Chicago | August 10, 2020–  Gogo (NASDAQ: GOGO), the leading global provider of broadband connectivity products and services for aviation, today announced its financial results for the quarter ended June 30, 2020.

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Chicago | July 29, 2020–Boeing President and CEO Dave Calhoun issued the following letter to employees today addressing aerospace market realities:

Team,

These past few months have been unlike anything we’ve seen. The pandemic’s effect on our communities and industry is ongoing. And the challenges we face as a company are still unfolding.

As cases continue to rise in areas around the globe, health and safety remain a top priority. My thanks go to everyone who is supporting our safety efforts, wearing face coverings and upholding our shared accountability for keeping one another safe. All those affected directly by COVID-19 also have my sympathies.

The reality is the pandemic’s impact on the aviation sector continues to be severe. Though some fliers are returning slowly to the air, their numbers remain far lower than 2019, with airline revenues likewise reduced. This pressure on our commercial customers means they are delaying jet purchases, slowing deliveries, deferring elective maintenance, retiring older aircraft and reducing spend — all of which affects our business and, ultimately, our bottom line. While there have been some encouraging signs, we estimate it will take around three years to return to 2019 passenger levels.

That’s why we’ve been taking decisive actions. To bolster our near-term liquidity, we suspended our dividend, terminated our share repurchasing program, reduced discretionary spending and overhead costs, and issued $25 billion in new debt.

While these steps help us navigate the pandemic, they don’t change the fact that the commercial marketplace is different, and we must change with it. To align to a smaller market, we lowered commercial production rates and took tough workforce actions throughout the quarter.

Unfortunately, it’s become clear that we need to make further adjustments based on the prolonged impact of COVID-19.

The changes include further lowering our commercial airplane production rates:

– We will have a slower ramp-up in 737 production than previously planned, with a gradual increase to 31 per month by the beginning of 2022.

– We will reduce the combined 777/777X production rate to two per month in 2021, which is one unit lower per month than we announced last quarter.

– We will further reduce 787 production to six per month in 2021. This is an adjustment down from the reduction we announced last quarter to 10 per month currently and seven per month by 2022. With this lower rate profile, we will also need to evaluate the most efficient way to produce the 787, including studying the feasibility of consolidating production in one location. We will share more with you following our study.

– While our 767 and 747 rates remain unchanged, in light of the current market dynamics and outlook, we’ll complete production of the iconic 747 in 2022. Our customer commitment does not end at delivery, and we’ll continue to support 747 operations and sustainment well into the future.

The work you’ve done on these programs has been tremendous. I have been impressed during every visit to our production facilities. These production rate changes are not a reflection on your work or our capability. The market simply won’t support higher output levels at this time, and we need to adapt accordingly.

As you know, we previously announced a net 10% workforce reduction in 2020 through a combination of voluntary layoffs, attrition and involuntary layoffs (ILOs) to align to a smaller market. The first wave of associates affected by ILOs received notification in May, and we continue to conduct smaller, phased workforce reductions to reach this target. Managers are communicating the latest wave of those reductions beginning today.

Regretfully, the prolonged impact of COVID-19 causing further reductions in our production rates and lower demand for commercial services means we’ll have to further assess the size of our workforce. This is difficult news, and I know it adds uncertainty during an already challenging time. We will try to limit the impact on our people as much as possible going forward. And as always, we will communicate openly, honestly and transparently with you.

The diversity of our portfolio and our government services, defense and space programs provide some stability in the near term as we take these tough but necessary steps. And we’ll continue working to meet our commitments and deliver on our priorities.

As we look to the future, we also are focused on not just adapting and recovering but also emerging stronger and more resilient. That includes proactively reviewing every aspect of our company to identify opportunities to improve, align to our new market and strengthen our culture. We are looking holistically at our infrastructure footprint, our overhead and organizational structure, our portfolio and investments, our supply chain health and stability, and our ability to drive operational excellence and a keen focus on safety in everything we do.

And while we’re facing challenges, it’s important to remember the good work and innovation underway across our company. This is absolutely necessary for our future. Aerospace has always proven to be resilient — and so has Boeing.

Thank you for facing these challenges with me. I could not ask for a better team.

Dave

Geneva, Switzerland | June 9, 2020–The International Air Transport Association (IATA) released its financial outlook for the global air transport industry showing that airlines are expected to lose $84.3 billion in 2020 for a net profit margin of -20.1%. Revenues will fall 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion.

“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that’s a loss of $84.3 billion. It means that—based on an estimate of 2.2 billion passengers this year—airlines will lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash,” said Alexandre de Juniac, IATA’s Director General and CEO.

“Provided there is not a second and more damaging wave of COVID-19, the worst of the collapse in traffic is likely behind us. A key to the recovery is universal implementation of the re-start measures agreed through the International Civil Aviation Organization (ICAO) to keep passengers and crew safe. And, with the help of effective contact tracing, these measures should give governments the confidence to open borders without quarantine measures. That’s an important part of the economic recovery because about 10% of the world’s GDP is from tourism and much of that depends on air travel. Getting people safely flying again will be a powerful economic boost,” said de Juniac.

