Friday, June 24, 2016

Southwest Airlines delays delivery of 67 Boeing 737 Max planes as fleet plans shift

Southwest Airlines will delay the delivery of 67 Boeing 737 Max planes by four to five years as part of a restructuring of its aircraft order book, company executives said Thursday.

The airline says the moves will help it balance its fleet growth and maintain capital flexibility. The change will defer $1.9 billion in planned capital spending beyond 2020 but will not affect the company’s overall target of expanding its fleet by 2 percent per year through 2018, chief financial officer Tammy Romo said during a presentation to investors in New York City.

“It supports our fleet modernization efforts … and provides significant flexibility as we manage our strategic growth opportunities over the long term,” Romo said.

The changes follow an April announcement that the company will accelerate the retirement of its remaining “Classic” 737-300s to phase the plane out of its fleet by the third quarter of 2017.

Those planes are being phased out earlier than planned to simplify the pilot training process, leading to a temporary dip in Southwest’s fleet size that the company will partially offset with the addition of two pre-owned 737-700s in 2016 and the accelerated delivery of six 737-800s from 2018 to 2017.

Southwest expects to end 2016 with 723 aircraft and dip to about 700 aircraft in 2017 before growing to between 730 and 750 planes in 2018, depending on the exercise of purchase options, Romo said. The 67 planes affected by Thursday’s announcement were scheduled for delivery between 2019 and 2022 but will now be delivered in 2023 through 2025.

The company still expects the first delivery of the new, more fuel-efficient 737 Max-8s in 2017, with the planes expected to enter service around October of next year.

Whether Southwest’s pilots will agree to fly those new planes remains to be seen. The pilots union, which is in year four of protracted contract negotiations with Southwest, argues that its current contract does not cover the 737 Max-8 and has said its pilots won’t fly the latest model until a new contract is reached.

Southwest executives disagree with this interpretation, prompting a federal lawsuit by the pilots union that is currently pending.

The rest of the investor presentation detailed the company’s growth over the last five years and plans for the future.

The company has undergone a tremendous amount of change, CEO Gary Kelly said, including the acquisition of AirTran Airways, an expansion at Love Field and the launch of international service.

“One of the goals that we’ve had for 2015 and 2016 is to allow our network, our systems, our people all time to mature and stabilize,” Kelly said. “In the meantime we’ve also been, in the background, if you will, investing for the future and preparing for another surge of change that is coming for 2017.”

Those changes include the launch of a new reservation system, which will be put in place starting in late 2016, the completion of a new international terminal at the Fort Lauderdale-Hollywood International Airport and the introduction of the 737 Max-8.



(Conor Shine - The Dallas Morning News)

Brazilian air force tests KC-390 transport

Paratroopers jump from Embraer's KC-390 during an operational test of the transport.
(Brazilian Air Force photo)


The Brazilian air force reports it has begun operational testing of Embraer's KC-390 transport and tanker aircraft.

The first test earlier this month involved the dropping of paratroopers and was part of a test campaign to verify aerodynamic modifications made to the aircraft and to help define the aircraft's final configuration.

The testing includes the dropping of supplies and checks of the stability of extractor parachutes. The tests will continue until July 9.

"There were major concerns about the paratroopers' exit from the fuselage because there is an aerodynamic flow around a new airframe," said Col. Claudio Evangelista, the air force's technical manager of the KC-390 program. "Fortunately, the feedback we received from the military was very positive; they reported that the exit was very smooth."

The KC-390 is a medium-sized, twin-engine jet aircraft. It can carry as many as 80 passengers, and its cargo payload is 59,500 pounds.

The KC-390 conducted its first flight last year.

The Brazilian Air Force has ordered 28 of the planes.

(Richard Tomkins - UPI)

Boeing's deal with Iran to include broad range of jets

A provisional deal calling for Boeing to supply a total of 109 aircraft to Iran includes small and large jetliners worth $20.37 billion (£13.7 billion) at list prices, both sold directly and leased, two people with knowledge of the deal, including a senior Iranian official, said on Thursday,

The deal, which is yet to be approved by both governments, includes 80 aircraft worth $17.58 billion to be sold directly by Boeing, including 34 wide-body jets: 15 each of the 777-300ER and 777-9 models and 4 of the 747-8, one of the people said.

It also includes the direct sale of 46 narrow-body jets: 40 of the upcoming 737 MAX model and 6 of the current 737NG model.

Under the same provisional deal, Boeing will arrange for IranAir to acquire a further 29 737NG aircraft through leases.



(Tim Hepher - Reuters / Yahoo Business)

Boeing nears 747-8F deal with Volga-Dnepr



Cathay Pacific Cargo Boeing 747-867F/SCD (39238/1427) B-LJA departs Los Angeles Internatioal Airport (LAX/KLAX) on January 26, 2012 sporting the carriers "Hong Kong Trader" livery.
(Photo by Michael Carter)
 

Boeing Co. is nearing a $4 billion deal with Russia’s largest air-freight company that would help extend the life of the iconic, hump-nosed 747 jumbo jet amid waning demand for four-engine aircraft, people close to the transaction said.

