Thursday, September 20, 2018

Airbus Mobile delivers first biofuel-powered A321 to JetBlue

(Airbus)

Airbus sent JetBlue Airways’ latest A321ceo off on its delivery flight Sept. 19 from Mobile, Alabama, with 15.5% renewable jet fuel onboard, continuing a trend the manufacturer started with its Toulouse delivery flights two years ago.

The JetBlue delivery and four others slated for the rest of the year will help Airbus determine what its next steps are for expanding its biofuel-supply options at Mobile. The manufacturer expects to offer the option to more Mobile customers as well as to align itself with Southeastern US biofuel suppliers in other way.

“It is an opportunity to work closely with local stakeholders to scale-up production and the commercialization of sustainable aviation fuels in the region,” Airbus New Energies head Frederic Eychenne said. “We are actively seeking ideas to leverage Airbus’ strategy into opportunities for new economic development in Alabama.” Air BP supplies Airbus with the biofuel—a hydroprocessed esters and fatty acids (HEFA) fuel based on used cooking oil—for its Mobile operations.

The flight marked the first time a JetBlue aircraft was powered using biofuel, but the airline has grand plans. In 2016, it cut a 10-year deal with biofuels provider SG Preston to supply the carrier with HEFA-based fuel. Deliveries are slated to start next year.

New York-based JetBlue CEO Robin Hayes indicated the carrier’s work with Airbus could expand beyond customer-acceptance and delivery flights.

“Our goal is to serve as a market-maker for renewable jet fuel, creating demand and therefore supporting supply,” Hayes said. “We’re working closely with Airbus to set up infrastructure for more options in the southeast region.”

Airbus’ customer-delivery flights using biofuel were launched based on an idea from Hong Kong flag carrier Cathay Pacific in 2015. The program was up and running a year later and is now available to any Toulouse delivery customer. Airbus plans to expand the biofuel-delivery option to its Hamburg production site soon.


(Sean Broderick - Aviation Week)

Vista Global acquires XOJET

Thomas Flohr’s Vista Global has acquired XOJET, the third largest US business jet charter operator by flight hours.

Vista Global says that the acquisition of XOJET will allow it to expand further in the US. It launched VistaJet in America in September 2013.

“The journey started when I first saw an opportunity in the fragmented and inconsistent offering across the industry. Vista Global’s mission is to provide customer-centric solutions for every segment of business aviation and today’s announcement is a major step in that direction,” said Thomas Flohr, Vista Global founder and chairman. “This acquisition is the perfect addition to our global business. XOJET’s strength in North America and its reputation for offering great value perfectly complement VistaJet and the other businesses in the group.”

XOJET’s largest shareholders were TPG, one of the world’s most-successful aviation investors, and Mubadalla, the sovereign wealth fund of Abu Dhabi. Although TPG was the largest shareholder, Mubadalla financed the fleet and held significant amounts of XOJET debt.

XOJET will continue to operate independently, under a new joint venture company, with control and leadership remaining in US hands to meet airline ownership regulations. The carrier has a fleet of 44 business jets, which includes 27 Cessna Citation Xs.

Corporate Jet Investor understands that 10 companies were originally interested in acquiring the company, with a final round of bidding including three companies. Shareholders first held talks during the 2017 NBAA convention.

“I am incredibly proud to be making today’s announcement which will see our company become part of a fantastic family of brands.” said Bradley Stewart, chairman & CEO, XOJET. “Becoming part of Vista Global will enable XOJET to achieve our dream of becoming a truly global business, providing us with the very best technology and infrastructure. I believe that Vista Global and XOJET are fundamentally aligned in our commitment to serving clients. I am looking forward to working with the Vista Global team and its companies in the future.”

The price has not been announced with the deal expected to close during the third quarter of 2018.

Jefferies was the financial advisor to Vista Global, with Latham & Watkins legal advisors. Perella Weinberg Partners advised XOJET.

ARGUS says that XOJET flew 46,739 flight hours in the first six months of 2018. GAMA Aviation (which operates for itself and for Wheels Up) flew 72,885 hours followed by Executive Jet Management with 58,305 hours.


(Alud Davies - Editor-at-large Corporate Jet Investor)

Monday, September 10, 2018

JetBlue's founder explains why his new airline bought the $300 million Airbus jet that others don't want

(Airbus)

The Airbus A330neo is expected to enter service later this year with launch customer TAP Air Portugal.


Airbus has struggled to find buyers for the next-generation variant of its workhorse A330 airliner.


TAP co-owner and JetBlue founder David Neeleman told Business Insider that the plane's price, performance, and cockpit commonality with other Airbus products sealed the deal for the A330neo.