2020 Main Forecast Drivers:

Passenger demand evaporated as international borders closed and countries locked down to prevent the spread of the virus. This is the biggest driver of industry losses. At the low point in April, global air travel was roughly 95% below 2019 levels. There are indications that traffic is slowly improving. Nonetheless, traffic levels (in Revenue Passenger Kilometer) for 2020 are expected to fall by 54.7% compared to 2019. Passenger numbers will roughly halve to 2.25 billion, approximately equal to 2006 levels. Capacity, however, cannot be adjusted quickly enough with a 40.4% decline expected for the year.

Passenger revenues are expected to fall to $241 billion (down from $612 billion in 2019). This is greater than the fall in demand, reflecting an expected 18% fall in passenger yields as airlines try to encourage people to fly again through price stimulation. Load factors are expected to average 62.7% for 2020, some 20 percentage points below the record high of 82.5% achieved in 2019.

Costs are not falling as fast as demandTotal expenses of $517 billion are 34.9% below 2019 levels but revenues will see a 50% drop. Non-fuel unit costs will rise sharply by 14.1%, as fixed costs are spread over fewer passengers. Lower utilization of aircraft and seats as a result of restrictions will also add to rising costs.

Fuel prices offer some relief. In 2019 jet fuel averaged $77/barrel whereas the forecast average for 2020 is $36.8. Fuel is expected to account for 15% of overall costs (compared to 23.7% in 2019).

Cargo is the one bright spot. Compared to 2019, overall freight tonnes carried are expected to drop by 10.3 million tonnes to 51 million tonnes. However, a severe shortage in cargo capacity due to the unavailability of belly cargo on (grounded) passenger aircraft is expected to push rates up by some 30% for the year. Cargo revenues will reach a near-record $110.8 billion in 2020 (up from $102.4 billion in 2019). As a portion of industry revenues, cargo will contribute approximately 26%–up from 12% in 2019.

2020 Regional Performance

All regions will post losses in 2020. The crisis has taken on a similar dimension in all parts of the world with capacity cuts lagging about 10-15 percentage points or more behind the over-50% fall in demand.







Reduced Losses in 2021

With open borders and rising demand in 2021, the industry is expected to cut its losses to $15.8 billion for a net profit margin of -2.6%. Airlines will be in recovery mode but still well below pre-crisis levels (2019) on many performance measures:

  • Total passenger numbers are expected to rebound to 3.38 billion (roughly 2014 levels when there were 3.33 billion travelers), which is well below the 4.54 billion travelers in 2019.
  • Overall revenues are expected to be $598 billion which would be a 42% improvement in 2020, but still 29% below 2019’s $838 billion.
  • Unit costs are expected to fall as fixed costs are spread across more passengers than in 2020. But the continued virus control measures will limit the gains by reducing aircraft utilization rates.
  • Cargo’s enlarged footprint in the air transport industry will remain. Cargo revenues will reach a record $138 billion (a 25% increase on 2020). That is about 23% of total industry revenues, roughly double its historical share. Air cargo demand is expected to be strong as businesses restock at the start of the economic upturn, while a slow return of the passenger fleet will limit the growth of cargo capacity, and keep cargo yields steady at 2020 levels.
  • Jet fuel prices are expected to rise to an average of $51.8 per barrel for the year, as global economic activity and oil demand rises. While that will add some cost pressure on airlines, the price per barrel is similar to 2016 ($52.1) and will still be the lowest since 2004 ($49.7).

“Airlines will still be financially fragile in 2021. Passenger revenues will be more than one-third smaller than in 2019. And airlines are expected to lose about $5 for every passenger carried. The cut in losses will come from re-opened borders leading to increased volumes of travelers. Strong cargo operations and comparatively low fuel prices will also give the industry a boost. Competition among airlines will no doubt be even more intense. That will translate into strong incentives for travelers to take to the skies again. The challenge for 2022 will be turning reduced losses of 2021 into the profits that airlines will need to pay off their debts from this terrible crisis,” said de Juniac.

A Challenging Recovery

Although losses will be significantly reduced in 2021 from 2020 levels, the industry’s recovery is expected to be long and challenging. Some factors include:

  • Debt Levels: Airlines entered 2020 in relatively good financial shape. After a decade of profits, debt levels were relatively low ($430 billion, roughly half annual revenues). Vital financial relief measures by governments have kept airlines from going bankrupt but have ballooned debt by $120 billion to $550 billion which is about 92% of expected revenues in 2021. Further relief measures should be focused on helping airlines to generate more working capital and stimulating demand rather than further expanding debt.
  • Operational efficiencies: The global measures agreed for the industry re-start, for the period that they are implemented, will significantly change operational parameters. For example, physical distancing during embarkation/disembarking, more deep cleaning, and increased cabin check will all add time to operations which will decrease overall aircraft utilization.
  • Recession: The depth and duration of the recession to come will significantly impact business and consumer confidence. Pent-up demand is likely to drive an initial uptick in travel numbers but sustaining that is likely to require price stimulus and that will put pressure on profits.
  • Confidence: Travel patterns are likely to shift. The gradual opening up of air travel is likely to be progressive, starting with domestic markets, followed by regional and, lastly, international. Research suggests that some 60% of travelers will be eager to recommence travel within a few months of the pandemic coming under control. The same research also indicates that an even greater percentage of potential travelers until their personal financial situation stabilizes (69%) or if quarantine measures are in place (over 80%).