The U.S. planemaker is in advanced talks with AirBridgeCargo Airlines and its Moscow-based parent, Volga-Dnepr Group, to convert a year-old commitment into more than 10 firm orders for 747-8 freighters, two of the people said. The agreement could be announced as soon as the Farnborough Airshow next month in England, according to four people briefed on the deal, who asked not to be identified because the talks are confidential.

The deal would provide a crucial lifeline for the “Queen of the Skies” as Boeing tries to preserve production until the air-cargo market revives or shipping companies start to replace aging wide-body fleets. The 747 freighter, prized for a hinged nose that allows large cargo to be loaded at the front, is Boeing’s second-most expensive commercial jet, with a list price of $379.1 million. Buyers typically negotiate discounts.

Converting commitments to firm orders starts the process of allocating manufacturing resources and production slots to build the planes.

Boeing rose 2.6 percent to $133.13 at 9:37 a.m. in New York. The gain was the biggest in the Dow Jones Industrial Average, which climbed 1.4 percent in a global rally fueled by signs that the campaign to keep the U.K. in the Europe Union was gaining strength.

A representative of Volga-Dnepr declined to comment on the talks, but said the airline plans to take all 20 jumbos it committed to last year. A Boeing spokesman declined to comment.

Airline Shift

Sales have dwindled for Boeing’s four-engine 747 and the Airbus Group SE A380 superjumbo jetliner as airlines have shifted long-range travel to more-efficient twin-engine models like Boeing’s 777. Boeing had just 22 unfilled orders for the 747 through May, according to its website. The planemaker halved annual output of its largest commercial jet to six planes in January, citing declining sales.

The potential Russian savior for the 747 -- which brought long-range travel to the mass consumer market when it was introduced by Pan American World Airways in 1970 -- isn’t just a Boeing customer. Volga-Dnepr also transports large aircraft segments for Boeing’s 787 Dreamliner from suppliers to the planemaker’s factories.

‘White Tails’

At the Paris Air Show last June, Volga-Dnepr signed a memorandum of understanding to buy 20 of the 747-8 freighter. The shipping company took delivery in November of the first two aircraft, so-called white tails built for other customers whose orders fell through.

The Russian freight hauler confirmed it is the unidentified buyer for two of the four jumbo freighter orders Boeing recorded in March, saying the planes will be delivered later this year. The first of those two 747s has been repainted with the livery of CargoLogicAir Ltd., a Volga-Dnepr subsidiary.


(Julie Johnsson - Bloomberg Business)

USA-Serbia nonstops now flying for first time in 24 years


Air Serbia will operate the Airbus A330-202 on the new route.
(Air Serbia)


Air Serbia launched its inaugural flight to New York on Thursday, giving the Balkan nation of Serbia its first nonstop link on a local carrier to the United States in more than two decades.

The Belgrade (BEG/LYBE) to New York (JFK/KJFK) flight also marks Air Serbia’s first trans-Atlantic route. That in itself is a milestone development for the airline, Serbia’s new national carrier that sprouted from the demise of the old loss-making state-owned JAT Airways.

Air Serbia launched in 2013 after fast-growing Middle East carrier Etihad Airways acquired a 49% stake in then-ailing JAT. The company rebranded and began flying with some of JAT’s leftover assets.

Etihad, perhaps best known for its high-end service from its hub in Abu Dhabi, is managing the operations of Air Serbia for the airline’s first five years. The rebranding went beyond the carrier's name and logo, including everything from crew uniforms to customer-service expectations.

With that, Air Serbia became one of the latest in Etihad's growing list of strategic “equity airline partners." Air Berlin, Alitalia, Jet Airways and Virgin Australia are among those Etihad has invested in as it faces fierce competition from Gulf rivals Emirates of Dubai and Doha-based and Qatar Airways.

Air Serbia’s inaugural 2013 flight flew from Belgrade to Etihad’s hub in Abu Dhabi, though most of its early network focused on routes to Europe and the Mediterranean region.

Now, however, the service to New York puts Air Serbia squarely into the lucrative market for trans-Atlantic flights. The carrier is flying the route with 254-seat Airbus A330-202 aircraft with 18 lie-flat business-class seats and 236 in coach.

Air Serbia’s New York-Belgrade route also restores service predecessor Jat was forced to discontinue in 1992 amid conflicts during the breakup of the former Yugoslavia.

James Hogan, CEO of the Etihad Aviation Group and the vice chairman of Air Serbia, lauded both the launch of the new service and the cooperation of the Etihad group airlines.

“The Air Serbia touching down at John F Kennedy Airport is a vibrant, growing airline, one which represents the very best of modern Serbia,” Hogan wrote in an open letter in The National newspaper, based in the United Arab Emirates.

