Wednesday, May 30, 2018

Coulson prepares Boeing 737 Fireliners for wildfire season


A Canadian company that's converting old Boeing 737 passenger jets into firefighting bombers is hoping its first Fireliner jet will be available this summer.

Coulson Group CEO and President Wayne Coulson, owner of one of the world's largest wildfire-fighting aviation companies, hopes his first bright red 737 Fireliner will ready for service in July or August.

"We're on a fast track," Coulson said. "It's quite an intricate process we have to go through."

Coulson's work is the first time anyone has tried to transform a 737 into a firefighting aircraft. A year ago, Coulson Aviation bought five old Southwest Airlines 737-300 jets, announcing plans to convert them for his fleet of wildfire-fighting aircraft.

Coulson Aircrane and its U.S. subsidiary, Coulson Aviation, have aerial firefighting bases at the British Columbia headquarters and in Reno, Nevada, flying a fleet of helicopters, turboprops and converted C-130 Hercules aircraft.

Over the past year, Coulson said his company has worked to convert three of the twin-engine jets and spent this spring running tests. One of the aircraft is completed, and a second is in progress.

He hopes to have five jets finished by 2020, but that's going to be a tough deadline to meet. The Federal Aviation Administration requires elaborate testing to certify aircraft as safe for pilots to operate, especially after airframes are modified.

And Coulson must prove its jet can actually hit targets when fire-bombing before the Department of the Interior allows the aircraft win government contracts to fight wildfires.

Coulson and its Fireliner must pass what the industry calls "grid tests." Coulson will load the jet with retardant and fly over a pre-set grid, aiming to hit targets in the zone with sufficient accuracy before a Fireliner can win contracts.

"Taking it out to the grid really allows out customer to see the performance of the aircraft," Coulson said.

Those tests are scheduled for June 11.

Coulson's team also has to calibrate the highly pressurized tanks inside the jet that carries the fire retardant. Those tests are done with water.

Coulson workers fill the Fireliner's tanks and then straddle the jet over a 10,000-gallon cement pond, into which the pressurized water is unloaded.

Before a Fireliner enters service, it will undergo one final test, flying with a full load at 30,000 feet "to see if there are any concerns," Coulson said.


Dozens of engineers and metal workers spent more than 100,000 hours to design, engineer, manufacture and install systems on Coulson's Fireliner. Features include:

Coulson's patented fire retardant aerial delivery system (RADS).

Special pressurized tanks that can hold 4,000 gallons of water or fire retardant and drop 2,200 gallons per second in a flyover.

Room for 63 firefighters to fly into airports near blazes.

(Andrew McIntosh - Puget Sound Business Journal)

Rolls-Royce Says Boeing 787 Groundings Will Get Worse

Rolls-Royce is expecting a sharp increase in the number of Boeing 787 Dreamliner planes that will have to be grounded because of faults with the engine maker’s Trent 1000 turbine.

The spike will occur ahead of a deadline next month for mandated inspections forced by durability problems, Rolls said in an emailed statement. The number of parked Dreamliners is expected to peak at about 50 from the current level of 35, a person familiar with the matter said, as the aircraft await repairs.

About 80 percent of the Package C engine variant, which debuted with Boeing’s marquee 787-9 jetliner, have undergone initial checks for cracking or signs of wear and tear on turbine blades, the person said. Just under a third of those engines have failed the initial checks required by regulators for planes that fly more than two hours and 20 minutes from the nearest diversionary airport.

“We fully recognize the unacceptable levels of disruption our customers are facing,” Chris Cholerton, the company’s president of civil aerospace, said in the statement. “While we expect the number of aircraft affected to rise in the short term as the deadline for the completion of initial inspections approaches, we are confident that we have the right building blocks in place to tackle the additional workload.”

Rolls-Royce shares fell 0.6 percent to 822 pence as of 8:24 a.m. in London on Wednesday. 

Shorter Routes

The engine woes have prompted some carriers to place their 787s on shorter routes, giving them more operating time ahead of a June 9 inspection deadline mandated by the Federal Aviation Administration. Since the FAA’s directive in April, Rolls has put measures in place to triple the number of engines it can service at any time, including the development of a new ultrasonic testing technique that can be performed while the turbine is still attached to the aircraft.

The tripling of capacity and the number of Dreamliners likely to be grounded were reported earlier by the Financial Times.

Additional measures to boost capacity at sites in Singapore, London, and Derby, England, are underway, the company said. The problems center on potential cracking of the Trent’s intermediate pressure compressor blades.

Rolls has also reduced maintenance turnaround times and is accelerating the redesign of the blades that have caused the latest disruption. That part has already been installed on a test engine that will fly in June, and the final design will be rolled out to customers later this year -- ahead of the previous guidance of early 2019.

Restructuring Plan

The stepped-up inspections won’t cause any additional financial impact, Rolls said. The company is due to unveil a new restructuring plan authored by Alvarez & Marsal at its next capital markets day on June 15.

Chief Executive Officer Warren East has said Rolls will reduce discretionary spending to offset the additional spending needed for overhauls and to keep to a key target of reaching 1 billion pounds in free cash flow by 2020.

“The scale of the additional Trent 1000 maintenance cost remains to be seen, and we’re not sure how Rolls can miraculously offset this,” Rob Stallard, an analyst at Vertical Research Partners, said in a note earlier this month. “The company has not disclosed that much, and this leaves us concerned that the maintenance costs could further escalate.”

Boeing has meanwhile positioned Keith Leverkuhn, best known for leading the development of the upgraded 737 months ahead of schedule, between Derby and Singapore to help Rolls work through the escalating engine problems.

“We are drawing on the full resources of Rolls-Royce to address the issue and I’ve seen great teamwork and innovative thinking both across our organization and in our partnership with Boeing,” Cholerton said.

(Benjamin D Katz and Julie Johnsson - Bloomberg Business)

Chinese Aircraft Maker Comac Gets Bids for Wide-Body Engines

Commercial Aircraft Corporation of China (Comac) is a homegrown Chinese airplane builder that recently began test flights on its new C919 single-aisle passenger jet. The company has joined up with Russian firm United Aircraft Corporation to design and build another passenger jet, the CR929, a dual-aisle, wide-body plane that, unlike the C919, is intended to be a new design from the ground up.

According to a Wednesday report from Reuters, the China-Russia partnership has now received bids from seven aircraft engine makers to provide the engines for the CR929. That number seems to be a little high.

First, the usual suspects: General Electric Co., the Pratt & Whitney division of United Technologies Corp., and Britain’s Rolls-Royce. Airline industry journalist Jon Ostrower adds Russia’s Aviadvigatel and China’s own ACAE. But that’s only five.

A couple of others that might be on the bidder list are Engine Alliance, a joint venture of General Electric and Pratt & Whitney, and French aircraft engine maker Snecma. One more outside possibility is CFM International, a joint venture between GE and Snecma’s parent company Safran.

According to Reuters, Comac and its Russian partner will create a team to analyze the proposals with a goal of completing an evaluation by the end of this year.

There are a few political hurdles here, as well as the usual assortment of technical ones. China will want the engines to be designed and built in the country and almost certainly will demand a transfer of the technology in exchange for the contract. This sort of arrangement has worked well with automakers and consumer electronic products, but giving away the design of a state-of-the-art aircraft engine that will take years and billions of dollars to build is likely to raise concerns with all but the Russian and Chinese governments.

At one time the CR929 was once expected to use engines from GE or Rolls-Royce, but China has since announced its intention to design and build its own engines and has consolidated several state-owned entities into a single company, Aero Engine Corp. of China (AECC), to do the work. The government announced last September that a domestically built engine is expected for the C919 but gave no estimated delivery date.

The larger CR929 remains a long way from entry into service. Preliminary design work is expected to be approved next year and design documentation is due in 2021, with the first test flight coming in 2023 and entry into service in 2026.

(Paul Ausick - 24/7 Wall St)

Boeing sells four VIP business jets so far in 2018 and expects more deals

Boeing has won orders for four new luxury business jets in 2018, including two for its new 737 Max version of the business jet, known as the BBJ Max.

