Outbreak of the coronavirus disease (COVID-19) in Renton, Washington
PARIS (Reuters) – Safran <SAF.PA> shares rose on Thursday after Boeing <BA.N> said it would restart production of its 737 MAX jet and announced further cost-cutting measures.
Shares in the French aerospace firm, which co-produces the 737 MAX’s engines with General Electric <GE.N>, were up 2.2%, while Airbus <AIR.PA> shares were 0.7% higher.
Boeing said on Wednesday it was eliminating more than 12,000 U.S. jobs, including 6,770 involuntary layoffs, as the largest American planemaker restructures in the face of the coronavirus pandemic. The move nevertheless lifted Boeing’s shares.
The U.S. rival to Airbus said it had restarted 737 MAX production at a “low rate” at its Renton, Washington factory. Reuters reported in April that regulatory approval for the MAX was not expected until at least August.
(Reporting by Sudip Kar-Gupta; Editing by David Goodman and Alexander Smith)
The Safran company logo is pictured at the company’s logistic area in Colomiers near Toulouse
Boeing (NYSE: BA) announced today that it has terminated its Master Transaction Agreement (MTA) with Embraer, under which the two companies sought to establish a new level of strategic partnership. The parties had planned to create a joint venture comprising Embraer’s commercial aviation business and a second joint venture to develop new markets for the C-390 Millennium medium airlift and air mobility aircraft.
Under the MTA, April 24, 2020, was the initial termination date, subject to extension by either party if certain conditions were met. Boeing exercised its rights to terminate after Embraer did not satisfy the necessary conditions.
“Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn’t happen,” said Marc Allen, president of Embraer Partnership & Group Operations. “It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues.”
The planned partnership between Boeing and Embraer had received unconditional approval from all necessary regulatory authorities, with the exception of the European Commission.
Boeing and Embraer will maintain their existing Master Teaming Agreement, originally signed in 2012 and expanded in 2016, to jointly market and support the C-390 Millennium military aircraft.
Since the COVID-19 outbreak began, Emirates and dnata have been adapting operations in line with regulatory directives as well as travel demand.
The airline has aimed to maintain passenger flights for as long as feasible to help travellers return home amidst an increasing number of travel bans, restrictions, and country lockdowns across the world. It continues to maintain vital international air cargo links for economies and communities, deploying its fleet of 777 freighters for the transport of essential goods including medical supplies across the world.
With many of its airline customers dramatically reducing flights or ceasing services altogether, dnata has also significantly reduced its operations, including temporarily shutting some offices across its international network.
HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group said: “The world has literally gone into quarantine due to the COVID-19 outbreak. This is an unprecedented crisis situation in terms of breadth and scale: geographically, as well as from a health, social, and economic standpoint. Until January 2020, the Emirates Group was doing well against our current financial year targets. But COVID-19 has brought all that to a sudden and painful halt over the past 6 weeks.
“As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries re-open their borders, and travel confidence returns. By Wednesday 25 March, although we will still operate cargo flights which remain busy, Emirates will have temporarily suspended most of its passenger operations. We continue to watch the situation closely, and as soon as things allow, we will reinstate our services.”
Having received requests from governments and customers to support the repatriation of travellers, Emirates will continue to operate passenger and cargo flights to the following countries and territories until further notice, as long as borders remain open, and there is demand: the UK, Switzerland, Hong Kong, Thailand, Malaysia, Philippines, Japan, Singapore, South Korea, Australia, South Africa, USA, and Canada. The situation remains dynamic, and travellers can check flight status on emirates.com.
Sheikh Ahmed added: “Emirates Group has a strong balance sheet, and substantial cash liquidity, and we can, and will, with appropriate and timely action, survive through a prolonged period of reduced flight schedules, so that we are adequately prepared for the return to normality.”
Cost reduction measures
The Emirates Group has undertaken a series of measures to contain costs, as the outlook for travel demand remains weak across markets in the short to medium term. This includes:
Postponing or cancelling discretionary expenditure
A freeze on all non-essential recruitment and consultancy work
Working with suppliers to find cost savings and efficiency
Encouraging employees to take paid or unpaid leave in light of reduced flying capacity
A temporary reduction of basic salary for the majority of Emirates Group employees for three months, ranging from 25% to 50%. Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction
Presidents of Emirates and dnata – Sir Tim Clark and Gary Chapman – will take a 100% basic salary cut for three months
The Emirates Group has strong liquidity, with a healthy cash position but it is prudent that it take steps to reduce costs at this time. Emirates remains committed to serving its markets and looks forward to resuming a normal flight schedule as soon as that is permitted by the relevant authorities.
