Tag: halted

Boeing Responds to FAA Approval Resuming 737 MAX Operations

November 21, 2020 / WIL BALDWIN

The U.S. Federal Aviation Administration (FAA) today rescinded the order that halted commercial operations of Boeing (NYSE: BA) 737-8’s and 737-9’s. The move will allow airlines that are under the FAA’s jurisdiction, including those in the U.S., to take the steps necessary to resume service and Boeing to begin making deliveries.

“We will never forget the lives lost in the two tragic accidents that led to the decision to suspend operations,” said David Calhoun, chief executive officer of The Boeing Company. “These events and the lessons we have learned as a result have reshaped our company and further focused our attention on our core values of safety, quality and integrity.”

Throughout the past 20 months, Boeing has worked closely with airlines, providing them with detailed recommendations regarding long-term storage and ensuring their input was part of the effort to safely return the airplanes to service.

An Airworthiness Directive issued by the FAA spells out the requirements that must be met before U.S. carriers can resume service, including installing software enhancements, completing wire separation modifications, conducting pilot training and accomplishing thorough de-preservation activities that will ensure the airplanes are ready for service.

“The FAA’s directive is an important milestone,” said Stan Deal, president and chief executive officer of Boeing Commercial Airplanes. “We will continue to work with regulators around the world and our customers to return the airplane back into service worldwide.”

In addition to changes made to the airplane and pilot training, Boeing has taken three important steps to strengthen its focus on safety and quality.

Organizational Alignment: More than 50,000 engineers have been brought together in a single organization that includes a new Product & Services Safety unit, unifying safety responsibilities across the company.
Cultural Focus: Engineers have been further empowered to improve safety and quality. The company is identifying, diagnosing and resolving issues with a higher level of transparency and immediacy.
Process Enhancements: By adopting next-generation design processes, the company is enabling greater levels of first-time quality.

Norwegian Air Shareholders Vote in Favor of Rescue Plan

May 4, 2020 / WIL BALDWIN

OSLO (Reuters) – Norwegian Air <NAS.OL> shareholders backed its financial survival plan on Monday, with more than 95% of votes cast supporting the conversion of nearly $1 billion of debt into equity and raising more cash from its owners.

Approval of the scheme is a vital part of the struggling airline’s plan to tap government credit guarantees as it seeks to overcome the coronavirus crisis, which has compounded its already deep financial problems.

Airlines around the world have been hit hard by the impact on travel of the pandemic, with many forced to turn to governments for state aid to avoid bankruptcy.

The airline, which at the end of last year had amassed debts of around $8 billion, said ahead of the meeting that it had won “strong support” from aircraft lessors for its plan.

With 95% of its fleet grounded due to the coronavirus pandemic, Norwegian Air has said it could run out of cash by mid-May unless shareholders supported the plan.

On Sunday it said bondholders had signed up to the plan, which was narrowly rejected in a vote on Thursday.

Norwegian Air said lessors are now willing to convert at least $730 million of debt into equity, up from $550 million earlier, and talks are ongoing for possible further conversion.

“With the significant contributions from lessors and bondholders, the company expects to convert more than 10 billion crowns ($958 million) in debt to equity,” it said.

Based on the results from the shareholders’ meeting, the company will now proceed with the conversion of bonds and lease debt to shares, as well as the public offering of up to 400 million ($38.4 million) from the sale of new stock, it said.

The debt conversion and share sale will allow Norwegian Air to tap government guarantees of up to 2.7 billion crowns, which hinge on a reduction in leverage, on top of 300 million crowns it has already received.

The plan will hand majority ownership to the airline’s creditors and could leave current shareholders with just 5.2%.

The loan could keep Norwegian Air going until the end of 2020, although further cash may be needed as it eyes a gradual ramp-up next year and normalisation in 2022, albeit with a reduced fleet.

Norwegian Air is only paying invoices vital to maintaining minimum operations, such as salaries for staff still employed and critical IT infrastructure. It has put payments for ground handling, debt and leases on hold.

The Oslo Bourse said it had halted trade in Norwegian Air’s shares until the outcome of the vote is presented.

(Reporting by Terje Solsvik; Editing by Christian Schmollinger, Jason Neely and Alexander Smith)

FILE PHOTO: A Norwegian Air plane is refuelled at Oslo Gardermoen airport

Airbus Warns Staff on Jobs With its ‘Survival at Stake’

April 27, 2020 / WIL BALDWIN

FILE PHOTO: Airbus CEO Guillaume Faury poses before Airbus’s annual press conference on full-year results

By Tim Hepher

PARIS (Reuters) – European planemaker Airbus issued a bleak assessment of the impact of the coronavirus crisis, telling the company’s 135,000 employees to brace for potentially deeper job cuts and warning its survival is at stake without immediate action.

In a letter to staff, Chief Executive Guillaume Faury said Airbus was “bleeding cash at an unprecedented speed” and that a recent drop of a third or more in production rates did not reflect the worst-case scenario and would be kept under review.

Airbus said it did not comment on internal communications.

The letter was sent to employees late on Friday, days before the company is due to give first-quarter results overshadowed by a pandemic that has left airlines struggling to survive and virtually halted jet deliveries since mid-March.

