CAPA News Briefs

US Trade Representative increased (14-Feb-2020) the additional duty rate on aircraft imported from the EU from 10% to 15%, effective 18-Mar-2020, and made certain other minor modifications. The US issued a notice of formal adjustments to its WTO authorised retaliation action over EU subsidies to Airbus for large commercial aircraft production. The initial retaliation was implemented on 18-Oct-2019. The WTO authorised the US to take countermeasures on USD7.5 billion in goods after a victory in its unfair trade practices case against the EU, France, Germany, Spain and the UK. [more - original PR] 

Cathay Pacific Group chief customer and commercial officer Ronald Lam stated (17-Feb-2020) 1H2020 will be "extremely challenging financially", adding the group's financial results will be "significantly down" year-on-year. The carrier attributes the downgrade to "additional significant drop in demand for flights and consequential capacity reduction caused by the novel coronavirus outbreak". [more - original PR]

Hainan Airlines Group reported (18-Feb-2020) the following traffic highlights for Jan-2020:

• Passengers: 4.6 million, -35.0% year-on-year;
  
  • Domestic: 4.2 million, -36.4%;
  • International: 369,400, -12.9%;
  • Regional: 17,520, -36.5%;
• Passenger load factor: 74.4%, -9.2pp;
  
  • Domestic: 76.1%, -11.3pp;
  • International: 70.4%, -1.7pp;
  • Regional: 57.0%, -20.5pp;
• Cargo: 42560 tonnes, -21.2%;
  
  • Domestic: 35,500 tonnes, -20.5%;
  • International: 7010 tonnes, -23.5%;
  • Regional: 50 tonnes, -66.0%;
• Cargo load factor: 29.3%, -13.5pp;
  
  • Domestic: 22.7%, -16.0pp;
  • International: 40.1%, -7.4pp;
  • Regional: 6.6%, -16.3pp.
    

Hainan Airlines Group traffic Includes Hainan Airlines, China Xinhua Airlines, Air Changan, Shanxi Airlines, Lucky Air Company Limited, Fuzhou Airlines, Urumqi Airlines, Guangxi Beibu Gulf Airlines and excludes Tianjin Airlines from Nov-2019. [more - original PR - Chinese]

Air India, via its official Twitter account, announced (17-Feb-2020) Rajiv Bansal commenced in his role as Air India chairman and MD.

Singapore Airlines Group reported (14-Feb-2020) it will continue to pursue ongoing strategic initiatives in 2020, including the integration of Singapore Airlines (SIA) and SilkAir and the development of Scoot. It will also continue to invest in Vistara, its JV in India with Tata Sons. [more - original PR]

Australia's Bureau of Infrastructure, Transport and Region Economics (BITRE) reported (17-Feb-2020) the following domestic RPT traffic highlights for Australian airlines for the 12 months ended Dec-2019:

• Passengers: 61.4 million +0.5% year-on-year;
  • Melbourne-Sydney: 9.2 million, -0.6%;
  • Brisbane-Sydney: 4.8 million, -0.1%;
  • Brisbane-Melbourne: 3.6 million, +1.1%;
  • Gold Coast-Sydney: 2.7 million, +0.4%;
  • Adelaide-Melbourne: 2.5 million, +1.6%;
  • Gold Coast-Melbourne: 2.1 million, +3.0%;
  • Melbourne-Perth: 2.1 million, -0.1%;
  • Adelaide-Sydney: 1.9 million, -1.5%;
  • Perth-Sydney: 1.7 million, -1.4%;
  • Hobart-Melbourne: 1.7 million, +1.1%;
• Passenger load factor: 80.8% +0.2pp;
  • Melbourne-Sydney: 85.2%, -0.4pp;
  • Brisbane-Sydney: 83.2%, -0.4pp;
  • Brisbane-Melbourne: 83.7%, +1.4pp;
  • Gold Coast-Sydney: 87.1%, +0.4pp;
  • Adelaide-Melbourne: 81.2%, +0.2pp;
  • Gold Coast-Melbourne: 89%, +1.4pp;
  • Melbourne-Perth: 85.4%, stable;
  • Adelaide-Sydney: 83.8%, +1.1pp;
  • Perth-Sydney: 84.8%, +0.9pp;
  • Hobart-Melbourne: 80.1%, +0.9pp;
• RPKs: +0.3%;
• ASKs: +0.1%;
• Aircraft movements: 636,030 +1.0%;
• Seats: 77.7 million +0.5%. [more - original PR]

Singapore Airlines (SIA) announced (17-Feb-2020) plans to reappoint Campbell Wilson as CEO of Scoot, effective 01-Apr-2020. Mr Wilson will replace Lee Lik Hsin, who will assume the role of EVP commercial at SIA. Mr Wilson previously held the Scoot CEO position from 2012 to 2016. [more - original PR]

IATA reported (13-Feb-2020) passenger revenues stemming from China constitute less than 5% of total passenger revenues for carriers outside Asia Pacific. As a result, the direct impact of the decline in international travel from China due to the coronavirus outbreak will be much lower for airlines based outside Asia Pacific. This revenue loss could be compensated with the decline in fuel prices (18% decline since the beginning of Jan-2020) for some airlines depending on their hedging profiles. IATA noted European airlines would benefit less as they have the highest hedging ratios (on average hedged around 70% for the largest carriers). [more - original PR]

IATA reported (13-Feb-2020) carriers in the Middle East could be vulnerable if travel restrictions related to the coronavirus spread further to the rest of Asia Pacific and if the slow-down in Chinese economy was to impact the travel demand in the region. Under this scenario, the Middle East carriers' exposure increases from 3% of their total base passenger revenue to almost 50% of revenue, as they are connecting the Asia Pacific to the rest of the world, mainly Europe. IATA noted this "poses a substantial business risk for a regional group which has been posting losses even before the virus outbreak". [more - original PR] 

Groupe ADP, via its official Twitter account, reported (18-Feb-2020) the signing of a 25 year concession agreement contract with Africa50 to finance the modernisation and extension of Conakry Airport.

Etihad Cargo and dnata extended (17-Feb-2020) their warehouse and cargo handling partnership to cover 15 locations across four continents until 2023. The agreement now includes locations in North America and South Asia Pacific, with dnata commencing warehouse operations at Toronto Pearson International Airport on 05-Feb-2020, to be followed by Singapore Changi Airport on 01-May-2020. dnata also provides passenger ground and ramp handling services for Etihad Airways at nine global locations. [more - original PR]

Bombardier announced (17-Feb-2020) a formal strategic decision to focus exclusively on business aviation and plans to accelerate its deleveraging through the sale of its rail business. Towards this, Bombardier signed a MoU with Alstom and the Caisse de dépôt et placement du Québec for the sale of Bombardier Transportation (BT). Key details include:

• Bombardier and la Caisse will sell their interests in BT to Alstom at an enterprise value of USD8.2 billion;
• Total proceeds, after deduction of debt-like items and transferred liabilities, including pension obligations, and net of BT cash, are expected to be approximately USD6.4 billion, subject to upward adjustments of up to USD440 million. After deducting la Caisse's equity position between USD2.1 billion and USD2.3 billion, Bombardier would receive net proceeds of between USD4.2 billion to USD4.5 billion, including USD550 million of Alstom shares for a fixed subscription price of EUR 47.50, monetisable after a three month lock-up post-closing, subject to closing adjustments, indemnities and the EUR to USD exchange rate;
• Proceeds will be directed towards debt paydown, with Bombardier to evaluate the most efficient debt reduction strategies;
• Closing is expected in 1H2021, subject to customary regulatory approvals. [more - original PR]