Safeguarding customers, employees, and communities
Emirates Group closely monitors the situation and keeps in regular contact with all relevant authorities, so that it can implement the latest guidance to keep travellers and its employees safe and healthy.
The company has strongly discouraged its employees from non-essential travel, implemented work from home policies for all employees where operationally feasible, enhanced cleaning and disinfection protocols at its facilities, introduced temperature screening at its key office entry points, and launched internal educational campaigns on hand hygiene and health practices to reduce risk of COVID-19.
Over the past weeks, the airline has also implemented enhanced cleaning and disinfecting measures on all of its aircraft departing Dubai as a precaution, and worked closely with airports to implement screening measures as required by the local authorities.
Frontline employees such as crew and airport teams have also been provided with support to stay safe while on duty, including providing hand sanitizers and masks where required.
The Emirates Group fully supports all initiatives to safeguard the health of communities in every market where it operates, including the UAE’s national COVID-19 response.
(Reuters) – An AirBaltic A220 flight diverted to France on Wednesday because of an engine issue is the fourth reported case involving the Pratt & Whitney engine powering the Airbus jet, the U.S. National Transportation Safety Board (NTSB) said.
The A220-300 flight, traveling from Riga, Latvia, to Malaga, Spain, was diverted to Bordeaux because of a technical failure in the left engine, France’s Bureau d’Enquêtes et ‘Analyses (BEA) said on Twitter. The flight landed safely.
Airbus SE and United Technologies Corp, maker of the Pratt PW1500G engines, confirmed in statements that they were aware of the flight and working “to provide assistance” as required.
The incident follows three emergency landings involving the GTF engine on Airbus’s smallest jet, the A220.
“NTSB has accepted delegation for 3 previous incidents so NTSB will also look at the most recent incident,” a spokesman for the U.S. government investigative agency said by email.
“NTSB is in the process of gathering initial data. It is still in the early stage of any investigation cannot make any conclusions at this time.”
Pratt & Whitney has said that a software update for the GTF engine on the A220 is expected in the spring, pending regulatory approval.
(Reporting by Allison Lampert Editing by Leslie Adler)
Volkswagen logo is seen on a Teramont X SUV displayed at the second media day for the Shanghai auto show in Shanghai
HONG KONG/BEIJING (Reuters) – Volkswagen AG <VWAGY> is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd, two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.
The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.
The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalization of $2.8 billion, a 20% stake in the company at present is worth about $560 million.
The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.
After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.
Guoxuan is among a swathe of mid-tier Chinese battery makers behind CATL and BYD. It is based in China’s eastern city of Hefei, where Volkswagen is also building electric vehicles with JAC Motor, one of a number of its Chinese joint venture partners.
A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain.
Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to requests for comment.
To achieve its NEV sales goal in China, Volkswagen has built a new $2.5 billion electric vehicle plant with partner SAIC Motor that will have annual output capacity of 300,000 cars and is also revamping manufacturing facilities in China’s southeastern city of Foshan to build electric cars with partner FAW Group.
Volkswagen has also identified CATL as a strategic supplier and Volkswagen board member Stefan Sommer told Reuters in July last year that it could even build its own battery cell manufacturing plants in China.
“By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”
Volkswagen’s rivals in China include Tesla, which earlier this month began delivering cars from its $2 billion factory in China. The U.S. electric car maker eventually plans to manufacture 250,000 vehicles a year in the plant’s first phase.
China has been a keen supporter of NEV – pure battery electric, hybrid and plug-in hybrids – and has started implementing NEV sales quota requirements for automakers.
However, cuts to subsidies have dealt the market a blow, with NEV sales contracting for the first time last year. Sales this year are likely to be flat or rise only slightly, according to China’s top auto industry association.
(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Zhang Yan and Zhang Xiaochong in Beijing; Editing by Brenda Goh and Richard Pullin)
Delta Air Lines has successfully acquired a 20 percent equity stake in LATAM Airlines Group S.A for approximately $1.9 billion.
