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Advising 100% of major aircraft and engine OEMs
Years of proprietary valuations and maintenance data
Advising the top 100 banks, lessors and airlines
Aircraft under fully serviced management contracts
Founded in 1988, today IBA advises a broad mix of operators, lessors, manufacturers, government agencies and lawyers. As the aviation adviser market matures, we have developed an unparalleled range of linked services that enable us to provide the best advice about every aspect of aviation assets: investment, finance, valuations, management, operations and maintenance of aviation assets.
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So the 737MAX made its test flight. Rather low key I thought. It may not be a totally new aircraft but it will be the mainstay of the Boeing single aisle project for the next decade and I was expecting more noise. Then again it does have modern, quiet, engines.
Further turmoil on the World’s financial markets this week whilst IATA tell us that the fuel price is 33% percent lower than this time last year.
So 2015 looked like the best year since the financial crisis in terms of airline results, although Brazil and Russia saw reduced RPKs.
As an industry we still battle with local taxes and rulings which seem counter-intuitive. Hidden in the IATA update was this note:
The most recent example is the dramatic increase in the Italian Council Tax levied on air passengers. This 33-38% hike will damage Italian economic competitiveness, reduce passenger numbers by over 755,000 and GDP by EUR 146 million per year. An estimated 2,300 jobs a year will be lost.
We have seen many such taxes imposed by many governments (including the UK) but I haven’t yet seen evidence that there has been a significant drop off in demand. When families are desperate to escape the winter weather they seem will to pay any price and businesses take it on the chin as the cost of doing business. I see that Ryanair cites that as a reason to reduce flights but does an increase from 6.5 euros to 9.0 euros really have such an impact??
Stories of the Week
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Richard Anderson’s retirement was announced this week. Post-Dublin we said that we thought Willie Walsh was doing an Anderson with respect to potentially operating used wide bodies rather than new ones. We should clarify that we don’t expect Mr Walsh to do an Anderson and retire from IAG.
Bombardier was sued by Comerica. Bombardier being sued could mean that all the airframes have to double check their liabilities since there are an abundance of OEM RVGs out there. It is our experience that in most cases the OEM steps up and will take the hit. At this stage we are not aware of the fine details but it does highlight the reliance that investors place on the big players to perform and not leave investors carrying the can.
Virgin spoke to AFJ about its bond backed against airport slots, the first in Europe.
Brazil considers lifting foreign stake limit for airlines. Currently limited to 20%, media reported that up to 100% might be up for grabs in future.
Easyjet unveiled plans for hybrid systems to be used during taxiing.
Ryanair announced a E400m share buyback after lifting its profit forecasts.
BA is the latest carrier to resume direct flights to Iran from July, with daily flights from winter 2016.
Click here to catch up with the IBA Advisory team as they discuss the key aviation topics of 2016. With a focus on the new aircraft types and their entry into service, they also covered:
– The new kids on the block in the regional and narrowbody markets
– The varied scenarios across the twin aisle space
– The shifting influence of fuel and maintenance costs
The slidedeck is available here: Jan2016 Webinar
Airbus beats Boeing in 2015 orders but lags on deliveries:
Click here for Seeking Alpha’s update