Thursday, February 22, 2018

Qantas Airways sees record half year profits

Australia's national flag carrier, Qantas Airways, has posted record profits for the six months to December.

The firm, which has been through a major restructuring in recent years, booked underlying profits of 976m Australian dollars (£547.m; $761.48m).

Three years ago, the flying kangaroo, as the airline is affectionately known, posted record losses .

Its turnaround to profit is seen as one of the biggest in Australia's corporate history.

"Today's result comes from investing in areas that provide margin growth and a network strategy that makes sure we have the right aircraft on the right route," chief executive Alan Joyce said.

The half-yearly result marks a 14.6% jump in underlying profit from the same period a year earlier and comes amid higher fuel costs and stiffer competition on the domestic front.

The airline's underlying profit is the measure most closely watched by analysts and investors. The firm's Sydney-listed shares closed higher, up by nearly 6%.

The firm said overall revenue and other income rose 6% to $8.66m over the same period. It also announced a share buy-back worth $378m.

On the international front, however, Mr Joyce said the firm had faced more seats in the market together with rising fuel costs.

But Qantas International "had largely held its own, with a 6% decline in profit and a slight rise in unit revenue," he said.

Qantas is Australia's biggest airline and controls nearly two-thirds of the country's domestic market.


(BBC News)

Wednesday, February 21, 2018

Boeing Steals an Order From Airbus

Late Tuesday afternoon airline industry analysts at Leeham News reported that Hawaiian Airlines parent Hawaiian Holdings Inc. canceled an existing order for six Airbus A330-800s and will place an order next week with Boeing for an unspecified number of Boeing’s 787-9 Dreamliners.

The cancellation is no particular surprise. Back in October, CNN reported that Hawaiian Airlines was considering an aircraft change for its planned expansion into Indian, western Australian, London and even Moscow markets. With its 7,500-nautical mile (nm) range, the A330-800 was believed to be a good solution for these so-called long-thin routes (lots of miles, not so many passengers) that have been serviced primarily by Boeing 757s and 767s.

Boeing also has been considering a new airplane to fill the gap left by the discontinued 757 and the virtually discontinued 767. This is the “New Midrange Aircraft” and Boeing would really like to drive a spike through the heart of the A330-800 before it announces what some have dubbed the Boeing 797. The six Airbus planes reportedly canceled Tuesday were the only six A330-800s on the Airbus order book, another reason Hawaiian wanted out of the deal.

Airbus’s A330neo family also poses a threat to the 787, which has not been a really hot order driver for Boeing since 2013. That’s one more reason why Boeing needs to announce the 797. Airbus is pitching the A330neo to both United and American Airlines while Boeing has essentially vaporware. Even if the 797 is approved and announced, it won’t be available until the middle of the next decade.

Is that soon enough? Boeing must think so because the company has been in no particular rush to counter Airbus with a new aircraft. Leeham News notes, however, that if Boeing can convince both United and American Airlines to be launch customers for the 797, the Airbus A330neo will be seriously wounded.

That’s what makes the reported deal with Hawaiian Airlines so interesting. It’s an early shot fired in what will be a much more intense battle.


(Paul Ausick - 24/7 Wall St.)

Tuesday, February 20, 2018

Southwest to launch first international cargo services in May

Southwest Airlines plans to start rolling out international cargo shipments in May, with Mexico City, Cancun, Cabo San Lucas/Los Cabos and Puerto Vallarta at the top of the list, the carrier announced.

The new service, subject to government approvals and the successful deployment of its new Southwest Cargo Suite (SCS) point-of-sale and back-office system, would expand to more destinations in 2018, Southwest said. SCS is expected to be in place by April 1 and will enable advanced cargo bookings and electronic air waybills.

Southwest saw cargo revenue rise 1.2% year-over-year (YOY) in 2017 to $173 million, “primarily due to increased demand,” the carrier said in its most recent 10-K filing with the U.S. Securities and Exchange Commission. Its 2018 first-quarter outlook was for a YOY rise compared to 2017's first three months. “Sluggish demand” contributed to a 4.5% drop in full-year 2016 revenue to $172 million from $178 million in 2017.

North America, like much of the rest of the globe, enjoyed a strong air freight year in 2017. IATA figures show North American FTKs rose 7.9% YOY in 2017, while global FTK growth was 9%—the strongest YOY surge since 2010.


(Sean Broderick - ATWOnline News)

Monday, February 19, 2018

Wijet places record order for 16 HondaJets

(Wijet)

European air taxi operator Wijet has placed a record order with Honda Aircraft for 16 HA-420 HondaJets, as part of a fleet upgrade and expansion program.

Deliveries are scheduled to begin in March and all the light business jets should be in service within 18 months, says Wijet chief executive Patrick Hersent. "The HondaJets will replace some of our 15 [Cessna] Citation Mustangs, which have an average age of around seven years," he says.

Established in 2009, Wijet is one of the world’s oldest and largest operators of the out-of-production Mustang. Cessna halted manufacture of the entry-level aircraft in May 2017, following feeble demand for the all-metal type.

While 470 Mustangs were built over the type's 12-year production run, Flight Fleets Analyzer shows a steady slide in deliveries, from a peak of 128 units in 2009 to only eight in 2015. Cessna recorded seven Mustang shipments in the first half of 2017.

Hersent says the four-passenger business jet still has an important role to play in Wijet's plans. A clutch of aircraft will be used to supplement the HondaJet fleet, to help meet the burgeoning demand across Europe for ad hoc charter.

