Brussels Airlines gets go-ahead for Stabilization Package
The hoped-for result was announced on 21AUG20, when the EU Commission gave the go-ahead for a stabilization package that Brussels Airlines had agreed on 24JUL20 with Belgian Federal Government and Lufthansa. Earlier that week, on 17AUG20, the German Economic Stabilization Fund (WSF) ahd also given its approval to the package. Running to a total of €460 million euro (of which, €290 million come from the Belgian Federal government and €170 million from Lufthansa), the stabilization package looks to cover part of the losses incurred by Brussels Airlines due to the pandemic, and to ensure that the tens of thousands of direct and indirect jobs linked to Brussels Airlines’ operations, are retained whilst the airline focuses on its turnaround plan towards a long-term and structurally profitable future.
Referring to the EU Commision decision, Dieter Vranckx, CEO of Brussels Airlines, stated: “With this news, we finally conclude the three pillars of our survival and long-term competitiveness. We are relieved that the execution of the financial transaction can take place. We will now shift all our focus towards a timely implementation of our turnaround plan Reboot Plus. Thanks to the support and trust we receive from our shareholder Lufthansa, the Belgian government and from all our employees, we can create a strong and competitive Brussels Airlines with long-term perspectives, an important engine for the Belgian economy. For that, I sincerely thank all involved parties.”
€300 million euros of interim liquidity accorded to Swissport
Based on an agreement “in principle” that the company will undergo comprehensive restructuring. The money which is being provided by late 2020 by an ad hoc group of senior secured creditors (the "AHG") and is subject to final documentation, will add to the current liquidity position of more than 200 million euros, and should generously help Swissport navigate through the pandemic, carry out its operational plans and take advantage of post-crisis growth opportunities. The comprehensive restructuring will significantly deleverage the balance sheet and provide 500 million euros in new long-term debt financing, which will eventually replace the 300 million euros interim facility. Details are still to come, as is a full financial statement for the first half-year.
“This agreement marks a transformational milestone for Swissport. The 300 million euros of additional interim financing and the planned restructuring supported by our senior secured creditors and other stakeholders, gives us the certainty that Swissport will trade successfully through the current market disruptions and emerge as an even stronger industry leader," says Eric Born, Group President & CEO of Swissport International AG. "It signals to our customers, our employees and all our other stakeholders that Swissport continues to be the partner they can rely upon. The agreement also represents an endorsement from some of the world's leading investors in the fundamental strength of our business."
"On completion of the transaction, Swissport will have significantly less leverage. The company will have a much stronger financial position and the resources to invest into the business, execute on our operational plans and exploit growth opportunities. Swissport will be very well positioned to succeed in the long-term," adds Peter Waller, CFO of Swissport International AG.
Volga-Dnepr’s latest Big Cargo, this time to Vietnam
A 30-ton shipment recently made its way from Mumbai, India to Cam Ranh, Vietnam, on board of an AN-124-100. This time, the outsize cargo was high-voltage equipment, headed to the Tuon Nam, where it was required to complete the construction of a 450 W solar power plant. Arranged in partnership with Bee Logistics Corporation on behalf of Advanced Information Technologies Corporation (AIT), the charter flight was somewhat problematic to arrange, given not only the fact that a runway in Saigon was under repair, but also the challenge of strict quarantine measures in Da Nang. Nor had Cam Ranh airport ever handled at AN-124-100. After three route changes, therefore, and Volga-Dnepr regional specialists finalizing all the other related procedures to the flight, such as crew immigration and resting, the special cargo was able to make its way.
“The coronavirus and pandemic are affecting all industries, including the development of important projects in wind and solar energy. While some of these projects in the Asia-Pacific region are under threat due to the imposition of restrictive measures, the construction of the solar power plant in Tuon Nam has been completed thanks to the well-coordinated work of all participants in the supply chain and the contribution of our team. The new station will not only increase energy production in the country but will also contribute to the development of renewable energy sources, paving the way for environmentally friendly energy consumption", said Ekaterina Andreeva, Commercial Director of Volga-Dnepr Airlines.
In other news, Volga-Dnepr Group recently welcomed its first B777F into its fleet, adding to the 24 Boeing aircraft it already has, and making it one of the world’s largest Boeing freighter operators. The B777F will fly for Volga-Dnepr’s subsidiary, AirBridgeCargo, which will operate the aircraft on a sale-leaseback agreement with Dubai Aerospeace Enterprise.