“People will want to fly again, provided they have confidence in their personal financial situation and the measures taken to keep travelers safe. There is no tried and true playbook for a recovery from COVID-19 but the ICAO Takeoff re-start plan outlines globally harmonized measures agreed by health and industry experts. It is important that the industry and governments follow it so that travelers will have the maximum reassurance about their safety. That will be a good start. And depending on how the pandemic evolves, knowledge of the virus deepens, or science improves, industry and governments will be better prepared for a globally coordinated response. That includes the potential removal of measures when it is safe. That will give airlines some breathing room to rebuild demand and repair damaged balance sheets,” said de Juniac.

Chicago | April 29, 2020–

  • Financial results significantly impacted by COVID-19 and the 737 MAX grounding
  • Revenue of $16.9 billion, GAAP loss per share of ($1.11) and core (non-GAAP)* loss per share of ($1.70)
  • Operating cash flow of ($4.3) billion; cash and marketable securities of $15.5 billion
  • Total backlog of $439 billion, including over 5,000 commercial airplanes

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  • Highlights Actions to Manage Impact of COVID-19 on Aviation Markets

Chicago, IL | May 11, 2020–Gogo (NASDAQ: GOGO), the leading global provider of broadband connectivity products and services for aviation, today announced its financial results for the quarter ended March 31, 2020.

Q1 2020 Financial Highlights

  • Consolidated revenue of $184.5 million; Net loss of $84.8 million, which includes charges of $46.4 million related to the impairment of certain long-lived assets and $6.8 million in additional credit loss reserves taken during the quarter.
  • Adjusted EBITDA(1) of $25.7 million.
  • BA Reportable Segment Profit of $35.9 million, up 6% from Q1 2019.
  • Cash Flow from Operating Activities of $38.0 million; Free Cash Flow(1) of $22.7 million.
  • Cash and cash equivalents were $214.2 million as of March 31, 2020, including $22 million drawn in March from the Company’s ABL Credit Facility. This compares to cash and cash equivalents of $170.0 million as of December 31, 2019.
  • Reached 1,511 2Ku and 1,758 total CA satellite aircraft online as of March 31, 2020, with a backlog of ~800 2Ku aircraft(2). In Q1 2020, 2Ku aircraft online increased by 104.

Summary of Actions in Response to COVID-19 Related Decline in Air Traffic

  • On April 22, 2020, the Company announced comprehensive actions in response to the COVID-19 related decline in air traffic. These measures include:
    • A furlough of approximately 54% of the workforce effective May 4, 2020. The furloughs impact approximately 600 employees across all three of Gogo’s business segments and corporate personnel.
    • Compensation reductions for nearly all personnel not impacted by furlough, including 30% for the CEO and Board of Directors and 20% for the executive leadership team.
    • Ongoing negotiations with suppliers and customers to improve contract terms, the delay of aircraft equipment installations, the deferral of capital equipment purchases, and the reduction of marketing, travel and non-essential spend.
    • The submission of applications to the U.S. Treasury Department for an $81 million grant and a $150 million loan under the recently enacted CARES Act. If Gogo receives government assistance, it will modify the announced personnel actions to comply with the terms of that assistance.

First Quarter 2020 Consolidated Financial Results

  • Consolidated revenue of $184.5 million declined by 8% from Q1 2019.
    • Service revenue of $150.8 million declined by 9% from Q1 2019, driven by a decline in CA-NA service revenue partially offset by growth in BA service revenue.
    • Equipment revenue of $33.7 million declined 2% from Q1 2019, driven by a decline in BA equipment revenue offset by growth in both CA-NA and CA-ROW equipment revenue.
  • Net loss of $84.8 million increased from a net loss of $16.8 million in Q1 2019, due primarily to a $46.4 million charge related to impairment of long-lived assets and lower Adjusted EBITDA.
  • Adjusted EBITDA decreased to $25.7 million, down from $38.0 million in Q1 2019, primarily due to lower CA-NA segment profit partially offset by improved BA segment profit. Adjusted EBITDA includes a $6.8 million charge for expected credit losses due primarily to the impact of COVID-19, largely from one international airline partner.

“We started the year well ahead of plan, but Commercial Aviation demand fell sharply in March due to COVID-19 and has deteriorated further in Q2,” said Oakleigh Thorne, Gogo’s President and CEO. “There has also been a slowdown in new activations and an increase in account suspensions in our Business Aviation segment, which we expect will negatively impact BA revenue in Q2.”