"The Mustang can operate from shorter runways than the HondaJet, including from our headquarters at Blackbushe airport in the south of England, which the HondaJet cannot," he says. "We will therefore base our new aircraft at London Biggin Hill, where Honda is planning to establish a maintenance center to support the fleet."

The HondaJet has a larger cabin than the Mustang, with seating for five passengers, Hersent notes. It also boasts a range of over 2,000nm (3,700km) – 300nm longer than the Cessna– "putting several Nordic and North African destinations within reach", he adds.

Honda Aircraft secured European certification for the HondaJet in 2016. Fleets Analyzer records seven examples as operating in the region, out of a global fleet of just under 70.

The Greensboro, North Carolina-based airframer is progressively ramping up production of the GE Honda Aero Engines HF120-powered type to meet market demand. Deliveries climbed from 23 units in 2016 to more than 43 last year, and the company expects a "steady" increase in output in 2018.


(Kate Sarsfield - Flight International / FlightGlobal News)

Alaska Air Group's January Load Factor Declines, Stock Falls

Alaska Airlines Boeing 737-890(WL) (35189/2393) N586AS on short final to Rwy 25L at Los Angeles International Airport (LAX/KLAX) on December 5, 2017.
(Photo by Michael Carter)

Shares of Alaska Air Group, Inc. have declined more than 2% ever since it released its traffic results for January 2018, last week. In the first month of 2018, the company’s consolidated traffic (measured in revenue passenger miles or RPMS) increased 3.5% to approximately 4 billion.

Consolidated capacity (measured in average seat miles or ASMs) also increased 6.6% to 5.2 billion. As capacity expansion outweighed traffic growth in January, load factor (percentage of seats filled by passengers) declined 230 basis points to 75.8%. The decline in this key metric was due to capacity over expansion which disappointed investors, thus leading to the stock price depreciation.

In first-quarter 2018, the carrier aims to expand capacity by around 8%. For the full year, the metric is likely to climb 7.5%. Consequently, load factor will be pressurized throughout 2018 at this Seattle, WA-based carrier in the event of traffic growth lagging capacity expansion.

Alaska Air Group, Inc. Price / Alaska Air Group, Inc. Quote

In fact, Alaska Air Group is not the only carrier which is facing capacity relate issues. We remind investors that shares of United Continental Holdings, Inc. UAL also declined significantly in the last month, even after reporting better-than-expected results in the fourth quarter on issues related to capacity.

On the fourth-quarter conference call, the company stated that it will continue to expand capacity in a bid to maintain market share at major airport hubs to deal with competition from discount carriers like Spirit Airlines, Inc. SAVE. For 2018, United Continental’s capacity growth is projected between 4% and 6% year over year. The metric is anticipated to grow for 2019 as well as 2020.


(Zacks Equity Research - Zacks) 

Iranian airline covertly bought parts from U.S. suppliers

The U.S. has suspended the export privileges of a Turkish national and three related companies it says obtained American-made aircraft parts for Iranian airlines, violating U.S. sanctions.

The move was announced earlier this month but has passed largely unnoticed. Mira Ricardel, Under Secretary of Commerce for Export Administration, said in a February 5 news release from the Commerce Department's Bureau of Industry and Security (BIS) that the sanction shows that trade with Iran that defies U.S. export laws and regulations will not be tolerated.

BIS oversees exports of high-technology and other products related to national security.

According to the Commerce Department, Turkish national Gulnihal Yegane set up shell companies to purchase equipment from U.S. suppliers on behalf of Iran's Mahan Air. The carrier is under sanctions by the U.S. for allegedly carrying arms and fighters in Syria. The jet parts were obtained through the Turkish fronts in the past several years, most recently in December.

According to the Wall Street Journal, the trade action could support the views of some in the Trump administration who oppose granting permission to Boeing to sell aircraft to another Iranian carrier.

Boeing inked a $16.6 billion deal with with Iran Air in 2016. The agreement was seen as evidence of normalizing U.S. relations with Iran following a 2015 pact in which Tehran agreed to freeze development of its nuclear program in exchange for international sanctions being lifted.

Ending the Boeing deal could impact the nuclear agreement as well as an estimated $40 billion in contracts for Boeing and Europe's Airbus, which relies on U.S. licensing for its own agreement with Iran due to the many U.S.-made parts on its planes, according to the WSJ.

The U.S. has loosened sanctions again Iran Air, but they remain in place against Mahan for more than a decade due to its alleged collaboration with Iran's Islamic Revolutionary Guard Corps, the newspaper said.


(Kate Gibson - CBS MoneyWatch)

Air Italy expands as UAE-backed Alitalia goes bankrupt

Qatar Airways has expanded airline investment with Italy's Meridiana 
(Photo: Meridiana / AirItaly)

Italian airline Meridiana changed its name to Air Italy on Monday with the backing of Qatar Airways, its new shareholder, aiming to become Italy's flagship carrier as UAE-backed Alitalia undergoes bankruptcy proceedings.

Air Italy was put under new ownership last year after Qatar Airways bought a 49 percent stake in AQA Holding, with the previous owner Alisarda retaining 51 percent.

It is now the country's second-largest airline behind Alitalia, which was mainly backed by Abu Dhabi-based Etihad Airways.

However, the carrier started bankruptcy proceedings last year for the second time in a decade, after saying it will no longer invest in the faltering airline.

Air Italy's new restructuring plan aims to make it Italy's "airline of reference", said Qatar Airways' CEO Akbar al-Baker.

"We will show that we are the star," said al-Baker, presenting the airline's development plans in Italy.

Over the next three years, 20 Boeing 737 MAX aircraft will be added to Air Italy's fleet, the first of which arrives in April.

