Tag: Costs (Page 4 of 4)

Czech Republic Signs Letter of Offer and Acceptance for Mixed Fleet of AH-1Z and UH-1Y

December 14, 2019 / WIL BALDWIN

Czech Republic becomes first international customer to purchase mixed fleet of H-1 aircraft

WASHINGTON D.C. (Dec. 13, 2019) – The U.S. Secretary of Defense, Mark Esper, and Czech Republic Minister of Defence, Lubomir Metnar, signed a Letter of Offer and Acceptance finalizing the foreign military sale by Bell Textron Inc., a Textron Inc. (TXT) company, of H-1 helicopters to the Czech Air Force.

“We are privileged to support the Czech people and applaud the Ministry of Defence and Armed Forces of the Czech Republic for selecting AH-1Z and UH-1Y helicopters.” said Vince Tobin, Executive Vice President of Bell’s Military Business.

The H-1 mixed fleet shares 85-percent commonality between parts, reducing the logistics, maintenance, and training costs of the AH-1Z and UY-1Y helicopters while offering a lethal combination of integrated weapons systems to counter ground, air, and maritime targets effectively. The AH-1Z is the only helicopter in production equipped with the AIM-9 Sidewinder providing the most advanced air-to-air combat capabilities.

“This mix allows the Czech Republic to accomplish a diverse mission set, from humanitarian assistance and disaster relief to close air support and air-to-air warfare,” said Joel Best, Director of Military Sales and Strategy, Europe. “The advanced capabilities of the H-1 program help ensure the safety and security of Czech sons and daughters for years to come.”

The purchase of four AH-1Z and eight UH-1Y military helicopters represents the first foreign military sale of a mixed H-1 fleet. Bell anticipates the delivery of the first H-1 aircraft to the Czech Republic will begin in 2023 and complete delivery by 2024.

Daimler to Ax at Least 10,000 Jobs in Latest Car Industry Cuts

November 30, 2019 / WIL BALDWIN

FRANKFURT (Reuters) – Daimler said on Friday it will cut at least 10,000 jobs worldwide over the next three years, following others in the industry as they cut costs to invest in electric vehicles while grappling with weakening sales.

It marks the third announcement on cost cuts this week by a major German car company as automakers seek to fund huge investments into cleaner and self-driving technologies while demand in China, their biggest market, is falling and a trade war between Washington and Beijing is curbing economic growth.

“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said in a statement.

Daimler, the owner of Mercedes-Benz, revealed the 3% cut in its workforce after reaching an agreement on its plans with labor unions.

They have agreed on a variety of measures to cut costs and jobs, including expanding part-time retirement and a severance program to be offered in Germany. The company is also cutting 10% of worldwide management positions.

Staff reductions would be in the low five-digits, or at least 10,000 people, according to Wilfried Porth, a board member in charge of human resources. The company employed 304,680 staff at the end of the third quarter.

Plans laid out by Daimler in November showed the company aimed to cut staff costs by around 1.4 billion euros ($1.54 billion) by the end of 2022.

The announcement comes days after Volkswagen’s <VOWG_p.DE> luxury car unit Audi said it would cut up to 9,500 jobs or one in ten staff by 2025, freeing up billions of euros to fund its shift toward electric vehicle production.

Also this week, BMW said that its management and labor had reached an agreement on measures to reduce bonus and other pay schemes for staff to cut costs.

Car suppliers Continental and Osram have also announced staff and cost cuts.

Daimler has repeatedly cut its profit outlook over recent months, partly to cover a regulatory crackdown on diesel emissions but also because of a slowing auto market.

Group operating profit will be “significantly lower” than a year ago, the company said last month.

Other measures to reduce staffing costs include offering shorter working weeks.

Agreements in place to prevent forced redundancies in Germany until 2029 will remain in place, Daimler said.

The workforce needs a clear strategy for the future, said Michael Brecht, chairman of Daimler’s works council. “A reduction in capacity must not be carried out on the backs of the employees,” he said.

(Editing by Elaine Hardcastle)

The Daimler logo is seen before the Daimler annual shareholder meeting in Berlin

Emirates Airlines Orders 50 A350XWB at Dubai Airshow 2019

November 18, 2019 / WIL BALDWIN

Airbus and Emirates Airline have signed a purchase agreement for 50 A350-900s – Airbus’ newest generation widebody aircraft.

The order was signed at Dubai Airshow 2019 by His Highness Sheikh Ahmed bin Saeed Al Maktoum and Guillaume Faury, Airbus Chief Executive Officer.

