Thursday, February 26, 2015

Surf Air takes delivery of the 1,300th PC-12 and plots expansion

The 1,300th Pilatus PC-12 entered service on 24 February with US members-only VIP airline Surf Air.

The Santa Monica-based operator is now plotting to expand in order to cater for the booming demand for its all-you-can-fly, single-engined turboprop-based scheduled service.

Surf Air launched around two years ago, offering its members unlimited flights on its fleet of three pre-owned PC-12s for a monthly fee – currently $1,750.

“We now fly to seven destinations within California with a fleet of seven PC-12s, including four new eight-seat NG models,” says Surf Air chief executive Jeff Potter.

“We have brought the benefits of private aviation to a much broader audience and the reception has been overwhelming,” he says. “In the last year our membership has grown from 300 to over 1,200, and we expect the numbers to grow to 5,000 by the end of 2015.”

The high take-up rate for the service persuaded Surf Air last August to place an order for 15 PC-12 NGs and options for another 50. “We expect to take another eight aircraft this year and a dozen in 2016, which will help to support our expansion,” says Potter, who was formerly chief executive of US low-cost regional carrier Frontier Airlines and members-only VIP travel club Exclusive Resorts.

Surf Air, he explains, has secured an agreement with Pilatus whereby the Swiss airframer will not sell new NGs to any US operator with a similar programme for five years. “We will retain this exclusivity as long as we exercise 12 options a year. Based on the demand for the service so far, this is not a problem,” says Potter.

The company is planning to expand its coverage across the USA, starting at the end of the year with a Texas-based service. Operations in Florida and the northeast are also mooted.

“If we continue to grow at the current rate, we will have to order more aircraft,” Potter says.
Surf Air is sticking with the PC-12 NG. “We made a resounding decision from the start to go with Pilatus,” he says. “With its short field capability, low operating costs and large cabin, this aircraft is ideal for this type of service.”

Surf Air has a typical load factor of around 60% per flight. “In order to enhance the customer experience we try to limit the number of passengers to five,” says Potter.

(Kate Sarsfield - Flightglobal News)

Wednesday, February 25, 2015

Southwest Jets to Keep Flying After Missed Inspections

Southwest Airlines failed to perform mandatory rudder inspections on more than 125 jets, or roughly one-fifth of its fleet, forcing it to scramble late Tuesday to negotiate an unusual arrangement with federal regulators to keep the planes flying until the checks were completed.
 
The drama began Tuesday afternoon, when the carrier informed the FAA that certain hydraulic inspections were missed on 128 of the company’s Boeing 737-700 models, which were voluntarily taken out of service right away. Some 80 flights were canceled on Tuesday as a result.
 
Officials from Southwest, the Federal Aviation Administration and plane maker Boeing Co. then hunkered down to work out a plan to get the checks completed as quickly as possible, with the aim of returning the planes to service in the interim. Around 1 a.m. Wednesday Eastern time, Southwest said the FAA approved “a proposal that would allow the planes to keep flying for a maximum of five days” while inspections are done. An FAA spokesman confirmed the arrangement.
 
Southwest flies more than 3,400 flights a day, meaning that taking out a fifth of its fleet could result in hundreds of cancellations nationwide. The company’s updated statement anticipated “very minimal impact” on Wednesday’s operations.
 
Reflecting the fluid nature of the situation, the FAA released its own statement about two hours earlier confirming that the carrier had “missed some required inspections on the standby rudder system” on 128 aircraft. The statement added that FAA officials, working with representatives of the airline and manufacturer Boeing Co., were still evaluating a proposal “that would allow the airline to continue flying the planes until the inspections are completed over the next few days.”
 
The Dallas-based carrier is the world’s largest operator of Boeing 737 jets and relies entirely on the single-aisle workhorse for its fleet. According to Boeing’s website, the company has taken delivery of 941 737 jets directly from the plane maker since 1971 and has a further 273 still on order as of Jan. 31.

Though the inspection slipup already has turned into an embarrassing irritant for the Southwest, it isn’t expected to have the longer-term negative impact of a 2008 dispute with the FAA and lawmakers over maintenance lapses.
 
Congressional hearings created a tumult that buffeted the industry after it was disclosed that local FAA officials permitted the carrier to fly 46 aircraft without completing mandatory structural inspections. In another case a year later, the FAA allowed Southwest to continue flying roughly 50 jets that were equipped with unauthorized parts while it worked to replace those parts, after the agency concluded they didn’t pose an immediate safety hazard. 
       

Tuesday, February 24, 2015

Boeing Lining Up Buyers for Early Overweight Dreamliners

Boeing Co. has lined up buyers for 10 of the early, overweight 787 Dreamliners whose years in storage made them emblems of the jet’s factory woes and a drag on profit, people with knowledge of the plans said.

The planes, dubbed “terrible teens” for their assembly struggles and their places near the start of the production run, have an assessed value of roughly $1 billion, or less than half the catalog price. The original customers balked because the aircraft were too heavy, limiting their range.

Ethiopian Airlines is in advanced discussions to buy eight of the early-build 787s, said four people who asked not to be identified because they weren’t authorized to speak publicly. Air Austral, based on France’s Reunion Island in the Indian Ocean, has already ordered two of the jets, the people said.