Qatar Airways will lease five of its Airbus A330-200 aircraft to Air Italy "at market prices", al-Baker said.


(Al Jazeera News)

Sunday, February 18, 2018

Fight over man's flatulence forces flight to make emergency landing

A pilot made an emergency landing after a fight broke out over a passenger who allegedly refused to stop passing gas.

Two Dutchmen sitting next to the flatulent passenger reportedly asked the man to stop, but he refused and continued to break wind aboard the Transavia Airlines flight from Dubai to Amsterdam Schiphol.

The budget airline crew allegedly did not help the passengers after their complaints, Metro reports, leading to a fight between the men. Despite a warning from the pilot, the altercation continued and forced the airplane to be diverted to Vienna Airport, where it made an emergency landing.

Police boarded the plane once it landed and removed two women and two men that the pilot reported as “passengers on the rampage,” Metro reports.

The women, who are sisters, that were removed from the flight are now taking the airline to court claiming they were not involved in the alternation. Nora Lacchab, a 25-year-old law student, called the removal “humiliating.”

“We had no idea who these boys were, we just had the bad luck to be in the same row and we didn’t do anything. All I will say is that the crew were really provocative and stirred things up,” Lacchab said to De Telegraph.

All four passengers were released from police custody without being charged. However, all have been banned from flying Transavia Airlines in the future.

“Our crew must ensure a safe flight. When passengers pose risks, they immediately intervene. Our people are trained for that. They know very well where the boundaries are. Transavia is therefore square behind the cabin crew and the pilots,” the airliner said in a statement.


(Alexandra Deabler - Fox News)

Delta Air Lines Wants the Boeing "797" ASAP: Here's Why

Last year, Boeing strained its relationship with U.S. airline giant Delta Air Lines by attempting to have big tariffs imposed on Delta's purchase of CSeries jets from Bombardier. Many pundits saw Boeing's trade complaint as a risky move that could alienate a key customer -- especially after Delta ordered the Airbus A321neo last December instead of Boeing's 737 MAX 10.

However, these fears weren't justified. Delta isn't going to make bad business decisions just to punish Boeing. In fact, Delta Air Lines CEO Ed Bastian wants the carrier to be a launch customer for Boeing's proposed "middle-of-the-market" jet, according to Bloomberg.

Indeed, this proposed jet -- which would likely be called the 797 in Boeing's numbering scheme -- would fill a crucial gap in Delta's future fleet. Thus, it's not surprising that management wants to get this plane into the fleet as quickly as possible.


What the 797 will be

Boeing has confirmed that it's studying a possible middle-of-the-market jet, but it's still in the process of talking to customers and building the business case. As a result, nothing about the future 797 program is set in stone.

That said, the broad outlines of Boeing's plan have come to light. It's envisioning a twin-aisle aircraft with an elliptical fuselage to improve fuel efficiency. The 797 would have two variants: One could hold 225 seats in a typical international configuration, with 5,000 nautical miles of range, while the other could seat 275 and fly up to 4,500 nautical miles. Boeing is targeting a 30% unit-cost improvement over its aging 757 and 767 models.

Based on these parameters, the 797 would be an ideal aircraft for routes from the East Coast and Midwest to Europe. It would also work well for the busiest transcontinental routes and for some routes to Latin America.


Why Delta needs the 797

Boeing intends the 797 to be a much-needed replacement for its 757 and 767 jets. It would be somewhat larger than the 757, with more range, while being similar in size to the 767, albeit with somewhat less range. Delta Air Lines is the largest operator of both of those older models, which explains its enthusiasm for the 797.


To be fair, the A321neos that Delta recently ordered can replace the 757s that it uses on domestic routes. If Delta upgrades some of those orders to Airbus' new A321LR, it would also be able to replace 757s used for longer routes -- primarily to Europe. That said, one big disadvantage of the A321LR is that its auxiliary fuel tanks take up a lot of space that could otherwise be used for cargo.

On the other hand, the alternatives for replacing Delta's roughly 80 767s are far from ideal. In late 2014, the carrier ordered 25 A330-900neos from Airbus to replace some of its older 767s. However, while the A330-900neo will have much lower unit costs than the planes it will replace, it will probably have about 40% more seats than Delta's 767-300ERs.

Some of Delta's 767 routes may be able to handle the additional capacity. For others, 300 seats would be way too much capacity and would undermine unit revenue. The 797 would be far better than any other option for international routes that can't handle a 300-seat aircraft.


There could be a big rush to be first

If Boeing decides to go ahead with the 797 project, the jet would probably be ready to enter service around 2025. That's perfect timing for Delta, which will need to replace most of its 757 and 767 fleets during the late 2020s, based on a typical 25-30 year aircraft-replacement cycle.

However, Delta Air Lines won't be the only airline vying for early delivery slots. The majority of the Boeing 757s and 767s that are still flying were built during the 1990s. Production dropped off dramatically after 2001. Thus, by 2025, most of the remaining 757s and 767s will be due for replacement -- if they haven't already been retired.

This urgent replacement demand means that if Boeing starts selling the 797 this year, it could get a huge number of launch orders. Many airlines simply won't have the luxury of waiting for the new aircraft to prove itself before placing an order.


(Adam Levine-Weinberg - The Motley Fool)

Thursday, February 15, 2018

Will Southwest Airlines' Hawaii Plans Be Disrupted by Labor Discord?

Southwest Airlines' mechanics are trying to block the carrier's plans for maintaining the planes it will use for Hawaii flights.

Last October, Southwest Airlines announced that it would start selling tickets for flights to Hawaii during 2018. This came after years of rumors that the U.S. airline giant would expand to this popular tourist market, potentially bringing lower fares.

