A Chinese-developed passenger plane has been certified by the country's aviation regulator, clearing the way for the ARJ21 regional jet to fly domestic routes, the manufacturer and state media said.
The Civil Aviation Administration of China (CAAC) on Tuesday officially deemed the ARJ21 airworthy, the official Xinhua news agency reported.
A spokesman for Shanghai-based Commercial Aircraft Corp. of China (COMAC), the plane's builder, confirmed to AFP that the final domestic regulatory hurdle had been cleared.
But the ARJ21 still lacks crucial approval from the US Federal Aviation Administration (FAA).
Potential sales and use of the ARJ21 outside China depend "on the CAAC and other countries' level of recognition of its certification", the spokesman said.
FAA certification would enable the plane to fly in US skies and assure passengers of its safety.
Without it, the 78-90 seat plane will face a more limited market, industry officials say.
"There must be a period for improving the model's design, systems and operations before its entry into the market," COMAC vice president Luo Ronghuai was quoted as saying by Xinhua.
The first ARJ21 jet was designed and built between 2003 and 2007 with the inaugural flight in November, 2008, according to state media.
But deliveries to customers are years behind schedule, with an original deadline of 2009.
Even so, the plane already has 278 orders after COMAC announced a 20-plane purchase on the sidelines of China's premier Zhuhai airshow last month.
The manufacturer will begin small-scale production of the ARJ21 next year, Shanghai television reported.
China has bigger ambitions than a regional jet. COMAC has just started assembling the C919, a 158-168 seat narrow-body jet that would compete with Boeing's 737 and the A320 of European consortium Airbus.
The Chinese company is also developing a wide-body passenger plane -- tentatively called the C929 -- in cooperation with Russia's United Aircraft Corp.
Eva Air Cargo MD-11F (48787/631) B-16111 is captured at Victorville (VCV) California on November 8, 2014 in a very sad state. The aircraft was originally delivered to the carrier on November 12, 1998. It is very sad to see a 16 year old aircraft already being scrapped especially a gorgeous McDonnell Douglas (DAC) heavy!
Following a plea for help from Russia’s second largest carrier, the Russian government has pledged to support financially beleaguered Transaero Airlines.
According to the TASS news agency, Russian prime minister Dmitry Medvedev on Christmas Day signed a government resolution guaranteeing a three-year RUB9 billion ($166 million) loan to be provided by VTB Bank, which is 60.9% owned by the Russian government.
In return, Transaero has agreed to freeze domestic fares in 2015, and reduce fares by 5%-7% on domestic routes served exclusively by Transaero.
The Russian Ministry of Transport will be responsible for administering the loan, which will be used exclusively to finance the airline’s operating activities. According to the government, the loan guarantee will entail no extra burden on the federal budget until after January 2017 when Transaero’s guarantee-secured liabilities are due to mature.
Just before Christmas, Transaero CEO Olga Pleshakova denied reports that the airline might have to suspend operations before the end of the year because of what the company described as “drastically changing macroeconomic conditions.”
In November 2014, Transaero began to implement “a comprehensive set of measures aimed at enhancing its operational efficiency in the rapidly changing current business environment,” it said in a statement. Key measures are expected to be implemented within three to six months.
Transaero said in 2015 it would “continue to focus on enhancing the reliability and accessibility of air transport for Russian residents,” with particular emphasis on routes serving the Southern resorts within the Russian Federation and Russia’s Far East from Moscow and St. Petersburg.
Transaero was launched in 1991 and last year carried 12.5 million passengers with a fleet of 103 predominantly Boeing aircraft.
Russia’s third largest carrier, UTair, is also seeking a government bailout, after running up debts reportedly worth RUB13 billion. A 40% cut in fleet size is among restructuring measures aimed at slashing costs and bringing the airline back to breakeven in 2015.
An unidentified customer has signed a firm order for 24 Bombardier CRJ900 NextGen aircraft, the Canadian manufacturer said.
Based on list prices, the order is valued at $1.14 billion. Bombardier Commercial Aircraft SVP-sales, marketing and asset management Ray Jones said in a statement, “With the most recent enhancements to the aircraft, we are constantly moving that benchmark forward, reducing the CRJ900 NextGen airliner’s fuel burn by up to 5.5% compared to earlier-generation CRJ900 aircraft, and making it the ideal tool for operators looking at further increasing the efficiency of their fleets.”
The order brings Bombardier’s total firm orders for CRJs to 1,858, including 384 CRJ900s.
The Japan civil aviation authority (JCAB) has released a new report calling for Boeing to redesign the lithium ion batteries aboard the 787 that are responsible for three cell venting events since January 2013. Airlines should “adopt the design changes which will be prepared by Boeing and implement them as soon as possible”, says the JCAB report, dated 19 December.
The JCAB called for the battery redesign despite determining that two of the three protective layers from a May 2013 battery redesign worked as intended, and the safety of the aircraft was never at risk during the incident on 14 January 2014.
However, public concerns may still linger about the two cell venting incidents the year before that triggered a four-month grounding of the 787 fleet, an English translation of the JCAB report says.
“It is considered that, for keeping peace of mind for the passengers and the public people [sic] on the safety of B787 fleet, further improvements of the reliability for cells and battery system are necessary,” the report says.
