Monday, November 24, 2014

Boeing begins final assembly of first 787-9 at South Carolina facility

Boeing has started final assembly of the 787-9 Dreamliner at its South Carolina facility. The team began joining large fuselage sections of the newest 787 Nov. 22 on schedule, according to a Boeing statement.  

The North Charleston, South Carolina, site joins Boeing’s Everett final assembly in Washington state, which began 787-9 production in May 2013. United Airlines will take delivery of the first South Carolina-built 787-9.

(Linda Blachly 0 ATWOnline News)

Avianca looks at 160 narrowbody aircraft order

Avianca Holdings plans to order more than 160 narrowbody aircraft by the end of the year, chairman Germán Efromovich told ATW in Abu Dhabi.
“We have not yet decided which manufacturer to go with,” Efromovich said, adding the decision is between Airbus and Boeing. “This is a delicate process,” he said, confirming the order will be “all together more than 160 narrowbody aircraft.” He said it would be a long-term order for deliveries around 2024. He added, “80% of these aircraft will be for replacement.”

Avianca is expecting to take delivery of the first of 15 Boeing 787-8s next month. “The first 787-8 is sitting in Seattle, waiting for certification and was originally expected in 2010,” he said.

Efromovich said he is also studying the larger variant 787-9 and did not rule out the possibility of swapping out some of the -8s for -9s.

Avianca Holdings has around 75 new aircraft in its current orderbook, which comprises 15 787-8s, 10 Airbus A350s and 50 A320 family aircraft, according to Efromovich.

Avianca Brazil, which was scheduled to launch long-haul flights this year, has postponed flights until “next year,” Efromovich said.

“Brazil is a growing market and there is a demand for long haul. The delay is more comfortable in terms of planning this more safely. There were elections [in Brazil] recently and the dollar is going up.”

Avianca Brazil’s first routes will be Orlando and Miami, Florida. European routes are being planned for later on.

According to Efromovich, Avianca Brazil will start with four Airbus A330s, which will increase as necessary. “In 2018, this could be up to 10 Airbus A350s,” he said.

Efromovich is studying routes to Asia from Latin America, “but not for next year. China or Japan could be some spots we would operate [Boeing] 787s through Los Angeles,” he explained.

As of Sept. 30, Avianca’s fleet comprised 180 aircraft—165 of which are currently operational—including:

58 A320s (27 on operating lease); 36 A319s (17 on operating lease); 12 Embraer E-190s (two on operating lease); 11 ATR-72s; 11 A330s (10 on operating lease); 10 A318s (all on operating lease); 10 Cessna Grand Caravans; nine ATR-42s (five on operating lease); eight A-321s (six on operating lease); five A330 freighters; five Fokker 100s; three Boeing 767 freighters (one on operating lease) and two Fokker 50s.

(Kurt Hofmann - ATWOnline News)

Frontier Airlines orders A321ceos

Colorado-based Frontier Airlines has placed its first Airbus A321 order, inking a deal for nine of the type to join its all-Airbus fleet.

The order takes Frontier to a backlog of 89 Airbus aircraft, including 80 A320neos. Airbus said the carrier has not yet announced its engine selection or seating configuration for the A321s.

Frontier began its transition to an all-Airbus fleet when it took delivery of its first Airbus aircraft in 2001. The Airbus single-aisle family has allowed the airline to expand its route network while minimizing operating costs.

Frontier Airlines CEO David Siegel said, “We continue to come back for more A320 family aircraft because they fulfill our mission of providing low fares through low operating costs. The A321 is a natural fit with our unique brand of low fares.”

Frontier Airlines currently flies a fleet of 35 A319ceos and 20 A320ceos.

(Victoria Moores  - ATWOnline News)

Rude air passengers fuel holiday frustrations

As millions of travelers take to the sky this week during the year's busiest travel period, hassles and frustration stem not only from airport crowds and inefficient airlines but from rude passengers, who are uninformed — or unconcerned — with in-flight manners, according to recent surveys.

And it's not all about the reclining seat controversy that grabbed so much attention this summer when several flights had to be diverted because of onboard air rage incidents concerning reclining seats invading the personal space of the passenger behind.

Beefs about reclining seats ranked sixth, according to a list of 10 "Flying Faux Pas" by travel app TripIt.

The top gripe was other travelers being rude to airline crew and staff, and to airport security personnel. Undisciplined children who misbehave or disturb others ranked second, followed by seatmates who hog space, and loud-talkers.

This Thanksgiving holiday period, nearly 25 million passengers are expected to travel on U.S. airlines, up 1.5 percent over last year, according to airline industry group Airlines for America.

O'Hare International Airport is expected to be the third-most-traveled airport, after airports in Atlanta and Los Angeles. The busiest travel day during the holiday — and for the year — will be the Sunday after Thanksgiving as many travelers return from holiday visits.

The survey found other air travel offenses were:

•People blocking the baggage claim area.

