Saturday, April 22, 2017

Gulfstream G550 (c/n 5062) N159JA

This lovely aircraft is operated by EBAY Inc., and is captured rolling for takeoff on Rwy 30 at Long Beach Airport (LGB/KLGB) on April 21, 2017 following a visit to the Gulfstream Service Center.

(Photo by Michael Carter)

Gulfstream G550 (c/n 5545) N550GU

Arrives at Long Beach Airport (LGB/KLGB) on Friday April 21, 2017.

(Photo by Michael Carter)

Do Emirates Cuts Threaten Orders at Boeing, a Company That Lately Can Do No Wrong?

It seems lately that Boeing can do no wrong.

Once a target of criticism by presidential candidate Donald Trump, Boeing has transformed itself into a presidential favorite. It contributed $1 million to the January inauguration. Weeks later, Trump visited Charleston, S.C., for the first 787-10 flight.

This month, he reversed himself to back the Export-Import Bank, which helps Boeing compete with Airbus.

Also in February, Boeing easily defeated a bid to unionize its Charleston plant, boosting its ability to play off South Carolina against Washington, where its plants are heavily unionized and where it has built airplanes for a century.

Boeing will report first-quarter earnings on Wednesday.

Of its $95 billion in 2016 revenue, Boeing Commercial Aircraft accounted for $65 billion while Boeing Defense Space & Security accounted for $29.5 billion. Demand for air travel is growing, while Trump has said he wants to spend more on defense.

No wonder Boeing shares closed Thursday at $179.30 or $6 below the all-time high. Among the 30 Dow stocks, Boeing is the third best 2017 performer, up 15% year to date. On Friday, the stock rose 0.5%.

Nevertheless, it cannot be viewed positively that on Wednesday, Emirates -- a key customer -- slashed its U.S. flying by 20%.

Let's acknowledge upfront that Boeing's commercial aircraft order backlog is 5,744 orders worth -- at list price, around $500 billion.

Emirates is the largest of the Middle East carriers that together account for 546 outstanding aircraft orders, about 10% of Boeing's total. The value percentage is higher because the Middle East order books tilt to wide-bodies, including 275 Boeing 777s and 134 Boeing 787s.

Emirates blamed the flying cutback on falling demand due to new security measures that ban laptops -- very peculiarly, only on flights from Middle East airports -- and on the Trump administration's continuing efforts to ban travelers from some Muslim-majority nations.

In truth, it has never been clear how much the growth of Emirates, Etihad and Qatar depends on demand, and how much it depends on government subsidies intended to grow the economies of the United Arab Emirates and Qatar.

"Their business model is based on growing their networks without regard to profitability in order to serve their governments' goals to dominate global aviation," said Jill Zuckman, spokeswoman for the Partnership for Open & Fair Skies, a coalition of U.S. airlines and labor unions who oppose the Gulf carrier's rapid U.S. expansion.

Still, "the growth needs to take a breather and allow the market to catch up," said aerospace consulting firm Air Insight in a recent report. "The concern should be how long this breather will be. For Airbus and Boeing, missing big orders from the ME3 will be a reality check -- the rest of the market is mature and buys much more carefully."

Similarly, a recent report by aerospace consultant Leeham Co. was titled, "Middle Eastern airline turmoil hits Boeing." It said Etihad, Emirates and Qatar "face over-capacity now compounded by electronic carry-on restrictions by the U.S. and U.K."

Leeham also sees a potential threat to Boeing and Airbus in Asia, which has not had the sort of airline shakeout the U.S. has experienced.

The two manufacturers could face challenges from the 2016 creation of the Value Alliance of eight Asian low-fare carriers, including Singapore Airlines' Scoot and Tiger Airways; ANA's Vanilla Air; Tiger Airways Australia; Thailand's Nok Air and NokScoot, the Philippines' Cebu Pacific Air and Korea's Jeju Air, Leeham said.

"The ramifications of the coalescing of Value Alliance and its threats to AirAsia and even full-service carriers means that Airbus and Boeing-each with huge backlogs in the region, with the low-cost carriers and the full-service carriers -- may have to up their game on monitoring the health of the airlines once the Value Alliance is in full swing," the firm said.

For the near term, Wall Street analysts remain confident.

"We like Boeing's set-up into Q1 with low expectations," Cowen & Co. analyst Cai von Rumohr said in a recent report. "Light Q1 deliveries don't jeopardize full year 2017 EPS, while commercial & {defense} bookings were encouraging," he said.

"Combined with rising airline load factors, declining {Boeing Commercial Aircraft} headcount, and share award tax benefits, they bolster the 2017-19 outlook," he said. He rates the stock outperform.

CFRA Research analyst Jim Corridore has a buy rating and a price target of $191, 20 times his 2017 estimate. Boeing's five-year average P/E was about 20X.

"We see price appreciation over the next several years," Corridore wrote.

"Commercial aircraft demand remains strong," he said, and "while we remain concerned about a drag from defense, the operation's size relative to the commercial business and the recent election of Donald Trump argue for increases in defense in coming years."

(Tim Reed - TheStreet)

Friday, April 21, 2017

Thursday, April 20, 2017

Norwegian Air Takes on Asian Rivals With $230 Fares to Singapore

Norwegian Air Shuttle ASA will fly from London to Singapore beginning this fall, taking on British Airways and Singapore Airlines Ltd. as it expands its long-haul budget services in Asia.

Tickets on the new route will start at 179 pounds ($230) one-way, with “premium” seats priced from 699 pounds, Norwegian said in a statement Thursday. The service will commence Sept. 28 with four weekly flights from London’s Gatwick airport and will be operated with Boeing Co. 787 Dreamliner aircraft seating as many as 344 passengers.

“Our transatlantic flights have shown the huge demand for affordable long-haul travel, so we are delighted to expand into new markets,” Chief Executive Officer Bjorn Kos said in the statement. “Travel should be affordable for all.”

Norwegian is betting denser seating and the lower operating costs of the 787 will allow it to steal passengers from costlier rivals and stimulate demand among price-sensitive travelers. The carrier has one of the industry’s most ambitious growth plans with more than 200 aircraft on order as it seeks to transfer the successful low-cost airline model to long-haul services. Norwegian will also fly Boeing’s latest narrow-body jet, the 737 Max, on routes across the North Atlantic starting this summer.


The new service between London and Singapore, a popular business route, puts Norwegian in head-to-head competition with IAG SA’s British Airways and Singapore Air -- the only two airlines currently offering non-stop flights between the cities. BA flies the route twice a day, and Singapore Air serves it four times daily. The carriers use larger Boeing 777 and Airbus A380 aircraft.

Norwegian has so far connected London with destinations in the U.S. and the Caribbean, targeting mainly leisure travelers. Its only Asian destination so far is Bangkok, which it serves from Oslo, Stockholm and Copenhagen. The latest Singapore flight could be part of a broader expansion as the company canvases locations for potential bases around the world, including plans for an arm in Argentina.

To serve Singapore, Norwegian will use its U.K. subsidiary, with planes and crews based at Gatwick airport. The unit can make use of traffic rights to destinations in Asia, Africa and South America, the company said.

(Richard Weiss - Bloomberg News)

Boeing elaborates on 777-9 design details


Boeing has published further preliminary details of the 777-9’s configuration, three years ahead of entry into service, revealing a slightly lower aircraft with an interior re-sculpted to carve out a precious 10.2cm (4in) of internal diameter.

A 79-page document posted on Boeing’s website offers the first detailed update on the larger 777X variant's dimensions since a brochure version appeared in 2015.

Boeing released both documents to help airport managers prepare for the arrival of the stretched wide-body with its extended wingspan.

Compared with the previous iteration, the update shows the 777-9’s designers have made a few minor tweaks. For example, the height of the vertical tail above the runway is about 17cm shorter, although remains nearly 1m taller than the height of the 777-300ER.

The most critical dimensions for the 777-9 remain unchanged, with a 2.9m-longer fuselage and 7m-wider unfolded wingspan compared with the 777-300ER.

