Turkish Air postponing dozens of Airbus, Boeing jet deliveries

The carrier is delaying deliveries of 39 of the upgraded single-aisle planes originally scheduled for 2018 to 2020.

Turkish Airlines said it plans to postpone dozens of Airbus Group and Boeing narrow-body jets as it contends with a turbulent travel market following terror attacks in Istanbul and Europe.

The carrier is delaying deliveries of 39 of the upgraded single-aisle planes originally scheduled for 2018 to 2020, the company said in a filing Friday to Borsa Istanbul. Turkish is raising its 2022 deliveries for the workhorse jets to 30 from the six it had previously planned.

The company didn’t elaborate on the models that will be deferred, but it has ordered 92 Airbus A321neo jets, 65 Boeing 737 MAX 8s and 10 MAX 9 models.

Turkish, based in Istanbul, said it was reducing flight frequencies and shifting to smaller planes on “demand-challenged routes” after posting a second-quarter loss of 656 million liras ($215 million) in August.

(Julie Johnsson & Taylan Bilgic - Bloomberg Business News / The Seattle Times)

Cathay Pacific flies Boeing 747 over Hong Kong one last time

Hong Kong flag carrier Cathay Pacific bid farewell to its Boeing 747 fleet Saturday with a final low-altitude flyby over the city's iconic skyline.

The final route harked back to dramatic images of the planes flying low over rooftops of apartment blocks as they used to approach the old airport on the harbour.

Saturday's flight, codenamed CX8747, flew over the city's famous Victoria Harbour and the former Kai Tak Airport, which closed in 1998 and was considered one of the most challenging places to land an aircraft due to its crowded urban site surrounded by steep mountains.

Around 300 airline staff made a donation of HK$747 ($96) to ride on the venerable aircraft, which was first used by Cathay Pacific in 1979, for the last time, the airline said.

Photos of the last flyby, at an altitude of 610 metres (2,000 feet) were posted on the airline's Facebook page, which showed some 747 fans waving goodbye.

"Goodbye and thank you, our dearest Boeing 747," Adonis Lau said on the airline's Facebook.

"Cathay 747s brought me and my family between HK and our stays in US and Canada during my childhood. I'll miss my time on the upper deck," Denise Ho said.

The airline had said the four-engine 747 aircraft played a significant role in growing Hong Kong into an international aviation hub.

It added the Boeing 747 had spent 3.1 million hours in the air, after its last commercial flight from Tokyo to the southern Chinese city on October 1.

The 400 passenger 747 Jumbo Jet was launched in 1970 and dominated international air travel and cargo over the next decades.

(AFP / Yahoo Business News)

747’s survival rests on Russian cargo firm

Russian carrier AirBridgeCargo, the customer Boeing is counting on to keep the 747 alive, flew a new 747-8 freighter airplane from the Everett plant Friday to begin service at Sea-Tac Airport.

The Russian cargo airline keeping Boeing’s 747 jumbo jet program alive flew a new 747-8 freighter plane Friday from the Everett plant where it was built to Seattle-Tacoma International Airport, where it began service.

The AirBridgeCargo (ABC) jet was greeted with a water-cannon salute and welcoming speeches, celebrating the airline’s launch late last month of twice-weekly scheduled service out of Sea-Tac.

“This is the best cargo plane in the world,” Alexey Isaikin, president of ABC parent company Volga-Dnepr Group, said in an interview. “I believe in the future of this airplane. I hope the program continues.”

With serious doubt about how long Boeing will be building its most recognizable plane, Isaikin’s support is critical.

Volga-Dnepr Group now owns 18 of the jumbo jets, including 10 of the latest 747-8F model. It has 15 more on order.

Sales of widebody jets have slowed dramatically this year, though a segment of the market was lifted by Qatar Airway’s 40-plane order for 787s and 777s earlier on Friday.

The downturn is deeper for the 747, for which Boeing last month slowed the production rate to a crawl of just one plane every two months.

Ideal for carrying big cargo shipments with its signature nose opening, the 747 depends for further sales almost exclusively on the air-cargo market, which has been in a prolonged slump since the global financial crisis hit eight years ago.

Hendrik Falk, ABC vice president for the Americas, said that though the carrier’s business has been hit, it maintains a long-term perspective and is expanding its network.

It opened its first North American hub in Chicago in 2011, added Dallas in 2014, Los Angeles and Atlanta last year, then Houston and now Seattle this year.

Falk said the two flights per week in and out of Sea-Tac will carry a lot of aerospace-industry cargo for Boeing and its suppliers, and even for Airbus.

Friday’s cargo underscored that point: heavy stands used to transport 787 engines to Boeing and now being returned to the Rolls-Royce plant in Singapore, as well as aircraft seats made in Washington state en route to Europe to be installed on Airbus jets, said Jerry Chavez, ABC’s executive director for North America.

ABC is seeing signs of the typical year-end uptick in demand as consumer goods such as iPhones and computers are shipped from Asia to North America for the Christmas season.

However, next year “is a crystal-ball topic,” Falk said. “We’re hoping 2017 will be a stronger year.”

Boeing will second that.
 