“The New York service is a perfect example of our cooperation,” Hogan added. “The Airbus A330 has been leased from Jet Airways; the pilots were trained by Alitalia; and the cabin crew were trained in Abu Dhabi. Together, the Etihad Airways family rallied around to help make this happen.”

While the new service is a step forward for Air Serbia and its Etihad Group partners, likely won't sit well with the three big U.S. carriers that have raised allegations of unfair subsidies for Etihad and Gulf rivals Qatar Airways and Emirates. Those Gulf carriers have steadfastly rejected those claims as false, but Delta, American and United have continued to press the U.S. government to freeze or restrict the Gulf carriers' access to the U.S. market.

Against that, Ben Sandilands of the Plane Talking blog sums it up by saying the new Air Serbia link adds to Etihad's "indirect interests in links across the ... lucrative North Atlantic... that aren’t available to it in its own right."

"It’s an example of the strategy that U.S. carriers see as a threat to their hold on routes where it had long been assumed traffic from second tier cities in former eastern bloc European cities would default to them either by new non-stop services or via aggregating hubs like London Heathrow, Frankfurt or Amsterdam," Sandilands adds in his Plane Talking blog.

(Ben Mutzabugh - Today in the Sky / USA Today)

Lockheed Martin factory rolls out first F-35A for Israel

Lockheed Martin's first F-35A for Israel at its rollout ceremony.
(Photo courtesy Lockheed Martin)


Lockheed Martin has rolled out its first F-35 Lightning II fighter for the Israeli air force.

The rollout at the company's production facility in Fort Worth, Texas, was conducted during a ceremony attended by more than 400 guests, including Israeli government and military officials.

"Israel is proud to be the first country in the area to receive and operate it," said Avigdor Liberman, Israel's Minister of Defense. "The F-35 is the best aircraft in the world and the choice of all our military leadership at its highest level. It is clear and obvious to us and to the entire region that the new F-35, the Adir, will create real deterrence and enhance our capabilities for a long time."

Israel is buying 33 F-35s, in the conventional takeoff and landing configuration, through the U.S. Foreign Military Sales program. It has named the aircraft the Adir, which in Hebrew means Mighty One.

Israel also is a contributor to Lockheed's production of the fighter -- Israel Aerospace Industries produces wings for the plane, Elbit Systems works on the Generation III helmet-mounted display system to be used by F-35 pilots, and Elbit Systems-Cyclone produces F-35 center fuselage composite components.

"We're honored to partner with Israel and help strengthen the deep and lasting partnership between our two nations," said Marillyn Hewson, Lockheed Martin chairman, president and chief executive officer said at the ceremony Wednesday. "The F-35 will help Israel remain a beacon of strength and stability in the region and support a safe and secure homeland for generations to come."

The F-35A rolled out will be delivered to Israel at the end of the year.

(Richard Tomkins - UPI)

Monday, June 20, 2016

China's New Y-20 Is the Largest Military Aircraft Currently in Production

The Y-20 is China's version of the C-17 Globemaster—a tank-carrying, supply-delivering, troop-transporting workhorse of a plane.
 (Xian Aircraft Corporation)


The first Xian Y-20 military transport aircraft was delivered to the People's Liberation Army Air Force (PLAAF) on June 15. Developed by Xian Aircraft Corporation, the Y-20 has an empty weight of 110 short tons, making it the largest military aircraft currently in production—larger than Russia's Ilyushin Il-76. Boeing's C-17 Globemaster III is bigger than the Y-20—the C-17's empty weight is about 60,000 pounds more than the Y-20 and its payload capacity is 25,000 pounds more—but production stopped in 2015, making the Y-20 the biggest that is currently rolling out of factories.
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The Y-20—which has the official codename "Kunpeng" after a mythical Chinese bird, though it is nicknamed "Chubby Girl" for its appearance—makes China the third nation after Russia and the United States to design and develop its own heavy military transport aircraft.

The C-17 has been a major workhorse for the United States military since it was introduced in 1995, carrying troops and cargo all over the world. It allows the U.S. Air Force to quickly transport large amounts of supplies, move troops, fly large-scale air drop missions, and even transport other military vehicles such as an M1 Abrams tank, three IAV Stryker armored combat vehicles, or six M1117 Armored Security Vehicles. With the Y-20 officially in service—and the Y-20 is remarkably similar to the C-17—the PLAAF's versatility and ability to quickly mobilize large combat forces increases significantly.

With a payload capacity of 73 short tons, the Y-20 can transport China's largest tank, the ZTZ99, as well as a variety of other vehicles, supplies, or a large number of troops. The heavy transport is also ideal for large-scale airdrops and medical evacuations if necessary. The Chubby Girl has a range of 4,850 miles while carrying 40 tons of cargo, and 2,800 miles when fully laden.

Currently the Y-20 uses four Russian-made Soloviev D-30 turbofan engines, though the PLAAF plans to replace the engines with the Chinese-made Shenyang WS-20 turbofans by 2020 to give the Chubby Girl short takeoff capabilities and a greater range. In addition to functioning as a transport, the Y-20 could be outfitted as a refueling tanker for other military aircraft or used as a a strategic command center to coordinate fighter jets and drones in combat.