The folded wingspan of the 777-9 measures 64.82m, about 2.54cm wider than the 777-300ER.

Boeing also has worked to make the 777-9 more comfortable with a standard 10-abreast layout in economy class. The 777-300ER originally entered service with a nine-abreast economy cabin, but some airlines now offer 10-abreast layouts. The 777-9 shares an external fuselage cross-section with the 777-300ER, but the internal sidewalls have been carved out by about 10.2cm.

Asset Image
(Boeing (777 airplane characteristics for airport planning document)

Boeing now lists the 777-9’s standard two-class cabin as accommodating 414 passengers, with a three-class cabin holding 349 seats.

The 777-9 is designed to fly with 7% greater useable fuel capacity than the 777-300ER, the document shows.

(Stephen Trimble - FlightGlobal News)

Pilot error blamed for fatal California U2 spy plane crash

A mistake by a pilot on his first flight in a U2 spy plane forced him and an instructor to eject from the plane while on a training mission from a California base in September, killing the instructor after his seat hit the plane's right wing, the Air Force said Wednesday.

Investigators determined that the pilot who was training to fly U2 spy planes either pulled back too fast or too quickly on his stick while learning to recover from a stall shortly after the plane left from Beale Air Force Base about 50 miles (80 kilometers) north of Sacramento, Air Force Major A.J. Schrag said.

"He probably got a little overenthusiastic," Schrag said.

That caused the plane to go into a secondary stall that forced the student pilot and his instructor, Lt. Col. Ira S. Eadie, to eject before the plane turned upside down. The $32 million plane crashed near Sutter, California.

Eadie suffered fatal injuries when his seat struck the plane's right wing, investigators found. The student pilot also suffered injuries, though he has since recovered and completed his training to fly U2 spy planes, Schrag said.

Schrag said privacy laws did not allow the Air Force to disclose the student pilot's name.

He was on the first of three "acceptance flights" that are part of the process of interviewing to be a U2 pilot, the Air Force said.

The U-2 "Dragon Lady" is a surveillance and reconnaissance plane capable of flying above 70,000 feet (21,336 meters). Developed during the Cold War to spy on the Soviet Union, the single-engine aircraft now carries high-resolution cameras and sensors to gather radio signals and other information useful to intelligence agencies and battlefield commanders.

The fleet is based at Beale, though U2 planes fly missions from other locations.

Before the crash, the Air Force said it had 33 U-2s. The U-2 is slated for retirement in 2019 as the military relies increasingly on unmanned aircraft for surveillance.

(Sudhin Thanawala - Associated Press)

Thursday, April 13, 2017

Here's a look at Boeing and Sikorsky's new gunship helicopter concept

(Lockheed Martin)

Since 1939, aerospace manufacturers Boeing and Sikorsky Aircraft have remained synonymous with dependable fixed-wing aircraft and helicopters, respectively, responsible for supplying the US armed forces with illustrious vehicles from the venerable F/A-18 Super Hornet and Air Force One to the combat-ready Black Hawk and Chinook helos.

Now, the two firms are teaming up to develop a brand new gunship for the US military: The SB-1 assault helicopter.

On April 10, Sikorsky owner Lockheed Martin posted a brief concept video detailing the company’s design for an attack craft with "long range, high speed, superior hover performance and unmatched maneuverability" to supplement the military’s helicopter fleet for decades to come.

Developed as part of the Future Vertical Lift (FVL) program under the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics, The War Zone reports that the Army is currently exploring replacement craft for both the AH-64 Apache gunship and UH-60 Black Hawk.

Here’s the backstory on the project, courtesy of The War Zone:

In 2015, Sikorsky and Boeing first announced they were teaming up to build a rotorcraft for the Joint Multi-Role Technology Demonstration (JMR-TD). This project is supposed to serve as a lead in effort for the larger, long-term FVL plan. This partnership led to the SB-1 Defiant, the unusual nomenclature standing for “Sikorsky and Boeing are greater than one.” A compound helicopter with a push-propeller and co-axial, rigid rotors, the firms boasted this new aircraft would be significantly faster than traditional helicopters, more maneuverable, more stable while hovering, and quieter.

Sure, you can’t really get a sense of those improvements in action from Lockheed Martin’s concept art, but the animation is enough to heighten any mechanophile’s anticipation.

The promotional video states that the copter will boast a cruising speed of 280 miles per hour, far outstripping the attack helos currently utilized by both the Army and Marine Corps.

The craft is reportedly meant to maintain altitude and stability even under “hot-and-high” conditions, hovering more than a mile above the ground in temperatures up to 95 degrees Fahrenheit.

Oh, and let’s not forget the guns, per The War Zone:

The proposal has a chin-turret with an automatic cannon that looks very much like the three-barrel, 20mm M197 gun on the Marine Corps’ AH-1s. As with both the AH-1 and AH-64 series, there are two stubby wings with four external stores pylons for various ordnance and two launch rails on the tips for air-to-air missiles – in this case the artist appears to have mounted AIM-9X Sidewinders – are on either side of the fuselage. In one of the frames, it appears that two of those racks may actually attach directly the chopper’s main body.

While the Army hopes to conduct flight tests of the SB-1 attack prototype by the end of 2017, that’s contingent on whether the collaboration between the two aerospace giants actually makes it, er, off the ground.

The last joint project undertaken by the two was the RAH-66 Comanche five-bladed attack helicopter, commissioned in 1991, built in 1996, and aborted in 2004 … at a cost to the DoD of nearly $7 billion.

With other certain aircraft aggressively over-budget, it’s doubtful the Pentagon will have the patience to sink time and money into another dud.

(Business Insider U.K.)

Airplane maker ATR signs $536M, 20-aircraft deal with Iran

European airplane manufacturer ATR said Thursday it sealed a $536-million sale with Iran Air for at least 20 aircraft, the latest aviation firm to strike a deal following Iran's nuclear accord with world powers.

ATR spokesman David Vargas confirmed the finalized deal for the 20 ATR 72-600s, a twin-propeller aircraft, and said Iran Air had an option to purchase another 20.

"They will definitely help Iran Air to modernize and develop regional connectivity across the country," Vargas told The Associated Press.

Home to 80 million people, Iran represents one of the last untapped aviation markets in the world. However, Western analysts are skeptical that there is demand for so many jets or available financing for deals worth billions of dollars.

Vargas declined to offer a value for the deal with Iran Air. The confirmed portion of the deal is worth $536 million at list prices, though buyers typically negotiate discounts on bulk orders. Iranian state TV described the deal as being worth about $400 million.

The deal also already has the approval of the U.S. Treasury, Vargas said. The Treasury must sign off on aircraft deals when at least 10 percent of the airplanes' components are of American origin. The Treasury could not be immediately reached for comment.

Farhad Parvaresh, the CEO of Iran Air, told the state-run IRNA news agency that the French-Italian company will deliver nine ATR 72-600s in 2017 and the rest in 2018. He said four of the aircraft will arrive within a month after signing the contract.

In February 2016, ATR signed an initial agreement to explore selling the aircraft to Iran Air. ATR is the Toulouse, France-based partnership of Airbus and Italy's Leonardo S.p.A., which specializes in regional turboprop aircraft of 90 seats or less.

The ATR deal comes on the back of the nuclear agreement Iran struck with world powers, which saw Iran agree to limit its enrichment of uranium in exchange for the lifting of economic sanctions.

That deal allowed airplane manufacturers to rush into the Iranian market.

Boeing has already made a $16.6 billion sale already to Iran Air, while its European rival Airbus signed one estimated to be worth some 22.8 billion euros ($25 billion). The Treasury has signed off on both those deals.

Chicago-based Boeing also signed a $3 billion deal earlier this month to sell 30 737 MAX aircraft to Iran's Aseman Airlines, a firm owned by Iran's civil service pension foundation. The Boeing sales represent the first major deals for an American company in Iran since the 1979 Islamic Revolution and U.S. Embassy takeover.