Delta Air Lines has successfully completed its previously announced tender offer and has acquired a 20 percent equity stake in LATAM Airlines Group S.A for approximately $1.9 billion, an important milestone toward bringing together the leading airlines in North and South America. This investment continues Delta’s strategy of making equity investments in key airline partners around the globe.
“We look forward to working with LATAM to create a truly world-class partnership that will give our customers unparalleled access throughout the Americas,” said Steve Sear, Delta President — International and Executive Vice President — Global Sales. “Equity investments like this help create alignment within our partnerships as we bring together our brands, enabling us to provide the very best service and reliability for our shared customers.”
In September, Delta and LATAM announced a strategic partnership, including the now completed 20 percent equity investment and also a commercial joint venture. Once fully implemented, this partnership will unlock growth opportunities for both airlines and offer significantly expanded travel options for customers, with access to 435 destinations worldwide.
Most recently, the carriers announced that they will initially launch codesharing for flights operated by certain LATAM affiliates in Colombia, Ecuador and Peru beginning in the first quarter of 2020. The codeshare will offer customers increased connectivity between up to 74 onward destinations in the United States and up to 51 onward destinations in South America.
The enhanced cooperation and codeshare agreements are subject to governmental and regulatory approvals.
BEIJING (Reuters) – The sixth prototype of China’s home-built C919 narrowbody passenger plane completed its first test flight on Friday, marking a milestone in the programme’s testing schedule as China races to compete with Airbus SE and Boeing Co.
The sixth prototype is the last test plane its manufacturer, the Commercial Aircraft Corp of China Ltd (COMAC), has planned for the programme and was scheduled to fly before the year-end. Currently, there are five test planes that are conducting test flights elsewhere in the country.
The maiden flight on Friday from Shanghai lasted two hours and five minutes, COMAC said in a press release, adding that the jet will be conducting more test flights with a focus on cabin, lighting and external noises.
COMAC has already started production of aircraft parts which will be used for the first batch of aircraft deliveries, it said.
The state manufacturer is aiming to obtain Chinese certification for the C919 in 2021, but the date was subject to regulatory approval and the aircraft’s safety remains a top priority, according to COMAC officials.
He Dongfeng, the Communist Party boss of COMAC, wrote in a state-owned newspaper in December that aircraft safety is key to the survival of COMAC.
Designed to compete directly with the Airbus 320 and the Boeing 737 families in the market for jets with around 150 seats, the C919 is the speartip of China’s efforts to break a powerful decades-old Western duopoly.
The Boeing 737 MAX remains globally grounded following two fatal crashes that killed a total of 346 people.
(Reporting by Stella Qiu and Brenda Goh; Editing by Muralikumar Anantharaman)
Boeing suspends 737 MAX production starting in January due to certification in 2020
Reduced production output enables prioritization of stored aircraft delivery
No layoffs or furlough expected at this time
Safely returning the 737 MAX to service is our top priority. We know that the process of approving the 737 MAX’s return to service, and of determining appropriate training requirements, must be extraordinarily thorough and robust, to ensure that our regulators, customers, and the flying public have confidence in the 737 MAX updates. As we have previously said, the FAA and global regulatory authorities determine the timeline for certification and return to service. We remain fully committed to supporting this process. It is our duty to ensure that every requirement is fulfilled, and every question from our regulators answered.
Throughout the grounding of the 737 MAX, Boeing has continued to build new airplanes and there are now approximately 400 airplanes in storage. We have previously stated that we would continually evaluate our production plans should the MAX grounding continue longer than we expected. As a result of this ongoing evaluation, we have decided to prioritize the delivery of stored aircraft and temporarily suspend production on the 737 program beginning next month.
We believe this decision is least disruptive to maintaining long-term production system and supply chain health. This decision is driven by a number of factors, including the extension of certification into 2020, the uncertainty about the timing and conditions of return to service and global training approvals, and the importance of ensuring that we can prioritize the delivery of stored aircraft. We will continue to assess our progress towards return to service milestones and make determinations about resuming production and deliveries accordingly.
During this time, it is our plan that affected employees will continue 737-related work, or be temporarily assigned to other teams in Puget Sound. As we have throughout the 737 MAX grounding, we will keep our customers, employees, and supply chain top of mind as we continue to assess appropriate actions. This will include efforts to sustain the gains in production system and supply chain quality and health made over the last many months.
We will provide financial information regarding the production suspension in connection with our 4Q19 earnings release in late January.