The jet maker’s website lists just 14 unfilled firm orders for the 747. But that includes four for bankrupt Russian carrier Transaero, and two for Nigerian carrier Arik Air, which doesn’t want to take them.

That leaves probably just eight truly firm orders on Boeing’s books, including one for ABC.

Falk said Friday that the airline’s commitment at the Farnborough Air Show earlier this year to take 15 more 777 freighters is solid, though only one is reflected in Boeing’s order book.

ABC will take two of the aircraft per year, he said.

So provided the orders Boeing is relying on survive, it can plausibly count on delivering another 26 airplanes. Depending on the scheduled delivery dates, that could stretch out the program to the end of the decade.

By then, Boeing will be building another two or three highly customized models to serve as Air Force One planes for the president.
 
Falk said the plane delivered Friday, like ABC’s previous 747-8 deliveries, was financed by Boeing through its Boeing Capital unit.

That may reflect the current unavailablity of U.S. Export-Import Bank financing, which is stalled by inaction in the U.S. Senate.

It does underline the unusual effort Boeing has to expend to keep this jet program going.

(Dominic Gates - The Seattle Times)

Boeing lands huge deal with Qatar Airways for 40 wide-body 787 Dreamliner and 777 jets

Boeing and Qatar Airways signed a deal Friday in D.C. representing the Middle Eastern airliner's largest single deal in its 19-year history.

Qatar Airways committed to purchasing 30 Boeing 787-9 Dreamliners and 10 Boeing 777-300ER (extended range) wide-body jets worth a total of $11.7 billion at list prices, though the aircraft manufacturer likely offered a significant discount.

The airline also signed a letter of intent for up to 60 additional 737-8 Max aircraft worth as much as $6.9 billion, representing the first Qatar Airways order of narrow-body jets made by Boeing.

"Qatar Airways is well-known within the airline industry for demanding nothing but perfection from the aircraft manufacturers,” Qatar Airways CEO Akbar Al Baker said at a news conference in Washington, D.C., Friday. "This order reflects Boeing’s continued effort to meet and deliver aircraft in line to our exacting standards.”

Boeing Commercial Airplanes CEO Ray Conner said the deal will support 104,000 American jobs "throughout the delivery stream of these airplanes."

"This is not only in the Seattle area, but this is across the United States,” Conner said, referring to Chicago-based Boeing’s facilities in Everett.

Qatar Airways will fly the 777s between Doha, Qatar, and Auckland, New Zealand — which will be the world's longest commercial nonstop flight when the service launches, Al Baker said.

Boeing’s relationship began with the Qatari airliner in 2006. Of the 190 aircraft in Qatar Airways' fleet, 84 are Boeing jets.

(James Bach - Puget Sound Business Journal)

Boeing's Cash Flow Called Strong, But A320 Line Seen As Major Threat

Boeing's cash flow and shareholder returns look solid, but 777 weakness and competition from Airbus' A320 line are major risks, said Baird analysts Thursday.

Baird initiated coverage on Boeing with an outperform rating and 161 price target, citing a "robust backlog." Analyst Peter Arment said the aerospace giant will generate $23 billion in free cash flow from 2016 to 2018, with $15 billion available for buybacks after paying dividends.

But Arment warned in the note that Boeing faces a risk from Airbus as the A320neo family has been outselling the 737 Max family and now has 59% of the market share.

Boeing's 777 production bridge is also a risk, as there is still pressure on wide-body orders, according to Arment. The company has been trying to maintain its 777 production rate to ensure a smooth transition to the next-generation 777X, but orders for the older model have been drying up as customers prefer to wait for the new one.

Shares ended 0.2% lower at 134.42 in the stock market today. Boeing is consolidating in a flat base as its shares continue to climb about its 50-day line.

Also Thursday, Boeing announced that third-quarter deliveries fell 5.5% year over year to 188 planes. Deliveries of its 737 fell to 120 from 126, 787 deliveries fell to 36 from 37 a year ago, and 777 deliveries were flat at 22.

Airbus said Thursday that it delivered 62 planes in September, up 26.5% from a year ago, including 10 A321neos and 10 A321 current engine option aircraft to VietJet. The European aerospace giant also reported new orders and bookings for 49 planes last month.

U.S.-listed shares of Airbus fell 1.1% to 15.16.

(Gillian Rich - Investors Business Daily News)

Southwest Airlines flight attendants' reaction to tentative agreement is mixed

A new three-year tentative agreement was distributed to Southwest Airlines flight attendants late last week, and as some sources predicted, the reaction to the document, which runs a whopping 277 pages in its entirety, has been decidedly mixed, despite efforts in recent weeks by both leadership of Transport Workers Union Local 556 that represents Southwest flight attendants and Southwest Airlines management to put the most positive spin possible on the deal.

According to some sources, the 15.9 percent ratification bonus amounts to little more than "a joke."

Noted one source among the ranks of Southwest flight attendants: "Subtract a yearly cost of living adjustment to it and it's nothing," especially when factoring in a 25 percent tax on the bonus.

Some are feeling disrespected because pilots got a full retroactive pay deal that is unavailable to flight attendants in their tentative agreement.

Noted another source: "You cannot give one employee group full retro on pay, 401K and profit-sharing and then toss another a partial bone."

