Drunk passenger gets dumped

Reuters -- A drunken passenger on a leisure flight from the UK to Spain was dropped at a tiny island off the African coast after he swore at the cabin crew, a newspaper reported on Friday. The plane's captain decided to leave the man at Porto Santo, a volcanic outcrop in the Atlantic, after he became abusive when he was refused more alcohol, the Daily Mail said. The plane, heading from northern England to the Spanish tourist island of Tenerife, diverted to the Portuguese island, which is just 10 miles long and four miles wide. Police met the man at the airport. He is due to appear in court in mainland Portugal in January, the newspaper said. The island's airport is a legacy of the Cold War when NATO considered making Porto Santo a frontline base to guard Europe's southern approaches. With only half a dozen hotels and a few sandy beaches, Porto Santo is little known to most tourists who flock to the nearby, larger island of Madeira, a two hour ferry ride away. ------- This fellow is very lucky he was among Brits. In the US, we don't think he would have been allowed to walk off the plane. All the same, they nailed him.

Dumbest airline strike - ever?

AP -- Mechanics at Northwest Airlines Corp. voted to remain on strike Friday, a move that will have little impact on the bankrupt airline’s operations. Leaders of the Aircraft Mechanics Fraternal Association lobbied against the company’s latest offer, which would not have brought back any of the 4,400 union members who went on strike Aug. 20. Of the 2,223 votes cast, 1,258, or 56 percent, of union members rejected the offer while 965, or 43 percent, voted in favor, according to a news release from the union. --------- They have lost their jobs - now we can say with some certainty that they have also lost their minds. The stikers lost big time. What was the point of this vote? Those who want to get a job at the airline must now cross the picket line if they have to. Since there are 965 people who are willing to accept the offer, what few jobs are open will have lots of takers. The airline remains in the drivers seat. What a waste this all seems to have been.

Bangkok buying six Airbus 350

Speednews reports Bangkok Airways announced plan to order six A350s for delivery from 2012. It has not selected an engine. ---------- Another win for the 350 - but again not a tier 1 airline. But certainly a nice way to close the year.

DBA Expects 2005 Passenger Count to Rise 37%

Bloomberg -- DBA, Germany's third-largest airline, expects 2005 passenger numbers at its main base in Munich to rise 37 percent after the carrier took over a competitor's routes and offered tickets through Aldi Group supermarkets. The number of people flying with DBA through Munich, Germany's third-biggest city, will rise to 2.21 million travelers in the year through Dec. 31 from 1.61 million travelers in 2004, the airline said in an e-mailed statement today. DBA reiterated a forecast that passenger numbers on its 29-destination Europewide network in the year ending March 2006 will rise about 43 percent. DBA, the former German unit of British Airways Plc, postponed plans for an initial share sale after Heinrich Bischoff, owner of competitor Germania Fluggesellschaft mbH, bought a 64 percent stake in DBA, which received control of most planes and routes of Germania's Gexx low-fare division. DBA, which British Airways sold to a German aviation consultant for a symbolic 1 euro in 2003, posted its first profit in fiscal 2004. ``We want to build up our strong position in coming years as Munich's biggest low-cost airline,'' Chief Executive Officer Martin Gauss said in the statement. The carrier sold 565,000 one-way flights for 49.99 euros each at Aldi Sued supermarkets, the southern-German chain of the country's biggest discount food retailer, in late July. --------- We bet BA thinks this investment was stolen from them now. Very creative to use supermarkets as a distribution channel. Anyone in the US paying attention to this? How about using Walmart as a distribution channel? Probably cheaper than a GDS and probably reach more people too!

Flour in condoms confuse TSA

Philadelphia Inquirer - She was a freshman on an academic scholarship at Bryn Mawr College, preparing to fly home to California for Christmas, sleep-deprived, with questions from a calculus exam still racing through her head. In the space of a few hours on Dec. 21, 2003, Janet Lee landed in a Philadelphia jail cell, where she would remain for three weeks, held on $500,000 bail and facing 20 years in prison on drug charges. All over flour found in her luggage. "I haven't let myself be angry about what happened, because it would tear me apart," Lee said. "I'm not sure I can bear to face it... . I'm amazed at how naive I was." That naivete, she said, began when screeners at Philadelphia International Airport inspecting her checked luggage found three condoms filled with white powder. Lee laughed and told city police they were filled with flour. It was just part of a phallic gag at a women's college, she told them, a stress-reliever, something to squeeze while studying for exams. The police didn't find it funny. They told her a field test showed that the powder contained opium and cocaine. A lab test later proved the substance was flour - and no one now disputes that Lee is innocent, including the prosecutor. ----------- Who is dumber? Imagine if this was in Singapore, she might be hanged by now.

New Israeli/Russian Airport Security Lie Detector

REUTERS -- A woman undergoes testing by the GK-1 lie detector, a prototype of which is in use at a Russian airport, in this handout picture released November 17, 2005 by Nemesysco. A new walk-through airport lie detector made in Israel may prove to be the toughest challenge yet for potential hijackers or drugs smugglers. Picture taken November 17, 2005. -------- Imagine how long each "interview" takes! If you have flown through Ben Gurion you know what this feels like. Oh no....

More evidence 2006 might be better for airlines

Bloomberg -- The number of passengers using European carriers rose 7.3 percent this year through Dec. 18. Average seat occupancy for the 30 members of the Brussels-based Association of European Airlines reached a record 76 percent in the first 11 months of 2005. European airlines will report total earnings next year of about $2 billion, or almost five times the level of 2004, said David Henderson, an AEA spokesman. Air France, Lufthansa and British Airways Plc, Europe's three biggest carriers, have increased yields, a measure of average ticket prices, and covered higher fuel costs with surcharges and futures contracts. ``The super strong revenue momentum shows no signs of slowing,'' said Hugo Scott-Gall and Christopher Logan, airline industry analysts for Goldman Sachs Group Inc., in a Dec. 21 report for investors. ``Business-class demand is back to pre-9/11 levels in some markets and forward bookings look rosy.'' ``There's only three ways for airlines to improve,'' the AEA's Henderson said. ``Improve load factor, increase yield or reduce costs.'' Prospects for higher profit rely on oil prices remaining fairly stable, said Geoff van Klaveren of Exane BNP Paribas in London. Every $1 added to oil prices increases the industry's fuel bill by $1 billion, according to the International Air Transport Association. The price of Brent crude oil will average $53 a barrel in 2006, about $2 less than in 2005, IATA Chief Economist Brian Pearce said at a Dec. 14 briefing. Brent futures peaked at $67.72 a barrel on Sept. 1. Air France Chief Executive Officer Jean-Cyril Spinetta said on Nov. 23 that earnings before interest and tax will rise 50 percent in the fiscal year ending March 31. The airline is outperforming rivals by attracting passengers from across Europe to its bases at Paris Charles de Gaulle and Amsterdam's Schiphol airports for international flights, he said. Lufthansa expects to more than double operating profit to 1 billion euros ($1.81 billion) ``as soon as possible'' as it cuts costs and uses promotions to fill short-haul flights, Chief Executive Officer Wolfgang Mayrhuber wrote in the company's staff magazine on Dec. 16. ------------ This sounds positive. No wonder Airbus and Boeing are casting their eyes in the direction of these three for orders. However, among US carriers the picture is not as positive yet.

BA 747 craziness again

Remember earlier this year there was a story about a BA 747 from LAX to London that flew low and slow when it had an engine out? The pilot did not land, rather he chose to fly to the UK. Here's another gem. BBC -- A British Airways 747, flying from New York's JFK airport to Heathrow, London, diverted to Cardiff at about 1230 GMT and made an emergency landing. A Cardiff airport spokesman said fire crews were on standby but the plane landed safely. The cause of the problem in the cockpit is being investigated. There were 17 crew members aboard the plane but just two passengers. It was the second incident involving the plane in 24 hours. Earlier, the aircraft had suffered a bird strike as it flew into New York. This led to a six-hour delay for the plane at JFK airport. Nearly all the passengers were put on other flights, leaving just two on board the jumbo jet when it was involved in the incident as it headed to the UK. "The incident was dealt with by on-site engineers who discovered no fire and the passengers were sent onward to their final destinations by taxi."

$5bn Showdown

BusinessWeek online -- The new year promises a $5 billion showdown between airlines and the companies that process reservations. Known as global distribution service (GDS) companies, they include Sabre Holdings (TSG), Cendant's (CD) Galileo unit, and privately held Worldspan. These outfits charge airlines $12 to $13 per round-trip to crunch fare schedules and let travel agents connect with airline reservation systems to make bookings. GDS costs are 2.5% of some airlines' revenue -- about $160 million a year for Continental and $500 million a year for American. "It's in the top five costs," says David Cush, American vice-president for distribution. "Fuel is No. 1, then labor, then airplane ownership, and then distribution." But major airlines' contracts with the GDS companies will run out by midyear -- and airlines want to cut their GDS costs by 50%. To get big rate cuts, they're threatening to walk away from some GDS companies completely -- or to withhold information on their best fares or schedules if others won't slash their fees. "It's going to be a three-way shootout between the airlines, the GDS [companies], and the online travel agents," Forrester Research analyst Henry Harteveldt says. . "The cost of providing our services isn't going to go down," says Jack O'Neill, chief operating officer of Carlson Wagonlit Travel. One of the carriers' major beefs is that GDS companies charge the same rate regardless of ticket price. "I don't have any problem paying $12 to sell a $1,000 ticket -- it's the $79 ticket [that's a problem]," says Dave Slater, managing director of e-commerce for Continental. In 2004, the government deregulated the GDS business, and in so doing gave airlines more flexibility to share special fares with their favorite partners. One possible model for a truce is Sabre's October deal with AirTran Holdings (AAI). Sabre cut GDS fees, and AirTran gave Travelocity discounted package tickets -- and stopped selling through Worldspan. Under this agreement, Sabre actually makes more from AirTran than before, both companies say, though a source near the talks says AirTran pays Sabre just $5.50 per round-trip. "It's because of increased volume and the limited participation of other GDS [companies]," AirTran VP Kevin Healy says. Meanwhile, technology has slashed the cost of alternatives. If a customer books a ticket directly on the airline's site and not that of a travel agent, the transaction can cost the carrier as little as $3. Startups ITA Software and G2 Switchworks have also invented low-cost GDS substitutes that let agents process reservations for $3 or less by using open-source software and skipping extra services GDS companies offer. JetBlue bypasses GDS companies and travel agents entirely in favor of selling more cheaply through its Web site and by phone. Southwest offers some seats through Sabre at a special discounted rate, but it sells most tickets directly, thus avoiding GDS fees. ---------- We have been following this story for a while over the year. Distribution is a cost airlines wanted to tackle for years. Like airport fees, GDS fees seem to go only up. Being technology oriented, you would think GDS' could cut their fees - but no. So you see that airports are revenue positive and GDS actually make profits - while airlines bleed. Somthing has to give. The LCCs have showed that they can seel directly just fine and operate outside the GDS world. Meta search services like SideStep show airlines might not need as much access to a GDS. As consumers learn that buying a ticket online is cheaper, faster and more efficient, meta search is a natural next step in optimising their deal. If you hav not yet tried one of the meta search sites, run a ticket price on a city pair you fly and see how neat they are. These tools scour the web for deals. The GDS model is strong when using travel agents - and as more business goes online, travel agents have become more specialized, charging legitimate fees for their special knowledge. But their world is shrinking because technology keeps breaking down the special knowledge barriers. That said, just as in the the investing world, there is room for a full service broker and online discounters. You use whichever is better for you. Bottom line - airlines have options that GDS don't. Star Alliance has already made it clear they are going with new players in the GDS world. Its time for GDS companies to drive down their own costs as hard as every other business in the travel space. Not doing so will start to shrink their world too. Already airline web sites are often the cheapest places to find a ticket and airlines have huge brand loyalty. Consumers want efficiently priced (read cheap) tickets and are agnostic as to how they get these tickets. Who cares if the ticket was handled by Worldspan? Consumers think of Expedia where they bought the ticket. GDS firms have little brand identity - if Travelocity were to become Sabre in the eyes of consumers then maybe they could drive their own brand and create their own loyal following. Meantime, airlines are likely to play the renewal game harder in 2007 and probably will renew for shorter periods because technology options are now working for them and against the GDS'.

Flyi shutting down?

USAToday (Ben Mutzabaugh) -- The company sent out furlough notices Monday telling employees that the carrier will “permanently cease all operations and separate all employees at all locations sometime during the period January 7-21, 2006,” if the company is “unable to secure significant external investment or a sale of all or substantially all of its operations” by Jan. 7. Letters sent to both flight attendants and pilots informed them that they are scheduled to be furloughed “effective Jan. 7,” though the letter states I-Air “retains the right to amend or rescind this notice of furlough.” However, I-Air spokesman Rick DeLisi tells me that "nothing has changed in any way" and says "the company is continuing to explore all available options, and anything could happen on any day" -- including an investment deal that could keep the company operating. He says the furlough notices sent to unionized employees contain the exact same information that was sent to other I-Air employees when the company filed for Chapter 11 bankruptcy in November, and he adds that the carrier plans to operate as scheduled. As for the furlough notices, a copy of one of the letters was posted on the Web. The subject was also a popular topic on the forums at Airliners.net. For customers holding tickets on Independence Air, the letter would seem to indicate that the carrier plans on flying through Jan. 6. After that, things appear uncertain. More news is likely this week. Stay tuned…

Flight International - World Airliner Census

Recommended download using this URL: http://www.flightinternational.com/assets/getasset.aspx?itemid=9647

Kofi wants your money

Reuters -- UN Secretary-General Kofi Annan urged governments to follow France's lead after its parliament approved a tax on airline tickets to finance development aid for poor countries. "The secretary-general warmly welcomes the adoption by the parliament of France of a levy on airline tickets issued locally that will benefit the health sector of developing countries," UN spokeswoman Marie Okabe said. Parliamentary approval of the tax came on December 22. It will range from EUR1 to EUR40 (USD$1.18 to USD$47.20) on flights from France, depending on distance traveled and class of ticket. It takes effect on July 1. French President Jacques Chirac has campaigned hard for an international tax on airline tickets to help fight global poverty. The government hopes that in France alone, the tax will generate EUR210 million (USD$248 million) a year. French Foreign Minister Philippe Douste-Blazy has said more than 66 countries support France's campaign. Chilean President Ricardo Lagos said in September the measure had been approved in his country and would go into effect on January 1, when a USD$2 charge would be added to tickets on all outgoing flights from Chile. But the plan has encountered resistance in the United States, failed to win widespread backing in Europe and upset airlines, which fear higher fares will drive away passengers. -------- This is, of course, of great comfort. Helping the poor is a good thing. Having the UN involved is never a good thing because they don't know how to take care of money - that’s for sure. Readers will know how we feel abut the Chirac-tax - its dumb. Good for the US and other countries that rejected this idea. The world has been handing out aid to Africa for a long time with no apparent success. Leave the Africans to help themselves instead of creating a dependent culture. Once they discover democracy and capitalism as the fastest way to a better life, they won't need aid. A French-inspired tax is of no help to them achieving societal change. If ex-communist countries can do it Eastern Europe, and even China can do it, then so can poor countries everywhere. The alternative is to look at Cuba as a model, a potentially self sufficient nation, now reduced to dependence on Hugo Chavez. How embarrassing for the Cuban people.