Boeing Business Jets revealed the orders from unidentified "elite customers" during the European Business Aviation Conference and Exhibition in Geneva, Switzerland, over the weekend.

Boeing spokesman Dmitry Krol declined to disclose additional information about the buyers or about the aircraft involved in the two remaining orders, citing VIP customer confidentiality requirements.

The new orders this year come after members of the world's super wealthy purchased 16 Boeing Business Jets in 2017.

Boeing Business Jets leader Greg Laxton said in a statement the VIP jet unit is seeing much customer interest in Boeing's new BBJ Max, thanks to the jet family's increase range and superior fuel economy.

"The performance advantage of the BBJ MAX is a big sales driver," said Laxton. Laxton said the plan is well-suited for customers who want to fly farther without stopping.

A BBJ Max jet can fly 7,000 nautical miles and features interior options to match any customer's preference.

"Customers seek more space and greater range, which is driving significant growth in the large cabin segment," Laxton said.

The new orders give the jet maker's VIP business jet unit a backlog of 19 airplanes, helping make the BBJ Max one of Boeing's fastest-selling business jets in history.

Based on the new 737 Max airplane, the BBJ Max delivers 14 percent better fuel efficiency because of its advanced engines and improved aerodynamics.

The model also features Dreamliner 787-style flight deck displays and multiple advanced new systems, Boeing says.

Boeing celebrated the first 737 BBJ Max flight in mid-April 2018, when an unpainted green BBJ Max 8 took to the skies.

The jet maker expects additional deliveries of BBJ Max airplanes in coming months.

Base 737 Max models sell for between $96 million (a Max 7) to $130 million (a larger Max 10).

There are currently 233 Boeing BBJ aircraft in operation since the jet maker started to offer them in 1996.

(Andrew McIntosh - Puget Sound Business Journal)

Bombardier Adds Two More Globals to Family


Two new additions to Bombardier’s Global family were unveiled on the eve of EBACE: the Global 5500 and 6500. The flight test aircraft is making a surprise appearance here powered by a new family of engines from Rolls-Royce, the Pearl, developed under cover and certified secretly in February.

The Global 5500 and 6500 take the current Global 5000 and 6000, respectively, and boost their speed and performance with new engines and a wing with a re-profiled trailing edge. Range with eight passengers at standard cruise of Mach 0.85 is extended by 500 nm, but by as much as 1,300 nm from hot-and-high locations such as Toluca, Mexico, to 5,700 and 6,600 nm, respectively. Mmo is Mach 0.90.

The aircraft will be produced on the same line as the Global 5000 and 6000, which will continue to be available. The four models will offer mission, capability and price points to appeal to different customer requirements. First deliveries are planned by the end of next year.

The Global 5500/6500 Rockwell Collins flight deck is the first to seamlessly merge infrared and synthetic images into a single view, Bombardier says. Advanced weather radar detection, real-time air traffic information, and improved airport moving maps are all incorporated in the latest evolution of the Bombardier Vision Flight Deck.

Many new features ate incorporated into the new aircraft, including the cabin’s Ka-band connectivity, fibre-optic-based cabin management systems and Nuage seating that Bombardier developed especially for the Global family. They will not, however, be offered for the Global 5000 and 6000.

Other new features include a kitchen (“placed in the front of the aircraft, where it belongs,” says Bombardier), incorporating designer home features with high-end exposed appliances including a steam oven. New cabinets, and new countertops with the latest styling in mind, allow for more gourmet meal options. Next to the kitchen is a dedicated crew rest area.

David Coleal, president of Bombardier Business Aviation, told a packed unveiling event at the TAG Aviation FBO here on Sunday evening that the new aircraft contain many innovations, especially in the main cabin, which incorporates a club, conference and private suite.

“The passenger seats are something very special,” said Coleal. “We're extremely proud of our patented new Nuage seat. Nuage is French for "cloud," and this seat…is the first new seat architecture in business aviation in more than 30 years. In designing this revolutionary seat, Bombardier engineers and designers threw away the rulebook. It's the most comfortable seat in the skies and the perfect place to spend a long flight.

“It has a deep recline so you can rest comfortably, and a patented tilt-link system that automatically dips the base of the seat as the back reclines. The tilting headrest provides optimal neck support in every position. If you want to move around for a different view, or to network, these movements are intuitive and effortless thanks to the first-ever fully floating base, with no visible rails.”

The large conference suite contains another innovation: the Nuage Chaise. Built on the observation that many people sit on the credenza, Bombardier decided to make it more useful.

“As a flat surface, it's great for business meetings. It gives you the opportunity to have two or three people seated side by side, facing the conference table, like a full-size dining room. It then transforms into a modular seat, where you can recline, lie back and enjoy your flight like never before. It transforms the space into a serene lounge as well. No one else can bring such home-like comfort and luxury into the skies. We're proud to innovate and lead the way in passenger comfort.”

Coleal told ShowNews that the Global 5500 and 6500 will appeal to customers who find that moving up to a Global 7500 might be too big a step, yet they want the latest features.

“You get an amazing value proposition with the 5500 and 6500. They're category-killing aircraft because for all intents and purposes nobody can match them.”

(John Morris - ATWOnline News / Aviation Week)

Honda Aircraft Company Unveils the HondaJet Elite

HondaJet Elite.

Honda Aircraft Company has revealed a new upgraded aircraft, the "HondaJet Elite," at a special hangar event ahead of the 2018 European Business Aviation Convention and Exhibition (EBACE) in Geneva, Switzerland.

The HondaJet Elite has achieved an extended range of an additional 17% (+396km) and is equipped with a newly developed noise attenuating inlet structure that lines each engine and greatly reduces high frequency noise to enhance cabin quietness. Additionally, the new aircraft's advanced avionics system incorporates additional performance management functions for optimum flight planning and automatic stability and protection functions to enhance safety of flight.

The HondaJet Elite also protects the environment by offering the best fuel efficiency in its class while also featuring best-in-class speed, altitude and range. The aircraft is type certified by the United States Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA). The HondaJet Elite will be displayed for the first time to the public at EBACE from May 28th through May 31st.

Honda Aircraft Company's President and CEO Michimasa Fujino introduced the aircraft at the event. "The HondaJet Elite represents Honda Aircraft's continued commitment to performance, efficiency and environment creating new value in business aviation," he said. "The result of innovation, design and engineering, our new aircraft features several performance and comfort enhancements that, once again, set a new standard in aviation. We are excited to share Honda Aircraft's latest technological feat with the world at EBACE.

The new aircraft was designed to provide the user the best experience by utilizing Honda Aircraft's pioneering advanced technologies coupled with the best performance and comfort enhancements. The HondaJet Elite is more fuel efficient than any other aircraft in its category and emitting less greenhouse gases than similar sized business jets.

The HondaJet Elite has inherited the aeronautical breakthroughs developed by Honda Aircraft, including the Over-The-Wing Engine Mount (OTWEM) configuration, Natural Laminar Flow (NLF) fuselage nose and wing and composite fuselage. The aircraft continues to be the most efficient, quietest, fastest and highest-flying as well as the furthest-flying in its category.

Key features of the HondaJet Elite -

- Range: 1,437 nautical miles*1 Longer range makes it the furthest-flying aircraft in its class

- Noise Attenuating Engine Inlets: Advanced inlet technology created to reduce exterior and interior noise

- Performance Management: Provides optimized performance planning for all phases of flight such as airspeed / cruise altitude, fuel flow, etc

- Takeoff/Landing Distance (TOLD) Management: Automatic computation of the required runway length, V-speeds, climb/approach gradients, etc

- Stability and Protection with Roll and AoA Functions*2: Provides enhanced safety features for manual flying that will deter aircraft operation outside the normal flight envelope

- AFCS Coupled Go-Around with Underspeed Protection*2: The aircraft’s autopilot remains connected, enhancing aircraft safety and reducing pilot workload

- New Exterior Colors with Signature Paint Scheme*2: Three premier signature paints, Ice Blue / Ruby Red / Monarch Orange

- Bongiovi Audio System*2: An industry first speaker-less in-cabin sound system that provides immersive audio experience throughout the entire cabin

New Interior Equipment Options:

Belted Lavatory

Galley with Coffee Brewer

Two-toned Executive Leather Seats

*1 NBAA IFR Range
*2 Optional

For more information, visit

Honda Aircraft Company has established a worldwide dealer and authorized sales network to provide unsurpassed service and support for HondaJet customers. The HondaJet authorized network spans territories in North America, Latin America, Europe and Asia. An advanced light jet, the HondaJet was the most delivered aircraft in its category in 2017 and has been certified and delivered in countries around the globe.

