Its true - Biden is thicker than Bush

We kind of like to stick it to every pol, but Joe Biden is special. The man is a first class dufus. Why he was voted into office we can't figure out. Moreover proof of his intellectual challenges have to be his long time in office and his apparent lack of wealth.

Still don't think he has a two by four for a brain? Then read these links.

Reuters: Biden - swine flu comments prompt clarification AP: Biden tells family to stay off planes, subways Politico: Biden would avoid subways, planes after swine flu outbreak ATA's response

In other news --

• GoGo looks over the water
• Row44 wins Norwegian
• Dutch drop ticket tax
• Ryanair in the news again - hunting for the money

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A new African airline

With its economy distinctly cut off from the bigger western economies and its banks not involved with any of those nasty financial devices that nailed Wall Street and The City, Africa is doing quite well for now. An old British hand at the African mining game, Lonrho (it used to be London-Rhodesia which tells you how old the firm is) has airline plans for Angola.

This airline is called Fly540. Lonrho received an air service license in Angola for Fly540. Lonrho will initially deploy two new ATR72 to establish the primary routes, and would deploy another two in the second half of the year as more traffic volume is expected, it said in a statement. Fly540 plans to fly in 15 countries by the end of 2010. It currently flies to three with two more in the works. This is a very ambitious plan for a small carrier. Readers will note they are staying well away from South Africa.

In other news --

• Straits of Hormuz becomes a hotpsot
• The (Irish) sky is falling
• The Indian airline that could
• Loren Thompson makes a case for a split buy on tankers

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737 redux

As many of you will have seen on Jon Ostrower's blog by now, Boeing is once again tarting up the old girl. There are two primary items "the new, spacious 737 Boeing Sky Interior" and a 2% improvement in engine performance.

The former is a 787 bandwagon special - much the same as has been given to the 747-8 interior. We think that targeting a 2% reduction in fuel consumption by 2011 through a combination of airframe and engine improvements is much more interesting. Take a look at this table. As you can see the Airbus single isle family and the Boeing single isle are really close in fuel burn. For the sake of the comparison, ignore the A318 as we don't have 737-600 data to compare with. Now if Boeing can cut fuel burn by 2% then, for example, the 737-800 goes down to 6 compared to the 5.9 of the Airbus. Of course Airbus can use the same CFM technology and improve also - but Boeing is claiming "structural improvements will reduce drag on the airplane, reducing fuel use by about 1 percent" which Airbus would have to mimic to stay ahead. Adding winglets could make the A320 family a lot more fuel efficient you'd think and AP is working on that and would not say a word to us about it.

So after all the hoopla about an RS, both firms are eking out marginal performance improvements.

In other news --

• Swine flu numbers start to get scary
• Gatwick sale flops
• US demands secret document from BA - Virgin's fingers are all over this one
• Aer Lingus and the price of irritating MOL, twice

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King Vijay starts to sweat

Start here. It turns out that trying to be like SRB is not easy, cheap or risk free. How much longer can Dr. Vijay keep this up? Of course you can kiss those A380s goodbye - but whisper it for now. The comeuppance we are seeing is awful because thousands of people are going to get hurt when this airline folds. Not to mention the banks who lent out the money - how much of the brewery business is used as collateral one wonders?

In other news --

• Continental starts its IFEC systems up
• Alaska commits to full fleet IFEC
• AA's oneworld 777 shows off - its cute
• Another flu crisis? Oh yes we have one.

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Melbourne Emirates near-crash pilot report

Many people speculated about this event. There was no weather issue and the near crash was really odd. Now a report has come out with real information about what may have been going on behind the scenes.

The word is pilot fatigue and airline economics. Predictably the airline says they don't compromise on safety - "Safety is at the forefront of all operations within the Emirates group," a spokeswoman said. It does not really matter who blame at this stage. Happily there was no fatality, though the plane is badly scratched. The important issue here is that there may be a culture within the airline that needs looking at. Pilots are quick to circle the wagons and protect fellow pilots - which can be understood. So between the pilots on the one side and airline on the other, somehow the truth must emerge.

In other news --

• Ice pilots from the NY Air Guard
• Google is your friend
• Did you know... Lockheed's Neptune was an amazing plane
• SRB's clone in the making - hello Tony at Zappos

The US Navy and VTOL issues

The US Navy is generally assumed to be run by smart people. After all, the amount of money that goes into keeping the USN functioning should be buying some awfully smart minds. Well, sorta. Take a look here.

As you will read, it has now become a point of interest that the USN might just be running into a problem with heat on decks from huge engines. The picture above graphically illustrates this. Though its an engine start and the smoke is unburned JetA. But you get the idea. Those V-22 engines generate enormous amounts of heat. As the man says "V-22 downwash is notorious for setting nearby vegetation afire".

