Aviation Weekly Update
Highlight Summary
This report is intended only for Asterisk Advisors’ subscribers who are generally institutional investors, and is not meant to be appropriate for retail investors.
General Aviation News:
• Oil prices were lower, a tad more in the spot markets rather than the forward markets.
• The general manager of the B737 Max program “left” the company after 18 years.
• Russian authorities have discovered five separate de-icing issues impacting B737 NGs operated by two airlines.
Airline News:
• Alaska stopped hedging for fuel.
• United extended the borrowing capacity of its revolving credit facility by $1.115B.
• United will resume flying to Israel in early March.
• Southwest reached a tentative agreement with its around 18,000 transport workers.
• American raised his baggage fees by $10 per bag at the airport and $5 if checked on line.
• JetBlue will be dropped from the Dow Jones Transportation Average and replaced with Uber Technologies.
• Lufthansa’s proposed investment in ITA Airways is under intense scrutiny from the European Commission.
• Lufthansa ground and cargo workers went on strike again forcing the cancellation of around 90% of flights.
• Linx Air filed for creditor protection while ceasing operations.
• Air New Zealand and Qantas reported 2H23 results and both indicated some pressures on fares.
• Royal Brunei Airlines ordered four more B787-9s.
• Cebu Pacific Air sticked to P&W for the next neo engines.
• AirAsia unveiled plans to launch the world’s first low-cost network carrier.
Aircraft Lessor News:
• Aircraft lessor equities performed again along broader market trends.
• AerCap and Fortress Aviation reported 4Q23 results.
• Air Lease issued at par C$400mm of 5.4% senior unsecured medium-term notes due June 1, 2028.
• AerCap signed lease agreements with Thai Airways for 17 aircraft including 10 A321neos and seven widebodies.
• FW Aviation is trying to repossess four A321 leased to VietJet, in the process testing lessors’
Equity and Fixed Income Markets:
• Rates were slightly higher in the front end but slightly lower in the back end, which flattens the key curves.
• Domestic airline equities underperformed the SP&500.
• Aviation spreads continued to grind tighter.
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