Monday, February 29, 2016

Alaska Airlines uniforms are getting a makeover from Seattle designer Luly Yang

Seattle fashion designer Luly Yang, known for her one-of-a-kind creations, has been hired to do something entirely different: Design new uniforms for the entire Alaska Airlines workforce — 12,000 people.

The skies are about to get a lot more stylish — at least, on Alaska Airlines.

Fashion designer Luly Yang, whose international couture and ready-to-wear business is based in downtown Seattle, has a unique assignment: designing new uniforms for the entire Alaska workforce, from flight attendants to pilots to customer-service agents to maintenance technicians. The partnership with Alaska, announced earlier this month, will be a two-year process, with the company’s new look expected to debut in 2018.

“It’s such an amazing project for a designer to be commissioned to do,” said Yang in an interview at her Seattle studio, where the vast skirts of her trademark formal and bridal gowns burst exuberantly from the racks. “It’s a long-term project, and it’s a challenging one because you’re answering to many different needs. The uniform needs to of course reflect the brand. … [Alaska] has a certain persona and a certain personality, and you want that to come through.

“You also want it to function for all the different work groups. The need they have for each garment is different. That’s why we spend months just listening, getting surveys, doing focus groups, before we even begin to decide what it’s going to look like.”

That’s the phase Yang — and a five-person local team hired specifically for this project — is now in: gathering information, about what Alaska’s 12,000 employees like best and least about their current uniform, how they feel about individual pieces (for example, hats), how the specific needs of their jobs inform their clothing preferences.

There’s long been a link between the fashion and aviation worlds. In the late 1960s, Emilio Pucci raised eyebrows by designing a wildly mod, neon-colored uniform line — complete with space-age bubble helmets, so as to preserve coiffures on a windy tarmac — for Braniff International Airways.

More sedately, Pierre Balmain designed elegant print sarong dresses for Singapore Airlines in 1968, based on the traditional kebaya; those uniforms, largely unchanged, are still worn on the airline today.

Christian Lacroix created chic designs for Air France in 2005, still in use, and Vivienne Westwood went less classic for her sleek, blood-red uniforms for Virgin Airlines in 2013. And here in the U.S., designer Zac Posen was recently hired to spark up Delta Air Lines’ look; his designs will debut, like Yang’s, in 2018.

According to Sangita Woerner, Alaska’s vice president of marketing, this is the first time the company has partnered with a fashion designer. “What Luly will bring to the table is those little design details that maybe a customer might not even notice, but a flight attendant will notice,” she said. “To create a sense of pride for what you put on every day.”

For Yang, who specializes in custom couture creations and limited-edition ready-to-wear, this project means designing a complete line of clothing, with each employee group receiving a collection of separates. A female flight attendant, Yang said, might have “a couple of dresses, trousers, a skirt, a couple of different kinds of blouses, maybe a knit cardigan or sweater. Quite a few pieces, different combinations.”

As for fabrics, Yang and her group are looking at “many different technical fabrics that would be good for breathability, for stretch, for longevity, for care … It’s challenging because it’s not a fashion line where it comes in this season and out next. This has to last.”

For color, Yang is guided by the recent Alaska redesign of its planes and logo, which features shades of blue, turquoise and pale green, but says she’s not strictly restricted to those hues.

“It’s important that [the uniforms] look cohesive, with their new refreshed brand,” she said. “Some of the colors are beautiful graphically but you don’t want to use too much of it on the garment — you have to think about different complexions.” Her goal: “a system that looks good on most people.” (She’ll also be dealing with more sizes than a typical designer would offer: The women’s range, said Woerner, is 0 to 28, and the line will also include maternity garments.)

Once the process of surveying the employees is complete, Yang and her team will move on to focus groups. She’s already getting plenty of feedback: After a recent Alaska flight, Yang was surrounded by flight attendants and pilots eager to make suggestions. (Among them: A pilot explained that the current uniform belt rubs uncomfortably against the five-point seat-belt harness; flight attendants suggested deeper pockets in their aprons, and more stretch in their trousers.) “Every flight I’m on, I have pages of notes!” Yang said.

Then comes the actual design process: drawings, concepts, samples, testing. In a year or so, keep your eyes open when flying Alaska; you might see an employee road-testing new garments.

Though it’s just the beginning of a long project, Yang is clear on what the end of the road should be.

“It’s my goal that [the employees] are proud to put [the uniform] on, that they want to wear it, and when they wear it they feel polished and professional and as if they represent the company in the best way possible,” she said. “I want them to look forward to putting it on in the morning.”

(Moira Macdonald - The Seattle Times)

Southwest Airlines flight instructors approve contract, raise

Southwest Airlines Boeing 737-7H4 (36621/2532) N912WN taxies at John Wayme Orange County Airport (SNA/KSNA) on November 16, 2008 sporting the special "Tinker Bell / Powered by Pixie Dust" livery.
(Photo by Michael Carter)

Flight instructors for Southwest Airlines have approved a new contract that includes across-the-board pay raises, the airline and the union representing the instructors reported today.
The new deal also includes possible bonuses and updated work rules for the flight instructors. The agreement will become amendable on Dec. 31, 2019.
“I applaud the work of the negotiating teams and the leadership displayed throughout the process,” Southwest chief operating officer Mike Van de Ven said in a statement. “This agreement recognizes the significant contributions of our flight instructors and delivers needed flexibility to support Southwest's expanding network.”
Earlier this month, ramp, cargo and operations workers narrowly approved a contract that included raises and work rule changes. Southwest continues to negotiate with its pilots and flight attendants unions. Both rejected tentative agreements last year.
While negotiations with the pilots and flight attendants have each gone on for more than two years, the flight instructors approved a new contract less than two months after talks began. The groundworkers contracts were approved after four years of talks.
“We never had to discuss major concessions, and that made the process much easier,” Transport Workers Union International vice president Gary Shults said in a statement. “We were able to address scheduling needs and increase our members’ annual income at the same time. Both TWU and Southwest came to the table prepared to get this agreement done, and that made all the difference.”
(Bill Hethcock - Dallas Business Journal)

Friday, February 26, 2016

Boeing's Big New Market Is Growing Faster Than China

But just because Boeing has found it doesn't mean they'll own it.