The JCAB wants Boeing to assess all of the potential causes identified in three 787s and then “accelerate” making possible design changes, followed by an “early” certification process.
The JCAB’s call for a second battery redesign goes beyond the recommendations from two previous investigations about the 2013 battery incidents by the Japan Transportation Safety Board (JTSB) and the US National Transportation Safety Board (NTSB).
The report also pushes for more action than Boeing has so far acknowledged is necessary.
“We remain confident in the comprehensive improvements made to the 787 battery system and in the overall performance of the battery system and the safety of the airplane,” Boeing says in an emailed reply to questions. “We continue to work reliability improvements on the 787 and will do so throughout the span of the program.”
The 787 is designed with two lithium ion batteries made by Japan-based GS Yuasa. One battery in the aft electronic equipment (E/E) bay supplies power to start the auxiliary power unit. The other battery is located in the forward E/E bay and supports the avionics systems in case all six onboard power generators fail. Both batteries are composed of eight cells that deliver 32V nominally.
Despite having similar functions, the Boeing design contrasts significantly with the lithium ion batteries installed in the Airbus A350-900. The Airbus supplier, Saft, designed a system with four batteries, each composed of 14 cells delivering 25V nominally combined. Thus, the A350-900 uses more batteries, with less power demanded from each cell than the 787 system.
All three major investigations into the 787 battery failures have deduced that an internal short circuit occurred within a cell, but have not been able to isolate the cause of the short circuit. The reports have suggested several possible causes, including cold soaking, the formation of dendrites and manufacturing errors.
The first two battery failures on the 787 posed serious safety concerns. In both incidents, a single overheating cell vented, causing adjacent cells in the tightly packed battery box to fail and partly melting the aluminum enclosure.
In response, Boeing redesigned how the batteries were installed. More spacing and thermal shielding was added between each cell. The eight-cell pack was enclosed in a stainless steel case. If one or more cells overheated anyway, new ducts would vent the heat and smoke directly off board.
According to the JCAB, two of the three layers of protection – preventing a thermal runaway within the battery and damage to the rest of the aircraft – worked as Boeing intended. But the third cell venting incident showed that the first layer of protection – preventing a cell from overheating in the first place – failed, the JCAB report says.
Boeing on December 28th completed a 3h, 32min flight of the 767-2C prototype that will be modified to become the first US Air Force KC-46A tanker. The first take-off of the 767-2C – powered with Pratt & Whitney PW4062 engines – from Boeing’s widebody final assembly center in Everett, Washington, comes nearly three months behind schedule, as the contractor announced a $272 million forward loss on the programme in July due to problems installing the wiring harnesses.
It also occurs weeks ahead of a pending competition between the KC-46 and the Airbus A330 MRTT for a South Korean tender for four new tankers.
Boeing’s fixed-price, $4.4 billion development contract with the USAF leaves little room for further delays.
Within the next 32 months, Boeing is required to complete airworthiness certification of the commercial 767-2C, military certification of the KC-46A’s refuelling systems and delivery of the first 18 operational aircraft.
Although the USAF awarded Boeing a $4.4 billion contract in 2011, the deal allows the contractor to recoup another $500 million in additional expenses. Boeing has already absorbed the overrun and reported the $272 million forward loss.
The 767-2C is a new commercial derivative that combines the fuselage of the 767-200ER, wings from the 767-300, the stabilisers of the 767-400ER. and the cockpit displays from the 787. Boeing is offering the aircraft for sale to commercial operators, but so far has received no orders.
The commercial aircraft will be converted into a military tanker and transport. Military systems include a fly-by-wire refuelling boom modeled on the McDonnell Douglas KC-10 boom design, a remote aerial refuelling operator station, wing aerial refuelling pods and military electronics.
The development contract calls for Boeing to build four developmental prototypes. The first and third aircraft to come off the assembly line will be 767-2Cs, which will be used to obtain certification by the US Federal Aviation Administration. The second and fourth aircraft in assembly will be delivered as KC-46As.
The debut flight of the first KC-46A was originally scheduled in January, but is now planned for April 2015.
The USAF plans to buy as many as 179 KC-46As to replace an ageing fleet of Boeing KC-135s, which are similar to – albeit slightly narrower than – the four-engined Boeing 707 transport.
David Williams, right, piloted the fault Virgin Atlantic 747 safely back to the ground (Photo Enterprise)
The hero pilot who saved hundreds of lives by landing a stricken Virgin jumbo jet has dismissed his bravery and insisted he was just doing his job.
Humble father-of three David Williams, 47, accepted he carried out an extraordinary emergency landing but only did what any other pilot would have done.
But friends and neighbors said he was a hero and were proud of his actions.
Mr. Williams calmly brought the Boeing 747 plane to the ground at Gatwick airport on Monday after its landing gear failed.
The Las Vegas-bound jet, packed with more than 450 passengers and crew, had to turn back shortly after take-off after the fault was detected. Dramatic photographs showed the jumbo jet with the right-side wing landing gear not deployed despite frantic attempts to release the mechanism.
