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Boeing scraps 2019 financial forecast, halts share buybacks in wake of 737 MAX disaster

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World’s biggest aerospace corporation was forced to pull its full financial forecast for the current year due to unresolved issues surrounding Boeing’s once best-selling 737 MAX aircraft.

Boeing also announced plans to pause share buybacks, citing “a challenging time for our customers, stakeholders and the company.”

“Across the company, we are focused on safety, returning the 737 MAX to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public,” Boeing Chairman and CEO Dennis Muilenburg said in a statement.

The manufacturer had previously posted a report on the first-quarter earnings that managed to fall in line with analysts’ expectations, while its revenue was slightly less than projected. Boeing’s earning per share totaled the expected $3.16 from January through March, while the revenue amounted to $22.92 billion against $22.98 billion forecasted by London-based provider of financial markets data Refinitiv.

Boeing stressed that the previous guidance didn’t reflect the impact of two crashes of the company’s flagship planes, leading to the grounding of all 737 MAX 8 jets by global regulators, lawsuits from some air carriers and a decline in market value.

According to the producer, more than 135 test and production flights of updated software for the 737 MAX have been carried out so far.

Boeing’s bestseller crashed on March 10 not far from the Ethiopian capital of Addis Ababa six minutes after takeoff on the way to Nairobi, Kenya. The tragedy, which killed 157 people, marked the second crash involving the same jet model in less than six months. In October, the same type of aircraft, operated by Indonesia’s Lion Air, crashed in the Java Sea shortly after takeoff, claiming the lives of 189 people.

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India: Jet Airways’ demise leads to spike in airfares, massive hotel cancellations

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The abrupt shutdown of Jet Airways operations has left Indian tourism industry a worried lot as it has led to an average 25 percent spike in airfares across the sectors leading to massive hotel cancellations, says industry experts.

Some key sectors like Mumbai-Hyderabad, Mumbai-Delhi and Delhi-Mumbai have seen the fares flying by 62 percent, 52 percent and 49 percent, while the Bengaluru-Delhi sector has had the lowest impact with a 10 percent surge shortly before and soon after the grounding of Jet.

Financially struggling for months, Jet Airways decided to call it quits from Wednesday night, leaving 22,000 jobs at stake and inconveniencing lakhs of passengers both domestic as well as international as Jet was the single largest airline out of and into the country.

“The impact of grounding of Jet Airways is not only restricted to the airlines sector as tourism has taken a severe beating due to the massive surge in airfares during the peak demand season. The impact is unlikely to fade away anytime soon and may continue into the rest of the year,” Travel Agents Association of India (TAAI) president Sunil Kumar said Friday.

He said, both the domestic as well as international travel and related sectors are affected as travelers are cancelling their hotel bookings as airfares have surged by over 25 percent on average.

Leading tour operator Cox & Kings’ Karan Anand said the shuttering of Jet has upset the travel plans of many who have booked on Jet.

“This is the peak travel season and the airfares for the next 10-12 days are up by at least 25 percent as the capacity has fallen massively dissuading last minute travelers,” he added.

However, online travel aggregator Easemyyrip.com co- founder Nishant Pitti tried to downplay the impact saying airfares normally fluctuate as the aviation industry is always unpredictable.

“It is true that passengers are in panic now but going forward there will not be much impact as other airlines like Spicejet and Indigo are adding more planes into their fleet which will help balance demand-supply gap,” he said.

Train booking and discovery platform Confirmtkt cofounder Sripad Vaidya said due to the flight charges going up, there is a huge surge in people opting for trains and buses.

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California-based Surf Air eyes profitability in 2019

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A turbulent year for Surf Air has finally come to an end. Exciting recent updates have already resulted in massive improvements to its scheduled service and membership growth.

A recent lawsuit against Encompass Aviation, its former flight operating partner, has been settled. Under the terms of the settlement, Surf Air has regained full access to its entire fleet of branded Pilatus PC-12s, an unfortunate consequence of negotiations that caused severe disruptions to the company.

“By doubling down on our most popular routes and eliminating non-core flying we have proven route profitability and that the fundamental business model works. Our plan for 2019 is to continue to invest further into these core markets and expand access to Surf Air through new, more flexible membership product offerings,” says Surf Air Chairman & CEO Sudhin Shahani.

Recent Club Updates:

A Robust Core Schedule

Surf Air has rebuilt a core schedule and added more flights across its most important routes: Los Angeles, San Francisco, Santa Barbara, and Lake Tahoe. The company will continue to add flights as it continues to acquire more members.