China will buy 6,330 new commercial airplanes over the next 20 years. So says Boeing. And with Boeing currently controlling roughly 50% market share in China's commercial aircraft market, Boeing presumably wants to sell a lot of those airplanes to China.

But if Boeing is smart, it might want to lower its sights just a little and focus more efforts to the south.

And east.

Southeast Asia, to be precise.

Go Southeast, young man!

China's a great market to be in, no doubt. But with Boeing now neck-and-neck with Airbus in the Chinese market, and at least two new homegrown Chinese airliners lining up to attack the domestic market as well, Boeing's share of the Chinese market is only likely to shrink over time. Meanwhile, Boeing itself has just identified a market that's nearly as big as the one in China, and arguably growing even faster than China.

Speaking at the Singapore Airshow earlier this week, Boeing senior VP for Asia Pacific and India Sales Dinesh Keskar predicted that Southeast Asia as a region will spend close to $550 billion buying 3,750 new airplanes of its own over the next two decades.

Most of these -- 76% -- will be single-aisle jets, such as Boeing's 737s and Airbus' A320 family of aircraft, which are perfectly sized to serve travel within the region. Passenger traffic in Southeast Asia, which as defined by Boeing includes such countries as Malaysia, Vietnam, and the Philippines, is likely to grow as fast as 7.7% annually over the next 20 years. According to previously published Boeing estimates, that's faster than the 6.6% pace expected out of China.

Who will win in Southeast Asia?

And yet, despite recognizing the opportunity in the region, Boeing seems to be struggling to capitalize on it. According to Boeing's order book, where the company keeps a running tally of backlogged orders by region, Boeing currently has 532 orders stacked up down there -- 86% of them for 737s. At the same time, Bloomberg reports that Airbus has orders for 463 aircraft outstanding at Lion Air alone (also a big Boeing customer) -- plus 430 orders at IndiGo and 307 more at AirAsia besides.

Tally up those Airbus orders, and it looks like Airbus is outselling Boeing by roughly 2 to 1 in this important market.

(Rich Smith - The Motley Fool)

Embraer rolls out first E-2 jet, filling a hole Boeing left when it killed the 717


Brazil’s Embraer rolled out its first next-generation E-2 jet Thursday. The energy efficient jet is slightly smaller than the smallest of Boeing’s product line.
While E-2 jets won’t directly compete with Boeing’s 737 Max, the largest of the new series will carry only six fewer people than Boeing’s 737 Max 7, in two-class configuration.
On Thursday Embraer rolled out the mid-sized version of its new jet, the A190-E2, which seats 97 in two classes.
The Embraer jets are arguably the most successful of an array of new and smaller regional jets from China, Russia, Japan and Canada.
Embraer has 1,704 net orders for the E-Jet family overall, and 267 firm orders for the re-engined and more efficient E-2 series.
Until a decade ago Boeing had its own aircraft in this sector – the similarly sized Boeing 717. Boeing inherited that jet as part of the 1997 merger with McDonnell Douglas Corp., renamed it the 717, and continued building it for another nine years until stopping production in 2006.
Delta Air Lines continues to operate the 717 jets, including some that it flies out of Seattle-Tacoma International Airport.
The Embraer E-2 jets include substantial increases in fuel economy over the 717 or even over the earlier Embraer models.
The just-rolled-out E-2 cuts 11 percent in fuel burn from its new Pratt & Whitney geared turbofan engines, another 3.5 percent from its longer wings, and another 1.5 percent from efficiencies introduced by a fly-by-wire control systems, according to a Flight Global story filed from Sao Paulo Thursday.
Back when Boeing was still building 717s, much of the regional market was switching to propeller-driven turboprops, which were far more efficient than the jet engines of the time. While slower, turboprops like the Canadian Bombardier Dash 8s, now used by Horizon Air, worked well for shorter regional routes.
But now a combination of far more efficient jet engines and lower fuel prices have made regional jets' engines competitive again.
Alaska Air Group is planning to order 30 new regional jets this year for Horizon, and the company will likely go with the E-2 model.
(Steve Wilhelm - Puget Sound Business Journal)

Thursday, February 25, 2016

Boeing unveils 737-800 "Next Generation" Converted Freighter (BCF)


Boeing introduced its new 737-800 Next Generation Converted Freighter on Tuesday at the company's Shanghai facility.

There is good reason why a Chicago-based airplane maker launched its latest offering in China.
Many of the new freighters will go towards satisfying Chinese consumers' voracious appetite for online shopping.
Boeing predicts the global market for 737-sized freighters to be more than 1,000 planes over the next 20 years with roughly one-third of the demand coming from China.
While the global economy and larger industrials are facing some challenges in China, the country's mega online retailers such as Alibaba are thriving and the smaller consumer goods sold by these sites require a modern express-shipping system get from seller to buyer.

