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United, Avianca and Copa’s South American Deal Delayed as They Mull Fourth Partner

October 28, 2019 /

BRASILIA, Oct 28 (Reuters) – A proposed joint venture between United Airlines, Colombia’s Avianca Holdings and Panama’s Copa Holdings has been delayed due to the potential inclusion of a fourth partner, as well as problems at Avianca, the CEOs of two of the companies said.

United Airlines said last week it wants to include Brazil’s Azul SA, in which it already has a stake, in the planned tie-up with Copa and Avianca, the latest play by a U.S. carrier for a region expected to have significant air-travel growth in coming decades.

The three airlines had said in November 2018 they would file for U.S. antitrust approval “in the near term” in order to coordinate routes between South America and the United States, a bold move to expand their market share in the region. At the time, the carriers said they aimed to implement the agreements in 2020.

But almost a year after United, Copa and Avianca announced the preliminary joint venture plan, they have yet to file any paperwork with the U.S. Department of Transportation, seeking antitrust immunity. Now, the regulatory process may begin as late as next year, they said.

Copa Chief Executive Officer Pedro Heilbron said the group expects to file in early 2020, while Avianca CEO Anko van der Werff, said it would file between late 2019 and early 2020. Both spoke to Reuters in separate interviews on Monday on the sidelines of the ALTA Airline Leaders’ Forum in Brasilia.

Both said there was a delay on the original timeline.

United did not comment on a delay but said it planned to complete the application later this year or early next year. Azul had no comment other than saying it was “always looking for opportunities with its partners.”

The potential inclusion of Azul, which may be in the early stages of negotiations, has been one reason for the timetable slipping.

“Quite frankly, really completely open and honest, we haven’t had many discussions,” van der Werff said. “I personally haven’t had even one real, serious discussion at the CEO level about when to include and what to include.”

Both executives said they want Azul to be part of the joint venture – Brazil is by far the largest aviation market in the region – but its inclusion makes negotiations more difficult.

“It almost doubles the level of complexity,” Heilbron said.

Avianca has also gone through corporate turmoil. In May, United Airlines ousted the chairman and controlling shareholder at Avianca, revamping leadership.

“We should have filed with regulators this year but everything got delayed because of what has happened at Avianca,” Heilbron added.

(Reporting by Marcelo Rochabrun in Brasilia Additional reporting by Tracy Rucinski in Chicago Editing by Matthew Lewis and Sandra Maler)

General Motors to Restart Mexican Plants after Labor Deal Ratified

October 25, 2019 /

MEXICO CITY, Oct 25 (Reuters) – General Motors Co will gradually restart operations at several idled plants in Mexico beginning this weekend, after unionized workers for the U.S. automaker ratified a new labor contract, the company’s Mexican unit said on Friday.

The United Auto Workers (UAW) union announced earlier on Friday that its members had formally approved a new four-year labor contract with General Motors, ending a 40-day strike with the top American automaker.

GM said that by the end of next week all of its Mexican operations should be operating normally with all employees back to work.

In a statement, GM’s Mexican unit said its Ramos Arizpe motors plant will resume operating on Saturday, while its transmissions plant and Chevrolet Blazer assembly line located at the same facility will start back up on Monday. The Ramos Arizpe facility is located in the Mexican border state of Coahuila, just south of Texas.

All of the plants located at GM’s Silao facility, in central Guanajuato state, will restart on Monday.

Thousands of Silao workers had been furloughed as anxiety grew earlier this month among residents who viewed the facility as the city’s economic anchor.

Tensions over the future of manufacturing in North America were at the heart of the striking GM workers. The debate pitted U.S. labor advocates eager to reduce Mexico’s cost advantage against Mexican trade unions fighting to protect local jobs.

The strike began in September with UAW negotiators demanding higher pay for workers, greater job security as well as a bigger share of profits and the protection of healthcare benefits.

(Reporting by Anthony Esposito; Writing by David Alire Garcia; Editing by Sandra Maler and Leslie Adler)

Alstom to Supply 39 Additional Coradia Polyvalent Trains to the Grand Est Region

October 23, 2019 /
  • contract worth over 360 million euros in France

22 October 2019 – Alstom will supply 39 additional Coradia Polyvalent trains to the Grand Est region for the sum of approximately 360 million euros[1]. The region had already ordered 40 Coradia Polyvalent trains, of which 36 have already been delivered. Deliveries of these new trains will be staggered between 2022 and 2024.

