Indian airline SpiceJet eyes fleet expansion as it returns 737 Max to service

The carrier had placed a milestone order of 155 of the single-aisle jets in 2017 and had flown 13 of them before the Max was grounded globally in 2019......»»

Category: topSource: bizjournalsNov 25th, 2021

Sound Money Is A Prerequisite To Peace, Prosperity, And Freedom

Sound Money Is A Prerequisite To Peace, Prosperity, And Freedom Authored by Patrick Barron via The Mises Institute, There are many good recommendations promoted by Austrian school economists for improving the economy. Although we enjoy successes periodically, most--such as deregulating trucking and airline pricing--involve eliminating previous government interventions. These successes are to be celebrated, of course. But no one can deny that government intervention into the economy has continued, despite these occasional success stories. The reason Big Government has continued to grow is that it controls money production. Not only does government grow in terms of spending, regulations, and interventions everywhere (both internally and overseas), but it threatens our very freedoms. In other words, government's control of money is diametrically opposed to peace, prosperity, and freedom and eventually will destroy our republican democracy. For this reason, returning to sound money--i.e., money that is created by the private market, is part and parcel of the market, and is controlled by no one--should be goal number one for every lover of peace, prosperity, and freedom. Nothing less than the survival of our western-style way of life is at stake. Here are a few examples of how unsound money progresses and masks its destructive power. One, unsound money allows government to confiscate resources at will. For example, in 2020 America's bloated military spent as much as the next eleven nations of the world combined. Of course, military spending went up in 2021 and will continue to increase in 2022. America's annual budget deficit is projected to be somewhere between $1.84 trillion and $3.4 trillion, depending upon whether you ask the Biden administration or the Congressional Budget Office. All of this money is created out of thin air. Americans' taxes will not increase enough to cover even a fraction of the Biden estimate, and there is no appetite in the bond market for more American debt. Therefore, the Fed will monetize the new debt onto its balance sheet. The resulting increase in base money will cause the prices of most goods and services to rise. This impoverishment of the American people through the hidden tax of inflation is possible only because money is completely fiat; i.e., produced out of nothing except the government's printing press and computer terminals. Two, unsound money masks the destructive power of government market interventions. An example is former President Trump's tariffs on Chinese goods. According to a friend of mine, the data is irrefutable that the tariffs worked. Well, as Mark Twain said, there's lies, damned lies, and statistics. What really is irrefutable is the economic law of opportunity cost; i.e., that choosing one thing means the giving up of another. Another is individual preference. The very fact that people must not be allowed to purchase Chinese goods means that they valued those goods to a higher extent than American goods. The reason does not have to be financial. There's always service, availability, quality, etc. So preventing Americans from buying Chinese goods means less satisfaction for Americans. This is just one example. Another is keeping zombie companies in business through artificially lower interest rates means that capital is misallocated to less productive uses. There's a whole panoply of labor laws that artificially raises the cost of American labor, reduces American productivity, and lowers business income. Some workers are priced out of the market through minimum wage and mandatory benefit packages. Business has less capital to invest for expansion. New business starts are discouraged. There's something there for everyone! The destruction is masked by monetarily inflated GDP numbers, artificially suppressed Consumer Price Index (CPI) statistics, increased unemployment payments, and other government programs and manipulated data. Three, and most importantly, Americans' freedom is threatened. Government can print enough money to buy unlimited enforcers of its rules. More IRS agents. More agents for enforcing arbitrary rules of the Occupational, Safety, and Health Administration (OSHA). More agents for enforcing new environmental regulations and laws arbitrarily established by the Environmental Protection Agency (EPA). More Drug Enforcement Agency (DEA) agents. Perhaps even agents to confiscate guns. Conclusion Returning to limited government, creating a more free market order, having a less intrusive government, etc. requires sound money. Sound money is not a guarantee of a free society, but a free society is impossible without sound money. I conclude with these quotes from The Quotable Mises. The last quote is especially pertinent to the point of this brief essay. (Emphases are mine.) The gold standard alone makes the determination of money’s purchasing power independent of the ambitions and machinations of governments, of dictators, of political parties, and of pressure groups. The gold standard alone is what the nineteenth-century freedom-loving leaders (who championed representative government, civil liberties, and prosperity for all) called “sound money.” All those intent upon sabotaging the evolution toward welfare, peace, freedom, and democracy loathed the gold standard, and not only on account of its economic significance. In their eyes the gold standard was the labarum, the symbol, of all those doctrines and policies they wanted to destroy. The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain. I do not want to close on a pessimistic note. Therefore, I offer this final quote from Ludwig von Mises, ever the optimist and ever the gentleman: "Every nation, whether rich or poor, powerful or feeble, can at any hour once again adopt the gold standard." Tyler Durden Sat, 12/04/2021 - 19:30.....»»

Category: smallbizSource: nyt12 hr. 53 min. ago

An Airbus A340 aircraft just landed on Antarctica for the first time ever — see the history of aviation on the 7th continent

In 1956, the US Navy managed to accomplish what many had thought was impossible — landing an aircraft on the Antarctic ice. The first Airbus A340 to land on Antarctica.Hi Fly An Airbus A340 made history in November when it became the first jet of its type to land on Antarctica. The South Pole has a long history of aviation that has contributed to the exploration of the continent. A number of airliners, military planes, turboprops, and luxury jets have landed on the polar tundra since 1956. Airlines operate regularly scheduled service to nearly every corner of the globe across six continents, connecting people to remote islands, deserts, and tundras. However, the 7th continent has proven difficult to reach, though a number of aircraft have successfully made the trek.Winter kayaking in Antarctica.Song_about_summer/ShutterstockAntarctica is the world's least populated continent and is typically home to about 4,400 people in the summer and only 1,000 in the winter. The inhabitants are settled on the continent's many research stations and tourist camps, which are regularly supplied by chartered cargo jets.Port Lockroy research station in Antarctica.Willem Tims/ShutterstockSource: World Population ReviewOn November 2, 2021, the first-ever Airbus A340 aircraft made the journey down to the White Continent, marking a historical feat. The plane flew from Cape Town, South Africa, and flew 2,500 nautical miles (2,877 miles) to Antarctica in five and a half hours.The first Airbus A340 to land on Antarctica.Hi FlySource: Hi FlyThe jet, which was operated by Portugal-based Hi Fly and chartered by luxury campsite Wolf's Fang, carried supplies for the latter's upscale adventure camp located on the South Pole. The plane carried enough fuel to make the journey to Antarctica and back.The first Airbus A340 to land on Antarctica.Hi FlySource: White Desert, Hi FlyAccording to Carlos Mirpuri, Hi Fly's vice president and the Captain of the historic flight, the 3,000-meter (9843-foot) glacial runway had special grooving to help the jet brake easier, though landing the heavy bird was not a problem. However, the reflective blue ice created a glare during landing.The first Airbus A340 to land on Antarctica.Hi FlySource: Hi Fly"The reflection is tremendous, and proper eyewear helps you adjust your eyes between the outside view and the instrumentation. The non-flying pilot has an important role in making the usual plus extra callouts, especially in the late stages of the approach," Mirpuri said.The first Airbus A340 to land on Antarctica.Hi FlySource: Hi FlyDespite the glare, the landing was smooth. "We flew a textbook approach to an uneventful landing, and aircraft performed exactly as planned, Mirpuri said. "When we reached taxi speed I could hear a round of applause from the cabin. We were joyful. After all, we were writing history."The first Airbus A340 to land on Antarctica.Hi FlyHi Fly's historic flight was just the latest addition to the long history of aviation in Antarctica. In 1928, Australian military pilot George Hubert Wilkins flew a Lockheed vega 1 monoplane from Deception Island in the South Shetland Islands over Antarctica in the first recorded flight to the 7th continent.Australian polar explorer Sir George Hubert Wilkins.Hulton Archive/Stringer/Getty ImagesSource: BBCWilkins was accompanied by co-pilot Carl Ben Eielson and the two spent four and a half hours crossing 1,000 miles of the previously unchartered Antarctic area, dropping a flag and document to claim the land for King George V of the United Kingdom.Document written by Sir Hubert Wilkins outlining claim for Australia at Walkabout Rocks.Daleen Koch via the Australian Antarctic DivisionSource: BBC"For the first time in history, new land was being discovered in the air," Wilkins wrote about the journey.Sir George Hubert Wilkins' Lockheed Vega.George Rayner via the Australian Antarctic DivisionSource: BBCWilliam Randolph Hearst, the American newspaper publishing millionaire, funded the project. Flights like these were how worldwide researchers and scientists learned about Antarctica's topography.Expeditioners reading Sir Hubert Wilkins’ proclamation at Wilkins Cairn.Scott Beardsley via the Australian Antarctic DivisionSource: BBCWhen Australia claimed the title of the first explorers to fly over Antarctica, an American navy man and aviator set out to best his feat. In January 1929, Richard Byrd's "million-dollar expedition" set out for the South Pole carrying three aircraft and setting up the first "Little America" naval base.Richard Byrd visits Little America in 1933.Bettmann/Getty ImagesSource: BBCHowever, Byrd did not fly during his first expedition to Antarctica, worrying his Ford Trimotor plane was too heavy and unreliable. Nevertheless, with determination to beat his rival Wilkins, he set out on November 28, 1929, for the South Pole.Richard Byrd posing next to the plane he used on his expedition to the South Pole.Keystone-France/Contributor/Getty ImagesSource: BBCByrd successfully flew across the Ross Ice Shelf and narrowly climbed above the Liv Glacier to the High Polar Plateau during his journey. He dropped a US flag onto the Antarctic tundra, and his achievements far-outmatched Wilkins. After his success, he vowed to return to the polar region.Richard Byrd in the cockpit of the second aircraft he flew over Antarctica.Bettmann/Getty ImagesSource: BBCAfter a few follow-up expeditions in the 1930s, Admiral Byrd launched Operation Highjump in 1946, sending 13 ships and 33 aircraft to the White Continent for exploration, research, mapping, American territorial sovereignty, and naval preparedness for Antarctic warfare.Dr. Paul A. Siple and Rear Admiral Byrd during Operation Highjump.Bettmann/Getty ImagesSource: BBCIt was the largest expedition in history to the continent, though no planes landed on the ice.Admiral Richard Byrd at his accommodation in Little America during Operation Highjump.ullstein picture Dtl. via Getty ImagesSource: BBCWhile the exploration of the polar wasteland started with "mapping wars," which led to the need for control over the territory, eventually the focus turned to scientific research.Antarctic expeditioners.George Rinhart/Corbis via Getty ImagesSource: BBCIn 1955, the US Navy launched Operation Deep Freeze to assist the National Science Foundation in its participation in the International Geophysical Year. IGY was a 67-country collaborative scientific project that lasted from July 1, 1957, to December 31, 1958, and studied topics like Antarctic weather, marine life, and glacial systems.The USS Arneb, the flagship of the Operation Deep Freeze task force.Bettmann/Getty ImagesSource: BBC, National GuardAs part of its preparations, the US Navy managed to accomplish what many had thought was impossible — landing an aircraft on the Antarctic ice. In October 1956, an R4D-5 Douglas Skytrain touched down on the South Pole for the first time ever.The R4D-5 Skytrain is parked at the South Pole behind the American flag after landing at the South Pole in 1956.US NavySource: BBCAfter the historic landing, a new era of science took off with nearly 70 nations participating in the IGY between 1957 and 1958. After the strong year, the Treaty of Antarctica was signed in which 12 countries committed to peace, science, and research on the continent, though there are 54 parties today.Flags of the original 12 signatory nations of the Antarctic Treaty.Bettmann/Getty ImagesSource: BBC"Aviation helped to confirm the ice-covered nature of Antarctica, which arguably contributed to a willingness to compromise in the Antarctic Treaty because there was little immediate prospect for economic gain," Adrian Howkins, a reader in environmental history at the University of Bristol, said.Australian DHC-2 Beaver flying over Mt Henderson in 1959.Australian Antarctic DivisionSource: BBCA number of aircraft have visited the White Continent since the first landing in 1956, like British Antarctic Survey's fleet of De Havilland Canada Twin Otters and Dash-7s started science flights to the frozen south in 1994.A British Antarctic Survey aircraft in Antarctica.British Antarctic SurveySource: British Antarctic SurveyMeanwhile, the US Navy launched later versions of Operation Deep Freeze, sending to Antarctica a USAF C-124 Globemaster...US Air Force C-124 Globemaster on Antarctica.US NavySource: National Naval Aviation MuseumA Lockheed P-2 Neptune...US Navy P2V Neptune in Antarctica.US NavySource: National Naval Aviation MuseumA De Havilland U-1 Otter...U-1 Otter emerges from the maw of a C-124.US NavySource: National Naval Aviation MuseumAn R5D Skymaster...US Navy workhorse, an R5D Skymaster.US NavySource: National Naval Aviation MuseumAn R4D Skytrain...US Navy R4D Skytrain on Antarctica.US NavySource: National Naval Aviation MuseumAnd a pontooned helicopter.US Navy pontooned helicopter.US NavySource: National Naval Aviation MuseumOther military aircraft have also landed on the continent, including the Royal New Zealand Air Force's Boeing 757, which first landed in 2009 and continues to operate supply flights each year.Royal Air New Zealand Boeing 757 jet on Antarctica.Colin Harnish/ShutterstockSource: Simple FlyingAlthough there is no regularly scheduled service to Antarctica, a handful of airlines have touched down on the polar wasteland, including Swiss airline PrivatAir which flew the first Boeing 737 to the continent in 2012.PrivatAir Boeing 737 on Antarctica.PrivatAirSource: South Pole StationMeanwhile, Icelandair's sister carrier Loftleider Icelandic Airlines was the first airline to land a commercial flight on Antarctica in 2015.The first-ever landing of a commercial Boeing 757 passenger airliner by Loftleidir Icelandic.Antarctic Logistics and ExpeditionsSource: Antarctic Logistics and ExpeditionsThe company ferried 60 tourists on a Boeing 757 to Union Glacier on behalf of Antarctic Logistics & Expeditions ALE. The purpose of both PrivatAir and Loftleider's journeys was to see if airliners could successfully transport people and cargo to Antarctica.The first-ever landing of a commercial Boeing 757 passenger airliner by Loftleidir Icelandic.Antarctic Logistics and ExpeditionsSource: Antarctic Logistics and Expeditions, South Pole StationBetween 2019 and 2020, Titan Airways flew two aircraft to the southern-most continent. The first was a Boeing 767 to Russia's Antarctic station, Novolazarevskaya, which landed several times on a 3,000-meter (9,843-foot) runway made of blue ice...Titan Airways' Boeing 767 on Antarctica.Titan AirwaysSource: Simple FlyingAnd an all-business Boeing 757 carrying World Marathon Challenge participants. The landing gear was modified with extended legs to absorb the shock of the ice.Inside Titan Airways' Boeing 757.Titan AirwaysSource: Simple FlyingIn February 2021, Icelandair made the trek with a Boeing 767 to pick up a group of Norwegian scientists from the Troll airfield in Antarctica. The flight involved a lot of planning due to the treacherous conditions on the continent and required six pilots, 13 crew, and one flight engineer to man the journey.Icelandair Boeing 767 in Antarctica.IcelandairSource: IcelandairTo land on Antarctica, aircraft navigate to one of 50 icy runways designated on the icy tundra, though none are actual airports. Two notable ones are the Phoenix Runway and Williams Field's skiway.LC-130s on Williams Field skiway in Antarctica.National Scientific FoundationSource: National Science FoundationIn addition to airline and military operations, there are several countries and organizations that fly planes to the South Pole for tourism or scientific research.Scientists collect meteorites from a glacial moraine at the base of Mt. Ward, Antarctica.NASAAustralia's Antarctic Division ferries expeditioners and equipment from the country to Antarctica. It flies an Airbus A319...Australian Antarctic Division A319 passenger flight.Australian Antarctic DivisionSource: Australian Antarctic DivisionAnd Royal Australian Air Force C-17As.Australian Royal Air Force C17-A Globemaster.Australian Antarctic DivisionSource: Australian Antarctic DivisionThe National Science Foundation, founded in 1959, also regularly operates polar-modified LC-130 Hercules, Twin Otters and Baslers, helicopters, and the US Air Force's C-17 between Antarctica and two main gateways, including Christchurch, New Zealand, and Puntas Arenas, Chile. The operation is part of the US Antarctic Program.Three year-round US research stations in Antarctica that are part of the program.National Scientific FoundationSource: National Science FoundationThe LC-130 Hercules was introduced into the military's Antarctic program in 1960 and has specially made ski-equipped landing gear for landing on the ice.LC-130 airplanes near McMurdo Station.National Science FoundationSource: National Science FoundationThe De Havilland Twin Otter and Basler turboprops are used for domestic flights within Antarctica. They can carry cargo and land on either ice or snow.Twin Otter on Antarctica.National Science FoundationSource: National Science FoundationFour helicopters are used in Antarctica, including two AS-350-B2 "A-Stars" and two Bell 212s.NSF Helicopter.National Science FoundationSource: National Science FoundationMeanwhile, a C-17 carries the bulk of passengers and cargo between Christchurch, New Zealand, and McMurdo Station each summer. The giant jet can carry approximately 121,254 pounds.US Air Force C-17 on Antarctica.National Science FoundationSource: National Science FoundationCanada-based Kenn Borek Air flies Twin Otters in support of US Antarctic Program science and in 2016 flew a rescue mission to the seventh continent to evacuate two people at the Amundsen-Scott South Pole Station who were in need of medical help.Kenn Borek rescue mission aircraft.National Science FoundationSource: National Science FoundationA number of tour operators also fly to the South Pole, like Ice Trek, which flies an Ilyushin-76 from Punta Arenas, Chile, to Union Glacier, Antarctica.Icetrek's Ilyushin-76 on Antarctica.IcetrekSource: IcetrekAnd White Desert, the operator of the luxury campsite on the tundra, which operates a Gulfstream 550 between Cape Town and Antarctica. According to the company, the plane makes the journey in five hours flying at .85 Mach.White Desert Gulfstream 550.White DesertSource: White DesertAntarctica's history of aviation is just beginning as airlines and countries continue to push the boundaries of the southern tundra in the name of science and exploration.Royal NZ Air Force aircraft on Antarctica.Colin Harnish/ShutterstockRead the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 1st, 2021

United and Delta"s flights to South Africa will be impacted by new travel restrictions that throw a wrench in the recovery of international travel

United Airlines and Delta Air Lines had just started flying to South Africa again only to have their flights impacted by new travel restrictions. United Airlines and Delta Air Lines both fly to South Africa.vaalaa / United Airlines and Delta Air Lines are the only two US airlines impacted by new travel restrictions to southern Africa. Both airlines fly non-stop between the US and Johannesburg, South Africa, with United planning to also fly to Cape Town, South Africa starting December 1. Flights to South Africa were temporarily suspended during the COVID-19 pandemic but both airlines resumed flying in 2021. New international travel restrictions being implemented by the US government will affect the two US airlines that fly between the US and southern Africa. United Airlines and Delta Air Lines are currently the only American airlines serving South Africa, from where travel will be restricted from November 29. Both airlines currently fly to Johannesburg, South Africa's largest city, while United had planned to resume flights to Cape Town in December. Delta confirmed to Insider that is not currently planning any service changes in light of the new restrictions."The health and safety of our employees and customers remains our top priority," the statement on Delta's website reads. "Delta will continue to work closely with our government partners to monitor the new COVID-19 variant and any travel restrictions."United did not immediately return Insider's request for comment on how the travel restrictions would impact its flights. The two airlines, among the largest international carriers in the US, had both flown to South Africa prior to the COVID-19 pandemic and suspended flights to the country in March 2020. Flights only resumed in 2021 well after South Africa reopened its borders to international visitors. Delta stopped flying between Atlanta and Johannesburg on March 22, 2020, and resumed the route on August 1, 2020. At a range of nearly 7,500 nautical miles, the Atlanta-Johannesburg route is the longest in the Delta network and is served by an Airbus A350-900 XWB aircraft, one of the newest in the airline's fleet. United launched its route between Newark and Johannesburg in June as part of a minor expansion to Africa during the pandemic that also saw flights between Washington, DC, and Accra, Ghana launched in May. Flights between Washington and Lagos, Nigeria are also scheduled to launch on November 29. Ghana and Nigeria are not affected by the new US travel restrictions. United began its non-stop flights between Newark and Cape Town in December 2019, just four months before the pandemic forced that route to be temporarily suspended. Flights are scheduled to resume on December 1 but it's unclear whether they will actually fly given the new restrictions. Boeing 787 Dreamliner aircraft are used for both United routes, with each boasting a distance of nearly 7,000 nautical miles that make them among the longest in United's network. No airlines, American or otherwise, currently fly between the US and the other seven southern African countries slated to be impacted by the Biden administration's restrictions, including Zimbabwe, Botswana, Lesotho, Mozambique, Eswatini, Malawi, and Namibia.Repatriation flights for US citizens have not yet been announced by either airline for Americans to return home without having to transit through third countries. Qatar Airways and Emirates, two global airlines that earned a reputation for flying repatriation flights during the early months of the pandemic, have both said they will not fly travelers from some southern African countries.South African Airways stopped flying between the US and South Africa on March 29, 2020, and has not resumed flights in part due to the pandemic and in part because of its financial restructuring initiatives. American citizens and foreign nationals flying to the US will need to show a negative COVID-19 test before boarding their flight. The validity of the test required to travel will depend on the vaccination status of the traveler.Unvaccinated travelers to the US will need to take their test "no more than [one] day before travel," according to the Centers for Disease Control and Prevention. Vaccinated travelers to the US will need to get tested no more than three days before travel. Read the original article on Business Insider.....»»