HH Sheikh Ahmed said: “Today, we are pleased to sign a firm order for 50 A350 XWB’s, powered by Rolls-Royce Trent XWB engines. This follows a thorough review of various aircraft options and of our own fleet plans. It is Emirates’ long-standing strategy to invest in modern and efficient aircraft, and we are confident in the performance of the A350 XWB.

“Complementing our A380’s and 777’s, the A350’s will give us added operational flexibility in terms of capacity, range and deployment. In effect, we are strengthening our business model to provide efficient and comfortable air transport services to, and through, our Dubai hub.”

Sheikh Ahmed added: “This deal reflects our confidence in the future of the UAE’s aviation sector, and is a strong affirmation of Dubai’s strategy to be a global nexus connected to cities, communities and economies via a world-class and modern aviation sector.”

“We are honoured by Emirates’ strong vote of confidence in our newest widebody aircraft, taking our partnership to the next level. The A350 will bring unbeatable economics and environmental benefits to their fleet,” said Guillaume Faury, Airbus Chief Executive Officer. “We look forward to seeing the A350 flying in Emirates colours!”

The A350 XWB offers by design unrivalled operational flexibility and efficiency for all market segments – up to ultra-long haul (17,900km). Its Airspace by Airbus cabin is the quietest of any twin-aisle aircraft and offers passengers and crews the most modern in-flight flying experience. The aircraft features the latest aerodynamic design, a carbon fibre fuselage and wings, plus new fuel-efficient Rolls-Royce Trent XWB engines. Together, these latest technologies result in 25% lower operating costs, as well as 25% reduction in fuel burn and CO2 emissions compared with previous-generation competing aircraft – demonstrating Airbus’ commitment to minimise its environmental impact while remaining at the cutting edge of air travel.

Aircraft Lessor Aircastle to be Bought in $2.4 Billion Deal

November 6, 2019 / WIL BALDWIN

Nov 6 (Reuters) – Aircastle Ltd said on Wednesday Japan’s Marubeni Corp and Mizuho Leasing Co Ltd had offered to buy the aircraft lessor in a deal valued at $2.4 billion, ending a nearly two-week long strategic review of its business.

Shares of the company rose 16% to trade in line with the offer price of $32 per share. Marubeni, the company’s largest shareholder, has a 29% stake in Aircastle as of Oct. 23 that is currently valued at about $600 million.

Aircastle, which owned and managed 277 aircraft in 48 countries as of Sept. 30, counts American Airlines, Southwest Airlines and United Airlines among its customers.

Airline bankruptcies have increased this year at the fastest ever rate, led by the collapse of India’s Jet Airways, British travel group Thomas Cook and Avianca of Brazil, adding pressure on aircraft leasing companies.

Fitch Ratings said in September that it expects the sector to worsen in the medium term with a potential rise in airline bankruptcies, further aircraft repossessions and increased financing costs. (http://bit.ly/2qrjaG5)

The deal, which is valued at $7.4 billion including debt, is expected to close in the first half of 2020, Aircastle said.

Citigroup Global Markets Inc will serve as financial adviser to Aircastle.

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shinjini Ganguli and Anil D’Silva)

Bane NOR and Siemens Mobility Celebrate Milestone in Digitalization of Norway’s Rail Network

November 2, 2019 / WIL BALDWIN

Campus Nyland test, training and signaling simulation center opens
European Rail Traffic Management System (ERTMS) latest in intelligent infrastructure
Nordlandsbanen will open first digital signaling railway in October 2022

Bane NOR and Siemens Mobility celebrated the opening of Campus Nyland, a test, training and signaling simulation center which will help the rail network operator prepare for the digitalization of the entire system. Norway has committed to becoming the first country to operate with a single digital interlocking and ERTMS signifies one of the country’s largest digitalization projects. In 2022, the first digital line, Nordlandsbanen, will open. In advance, the Campus Nyland center will prepare workers for working within the digital system, ERTMS. The intelligent infrastructure behind ERTMS will reduce operating costs and increase capacity throughout the network. In addition, it will enhance safety, with real-time visibility of trains across the network. When complete in 2034, the system will include 4,200 km of track and more than 350 stations.

“Siemens Mobility is the main supplier to the Norwegian ERTMS program with their infrastructure, including interlockings and radio block centres (RBC). The Siemens Mobility solution is leading edge based upon an IP based architecture. With a strong technical roadmap and a proven ability to deliver, Siemens Mobility is the ideal partner for Bane NOR in this challenging program. We are thrilled to work together with Siemens Mobility to develop the digital rail,” said Sverre Kjenne, Executive Vice President Digitalisation and Technology, Bane NOR.

