Thursday, October 19, 2017

Here is the key Boeing gives airlines when they buy a $270 million 787 Dreamliner

(Benjamin Zhang)

 Qantas took delivery of its first Boeing 787-9 Dreamliner on Tuesday.
Boeing presented Qantas with a ceremonial key to the plane.
The Dreamliner will allow Qantas to offer non-stop service between the Europe and Australia.

On Tuesday, Qantas took delivery of its first 787-9 Dreamliner at Boeing's Everett, Washington factory. After the paperwork had been signed and a substantial amount of money transferred into Boeing's coffers, it was time for the Australian national airline to finally get its plane.

But first, Boeing vice chairman Ray Conner presented Qantas CEO Alan Joyce with a key to the Dreamliner. The polished key came complete with a Boeing 787 keychain and an accompanying jewelry box, fitting for an with airliner with a list price of $270.4 million.

Admittedly, the key is purely ceremonial and isn't required to operate the aircraft. Boeing usually reserves the pomp and circumstance of a key presentation for special occasions.

For Qantas, this is certainly a special occasion.
(Benjamin Zhang)

The new Boeing Dreamliner, one of eight destined to enter the Qantas fleet by the end of 2018, will play a major role in the airline's future international expansion plans. Qantas will use four of the planes, including the one it acquired on Tuesday to launch its new non-stop between Perth, Western Australia, and London.

This will be the first non-stop scheduled passenger flight between Australia and Europe. (In 1989, Qantas did fly one of its Boeing 747-400 jumbos from London to Sydney. However, that was a one-off publicity stunt with no passengers on board.)

"One of the big advantages of the Dreamliner is that it gives us a range of destinations we couldn't have done before," Joyce told Business Insider in an interview. "It gives you better economics because it's 20% more fuel efficient and with a lot lower maintenance cost given the new technology. That means there are routes we could have done before with distance, but couldn't do economically that now come onto the radar screen."

"For Qantas, it also starts overcoming the tyranny of distance we have," Joyce added.

(Benjamin Zhang)

After all, the 9,008 mile-long flight will be the third longest scheduled commercial flight in the world, right after Air India's 9,400-mile flight from Delhi to San Francisco and Qatar Airways' 9,032-mile flight from Doha to Auckland, New Zealand.

The Perth to London route will overtake the airline's 8,531-mile non-stop flight between Sydney and Dallas, Texas. That flight is operated by Airbus A380 super-jumbos.

(Benjamin Zhang)

 (Benjamin Zhang - Business Insider)

Wednesday, October 18, 2017

Delta Announces New Routes for the Airbus A350

Delta is the first U.S. airline to take delivery of a next-generation Airbus A350 jet. The airline will begin operating commercial flights using the new plane later this month, starting with a route from Detroit to Toyko Narita followed by subsequent routes from Detroit to Seoul Incheon and Beijing.

At a launch event yesterday in Atlanta, though, the airline announced even more routes that it intends to fly with the A350.

Here is a full list of routes that we know about so far:

Detroit (DTW) – Tokyo (NRT) starting October 30, 2017
Detroit (DTW) – Seoul (ICN) starting November 18, 2017
Detroit (DTW) – Beijing (PEK) starting January 17, 2018
Atlanta (ATL) – Seoul (ICN) starting March 24, 2018
Detroit (DTW) – Amsterdam (AMS) starting March 31, 2018
Detroit (DTW) to Shanghai (PVG) starting April 19, 2018

There are two interesting things to note here. First, it appears that the A350 fleet will, at least at first, be based out of the airline’s hub in Detroit, so all these flights except the one originating in Atlanta will be flown out of there.

Second, it looks like the airline will try to use these planes to consolidate its network to Asia out of the Midwest and the East Coast, funneling passengers through Detroit, while just a single route to begin with will operate in the other direction to Europe, flying to the airline’s SkyTeam partner, KLM’s, hub in Amsterdam.

Delta has a total order of 25 A350s, so we should eventually start seeing them fly to a number of other destinations as well as the airline uses them to retire older jets.

Part of what makes this such an exciting development is the introduction of an all-new all-suites business class cabin onboard. The A350 will have 32 of these new suites onboard, arranged in a 1 – 2 – 1 configuration. The Thompson Vantage XL seats all have closing doors, and recline to beds that are 21 inches wide and up to 81 inches long. They will also feature 18-inch hi-res touchscreen entertainment systems and 2Ku Wi-Fi.