About Honda Aircraft Company

Honda Aircraft Company is a wholly owned subsidiary of American Honda Motor Co., Inc. Founded in 2006, Honda Aircraft’s world headquarters is located in North Carolina, the birthplace of aviation. The challenging spirit upon which Mr. Soichiro Honda founded Honda Motor Co., Ltd. is alive today as Honda Aircraft fulfills one of Honda's longstanding dreams to advance human mobility skyward.

(HondaJet Press Release)

Wednesday, May 23, 2018

Sierra Pacific Airlines Boeing 737-528 (27424/2720) N708S

(Photo by Michael Carter)

This past Sunday (May 20, 2018), I had the chance to work a military charter flight at Los Alamitos AAF Airport (Los Alamitos, CA.) (SLI/KSLI).

Sierra Pacific "SPA708" arrived from Tuscan International Airport (TUS/KTUS) at 10:48 pst then following an on-load of 151 bags and 77 pax the aircraft was off the deck at 11:49 pst bound for Robert Grey AAF Airport (Fort Hood / Killeen, Texas) (GRK/KGRK) as "SPA708."

This is one of two -500's the carrier operates the other being N709S.

(Photos by Michael Carter)

N708S was originally delivered to Luxair as LX-LGR on August 8, 1995. It served with the carrier until finding it's way to British Airways on July 17, 2000 as G-GFFE. It stayed with BA until being WFU and STD at Lasham (QLA/EGHL) on October 24, 2008. It remained there until being bought by AerSale Inc. on December 13, 2013 and then ferried to Roswell Industrial Air Center (ROS/KROS) on January 14, 2014 as N541AS.

Sierra Pacific Airlines leased the aircraft on August 4, 2014 and operated with the N541AS registration until changing it to N708S on November 12, 2015. It was placed in storage at TUS on January 16, 2016 but has now obviously been returned to service.

Alaska Air slows growth plans, reroutes some planes to balance spending and competitive pressures

Alaska Airlines and its regional Horizon Air subsidiary have deferred some jet deliveries to rein in growth. Horizon is also exiting some routes, such as Bellingham to Portland, and redeploying planes to more profitable routes.

Alaska Air Group is slowing the growth of its fleet and shifting some planes from busy but unprofitable Pacific Northwest routes as it grapples with financial and competitive pressures.

Alaska Airlines and regional subsidiary Horizon Air are deferring a total of 14 jet deliveries by at least two years to rein in what has been an intense rate of growth.

And Horizon is exiting some routes such as Bellingham to Portland, despite almost full airplanes on the dropped routes.

The reallocation of Horizon jets includes more flying into Seattle-Tacoma International Airport to maintain gates there against growing competition from Delta.

The fleet and route adjustments follow the huge growth surge from the merger with Virgin America.

Alaska Air Group’s fleet will grow 6.5 percent this year after an average growth rate of between 7 and 8 percent per year over the past two decades.

With the delivery deferments, John Kirby, Alaska’s vice president of capacity planning, said the airline will still grow at 4 percent in 2019 and 2020. That is still nearly double the growth rate of the U.S. economy and faster than the airline industry as a whole, he said.

“We’re still a growth story,” Kirby said. “When you buy another airline and get 30 percent larger and fuel prices go up about 25 percent, it’s natural to slow down your growth.”

As for the route changes, he called it “normal pruning of the network.”

Mark Eliasen, Alaska’s vice president of finance, said the airline must continuously adjust its growth and its routes to “sync up our fleet and network with passenger demand.”

Brooke Vatheuer, Horizon’s vice president of finance and planning, told employees on the airline’s internal company website that the delivery deferments “reflect the current economic pressures in our industry … The last thing we want is to waste money on planes that aren’t being used.” 

Slower fleet growth

Alaska Airlines, which will take delivery of 12 Boeing 737 jets this year and nine more next year, has deferred eight 737 deliveries from 2019-2020 to 2021-2022.

The airline has also converted all its firm 737 MAX 8 orders to the larger MAX 9 model, aiming to get more revenue from the greater seat capacity.

Alaska also is redeploying its fleet of Boeing 737s and the Airbus A320s it inherited in the Virgin America acquisition.

The airline is switching to Boeing jets on former Virgin higher-load routes such as Los Angeles-Boston and San Francisco-Honolulu, while moving the Airbus jets to less heavily traveled West Coast flights including Seattle-Burbank and Portland-San Diego.

Alaska Air has also pushed out some jet deliveries for its two regional carriers, Horizon and SkyWest, which provide feeder service to its Alaska Airlines routes; each is deferring delivery of three Embraer E175 jets by two or three years.

Horizon will still take 16 of the Embraer jets this year and four more next year. Horizon plans to retire a similar number of Q400 turboprops so that by the end of 2019 Horizon will have a 60-aircraft fleet — half Q400s and half E175s — compared with 59 aircraft now.

Routes dropped here, flights added there

The Horizon route changes, announced internally last week for effect in the fall, left some employees bemused.

Horizon is dropping its Bellingham-Portland, Pasco-Portland, Eugene-San Jose, Los Angeles-Sun Valley routes, as well as two routes into the Mammoth Lake ski resort in California that will end its service to that destination.

Instead it will deploy those planes to increase frequencies of flights elsewhere, including between Spokane and Portland and Seattle and Vancouver, B.C.

In an internal email, Kieran Whitney, Horizon’s managing director of in-flight services, told employees that “if you worked some of these (dropped) flights you might be wondering why we are making these changes as they were full.”

His explanation: “They may have been full but it was more that we were cutting our losses with lower fares than making a profit.”

He also said Alaska is adding flights from Sea-Tac, even though “it’s already challenging with delays” due to air-traffic congestion, because “it’s all about competition.”

The Port of Seattle allocates gates at Sea-Tac (SEA) according to the seat share among airlines over a nine-month period.

“Delta has been growing at a rate of 15 percent or more this year. So we need to put as many seats through SEA as possible to try to maintain or grow our gate footprint,” Whitney wrote. “If we do not grow, we will lose gates in SEA.”

Kirby said on peak days this summer, Alaska will have 330 flights out of Sea-Tac, to 89 nonstop destinations.

“We want to hold onto the gates and add more,” he said. “We want to keep growing here.” 

Pilot-training glitch

Horizon is recovering from a disastrous year in 2017 when an acute shortage of pilots led to wholesale flight cancellations last summer and early fall.

In response, the airline cut the number of routes it flew and sharply increased the intake of newly hired pilots and the frequency of training classes.

Since December, the airline has steadily recovered. Horizon is flying about 380 flights per day this month, compared with 220 per day last August.

Yet as the next summer peak season approaches, Horizon employees say the pilot-training program has run into trouble.

Horizon pilots say the classes, for training and certifying pilots to fly the Q400s and to upgrade first officers to captains, has had high failure rates — as high as 70 percent failing, according to one pilot who took such a class.

Alaska denies the failure rate is that high and says it is in the “high teens.”

According to a second pilot, who asked not to be named to protect his job, the Horizon pilot-training program was regarded for many years as one of the best in the industry. But budget cuts some years back shortened the classroom training and cut resources to the program.

This is not a safety issue, because no pilot makes it onto the flight deck without passing the classes and undergoing the flight checks and an FAA evaluation.

Still, the high failure rate combined with a shortage of first officers willing to give up their seniority in scheduling in order to upgrade to captain threatens to create another problem.

“Last year, there weren’t enough new (pilot) hires,” said the second Horizon pilot. “The current concern coming up to the summer schedule is not enough captains.”

Alaska Air spokeswoman Bobbie Egan said both the trainee failure rate and the captain upgrade rate are factored into the company’s scheduling models.

She said the pilot leadership “doesn’t anticipate any pilot shortage this summer” and “believes they have an adequate number of captains to fly our schedule.”