Unloading the 787s would be a boost after the aircraft sat outside Boeing’s largest Seattle-area factory for about five years. They were visible symbols of the delays on the Dreamliner program, with black plastic shrouding their windows and 17,000-pound (7,700-kilogram) counterweights dangling from the wings in place of engines to keep the jets balanced.

“We continue to see interest in the early-build 787s,” said Marc Birtel, a spokesman for Chicago-based Boeing, when asked about the status of negotiations for the teens. He declined to comment on specific contacts with airlines.

Air Austral is buying two 787-8 Dreamliners, said Laure Marsac, a spokeswoman for public-relations firm Expression in Paris, who had no details about which planes were involved. Addis Ababa-based Ethiopian didn’t respond to e-mailed requests for comment about the planes.

Assessed Value

Together, the deals would be worth about $1 billion, based on estimates of the planes’ assessed value by Chantilly, Virginia-based aviation consultant Avitas. All the Dreamliners are the 787-8 model, which has a list price of $218.3 million before the discounts typical in the aerospace industry.
 
Boeing fell 0.2 percent to $154.38 at the close in New York, paring an earlier decline. The stock has gained 19 percent this year, the most among the 30 members of the Dow Jones Industrial Average.
 
The 787 is the world’s first airliner built mainly from composites instead of traditional aluminum.

The jet ran more than three years late while Boeing worked out kinks with the carbon-fiber materials, onboard systems and a manufacturing process that relied more heavily on suppliers.

Updates Needed
 
Eager to convert a record order backlog into cash, Boeing stepped up production before the Dreamliner was certified as airworthy. The planemaker wound up having to retrofit about 60 of the first jets to match design changes made during flight testing.

The teens required the most extensive work, including heavy structural reinforcements to bolster their composite shells, and were set aside while Boeing focused resources on later models that it could get more quickly to customers. Carriers including ANA Holdings Inc.’s All Nippon Airways and Transaero Airlines eventually opted to take other aircraft.

Boeing has never disclosed the weight difference for the teens. Once the modifications are done, their range will be about 1,000 nautical miles (1,850 kilometers) shorter than later 787s, Avitas has estimated. Boeing advertises a range of 7,850 nautical miles for the 787-8, which seats 242 passengers.

Market Proved
 
“Not all planes have to have the longest legs in the world to solve a problem” for carriers deciding which jets to buy, Howard Rubel, a New York-based analyst with Jefferies LLC, said in a phone interview. “The company said there’s a market for these aircraft, and it looks like they’re going to prove it.”

Ethiopian, the 787’s first African customer, is considering ordering more Dreamliners and other Boeing twin-aisle models as it expands its wide-body fleet, two of the people said. Airbus Group NV, Boeing’s rival based in Toulouse, France, countered with an offer for discounted A330 jets, the people said.

Airbus had no immediate response to e-mailed requests for comment on Tuesday.
 
For the Dreamliner teens, the loss of performance undercut a central part of the model’s appeal. Boeing has wooed airline customers with a promise that the 787 would deliver a 20 percent boost in efficiency over planes of comparable size.

Selling and delivering the teens would reduce Boeing’s 787 backlog, which stands at about $7 billion, according to a Feb. 12 report from David Strauss, a New York-based UBS Group AG analyst.
 
Ballooning inventory and production costs have left the Dreamliner unprofitable and been a drag on Boeing’s cash flow.

Cash Consumption
 
Strauss expects the 787 program to use $2 billion in cash during 2015, an improvement from the $5.5 billion consumed last year, in part because of a decline in 787 inventory.
 
“We’re working through them in a prudent fashion,” Chief Financial Officer Greg Smith said of the teens’ issues during a Jan. 28 earnings call. “We do expect to deliver three or four this year.”
 
Besides the 10 teens now being readied for sale, Boeing has one other plane from that production batch now in flight tests. FAA documents show that it is configured as a VIP aircraft.
 
Boeing has begun work to make three other teens flight-worthy, said Uresh Sheth, who tracks Dreamliner production for the All Things 787 blog.

The planemaker has space available at its factory in Everett, Washington, to repair additional teens if customers want to speed delivery, Sheth said in an e-mail. He reported the Air Austral order earlier this month, without saying where he got the information.

(Julie Johnsson - Bloombergt Business)

Friday, February 20, 2015

Bishwo Airlines based in Nepal plans to purchase five Sukhoi Superjet 100s

New Nepalese airline Bishwo Airways has announced a tentative agreement with Sukhoi Civil Aircraft Co. for five Sukhoi Superjet 100s.

A letter of intent for the aircraft was signed at the Aero India air show in Bangalore Thursday.
Kathmandu-based Bishwo is privately owned and a subsidiary of Bishwo Holdings, a diversified Nepalese investment holding company based in Singapore.

At the 2014 Farnborough Airshow it ordered two Airbus 330-200s, which will initially operate mid- and long-haul services to Malaysia and the Persian Gulf. There is a large Nepalese expatriate community in the Gulf, working in the construction sector. Bishwo has plans to expand later further afield in Asia and Europe.

The SSJ100s, which are due to be delivered from 2017, will have a two-class, 93-seat layout and are intended to develop domestic and regional services to the point at which larger types can be deployed.