Delta’s A350s also have 48 of the airline’s new Premium Select economy seats and 226 Main Cabin regular economy seats.

(Eric Rosen - Forbes)

Southwest Airlines gives up two planned routes to Mexico City

Southwest Airlines is giving up a pair of coveted slots at Mexico City’s airport as the Dallas-based carrier shifts its growth focus elsewhere, including other leisure-friendly destinations in Mexico.

Southwest won the rights to operate four additional flights in and out of Mexico City earlier this year after Delta Airlines and Aeromexico were forced to give them up as part of a joint venture between the carriers.

The decision to relinquish the valuable rights comes at a time when Southwest is in the midst of an international growth-spree, launching service to 16 international destinations since 2014. That includes a heavy focus on popular tourist destinations, including Mexican beach towns, Jamaica and the Bahamas.

Southwest was one of several carriers to gain new access this year at Mexico City International Airport, where the number of daily flights is limited due to space and capacity constraints.

Two of Southwest’s four slots, an industry term for takeoff and landing rights, were used to add flights from Houston. But Southwest decided not to launch flights to Mexico City from Los Angeles and Fort Lauderdale, both of which were scheduled to begin next summer.

Instead, the airline offered up those two slots to other carriers at no cost. This week, the U.S. Department of Transportation reallocated them to Mexican low-cost carrier VivaAerobus.

A Southwest spokesman said the decision is part of a strategy to focus its Mexico City service through Houston’s Hobby Airport, already a key international gateway for the carrier that provides one-stop access to more than four dozen U.S. cities. Southwest operates four daily flights between Houston and Mexico City.

“Southwest is bullish about Mexico City service over a longer term yet is refocusing on other growth priorities in the nearer term,” spokesman Brad Hawkins said in a statement.

Hawkins said the carrier plans to continue growing its service to other Mexican destinations, including Cancun, Puerto Vallarta and Los Cabos.

A total of 24 slots were made available at Mexico City’s airport as a condition to a deal that will allow Delta and Aeromexico to coordinate more closely on schedules and pricing and share revenue from flights between their respective countries. Another four slots were made available at New York’s Kennedy International Airport.

In addition to Southwest, JetBlue, Alaska Airlines, Volaris and VivaAerobus all received slots at Mexico City's airport that once belonged to Delta or Aeromexico.

(Conor Shine - The Dallas Morning News)

Sunday, October 15, 2017

Gulfstream G-V (c/n 598) N808JG

This lovely aircraft captured at Kona International Airport at Keahole (KOA/PHKO) on October 12, 2017 is operated by Jet Green LLC.

(Photo by Michael Carter)

Gulfstream G-IV (c/n 1069) N813PD

Operated by Quogue Aviation II LLC, this gorgeous aircraft is captured resting in the morning sun on the Signature ramp at Kona International Airport at Keahole (KOA/PHKO) on October 12, 2017.

(Photo by Michael Carter)

Hawaiian Airlines McDonnell Douglas MD-95-30 (717-2CM) (55151/5041) N490HA "O'o"

Taxies to then departs on Rwy 35 at Kona International Airport at Keahole (KOA/PHKO) Kailua-Kona, Hawaii on October 12, 2017.

(Photos by Michael Carter)

Hawaiian Airlines McDonnell Douglas MD-95-30 (717-2BL) (55182/5138) N494HA "Koa'e Kea"

Smokes the mains on Rwy 35 at Kona International Airport at Keahole (KOA/PHKO) Kailua-Kona, Hawaii on October 12, 2017 as it arrives from Hilo International Airport (ITO/PHTO) on the eastern side of the Island of Hawaii.

(Photo by Michael Carter)

Big Island Air Cessna 208B Grand Caravan (c/n 208B5054) N2150

This colorful machine is captured resting in the gorgeous morning sun at Kona Inernational Airport at Keahole (KOA/PHKO) Kailua-Kona, Hawaii on October 12, 2017.

(Photo by Michael Carter)

Paradise Helicopters Bell 407 (c/n 53101) N808PH

Captured at Kona International Airport at Keahole (KOA/PHKO) Kailua-Kona, Hawaii on October 12, 2017.

(Photo by Michael Carter)

Paradise Helicopters Bell 407 (c/n 53503) N407WH

Arrives at Kona International Airport at Keahole (KOA/PHKO) Kailua-Kona, Hawaii following a sightseeing flight along the Kona Coast on October 12, 2017.

