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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.

October 2009

ILFC: Jean-Paul Gut (Ex Airbus), and possibly John Leahy of Airbus may be acting for Qatari funds in bidding for ILFC.

ILFC is going to pay back $2B in short-term debt as AIG enters talks to sell part of ILFC to founder and shareholder Steven Udvar-Hazy.

Airbus is not cutting cut back the production of commercial aircraft because airlines continue to finance deliveries.

Boeing reports no cancellations of aircraft orders from Chinese airlines noting deliveries have been adjusted in response to weak demand.

Deliveries: Chinese airlines have been negotiating with Boeing to delay the delivery of B787 orders.

Deliveries: The Chinese government encouraged airlines to cancel or delay aircraft orders air

travel growth fell to single digits in 2008.

Whitetails: New commercial aircraft delivered off the production line and placed in storage by the manufacture due to a lack of buyers.

White tail risk: A cash crunch over the winter months may force buyers to cancel aircraft already on the production line forcing them to be parked.

Profits:  China's airlines reported an $897M profit for the 1st nine months of 2009 vs. a loss of $813M in the year-ago period.

Profits & China: CAAC says total operating revenue fell 2.2% in the 1st nine months and operating expenses fell 3.8%.

Passenger & China: Boarding’s increased by 20% to 170M for the 1st nine months of 2009 and load factor increased to 75.9%.

Cargo & China: CAAC says cargo traffic rose 0.4% to 3.1M tones, for the 1st nine months of 200, the first growth reported in 2009.

Air India subsidy: Indian government will inject $1.12B into the ailing national carrier to be paid out in phases.

Air India lost $875M in the fiscal year ending in March 2009.

Air India must agree to restructure the business, boost revenues, and cut cost by $650M spread over two years.

Southwest Airlines reported a Q3 loss $16M vs. a $120M loss in the year ago period.

Japan Airlines (JAL) is seeking its fourth state bailout since 2001 but lenders may reject requests for a large debt write-off.

JAL is reported to wants $3.4B in debt relief a claim denied by the carrier.

Fares: U.S. carriers will try to implement domestic airfare increases in Q4 in addition to the surcharge some carriers will apply for travel during holiday season.

Traffic: The Boyd Group says the 2009 trend of declining passenger traffic will continue through 2014.

Traffic: The Boyd Group says 749M passengers flew in 2008, 675M passengers will fly in 2010 and 659M in 2014.

Traffic: Bureau of Transportation Statistics (BTS) reports that U.S. airlines carried about 346M passengers in the first six months of 2009.

Traffic: BTS reports that U.S. domestic traffic fell 9% up to June 2009 vs. the same period last year.

Aircraft retirement: The Boyd Group says 622 of 1,500 regional jets flying in North America will be retired by 2014.

Safety: Proposed fines on United Airlines and US Airways for violating safety directives may signal increased safety regulation

Safety & Fines: Southwest Airlines paid the FAA $7.5M in fines in March 2009.

Safety & Fines: FAA fined American Airlines $7.1M in 2008 for flying two jets 58 times without making FAA mandated repairs. 

Safety & Fines: The largest fine levied by the FAA was nearly $9M against Eastern Airlines just before the airline declared bankruptcy.

UAV (unmanned aerial vehicles) market will reach the upper teens in billions of dollars worth of procurement through 2018.

UAV market: The US is the driving force behind this market says Forecast International.

UAV market: US-based companies will account for more than 60% of the market's value."

UAV market trends: Two contracts now in competition will define key roles for unmanned aircraft systems operated by US forces for possibly decades to come.

Republic Airways buys 10 Embraer 190ARs (EJet) (99 seats) from US Airways. Republic will assume the debt on the aircraft.

Republic will use the EMB190AR’s to replace B717s at its subsidiary Midwest Airlines.

Republic’s subsidiaries will be the largest operators of EJets in the world by Q1 of 2010 with 145 EJets, including 15 E190s.

Mokulele (Majority owned by Republic), agreed a JV with Mesa Air Group, the parent of go! to create Hawaii's second-largest carrier.

Mesa Air will own 75% of the new venture, while Mokulele shareholders will get 25%.

Mokulele shareholders will fund up to $1.5M to capitalize the deal. Republic will forgive Mokulele's $3.1M in debt.

Fines: FAA proposed $9.2M in safety related fines against US Airways and United Airlines.

Fines: $5.4M fine against US Airways for allegedly operating 8 aircraft while non- compliant with (a) safety directives (b) its maintenance program.

Fines: $3.8M fine against United for allegedly flying an aircraft on more than 200 flights after violating its own maintenance program.

Air France-KLM may delay the delivery of some new A380 and B777 aircraft.

Air France-KLM: Delaying aircraft deliveries would help conserve cash until traffic recovers.

Hawker Beechcraft Corporation (HBC) sold 24 of its new Beechcraft T-6C trainer aircraft ($185.3M) to the Royal Moroccan Air Force.

HBC: This is the first sale of the all-new T-6C trainer. It also marks the company's third contract awarded this year for a Foreign Military Sale.

HBC: The contract is from the U.S. Government and is a government-to-government deal between Morocco and the U.S.

HBC: The T-6C will replace the Government of Morocco's current T-34 basic trainer and Cessna T-37 jet trainers.

U.S. Air Force took delivery of the first of 23 King Air 350ER twin turboprop aircraft in April under a $171M contract as part of Project Liberty.