Also of concern, some say, is the absence of any language to address the excessive amounts of unpaid ground time many flight attendants have been enduring recently. Yet another concern is insufficient language about what might change for flight attendants if Southwest were to announce another airline merger, which has been rumored for months to be in Southwest CEO Gary Kelly's game plan.

Some argue the new TA is just a brazen appeal to many junior flight attendants who want the money. Indeed, in a letter to more than 14,500 rank and file flight attendants from the Local 556 negotiating team that accompanied distribution of the tentative agreement, money was stressed: "The total value of new money to us as flight attendants in the new TA is $350 million. That is over one-third of a billion dollars in our pockets."

But is that enough? A source who has been supportive of the negotiating team didn't understand the pushback on the new TA: "Greed is a horrible thing. Reality is our job is unskilled labor with no education requirements and four weeks of training. What is the ceiling for such a position? Serving cokes and peanuts I have become a multi-millionaire." The source also noted personal earnings last year from the job as a Southwest flight attendant of $155,000 not including per diems, as well as $24,000 in profit sharing and $15,000 in a 401K match.

Even so, another source went out on a limb and predicted the new TA would be voted down by a 70/30 margin. Whether efforts to educate the Local 556 rank and file about the TA will make a difference in getting the deal passed remains to be seen. The letter from the union negotiating team encouraged rank and file to "support your TA educators," adding "they are your fellow flight attendants, working for our collective future."

Finally, the letter from the negotiating team reminded union members of an overarching theme: "Is this TA perfect? Not at all, no contract is. Bargaining is a process of give and take."

(Lewis Lazare - Chicago Business Journal)

Boeing CEO says company 'making progress' on airplane deal with Iran

Aircraft maker Boeing Co. is making progress on a deal to provide more than 100 commercial airplanes to Iran though none will be delivered in 2016, the company's top executive said on Tuesday.

The deal is part of efforts to rebuild Iran's elderly fleet, an agreement included in a 2015 pact between Tehran and six world powers to lift most Western sanctions in exchange for limiting Iran's stockpiles of substances that could be used to make nuclear weapons.

"We won't deliver any aircraft under that deal this year — these are deliveries that are a year, two, three downstream," Boeing Chief Executive Officer Dennis Muilenburg told reporters on the sidelines of a conference in Chicago on future technologies. "But it's significant opportunity for us and I'm pleased to see that we're making steady progress."

Iran announced plans in January to buy 118 jets worth $27 billion at list prices from Europe's Airbus but has complained about unexpected delays in receiving U.S. licenses, which are needed due to the large number of U.S.-supplied parts.
Boeing has also agreed to provide jets to Iran as it emerges from sanctions.

Frustrated with the delays, an Iranian official told Reuters last month that the Airbus deal could be reduced by six airplanes and the Boeing deal could be clipped by one jet to 108 aircraft instead of 109.

Muilenburg said Boeing is "in the final stages of working through the deal structure with our customers in Iran" while also working through the U.S. government licensing process.

The CEO also said that the company's target to match airplane orders to deliveries this year "versus spreading those orders out over a couple of quarters is not a pressing business issue for us."

(Nick Carey - Reuters / St. Louis Post Dispatch)

Boeing (USAF) KC-46A Pegasus (767-2C) (41274/1066) N464KC

 On Monday October 3, 2016 Boeing KC-46A Pegasus performed 4 ILS missed approaches at Long Beach Airport (LGB/KLGB) to the delight of numerous spectators there to enjoy the show.

(Photos by Michael Carter)   

Hollywood Burbank Airport sees sizable jump in August travelers

Hollywood Burbank Airport officials have been seeing the number of passengers traveling through their terminals slowly exceed projected numbers. However, August performed much better than anyone had predicted — a 7.4% hike from the previous year.

The airfield reported 367,527 passengers in August, which was 25,432 more than in 2015 and 22,011 more than what officials had projected, said Mark Hardyment, the airport's director of governmental and environmental affairs during a meeting of the Burbank-Glendale-Pasadena Airport Authority on Monday.

The biggest contributor to the upward spike in passenger numbers was Southwest Airlines, which reported 271,033 passengers, or about 10.1% more than the previous year. Alaska Airlines also had a positive showing, tallying 43,055 passengers, or a 10% boost over 2015's numbers.

United Airlines had 24,368 passengers fly in August, about a 14.2% increase compared to last year. Delta Air Lines' numbers have continued to increase during the past months, reporting 8,417 passengers in August, which was about an 18.5% jump from the previous year.

American Airlines continues to see its passenger numbers drop, reporting 12,343 passengers in August, a 33.5% decrease from the same time a year ago.

JetBlue Airways remained relatively flat in August, with 8,311 passengers, just 58 people less than the year before.

As passenger numbers were up in August, so were the airport's parking revenues. Mary Tromp, the authority's parking manager, said the airfield generated $1,679,209, a 3.9% increase over the previous year.

The major contributor to the boost in revenue was a 56% increase in transactions at the parking structure, which is attributed to more ride-sharing drivers picking up passengers at that location, Tromp said.

Tromp added that there was a 112% increase in $3 transactions in the parking structure due to ride-sharing drivers having to pay a fee to pick up passengers.

