the world.
Lufthansa is the fifth largest carrier in the world. •Subsidiaries include Lufthansa Cargo, Lufthansa CityLine and Lufthansa Italia.
Subsidiaries include Lufthansa Cargo, Lufthansa CityLine and Lufthansa Italia. •LOT Polish Airlines may be a buy prospect if privatization proceeds.
LOT Polish Airlines may be a buy prospect if privatization proceeds.•The takeover of bmi (British Midland Airways) is in process, already owns 80%.
The takeover of bmi (British Midland Airways) is in process, already owns 80%.•Brussels Airlines is being merged into the Lufthansa system, already owns 45%.
Brussels Airlines is being merged into the Lufthansa system, already owns 45%.•Austrian Airlines takeover has a deadline of July 2009 for completion.
Austrian Airlines takeover has a deadline of July 2009 for completion.•SAS takeover would be complex and the subject of an EU Competition Commission review.
SAS takeover would be complex and the subject of an EU Competition Commission review.•Lufthansa owns or has shares in:
Lufthansa owns or has shares in:-Air Dolomiti (100%)-Eurowings (100%)-Germanwings (100%)-Jet Airways (Shareholding subject to changes in Government of India foreign ownership rules).-JetBlue (19%)-Luxair (13%)-SunExpress (50%) -Swiss (100%)India's aviation sector is struggling as traffic declines.
•Airlines in India are facing:
Airlines in India are facing:-big losses, as much as $2.0Bn combined to March 2009, -high debt and;-falling demand as traffic declined in April by 15% compared to the same month last year. •The down turn has been blamed on:
The down turn has been blamed on:-over-expansion, -high fuel prices and;-price competition.•The Indian government introduced open-skies in 2004 assuming traffic would expand by 25% through 2010.
The Indian government introduced open-skies in 2004 assuming traffic would expand by 25% through 2010.Air India is estimated to have lost $800M in 2009 and to carry $4Bn in debt.
•The Indian flag carrier operates 153 aircraft.
The Indian flag carrier operates 153 aircraft.•Plans to take delivery of 30 new aircraft in 2009.
Plans to take delivery of 30 new aircraft in 2009. •These include 7 B777s, 4 B737-800s and 19 A319s, A320s and A-321s.
These include 7 B777s, 4 B737-800s and 19 A319s, A320s and A-321s.•111 aircraft were ordered from Airbus and Boeing for delivery between 2007 and 2012.
111 aircraft were ordered from Airbus and Boeing for delivery between 2007 and 2012.•45 new aircraft have been delivered since 2007.
45 new aircraft have been delivered since 2007. Jet Airways, India’s second largest airline, is cutting capacity by 10%.
•Fuel companies threatened to cut off supplies in February.
Fuel companies threatened to cut off supplies in February.•Debt outstanding was $14Bn in April rising to $16Bn in May 2009.
Debt outstanding was $14Bn in April rising to $16Bn in May 2009.•Lufthansa is a possible savior if foreign ownership rules are relaxed by the Indian government.
Lufthansa is a possible savior if foreign ownership rules are relaxed by the Indian government. •India's aviation regulator reported an Air India and Jet Airways near-collision as they took off on two Mumbai Airport diagonal runways on May 31st
India's aviation regulator reported an Air India and Jet Airways near-collision as they took off on two Mumbai Airport diagonal runways on May 31st 2009.•The Indian domestic aviation industry has 40% over-capacity.
The Indian domestic aviation industry has 40% over-capacity.•Jet Airways has a fleet of 110 Airbus, ATR and Boeing aircraft.
Jet Airways has a fleet of 110 Airbus, ATR and Boeing aircraft. •The airline is seeking to restructure payment schedules to financial institutions and service providers in order to release $270M in cash
The airline is seeking to restructure payment schedules to financial institutions and service providers in order to release $270M in cash•Expects to save $330M by:
Expects to save $330M by: -closing some overseas bases, -laying off staff, -cutting salaries, -freezing the size of the fleet (domestic fleet was cut by 25% so far this year), -Deferring aircraft deliveries for two years saving $145M in capital expenditure in FY09.•It wet-leased out nine wide body aircraft to foreign carriers earning $34M in Q4 of 2008,
It wet-leased out nine wide body aircraft to foreign carriers earning $34M in Q4 of 2008,•The carrier was to buy 20 aircraft from Boeing over the next two to three years, with half of them scheduled for delivery in 2009.
The carrier was to buy 20 aircraft from Boeing over the next two to three years, with half of them scheduled for delivery in 2009.Atlas Air grounds 7 B747-200s
•Management took action during Q4 to reduce its B747-200 fleet by seven aircraft the remaining seven B747-200s are unencumbered and will be
Management took action during Q4 to reduce its B747-200 fleet by seven aircraft the remaining seven B747-200s are unencumbered and will be managed opportunistically.•The carrier recorded a non-cash pretax special charge of $91.2M associated with these retirements coupled with a maintenance charge of $8.2M
The carrier recorded a non-cash pretax special charge of $91.2M associated with these retirements coupled with a maintenance charge of $8.2M related to the overhaul of 5 engines.•Management says Atlas Air Worldwide Holdings Inc. (AAWW) limited exposure to ACMI contract renewal risk.
Management says Atlas Air Worldwide Holdings Inc. (AAWW) limited exposure to ACMI contract renewal risk.•AAWW reported full-year 2008 net income plunged to $63.70M from $132.42M a year ago.
