ARC NEWS
EU-China bilateral safety agreement comes into effect
September 07, 2020
A bilateral safety agreement between European and Chinese aviation regulators came into effect on 1 September, paving the way for simpler evaluation and certification processes for airframers of the two regions. The European Union Aviation Safety Agency says it held a joint meeting with its Chinese counterparts on 3 September, where both parties adopted technical implementation procedures, which are meant to support the safety agreement. “These administrative and technical procedures describe in detail how EASA and [Civil Aviation Administration of China] will conduct the validation and reciprocal acceptance of civil aeronautical product approvals,” the agency adds. In May last year, both the EU and China signed the agreement, which aims to “support worldwide trade in aircraft and related products” by removing “unnecessary duplication” of evaluation and certification activities by respective authorities.
The deal will also promote co-operation between the EU and China towards a “high level” of civil aviation safety and environmental compatibility. The CAAC hailed the “new stage of co-operation” between China and Europe. The signing has created a “clear path for cooperation between authorities and industrial enterprises” of both regions, allowing for the “mutual recognition of civil aviation productions” from both China and the EU. Chinese airframer, Comac has been pushing for EASA certification for its C919 narrowbody program in recent years, with Chinese premier Li Keqiang visiting his German counterpart in 2017 to call on Germany to help with the securing of type certification. ATR, meanwhile, has embarked on flight testing to obtain Chinese type certification on its ATR 42-600 turboprop.

Source: Cirium


Investment consortium aims to restart Comair in December
September 04, 2020
South African carrier Comair’s business rescue plan envisages a consortium of investors taking a 99% shareholding in the company, and restarting services around 1 December. Some 1,800 jobs will be retained – although 400 will be shed – and the airline will resume operations with a fleet of 25 aircraft. The consortium comprises seven named individuals plus an investment vehicle, Luthier Capital, putting up an initial interest-free loan of R100 million ($6 million), to be drawn down in two equal tranches on 21 September and 1 October. If certain conditions are met, these funds will be converted to securities and a further R400 million in equity will be injected, giving a total equity recapitalisation of R500 million. New net debt totalling R600 million will be sought. Comair has 20 aircraft but the optimised fleet, according to the business plan, would comprise 15 owned and 10 leased aircraft. Lease terms on four aircraft have been renegotiated and the intention is to do the same for the rest. Projections from the business plan estimate that Comair will become profitable in the year to 30 June 2022, with a pre-tax surplus of R497 million for the airline operation and R647 million for the group as a whole. The investors intend to acquire Comair by increasing the authorised capital by 50 billion shares, to a total of 51 billion. If the conditions for the investment plan are not met, the rescue practitioners will commence a structured wind-down of the company. Comair has been immersed in a business rescue effort since early May, the result of rising debt levels from a fleet renewal, exacerbated by the grounding of the Boeing 737 Max as well as the air transport crisis triggered by the pandemic. Its total debt increased from R2.2 billion in June 2015 to R4.9 billion by the end of last year, with a 10-fold rise in interest and financing costs. Fleet ownership costs have risen by 65% over the three years to June 2020. Over the same period revenues have increased by only 26% compared with 41% for overall expenses, and operating profit has fallen sharply. Comair had secured a settlement last year for a R1.1 billion payment from South African Airways, over a competition legal case, but SAA’s own subsequent entry into business rescue means recovery of the full amount is highly unlikely.

Source: Cirium


IATA: Latin American aviation remains largely locked down
September 04, 2020
Passenger air traffic in the Latin America region remained hard-hit by coronavirus measures in July, with many countries still severely restricting flights as they handle the global pandemic. On routes to, from and within the Latin America and Caribbean region, demand measured in RPKs dropped 88% in July year-over-year, according to IATA. Capacity, as measured in ASKs, was down 83% in the same period. Load factors reached 63%. Figures were worse for airlines based specifically in the region, with July demand down 95% year-over-year and not changing much from the 97% decline in June. Capacity was down 93% in July, and load factors were 58%. Latin America also had the most significant declines in international demand and capacity compared with other regions, IATA says. International demand for Latin American carriers dropped 32% in July on a year-over-year basis, compared with 29% in June. Capacity was down 45%. “That market is still very much controlled,” Peter Cerdá, IATA’s regional vice president, the Americas, tells Cirium. “We’re six months into this crisis, [and] the vast majority of our countries still have either 100% country restrictions or closures, entry restrictions or quarantine. That has put a huge burden on the sector.” Several key markets continue to have closed or restricted borders, only allowing their own residents into their country. That is still the case in Colombia, Chile, Argentina and Panama. However, Cerdá notes that Panama is allowing carriers to transit through its Tocumen hub on the way to other countries. The region has seen some movement in recent weeks, with Colombia restarting domestic flights on 1 September. The Colombian government also recently committed $370 million in debtor-in-possession financing to Avianca, a move that the industry applauded but did garner criticism from some citizens, who argue that money should be spent elsewhere. IATA continues to push for countries in the region to offer airlines more financial support. “We are pushing for government aid as long as it is fair and available to all the parties,” Cerdá says. Meanwhile, aviation on a global basis is doing better. Global RPKs were down 80% in July year-over-year. In June, that number was 87%.

Source: Cirium


LOG ON

CONTACT
SGS Aviation Compliance
ARC Administrator
SGS South Africa (Pty) Ltd
54 Maxwell Drive
Woodmead North Office Park
Woodmead
2191
South Africa

Office:   +27 11 100 9100
Direct:   +27 11 100 9108
Email Us

OFFICE DIRECTORY
Find SGS offices and labs around the world.
The ARC is a mobile friendly website.