However, the Aircraft Mechanics Fraternal Association -- the union representing Southwest's mechanics -- has threatened legal action to halt the carrier's plans to fly to Hawaii. Southwest Airlines wants to use outside contractors to do necessary maintenance work in Hawaii. The union claims that this would violate its contract, although the company disagrees.


The main barrier to Southwest's Hawaii flights

Flying from the West Coast to Hawaii involves traveling more than 2,000 miles over the Pacific Ocean, with no diversion airports in between. The FAA has strict "ETOPS" rules for operating routes that involve flying more than an hour from the nearest diversion airport. These include special certifications for the airline as a whole and the specific airplanes operating those routes.

Maintenance procedures are particularly important for airlines operating ETOPS routes. Given the importance of avoiding aircraft problems in the middle of the ocean, the FAA has special rules beyond what is normally required for commercial airlines.

The ETOPS certification process is currently the primary sticking point preventing Southwest Airlines from beginning flights to Hawaii. Depending on how quickly it can complete the approval process, Southwest may be able to launch its first flights to Hawaii in late 2018 or it may have to wait until 2019.


Why maintenance is a challenge for Hawaii flights

For Southwest Airlines, flying to Hawaii introduces some complications from a maintenance perspective. Most flights from the West Coast to Hawaii leave in the morning and arrive in the early afternoon, in time for hotel check-in. Return flights typically leave in the afternoon and arrive back on the West Coast in the late evening.

Southwest hasn't released any flight schedules for Hawaii, but it isn't likely to deviate from this general pattern. One of the main alternatives would be an evening departure from the West Coast and a red-eye return flight. However, Southwest has never operated red-eyes -- although it could change that policy.

As a result, it's entirely possible that there would never be Southwest Airlines planes on the ground in Hawaii outside of the hours of noon to 4 p.m. HST (roughly speaking). That would make it extremely inefficient to hire local staff to carry out ETOPS maintenance inspections in Hawaii, as there would only be a few hours of work each day.

The solution gets caught up in bargaining

Rather than hiring local maintenance staff in Hawaii, Southwest Airlines wants to use outside contractors to perform ETOPS checks on its aircraft there. On the West Coast, it would use its own staff.

This plan doesn't sound unreasonable on its face. However, Southwest's mechanics are still working under a contract that became amendable more than five years ago. (Airline labor contracts never formally expire.) The mechanics are seeking raises and job protections, and they aren't inclined to do any favors for management until a new contract is implemented.

Ideally, Southwest Airlines and the mechanics would sign a new contract during 2018 that would directly address the issue of outsourcing maintenance in Hawaii. However, if they don't reach an agreement, the courts may have to decide whether Southwest's plan violates the existing contract. That would raise a risk of the carrier having to postpone its Hawaii service.


Not much reason to worry -- yet

Despite all of the tough talk from the mechanics union, management and the union aren't very far from one another on most contract issues. The differences in the two sides' pay proposals are extremely small in comparison to Southwest Airlines' annual earnings. Instead, the main issue of contention appears to be the "scope" section that determines what work must be performed by Southwest's in-house maintenance staff.

Reaching an agreement on this issue won't be easy, but there's still time to make a deal. It should be possible for Southwest Airlines to trade some combination of job protections and pay raises for the flexibility to outsource maintenance at far-flung airports where it would be prohibitively expensive to rely on full-time staff.

Given Southwest's history of relatively peaceful labor relations, investors shouldn't worry too much about this contract dispute derailing the carrier's Hawaii plans.


(Adam Levine-Weinberg - The Motley Fool)

Wednesday, February 14, 2018

Airbus A321LR completes nonstop Paris - New York test flight

Airbus announced that on February 13, 2018 its long-range aircraft A321LR successfully completed nonstop flight between Paris (France) and New York (U.S.) for the first time. According to the manufacturer, the A321LR “has the longest range of any single-aisle commercial aircraft today” as it is able to fly 7,400 kilometers nonstop.

The aircraft, powered by two CFM International LEAP-1A engines, flew from Le Bourget Airport near Paris to the New York region’s John F. Kennedy International Airport.

According to Airbus, A321LR is “well suited” for intra-regional airline segments in Asia, the United States and other markets and the Paris-New York flight demonstrates this jetliner version’s ability to “serve new markets and operate on heavily-traveled North Atlantic routes”.

The A321LR is the next step of Airbus’ twin-engine A321neo that has captured more than an 80 percent share in its middle-of-the-market category. Airbus expects the A321LR to continue this trend. The manufacturer also notes having already received over 100 orders for the aircraft with the first customer delivery expected in late 2018.

The A321LR performed its maiden flight on January 3, 2018.The transcontinental flight on February 13, 2018, is part of nearly 100 hours of flight tests in advance of the jetliner’s airworthiness certification, expected in the second quarter of 2018.

(Airbus / AeroTime News)

Spirit delivers 10,000th Wichita-built 737 fuselage to Boeing

Spirit AeroSystems Inc. this week delivered the 10,000th Wichita-built 737 aircraft fuselage to Boeing.

The milestone number, which was confirmed by the company, stretches back decades to when the Spirit facility was still part of Boeing Commercial Airplanes and where production on the 737 dates back to the mid-1960s.

A company spokesperson says Spirit will hold an event to celebrate the achievement in the coming weeks.

Spirit, which has work on all Boeing commercial programs, builds about 70 percent of every 737 that the company delivers. Those deliveries now are comprised of the company’s Next-Generation 737 models and the growing 737 MAX family.