The Airbus A330-900neo lists for $296.4 million.

The Airbus A330neo is Europe's answer to the Boeing 787 Dreamliner. Like the Dreamliner, it's a ready-made replacement for the aging Boeing 767 and older Airbus models likes the A330ceo and A340. But unlike the Boeing 787, the A330neo has not had the sales success of its US rival with just 224 orders on the books. In comparison, Boeing has taken nearly 1,400 orders for the Dreamliner.

Launched in 2014, the A330neo is a next-generation development of the airframer's long-time workhorse A330ceo wide-body twinjet. However, the A330neo has been beset by delays concerning its Rolls-Royce engines and overshadowed by its flashier carbon composite sibling, the A350XWB.

This fall, the Airbus A330-900neo is finally expected to enter service this fall with launch customer TAP Air Portugal.

So why has Portugal's national airline gone with the A330neo instead of the A350 or Boeing Dreamliner?


(David Slotnick - Business Insider)

According to the TAP's co-owner and serial airline entrepreneur David Neeleman, it came down to the company's familiarity with Airbus, how well the A330neo fit with its route network, and finally price.

"We were already kind of with Airbus so it's harder to make the switch," the JetBlue founder told us in a recent interview.

TAP currently operates an all-Airbus fleet headlined by the A320 family and the A330ceo.

"Airbus is really good at cockpit commonality, so when we go to train a pilot between an A320 and an A330, it's a pretty easy step up," he added.

That effectively put the Boeing Dreamliner out of contention. But what about the A350?

"The A350 is a good airplane, but it's kind of too much airplane for us," Neeleman said. "One of the advantages of the A350 is its range. You can go 16 or 17 hours on and we didn't need that range."

Many of the A350's customers find the plane's nearly 10,000-mile range to be invaluable for ultra-long-haul routes connecting Asia with Europe and North America. However, TAP's route network is designed to connect Portugal with North America and the country's former colonies. For example, TAP's non-stop service between Lisbon, Portugal, and Sao Paulo, Brazil is one of the airline's bread and butter routes. It's also one of its longest routes at just over 10 hours while covering around 5,000 miles. Thus, the A330-900neo's 8,300 miles range will more than suffice.

And then there's the issue of money.

The A330-900neo lists for $296.4 million while the comparable A350-900 costs $21 million per plane.

"We actually had an order for 12 A350s, but we needed more airplanes," Neeleman said.

According to Neeleman, the A330neo boasted all of the fuel-saving features of the A350, including next-generation engines, new avionics, and optimized aerodynamics, but comes at a much lower price.

"It kind of did everything we needed based on the money we had to spend so we ended up going with the A330neo," he said.

In 2015, TAP replaced the A350 order with a deal for 14 A330neos.

The A330neo has netted 224 orders from airlines around the world headlined by Malaysian low-cost carrier AirAsia X as its largest customer with 66 on order. The A330neo's only US airline customer is Delta with 25 orders on the books.

Earlier this year, American Airlines and Hawaiian Airlines both canceled Airbus orders in favor of the Boeing Dreamliner. Hawaiian's defection to the Boeing camp is particularly painful for Airbus because it was the last airline with orders for the smaller variant of the A330neo, the A330-800neo.

According to Hawaiian Airlines CEO Peter Ingram, the A330neo's lack of sale was one of the reasons why the carrier opted to go with the Boeing.

"Unfortunately, the A330-800 has not proved to be as popular in the marketplace," Ingram said in an interview with Business Insider earlier this year. "But for us, it doesn't make sense to remain committed to an airplane that had the risk of not being sufficiently accepted in the marketplace in the future."


(Benjamin Zhang - Business Insider)

Boeing rolls out its first 777X widebody, but it will never fly

(Boeing)

Boeing has built and rolled out its first 777X wide-body from its factory in Everett last week, but it will never actually fly.

Instead, the first of the Chicago-based jet maker's largest and most advanced airplane ever built will undergo 12 months of "static" testing and verification of load-bearing parts in its airframe and wings.

The first test aircraft, featuring wings made by its new automated composite wing center, will be followed by four more 777Xs being produced for full Boeing flight testing.

The sixth jet produced by the line will be used for structures fatigue testing, Boeing Vice President of Global Brand Marketing Jerry Verghes said on his LinkedIn page.

"It's an exciting time for us and for the passengers of our customers — All Nippon Airways, Cathay Pacific, Emirates, Etihad, Lufthansa, Qatar Airways and Singapore — as the world's longest (252 feet) and widest (235 feet) commercial jet airplane comes to life," Verghes wrote.

The 777X was introduced at the Dubai Airshow in 2013. It has since garnered 326 orders.

