With one in four people now locked down, business aviation is clearly heading into a downturn.
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European charter operator GlobeAir has restricted operations in nine European countries that have been most affected by coronavirus.
The Austria-based operator will restrict operations in France, Switzerland, Austria, Germany, The Netherlands, Spain, Belgium, Luxembourg and the United Kingdom. The company says it will be issuing a full refund to affected passengers.
Separately, GlobeAir says that it has repatriated 226 people since March 6th. “The main reason why many of them have chosen to fly private can be attributed to the present status of commercial airlines, being the latter unable to offer repatriation flights for citizens.” said the company.
An NBAA News Hour webinar on Friday, March 27th, at 11 a.m. EDT will focus on how the business aviation industry can stop the spread of Covid-19 during flight operations. One of the top measures advised is to properly sanitise aircraft cabins.
The NBAA also recently published Aircraft Disinfection and Cleaning Procedures Guide.
The one-hour webinar will highlight:
-Recommended aircraft cleaning practices and products from aircraft OEMs and the U.S. Centers for Disease Control and Prevention
-Guidance regarding cleaning products and enhanced cleaning procedures for the cabin, lavatory and the flight deck, taking particular care with sensitive avionics
-Recommended personal protective equipment for aircraft cleaning and detailing crews.
“Now more than ever, it’s critical that business aviation flight crews adhere to proper aircraft disinfection and cleaning practices and understand the correct procedures for different areas and materials,” said NBAA’s director of flight operations and regulations, Brian Koester, who will present during the webinar.
The webinar also will feature perspectives from NBAA personnel and other industry professionals, as well as a Q&A session.
The NBAA News Hour webinar is free to all active members. Registration will be made available via the NBAA News Hour webpage and recordings will be made available following the event.
Eurocontrol posted side-by-side videos showing air traffic over Europe on Tuesday, March 26, 2019, versus Tuesday, March 24, 2020.
Although the traffic is not just limited to business aircraft flights, it shows just how significant the drop in flights in European airspace has been. Earlier on Twitter WINGX Advance said that it had seen a 50% drop in business aviation flights in Europe so far this week. It said commercial (airline) flights had dropped by as much 80%.
#COVID19 – snapshot of a few hours of traffic on Tuesday 26 March 2019 and Tuesday 24 March 2020 – showing the massive drops in traffic all across the @eurocontrol area @Transport_EU @IATA @A4Europe @ECACceac @ACI_Europe @CANSOEurope pic.twitter.com/3YZiKXQ8By
— Eamonn Brennan (@eurocontrolDG) March 25, 2020
Finance ministers of the G7 Group of the world’s largest economies have pledged to “do whatever is necessary” to mitigate the economic impact of the Covid-19 pandemic. The move follows a plea from the Organisation for Economic Co-operation and Development (OECD) to launch a new Marshall Plan for global economic recovery.
G7 finance ministers and central bank governors said in a statement: “Collectively, G7 nations have already enacted a wide-ranging set of health, economic, and financial stability measures. We will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system. We also pledge to promote global trade and investment to underpin prosperity.”
The G7, or Group of Seven, is an organisation made up of the world’s seven largest advanced economies. Members include: Canada, France, Germany, Italy, Japan, UK and US.
‘Co-ordinate on a weekly basis’
Today’s global financial system today is better positioned to withstand shocks, maintain market functioning, and sustain the supply of financing to support the real economy because of reforms since the global financial crisis, according to the statement. The finance ministers also pledged to “coordinate on a weekly basis” as they implement remedial measures and take “further timely and effective actions”. Read the full statement here.
Meanwhile, OECD secretary general Angel Gurría recently called for a global recovery initiative on the combined scale of the US Marshall Plan, delivered in the 1940s and the New Deal of the previous decade.