That's where the new 737-800 BCF (Boeing Converted Freighter) comes into play. 

"Demand in the express freight market is driven in large part due to e-commerce," Boeing's vice president of airplane conversions Kurt Kraft told Business Insider in an interview.


"Since 2013, China has surpassed North America in e-commerce — thus driving demand for overnight deliveries."

According to Boeing, the domestic express cargo business in China grew an average of 50% per year from 2009 to 2014 while revenues surged 30% in that same time. 

But, with China's recent slowdown in economic growth and increased volatility in its stock markets, there are certainly many who are concerned about the country's continued growth in consumption.

That may be, but "much of China's e-commerce growth will be to set up the country's express shipping network which doesn't really exist right now," Kraft said.

Boeing's converted freighter program takes older airliners that are a bit long in the tooth for passenger service – more than 15 years old typically – and modifies them for freighter service. This conversion helps airlines maximize the value of their asset by extending the life of the plane by another 10 to 20 years. 

The conversions include such modifications as cutting a large cargo door on the side of the plane, reinforcing the cargo deck, and adding a rigid barrier between the flight deck and the cargo area.
The 737-800 BCFs are coming at the right time for both the manufacturer and airlines. As airlines continue to phase out older 737-800 aircraft from passenger service, freighter conversions will create a market for many airplanes that would otherwise be sold for scrap.

Currently, Boeing has orders for 30 737-800 BCFs with commitments for another 25 aircraft. Customers include China Postal Airlines and General Electric Capital Aviation Services.
Many of the newly modified 737 BCFs will go towards growth in the express shipping market while others will be used to replace decades old 737 freighters. 

However, not all of Boeing's converted freighters are as hot a commodity with customers right now. The company spent years modifying ex-passenger ferrying Boeing 747 jumbo jets to haul heavy cargo from continent to continent. But that market has dried up for now.

"We currently have no 747-400 conversions on order,"Kraft said. "We haven't sold one in two to three years."

With that said, it should be noted that Boeing is still building and has orders for its new 747-8 freighters.

Boeing will begin deliveries of the 737-800 BCF in the fourth quarter of 2017 with conversions expected to be performed at several of the company's facilities around the world.

(Benjamin Zhang - Business Insider)

Republic Airways files for bankruptcy protection

Republic Airways Embraer 190AR (ERJ-190-100IGW) (c/n 19000481) N177HQ rolls for takeoff on Rwy 30 at Long Beach Airport (LGB/KLGB) on May 12, 2014.
(Photo by Michael Carter)

Regional carrier Republic Airways filed for Chapter 11 bankruptcy protection Thursday, saying its income has plunged amid a shortage in pilots.

Republic operates feeder flights on small and mid-size narrow-body aircraft for “mainline” partners American, Delta and United. Republic pledged that it and its subsidiary airlines would “continue normal business operations” while the company attempts to restructure under bankruptcy protection.

“We worked hard to avoid this step,” Republic CEO Bryan Bedford said in a statement. “Over the last several months, we’ve attempted to restructure the obligations on our out-of-favor aircraft – made so by a nationwide pilot shortage – and to increase our revenues.”

“Our filing today is a result of our loss of revenue during the past several quarters associated with grounding aircraft due to a lack of pilot resources, combined with the reality that our negotiating effort with key stakeholders shows no apparent prospect of a near term resolution,” Bedford added in a statement.

Indeed, Republic’s bankruptcy – “the first large U.S. airline bankruptcy since American Airlines filed in 2011,” according to Bloomberg News – comes while most of the USA’s big “mainline” carriers are entering their second consecutive year of record profits.

Republic has struggled to retain enough pilots to run its full operation. A change in Federal Aviation Administration rules that increased the amount of flight time needed to become a commercial pilot is something Bedford has previously citied as a cause for the shortage.

However, some pilot backers have pinned the problem on poor pay. Whatever the cause, pilot staffing has become a significant problem for Republic and several of the nation’s other region outfits.

Indianapolis-based Republic includes subsidiaries Chautauqua Airlines, Republic Airlines and Shuttle America. Those regional carriers have a combined fleet of more than 250 aircraft and offer scheduled passenger service on more than 1,000 flights daily to more than 105 cities in the USA, Canada and the Caribbean and Bahamas.

Republic's carriers are paid per flight to operate American Eagle, Delta Connection and United Express flights, respectively, for partners American, Delta and United. Republic has about 6,000 employees.

(Ben Mutzabaugh - Today in the Sky / USA Today)

Wednesday, February 24, 2016

Gulfstream G650 (c/n 6191) N691GD

Gulfstream G650 (c/n 6191) N691GD is caught resting on the Gulfstream service center ramp at Long Beach Airport (LGB/KLGB) on February 24, 2016.
She arrived earlier in the day at 12:03 pst as "GLF14" from the Gulfstream factory located at Savannah-Hilton Head International Airport (SAV/KSAV).
(Photo by Michael Carter)

Boeing, MG Aviation, Norwegian Celebrate Delivery Of Airline's First 787-9 Dreamliner

Norwegian Longhaul Boeing 787-9 (37307/400) EI-LNI "Greta Garbo" departs Boeing Paine-Everett Field (PAE/KPAE) on her delivery flight.
(Photo: Boeing) 

Boeing, MG Aviation Ltd and Norwegian today celebrated the delivery of the Scandinavian low-cost carrier's first Boeing 787-9 Dreamliner.

Norwegian leased the airplane through an agreement with MG Aviation. The delivery is also the first Dreamliner to MG Aviation, the aviation leasing arm of Jordache Enterprises which has three additional 787s on order.