King Air 350ER features additional nacelle fuel tanks for extended range & a heavier landing gear that raises the gross weight by 1,500 pounds to 16,500 MTOW.

King Air ER can fly for more than eight hours and cruise at 300 knots at 35,000 feet.

JPMorgan Chase (JPMC) (A key aerospace bank) reported a second consecutive quarter of profit a year after accepting a government bailout. 

JPMC’s reported Q3 profits of $3.6B vs. a profit of $527M in Q3 of 2008.

JPMC’s results came from the investment bank where earnings more than doubled vs. the same period a year ago

JPMC added $2B to its consumer credit reserves to cover future losses, bringing the total reserve to $31.5B.

Boeing and Airbus may consider upgrades for the A320 and B737 families using engines other than GE/SNECMA’s (GE) CFM56.

Airbus and Boeing acknowledge that is feasible to modify the design of the A320 and B737 to accommodate engines other than the CFM56.

GE argues that the best solution is not to switch out of the CFM56 but to meet noise and emissions standards by upgrading its technology in increments. 

Pratt & Whitney already has an engine design in the field that would be competitive with the CFM56 and wants to outpace GE using technology that is more advanced.

GE hopes that nothing will happen before 2016 because profits from the CFM56 can be generated for years to come.

Far Eastern Air Transport (FAT) (Taiwan) is to resume operations under new management. 

After Huafu Enterprise Co

FAT financial difficulties forced the carrier to suspend operations in 2008 but it did not declare bankruptcy. 

Taiwan’s Civil Aeronautics Administration rescinded FAT’s international flight rights but FAT can resume domestic flights by the end of 2009.

JPMorgan monthly business jet report says the pre-owned corporate jet market recovery continues though new jet demand lags.

JPMorgan says used corporate aircraft inventories fell 50 basis points in September to 13.6% of the in-service fleet

JPMorgan sees a second consecutive meaningful fall, as evidence that the used aircraft market is past its cyclical trough.

Corporate jet (Used) average asking prices fell 1.8% in September. Prices are 24% below November 2008 peaks says JPMorgan.

Corporate jet inventories remain far above last cycle’s peak and a pickup in demand for new jets, in this down cycle has further to run.

Air cargo at European airports fell 11.7% year-on-year in August as passenger traffic fell 4.5% says the airports association ACI Europe.

Airports Council International (ACI) widely watched indicator of economic health continued an improving trend that started this summer.

Aer Lingus' long-haul operations are in serious jeopardy as the Irish airline tries to return to profitability.

Aer Lingus: Says 70% of losses can be attributed to long-haul operations and there is a real risk that it will not be able to continue them.

United, Aer Lingus plan to move ahead with their trans-Atlantic route joint venture.

ICAO is looking at aircraft fuel efficiency and emissions over the next 40 years because of the expected growth in air travel over that period.

ICAO in consultation with IATA says air travel represent 2% of the total man-made CO2 emissions in the world.

Flying is the fastest-growing source of carbon dioxide emissions, accounting for more than 600M tons of the greenhouse gas annually.

Aircraft today are 70% more fuel-efficient than they were some 40 years ago says Denis Chagnon, representative for ICAO.

ICAO wants more energy-efficient aircraft engines, improved airports, & navigation to make flights shorter so that aircraft burn less fuel.

ICAO targets use less stringent standards than the ones in the Kyoto agreement, setting 2005 as a baseline year while Kyoto uses 1990.

Aircraft emissions: ICAO/UN near proposals to cut emissions from aircraft by 60% by mid-century.

ICAO approved a 13% cut from 2005 emission levels by 2012, a 26% cut by 2020, and a 60% cut by 2050.

ICAO says these targets are "aspirational”, and would not be binding on any country or airline.

Consumer desire for air travel is being suppressed by air travel security regulations and fees added to basic fares.

ANA (Japan) is asking passengers to visit the lavatory before boarding in an attempt to reduce carbon emissions!

Ryanair previously proposed that passengers be allowed to buy standing-room only tickets on its aircraft!

AirAsia (Malaysian) a low cost carrier postponed delivery of eight of 24 A320-200s aircraft orders from 2011 to 2014.

B747-8 is a loss making program because of lower than projected production rates.

B747-8 production costs increased as market conditions deteriorated and as a result, Boeing plans a $1Bn pre-tax charge in Q3.

B747-8 delays in engineering design resulted in re-work and disruption leading to higher supplier costs, the primary cost drivers.

B747-8 program is costing $640M more to complete than budgeted at both Boeing and its suppliers.

B747-8: Maintaining the B747-8 production rate at 1.5 aircraft rather than 2 per month is costing $360M.

B747-8: Holding the production rate at 1.5 instead of two per month is in response to weak market conditions.

B747-8 lower production rate results in the allocation of fixed costs and supplier volume-based penalties across fewer aircraft, leading to a higher cost per aircraft.

B747-8F: First flight will take place by early 2010 with first delivery in the fourth quarter of 2010.

B747-8 Intercontinental:  First delivery of this passenger variant is scheduled for Q4 2011.

ATR and Libyan Airlines signed a $35M contract 2 new 48-seat ATR 42-500s (PW 127M) engines, the first ATR aircraft to be delivered to Libya.

United Airlines (UAL)  has priced a public offering of EETC (enhanced equipment trust certificates ) aircraft refinancing.