“The Gogo team responded quickly to COVID-19 with actions to reduce costs, maintain our strong global franchise and ensure our long-term financial viability,” Thorne said. “I think we are well positioned to get through this crisis and am extremely proud of the efforts and sacrifices of our Gogo team in these difficult times.”

“To ensure our long-term liquidity, we are aggressively executing on our previously announced 16 levers to manage costs,” said Barry Rowan, Gogo’s Executive Vice President and CFO. “Our stronger than expected cash position exiting 2019 and through the first four months of 2020 has positioned us to manage through this difficult period and we are committed to continuing this heightened level of financial and operational discipline.”

First Quarter 2020 Business Segment Financial Results

Business Aviation (BA)

  • Total revenue increased to $70.9 million, up 1% from Q1 2019, driven by 8% service revenue growth offset by a decline in equipment revenue.
  • Service revenue increased to $57.7 million, up 8% from Q1 2019, driven by a 7% increase in ATG units online and a more than 2% increase in average monthly service revenue per ATG unit online.
  • Equipment revenue decreased to $13.2 million, down 24% from Q1 2019, due to lower ATG and satellite unit shipments.
  • Reportable segment profit increased to $35.9 million, up 6% from Q1 2019, with a reportable segment profit margin of nearly 51%. Q1 2020 reportable segment profit margin was an all-time quarterly record for BA, driven largely by higher service gross margin.

Commercial Aviation – North America (CA-NA)

  • Total revenue decreased to $80.1 million, down 17% from Q1 2019.
  • Service revenue decreased to $73.8 million, down 20% from Q1 2019, primarily due to the impact of COVID-19, the full impact of American Airlines switching to the airline-directed model, the deinstallation of Gogo equipment from certain American Airlines aircraft during 2018 and the first half of 2019, and the recognition of product development-related revenue from one of our airline partners in the first quarter of 2019.
  • Equipment revenue increased to $6.3 million, up 56% from Q1 2019, due primarily to more installations under the airline-directed model.
  • Reportable segment profit decreased to $15.9 million, down 48% from Q1 2019, due to lower service revenue partially offset by a combined 32% decline in engineering, design and development, sales and marketing and general and administrative expenses.
  • Aircraft online increased to 2,480 as of March 31, 2020 from 2,412 as of March 31, 2019, due to an increase in 2Ku and ATG aircraft partially offset by the previously planned removal of older mainline ATG aircraft from airlines’ operating fleets.
  • Take rates declined to 13.3% in Q1 2020, down from 13.9% in Q1 2019. Q1 2020 take rates were above the average take rate of 13.2% in 2019.
  • Net annualized ARPA decreased to $99,000, down from $126,000 in Q1 2019, due to the full impact of American Airlines transition to the airline-directed model, product development-related revenue in the first quarter of 2019 and the impact of COVID-19.

Commercial Aviation – Rest of World (CA-ROW)

  • Total revenue increased to $33.4 million, up 1% from Q1 2019.
  • Service revenue decreased to $19.2 million, down 3% from Q1 2019, due to lower ARPA caused by the negative effect of COVID-19 on global commercial air travel partially offset by an increase in aircraft online.
  • Equipment revenue increased to $14.2 million, up 8% from Q1 2019, due to an increase in spare parts sold under the airline-directed model, partially offset by fewer installations under the airline-directed model.
  • Reportable segment loss improved to $17.4 million, a 4% improvement from Q1 2019, due to declines in cost of equipment revenue, engineering, design and development expenses, and sales and marketing expenses partially offset by an increase in general and administrative expenses which was primarily due to the establishment of credit loss reserves stemming from the impact of COVID-19, the majority of which related to a single international airline partner. The financial condition of this airline partner continued to deteriorate to the point of entering administration subsequent to March 31, 2020, which we expect will result in additional credit losses in Q2 2020.
  • Aircraft online increased to 833 as of March 31, 2020, up from 641 as of March 31, 2019.
  • Take rates declined to 12.3% in Q1 2020, down from 13.6% in Q1 2019.
  • Net annualized ARPA of $97,000 in Q1 2020 declined from $136,000 in Q1 2019, due primarily to the growth in new aircraft fleets online, which typically initially generate lower net annualized ARPA, and the negative effect of COVID-19 on global commercial air travel.
(1) See “Non-GAAP Financial Measures” below.
(2) Please refer to the definition of “backlog” in our Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on March 13, 2020, under the heading “Contracts with Airline Partners” in Item 1.

COVID-19 Update
Given the continued significant impact that COVID-19 pandemic is having on global air travel, Gogo is not providing 2020 financial guidance in this release. Gogo is closely tracking the evolving impact of COVID-19 on global travel and its airline partners.

Conference Call
The Company will host its first quarter conference call on May 11, 2020 at 8:30 a.m. ET. A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s website at http://ir.gogoair.com. Participants can access the call by dialing (844) 464-3940 (within the United States and Canada) or (765) 507-2646 (international dialers) and entering conference ID number 3031017.

