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Airbus Lands MBDA Boss Bouvier To Steer Strategy

PARIS (Reuters) – European missile maker MBDA’s chief executive is returning to Airbus as head of strategy as the planemaker seeks to modernise its factory system and explores future options in defence, two people familiar with the matter said.

Antoine Bouvier, 59, replaces Patrick de Castelbajac who becomes head of Airbus Asia-Pacific, the sources said. Castelbajac’s responsibility for Airbus international operations had already been transferred to sales chief Christian Scherer.

At Airbus, Bouvier will be embarking on a battle of wits with a new strategy head at arch-rival Boeing CO.

Chris Raymond, until recently head of Boeing’s Autonomous Systems business, recently became vice-president for enterprise strategy under finance director Greg Smith, sources said. Raymond’s appointment has not been officially announced.

Airbus and MBDA declined to comment on Bouvier’s appointment, which was first reported by AeroDefenseNews. It is the latest step in a management reshuffle accelerated by the recent official appointment of Guillaume Faury as Airbus CEO.

Bouvier, a former civil servant who narrowly missed out on running France’s DGA defence procurement agency two years ago, brings experience in forging defence partnerships to Airbus, which is embroiled in a row with Germany over arms controls.

He is expected to be replaced at MBDA by former OneWeb chief Eric Beranger.

Although there is fierce day-to-day competition, with Taiwan’s China Airlines opting last week to switch to Airbus, the European planemaker is not expected to exploit the grounding of Boeing’s 737 MAX jetliner for now, industry sources said.

NEXT GENERATION

The future of the Airbus A320neo and Boeing 737 MAX – the industry’s most successful models – is seen as strategically entwined and insiders say Airbus is also worried about the impact of the grounding on global certification..

But the planemakers are crafting crucial strategies for the next generation of single-aisle jets from about 2030 – both likely to define the aircraft industry well beyond mid-century.

Insiders say Faury wants Airbus to focus more on industrial strategy and closing a perceived gap with Boeing in production technology, as well as responding to the threat of increased environmental regulation of air travel, as well as new products.

Airbus must also assess how to respond to rising defence spending after its failure to merge with Britain’s BAE Systems in 2012 left it heavily skewed towards commercial markets that are now approaching the end of an extended upcycle.

It is involved on the German side of a nascent Franco-German fighter project along with French partner Dassault Aviation but faces competition for valuable systems work and a growing spat with the German government over export controls.

At MBDA, Bouvier helped forge an Anglo-French agreement on the use of shared missile technology.

Bouvier followed the classic path of a French mandarin from the prestigious Polytechnique engineering school to France’s ENA civil service academy. He had been linked with a number of top aerospace posts such as Safran and Thales.

“His appointment will be very credible with the French government,” a person familiar with the appointment said. France and Germany own 11 percent each of Airbus.

(Reporting by Tim Hepher; Editing by Luke Baker and Alexander Smith)

Avianca Brazil Gives Up 18 Planes, Cancels 1,045 Flights

RIO DE JANEIRO (AP) — Avianca Brasil canceled more than 1,045 domestic flights this week because it has to return 18 aircraft to leasing agencies.

Brazil’s National Aviation Agency said the planes needed to be returned Monday to avoid affecting Holy Week holiday passengers. Customers can either get refunds for canceled flights or rebook through partner airlines.

Avianca Brasil declined to say how many planes it has left. But the G1 news portal reports that the airline has just seven planes still in its fleet.

On April 1, the airline canceled several international routes from Sao Paulo to New York, Miami and Santiago, Chile.

Avianca Brasil filed for bankruptcy in December after failing to pay leases on its aircraft. The airline, formerly known as Ocean Air, has licensed the name Avianca since 2010 from Colombian carrier Avianca Holdings SA. They are separate companies with the same owners: brothers German and Jose Efromovich. The latter is being investigated for allegedly failing to pay airport fees in Salvador airport in northeastern Brazil.