Boeing said last summer it is on schedule to deliver the first 406-seat 777X in 2020.

Cowen aerospace analyst Cai von Rumohr said in a recent report that Boeing's 777X spending will increase this year and next as it prepares for flight tests and delivery of the aircraft to the first customers.

"777X/777 cash drain will increase in 2019 but should be comfortably outweighed by potential plus swings elsewhere," von Rumohr said, adding that higher revenues should be generated by increased 737 and 787 passenger jet production, in addition to higher 767 Freighter production.

Boeing says the 777X aircraft's windows will be 30 percent larger than those on rival Airbus A350 jets and sit higher on the fuselage.

The 777X will also be the first commercial airplane with touchscreen technology in the cockpit. Folding wingtips will allow it to use wide-body gates at major airports, despite its larger size.

Boeing gave its most devoted aviation enthusiasts a tour of the new 777X aircraft in a video available online.

"The static tests really represent the home stretch of our program," Boeing 777X program test leader Doreen Bingo said in that video.


(Andrew McIntosh - Puget Sound Business Journal)

Saturday, September 8, 2018

Skechers USA Inc. Bombardier Challenger 604 (CL-600-2B16) (c/n 5482) N581TS

Captured on short final to Rwy 30 at Long Beach Airport (LGB/KLGB) on September 6, 2018.
(Photo by Michael Carter)

Tuesday, August 21, 2018

Nearing FAA Nod, G600 Starts Field-performance Tests

With FAA certification trials for ice shapes and stall speed testing now completed, the Gulfstream G600 is now moving on to field-performance testing. FAA certification of the new twinjet is expected by year-end, with deliveries planned to start early next year. In the above photo, G600 (c/n 73001) N600G tbr N601GA is seen during a test flight out of Savannah-Hilton Head International Airport (SAV/KSAV).
(Photo: Gulfstream Aerospace)

The Gulfstream G600 has begun FAA certification field-performance testing as it progresses toward expected approval by the U.S. agency by year-end. Its sibling, the G500, earned FAA type certification and its production certificate on July 20, with customer deliveries slated to begin later this year.

According to Gulfstream Aerospace, the G600 also recently completed FAA certification trials for ice shapes and stall speed testing. Since first flight on Dec. 17, 2016, the five flight-test G600s have accumulated some 2,290 flight hours over more than 600 flights.

“We continue to make steady progress toward certifying the all-new G600 later this year and beginning customer deliveries in 2019,” said Gulfstream president Mark Burns. “With the performance we’re seeing from the five flight-test aircraft in this program, I am confident our clients will be impressed with the aircraft we deliver. The recent type certification for the G500 is added motivation and inspiration for us to bring the G600 across the finish line and into the hands of our customers.”

The G600 will be able to fly 6,500 nm at Mach 0.85 and 5,100 nm at Mach 0.90. Top speed will be Mach 0.92, making it among the fastest civil aircraft currently in production.

(Chad Trautvetter - AINOnline News)

Monday, August 20, 2018

Canada’s Flair Airlines plans 11 US flights

Edmonton-based independent ultra-LCC Flair Airlines stepped up its competition with the Canadian majors’ subsidiary LCCs Aug. 20 by announcing 11 new nonstop transborder US flights for the upcoming winter season.

New nonstop routes out of Flair’s Edmonton International Airport (YEG) hub include Las Vegas McCarran International (LAS), Phoenix/Mesa Gateway Airport (AZA), Palm Springs International (PSP), Orlando International (MCO) and Miami International (MIA). Flair announced it will also fly to Las Vegas, Phoenix/Mesa, Orlando and Miami from Winnipeg International (YWG), along with a new Winnipeg-St. Pete/Clearwater (PIE) pairing. A new Toronto-Miami route was announced as well.

Both of Flair’s new Edmonton flights to Las Vegas and Phoenix/Mesa will compete directly with flights offered by WestJet subsidiary LCC Swoop. Flair’s new Toronto-Miami flight will compete with Air Canada’s rouge LCC subsidiary, though rouge offers 2X-daily service on the route.

Flair’s Edmonton-Las Vegas route is set to launch from Nov. 9, while the remaining flights will roll out starting Dec. 15.

Previously a charter carrier, Flair transitioned to scheduled passenger service in 2017. In June, the carrier doubled its domestic routes from 90 to 188 weekly flights and expanded its reach across Canada with new flights serving Victoria International Airport (YYJ), Calgary International (YYC) and Halifax Stanfield International (YHZ).

While Flair’s primary connecting hub is Edmonton International, the company’s recent domestic route moves brings it into ever more concentrated competition with Air Canada and rouge, as well as Calgary-based WestJet and Swoop.