(Alan Dron - ATWOnline News)

Air France-KLM to defer 10-12 aircraft

Air France-KLM will delay the arrival of up to 12 aircraft, as it seeks to slash €600 million ($683 million) from its capital expenditure plan for the next two years.
                                                                       
Speaking at the release of Air France-KLM’s 2014 results, Air France-KLM CFO Pierre-Francois Riolacci said, “10 to 12 aircraft will be delayed, including long-haul and short-haul” over the next two or three years. Deliveries to both Air France and Transavia will be affected, but Riolacci declined to give specific numbers or aircraft types.

Likewise, Air France has no immediate plans to grow its A380 fleet beyond the 10 aircraft it has in operation, despite two of its 12 aircraft remaining undelivered. Air France-KLM chairman and CEO Alexandre de Juniac said delivery dates for the final two aircraft are “not decided.”

De Juniac also confirmed that Air France Regional arm HOP! will be taking ATR 72-600s, as already revealed by ATW. “The decision has been made to buy ATR 72-600s. The date for the official order signing will be coming very soon. It is urgent to replace the old ATRs,” he said.

The renewal of KLM Cityhopper’s Fokker 70s, along with some aircraft within Air France’s HOP! fleet are also under discussion. KLM president and CEO Pieter Elbers confirmed his carrier will receive its first Boeing 787-9 in October. From 2016-17 onward, KLM will also start looking to replace its Boeing 747s.

Air France-KLM originally detailed plans to spend €1.9 billion on capital expenditure in 2015 and €2.2 billion in 2016 at the release of its Perform 2020 plan last September. De Juniac said this was “ambitious” and would have marked a record-high investment for the group. However, he explained that the tough economic environment, unit revenue pressures, fuel price and exchange rate uncertainty and patchy worldwide growth triggered the budget to be cut by €600 million.

“The unit revenue is down, so we have had to be less ambitious in our aircraft purchases, however we fully maintain our ramp up of the product at both airlines,” De Juniac said. “Even if we have had to slow down the renewal of the fleet, it is continuing.”

Air France-KLM will continue to invest in the revamp of its customer-facing and onboard product, despite the financials pressures weighting on the group. More than a third of its long-haul fleet will be equipped with new interiors by the end of 2015.

(Victoria Moores - ATWOnline News)

Wednesday, February 18, 2015

Alaska Airlines announces another 737-900(ER) order

Alaska Airlines will buy six more Boeing 737-900ERs, in an order valued at $594 million at current list prices. Four aircraft are scheduled for delivery in 2016 and two in 2017.

The new aircraft bring Alaska’s total of locally manufactured jets on order to 79.

Alaska is transitioning to the 737 Next Generation models. Over the next few years, Alaska said its remaining 737-400s will be replaced with 737-900ERs, which transport 25% more passengers on the same amount of fuel.

(Linda Blachly - ATWOnline News)

New city leaders get lesson on coveted Long Beach Airport noise ordinance

The city has failed multiple attempts at regulating aircraft noise. It has undergone years of airlines challenging the rules in courts, and finally, a 1995 ordinance was exempted from federal law otherwise severely restricting the ability of cities to control airport decibel levels.

In a nutshell, it’s the story of the Long Beach Airport Noise Compatibility Ordinance, which the City Council heard in a study session Tuesday as officials weigh the airport’s future.

Since the Federal Aircraft Noise Compatibility Act was passed in 1990, no other city has been successful in securing a law as stringent as Long Beach’s, Assistant City Attorney Michael Mais told the council.

“It’s not like any other ordinance we have on the books,” said Mais.

The study session was called by Councilman Al Austin as JetBlue Airways Corp., the airport’s main commercial tenant, have expressed interest in accommodating international travel. Such a move would require opening a customs facility, a process needing the approval of the federal government and the city.

Austin said if JetBlue or any other carrier want a customs facility, the council should proceed with “extreme caution,” if at all.

The airport noise ordinance is an asset, he added.

“Our airport is an asset as well,” said Austin. “But our neighborhoods define our city. We need to be very clear on that.”

Both Long Beach Airport Executive Director Bryant Francis and JetBlue representatives have said there are no plans to change the law effectively limiting flights to 41 commercial and 25 commuter flights per day.

In operation, the noise ordinance works like this: Two monitoring stations near the airport measure decibel levels, and if the rules are broken, pilots or their employers must pay fees for every infraction. Violators are hit with a warning on their first transgression, but subsequent fines can rise up to $300.

JetBlue pays more as a result of a legal agreement reached between the airline and city about 12 years ago.

The agreement, called a consent decree, can be costly for the carrier. In 2011, JetBlue paid $555,000 to the Long Beach Public Library Foundation as a result of the decree, according to an internal airline report.
 
During the day, arriving aircraft must generate no more than 101.5 decibels of noise. Departing aircraft can make up to 102.5 decibels.

From 6-7 a.m., and between 10 and 11 p.m., the decibel restriction drops to about 90. The limit lowers to 79 in the overnight hours.

An airport official has previously described 90 decibels as like a blender in a home and 100 decibels similar to a diesel truck rolling by a house.

Noise generated by military aircraft, such as the F/A-18 Hornets conducting training operations out of the airport last weekend, is excluded from the ordinance.

Many residents spoke in support of the ordinance during public comment.
Former Councilwoman Rae Gabelich, a vocal protector of the law, said officials should be wary of unintended consequences of changing the rules.