How you're going to fly after 2008

As the year draws to a close, you might want to think what these mega-orders from airlines mean to you - the unfortunate one who will eventually pay for these shiny new planes. First, even though Airbus has started flying its 380 and Boeing is going ahead with a newer version of its 747, for most people this is not how you will be flying at the end of the decade. This is good news, seriously. The 787 sales campaigns have shown that, without doubt, airlines have bought into the point-to-point markets. Connecting secondary cities is where the action is going to be. This means that for most of us who don't live (survive?) in large cities; there is a good chance we have a non-stop international flight in our future. This means, for example, you might be able to fly Dallas-Sydney without a stop. Avoiding a hub is worth at least two hours outbound and another two hours inbound. Seriously, how much extra would pay to avoid even 30 extra minutes in airport? Four hours saved is worth at least $50/hour - a non-stop flight between Portland and the UK is worth up to $200 more. There are attractive city-pairs all over North America - look where 777s are flying now as a guide. Middle East and Asian flights from just about any larger US city. Same with European cities - origin cities will include communities on the cusp of international service like San Diego, Phoenix, Portland and Salt Lake City. Axiomatically you can expect to see declines in connecting flights through hubs like DFW, Atlanta, Chicago and Newark. While the latter two have good sized origin traffic by being or located near big cities the same cannot be said of, say, Atlanta. Notice that JFK’s biggest airline today is jetBlue – not overseas focused airlines. Connecting international flights from further west are not as big a business as they were; Cincinnati, Chicago, Atlanta and DFW have captured this traffic. The 787 will make these and other cities even less dependent on connections. We already see the power of point-to-point service in the US as executed by Southwest and jetBlue. This is going to occur more going forward and change will impact hub-sensitive airlines. But as we can see at United, with its greedy managers, legacy carriers may face other challenges as well. One has to wonder what might happen at Delta as it tries to emerge from Chapter 11, as its pilots have "unfinished" business with management. Northwest also has unsettled labor relations. So the future of US commercial aviation remains murky - it is clear there is too much capacity. GE will keep the carriers flying if the banks don't. We expect to see fewer airlines flying and perhaps less planes, too. Hopefully the older, noisy, gas guzzlers will be parked. Expect to see more E-190s, like jetBlue flies, all over the US. Small, efficient planes are going to change things on short hauls as well. Watch for the VLJs – very light jets or air taxis - to inflict more undesired changes as well. The big airlines hate the idea of these little planes buzzing in and out of "their" airports using “their” slots. No problem really as these small jets can fly from smaller runways - these planes could have a really nice impact from the business travelers who get shafted on price now. Which is another reason big airlines don't like VLJs. Imagine how well VLJs might do out of LGA? As a consumer, where do you go with your shrinking wallet? We recommend that (if you can) sign up with American Express for their Platinum Card. This gets you into clubs at Continental, Delta and Northwest. Other cards also offer these types of benefits. Don't focus too much on miles; the miles you have are nearly impossible to cash in. Focus rather on what you can get out the airlines now. If it’s a cheap seat, take it. Loyalty is not what it used to be because it is not rewarded with real “value”.

Know an unemployed pilot?

NNI -- The resignation of nine pilots from China Eastern Airlines has thrown China's airline industry into turbulence. Ostensibly, the pilots quit because of dissatisfaction with their treatment and concerns about airplane safety. But amid the worsening shortage of pilots in China's rapidly growing airline industry, there is strong speculation that the pilots were hired away by another airline. Securing enough pilots has become a headache for all of the companies. According to local newspapers, the nine pilots were from the Jiangsu branch of China Eastern Airlines. In August, the pilots requested a dialog with company executives to discuss their treatment and safety issues. But the environment did not improve after the talks and they resorted to work strikes on two occasions. The airline considered the strikes a violation of labor laws and suspended the pilots. The pilots countered by submitting their resignations. China's airlines have been aggressively introducing planes from Airbus SAS and Boeing Co. and increasing their numbers of flights. But the training of pilots has not kept pace with the speed of expansion. Estimates now put the shortage at 400 pilots a year. Behind the shortage is the entrance of a succession of new airlines since the start of the year. Five new private carriers have been authorized by the Civil Aviation Administration of China (CAAC) and three have already begun flights. To crew their planes, the new carriers have been luring staff away from the other airlines. The story making the rounds is that the nine pilots resigned from China Eastern Airlines to work for better pay elsewhere. It would not be the first time: last year, the industry's feathers were ruffled when 14 pilots from China Xinhua Airlines, an affiliate of Hainan Airlines, moved to work for Okay Airways. Believing that this practice endangers safety, the CAAC in May said that an airline that hires a pilot away should pay reparations of 700,000 to 2.1 million yuan ($86,700 to $260,130). In China, it takes 10 years and 3 million yuan to train a pilot. For that reason alone, the airlines are bound to start making far greater efforts to keep their pilots. -------- After the same problem hit in India, unemployed pilots now have options in two markets. The growth in Asia is fantastic and clearly offers people with a clean commercial license a future. These two nations cannot train enough internally to meet their fleet growth plans so foreign pilots are required to fill the gaps. ----- 14:57 rejoinder - this story has generated 25% of all our traffic today so far. There must be a lot of pilots looking for the next gig.

Aeroflot buying 787s?

Reuters -- Flagship Russian carrier Aeroflot, which tendered for long-haul aircraft in July, wants to buy 22 Boeing planes worth more than $2.5 billion, business dailies Kommersant and Vedomosti reported on Tuesday. Flagship Russian carrier Aeroflot (AFLT.RTS), which tendered for long-haul aircraft in July, wants to buy 22 Boeing (NYSE:BA - news) planes worth more than $2.5 billion, business dailies Kommersant and Vedomosti reported on Tuesday. --------- This order has been generally accepted as going in favor of Airbus. Airbus has been bringing Russians into its fold with narrow body orders as well as investin in Russian aerospace ventures. If this order is indeed formalized, it will be a heavy blow to Airbus' 350 campaign. Note that, so far, not one Tier 1 airline has ordered the 350. We expect Airbus to react vigorously to this news. Boeing is already talking about price increases on the 787 (who can blame them?). Airbus needs to get a win on the 350 - can it be the 350 is so eclipsed by the 787?

In-Flight Magazines

We came across a really neat blog called Connecting Flights - use this link to get there. http://babelfish.typepad.com/babelfish/ We especially like their story on the future of in-flight magazines. Readers know that we are gung ho on in-flight internet access. So we are a bit chastised that we never thought of this before. Their blog entry Bored at 40,000 Feet reads: “My story on the illusory success of in-flight magazines appeared on Mediabistro.com Monday. These are good times for the custom publishers who actually do the heavy lifting and reap the profits -- Pace Communications, which publishes United's Hemisphere, Delta Sky, and U.S. Airways' Attaché, is more profitable than all three of its clients -- but they're about the hit turbulence, I argued. The arrival of live satellite TV in every jetBlue seatback changed the equation, as will the eventual arrival of cellphones and WiFi in cabins. If magazine readership usage in the general population has fallen over decades due to competing forms of media, then what would happen when all of that competition suddenly arrived in airspace at once? My conclusions were blasted as simplistic by some (Simon Leslie of Ink Publishing, which publishers a number of in-flight titles for mostly European clients, wrote to say he was particularly disappointed), but the point I was trying to make is that in-flight magazines need to use the isolating experience of most flights to their advantage. The magazine I loved the most, Virgin Atlantic Upper Class' Carlos, is compelling because of a combination of the content (sharp, funny, media-savvy, and unapologetically elitist) and the design is minimal and striking. Mr. Leslie meant to take issue with that -- "The fact that his favourite magazine is Carlos really sums it up, its a magazine that is different for different sake" -- but he hit upon exactly my point. The fact that I also spent three weeks doing nothing but fly from place to place and yet was still too busy to flip through Hemispheres proved to me that only something shockingly different, and for difference's sake could compel me to read it.“ We concur that in-flight magazines really don’t seem to have such a great future. They are, by and large, boring and self serving. Its kind of telling when you see the Skymall catalog has a distinctly more “used” look about it. We surmise that in-flight magazines will go the way of the crappy in-flight content pumped through the aged and mostly out of tune TV sets on planes – how many color settings do these have? Roll on the day where we can use our own equipment and access our own content.

LCC redefined - Jazeera costs nearly nothing to fly

Jazeera Airways yesterday announced the launch of a ground-breaking fare structure starting from 10 Kuwaiti dinars. The offer will be valid for flights to all its destinations for bookings placed three weeks ahead. The new fare will always be available on selected seats on every flight to Kuwait, and every flight from Kuwait to Dubai, Beirut, Damascus, Amman, and Bahrain in addition to future destinations. Michael Hayden, revenue manager of Jazeera Airways, said: "Our new fare structure brings more freedom to travellers who plan their flights before-hand. Early birds, as we call them, can now fly to any of our current destinations on board our brand new aircraft for only 10 dinars when they book three weeks ahead." Based on a low-fare business model, Jazeera Airways is the first privately owned (and non-subsidised) airline in Kuwait and the Middle East. The airline is a national carrier of Kuwait and operates a fleet of brand new Airbus A320 aircraft all fitted with 165 leather seats. Its unique business model works to achieve across-the-board efficiency through electronically integrated operations, innovative booking and ticketing systems, operating a fleet of single type aircraft, and contracting world renowned specialists such as Lufthansa-Technik for engineering services. The airline only recruits pilots who have a minimum of 5,000 flying hours. --------- Using the link below, you too can see that 10 Dinars is ~$34. If pundits thought Emirates growth outrageous then this pricing seems to indicate free fuel, aircraft and labor. What is going on over there? Note the revenue manager quoted in the story is clearly an ex-pat. Likely a Brit like many managers among the region's airlines. Mr. Hayden was not, apparently, trained at American Airlines. (Crandall would have skinned him alive in public) How long can these mid-east airlines continue to do business this way before reality strikes? BTW you might be impressed to know that Jazeera's IPO was 12 times over subscribed. http://www.xe.com/ucc/convert.cgi

Einstein's theory of boarding planes

Ananova: Researchers have used Einstein's theory or relativity to find the most efficient way for passengers to board an aeroplane. And they have concluded that the time honoured method of boarding by seat numbers is a waste of time, reports the Sun. Dr Eitan Bachmat, of Ben-Gurion University of the Negev in Israel, says airlines would be better off following the example of low-cost carriers who let passengers sit where they like. Dr Bachmat said: "Back-to-front boarding is bad because it is designed for cardboard-thin passengers, or for the spacious surroundings of the first-class compartment. "But there is no need to play with the rows. It doesn't matter which rows get on first." Dr Bachmat stumbled accross the theory when researching how to make computers run quicker. He said: "It dawned on us that we could use the same geometry that appears in relativity theory." -------- Now you know.

Boeing trifecta?

What happens if Boeing wins the current big three orders? That is Air Canada (in the bag), Qantas (in the bag) and Singapore. With two out of three, they must be feeling their oats in Seattle (or is it Chicago?). The success is remarkable. These are tier 1 airlines - with British Airways and Lufthansa to come next year. Other airlines that might not have ordered to date (read US carriers) must be in a mild state of panic - when will they get any slots for 787 orders? We are talking about the 787 possibly being sold out for the next 5 years. By then even United and Delta need to order 767 replacements. Concerns are these - production slots are just about gone. If Boeing has another strike (it has famously bolshie workers) or quality control problems all bets are off. Can you see any of the US legacy carriers ordering Airbus 350s (aside from US Airways - a weird deal to start with)? Can you see a Delta 350 or, Bill Boeing will roll in his grave, a United 350? American has bought Airbus before but might still feel burned from the A300 crash in NY. United is very happy with its 319/320 fleet. Delta got rid of its inherited (ex-Pan Am) 310s. We live in interesting times. Happily we are speaking here of growth not layoffs. But too much of a one-sided race is not a good thing.

Singapore Air buying from Boeing?

DOW JONES reports that Singapore is leaning towards a 777/787 combo order. There are even hints at 748 freighters. However other sources say this order is only likely to occur in February. The Dow Jones stort alludes to an order between 66 to 80 planes, mostt being 777LRs. this does not seem likely as Singapore has to only replace 5 Airbus 340-500s which currently do their ultra long hauls. It seems that Singapore might be leaning towards an order of size and scope very similar to Air Canada's. Hmmm, lots of Canadian news today...

Air Canada's new 190

Air Canada has a new addition to its fleet - its first Embraer 190 left Ottawa for Orlando on its inaugural flight this week. This must really burn Bombardier. The 190 has great range and Bombardier's C-series is still a paper airplane. Air Canada has been a good and local customer to Bombardier. Well done Embraer on seeing this niche and then filling it.

Vancouver airport faces strike chaos

Globeandmail.com -- If an agreement cannot be reached Thursday with one of the airport's unions representing roughly 500 baggage handlers and plane cleaners, a Christmas Eve strike would likely occur. Members of District Lodge 140 of the International Association of Machinists and Aerospace Workers were in negotiations with Servisair/GlobeGround Thursday. The company's handlers represents 21 airlines at the airport, mostly international carriers, including American Airlines Inc. , British Airways PLC , Singapore International Airlines , and Air France-KLM, among others. -------- Yet another case for finding other options. We are tired of hearing how transportation workers (especially in NYC!) hold travelers to ransom. If ever there was a time to seek automation options, it is now. Of course we are dealing with Canadians - not a people known for unbridled capitalism. Their customers (the traveling public) will hurt the same as at any other airport - remember Heathrow in the summer?

Florida teaches a lesson in travel purchasing

Tallahassee Democrat -- An $6.9 million contract that discounts air travel for state workers has not been renewed, leaving individual state agencies and workers responsible for their travel plans, a Department of Management Services spokeswoman said. Doug Darling, director of the division of accounting and auditing at the Department of Financial Services, said the state has spent $23.21 million on air travel since the new fiscal year began July 1. He said the state spent a total of $107.4 million in the last fiscal year on air travel, mileage, accommodations, car rental and meals, but there was no way to identify how much of the total was spent only on air travel. Koenigkramer said three airlines - Delta Air Lines, United Airlines and AirTran - responded to the proposal. "Now, each agency basically finds the best deal for the day they are flying," Koenigkramer said. ----------- Amazing! Don't government people think this through a bit more? They could easily have American Express to run their travel program. But this is not a paid advertisement. There are options for them and they are better off using other options and tools than an airline contract. What we like about this story is that airlines have started to say "No". There were few interested bidders - can you imagine USAirways and American didn't even show interest? This may be an interesting lesson as to the real state of US carriers. They may be feeling a lot stronger than their public remarks indicate.

