Embraer’s $150 million divorce settlement from Boeing – announced on 16 September after more than four years of legal wrangling – marks the end of one the most remarkable betrothals in recent aerospace history.
Back in early 2020, as reports circulated of a mysterious infectious coronavirus spreading through Asia, executives at the Brazilian company’s headquarters in Sao Jose dos Campos were putting the finishing touches to a complex internal restructuring that would carve out the commercial aviation business from the rest of the company.
Source: BillyPix
Meijer insists Embraer Commercial Aviation is a ‘stronger’ business than it was when Boeing was set to take it over
Once complete, the plan was for that entity to fold into Boeing, leaving just two Western manufacturers of jet airliners. Embraer’s erstwhile rival Bombardier was in the process of divesting the remainder of its commercial aviation interests, having transferred its flagship CSeries narrowbody programme to Airbus where it became the A220.
Embraer’s executive jets and defence units would remain within the legacy company, the Brazilian government having been reluctant to allow the latter – responsible for the Super Tucano and C-390 military aircraft as well as some sensitive technologies – to fall into foreign hands.
Veteran African aviation journalist, event organiser and consultant, Nick Fadugba has died suddenly aged 69.
As a long serving Aviation Club Member Nick was known to many. His infectious smile, gentlemanly manner and incredible industry knowledge made him extremely popular and he will be very much missed.
The UK-based Fadugba served until recently as the chair of the African Business Aviation Association (AfBAA) and for a brief time he was secretary-general of the African Airlines Association (AFRAA).
He established his company African Aviation Services (AAS) in 1990 with the pan-African vision of promoting aviation development throughout Africa.
He passionately believed that aviation could be a vital catalyst for Africa’s economic and social transformation. Since 1988, he has provided a wide range of consultancy and advisory services to international aviation, finance and leasing organisations and to African Governments.
Fadugba helped pioneer international aviation conferences in Africa, focusing on aviation finance, leasing, aircraft maintenance and aviation training and published one of the first Pan-African aviation publications.
In 2020, South Africa’s Department of Public Enterprises (DPE) appointed the Nigerian-British born Fadugba as one of the interim six-member on South African Airways (SAA) board to govern the restructuring and relaunch of the carrier.
“This is a terrible shock for us all,” said Times Aerospace editor-in-chief Alan Peaford. “He was someone who helped spark a genuine interest in Africa and the African aviation scene. This is a great loss to the industry in the region.”
Committee member Max Kingsley-Jones, he of Cirium Ascend Consultancy, conducted a fireside interview with Max Kownatzki, CEO of SunExpress, on 17 April.
Max Kownatzki (left) answers Max Kingsly Jones questions.
The Turkey-based airline is a 50/50 joint venture between Turkish Airlines and Lufthansa. Its network spans 200 routes and 68 destinations across 35 countries. It carried 12m passengers in 2023. It has an all-Boeing 737 fleet comprising 737NGs and Max, with a further 74 Max orders plus options on 45. The fleet this summer will increase to 77 with Max deliveries and short-term ACMI capacity. The orderbook will allow the fleet to grow to 150 aircraft in 2033 and to 166 by 2035.
The carrier placed a large order at Dubai 2023 for 45 737 Max (28-8s and 17-10s), plus options for 45, with deliveries scheduled between 2028 to 2035. The airline’s first -10s are due to be delivered in 2028, unless the airline exercises an “upgauge” option on its earlier 737-8 orders. Kownatzki said that it is due to take five Max in 2024 and no delays expected. SunExpress is talking to Boeing about a further five Max deliveries in 2025 but any delays could be offset by extending its 737NG leases.
Kownatzki said that the fleet is currently not big enough to consider diversification to operate Airbus aircraft, but that could change when it reaches 150 aircraft in the next decade. “With 166 aircraft we’re shooting for in 2035…then it’s important to basically not be dependent on one single aircraft manufacturer”. He added that having engine choice and availability is “even more critical” than aircraft manufacturer concentration, he says, which makes diversification a pressing factor.
The Aviation Club’s programme for the rest of the year includes a networking drinks on 6 June for YAP’s (Young Aviation Persons) at the Royal Overseas League.
Mehmet Nane, Chairperson of Pegasus Airlines, Thursday 13 June
Arjan Meijer, President & CEO, Embraer Commercial Aviation, Thursday 5 September
Tony Douglas, CEO Riyadh Air Wednesday 6 November
Campbell Wilson, CEO of Air India, Tuesday 3 December
On Thursday 29 March 2024, Sir Tim returned to the Aviation Club for a fireside chat with Max Kingsley-Jones. The pair chatted for 15 minutes at this sell-out lunch event, before taking questions from the assembled group.