(Anthony Clark Carpio - The Burbank Leader)

Sri Lanka to pay $170 mln to AerCap for A350 cancellation

Sri Lanka will pay $170 million to AerCap Holdings NV, the world's largest independent aircraft leasing company, for cancelling four A350s ordered by the previous government, Finance Minister Ravi Karunanayake said on Tuesday.

The move comes as the government is in the process of finalising a partner to revive the national carrier. It cancelled four of eight A350 aircraft orders with Airbus Group SE.

"The cost will be $170 million for the cancellation and it will be paid for AerCap," the finance minister told Reuters.

Karunanayake later told the parliament that the state-run Sri Lankan Airlines do not require A350s as its longest flight time is around 10 hours.

Government officials have said the remaining four A350s are scheduled to be delivered towards 2020 but the government is yet to take a decision on them.

Since coming to power in January last year, President Maithripala Sirisena's administration has taken several steps to reduce the losses by the national carrier.

The government this week said it has decided to discontinue its budget airlines Mihin Lanka with effect from Oct. 30 as part of the restructure plan, which had posted an accumulated loss of over 17 billion rupees ($115.9 million) as of Jan. 31 since its inception in 2007.

Suren Ratwatte, Sri Lankan Airlines CEO, said the airlines will take over Mihin Air's 11 routes and will operate as a normal airlines instead of a budget airline.

Sri Lankan Airlines, which has taken on lease seven Airbus A330-300s since 2012, has debt of around $3.25 billion.

It posted a group net loss of 16.3 billion rupees ($112.6 million) for the financial year through March 31, narrowing from the 31.4 billion rupees loss of a year earlier, due to lower oil prices. The carrier last posted a profit in 2009, a year after Emirates sold its stake in the venture.

The company has also leased four of its Airbus A330 planes to Pakistan International Airlines Corp after its decision to cancel orders for four Airbus A350 aircraft. ($1 = 146.7000 Sri Lankan rupees)

(Reuters / Business Insider)

Southwest Airlines Pilots Seek Amended Contract

Delta Air Lines pilots last week secured a labor agreement that would increase their pay by 30.2% over four years. In response, pilots at Southwest Airlines have teased the possibility of reopening talks on their contract.

Why change things now? The Dallas Morning News quotes an email to members from Jon Weaks, president of the Southwest Airlines Pilots Association (SWAPA), in which he writes that a revised deal is needed to address "changing industry dynamics" and "the needs of both parties."

As matters stand now, Southwest pilots would see their pay increase by 29.4% over the same period as the Delta deal. The paper also says that SWAPA wants to resolve a question regarding pay rates for flying Boeing's new 737 MAX aircraft, which for now remain unspecified. The tentative deal reached on Aug. 29 tables that concern, for now, but it could resurface if management agrees to reopen talks in the wake of Delta's agreement with its pilots.

So far, the airline has resisted calls to return to the bargaining table. In comments emailed to The Dallas Morning News, a Southwest spokesperson said that pilots would be voting on "the best contract in the industry" during polling set to run from Oct. 8 to Nov. 7. Last month, SWAPA board members voted 21-2 in favor of presenting the deal to members for ratification.

Should Southwest investors be concerned? Not necessarily. Back-and-forth between management and labor is common in the airline industry. Also, the carrier's fundamental metrics are improving at a steady clip. Gross margin hit a new high of 40% over the past 12 months, while returns on capital sit at a very healthy 27.7%, S&P Global Market Intelligence reports. Despite this, at 11.14 times projected earnings, the stock trades about in line with the growth rates Wall Street expects. Premium performance usually demands at least a small premium in terms of valuation.

So long as pilots don't execute a slowdown or a walkout, Southwest stock should eventually find its way to higher altitudes from here.

(Tim Beyers - Investopedia)

Boeing and Airbus must 'beware the Chinese' for manufacturing surprise, analyst warns

 Comac C919 
(Photo: Comac)

China's fledgling commercial aircraft manufacturer may be underestimating how many jets it can make as it moves to compete with Boeing and Airbus Group, an aerospace analyst warned Tuesday.

"Beware the Chinese. Their ability to surprise us will be significant,” said Michel Merluzeau, vice president for aerospace strategy and business development with consulting firm Frost & Sullivan.

Merluzeau delivered that brief word of caution while outlining his global aerospace industry forecast for the next decade at the British-American Business Council annual Aerospace Conference. Hundreds of commercial aircraft industry executives, suppliers, trade officials and technology executives gathered for conference at Seattle's Museum of Flight.

Merluzeau said sales and engineering teams at Commercial Aircraft Corporation of China Ltd. (COMAC) are providing "very prudent" numbers on manufacturing planes to analysts like him.

"Right now, COMAC is saying they will make 50 to 60 aircraft a year," Merluzeau told the audience. "But knowing the Chinese, when they get it right, they could easily double that."

The Chinese airplane manufacturer is working feverishly to automate several parts of its commercial airplane production to make faster production easier, he said.

"The automation in the factory is like nothing I have ever seen," Merluzeau said.

COMAC currently makes a mid-market jet called the C919 with 156 to 186 seats and a range of 4,075 to 5,555 km (about 2,532 to 3,452 miles).