"The 787-9 Dreamliner will provide Norwegian with unrivalled operational advantages, large improvements in fuel efficiency and much lower costs," said Norwegian's CEO Bjørn Kjos. "In addition, it is an airplane that offers an exceptional in-flight experience."  

Norwegian already operates eight 787-8s and will use its 787-9s to open up new routes across North America, South America and Southeast Asia with its increased range and capacity.

"The Dreamliner is an excellent addition to our leasing portfolio that sets customers like Norwegian apart from the competition," said Nir Dagan, speaking for MG Aviation. "We are proud to place our 787-9s with Norwegian. We believe this airplane is a perfect fit and will deliver the airline with significant operational benefits and customer value."

The 787-9 complements and extends the super-efficient 787 family. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 will fly more passengers and more cargo farther with the same exceptional environmental performance — 20 percent less fuel use and 20 percent fewer emissions than similarly sized airplanes.

"We are honored to deliver the first 787-9 to our partners at Norwegian and MG Aviation - two companies that clearly understand the value proposition of the 787," said Monty Oliver, vice president, European Sales, Boeing Commercial Airplanes. "This airplane is a great addition to any carrier's fleet, offering superior passenger comfort, increased cargo capacity and lower operating costs."

Norwegian serves more than 130 destinations across Europe, North Africa, the Middle East, the USA and Southeast Asia, with a fleet that includes 90 Next-Generation 737-800s and eight 787-8s. In October 2015 the airline placed the largest single order for 787-9s from a European carrier, ordering 19 airplanes valued at more than $5 billion at list prices.

MG Aviation is part of Jordache Enterprises, the Nakash family's global conglomerate that also operates Arkia Israeli Airlines.

(PR Newswire)

Tuesday, February 23, 2016

Here's Your First Look At NASA's New Bleeding-Edge X-Plane

Last December, NASA received an enormous cash boost for 2016-bringing their funding to well over 19 billion dollars. Shortly after, the administration announced it was ready to cash in with some big plans.

"This increased funding will allow us to do something that NASA has not done in decades, to partner with industry and build a new series of experimental aircraft, or X-Planes." reiterated Charles Bolden, NASA's chief administrator, at a press conference at the NASA Ames's Research Center yesterday.
The majority of these new experimental aircraft will be focused on pursing an increasingly important goal: producing greener commercial airliners. During the press conference, NASA gave reporters a peek at the first design of one such X-Plane.
It's a commercial airliner with some very strange wings, which NASA hopes could replace the Airbus 320 or Boeing 737 by 2030. It could carry 150 passengers and travel at 75 percent of the speed of sound. "It would knock the socks off a Boeing 737. It'll cut fuel use by more than 50 percent," says Bolden.

The airliner, currently unnamed, has truss-braced wings, the need for which wind-tunnel testing made evident. In addition to the cut fuel consumption, the plane "would also be at least six times quieter and cut emissions by 80 percent" compared to an Airbus 320 or Boeing 737, says Nateri Madavan, a project manager of NASA's air transport technology division. The design was co-developed by Boeing, and has been a work in progress for roughly 7 years.
Madavan explains that this "revolutionary plane" owes it's insane boost in fuel efficiency to incredibly slender wings. The slenderness of the plane's wings increases the jet's aerodynamical properties-cutting down on drag-while the truss keeps those flimsy wings from snapping clean off.

The balance between slenderness and strength is one that aerospace engineers have juggled for decades, but have yet to master. The key issue is finding a way to develop a strong truss that doesn't create any unintended aerodynamical wackiness that might eliminate the efficiencies of the slender wings in the first place. Madavan says that all evidence suggests that this new design cleanly solves that puzzle.

Right now NASA is currently testing a scale model of the truss-braced jetliner in their 11 by 11-foot transonic wind tunnel. The last few weeks have focused on trying the dynamical properties at the joint where the truss meets the wing, "which we affectionately call the armpit," says Madavan.
(William Herkewitz - Popular Mechanics)

Southwest's Long Beach Airport takeoff could spur fresh rivalry with JetBlue

Michael Spann can drive from his home to the Long Beach Airport in less than 15 minutes, but the sales representative is frustrated that he can't get a direct flight to see his son in Denver from the handful of carriers that serve the regional airfield.

That could change now that the city of Long Beach has offered Southwest Airlines the chance to operate in Long Beach for the first time, setting up a possible battle of low-cost carriers at the 1,166-acre facility. "I welcome Southwest coming in because it gives me more options," Spann said.

Long Beach's move to add nine new daily departures and arrivals boosts airport traffic up to 20%. It also opens the door for JetBlue Airways, the biggest carrier at Long Beach with more than 80% of the daily flights, to go head-to-head with Southwest, a low-cost carrier known to dominate its competitors at regional airports.

"It's an opportunity for Southwest to enhance their network even if it is a few slots," said Jonathan Root, an analyst with Moody's Investor Service.

Southwest executives have yet to announce the destinations they would like to serve from Long Beach but they have hinted that Southwest may add flights to the Bay Area — possibly duplicating the routes now served by JetBlue.

The new slots for daily flights became available after noise studies in November showed that the airport could add nine more daily departures and arrivals without violating an airport noise limit that sets a threshold tied to the airline noise generated in 1989-90.

Experts say the growing use of modern jets with quieter engines, among other factors, has helped reduce airport noise in Long Beach and other airports across the country.