Um yeah. Now throw in an F-35. There's a poem that goes something like the "The boy stood on the burning deck, when all but he had fled..." Did you ever think that this poem, written about a brave boy in the French Navy hundreds of years ago could apply to Uncle Sam's finest in the 21st century?

In other news --

• More financials come out
• AirTran surprises
• Double dipping the tanker
• Gulf carriers weathering the storm quite well thank you

Ryanair squeezes more savings

Ryanair expects to save €30m-€40m annually by eliminating check-in desks and making online check-in mandatory from October, MOL said on Tuesday. "It's one of our major initiatives to reduce costs," he told a news conference to announce the launch of a mobile phone service on board its Rome-based fleet. "But it will also mean passengers spending much less time hanging around at airports."

Ryanair says 75% of its passengers already check in online. Only unmanned check-in kiosks and drop off areas for bags at the airport will be maintained under the new system. O'Leary also said Ryanair is continuing discussions with Airbus and Boeing for a large aircraft order but that "neither has met our pricing objective" so far. (Airbus denies speaking with him from what we hear)

In other news --

• The growth in premium economy
• Alistair Darling's APD folly
• US carriers surprise Wall Street
• Russian taste? The bizjet with an embryo logo

EC launches probe into major airlines

The European Commission (EC) launched an investigation into seven international airlines – including BA, AF/KLM, Lufthansa and American Airlines – over possible anti-competitive practices on transatlantic routes that it fears could be harmful to consumers.

The first investigation will look into cooperation between Star Alliance carriers; and the second is into Oneworld carriers. These come in addition to the existing investigation looking at the Skyteam alliance.

BA already submitted documents to the US DoT seeking antitrust immunity for its proposed tie-up with American Airlines. BA believes cost-saving opportunities from closer co-operation will be important as it weathers the downturn.

Any alliances discovered to have engaged in anti-competitive behavior can be fined up to 10% of global turnover and further co-operation be banned. So the outcome is very serious in terms of implications. Note also that this thinking has a sympathizer in Congress called Oberstar.

BA already publicized its intentions to deepen co-operation with AA in a bid to thwart the downturn. BA had hoped to complete a deal this year but previous EU antitrust investigations have taken two years to complete. The partnership would see the two airlines setting capacity and fares on transatlantic routes. They would also share costs and revenues from their joint operations along with Iberia.

Meanwhile, Star Alliance members already received US regulatory approval to establish a similar cost-sharing network.

The EC told The Times: “The level of co-operation appears far more extensive than the general co-operation between these airlines and other airlines, which are part of the Star and Oneworld alliances. The Commission is assessing whether these joint activities may lead to restrictions of competition on certain transatlantic routes.”

A spokesman for BA said: “We believe that the EU-US market is highly competitive with 42 airlines competing non-stop between the two areas. Our joint business agreement would give consumers more choice with a wider network, access to cheaper fares, better connections and more frequent-flyer rewards.”

BA and AA have twice before had their merger attempts rebuffed. However this time chief executive Willie Walsh is arguing that an unprecedented bleak economic outlooks means merger is essential for survival.

In other news --

• Piracy - what happens when you don't plan
• Allegiant's 1Q09
• Ryanair and the Fat Tax
• Gulf Air to cancel 777 leases?

Reuters is reporting that AF/KLM are in and Aeroflot is out of the CSA deal. In what may be a political move, a consortium comprising Czech companies Unimex and Travel Service also advanced to the second round of bidding. Note CSA, AF/KLM and Aeroflot are all part of Sky Team.

The trouble here is this: Russia is not liked at all by its previous "allies". The Russians cannot comprehend this and will see the move as borderline racist. Which it is, but they won't understand it. The lesson from Estonia was not learned as you may recall. But here's the other shoe - Air France bought ~40% of CSA in early 1990s for $60m and then sold it back to the Czech state for $27m in 1992. Brilliant did we hear you say? Yes, and these same business mavens bought Alitalia.

So who should be really worried? AF/KLM shareholders of course, but also the Czech state.

In other news --

• Flybe gets its 50th Q400
• Predator C makes impressive arrival
• Cathay reels
• Airbus and government money - bad habits die hard

Congress may split tanker buy

In its usual interfering ways, the US Congress is apparently toying with a split buy on the USAF tanker deal. This despite Secretary Gates' saying he did not want this.

Take a peek at this link. We are also puzzled by the $7bn extra cost the Pentagon estimates from a split buy. Sure there will be some costs, but given the slow rate of acquisition, these costs should be rather low. If the cost is to be amortized over the life of the contract, then really these costs are low.

Given the business cycle now, both NG/EADS and Boeing are desperate for this order. There is little doubt the Pentagon will get the deal are better than fire sale prices. This is a great time if you have cash and you are a buyer.