•People bringing stinky food on the plane.

•Travelers who hog the carry-on bin.

•Those who rush off the plane instead of waiting for passengers in front to exit.

•People who block aisles during a flight.

"Knowing the behaviors that are the biggest turnoffs to travelers can make everyone's experience better during the travel-heavy Thanksgiving holiday, and year-round," TripIt says.

TripIt conducted the survey in September among 400 U.S. adults ages 18 and older.

Of course, airlines and airports contribute to hassles too.

In a separate survey by flier-advocacy group Travelers' Voice, passengers said the most frustrating aspect of air travel was the fees — for checked bags, seat assignments and other services that used to be included in the price of an airline ticket.

Flight delays and cancellations came in second, with the overall cost of flying ranking third.

Tops on passengers' wish list was increasing the amount of legroom between airplane seats and the size of the seat itself.

The biggest onboard frustrations, according to the Traveler's Voice survey, stemmed from sitting in front of a young child who frequently kicks and pushes your seatback. Sitting near a crying baby came in second, followed by sitting in the same airplane row as a snoring adult.

That survey was conducted Oct. 16-19.

(Gregory Karp - Chicago Tribune)

A successor to the 777......really?

Boeing needs no introduction. The aerospace giant has been supplying airplanes for both commercial and defense purposes for a very long time. The company's market penetration is by far the largest in its line of business. The company is known for its innovation and its revolutionizing aircrafts.

Recently, though, the company has seemed to put this in question. For a company known to develop the latest and most up-to-date aircraft and related technologies, sticking to supplying the same old model of 777 aircraft after having announced its successor seems strange. This has more to do with the fact that planes that are built today burn less fuel and need less maintenance than their predecessors.

Boeing faces that issue with its 777, a jumbo jet that has become a well-liked staple of global airline fleets over the past 15 years. The 777 sales problem drew a fresh spotlight this week, when Delta Air Lines announced an order for 50 twin-aisle jets from Airbus, split between the A350 and A330neo models, to replace Delta's aged 747 and 767-300 fleets. Boeing's focus on the 777 is understandable.

With a list price of $330 million, the 777-300ER accounts for virtually all of the remaining 777 order book-making it a key component of Boeing's profitability. The Delta deal is driven in no small part by the lower prices and faster delivery speeds Airbus was able to offer the airline.

But the older 777s Boeing pitched for use at Delta's Seattle hub and on its trans-Atlantic routes was a big factor, and Delta's decision underscores the market's lack of interest in a plane that is awaiting replacement.

The Production Gap Issue:

Boeing has promised to bridge the production gap from the old 777 to the 777X, its next-generation replacement, by netting as few as 40 orders per year. The order scenario so far this year is that Boeing has taken 55 orders for the 777, including a deal announced on Thursday to sell 10 to Kuwait Airways.

The new order is worth $3.3 billion at list price, but Kuwait Airways probably negotiated a discount in excess of 50 percent, given both Boeing's need to move 777s and the price breaks manufacturers typically offer customers.

The industry experts feel that the aero-giant can fulfill the gap requirement either by turning out fewer than eight 777s each month or by offering steep discounts to buyers. The current rat of 100 crafts a year has the analysts skeptical about the company's promise.

Available Options:

The company's ground-breaking 787 Dreamliner, which recently clocked over 490,000 hours in service with 21 airline operators since its service entry in November 2011, is another option the company has. The company's fixation with 777 seems pretty irrational when the option of 787 is available.

The analysts feel if the company replaces the production of 777 with 787 for a year, there might be an unbelievable surge in the company's profits. The long-range, midsized, wide-body jet consumes at least 20% lesser fuel compared with similar jets.

With seat capacity ranging between 242 and 323 across the three models -- 787-8, 787-9, and 787-10 -- Boeing claims the plane offers about 10% lower cash seat mile cost. The craze of this plane was such that it attracted a highest bid of $34,000 for a seat in the maiden commercial flight in October 2011.

Now, would someone show the company reason to give up its fixation with the 777? The company badly needs a reality check.

In October 2013, Boeing had lifted its 787 deferred cost projection from $20 billion to $25 billion on account of increased spending to launch the 787-10 and related plans to augment capacity at its factory in North Charleston in 2014 and 2015.

However, in the latest quarter, Boeing reported that the Dreamliner's deferred cost has shot up by $947 million and gone past $25 billion to $25.2 billion. In spite of the ongoing problems, the company's order book remained strong for the quarter.

The pay-out too has been decent. It waits to be seen though, how the company goes about fulfilling its promise. As for the investors, they can always expect good returns from the company.


Southwest Airlines in battle with TWU 555 and ground operations employees

Transport Workers Union Local 555 plans to picket Tuesday at Dallas Love Field by highlighting the fact that Southwest Airlines has more reports of lost or damaged bags than any other U.S. carrier.
It also is taking out a hard-hitting ad in USA Today that attacks Southwest chairman and chief executive officer Gary Kelly, accusing him of putting profit ahead of people and service.