The 737 fuselages are transported by rail from Wichita to Boeing's assembly line in Renton, Washington.

Local work on the aircraft also involves numerous other smaller companies in the local supply base, making the high-volume 737 the most important aircraft program to the local economy.

And new delivery milestones are only going to continue to be hit in the coming years as Boeing will again increase the build rate on 737 this year to 52 aircraft per month, on its way to 57 per month in 2019.

Boeing had orders on its books at the end of January for 4,648 of the narrow-body 737s, representing years of continued work on the program for Spirit and the commercial aerospace cluster in Wichita.


(Daniel McCoy - Wichita Business Journal) 

Monday, February 12, 2018

Southwest Airlines' dispute with its mechanics could stall flights to Hawaii

Four months after Southwest Airlines announced plans to start flights to Hawaii, a smoldering dispute between the Dallas-based carrier's management and its aircraft mechanics threatens to delay the highly anticipated launch to the islands.

The discord also could affect passenger safety if changes aren't made, the Federal Aviation Administration has warned.

Southwest is in negotiations for a new contract with the Aircraft Mechanics Fraternal Association, or AMFA. The negotiations have dragged on for more than five years.

Southwest plans to outsource maintenance work related to its Hawaiian operations — a plan the union opposes. The issue has become a main sticking point in the negotiations, Bret Oestreich, national director of AMFA, told the Dallas Business Journal in an email interview.

“Southwest Airlines needs to stop playing games and negotiate in good faith with their aircraft maintenance technicians,” Oestreich said. “Southwest continues to want to increase the outsourcing of the aircraft maintenance footprint. We do not want to negatively impact expansion to Hawaii, but AMFA needs black and white job protection language.”

Southwest did not respond to interview requests for this story.

In order for Southwest’s Boeing 737 aircraft to fly long distances over the ocean, including service to Hawaii, the planes must get special “extended operations,” or ETOPS, certification and maintenance.

It’s AMFA’s position that Southwest is violating the current collective bargaining agreement by outsourcing ETOPS-related and other maintenance work to third-party vendors. The dispute is in arbitration

Southwest said in a previous statement that the planned flights to Hawaii do not violate the current collective bargaining agreement.

“At Southwest, our goal is to ensure reliable operation of our ETOPS-equipped aircraft through multiple maintenance and safety avenues, as there is no higher priority than the safe operation of our aircraft," said Russell McCrady, Southwest Airlines vice president of labor relations.

AMFA members say it’s not just their jobs they’re worried about, but passenger safety.

Southwest has been penalized for maintenance missteps involving companies to which the airline outsourced work in the past.

In 2014, the low-cost carrier was fined $12 million by the Federal Aviation Administration over improper replacement of fuselage skins on 44 aircraft for work it outsourced to Everett, Washington-based Aviation Technical Services from 2006 to 2009. The FAA said the incorrect skin installations could have resulted in gaps that would allow moisture to penetrate and lead to corrosion, according to court documents from the case.

The $12 million fine was, at the time, the second-largest in the FAA’s history and was in addition to a $7.5 million penalty that Southwest paid in 2011 over missed monitoring for fuselage cracking.

In the $7.5 million case, the lax oversight initially appeared to play a role when a five-foot hole tore open in the roof of one of Southwest’s older 737s in 2011, causing depressurization and necessitating an emergency landing. However, the National Transportation Safety Board two years later blamed the incident on poor workmanship during the aircraft’s manufacture by Boeing.

In addition to the ETOPS issue, major sticking points in the contract negotiation between Southwest and AMFA include pay raises, headcount protections and retroactive pay for the more than five years the company and the union have been in contract talks, Oestreich said.

Oestreich said Southwest has 3.3 aircraft mechanics per plane, the lowest ratio in the industry. To compare, Chicago-based United Airlines has 11.2 mechanics per aircraft, and Fort Worth-based American Airlines has 7.5 mechanics per plane, he said.

Pilots, flight attendants and other Southwest employee groups are projected to grow in proportion to the airline's purchase of new planes, Oestreich said. But the company wants to reduce the headcount of mechanics to 2.75 per aircraft, which it plans to accomplish through outsourcing and attrition, Oestreich said.

Southwest’s McCrady called it “illogical" to compare mechanic-to-aircraft ratios among carriers, because the number of mechanics needed to support a fleet is unique to each carrier.

"The ratio is driven by aircraft type, aircraft size, aircraft age, flight schedules and airline partnerships," McCrady said. "Making comparisons risks an apples to oranges mischaracterization."

Meanwhile, Southwest mechanics over the past year have filed over a dozen whistleblower complaints alleging a variety of grievances, including pressure to gloss over maintenance issues.

The complaints are filed by individual mechanics, not the union, and investigated independently by the FAA and the Occupational Safety and Health Administration. The government agencies then rule on whether the complaint is substantiated or not.

An Oct. 25, 2017 report following an investigation of several whistleblower complaints warned that a lack of collaboration between employees and management at Southwest Airlines is threatening the quality of aircraft maintenance.

“The environment at Southwest Airlines — specifically lack of communication, lack of training, perception that airworthiness findings will result in disciplinary actions for all involved to include mid-level managers — if not addressed will impact the value of quality having a direct effect on the status of aircraft airworthiness,” says the memo from James Gardner, deputy director of Air Carrier Safety Assurance for the FAA.

The union thinks that management wants mechanics to avoid documenting discrepancies, while management’s perspective is that the mechanics want to go beyond the scope of their tasks to find and document discrepancies that may or may not impact operations, Gardner’s memo says.

“This dichotomy has created an environment that if not corrected will have a detrimental impact on the airline and its fleet,” the memo says.

