Private-lift membership company Wheels Up increased revenue and added members but also reported a net loss in the fourth quarter of 2021, the New York-based firm announced yesterday. During the period, revenue increased 64 percent year-over-year to $345 million while the number of active members grew 31 percent to 12,040, Wheels Up reported.
The company’s net loss rose $42 million year-over-year to $77 million. Wheels Up chief financial officer Eric Jacobs said a rollout of technology initiatives will streamline the company’s operations and add capacity through greater utilization. “That, combined with rate increases and cost-saving measures, should drive strong margin improvements starting in the second half of the year,” he said.
Wheels Up chairman and CEO Kenny Dichter added that more members are making longer-term commitments to the company, which is “giving us clear revenue visibility for the year ahead and the confidence to invest in our growth while absorbing short-term margin pressures.”
AINsight: Will Sanctions on Russia Upend Bizjet Sales?
The Russian invasion of Ukraine has drawn condemnation and severe sanctions from governments globally. Many businesses worldwide have pulled back from doing business with, or suspended selling goods and services in, Russia. The sanctions will almost certainly have serious and perhaps economically devastating consequences for Russia, including in its business aviation segment.
Despite the highly complicated and rapidly evolving sanction rules worldwide, purchasers may initiate purchase, leasing, and financing transactions with unsanctioned and other Russian persons who can lawfully sell assets. But the parties may have to traverse a minefield of sanctions and other transaction obstacles.
If the purchaser cannot confirm the seller is a non-sanctioned Russian person or other lawful seller, the purchaser may need to walk away from the deal. However, the sale might proceed if the true seller surfaces or the purchaser can establish, with the advice of counsel, that sanctions do not apply or a license exists or may be obtained for the purchase.
One hopes that no one in the business aviation industry will look askance at the human tragedy caused by Russia’s invasion of Ukraine. But private aviation is a transactional and relationship business with value and responsibility around the globe. We can, with due caution, continue to pursue multinational purchases and sales of aircraft that may involve Russian persons while we support a peaceful and constructive resolution of our geopolitical realities.
According to the National Business Aviation Association (NBAA), the FAA has revised its previously published notam and regulatory orders blocking Russian aircraft from U.S. airspace. As revised, notam 2/2415 now refers to “a Russian person or entity identified by the International Trade Administration’s consolidated screening list” versus the previous and more sweeping “person who is a citizen of the Russian Federation.”
“We’re pleased to see the FAA issue this revised notam,” said NBAA senior v-p for safety, security, sustainability, and international affairs Doug Carr. “Several on-demand charter operators contacted NBAA seeking clarity, which we then conveyed to government officials. This clarity will greatly assist with compliance.”
The FAA’s notice applies to commercial and non-commercial aircraft operations, NBAA said, but exceptions are available for humanitarian or search and research missions, which must receive appropriate clearance from the FAA and U.S. Department of State. Aircraft experiencing in-flight emergencies are also excepted.
Similar airspace restrictions are also in effect in many European countries and Canada.
High prices and limited availability continue to hamper the adoption of sustainable aviation fuels (SAF), according to a panel of industry experts addressing yesterday’s annual conference of the British Business & General Aviation Association (BBGA). Speakers anticipated that new mandates requiring greater use of SAF, such as measures introduced in France and California, could provide the nudge they say is needed to push through objections.
Illustrating the relatively weak impact SAF is having on the market, Bombardier Aerospace industry relations manager Leo Knaapen told attendees that the manufacturer now offers free uploads of SAF at its headquarters for customer aircraft, and yet only one in six accept the fuel even when it would cost them nothing to switch from jet-A. He challenged fuel suppliers and FBOs to more effectively educate operators about the benefits of the fuel and its safety credentials.
According to Air BP’s global marketing manager, Laura Bowden, the UK government is now considering an SAF mandate and this week published responses it has received from a consultation process. Aviation consultant and former EBAA chief executive Brian Humphries called for operators and their customers to be granted relief from airline passenger duties in return for buying SAF.
“Mandates will push up demand but we also need to boost voluntary demand,” Bowden said. “The challenge is how we can continue this virtuous circle to increase rates of production and reduce prices.”
Sales for Embraer's executive jets division climbed 7.5 percent last year while revenues grew 5 percent year-over-year (YoY), the Brazillian airframer reported Thursday during its year-end financial results conference call. The manufacturer delivered 93 private jets in 2021 compared with 86 the previous year and its revenues grew from $1.07 billion to $1.13 billion over that span as the airframer’s turnaround plan, launched in response to the Covid-induced 2020 economic crisis, continues to bear fruit.
