Tag: planemaker (Page 4 of 5)

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

FILE PHOTO: Emirates Airline Boeing 777-300ER planes are seen at Dubai International Airport in Dubai, United Arab Emirates February 15, 2019. REUTERS/Christopher Pike/File Photo

FAA Convenes Review Board for Boeing Software Fix

May 7, 2019 / WIL BALDWIN

WASHINGTON (Reuters) – The Federal Aviation Administration said on Tuesday it had convened a multi-agency Technical Advisory Board to review Boeing’s proposed software fix on the grounded 737 MAX.

The board consists of experts from the FAA, U.S. Air Force, NASA and Volpe National Transportation Systems Center that were not involved in any aspect of the Boeing 737 MAX certification. The board’s recommendations will “directly inform the FAA’s decision concerning the 737 MAX fleet’s safe return to service.”

The plane was grounded worldwide in mid-March after two Boeing 737 MAX crashes in October and March killed 346 people.

Boeing, which has yet to formally submit the software fix to the FAA for approval, did not immediately comment Tuesday on the new review.

Some in Congress have urged the FAA to conduct an independent review into the anti-stall system at the center of investigations into two deadly plane crashes before allowing the planes to resume flying.

The board known as TAB will assess Boeing’s proposed fix to the Maneuvering Characteristics Augmentation System (MCAS), the FAA said.

“The TAB is charged with evaluating Boeing and FAA efforts related to Boeing’s software update and its integration into the 737 MAX flight control system. The TAB will identify issues where further investigation is required prior to FAA approval of the design change,” the FAA said.

The world’s largest planemaker, facing its worst crisis in years and the worldwide grounding of its top-selling jetliner, has said its software upgrade and associated pilot training will add layers of protection to prevent erroneous data from triggering MCAS.

The system activated in the Ethiopian Airlines crash in March and also during a separate Lion Air crash in Indonesia in October.

There are a number of other reviews ongoing, including a blue-ribbon committee appointed by Transportation Secretary Elaine Chao looking at the FAA’s aircraft certification process.

Federal prosecutors, the Transportation Department’s inspector general and lawmakers are investigating the FAA’s certification of the 737 MAX 8 aircraft.

A separate joint review by 10 governmental air regulators started last week and is expected to last about 90 days, but the FAA has said that a decision on ungrounding the plane is not contingent on that review being completed.

(Reporting by David Shepardson; Editing by Nick Zieminski)

Boeing Didn’t Intentionally Deactivate 737 MAX Safety Feature

April 29, 2019 / WIL BALDWIN

April 29 (Reuters) – Boeing Co said on Monday it did not “intentionally or otherwise” deactivate a safety alert for its angle-of-attack sensors on its 737 MAX aircraft, responding to reports the planemaker failed to tell Southwest Airlines Co and the U.S aviation regulator that the safety feature was deactivated before recent crashes.

“The disagree alert was tied or linked into the angle of attack indicator, which is an optional feature on the MAX. Unless an airline opted for the angle of attack indicator, the disagree alert was not operable,” Boeing said in a statement.

It said the disagree alert is not necessary for the safe operation of the airplane.

The company said following software modifications all new MAX aircraft will have an activated and operable disagree alert and an optional angle of attack indicator, while current MAX airplanes will have the ability to activate the disagree alert.

Boeing Chief Executive Officer Dennis Muilenburg was grilled at a press conference earlier on Monday, following two fatal crashes of the 737 MAX plane.

(Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)

Trump Says Boeing Should ‘Rebrand’ Grounded 737 MAX Jet

April 15, 2019 / WIL BALDWIN

FILE PHOTO: U.S. President Donald Trump speaks at the debut of the Boeing South Carolina Boeing 787-10 Dreamliner in North Charleston, South Carolina, U.S., February 17, 2017. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) – U.S. President Donald Trump on Monday urged Boeing Co to fix and “rebrand” its 737 MAX jetliner following two fatal crashes, as regulators worldwide continue to work with the planemaker to review its grounded best-selling aircraft.

The Federal Aviation Administration has been meeting major airlines and convened a joint review with aviation regulators from other countries, while federal prosecutors, the U.S. Department of Transportation inspector general’s office and a blue-ribbon panel are reviewing the plane’s certification.

