LARA’s Kimberley Young provides a summary of the latest happenings across the low-fare airline and regional aviation industry.
In another blow to regional aviation in Europe, the UK’s East Midlands-based carrier operating as flybmi announced on 16 February that it had ceased operations and is filing for administration. This comes just a few weeks after the independent German airline, Germania, filed for insolvency and terminated its flight operations.
“It is with a heavy heart that we have made this unavoidable announcement today,” a spokesperson for flybmi said. “The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU’s decision to exclude UK airlines from full participation in the Emissions Trading Scheme.”
The airline also said its current trading and future prospects had been affected by Brexit uncertainties, “which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around bmi’s ability to continue flying between destinations in Europe. Additionally, our situation mirrors wider difficulties in the regional airline industry which have been well documented.”
The spokeperson concluded: “We sincerely regret that this course of action has become the only option open to us, but the challenges, particularly those created by Brexit, have proven to be insurmountable.”
The airline operates 17 aircraft on routes to 25 European cities and has cancelled all flights. In 2018 it carried 522,000 people on 29,000 flights. Flybmi employed 376 people based in the UK, Germany, Sweden and Belgium.
Commenting on the announcement, Tim Alderslade, chief executive of Airlines UK, an industry association representing 13 UK carriers, said it demonstrates the “ferociously competitive” operating environment for airlines, adding: “It should give Government – and other parts of the industry who relentlessly champion passenger growth but too frequently neglect the challenges carriers face – pause for thought about the costs they are asking airlines to absorb and to what extent this is sustainable into the future.”
Flybmi was a member of the European Regions Airline Association (ERA), and following the airline’s collapse, the association has urged the European Commission and the UK Department of Transport to finalise the forthcoming aviation plans for Brexit “as a matter of urgency” and warning “this current airline failure is only the beginning if we do not resolve the uncertainty surrounding the Brexit agreement.”
Montserrat Barriga, ERA director general, said she was “deeply saddened” to learn that flybmi had filed for insolvency, adding: “Rising fuel and carbon costs coupled with the uncertainty, unfairness and challenges surrounding Brexit has led to the airline ceasing all operations.”
Barriga previously wrote to the European Commission in November to call for action, and has now said: “I will once again be in direct contact with the European Commission and the UK Department of Transport, as a matter of urgency, to persuade them to act immediately. It is imperative that they put in place a comprehensive agreement for aviation that mirrors the current situation with the UK as the highest priority, and that they reach a solution that will allow airlines to continue operating as they do today, enabling Europeans to continue benefiting from affordable and stress-free travel.
“This is a sad day for European aviation and a clear example of the impact of a too long uncertainty surrounding Brexit,” she concluded.
It would seem that for airlines in Europe, these Brexit concerns, coupled with the intense competition in the short-haul market and the fluctuating fuel costs felt across all airlines (Germania also cited this as a major contributory factor in its demise) have created the perfect storm, with the potential for more trouble on the horizon.
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SMBC Aviation Capital has delivered its fifth Airbus A320-251neo aircraft to Chilean carrier, Sky Airline.
The aircraft is equipped with two CFM Leap engines and was delivered on 13 February at the Airbus facility in Hamburg, Germany.
The delivery marks the fifth and last aircraft to deliver to Sky as part of a five aircraft deal with SMBC Aviation Capital.
Brian Harvey, chief marketing officer of SMBC Aviation Capital, told LARA the company first did business with the airline in 2013 with the delivery of three A319s. “We are very pleased now to work closely with them to meet their new fleet requirements as we conclude the placement of five A320neo aircraft with the airline. The first of these aircraft represented our first neo placement in the Americas. Sky’s decision to select this aircraft type fits well with their low cost strategy, bringing them innovations and fuel efficiency to expand into new markets.”
The fourth aircraft was delivered on 5 February at the Airbus facility in Toulouse, France, while the first three aircraft were delivered in Q4 2018.
Commenting on the wider market in South America, Harvey said: “South America, alongside Asia and Europe, continue to be the growth engines of our business. In South America, we are working with a number of new and existing airline customers to support their growth as LCCs continue to have a proven and sound business model in this area.
“South America also offers good opportunities for growth given the number of new start-ups which will result in increasing passenger numbers and the continuing appetite for point to point air travel across the countries in the region.”
The Welsh Government has awarded an air service contract to Eastern Airways to secure air travel between Cardiff and Anglesey for the next four years.
The Public Service Obligation (PSO) contract runs between February 2019 and February 2023 with scheduled air service providing two flights each weekday in both directions between north and south Wales.
Eastern Airways says since March 2017 it has achieved growth on the route of around 40%.
“Since stepping in to cover this incredibly important economic link between the north and south of Wales, we have proactively grown passenger numbers as part of the Flybe branded service,” said Roger Hage, Eastern Airways’ general manager commercial and operations. “We’re delighted to have been awarded the contract to help further grow the capacity on the service in fully supporting the Transport Minister, and both Cardiff Airport and Anglesey Council’s ambition to increase accessibility and also improve connectivity to other services offered by our franchise partner Flybe, plus Qatar, KLM, Ryanair and TUI at Cardiff.”
Economy and Transport Minister Ken Skates, said: “Wales needs to be better connected. Eastern Airways shares our ambitions to significantly grow the route over the next four years, thereby increasing the economic benefit to Wales. I hope this will include Eastern Airways operating its Jetstream 41 at the full capacity of 29 seats, offering almost 50% more seats than it is currently able to offer.
“This increase would be subject to the UK Government supporting the reclassification of Anglesey Airport. This would enable the full capacity utilisation of the larger aircraft helping bring exciting growth opportunities to the region.
“The need for an increase in capacity on the route has been clearly demonstrated over the last two years. With increased efficiencies and higher yield due to additional passenger revenue, this increase in capacity would see a reduction in the subsidy over the four years of the contract when compared to continuing with a 19 seat operation,” Skates continued.
He said that the route facilitates access to internal markets for Welsh businesses, adding: “This quick and effective internal mode of transport will be vital post Brexit.”
Pratt & Whitney has delivered GTF PW1900G production engines to Embraer for the E195-E2 aircraft at Embraer’s E2 final assembly line in São José dos Campos, São Paulo, Brazil.
The E195-E2 is expected to enter into service in the second half of 2019 with Azul Brazilian Airlines.
“We are excited to receive the GTF production engines for the initial serial production of the E195-E2, as we know firsthand the advantages that these engines provide to our customers and the environment,” said Fernando Antonio Oliveira, Embraer’s E2 program director.
Graham Webb, vice-president of Commercial Engine Programs at Pratt & Whitney, said the delivery of the first production engines for the E195-E2 was an “important milestone” for the programme.
Embraer’s E190-E2 aircraft, which is also powered by the Pratt & Whitney PW1900G engine, entered service in April 2018 with Widerøe, followed by Air Astana in December 2018.
In addition to being selected as the exclusive propulsion system for the E2 commercial aircraft, Pratt & Whitney’s APS2600E auxiliary power unit (APU) is the sole-sourced APU for the E2 family.
Pratt & Whitney said the E195-E2 aircraft has more than 24% reduction in fuel burn per seat than the previous-generation E195, with NOx emissions 50% below the ICAO CAEP/6 regulation and 19dB to 20dB of ICAO Chapter 4 cumulative noise margin.