United EETCs: The $659M financing has an interest rate of 10.40% and a final distribution date of November 1, 2016.

United gain: The refinancing nets UA $90M as the  ETTCs will repay $568M in principal relating to outstanding 2001-1 EETCs.

United savings: ETTC principal payments will be reduced by $215M in 2010 and $100M in 2011. 

United retained J.P. Morgan Securities and Morgan Stanley as joint book-running managers. Goldman, Sachs acted as co-manager for the offering.

CITs Board and bondholders have approved the capital restructuring. CIT is a major aircraft lessor.

Gulfstream Aerospace rolled out the all-new, ultra-large-cabin, ultra-long-range, Gulfstream G650, first announced in March 2008.

G650 offers the longest range, fastest speed, largest cabin and the most advanced cockpit in the Gulfstream family.

G650 range is 7,000NM at 0.85 Mach and has a maximum operating speed of 0.925.

G650 offers an all-new fuselage cross section, allowing a wider and taller cabin than the G550 model.

G650 is scheduled for first delivery in 2012.

KC10 (DC10) U.S. Air Force has awarded Northrop Grumman a nine-year, $3.8B Contractor Logistics Support (CLS) contract for its fleet of KC-10 Extender refueling tanker aircraft.

KC10 contract includes airframe and engine maintenance to be done at Northrop Grumman's Lake Charles, La., base & TIMCO’s facility in Greensboro, N.C.

KC10 tanker/cargo aircraft is part of the Air Force's Air Mobility Command global support operations.

Azul (Linhas Aereas Brasileiras) signed a $1B, CF34-10E, 15-year, OnPointSM maintenance contract with GE’s Celma facility in Petropolis, Brazil.

Azul has leased Embraer 190/195s and 36 on orders, all fitted with CF34 engines.

Air Niugini (Papua New Guinea) orders two Bombardier Q400s ($60M) and optioned one ($32M) at list price.

ATR presented the first aircraft prototype of its new ATR 42-600 and ATR72-600 aircraft, October 2, 2009.

ATR42-600/ATR72-600 were launched in October 2007 and will enter into service in 2011

ATR has orders for 59 aircraft - 5 ATR 42-600s and 54 ATR 72-600s.

B787 wiring problems threaten further delivery delays according to a report from Bernstein Research.

B787 delivery: Bernstein notes that the B787-9 will be the most popular version but the interval between B787-8 first delivery and B787-9 first delivery has moved from two to three years.

B787 rewiring is required to reduce weight and improve maintainability, increasing the possibility that the first flight and delivery may be delayed again.

B787 order cancellations: 83 B787 orders have been cancelled in 2009 as the program falls 2½ years behind schedule.

A350 behind schedule: A report from Bernstein Research claims that the A350 program is five to six months behind schedule.

A350  delivery:  Bernstein says the interval between A350-900 first delivery and A350-1000 first delivery will be moved but my how much is unclear.

A350/B787 development: Bernstein reports that Airbus & Boeing face challenges in developing stretched versions of their base aircraft.

A350/B787 weight:  Bernstein indicates that weight reduction likely to be a key issue for Airbus and Boeing.

Pratt & Whitney Canada (P&WC) is cutting its global workforce by approximately 410 due to a decline in customer demand and weakness in the global aerospace market with no signs of a recovery in 2010.

IMF raises global economic outlook with Asia leading the recovery.

European unemployment rises to its highest level since 1999; Spain has highest (19%) & the Netherlands the lowest (3.5%).

UAL is to sell 19M shares and $175M in debt.

AirTran, its lenders, & credit card processors extend its credit facility & credit card processing agreements.

AirTran ends Q3 with more than $400M of unrestricted cash and short-term investments.

Midwest Airlines’ last B717 will be removed from service by Dec. 1, replaced by E190s operated by new owner Republic Airways.

September 2009

Airfreight demand in August fell by 9.6% vs. the year-ago figures and vs. an 11.3% drop in July.

Air Freight: IATA says volumes are improving but profits are being hit by rising costs.

IATA predicts a return to international airfreight growth for 2010 of 5.5% vs. 14.5% decline in 2009.

Airfreight demand is up 12% from its December 2008 low but is 16% below April 2008 levels when the fall in demand began.

Utilization: IATA says airlines have reduced daily aircraft utilization citing the B777 fleet where 2009 utilization fell by 2.7% to 11.1 hours per day

Utilization:  Lower utilization helps load factors, but spreads fixed asset costs over fewer flying hours pushing up unit costs.

Bankruptcy:  Kirkland & Ellis bankruptcy attorney James Sprayregen says there don't appear to be any restructurings of major airlines that appear imminent.

GDP: The US economy declined by 0.7% Q2 (April-June) on an annualized basis vs. 6.4% in Q1 suggesting economy may be growing now.

American Airlines (AMR): Will end Q3 with $4.4B in cash and short-term investments. Raised $830M in stock and bond sales. 

TUI Travel negotiating to cancel 10 of 23 B787 orders will be cancelled in order to optimize the flexibility around its long-haul capacity.

Thomas Cook, Europe's second-biggest tour operator, is on track to hit full-year profit forecasts.

Thomas Cook said business had improved due to rate reductions, which had stimulated demand without reducing margins.

Tanker contract: The Pentagon has given Boeing an unfair advantage in the competition for the $35B says Northrop Grumman.

