Virgin Atlantic has joined global airline leaders including Air France-KLM and Delta Air Lines, with Boston Consulting Group, in the formation of the Aviation Climate Taskforce (ACT) – a new non-profit organization founded to accelerate breakthroughs in emerging technologies to decarbonize aviation.
As the aviation sector focuses on decarbonisation, a portfolio of solutions will be required to reach net zero by 2050 and to scale up sustainable aviation fuels (SAF) to meet a 10% SAF target by 2030. ACT will stimulate innovation in the next generation of technologies, principally focussed on critical medium-term solutions, such as synthetic fuel and direct air capture. Over time, the portfolio will expand to include more near-term solutions, such as emerging bio-based Sustainable Aviation Fuel pathways, and long-term solutions, such as hydrogen technologies. ACT’s mission will be supported by two pillars: an Innovation Network and a Collaboration Forum to help accelerate innovation and expedite adoption.
Earlier this month, Virgin Atlantic announced ambitious carbon targets as part of a renewed mission to achieve net zero by 2050. The targets include increased fleet efficiency and committing to the use of 10% Sustainable Aviation Fuels (SAF) in 2030 and importantly, reinforce the airline’s commitment to embed sustainability through innovation, transparency and accountability to do more for the protection of the planet.
Toulouse, 17 March 2021 – ATR is determined to emerge stronger from the COVID crisis by strengthening its global presence in the next decade and by continuing to offer the most sustainable and modern option for regional air travel.
In 2020, ATR was quick to react to the circumstances by supporting its customers with rapid freight conversion solutions, sanitary tutorials as well as storage and maintenance instructions. Throughout its sites, the company put in place operational and sanitary measures.
Last year, the world’s leading regional aircraft manufacturer delivered 10 aircraft and received six gross orders. Despite the unprecedented market conditions for aircraft manufacturers, 2020 saw nine new operators using ATR aircraft and 84 new routes opened. In addition, ATR operators launched services in three new countries. Last December, the first purpose-built freighter (ATR 72-600F) was delivered to FedEx. Whilst air travel is still in its early phases of recovery, ATR has a clear and actionable plan to overcome the current challenges by continuing to pioneer sustainable and cutting-edge solutions for regional connectivity.
ATR’s plan for recovery includes:
The implementation of incremental improvements into the aircraft family, to enhance operational efficiency and reduce maintenance costs through system upgrades and state-of-the-art avionics, maintaining the competitive and environmental advantage we offer to our customers
Following the delivery of the first new purpose built freighter to FedEx, ATR is well positioned to benefit from the resilience of the cargo market, already at pre-Covid level. Air cargo is expected to double its capacity in the next 20 years, and point to point express deliveries can best be served by our aircraft
The Short Take Off and Landing variant of the ATR42-600 will open a range of opportunities in airports with airstrips between 800 and 1,000 m
Around 900 ageing regional turboprop will need to be replaced in the next years, and a more sustainable, cost-efficient and modern aircraft like the ATR can ensure profitability for its operators.
ATR has already flown with a combination of Sustainable Aviation Fuels (SAFs) and is further investigating its possibilities. To fill the gap from today until new disruptive technologies will be made available, ATR will explore new solutions to further reduce the carbon footprint of the aircraft.
The ATR joint venture was born with the mission to deliver a cost-effective, low fuel consumption aircraft that could reach small or remote airports with little infrastructure and short runways, and continue to pioneer cutting-edge technology fully oriented towards its customers’ requirements and the need to connect local communities with the global economy, healthcare, education and culture.
SAS has selected CFM International LEAP-1A engines to power its new fleet of 35 A320neo family aircraft ordered in 2018. This agreement also includes eight spare engines. In addition, SAS has signed with CFM a Rate-Per-Flight-Hour (RPFH) support agreement to cover its new fleet of LEAP-1A engines, including spares, as well as 15 additional LEAP-1A-powered A320neo on lease.
This new agreement is part of SAS’ fleet upgrade program that aims to improve efficiency and sustainability performances. SAS has been at the forefront of introducing technologies that reduce the impact of aviation on the environment, as well as choosing efficient engines to power its fleet.
