Airbus talks with Qantas Airways about a plane that can fly 20 hours non-stop from Sydney to London are centered around the A350-900ULR rather than reviving a shorter A350 variant, an executive at the manufacturer said on Thursday.
The comments by Airbus's Iain Grant, head of sales for the Pacific region, could quash industry speculation the European planemaker may revive the smaller A350-800, which had been put on ice after poor sales.
Qantas had publicly challenged Airbus and its U.S. rival Boeing Co in August to boost the range of the A350 and 777X models to allow it to complete "the last frontier" of commercial flying by 2022.
The speculation about the A350-800 revival arose after Qantas CEO Alan Joyce told industry publication Flightglobal this week that Airbus was "saying they may" consider a shorter-fuselage variant if the A350-900ULR (ultra long range) could not meet mission requirements.
Airbus's Grant, however, said at a media briefing on Thursday that talks with Qantas remained about the A350-900ULR, the same variant that Singapore Airlines will receive next year to restart non-stop Singapore-New York flights.
"We are bringing in our A350-900ULR which is going to do the Sydney-London mission and we are very comfortable with that and we will continue to work with them to meet their requirements," he said of the Qantas challenge.
A non-stop Sydney-London route that is three hours shorter than current flights involving stops would allow Qantas to charge a premium and differentiate its product from the around two dozen other airlines plying the so-called Kangaroo route with stop-offs in Singapore, Dubai and Hong Kong.
In a speech to the Royal Aeronautical Society in London on Monday, Joyce said both manufacturers had reacted positively, but the ability to fly the aircraft with a full commercial load remained a stretch. Qantas has said 300 seats would be ideal to give it the highest possible revenue and fleet flexibility.
"The aircraft can do it today, both the 777 and the A350, but we believe it can't do it with full payload," he said, according to an audio recording posted on the organization's website. "We do believe that more work is needed on both aircraft to get it there."
Joyce in August said the airline expected to evaluate the A350 and 777X for 12 months before issuing a formal tender for an order, with the number of aircraft having not yet been decided.
Airbus has incorporated an automatic emergency descent function into the newly-certified A350-1000, which it intends to introduce into the smaller -900.
The function is designed to simplify a rapid descent to a safe altitude.
A350 chief engineer Alain de Zotti says the -1000 will be able to "slightly deviate" from the flight plan, if the system is activated, and leave its cruise altitude.
As well as executing the high-speed maneuver the aircraft will automatically notify air traffic control of the action.
FlightGlobal exclusively revealed in 2009 that an emergency descent feature was being considered for the A350, which would automatically initiate an unaided descent if the crew failed to respond to a cautionary alert – possibly indicating incapacitation from depressurization.
This had been conceived as a method of allowing the aircraft to descend to around 10,000ft, the typical safety altitude in the event of loss of cabin pressure.
Full details of the system's development on the A350-1000 have yet to become clear but de Zotti says it is amounts to an avionics software adaptation to "support" an emergency descent.
He indicates that its activation involves a push-and-pull input in order to "make sure you don't make a mistake".
Airbus is already intending similarly to offer the system on the A350-900 and de Zotti says it can be retrofitted to the in-service fleet.
De Zotti says the European Aviation Safety Agency's certification of the -1000 will provide other opportunities to enhance the A350 with "additional capability".
He says that, over the course of testing, the airframer has "identified some margins", in systems such as the landing-gear. While the analysis is not finalised, de Zotti states that Airbus should be able "soon" to provide enhancements to the -1000.
De Zotti declines to elaborate, but Airbus has previously pointed to a increased-weight A350-1000 with a maximum take-off weight of 311t, some 3t higher than the current aircraft.
The Rolls-Royce Trent XWB-97 engines have performed well during the certification campaign, he says.
"Our challenge was to work in parallel with the testing on the ground," adds de Zotti, ensuring that any ground-work findings could be smoothly addressed by the flight-testing schedule in order to keep the certification on track.
The XWB-97 is a higher-thrust engine than that originally conceived for the A350-1000, because the aircraft underwent a redesign in 2011 to appeal to customers seeking improved performance.
EASA's type certificate for the -1000 lists the engines as offering net take-off thrust of 97,000lb (431kN) and maximum continuous thrust of 83,100lb.
The extended twin-engined operations (ETOPS) capability of the -1000 has still to be confirmed.
De Zotti says the certification campaign has undertaken ETOPS-related activity, such as long-range flights and engine shutdown tests, and that the aircraft will enter service with "some" ETOPS capability, while work progresses on expanding the limits.
EASA certified the A350-900 on 30 September 2014 and subsequently approved the variant for 180min and beyond-180min ETOPS two week later on 14 October.
Qatar Airways is set to take delivery of the first A350-1000 before the end of this year.
De Zotti says the -1000 is an "elegant and very efficient aircraft" and EASA certification marks a "special day" for the development team, adding: "It's not something that happens very often."
This image, provided by the International Airlines Group (IAG), shows the paint scheme planned for the company's start-up budget airline: Level. (Photo: International Airlines Group (IAG))
Level, the long-haul budget airline launched by British Airways’ parent company, will make Paris its second European base. At the same time, British Airways' said it will pull the plug on its higher-end OpenSkies brand that had offered New York flights from Paris.
At Level, the carrier will add non-stop flights from Paris Orly Airport to both Newark Liberty and Montreal, offering fares as low as $149 each way. In addition to the New York and Montreal routes, Level will fly from Paris Orly to the French Caribbean destinations of Guadeloupe and Martinique.
Level also announced it will begin flying to Boston from its existing hub in Barcelona, also with fares starting at $149 each way.
Level’s North American flights will be flown on Airbus A330-200 aircraft that seat 293 passengers in standard coach and 21 in premium economy. Level's four weekly Newark flights begin Sept. 4 while three weekly flights from Montreal start July 2. The Boston-Barcelona service begins March 28, with a maximum of three weekly flights during the peak summer schedule.
The new routes mark the first expansion of Level, a standalone budget unit launched in June by the International Airlines Group (IAG) that counts British Airways, Iberia, Aer Lingus and Spanish low-cost carrier Vueling among its holdings.
“LEVEL’s Barcelona operation has been an incredible success,” IAG CEO Willie Walsh said in a statement. IAG uses all capital letters in its branding for Level.
“Customers love it and LEVEL will be profitable this year,” Walsh added. “Barcelona was always a first step and today we’re delighted to launch flights from our second European city with four exciting new routes from Paris.”
IAG is looking to Level to help it compete with a new wave of upstart European low-cost carriers – notably Norwegian Air, which has expanded with great speed in the U.S. market. Norwegian has added dozens of new routes between Europe and the USA, including some from London – the key market for IAG’s British Airways. Norwegian’s fares on its routes from the U.S. Northeast have occasionally dropped below $70 one way for flights to Ireland and the United Kingdom.
But the growth of Level in Paris also appears to spell the end of British Airways’ OpenSkies unit that currently offers flights between Paris and New York on planes configured mostly with business-class and premium-economy seating. OpenSkies’ Boeing 757 and 767 planes include only a few rows of standard coach seating.
Now, IAG has announced the attempt to operate an airline skewed toward higher-end seating will end by the third quarter of 2018.
“The OpenSkies brand will cease to operate at the end of next summer and all its staff will operate LEVEL flights,” IAG said in its statement.
As for IAG's battle against Norwegian, press reports out this week suggest the company is closing to securing a number of landing slots that now-defunct Monarch Airlines held at London's Gatwick Airport. Gatwick has become one of Norwegian's busiest hubs, including for flights to the United States.
With those slots, analysts suggested IAG could choose to strengthen Level as it continues to push back against Norwegian.
“To date (IAG) has been taking the fight to Norwegian at Gatwick using its BA brand... Level could offer an alternative brand in this battle,” the Ireland-based analyst firm Goodbody said in a research note quoted by Reuters.
“IAG would be substantially strengthening its hand by further segmenting its offering on North Atlantic routes out of Gatwick, with this seen as potentially posing a serious challenge to Norwegian long-haul ambitions," the note added.
The discontinuation of OpenSkies' flights from JFK also raises the prospects of what British Airways might do with its slots there.
For now, "it’s too early to say," an IAG spokeswoman said when asked what British Airways might do with them. For now, OpenSkies JFK flights will continue through summer 2018.
Cessna on Tuesday unveiled an all-new design for a small freighter and passenger aircraft, dubbed the SkyCourier.
FedEx Express has agreed to buy 50 of the flying delivery trucks, adding roughly one per month for four years, and holds options for 50 more. The global delivery company is rapidly modernizing its fleet of small planes to stay ahead of competitors like Amazon, which are trying to fly and deliver more orders themselves.
FedEx, whose planes crisscross the globe with your packages, operates one of the largest aircraft fleets on the planet.
But its enormous freight aircraft can't pickup and deliver in every community, so the company uses a feeder network of smaller planes to get parcels closer to their final destination, where they can be delivered by ground transportation.
With a top speed of 200 knots (230 miles per hour), the SkyCourier will be able to haul 6,000 pounds of cargo as far as 900 nautical miles. That range would enable FedEx to fly packages from its main hub in Memphis to locations as far off as North Dakota, New Mexico, Connecticut or even the Caribbean.
While the design is all new, the SkyCourier isn't the most high-tech plane around.
Cessna is using long-proven engines and non-computerized pilot controls to keep development costs down. And the aircraft gets by without some of the standard features of larger planes like retractable landing gear. That saves weight and allows the aircraft to operate in more rugged conditions.
The body of the plane is designed to fit three specially shaped containers that will slot directly into the belly of larger freight airliner to speed up airport connections.
The SkyCourier will fly first as a freighter, but the aircraft also comes in a model designed to carry up to 19 passengers and two crew.
The new planes be delivered to FedEx starting in mid-2020.
Cessna, which is a unit of Textron, didn't immediately respond to a request for further comment.
Air Canada is pushing ahead with its aggressive U.S. expansion, announcing six Air Canada Express routes and three new destinations.
The cities being added to Air Canada’s route map are Omaha, Providence and Sacramento. Air Canada will connect Omaha and Providence to its Toronto hub while Sacramento will be served from the company’s hub in Vancouver. (Scroll down for full schedule details)
The three other routes included in Air Canada’s announcement are San Francisco-Edmonton; Montreal-Baltimore/Washington (BWI) and Montreal-Pittsburgh.
From San Francisco (SFO), the Edmonton flights will give Air Canada a total of five destinations. It already flies from SFO to Calgary, Montreal, Toronto and Vancouver. From both BWI and Pittsburgh, Montreal will augment existing Air Canada service to Toronto Pearson.
"We continue to strategically expand our already extensive North American trans-border network to offer the only services from Canada to Sacramento, Omaha, Providence, and flights from additional Canadian airports to Baltimore, Pittsburgh and San Francisco," Benjamin Smith, Air Canada’s president for passenger airlines, said in a statement.
"As the largest foreign carrier serving the USA, we are pleased to offer customers even more non-stop travel choices between Canada and the US, as well as the ability to conveniently connect onward through our extensive global network at our Canadian hubs on North America's Best Airline as rated by Skytrax,” Smith added.
The new U.S. routes come as Air Canada is becoming increasingly global in its ambitions. Since 2015, Air Canada has announced dozens of new routes to international destinations such as Algiers, Algeria; Berlin; Bucharest, Romania; Prague; Casablanca, Morocco; Mumbai; Brisbane, Australia; Zagreb, Croatia; and Marseille, France, among others.
But Air Canada’s most aggressive expansion during that time may have come on routes to the United States. A series of expansions during the past two years has greatly expanded the carrier's presence here, which the airline is counting on to help feed its burgeoning overseas schedules from its Canadian hubs.
“To many of our customers in the United States, we’re this little secret that nobody knows about; this airline north of the border that actually flies internationally,” Air Canada’s Smith told Today in the Sky earlier this year. “If you want to go to Europe or Asia, you’ve got to fly over Canada if you’re originating or ending in the U.S. That puts us in a very privileged position to offer connections.”
Scroll down for the launch and schedule details for the six new routes announced Wednesday (Nov. 29):
Baltimore/Washington-Montreal: Begins May 17, year-round service. One daily round-trip flight will be operated by Air Canada Express on 50-seat Bombardier CRJ regional jets.
Omaha-Toronto Pearson: Begins May 1, year-round service. One daily round-trip flight will be operated by Air Canada Express on 50-seat Bombardier CRJ regional jets.
Pittsburgh-Montreal: Begins May 17, year-round service. One daily round-trip flight will be operated by Air Canada Express on 50-seat Bombardier CRJ regional jets.
Providence-Toronto Pearson: Begins May 17, seasonal for the summer schedule. One daily round-trip flight will be operated by Air Canada Express on 50-seat Bombardier CRJ regional jets.
San Francisco-Edmonton: Begins May 1, year-round service. One daily round-trip flight will be operated by Air Canada Express on a mix of 75-seat Bombardier CRJ 700 and 76-seat Bombardier CRJ 900 aircraft.
Sacramento-Vancouver: Begins May 17, year-round service. One daily round-trip flight will be operated by Air Canada Express on a mix of 75-seat Bombardier CRJ 700 and 76-seat Bombardier CRJ 900 aircraft.
Johannesburg-based Airlink, the largest regional airline in southern Africa, and Cape Town-based Safair, parent of LCC FlySafair, have entered into a merger agreement under which Safair will be acquired by Airlink.
Safair is wholly owned by Dublin-based ASL Aviation Holdings, which will become a minority shareholder in Airlink following the merger.
Airlink, FlySafair and Safair’s other businesses, including humanitarian aid and cargo flights, will retain their brands, aircraft fleets and management teams after the merger, which the companies said would not result in any job losses. The two companies will submit their merger plan to South Africa’s Competition Commission Nov. 28 for approval and anticipate a decision during the 2018 first quarter.
Airlink CEO Rodger Foster said in a statement that the merger is being pursued to take advantage of “opportunities to reduce our combined costs, position ourselves for growth while at the same time increasing connectivity.” He added: “Our combined networks will enable us to connect 37 destinations in nine southern African and Indian Ocean countries and St. Helena. This will stimulate and enable trade, tourism, economic growth and social development in those markets we serve.”
Safair CEO Elmar Conradie said the merger “will create economies of scale that will enable both airlines to share costs, optimize assets and remove systems duplications.”
Airlink operates a fleet of nearly 60 aircraft including Embraer E190s, Avro RJ85s, ERJ 135LRs, Jetstream 4100s and Cessna 208B Grand Caravan EX aircraft. Earlier this year it took delivery of an E190, the first of 13 E190/E170s it has on order; those E-Jets will eventually replace all of the carrier’s 12 Avro RJ85s.
FlySafair operates a fleet of 11 aircraft, a combination of Boeing 737-400s and 737-800s.
Much of Airlink’s business is providing feeder traffic to South African Airways (SAA), which owns a 2.96% stake in the regional carrier. “The Safair purchase will not affect Airlink’s existing SAA franchise partnership, which continues to deliver traffic and business to SAA and Airlink,” according to a joint Airlink/Safair statement announcing the merger.
The companies said additional details of the merger will be released after the Competition Commission makes a decision on the proposed transaction.
Lufthansa mockup of new business cabin, to be rolled out from 2020. (Lufthansa)
Lufthansa has given initial information about its new business class that will roll out from 2020, beginning with its new Boeing 777Xs.
Lufthansa ordered 34 777-9Xs in September, 2013, with deliveries anticipated between 2020 and 2025.
The Star Alliance carrier said the new seat will offer a lie-flat bed that extends up to 86.6 inches (220cm) and a design that allows passengers to sleep on their sides. It also offers greater personal privacy, more storage compartments and workspace, and a configuration that will give all business-class passengers direct access to the aisle.
An Irish aircraft leasing company is creating its own airline because it can’t find anyone to borrow its A380 superjumbos.
Dublin-based Amedeo counts eight A380s among its fleet, and has a further 20 on order from Airbus, but such is the lack of interest in the world’s largest passenger plane that it has been unable to renew its leases, or find new customers, despite months of negotiations.
So it has come up with a novel solution: launching its own A380-only airline. According to Mark Lapidus, Amedeo’s chief executive, the new airline’s business model will see it offer seats to existing carriers, or to potential non-traditional arrivals such as Airbnb. Passengers would buy their ticket through another company, while Amedeo would operate the flight, using its own cabin crew but tailoring the service to suit the client.
“Joint ventures and codeshares are making passengers feel accustomed to buying tickets with one [airline] but flying with another,” Mr Lapidus told The Financial Times. He added that Amedeo would apply for an air operator’s licence next year.
The growing collection of low-cost airlines offering long-haul flights, such as Norwegian, WOW Air, Level and Air Asia X, would be obvious targets for Amedeo. Mr Lapidus said it was in early discussion with a number of possible customers, including non-aviation firms like Airbnb who are looking for a simple way to enter the market.
The 18 most important aircraft of all time
In January, Mr Lapidus said the A380 needed “disruptive” airlines to secure its future, citing Norwegian, and suggested that the model was a natural fit for budget airlines willing to squeeze in more economy class seats. While the A380 is certified to carry up to 868 people, most operators use a two- or three-class seating configuration which means it carries far fewer in practice. On some flights, Emirates, for example, carries 399 economy class passengers, 76 in business class and 14 in first class, for a total of just 489.
“When the A380 is properly configured with 600 to 700 seats it beats the economics in terms of unit costs of anything flying,” he said at the time.
In numbers | Who operates all the A380s?
Whether the proposal can save the A380 remains to be seen. The model hasn’t won a new customer in two years and at the Dubai Airshow earlier this month, Emirates, its biggest client, backtracked on an expected order for 38 of the superjumbos (it bought 40 Boeing 787-10s instead). Just days later Singapore Airlines grounded and stored one of its A380s after just 10 years of use.
According to an unofficial account, the retiring Airbus commercial aircraft salesman John Leahy is to be replaced by Eric Schulz, the head of civil engines division at Rolls-Royce, Reuters reports.
The initial announcement on Leahy’s retirement, which is foreseen in January 2018, pointed to Kiran Rao, Airbus’ executive VP of strategy and marketing, to be the successor of the retiring sales legend. However, now it appears that there are more players in the field, as Reuters reports Leahy’s successor to be chosen between two names – the head of Rolls-Royce division Eric Schulz and Christian Scherer, an executive at ATR. Despite Scherer’s ties to Tom Enders, Airbus CEO, Schulz is currently seen as the more likely option.
During his career at Airbus, Leahy amassed deals for more than $1 trillion. The sixty-six-year-old joined the aircraft manufacturer in 1985 and was appointed as the company’s chief commercial officer in 1994. At his position, Leahy outlasted five Airbus CEOs and seven sales chiefs from rival Boeing.
Often called one of the industry’s most prolific salespeople, Leahy significantly contributed to the increase of the company’s market share. When appointed as the sales chief, he set the goal of 50% market sales, which the company achieved in 2000. In the beginning of his term in 1994, Airbus’ market share was 18%.
Leahy was also a key player in the launch of the A320neo (New Engine Option) family, which has become the fastest selling aircraft program in aviation history. He was also instrumental in the launch of the A350 XWB family as well as the A330neo.
Leahy holds an MBA from Syracuse University with a concentration in Finance and Transportation Management and a BA from Fordham University with a dual major in Communications and Philosophy. He is also a licensed multi-engine commercial pilot and a former flight instructor.
The Russian Ministry of Industry and Trade is considering the possibility of a partial transfer of the MC-21 and SSJ100 aircraft production abroad, if there is a larger order for these types of planes, RNS informs. The Russian Ministry stated that it will not disclose the details of possible deals with another state until it reaches agreements with potential aircraft customers.
“The partial localization of aircraft production or the establishment of an extensive competence in aircraft maintenance in another country may be an attractive offer when there is a need for a large number of aircraft in this country, ” the Ministry of Industry and Trade reported.
As for now, the Russian government is working on the promotion of Russian civil aircraft to those markets where there is a demand for them.
The Irkut MC-21 is a Russian single-aisle twinjet airliner with a capacity of 132–163 passengers in two classes produced by Irkut Corporation. The first MC-21-300 aircraft took off in May 2017. As for now, it had 175 orders.
During theWings of the Future aviation forum on November 1, 2017, Vice-President of Irkut Corporation for marketing and external relations Kirill Budaev confirmed that Irkut Corporation is planning to produce 1000 MC-21 planes until 2037 as “there's a completely clear trend that passenger capacity is increasing over the next 20 years.”
The Sukhoi Superjet 100 is a fly-by-wire twin-engine regional jet. The aircraft was designed by the Russian manufacturer Sukhoi and has a capacity to accommodate 98 passengers. Its maiden flight was conducted in May 2008. In April 2011, the Superjet 100 took its first commercial passenger flight from Yerevan to Moscow.
Despite sitting atop a duopoly enjoying the longest, uninterrupted run of annual growth in history, Airbus and Boeing executives seem gripped by a heightened sense of healthy paranoia these days.
But it's not the likes of Comac, Irkut or Mitsubishi that seem to arouse the most concern in the corporate suites of Seattle and Toulouse. After decades of accumulated business wisdom, Airbus and Boeing know how to compete with that sort of external threat.
Rather, the paranoia seems focused in a different direction: namely, the 20-something software coder in a start-up somewhere in Palo Alto, Austin or Hyderabad, with a vision and an algorithm that in a decade could possibly change the way people move themselves or their belongings by air. Ads by ZINC
In response, Airbus and Boeing are pouring financial resources into engaging and, perhaps, mitigating not a short-term competitive threat, but a long-term disruptive menace.
In mid-2015, Airbus established a venture capital fund in California's Silicon Valley called A3 (pronounced "A cubed"), luring former Google and Defense Advanced Research Projects Agency (DARPA) executive Paul Eremenko to lead it.
A year later, Eremenko – who strictly adheres to Silicon Valley's business uniform of T-shirt, jeans and designer sneakers – became chief technology officer of Airbus Group, while A3 continues to develop potential breakthroughs, such as a four-seat, vertical take-off and landing air taxi and a new concept for modular interiors for airliners.
Nearly two years later, it was Boeing's turn to make a move. The company announced the creation of the HorizonX business unit and venture capital fund in a 5 April news release, which also revealed the fund's first investment in a Seattle-based hybrid-electric aircraft start-up called Zunum Aero.
HorizonX vice-president Steve Nordlund met a group of reporters at the Dubai air show earlier this month and explained how the new business unit fits into the company's strategy and organization – and how it co-exists with relatively large units such as Phantom Works and Boeing Research and Technology.
PLANES, TRAINS AND AUTOMOBILES
Boeing's strategy remains focused on aerospace, but its recent foray into start-up investments was driven by the automotive sector.
Specifically, the business world's attention was caught by the rise of Tesla from obscure start-up in 2003 to the fourth most valuable automobile manufacturer. Protected by a high degree of technical complexity and barriers to scaling up production, aerospace manufacturers are often considered relatively safe from such a disruption.
But Tesla's ability to challenge several of the world's largest manufacturing companies convinced the aerospace world that new technology and business models can put any industry at risk of severe disruption.
"One of the reasons we stood up HorizonX is you see what's going on in the automobile industry. Frankly, a lot of the large automobile companies were caught by surprise," says Nordlund.
Tesla's rise was made possible by the confluence of three forces, he says. The first was the ascendance of Tesla's visionary new product. In 2003, it was still normal to laugh at the idea of making a commercially viable electric car. Second, new business models emerged, such as ride-sharing services, that disrupted the automotive industry's normal customer base. Finally, manufacturers witnessed a change in consumer behavior, as the millennial generation became teenagers and celebrated independence with smartphones instead of cars.
It took 14 years for Tesla to grow from start-up to a behemoth with a market value of nearly $53 billion. Could Boeing face a similar challenge in 14 years? The answer, according to Nordlund, is "Unlikely" – but only if you consider Boeing's traditional business model and products, like the single-aisle 737 family.
"I think the way I look at it is to broaden it," he says. "Will the single-aisle aircraft be disrupted? I think that's a harder obstacle to overcome. I think the next question is: will transportation be disrupted? Where will that happen? And how will that happen? And where will the value be created as that happens?"
To find – and deliver – the answers to those profound questions, Boeing turned to Nordlund, an eight-year veteran of business development and strategy positions across the company's portfolio of defence, space and commercial units.
Although he wears Boeing's suit-and-tie uniform rather than Silicon Valley's T-shirts and jeans, Nordlund is familiar with start-up culture. After working for Embry-Riddle Aeronautical University and IBM in the 1990s, Nordlund joined unmanned air systems start-up Insitu in 2002. The small company in Bingen, Washington pioneered the development of small tactical UAS for the military and was bought by Boeing in 2008.
"I know this from my Insitu days: it's really hard in our business to scale after you get past the initial proving the technology out," Nordlund says. "That's where us [Boeing] partnering with some of these companies that have some unique innovation can help them scale."
Nordlund's Chicago-based HorizonX has three avenues to engage with start-ups, nontraditional partners and ideas from internal and external sources. The most visible unit is HorizonX Ventures, a capital fund. Boeing has not disclosed the size of the fund, but Nordlund describes its investment strategy as typically Series A and Series B rounds from single-digit millions to about $15 million. The company plans to announce new investments on a roughly monthly basis.
"I haven't been concerned about our [financial] ability to make investments," Nordlund says.
Since April, HorizonX Ventures has met 1,800 start-up companies, averaging about eight a day. So far, Boeing has decided to make seven investments, including one that remains in stealth mode but more details of which are in the pipeline.
Nordlund's organisation also includes a unit called New Business Horizons, which is focused on identifying and developing new business models. The unit will "bring new capabilities to current markets, and current capabilities to new markets" by developing "nontraditional partnerships", according to Boeing's website.
A third unit, Disruptive Horizons, stages accelerator and incubator programmes to support new ideas from external and internal sources. For example, Boeing partnered with Hyderabad-based incubator T-Hub to host a pitch day for Indian aerospace. Boeing plans to select three start-ups to join T-Hub's incubator. Meanwhile, HorizonX will also solicit proposals from Boeing India employees, with the top three also set up to join T-Hub, Nordlund says.
If the single-aisle aircraft is not quite ripe for disruption, what is? Nordlund suggests one clue comes from his recent trip from London to Moscow. The 1,390nm (2,570km) flight lasted 3h, but the 56km (35 mile) commute downtown through congested traffic from the airport took 2h.
"So the question is: in the future, how do people want to travel? And how does connected transport happen? And how does that happen through a multi-modal effort? And what disruption does that create? So, our organisation is created to be looking out there so that we can find the early indicators of disruption, so we're not caught off guard like some of the automotive industry was," Nordlund says.
In a way, Boeing appears to want to catch the automotive industry off guard again. Any disruption caused by shortening Nordlund's taxi ride from the airport to city centre to downtown is no threat to Boeing's large commercial aircraft.
If someone invents a viable way to safely and affordably transport people by air over the same distance within a city, that technology will pose yet another disruption to the makers of cars. By launching HorizonX, Boeing declares that it wants to be involved in that disruptive force.
"I do think that within the next 15 years there will be a disruption in transportation," Nordlund says. "It's just unacceptable. We have to overcome the traffic problems that we have. The skies are less dynamic than the ground."
Enabling such a shift in transportation will not be easy. The transition from cars to flying vehicles implies breakthroughs in autonomous control and navigation, vertical take-off and landing propulsion and electric power generation and storage.
In June, Eremenko unveiled Airbus's detailed roadmap for developing a series of new electric and hybrid-electric powered demonstrators, ranging from the four-seat CityAirbus to a 100-passenger concept vehicle in two decades. Airbus also has detailed plans not only to make the aircraft, but also to offer the transportation as a service.
Aside from placing the investment in Zunum, Boeing is not quite ready to reveal any specific plans for developing a series of similar demonstrators. In the 14 November meeting with reporters in Dubai, Nordlund remained guarded as to how Boeing planned to counter the Airbus roadmap, but he acknowledged that Boeing would evaluate becoming a transportation service provider.
"I think when we look at long-term opportunity and growth and how the world evolves and what could happen, you've always got to sit back and look at where do you want to play in that value chain. So we'll always keep that on the table," he says.
Boeing has not released a product roadmap like Airbus, but several of the investments by HorizonX Ventures and other units of the US company offer a general direction. In October, HorizonX made an investment in Near Earth Autonomy, a spin-off of Carnegie Mellon University which has developed a way for UAS to precisely navigate without using GPS.
Separately, Boeing's corporate-level technology organisation acquired Aurora Flight Sciences, which specialises in autonomous flight controls and rapid prototyping of new air vehicles.
"You marry [Aurora's technology] up with the work that Near Earth Autonomy has done, you're starting to put the package together," he says.
It's not just passenger transportation that could be ripe for change in the future. The same inefficiencies caused by traffic congestion on the ground also interfere with logistics operations. Moreover, ground-based infrastructure for providing internet service is expensive and difficult to expand to remote areas. In both cases, converting ground-based technology to an airborne service is becoming a popular pursuit.
"What we see transforming business is that other companies and industries are trying to figure how to leverage things that fly," Nordlund says. "Where would you go to in Boeing for that? Now you come to HorizonX. We're now the front door for this emerging marketplace."
HorizonX is not just to keep Boeing involved in disruptive technology in the commercial business. For three years, the US military has also courted Silicon Valley, seeking to leverage the same software-enabled technologies for weapons and intelligence-gathering. Concepts such as the US Air Force's Project Maven seek to leverage the new theory called algorithmic warfare, in which the integration of data analytics, machine-learning and other software-enabled tools could transform the way the military operates on the battlefield.
Such interests are partly why Boeing last June decided to invest in Austin-based SparkCognition, an artificial-intelligence start-up. "Now we're getting down to final completion of a new agreement with Spark to expand our relationship beyond an investment," Nordlund says. "Because we see the importance of artificial intelligence emerging really in all aspects of our business to include the defence and security piece of it."
Thai Lion Air has received its first wide-body, an Airbus A330-300 on November 21, 2017.
The aircraft is configured with 392 seats, each equipped with an in-flight entertainment system, in two classes, says the low-cost carrier's 49% shareholder Lion Air Group.
Flight Fleets Analyzer shows that the aircraft is registered HS-LAH (c/n 1820), and that the carrier is scheduled to receive another two A330s (HS-LAI and HS-LAJ) by the end of the year. All three aircraft are part of the Lion Air Group's order book.
(Lion Air Group)
In September, FlightGlobal reported that the A330s were originally meant for Malindo Air but later reassigned to Thai Lion Air.
In a local media interview, Yangkirativorn said that the A330 will first be deployed on route-proving missions to Phuket and Chiang Mai from December, before being used on international services to North Asia in the first quarter of 2018. He added that Thai Lion will take "at least" five Boeing 737 Max aircraft in 2018.
Fleets Analyzer shows that besides the A330, Thai Lion has 27 Boeing 737s.
The airline did not respond to FlightGlobal's repeated requests for comments on the A330s, as well as its expansion plans.
China Southern Airlines says there is potential for further collaboration with American Airlines, and that it is open to bring private investors into the carrier.
In a televised interview, the airline's vice-chairman and president Tan Wan Geng says that the market between China and the US "is the biggest", and hence it wants more support from its American partner.
"This is the reason why we set the cooperation strategy relationship with American Airlines. It's just the beginning. In the future, China Southern will fly more to the US, and American Airlines will fly more to China," says Tan.
China Southern Airlines says there is potential for further collaboration with American Airlines, and that it is open to bring private investors into the carrier.
In a televised interview, the airline's vice-chairman and president Tan Wan Geng says that the market between China and the US "is the biggest", and hence it wants more support from its American partner.
"This is the reason why we set the cooperation strategy relationship with American Airlines. It's just the beginning. In the future, China Southern will fly more to the US, and American Airlines will fly more to China," says Tan.
I do think we have a lot of potential to cooperate."
This is in-line with the airline's plan for a "double-hub" strategy once the new Beijing Daxing airport becomes operational. The carrier has said that it expects to base 250 aircraft at the new airport by 2025, with plans for intercontinental services to North America and Europe.
Earlier this month, FlightGlobal reported that China Southern has had internal discussions about the possibility of leaving the SkyTeam alliance, following closer collaboration with Oneworld member American.
American closed a $200 million investment for a 2.68% stake in China Southern in August. That followed Delta Air Lines' $450 million purchase of a 3.55% stake in China Eastern Airlines in September 2015.
Asked if the carrier would consider bringing in private investors, Tan says: "For that kind of mixture we have to be very careful because this concerns employees and there is a lot of very sensitive matter. But I think we will do."
The Australian Transport Safety Bureau (ATSB) is investigating an incident on 18 November where an Air New Zealand Boeing 777-300ER descended below minimum safe altitude while on approach to land at Brisbane airport.
As the aircraft (registered ZK-OKN) was tracking to land on runway 01, it had been cleared to descend to 3,000ft but was observed to have descended to 2,500ft. The crew were alerted to this, but the aircraft continued to descend to 2,000ft.
The ATSB has classified the event as an operational incident and will review recorded data, interview the flight crew and gather additional data. The investigation is expected to be complete by April 2018.
In continuous operation since 1919, KLM Royal Dutch is the oldest airline in the world. It's a venerable brand known for its service and iconic blue planes.
Since 2014, Pieter Elbers has been the man tasked with leading the Dutch national airline into the future. Elbers joined KLM in 1992 as an aircraft loading supervisor before moving up the company's management ladder. Today, the charismatic 47-year-old leads an airline with 33,000 employees and $12 billion in annual revenue.
Recently, Elbers sat down with Business Insider at our headquarters in New York. Our conversation touched upon several topics including the Air France-KLM union, competition in the marketplace, and travel tips.
The state of Air France-KLM
In 2004, KLM merged with Air France to form one of Europe's largest and most powerful aviation conglomerates with a fleet of more than 530 planes that carry more than 93 million passengers annually.
Due to labor issues and the hyper-competitive nature of the Europe's commercial aviation industry, things have not always been easy for Air France-KLM. However, the company has recovered nicely, reporting a $1.2 billion through the first three quarters of this year.
"What I share with my staff is that we aren't following the book on consolidation, we are writing the book on consolidation," Elbers said. "And sure sometimes we have to make changes or reverse some earlier decisions, it's nice to play a role in it."
According to Elbers, the interplay between the two airlines is constructive.
"In the past, we were probably very much that we should centralize a lot of activities in service to these two airlines," the KLM CEO told us. "In today's reality, for instance, in the field of digitalization, we prefer to do it in both Amsterdam and Paris."
"And then to make sure people challenge each other, help each other, share best practices, and share ideas," Elbers said. "We see a great momentum there in terms of if something is being done on the Air France side, the KLM guys know they can learn from that and try the same thing or even work to improve it."
Competition in Europe and from abroad
The most disruptive force to hit commercial aviation over the past few decades is low-cost airlines. However, major legacy carriers underestimated the effect power of these airlines until it was too late.
"My personal view is that for especially the first decade of their existence, network carriers like ourselves sort of underestimated, ignored — almost arrogantly ignored — the rise of low-cost carriers," Elbers said. "With that, we can see that their share in the European landscape has steadily increased and is now anywhere between 42% and 45% of all flights in Europe are with low-cost carriers. And a percentage which is significantly larger than in the US where it’s about a third."
In response, KLM made drastic changes to the way it conducts business.
"With that, we have embarked on a program in KLM a few years ago whereby we sort of said, we’re going to defend our European network and we're going to make sure that we do the right thing for our customers on the European network," he said.
"So we have lowered our cost, we have increased our fleet utilization, we have changed our commercial offers on probably 60% of all our European destinations, which are about 80 destinations. We do have levels which are matching the low-cost carriers. So this combination of cost-cutting on the one-hand side, investing in our product and our service."
However, low-cost carriers aren't the only competitive threats to major legacy airlines. In countries such as China and Japan, high-speed rail has been taken a toll on domestic air travel. But that hasn't been a major issue for KLM.
"High-speed rail internationally in Europe is a very, very small number. Domestically in countries like France, it is relevant, between various countries it's hardly relevant because of all of the different systems. It's not really taking traffic," Elbers said.
Things are different when it comes to the three Persian-Gulf mega-carriers; Emirates, Etihad, and Qatar Airways. This has been a major topic of contention for US and European carriers that claim the ME3 have been propped up by more than $50 billion in government subsidies.
"The fact that we have new competition is not an issue, but what the aviation community has been rather vocal about is to ensure that we have a level playing field and that we all play by the same rules," Elbers said. "I think it's very important also as a commitment to our staff. If we ask them to make sacrifices and to contribute to the change and the well-being of the company we should be able to do that while fighting on an even playing field."
Tips for frequent flyers
Elbers is a true frequent flyer. The KLM CEO is on a plane several times a month. As a result, he's worked out a few tricks to make air travel easier. For instance, Elbers stresses the importance of organization when it comes to packing.
"Everything is in a fixed place. Everything is packed in the same way. I’m boarding an aircraft about every other week, so I want to make sure I don't forget anything," he said. "I need everything to be done in the very same way. I know where everything is packed, I know the sequence of packing it. So yes, I do it in the same very structured way."
"What I do is I have a special bag for sort of my running stuff and some of the non-business related items. And then I have a small carry-on luggage for business shirts, ties, and so-on," Elbers added.
And then there's jet lag. For Elbers, it's all about exercise to start the day.
"Beating jet lag for me is an early morning run," he said. "So, wherever I go, I wake up early, I do my run, and that's, for me, the way to beat the jet lag."
Taxies at Ted Stevens Anchorage International Airport (ANC/PANC) on May 3, 2017. Originally delivered to Delta Airlines as N808DE on June 22, 1993 with whom she served until making her way to FedEx on August 8, 2006. (Photo by Michael Carter)
Captured on short final to Rwy 25L on November 24, 2017.
Delivered on September 25, 2017 this was the aircraft to perform the inaugural Southwest Airlines 737-8 Max flight on October 1 as 'WN1" Dallas (DAL/KDAL) to Houston (HOU/KHOU). I was on-board this flight and had a fantastic time. Unfortunately the aircraft went tech in Houston and was taken out of service until the issue could be solved later that day.
Air Canada Cargo has confirmed that after a year and a half it's freighter operation to the US, Mexico, Europe and South America will come to an end.
The Canadian airline confirmed that after discussions with partner Cargojet they had mutually decided to end their "positive" B767-300F freighter tie-up at the end of this year.
Air Cargo News first reported that the partnership between the two companies would expire at the end of the year last week, but sought clarification on whether Air Canada would look to continue the services with another lessor.
The expiration of the deal means the end of Air Canada's three freighter services operating on a rotation of Ontario - Mexico City - Dallas Fort Worth - Ontario; Ontario - Atlanta - Bogota - Lima - Ontario and Ontario - Frankfurt - Ontario.
Air Canada vice president, cargo, Tim Strauss said that the airline would add extra capacity on its passenger services.
"While the commercial agreement between Air Canada and CargoJet has been positive, both parties have agreed to not extend it beyond the initial period to focus on our respective core businesses," he said.
"While we will no longer offer all-freighter service per the agreement with Cargojet on the routes mentioned above, we continue to operate our passenger wide-body flights.
"We are also providing additional capacity with daily 767 service between Canada and Mexico, and wide-body service between Canada and Peru three times weekly. We will also facilitate customer needs with our interline relationships with other carriers."
On services to the US: "We offer an extensive trucking network throughout the US which facilitates connections to Air Canada’s wide-body passenger flights out of US cities like Miami, Fort Lauderdale, Orlando, Los Angeles, San Francisco and Newark or connect to wide-body flights out of Vancouver, Calgary, Toronto and Montreal."
Cargojet said it expects to replace these flights and revenues by operating the flights directly for its interline partners on similar routes as demand on these services remains strong.
The Cargojet partnership was first launched by Strauss' predecessor, Lise-Marie Turpin, in June 2016 with the start-up of flights to South America via the US. European flights were added later that year.
Boeing has started final assembly of the third and smallest variant in the re-engined 737 Max family.
The first Max 7 flight-test aircraft is now loaded into a final-assembly position inside Boeing's single-aisle production centre in Renton, Washington, the airframer confirmed in a Twitter posting on 22 November.
Final assembly begins after a completed fuselage arrives from Spirit AeroSystems. Boeing manufactures the wings for the 737 Max in a building adjacent to the final assembly hangars in Renton. CFM International ships Leap-1B engines which are installed at the end of the final assembly process.
The 737-7 – with 138-153 seats in a two-class layout – enters final assembly three years after Boeing achieved a similar milestone with the 162-189-seat Max 8. That variant entered service in May.
In December 2016, Boeing started final assembly of the first 178-193-seat Max 9, which is on track to enter service next year. The airframer is also designing the 188-204-seat Max 10.
Though the smallest of the four major Max variants, the 737-7 has the longest range: 3,825nm (7,080km).
Boeing and China's first privately owned airline, Okay Airways, have finalized a $1.4-billion order for five Dreamliner jets, the two companies said on Thursday.
The purchase of the five 787-9 long-haul aircraft by the Beijing-based airline was signed off in the United States on Wednesday and announced on Thursday via the companies' official accounts on Chinese microblogging site, Weibo.
Okay Airways currently has a fleet of 26 single-corridor Boeing 737 planes, which fly to 70 destinations in China and elsewhere in Asia.
The Chinese company had signed a preliminary agreement to buy the planes back in June, when it has also made a firm order for 15 medium-sized 737 MAX planes at a catalogue price of $1.8 billion.
"We are committed to investing in our aircraft fleet in order to keep growing ahead of the market and enhancing our customers' flying experience," said Okay Airways president Li Zongling, according to China's official news agency Xinhua.
He added that the order would strengthen the airline's plans to expand into the long-haul market.
Chinese companies are on the whole profiting from the country's spectacular rate of aviation expansion, fueled by a growing middle class and a rapidly developing tourism industry.
But competition on international routes is becoming more intense, with China's three airlines -- Air China, China Southern and China Eastern -- fighting it out to lead the sector.
Air China has suspended flights to North Korea, further limiting the secretive state's links with the outside world, but the company said Wednesday it was a business decision.
The suspension comes shortly after US President Donald Trump visited Beijing and pressed his counterpart Xi Jinping to do more to rein in North Korea's nuclear program.
China sent a special envoy, Song Tao, to the North last week but his four-day trip ended with no direct statement on the crisis, after Pyongyang's series of nuclear and missile tests triggered global alarm.
Air China said in a statement to AFP that it cancelled the Beijing to Pyongyang flight route because the "operational situation is not ideal".
"Market conditions will determine the resumption of the flight route," the statement said.
Air China last cancelled flights to North Korea in April, citing low customer demand, but resumed them soon after.
China has denied any political motives behind its flag carrier's suspension of the route.
"The airliners just work out their own operation plans based on the state of operation and the market," foreign ministry spokesman Lu Kang said at a press briefing on Tuesday when asked about the apparent move.
Passengers flying from Beijing to North Korea are now left with just three regularly scheduled flights each week, on the North Korean state airline Air Koryo.
Air Koryo also operates flights from the northeastern Chinese city of Shenyang to Pyongyang, though it halted flights from the Chinese border city of Dandong earlier this year.
Beijing is Pyongyang's only major ally and biggest trade partner, though in August China said it would abide by new UN sanctions which heavily curtail the North's exports of its most profitable goods.
The US on Tuesday unveiled new sanctions targeting North Korean shipping and Chinese traders doing business with Pyongyang, again raising the pressure on the pariah state to abandon its nuclear program.
China's foreign ministry rejected the sanctions on Chinese firms as "wrong", stressing that Beijing has enforced UN measures curbing trade with Pyongyang.
The Department of Transportation (DOT) has canceled Eastern Air Lines’ air operator’s certificate (AOC), thus bringing to close a long-running—and some say, quixotic—attempt to revive a name storied in aviation history.
DOT, in an order dated Nov. 20, said it would “cancel the certificate authority issued to Eastern Air Lines Group Inc., authorizing it to engage in interstate and foreign charter air transportation of persons, property and mail.”
Eastern on Nov. 13 notified DOT that it would it voluntarily surrender its operating certificate to the FAA and that “[the carrier] did not object to the [DOT] canceling its economic authority.”
The order took immediate effect—although Eastern, or any interested party, has 10 days to petition DOT.
The department awarded the revived Eastern economic authority on April 28, 2015. DOT expanded the certificate to allow Miami-based Eastern to fly foreign charter operations in May 2015. Eastern operated charters between Miami and Havana, Cuba, and planned scheduled service to other points in Latin America and the Caribbean.
In 2016, Eastern applied for some of the 20 daily scheduled frequencies between Miami and Havana made available by the US-Cuba bilateral air services agreement. DOT denied Eastern’s application, arguing that it had not established a record of service at the time.
The carrier leased Boeing 737s and had orders for 10 737-8s scheduled for delivery beginning in 2020. Eastern also ordered 20 Mitsubishi MRJs; these were scheduled for delivery in 2019.
The carrier made the news in 2016, when a charter flight carrying then-Indiana Gov. Mike Pence (the 2016 Republican vice presidential candidate), overran the runway at New York LaGuardia Airport. On Oct. 27, 2016, the Boeing 737-700 skidded off the runway during wet and overcast conditions, and was stopped by the arresting material at the end of the runway. No injuries were reported.
Eastern ceased operations Sept. 7. The original Eastern Air Lines operated from 1926-91 and was one of the original “Big Four” US carriers. Since 1991, a number of attempts to revive the brand have failed.
Lie-flat business-class seats have become the standard for long-haul international flying. Delta Air Lines, in fact, has concluded that lie-flat alone is no longer good enough; just launched Delta Airbus A350-900 Detroit-Tokyo Narita service debuts Delta One business-class seats with sliding doors to create privacy compartments. This mirrors long-haul business-class service offered by a number of Asian and Middle East airlines.
What about the domestic market? Delta has just added lie-flat seats on at least one daily flight on six more domestic routes. By May 2018, 10 Delta domestic routes will offer lie-flat seating.
Could lie-flat become the standard on US transcontinental service and on domestic flights to Hawaii from the US midwest and east coast?
Increasingly, Delta, United Airlines and American Airlines are offering lie-flat seats in domestic business class (or, in the parlance US airlines use, domestic “first class”) on transcontinental flights. JetBlue Airways’ lie-flat Mint product continues to grow and perform well; Mint-configured Airbus A321s now make up the majority of JetBlue’s transcon capacity.
There are still a lot of transcon flights without lie-flat seats. For example, if next summer you are looking to fly from New York to Las Vegas in comfort, Delta will offer lie-flat seats on just one of its five daily flights on the route. But on routes like New York-Los Angeles and New York-San Francisco, lie-flat offerings are becoming pretty ubiquitous.
The move to transcon lie-flat seating in business class comes as Delta and American also re-introduce economy-class meals at no extra fee on select cross-country flights.
US airlines are correcting one of their big customer service miscues of the past (driven, in part, by terrible financial performances): treating all domestic flights the same. US carriers are now conceding that a 1-2-hour flight up and down a coast or over a portion of the country is simply not the same as a 5-hour transcontinental flight.
The service offered on the long-distance transcon flight has to be closer to what the carriers are offering on international flights than to service on a domestic short-hop. Consistent profitability gives US airlines the opportunity to offer a much better product across the board, and an overdue transcontinental customer service arms race between US carriers appears to be on.
A Hainan Airlines Boeing 787-8 has completed China’s first intercontinental passenger flight with sustainable fuel produced from waste cooking oil from restaurants in China by Sinopec.
According to Xinhua News Agency, Hainan Airlines flight 497 flew from Beijing to Chicago O’Hare International Airport Nov. 21 after flying more than 11,000 km (6,835 miles).
The biofuel flight was part of a cooperation project on green aviation between China and the US.
In 2015, the Haikou-based carrier launched China’s first biofuel passenger flight on domestic routes operated by a Boeing 737-800. In 2011, Air China operated the first biofuel test flight using a Boeing 747-400 powered partially with jatropha-based fuel.
Lufthansa will expand Boeing 747-400 operations between Frankfurt and Berlin Tegel airports, citing high demand on the domestic route since the closure of bankrupt airberlin.
On Nov. 1, Lufthansa launched 747-400 operations and will add 28 747 flights to Berlin in the first three weeks of December.
“From an economic point of view, this exceptional measure does not pay off, but in difficult times it creates additional capacity on this important route and offers many more travel options to many guests,” Lufthansa executive board member-hub management Harry Hohmeister said in a statement.
Lufthansa operates up to 16 daily flights on the route, making it the German carrier’s most-flown sector in the network.
Hohmeister said the Berlin Tegel infrastructure is not ideal for 747-400s properly; however, Lufthansa and airport employees are doing a “fantastic job” in handling the widebody.
In total, Lufthansa will operate 90 747-400 flights in November and December, transporting more than 350 passengers on each flight.
Shenzhen-based SF Airlines purchased two Boeing 747 freighters for CNY320 million ($48 million) via an online auction conducted by China’s e-commerce company Alibaba Group Holding.
The aircraft were formerly operated by the insolvent Jade Cargo International, which filed for bankruptcy in 2013.
Alibaba had put three 747Fs up for sale—two are parked at Shanghai Pudong Airport and the third one is at Shenzhen Bao’an Airport. However, Alibaba didn’t specify which two aircraft SF Airlines purchased.
SF Airlines, China’s biggest express delivery carrier, was launched in 2009 and operates 40 freighters, comprising Boeing767/757/737 aircraft as of August 2017.
In a further indication of growing preparations for the expected launch of the new mid-market airplane (NMA) in 2018, Boeing has appointed former 777X chief project engineer Terry Beezhold to an unspecified senior leadership role on the embryonic small twin-aisle program.
Beezhold’s move comes less than two months after Boeing formally established the NMA project office and named 787 veteran Mark Jenks as vice president and general manager. Although falling short of a formal program launch, the setting up of the project office gave notice that Boeing moved “one step closer to a decision on a NMA and also serve as a vehicle to evolve how we design and build airplanes,” according to Boeing Commercial Airplanes president and CEO Kevin McAllister.
Initially emerging as a potential successor to the 757, the NMA has morphed over the past two years into a twin-aisle design targeted at a much broader, all-new market estimated at over 4,000 units.
At the recent Paris Air Show, Boeing outlined plans for an aircraft with all-composite fuselage and wings, which would seat 220–270 passengers and fly ranges of as much as 5,200 nm. If launched, the NMA will enter service in 2025.
The appointment of Beezhold, first reported by CNN, is also viewed as particularly significant because of his close association with an earlier role, prior to the 777X, that focused on building aircraft affordably through common tools and processes across different programs. The proposed NMA will be a widebody design, but in order to meet the business case for marketing to a broader set of operators, it will only be offered if Boeing can build it at a cost more typical of a single-aisle design.
Beezhold, formerly 787 airplane level integration team lead before being appointed in 2011 to the newly created role of vice president of processes, tools and affordability, was specifically responsible for cutting the non-recurring costs for future aircraft product developments. At the time, these included the 737 and what would later become the MAX, as well as the “Advanced 777,” which in 2013 was launched as the 777X. Beezhold’s responsibilities also included ensuring all Boeing Commercial Airplanes computing processes and tools supported the entry into service for the 747-8 freighter, and Intercontinental and 787, as well as enabling the planned rate increases for the 737, 767 and 777 programs.
UK LCC easyJet has posted a sharp 30% net profit decline for the full year ended Sept. 30, dropping to €305 million ($403.5 million), although revenue and traffic were boosted by European consolidation.
Outgoing easyJet CEO Carolyn McCall described the full-year results as a robust performance during a difficult year, which saw German carrier airberlin and UK leisure airline Monarch Airlines suspend operations and Italian flag carrier Alitalia enter administration.
“What you can see is capacity shaking out even more, with the weak players becoming weaker and the strong players becoming stronger,” McCall said, speaking on the airline’s results call. “Any capacity reduction created by anybody is a benefit.”
McCall said there was no doubt that easyJet had gained from capacity coming out of the market, particularly in the case of Monarch.
Irish LCC Ryanair also canceled thousands of flights because of a crewing error, but the positive impact of Ryanair’s difficulties was minimal because Ryanair and easyJet only overlap on 8% of their networks. “From what you read in the newspapers, you’d think we were head-to-head everywhere; we’re not,” McCall said.
During the 12 month-period, easyJet carried a record 80.2 million passengers, up 9.7% year-on-year. Paired with 8.5% capacity growth, this pushed easyJet’s average load factor up by a point to a high of 92.6%.
Revenue rose 8.1% at £5.04 billion, fueled in part by 17.8% growth in ancillaries, but revenue per seat dipped 0.4% to £58.23—or 4.5% at constant currency—because of excess capacity and fierce competition.
The strong traffic and revenue performance was marred by a £101 million currency hit, pushing pre-tax profit down 17.3% to £408 million and net profit down 30.2% to €305 million.
Total costs increased by £500 million to £4.7 billion and cost-per-seat ex-fuel increased 7.7% to £41.27, or 0.9% at constant currency.
EasyJet has set up an Austrian air operator’s certificate (AOC) as a Brexit contingency plan, because 30% of its flying is within EU member states. McCall said 12 aircraft have already been transitioned to Vienna-headquartered easyJet Europe and, over the next 18 months, easyJet plans to move a total of 100 aircraft across. Setting up the AOC cost easyJet £2 million in the 2016-17 financial year and is expected to total up to £10 million over three years.
The LCC is also acquiring some of the assets of German leisure carrier airberlin and is still in the running for Italian network airline Alitalia.
“We now have a huge amount of positive momentum to allow the airline to grow its profit,” McCall said. “We have a unique combination that no other airline can match.”
Amid all this activity, McCall will step down on Nov. 30, handing over to Johan Lundgren, who was previously TUI Group deputy CEO.
When asked whether it was a bad time to leave, McCall replied: “This is probably the easiest we’ve had it in a long time. We chose to do airberlin and we have massively reduced the risks of Brexit—all we need now is a bilateral between the UK and Europe. A lot of things a CEO has to deal with are external. Because we’ve taken control, there are plates spinning, but they’re manageable plates. You have to leave when things are on the up and easyJet very much on the up. It’s the best time to leave the company; it’s in good hands.”
EasyJet plans to grow capacity by around 6% for the 2018 financial year, excluding the airberlin transaction.
Revenue trends are positive, because of market consolidation, and easyJet is now anticipating low- to mid-single digit revenue per seat growth at constant currency in the first quarter and first half.
In 2018, easyJet expects to cut its cost-per-seat by around 2%, excluding the impact of airberlin costs, although the figure will rise by up to 1% ex-fuel and at constant currency.
EasyJet operated 279 Airbus A320 family aircraft as of Sept. 30. The LCC has a further 143 aircraft on order, with 36 scheduled to arrive in 2018, 21 in 2019, 23 in 2020, 35 in 2021 and 28 in 2022.
Rendering of Boeing 737 MAX 8 in Aerolíneas Argentinas livery. (Boeing)
CEO Mario Dell’Acqua said Aerolíneas Argentinas will take delivery of its first Boeing 737 MAX 8 Nov. 29. The aircraft will make its first commercial flight Dec. 1.
“It is a great honor to be the first Latin American airline to fly the MAX,” Dell’Acqua told ATW on the sidelines of the ALTA Airline Leaders Forum in Buenos Aires Nov. 20. “Having the MAX will allow us not only to improve our costs but also to potentially serve routes to the Caribbean with the MAX that we now serve with widebody aircraft, due to its improved autonomy.”
Buenos Aires-based Aerolíneas will receive an additional MAX 8 in December. Three more will be delivered in 2018 and a total of 12 will arrive by 2020, Dell’Acqua said. The airline intends to continue operating its 737-800s.
According to the airline’s fleet plan, Aerolíneas will end 2017 with 12 Airbus widebody A330/A340 aircraft, 41 Boeing 737 aircraft, including 39 737NGs and two new 737 MAX 8s, as well as 26 Embraer E190s that operate on Aerolíneas’ regional subsidiary Austral.
The Airbus A350-1000 has gained both EASA and FAA type certifications, the manufacturer announced Tuesday.
Type certification of the widebody Nov. 21 came almost one year after the aircraft’s first flight.
Airbus expects to deliver the first A350-1000 to launch customer and operator Qatar Airways before the end of this year. The first aircraft is in the final assembly line and will be transferred to the flight line in early December.
The A350-1000 test program comprised 1,600 hours and involved three aircraft. Around 150 flight hours were dedicated to route proving in an operating environment typical for airlines.
Airbus A350 chief engineer Alain de Zotti said all performance targets were met or exceeded. The aircraft also remained within its weight specification, unlike early versions of the A350-900, the first A350 variant to enter service.
Airbus has 169 firm orders from 11 customers for the -1000. There are 681 orders for the smaller A350-900, 122 of which had been delivered by the end of October.
A US legislative proposal to tax certain foreign airlines—and which seems to target the major Gulf carriers—is a dangerous move, the head of the Arab Air Carriers’ Organization (AACO) warned Tuesday.
The amendment has been latched to the US tax bill that has been passed by the House of Representatives, but has still to be passed by the Senate. The bill, however, is being pushed through at speed as the White House is keen to see tax reform, one of its key campaign pillars, enacted by the end of the year.
Senator Johnny Isakson, a Republican in Delta Air Lines’ home state of Georgia, added language in November to Senate finance committee chairman Orrin Hatch’s tax bill that would lead to the Gulf carriers being subject to US taxes.
Current US tax laws provide reciprocal exemption for gross income derived by foreign airlines. Under the Isakson proposal, that exemption would no longer apply if two conditions exist: The foreign airline is headquartered in a country that does not have an income tax treaty with the US and American passenger airlines operate fewer than two arrivals and departures per week to that foreign country.
Those conditions would encompass the UAE, home of Abu Dhabi-based Etihad Airways and Dubai-based Emirates Airline, and Qatar, home of Qatar Airways.
Those three Gulf carriers have been in the crosshairs of a campaign led by Delta, American Airlines and United Airlines, to curtail their growth in the US market. The US carriers allege that the Gulf carriers operate with the support of large government subsidies that contravene the US Open Skies agreements with the UAE and Qatar. The Gulf carriers strongly deny the subsidy allegations.
At the opening session of the AACO AGM in Sharjah Nov. 21, AACO Secretary General Abdul Wahab Teffaha raised the tax amendment issue after a presentation by IATA SVP Africa & Middle East Muhammad Al Bakri.
Teffaha asked Al Bakri to relay AACO’s concerns to IATA.
Describing the aviation tax proposal as “an extremely bad turn of events,” Teffaha said the dangers were twofold: it would suppress demand for travel and it could proliferate.
“This will hurt global aviation in a major way like nothing else,” Teffaha said. “There is a real danger it will suppress aviation and it will be bad for the consumer. And there is also the danger of proliferation; I am afraid that many countries will see what the US is doing and will follow suit.”
Teffaha told ATW that the US should also be cautious about the likelihood of reciprocal taxation on its carriers, especially by Latin American countries where similar conditions apply.
If the US tax bill does get passed with the aviation amendment, it would be effective for taxable years beginning after Dec. 31, 2017.
Some countries have full-fledged tax conventions with the US to ensure reciprocal tax exemptions. Other countries have reciprocal non-taxation agreements with the US that are not on the same level as tax treaties, but which have the same effect. The Isakson language targets the UAE and Qatar, which have the latter, and where there are fewer than two weekly arrivals and departures by US carriers.
But while the amendment seems to target the three Gulf carriers, it would immediately have a broader impact because it would also encompass the airlines of countries that include Saudi Arabia, Jordan, Bahrain, Malaysia and more.
“This is really bad public policy with potential ramifications for other US industries. If you set a precedent of using reciprocal tax exemptions as a competitive weapon, there surely are other countries and foreign competitors in a range of industries that will be intrigued by the prospect of applying that precedent to competitive US companies in a variety of sectors, not to mention foreign state treasuries that would like the extra revenue,” an industry source told ATW.
American, Delta, United and US airline labor groups have spent millions of dollars in their campaign against the Gulf carriers. In 2015 alone, tax filings show, The Partnership for Open and Fair Skies, which represents the airlines and a coalition of unions, spent $6.1 million.