(Photos by Michael Carter)

Transair Cargo Shorts SD3-60 (c/n 3722) N221LM

Rests in the morning sun at Kona International Airport at Keahole (KOA/PHKO), Kailua-Kona, Hawaii on October 12, 2017.

(Photo by Michael Carter)

Saturday, October 14, 2017

Island Air Dehavilland Canada DHC-8-402Q (c/n 4554) N863WP "Kulana Pono"

Smokes the mains on Rwy 35 at Kona International Airport at Keahole  (KOA/PHKO) Kailua-Kona, Hawaii on October 12, 2017.

(Photo by Michael Carter)

Air India takes delivery of final 787-8 Dreamliner

Air India has received its final Boeing 787-800 aircraft, completing an order placed more than a decade ago.

Air India in 2006 placed orders with Boeing for 68 aircraft—27 787-800s, 15 777-300ERs, eight 777-200LRs and 18 737-800s.

The airline has taken delivery of most of the aircraft, except three 777s that are expected to be delivered early next year. Most of these aircraft are on sale-and-leaseback arrangement, under which the seller leases the aircraft back from the purchaser for a long-term period.

Air India’s fleet stands at 119, the second-largest fleet in the country after IndiGo, which has 141 aircraft. Air India also flies the most international passengers.

The airline was founded in the 1930s by the Tata Group before being nationalized after Indian independence in 1947. However, it has failed to make profit since its merger with Indian Airlines in 2007.

Air India, which manages a major share of the country’s domestic air travel market, has been lagging behind other carriers, despite the domestic aviation market’s rapid growth. The airline has been faced financial losses for years because of high operating costs and some of the lowest fare prices in the world and stiff competition from local carriers, which include Jet Airways, IndiGo, GoAir, SpiceJet and Vistara.

In June, the Indian government approved plans to privatize national carrier Air India.

(Jay Menon - ATWOnline News)

New airline service between Oakland and Los Angeles promises faster travel

A JetSuite jet sits at Buchanan Field Airport in Concord, Calif., on Wednesday, March 29, 2017. The airline will soon launch a direct flight from Oakland International Airport to Hollywood Burbank Airport.
(Dan Honda/Bay Area News Group)

A growing airline that promises a way for passengers to ditch long security lines and crowds at baggage claim is offering a new flight between Oakland International Airport and the Hollywood Burbank Airport.

JetSuiteX — a division of private jet operator JetSuite — is launching its “private for public” service in mid-November at the airports. Travelers will be able to access the flights at private terminals in each airport, allowing them to skip the normal security lines and instead arrive at the airport about 20 minutes before departure.

“JetSuiteX was created to be the ultimate travel hack for time-starved travelers, especially those going between LA and the San Francisco areas, who are tired of waiting in line after line, just to wait some more,” said Alex Wilcox, founder and CEO of JetSuiteX, in a news release. “Our customers get to arrive refreshed when they skip things like spending more time in an airport than in air, getting herded through lines or feeling the discomfort of boarding a plane with 100 other people.”

The flights will depart three times a day on every day except for Saturday. For prices that start at $129 each way, travelers can bring up to two pieces of luggage totaling 50 pounds, have “business class-style leg room,” and free cocktails and snacks, according to JetSuiteX.

The service will also add to the Oakland airport’s growing list of nonstop destinations.

“(The airport) is in the midst of an extended period of passenger traffic growth, made possible in large part by a significant increase in nonstop destinations served,” said airport director Bryant Francis in a statement. “Introducing new charter-style flight options at Oakland dovetails with our goal of offering more choices to the growing Bay Area customer base, many of whom live closest to (the airport). We hope JetSuiteX’s new local service proves to be both popular and successful.”

JetSuiteX drew attention last year when it debuted the first commercial travel service — to Burbank and Las Vegas — that Concord’s Buchanan Field Airport had seen in decades. For travelers near the airport who aren’t squeamish about flying on a smaller, 30-seat jet, the service could deliver passengers to Los Angeles or Las Vegas quicker by allowing them through a shorter security process at private terminals instead of the typical TSA lines.

JetSuite also launched a non-stop flight between San Jose and Burbank earlier this year, jetting between private terminals at Mineta San Jose International Airport and the Hollywood Burbank Airport twice a day except for Saturdays.

Up-to-date schedules can be found at

(Annie Sciacca - San Jose Mercury News)

Friday, October 13, 2017

Will 'Southwest Effect' Rock Airfares To Hawaii?

