Gözen Holding & Avolon | Lufthansa Systems | Gogo | Saudia Arabia & Future Aviation Forum | China Airlines Selects Inmarsat & SitaOnair | Alaska Airlines Group Investor Day



Avolon, the international aircraft leasing company, announces that Gözen Holding, one of Turkey’s leading aviation conglomerates and owner of Freebird Airlines, has committed to purchase or lease up to 50 VX4 eVTOL aircraft from Avolon, with the option to purchase or lease up to 50 additional aircraft. As a result of this announcement, Avolon has now placed its entire 500 VX4 eVTOL aircraft orderbook, with the orderbook being oversubscribed by 50 options.

As part of the agreement, Avolon, through its investment and innovation affiliate Avolon-e, has formed a strategic partnership with Gözen Holding to commercialise zero-emissions eVTOL travel and develop an industry leading urban air mobility (‘UAM’) platform in Turkey. Avolon and Gözen Holding will collaborate in a Working Group to identify and target local partners, research potential market opportunities, as well as infrastructure and certification requirements for UAM. The partnership will allow Avolon to leverage Gözen Holding’s expertise in airline operations, pilot training, airport handling and security, airline representation as well as digital platforms, while Gözen Holding will benefit from Avolon’s deep industry expertise and global platform of UAM Working Groups, which are active in Brazil (with GOL), Greenland (with Air Greenland), Japan (with Japan Airlines) and Southeast Asia (with AirAsia).

Dómhnal Slattery, CEO of Avolon commented: “Today marks an important milestone on our eVTOL journey, as we have now fully placed our VX4 orderbook with some of the leading international airlines and aviation companies all over the world. The opportunities to deploy the VX4 are enormous and, as is evident with our placement progress to date, zero emissions eVTOL air travel will reshape the short-haul travel market. Our partnership with Gözen Holding will create a pioneer in UAM in Turkey, bringing sustainable air travel to the region.

The strong demand for our VX4 orderbook and for zero emissions travel, confirms our view that demand for eVTOL aircraft would always outstrip supply. As a result, we will continue working with other partners that want to purchase or lease the VX4 in order to fully size the potential market and demand for this aircraft.”

Mekin Gözen, CEO of Gözen Holding, commented: “We are delighted to announce our partnership and VX4 order with Avolon. As an integral part of the Turkish aviation industry, we feel it is incumbent upon us to be at the forefront of the sustainability movement and that is why we identified Avolon, and Vertical’s VX4, as the zero-emissions eVTOL aircraft that will revolutionise air travel. With over 15 million people living in Istanbul, the city is consistently faced with congestion which hinders both the cities’ development and attractiveness as a tourist and business location. We strongly believe that the deployment of the VX4 will dramatically reshape Istanbul and the rest of Turkey. Our partnership with Avolon will see us create an eVTOL ecosystem in the country and is the first step in delivering sustainable air travel to the region, position it as a global leader.”

Stephen Fitzpatrick, Founder and CEO of Vertical commented: “We are delighted that Turkey has been added to the global destinations where the VX4 will fly. We look forward to welcoming Gözen into the Vertical family and continue to celebrate our growing partnership with Avolon.”


Lufthansa Systems announced the launch of NetLine/Crew Qualification and Training Management. The module provides an accurate overview of crew member and ground staff training planning and qualifications on a single platform. NetLine/Crew Qualification and Training Management handles airline employees and their qualification, recurrency and training needs.

“Airlines face the challenge of maintaining valid crew members and ground staff licenses and qualifications. NetLine/Crew Qualification and Training Management’s methodical structure gives an ideal overview. Curricula can be customized to the airline’s need and training records can be accessed easily”, explained Somaya Jouini, Product Owner NetLine/Crew Qualification and Training Management. “Expired trainings are quickly identified so that staff can be trained and retrained in time.”

NetLine/Crew Qualification and Training Management is offered as a web-based solution and with a state-of-the-art user interface. “With the launch of NetLine/Crew Qualification and Training Management, we have taken a big step towards the realignment of NetLine/Crew. We have implemented an intuitive user interface and used the latest software architecture. Our airline customers benefit from the high-speed-implementation and continuous delivery of newly developed functions to maintain training and qualification of their crews”, added Philipp Kemmer, Head of Product Development NetLine/Crew.

NetLine/Crew covers crew management business processes and supports an airline’s crew management team with 24/7 operations support and industry expertise. NetLine/Crew comprises system components for the various crew management domains. This includes the communication and information exchange with flying personnel with dedicated applications for crew members.