AAWW reported full-year 2008 net income plunged to $63.70M from $132.42M a year ago.•2008 operating revenues increased to $1.61Bn from $1.58Bn in the prior year.
2008 operating revenues increased to $1.61Bn from $1.58Bn in the prior year.•Q4 profit increased to $62M up from $51M in the year-ago quarter on deferred pretax gains from DHL Express' investment.
Q4 profit increased to $62M up from $51M in the year-ago quarter on deferred pretax gains from DHL Express' investment. •Excluding items, net income was $29.6M for Q4.
Excluding items, net income was $29.6M for Q4.•Q4 revenue dropped more than 25% to $335M from $448M in the year-earlier quarter due to the deconsolidation of Polar Air Cargo Worldwide.
Q4 revenue dropped more than 25% to $335M from $448M in the year-earlier quarter due to the deconsolidation of Polar Air Cargo Worldwide.•Results for Q4 includes a previously disclosed deferred pretax gain of $153.6M related to DHL Express' investment in a 49% equity interest in Polar
Results for Q4 includes a previously disclosed deferred pretax gain of $153.6M related to DHL Express' investment in a 49% equity interest in Polar Air Cargo. •Polar Air Cargo was deconsolidated from AAWW for reporting purposes on October 27, 2008, concurrent with a commencement of the blocked-
Polar Air Cargo was deconsolidated from AAWW for reporting purposes on October 27, 2008, concurrent with a commencement of the blocked-space agreement between Polar and DHL Express.Air France-KLM reported a full year loss of $780M to March 2009 compared to a $1.1Bn profit in 2007.
•Lost $680M in Q4 ending March 2009.
Lost $680M in Q4 ending March 2009. •Q4 revenues declined to $6.75Bn down 12% from the same period a year ago.
Q4 revenues declined to $6.75Bn down 12% from the same period a year ago.•To reduce summer capacity by 4.5% and cargo capacity by 11%.
To reduce summer capacity by 4.5% and cargo capacity by 11%.Air France-KLM and Delta Air Lines (Including Northwest) expand their trans-Atlantic alliance from 2010 through to 2013 with regulatory approval.
•The JV pools revenues and costs on routes between Europe and the USA.
The JV pools revenues and costs on routes between Europe and the USA.•Savings are projected at $300M annually.
Savings are projected at $300M annually.•The JV group operates 25% of trans-Atlantic capacity
The JV group operates 25% of trans-Atlantic capacityCSA Czech Airlines privatization is expected to be completed by September 2009.
British Airways (BA) will park up to 16 aircraft as a capacity cutting measure.
•Reported a pre-tax loss of $602M for the year ending March 31st 2009 compared to a profit of $1.4Bn in 2008.
Reported a pre-tax loss of $602M for the year ending March 31st 2009 compared to a profit of $1.4Bn in 2008. •These are the biggest loose reported by BA since privatization in 1987.
These are the biggest loose reported by BA since privatization in 1987. •Passengers carried fell by 4.3% to 33.1M as revenue increased to $13.5Bn.
Passengers carried fell by 4.3% to 33.1M as revenue increased to $13.5Bn. •The savings in fuel costs was offset by higher US dollar-foreign exchange rate costs and a weaker pound sterling.
The savings in fuel costs was offset by higher US dollar-foreign exchange rate costs and a weaker pound sterling. Virgin America (VA) reported operating loss for Q4 of 2008.
•VA is a California-based privately-held domestic airline.
VA is a California-based privately-held domestic airline.•Reported a $27M Q4 2008 operating loss on revenues of $110M.
Reported a $27M Q4 2008 operating loss on revenues of $110M. •Load factor was 81.2% in Q4.
Load factor was 81.2% in Q4. •Unit revenue in Q4 was up 87% versus the fourth quarter of 2007
Unit revenue in Q4 was up 87% versus the fourth quarter of 2007•Q4 unrestricted cash on hand was $68M.
Q4 unrestricted cash on hand was $68M. •VA operates 28 new A320-family aircraft.
VA operates 28 new A320-family aircraft. Virgin Atlantic reported a 17% rise in net profits by applying different accounting rules.
•Virgin Atlantic is a UK long-haul privately-held airline controlled by Sir Richard Branson.
Virgin Atlantic is a UK long-haul privately-held airline controlled by Sir Richard Branson.•Virgin is 49% owned by Singapore Airlines and figures from the Singapore group, produced under the widely adopted international financial
Virgin is 49% owned by Singapore Airlines and figures from the Singapore group, produced under the widely adopted international financial reporting standards, show Virgin Atlantic barely broke even in the 12 months to the end of March and was heavily loss making in the final quarter of that period.•Virgin does not report its financial results under international financial reporting standards as does its main competitor British Airways.
Virgin does not report its financial results under international financial reporting standards as does its main competitor British Airways.•Virgin reported pre-tax profits increased from $52.2M to $102.5M in the 12 months to the end of February 2009
Virgin reported pre-tax profits increased from $52.2M to $102.5M in the 12 months to the end of February 2009•Revenue rose 8.4% from $3.6Bn to $3.9Bn.
Revenue rose 8.4% from $3.6Bn to $3.9Bn.•Notes to the accounts suggest the net profit $67.5M compared to $71.6M a year ago.
Notes to the accounts suggest the net profit $67.5M compared to $71.6M a year ago. •£47.7m a year earlier.
£47.7m a year earlier.•Passengers carried increased to 5.77M, a 1.2% increase over last year.
