Boeing has started final assembly of the third and smallest variant in the re-engined 737 Max family.
The first Max 7 flight-test aircraft is now loaded into a final-assembly position inside Boeing's single-aisle production centre in Renton, Washington, the airframer confirmed in a Twitter posting on 22 November.
Final assembly begins after a completed fuselage arrives from Spirit AeroSystems. Boeing manufactures the wings for the 737 Max in a building adjacent to the final assembly hangars in Renton. CFM International ships Leap-1B engines which are installed at the end of the final assembly process.
The 737-7 – with 138-153 seats in a two-class layout – enters final assembly three years after Boeing achieved a similar milestone with the 162-189-seat Max 8. That variant entered service in May.
In December 2016, Boeing started final assembly of the first 178-193-seat Max 9, which is on track to enter service next year. The airframer is also designing the 188-204-seat Max 10.
Though the smallest of the four major Max variants, the 737-7 has the longest range: 3,825nm (7,080km).
Boeing and China's first privately owned airline, Okay Airways, have finalized a $1.4-billion order for five Dreamliner jets, the two companies said on Thursday.
The purchase of the five 787-9 long-haul aircraft by the Beijing-based airline was signed off in the United States on Wednesday and announced on Thursday via the companies' official accounts on Chinese microblogging site, Weibo.
Okay Airways currently has a fleet of 26 single-corridor Boeing 737 planes, which fly to 70 destinations in China and elsewhere in Asia.
The Chinese company had signed a preliminary agreement to buy the planes back in June, when it has also made a firm order for 15 medium-sized 737 MAX planes at a catalogue price of $1.8 billion.
"We are committed to investing in our aircraft fleet in order to keep growing ahead of the market and enhancing our customers' flying experience," said Okay Airways president Li Zongling, according to China's official news agency Xinhua.
He added that the order would strengthen the airline's plans to expand into the long-haul market.
Chinese companies are on the whole profiting from the country's spectacular rate of aviation expansion, fueled by a growing middle class and a rapidly developing tourism industry.
But competition on international routes is becoming more intense, with China's three airlines -- Air China, China Southern and China Eastern -- fighting it out to lead the sector.
Air China has suspended flights to North Korea, further limiting the secretive state's links with the outside world, but the company said Wednesday it was a business decision.
The suspension comes shortly after US President Donald Trump visited Beijing and pressed his counterpart Xi Jinping to do more to rein in North Korea's nuclear program.
China sent a special envoy, Song Tao, to the North last week but his four-day trip ended with no direct statement on the crisis, after Pyongyang's series of nuclear and missile tests triggered global alarm.
Air China said in a statement to AFP that it cancelled the Beijing to Pyongyang flight route because the "operational situation is not ideal".
"Market conditions will determine the resumption of the flight route," the statement said.
Air China last cancelled flights to North Korea in April, citing low customer demand, but resumed them soon after.
China has denied any political motives behind its flag carrier's suspension of the route.
"The airliners just work out their own operation plans based on the state of operation and the market," foreign ministry spokesman Lu Kang said at a press briefing on Tuesday when asked about the apparent move.
Passengers flying from Beijing to North Korea are now left with just three regularly scheduled flights each week, on the North Korean state airline Air Koryo.
Air Koryo also operates flights from the northeastern Chinese city of Shenyang to Pyongyang, though it halted flights from the Chinese border city of Dandong earlier this year.
Beijing is Pyongyang's only major ally and biggest trade partner, though in August China said it would abide by new UN sanctions which heavily curtail the North's exports of its most profitable goods.
The US on Tuesday unveiled new sanctions targeting North Korean shipping and Chinese traders doing business with Pyongyang, again raising the pressure on the pariah state to abandon its nuclear program.
China's foreign ministry rejected the sanctions on Chinese firms as "wrong", stressing that Beijing has enforced UN measures curbing trade with Pyongyang.
The Department of Transportation (DOT) has canceled Eastern Air Lines’ air operator’s certificate (AOC), thus bringing to close a long-running—and some say, quixotic—attempt to revive a name storied in aviation history.
