Interview: David Arendt, Cargolux CFO

Cargolux finances three more 747-8Fs, sells one 747-400F

Cargolux has arranged Ex-Im backed funding for three of the four Boeing 747-8Fs due to be delivered in 2012, and the carrier will consider an operating lease structure for the remaining freighter, CFO David Arendt has told Aviation Exchange. The airline is the launch partner for the 747-8F and will sell one of its older 747-400Fs to Silk Way Airways later this month after receiving two of the three Dash-8s being delivered this year, he added.

The fourth aircraft, which arrives in February 2012, will be financed by PEFCO under an Ex-Im guarantee, Arendt confirmed. The fifth aircraft, delivering in April 2012, will be acquired by a joint venture comprising Cargolux and three equity co-investors – Crédit Agricole, DVB Bank and KfW-IPEX Bank – and will draw from Ex-Im backed debt provided by JP Morgan. The sixth, arriving in July 2012, looks set to be funded by an Ex-Im bond on the capital market, with Goldman Sachs and Crédit Agricole signing preliminary agreements.

Interview: John Plueger, Air Lease Corporation President

ALC gives muted reaction to 737MAX amid renewed focus on order book

Air Lease Corporation this week conducted a major product review of the re-engined 737MAX with Boeing, ALC president John Plueger has told Aviation Exchange, with the lessor making no secret of its preference for a brand new single-aisle model. Plueger said ALC will remain "very engaged" with Boeing over the development of the 737MAX, but he acknowledged the manufacturer's need to plan for the "totality of their single and twin-aisle product line," including possible upgrades to the Boeing 777-300ER as well as the planned Boeing 787-10.

ALC was founded last year after industry veteran Steven Udvar-Házy retired as CEO of market leader ILFC to set up a competing lessor. Plueger came on board shortly afterwards, having served as acting CEO at ILFC following Udvar-Házy's departure, and under their joint stewardship ALC has rapidly grown its portfolio to a fleet of 65 aircraft, with forward orders for a further 234 jets by 2020.

Kuwait Airways flies the nest

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After 18 years of political wrangling, the Kuwaiti parliament passed a privatisation law in May 2010 which proponents said would reinvigorate the country's bureaucratic, public-sector dominated economy. Cabinet ministers forced the legislation through after 28 of the emirate's 50 parliamentarians opposed it, with some arguing that the changes were tantamount to "the robbery of the wealth of Kuwait and a plan to destroy the country".

Top of the agenda was the long-awaited move to privatise Kuwait Airways, which has itself done little to preserve the emirate's wealth in recent times. The flag carrier posted losses in 20 of the last 21 years, haemorrhaging more than $3 billion including $556 million last year alone – a time when most airlines were rebounding from the global recession...

UAE aviation: taking off

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Speaking at the Lowy Institute for International Policy in Sydney, James Hogan, chief executive of Abu Dhabi’s Etihad Airways, last month described aviation as "the absolute lifeblood of the United Arab Emirates’ future economic prospects". The growing geopolitical significance of Asia places the Gulf states at a "crossroads between the Old World and the New", he said, making diversification of their oil-centric economies key to continued prosperity.

For a country of just eight million, the UAE’s aviation footprint has already reached astounding proportions. Dubai International Airport became the third busiest international air traffic hub in the world during the first quarter of 2011, handling more than 12 million passengers, lagging behind only London Heathrow and Hong Kong...

Interview: Serhan Ulga, Pegasus CFO

Pegasus negotiating massive order to triple fleet size

Turkish low-cost carrier Pegasus Airlines is negotiating with Boeing and Airbus over an order totalling more than 100 aircraft, CFO Serhan Ulga has revealed to Aviation Exchange. The airline, which currently has a fleet of 39 mostly Boeing aircraft, hopes to reach an agreement by the end of the year. It has not yet decided whether to select one manufacturer or place a split order for jets.

"We are in the negotiation process for a big order with both manufacturers," Ulga told this news service. "We are seriously considering the best alternative. We'll go with whatever is the best economic equity value for our entire order."