Speaking for the first time, Mr. Williams said: “All of our pilots at Virgin Atlantic are trained to the highest standards and we go through regular testing to deal with any scenario that may arise. “Clearly this was an out of the ordinary landing but I was just doing my job and any one of our pilots would have taken the same actions. “I’m really proud of my colleagues on the ground and in the air and the support they gave me during this event – everyone worked really hard in a difficult situation.” Most of the passengers from the plane flew out to the US on Tuesday morning. Mr. Williams, whose 12-year-old daughter was on board at the time of the incident, added: “We are delighted that our customers were able to travel to Las Vegas the next day for their New Year’s Eve celebrations. “I am keen to spend some private time with my family over the New Year.” Virgin Atlantic chief executive Craig Kreeger met with Mr. Williams and the rest of the on board staff to thank them for their heroics. A former pupil of Shebbear College in Devon, Mr. Williams has flying experience going back at least 20 years. He is listed on his Linkedin page as a Captain of 747-400 for Virgin Atlantic and previously flew for Monarch Airlines between 1994 and 1998. Mr. Williams was not at home in the picturesque village of Loxwood, West Susses, where he lives with his wife and three children.
But proud neighbours said he was a reluctant hero would hate all the fuss surrounding him. Jean Lightman, said: "He was a hero but he probably thinks he was just doing his job - he is that kind of man. He is definitely a cool and calm individual.
"He is quite a quiet and unassuming man, he would not want a big fuss." Friend Simon Bates said he was a “typical pilot, calm and considered”.
Francis Jennings, who is married to Mr. Williams' sister-in-law, said the hero pilot just wanted to be left in peace.
All the passengers aboard the Virgin jet praised Mr. Williams for keeping them calm and making the "textbook" landing as smooth as possible.
Virgin Atlantic chief executive Craig Kreeger met with the pilot and the rest of the on board staff to thanks them for their heroics.
Sir Richard Branson hailed the crew for masterminding a “safe and skilful landing”. A former pupil of Shebbear College in Devon, he has flying experience going back at least 20 years. He is listed on his Linkedin page as a Captain of 747-400 for Virgin Atlantic and previously flew for Monarch Airlines between 1994 and 1998.
A keen cyclist Mr Williams has raised more than £3,000 for charities, including the University of Liverpool Pancreatic Cancer Research Fund and the Down’s Syndrome Association.
Sponsored bike rides included from Lands End to John O’Groats and from Boston to New York.
Southwest Airlines 737-8H4 (29882/4007) N8600F rolls for take-off on Rwy 19R at John Wayne Orange County Airport (SNA/KSNA) on September 7, 2013.
(Photo by Michael Carter)
The final AirTran Airways-branded flight operated from Hartsfield-Jackson Atlanta International Airport to Tampa Bay International Airport Sunday, formally completing the 2011 Southwest Airlines-AirTran merger.
Southwest acquired Orlando-based AirTran for $1.4 billion in cash and Southwest common stock in 2011 in a deal that brought together the world's largest low-cost carrier (LCC) with the third largest LCC in North America.
AirTran was only about 25% of Southwest’s size, but had strengths at airports where Southwest had little-to-no presence and also enabled Southwest to venture into international flying for the first time.
“The acquisition of AirTran was a unique opportunity to extend the Southwest network into key markets it didn’t yet serve, such as Atlanta and the greater Washington DC area via Ronald Reagan National Airport,” Southwest said in a statement Monday.
AirTran 737-76N (32664/1804) N276AT prepares to depart Milwaukee General Mitchell International Airport (MKE/KMKE) on August 1, 2010.
(Photo by Michael Carter)
Southwest president, chairman and CEO Gary Kelly told The Wings Club in New York earlier this month that Southwest’s decision to slowly rebrand AirTran flights as Southwest flights was critical to the merger being “a tremendous success” with no major integration or operational problems. “We didn’t do a hard cutover,” he explained. “We did it gradually over a two- to three-year time period.”
The last 18 AirTran Boeing 737s will be temporarily taken out of service to be converted into Southwest aircraft in early 2015, according to Kelly. Southwest is close to finishing the process of transferring 88 AirTran 717s to Delta Air Lines.
This was the year in which airline passengers learned where they really stood with the big carriers they've been loyal to over the years.
Beginning Jan. 1, Delta Air Lines will start handing out frequent-flier miles based not on distance traveled, which is how it's been up to now, but on dollars spent.
Travelers who spend more on tickets — that is, well-heeled types who can afford first-class and business seats — will get more miles than people who fly coach.
United Airlines will make the same change March 1. American Airlines says it will compete by offering bonus miles to its biggest spenders.
Changes in airline frequent-flier programs are typical of trends in company rewards plans in all consumer-oriented industries, experts say. Once-generous terms intended to reward rank-and-file customers increasingly have become obstacle courses of fine print and exclusions.
"I don't think companies are consciously trying to turn people off," he said. "But they're making things more difficult so they can focus primarily on the people they're really after."
And those people, of course, are the ones with the deepest pockets.
To be sure, loyalty programs always have been intended to foster long-term relationships with the best customers. Casinos, for example, won't comp rooms for just anyone. They're targeting the whales that place the biggest bets.
But the trend is clear: Programs that in the past were more inclusive of all types of customers are evolving into programs that are exclusive in nature, lavishing rewards on the wealthy and offering whatever's left to others.