SAS was a launch customer for CFM’s advanced LEAP-1A engine that it selected in 2011 to power the first batch of 30 A320neo. SAS currently operates 44 A320neo aircraft and 1 A321neo LR powered by the fuel-efficient LEAP engine and plans to introduce two additional A321neo LR.In total SAS orders for purchased and leased aircraft placed in 2011 and 2018 will enable SAS to increase the fleet of A320neo to 80.
CFM International’s advanced LEAP-1A engine continues to set a new industry standard for fuel efficiency and asset utilization, logging more than seven million engine flight hours in commercial operations. The fleet is demonstrating a 15 percent better fuel consumption and CO2 reductions as well as a significant improvement in noise emissions compared to the best CFM56 engines.
Alaska Airlines first delivery of a 737-9 MAX departs from Seattle's Boeing Field on Jan. 24, 2021.
Alaska Airlines (NYSE: ALK) has accepted delivery of its first Boeing 737-9 MAX airplane, marking a new phase of modernizing the airline’s fleet in the coming years. Alaska pilots flew the aircraft on a short flight yesterday from the Boeing Delivery Center at Boeing Field in Seattle to the company’s hangar at Sea-Tac International Airport with a small group of Alaska’s top leadership on board.
Alaska’s first 737-9 is scheduled to enter passenger service on March 1 with daily roundtrip flights between Seattle and San Diego, and Seattle and Los Angeles. The airline’s second 737-9 is expected to enter service later in March.
Teams from across various divisions at Alaska will now follow a strict readiness timeline that guides the actions that must be taken before the start of passenger flights. The process – involving rigorous rounds of test flying, verifying and specific preparations – will take five weeks:
Maintenance technicians will undergo training to become even more acquainted with the new aircraft. They will receive at least 40 hours of “differences training,” which distinguishes the variations between the new MAX and the airline’s existing 737 NG fleet. Certain technicians will receive up to 40 additional hours of specialized training focused on the plane’s engines and avionics systems.
Alaska’s pilots will put the 737-9 through its paces, flying it more than 50 flight hours and roughly 19,000 miles around the country, including to Alaska and Hawaii. These “proving flights” are conducted to confirm our safety assessments and those of the Federal Aviation Administration (FAA), and to ensure a full understanding of the plane’s capabilities in different climates and terrain.
Our pilots will receive eight hours of MAX-specific, computer-based training prior to flying the aircraft over the course of two days, which includes at least two hours of training in Alaska’s own certified, state-of-the-art MAX flight simulator. That’s where they fly several maneuvers specific to the aircraft and better understand the improvements that have been made to the plane.
Deliveries of Alaska’s 737-9 aircraft by Boeing will be flown with sustainable aviation fuel (SAF), which helps the aviation industry reduce CO2 emissions on a life-cycle basis. The SAF will be used on all MAX aircraft deliveries and will be supplied by Epic Fuels.
Alaska announced a restructured order agreement with Boeing in December 2020 to receive a total of 68 737-9 MAX aircraft in the next four years, with options for an additional 52 planes. The airline is scheduled to receive 13 planes this year; 30 in 2022; 13 in 2023; and 12 in 2024. The agreement incorporates Alaska’s announcement last November to lease 13 737-9 aircraft as part of a separate transaction.
These 68 aircraft will largely replace Alaska’s Airbus fleet and move the airline substantially toward a single, mainline fleet that’s more efficient, profitable and environmentally friendly. The 737-9 will enhance the guest experience and support the company’s growth.
Alaska Airlines receives delivery of its first Boeing 737-9 MAX aircraft on Jan. 24, 2021.
Emirates has revealed that nearly a third of its dedicated fleet of transport buses for cabin crew in Dubai will now operate on biofuel, taking another step forward on its environmental mission to reduce emissions.
The airline’s contracted service provider, Al Wegdaniyah, has committed to operating all road trips with biodiesel provided by Neutral Fuels, one of the UAE’s leading producers of biofuels, utilising locally-sourced, used cooking oil as feedstock.
Emirates commissions a fleet of nearly four dozen buses in Dubai alone, to safely shuttle its cabin crew between their homes and the workplace, clocking an average of 700,000 kilometres in a normal month. Similar to operations in the air, route and schedule planning for ground transport is also an important aspect to maximise transport efficiency and reduce emissions.