Earlier, Mais noted the ordinance has never been changed due to “lurking fear” the city could lose its exemptions.

“It’s so important to do your due diligence,” Gabelich said.

(Eric Bradley - Long Beach Press Telegram)

Chinese carrier Hainan Airlines announces new San Jose, California service

Long an afterthought for international travelers, San Jose's airport on Tuesday scored a moderate boost as it announced its first flights to China.



Hainan Airlines will operate nonstop Boeing 787 Dreamliner service between Mineta San Jose International Airport  (SJC/KSJC) and Beijing five days per week starting June 15. It is just the third outside country served at the airport, after Mexico and Japan.



Bay Area residents heading to China could already fly there from San Francisco International Airport, which has about 95 percent of the region's international flights. But with the strong ties between Silicon Valley and China, industry officials think there is demand for more service. An estimated 220,000 people in Silicon Valley are of Chinese descent, and more than 500 local companies have offices in China.



"Travelers will no longer have to fool around on the freeway to San Francisco to get between China and Silicon Valley," said Joel Chusid, Hainan's executive director in the United States.



Business leaders, city officials and seven of the 11 City Council members gathered at a news conference at the airport Tuesday to announce the news. It was a rare addition of high-profile service to the airport that continues to slink in third place for local passenger volume behind Oakland International Airport and SFO.



San Jose airport is growing at a faster rate than its Bay Area competitors, however, and saw its passenger count increase 6.9 percent last year to 9.4 million. Oakland airport grew 6.1 percent to 10.3 million passengers while SFO increased 4.8 percent to a record 47.2 million travelers.



San Jose airport director Kim Becker Aguirre said the new flights to China are part of the hub's "resurrection." She cited the airport's "fantastic weather" and its on-time reliability, a convenience lacking at fog-shrouded SFO.



"They know they're going to be on time," Aguirre said.

Still, when All Nippon Airways announced it would start flying between San Jose and Tokyo in 2013, airport officials predicted a slew of new flights to Asia and Europe, and despite the local economic boom, that hasn't happened. The airport badly needs more service as the city looks to pay down debt from a $1.3 billion renovation that was completed in 2010. A CEO task force led by the Silicon Valley Leadership Group is targeting Seoul, London and Frankfurt flights next.
 
The announcement was expected after Hainan filed a request to operate the service last month.

But it had been awaiting approval from federal regulators.

The 213-seat flights to Beijing Capital International Airport will operate on Monday, Wednesday, Friday, Saturday and Sunday and last between 11½ to 12½ hours depending on the direction. Because of the time difference, travelers heading back to San Jose will actually land about three hours earlier than when they took off.

Business travelers will have extra amenities that include his-and-her pajamas and free limo service. The cost of the flights wasn't disclosed and bookings are not yet available.

(Mike Rosenberg - Sa Jose Mercury News)

Boeing 727-21 N30MP




Boeing 727-21 (18998/239) N30MP operated by MP Aviation LLC made a brief visit to Long Beach Airport (LGB/KLGB) this afternoon arriving from San Diego International Airport (SAN/KSAN) at 13:02 and parking at AirFlight. Following a short turnaround she departed at 13:59 bound for Chino Airport (CNO/KCNO).
 
So great to see a very 727 shorty as there are not many left in the world!
 
(Photos by Michael Carter)

WestJet Encore plots US expansion with Q400s

Calvary-based WestJet Airlines’ regional subsidiary WestJet Encore has received all required approvals to fly to the US, a move that should open new markets the carrier has been unable to serve, allowing it to more forcefully compete with Air Canada, company executives said. 
                                                                       
Final approval came about two weeks ago, and WestJet is working on lining up codeshare and interline agreements, a process it estimates will take about two months. WestJet believes it can start service “in the back half of the year,” said Bob Cummings, EVP-sales, marketing and guest experience.

Cummings suggested Encore will look at nearly every US market reachable from WestJet’s hubs with a 78-seat Bombardier Q400 turboprop, and it appears likely WestJet would consider several rust-belt and Northeastern markets. That’s in addition to new US markets the airline is exploring with its Boeing 737s. “A market of 350 million people provides a lot of opportunity,” CEO Gregg Saretsky said. 

WestJet Encore took delivery of its 16th Q400 in January, and it has committed to purchase another 14 through the end of 2016. It also has options for 15 additional Q400s between 2016 and 2018. 

Thus far, WestJet is using the Q400s within Canada for four purposes. First, it is opening new markets that cannot support jet service. Second, it has been using them during off-peak times on routes that demand frequency, such as Toronto-Montreal. Third, it is using them to connect the dots in WestJet’s network, with one example being new flights between Regina, Saskatchewan and Winnipeg, Manitoba. And fourth, it has used the Q400s to increase service in smaller Canadian cities, where the carrier had flown once daily 737s. In those markets, WestJet has tried to schedule at least two departures—one morning and one evening.

Flying to Q400s to new US markets is a logical next step. In its first nearly 20 years of operation, WestJet generally avoided business markets to focus on its core strategy—flying Canadians to warm-weather vacation locales, such as Las Vegas, Los Angeles, Orlando, and many destinations in Mexico and the Caribbean. But WestJet has saturated those markets, and the airline is looking for other opportunities.

