Dublin-based aviation finance company, Avolon, has reported impressive performance in the third quarter of the year, with notable aircraft sales, lease transactions, and strategic developments.

Aircraft Sales and Lease Transactions

In a recent trading update, Avolon revealed its substantial achievements in the aviation sector during the third quarter. The company successfully sold 14 aircraft and secured letters of intent for the sale of an additional 15 aircraft. These transactions underline Avolon's active role in aircraft trading and its commitment to serving the aviation industry.

Avolon's influence in the aircraft leasing market continued to expand, with a total of 43 lease transactions executed between July and September. These transactions encompassed new leases, follow-on leases, and lease extensions, reflecting Avolon's diverse and growing clientele.

Moreover, the company delivered seven new aircraft and smoothly transitioned four aircraft to seven different customers. This demonstrates Avolon's dedication to providing tailored solutions to a wide range of airlines, reinforcing its reputation as a trusted partner in the aviation sector.

Strategic Expansion with Airbus

Avolon's strategic vision was further exemplified by its partnership with Airbus. The company placed an order for an additional 20 A330neo aircraft, further cementing its commitment to modernizing its fleet and providing fuel-efficient, state-of-the-art aircraft to its customers. In an era marked by environmental concerns and the pursuit of sustainability, Avolon's investment in the A330neo showcases its dedication to reducing the carbon footprint of the aviation industry.

Notably, Avolon received the first of these A330neo aircraft during the third quarter, signaling the beginning of an exciting new chapter in the company's growth and sustainability efforts.

Global Reach and Expanding Customer Base

Avolon's global presence continued to expand as it welcomed a new customer, bringing its total base to 147 airline customers spread across 65 countries. This international footprint underscores Avolon's ability to serve airlines on a global scale and adapt to the unique needs of diverse markets.

At the end of the quarter, Avolon proudly managed an impressive fleet of 568 aircraft, both owned and managed. Additionally, the company had orders and commitments for 329 fuel-efficient, new technology aircraft, solidifying its position as a forward-thinking industry leader.

Financial Performance

In the second quarter of the year, Avolon reported robust financial results. Lease revenues reached $613 million, marking a significant year-on-year increase of $74 million or 14%. Net income exhibited remarkable growth, surging nine-fold from $8 million to $76 million. These financial achievements are a testament to Avolon's resilience and adaptability in navigating the challenges posed by the global aviation industry.

Avolon maintained a strong liquidity position, boasting $7.3 billion in liquidity and total assets of just under $30 billion. This financial stability positions the company well for future growth and continued support of its customers.

Conclusion

Avolon's outstanding performance in the third quarter of the year highlights its enduring commitment to the aviation industry's growth, sustainability, and customer satisfaction. With strategic aircraft orders, a global presence, and impressive financial results, Avolon continues to be a major player in aviation finance, poised for a promising future in the dynamic world of aviation.

With Inputs from Avolon, Business Plus

In a recent development, CFM International, a renowned powerplant manufacturer, has identified a significant number of engines containing parts sourced from AOG Technics, a company currently facing allegations of distributing unapproved parts. This revelation has sparked concerns within the aviation industry, as the affected engines include CFM56 engines, commonly used in early Airbus A320-family and Boeing 737 models.

The Controversy Unfolds

CFM International and its partner, GE Aerospace, have uncovered a troubling aspect of the controversy surrounding AOG Technics. They identified 92 falsified European Union Aviation Safety Agency (EASA) forms and one Civil Aviation Administration of China (CAAC) form associated with 61 different part numbers on CFM56 engines. Additionally, two falsified U.S. Federal Aviation Administration (FAA) forms were discovered, which related to parts used in CF6 engines, typically installed on widebody aircraft.

Sixteen of the 126 CFM-identified engines with AOG-sourced parts are in CFM-associated shops. CFM examined all of its external material suppliers (587 in total) and discovered four occasions when AOG parts entered its own facilities, one of which was through CFM Materials. The remaining 110 engines are housed at the premises of other organizations.

The CFM56 engines are widely used, making this discovery a matter of great concern. The engine manufacturer has emphasized its commitment to resolving this issue promptly while ensuring aviation safety remains a top priority.

Response from CFM International

CFM International has been proactive in addressing the situation. The company has stated that it is actively working to determine the full extent of AOG Technics' alleged sale of parts with fraudulent paperwork. Furthermore, they have clarified that their Leap engine family, which is fitted to modern aircraft like the A320neo, 737 Max, and China's Comac C919, is not implicated in this controversy.