‘Marshall Plan and New Deal – combined’
“This is the third and greatest economic, financial and social shock of the 21st Century, and it demands a modern, global effort akin to the last century’s Marshall Plan and New Deal – combined,” said Gurría. “That effort must focus especially on those who were already in physical, economic and social precarity, and strengthen the foundation for our common future. As governments accelerate this work, multilateral action will make their initiatives far more effective than if countries continue to act alone.”
Under the Marshall Plan, the US government transferred more than $12bn in economic recovery programmes to Western European countries after the end of World War Two to finance post-war reconstruction.
In the previous decade, US President Franklin D. Roosevelt injected billions of dollars into the US economy, via a programme of public works, financial reforms and new regulations. The initiative was designed to offer relief, reform and recovery from the Great Depression of the 1930s.
Central bank governors, including Andrew Bailey new governor of the Bank of England (pictured), joined G7 finance ministers in promising to “do whatever is necessary” to aid economic recovery.
In a post on LinkedIn, Tobias Klietman, president and founder of TVPX, says that it is still possible to import an aircraft into the US, as long as the closing took place outside of the US.
Klietman also cautions that some previous ports of entry are currently available, and points to a new requirement stating that all aircraft imported into the US must show evidence that it was cleaned and disinfected prior to its departure to the US.
You can read the post directly on LinkedIn by clicking here. Alternatively, you can read the post in full below.
“Despite the turmoil the COVID-19 pandemic has caused worldwide, you can still import aircraft into the US for a pre-purchase inspection, or post-closing if the aircraft closing took place outside of the US. US Customs and Border Protection (CBP) is still clearing merchandise coming into the US. However, for the time being, the processes that we have become accustomed to with respect to aircraft imports have changed.
First, ports of entry such as Bangor Maine are not currently viable. In order to make entry, importers will need to find another port of entry such as Boston-Logan International Airport (BOS), Massachusetts. BOS is not the only alternative, but importers should take more time to plan and determine where CBP can clear their aircraft.
Second, we are seeing a new requirement we have not seen in the past. CBP is requesting evidence that imported aircraft have been cleaned and disinfected prior to departure from the country of export. This was required for the last two aircraft TVPX imported, and we expect that this will continue. These documents are now being electronically uploaded along with the importer’s entry documents.
Lastly, because everything is in such flux, advanced planning cannot be emphasized enough. Making arrangements with FBO’s, requesting landing rights, and communication with CBP and port authorities are all among the details that need a little extra attention when importing aircraft.
Importing an aircraft may also involve a change in registration. Delays at the FAA issuing fly wires, and the availability of DAR’s to issue Standard or Export Certificate of Airworthiness may also factor into the equation. Every situation needs to be managed on a case by case basis.”
London City Airport said that it will close to all private and commercial flights from Wednesday, March 25th. In a post on the airport’s website, it did not give a date that it is expecting to be reopened by, only that it is expecting it to be at the end of April.
“Following the Government’s latest instructions in response to the Coronavirus outbreak, we have made the difficult but necessary decision to temporarily suspend all commercial and private flights from the airport.
This will begin in the evening on Wednesday 25 March and is expected to last until the end of April. We will keep this under review.
At this point in this fast-moving and unprecedented situation, we think this is the responsible thing to do for the safety and wellbeing of our staff, passengers and everyone associated with the airport.
During this period, we will continue to follow official guidance and work with the authorities to understand the situation and how best to respond.
We will keep you up to date with relevant information and news, as and when we have it.”
Constant Aviation says that in two weeks, it has already applied the MicroShield 360 antimicrobial shield to over 250 business aircraft.
“We recognize the urgency operators have to treat their aircraft to help protect passengers, crews and maintenance technicians from bacteria and germs,” said David Davies, CEO, Constant Aviation. “That’s why we have dedicated more resources to this program. Our objective in expanding the applicator network to airports nationwide is to make it as convenient and efficient as possible for aircraft to be treated.”
You can read the full release below.