Non-GAAP Financial Measures
We report certain non-GAAP financial measurements, including Adjusted EBITDA, Free Cash Flow and Unlevered Free Cash Flow in the supplemental tables below.  Management uses Adjusted EBITDA, Free Cash Flow and Unlevered Free Cash Flow for business planning purposes, including managing our business against internally projected results of operations and measuring our performance and liquidity. These supplemental performance measures also provide another basis for comparing period to period results by excluding potential differences caused by non-operational and unusual or non-recurring items. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, Free Cash Flow and Unlevered Free Cash Flow are not recognized measurements under accounting principles generally accepted in the United States, or GAAP; when analyzing our performance with Adjusted EBITDA or liquidity with Free Cash Flow or Unlevered Free Cash Flow, as applicable, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the explanatory footnotes regarding those adjustments, (ii) use Adjusted EBITDA in addition to, and not as an alternative to, net loss attributable to common stock as a measure of operating results and (iii) use Free Cash Flow or Unlevered Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by (used in) operating activities when evaluating our liquidity.

Cautionary Note Regarding Forward-Looking Statements

Certain disclosures in this press release and related comments by our management include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include, without limitation, statements regarding our business outlook, industry, business strategy, plans, goals and expectations concerning our market position, international expansion, future technologies, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release.

Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: the duration for which and the extent to which the COVID-19 pandemic continues to impact demand for commercial and business aviation air travel globally, including as a result of governmental restrictions on travel and social gatherings and overall economic conditions; the failure to successfully implement our cost reduction plan and other measures taken to mitigate the impact of COVID-19 on our business and financial condition, including efforts to renegotiate contractual terms with certain suppliers and customers; the loss of or failure to realize the anticipated benefits from agreements with our airline partners or customers on a timely basis or any failure to renew any existing agreements upon expiration or termination, including the results of our ongoing discussions with Delta Air Lines with respect to its transition to free service, which may involve a decision to pursue supplier diversification for its domestic mainline fleet; the failure to maintain airline and passenger satisfaction with our equipment or our service; any inability to timely and efficiently deploy and operate our 2Ku service or implement our technology roadmap, including developing and deploying upgrades and installations of our ATG-4 and 2Ku technologies, Gogo 5G, any technology to which our ATG or satellite networks evolve and other new technologies, for any reason, including technological issues and related remediation efforts, changes in regulations or regulatory delays affecting us, or our suppliers, some of whom are single source, or the failure by our airline partners or customers to roll out equipment upgrades or new services or adopt new technologies in order to support increased demand and network capacity constraints, including as a result of airline partners shifting to a free-to-passenger business model; the timing of deinstallation of our equipment from aircraft, including deinstallations resulting from aircraft retirements and other deinstallations permitted by certain airline contract provisions; the loss of relationships with original equipment manufacturers or dealers; our ability to make our equipment factory line-fit available on a timely basis; our ability to develop or purchase ATG and satellite network capacity sufficient to accommodate current and expected growth in passenger demand in North America and internationally as we expand; our reliance on third-party suppliers, some of whom are single source, for satellite capacity and other services and the equipment we use to provide services to commercial airlines and their passengers and business aviation customers; unfavorable economic conditions in the airline industry and/or the economy as a whole; governmental action restricting trade with China or other foreign countries; our ability to expand our international or domestic operations, including our ability to grow our business with current and potential future airline partners and customers and the effect of shifts in business models, including a shift toward airlines providing free service to passengers; an inability to compete effectively with other current or future providers of in-flight connectivity services and other products and services that we offer, including on the basis of price, service performance and line-fit availability; our ability to successfully develop and monetize new products and services, including those that were recently released, are currently being offered on a limited or trial basis, or are in various stages of development; our ability to certify and install our equipment and deliver our products and services, including newly developed products and services, on schedules consistent with our contractual commitments to customers; the failure of our equipment or material defects or errors in our software resulting in recalls or substantial warranty claims; a revocation of, or reduction in, our right to use licensed spectrum, the availability of other air-to-ground spectrum to a competitor or the repurposing by a competitor of other spectrum for air-to-ground use; our use of open source software and licenses; the effects of service interruptions or delays, technology failures and equipment failures or malfunctions arising from defects or errors in our software or defects in or damage to our equipment; the limited operating history of our CA-ROW segment; contract changes and implementation issues resulting from decisions by airlines to transition from the turnkey model to the airline-directed model or vice versa; increases in our projected capital expenditures due to, among other things, unexpected costs incurred in connection with the roll-out of our technology roadmap or our international expansion; compliance with U.S. and foreign government regulations and standards, including those related to regulation of the Internet, including e-commerce or online video distribution changes, and the installation and operation of satellite equipment and our ability to obtain and maintain all necessary regulatory approvals to install and operate our equipment in the United States and foreign jurisdictions; our, or our technology suppliers’, inability to effectively innovate; obsolescence of, and our ability to access parts, products, equipment and support services compatible with, our existing products and technologies; costs associated with defending existing or future intellectual property infringement, securities and derivative litigation and other litigation or claims and any negative outcome or effect of pending or future litigation; our ability to protect our intellectual property; breaches of the security of our information technology network, resulting in unauthorized access to our customers’ credit card information or other personal information; our substantial indebtedness, including additional borrowings pursuant to the CARES Act, if any, limitations and restrictions in the agreements governing our current and future indebtedness and our ability to service our indebtedness; our ability to obtain additional financing for operations, or financing intended to refinance our existing indebtedness on acceptable terms or at allincluding any loans pursuant to the CARES Act; fluctuations in our operating results; our ability to attract and retain customers and to capitalize on revenue from our platform; the demand for and market acceptance of our products and services; changes or developments in the regulations that apply to us, our business and our industry, including changes or developments affecting the ability of passengers or airlines to use our in-flight connectivity services; a future act or threat of terrorism, cybersecurity attack or other events that could result in adverse regulatory changes or developments, or otherwise adversely affect our business and industry; our ability to attract and retain qualified employees, including key personnelincluding in light of recent furloughs and salary reductions; the effectiveness of our marketing and advertising and our ability to maintain and enhance our brands; our ability to manage our growth in a cost-effective manner and integrate and manage acquisitions; compliance with anti-corruption laws and regulations in the jurisdictions in which we operate, including the Foreign Corrupt Practices Act and the (U.K.) Bribery Act 2010; restrictions on the ability of U.S. companies to do business in foreign countries, including, among others, restrictions imposed by the U.S. Office of Foreign Assets Control; difficulties in collecting accounts receivable; our ability to successfully implement improvements to systems, operations, strategy and procedures needed to support our growth and to effectively evaluate and pursue strategic opportunities; and other events beyond our control that may result in unexpected adverse operating results.