In an era of $200 flights to Europe, coach airfare to the Hawaiian Islands remains costly. A flight can range from $500 to $1,000 or more round-trip, particularly during high season. Delta has a nonstop from LAX to Honolulu from Dec. 19 to Dec. 29 for $877 on A round-trip from Chicago (ORD) to Honolulu on United on the same dates came up at $1,195.

Flights to popular neighbor islands like Maui, Kauai or the Big Island are often even more expensive than flying to Honolulu. And while there are occasional sales, the distance from the West Coast to Hawaii (2,400 miles from SFO, 2,550 from LAX) makes the Pacific a moat that limits competition.

That may finally be changing, as Southwest Airlines announced this week that they will begin selling tickets to their most requested non-destination, Hawaii, in 2018. To support this service, Southwest also announced it will launch an application for Federal Aviation Administration authorization for Extended Operations (ETOPS), a critical licensing and permit process for extended long-distance (such as over-ocean) flights. The announcement didn't go into details, but Southwest is probably trying to get ETOPS-180 certification, which means a twin-jet is certified to operate up to three hours away from the nearest diversion airport.

To announce its upcoming Hawaiian service, Southwest did a satellite announcement from Waikiki Beach, with President Tom Nealon introducing the governor of Hawaii. While the announcement stated that tickets would go on sale in 2018, many questions went unanswered. These included when the tickets would go on sale, dates projected for the first flights, where the flights would take off from (the range of the 737 MAX makes the West Coast the likely launchpad), classes of service (all-coach has been the Southwest standard), which islands would be served, and of course pricing.

Also unclear was whether any 737 MAX aircraft have been delivered to the FAA for ETOPS certification. According to The LA Times, Andrew Watterson, Southwest's executive vice president and chief revenue officer, said it might take the FAA one to two years to approve Southwest’s application for long-term service to Hawaii.

While the announcement was short on information, it was long on platitudes. Chairman and CEO Gary Kelly, who apparently didn’t make it to Hawaii, said, "A day long-awaited by our customers, fans and more than 55,000 of the world's most-loved airline employees is finally within sight — a day that will showcase your hospitality, about as far southwest as you can go in the U.S.”

Currently, six airlines offer service to the islands, including Alaska, Hawaiian, Virgin America (now part of Alaska), United, American and Delta. All, save Hawaiian, are majors. Occasional attempts by low-cost carriers (most recently Allegiant) to crack the market have come and gone.

Cited reasons for failure include a limited good-paying business travel market, costs of operations, a small local market (only 1.4 million people live in Hawaii) and low margins with leisure travelers. Then there's the worldwide network connections offered by the major airlines, which few low-cost carriers can match.

While clearly many questions need to be answered, Southwest may be different. Southwest currently serves 101 destinations in the United States and nine other countries. The airline has more than 4,000 departures a day during peak travel season. More than 100 million people fly Southwest each year, and the airline currently has seven destinations served by more than 150 flights a day, including Chicago (265), Baltimore (234), Las Vegas (218), Denver (209) and Dallas (180).

The “Southwest effect” may lower fares when the airline enters a market, but will passengers balk at flying its single-aisle 737s to Hawaii? While some dream of luxurious jumbo jet travel to the islands, the reality is that United, Delta and Alaska are already operating 737s to Hawaii. More likely, Southwest’s reputation as a "fun" airline may make it a popular choice to "get the party started" en route.

Vague as it was, the announcement was enough to drop shares of Hawaiian Airlines, already contending with a planned expansion of United service to the islands, by 2% on Thursday. The chilling words? Andrew Watterson, executive vice president of Southwest, said, “We anticipate fares will drop.”

(Michael Goldstein - Forbes)

Virgin Hands London-NYC Flight to Delta as Boeing 787s Need Engine Fix

Virgin Atlantic Airways has transferred one of its daily trans-Atlantic flights to U.S. ally Delta Air Lines so that some of its own Boeing 787 Dreamliner planes can be grounded for an engine fix.

Delta took over the London Heathrow-New York John F. Kennedy International service Thursday and will operate it until Oct. 31 using older Boeing 767s and possibly 777s. That will allow the Rolls-Royce Holdings Plc Trent 1000 turbines that power Virgin’s Dreamliners to receive attention, according to Craig Kreeger, the U.K. carrier’s chief executive officer.