Winnipeg International is Flair’s second-largest connecting hub, connecting to Edmonton and Calgary but also to Abbotsford International (YXX) and Vancouver International (YVR) in British Columbia.

Earlier in August, Flair announced it will pull out of Hamilton’s John C. Munro International Airport (YHM) in late October to consolidate its southern Ontario flying out of Toronto Pearson International Airport (YYZ). The airline plans to launch new domestic routes between Toronto-Winnipeg and Calgary-Abbotsford for the winter season.

At present Flair’s fleet comprises seven Boeing 737-400s. The airline has said it plans to add two additional aircraft in 2018, both 737-800s, and four more in 2019 as part of its expansion plans.


(Mark Nensel - ATWOnline News)

JAL plans high-density Dreamliners for new long-haul LCC

Japan Airlines (JAL) is looking to significantly increase the seat density of the Boeing 787-8s that are assigned to its newly announced LCC unit and is eyeing markets in Asia, Europe and the Americas.

JAL formally established the new corporate entity Aug. 2 under the interim name TBL Co. Ltd. JAL owns 100% of the company and named Shinto Nishida as representative director responsible for the organization. Its headquarters will be at Tokyo Narita Airport.

Speaking at the Boyd Group International Aviation Forecast Summit in Denver Aug. 20, JAL VP-global sales Steve Smith said the main driver for establishing a long-haul LCC was that forecasts show 50% of the seat market share in Asia will be LCC—and the LCC share will reach 50% even sooner in Europe and North America. “That’s one in every two seats,” Smith noted. “We are a high-yield carrier and we are missing out on a big part of the market.”

The plan is for the JAL LCC to start services in the summer of 2020—the same year Japan will host the summer Olympics—with two 787-8s.

The oneworld carrier has 29 787s in its fleet with one of the industry’s least dense configurations of between 161 and 186 seats, Smith said. For the LCC, JAL is looking at configurations in the 290-300 seat range, he said.



Beyond the LCC startup, JAL is embarked on a strategic plan to increase the number of cities it serves from 343 to 500 and to make non-Japanese sales account for 50% of its revenue. More than 30% of Japan’s population is aged 65 or older and the country’s population is in decline, so it is important to stimulate the overseas market and drive it to Japan, Smith said.

A lot of the city destination growth will be done via JAL’s partner airlines, Smith said. Beyond its long-time business partners such as Dallas/Fort Worth-based American Airlines, British Airways, Finnair and Spain flag carrier Iberia, JAL is working to establish new partnerships with China Eastern and Hawaiian Airlines. If approved, the China Eastern partnership would give JAL 80 more destinations in China, Smith said.

JAL is also investing in new business opportunities. As part of that, it has made a $10 million investment in US entrepreneurial company Boom Technology, which is developing a 55-seat supersonic airliner that Boom says could enter service as early as 2025. JAL’s investment secures it options for 20 aircraft.

“What makes this airplane very interesting to us is it will cut flying time [from the US] to Asia in half,” Smith said. “You will see people willing to spend money because it will save time.”


(Karen Walker - ATWOnline News)

Saturday, August 18, 2018

Gulfstream G-IVSP (c/n 1499) N429CK

Operated by Alpine Global Management LLC, this lovely aircraft is captured departing Long Beach Airport (LGB/KLGB) on August 18, 2018.

(Photos by Michael Carter)

Friday, August 17, 2018

Hawaiian Airlines' Expanded Cargo Operation Finally Takes Off

Hawaiian's ATR-72s will be dedicated to the interisland cargo market.
(Image source: Hawaiian Airlines)

More than three years ago, Hawaiian Airlines announced plans to expand its cargo service between the islands of Hawaii, using a dedicated fleet of ATR-72 turboprop freighters. This new inter-island cargo operation was scheduled to begin in the first half of 2016.

By the end of 2015, the Hawaii-focused airline company had purchased three ATR-72s. Yet two years later, none of those aircraft had gone into service, due to a variety of delays.

Earlier this week, Hawaiian Holdings finally operated its first scheduled ATR-72 cargo flights. As Hawaiian builds out its inter-island cargo operation over the next year or two, its already successful cargo business should continue on its strong growth trajectory.


Hawaiian is starting with successful franchises

In 2010, Hawaiian Airlines' cargo revenue totaled less than $30 million. However, in that year, the carrier started to transition its long-haul fleet to the A330-200, an aircraft with ample cargo capacity. Hawaiian also began to expand rapidly in Asia in late 2010, allowing it to tap into the booming trans-Pacific cargo market.

As a result, cargo revenue surged to more than $70 million by 2014. After stagnating in 2015 and 2016, the cargo business returned to strong growth last year, with revenue rising 26% to nearly $90 million. That accounted for about 3.3% of the company's total revenue.