In doing so, WestJet believes it can carve out a larger slice of the corporate travel market in Canada. “Leisure has been our bread and butter,” Cummings said. “We are not at growth limits but we sit down and say, ‘We may have some other opportunities.’ Now it’s more of a portfolio approach.”

As part of that strategy, WestJet recently announced it would fly between Houston and Calgary beginning in September, a route that connects two important oil cities. That route, which will use a 737, was long on WestJet’s list of possibilities, but the timing was never right.
 
WestJet believes it will be able to make more US business markets work because of its codeshare deals with American Airlines and Delta Air Lines. Even in cities where the two US carriers aren’t particularly strong, both airlines send WestJet enough business to help drive profitability. “We need our airline partnerships to get to a certain level,” Cummings said. 

Saretsky, a former executive at Alaska Airlines, acknowledged both US carriers might prefer an exclusive partnership with WestJet, but he said for now the plan is to stick with Delta and American. “Because of the way our network has developed, it doesn’t make sense for us to jettison American and go with Delta or vice versa,” Saretsky said. “Their choice is to have us as a partner or not have us as partner, given that Air Canada is already in the Star Alliance.” 

One major drawback, however, is that WestJet isn’t in a position to pursue an immunized joint venture with another North American carrier. But Saretsky said WestJet isn’t ready for a joint venture, though he acknowledged that calculation might eventually change.

(Brian Sumers - ATWOnline News)

Aeromexico 4Q profits surge; delivers $53 million net gain in 2014

Aeromexico 737-752 (34294/1761) XA-QAM rolls off Rwy 25L at Los Angeles International Airport (LAX/KLAX) sporting "Caminemos Juntos Teleton" markings on January 28, 2012.
(Photo by Michael Carter)

Mexico City-based Grupo Aeromexico reported MXP783 million ($53 million) in consolidated net profit for 2014, down 27.5% from the airline’s 2013 net profit of MXP1.08 billion. A strong fourth-quarter performance of MXP761 million in net income kept the group in the black for 2014, following weak quarterly results earlier in the year (a net profit of MXP201 million in the third-quarter and net losses of MXP89million and MXP90 million in the second and first quarters, respectively).

Grupo Aeromexico’s consolidated airlines’ (Aeromexico and Aeromexico Connect) fourth-quarter net profit was a 97.6% year-over-year (YOY) improvement, nearly doubling the carrier’s  net income of MXP385 million in the year-ago quarter.

Aeromexico’s air cargo division showed 24.1% YOY growth in the fourth-quarter, accruing MXP685 in revenue for the quarter. The carrier pointed to the recent introduction of five Boeing 787s into its fleet, which “[provided] increased cargo capacity, an improved commercial and customer service strategy as well as improved performance in the domestic cargo market,” the company said. Mexico’s air cargo market reportedly grew 8.9% YOY in the number of tons transported during 2014.

Aeromexico’s full-year revenues were MXP42.92 billion, up 7.7% YOY; operating expenses grew 8.6% YOY to MXP35.05 billion. Accounting for aircraft leasing expenses and currency depreciation, the airline’s full-year operating profit came to MXP1.68 billion, a 30.1% YOY drop.

Fourth-quarter revenue was MXP11.6 billion, up 8.3% YOY; operating expenses were MXP8.97 billion, up 3.5% YOY. Operating profit after leasing expenses and depreciation came to MXP925 million, a 45.9% increase YOY.

International passengers accounted for 51% of Grupo Aeromexico’s total fare revenues in 2014, while domestic passenger revenue accounted for 49% of the total. “2014 is the first year in which international passenger revenues have exceeded domestic passenger revenues,” the company said, “contributing to an overall natural hedge between foreign currency-denominated revenues and costs.”

Passenger traffic for the year was up 15% YOY, to 28.77 billion RPKs; capacity grew 11.5% YOY to 36.22 billion ASKs, resulting in a load factor for the full-year of 79.8%, up 2.2 points YOY. The airline carried 17.2 million passengers in 2014, up 11% YOY—a “historical record for the company,” Aeromexico said. 

Yield fell 6.6% YOY to MXP1.370. Total RASK was down 3.3% YOY to MXP1.185. Total CASK excluding fuel in Mexican pesos increased 0.7% YOY to MXP0.760; total CASK excluding fuel in US dollars fell 3.4% YOY to 5.7 cents.

Two Boeing 737-800s and two Embraer E-190s were added to Aeromexico’s consolidated fleet during the fourth-quarter; three leased aircraft were retired during the quarter (a 767, and two Embraer ERJ-145s). In total, Aeromexico added 19 aircraft to its consolidated fleet of 124 aircraft in 2014, and retired 12, for a net gain of seven aircraft for the year. As of Dec. 31, 2014, Aeromexico’s fleet comprised four 777s, five 787s, four 767s, 24 737-700s and 25 737-800s—a total of 62 aircraft.

Aeromexico Connect’s fleet comprised 24 ERJ-145s, nine E-170/175s and 29 E-190s, for a total of 62 aircraft.

(Mark Nensel - ATWOnline News)

Russian authorities cancel more AOCs

Russia’s Federal Air Transport Agency, Rosaviatsia, has canceled air operator’s certificates (AOCs) for regional Air Samara and Moscow-based cargo carrier KAPO Avia. According to a Rosaviatsia statement, both carriers failed to adhere to standard operational rules, which led to previous accidents.