Airbus has begun implementing government-assisted furlough schemes starting with 3,000 workers in France, “but we may now need to plan for more far-reaching measures,” Faury said.

“The survival of Airbus is in question if we don’t act now,” he added.

Industry sources have said a new restructuring plan similar to its 2007 Power8 which saw 10,000 job cuts could be launched in the summer, but Faury indicated the company was already exploring “all options” while waiting for clarity on demand.

People familiar with the matter say Airbus is also in active discussions with European governments about tapping schemes to assist struggling industries, including state-guaranteed loans.

It has already expanded commercial credit lines with banks, buying what Faury described as “time to adapt and resize”.

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Boeing Suppliers Hexcel & Woodward Scrap Merger Plan

April 7, 2020 / WIL BALDWIN

(Reuters) – Boeing Co suppliers Hexcel Corp and Woodward Inc on Monday called off their planned all-stock merger as widespread travel bans to curb the coronavirus pummels demand in the aerospace sector.

The companies, which make and supply aircraft parts, had agreed to a merger in January in a $6.4 billion deal.

“Although we are disappointed with this outcome, we are confident this is the right decision for our customers, our shareholders, and our employees,” the companies said in a joint statement.

The market rout triggered by the coronavirus pandemic and the resulting economic downturn has thrown a wrench into corporate deal making. Last month U.S. printer maker Xerox Holdings Corp walked away from its $35 billion hostile cash-and-stock bid for HP Inc.

Boeing, which halted the production of its grounded 737 MAX aircraft in January, said on Sunday it would extend the suspension of production at its Washington state facilities until further notice.

Boeing is Hexcel’s second-biggest customer, accounting for a quarter of the company’s annual sales. Hexcel also supplies Airbus SE.

Woodward gets about 15% of its annual sales from Boeing, its biggest customer.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta and Devika Syamnath)

Airbus Posts Strong January Orders, Delivers 31 Jets

February 6, 2020 / WIL BALDWIN

PARIS (Reuters) – Airbus <EADSY> posted its biggest January order haul in at least 15 years on Thursday as it booked a major leasing order that has been in the pipeline for several months, and carried out 31 aircraft deliveries.

The European planemaker said it had taken orders for 296 aircraft in January, including the recently finalised order for 102 planes from Air Lease Corp <AL> as well as 100 jets from U.S. low-cost carrier Spirit Airlines <SAVE>. After cancellations, it started the year with 274 net orders.

Cancellations included 20 single-aisle jets from Colombia’s Avianca, balanced by 20 orders for broadly similar aircraft from leasing company BOC Aviation in what some industry sources have described as a swap to ease their financing. Neither firm was available for comment.

Lufthansa <LHA.DE> canceled two A350 wide-body jets.

Rival Boeing, whose sales and deliveries have been affected by the grounding of its 737 MAX, has yet to post January data.

Airbus said on Thursday its deliveries from an overseas assembly plant in China had been halted amid the coronavirus outbreak. Airbus has joined other local companies in extending a routine shutdown planned for Chinese New Year, due to the impact of the health scare on its supply chains and logistics.

Airbus is expected to give targets next week and barring a worsening of the coronavirus crisis could shoot for record deliveries of at least 900 jets in 2020 as Boeing remains on a backfoot due to the MAX grounding, industry analysts say.

(Reporting by Tim Hepher; Editing by Alexandra Hudson)

FILE PHOTO: Logo of Airbus is pictured at the aircraft builder’s headquarters of Airbus in Colomiers near Toulouse

Air Niugini Delays Delivery of Four 737 MAX Jets Until at Least 2024

January 20, 2020 / WIL BALDWIN

A Boeing 737 Max aircraft taxis the runway at the Renton Municipal Airport in Renton

SYDNEY (Reuters) – Papua New Guinea carrier Air Niugini has updated its contract with Boeing Co <BA> to delay the delivery of its four 737 MAX jets on order until at least 2024, the airline’s chief executive said on Tuesday.

The carrier had been due to receive its first 737 MAX this year.

Air Niugini Chief Executive Alan Milne told Reuters the delay would give the airline more time to complete a broader review of its fleet plans, including a replacement for its smaller Fokker jets.

“This will then determine if the MAX is still appropriate for Air Niugini, or whether another Boeing product would better suit as a replacement for the 737/767,” he said, in reference to older models in the airline’s fleet.

Milne said it was possible the 737 MAX orders could be switched to the smaller Embraer SA <ERJ> E2 family if Boeing’s deal to buy the bulk of the Brazilian planemaker’s commercial division closes.

“Air Niugini is a valued Boeing customer and we are working closely with the airline to meet its evolving fleet requirements,” a Boeing spokesman said. “Unfortunately, we do not disclose ongoing customer discussions and have no further comment.”

Some other Boeing customers, including Malaysia Airlines, Virgin Australia Holdings Ltd <VBHLF> and Norwegian Air Shuttle ASA’s <NWARF> leasing arm have also postponed the delivery of 737 MAX jets since the model was grounded globally last March after two fatal crashes.

Boeing confirmed on Monday that it has temporarily halted production of the 737 MAX in Washington State in recent days. The company had said in December it would halt production at some point this month.

(Reporting by Jamie Freed; Editing by Paul Simao and Sam Holmes)