Passengers carried increased to 5.77M, a 1.2% increase over last year. •Virgin Atlantic and shareholder Singapore Airlines report results using different accounting rules.
Virgin Atlantic and shareholder Singapore Airlines report results using different accounting rules.•Public companies report using international financial reporting standards (IFRS) as adopted by more than 100 countries.
Public companies report using international financial reporting standards (IFRS) as adopted by more than 100 countries.•There is no timetable for private companies to change over to IFRS.
There is no timetable for private companies to change over to IFRS.•Virgin Atlantic uses UK GAAP (generally accepted accounting practice) accounting standards.
Virgin Atlantic uses UK GAAP (generally accepted accounting practice) accounting standards.• Singapore Airlines reported that SIA group fourth-quarter associate losses of $70M came largely come from its share of Virgin Atlantic losses.
Singapore Airlines reported that SIA group fourth-quarter associate losses of $70M came largely come from its share of Virgin Atlantic losses. •The differences in financial performance results from the way fuel and currency hedges are accounted for.
The differences in financial performance results from the way fuel and currency hedges are accounted for. •Virgin increased its premium-market share but growth is being constrained by price cutting by major competitors.
Virgin increased its premium-market share but growth is being constrained by price cutting by major competitors. Singapore Airlines posted a sharp drop in quarterly net profit.
•Hit by fuel hedging losses and a weak travel market.
Hit by fuel hedging losses and a weak travel market.•The swine flu outbreak could delay air travel recovery.
The swine flu outbreak could delay air travel recovery.•Is the world's largest airline by market value.
Is the world's largest airline by market value. Qantas Airways is to ground and/or sell 10 aircraft and defer orders.
•Orders being deferred include 12 B737-800s and 4 A380s.
Orders being deferred include 12 B737-800s and 4 A380s.•May reduce order for 15 B787-800s.
May reduce order for 15 B787-800s.MEA is finding its way through a politically unstable environment in Lebanon.
•Passengers carried in 2008 increased by 20%.
Passengers carried in 2008 increased by 20%.•Profits increased for the sixth year in succession to $80M
Profits increased for the sixth year in succession to $80M•MEA has a fleet of 9 A330s, A321s and A320s.
MEA has a fleet of 9 A330s, A321s and A320s.•Is to add 4 aircraft in 2009 and 3 more in 2010.
Is to add 4 aircraft in 2009 and 3 more in 2010.US Airways is to sell 2M shares in order to raise $75M in debt.
Colgan Air Q400 accident contributed to by fatigue and stress.
•Flight and duty time salary and safety may become key issues in the Colgan Air crash. issue.
Flight and duty time salary and safety may become key issues in the Colgan Air crash. issue. •One pilot was commuting from Seattle.
One pilot was commuting from Seattle.•The first officer sleeping on a couch in the crew lounge.
The first officer sleeping on a couch in the crew lounge.•Experts see a supposed correlation between salary and safety.
Experts see a supposed correlation between salary and safety.•The pilots at Colgan are reportedly not fully trained on the Q400 stick-pusher system.
The pilots at Colgan are reportedly not fully trained on the Q400 stick-pusher system.Southwest Airlines expansion plan are suspended indefinitely and this is a major setback for Boeing.
•Southwest is cutting flights and slowing aircraft deliveries after 38 years of growth.
Southwest is cutting flights and slowing aircraft deliveries after 38 years of growth.•Traffic growth flattened during the fourth quarter of 2008 and will shrink by more than 4% in 2009.
Traffic growth flattened during the fourth quarter of 2008 and will shrink by more than 4% in 2009.•Southwest carried 53M passengers in 1998 which grew to 89M in 2008.
Southwest carried 53M passengers in 1998 which grew to 89M in 2008. •Southwest lost $176M in the second half of last year, its first two unprofitable quarters in a row.
Southwest lost $176M in the second half of last year, its first two unprofitable quarters in a row.•Southwest faces cost rises of about 8% as it downsizes.
Southwest faces cost rises of about 8% as it downsizes. •The stock price is down 40% in just three months, double the decline of the stock tracking Amex airline index.
The stock price is down 40% in just three months, double the decline of the stock tracking Amex airline index. •Boeing is the exclusive aircraft provider to Southwest.
Boeing is the exclusive aircraft provider to Southwest. •Southwest operates a fleet of 538 B737-300s, -500s and -700s.
Southwest operates a fleet of 538 B737-300s, -500s and -700s.•The carrier has 104 B737-700 orders, 62 options and 54 rights on hand with Boeing.
The carrier has 104 B737-700 orders, 62 options and 54 rights on hand with Boeing. EasyJet's first half losses reach $124M VS. $62M a year ago.
•High fuel costs and poor hedging cut into profits.
High fuel costs and poor hedging cut into profits.•First quarter revenue increased to $1.5Bn, up 15.8% year-on-year.
First quarter revenue increased to $1.5Bn, up 15.8% year-on-year.•First Quarter operating costs $1.7Bn, up 25.5% year-on-year.
First Quarter operating costs $1.7Bn, up 25.5% year-on-year.China Eastern gets a $295M cash injection from China's government.
•It previously received $1.1Bn.
It previously received $1.1Bn.•Q1 profits fell 81% due to falling traffic.
Q1 profits fell 81% due to falling traffic.•New management team took over in December 2008.
New management team took over in December 2008.Emirates signed a sale and lease back agreement DAE Capital for 10 B747s and eight B777s.