Firstly, this new order covers 30 trains intended for cross-border circulation in Germany. These 4-car trains, which are dual mode – dual voltage 25 kV / 15 kV and comply with German safety requirements, will run at 160 km/h, serving the German states of Saarland, Rhineland-Palatinate and Baden-Württemberg. The 30 Coradia Polyvalent cross-border trains will offer a first-class zone and an area for bicycles, and will incorporate the new TSI PRM[2] 2014 standard, notably offering more spacious toilets to facilitate movement for passengers with reduced mobility. The first cross-border trains will be delivered at the end of 2023.

Secondly, nine additional Coradia Polyvalent trains, consisting of five 4-car and four 6-car trains, have been added to the existing fleet for domestic connections. These new trains will benefit from the same special features as those already in operation in the Grand Est region. 

“Alstom is proud of this new sign of trust from the Grand Est region. The expertise and innovation capacities of our French teams are mobilised to support the region in developing cross-border mobility. This order also contributes to the activity of Alstom’s Reichshoffen site,” says Jean-Baptiste Eyméoud, President of Alstom in France.

Coradia Polyvalent belongs to Alstom’s Coradia range of trains. With its modular architecture, it can be adapted to the requirements of each public transport authority as well as to different types of use: suburban, regional and intercity. It comes in three lengths (56, 72 or 110 metres) and offers optimal comfort to passengers, whatever the length of the journey. The train is both ecological and economical due to its low energy consumption, its compliance with the latest emissions standards in thermal mode and its reduced maintenance costs. Coradia Polyvalent is the first French regional train to comply with all European standards, in particular with regard to access for people with reduced mobility.

To date, 387 Coradia Polyvalent trains have been ordered as part of the contract awarded to Alstom by SNCF in October 2009, including 320 Coradia Polyvalent for Régiolis by 9 French regions and 67 Coradia Liner by the French state, the authority responsible for the country’s TET (intercity) trains. Régiolis has already covered nearly 85 million kilometres in commercial service.

The Coradia Polyvalent train also meets the needs of the export market: 17 trains have been ordered by SNTF (Algeria) and 15 trains by APIX (Senegal). 

This is Coradia Polyvalent’s second cross-border application as the region of Auvergne-Rhône-Alpes has ordered 17 Léman Express Coradia Polyvalent trains, to be commissioned on the CEVA cross-border line between France and Switzerland in mid-December 2019.

The manufacturing of Coradia Polyvalent secures more than 4,000 jobs in France for Alstom and its suppliers. Six of Alstom’s 12 sites in France are involved in the project: Reichshoffen for the design and assembly, Ornans for the engines, Le Creusot for the bogies, Tarbes for the traction chains, Villeurbanne for the on-board electronics and signalling products, and Saint-Ouen for the design.

[1] Booked in the second quarter of the current fiscal year

[2] Technical Specifications for Interoperability relating to Persons with Reduced Mobility

Embraer Signs USD 1.4 Billion Business Jet Deal with Flexjet, Becoming Praetor Fleet Launch Customer

October 23, 2019 /

Las Vegas, Nevada, October 21, 2019 – Embraer announced today a purchase agreement with Flexjet, a global leader in private jet travel. The deal comprises a fleet of Embraer business jets, which includes the recently certified Praetor jets and the Phenom 300. The announcement was made during a press conference at the 2019 National Business Aviation Association’s Business Aviation Convention and Exhibition (NBAA-BACE), which is being held through October 24, in Las Vegas, Nevada.

Valued at up to USD 1.4 billion, at current list prices, this deal was included in the 2019 second quarter backlog, with deliveries starting in the fourth quarter of 2019. With this purchase agreement, Flexjet becomes Embraer’s Praetor Fleet Launch Customer.

“We are very grateful for Flexjet’s renewed commitment to Embraer through this new agreement, which reflects the growth and the strength of our partnership over the past 16 years and symbolizes our ongoing support for their journey ahead,” said Michael Amalfitano, President & CEO, Embraer Executive Jets. “Flexjet Owners will appreciate and enjoy a truly elevated customer experience in industry-leading aircraft, including the recently certified Praetor jets, which are different by design and disruptive by choice.”

The partnership between Embraer and Flexjet dates back to 2003, when Flight Options, which merged with Flexjet in 2015, became the first fractional ownership program to introduce the Legacy Executive jet into its fleet. Offering customers a large cabin experience at super-midsize economics allowed Flight Options to serve more customers even better than before, while also supporting the company’s growth via Embraer’s high utilization, reliable aircraft design.