The first two Y-20s with the serial numbers 11051 and 11052 were delivered to the 12th Regiment of the 4th Transport Division at Chengdu/Qionglai, and several more are expected to enter service in the coming months. Centrally located around China's air base in Chengdu, the Y-20 could be quickly dispatched to wherever it is needed, from Korea to the South China Sea.

With tensions rising between the U.S. and China in the Pacific, the People's Liberation Army continues to make significant military advances.

(Jay Bennett - Popular Mechanics)

Thursday, June 16, 2016

Boeing Tallies Order for 6 Freighters, Brings Annual Total to 275

In its weekly report on orders and deliveries, Boeing Co. said that it has received six new orders for its 767 from an unidentified customer. That brings total orders for the 767 to seven for the year to date. The other one was ordered by FedEx Corp. in March and could indicate that FedEx is considering beefing up its fleet of the 767-300F freighter.

Net new orders through June 14 now total 275, based on new orders of 305 Boeing jets less 30 cancellations. The bulk of the year’s new orders, 239, have been placed for various versions of the 737. Customers have also placed new orders for 13 787s, 12 777s and four 787s, in addition to the seven new orders for the 767.

FedEx ordered 50 of the 767 freighters last summer in a deal valued at $10 billion at the 767’s list price of $199.3 per copy. General Electric Co.’s will supply its CF6-80C2 engines for all 50 of the aircraft.

Another possible customer for the new orders for the 767 is Air Transport Services Group Inc., which is leasing 20 of the planes to deliver packages for Amazon.com Inc., Air Transport is leasing the planes for terms of five to seven years, so an order placed now for new 767s will be added to the queue of 75 already on Boeing’s books.



Boeing’s production rate on the 767 is currently two per month, and the company plans to raise that to 2.5 per month by the fourth quarter of 2017. The backlog will keep the company busy until about 2020, at which time the first of the leased Air Transport planes will be coming off lease.

Amazon itself could have placed the order for the 767s, but that is less likely. Transport firm Atlas Air Worldwide Holdings Inc. also has struck a deal with Amazon for 10-year dry leases on 20 767-300 converted freighters and seven- to 10-year crew, maintenance and insurance contracts. Atlas CEO Bill Flynn said earlier this week that there are already about 150 of the planes in the global fleet that are suitable for freighter use. According to Planespotters.net, Atlas currently owns nine 767-200s and 10 767-300s.

Amazon also has acquired the right to purchase up to 19% of Air Transport Services and up to 20% of Atlas Air over the next five years.



(Paul Ausick - 24/7 Wall St.)

CAL adds freighter number three

Israeli-owned, Liege -based all cargo airline CAL has confirmed long standing plans to add a third 747 freighter to its fleet.

The deal will complete a fleet enlargement modernization program at CAL, which less than two years ago still operated two classic B-747-200 Freighters. Successive deals have now established a fleet of an ERF, an F and a BCF aircraft, said owner, chairman and chief executive, Offer Gilboa, who also confirmed that the new aircraft would be an addition rather than a replacement.

He added: "We are thrilled to announce the completion of two deals: we are introducing freighter Charlie to our fleet while keeping freighter Bravo as well. The three freighter fleet will support Cal’s Growth Strategy aimed at increasing our activity of scheduled and charter flights from our hub in Liege.”

CAL launched two weekly flights to Atlanta in the US in September 2015, although it put on hold plans to enter the Chinese market with a twice-weekly Shanghai service due to the downturn in the economy there.

Gilboa said: “Our new online station in Atlanta has expanded our capabilities in the US, and clients can rest easy knowing that we have added capacity to service them with top notch expertise, infrastructure and equipment.

“I recently returned to the position of CEO at CAL. Together with the management team we are making sure that CAL continues to grow and is on course with our strategic plans for 2016,” continued Gilboa.”

The CAL Group also includes the LACHS ground handling service in Liege, which in May was awarded a three-year contract to manage the Horse Inn at the airport. CAL specializes in dedicated charters as well as scheduled routes, and has experience in complex equine projects, including multiple charters of horses.

(Air Cargo News)

Lockheed delivers two C-130Js to U.S. Air Force

Lockheed Martin delivered two new C-130J Super Hercules aircraft to the U.S. Air Force last week, the company said.
 (Photo courtesy Lockheed Martin)


Lockheed Martin delivered two new C-130J Super Hercules aircraft to the U.S. Air Force last week, the company announced Wednesday.

Airmen from Moody Air Force Base visited Lockheed's Marietta, Ga., facility on June 9 to ferry a new HC-130J Combat King II, the company said in a statement.

The HC-130J is the service's only dedicated fixed-wing personnel recovery platform and is flown by the U.S. Air Combat Command.

Another Air Force crew arrived on June 10 to ferry a MC-130J Commando II, a multi-mission combat transport/special operations tanker, Lockheed said.