“In our industry, it’s all about the customers,” Local 555 president Charles Cerf said in the union’s notice. “We can’t stand idly by while management makes bad decisions that drive away passengers. If people keep losing bags on Southwest, they’ll vote with their wallets and select other carriers – and that threatens the livelihood of our members.”

While the union doesn’t point it out, Southwest also carries the most passengers of any carrier.
Here are some factoids from U.S. Department of Transportation’s consumer service reports:

– Southwest has carried more passengers than any other U.S. airline since 2005.

– Southwest has received more bag reports – damaged, lost or other unhappy results with passenger bags – than any other U.S. airline every year since 2006. Just about every month, it has more reports than any other carrier.

– Southwest’s position relative to other carriers has gotten worse since 2008 when other airlines began charging for checked bags, causing more of their customers to use carry-on bags rather than checking their luggage.

– Between 1998 and 2010, its rate of bag reports was worse than the industry average only once – in 2001. Since 2011, Southwest’s rate has been worse than the industry average for three of four years.

– Through September, the 2014 rate is 4.27 bag complaints per 1,000 passengers, or 10th out of 14 U.S. carriers. That compares to the 1998-2013 average of 4.10 reports per 1,000 passengers.

UPDATE, 4 p.m.: Southwest Airlines spokeswoman Brandy King issued this response:

“Although it’s a common practice, informational picketing does not change the Company’s approach to negotiations. We continue to share the Union’s sense of urgency to secure a fair agreement. Reaching the right deal for both Employees and the Company remains a top priority; and it must be one that is fair to all Employees, enables the Company to grow, and protects our position as a low-cost leader in the industry.
“We have a renewed focus and effort on improving baggage delivery and over the past few months, we’ve seen a steady decline in our mishandled baggage rate. In October, we proudly delivered approximately 99.5 percent of our bags correctly and we continue to see improvements.
“Regarding the number of bag carried, the packing habits of Southwest passengers haven’t changed. Customers continue to pack the same number of bags since the “Bags Fly Free” campaign was initiated in 2008. What the campaign has done is attract more Customers to Southwest, improving the bottom line. At the same time, the number of bags carried on other airlines has decreased, which improves their overall DOT ranking.
“As the number of Southwest Customers increase, we continue to hire in response to that growth. Over the last three years, the annual number of bags handled per Ramp Agent has steadily declined, not increased.”
Back to original item:

TWU is taking out an ad in Tuesday’s USA Today with the message “Help me… I’m Lost.” In TWU’s release, Cerf noted that Southwest is operating bigger airplanes — 143-seat and 175-seat Boeing 737s rather than the 122-seat and 137-seat 737s of the past.

“Quite simply, under the leadership of Gary Kelly, Southwest Airlines places profit ahead of people and a quality product. The airline now flies larger planes packed with more bags than ever before but doesn’t hire additional baggage handlers and in the past four years, hasn’t provided a raise to half of its ground workers,” its ad says.

While the ad says Southwest was “historically known for rarely losing luggage,” the carrier has ranked in the bottom half – the worse half – of the industry for eight of the past 17 years. It has finished first only once.

“With more suitcases, larger planes, tighter schedules and an overworked ground crew, it is sadly no surprise that we’re losing more bags than anybody else. That means delays for all Southwest customers – even those who don’t check their baggage,” Cerf said.

Contract talks between Southwest and Local 555 started in July 2011. The union had picketed in March 2013 and focused its criticism then on Southwest’s efforts to use more temporary labor during high-demand periods.

Cerf was one of 10 union presidents to sign a June letter in which they criticized the poor morale at the carrier and urged management to reach new contracts with their labor groups.

Below, we have some charts of Southwest’s position relative to the industry.

First, here is Southwest’s ranking on total bag reports (complaints) and on total passengers carried.


Next, here is Southwest’s rate of bag reports per 1,000 passengers compared to that of all carriers tracked by the U.S. Department of Transportation.


(Terry Maxon - Dallas Morning News)

Sunday, November 23, 2014

Copa Holdings 3Q net income drops 47.6% on Venezuela capacity cuts

Copa Airlines 737-8V3 (36550/3114) HP-1537CMP arrives at Los Angeles International Airport (LAX/KLAX) on January 25, 2012.
(Photo by Michael Carter)

Copa Holdings, parent company of Panama-based Copa Airlines and Copa Airlines Colombia, reported third-quarter net income of $66 million, down 47.6% year-over-year, compared to the company’s $126 million net in the year-ago September quarter.

Total revenue for the quarter was $663.7 million, down 2% year-over-year as expenses came to $552.6 million, up 4.3%; the company’s operating income totaled %111.1 million, down 24.7% year-over-year from $147.5 million in the third quarter of 2013.