“We are proud to introduce the Praetor jets to the fractional marketplace and make technologically advanced midsize and super-midsize aircraft available to Flexjet Owners,” said Michael Silvestro, Flexjet CEO. “This order also represents the longstanding trust we have in Embraer and in their enhanced commitment to support the growth of our programs and of our partnership with industry-leading business jets.”

Flight Options introduced the Phenom 300 into its fractional program in 2010, receiving Embraer’s 100th milestone Phenom 300 in 2012, the first year in which the aircraft became the best-selling light jet. For the seventh consecutive year, the Phenom 300 has been the most delivered light business jet, according to GAMA (General Aviation Manufacturers Association). Also according to GAMA data, the Phenom 300 was the only business jet to reach the mark of 500 deliveries in the last decade.

Flexjet became the first fractional provider to offer the Legacy 500, in September 2015. In fact, Flexjet took delivery of Embraer’s 1,000th executive jet, a Legacy 500, in April 2016. The Legacy 450 joined the Legacy 500 in Flexjet’s Red Label fleet in August of that year, and both models became the first fly-by-wire Flexjet aircraft, offering performance and capabilities of larger aircraft with midsize economics.

Alstom’s Tram Enters Service in Avignon

October 20, 2019 /

Alstom has commissioned its first new-generation Citadis X05 tram in its short version, on the first tramway line of Grand Avignon. The inauguration took place in the presence of Elisabeth Borne, Minister of the Ecological and Solidarity Transition, Renaud Muselier, President of Région Sud, Maurice Chabert, President of the Vaucluse Department, Patrick Vacaris, President of Grand Avignon, Cécile Helle, Mayor of Avignon, Jean-Marc Roubaud, President of Técélys and Jean-Baptiste Eyméoud, President of Alstom France.

“Alstom and its teams are proud to be present at the commissioning of this first tramway line in Avignon. Thanks to their reliability, availability and easier maintenance, we are fully confident in the ability of the 14 Citadis trams to address the major travel challenges of the Agglomeration Community of Grand Avignon. I would also like to thank the members of Grand Avignon for having entrusted us with part of the infrastructural work. This new line will become a showcase for the expertise of the French rail sector,” said Jean-Baptiste Eyméoud, President of Alstom in France.

24 metres long, equipped with 4 double doors on each side, the Citadis X05 tram for Grand Avignon will be able to carry more than 140 passengers. The full low floor and double doors facilitate accessibility and passenger exchange in stations. Everything has been designed for a pleasant travel experience: large bay windows covering 40% of the tram, LEDs with diffusers for soft, homogenous lighting, a state-of-the-art information system, large seats, air conditioning, and a video protection system.

Citadis X05 has standardised, proven, more accessible components, providing residents of the Avignon area with reliable, readily available material. Citadis X05 is particularly energy efficient and up to 99% recyclable.

Alstom offers a wide range of products and services and has also provided the tracks (studies, supply and assembly), the 750 V electrical substation and 6 km of overhead contact lines (studies, supply, installation and testing) in partnership with TSO.

Seven of Alstom’s thirteen sites in France are involved in the design and manufacture of the tram for Grand Avignon: La Rochelle (for the design and assembly of the trams), Ornans (for the engines), Le Creusot (for the bogies), Tarbes (for the traction drive equipment), Valenciennes (for the control system and interior layout), Saint-Ouen (for the design and infrastructure activities) and Villeurbanne (for the on-board electronic systems).

Left-Wing Brazil Political Party Sues to Block Boeing-Embraer Deal

October 16, 2019 /

RIO DE JANEIRO (Reuters) – A left-wing political party on Wednesday filed a lawsuit to block the sale of 80% of Brazilian planemaker Embraer SA’s <ERJ> commercial jet division to Boeing Co <BA> for $4.2 billion (3.3 billion pounds), arguing it will harm Brazil’s sovereignty.

The deal, which would position Boeing to compete more directly with Airbus SE <EADSY> in the market for mid-sized passenger planes, has faced significant left-wing opposition largely because Embraer is seen as a strategic company for Brazil’s national security.

So far, a handful of lower court decisions temporarily blocking the deal have been overturned by appeals court judges. The government has authorized the deal and Embraer’s shareholders are all for it.

But the latest lawsuit, filed by Brazil’s Democratic Labor Party (PDT), underscores that there is still a political risk that could potentially unravel the agreements reached so far between Boeing and Embraer. The PDT’s leader, Ciro Gomes, has staunchly opposed the sale of Embraer’s commercial jet division to Boeing.