Category: personnelSource: nytNov 26th, 2021

Airline Stock Roundup: 2022 Summer Schedule From RYAAY, DAL, ALK in Focus

Alaska Air (ALK) launches flights to Belize City. Delta (DAL) expects to attract substantial traffic during the Thanksgiving spell. In the past week, European carrier Ryanair Holdings RYAAY.unveiled its schedule for next year’s summer. On a more somber note, RYAAY’s CEO Michael O'Leary reportedly warned that following the renewed surge in COVID-19 cases in Europe, Christmas travel and early bookings for summer are likely to be disrupted.Alaska Air Group’s ALK subsidiary Alaska Airlines launched nonstop services to Belize City, Belize from Seattle and Los Angeles. With air-travel demand picking up in the United States, management at Delta Air Lines DAL stated that it expects to transport up to 5.6 million passengers in the Thanksgiving period this year. Additionally, American Airlines AAL and JetBlue Airways JBLU are seeking the dismissal of the lawsuit filed against their alliance.Read the last Airline Roundup hereRecap of the Latest Top Stories1. As part of its summer 2022 schedule, Ryanair is adding 24 new routes to popular European destinations. RYAAY will operate more than 500 services from the UK airports next summer. Management said that adding 65 B737-8200 ‘Gamechanger’ aircraft to its fleet by next summer will make the schedule “the most sustainable and environmentally friendly”. This is because the B737-8200 ‘Gamechanger’ aircraft offers 4% more seats, 16% less fuel and a 40% reduction in noise emissions. As part of its sustainable operations, RYAAY launched electric handling at 11 major European airports. The 24 new routes include Birmingham to Zadar, Bournemouth to Bergerac and Zadar, London (Luton Airport) to Burgas, Catania and Lublin, London (Stansted Airport) to Menorca and Madeira, Manchester to Vienna and Madeira as well as Newcastle to Ibiza, Zadar, Chania and Riga.2. With the winter holiday season round the corner, Alaska Airlines began a seasonal service running through May 22, 2022, to Belize city from Seattle (Seattle-Tacoma International Airport) and a year-round service from Los Angeles (Los Angeles International Airport) on Nov 19. From Los Angeles, Alaska Airlines is operating flights four times per week to Belize City while from Seattle, it is running twice-weekly flights. The new flights to Belize add to the airline’s existing services to Canada, Mexico and Costa Rica from its West Coast hubs.3. Delta, currently carrying a Zacks Rank #4 (Sell), expects to transport up to 5.6 million passengers in the Thanksgiving period. The projection implies a significant increase from the actual number of passengers (2.2 million) transported by DAL over the Thanksgiving period last year. With friends, families and relatives expected to connect during this phase, leisure travel is expected to get a boost.To boost operations during the busy period, Delta made additional hirings in customer service and reservations. DAL also boosted its strength regarding flight attendants to meet the anticipated increase in the number of flights in operation.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.4. Per a CNBC report, American Airlines and JetBlue asked a U.S. judge to dismiss the lawsuit filed in September on antitrust grounds by the Justice Department (DOJ) and officials in six states. AAL and JBLU are asking for the lawsuit to be dismissed as the DOJ failed to justify the claim that the alliance, which is already in operation, hurt competition or escalated prices.PerformanceThe following table shows the price movement of the major airline players over the past week and during the last six months.Image Source: Zacks Investment ResearchThe table above shows that most airline stocks have traded in the red over the past week, causing the NYSE ARCA Airline Index to decrease 2.3% to $85.26. Over the past six months, the NYSE ARCA Airline Index has depreciated 19.5%.What's Next in the Airline Space?With air-travel demand picking up in the United States, expansion-related updates can be expected from U.S.-based carriers. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 24th, 2021

Target Hospitality Delivers Exceptional Third Quarter 2021 Results Driven by Significant Cash Flows and Strengthening Customer Demand Led by Government Contracts

THE WOODLANDS, Texas, Nov. 12, 2021 /PRNewswire/ -- Target Hospitality Corp. ("Target Hospitality", "Target" or the "Company") (NASDAQ:TH), North America's largest provider of vertically-integrated modular accommodations and value-added hospitality services, today reported results for the three months ended September 30, 2021. Financial and Operational Highlights for the Third Quarter 2021 Revenue increased to $89.2 million for the three months ended September 30, 2021, an increase of 85% year-over-year Net income increased to $6.7 million for the three months ended September 30, 2021, an increase of $14.3 million year-over-year Basic and diluted earnings per share of $0.07 for the three months ended September 30, 2021 Adjusted EBITDA(1) of $37.5 million, up 121% year-over-year Strong cash generation with net cash provided by operating activities of $40.0 million and Discretionary Cash Flow ("DCF") (1) of $34.7 million for the three months ended September 30, 2021, representing 39% DCF yield(1) to revenue Improved net leverage ratio by 52% since the beginning of 2021, marking significant progress towards year-end 2021 target net leverage ratio of below 3.0 times Raised full year 2021 financial outlook by 7% for revenue and 9% for Adjusted EBITDA(1), representing a 25% and 42% increase, respectively, from full year 2020 Executing on premier customer diversification with approximately 52% of third quarter 2021 revenue related to committed revenue contracts backed by the United States Government Continued strengthening customer demand for Target's premier modular hospitality solutions, with third quarter utilization of 75% Approximately 73% of 2021 revenue under committed revenue contracts, with approximately 53% of anticipated 2021 revenue related to government services Meaningful financial flexibility with over $155 million in total available liquidity, with zero outstanding borrowings under the Company's $125 million credit facility Executive Commentary "Our impressive third quarter results demonstrate Target's commitment to executing on its strategic objectives.  Target continues to benefit from its unique position as North America's leader in modular accommodation solutions and the scale of its world-class network, which has created a unique and efficient operating platform.  This platform, along with broadening customer demand, has allowed Target to capture margin expansion and generate significant cash flow through 2021," stated Brad Archer, President and Chief Executive Officer. "We have utilized this positive momentum to meaningfully enhance Target's balance sheet, through the significant reduction of outstanding debt, which has resulted in a 52% improvement in Target's net leverage ratio in 2021.  We believe this commitment to prudent capital allocation builds the foundation to continue executing on our strategic growth objectives.  We are committed to pursuing a growth strategy focused on enhancing value through a balanced portfolio of service offerings, which we believe creates the greatest opportunity to accelerate value creation for our shareholders," concluded Mr. Archer. Financial Results Third Quarter Summary Highlights Refer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s, except ADR and per shareamounts) September 30, 2021 September 30, 2020 (Restated) Revenue $ 89,169 $ 48,263 Net income (loss) $ 6,675 $ (7,603) Income (loss) per share – basic and diluted $ 0.07 $ (0.08) Adjusted EBITDA $ 37,534 $ 17,010 Average daily rate (ADR) $ 76.78 $ 81.28 Average utilized beds 11,087 4,823 Utilization 75 % 36 % Revenue for the three months ended September 30, 2021, was $89.2 million compared to $48.3 million for the same period in 2020. The increase in revenue was primarily driven by the execution of the government services contract, which began March 2021, and continued increasing customer demand in the Company's HFS – South segment. Net income for the three months ended September 30, 2021, was $6.7 million compared to a net loss of $7.6 million for the same period in 2020. Adjusted EBITDA was $37.5 million for the three months ended September 30, 2021, compared to $17.0 million for the same period in 2020. ADR decreased by $4.50 to $76.78 for the three months ended September 30, 2021, compared to the same period in 2020.  The decrease in ADR was primarily driven by lower average ADR in the HFS - South segment, where third quarter 2021 ADR was lower than prior period as a result of committed minimum revenue contracts having materially lower occupancy due to the COVID-19 pandemic.  In instances when actual occupancy is substantially lower than minimum contractual commitments, realized ADR can be materially higher than contractual ADR.  Third quarter 2020 ADR reflects this scenario and creates a higher ADR when compared to a more normal operating environment in third quarter 2021. Average utilized beds increased by 6,264 to 11,087 for the three months ended September 30, 2021, an increase of 130%.  The increase was driven by the government services contract, which began March of 2021, contributing 4,000 fully utilized beds to the Government segment and continued increasing customer demand in the HFS – South segment, which contributed over 2,000 additional utilized beds.     Capital Management The Company had approximately $8.9 million of capital expenditures for the three months ended September 30, 2021, predominately associated with its Government segment and the recently executed government services contract.  As of September 30, 2021, the Company had $30.6 million of cash and cash equivalents and $340 million in gross amount of total debt.  The Company has made significant progress towards strengthening its capital flexibility by reducing outstanding debt by approximately $80 million and improving its net leverage ratio by 52% since the beginning of 2021.  These deliberate actions have resulted in no outstanding borrowings under the Company's $125 million revolving credit facility, with more than $155 million of total available liquidity and a net leverage ratio of 3.1 times as of September 30, 2021.  As a result, the Company has accelerated its year end 2021 total net leverage ratio target to below 3.0 times. Business Update Demand fundamentals have strengthened throughout 2021 and have supported the broadening of customer activity and consistent increases in demand for Target's premium modular hospitality service offerings.  Since year-end 2020, Target has experienced an over 40% increase in customer demand across its Hospitality and Facilities Service segments.  This robust demand has resulted in sequential quarterly expansion of operating margins and utilization throughout 2021. The sustained momentum has allowed Target to execute on its diversification and growth strategy, focused on utilizing existing core competencies to pursue a balanced portfolio of service offerings.  Target has meaningfully advanced its diversification strategy with approximately 52% of third quarter 2021 revenue and approximately 53% of anticipated full year revenue related to its Government services segment. This positive business momentum has resulted in approximately 99% of the Company's anticipated 2021 revenue being under contract with approximately 73% of contracted revenue having minimum revenue commitments.  As the Company previously announced, on November 2, 2021, it has raised 2021 financial outlook to: Full Year 2021 Financial Outlook Total revenue between $280 and $285 million Adjusted EBITDA(1) between $110 and $113 million Interest expense(2) between $33 and $35 million Discretionary Cash Flow(1) between $75 and $80 million Total capital spending between $25 and $30 million, excluding acquisitions Targeting a total net leverage(3) ratio below 3.0x by year end 2021 (2)  Interest expense excludes amortization of deferred financing cost and original issue discount(3)  Total net leverage ratio is defined in the credit facility as consolidated total debt to consolidated EBITDA for the preceding four fiscal quarters Strategic Focus            Target has strategically positioned itself as North America's market leader in premier vertically integrated hospitality solutions by systematically identifying and transitioning its business mix to expand its growth pipeline.  Target has accomplished this strategic growth by intentionally focusing on markets and customers that offer greater long-term growth potential, while optimizing its existing asset fleet and unique capabilities to maximize economic returns.  The scale of Target's modular network and expansive core competencies has created an efficient operating structure, providing substantial revenue visibility from highly contracted revenue with high renewal rates.  These attributes result in a high return on growth capital and significant Discretionary Cash Flow.  Target has experienced a 98% increase in Discretionary Cash Flow from full year 2020, supported by minimum committed revenue contracts from a diversified customer base under multiyear contracts with historical renewal rates exceeding 90%.  This highly attractive financial profile generates best-in-class margins and impressive cash flow conversion, which has allowed Target to systematically execute on its strategic objectives and meaningfully enhance Target's operational flexibility.  This enhanced profile provides the opportunity to reinvest cash flows into complementary growth markets, intended to expand Target's long-term growth pipeline.  Target remains committed to enhancing value through a balanced portfolio of service offerings, focused on a range of adjacent end-markets, while continuing to expand its reach providing critical support to the United States Government.  Target's financial strength, and robust core offerings, creates a platform to continue pursuing these highly economic growth initiatives, which it believes is the greatest opportunity to accelerate value creation.  Segment Results – Third Quarter 2021 GovernmentRefer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s, except ADR) September 30, 2021 September 30, 2020 Revenue $ 46,428 $ 16,264 Adjusted gross profit $ 25,823 $ 13,213 Adjusted gross profit margin 56 % 81 % Average daily rate (ADR) $ 78.10 $ 72.27 Average utilized beds 6,400 2,400 Utilization 100 % 100 % Revenue for the three months ended September 30, 2021, was $46.4 million compared to $16.3 million for the same period in 2020.  Average available beds of 6,400 were fully utilized for the three months ended September 30, 2021, with an ADR of $78.10.  On March 18, 2021, Target executed a $118 million minimum revenue contract, which is fully committed over its initial one-year term.  The contract adds 4,000 available beds, which will be fully utilized over the contract term. Hospitality & Facilities Services - South Refer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s, except ADR) September 30, 2021 September 30, 2020 Revenue $ 31,066 $ 18,968 Adjusted gross profit $ 13,945 $ 8,606 Adjusted gross profit margin 45 % 45 % Average daily rate (ADR) $ 75.39 $ 89.56 Average utilized beds 4,428 2,277 Utilization 64 % 24 % Revenue for the three months ended September 30, 2021, was $31.1 million compared to $19.0 million for the same period in 2020. Revenue increased as a result of sustained momentum in customer activity and demand for Target's premium hospitality services supported by strengthening commercial activity and economic demand.  ADR decreased by $14.17, to $75.39 compared to the same period in 2020.  Third quarter 2021 ADR was lower than prior period as a result of committed minimum revenue contracts having materially lower occupancy due to the COVID-19 pandemic.  In instances when actual occupancy is substantially lower than minimum contractual commitments, realized ADR can be materially higher than contractual ADR.  Third quarter 2020 ADR reflects this scenario, and creates a higher ADR when compared to a more normal operating environment in third quarter 2021.    Utilization was 64% for the three months ended September 30, 2021, compared to 24% for the same period in 2020.  Target has experienced an 87% increase in customer demand from the third quarter of 2020, as customers find added value in Target's expansive network, which provides superior flexibility in labor allocation while offering world-class service offerings.    Hospitality & Facilities Services - Midwest Refer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s, except ADR) September 30, 2021 September 30, 2020 Revenue $ 1,266 $ 1,154 Adjusted gross profit $ (56) $ 87 Adjusted gross profit margin (4) % 8 % Average daily rate (ADR) $ 68.43 $ 98.11 Average utilized beds 195 127 Utilization 18 % 12 % Revenue for the three months ended September 30, 2021, was $1.3 million compared to $1.2 million for the same period in 2020. The increase was attributable to select communities re-opening in the segment, which had been closed in the prior period, as a result of modest improvement in customer demand. TCPL KeystoneRefer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s) September 30, 2021 September 30, 2020 Revenue $ 9,880 $ 11,598 Adjusted gross profit $ 8,329 $ 2,027 Adjusted gross profit margin 84 % 17 % This segment's operations consist primarily of revenue from the construction phase of the TC Energy Keystone XL Pipeline ("TCPL") project. Revenue for the three months ended September 30, 2021, was $9.9 million compared to $11.6 million for the same period in 2020.  On July 23, 2021, the Company entered into a termination and settlement agreement with TC Energy, which terminated, the Company's contract with TC Energy that was originated in 2013. The agreement released the Company from any outstanding work performance obligations under the 2013 contract (including all change orders, limited notices to proceed, and amendments) and provided for payment of a termination fee of approximately $5 million, which the Company collected in cash on July 27, 2021.  The termination agreement also resulted in the recognition of approximately $4.9 million of deferred revenue.  No further revenue will be generated from the 2013 contract with TC Energy and as of September 30, 2021, there are no unrecognized deferred revenue amounts or costs related to this contract.  All OtherRefer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s) September 30, 2021 September 30, 2020 Revenue $ 529 $ 279 Adjusted gross profit $ (139) $ (220) Adjusted gross profit margin (26) % (79) % This segment's operations consist of hospitality services revenue not included in other segments. Revenue for the three months ended September 30, 2021, was $0.5 million compared to $0.3 million for the same period in 2020. Conference Call The Company has scheduled a conference call for November 12, 2021, at 8:00 a.m. Central Time (9:00 am Eastern Time) to discuss the third quarter 2021 results. The conference call will be available by live webcast through the Investors section of Target Hospitality's website at or by dialing in as follows: Domestic: 1-888-317-6003 International: 1-412-317-6061 Passcode: 3424376 Please register for the webcast or dial into the conference call approximately 15 minutes prior to the scheduled start time. About Target Hospitality Target Hospitality is North America's largest provider of vertically integrated modular accommodations and value-added hospitality services in the United States. Target builds, owns and operates a customized and growing network of communities for a range of end users through a full suite of value-added solutions including premium food service management, concierge, laundry, logistics, security and recreational facilities services. Cautionary Statement Regarding Forward Looking Statements Certain statements made in this press release (including the financial outlook contained herein) are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: the severity and duration of the COVID-19 pandemic, related economic repercussions and the resulting negative impact to global economic demand; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees and customers, vaccine mandates, contract and supply chain disruptions; operational, economic, political and regulatory risks; federal government budgeting and appropriations; our ability to effectively compete in the specialty rental accommodations and hospitality services industry; effective management of our communities; natural disasters, including pandemics and other business disruptions; the effect of changes in state building codes on marketing our buildings; changes in ...Full story available on»»

Category: earningsSource: benzingaNov 12th, 2021

Upstart airline Breeze just took home its first Airbus A220 aircraft with business class-style seats that will fly transcontinental and eventually to Europe - see inside

JetBlue Airways founder David Neeleman launched Breeze in May with a handful of aircraft and $39 fares. Now, it's taking home its first brand-new jet. Breeze Airways's first Airbus A220-300. Breeze Airways and Airbus Breeze Airways just took delivery of its first Airbus A220-300 jet, five months after the airline launched. The A220-300 can fly 3,450 nautical miles, opening up transcontinental flights and potential European service. New premium seats will be found onboard with in-seat power also available for all passengers. One of America's newest airlines is celebrating its five-month anniversary with a brand-new plane. Breeze Airways took delivery of its first Airbus A220-300 on Tuesday as part of an 80-aircraft order that will bring the airline to new heights and expand its reach well beyond the US. Built in Airbus' Mobile, Alabama facility, the A220 in Breeze's configuration boasts features including mood lighting, in-flight WiFi, in-seat power with 110v AC outlets and USB charging ports at every seat, and the largest cabin in its aircraft class.The Canadian jet type offers Breeze the perfect mix of economics and performance capabilities that will power a low-cost, long-haul route structure. A published range of 3,450 nautical miles for the larger A220 variant gives Breeze full reign over the Lower 48, with the ability to fly non-stop between any two cities between America's coasts, and then some. A transatlantic expansion is also in the works as Breeze is looking at secondary cities across the Northeast as potential stepping stones for flights to Europe. Destinations in South America may also be served from the Southeast and Hawaii from the West Coast thanks to the new aircraft's impressive capabilities, while the Embraer E190/E195 fleet that launched Breeze in May will stick to North America. Breeze Airways's first Airbus A220-300. Breeze Airways and Airbus And Breeze is already pressing Airbus to give the aircraft 4,000 nautical miles of range by adding auxiliary fuel tanks. The extra 600 nautical miles would allow for long-haul international flights from cities deeper into the US and open up Central Europe and South America flights from the East Coast.Inside the glitzy aircraftAirbus' smallest jet is intended to serve the 100-150-seat aircraft market and the larger Dash 300 variant can actually seat up to 160. Breeze showed off a low-density configuration during the delivery ceremony with just 126 seats across two cabins: a premium class and an economy class. In that configuration, a total of 36 premium seats in the airline's version of business class will stretch 13 rows, all the way back to the center of the aircraft.Customers booking a "nicest" fare will have complimentary access to the seats, which boast 20.5 inches of width and 39 inches of pitch, as well as an allowance for one carry-on bag and two checked bags, complimentary drinks and snacks onboard, priority boarding, and complimentary in-flight WiFi. Breeze Airways' first Airbus A220-300. Breeze Airways Two rows will offer 10 extra-legroom seats featuring 33 inches of pitch and 18.8 inches of width. They'll be available complimentary for those booking "nicer" fares that will also include a complimentary carry-on and checked bag, priority boarding, and a complimentary drink and snack. The remaining 80 seats will be standard economy seats, available for those booking "nice" fares for an additional fee or automatically assigned at check-in. These seats also feature 18.8 inches of width with between 30 and 31 inches of pitch, offering more space than some traditional airlines do in economy classBreeze, however, can add and reduce the number of seats in a given class of service based on demand. Neeleman is also hinting at offering lie-flat seats on the aircraft that would provide more comfort on long-haul flights. The A220 offers a 2-3 seating configuration in economy class, offering passengers a variety of choices when selecting a seat. A downside, however, is that it also offers middle seats, meaning passengers have more of a reason to pre-purchase seat assignments.Onboard WiFi will enable internet browsing and also streaming entertainment including movies and television shows. Breeze Airways's first Airbus A220-300. Breeze Airways and Airbus Pilots flying the Airbus A220 can expect a lifestyle similar to those at more established airlines. Instead of flying "out and back" in a single day, the A220 will fly lengthier routes and trips that will often require overnight stays, as the airline told Insider in April.Breeze customers won't be flying on the plane until the second quarter of 2022, once more aircraft have been delivered. Now begins the long process towards certifying the aircraft to fly passengers, as well as training crew to fly, service, and maintain the airline's new flagship. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 27th, 2021

Precision Drilling Corporation Announces 2021 Third Quarter Unaudited Financial Results