Northrop says the Pentagon shared its pricing data from the first bid with Boeing but did not reveal Boeing's cost estimates to Northrop.

Qatar Airways arranged $700M in financing for four new B777s being delivered in 2009.

Qatar Airways: Secured a 100%, 12 years, $350M asset-backed B777—300ER/200LR lease financing from Bank of Tokyo-Mitsubishi UFJ.

Qatar Airways: Secured a B777-300ER/-200LR, $350M financing from Calyon, Credit Suisse, Helaba, and Natixis via a 12 year, two-tranche finance lease structure.

Kenya Airways (Air France-KLM sub.) may buy 6 to 9 A330-200s from Airbus because of delays in delivering nine B787s from Boeing.

Bernstein Research expects aircraft delivered in 2009-10 to lead to excess capacity and more aircraft delivery deferrals.

Bernstein Research suggests Airbus and Boeing will deliver more aircraft than the market will need through 2012.

Bernstein Research reports that 12.3% (2,500 approx) of the passenger fleet is more than 20 years old and 30.2% is more than 15 years old. 

GE: Commercial engine sales are expected to drop significantly in 2009

Engine shop visits: An estimated 20,000 commercial high bypass aircraft engines will be overhauled between 2009 and 2010

Profits/Losses: IATA expects the combined global loss for 2008/09 to be $27.8B due to falling demand and intensified airline competition.

Traffic: IATA says passenger traffic fell 1.1% in August following a 2.9% fall in July.

Freight: IATA says demand fell 9.6% in August compared to the 11.3% drop in July.

Passenger load factors: Rose 1.2% to 80.9% in July as airlines cut capacity.

Fares: Average fares fell 22% for premium seats and 18% for economy seats in August as demand fell.

China traffic:  CAAC says Chinese airlines carried 22.64M passengers in August, up 41.6% from the year-ago period,

China freight: CAAC says cargo traffic increased by 18.1% to 390,800 tonnes in August.

China load factors: Passenger load factor grew by 1.7% to 79.9%.

JAL: Will cut operating costs by 30% over the next three years, to March 2012.

JAL is forecasting losses of $700M through to the end of March 2010.

B747-8 first flight is expected by the end of 2009 and could be on the same day as the first flight of the B787.

B747-8 Freighter is due for first delivery Q3 of 2010 & B747-8 Intercontinental pax version is due for delivery in Q4 2011.

B747-8 orders: 105 orders on hand at list prices ranging from $293M to $308M each.

Boeing has begun B787 structural changes

Boeing has started making the B787 upper wing join area fix on the static test B787 and the first flight test aircraft.

B787 first flight is expected by the end of 2009.

B787 first delivery to launch customer ANA, Japan is not expected before Q4, 2010.

Boeing is installing the reinforcements on the area within the side-of-body section on the first flight test B787 and on the static airframe.

Modifications on the other 5 flight test B787s will begin shortly according to Boeing.

Oman Air CEO Peter Hill told Reuters that he is not certain his airline will stick with its commitment to lease 6 B787s from Kuwaiti lessor ALAFCO, a contract signed in 2007.

Oman Air CEO is not sure if Boeing has the ability to deliver the B787 as it was originally designed.

Boeing has performance guarantees and delivery dates it is committed to meeting but the manufacturer has not demonstrated that the confidence Oman Air  put in it is going to be met in the near future.

Emissions:  Airline emissions account for less than 2% of global emissions, but have been growing fast.

Emissions: International Energy Agency says global CO2 emissions (all industries) will fall by 2%- plus in 2009 due to the weak economy.

Environment: IATA restates carbon-reduction goals to cut emissions in half by 2050 over 2005 levels.

Emissions: IATA’s emissions reduction will come from a four-part approach of technology, operational improvements, infrastructure upgrades, and economic measures.

Environment: IATA’s economic measures include carbon-trading schemes, tax-incentives that encourage investments in newer aircraft & fuel research.

Environment: IATA aims to improve carbon efficiency by 1.5% p.a. through 2020, and show carbon-neutral growth from 2020 onwards.

Environment: says the airline industry is on pace to produce 1.8% emissions reduction in 2009.

Environment: Critics say that using 2005 carbon levels as the baseline from which to cut is not as strict a measure vs. airline carbon emissions in the 1990s.

Airline carbon trading: By November 2010, IATA plans to begin trading carbon credits on a global market basis.

Airline carbon trading: IATA’s plan would supplant the industry’s participation in the EU’s carbon-trading market and would cost $4.8B.

Passenger rights: A three-hour time limit on tarmac waits for airline passengers will soon become law says Sen. Barbara Boxer (D-Calif.).

Traffic: IATA expects a 20% drop in the number of first class and business class passengers for 2009.

Regulation: Federal Reserve to add rules to regulate pay at major US banks. The Fed is preparing what many say will be the most sweeping rules yet to regulate the banking sector.

AMR Corp, parent of American Airlines will issue $500M worth of stock and debt to raise cash as it prepares for the slower winter travel season.

AMR  will issue 34M shares & sell $287.5M in senior convertible notes converted.

Citigroup, Morgan Stanley, and UBS are managing the AMR debt & equity offerings.

AMR unit revenue to fall 14.3%-15.3% year-over-year, based on a US Securities and Exchange filing Friday.