Arrow Cargo received MD11s from parent World Airways.
•World Airways will operate two MD11Fs for Arrow Cargo.
World Airways will operate two MD11Fs for Arrow Cargo. •MatlinPatterson owns controlling stakes in World Airways and Arrow Cargo.
MatlinPatterson owns controlling stakes in World Airways and Arrow Cargo. Trans States ended flying for American Airlines American Connection in April 2009.
•AA cut the Trans States contract as part of a capacity-reduction strategy.
AA cut the Trans States contract as part of a capacity-reduction strategy.•Trans States reduced its fleet from 50 ERJ-145s to 29 earlier this year.
Trans States reduced its fleet from 50 ERJ-145s to 29 earlier this year. •Trans States returned 10 leased-145s to American in April.
Trans States returned 10 leased-145s to American in April. •Subleased seven aircraft to other parties,
Subleased seven aircraft to other parties, •Four Trans State aircraft were returned to other lessors as they came off lease.
Four Trans State aircraft were returned to other lessors as they came off lease.Gatwick Airport purchase bids are so low that the owner is challenging the order to sell the facility.
•Bids are in the $2Bn range.
Bids are in the $2Bn range.•Owner BAA placed a valuation of $3Bn on the airport.
Owner BAA placed a valuation of $3Bn on the airport.AerCap reports Q1 net income of $30M to March 2009 compared to$50.9M for the same period in 2008.
•The decrease in net income was due to lower sale of assets
The decrease in net income was due to lower sale of assets•Total revenue for Q1 was $208.5M compared to $294.5M for the same period in 2008.
Total revenue for Q1 was $208.5M compared to $294.5M for the same period in 2008. •Q1 sales revenue was $41.7M compared to $142.5M a year ago.
Q1 sales revenue was $41.7M compared to $142.5M a year ago.•Total assets were $5.8Bn an increase of 26%.
Total assets were $5.8Bn an increase of 26%. •Net spread in Q1 was $112.5M compared to $85.6M a year ago, 31% increase.
Net spread in Q1 was $112.5M compared to $85.6M a year ago, 31% increase. •Net spread measures the increase in leasing income.
Net spread measures the increase in leasing income.•AvCap defines it as the difference between lease rentals and interest expense excluding the impact from mark-to-market interest rate caps.
AvCap defines it as the difference between lease rentals and interest expense excluding the impact from mark-to-market interest rate caps. AIG (Owner of ILFC) default rating cut from an A to BBB by Fitch.
•Fitch affirmed AIG’s short-term commercial paper and issuer default rating at F1.
Fitch affirmed AIG’s short-term commercial paper and issuer default rating at F1.•AIG reports Q4 losses of $4.35Bn on write-down’s and a fall in investments.
AIG reports Q4 losses of $4.35Bn on write-down’s and a fall in investments.•The Fed credit facility provided to AIG is aimed at easing concerns of potential buyers that ILFC can't meet near-term financing needs given the
The Fed credit facility provided to AIG is aimed at easing concerns of potential buyers that ILFC can't meet near-term financing needs given the large number of aircraft it has on order. •ILFC bidders are reported to be Carlyle Group, Thomas H. Lee Partners and Greenbrier Equity Group.
ILFC bidders are reported to be Carlyle Group, Thomas H. Lee Partners and Greenbrier Equity Group.•It said it needed additional funding going forward "to meet our future liquidity needs."
It said it needed additional funding going forward "to meet our future liquidity needs."•As of the end of 2008 ILFC had firm orders with Boeing and Airbus for 168 aircraft valued at $16.7Bn to be delivered through 2019.
As of the end of 2008 ILFC had firm orders with Boeing and Airbus for 168 aircraft valued at $16.7Bn to be delivered through 2019.•ILFC finances aircraft purchases through available cash balances, internally generated funds and debt financings.
ILFC finances aircraft purchases through available cash balances, internally generated funds and debt financings.•A combination of the challenges facing AIG and ILFC include:
A combination of the challenges facing AIG and ILFC include:•Downgrades in ILFC’s credit ratings, outlooks by the rating agencies, and turmoil in credit markets eliminated ILFC’s ability to issue commercial
Downgrades in ILFC’s credit ratings, outlooks by the rating agencies, and turmoil in credit markets eliminated ILFC’s ability to issue commercial paper and public unsecured debt.GE will take two years for GE Capital to offload unwanted assets.
•GE Capital’s asset base will from $540BN to $400Bn through 2011.
GE Capital’s asset base will from $540BN to $400Bn through 2011.•GE Capital’s commercial lending unit plans to do $45Bn to $55Bn in new business in 2009.
GE Capital’s commercial lending unit plans to do $45Bn to $55Bn in new business in 2009.•Management is still upbeat even though GE was forced to cut dividends and the company lost the AAA credit rating.
Management is still upbeat even though GE was forced to cut dividends and the company lost the AAA credit rating.•GE shares fell to a long term low in March 2009.
GE shares fell to a long term low in March 2009.•Has issued the $45Bn it needs for 2009 supported by U.S. government guarantees.
Has issued the $45Bn it needs for 2009 supported by U.S. government guarantees.ILFC on Standard & Poor's CreditWatch list at BBB+/Watch Neg/A-2 since April 3rd, 2009.
•The implications of S & Ps CreditWatch review to negative means that S & P could lower, affirm, or raise the ratings pending a sale of ILFC by AIG. (AIG; A-/Negative/A-1).