That aircraft is assigned to the U.S. Air Force Special Operations Command out of Cannon Air Force Base, N.M.

The C-130J has more than 1.2 million hours of flying combat, special operations, humanitarian, aerial refueling, firefighting and search and rescue missions under its belt, Lockheed said.

The airlifter can perform a variety of missions in austere environments.

(Geoff Ziezulewicz - UPI)

Alaska Airlines CEO says he might keep Virgin America brand

(Alaska Airlines)


Alaska Airlines CEO Brad Tilden said Wednesday that he might keep the Virgin America brand, running it and Alaska as two different products within the same airline group.

In April, Alaska announced plans to buy Virgin America for $2.6 billion, a deal which would make it a West Coast powerhouse. Both airlines have very loyal — but different — followings and almost immediately both groups expressed fears that the combination would kill off what they love about their own airline.

A decision hasn't yet been made but Tilden noted that European carriers have kept their own identity following mergers.

"We are looking at that because we do believe in the power of the Virgin America brand and we don't want to lose all that loyalty and revenue that exists today," Tilden said at the end of a speech at The Wings Club, an aviation professional group that frequently hosts CEOs as speakers.

Past aviation mergers in the U.S. have meant the death of the acquired brand. But Tilden noted that in Europe both names and cultures tend to live on. He cited the Lufthansa Group, which includes its namesake German airline, along with Swiss and Austrian Airlines. Air France and Dutch carrier KLM operate as two separate carriers despite common ownership. And International Airlines Group runs several individual brands including British Airways, Spanish carrier Iberia and Ireland's Aer Lingus.

In a brief interview with The Associated Press after the speech, Tilden said he is "taking a good look at running two brands for some period of time, perhaps forever." He also said the airline is looking to have regulatory approval for the merger by late summer or early fall.

Alaska is loved in its hometown of Seattle and throughout the Pacific Northwest. It has one of the best on-time performances, the industry's lowest complaint rate and tries to strike a balance between making a profit and keeping passengers happy. For instance, like most other airlines, it charges a fee for checked luggage. However, Alaska was the first carrier to add a guarantee — if a checked bag isn't at the pickup area within 20 minutes, fliers get $25 off a future trip or 2,500 bonus miles.

Virgin America, which is based near San Francisco airport, has its own loyal following, especially in Silicon Valley. The airline started flying in 2007 with backing from Richard Branson, the colorful British billionaire, as a minority owner — U.S. law limits foreign ownership of airlines. It quickly won over fliers with its funky mood lighting, inflight internet and individual TVs at each seat. Passengers can order meals or drinks from the screens and can even send a drink to another passenger.

But the Virgin name doesn't come cheap. In the past three years, Virgin America has spent more than $22 million in license fees to a company controlled by Branson.

Discussion of the brands came up in a question and answer session where J.P. Morgan analyst Jamie Baker noted that this is the first merger he's seen with such different corporate and passenger cultures.

"It is the thing I'm losing the most sleep over with our merger," Tilden replied.

After the speech, Baker told The Associated Press that the airline-within-an-airline model in the U.S. has been proven "time and time again, to be inefficient."

"Maintaining two distinct brands adds complexity and expense and potentially confuses passengers and employees." Baker said. "More likely is an outcome where each brand's best practices are retained. For core Alaska flyers, this could mean ordering a meal from one's seatback monitor on a flight to Anchorage."

(Scott Mayerowitz - Today in the Sky / US Today)

New survey reveals America's favorite airline and most dreaded seat mate

Southwest Airlines Boeing 737-7H4 (34951/2005) N249WN taxies towards a Rwy 20R departure at John Wayne Orange County Airport (SNA/KSNA) on May 7, 2016.
(Photo by Michael Carter)


Southwest Airlines has emerged the favorite airline among respondents in a new survey, who named the low-cost carrier the best value for money.

In a poll carried out by Airfarewatchdog that surveyed 11,000 US travelers, Southwest was chosen ahead of Delta Air Lines, American Airlines and JetBlue as the most popular carrier across several different categories.

Nearly half of respondents said Southwest offers the best value and the friendliest flight attendants.

Likewise, nearly a third said the airline offers the best frequent flier program.

Meanwhile, the most dreaded seat mate is the sick traveler (43 percent), followed by overweight passengers (18 percent) and those with bad body odor.

When it comes to booking a flight, price remains the single most important factor with the majority -- 90 percent -- agreeing it's “very important.”

Price was followed by the number of stops (72 percent); cabin cleanliness (59 percent); cabin crew politeness (57 percent) and onboard amenities (23 percent).

Atlanta's Hartsfield-Jackson International Airport -- the busiest airport in the world -- was also named the most popular hub for connections.

And nearly a quarter -- 23 percent -- said they've never flown on an international airline.

(AFP Relax News / Yahoo Business News)

Friday, June 10, 2016

Cramer: Buy Southwest Airlines: TheStreet's founder continues to be bullish on the aviation stock, as the company reported a record load factor for May.