Last year’s deliveries were comprised of 62 Phenom light and 31 Praetor midsize jets, 39 of which shipped in the fourth quarter (26 light and 13 midsize) and represented an 8 percent YoY bump. The Phenom 300E—the most delivered light jet for 10 years running—was again the most delivered in 2021. Embraer noted NetJets’ October agreement to purchase Phenom 300Es, with the first delivery scheduled for 2023, is valued at more than $1.2 billion.
The executive jets division also signed more than 795 new service contracts, boosting services and support earnings 20 percent to $1.13 billion, equaling its jet sales revenues. End-of-year backlog for its business jets totaled $2.9 billion—17 percent of the company’s total for commercial, military, and business aircraft orders.
Embraer forecasts the company will deliver 100 to 110 business jets this year and CEO Francisco Gomes Neto foresees no supply chain disruptions due to the ongoing Russia–Ukraine crisis.
The Canadian Business Aviation Association is seeking comments from operators concerning their preparation for meeting the country’s mandate to require ADS-B Out in Class A and B airspace (12,500 feet and above) starting Feb. 23, 2023. The five-question survey is available on the CBAA website.
“By letting us know your current equipage and if aircraft modifications are needed to meet the mandate will help the association guide its policy,” the CBAA said. After reviewing the survey responses, the association will present recommendations to Nav Canada and Transport Canada on whether changes should be made to the mandate.
In response to an AIN query about why the mandate was not first issued as a proposed amendment, Nav Canada responded: “The Canadian ADS-B mandate for Classes A and B airspace will not require an amendment to Canadian Aviation Regulations. The requirement will be contained in the Designated Airspace Handbook (DAH) and will require an update to Chapter 551 of the Airworthiness Manual (AWM 551).” Transport Canada told AIN that it will approve the changes to the DAH.
Both agencies said that later this year, a notice of proposed amendments will be submitted for consultation to all stakeholders via the Canadian Aviation Regulation Advisory Council to expand ADS-B requirements to lower altitudes in Class C, D, and E airspace. They noted the requirement is not expected any sooner than 2026.
Dassault Aviation's new high-efficiency particulate absorbing (HEPA) cabin air filtration system has been approved for the Falcon 2000EX series (including the EX, EASy, DX, LX, LXS, and S models). The French airframer says it will provide increased protection against airborne pathogens including viruses such as SARS Covid-19.
The HEPA filtration can capture viruses and bacteria smaller than 0.3 microns and is standard in applications that require strict contamination control such as hospital isolation units and the pharmaceutical manufacturing industry. EASA and other regulators have noted that HEPA filtration can provide protection against many particles including those the size of the Covid virus and suggested that operators install such systems for cabin air recirculation.
The OEM noted the HEPA systems are already available for its in-service large-cabin 7X and 8X, either as a factory-installed option or as a refit through its company-owned service center network, and will also be optional equipment on the 6X, which is expected to enter service by the end of the year.
“While the current Omicron [variant] surge appears to be on the wane, Dassault is committed to offering upgrades that ensure the highest quality of air circulation in the cabins of Falcon aircraft,” explained Jean Kayanakis, senior v-p for the airframer’s worldwide Falcon customer service and service center network.
After a pandemic-plagued 2020, Lufthansa Technik (LHT) returned to profitability in 2021 with revenue rising 7 percent to more than €4 billion, CEO and board chairman Dr. Johannes Bussmann said yesterday, during the company’s annual year-in-review briefing. He added that the full-service MRO still expects to be back to pre-COVID business levels by 2023, but he cautioned that the current “geopolitical situation” and the Russian war against Ukraine clouds recovery timeline predictions.
Bussmann credited his company’s turnaround to comprehensive corporate restructuring, a “clear customer focus,” and new product development, as well as an upturn in MRO demand last year. Government pandemic economic aid also bolstered revenue.
Restructuring activity included LHT’s Rise program, launched in 2020, which reduced the former eight business units to five and resulted in the closing of several facilities. Among product development highlights were strong growth for Aviatar, the company’s in-house digital customer service platform, and Virtual Table Inspection for online inspection of engine parts, which began regular operation in 2021.
In answer to media questions, Bussmann said no Russian-operated aircraft are in its facilities, though engines from Russian lessor-owned aircraft are. He said those power plants would be returned to their owners and affirmed that LHT would abide by current sanctions and not provide parts or services to its Russian customers.
Photo of the Week
Rotorheads flock to Heli-Expo. HAI deemed its Heli-Expo that concluded yesterday in Dallas a success, with attendance and exhibitors at about 90 percent of levels experienced at the pre-pandemic 2020 show in Anaheim, California. Many of the OEMs also announced flurries of orders at the events, and these Robinson helicopters on display were handed over to new customers post-show. Thanks to AIN contributing photographer Mariano Rosales for taking this photo.
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