On Nov. 25, 2014 an Air Samara Beechcraft King Air 350i made a hard landing without landing gear at Samara Kurumoch International Airport. There were no passengers on board during the technical flight and the pilots were not hurt. The carrier’s AOC was suspended at the end of 2014.

On Jan. 3, 2015, a KAPO Avia Antonov 26 ran off the runway during takeoff from Sokol Airport in Magadan. The aircraft performed the technical flight; pilots and second crew were not hurt. Rosaviatsia said in both cases the pilots failed to follow flight manual rules.

In December, Rosaviatsia canceled AOCs for Bylina Airline and Moskovia Airline. The AOCs were canceled after three months following their suspension, according to Russian regulations.

(Polina Montag-Girmes - ATWOnline News)

Virgin America posts second consecutive full-year net profit

Virgin America A320-214 (c/n 4991) N849VA "Fly Bye Baby" arrives at Los Angeles International Airport (LAX/KLAX) on December 19, 2012.
(Photo by Michael Carter)

Virgin America earned net income of $60.1 million in 2014, a significant increase over a net profit of $10.1 million in 2013, marking the airline’s second straight year of profitability after five years of losses following its 2007 launch.

“We achieved record profitability and significantly strengthened our balance sheet by going public,” president and CEO David Cush said. “Both our existing and new investors have shown confidence in our low-cost, high-amenity business model.” The San Francisco-based airline launched an initial public offering (IPO) in November 2014.

Virgin America’s 2014 revenue increased 4.6% year-over-year to $1.49 billion, outpacing a 3.7% rise in expenses to $1.39 billion, producing an operating profit of $96.4 million, up 19.2% over operating income of $80.9 million in 2013. The carrier’s annual aircraft fuel expenses decreased 1.6% to $499.1 million (fourth-quarter fuel expenses were down 4.8% year-over-year). The carrier’s 2014 operating margin was 6.5%, up 0.8 point over an operating margin of 5.7% in 2013.

Virgin America’s 2014 traffic rose 2.6% year-over-year to 10.07 billion RPMs on flat capacity of 12.24 billion ASMs, producing a load factor of 82.3%, up 2.1 points. Yield improved 0.4% to 13.19 cents.

The airline expects to grow capacity 2% to 3% in the 2015 first quarter compared to the 2014 March quarter.

(Aaron Karp - ATWOnline Nws)

Travel advocates, FedEx join forces to maintain US Open Skies policy

A group of lobbyists and a FedEx Express executive accused the three US major airlines of trying to roll back the clock on Open Skies policy and keep out international competition.

Led by the US Business Travel Coalition (BTC) and under the banner of an initiative launched last year called OpenSkies.travel, the panel told journalists at the National Press Club in Washington DC Wednesday that the CEOs of the three major consolidated carriers, American Airlines, Delta Air Lines and United Airlines, held "behind closed doors" meetings with White House and government officials recently.

Although the content of those meetings has not been made public, the BTC-led group believes the airline CEOs are looking to review Open Skies policy, arguing that growing competition from the three major Gulf carriers, Emirates Airline, Etihad Airways and Qatar Airways, is unfair.

A total of 114 Open Skies agreements have been signed since the first accord in 1982. But the three US major carriers, with the support of some labor groups, argue that they were forged before the extent of Gulf carrier expansion could have been imagined and allege that those Gulf carriers are heavily government subsidized.

BTC chairman Kevin Mitchell said the three major US airlines have “worked overtime” to communicate that they feel threatened by foreign carrier new entrants and disadvantaged by new customer-service oriented business models and airlines in which governments hold equity stakes.

“The overall impression is that the big US network airlines want to lock out independent airlines that offer lower fares, newer airplanes, faster connections, more destinations and better service,” Mitchell said.

He added that Open Skies policy had been “breathtakingly beneficial” for US consumers and businesses.

“While US major network carriers’ employees and shareholders are major beneficiaries of US Open Skies policy, today, we want to present the views of other important stakeholders who are concerned by perceived attempts to turn the clock back on market liberalization,” Mitchell said.

Also on the panel were Washington Airports Task Force president Keith Meurlin, US Travel Association domestic policy director Erik Hansen, former deputy assistant Secretary of State and now Norwegian Air International consultant John Byerly, and FedEx Express managing director, regulatory affairs, Nancy Sparks.

Sparks said that in FedEx’s view, “Open Skies is the corollary of aviation” and the company was “very concerned about the dark clouds and where they are coming from.”

Sparks added, “What we would like to see if for Open Skies agreements to continue unabated and our view on competition is ‘bring it on.’ Protectionism harms the consumer and in the long term the provider is also harmed.”

The Air Line Pilots Association International (ALPA) issued a statement today saying, “ALPA maintains that several Open Skies partner nations equip their airlines to do business globally through state policy and significant direct economic underwriting that undermines fair competition. Our union urges the US government to review existing Open Skies agreements to ensure that state support cannot distort a fair international marketplace to the detriment of US airlines and their workers.”

Mitchell countered that “the benefits of US Open Skies policy have been stunning for airlines’ shareholders and employees, for travel and tourism jobs, airports, cargo carrier customers, community and economic development and for consumers.”

He also said that if those benefits are threatened, the antitrust immunity granted to US airlines should be reconsidered. “The antidote to normally anti-consumer agreement among competitors is new entry. Antitrust immunity is serious business; airlines should not take it for granted.  We do not need to return to the ‘Fortress America’ mindset of the 1990s,” he said.

