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Avolon: Dublin-based aircraft leasing company Avolon has said that it intends to establish itself as a leader in the Asia/Pacific and Middle East markets, having already leased 26 aircraft to nine airlines between the two regions. In excess of 40% of future aircraft orders are also destined for these regions. Clients include Air Arabia (A320), Indigo (eight A320s), Philippine Airlines (two A320s), Spring Airlines (A320), Flydubai (five Boeing 737-800s), Japan Airlines (four Boeing 737-800s), Skymark (Boeing 737-800), SpiceJet (Boeing 737-800) and Virgin Australia (three Boeing 737-800s). Overall the fleet currently stands at over 80 committed aircraft, valued at circa $4.0 billion (€2.83 billion) with an average age of 1.8 years leased to 21 airlines in 16 countries. Avolon has established offices in Hong Kong and Shanghai under the leadership of Simon Hanson, Head of Asia-Pacific for Avolon and they expect to open a further office in either the Middle East or the Asia-Pacific region in the next 12 months. To finance its portfolio it has raised $3 billion (€2.117 billion) in capital, including $1.1 billion (€777 million) of equity and $1.9 billion (€1.34 billion) of debt. It was recently awarded the Finance Dublin ‘IFSC Deal of the Year 2011’ award for its raising of $1.4 million in launch capital in May 2010 which is a tribute to John Higgins, Avolon President and Chief Commercial Officer and the 28 professionals who work for the company.

AWAS: Dublin based aircraft lessor AWAS, who recently which celebrated its 25th year of serving customers around the globe, has completed two major financial transactions. On 13th June, it announced that it had favourably re-priced its May 2010 $530 million (€374.56 million) Term Loan Facility on revised terms which will allow for increased flexibility supporting AWAS’ growth plans to acquire attractive new and used aircraft. Goldman Sachs Lending Partners LLC (Sole Syndication Agent) and Morgan Stanley Senior Funding, Inc., acted as Joint Lead Arrangers for the deal. On 10th June, it announced that it had secured a $500 million (€353.38 million) non-recourse warehouse facility to aid in its planned expansion and growth. AWAS owns a portfolio of more than 200 modern aircraft with a further 100+ aircraft on order from Airbus and Boeing including a number of next generation aircraft. The aircraft portfolio is on lease to over 90 airline customers in 44 countries. Recently deliveries the first of two planned 737-800s to Solaseed Air, an established Japanese airline formerly known as Skynet Asia Airways and new Airbus A320-200 to Frontier Airlines, an operating unit of Republic Airways Holdings, Inc., headquartered in Indianapolis, Indiana. The delivery of N214FR, an Airbus A320-214 during June is one of three A320 aircraft delivered by AWAS this year to Frontier (the others being N208FR and N208FR). The Solaseed Air Boeing 737-81D, JA801X delivered on 23rd June, is the eleventh aircraft in their fleet. It is their first 737NG, as well as the first to have the Boeing Sky interior. AWAS has also leased Boeing 767-328 (ER), PR-VAN to Northwind Airlines who have re-registered it as VQ-BMU. Boeing 737-53A, VP-BFM was returned from Sky Express and re-registered N249AN.

BAA Ltd: BAA Ltd, the Spanish-owned operator of six British airports handled a total of 9.9 million passengers during June, up 4.4%. Heathrow saw its busiest June on record, with 6.1 million passengers travelling through the airport last month, 6.3% above the previous year. June 2010 saw some impact from industrial action at British Airways. Removing the effects of this, Heathrow achieved underlying growth of around 3.8%. All three Scottish airports, Aberdeen, Edinburgh and Glasgow saw an increase in passengers up 10.1%, 7.6% and 2.6% respectively. Stansted’s traffic was down by 3.3% on last year and there was little change at Southampton (down 0.8%). North Atlantic traffic has been a key driver of Heathrow’s recent performance as well as the large number of transfer passengers. Stansted dependence on point to point traffic and on leisure travel are cited as factors in its poor performance. Meanwhile the Competition Commission is poised to tell BAA that it must sell Stansted airport and one of its Scottish airports (probably Glasgow) over the next 18 months.