(Dominic Gates - The Seattle Times)

Ethiopian Airlines positions itself to take over Africa's skies with ambitious plans

In Africa's battle for the skies, an east African carrier is stepping up its game in an effort to dominate the market.

The state-owned Ethiopian Airlines, Africa's largest carrier by number of passengers, according to FlightGlobal, has taken stakes in a raft of carriers across Africa and opened routes to new destinations, like Manchester, UK.

The expansion is part of the airline's 2025 Vision to become the leading aviation group in Africa, and increase the share of the market occupied by African airlines.

"Twenty percent of the market is carried by African airlines and 80% of the market is carried by non-African airlines," said Tewolde Gebremariam, CEO of Ethiopian Airlines. "The market share has been declining for the last 20 years."

Taking off

Ethiopian Airlines is looking to fend off competition from South African Airways, the largest carrier by number of flights, according to FlightGlobal, EgyptAir, Royal Air Maroc and Kenya Airways.

Tewolde told CNN that Ethiopian Airlines are expanding into West Africa with Togolese airline ASKY Airlines. They're also doing business with Air Cote d'Ivoire, Congo Airways and have taken management of CEIBA International in Equatorial Guinea.

The airline has ambitious plans; Ethiopia is working with the Zambian government to relaunch their national carrier with a 45% stake, it also plans to establish a wholly-owned airline in Mozambique and has signed a contract to start an airline in Guinea. Ethiopian has also taken stakes in a Chadian airline.

"Typically, they're taking a minority stake or around 50%. They tend to go into these joint ventures with local partners," said Oliver Clark, senior reporter at FlightGlobal.

New routes

Ethiopian Airlines is launching new routes from Addis Ababa to Jakarta, Chicago and Geneva in the coming months.

The airline is looking to make the Ethiopian capital a transport hub, connecting other African countries without long-haul capacity with continents around the world.

"It's trying to feed traffic from other African countries through Addis to then give them the connectivity to travel on to other continents, US, Europe and Asia in particular," Clark said. 

In 2015, Africa accounted for only 3% of air passenger traffic, according to the International Civil Aviation Organization. The growth of African airlines worldwide will seek to expand the number of travelers.

(Chris Giles - CNN)

Tuesday, May 22, 2018

Mexico grounds charter airline involved in Havana accident

Mexican civil aviation authorities are conducting a special inspection of the charter operator at the center of the May 18 accident in Havana, and have suspended the company's operation until further notice—the third such action in eight years against the carrier.

The Directorate General of Civil Aeronautics (DGAC) said it would conduct an "extraordinary verification" of Mexico City-based Global Aerolineas Damojh, or Global Air, and ground the carrier during the check. One of Global Air's Boeing 737-200s was flying for Cubana de Aviacion when it went down shortly after departing Jose Marti International Airport (HAV) last week.

The suspension is at least the third for Global Air, which went into business in 1990. In November 2010, a nose landing-gear failure prompted DGAC to shut the airline down for five weeks. In October 2013, a complaint from a pilot triggered another special inspection and resulted in one aircraft being grounded for nine weeks.

"The DGAC seeks to ensure maximum safety of air operations, not only by periodic checks, but also by making the necessary extraordinary visits, accompanied by the measures required to ensure that the findings of the verification are remedied," an agency statement explained.

DGAC said Global Air passed its last routine annual inspection, in November 2017.

The Global Air aircraft, operating as Cubana flight 972, was en route to Holguín, Cuba, with 107 passengers and six crewmembers when it went down moments after departing Havana. One passenger taken to a hospital died May 21, Cuba's Ministry of Public Health confirmed, increasing the number of fatalities to 111.

The leased aircraft had been flying for Cubana for about a month, Cuba Minister of Transport Adel Yzquierdo Rodríguez said.

The aircraft's cockpit voice recorder was recovered May 19, Yzquierdo said. Investigators were still searching for the flight data recorder.

(Sean Broderick - ATWOnline News)

More American Airlines frontline staff criticize Boeing 737 MAX

American Airlines’ rollout of the Boeing 737 MAX is generating a lot of discontent among AA employees as more and more pilots and flight attendants get their first experience flying the aircraft.

American began operating the MAX earlier this year. There are now eight MAXs in AA’s fleet with 20 to be in service by the end of 2018. The MAX is the same size as the Boeing 737-800, of which AA has several hundred, but the MAX has a more fuel-efficient engine.

The MAXs now coming online seat 172 people, as opposed to 160 people in the 737-800s now in AA’s fleet. A large number of those 737-800s are about to be reconfigured to match the cabin configuration of the MAX, however.

And that increasingly has AA employees on the frontline concerned about what’s coming as part of Project Oasis, which the reconfiguration of the 737-800s has been dubbed.

To get more seats on the MAX, American Airlines installed new lavatories that — according to one AA captain who spoke at a recent crew meeting presided over by AA President Robert Isom — are only 75 percent of the size of the lavs on AA’s fleet of 737-800s.

That AA captain who spoke up called using one of the new aft lavs on the MAX the “most miserable experience in the world.” The captain further explained that he couldn’t even turn around in the new lav. The Chicago Business Journal obtained an audio tape of the crew meeting in which the AA captain spoke.

Isom responded to the concerned pilot and tried to explain why AA installed the kind of lav it did on the MAX, though he didn’t dispute the AA captain’s experience using the lavs. Nor did Isom signal that AA was about to rip out the smaller lavs and replace them.

Isom said the real estate on the MAX is very valuable, hence the need to maximize the revenue that real estate can generate by maximizing seating on the MAX. One way that was accomplished was by downsizing the lavs and by decreasing the seat pitch throughout the MAX, and soon throughout hundreds of 737-800s.

At the crew meeting, Isom didn’t shy away from the fact that AA is intent on maximizing revenue and profitability. Isom cited Spirit Airlines as one of the nation’s most profitable airlines and suggested AA was looking at how Spirit got to be such a cash cow.

Isom also intimated that the new MAXs are configured to help AA be more like Spirit when it comes to generating revenue and profits.

But other AA employees have come forward to the Chicago Business Journal in recent days and suggested it’s not going to be fun working on the MAXs or 737-800s when they are reconfigured to mirror the MAX.

One flight attendant told me in an email: “I’ve worked the MAX three times and have gotten hurt three times,” though the flight attendant didn’t immediately specify what the nature of the injuries were.

Still, the flight attendant said many within the ranks of American FAs are “embarrassed” about the MAX product that the carrier is rolling out — “no TV, manual (safety) demos, tight aisles; slim, cheap seats.”

But the source, who worked for American CEO Doug Parker at America West, U.S. Airways and now American, said he understands where Parker is coming from in doing what he’s doing with the MAX.

“He was one of my favorite CEOs, as he knows how to fill planes and make money, but at the same time, I’m sorry, but he’s cheap," the source said.

(Lewis Lazare - Chicago Business Journal

Gulstream G200 crashes in Honduran capital, all aboard survive

(Fernando Antonio - Associated Press)

Gulfstream G200 (c/n 054) N813WM has crashed off the end of the runway at Toncontín International Airport (TGU/MHTG) or Teniente Coronel Hernán Acosta Mejía Airport the civil and military airport located 6 km (4 mi) from the center of Tegucigalpa, Honduras. The crew and passengers were rescued and reportedly out of danger, the government's emergency management agency said.

Photographs posted by the agency showed a white jet broken in half near the center. Firefighters sprayed foam onto the wreck and part of the plane appeared to lie across a street.

Video showed what appeared to be area residents pulling people out of the damaged fuselage while others sprayed the plane with hand-held fire extinguishers.

The FlightAware website said the flight had originated in Austin, Texas, on Tuesday morning.

(Photo: Honduras Policía Nacional)

Federal Aviation Administration records show the plane registered to TVPX Aircraft Solutions Inc. in North Salt Lake, Utah. A person who identified himself as Mike at TVPX said he had no information to share and hung up.

The emergency agency said on Twitter that first responders rescued passengers and crew. It did not provide the number of those aboard, but said all were alive.

Honduran firefighters posted photos of the crash and said there were nine people injured, but military police spokesman Mario Rivera said there were six aboard. The discrepancy was not immediately clarified.