“Norway is on track to become the first country to operate in the “one country, one interlocking” architecture making it at the forefront of digitalization. Our intelligent infrastructure will ensure that the system operates efficiently. The digital interlocking, with IP controlled field components, and ERTMS are the backbone to greatly improving operations and maintenance. This architecture also opens the door for future developments such as implementing driverless technologies, moving the interlocking to the cloud, which would make proprietary hardware and spare parts a relic of the past, and would make data instantaneously available to transportation operators,” stated Michael Peter, Siemens Mobility CEO. “Campus Nyland is an important milestone in turning this vision into reality.”

Campus Nyland will be an industry center for digital education and will house more than 5,000 employees, who will learn the necessary digital skills needed to ensure ERTMS is successful when it goes operational. These will include individuals from Bane NOR, train companies, maintenance companies and contractors. Bane NOR will facilitate simulator training as well as physical training facilities. New technology, such as virtual reality, will be used to communicate how the tracks are built with ERTMS, as well as the design of trains and traffic control centers. More than 150 different scenarios are available for training within the highly digital training hub.

In the spring of 2020, the Roa – Hønefoss ERTMS test line opens. The new signaling technology will be monitored and tested from Campus Nyland.

The next important milestone in turning ERTMS into a reality will be the digitalization of the first Norwegian rail line. In October 2022, Nordlandsbanen, which operates from Grong to Bodø, and represents about 12 percent of the Norwegian railway will go operational.

United Lifts 2019 Profit Target on Strong Travel Demand

October 15, 2019 / WIL BALDWIN

Oct 15 (Reuters) – United Airlines on Tuesday topped Wall Street estimates for quarterly profit, boosted by higher fares and lower fuel costs, and lifted its 2019 profit target despite the continued grounding of the Boeing 737 MAX.

Chicago-based United is one of three U.S. airlines that have each had to cancel more than 2,000 monthly flights through the end of the year as Boeing Co’s 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia.

The flight cancellations have weighed on airline profits and costs, but strong travel demand, despite concerns of a global economic slowdown, continued to offset MAX headwinds and disruption in Hong Kong and China.

As a result, United raised its 2019 adjusted diluted earnings per share guidance to $11.25-$12.25 versus $10.50-$12.00 previously.

United shares, which closed up 1% at $87.88 before the earnings release, were about 1% higher in after-hours trading.

Total operating revenue rose 3.4% to $11.38 billion, underpinned by the airline’s three-year strategy to build up flight connections through its main U.S. hubs.

But closely watched unit costs excluding fuel and profit-sharing expenses, a concern for investors, rose 2.1%.

The airline, which is in talks with Boeing over 737 MAX compensation, did not provide any details on the estimated financial impact of the grounding.

Adjusted net income rose to $1.05 billion, or $4.07 per share, in the third quarter, from $834 million or $3.05 per share a year earlier.

Analysts on average had forecast $3.95 per share, according to IBES data from Refinitiv.

United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EDT (1430 GMT).

Fellow U.S. MAX operators Southwest Airlines and American Airlines, which have both warned of a pretax profit hit from the MAX grounding, are due to report quarterly results next week.

United, Southwest and American are all scheduling without the MAX until early January.

(Reporting by Tracy Rucinski in Chicago and Sanjana Shivdas in Bengaluru Editing by Shinjini Ganguli and Matthew Lewis)

Air New Zealand Entices Walmart Boss Home to Lead Airline

October 11, 2019 / WIL BALDWIN

Greg Foran, president and CEO of Walmart U.S., smiles after speaking about the company’s Black Friday plans at a Walmart store in Secaucus, New Jersey

(Reuters) – Air New Zealand Ltd <ANZLY> named Walmart U.S. boss Greg Foran as its new chief executive on Friday, bringing him back home at a time the airline is trying to control costs in a lower-growth environment.

New Zealand-born Foran is credited with turning around Walmart Inc’s <WMT.N> U.S. business as its president and CEO since 2014, with the unit reporting 20 quarters of comparable sales growth under his leadership.

Air New Zealand Chairman Therese Walsh said the carrier was “thrilled to have attracted a world class Kiwi back home.”

“Greg has an impeccable track record in delivering strong commercial performance, outstanding customer focus and in building teams that can take a business to the next level,” Walsh said in a statement.

Grant Williamson, investment adviser at Hamilton Hindin Greene in Christchurch, said snagging Foran was a coup for the carrier.

“In the short term, it’s not going to have a major impact on earnings, there’s bigger things moving in the background like oil prices and global growth,” Williamson said. Air New Zealand shares were marginally higher at NZ$2.85 on Friday.