A company representative from Avianca’s headquarters in Colombia stressed that the Brazilian company is independent from Avianca Holdings group, both operationally and financially. The company said in a statement that flights operated by Avianca Holdings SA from hubs in Bogota and Lima, Peru, to destinations in Brazil will not be affected by the Avianca Brasil cancellations.

Airbus A320 Neo of Avianca at GRU Airport – Guarulhos International Airport, Sao Paulo, Brazil – 2017

Lufthansa Loses Challenge To Aid For Frankfurt Hahn Airport

BRUSSELS (Reuters) – Lufthansa on Friday lost its court challenge against millions of euros in state aid being granted to Frankfurt-Hahn airport to the benefit of rival Ryanair, after failing to prove the payments dented its revenue or market share.

The German carrier took its case to the Luxembourg-based General Court after EU antitrust regulators in 2014 gave the green light to a series of support measures for the airport, which is 82.5-percent owned by China’s HNA Group with the rest held by the German state of Hesse.

The support given to the airport, which is only used by Ryanair and Wizz Air, included capital increases totalling 49 million euros (42.40 million pounds), direct grants and a charging scheme.

The German airline argued that many of the benefits of the aid were passed on to Ryanair, which was not paying high enough airport charges.

But Europe’s second-highest court said that Lufthansa had failed to show it took a financial hit or lost market share as result of the measures.

The airline can appeal at the Court of Justice of the European Union but only on points of law. The case is T-492/15 Deutsche Lufthansa v Commission.

(Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Kirsten Donovan)

German Wind Turbine Maker Senvion Files for Insolvency

FRANKFURT, April 9 (Reuters) – A German court on Tuesday approved an application for insolvency from wind turbine manufacturer Senvion, although the company said it was also continuing to look at new funding options and various potential investors had shown interest.

The Hamburg-based company, which has more than a billion euros of debt, said it had applied for preliminary self-administration proceedings because refinancing discussions with lenders had not yet been successful.

Shares in Senvion were down 40.5 percent at 1519 GMT, having fallen as much as 55 percent earlier in the day.

Senvion has faced delays and penalties related to big projects, while the wind industry as a whole has seen falling prices and increased competition as it moves away from governments guaranteeing generous fixed subsidised tariffs for power towards an auction-based system that favours the lowest bidders.

Market leaders Siemens Gamesa and Vestas have more pricing power, putting smaller suppliers under pressure.

Financial sources had told Reuters Senvion needed at least 100 million euros ($112 million) in the short term to keep operating.

“Lenders and major bond holders are currently continuing intensive discussions around a financing offer to secure the continuation of operations which may allow the company to successfully exit this process,” Senvion said in a statement.

Two financial sources said hedge funds Anchorage and Davidson Kempner were prepared to put up the 100 million euros in loans that CEO Yves Rannou – who took the helm in January – needs to continue restructuring and clear the backlog of orders that has recently cost the company revenues and profit.

The sources said majority shareholder Centerbridge was prepared to accept that but the banks – notably Deutsche Bank and BayernLB – would still need to agree. The banks have lent Senvion a total of 950 million euros.

BayernLB and Deutsche Bank declined to comment.

Senvion also has 400 million euros in bonds bought by hedge funds including Anchorage and Davidson Kempner.

Senvion said its management board would remain in office under the initiated procedure and business operations would carry on, with both existing service and maintenance contracts continuing.

The company said the preliminary self-administration proceedings affected Senvion GmbH and a subsidiary called Senvion Deutschland GmbH. It said Senvion S.A., Senvion Topco GmbH and Senvion Holding GmbH were expected to file for insolvency later this week.

Senvion’s website says it has around 4,000 employees globally.

(By Alexander Hübner and Michelle Martin, Additional reporting by Hans Seidenstuecker; Editing by Tom Sims and Mark Potter)

Air Canada Delays Launch of Seasonal Routes

(Reuters) – Air Canada said on Tuesday it would delay the launch of certain seasonal flights this spring, as the carrier wrestles with the challenge of servicing routes previously flown by its grounded Boeing 737 MAX aircraft.