U.S. politicians have expressed concern about the airplane sales to Iran. President Donald Trump remains skeptical of the atomic accord overall and has threatened to renegotiate it, without offering specifics.

(Nasser Karimi and Jon Gambrell - Associated Press)

AirBridgeCargo expands Asian network with call in fast growing Taipei


AirBridgeCargo Airlines (ABC) has continued the expansion of its operations in Asia with the addition of Taipei to its list of destinations.

ABC will fly to Taipei twice per week utilizing a Boeing 747F aircraft. The new service, which was launched on April 8, will operate from Moscow Sheremetyevo every Wednesday and Saturday, returning via Hanoi in Vietnam.

Sergey Lazarev, general director ABC, said: “Taipei is a mature and stable air cargo market generating volumes close to 500,000 tonnes per annum so it is a major origin, destination and transit point for freight.

"This includes exports of electronic components, machinery, textiles as well as a diverse range of import cargoes.

"We know from listening to customers in Taipei and those in other countries with traffic to and from Taiwan that there is demand for the quality of service and network opportunities AirBridgeCargo is able to offer.

"This is why we are supporting our customers once again with our services and additional capacity in a prime market where they want to work with us.”

ABC said the addition of Taipei means it has doubled its route network for customers in the region in the last two years.

ABC also offers 747F services to and from Tokyo, Seoul, Singapore, Hanoi, Phnom Penh, Hong Kong and the Chinese cities of Shanghai, Beijing, Chengdu, Chongqing and Zhengzhou.

The expansion of operations has helped the airline boost volumes from the Asia Pacific region by 25% year on year to more than 265,000 tonnes and said it is "confident of further growth this year".


IAG Cargo freighter flight caters for pharma demand

(Cygnus Air)

IAG Cargo has launched a new dedicated freighter service between its Madrid hub and Basel to cater for the pharma market.

The cargo group, which offers space on British Airways, Iberia and Aer Lingus flights, said that the weekly scheduled service will be operated by Spanish airline Cygnus Air using one of its two B757-200F aircraft.

The new service, which flies on Sundays, has been on trial since January and IAG Cargo said it had proved popular with the pharma sector as it offers connections into the group’s Latin America network.

The group added that the service will be “a crucial support to Switzerland’s booming pharmaceutical sector, which makes up more than a third of the country’s export volume”.

It said that 74% of the goods flown out of Switzerland were on its Constant Climate pharma product.

IAG Cargo commercial director David Shepherd said: “IAG Cargo has a flexible network investment strategy where we respond as quickly as possible to customer demand.

“Our latest freighter service underlines our commitment to giving our customers the capacity and routes they need, and further highlights the strength of our industry-leading pharmaceuticals proposition.”

IAG Cargo axed an agreement with Global Supply Systems under which it leased three B747-8Fs on long-haul routes in January 2014, citing overcapacity on the routes the aircraft operated.

Since then, it has been taking space on freighters operated by others. It has scheduled deals with DHL, one of which is also dedicated, Qatar Airways Cargo and Korean Air and also buys tactically – meaning as and when it needs to – from operators out of Latin America, feeding into places like Bridgetown, Barbados and Miami.

Buying tactically allows IAG Cargo to expand and contract capacity depending on requirements.

The B757-200F aircraft used on the new service offers a capacity of 29 tonnes per flight and expands capacity on IAG Cargo’s short-haul freighter network – offered through its partnerships – by 6%.

Last week, IAG Cargo announced a new chief executive, with Lynne Embleton replacing Drew Crawley who had been in the role for just over a year.


Let Richard Branson kill United Airlines

I found this to be a very interesting read and, I hope you enjoy it as much as I did since I do agree with each point the author brought up!

Michael Carter
Editor and Chief
Aero Pacific Flightlines

Most semi-frequent travelers have their own private no-fly list—that one airline whose aggressive incompetence and casual cruelty leads them to say “never again.” Even before introducing the term “re-accommodate” into the National Registry of Corporate Euphemisms, United has been that no-go airline for me, the result of a long series of outrages beginning with the near-ruination of George Gershwin’s “Rhapsody in Blue.”

And yet, after grim Expedia searches, I continue to sporadically fly those unfriendly skies, because unlike evil rental car companies (cough *AVIS* cough), air carriers have colluded with government to shield themselves from the consumer-friendly gales of competition. Protectionist legislators have basically made it impossible for us to quit United.

Perhaps you’ve seen that graphic making the rounds, showing how mergers over the last decade have consolidated the largest 11 domestic airlines into a profitable, customer-abusing Big Five? The accompanying BuzzFeed headline is a true enough conclusion: “Airlines Treat You Badly Because They Can.” But like a lot of the how-we-got-here coverage this week, it misses one elephant in the room.

Foreign companies and individuals—think Richard Branson and Virgin Atlantic Airways—are forbidden by U.S. law from owning more than 25% of a domestic airline. That’s why Virgin America could be sold last year to Alaska Airlines over the express wishes of Virgin’s famous founder: He just didn’t have enough votes.

The differently headquartered are banned outright from servicing routes between two American cities, a practice with the sinister-sounding name of cabotage. And carriers from Singapore to the Gulf States are not only barred from competition, but subject to sneering taunts by American legacies from behind the protectionist firewall, such as when United CEO Oscar Munoz this March said that companies including the well-regarded Emirates “aren’t real airlines.”

What on Earth justifies such pre-Trump xenophobic mercantilism in our increasingly globalized world? According to North America’s Air Line Pilots Assn.: “These regulations ensure the national security of our country and the integrity of our airline industry.” Or translated into honest-ese, “These regulations ensure the job security of unionized U.S. nationals and the continued existence of poorly run U.S. airlines.”

The nexus between neglected infrastructure and national security is one of the most reliably insane areas of public policy. Recall the coast-to-coast freakout in 2006 when Dubai Ports World attempted to buy management rights to a half-dozen major U.S. ports. Or, for those of us with longer memories, the shameful panic here in L.A. a quarter century ago when the county awarded a subway-car contract to a company from (shudder) Japan.

In fact, one of the biggest worries among free-market economists about President Trump’s gestating $1-trillion infrastructure bill is that it will contain “buy American, hire American” provisions that would discourage needed investments from foreign companies and financial institutions.

The irony of America’s lagging air travel quality—including the abject lousiness of its airports, which President Trump is absolutely correct about—is that we once led the world in airline innovation. When the domestic industry was deregulated in the mid-1970s, thanks to then-Sen. Ted Kennedy, future Supreme Court Justice Stephen Breyer, liberal economist Alfred Kahn, and President Carter (yes, you read all that right), our trading partners scrambled to become more like us. Then they surpassed us.

It took a couple of decades, but eventually the European Union dismantled subsidies for national carriers, privatized a number of airports (something unheard of here), and let literally hundreds of low-cost airlines run riot. It even allowed some foreign-airline cabotage, on a case-by-case basis. The result is those annoying Instagram pics from friends who live in London, showing off that people in Europe fly everywhere for dirt cheap.

Yes, airlines on the continent come and go faster than New York restaurants. But that’s precisely the point: With real competition comes real failure, hopefully followed by bankruptcy and even liquidation, instead of American-style too-big-to-fail bailouts. How many customers must United pummel before they can Gershwin us no more?

As Marc Scribner of the Competitive Enterprise Institute put it this week: “If American consumers wish to enjoy improved service quality in air travel, they should demand that Congress repeal 90 years of anti-competitive federal law. Less regulation of air travel, not more, is the solution.”

This will be a lonely sentiment in a week when headline-chasers from Republican New Jersey Gov. Chris Christie to Democratic Maryland Sen. Chris Van Hollen elbow each other out with interventionist solutions. But if we really want to punish United Airlines—and Lord, how I’ve dreamed of this day—then letting Richard Branson and his cohort come and compete on American soil will do more to extract justice than a hundred regulators ever could.