(Karen Walker - ATWOnline News)

Friday, February 13, 2015

SkyWest reports $24.2 million net loss in 2014

SkyWest Inc., the St. George, Utah-based parent of regional carriers SkyWest Airlines and ExpressJet Airlines, posted a full-year net loss of $24.2 million for 2014, reversing the $59 million net profit the company recorded in 2013.

Full-year revenue was $3.24 billion, down 1.8% from $3.3 billion in 2013; SkyWest’s 2014 operating expenses increased 2.2% year-over-year (YOY) to $3.21 billion. The resulting operating profit—$24.8 million—was down 83.8% from 2013’s $153.1 million gross result.

For the 2014 fourth-quarter, SkyWest recorded a $27.9 million net loss, a reversal of the $8.6 million net profit the carrier posted in fourth quarter of 2013. Revenue for the quarter was $813.9 million, up 1.2% YOY; expenses grew 7.8% YOY to $833.6 million, resulting in a quarterly operating loss of $19.7 million.

A $70 million special item expense was incurred by the carrier during the fourth-quarter, “due to the accelerated retirement of SkyWest’s [Embraer] EMB-120 turboprop aircraft and a codeshare agreement modification that shortened the contract term for ExpressJet’s operation of the ERJ-145 aircraft type,” SkyWest said.

“SkyWest made significant progress in executing our long-term strategy in the fourth quarter, including reducing the total number of unprofitable aircraft and flying over time,” SkyWest chairman and CEO Jerry Atkin said. “We expect that reducing our total fleet count while improving the overall fleet composition will put us on a path of continued financial and operational improvement.”

In 2014, SkyWest and ExpressJet’s combined passenger traffic slipped 1.1% YOY to 31.5 billion RPMs; capacity also contracted, to 38.2 billion ASMs, or 2.5% YOY. As a result, the full-year passenger load factor for the two airlines came to 82.4%, a YOY rise of 1.2 points. SkyWest’s full-year RASM grew 1.2% YOY to 8.5¢; CASM increased 4.9% YOY to 8.6¢; Full-year yield was down 1%YOY to 10.1¢.

In addition to SkyWest Airlines’ ongoing removal of 43 EMB-120 Brasilia turboprops (due for completion by the end of 2Q 2015), ExpressJet removed 26 ERJ-145s from its United flying contract in 2014 and returned the aircraft to United. ExpressJet intends to remove from service and return to United an additional 59 ERJ-145s and nine ERJ-135s in 2015.

As of Dec. 31, 2014, SkyWest’s combined fleet consisted of “approximately 749 regional aircraft,” the company said, compared to 757 aircraft at the end of 2013. In its year-end financial statement, SkyWest estimated its combined available-for-service fleet will consist of 658 regional jets and 13 turboprops by the end of the 2015 first-quarter; 661 regional jets by the end of the 2015second-quarter; 655 regional jets by the end of the 2015 third-quarter; and 636 total regional jets in the combined fleet by the conclusion of 2015.

(Mark Nensel - ATWOnline News)

Royal Canadian Air Force CC-177 (F-273) 177705

The fifth CC-177 (C-17A) (F-273) 177705 destined for the Royal Canadian Air Force, rests on the Boeing ramp at Long Beach Airport (LGB/KLGB) on February 6, 2015.
 
(Photo by Michael Carter)

Virgin Galactic coming to Long Beach Airport

With thousands of aerospace jobs dissolving over the next several months, Long Beach received some good news Thursday: Virgin Galactic, the world’s first commercial space flight company, announced that it will design and build its LauncherOne satellite launch vehicles in the space that once housed the production of Boeing Co. planes.

The move is expected to create at least 100 jobs initially, with an expansion planned to hire local talent, sources said. Virgin Galactic will host a job fair and open house on March 7, when the company will start transitioning people into the facility.

Virgin Galactic, the privately funded space company owned by Sir Richard Branson’s Virgin Group and Abu Dhabi’s Aabar Investments PJS, plans to open a 150,000-square-foot facility at Douglas Park in East Long Beach.

“The technical progress our team has made designing and testing LauncherOne has enabled a move into a dedicated facility to produce the rocket at quantity,” Virgin Galactic CEO George Whitesides said in a statement. “With New Mexico’s magnificent Spaceport America for our commercial spaceflight operations, our Mojave facilities for WhiteKnightTwo and SpaceShipTwo production, and now our new facility in Long Beach for LauncherOne, we are building capability to serve our expanding customer community.”

Branson’s company first announced plans to build LauncherOne in 2012. According to the Associated Press, LauncherOne, which is expected to begin operations in 2016, would send small satellites into space in a cost-effective way and can carry up to 500 pounds.

“Paired with purpose-built small satellites, LauncherOne will enable scientists to tackle global, environmental challenges with unprecedented speed and precision,” Branson said in a 2012 YouTube video. “New space businesses will be able to get into operation quickly and cheaply. Nations, states, cities and even universities and schools will be able to launch dedicated satellites that will answer their diverse needs, opening up space to everyone (and) will allow us to see, experience and benefit from it.”

Virgin Galactic said small satellite manufacturers and operators are already taking interest in the launcher, including OneWeb project, which is designed to bring broadband services to parts of the world not served by terrestrial networks.