Canada’s largest carrier said it would put off the launch of at least five seasonal routes, including delaying its Vancouver to Boston service to June 16 from June 1.

Montreal-based Air Canada said a previously-announced halting of flights from two Eastern Canadian cities to London’s Heathrow airport would now remain suspended until May 31.

Air Canada, which previously suspended its 2019 financial forecasts, has removed 24 MAX jets from its flight schedule until July 1, following grounding of the Boeing jets after two recent crashes involving the model.

The global grounding, following the crash of an Ethiopian Airlines flight in March, has left U.S. and Canadian airlines with the logistical challenge of replacing the popular roughly 175-seat MAX on certain routes, at a time of rising passenger demand.

The Canadian carrier has been flying alternative planes or consolidating flights into larger jets that were previous flown more frequently on smaller aircraft.

Air Canada has also said it is speeding up the integration of four Airbus A321 aircraft it acquired in late December from Iceland’s cash-strapped WOW air.

Air Canada is “accommodating as best as they can,” said AltaCorp analyst Chris Murray. “At the same time, there is still some uncertainty about when the MAX grounding notice is going to be lifted.”

On Monday, Boeing said it planned to submit a proposed software enhancement package for the grounded 737 MAX in “the coming weeks” after the company had previously said it planned to deliver the fix for government approval by last week.

Anglo-German tour operator TUI said last week that its profit would fall by at least 200 million euros ($223.96 million) this year due to the cost of substituting for the MAX planes, along with loss of business and lower fuel efficiency from the replacement aircraft.

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shinjini Ganguli and Bill Berkrot)

German Government in Talks with Airbus on 600 million Euro A380 Loan

BERLIN (Reuters) – The German government on Monday said it was in talks with Airbus about 600 million euros (514 million pounds) in outstanding loans for developing the A30 superjumbo jet, which Airbus now plans to scrap.

A spokeswoman for the German Economy Ministry confirmed the value of the outstanding loans, first reported by Funke Mediengruppe newspaper chain, but said it was premature to discuss how the issue would be resolved.

“We are analysing the consequences and discussing the issue with the company,” the spokeswoman told a regular government news conference.

(Reporting by Andreas Rinke and Tassilo Hummel; Writing by Andrea Shalal; Editing by Michelle Martin)

A380-family-stage

Ariane 6 Rocket Seeks First Commercial Deals

BREMEN, Germany (Reuters) – Ariane 6, Europe’s next-generation space rocket, is expected to win its first two commercial launch orders in coming weeks, company officials said, a key milestone as the European launcher vies for orders against Elon Musk’s U.S. competitor SpaceX.

Operator Arianespace faces increased competition from SpaceX and Blue Origin, owned by Amazon CEO Jeff Bezos. Japan and India also pose a growing challenge.

Ariane 6 has three institutional orders in hand from the European Commission and France and is close to signing deals with two commercial customers, said Mathias Spude, spokesman for ArianeGroup, a joint venture of Airbus and Safran, that is the majority stakeholder in Arianespace.

ArianeGroup has invested 400 million euros (£347 million) of its own funds in the 3.4-billion-euro development of Ariane 6 – a project key to ensuring Europe’s independent access to space and a market valued at over $1 trillion by 2040.

Manufacturers say the rocket will be more versatile than Ariane 5, able to carry out missions from placing as many as 90 small satellites in low-earth orbit to taking classic spy satellites to far higher perches in geostationary orbit.

But the business case depends on drumming up enough commercial business to augment the 5-6 institutional launches expected in Europe annually in coming years, about a quarter of those planned in the United States.

European governments also face industry pressure to use Ariane 6 even if they could get cheaper rides using SpaceX.

“Europe continues to need its own access to space – the market of the future,” said Matthias Wachter with the BDI German Federation of Industry. “It doesn’t make sense to use European tax money to develop our own rocket but then launch satellites with competitors from the United States or Asia.”