Interview: Aengus Kelly, AerCap CEO

AerCap ramps up share repurchasing as acquisitions take a backseat

Dutch lessor AerCap is actively buying stock under its USD 50m share repurchase programme, as newly appointed CEO Aengus Kelly tightens the company's funding structure amid uncertainty in the global economy. Having reduced the average age of its 335-aircraft fleet to 5.4 years, the lessor is tempering asset acquisitions in order to focus on shareholder returns, Kelly told Aviation Exchange.

Proceeds from the sale of aircraft teardown subsidiary AeroTurbine, bought by ILFC earlier this month for USD 228m, have yet to be earmarked for specific transactions, but the windfall could be used for further share repurchases. "We are not here for growth for growth's sake. We are here to increase shareholder value," the CEO said. "When we look at an asset acquisition opportunity it has to be a better deal than buying back our own shares."

Interview: Hussein Massoud, EgyptAir CEO

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EgyptAir is no longer in crisis mode. Having lost $140 million in the aftermath of Hosni Mubarak’s overthrow, the flag carrier is bouncing back with a two-phase summer programme which has restored capacity to above 2010 levels. Though its fortunes remain entwined with political events beyond his control, Hussein Massoud, chief executive of EgyptAir Holding Company, is tentatively steering the airline back onto the path of expansion.

“Immediately after the revolution we had a very hard time during February and March,” Massoud tells The Gulf. “There was no previous planning [for civil unrest], and you had a situation where, in just one day in February, we also had to fly home 9,000 Egyptians from Libya.”

The uncertainty that engulfed North Africa led to an immediate drying up of passenger demand. Footfall in Egypt’s airports fell by two thirds as tourists, business people and the country’s diaspora postponed their travel plans, opting to wait until the political situation became clearer. EgyptAir’s revenues plummeted by 80 per cent, and Massoud took the exceptional step of grounding one third of his fleet...

Interview: David Cush, Virgin America CEO

Virgin America tempers 2012/13 delivery schedule over fuel concerns

Virgin America will consider postponing up to 13 Airbus A320 deliveries previously slated for the latter half of 2012 and the first half of 2013, CEO David Cush has told this news service. The US low cost carrier, which has rapidly expanded its fleet to 39 jets since launching in 2007, is “still in a growth trajectory” and remains on-track to reach 111 aircraft by 2019, Cush said.

“We have significant flexibility on the size of our fleet over the next 24 months,” the CEO told Aviation Exchange. “We have not entered into agreements for aircraft that had been contemplated for the second half of 2012 [six jets] and first half of 2013 [seven jets] and, therefore, have the fleet size flexibility necessary to make adjustments.”

Interview: Titus Naikuni, Kenya Airways CEO

Consolidation on the cards as Kenya Airways launches ten-year plan

Kenya Airways is open to the prospect of merging with "like-minded carriers" in order to deliver on its ambitious ten-year growth plan, CEO Titus Naikuni has told Aviation Exchange. The industry veteran, who was last month appointed to IATA's 31-strong board of governors, said that closer cooperation with partners is a logical next step as codeshare agreements had fuelled the airline's rapid expansion.

"Kenya Airways sees benefits in consolidation with like-minded carriers," he told this news service. "This should come progressively, perhaps through cooperation initially."

Setting the record straight

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If there’s one thing that haunts Gulf airlines as they continue their indomitable march along the path of expansion, it’s the ever-present suspicion that they – unlike rivals in Europe and beyond – somehow enjoy unfair competitive advantages at their home bases.

Accusations typically centre on supposed government subsidies and access to cheap fuel. Despite opening its accounts to auditors PwC, Dubai-based Emirates has never fully shed this reputation. But its latest attempt is the most comprehensive to date, ushering in the services of research firm Oxford Economics, an affiliate of Oxford University, to set the record straight once and for all.

The findings of the consultancy, whose clients include numerous governments and central banks, go beyond affirming the primacy of air connectivity in the Gulf. They conclude that Emirates' growth has its roots in operational efficiency, open competition, acute market awareness and benign geography...