In an early-morning post on Twitter, Trump, who owned the Trump Shuttle airline from 1989 to 1992 and is an aviation enthusiast, weighed in with his own advice.

“What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name. No product has suffered like this one. But again, what the hell do I know?” Trump tweeted.

The plane’s grounding has also threatened the U.S. summer travel season, with some airlines removing the 737 from their schedules through August.

Trump issued the tweet as Boeing tries to restore trust in its fastest-selling jet, the main source of profits and cash at the Chicago-based planemaker which has won some 5,000 orders or around seven years of production for the aircraft.

Chief Executive Dennis Muilenburg has apologised on behalf of Boeing for lives lost in two recent accidents and promised that it would address the risk that flight software meant to prevent the plane stalling could be activated by wrong data.

Boeing has also held dozens of briefings and simulator sessions for airline executives and pilots and held worldwide meetings with airline branding and communications staff.

Pilots are expected to play a major role in regaining public confidence in the aircraft, but Trump’s tweet marks the first time the brand underpinning Boeing profits in coming years has been thrown into question at a high level.

Brand Finance, a UK-based consultancy that tracks the value of global brands, rejected the idea that Boeing should abandon the MAX brand but said its corporate reputation was in the firing line.

“This has without a doubt damaged Boeing’s reputation and we foresee a dent to the (Boeing) brand’s value at over $12 billion (£9 billion),” Chief Executive David Haigh said by email when asked about Trump’s comments.

“This is a temporary blip in the long run for Boeing,” he said, adding Toyota and others had recovered from similar high-profile crises without a drastic rebranding exercise.

Brand Finance had previously estimated the damage to the value of Boeing’s reputation at $7.5 billion immediately after the March 10 crash of an Ethiopian Airlines jetliner, the second fatal accident involving the 737 MAX in five months.

Boeing has the world’s most valuable aerospace brand, having seen the value of its overall corporate image rise by 61 percent to $32 billion in 2018, according to the same branding firm.

(Reporting by Susan Heavey, Tim Hepher; Editing by Jeffrey Benkoe and Toby Chopra)

China’s Huge Airbus Order Padded by Old & Incomplete Deals

April 2, 2019 / WIL BALDWIN

Exclusive: China’s huge Airbus order padded by old or incomplete deals – source

PARIS (Reuters) – A landmark order from China for 300 Airbus jets signed during a state visit last week was bolstered by repeat announcements of dozens of existing deals and advance approval for deals that have yet to be struck, two people familiar with the matter said.

Echoing an umbrella order for 300 Boeing jets awarded during a visit to Beijing by U.S. President Donald Trump in 2017, the headline figure for the new “framework order” for European jets was partly driven by political considerations, the people said.

The Airbus deal would have been worth some $35 billion at list prices but the amount of new business is lower, they added. Duplicate announcements included a deal for 10 A350 aircraft to an unnamed buyer, which represents a repeat announcement of an order for 10 jets by Sichuan Airlines at an air show last year.

The disclosure takes some of the shine off an announcement widely regarded as the economic highlight of a trip to Europe by Chinese President Xi Jinping. Nonetheless the deal marked a return to the aircraft market by China’s state buying agency after a pause of over a year during global trade tensions.

The overall figure of 300 was introduced late in the process and after Xi’s visit was underway, although plane orders typically take months to negotiate, one of the people said.

Airbus declined to comment on detailed orders but left open the possibility that the large total contained gaps.

The agreement “creates the approval framework for aircraft ordered by Chinese airlines, be it existing orders or future orders,” a spokesman said.

TRADE TIES

Airbus shares fell 0.7 percent on Tuesday, extending earlier losses after Reuters reported gaps in the China deal. Airbus’ stock had risen almost two percent after China’s mega-order, signed in Paris on March 25 in front of Xi and French President Emmanuel Macron.

Industry sources say major planemakers play by similar rules when selling to China, where they face a two-tier system of negotiations with airlines within a framework of state-backed umbrella deals that may be influenced by geopolitics.

But the headline figures for new orders during high-profile diplomatic visits, which for several years hovered around 150 aircraft for both Airbus and Boeing, have increased as trade ties between Washington and China go through highs and lows.

In November 2017, months before a trade war erupted with the imposition of tariffs, China announced an order for 300 Boeing jets during a visit to Beijing by U.S. President Donald Trump.