“But in terms of someone to have a steady hand on the wheel for Air New Zealand going forward, I don’t think they could do much better,” Williamson added.

Foran, who boosted Walmart’s sales by focusing on improving existing stores to keep costs and prices low, said he looked forward to building on Air New Zealand’s competitive advantage in customer focus and care.

The airline is known overseas for its quirky safety videos and consistently ranks highly in global airline customer surveys.

Foran will join Air New Zealand in the first quarter of next year, replacing Christopher Luxon who departed last month after seven years in the role. Luxon, a former Unilever executive, had also joined the airline after a career in fast-moving consumer goods.

During Luxon’s tenure, the carrier was recognised globally as an industry leader for its focus on innovation, environmental sustainability and diversity in hiring.

However, it has more recently faced challenges from a higher fuel bill and weak travel demand, leading the national carrier to report a 31% fall in annual profit in August.

Air New Zealand Chief Revenue Officer Cam Wallace, who had been an internal contender for the top job, according to sources with knowledge of the matter, welcomed the appointment on Twitter.

Foran will remain at Walmart until Jan. 31, when he will be replaced by the head of its Sam’s Club warehouse chain, John Furner.

“While we’ve been highly impressed with Mr. Furner’s work at Sam’s Club… he does admittedly have big shoes to fill,” said a note from Jefferies Group LLC <JEF.N>. “We can’t help but expect the market to react negatively to today’s news.”

(Reporting by Jamie Freed in Singapore and Devika Syamnath in Bengaluru, additional reporting by Nandita Bose in Washington; Editing by Sandra Maler and Jane Wardell)

Alitalia Rescuers to Ask for Another Delay

September 5, 2019 / WIL BALDWIN

MILAN, Sept 5 (Reuters) – Companies hoping to rescue Italian carrier Alitalia will ask for a deadline for presenting their plan to be extended as they are still negotiating key aspects, two sources familiar with the matter said.

Italian railway group Ferrovie dello Stato, which is leading an effort to take control of Alitalia, is expected to ask administrators running the carrier for a “substantial” delay to the Sept. 15 deadline, one of the sources said.

It would be the sixth delay since Ferrovie expressed its interest in investing in the carrier at the end of last year.

Ferrovie, infrastructure group Atlantia and U.S. carrier Delta Air Lines have been discussing a joint plan for Alitalia for nearly two months, but they are at odds over highly-profitable North American routes, three sources familiar with the matter said.

The Italian partners in the consortium want Alitalia to have more freedom to expand its North American routes compared to what Delta is currently offering under a new cooperation agreement dubbed Blue Skies that it has set up with Air France KLM and Britain’s Virgin Atlantic.

How Alitalia would share the revenue coming from North American routes with Delta and other partners in the Blue Skies alliance is also under negotiation.

“The role of Alitalia in the Blue Skies alliance is a point of contention,” one of the sources said.

Long-haul flights to the United States and Canada account for more than one third of Alitalia’s revenue and are considered key to reviving the Italian carrier, which was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans.

Administrators appointed by Italy’s government have cut costs and renegotiated plane leasing contracts to make Alitalia more efficient, but the carrier still burns cash and had been kept afloat thanks to a 900 million-euro bridging loan granted by Italy’s treasury.

Alitalia had only 410 million euro left in its coffers in July and would need fresh funds by the end of the year when it is expected to post a loss, according to another source.

Delta and Ferrovie declined to comment. (Additional reporting by Tracy Rucinski in Chicago Editing by Alexandra Hudson)

Boeing, China Airlines Finalize Order for Six 777 Freighters

September 4, 2019 / WIL BALDWIN

Carrier to modernize its freighter fleet with six of the world’s largest, most capable twin-engine freighters

SEATTLE, Sept. 4, 2019 /PRNewswire/ — China Airlines finalized its agreement with Boeing [NYSE: BA] to order six 777 Freighters to modernize its cargo fleet. The carrier, which currently operates one of the world’s largest 747 Freighter fleets, plans to transition to the largest and longest range twin-engine freighters in the industry as it launches operations from Taipei to North America, a key market that provides higher yields for the carrier.

Valued at $2.1 billion according to list prices, China Airlines had previously announced its intent to order up to six 777 Freighters at the Paris Air Show in June. Three of the six 777 Freighter orders were confirmed in July and posted to Boeing’s Orders and Deliveries website as an unidentified customer. The remaining three will post during the next update.