The Aviation Club has held four successful Forum events since October 2022. All are run and mediated by Committee Member Michael Halaby, whose ongoing commitment and energy means we will be continuing the programme into 2024 and beyond. We extend a big thank you to Michael and all our panel participants, and look forward to another great year!
– Our most recent Forum was held in Nov 2023, entitled “The sky’s the limit – how operational improvements can aid aviation in decarbonisation’ with your colleague Jonathon Counsell, Head of Sustainability at International Airlines Group (IAG) and Sergio Colella, President-Europe at SITA.
– Our third Forum – in September 2023 – was called “ ‘Testing, testing’ Flying Examples of Next Generation Technology” and consisted of Tom Grundy, CEO of Hybrid Air Vehicles and Stephen Fitzpatrick, CEO and Founder of Vertical Aerospace; both of which have flown next generation aircraft. We had ~60 attendees.
– Our second Forum was held in March 2023, entitled “Practical ESG solutions for the aviation sector”. Panellists were Jonathon Counsell, Head of Sustainability at IAG, Tim House, Chief Operating Officer of ESG advisory at BDO and Barry Moss, President of PACE. We had ~70 attendees
– Our debut event was held in October 2022, entitled “The Cutting Edge of Net Zero Aviation Pioneers”. Panellists were Dr Amy Ruddock of Carbon Engineering, Jaspal Jandu, CEO of LCI and Gabriel Lepine of ZeroAvia. We had ~60 attendees.
AVIATION CRICKET TOURNAMENT – Friday 9 June 2023 A huge and very heartfelt thank you to all those who sponsored, attended and generously donated to the inaugural charity Aviation Cricket Tournament on Friday 9 June. The day raised in excess of £15,000 for Kangaroos, a charity that provides game-changing activities and support for children and adults with learning difficulties.
Particular thanks are due to the companies that very generously sponsored teams and made the day possible:
AJW x2 (also sponsored the Aviation Club UK’s team!) PDQ Airspares – Winners of the Grand Final Clyde and Co Hayward and Green Aviation Floral Image
Special thanks go to Jeremy and Simon Green, Hayward and Green, for organising such a brilliant and enjoyable event, to Murrae Ross-Eskell, Horizon Executive Search, for her technical skills on the electronic scoreboard and to AJW Group for supporting ‘team Aviation Club’.
The tournament will become an annual fixture on the Club’s events programme and planning has already started for the 2024 event and we will circulating more information and photographs from this year’s event soon.
Article courtesy of Travel News Update. To subscribe for your free weekly industry update visit TNU: Travel News Update
John Holland-Kaye shows HM Queen Elizabeth around the terminal named after her. May 2014. Heathrow image.John Holland-Kaye will make a return visit to the Aviation Club on Thursday 8 June.
The event marks his decision to stand down as CEO of Heathrow Airport Ltd in June after nine years in charge of Europe’s largest international airport.
Holland-Kaye has been Chief Executive of Heathrow (LHR) since July 2014 having previously led the team for the development and construction of Terminal 2.
He joined the then five-airport company (Aberdeen, Heathrow, Southampton & Stansted) as Commercial Director in May 2009, and was responsible for a 30% growth in retail income and improved passenger experience. Holland-Kaye was previously Divisional CEO with Taylor Wimpey Plc, Operations Director at Taylor Woodrow Plc and Divisional Managing Director at Bass Brewers Ltd.
His focus during the early years of his tenure as CEO was the push for the third runway plus a growth of passenger numbers which reached a record 81m in 2019.
Nobody could have forecast what happened in March 2020 with Covid and its effect on international air transport.
With a limp approach by the Department for Transport (one could use the same for government), and the begrudging support of the British airlines, Holland-Kaye became the unofficial spokesman for the industry. In what was a gruelling time, the personable Holland-Kaye handled it well and was at ease with the media.
On Tuesday 18 April Jozsef Varadi, Founder and CEO of Wizz Air addressed members and guessed at the Avaition Club’s networking lunch at the RAC, London.
Victoria Moores attended the lunch and reported on behalf of Aviation Week/Air Transport World. Victoria Moores joined Air Transport World as London-based European Editor/Bureau Chief on 18 June 2012. Victoria has nearly 20 years’ aviation industry experience, spanning airline ground operations, analytical, journalism and communications roles.