Flyi gets another sniff

Washington Post -- Independence Air, which filed for bankruptcy protection last month, has received another bid for its assets -- this one, from its former longtime partner, United Airlines. United's parent, UAL Corp., which has been operating under bankruptcy protection for two years, said yesterday it wants to buy unidentified assets of Dulles-based Flyi Inc., which runs low-cost Independence Air. In documents filed with U.S. Bankruptcy Court in Chicago, United sought the court's permission to place a confidential bid in the auction called by Flyi on Nov. 7. United did not specify which assets it is seeking, and it asked the court to keep details of its bid confidential. "To preserve United's competitive position in the Auction it is necessary to keep the description of the assets on which it is bidding" and the amount of the bid, "confidential," United said in the filing. ------ Potentially Flyi now has something to compete with anything Mesa might be offering. It appears the initial flutter of interest by Virgin America was just that. But one might assume that United will only be interested in parts of Flyi whereas Mesa will swallow the whole enterprise. Soon we can say good bye to Flyi. Now that jetBlue is in Dulles prices will mostly stay low. In the absence of Flyi, we expect to see a number of jetBlue’s shiny new Embraers located there.

Amadeus likes sharing

A PDF document dated October 2005 from Amadeus by Prof James Woudhysen from De Montfort University - click to download

Air India needs all those new planes it ordered!

LA Times -- 45-Hour Delay: Nonstop Plight - Passengers on an Air India flight endure hours on the tarmac, a mini- revolt and more. Oh, the memories! December 22, 2005 It started Monday when their first plane blew a tire on takeoff, dumped fuel over the ocean and circled back to Los Angeles International Airport to land in a spray of sparks, shedding 200 pounds of rubber and metal on the runway. On Tuesday, hundreds of Air India passengers tried again, settling into a different jumbo jet with "Your Palace in the Sky" scrolled in red script near the tail. This time, one of the engines wouldn't start. For about five hours, travelers sat in the sweltering plane. Flight attendants locked up the drinks. Some passengers staged a mini revolt. Finally, passengers were taken off the plane and bused to a hotel, arriving at 2:30 a.m. Wednesday. They overwhelmed the front desk, and some did not get to bed until 4 a.m. The weary travelers returned to LAX later Wednesday morning for their third attempt, a flight set to depart at 1 p.m. It was pushed back. It was moved up. And finally, around 4:30 p.m., they took off, bound for Frankfurt, Germany, and New Delhi. All in all, after two nights with little sleep, endless waits in line and three scheduled flights, their ordeal stretched to a 45-hour delay. "It's been a nightmare," said Jaswinder Toor, a self-employed contractor from Modesto, as he waited in the Tom Bradley International Terminal on Wednesday. Through it all, an engineer, a psychologist, a man recovering from open-heart surgery, several college professors, an aspiring model and "a Western Master of Eastern Wisdom" got to know each other on a first-name basis. Some didn't make it to important lectures. Others lost precious vacation days. And a few worried they would miss once-in-a-lifetime family events. "I want to be at that wedding, otherwise I'll get very mad," said Gursharan Toor, 16, as he stood in line with his family Wednesday morning, a Red Bull in one hand and a fruit juice in the other. "I only have one sister." The high school junior's journey started early Monday when he, his brother Jaswinder, his brother's wife and their 6-month-old son drove from their home in Modesto to San Francisco to get a visa for the baby. After a seven-hour drive to LAX, they boarded Air India Flight 136 to New Delhi. As the plane took off, Gursharan said, it shook after a tire burst, startling passengers. The Boeing 747-400 flew over the ocean and circled, dumped fuel and then returned for a bumpy emergency landing. The landing gear dug into the runway, leaving a 7,000-foot-long field of debris that took 40 employees hours to clean up. That night in a hotel, the teenager and his family turned on the news to see footage of their plane landing amid a shower of sparks. "We're lucky everyone is safe, thank God," Gursharan said. Airport officials said the pilots made a wise choice to take off, explaining that, if they had aborted, they might not have had enough runway to stop the heavy, fully fueled aircraft. Jaswinder Toor tried to get the family on a different airline but was told that the next available seats were not until Jan. 15. His sister's wedding is Jan. 8. On Tuesday, the Toors returned to LAX, loaded with 10 pieces of luggage and wedding presents, to try again. Flight 136 pushed back from the gate at 8:35 p.m. — 2 1/2 hours late. As the jet approached the runway, the crew realized that one of the four engines was malfunctioning. They called a tug to tow the plane to a remote gate near the western end of the runways. It took 45 minutes. After making an initial announcement that there was a "technical problem," the flight crew didn't provide more detailed information, passengers said, leaving them trapped on the packed jumbo jet for about five hours. "We were told it would take 10 minutes, but it took another hour and another hour," said Gerhard Wenz, a chemistry professor on his way to Germany. Representatives of the government-owned Air India said the crew didn't immediately take passengers back to the terminal because mechanics initially thought they could fix the problem quickly. "This process takes time; that is why obviously the passengers would have discomfort," said Lalit Kapur, the airline's West Coast manager. "They would find that we cannot give the correct information because we also don't know it. It was step to step as it happened." As mechanics worked to diagnose the problem, the temperature started rising on the double-deck plane. Flight attendants locked up the drinks in the galley to keep passengers from helping themselves. Soon tempers flared. Some travelers who had been on Monday's flight stood by the cabin doors, crying. Soni Verma, a psychology professor at Sierra College in Rocklin, near Sacramento, said some of the stranded passengers were very patient. But she added, "We were not." As their son Rahul, 10, snapped pictures on his camera and listened to music in Hindi on his iPod, Verma's husband, Ravi, organized passengers to lobby the flight crew to allow them off the airplane. "I'm an engineer and things break," Verma, the chief executive of a network security company, said as he stood in line Wednesday morning. "But people [were] suffering — they think people are immature and you shouldn't tell them too much." Finally, Wenz, the professor, said he just walked through a door that attendants had opened. He climbed down the stairs and off the plane to wait on the tarmac. Other passengers, he said, followed. He watched mechanics checking the engine with a flashlight. As he recounted his story at Gate 110 of the Bradley terminal, Wenz and his fellow travelers agreed that the experience, however unpleasant, was memorable. "We made up a joke," said Jeffrey Armstrong, whose business card proclaims him a "Western Master of Eastern Wisdom" and who said he often travels to India to lecture. "Air India is going to give out infrequent flier miles." --------- How about this for brand damage?

Why airline employees love their unions

bizjournals.com -- A New York law firm on Tuesday said it has filed a class-action shareholder lawsuit against several Northwest Airlines Corp. executives and directors, accusing them of insider trading. The lawsuit accuses Northwest CEO and Director Doug Steenland, Chief Financial Officer Bernard Han, Chairman Gary Wilson and Director Alfred Checchi of selling company stock for proceeds of more than $30 million while in possession of nonpublic information about Northwest's plans to file for Chapter 11 bankruptcy. The Northwest officials also allegedly made false and misleading statements about the company's financial prospects, according to the suit. ------ Can you imagine this being true? Say it ain't so! If it is true, then the courts should not only fine these fellas, but add an extra dumb tax to the fine.

Fitch on US Airlines

From Fitch Ratings -- As U.S. airlines assess the impact of another year of financial turmoil and multiple bankruptcies, improved domestic pricing and capacity reduction are establishing a stronger foundation for modest improvements in liquidity and balance sheet health in 2006. With no clear signs of softening air travel demand on the horizon, the outlook for industry revenue is strong for the next several quarters, and average fares are likely to trend higher again next year. However, the future direction of crude oil and jet fuel prices remains the greatest unknown that will likely determine whether 2006 is a year of modest balance sheet repair or simply another year of weak cash flow generation and ongoing liquidity pressure. The recent spike in refined product prices caused by Hurricanes Katrina and Rita exposed U.S. airlines to extreme fuel cost pressure at a time when significant gains in revenue per available seat mile (RASM) would otherwise have supported stronger operating margins and respectable cash flow generation. Unfortunately, the surge in 2005 energy costs (largely unhedged at the major carriers) has kept pressure on cash balances and prevented U.S. airlines from beginning the process of delivering badly damaged balance sheets. Indeed, the post-Katrina jet fuel price spike helped accelerate the timing of Chapter 11 filings by Delta and Northwest on Sept. 14 and Independence Air on Nov. 7. While no other large carriers face the risk of an imminent liquidity crisis moving into 2006, it is clear that a similar energy supply shock could lead to another year of unsustainable operating results-even if such a shock did not result in weaker economic growth or diminished air travel demand. With fuel now accounting for 22%-25% of U.S. airline operating budgets, the need to keep tight controls on non-fuel unit costs is even more pressing. With the exception of Southwest Airlines, none of the major carriers has a substantial energy hedge in place for 2006, and weak balance sheets make entry into large-scale hedging programs difficult. It is safe to assume that a major pull-back in crude oil and refined product prices next year would spur a big increase in the level of hedging activity. While the solvent majors and many of the better capitalized LCCs could be in a position to cap some fuel exposure next year, the bankrupt carriers (notably Delta and Northwest) will be forced to focus on cash conservation and may not be in a position to hedge effectively. Should energy prices remain at or near current levels, a significant increase in passenger RASM will be decisive in determining whether the big carriers can report stronger cash flow and liquidity. Based on Summer 2005 demand levels and a favorable macroeconomic outlook, the foundation for strong domestic and international traffic patterns in 2006 appears solid. The unit revenue outlook is strengthened further by the improved domestic available seat mile (ASM) capacity picture. Chapter 11 restructuring plans at Delta and Northwest call for deep cuts in domestic ASMs at both carriers next year. Furthermore, the likely liquidation of at least part of the Independence Air operation at Washington-Dulles should ease competitive capacity pressures on the East Coast next year. Fitch believes that domestic system capacity for the industry could fall by as much as 5% in 2006, with much of the supply relief occurring in the East. To some degree, the positive impact of better domestic supply-demand fundamentals will be offset by the redeployment of ASM capacity to international markets, where 2005 yield trends have been quite strong. Plans to grow Transatlantic and Latin American scheduled capacity at high rates in 2006 may begin to undermine pricing in some key markets. Delta, in particular, seems to be at risk of unit revenue under performance over the next several months as it moves aggressively to redeploy unprofitable domestic capacity to Europe and Latin America. For all of the U.S. majors, but especially for United and Northwest with their extensive Pacific route networks, the potential for emerging public health crises tied to avian flu outbreaks in Asia continues to pose some risk of international travel demand shocks and corresponding revenue weakness through the winter months. The Delta and Northwest bankruptcies have set in motion another round of labor cost restructuring efforts at those carriers that will likely drive their pay and benefit levels closer to those seen at Southwest and the other LCCs by mid-2006. Wage cuts, whether reached consensually or through the direction of bankruptcy courts, will almost certainly be accompanied by the distressed termination of the two carriers' defined benefit pension plans. The cash funding burden required to meet unfunded pension liabilities will likely be too large for Delta and Northwest to attract exit financing following a Chapter 11 reorganization. Fitch believes that termination of the plans will be required, even if the U.S. House of Representatives follows the Senate in passing a pension reform bill that provides a 20-year amortization period for the repayment of unfunded airline pension liabilities. Pressures are intense to achieve benefit parity with United and reorganized US Airways, both of which have terminated all of their defined benefit plans in bankruptcy. With most traditional airline pension plans likely terminated by late 2006, American and Continental will find themselves the only major carriers still facing the need to fund defined benefit plans. For both of these carriers to manage pension funding obligations and heavy debt maturities effectively, consideration of plan freezes will be required. Continental has already contained part of its pension problem by freezing its pilot plan earlier this year. Absent a plan-freeze agreement with labor, American may be forced to seek offsetting productivity concessions from unionized employee groups to maintain a competitive cost position versus the other legacy carriers in an industry now largely devoid of traditional pensions. For all of the highly leveraged legacy carriers, even United in the wake of its three-year Chapter 11 reorganization effort, substantial debt reduction and balance sheet repair will only be possible if earnings and operating cash flow levels recover dramatically in 2006 and beyond. At a time when more classic mid-cycle revenue trends should be supporting a surge in free cash flow generation and debt reduction, high fuel costs and intense fare competition have delayed the process of financial reconstruction and have exposed the industry to the risk of even more structural turmoil when unit-revenue trends take a turn for the worse. The bankruptcy filings of four major carriers over the past four years have failed to deliver the type of industry consolidation that could lay the foundation for corrective capacity adjustments and pricing stability during the next period of air travel demand weakness. Prospects for industry consolidation appear somewhat better moving into 2006, given the surprisingly strong availability of equity capital (witness the recapitalization of new US Airways) and some indications that the opposition of antitrust regulators to big mergers may have waned during a period of industry financial crisis. However, the willingness of better-positioned carriers (Continental and American in particular) to drive consolidation remains very much in question-particularly given the weak character of those airlines' balance sheets. Still, improving accessto private equity capital may well result in increased discussion of M&A activity and industry consolidation next year. For more information, please contact William Warlick (312-368-3141) or Stephen Brown (312-368-3139) of Fitch.

When do airlines stop being a "service" industry?

AP -- About five of six Northwest Airlines customers at Detroit Metropolitan Airport bypass the lines at the ticket counters by checking in for their flights on the Internet or at self-serve kiosks. That saves time for the travelers and labor costs for the financially struggling air carrier. So far this month at least 84 percent of those boarding Northwest planes at Detroit Metro bypassed the ticket counters, the airline said. --------- In inexorable march towards automating everything continues. But when do airlines stop being regarded as a service industry? Already you bring your own food, now you print your boarding pass and essentially check yourself in to the flight. In just doing these few things airlines have removed two huge areas of confrontation. Passengers no longer make airline food jokes – there’s no food to joke about. Making jokes about missing food wears thin real fast. Getting rid of standing in lines is a plus for anything. Now we stand in line for TSA and there are lots of jokes about that. Think about a typical trip these days. No more travel agent, the web does it all – from flight and seats to check-in. Once on the plane, crowded and stuffed into your seat (OK I’m overweight, don’t rub it in – I know) nobody is expecting service. About one-third of fellow travelers try to use their cell phone for as long as possible. About a quarter try to set up their laptops – a few break as the seat in front gets leaned back. The environment is, frankly, combustible. You see, air rage is a perfectly rational behavior. It is acted out by normal people who are not exposed to this environment. Frequent fliers don’t get air rage as often because they have been beaten into submission. About the service. The flight attendants infrequently walk up and down the aisle offering you coffee (that’s what they call it) and soda. Mostly the soda is a splash of something sweet over a small cup of ice. The act of sipping this brings back childhood memories of soda. Don’t dare ask for a can – for those who do, beware flight attendants have been known to report this to the pilot as a badly behaved passenger. This automatically gets you a visit with TSA or worse (yes there is a worse, don’t go there). Arriving at your destination airport, you ponder the value proposition of the flight. It cost you nearly nothing (in relative terms – Cincinnati to Paris $468 or Cincinnati to San Diego $600 – you figure out the better deal). You paid very little but got very little. Flying LCCs is even cheaper. In summary, based on our experience over the past year here is what we know to be true. Legacy airlines - Flights are cheap and you get little for it other than transportation. LCCs (specifically jetBlue & Southwest) – Flights are cheap but the people smile a lot even if service is light. The recommendation is therefore to fly an LCC anywhere you can. They offer a value proposition that does not leave you wondering. Service industry? Air travel is no longer a service industry. Unless you consider the excellent performance of airline web sites to deliver you what you want in an instant. Yes that is about the only place you get really fast and efficient service from an airline. By the way, on-time arrivals are not a service. ====== This story is mostly read by airline staffers! Quit laughing - you people never paid retail for a seat; you have no idea how we peasants feel.