The versatile 777 Freighter can fly long-range trans-Pacific missions in excess of 6,000 nautical miles with 20 percent more payload than other large freighters like the 747-400F. The airplane, which is capable of carrying a maximum payload of 102 tons, will allow China Airlines to make fewer stops and reduce associated landing fees on these long-haul routes. As a result, it will provide China Airlines and other operators with the lowest trip cost of any large freighter and deliver superior ton-per-mile economics. In addition, the 777 Freighter features market-leading capacity for a twin-engine freighter, accommodating 27 standard pallets, measuring 96 inches by 125 inches (2.5 m x 3 m) on the main deck. This allows for lower cargo handling costs and shorter cargo delivery times.

“Air cargo is an important part of our overall business and the introduction of these new 777 Freighters will play an integral role in our long-term growth strategy,” said China Airlines Chairman Hsieh Su-Chien. “As we transition our freighter fleet to the 777Fs, this will enable us to deliver world-class services to our customers more efficiently and reliably.”

China Airlines, which marks its 60^th anniversary this year, currently operates 51 Boeing airplanes, including 10 777-300ERs (Extended Range), 19 Next-Generation 737s, four 747-400s and 18 747 Freighters.

“As China Airlines celebrates more than half a century of success, Boeing is honored to continue playing an integral role in its growth and expansion. With this order China Airlines will join an elite group of global air cargo operators operating new 777 Freighters,” said Ihssane Mounir, senior vice president of Commercial Sales and Marketing for The Boeing Company. “With the global air freight market forecasted to double over the next 20 years, the 777 Freighter’s market-leading capabilities and economics will help China Airlines extend their network and grow their future cargo business.”

The addition of 777 Freighters will enable the carrier to streamline maintenance and parts for its 777 fleet. The carrier uses a number of Boeing Global Services solutions to support its Boeing fleet operations, including Airplane Health Maintenance and Maintenance Performance Toolbox. These data-driven platforms track real-time airplane information, providing maintenance data and decision support tools that allow technicians to quickly and correctly resolve issues. On the ground and in the air, China Airline’s entire fleet uses Jeppesen FliteDeck Pro and access to digital navigation charts to optimize performance and enhance situational awareness.

Emirates Profit Hit by High Fuel Costs, Strong Dollar

May 9, 2019 / WIL BALDWIN

DUBAI (Reuters) – Emirates will “work smart and hard” to improve its performance after the Gulf airline’s profit hit a decade low as soaring fuel costs and a strong dollar took a toll on earnings, while passenger growth stalled.

After years of growth, during which it has become one of the world’s biggest airlines as other long-established national carriers have struggled, Dubai-based, state-owned Emirates warned last week profit would be lower than previous years.

It revealed just how badly it had fared on Thursday, reporting a 69 percent fall in net profit to 871 million dirhams ($237 million) in the year to March 31.

Meanwhile, the number of passengers flying Emirates rose 0.2 percent to 58.6 million, its weakest growth rate in at least 15 years, while cargo increased 1.4 percent to 2.7 million tonnes.

Chairman Sheikh Ahmed bin Saeed al-Maktoum said in a statement that the year had been “tough”, with higher oil prices, a strong dollar and stiffer competition, adding “our performance was not as strong as we would have liked”.

While revenue at the airline rose 6 percent to 97.9 billion dirhams, its profit fell to its lowest level since 2009. And profit at Emirates Group, which includes other units, fell 43.7 percent to 2.3 billions dirhams, its lowest since 2012.

Despite the profit fall, Emirates said it will pay the Investment Corporation of Dubai a dividend of 500 million dirhams for the year.

“SMART AND HARD”

Sheikh Ahmed said it was difficult to predict the year ahead but Emirates would “work smart and hard to tackle the challenges and take advantage of the opportunities.”

Unfavorable currency moves in key markets cost Emirates $156 million, while operating costs rose 8 percent with the airline recording its biggest ever fuel bill of 30.8 billion dirhams.

Emirates filled an average of 76.8 percent of passenger seats, slightly lower than the previous year, while increasing the number of available seats by 4 percent.

Fare increases helped Emirates register a 3 percent increase in passenger margin, despite it filling fewer seats.

The number of airline employees fell by 2,074, or 3.3 percent. Overall group workforce rose 1.9 percent to 105,286.

Emirates agreed with Airbus in February to cancel dozens of A380 orders and buy smaller A350’s and A330’s as the planemaker scrapped production of the world’s largest passenger jet.

Emirates, which will take 14 more A380’s between this year and the end of 2021, is developing a new route network for a fleet that will include smaller aircraft, it said last week.

Reporting by Alexander Cornwell; Editing by Kirsten Donovan and Alexander Smith

“SMART AND HARD”

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