S&P Global Ratings (S&P) announced that it has revised its outlook on Lloyd’s of London from negative to stable, due to improved underwriting performance and a strengthening of its capital.
Aviation Industry News

S&P revises Lloyd’s outlook

Additionally the ratings agency also affirmed its ‘A+’ issuer credit and financial strength ratings. The revision and ratings apply to Lloyd’s, the Society of Lloyd’s, and its core subsidiaries.

New (re)insurance start-up, Convex to launch

Insurance industry experts Stephen Catlin and Paul Brand have announced the launch of Convex Group, an international specialty insurer and reinsurer focused on complex risks.

Convex launches with USD1.8bn of initial committed capital and will draw down USD1.6bn to commence business; it will have access to further capital as the business expands. The company has received an AM Best rating of ‘A-’ (Excellent) and regulatory approval to operate in London and Bermuda.

Convex will underwrite insurance and reinsurance for complex specialty risks across a diversified range of business lines in London and Bermuda, the company said in a statement. “The business brings together an exceptional group of talented underwriters who will focus on areas where they have a competitive advantage and aim to deliver top quartile, risk adjusted returns,” the statement continued.

MSP Underwriting renamed

Cincinnati Financial has renamed the parent company of newly acquired Lloyd’s business Beaufort Underwriting. In a press release, the carrier announced the business, MSP Underwriting, will become Cincinnati Global Underwriting, effective immediately.

Hive Aero expands into AVN52

In a press release, Hive Aero announced its expansion into underwriting Excess Third-Party Aviation War Liabilities (AVN52). The company said its AVN52 line for 2019 is USD47.5m, backed by the major Lloyd’s insurers Beazley and Arch.

IATA downgrades its 2019 profit outlook for Airlines

The International Air Transport Association (IATA) announced a downgrade of its 2019 outlook for the global air transport industry to a USD28 billion profit (from USD35.5 billion forecast in December 2018). That is also a decline on 2018 net post-tax profits which IATA estimates at USD30bn.

The business environment for airlines has deteriorated with rising fuel prices and a substantial weakening of world trade. In 2019 overall costs are expected to grow by 7.4%, outpacing a 6.5% rise in revenues. As a result, net margins are expected to be squeezed to 3.2% (from 3.7% in 2018). Profit per passenger will similarly decline to USD6.12 (from USD6.85 in 2018).

MHI to acquire Bombardier Regional Jet Program

In a press release, Bombardier announced it has entered into a definitive agreement with Mitsubishi Heavy Industries (MHI), to sell its regional jet program for USD550m.

Under the agreement, MHI will acquire the maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft, including the related services and support network located in Montréal, Québec, and Toronto, Ontario, and its service centres located in Bridgeport, West Virginia, and Tucson, Arizona, as well as the type certificates.

The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.

Paris Air Show 2019

The 53rd International Paris Air Show took place in June 2019 at the Exhibition Center of Le Bourget. The biannual event, is one of the largest and longest-running aerospace trade shows in the world, and brings together industry players to showcase a broad range of commercial and defence products, services and technologies.

While the show was another busy affair, with some 300,000 plus visitors in attendance, on the order front this year’s event was relatively quiet recording deals and commitments for just over 860 new aircraft. This figure is some way below that recorded at Paris in 2017 and according to FlightGlobal is the second lowest figure recorded in the last seven years of the major air shows.

As ever, one of the main talking points of any big industry show is who will get the most aircraft orders out of the two biggest manufactures, Airbus or Boeing?

This year, it was Airbus who took the honours, announcing new business for 363 commercial aircraft, comprised of 149 firm orders and 214 commitments. The highlight of the show for the European manufacturer was the unveiling of its new A321XLR, a longhaul version of the A321neo, which will become available from 2023. The aircraft racked up over 240 orders, commitments and conversions, with the largest deals coming from Indigo Partners, American Airlines and Qantas1.

In contrast, Boeing announced new business for 232 orders, with the majority share coming from International Airlines Group (IAG) which committed to 200 737 MAX 8 and MAX 10 aircraft in a deal valued at more than USD24bn at list2. This order is the first for the MAX since the worldwide grounding of the aircraft type in April and was one of the biggest surprises of the show when it was announced at the end of the second day.

In the regional sector, ATR secured orders for over 140 aircraft, which included a commitment for 105 aircraft from lessor Nordic Aviation Capital (NAC). Brazilian manufacturer Embraer announced orders for some 78 aircraft at the show, with KLM committing to 35 E195-E2 aircraft for use in their Cityhopper fleet. Elsewhere, Japan’s Mitsubishi Aircraft Corp. secured an order from an anonymous customer for 15 of its renamed SpaceJet M100 aircraft, formally known as the Mitsubishi Regional Jet (MRJ).

Aircraft orders aside, electric and hybrid technology had a noticeable presence at the show with a number of companies showcasing their latest innovations, aircraft and systems. One particular company that attracted media attention was Israel-based aircraft manufacturer Eviation Aircraft who announced US-based Cape Air as the launch customer for its new electric aircraft named “Alice”. Scheduled to undergo flight tests this year, the aircraft can seat nine passengers and cruise at a speed of 260 knots for a range of up to 650 miles. Eviation said it plans to make the aircraft available for commercial use in 2022.

Additionally, Rolls-Royce announced it has agreed to purchase the electric and hybrid aerospace propulsion activities of Siemens, United Technologies unveiled plans for a new hybrid-electric turboprop codenamed “Project 804”, and Airbus announced it has teamed up with aerospace firms Daher and Safran to develop a new hybrid propulsion system named EcoPulse with aims to test a hybrid aircraft by 2022.