The launch market for small satellites is dominated by the Hawthorne-based rocket manufacturer SpaceX and Europe’s Arianespace, which is based in France. Each company took nine payloads into orbit in 2014, or 90 percent of all commercial launches last year.

SpaceX, which also has a contract with NASA to shuttle cargo to and from the International Space Station, announced in January that it plans to open a satellite factory near Seattle.

Marco Caceres, senior space analyst for Teal Group Corp., said there is a growing market for the launching of smaller satellites, especially for colleges who will now be able to share in the cost of a single launch of 10 to 20 satellites.

“It’s a good thing for the industry because it forces traditional players to find ways to reduce costs to remain competitive,” Caceres said. “It also creates new customers that never imagined that they could afford to launch tiny satellites.”

For Long Beach, which has long been home to aerospace and aviation giants such as Boeing Co., the announcement brings good paying jobs to a city that is seeing the loss of high wage earners from the closure of Boeing’s C-17 military airlifter manufacturing plant.

“Virgin Galactic is exactly the type of company and brand we want to attract,” Mayor Robert Garcia said. “The new partnership reinforces our commitment to an economy of the future and good paying local jobs.

“It will be a critical new tool for the global research community, enabling us all to learn about our home planet more quickly and affordably,” he said.

Company spokesman Will Pomerantz said in an email that Virgin Galactic chose Long Beach because it needed a large building near an airport.
 
“But we also needed access to a great talent pool. Long Beach’s excellent tradition of aviation and aerospace excellence was certainly a key part of our decision,” he said.

Rep. Alan Lowenthal, D-Long Beach, lauded the news and Virgin Galactic’s commitment to the region and the state.

“This proves again that Southern California has the tools, the skills and the talent to push not only the bounds of technology, but in this case, the bounds of Earth itself,” Lowenthal said.

Virgin Galactic is the latest business development to come to Douglas Park, a prime piece of East Long Beach real estate that was once home to Boeing’s manufacturing facilities, including the 717 plant before it was shuttered in 2006.

Now a diversity of businesses will operate from the once exclusive aerospace site. In March, Long Beach-based Urbana Development broke ground on land that will become Douglas Park Medical Office Park, where Long Beach Gastroenterology Associates and its affiliate, Greater Long Beach Endoscopy Center/Surgical Care Affiliates, and Laser Skin Care Center Dermatology Associates will occupy the spaces.

In June, Mercedes-Benz began construction on a new facility in the former 717 site. The company’s nearly 1.1 million-square-foot space, which is expected to be fully operational early next year, will corral about 200 workers from the company’s three operations — its vehicle preparation center, learning and performance center and Western Region sales offices, a 12-state territory that stretches from Alaska to Montana.

Visit virgingalactic.com in the coming days for more on job prospects and about the open house.

(Karen Robes Meeks - Long Beach Press Telegram)

Thursday, February 12, 2015

Gulfstream G650 (c/n ?) N887WT

Gulfstream G650 (c/n ?) N887WT the second G650 destined for Qualcomm Corporation rests on the Gulfstream service center ramp at Long Beach Airport (LGB/KLGB) on Februray 11, 2015. 
 
(Photo by Michael Carter)

C-17A (F-272) N272ZD


The third "White Tail" C-17A (F-272) N272ZD departs Long Beach Airport (LGB/KLGB) from Rwy 12 on Thursday February 11, 2015 headed for "Shots" intersection and some flight test time.
 
(Photos by Michael Carter)

Boeing and Airbus compete for 30 aircraft deal with Chinese carrier Spring Airlines

Spring Airlines Co., the Chinese budget airline owned by billionaire Wang Zhenghua, is in discussions with Airbus Group NV and Boeing Co. to buy as many as 30 planes as travel demand surges in the country.

The Shanghai-based carrier plans to place an order this year, Vice President Stephen Wang said in an interview in Singapore today. The order will include an option for 30 more aircraft.

“China is a huge market,” Wang said. “The market has an even brighter future in the next decade. Budget carriers in China will have double-digit market share very soon from the current 5 percent.”

Spring Air wants to double its fleet to 100 aircraft by 2018 as China’s economic growth makes air travel affordable for more people in the world’s most populous nation. Shares of China’s first low-fare carrier jumped 44 percent on its trading debut Jan. 21, and climbed by the 10 percent limit for nine straight days.

Spring Air shares rose 0.2 percent to 66.49 yuan as of 10:17 a.m. in Shanghai.

The airline aims to raise the proportion of international passengers carried and revenue to about 25 percent by the end of 2015, its president said in September. For now it’s unlikely to follow the lead of other low-cost carriers such as AirAsia Bhd. and Scoot Pte. in pursuing long haul routes.

“We will consider long-haul services after 2020,” Wang said today. “For now we will focus on short-haul. We have already seen that long-haul service doesn’t work” for low-cost carriers.

Spring Air will start new routes to Osaka from four cities in China from the end of March. That adds to Spring’s existing flights to Japan’s second-largest city from Shanghai, Wuhan, Tianjin and Chongqing.

The company started a low-fare subsidiary in Japan last August, with flights from Tokyo’s Narita airport to Hiroshima, Saga and Takamatsu using Boeing planes.

(Kyunghee Park - Bloomberg Business News)