PRNewswire/ — Volaris (NYSE: VLRS), the ultra-low-cost airline serving Mexico, the United States and Central America, announces that pursuant to a decree published in the Official Gazette of the Federation, the Government of the United Mexican States, acting through the General Health Council (Consejo de Salubridad General (“GHC”)) declared a health emergency due to force majeure, as a result of the disease epidemic caused by the virus SARS-CoV-2 (COVID-19), known as Coronavirus, which will be in effect until April 30, 2002 (the “Declaration of Emergency”)
The Declaration of Emergency and the health security measures announced by the GHC, such as the suspension of non-essential activities in the public, private and social sector, as well as the call to the population to comply with stay at home, will impact the demand for passenger air transportation whilst the Declaration of Emergency is in effect.
As a result, from the date hereof, Volaris will make an additional capacity reduction to that which was advised on March 24, 2020. Capacity measured by available seat miles (ASMs) for the month of April, 2020 will reduce to approximately 80% of total operation versus the schedule originally published.
Volaris will continue to provide relevant market updates should further capacity, governmental travel restrictions or other liquidity preserving measures need to be implemented.
SEOUL, March 26 (Reuters) – South Korea’s National Pension Service (NPS) will vote for Hanjin Group chairman Walter Cho to keep his board seat in Korean Air’s parent firm Hanjin Kal at a shareholders’ meeting on Friday, the fund said.
In a statement on Thursday, NPS said it would also approve a board seat for telecoms industry veteran Kim Shin-bae, who was nominated by Cho’s sister and an activist fund that opposed Walter Cho.
Hanjin Kal’s annual general meeting is expected to be the culmination of an intense proxy fight to decide the group’s leader.
NPS, the world’s third-largest pension fund, had a stake of 2.9% stake in Hanjin Kal by the end of 2019.
(Reporting by Joyce Lee; Editing by Clarence Fernandez)
FILE PHOTO: A traffic light is seen in front of a logo of General Electric at the company’s plant in Birr
(Reuters) – The U.S. government is considering whether to stop General Electric Co from continuing to supply engines for a new Chinese passenger jet, according to people familiar with the matter, casting uncertainty over China’s efforts to enter the civil aviation market.
The potential restriction on the engine sales – possibly along with limits on other components for Chinese commercial aircraft such as flight control systems made by Honeywell International Inc – is the latest move in the battle between the world’s two largest economies over trade and technology.
The issue is expected to come up at an interagency meeting about how strictly to limit exports of U.S. technology to China on Thursday and at another meeting with members of President Donald Trump’s Cabinet set for Feb. 28, sources said.
The White House and the U.S. Commerce Department, which issues licenses for such exports, declined to comment, as did a GE spokeswoman. The departments of Defense, State, Energy and Treasury did not respond to requests for comment.
For years, the United States has supported American companies’ business with China’s budding civil aviation industry.
The government has provided licenses that allow those companies to sell engines, flight control systems and other components for China’s first large commercial aircraft, the COMAC C919. The narrow-body jet has already engaged in test flights and is expected to go into service next year. COMAC is an acronym for Commercial Aircraft Corp of China Ltd.
But the Trump administration is weighing whether to deny GE’s latest license request to provide the CFM LEAP-1C engine for the C919, people familiar with the matter said, though GE has received licenses for the LEAP engines since 2014 and was last granted one in March 2019.
The CFM LEAP engine is a joint venture between GE and France’s Safran Aircraft Engines. The proposal to halt the deliveries of the engines was also reported on Saturday by the Wall Street Journal.
Safran did not immediately respond to a request for comment, and French government officials could not be reached for comment.
Aside from aircraft engines, flight control systems are up for discussion at the February meetings. Honeywell International has received licenses to export flight control systems to COMAC for the C919 for about a decade, and one was approved in early 2020, according to a person familiar with the matter.
But future permission for such sales for COMAC’s passenger aircrafts may be up for debate. Honeywell also has been seeking a license for flight control technology to participate in the development of the C929, China’s planned wide-body jet venture with Russia, the person said.
The flight control system operates moving mechanical parts, such as the wing flaps, from the cockpit.