LONDON—Wizz Air CEO József Váradi sees ample opportunities for further expansion after claiming four key strategic wins during the pandemic but acquiring TAP Portugal is definitely not one of them.
“The industry is expected to perform roughly around 95% of pre-pandemic capacity going into summer, but Wizz Air is at 170% of pre-pandemic capacity,” Váradi said in an April 18 keynote address to the Aviation Club of the UK in London. “We have more opportunities than we can execute. That’s been the case for some time.”
In 2023, the Wizz Air franchise is expecting to add 15 million passengers through organic growth and market stimulation. “This is the size of TAP Portugal. Why would we be interested in acquiring TAP Portugal if I can grow that magnitude of business organically, with no complexities and no real issues with integration and politics,” Váradi said. “Having said that, we would be very interested in seeing assets becoming available, like Gatwick slots and other similar initiatives. But we are not interested in buying bad airlines.”
Váradi flagged four “strategic gains” over the past two to three years, which have expanded the group’s footprint in the UK, Italy, Albania, Romania, and Abu Dhabi. “We suffered a lot, but at the same time COVID was probably one of our best strategic opportunities in the history of the company,” he said.
Wizz Air bought Norwegian’s London Gatwick slot portfolio, basing five aircraft at the airport. “That was a big deal,” he said. “Actually, we spent quite a lot of money on that.” When asked whether Wizz might expand into UK regional bases, Váradi replied that he is “extremely keen and eager” to develop Wizz’s London presence. “In terms of priorities, I think we should still be pushing for London, as opposed to go into the countryside.”
Váradi’s second strategic win was “invading Italy,” creating six new bases and gaining 10% market share. This expansion was fueled by favorable long-term airport deals, agreed to during the pandemic. “Within a year or two, we will be larger than ITA, the national carrier,” he said.
The third gain was on Wizz’s Central and Eastern Europe home turf, where the group’s market share has risen from 18% in 2019 to 27% today. “We really stepped up in two countries in particular, in Albania and Romania,” Váradi said. “So, quite a significant step change, in terms of market power and presence in the market.”
Finally, Wizz Air set up a new airline in Abu Dhabi. Váradi said some commentators have described Wizz Air Abu Dhabi as a crazy move, but he sees the Middle East as “the new Europe.”
“What happened in Europe after the Second World War; that’s what’s happening in the Middle East as we speak. I think the whole of the Middle East is transforming itself, economically and societally. There is a lot going on and we want to be part of it,” he said. “We continue to take growth opportunities in the region, not only in the Emirates, but also in other countries, even in Central Asia, as a result. “
Wizz’s mission is to be the lowest-cost producer in a commodity market. “Elastic demand is universal. We are seeing the same needs and aspirations among consumers in the Middle East. No one wants to be ripped off,” Váradi said. “Everyone wants to fly safe.”
Váradi is a keen supporter of tight regulatory oversight, especially when it comes to safety, and he said the Middle East authorities have been extremely stringent. “The regulatory scrutiny we are under in Abu Dhabi, I can tell you, is probably greater than here in the UK, or what we are having under EASA, so I’m actually very satisfied,” he said. “We are watched carefully, and we are benefiting from that level of scrutiny.”
Liquidity Over Dividends
Wizz’s first Airbus A321XLRs will likely be deployed on services between the UK to the United Arab Emirates (UAE), further growing the group’s Middle East presence and network.
“First, that aircraft needs to be delivered. I heard, recently, that we may get the first one towards the end of next year,” Váradi said. “We want to use the XLR for joining the dots, penetrating existing markets through longer-range flying. Our market focus is going to be, certainly for the early stages, limited to the existing footprint. Think of Dubai to London, Abu Dhabi to London, Saudi to London, those sorts of ideas.”
All this expansion costs money. In 2019, investors criticized Váradi for carrying too much cash. They urged him to pay a dividend, but Váradi refused, arguing that the company’s significant liquidity should be used for assets or strategic gains.
“Time is confirming our view that cash is king—and cash became an even bigger king during the last two to three years,” Váradi said. “This is certainly one of the principles that we’re sticking to. We’re going to make sure that we have cash on hand all the time—maybe more than prudently needed—to make sure that we have room to play, if sufficient opportunities arise. And this is really what we have done over the last two to three years,” he said.
On emergence from the pandemic, Wizz Air’s business was badly affected by the Russia-Ukraine war. “All of a sudden, we found 40% of our business next to the frontline,” he said. “Even worse, 11% of our total capacity at that time was allocated to Ukraine and Russia.”