It also makes the ARJ21, a small regional jet with 78 to 90 seats depending on whether it has only economy seats or if it has a dual economy-business class seating configuration.

COMAC has also announced that it also wants to make wide-body, dual-aisle large jets called the C929 and C939.

"Large passenger aircraft is the embodiment of the nation’s industrial and technological standing as well as its comprehensive power," COMAC said on its English-language website.

Chicago-based Boeing has single-aisle 737 and wide-body jet (777-787-747) manufacturing facilities in Renton and Everett in the Puget Sound region. The U.S. jetmaker is working to automate parts of its production line, including automated wing riveting in Renton.

(Andrew McIntosh - Puget Sound Business Journal)

Germany Buys Lockheed C-130 As Airbus A400 Delays Continue

 Germany will buy Lockheed Martin's C-103J amid delays with a competing military transport plane from Airbus.

 (Lockheed Martin Photography by Thinh D. Nguyen)

Germany said Tuesday it will buy four to six Lockheed Martin C-130J transport planes but still plans to plans to follow through with its full purchase of Airbus' delayed A400.

The decision comes after Airbus booked a $1.12 billion charge on its military transport in July over delays caused by an engine component issue, and the European aerospace giant warned that it could take more charges.

German officials said that even with the Lockheed deal, they would still buy 53 Airbus A400Ms.

Lockheed shares fell 1.45% to finish at 237.10 in the stock market today. U.S.-listed shares of Airbus rose 1% to 15.14.

Earlier this year, France agreed to buy the C-130, which is also used by the U.S. and other allies.

(Gillian Rich - Investors Business Daily)

Qatar Airways, Boeing to hold news conference in Washington DC

Gulf carrier Qatar Airways and Boeing will hold a news conference on Friday, a spokeswoman for Qatar Airways told Reuters on Wednesday, as a big sale of Boeing wide-body jetliners looked close to being clinched.

Qatar Airways is in the process of firming up the order, which was delayed by the Qatari government in an effort to speed up U.S. approval of its purchase of Boeing fighter jets, sources familiar with the situation told Reuters.

If the deal is finalized, it would give the Chicago-based plane-maker a substantial sales boost in a year when orders for wide-body planes has slumped.

Last Wednesday, the United States began notifying lawmakers informally that it had approved the sales of 36 Boeing F-15 fighter jets to Qatar, valued at about $4 billion.

Last week people familiar with the situation said Qatar Airways was in the process of firming up an order for Boeing jets, which it was due to have placed at July's FarnborTim Hepherough airshow in Britain.

The deal was delayed by the Qatari government in an effort to speed up U.S. approval for the fighter contract, one of the sources said.

The deal postponed in July was a top-up deal for about five Boeing 777-300ER worth $1.7 billion at list prices, people familiar with the talks said, but the order could expand as the Gulf airline continues to target significant growth despite concerns over the Gulf economy.

Bloomberg last week reported the deal was for at least 30 Boeing 777 and 787 jets, valued at about $6.7 billion at list prices.

The airline is also in talks for about two dozen Boeing 737 MAX jetliners, aviation market sources said.

Boeing and Qatar Airways declined to comment on the details of Friday's planned announcement.

Qatar Airways Chief Executive Officer Akbar Al Baker said in August that the airline planned to make a major aircraft order to enable its network expansion plans.

Separately, Boeing Chief Executive Dennis Muilenburg said the company is making progress on a deal to provide more than 100 commercial airplanes to Iran though none will be delivered in 2016.

(Tim Hepher - Reuters)

Alaska Airlines rival JetBlue is making 'generous' offers to poach Virgin America flyers

Alaska Air Group has a hard fight ahead with rival JetBlue Airways Corp., which is making moves to poach Virgin America customers ahead of the California airline's purchase by Alaska.

Even before Alaska Airlines' $2.6 billion takeover of Virgin is approved by the Department of Justice, New York-based JetBlue is actively luring Virgin America business travelers with generous matching mileage points offers, said Steve Danishek, president of business travel agency TMA Travel in Seattle.

"JetBlue has a pile of cash and it's going to be a problem," Danishek said. "JetBlue has a better business class so they (Alaska) have to be ready."

Danishek said coveted business travelers are watching the takeover closely, especially how Seattle-based Alaska will integrate Burlingame, California-based Virgin America's Elevate frequent flyer program with its own Alaska Airlines Mileage Plan.

"The most important thing for the business traveler is that your status is protected. Technically, they should be able to come across mile for mile, but reward redemption levels are the key factor," Danishek said.

On that subject, though, Alaska has been silent. Virgin America told customers that program combinations will be "equitably mapped over," but offers no details on how redemptions will work.

Alaska Airlines acknowledged "a lot of interest" in how the mileage and rewards plans will be integrated, but declined to discuss specifics.

"We will have more to share on this topic after we receive DOJ approval and then close the transaction," Alaska spokeswoman Bobbie Egan said.

JetBlue, which was among airlines interested in acquiring Virgin America but lost a bidding war with Alaska, declined to comment for this story. But the airline is already offering to take Virgin America Elevate mileage points and exchange them for newly minted JetBlue mileage.

Alaska "will have to put a plug that hole," Danishek said. "They'll have to offer double and triple miles and lower redemption levels to ensure these flyers stay on Virgin America."

