04 Mar 2019

North America Newsletter 4 March

Air Canada Increases Key Financial Targets for 2019-2021 Air Canada is updating its key financial targets in conjunction with its 2019 Investor Day on 28 February. From 2019 until 2021, Air Canada is targeting an annual EBITDA(1) margin (earnings before interest, taxes, depreciation, amortization and impairment, as a percentage of operating revenue) of 19-to-22 percent and an annual return on invested capital (ROIC)(1) of 16-to-20 percent. Air Canada is also projecting cumulative free cash flow(1) of $4.0-to-$4.5 billion over the same period, including projected free cash flow of between $400 million and $600 million in 2019, and a leverage ratio(1) of no more than 1.2 (measured by net debt over EBITDA) by the end of 2019. Air Canada to Introduce Dreamliner Service on Flights between Toronto and Honolulu Air Canada announced 27 February that it will operate its seasonal service between Toronto and Honolulu next winter using Boeing 787 aircraft commencing 14 December and will operate three return-trips weekly until 26 April 2020. Air Lease Corporation Announces Pricing of $250 Million Offering of Preferred Stock Air Lease Corporation announced 26 February the pricing today of its public offering of 10,000,000 shares of 6.150% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share with a liquidation preference of $25.00 per share, at a price to the public of $25.00 per share before underwriting commissions and transaction expenses. The sale of the Shares is expected to close on 5 March, subject to satisfaction of customary closing conditions. ALC intends to use the net proceeds of the offering for general corporate purposes, which may include, among other things, the purchase of commercial aircraft and the repayment of existing indebtedness. Boeing and Bamboo Airways Announce Order for 10 787 Dreamliners Boeing and Bamboo Airways 26 February confirmed an order for 10 787-9 Dreamliners valued at $3 billion according to list prices. The order for the super-efficient and longest-range member of the Dreamliner family was unveiled during a signing ceremony in Hanoi, witnessed by U.S. President Donald Trump and General Secretary and President of Vietnam Nguyen Phu Trong. Boeing-Embraer partnership receives shareholder approval The proposed strategic partnership between Boeing and Embraer was approved on 26 February by Embraer's shareholders during an Extraordinary General Shareholders' Meeting held at the company's headquarters in Brazil. Shareholders approved the proposal that will establish a joint venture made up of the commercial aircraft and services operations of Embraer. Boeing will hold an 80% ownership stake in the new company, and Embraer will hold the remaining 20%. Boeing, Vietjet Announce Order for 100 737 MAX Airplanes Boeing and Vietjet confirmed the carrier has purchased 100 additional 737 MAX airplanes, taking their MAX order book to 200 jets. During a signing ceremony on 27 February in Hanoi, United States President Donald Trump and Vietnamese Communist Party General Secretary and President Nguyen Phu Trong joined leaders of both companies to unveil the $12.7 billion order, according to list prices. The deal includes 20 MAX 8s and 80 of the new, larger MAX 10 variant. New Maintenance Complex Deepens United Airlines' Commitment to Los Angeles, with Nearly $1 Billion Recent Investment at LAX United Airlines and Los Angeles World Airports (LAWA) 28 February broke ground on a state-of-the-art Technical Operations Center (TOC) at Los Angeles International Airport (LAX) that will enable the airline its aircraft fleets. The new facility will include two connected buildings – a ground service equipment and facilities maintenance building and a line maintenance hangar, including an engine support shop that will focus on the aircraft's Dreamliner fleet. The commencement of this $352 million TOC pushes the airline's investments at its Los Angeles hub to nearly $1 billion in recent years. Spirit Airlines Launching More International Service from Orlando to Jamaica Spirit Airlines is expanding service from Orlando International Airport (MCO). Spirit Airlines will operate nonstop flights between Orlando and Sangster International Airport (MBJ) in Montego Bay commencing 28 February. Spirit will also begin nonstop service between Orlando and Norman Manley International Airport (KIN) in Kingston effective 1 March. WestJet launches inaugural flight between its Calgary hub and Atlanta WestJet launched a new service between Calgary and Atlanta effective 3 March becoming the 65^th route from Calgary. Arved von zur Muehlen, WestJet's Chief Commercial Officer said “Today's flight between Calgary and Atlanta marks another significant milestone in WestJet's continued investment into Alberta while supporting strong business and tourism ties”. Acumen Aviation © 4 March 2019 All Rights Reserved.