Friday, May 31, 2013

The battle for premium class passengers

When Hal Biagas travels cross-country on business, you won’t find him wedged in a middle seat back in row 28. It’s not fancy meals or free bags that make premium-class travel a must for Biagas, general counsel at Excel Sports Management, which represents A-listers such as Tiger Woods and the Yankees’ Derek Jeter. “What I do tends to draw interest,” Biagas says, “and I can’t have someone looking over my shoulder and seeing a name on a presentation or contract.”

Just as Asian and Middle Eastern airlines have built lucrative businesses serving executives and the wealthy, U.S. carriers have intensified competition for full-fare passengers who frequently travel between New York and Los Angeles.

The contest for first- and business-class fliers on the heavily traveled route is pitting American Airlines (with 32 percent of the market), Virgin America (21 percent), Delta Air Lines (DAL) (19 percent), United Airlines (UAL) (16 percent), and JetBlue Airways (JBLU) (11 percent) against each other in a battle for investment bankers, celebrities, and others who can afford tickets topping $6,500.

Although coach fliers are a majority on almost all trips, Michael Boyd, chairman of consultant Boyd Group International, estimates premium-class passengers account for 75 percent of the revenue on cross-country flights. “Pandering to business traffic is a lot more important than getting volume,” Boyd says.

New York-Los Angeles is both the busiest long-haul U.S. route, with about 3.2 million passengers a year, and the most lucrative, with $1.43 billion in annual sales, according to the Bureau of Transportation Statistics. A premium-cabin ticket can cost 10 times more than one in coach—but passengers do get plenty of pampering.

 At American, concierge employees greet first-class fliers at curbside and whisk them to a special transcontinental check-in room. They’re then taken to the front of the security line and the Flagship Lounge, a private facility within American’s Admirals Clubs.

Once airborne on Delta, business/first passengers are plied with Veuve du Vernay Brut sparkling wine from France’s Bordeaux region, along with premium California offerings such as Merry Edwards sauvignon blanc. “That transcon market is incredibly important, because it helps you become the preferred carrier across the board,” says Gail Grimmett, Delta’s senior vice president for New York.

Lie-flat seats are the latest front in the New York-L.A. war. Delta is shifting some wide-body Boeing (BA) 767s with flat-bed seats from trans-Atlantic to cross-country service and adding flat-bed seats on existing narrow-body 757s on the routes. United is rearranging its cabins to go to two classes of service from three; as part of the makeover it will lose 12 seats that tilt to not-quite-horizontal on its cross-country 757s to make room for a total of 28 lie-flat seats.

In November, American will start flying Airbus (EAD) A321 single-aisle jets specially modified for transcon service. They’ll have 10 mini-suites with flat-bed seats, 20 fully flat business-class seats, 36 coach seats with extra legroom that sell for an added fee, and only 36 traditional coach seats. Explains American’s chief commercial officer, Virasb Vahidi: “You can tell quickly that this aircraft was not configured for leisure travelers.”

(Mary Jane Credeur and Mary Schlangenstein - Bloomberg Business Week)

Spirit Airlines super low fares - fees for everything else

There is a joke in the airline business that you could make money giving out free beer and charging a fee for the bathroom.
No one has tried that — at least not yet — but one small airline has led the way in the United States when it comes to passenger fees: Spirit Airlines, the no-frills carrier that prides itself for offering the lowest fares, then charging passengers for everything else.
Need an agent to print out a boarding pass at the airport? That’s $10. Want some water? That’s $3. Rolling a bag on board? The tag costs $35 from home and $50 at the airport. In all, there are about 70 fees enumerated in dizzying detail on Spirit’s Web site for customers to navigate.
To the millions of travelers flying on vacation this summer, the fees can be infuriating, but Spirit makes no apologies. In an age of consolidation in the airline industry, Spirit, with about 1 percent of the nation’s passenger traffic, has managed to succeed by going it alone, scraping for every dollar and scrimping on every cost.
“Spirit does everything it can to make or save a buck,” said Henry Harteveldt, a travel analyst with Hudson Crossing. “To its credit, Spirit doesn’t promise passengers that they’ll be coddled. Its customer service standards are terrible, and the airline’s actions have shown it doesn’t care about being liked or respected.”
The driving force behind that strategy is Spirit’s chief executive, Ben Baldanza, 51, an industry veteran who arrived at Spirit eight years ago with no experience at a no-frills airline. Along with an obsessive attention to keeping costs low, Mr. Baldanza argues that the cornucopia of fees allows the airline to keep its fares lower than rivals.
The airline, known for its tasteless ads (during the presidential election, one ad talked of Spirit having “binders full of sales. Women will love them!”) is modeled after Ryanair, which charges low fares for flights throughout Europe with a minimalist approach to customer service.
“I cringe a little when people say I don’t care about customers,” said Mr. Baldanza, who brims with missionary zeal. “We care about the thing that customers tell us they care the most about, and that’s offering the lowest possible fares.
The customers who fly Spirit absolutely understand the trade-off.”
On a recent day at La Guardia Airport, passengers seemed to be taking the fees in stride. Two students forgot about the fee that Spirit charges for carry-on bags. That did little to reduce their enthusiasm to fly to Las Vegas despite the early loss. Kevin Reed, a photographer flying to Myrtle Beach, S.C., paid an extra $10 on top of a $35 checked-bag fee because he failed to do so when he bought his ticket.
“They got me there,” he said, shrugging. “But I’m still saving $400 over flying with Delta.” 
Not every customer has the same reaction, though. Spirit is routinely rated as the nation’s worst airline because some travelers deem the fees unfair.
The Transportation Department receives far more complaints about Spirit than other carriers, with 6 to 8 complaints per 100,000 passengers compared with the industry average of 1.4. And Spirit’s on-time record is similarly abysmal, at 68.8 percent compared with 80 percent for the industry average. The best airlines are in the mid-90s.
Critics point out that the inflation of air travel fees makes it increasingly difficult to compare the cost of travel between airlines.
“The fee-for-everything technique allows airfares to be advertised as much lower than the overall cost,” said Paul Hudson, the president of, a consumer group.
Mr. Baldanza acknowledged that the process can be tricky. “You can’t sleepwalk through the process,” he said.
But the model has allowed Spirit to offer cheap tickets. Since 2008, Spirit’s airfare has dropped by 20 percent, averaging $75 in 2012 compared with $94 in 2008. The difference often jumps out at a customer searching for flights. On Friday, Spirit was offering a nonstop flight from Oakland, Calif., to Portland, Ore., in mid-July for $156; the same trip was $296 on Delta.
Because of its growing list of fees, however, nonticket revenues grew to $51.39 in 2012, from $18.61 in 2008. As a result, while fares fell, Spirit’s total revenue per passenger grew by 12 percent from 2008 to 2012, reaching $126.50. Fees now account for 41 percent of Spirit’s revenues, an industry record.
The trade-offs are obvious. Spirit has no business class, offers no movies and no Wi-Fi, and its seats don’t recline, legroom is the tightest in the business. But a nonstop flight from Dallas to Orlando costs $366 on Spirit and $499 on American Airlines.
Still, Spirit is not about to take over the domestic industry. The carrier, which caters to leisure travelers and not the business flier, has only 49 planes, compared with more than 600 for Southwest. But it is growing about 20 percent a year when most of the industry is contracting or staying flat. It plans to add four more planes this year and another 17 over the next two years.
The airline, based in Miramar, Fla., flies about 50 routes, mostly on the East Coast, Florida, Central America and the Caribbean. It started flying as a charter airline in 1980, but adopted a low-cost model in 2007, when new investors charted a different course for the unprofitable airline.
Last year, Spirit had its fourth consecutive year of profitability, and generated some of the best returns in the industry, along with a record return on invested capital of 26.5 percent.
Investors have responded. Since the company’s initial public offering two years ago, shares have more than doubled. They traded at $30.43 on Friday, valuing Spirit at $2.21 billion.
Mr. Baldanza said he is not done and wants to grow the fleet to 150 planes within five years and account for about 3 percent or 4 percent of traffic. He likens his airline to Southwest in the mid-1980s, when the low-cost airline was the industry’s maverick.
Like Southwest before it, Spirit achieves significant savings from its bare-bones operations. This explains why the airline charges for water on board, since carrying bottles has a cost that Mr. Baldanza refuses to pay. “If you can do it yourself, it’s free,” he said. “If we have to do it, you’ll pay for it.” 
Another way Spirit cuts costs is by packing more passengers on its plane, which all have 178 seats, while similar models on US Airways and JetBlue have 150. This allows Spirit to spread its costs. Its planes also fly longer each day — nearly 13 hours, allowing for more flights. Southwest, by contrast, flies its planes about 10.4 hours a day.
At La Guardia, Spirit operates 12 flights every day out of a single gate. Passengers are not given many scheduling options either.
“We schedule our flights when the gate is available as opposed to when the customers want to fly,” Mr. Baldanza said. “It doesn’t matter that no one wants to fly at 9 a.m. or 2 p.m. or in the middle of the night. The reality is that they want to fly when they get the low fare.”
Spirit also makes sure its flights are always full and sets its prices accordingly. (There’s a joke inside the airline that empty seats don’t check bags, Mr. Baldanza said.) As a result, it costs Spirit just 10.15 cents to fly one passenger for one mile, compared with United’s 18.25 cents and Southwest’s 11.08 cents.
Spirit was the first airline to charge for checked bags, in 2007, a move others eventually followed. 
Last year, airlines collected $6 billion just from checked bag fees and reservation changes, up from $1.4 billion in 2007, according to the Department of Transportation.
Spirit was also the first airline to charge passengers for their carry-on bags, but that’s still a red line few have dared to cross except for Allegiant Airlines and Frontier.
The big question is whether travelers will eventually push back on fees.
“People don’t like the extra fees, they don’t read the fine print and they get mad,” said Ann Sheaffer, an accountant checking in for a Spirit flight to Dallas/Fort Worth International Airport. “But it’s all there in black and white. You just have to read it and understand it.”
(Jad Mouawad - The New York Times)

John Wayne Orange County Airport (SNA/KSNA) posts April statistics

Airline passenger traffic at John Wayne Airport increased in April 2013 as compared to April 2012. In April 2013, the Airport served 764,308 passengers, an increase of 5.1% when compared to the 727,523 passenger traffic count of April 2012.

Commercial aircraft operations increased 3.8%, while Commuter aircraft operations increased 5.9% when compared to the levels recorded in April 2012.

Total aircraft operations decreased in April 2013 as compared to the same month in 2012. In April 2013, there were 21,058 total aircraft operations (take-offs and landings), a decrease of 3.7% when compared to 21,861 total aircraft operations in April 2012.

General aviation activity, which accounted for 66% of the total aircraft operations during April 2013, decreased 7.1% when compared to April 2012.

John Wayne Airport
Monthly Airport Statistics - April 2013

% ChangeYear-to-Date
% Change
Total Passengers764,308727,5235.1%2,887,2172,705,1386.7%
Enplaned Passengers383,122366,6874.5%1,440,1131,350,3386.6%
Deplaned Passengers381,186360,8365.6%1,447,1041,354,8006.8%
Total Aircraft Operations21,05821,861-3.7%82,03084,324-2.7%
General Aviation 13,95315,025-7.1%54,19257,412-5.6%
Air Cargo Tons21,5461,5181.8%5,8055,5903.8%

International Statistics3 (included in totals above)

% ChangeYear-to-Date
% Change
Total Passengers29,7557,162315.5%111,89425,607337.0%
Enplaned Passengers14,8043,575314.1%54,53412,667330.5%
Deplaned Passengers14,9513,587316.8%57,36012,940343.3%
Total Aircraft Operations 30064368.8%1,218245397.1%
1Aircraft used for regularly scheduled air service, configured with not more than seventy (70) seats, and operating at weights not more than ninety thousand (90,000) pounds.
2All-Cargo Carriers: 1,346 tons
Passenger Carriers (incidental belly cargo): 200 tons
(Current cargo tonnage figures in this report are for March 2013)
3Includes all Canada and Mexico Commercial passengers and operations: Note: Mexico service was initiated by AirTran on June 3, 2012 and by Interjet on October 11, 2012.

Chinese consortium misses scheduled payment endangering purchase of ILFC

A Chinese group's purchase of ILFC, one of the world's largest plane leasing businesses, could collapse after insurer American International Group said on Friday it did not receive a scheduled deposit payment.

Under terms of the purchase agreement, the missed payment gives AIG the right to cancel the sale, though such a decision was not expected to be imminent. AIG declined to comment, while a spokesman for the consortium was not available to comment.

AIG said last December it would sell up to 90 percent of ILFC for up to USD$4.8 billion. Two weeks ago, the sides agreed to extend the deadline for the deal's closing by a month to mid-June.

The Chinese consortium is made up of New China Trust, which is one-fifth owned by Barclays; China Aviation Industrial Fund; and P3 Investments. An arm of Industrial and Commercial Bank of China, China's biggest bank, was meant to join the group once the deal had regulatory approval.

ILFC was the last key asset that AIG was attempting to dispose of following its government-backed restructuring. AIG first filed to take the business public in 2011, before ultimately agreeing on the direct sale last year.

With nearly 1,000 owned or managed aircraft, ILFC is one of the world's largest players in the leasing market.

But ILFC has been hurt after recording heavy charges in recent years to write down the value of older planes in its fleet. The sale price was about half of what AIG had once insisted the business should be worth.


Thomson Airways takes delivery of its first and second 787-8 "Dreamliner"

Thomson Airways 787-8 (34422/92) G-TUIA arrives at Manchester International (Ringway) (MAN/EGCC) following its delivery flight. The carrier also took delivery of its second 787-8 (34423/94) G-TUIB today (May 31).
(Photo by Nik French)

Thomson Airways has taken delivery of its first of eight Boeing 787s, the first to be delivered to a UK airline.

The aircraft will be placed into service July 8 on Manchester-Florida and Glasgow-Cancun routes. Thomson will also operate services from London Gatwick and East Midlands airports. Later this year, the airline will introduce direct flights to Phuket, Thailand from the UK.

The 787 will carry 291 passengers and is configured with 47 seats in the airline’s premium club cabin and 244 seats in the economy club cabin.

Thomson Airways is part of the TUI Travel group of airlines and is the UK’s third largest airline operating 58 aircraft.

(Linda Blachly - ATWOnline News)

Aeroflot takes delivery of its first completely up-graded Sukhoi Superjet 100 (SSJ100)

Aeroflot has taken delivery of its first Sukhoi Superjet 100 in full specification.

The airline has 30 of the type on order in standard specification, which is a single-class cabin with 98 seats. The airline, however, changed its order to include full specification that includes an upgraded flight management system and weather radar with a wind direction detection function.

The full SSJ100 also features additional video control cameras, separate lighting controls for business and economy classes. An additional working flight attendant position at the back near the galley is added.

The full version also offers three lavatories with diaper changing boards, and has upgraded galleys from three to four, one of which is equipped with two ovens.

(Kathryn M. Young - ATWOnline News)

Lufthansa eyes new routes for 747-8I fleet

Lufthansa, which took delivery of its seventh Boeing 747-8I Thursday, is considering introducing the aircraft on its daily Frankfurt-Chicago O’Hare services. It may also use it on the Frankfurt-Miami route as a seasonal exchange with the Airbus A380.

A spokesperson told ATW that 747-8I routes to Mexico City and Sao Paolo are also under consideration.

 Lufthansa 747-830 (37827/1443) D-ABYA arrives at Los Angeles International Airport (LAX/KLAX) on January 19, 2013. 
(Photo by Michael Carter)

Lufthansa currently operates the aircraft type to Los Angeles, Washington Dulles, Hong Kong, Bangalore and Delhi. The carrier introduced 747-8I services last year.

(Kurt Hofmann - ATWOnline News)

Japan Airlines and All Nippon Airways (ANA) re-launch 787 service

ANA Holdings Inc. and Japan Airlines Co., the world’s biggest operators of Boeing Co. 787s, resumed commercial service with the plane after battery malfunctions kept the Dreamliner fleet grounded for more than four months.
ANA’s flight to Frankfurt took off at 1:17 a.m. today from Tokyo’s Haneda airport, according to Houston-based industry data tracker JAL’s flight to Singapore departed at 1:22 a.m., according to FlightAware.

The carriers, which have a total of 27 Dreamliners, are flying the fuel-efficient aircraft to cities such as Boston and San Jose, California, that wouldn’t be profitable with larger planes. Suspension of 787 services would affect sales this year, ANA and JAL have said, after melting batteries on two jets spurred regulators to park all the planes in January.
“The restart of flights without any hitches is a good sign for the airlines,” said Osuke Itazaki, an SMBC Nikko Securities Inc. analyst in Tokyo. “To increase the top line, the airlines need to increase their destinations, which they can do with the 787.”
Japan has been the biggest market so far for Boeing’s plane, the first jetliner made chiefly of composite plastic materials. That meant ANA and JAL had the broadest disruptions while the aircraft were grounded and Boeing was rushing to find a fix for the lithium-ion batteries.

Among the eight Dreamliner operators, Ethiopian Airlines Enterprise began flying again in April while Qatar Airways Ltd., Air India Ltd. and United Continental Holdings Inc. resumed service last month. LOT Polish Airlines SA said May 17 it would resume Dreamliner flights on June 5.

Emergency Landing

ANA fell 1.8 percent to 213 yen at close of Tokyo trading yesterday. The stock has gained 18 percent this year, compared with a 33 percent advance in the Nikkei 225 Stock Average and JAL’s 41 percent gain.

One of ANA’s 787s made an emergency landing on Jan. 16 after smoke from a lithium-ion battery was detected. Nine days earlier, a battery had caught fire on a JAL 787 in Boston. No one was injured in either incident.

The U.S. Federal Aviation Administration ordered 787s in domestic service grounded, the first such action for an entire model since 1979, and regulators around the world followed suit. The Dreamliner is the only large commercial jet equipped with lithium-ion batteries as part of its power system.

The groundings may have reduced ANA sales by about 16 billion yen ($159 million), according to figures from the company. JAL’s probably lost 6.5 billion yen in sales due to the groundings, it has said.

More Protection

Boeing redesigned the battery to include more protection around individual cells to contain any overheating, added a steel case to prevent fire and a tube that would vent any fumes outside the fuselage. Carriers began 787 test flights after the FAA approved the battery upgrades.

The 787 is safe to fly, even as the cause of the battery meltdowns remains uncertain, Mike Sinnett, vice president and chief project engineer of the 787 program, said in April.

ANA received its 19th Dreamliner last month, while JAL has eight 787s, the airlines have said separately. ANA has orders for 66 Dreamliners, while JAL has ordered 45.

(Chris Cooper & Kiyotaka Matsuda - Bloomberg)

TUI Travel plans to add 60 737 Max aircraft to fleet

TUI Travel has signed a commitment for 40 Boeing 737 MAX-8s and 20 Boeing 737 MAX-9s, plus options on a further 90 aircraft.
TUI, which is parent to Thomson Airways, TUIfly, TUIfly Nordic, ArkeFly, Jetairfly and Corsair, described the deal as a significant multi-billion pound investment, but did not give an absolute value.

If the order is approved by TUI shareholders, deliveries will begin in January 2018 and run for five years.

TUI’s six airlines operate a combined fleet of 141 aircraft, including 114 narrowbodies. The new Boeing 737s will be used throughout the group and will replace older aircraft. They will be deployed on short- and medium-haul leisure routes, including Spain, Greece and Turkey.

(Victoria Moores - ATWOnline News)

Boeing to move 300 jobs to Long Beach from Seattle

Boeing Co. said Friday it will create new aircraft-design centers in Washington state, South Carolina and California.
The company portrayed the new centers as a way to increase its engineering and propulsion capacity as demand rises for new aircraft and services. Boeing predicts that the world's airlines will need 34,000 new planes over the next 20 years, a potential $4.5 trillion market.
The three new design centers will compete with each other on cost and engineering know-how. 
"We fully expect them all to thrive," said Boeing spokesman Doug Alder. "There's a lot of work coming."
Chicago-based Boeing also has a design center in Moscow. On Friday, it said it's considering supplementing that with one in Kiev, Ukraine.
The company said that it would move most support for planes no longer in production away from Puget Sound in Washington to Long Beach, Calif., in the next six to nine months.
The move affects work on planes such as older 737s still used by Southwest Airlines and other carriers, and 757s still used by American Airlines. The Long Beach facility already works on out-of-production McDonnell Douglas airplanes such as MD-80s.
Boeing said 300 jobs in Puget Sound would move to Southern California. The company said employees could apply for their jobs but relocation costs were not guaranteed.
In addition, the company said its commercial-airplanes unit would open a facility in South Carolina to work on improving performance of future airplanes, starting with the engine nacelles, or housing, on a future version of the 737 called the 737 MAX. Boeing currently uses an outside supplier for that work.
"With these changes, we are structuring Boeing's engineering operations to support that growth, reduce business risks and to consistently provide the products and services our customers expect," Mike Delaney, vice president of engineering for the commercial airplanes division.
Boeing and the union representing its engineers recently approved a new labor contract after months of bitter negotiations. Delaney warned the union last fall that the cost of its demands could cause the company to look elsewhere for engineering work on future airplanes.
Alder said the negotiations were not a factor in Friday's announcement.
"This has been in the works for three years, long before those negotiations even started," the Boeing spokesman said.
Shares of Boeing fell 48 cents to $100.06 in afternoon trading.

(Associated Press)

Thursday, May 30, 2013

Lufthansa Cargo utilizes ultra light containers to reduce CO2 emissons and fuel consumption

Lufthansa Cargo is using containers made of lightweight composite materials to reduce fuel consumption.

New LD3 standard containers with side panels made of reinforced polypropylene honeycomb are up to 15% lighter than their standard aluminum counterparts. They are also more robust and require fewer repairs.

Lufthansa Cargo has been replacing its aluminum containers with the lightweight versions and by February, more than 65% of the LD3 containers used on the lower cargo deck of the passenger and cargo aircraft in the Lufthansa Group fleet were new-generation containers.

The difference in weight is approximately 28 pounds per container, resulting in an annual reduction in CO2 emissions of more than 5,000 tonnes.

Lufthansa was the ATW 2012 eco-Airline Gold winner.

By the end of 2013, Lufthansa Cargo aims to replace all its 5,600 LD3 standard containers with the lighter alternative, which will lower annual fuel consumption by as much as 2,160 tonnes, saving about 6,800 tonnes of CO2 per year.

Lufthansa Group will then operate one of the largest “fleets” of ultra-light containers worldwide and move the company a step closer towards meeting one of its ambitious environmental targets: to reduce specific emissions by the year 2020 by 25% compared with 2011.

(ATWOnline News)

All 787 battery retro fits completed

Boeing has finished replacing the problematic lithium-ion batteries in its 787 Dreamliner jets, according to a report.

The 787s that had already been built had to be retrofitted with the new design of battery which involved spacing out battery parts and encasing them in stainless steel so little oxygen can get to them, the Los Angeles Times reported.

Randy Tinseth, Boeing’s vice president of marketing for commercial planes, revealed that the retrofits had been completed on a company blog post on Wednesday.

He wrote that most of the airlines -- including United -- have begun 787 commercial flights again.

"Six of our eight in-service customers have returned to passenger service, with the others following in just a matter of days," he wrote. "We can't thank all of them enough for their patience, partnership and support over the past several months."

All 787s were grounded after a battery fire broke out January 6 on a parked 787 operated by Japan Airlines at Boston's Logan Airport and a second battery incident occurred less than two weeks later on an All Nippon Airways flight in Japan.

The US Federal Aviation Administration then grounded the planes and foreign government aviation agencies followed suit.


Boeing claims the 737 Max will acheive better fuel savings than first advertised

Boeing said on Thursday it is confident its new 737 MAX passenger jet will burn 13 percent less fuel than current 737 models, a figure that exceeds earlier estimates.

At a press briefing, Boeing said its forecast is based on computer models and wind tunnel tests. The plane is due to enter production in 2015 and be delivered to customers in 2017. The 737 MAX is the latest narrow-body plane by Boeing and competes with the Airbus A320neo.

Boeing said it expects to publish a "firm configuration" for the MAX in July. The plane maker is already reorganizing the 737 factory in Renton, Washington, to make room for production of initial 737 MAX test planes in 2015. The first flight and flight testing are scheduled to occur in 2016.

Airbus launched its aircraft about nine months before Boeing and has about 2,125 firm orders for its A320neo family of planes, compared with 1,376 firm orders for the 737 MAX.

"I think it's still early," said Keith Leverkuhn, vice president and general manager of the 737 MAX. "We're very confident... that the market share will actually reach parity over time."


DC-9-15 returns home to Long Beach Airport

C & M DC-9-15MC (47055/194) N563PC rolling for takeoff on Rwy 30 at Long Beach Airport (LGB/KLGB) bound for General Ignacio Pesqueira Garcia International Airport (HMO/MMHO) in Hermosillo, Sonora Mexico on May 30, 2013.
(Photo by Michael Carter)

Singapore Airlines announces order for 60 aircraft

Singapore Airlines said Thursday that it ordered 60 new planes from Boeing and Airbus that carry a combined list price of more than $17 billion.
The orders were evenly split — 30 planes from U.S.-based Boeing and 30 from Europe's Airbus. Airlines typically get deep discounts on planes, and Singapore did not say how much it will pay the manufacturers.
For Boeing, it was the first announcement from an airline about the proposed longer version of its 787, which the company calls the Dreamliner. Singapore said that the order was conditioned on Boeing actually launching the 787-10X. If Boeing produces the plane, Singapore would take deliveries starting in 2018-2019 and use them on medium-range routes.
The order for an aircraft program that hasn't even been launched yet was good news for Chicago-based Boeing, which suffered through a 4-month, worldwide grounding of the first 50 Dreamliners after lithium-ion batteries overheated in two of the planes. Boeing made changes in the battery systems that won approval from the U.S. Federal Aviation Administration, and the planes resumed flying this month.
In a statement, Boeing said it "welcomes Singapore Airlines' interest in the 787-10X, and we look forward to continuing discussions with the airline to satisfy their fleet requirements."
Boeing has 890 firm orders for other models of the Dreamliner.
In afternoon trading, Boeing shares rose $1.77, nearly 2 percent, to $100.86.
Singapore called the Boeing-Airbus order among its largest ever and said it gave the airline room to grow while updating its fleet.
The orders "demonstrate our commitment to the Singapore hub and our confidence in the future for premium full-service travel," said CEO Goh Choon Phong.
Singapore, a premium airline, is facing competition in Asia from fast-growing, low-fare airlines including Lion Air of Indonesia and AirAsia of Malaysia, which have also announced large aircraft orders, and from state-backed airlines in the Middle East such as Emirates and Etihad.
The weak global economy has weighed on Singapore's recent financial results. It reported this month that net income in the fiscal year ended March 31 rose 13 percent, thanks to sales of surplus planes and engines, but operating profit fell 20 percent.
Besides the Boeing jets, Singapore said it would get 30 Airbus A350-900 aircraft beginning in 2016-2017 and placed options for 20 more. The options could be converted to a slightly larger model, the A350-1000.
Coming on top of previous orders, Singapore now has committed to buy 70 of the A350s, which it plans to use on medium-range and long routes. Airbus is owned by European Aeronautic Defence and Space Co., or EADS.
Singapore Airlines now has 126 firm aircraft orders with the two big manufacturers.

(Associated Press)

Tuesday, May 28, 2013

Cesair Inc. G450 visits Long Beach

Operated by Cesair Inc., this lovely G450 (c/n 4250) N450CE is captured on short final to Rwy 30 at Long Beach Airport (LGB/KLGB) on May 28, 2013.
(Photo by Michael Carter)

Sunday, May 26, 2013

Solving the FAA buget problems the Obama way

The cost of flying might be going up, but this time it's not the airlines raising prices.

The Obama administration has proposed raising the taxes on air travel by about $14 per flight, a move airlines strongly oppose.
Higher taxes are needed to help reduce the deficit, pay for improvements at the nation's airports and add thousands of new immigration and customs officers to reduce wait times to process foreign visitors, the administration says.
Airlines say higher taxes will backfire and hurt the economy.
"Our fragile economy and the millions of middle-class Americans who rely on air travel and shipping every day simply cannot afford tax increases that will drive up the cost of flying or limit service options to small communities across the country," said Nicholas E. Calio, president and chief executive of Airlines for America, the trade group for the nation's airlines.
Congress ignored similar hikes proposed by the Obama administration last year. Since then, the airlines themselves raised fares 3%, from an average of $364 in 2011 to $375 last year, according to the U.S. Bureau of Transportation Statistics.
But airline industry representatives say there is a difference between a fare hike and a tax increase.
Fare increases are used by the airlines to reinvest in services to passengers — such as buying new planes, said Katie Connell, a spokeswoman for Airlines for America.
"A tax or fee imposed by a third party that keeps the money does nothing for our customers," she said, adding that most airlines earn an average profit of 37 cents per passenger.
But some industry experts say the proposed rise in taxes would only help keep up with inflation.
"It's an inflationary adjustment," said George Hobica, founder of the travel website "It's not going to discourage anyone from flying."
Life is not always smooth flying for airline executives, even with relatively stable profits and growing demand.
Take Ben Baldanza, chief executive of Spirit Airlines, the Florida-based no-frills carrier. He had been scheduled to appear on CBS' "This Morning" show Wednesday. By coincidence, the latest survey by Consumer Reports was released that same day.
The consumer survey ranked Spirit dead last, and Baldanza was suddenly in the hot seat, asked to defend an airline that got a 50-point rating on a 100-point scale. He argued that price, not comfort or service, is the most important factor for fliers who choose Spirit.
"It worked out well because it gave us the opportunity to respond to being last on the list," said Spirit spokeswoman Misty Pinson.
Baldanza wasn't the only airline executive feeling the heat last week.
American Airlines' vice president for customer care, Don Langford, agreed to field questions from passengers live on the airlines' Twitter page. Not all the questions were friendly.
One passenger asked why she can't get a blanket when flying in the economy section. Another flier said he saw a baggage handler throw his luggage onto a conveyor belt, and a third wondered why American Airlines fares are not as low as fares on Southwest Airlines.
Langford responded that blankets are not in high demand in the economy section, and he promised to report the reckless baggage handler to a supervisor.
As for the fares on Southwest, Langford offered the price-sensitive passenger a link to a website to search for fares on American Airlines, adding, "I hope you find one that works for you."
If you stay at any of the Hilton Hotels & Resorts, Double Tree or Embassy Suites hotels in North, South and Central America, you will find only one brand of coffee and tea in each room.
Hilton Worldwide, one of the world's largest hotel chains, has signed an exclusive agreement with Los Angeles-based Coffee Bean & Tea Leaf to provide the coffee and tea in the sealed packets that guests find in their rooms, starting this summer.
But if you are a fan of Starbucks or Seattle's Best, don't fret. The agreement won't push out any coffee outlet that already operates in the hotels' lobbies or restaurants.
"This is a way to shake things up for our guests without removing any walls," said Jim Holthouser, executive vice president, global brand, for Hilton Worldwide.
One reason for the agreement, he said, was that Hilton will save money by buying in bulk.
Holthouser wouldn't say how much the hotel chain would save, but he noted that guests at the three major hotel brands drink more than 100,000 cups of in-room coffee per day.
"You are talking about going through a whole lot of this stuff," he said.
(Hugo Martin - Los Angeles Times)

Thursday, May 23, 2013

New G650 delivers from Long Beach Airport

Gulfstream G650 (c/n 6022) N650HC ex N722GA rolls for take-off
then rotates from Rwy 30 on her delivery flight May 23, 2013.
(Photos by Michael Carter)

Starbucks new G550

Starbucks Corporation G550 (c/n 5412) N412GA tbr N721V arrives at Long Beach Airport (LGB/KLGB) on May 22, 2013 following a pre-delivery test flight.
(Photo by Michael Carter)