Embraer declined to comment on the lawsuit.

The proposed deal with Boeing was first announced in July 2018.

Boeing and Embraer are waiting for antitrust approval to finalise the deal, including intense scrutiny from European regulators. They expect that to happen in early 2020.

(Reporting by Rodrigo Viga Gaier in Rio de Janeiro; Editing by Matthew Lewis)

Embraer Delivers New Jet That Boeing May Soon Sell

September 12, 2019 /

SAO JOSE DOS CAMPOS, Brazil (Reuters) – Embraer <ERJ> hopes to see more orders for its newest passenger plane by the end of the year, an executive said on Thursday, as Boeing <BA> readies to take over the Brazilian planemaker’s commercial jets division in what could mark the next phase of its rivalry with Airbus <EADSY>.

Manufacture of the E195-E2, as Embraer’s plane is known, will soon be controlled by Boeing, which needs regulatory approval to close on the deal to buy 80% of Embraer’s commercial jets division for $4.2 billion.

Embraer on Thursday delivered its first E195-E2 plane, which will seat about 140, to Brazil’s No. 3 airline Azul <AZUL> at its headquarters in Sao Paulo state. Embraer executives said the delivery should spur more orders, helping to fend off fresh competition from Airbus.

“I expect we will close more transactions, I’m hopeful … before the end of the year,” John Slattery, head of Embraer’s commercial plane division, told Reuters. “I’m not seeing a big wave of people that need to delay, or wish to delay because of the Boeing transaction.”

The new plane comes as the landscape for jets with under 150 seats is changing drastically. Airbus bought control of the Bombardier division competing directly with Embraer in 2018, followed by Boeing’s deal to take over Embraer’s commercial plane division.

The result would expand the global duopoly for jumbo jets into a smaller category, as Boeing and Airbus work to lure orders across a broader lineup of commercial aircraft.

Azul was founded by U.S. airline executive David Neeleman, who also founded JetBlue Airways <JBLU>, which was a launch customer and key customer for Embraer’s last generation of jets.

“We can have 18 more seats with this plane, with a travel cost that is 15% less,” Neeleman said of the improvements in the new generation. “If you have something that is 15% cheaper, you just want that thing, you don’t want anything else.”

STIFF COMPETITION

Embraer is banking on the fuel efficiency of this new generation, to the point it has marketed its E195-E2 to customers as the “profit hunter,” painting the jet with livery resembling a shark in the plane’s nose.

But for now, Embraer has struggled to compete directly with Airbus. Carriers and plane lessors had placed 551 orders for the Airbus A220 family as of June, but Embraer had racked up only 168 for its new family of E2 jets, down from 200 in 2014.

Part of Embraer’s struggles stem from its smaller E175-E2 plane, which has been a hard sell to U.S. regional airlines due to labor contract restrictions. Embraer dropped 100 of those planes from its order book after resistance from pilots made it unclear if buyer Skywest <SKYW> would be able to fly them.

“We didn’t design an aircraft just for the U.S. market,” Slattery said, adding that he hopes his company will secure an order from a customer somewhere else in the world this year. Currently they have none, although Slattery said Skywest remains committed, if pilots allow it.

JetBlue also dealt a blow to Embraer last year when it decided to replace its old Embraer fleet with Airbus A220s, a decade after Neeleman left the company.

JetBlue cited the advantages of A220’s longer range, as well as a broader package with Airbus including larger planes — the kind of arrangement that Boeing could offer with Embraer’s jets in its portfolio.

(Reporting my Marcelo Rochabrun in Sao Jose dos Campos, Brazil; Additional reporting by Allison Lampert in Montreal; Editing by Alistair Bell and Marguerita Choy)

AirAsia Inks Major Deals with Airbus

August 30, 2019 /

AirAsia X orders 12 more A330neo and 30 A321XLR aircraft

AirAsia X, the long-haul unit of the AirAsia Group, has finalised a firm order with Airbus for an additional 12 A330-900 and 30 A321XLR aircraft. The contract was signed by Tan Sri Rafidah Aziz, Chairman, AirAsia X Berhad and Guillaume Faury, Chief Executive Officer, Airbus in Kuala Lumpur today, in the presence of Tun Dr Mahathir Mohamad, the Prime Minister of Malaysia.