Virgin is trying to reassure customers, telling them they will continue to accrue Elevate points and eventually be able to use their status and points to access to Alaska's larger flight network, which includes 114 destinations across North America.

JetBlue also has unveiled new transcontinental routes between Los Angeles and Orlando and new flights from Long Beach to compete with Virgin America in the lucrative California market. Most of Virgin's flights operate from Los Angeles and San Francisco, and the airline says its success depends on those markets.

In July, JetBlue announced that it was moving to "organically strengthen" its presence on a national scale," calling it a post-Alaska takeover of Virgin response to help West Coast travelers facing "reduced options and less competition."

(Andrew McIntosh - Puget Sound Business Journal)

Crystal Cruises reveals futuristic design for new luxury jet

The plane's interior includes 84 lie-flat seats 

  (Crystal Cruises)

 (Crystal Cruises) 

Having expanded its fleet of large and luxurious ocean-going vessels to include a small-capacity seafaring yacht in December, and then taking to the skies this spring with the launch of an on-demand 12-seat private jet, Crystal Cruises made even bigger news Tuesday, when it revealed the interiors of its new 84-seat 777-200 plane.

The jumbo jet will begin carrying high-flying guests on 14-, 21- and 28-day round-the-world itineraries this time next year.

Akin to the trips on refit 757 planes run by Abercrombie & Kent and, a more recent arrival in this space, Four Seasons Hotels, Crystal AirCruises aims to take the experience to a higher level. The company wholly owns its plane, in contrast to other companies who lease or work with an operating partner, and its wide-body jet allows it not only to fit about 30 more people in an all lie-flat seating cabin, but also to provide a separate bar, dining, and lounge area, as well as a 150-bottle wine cellar, all decked out in subtle platinum, gray, and sea foam hues.

The larger plane means that Crystal won’t be able to land on some shorter runways that a 757 could, but the company plans to use smaller chartered aircraft—including its own—to take guests to the most remote of small airports as needed in places such as the African bush and Easter Island. There are also iPads, Bose headsets, and 24-inch flatscreen TVs at every seat.

The 777—which could otherwise seat more than 300 passengers in its most generous configuration, as opposed to the fewer than 90 here—will have a range of up to 23 hours of flying time, during which passengers will be waited on by a dozen butlers from Crystal’s ships, all of them trained in aircraft-safety to become certified flight attendants. Crystal’s corporate chef is overseeing the food, which Crystal CEO Edie Rodriguez wants to be Michelin-level.

Destinations will be announced next month when sales start, but Crystal has already revealed that the trips will include between 12 and 15 stops in the 28-day itineraries and will see guests staying not only in hotels but more exclusive accommodations: “Things you can’t get into,” as Rodriguez describes them, “castle stays not usually open to the public, a museum you tour at night with its director.”

As for the appeal of traveling en (semi) masse aboard a private jet, Rodriguez says that though many of Crystal’s guests own their own yacht or aircraft, “they're coming to us because they want their hand held, and they want to travel with like-minded people."

Crystal’s rapid broadening of its travel purview over the last year has been thanks in large part to its new ownership by the Chinese hospitality holding company Genting Hong Kong. “They're very generous,” Rodriguez says of her bosses. “As long as I continue to be fiscally responsible, they will continue to indulge."

Making sure this new jet provides significant return on investment. To that end, Rodriguez says the cost of these trips will be “competitively priced but probably a little bit higher than our quote unquote competition." Given that the rates for A&K and Four Seasons private jet trips can soar to more than $100,000 per person, those will be some stratospheric numbers, indeed.

(Andrew Sessa - Conde Nast Travler)

Boeing and Pakistan International Airlines reportedly have a deal for eight 787 Dreamliners

Boeing is close to selling eight Dreamliner 787s to Pakistan International Airways (PIA) after a high-level lobbying and sales campaign by Boeing Commercial Airplanes President and CEO Ray Conner.

Boeing could begin delivering the wide-body jets in mid-2017, according to media and social media reports in Pakistan.

Azam Sehgal, the chairman of Pakistan International Airlines, let word of the deal slip during an interview with Tahir Imran, an Urdu-language aviation journalist in Islamabad who contributes to the British Broadcasting Corp.'s Urdu-language news service.

In a recent tweet, Imran said: "Breaking: PIA to get 8 @Boeing 787 Dreamliners with deliveries due from mid next year. The chairman just told me exclusively."
Worth at least $1.8 billion at list prices, the new aircraft order would help the airline double its fleet and launch direct service to John F. Kennedy International Airport in New York, Imran later reported

Marc Birtel, an international spokesman for Boeing Commercial Airplanes in Seattle, declined to confirm or deny the Pakistan reports.

"Boeing does not comment publicly on customer discussions," Birtel said.

PIA also asked Boeing if the Dreamliner could fly the distance between Lahore/Karachi and Toronto, Canada's largest city and home to a large and affluent Pakistani community. Boeing confirmed the Dreamliner's fuel-efficient features could make that direct flight possible, the Pakistani media reports said.

News of a Boeing Dreamliner purchase by PIA comes after the airline recently announced plans to retire five older Airbus A310 aircraft following this year's Haaj pilgrimage to Mecca season.