Gardner cites as an example a complaint involving a flight control rudder balance weight that had damage his report characterized as “substantial.” The aircraft maintenance technician was inspecting another part when he noticed visible corrosion on the rudder weight.

“After reporting what he found, the individual was questioned as to why and how he came to notice this when he was not conducting work on the rudder,” Gardner said, “rather than being praised for finding a serious airworthiness issue.”

Southwest management pointed out that the issue with the rudder was addressed, but “the impact to the employees and the overall maintenance organization arguably is impacted by the questioning,” Gardner noted.

“This event led to the discovery of a systemic issue with the fleet and now has involvement with the carrier’s engineering and the aircraft manufacturer,” Gardner’s memo adds.

In a separate and independent FAA field investigation of the carrier's Los Angeles maintenance operations conducted Sept. 20, 2017, the agency's investigators reported that all of the mechanics except two felt "pressured and under scrutiny" as to whether they were finding too many things wrong with the aircraft.

Mechanics in Los Angels were told “Dallas is watching us, don’t make us look bad with delays,” according to whistleblower documents.

The FAA investigators said a lack of trust and communication combined with fears of threats and reprisals resulted in "a degraded level of safety."


(Bill Hethcock - Dallas Business Journal) 

Airbus’s Most Important Aircraft Can’t Shake Its Teething Problems

Airbus's most important aircraft just can’t shake its teething problems.

The European manufacturer has been forced to suspend some deliveries of its A320neo jet following another issue with the engines supplied by Pratt & Whitney. IndiGo, the Indian low-cost airline that’s the plane’s biggest customer, on Sunday disclosed three in-flight shutdowns, and said pilots have had to turn back before taking off in three other instances -- an alarming new problem for a Pratt power plant that’s been hobbled by glitches from the start.

Replacing the engines is the “best possible precautionary measure” to avoid further mishaps, IndiGo spokesman Ajay Jasra said Sunday.

As many as 11 of the 113 Pratt-powered A320neos delivered by Airbus have been grounded, according to people familiar with the matter, with 43 in-service engines affected in total. All are from the most recent batches to come off the engine-maker’s production line. Further turbines at both Airbus and Pratt facilities are affected, they said. Three of the grounded planes are at IndiGo, the airline said. Airbus declined to identify the other airlines.


More Fuel-Efficient

It’s impossible to overestimate the importance of the A320 for Airbus. It put the European planemaker on the map three decades ago, allowing the company to go from a speck in Boeing’s rear-view mirror to powerful equal in what has become a de-facto duopoly in the global civil-aircraft market. Airbus churns out more than 50 of the aircraft each month, and the promise of the neo with its more fuel-efficient engines turned the model into the fastest seller in commercial aviation history, forcing Boeing to respond with a refreshed 737.

Airbus has traditionally offered two engine options on the A320, and the company maintained that approach on the neo. Customers can choose between the Pratt & Whitney model and a type built by the CFM joint venture between General Electric Co. and France’s Safran for Pratt, the introduction of the two-year-old neo was a chance to solidify its position in the lucrative market for single-aisle planes, which form the backbone of most global airline fleets.


Durability Issues

Pratt, a unit of United Technologies Corp., invested $10 billion to develop the geared turbofan, now its most important product. The latest issue undermines its efforts to move past earlier snags, including a cooling problem that marred its commercial introduction in early 2016, and subsequent durability issues and delivery delays. Pratt said Friday that the problem was isolated to “a limited subpopulation” of the engines, and had to do with a “knife edge” compressor seal.

Shares of parent United Technologies fell 1.9 percent on Friday, the biggest slide of any member of the Dow Jones Industrial Average, while Airbus dropped 2.3 percent the same day in Paris. Shares of InterGlobe Aviation Ltd., which operates IndiGo, declined as much as 1.7 percent in Mumbai on Monday.


Compensation Costs

If the latest problem leads to penalty payments to IndiGo and other customers, it wouldn’t be the first time Pratt was on the hook financially. Greg Hayes, chief executive officer of United Technologies, said last April that Pratt incurred costs to retrofit the engines to address durability issues, and related to “helping the airlines through some of this.” He didn’t specify the exact amount, but he said “it’s not material.”

The early glitches at Pratt led many customers to wait on the sidelines: The competing CFM engine outsold the GTF on the A320neo by a 10-to-1 margin in early 2017. Pratt won several key orders late in the year as the earlier issues subsided, and executives at Airbus and United Technologies said the manufacturer seemed to be moving on from a difficult chapter.

ANA Holdings Inc., Hong Kong Express Airways Ltd. and Go Airlines India Ltd. are some of the other carriers in the region that have A320neos with Pratt engines in their fleet.

While Pratt works on a fix, IndiGo said it will take delivery of older, less-efficient A320ceos to fuel its growth. Pratt is also working closely with IndiGo to provide replacement engines, having replaced 69 of them in the past 18 months.

IndiGo said Saturday that it canceled some flights after the European Aviation Safety Agency warned of a new issue with the engines and said it was investigating. The regulator said Friday that operators with planes using two affected engines must stop flying them within three flight cycles. Aircraft with one affected engine are restricted from certain extended-range flights.

“Airbus and Pratt are working in close cooperation and will be swiftly communicating on the way forward to regain normal operations and resume aircraft deliveries,” spokesman Jasra said.


(Anurag Kotoky, Benjamin D Katz, and Rick Clough - Bloomberg News)

WestJet CEO Sees Boeing's Slow-Selling Max 7 as Key to Savings

Boeing’s slow-selling 737 Max 7 has a big fan in Western Canada.