A spokeswoman for Honeywell declined to comment.
An aerospace trade group official said his organization would like to weigh in on any policy shifts.
“If there are any changes, we would hope they would engage with us, as they’ve done before,” said Remy Nathan, vice president for international affairs at the Aerospace Industries Association.
At the heart of the debate over a possible crackdown on the sale of U.S. parts to China’s nascent aircraft industry is whether such shipments would fuel the rise of a serious competitor to U.S.-based Boeing Co or boost China’s military capabilities.
People familiar with the matter said some administration officials are concerned the Chinese could reverse engineer some items, though others say an abundance of LEAP engines in China has not brought that about to date.
If the United States were to move ahead with the measure, one person familiar with the matter said, China could retaliate by ordering more planes from Airbus SE , rather than crisis-hit Boeing, which relies on China for a fourth its deliveries.
The Trump administration’s meetings about technology issues also are set to include a discussion of whether to impose further restrictions on suppliers to Huawei Technologies, the world’s largest telecommunications equipment maker, which is on a U.S. trade blacklist.
(Reporting by Karen Freifeld and Alexandra Alper; additional reporting by Tim Hepher in Paris; editing by Jonathan Oatis)
FILE PHOTO: China’s home-grown C919 passenger jet taxis after landing on its maiden flight at the Pudong International Airport in Shanghai
SINGAPORE (Reuters) – Competition is cranking up in the world of turboprops.
For years turboprops were an ignored corner of the aircraft industry, accounting for about 120 aircraft a year compared with the more than 1,000 jets made by giants Airbus and Boeing.
But growing rivalries in the turboprop business cut through a Singapore Airshow depleted by coronavirus this week.
While intercontinental jet travel is vulnerable to trade wars and disruptions such as epidemics, regional development in archipelago nations like Indonesia is favouring the turboprop.
The market has been dominated for years by Europe’s ATR, jointly owned by Airbus and Italy’s Leonardo, which enjoys a relatively undisturbed lion’s share of the market with a small slice also held by the Canadian-owned De Havilland Dash 8.
But the commercial arm of Brazil’s Embraer is sharpening a pitch to return to the market and Chief Executive John Slattery told Reuters he expected a decision by the end of the year.
“We should be positioned in the mid-to-late fourth quarter to bring a business case with a recommendation to our board,” he said in an interview.
In a sign that the development is accelerating, Slattery said he had held talks with three potential engine suppliers – Rolls-Royce, General Electric and Pratt & Whitney Canada, part of the engine unit of United Technologies.
“We are fully engaged with engine manufacturers now and meeting here at the air show…We are excited by where we are.”
Until now, planemakers have found it difficult to justify the estimated $2-4 billion investment needed to develop a new turboprop, despite its efficiency on relatively short flights.
The market has been stagnant at about 120 deliveries a year and demand for the planes is dependent on volatile oil prices, with turboprops displacing small jets when prices are high.
The thrumming noise of the propellor-driven turboprop also puts some passengers off, travel experts say, even though many in the industry say that reputation is already out of date.
Slattery said quiet new engine technology and advances in passenger comfort would stimulate demand.
“We believe the market opportunity going forward is significantly different to what past decades have shown.”
COMPETITION BOOST
China has already entered the fray with its planned MA700.
At ATR’s bright-red stand inside Singapore’s exhibition hall, Chief Executive Stefano Bortoli shrugged off the threat of a comeback by Embraer which already makes smaller turboprops.
“I think once Embraer will let us know their decision you will have our comments. At this point in time it is simply commenting on opinions. Not that we will stand still,” he said.
The fundamental shape of the two-aircraft ATR family seating 40-78 people has not changed in about 30 years, but the aircraft was modernised with the -600 variant around a decade ago.
ATR recently launched a freighter and a version designed for use on short runways, which has opened opportunities in markets such as Japan and Papua New Guinea, where PNG Air emerged as a launch customer this week.
“The approach we’ve taken…is let’s consolidate the platform that we have…and when the right time comes and there are solid options available, let’s go for that,” Bortoli said.
ATR shareholders have clashed in the past about whether to launch a bigger new 90-seater, with Toulouse-based Airbus blocking the investment. But industry analysts say ATR would have to consider responding to a new plane from Embraer.