Gogo Inc., one of the world’s largest providers of broadband connectivity services for the business aviation market, announced that Sergio Aguirre will be promoted to President and Chief Operating Officer of Gogo Inc. effective April 1. Aguirre, who previously served as President of Gogo’s Business Aviation Division, will continue to report directly to Gogo Chairman and Chief Executive Officer Oakleigh Thorne.

“Sergio’s promotion reflects the leadership role he plays within Gogo’s new operating structure as a pure-play business aviation company,” Thorne said. “With more than 30 years of aviation industry experience, including 15 years with Gogo, Sergio’s unique expertise and leadership is critical in advancing our strategic initiatives and building shareholder value.”

Gogo also announced succession plans for Executive Vice President and General Counsel, Margee Elias, and Executive Vice President and Chief Financial Officer, Barry Rowan, who have separately announced plans to retire.

Elias intends to retire by the end of 2022, after 15 years at Gogo. The Company has initiated a search to identify her successor with the assistance of a leading executive search firm.

Rowan intends to retire in 2023, shortly after Gogo announces its full-year 2022 results. Jessica Betjemann, Gogo’s current Senior Vice President of Finance, Chief Accounting Officer and Treasurer, will succeed Rowan.

“Margee and Barry’s leadership and guidance have been integral to every facet of Gogo’s transformation, including supporting the sale of Gogo’s Commercial Aviation business in 2020 and our comprehensive refinancing in April 2021, which strengthened our financial position and created a strong foundation for growth,” Thorne said.

“We are fortunate to have a highly qualified successor for Barry in Jessi and I have no doubt we will identify a similarly highly qualified successor for Margee,” he said. “I look forward to working with all of them on this orderly transition.”


Global aviation leaders will unite in Riyadh for Saudi Arabia’s first-ever Future Aviation Forum. The two-day event, happening May 9th, will unite leaders from the public and business sectors, international CEOs, and regulators to shape the evolution of international air travel and drive forward solutions in a post-pandemic world.

Hosted by the General Authority of Civil Aviation (GACA), the Forum will feature more than 120 speakers, with over 2,000 attendees and representatives from every continent expected to attend. Delegates are invited to attend 40 sessions, focusing on three core thematic pillars: passenger experience, sustainability, and business recovery post-Covid.

“The Future Aviation Forum will be a pivotal moment for the global aviation sector. We will bring together the brightest minds from around the world to forge solutions for how the sector can recover from the Covid-19 pandemic, transform the passenger experience, and invest in innovations that will lower carbon emissions and reduce environmental impact,” said Saleh bin Nasser Al-Jasser, Saudi Arabia’s Minister of Transport and Logistics.

Saudi Arabia’s transport and logistics sector, a major pillar of the Vision 2030 economic transformation plan, is undergoing rapid development. The Kingdom aims to generate 356 billion SAR – or just under $100 billion USD – in investment into its aviation sector by 2030 to make Saudi Arabia a global aviation hub. GACA’s National Aviation Sector Strategy (NASS) aims to increase air connectivity to 250 destinations, reaching 330 million passengers, and to double air cargo capacity to 4.5 million tons. The Kingdom also has plans to launch a new national airline to complement its existing national carriers, Saudia, Flynas and Flyadeal, and to build a major new international airport in Riyadh, in addition to eight new regional airports.

GACA is coordinating closely with the International Civil Aviation Organization (ICAO), the Montreal-based UN agency responsible for fostering the planning and development of the air transport industry globally. ICAO Council President Salvatore Sciacchitano said the Forum comes at a critical time for the global aviation sector.

“Global cooperation across the aviation sector is needed now more than ever. We must work together to build greater resilience to future health crises, to rethink and modernize every step of the passenger journey, and to ensure the sustainability of aviation in the face of the climate emergency. I look forward to the coming together of the industry’s top leaders in Riyadh at the Future Aviation Forum, where we can collaborate to drive the ambition, innovation and policymaking needed to ensure a promising future for the industry,” said Sciacchitano.

As part of the broader transformation of its aviation sector, Saudi Arabia is also moving towards corporatizing its airports. Earlier this year, GACA and Matarat Holding Company announced the completion of an institutional transformation of 25 of the Kingdom’s airports. This included the creation of the Airports Cluster 2 Company, which will manage and operate 22 airports, bringing oversight for construction, operation, and management under one roof. The goal is to improve service, integrate international best practices in airport management and increase competitiveness. Investment and commercial opportunities in the sector, including airports, freight, catering, maintenance and ground services, will be opened to local and foreign investors in the near future.

“The scale of opportunity for the aviation world in Saudi Arabia is unprecedented. The Future Aviation Forum is an opportunity to participate from the outset in Saudi Arabia’s rapid emergence as the Middle East’s preeminent aviation hub,” said GACA President Abdulaziz Al-Duailej.