DOT, in an order dated Nov. 20, said it would “cancel the certificate authority issued to Eastern Air Lines Group Inc., authorizing it to engage in interstate and foreign charter air transportation of persons, property and mail.”
Eastern on Nov. 13 notified DOT that it would it voluntarily surrender its operating certificate to the FAA and that “[the carrier] did not object to the [DOT] canceling its economic authority.”
The order took immediate effect—although Eastern, or any interested party, has 10 days to petition DOT.
The department awarded the revived Eastern economic authority on April 28, 2015. DOT expanded the certificate to allow Miami-based Eastern to fly foreign charter operations in May 2015. Eastern operated charters between Miami and Havana, Cuba, and planned scheduled service to other points in Latin America and the Caribbean.
In 2016, Eastern applied for some of the 20 daily scheduled frequencies between Miami and Havana made available by the US-Cuba bilateral air services agreement. DOT denied Eastern’s application, arguing that it had not established a record of service at the time.
The carrier leased Boeing 737s and had orders for 10 737-8s scheduled for delivery beginning in 2020. Eastern also ordered 20 Mitsubishi MRJs; these were scheduled for delivery in 2019.
The carrier made the news in 2016, when a charter flight carrying then-Indiana Gov. Mike Pence (the 2016 Republican vice presidential candidate), overran the runway at New York LaGuardia Airport. On Oct. 27, 2016, the Boeing 737-700 skidded off the runway during wet and overcast conditions, and was stopped by the arresting material at the end of the runway. No injuries were reported.
Eastern ceased operations Sept. 7. The original Eastern Air Lines operated from 1926-91 and was one of the original “Big Four” US carriers. Since 1991, a number of attempts to revive the brand have failed.
Lie-flat business-class seats have become the standard for long-haul international flying. Delta Air Lines, in fact, has concluded that lie-flat alone is no longer good enough; just launched Delta Airbus A350-900 Detroit-Tokyo Narita service debuts Delta One business-class seats with sliding doors to create privacy compartments. This mirrors long-haul business-class service offered by a number of Asian and Middle East airlines.
What about the domestic market? Delta has just added lie-flat seats on at least one daily flight on six more domestic routes. By May 2018, 10 Delta domestic routes will offer lie-flat seating.
Could lie-flat become the standard on US transcontinental service and on domestic flights to Hawaii from the US midwest and east coast?
Increasingly, Delta, United Airlines and American Airlines are offering lie-flat seats in domestic business class (or, in the parlance US airlines use, domestic “first class”) on transcontinental flights. JetBlue Airways’ lie-flat Mint product continues to grow and perform well; Mint-configured Airbus A321s now make up the majority of JetBlue’s transcon capacity.
There are still a lot of transcon flights without lie-flat seats. For example, if next summer you are looking to fly from New York to Las Vegas in comfort, Delta will offer lie-flat seats on just one of its five daily flights on the route. But on routes like New York-Los Angeles and New York-San Francisco, lie-flat offerings are becoming pretty ubiquitous.
The move to transcon lie-flat seating in business class comes as Delta and American also re-introduce economy-class meals at no extra fee on select cross-country flights.
US airlines are correcting one of their big customer service miscues of the past (driven, in part, by terrible financial performances): treating all domestic flights the same. US carriers are now conceding that a 1-2-hour flight up and down a coast or over a portion of the country is simply not the same as a 5-hour transcontinental flight.
The service offered on the long-distance transcon flight has to be closer to what the carriers are offering on international flights than to service on a domestic short-hop. Consistent profitability gives US airlines the opportunity to offer a much better product across the board, and an overdue transcontinental customer service arms race between US carriers appears to be on.
A Hainan Airlines Boeing 787-8 has completed China’s first intercontinental passenger flight with sustainable fuel produced from waste cooking oil from restaurants in China by Sinopec.
According to Xinhua News Agency, Hainan Airlines flight 497 flew from Beijing to Chicago O’Hare International Airport Nov. 21 after flying more than 11,000 km (6,835 miles).