Bombardier Aerospace: The Paris Air Show capped a remarkable month for Bombardier’s new family of aircraft with up to $4.7 billion (€3,3 billion) in firm orders, options and purchase rights taken over the week long show for its technologically advanced CSeries airliner and large cabin Global 7000 and Global 8000 business aircraft. This was in addition to signing up three new customers for its all-new CSeries for which the advanced composite wings are manufactured at Bombardier’s Belfast facility. Overall five new customers joined the CSeries program bringing the total to eight. Braathens Aviation (five CS100 and five CS300 aircraft) and three unidentified customers placed firm orders for 33 CSeries aircraft and Korean Air signed a letter of intent (LOI) for up to 30 additional CSeries jetliners. Korean Air, of the world’s most prestigious airlines, has ambitious plans for the aircraft in the Asia-Pacific region, including new routes to China. In addition to the firm orders placed in June, commitments for 49 additional aircraft (options and LOI) were also placed. One of the unidentified customers, who placed a firm order for ten Bombardier CS100 jetliners, is a European first-time buyer of Bombardier aircraft. The other two customers, who wishes to remain unidentified at this time, are a well-established airline (three CS100 aircraft) and a major network carrier (ten CS100 aircraft) who will be the first operator to take delivery of the aircraft. Bombardier has now booked firm orders for a total of 123 CSeries aircraft, including 61 CS100 and 62 CS300 aircraft, together with options for 109 aircraft as well as the Korean Air Letter of Intent for up to 30 aircraft. Other customers for the CSeries aircraft are Republic Airways (40 CS300 aircraft), Deutsche Lufthansa AG (30 CS100 aircraft) and Lease Corporation International Group (17 CS300 and three CS100 aircraft). Also at the Paris airshow, Bombardier received a total of 16 firm orders for their new Global 7000 and Global 8000 ultra long-range business jets valued at over $1.0 billion (€706.7 million).

Dublin Airport Authority (DAA): The DAA Annual Report for 2010, published on 24th June indicated a return to profitability during the year despite continued difficult trading conditions and the significant once-off impact of volcanic ash and extreme weather on passenger volumes. Group profits for the past financial year amounted to €33.1 million which compared to Group losses of €13.3 million in 2009 following exceptional charges that year of €51 million. The improved financial performance was due in part to a significant reduction in costs. The successful implementation of the Group’s Cost Recovery Programme (CRP) will deliver annualised savings in labour costs alone of close to €40 million. Payroll and payroll-related costs declined by 10% to €156 million, as average staff numbers were reduced from 3,168 to 2,971. As part of the programme, all employees earning the annual equivalent of more than €30,000 per year agreed to accept voluntary pay reductions ranging from 5% to 12%, while a voluntary severance scheme and changes in work practices were also introduced.  However, the business environment remained very challenging due to the impact of the economic downturn in Ireland, constrained business and consumer spending in many passenger markets, and contraction of airline services. In addition, there was the exceptional effect of the Icelandic ash cloud last spring and the snow and ice conditions prior to Christmas. This, reduced passenger numbers by up to one million across the three airports with a consequent €13 million hit to the bottom line. Group turnover rose by 2% to €558 million in 2010 due principally to a rise in aeronautical charges and increased sales revenues at the Group’s overseas operations.  Group EBITDA (earnings before interest, taxation, depreciation and amortisation) increased by 17% to €147 million. The Group had cash balances of €477 million at the year-end, compared to €638 million at the end of 2009. The reduction in cash reflected the €228 million capital spend during the year. Gross debt at year-end was €1.24 billion compared with €1.25 billion in the previous year while year-end net debt was €765 million compared to €616 million in 2009. At 31st December 2010 over 70% of the debt had a maturity profile of more than five years. Based on current expectations, the Group’s facilities will secure its funding position until 2015. Profits at DAA’s wholly-owned subsidiary company, Aer Rianta International (ARI), made a significant contribution to the Group’s financial performance. ARI, which manages DAA’s overseas airport investments and airport retailing operations, saw profits increase by 40% to €18.8 million compared to profits in 2009 of €13.4 million before exceptional charges. Passenger numbers across Dublin, Shannon and Cork airports fell by 13% to 22.6 million last year. Factoring out the impact of the exceptional natural events, DAA estimates the underlying decline in passenger traffic was 10%.  The DAA say that the evidence so far this year is that passenger traffic generally is beginning to stabilise and that there is some growth in overseas passenger volumes. However, a return to sustained passenger growth can only happen in tandem with economic recovery.