The company has not reported any operational issues stemming from the suspect parts identified. These parts primarily consist of non-serialized components such as bolts, nuts, washers, dampers, and seals. Additionally, CFM International has not found any fraudulent documents linked to life-limited parts, which are critical for the safe operation of aircraft.

Collaborative Efforts and Removal of Unapproved Parts

CFM International has been working closely with operators to ensure the swift removal of unapproved parts from their engines, following the recommendations issued by regulatory agencies. Importantly, the manufacturer is undertaking the removal of AOG-related parts at no cost to the operators, demonstrating their commitment to safety and integrity in the aviation supply chain.

Investigation Continues

CFM International's latest findings are based on the information submitted by AOG Technics after a UK court-imposed deadline, following a hearing on September 20, 2023. As the engine manufacturer continues to investigate the new information provided by AOG Technics, the total number of engines and parts affected may change.

Conclusion

The revelation of engines containing parts with fraudulent paperwork sourced from AOG Technics has raised concerns within the aviation industry. CFM International, in collaboration with regulatory agencies and operators, is actively addressing the issue to ensure the safety and integrity of the global aviation supply chain. While the impact of this controversy continues to unfold, the aviation community remains committed to keeping unapproved parts out of circulation and upholding the highest standards of safety in air travel.

With Inputs from Flight Global

In a significant development for British Airways (BA), the airline is on the cusp of finalizing a long-term wage agreement with its pilots that promises to bring stability and peace to the skies. The deal, which has been the subject of months of negotiations, is expected to receive the green light from the British Airline Pilots' Association (BALPA) and subsequently end the specter of strike action until at least 2027.

The Landmark Agreement

After intensive discussions, British Airways is poised to announce a landmark three-and-a-half-year wage agreement that will reshape the financial landscape for its pilots. Key components of the agreement include:

Salary Increases: BA pilots are set to receive a series of salary increases over the next few years. The agreement kicks off with a 4% salary increase for this year, retroactive to June, followed by 1.5% increases in December and 2.5% in June of the following year. An additional 2% increase is scheduled six months later.

Continued Growth: This positive trajectory continues with a 0.5% salary increase in March 2025, followed by substantial 2.5% increases in June of that year and June 2026.

One-time Payment: Pilots are also in line for a one-time payment of £1,000 in November, providing a welcome financial boost.

Performance-Based Incentives: In a forward-looking move, British Airways has introduced a new incentive program tied to the airline's operating profit performance. This program holds the potential for pilots to receive incentives worth thousands of pounds, providing an extra layer of motivation and reward.

Future Salary Review: To ensure continued fairness and competitiveness, the next pilot salary review is slated for January 2027.

Response and Context

The BALPA agreement is a significant development for British Airways, coming on the heels of unions representing approximately 24,000 other BA staff securing a 13% pay increase spread over 18 months. This agreement signals the airline's commitment to supporting its employees during a period marked by ongoing cost-of-living pressures.

A representative for British Airways expressed their satisfaction with the agreement, stating, "We are pleased that we have now reached an agreement in principle for the pilot pay award 2023-27. BALPA will now ballot its members on the agreement in principle. The pay offer builds on a number of pay and reward changes made in 2022 to support colleagues throughout the business at a time of ongoing cost of living pressures."

Stability in the Skies

The impending wage agreement between British Airways and BALPA brings a welcome sense of stability to the airline industry. The prospect of strike action, which could have disrupted travel plans and affected passengers, has been averted. The agreement is expected to provide a strong foundation for the airline and its pilots to work together harmoniously for years to come.

As British Airways takes this significant step forward, it reinforces its commitment to its employees and its determination to navigate the challenges of the aviation industry while providing top-tier service to its passengers. With this agreement, both parties have achieved a positive outcome that promises to benefit everyone involved in the British Airways family, from pilots in the cockpit to passengers in the cabins.

A Promising Future for British Airways

The impending agreement not only offers immediate financial benefits to British Airways pilots but also sets a positive precedent for the airline's future endeavors. As the aviation industry continues to grapple with various challenges, this accord showcases British Airways' dedication to its workforce and its commitment to fostering a harmonious labor-management relationship.