In other news --

• US international travel numbers off
• Shuttle landing video
• Airbus announces maintenance savings on A340/A330
• Dassault out of India fighter competition

Piracy thoughts

The piracy news this week started off well, for the American captain at least. The French anti-piracy mission went poorly. But even as the world smiled at the ending of two hostage events, can you believe that overnight three more ships were hijacked?

It would seem clear that the Somali pirates do not fear what is coming to them. Perhaps they figure they have nothing to lose or the chances of being caught and terminated is low. Piracy is a very bad thing and though it does not have an aviation angle, we would like to go off about it anyway. We see Somali maritime piracy the same way we see aircraft hijacking. Its terrorism - albeit financially driven, not political.

For people who prey on civilians and terrorize them, the end should be the same. In the case of Somalia, it is time the nations trying to stop the piracy attend to matter by getting serious. This means attacking the ports these pirates come from by air. The attacks should be carried out without delay. Moreover, the various national navy assets need to move into these ports and retake the ships and crews held hostage. Pirates need to know that there is no benefit in hijacking and terrorism.

Allowing this problem to fester is outrageous. Very few people can imagine the fear that grips a family when one of their own is being held captive. This piracy problem is beyond politics. Somalia has been a failed state for years. But we cannot allow this chaos to spread far and wide. There are reports that even the Seychelles is now under threat by Somali pirates. The Seychelles has no means of defending itself. Its time to get serious and end the problem or at least ensure it does not leave Somalia's beaches.

In other news --

• Alaska takes on Allegiant
• Another miracle
• Qantas drops a bomb
• More n the Emirates incident in Australia

BA starts to play chicken with Iberia

BA does not feel under pressure to do a merger deal with Iberia, WW said, according to Spanish newspaper Expansion.

"These negotiations aren't a distraction for our management team. BA and Iberia know each other very well, so I don't feel under any calendar pressure," Walsh told several newspapers, according to Expansion. Walsh said Madrid Airport would be key to the growth of the company following any merger, Expansion said.

The main issues remain financial control of the proposed parent company. Clearly WW wants to have control and base the new firm in London. The Spanish, seeing BA lose its powerhouse value compared to Iberia feel they can strike a much better deal now. Hence they would like to see a deal sooner, whereas the British prefer a deal later - hoping the BA valuation will go back to what it was. If BA's value comes back, it would justify the original split and control in their hands.

Problem is the Spanish realize this and it will be interesting to see who blinks first.

In other news --

• Old jets don't always die
• More trouble in Dubai?
• China saves its airlines - the catchy bailout virus spreads
• Ancillary revenues reach airports - another spreading virus

New EADS chairman

The mess at Deutsche Bahn has had knock on effects. Daimler's CFO Bodo Uebber will be named as new chairman of EADS, replacing Ruediger Grube, Daimler said at its annual shareholders' meeting on Wednesday. Grube, aerospace and defense company EADS's Non-Executive Chairman, had said on Tuesday he would step down to run Germany's rail operator.

In other news --

• India needs to hurry its fighter selection - it faces MiG troubles
• Aer Lingus twitches - MOL sharpens his fangs
• Is nothing special? - selling Concorde
• ILFC appeals for help

Reuters reports that the number of empty seats flown by US airlines is rising despite fare sales and capacity cuts. March load factors showed the third consecutive month of declines and the largest drop for some carriers this year.

This should come as no surprise because of the financial situation consumers face. U.S. consumer borrowing fell steeply in February; credit and charge card use dropped by the most on record, a Federal Reserve said on Tuesday. Revolving credit, made up of credit and charge cards, plunged 9.7%, or $7.8bn in February, the largest dollar drop since the Fed started tracking the series in 1968.

There is no silver lining to be seen, just dark, dark clouds.

In other news --

• China exports to Africa
• Heathrow expansion contested
• Air France/KLM and GOL get together
• Dubai launches LCC

Traffic summary

Here's what airlines are reporting:

Ryanair carried 4.7m passengers in March, 5% more than a year ago. Load factor dropped to 77% from 79% in the same month last year.

Air Canada said its load factor and traffic statistics weakened in March even as it cut capacity - flights were 81.8% full in March, down 1.8% points from a year earlier.

US Airways said its domestic mainline traffic fell 10.9% in March, resulting in a dip in passenger unit revenue. Total mainline traffic - including international flights -- fell by 8.9% and total mainline capacity was down 6.1%. Load factor was 81.9% which was down 2.6% points from March 2008.

In other news --

• Female fighter pilots
• Another tough Airbus customer
• easyJet management changes
• Farewell Mr. Mannion

Reality hits Emirates

Everyone has been waiting for this. The cocky attitude in Dubai has so many people rubbing their hands in glee as real estate values collapse; we hear about literally hundreds of expensive cars parked at the airport by the hastily departing expatriates. We only think of the poor construction worker hustled off to India, but the high skilled set are jumping ship just as fast.