AMR expects to end Q3 with a cash and short-term investment balance of at least $3.7B, including $460M in restricted cash and short-term investments.

AMR's Q3 consolidated unit cost is expected come in at 12.83 cents and AA mainline at 12.28 cents, down 12.2% from the year-ago quarter.

AMR’s CASM excluding fuel will rise in both Q3 and full year. It expects to have special items of $94M in Q3 and $180M for the full year.

AMR raised $2.9B in financing last week and its shares rose 20%.

AMR arranged the $2.9B financing by selling frequent-flier program to Citi, mortgaging aircraft & doing sale-leasebacks on future aircraft deliveries.

AMR sold $1B frequent-flier miles to Citigroup, which offers an American-branded credit card.

AMR raised $1.6B from the sale & lease back of ordered Boeing aircraft to General Electric.

Porter Airlines, a Canadian regional airline, owned by the Deluce family, increased its fleet by 30% to 18 Q400s from a year earlier.

Air France-KLM is to reduce seating capacity by 2% during the winter season because of falling demand.

ATA member airlines and affiliates transport 90 percent of all U.S. passenger and cargo traffic.

Traffic: ATA says U.S. airline passenger revenue fell 21% in August over year-earlier results as carriers dropped prices by double-digit percentages and passenger volume continued to fall.

The volume of passengers traveling fell 6% in August.

Cargo: ATA says cargo revenue declined 13% in July over last year.

Traffic: ATA says August was the 10th consecutive month that revenue fell from a year earlier.

DOC’s Direct operating costs: The average price of flying one mile fell 17% vs. the 18% decline in the per-mile price reported in July.

Revenue outlooks: Q3 airline revenue will be about 20% below the same period in 2008.Japan Airlines: Nikkei Business Daily reports that JAL creditors are to seek government agreement for a major restructuring of the carrier.

JAL may be broken up and the loss making businesses may be placed in a separate operating unit.

Lufthansa plans to exchange 45 of its 109 CRJ200s and ATR72s operated by subsidiaries Eurowings and CityLine in the coming years with 118-seat E-190s costing $29M each. No date has been confirmed for the replacements.

Lufthansa Cargo cuts its fleet from 19 MD-11Fs to 13 in October, starting with four aircraft on Oct. 1, may make a portion of the cut permanent

US Airways shares rose 17% on no news but rumors that American might move to acquire US Airways, or at least US Airways' most valuable assets – hub airports.

US Airways has key Northeast airports and in Charlotte, N.C., the only southeastern hub besides Atlanta.

Hub concentration:  the Southeastern USA has two major carriers in a world with three major aviation alliances.

TNT Express (Amsterdam), Europe's second largest express delivery carrier, boosted capacity on the Europe-China route with the addition of a new 110-ton B747 extended range freighter.

Capacity cuts: The nine Major carriers in the USA cut capacity by 6.2% from summer 2008 to date.

Load factor: The cut in aircraft capacity increased the load factor for the USA by 1.4 % to 85.8%.

Traffic: The traffic generated by US carriers fell 4.7% from summer 2008 through summer 2009.

AerCap Holdings N.V. ("AerCap") (NYSE: AER) and Genesis Lease Limited ("Genesis") (NYSE: GLS) will merge in an all share-for-share transaction.

AerCap is now the leading independent lessor within the global aircraft-leasing sector, with 116 lessees in 50 countries and a $6B lease portfolio.

AerCap and Genesis will trade as AerCap.

AerCap: The transaction has a value of $1.75B based on Genesis' balance sheet. AerCap stock price has a value of $8.81 per Genesis common share.

AerCap now has a fleet of 358 aircraft and 83 engines that are either owned, ordered, under contract, LOI or managed.

AerCap: The average age of its owned aircraft fleet is 6.6 years.

AerCap has also signed a letter of intent to purchase 13 aircraft from GECAS as part of the deal. AerCap has 83 aircraft on order.

AerCap: GECAS will continue to act as servicer for Genesis' portfolio & provide asset management services in the near term.

AerCap: GECAS has agreed with AerCap a means to terminate early the GECAS services at AerCap's option.

AerCap advisors Morgan Stanley and UBS acted as financial advisors and Milbank, Tweed, Hadley & McCloy LLP, NautaDutilh N.V., & Mell o, Jones & Martin as legal advisors to AerCap.

AerCap: Citi acted as financial advisor and Weil, Gotshal & Manges LLP, Conyers Dill & Pearman and Houthoff Buruma N.V. as legal advisors to Genesis.

Aeroflot will cut its workforce by 13% (2,000 jobs) in the next six months and more job losses will follow.

Market studios: Airbus predicts airlines will buy 25,000 new commercial jets over the next 20 years.

Market studies:  Airbus bases its prediction of aircraft demand on air traffic growth in the developing world.

Market studies: Airbus expects traffic to rebound in 2010 estimating growth of 4.5%.

Order book:Airbus has a 3,500 aircraft order backlog.

Cancellations:  Airbus says airlines are delaying orders by several years rather than cancelling them due to a lack of funding capacity.

Cancellations: Airbus reports 40 aircraft order cancellations this year as Boeing reports 64 cancellations.

Aircraft surplus:  UBS says there will be a global surplus of 1,400 commercial jet aircraft by the end of 2009.

Profits/Losses:  IATA says airlines lost $16.8B in 2008 and will report losses of $11B in 2009.