(Matt Welch - Los Angeles Times)

Wednesday, April 12, 2017

How FedEx Corporation Makes Most of Its Money

An analysis of operating income by segment reveals much about the underlying earnings trends at the company and what to expect in the future.

How does FedEx Corporation make most of its money? That's a question worth investigating since the company's chief moneymaking segment has changed hands a few times in the past decade. Moreover, a fuller understanding of how the company operates will help investors appreciate what's happening with the investment propositions at FedEx and its main rival, United Parcel Service, Inc. Let's take a closer look.
Express just barely takes the title

A breakout of FedEx's segment operating income shows that, for the first time since 2010, the express segment was the most profitable in 2016. However, ground revenue and profit continue to rise in seemingly inexorable fashion since the last recession. In a sense, you can think of this chart in two periods -- pre- and post-recession:

Chart showing express versus ground segment income since 2005. 
Data source: FedEx Corporation accounts. Chart by author. In millions of U.S. dollars.

In the pre-recession period, the express segment was clearly the key income generator, but since the 2008-2009 recession, three key underlying trends have changed trading significantly at FedEx.
Post-recession blues

First, post-recession, the market backdrop changed with global trade failing to outgrow GDP growth in the past as countries increasingly adopted mercantilist trade policies. Indeed, the World Trade Organization has warned of increasing protectionism in the global economy.

In addition, customers at UPS and FedEx started preferring cheaper and less time-sensitive deliveries. The result of this trend is slowing growth in the more expensive delivery options in express -- total composite package yield in express is currently around $20, compared with around $8 for ground.

The end result was a relative shift in profitability toward the ground segment and away from express.
E-commerce to the rescue

Second, strong e-commerce growth has led to a marked improvement in revenue and profit for the ground operations at FedEx and UPS:

US Change in E-Commerce Sales Chart
U.S. change in e-commerce sales data by YCharts

However, e-commerce doesn't come free. UPS and FedEx have both had issues servicing e-commerce deliveries during peak season. Consequently, capital expenditure plans have been increased and ground margin has come under pressure, particularly at UPS.

These factors show up in operating margin movements. FedEx's ground segment margin has declined in recent years:
FedEx segment margin movements 
Data source: FedEx Corporation accounts. Chart by author

In addition, return on assets, measured here by segment operating income divided by segment assets, has declined in recent years for the ground segment as the ground network has been expanded.
FedEx segment return on assets 
Data source: FedEx Corporation accounts. Chart by author

All told, ground income grew strongly post-recession, but it's started to slow in recent years because of margin pressure.
Express profit improvement plan

Third, the express segment's productivity has improved since 2013, largely a consequence of the company's profit improvement plan. In late 2012, management announced a three-year plan to cut express costs by some $1.7 billion. The plan involved actions such as modernizing the air fleet, making network efficiencies, and undertaking organizational rationalizations.

These actions have resulted in a margin recovery and a more productive express network in recent years. The end result has helped express take back its position as the leading money spinner for FedEx.

A FedEx express Boeing 777 in motion.  
The FedEx express fleet has been modernized. Image source: FedEx Corporation
Looking ahead

For the next few years, management's focus will be on integrating the TNT Express acquisition, but -- in common with UPS -- it also needs to stop the decline in ground margins so it can best take advantage of burgeoning e-commerce growth. Meanwhile, a recovery in overall growth will be good for FedEx freight, and a concomitant pickup in global trade will particularly benefit the express segment.

(Lee Samaha - The Motley Fool)

Hainan Airlines to induct 96 aircraft in 2017

Hainan Airlines is expecting to induct 96 aircraft into its fleet during 2017.

These comprise of 41 Boeing 737-800s, one 737-700, 21 Embraer 190s, 16 Airbus A320s, nine 787-9s, four A330-200s, three A330-300s and a single A350. The information was disclosed in a stock exchange statement.

Some of these aircraft are expected to go to subsidiaries under the HNA Group.

The carrier is forecasting a 66.3% jump in passenger numbers this year to 78.2 million, and for aircraft movements to double to 613,800.

Flight Fleets Analyzer shows that Hainan has a fleet of 175 aircraft in service.

(Mavis Toh - FlightGlobal News)

Cathay Pacific names new CEO in leadership shuffle

Cathay Pacific parent Swire Pacific has named senior executive Rupert Hogg to replace the Hong Kong flag carrier’s current CEO Ivan Chu as part of a major leadership reshuffle.

Hogg, who is Cathay’s COO, will become CEO May 1. Chu will become chairman of China’s John Swire & Sons, where he will “play a leading role in the Swire Group’s overall Mainland China investment and development strategy,” the company said. Chu will also remain on the Cathay board as a non-executive director.

Chu was appointed CEO of Cathay in 2014 following a three-year stint as COO. The carrier has been under increasing financial pressure for several months and, in response, Chu has overseen the creation of a corporate restructuring and turnaround plan.

John Slosar, chairman of Swire Pacific and Cathay Pacific, noted that Chu “played a key role in the airline’s management during some very good times and, more recently, some difficult and challenging times.”

Hogg was widely viewed as the most likely successor to Chu. Slosar stressed that Hogg will lead the three-year transformation program, using the platform developed by Chu. Hogg will also take over as chairman of subsidiary carrier Cathay Dragon. He has “an impressive level of aviation and business experience … and brings commercial focus and a spirit of innovation” to the Cathay leadership job, Slosar said.

Other significant changes have been made to the Cathay senior leadership structure. Paul Loo, currently the director of corporate development and information technology, will become chief customer and commercial officer from June 1. At the same time, Greg Hughes will become chief operations and service delivery officer. Hughes currently is group director of components and engine services for HAECO, another Swire company.

Cathay Dragon CEO Algernon Yau will take on the role of Cathay’s director of service delivery, reporting to Hughes. As well as retaining the Cathay Dragon CEO role, Yau will be responsible for “all service delivery aspects of the airlines,” and for most of the Cathay group’s subsidiaries.

(Adrian Schofield - Aviation Daily / ATWOnline News)

Gulfstream G450 landing Incident in Salzburg, Austria

Short Final to Rwy 30 at Long Beach Airport (LGB/KLGB) on October 23, 2008.
(Photo by Michael Carter)

(Photo by / G550 Yahoo Group)

The nose undercarriage of H & S Ventures LLC Gulfstream G450 (c/n 4131) N667HS built in 2008 collapsed on April 11, 2017 shortly after it returned to Salzburg (SZG/LOWS), Austria for a precautionary landing. There were no reported injuries to the two crew and two passengers on board. The aircraft had taken off from Salzburg at 1012L en route to Bangor, Maine but there was then a fault indication (undercarriage?) and the pilot elected to return. A safe landing was made and the aircraft cleared the runway but, shortly after stopping on a taxiway, the nose undercarriage collapsed.


Alaska Airlines is shutting down Virgin America's rewards program, but with a 'bit of a bonus'

Alaska Airlines will pull the plug on the Virgin America Elevate mileage rewards program.

SeaTac-based Alaska Air Group Inc. plans to fold its new subsidiary's popular loyalty program into the Alaska Mileage Plan on Jan. 1.

Virgin frequent flyers were recently informed of the move as Alaska announced it will probably drop the Virgin America brand in 2019.

Alaska is offering Virgin America fans a bonus for activating and switching early: 10,000 miles or a $100 flight discount credit.

What matters to frequent flyers in any airline takeover are point/mileage conversion rates. Virgin America flyers will be happily surprised, says Steve Danishek, a Seattle travel industry observer and owner of TMA Travel agency.

"The ratio of 1.3 Alaska Miles for every Elevate point seems to be happily higher than anticipated, even more so as coupled with Alaska's announcement that fewer miles will be needed to reach some destinations," Danishek said. "It's a bit of a bonus."

Alaska says its Mileage Plan is the only major airline loyalty program that continues to reward a mile flown with a reward mile on either Alaska or Virgin America flights.

