Boeing is in talks with banks about borrowing US$10b or more amid rising costs for the planemaker after 2 crashes involving its 737 MAX jetliner, a source told Reuters Monday. CNBC reported Monday, citing sources, that Boeing has so far secured at least $6b from banks and is talking to other lenders for more contributions. A source confirmed the talks, but it was still not clear how much Boeing would seek to raise and whether it would pursue the selling of new bonds. One key issue for Boeing is flexibility since it is not clear how long the 737 MAX will remain grounded. Reuters reported Friday that the FAA is now unlikely to approve the plane’s return until March, but that could take until April or longer. <br/>
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Airbus is developing a derivatives-based trading platform that will allow airlines to protect against declines in ticket prices -- and potentially help sustain growth and jet orders. Clients of the Skytra subsidiary will trade futures and options on a series of indexes that capture fare fluctuations across the industry. The venture is the brainchild of 2 Airbus veterans and emerged from a workshop with a struggling airline. “What do you do if you lock in your cost but revenues fall?” said Elise Weber, one of the founders. “We said, can’t we improve the risk management of our customers to be able to plan more long-term, to do long-term investment?” Airbus says the mechanism will help airlines to insulate against the impact of reduced demand or increased seat supply, just as they already hedge against currency and oil-price movements. <br/>
Embraer is in the advanced stages of studying the launch of a new turboprop aircraft to be developed through a venture it is planning with Boeing, subject to necessary approvals, a top executive said Monday. The aircraft would be in the same size range or even larger than the 70-seat ATR-72, an aircraft that currently dominates the market, Embraer CE John Slattery said. "It sits in our target market, which we have always been clear is below 150 seats, and will have natural adjacency to the E2 offering," he said, referring to Embraer's family of 80-120-seat regional jets. "The business case is going well." Analysts say such a move could shake up a market dominated by ATR, which controls four-fifths of global sales in competition with the Q400 turboprop. <br/>
Airlines with the best environmental scores should pay less for leasing aircraft than more polluting competitors, the head of Avolon said Monday. The radical proposal from Avolon comes as aviation firms face mounting scrutiny over climate policies not only from environmental groups but also investment funds that monitor Environmental, Social and Governance (ESG) performance. Avolon, one of the top three aircraft lessors, claims to have one of the industry's youngest and most efficient fleets. "But that narrative is not good enough for the next 1, 2, 3 or 4 years," CE Domhnal Slattery warned. "More and more of our major bond investors are keen to understand what our 'E' strategy is within 'ESG'. We in turn are keen to understand when underwriting our airline credits what their 'E' strategy is," he said. <br/>
Boeing’s 737 Max “will safely return to revenue service” in 2020, Avolon has predicted in a new report, but the lessor expects “turbulence” in the aviation industry amid geopolitical uncertainty and rising environmental concerns. “While in 2019 we buckled up, in 2020 we will navigate through turbulence,” states Avolon in a 2020 outlook report. “The fog of geopolitics will continue, with hot spots abounding, from US trade confrontations, escalating tensions in the Middle East and unrest in Hong Kong.” The “flight shame” movement...“was a meaningful drag on growth for air travel in northern Europe” last year, and the airline industry “must be relentless in its efforts to continuously improve” efficiency and “communicate its progress to the flying public”, argues Avolon. <br/>
Night trains have returned to the tracks between Brussels and Vienna amid growing interest in alternatives to flying. The Austrian Federal Railways (ÖBB) Nightjet from Vienna to Brussels is the first ÖBB night train between the two cities since 2003, as Austria’s state-railway revives its overnight network. The revival of the Vienna to Brussels route comes after authorities in Sweden – the spiritual home of the “flight-shame” movement – announced they were also considering the launch of night trains between Malmö and other European cities. The ÖBB, which claims the title of Europe’s largest operator of night trains, said travelling between Vienna and Brussels by train emits 10 times less CO2 than the same journey by air. <br/>
India’s domestic air passenger traffic growth slowed to 3.74% in 2019 from 18.60% in 2018, amid a subdued economy and the grounding of Jet Airways. Domestic scheduled carriers carried 144.17m passengers during 2019, against 138.98m passengers in 2018, data issued by the DGCA Monday showed. “This is a bit disappointing. In 2019, we faced headwinds on account of Jet Airways but 2020 is going to be different and the double-digit growth should be back sooner rather than later,” a DGCA official said. InterGlobe Aviation, which operates IndiGo, strengthened its leadership, carrying nearly 1 in every 2 passengers. Its market share stood at 47.1% during 2019, up from 41.5% in 2018. The airline carried 67.91m passengers in 2019, up from nearly 57.62m in 2018. <br/>
Despite news emerging overnight confirming the potentially deadly coronavirus is spread human-to-human, the overall risk to public health remains low, Australia's chief medical officer says. However, the 3 direct flights into Sydney each week from the virus' epicentre of Wuhan in the Central Chinese province of Hubei will now be met by Australian biosecurity personnel. With the total number of cases now standing at 222 - and 3 recorded deaths - professor Brendan Murphy assured Australians there was no need for alarm. "The risk to the Australian public from this novel coronavirus remains relatively low," he said Tuesday. "Although, we do need to keep a precautionary and active surveillance of the situation." Murphy said no international travellers have yet been confirmed with coronavirus in Australia. <br/>