Now while this has been going on, the aviation world has been holding its breath about the outrageous A380 orders from Emirates. Let's just remind everyone of what that order means - the airline wants to add 31,500 seats in A380s alone. Please pause and ponder that number. Where in the world such demand exists is hard to identify. As readers know the JFK flight failed once loads dropped to 100 people each way.

As we Americans have learned rather quickly, it sucks to be greedy. Remember when your mother told you that your eyes are bigger than your stomach when you piled too much food on your plate? Well at least there are 300m Americans to share the pain. How big is Dubai?

Emirates has just revealed it is offering cabin crew up to six months of unpaid leave from May as it cuts back on services. The airline says the option, which comes into effect on May 1, was on a “purely voluntary basis”. It added a drop in the number of cabin crew leaving the airline through natural attrition had led to the voluntary leave offer. Emirates hopes that about 700 of its 12,000-strong cabin crew will take up the offer of leave.

An Emirates spokesman said: “Combined with a sharp drop in cabin crew attrition, we now find ourselves in a position to be more flexible as an employer.” Well of course you do. The airline also says there are limited unpaid leave slots available, depending on seniority and the aircraft type the crew works on. “Cabin crew may opt for unpaid leave from a period of one month, up to a maximum of six months,” the spokesperson said. “While on leave, they will still be employees of the airline, and continue to be eligible for various benefits including paid accommodation and travel concessions. Emirates will continue to review our operational requirements closely, and staff going on unpaid leave are fully aware that they can be recalled for duty at one week's notice.”

One week's notice? Right.

In other news --

• The instant gunship
• A big week in EU
• BA sells 757s and A320s
• More dumb fees

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Airlines missing out on $12bn ancilliary revenue

Airlines could generate $12bn revenue in ancillary revenue by adopting the practices of LCCs such as Ryanair and easyJet. Carriers globally are missing out on an average of $6/passenger by not offering services above and beyond ticket sales.

The study conducted by ancillary revenue program specialist, Collinson Latitude, was based on airline industry figures from IATA which showed that there was a total market of 2bn passengers worldwide in 2008.

The ancillary revenue model has become an important financial component for the airline industry with leading budget carriers Ryanair and easyJet documenting that approximately an additional $12/passenger was made through ancillary revenues in 2007.

The report argues that ancillary revenue programs also deliver further benefits for airlines by providing opportunities to implement loyalty building initiatives that deliver detailed customer insight, further strengthening the brand’s long-term relationship with the customer.

In other news --

• Israel's UAV attack in Sudan
• UAV leasing gets started
• Iraqi Airways starts EU service
• ASA grounds 60 RJs for inspection

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Alaska and Southwest to decide soon says Row 44

“We expect Alaska and Southwest Airlines to make a decision during this quarter,” Row 44 president Gregg Fialcowitz said here today. Row 44 began trials of its Ku-band satellite broadband system with the carriers earlier this year. We did a podcast from a Southwest flight you might recall. “We also expect to be able to make an announcement in the near future about an agreement with a customer operating on the North Atlantic and in Europe,” Fialcowitz said. “In anticipation of that, we plan to extend our coverage to those regions this summer, with first aircraft operations there expected to start in the third quarter of the year.” The Row 44 equipment, which includes a new-generation antenna from AeroSat, is installed on one Alaska Airlines 737 and four 737s. “Between them they have totaled more than 800 flights with our system operational,” said Fialcowitz. “Both airlines were focused originally on seeing if the system worked, and consequently offered it free of charge to passengers. But now they can see that it delivers and are planning to look at charging soon to establish appropriate pricing.” Row 44 reports an average passenger take-up rate of over 36% across the two airlines, with peaks of over 80% on some flights. Wireless laptops are proving to be the most popular access device. “Even for a free service, these numbers are staggering,” comments Fialcowitz. “Our business plan is built on single-figure take-up rates, so we’re very encouraged.” No doubt so are the airlines who will see strong ancillary revenues.

Row 44 downloads at typical 4Mbs with 0.5Mbs uploads. “Surveys show that passengers perceive the level of service as equal or superior to what they get on the ground in WiFi hotspots and home offices. They are streaming video, surfing the Web, accessing corporate networks and using the Slingbox remote TV access application.”

Fialcowitz reports that two weeks ago the company received temporary authorization from the US FCC to offer its service in North America. “Now we have to repeat our interference testing and submit full results to the FCC,” he said. “We feel confident that we will pass this scrutiny and be awarded a full license to operate in the USA.” As we always said, coming soon to a flight near you.

In other news --

• Israel's UAV attack in Sudan
• UAV leasing gets started
• Iraqi Airways starts EU service
• ASA grounds 60 RJs for inspection

Subscribe to over 3,500 (and growing) analysis and opinion posts behind the headlines at Blackprogram