FedEx reported a 53% drop in Q1 earnings (to end August) or $181M in profits.

FedEx is to increases rates in the USA by an average of 5.9% now that DHL has exited the market.

Aeroflot profits plunged due to lower passenger numbers, losses at its cargo operation and higher fuel costs.

Aeroflot, 51% Russian government owned, net profit fell by 88% to $37M in 2008, down from $313M in 2007.

BOC has 127 aircraft out on lease and 64 new aircraft on order.

CX/BOC deal is the largest sale-and-leaseback arrangement in Cathay's history and is consistent with CXs cash-preservation priority.

CX/BOC sale-and-leaseback covers six B777-300ERs due for delivery between Q4 2009 and Q2 2011

CX arranged an aircraft sale-and-leaseback deal with BOC Aviation (BOC) to increase its liquidity.

CX has no plans to cancel aircraft orders but it is negotiating delivery deferrals.

CX has 39 aircraft due for delivery through 2012. CX has 19 B777-300ERs on order from Boeing.

CX fleet consists of 97 owned and 25-leased aircraft.

CX will sell its 20.7M shares in HAECO, or 12.5% of its holding, for approximately $245M to Swire Pacific.

Cathay Pacific (CX)/HAECO) deal will reduce CXs share in the MRO HAECO to 15% & increase Swire's holding to 46%.

Delta Air Lines is planning a private offering of $500M of senior secured notes due 2014. 

Delta is using the offering, together with initial borrowings under its proposed new senior secured credit facilities, to repay all outstanding borrowings under Northwest's senior corporate credit facility and to use any remaining net proceeds for general corporate purposes.

Cathay Pacific will sell part of its stake in maintenance company HAECO to parent Swire Pacific for USD$245M to raise needed cash.

Inflation is on the rise in the USA but 80% is accounted for by rises in energy prices.

Recovery: IATA sees no recovery until 2012 at the earliest noting that it took more than three years to recover after the Sept. 11 attacks, and the recession has been worse.

Structural change: IATA is saying this recession may result in a long-lasting structural change for the airline industry.

Fuel prices: IATA notes that though the price of fuel fell in 2009 from its record 2008 highs costs are increasing again, dampening the industry’s recovery.

Cash consequences: Airlines have to conserve cash, which means they are delaying spending on more fuel-efficient aircraft.

Losses: European carriers are expected to post $3.8B, the largest losses, followed by Asia-Pacific airlines with $3.6B & North American carriers with $2.6B.

Losses: The global airline industry will lose $11B in 2009, IATA says.

Revenues: IATA says airline revenues will fall by 15%, from $535B in 2008 to $455B in 2009.

Traffic: Passenger traffic is expected to decline by 4% and cargo by 14% in 2009.

Fewer banks funding aerospace: 10 banks controlled 50% of all US assets pre. Sept ’08 now down to 6 banks who may be TBTF.

Japan Airlines cuts back on network and staff in hopes of signing up a new international partner by October (Delta or American favored).

Global hotel room rates at their lowest for five years.

The average price of a hotel room around the world fell by 17% in the first six months of 2009, driven by price drops across every continent according to the Hotels.com Hotel Price Index.

Hotel prices in June 2009 were one sixth lower than they were the year before and room rates were just 1% above their level in January 2004.

HPI is based on prices actually paid by customers at 78,000 hotels across 13,000 locations around the world.

The Hotels.com HPI tracks the real prices paid per hotel room rather than advertised rates.

OPEC predicts that oil consumption will contract 1.8% in 2009 to average 84.05M barrels a day, and then expand 0.6% in 2010 to 84.56M a day.

OPEC is keeping production quotas unchanged to prevent higher prices damaging the recovery.

OPEC member compliance rate with the record output curbs announced in 2008 now stands at 65%.

OPEC expects crude oil demand to remain weak through the end of 2009 as refiner’s lower imports while performing seasonal maintenance before winter.

OPEC says a colder winter would not be sufficient to remove the massive accumulation in distillate stocks, especially as part of its demand may be met by cheaper natural gas.

OPEC raised its global oil demand forecasts for 2009 by 140,000 barrels a day & 2010 by 150,000 barrels a day on expectations the world economy will return to growth.

OPEC (Vienna) controls about 40 percent of worldwide oil supply.

OPEC represents 11 member countries bound by oil output quotas, excluding Iraq.

IEA upgraded its 2010 consumption outlook three times as much as OPEC in a report on Sept. 10.

International Energy Agency (IEA) (Paris) adviser on energy policy to 28 oil-consuming nations

increased its 2010 forecast by 450,000 barrels a day to an average of 85.7M a day.

Oil prices around $70 a barrel are likely to persist says OPEC, and they are about 17% above the price level airlines need to break-even.

Crude oil futures have increased by 53% this year as a result of the economic rebound and OPEC’s implementation of it’s biggest-ever production cut.

JPMorgan expects all the major airlines to survive the slow winter period without filing for Ch 11.

Traffic for August, the peak summer season:  Up 1% at Southwest; flat at JetBlue; down 6.1% at AirTran; 2% at Delta; 8% at American; 3.3% at United; & 3.9% at Continental.

Capacity cuts in August vs. August 08: Delta/Northwest 3.2%; American 9.4%; United 3.3% & Continental 6%.