Airbus 350 - another order

Reuters -- Brazilian airline TAM Linhas Aereas said on Wednesday it placed a firm order for 10 Airbus A350-900 passenger jets, becoming the first carrier in Latin America to buy the new plane. The deal, which also includes an option for five more aircraft, could be worth than USD$2.4 billion if all options are exercised, according to the list price. Deliveries are scheduled to begin in 2012. TAM, a longtime Airbus customer, said it intends to use the new aircraft to renew its fleet. The airline currently has 56 Airbus jets in its fleet, including the A330-200, which seats 213 passengers. The A350-900 will be configured in a three-class layout, seating up to 300 people. -------- Nice way to end the year but oh so far behind the 787. It gets worse - Boeing's Mulally said he believes a 787-10 is inevitable. "I think someday we will make another stretch, the 787-10, for sure, because it is compelling economically. I see room for both airplane families (the 787 and 777) with airlines going forward. It is very analogous to the 777 family. If it can be done as time goes on, those stretch airplanes are very efficient." This bodes ill for Emirates interest in the 350. By the time this order needs to be placed, Emirates might be a very different company. Its growth cannot be sustained. So any orders placed now are already being looked at warily, and much more so in the future. We hear that Boeing are forecasting the 787-10 might be authorized as early as January or February 2006 as the company is under pressure to build it for a number of Middle Eastern Airlines - for which read Emirates. Indeed the Miami Herald reports "Yvonne Leach, Boeing's spokeswoman for the 787 program, said Tuesday the company is talking with Emirates Airlines and Qantas Airways Ltd. about the larger jet, but she would not say what other airlines might also be interested." So the fantastic plastic plane looks to have a rosy future. Which leads to the next thing Boeing really needs to think about - a replacement for the 737. Earlier today we reported on this amazing airplne. But it does have a lifespan and that is clearly coming to a close over the next decade. For which you might want to search for the following words Boeing and "Yellowstone 1" or "Y1" - e.g. http://en.wikipedia.org/wiki/Boeing_Yellowstone. You would be correct in thinking of a 787-style or shape and definitely lots of plastic. Light and performance up the wazoo with fuel-sippers for engines.

Aboulafia Holiday Card

December 2005 Dear Fellow China Watchers, A lot of bad things happened to Airbus this year. The A380 delays, the A350’s slow, uncertain start, and worst of all, the A340’s downward spiral. But this is the time of year for giving thanks. It’s important for everyone to remember the good things and be grateful. Airbus should be thankful they avoided the greatest disaster of all: a production line in China. The trouble started earlier this month with China’s order for 150 A319/320/321s, placed when Premier Wen Jiabao visited France. As with most Airbus and Boeing orders China’s Aviation Supplies Import and Export Group (CASGC) boxed up various airline orders and placed them together. This enhances the impression that CASGC is in the driver’s seat (rather than the airlines that actually need the planes and pay for them). Airbus and the Chinese also signed an instantly hyped agreement that “describes the process to evaluate the fields of enhanced cooperation, including the possibility to establish a Final Assembly Line for single aisle aircraft in China.” In French, Chinese, or fractured bureaucratese, that statement is meaningless. And that’s great news for Airbus. The history of jetliner production in China is grim. Disregarding the awful indigenous stuff, the biggest disaster was McDonnell Douglas’s Shanghai plant. After a huge investment, the plant built 35 MD-80s and two MD-90s. Five of the 80s had to be re-exported, to TWA. If China was going to build its own jetliner industry, that was the moment to do it. Since then their aviation ambitions have gone downhill. Despite MD’s China fiasco, jet manufacturers haven’t all gotten the message. More recently, in 2002 Embraer built an ERJ facility in Harbin (for background on this very bad idea, see my October 2002 letter at www.richardaboulafia.com). After investing $40 million, Embraer sold six planes. Three years later after a sales campaign resembling tooth extraction, they sold six more. But the recent water contamination in Harbin (huh?) kind of stopped production there (see http://www.embraer.com.br/institucional/download/2_108-Ins-VPP-Statement_HEAI-I-05.pdf for Embraer’s strange announcement about this). The workers then retired to the bar, where they drank license-produced caipirinhas. “Hmm. They put funny stuff in our water. Maybe that’s why we signed the agreement to build planes here in the first place.” There’s lots of smaller disasters. Chinese Su-27 orders petered out last year only after they built an in-country production line. Industry jokesters Alliance Aircraft ended their bizarre existence by announcing a production line in Harbin. Fairchild Dornier’s ghastly collapse was interrupted only by that weird D’Long Investments experience and the quickly dashed hope of Chinese exile. Boeing’s dead 717 was cursed from birth as the MD-95, born with a Shanghai production line. And remember the other China production ideas that died: DASA’s MPC 75, Airbus/DASA’s A31X, and Airbus’s AE-100 (the “Asia Express!”). Take a moment to Google them if you have time to kill. Best of all, in December Beijing News reported that Bombardier would build its tragic CSeries in Shenyang. If accurate, this report confirms the CSeries transition from terminal to dead. Perhaps there’s a euphemism here: “I’m sorry, Timmy. Grandpa’s been taken to the China production line in the sky.” Why does China production mean so many bad things to so many people? First, there’s the WTO. One of my dearest friends, WTO’s Agreement on Trade In Civil Aircraft (ATCA), prohibits any airline purchase preference for aircraft with local content. (http://www.wto.org/english/docs_e/legal_e/air-79_e.pdf). China’s economy is export driven, so they try to adhere to WTO (while not ATCA signatories, they have “observer” status). Sure enough, the guys who made the biggest investment in China—MD—got the worst market share of the big three (by far). Nobody in the government ever pressured a Chinese carrier to take locally-built MD planes. And today Airbus and Boeing together do about $100 million in China work annually. After all the talk, this is an absurdly low volume—around one-fifth of 1% of the total world jetliner value chain. This work bears no relation to the volume of Chinese jet orders. If there’s a Chinese official mandating industrial work in exchange for orders he fell asleep at the switch long ago. It’s also easy for manufacturers to lose their focus in China. They need to sell to the airlines, not to the central government or CASGC. MD made a huge mistake in thinking that one point of contact, one facility, and one big investment would take the place of serious airline sales efforts. Airbus and Boeing ignored the production line idea and sold directly to the airlines. There’s also the triumph of illusion. Everyone conspires to play up the China market, and the virtues of investment there. Politicians—Chinese and Western—love to take credit for job creation, no matter how tangential and unlikely. Companies love to announce big strategic sales initiatives, no matter how dubious. And everyone likes to threaten unions and politicians back home with the dreaded China price: “Lose the pension or we move your jobs to Xian!” or “Give us tax breaks or we move from Kansas to Manchuria!” That’s how $100 million in work gets exaggerated to the biggest new aircraft production source on earth. Then there’s the ego factor. The banquets, the toasts, the statesmanship, the credit-taking. Which politician, which captain of industry, which sales executive can resist signing grandiose agreements while making self-important toasts with gopher bile liquor in a gaudy banquet hall? This charming but empty process was best described in Joe Studwell’s The China Dream (Atlantic Monthly Press, 2002) and James Mann’s Beijing Jeep (updated by Westview Press in 1997). For Airbus the China line rumors implied greater access to a growing and important market. This is a false hope and a fool’s game, but given the difficult year Airbus had it was important to get some kind of positive-sounding news out there. Yet ultimately Airbus is too smart to fall into the China trap. They dodged a bullet. Good for them. With luck Airbus will keep dodging these bullets. The A320 is a great plane and is very competitive in China. Teal will keep a close eye on the situation and will downgrade Airbus’s narrowbody market outlook only if an A320 plant opens in Shanghai. And speaking of Asia, I’ll be on vacation there December 28 through January 16. If you need anything industry related, please contact Phil Finnegan at pfinnegan@tealgroup.com. If you need anything logistical, please contact Tim Storey at tstorey@tealgroup.com. And in the meantime, this month’s updated aircraft include the F/A-18, AH-64, Falcon, Su-27/30, E-3/E-737, B-2, E-8/E-10, A.109, BA 609, and the World Aircraft Overview. Have a great new year. Yours, ‘Til I Get An Aircraft Production Line Job In Asia, Richard Aboulafia (703) 385-1992 ext. 103 (office) raboulafia@tealgroup.com

The Amazing 737

Early Model - 1967 Current Model - 2005 Boeing -- The record-breaking Boeing 737 airplane just set a new milestone likely to remain in the books for a long while. With an order for 10 737-800s from Xiamen Airlines, total orders for the all-time, best-selling 737 surpassed the 6,000 mark. Today’s order from Xiamen Airlines and subsequent orders from unidentified customers bring the 737’s exact sales total to 6,025. No other jet airplane in commercial aviation history has achieved the sales success of the 737. To date, 3,132 models of the “Initial” (-100 and -200) and “Classic” (-300 through -500) families, and 2,893 of the newer, redesigned Next-Generation 737 series (-600 through -900ER) have been sold.

Maintenance nightmare?

Yahoo news -- Japan Airlines had been flying a Boeing jumbo jet for seven months without realizing the plane's left and right outer engines had been placed on the wrong sides during maintenance in Singapore in February, airline officials admitted Wednesday. Some components of the engines are required to be inspected once every 650 flights, but as a result of the mistake, one of the engines completed about 850 flights without being examined. In February, JAL commissioned ST Aviation Services Co. Pte Ltd. in Singapore to conduct maintenance work on the four-engine Boeing 747. The plane resumed service after the overhaul was completed in April. It was not until a regular maintenance checkup in November that the engines were discovered to have been attached wrongly. Reversing the engine locations results in air flow toward the fuselage instead of away from it during reverse thrust. However, it does not create any difference during normal thrust and thus poses no safety problems during flights, the officials said. --------- JAL has had a series of issues this last year. It used to be that every JAL 747 had its own maintenance crew. You have to wonder what's going on at JAL?

Thoughts on a 58 year old

The Chalks Grumman that crashed this week in Miami was apparently 58 years old. It was reworked to have turboprops to replace the original radial engines. But it was 58! It should be noted this is the first crash for Chalks - America’s oldest continually operating airline. We have no reason to doubt maintenance. Here is a Chalks Grumman with radial engines in the late 70s: And here with turboprops as they are now: Aloha lost a 737 when its roof tore off (the infamous convertible) and TWA's 747 apparently was also a victim of equipment fatigue. Our opinion here is not based on any inside infomation. The NTSB will decide what happened to cause this tragedy. In the meantime, one might reconsider flying something this old. Modern seaplanes exist. Indeed the Canadians are the experts and the next image is of an airplane that might do the trick.

A350 vs 787 - highly searched for issue

One of the traffic generators to this site is the state of the A350 vs the 787 in terms of sales. The above chart comes from FI and shows what many of you are looking for. Note how 787 sales shoot up when the 350 was announced. Airbus essentially endorsed the segment as viable. The 787 has now become the best selling newly launched commercial airplane. No previous new commercial airplane has sold faster. This week Boeing announced another 10 sold to CR in Hong Kong. This is quite an wonderful thing to ponder when you consider the Boeing of a year ago - Pentagon problems, a horrible strike, Harry's dalliance and so on. The challenge will now be to execute, flawlessly. Based on what Qantas said of the 787 & 350, the planes being very close in performance, any hiccups at Boeing will help 350 sales. The race is Boeing's to lose and the company has proven itself quite capable of making monumental errors before.

DC10 Twin - An Idea That Should Have Happened

Many years ago the smart fleet planning folks at American contacted Douglas and asked for a twin DC10 that could fly coast to coast. Douglas thought the idea was nuts and said the DC10-10 was just right for that task. American did not think so, an extra engine was not needed they thought. Meanwhile over in Europe, a group of companies had created a new entity called Airbus. Their first plane was the A300 - a big twin. American managers watched carefully. The first US carrier to buy the plane was Eastern. It came with just right engine for American, the GE CF6. American eventually ordered a bunch of the A300-600. The DC10 faded and even though American stuck with Douglas through the MD11, Douglas showed that when you don't listen to your customers eventually you are toast.

Lufthansa vs Vereinigung Cockpit

Reuters -- Lufthansa wants to reduce pilot costs further to help boost profitability and meet increasing competition in the global airline market, its chief executive Wolfgang Mayrhuber said. Mayrhuber raised questions as to how long the airline could continue to pay its pilots "significantly above the market rate" and said market conditions should apply to new pilots joining the company. "We have to convince the unions that lower pay is advantageous for them, as only profitable jobs are secure jobs," Mayrhuber said. "We have to negotiate with the unions. It is not easy. Not everyone understands how much a large company like Lufthansa has to earn to be secure." The chief executive added that pilots union Vereinigung Cockpit would have to budge on an agreement preventing lower-paid pilots at its airline partners such as City-Line from flying regional planes with more than 70 seats. Lufthansa also plans to take advantage of new fuel-efficient planes with lower operating costs being developed by Airbus and Boeing to expand and modernize its long-haul fleet. "If we bring in the 747-8, then one should assume that we will replace what we have today, namely about 30 planes, step by step," Mayrhuber said. An order for 30 747s today would cost about USD$7 billion, according to Boeing's list prices. --------- Kind of confusing and a few things popping here. LH wants more flexibility to fly smaller planes. They want to pay less for any pilot. They are also looking at their long haul fleet needs. No real pattern of logic connects these issues. However it looks like LH will squeeze the pilot union and is about to give nightmares to Airbus' salesmen as they ponder the longhaul campaign will most likely get rid of the 340s at LH. The possibility that LH decides in favor of the 748 could be a body blow to the 380. Airbus is nowhere near its breakeven on the 380 program and would like to see Air France and Lufthansa replace all their 747s with 380s to reach that point. Unfortunately, Air France seems to be replacing 747s with 773s. There is every chance that LH might do the same or even go with the 748. Bad news for the 380? LH has already done a deal with Air Namibia on a few 340s. Their 340-200s are going to go. We might even see some of these end up in Mexico as Mexicana looks to fly across the Pacific. Buying second hand from LH is very low risk as their technical services are probably the world's best.