West Los Angeles resident Ingeborg Quaglino, 75, estimates she and her husband have been members of United's MileagePlus program for about 30 years. They try to use their miles every few years to travel to Europe.
Quaglino told me she tried recently to book business-class seats for a trip next September to London, Paris and Zurich, Switzerland, to see friends and family. She hoped to use the MileagePlus Saver Award program, which provides discounted seats but limits their availability.
Under the program, business seats would run about 115,000 miles each, or nearly 40% of the typical cost.
"I believed that by booking so far in advance, it wouldn't be difficult to get the Saver rate," Quaglino said.
United had other ideas. "They told me that if I wanted to spend 300,000 miles for each seat, I could book them right away," Quaglino recalled. "But if I wanted the Saver rate, I'd have to call back.
"She asked United if she could book Saver seats in coach for the September trip and then upgrade to business later. No, the airline replied. Once you're in coach with Saver tickets, you can't make any changes.
"It seemed very unfair," Quaglino said. "We've been MileagePlus members for such a long time. It's such a shame they don't make this easier."Rahsaan Johnson, a United spokesman, said no offense is intended to long-term customers such as the Quaglinos.
He said United tries to make Saver seats available to as many MileagePlus members as it can. But it's not always possible to accommodate everyone's travel plans."When we reach the point when we think they'll sell best, we'll make them available," he said of business-class Saver seats.
I asked him when that point usually is and, along the same lines, how many seats are typically set aside for MileagePlus members. Johnson declined to say.
"I'm not going to give you the secret sauce," he said. "That's competitive information."
His advice to the Quaglinos: Keep calling back, maybe even once a day, and hope for the best.
Chris Elliott, a consumer advocate who focuses on travel issues, said he wasn't surprised that an airline loyalty program was giving some members the cold shoulder.
"These programs are no longer meant to reward loyal customers," he said. "They're meant to reward shareholders.
"Calling them loyalty programs is a misnomer," Elliott said. "You're giving the airline your loyalty and they're not reciprocating, unless it's convenient."
Beginning in March, United will award coach passengers five points for every dollar spent. Those spending more for first-class and business seats will get anywhere from seven to 11 points per dollar spent. Delta's program will operate pretty much the same.
American still will hand out miles for distance traveled. But it also will award bonus miles for passengers traveling in first or business class.
Barry Berman, a marketing professor at Hofstra University, said many businesses are becoming pickier about who gets rewards.
"They look at you and decide whether you're a key customer or a peripheral customer," he said.
Key customers, needless to say, are the ones who represent fat stacks of profits. Peripheral customers are probably you and me.
It's completely understandable why a company would want to prioritize in this way. It would be irresponsible not to pamper your best customers to the best of your ability.
The danger with shunting some customers to the periphery, however, is that sooner or later they're going to feel unwanted or that their long-term business isn't appreciated.
The Quaglinos are feeling this way about United. They said they won't necessarily be turning to the "Friendly Skies" carrier when they travel in the future.
"You don't want to be seen as offering rewards only grudgingly," said Oleg Urminsky, an associate professor of marketing at the University of Chicago's Booth School of Business. Or maybe you do. Maybe the airlines are on to something.
By so blatantly favoring their wealthier customers and so obviously offering table scraps to everyone else, the airlines have made clear where different people stand in the pecking order.
The Quaglinos now have a better idea of what they can expect from United, and how much, or little, their repeat business is welcome. Their loyalty to the airline, they understand, will get them only so far.
If United's goal was to communicate such disdain to long-term customers, the company has succeeded.
Sometime on Christmas morning, a computer system at Etihad Airways began to issue tickets at ridiculously low fares, including $187 from New York to Abu Dhabi and $277 from New York to Johannesburg.
Very quickly thereafter, various websites and bloggers began to publicize the mistake. A Forbes story on Saturday said thousands of tickets were issued after airfare monitoring sites including TheFlightDeal, FlyerTalk and SlickDeals shared the news, as did various bloggers who write about frequent flier points and airfares.
Etihad eventually recognized the error and dropped the fares around midday Eastern Time.
The U.S. Department of Transportation requires airlines to honor all tickets it issues, even if a mistake caused tickets to be issued at a low price.
But the DOT is reconsidering that requirement because of the existence of all the websites and bloggers who, in the words of travel writer Joe Brancatelli, “live and die for this stuff.” If an airline makes a mistake, it can become known extremely rapidly to tens of thousands of people.
The department’s ongoing review makes no difference to Etihad’s decision to honor the tickets, the carrier said. “We did it because it is the right thing,” said Etihad spokeswoman Katie Connell. “We would have done it either way.” Etihad has not disclosed the number of mistaken-fare tickets it issued.
Brancatelli said the DOT “doesn’t want to be protecting the gamers.
“A sub-industry has popped up, and now an airline that files a mistaken fare could be at risk for thousands of tickets because people move so fast,” Brancatelli said.
“The DOT has said that it never meant the regulation to handcuff an airline when it was obviously a mistaken fare,” he said. “Now the DOT is threading the needle, trying to figure out when they should allow airlines not to honor mistaken fares.”
DOT regulations generally “prohibit sellers of scheduled air transportation from increasing the price of a ticket once it has been purchased,” a DOT spokeswoman said. “A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer.