“It’s a substitution that gives us a little bit more resilience as we’ve had some parts issues with our 787 engines,” Kreeger said in an interview. “This ensures that we’ll have sufficient capacity. It’s circumstantial, it’s not a strategy.”

Rolls-Royce said Aug. 1 that as many as 500 Trent 1000s would need earlier-than-expected maintenance because of wear issues affecting the fan blades. The problem was first identified last year when ANA, the 787’s launch customer, reported turbine damage on three planes. Virgin operates 13 787s out of an order for 17, and also took some out of service in April.

“We have a clear service management plan in place with all operators to undertake this work and minimize disruption,” Rolls-Royce said in a statement, adding that the interval for the work will be kept “as short as possible.”

Not all Rolls-powered 787s will need early attention, the U.K. manufacturer said. Additional maintenance costs on the Trent 1000 were the biggest component of 59 million pounds ($78 million) in technical costs that the company posted in the first half.

Delta, which bought a 49 percent stake in Virgin Atlantic in 2012, said in a statement that such route changes “show the benefit of the Delta and Virgin Atlantic partnership and how we work together.”

Virgin said last month that starting next March it would take one of its partner’s U.K.-U.S. flights, giving it six of eight daily services across the pair’s joint venture. Delta will meanwhile upgrade to Airbus A330s from 767s on routes between Heathrow and JFK, Atlanta and Detroit.

(Thomas Seal - Bloomberg News)

FAA Demands Inspection Of A380 Jumbo Jet Engines After Air France Emergency

Another day, another problem for the Airbus A380. Today’s issue is directly related to that of Sept. 30, when an engine “came apart” on an Air France A380 flying from Paris to Los Angeles with 496 passengers and 24 crew aboard.

The engine explosion over Greenland led to an unscheduled landing at a Canadian Forces base at Goose Bay, Labrador, and an unplanned 24-hour plus delay in the passengers getting to their destinations. You can see an uncensored passenger video of the three-engine emergency landing here and here, including applause for the pilots. Engine components have been found in Greenland as well as on the arrival runway at Goose Bay.

The engine failure led directly to today’s news, a Federal Aviation Administration (FAA) Airworthiness Directive (AD) calling for visual inspection of fan hubs used in the engines of SE A380 aircraft with Engine Alliance (EA) engines.

The FAA issued the AD because it determined the “unsafe condition…is likely to exist or develop in other products of the same type design.”

The Engine Alliance is a 50/50 joint venture between General Electric and Pratt and Whitney, a division of United Technologies. (A380s powered by Rolls-Royce engines are not affected by the directive.)

Specifically, the FAA emergency airworthiness directive requires owners and operators of Engine Alliance (EA) Model GP7200 series engines to visually inspect the engines. The operators are tasked with removing the fan hub if defects are found and replacing it with an airworthy part. Otherwise, the directive notes, failure of the fan hub could lead to an “uncontained release” of the hub, which could result in damage to the engine and the airplane.

The emergency AD was prompted by the uncontained engine failure which occurred on an EA GP7270 turbofan engine with 3,527 cycles since new, a relatively high use engine. The FAA specified that engines with 3500 cycles since new need to be inspected within two weeks. Engines with less than 3500 cycles since new need to be inspected within 5 weeks.

The GP7200 engines are reportedly in some 60% of the Airbus A380 superjumbos currently in service. Airlines operating the affected aircraft include Air France, Emirates (which operates nearly half of the world supply of A380s) Etihad Airways, Qatar Airways and Korean Air Lines. The airlines have so far not commented on how the inspections might affect their service.

Meanwhile, the FAA stated that it considers the AD “interim action” as “an investigation to determine the cause of the failure is on-going.”

As of now the A380 aircraft and the damaged engine are apparently still sitting in Labrador. Investigators are trying to deal with the “transport logistics” required to get the damaged engine back to a plant in Britain for examination while getting the damaged aircraft off the runway and back to Europe for repair and return to service.

(Michael Goldstein - Forbes)

Boeing’s Iran deals hang in the balance as Trump condemns nuclear accord

Boeing’s $8 billion order from Iran Air could be jeopardized if President Donald Trump’s declaration Friday reverses the slight thaw in dealings with Iran. If Boeing were to lose the entire order as relations deteriorate, the biggest hit would be to 777 production in Everett.

Boeing has plenty at stake as President Donald Trump condemns — without actually renouncing — the Iran nuclear deal.