The estimated carbon dioxide savings from this initiative alone is 75,000 kg annually, and the airline continues to work with its other transport suppliers to extend this initiative across the transport fleet.
Karl W. Feilder, CEO of Neutral Fuels congratulated Emirates and Al Wegdaniyah for the initiative, pointing out that it is in line with the energy-related sustainability goals that the UAE has committed to achieve by 2050. Using biofuel reduces greenhouse gases and other pollutants, and the change can be easily made because switching from fossil fuel to biofuel requires no modification to diesel engines. It has a positive effect on engines because its lubricating properties help prevent premature wear and failure, and it even acts as a detergent in fuel systems, removing sludge deposits which improves efficiency and reduces maintenance costs.
In addition, Emirates is also currently trialling the use of electric buses airside at Dubai International airport, to transport its crew between the terminal and aircraft.
Over the years, the airline has invested in electric vehicles for its on-ground operations where feasible. For instance, at its state-of-the-art Emirates Engineering Centre in Dubai, which comprises a complex of hangars, workshops, material stores and offices, over 130 electric buggies and 80 electric material handling vehicles including forklifts, are being utilised for day-to-day operations.
Emirates is committed to environmental stewardship, focusing its ongoing efforts in three main areas: emissions reduction, responsible consumption, and the preservation of wildlife and habitats.
Emirates has a comprehensive fuel efficiency programme that actively investigates and implements ways to reduce unnecessary fuel burn and emissions wherever it is operationally feasible, whether in the air or on the ground.
Operating modern and fuel-efficient aircraft has been central to Emirates’ business model from the airline’s inception. This ongoing, multi-billion dollar investment, is Emirates’ biggest commitment – not only to passenger comfort, but also to reducing our environmental impact.
Strong Net Rooms Growth Fuels Nearly 11% Increase in Management and Franchise Fees
CHICAGO (October 30, 2019) – Hyatt Hotels Corporation (“Hyatt” or the “Company”) (NYSE: H) today reported third-quarter 2019 financial results. Net income attributable to Hyatt was $296 million, or $2.80 per diluted share, in the third quarter of 2019, compared to $237 million, or $2.09 per diluted share, in the third quarter of 2018. Adjusted net income attributable to Hyatt was $39 million, or $0.37 per diluted share, in the third quarter of 2019, compared to $37 million, or $0.33 per diluted share, in the third quarter of 2018. Refer to the table on page 14 of the schedules for a summary of special items impacting Adjusted net income and Adjusted earnings per share in the three months ended September 30, 2019.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, “The strength of our brands and the consistent approach we have to operating with excellence and efficiency are serving us very well in this period of volatile economic conditions. In particular, our management and franchise fee growth of nearly 11% this quarter is driven by roughly 13% year-over-year net rooms growth. Further, we have successfully increased productivity and operating efficiency for 23 straight quarters which has allowed us to maintain strong hotel operating margins even in the face of flat RevPAR growth this quarter.”
Third quarter of 2019 financial highlights as compared to the third quarter of 2018 are as follows:
Net income increased 25.4% to $296 million.
Adjusted EBITDA decreased 7.3% to $163 million, a decrease of 6.5% in constant currency.
Comparable system-wide RevPAR was flat, including a decrease of 0.1% at comparable owned and leased hotels. Comparable system-wide RevPAR growth was favorably impacted by approximately 50 basis points from the timing of the Jewish holidays, but was offset by a similar reduction resulting from political unrest in Hong Kong.
Comparable U.S. hotel RevPAR decreased 0.6%; full service hotel RevPAR increased 0.2% and select service hotel RevPAR decreased 2.3%.
Net rooms growth was 13.2%, or 7.9% excluding the acquisition of Two Roads Hospitality LLC (“Two Roads”) in the fourth quarter of 2018.
Comparable owned and leased hotels operating margin decreased 20 basis points to 21.0%.
Adjusted EBITDA margin of 26.9% decreased 280 basis points in constant currency.Mr. Hoplamazian continued, “We continue to execute on our capital strategy and shift our earnings profile while maintaining our focus on global growth. We expect to end the year with approximately 57% of our earnings coming from our hotel management and franchise business, an increase of roughly 400 basis points from 2018. Our pipeline remains robust while continuing to deliver solid organic net rooms growth of almost 8% this quarter, net of the acquisition of Two Roads in the fourth quarter of 2018. While theNote: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 12.
current global operating environment is challenging, we feel confident in our ability to manage through volatility and identify opportunities to strengthen our brands and performance.”