The biofuel flight was part of a cooperation project on green aviation between China and the US.
In 2015, the Haikou-based carrier launched China’s first biofuel passenger flight on domestic routes operated by a Boeing 737-800. In 2011, Air China operated the first biofuel test flight using a Boeing 747-400 powered partially with jatropha-based fuel.
Lufthansa will expand Boeing 747-400 operations between Frankfurt and Berlin Tegel airports, citing high demand on the domestic route since the closure of bankrupt airberlin.
On Nov. 1, Lufthansa launched 747-400 operations and will add 28 747 flights to Berlin in the first three weeks of December.
“From an economic point of view, this exceptional measure does not pay off, but in difficult times it creates additional capacity on this important route and offers many more travel options to many guests,” Lufthansa executive board member-hub management Harry Hohmeister said in a statement.
Lufthansa operates up to 16 daily flights on the route, making it the German carrier’s most-flown sector in the network.
Hohmeister said the Berlin Tegel infrastructure is not ideal for 747-400s properly; however, Lufthansa and airport employees are doing a “fantastic job” in handling the widebody.
In total, Lufthansa will operate 90 747-400 flights in November and December, transporting more than 350 passengers on each flight.
Shenzhen-based SF Airlines purchased two Boeing 747 freighters for CNY320 million ($48 million) via an online auction conducted by China’s e-commerce company Alibaba Group Holding.
The aircraft were formerly operated by the insolvent Jade Cargo International, which filed for bankruptcy in 2013.
Alibaba had put three 747Fs up for sale—two are parked at Shanghai Pudong Airport and the third one is at Shenzhen Bao’an Airport. However, Alibaba didn’t specify which two aircraft SF Airlines purchased.
SF Airlines, China’s biggest express delivery carrier, was launched in 2009 and operates 40 freighters, comprising Boeing767/757/737 aircraft as of August 2017.
In a further indication of growing preparations for the expected launch of the new mid-market airplane (NMA) in 2018, Boeing has appointed former 777X chief project engineer Terry Beezhold to an unspecified senior leadership role on the embryonic small twin-aisle program.
Beezhold’s move comes less than two months after Boeing formally established the NMA project office and named 787 veteran Mark Jenks as vice president and general manager. Although falling short of a formal program launch, the setting up of the project office gave notice that Boeing moved “one step closer to a decision on a NMA and also serve as a vehicle to evolve how we design and build airplanes,” according to Boeing Commercial Airplanes president and CEO Kevin McAllister.
Initially emerging as a potential successor to the 757, the NMA has morphed over the past two years into a twin-aisle design targeted at a much broader, all-new market estimated at over 4,000 units.
At the recent Paris Air Show, Boeing outlined plans for an aircraft with all-composite fuselage and wings, which would seat 220–270 passengers and fly ranges of as much as 5,200 nm. If launched, the NMA will enter service in 2025.
The appointment of Beezhold, first reported by CNN, is also viewed as particularly significant because of his close association with an earlier role, prior to the 777X, that focused on building aircraft affordably through common tools and processes across different programs. The proposed NMA will be a widebody design, but in order to meet the business case for marketing to a broader set of operators, it will only be offered if Boeing can build it at a cost more typical of a single-aisle design.
Beezhold, formerly 787 airplane level integration team lead before being appointed in 2011 to the newly created role of vice president of processes, tools and affordability, was specifically responsible for cutting the non-recurring costs for future aircraft product developments. At the time, these included the 737 and what would later become the MAX, as well as the “Advanced 777,” which in 2013 was launched as the 777X. Beezhold’s responsibilities also included ensuring all Boeing Commercial Airplanes computing processes and tools supported the entry into service for the 747-8 freighter, and Intercontinental and 787, as well as enabling the planned rate increases for the 737, 767 and 777 programs.
UK LCC easyJet has posted a sharp 30% net profit decline for the full year ended Sept. 30, dropping to €305 million ($403.5 million), although revenue and traffic were boosted by European consolidation.