Third-quarter yield fell 7.7% year-over-year to 15.9 cents as RASM dropped 9.9% to 12.5 cents though CASM improved to 10.4 cents (falling 4.1% year-over-year). CASM excluding-fuel was also down, dropping 5.7% year-over-year to 6.4 cents. Copa’s third-quarter fuel expenses were $212.6 million, up 7.3% year-over-year (a result of a 7.2% increase in gallons consumed during the quarter, Copa said).

Copa said the quarter’s lower passenger revenue yields were driven largely by the carrier’s 50% reduction of capacity in Venezuela, as well as the stipulation that ticket sales in Venezuela must be sold in bolivars, as opposed to US dollars.

As of Sept. 30, Copa Holdings reportedly has $520.7 million in funds subject to exchange controls in Venezuela still pending repatriation.

Consolidated traffic during the third-quarter was up 6.3% year-over-year to 4.04 billion RPMs on an 8.7% capacity increase to 5.3 billion ASMs, resulting in a quarterly passenger load factor of 76.3%, down 1.8 points year-over-year. Copa’s consolidated passengers-carried during the third-quarter was 1.9 million, down 3.5% from the year-ago quarter.

In a Nov. 20 quarterly results conference call with analysts, Copa announced its intention to launch Copa’s own customer loyalty program in July 2015. Until then, United MileagePlus will continue as the company’s frequent flyer program. Additional details about Copa’s new loyalty program will come in March 2015.

Copa Airlines [Panama] took delivery of three Boeing 737-800s during the quarter, bringing Copa Holdings’ consolidated fleet, as of Sept. 30, to 96 aircraft.

(Mark Nensel - ATWOnline News) 

Emirates first A380 completes first 3C check

Emirates A380-861 (c/n 011) A6-EDA arrives at Los Angeles International Airport (LAX/KLAX) as "UAE7223 Super" on August 5, 2008 as it operates a demonstration flight to the airport.
(Photo by Michael Carter) 

Emirates Engineering has completed a 3C check, the largest maintenance check on any aircraft, on the first A380 delivered to Emirates Airline. The Dubai-based carrier received the A380 (registration EDA-Echo Delta Alpha) in June 2008.

Emirates said in a statement the major overhaul has restored the carrier’s first A380 to near pristine condition. In a round-the-clock operation, which took 55 days, two teams of highly specialized engineers stripped the entire interior of the double-decker aircraft to the bare metal hull, inspected and overhauled every single part, and then reassembled the components.

“The entire check is meticulously planned with no room for delays. Grounding an aircraft for such a long time is a tremendous expense,” Emirates VP-base engineering Colin Disspain said.

“Here in Dubai we operate aircraft under some of the world’s toughest conditions, including soaring temperatures and a sandy environment. This requires Emirates to increase maintenance standards to this specific situation. For example, parts often need to be exchanged instead of just cleaned in order to achieve our high level of quality and precision,” Disspain said.

Echo Delta Alpha had flown 20 million km, the equivalent of almost 27 return trips to the moon. It has completed more than 3,000 takeoffs and landings, carrying over 1.2 million passengers. The check was completed with a rigorous test flight before being put back into regular service.

Emirates operates a fleet of 232 aircraft, including 55 A380s—the world’s biggest fleet of the type. To date, Emirates’ A380 fleet has carried 27.5 million revenue passengers, made over 68,800 trips and covered more than 405 million km.

Its Dubai-Los Angeles route is the world’s longest commercial A380 flight in operation, and its Dubai-Kuwait route is the world’s shortest.

By the end of this year, the number of destinations served by an Emirates A380 will increase to 33, with the addition of San Francisco service from Dec. 1 and Houston service from Dec. 3.

(Kurt Hofmann - ATWOline News)

Air China, Air New Zealand to form alliance

Air China 777-39L (38671/1032) B-2032 departs Los Angeles International Airport (LAX/KLAX) on February 12/2013 sporting the carriers "Star Alliance" livery.
(Photo by Michael Carter)

Air China and Air Zealand announced they have signed a statement of intent that will pave the way for a strategic alliance on services between China and New Zealand.

The proposed alliance between the two national flag carriers and Star Alliance partners would see Air China operate a new direct Beijing-Auckland service in addition to Air New Zealand’s existing Shanghai-Auckland service. The alliance remains subject to regulatory approval.

An alliance between the carriers would bring better network connections in both China and New Zealand and increased frequency of flights.

Air China CEO Song Zhiyong said alliances and partnerships are an important way to expand its international network. “In the past three years, we have witnessed double-digit annual growth in the number of Chinese outbound tourists.

New Zealand is one of the most important markets for outbound travel from China and Air China is confident about the promising future of this market, particularly considering the airline's close ties with Air New Zealand, an innovative airline full of vitality and dynamism.”

Air New Zealand CEO Christopher Luxon said a deeper bilateral agreement between the two airlines would help facilitate both business and tourism links between the two countries.