Al-Duailej said he hopes the Future Aviation Forum will facilitate business deals and mobilize the investment needed to propel the industry into the future.

“The Forum will drive business deals and mobilize funding for innovation to make the industry economically and environmentally sustainable. We invite key players from the aviation world to Saudi Arabia so that together we can drive solutions that will allow the global sector to thrive in the years to come.”


China Airlines’ first Airbus A321neo aircraft entered commercial service on Sunday 27 March, 2022, offering an enhanced onboard experience that includes Inmarsat’s high-speed GX Aviation inflight Wi-Fi, allowing passengers to seamlessly browse the internet, stream video and audio, shop online and catch-up with work, all from the comfort of their seat. GX Aviation proved a hit during the inaugural flight from Taoyuan to Hong Kong, with access provided via the Internet ONAIR solution from Inmarsat’s partner SITA, which has also been selected as connectivity service provider by the Taiwan national carrier.

China Airlines has ordered a total of 25 Airbus A321neos as part of a narrow-body fleet replacement program that aims to transform its onboard experience, support its regional network expansion and meet long-term growth in passenger volumes. All of the aircraft will be equipped with Inmarsat’s GX Aviation and SITA’s Internet ONAIR, alongside other new cabin features such as fully-flat seats in Premium Business Class, the latest inflight entertainment system, and 4K high-solution displays.

GX Aviation will enable the airline to meet soaring demand for inflight connectivity as passengers return to the skies following the Covid-19 pandemic. Inmarsat‘s latest Passenger Confidence Tracker, the largest global survey of its kind since the pandemic began, found that 41% of the 10,000+ respondents believe having Wi-Fi on flights is even more important now than before Covid-19, allowing them to stay connected with friends and family, and supporting a touch-free environment.

Niels Steenstrup, Inmarsat Aviation’s Senior Vice President of Inflight Connectivity Business, said “We are delighted to welcome China Airlines as our latest GX Aviation inflight broadband customer, especially at a time when the carrier is welcoming millions of its passengers back to the skies. The fact that this is our second new airline customer announcement with SITA in recent months is testament to our successful partnership and also reinforces strong demand for our market-leading connectivity, despite the challenges that Covid-19 has presented to the aviation industry over the past two years.”

Katrina Korzenowski, Asia Pacific Vice President at SITA FOR AIRCRAFT, added “Providing a digital and touchless onboard experience will be the key to increasing passenger confidence as air travel recovers from the Covid-19 pandemic. Our Internet ONAIR technology, coupled with Inmarsat’s GX Aviation connectivity, offers China Airlines the perfect blueprint for a world-class inflight broadband offering onboard its Airbus A321neo aircraft and we’re proud to be working together to achieve this. It also means that SITA is now providing a full suite of services, from cockpit to cabin, to China Airlines.”

GX Aviation is powered by Global Xpress (GX). The GX network currently consists of five Ka-band satellites and will be further enhanced with the addition of seven more satellites as part of Inmarsat’s fully-funded technology roadmap. This includes two Inmarsat-6s, the most sophisticated commercial communications satellites ever built, both of which are scheduled to enter service next year. They will be followed by three additional satellites in geostationary orbit – adding speed, capacity and resilience – and two in highly elliptical orbit, enabling the world’s only commercial mobile broadband service for aircraft flying in higher elevations and across the Arctic.


ALK is already doing many things right and their first Investor Day in 3+ years did not need any major resets or pivots. We finally got more detail on the $400 mm of new revenue initiatives that have been teased for some time. Mgmt. sounded very confident about delivering those and their LT goals.

ALK’s first Investor Day in almost 3.5 years saw a mix of qualitative and quantitative goals outlined. Mgmt’s track record in recent years and the reasonably straight-forward nature of the revenue initiatives means there will not be too much doubt/concern on the path ahead. While some might think the LT targets were a touch conservative, we agree with mgmt. that the world remains an uncertain place and we would rather ALK beat if things get better than set themselves an unreasonable bar.

Key takeaways from ALK’s Investor Day:

  1. Updated 1Q and FY22 Guidance. Mgmt. raised 1Q revenue guidance (now expecting total revenue down ~11-12% vs. down ~14-17% prior) and updated FY22 guidance to reflect slightly reduced levels of flying in the first half of the year and increased costs. Mgmt. now expects 1Q ASMs to be down ~11-12% (vs. down ~10-13% prior) and load factors to between ~76-78% (from 71-74% prior). Costs were also in focus as 1Q CASMex is now expected to be +18-19% (vs. up ~15-18% prior) and FY22 was guided to +3-5% (vs. +1-3% prior), with economic fuel cost per gallon expected to be ~$2.62/gallon. Additionally, mgmt.’s newly initiated full-year adj. pre-tax margin of 6-9% assumes an economic fuel price per gallon of $2.80. FY22 capex expectations remain between $1.6-1.7 bn. Demand has returned to above 2019 levels, yields have shown significant strength and pre-tax profitability is expected in March and the remainder of the year.
  2. New LT targets laid out. Mgmt. outlined multiple long-term targets including a pre-tax margin of 11-13% (and above peers), ROIC of at least 200+ bps above the cost of capital, <1.5x net debt to EBITDAR, and a liquidity target of 15-25% of revenues. Mgmt. also aims to fund over 80% of the pension on a PBO basis, restore FCF conversion to 25-75% of net income, and return 50-100% of FCF to shareholders. While there was no firm timeline given around the long-term pre-tax margin target of 11-13%, mgmt. has a history of being conservative and noted the target is reflective of an uncertain operating environment and that in a better environment they believe they could even be above that range. According to mgmt., ALK remains committed to outperforming industry margins and re-implementing shareholder returns.
  3. We finally got more detail on the new revenue initiatives. Mgmt. had initially flagged $300 mm of revenue initiatives when they first floated the idea in the second quarter but surprised us with $400 mm instead. These include $70 mm from fleet upgauging, $135 mm from network and alliances, and $195 mm from loyalty and product. The fleet gains will be led by ALK’s conversion to a single aircraft fleet by type (going down to Boeing 737 Max-8/9/10 for narrow-body and E175 for RJs). Each 737-9 vs. outgoing A320 will give ALK 19% more seats, 33% more first-class seats, 14% lower cost per seat and 25% better emissions per seat. However, mgmt. was clear that they will continue to operate the fleet, gauge and aircraft type to maximize revenues and cost efficiencies. The network and alliances opportunity was largely related to the West Coast Alliance with AAL and the Oneworld partnership. Mgmt. expects to achieve 4-8% average annual ASM growth through 2025 (70% from the Pacific Northwest and 30% from California). 70% of the growth will come from higher frequency, 15% from higher gauge, 5% from stage length and only 10% will come from new markets – which should make this a relatively low risk endeavor. The AAL/Oneworld partnership also helps with mix, particularly by feeding in international customers in SEA, SFO and LAX. Lastly, ALK announced that they had extended their co-branded credit card agreement with Bank of America to 2030 which will result in 30% increase in total bank compensation from 2021 to 2022.
  4. Mgmt.’s confidence in the targets really stood out. In addition to the details on the new revenue initiatives, we were struck by management’s confidence in their ability to hit these targets (“you can take [these] to the bank”). Mgmt. explained that many of these initiatives have already begun, are reasonably straight forward, are within their control and carry high visibility. There are not many idiosyncratic growth stories with this level of visibility and confidence, anywhere in cyclicals right now (maybe outside of some peers undertaking similar initiatives).
  5. Pandemic leadership may culminate in post-pandemic cash return leadership as well. Mgmt. highlighted that during and coming out of the pandemic, ALK was the 1st amongst peers to zero cash burn, positive CFO ex PSP, to return to profitability, and to return to pre-COVID leverage levels without issuing equity. When asked if they could be the first to return to post-pandemic shareholder return (as teased on the 3Q call – see more here), mgmt. noted that they were not permitted to start cash return until September 2022, but believe that they are approaching a good financial position to do something “relatively soon”. In our view, this commentary makes it seem highly likely that we could see cash return resume shortly after that date, which would be a momentous development for the industry.

Remain OW. ALK’s strong operating and balance sheet performance during the pandemic (on a relative basis) has made the stock somewhat of a market darling and a consensus long during the pandemic (ALK is the best performing stock in our Airlines coverage over the LTM). The LCCs have been our preferred picks within the rising US airline tide due to their idiosyncratic stories that should allow them to outperform the rising tide and ALK clearly laid out their growth cards today. There is perhaps less noise and more visibility around this story than peers, but investor positioning is favorable as well, which sets them a slightly higher bar. The only question is whether they can fill their new upgauged aircraft at the yields that they need to, esp. when many peers are going down the same path. We are confident that they can as long as the post-pandemic pent up demand lasts, which could be years if macro/the US consumer holds up (or only a few quarters if inflation continues to pressure the US consumer). This also makes this possibly the only element of the new revenue initiatives that is outside of mgmt’s control. All in, we continue to really like the story, the mgmt. team, the valuation and believe that ALK will be a cyclical and structural winner in the coming quarters. Following the Investor Day, our FY22/23/24 EPS moves to $3.91/$7.32/$9.50 from $3.54/$7.52/$10.21 due to higher fuel prices and our PT moves to $75 from $78.

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