Flybe Training Academy: On 12th July, Flybe announced its first customer for use of the Dash-8 Q400 Full Flight Simulator at its new multi-million pound Training Academy in Exeter which is Nigerian-based Arik Air. The Flybe Training Academy was officially opened in April and offers technical, pilot, cabin crew and customer service courses in addition to simulator training to regional airlines worldwide. The facility features 26 classrooms, an engineering workshop, and a flight simulator and cabin door trainer complex. In 2012 Flybe will receive delivery of a brand new E-Jet Full Flight Simulator.

General Electric Capital Aviation Services (GECAS): GECAS is one of a number of companies in the Shannon Free Zone engaged in aircraft leasing that also includes Shannon Engine Support and Genesis Lease. It has a fleet of more than 1,800 owned and managed aircraft with about 245 airlines in 75 countries and announced a firm order for 60 Airbus 320neo Family aircraft at the 49th Le Bourget airshow in Paris. Last year it recorded pre-tax losses last year totalling $24 million (€17 million). The loss follows the company recording pre-tax profits of $45.8 million (€32.44 million) in 2009. The directors attribute the pre-tax loss to a drop in revenue from $191 million (€135.19 million) to $144 million (€102 million), with administrative expenses increasing from $146.7 million (€103.8 million) to $168.7 million (€119.45 million). The company is subsidiary of U.S. giant General Electric. GECAS has also announced the delivery of a new Airbus A320 to the Spanish charter airline Orbest Orizonia Airlines formerly known as Iberworld Airlines. Based in Palma de Mallorca Spain, the airline was rebranded and changed its name on 1st May. It was founded by Grupo Iberostar, a tour operator owning Holiday resorts and hotels. In 2006 Grupo Iberostar decided to sell the airline and it became a part of the new Orizonia Group owned by the UK's Carlyle Group (55%), Spain's Vista Capital (36%), the ICG Equity Fund (5%) and ten of the company's managers (4%). The airline operates two Airbus A330-343Xs and six A320-214s, one of which EC-LLX was delivered from Finkenwerder to Norwich for painting on 7th June and has entered service in the new Orbest Orizonia colour scheme. The aircraft visited Dublin on 11th June operating the IWD3405/6. The latest aircraft, the ninth in the fleet comes from GECAS’ existing order book with Airbus. GECAS also announced the delivery of two new Boeing 737-800 aircraft leased to Pegasus Airlines under a purchase-and-leaseback transaction. The aircraft were delivered to Pegasus in May and June and supplement the four new Boeing 737-800 aircraft GECAS purchased and leased back to the airline in April.

The Irish Aviation Authority (IAA): The upward trend in Ireland's air traffic continued in June with a 1.8% increase overall in traffic when compared to the same month the previous year, an average of 1,644 flights through Irish controlled airspace every day. En route flights (flights transiting between Europe and North America and the majority of which do not land in Ireland) increased by 2.1% (to 28,295), when compared to June 2010. Traffic figures for the first six months of 2011 are still subject to distortion when compared to the first half of 2010 due to the impact of the Icelandic volcanic ash crisis in April / May 2010.  However, when adjustments are made to compensate for the volcanic ash, Ireland's en route traffic movements for January to June 2011 show an increase of circa 5% over the same period in 2010. Commercial terminal traffic for Shannon, Dublin and Cork airports rose by 1.5% compared to June 2010. Looking at the June figures for the three State airports reveals the following trends. The number of commercial flights at Dublin at 14,364 was static and averaged 479 movements daily. At Cork it was down 3.5% to 2,237, an average of 72 movements daily while Shannon show showed a dramatic 22.5% fall to 1,555 or an average of 64 movements per day.