“China is New Zealand’s second largest inbound visitor market and we expect interest in visiting New Zealand to continue to grow amongst Chinese travelers. However, China remains a challenging market for us to operate to. Working with a strong, well-respected home market carrier like Air China would give us a huge opportunity to convert this potential growth, while jointly offering the additional capacity to support it.”

The airlines will continue discussions and hope to reach an agreement early next year that can be filed for regulatory approval.

(Linda Blachly - ATWOnline News)

ANA seeks clearance for cargo JV with United Airlines

All Nippon Airways (ANA Cargo) 767-381F (33509/937) JA602F climbs from Rwy 7R at Anchorage-Ted Stevens International Airport (ANC/PANC) on September 27, 2007.
(Photo by Michael Carter)

Japan’s All Nippon Airways (ANA) is seeking permission to form a transpacific cargo joint venture (JV) with its Star Alliance partner United Airlines.

ANA filed its antitrust application to the Japanese transport ministry MLIT on Friday, with the aim of creating “a more efficient and comprehensive” transpacific cargo network.

In a stock market disclosure, ANA said the two carriers are looking to “jointly manage transpacific air cargo business activities including scheduling, pricing and sales.”

It said the JV, which needs Japanese and US clearance, would be the first of its kind between the US and Asia, delivering “substantial service benefits,” greater choice and enabling the partners to compete more effectively with other airlines.

“United Airlines and ANA are members of Star Alliance, and this cargo joint venture will expand the relationship they have established on passenger service to the area of cargo service to further increase customer benefits,” ANA said.

The Japanese carrier already has passenger joint ventures in place with United Airlines (transpacific), Lufthansa, Swiss International Air Lines and Austrian Airlines (Japan-Europe).

The move forms part of ANA’s cargo expansion. It recently created a new ANA Cargo business unit to manage its freight activities and fleet of 10 Boeing 767 freighters, which operate from its Okinawa cargo hub.

(Victoria Moores - ATWOnline News)

Chinese Aerospace Still Behind in Fulfilling Big Ambitions

China's Comac group has yet to complete certification of the delayed ARJ21 regional airliner even as it struggles to overcome delays on its larger C919 program.
(Photo by Guillaume Lecompte-Boinet)

The recent "Airshow China" in Zhuhai left visitors with little doubt about the scope of China’s ambitions in the aerospace sector. In addition to the three new airliners under development by the country’s state-controlled airframers—the C919 narrow-body, and ARJ21 and MA700 regional airliners—multiple programs for new general aviation aircraft and helicopters have gotten underway.

China’s leading OEM, Commercial Aircraft Corporation of China (Comac), projected a high profile at the show, but once again seemed unwilling to provide clear updates on the timelines for several of its delayed programs.

“China wants to re-create Airbus’s success against Boeing,” commented Jean-Luc Doublet, vice president of the Chinese subsidiary of aerospace group Safran. It serves as a major partner in the C919 (providing engines and electrical power), which carries a shipset value of approximately $14 million.
Nonetheless, the C919 has fallen some two years behind schedule, and Comac now projects a first flight towards the end of 2015. But the programs major partners have indicated that a more realistic target would be the first half of 2016, followed by service entry in 2018. “It is normal for there to be delays but we are confident,” said Jacques Salvat, director of customer support in China for Zodiac Aerospace. The French manufacturer provides systems such as oxygen and water distribution.
According to Comac, it intends to achieve a production rate of between 50 to 150 aircraft per year for the C919, which it views as a rival to Boeing’s new 737 Max and the Airbus A320neo.
One of the key questions for the C919 centers on how it will achieve certification. Effectively, the Chinese have used the smaller ARJ21 to prepare the path, but that program is already running six years late. Comac still insists it can achieve initial certification of the regional jet by the end of 2014 and achieve service entry with China’s Chengdu Airlines early in 2015.
“The C919 is the airplane for [Comac] to conquer the Chinese market [now dominated by Western-built airliners], and the ARJ21 is the aircraft being used to prepare for this conquest,” commented Nicolas Bonleux, sales director with Liebherr Aerospace, which serves as a supplier to both programs.
In the twin turboprop sector, the 90-seat MA700—a larger derivative of the existing MA600 modelalso is running late. Its developers now project service entry no earlier than 2019, some two years later than the initial 2017 target. Nonetheless, Western companies carry a vested interest in that program too.
During Airshow China, X’ian Aircraft Industrial Corporation (part of the Avic group) gave Safran subsidiary Labinal Power Systems a contract to provide the MA700’s main and auxiliary electrical generation systems. Also at the show, Safran and Avic announced the creation of a 50:50 joint venture to develop new turboprop technology.
In Zhuhai, the Chinese also shed some light on a planned wide-body airliner development, provisionally dubbed the C929. Comac would develop the airplane through a joint venture with Russia’s United Aircraft Corporation (UAC).
Early specifications include a maximum takeoff weight of between 250 and 300 metric tons (550,000 to 660,000 pounds) and plans call for three versions carrying between 280 and 350 passengers with a range of up to 6,500 nm. Approximately 50 percent of the airframe would consists of composite materials.
The discussions and assessments of the business case, industrial potential, technology transfer, et cetera, are ongoing at this point,” UAC chief executive Mikhail Pogosyan told journalists during Airshow China, but how the partners would structure the joint venture remains a big question. “I don't think the Russia-China alliance will work in the long run,” said an executive with a Western supplier, speaking on condition of anonymity.
In his view, the Russian industry cannot offer its prospective partner enough in the way of production efficiency. Nonetheless, in theory, the partners would base the joint venture in China, leaving UAC responsible for the design and production of the wings and Comac and Avic the fuselage in Shanghai, where the C919 now undergoes assembly.
A Western company would provide the C929’s 80,000-pound-thrust engines. During a presentation in Zhuhai, Comac indicated that it can produce approximately 1,000 C929s and achieve a first flight in 2021 ahead of certification in 2025.
(Guillaume Lecompte-Boinet - AINOnline News)