Analysts expressed doubts at the time over how much of that was new business, and said part of the announcement represented renewed government support for deals already on Boeing’s books.

“The most recent Airbus and Boeing deals followed a similar pattern,” said a China aircraft industry specialist.

Boeing is now seen as next in line to secure a 200-300-plane order as part of a possible economic truce being negotiated to end the trade war, but the recent grounding of one of its jets has cast uncertainty over the timing of the deal.

Boeing and Airbus compete fiercely to serve the needs of the world’s fastest-growing airplane market, while bracing for future competition from China’s own aerospace industry.

Analysts say Beijing tends over time to balance U.S. and European purchases, though recent years have seen the rise of a growing number of independent Chinese leasing companies and an increase in autonomous decision-making by several airlines.

(Reporting by Tim Hepher, Additional reporting by Marine Pennetier; Editing by Sudip Kar-Gupta and Richard Lough)

Denel May Wind Down Airbus A400M Manufacturing

March 31, 2019 / WIL BALDWIN

JOHANNESBURG (Reuters) – South African state arms company Denel is in talks with Airbus about winding down production of parts for the European planemaker’s A400M military aircraft, Denel said on Saturday.

Denel, a cornerstone of South Africa’s once mighty defense industry, is battling to emerge from a financial and operational crisis. In February it said it could sell stakes in some divisions as part of a strategy to return to profits within two years.

The company has also been trying to renegotiate onerous contracts and exit parts of its business which are no longer viable, after making a 1.7 billion rand ($117 million) loss in the 2017/18 financial year.

Denel said it was yet to finalize terms with Airbus for the winding down of production for the A400M.

“The two companies agreed that the continued manufacturing of aircraft parts by Denel is no longer sustainable in its current form,” Denel said in a statement. “Alternative options are now being considered between the two parties.”

Denel will try to minimize the impact on jobs at its Aeronautics division, it added.

(Reporting by Alexander Winning; Editing by David Holmes)

Airbus Shares Take Off After Bumper Beijing Order

March 26, 2019 / WIL BALDWIN

FILE PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau

PARIS (Reuters) – Airbus shares rose on Tuesday after the European planemaker won a deal worth tens of billions of dollars to sell 300 aircraft to China.

Airbus was up 2.7 percent by 1208 GMT, with the stock having risen nearly 40 percent so far in 2019.

French officials said the deal was worth some 30 billion euros (25.6 billion pounds) at catalogue prices. Planemakers usually grant significant discounts.

The Chinese order was announced late on Monday, coinciding with a visit to Europe by Chinese President Xi Jinping and matching a China record held by U.S. rival Boeing.

Investment bank Citigroup kept its “buy” rating on Airbus.

“We do not have details of the delivery schedule of this order, but China has been taking about 20-25 percent of Airbus production per year and given the A320 family is sold out at announced production rates out to 2024/25, we believe this increases the probability of Airbus moving to a production rate of 70 per month,” wrote Citigroup.

That positive view was echoed by Morgan Stanley, which kept an “overweight” rating on Airbus shares.

“Clearly finalisation of this order is a positive for Airbus, and continues to underpin strong order book coverage and rising production rates in narrowbody,” Morgan Stanley said.

The larger-than-expected order, which matches an order for 300 Boeing planes when U.S. Donald Trump visited Beijing in 2017, follows a year-long vacuum of purchases in which China failed to place significant orders amid global trade tensions.

It also comes as the grounding of the Boeing 737 MAX has left uncertainty over Boeing’s immediate hopes for a major jet order as the result of any warming of U.S.-China trade ties.

(Reporting by Sudip Kar-Gupta; Editing by Leigh Thomas and Jane Merriman)

French Official Says ‘Positive Signs’ in Airbus-China Talks

March 14, 2019 / WIL BALDWIN

NAIROBI (Reuters) – There are encouraging signs that European planemaker Airbus is closing in on a long-negotiated deal with China for dozens of new narrow-body jets, an aide to French President Emmanuel Macron said on Thursday.

The official said there were hopes Airbus would nail down the multibillion-dollar order when President Xi Jinping visits Europe later this month, but acknowledged there would unlikely be confirmation until the eleventh hour.

“The talks are ongoing,” the official said. “It will be difficult to know for sure until the day before, but the signs are positive.”