Wizz Air went through a military-style operation to move its 280 Russia- and Ukraine-based staff. Of these, over 90% are still employed by Wizz. Váradi said this shows that Wizz Air is not just “a mindless capitalist animal, hunting for profit.”
“I think you should probably expect Wizz Air to be the first airline to go back to the market, whenever the war is over,” he said. “We watch it with a lot of interest and with a lot of commitment.”
Váradi was also quizzed on his expectations for this summer, following Europe’s significant operational challenges during the summer 2022 ramp-up. “You put it very diplomatically, saying that last summer was ‘challenging,’” he replied. “I think last summer was crap, to be honest.”
Wizz Air came away from that experience with some key lessons, including its over-reliance on other stakeholders. “If the supply chain breaks down, we’re going to break down with it too,” he said. “We have started isolating ourselves from the supply chain, to create resilience that we can control.” Váradi estimates that Wizz Air has invested £150-200 million ($186-248 million) since summer 2022, to cover spare aircraft and additional operational staff, such as standby pilots and cabin crew.
“Do I think the supply chain, the operating environment, is going to be great this summer? I don’t think so,” he said. “I don’t think it’s going to be a lot better than it was last year.”
While ground handlers may have learned lessons from 2022, increasing their resilience, Váradi believes the single biggest European challenge will be air traffic control (ATC). The ATC challenge is threefold. Firstly, there is a shortage of air traffic controllers, with a three-year training lead time. Secondly, 20% of European airspace is closed because of the Ukraine conflict, causing bottlenecks. Finally, military flight activity is intensifying, taking priority over commercial aviation.
“This is going to be massive,” Váradi said. “Lack of staff, congestion and a lot of military activities in civil airspace, so I’m not overly hopeful.”
At the AGM on 18 April 2023 the Club appointed new Chairman, Tony Whitty (right) and Treasurer, Arnaud Fiscel (left), with Karl Brünjes becoming Immediate Past Chairman.
The Club thanked Karl for his sterling work as Chairman, having served for an extended period across the pandemic.
Three newly elected committee members, Viktor Berta, Max Kingsley-Jones and Jack Sosnierz, also assumed their places on the Committee at the start of a three year tenure. To view all Committee members visit The Aviation Club UK Committee Members
Jozsef Váradi, once of Malev Hungarian Airlines.Wizz Air founder and Chief Executive, the sometimes controversial (remember the Cardiff and Doncaster cancellations & BBC story with a good ending www.bbc.co.uk/news/uk-england-beds-bucks-herts-64999557), Jozsef Váradi will make a return visit to the Aviation Club of the United Kingdom on Tuesday 18 April. He did appear by video at the height of the pandemic in October 2020. The Club’s Annual General Meeting takes place prior to the luncheon.
Wizz Air was born in 2003 competing with the state-owned Malev Hungarian Airlines which finally collapsed in 2012. Váradi, whose education included a spell at the University of London for a law degree, was for ten years with Proctor and Gamble rising to Sales Director for Central and Eastern Europe.
In February 2015 Wizz Air Holdings Plc started trading on the London Stock Exchange (LSE) and in 2018 created Wizz Air UK with UK-registered aircraft. The current UK Managing Director, since 2021, is a French lady, Marion Geoffroy, a graduate of Université Paris Sud, having joined the carrier in 2015 as General Counsel.
Wizz Air recently announced the launch of a new inclusive ‘She Can Fly’ cadet programme at the Wizz Air Pilot Academy, for women wishing to become commercial pilots.
The airline currently operates around 175 Airbus A320 series aircraft.
Wizz is a member of Airlines UK and for the third quarter of 2022 announced £800m turnover compared to £360m a year before. Net income was £33m compared to a net loss of €232m
The Aviation Club has now published the full luncheon diary for 2023.
Following Váradi on Thursday 8 June at the Royal Overseas League (ROSL) is John Holland-Kaye, with what will be his final appearance as CEO of Heathrow Airport, followed on Tuesday 12 September by Gael Meheust, President and CEO, CFM, also lunch at the ROSL.
The Club returns to the RAC for its final 2023 lunches with Sir Stephen Hillier, Chair of the Civil Aviation Authority on Wednesday 8 November and Tuesday 5 December, Mesfin Tasew Bekele, CEO, Ethiopian Airlines, since March 2022, when he replaced the very popular Tewolde Gebremariam who has retired. https://www.aviationclub.org.uk
Article from TNU MAY 2024 Committee member Max Kingsley-Jones, he of Cirium Ascend Consultancy, conducted a fireside interview with Max Kownatzki, CEO …Read More »