Airbus wins Delta Air Lines order by default it seems


Boeing attributes the loss of a 50-aircraft Delta Air Lines order announced on 20 November to a lack of available delivery slots.

“Boeing competed for the order with the 787-9, but we did not have enough 787 positions available in the timeframe that met Delta’s requirement,” Boeing says in a statement.

Delta instead ordered 25 Airbus A350-900s and 25 A330-900s, with deliveries beginning in 2017 for the former and 2019 for the latter.

The Flightglobal Ascend fleet database shows 132 overall 787 delivery positions claimed in 2017, leaving only 12 available production slots at planned production rates.

The same database anticipates 113 deliveries of the A350-900 in 2017.

Airbus announced the signing of the deal as a “massive endorsement” for the company’s widebody portfolio, offering two aircraft types in the same class optimised for different roles.

(Stephen Trimble - FlightGlobal News)

Azul reveals more international flight details

Brazil’s Azul has unveiled more details of its product on its new international flights, which begin on 1 December to the USA.
The airline will begin service from Viracopos-Campinas to Fort Lauderdale from 1 December and Orlando from 15 December with Airbus A330-200 aircraft.

Azul will initially offer 272 seats on its A330-200, comprising 24 seats in a “business light” cabin with a 2-2-2 configuration and 248 in economy in a 2-4-2 layout. This configuration is set to change next year, however.

The airline has said previously it plans to reconfigure the A330s from March 2015, after the peak travel season tapers off.

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The airline will offer a full-service product on its international flights, with meals and amenity kits in both business and economy class. Passengers will also get access to snack bars through the flights, and in-flight entertainment in the form of movies and music.

Azul will eventually operate seven A330-200s and five A350-900s on its international flights. It has so far received three of the A330s.

The airline told Flightglobal previously that when reconfigured, five of the seven A330s will have a high density layout of 271 seats while the remaining will have 242 seats.

(Ghim-Lay Yeo - FlightGlobal News)

Economy seat turns into Business-Class suite

The Butterfly seat design by Paperclip Design converts from two economy seats to a business suite. (Paperclip Design)

For the last few years, airline interior designers have been inventing new ways to cram more passengers into an airline cabin.

But the winner of an airline industry award for innovation broke from that tradition with an economy seat that converts to a comfy business-class suite.

The Butterfly design is a set of two economy seats, slightly offset from each other. The two seats can become one business class suite when the seat back on the window-side seat is flipped down, creating a flat couch area. It also reveals extra storage space above and below the seat.

The designer, James Lee of Hong Kong-based PaperClip Design, said the design lets carriers add capacity by turning business class suites into economy seats, if demand calls for it.

“Airlines will be able to boost capacity by up to 30% in some cases when facing extreme situations such as right after a snowstorm when thousands are stuck at the airport, which is good news for both airlines and passengers,” he said.

Lee said several airlines have shown interest in the seat but none have announced plans to install it.

(Hugo Martin - Los Angeles Times)

Boeing 787 Dreamliner: When Can It Churn Profits and Generate Cash Flows?

Boeing's clean-slate, ground-breaking 787 Dreamliner has clocked north of 490,000 hours in service with 21 airline operators since its service entry in November 2011.

The company touts the plane as the first-ever aircraft with 50% structure made of composite material, making it extremely light and efficient. The long-range, midsized, wide-body jet consumes at least 20% lesser fuel compared with similar jets.

With seat capacity ranging between 242 and 323 across the three models -- 787-8, 787-9, and 787-10 -- Boeing claims the plane offers about 10% lower cash seat mile cost. The craze of this plane was such that it attracted a highest bid of $34,000 for a seat in the maiden commercial flight in October 2011.