“Therefore, if a consumer purchases a fare and receives a confirmation (such as a confirmation email and/or the purchase appears on a credit card statement or online account summary) of his or her purchase, then the seller of the air transportation cannot increase the price, even when the fare is a ‘mistake,’” the spokeswoman said.
However, last May, the department “issued a notice of proposed rulemaking that, among other things, solicits comment on how to best address the problem of individuals, some of whom are very well-informed and sophisticated with respect to air travel, who opportunistically purchase very cheap tickets knowing that the fares are likely the product of a computer programming or other error,” the spokeswoman said.
The DOT still wants to ensure “that airlines and other sellers of air transportation are required to honor mistaken fares that were reasonably relied upon by consumers,” she said.
The comment period on the proposed rulemaking ended in September, and the agency is now considering what its next step might be.
The agency’s prohibition against post-purchase price increases applies only to itineraries that begin or end in the U.S. or include a stopover of 24 hours or more in the U.S.
One passenger had the unfortunate experience of purchasing her ticket to Abu Dhabi through Expedia only to learn that it was not honored by Etihad.
Around 12:30 p.m. on Christmas day, Nana Opong-Owusu, a clinical research associate who lives in Atlanta, paid $227 each to purchase three tickets to fly JFK-Abu Dhabi on Etihad in October. She received confirmation itineraries from Expedia at 12:42 p.m. Later that afternoon, however, Expedia contacted her to say that it would void the ticket because Etihad would not honor the fare. On Tuesday afternoon, Expedia called Opong-Owusu, in response to her inquires, to say “that although I purchased the ticket at a specific fare, when they tried to book the ticket, Etihad refused to honor it at $227 because they had then ‘corrected’ the glitch and the fare was then posted as $900+,” she said.
Subsequently, Etihad emailed Opong-Owusu and said it would review her case. She noted that the tickets of some friends, who purchased after she did, are being honored.
A South Korean court on Tuesday approved the arrest of a former Korean Air Lines Co. executive who delayed a flight over a bag of macadamia nuts.
Cho Hyun-ah, the daughter of the airline's chairman, has faced mounting public anger because she forced the flight to return to its gate in New York to remove a senior flight attendant. She was angry that the nuts were served in a bag, not on a plate, in an incident that has been dubbed "nut rage."
Prosecutors have yet to press criminal charges against Cho, but South Korean law allows authorities to arrest a suspect for up to six months over worries the person could flee or destroy evidence. Seoul Western District Court said such concerns were warranted.
A separate arrest warrant for a current Korean Air executive, whose surname is Yeo, was also granted. Yeo is suspected of pressuring Korean Air employees to conceal the incident.
The court said there were "systematic attempts to cover up" Cho's actions "since the beginning of the incident."
The Seoul Western Prosecutors' Office has said Cho would face several charges, including inflight violence and changing a flight route, which is prohibited under aviation law.
Cho, 40, resigned earlier this month as vice president at Korean Air and from all her roles at the airline's affiliates.
A passenger on the Dec. 5 flight told local media that Cho assaulted and threatened crew members. Park Chang-jin, the senior flight attendant who was kicked off, told the KBS television network that he was insulted and had to kneel before her because he didn't dare to challenge the chairman's daughter.
Her behavior touched a nerve with South Koreans who are frustrated with family members who control mighty business groups known as chaebol that dominate Asia's fourth-largest economy.
Cho and her two siblings quickly became executives at the airline and its affiliates. The family's direct stake in Korean Air is just 10 percent but cross-shareholdings among Hanjin companies give it effective control.
South Korea's transport ministry has also faced criticism because ministry investigators probing the incident were said to be too cozy with company executives who tried to protect Cho. Most of the ministry's investigators formerly worked at the airline, South Korea's largest, raising questions about their fairness.
Earlier this week, the ministry said it decided to punish four of its officials for misconduct during the investigation. One official was arrested last week for leaking information about the probe to Yeo, the Korean Air executive, in several telephone conversations and text messages.
Many things worked out for Southwest in 2014, making the year arguably one of the best in its entire history. The carrier launched international service, came out of Wright Amendment restrictions, and won rights to expand at the high value Washington Reagan and New York LaGuardia airports during the year.
Each of these developments would have been sufficient individually to drive healthy growth in Southwest’s 2014 profit, but these three major developments occurred together, making 2014 a special year for Southwest. Apart from these major developments, Southwest launched a new aircraft livery, named Heart, and continued to modernize its fleet with new 737-800s in 2014.
Gains from all these business developments have allowed the low-cost carrier to grow its revenue by 5% annually and nearly double its profit to $946 million in the first three quarters of 2014.Based on traffic reports for the months of October and November, we figure Southwest is set to post strong results in the fourth quarter as well. Here we review the year 2014 for Southwest, and analyze the impact of these major developments on the carrier’s future.
Acquisition of Slots At High Value Airports Has Provided A Solid Growth Window
In early 2014, Southwest acquired 27 of the 52 slot pairs (take-off and landing timings) vacated by American Airlines-US Airways at the Washington Reagan National airport. American and US Airways had to vacate these slots under their merger agreement with the Justice Department.