Third quarter of 2019 financial results as compared to the third quarter of 2018 are as follows:
Management, Franchise and Other Fees
Total management, franchise and other fees increased 11.9% (12.5% increase in constant currency) to $148 million. Base management fees increased 17.8% to $64 million, primarily in the Americas management and franchising segment due to the acquisition of Two Roads. Incentive management fees decreased 1.3% to $33 million. Franchise fees increased 11.8% to $37 million. Other fees increased 22.0% to $14 million. Excluding other fees, management and franchise fees increased 10.9% (11.6% increase in constant currency) to $134 million.
Americas Management and Franchising Segment
Americas management and franchising segment Adjusted EBITDA increased 11.2% (11.4% increase in constant currency), driven by higher management, franchise, and other fees from the Two Roads acquisition and recently opened hotels. RevPAR for comparable Americas full service hotels increased 1.5%, occupancy increased 70 basis points, and ADR increased 0.7%. RevPAR growth was driven by strength in certain resort locations outside of the United States and benefited from the timing of the Jewish holidays which had an approximate 110 basis point favorable impact. RevPAR for comparable Americas select service hotels decreased 2.4%, occupancy decreased 40 basis points, and ADR decreased 1.8%. Total Americas management and franchising adjusted revenues increased 29.6% (29.9% increase in constant currency) including revenue from the residential management operations acquired as part of Two Roads.
Transient rooms revenue at comparable U.S. full service hotels increased 1.0%, room nights increased 2.3%, and ADR decreased 1.3%. Group rooms revenue at comparable U.S. full service hotels decreased 0.2%, room nights decreased 2.3%, and ADR increased 2.2%.
Americas net rooms increased 11.5% compared to the third quarter of 2018, or 5.2% excluding Two Roads.
Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising Segment
ASPAC management and franchising segment Adjusted EBITDA increased 0.9% (2.5% increase in constant currency). RevPAR for comparable ASPAC full service hotels decreased 2.0%, reflecting weakness in Hong Kong. Excluding Hong Kong, RevPAR for comparable ASPAC full service hotels would have increased 0.8%. Occupancy decreased 50 basis points and ADR decreased 1.3% for ASPAC full service hotels. Revenue from management, franchise, and other fees increased 4.2% (5.4% increase in constant currency).
ASPAC net rooms increased 17.7% compared to the third quarter of 2018, or 13.7% excluding Two Roads.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 12.
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising Segment
EAME/SW Asia management and franchising segment Adjusted EBITDA increased 4.8% (7.8% increase in constant currency). RevPAR for comparable EAME/SW Asia full service hotels increased 1.6%, driven by strong growth in certain European markets, including France and the United Kingdom, and Southwest Asia, offset partially by weaker performance in Russia which lapped the FIFA World Cup in 2018.
Occupancy increased 290 basis points and ADR decreased 2.6% for EAME/SWA full service hotels. Revenue from management, franchise, and other fees increased 2.2% (4.3% increase in constant currency).
EAME/SW Asia net rooms increased 15.6% compared to the third quarter of 2018, or 14.4% excluding Two Roads.
Owned and Leased Hotels Segment
Total owned and leased hotels segment Adjusted EBITDA decreased 17.6% (16.9% decrease in constant currency), including a decrease of 12.0% (11.4% decrease in constant currency) in pro rata share of unconsolidated hospitality ventures Adjusted EBITDA. Refer to the table on page 11 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to total owned and leased hotels segment Adjusted EBITDA.
Owned and leased hotels segment revenues decreased 3.9% (3.0% decrease in constant currency), and was negatively impacted by non-comparable hotels. RevPAR for comparable owned and leased hotels decreased 0.1%. Occupancy and ADR were both flat.
Corporate and Other
Corporate and other Adjusted EBITDA decreased 22.4% (22.5% decrease in constant currency), inclusive of $6 million of expenses from the Two Roads acquisition.
Corporate and other adjusted revenues increased 19.1% (consistent in constant currency).