(Andrew McIntosh - Puget Sound Business Journal) 

Tuesday, April 11, 2017

Hawaiian Airlines Airbus A330-243 (c/n 1422) N393HA "Lehuakona"

Arrives at Las Vegas McCarran International Airport (LAS/KLAS) operating the morning flight from Honolulu (HNL/KHNL) on December 14, 2016.

(Photos by Michael Carter)

Monday, April 10, 2017

Boeing Bullish On Asia-Pacific For BBJs

Asia-Pacific is the largest market for Boeing Business Jets and will remain so for the foreseeable future.

The region now hosts a fleet of 55 BBJs of all kinds, mostly the smaller BBJ1 but including the world’s only VVIP BBJ 787 Dreamliner available for charter, operated by Beijing-based Deer Jet. That’s just over a quarter of the 201 BBJs currently in service around the world.

Greater China has nearly tripled its BBJ fleet in the last five years to 29 aircraft. “It’s been the strongest market for new and used aircraft for the last few years,” says new BBJ chief Greg Laxton, who is making his public debut here at ABACE. “Of those aircraft, about two-thirds are new and one-third pre-owned,” he says.

Laxton notes that worldwide BBJ orders now stand at 243, of which 219 have been delivered (about 18 of those are not yet in service but are being outfitted to customer specifications in completion centers). The tally includes 14 orders for the new-generation BBJ MAX; seven of those are for customers in Asia Pacific, including four in Greater China. First deliveries of “green” MAXs will be late next year, with completions taking another several months.

“A number of customers don’t want to wait that long – they want a BBJ now,” says Laxton. And that explains the strength of demand for pre-owned aircraft in China.

About 42% of pre-owned BBJ sales in the last five years have been to the China market, he notes.

In December BBJ announced the first sale of its smallest aircraft, the MAX 7, to Singapore’s Orient Global Aviation, which will use it to replace its BBJ1 NG. The BBJ MAX 7’s cabin is 76-in (1.93 meters) longer than a BBJ1 and has 800 nm more range at 7,000 nm, enabling it to connect key city pairs such as Dubai-New York that were not possible in the BBJ1. The first “green” MAX 7 will be delivered in 2022.

BBJ expects to announce at the show that it has appointed Beijing’s Ameco as an Authorized Service Center, the 10th in the world and greatly facilitating maintenance of BBJs in China.

(Aviation Week Network)

Austrian Airlines Arrives in Los Angeles

Austrian Airlines Boeing 777-2Z9(ER) (35960/607) OE-LPD "Spirit of Austria" captured on short final to Rwy 24R as she arrives from Vienna International (Schwechat) Airport (VIE/LOWW) this afternoon at 12:58pm PST.
(Photo by Michael Carter)

Austrian Airlines offers flight service to the West Coast of the USA for the first time!

Starting today, Austrian Airlines operates flights to a new long-haul destination in the USA. The largest long-haul aircraft in the Austrian Airlines fleet, a Boeing 777, will be deployed up to six times per week on flights to Los Angeles, the biggest city in California. “We are already well represented in the eastern part of the USA, operating flights to Chicago, Miami, Washington and two airports in New York. We are pleased to offer new flights to Los Angeles, and thus add the West Coast to our flight schedule for the first time in the history of Austrian Airlines”, explains Austrian Airlines Chief Financial Officer Heinz Lachinger.

Los Angeles is already the fourth new destination in the USA to be added to the airline’s route network during the last four years, along with Chicago, Newark and Miami. The million-strong metropolis is a popular vacation destination for Austrians and thus boasts extensive potential for tourism. However, Los Angeles is not only interesting for point-to-point flight traffic but also especially for transfer traffic. About two-thirds of the passengers will transfer flights at the Vienna flight hub.

The new direct flight connection from the West Coast of the USA fulfils a longstanding wish of Norbert Kettner, Vienna’s Director of Tourism: “The USA is Vienna’s biggest distant market, accounting for more than 830,000 overnight stays in the year 2016. The new flight service offered by Austrian Airlines, our most important strategic partner, will act as a driving force for the further development of accommodation numbers for both leisure and congress tourism.”

Up to 37 flights per week to the USA

Flt "AUA81" arrives at LAX following a 12hr 25mn flight sporting the carriers "Sounds of Austria" livery.
(Photo by Michael Carter)

In total, Austrian Airlines offers up to 37 non-stop flights per week to the USA in its summer flight schedule for 2017. Up to four weekly flights are operated to Miami, up to six times per week to Los Angeles, and up to seven flights each week to both Washington and Chicago. Austrian Airlines will continue to operate thirteen flights a week to the New York airports of Newark and JFK.

Austrian Airlines will only fly to Los Angeles within the context of its summer flight schedule. The flight duration from Vienna to Los Angeles at a distance of about 9,900 km is approximately 12 hours 30 minutes. The flights to Los Angeles are thus the longest in the Austrian Airlines route network. Tickets from Vienna to Los Angeles are available starting from EUR 729 for round-trip flights incl. taxes and charges. Tickets can be booked online at, by calling +43 (0) 5 1766 1000 or via travel agency.

The flights in detail:

Route Flight number Flight days Departure –Arrival (local times)

Vienna – Los Angeles AUA 081 Daily except Sundays 10 a.m. – 1:30 p.m.

Los Angeles – Vienna AUA 082 Daily except Sundays 3:05 p.m. – 12:05 p.m. (next day)

(Austrian Airlines Press Release)

Fatalities Drop but Total Bizav Accidents Increase

According to preliminary data compiled by AIN, turbine business airplane accidents worldwide claimed the lives of fewer people in the first quarter—16 compared to 25 in the same period last year. However, the total number of nonfatal mishaps increased to 21 from 12 over the comparable periods.

U.S.-registered business jets were involved in one fatal accident in each of the first quarters, both occurring under Part 91. One N-numbered business jet was involved in a serious, but nonfatal, accident in the first quarter. A second no-injury mishap in the quarter was classified by the NTSB as an accident due to the “substantial” damage that resulted. There were no reported fatal crashes of non-U.S.-registered business jets in the first quarters of 2017 or 2016.

In this year's first quarter, one accident of an N-numbered turboprop claimed two lives, compared to one crash in which seven persons lost their lives in the period last year. Four non-N-numbered turboprop accidents killed 13 people in the first quarter, compared to 16 who died in five accidents in the first three months of 2016.

No accidents or incidents were recorded for Part 91K jet or turboprop operations in the first quarter, compared to three incidents in the January through March period last year.

(Gordon Gilbert - AINOnline News)

Aviation-Loving Food Hall The Proud Bird Takes Flight on May 15 Near LAX

Flight patterns are starting to line up for The Proud Bird, the new LAX-adjacent food hall with an aviation theme. If all goes as planned, things should kick off by May 15.

The long-running Proud Bird space has been getting a massive overhaul since early 2016, but things are starting to wrap up. That’s good news for fans of the 60s-era restaurant space, and even better news for aviation geeks looking to eyeball some aircraft memorabilia. Among the proposed final details to land on site is a full Douglas DC-3 Dakota plane, as well as a Soviet-era jet fighter, and a Lockheed Model 12 (of which only 130 were reportedly ever made).

On the food and beverage front, expect a handful of stalls working a variety of “globally-inspired” menu items from within the larger compound, plus options for grabbing a drink while watching the planes come in. The cheekily-named Mile High Club will offer cocktails as well as beer and wine, and the entire 50,000 square foot space will be draped in glass so customers can get a good look at the runways beyond.

With additional private dining and corporate event space available, it’s natural to assume that the Westside Proud Bird property will become a new hotspot for corporate types and travelers alike once it opens next month. Until then, interested parties can put their name in for any number of new jobs available on property, from sous chef to banquet server.
(Eater Los Angeles)

IranAir may receive first Boeing jet sooner than planned

IranAir may get its first new Boeing jetliner a year earlier than expected under a deal to take jets originally bought by cash-strapped Turkish Airlines, Iranian media and industry sources said.

Iran had been expected to receive the first of 80 aircraft ordered from the U.S. planemaker in April 2018, but at least one brand-new aircraft is reported to be sitting unused because it is no longer needed by the Turkish carrier.