Hawaiian Airlines also has a dominant position in the inter-island air travel market. Since the late-2017 shutdown of Island Air, Hawaiian has had a near-monopoly within its home state, although it is set to face new competition from Southwest Airlines as soon as 2019.

But despite having a strong cargo business and a dominant inter-island franchise, Hawaiian Airlines is a minor player in the inter-island cargo market today. (The Boeing 717s it uses for flights within Hawaii are great for shuttling people around the islands but have limited cargo capacity.) As of 2016, cargo-only carriers Aloha Air Cargo and Transair together held 56% of the inter-island cargo market, compared to just 6% for Hawaiian Airlines.


Taking the next step

Hawaii's strategic position in the middle of the Pacific Ocean has been a key enabler of Hawaiian Airlines' success in the cargo market. Honolulu is roughly 5,000 miles from New York, Beijing, and Sydney. The U.S. West Coast, Japan, and New Zealand are even closer. Thus, aside from moving goods to and from Hawaii, Hawaiian Airlines has been able to capitalize on shipping demand between these three key regions (the U.S., East Asia, and Oceania).

However, most of Hawaiian's wide-body flights go in and out of Honolulu, which is on the island of Oahu. (This will become increasingly true as Airbus A321neos take over more flights to the outlying islands in the next few months.) Thus, while the carrier can move lots of cargo to, from, and through Honolulu, it has had less ability to get cargo to the other islands.

The ATR-72 freighters will be able to carry up to 18,000 pounds of cargo. Unlike the 717s, they can carry the LD3 containers that Hawaiian uses on its A330 wide-bodies. They can also carry bulky items. In short, dedicated cargo service will allow Hawaiian Holdings to serve a wider swath of the inter-island cargo market and seamlessly transfer shipments from the U.S. mainland and international markets to destinations in Hawaii other than Honolulu (and vice versa).


Starting small and growing from there

For now, Hawaiian Airlines will fly two nightly round-trip all-cargo flights, connecting Honolulu to Hilo (on the Big Island) and Lihue (on Kauai).

Hawaiian plans to expand the inter-island cargo operation next year after putting two more ATR-72 freighters into service, adding flights to Kona (also on the Big Island) and Kahului (on Maui). Depending on demand, it could also consider increasing the frequency of its cargo service on the two initial routes. Looking further ahead, Hawaiian Airlines will likely seek inter-island mail contracts when they next come up for bid.

Cargo will always account for a small proportion of Hawaiian Holdings' revenue. But launching the dedicated inter-island freighter flights should drive meaningful growth and higher profitability in that business, as Hawaiian now has a unique ability to efficiently move cargo to, from, within, and through Hawaii.


(Adam Levine-Weinberg - The Motley Fool)

Boeing taps 777X leader to replace 737 boss in Renton as deliveries slump

Boeing has named a new boss for its 737 manufacturing program in Renton after the plant racked up its lowest delivery tally in five years.

Scott Campbell, vice president and general manager of the 737 program and Renton site leader, will retire at the end of the year after three decades at Boeing Commercial Airplanes.

Campbell will be replaced by Eric Lindblad, who oversees development of Boeing's new 777X wide-body in Everett.

Boeing Commercial Airplanes President and CEO Kevin McAllister told employees that Campbell expressed his wish to retire earlier this year, according to a memo obtained by Bloomberg News.

Earlier this year, Boeing 737 engine and fuselage supplier delays became public as Boeing moved to boost production of its best selling jet, a cash cow for the company.

Boeing announced the moves to its workers in Renton and Everett on Wednesday, spokesman Paul Bergman confirmed.

Lindblad and Campbell will work together for the rest of the year to iron out production problems that have caused unfinished 737s to pile up in Renton and Seattle's Boeing Field as the jetmaker tried to boost production of its best-selling jet.

“Earlier this year Scott came to me expressing his desire to retire and spend more time with his family, and I asked him to stay on for a bit longer,” McAllister said in the memo. “We’re fortunate that he’s agreed to stay through the end of the year, actively engaged to see the 737 recovery plan through.”


(Andrew McIntosh - Puget Sound Business Journal)

Tuesday, August 14, 2018

Southwest Airlines suddenly grounds scores of planes due to aircraft weight issues

Southwest Airlines abruptly grounded 66 Boeing 737 aircraft in its fleet last Wednesday after issues with the carrier’s aircraft weight records were discovered.

In an internal memo to employees on the matter that was obtained by the Chicago Business Journal, Southwest said: “Today (Wednesday) we discovered the weights being sent to our Dispatch Operation did not match our other weight records for a number of aircraft in the fleet. As a result, and out of an abundance of caution, we have stopped flying those aircraft to recalculate the weights of the aircraft in question and reset the program.”