Boeing has finalized one deal to sell 80 jets to Iran, worth an estimated $8 billion at standard prices, and it is negotiating others.

Its discussions with Iranian officials are conducted under two U.S. government licenses, the first allowing Boeing to initiate sales conversations and the second a specific license to nail down details of the agreement to sell the 80 jets to Iran Air.

That sale was finalized in December under the Obama administration, as was a parallel deal Airbus made with the same airline for 98 airplanes, plus another two jets sold indirectly. At the time, Boeing’s deal was the largest by an American company with Iran since the 1979 Iranian revolution and subsequent seizure of the U.S. Embassy there.

Iran’s fleet of some 250 airliners is badly in need of modernization — most planes were purchased before the revolution, and its airlines have been prone to accidents.

For Boeing and its archrival Airbus, that presents an immediate opportunity to win orders that could establish the nation’s airlines as long-term customers — if agreements aren’t torpedoed by political moves on either side.

Trump said Friday he “cannot and will not” certify the Iran nuclear deal is in America’s national-security interests, but he won’t withdraw from the landmark 2015 accord or immediately reimpose sanctions.

Noting Iran “is not living up to the spirit of the deal,” Trump also warned he would terminate the agreement unless its shortcomings are addressed.

Trump is kicking the issue over to Congress, asking lawmakers to come up with legislation that would automatically reimpose sanctions should Iran cross any one of numerous nuclear and non-nuclear “trigger points,” Secretary of State Rex Tillerson and National Security Adviser H.R. McMaster said in remarks released before Trump’s announcement.

Boeing’s Iran Air order — for 50 single-aisle 737 MAX 8s, 15 current model 777-300ER widebodies and 15 new model 777-9X widebodies, with deliveries supposed to begin next year — is worth about $8 billion after standard industry discounts, based on market-pricing data from aircraft-valuation firm Avitas. The Airbus order is worth about $8.7 billion.

Both deals are considered firm orders in commercial terms, meaning that Iran Air paid the two jet manufacturers the required initial deposit, which is typically 1 percent of the total list price. For the Boeing order, that would be about $170 million.

Airbus chose to book the sale at the end of 2016 and then rushed to deliver the first airplane, an A321, in January, just before Trump’s inauguration. Two A330s were subsequently delivered to Iran.

Boeing, because of the political uncertainty around the purchase as Trump came into office, chose not to formally add the deal to its order book. That allowed Airbus to win the order race last year, outselling Boeing by 63 airplanes.

Since then, both plane makers have continued to talk with Iranian airlines and have inked further tentative agreements.

At the Paris Air Show in June, Boeing announced an agreement with Iran’s Aseman Airlines to buy 30 single-aisle 737 MAXes. Airbus announced agreements with Iran’s Airtour Airline to buy 45 single-aisle A320neos and with Zagros Airlines to buy 20 A320neos and eight widebody A330neos.

If U.S. sanctions are reimposed, all these deals would be killed. Because Airbus jets contain more than 10 percent U.S. content, they too require a license from the U.S. Office of Foreign Asset Control to be sold internationally.

The future of all these jet sales remains very unclear, however.

The Iran nuclear deal specifically allowed Iran to unfreeze overseas financial assets and to buy commercial aircraft. If the deal is not killed completely, it’s even possible Congress could reintroduce limited sanctions that would leave intact the licenses to buy jets.

The fact that Trump did not impose any sanctions “is definitely good for both Boeing and Airbus,” said Douglas Harned, a Bernstein analyst who tracks Boeing.

Even without renewed sanctions, hurdles remain. Richard Aboulafia, an analyst with Teal Group, an aviation and defense consulting firm, said the Iranian airlines could yet have trouble financing their orders, partly because banks are unlikely to loan them money until Iran signs the Cape Town Agreement, an international treaty that includes provisions for repossessing capital assets like planes.

If Boeing were to lose the entire order, the biggest hit would be to 777 production in Everett.

Iran’s order for current model 777-300ERs would help fill a looming gap in production in 2019 that has already led Boeing to cut the 777 rate.

And the 777-9X portion of the order would help solidify the prospects of that new airplane, due to start delivery in 2020. The current order book for that plane is heavily dependent on the three large Gulf carriers, all of which have seen growth falter in the past year.

In a statement, Boeing said it will “remain in close touch with U.S. regulators for any additional guidance.”