China has become a key hunting ground for Airbus and its leading rival Boeing, thanks to surging travel demand, but the outlook has been complicated by Beijing’s desire to grow its own industrial champions and, more recently for Boeing, the U.S.-China trade war.

Macron unexpectedly failed to clinch the Airbus order during a trip to China in early 2018 and the French government and Airbus have been working since to salvage it.

Macron said at the time that China would buy 184 A320 narrow-body jets, an order worth $18 billion at list prices.

The Elysee Palace official also said Airbus was discussing a new order with Ethiopian Airlines. The official gave no details on the size of the potential new Ethiopian order but cited the long-range A350, a model which Ethiopian already operates, and the single-aisle A320 jet as aircraft of interest to the airline.

Macron and Ethiopia’s Prime Minister Abiy Ahmed discussed the negotiations during Macron’s visit to Addis Ababa on Tuesday, two days after an Ethiopian Airlines Boeing 737 MAX 8 crashed after taking off, killing all 157 people on board.

Industry analysts played down a possible link between any current negotiations and Sunday’s crash. Ethiopian has been undertaking a major fleet expansion and regularly talks to the market, they said, adding that order talks take time.

(Reporting by John Irish; Writing by Richard Lough; Editing by Mark Potter)

Embraer Says Key Vote on Boeing Tie-up May Proceed

February 26, 2019 / WIL BALDWIN

SAO PAULO (Reuters) – Brazilian planemaker Embraer said on Tuesday a key shareholder meeting to vote on the sale of 80 percent of its commercial aviation business to Boeing Co could proceed as scheduled on Tuesday, after it got an injunction overturned.

A federal judge had suspended the meeting on Friday at the request of a union representing some Embraer workers which had lobbied against the deal, partly on concerns Boeing would slash jobs if the tie-up was approved.

Shares in Embraer surged 3 percent in early Sao Paulo trading on news the meeting would take place.

Last-minute legal twists are common in Brazil, and Embraer had already overturned several injunctions that temporarily blocked the deal.

Under the proposed terms, Boeing will pay $4.2 billion to control Embraer’s most profitable division, its commercial aviation business.

The deal will provide a cash influx that the Brazilian planemaker has defended as crucial to its survival as increased competition between Boeing and Airbus squeezes out smaller rivals.

“The potential operation with Boeing will save Embraer,” lawyers for the Brazilian planemaker said in July in a court filing as it battled an earlier challenge to the deal.

But critics say the arrangement will leave Embraer weaker and financially dependent on its two remaining divisions, executive jets and defense, both of which have posted losses in recent quarters.

Foreign shareholders, who own a tiny slice of the company, overwhelmingly voted to approve the deal.

Brazil’s securities regulator late on Monday denied a separate request filed by minority shareholders to suspend the shareholder meeting.

Embraer’s union has vowed to protest the meeting, which will be held at the planemaker’s headquarters in the city of Sao Jose dos Campos. The union’s plans prompted Embraer to seek legal restrictions of its own.

A judge sided with Embraer last week, allowing Brazil’s military police to safeguard the planemaker’s premises while the meeting takes place.

The deal has already been approved by Brazil’s government, which holds veto power over important business decisions at Embraer, which was a state company until its privatization in the 1990s.

(Reporting by Marcelo Rochabrun in Sao Paulo; Additional reporting by Gram Slattery in Rio de Janeiro; Editing by Jason Neely, Keith Weir and Bernadette Baum)

Boeing says aircraft demand supports even faster 737 production

February 6, 2019 / WIL BALDWIN

SEATTLE (Reuters) – A top Boeing Co executive said on Wednesday market demand was strong enough to support an even higher production rate of 63 single-aisle 737 aircraft per month but such an increase depends more on suppliers being able to keep up.

The world’s largest planemaker is also looking to remove as much risk as possible from a proposed new mid-sized jet plan by focusing on batting down development costs and applying lessons learned across multiple civil and military programs, Chief Financial Officer Greg Smith told a conference.

Boeing is currently building 52 737 aircraft per month at its Seattle-area factory. Reuters reported this week that Boeing plans to speed up to 57 planes per month in June if it can smooth out supplier delays.

(Reporting by Eric M. Johnson in Seattle; Editing by Chizu Nomiyama)

Image from http://www.boeing.com

“SMART AND HARD”

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