CALGARY, Alberta, Oct. 21, 2021 (GLOBE NEWSWIRE) -- This news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release. This news release contains references to Adjusted EBITDA (earnings before income taxes, loss (gain) on repurchase of unsecured senior notes, gain on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Covenant EBITDA, Operating Earnings (Loss), Funds Provided by (Used in) Operations and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see "Non-GAAP Measures" later in this news release. Precision Drilling announces 2021 third quarter financial results: Adjusted EBITDA (See "NON-GAAP MEASURES") of $45 million. Excluding the impact of share-based compensation charges our Adjusted EBITDA was $59 million. Revenue of $254 million was an increase of 54% compared with the third quarter of 2020. Net loss of $38 million or $2.86 per share compared with a net loss of $28 million or $2.08 per share in the third quarter of 2020. Generated cash and funds provided by operations (see "NON-GAAP MEASURES") of $22 million and $34 million, respectively. Third quarter ending cash balance was $57 million, with available liquidity of $500 million. Third quarter and year to date debt reduction of $8 million and $60 million, respectively. Third quarter capital expenditures were $20 million. Recognized the Canadian government's Canada Emergency Wage Subsidy (CEWS) program assistance of $6 million. Precision's President and CEO Kevin Neveu stated: "We believe current industry fundamentals are providing the most promising backdrop for our business that we have experienced in almost a decade. Strong oil and natural gas prices, a significantly improved Canadian market structure and rapidly declining drilled but uncompleted well inventories all point to higher drilling activity in our core markets. Although we are likely in the early innings, our firm bookings and current customer inquiries indicate substantially stronger demand for our services and improved fleet utilization as this rebound continues." "Our third quarter Adjusted EBITDA of $59 million, excluding share-based compensation, is a result of our continued focus on strict cost discipline, growing our Alpha revenue base and realizing improved spot pricing in our North American operations. Our results have begun to reflect the considerable operating leverage of Precision Drilling, although we expect the positive impact to be more pronounced in the coming quarters with increasing activity." "Our Alpha suite of digital technologies continues to act as both the tip of the spear with new customer relationships and as a means to strengthen existing customer relationships with retention levels of nearly 100% for Alpha customers over the past two years. We currently have 65 AC Super Triple rigs active in North America and nearly 40 of these rigs are running Alpha at commercial rates. During the quarter, we increased utilization days of AlphaAutomation, AlphaApps and AlphaAnalytics by 8%, 36% and 4%, respectively, compared to Q2. We continue to see our performance, consistency and scalability of Alpha as key competitive differentiators for Precision." "In the U.S., during the quarter, activity levels nearly doubled from the third quarter last year and increased 6% sequentially. We generated normalized average drilling day rate increases of approximately $700 and we expect this trend will continue. The higher daily operating costs experienced during the quarter were primarily a result of preparation for increased activity in the fourth quarter and certain mobilization costs which will be recovered over the next several months on contracted rigs. Our current active rig count in the U.S. is 45 rigs, slightly lower than our prior guidance due to some customer delays and the decision to decline certain opportunities based on lower price expectations by customers." "In Canada, our drilling activity was nearly triple our activity in the third quarter of 2020 and our 51 average active rigs during the quarter represented the highest third quarter average activity since 2018. We are operating 61 rigs today and believe the improved Canadian market structure is due to increased crude takeaway capacity, lower differentials and substantially improved customer cash flows allowing our customers to self-fund drilling programs while continuing to generate strong shareholder returns. Additionally, we expect the prospects of LNG exports materializing on the medium term will bolster the outlook for Canadian drilling activity." "We increased our 2021 capital spending plan to $74 million to support our improved activity outlook in North America. The increase primarily relates to advanced drill pipe purchases to take advantage of vendor discounts and lower cost vendor inventories that were secured early in the quarter and will address increased drill pipe needs into next year." "Our Completion and Production Services division continues to deliver strong operational and financial results. In particular, Precision Well Servicing is successfully differentiating itself by delivering high quality crews and High Performance, certified equipment to customer projects, while the broader industry is navigating the dual challenges of labor availability and equipment quality. For the quarter, the division generated Adjusted EBITDA of approximately $5 million." "Our international drilling operations continue at a steady pace with 6 rigs active in Kuwait and the Kingdom of Saudi Arabia. During the quarter, we received extension notifications for two Kuwait rig contracts, each for one-year. Regional bidding activity is robust, and we see opportunities to activate several of our idle rigs in the region early next year and are confident in our likelihood of success." "During the third quarter, we introduced our Evergreen suite of environmental and emission-reduction focused products and services to complement our Super Series drilling rigs and Alpha digital offering. Recently, we successfully deployed our first Evergreen hybrid battery storage, natural gas and low emission power generating system to a Super Triple drilling rig in the Canadian market. The system reduces GHG emissions and fuel costs, helping our customer achieve their GHG emission-reduction targets and improving their well construction economics. Later this year, we expect to deploy three real-time combustion fuel monitoring packages, using AlphaAnalytics to determine precise baseline emission data. These accurate baselines will enable us to make customer-specific recommendations to further reduce rig-generated GHG emissions." "We remain focused on strict cost discipline and debt reduction and are on track to meet our debt reduction goal of $100 million to $125 million for 2021. In the quarter, cash from operations was $22 million, funds from operations were $34 million and debt reduction was $8 million with year to date debt reduction of $60 million. We expect cash flow to be strong in the fourth quarter as we have only $3 million in cash interest payments due and expect minimal working capital increases. With no senior note maturities until 2026 and approximately $500 million of available liquidity, our balance sheet remains in excellent shape to support our business activities and allow for further deleveraging through cash flow," concluded Mr. Neveu. SELECT FINANCIAL AND OPERATING INFORMATION Financial Highlights   For the three months ended September 30,     For the nine months ended September 30,   (Stated in thousands of Canadian dollars, except per share amounts) 2021     2020     % Change     2021     2020     % Change   Revenue   253,813       164,822       54.0       691,645       734,065       (5.8 ) Adjusted EBITDA(1)   45,408       47,771       (4.9 )     128,891       208,140       (38.1 ) Operating earnings (loss)(1)   (20,762 )     (26,785 )     (22.5 )     (76,033 )     (23,375 )     225.3   Net loss   (38,032 )     (28,476 )     33.6       (150,050 )     (82,620 )     81.6   Cash provided by operations   21,871       41,950       (47.9 )     79,512       221,381       (64.1 ) Funds provided by operations(1)   33,525       27,489       22.0       89,562       135,445       (33.9 ) Capital spending:                                               Expansion and upgrade   5,998       -     n.m.       15,881       13,764       15.4   Maintenance and infrastructure   13,502       3,211       320.5       32,310       24,859       30.0   Intangibles   -       -     n.m.       -       57       (100.0 ) Proceeds on sale   (4,476 )     (5,705 )     (21.5 )     (10,390 )     (16,416 )     (36.7 ) Net capital spending   15,024       (2,494 )     (702.4 )     37,801       22,264       69.8   Net loss per share:                                               Basic   (2.86 )     (2.08 )     37.4       (11.27 )     (6.02 )     87.2   Diluted   (2.86 )     (2.08 )     37.4       (11.27 )     (6.02 )     87.2   (1)    See "NON-GAAP MEASURES."n.m. Not meaningful Operating Highlights   For the three months ended September 30,     For the nine months ended September 30,     2021     2020     % Change     2021     2020     % Change   Contract drilling rig fleet   227       227       -       227       227       -   Drilling rig utilization days:                                               U.S.   3,785       1,957       93.4       10,315       9,684       6.5   Canada   4,648       1,613       188.2       10,963       8,216       33.4   International   552       559       (1.3 )     1,638       1,974       (17.0 ) Revenue per utilization day:                                               U.S.(1) (US$)   20,331       28,334       (28.2 )     20,904       26,335       (20.6 ) Canada (Cdn$)   19,427       21,430       (9.3 )     20,295       21,593       (6.0 ) International (US$)   52,277       54,887       (4.8 )     53,095       54,631       (2.8 ) Operating cost per utilization day:                                               U.S. (US$)   15,120       16,037       (5.7 )     14,639       14,727       (0.6 ) Canada (Cdn$)   13,189       12,924       2.1       13,204       13,940       (5.3 )                                                 Service rig fleet   123       123       -       123       123       -   Service rig operating hours   32,244       15,599       106.7       93,777       54,666       71.5   (1)    Includes revenue from idle but contracted rig days. Financial Position (Stated in thousands of Canadian dollars, except ratios) September 30, 2021     December 31, 2020   Working capital(1)   120,259       175,423   Cash   57,096       108,772   Long-term debt   1,162,841       1,236,210   Total long-term financial liabilities   1,241,708       1,304,162   Total assets   2,720,415       2,898,878   Long-term debt to long-term debt plus equity ratio   0.48       0.47   (1)    See "NON-GAAP MEASURES." Summary for the three months ended September 30, 2021: Revenue for the third quarter was $254 million, 54% higher than in 2020 and was the result of increased drilling and service rig activity, partially offset by lower drilling day rates. Drilling rig utilization days increased by 93% in the U.S. and 188% in Canada and well service activity increased 107% as compared with the third quarter of 2020. Our international drilling activity decreased slightly from 2020 due to the expiration of a drilling contract. Adjusted EBITDA (see "NON-GAAP MEASURES") for the quarter was $45 million, $2 million lower than 2020. Our Adjusted EBITDA as a percentage of revenue was 18% this quarter, compared with 29% in the comparative quarter. Our current quarter Adjusted EBITDA was negatively impacted by higher share-based compensation charges due to our increased share price and lower average day rates, partially offset by improved activity. Excluding the impact of $13 million of share-based compensation charges, our third quarter Adjusted EBITDA was $59 million as compared with the prior year Adjusted EBITDA excluding the impact of $4 million of share-based compensation of $51 million. Operating loss (see "NON-GAAP MEASURES") for the quarter was $21 million compared with $27 million in 2020. General and administrative expenses this quarter were $24 million, $12 million higher than in 2020 due to our increased share-based compensation charges and lower CEWS program assistance. Net finance charges for the quarter were $21 million, $7 million lower than in 2020 and was primarily due to reduced interest expense due to lower debt levels and lower average cost of borrowing. In the U.S., revenue per utilization day in the third quarter of 2021 decreased to US$20,331 compared with US$28,334 in 2020. The decrease was primarily the result of lower revenue from idle but contracted rigs, turnkey activity and lower fleet average day rates, partially offset by higher Alpha revenue. During the third quarter of 2021, we recognized revenue from idle but contracted rigs and turnkey projects of nil, as compared with US$10 million and US$2 million, respectively, in 2020. Our third quarter operating costs on a per day basis decreased to US$15,120, compared with US$16,037 in 2020, and was mainly due to lower turnkey activity. On a sequential basis, revenue per utilization day, excluding revenue from turnkey drilling and idle but contracted rigs, increased by US$692 primarily due to higher fleet average day rates, while operating costs per day increased by US$1,375 due to higher repairs and maintenance. In Canada, average revenue per utilization day for contract drilling rigs for the quarter was $19,427 compared with $21,430 in 2020. The lower average revenue per utilization day in 2021 was primarily due to our rig mix. Average operating costs per utilization day in Canada for the quarter increased to $13,189 compared with $12,924 in 2020. The increase was mainly due to industry wage increases, partially offset by fixed costs being spread over higher activity. During the quarter, we recognized CEWS program assistance of $6 million as compared with $8 million in 2020. CEWS program assistance was presented as offsets to operating and general and administrative costs of $5 million and $1 million, respectively, as compared with $6 million and $2 million in 2020. We realized third quarter revenue from international contract drilling of US$29 million in 2021, as compared with US$31 million in 2020. The lower revenue in 2021 was primarily due to lower day rates. The average revenue per utilization day for the quarter was US$52,277, 5% lower than in the third quarter of 2020. Cash and funds provided by operations (see "NON-GAAP MEASURES") in the third quarter of 2021 were $22 million and $34 million, respectively, compared with $42 million and $27 million in 2020. Capital expenditures were $20 million as compared with $3 million in the third quarter of 2020. Capital spending included $6 million for expansion and upgrade capital and $14 million for the maintenance of existing assets, infrastructure spending and intangibles. During the third quarter of 2021, we reduced long-term debt by $8 million. Summary for the nine months ended September 30, 2021: Revenue for the first nine months of 2021 was $692 million, a decrease of 6% from 2020. Adjusted EBITDA (see "NON-GAAP MEASURES") for the period was $129 million, $79 million lower than 2020. Our Adjusted EBITDA was negatively impacted by lower idle but contracted rig revenue, higher share-based compensation charges due to our increased share price and lower average day rates, partially offset by improved North American activity. General and administrative costs were $77 million, an increase of $27 million from 2020. The increase was the result of higher share-based compensation charges. Net finance charges were $71 million, a decrease of $12 million from 2020 primarily due to reduced interest expense due to lower debt levels and lower average cost of borrowing, partially offset by higher amortized debt issue costs. Cash provided by operations was $80 million in 2021 as compared with $221 million in 2020. Funds provided by operations (see "NON-GAAP MEASURES") in 2021 were $90 million, a decrease of $46 million from the prior year comparative period of $135 million. Capital expenditures were $48 million in 2021, an increase of $10 million for the same period in 2020. Capital spending in 2021 included $16 million for expansion and upgrade capital and $32 million for the maintenance of existing assets, infrastructure spending and intangibles. As of September 30, 2021, we have reduced long-term debt by $60 million and repurchased and cancelled 155,168 common shares for $4 million pursuant to our Normal Course Issuer Bid. STRATEGY Precision's strategic priorities for 2021 are as follows: Grow revenue and market share through our digital leadership position – Precision exited the third quarter with 46 AC Super Triple Alpha-rigs equipped with our AlphaAutomation platform and 16 commercialized AlphaApps. Our third quarter paid AlphaApp days increased 36% compared with the second quarter of 2021, with the increase largely driven by operational performance, additional revenue generating days and further uptake of customers fully utilizing our suite of Alpha technologies. During the quarter, Precision added four new AlphaAutomation customers and increased paid AlphaAutomation days, AlphaApp days and AlphaAnalytics days quarter-over-quarter by 8%, 36% and 4%, respectively. Demonstrate operational leverage to generate free cash flow and reduce debt – In the third quarter of 2021, Precision generated $22 million of cash provided by operations (see "NON-GAAP MEASURES") and $4 million of cash proceeds from the divestiture of non-core assets. As of September 30, 2021, we have reduced debt levels by $60 million, leaving $40 million of further debt reduction to achieve the low end of our 2021 debt reduction target of $100-$125 million. Precision exited the quarter with a cash balance of $57 million, US$161 million drawn on our US$500 million Senior Credit Facility and available liquidity of $500 million. Deliver leading ESG (environmental, social and governance) performance to strengthen customer and stakeholder positioning – During the third quarter, we introduced our Evergreen suite of environmental solutions focused on emissions reduction products and services to complement our Super Series drilling rigs and our Alpha digital products. We successfully deployed our first Evergreen hybrid battery storage, natural gas and low emission power generating system to a Super Triple drilling rig in the Canadian market. The system reduces GHG emissions and fuel costs, helping our customer achieve their GHG emission-reduction targets and improving their well construction economics. We have seen strong customer appetite in both Canada and the U.S. for hybrid battery power systems and have multiple commitments to deploy several additional systems by mid-2022. In the fourth quarter, we expect to deploy three real-time combustion fuel monitoring packages, using AlphaAnalytics to determine precise baseline emission data. These accurate baselines will enable us to make customer-specific recommendations to further reduce rig-generated GHG emissions. OUTLOOK The continued rise in global energy demand, sustained periods of strong commodity prices and the multi-year period of upstream underinvestment provide a promising backdrop for the oilfield services industry. At current commodity prices, we anticipate higher demand for our services and improved fleet utilization as customers look to maintain and replenish production levels as drilled but uncompleted well inventories have depleted. In Canada, industry activity has surpassed pre-pandemic levels as takeaway capacity continues to improve, price differentials shrink and the startup of LNG exports is expected in the medium term. Interest in our Evergreen solutions has gained momentum as customers look for meaningful solutions to achieve their emission reduction targets, and in many cases, also improve their well economics. Our suite of Alpha digital technologies will continue to be a key competitive differentiator as our predictable and repeatable drilling results deliver exceptional value to our customers by reducing risks, time and well construction costs. The Government of Canada's $1.7 billion well site abandonment and rehabilitation program has supported industry activity levels and provided thousands of jobs throughout Western Canada. The program runs through to the end of 2022 with government funds provided in stages. Our well servicing business continues to capture opportunities because of our scale, operational performance and strong safety record. During the third quarter of 2021, our abandonment activity remained strong and we expect this momentum to continue through to the end of the program in 2022. During 2020, the Government of Canada introduced the CEWS program to subsidize a portion of employee wages for Canadian employers whose businesses have been adversely affected by COVID-19. For the three months ended September 30, 2021, we recognized $6 million (2020 – $8 million) in CEWS program assistance, which is presented as offsets to operating and general and administrative expenses of $5 million (2020 - $6 million) and $1 million (2020 - $2 million), respectively. Unless extended, the CEWS program is expected to end in the fourth quarter of 2021. Contracts Year to date in 2021 we have entered into 28 term contracts. The following chart outlines the average number of drilling rigs under contract by quarter as of October 20, 2021. For those quarters ending after September 30, 2021, this chart represents the minimum number of long-term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional contracts.     Average for the quarter ended 2020     Average for the quarter ended 2021       Mar. 31     June 30     Sept. 30     Dec. 31     Mar. 31     June 30     Sept. 30     Dec. 31   Average rigs under term contract as of October 20, 2021:                                                                 U.S.     41       32       26       24       21       24       22       22   Canada     5       4       3       4       6       6       7       7   International     8       8       6       6       6       6       6       6   Total     54       44       35       34       33       36       35       35   The following chart outlines the average number of drilling rigs that we had under contract for 2020 and the average number of rigs we have under contract as of October 20, 2021.     Average for the year ended           2020     2021       Average rigs under term contract as of October 20, 2021:                     U.S.     31       22       Canada     4       7       International     7       6       Total     42       35       In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year. Drilling Activity The following chart outlines the average number of drilling rigs that we had working or moving by quarter for the periods noted.   Average for the quarter ended 2020   Average for the quarter ended 2021     Mar. 31     June 30     Sept. 30     Dec. 31     Mar. 31     June 30     Sept. 30   Average Precision active rig count:                                                       U.S.   55       30       21       26       33       39       41   Canada   63       9       18       28       42       27       51   International   8       8       6       6       6       6       6   Total   126       47       45       60       81       72       98   According to industry sources, as of October 20, 2021, the U.S. active land drilling rig count has increased 98% from the same point last year while the Canadian active land drilling rig count increased by 110%. To date in 2021, approximately 78% of the U.S. industry's active rigs and 56% of the Canadian industry's active rigs were drilling for oil targets, compared with 80% for the U.S. and 54% for Canada at the same time last year. Capital Spending Capital spending in 2021 is expected to be $74 million and includes $51 million for sustaining, infrastructure and intangibles and $23 million for expansion and upgrades. We expect that the $74 million will be split $68 million in the Contract Drilling Services segment, $5 million in the Completion and Production Services segment and $1 million to the Corporate segment. At September 30, 2021, Precision had capital commitments of $137 million with payments expected through 2023. SEGMENTED FINANCIAL RESULTS   For the three months ended September 30,     For the nine months ended September 30,   (Stated in thousands of Canadian dollars) 2021     2020     % Change     2021     2020     % Change   Revenue:                                               Contract Drilling Services   226,957       150,773       50.5       613,032       682,060       (10.1 ) Completion and Production Services   28,143       14,443       94.9       81,354       53,631       51.7   Inter-segment eliminations   (1,287 )     (394 )     226.6       (2,741 )     (1,626 )     68.6       253,813       164,822       54.0       691,645       734,065       (5.8 ) Adjusted EBITDA:(1)                                               Contract Drilling Services   55,384       51,594       7.3       163,118       236,940       (31.2 ) Completion and Production Services   5,479       3,945       38.9       17,533       5,960       194.2   Corporate and Other   (15,455 )     (7,768 )     99.0       (51,760 )     (34,760 )     48.9       45,408       47,771      .....»»

Category: earningsSource: benzingaOct 21st, 2021

Sun Country is adding 7 new nonstop routes from its Minneapolis base in its latest network expansion - see the full list

Sun Country Airlines is focusing on spring and summer destinations with seven new nonstop routes. natmac stock / Sun Country Airlines announced seven new routes from its Minneapolis-Saint Paul International Airport base. The airline is targeting spring and summer vacation destinations in its latest network expansion. Sun Country is extending its current flight schedule into early September 2022, offering over 70 destination options. Sun Country Airlines is focusing on spring and summer destinations with seven new nonstop routes from its base at Minneapolis-Saint Paul International Airport.Sun Country announced seven new routes from Minneapolis on Tuesday, expanding its network to over 100 routes to 80 cities across the US, Mexico, Central America, Canada, and the Caribbean. The carrier is targeting spring and summer destinations across in its latest expansion, with routes set to start in April. -Sun Country Airlines (@SunCountryAir) October 19, 2021 "We're excited to offer travelers affordable access to exciting new destinations including some of the most beautiful coastal towns on the East Coast, the Great Lakes, and Canada," said Sun Country Airlines Chief Revenue Officer Grant Whitney. "We look forward to welcoming guests onboard to enjoy our many amenities like free inflight entertainment, complimentary nonalcoholic beverage service, and comfortable reclining seats with in-seat power on their way to their next great vacation."The airline also announced it will be continuing nonstop service from Minneapolis to Louis Armstrong New Orleans International Airport, Asheville Regional Airport, Savannah/Hilton Head International Airport, and General Mitchell International Airport in Milwaukee, Wisconsin. Sun Country has also extended its flight schedule through early September 2022, offering over 70 destinations for customers to choose from.Sun Country is an ultra-low-cost carrier and, unlike Spirit and Frontier, offers onboard amenities like free soda, tea, and coffee, complimentary movies streamed to personal devices and reclining seats. The carrier prides itself on its flexible business model that expands its services beyond just commercial operations, including charter business and a cargo partnership with Amazon. Sun Country signed a deal to transport cargo under the Amazon Air brand just months before COVID-19 devastated the airline industry. The airline has a dedicated cargo fleet made up of Boeing 737-800 freighters, which is rare for US carriers. Alaska Airlines is the only other carrier in the country to have a separate fleet of cargo planes.The Minnesota-based airline started flying on behalf of Amazon in May 2020, and the operation helped it stay afloat during the pandemic. However, with increased passenger demand, combined with the company's charter and cargo businesses, Sun Country is ready to continue its commercial expansion. Here is a closer look at Sun Country's seven new routes.Between Minneapolis and Charleston, South Carolina Charleston, South Carolina f11photo/Shutterstock Sun Country will begin twice-weekly service on Thursdays and Sundays from Minneapolis to Charleston on April 7, 2022. Fares will start at $89 one-way. The airline will face no competition on this route.Between Minneapolis and Jacksonville, Florida Jacksonville, Florida ESB Professional/Shutterstock Sun Country will begin twice-weekly service on Fridays and Mondays from Minneapolis to Jacksonville on April 8, 2022. Fares will start at $69 one-way. The airline will compete with Delta Air Lines on this route.Between Minneapolis and Pittsburgh, Pennsylvania Pittsburgh, Pennsylvania Ken Redding/Getty Images Sun Country will begin twice-weekly service on Thursdays and Sundays from Minneapolis to Pittsburgh on June 2, 2022. Fares will start at $69 one-way. Delta Air Lines will be the only competitor.Between Minneapolis and Spokane, Washington Spokane, Washington AP Photo/Nicholas K. Geranios Sun Country will begin twice-weekly service on Thursdays and Sundays from Minneapolis to Spokane on June 9, 2022. Fares will start at $79 one-way. The carrier will face competition from Delta Air Lines.Between Minneapolis and Buffalo, New York Buffalo, New York Sun Country will begin twice-weekly service on Thursdays and Sundays from Minneapolis to Buffalo on June 9, 2022. Fares will start at $69 one-way. The airline will compete with Delta on this route.Between Minneapolis and Vancouver, Canada Vancouver, British Columbia, Canada mffoto/Shutterstock Sun Country will begin twice-weekly service on Wednesdays and Saturdays from Minneapolis to Vancouver on June 15, 2022. Fares will start at $99 one-way. Delta will be the only competitor.Between Minneapolis and Burlington, Vermont Burlington, Vermont Sean Pavone/Shutterstock Sun Country will begin twice-weekly service on Thursdays and Sundays from Minneapolis to Burlington on June 16, 2022. Fares will start at $89 one-way. The airline will be the route's only operator.Read the original article on Business Insider.....»»