President Juan Orlando Hernandez confirmed via Twitter that the injured were stable.

In 2008, a plane of the former airline TACA crashed in nearly the same spot. Five people died in that crash.

Tegucigalpa's airport has long been notorious as one of the more difficult approaches in the hemisphere, surrounded by mountaintops and residential neighborhoods. The airport's runway is about 6,600 feet (2,012 meters) long, according to the airport's website.

Authorities asked drivers to avoid the area and said about 50,000 people in the surrounding neighborhood lost power because the plane took down power lines.

(Christopher Sherman - Associated Press)

Friday, May 18, 2018

Boeing's Sci-Fi Foldable Wing Design for New 777s Gets Go-Ahead


U.S. regulators have approved a Buck Rogers makeover of Boeing’s revamped 777 jetliner that will allow the tips of its massive wings to fold upward after landing so the plane can park at existing airport gates.

The new wings, the largest ever created by the Chicago-based planemaker, are taking shape as Boeing builds the first of its 777X jetliners in a factory north of Seattle. They will be the most distinctive-feature for the hulking jets, the first twin-engine models built to haul more than 400 travelers.

Once the new planes touch down, the tips of the wings will rotate until they’re pointed skyward, which will make it the only commercial jet in widespread use with such a hinged design. A set of locking mechanisms will make it impossible for them to retract while airborne, according to the company.

Because commercial aircraft design standards didn’t envision a foldable wingspan, U.S. regulators had to craft them from scratch. Those “special conditions” were approved Friday by the Federal Aviation Administration, according to federal documents.

The Boeing plane’s chief project engineer, Terry Beezhold, called it “this beautiful wing” in a recent video made by the company. “This airplane actually will be the most efficient twin-jet ever developed in commercial history,” Beezhold said.

Instead of aluminum, Boeing will make the new wings out of carbon-fiber composites, which are stronger and lighter than the metal they replace. That technology helps enable the company to extend the width of the wings by 23 feet (7 meters), or 11 percent beyond the existing 212 feet.

But the wing also created a new problem: The current 777s barely fit into the standard airport gate for long-range, wide-body aircraft. The wider wing on the new 777-8 and 777-9 planes would require airports to build new gates to accommodate the plane’s increased size.

“For that reason, we developed the folding wingtip, so that in flight we can enjoy this very long, efficient span, but it will be able to operate at any airport, any gate, that today’s 777 can service,” Beezhold said.

Boeing didn’t immediately respond to a request for comment on the FAA’s action.

The 777’s new wing will make it the company’s widest, passing the 747-8, according to Boeing documents.

Airbus's double-decker A380, the largest passenger jetliner, has a wing that’s 262 feet wide. Its size required some airports to build special gates where it could load passengers.

The FAA approval for the 777-8 and 777-9 came as Boeing is already assembling the first wings for the new models. The process is delayed because building structural ribs for the wings “has taken longer than expected up front,” program chief Kevin Bartelson told Aviation Week. Bartelson said the company expects to get the process back on schedule by this summer.

The hinge on the wing created a host of potential safety issues, the FAA said. In particular, several planes have crashed in recent decades when pilots accidentally tried to take off without properly configuring movable panels on wings called flaps. The same thing could happen with the new wingtips, according to the FAA.

One of the conditions the FAA imposed is that Boeing must have multiple automatic warning systems to ensure pilots won’t ever try lifting off without the wingtips fully extended.

The agency also said Boeing must demonstrate that the wingtips could never be accidentally unlocked during flight and that “no force or torque can unlatch or unlock the mechanisms.”

Among the 10 conditions set by FAA, the wings must also be able to withstand wind gusts as high as 75 miles (120 kilometers) an hour on the ground. The agency even set requirements for how to replace the normal lights at the tips of the wings.

(Alan Levin and Julie Johnsson - Bloomberg Technology News)

Temporary Closure of Runway 12-30 for Rehabilitation Project at Long Beach Airport

American Eagle (Mesa Airlines) Bombardiar CRJ-900ER (c/n 15024) N924FJ holds short of Rwy 25R at "Kilo 1" as it waits to be the first departure from the 6,192ft Rwy on Tuesday May 15, 2018.
(Photo by Michael Carter)

Runway 12-30, Long Beach Airport's main commercial runway, will be closed intermittently over an eight-day period for rehabilitation of critical areas. As a result of this closure, neighborhoods near the airport may notice a change in aircraft flight activity.

The need for this rehabilitation project was identified during a recent Federal Aviation Administration annual inspection and has since been monitored. Airport Engineering staff have determined it is vital to initiate these repairs now, as runway fitness is one of the LGB's obligations as a FAR Part 139 airport and as required by FAA Grant Assurances to maintain safe and serviceable movement areas.

The runway closures will occur Monday, May 14, 2018, through Friday, May 25, 2018. The closure schedule will be as follows:

Monday, May 14 at 10 p.m. - Tuesday, May 15 at 2 p.m.
Tuesday, May 15 at 10 p.m. - Wednesday, May 16 at 2 p.m.
Wednesday, May 16 at 10 p.m. - Thursday, May 17 at 2 p.m.
Thursday, May 17 at 10 p.m. - Friday, May 18 at 2 p.m.

Runway open from Friday, May 18 at 2 p.m. - Monday, May 21 at 10 p.m.

Monday, May 21 at 10 p.m. - Tuesday, May 22 at 2 p.m.

Tuesday, May 22 at 10 p.m. - Wednesday, May 23 at 2 p.m.
Wednesday, May 23 at 10 p.m. - Thursday, May 24 at 2 p.m.
Thursday, May 24 at 10 p.m. - Friday, May 25 at 2 p.m.

(Long Beach Airport - Media / Noise Office)

Airbus loses ground in bid to sell jets to United

Airbus's hopes of winning an immediate respite from slow sales of its A330neo jetliner with an order from United Airlines are dwindling, leaving a gap in future production weeks before it is due to enter service, industry sources said on Friday.

Airbus has been competing with Boeing to replace all or part of a fleet of some 50 Boeing 767s at United Airlines , people familiar with the discussions say.

Others said Airbus had made an unsolicited offer to try to head off plans by United to use rights to buy more Boeing 787s.

It's the latest twist in one of the fiercest recent jet market battles, pitting Boeing's 787 against the latest type of A330, with Boeing so far holding the upper hand.

"Airbus doesn't have United," one person familiar with the matter told Reuters, though others did not exclude a chance to compete for a second tranche of business later.

Sources say Boeing has an advantage in any competition because United already flies its 787 and has options for more.

Airbus , Boeing and United declined comment.

Airbus is keen to clinch a deal after losing to the 787 at two other U.S. carriers.

It also hopes to defend planned production rates, which have only just been lowered due to weak demand.

Sources said more than 15 A330 output slots remain unfilled in next year's schedule, heightening pressure to win deals.

Airbus has sold 214 A330neos to around 13 customers led by AirAsia , which has been giving mixed signals over whether it plans to take the jets or switch to Boeing.

AirAsia Group boss Tony Fernandes said this week the A330neo was still the "favorite choice" but he was delaying a final decision until he saw how the jet performed.

America's withdrawal from the Iran nuclear accord threatens the sale of 28 A330neos to IranAir.

Another reason Airbus wants to add a new marquee customer is that it would make it easier for airlines to finance A330neo purchases, and potentially hold back the tide of 787 sales under a hard-charging new Boeing leadership, financial sources said.

Banks add risk factors and toughen the terms when backing thinly sold jets and the risk is that the more popular 787 could become cheaper to finance, even though the price of an A330neo is lower after allowing for market discounts.

Airbus has said it is confident about long-term demand and is talking to several airlines about the 310-seat plane.

"It's a big segment and we think we have the right airplane at the right time," Airbus Americas Chairman Jeff Knittel said.

(Tim Hepher and Alana Wise - Reuters)

Billionaire Paul Allen's Stratolaunch preps for first flight this summer

Billionaire Paul Allen's massive Stratolaunch aircraft is gearing up to take flight for the first time.