The substantial salary increases, coupled with the one-time payment and performance-based incentives, acknowledge the invaluable contributions of the airline's pilots. Furthermore, by linking rewards to the company's operating profit, this agreement aligns the interests of the pilots with the overall success and profitability of British Airways. It reflects a forward-thinking approach that aims to incentivize excellence and innovation.

For passengers, this agreement brings the assurance of uninterrupted travel plans and the knowledge that the skilled and experienced British Airways pilots will continue to provide safe and reliable flights. Travelers can take comfort in the fact that the airline is proactively addressing the needs of its employees, ensuring that they remain motivated and committed to delivering exceptional service.

Moreover, in a broader context, this agreement underscores the importance of fair compensation and collaborative negotiations within the aviation industry. It serves as a reminder that a well-balanced relationship between airlines and their employees is essential for the sector's long-term sustainability.

As British Airways embarks on this new chapter, it remains committed to upholding its reputation as a world-class carrier. The airline's ongoing efforts to support its workforce and adapt to changing industry dynamics are commendable. It is evident that British Airways is proactively addressing the evolving landscape of air travel, striving to provide passengers with seamless, comfortable, and secure journeys.

Conclusion

The imminent long-term wage agreement between British Airways and BALPA marks a significant milestone in the airline's history. It not only secures the immediate financial well-being of its pilots but also lays the groundwork for a more prosperous and cooperative future. The agreement reflects British Airways' commitment to its employees and passengers, ensuring the continued delivery of exceptional service.

As the airline industry faces a multitude of challenges, this accord serves as a beacon of stability and unity. It demonstrates the potential for constructive labor-management relationships to drive success in a competitive and ever-changing market.

With this agreement, British Airways reaffirms its position as a leading global airline, dedicated to providing safe, reliable, and enjoyable journeys for travelers worldwide. As passengers board British Airways flights, they can do so with confidence, knowing that the skies remain clear and that the airline's pilots are focused on delivering exceptional experiences at every altitude.

With Inputs from Sky News

On Thursday, October 5, 2023, a significant development unfolded in the ongoing insolvency proceedings of Go First, as the National Company Law Appellate Tribunal (NCLAT) granted aircraft lessor Bluesky 19 Leasing Company permission to inspect the planes it has leased to the beleaguered airline.

This marks the third instance of the appellate tribunal awarding relief to lessors, following similar rights granted to engine lessor Engine Lease Finance BV (ELFBV) and aircraft lessor Jackson Square Aviation Ireland.

Background

Go First, formerly known as GoAir, has been grappling with financial challenges, leading it to enter insolvency proceedings. In the midst of this crisis, various lessors of the airline's assets have sought legal recourse to safeguard their interests. Engine Lease Finance BV was the pioneer among Go First's lessors, approaching NCLAT in August to secure inspection rights for its four engines. Jackson Square Aviation Ireland followed suit, seeking similar permissions.

Bluesky 19 Leasing Company's Appeal

Bluesky 19 Leasing Company joined the ranks of Go First's lessors seeking recourse by appealing to NCLAT. Their request for clarification went beyond inspection rights, as they sought to understand the extent of a lessor's authority in opposing issues other than inspection. However, the NCLAT bench declined this request, asserting that their previous ruling in the ELFBV case had already provided a clear and unambiguous precedent on the matter.

Go First's Resolution Professional's Opposition

The counsel representing Go First's resolution professional opposed Bluesky 19 Leasing Company's appeal, arguing that the Delhi High Court had already addressed the matter in a previous order issued just a month earlier. According to Go First's legal team, this prior order comprehensively covered the rights and responsibilities of lessors, and therefore, there was no need to seek inspection rights from the appellate tribunal separately.

Implications and Future Developments

The NCLAT's decision to grant Bluesky 19 Leasing Company inspection rights underscores the complexity of insolvency proceedings involving airlines and their lessors. This decision could set a precedent for future cases involving similar disputes, shedding light on the rights and obligations of lessors in insolvency scenarios.

However, the debate over the scope of a lessor's authority in opposing issues other than inspection remains unsettled. While the NCLAT has declined to clarify this matter further, the dispute highlights the need for greater legal clarity in insolvency proceedings to protect the interests of all parties involved.

As the Go First insolvency case unfolds, it will be essential to monitor how these developments impact the overall resolution process and the fate of the beleaguered airline. The decisions made in this case could have far-reaching implications for the aviation industry and its stakeholders, setting important precedents for future insolvency cases.