The implications of S & Ps CreditWatch review to negative means that S & P could lower, affirm, or raise the ratings pending a sale of ILFC by AIG. (AIG; A-/Negative/A-1). •S & P reports that the CreditWatch revision reflects a “belief that a combination of the factors listed below makes an upgrade from the current
S & P reports that the CreditWatch revision reflects a “belief that a combination of the factors listed below makes an upgrade from the current 'BBB+' corporate credit rating for ILFC unlikely upon its planned sale by AIG:-Likely future ownership,
Likely future ownership, -expected increases in secured debt to acquire aircraft,
expected increases in secured debt to acquire aircraft,-refinance maturities and;
refinance maturities and;-Near-term risks in the global aviation market.
Near-term risks in the global aviation market. Willis Lease Finance Corporation total assets surpassed $1Bn.
•Total revenue increased 7% in Q1 due to high utilization of lease assets.
Total revenue increased 7% in Q1 due to high utilization of lease assets.• Net income for Q1 was to $7.0M an increase of 38% compared to $5.1M a year ago.
Net income for Q1 was to $7.0M an increase of 38% compared to $5.1M a year ago. $1.4Tn credit-related write-downs have been reports by the largest financial institutions in the world since March 2007 when the U.S. subprime mortgage crisis became public.
Stress test banks need $75Bn in fresh capital and reserves to protect against adverse market scenarios.
•The 19 major banks have $525Bn in capital and reserves.
The 19 major banks have $525Bn in capital and reserves. •Nearly all banks have enough Tier 1 capital.
Nearly all banks have enough Tier 1 capital. •In a worst case scenario the 19 major banks could generate losses of $600Bn in 2009/2010 on losses from:
In a worst case scenario the 19 major banks could generate losses of $600Bn in 2009/2010 on losses from:-Mortgages,-Credit cards and;-Commercial real estate.•Options for rebuilding capital and reserves and to raise debt not guaranteed by the FDIC are:
Options for rebuilding capital and reserves and to raise debt not guaranteed by the FDIC are:-raise fresh capital,-sell assets,-convert preferred shares into common shares.Bank losses are still likely to increase in all asset classes.
•Bank of America accounts for an estimated half of banks capital shortfall.
Bank of America accounts for an estimated half of banks capital shortfall.Hedge funds reported the best April performance since 2006.
State Street Bank lost $3.7BN from asset-backed commercial paper products.
•Sold $1Bn in stock in response.
Sold $1Bn in stock in response.•Will raise funds to pay off loans received under the TARP program.
Will raise funds to pay off loans received under the TARP program.•Cut its earnings forecast for 2009.
Cut its earnings forecast for 2009.Aerospace banks are at the center of the U.S. government stability test.
•10 of the 19 largest U.S. banks need a total of about $75Bn in new Tier 1 capital to withstand losses if the recession worsened.
10 of the 19 largest U.S. banks need a total of about $75Bn in new Tier 1 capital to withstand losses if the recession worsened.•The 19 tested banks control two thirds of all assets held by the 8,500 U.S. banks.
The 19 tested banks control two thirds of all assets held by the 8,500 U.S. banks.•They hold up to 50% of loans in the U.S. banking system.
They hold up to 50% of loans in the U.S. banking system.•The stress test is not a measure of solvency.
The stress test is not a measure of solvency.•American ExpressT1 Capital is adequate.
American ExpressT1 Capital is adequate.•Bank of America $33.9BN Can sell $10Bn in assets.
Bank of America $33.9BN Can sell $10Bn in assets.•Bank of New York Mellon T1 Capital is adequate.
Bank of New York Mellon T1 Capital is adequate.•BB&T T1 Capital is adequate.
BB&T T1 Capital is adequate.•Capital One Financial T1 Capital is adequate.
Capital One Financial T1 Capital is adequate.•Citigroup $ 5.5Bn Converting pref. to common stock.
Citigroup $ 5.5Bn Converting pref. to common stock.•Fifth Third Bancorp $ 1.1Bn
Fifth Third Bancorp $ 1.1Bn•GMAC $11.5Bn
GMAC $11.5Bn•Goldman Sachs Raised debt & equity capital.
Goldman Sachs Raised debt & equity capital.•JP Morgan ChaseRaised debt & equity capital.
JP Morgan ChaseRaised debt & equity capital.•KeyCorp$ 1.8Bn
KeyCorp$ 1.8Bn •MetLife T1 Capital is adequate.
MetLife T1 Capital is adequate.•Morgan Stanley $ 1.8Bn Raising $5Bn, $2Bn in com. stock.
Morgan Stanley $ 1.8Bn Raising $5Bn, $2Bn in com. stock.•PNC Financial $600M
PNC Financial $600M•Regions Financial $ 2.5Bn
Regions Financial $ 2.5Bn•State Street BankT1 Capital is adequate
State Street BankT1 Capital is adequate•SunTrust Banks $ 2.2Bn
SunTrust Banks $ 2.2Bn•US Bancorp T1 Capital is adequate.
US Bancorp T1 Capital is adequate.•Wells Fargo $13.7Bn To issue common stock.
Wells Fargo $13.7Bn To issue common stock.Society Generale profits fall as UBS results recover.
BNP Paribas, the largest bank in France, posted first-quarter earnings of $2.1M representing a decline of 21% from a year ago.
•The bank tripled provisions for loan losses to $2.4Bn.
The bank tripled provisions for loan losses to $2.4Bn.•High profits from Eurobond trading compensated for this.