“Constant Aviation is working around the clock to treat business and private aircraft with MicroShield 360, an FDA-approved* antimicrobial shield. Since March 9, the MRO and its authorized partners have applied the product to more than 250 aircraft – including the entire Flexjet fleet of private aircraft. The number of aircraft treated is expected to double by the end of the month. Application crews are now present at more than 150 airports nationwide, and technicians have streamlined the process to less than two hours even on large-cabin aircraft.
“We recognize the urgency operators have to treat their aircraft to help protect passengers, crews and maintenance technicians from bacteria and germs,” said Constant Aviation Chief Executive Officer David Davies. “That’s why we have dedicated more resources to this program. Our objective in expanding the applicator network to airports nationwide is to make it as convenient and efficient as possible for aircraft to be treated.”
MicroShield 360 is a proprietary antimicrobial coating system that kills 99.99 percent of bacteria. It has been tested for effectiveness and durability, ensuring that treated surfaces are reducing germs 24/7. The coating is clear, colorless, odorless, non-toxic and hypoallergenic and safe for humans and animals.
Each MicroShield 360 application consists of a three-step process: First, an electrostatic disinfectant is applied to all surfaces; then a second, specially formulated disinfectant is applied; finally, a proprietary coating imparts a biostatic finish to treated surfaces, preventing pathogens from living on them going forward.
Since it constantly reduces microbial contamination of bacteria, viruses, mold, algae, yeast, mildew, fungi and odors, the MicroShield 360 coating can play an important role in helping to protect passengers and crew from a wide range of illnesses. These include MRSA, E. coli, Norovirus, C. diff, flu strains, gram-positive and gram-negative bacteria, enveloped viruses including the common cold and more than 90 additional diseases and conditions.
MicroShield 360 is available for all commercial, private and business aircraft. It is offered exclusively through Constant Aviation, the only aircraft maintenance repair organization with access to the treatment.”
Germany-based business aviation consultancy WINGX Advance said on Twitter that business aircraft flights had dropped by 50% in Europe so far this week.
50% reduction in business aviation flights in the European area so far this week. Severe, but less than the close to 80% shutdown of scheduled airline capacity.
— WINGX Advance (@wingxbizav) March 25, 2020
VistaJet said in a LinkedIn post that it is offering its empty legs to governments that need to transport medical equipment.
The International Business Aviation Council (IBAC) says that it will offer remote auditing of International Business Aircraft Operations (IS-BAO) and International Business Aircraft Handling (IS-BAH) organisations during the coronavirus outbreak.
Part of the IS-BAO certification process involves taking one of IBAC’s workshops, but instead of being face-to-face, IBAC says that it will begin offering the workshops as webinars from the beginning of April.
“We are currently testing this new format for the workshops as an alternative to on-site events due to the recent virus constraints,” said Katherine Hilst, IS-BAO operations manager, IBAC. “As much as we prefer to work with these operators and auditors to present the workshop in person, this will be a convenient and safe way to continue supporting this curriculum. We will be adding to the webinar schedule and interested attendees can register from our website at ibac.org.”
In his latest blog post, Harry Clarke, head of data and insights at Avinode, says that all the forward demand that the company is seeing is last-minute demand.
“Overall, the trends were not promising. A few things have changed. Demand for charter, whilst weaker than usual, has not come to an abrupt stop – even with lockdowns in place,” says Clarke.
Clarke then uses the Avinode data to illustrate the recent shift towards requests for trips departing sooner.
You can click here to read the full blog post, which also looks at a small recovery in intra-European demand, as well as some positivity in domestic US business aircraft flying.
In conjunction with MAX Security Solutions, UAS International Trip Support has launched a PDF download with resources for flight departments during the Covid-19 outbreak.
The latest version, dated March 24th, runs to 104 pages long, and details, for each country that has travel restrictions in place, what travel advisories and measures are in place.
Although you will need to register to download that document, its a great resource to keep up to date with all of the current restrictions.