Until Long Beach added the new slots, the airport imposed a limit of 41 daily flights for large jets, allocated to JetBlue, American Airlines, Delta Air Lines, Federal Express and UPS. The city distributed the nine new slots by offering four to Southwest, three to JetBlue and two to Delta.

For now, the airport serves only domestic destinations, but Long Beach is now considering adding a federal inspection facility to allow international flights. JetBlue has been lobbying for the inspection facility so it can open routes out of Long Beach to Mexico.

In neighborhoods around Long Beach Airport, residents have mixed views about the growth, with some praising the city for bringing in more travel alternatives and others worrying that it may lead to more jet noise.

"It's about convenience and more choices," said Suzanne Powell, a retired teacher who has lived in Long Beach for 10 years.

Some residents who live near the airport say they prefer quiet skies to increased airline competition.

"We are close enough to flight paths to hear the takeoffs," said Ron Antonette, a public relations consultant who lives less than three miles from the airfield. "They are studying adding international flights now, and there are a lot of unknown variables."

Laurie Smith, a television producer who lives about two miles from Long Beach Airport, noted that federal officials have begun installing a modernized air traffic control system, known as NextGen, at the airport. She suggests that the city postpone adding more slots until the impact of the new traffic control system is studied.

Long Beach is one of the smallest airports that operates scheduled commercial flights in Southern California. In the 12 months that ended Nov. 30, the airport served 1.2 million passengers, an 11% decline from the same period in 2014, according to federal data.

The decline is partly the result of airline mergers over the last decade. The combinations have consolidated the nation's domestic service to a handful of mega-carriers that have cut less-profitable routes to smaller airports to focus on more lucrative flights to large hub airports.

In addition, JetBlue hasn't taken full advantage of its Long Beach slots as it focuses on its growing business to the Caribbean and Latin America, Fitch Ratings has noted. But JetBlue has denied that the reduction in daily flights out of the regional airport is tied to delays in allowing international flights.

Airline industry experts say the move by Southwest to open operations in Long Beach may seem strange, considering the size of the facility and the decline in passenger traffic over the last few years.

But they note that Southwest's business strategy has long been to concentrate operations at regional airports, leaving its competitors to battle over major hub airports like Los Angeles International Airport, the nation's third-busiest airport.

"It's part of being what they call a neighborhood airline," said Henry Harteveldt, chief research officer and co-founder of San Francisco-based Atmosphere Research Group.

In Southern California, major carriers such as American, Delta and United Airlines have been investing heavily to dominate at LAX. Delta, for example, last year completed a $229-million upgrade to its LAX facilities. American Airlines announced plans last month to add 25 daily flights out of LAX starting in June, a 10% increase in service for the Fort Worth-based carrier.

Meanwhile, Southwest has grown to be the largest carrier in most regional airports around LAX, including Bob Hope Airport in Burbank, John Wayne Airport in Santa Ana, Ontario International Airport and San Diego International Airport.

Of Southern California's regional airfields, Long Beach Airport has been one of the few facilities not served by Southwest.

"We want to be L.A.'s preferred carrier, not just the largest," Southwest spokesman Brad Hawkins said. "By having service in multiple locations we reach different groups of customers."

Industry experts say that advances in jet engine technology could continue to lower the noise impact at Long Beach, allowing the city to add even more air traffic in the future.

For now, Long Beach officials say they can't predict whether more slots will be added in the next few years. But if the airport continues to expand service, Southwest officials hope to be in a position to take advantage of the growth.

"We have the strongest customer base in California, I would venture to say, and we aim to be everywhere they want to fly," Hawkins said.
(Hugo Martin - Los Angeles Times)

Southwest CEO Gary Kelly says airline likely to seek Cuba routes

In a message to employees, Southwest Airlines Co. CEO Gary Kelly today said the airline “in all likelihood” would apply to fly commercial flights in and out of Cuba, according to the Dallas Morning News.
“If we don’t get our foot in the door now, we might miss the opportunity to serve Cuba for a long time,” Kelly said, according to this report in the DMN. “We are very prepared to consider this opportunity and may very well be flying to Cuba in 2016.”
I reported last week that several U.S. airlines including Fort Worth-based American Airlines and Dallas-based Southwest Airlines are interested in the chance to fly to Cuba after officials from both countries agreed Feb. 16 to allow direct commercial flights to resume between the two nations. Only charter flights are now available between the countries.
Last week, a Southwest Airlines spokesman said the airline would “consider” flights to Cuba.
The Department of Transportation started the process for U.S. airlines to begin bidding on routes for as man as 110 U.S.-Cuba flights a day. The agreement allows 20 regular daily U.S. flights to Havana, in addition to the existing 10 to 15 charter flights a day. The rest of the destinations would be to nine other Cuban cities.
American Airlines said it plans to apply for scheduled service to Cuba, primarily with flights from its hub in Miami, but potentially also from Dallas Fort Worth International Airport and other hubs.
American has operated U.S.-Cuba charter flights since April 1991, and now offers 22 weekly flights out of Miami to Havana, Camaguey, Cienfuegos, Holguin and Santa Clara. American also flies from Tampa, Fla., to Havana and Holguin, and between Los Angeles and Havana.
Atlanta-based Delta Air Lines and Chicago-based United Airlines also intend to apply to fly to Cuba.
The relaunch of commercial flights comes after President Barack Obama and Cuban President Raul Castro announced late last year plans to begin normalizing ties after 50 years of Cold War prohibitions.
(Bill Hethcock - Dallas Business Journal)

United Ponders an Earlier Retirement for Out-of-Favor 747s

United Airlines Boeing 747-422 (28716/1124) N198UA on short final to Rwy 25L at Los Angeles International Airport (LAX/KLAX) on February 25, 2009. Sadly this aircraft was broken-up at Mojave (MHV/KMHV) during November/December 2015.
(Photo by Michael Carter)
United Continental Holdings Inc. considering parking its Boeing 747 jumbo jetliner fleet ahead of schedule to make way for newer, more-efficient twin-engine aircraft on its longest routes.