Aircraft weight is important because dispatch personnel and pilots need the correct information to determine the amount of fuel to load and other data needed to safely operate a flight.

The memo on the sudden airplane groundings also informed Southwest employees what to tell customers should they ask what was going on or what might have caused flight delays or cancellations.

The internal memo told employees to respond to customers thusly: “This aircraft is temporarily out of service while we work on its paperwork. The system that calculates and reports the aircraft’s weight is not working properly.”

Asked this morning to comment on why the carrier suddenly had issues with its airplane weight records, Southwest said only that the issue “was corrected overnight, and the aircraft were cleared to operate by Thursday morning.”

The spokesperson also said approximately 30 flights were cancelled and affected customers were re-accommodated.

The spokesperson, however, declined to say whether the airline had experienced this kind of problem previously.

The groundings come just two months after the United States Department of Transportation (DOT) Inspector General's office announced it was launching an investigation into whether Federal Aviation Administration (FAA) inspectors had been too lax in their safety and maintenance-related inspections and oversight at Southwest.

The groundings also come four months after a Southwest flight from New York City to Dallas suffered a detached fan blade and a massive engine explosion mid-flight that resulted in the death of one passenger, the first-ever fatality in the airline's history. The crippled plane was able to land safely in Philadelphia.

In the immediate wake of that fatal accident, Southwest said it would begin an immediate inspection of fan blades on all its Boeing 737 airplane engines “out of an abundance of caution,” the same reasoning given for the aircraft-weight-related plane groundings last week.

The Southwest spokesperson on Monday declined to say whether the decision to ground the planes last week was in any way tied to the DOT Inspector General’s investigation of the relationship between FAA inspectors and the carrier that is now underway.


(Lewis Lazare - Chicago Business Journal) 

Monday, August 13, 2018

Southwest Airlines Hawaii Flights Will Have to Wait Until 2019

Last fall, Southwest Airlines announced plans to begin flying from the West Coast to Hawaii, confirming long-swirling rumors. At the time, the airline didn't release many specifics, other than that ticket sales would begin in 2018 and California would be its main launching point for flights to Hawaii.

Since then, Southwest's Hawaii plans have slowly come into focus. The popular low-cost airline is still on track to begin ticket sales later this year. However, while Southwest had previously hinted that it hoped to operate its first commercial flights to Hawaii by year-end, it now seems virtually certain that its Hawaii flights won't take off until 2019. That will provide a little bit of breathing room for rivals such as Hawaiian.


Southwest has revealed its general plan

Back in April, in conjunction with its first-quarter earnings report, Southwest Airlines announced that it will eventually fly to four destinations in Hawaii: Honolulu, Maui, Kona, and Lihue. These airports cover the state's four major islands.

In early May, Southwest Airlines announced that it plans to use four gateway cities in California for Hawaii flights: Oakland, Sacramento, San Diego, and San Jose. These choices made sense because Southwest is the dominant carrier in those cities. Southwest will compete directly with Hawaiian Airlines and Alaska Airlines in all four. By contrast, the big legacy carriers' flights to Hawaii are concentrated in large-hub markets.

There's still work to be done

As of late April, Southwest's management hoped to begin Hawaii flights by the end of 2018. Chief revenue officer Andrew Watterson is still hoping for at least a token launch by year-end. However, based on an update provided on the company's second quarter earnings call in late July, that target is starting to seem unrealistic.

In response to an analyst question, Southwest Airlines' chief operating officer estimated that the FAA would sign off on the carrier's ETOPS manual -- a set of procedures for operating long overwater flights -- within 30 to 60 days. That means Southwest will probably be allowed to start training its pilots for ETOPS flights next month.

Next, Southwest Airlines will move on to validation flights to Hawaii, after which it would be eligible for a final sign-off from the FAA. Under the current timeline, this is likely to occur in October or November. At that point, Southwest could begin ticket sales.

Southwest Airlines typically begins ticket sales for new routes at least four or five months before the first flight. Given the amount of pent-up demand for Southwest flights to Hawaii, it could potentially compress this lead time to three months or even a little less. But that would still put the first flight in 2019.\


Competitors will get a breather

Earlier this year, Southwest's management disclosed that the carrier is likely to serve just one West Coast-Hawaii city pair initially, but it will ramp up service rapidly thereafter. One possible scenario is that Southwest Airlines will start in January or February with a single route to Hawaii, add additional routes in time for spring break and Easter, and reach a full schedule of Hawaii flights by June, in time for the summer peak season.

If this timeline holds, it means that competitors like Hawaiian Airlines will get a much-needed breather from competitive capacity growth over the next few quarters.