Stratolaunch CEO Jean Floyd revealed the plans on Twitter, saying the giant satellite-launching aircraft would conduct three more taxi tests on the runways at its California home base in the Mojave Desert before taking to the skies.

"The Stratolaunch aircraft remains on-track for first flight later this summer. Three more taxi tests and we will be ready to 'slip the surly bonds,'" said Floyd, who did not reveal any specific date for the flight.

In a separate tweet this week, Floyd added: "Operations are coming on-line as we approach aircraft first flight this summer. Launch vehicles will be integrated in our 88,000 square foot low-bay and rolled directly under the aircraft for mating ops in the 103,256 square foot T-hanger."

The Stratolaunch aircraft is wider than the length of a football field and 14 feet longer than a Boeing 787 Dreamliner.

Floyd also offered aviation enthusiasts a few more details about the wheels on the jet. For instance, the Stratolaunch aircraft has a total of 28 wheels, he wrote. Of the 28 wheels, 24 are Boeing 747 main body gear assemblies, or 12 wheels on each Stratolaunch fuselage.

There are also two nose gear wheels on each fuselage, also from a 747, he added.

The company has been somewhat secretive about what's inside the airplane, but Floyd shared details recently.

"The majority of the Stratolaunch aircraft controls are legacy 747 components (engines, gear, cockpit, hydraulics and avionics)," he said on Twitter. "Proud to be hosting such a reliable and successful heritage on our aircraft. We salute the history of the incredible 747."

(Andrew McIntosh - Puget Sound Business Journal)

Wednesday, May 16, 2018

Silk Way West launches B747F to Liege

(Silk Way Cargo)

Baku-headquartered freighter operator Silk Way West Airlines has launched a new regular Boeing 747F link between Belgium’s Liege Airport and its cargo hub in the capital of Azerbaijan.

Twice-weekly flights into Liege were launched at the end of April.

Silk Way West Airlines president and chief executive Wolfgang Meier commented: “The aim is to further knit our European network by adding more destinations and maintaining a denser schedule in order to offer our customers the highest flexibility.”

In March, Silk Way West re-introduced scheduled B747-8 freighter services into Budapest, returning to the Hungarian capital after an absence of nearly two years.

The first flight landed at Liszt Ferenc International Airport on March 18, and the carrier now connects Budapest twice a week with Baku.

Alongside these network additions, Silk Way West Airlines is also growing its fleet.

It is in the process of introducing two more B747-400Fs to its operating fleet. The first of the two freighters joined Silk Way West Airlines last week, and the second one is to join the carrier in June.

The carrier operates a global network encompassing more than 45 destinations, connecting Baku with China, Central Asia, the Middle East, Europe, Africa and North America.

An interview with Wolfgang Meier will appear in the Freighters World supplement to June's Air Cargo News.


Aeromexico Scales Back ‘Unsustainable’ Flights, Following United

Aeromexico, Mexico’s largest airline, is trimming its expansion plans as a seating glut drags down fares.

Capacity will expand 7 percent the rest of this year, said Chief Executive Officer Andres Conesa. That’s down from a previous forecast of about 9 percent, he said, citing the need for increased discipline as rising fuel prices add to earnings pressure.

The carrier is tapping the brakes as a weaker industry outlook has prompted investors to dump Mexican airline shares. Years of go-go growth have left the domestic market awash in capacity, while an open skies deal with the U.S. prompted airlines from both countries to add cross-border flights. United Continental Holdings Inc. said last week it would chop flights to Mexico, saying service to some markets was unsustainable.

“We’re starting to see the impact on profit, but it has more to do with excess capacity than weak demand,” Conesa said in an interview at Bloomberg’s offices in Mexico City.

Aeromexico fell less than 1 percent to 24.10 pesos at 1:58 p.m. in Mexico City. The shares slid 15 percent this year through Tuesday. Its biggest domestic rival, Volaris, tumbled 28 percent this year while the benchmark IPC index fell 6.3 percent.

Delta Partnership

Aeromexico has been able to fend off some of the capacity-related pressure thanks to its joint venture with Delta Air Lines, which owns 49 percent of the Mexico City-based company, Conesa said. Passenger traffic between Mexico and the U.S. rose 6 percent in March from a year earlier, according to the Transportation Ministry.

While Aeromexico eked out a slim profit in the first quarter, Volaris reported a loss of 1.1 billion pesos ($56 million) and posted the largest one-day share decline since 2016. The Mexican airline industry is entering a period of uncertainty amid a potentially unsustainable drop in fares, Barclays Plc said last week.

The highest jet-fuel prices since 2014 -- currently at $2.26 a gallon for purchase in New York harbor -- are adding to the pressure. Aeromexico hedged for about half of its fuel requirements using call spreads with a strike price starting at $1.78 per gallon, the airline said in a call with analysts last month.

Peso Weakness

Aeromexico is naturally hedged against peso weakness, with about 60 percent of its sales in other currencies and about two thirds of costs denominated in dollars, Conesa said. But persistent currency weakness represents a risk to Mexico’s boom in air travel.

“If the peso continues to depreciate, it will have an impact on demand, on real activity and that will have an impact on our business and on the Mexican economy,” he said.

The Mexican currency has tumbled 8.5 percent in the last month alone, dragged down in part by uncertainty about the future of the North American Free Trade Agreement. Investors are also growing increasingly concerned about a deeper rout amid tensions between business leaders and firebrand presidential candidate Andres Manuel Lopez Obrador, the frontrunner in the July 1 election.

Lopez Obrador’s pledge to cancel the construction of a $13 billion airport in Mexico City represents another risk for Aeromexico, which is banking on the hub to boost air traffic. Conesa said he looked forward to working with whoever wins the race.

“We’ll work with the new president and their party to make the case that the airport is needed and is going to be good for the industry, for the country, the economy and job creation,” he said.

Fleet Plans

Aeromexico is still weighing an order of Bombardier C Series planes, Conesa said. The carrier had initially considered the plane when the U.S. slapped tariffs on the Canadian aircraft after a trade complaint brought by Boeing Co.

A trade panel’s ruling in Bombardier’s favor paved the way for Delta to get the planes, giving Aeromexico more time to study its fleet plans. The company flies Boeing 737 and 787 Dreamliner planes, while its regional unit operates Embraer jets. Aeromexico is also considering an order for Embraer’s upgraded E2 planes -- if it takes new planes at all.

“It opened a window of additional time, so we’re analyzing whether to bring the C Series, the new E2 or staying as we are,” he said. “We’re hoping to make a decision in the second half of the year.”

(Andrea Navarro - Bloomberg Business)

Southwest sets its sights on international routes, including to South America

Southwest sets its sights on international routes, including to South America 28

Southwest Airlines carries more passengers within the United States than any other airline. Now it's looking to fly outside the U.S., including to destinations in South America.

Southwest's CEO Gary Kelly told shareholders on Wednesday that 96 percent of the carrier's flying is domestic and that it only serves 14 international destinations currently. But there are as many as 50 other destinations in North America and parts of South America that it could serve, he said.

"Not all next year," Kelly said. "It may take us 25 years."

While such an expansion could be many years a way, a move to northern South America could include destinations in Colombia, Ecuador, and Peru, where tourism has grown in recent years. Southwest's core market is leisure travelers. An expansion to South America could follow similar network growth to the region by competitors like Spirit and JetBlue, and possibly put it in competition with large U.S. airlines like Delta, United and American.

Southwest is focused this year on growing its domestic network. Last year it announced its plans to offer service to Hawaii. Kelly said the goal is to sell flights to the islands by the year's end. The airline is in the process of revamping its fleet with new Boeing 737 MAX, a more fuel-efficient model of Boeing's best-selling plane.

Southwest last month announced it would not only fly to Hawaii from California but that it would fly between the islands, sending shares of Hawaiian Airlines tumbling.
(Leslie Josephs - CNBC)

Southwest Airlines finds no fan blade failures, but sends 'several dozen' for further examination

After inspecting all the fan blades in its fleet of engines, Southwest Airlines found no structural problems like the one that caused the left engine aboard Flight 1380 to fail last month and kill a passenger.

"The engine inspections are complete, the findings have been zero, which is obviously expected but good news," said Gary Kelly, Southwest's CEO, during the airline's annual meeting Wednesday in Maryland.