Outgoing easyJet CEO Carolyn McCall described the full-year results as a robust performance during a difficult year, which saw German carrier airberlin and UK leisure airline Monarch Airlines suspend operations and Italian flag carrier Alitalia enter administration.
“What you can see is capacity shaking out even more, with the weak players becoming weaker and the strong players becoming stronger,” McCall said, speaking on the airline’s results call. “Any capacity reduction created by anybody is a benefit.”
McCall said there was no doubt that easyJet had gained from capacity coming out of the market, particularly in the case of Monarch.
Irish LCC Ryanair also canceled thousands of flights because of a crewing error, but the positive impact of Ryanair’s difficulties was minimal because Ryanair and easyJet only overlap on 8% of their networks. “From what you read in the newspapers, you’d think we were head-to-head everywhere; we’re not,” McCall said.
During the 12 month-period, easyJet carried a record 80.2 million passengers, up 9.7% year-on-year. Paired with 8.5% capacity growth, this pushed easyJet’s average load factor up by a point to a high of 92.6%.
Revenue rose 8.1% at £5.04 billion, fueled in part by 17.8% growth in ancillaries, but revenue per seat dipped 0.4% to £58.23—or 4.5% at constant currency—because of excess capacity and fierce competition.
The strong traffic and revenue performance was marred by a £101 million currency hit, pushing pre-tax profit down 17.3% to £408 million and net profit down 30.2% to €305 million.
Total costs increased by £500 million to £4.7 billion and cost-per-seat ex-fuel increased 7.7% to £41.27, or 0.9% at constant currency.
EasyJet has set up an Austrian air operator’s certificate (AOC) as a Brexit contingency plan, because 30% of its flying is within EU member states. McCall said 12 aircraft have already been transitioned to Vienna-headquartered easyJet Europe and, over the next 18 months, easyJet plans to move a total of 100 aircraft across. Setting up the AOC cost easyJet £2 million in the 2016-17 financial year and is expected to total up to £10 million over three years.
The LCC is also acquiring some of the assets of German leisure carrier airberlin and is still in the running for Italian network airline Alitalia.
“We now have a huge amount of positive momentum to allow the airline to grow its profit,” McCall said. “We have a unique combination that no other airline can match.”
Amid all this activity, McCall will step down on Nov. 30, handing over to Johan Lundgren, who was previously TUI Group deputy CEO.
When asked whether it was a bad time to leave, McCall replied: “This is probably the easiest we’ve had it in a long time. We chose to do airberlin and we have massively reduced the risks of Brexit—all we need now is a bilateral between the UK and Europe. A lot of things a CEO has to deal with are external. Because we’ve taken control, there are plates spinning, but they’re manageable plates. You have to leave when things are on the up and easyJet very much on the up. It’s the best time to leave the company; it’s in good hands.”
EasyJet plans to grow capacity by around 6% for the 2018 financial year, excluding the airberlin transaction.
Revenue trends are positive, because of market consolidation, and easyJet is now anticipating low- to mid-single digit revenue per seat growth at constant currency in the first quarter and first half.
In 2018, easyJet expects to cut its cost-per-seat by around 2%, excluding the impact of airberlin costs, although the figure will rise by up to 1% ex-fuel and at constant currency.
EasyJet operated 279 Airbus A320 family aircraft as of Sept. 30. The LCC has a further 143 aircraft on order, with 36 scheduled to arrive in 2018, 21 in 2019, 23 in 2020, 35 in 2021 and 28 in 2022.
Rendering of Boeing 737 MAX 8 in Aerolíneas Argentinas livery. (Boeing)
CEO Mario Dell’Acqua said Aerolíneas Argentinas will take delivery of its first Boeing 737 MAX 8 Nov. 29. The aircraft will make its first commercial flight Dec. 1.
“It is a great honor to be the first Latin American airline to fly the MAX,” Dell’Acqua told ATW on the sidelines of the ALTA Airline Leaders Forum in Buenos Aires Nov. 20. “Having the MAX will allow us not only to improve our costs but also to potentially serve routes to the Caribbean with the MAX that we now serve with widebody aircraft, due to its improved autonomy.”