Industry sources said Boeing was in negotiations to release at least one 777-300ER originally built for Turkish Airlines, which is deferring deliveries due to weaker traffic following last year's failed coup attempt in Turkey.

Boeing said it never comments on talks with customers. The airlines involved were not immediately available for comment.

Iran's Deputy Roads and Urban Development Minister Asghar Fakhrieh-Kashan told the semi-official Mehr news agency the first Boeing 777 aircraft would reach Tehran within a month.

It would be the first new U.S.-built jet delivered to Iran since the 1979 Islamic revolution.

The long-haul 777 is worth $347 million at list prices but is likely to have been sold for less than half that, according to industry estimates.

IranAir has also ordered 100 aircraft from Europe's Airbus under a deal to lift most sanctions in return for curbs on Iran's nuclear program.

Its return to the aviation market after decades of sanctions comes at a time when airlines elsewhere are having second thoughts about purchases due to concerns about the economy and looming over-capacity among wide-body jets.

That trend has made a number of unused jets available for quick delivery at competitive prices, including three Airbus jets recently delivered to Iran, and has allowed IranAir to jump the usual waiting list of several years.

The government of pragmatist President Hassan Rouhani is seen as keen to showcase results from the sanctions deal ahead of a May election at which challengers include hardline Shi'ite cleric Ebrahim Raisi.

Aviation sources say the first aircraft were paid directly from Iranian funds, but doubts remain over credit financing needed to secure almost 180 jets still on order.

Western banks continue to shy away from financing deals between IranAir and Western companies, fearing U.S. banking sanctions that remain in force or a new chill in relations between Tehran and the West under U.S. President Donald Trump.

Boeing has stressed the benefits to U.S. jobs of the plane deals.

Fakhrieh-Kashan was meanwhile quoted on Monday as saying IranAir had reached a long-awaited agreement to buy 20 European turboprops from ATR.

Talks over maintenance with engine maker Pratt & Whitney Canada had delayed a final deal. It was not immediately clear whether the official was referring to an earlier deal for the planes or the final contract including engine overhaul.

ATR said on Sunday it was still in talks with IranAir.

(Tim Hepher and Dubai Newsroom - Reuters)

Sunday, April 9, 2017

Gulfstream G-IISP (c/n 41) N401GA

Operated by Peninsular Marine Services, this lovely example of a G-II rolls for takeoff on Rwy 30 at Long Beach Airport (LGB/KLGB) in February 1997. (Kodachrome K64 Slide).

(Photo by Michael Carter)

Alaska Air Won't Be Bailing Out Southwest Airlines and Delta in Dallas

Virgin America Airbus A319-112 (c/n 3347) N526VA "Jane" touches down on Rwy 13R at Dallas Love Field (DAL/KDAL) March 8, 2017. 
(Photo by Michael Carter)

Alaska Air has no interest in giving up Virgin America's gates at overcrowded Love Field in Dallas.

For the past two years, Southwest Airlines and Delta Air Lines have been engaged in a seemingly endless fight over gate space at Love Field, the closest airport to downtown Dallas. The dispute has been making its way through the court system slowly, but it could still be years from being resolved.

Last year, a potential solution appeared when Alaska Air acquired Virgin America, which is the only other commercial airline at Love Field, whereas Alaska Airlines flies to nearby Dallas-Fort Worth International Airport (DFW). It seemed plausible that Alaska would consolidate its Dallas-area operations at DFW, the region's main airport.

However, Alaska Air recently slammed the door on that possibility, as a high-ranking executive revealed that the company has no plans to abandon Love Field.

Southwest and Delta spar over gate space

The long-running dispute between Southwest Airlines and Delta Air Lines stems from an arcane federal law that was originally designed to protect DFW from competition. In its current form, this law restricts Love Field to having just 20 gates -- whereas DFW has 165.

Southwest Airlines has controlled 16 of those gates for many years. In 2015, it subleased two more from United Continental, which decided to stop flying to Love Field. Southwest wanted those gates so as to increase its Love Field schedule to 180 daily departures. That goal requires operating an ambitious 10 flights per day at each gate.

However, Delta Air Lines had been using one of those gates under a short-term lease for its five daily flights to Atlanta. Delta refused to leave, while Southwest said there was no room for it to stay. This situation is what precipitated the ongoing litigation.

Meanwhile, Virgin America has held on to the other two gates. After some recent schedule cuts, Virgin America has just 13 daily departures at Love Field, compared with an original plan that called for operating up to 20 daily departures there. Furthermore, these flights never lived up to Virgin America's expectations from a financial perspective.

Alaska Air doesn't want to leave

It wouldn't be crazy for Alaska Air to give up on Love Field based on this shaky track record. Doing so would potentially allow Southwest Airlines to keep its 18 gates while enabling Delta to take over the current Virgin America gates and add flights at Love Field, which it has wanted to do for several years.

However, in a recent interview with Bloomberg, Alaska Air President Ben Minicucci said: "We're keeping both for sure. We love Love Field." However, he acknowledged that the company might change its route offerings at Love Field.

Given that Alaska is staying at Love Field, it will probably want to start flying to Seattle and Portland, its two largest hubs. At some point, it could also add additional flights to San Francisco and Los Angeles and perhaps start service to San Diego, another California city where it has been steadily growing.

By contrast, Virgin America's routes from Love Field to Las Vegas, New York's LaGuardia Airport, and Washington, D.C.'s Reagan National Airport could be on the chopping block. Alaska Airlines and Virgin America don't have a particularly strong presence in any of these cities.

Virgin America has had a particularly tough time getting reasonable fares on the route to Washington, D.C. Furthermore, takeoff and landing slots at LaGuardia Airport and Reagan Airport are very valuable, so if the routes to Love Field aren't working, Alaska ought to find a better use for those slots.

The battle goes on

Flights to Love Field could be a key weapon for Alaska Air as it pursues its goal of becoming the premier airline for people on the West Coast. With more flights between Dallas and major West Coast cities on tap, it's unlikely that Alaska will ever be able to accommodate Delta at its two Love Field gates.

That means Southwest Airlines and Delta Air Lines will keep slugging it out in court for the foreseeable future. The outcome will determine whether Southwest must continue to make room for Delta at Love Field.

(Adam Levine-Weinberg - The Motley Fool)

Boeing Soars Ahead of Airbus in the Order Race to Start 2017

Boeing brought in nearly 200 net orders during Q1, whereas Airbus barely avoided putting up a goose egg for the quarter.

Over the past few years, Boeing has typically trailed its top rival Airbus in terms of bringing in aircraft orders. This has been a recurring concern for investors.

However, Boeing may be able to snap its losing streak this year. With the first quarter in the books, Boeing is far ahead of Airbus in the order race for 2017.

Boeing starts 2017 on a tear

Order activity has been slowing across the aerospace industry since 2014, driven by a combination of buyer fatigue after several years of strong orders, economic weakness in certain markets, and lower fuel prices (which made it less urgent to replace older planes). Last year, for the first time since 2009, Boeing failed to sell as many planes as it delivered.

As a result, Boeing entered 2017 with fairly modest sales expectations for the year. On the company's January earnings call, CEO Dennis Muilenberg said that Boeing would probably capture a similar number of net orders to the 668 it brought in during 2016.

So far, Boeing has had no trouble finding buyers for its planes. Last week, it reported that it received 198 net orders during Q1. This was far ahead of the 121 net orders it logged in the first quarter of 2016.

As always, the 737 family led the way, with 167 net orders: 70 for the current version and 97 for the upcoming 737 MAX. Boeing also received 15 orders for the 767 as part of the U.S. Air Force tanker program and 11 orders for the 787 Dreamliner. Most importantly, the struggling current-generation 777 won nine orders last quarter. This will help Boeing avoid any further production cuts beyond what it has already announced.

Of note, Boeing's Q1 order activity did not include the company's previously announced deal with Singapore Airlines for 39 wide-bodies. That order hasn't been finalized yet.