However, Kelly also told reporters after the meeting that several dozen fan blades were sent to General Electric for further inspection, according to Bloomberg.

Those fan blades had some coating anomalies, said Southwest chief operating officer Mike Van de Ven, adding that they were sent to GE "out of an abundance of caution." Kelly added that he didn't think the examinations would turn up any problems.

The place where the fan blade was attached to the engine that failed during the April 17 flight showed signs of metal fatigue, according to a preliminary investigation by the National Transportation Safety Board after the accident. New Mexico businesswoman Jennifer Riordan died from injuries suffered when she was sucked partially out of the window that blew out after being struck by engine shrapnel.

As a result, the CFM56-7B engine model — made by CFM International, a joint venture between GE and Safran — faced increased regulation scrutiny from the Federal Aviation Administration.

The FAA issued an airworthiness directive, or AD, that called for expedited inspection times of fan blades within the engine model. Southwest inspected the fan blades on its engines quicker than the AD called for.

Increased dividends

The Dallas-based airline also announced an increase to its quarterly dividend Wednesday. The new dividend will increase to 16 cents from 12.5 cents a share, a 28 percent jump.

The new dividend will be paid out June 27. Annualized, the increase amounts to more than $370 million for the airline's shareholders, Kelly said.

The company's board of directors also announced it intends to repurchase $2 billion in shares. This latest share repurchase program will commence after its previous $2 billion share repurchase program, which started in May 2017, finishes its last $350 million of share purchases.

So far, the company has repurchased approximately 19.8 million shares under the May 2017 plan.

"We remain committed to maintaining an investment grade balance sheet and strong financial position," Kelly said in a prepared statement.

Low-fare summer

The carrier also announced a mega sale for the summer months with one-way fares starting at $49 for select routes.

The sale is good through May 18 at 11:59 p.m. in whatever time zone the originating city is in. In addition to the $49 price point, Southwest is also offering one-way flights at $79, $99 and $149.

The sale could be meant to spur ticket sales after the company booked fewer passengers than normal after Flight 1380's accident. In the company's first quarter earnings call, it estimated the accident had between a $50 million and $100 million impact on bookings.

"The full revenue impact isn't totally clear," said Tom Nealon, Southwest president, on the earnings call. "But we do expect there to be a continued impact for a period of time."

That reduced number in bookings was in part because of a self-inflicted drop in website traffic. After the accident, Southwest halted its marketing channels. Things like its Twitter feed, television ads, and emails promoting flight deals were stopped in wake of the accident.

Those marketing channels draw a lot of eyeballs to Southwest's website, Nealon said. Website traffic to Southwest's homepage is more important than the other big airlines, considering Southwest doesn't use third parties like Google Flights or Kayak to help sell flights.

(Evan Hoopfer - Dallas Business Journal)

Fare fight: Alaska Airlines ready to battle Southwest Airlines in Hawaii, CEO Brad Tilden says

Alaska Airlines is ready to battle Southwest Airlines when the discount carrier launches service to Hawaii from four California cities in December or early 2019, Alaska CEO Brad Tilden says.

"We've competed against Southwest Airlines for a long, long time," Tilden said. "They are a very good airline but we've got to go on the field and compete."

Challenges like this, he said, make Alaska stronger.

"If I were to guess, five, 10, 15 years from now," Tilden said, "I would guess we'll have an extraordinarily strong franchise in Hawaii."

Southwest announced it will fly to Hawaii from Oakland, San Jose, Sacramento and San Diego, promising "aggressive pricing" and two free bags, but no meals and no reserved seats.

Southwest will provide inter-island service and serve Hawaii’s four primary airports: Honolulu, Maui, Kauai and the Big Island.

"We are going to lead on pricing and we are going to generate a lot of traffic very quickly,” Southwest CEO Gary Kelly told a Hawaiian newspaper.

That could quickly lead to a fare war. But Tilden doesn't seem worried, saying Alaska Airlines will "embrace" competition.

"I think the mindset has to be competition is a good thing," Tilden said.

Tilden said the airline industry in general is very competitive, noting Alaska has benefited from its own competitive expansions due to the lack of restrictions on U.S. destinations.

Both airlines rely on Boeing 737 jets as their workhorses, but Alaska will tout several things as differentiators, Tilden said, including its on-time performance, fares that are "very, very close to the low cost airlines," superior onboard service, a great mileage plan and premium cabins.

"At the end of the day, there are a lot of things to differentiate Alaska," Tilden said.

Veteran airlines analyst Helane Becker with investment firm Cowen told her clients Alaska and Hawaiian Airlines "are the biggest losers" in Southwest's Hawaii expansion.

"We expect Hawaiian to protect their turf against Southwest, while competition between Alaska and Southwest remains a major theme for both companies," Becker said.

Steve Danishek, a Seattle travel industry analyst, disagreed somewhat, saying he doesn't see much initial pressure from Southwest on Hawaiian routes because the budget airline will attract mostly "pocketbook flyers."

However, Southwest's lower pricing, combined with inter-island flights, could eventually threaten Alaska's routes over time, Danishek said.

"Alaska may have to adjust fares, or a better and cheaper response would be to offer bonus miles (double or triple mileage) to compensate customers," Danishek said.

How much could fares drop? University researchers have found when Southwest enters a market, average fares decreased by up to 24 percent.

(Andrew McIntosh - Puget Sound Business Journal)

Tuesday, May 15, 2018

EU paid Airbus billions in illegal subsidies, WTO rules

The World Trade Organization (WTO) has ruled that the European Union (EU) failed to comply with requests to end subsidies for Airbus.

The US Trade Representative (USTR) said the ruling in the dispute opens the way for placing tariffs on EU goods.

The USTR argued that European countries had given $22bn in state aid to Airbus to help launch its A380 and A350 jets, causing losses to US rival Boeing.

The European Commission said most of the disputed support ended in 2011.

It said it had "only a few" remaining things to do to be compliant and pledged "swift action" on those fronts.

What is the history of the dispute?

Tuesday's ruling in favor of the US, which brought the case on behalf of plane-maker Boeing, brings an end to a dispute which began in 2004 over $22bn (£16.3bn) in subsidized European financing for Airbus.

The WTO initially found in favor of the US in 2011. The US subsequently complained that the EU and certain member countries were not in compliance with the decision, prompting further wrangling between the two sides.

On Tuesday, the WTO dismissed an appeal by Airbus, saying the European plane maker had failed to fix the harm done to US rival Boeing.

Boeing chairman and chief executive Dennis Muilenburg said : "Today's final ruling sends a clear message: disregard for the rules and illegal subsidies are not tolerated."

A logo at the Airbus A380 assembly site in Blagnac, southern France, on March 21, 2018. 
Image copyright AFP/Getty
The EU and Airbus argued that the WTO had rejected many of Boeing's initial claims in the suit, limiting the damage.

Airbus is also waiting for the outcome of a similar WTO case challenging US government support for Boeing.

Airbus chief executive Tom Enders said : "Of course, today's report is really only half the story - the other half coming out later this year will rule strongly on Boeing's subsidies and we'll see then where the balance lies." 

What does the ruling mean?

The decision authorizes the US to retaliate against Europe with sanctions, the amount of which would be determined in another WTO decision.

Boeing said it is expecting the "largest-ever WTO authorization of retaliatory tariffs" - which would mean billions of dollars.

The retaliation can apply to a range of goods and could come as early as 2019, analysts said.

What will this do for US-EU relations?

It is rare for a dispute to reach this point. And in the past, the counter-claims over US subsidies for Boeing have kept tensions in check, averting tariffs.

But on Tuesday, US Trade Representative Robert Lighthizer threatened further action.

"Unless the EU finally takes action to stop breaking the rules and harming US interests, the United States will have to move forward with countermeasures on EU products," he said.

The Trump administration may decide to use the decision as leverage to advance other goals, said Chad P. Bown, a senior fellow at the Peterson Institute for International Economics in Washington.

The White House is currently negotiating with the EU over steel and aluminum tariffs. The US has also expressed frustration over tariffs placed on US goods such as automobiles.

"This has the ability to get complicated," Mr Bown said.