While such amazing attributes stand the Dreamliner in good stead, what's worrying investors is the spiraling cost of the program -- recently the deferred cost crossed the previously estimated $25 billion mark. When will the Dreamliner start generating positive cash flows?

United Airlines 787-8 Dreamliner
 (Source: Wikimedia Commons)
Unending series of challenges brings nightmares

Boeing warmed up to the idea of making a carbon-composite aircraft in 2003 and unveiled the Dreamliner the following year. All Nippon Airways became the launch customer of the jet with orders for 50 units to be delivered in 2008. However, supply chain and production challenges pushed the plane's entry in to service to 2011.

Technical snags post launch made costs overshoot big time. From engine failures, fuel leaks, to fire on an empty Japan Airlines Dreamliner at Boston, and wiring problems near the main battery -- have led Boeing to spend massively on safety probe while rectifying the issues.

Late this September, a Warsaw-bound 787 made an emergency landing at the Glasgow airport after the fire alarm went off. These incidents have made Dreamliner's deferred costs go through the roof.

Deferred production cost, as Boeing explains, is the difference between how much the aero major spends in making the Dreamliner and how much the company sells it for (excluding the development cost of the plane).

In October 2013, the American giant had lifted its 787 deferred cost projection from $20 billion to $25 billion on account of increased spending to launch the 787-10 and related plans to augment capacity at its factory in North Charleston in 2014 and 2015. However, in the latest quarter, Boeing reported that the Dreamliner's deferred cost has shot up by $947 million and gone past $25 billion to $25.2 billion.

Boeing 787-9 Dreamliner
 (Source: Wikimedia Commons)
When will the program generate positive cash flows?

 Analysts' estimates for a Dreamliner's cost range from $160 million to $232 million (made a year ago at the end of 2013 third quarter). This might appear reasonably below the list price varying from $218.3 million for 787-8 to $297.5 million for 787-10, but there are massive discounts ranging between 20% and 60%, and averaging 45%, according to The Wall Street Journal.

And we know this directly from the horse's mouth. Boeing's said that it's been selling the Dreamliner below cost, which is sending the deferred cost higher. The question is how soon can the company stop bleeding cash?

Boeing expects to break even and earn positive cash flows in per unit sales of some versions next year, helping the deferred cost gradually go down. Currently, the jet maker produces the plane at the rate of 10 a month, and plans to boost it to 12 in 2016 and 14 by 2020.

Boeing's CFO Greg Smith says that once the monthly production rate is augmented to 12 in 2016, deferred cost would start declining at a better rate. According to a J.P. Morgan analyst, the estimated cost and selling price gap had narrowed to $45 million in the third quarter of 2013 compared with $73 million in the first quarter.

Boeing 787-10 Dreamliner
 (Source: Wikimedia Commons)
Working toward breaking-even

Attaining breakeven in 2015 looks like an ambitious target given that Boeing's stocking up on components for the 787-9 to cut production risks and it could do the same for the 787-10. However, Boeing's committed to work on higher efficiency and productivity to improve cash flows. Also, though Boeing bleeds cash on the sale of each Dreamliner, it's able to book profits in its accounts -- thanks to its program accounting method that spreads the huge development cost over an extended time period. 

The company is reorganizing its facilities to extract greater value, holding talks and discussing terms with suppliers and its workforce. There has been some progress, but it "still got a long way to go," says Smith.

According to UBS, the company's definitely reduced the cash burn by lowering costs, but it needs to pull down the costs further to $110 million per unit to stop the cash drain. And this implies working at 50% greater efficiency level than what it managed with the 777. Presently, the 737 and 777 are the key cash generators, offsetting the 787 cash loss. 

It's not very certain when exactly the Dreamliner will convert into a cash generator, but with greater experience and improving efficiency, it may happen sometime in the not-so-distant future. Though higher deferred cost may be worrying, with strong commercial aircraft demand, the 787 program could still fulfill the hopes of investors.

( - The Motley Fool)

Friday, November 21, 2014

Long Beach Airport welcomes new Director Bryant L. Francis

Photo of Bryant L. Francis
City Manager Pat West today named Bryant L. Francis, C.M., an aviation expert with over 18 years of industry experience, as Director of Long Beach Airport (LGB/KLGB). Mr. Francis' appointment will be effective January 5, 2015.

"Mr. Francis is a dedicated, accomplished professional who will provide strong leadership and strategic planning for Long Beach Airport," Mr. West said. “He will reach out and work collaboratively with all stakeholders, including the community, tenants and our commercial and general aviation partners.”

Mr. Francis has served as Director of Airports for the Shreveport Airport Authority in Louisiana since 2012. Previously he was Deputy Director, Properties & Business Development of the Boise Airport in Idaho; Director, Aviation Real Estate for the Wayne County Airport Authority in Detroit, Michigan; Deputy Director of Aviation – Marketing, Communications and Air Service Development for Palm Springs International Airport in California; and Airport Operations Representative for Hartsfield-Jackson International Airport in Atlanta, Georgia.