The carrier’s 22 747-400s might be retired as early as 2018, according to a memo last week to the company’s pilots from Howard Attarian, senior vice president of flight operations.

That would be an accelerated timetable, as then-Chief Financial Officer John Rainey in April said United likely would keep its four-engine aircraft at least until expensive maintenance work set for 2020 requires a decision on their future.

If United drops its biggest jet -- its jumbos seat 374 passengers in standard configuration -- the airline would accelerate deliveries of other long-haul aircraft, according to the memo. United spokesman Charlie Hobart confirmed the Chicago-based airline is considering the early retirement of the 747s but wouldn’t discuss the memo itself.

“As you know, this is an aging fleet that many operators are beginning to exit from service, and as this happens support for the aircraft, especially in our spokes, gets more difficult,” Attarian said in the memo.

Replacement Jets

The third-largest U.S. carrier has ordered 35 of the largest jets in Airbus Group SE’s A350 family, which seat 350 people. It could also add more Boeing 777-300ERs, with a capacity for 396 travelers, after ordering the first of the jets last year as a jumbo replacement.

Boeing is eager to notch 777 sales to fill its order book for 2018 and 2019 as it begins transitioning to an upgraded model, said Richard Aboulafia, aerospace analyst with Teal Group.

“You’re going to get a very good deal on 777-300ERs at that point,” he said.

Nicknamed “Queen of the Skies," the 747 was the first wide-body aircraft and brought international travel to the mass consumer market with its 1970 debut.

Carriers around the world have retired their jumbo fleets this decade and shifted to long-range twin-engine aircraft to save on fuel and maintenance costs. Delta Air Lines Inc. has been trimming its fleet in recent years and as of Dec. 31 had just nine left. United’s 22 fly out of Chicago and San Francisco.

United sees ending the jumbo’s run in Chicago in February 2017, with the rest of the fleet based in San Francisco, according to the memo. The document doesn’t make clear what jets would replace the aircraft. Brian Znotins, vice president of network, told investors in August that it would bring on Airbus Group SE A350s and variations of Boeing 777s and 787s as it retires the 747.

News that United may retire its 747 fleet sooner than anticipated was earlier reported by aviation blogger and journalist Brian Sumers.

Monday, February 22, 2016

United orders 25 more Boeing 737 worth $2 billion

Boeing has won an order for 25 current-generation Boeing 737 aircraft from United Continental Holdings, beating rivals including Canada's Bombardier for the second time in a month, two industry sources said.

The deal, which is said to involve the 126-seat 737-700 model, would be worth just over $2 billion at list prices.

Boeing and United Continental both declined to comment.

The follow-on deal with Boeing, first reported by the Wall Street Journal, comes weeks after United agreed to buy 40 Boeing 737-700 jets.

Bombardier said last week it was in new talks with United after winning an order from Air Canada for its CSeries jet.


Why Boeing's 787-10 Is Critical for Dreamliner Profitability

The largest Dreamliner variant is the key to recouping Boeing's early losses on the 787 program.

Shares of Boeing have slumped more than 20% since late December. The primary culprits have been investor concerns around aircraft demand and -- more recently -- reports of a possible SEC investigation into Boeing's accounting for the 747 and 787 wide-body jet programs.

At an investor conference last week, Boeing CEO Dennis Muilenberg offered a spirited defense of the company's profit and cash flow trajectory. He was particularly adamant that Boeing would earn enough profit on future Dreamliner production to offset the tens of billions of dollars in losses it incurred from building the first few hundred 787s.

To turn this promise into a reality, Muilenberg is counting on a big improvement in the product mix within the Dreamliner family. Higher production of the larger and more profitable models, particularly the 787-10, will drive strong improvements in the program's profitability.

More revenue, not much more cost

It's generally true within any aircraft program that the larger variants are more profitable than smaller ones. Airlines usually like the larger variants because they have lower unit costs. This allows aircraft manufacturers like Boeing to get significantly higher prices even though production costs aren't that much greater.

For the Dreamliner, the smallest model (the 787-8) had a list price of $224.6 million as of 2015. The list price for the mid-size 787-9 was $264.6 million, while the larger 787-10 listed for $306.1 million.

Assuming an average discount of 50%, this implies a $20 million step-up in the average selling price going from the 787-8 to the 787-9 and a nearly $21 million step-up going from the 787-9 to the 787-10.

On the other hand, once the production program matures, the incremental cost to build a 787-9 rather than a 787-8 or a 787-10 instead of a 787-9 should be less than $10 million. Muilenberg noted during his remarks last week that the 787-9 is actually easier to build than the 787-8, driving better cost performance. The 787-10 has 95% commonality with the 787-9, so Muilenberg expects similarly good results there.

Moving the mix

Nearly 80% of the Dreamliners delivered up until the end of 2015 were the 787-8. That's one of the reasons why Boeing has lost so much money on the program so far.

On the other hand, the 787-8 accounts for less than 20% of the firm order backlog. The bulk of the current firm orders -- roughly 60% -- are for the 787-9, leaving the 787-10 at a little more than 20% of the backlog.