The prospect of greater competition in turboprop adds zest to efforts by Embraer to complete a tie up with Boeing, which has agreed to acquire control of its commercial division.
The European Commission has extended its scrutiny of the $4 billion deal, fearing that it would narrow options for airlines.
Slattery reiterated Embraer would only have the appetite to invest in a new turboprop in the context of the Boeing venture.
He declined to elaborate but industry experts say it is a signal to Europe that the Boeing deal would improve choice for airlines by prompting ATR to come up with its own new product.
One European source said it remained doubtful whether Boeing would support a new turboprop once it gained control of Embraer, but analysts note the U.S. planemaker has not yet ruled it out.
(Reporting by Tim Hepher, Jamie Freed; editing by David Evans)
FILE PHOTO: Groundcrew prepare a Liat airlines ATR 42 plane on the tarmac at Barbados’ Grantley Adams International Airport
FILE PHOTO: A traveler checks her baggage at the Southwest Airlines terminal at LAX airport in Los Angeles
(Reuters) – The U.S. Federal Aviation Administration says it should have done a better job of ensuring Southwest Airlines Co <LUV> had certified completion of maintenance on 88 used Boeing 737 jets, as noted in a report by the U.S. Transportation Department’s Inspector General released on Tuesday.
Budget-friendly Southwest bought the planes in question between 2013 and 2017 from 16 foreign carriers.
The final report, first seen by Reuters, said Southwest operated more than 150,000 flights carrying 17.2 million passengers on the jets without confirmation that required maintenance had been completed.
The report said the FAA has not “effectively overseen Southwest Airlines’ systems for managing risks” and made 11 recommendations to improve oversight, including retraining inspectors and developing better control over maintenance records and inspector guidance on evaluating air carrier safety culture.
While the U.S. commercial airline industry is considered safe, with only one fatality in recent years, the FAA is under heightened scrutiny by lawmakers over its relationship with the industry after two crashes overseas on the newer Boeing Co <BA> 737 MAX killed 346 people and led to that aircraft’s global grounding.
“Given the significant unresolved safety concerns that FAA has identified at Southwest Airlines, it is clear that the agency is not yet effectively navigating the balance between industry collaboration and managing safety risks at the carrier,” the report said.
The FAA said in a response included with the report it concurred with all 11 recommendations and the inspector general’s conclusion that its office overseeing Southwest did not perform in accordance with existing guidance by allowing the 88 planes to enter service and that it “lacked a comprehensive conformity inspection for used aircraft.”
Southwest told Reuters on Tuesday that eight of the 88 jets remain out of service until needed repairs are completed and that it disagreed with the report’s findings.
The report chided the FAA, saying the agency “accepted the air carrier’s justification that the issues identified were low safety risks.”
The FAA noted it changed the leadership of its office that oversees Southwest and “continues to address deficiencies in the work functions and culture.” The agency has agreed to ensure Southwest “complies with regulatory requirements that the 88 previously owned aircraft conform to U.S. aviation standards.”
Last month, the Wall Street Journal published an article on a draft of the inspector general report.
The report also said the FAA violated its own guidance in addressing noncompliance by Southwest on baggage weight and balance data. The FAA agreed to ensure Southwest complies with requirements.
On Jan. 10, the FAA said it was seeking to impose a $3.92 million fine on Southwest for alleged weight infractions on 21,505 flights on 44 aircraft between May 1, 2018 and Aug. 9, 2018.
Southwest has said it is working with the FAA to demonstrate the effectiveness of its controls and seek a resolution on the proposed penalty.
Southwest shares closed up 0.9% on Tuesday, off intraday highs.
(Reporting by David Shepardson in Washington and Tracy Rucinski in Chicago; Editing by David Gregorio and Matthew Lewis)
FILE PHOTO: A Southwest Airlines Boeing 737 plane sits on the runway waiting to take off at LAX airport in Los Angeles
WASHINGTON, Feb 10 (Reuters) – The White House budget released on Monday proposed cutting funding for passenger rail carrier Amtrak, while calling for a significant boost in infrastructure spending.