Category: worldSource: nytOct 20th, 2021

Airlines around the world are resuming flights with the world"s largest passenger jet after dumping it during the pandemic

The Airbus A380 was falling out of favor with some airlines when the pandemic hit. But others are eager to bring it back into flying service. An Emirates Airbus A380. Arnold Aaron/ The Airbus A380 is making a comeback as more pandemic-era travel restrictions are lifted. British Airways, Singapore Airlines, and Qatar Airways say they will fly their A380s before the end of the year. Other airlines have permanently said goodbye to their A380s in favor of more economical planes. The world's largest passenger plane is making its comeback as airlines around the world are moving quickly to once again shuttle travelers around the world as pandemic-era travel restrictions continue to fall. An Airbus A380. REUTERS/Pascal Rossignol Airbus' behemoth A380 stood out like a sore thumb in a world deprived of air travelers early on in the pandemic. The indulgences in air travel and the ability to fly as many passengers in a single plane that the A380 once represented made it temporarily obsolete. An Airbus A380. REUTERS/Pascal Rossignol But long-haul flying is returning as countries open their borders. The A380 is once more facilitating vacations, long-distance reunions, business travel, and the countless other reasons travelers have for flying around the world. An Airbus A380. AP Airlines that sent their Airbus A380s to storage are now dusting off the cobwebs and getting flight crews reacquainted with the aircraft. They'll soon fly hundreds of passengers across two full levels of seats. A British Airways Airbus A380. Thomas Pallini/Insider Here's how the A380 is making a comeback after being mostly forgotten and abandoned during the pandemic. An Emirates Airbus A380. Arnold Aaron/ Four-engine aircraft including the Airbus A380 and Boeing 747 were among the most impacted during the pandemic. Airlines no longer needed the amount of space that the aircraft offered combined with the excessive cost of two additional engines when only two were needed. An Emirates Airbus A380. Sundry Photography/ Here's how the pandemic accelerated the demise of four-engine aircraft like the Airbus A380 and Boeing 747. The A380 also didn't have the benefit of having a second life in the air cargo realm, as other airliners did, despite its size. Though, that didn't stop some airlines from using the A380 as a makeshift freighter. A HiFly Airbus A380 cargo conversion. HiFly Here's how one charter airline hollowed out an Airbus A380 for use as a cargo freighter. Destined to fly passengers, the A380 is now getting the chance to do it once more as three airlines have plans to resume scheduled flights with the aircraft before the end of 2021. An Airbus A380. REUTERS/Pascal Rossignol Singapore Airlines is the latest airline to announce plans that bring back the A380 thanks to the new "vaccinated travel lane" program that allows vaccinated visitors to skip quarantine upon arrival in Singapore. A Singapore Airlines Airbus A380. photosounds/Shutterstock The first Singapore Airlines A380 flight since April 2020 will operate on November 4 to Kuala Lumpur, Malaysia. The 160-nautical-mile flight is among the shortest to ever be flown by the A380 in a scheduled capacity. A Singapore Airlines Airbus A380. REUTERS/Jean Philippe Aries Source: Cirium Diio Mi Other Singapore Airlines destinations slated to receive the aircraft after Kuala Lumpur include London; Sydney, Australia; Shanghai, China; Beijing, China; Hong Kong; Dehli, India; Mumbai, India; and Osaka, Japan. Singapore Airlines flight attendants and a rendering of the airline's Airbus A380. Edgar Su/Reuters Source: Cirium Diio Mi Singapore Airlines uses its A380s to offer a premium experience in the sky, unlike anything its smaller planes could offer. Suites are offered in first class, for example, and two can be combined to form a "double suite" with a bed for two. A first class suite onboard a Singapore Airlines Airbus A380. Singapore Airlines In Europe, British Airways will resume flying the A380 on November 8. Frankfurt, Germany and Madrid, Spain will be the first destinations from London as a means of getting flight crews reacclimated with the plane. A British Airways Airbus A380-800 descends for a landing at Washington Dulles International Airport as seen, Wednesday, June 1, 2016 in Ashburn, Va. AP Photo/Alex Brandon Source: Cirium Diio Mi After its initial European runs, British Airways' overseas destinations including Los Angeles and Dubai will be the first to receive the aircraft followed by San Francisco, Singapore, Miami, and Johannesburg, South Africa in 2022. A British Airways Airbus A380. Thiago B Trevisan / Source: Cirium Diio Mi The iconic red, white, and blue A380s sat in storage around Europe and as far as the Middle East. In Doha, Qatar, for example, three British Airways A380s sat idle on a taxiway at Hamad International Airport. A British Airways Airbus A380. Thomas Pallini/Insider Hamad International Airport was just voted "best airport in the world" by Skytrax. Here's what living in the passenger terminal for 48 hours was like. A total of 469 passengers can be seated in British Airways' A380 configuration, which includes 97 business class seats and 14 first class suites. Inside a British Airways Airbus A380 cabin. British Airways Source: SeatGuru On October 15, All Nippon Airways took delivery of its third and final A380 from Airbus's production line in Toulouse, France. The Japanese carrier had planned to use the aircraft to fly solely between Tokyo and Honolulu, Hawaii before the pandemic hit. An All Nippon Airways Airbus A380. Airbus Source: Airbus Those flights are scheduled to resume in January, according to the airline's most recent schedule. Though, that may change depending on the travel landscape in Japan. An All Nippon Airways Airbus A380. viper-zero / Source: Cirium Diio Mi Emirates, in its role as the world's largest Airbus A380 operator, is unsurprisingly flying the most A380 flights of any airline. An Emirates Airbus A380. ZGPhotography/shutterstock Dubai opened to international travelers in July 2020, ahead of most global tourist destinations, and Emirates responded by adding A380 flights to London and Paris. An Emirates Airbus A380. kamilpetran/ Source: Cirium Diio Mi Since then, the A380 has returned to many of the Emirates destinations it has served including the US. American A380 destinations include Los Angeles, New York, San Francisco, and Washington, DC with as many as six daily A380 flights to the US planned for December. An Emirates Airbus A380. Nitis Petcharat / Shutterstock Here's how Emirates is planning to build back in the US after cutting services during the pandemic.Source: Cirium Diio Mi "Slowly but surely, the A380s are going to fly and they're going to fly to all of those [pre-COVID] destinations," Essa Sulaiman Ahmad, Emirates' division vice president for the US and Canada, told Insider. "The United States is ready for it." An Emirates Airbus A380. AP All of Emirates' A380 luxuries have also been restored including caviar in first class and in-flight showers. An Emirates Airbus A380. Agent Wolf/ And Emirates' existing A380 fleet is also in the process of being retrofitted with a new interior that includes enhancements to each cabin and the addition of a premium economy class. Premium economy onboard an Emirates Airbus A380. Emirates See inside the new cabins of Emirates' Airbus A380 fleet. Qatar Airways plans to resume flights on the Airbus A380 on December 15, serving Paris and London. A Qatar Airways Airbus A380. Nicolas Economou/NurPhoto/Getty Source: Cirium Diio Mi The largest aircraft in Qatar Airways fleet is the only to feature a true first class cabin. Smaller Qatar Airways aircraft only feature business class seats. A Qatar Airways Airbus A380. REUTERS/Pascal Rossignol Korean Air also resumed limited flying with the A380 in September 2020 to destinations in Japan and China. Starting December 1, the aircraft is scheduled to fly to more destinations including Bangkok, Thailand, and Paris. A Korean Air Airbus A380. AP/Airbus, C. Brinkmann But even as Korean Air slowly returns the jet to its standard flying schedule, the A380's tenure in Korea is still set to expire in the next five years. A Korean Air Airbus A380. Kate Taylor/Business Insider "The A380s will be leaving Korean Air's fleet within five years, and the Boeing 747-8i fleet will also follow suit within ten years," Walter Cho, Korean Air's chief executive officer, told FlightGlobal in August. A Korean Air Airbus A380. Lukas Wunderlich / Source: FlightGlobal Lufthansa shares Korean Air's feelings towards the A380 and it's doubtful whether the German carrier will restore the aircraft to flying service at any time in the future. A Lufthansa Airbus A380. Chittapon Kaewkiriya / Lufthansa CEO Carsten Spohr said that the "A380 obviously will not come back" in a second-quarter 2021 earnings call. A Lufthansa Airbus A380. Santi Rodriguez / Source: Seeking Alpha If Lufthansa does commit to retiring the planes, it will join Air France, Malaysia Airlines, Thai Airways, and Etihad Airways in the club of former A380 operators. An Etihad Airways Airbus A380. Markus Mainka/ Here's why premium travelers will lose out the most by Etihad Airways retiring its A380s with private apartments that cost $20,000 per flight.Source: Executive Traveller Air France quickly retired its A380 fleet in May 2020, early on in the pandemic, and now relies on more efficient twin-engine aircraft like the Boeing 787 Dreamliner, Boeing 777, and Airbus A350-900 XWB. An Air France Airbus A380. Thomas Pallini/Business Insider Here's what flying on an Air France Airbus A380 was like in economy. Australian flag carrier Qantas does not currently have A380 flights scheduled for the remainder of 2021. The first scheduled flight is for July 1, 2022, between Sydney and Los Angeles, a staple route for the aircraft. A Qantas Airbus A380. Ryan Fletcher/ Qantas just announced the resumption of US and London flights from Sydney following the reopening of New South Wales to vaccinated tourists but has tapped the Boeing 787 Dreamliner to perform the first flights. A Qantas Boeing 787-9 Dreamliner. Benjamin Zhang/Business Insider One airline that never gave up on the A380, even during the worst of the pandemic, is China Southern Airlines. From Guangzhou, China, the A380 flew to global destinations such as Los Angeles, Sydney, Tokyo, Paris, London, and Amsterdam, Netherlands. A China Southern Airlines Airbus A380. StudioPortoSabbia / Source: Cirium Diio Mi The pandemic hasn't yet killed the Airbus A380, even if it has sped up the aircraft's demise. Airlines, like their passengers, still do have affection for the aircraft and aren't ready to part with them just yet. The sun isn't setting on the Airbus A380 just yet. phichak/ Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 19th, 2021

New airline ITA has officially taken over for Alitalia - see the full history of Italy"s troubled flag carrier

Alitalia has officially ceased operations and handed the baton to newcomer ITA, which stands for Italian Air Transport. ITA Airways Chairman Alfredo Altavilla poses with rendering of new livery ITA Press Office/Handout via REUTERS Government-owned Alitalia ceased operations on October 15, marking the end of its 74-year era. Alitalia has been replaced by ITA Airways, a brand new airline that will not be responsible for the old carrier's debt. ITA plans to buy 28 Airbus jets, create a new aircraft livery, and launch a new loyalty program. Alitalia has officially ceased operations and handed the baton to newcomer ITA Airways, which stands for Italian Air Transport.Italy's national carrier Alitalia has had a rocky past full of financial struggles, employee strikes, and other damaging events, forcing it to make the decision to cease operations on October 15 after 74 years of service. The airline stopped the sale of tickets in August and has committed to refunding all passengers who were booked on flights after October 14.On Thursday, the airline flew its final flight from Cagliari, Italy to Rome, according to FlightAware, officially sealing the fate of Alitalia. On Friday, the country's new flag carrier ITA took its place with a new livery, airplanes, and network, flying its first route from Milan Linate Airport to Bari International Airport in southern Italy.-João ☕ (@joaointhesky) October 14, 2021 Here's a look at Alitalia's storied past and the plan of its successor. Alitalia as a brand began in 1946, one year after World War II ended, first flying in 1947 within Italy and quickly expanding to other European countries and even opening intercontinental routes to South America. Passengers disembarking from an Alitalia Douglas DC-3 aircraft. Archivio Cameraphoto Epoche/Getty Source: Boeing and Alitalia The full name of the airline was Italian International Airlines, a joint effort between the United Kingdom through British European Airways - a precursor to British Airways - and the Italian government. A British European Airways Vickers Viscount. Museum of Flight/CORBIS/Corbis via Getty Source: Boeing and Alitalia True to its name, Alitalia flew its first with Italian aircraft produced by now-defunct manufacturers in aerospace including Fiat and Savoia-Marchetti. An Alitalia Fiat G-12. Touring Club Italiano/Marka/Universal Images Group via Getty Source: Boeing and Alitalia Following a merger with Italy's other airline, aptly named Italian Airlines or Linee Aeree Italiane, in 1957, Alitalia - Linee Aeree Italiane became Italy's top carrier. A Linee Aeree Italiane Douglas DC-3. Touring Club Italiano/Marka/Universal Images Group/Getty Source: Boeing and Alitalia Armed with a sizeable fleet of 37 aircraft including the four-engine Douglas DC-6 and Corvair 340, the airline was ranked 12 in the world for international carriers. Passengers disembarking an Alitalia aircraft. Touring Club Italiano/Marka/Universal Images Group via Getty Source: Boeing and Alitalia As Europe returned to normalcy following the war, so did Italy and the 1960s became a pivotal decade for both the country and its airline as the 1960 Summer Olympics would be held in Rome. An Alitalia poster highlighting the upcoming Olympic Games in Rome. David Pollack/Corbis via Getty Source: Boeing and Alitalia The year saw Alitalia carry over one million passengers, introduce jets into its fleet, and move to a new home at Rome's Fiumicino Airport. Rome's Leonardo da Vinci Fiumicino Airport in 1961. Carlo Bavagnoli/Mondadori via Getty Source: Boeing and Alitalia Alitalia entered the jet age with a mix of European and American aircraft such as the Sud Caravelle SE210… An Alitalia Sud Caravelle. Touring Club Italiano/Marka/Universal Images Group/Getty Source: Boeing and Alitalia And the Douglas DC-8. An Alitalia DC-8. Adams/Fairfax Media via Getty Source: Boeing and Alitalia American aircraft largely comprised the airline's fleet once settled into the jet age with a short-haul fleet featuring the McDonnell Douglas DC-9 and later the McDonnell Douglas MD-80... An Alitalia MD-80. Etienne DE MALGLAIVE/Gamma-Rapho/Getty Source: Boeing and Alitalia Complemented by a similarly American-dominated long-haul fleet consisting of aircraft such as the Boeing 747. An Alitalia Boeing 747 chartered by Pope John Paul II. Scott Peterson/Liaison/Getty Source: Boeing and Alitalia The arrival of the 747 was a seminal moment for Alitalia and it was the first aircraft to wear the airline's famed green, white, and red livery with an "A" shape on the tail. Alitalia's red and green "A" tail design. Etienne DE MALGLAIVE/Gamma-Rapho/Getty Source: Boeing and Alitalia Alitalia was the first European airline to transition fully into the jet age and continued the switch with more wide-body aircraft such as the Airbus A300. An Alitalia Airbus A300. Images Group/Getty Source: Boeing and Alitalia Other aircraft that would join the Alitalia jet fleet included the McDonnell Douglas MD-11, McDonnell Douglas DC-10... An Alitalia McDonnell Douglas MD-11. Education Images/Universal Images Group/Getty Source: Boeing and Alitalia And Boeing 767-300ER for long-haul flights. An Alitalia Boeing 767-300ER. JOKER/Hady Khandani/ullstein bild/Getty Source: Boeing and Alitalia Alitalia even had uniforms designed by Georgio Armani, who also contributed to aircraft interior designs. Italian designer Georgio Armani. Vittoriano Rastelli/CORBIS/Corbis via Getty Source: Alitalia The airline's short-haul fleet later included a European favorite, the Airbus A320 family. An Alitalia Airbus A320 airplane approaches to land at Fiumicino airport in Rome Reuters Source: Boeing As Italy's national airline, Alitalia was also known for flying the Pope with the papal plane using the flight number AZ4000, better known as Shepherd One An Alitalia plane chartered by the Pope. AP Photo/Plinio Lepri Source: Telegraph Despite rising traffic throughout its history with Italy being a popular European tourist and leisure destination, the airline struggled with profitability. Alitalia check-in desks at Rome's Fiumicino Airport. ANDREAS SOLARO/AFP/Getty As a state-owned airline, Alitalia could always depend on the government to keep it flying, until the European Union stepped in and forbade financial support in 2006. An Alitalia Airbus A330. AP Photo/Riccardo De Luca Source: New York Times The 2000s then saw serious discussion into Alitalia's future with the Italian government wanting to sell its stake in the airline. The airline was opened for bidders in 2007 but yielded no results. A crow flying passed an Alitalia plane. AP Photo/Gregorio Borgia Source: New York Times Air France-KLM Group, the parent company of Air France and KLM as well as several smaller European airlines, then offered to buy the struggling airline but couldn't get labor unions on board and the deal collapsed. Alitalia and Air France-KLM Group signage. FILIPPO MONTEFORTE/AFP via Getty Source: Reuters The Italian government, not wanting to lose its flag carrier, continued to prop up its airline via emergency loans in violation of European Union rules. The European Commission in Brussels. Greg Sandoval/Business Insider Source: European Union The third attempt in two years to sell the airline came after the Air France-KLM Group deal collapsed with an investors group forming the Compagnia Aerea Italiana to purchase the airline, despite heavy pushback from labor unions. An Alitalia Boeing 777. VINCENZO PINTO/AFP/Getty Source: Reuters This Alitalia began operations in 2009, with Air France-KLM soon coming back into the picture taking a 25% stake from CAI. Alitalia meeting with Air France, Delta, and KLM executives. ALBERTO PIZZOLI/AFP via Getty Source: Financial Times The new airline quickly began differentiating itself from its former self, leasing aircraft instead of purchasing them with the fleet consisting of the Airbus A330 family… An Alitalia Airbus A330. Alberto Lingria/Reuters Source: FlightGlobal And Boeing 777 family comprising the airline's long-haul fleet. An Alitalia Boeing 777. Abner Teixeira/Getty Source: FlightGlobal It wasn't long before Alitalia was plagued with issues ranging from union strikes to underperforming subsidiaries and even a sting operation that saw Alitalia employees arrested for theft, according to contemporaneous news reports. Alitalia workers protesting at Fiumicino Airport. AP Photo/Alessandra Tarantino Source: New York Times and BBC With bankruptcy looming in 2013, Alitalia secured another bailout with help from the government that highlighted the need for restructuring. An Alitalia Airbus A320. AP Photo/Antonio Calanni Source: New York Times Alitalia saw a new investor in 2015, Eithad Airways, which would take a 49% stake in the airline and Alitalia - Compagnia Aerea Italiana became Alitalia - Societa Aerea Italiana. Alitalia and Etihad celebrating a new partnership. AP Photo/Antonio Calanni Source: Alitalia With a new investor in tow, Alitalia began cost-cutting measures but facing a backlash from employees due to planned job cuts, the airline began bankruptcy proceedings and the government announced Alitalia would be auctioned. Alitalia and Etihad's merger livery. AP Photo/Antonio Calanni Source: Reuters Meanwhile, another airline was positioning itself to become the new Italian flag carrier, the aptly named Air Italy. An Air Italy Airbus A330-200. Air Italy Rebranded from Meridiana, a regional Italian airline, Air Italy was jointly owned by private company Alisarda and Qatar Airways. A Qatar Airways Boeing 777-200LR. Thomas Pallini/Business Insider The airline chose Milan as its main hub ceding Rome to Alitalia. Long-haul flights from Milan to New York began in June 2018, with expansion to Asia happening soon after. Air Italy's inaugural ceremony for Milan-New York flights. David Slotnick/Business Insider Affected by the grounding of the Boeing 737 Max and without the Italian government as a benefactor, Air Italy closed up shop in early 2020, giving back full control of Italy to Alitalia. An Alitalia Airbus A320. ALBERTO PIZZOLI/AFP/Getty While Air Italy was getting its start, the Italian government would once again seek outside investors with European, North American, and Asian airlines expressing interest in Alitalia. Alitalia aircraft in Italy. Alberto Lingria/Reuters Among those interested were UK low-cost carrier EasyJet... EasyJet airplanes are pictured at Tegel airport in Berlin. Reuters Source: Bloomberg Irish low-cost carrier Ryanair… A Ryanair commercial passenger jet takes off in Blagnac near Toulouse. Reuters Source: The Guardian The Lufthansa Group… Strike of Germany's cabin crew union UFO at Frankfurt airport. Reuters Source: CNBC Delta Air Lines… A Delta Air Lines Boeing 777-200. James D. Morgan/Getty Source: Bloomberg And China Eastern Airlines… A China Eastern Airlines Airbus A320. REUTERS/Jon Woo Source: Reuters As well as Italian railway group Ferrovie dello Stato Italiane. A Ferrovie dello Stato Italiane train. TIZIANA FABI/AFP via Getty Source: Reuters One after the other, the airlines dropped their interest, and ultimately, the Italian government re-nationalized the airline on March 17 during the coronavirus pandemic. Alitalia was re-nationalized amid the coronavirus pandemic. Budrul Chukrut/SOPA Images/LightRocket/Getty Source: Reuters  Despite bailouts from the state, the pandemic and subsequent lockdown of Italy took the ultimate toll on Alitalia, forcing it to make the decision to close the airline and launch a new one. Alitalia aircraft at the Frankfurt airport Vytautas Kielaitis/Shutterstock Source: The Local On August 25, the airline stopped selling tickets and announced on its website that it would be offering free flight changes or refunds for passengers booked on Alitalia flights after October 14. People at Alitalia check in counter TK Kurikawa/Shutterstock Source: The Local When the airline ceased operations, its successor, Italia Transporto Aereo, took its place. Alitalia's last flight flew from Cagliari, Italy to Rome on October 14, and ITA launched operations with a flight from Milan to Bari, Italy on October 15. ITA app and logo rarrarorro/Shutterstock Source: AeroTime Talks between the European Commission and Italy over Alitalia and ITA began in March 2021, with Rome designating 3 billion euros ($3.6 billion) to establish the new flag carrier. ITA signage at Catania airport rarrarorro/Shutterstock Source: Reuters Initially, ITA was slated to begin operations in April 2021, but lengthy discussions between Italy and the European Commission delayed its launch. Flags outside European Commission building in Brussels VanderWolf Images/Shutterstock Source: Reuters Part of the negotiations focused on confirming ITA's independence of Alitalia to ensure it did not inherit the billions of debt the old carrier owed to the state. Alitalia Airbus A319 Wirestock Creators/Shutterstock Source: Reuters Talks also included asking ITA to forfeit half of Alitalia's slots at Milan Linate Airport, which the airline was unwilling to do. Alitalia aircraft sit at Milan Linate airport Gabriele Maltinti/Shutterstock Source: Reuters ITA determined giving up that many slots at Linarte would be too big of a loss and proposed forfeiting slots at Rome Fiumicino Airport as a compromise. Alitalia check in counter Leonardo da Vinci Fiumicino airport TK Kurikawa/Shutterstock Source: Reuters At the end of the discussions, negotiators agreed to allow ITA to keep 85% of slots at Linate and 43% at Fiumicino. Green ribbon barrier with the ITA airline logo inside the Leonardo da Vinci airport rarrarorro/Shutterstock Source: Reuters Also under negotiation was Alitalia's brand and its loyalty program, MilleMiglia. The European Commission said ITA would have to give up both. Alitalia Airbus A320 Yaya Photos/Shutterstock Source: Reuters Under European Commission rules, MilleMiglia cannot be bought by ITA and must be put out for public tender, meaning another airline or entity outside the aviation industry can purchase the program. There are an estimated five million MilleMiglia miles that customers have not been able to use. Customer checking into an Alitalia flight Sorbis/Shutterstock Source: EuroNews However, ITA was able to bid on Alitalia's brand, which it did the day before its launch. The airline bought the Alitalia name for €90 million ($104 million), though ITA executives say they don't plan on replacing the ITA name. Alitalia aircraft Light Orancio/Shutterstock Source: Reuters ITA began operations on October 15, the day after Alitalia's last flight. The new airline secured €700 million ($830 million) in funding earlier this year, which helped it purchase some of Alitalia's assets. Alitalia employees with new livery in 2015 Simone Previdi/Shutterstock Source: Reuters The successor acquired 52 of Alitalia's aircraft, seven being wide-bodies, and has plans to purchase and lease new ones, the first of which will enter the fleet in early 2022. Alitalia Boeing 777 Deni Williams/Shutterstock Source: Reuters By 2025, the airline expects to have 105 aircraft in its fleet and earn over 3.3 billion euros in revenue. ITA logo with Alitalia aircraft Yaya Photos/Shutterstock Source: Reuters, Airways Magazine Moreover, ITA plans to renew its fleet with next-generation aircraft, which is expected to make up 77% of its fleet in four years. According to ITA, the aircraft will reduce CO2 emissions by 750 thousand pounds from 2021 to 2025. Milan Linate Airport Alexandre Rotenberg/Shutterstock Source: Airways Magazine, ITA Airways The 31 new-generation planes, which include short, medium, and long-haul aircraft, will be leased by Air Lease Corporation. Airbus A320neo Airbus Source: Airways Magazine Meanwhile, 28 new Airbus jets, including ten Airbus A330neos, seven Airbus A220 family aircraft, and 11 Airbus A320neo family jets, will be purchased. Airbus A220 Airbus Source: Airways Magazine As part of a carbon-reducing project, the first 10 flights to depart Rome on October 15 will use sustainable aviation fuels made by Italian energy company Eni. The project will contribute to the EU's "Fit for 55" proposal, which strives to reduce carbon emissions by at least 55% by 2030. Eni headquarters in Rome Source: Airways Magazine ITA introduced a new livery on launch day, which includes a light blue paint scheme representing unity, cohesion, and pride of the nation, as well as homage to Italy's national sports team, which wears sky blue during competitions. On the tail will be the Italian tricolor of red, white, and green. ITA Airways Chairman Alfredo Altavilla poses with rendering of new livery ITA Press Office/Handout via REUTERS Source: Airways Magazine In regards to its network, the carrier launched with 59 routes to 44 destinations. ITA plans to increase its routes to 74 in 2022 and 89 by 2025, while destinations are expected to increase to 58 in 2022 and 74 by 2025. ITA logo ITA Airways Source: Airways Magazine ITA will focus its operation out of Rome's Leonardo da Vinci International Airport and Milan Linate Airport, establishing itself as a "reference airline" for both business and leisure travelers. bellena/ Source: Airways Magazine The carrier also plans to target the North American market, with flights from Rome to New York launching on November 4. Joey Hadden/Insider Source: CNN As for the over 11,000 Alitalia workers, 70% were hired to work for ITA, which has 2,800 employees. 30% of that came from outside Alitalia. The company plans to add 1,000 new jobs in 2022 and reach 5,750 employees by 2025. Alitalia staff at Milan Linate Sorbis/Shutterstock Source: Reuters, Airways Magazine ITA plans to improve upon Alitalia's services, including incentivizing good customer service by attaching employee salary with customer satisfaction. Alitalia staff Sorbis/Shutterstock Source: CNN ITA has set up a loyalty program called Volare, effective October 15, which is split into four levels: smart, plus, premium, and executive. Customers can use accrued points for any flight in ITA's system. ITA app rarrarorro/Shutterstock Source: Airways Magazine According to ITA executives, the company plans to join a major international alliance, though it has not stated which one it prefers. Alitalia was aligned with the SkyTeam alliance, which is comprised of carriers like Delta, Air France, and KLM. Alitalia Embraer 190LR SkyTeam livery InsectWorld/Shutterstock Source: CNN, Reuters However, ITA chairman Alfredo Altavilla said it was open to all options. "ITA can't be a stand-alone carrier forever," he said. Alitalia Boeing 767 SkyTeam livery Eliyahu Yosef Parypa/Shutterstock Source: Reuters While it is the end of an era with the closing of Alitalia, there are high hopes for its successor. "ITA Airways has been created to intercept the recovery of air traffic in the coming years on the strength of the foundations of its strategy: sustainability, digitalization, customer focus, and innovations," said ITA CEO Fabio Lazzerini. Alitalia plane with ITA logo Yaya Photos/Shutterstock Source: Airways Magazine Read the original article on Business Insider.....»»