EADS (Airbus) & Boeing stocks are cyclical stocks exposed to the global economy that increased by more than 60% in the last six months in anticipation of an upswing in the business cycle.

Cycle investors believe that consumers will start flying again as countries emerge from recession, then airlines will accept delivery of new aircraft and order more.

Airbus is projecting that global air traffic will grow by up to 4% in 2010 and over 6% in 2011.

Boeing believes global air traffic will fall in 2009, grow by 4% in 2010, and grow 6% in 2011

Airlines may be structurally unprofitable, because fuel prices will rise as the economy recovers leading to long-term losses, surplus capacity and fewer aircraft orders.

Five Year Lag: Based on the historical trend from every single previous cycle, aircraft deliveries bottom out around the point where GDP and traffic growth peak. (Evolution Securities).

Aerospace lag: The aerospace "lag" comes from the five-year gap between ordering an aircraft and having it delivered. (Nick Cunningham, an analyst with Evolution Securities)

SIA and Airbus reached an agreement to delay the delivery of eight A380s as much as one year

SIA operates nine A380s, with two more due for delivery in the fiscal year ending March 31, 2010.

Singapore Airlines (SIA) lost $210Bn in its fiscal Q1 ended June 30, its first loss since 2003. It cut capacity by 13.7% including three B747-400s during the quarter.

China Eastern Airlines and smaller Shanghai Airlines began talks on merging in June 2008 that would give China Eastern a 50% market share in Shanghai.

The Chinese government ordered China Eastern and Shanghai Airlines to consolidate.

China Eastern and Shanghai Airlines loss-making carriers.

After years of double-digit growth, China's airlines are facing rising costs and declining revenues as the global financial crisis continues.

China's top three carriers, Air China, China Eastern and China Southern Airlines, lost more than $4Bn in 2008.

Shanghai Airlines lost money for two straight years since 2007 faced being delisted from the stock exchange if it fails to turn around in 2009.

Austrian-Lufthansa merger is completed as Lufthansa considers the sale of its share in BMI. BA and Virgin Atlantic are considered to be potential buyers.

Consumer spending accounts for 70 percent of U.S. economic activity.

Consumers cut back their credit in July by $21.6Bn from June, the most on record in the USA dating to 1943. Economists expected credit to drop by $4Bn

ILFC Chairman Steven Udvar-Hazy may be preparing to leave the company he co-founded and later sold to AIG & start a new leasing venture with Greenbriar Equity Group and Onex Partners.

The Royal Bank of Scotland (RBS) has appointed Goldman Sachs to look at options for the possible sale of RBS Aviation Capital.

RBS Aviation Capital has assets of around $12Bn of which the aviation assets have a book value of $8Bn.

RBS Aviation Capital is one of the top five global aircraft lessors including ILFC (For sale), GECAS, AerCap, and CIT (For sale).

RBS, now government owned, is looking to sell-off assets to pay back the UK government and regain its independent status

Royal Bank of Scotland (RBS) may sell RBS Aviation Capital, Royal bank, Coutts & Co and NatWest.

Dubai Civil Aviation Authority bond, or Dubai Global Sukuk, matures on November 4.

Dubai Civil Aviation Authority: Dubai faces a crucial test of its credit worthiness with the maturity in November of a $1 billion sovereign sukuk, or Islamic bond, issued by DCAA.

Boeing expects to deliver up to 485 jets in 2009 vs. 375 in 2008

Boeing: Orders for commercial aircraft fell 11% in August deliveries fell by 22% 

US Major airlines reported declining traffic in August as rising unemployment hurt leisure demand and corporate cost cuts continued to hamper business travel

FAA investigation centered on repairs to the rear bulkhead of the MD80 series aircraft.

FAA investigating American Airlines over structural repairs to its aging fleet of MD80s

American has 270 MD80s representing 44% of its fleet.

Boeing claims Airbus got USD$205Bn from France, Germany, Spain, and Britain over 20 years. Airbus claims Boeing got $24Bn.

WTO decision on A380/A320 subsidies could push the $35Bn US Air Force aerial refueling tanker contract towards Boeing.

Airbus and Boeing are also disputing A350 subsidies. So far, $4Bn in subsidized funding has been provided to enable the aircraft to compete with the B787. 

Airbus will have to refinance the subsidized loans at commercial rates. Repayments are currently made as A380s are delivered to customers. 

A380 reimbursable investment loans were not found to be prohibited in their totality.

Airbus through the European Union has a counter claim that is being reviewed by a separate WTO panel and a decision is due by mid-2010. 

A380 ($13Bn), A320 ($8Bn) launch aid subsidies abused global trade rules according to the World Trade Organization (WTO).

Losses: From 2001 through 2008, U.S. passenger and cargo airlines reported a cumulative deficit of $55 billion, add on 2009 projections and the loss reaches $65Bn

A350: EU governments will subsidize the A350 even if a WTO decision finds previous aid to Airbus was illegal.

A350: European Commission says that any support for the A350 has no relation to current WTO litigation dealing with previous Airbus models.

A318: The British Airways A318 to be operated on the London City to New York route is a modified A318 with 'steep approach' capability & will carry 32 pax.

B787: Boeing is taking another $2.5Bn charge for the program because some of its test-flight aircraft need more repairs and will not find buyers.

B787 could be affected by structural issues as engineers complete the design for the reinforcements of sections along the top of the wing.