Additional information concerning these and other factors can be found under the caption “Risk Factors” in our annual report on Form 10-K for the year ended Dec. 31, 2019 as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020 and in our 10-Q for the quarter ended March 31, 2020 as filed with the SEC on May 11, 2020.

Any one of these factors or a combination of these factors could materially affect our financial condition or future results of operations and could influence whether any forward-looking statements contained in this report ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Geneva | April 7, 2020– The International Air Transport Association has released  new analysis showing that some 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the COVID-19 crisis.

Globally, the livelihoods of some 65.5 million people are dependent on the aviation industry, including sectors such as travel and tourism. Among these are 2.7 million airlines jobs. In a scenario of severe travel restrictions lasting for three months, IATA research calculates that 25 million jobs in aviation and related sectors are endangered across the world:

  • 11.2 million jobs in Asia-Pacific
  • 5.6 million jobs in Europe
  • 2.9 million jobs in Latin America
  • 2.0 million jobs in North America
  • 2.0 million jobs in Africa
  • 0.9 million jobs in the Middle East

In the same scenario, airlines are expected to see full year passenger revenues fall by $252 billion (-44%) in 2020 compared to 2019. The second quarter is the most critical with demand falling 70% at its worst point, and airlines burning through $61 billion in cash.

Airlines are calling on governments to provide immediate financial aid to help airlines to remain viable businesses able to lead the recovery when the pandemic is contained. Specifically, IATA calls for:

  • Direct financial support
  • Loans, loan guarantees and support for the corporate bond market
  • Tax relief

“There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses so that they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical,” said Alexandre de Juniac, IATA’s Director General and CEO.

Looking Ahead: Re-booting the Industry

Alongside vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained.

“We have never shuttered the industry on this scale before. Consequently, we have no experience in starting it up. It will be complicated. At the practical level, we will need contingencies for licenses and certifications that have expired. We will have to adapt operations and processes to avoid reinfections via imported cases. And we must find a predictable and efficient approach to managing travel restrictions which need to be lifted before we can get back to work. These are just some of the major tasks that are ahead of us. And to be successful, industry and government must be aligned and working together,” said de Juniac.

IATA is scoping a comprehensive approach to re-booting the industry when governments and public health authorities allow. A multi-stakeholder approach will be essential. One initial step is a series of virtual meetings—or summits—on a regional basis, bringing together governments and industry stakeholders. The main objectives will be:

  • Understanding what is needed to re-open closed borders, and
  • Agreeing solutions that can be operationalized and scaled efficiently

“We are not expecting to re-start the same industry that we closed a few weeks ago. Airlines will still connect the world. And we will do that through a variety of business models. But the industry processes will need to adapt. We must get on with this work quickly. We don’t want to repeat the mistakes made after 9.11 when many new processes were imposed in an uncoordinated way. We ended up with a mess of measures that we are still sorting out today. The 25 million people whose jobs are at risk by this crisis will depend on an efficient re-start of the industry,” said de Juniac.

Summit dates are being confirmed in the expectation of a start before the end of April.

Dublin | January 19, 2020–Avolon, the international aircraft leasing company, issued its 2020 outlook paper titled ‘Navigating Through Turbulence’. The paper, written by Avolon’s Jim Morrison and Steve Mason, reviews key aviation industry trends in 2019 and offers fearless forecasts for 2020.

