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AviTrader Weekly News 2018-01-22

AviTrader Weekly News 2018-01-22

WEEKLY AVIATION

WEEKLY AVIATION HEADLINES 8 FINANCIAL NEWS care for investors’ assets. Commenting on the creation of DAE-AIS, Firoz Tarapore, Chief Executive Officer of DAE said: “DAE-AIS will provide a unique offering blending our full platform capabilities with a dedicated service unit led by industry veteran Dan Stone. Dan will be responsible for growing the assets under management of approximately US$850m to US$5bn to address the growing needs of investors in this sector.” Air Partner reports good second half performance Air Partner, the global aviation services group, has released a trading statement ahead of its scheduled update on February 1, and its financial year ending on January 31, 2018. Air Partner reported that it has had a good second half, driven by continued positive performance across all product lines within the Broking division, including strong results in the US and in freight. In Consulting & Training, the forward pipeline remains encouraging. Underlying pre-tax profit for the financial year ending January 31, 2018 is expected to be not less than £6.4m, which compares to £5.1m reported in the same period last year and ahead of market consensus of £5.9m. The group retains a strong net cash position. The acquisition of SafeSkys, a leading Environmental and Air Traffic Control services provider to U.K. & International airports, announced in September, is performing in line with expectations. SafeSkys operations relocated to Air Partner’s London Gatwick HQ in November 2017, and integration has now been completed. (£1.00 = US$1.39 at time of publication.) Industry veterans Eric Adema and Jared Dowell to launch Elevate Capital Partners Elevate Capital Partners (Elevate) is a private investment and asset management firm located in the San Francisco Bay Area that is focused exclusively on making value-based commercial aircraft and aviation-related investments. Elevate specializes in acquiring and structuring leases for mid-life commercial aircraft (typically 10-25 years of age) that enable airlines and investors to realize the maximum value of their capital assets. The principals Reykjavik-Keflavik International Airport Photo: Air BP Air BP, the international aviation fuel products and service supplier, has further extended its reach in the Nordics and is now present at Reykjavik-Keflavik International Airport (KEF/BIKF), Iceland’s largest airport. This marks the first location for Air BP in Iceland and comes in response to increased customer demand from both the business and commercial aviation sectors. Iceland continues to experience major growth in travel and tourism owing to its geographical location between North America and Europe. Over 6.8 million passengers travelled through Reykjavik- Keflavik International Airport in 2016, up 40% on the previous year. The airport currently serves over 90 destinations operated by 26 airlines during its peak summer season. have deep industry knowledge and relationships that span a multitude of airlines and jurisdictions worldwide. The Elevate founders have over 27 years of combined experience in commercial aviation investment and finance, and have acquired, leased, and remarketed over 135 for aircraft with an aggregate asset value in excess of $1 billion. The firm operates with the highest level of integrity, creativity and professionalism in order to Elevate the experience of its customers and investors. OTHER NEWS Frankfurt Airport (FRA) closed the year 2017 with 6.1% growth. More than 64.5 million passengers traveled through Germany’s largest aviation hub. European traffic served as the main growth driver, increasing by 7.4%, while intercontinental traffic rose by 4.9%. FRA’s cargo throughput (airfreight + airmail) advanced by US$3.6 year-on-year to some 2.2 million metric tons. Aircraft movements at Frankfurt grew by 2.7% to 475,537 takeoffs and landings – attributable to increased flight offerings from the airlines. Accumulated maximum takeoff weights (MTOWs) rose by 1.3%, surpassing 30 million metric tons in 2017. In 2017, Ljubljana Airport (LJU) in Slovenia received some 1.7 million passengers (up 19.8%). Lima Airport (LIM) in Peru’s capital recorded a 9.3% rise in traffic to 20.6 million passengers. Combined, the Fraport Twin Star airports of Varna (VAR) and Burgas (BOJ) welcomed nearly 5.0 million passengers, up 8.4% year-on-year. Fraport’s 14 Greek regional airports closed 2017 with a combined total of about 27.6 million passengers, representing a rise of 10.3%. The busiest airports included: Kavala (KVA), where traffic surged by 22.8% to 337,963 passengers; Kos (KGS), posting a gain of 20.7% to some 2.3 million passengers; and Mykonos (JMK) which advanced by 18.6% to about 1.2 million passengers. Antalya Airport (AYT) on the Turkish Riviera performed well again in 2017 – following a difficult