Irish Travel Tax: The Minister for Transport, Tourism and Sport Leo Varadkar told the Dáil on 6th July that some proposals for additional capacity and new routes had been put forward by airlines and these proposals were being examined by his Department and by external consultants to assess their potential and impact in the context of whether or not he would suspend the air travel tax. The proposed suspension of the air travel tax was pencilled in for 1st July and indeed the recent enactment of the Finance (No. 2) Act 2011 has provided that legislative basis for that. The Minister said he and his officials had engaged with the Dublin Airport Authority and with the four main Irish airlines about these initiatives and that he wrote to all of the other airlines operating services to and from the State airports. He added that he had “not been comfortable in advising the Minister for Finance that the responses have been sufficient” and the tax would remain. He said some airlines may increase capacity and others may cut it. The real issue he said arises around the schedules for the winter and for next spring. “That creates a certain dilemma. I do not wish to punish the ones that are increasing capacity but one cannot apply one tax to one airline and another to the other one. I should be in a position to make a determination at a later stage”. He concluded “In the event that it does not go ahead for the winter schedules, there is always the possibility of doing it in the spring or using the moneys to promote tourism in another way or to promote flights in another way. I definitely do not want to give the airlines something for nothing. I am not prepared to do that with taxpayers’ money”. Meanwhile The European Commission has welcomed Ireland's decision to remove the discriminatory aspects of its air travel tax, levied on air passenger travel. As originally structured, the tax was levied at a rate of €10 on air passengers whose destination was greater than 300km from Dublin Airport. Shorter flights were taxed at just €2 per passenger. The Commission had expressed its concerns that the tax breached EU law by charging passengers on flights to other Member States more than passengers on domestic flights. In March 2010 the Commission sent Ireland a letter of formal notice in which it set out its concerns with respect to the air travel tax. In December 2010 the Irish authorities informed the Commission of their intention to modify the tax so that effective March 2011 it is levied at a single rate of €3 per passenger, regardless of the destination of the flight. As Ireland now levies the same charge regardless of destination, the Commission confirmed on 16th June that it had decided to close its infringement procedure.

Lufthansa Technik: The Minister for Jobs, Enterprise and Innovation, Richard Bruton, urged management and staff at the Lufthansa Technik Airmotive Ireland plant in Co. Dublin to meet at the Labour Relations Commission to resolve their three-month overtime ban, which could cause the closure of the Rathcoole factory with the loss of 465 jobs. The ban has been imposed by unions, because of management's refusal to pay the last 2.5% pay increase due under the 'Towards 2016' national wage agreement which Lufthansa Technik Airmotive Ireland said it was unable to pay. The company insists that the ban on overtime is having a disastrous impact on its output and orders were being turned away. Following the Minister’s intervention both the company and unions agreed to enter talks at the Labour Relations Commission on 8th July.

Thomas Cook Group plc: European tour operator Thomas Cook Group has launched a "fundamental strategic and operational review" of its UK business prompted by third quarter results - currently being finalised - which are likely to be behind expectations. The underlying operating profit for the three months to 30th June is likely to be around £20 million (€22.8 million), which is £5 million (€5.7 million) lower than the comparable prior year period. The profitability of their UK business continues to be impacted by the difficult trading conditions and the impact of the ongoing political unrest in the Middle East and North Africa. It’s Central Europe, Northern Europe and Germany businesses continue to perform well. Overall, its full-year underlying operating profit is likely to be around £320 million (€364.89 million), some £42 million (€47.89 million) below the equivalent 2010 result, it warned. A Thomas Cook spokesman said it was too early to say what the implications of the review might be for the company's in-house carrier Thomas Cook Airlines, which is the UK's second-largest leisure airline, serving some 80 destinations worldwide from 21 UK airports with a 41-strong fleet consisting of a mix of Airbus A320/321s, A330s, Boeing 757s and 767s. Meanwhile SR Technics has secured a contract renewal with Thomas Cook Airlines, to provide all Line Maintenance support for aircraft at Belfast International Airport. In total approximately 20 transit checks will be performed across the five aircraft types based there (Airbus A320, A321 and A330 and Boeing 757 and 767) each week.