The full paper is available at: https://www.avolon.aero/newsroom-and-thoughts

2020 ‘Fearless Forecasts’

  1. The 737 is Here to Stay: Boeing’s 737 MAX will safely return to revenue service in 2020. Airlines and passengers will turn up to fly. Trading markets will re-open and values will be supported by strong demand for Boeing’s most popular product. The world needs more Boeing aircraft to support growing demand for air travel.
  2. No New Major Commercial Aircraft Programs will be Launched: Manufacturers will return to their knitting: on-time deliveries. The A321XLR will compete uncontested as Boeing will not launch the NMA in 2020. Talk of single-aisle replacement aircraft will be quieted as regulators verify the strengths of the current offerings.
  3. Manufacturers to Prioritise Deliveries in 2020: The mid-life space may cool as manufacturers get back on-track with deliveries and passenger traffic remains near the long-term trend. Airlines may find themselves flying fewer hours per aircraft or pushing older metal out as new A320s and 737s are injected to the operating fleet.
  4. Access to Capital: Despite economic headwinds and increasing geopolitical unrest, capital markets will remain open to established players, confirming the benefit of an investment grade rating. The ABS market will see strong demand for issuances in 2020, continuing its 2019 pace.
  5. Environment as a Higher Purpose: Aviation gets serious about the environment with an increasing number of concrete proposals from a variety of players to meet the 2050 industry goal of a reduction in net aviation carbon emissions of 50% by 2050, relative to 2005 levels. In 2020, urban mobility solutions will demonstrate electrification of air travel is feasible, if at first only on short sectors.

Jim Morrison, Vice President – Aircraft Evaluation commented: “The end of the decade marks a period of remarkable achievement for the aviation industry with a full decade of airline profitability. However, 2019 will be remembered as much for the lows as the highs.”

“The year was headlined by aircraft manufacturers. The aviation industry grappled with the repercussions of the tragic B737 MAX accidents while Airbus struggled with aircraft delivery delays. During 2019, we saw more than 20 carriers fail but, despite this, global airlines’ net profit remained robust at an estimated US$26 billion. These failures underpinned our previous years’ assertion that, despite high load factors, there were too many cheap seats available. These airline failures resulted in a record number of aircraft being released to the market. Lessors were able to successfully re-market and re-deploy many of their aircraft, reflecting strong market appetite for aircraft transitions and air travel demand.”

Steve Mason, Senior Vice President – Commercial added: “Looking ahead to 2020, geopolitical uncertainty and international trade tensions will define the year. Through this turbulence will emerge opportunity. While improved airline profitability is forecasted, many sizeable carriers remain on life support. The still-buoyant global economy and the expanding middle class will continue to drive long-term passenger demand, supporting airline capacity growth. For lessors, investment grade rated players with global platforms are best positioned to seize any opportunities that may be presented. While efficiency improvements have long been a hallmark of aviation, 2020 is set to be the baseline year for the sector’s carbon emission offsetting and reduction scheme which will transition air travel to carbon neutral growth.”

Already impressive speaker roster augmented for 31st Annual WAI Conference

January 13, 2020-U.S. Air Force Secretary, Barbara Barrett has been confirmed as a speaker for the 31st Annual Women in Aviation International Conference, augmenting an already stellar roster of speakers.  Secretary Barrett joins Stephanie Chung, JetSuite president; Col. Eileen Collins, NASA astronaut; Maj. Gen. Jeannie Leavitt, U.S. Air Force; and Joan Robinson-Berry, Boeing Global Services vice president & chief engineer, as keynote speakers for the March 5-7, 2020, Conference at Disney’s Coronado Springs Resort in Lake Buena Vista, Florida.

Barbara M. Barrett is the 25th Secretary of the Air Force and is responsible for the affairs of the Department of the Air Force, including organizing, training, equipping, and providing for the welfare of 685,000 active duty, Guard, Reserve, and civilian airmen, and their families. She also oversees the Air Force’s annual budget of more than $205 billion. Secretary Barrett directs the development of strategy and policy, risk management, weapons acquisition, technology investments, and human resource management across a global enterprise. As the head of the Department of the Air Force, she is responsible for implementing decisions of the President and Congress and for fulfilling Combatant Commanders’ current and future operational requirements.

Secretary Barrett has served in senior leadership positions in public service, the private sector and academia. Before she was 30, she was an executive with two global Fortune 500 companies. Secretary Barrett’s key leadership roles include her time as the U.S. ambassador to Finland, deputy administrator of the Federal Aviation Administration and president of the Thunderbird School of Global Management. She also taught leadership as a Harvard Fellow at the Kennedy School of Government. Prior to assuming her current position, Secretary Barrett was the chairman of the board for the Aerospace Corporation.

Secure online registration is available at www.wai.org/20conference. Discounted registration is available for military personnel and full-time students.  For more information, visit WAI.org.