Ariane 6, due for a first launch in 2020, was designed to save significant costs compared to Ariane 5, but industry experts say it will still cost around 70 million euros per launch – well above the rate offered by SpaceX, which uses reusable rocket technology and can count on larger U.S. orders.

Ariane 6’s designers insist innovative production techniques will favour the European launcher when the commercial market recovers from a recent slump.

“When it wakes up … we will be on the market with a rocket that is 40 percent cheaper, and will continue to reduce costs after that,” Spude told Reuters at the Ariane 6 production site.

Still, experts say SpaceX is widely credited with jolting the overall market with a keen focus on cutting costs, forcing Europe to shake up its launch industry.

(Reporting by Andrea Shalal, Editing by Tim Hepher)

Canada Bids for Mothballed German Prototype Drone

BERLIN (Reuters) – The German Defence Ministry is evaluating a bid from Canada to buy a high-altitude surveillance drone prototype that has been parked at a German air base for years after the cancellation of the Euro Hawk programme in 2013.

A formal bid for the prototype aircraft, which was demilitarised by the United States in 2017, was received from Canada, a ministry spokesman said on Wednesday without providing further details. The Canadian embassy in Berlin had no immediate comment.

NATO was also considering a bid for the drone, but had not yet submitted it, according to sources familiar with the process.

A sale of the drone would end an embarrassing chapter that raised concerns about the German military’s procurement process and triggered the transfer of former Defence Minister Thomas de Maiziere to another cabinet post.

The German government told lawmakers last year that it had spent about 700 million euros ($793.5 million) on the Euro Hawk prototype built by U.S. arms maker Northrop Grumman and the ISIS surveillance system built by Airbus.

Berlin initiated plans in 2000 to buy five Euro Hawk drones based on Northrop’s Global Hawk unmanned system at a cost of about 1.2 billion euros but later cancelled the programme because of cost overruns and problems obtaining certification for use in civilian airspace in Germany.

It had only received the one prototype aircraft that is now being sold.

Berlin is now negotiating with Northrop to buy several MQ-4C Triton drones for delivery after 2025. Northrop last year said the process could take years to complete.

German opposition lawmaker Andrej Hunko, a member of the radical Left party, said the German government had declared the aircraft incapable of flight after the U.S. Air Force removed key systems.

“The airplane has salvage value at best,” he told Reuters.

“Any proceeds from the sale would be a drop in the bucket, compared with the huge amounts spent on the programme.”

For NATO, the drone could provide additional support to the fleet of five high-altitude unmanned Global Hawk planes it agreed to buy from Northrop in 2012 for $1.7 billion, along with transportable ground stations.

Industry officials said the Euro Hawk saga highlighted problems in German military procurement, noting that NATO’s sister aircraft regularly traverse German air space to conduct surveillance missions over the North Sea. They also have no blanket approval for use in German civilian airspace but use case-by-case permissions from air traffic authorities.

It was not immediately clear what steps would be needed to return the German Euro Hawk prototype to flight.

($1 = 0.8821 euros)

(Reporting by Andrea Shalal, Editing by Riham Alkousaa and David Goodman, William Maclean)

Embraer Signs Contract to Support Germany’s WDL Aviation E190s fleet

Amsterdam, The Netherlands, February 7th, 2019 – Embraer and WDL Aviation GmbH, a German charter and ACMI airline headquartered at Cologne Bonn Airport and part of the Zeitfracht logistics group, have signed an agreement on a Flight Hour Pool Program to support the airline’s recently leased fleet of four used E190s.

WDL, which becomes a new Embraer E-Jet family customer in 2019, leased the aircraft to replace their current fleet. They will start flying the E190s from March 2019.

The Pool Agreement, which will be in effect during the duration of the lease, covers access to a large stock of components at Embraer’s distribution center in Paris (France), full repair coverage and a selected list of essential components, parts and services to support the start of aircraft operations.