Also in mid-August, PIA launched a new specially branded premium flying service between Lahore, Pakistan, and London. Business class travelers get limousine service in London for destinations within 25 miles from the airport as part of that service.

The Pakistan International Airlines deal comes two months after Conner privately wrote to Pakistan Prime Minister Muhammad Nawaz Sharif offering to exchange PIA's 2012 order for five 777-300ER jets for Dreamliners in a deal that "could help Pakistan's national airline 'restore' its brand and 'improve its attractiveness for privatization.'"

Conner's letter was leaked on a social media site in Pakistan and a copy was published by The Puget Sound Business Journal.

"Over the past three months, we have worked extensively with PIA to document the business case for the Boeing 787 Dreamliner, and we are convinced that the 787 can dramatically transform PIA's operations and help it restore profitability," Conner wrote to the Pakistani politician.

"Moreover, this solution also satisfies the interests of strategic investors, who will want to see a realistic, executable turnaround plan," Conner added in is letter to Sharif.
 

(Andrew Mcintosh - Puget Sound Business Journal)

Gulfstream calls time on struggling G150

Gulfstream has called time on the G150 business jet, due to struggling sales of its midsize offering.

In a statement issued on 28 September, the US airframer says it has sold the final unit, which will be delivered to its owner in mid-2017.

Gulfstream president Mark Burns says: “The G150 has had a distinguished history, spanning more than a decade, and it remains an important part of our business.” The latter reference concerns the company’s after-sales support venture, which will maintain the 120-strong global fleet of the type

The 10-seat twinjet entered service in August 2006 as a replacement for the G100; formerly the Israel Aerospace Industries (IAI) Astra SPX. The programme was acquired by Gulfstream in 2001 as part of its acquisition of Galaxy Aerospace, which owned the type certificate.

IAI has continued to build the G150 at its factory in Tel Aviv and ship the aircraft to Gulfstream’s Dallas, Texas facility for completion.

The G150 has been hit by lacklustre sales and increased competition in the midsize sector from a flurry of upgraded and new-generation business jets, notably the Cessna Citation Sovereign+, X+ and Latitude and Embraer’s Legacy 500.

Flight Fleets Analyzer records annual deliveries of five G150s in 2014 and 2015; significantly down on its 2008 peak of 30 units.

Gulfstream now has its sights on the top half of the business jet market with the super-midsize G280, also built by IAI, now the airframer’s entry-level product.

“Our long-range plan calls for a focus on the super-midsize and large-cabin markets,” Burns says. “We have an excellent mid-cabin offering in the G280. Since it entered service in late 2012, we have delivered nearly 100 of those aircraft, demonstrating the appeal of incorporating large-cabin-type capabilities into a super-midsize aircraft.”

Gulfstream now boasts seven models in its high-end line-up. These also include the in-development G500 and G600 large-cabin, long-range business jets – which are scheduled for service entry in 2018 and 2019, respectively – and the ultra-long-range G650ER.

(Kate Sarsfield - FlightGlobal News)

Will the Airbus Restructuring Force Big Changes at Boeing?

Airbus confirmed over the weekend the reports on Friday that the company was merging its commercial aircraft division’s headquarters with the group’s headquarters. An unspecified amount of cost savings is expected as the move will result in those famous synergies that typically involve firing people.

Should Boeing be worried? On the face of it, there appears to be little new threat from a management reshuffle at Airbus, but if the changes at the top are only the beginning, Boeing might want to begin doing some hard strategic thinking.

Both companies have suffered from a slowdown in new orders since the end of 2014. That is not going to improve anytime soon, but both companies also have years-long backlogs to help tide them over. Other things being equal, Airbus should perform better than Boeing through this period.

All things, however, are not equal. Airbus faces a decision on whether to put new engines on its super-jumbo A380. In fact it has faced this decision for a couple of years now, and it has stalled because it has just one customer (Emirates Airlines). Production of Boeing’s 747 is slowing down and the iconic airplane may disappear from the company’s price list in the next year or so. The market for jets of this size, never very large, continues shrinking.

The other bits of bad news for Airbus are the massive cost overruns on its A400M military transport and the delays in delivering the A350 passenger jet. Airbus wrote off a combined €1.4 billion in the second quarter for these programs. Neither problem is entirely solved, nor is the reworking of the Pratt & Whitney engine that powers the company’s A320neo single-aisle competitor to Boeing’s 737. These, however, look to be bumps in the road rather than life-threatening cliffs.

Boeing’s problems are different and, by some accounts, worse. In addition to slowing sales, the company is having serious trouble getting new orders for its twin-engine, dual-aisle 777 to keep the production line going until the new 777X is ready for deliveries in 2019. The new 737 MAX airplanes will begin deliveries next year, but Boeing was slow coming up with the design for this competitor to the A320neo and that cost the company orders.

Over at Leeham News, Scott Hamilton cites a research report on Boeing and Airbus released last Friday by analysts at Goldman Sachs, a consistent Boeing bear. Goldman rates Airbus a Buy and Boeing a Sell:

In our view, today is a rare time where one [company]’s product set (Airbus) is meaningfully stronger that the other’s (Boeing.) We think significant market share shifts could occur, without a pricing response from Boeing. And we think Boeing may need to invest significantly in multiple new aircraft, over time.