Last quarter, Hawaiian reported a high-single-digit unit revenue decline on its North America routes. Part of this drop was driven by the timing of Easter, but an even bigger headwind came from competitive capacity growth. Industry capacity to Hawaii from the rest of the U.S. increased 13.4% year over year in the first half of 2018.

Fortunately, industry capacity growth is already slowing to high-single-digit territory in the back half of the year. If Southwest Airlines had been ready for a full launch of Hawaii service by the beginning of 2019, industry capacity growth would have re-accelerated quickly. Instead, industry capacity growth is now likely to slow further in the seasonally weaker first quarter, before rebounding as the year progresses.

Another big jump in West Coast-Hawaii capacity during the first quarter -- when it is harder to stimulate demand -- could have led to substantial margin pressure at Hawaiian Airlines. But if most of Southwest Airlines' Hawaii flights begin during the spring and summer, it will be much easier for the market to absorb this new capacity.


(Adam Levine-Weinberg - The Motley Fool)

Wednesday, August 8, 2018

Gulfstream G550 (c/n 5330) N533GV

Captured on short final to Rwy 30 at Long Beach Airport (LGB/KLGB) on August 8, 2018 following a short flight from Bob Hope Airport (BUR/KBUR), Burbank, California.

(Photo by Michael Carter)

Sunday, August 5, 2018

Gulfstream G-V (c/n 619) N619GV

 
Operated by Trans-Exec Air Service Inc, this sporty looking Gulfstream is captured arriving at then departing from Long Beach Airport (LGB/KLGB) on July 13, 2018.

(Photos by Michael Carter)

Gulfstream G550 (c/n 5506) N111

This very plain looking, uninspired liveried aircraft is operated by Third Security LLC and is captured arriving at Long Beach Airport (LGB/KLGB) on August 2, 2018.

(Photos by Michael Carter)

Gulfstream G-V (c/n 681) N624NN

Operated by Solairus Aviation, this lovely G-V is captured arriving at Long Beach Airport (LGB/KLGB) on July 30, 2018.

(Photo by Michael Carter)

USAF McDonnell Douglas F-15E-48-MC (c/n 1139/E114) 89-0492 Strike Eagle, 336th FS "Rocketeers" 4th OG SJ Seymour Johnson AFB

Hits the burners as it performs a high speed pass at the Oshkosh Air Show 2018..........it made the hair on the back of my neck stand-up.......so sweet!!!!!!

(Photo by Michael Carter)

Friday, August 3, 2018

Boeing’s 737 ramp-up shows signs of strain as unfinished planes pile up in Renton

Supply chain problems are causing production delays at Boeing’s Renton assembly plant. Unfinished 737s are parked on much of the available space at the adjacent airport and all around the plant, including along the Lake Washington waterfront.
(Greg Gilbert / The Seattle Times)

After several years of reaching higher and higher 737 production rates, Boeing’s ramp-up in Renton is showing signs of severe strain.

More than 40 unfinished 737 jets are stacked around Boeing’s Renton final assembly plant and along the edges of the Renton Municipal Airport, many missing their engines and others awaiting installation of a variety of parts.

The pile-up of planes comes just two months after Boeing raised the hectic pace of production one more notch from 47 jets per month to an unprecedented 52 per month.

Boeing says it’s driven largely by the lingering effects of previous delays in deliveries of jet engines and fuselages from two major suppliers.

A shortage of highly skilled labor is also a factor as Boeing struggles to build more and more of these planes even as many experienced workers last year retired after taking the voluntary buy-outs the company offered.

Boeing says it has temporarily re-deployed to Renton “several hundred” workers from around its Puget Sound facilities, including many from its KC-46 tanker program in Everett, to assist in clearing the logjam of planes. The company has also been aggressively hiring over the past few months, with many of the new hires pegged for work in Renton.

The 737 is Boeing’s cash cow jet. It brings in about half its commercial airplane revenue and provides the funds for its development of new airplanes. Boeing has successfully transformed production using highly automated manufacturing equipment.

But it’ll have to clear this current drag on the 737 ramp-up before it can increase production even further, a move seen as crucial to delivering the cash flow Boeing has promised.

The company has announced plans to go to 57 jets per month next year, and just last week chief executive Dennis Muilenburg reiterated his belief that 737 demand is creating “upward pressure” to go even higher.

Late engines and fuselages

Since early in the year, LEAP-1B engines for the new 737 MAX model made by CFM International have been arriving weeks late. Likewise, 737 fuselages supplied by Spirit AeroSystems of Wichita. Kan., have been arriving late in Renton.