Buenos Aires-based Aerolíneas will receive an additional MAX 8 in December. Three more will be delivered in 2018 and a total of 12 will arrive by 2020, Dell’Acqua said. The airline intends to continue operating its 737-800s.
According to the airline’s fleet plan, Aerolíneas will end 2017 with 12 Airbus widebody A330/A340 aircraft, 41 Boeing 737 aircraft, including 39 737NGs and two new 737 MAX 8s, as well as 26 Embraer E190s that operate on Aerolíneas’ regional subsidiary Austral.
The Airbus A350-1000 has gained both EASA and FAA type certifications, the manufacturer announced Tuesday.
Type certification of the widebody Nov. 21 came almost one year after the aircraft’s first flight.
Airbus expects to deliver the first A350-1000 to launch customer and operator Qatar Airways before the end of this year. The first aircraft is in the final assembly line and will be transferred to the flight line in early December.
The A350-1000 test program comprised 1,600 hours and involved three aircraft. Around 150 flight hours were dedicated to route proving in an operating environment typical for airlines.
Airbus A350 chief engineer Alain de Zotti said all performance targets were met or exceeded. The aircraft also remained within its weight specification, unlike early versions of the A350-900, the first A350 variant to enter service.
Airbus has 169 firm orders from 11 customers for the -1000. There are 681 orders for the smaller A350-900, 122 of which had been delivered by the end of October.
A US legislative proposal to tax certain foreign airlines—and which seems to target the major Gulf carriers—is a dangerous move, the head of the Arab Air Carriers’ Organization (AACO) warned Tuesday.
The amendment has been latched to the US tax bill that has been passed by the House of Representatives, but has still to be passed by the Senate. The bill, however, is being pushed through at speed as the White House is keen to see tax reform, one of its key campaign pillars, enacted by the end of the year.
Senator Johnny Isakson, a Republican in Delta Air Lines’ home state of Georgia, added language in November to Senate finance committee chairman Orrin Hatch’s tax bill that would lead to the Gulf carriers being subject to US taxes.
Current US tax laws provide reciprocal exemption for gross income derived by foreign airlines. Under the Isakson proposal, that exemption would no longer apply if two conditions exist: The foreign airline is headquartered in a country that does not have an income tax treaty with the US and American passenger airlines operate fewer than two arrivals and departures per week to that foreign country.
Those conditions would encompass the UAE, home of Abu Dhabi-based Etihad Airways and Dubai-based Emirates Airline, and Qatar, home of Qatar Airways.
Those three Gulf carriers have been in the crosshairs of a campaign led by Delta, American Airlines and United Airlines, to curtail their growth in the US market. The US carriers allege that the Gulf carriers operate with the support of large government subsidies that contravene the US Open Skies agreements with the UAE and Qatar. The Gulf carriers strongly deny the subsidy allegations.
At the opening session of the AACO AGM in Sharjah Nov. 21, AACO Secretary General Abdul Wahab Teffaha raised the tax amendment issue after a presentation by IATA SVP Africa & Middle East Muhammad Al Bakri.
Teffaha asked Al Bakri to relay AACO’s concerns to IATA.
Describing the aviation tax proposal as “an extremely bad turn of events,” Teffaha said the dangers were twofold: it would suppress demand for travel and it could proliferate.
“This will hurt global aviation in a major way like nothing else,” Teffaha said. “There is a real danger it will suppress aviation and it will be bad for the consumer. And there is also the danger of proliferation; I am afraid that many countries will see what the US is doing and will follow suit.”
Teffaha told ATW that the US should also be cautious about the likelihood of reciprocal taxation on its carriers, especially by Latin American countries where similar conditions apply.
If the US tax bill does get passed with the aviation amendment, it would be effective for taxable years beginning after Dec. 31, 2017.
Some countries have full-fledged tax conventions with the US to ensure reciprocal tax exemptions. Other countries have reciprocal non-taxation agreements with the US that are not on the same level as tax treaties, but which have the same effect. The Isakson language targets the UAE and Qatar, which have the latter, and where there are fewer than two weekly arrivals and departures by US carriers.