Southwest also won 6 out of the 17 slot pairs that were up for bids at New York’s LaGuardia airport. For many years, Southwest’s capacity expansion at these high value airports was restricted as slots were note readily available, but with these slot wins, the carrier has been able to significantly ramp up its flying capacity at these airports.
This capacity expansion has played a key role in growing Southwest’s results in the first three quarters of 2014, and we figure the high value nature of the Washington and New York markets has also enabled Southwest to grow its average air fare, yield and margin.
Looking ahead, slot wins at Washington Reagan and New York LaGuardia will allow Southwest to expand its capacity by 2% in 2015.
Expiry Of Wright Amendment Has Unshackled Growth Potential At Dallas Love Field Separately, on October 13, the Wright Amendment expired, enabling Southwest to fly nonstop to a greater number of destinations from its home airport, Dallas Love Field. This amendment had been in place for many decades and was originally introduced to make the nearby Dallas Fort Worth International Airport commercially viable.
Everyone knew of the coming expiry of the Wright Amendment, but the key question was how well Southwest would be able to utilize this growth opportunity. In the more than two months since the expiry of the Wright Amendment, Southwest has launched nonstop flights to about a dozen U.S. cities, and it has has seen occupancy rates (percentage of seats occupied by passengers in a flight) of over 90% on these new flights. Typically, it takes many weeks, if not months, for occupancy rates for an airline to reach even around 75-80% on new routes. However, as Southwest is well established in the Dallas market, these new flights from the carrier found many takers. Thus, the expiry of the Wright Amendment has unshackled Southwest’s growth potential at Dallas Love Field.
In the coming year, this growth opportunity out of Dallas Love Field will allow Southwest to expand its capacity by 3%, playing a key role in its overall growth.
International Flying Provides Long Term Growth Potential Southwest also began flying outside of the continental U.S. in 2014, taking over routes that were previously served by AirTran. Southwest’s entry to these international routes has brought the carrier’s iconic "Bags Fly Free" service and other policies such as zero ticket change fees to these routes.
Southwest has always maintained that the additional passenger traffic that it generates from these policies more than compensates for the loss in revenue from baggage and ticket change fees. In our view, as low fares, zero baggage fee and no change fees enabled Southwest to rapidly expand in the domestic market, these policies should help the carrier grow in the international market as well.
International flying could also drive long term growth at Southwest. In 2015, international flying will add 1% growth in Southwest’s capacity.
Together, the acquisition of slots, expiry of the Wright Amendment and international flying will allow Southwest to expand its capacity by 6% in 2015. This aggressive capacity expansion will in turn lift the carrier’s passenger traffic and revenue.
Apart from these three major business developments, Southwest made significant progress in integrating AirTran in 2014. The carrier expects that the integration will be complete by year end.
The company also launched a new look, consisting of a new logo, new aircraft livery and a fresh airport experience in 2014. After an eventful 2014, Southwest is looking to drive its results higher in 2015, and the carrier looks well positioned to do so.
Azerbaijani cargo airline Silk Way Cargo and the U.S. Company Boeing have signed an agreement on purchase of three new Boeing 747-8 aircraft in 2015-2016, Spokesperson of Azerbaijan Airlines (AZAL) Maharram Safarli told Trend.
The agreement was signed in Baku on December 24.
Silk Way West Airlines, the all-cargo national carrier of Azerbaijan, offers scheduled flights to destinations across Europe, the Middle East, and Asia. Its fleet consist of 3 Boeing 747-400F and 2 Boeing B767-300F.
As a regional and CIS leader in terms of the number of new aircrafts, AZAL offers its passenger flights to European countries, the CIS, Middle East, Asia and the United States.
Currently, AZAL's fleet consists of Boeing 757-200, Boeing 767-300, Airbus 319, Airbus A320, Airbus A340-500, Embraer ERJ 170-100LR and Embraer ERJ 190-100.
The company cooperates with about 60 airlines to provide its passengers with an opportunity to travel leisurely around the world.
Qatar Airways’ first Airbus A350-900 has finally arrived at its home base – a week or so later than originally planned – after departing Toulouse in the company of the airline’s fourth A380.
The 23 December ferry flight from Toulouse was originally scheduled on 13 December, but was postponed after a last-minute hitch during the airline’s acceptance process in Toulouse.
It was not the first time that Qatar’s outspoken boss Akbar Al Baker has forced Airbus delivery ceremony arrangements to be postponed. The planned simultaneous handover of the airline’s first three A380s was delayed from June to September after issues during acceptance.
“My friend Akbar, you are a tough customer. You are very demanding and sometimes perhaps a little bit demanding,” joked Airbus chief executive Fabrice Bregier at the 22 December ceremony in Toulouse. “But first of all you were one of the architects of the new A350 XWB. So without these demands, we would not have the best aircraft in this category.”
Al Baker was quick to play down the delay, saying that the hold-up had nothing to do with Airbus.
“Until two days ago, we were having a lot of arguments that Qatar Airways’ quality requirements had nothing to do with Airbus, and [A350 programme chief] Didier Evrard was trying to convince me that it was my BFE [buyer-furnished equipment] suppliers that were to blame,” he said.
“We had small issues with our BFE suppliers which were resolved by them. The delay was nothing to do with Airbus.”
