Latest news with #Ziemelis
Irish Examiner
21-04-2025
- Business
- Irish Examiner
Irish aviation firm warns airline passengers will face higher fares due to US tariffs
Irish aviation services firm Avia Solutions Group is pencilling in higher maintenance expenses from potential tariffs that would affect its aircraft charter business, with those costs eventually being passed on to airline passengers. The firm specialises in short-term leasing of aircraft and crew to airlines, which typically use Avia to boost capacity during busy seasons. It is carrying out a 'stress test' by calculating 12% higher costs on maintenance services across its fleet, chairman Gediminas Ziemelis said in an interview. Avia is exploring ways to access more spare parts from Europe if tariffs drive up the cost of imported products like engine components, he said. His comments shed more light on how the aviation industry — which has mostly been shielded from tariffs in the past — is contending with uncertainty caused by US president Donald Trump's bid to rewrite the rules of global trade. 'It's a mess,' Ziemelis said. 'If you don't know the size of the disaster or problem then it's very difficult to forecast.' Trump has placed tariffs of 10% on goods coming into America from dozens of countries including the EU, and hit other nations with higher rates. The fee is set to rise to 20% on EU manufacturers sending products the US if a 90-day pause expires without a deal — raising the prospect of retaliatory EU tariffs on US-made goods. Others in the industry are nervous about uncertainty around the aviation supply chain, Ziemelis said. Airlines cannot swallow additional costs if they do not increase their ticket prices, so ultimately any added fees will be borne by passengers, he said. 'If prices go above what the consumer is willing to pay, of course it can slow down traffic and number of the passengers overall,' he said. Others are also preparing for disruption. Delta Air Lines has said it will not pay tariffs on planes from French manufacturer Airbus SE, while Ireland's Ryanair Holdings has said it may delay aircraft deliveries from Boeing should the EU retaliate. So far, the tariff war has hit airlines hardest in China, where reciprocal levies have more than doubled the price of Boeing products, and any parts coming into the US from the Asian nation also cost more than twice as much. Bloomberg News reported Beijing told Chinese carriers not to accept delivery of any more Boeing aircraft and asked them not to buy US-made aircraft parts. There is also evidence the tariff talk has rattled travellers and slowed demand across the lucrative transatlantic route. Dublin-based Avia placed an order late last year for 80 Boeing 737 Max jets to add into its fleet of 220 aircraft. The company plans to grow the fleet to 700 planes by the end of the decade. Read More Tariffs fallout sees jet bound for Chinese airline sent back to Boeing
Gulf News
18-04-2025
- Business
- Gulf News
MENA aviation boom: Top ACMI provider plans major expansion amid supply chain, trade constraints
Dubai: While the aftermath of the pandemic and ongoing geopolitical tensions may have worsened aviation supply chain constraints, a top aviation leader remains confident that the industry will see a return to business as usual by the end of the decade – especially for the Middle East. Avia Solutions Group - a global aviation services company and the world's biggest ACMI (Aircraft, Crew, Maintenance and Insurance) provider with a fleet of 221 aircraft globally- is betting big on the region's fast-growing aviation sector, particularly in Saudi Arabia. The Group comprises more than 250 companies and employs 14,000 aviation professionals. Gediminas Ziemelis, Chairman of Avia Solutions Group, revealed the company's ambitious plans while offering his insights on global trends, including the impact of US-China trade tensions and the rise of Chinese aircraft manufacturer Comac. "Since 2016, we have been actively developing our presence in the Middle East," said Ziemelis, a Dubai resident. "The GCC region is heavily aviation-driven, and we are betting on its future growth." He highlighted Saudi Arabia as a key market, noting the potential driven by the development of new tourism resorts. "Saudi Arabia needs our product, especially with the tourism resorts planned for the next 10 years," Ziemelis affirmed. Growth plans Ziemelis outlined the ambitious growth plans for Avia Solutions Group, focusing on ACMI leasing. "ACMI is our primary business, and the addressable market globally, excluding the USA, is around 1,500 aircraft. Our goal is to reach 700 aircraft by 2030, which would put us in the world's top 15-20 carriers," he stated. This expansion will require significant investment. "We estimate that around 1.1 billion USD in CAPEX will be needed from us to achieve this," Ziemelis said, highlighting the company's commitment to becoming a major player in the global ACMI market. Growth in the UAE Avia Solutions Group currently operates many aircraft in the Middle East and has established a strong maintenance infrastructure. "We have line maintenance stations in Ras Al Khaimah, Dubai, and Abu Dhabi, and we are looking at other locations," Ziemelis said. The company also boasts significant MRO capabilities. "We have the skills to build anything in up to 24 months," he added, underscoring their regional comprehensive service offerings. Pilot training in the region Pilot training is a significant focus for Avia Solutions Group in the Middle East. Ziemelis said the recent changes in Saudi Arabia's aviation regulations are an essential opportunity. "Saudi Arabia changed their law to allow domestic flying, which has created a definite need for pilot training," he said. The company has secured pilot training contracts within the GCC region. "It is the first time we have got these contracts, and trainees are currently going to our schools here in Europe," Ziemelis explained. "The aim is for them to have their own trained, dedicated, and funded pilots, reducing the need for constant travel for training." Trade wars Addressing global aircraft manufacturing and the ongoing trade wars that the US launched upon the world. "Boeing does have more challenges than Airbus, especially after the 2018 crashes, with their production currently capped," he stated. That said, he is not too worried about the impact of the trade wars on Airbus and Boeing. "The trade wars won't significantly impact Boeing or Airbus because they use the same suppliers. Around 80 per cent of the component suppliers are matching, making it almost impossible to operate without components from both," Ziemelis said. Turning to the rise of Chinese aircraft manufacturer Comac, Ziemelis acknowledged their potential but highlighted ongoing challenges. "Embraer, with over 1,500 aircraft, operates in the lower-seat aircraft market and is not a direct competitor to Boeing and Airbus. Similarly, while Comac has the potential with a market for over 10,000 aircraft, they still have an engine problem," Ziemelis explained. He cited market speculation regarding the development of an independent Chinese engine. "Based on the gossip, we might see an engine separate from Western manufacturers by around 2024, with further advancements expected by 2035." APAC's aviation boom Looking at key markets for Avia Solutions Group beyond the Middle East, Ziemelis highlighted the importance of the Asia Pacific (APAC) region. "APAC is a vital counter-cyclical market for us, with airline partners in Australia, Indonesia, and the Philippines. It is the next best region for us after the Middle East and Europe," he stated. He noted the impact of decreased tourism from China in the APAC region but remained optimistic about its overall potential as a travel destination.