Yet Boeing has until now insisted that the impact on production has been minor, and has resulted in no late deliveries of airplanes to customers.

However, this may simply be because with fuel prices rising and an excess capacity of aircraft in many markets, many airlines may be content to push out their delivery dates. It’s now apparent in the stacked-up unfinished airplanes that the impact is considerable.

Boeing spokesman Doug Alder conceded in an interview Thursday that the company has had “to be a little creative with parking around the factory” because of unfinished planes.

Alder said the impact of the engine and fuselage delays is now at its peak.

He said that when a fuselage is late, it affects the entire production system, which pulses forward on a moving line, currently set for building 52 jets per month. That means some jobs may be postponed and in the end a plane leaves the assembly line with some of the required work unfinished.

Alder said that with the extra manpower deployed, “by the end of the year, we’ll be back on our plan.”

According to one Boeing Renton worker, it’s not just the engines and fuselage — other more mundane parts are also arriving weeks late.

“Vendors can’t keep up with the new production rate,” said the worker, who cannot be identified because he spoke without company permission. “They are behind in deliveries. A wide range of parts, from electronics modules to flight deck interior pieces, are SOS – Stores Out of Stock.”

Alder said any other such parts shortages are not outside the norm and are not responsible for the build-up of unfinished jets.

“It’s the cumulative effect of the engine and fuselage delays that’s causing this peak,” he said. “The other things we work on a daily basis.”

“The main driver (of the unfinished work) continues to be Spirit and CFM, and they continue to track toward their recovery plan,” he added.

On Wednesday, Spirit AeroSystems CEO Tom Gentile said on the company’s quarterly earnings teleconference that although 737 fuselage deliveries have picked up, “we’re still not getting consistently everyday fuselages out.” He said this will be fixed in the second half of the year, and said he’s very confident Spirit will fully meet its delivery requirements by year end.

At a briefing at the Farnborough Air Show last month, top CFM executives said they are only “a few weeks” behind schedule in deliveries to Boeing and catching up.

Jet logjam

Teams of mechanics are busy on many of the jets parked out on the airport ramps. Rather than pulling them back into the factory for completion, the Renton worker said they are “out on the field trying to clean up the behind-schedule jobs and get those planes in shape” for delivery.

The planes are stationed not only on the normal parking aprons around the Renton airport but also on the pier along the southern edge of Lake Washington, and are even parked in spaces between the main buildings on the Renton site.

The Renton worker said Boeing has done a study to see if it’s feasible to temporarily convert a Boeing employee parking lot north of the Renton School District stadium into a parking spot for more airplanes. It’s unclear if that will go forward.

This week, the pile-up of airplanes spilled onto the Renton airport taxiway that runs parallel to the runway, closing the taxiway for almost half its length. Because of the taxiway closure, the airport authorities notified pilots they should seek two hours’ prior permission before landing a large jet on the runway.

On Wednesday, 25 airplanes were parked around the edges of the public airport, nine of them missing their engines, with heavy blocks hanging from the wings in their place.

In a further sign of their incomplete state, almost all were not yet painted in the livery of the airlines that have bought them. Nevertheless most could still be identified by the tail rudders, which are painted during the assembly process.

The planes without engines were all the new model 737 MAX, which are powered by CFM’s new LEAP-1B engines. These included 737 MAXs for American Airlines, China Southern, Lion Air and Southwest Airlines.

An engine-less Turkish Airlines 737 MAX was parked on Taxiway B. By Wednesday night, another plane had joined it on that taxiway.

According to workers, 17 or 18 more 737s are tucked into every available space around the assembly plant.

“Now that whole front of the lake is full of planes, over to the bridge on the north end of the runway, and between the buildings,” the Renton worker said. “They are literally all over.”

He said Boeing has also put engines on some planes, flown them to Boeing Field in Seattle just to get them parked out of the way, then taken the engines off and returned those to Renton. As new engines are available, those planes will be delivered to airlines from Seattle.

Two workers said that a lack of experienced workers is exacerbating the problem. One said that though Boeing is hiring new people, the new hires need to be trained — and “most of the trainers are out on the field trying to catch up.”

Many among Boeing’s older blue-collar workforce took “voluntary lay-off” packages to retire early last year.

“It’s a combination of everything,” the Renton worker said. “The lay-offs, the production ramp up, the inexperience. It’s the perfect storm. It’s happening right now and it’s getting worse.”


(Dominic Gates - The Seattle Times)

Thursday, August 2, 2018

Southwest Airlines Boeing 737-7H4(WL) (30605/748) N794SW


Taxies to then departs from Rwy 1L at General Mitchell International Airport
Milwaukee, Wisconsin on July 22, 2018.
 
(Photos by Michael Carter)