We wrote last week that Boeing is considering developing two new aircraft: one, a stretched version of the 737 MAX 9 to carry an additional 12 to 18 passengers; and the other a clean-sheet replacement for 757 and 767 known variously as the middle-of-the-market or new mid-size aircraft. Goldman Sachs believes that the Airbus A321neo and A330neo cover that market adequately and will be available before any new design from Boeing is ready for delivery.

One last note from Goldman: the analysts predict that free cash flow could quadruple at Airbus and decline by 30% at Boeing due to the availability of the A321neo over a still nonexistent variant from Boeing. Because Boeing argued that cash flow is the most meaningful metric of the company’s performance, any decline is seriously bad news for Boeing.

The restructuring Airbus has announced is nothing more than a cost-saving measure intended to improve profitability. If one believes the Goldman analysis, simplifying management just adds to the company’s already commanding lead in products. It’s a relatively easy fix that can produce results fairly quickly.

Boeing has tried to lower its costs as well, but mainly by putting the squeeze on suppliers. This is more difficult to achieve than firing some middle managers. Even if Boeing were to follow Airbus’s lead, the impact would be relatively small.

Boeing’s choices are more expensive and have larger implications. Can it squeeze enough cost out of it's suppliers? Can it afford to develop two new planes? Can it complete the programs in time to be competitive with Airbus? Stay tuned.

(Paul Ausick - 24/7 Wall St.)

China's Xiamen Airlines makes first US touchdown, with hopes for many more

Xiamen Airlines' first flight to the United States is welcomed at Seattle-Tacoma International Airport with a traditional water cannon salute.

(Port of Seattle)

When Chinese president Xi Jinping visited the U.S. last September, his first stop was a Boeing factory north of Seattle, where he toured a 787-8 Dreamliner being delivered to Xiamen Airlines.

 A subsidiary of state-backed China Southern Airlines, Xiamen Airlines is currently among China's largest carriers, a member of the SkyTeam airline alliance with more than 140 Boeing aircraft (and 30 more on order) — and China's only airline with an all-Boeing fleet.

Few U.S. travelers have heard of Xiamen Airlines but the carrier is determined to change that. Last Monday, Xiamen inaugurated its first direct U.S. route between Seattle and Shenzhen, one of China's largest and wealthiest cities.

"Shenzhen is known as the 'Silicon Valley' of China, and this new destination will be a tremendous opportunity for both business and leisure travelers to experience our shared values, Port of Seattle Commissioner Fred Felleman told CNBC at a ceremony at Seattle-Tacoma International Airport welcoming the first Xiamen flight.

He added Xiamen's arrival would be an added boost to the region's status as "a business and tourism hub."

Xiamen is making its move at a time when tourism and business traffic between the U.S. and China is growing quickly. In a recent study, Boyd Group International predicted that annual U.S. arrivals from China will more than double, going from 2.4 million in 2015 to over 6.5 million in 2020. "Over that period of time, more than 23 million Chinese will visit the US," the report added.

Located adjacent to Hong Kong, Shenzhen — with a population of 10 million — was China's first special economic zone. It is now a major tourism and technology hub that's home to telecommunications equipment manufacturer Huawei, internet giant Tencent Holdings and other companies that do business in the Pacific Northwest.

And the race is on to be the airline of choice for business and leisure travelers.

Before Xiamen's new Shenzhen service, flights from Seattle to cities in China (including Beijing, Hong Kong and Shanghai) were limited to carriers like Delta Air Lines or China's Hainan Airlines — even though a wide variety of U.S. and Chinese carriers fly between both countries.

However, Xiamen's Seattle-Shenzhen new route stands out, in part because it links two high-tech cities for the first time, Kazue Ishiwata, airline service development director for Seattle-Tacoma International Airport, told CNBC recently.

"Xiamen is not the biggest airline in China. There's Air China, China Eastern, China Southern and Hainan already in Los Angeles, San Francisco and other cities," Ishiwata said. "So it benefits a new entry carrier to begin service in a city where there aren't other airlines to compete with on the route."

The new route between Seattle and Shenzhen will operate three times a week with a Boeing 787-8 Dreamliner configured with four first class seats, 28 business class seats and 236 economy class seats, that will offer complimentary Wi-Fi for first and business class customers.

Xiamen Airlines isn't stopping with Seattle. The airline's inaugural North American flight took place in July, between Vancouver and Xiamen, and long-haul service between JFK International Airport and Fuzhou (FOC) is scheduled to begin February 15, 2017.

Another Xiamen Airlines route, between Los Angeles and Xiamen, is set to begin sometime in mid-2017. It's part of the strategy that the airline hopes will help it overcome a significant competitive advantage in the fast-paced travel market in the world's largest economy.

"The airline has some challenges," said Mike Waddle of AviationPros, a general service agent supporting various airlines in the U.S. market.

"Even though they're a very familiar brand in China and throughout Asia, they need to get name recognition for the brand in the United States and North America," said Waddle. That said, "the routing for this first U.S. flight is unique and it seems like a good marriage between two high-tech cities."

(Harriet Baskas - CNBC)