Shifting most production toward the 787-9 rather than the 787-8 has driven big improvements in Dreamliner profitability. However, there's a significant opportunity remaining if Boeing can sell more 787-10s. Deutsche Bank analyst Myles Walton estimated last year that by 2020, Boeing's average profit on the 787-10 could be $15 million higher than for the 787-9.

The 787-10 will generate the highest per-plane profit of any Dreamliner variant.
(Photo: Boeing)

One potential driver of future 787-10 sales is replacement demand from 777-200 and 777-200ER operators. Boeing delivered more than 400 of these planes just in the 1995-2003 timeframe. By 2020, these early 777s -- which are similar in size to the 787-10 -- will start to reach prime replacement age.

The 787-10 could also pick up orders from airlines looking to replace the smaller 767 or the larger 747 with the most fuel-efficient plane available. Most importantly, the 787-10 could be an ideal airplane to cater to growth on dense, medium-haul routes.

Boeing plans to deliver the first 787-10 in 2018. As the largest and most profitable Dreamliner variant becomes a bigger portion of the sales mix in the years thereafter, Boeing should be able to start cranking out large profits from its 787 Dreamliner product line.

(Adam Levine-Weinberg - The Motley Fool)

Thursday, February 18, 2016

Gulfstream G450 (c/n 4201) XA-CHE

Climbs from Rwy 25L at Los Angeles International Airport (LAX/KLAX) on February 10, 2016.
(Photo by Michael Carter)

Gulfstream G650 (c/n 6009) N923WC

Operated by Warner Chilcott Leasing Equipment Inc., this lovely aircraft is captured rolling for takeoff on Rwy 20R at John Wayne Orange County Airport (SNA/KSNA) on February 15, 2016.
(Photo by Michael Carter)

Wednesday, February 17, 2016

Dassault Sees Weaker Market for Falcons in Asia

Dassault Falcon 7X (c/n 72) N312P taxies towards a Rwy 30 departure at Long Beach Airport (LGB/KLGB) on March 3, 2011.
(Photo by Michael Carter)

Dassault Falcon is exhibiting two of its wide-cabin business aircraft, a Falcon 7X trijet and a Falcon 2000LX twinjet, here in Singapore. The Asian market, after a peak period in the early 2010s, is now much slower, but the French airframer is confident about the coming years.

Business aviation is a cyclical market, including in Asia,” Jean-Michel Jacob, senior v-p for the Asia Pacific region, told AIN. There was strong growth four or five years ago, he said, but a quieter period began two years ago. Nevertheless, he added, “We remain very optimistic for the medium term,” he said.

Two sub-regions have different dynamics, in Dassault’s view. China, Japan and Korea have seen a major decrease in new aircraft sales. This is the result of a degrading economy and rising uncertainty, Jacob said. In Southeast Asia, however, the market remains active – both for new and preowned aircraft – despite the impact of China’s economy and falling commodity prices.

2016 will see relatively few Falcon deliveries in Asia, as a consequence of weak sales in 2015. “But we hope we will benefit from the sales rebound in Southeast Asia,” Jacob said, also mentioning a potential for upgrades to the first Falcon 7Xs delivered in China. The in-development Falcon 8X is believed to be particularly well suited to the needs of Asian operators, notably due to its range, which enables nonstop flights from Singapore to London.

Governments and institutions have recently signed new contracts. In November, Dassault delivered a Falcon 2000LX outfitted for medevac missions to the Beijing Red Cross emergency medical center. Last spring, the Japanese Coast Guard selected the Falcon 2000’s maritime surveillance version. Nevertheless, Dassault’s Asian customers mainly consist of entrepreneurs.

Indonesia, often referred to as the next booming country for business aviation, is still at the “promising” stage. “Indonesia is a huge country with a very strong potential for business aviation to develop,” Jacob said. So far, customers in that country have purchased few business aircraft, except a few ultra-long range models that were available at discounted prices due to the economic downturn, he went on. “We still believe in this market, which could involve Malaysia or Thailand in the mid-term,” he said.

The Falcon 8X trijet is expected to receive its certification in the middle of this year. In addition, Dassault is developing the Falcon 5X twinjet, though a new schedule still has to be released. Engine manufacturer Snecma revealed last year that certification of the 5X’s Silvercrest turbofan would take longer than expected.

Dassault in 2015 created subsidiaries in Hong Kong and Beijing. The former coordinates marketing activities with offices in Kuala Lumpur, Shanghai and Beijing. The latter deals with support. “Major” Falcon service centers can be found in Shanghai, while spare parts inventories are maintained in Beijing and Singapore. Last year, Beijing-based Deer Jet was authorized to provide line and unscheduled maintenance for the Falcon 7X.

(Thierry Dubois - AINOnline News)

U.S. Agency Denies Boeing's Protest of Bomber Contract

The U.S. Government Accountability Office (GAO) has denied a Boeing protest of the Long Range Strike-Bomber (LRS-B) contract award to Northrop Grumman. Boeing maintained that the selection process for the potentially $80 billion program was flawed, and said it is considering its next steps.

 On October 27, the U.S. Air Force announced its selection of Northrop Grumman to begin developing the bomber under a $21.4 billion engineering and manufacturing development (EMD) contract. The EMD phase will be followed by procurement options for the first five production lots of 21 bombers out of a total desired fleet of 100.

Boeing and industry partner Lockheed Martin filed a formal protest with the GAO on November 6, charging that the selection process was “fundamentally flawed.” Under federal procurement law, the GAO has up to 100 days to review and either uphold or dismiss a protest.