The leverage would be short-term, depending on the outcome of the case against the US, he added.

Analysis by Theo Leggett

The WTO panel has issued a ruling, and both sides have claimed victory. To anyone who has followed the ins and outs of this A380-sized trade dispute over the past 14 years, that will not come as any surprise.

Boeing and the US are trumpeting their view that it shows "disregard for the rules and illegal subsidies is not tolerated". Meanwhile Airbus is portraying the decision as a "significant legal success" because many of Boeing's original complaints have been dismissed along the way.

And still grinding through the WTO machinery is a separate complaint the EU has filed against Boeing over allegedly illegal subsidies from Washington State, the US Department of Defense and NASA.

The reality is that developing large aircraft requires huge amounts of money - and the best source of that, one way or another, is governments. It isn't only happening in Europe either. Russia and China, for example, are both funding major civil aircraft programs.

In fact, this dispute looks increasingly like a relic of the days when Boeing and Airbus enjoyed a cozy duopoly, and could afford the distraction of years of complex litigation.

(BBC Business News / Yahoo News)

Southwest Airlines Suffers Multiple Headwinds, Down 20% YTD

Shares of Southwest Airlines LUV have declined 20.2% so far this year, underperforming the industry’s decrease of 12.5%.
The back-to-back in-flight glitches put Southwest Airlines (LUV) in a tight spot. Further adding to its woes are the rising fuel costs.

Reasons Behind the Plunge

Southwest Airlines has been grappling with numerous challenges right from the onset of 2018. It all started with the winter storm Grayson in January, causing multiple flight cancellations and hurting the company’s top line. The destruction continued unabated with successive nor’easters striking in March, further dampening the situation.

The storms resulted in huge revenue loss for the company.The adverse effects were partly witnessed in first-quarter results wherein the low-cost carrier reported lower-than-expected revenues. Also, passenger revenue per available seat mile (PRASM: a key measure of unit revenues) slid in the period. Also, a tragic incident of April resulted in large-scale dissatisfaction among the customers as the carrier made an emergency landing at the Philadelphia International Airport due to an engine failure. Consequently, one of the passengers died while seven others were injured.

Southwest Airlines has been struggling with low bookings ever since this fatal incident. In fact, the carrier provided a bearish view on unit revenues for the second quarter due to the same reason. It expects revenue per available seat mile (RASM: a key measure of unit revenue) to decline between 1% and 3%. Also, last month’s traffic results were affected by the incident. Traffic slipped 0.3% while capacity expanded 1.5%. As traffic contracted and capacity increased, load factor deteriorated 150 basis points. What's worse is that the impact from the incident is likely to linger for quite some time and recovery of the lost revenues might be a slow process.

Similar incidents have happened this May too. Earlier in the month, the carrier made an abrupt landing when one of its window panes broke. Adding to its woes, another Southwest Airlines flight had to make an emergency landing a few days ago due to pressurization issue, causing massive panic among its passengers. The successive flight horrors will possibly add to the airline’s already low demand, thereby denting profitability and revenues.

Another issue having engulfed the entire airline industry of late is the rising fuel costs. The high fuel costs are anticipated to hurt Southwest Airlines' bottom line in the second quarter. Notably, economic fuel costs are projected at $2.20 per gallon, much higher than the year-ago figure.Undoubtedly, the above negatives substantiate the company’s Zacks Rank #5 (Strong Sell).

(Zacks Equity Research - Zacks) 

Gulfstream G650 (c/n 6313) N613GD tbr N667HS

Arrives back at Long Beach Airport (LGB/KLGB) following a pre-delivery test flight on May 14, 2018.
(Photos by Michael Carter)

JAL to launch long-haul LCC in 2020

Japan Airlines will establish a new Tokyo Narita-based low-cost unit focused on long-haul routes that will start operations in 2020.

The Oneworld carrier says the as-yet unnamed carrier will operate two Boeing 787-8s and fly to destinations in Asia, Europe and the Americas.

It adds that the unit’s long-haul focus will complement the domestic and regional international services of Jetstar Japan, in which it holds a 47.1% economic interest and 33.3% voting stake.

“When JAL establishes the new LCC business, the company aims to create new demand, working along with the successful services provided by Jetstar Japan, which features domestic and short-haul international flights,” it says.

Qantas holds an equal interest in Jetstar Japan, with Century Tokyo Corporation and Mitsubishi making up the remainder.

The company that will operate the new low-cost carrier will be established in June, with details on its capitalisation to be announced at a later date. It will be a consolidated subsidiary of JAL group, and fits with its strategy of developing new business streams.

JAL’s announcement of the new carrier follows a report in Bloomberg last week quoting a senior executive who said that the premium carrier was analyzing launching a new low-cost unit.

At that time, JAL told FlightGlobal that no decision had been made, and that the analysis was part of its usual course of business.

The launch comes as rival ANA Holdings prepares to merge two of its budget brands – Vanilla Air and Peach – ahead of a planned launch on medium-haul routes in 2020.

(Ellis Taylor - FlightGlobal News)

Airbus CFO Wilhelm to Leave in 2019 Along With CEO Enders

Airbus Chief Financial Officer Harald Wilhelm will follow Chief Executive Officer Tom Enders out the door in April, deepening a shakeup of senior management as the European planemaker grapples with the future of the A380 superjumbo and a long-running bribery investigation.

Wilhelm, 52, decided “in agreement with the board of directors” that he will leave in April after 27 years at Airbus and its precursors, the Toulouse, France-based company said in a statement Monday.

While Enders said the departure signifies “no change of company strategy or equity story,” the move adds to the sense of upheaval at the highest levels of the manufacturing giant.

Harald Wilhelm, left, and Tom Enders.
(Photo: Balint Porneczi / Bloomberg)

Airbus is already searching for a replacement for Enders, who decided in December that he would leave in April. His No. 2, Chief Operating Officer Fabrice Bregier, left after being passed over for the CEO job, while Marwan Lahoud, head of strategy, departed in 2016 and sales supremo John Leahy, a fixture at the company for decades, recently retired.

Shares of Airbus fell 1.4 percent to 98.06 euros as of 9:31 a.m. in Paris.

Though not someone who was expected to ascend to the top job after 18 years spent within Airbus’s finance division, Wilhelm is regarded as a safe pair of hands and someone prepared to assert the need for discipline in reining in problem projects.

A380 Clash

The German national, who previously worked with Airbus precursor DaimlerChrysler Aerospace, played a big role in controlling spending on the A350 wide-body and was the first top executive to publicly question the future of the slow-selling A380. The A380 comments led to a clash with Leahy, who was still seeking to promote the model as the plane of the future. Bregier intervened as peace-maker. The aircraft has survived so far after a recent order from Dubai-based Emirates, but its future remains a challenge for the company without further orders.

Wilhelm’s plan to leave comes as Britain and France are investigating whether sales intermediaries, who helped the company sell planes, paid bribes to secure the deals. U.S. authorities have asked the company for information about the European probe to assess whether any of the alleged misconduct could fall within U.S. jurisdiction. Airbus has warned of “significant penalties” and newspapers have speculated that the fines could surpass $1 billion.

Smooth Transition

Wilhelm said in the release Monday that next year will be the “right time” to move on, adding that he remains “committed to the performance of the company” and will work with management to ensure a smooth transition to the next CFO.

Airbus’s board in March sought to assert control over the CEO succession as speculation mounted over whether the company would continue previous practice and appoint a French candidate to replace Enders, who is German, saying it would make the choice known by the year’s end but not comment before then.

The manufacturer, whose two biggest shareholders are the French and German governments, has hired a consultant to help with the process, and plans to submit the choice to investors at its 2019 annual meeting when Enders, who turns 60 in December, will step down.

The succession became clouded when Airbus appointed helicopters chief Guillaume Faury to head the commercial aircraft business, raising the possibility of the group’s two top jobs being held by French nationals. Faury remains a possible internal appointee for CEO.

Airbus picked an external candidate, Eric Schulz from Rolls-Royce Holdings Plc, to succeed Leahy, highlighting how the company is keen to inject new blood.

(Phil Serafino and Christopher Jasper - Bloomberg Business)