The proposal would cut Amtrak funds by more than 50% over 2020 levels. It could cut funds to the congested northeast corridor from $700 million to $325 million and cut long-distance train funds from $1.3 billion to $611 million and then phase out support for long-distance trains.
Trump has proposed similar cuts in prior budgets and been rejected, and Democrats are not likely to go along. Trump has sparred with Democratic lawmakers over a $13 billion infrastructure project to build and repair tunnels and bridges in the New York City area known as “Gateway.”
In November, Amtrak said for the year ended Sept. 30, it had set records for ridership, revenue, and financial performance, including 32.5 million customer trips, a year-over-year increase of 800,000 passengers.
Amtrak reported a loss of $29.8 million in the year through September 2019 compared with a loss of $170.6 million in the prior fiscal year.
The Trump budget calls for $810 billion in highway, transit, safety and other surface transportation funds and then an additional $190 billion for a wide range of programs including $25 billion for rural water, broadband and other projects. It does not specify how to pay for the repairs or for funding an estimated $107 billion shortfall in the highway trust fund through 2026.
The budget again also calls for eliminating an Energy Department clean vehicle loan program that boosted Tesla Inc , Nissan Motor Co and Ford Motor Co during the last industry downturn, but has not funded a new project in almost a decade.
Start-up Lordstown Motors Chief Executive Steve Burns told Reuters last month the company wanted to apply for a $200 million loan from the Energy Department program to retool a former General Motors factory in Lordstown, Ohio. Burns met with Energy Secretary Dan Brouillette for an hour to discuss the proposal last month. Lordstown is partially owned by start-up Workhorse Group Inc.
The budget also again proposes killing the $7,500 electric vehicle tax credit that phases out for automakers after 200,000 EVs are sold. The White House blocked an effort in December by congressional Democrats to expand the credit to additional vehicles.
(Reporting by David Shepardson; Editing by Steve Orlofsky)
Acela at B&P Tunnel
Acela, Amtrak, B&P Tunnel, Baltimore, NEC, maryland
An Acela train emerges from the B&P Tunnel in Baltimore.
WASHINGTON (Reuters) – The U.S. Transportation Department’s Office of Inspector General said on Monday it will audit Federal Aviation Administration pilot training requirements for U.S. and foreign air carriers after two deadly crashes of Boeing’s <BA> 737 MAX.
The audit will also review international civil aviation authorities’ requirements for carriers’ pilot training regarding the use of flight deck automation.
Pilots have been harshly critical of Boeing’s decision not to disclose details of a new automation system – known as the Maneuvering Characteristics Augmentation System, or MCAS – that has been linked to both fatal crashes.
The Inspector General cited a report by Indonesia’s Lion Air that “responses to erroneous activations of MCAS contributed to the crash, raising international concerns about the role of pilot training.”
The report said Boeing’s safety assessment assumed pilots would respond within three seconds of a system malfunction. But on the fatal flight and one that experienced the same problem the previous evening, it took both crews about eight seconds to respond.
Boeing declined to comment on the new review.
The FAA said it would cooperate with the inspector general’s review. “Raising and harmonizing pilot training standards across the globe are among the FAA’s top aviation safety priorities,” the FAA said. “We continue to pursue expanded conversations among the world’s aviation regulators to identify ways to enhance international aviation safety through robust pilot training programs.”
Boeing has proposed new simulator training for pilots on a series of scenarios before they are allowed to resume 737 MAX flights.
The MAX is not expected to be freed to fly until late April at the earliest. In March, the department’s IG said it would audit the FAA’s certification of the Boeing 737 MAX.
The Trump administration on Monday proposed an additional $30 million in it 2021 budget “to improve aviation oversight, following recommendations from the Boeing 737 MAX investigations.”
The funding would support 13 new full-time positions for the creation of an office mandated by Congress to oversee the FAA’s delegation of some certification tasks to Boeing and other plane-makers. The FAA would also use some of the funds for data collection and for “technological advances that we use to assess safety data,” Deputy FAA Administrator Dan Elwell said.