The governmental watchdog agency announced its decision on February 16. “GAO reviewed the challenges to the selection decision raised by Boeing and has found no basis to sustain or uphold the protest,” the agency stated.

“In denying Boeing’s protest, GAO concluded that the technical evaluation, and the evaluation of costs, was reasonable, consistent with the terms of the solicitation, and in accordance with procurement laws and regulations.”

Following the decision, Northrop Grumman issued a statement saying it will “get back to work” on the bomber. During a press trip the manufacturer hosted last month, executives suggested that LRS-B production could take place in a cavernous facility in Palmdale, Calif., where it formerly built the B-2 bomber. Half the facility is now used to build center fuselages for the F-35 Lightning II; the other half is empty.

The GAO decision “confirms that the U.S. Air Force conducted an extraordinarily thorough selection process and selected the most capable and affordable solution,” Northrop Grumman said.

Boeing stood by its original protest and said it will decide on next steps in the coming days. “We continue to believe that our offering represents the best solution for the Air Force and the nation, and that the government’s selection process was fundamentally and irreparably flawed,” it said.

(Bill Carey - AINOnline News)

"On time" Gulfstream says it is benefiting from competitors' delays

Gulfstream G650 (c/n 6131) N240CX smokes the mains on Rwy 30 at Long Beach Airport (LGB/KLGB) just after sunset on February 12, 2016.
(Photo by Michael Carter)

Upbeat Gulfstream says it is benefiting from delays to its rivals’ new long-range, large-cabin business jet programs, while its developmental duo are still on schedule.
Both Bombardier’s Global 7000 and 8000, and Dassault’s 5X have been hit by hitches that have pushed back likely certification by up to two years.
Gulfstream, meanwhile, says its newest types, the G500 and G600, are on track for entry into service as planned, in 2018 and 2019 respectively.
“We have a very long history of delivering on our promises,” Gulfstream’s senior vice-president, worldwide sales and marketing Scott Neal said at the show, citing the on-time arrival of its previous programs, the G550 and G650/G650ER. “What we deliver matches what we say. It is a differentiator that helps us win business.”
Neal also believes that – despite economic wobbles – the previously fast-growing business aviation market in China will continue to flourish. “We have seen the frenetic pace slow, but we remain very optimistic and we’re investing for the long term. We have the number one share there and we plan to stay there,” he says.
Although Gulfstream’s major market has been – and remains – North America, its fleet size in Asia-Pacific has doubled in five years to 289 aircraft, the company claims. The vast bulk of these – 243 – are its large-cabin jets, the G450, G550 and G650.
Neal says the three G500s in flight test will “shortly” be joined by a fourth example. The program has accumulated almost 500h since its maiden sortie last May, including a single flight of 6h 10min. Its first G600 – which shares a cockpit and fuselage shape with its sibling – is in production and will fly later this year.
“The test program is progressing according to plan,” Neal says.
(Murdo Morrison - Flightglobal News)

RAAF A330 MRTT refuels USAF C-17

A Royal Australian Air Force (RAAF) Airbus Defence & Space A330 multi-role tanker transport (MRTT) has successfully refuelled a Boeing C-17A for the first time.

The milestone took place on 10 February, with the RAAF tanker delivering 6,800kg (15,000lb) of fuel to the USAF C-17A over Edwards Air Force Base in California, says Australia’s Department of Defence.

(Photo: Royal Australian Air Force)

The 5h sortie saw 39 contacts made between the two jets using the A330 MRTT’s boom, which is designated KC-30A in Australian service.

The RAAF says air-to-air refuelling increases the C-17A’s range, allowing it to fly heavier payloads over longer distances. The US trial sets the stage for air-to-air refuelling between the tanker and Canberra’s own fleet of C-17As.

Australian C-17A pilots have already conducted refuelling trials with Republic of Singapore Air Force KC-135Rs in late 2015. Singapore plans to replace these aircraft with six A330 MRTTs.

The RAAF operates five KC-30As, with two more joining in 2017. It also has eight C-17As.

(Greg Waldron - Flightglobal News)

Boeing predicts 747-8 rate increase in 2019

Boeing has revealed long-term plans to double the planned production rate on the 747-8 programme in 2019, according to new financial documents.

Output on the 747-8 line is falling from 1.3 per month today to 0.5 per month in September 2016, reflecting continued anemic growth in the air cargo market.

But Boeing’s newly-released annual report says the company anticipates the rate will return to one per month in three years.

“We are currently producing at a rate of 1.3 per month with plans to reduce the rate to one per month in March 2016, further reduce the rate to 0.5 per month in September 2016 and then return to one per month in 2019,” the company says.

The 747-8 assembly line has struggled to stay alive and many analysts have suggested Boeing is likely to shut down the line in the near future.

But Boeing executives have made slightly more optimistic statements, acknowledging a slow market today but predicting that demand could pick back up in 2019. That’s when more than 200 747-400s begin to reach retirement age, Boeing says, and potentially fuel a replacement market.
Boeing also warns in the annual report that another forward-loss could be reported on the 747-8 if new sales do not materialize.

“We have a number of completed aircraft in inventory as well as unsold production positions and we remain focused on obtaining additional orders and implementing cost-reduction efforts,” Boeing adds in the annual report.

“If we are unable to obtain sufficient orders in 2016 and/or market, production and other risks cannot be mitigated, the programme could face an additional reach-forward loss that may be material,” the company says.

(Stephen Trimble - Flightglobal News)