High profits from Eurobond trading compensated for this. •The banking benefited from the thaw in credit markets which froze after the collapse of Lehman Brothers in September 2008.
The banking benefited from the thaw in credit markets which froze after the collapse of Lehman Brothers in September 2008. •Credit Suisse, Deutsche Bank, JPMorgan Chase and Sachs Group also reported improved first-quarter results that beat analysts’ expectations.
Credit Suisse, Deutsche Bank, JPMorgan Chase and Sachs Group also reported improved first-quarter results that beat analysts’ expectations. •BNP owns the Fortis the Belgian and Luxembourg banking units and BancWest.
BNP owns the Fortis the Belgian and Luxembourg banking units and BancWest. Dresdner Bank Q1 results caused Alliance profits to fall by 97% to $40M.
Marsh & McLennan, the insurance broker, lost $73M in 2008 compared to a profit of $2.48Bn in 2007.
•2008 revenue increased to $11.59Bn from $11.18Bn a year ago.
2008 revenue increased to $11.59Bn from $11.18Bn a year ago.•Reinsurance premium rates declined across most coverage areas.
Reinsurance premium rates declined across most coverage areas.•Subsidiaries Oliver Wyman and Mercer saw significant declines in consulting revenues.
Subsidiaries Oliver Wyman and Mercer saw significant declines in consulting revenues.•Marsh & McLennan profit slipped 6% in the fourth quarter of 2008 with $80M in income, down from $85M a year ago.
Marsh & McLennan profit slipped 6% in the fourth quarter of 2008 with $80M in income, down from $85M a year ago. •The quarterly revenue fell 8.7% to $2.66Bn from $2.92Bn a year ago.
The quarterly revenue fell 8.7% to $2.66Bn from $2.92Bn a year ago. •Fourth quarter revenue from core risk and insurance services declined 5% to $1.1Bn.
Fourth quarter revenue from core risk and insurance services declined 5% to $1.1Bn.•The company competes with Aon Corp., in find commercial insurance coverage for corporations.
The company competes with Aon Corp., in find commercial insurance coverage for corporations.•AON growth has been hampered by competitive pressure on commercial property-casualty insurance pricing
AON growth has been hampered by competitive pressure on commercial property-casualty insurance pricing coupled with a weak economy.•Roughly two-thirds of AON revenue is commissions.
Roughly two-thirds of AON revenue is commissions. Tax avoidance strategies at risk for banks and lessors.
•Proposed sweeping U.S. government changes to tax avoidance strategies by USA corporations may impact off-shore aircraft lessors if passed.
Proposed sweeping U.S. government changes to tax avoidance strategies by USA corporations may impact off-shore aircraft lessors if passed. •The option of indefinitely leaving foreign earnings parked in offshore tax havens may end costing these jurisdictions $700Bn in lost revenue.
The option of indefinitely leaving foreign earnings parked in offshore tax havens may end costing these jurisdictions $700Bn in lost revenue. China Eastern could scrap its order for nine B787s due to weak international travel demand.
China Eastern Airlines does a $84.3M sale and lease back deal for two A340s.
•Bank of Communications Finance Leasing is the lessor
Bank of Communications Finance Leasing is the lessor •The assets were priced at book value.
The assets were priced at book value.• The lease payment is $810,000 per month, payable quarterly.
The lease payment is $810,000 per month, payable quarterly. •Lease them back over the next five years.
Lease them back over the next five years.Airlines exposed to the Mexico market grew as swine flu spread to 11 countries:
Safety Issues: Loss aversion or fear of loss, value attribution plus commitment are safety issues in aircraft accident scenarios.
• People tend to over react in situations where the need is for loss aversion.
People tend to over react in situations where the need is for loss aversion.• March 27th 1977, Tenerife, a KLM B747 took off without tower clearance.
March 27th 1977, Tenerife, a KLM B747 took off without tower clearance.• 584 people died when the aircraft crashed making it the deadliest aeronautical accident in history.
584 people died when the aircraft crashed making it the deadliest aeronautical accident in history.• The pilot was the head of KLM's safety program.
The pilot was the head of KLM's safety program.• Issues on his mind were mandated rest periods and terrorist threats.
Issues on his mind were mandated rest periods and terrorist threats.• Already invested were elements that the pilot attributed value to and that he was committed to: (1) time (2) money and (3) effort.
Already invested were elements that the pilot attributed value to and that he was committed to: (1) time (2) money and (3) effort.• In making the decision to take off the pilot attributed value to a number of these considerations.
In making the decision to take off the pilot attributed value to a number of these considerations.• In such studied scenarios 75% of participants make the wrong decision.
In such studied scenarios 75% of participants make the wrong decision.Section 363 of the bankruptcy code allows Fiat to acquire healthy parts of Chrysler and to leave toxic assets in bankruptcy for creditors to fight over.
Bankruptcy plan has implications for future airline restructurings.
• Chrysler workout plan gives non-secured credits the same standing as secured lenders with broad implications for future airline Chapter 11 cases.
•An estimated 20 of the 45 secured creditors would prefer liquidation in preference to the proposed Chrysler Chapter 11 debt forgiveness plan.
An estimated 20 of the 45 secured creditors would prefer liquidation in preference to the proposed Chrysler Chapter 11 debt forgiveness plan. •If court approved the plan would rewrite the rules for the rights of creditors and corporate restructuring.
If court approved the plan would rewrite the rules for the rights of creditors and corporate restructuring.•The bankruptcy code gives first lien on assets to secured creditors who are paid first.