Donations will be used to fund members’ personal development in aviation

November 26, 2019–Patricia Luebke, WAI 1954 and a regular and longtime contributor to Aviation for Women and Aviation for Girls magazines, passed away on November 22, 2019, after a brief illness. Pat was a proud member of Women in Aviation International and was the creative force behind many of the organization’s key programs and events including Take Your Daughter to Conference, which became Girls in Aviation Day; the annual female group photo at EAA AirVenture Oshkosh; a WAI time capsule for our 25-year anniversary; the conference Daily newsletters, the Annual Fund Pioneer Hall of Fame tote bag; and the Honor The WASP event on Memorial Day weekend.

Girls in Aviation Day, sparked by Pat’s creativity, has resulted in approximately 56,150 kids being introduced to aviation (to date) with more to come in the years that follow. Girls in Aviation Day events have been held in Australia, Botswana, Cameroon, Canada, Costa Rica, England, France, Germany, Ghana, India, Ireland, Italy, Kenya, Netherlands, Nigeria, Puerto Rico, Scotland, South Africa, Spain, Switzerland, United States, and Zambia. The annual WomenVenture group photo, which is in it’s 11th year, started with 700 attendees, and has grown into an event that thousands of women look forward to annually, with over 2,000 in the 2019 photo. Her ideas and creativity have impacted thousands in aviation and her legacy will live on in those she continues to inspire.

Her eloquent and creative writing in the WAI publications including her Personal Development column were a reader favorite and addressed a wide range of topics including the effects of social media, losing a job, asking for a promotion, and how to save money.

Pat’s valuable insights were drawn from her decades of experience as a New York City-based freelance writer, editor, and marketing consultant. Starting her aviation career as Flying magazine’s advertising assistant, Pat rose through the ranks and became a vice president for the publishing company leading a team of magazine staff with her quick wit and creative inspiration. With a dedicated work ethic and attention to detail, Pat shared her expertise with a variety of clients including Avionics News, Sporty’s, AOPA, Lightspeed Aviation, and many others.  She was especially proud of her work with WAI dedicated to ensuring the development of future leaders in the field and for encouraging women of all ages and backgrounds to be strong and confident.

To continue Pat’s legacy of candid and thorough aviation journalism, Women in Aviation International announces a 2020 scholarship in her honor to encourage WAI members to pursue their own best aviation-related personal development goal. Applications must be received via email to Donna Wallace (dwallace@wai.org) no later than Friday, January 10, 2020, midnight EST. Requirements include: an active WAI membership through March 2020, a WAI official scholarship application form, your resume (no longer than 2 pages) and a 500-word essay explaining how you would use the scholarship to further your own aviation personal development goal. If any of Pat’s stories inspired you, please include in your essay. The Pat Luebke Memorial Scholarship will be awarded at the 31st Annual International Women in Aviation Conference, March 5-7, 2020 in Orlando, Florida.

Donate online to the Pat Luebke Memorial Scholarship Fund at https://www.wai.org/memorial-pat_luebke

Questions? Email Donna Wallace, Scholarship Coordinator, at dwallace@wai.org

November 6, 2019–Through AlphaWise, we conducted a global survey of 200+ corporate travel managers responsible for airline negotiations. Overall, 2020 budget and demand growth are expected to step-up moderately.

We highlight the following key takeaways:

  1. Global Corporate Volumes and Pricing are Decelerating for Air Travel. Respondents in our survey anticipate ~3.4% global passenger volume growth (response-weighted), which is below last year’s ~5.1%. And on the airline pricing side of the equation, it is seeing a similar step-down with growth of ~1.3% versus the previous year at ~1.8% (both response-weighted).
  2. Travel Budgets Should Grow Slower Into 2020. Over the past year, corporate travel revenues have remained steady despite the volatile backdrop. That said, growth in budget expectations for air and hotel are set to be lower with respondents expecting ~4.0% growth into 2020 compared to last year’s forecast of ~5.7%.
  3. North America Domestic Remains the Leading Region. Global volume and pricing expectations vary quite a bit across the relevant regional exposures for US airlines. Specifically, North America Domestic is the strongest region again this year given its volume and pricing expectations at ~2.3% and ~1.9%, respectively, followed by LatAm, Transatlantic, then Asia Pacific.
  4. Premium Policies are Becoming More Stringent, But with Discounts Steady. Along with lower budget expectations, premium travel policies are becoming more conservative with a ~2x increase in managers pointing to more stringent policies in 2020. And on discounts, they remain steady and within the historical range of 10-15%.
  5. Delta is Still Best-in-Class. DAL has consistently screened as the preferred airline amongst corporate travel managers and again held this position based on performance across all polled categories. As such, we expect the airline to hold off any material share shift in the near-term, though note that UAL has made some gains in its relative positioning.
  6. Declining LCC Corporate Share Reversed. This year found corporate travel managers reversing the trend of decreasing LCC use with an up-tick YoY. Specifically, the travel budget allocated for low cost carriers increased to ~12% from the prior year’s ~9%. Overall, we view this trend as a potential disrupter for the Legacies over the long-term.

Read more here.