Airbus flops

While Boeing's Q1 order performance was all the company could have hoped for and more, Airbus had an extremely quiet quarter. In fact, as of the end of February, it had more cancellations than orders for the year.

During March, Airbus at least managed to get back into positive territory. The company ended Q1 with just six net orders year to date, consisting of nine net orders for the popular A320 narrow-body family and three orders for the A350 wide-body, offset by four A330neo cancellations and two A380 cancellations.

The A330neo and A380 cancellations were widely expected. However, they hit Airbus' two weakest products. The A380 backlog continues to shrink and Emirates seems to be the only airline truly committed to the jumbo jet. Meanwhile, the A330-800neo is down to just six orders from a single customer, making it doubtful that Airbus will proceed with development. Thus, the A330neo "family" may end up having just one member: the larger A330-900neo.

It's still early

Clearly, Boeing had a strong start to 2017, while Airbus did not. However, it's way too early for Boeing executives -- or investors -- to take a victory lap. Aircraft orders tend to come in spurts, and three months isn't a very long time. Airbus could catch up in a hurry if it reels in two or three big deals.

Furthermore, Airbus is still well ahead of Boeing in terms of its total order backlog. As of the end of March, Airbus had 6,744 unfilled airplane orders, exactly 1,000 more than Boeing.

These massive backlogs mean that Boeing and (especially) Airbus have most of their production locked in for the next decade. For now, they should focus on filling in the remaining gaps relative to their production plans. Boeing did a great job in that respect last quarter.

(Adam Levine-Weinberg - The Motley Fool)

Saturday, April 8, 2017

Southwest Airlines Boeing 737-8H4(WL) (36895/4874) N8627B

Taxies to wards a Rwy 28R departure at Fort Lauderdale-Hollywood International Airport (FLL/KFLL) on February 8, 2017.

(Photo by Michael Carter)

United Airlines Boeing 737-824(WL) (62760/6056) N77536

 Short final to

 and touchdown on Rwy 28R at Fort Lauderdale - Hollywood International Airport (FLL/KFLL) on February 8, 2017.

(Photos by Michael Carter)

American Airlines Boeing 737-823(WL) (33219/3740) N872NN

Commences it's takeoff roll on Rwy 28R, at Fort Laudredale - Hollywood International Airport (FLL/KFLL) on February 8, 2017.

(Photo by Michael Carter)

Bombardier Opens Bizjet Service Center in Tianjin, China

Officials from Bombardier Business Aircraft and Tianjin Airport Economic Area celebrated the opening of a new service center at Tianjin in northeastern China on April 7.
(Photo: Bombardier)

Bombardier Business Aircraft and Tianjin Airport Economic Area (TAEA) opened a service center at Tianjin in northeastern China on April 7. The new 95,766-sq-ft (8,500 sq m) facility features hangar space, offices and back shop areas. Maintenance, repair, overhaul and other services are available for Bombardier customers in this region, and the investment strengthens the Canadian airframer's support network for Asia.

Opening a few days ahead of the 2017 ABACE show in Shanghai, the Tianjin service center received its Civil Aviation Administration of China (CAAC) certification to support
the Global, Challenger 604, Challenger 605 and Challenger 850 series. This means the center can perform 96-month inspections for Challenger 600 series jets as well as 120-month inspections for Globals. The first inspection on a customer aircraft is under way at the facility.

“We are delighted to see the inauguration of our joint venture with Bombardier and are committed to its success,” commented Zhao Xuesen, TAEA vice president. “It shows the vitality of the Tianjin aviation industry and consolidates Tianjin’s position as an emerging aviation hub in China. Business aircraft [movements] reached 1,528 at the Tianjin Airport in 2016, a 17.36 percent increase from the previous year. With China’s growth strategy in place, a rapid expansion of the business aviation industry can be anticipated in Tianjin, in line with China’s 13th Five-Year Plan.”

The Tianjin service center joins Bombardier’s network of nine service centers, five line maintenance stations and 17 customer response team mobile units located around the world. Bombardier estimates that approximately 1,100 business jet deliveries for Greater China, South Asia and the Asia-Pacific regions will take place over the next 10 years. Currently, there are 280 Bombardier business jets based in Asia.

Lanny Schindelmeiser, general manager of Bombardier Tianjin Aviation Services Co., Ltd, commented, “The opening of the Tianjin Service Centre demonstrates Bombardier’s priority to bring top maintenance services to our Chinese customers and ensure faster access to support, closer to their base of operations. Our technicians have been trained through a comprehensive program to deliver the value-added experience Bombardier provides throughout its worldwide network.”

(Samantha Cartaino - AINOnline News)

G550 Order and G650 Approval Boost Gulfstream Hopes In China

The specially equipped Gulfstream G550 for the Beijing Red Cross Emergency Medical Center will be used for disaster relief and air rescue services.

Last month’s decision by the Beijing Red Cross Emergency Medical Center to acquire a Gulfstream G550 jet for its new medical evacuation service was a timely reminder of the growing use of business aircraft in China. The announcement came a month after the news in February that the U.S. manufacturer had achieved type certification with the Civil Aviation Administration of China (CAAC) for its latest G650 and G650ER models.

The specially equipped G550 will be used for disaster relief and air rescue services, and will be equipped for medical personnel on board to be able to perform emergency resuscitation on patient and also have easy access for examinations thanks to a bed that can be moved on tracks in the cabin. The aircraft is also being fitted with the following items of special equipment: a medical bay, a powered gurney loading system on the aircraft stairs, fold-out seats for nurses to use while caring for patients, refrigerated medical storage cabinets, crew rest berths and X-ray viewing equipment.

The Beijing Red Cross Emergency Medical Center was established in 2010 and currently has more than 1,000 staff. The G550 will join its existing fleet of two helicopters and a Dassault Falcon 2000LX that was delivered in November 2015. It also has three hundred ambulances.

The G550 can fly non-stop from Beijing to New York in just over 13 hours at Mach 0.83, or from Beijing to London at Mach 0.85. More than 500 of the aircraft are in service worldwide.

“The G550’s tremendous performance, outstanding cabin environment and interior flexibility are ideal for medevac missions,” said Scott Neal, senior vice president, Worldwide Sales, Gulfstream. “We are committed to working with customers to deliver an aircraft that exceeds their requirements, and this uniquely tailored G550 is no exception. The aircraft’s customizable cabin will serve as an example for future programs.”

On February 16, Gulfstream announced that its G650 and G650ER ultra-long-range twinjets have received Chinese type certificate validation, confirming the authorization previously given by the FAA, and removing the last barriers for an aircraft to be registered in China. The approval marks the 26th country approval for the G650 and the 16th for the G650ER.

“The G650 and G650ER demonstrate real-world capability that our customers value,” Neal commented. “As business aviation needs in the Asia-Pacific region continue to increase, we are pleased to offer our customers in China the safety, performance and reliability [of] the G650 and G650ER.”

At Mach 0.85, the G650 offers a range of 7,000 nm, while its longer-legged G650ER sister can travel 7,500 nm. In February 2015, the G650ER set two city-pair speed records, during a one-stop, around-the-world trip, traveling 6,939 nm from White Plains near New York City, to Beijing at Mach 0.87, and a 6,572-nm return from Beijing to Gulfstream’s headquarters in Savannah, Georgia, at Mach 0.89.

Gulfstream Growth In China

Today there are more than 180 aircraft Gulfstream aircraft based in Greater China (including around 60 in Hong Kong), which is more than nine times the number a decade ago. Across Asia, the number of Gulfstreams based in the region is now more than 300.

The manufacturer has made significant investments in the country, where it now employs more than 75 people and has offices in Beijing, Hong Kong and Singapore. In November 2012, it opened China’s first factory-owned service center in Beijing, boosting its product support capability for the region, which also is served by eight field service representatives in Asia (two in mainland China, four in Hong Kong, one in Singapore and one in India). Around $54 million worth of spare parts are positioned in Beijing, Hong Kong and Singapore.