BRUSSELS, Dec 5 (Reuters) – An association representing minority investors in Brazil is lobbying European antitrust regulators to spike a deal between planemakers Embraer SA and Boeing Co, calling it a killer acquisition.
Aurelio Valporto, the head of minority investor association Abradin, said the European Commission should block Boeing’s proposed $4.2 billion purchase of 80% Embraer’s commercial passenger jet division or demand hefty concessions.
“What will be left from Embraer won’t survive, and even if it was possible to survive, Embraer wouldn’t be able to produce any aircraft with 50 passengers or more,” Valporto said in an interview late on Wednesday, arguing that Embraer and Boeing planes compete in the marketplace.
Embraer’s commercial jet division focuses on the 70 to 150-seat segment, competing directly with the CSeries jets designed by Bombardier Inc, a division that was bought by Europe’s Airbus SE.
Boeing aims to take control of Embraer’s commercial jet business, its most profitable, to compete directly with Airbus in the market for planes with fewer than 150 seats.
Embraer said in a statement on Thursday that the deal will “serve the interests of shareholders by enabling Embraer to expand markets and increase sales.” The deal was backed by around 97% of Embraer’s shareholders earlier this year.
Valporto complained about the deal to the European Commission two months ago, saying it hurt competition in the Brazilian aerospace industry, and on Wednesday took his grievance to antitrust officials in Brasilia.
The deal has already been approved by regulators in the United States, China and Japan. If it closes, Embraer will receive dividends from its remaining 20% stake in the commercial jet business, but will have to rely more heavily on its business jets and defense divisions to turn a profit. Those two divisions have posted losses in recent quarters.
The European Commission, which launched a full-scale investigation into the deal in October, declined to comment.
Boeing said it and Embraer had been engaged with the European Commission and other global regulatory authorities since late last year.
“We continue to co-operate with the European Commission and CADE as they assess our transaction and look forward to a positive resolution,” a spokesman for the company said.
The EU has voiced concerns the deal would remove Embraer, the world’s third-largest commercial aircraft maker, from the industry, an indication that it may demand significant concessions from Boeing.
The EU regulator halted its investigation last month while waiting for Boeing to submit data on the deal.
(Reporting by Foo Yun Chee in Brussels Additional reporting by Marcelo Rochabrun in Sao Paulo Editing by Kirsten Donovan and Matthew Lewis)
– Features night-vision goggle compatibility, Head-Up Displays and Synthetic Vision for mission success
– Advanced human-machine interface will reduce pilot workload
– Touch-screen capabilities to increase ease of operation
DUBAI, United Arab Emirates, Nov. 16, 2019 /PRNewswire/ — Airbus’ new C295 tactical aircraft will come equipped with Collins Aerospace System’s state-of-the-art Pro Line Fusion™ flight deck, significantly advancing the capabilities of C295 operators. The selection marks the first fixed-wing search and rescue platform to include Pro Line Fusion among its standard equipment. Collins Aerospace is a unit of United Technologies Corp.
The Pro Line Fusion flight deck designed for the C295 includes key features to help operators during search and rescue, and other tactical missions, being equipped with:
Four 14.1-inch (35.8 cm) touchscreen displays to provide a more intuitive interface for pilots to interact and customize their information on the flight deck
Night-vision goggle capability to help ensure successful missions in low light conditions
Head-Up Displays that enable the pilot to keep their eyes up for enhanced situational awareness
Enhanced Vision System (EVS) sensor that allows pilots to see through low-visibility conditions
Overlaid weather radar that shows a graphical depiction of weather along the flight plan for easy viewing
Integrated Terrain Awareness and Warning System that enables high-resolution 3D obstacle depiction and enhances mission safety
Fully integrated Mission Flight Management Systems supporting Search and Rescue patterns, Computed Air Release Points and High Altitude Release Points
In addition, the flight deck was designed to meet evolving airspace and regulatory requirements, future-proofing it for years to come.
“This flight deck implementation is a great example of how Collins Aerospace is able to apply the latest commercial avionics technology and integrate it with military functions and capabilities to create the perfect fit for our customers,” said Dave Schreck, vice president and general manager for Military Avionics and Helicopters at Collins Aerospace. “Our Pro Line Fusion integrated avionics system will reduce pilot workload and increase ease of operation for all future C295 operators.”
Canada’s Royal Canadian Air Force (RCAF) will serve as the launch customer for the C295 with the first delivery expected before the end of the year.