WestJet Airlines next year will become the second carrier, after Southwest Airlines Co., to operate the smallest version of Boeing’s upgraded workhorse. The Calgary-based company is set to receive five of the single-aisle jetliners next year.

“We love those planes,” WestJet Chief Executive Officer Gregg Saretsky said in an interview, citing the aircraft’s range and 12 additional seats compared with the Boeing 737-700, a linchpin of the airline’s fleet. “It’s great for long, thin markets.”

Max Headroom

WestJet is adding more Max 7 planes than any other model through 2027.

Saretsky is counting on the Max 7 and two larger variants of the 737 to boost the number of seats and reduce fuel consumption, which should contribute to WestJet’s push to achieve annual savings of as much as C$200 million ($160 million) over the next five years. The CEO is also betting on efficiencies from the deployment of 10 Boeing 787 Dreamliners as WestJet expands long-distance service.

WestJet advanced 11 percent in the 12 months ending Feb. 9, while larger rival Air Canada surged 68 percent. Canada’s benchmark S&P/TSX Composite Index fell 3.7 percent.


Jetliner Rollout

Boeing rolled out the Max 7, the third member of its upgraded 737 family, at its Renton, Washington, factory Feb. 5. The milestone marked the first public appearance by the jet before it begins flight-testing.

The model is longer and flies a greater distance than Boeing had originally planned. With input from Southwest and WestJet -- and as sales flagged -- Boeing decided to stretch the frame to squeeze in two more rows of passengers. The Max 7 can now fly as many as 172 travelers, and as far as 3,850 nautical miles.

That’s the longest range of any member of the Max family. As travel demand and fuel costs rose over the past 15 years, airlines gravitated to larger single-aisle planes such as the Max 8 and Airbus A320neo. The Max 7 has also faced tough competition from the largest of Bombardier's C Series models, the CS300.

WestJet is scheduled to receive 23 of the Max 7 planes through 2027. It’s also taking 16 of Boeing’s Max 8 jets and 12 of the Max 10 aircraft.


Adding Dreamliners

The airline is adding its first three Dreamliners next year. Saretsky vows that the introduction will be smooth -- not like two years ago, when mechanical issues and delays marred the debut of used Boeing 767s that WestJet leased as it began flying to London from Toronto and western Canada. The 767s are now operating well, he said.

With the 787 in mind, WestJet has applied to civil-aviation authorities in Canada and abroad for permission to fly to China and Japan, Saretsky said. WestJet will probably announce in July which foreign cities it plans to serve initially with the 787.

“The beauty of the 787-9 is it has very long legs,” Saretsky said by telephone Thursday. “It can fly pretty much anywhere in the world from Canada. It can make India nonstop, it can make China nonstop, it can do any destination in Latin America or Europe nonstop.”


Discount Clash


WestJet is also starting a discount carrier called Swoop, which drew a labor complaint from the Air Line Pilots Association in connection with the airline’s efforts to recruit aviators.

WestJet declined Feb. 9 to comment on the complaint. A day earlier, Saretsky said Swoop would begin operating in June, as scheduled. The company has received more than 9,000 job applications for the 500 pilot and flight attendant positions it wants to fill this year, he said. It would prefer to hire as many WestJet pilots as possible.

Swoop is scheduled to begin operating with three Boeing 737 jets, rising to 10 by mid-2019. Over time, the unit could have as many as 40 planes in its fleet, Saretsky said, fueling the need for pilots.

“There won’t be a problem filling those roles,” he said. “If our pilots choose not to pursue that career path, we will go outside WestJet to fill those vacancies. We have several hundred applications already from very qualified pilots that are flying at other Canadian airlines, and from Canadians flying in the Middle East or China.”


(Frederic Tomesco - Bloomberg)

Friday, February 9, 2018

Sichuan Airlines orders 10 Airbus A350-900s

Sichuan Airlines has ordered 10 Airbus A350-900s, the Chengdu-based airline said Feb. 9; the aircraft will help facilitate a rapid international expansion plan.

No delivery schedule was given for the widebodies. In 2016, Sichuan signed leasing deals to take three A350-900s from AerCap and one from Air Lease Corp.

Sichuan operates a fleet of 132 aircraft on more than 270 routes. The carrier has accelerated the pace of its international expansion with new routes that include Auckland, Dubai, Los Angeles, Melbourne, Moscow, Prague, Sydney and Vancouver. This year, Sichuan is also expected to launch routes to Boston, Cairo, Copenhagen and Tel Aviv.

The new A350 deal is worth CNY20 billion ($3 billion ) at list prices.


(Katie Cantle - ATWOnline News)

Singapore Airlines Announces World's First Boeing 787-10 Route

Singapore Airlines is the delivery customer of Boeing’s next-generation 787-10 Dreamliner. The airline will receive the first of the new planes, out of a total order of 49 of them, from the aircraft manufacturer in March.

Singapore has now announced that the plane’s first scheduled destination will be Osaka beginning May 3, 2018. The route from Singapore to Osaka is just over 3,000 miles and clocks in at six hours, fifteen minutes, giving travelers plenty of time to test out the jet’s bells and whistles.

Prior to the launch of the route to Osaka, the airline will fly the 787-10 on select flights to Bangkok and Singapore in order to familiarize crew with its operation.

The 787-10 is the largest of Boeing’s Dreamliner family, which also includes the 787-8 and 787-9. It is 68 meters long, which is five meters longer than the 787-9 and 11 meters longer than the 787-8, has a wingspan of 60 meters, a cruising speed of up to 647 miles per hour and a range of up to 6,430 nautical miles.