The bankruptcy code gives first lien on assets to secured creditors who are paid first.•Junior Chrysler creditors such as labor, suppliers and warranty holders are unsecured but they have been asked to take less of a write-off than
Junior Chrysler creditors such as labor, suppliers and warranty holders are unsecured but they have been asked to take less of a write-off than secured creditors. •In the future employees, fuel suppliers and vendors could jump ahead of an airline’s secured creditors in a bankruptcy scenario.
In the future employees, fuel suppliers and vendors could jump ahead of an airline’s secured creditors in a bankruptcy scenario.Major banks, already recipients of TARP funding, and hedge funds are exposed to Chrysler.
•Citigroup, Goldman Sachs, JP Morgan Chase and 45 other banks rejected 30 cents in the dollar for $6.9Bn in secured debt on plant and property
Citigroup, Goldman Sachs, JP Morgan Chase and 45 other banks rejected 30 cents in the dollar for $6.9Bn in secured debt on plant and property secured-loans with Chrysler.•Chrysler Financial has a $24Bn financing facility.
Chrysler Financial has a $24Bn financing facility.Daimler owns 19.9% of Chrysler and Cerberus Capital Management own 80.1%.
•The $2Bn of debt held by Daimler and Cerberus would be canceled.
The $2Bn of debt held by Daimler and Cerberus would be canceled.•Daimler and Cerberus would contribute $600M to the pension deficit.
Daimler and Cerberus would contribute $600M to the pension deficit. LIBOR, the interest rate that banks lend to each other continues to fall as bank deposits increase.
The US Treasury $4Bn investment in Chrysler is to be exchanged for an 8% equity share.
TALF Loan term may be increased to 5 years
Federal Reserve may offer 5-year TALF loans for commercial mortgage backed securities.
Glenworth Financial reported a Q4 loss due to a fall in investments.
Metlife reports 1st quarter loss on rising costs and declining portfolio
Hartford Financial reported a 3rd straight loss due to equity trading.
All State reported its third straight quarterly loss in a row due to negative investment returns.
RBS, Barclays and Lloyds Group bad loans may increase in 2009.
Mitsubishi UFJ posted its first annual loss of $2.4Bn.
Sumitomo Mitsui buys Citigroup brokerage in Japan for $6Bn.
The world economy tanked in Q1. GDP is a key determinant of airline traffic, revenues and earnings.
•Global GDP is estimated at $55Tn annually.
Global GDP is estimated at $55Tn annually.•Global GDP is expected to contract 1.9% in 2009 according to the IMF.
Global GDP is expected to contract 1.9% in 2009 according to the IMF.•IMF projects U.S. GDP will fall by 2.8% and the EU by 2%.
IMF projects U.S. GDP will fall by 2.8% and the EU by 2%.•Japanese GDP is expected to fall by 6.2%, U.K. GDP by 4.1%.
Japanese GDP is expected to fall by 6.2%, U.K. GDP by 4.1%.•China’s GDP is expected to slow to 6.5% growth compared to 9% growth in 2008.
China’s GDP is expected to slow to 6.5% growth compared to 9% growth in 2008. •European Union GDP declined 2.5% in Q1 of 2009 equivalent to an rate of 10%-plus on an annualized basis. Annual GDP is $16.8Tn.
European Union GDP declined 2.5% in Q1 of 2009 equivalent to an rate of 10%-plus on an annualized basis. Annual GDP is $16.8Tn.•USA GDP declined by 6.3% on an annualized basis in Q1 of 2009. Annual GDP is $14Tn.
USA GDP declined by 6.3% on an annualized basis in Q1 of 2009. Annual GDP is $14Tn. •Japanese GDP fell 15.2% in Q1, the worst performance since 1955. Annual GDP is $4.4Tn.
Japanese GDP fell 15.2% in Q1, the worst performance since 1955. Annual GDP is $4.4Tn.•China’s GDP grew 6.1% in Q1, the lowest in 10 years. Annual GDP is $3.4Tn.
China’s GDP grew 6.1% in Q1, the lowest in 10 years. Annual GDP is $3.4Tn.•German GDP dropped 3.8% in Q1 equivalent to 14.4% on an annualized basis, a figure last visited in 1970. Annual GDP is $3.3Tn.
German GDP dropped 3.8% in Q1 equivalent to 14.4% on an annualized basis, a figure last visited in 1970. Annual GDP is $3.3Tn. •UK GDP was an weak 1.8% in Q1. Annual GDP is $2.8Tn.
UK GDP was an weak 1.8% in Q1. Annual GDP is $2.8Tn.•French GDP fell 1.2% in Q1. Annual GDP is $2.6Tn
French GDP fell 1.2% in Q1. Annual GDP is $2.6Tn•Italian GDP fell 2.8% in Q1, the worst result since 1980. Annual GDP is $2.1Tn.
Italian GDP fell 2.8% in Q1, the worst result since 1980. Annual GDP is $2.1Tn.Britain is at risk of losing its AAA credit rating.
USA is at risk of losing its AAA rating.
•Home foreclosures are up 32% for April.
Home foreclosures are up 32% for April.•One household in every 374 USA households has received notice of foreclosure.
One household in every 374 USA households has received notice of foreclosure. U.S. GDP fell for the third quarter in a row in Q1 for the first time since the 1970’s oil crisis.
U.S. merchandise imports declined to $353Bn or 30% in Q1 compared with the same period a year ago.