A320F: United Aircraft (UAC) may select a construction site other than Moscow for a planned A320-family freighter conversion facility.

Gulfstream has limited the effects of a global recession by diversifying its customers, adding clients outside the U.S., and moving from public corporations to more private companies and individuals.

More than half of new Gulfstream jet orders are coming from outside North America, and the company’s jet backlog of orders is almost $20Bn.

The company will get a lift as it begins shipping new models, the G250 and G650, in 2011 & 2012.

Gulfstream will see margin growth, increased sales & order book that is going to be ever more robust as the industry comes out of the challenges it’s got right now

General Dynamics, had total sales of $29.3Bn in 2008, including $5.5Bn from the aerospace unit that makes Gulfstream jets.

General Dynamics shares dropped 37% in the past 12 months.

FAA issued a Notice of Proposed Rulemaking (NPRM) that would amend FAR Part 23 certification standards for light jet aircraft.

EU standard body recognizes IS-BAO as an industry standard for business aircraft operations in Europe.

AOPA, almost 15M of the 22M flight hours for general aviation in 2008 were generated through business activity.

Iberia grounds A320s, defers A340-600 after reporting a Q2 loss, bringing its full-year capacity reduction to 6% up from 4.3% previously.

ILFC:Unable to sell ILFC, owner AIG may break up the company as its CEO bids for a $2Bn package of aircraft from the leasing portfolio.

Cerberus: Parent of major lessor Aercap is to raise new hedge funds as investors withdraw $4.8Bn due to poor performance.

Aerolineas Argentinas: Bondholders with a judgment against the Argentinean government failed to win court approval to gain control of the assets of the state-run airline. 

Aerolineas Argentinas:  US courts told bondholders with a $2.2Bn judgment against Argentina there is no evidence that Aerolineas acted as agent for the government.

Argentina default: Bondholders went to court to foreclose on state owned assets. [Seijas v. Argentina 04-cv-400, U.S. District Court, Southern District of New York (Manhattan)].

Argentina defaulted on $95Bn in debt in late 2001.

Aer Lingus has $620M in net cash on its balance sheet, burns though $560M annually as its stock price falls below a dollar.

Garuda Indonesia, intends to raise up to $400M from an initial public offering (IPO) in the first half of 2010.

East Star Airlines, a privately owned Chinese airline, has declared bankruptcy, the first Chinese airline to do so. Total debts are $110M

B787 will fly by year’s end as the project overcomes parts shortages, production delays, and structural weaknesses.

A350: Boeing disclosed that a WTO panel is due to rule on whether European governments should reconsider plans to help finance the A350.

Hawker Beechcraft Corp: The Wichita-based business jet company has laid off 2,800 workers

AAR reports that results for Q1, ending August 31, 2009, will be below its expectations due to lower sales and gross margin as airlines reduce inventory levels and maintenance visits.

Federal Reserve is asserting that the prospects for a return to economic growth in the near term appear good and that the recession is ending.

Economic recovery:  France, Germany, and Japan reported positive economic growth, an unexpected rebound from their own recessions.

Retailers are reporting unexpectedly weak sales — a sign that that consumer spending could drag down economic growth in the near term

Unemployment: The U.S. Labor Department reported that new unemployment claims jumped again.

Capital requirements: The Fed warned that regulators will have to impose tougher capital requirements on major financial institutions to ensure that they withstand a future cash crunch.

Traffic: First & business class seat bookings fell 21.3% in June vs. 23.6% in May.

Traffic: Economy seat bookings fell by 5.5% in June vs. 7.6% in May. 

Traffic: Year-on-year falls in air passenger numbers dropped to 7.1% in June vs. 9.2% drop in May.

Revenue (Premium): Airline premium travel revenue fell 33% in Q1, 41% in Q2, and 40% in June

Revenue (USA): ATA reports that US airlines' July passenger revenue fell 21% vs. July 2008, the ninth consecutive month of year-over-year decline.

Revenue (Cargo traffic): U.S. Cargo revenue ton-miles fell 15% in June, the 11th consecutive month of declining volumes.

Business-class traffic will not recover before 2010 despite the outlook for an economic recovery according to a report by the research arm of UBS.

Business travelers pay a premium for higher-class seats and schedule flexibility and account for 25% of airline traffic. 

Passengers & price: 4% fewer passengers traveled on U.S. airlines in July as the average price to fly one mile fell 18% on domestic, trans-Atlantic, trans-Pacific and south  American markets.

Passengers poaching: Reports suggest that low cost carriers have succeeded in poaching market share from full-service competitors.

IATA view: Debt-laden consumers will curtail spending even after the recession ends & the speed of the recovery is going to be a lot slower than in the past.

B787 delivery schedule: With 850 orders on hand Boeing plans to deliver 10 B787s a month by the end of 2013.

B787 orders: Customers cancelled 41 B787 orders but Boeing won 13 new orders for the 787 between April and June.

B787 cost: Boeing estimated that the first three test aircraft, which have no commercial value, to be $2.5Bn.

B787 profile: First unveiled in July 2007 as Boeing first all-new commercial aircraft since 1995. The structure uses carbon fiber to make it lighter and more fuel-efficient than aircraft built with aluminum.

B787 flight-testing was cancelled in June, the fifth time the launch had been put back.

B787 first flight will take place by the end of 2009; 2 years behind schedule & delivery to the first customer, ANA will take place in late 2010.