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased 1.0%, inclusive of rabbi trust impact and stock- based compensation. Adjusted selling, general, and administrative expenses increased 13.8%, or $10 million, including $8 million of integration costs related to the acquisition of Two Roads. Refer to the table on page 17 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.
OPENINGS AND FUTURE EXPANSION
Twenty hotels (or 4,422 rooms) opened in the third quarter of 2019, contributing to a 13.2% increase in net rooms compared to the third quarter of 2018. Excluding the impact of the Two Roads acquisition, net rooms increased 7.9% compared to the third quarter of 2018.
As of September 30, 2019, the Company had executed management or franchise contracts for approximately 460 hotels, or approximately 92,000 rooms. The Company is expected to open approximately 85 hotels in the 2019 fiscal year.
Note: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 12.
SHARE REPURCHASE/DIVIDEND
During the third quarter of 2019, the Company repurchased a total of 1,776,891 (1,099,507 Class A shares and 677,384 Class B shares) for approximately $133 million. The Company ended the third quarter with 36,811,374 Class A and 66,438,444 Class B shares issued and outstanding. From October 1 through October 25, 2019, the Company repurchased 523,499 shares of Class A common stock for an aggregate purchase price of approximately $37 million. As of October 25, 2019, the Company had approximately $351 million remaining under its share repurchase authorization.
The Company’s board of directors has declared a cash dividend of $0.19 per share for the fourth quarter of 2019. The dividend is payable on December 9, 2019 to Class A and Class B stockholders of record as of November 26, 2019.
CAPITAL STRATEGY UPDATE
In a Form 8-K filed on September 16, 2019, the Company announced the sale of the 1,260-room Hyatt Regency Atlanta for approximately $355 million to an unrelated third party and the entry into a long-term management agreement for the property upon sale.
The Company is in the process of pursuing the sale of one of its wholly-owned hotels and will provide further details as appropriate.
BALANCE SHEET / OTHER ITEMS As of September 30, 2019, the Company reported the following:
Total debt of $1,623 million.
Pro rata share of unconsolidated hospitality venture debt of approximately $564 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.
Cash and cash equivalents, including investments in highly-rated money market funds and similar investments, of $660 million, restricted cash of $140 million, and short-term investments of $63 million.
Undrawn borrowing availability of $1.5 billion under Hyatt’s revolving credit facility.2019 OUTLOOK The Company is revising the following expectations for the 2019 fiscal year:
Comparable system-wide RevPAR is expected to increase approximately 0.5%, as compared to fiscal year 2018.
Net income is expected to be approximately $431 million to $470 million. Please refer to the table on page 13 of the schedules for revised ranges impacting net income.
Other income (loss), net is expected to be approximately $98 million to $103 million, reflecting increased interest income and unrealized gains on marketable securities. The estimated $40 million negative impact related to performance guarantee expense for the four managed hotels in France is unchanged.
Adjusted EBITDA is expected to be approximately $730 million to $745 million, primarily reflecting a one point reduction in expected comparable system-wide RevPAR and the sale ofNote: All RevPAR and ADR percentage changes are in constant dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page 12.
Hyatt Regency Atlanta (as previously reported in a Form 8-K filed on September 16, 2019). Refer to the table on page 13 of the schedules for a reconciliation of Net Income to Adjusted EBITDA.
Depreciation and amortization expense is expected to be approximately $329 million to $334 million.
Interest expense is expected to be approximately $77 million.
Adjusted selling, general, and administrative expenses are expected to be approximately $335 million. This is inclusive of approximately $25 million of expenses related to non-recurring integration costs for Two Roads. Adjusted selling, general, and administrative expenses exclude approximately $33 million of stock-based compensation expense and any potential impact related to benefit programs funded through rabbi trusts.The Company is reaffirming the following information for the 2019 fiscal year:
The Company expects to grow units, on a net rooms basis, by approximately 7.25% to 7.75%, reflecting approximately 85 new hotel openings.
Capital expenditures are expected to be approximately $375 million.
As previously reported in an 8-K filed on September 16, 2019, the Company expects to return approximately $500 million to shareholders through a combination of cash dividends on its common stock and share repurchases.
The effective tax rate is expected to be approximately 25% to 27%.
No additional disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the outlook. The Company’s outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that Hyatt will achieve these results.