United - greedy managers?

ATW -- United Airlines' pilots union joined the chorus of dissent against a management plan to set aside 18.75 million shares of stock representing 15% of equity in the reorganized carrier for its salaried and management employees. "The so-called Management Equity Incentive Plan reeks of immorality," Air Line Pilots Assn. MEC Chairman Steve Dereby said in a statement, adding that the award "is excessive and has the effect of insulating United's executives and management from the consequences of a reorganization that has deeply affected all the other stakeholders." Based on UA's reorganization plan, the stock is worth $285 million, according to the Associated Press. ---------- How come other chapter 11 airline managers have not given themselves such a deal? Maybe because it stinks and will not pass the smell test. If running a chapter 11 airline is worth this reward, by extension, how much should managers at Continental and American be rewarded since they have stayed out of bankruptcy? United's managers sure know how to keep union members locked into their unions - no wonder this company has a history of management/employee fighting. This does not augur well.

Star Alliance signs G2, ITA as preferred alternative GDSs

Travel Weekly -- The Star Alliance signed contracts with G2 SwitchWorks and ITA Software to make them the Star’s preferred alternative GDS vendors, setting the stage for new individual deals with each of Star’s airlines. Under the umbrella deal, Star’s 16 member carriers will enter into detailed discussions with the providers to build a “tailor-made solution” for their requirements, the alliance said. As for new functionalities and choices, Star VP Horst Findeisen said one possibility is prepaid seat selection, in which carriers could charge different prices for middle, aisle and window seats. Findeisen said he’s not aware of an airline committed to doing that, but the new systems make it possible. Another possibility, he said, is an identifier to describe how far a seat reclines, including whether it lies flat, perhaps with a link to a photo. “Today, GDSs are commoditizing airlines; a seat is a seat is a seat. And that is not so,” he said. Star Alliance officials also have talked about the possibility of airlines using the new systems for selling upgrades, letting passengers stand by for an upgrade or creating a customized offer after an agent enters a client’s frequent flyer number. It’s not clear if any of these will come to fruition. Star, complaining that its members spend too much on GDS fees, formally began looking for alternatives in July. At the time, Star officials said its carriers were paying GDSs an average of about $13 per booking, but the GDS new entrants -- which Star is now calling alternative content access platforms -- were promising fees of about $1 per booking. --------- While Star will continue to use traditional GDS' this is a sign of the times. First is shows how an alliance can start to reduce costs as a group. Second this idea starts to chew hard into a cost that has simply risen and risen. GDS' make money while airlines don't - sort of the same thing as airport charges. Everyone knows that technology is about driving down costs and we have not seen that in distribution outside of airlines own websites driving down costs.

787 vs 350 - Qantas insight

The Australian -- The two manufacturers had been close on price, with discounts rumoured to be up to 40 per cent, and on the technical evaluation of their planes. But Boeing's more advanced program meant it could deliver planes to Qantas in 2008, two years before Airbus. Qantas Chief financial officer Peter Gregg says the decision could have gone either way and probably would have gone to Airbus had it been made earlier. "Boeing must have moved quite a few big boulders out of the way to suddenly give us access to the 787 far, far earlier than we ever expected we could get it. Without that, they would have been very hard pressed to have won the deal. Qantas had a dedicated team of five working full-time on the process, sometimes putting in 24-hour days, for at least six months. The airline modelled every flight of every plane for its entire life. "What we do is, we look at where we want to fly the plane, we look at the range it has to fly and the load we want to carry," says Gregg, who describes himself as a doubting Thomas who refuses to believe anything until convinced. "There are certain ways in which Qantas wants to operate and that creates a cash-flow for that aircraft on that mission. And we did that for every one of the routes that we thought these planes would fly for all the years we thought they would fly on them. That came to $80 billion worth of cash flows." When all the calculations were done, there was little between the planes in terms of cost or operating abilities. It then came down to strategy, according to Gregg. Qantas wanted to get Jetstar International up and running as quickly as possible and to give it the cost advantages of the best new technologies, including wider use of carbon fibre composites. Ultimately, according to Gregg, the weight of both those arguments tipped the decision in favour of Boeing. ------------ It happens with every sales campaign. Airbus and Boeing end up with purloined copies of the other's presentation. It is with this information that they sharpen their pencils for the next campaign. So the Qantas insight is right now being used at Singapore. Unfortunately for Boeing, its early delivery slots are limited and might not be able to be as useful in this next round. Airbus clearly has lots of delivery slots on the 350 as it has been thumped by the 787. What we find interesting (which why its in bold above) is that performance between the two planes appears really close. Neither has flown but modeling no doubt removes a lot of risk. We assume that the brain power at both companies are equal. So now we wonder - if Airbus can make its 350 as efficient as the 787 using mostly current technology, this should bode well for them. Meaning, has Boeing really made such technical headway with its 787? Other sales have mentioned the awesome impact the 787 brings in terms of lower lifecycle costs. But based on what was clearly thorough modeling at Qantas, the 787 did not come out a leap ahead. It was the earlier delivery slots that worked.

Southwest at war with Delta in Orlando

Orlando Sentinel -- Southwest Airlines and Delta Air Lines continue to battle for the top market share at Orlando International Airport, finishing fiscal year 2005 in a near dead heat. Each airline captured about 16.5 percent of the market share, carrying more than 5 million passengers, according to airport statistics. ----------- This has got to be tough. Fighting one major will take lots of time - but fighting two is a lot harder, especially when one of them is in Capter 11.

757 + winglets = Tu204

American is adding winglets to its 757s. Now they look like Tupolevs! Word is American might expand to more European cities out of Boston.

The personal computer for economy class

Readers here are familiar with our rants about the need for in-flight Internet access. You probably have also read the naysayers - its a pity they are allowed to fly at all. OK to reassure you that even in coach you can use a computer without worrying too much about space. These toys are basically laptops that fit in your hand and a cell phone is built in! So cool, sooo cool! Freedom from laptops, one less thing to carry, one less thing to break.... Look at these and dream (along with us) of getting our hands on these babies! www.dualcor.com www.oqo.com

Sauerkraut vs Avian flu

Offically not here yet, the avian flu is already proving to be good news for The Freemont Co., which makes Frank’s sauerkraut. Sales of Frank’s were up 850 percent last week alone after a report from Seoul National University that eating kimchi, a Korean cabbage dish, can help prevent avian flu. “People are stocking up on sauerkraut like bottled water before a hurricane hits,” Chris Smith, vp of marketing for Frank’s ------ If it works great - but beware that too much of this stuff will add you to the causes of ozone depletion.

Air India to Crews - Lose weight!

Guardian -- Air India has told its 1,600 cabin crew to lose weight or face being grounded. Overweight pilots and flight attendants have been given two months to shape up, said officials. The airline says other carriers follow similar guidelines on fitness and that its own rules have been applied for months, although it admits there is a push to alter perceptions that its cabin staff are tired and inefficient. The carrier did not say what constituted "overweight" or if any staff had been grounded. But a spokesman said: "Imagine if crew members can't fasten their seat belts, how can they fly?" ------ Wonderful! That policy would not go over well in the US, but it would sure be welcomed. As a passenger, it pays to listen to the announcements. Especially the part about "flight attendants are here for your safety". Next time you hear this, look at the crew you have. Then imagine these persons saving your life in an emergency. If, as has been our experience, the crew is older than you and just as unfit/overweight, then pray you don't need them. For example, you wouldn't want such a person as a lifeguard at the beach would you? Its not politically correct to say these things. But this is a blog and we are not pols. So we are on the side of airlines that have strict policies on their cabin crews being younger and lighter than most of the passengers. The most "severe" cases we have seen on US carriers have been on flights to Hawaii. The flight attendants appeared as old (or older) than our mothers, and who in an emergency, would likely need our help!

Mesa to swallow Flyi?

Washington Post -- Mesa Air Group Inc., the regional carrier that tried to acquire the parent of Independence Air two years ago, has emerged as a bidder for the struggling company, sources familiar with the situation said yesterday. If Mesa is successful in acquiring Flyi Inc. -- which filed for Chapter 11 bankruptcy protection last month -- the Phoenix-based carrier could fold the airline into its overall operations, dissolving Independence's separate identity and thereby returning the Dulles-based carrier to its original form, that of a regional feeder for larger airlines. ---------- This is the second time Mesa has shown interest and it seems this time it will prevail.

Wright Amendment/Love/DFW Update - Southwest fires back

American announced new service out of Love Field to compete with Southwest. Southwest fired back today - Southwest Airlines announced today it will expand its current ATA Airlines codeshare agreement to include ATA flights from DFW Airport to Chicago Midway Airport. Southwest Customers will be able to book transportation on ATA's three daily nonstop flights from DFW to many destinations in the Southwest system via Chicago Midway Airport with a single ticketing option and through either airline. American has a fight on its hands - a fight it lost in the court of public opinion so far. Now it will likely lose in the market as well. Thw travelers living in North Dallas must laughing at new fares and choices.

Will Airbus sell 200 A350's by year end?

Reuters -- The co-head of European aerospace firm EADS expects orders for its Airbus A350 to rise significantly before year-end, but he declined to say it would hit the company's 200 target. "We are working on it," Thomas Enders told reporters. "We are setting ourselves ambitious targets. We will come in above the (current) 164, but I cannot give an exact figure," said Enders. He said overall plane orders would slow in 2006. Airbus is locked in a fierce battle for orders for its mid-sized A350 plane against US rival Boeing's new 787, which is due to enter service two years before the Airbus plane. Boeing won a USD$10 billion order from Qantas on Wednesday to deliver 65 of the new 787s, with options for a further 50 aircraft. An Airbus spokesman said on Wednesday that Airbus had 49 firm orders for the A350 on its order book as at the end of November and that 12 customers had made orders and commitments for the plane. Asked if Airbus still targeted 200 orders by the end of the year, the spokesman said: "I believe so. The year is not over." Enders said he expected 2006 to be a good year for overall orders, but not as strong as 2005's record year. He said Airbus would have over 700 firm orders by the end of 2005. Enders reiterated that Airbus would deliver 370 aircraft this year and 400 next year. Enders also said EADS planned to pursue a strategy of making the company more international, in keeping with its global customers. In particular, he was eyeing possibilities in China, India, the United States, Russia and South Korea. --------- Its getting close and highly noteworthy is the lack of a mention about Aer Lingus - an almost certain buyer of the 350.

Boeing, Airbus and that "D" word

In their ongoing battles, Airbus and Boeing bash around the word "derivative" with some abandon. Its odd because both are doing derivatives and yet pour scorn on the other guy's "derivative". Airbus - the 350 is a derivative of the 330 says Boeing. Mike Bair from Boeing says this - "It's a brand new, state-of-the-art airplane," he said of the 787. "In some ways that's a bit ironic. In the past we've been in the position where we've been trying to figure out ways to compete with derivatives against modern airplanes. Now the shoe is on the other foot. We have a brand new state-of-the-art airplane versus a derivative of a 25-year-old design." Boeing - the 747-8 is a derivative of the 747 says Airbus. Noel Forgeard made numerous remarks about the 747 being a decades old design making it incomparable to the 380. So the truth is BOTH companies do it. There is nothing wrong with tweaking a design to extract more value - indeed this might be the most clever thing to do. So whenever you see either party use the "D" word, know the agenda and ignore the word. The Airbus 330 has been a great seller, so why not take the core idea and work it into a 787 competitor? The Boeing 747 is an icon and if Boeing can breathe more life into it, that's great.

Huge Qantas 787 order (115!)

Qantas rocked the aviation world this morning with a whopper of an order. About an hour before the announcement, it was made clear that John leahy was not going to be present and that gave away the decision. But not the size. Starting in 2008 both Qantas and Jetstar will get 65 B787s - a mix of the -8 and -9. Options for another 50 were placed. Qantas intend to fund it through cash flow. Surpisingly no 777s were ordered. This was expected and may be addressed in a follow on order - now possibly to include the 747-8. The 787 will allow Qantas to fly long thin routes - possibly Sydney-Dallas. The Qantas order forced Boeing to offer a higher MTOW 787-9, at 540,000 lb -9 will have more range than the -8 and enters service with QF in 2011. So we might consider an even heavier -10x for Emirates as on the cards. Indeed, the Qantas announcement states "Boeing is studying an extension of the 787 family. Boeing is also continuing to look for ways of enhancing further the B787's range performance". With Qantas' announcement, the B787 orders and commitments reached 374 making it by far the fastest selling widebody airplane in history.

Nigeria gets with the program

BBC -- Nigerian President Olusegun Obasanjo has ordered a major shake-up of the aviation sector after Saturday's plane crash that killed over 100 people. He has grounded two airlines and said all aircraft flying in Nigeria would undergo safety checks within a week. Mr Obasanjo also said corruption had tainted the sector, causing deaths. He had earlier angrily criticised aviation officials live on television. The crash was Nigeria's second major air disaster in less than two months. ------ Its about time too. African aviation is a poor joke and travelers deserve better.

American starts a war at Love

PRNewswire-FirstCall -- American Airlines announced today that it and its regional affiliate, American Eagle, will begin service at Dallas Love Field on March 2, 2006, with a total of 16 flights a day. American will operate four flights a day between Love Field and St. Louis, and three flights daily on the Love Field-Kansas City route, with 136-seat MD80 jets featuring first-class as well as coach service. American Eagle will fly four times a day between Love Field and San Antonio, Tex., and five times a day between Love and Austin, Tex., using 50-seat Embraer 145 Regional-Jet aircraft. "We have not, and will not, abandon our efforts in support of the Wright Amendment and all those in North Texas who want to keep DFW International Airport strong, vibrant and growing," said Dan Garton, American's Executive Vice President of Marketing. "DFW is the region's greatest economic engine and was always intended to be the home for all commercial air service in Dallas/Fort Worth. American remains intensely devoted to that principle. However, we have made it clear for many years that if Love Field were opened to longer-haul service, American must compete at Love Field in order to retain the large number of American Airlines customers who live closer to Love Field than to DFW." Garton said American and American Eagle will be devoting substantial energy over the next three months to providing a solid, professional customer experience at Love Field. American, which owns the rights to three gates at Love Field, will require two gates for the March 2 schedule, one for American and the other for American Eagle. The airline is working with airport officials on arrangements for ticket counters and other facilities with which to service its customers efficiently. The airline said it and American Eagle will be ready to open at Love Field on March 2 and will provide more details about its facilities there in coming weeks. -------- And we bet they lose. Southwest is so much more efficient and is likely to thrash American. Southwest is the underdog here - even though they are bigger at Love. Its going to be a great bash! The winners are the good people of Dallas flying to St Louis.