DB Schenker en route with green trucks in Norway
16-ton Volvo FL Electric trucks are now travelling Norway’s roads as DB Schenker hits another milestone in its zero direct emissions strategy. The first truck was recently unveiled by Norway’s Prime Minister, Erna Solberg, who naturally was very welcoming to the latest move to improve air quality in Oslo city: “We rely on ambitious and innovative players like DB Schenker to take on new green technology. I would like to commend you for an innovative approach that goes beyond the use of electric trucks. With Enova support and significant investments in electric vehicles, and a centrally located logistics terminal, you are showing the way.”
State-owned energy agency Enova supported the launch of Norway’s first, series-produced 16-ton truck with an electric drive, thus noise-free and CO2 and nitrogen oxides emission-free. Eventually, by the end of this year, DB Schenker will own a fleet of eleven electric trucks, replacing its diesel trucks, and creating a total fleet of 23 electric vehicles (including electric vans and bicycles) that will operate out of its new Oslo City Hub (inaugurated in MAY19), and delivering around 800 shipments within Oslo every day.
Jochen Thewes, DB Schenker’s Chief Executive Officer said: “We at DB Schenker are fully committed to continuously reducing our ecological footprint. We are determined to offer our customers greener and cleaner logistic solutions to support them in their sustainability goals. With the new Volvo FL Electric truck and with the support of Enova at our Oslo City Hub, we are now able to prove that emission-free operations are feasible in urban transport. We are proud to deliver best-in-class solutions to protect our environment and to contribute to the greater ambition of a climate-neutral society.”
On a global level, DB Schenker has committed to reducing its greenhouse gas emissions by 40% by 2030 (compared to 2006). The latest success in implementing sustainable urban logistics in Oslo, is a large step in that direction already.
Airbus slimming down in North America
The drop in aircraft orders led to Airbus announcing that it would be cutting 15,000 jobs by mid of next year. In addition to its plans to reduce the workforces across its European plants (-5,100 in Germany, -5,000 in France, -1,700 in the UK, and -900 in Spain), the North American plants are in for streamlining, too.
Currently many are on furlough, whilst the Wichita engineering site had already seen a cut of 50 subcontracted engineers, and over in Mobile, 40 subcontractors have been laid off. Airbus is offering a “voluntary employment separation program” to employees in the Americas. It says most job cuts impacted staffers in the commercial aviation business, which the downturn has particularly hammered. In the hope that this will be taken by enough current employees, the company aims to have its restructuring measures in place by Summer 2021. Staff reductions are just part of the package, which has seen projects, such as a second Mobile support hangar costing in the region of USD 40 million, or the development of the A220-500, have been put on hold. The focus is on conserving cash, given that Airbus is currently sitting on around 150 undelivered planes.
eCommerce & Covid-19 pushing up surcharges at UPS, FedEx & USPS
As in most other countries, the Covid-19 pandemic, forcing people to stay home, has led to a sharp increase in eCommerce, and thus the number of parcels travelling across the USA. Both FedEx and UPS reported over 20% volume growth in ground delivery over the past quarter, whilst the United States Parcel Service has seen more than double that growth. More parcels mean more deliveries, mean more routes, more costs and, ultimately therefore, an action to buffer the financial output – in the form of surcharges for domestic deliveries. UPS was the first to unveil their surcharges back on 07AUG20, now FedEx and USPS have joined in.
In a statement, FedEx explained: “As the impact of the virus continues to generate a surge in residential deliveries, we are entering this holiday peak season with extremely high demand for capacity and are experiencing increased operating costs across our network. We anticipate residential volume to continue to surge into the new year.” This translates into surcharges starting at USD 1 per parcel up to USD 4, depending on shippers’ weekly volumes, along with fees for oversize shipments, those requiring additional handling and even a USD 350 fee for so-called “unauthorized” ground deliveries. Those surcharges even increase (in some cases by 50%) in the peak NOV/DEC season, before readjusting in the new year.
In a similar vein, though not quite as tough, the USPS recently published increases of between 6.75% and 13.3%, due to take effect mid OCT20.
Time more competitors got on the parcel delivery scene across the Pond.
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