Aviation News, Headlines & Alerts
Category: <span>Finance</span>

Warrant Issued for Kingfisher Owner

Kingfisher bounced checks of 105 million rupees (£1.25m) to settle user fees at Hyderabad International Airport.

Then the airline failed to appear in court, leading the local sessions court to issue an arrest warrant for Vijay Mallya, owner of Kingfisher Airline.

Staff of Kingfisher Airline has not been paid for months. Debts are said to total $2.49bn, with $1.1bn of bank debt.

India’s Aviation regulator grounded the Kingfisher fleet for the last two weeks and is threatening to cancel its license.

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

PR: $1.3 Million in Grants for Airport Vehicle Surveillance

WASHNIGTON–U.S. Transportation Secretary Ray LaHood today announced $1.3 million in grants for Chicago O’Hare, Denver and San Francisco International Airports to buy vehicle surveillance equipment that will increase safety by helping to reduce the risk of conflicts between airport vehicles and aircraft.
“This equipment will help ensure the safety of aircraft passengers and crew, as well as the safety of airport and airline vehicle operators,” said Secretary LaHood. “The safety of everyone involved in the aviation system is our top priority.”

Each of the three airports will receive $421,875 through the FAA’s Airport Improvement Program (AIP) to buy up to 75 Automatic Dependent Surveillance-Broadcast (ADS-B) units that will allow air traffic controllers and vehicle drivers to precisely identify vehicle locations on the airfield, especially during low visibility conditions.

The ADS-B units will be installed in vehicles such as fire trucks, snow plows and other airport operations vehicles.

“This grant allows ground equipment operators to have a better situational awareness of where they are on the airfield, which increases airport safety,” said FAA Acting Administrator Michael Huerta.
The airports selected to receive the grants have operating environments that should benefit from this new surveillance technology. Chicago O’Hare will see enhanced surface coverage of vehicle locations across the busy, complex airfield. At Denver, the vehicle ADS-B units will provide precise vehicle tracking during low-visibility winter weather. At San Francisco, the vehicle units will improve situational awareness during upcoming airport construction projects.

AIP provides $3.35 billion in annual funding for airport improvement projects that are vital to maintaining the safety, capacity and environmental stewardship of our nation’s airports. More than 3,300 airports are eligible for AIP grants benefiting commercial passengers, cargo operations and general aviation activities throughout the nation.

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

Another New Air India Plan

Air India owes around Rs.2,000 crore to oil retailers, and faces accumulated losses worth Rs.22,000 crore but is looking at a financial overhaul. Lenders including State Bank of India and 18 other banks will be repaid Rs.10,500 crore in 10-15 years, or through government-guaranteed bonds. The restructured debt is only one part of the improvement; the airline is also being given time to improve operational efficiency. Operational efficiency is expected to rise from 71 percent to 90 percent within two years.

Twenty seven Dreamliners will be inducted into the Air India fleet and 7,000 Air India staff will be transferred to its maintenance, repair and overhaul divisions. 12,000 staff be transferred to transportation services.

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

Hawker Beechcraft Headed for Bankruptcy

Centerbridge Partners, Angelo Gordon and Capital Research & Management are negotiating bankruptcy with Hawker Beechcraft.

A forbearance agreement expiring in June will probably lead to a chapter 11 which will keep firm in operation.

Centerbridge is the biggest lender. The private equity investment firm manages a $3 billion fund focused on distressed-for-control and buyout investments.

Kansas Learjet Plant Gets Cash Infusion

Bombardier’s Learjet 85 business jet program is getting an infusion of $6 million in Wichita now that the Kansas Department of Commerce has permitted the use of a 1994 bond money incentive.

The exact figure ($52.7 million) is expected to translate into 450 jobs. This is in addition to $2 million in bonds to expand the Learjet85 plant.

The expansion plan includes building a new production flight facility. Phase three, the paint facility and delivery centre will completed in 2013.

Fred Flintstone Airlines? No, it’s Air Zimbabwe

Like the nineteen year old Yemenia Airlines* Airbus A310-324 that was written up as having passengers with standing room only, unattached seats and an assortment of safety problems that were so bad that the plane was disallowed from flying over European airspace, Air Zimbabwe’s fleet demonstrates how not to run an airline.

There are apparently 5 planes and 50 pilots; far too many engineers (300? For a fleet of 5?), and is an accounting nightmare, being $108 million in debt and accruing more as it is operating in the red, and it has reportedly fallen behind on quarterly insurance payments.

A B767 may be auctioned if Air Zimbabwe fails to pay a monthly installment of US$500 000 to Lufthansa Technics. Repair of the B767-200 engine which requires US$2,5 million for repairs, hinged on the condition of making US$500 000 monthly payments from May 2011 to redeem the debt.