Category: personnelSource: nytOct 15th, 2021

AAR Reports First Quarter 2022 Results

First quarter sales of $455 million, up 14% over the prior year First quarter GAAP diluted earnings per share from continuing operations of $0.31 compared to a loss per share of $(0.40) in Q1 FY2021 Adjusted diluted earnings per share from continuing operations of $0.52, up 206% from $0.17 in Q1 FY2021 First quarter cash flow from operating activities from continuing operations of $18 million WOOD DALE, Ill., Sept. 23, 2021 (GLOBE NEWSWIRE) -- AAR CORP. (NYSE:AIR) today reported first quarter Fiscal Year 2022 consolidated sales of $455.1 million and income from continuing operations of $11.2 million, or $0.31 per diluted share. For the first quarter of the prior year, the Company reported sales of $400.8 million and loss from continuing operations of $13.9 million, or $0.40 per diluted share. Our adjusted diluted earnings per share from continuing operations in the first quarter of Fiscal Year 2022 were $0.52 compared to $0.17 in the first quarter of the prior year. Current quarter results included net pretax adjustments of $9.9 million, or $0.21 per share, primarily due to a previously disclosed customer contract termination and related asset impairment charges. Consolidated first quarter sales increased 14% over the prior year quarter. Our consolidated sales to commercial customers increased 53% over the prior year quarter primarily due to the recovery in the commercial market from the impact of COVID-19. Our consolidated sales to government customers decreased 17% primarily related to timing as the prior year quarter included significant activity across both our U.S. Marine Corps C-40 and U.S. Air Force pallet contracts. On a sequential basis, consolidated first quarter sales increased 4% over the fourth quarter. Our consolidated sales to commercial customers increased 17% over the fourth quarter while consolidated sales to government customers decreased 10%. Sales to commercial customers were 59% of consolidated sales compared to 44% in the prior year's quarter reflecting the recovery in the commercial market from the impact of COVID-19. Subsequent to the end of the quarter, we announced several new contract awards including: Exclusive distribution agreement with Arkwin Industries covering its broad line of engine actuation and commercial aviation products, which complement our existing engine parts offerings Firm, fixed price contract from the Department of Energy's National Nuclear Security Administration for the conversion and delivery of a Boeing 737-700 aircraft Extension of our long-term, component support agreement with Volotea, a growing low-cost carrier in Spain, for its fleet of Airbus narrowbody aircraft utilizing our logistics centers in Europe "We had a very strong start to the year across our commercial business. We saw robust performance in our MRO operations and continued recovery in our parts activities. We also secured new government and commercial program contract awards while adding another exclusive new parts distribution agreement, which we expect to contribute to our long-term growth," said John M. Holmes, President and Chief Executive Officer of AAR CORP. Gross profit margins increased from 12.1% in the prior year quarter to 14.2% in the current quarter and adjusted gross profit margin increased from 13.0% to 16.1%, primarily due to the favorable impact from our actions to reduce costs and increase our operating efficiency. Expeditionary Services profitability increased significantly from 10.8% to 19.0% reflecting the sale of the Composites business in the prior year quarter and improved execution in the Mobility business. Selling, general and administrative expenses increased from $45.3 million to $49.3 million mainly due to restoration of temporary compensation reductions. Selling, general and administrative expenses as a percent of sales decreased from 11.3% to 10.8% due to the favorable impact from our cost reduction actions. Operating margin increased from 0.8% in the prior year quarter to 3.3% in the current quarter and adjusted operating margin increased from 2.5% to 5.5%, primarily due to the favorable impact from our actions to reduce costs and increase our operating efficiency. Sequentially, our adjusted operating margin increased from 5.2% in the fourth quarter to 5.5% in the current quarter. In conjunction with the U.S. exit from Afghanistan, we have concluded our activities in country under our WASS and U.S. Department of Defense contracts. The operations related to our activities in Afghanistan contributed revenue of $67 million in Fiscal 2021. Holmes continued, "I am extremely proud of our WASS team and their work in Afghanistan. Our team played a vital role in helping to evacuate over 2,000 U.S. Embassy personnel over a 36 hour period. This was a very difficult operation in a challenging environment but all of our flights were completed successfully and once our mission was accomplished, all of our AAR team members were safely evacuated. We are very grateful for their service." Net interest expense for the quarter was $0.7 million compared to $1.6 million last year. Average diluted share count increased to 35.7 million from 35.0 million in the prior year quarter. Cash flow provided by operating activities from continuing operations was $17.5 million during the current quarter compared to $39.8 million in the prior year quarter, which included $48.5 million related to our receipt of funding from the CARES Act through the Payroll Support Program. Excluding our accounts receivable financing program, our cash flow provided by operating activities from continuing operations was $25.9 million in the current quarter. Holmes concluded, "Our continued focus on driving operating efficiency and working capital management led to another quarter of sequential margin improvement and strong cash flow. Looking forward, while the U.S. exit from Afghanistan will impact our government business in the near term, we are encouraged by the strong pipeline of offsetting government opportunities such as the recent contract award from the Department of Energy. In our commercial markets, the timing of the recovery has been impacted by the Delta variant, but as we continue to see demand increase, particularly in our parts activities, we expect continued growth and operating margin expansion." Conference Call Information                                         AAR will hold its quarterly conference call at 3:45 p.m. CT on September 23, 2021. The conference call can be accessed by calling 866-802-4322 from inside the U.S. or +1-703-639-1319 from outside the U.S. A replay of the conference call will also be available by calling 855-859-2056 from inside the U.S. or +1-404-537-3406 from outside the U.S. (access code 8294140). The replay will be available from 7:15 p.m. CT on September 23, 2021 until 10:59 p.m. CT on September 29, 2021. About AAR AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the Chicago area, AAR supports commercial and government customers through two operating segments: Aviation Services and Expeditionary Services. AAR's Aviation Services include parts supply; OEM solutions; integrated solutions; maintenance, repair, overhaul; and engineering. AAR's Expeditionary Services include mobility systems operations. Additional information can be found at Contact: Dylan Wolin – Vice President, Strategic & Corporate Development and Treasurer | (630) 227-2017 | This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, which reflect management's expectations about future conditions, including but not limited to (i) the ability of our latest distribution, government and commercial programs contract awards to support continued long-term growth,(ii) the impact of our continued focus on driving operating efficiency and working capital management on sequential margin improvement and cash flow, (iii) the impact on our government business in the near term of the recent U.S. exit from Afghanistan, (iv) the impact of the strong pipeline of offsetting government opportunities on our future results and (v) our expectations regarding continued growth and operating margin expansion. Forward-looking statements often address our expected future operating and financial performance and financial condition, or sustainability targets, goals, commitments, and other business plans, and often may also be identified because they contain words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "might," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," or similar expressions and the negatives of those terms. These forward-looking statements are based on the beliefs of Company management, as well as assumptions and estimates based on information available to the Company as of the dates such assumptions and estimates are made, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including: (i) factors that adversely affect the commercial aviation industry; (ii) the continued impact of the COVID-19 pandemic on air travel, worldwide commercial activity and our and our customers' ability to source parts and components; (iii) a reduction in the level of sales to the branches, agencies and departments of the U.S. government and their contractors (which were 44.7% of total sales in fiscal 2021); (iv) non-compliance with laws and regulations relating to the formation, administration and performance of our U.S. government contracts; (v) cost overruns and losses on fixed-price contracts; (vi) nonperformance by subcontractors or suppliers; (vii) changes in or non-compliance with laws and regulations that may affect certain of our aviation and government and defense related activities that are subject to licensing, certification and other regulatory requirements imposed by the FAA, the U.S. State Department and other regulatory agencies, both domestic and foreign; (viii) a reduction in outsourcing of maintenance activity by airlines; (ix) a shortage of the skilled personnel on whom we depend to operate our business, or work stoppages; (x) competition from other companies, including original equipment manufacturers, some of which have greater financial resources than we do; (xi) financial and operational risks arising as a result of operating internationally; (xii) inability to integrate acquisitions effectively and execute our operational and financial plan related to the acquisitions; (xiii) inability to recover our costs due to fluctuations in market values for aviation products and equipment caused by various factors, including reductions in air travel, airline bankruptcies, consolidations and fleet reductions; (xiv) asset impairment charges we may be required to recognize to reflect the non-recoverability of our assets or lowered expectations regarding businesses we have acquired; (xv) limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements; (xvi) non-compliance with restrictive and financial covenants contained in certain of our loan agreements, and government funding received under the CARES Act; (xvii) restrictions on paying, or failure to maintain or pay dividends; (xviii) exposure to product liability and property claims that may be in excess of our liability insurance coverage; (xix) threats to our systems technology from equipment failures' cyber and other security y breaches or other disruptions; (xx) the costs of compliance, and liability for non-compliance, with environmental regulations, including future requirements regarding climate change; and (xxi) a need to make significant capital expenditures to keep pace with technological developments in our industry. Should one or more of those risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described. Those events and uncertainties are difficult or impossible to predict accurately and many are beyond our control. For a discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10-K, Part I, "Item 1A, Risk Factors" and our Quarterly Reports on Form 10-Q. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company's control. The risks described in these reports are not the only risks we face, as additional risks and uncertainties are not currently known or foreseeable or impossible to predict accurately or risks that are beyond the Company's control or deemed immaterial may materially adversely affect our business, financial condition or results of operations in future periods. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. AAR CORP. and Subsidiaries Consolidated Statements of Operations (In millions except per share data - unaudited) Three Months Ended August 31,     2021       2020                   Sales $ 455.1     $ 400.8   Cost and expenses:               Cost of sales   390.5       352.2   Selling, general and administrative   49.3       45.3   Loss from joint ventures   (0.2 )     (0.1 ) Operating income   15.1       3.2   Loss on sale of business   ––       (19.5 ) Interest expense, net   (0.7 )     (1.6 ) Other income, net   0.7       0.2   Income (Loss) from continuing operations before income taxes   15.1       (17.7 ) Income tax expense (benefit)   3.9       (3.8 ) Income (Loss) from continuing operations   11.2       (13.9 ) Income (Loss) from discontinued operations   0.3       (0.6 ) Net income (loss) $ 11.5     $ (14.5 )                 Earnings (Loss) per share – Basic               Earnings (Loss) from continuing operations $ 0.32     $ (0.40 ) Earnings (Loss) from discontinued operations   0.01       (0.02 ) Earnings (Loss) per share – Basic $ 0.33     $ (0.42 )                 Earnings (Loss) per share – Diluted               Earnings (Loss) from continuing operations $ 0.31     $ (0.40 ) Earnings (Loss) from discontinued operations   0.01       (0.02 ) Earnings (Loss) per share – Diluted $ 0.32     $ (0.42 )                 Share Data:               Weighted average shares outstanding – Basic   35.1       34.9   Weighted average shares outstanding – Diluted   35.7       35.0                   AAR CORP. and Subsidiaries Consolidated Balance Sheets (In millions) August 31, 2021   May 31, 2021   (unaudited)     ASSETS       Cash and cash equivalents $ 48.8   $ 51.8 Restricted cash   3.8     8.4 Accounts receivable, net   180.8     166.7 Contract assets   74.6     71.9 Inventories, net   525.8     540.6 Rotable assets and equipment on or available for lease   52.3     50.4 Assets of discontinued operations   19.2     19.5 Other current assets   39.6     27.7 Total current assets   944.9     937.0 Property, plant, and equipment, net   109.1     120.0 Operating lease right-of-use assets, net   73.6     75.8 Goodwill and intangible assets, net   122.1     123.8 Rotable assets supporting long-term programs   178.0     184.3 Other non-current assets   108.0     98.8 Total assets $ 1,535.7   $ 1,539.7             LIABILITIES AND EQUITY           Accounts payable and accrued liabilities $ 304.0   $ 301.4 Liabilities of discontinued operations   20.2     35.4 Total current liabilities   324.2     336.8 Long-term debt   127.6     133.7 Operating lease liabilities   58.0     59.9 Other liabilities and deferred income   37.7     34.9 Total liabilities   547.5     565.3 Equity   988.2     974.4 Total liabilities and equity $ 1,535.7   $ 1,539.7             AAR CORP. and Subsidiaries Consolidated Statements of Cash Flows (In millions – unaudited) Three Months Ended August 31,.....»»

Category: earningsSource: benzingaSep 23rd, 2021

South African Airways is flying again after its government cut funding last year. Here"s a look at the collapse and revival of the 87-year-old national airline.

The airline has served South Africa since before the country became truly independent from the UK and has a history largely molded by its country's laws. SAA relaunches flights after a year of inactivity Reuters South African Airways relaunched operations with a flight from Johannesburg to Cape Town after a year of inactivity. Though not involved in the relaunch, the airline has likely secured a new investor, Takatso Consortium. SAA said it's optimistic about its revival, but it's not without its skeptics. See more stories on Insider's business page. South African Airways was on the brink of disappearance after years of financial struggles, but it may have received a lifeline.On Thursday, the carrier relaunched operations on a flight from Johannesburg to Cape Town using money it received from the South African government. After getting in millions from the state, the long-suffering carrier was denied further funding last year, and, as FlightGlobal reported, business rescuers entrusted with the difficult task of rescuing the 87-year-old airline had given it two options: liquidation or a wind-down and sale process.However, SAA has likely secured a private investor, Takatso Consortium, in June 2021, which agreed to funnel up to $243 million into the crippled airline over the next three years. Takatso Consortium CEO Gidon Novick said the relaunch is independent of the negotiations between the consortium and the carrier.Take a look at South African Airways' collapse and rebirth. The airline itself dates back to 1934 when South Africa's Union Airways was nationalized to form the new South African Airways. The state-owned airline would become the flag carrier of South Africa, which was still part of the British Empire at the time. A South African Airways Junkers aircraft. The Print Collector/Print Collector/Getty Source: South African Airways Initial operations for South African included regional flights within Africa. Intra-African and domestic flights were operated by aircraft including the Junkers Ju 52, Douglas DC-3, and Junkers Ju 86. A Douglas DC-3 painted in South African Airways former colors. Simon_g / Source: South African Airways Once World War II ended, South African expanded beyond the shores of its home continent with a multi-stop flight to the heart of the British Empire. The route was known as the "Springbok" service, after the national animal of South Africa. An Avro York aircraft similar to the one used by South African Airways. The Montifraulo Collection/Getty Source: South African Airways The 34-hour, three-day service initially flown by an Avro York aircraft, stopped in Nairobi, Kenya; Khartoum, Sudan; Cairo, Egypt; and Castel Benito, Libya, before arriving in Bournemouth, England. An Avro York aircraft similar to the one used by South African Airways. The Montifraulo Collection/Getty Source: South African Airways Springbok would also become the radio callsign for South African Airways flights. A Douglas DC-3 painted in South African Airways former colors. Simon_g / More modern aircraft from Western manufacturers including the Lockheed Constellation L-749 and Douglas DC-4 were later added, helping fuel international expansion. A Douglas DC-4 painted in South African Airways former colors. Simon_g / Source: South African Airways The airline added flight attendants on its services in 1946 and later added in-flight movies to some of its flights in the same decade. A Douglas DC-3 painted in South African Airways former colors. Simon_g / Source: South African Airways South Africa entered the jet age in 1953 with a British Overseas Airways Corporation de Havilland Comet operated by South African Airways that flew from Johannesburg to London. A BOAC de Havilland Comet aircraft. PA Images/Getty Source: South African Airways Intercontinental expansion continued with South African Airways later growing its route network to Australia in 1957 with "Wallaby" service. A Douglas DC-4 painted in South African Airways former colors. Simon_g / Source: South African Airways The 1960s then saw further expansion to South America, with flights to Rio de Janeiro, and then North America, with flights to New York, using the Boeing 707. A South African Airways Boeing 707 aircraft. Antony Matheus Linsen/Fairfax Media/Getty Source: South African Airways South African hit a milestone in the 1970s with its first Boeing 747 aircraft, an aircraft that had begun flying passengers only at the beginning of the decade. The quad engine aircraft quickly became a status symbol for the world's airlines. A South African Airways Boeing 747 aircraft. Rolls Press/Popperfoto/Getty Source: South African Airways Other new arrivals included the Boeing 737… A South African Airways Boeing 737-800 aircraft. JOKER/Hady Khandani/ullstein bild/Getty Source: South African Airways And Airbus A300. A South African Airways Airbus A300 aircraft. STR New/Reuters Source: South African Airways South African was also one of the first commercial operators of a unique Boeing product, the 747SP. A South African Airways Boeing 747SP aircraft. EQRoy / Source: South African Airways A shortened version of the popular Jumbo Jet but with the same four engines, the 747SP offering extended ranges unmatched by most aircraft of the time. The range of the 747SP was so great that South African flew it from Seattle to Cape Town nonstop, a distance of over 8,800 nautical miles, on its delivery flight. A South African Airways Boeing 747SP aircraft. EQRoy / Source: South African Airways While airlines liked the 747SP for its performance capabilities, South African had a different reason involving the country's apartheid policy. A Boeing 747SP aircraft. Mo Azizi / Due to the discriminatory policy, some African countries had restricted South African Airways flights from entering their airspaces and the airline would often have to fly indirect routes to get to Europe. A South African Airways Boeing 747SP aircraft. EQRoy / Source: New York Times The Boeing 747SP allowed for South African to go around the countries without having to stop for fuel on the way to Europe. Other aircraft frequently used Cape Verde as a refueling stop for flights to Europe, despite the archipelago's location off the coast of West Africa. A South African Airways Boeing 747SP aircraft. EQRoy / Source: New York Times A route from Johannesburg to Athens on the 747SP, for example, stopped in Lisbon and Rome along the way. The flight flew direct or with one stop to Lisbon, and then headed into the continent. A South African Airways Boeing 747SP aircraft. EQRoy / Source: South African Airways The 1980s then saw turbulence for the carrier as Western nations adopted sanctions against South Africa for its apartheid policies. Flights to the US and Australia were revoked in addition to the countries that had barred South African's flights. Australian protests against South Africa's apartheid policy. Robert Pearce/Fairfax Media/Getty Source: South African Airways When apartheid ended in the 1990s, South African was allowed to grow its route network once again and the airline no longer needed to fly the long, costly routes to avoid some nations. A South African Airways Airbus A320 aircraft. Rogan Ward/Reuters Source: South African Airways One of the most notable displays of the new airline came in 1995 during the Rugby World Cups when a South African Airways Boeing 747 did a flyover of the stadium with "Good Luck Bokke," a nickname for the South African team, painted on the belly. The feat was repeated multiple times in later years by other airlines. An aircraft flyover at a 2013 Springboks vs All Blacks rugby match, David Rogers/Getty Source: South African Airways and Safair The decade also saw the airline win the title of Africa's leading airline from 1994 on to 2015. The 1990s, however, also saw the airline begin its financial losing streak. South African Airways aircraft. William F. Campbell/The LIFE Images Collection/Getty Source: QZ The 2000s saw South African undergo a fleet renewal where most of its long-haul Boeing jets were retired in favor of European-built Airbus planes. The new long-haul flagships became the Airbus A330… A South African Airways Airbus A330 aircraft. SUMAYA HISHAM/Reuters Source: And A340-600. A South African Airways Airbus A340-600 aircraft. Bruce Bennett/Getty Source: South African was later brought into organizations to which it had been denied including the International Civil Aviation Organization and joined the Star Alliance. South African Airways joined Star Alliance in 2006. SIPHIWE SIBEKO/Reuters Source: South African Airways Its new-found praise and acceptance, however, couldn't replace the financial woes of the airline. In 2019, South African entered the equivalent of bankruptcy protection and began restructuring after racking up nearly $3 billion in debt. South African Airways employees protest during the airline's bankruptcy. Siyabonga Sishi/Reuters Source: QZ Despite being in the midst of restructuring, South African leased a new aircraft, the Airbus A350-900 XWB, which ultimately launched on the Johannesburg-New York route in January 2020. A South African Airways Airbus A350-900 XWB. South African Airways Read More: Bankrupt South African Airways just debuted its newest plane, the Airbus A350, weeks early despite verging on the brink of collapse The swanky new aircraft would be ideal for the ultra-long-haul routes that South African planned to use them for. A South African Airways Airbus A350-900 XWB. South African Airways With the new aircraft in the air and flying passengers, the hope was that South African might have a plan to save itself from collapse. A South African Airways Airbus A350-900 XWB. South African Airways South Africa's government, which has been incrementally providing relief, however, ultimately pulled the plug in April 2020. A South African Airways Airbus A340-600. Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Source: FlightGlobal Without intervention from either the government or a private buyer willing to keep the airline going, South African Airways looked like it was going to disappear from the skies for good. A South African Airways Airbus A350-900 XWB. Sumaya Hisham/Reuters However, the airline is back up and running after over a year of inactivity. SAA relaunched operations on September 23 with a flight from Johannesburg to Cape Town using an A320 aircraft, which carried 123 passengers on the maiden journey. SAA's first flight in over a year Reuters Source: Aerotime Hub The relaunch came after months of restructuring, which included reducing its debt and cutting its workforce by 80%, down from 4,000 to 802. SAA relaunch at Johannesburg airport Reuters Source: Aerotime Hub, ch-aviation The airline will be backed by Takatso Consortium, a joint-venture between Harith General Partners and Global Aviation, which is in late stage talks to buy the majority stake from the South African government in June. South African union buildings Burhan Ay Photography/Shutterstock Source: africannews Takatso Consortium is set to be SAA's lifeline, though is not reportedly involved in the airline's management, relaunch, or funding. However, Takatso CEO Gidon Novick said in a statement that negotiations to take a 51% share are "substantially complete." SAA A320 at Johannesburg airport Thiago B Trevisan/Shutterstock Source: ch-aviation The consortium's deal made with South Africa's Department of Public Enterprises includes investing up to $243 million into the airline over the next three years. SAA A330 takes off from Lusaka, Zambia Vidit Luthra Source: africannews Without its private funds yet secured, the company is using $33.8 million of the $712.3 million bailout it received from the state to restart operations. SAA A320 Thiago B Trevisan/Shutterstock Source: ch-aviation SAA's interim CEO Thomas Kgokolo said the company needs a modern fleet of aircraft if it is going to be competitive outside of Africa. Currently, its all-Airbus fleet has an average age of more than 15 years. SAA plane in Namibia Felix Lipov/Shutterstock Source: africannews However, Kgokolo said ticket sales are promising and early numbers indicate flights could be 75% full. SAA passengers Reuters Source: africannews The airline's fleet has shrunk, having only six of the original 44 it had before insolvency. SAA will start with a small network, operating one domestic route and five regional routes, including to Accra, Ghana; Kinshasa, DRC; Harare, Zimbabwe; Lusaka, Zambia; and Maputo, Mozambique. SAA plane in Johannesburg Reuters Source: ch-aviation While it still has a long way to go, SAA's relaunch has brought pride and excitement for its employees. Crew members danced and sang at the Johannesburg airport before the maiden flight. SAA employees dance after relaunch Reuters Source: Reuters While the airline is optimistic about its return, skeptics believe it will be short-lived. According to Efficient Group economist Dawie Roodt, Takatso Consortium's absence from the relaunch is not a good sign. SAA A340 wing Vidit Luthra/Shutterstock Source: jacarandafm He explained that the slow deal with the consortium makes him wonder where the money to keep SAA in the air is going to come from. Without the agreement finalized, the airline will likely have its wings clipped again soon, according to Roodt. SAA tail at Frankfurt airport Vytautas Kielaitis/Shutterstock Source: jacarandafm Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 23rd, 2021