TheStreet's founder Jim Cramer on Friday reiterated his bullish stance on Southwest Airlines.

"I urge people to buy Southwest," Cramer told TheStreet's Rhonda Schaffler, adding, "I think American Airlines is good."

As for JetBlue Airways, the company "has not been the one that I like, but it's case by case now with airlines," Cramer said.

In April, Cramer called Southwest the "single best" airline stock out there, and later that month, after Southwest reported first-quarter results that topped analysts' expectations, Cramer said he likes what Southwest is doing, noting that the company "never lost money during the down cycle."

In afternoon trading on Friday, shares of Southwest were changing hands at $43.67, down 1.2%; JetBlue shares were trading at $18.12, down 1.7%; and American Airlines shares were trading at $33.04, down 1.1%.

Cramer's latest comments on airline stocks came after JetBlue on Friday reported that capacity growth outpaced traffic in May and cut its capacity growth outlook for 2016.

The Long Island City, N.Y., airline said May traffic increased by 10.7% from a year ago, while capacity went up by 12.1%. Load factor for the month was down to 84.6% from 85.7% in May 2015.

Revenue per available seat mile, or RASM, dropped by 7% in May, and JetBlue anticipated that RASM would decline between 7.5% and 8.5% in the second quarter.

For the full year, JetBlue lowered its capacity growth forecast to between 8% and 9.5% from 8.5% to 10.5%.

For its part, Southwest Airlines on Wednesday reported a 6.4% year-over-year increase in May traffic on a 4.6% rise in capacity. Load factor of 85.8% was a record for May, bringing the load factor to 82.2% for the first five months of the year.

The Dallas airline carrier continues to estimate modest growth in operating revenue per available seat mile for the 2016 second quarter, based on May's results and positive trends in June.

Meanwhile, American Airlines on Thursday reported that May traffic grew 0.5% year over year, while capacity increased 1.7%. Domestic traffic rose 1.4% on 1.2% capacity growth, while international traffic fell 1.4% on a 0.5% increase in capacity. Total passenger load factor fell 0.9 percentage points to 81.9%.

The Fort Worth airline continues to anticipate a 6% to 8% decline in consolidated passenger revenue per available seat mile for the 2016 second quarter.

(Armie lee - TheStreet)

Monday, June 6, 2016

Airbus A380: The Death Watch Begins

Last week saw an astonishing moment of frankness from the A380’s biggest customer. Tim Clark, President of Emirates, told Bloomberg that not only had discussions on a new re-engined A380neo version of Airbus’s 525-seat jet “kind of lapsed,” but that his “main concern is that they stop producing the plane.”

This was the first intimation that sudden death is a possibility for the troubled super jumbo. And the numbers highlight this risk.

It has been years since there was any significant commercial demand for the A380, aside from Emirates steadily growing its position to 142 orders. In April, Airbus executives admitted that output in 2017 could be as low as 20 aircraft. This is far below the 30 aircraft needed for annual recurring breakeven (this excludes program nonrecurring costs; there is no way to even begin to recover the $25-30 billion or so invested in the development of this aircraft).

Plummeting output reflects a creaky order book. Emirates still has 65 outstanding orders, on top of the 77 jets it has already taken. In theory, there are another 67 A380 orders on backlog. But many of the remaining jets have little or no chance of being delivered. Qantas’s remaining eight planes have been deferred indefinitely. Ten “undisclosed customer” orders are basically dead. Virgin Atlantic’s ever-deferred order for six is basically dead too. Amedeo, a speculative and poorly conceived leasing venture, will not take any of its 20 orders.

All told, we can only identify 18 truly firm non-Emirates A380 orders on backlog. Clearly, Emirates will need to do the heavy lifting in terms of line program sustainment.

Emirates took its first A380 in 2008, with 72 delivered through the end of 2015. That’s an average of nine per year. But as demand elsewhere has vanished, Emirates has been forced to ramp up its intake. In 2015, Emirates took 14 of the 27 A380s delivered.

How long can this keep up? Emirates has just reported its first annual sales decline in a decade. Its load factor dropped 3.1 points to 76.5%. Its yield fell 10%. Ramping up capacity hardly seems like the right move now.

Meanwhile, Emirates has ordered 150 Boeing 777-9Xs, with deliveries starting in 2020. This jet has the same range as the A380, more belly cargo, just 25% fewer seats (the discounted ones, of course) and has two fewer engines. They’re more modern engines, too.

Thus, the question becomes, how long is Airbus willing to lose money, particularly when there’s no doubt about the ultimate outcome? Assuming that next year’s rate of 20 isn’t too ruinous, and assuming that Emirates can keep taking 14 per year (despite declining traffic growth rates and falling load factors), that means Airbus can sustain about three more years of production (14 Emirates planes per year, plus six for other customers). But then again, since Airbus is losing money on all of these planes, Tim Clark is correct to worry that Airbus could simply end the program at any time.

Teal Group has always provided the most pessimistic A380 forecast. But it turns out we may have been much more optimistic than reality.