Skytrax, which rates airlines on a scale of 5-1 (5 being good) rates Air Zimbabe as a 2. Passenger reviews include random cancellations, ancient planes, unexpected delays, missed connections, owed reimbursements, misdirected charter flights, and strange excuses from gate personnel.

Yemenia Airlines* is also a 2 star airline.

Aerosvit Airlines
Air Algerie
Air Malawi
Air Slovakia
Air Zimbabwe
Azerbaijan Airlines
Bellview Airlines
Biman Bangladesh
Bulgaria Air
Cubana Airlines
Donbassaero Airlines
Iceland Express
JetStar Pacific
Mahan Air
Macedonian Airlines
MIAT Mongolian Airlines
Nepal Airlines
Onur Air
Pegasus Airlines
Rossiya Airlines
Royal Air Maroc
Sky Express
Sudan Airways
TAAG Angola Airlines
Tajikistan Airlines
Transaero Airlines
Turkmenistan Airlines
Ukraine International
Uzbekistan Airways
Yemenia Yemen Airways

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

Safekeeping of Passengers Flies or Dies on Banks Due Diligence of Ethiopia Airlines

While one should congratulate Ethiopian Airlines for securing a $765 million package deal to finance five 777s, I hope the banks checked more than just their credit history and their relationship with the banks.

In terms of technological adulthood, Africa is still in its infancy. The pressure put on even a fairly reputable airline company like this to keep up with maintenance and pilot training is immense. It is succeed, or else. Or else, they call the loan and repo the planes. Or else there is a catastrophe and people lose their lives.

If all is ok when plane is leased but two years later airline gets a rap for bad maintenance or pilot training or any of the hundreds of other things that could happen, then the lease co or bank needs to step in and use their clout to demand changes/corrections, or face the consequences. Their contract should have teeth, with consequences that matter enough to the lessee to compel them to action, such as the right to repo that plane for maintenance or neglect issues, or pilot training issues, just as if the lessee were not making their payments. Lenders are pretty good at covering their investment by including clauses like this. Such a provision may already exist. The clause is not window dressing. It can be acted upon. Not for money’s sake. For the sake of lives.

Yes, lives are at stake here. Banks have a duty to monitor the lessee or buyer they entrust, and a duty as well to supervise not only the money but keep up with what is being purchased with the money. Entrusting a less than capable entity in ownership and maintenance of a jet worth millions is certainly dangerous instrumentality. Sufficient time should be allocated to responsible due diligence, beyond the loan/lease, to monitor not only timely payments but also if the company is living up to aggressive guidelines of maintenance and training.

These planes bought with this money, like all other airplanes but especially jets, are weapons of mass destruction. Even if they are not used in a deliberately terrorist act, inexperienced pilots and shotty maintenance can cause that plane to crash and become a weapon for those on board and for those on the ground.

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

BioJet Receives $1.2 Billion Funding Facility

RIDGETOWN, Barbados, Feb. 7, 2011
— BioJet International Ltd. (www.biojetcorp.com) announced today that it has received a US $1.2 Billion funding facility from Cayman based Equity Partners Fund SPC. The funding structure is a 3 year facility; further terms of the funding were not disclosed.

BioJet is a leading international supply chain integrator in renewable (bio) jet fuel and related co-products which include green diesel, etc. for the aviation and transportation sectors.

The funding agreement is designed to allow BioJet a significant source of capital for its supply chain capital projects program including feedstock and refining projects, as well as investment and strategic acquisitions.

Chairman Mitch Hawkins said, “This funding agreement with Equity Partners will form the cornerstone of BioJet capital projects and accretive EBIDTA positive acquisitions over the next five years. It enables a clear path to the expansion of our Camelina, Jatropha, and Algae feedstock projects as well as our Avia renewable jet refining projects in Latin America, Asia, and Europe. We will also be seeking acquisitions of listed companies which can add value geographically and strategically.”

BioJet operations throughout the entire biofuel value chain engage feedstock generation, technology, refining, logistics, sustainability certification, distribution, and eventual end use by the aviation sector user. BioJet is also the first Alternative Fuels Strategic Partner of the International Air Transport Association.

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

AeroTurbine Signs $425 Million Credit Facility

AMSTERDAM, Jan. 4, 2011 — AerCap Holdings N.V. announced today that its subsidiary AeroTurbine signed an amendment to its credit facility. The amendment increases the total commitments available under the credit facility from $328 million to $425 million and allows for additional newer generation aircraft and engine types as eligible collateral under the facility. The credit facility amendment was led by Credit Agricole Corporate and Investment Bank.

“The amendment to our credit facility is an important milestone in the continuing growth of AeroTurbine. The increased capacity and the inclusion of newer generation equipment represent a significant commercial advantage to AeroTurbine which will allow the company to aggressively pursue acquisitions of the most profitable aircraft, engines and parts inventory,” said Michael King, AeroTurbine President and Chief Executive Officer.