You can register for the download by visiting the UAS website. Alternatively, you can click here to go straight to the registration page.
In an emailed statement to Corporate Jet Investor, Aero-Dienst said that its air ambulance fleet is being kept busy. Over the last weekend, it flew five missions, all repatriating German citizens back to Germany.
“During the current crisis, Aero-Dienst’s ambulance fleet keeps busy in worldwide repatriation back to Germany. Last weekend our 5 ambulance aircraft flew long missions with augmented crew to minimize overnights. The destinations varied from Palma, Canary Islands, Egypt, Marocco to Nairobi. We dutifully continue to pursue our tasks in flying and maintaining business and ambulance aircraft – even in difficult times like these.”
Malta-based law firm GVZH Advocates has published a note on the current coronavirus situation in Malta.
“As the number of cases in Malta increases, the Maltese Government has made continuous efforts in order to ensure that the current situation regarding the coronavirus (COVID-19) is contained. To limit the spreading of this disease as much as possible, the Government has published a number of Legal Notices relating to the closure of places open to the public which includes inter alia; restaurants, bars, gymnasiums etc. as well as an extension period to the closure of schools in the country. On Sunday 22nd March, the Government went a step further and will publish a list of shops which are to close as from 23rd March 2020.
Any person who fails to abide by the regulations stipulated in these legal notices shall be guilty of an offence and shall, on conviction, be liable to pay a penalty of €3,000 for every occasion that the order for closure of public places open to the public is breached. Likewise, any shops not obeying the order to close down will also face such a fine.
The Maltese public is being urged to minimize social contact as much as possible and to avoid mass gatherings to limit the risk of transmitting this virus locally. Thousands of workers across the country are being asked to work from home in order to reduce social contact to the greatest extent.
Apart from introducing measures to reduce contact between people, authorities are also in the process of ramping up training efforts for healthcare workers and stocking up on medical equipment and other resources.
Closure of MIA
As of 20th March 2020, all inbound commercial flights to Malta have been suspended. Malta will now only allow cargo, humanitarian and repatriation flights to land in an attempt to limit the spread of the novel coronavirus. The Malta Airport International CEO, Alan Borg, referred to this as “a dark day for the local aviation industry and all stakeholders who have worked tirelessly to ensure the industry’s growth and success over the past years”.
The Malta Business Aviation Association (MBAA) represents the largest sector of Malta’s aviation industry. The MBAA has released a statement to the industry in relation to the COVID-19 pandemic providing a general overview of precautions and relevant sources of information to its members. The business aviation sector in Malta is crucial to Malta’s recent success in growing its emerging aviation sector and such needs to be safeguarded. The MBAA have stated that it will be at forefront of making the voice of the business aviation sector heard with government and local authorities and that any relief packages that are to be offered are sufficient and assist business aviation operators survival in these tough business conditions which have resulted from the curtailment of flights all around the world.
The Coronavirus has also started taking its toll on businesses in Malta, with many of them having to temporarily shut down their operations. Countries all over the world have announced a variety of measures which are geared towards relieving the distress that businesses have to face as a result of the coronavirus pandemic. The Maltese Government has announced a number of measures to reduce the strain that local businesses are facing at this present time. These general economic measures amount to 850 million EUR, comprising of 700 million EUR in temporary passive assistance, i.e. tax deferrals and 150 million EUR in state bank guarantees. Another measure implemented by the Government is the acceleration of VAT refund payments to business. Moreover, the Government is allowing local banks to accept requests for a 3-month suspension for the repayment of personal and business loans.”
S&P Global Ratings has cut Bombardier’s credit rating by one notch from B- to CCC+.