Tan Sri Tony Fernandes, Chief Executive Officer, AirAsia Group, who was present at the signing, said: “This order reaffirms our selection of the A330neo as the most efficient  choice for our future wide-body fleet. In addition, the A321XLR offers the longest flying range of any single-aisle aircraft and will enable us to introduce services to new destinations. Together, these aircraft are perfect partners for long-haul low-cost operations and will allow us to build further on our market leading position in this fast-growing sector.”

Tan Sri Rafidah Aziz, Chairman of AirAsia X Berhad, said: “Today’s announcement is testament to our confidence and commitment to longer haul air travel. This is the future of our long-haul operations. The A330neo’s revolutionary new features and modifications will move our long-haul service sectors up to a higher level and allow AirAsia X to look at expanding beyond the eight-hour flight radius, such as to Europe, for example.”

Guillaume Faury, Chief Executive Officer, Airbus commented: “AirAsia X has been the pioneer of the long-haul low-cost model in the Asia-Pacific region. This new order for the A330neo and A321XLR is a true endorsement of the Airbus solution to meet mid-market demand with a combination of single-aisle and wide-body products. This powerful solution will provide AirAsia X with the lowest possible operating costs to expand its network and enable even more people to fly further than ever before.”

The new contract increases the number of A330neo aircraft ordered by AirAsia X to 78, reaffirming the carrier’s status as the largest airline customer for the type. Meanwhile, the A321XLR order sees the wider AirAsia Group strengthen its position as the world’s largest airline customer for the A320 Family, having now ordered a total of 622 aircraft.

AirAsia X currently operates a fleet of 36 A330-300s on services to points within the Asia-Pacific region and the Middle East. In addition, in August, the first A330neo joined the fleet of AirAsia’s Bangkok-based long haul affiliate, AirAsia X Thailand. The aircraft is the first of two leased A330neos joining the airline’s Thai affiliate by the end of the year.

The A321XLR is the next evolutionary step from the A321LR which responds to market needs for even more range and payload, creating more value for the airlines. From 2023, it will deliver an unprecedented Xtra Long Range of up to 4,700 nm – 15% more than the A321LR and with 30% lower fuel burn per seat compared with previous generation competitor aircraft.

The A330neo is a true new generation aircraft building on the A330’s success and leveraging on A350 XWB technology. It incorporates the highly efficient new generation Rolls-Royce Trent 7000 engines, and a new higher span 3D optimised wing with new Sharklets. Together these advances bring a significant reduction in fuel consumption of 25% compared with older generation competitor aircraft of a similar size. The A330 is one of the most popular wide-body families ever, having received over 1,700 orders from more than 120 customers.

Rostec Ready for 737 MAX Out of Court Deal with Boeing

August 28, 2019 /

MOSCOW (Reuters) – A unit of Russian conglomerate Rostec said on Tuesday it was ready for an out-of-court settlement with Boeing over its order for 35 Boeing 737 MAX jets, a spokesman for Rostec’s subsidiary Avia Capital Service told Reuters.

Boeing MAX 737 jets have been grounded worldwide and airlines are cancelling multimillion contracts following crashes in October and March that killed 346 people.

Earlier on Tuesday, Rostec said its unit had filed a lawsuit in the United States to cancel its order for the 35 MAX jets. The Financial Times, which first reported the move, said Avia Capital Service gave Boeing a cash deposit of $35 million.

A spokesman for Avia Capital Service told Reuters that delivery of the jets was first scheduled for October 2019 but was moved to March 2022. The Rostec unit had paid Boeing a deposit and was suffering losses from non-delivery, he said.

“If Boeing executives show a good will, we are ready to hold talks and find a mutually-beneficial out-of-court settlement for compensation of the losses we have suffered,” he said.

He added that the jets were ordered for a number of Russian air companies, including domestic low-cost firm Pobeda, a unit of the state carrier Aeroflot.

Russia is mainly using Boeing and Airbus jets for passenger flights, with a number of domestic airlines also adding Russian-made regional Sukhoi Superjet aircraft to their fleets.

The Rostec subsidiary now wants the deposit to be returned by Boeing with interest, along with $75 million in “lost profit” and about $115 million in compensatory damages, plus “several times the amount” in punitive damages, the FT said.

Rostec declined to provide further details about the lawsuit.

(Reporting by Gleb Stolyarov; writing by Anton Kolodyazhnyy and Tom Balmforth; Editing by Sherry Jacob-Phillips/Katya Golubkova and Emelia Sithole-Matarise)

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