But while the amendment seems to target the three Gulf carriers, it would immediately have a broader impact because it would also encompass the airlines of countries that include Saudi Arabia, Jordan, Bahrain, Malaysia and more.
“This is really bad public policy with potential ramifications for other US industries. If you set a precedent of using reciprocal tax exemptions as a competitive weapon, there surely are other countries and foreign competitors in a range of industries that will be intrigued by the prospect of applying that precedent to competitive US companies in a variety of sectors, not to mention foreign state treasuries that would like the extra revenue,” an industry source told ATW.
American, Delta, United and US airline labor groups have spent millions of dollars in their campaign against the Gulf carriers. In 2015 alone, tax filings show, The Partnership for Open and Fair Skies, which represents the airlines and a coalition of unions, spent $6.1 million.
Boeing and Royal Jordanian Airlines have signed a five-year strategic training agreement to help train the airline’s Boeing 787 pilots.
The agreement, announced at the Dubai Air Show, will see Royal Jordanian pilots undergo type-rating and recurrent training at Boeing Global Services’London Gatwick training campus.
“To attract a new generation of pilots, we need to inspire them and train them in new ways, and Boeing is at the forefront of developing innovative training methods,” Royal Jordanian president & CEO Stefan Pichler said.
Over the next 20 years, Boeing projects a global demand for more than 1.2 million pilots and technicians with more than 10% of that driven by the Middle East. Boeing provides commercial flight training at eight campuses around the world.
Royal Jordanian flies seven Boeing 787-8s as the long-haul component of its fleet.
Nigeria’s President Muhammadu Buhari admitted he is under “tremendous” pressure to establish a national airline due to both patriotic and economic reasons.
Speaking at the State House, Abuja on November 20, 2017, the Nigerian President said the idea of reviving the national carrier has a lot of public support. According to him, the idea is primarily driven by patriotic feelings, but makes economic sense as well, since Nigeria has the needed resources, such as pilots or engineers.
Despite being personally in favor of the idea, Buhari also noted that prior doing that “Nigerians need to know how we lost the one we had before,” according to the Independent Newspapers Nigeria.
If the idea to create a new airline goes through, this will be the third attempt of Nigeria establishing a national carrier. The first national carrier - Nigeria Airways - was founded in 1958 under the name WAAC Nigeria, and lived for 45 years before ceasing operations in 2003. A year later, the attempt to revive the national carrier came into force, with the establishment of Air Nigeria in 2004. The second airline lived for less than a decade, ceasing its operations in September 2012.
On November 16, 2017, Russia presented its new Tu-160M2 Blackjack long-range super bomber. The aircraft was rolled out at the S.P. Gorbunov assembly facility in Kazan, in southwest Russia. According to the manufacturer, aerospace and defense company Tupolev, the plane is scheduled to make its first test flight in February 2018.
The Tu-160M2 is an upgrade to the Tu-160M and original Tu-160 aircraft. The new aircraft is sharing with Tu-160M the same avionics, sensors, displays, communications systems, and operating software, the Jane's Defense Weekly informs.The only comparable difference between the Tu-160M and the Tu-160M2 is the new Kuznetsov NK-32-2 turbofan – an afterburning 3-spool low bypass turbofan jet engine, which is the largest and most powerful engine ever fitted on a combat aircraft.
Also, the Russian Deputy Minister Dmitry Rogozin claimed that the Tu-160M2 has new radio-electronic equipment onboard, RIA Novosti reports.
According to the country's Ministry of Defense, the serial production of the Tu-160M2 will begin in 2023. The Russian Air Force, which has 16 Tu-160 aircraft in its fleet, is planning to acquire at least 50 Tu-160M2s, TASS informs.
Tu-160, codenamed Blackjack by NATO, is a supersonic, variable-sweep wing heavy strategic bomber designed in the 1970s. It is the largest and the fastest military supersonic fighter currently in use and also the heaviest combat aircraft in the world, called White Swan among the pilots.