WDL Aviation is a leading provider of ACMI (Aircraft, Crew, Maintenance, Insurance) services in Europe. With the Pool Program, part of the TechCare suite of services that Embraer offers to support the growing fleet of Embraer aircraft worldwide, WDL will have the flexibility to access the parts and support the fleet quickly.

“It’s great to welcome WDL Aviation and provide efficient services and support solutions to their Embraer fleet. Our mission is to keep our customer happy every day and to also ensure the satisfaction of their end customers. This makes our portfolio the most competitive, setting the market’s highest standards”, said Johann Bordais, President & CEO, Embraer Services & Support.

“Support directly from the OEM is a huge advantage and we are looking forward to working with Embraer. This partnership fits naturally with the company’s growth strategy as it leverages increased competitiveness providing repairable solutions through reduced lead times and costs, guaranteeing our daily operations and customer satisfaction”, said Walter Böhnke, managing director of WDL Aviation.

Embraer’s Flight Hour Pool Program, which currently supports more than 40 airlines worldwide, is designed to allow airlines to minimize their upfront investment on expensive repairable inventories and resources and to take advantage of Embraer’s technical expertise and its vast component repair service provider network. The results are significant savings on repair and inventory carrying costs, reduction in required warehousing space, and the elimination of resources required for repair management, while ultimately providing guaranteed performance levels.

This Pool Program is part of a suite of services that Embraer offers or has under development to support the worldwide growing fleet of Embraer aircraft through TechCare, the new Embraer platform that assembles the entire portfolio of products and solutions to deliver the best experience of services and support.

Avianca Brasil Lessor Set to Seize 20% of Airline’s Fleet

SAO PAULO, Jan 11 (Reuters) – Lessor Aircastle is set to repossess 10 jets from Avianca Brasil, the country’s No. 4 airline, after a bankruptcy hearing on Monday, a source familiar with the matter said, potentially disrupting flights for thousands of passengers.

The 10 Airbus A320 planes represent more than 20 percent of Avianca Brasil’s current fleet, according to data provided by Brazil’s aviation regulator, raising doubts about the carrier’s ability to fly its full flight schedule if the aircraft are seized.

And it could lose more planes in the future. Lessor GE Capital Aviation Services and an affiliate are seeking to repossess 12 Airbus A320s from Avianca Brasil, according to James Luton, a GE spokesman.

When the airline filed for bankruptcy protections last month, the airline discussed the possible loss of 14 planes, which it said would affect 77,000 passengers over a three-week period.

A representative for Avianca Brasil declined to comment. The bankruptcy filing came after years of mounting losses and late aircraft payments.

Bankruptcy filings, while providing protection from creditors, do not cover leases, the source of the carrier’s entire 46-aircraft fleet.

Between the end of 2016 and September 2018, Avianca Brasil’s liabilities to aircraft lessors quintupled to 415 million reais ($112 million), according to the carrier’s financial statements.

Still, a Brazilian bankruptcy judge stayed a decision that would have allowed Aircastle to repossess the planes last month. That stay, however, expires on Monday.

Since the stay was issued, the source said, Avianca Brasil has not made any proposal to Aircastle that would have allowed the carrier to keep the planes. Avianca Brasil owes Aircastle more than $30 million, the source added.

The stakes are also high for Aircastle, as Avianca Brasil is its largest single customer, representing some 7 percent of its net book value, according to the lessor’s financial disclosures.

Avianca Brasil is separate from the better-known Avianca Holdings SA, which is based in Colombia. But they share the same owner, a family company owned in part by Bolivian-born airline entrepreneur German Efromovich.

United Continental Holdings gave the family company a $500 million loan last November.

Neither party has revealed why the loan was needed, but Efromovich has been sued for failure to repay his debts in the United States and Brazil in recent years.

($1 = 3.7138 reais)

(Reporting by Marcelo Rochabrun)

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