All-Airbus operator Spirit Airlines eyes a Boeing jet for fleet expansion

Spirit Airlines is beefing up its service in Seattle this spring and summer, betting it can win Puget Sound region business with its bright yellow jets and ultra-low-cost fares......»»

Category: topSource: bizjournalsApr 11th, 2018

Skillful Craftsman Announces Financial Results for The First Six Months of Fiscal Year 2022

WUXI, China, Dec. 3, 2021 /PRNewswire/ -- Skillful Craftsman Education Technology Ltd. ("the Company") (NASDAQ:EDTK), an education technology company providing interactive online learning services, today announced its financial results for the first six months of fiscal year 2022 ended September 30, 2021. First Six Months of Fiscal Year 2022 Financial and Operational Highlights All financial figures are in US Dollars unless otherwise noted. Revenue was $11.9 million, compared with $15.3 million for the same period of last year, representing a 23% decrease, primarily due to a decrease in the number of total fee-paying members resulting from the decline in training needs of workers from rural area as the urbanization continued. Gross profit was $3.6 million, compared with $8.5 million for the same period of last year, representing a 58% decrease. The decrease was mainly due to the combined effect of the decrease in revenue and an increase in cost of revenue as the Company incurred increased fees in courseware, software copyrights and virtual simulation in connection with its efforts to shift target customers to students at vocational schools. Gross profit margin was 30%, compared with 55% for the same period of last year. The main reason was the cost spent in platform upgrade and courses enrichment did not result in the expansion of customer base to the extent expected. Net loss was $43.3 thousand, compared with net income of $4.4 million for the same period of last year. The decrease was due to the decrease in revenue, an increase in the cost of revenue and an increase in general and administrative expenses. Basic and diluted earnings per share were $0.00, compared with $0.44 for the same period of last year. Total fee-paying members(1) was 1.1 million, compared with 3.3 million during the same period of last year, representing a 68% decrease. The decrease was primarily due to the combined effect of (i) the shrinking training needs of workers from rural area as a result of the development of urbanization, and (ii) unsatisfactory acquisition of new customers among students at vocational schools, who nowadays tend to be more interested in mobile live streaming and short video training courses than the personal computer courses offered by the Company. (1) Number of fee-paying members is defined as the total number of members that are paying fees for accessing our platforms as of the end of the applicable period. Mr. Xiaofeng Gao, Chairman and CEO of Skillful Craftsman Education Technology Ltd., commented, "To seize the market opportunities, we have accelerated the deployment of new business strategy and new technology since the first half year of 2021. With respect to business development, the Company is leveraging online cloud technology service and flexible employment service platform, to cooperate with schools and institutions to provide them with high quality vocational training. It has already landed in the two major fields of Chinese medicine basic education and hotel management. With respect to technology enhancement, the Company will integrate metaverse technology with big data, cloud technology and traditional Augmented Reality (AR) simulation teaching capabilities. Through co-constructing metaverse vocational labs with universities and ecological chain companies, the Company plans to launch multi-persons collaborative simulation skills training platform based on metaverse. We remain optimistic about the vocational education industry based on the Opinions on Promoting the High-quality Development of Modern Vocational Education (the "Opinions") issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council. The Opinions encourage companies to participate in and support the development of vocational education, which provides clear directions and positive incentives for the Company's future development. We believe our brand, strategic development and the supporting policy will position us well for the future and we are confident in creating long-term value and returns for our shareholders." First Six Months of Fiscal Year 2022 Financial Results All figures refer to the first six months of fiscal year 2022 ended September 30, 2021 unless otherwise stated Revenue Revenue decreased by 23% to $11.9 million, from $15.3 million for the same period of last year, primarily due to a decrease in the number of total fee-paying members resulting from the decline in training needs of workers from rural area as the urbanization continued. Cost of Revenue Cost of revenue increased by 21% to $8.3 million, from $6.8 million for the same period of last year. The increase of cost of revenue was mainly caused by the increase of $0.8 million amortization of the newly purchased courseware and software copyrights, and the increase of virtual simulation fee by $0.6 million, both related to the Company's efforts to shift target customers to students at vocational schools. Gross Profit and Gross Margin Gross profit decreased by 58% to $3.6 million, from $8.5 million for the same period of last year. The decrease was mainly due to the combined effect of increased cost of revenue in courseware, software copyrights and virtual simulation fees and decrease in revenue. Gross margin decreased by 25 percentage points to 30%, from 55% for the same period of last year. The main reason was the cost spent in platform upgrade and courses enrichment did not result in the expansion of customer base to the extent expected. Operating Expenses Operating expenses increased by 27% to $3.0 million, from $2.4 million for the same period of last year. Sales and marketing expenses decreased by 18% to $0.7 million, from $0.9 million for the same period of last year. The decrease was mainly due to the decreases in both of the promotion expenses and telecommunications service fees. General and administrative expenses increased by 53% to $2.3 million, from $1.5 million for the same period of last year. The increase was primarily caused by the increased compensation paid to employees, audit fees, the insurance fee and consulting fees for the period ended September 30, 2021. Income Before Tax Income before tax expense decreased by 90% to $0.6 million, from $6.1 million for the same period of last year. Net (loss)/Income Net loss was $43.3 thousand, compared with net income of $4.4 million for the same period of last year. Basic and diluted earnings per share were $0.00, compared with $0.44 for the same period of last year. Cash and Cash Equivalents As of September 30, 2021, the Company had cash and cash equivalents of $23.7 million, compared with $17.5 million as of March 31, 2021. Cash Flow Net cash generated from operating activities was $1.8 million, compared with $6.6 million for the same period of last year. Net cash provided by investing activities was $4.4 million, compared with net cash used in investing activities $14.2 million for the same period of last year. Net cash generated from financing activities was nil, compared with $13.24 million for the same period of last year. About Skillful Craftsman Skillful Craftsman is an education technology company that provides interactive online vocational training and virtual simulation experimental training courses. The Company began operations in Wuxi, China in 2013 and is a key supporter for China education reform and development for labor employment. For more information, please visit: Safe Harbor Statement This report contains "forward-looking statements" for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are "forward-looking statements," including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management's beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as "may", "will", "should", "could", "would", "predicts", "potential", "continue", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar expressions, as well as statements in the future tense, identify forward-looking statements. Forward-looking statements are based on information available at the time those statements are made and management's belief as of that time with respect to future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Such risks, uncertainties, and other factors include, but are not limited to, our ability to improve launch and leverage new technologies and cooperative relationships or anticipate market demand in a timely or cost-effective manner, and those factors discussed under the headings "Risk Factors", "Operating and Financial Review and Prospects," and elsewhere in our Annual Report on Form 20-F. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, and the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based or the success of our business. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement. For investor and media enquiries, please contact: Skillful CraftsmanInvestor Relations DepartmentEmail: Ascent Investor Relations LLCTina XiaoTel: +1 917-609-0333Email:       SKILLFUL CRAFTSMAN EDUCATION TECHNOLOGY LIMITED CONSOLIDATED BALANCE SHEETS (Amounts in US$, except for number of shares) As of September 30,2021 March 31,2021 (Unaudited) (Audited) ASSETS Current assets Cash and cash equivalents $ 23,712,359 $ 17,453,360 Accounts receivable, net 50,246 83,980 Prepayments 2,903,533 1,784,537 Other receivables 186,325 5,713,192 Total current assets 26,852,463 25,035,069 Non-current assets.....»»

Category: earningsSource: benzinga17 hr. 8 min. ago

Stockman: A (Bad) Tale Of Two Inflations

Stockman: A (Bad) Tale Of Two Inflations Authored by David Stockman via Contra Corner blog, Our paint by the numbers central bankers have given the notion of being literalistic a bad name. For years they pumped money like mad all the while insisting that the bogus “lowflation” numbers were making them do it. Now with the lagging measures of inflation north of 5% and the leading edge above 10%, they have insisted loudly that it’s all “transitory”. Well, until today when Powell pulled a U-turn that would have made even Tricky Dick envious. That is, he simply declared “transitory” to be “inoperative”. Or in the context of the Watergate scandal of the time, “This is the operative statement. The others are inoperative.” This 1973 announcement by Richard Nixon’s press secretary, Ron Ziegler, effectively admitted to the mendacity of all previous statements issued by the White House on the Watergate scandal. Still, we won’t believe the Fed heads have given up their lying ways until we see the whites of their eyes. What Powell actually said is they might move forward their taper end from June by a few month, implying that interest rates might then be let up off the mat thereafter. But in the meanwhile, there is at least six month for the Fed to come up with excuses to keep on pumping money at insane rates still longer, while defaulting to one of the stupidest rationalizations for inflation to ever come down the Keynesian pike: Namely, that since the American economy was purportedly harmed badly, and presumably consumers too, with the lowflation between 2012 and 2019, current elevated readings are perforce a “catch-up” boon. That is, more inflation is good for one and all out there on the highways and byways of main street America! You literally can’t make up such rank humbug. Even then, what the hell are they talking about? The shortest inflation measuring stick in town is the Fed’s (naturally) preferred PCE deflator, but here it is since the year 2000. The 21 years gain is 1.93% per annum; and the 9-year gain since inflation targeting became official in January 2012 is 1.73%. Given that the PCE deflator is not a true fixed basket inflation index and that these reading are close enough to target for government work anyway, even the “catch-up” canard fails. That’s especially true because given the virtual certainty of another year or two of 4-6% CPI inflation, even the cumulative measures of inflation will register well above the Fed’s sacrosanct 2.00% target. Moreover, importantly, pray tell what did this really accomplish for the main street economy? On the one hand, savers and fixed income retirees have seen their purchasing power drop by 39% since 2000 and 18% since 2012. At the same time, wage workers in the tradable goods and services sectors got modest wage gains with uniformly bad spill-over effects. To wit, millions lost their jobs to China, India and Mexico etc. because their nominal wages were no longer competitive in the global supply base, while those that hung on to their domestic jobs often lost purchasing ground to domestic inflation. Consequently, the chart below is an unequivocal bad. It is the smoking gun that proves the Fed’s pro-inflation policies and idiotic 2.00% target is wreaking havoc on the main street economy and middle class living standards. Loss of Consumer Purchasing Power, 2000-2021 In short. the group-think intoxicated Fed heads, and their Wall Street and Washington acolytes, are hair-splitting inherently unreliable and misleading numbers as if the BLS inflation data was handed down on stone tablets from financial heaven itself. At the same time, the rampant speculative manias in the financial markets that their oceans of liquidity have actually generated is assiduously ignored or denied. We call this a tale of two inflations because the disaster of today’s rampant financial asset bubbles is rooted in pro-inflation monetary policies which are belied by both theoretical and empirical realities, which we address below. First, however, consider still another aspect of the inflationary asset bubble which is utterly ignored by the Fed. In this case, the group think scribes of the Wall Street Journal inadvertently hit the nail on the head, albeit without the slightest recognition of the financial metastasis they have exposed. We are referring to a recent piece heralding that private-equity firms have announced a record $944.4 billion worth of buyouts in the U.S. so far this year. That 250% of last year’s volume and more than double that of the previous peak in 2007, according to Dealogic. As the WSJ further observed, Driving the urge to go big are the billions of dollars flowing into private-equity coffers as institutions such as pension funds seek higher returns in an era of low interest rates. Buyout firms have raised $314.8 billion in capital to invest in North America so far in 2021, pushing available cash earmarked for the region to a record $755.6 billion, according to data from Preqin. As the end of the year approaches, big buyouts are coming fast and furious. A week ago , private-equity firms Bain Capital and Hellman & Friedman LLC agreed to buy healthcare-technology company Athenahealth Inc. for $17 billion including debt. A week earlier, KKR and Global Infrastructure Partners LLC said they would buy data-center operator CyrusOne Inc. for nearly $12 billion. And the week before that, Advent International Corp. and Permira signed an $11.8 billion deal for cybersecurity-software firm McAfee Corp. The recent string of big LBOs followed the $30 billion-plus deal for medicalsupply company Medline Industries Inc. that H&F, Blackstone Inc. and Carlyle struck in June in the largest buyout since the 2007-08 financial crisis. Needless to say, these LBOs were not done on the cheap, as was the case, oh, 40 years ago. In the case of AthenaHealth, in fact, you have a typical instance of over-the-top “sloppy seconds”. That is, it was taken private by Veritas Capital and Elliott Management three years ago at a fulsome price of $5.7 billion, which is now being topped way up by Bain Capital and Hellman & Friedman LLC in the form of an LBO of an LBO. According to Fitch, AthenaHealth had EBITDA of about $800 million in 2020, which was offset by about $200 million of CapEx or more.That means that at the $17 billion deal value (total enterprise value or TEV), the transaction was being priced at 28X free cash flow to TEV. That’s insane under any circumstances, but when more than half of the purchase price consists of junk debt ($10 billion out of $17 billion), it’s flat out absurd. The reason it is happening is the Fed’s massive financial market distortion: Bain Capital and Hellman & Friedman are so flush with capital that it is burning a hole in their pocket, while the junk debt is notionally so “cheap” that it makes a Hail Mary plausible. But here’s the thing. This is a generic case: the Fed’s radical low interest rate policy is systematically driving the allocation of capital to less and less productive uses. And clearly private equity sponsored LBOs are the poster boy, owing to the inherent double whammy of misallocation described by the WSJ above. On the one hand, capital that should be going to corporate blue chip bonds is ending up on the margin in private equity pools as pension funds, insurance companies and other asset managers struggle to boost returns toward exaggerated benchmarks inherent in their liabilities. At the same time, private equity operators are engaged primarily in the systematic swap of equity for debt in LBO capital structures, such debt taking the form of soaring amounts of junk bonds and loans. The higher coupons on junk debt, in turn, attract more misallocation of capital in the debt markets, while at the same time grinding down the productivity and efficiency of the LBO issuers. That because the hidden truth of LBOs is that on the margin they are nothing more than a financial engineering device that strip-mines cash flows that would ordinarily go into CapEx, R&D, work-force training, marketing, customer development and operational efficiency investments and reallocates these flows to interest payments on onerous levels of the junk debt, instead. That’s the essence of private equity. The underlying false proposition is that 29-year old spread-sheet jockeys at private equity shops tweaking budgets downward for all of these “reinvestment” items—whether on the CapEx or OpEx side of the ledger—know more about these matters than the industry lifetime veterans who typically man either public companies, divested divisions or pre-buyout private companies—before they are treated to the alleged magic of being “LBO’d.” In fact, there is no magic to it, notwithstanding that some LBO’s generate fulsome returns to their private equity owners. But more often than not that’s a function of: Short-term EBITDA gains that are hiding severe underling competitive erosion owing to systematic under-investment; The steady rise of market PE multiples fueled by Fed policies, which policies have drastically inflated LBO “exit” values in the SPAC and IPO markets. So at the end of the day, the Fed’s egregious money-pumping is fueling a massively bloated LBO/junk bond complex that is systematically curtailing productive main street investment and therefore longer-term productivity and economic growth. And, of course, the proceeds of buyouts and junk bonds end up inflating the risk assets, which are mostly held at the tippy top of the economic ladder. And that’s a condition which has gotten far worse since the on-set of Greenspanian “wealth effects” policy in the late 1980s. As shown below, between Q4 1989 and Q2 2021: Top 1%: Share of financial assets rose from 21.0% to 29.2%; Bottom 50%: Share of financial assets fell from 7.2% to 5.6% Meanwhile, the good folks are WSJ saw fit to provide a parallel analysis that further knocks the Fed’s lowflation thesis into a cocked hat. In this case, the authors looked at the average domestic airline ticket price and found that it is about the same today as 25 years ago, $260 today versus $284 in 1996. And that’s before adjusting for cost inflation. So the question recurs: How is it possible that the airline industry hasn’t increased ticket prices in over two decades while its fuel and labor costs, among others, have been marching steadily higher? As the WSJ noted, It isn’t possible really. Most of us are paying a lot more to fly today, thanks to a combination of three covert price increases. First, airlines have unbundled services so that fliers pay extra for checking luggage, boarding early, selecting a seat, having a meal and so on. The charges for these services don’t show up on the ticket price, but they are substantial. Second, the airplane seat’s quality, as measured by its pitch, width, seat material and heft, has declined considerably, meaning customers are getting far less value for the ticket price. And third, many airlines have steadily eroded the value of frequentflier miles, increasing costs for today’s heavy fliers relative to those in 1996. Now, did the hedonics mavens at the BLS capture all these negative quality adjustment in airline ticket prices? They most decidedly did not. As shown below, the BLS says ticket prices have only risen by 5.6% during the same 24 year period or 0.23% per annum. But you wonder with jet fuel costs up by 294% during that period and airline wages higher by 75%—why aren’t they all bankrupt and liquidated? The answer, of course, is that the BLS numbers are a bunch of tommy rot. Adjusted for all the qualitative factors listed above, airline tickets are up by a hell of a lot more than 0.23% per year. Yet the fools in the Eccles Building keep pumping pro-inflation money— so that the private equity game of scalping main street cash flows thrives and middle class living standards continue to fall. CPI for Airline Fares, 1996-2021 Moreover, the backdoor prices increase embedded in airline fares are not unique. These practices are also common in other industries, whether it’s resort fees in hotels, cheaper raw materials in garments and appliances, or more-stringent restaurant and credit-card rewards programs. As the WSJ further queried, Consider the following comparison: Which one is cheaper, a 64-ounce container of mayonnaise at a warehouse club that costs $7.99, or a 48-ounce bottle of the same brand at a supermarket for $5.94? Most people will guess the warehouse club because of its low-price image. If you do the math, the price per ounce is roughly the same. But if you consider that the warehouse club requires a separate mandatory membership fee, the customer is actually paying more per ounce at the warehouse club. Known as two-part pricing, the membership fee camouflages the actual price paid by customers—and is behind the success of Costco,Amazon and likely your neighborhood gym. (A gym’s initiation fee, a landlord’s application or administrative fee, and an online ticket seller’s per-transaction processing fee all serve the same purpose.) Yet this is just a tiny sampling of the complexity of providing apples-to-apples pricing trends at the item level over time—to saying nothing of proper weighting of all the items that go into the index market basket. The implication is crystal clear. As per Powell’s belated recant on the “transitory” matter, the Fed doesn’t know where true inflation has been or have the slightest idea of where it is going. So the idea of inflation targeting against an arbitrary basket of goods and services embodied in the PCE deflator, much of which consists of “imputations” and wildly arbitrary hedonic adjustments, is just plan nuts. They only “inflation” measure that is in the proper remit of the Fed is monetary inflation—-something at least crudely measured by its own balance sheet. On that score the Fed is a infernal inflation machine like no other. And for want of doubt that the resulting massive asset inflation and rampant financial engineering on Wall Street that flows from Fed policies is wreaking havoc on the main street economy, note this insight from the always perceptive Bill Cohan: AT&T bought TimeWarner for a total of $108 billion, including debt assumed, and three years later agreed to spin it off it to Discovery for—what?— $43 billion in stock, cash and assumed debt. By my calculation, that’s a $65 billion destruction of value in three years. That’s not easy to do. He got that right. At the end of the day these massive accounting write-offs are just a proxy for the underlying economic destruction. As we said, a tale of two inflations. And neither of them imply anything good. Tyler Durden Fri, 12/03/2021 - 14:00.....»»