Airbus keeps tweaking the 350

FI -- “Using the latest computational fluid dynamics [CFD] technology, which we have verified in the windtunnel, we have reprofiled the mid-section of the upper surface of the wing,” says A350 chief engineer Dougie Hunter. “We’ve also reshaped the flap-track fairings and reduced their length using CFD analysis.” Hunter says the changes “delay the onset of drag rise and push long-range cruise speed up from Mach 0.82 to 0.83, and economic cruise speed to Mach 0.84”. -------- Airbus has yet to catch up with the 787 speed of 0.85 but they are getting closer. Since the 350 design is not frozen we can expect to see more tweaks. Their solution to putting a crew rest area under the cockpit is neat. Boeing's 787 design is frozen, but in the tradition of that company, they will also tweak and tweak - witness the 737 & 747. Recently Boeing increased the number of seats they think the 787 can handle.

A350 & B787 not a panacea

FI -- European charter carriers are split on whether new aircraft types such as the Airbus A350 and Boeing 787 are suitable to replace existing medium-range, large-capacity aircraft. Many want an advanced technology aircraft with performance similiar to that of the 757. Jeff Gazzard, director of the environmentalist lobby group Greenskies Alliance, said airlines must put pressure on manufacturers to develop “greener” types of aircraft for short-haul, high-density travel. But Sharples said Airbus and Boeing were “unwilling” to offer new designs, blaming lack of demand. ------ This is not a big airplane-buying group. Mostly they buy second hand planes. But the comments are interesting because Boeing gave up the 757 and Airbus' 321 is obviously not being considered. Even if a new technology plane were available, these airlines can't/won't afford it. The exception here is First Choice which has selected the 787.

380 speed tests - this plane hauls!

FI -- Completion of the flutter tests in November and the Vmd/Mmd test to Mach 0.96 on 1 December signalled the end of the flight envelope expansion, says Airbus senior vice-president flight test Claude Lelaie. He adds that an Vmd/Mmd attempt earlier in the flight test programme had to be aborted at M0.93 “when we detected a shockwave, but this was rectified by calibration and we have now reflown the test to Mach 0.96”. Lelaie says the A380 was dived from about 39,000ft (11,900m) and “reached M0.96 quite easily with a small rate of descent compared to other aircraft – the pitch down attitude was only 7° – which shows that its drag is low”. --------- Mach 0.96! That is awesome for a plane this size.

Lufthansa interested in 747-8

ATW -- Lufthansa "will look seriously at the 747-8," Chairman and CEO Wolfgang Mayrhuber told ATWOnline Saturday at a Star Alliance meeting in Montreal, citing in particular the decision by Boeing to offer the GEnx as the engine for the new model.The 747-8 would fit in LH's fleet between the A340-600 already in service and the A380, which arrives in a few years. Mayrhuber explained that prior Boeing proposals to extend the life of the 747 would not have made the aircraft competitive. However, "With a new powerplant [and a] small capacity enhancement, one seriously has to consider it." He added, "In fact, we wanted this airplane 10 years ago." ---------- Ten years ago Boeing was not listening to the customer like they do today. Thank you Airbus for making that happen, because McDonnell Douglas could not. More to the point, a 747-8 might not only be a good fit between the 346 and 380 - it will likely replace the 346. The 340 orders looking forward are few and according to numerous reports, the 346 has not been a great success in terms of efficiency. Fuel burn is higher than what was expected which today is a very bad thing. The airplane has a lot of additional structural weight - deadweight - to ensure the longer hull is strong. Lufthansa may be saying a bit more than first read suggests.

Northwest breaks unions

Reuters -- Striking mechanics and related workers at Northwest Airlines said on Monday they will vote on a proposal to end their nearly four month job action but there is little, if any, new work for them to claim. Jobs at Northwest that were covered by the Aircraft Mechanics Fraternal Association stood at roughly 4,400 when the strike began on August 20. But the airline continued to fly and has reduced its maintenance work force by 80 percent. The company said recently that all vacancies are filled. Northwest said it is working more efficiently, has hired less expensive replacement employees on a permanent basis, and sent more of its maintenance to private contractors. ------- Well, well. Reality does not strike (sorry) as much as bite. These workers have a lousy holiday ahead - with expensive heating costs to boot. How they must rue the day the listened to the myopic leadership. The strike has been an abject failure. No wonder the unions at other airlines are compliant - witness the turnaround with Delta's pilots. Even Korean's pilots are back at work because the government forced them. If airline start to look financially better in '06, you can bet the labor movement will agitate again. Watch airlines continue to automate ever more steps on their production process. Where they cannot automate, they will outsource.

Profits in 2006 for US carriers?

Kansas.com -- Eight airlines are flying in bankruptcy and jet fuel prices are still wrecking budgets after spiking to all-time highs this fall. 2005 marks a fifth straight year of multibillion-dollar losses. Yet there's reason for cautious hope that the worst may be over in the volatile U.S. airline business. If oil prices continue their recent trend downward and no catastrophes occur, the industry could even return to a rarely visited destination in 2006: profitability. "We're not saying things are hunky-dory," said John Heimlich, chief economist for the Air Transport Association, the trade group representing U.S. airlines. "All we're saying is that some of the indicators we look at and some of the recent trends are promising, and that's the first time I've used that word in a long time." Walloped by more than $30 billion in losses since the 2001 terrorist attacks, airlines cut more labor costs, eliminated more unprofitable routes and reduced more capacity this year. The restructuring has reshaped virtually every airline company, not just those operating under federal bankruptcy protection as 2005 wound down: United Airlines parent UAL Corp., Delta Air Lines Inc., Northwest Airlines Corp., ATA Airlines Inc., Aloha Airlines parent Aloha Airgroup Inc. and regional carriers Comair Inc., Independence Air parent FLYi Inc. and Mesaba Airlines parent MAIR Holdings Inc. It also helped produce fuller planes and much-improved operating results. Passenger unit revenue rose 4.9 percent from January through October compared with a year earlier, according to the transport association. Supported by strong demand and record air travel volumes, the carriers even managed to quietly raise prices more than they had in years without scaring off passengers. Domestic fares this fall were up more than 8 percent from a year ago, industry figures show, and experts foresee more increases ahead. "There's still a lot of pressure for fares to go higher," said Darryl Jenkins, a consultant to numerous airlines. "We've got a robust enough economy that we can raise fares, and... that will bring a lot of relief to the industry." The changes have helped the industry improve its operating results by about $14 billion in the last two years, according to Airline Forecasts LLC, a Washington, D.C.-based consulting firm. But spending a projected $9.4 billion more on fuel than last year, according to Airline Forecasts, the industry in 2005 is expected to approach its worst-ever loss, over $10 billion in 2002. "Fuel prices are the difference between record profitability (for some airlines) and a year of crappy losses," Heimlich said. The situation looked catastrophic when crude oil surpassed $70 a barrel on Aug. 31 and jet fuel reached $2.60 a gallon -- up from $1.16 at the start of the year -- a month later. Not coincidentally, Delta and Northwest filed for Chapter 11 bankruptcy in September. Vaughn Cordle, the United pilot and financial analyst who heads Airline Forecasts, said the 13 largest U.S. airlines will collectively make money in 2006 if oil averages less than $55 -- a level prices flirted with briefly in late fall. But the industry will lose nearly $1 billion for every dollar above that. Two new factors weigh on the chances of returning to profitability. Carriers' ability to hedge fuel prices has been sharply reduced by both their lack of cash and high prices. And with so many in bankruptcy or otherwise borrowing heavily to finance restructuring, they face whopping interest costs on their debts, including an estimated $4 billion in 2005. Airline consultant Robert Mann is skeptical that the recent moderation of fuel prices and increase in unit revenue signifies a turning point, noting that all other predictions of recovery since 2002 have failed. "Even if there is a slight turn-up, we're still faced with an industry which from a balance-sheet perspective is bankrupt," he said. Industry observers will be looking closely at two post-bankruptcy airlines that could set the tone for U.S. carriers next year. Experts say the integration of US Airways into America West Holdings Corp. could spawn similar airline mergers, although US Airways Group Inc. said recently that it will continue to report significant operating losses into 2006. As it prepares to exit Chapter 11 in February, United is a much leaner and more internationally focused airline than when it entered bankruptcy court three years ago. "United's going to be the story next year," industry consultant Alan Sbarra predicted. "If they got the job done, they're going to be a force to be reckoned with.... I don't expect United to have Southwest costs, but they need to get close -- to within 10 or 15 percent." ------------ In a volume business like airlines, if fuel costs can stay around $55/bb and labor costs can be kept at current lower rates and load factors stay high and fares maintain their current upward trend and an airline (or two) dissappear, the rest will be profitable. You might be aware that airline managers have been historically unable to keep any money they make - Boeing and Airbus are experts at parting airlines from their profits during the up cycles. If US carriers evn look like breaking even in 2006 you will see 787 orders as well as 350 orders. These people need new toys because the current ones are old.

Airports and Airlines fight on

There are many reports on how IATA and ACI are fighting about ever rising airport charges. Today we see easyJet going at BAA. “BAA’s allowable return on capital projects is capped at 7.75% - so it can grow its profits by increasing the scale of its investments. Put simply, it is incentivised to over-build its terminals and runway infrastructure. In the case of Stansted this is a polar opposite to the requirements of the airport users. So, we are calling on the Civil Aviation Authority to control BAA’s excesses by reigning-in their spending plans and avoiding any cross-subsidy from other London airports – if the development at Stansted cannot be self-financing, then it should not be built at all." Airlines are always going to fight with Airports. Airports hate competition and will grow so that they crowd out other alternatives. The idea of airports being owned by one entity (like BAA, and others) of course limits airport competition and puts the screws on airlines. No matter what, passengers will end up paying.

More on Northwest fleet plans

FI -- Northwest Airlines is asking for court approval of a financing package brokered with Airbus and United Technologies (UTC) that guarantees the delivery of 14 A330s and an unspecified number of new narrowbody aircraft. Under that agreement, Airbus will back the “future purchase” of “a certain number” A319 and A320 aircraft. No other details are being disclosed, and it is unclear if this order adversely affects the carrier’s talks with Bombardier to launch the proposed CSeries, a twin jet that could compete with Airbus’ A318 and A319 models. Both Bombardier and Northwest say the CSeries talks are continuing. --------- The 330 deal was announced earlier but the narrow body deal is news and, of course, the C series has to be up in the air (pardon the language). But it is amazing that Northwest is thinking about growth.

SAA - more fuel screw ups

Flights from Cape Town International Airport have been delayed by up to five hours due to fuel shortages, airport officials and local media said on Saturday. All flights from Cape Town have been asked to reload at nearby airports after suppliers were unable to deliver enough fuel on Friday night, Airports Company South Africa (ACSA) said in a statement. "Flights that arrived in Cape Town are having to fly empty to Port Elizabeth to refuel (and) come back to Cape Town to carry the passengers. Flights have been delayed by up to four or five hours," an official from budget airline One Time told SABC radio. ---------- Imagine the economics of this. Can these people do nothing right? Remember this is (by far) the most sophisticated economy in Africa.

Man subdued on Hawaii flight

HonoluluAdvertiser.com -- Passengers and crew aboard a Northwest Airlines flight last night from Los Angeles to Honolulu overpowered an unruly passenger who threatened a sleeping baby girl, said passengers and officials yesterday. -------- If you want to behave badly on a US-airline flight, pray there is no marshall on board. You will be shot. Other than that, there are literally millions of American men who fly and are eager to "subdue" an unruly passenger. Our continued thanks to the heros on United flight 93 who showed us the way.

FCC Refines Air-to-Ground Auction Terms

wifinetnews -- The FCC has moved closer to auctioning four megahertz in the 800 MHz band for air-to-ground telecommunications and data: This auction is being closely watched as it will pave the way for domestic U.S. data and cell calls in the air being a much cheaper method of relaying than via satellite. The order released today doesn’t set a date, although May 2006 is likely based. The executive summary of today’s order: Realistically, it pushes back the practical deployment of cell-based voice and any pure data in domestic aircraft to terrestrial stations from mid-2007 to mid-2008, and almost certainly no earlier, unless Verizon Airfone wins all the licenses and is able to complete a transition much faster than it now says is possible. One month ago, the four operators (AirCell, Connexion by Boeing, OnAir, and Verizon) were expecting a mid-2007 launch based on a mid-2006 auction. -------- Verizon has a lock on much of this market - because of its financial muscle and it currently occupies all 4 MHz for its underused phone service. Delays by the FCC are awful and with hold from air travelers the ability to be useful and productive while flying. So if you are a Verizon user, maybe you want to think about picking up a neat PDA-phone in 2006 so that you are ready for 2007.

Korean pilots strike

AP -- Korean Air Co. announced more flight cancellations Thursday on the first day of a strike by unionized pilots at the nation's largest passenger airline. Park Byung-ryul, the union's spokesman, said 1,344 of the airline's 1,980 pilots belong to the organization. He said about 500 union members had gathered near Incheon International Airport west of Seoul shortly after the strike began. Unionized pilots at the carrier, the world's largest transporter of cargo, walked off the job just after midnight in a bid to pressure management to accept their demands for an 8 percent hike in annual wages. The airline is offering a 3 percent increase. In 2004, captains earned an average of 120 million won ($116,000) in annual pay, according to the airline. First officers earned 88 million won ($85,000). --------- Given the airline business environment, you would think these are nice paying jobs and incumbents would want to keep them. You would think. But of course, unions being unions, its always better to squeeze harder. Korean Air should fire the lot and hire pilots from elsewhere. Korean Air pilots are famous for their lack of skill (check the crash stats). Many of them are probably not worth keeping anyway.

Row 44 - New IFE player

Row 44 Announces Strategic Relationship with Hughes Network Systems Row 44, a provider of data communication services and equipment to the aviation industry, today announced an agreement with Hughes Network Systems (HNS), the world’s leading provider of satellite broadband solutions, to bring broadband connectivity to North American commercial and business aircraft. More at http://www.row44.com

US watchlist 80,000 names long

AFP -- A watchlist of possible terror suspects distributed by the US government to airlines for pre-flight checks is now 80,000 names long, a Swedish newspaper reported, citing European air industry sources. The classified list, which carried just 16 names before the September 11, 2001 attacks in New York and Washington had grown to 1,000 by the end of 2001, to 40,000 a year later and now stands at 80,000, Svenska Dagbladet reported. Airlines must check each passenger flying to a US destination against the list, and contact the US Department of Homeland Security for further investigation if there is a matching name. The list contains a strict "no fly" section, which requires airline staff to contact police, and a "selectee" section, which requires passengers to undergo further security checks. Some 2,000 passengers checking in at Stockholm's Arlanda airport have had to be cleared with the US authorities because of name matches on the "selectee" list this year, although none was prevented from boarding, Svenska Dagbladet said. ------ This list demonstrates two things to us. 1. It is dynamic and changes as new information is discovered. (Good) 2. There has been no successful attempt on a US aircraft since 9/11 (Very good) Concequently, if airlines and GDS data sources were to scrub passenger names against this list we could keep flying safe from the crazies. In a survey conducted by IAG 48% of respodents are in favor of these checks at least a day prior to the flight. If you want to see the preliminary results (the survey is still live) use this link please.