Conclusion

The NCLAT's decision to grant Bluesky 19 Leasing Company inspection rights in the Go First insolvency case marks a significant milestone in the ongoing proceedings. While the tribunal declined to provide further clarity on the extent of lessors' authority, the case highlights the complexity of such disputes in the aviation industry. As the legal battles continue, the outcome of the Go First insolvency case will have broader implications for the aviation sector and the resolution of similar cases in the future.

With Inputs from Economic Times

The creditors of the grounded carrier Jet Airways raised questions over the source of INR 200 crore deposited by the Jalan-Kalrock Consortium before the insolvency appellate tribunal NCLAT and said it does not align with the resolution plan.

Additional Solicitor General (ASG) N Venkataraman, representing lenders including SBI and other banks, told the National Company Law Appellate Tribunal (NCLAT) that there are apprehensions about the source of funds, which deposited money for Jalan-Kalrock Consortium's (JKC). "The payment is not compliant with the resolution plan as it mandates that the money is to be paid through JKC," ASG submitted before a three-member NCLAT bench headed by Chairperson Justice Ashok Bhushan. He also alleged that there are apprehensions the money could have been laundered.

The lenders sought some time to file a reply over the JKC's compliance affidavit, which was accepted by the appellate tribunal. Meanwhile, senior advocate Krishnendu Datta, representing the consortium, said only a part of the money came from another source while the majority of the amount was paid by Murari Lal Jalan. He further alleged, "Lenders are objecting to every move since they do not want to transfer Jet's ownership." The lenders also expressed apprehensions about the consortium’s foreign partner Florian Fritsch, pointing out that his properties were searched in 2022 as part of a larger fraud and money-laundering probe. 

NCLAT has directed listing the matter for the next hearing on October 12. This is in light of the latest application filed by the CoC (committee of creditors) to stay the implementation of the approved resolution plan recently in NCLT.” The NCLAT has directed the lenders to file their objections by the next date of hearing.

Payment by the Consortium

Jalan Kalrock Consortium (JKC) is led by UAE-based businessman Murari Lal Jalan and London-based Kalrock Capital, which is promoted by Fritsch. JKC, the winning bidder for the airline, which stopped flying in April 2019 and later underwent an insolvency resolution process, had to pay INR 350 crore to the lenders by August 31. Earlier on August 28, NCLAT had extended the time till September 30 for Jalan-Kalrock Consortium for payment of INR 350 crore to the lenders of the bankrupt Jet Airways. It had accepted the plea of the consortium to extend the timeline and also for adjustment of INR 150 crore from the performance bank guarantee (PBG) towards payment of INR 350 crore.

The consortium has submitted an undertaking before the appellate tribunal, in which it had committed to pay INR 100 crore by August 31, 2023 and another INR 100 crore by September 30, 2023. The consortium on September 29 in a statement said it had fulfilled its total financial commitment of INR 350 crore equity as per the court-approved resolution plan.

Even as JKC hopes to take Jet Airways back to the skies in 2024, another major hurdle could be the payment of over INR 270 crore towards gratuity and provident fund of its former employees that was ordered by the Supreme Court.

The consortium has asked NCLAT to allow it to make these payments in instalments of three years, four years and five years. The employee unions plan to oppose the demand and seek one-time payment in case the tribunal grants relief to JKC on this front. The airline also doesn't have an Air Operator's Certificate as yet. It will need to demonstrate operational capability with the required staff and fleet to renew the AOC.

In May 2023, the National Company Law Appellate Tribunal (NCLAT) granted Jalan Kalrock Consortium, which emerged as a successful bidder to take over Jet Airways, more time to make payments to the State Bank of India (SBI).

While the National Company Law Tribunal (NCLT) approved the transfer to Jalan Kalrock in January, the decision was challenged in NCLAT, which ruled in favour of the consortium on March 3, 2023. Hence, Jalan Kalrock was entitled to exclude November 16, 2022, to March 3, 2023 period, during which the ownership hearing was on, to comply with the payment deadline.

On January 13, NCLT allowed the transfer of the beleaguered airline to the consortium led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan. The lenders approached the NCLAT, opposing the ownership transfer, saying the consortium had not fulfilled its obligations.

Jet Airways was grounded in April 2019 over growing losses and a debt of about INR 8,000 crore. In October 2020, the airline's Committee of Creditors (CoC) approved the revival plan submitted by the Jalan-Kalrock consortium.