“We see a mix of private individuals, corporations and charter operators using our aircraft in China,” Neal told AIN. “The majority of these customers fly our large-cabin Gulfstream G550, Gulfstream G650 and Gulfstream G650ER due to their tremendous range and speed, which allow them to fly from China to Europe, Africa or North America nonstop.”

According to Neal, China has made “significant strides” in facilitating the expansion of business aviation, including infrastructure improvements at airports and easing of airspace restrictions at lower altitudes. “We hope those trends continue, allowing China’s business aviation industry to see success through continued enhancements to the country’s aviation infrastructure, the possible easing of airspace regulations and the potential for improved access to training for pilots, technicians and mechanics,” he commented.

Gulfstream’s optimism about growth prospects in the Asian market is largely based on expected sales success for its new G500 and G600 long-range, high-speed jets, for which initial deliveries are, respectively, due to begin later this year and in 2018. Both feature wide cabins, improved fuel efficiency (from their Pratt & Whitney PW814GA and PW815GA engines) and Symmetry flight deck, including new active control sidesticks.

Both new aircraft offer a high-speed cruise of Mach 0.90 and a maximum operating speed of Mach 0.925. The G500 will be able to fly 5,000 nautical miles at Mach 0.85 or 3,800 nautical miles at Mach 0.90, enabling high-speed trips from London to New York or Dubai. The G600 has a range of 6,200 nautical miles at March 0.85 and a 4,800 nautical-mile range at Mach 0.90 that will enable high-speed flights from New York to Moscow or Sao Paulo.

The Symmetry flight deck uses 10 touch-screen control panels. This approach greatly reduces the number of switches in the cockpit, reducing pilot workload and making the aircraft more intuitive to fly.

Any movement of the active control side sticks by the pilot in command of the aircraft is seen and felt by the non-flying pilot on the opposite side of the cockpit. According to Gulfstream, this makes operations significantly safer by improving situational awareness and coordination between the crew and also improves efficiency.

The most recent development in the certification program for the new aircraft is that the second G600 flight-test aircraft completed its first flight on February 24, spending 4 hours and 26 minutes in the air. The aircraft reached a maximum altitude of 51,000 feet and a top speed of Mach 0.87, signaling Gulfstream’s confidence in the aircraft performance and the investment it has made in extensive ground testing. The two G600 test aircraft have logged more than 200 flight hours.

The five G500 test aircraft, including a fully outfitted production aircraft, have surpassed 2,360 flying hours over nearly 600 flights. We’ve completed development testing; company testing is under way; and FAA certification testing has started.

(Charles Alcock - AINOnline News)

G550 Gets Facelift at Duncan Aviation

The G550 has been in the client's fleet for 12 years, and the Duncan refurb gives it a modern feel.
(Photo: Duncan Aviation)

Duncan Aviation recently refurbished a G550 with a new interior, CMS upgrade and exterior paint scheme, all performed during scheduled maintenance on the 12-year-old jet, which Duncan had helped the owner purchase when new. “This serial number was a top performer in our client’s fleet, so we gave it a facelift and kept it flying,” said completions/modifications sales manager Nate Klenke.

Duncan Aviation lead designer Rachael Weverka incorporated stylized design elements using the existing panels and structure to help meet the client’s “conservative” budget. A client representative was on site at Duncan’s facility in Lincoln, Neb. throughout the three-month project, attending daily team meetings and having access to every Duncan Aviation employee who touched the aircraft. “We like to partner with our clients on these complex projects and be transparent throughout the entire process,” said Klenke.

(James Wynbrandt - AINOnline News)

The little airport that's getting crushed by Trump

For most people who live in Palm Beach County, Florida, the stringent security that protects President Trump during his visits to Mar-a-Lago is a manageable inconvenience.

They brace for heavier traffic. They review detour routes. They leave early to make dinner reservations.

But one corner of the county takes Trump's frequent weekend trips far harder than the rest.

At Lantana Airport, a Trump visit isn't just a minor pain. It's a potentially budget-breaking event.

"When he's here, we can't fly," said Marian Smith, the owner of Palm Beach Flight Training, which operates at the airport. "We're totally grounded. We can't even use our offices here."

Lantana Airport is about six miles southwest of Trump's private club on the island of Palm Beach. That is within the 10-mile zone that is subject to the strictest flight rules imposed by the federal government when the president is in town.

According to protocol, no flight training of any kind is allowed at the airport while the president is in town. The rules also ban helicopter tours, airplane rentals and other charter flights.

Trump himself lands in Air Force One at nearby Palm Beach International Airport, which is far bigger and can absorb a presidential visit without much disruption.

But tiny Lantana essentially becomes a ghost town.

Mounting losses

The two dozen companies that operate at Lantana Airport have lost more than $720,000 since Trump began taking weekend visits while in office, according to data compiled by Representative Lois Frankel, a Democrat who represents the Palm Beach area.

Flight schools like Smith's have lost at least $70,000 in total revenue, according to Frankel. Sightseeing businesses are out $30,000.

The regulations are also hitting aircraft maintenance and fuel supply shops like Stellar Aviation, which Frankel said lost a $440,000 contract when a helicopter company moved to another airport that isn't affected by the restrictions. Jonathan Miller, the CEO of Stellar Aviation, did not respond to requests for comment from CNNMoney.

Cathy Milhoan, a spokeswoman for the Secret Service, said the agency has met frequently with Palm Beach County business owners and government officials since the election.

"We've tried to be as accommodating as we possibly can while still maintaining our security protocols," Milhoan said. But she added that "there's no plans right now to adjust what's in place."

A "big imposition"

Palm Beach County Mayor Paulette Burdick said the county doesn't blame the Secret Service for doing its job. But she said the frequency of Trump's visits has been a concern.

"I anticipated that the president would come down to the Palm Beaches, where he has a winter residence," she said. "I did not expect that he would be down here nearly every weekend since his presidency."

Trump's Thursday trip to Mar-a-Lago with Chinese President Xi Jinping will be his sixth visit to Palm Beach since he took office in January. His past visits have all come on weekends in the middle of what officials say is their peak tourism season.

"It's a big imposition," said Smith, the owner of the flight training shop. She said she canceled 63 flights on President's Day weekend when Trump visited Palm Beach. She has invested in another office in Fort Lauderdale to accommodate some clients.

That decision brought its own challenges. The Fort Lauderdale office, which is a 40-minute drive south of Palm Beach County, costs an extra $1,000 per month, Smith said. She estimates she's lost more than $60,000 in revenue -- a sizable chunk of the $2 million she takes in every year.

The other problem, Smith said, is the short notice the airport receives. She said she generally finds out about Trump's visits only a couple of days before he comes down.

"We have no idea when he's coming here," she said. "We have no idea how much it's going to affect us."

Creating workarounds

Lantana Airport can still allow some aircraft, like private planes, to land on its field when the presidential restrictions are in effect.

But there are cumbersome rules: Those planes have to land first at another airport that has TSA agents and can carry out inspections. And a private jet can't take off from Lantana until the president leaves town.

Mike Simmons, a county airports official, said the county has even looked at installing a temporary control tower at Lantana in hopes of getting the government to relax its restrictions. Those plans haven't gone anywhere.

So the little airport is finding workarounds. Dan Crowe, the president of a helicopter flight training and charter service at the airport, said his flight training business has to continue because of contract obligations.

So when he finds out about a Trump visit, Crowe rents a van and hauling equipment to take his planes and customers about an hour west, to an airport that falls outside the restricted zone. Each trip costs him an extra $2,000.

But he can't reschedule other activities, like his charter flights. If a couple is coming to Palm Beach to get married and wants to schedule a scenic tour of the area, Crowe said they're well aware that the trip could be a gamble.

"They're not going to change the date they are getting married," Crowe said. "We always make them aware of this possibility, and again, sometimes we could be losing business because of it, because they may decide, well, 'I'm not even going to take that chance.'"

(Jill Disis - CNN Money)