“We continue to follow the U.S. government’s lead in all our dealings with approved Iranian airlines,” Boeing said.

(Dominic Gates - The Seattle Times)

Thursday, October 12, 2017

If Etihad and Emirates Hook Up, Will Airbus Be Biggest Loser?

That rumbling you hear is coming out of the Middle East, where a comment from an airline executive sent the rumor mill spinning. The comment came from Emirates president Tim Clark, who said in an interview with Reuters that the airline is open to cooperation with local competitor Etihad Airways. Clark added that a full merger was “unlikely” but up to the owners, which are for Emirates the government of Dubai and for Etihad, the Abu Dhabi government.

Was cold economic reality behind Clark’s eyebrow-raising “cooperation” statement? Emirates, which is already reportedly cutting some service, might benefit from consolidation. “Oil revenues haven’t flowed in that part of the world so the governments are tightening their belts”, says Seth Kaplan, managing partner of Airline Weekly. Whether the two airlines partner, cooperate or actually merge, he adds, “It’s something they need to consider; Etihad is not going to make money anytime soon.”

The three allegedly "massively-subsidized Gulf airlines" (Emirates, Etihad and Qatar) have been accused of violating the Open Skies agreement, which gives them access to the US market, reportedly receiving more than $50 billion in subsidies since 2004.

Etihad, whose reservation page includes a "Reserve chauffeur" button, hasn’t specifically commented on Emirates’ interest. But the airline, which reportedly had money-losing investments in Air Berlin and Alitalia, did say, "We constantly seek opportunities for innovative collaboration with other organizations, where it makes business and commercial sense.”

A combination might also cut down on overcapacity, while pilots, mechanics, and flight attendants already trained on particular aircraft operated by both airlines could be easily integrated into a merged carrier.

In addition, as Kaplan notes, Dubai World Central (DWC) when completed will be the world’s largest airport with an ultimate capacity of 160 million passengers and 12 million tons of cargo per annum. The new airport is in southwest Dubai, just an hour and a quarter from Abu Dhabi.

“Emirates has been struggling for the last few years. Etihad is an airline that has never been viable. There’s a very compelling case for consolidation; the reason not to do is is politics,” says Kaplan. “That’s a question for the highest level of Abu Dhabi’s government. You’ll lose non stop flights from Aub Dhai all over the world.”

Whatever arrangement Emirates and Etihad eventually agree to may have a cost to Airbus, particularly in relationship to its troubled A380 program. As Clark of Emirates noted, “There are many areas that the airlines could work together on like procurement.”

Etihad operates some 77 AirBus aircraft, including 10 A380-800s, the largest passenger planes in the world. Emirates operates some 98 of the giant A380s. So between them, the two airlines account for fully half of the 216 A380s delivered to date. (The third Gulf competitor, Qatar, has an additional 8 A380s.)

With cancellations up and the production line slowing, the consolidation that might help these airlines could end up being another nail in the coffin of the A380. As Kaplan puts it, “The A380 is such a troubled program. It’s clearly a financial disaster for them. It hasn’t sold well, it’s not what airlines wanted. You have to sell 500 seats profitably or not fly.”

Would nationalism, politics and pride prevent Abu Dhabi from merging its money-losing airline with Emirates? Perhaps. But as Kaplan notes, even the fabled wealth of the Gulf has its limits. After all, even after investing hundreds of millions of dollars, the government of Qatar shut down Al Jazeera America.
(Michael Goldstein - Forbes)

Jet Airways confirms order for 75 Boeing aircraft

Jet Airways said on Wednesday it had agreed to buy 75 Boeing 737 Max aircraft, and that it could purchase another 75 to help it expand in a booming Indian market.

Jet said in a statement that deliveries of the single aisle jets are expected to start in mid-2018. and a decision on adding an equal number of narrow-body aircraft "will be made over the coming few months".

An order for 75 737 MAX 10 jets would be worth as much as $9.3 billion based on list prices, although airlines typically get discounts for large orders.

Reuters reported in June that Jet, which is part owned by Abu Dhabi's Etihad Airways, was in talks to buy either Boeing's 737 MAX planes or aircraft from Airbus SE's A320neo family.

Airlines in India have hundreds of aircraft on order as they look to tap into a market growing by nearly 20 percent a year thanks to rising incomes and low cost fares.

Jet Airways has the second largest market share in India behind InterGlobe Aviation's IndiGo.

(Tommy Wilkes - Reuters / Yahoo Business News)