Category: blogSource: zerohedgeDec 3rd, 2021

The 5 best fighter jets that the US decided not to buy

US aviation history is littered with highly capable fighter jets that the military ultimately didn't buy. US Air Force US aviation history is littered with highly capable fighter jets that the military didn't buy. Officials have to balance the cost of the fighter against the number they need for the missions they have in mind. These are the five best fighters that didn't survive that evaluation. For every F-35 Joint Strike Fighter or F-22 Raptor that enters service, there's a long list of competitor fighters that didn't quite make the cut for one reason or another.Sometimes, these fighters aren't chosen because the jet Uncle Sam ultimately picked was simply the better competitor … but that's not always how these decisions are made.Like all military forces, the US military has to a balance capability against capacity. In other words, it doesn't matter if you have 300 of the most advanced fighters on the planet if you need 500 fighters to accomplish your mission, so defense officials have to balance the cost of the fighter's advanced capabilities against the capacity (or number) of fighters they need to make mission.A Northrop-McDonnell Douglas YF-23.US Air ForceIn this example, it might mean only purchasing 100 of those advanced fighters along with 400 cheaper, less capable platforms that can meet the mission requirements at hand.In fact, this specific example (with different topline figures) mirrors the justification the Air Force recently provided for purchasing new F-15EXs, despite its lack of stealth capabilities. In a perfect world, the Air Force would only fly stealth fighters, but when it comes to balancing capability against capacity, stealth jets are just too expensive to buy and operate for America to transition into a stealth-only force.Other times, fighter programs don't survive because the Defense Department doesn't have faith in the contractor to deliver what they promise, or because the capabilities offered by the aircraft aren't ones the nation has a pressing need for at the time.For whatever reason, these fighters didn't make it into production… but if they had, they each would have offered some incredible, and often unique, capabilities.5. F-16XL: The better F-16For more than 40 years, the F-16 Fighting Falcon has served as the backbone of the US Air Force's fighter fleet, but one year before the first F-16 entered service, the team behind its development had already developed a better F-16, in the F-16XL.The fighter was so capable, in fact, that it went from being nothing more than a technology demonstrator to serving as legitimate competition for the venerable F-15E in the Air Force's Advanced Tactical Fighter program.Ultimately, it would lose out to the F-15E based on production cost and redundancy of systems, but many still contend that the F-16XL was actually the better platform.While that assertion may be subject to debate, there's little debate as to whether the F-16XL could have been one of the most capable 4th-generation fighters on the planet. You can read our full feature on the F-16XL's development here.4. A-12 Avenger II: America's first real stealth fighterAn artist's impression of the McDonnell Douglas/General Dynamics A-12 Avenger II aircraft.US NavyOn January 13, 1988, a joint team from McDonnell Douglas and General Dynamics was awarded a development contract for what was to become the A-12 Avenger II, not to be confused with Lockheed's proposed A-12 of the 1960s, which sought to arm an SR-71 sibling jet with air-to-air weapon systems.Once completed, the Navy's A-12 would have been a flying wing-design reminiscent of Northrop Grumman's B-2 Spirit or forthcoming B-21 Raider, though much smaller.Although the A-12 Avenger II utilized a flying wing design, its overall shape differed from the triangular B-2 Spirit under development for the Air Force.The sharp triangular shape of the A-12 eventually earned it the nickname "the flying Dorito."For some time, it seemed as though the A-12 Avenger II program was going off without a hitch, but then, seemingly without warning, it was canceled by Defense Secretary (and future Vice President of the United States) Dick Cheney in January of 1991. You can read our full feature on the A-12 Avenger II's development here.3. YF-12: The biggest, fastest fighter in historyThe SR-71 Blackbird may be among the most iconic airframes of the Cold War, but this incredibly fast design wasn't always intended to serve only as a high-flying set of eyes.In fact, a variant of the SR-71's predecessor program, the faster and higher flying A-12, actually had a fighter-interceptor sibling in the form of the YF-12, and eventually (in theory at least) the F-12B.The biggest changes the YF-12 saw when compared to its A-12 sibling were at the front of the aircraft, where a second cockpit was added for a fire control officer tasked with managing the interceptor's air-to-air arsenal.The nose was also modified to accommodate the Hughes AN/ASG-18 fire-control radar that had been developed for use in the defunct XF-108 program.But the most important change between the A-12 and the YF-12 came in the four bays designed originally to house powerful cameras, film, and other reconnaissance equipment. One of the four bays was converted to house fire-control equipment, while the others were modified to house an internal payload of three Hughes AIM-47 Falcon air-to-air missiles.You can read our full feature on the YF-12's development here.2. ASF-14 Super Tomcat for the 21st centuryAn F-14D Tomcat over the Persian Gulf region.U.S. Air Force/Tech. Sgt. Rob TaborWhile the F-14D took on the title "Super Tomcat," the effort to modernize the F-14 began under the moniker "ST21," which, appropriately enough, stood for "Super Tomcat for the 21st century," and make no mistake — that's exactly what it could have been, with improved avionics, more power, more range, and more capability across the board.But while both the ST21 and AST21 were billed as re-manufacture programs for existing Tomcats along with new-build aircraft, Grumman's pitch to the Navy eventually included an entirely new-build Tomcat dubbed the ASF-14.The ASF-14 would have looked like its F-14 predecessors, but the similarities would have been largely skin deep.The ASF-14, with some 60,000 pounds of thrust and a better thrust-to-weight ratio than the F-14D, thrust vector control, massive internal fuel stores, huge payload capabilities, and incredible situational awareness provided by powerful onboard radar and a multitude of sensor pods, could have been a 4th-generation fighter with few — or maybe no — peers to this very day.You can read our full feature on the ASF-14 proposal here.1. YF-23: The Raptor meets its matchIn the decade and a half since it first entered service, the Lockheed Martin F-22 Raptor has been an air-superiority fighter without equal, but that hasn't always been the case. For a short time in the 1990s, the YF-22 that would lead to the operational F-22 may have met its match in the form of Northrop's YF-23.Two YF-23 prototypes were ultimately built. The first, dubbed the Black Widow II by those involved with the program, was all black and powered by a pair of Pratt & Whitney engines that allowed the jet to supercruise at Mach 1.43 during its first round of testing in 1990.The second YF-23, painted grey and dubbed "Grey Ghost," switched to General Electric YF120 engines, which offered improved supercruise capabilities, reaching Mach 1.6 in testing, just slipping past the YF-22's Mach 1.58.Ultimately, while the YF-23 could just about match the F-22's acrobatics, Lockheed won the perception war by demonstrating their fighter's capabilities in a more dynamic way. Lockheed test pilots showed off the aircraft's ability to utilize a high angle of attack, fired missiles, and executed maneuvers that placed more than 9Gs worth of force on the airframe.While the YF-23 could have done the same, Northrop didn't in the demonstration. Many contend that it was this salesmanship, rather than strictly platform capabilities, that helped the YF-22 stand out in the minds of defense officials. You can read our full feature on the YF-23's development here.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 1st, 2021

Bonhoeffer 3Q21 Commentary: Case Study – Millicom

Bonhoeffer Capital Management commentary for the third quarter ended September 2021, providing a case study for Millicom International Cellular SA (NASDAQ:TIGO). Q3 2021 hedge fund letters, conferences and more Dear Partner, The Bonhoeffer Fund returned -2.8% net of fees in the third quarter of 2021. In the same time period, the MSCI World ex-US, a […] Bonhoeffer Capital Management commentary for the third quarter ended September 2021, providing a case study for Millicom International Cellular SA (NASDAQ:TIGO). if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Dear Partner, The Bonhoeffer Fund returned -2.8% net of fees in the third quarter of 2021. In the same time period, the MSCI World ex-US, a broad-based index returned -0.7% and the DFA International Small Cap Value Fund, our closest benchmark, returned -2.5%. Year to date, the Bonhoeffer Fund has returned 22.9% net of fees. As of September 30, 2021, our securities have an average earnings/free cash flow yield of 14.3% and an average EV/EBITDA of 4.7. The DFA International Small Cap Value Fund had an average earnings yield of 11.1%. These multiples are lower than last quarter primarily due to increasing earnings and declining share prices. The difference between the portfolio’s market valuation and my estimate of intrinsic value is greater than 100%. I remain confident that the gap will close over time and the portfolio quality will continue to increase as we increase allocations to faster-growing firms. Bonhoeffer Fund Portfolio Overview Our investment universe has been extended beyond value-oriented special situations to include growthoriented firms using a value framework, including companies that generate growth through consolidation. There have been modest changes within the portfolio in the last quarter in line with our low historical turnover rates. We have sold Cambria Automotive which is in the process of being acquired and used the proceeds to increase our holdings in Asbury Automotive, Countryside Properties, and Millicom. As of September 30, 2021, our largest country exposures include: South Korea, United States, United Kingdom, Italy, South Africa, and Philippines. The largest industry exposures include: distribution, telecom/media, real estate/infrastructure, and consumer products. We added to some smaller positions within the portfolio and are investigating additional consolidation plays with modest valuations in industries that have nice returns on invested capital such as fiber rollouts, convenience stores, and IT services. Compound Mispricings (37% of Portfolio; Quarterly Average Performance -8%) Our Korean preferred stocks, the nonvoting share of Telecom Italia, Wilh. Wilhelmsen, and some HoldCos all feature characteristics of compound mispricings. The thesis for the closing of the voting, nonvoting, and holding company valuation gap includes evidence of better governance and liquidity. We are also looking for corporate actions such as spinoffs, sales, or holding company transactions and overall growth. Throughout the year, Net1 UEPS has been accumulating cash from the sale of its non-core assets including a Korean transaction processing network and its stake in a crypto bank. This cash, in addition to issuing some debt, was used to purchase Connect, a merchant transaction processor catering to small and medium businesses. This acquisition will complement its consumer fintech EasyPay transaction and ATM network and expand Net1 UEPS’s total addressable market to include small and midsized businesses and lead to profitability. The Korean preferred discounts in our portfolio are still large (25% to 73%). The trends of better governance and liquidity have reduced the discount in names like Samsung Electronics, and more preferred names trade at a premium to common shares. We continue to like the prospects for LG Corp preferred post LX Holdings spinoff from both a business and discount perspective. The current discount to NAV is 74% for the LG Corp preferred. In addition, this discount is based upon a base value of LG Corp with reasonable implied EV/EBITDA multiples of LG Corp subsidiaries of 4.7x for LG Electronics, 13.6x for LG Chemical (including LG’s EV battery division), and 16.7x for LG Household & Health Care. Public LBOs (37% of Portfolio; Quarterly Average Performance -1%) Our broadcast TV franchises, leasing, building products distributors, and roll-on/roll-off (RORO) shipping fall into this category. One trend I’ve noted in these firms is growth creation through acquisitions which provide synergies and operational leverage associated with vertical and horizontal consolidation and the subsequent repurchasing of shares with debt. The increased cash flow is used to pay the debt and the process is repeated. Millicom, this quarter’s case study, is a public LBO that has financed many of its investment opportunities with debt. The recently announced buyout of its Guatemalan JV partner illustrates this. The debt, when used in situations like this, has been paid down over time as Millicom generates a lot of free cash flow and can increase returns like leveraged rollups, as described below. Distribution Theme (41% of Portfolio; Quarterly Performance +3%) Our holdings in car and branded capital equipment dealerships, convenience stores, building product distributors, and capital equipment leasing firms all fall into the distribution theme. One of the main KPIs for dealerships and shopping is velocity or inventory turns. We own some of the highest-velocity dealerships in markets around the world. There have been challenges in some markets hit by COVID, like South Africa and Latin America; but there should be recovery now that vaccines have been approved and distributed. GS Retail, the second largest convenience store operator in Korea (with 14,600 convenience stores and 320 grocery stores), is the security we received for the buyout of GS Home Shopping. We have applied our growth methodology described in the last quarterly report. The following is a summary: The convenience store business is growing and consolidating worldwide. As a result of the acquisition, management is planning on using the younger customer data from GS Retail, the older customer data from GS Home Shopping, and the GS distribution network (42 logistics centers supporting convenience, grocery, and home shopping customers) to provide older and younger customers their products instore (convenience store) or next-day home delivery across Korea. Management expects 10% growth overall, composed of underlying convenience store growth of 4-5% and 5% from cross selling and digital commerce from the merger. Given the fixed costs in the convenience store network and distribution infrastructure, management expects cost synergies to generate net income margins of 5.0%. If these revenue and growth rates are realized, then a P/E closer to comparable convenience stores BGF Retail (Korea), Seven & I, and Alimentation Couche-Tard of 15-20x is not unreasonable. This range has significant upside from current P/E multiple of 5.9x and five-year forward P/E of 4.3x. Telecom/Transaction Processing Theme (36% of Portfolio; Quarterly Performance -2%) The increasing use of transaction processing in our firms’ markets and the rollout of 5G will provide growth opportunities. Given that most of these firms are holding companies and have multiple components of value (including real estate), the timeline for realization may be longer than for other firms. Telecom Italia continues to work with the Italian government and Fiber Corp to merge their telecommunications infrastructures together. Vivendi has called an emergency board meeting to ensure Telecom Italia will retain control of the combined telecommunication infrastructure after the merger. We view this action as a positive despite the decline in Telecom Italia’s share price. The updated sum-ofthe- parts analysis (as detailed in previous letters) implies an upside of 80–100%. In my opinion, much of the recent decline is due to concerns that Telecom Italia will give up control of the combined telecommunications infrastructure. Consumer Product Theme (10% of Portfolio; Quarterly Performance -7%) Our consumer product, tire, and beverage firms comprise this category. The defensive nature of these firms has led to lower-than-average performance due to the stronger performance from more recoverycorrelated names. One theme we have been examining is the increase in sales of adult products (tobacco, alcohol, and lottery) in convenience stores as other stores are removing these products from their product offerings. GS Retail is taking advantage of this trend in Korea. Real Estate/Construction Theme (23% of Portfolio; Quarterly Performance -3%) In my opinion, the pricing of our real estate holdings has been impacted by both a recession and the communist takeover in Hong Kong. The current cement and construction holdings (in US/Europe via BFS and Countryside and in Korea via Asia Cement) should do well as the world recovers from COVID shutdowns and governments start infrastructure programs. Asia Standard also declined during the quarter due to the concern over the decline in its Chinese real estate developer bond holdings. Asia Standard holds a large number of Chinese real estate developer bonds, including those of Evergrande and Kaisa. The Evergrande bonds have declined to about 20% of face value as of September 30 (they were at 40% of face value on July 31, 2021, the last market-to-market valuation date for Asia Standard’s bond portfolio) while the Kaisa bonds have declined to 85% of face value. I ran a stress test assuming a 25% decline in the bond portfolio from July 31, 2021. This is 2x the 13% decline in the portfolio from Evergrande and Kaisa bond prices between July 31, 2021, to September 30, 2021. The resulting NAV/share is $8.09 versus the $10.09 NAV as of July 31, 2021. The September 30 stock price of $0.85 is at a 91% discount to the stressed NAV and 92% to the July 31, 2021, NAV. Consolidation Frameworks In our Q1 letter, we described how we are examining growth opportunities associated with consolidation in fragmented industries. Growth from consolidation can be a resilient form of growth as it is dependent upon the availability of target firms and associated cost and revenue synergies versus overall market growth. When consolidation growth is combined with modest industry growth, some exciting growth can be realized. If the firms also exhibit operational leverage from economies of scale/scope, then the combined effect can be significant growth in earnings or free cash flows. The advantage of this type of growth is that it is realized over time and not recognized by the market in advance. This can be seen in the price charts of many of these firms moving from the lower left to the upper right over time as the growth is realized. Fragmented markets can have long runways associated with consolidation and economies of scale and scope which can lead to cash flow growth in excess of the market growth for many years. We try to identify these markets and firms that can ride the consolation wave over a long timeframe. Some of these firms have valuations reflecting some of the future growth and some have little to no premium reflecting future growth from consolidation. Currently, the internet (an innovation) is providing more consolidation via additional fragmentation of retail demand from offline, online, and omni-channel selling channels. An example is traditional auto dealers using an omni-channel sales approach and Carvana who is exclusively online. Bonhoeffer is looking for businesses that are adopting the innovation (internet distribution) which will enhance growth going forward but where it is not recognized by the market yet, as evidenced by the current stock price. Some analysts have developed useful frameworks to evaluate consolidation or serial acquirer situations. Scott Capital has developed a useful framework1 for categorizing consolidators, shown below: Scott has categorized these types of firms depending upon the level of target integration. Most of the firms we have been examining recently have been rollups (firms in the same industry) with scale-driven synergies and operational leverage. We also hold one platform (Wilh. Wilhelmsen) and one holding company (LG Corp). Another way to look at these firms is cross-sectionally based on total addressable market (TAM) size and integration of operations, as described by Canuck Analysts Substack2 below: Using this framework for our current areas of interest (rollups), I have been monitoring acquisition multiples in the car dealers (Asbury Automotive), local TV and radio firms (Gray Television), building supply distribution (Builders First Source), Latin American telecommunications (Millicom), cement firms (Asia Cement), equipment leasing firms (Ashtead), and network processing (Net 1 UEPS). In each of these segments, multiples have been modest. None of these firms have done international “diworsifying” deals to date and some have recently divested unrelated firms (Net 1 UEPS, Daelim Industrial and LG Corp). In each of these markets, the market share of the top firms is less than 10% except for GS Retail, where itself and FRB have a dominant share of 31% each, and Millicom, where it has a leading or number two position in eight of its nine markets where it competes. The small market shares provide a large runway for consolidation in its existing industry for years to come. Also, none have made international expansion into new markets outside their existing footprints. A return benchmark developed by the Canuck Analysts Substack3 is shown below: This framework, used in combination with calculating return on incremental capital, can illustrate where the invested capital returns can be modest. As an example, we will look at Asbury Automotive. Asbury’s returns on invested capital averaged 13%, and the return on equity averages 31% over the past 10 years plus an organic growth rate of 2 to 3% per year based upon US auto sales and maintenance service costs. This results in an ROIC plus ½ of annual organic growth of about 15%. The size of Asbury’s acquisitions has been about $1.4 billion over the past five years. Below is Asbury’s return on incremental invested capital over the past 10 years which has averaged in the upper teens during that period. For other serial acquirers like Ashtead, the organic growth rate is 6% and its ROICs over the past 10 years is 14% resulting in an ROIC plus ½ of annual organic growth of about 17%. The size of Ashtead’s acquisitions has been about $2.0 billion over the past five years. Conclusion As always, if you would like to discuss any of the philosophies or investments in deeper detail, then please do not hesitate to reach out. Until next quarter, thank you for your confidence in our work and have a safe and warm year-end holiday season. Warm Regards, Keith D. Smith, CFA Case Study: Millicom International Cellular SA (TIGO) Millicom International Cellular SA (NASDAQ:TIGO) provides mobile and broadband telecommunications services to consumers and businesses in Central America (Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama) and South America (Columbia, Bolivia, and Paraguay). TIGO provides legacy voice, wireless and data services, and fiber-based services to firms and individuals. Currently, TIGO has 43.1 million wireless subscribers, including 20.3 million 4G subscribers and 4.9 million home customers, including 8.4 million revenue generating units (RGUs) and 4.1 million broadband subscribers. In addition, TIGO’s network includes 5,400 points of presence and 300,000 business customers. TIGO is the number one or two broadband and wireless provider in eight of the nine markets in which TIGO competes. Recently, TIGO announced the purchase of its joint venture (JV) partner’s share of its JV in Guatemala for $2.2 billion. This transaction will be financed by debt and a shareholder friendly common stock rights offering. TIGO provides mobile money/banking services for five million customers in six countries. TIGO also has 10,000 towers and 13 data centers which can be sold and leased backed. TIGO is in the process of separating its towers and data centers (like Telefónica and América Móvil) and its mobile money/banking service to facilitate sales or investments by third parties. In 2017, TIGO sold 3,410 towers in Columbia, El Salvador, and Paraguay for $417 million or $122,287 per tower. Historically, TIGO operated in both Africa and Latin America. Over the past five years, TIGO has divested its African telecommunications assets and purchased additional assets in Latin America. TIGO’s network passes over 12.2 million homes (24% penetration of total homes) and covers 80% of mobile phones. The firm is in the midst of rolling out fiber to homes to provide broadband connectivity to Latin American customers. This rollout is being funded by cash flow from operations. The firm has been described as building a Charter Communications under a wireless Verizon umbrella. This is similar to our Consolidated Communications play with the additional benefit of having a wireless network and a mobile money business. In most countries in which TIGO operates, they have joint ventures or minority interest local partners. TIGO currently has an average high-speed internet (HSI) penetration rate (a take rate of HSI for homes passed) of about 39% across the countries it serves. This has increased by 1.4% since year-end 2020. To put this in context, most cable broadband penetrations are in the 50% plus range. In seven of the nine countries they serve, TIGO is the number one or two competitor in wireless and broadband in two-player markets (Guatemala, Honduras, El Salvador, Costa Rica, Panama, Bolivia, and Paraguay) and number three in two markets (Nicaragua and Costa Rica). The Q3 2021 mobile average revenue per RGU was $6.40 per month, and the broadband revenue per RGU was $28.10 per month. The largest shares of proportional EBITDA are from Guatemala (38%), Bolivia (11%), Paraguay (11%), Panama (10%), and Columbia (9%). In terms of regions, 70% of EBITDA is from Central America and 30% from South America. TIGO has developed a customer-focused culture at the corporate and country level using NPS as a metric which is collected and used as a management incentive to increase customer satisfaction. In addition, the countries that TIGO serves have stable currencies versus the US dollar. Since 2000, the EBITDA weighted average currency movements have been only 0.7% per year. Another positive trend is the movement of suppliers to US-based firms moving from China to a closer location with political and currency stability—Central America. If we look at the index of economic freedom for the Central American countries in which TIGO primarily operates, they have a moderately free ranking. For the subcategories most of interest to suppliers (tax burden and trade and business freedom), they all are ranked free or mostly free (highest ratings). Millicom and Fiber-optic Rollout The Latin American telecommunications services market is a local, fragmented market. Consolidation has occurred over the past 10 years amongst these local players, and the next generation of technology (fiber-optic connections) is being rolled out. Fiber-optic rollouts are generating organic growth and economies of scale with high incremental user profitability. Millicom has created economies of scale depending upon the geography of the acquired telecommunications firm. There is also the vertical integration across telecommunications services (like wireless, voice, data, cable, and hosting) in a given geography which can create additional economies of scale. With these rollouts, telecommunications companies compete with the local cable companies—and in some cases wireless providers—to provide HSI and other services to customers in their local footprints. Historically, telecommunications and cable firms have had poor customer service, as evidenced by low net promoter scores (NPSs). Keith Rabois, a founder of PayPal, has tweeted, “Formula for startup success: Find large highly fragmented industry w low NPS; vertically integrate a solution to simplify value product.” Part of simplifying the solution is providing multiple services and good customer service. The telecommunication services market fits this description. The new fiber rollouts are analogous to organic startups and thus can also be successful in the vertical integration into these markets. Business and Service Analysis One way to look at telecom business is to divide it into slowly growing (wireless) and quickly growing segments (HSI). The slower-growing wireless business is mature and is growing about 2% per year. The HSI business is growing at an 8% annual rate driven by fiber rollouts in TIGO’s countries. Millicom’s overall mix of wireless and HSI revenue is 33% HSI and 67% wireless, with 67% recurring subscription revenue (HSI and post-paid wireless) but varies by country. The current revenue growth rate is 4.3% and will increase to 5%, by the end of 10 years and the HSI/wireless mix approach 50%/50%. If we look at unit economics of the fiber rollout, it is also quite favorable. According to management, the estimated cost to pass each new customer is about $150; and the cost to connect a customer is $100. This is similar to the cost reported by Oi, a telecommunications firm rolling out a fiber-optic network in Brazil. If you have a final penetration rate of 45% using the current HSI monthly charge of $28/month, and a steady-state EBITDA margin of 45% (which management believes are both achievable at scale; the current margin is 40%), then the payback time is between six and seven years, and the unlevered IRR is 26% and a levered return of 52%. See Exhibit A for details. Latin America Broadband Telecommunications Market The broadband telecom business in Latin America is a fragmented market on an international basis and a concentrated market on a country-by-country basis. The market is a local market, so the smaller country markets only have a few competitors. This leads to less price competition for TIGO than in larger, more urban markets where there are more competitors. Gig speed internet and wireless are core infrastructure services that will be required in the internet service economy. Currently, broadband usage is growing at a 30-40%/year rate and is expected to increase going forward, as more bandwidthintensive applications are developed and rolled out over time. Since most of TIGO’s competition is from cable companies and incumbent telecom firms (that have low NPSs), TIGO has an opportunity to provide improved customer service versus the cable companies. This highlights the importance of the decentralized management system, incentivized and shareholding country managers, and including NPSs in management’s incentive compensation at the corporate and country levels. Of the other publicly traded Latin American telecommunications firms, TIGO has the largest potential to increase HSI organic revenue growth (by 8%) via a fiber rollout in its incumbent territories. This can be seen in the projections based upon the currently planned and financed fiber rollout shown in Exhibit B. The tilt toward the faster-growing Central American countries (which should get some opportunities to replace China as exporters to the US) versus the slower-growing South American countries will also add a nice tailwind. The countries TIGO services had an average real GDP growth rate of 3.2% per year over the past five years versus the overall 0.7% GDP growth rate for all of Latin America. Downside Protection TIGO has been reducing debt over the past few years with a current proportional debt/EBITDA of 2.7x and a goal of 2.0x. TIGO has a bond rating of Ba2 and yields 3.5% for five- to 10-year bonds. TIGO is in a defensive business—telecommunications services—which has a large amount of recurring revenue. HSI data revenues are increasing, while wireless revenues are increasing at a slower rate. See below for projections and Exhibit B for more detailed projections. Below is the proportional historical and projected revenue, EBITDA, and FCF since 2016 when the Guatemalan and Honduran JVs were deconsolidated. Management and Incentives One of the risks in emerging-markets investing is management, as they may have different incentives than those to which Western investors are accustomed. In this case, you have a management team based in the US (Miami) that has been historically influenced by the firm’s domicile, Sweden. TIGO is led by a former Liberty Latin America executive, Mauricio Ramos. He brings the Liberty Media playbook (a successful leveraged rollup strategy of cable-related properties and associated shareholder friendly corporate actions) to the markets that TIGO serves. TIGO is listed in Sweden and the United States and brings the corporate governance practices, capital allocation, and shareholder renumeration approaches to its operations throughout Latin America. In many countries, TIGO has local JV partners which provide TIGO with access to the local connections. TIGO has management incentives, including TIGO stock (with minimum levels for country managers) at both the corporate and country levels. The capital allocation is also done at both the corporate and country levels. This country-level capital allocation, incentives, and stock ownership is unusual for a Latin American company. The major categories of capital allocation for TIGO are: 1) purchasing minority interests from partners, 2) investing in the HSI broadband rollout described above, 3) selective acquisitions, 4) repurchasing shares, or 5) distributing dividends. Categories 1, 2, 3 and 4 have the most well-defined and highest returns and have been used by management in the past. In 2020, the CEO’s management compensation was 20% base salary and 80% incentive-based bonus, of which short-term incentive (STI) is 50% equity based (TIGO shares) and 50% cash based and long-term incentive (LTI) is 100% equity based (TIGO shares). The 2020 STI compensation was based on service revenue growth, EBITDA growth, operational cash flow growth, NPS, and other operational goals. The 2020 LTI compensation is based upon service and EBITDA growth and relative total shareholder return versus peers. The 2020 equity-based shares were issued at $38.09 per share, and the 2019 shares were issued at $42.70 per share. Overall, 700,000 shares were granted in 2020 (about 0.7% of shares outstanding per year). The management team owns 0.7% of TIGO common stock. TIGO has stock ownership guidelines of 5x the salary for the CEO, 3x for other senior managers, and 1x for country managers. Valuation The valuation of TIGO is an interesting exercise because its expected growth rate is accelerated by the fiber rollout and share buybacks described above. The implied growth using the Graham Formula, adjusted to today’s interest rates ((8.5 + 2g)*(4.4/AAA bond rate)) and the current P/E, is -1.8%, clearly implying that the market expects TIGO’s cash flows to continue to decline. Some benchmarks for growth are the projected sales growth rates of 4.5% per year (based upon the fiber rollout), an EBITDA growth rate of 6% per year, and an adjusted free cash flow growth of 12%. The question is whether this growth rate is sustainable over the next seven years. Given the key penetration, margin, investment, and timing assumptions in the projection model, I believe it is. TIGO is the only Latin American publicly traded telecom firm that has a rollout of this magnitude (adding 18% to revenue) scheduled over the next five to seven years. One firm that also has a Latin American footprint is Liberty Latin America (LILA). LILA has grown revenues and EBITDA at about 8% per year since 2015. The EBITDA margin is similar to TIGO, but historically the conversion to FCF from EBITDA was 50% less than TIGO—25% for TIGO and closer to 12% for LILA. The current FCF multiple of LILA is about 16x. If that multiple is applied to TIGO’s FCF, it yields a value of $74 per share, which I believe is a reasonable 12-month target. If, over the five to seven years, a 12% FCF growth is attained, then the earnings will be $8.19. Applying a 23.8x multiple to these earnings (implying a 4% growth rate over the subsequent seven years) means a value of $195 per share is obtained. Another way to look at valuation is on an enterprise basis. If we value TIGO on a forward EBITDA basis of 9x EBITDA (the current multiple of cable overbuilder WOW!), then the resulting value is $200 per share. If we consider both benchmarks, then a $200 price target is not unreasonable. See Exhibit B for details. This results in a five-year IRR of about 42%. In addition to the core assets, TIGO has about 10,000 towers (with an additional 2,000 under construction), 13 data centers, and a mobile banking division. According to management, these non-core assets are being prepared for either sale-leasebacks or investments by third parties. The estimated value of the towers and data centers is about $2 billion—$1.1 billion for the towers and $900 million for the data centers. The tower valuation of $1.4 billion is based upon an estimated value per tower of $120k based upon tower transaction values (TIGO’s historic transactions averaged $122k/tower and a 2021 Telxius transaction was $110k/tower, 9,300 Latin American towers for €900 million) and Telesites’s current valuation of $252k/tower times 12,000 towers. The data center valuation of $750 million is based upon an estimated value per data center of $58k which is based upon Latin American data center transactions (Anxel data centers were purchase by Equinix for $58k/center, three data centers for $175 million, and Telefónica data centers were purchased by Asterion for $58k/data center, nine data centers for €550 million) times 13 data center. Adding together the towers and data centers, the total valuation of these assets is $2.1 billion. The mobile banking division (TIGO Money) can be valued using a range of values based upon the value of African mobile banking firms and Latin American neobank firms. The mobile banking business had 5 million customers and 48 million transactions in 2020. If we use African mobile banking transactions (20 million Airtel customers were purchased for $2.6 billion and 46 million MTN customers were purchased for $5.0 billion), the average value per user is $121. If we use $121/customer times 5 million transactions, it implies a $600 million value for TIGO Money. If we use recent Latin American neobank transactions (40 million Nubank (Brazil) customers were purchased for a $30 billion valuation and 3.5 million Ualá (Argentina) customers were purchased for a $2.45 billion valuation), the average value per user is $750. If we use the midpoint of the African mobile banking and Latin American neobanks of $435, we get $435 times 5 million customers, and the resulting value is $2.2 billion. This is additional value of $2.7 to $4.2 billion ($27 to $42 per share) in addition to the core business value estimated above. So, for example, if you assume a 12% FCF growth rate and the value of non-core assets, you get a total value of $255 to $270 per share. Comparables Given the fiber rollout and the size of TIGO, the comparable firms include US and Italian small-cap telecommunications firms. One of the larger issues in Latin American firms versus developed markets is currency risk, however; as described above, TIGO’s currency risk is similar to developed markets’ risk. The following are the comparable firms in the US and Italian telecommunications markets. The smaller Italian telecom firms have smaller floats than the US firms and are majority controlled (70%+) by the original owners. There have been some private equity acquisitions in the US rural local exchange carriers (RLEC) space, namely Cincinnati Bell and Alaska Communications. These firms have a similar dynamic associated with their respective fiber rollouts, and private equity firms have invested in these firms for similar reasons that make CNSL attractive. Cincinnati Bell has been purchased by the private equity firm Macquarie Infrastructure Partners, which outbid an original offer from Brookfield Asset Management. Alaska Communications is also in the process of being purchased by ATN International and Freedom 3 Capital. The EV/EBITDA paid by these buyers was 6.5 to 6.9x EBITDA for assets with lower margins than the current price of TIGO (4.6x EBITDA). Benchmarking In comparison to other US and Italian firms, TIGO has above-average (but good) FCF ROE and a high EBITDA margin. With TIGO’s fiber rollout and customer take-up, the fixed asset turns and ROEs should increase. With these favorable operational metrics, TIGO has one of the lowest current and 2021 P/FCF ratios of either group. Risks The primary risks to achieving a target valuation of $72 per share for TIGO include: a lower-than-expected broadband penetration of fiber rollout communities; and a quicker-than-expected decline in the legacy telecom lines. Potential Upside/Catalysts The primary upsides/catalysts include: faster-than-expected penetration of uptake of broadband services; operational leverage due to economies of scale; and re-rating to reflect higher growth. Timeline/Investment Horizon The short-term target is $72, which is more than double today’s price. I think the investment thesis can play out over the next three to five years. By that time, TIGO’s net income and earnings should have appreciated by 75%, and the fair multiple could triple with a 4% increased growth rate. If that is the case, then TIGO will attain a 6.7x return to $235 over five years or 46% annualized. This is similar to a “Davis double,” where both underlying earnings increase along with the fair value multiple. Updated on Dec 1, 2021, 1:24 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 1st, 2021