(Reporting by David Shepardson; Editing by Dan Grebler)
FILE PHOTO: Aerial photos show Boeing 737 Max airplanes on the tarmac in Seattle
DEARBORN, Mich. (Reuters) – Investors sent Ford Motor Co shares skidding on Tuesday after the company delivered a weaker-than-expected 2020 forecast, warning of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars.
Shares in the No. 2 U.S. automaker plunged 9.4% in after-hours trading, shaving more than $3 billion off the company’s value. In comparison, electric carmaker Tesla closed up nearly 14%, pushing its market cap to $160 billion, more than four times the size of Ford’s $36.4 billion.
“The results were not OK in 2019,” Ford Chief Financial Officer Tim Stone told reporters at the company’s headquarters outside Detroit.
“As I look to 2020 and beyond, I’m very optimistic,” he said, while cautioning that Ford’s lower guidance does not yet account for the potential impact of the coronavirus outbreak in China.
In an after-hours call with financial analysts, Chief Executive Jim Hackett was more blunt about the challenge of balancing Ford’s protracted turnaround efforts with its continuing work on future technology, including electric and self-driving cars.
“I don’t think this company can keep straddling the old and new worlds forever … This company has to change,” Hackett said.
Ford said it expects 2020 operating earnings to be in the range of 94 cents to $1.20 a share. Analysts were expecting $1.26 a share.
Stone said Ford expects to continue its quarterly dividend of 15 cents, which could cost the company $2.4 billion in 2020. Asked about continuing the dividend after lowering its 2020 guidance, Hackett said, “We like to return value to shareholders.”
The disappointing 2020 forecast, coming after Ford previously trimmed its 2019 outlook, is a blow for Hackett, who took the helm in May 2017.
He has been asking investors to be patient with a restructuring that has seen the formation of a wide-ranging alliance on commercial, electric and autonomous vehicles with Volkswagen AG <VOWG_p.DE> and the sale of its money-losing operations in India to a venture controlled by India’s Mahindra & Mahindra.
But by Ford’s own accounting, the restructuring is far from complete. It has booked $3.7 billion of the projected $11 billion in charges it previously said it would take, and expects to book another $900 million to $1.4 billion this year.
For the fourth quarter of 2019, Ford reported a net loss of $1.7 billion, or 42 cents a share, compared with a loss of $100 million, or 3 cents a share, a year earlier.
The quarter included a loss of $2.2 billion due to higher contributions to its employee pension plans, something it disclosed last month.
Revenue in the quarter fell 5% to $39.7 billion, above the $36.5 billion Wall Street had expected.
Ford’s adjusted free cash flow fell 67% in the fourth quarter to $500 million, including the $600 million cost of bonuses related to a new labor deal with the United Auto Workers union. The UAW deal also played a role in driving North American automotive profit margins down to 2.8% in the fourth quarter.
Ford said its operating losses in China last year totaled $771 million, including a loss of $207 million in the fourth quarter. It lost $1.5 billion in 2018. Ford’s market share in China in the fourth quarter fell to 2% from 2.3% last year.
In December, Ford said it would halve its operating loss in 2019 and nearly halve it again in 2020, followed by further improvement in 2021.
However, that forecast was before the appearance of the fast-spreading coronavirus and its crippling effects on China’s economy.
Ford’s China sales fell about 15% in the fourth quarter and 26% for the year as it continued to lose ground in its second-biggest market. Ford has been struggling to revive sales in China since its business began slumping in late 2017.
Detroit rivals General Motors Co and Fiat Chrysler Automobiles are scheduled to report their results on Wednesday and Thursday, respectively.
(Reporting by Ben Klayman and Paul Lienert; Editing by Tom Brown)
Organisers expect reduction in exhibitors, visitors
South Korea’s air force reviewing participation
By Jamie Freed and Allison Lampert
SYDNEY/MONTREAL, Feb 3 (Reuters) – Some aerospace companies including business jet manufacturers Textron Inc and General Dynamics Corp’s Gulfstream division said they no longer planned to attend the Singapore Airshow due to the new coronavirus epidemic.
The trade portion of Asia’s biggest airshow, held every two years, is set to begin on Feb. 11 under the shadow of the fast-spreading virus that has prompted Singapore to deny entry to any non-resident with a recent history of travel to China, where the virus originated.