Al Baker emphasised that despite the slip, the airline’s first A350 was delivered “one week before schedule” as Airbus’s commitment was for a handover before 31 December.
Qatar Airways expects to receive eight more of the 37 A350-900s it has on order by the end of 2015. The airline plans to debut the type on its Doha-Frankfurt route on 15 January.
Airbus CEO Fabrice Brégier has made it clear there is no doubt the A380 production program will continue. “We delivered this year 30 Airbus A380s, our order book is largely fit,” he said at the Qatar Airways A350 XWB delivery ceremony Dec. 22. “And we produce close to 30 aircraft a year. Clearly, our challenge is to get more customers,” Brégier said, adding, the market trend is in favor of the A380.
Airbus CFO Harald Wilhelm surprised the aviation world early in December by raising the possibility of either re-engining the A380 with more efficient engines or discontinuing A380 production in 2018.
Brégier said, “To stop A380 production would be crazy. We are about to go breakeven next year [in the A380 program].” He added that Airbus invested €10 billion ($12.25 billion) in the A380 program. “One day, we will improve the aircraft, which may include a new engine or the larger version [-900] when the market is requires it.”
Meanwhile, Qatar Airways took delivery of its fourth A380-800 this week.
Asked how satisfied he is with the A380 performance, Qatar CEO Akbar Al Baker said, “The aircraft performance has exceeded our expectations.”
Qatar said it operates the A380 with 100% reliability. “We still have three more A380 options and we will decide to take more aircraft [additional orders] when our A380 fleet is operating 12 months,” Al Baker said, adding, “I don’t know how Airbus could make the A380 better [than it currently is],” he said.
American Airlines subsidiary Envoy Air pilots, represented by the Air Line Pilots Association (ALPA), have ratified a tentative agreement that will allow pilots at Envoy Air to fly Embraer E-175 aircraft. ALPA said 75% of Envoy pilots voted to ratify the agreement out of more than 91% of eligible pilots casting ballots.
“The pilots were faced with an extremely difficult choice between two challenging outcomes,” Envoy pilot group chairman Sam Pool said. “While this deal represents a process that none of our pilots wanted and none would have voluntarily chosen, we endorsed it as the better alternative to the continuous dismemberment and outsourcing of our flying.”
According to ALPA, the new 10-year agreement includes an up-front cash payment for current Envoy pilots, a commitment for new aircraft, and a flow-through arrangement allowing Envoy pilots to be hired at American Airlines. The deal also contains cost savings from the current Envoy contract.
Specific details of the agreement were not disclosed. The agreement takes effect immediately.
Envoy Air provides regional flight service to American Airlines under the American Eagle brand.
UK budget carrier EasyJet has been forced to proactively cancel a number of flights Dec. 26 due to a strike by French cabin crew. The strike over pay and conditions is being called by two French unions—Syndicat National du Personnel Navigant Commercial (SNPNC) and Union des Navigants de L’aviation Civile (UNAC)—on Dec. 25 and 26.
As EasyJet does not operate any flights Dec. 25, the strike will affect only French domestic flights on Dec. 26, according to the airline.
The airline said it would ensure a “minimum service on every route affected by cancellation,” and currently flights no flights to or from the UK have been cancelled.
An EasyJet spokesperson said: “EasyJet crews are in the vast majority employed under permanent contract and among the best remunerated crew in France. Every year EasyJet conducts negotiations with its employees and their representatives and this strike has been called while the negotiations have just begun. EasyJet remains open and committed to finding a suitable resolution with the unions.”
Meanwhile, DNATA ground handlers at London’s Heathrow, Gatwick and Manchester airports have suspended plans for a two-day strike starting Tuesday after the company made an improved pay offer.
More than 460 members of the Unite union at the three airports had been due to strike in protest against a “divisive” pay deal that included a 4.5% increase for supervisors—double the 2.25% offered to other staff.
Following a breakthrough in talks at the Advisory, Conciliation and Arbitration Service (ACAS), the union members will instead be balloted on a revised pay offer.
Unite regional officer Kevin Hall said: “All of this could have been avoided if the company hadn’t refused requests to negotiate and go to ACAS a number of weeks ago. We will now be putting the details of the revised pay offer to our members over the coming weeks.”
In other action, Unite is urging Japan Airlines to return to the negotiating table to avoid industrial action after Heathrow-based cabin crew rejected the airline’s latest pay offer.
Cabin crew voted by 82.5% to reject the offer, prompting warnings from Unite “that the airline had misjudged the mood of loyal cabin crew at Heathrow and failed to recognize their important role in turning the airline’s fortunes around.”
Unite regional officer Simon McCartney said: “Feelings are running high and the airline needs to get back around the negotiating table or face the real possibility of a vote in favor of industrial action.”
Air India is considering changing some of its nine remaining Boeing 787-8 orders to the larger 787-9, chairman and managing director Rohit Nandan told ATW.
Air India has taken delivery of 18 of 27 787-8s it has on order. “We expect to decide this month whether we’ll go for the bigger version,” Nandan said. His comments were made this week during the Star Alliance chief executives board meeting in New Delhi. Air India, which joined Star Alliance earlier this year, is hosting the board meeting of the Star carrier chief executives for this first time. Air India’s 787s are replacing older 747-400s that the airline is phasing out of its widebody fleet.