China"s navy buildup really is remarkable, but it may create a new set of headaches for Beijing

The Chinese navy's rapid growth in size and capability is striking, but history shows that operating a big, modern navy isn't easy. Lamar Salter The rise of China's navy has truly been remarkable by any benchmark anyone could reasonably set. It is now numerically the world's largest fleet, and while the US Navy outweighs it, US ships are older. Maintaining those ships will be expensive, and history shows that building big fleets doesn't always pay off. The rise of China's navy (PLAN) has truly been remarkable by any benchmark anyone could reasonably set. Since the dawn of ironclad navies, the world has seen at least four major, massive naval expansions from negligible foundations.In the years before World War I, both the US Navy and the Imperial German Navy expanded from nearly negligible foundations to build world-challenging fleets. At the end of World War II, the Soviet Navy experienced a similar rapid expansion, rising to meet Moscow's aspirations to global power.In each case the world's existing naval powers were forced to take note of the upstarts, conducting their own naval buildups in order to counter the new kids on the block.The rise of China's navy: a short historyA Chinese destroyer pulls into Pearl Harbor, Hawaii in 2006.US Navy Mass Communication Specialist 3rd Class Ben A. GonzalesSince 2000 the People's Liberation Army Navy has expanded at a similarly spectacular rate.Twenty years ago the PLAN was a modest force focused mostly on coastal defense. It possessed a few major units (SSNs, modern destroyers) but rarely deployed these ships for any length of time at any distance from China's coasts.Most of the fleet was obsolete by contemporary standards, with even the newer ships suffering from a technological deficit relative to other naval powers.Things have changed. According to the recent Department of Defense report on Chinese military power, the PLAN currently operates some 355 warships, including 145 major surface combatants. In the last decade, it has added four aircraft-carrying warships in excess of 40,000 tons, several modern nuclear ballistic-missile submarines, many large destroyers, and many smaller vessels.By and large, these warships carry weapon systems that are internationally competitive, if not state of the art. The PLAN has become numerically the world's largest fleet, although in tonnage it is still outweighed by the US Navy.Chinese subs and ships in an international fleet review for the 60th anniversary of the PLA Navy's founding, in Shandong province, April 23, 2009.ReutersWhat is more remarkable than the size of the fleet is the rapidity of the expansion. Only a handful of the warships currently in service were constructed prior to 2000. Thirty-six of China's 40 destroyers have entered served this century, along with 38 of its 43 frigates.Although Liaoning (China's first aircraft carrier) was laid down in the 1990s, she and her sister were both completed in the last decade. By next year, three brand-new 40,000-ton amphibious assault ships will have entered service; by 2024, the first domestically designed aircraft carrier will enter service.In a word, the expansion of China's navy has been incredible.By contrast, the US Navy operates a much older fleet. Twenty-seven of the US Navy's seventy destroyers entered service in the last century, as did eight of the 11 aircraft carriers, all 21 of the fleet's cruisers, all of the fleet's SSBNs, and 28 of the 50 nuclear attack submarines.Of course, this comparison both obscures and illuminates; the USS Nimitz at 46 years old is a radically more capable platform than the Type 03 aircraft carrier that will enter service in 2024. The US fleet has received multiple upgrades to keep its combat systems modern, and the personnel have decades of experience with long-range, long-term naval deployments. To say that the PLAN is newer than the US Navy is not to say that it is better than the US Navy.The rise of China's navy: goals and challengesChinese aircraft carrier Liaoning during a drill in the Western Pacific, April 18, 2018.Stringer via ReutersThe modern PLAN is most emphatically not being built as an anti-access/area-denial force. It certainly has the capacity to fight under the umbrella of China's land-based air and land-based missile systems, and some of its warships are optimized for fighting in or near China's littoral.Its most advanced vessels, however, are clearly expeditionary in nature, including its aircraft carriers, large destroyers, and amphibious assault ships.But as the examples above indicate, building a big new fleet does not always work out. The Imperial German Navy scuttled itself at Scapa Flow after spending a war hemmed in by the British Royal Navy. The Soviet Navy built many impressive-looking ships that rotted away dockside after the collapse of the USSR.China will find, for example, that progressive modernization of its massive new fleet will become incredibly expensive over time. Indeed, even maintaining the fleet in any kind of fighting trim, with equipment in good order and crews well-trained, will be a monumentally expensive endeavor.Few countries can maintain massive fleets for an extended period of time, in no small part because ships represent huge capital investments that require enormous maintenance budgets and which technological changes can rapidly render obsolete.The other problem is that the construction of such a fleet cannot escape notice. The US Navy has yet to fully reorient itself around competition with China; many of its priorities remain legacies of the Cold War and the Wars on Terror.But the Republic of Korea Navy and the Japanese Maritime Self-Defense Force each rival the PLAN in modernity, if not in size, and exceed it in technological capacity. Australia's response to the PLAN has been to fundamentally reorient its technological and maritime capabilities.The rise of China's navy is a world-historic fact, but China's neighbors are rapidly developing the tools they need to manage this fact.Now a 1945 contributing editor, Dr. Robert Farley is a senior lecturer at the Patterson School at the University of Kentucky. Dr. Farley is the author of "Grounded: The Case for Abolishing the United States Air Force" (University Press of Kentucky, 2014), the "Battleship Book" (Wildside, 2016), and "Patents for Power: Intellectual Property Law and the Diffusion of Military Technology" (University of Chicago, 2020).Read the original article on Business Insider.....»»

Category: smallbizSource: nytDec 1st, 2021

Air Lease (AL) Delivers A321neo Aircraft to China Airlines

Air Lease (AL) delivers a fuel efficient A321neo jet to China Airlines. Air Lease Corporation’s AL management announced that it delivered a new Airbus A321-200neo aircraft on long-term lease to its loyal customer China Airlines. The transaction marks the first of six new A321-200neos to be delivered to China Airlines from AL’s orderbook with Airbus. The jets are powered by Pratt & Whitney PW1133G-JM engines.Additionally, the planes are highly fuel-efficient and flexible. The delivery of these jets by Air Lease should not only bolster China Airlines’ profitability but is also in line with its environmentally-friendly objectives. The A321 delivery is also significant as it marks the introduction of such aircraft to China Airlines’ fleet.Air Lease’s CEO John Plueger, visibly delighted by this development, stated that "ALC is honored to be the first to introduce the A321neo to our long-time customer China Airlines. The A321neo will become the backbone of China Airlines’ single-aisle fleet, providing fleet expansion and modernization, and elevation of their passenger experience to new levels. The greater fuel efficiency and operating flexibility of the A321neo will also maximize profitability and further China Airlines environmental sustainability goals."The above-mentioned news apart, Air Lease also grabbed attention recently when it placed a bulk order to Airbus for 111 jets, including 25 A220-330s.Zacks Rank & Stocks to ConsiderAir Lease currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some better-ranked stocks in the broader Zacks Transportation sector are Landstar System (LSTR) and C.H. Robinson Worldwide (CHRW).The long-term (three to five years) expected earnings per share growth rate for Landstar is pegged at 12%. LSTR benefits from a gradual recovery in the economy and freight-market conditions in the United States.LSTR’s top and the bottom line increased substantially in each quarter from the levels achieved in the third quarter of 2020, owing to robust revenues in the primary segment of truck transportation. The stock has rallied 29.6% in the past year. Landstar carries a Zacks Rank #2 (Buy) at present.The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW is benefiting from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with revenue growth reported across all the segments.CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved 2.5% up in the past year. C.H. Robinson currently carries a Zacks Rank of 2. Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative. See Zacks’ Hottest Tech IPOs Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Air Lease Corporation (AL): Free Stock Analysis Report C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report Landstar System, Inc. (LSTR): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 30th, 2021

Reasons to Add OGE Energy (OGE) to Your Portfolio Right Now

OGE Energy (OGE) makes a strong case for investment, given its estimates revision, strong earnings surprise history, systematic capital expenditures and ongoing expansion of the customer base. OGE Energy’s OGE regular investments to add clean power generation assets to its generation portfolio, strong economic growth and load growth as well as customer additions make it a solid choice for investment in the utility space.Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Growth ProjectionsThe Zacks Consensus Estimate for 2021 earnings per share has moved up 0.9% in the past 60 days. The Zacks Consensus Estimate for earnings for 2021 and 2022 indicates year-over-year growth of 5.8% and 0.2%, respectively.Return on Equity & Dividend YieldReturn on Equity (ROE) indicates how efficiently OGE Energy is utilizing shareholders’ funds to generate returns. At present, OGE Energy’s ROE is 14.55%, higher than the industry average of 9.26%.Currently, OGE Energy has a dividend yield of 4.75% compared with the industry’s 3.39%.Surprise History and Earnings GrowthOGE Energy delivered an average earnings surprise of 24.1% in the last four quarters.OGE Energy’s long-term (three to five years) earnings growth is projected at 4.5%.Customer & Load GrowthOGE Energy’s is gaining from strong economic conditions in its service territories. OGE is expected to register 2.2% year-over-year load growth in 2021 and strong customer growth. OGE Energy reported a 1.3% increase in customers in third-quarter 2021 from 2020 levels. Strong load trends are expected to continue in 2022, driven by an increase in residential and commercial customers of OGE. Regular Investments & Emission ReductionOGE Energy plans to spend around $4.2 billion between 2021 and 2025. Out of the planned investment, 75% will be directed toward low-risk transmission and distribution operations. For 2021, the company has allocated $750 million, which includes $670 million for distribution, solar panel subscription, generation and grid advancement activities, and $80 million for transmission projects.OGE Energy has plans to lower carbon dioxide emissions to 50% from 2005 levels by 2030. To achieve this target, the company has converted two coal-fired generating units at the Muskogee Station to natural gas, among other measures. OGE is also deploying more renewable energy sources to lower emissions.Price PerformanceOver the past 12 months, OGE Energy’s shares have returned 12.1% compared with the industry’s 5.5% growth.Image Source: Zacks Investment ResearchOther Stocks to ConsiderOther top-ranked stocks in the same sector include Otter Tail Corporation OTTR, California Water Service Group CWT and Chesapeake Utilities CPK, each holding a Zacks Rank #2.Otter Tail, California Water Service, and Chesapeake Utilities delivered an average earnings surprise of 27.9%, 10.8%, and 12.6%, respectively, in the last four quarters.The Zacks Consensus Estimate for 2021 earnings per share of Otter Tail, California Water Service, and Chesapeake Utilities has moved up 0.8%, 7.6%, and 3.5%, respectively, in the past 60 days.Year to date, shares of Otter Tail, California Water Service, and Chesapeake Utilities have returned 60.9%, 18.2%, and 22%, respectively, compared with the Zacks Utility Sector’s 5% growth. Investor Alert: Legal Marijuana Looking for big gains? Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0% You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report OGE Energy Corporation (OGE): Free Stock Analysis Report Chesapeake Utilities Corporation (CPK): Free Stock Analysis Report California Water Service Group (CWT): Free Stock Analysis Report Otter Tail Corporation (OTTR): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 29th, 2021