“In the weaker macroeconomic environment we anticipate, in large part because of the COVID-19 outbreak, Bombardier Inc.’s capital structure appears to be unsustainable in the long term,” said the ratings agency. “At present, we don’t believe Bombardier will face a near-term liquidity crisis given the ample cash on its balance sheet at the beginning of the year. “The negative outlook reflects the possibility of another downgrade if macroeconomic conditions further deteriorate from our expectations leading to our view that Bombardier is likely to consider a distressed exchange offer or sub-par redemption in the near term.”
“While we recognize that large cabin business jets, which will make up the majority of Bombardier’s sales in future will see less downward pressure than small cabin jets, we expect demand will be lower than previously expected,” said S&P. “We were expecting S&P Global Ratings’ adjusted debt-to-EBITDA of 6x-7x in 2021. However, we now believe leverage is likely to be higher given our view that earnings and free cash flow prospects for the company’s business jet division have deteriorated, at least over the next couple of years.”
S&P is still expecting the sale of Bombardier’s rail business to happen.
Gama Aviation has sent out a note that details how the company is dealing with the current coronavirus pandemic.
The company says that its main priority is protecting the safety of its employees and customers, whilst trying to maintain business continuity as much as it can.
You can read the full note below.
Gama Aviation, the global business aviation service provider, is today updating investors on the Group’s approach to the COVID-19 pandemic, the pro-active actions being taken, current trading and outlook.
“The Group’s over-riding priority through this period of disruption is the continued safety of its global workforce and clients. We continue to operate under the enhanced preventative and protective measures advised by the World Health Organisation and national health care agencies.
In parallel with our efforts to protect our people and clients, the Group is strongly focused on maintaining business continuity. We have fully implemented our working from home policies and reduced on site presence to the minimum necessary, in line with government guidance. All our divisions remain operational and are delivering services in support of our clients’ missions, particularly for those delivering critical services such as NHS Scotland, the Ministry of Defence and other government agencies. In addition, the Group has other longstanding contracts which contribute recurring revenues.
Additionally, and in view of the uncertain global trading environment, the Group is taking pro-active and decisive measures to preserve cash. These measures include but are not limited to; placing annual pay increases on hold, halting recruitment except for critical hires to meet contract commitments, reducing or postponing non-essential expenditure, increasing the emphasis on credit control and pursuing government-sponsored assistance measures. These interventions are being reviewed daily and will be augmented as required.
As the Company’s divisions remain operational, the impact on the Group’s revenues has been limited thus far. But with an expected escalation in COVID-19 cases within the Group, an increasing focus on containment by national governments and the increased threat of airport closures, demand for services is now reducing at a significant rate.
However, the Group benefits from operating to a resilient and robust business model whereby recurring revenues from long standing government and other contracts will provide the Group with some mitigation against the profound impact of the downturn in activity levels by maintaining critical revenue flows.
The Group retains a USD$50m credit facility with HSBC of which USD$20m is currently drawn down. The Group currently has USD$9m of cash on the balance sheet and anticipates further net cash inflow during the remainder of March, particularly from contracted payments under government related contracts.
Despite the proactive measures the Company is taking and the underlying resilience of our business model, the COVID-19 crisis is likely to severely impact the Group’s trading performance. However, due to the fast evolving and unpredictable nature of this pandemic, the Board does not believe it is possible to forecast the potential impact with any degree of certainty and that, to do so, could potentially be misleading. Accordingly, it is no longer providing financial guidance for the year ending 31st December 2020.
Marwan Khalek, Gama Aviation’s CEO, said: “Over the past four decades we have evolved our business model, increased the depth, breadth and scale of our operations and enhanced the skills and expertise of our people in an effort to make our business more resilient to the challenge of periodic economic downturns. The challenge to our business of the COVID-19 crisis is significant and we will continue to manage and operate the business diligently and in the best interest of all our stakeholders in these very difficult circumstances. Our resilient and robust business model, the resolve of our people and the loyalty and support of our clients and shareholders will all be severely tested as we navigate our way through this unprecedented challenge. I am confident that, together, we can prevail and emerge stronger.”
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