Regarding its future narrowbody fleet, Nandan said Air India is eyeing a potential Airbus A320neo order. It will also operate A320ceos; it already has five A320ceos on order.
Air India Express, a subsidiary of Air India, wants to have a future fleet of up to 36 737 MAX aircraft, Nandan said. Air India has three 777-300ERs on order, but is in negotiations with Boeing to transfer the 777s into an order for 737 MAXs.
The carrier is also trying to lease out three 777-200LRs it owns. “This aircraft does not fit in our network,” Nandan said.
Star CEO Mark Schwab, in New Delhi for the board meeting, said Air India’s entrance into the alliance in July was a positive development. “India is the world’s fifth biggest domestic aviation market and will continue to grow, both domestically and internationally,” he said. “It is therefore essential for Star Alliance to have a strong presence in the market.”
Currently, 14 Star Alliance carriers are serving India with 3,212 weekly flights to 94 destinations in 30 countries. Indian minister of tourism, culture and civil aviation Mahesh Sharma told ATW that India should become the third largest domestic aviation market in the world by 2020.
Using L.A./Ontario International Airport for flights is much more convenient for me than LAX. I can't understand why the cost of flights is so much higher at Ontario compared with LAX. I cannot stand the long drive to LAX and the crazy traffic in the airport. Ontario airport is a great place with convenient parking and nice terminals. What gives?
Economics. Forever. And always. And maybe some other stuff, depending on whom you believe. If you look at the weekly airfare chart on Page L6 of the print section, , you can see some of the differences in domestic fares. Fly out of behemoth LAX — on pace to serve more than 71 million passengers this year — and your cost will start at $124 on American, Delta, Southwest, United, US Airways or Virgin America. Fly out of Ontario, which will be lucky to serve 4 million this year, and your tab starts at $242 on United or US Airways.
If you have a sense of irony, you'll note that your drive to the Strip from Ontario can take almost an hour off the trip (it's about 50 miles closer) than if you were to motor from LAX.
You'll find a price variance — sometimes enormous — on every route listed in the chart. While you're wincing at the premium you'll pay for service out of Ontario, notice how many more carriers fly out of LAX.
Part of the answer to higher prices? The number of competitors.
The LAX-Atlanta route, for instance, shows seven carriers serving Atlanta; from Ontario, three.
What's worrisome for consumers, no matter where they fly from, is what's happened/is happening with the airline industry, as suggested by airlines listed on the LAX-Atlanta run: American, Delta, Frontier, United, US Airways, Southwest and AirTran.
On Dec. 28, AirTran flies its last flight, completing its merger with Southwest. American and US Airways are still becoming one but should have one website by the end of next year. Delta merged with Northwest in 2008. United merged with Continental in 2010.
That leaves Denver-based Frontier, which announced last month that it was transitioning to an "ultra-low-cost carrier" and would be cutting flights on less-profitable routes.
"Competition is not only the basis of protection to the consumer, but is the incentive to progress." That gem is from President Herbert Hoover, who is generally blamed for the Great Depression by those seeking a scapegoat. His thought pretty much sums up why there's increasing pain in your wallet and dismay in your heart about progress (in the form of lower prices) versus airline profits.
You may feel some flicker of hope about prices, thanks to lower fuel costs, but let me extinguish that for you, at least, for now.
George Hoffer, professor of economics at University of Richmond in Virginia, noted that airlines buy fuel hedges — that is, fuel bought at a certain price per gallon so that carriers consistently pay the same amount per gallon. If fuel prices go up, they are paying less than market price. If prices drop, they pay more. It may be some time before airlines can take advantage of lower prices, Hoffer said.
What might provide some hope, Hoffer said: Lower prices mean a friendlier environment for airline start-ups. We've seen that with Norwegian Air Shuttle, which is providing some moderating influence on European airfares.
For now, though, the lack of competition isn't helping Ontario.
Add to this the economics of San Bernardino and Riverside counties, two of the main areas it serves, both of which got walloped by a souring economy. In 2009, San Bernardino's unemployment hit 12.9% and Riverside's 13.4%. (Los Angeles County's was 11.6%.) Those figures are much improved — in October, San Bernardino was 7.7%, Riverside 8.4% — but it's an arduous climb out of a deep hole.
Noting that the Inland Empire was hit disproportionately hard by that crisis, a Los Angeles World Airports report called "Q&A: L.A./Ontario International Airport: Common Questions and Answers About the Airport" notes that "the economic rebound in the IE will play a strong role in the recovery of ONT's air travel."
It's hard to dispute that, but everything becomes suspect when a lawsuit is involved, and there is one: The city of Ontario would like control of the airport and blames Los Angeles World Airports for the decline in passenger numbers and says neglect of its airport caused the drop. The airport says otherwise.
It's unclear for now, but what you can expect, in all probability, is that you'll pay a premium for convenience. Like that $4.99 half-gallon of milk you buy at the Quikkie Stop rather than paying $2.99 at your local grocer, airfares at Ontario will continue to put a bigger hole in your travel wallet in exchange for LAX avoidance. Alas, you're stuck with this dilemma: conserving your wealth or saving your mental health.