(Richard Aboulafia - Forbes)

This new airplane is further proof of a growing trend in aviation

A very lovely aircraft!
(Textron)

The new aircraft offers a very spacious cabin.
(Textron)

Continuing an ever expanding trend, aircraft consumers are proving that one engine is actually better than two.

And to capitalize on this change, Textron Aviation, parent company to famous aircraft manufacturers Cessna, Beechcraft, and Hawker, revealed a widely anticipated new turboprop aircraft, to begin testing in 2018.

The Single Engine Turboprop aircraft, or SETP, will enter a very competitive but fast-growing market segment that includes the Swiss-made Pilatus PC-12 and French manufacturer Daher's TBM line.

Cruising speed of the new SETP is estimated to reach 285 knots, and the aircraft can be configured to carry up to eight passengers. The cabin features a flat floor as well as a wide rear cargo and passenger door. It pressurizes to a very passenger-friendly cabin altitude of just 6,130 feet. The aircraft also has a service ceiling of 31,000 feet.

While the Textron's Beechcraft brand already includes the well-known King Air twin turboprop line, consumer demand is increasingly moving customers toward single-engine aircraft thanks to the reliability, efficiency, and speed of modern turbine engines.

The company has also committed to using General Electric's new Advanced Turboprop engine, a major coup for the company and a loss for Pratt & Whitney, whose PT6 line of turboprop engines has been the industry standard for over half a century.

Textron has yet to reveal the SETP's final name, the brand under which it will live, or where it will be produced. While it is not releasing an actual number, Textron claimed in a recent press release that the SETP will deliver "best-in-class operating costs."

The company is accepting preorders at a unit price of $4.8 million.


(William Fierman - Business Insider)

After Airbus, Iran edges towards historic Boeing deal

Iranair is discussing a historic aircraft purchase with Boeing, potentially matching an order for over 100 jets from Airbus, but obstacles to both deals need to be resolved so that last year's accord to lift sanctions can be honored, its chairman said.

The Iranian flag carrier is also talking to Boeing about providing support for its ageing fleet following the deal between Tehran and six major powers to ease economic sanctions in return for curbs on Iran's nuclear activities.

"Meetings and negotiations are going on. We hope that in the future we can reach an understanding with each other," Iranair Chairman Farhad Parvaresh told Reuters in an interview.

"The number and type of aircraft have to be discussed in the future, but the first step is to have a mutual understanding."

Iranair agreed in January to buy 118 jets worth $27 billion at list prices from Airbus. The deal was conditional on U.S. export licenses because of the quantity of U.S.-built parts.

Asked whether Iranair was looking at an even bigger deal with Boeing, Parvaresh said, "No, not bigger than Airbus; maybe close, but this also depends on the situation. Anyhow Iran is in need of at least 300 aircraft for the next decade."

He said any such deal also depended "of course on our government as well, because we are a state-owned company".

After decades of estrangement, Boeing officials have visited Iran to pitch their wares to Iranair and some other carriers under a marketing license granted by the U.S. government in February.

The U.S. company would need another permit to strike a deal and then further export license's, similar to those required by Airbus due to the use of U.S. technology, to complete it.

Some industry sources expect a preliminary deal for at least 100 Boeing jets to be reached fairly soon.

"We’re following the licensing process outlined by the U.S. government," said Boeing Middle East spokesman Fakher Daghestani.

Parvaresh said "a lot of issues" needed to be clarified in talks between Airbus and Washington over export license's for European planes under last year's nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA).

"We are very hopeful and optimistic that the license's will be released in the near future. Based on the JCPOA, there should not be any big issues or excuses and they should clarify if there are any questions."

Asked about the status of discussions with the U.S. Treasury, Airbus spokesman Justin Dubon said, "We are making progress".

FINANCE TALKS 'PROGRESSING'

Even with those license's, Iranair faces what aviation sources still regard as awkward hurdles in financing any deals.

The airline is talking to banks and leasing firms who could step in to take all or part of the Airbus deal, which must avoid the U.S. financial system under remaining core sanctions.

"Our deal with Airbus is in euros. The financiers we are talking to...are finding a solution to pay Airbus in euros and then we would have to pay the financiers. We are working on this," Parvaresh said, adding these talks were "progressing".

He said some banks were willing to get involved but lacked sufficient capacity to tackle the whole package.

"Everybody is willing to take 10 or so aircraft which is not in our interest. We would rather not have more than one or two (financiers) to make it easier, and we have had very fruitful discussions with some financiers who want to work with Iran and especially Iranair."

Financial sources say some Middle East and Chinese leasing companies appear willing to facilitate plane sales to Iran. But such deals would still need the backing of banks, many of which worry about the fate of assets if sanctions are reimposed.

U.S. Secretary of State John Kerry said in April Washington was not against foreign banks doing business with Iran under the deal between Iran and six powers collectively known as 5+1.

Tehran, however, has complained about not getting the full economic benefits of the deal. Parvaresh said he hoped recent statements would reassure banks about doing business in aviation, which would send an important signal to other sectors.