The Tu-160 active fleet has been undergoing upgrades to electronics systems since the early 2000s. The Tu-160M modernization program has begun with the first updated Tu-160M aircraft delivered in December 2014. Russia's Defense Ministry decided to resume the production of Tu-160 bombers in the upgraded version of the Tu-160M2 in 2015.
On November 14, 2017, the US Senate Republicans released changes to their tax bill, proposing exempting excise taxes on the management fees of private planes.
The bill ensures that private jets under management companies that handle storage and upkeep do not face the same taxes as commercial airlines, aviation tax attorney Troy Rolf told The Wall Street Journal.
As for now, a 7.5% „ticket“ tax is imposed on each commercial air travel in the US. Until several years ago, owners of private aircraft using planes for personal or business travel were free from this type of tax. However, they paid management companies for aircraft assistance.
In 2012, the Internal Revenue Service (IRS) issued a Chief Counsel Advice which said that private jet owners should also pay a 7.5% tax. According to the organization, a management company provides all of the essential elements necessary for air transportation and the owner “relinquishes possession, command, and control to the management company.” Thus, according to the IRS, the management company was required to collect the appropriate federal excise tax from the aircraft owner and remit it to the IRS. In 2013, the IRS suspended its attempts to collect the tax, faced opposition from the aviation industry.
The main Senate bill on the taxation of private jets was proposed by Senator Sherrod Brown. Jennifer Donohue, a spokeswoman for the Senator, told the Wall Street Journal that “this provision in no way cuts taxes for private jet owners, but simply clarifies what the law already says—that service companies made up of mechanics and service workers do not pay ticket taxes, because they don’t sell tickets.”
According to the Joint Committee on Taxation, exempt payments are the amounts paid by an aircraft owner for management services. They include “support activities related to the aircraft itself, such as its storage, maintenance, and fueling, and those related to its operation, such as the hiring and training of pilots and crew, as well as administrative services such as scheduling, flight planning, weather forecasting, obtaining insurance, and establishing and complying with safety standards.”
Following the Republican bill, on November 15, 2017, the US National Air Transportation Association released an official statement which says that “tax reform legislation has a long way to go, but this is an important step and small aviation businesses are appreciative of the inclusion of this provision, which provides them the tax certainty they have long sought. ”
According to the JCT letter issued in 2016, it is estimated that the exempting owners or leasers of private aircraft from paying taxes on the costs related to the maintenance of the jets will reduce federal fiscal year budget receipts by less than $500,000 for the period 2017-2026.
The US Department of Transportation (DOT) has approved the Delta Air Lines-Korean Air transpacific joint venture (JV).
“The DOT approval reflects the consumer benefits that will be created by the new joint venture,” Atlanta-based Delta said in a statement. “The two carriers will deepen their relationship, offering customers in the US and Asia an enhanced and expanded flight network as well as more compelling travel options.”
The SkyTeam members are still awaiting approval from South Korea’s Ministry of Land, Infrastructure and Transport. It is unclear how long that approval will take; it is believed to be the first time airlines have sought such an arrangement in South Korea.
The antitrust-immunized JV will enable the carriers to share costs and revenue on flights between the US and South Korea.
“The joint venture will create a combined network serving more than 290 destinations in the Americas and more than 80 in Asia, providing customers of both airlines with more travel choices than ever before,” Delta said. “The joint venture will provide both airlines with the expanded scale and scope to offer new alternatives to customers. The two airlines will also expand codeshare flights on transpacific routes.”
Delta launched daily Boeing 777-200ER flights between Atlanta and Seoul Incheon in June 2017 and expanded its codesharing with Korean Air, which already operated daily Seoul Incheon-Atlanta 777-300ER flights. Korean Air operates flights to 10 US destinations.
When initiated, the Delta-Korean Air JV will be the fourth international JV in which Delta is involved. It launched an antitrust-immunized transborder JV with Aeromexico in May 2017 and is part of two antitrust-immunized transatlantic JVs: one with Air France-KLM and Alitalia and another with Virgin Atlantic.