WEEKLY AVIATION HEADLINES 9 OTHER NEWS year in 2016 – with a significant 38.5% traffic gain to 26.3 million passengers. In northern Germany, Hanover Airport (HAJ) also registered a rise of 8.5% to 5.9 million passengers. Pulkovo Airport (LED) in St. Petersburg, Russia, reported significant double-digit growth of 21.6% to 16.1 million passengers, following a slight drop in 2016. China’s Xi’an Airport (XIY) served 41.9 million passengers, up 13.1% year-on-year. Munich Airport’s dynamic growth continued in 2017 with new traffic records in several categories: Passenger traffic increased 2.3 million to a new all-time high of 44.6 million. This was a 5.5% gain over the 2016 figure. The airport also saw a strong surge in take-offs and landings, with an increase of more than 10,000 to approximately 405,000 – a gain of 2.6%. Without the reduction in services by Air Berlin in the summer period, followed by that airline’s bankruptcy, the increase would have been even bigger. Another record is reported by the airfreight segment, which achieved a total turnover of around 379,000 tons in 2017 – a 7% gain over the previous year. As in previous years, passenger growth in Munich benefited in particular from above-average gains in international traffic: The strongest growth was seen in the intercontinental segment, where traffic increased by 7% to 7.3 million passengers. Demand was especially strong for connections from Munich to destinations in the USA. Continental services remained the largest traffic segment with a total of 27.4 million passengers – 6.5% more than in 2016. Within Europe, the strongest growth was seen on routes to and from Greece and Spain. On domestic routes within Germany, traffic increased by more than 2% to over 9.8 million passengers. The percentage of seats occupied was up again in 2017, increasing to 76.5%. Munich also expanded its global route network yet again: With 266 destinations – nine more than in the previous year – passengers at Bavaria’s international hub had more routes to choose from than ever before. The number of airlines offering scheduled services in Munich increased by two to 102. Air Astana has completed the installation of Rockwell Collins’ cabin system, which supports Inmarsat’s GX Aviation in-flight connectivity (IFC) service, across its fleet of three Boeing 767 aircraft. The IFC service is available to both Business and Economy class passengers, who can now connect to the Internet, use various applications for instant messaging and social networks, listen to audio and check their mail using personal computers, tablets or smartphones. Air Astana’s passengers can choose from three connectivity packages. The airline’s Light option covers 15 MB; the Regular option covers 50 MB; and the Super option offers 100 MB. All services are estimated to operate at an average speed of 2 to 5 Mbps. In September 2017, Air Astana became the first airline in the world to offer Inmarsat’s GX Aviation onboard a wide-body aircraft when the installation on its first Boeing 767 was completed. It’s Boeing 767 aircraft are operated on domestic trunk routes and high-density, long-haul routes out of Almaty and Astana. AAR, a leading integrator of aviation supply chain solutions, will provide in-flight connectivity logistics, repair and aftermarket management services to Viasat, a global communications company. Through this partnership, AAR’s OEM Aftermarket Solutions group will manage the aftermarket inventory pool of Viasat components including modems, antennas, radomes, wireless access points (WAPs) and power supply units (PSUs). These components will be deployed on a forwardexchange basis to support Viasat’s current and future airline customers. According to preliminary figures released by the International Civil Aviation Organization (ICAO), 2017 saw a 7.1% increase to a record figure of 4.1 billion for the number of passengers carried by the aviation industry. While the number of departures, globally, rose to circa 37 million, world passenger traffic measured in revenue passenger-kilometers (RPKs) was up 7.6% at 7.7 trillion RPKs. According to ICAO Council President Dr. Olumuyiwa Benard Aliu: “The sustainability of the tremendous growth in international civil air traffic is demonstrated by the continuous improvements to its safety, security, efficiency and environmental footprint. This sustainability is the result of concerted efforts and cooperation at the national, regional, and global levels, particularly in terms of ICAO compliancy, which is key to accessing the global network.” ICAO Secretary General Dr. Fang Liu added that: “Air traffic growth is making key contributions towards the achievement of United Nations Agenda 2030 Sustainable Development Goals, offering an opportunity to lift a generation out of poverty, figuratively and literally. As a UN agency, ICAO is deeply committed to ensuring that all countries have an opportunity to benefit from the doubling in flight and passenger volumes forecast for the next 15 years.” Other than the Middle East, regions recorded stronger growth than in the previous year for international scheduled passenger traffic expressed in terms of RPKs, at 8.0% in 2017, up from the 7.8% recorded in 2016. As far as low-cost carrier (LCC) activity was concerned, its market share continued to increase, particularly in emerging economies. In 2017, LCCs carried an estimated 1.2 billion passengers and accounted for approximately 30% of the world total of scheduled passengers. LCCs consistently grew at a faster pace compared to the world average. Load factors improved to a record high, and in 2017, expressed in available seat-kilometers (ASKs), they increased globally by around 6.4%. As a result, the overall passenger load factor improved by 0.9 percentage points, reaching 81.2%. Underpinned by improving global economic conditions, and world trade with increasing import and export orders, air cargo demonstrated a strong performance in 2017. World scheduled freight traffic, measured in freight ton-kilometers (FTK) increased by 9.5% in 2017, as opposed to 3.8% in 2016. Though jet fuel prices increased, the airline industry anticipates ending 2017 with another record operating profit of approximately US$60 billion, with an operating margin of 8.0%. The net profits for the industry are expected to be around US$36 billion. INDUSTRY PEOPLE • With the arrival of Anup Mysoor at the beginning of 2018, Doric continues to expand its successful aviation business. Mysoor is a longstanding aviation professional. He headed Anup Mysoor the Citigroup aviation business in Asia-Pacific as a managing director for many years. He holds an MBA from Manchester Business School, an MSc in Investment Analysis from the University of Stirling, and a BCom from the University of Mysore. Mysoor joins as a managing partner based in London. He will focus on setting out the Doric aviation strategy and enlarging the aviation platform. • Declan Kelly has been named Chief Commercial Officer for GECAS. In this newly created role, Kelly will lead all originations activities for GECAS’ fixed-wing aircraft and is responsible for the Declan Kelly commercial strategy, building synergy and share practices between GECAS’ regions. Kelly brings 30 years’ experience in the aviation industry, along with deep domain expertise and proven leadership skills to the role. He will report to Alec Burger, President of GE Capital and President and CEO of GECAS. GECAS’ Chief Commercial Officer will be based in Shannon Ireland. Until a replacement is named for his prior role, Kelly will also continue to serve as Executive Vice President, US, Latin America, Caribbean. • GA Telesis has announced the addition of its newest support team, the Government Solutions Group (GSG), to begin supporting

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