320 & 737 Replacement hint?

Reuters -- Pratt & Whitney jet engine unit said on Thursday it expects to have an engine ready by 2012 for the plane that will replace Boeing's 737 jet. We've had ongoing discussions with Boeing and Airbus, "and the best time to introduce a new product is 2012", Pratt & Whitney President Louis Chenevert said at the Reuters Aerospace and Defense Summit in Washington. ---------- Its reasonable to assume that both Airbus and Boeing are speaking with engine makers about their needs way ahead on the planning cycle. Therefore, it is reasonable to assume that both are thinking of replacements for their narrow bodies around 2012. Pratt has to win something because they have gone from leader to #3 out of 3. This is not posturing buy its President. Within Pratt, the decision not to make an engine for the 737-300 and newer must burn every day. Thye won't make the same mistake again.

Northwest goes ahead with remaining 330s

Northwest Airlines announced its board of directors approved agreements reached with Airbus and Pratt & Whitney for the two manufacturers to continue delivery and financing of all of the remaining 14 A330-300 and A330-200 aircraft it has on order. Airbus has agreed to finance 10 of the 14 A330s, and Pratt & Whitney will finance the other four. The aircraft are scheduled to become part of Northwest’s fleet during 2006 and 2007. ------ Must have been a really good deal to be concluded in the midst of Chapter 11!

An American Virgin

PRNewswire -- Virgin America Inc., a new U.S.- based airline start-up company, announced today that it has secured $177.3 million in committed funding led by VAI Partners LLC, an investment group funded by U.S. investment firms Black Canyon Capital and Cyrus Capital Partners. This funding transaction is among the largest of any start-up airline in U.S. history. The airline also announced that it has submitted its application for certification with the Department of Transportation (DOT) to operate as an interstate scheduled air carrier. For the complete Virgin America application, go to DOT's online docket at http://dms.dot.gov. ------- After dancing around Flyi (was that real or fake?) it is now becoming more clear what Mr. Branson's plans are.

Missing Egyptian Sought in US

ABC -- Officials say a 50-year-old Egyptian man was stopped six days ago at New York's John F. Kennedy Airport. Sources say he had a suspicious pair of shoes that tested positive five times for the explosive substance TATP on the interior of his shoes between the heel and sole. Federal officials say the man's shoes are remarkably similar to those used by shoe bomber Richard Reid, who attempted to blow up an American Airlines jet over the Atlantic four years ago. The Egyptian man's destination was Des Moines, Iowa, sources say, and he claimed he was a student at Iowa State University in Ames. Strangely, after holding him overnight, airport security in New York released him. The FBI was notified after he was released. Now the FBI has put out a nationwide alert. --------- "Airport security" released him! Does this mean TSA? That is question #1. Question #2, a 50 year old studying at Iowa State? Can you imagine such incompetence. Your safety, dear traveler, is in the hands of fools.

Air Marshal Kills Man Who Made Bomb Claim

This story is all over the web today, as it was yesterday. Rather than post this news we can summarise one positive outcome. We realize the man may have missed his medication. He might even have been ill. Maybe outside an airport his behavior could have been dismissed as "nuts" and safely ignored. But he acted weird inside an airplane. He acted weird inside the airport. He made a remark about a bomb which is a threating remark inside an airplane or airport. The marshall did exactly what he is trained to do, which is eliminate the threat. Had there really been a bomb, which exploded in either the plane or airport, we would expect to see dozens (maybe a hundred?) dead. We live in a time where such behavior is beyond tolerance. The marshall acted correctly (based on the facts so far). So the good news is this - Anyone who has any thoughts about threatening a flight should know the outcome if a marshall is present.

UK Court Rejects DVT Claim Against Airlines

Reuters -- Britain's highest court on Thursday ruled against victims of Deep Vein Thrombosis (DVT) who had been seeking compensation from British Airways and other airlines. A group of eight people alleged airlines failed to warn them that the combination of cramped flying conditions and long hours in the air could give rise to DVT, or blood clots, which can be fatal. However, Britain's House of Lords said the events which caused DVT could not be classified as an accident under the Warsaw Convention governing air travel, upholding an Appeals Court ruling. Airlines would have faced huge damages claims if the claimants had won. "It is an integral part of the test of what amounts to an accident that it must have a cause external to the passengers. In the case of DVT this factor is absent," Lord Steyn told the court. British Airways, the only airline named in the latest claim, welcomed the ruling. "This means that the decision is final and no claims for injury or death caused by DVT during the normal operation of an aircraft can now be brought against airlines in the UK," BA said in a statement. DVT made international headlines and airlines came under pressure to do more to prevent the condition after reports a British woman died from the condition on a 20 hour flight five years ago. Studies have shown up to one in 100 long-haul fliers could develop blood clots. The airlines say the Warsaw Convention protects them from having to pay compensation to passengers for medical problems arising from the normal operation of an aircraft. They say it limits compensation to being payable only in respect of accidents. The original claim involved 24 victims suing 18 airlines throughout the world but the numbers were cut back. -------- Not too much of a surprise really. But the 1% number jumps doesn't it? If we knew the 1% of longhaul fliers had heart attacks this matter might not be easily dismissed. So there is a cause and effect at play. More studies need to be done, we think.

Delta Pilots Consider Strike

Report 1 -- Delta Air Lines Inc. pilots may consider a vote to strike if the bankrupt airline's managers impose changes on their contract, a pilots union spokesman said Wednesday. The airline has asked a bankruptcy judge to let it scrap its current contract with pilots, as part of its efforts to emerge from bankruptcy. Delta, besieged by rising fuel costs and stiffer competition, filed for bankruptcy protection on Sept. 14. Report 2 -- Pilots at Southwest Airlines Co., already the most productive in the industry, will be getting even more efficient. The Dallas-based carrier has struck an agreement with the Southwest Airlines Pilots' Association to have each pilot fly 1 ½ additional hours each month. That would save Southwest roughly $4 million annually, because the discounter won't need to hire as many pilots as it expands its schedule about 10 percent a year, the union said. As other carriers seek to improve productivity, the move could enhance Southwest's already considerable advantage. ---------- The differences are stark. The pilots at Delta probably think that by threatening to do a kamikaze on their employer they will win. If a strike occurs at Delta, it would devastate the airline and the ripple effects on the economies at places like Atlanta, Cincinnatti and parts of Florida would be huge. Travelers would find seats somewhere else. The pilots would not find jobs as easily. Moreover, these pilots might be tainted in other ways, too. Truth is, the US airline industry might be better off witout Delta's capacity. Load factors would shoot up, as would prices. The loss of Delta would make US Airways look a lot better. American and United would also see big gains. AirTran would be overwhelmed with customers. The other majors, in other words, potentially could swoop in the handle the traffic if Delta fails. In fact, losing Delta might help other airlines come out of Chapter 11 a lot faster. We wonder if Delta's pilots see the world as others do.

Connexion unravelling?

We hear weird rumors about Boeing regarding its Connexion operation as a "failed" enterprise. Seems Connexion is having a tough time increasing its footprint. The fleet is nowhere near the original plan – there are about 200 planes instead of over 1,000. Worse, the initial interest from American carriers may have seen some posturing - one senior person at the launch was heard to say his airline was there only to be seen as they had no interest. Now we hear that the antenna used by Connexion has issues. It apparently creates more drag than was expected. Boeing may have used a military antenna that worked OK and thought they could use it for commercial aircraft. It seems to have worked, sort of, but not good enough so they tendered for a new antenna. It appears Mitsubishi got the nod. But this has proven to lose connections more frequently than expected. Your correspondent lost a Skype call to a Lufthansa flight from FRA to DEN two weeks - ago right in the middle of the call, 36,000 feet over Manitoba. We hear that Lufthansa has not been impressed with the call drop rate or the level of use. The highest use flight seems to be the SAS flight between Copenhagen and Seattle - the "Microsoft Express". One such flight saw 50 simultaneous users on a 275 seat Airbus 340. It is unclear if Connexion has a rock-solid spectrum allocation and might still be experimenting. We hear the spectrum Connexion is using may be approved for fixed installations, not moving platforms like aircraft. We believe there is some sort of problem with signal spill-over from the Connexion antenna that was a major part of its sale to the FCC and other spectrum allocators. To reiterate, these are rumors we hear while out and about. Nobody will say anything on the record.

Qantas induced anxiety

Boeing and Airbus executives have been left waiting on a knife-edge after the Qantas board decided last night to withhold any announcement about its plans to buy up to 100 new aircraft in a multi-billion dollar fleet upgrade. An all-day meeting of the 12 directors, billed as one of the most significant in the airline's 85-year history, ended with both companies advised not to expect a decision before today. ----- Keep chewing on those anti-acids gents. The Aussies are going to squeeze you much harder than any of us thought.

Airborne Internet

ATW -- FAA awarded a $1.35 million contract to AeroSat Airborne Internet to demonstrate and evaluate basic concepts and components of the Airborne Internet System. The one-year contract calls for AeroSat to conduct Airborne Internet flight demonstrations on FAA aircraft. Data will be exchanged between the air and ground at 45 megabits per second then passed from aircraft to aircraft, "exhibiting a full range of communications that previously have required the use of satellites." ---------- This might be very cool. With ~ 1200 planes in the sky over the US every day, there could potentially be lots of nodes aloft at any time.

Complaints up big time

WSJ -- Complaints about U.S. airlines have jumped more than 29 percent this year, according to the Department of Transportation, with big increases in canceled flights and baggage problems. So far this year, US Airways has the most complaints per passenger, while Southwest Airlines has the fewest. The biggest complaint has been flight problems, which include cancellations, delays and missed connections. -------- No shock here - with most of the airlines in Chapter 11.

Finnair buys Airbus

FINNAIR COMMITS TO GROWTH WITH LONG-HAUL FLEET MODERNISATION Finnair is to acquire 12 new Airbus wide-bodied aircraft, as it modernises its long-haul fleet. Of the aircraft, nine are A350s and three are A340s. Owing to strong growth in Asian traffic, the A340 aircraft will be acquired earlier, in 2007-08. The Airbus A350 is a new type of aircraft and the first of them will join the Finnair fleet in 2011. The value of the order will amount over one billion euros. --------- Ever closer to Mr. Leahy's target of 200 A350s by year end. But a few more words. Finnair has always been loyal to one brand. It used to be to McDonnell Douglas. Then they tried Airbus and no surprises they stayed. A consideration is in order though - the A340-300E is a byproduct of the A330/A340 line, and can be built cheaply. But it is now clearly outclassed compared to current 777s in performance. With Boeing aggressively pricing their 777s the A340-300E has been relegated to the same status of a "has been". So one has wonder what other decisions went into this order. Perhaps Airbus was being very creative.

USA prepares for Avian pandemic

Breitbart.com -- The federal authorities are preparing to face a possible avian flu pandemic in the United States by contemplating a worst-case scenario, under which more than 92 million people will become ill in the space of four months, US Health and Human Services Secretary Mike Leavitt said. The projections are based on the 1918 Spanish flu epidemic that killed about 50 million people around the world and emerged as the most serious pandemic of the 20th century. "The reality is ... pandemics happen," the secretary said. "When it comes to a pandemic, we are overdue and we are underprepared." ------ Yikes!

China's 150 Airbus 320s - another perspective

Reuters -- China signed a deal on Monday to buy 150 single-aisle passenger jets from Airbus, worth $9.7 billion at list prices, in a boost for the European planemaker in its battle with US rival Boeing. ---- This was an unexpected buy and rippled around the aviation world. But don't lose sight of the much bigger order ($15bn) due any day now - Qantas. Boeing can actually afford to ignore the China deal for now, because if they win at Qantas like they did at Cathay, then the tables turn again but in a much more important way. Qantas' order will be for big jets - probably 777s & 787s. If Airbus were offered the China 320 deal or the Qantas deal, we bet they would prefer Qantas. The Chinese will order from both Airbus and Boeing because they have to and want to play one of against the other. Chinese airplane purchases are not made so much for commercial reasons as much as political reasons. EADS attempts to build 320s in China will not go down well with their own staff in Germany and France.

SAA sends itself fuel by road to Zimbabwe

news24.com -- In order to prevent its aircraft from running out of fuel in Zimbabwe, South African Airways is transporting jet fuel to Harare and Victoria Falls by road from Durban. Sarah Uys of SAA said the situation in Zimbabwe had forced the airline to take its own "strategic fuel supply" to that country. "We buy fuel at BP's Durban refinery and transport it by road to Harare and Victoria Falls, from where it can be delivered to our aircraft if necessary." -------- Trucking your own fuel for about 1,000 miles. You have to wonder, why bother to fly there at all?

