Air Canada said today it has come to an agreement with General Electric Japan, who will underwrite a loan for Air Canada valued up to USD $170.5-million for the aviation giant to finance plane purchases.

As part of the deal, $128-.5-million will be used by Air Canada to buy eight Airbus A319 planes, and four Boeing B767-300ER planes. $42-million will also be available for Air Canada as an option to purchase four additional Airbus A319 airplanes in 2012.

Each segment of the total principal will have its own respective term for Air Canada to repay the notes and to exercise the options.

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Europe’s largest airline company that moves the most number of people in the continent, reported marginal financial earnings for the first quarter of 2010, posting a material EUR 298-million.

The company’s revenue was up by 16-percent in the quarter to EUR 5.8-billion, compared to the same period last year where the company had total revenues of $5.8-billion

In Q1 ’10, Lufthansa reported an operating loss of EUR 300-million, compared to a smaller EUR 44-million loss in Q1 ’09.

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Update Apr 17 11:20am: Confirmed, RBC Capital Markets is an underwriter

The Canadian airline company, Porter Inc., confirmed today the company plans to go public with an initial public offering (IPO) to raise capital.

The company declined to answer when it could happen, nor any other information including who the underwriters would be and what type of underwriting would be used such as a firm commitment underwriting.

The regional aviation company currently flies planes from Toronto’s downtown island airport to destinations in both Canada and the United States.

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Boeing 787 Dreamliner

Chicago-based Boeing Corp has just announced a revised schedule that will further delay the 787 Dreamliner delivery date to near the end of 2010.

Boeing is using the additional time to fine-tune the design of the aircraft, more specifically a structural design flaw with the sides of the fuselage. Boeing will also use the extra time for additional test flights to ensure the safety of the aircraft.

As of right now, Boeing currently has 850 orders from 56 customers worldwide who have contracts in place to buy the Dreamliner.

One of the first customers that are scheduled to receive the new Dreamliner, All Nippon Airways of

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Montreal-based airplane and rail maker Bombardier has announced it will cut 3,000 (10% of its total worldwide headcount). jobs from its aerospace division. The jobs cuts will affect workers in Toronto, Montreal, Mexico, Ireland, and the U.S.

Bombardier sales of airplanes have fallen significantly given lower demand as a result of the global financial crisis. Bombardier reported it delivered 349 planes last fiscal year, down from 361 delivered planes the year before.

Bombardier CEO Pierre Beaudoin said today, “We believe we are well positioned to face this difficult economic environment with a strong balance sheet, high level of liquidity,”

Despite the new job cuts, Bombardier is still actively hiring for other aircraft divisions such as the CSeries division.

More recently, Bombardier’s biggest competitor Boeing announced 10,000 job cuts. Competitor Cessna Aircraft also recently announced 2,000 more job cuts.

Boeing CEO Jim McNerney has announced the company will cut 10,000 jobs in 2009. This number includes the latest 4,500 job cuts previously announced. McNerney said, “the global economy continues to weaken, and it’s affecting air traffic and financing,” hence the job cuts as Boeing tries to position itself during this tuff economic time. Boeing also just announced Q4 revenues declined to $12.7 billion from $17.5 billion as labor strike pushed airplane deliveries out of the quarter. Competitor Airbus sees a 60% drop in new airplane sales for 2009.

Today in New Zealand a passenger Air New Zealand Boeing 747-400 airplane flew a two-hour flight with a 50/50 mix of regular A1 air fuel and with Jatropha plant oil. The plane flew at 35,000 feet, and tests confirmed both engines had the same capacity throughout the flight. Only one of the engines used the mix, while the second engine used regular air fuel. Air New Zealand says the company is striving to become the greenest as it tries to protect the interest of the environment and its business interest as it tries to cut costs. This type of mix is feasible as mass quantities can be produced. This type of mix would mean a 25% reduction in carbon emissions. The industry is continuing to test various bio-fuels as companies try to cut costs during this volatile economic time.

British Airlines is reporting a 92% drop in profit in the first half of its fiscal year despite an increase in revenue of 6.4% to almost £4.8bn. BA’s after-tax profit from April 1 to September 30 fell to £52 million, from £616 million. The drop in profit can again be attributed to the global economic financial crisis and record high fuel prices. The factors have also resulted in the insolvency of some major airlines. British Airways forecasts its fuel costs to top a staggering £3 billion this year despite the falling price of a barrel. However, the price of oil should become favorable as its expected to further decline. BA also plans to scale back flights to busy areas, so there could be a marginal increase in prices to accommodate the demand given the lower supply, but that may not happen because consumers may use substitutes. Another issue that could see lower profits for BA are bad  investments. BA hedged 80% of its fuel risk by buying futures for kerosene that mature in about 6 months at a strike price of about $95 per barrel, the problem is that the price of a barrel is now lower than $95, so the contract is useless. 80% is also a very material investment. The thing is no one could have forecast such steep declines in the price of oil in such a short amount of time, though I do think the future is looking good for BA once the financial crisis passes and because of lower projectd costs for oil, though of course, the airline industry remains a volitile one and traditionally has marginal profits.