"Some people are making propaganda that the JCPOA will not happen because the banking issues are not resolved. This is a responsibility of the 5+1 to resolve it as committed."

Iran is dangling the prospect of significant business for Western plane-makers as it emerges from decades of sanctions.

The country has a fleet of 250 aircraft, of which 90 are grounded due to the economy or missing parts, Parvaresh said.

Of that total, 80 percent will need to be renewed in the next decade, he said, adding that growth could add even more jets to Iran's shopping list.

"In the next 10 years, we need at least 250-300 aircraft or even more if everything is going well."

(Tim Hepher - Reuters / Yahoo Business News)

Emirates closes on A350/787 order decision

Emirates is finalizing an order for either the Airbus A350 or Boeing 787 but does not expect to be in a position to complete a deal in time for July's Farnborough air show.

The evaluation has now been running for some two years, and airline boss Tim Clark says he's "still at it", adding that "we haven't made a decision" and that he doesn't expect one by Farnborough.

Clark says the performance offered by the new-generation wide-body twinjets "gives whoever has them great potential".

He adds: "I'm very impressed with what they have managed to do with these aircraft. It gives the industry the tool to serve the markets in a very incisive manner and at a very, very good set of trip economics." However, Clark declined to specify which type would be chosen or the size of the expected order.

The evaluation includes the 787-9 along with the larger but shorter-range 787-10, which Clark describes as "a good 10h aircraft". The focus of the Airbus evaluation is on the A350-900 rather than the larger -1000 or proposed "-2000" stretch, which Clark refers to as the "A350-1000-ish" as its design specification is still "a moveable feast".


(Max Kingsley-Jones - Flightglobal News)

Friday, June 3, 2016

Southwest Airlines Boeing 737-7H4 (29826/1093) N422WN "Shark Week" Livery


(Photos Courtesy of Jacob Erlick - Southwest Airlines)

Taxies at Dallas Luv Field (DAL/KDAL) on June 2, 2016 as it prepares to depart bound for John Wayne Orange County Airport (SNA/KSNA) on it first leg following the application of this special Shark livery dedicated to the Discovery Channels "Shark Week." 

Lockheed Martin flies T-50A

The T-50A pilot training aircraft being offered to the U.S. Air Force.
(Photo courtesy Lockheed Martin)


Lockheed Martin has conducted an initial flight test of its T-50A jet aircraft, which it is offering the Air Force in the Advanced Pilot Training competition.

The newly configured T-50A is a variant of the T-50 developed by Korea Aerospace Industries and Lockheed Martin.

The aircraft has a maximum speed of 1,020 miles per hour at 30,000 feet and a range of 1,150 miles.

"The aircraft in its new configuration with the 5th Gen cockpit and other upgrades performed flawlessly," said Mark Ward, Lockheed Martin T-50A lead test pilot, after his flight in Sacheon, South Korea. "I have no doubt this aircraft will close the gap which currently exists between the trainer fleet and 5th Generation fighters."

Lockheed Martin said the T-50A meets all APT competition requirements and has a ground-training system.

Lockheed Martin is currently standing up its T-50A Final Assembly and Checkout site in Greenville, S.C.

Details of the flight test were not disclosed.

The T-50 Golden Eagle trainer and light attack aircraft entered service with the South Korean Air Force in 2005.

(Richard Tomkins - UPI)

Qatar Airways Drops Airbus Order, May Consider Switching to Boeing 737

Qatar Airways, once the launch customer for the new A320neo from Airbus, has now cancelled its first delivery of the plane, citing delays due to problems with the Pratt & Whitney geared turbo-fan engines that have plagued the aircraft for months. According to airline CEO Akbar Al Baker, Qatar Airways should have had five A320neos in service by now.


Al Baker has floated two options. One is switching to the current version of the 737 from Boeing Co. and then converting to the 737 MAX when that aircraft becomes available. The other is switching its engine choice to a CFM International Leap-1A built by a joint venture between General Electric Co. and France’s Safran.


The airline’s agreement with Airbus contains a clause that permits Qatar Airways to cancel a delivery that is more than a specified number of days late. So far the airline has cancelled delivery of just one A320neo, but the remaining four that were to have been delivered by now also would be cancelled when they reach their time limits.


According to Al Baker, Airbus and P&W, a subsidiary of United Technologies Corp., have said the problems will be resolved soon, although some factors may not be fully addressed until the middle of next year.


Switching to a different engine or to Boeing would lead to further delivery delays and could be just a negotiating maneuver by Al Baker. A more timely solution may be for Qatar Airways to lease the planes it needs.


The A320neo is not the only problem Airbus is trying to work out with Qatar Airways. The planemaker is supposed to have received A350s by this time and a total of 10 this year. Supply problems for the aircraft’s seating have been a problem for at least a year. Al Baker said that Airbus told him that the first A350 delivery is now “imminent.”

(Paul Ausick - 24/7 Wall Street)