The company will also add back leisure weekend destinations as it makes sense (Las Vegas, Napa, Monterey, and Palm Springs).

Best-in-Class Reliability

With the help of Advanced Air, the company’s current third-party flight operator and long-time partner, they’ve restored operational reliability to its former best-in-industry levels of over 90% completion factor.

“Advanced Air has been a critical partner during this transitional period. With their proven professional and safety record, they’re the perfect, value-aligned partner to continue to scale our business,” says Sudhin Shahani.

Flexible, Per-Seat Membership

Perhaps Surf Air’s most promising opportunities for scaling membership growth is the new Express membership, allowing flyers to buy and fly on a per-seat basis. Meaning, for the first time, less frequent flyers can enjoy the time-savings benefits of zero hassle air travel.

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Rolls-Royce Tay 611-8 engine achieves 10 million flying hours

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The Rolls-Royce Tay 611-8 engine, which entered service in 1987, recently achieved another incredible milestone by reaching 10 million flying hours in nearly 5 million flights. The engine powers a range of Gulfstream’s highly successful large-cabin business aircraft, such as the Gulfstream GIV, GIV-SP, G300 and G400, and has established a reputation for outstanding dependability, efficiency and low noise generation.

The performance of the Tay 611-8 enabled the Gulfstream GIV to revolutionise the business aviation market with its high cruising speed and the intercontinental range of about 4,300 nautical miles. Over the past three decades, the Tay 611-8 has achieved numerous records for speed and range. These achievements have been perpetuated by its successor, the Tay 611-8C, powering the Gulfstream G350 and G450. There are over 1,700 Tay 611-8 and -8C engines in service today, with many of these supported by Rolls-Royce’s market leading CorporateCare®.

The background to the first Tay order contract is part of aviation history. In December 1982 the basic details – engine price, quantity, payment terms – were written on a napkin in less than 10 minutes by Sir Ralph Robins, who at the time was the company’s Managing Director, and Allen Paulson, Gulfstream’s founder and then Chairman and CEO. The deal was formally settled in March 1983.

Dirk Geisinger, Director Business Aviation, Rolls-Royce, said: “Reaching 10 million flying hours is an impressive milestone and we are very proud of this achievement. With its legendary reliability the Tay 611-8 became the benchmark for ultra-reliable long distance business aircraft and perfectly illustrates why Rolls-Royce is the leading engine manufacturer in Business Aviation.

“The Tay family with its proven performance has been very successful for us and has propelled our market leadership in this sector. Combining this engine with our latest aftermarket programme CorporateCare Enhanced raises the bar for the whole industry by introducing uncapped troubleshooting, coverage for mobile repair team travel costs and nacelle coverage on later engine models.”

He adds: “CorporateCare Enhanced provides our customers with a global support infrastructure which includes Engine Health Monitoring, a worldwide network of Authorised Service Centres and globally distributed spare parts and engines, all managed by our dedicated 24/7 Business Aircraft Availability Centre. Our customers benefit directly from this investment in proactive care, an in most cases are prevented from missing a planned trip.”

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India’s Jet Airways halts all international and domestic operations

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One of India’s major airlines, Jet Airways, has announced it is temporarily halting flight operations on Wednesday after the carrier failed to secure the “critical interim funding” necessary for the company to remain afloat.

Jet Airways will operate the last flight on Wednesday as it cancels all its international and domestic flights, the airline said in a statement. It explained that it cannot afford to pay for fuel or other critical services to keep the operations going, as all its months-long attempts to seek both interim and long-term funding were in vain.

“Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations,” the statement reads.

Earlier this month, the airline’s fleet was significantly reduced to just five aircraft and it was forced to suspend international operations. On Wednesday, the Jet Airways website listed only 37 domestic flights and had an additional nine-page list of canceled flights, saying that the schedule was impacted by “operational reasons.”

The troubled company failed to receive a stop-gap loan of about $217 million from its lenders as part of a rescue deal agreed in late March, Reuters earlier reported.

“Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” an unnamed bank source in the negotiations on the debt resolution process told the agency.

The uncertainty over the crucial funding crashed Jet Airways stock on Tuesday, with shares plunging around 20 percent.

Employees have been hit hardest by the crisis in the company and have reportedly not been paid in months. The pilots even called on the State Bank of India (SBI) to release the necessary funds and appealed to India’s Prime Minister Narendra Modi to save 20,000 jobs which may be lost in the shutdown.

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