About AerCap and AeroTurbine
AerCap is the world’s leading independent aircraft leasing company. AeroTurbine is a subsidiary of AerCap focusing on engine leasing and trading, airframe and engine disassembly, aviation supply chain solutions, part sales and MRO services. AeroTurbine is headquartered in Miami with offices in Dallas, Phoenix, London and Singapore.

Warning: Trying to access array offset on value of type null in /home/airflight/www/www/wp-content/themes/fluida/includes/loop.php on line 270

Bristow Group Inc. Announces $375 Million Credit Facility

BRS announced today that it has entered into a $375 million senior secured credit facility, replacing the Company’s existing bank credit facilities and providing funds to redeem a portion of Bristow’s senior notes.  

The new credit facility includes a five-year, $175 million revolving credit facility and a five-year, $200 million term loan.  The term loan will be used to redeem the Company’s $230 million, 6 1/8% senior notes due 2013 on December 23, 2010.  The revolving credit facility, which represents a $75 million increase in corporate liquidity, increases strategic and financial flexibility and will be used for general corporate purposes, including working capital.  It is anticipated that the Company also will draw on the new $175 million revolver to fund the remaining portion of the redemption of the 6 1/8% senior notes.

“We are committed to lowering our cost of capital and improving our financial performance in order to create superior value for all our stakeholders.  This new credit facility is just one step toward achieving that goal,” said William E. Chiles, Bristow’s President and Chief Executive Officer.  ”We expect this new facility to support our strategic and growth initiatives going forward, while improving overall liquidity.”

Borrowings under the revolving credit facility and term loan bear interest at a rate equal to, at the Company’s option, a Base Rate or LIBOR plus a borrowing margin ranging from 0.625% to 2.875% based on the Company’s leverage ratio.  These margins were flexed downward by 0.125% across all levels from the initial syndicated pricing grid.  The initial margin for borrowings will be the greater of 2.50% per annum or the appropriate percentage based on the leverage ratio until delivery of the financial statements for the quarter ended June 30, 2011, when the borrowing margin will be determined by the Company’s leverage ratio.  Based upon current one-month LIBOR levels plus the borrowing margin of 2.50%, the all-in borrowing rate would be approximately 2.75% today.  Base Rate is defined as the higher of the per annum rate the administrative agent publicly announces as its prime lending rate as in effect from time to time and the Federal Funds rate plus 0.50% per annum.

The Company’s obligations under the new credit facility are guaranteed by certain of the Company’s principal domestic subsidiaries and secured by the U.S. accounts receivable, inventory and non-aircraft equipment of Bristow Group Inc. and the guarantor subsidiaries, and all and 65% of the capital stock of certain of the Company’s principal domestic and foreign subsidiaries, respectively.

As a result of the redemption of the 6 1/8% notes, the Company will incur an approximately $2.3 million redemption premium and $2.4 million in non-cash expense associated with the write-off of unamortized debt issuance cost in the third fiscal quarter.  The $2.3 million redemption premium will be recorded to other income (expense), net, and the $2.4 million non-cash expense will be recorded to interest expense.  The approximately $4.7 million in total expense is expected to reduce earnings per share by approximately $0.12 in the third fiscal quarter, which includes a portion of the tax benefit recognized on this expense.  On an annualized basis, Bristow expects earnings per share to be reduced by $0.08, reflecting the full-year tax benefit.

“We are fortunate to be partnering with such a solid bank group with better terms than our previous credit facilities and competitive rates for this new credit facility, as it will enable us to lower our cost of debt and increase our liquidity going forward.  Although we take an upfront cash charge of $2.3 million, the cash net present value benefit of this bank refinancing to the maturity date of the 6 1/8% notes in June 2013 assuming a constant borrowing rate of 2.75% would be approximately $14 million,” said Jonathan Baliff, Bristow’s Senior Vice President and Chief Financial Officer. “This new facility, coupled with our prudent capital structure, should provide our Company with ample strategic and financial flexibility for managing our business, while improving our ability to make debt repayments and restricted payments such as dividends and stock repurchases.”

Bristow partnered with SunTrust Bank as administrative agent and JPMorgan Chase Bank, Bank of America, Wells Fargo Bank, Regions Bank and BBVA Compass as other senior lenders.  

Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated and is one of two helicopter service providers to the offshore energy industry with global operations. The Company has major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, as well as in most of the other major offshore oil and gas producing regions of the world; including Alaska, Australia, Brazil, Mexico, Russia and Trinidad.  For more information, visit the Company’s website at http://www.bristowgroup.com/.

Statements contained in this release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements.  These forward-looking statements include intended use of proceeds, expense related to the redemption, earnings per share reduction, net present value benefit and affect of the credit facility.  It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements.  Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s registration statement relating to the offering.  Bristow Group Inc. disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.

Content not attributed to or linked to original, is the property of AirFlightDisaster.com; all rights reserved.

Site Credits