“I am passionate about aviation, am committed to fostering positive relationships, and will ensure that Long Beach Airport provides the absolute best service possible to its travelers and to all our business and community partners,” commented Mr. Francis.

Mr. Francis’ responsibilities will include oversight of all airport operations, finances and leases, the Airport Noise Ordinance, community outreach, environmental matters and capital improvements.

LGB has won numerous awards, and the Long Beach Airport Area Complex is a major economic development resource, supporting 43,000 jobs and generating more than $11 billion into the regional economy.

Mr. Francis holds a Bachelor of Science degree in Aviation Management from Embry-Riddle Aeronautical University in Daytona Beach, Florida, and is a Certified Member (C.M.) of the American Association of Airport Executives (AAAE).  He is currently a member of the Airports Council International – North America (ACI-NA) Board of Directors as well as Chair of the AAAE Diversity Committee.

Mr. Francis is replacing Mario Rodriguez, who resigned as Director in May 2014 to accept a position as Executive Director of the Indianapolis Airport Authority.

(Long Beach Airport Press Release)

Long Beach Airport wins Helen Putnam Award

On Tuesday, November 18, the Long Beach City Council was presented with the Helen Putnam Award for Excellence in Public Works, Infrastructure and Transportation by the League of California Cities for the new concourse at Long Beach Airport, which provides a unique and innovative space for travelers and serves as an ideal gateway to the City.

"Thanks to the collaborative efforts of the City, the community, and airport tenants, Long Beach Airport is known internationally as an outstanding airport," said Mayor Robert Garcia. “With the receipt of the Helen Putnam award, our Airport is now an even greater source of pride for our City.

”The concourse blends LGB's rich history with a contemporary sensibility and maintains its reputation as the beloved hometown airport. Designed to sustain LGB’s convenience, new features include a consolidated security screening area, spacious boarding lounges, and an expanded food and beverage program with favorite local restaurants.

Councilwoman Stacy Mungo accepted the award on behalf of the City in September at the League of California Cities Annual Conference. “I am proud of Long Beach and our airport team for earning this prestigious award.

The modernization of Long Beach Airport is an example of what local government can accomplish when the community and City work together,” Councilwoman Mungo said. “I hope every resident will consider Long Beach for the travel and share their experience and impressions of our fresh, functional terminal with their friends and neighbors."

The concourse features a resort-like atmosphere that allows travelers the ability to relax in an open atrium, or enjoy spacious seating areas flanked by floor-to-ceiling windows that offer expansive views of the airfield and spectacular sunsets.

"The new concourse provides a roomier, more secured area for TSA inspectors to perform pre-boarding inspections while continuing to offer ease of use by the traveling public,” said Reginald Harrison, Acting Airport Director.

Modern conveniences include an iPad tablet bar where people can check email or order food to be delivered to their seat, USB plug-ins and electrical outlets conveniently placed among the seating areas to recharge electronic devices, and free Wi-Fi throughout the airport. The League of California Cities noted LGB’s ease of use, while accommodating nearly 3 million annual passengers.

About Long Beach Airport

Long Beach Airport (LGB), located in Long Beach, CA, was founded in 1923, making it the oldest municipally owned airport in California. Throughout its 91-year history, LGB has been a source of substantial economic activity and business opportunities, as well as a leader in maintaining a sustainable, environmentally responsible operation.

LGB hosts four airlines offering non-stop service to several U.S. cities and serving nearly 3 million commercial airline passengers annually while supporting a healthy general aviation community with approximately 300,000 annual operations. For more news, pictures, videos and announcements of what's happening, "Like" us on Facebook or follow us on Twitter @LBAirport.

About the Helen Putnam Award

Established in 1982 by the League of California Cities, the California Cities Helen Putnam Award for Excellence program recognizes outstanding achievements by California's 482 cities. These winning cities have made unique contributions to community residents and businesses, contributions which have resulted in lower costs or more effective delivery of services.

(Long Beach Airport Press Release)

U.S. Navy F/A-18E "Super Hornet" 166789

U.S. Navy F/A-18E "Super Hornet" (c/n E135) 166789 of the VX-9 "Vampires" arrived at Long Beach Airport (LGB/KLGB) just before sunset this evening.
(Photo by Michael Carter)

Southwest Airlines 737-7H4 N708SW

Southwest Airlines Boeing 737-7H4 (27842/2) N708SW is captured at John Wayne Orange County Airport (SNA/KSNA) sporting the carriers new livery.
(Photos by Michael Carter)

U.S. Marine Corp AH-1Z "Viper"

U.S. Marine Corp. Bell AH-1Z "Viper" (449) 168000 QT 612 HMLAT-303  performing touch and go's at John Wayne Orange County Airport (SNA/KSNA) this morning on Rwy 20L.
(Photo by Michael Carter)