Familiar faces fix NWA's planes

Detroit Free Press -- More than half of the replacement mechanics now employed by Northwest Airlines worked at the airline before the mechanics union called a strike Aug. 19, the company revealed Monday. The current workforce of 880 mechanics includes 280 workers who crossed their union's picket lines and 200 mechanics who were furloughed from their Northwest jobs in the months and years before the strike. The Aircraft Mechanics Fraternal Association refers to union members who have returned to work as "scabs." A "Wall of Shame" on AMFA Local 33's Web site features photos of more than 70 members who have crossed picket lines. The union's site lists the names of 249 "confirmed scabs." "We haven't lost faith at the picket lines," O.V. Delle-Femine, AMFA's national director, said Monday afternoon in a phone interview. ------ Of course they have not lost faith - they lost their jobs! How dumb can you be? Its a global economy and just about every job can be outsourced. With the big auto companies closing factories in the midwest, one would think these folks see the writing on the wall

Recent Connexion PowerPoint - interesting views

Please use this link to download a PowerPoint file. This was presented in June. Click

Bifurcated IFE markets

Airfax -- Consider two of the biggest factors in new aircraft IFE: the single-aisle, connectivity-driven IFE issue and the wide-body hub bypass driven IFE. Market growth for single-aisle aircraft continues to out pace wide-body planes in sheer numbers, but as you might have deduced, for obvious reasons the value of contracts is 2 to 3 times larger for the wide-body planes. The existing single-aisle-market is crowded with some 10,000 plus modern commercial jets, inventoried at the end of 2004. This excludes regional and smaller aircraft but we do not rule them out for IFE. Growth in the narrow-body sector will be driven by the fact that over 90% of the departures will be happening in single-aisles during the next 20 years. This market should hold interest for IFE vendors, but these aircraft are used on very short flight segments (mostly under 1 hour), and IFE is a hard sell based on in-seat time and the difficulty interacting with a laptop-based data or entertainment system. Interestingly, the longer route growth rate is increasing driven by newer technology jets, increasing flight time, sometimes up to as much as 5 hours! Consequently, there are really 2 market subsets which have evolved for the single-aisle one long range driven and one for shorter flights. In summary, IFE for the short-haul travelers is one category that remains mostly limited to overhead video (if any) while longer-haul travelers on flights over 3+ hours are frequently experiencing in-seat distributed video and broadcast television. Most industry watchers conclude that the short-haul IFE market is tough because of the need based on limited flight time. Marketers state that because of the reduced passenger/airline interaction, IFE is not experiencing robust sales in this segment. While portable IFE has made some inroads in this area, fixed applications of portable devices may be the next thing. However, we see another solution on the horizon. This new solution would defined by easy to use, ground-connected, Wi-Fi enabled devices that passengers bring aboard. The next generation of mobile phones (Smartphones) will provide this solution and deliver entertainment will on a properly equipped plane. Telephone brought to the airplane from either ground or by sitcom. Two developments must happen first: The rollout of Smartphones (done) and a solution to the connectivity problem must be solved (in-work) The folks who bring you Connexion will call it done, however. You will need easy access to a diminutive device to use on the smaller, space limited aircraft and the intelligent phone delivers that solution. Screens will have to get a bit bigger, and GSM/CDMA/Whatever high-speed service will have to be delivered to the plane, and finally, the ground infrastructure must be in place. Wi-Fi will no doubt, be the protocol of choice if wireless telephony via picocell. We expect the Verizons, AirCells, and Boeings of the world to jump on the upcoming FCC frequency auction because they see this market coming. The growing longer-range, single-aisle market is presently being served well by the Thales, Rockwells and MASs of the world. They have been developing lighter weight, lower power, smaller, installed IFE systems that use, high-speed, networked, digital, entertainment. Both companies seem to have wireless applications in development which may give the installed portable products a real challenge. In both cases, ease of installation and minimum impact on the plane and its performance is a necessity and single-box solutions have an upper hand. In conclusion, unless a new paradigm is found, the longer range single-aisle market will continue to belong to the major vendors. Because the single-aisle fleet occupies the largest part of the current jet plane inventory, the subject of retrofit is very important and the ease of installation and cost will determine if airlines get interested. JetBlue proved TV is a passenger driver and is now offered by the major vendors but at a challenging price. Southwest is example of a US airline waiting for the right technology to come along and at the same time be compatible with their business model. It will be interesting to see if they look toward connectivity for a solution. No doubt airlines like Ryanair in the UK and others who fly over land routes will be candidates for some new infrastructure, however, TFTS suffered a fate that may prevent interest by other international applications and possibly leave their connectivity to satcoms or onboard server approaches Many airlines will be watching the US but unless the US airlines become more profitable, nothing will happen here. It looks like US connectivity will be one of the most important drivers for IFE in the foreseeable future based on aircraft, technology, and demand. --------- An excellent summary of where we stand. Despite the bad news in the US, we think pretty soon a US airline will in fact deploy in-flight wifi. When they do, the others will follow because that is what oligopolies do. We are betting on jetBlue and will not discount Southwest.

China orders 150 Airbus

AP -- China ordered 150 Airbus single-aisle A320 airliners Monday, more than twice as many plane orders than the company’s U.S.-based rival Boeing Co. snagged from China last month. ------ Wow! They must be expecting huge growth.

More Zimbabwe news

ZWnews -- Airlines flying into Zimbabwe are now carrying their own extra fuel to avoid being grounded in a country reeling from a long-running fuel crisis. The move demonstrates the regional effect of Zimbabwe’s fuel shortages as well as the contagion of the country’s economic problems. Airlines flying to Harare such as British Airways (operated by Comair in SA) and South African Airways (SAA), and also small carriers such as SA Airlink and kulula.com, are now relying on contingency plans to avoid being grounded in Zimbabwe. -------- African travel at its best.

Record flight had record cell use

Shepard -- During last week’s record-breaking Boeing 777-200LR flight from Hong Kong to London more than 11 hours of cellphone usage - comprising 285 air-to-ground calls, 50 ground-to-air and 300 text messages - were logged during the flight. ------- This from only 35 people. Of course this use was exaggerated because of the event. But it shows where in-flight communications are going.

LAX scraps expansion plan

ATW -- Plans to expand and update Los Angeles International Airport have been scrapped as part of a settlement with local civic groups and neighbors who have fought for years to stop the development.After spending 10 years and $150 million to create the LAX Master Plan, airport officials threw in the towel on the ambitious $11 billion development project. Final ratification of the proposed settlement is expected within the next six weeks. In return for certain conditions being met, citizen groups, neighbors and local officials who have dogged the project since its inception agreed to drop further litigation, according to a joint statement issued by the mayor's office and Los Angeles World Airports officials. The tentative settlement, which must be approved by local and federal officials including FAA, will cap growth at LAX at 75 million passengers--it handled 60.7 million in 2004--reduce traffic congestion, furnish soundproofing to nearby homes and allow rebuilding of the south runway to improve safety and reduce incursions. Also, LAWA will provide $266 million over the next 10 years to Inglewood, Los Angeles County, El Segundo and the Alliance for a Regional Solution to Airport Congestion for traffic and noise mitigation, streetscaping and job training. The settlement calls for LAWA to supply an additional $60 million to be spent on "various air quality and environmental justice programs." "I am elated that at long last we have the ability to move forward with a rational, community-sensitive plan for LAX that allows for sensible improvements for the people of Los Angeles and millions of world travelers who depend on it," said Mayor Antonio Villaraigosa, who spearheaded the settlement efforts. Future plans for airport construction will be "consistent with the Mayor's vision," according to his office and LAWA. -------- So LAX is near max capacity and can't grow beyond 75m pax annually. Very interesting. People keep flocking to Southern California - so how will this work? LAWA "owns" Ontario airport which is located in Ontario, but actually this is now better described as East LA. With the two longest runways in California, ONT should be a gateway airport. LAWA has kept all the best service in LAX. ONT is used by UPS for its China service. So expect to see UPS A380s at ONT. But besides domestic service at ONT, there is not much else - for which LAWA thinking is to "blame". The city of Ontario cannot get its airport back from LAWA now. If they could, they would find the State's Tourism officials heartily backing the need for another gateway airport to California. San Diego won't work because of its nearly fifty (yes 50!) years "studying" where to locate a new airport. San Diego is now bigger than San Francisco, but you would be hard pressed to realize it becuase of local political myopia. Like water, airports are big trouble in the Golden State. The term NIMBY was coined here - "not in my backyard". San Diego wallows in the shadow of LA with few growth prospects, and its larger cargo gets trucked to LAX. Ontario is dominated by LAX and has to now wait for the 75m cap to kick in before its sees serious growth.

Chinese Airbus?

Reuters -- Airbus agreed with Chinese Premier Wen Jiabao on Sunday to study the possibility of setting up an assembly line in China -- a move that could see its jets being built outside Europe for the first time. Wen signed an agreement to carry out a feasibility study for the project at the start a European trip expected to unlock provisional Chinese orders for 70 A320-family single-aisle Airbus aircraft worth $5 billion. Airbus and Chinese authorities will review over six months whether to set up a second A320 assembly line in China. --------- With high unemployment in Germany and France, this idea will go over real well. This kind of thinking will lead to a political upheaval in these two nations. Business as usual, of course, for politicians out of step with the common people. perhaps what they should try over there (and even here in the US) is outsource the politicians. Now there's an idea.

The next threat - DVT

Reuters -- Britain's highest court said on Friday it would rule next week on whether victims of Deep Vein Thrombosis (DVT) can claim compensation from airlines. Britain's House of Lords will give its decision on December 8 in the landmark test case to determine the liability of airlines for victims of the potentially fatal condition. A group of eight people are seeking to sue British Airways and other airlines for death and injury which they say was the result of DVT, or so-called economy class syndrome, stemming from air travel. The claimants took their case to Britain's House of Lords after earlier court rulings barred them from suing some of the world's largest airlines. If they win the case, airlines throughout the world may face huge damages claims. The claimants are challenging an Appeal Court ruling that DVT could not be deemed an "accident", according to the 1929 Warsaw Convention governing air travel. After considering the case for nearly two months, the law lords on Friday said they would give their decision on Thursday morning next week. The case hinges on the meaning of the word accident in the eyes of the law. The Appeal Court in its decision now being challenged held that DVT was not to be classed as an accident, and in those circumstances was blocked by the provisions of the 1929 Warsaw Convention in respect of claims against airlines. The original claim involved 24 victims suing 18 airlines throughout the world but the numbers were cut back. BA was the only airline named in the House of Lords claim. The airlines claim the Warsaw Convention protects them from having to pay compensation to passengers for medical problems arising from the normal operation of an aircraft. They say it limits compensation to being payable only in respect of accidents. However, the claimants alleged the airlines failed to warn them that the combination of cramped flying conditions and long hours in the air could give rise to DVT and say that in the circumstances they should be allowed to claim. --------- SARS, Avian flu and now this. Maybe you will only be allowed on a ultra longhaul flight in an economy seat if you provide the airline with a current medical report.

Jakarta - Avian Flu "all over city"

Post Chronicle -- In Jakarta, the Indonesian capital, officials admit that "it's very serious. Based on our research, the virus has spread all over the city." In one province, a man was taken to the hospital when saying he had a high fever, the AP reports. He was then taken to isolation. However, he said he needed to get some personal belongings back at his home. He left the hospital and never returned. Before leaving hospital care, he informed the staff that he had become ill after he had slaughtered his bird flu sick poultry. More than millions of birds have been killed in Indonesia due to the infection. ------- Regular readers have heard our oft repeated line on this matter. Be very afraid. The pandemic is coming. Travelers are going to spread this faster than any previous pandemic. Numerous airports have set up quarantine areas. Now you know why. Gateway airports will be the first spots this panedmic comes from, not migrating birds.

SAA U-Turn!

The Post (Lusaka)-- Passengers aboard an afternoon flight on a South African Airways (Flight SA 64) plane from Johannesburg on Tuesday were furious after the plane U-turned 40 minutes after take-off. According to some passengers that were on the plane, the decision to fly back to the airport was prompted by the fact that some 42 passengers who were booked on the same flight were mistakenly left behind after an airport transfer bus took them to a wrong plane. The plane's captain was contacted about 40 minutes after take-off to fly back to Johannesburg and pick up the passengers. According to passengers, the captain was apologetic and said it was the first time that such a thing had happened in his career. Under normal circumstances, a plane would only fly back when it has a fault or when there is bad weather. The plane was scheduled to arrive at Lusaka International Airport at 13:30 hours but it only arrived at 15:00 hours after a delay of about one hour at Johannesburg International Airport. -------- Now realize this screw up happened in South Africa, which is by far, the most developed nation in Southern Africa. Meaning, even in Zambia they would not make a mistake like this. It might happen in Zimbabwe, except they have no fuel, so their airline is not flying. Maybe flying is just too much for Africa. Sorry, by I am rolling on the floor laughing at this story.

A350 vs. B787 - Dec 1st order score

A350: 11 customers for 155 aircraft B787: 25 customers for 309 aircraft Next week Qantas is expected to place its huge order (~US$15bn) with consensus that Boeing will strike gold again. If Qantas goes for the 777/787 combo like Air Canada did, then the scores above change big time.

Southwest Announces New Nonstop Service From Dallas Love Field to Kansas City and St. Louis

New Law Makes St. Louis and Kansas City Southwest's First New Nonstop Routes From Love Field in 25 Years DALLAS, Dec. 1 /PRNewswire-FirstCall/ -- President George W. Bush recently signed a transportation appropriations bill containing language that exempts Missouri from federal restrictions placed on Dallas' Love Field airport. This exemption now makes it possible for Southwest Airlines, the signature carrier at Love Field, to initiate new nonstop jet service from Dallas to its Missouri operations in Kansas City and St. Louis. Southwest will start service to St. Louis and Kansas City from Dallas on Dec. 13, 2005, with four daily nonstop flights to each city. The one-way fare from Dallas to either city will be just $79 with 14-day advance purchase. The unrestricted "walk-up" fare is just $129 each way, compared to fares as high as $599 each way on American Airlines. "Southwest Airlines has served Missouri for more than 20 years but Congress has prevented us from offering low-fare service between Missouri and our home airport at Dallas' Love Field," said Herb Kelleher, Southwest's executive chairman and co-founder. "Missouri has been punished far too long by the resulting high-fare monopoly. We are delighted by Senator Bond's efforts to wipe out the last vestige of airline regulation for the people of Missouri." Under the leadership of Senator Christopher "Kit" Bond (R-MO), Missouri has been added to the list of states eligible for nonstop commercial air service from Love Field. Since 1979, nonstop service from Love Field has been restricted to Texas and its four surrounding states due to the Wright Amendment, named for then-Speaker of the House Jim Wright who sought to protect Dallas/Ft. Worth International (DFW) Airport. In 1997, Senator Richard Shelby (D-AL) succeeded in adding Alabama, Mississippi, and Kansas to the list. The "Bond Amendment" of 2005 allows competitive air service at Love Field to reach one state further. "When these two Missouri airports gain new Southwest Airlines service, history tells us that airport traffic will increase as more people are able to fly at a lower price," Kelleher said. A study by the Campbell-Hill Aviation Group, commissioned by Southwest Airlines, predicts nearly 500,000 additional Missouri passengers per year will be generated through fare savings estimated to be more than $77 million. The US Department of Transportation calls this well-documented stimulation of passenger traffic through low fares the "Southwest Effect." Campbell-Hill also predicts an additional $218 million per year will go to the Missouri economy in related spending. All eyes will be on Missouri to see if the venerated "Southwest Effect" takes hold in an established market. History, and Southwest Airlines, say that it can. "They don't call Missouri the 'Show Me State' for nothing!" Kelleher said. "The push from Missouri allows us to create a competition laboratory, if you will, to prove our case. Our experience in 60 other markets tells us that all carriers serving these markets will decrease their fares and increase their Missouri traffic. I can't think of a state that wouldn't want that." ---------- Lets hope the rest of the Wright Amendment goes away too. DFW and American don't need this protection any more.

BA to slash one third of managers

British Airways is re-structuring its business with a 35 per cent reduction in the number of its 1,715 managers by March 2008. The figure comprises a 50 per cent reduction in senior managers, from 414 jobs to 207, and a proposed 30 per cent reduction in middle managers from 1,301 jobs to 911 jobs. This brings the total number of job cuts to 597. ---------- In IAG's survey on the need for pilots; on the question of where to cut airline costs respondents so far appear to generally endorse Mr. Walsh's decision. Survey here Results here

Cathay Pacific Places Biggest Ever Order For New Aircraft

The airline has made commitments for 16 advanced wide-body Boeing 777-300ER aircraft with purchase rights for 20 more. It also made commitments to acquire three Airbus A330-300s to operate regional routes. ------- Being truimphs again with the 777-300ER and the loser in this case is the 340-600. Cathay has tended towards 4 engines over water so this is quite a radical decision. It also appears to affirm that airline managers believe fuel costs are not coming down enough to go with 4 engines.