The death toll from the coronavirus has risen to 361 in China, bringing the number of confirmed infections to 17,205 in the country. The flu-like virus, which can be transmitted from person to person, has spread to more than two dozen other nations and regions.
Experia Events, the organiser of the Singapore Airshow, said last week the show would continue as planned, but the government measures meant it would “undoubtedly see a reduction in terms of the number of expected exhibitors and visitors this year”.
The organiser said there would be doctors and medics on standby to attend to visitors who were feeling unwell.
In 2018, there were 54,000 trade attendees from 147 countries and 1,062 participating companies who come to network, examine products and sign deals covering commercial aviation, defence, maintenance and repair operations and business jets.
Typically, it is not a major show for commercial plane orders but talks during the show can set the stage for deals that are completed later in the year.
Boeing, Airbus and Lockheed Martin Corp , among the biggest exhibitors, said they still planned to attend the show.
Textron and Gulfstream said their decision to not attend was a precautionary measure to protect the health of employees.
Russian aerospace group Rostec plans to send a reduced delegation to the show, Russian media reported. Rostec did not respond immediately to a request for comment.
A spokesman for South Korea’s Air Force said on Monday it was reviewing whether to participate in the Singapore Airshow, but it had not made a final decision.
The deputy administrator of the Civil Aviation Administration of China, Li Jian, is no longer listed as a speaker at a pre-show leadership conference on Feb. 10.
Commercial Aircraft Corp of China (COMAC), which is developing the C919 narrowbody jet, had been due to attend the show before the travel ban was announced.
COMAC did not respond immediately to a request for comment.
(Reporting by Jamie Freed in Sydney and Allison Lampert in Montreal; additional reporting by Anshuman Daga in Singapore, Joyce Lee in Seoul and Brenda Goh in Shanghai; Editing by Himani Sarkar)
SHANGHAI (Reuters) – Ford Motor Co’s <F> China vehicle sales fell for a third consecutive year, by 26.1%, as it battles a prolonged overall sales decline in its second-biggest market that has hit demand for its mass-market Ford brand and sports utility vehicles.
The U.S. automaker delivered 146,473 vehicles in China in the fourth quarter, down 14.7% year-on-year, Ford said in a statement. In total, it sold 567,854 vehicles over 2019.
Ford has been trying to revive sales in China after its business began slumping in late 2017. Sales sank 37% in 2018, after a 6% decline in 2017.
Anning Chen, president and chief executive of Ford Greater China, said that while 2019 was a “challenging” year for the automaker, it saw its market share in the high-to-premium segment stabilize and its sales decline in the value segment start to narrow in the second-half of the year.
“The pressure from the external environment and downward trend of the industry volume will continue in 2020, and we will put more efforts into strengthening our product lineup with more customer-centric products and customer experiences to mitigate the external pressure and improve dealers’ profitability.”
The automaker plans to launch more than 30 new models in China over the next three years of which over a third will be electric vehicles. It has also said it would localize management teams by hiring more Chinese staff and aimed to improve relationships with joint venture partners.
New models it launched in the fourth quarter include a new Ford Escape version – for which the automaker said orders received so far have been much higher than expected – and the Lincoln Corsair, the first localized Lincoln model in China.
In China, Ford makes cars through a joint venture with Chongqing Changan Automobile Co Ltd and Jiangling Motors Corp Ltd (JMC). It has also said it would partner Zotye Automobile Co Ltd to sell lower priced cars.
Its larger U.S. rival General Motors Co <GM> last week said its sales in China fell 15% from a year earlier to 3.09 million vehicles in 2019, its second year of decline.
China’s auto market is set to contract by 2% in 2020 for the third year of decline, the China Association of Automobile Manufacturers (CAAM) forecast, due to a weaker economy and trade dispute with the United States.
Over 28 million vehicles were sold in 2018, down 3% from the prior year, while 2019 sales are likely to have declined 8% from the prior year, CAAM said.
(Reporting by Brenda Goh and Yilei Sun; Editing by Christian Schmollinger and Christopher Cushing)
A Ford model is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai
