A Boeing 757 landed on the blue-ice runway in Antarctica for the first time

Icelandair Boeing 757-208 (28989/780) TF-FIN "Eldborg" touches down in Antarctica.

In this age of modern air travel, it is relatively easy for anyone with the means to book a flight to almost any corner of the Earth.

Unless that corner is Antarctica, a place where you cannot simply pave a runway and start landing planes.

In Antarctic locations such as Union Glacier, the runway is blue ice: dense, intensely blue glacier ice formed when snow falls onto glaciers, gets compacted and recrystallizes. This is generally a place for cargo and military jets, such as the Russian Ilyushin.

But commercial jets are making progress — and the Icelandic airline Loftleidir landed the first Boeing 757 on the blue ice runway at Union Glacier on Thursday.

The flight "was undertaken to prove the feasibility of landing commercial passenger airliners at Union Glacier," the airline said.

Antarctic Logistics & Expeditions (ALE), Loftleidir Icelandic and NAS Corporation Limited had been working toward the landing for seven months.

"ALE is researching the potential for utilizing conventional passenger airliners in addition to passenger/cargo combination aircraft," according to a blog post from ALE subsidiary Adventure Network International.

"The Boeing 757-200 ER, fitted with 62 business class seats, will enhance passenger comfort yet maintain the safety of ALE’s activities and aircraft resources."

ALE takes around 500 visitors to Antarctica each season on small group "experiences." Typical destinations include Antarctica's highest peak, Mount Vinson; the South Pole; and emperor penguins on the Weddell Sea coast. The company also supports many research projects.

"By extending the range of aircraft that can be used to support visitors and scientific research, ALE has expanded its evacuation capabilities, further ensuring safe and environmentally responsible operations," the company said in a statement.

While a milestone, the Boeing 757 landing was not the first commercial jet to land in Antarctica (though it was the first at Union Glacier, , according to Leeham News and Comment).

In 2008, an Australian group flew a commercial Airbus A319 from Hobart to the research station of Casey, Antarctica.

(Jessica Plautz - Mashable)

Delta Will Not Mothball Boeing 757s in Favor of New 737-900ERs

When Delta Air Lines pilots rejected the company’s contract offer this past summer, the company said it would not go ahead with a promised purchase of 20 used and 40 new single-aisle planes from Boeing. The airline was set to buy 40 new 737-900ERs, the closest thing Boeing sells to the 757s that Delta wanted to retire.

Delta’s cancellation of the order for new 737-900ERs cost Boeing at least $4 billion at list prices. The airline had offered to buy the Boeing jets and the smaller E190 regional jets from Embraer as an incentive to get its pilots to go along with the contract offer. These smaller planes would have required more pilots, but the new pilots would have been paid on a different scale from current pilots.

Boeing’s narrowbody 757, which went out of production in 2005, flew what the industry calls long, thin routes, carrying some 200 passengers distances of around 4,000 to 5,000 nautical miles.

United and American both operate 757s across the Atlantic, and the longest commercial flight currently flown by the 757 connects New York non-stop with Berlin, a distance of slightly more than 4,000 nautical miles. The 757 can only fly this far with fewer than 190 passengers.

Delta has been flying its 757s both internationally and domestically. The airline currently includes 119 of the 757-200s and 16 of the 757-300s in its fleet. The -200s have an average age of 20.4 years and the -300s have an average age of 12.6 years. The oldest -200 airframe in the fleet flew its first flight in August of 1985, just over 30 years ago. All told Delta still flies seven -200s that were built in the 1980s.

Boeing has been considering a replacement for the 757, but has not yet announced a decision. Rival Airbus announced a new version of its A321 narrowbody jet last summer, the A321LR, which the company says is aimed precisely at the so-called ‘Middle of Market’ segment that has been defined and owned by the 757.

Fortunately for Boeing the Airbus A321LR has some problems. United Airlines believes the plane’s capacity is too small. United’s 757s fly 169 passengers and American’s planes are set-up to fly 179 passengers, compared with 164 for the A321LR.

Boeing’s customers are interested in a plane that carries 250 passengers on routes of five to nine hours, according to a June report at The Wall Street Journal. The 787-9 has a capacity of 250 to 290 and the 787-10 is even larger. And the range is much longer than needed. That adds up to planes that cost too much. Even the 787-8, with a capacity ranging from 210 to 250, has a specified minimum range of 7,650 nautical miles, a third more than the long, thin routes the 757 serves.

When Airbus launched its A321LR in January it saw a market size of about 1,000 evenly divided between new planes and replacements for the 757. Boeing has not yet said how big it thinks the market for the replacement might be, but the company built 1,050 of the original.

Delta’s contract with its pilots is targeted for revision by December 31st, but will remain in place even if the deadline passes. A strike is possible, but would be unusual.

(Paul Ausick - 24/7 Wall St.)

Singapore's BOC Aviation orders 22 Boeing 737 jets

BOC Aviation the aircraft leasing arm of Bank of China Ltd , on Tuesday said it has signed an agreement to buy 22 Boeing 737 jets.

The order is worth $2.27 billion at Boeing's list prices, although customers typically receive a discount.
 

The deal is equally split between 737-800 and 737 Max 8 aircraft, to be delivered over three years from 2018, BOC said. The 737 Max is the upgraded version of the 737, offering greater fuel efficiency and lower operating costs.

Boeing, in a separate statement, said it will add the planes to its order book when the deal is finalized.

The latest deal is in addition to BOC Aviation's August 2014 order for 82 Boeing jets worth $8.8 billion at list prices, comprising 50 737 Max aircraft, 30 737-800s and two 777-300ER wide-body jets.

The Singapore-based lessor also ordered 43 Airbus A320 family of aircraft in July last year, including seven A320neo planes.

BOC Aviation said it had commitments to acquire 203 aircraft as of Sept. 30. Its portfolio comprises 253 owned and managed aircraft, operated by 59 airlines globally.

Airlines are increasingly reliant on lessors such as BOC Aviation as they seek to lower capital costs.

(Siva Govindasamy - Reuters)

EVA Air signs deal with Boeing for 18 787-10 "Dreamliners"

Chang Kuo-wei (L), Chairman of Taiwan's Eva Air, receives a Boeing 787 model plane from John Wojick, Boeing president, in Taipei on November 24, 2015.

(AFP Photo/Sam Yeh)

Taiwan's EVA Airways signed a deal on Tuesday worth more than $6 billion for 26 Boeing jetliners, making it the island's biggest ever single commercial plane purchase.

The Taiwanese carrier will buy 18 787-10 Dreamliners -- Boeing's most recent model in its family of long-haul jets -- and two 777-300ER (extended-range) aircraft.

The agreement also gives EVA Airways the option to buy six more 787s.

The order is the largest ever single commercial airplane purchase in Taiwan aviation history, Boeing said in a statement Tuesday.

"With the 787 being the most technologically advanced airplane in the world today, (EVA is) certainly moving up on the innovation scale and revolutionising air travel once again in Taiwan," Boeing vice chairman Ray Conner said at the signing ceremony in Taipei.

"Taiwan has an advantage in its geographic location. We are very positive on the future development of civil aviation here," added EVA Airways president Austin Cheng.

 

The expanded fleet will help EVA compete with regional rivals and add routes in new markets including North America, he said.

 

EVA chairman Chang Kuo-wei declined to say how much will be paid for the planes -- to be delivered starting 2017 -- but only that Boeing gave a "very good price."

 

The $6-billion price tag is according to current list prices, Boeing said, though aircraft manufacturers usually offer special deals on large orders.

The airline was choosing between the 787 and Airbus' A350, but settled with Boeing because the specifications were "more suitable", Chang said.

EVA Airways is one of the two main airlines in Taiwan and currently operates more than 37 Boeing aircraft. Its 69-strong fleet also includes 30 Airbus planes.

 

While relatively unknown outside the region, the Taiwanese carrier has differentiated itself with planes featuring the iconic Japanese cartoon character Hello Kitty.

(Yahoo News / AFP News)

American Airlines Boeing 737-823 (33227/4322) N915NN

American Airlines is in the process of painting several Boeing 737-823's in the liveries of the airlines that the carrier has bought over the years.

 

So far two aircraft have been painted in "Retro" liveries, the first receiving the livery of Reno Airlines and the second pictured above sporting the Trans World Airlines (TWA) livery. It is captured at John Wayne Orange County Airport (SNA/KSNA) this morning as it prepares to depart bound for Dallas (DFW/KDFW), Texas.

 

(Photos by Michal Carter)  

Boeing 747 Breaks Out of Its Sales Slump

2015 has not been a good year for sales of Boeing's 747 jumbo jet.

Prior to this week, Boeing had recorded orders for just four Boeing 747 aircraft from its customers.
 
Sad to say, all four of those new orders were balanced out by cancellations of older orders for the plane, leaving Boeing with precisely zero net new orders for one of its marquee aircraft -- until now.

On Thursday, Boeing confirmed that "unidentified customer(s)" have placed orders for two new 747 jumbo jets. Boeing didn't say who bought them, just that the orders are in the book now -- and that they're "firm."

Additionally, Boeing recorded a pair of new 737 single-aisle plane orders, also from an unidentified customer(s) -- maybe the same buyer, maybe not. In any case, that news is a bit less interesting than it sounds, because Boeing noted that it also suffered a pair of 737 "cancellations."

Now, experience has taught us that when equal numbers of 737 orders and cancellations show up simultaneously in a Boeing report, that usually means that someone who had previously ordered 737 NG aircraft has upgraded their request for Boeing to deliver 737 MAX aircraft instead. So until proven otherwise, that's what we're going to assume happened here as well.

The order book

As of mid-November, Boeing's order book now looks like this:

• 416 "gross" orders for single-aisle 737s
• 79 Dreamliner 787s
• 56 widebody 777s
• 48 Boeing 767s
• and now six new 747s

In total, that's 605 gross plane orders for Boeing. Minus 79 cancellations, Boeing's net order tally for the year is now 526 planes.

In other news

That right there is already pretty good news for Boeing. For the fifth straight week, Boeing has recorded positive growth in plane orders. For five weeks in a row, it's closed the gap between itself and Airbus in total order growth for 2015. Mind you, Airbus still leads Boeing by a sizable margin at last report -- 850 net orders to Boeing's 526 -- but at least the lead is narrowing. And it could contract even further.

Not showing up on Boeing's order book this week, but reported in company press releases, Boeing has confirmed that unidentified customers in Asia and the Middle East have placed orders for four new BBJ MAX 8 aircraft, the business jet configuration of Boeing's popular 737 MAX 8.

Finally, in additional Boeing 747-related news, the company says it has delivered just two Boeing 747-8 to Russian customer AirBridgeCargo (ABC) Airlines, part of the Volga-Dnepr group. (So for better or worse, the economic sanctions against Russia aren't doing much to slow Boeing's business down.) At a list price north of $379 million each, these planes are the second most expensive in Boeing's lineup.

Each 747 sold brings in more revenue than three of Boeing's popular 737 MAX 8s, combined. (They're more expensive than any plane in Airbus' lineup, too, barring only the megamassive A380-800 -- which isn't currently offered in a freighter version.)

Which is not to say that ABC would even consider buying an Airbus. To the contrary, with these 747s now in inventory, ABC's all-Boeing fleet now boasts no fewer than 15 747s -- eight 747-8s, five 747-400s, and a brace of 747-400s. And according to Boeing, its deal with ABC "calls for [even] more 747-8 Freighters" to be delivered in the future.

How many more, and what will they all mean for Boeing's bottom line? Stay tuned.

(Rich Smith - The Motley Fool)

Boeing begins careful launch of first robot assembly on Everett 777 line

(Anthony Bolante-Puget Sound Business Journal)

Boeing is starting to implement robotic fastening of 777 fuselage panels, the beginnings of what will be a significant shift toward robotization of the upcoming 777X.

 

Since September, Boeing workers have been drilling and fastening some fuselages using what the company calls the Fuselage Automated Upright Build system, or FAUB, Boeing spokeswoman Elizabeth Fischtziur confirmed Tuesday.

 

“We began to use the new technology in production in late September on some fuselages,” she said. “Other fuselage sections continue to be built using traditional methods.”

 

The careful shift toward robotic assembly of 777 fuselages is a critical piece of Boeing’s move toward more automation as a way to cut costs, improve quality and reduce physical stress on workers.

 

Lower costs will mean lower prices, key as Boeing competes against rival Airbus. This could become even more important if Airbus does decide to build an even-larger version of the A350 wideb-ody, which might compete more directly against Boeing’s planned 400-passenger 777-9.

 

The robots are doing their work in a 200,000-square-foot expansion to the primary assembly plant, on that building’s southeast corner. Boeing finished that structure this year, to house the KUKA robots that are drilling and fastening the fuselage sections. Each fuselage requires about 50,000 fasteners.

 

Once complete, those sections are being rolled through the plant to mesh into position on the 777 assembly line, replacing sections drilled and fastened in the more traditional hand-labor approach.

 

“The project is the latest in a series of 777’s automation improvements, part of its Advanced Manufacturing strategy, which have already included the use of robotics to paint wings and other drill operations,” Fischtziur said.

 

The careful part is Boeing’s multi-step approach to implementing the new robotic technology. The methodical approach is a tactic to avoid the production snarls that wounded the 787 Dreamliner. In that case Boeing introduced new airframe materials simultaneously with a new way of assembling them, and the combination proved too much to smoothly absorb.

 

In this case, Boeing is gradually implementing the FAUB system onto the existing 777 line. The goal is to have the system honed by the time Boeing starts assembling the first 777X aircraft, with their new carbon composite wings and new engines, by 2017.

 

Boeing will start building the 777X on what is now called the “surge line,” in Everett. That line had been used as a third line for 787 assembly as Boeing tried to catch up to 787 production.

 

The robots have been developed and supplied by KUKA Systems, a division of unit of KUKA AG, a German company that generated $2 billion in revenue last year.

 

KUKA Systems is working out of a 30,000-square-foot Everett facility, which is opened in late 2014 to meet the needs of Boeing and other West Coast manufacturers.

 

(Steve Wilhelm - Puget Sound Business Journal)

Flexjet Boosts Supersonic Bizjet Plan with Aerion AS2 Order

Aerion AS2 supersonic business jet

(Aerion) 

Fractional-share provider Flexjet signed a firm order at NBAA 2015 for 20 Aerion AS2 supersonic business jets for delivery beginning in 2023. The deal, worth $2.4 billion (2015 $) at list prices, is backed by a nonrefundable deposit.

Aerion chairman Robert Bass declined to say how many total orders or letters of intent the company possessed or how many it would need to put the AS2 into production. “When an organization like Flexjet makes a decision, it is after much thought and study,” he said. “And we are very pleased they have selected the Aerion AS2.”

Bass also declined to say if Airbus had invested in the company. Last year Aerion and Airbus announced a technology-sharing agreement. Bass did say that, under the terms of that agreement, Airbus could manufacture components of the AS2.

“Being on the leading edge of something that is supersonic is a very exciting thing to do,” said Flexjet CEO Kenn Ricci. “We have a lot of confidence in Bob [Bass] and his team to bring this project to market. We are going into the international market; that was one of our goals when we bought Flexjet two years ago. As we go into that market we realize that there is not a ‘one size that fits all’ for our clients.”

Ricci said Flexjet has programs where customers can buy access to larger and more capable aircraft on a selected basis, and that is where he sees a supersonic business jet fitting the bill for his company and its customers, being able to access a supersonic business jet when speed matters.

“We did run this by our clients and we were amazed by the interest we had from very large corporate customers,” Ricci said, adding that before this consultation Flexjet had only intended to order 10 AS2s.

(Mark Huber - AINOnline News)

Delta CEO Is Right -- Used Boeing 777-200s Are Worth Just $10 Million, Expert Says

It turns out Delta CEO Richard Anderson was right about the value of used Boeing 777s, according to a leading airline and aerospace consultant.

On Delta's Oct. 14 earnings call, Anderson said the used aircraft market is glutted with used Boeing 777s and becoming more so. Anderson said he sees "a huge bubble in excess-wide-body airplanes around the world," creating a market for 10-year-old 777-200s at about $10 million.

The claim was disputed by Boeing CEO Dennis Muilenburg during the company's Oct. 21 earnings call and by American CEO Doug Parker on the carrier's Oct. 23 earnings call, while a JPMorgan report said the claim was partially right.

But in an article posted Monday in Leeham News and Comment, which he publishes, aviation and aerospace consultant Scott Hamilton wrote that Anderson is right.

Actual market values for 10-year old Boeing 777-200ERs are around $10 million, not the $50 million-ish suggested by Boeing and professional appraisal firms," Hamilton said. "This is the conclusion of our market intelligence of real-world demand for these airplanes, not some theoretical book appraisal.

"The costs involved in reconfiguration and maintenance, repair and overhaul (MRO) simply upend traditional expectations," he said, noting that the low values apply to used 777-300ERs as well as to used 777-200s.

"These stunning conclusions are based on LNC's Market Intelligence involving advisors and lessors dealing with transactions across the globe," Hamilton said. "Simply speaking, throw the books away on the appraisals (because) airlines, or lessors to the airlines, who want to dispose of 777-200ERs aren't finding any homes for them at anything remotely close to appraised or book values."

Hamilton said "used 777-200ERs can't be given away, reducing values to scrap regardless of book values carried by owners or appraisers," while late-model 777ERs face "a sudden glut" that has reduced lease renewal rates to of late-model 777s.

Meanwhile, the Rolls-Royce engines, caught up in manufacturer's maintenance programs, "make traditional engine valuations irrelevant," he wrote.

In an interview, Hamilton said: "It used to be that scrapped airplanes often had nearly all their values in engines, which could be either brought back to full value through an independent [maintenance check] or parting out. Now with engines in the Rolls Royce Total Care program, Rolls Royce controls the aftermarket."

On the Boeing earnings call, the last question addressed the 777 glut. Muilenburg responded with a reference to "the note around $10 million 777s that might be available."

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"I'll say just based on our understanding of the marketplace and what we understand from our customers, that number is the wrong order of magnitude," Muilenburg said. "And, frankly, the value of the 777 is holding up very well in the marketplace. It is a unique airplane. In that 365-seat category, there is no competing aircraft out there."

On the American call, a reporter asked Parker his view regarding "statements that a glut in the market for used wide-body airplanes may be approaching." Parker responded: "We're not confirming that comment, not sure we agree. But happy to talk about the American Airlines fleet plan and where we are."

In the JPMorgan report, analyst Jamie Baker wrote, "Based on recent data and our associated channel checks, reality falls somewhere between the most bearish interpretation of Delta's comments and continued bullish rhetoric from Airbus and Boeing." He added that aircraft appraisals "increasingly appear too robust."

Baker also noted that "commentary regarding a pending wide-body glut and attendant pressure on used B777/A330 values created turbulence for investors across aerospace and aircraft leasing."

Anderson's comments initially rocked Boeing shares, which fell 4% to close Oct. 14 at $134.22. The damage was not lasting. Shares closed Monday at $144.42, and are up 11% year to date.

Hamilton said "Anderson didn't pull his figures and comments out of his tailpipe. The conclusions were based on a year-long study by an independent, third-party company.

"We believe Anderson was right," he said. "The naysayers have more research to do."

(Tim Reed - The Street)

 

Boeing may increase 777X jet production, jobs in Everett

A report prepared by a state permitting agency shows Boeing sees the potential for a significant increase in jobs and airplane production in Everett once its new 777X wide-body jet comes online beginning in 2021.

A “draft technical support” document, released earlier this month by the state Department of Ecology, shows Boeing wants the option to sharply increase production from 100 of the current model 777 jets built per year today up to as many as 125 of the new 777X jets per year from 2021 onward.

The report also provides the company’s projection that “employment at Boeing Everett is expected to increase by no more than 3,000 employees as a result of the 777X project.”

That’s almost 10 times the expected employment boost discussed in the past.

However, the production rate and employment figures in the ecology-department report represent the upper bounds of the growth Boeing sees as possible rather than what is expected, said Boeing spokesman Scott Lefeber.

“As part of our normal business planning, the 777X program needs to anticipate any and all future possible requirements. Part of this evaluation requires Boeing to take action years in advance to ensure environmental permits, tools and parts are complete and ready to support our potential requirements,” Lefeber said.

“No future rate decisions beyond the current 777 rate have been made,” he added.

Production of the 777X will begin in 2017 and will initially proceed at a low rate to ensure a smooth production start. The first 777X jet is scheduled to be delivered in 2020.

Between now and then, Boeing executives have said they could decrease production of the current 777 model, from 100 per year to around 80 jets per year.

Some analysts have predicted that a drop-off in demand for the current model could force Boeing to cut production even more steeply, to as low as 60 jets per year.

Yet in preparation for a subsequent ramp-up once the 777X comes online, Boeing has to get its environmental permitting lined up.

To comply with relevant air-quality regulations, as soon as Boeing picked Everett to build its new 777X wing fabrication plant in 2014, it asked the state to provide air-pollution permits for its manufacturing plans at the highest possible production rates.

The 777X’s new composite-plastic wing is infused with epoxy resin that can generate harmful vapors during manufacturing. Likewise, large-scale painting and sealing of aircraft parts requires careful air-quality controls.

The ecology department released the technical document this month after Boeing asked for some amendments to the 2014 filing.

The agency approved additional equipment requested by Boeing on condition that overall emissions not increase beyond the levels approved in the 2014 plan.

The draft technical document amending the air-quality filing was first reported Friday by The (Everett) Herald.

The original filing was reported in June by aviation-trade magazine Flight Global.

As summarized in various documents, Boeing outlines two phases to its 777X manufacturing project.

Phase one is the introduction of the 777X model on a new assembly line and a slow increase in rate, combined with a corresponding, parallel reduction in rate of the current 777.

Phase two, “tentatively scheduled to begin in 2021,” envisages “further changes to the Boeing Everett facility with the intent of increasing the overall 777X production capacity.”

The document states that the intent of this phase is “to increase overall 777X production capacity to up to about 10.4 airplanes per month.”

For such a ramp-up in production, Boeing said additional composite tape layup machines for fabricating wing panels, supplied by local firm Electroimpact of Mukilteo, might be installed in the new wing- fabrication building and additional spray booths for coating or painting aircraft parts could be needed.

About 38,000 people work at the Everett wide-body jet plant building the 747, 767, 777 and 787 jets.

A Washington state study commissioned in 2013 estimated that almost 20,000 people at Boeing work directly or indirectly on the 777 program, including at other sites besides Everett.

The same study estimated that more than 9,000 further jobs at suppliers and vendors to Boeing in the state are generated by the 777.

(Dominic Gates - The Seattle Times)

Spirit Airlines Is Coming to Seattle: Watch Out Alaska Airlines!

In the past two years or so, Alaska Air has faced rapidly increasing competition in its hometown of Seattle from Delta Air Lines. This represented a significant threat to Alaska's profitability because most of its flights either depart from or arrive in Seattle.

Yet through a series of revenue-enhancing moves, terrific cost control, and a little luck in the form of lower fuel prices, Alaska has continued to deliver strong earnings growth. It may confront an ever bigger threat in the next few years, though. That's because ultralow-cost carrier Spirit Airlines announced last week that Seattle will be its next new market.

Alaska has weathered the threat from Delta

Delta decided in 2013 to build a hub in Seattle in order to provide convenient connections for travel between the western U.S. and Asia. This led to Delta entering a slew of nonstop markets from Seattle where Alaska Airlines was its main competition. By the summer of 2015, Delta was operating 128 peak day departures in Seattle, up from around 40 two years earlier.

Delta's rapid growth in Seattle has caused Alaska Airlines' unit revenue to underperform the airline sector for the past few years. Revenue per available seat mile (RASM) slipped 0.5% in 2013 before growing 0.9% in 2014. Year to date in 2015, RASM has dropped 5.4%.

Nevertheless, Alaska has posted steady profit growth. Adjusted pre-tax profit has increased from $552 million in 2012 to $616 million in 2013 to $922 million in 2014. Through the first three quarters of 2015, Alaska has already earned $1.05 billion in adjusted pre-tax profit -- more than in all of 2014.

Share buybacks have caused Alaska's EPS to rise even more quickly.

Enter Spirit Airlines

While Alaska Airlines has thrived despite growing competition from Delta, it now faces a much different kind of threat. Spirit Airlines plans to enter the Seattle market next spring. On March 24, it will begin flying twice a day to Los Angeles, and on April 14 it will add two daily flights to Las Vegas.

Spirit Airlines can afford to offer much lower fares than other airlines both because it has high ancillary revenue (averaging more than $50/passenger) and rock-bottom unit costs. While Alaska is quite efficient, its mainline nonfuel unit costs came in at $0.0745 per available seat mile in 2014, compared to $0.0588 at Spirit.

By contrast, Delta has higher costs than Alaska Airlines. Delta's main competitive advantage in Seattle is the breadth of its global route network. Spirit Airlines competes solely on price, though. Its arrival in Seattle is more likely to spark a damaging fare war as it starts to peel away price-sensitive travelers.

Why it could be a big deal

Spirit's entry into the Seattle market is especially significant because Alaska Airlines has faced relatively little competition from ultralow-cost carriers in its home market up until now. Frontier Airlines currently offers up to two daily flights from Seattle to Denver -- and that's essentially it.

Seattle-Los Angeles and Seattle Las-Vegas are more important routes for Alaska Airlines than Seattle-Denver. They are both high-traffic routes on which Alaska holds more than 50% market share. Spirit's entry could push prices down significantly, particularly if other carriers match Spirit -- something that has been increasingly common.

That said, even a sharp drop in fares on two important routes wouldn't have that much impact on companywide profitability for Alaska Air. The problem is that Spirit is likely to add many more flights in Seattle as it plans to grow 15%-20% annually for the foreseeable future. It could, therefore, exert pricing pressure on more and more of Alaska's routes over time.

Additionally, Alaska is running out of low-hanging fruit in terms of "self-help" initiatives to increase revenue and reduce costs. As a result, it probably has less flexibility to offset potential revenue pressure caused by Spirit's growth with cost savings or incremental non-ticket revenue.

I have no doubt Alaska Air will remain a highly profitable company even if Spirit Airlines quickly ramps up its presence in Seattle in the next few years. However, the stellar profit growth it has posted in recent years may prove to be unsustainable.

(Adam Levine-Weinberg - The Motley Fool)

The Wrong Way for China to Take Off

China's grown tired of being a low-tech manufacturer of things that other people design. So it's throwing money and resources at an industrial upgrade.

On Tuesday, the government proudly announced one of the fruits of that effort: The country’s first indigenously-designed passenger jet, the 90-seat ARJ21, will be delivered to state-owned Chengdu Airlines by year’s end. There's just one problem. Of the roughly 350 additional ARJ21s on order, almost all are slated for another Chinese state-owned airline or leasing company. International airlines don't appear terribly interested.

It’s hard to blame them. After 13 years of development, and probably billions in costs (the development costs have never been disclosed), the ARJ21 remains heavier, slower, and less fuel-efficient than its competition. Even worse, it won’t be certified by the U.S. Federal Aviation Authority, meaning it can only fly in China and the handful of South American, Asian, and African countries that recognize Chinese safety-certification standards. (Chinese state media has trumpeted the purchase of three aircraft by the Republic of the Congo.) Last fall one leading analyst concluded: “We do not consider the ARJ21 to be a viable commercial project.”

That’s not what China envisioned when the plane was conceived in 2002. The ARJ21 was supposed to compete in the market for passenger jets with fewer than 100 seats -- currently dominated by Embraer and Bombardier -- and to jumpstart an aircraft manufacturing sector that would eventually challenge Boeing and Airbus. Passenger growth numbers provided incentive. Boeing expects China will need 5,580 new planes over the next two decades as it grows into the world’s largest commercial aviation market.

So what’s gone wrong? First, while China’s large, captive market of state-controlled airlines offers a commercial safety net, it's also dampened the incentive to innovate. Why worry about demanding foreign buyers when the government can ensure that the plane is purchased in respectable numbers at home?

Second, China decided to dive straight into building a complete plane, using imported or at least foreign-designed components. That's the same approach Xiaomi used to develop a Chinese competitor to the iPhone. Indeed, Atlantic correspondent James Fallows has called the ARJ21’s larger cousin, the C919, a “huge flying counterpart to the iPhone.”

That might work well for products that have refresh cycles measured in months, such as smartphones. But if you're building a jet, it’s a recipe for instant obsolescence. Even the newest, most innovative components can quickly become outmoded if delays occur, as they have repeatedly with the ARJ21 and its inexperienced design teams.

Most importantly, in its rush to build a jet, China chose to base the design for the ARJ21 on the 1960s-era DC9 and reportedly has used tooling left behind in China by McDonnell Douglas in the 1990s to build it. That means engineers have packed relatively new technologies into a heavy, old design, with predictably disappointing results.
   
China would've been better off following the path chosen by Japan, which launched its first indigenous passenger jet in 40 years, the Mitsubishi Regional Jet (MRJ), on Wednesday. Unlike the ARJ21, the Japanese plane is a high-tech, fuel-efficient marvel with more than 400 orders, the vast majority of which are international. Also unlike the ARJ21, the jet will almost certainly be certified to fly in the U.S. and most of the rest of the world.

The success and credibility of the MRJ has much to do with the fact that Mitsubishi has for years been an innovative manufacturer of aircraft parts, including high-tech composite wings for the Boeing 787 Dreamliner, as well as a collaborator with top aircraft manufacturers around the world. During the height of the 787 development program, some 22,000 Japanese worked on elements of the cutting-edge plane.

These experiences gave Mitsubishi several advantages. Engineers familiar with making lightweight, fuel-efficient, composite components were quickly able to build a state-of-the-art airframe for the MRJ. Furthermore, Mitsubishi's experience working with manufacturers and regulators in other countries has smoothed the FAA certification process. Unlike China, which expects regulators to bend, Mitsubishi just opened an office in Seattle to navigate regulatory issues and provide support to North American buyers.

The MRJ's success should serve as a cautionary tale to any Chinese official who thinks bottomless funding, a will to succeed, and a large domestic market are all that's needed to create innovative products. Just as often, they result in an unproductive misallocation of Chinese resources and energy.

The ARJ21 might someday be viewed as an important waypoint on China’s aviation adventure. For now, it’s little more than a flight delay.

(Adam Minter - Bloomberg)

Bombardier offers first glimpse of Global 7000 production system

Bombardier on 3 November briefly opened the Global 7000 assembly line to journalists, showcasing a revitalized facility with “game-changing” manufacturing technology for the business aviation market.
 
Bombardier hired aviation automation specialist Electroimpact to implement a modern manufacturing make-over of Bay 10, now the home of the Global 7000 and 8000. The Global 5000 and 6000 continue to be assembled on bays 2 and 4 of Bombardier’s factory complex near Toronto’s Downsview airport.
 
The facility now features a five-position assembly line devised for pulsed moves and emphasizing technology that can eliminate some of the variables involved in assembling a $71 million twinjet.
 
The technology starts at the first assembly position where two wings are joined to the center wing box. An automated positioning system uses laser tracker feedback that computes the exact location of the contours of each assembly, allowing a human operator to move the sections into position with much greater accuracy.
 
Electroimpact also automated the movement of completed assemblies from one position to another.
 
Instead of lifting the structures by crane, a robotic train called the Aircraft Transportation Linear Activation System (ATLAS) carries the completed wing assembly into the second position.
 
Here the wings are mated to the center fuselage, following by joining the forward fuselage and aft fuselage to the center. Electroimpact is also automating this step with robotic systems more commonly found in the high-volume production systems of commercial airliners.

Two robots – nicknamed Drillby and Drillbert – are currently used to circumferentially drill and deburr the thousands of holes required to rivet and fasten the metallic sections together.

(Bombardier)

Bombardier next plans to use the robots to drill and deburr the wing-to-fuselage mate assembly.
 
But the real challenge will come later. The company’s goals is to use the robots to also automatically rivet and fasten the major fuselage sections together. That requires developing a complementary robotic “bucking” system, with a robot stationed on the aircraft interior to apply back pressure as the external robot sinks the fasteners.

Boeing is rolling out such technology with the 777X program, but Bombardier is unaware of any attempt to push automation so far in the business aviation market outside the Global 7000 program.

Bombardier declines to say how much such automation advances will improve production capacity or flow times, as compared to the current system used for the Global 5000 and 6000.

But the technology proved itself in the construction of the first two flight test aircraft, which are now in advanced stages of structural assembly, says Michel Ouelette, senior vice-president of Global 7000 and Global 8000 programs.

(Stephen Trimble - Flightglobal News)

GoGo Boeing 737-5H6 (26445/2327) N321GG

 

Captured arriving at Long Beach Airport (LGB/KLGB) with the callsign "N321GG" at 15:22 pst following a flight from Aurora Municipal Airport (ARR/KARR), Chicago / Aurora, Illinois. 

This 737-5H6 was originally delivered to Malaysian Airline System on July 13, 1992 as 9M-MFA. In later years it served with Air France as F-GJNQ, CSA Czech Airlines as OK-XGV, and finally Orenair as VP-BPE.  

(Photos by Michael Carter)

Gogo is a leading global aero-communications service provider that offers in-flight Internet, entertainment, text messaging, voice, connected aircraft services and a host of other communications-related services to the commercial and business aviation markets.

 

 Gogo has partnerships with 11 major commercial airlines and is now installed on nearly 2,400 commercial aircraft. More than 6,800 business aircraft are also flying with its solutions, including the world's largest fractional ownership fleets. Gogo also is a factory option at every major business aircraft manufacturer.

 

(GoGo)

Russia suspends Boeing 737 certification

An agency that oversees civil aviation in Russia said Thursday it is suspending the certification of Boeing 737 planes used by Russian airlines pending resolution of safety concerns.

The Boeing 737 is flown by most major Russian airlines, but there were no immediate signs the Interstate Aviation Commission's surprise announcement would disrupt air travel. The S7 airline, one of Russia's largest, said it would continue to fly the plane, according to the news agency Interfax.

In a statement reported by Russian news agencies, the committee said the certifications are suspended until the U.S. Federal Aviation Agency and its Russian counterpart, Rosaviatsiya, give joint notice "supporting the safe operation" of 737s.

Rosaviatsiya said it aimed to have a meeting with the commission on Friday, but added that the commission did not have the power to halt the use of planes.

The Moscow-based commission oversees civil aviation's certification and use of airspace in most countries of the former Soviet Union, and is involved in investigating accidents.

Dmitry Peskov, the spokesman for Russian President Vladimir Putin, said the Kremlin was following the situation, but sidestepped direct comment.

The move comes amid speculation about the cause of Saturday's fatal Russian airliner crash in Egypt, but there was no indication the action was connected to the disaster. That crash was of an Airbus 321, a plane similar to the 737 in range and passenger capacity.

(Associated Press)

Learjet 36 (36-005) N905CK

This lovely Learjet 36 is owned by Kallita Charters LLC and operated by AMR Air Ambulance. She is captured departing Long Beach Airport (LGB/KLGB) this afternoon as "KFS84" bound for San Jose International Airport (SJC/KSJC).

 

(Photos by Michael Carter)

Southwest Airlines' pilots reject a tentative contract by significant margin

Southwest Airlines CEO Gary Kelly was dealt another blow from within his labor ranks today when Southwest Airlines Pilots' Association (SWAPA) rank and file rejected a tentative contract agreement announced in September.

 

The Southwest union includes more than 8,000 pilots, with the largest number of them (approximately 1,100) domiciled in Chicago, where Southwest has its largest hub at Midway Airport.

 

SWAPA said 61.64 percent of the pilots who voted opted to reject the tentative agreement, and 38.36 percent voted in favor of the proposed deal. More than 95.1 percent of all Southwest pilots cast a ballot — a huge turn-out. 

 

Southwest pilots' rejection of their tentative contract comes just over three months after Southwest flight attendants also overwhelmingly rejected a tentative contract that Transport Workers Union Local 556 rank and file said lacked sufficient pay boosts and included longer work hours, among other issues.

 

Southwest ramp agents have been trying for five years to get a new contract with CEO Kelly and his union bargaining team. Ramp agents have picketed at numerous airports Southwest serves and at the most recent annual meeting to protest the slow progress in getting a new deal.

 

The slow contract talks with ramp agents also were believed to have been a factor in Southwest's historic meltdown at Midway Airport in early 2014.

 

Commenting on the pilots' vote results today, SWAPA president Paul Jackson said: "Despite increased compensation and some work rule improvements, there were new company allowances in this agreement that our pilots did not find palatable when compared to the potential gains."

 

Before the proposed contract was put out for a vote last month, sources also said pilots were irked about Southwest management's efforts earlier this year to do some variation on a code share deal with JetBlue that was believed to be in violation of the pilots' contract with the airline. Southwest denied any such deal was in the offing.

 

SWAPA's Board of Directors is slated to convene in Dallas next week to decide the next steps in what is expected to be an eventual return to the negotiating table.

 

The pilots' rejection of their proposed contract comes as Southwest continues to post quarter after quarter of record profits, fueled in part at least by low oil prices.

 

Southwest pilots last rejected a tentative contract in June of 2009, according to a SWAPA spokesman. Pilots subsequently accepted a new contract in November of 2009 — the same contract that is now in effect and being renegotiated.

 

(Lewis Lazare - Chicago Business Journal)

Boeing Dreamliners even more fuel efficient than promised, says Qatar top exec

Boeing’s 787 Dreamliner's have been beating fuel burn estimates, said Akbar Al Baker, Qatar’s chief executive, at a high-profile acceptance ceremony for the airline's 24th and 25th jets Wednesday.

 

Leaders from Boeing and Qatar Airways turned out in force for the event, which was held at the Boeing Delivery Center in Everett.

 

In his remarks, Baker said that while Qatar had at one point considered canceling its Dreamliner orders as Boeing struggled with early 787 production woes, he’s now completely satisfied with the jet.

 

“That chapter we all closed successfully,” he said. “In every respect, the 787 has become a game changer.”

 

Boeing Commercial Airplanes CEO Ray Conner, who called Baker a friend, acknowledged the prior difficulties.

 

“It hasn’t been the easiest of journeys, but it’s a journey we made together,” Conner said. “I want to thank you for sticking with us.”

 

Baker said he hopes that Qatar will exercise options for more 787s in the future, which he added would be conversions for larger 787-9s.

 

Qatar was the Middle East launch customer for the 787, Boeing’s twin-aisle jet, mostly made from carbon composites.

 

The delivery is especially important to Boeing because the big Middle East carriers – Qatar, Emirates and Ethiad – are all heavy buyers of wide-body jets for their long-range routes.

 

In a forecast made public Wednesday, Boeing said it expects Middle East Airlines will buy more than 3,000 airplanes in the next 20 years, worth more than $730 billion. Nearly half of those aircraft will be expensive wide-bodies, as opposed to just 23 percent of orders for wide-bodies globally.

 

(Steve Wilhelm - Puget Sound Business Journal)

Eastern Air Lines Boeing 737-7L9 (28006/26) N278EA "Spirit of the American Soldier"

(Photos by Michael Carter)

What a sight to see as Eastern Airlines returns to Long Beach. Eastern Airlines was a frequent sight at Long Beach Airport (LGB/KLGB) in the 60's and 70's as numerous DC-8's and DC-9's were built here for the carrier. The current incarnation of the carrier operates two 737-800's and this -700.

 

This 737-7L9 was originally delivered to Maersk Air as OY-MRC and operated with the carrier her entire career until joining the Eastern Air Lines fleet this year.

 

 The aircraft is currently being used to shuttle the Florida Panther's around the country and sports the markings of the team.  

Alaska Airlines Begins Flying to Costa Rica

(Alaska Airlines)

Alaska Airlines inaugurated new service between Los Angeles International Airport and Costa Rica's two major international airports, further strengthening the airline's southern California focus city.
 
The eight weekly flights from Los Angeles (LAX) to San Jose (SJO) and Liberia/Guanacaste (LIR), Costa Rica, started Saturday and Sunday respectively, and is the first international destination Alaska has launched since 1991, when the Seattle-based airline introduced seasonal service to Magadan, Russia.
 

"As the most popular Central American tourist destination for U.S. travelers, Costa Rica is one of the best places in the Western Hemisphere for adventure tourism," said John Kirby, Alaska Airlines' vice president of capacity planning.

"With the addition of Costa Rica, Alaska offers up to 80 peak season weekly departures from Southern California to Latin America, more than any other airline."
 

Liberia is the gateway to the Guanacaste region in the western part of the country, renowned for surfing and sport fishing. While the capital city of San Jose, located about 130 miles from Liberia, boasts museums and historic Spanish colonial architecture. On the blog: Read an Insider's Guide to Costa Rica.

 

Summary of new service:

 

Start date	City pair	Departs	Arrives	Frequency
Oct 31	Los Angeles-San Jose	8:35 a.m.	3:30 p.m.	Mon, Wed, Fri, Sat
Oct 31	San Jose-Los Angeles	4:30 p.m.	10 p.m.	Mon, Wed, Fri, Sat
Nov 1	Los Angeles-Liberia	8:40 a.m.	4:25 p.m.	Tues, Thurs, Sat, Sun
Nov 1	Liberia-Los Angeles	5:25 p.m.	9:40 p.m.	Tues, Thurs, Sat, Sun

 

All times based on local time zones
 

The new flights will be operated with fuel-efficient, next generation Boeing 737-800 aircraft, which feature free and premium entertainment direct to customer devices, as well as 110v and USB outlets at every seat for charging laptops, smartphones and tablets.

Additionally, all flights feature food and beverages sourced with items from iconic Pacific Northwest brands. Customers can also rent inflight entertainment tablets, which include recently-released blockbuster movies, TV, Xbox games, music, and digital magazines.
 

Customers traveling from Los Angeles can connect to 21 destinations on Alaska Airlines' 600 weekly flights and earn and use award miles to travel to 84 nonstop destinations worldwide on partners American Airlines, Delta Air Lines, Air France, Aeromexico, British Airways, Cathay Pacific, Emirates, Fiji Airways, KLM, Hainan Airlines, Icelandair, Korean Air, LAN and Qantas.

 

(Alaska Airlines)