The Department of Transport The Minister for Transport, Tourism and Sport: An efficiency review of the Irish Coast Guard is to being carried out by the Department of Transport, Tourism and Sport, however it will not include the controversial €500 million search-and-rescue contract awarded to CHC Ireland. Instead the review focuses on the delivery of services by the Coast Guard and the Marine Survey Office.

UK Border Agency: A Conservative MP Robert Halfon has raised concerns that Common Travel Area (CTA) agreement between Ireland and the UK allows illegal migrants, Islamists and terrorists into the country without their passports being checked. It has also been stated that UK Border Agency staff at Stansted Airport believe that passport-free travel rules between Ireland and Britain are being exploited to gain entry to the UK. There is no segregation of passengers at Stansted or Gatwick and because of the CTA agreement, they then simply present their boarding cards and are given speedy entry via a channel next to immigration. Officers believe that passengers from other destinations have evaded immigration controls by buying a ticket from an Irish airport and then exiting Stansted by presenting an internet-delivered boarding pass for an Irish flight, even though they flew in from another country. Responding in the House of Commons, Prime Minister David Cameron accepted that the MP had “raised an important point”. He added “I accept that those routes can be open to abuse and we are determined to resolve that. The UK Border Agency is working closely with Ireland and others to make sure that that happens”.

The UK Maritime and Coastguard Agency: On the 14th July, the Secretary of State for Transport, Philip Hammond made a statement on his Government’s intentions for taking forward the process of coastguard modernisation in the light of responses received to a consultation process that ended on 5th May. Readers will recall that the consultation set out proposals to create a nationally networked coastguard system with two maritime operations centres (MOC) - one in the Southampton/Portsmouth area and one in Aberdeen - together with a 24-hour centre at Dover and five daytime-only centres. More than 1,800 responses were received, including many from serving coastguards. Of the total, 27 submissions suggested specific alternative solutions, all with a reduced number of stations but with differing concepts of operations. His Government had concluded that the introduction of one MOC capable of managing incidents anywhere would ensure optimum distribution of work load across the system. Establishing one MOC, rather than the two previously proposed, allows us to address concerns over local knowledge and the robustness of the future concept of operations by retaining one of each of the current paired stations, with the retained centres operating as part of the nationally networked system 24 hours a day rather than during the daytime only. From an Irish point of view, the decision to retain the Northern Ireland coastguard station at Bangor is welcomed. Mr. Hammond said it was being retained “because of the specific requirement to manage the civil contingency arrangements unique to Northern Ireland and the relationship with search and rescue partners in the Irish Republic with whom we co-ordinate closely in air sea rescues in the waters around the island of Ireland”. In summary, the maritime operations centre will be based in the Southampton-Portsmouth area with a disaster recovery back-up facility at the Dover station, which will retain its responsibilities for the Channel Navigation Information Service and will also serve as a sub-centre; and a further eight sub-centres, all operated on a 24-hour basis, located at Falmouth, Milford Haven, Holyhead, Belfast, Stornoway, Shetland, Aberdeen and Humber. The stations at Clyde, Forth, Portland, Liverpool, Yarmouth, Brixham, Thames and Swansea will close progressively over the period between 2012 and 2014-15. The station at Solent will be replaced by a new maritime operations centre in the Portsmouth-Southampton area. The small London station is unaffected by these proposals. The additional costs generated by retaining a total of 10 centres overall, plus London, all operating on a 24-hour basis, and the higher coastguard numbers that will be needed to do so, will be offset by operating only one maritime operations centre, The total number of uniformed coastguards will, as a result of these proposals, fall from 573 at present to 436 once the transformation is completed by 2014-15. That includes coastguards based in the operational centres, coastguards deployed to support the front-line volunteer coastguard and a small number at Maritime and Coastguard Agency headquarters. This decision will be the subject of a further period of consultation which will run until 6th October.

Simtech: Simtech continue to be busy with students from PTC passing through on the MCC courses.