Unemployment rate in the USA projected at 9.1% for 2008, 9.6% for 2010 and 8.5% for 2011 according to the Federal Reserve Bank.
The U.S. government reports the 38th straight monthly decline in employment levels.
•U.S. unemployment stands at 8.9%.
U.S. unemployment stands at 8.9%.•The recession continues to spread but at a slower pace.
The recession continues to spread but at a slower pace.5.1M jobs lost in the USA since the recession began in 2007.
Bankruptcy filings are expected to reach 1.4M in the USA in 2009.
Trade Deficit may have increased in March due to higher oil costs.
China’s is the world’s fastest growing economy.
•The global financial crisis is cutting into growth.
The global financial crisis is cutting into growth.•China’s GDP growth in Q1 was 4.5% lower than the first quarter of 2008 and down 0.7% from Q4, 2008.
China’s GDP growth in Q1 was 4.5% lower than the first quarter of 2008 and down 0.7% from Q4, 2008. •China is exposed to a credit crisis similar to the one that began in the USA in 2007.
China is exposed to a credit crisis similar to the one that began in the USA in 2007.•The $585Bn infrastructure investment loan stimulus program is leading to over lending that could lead to more bad loans.
The $585Bn infrastructure investment loan stimulus program is leading to over lending that could lead to more bad loans.Signs the recession is easing in China, India, the USA and the UK even as U.S. manufacturing fell at its slowest rate in six months in April.
China's central bank reports that the economy beats forecast.
Russian economy is to shrink by 6% in 2009.
Antitrust enforcement is likely to get tougher say's U.S. Assistant Attorney General Christine Varney.
•Bush era guidance in anti-monopoly suits based on Section II of the Sherman Act has been withdrawn for transactions in which:
Bush era guidance in anti-monopoly suits based on Section II of the Sherman Act has been withdrawn for transactions in which: -Companies that acquire suppliers and competitors. -Marks the end of "self-policing “and “self-correcting" markets.Regulations based on product-liability law suits have been changed by an order issued by the Obama administration.
•The revised rules make it easier for consumers to sue airlines in product-liability cases.
The revised rules make it easier for consumers to sue airlines in product-liability cases. Traffic went into decline beginning in February 2009 according to IATA.
•Total passenger traffic declined 9.6% in February and 9.3% in March compared to a year ago.
Total passenger traffic declined 9.6% in February and 9.3% in March compared to a year ago.•Sales of economy tickets fell 8.3% in February and 8.2% in March.
Sales of economy tickets fell 8.3% in February and 8.2% in March. •First class traffic fell 21% in February and 19% in March.
First class traffic fell 21% in February and 19% in March.•7% to 8% of airline ticket purchases are for first class seating and they generate 25% of airline revenue.
7% to 8% of airline ticket purchases are for first class seating and they generate 25% of airline revenue. 14 million fewer passengers will fly on US carriers this summer.
•Could result in $3.5Bn in lost revenue.
Could result in $3.5Bn in lost revenue.•ATA predicts that about 150,000 fewer passengers per day (-6.7%) will travel this summer compared to the same period in 2008.
ATA predicts that about 150,000 fewer passengers per day (-6.7%) will travel this summer compared to the same period in 2008.•An estimated 195M passengers are expected to fly on US carriers between June and August.
An estimated 195M passengers are expected to fly on US carriers between June and August. ORBITZ, the online travel agency, reports that demand for air travel weakened because businesses and consumers have cut back on travel.
•Q1 loss was $336M vs. $15M a year ago.
Q1 loss was $336M vs. $15M a year ago.•Revenues (including air fares, cars and hotels) reached $2.38Bn.
Revenues (including air fares, cars and hotels) reached $2.38Bn.•Overall booking fell by 17%.
Overall booking fell by 17%.•Air fare gross bookings fell by 20%.
Air fare gross bookings fell by 20%.•International air fare booking fell by 36%.
International air fare booking fell by 36%.•Domestic bookings fell by 13%.
Domestic bookings fell by 13%.•Easyjet pre-tax loss for the six months to March 2009 widened due to fuel costs.
Easyjet pre-tax loss for the six months to March 2009 widened due to fuel costs.•The reported loss was $169M vs. $83M a year ago.
The reported loss was $169M vs. $83M a year ago.•Revenues in the period were $1.5Bn.
Revenues in the period were $1.5Bn.FAA air traffic network computers have at least 763 high risk areas that increase the likelihood of a security breach.
Oil is at a six month high
• The price of oil hits $57 per barrel as the summer peak travel season approaches.
Fuel demand is down 7.9% since 2008, the lowest level since 1999.
U.S. carriers generated $1.1Bn from baggage fees in 2008.
Indian carriers are exposed to oversupply, falling revenues, rising losses and over leverage.
•Airlines from India account for $1.75Bn of the $8.5Bn loss estimates reported by IATA for 2008 but only carry 2% of global airline traffic.
Airlines from India account for $1.75Bn of the $8.5Bn loss estimates reported by IATA for 2008 but only carry 2% of global airline traffic.•Losses are attributed to over-expansion, excess seat capacity, high fuel costs, and intense price competition.
Losses are attributed to over-expansion, excess seat capacity, high fuel costs, and intense price competition.Pension Benefits Guaranty Corp; the government agency that backstops airline pension funds, sees its finances deteriorate by 300% between September 2008 and March 2009.
•Deficit now stands at $33.5Bn.
Deficit now stands at $33.5Bn.