Perhaps more interesting for fliers is the fact that Singapore’s configuration of the jet will have 337 seats total onboard, including 301 economy seats and 36 of the airline’s new regional business class seats, called the Stelia Opal, according to Australian Business Traveller.

“The introduction of our new regional cabin products on the 787-10s is part of our commitment to continuous product innovation and leadership, to enhance the premium travel experience for our customers,” said Singapore Airlines Vice President of Marketing and Planning, Tan Kai Ping.


(Eric Rosen - Forbes)

Wednesday, February 7, 2018

China Cargo Airlines McDonnell Douglas MD-11(F) (48461/475) B-2170

Taxies at San Fransisco International Airport (SFO/KSFO) on September 6, 2008. 

(Photo by Michael Carter)

UPS Order For 14 Boeing 747 Freighters Might Once Have Been For Airbus A380

United Parcel Service (UPS) just ordered fourteen more Boeing 747 freighter aircraft, announcing the deal on February 1, the 30th anniversary of the founding of UPS Airlines. The new 747s, pegged at a list price of $5.65 billion, join fourteen 747s ordered by UPS in 2016. The company cites continued growth in its air freight business and positive effects of recent US tax reform as the main drivers for the big buy. Airbus, which once offered a since-cancelled A380 freighter variant, could only watch.

UPS and Boeing are responding to the whopping 9% rise in freight demand in 2017. Meanwhile, air freight capacity (“lift”) rose only 3%, according to the International Air Transport Association, which predicts another 4.5% growth in 2018. David Abney, UPS chairman and CEO of UPS, “UPS's International segment has produced four consecutive quarters of double-digit export shipment growth.”

With all this demand, much of it driven by insatiable consumerism for everything from food to phones, the heavy lift capability of the 747 freighters is key. UPS, for example, typically flies its 747-800s on high-traffic routes to Asian cities. The big jets connect in Alaska to UPS' primary hub in Louisville and to other hubs in Philadelphia; Rockford, Illinois and Ontario, California.

UPS Airlines President Brendan Canavan, who also ordered four 767 freighters, said, “The new freighters will allow us to continue upsizing aircraft on routes and will create a cascading effect that will boost capacity on regional routes around the world.”

Boeing, of course, was pleased as punch. “UPS has clearly tapped into the power and efficiency the 747-8 Freighter brings to the market,” said Boeing Commercial Airplanes president and CEO Kevin McAllister. The 28 747 freighters ordered by UPS, along with 747 freighters ordered by other carriers, will keep the 747 production line open until at least 2022.

Ironically, while only cargo keeps the 747 production line open, the superjumbo passengers prefer, the A380, was once supposed to be the queen of air freighters as well. Although Airbus has many cargo aircraft, including the fascinating new Airbus Beluga, the UPS order might once have been filled by the A380F.

It’s getting hard to find 747s in passenger service, although Korean Airline and Lufthansa are among a handful of airlines flying 747s. But with the nostalgia-inducing last flight of both Delta and United’s 747s in 2017, no American airlines operate the plane. Instead, the larger and much more modern Airbus A380 is clearly the superjumbo of passenger preference. More than 200 A380s currently fly in passenger service, and a new order from Emirates that will bring the build total to nearly 350 and keep the A380 production line open until at least 2028 was recently announced.

Of course, with the phase-out of 747s from passenger service in US flag carriers, one could say that US carriers are operating just as many A380s as 747s. That is, zero. Nonetheless, the Boeing will keep flying for many years to come and will be built until at least 2022, 53 years after its launch in 1969. The secret? Cargo.

An A380 freighter was designed. One was actually built and flown. It would have been a formidable competitor, with a 10,000km range and 150-ton capability.

UPS competitor FedEx was announced as the launch customer for the A380F freighter, with 20 A380Fs ordered. International Lease Finance and UPS were other announced customers. Deliveries were supposed to start in August 2008 but production delays pushed deliveries back to 2009 before another round of production issues set deliveries back “at least" another year. At that point, in 2006 (a year before the A380’s first commercial passenger flight) FedEx canceled the order, replacing it with smaller but available 777 freighters.

"We had six A380s due in 2009 - almost a million pounds of lift - and the uncertainty of the schedule caused by the delay affected our ability to fulfill our lift requirements," David Sutton, FedEx managing director aircraft development, acquisitions, and sales said at the time. "We lost confidence in Airbus's ability to deliver when it said it would, and there was the prospect of further delays."

In 2005, UPS had ordered 10 A380Fs with an option for another ten. But four months after FedEx canceled its order, UPS did the same in 2007, also cites the two-year delay, adding “it decided to cancel after it learned Airbus was diverting employees from the freighter program to work on its passenger plane program.” The UPS “freighter freeze” proved the end for the A380 freighter program, although the diverted resources helped in the rollout of the successful passenger version.

Ironically, in 2016 Boeing was ready to cancel the 747. What is thought the last passenger 747 rolled off the assembly line in July of 2017 for Korean Airlines. What is keeping the Boeing production line open is more than thirty 747 freighter orders, including the 28 from UPS and smaller orders from Qatar Airlines (itself an A380 passenger customer), Nippon Cargo, and AirBridge.

Although the A380 has become a success as a passenger plane, impressing airlines and customers alike, the end of the freighter program a decade ago means the A380 won’t have the same end-of-life insurance policy as the aging 747.


(Michael Goldstein - Forbes)

Southwest Airlines Boeing 737-7H4(WL) (29821/950) N411WN

 
Taxies to Rwy 30 at Long Beach Airport (LGB/KLGB) for an early morning departure on December 1, 2017.

(Photos by Michael Carter)