Monday, December 11, 2017

The Trump effect could give Boeing an edge over Airbus in the fight for Delta's big jet deal

Boeing may have gained an edge over Airbus as the jet makers battle for a Delta Air Lines order of up to 100 single-aisle jets, thanks to the Trump effect, an aerospace analyst said Monday.

Veteran Bainbridge Island aerospace watcher Scott Hamilton said the Boeing's 737 Max and the Airbus A320neo are almost identical in terms of economics and performance.

"Those I’ve talked to in the market think that on the merits, the choice between Airbus and Boeing is a coin toss. But throw in Trump’s Buy America and the C Factor (Boeing filing a trade complaint against Delta after it bought Bombardier CSeries regional jets), those I’ve talked to think Boeing is more likely to get the nod than Airbus," Hamilton wrote in a commentary on his Leeham News website.

"When it comes to Boeing vs Airbus in Washington (D.C.), and especially the White House, Boeing has the advantage," Hamilton suggested.

Another political factor that could influence the decision in Boeing's favor is Delta’s potential concern were it to buy Airbus about a customer backlash in the Seattle area, home of Boeing Commercial Airplanes' biggest factories, Hamilton wrote.

Boeing makes the 737 jets in Renton, and winning the Delta order would be a huge victory for Boeing and its supply chain in the region while creating positive sentiment toward Delta as it expands in Seattle.

"Delta is building a hub here in competition with Alaska Airlines, a heretofore exclusive operator of Boeing aircraft," Hamilton wrote. "Alaska’s acquisition of Virgin America, an Airbus operator, muddies these waters for now. "

Hamilton said he's overlooked one important consideration in the American-or-European jet decision: "the Trump administration’s Buy America push."

"One can just imagine if Delta buys Airbus. Notwithstanding the fact that many (or maybe all) of the A320neos might be assembled at the Mobile plant in deep-red Alabama that loves Donald Trump, Boeing has remarkably and successfully kissed up to Trump and massaged his ego to no end," Hamilton wrote.

"Boeing CEO Dennis Muilenburg didn’t take a strong stand about Trump’s Charlottesville remarks basically endorsing white supremacists. Several CEOs on Trump’s Business Council quit in protest. Not Muilenburg," Hamilton wrote.

Another aerospace analyst said the industry consensus is Airbus still has the upper hand in the Delta order battle, except for the politics wild card.

"With the entire Bombardier-Boeing clash ... Delta does have the leverage to acquire Boeing jets at high discounts," Dhierin Bechai of Aero Analysis in Rotterdam said in an interview.

Richard Aboulafia, vice president of aerospace analysis at the Teal Group, said the competition is "very hard to handicap."

"Boeing is at a political disadvantage due to the trade complaint against Delta's Bombardier CSeries order," he said. "On the other hand, that would make a Max win that much more impressive."

With Delta as the only U.S. major airline that hasn't yet specified its next-generation single-aisle jet, there's lots of business at stake for Boeing and Airbus in the decision.

Delta CEO Ed Bastian told the Puget Sound Business Journal earlier this year that he hoped to settle the jet question before 2018. Delta's board of directors meets this week to consider the order. Hamilton said the purchase could be announced by Friday.


(Andrew McIntosh - Puget Sound Business Journal)

Airbus may cut A380 production to six planes a year

Airbus is exploring plans to cut A380 superjumbo production to as low as six aircraft per year as it battles to make the world's largest airliner commercially viable beyond the end of the decade, industry sources said.

Squeezed by smaller but efficient twin-engined jets, Airbus has announced plans to lower A380 output to 12 aircraft in 2018 and eight in 2019, down from an annual peak of 30, as it holds out for what it believes will be a recovery in demand.

But plans to maintain that rate are in doubt as Airbus seeks to finalise an order for 36 new aircraft from Emirates.

Industry analysts say ongoing negotiations with Emirates will be decisive for the future of the A380 aircraft, which recently marked its 10th anniversary in operation.

Airbus, which has delivered 14 A380s so far this year, has told some suppliers it is studying eventually reducing production to six a year, industry sources said.

The timing of the move was not immediately clear.

An Airbus spokesman declined to comment on production beyond the company's previous announcements.

Emirates, which held off signing an order for an estimated 36 aircraft at last month's Dubai Airshow, wants guarantees Airbus will produce the A380 for 10 years and has expressed confidence it will be able to meet the conditions.

Industry sources say Airbus appears comfortable giving the undertaking, ensuring production remains open until 2028, though there are questions over the support of suppliers.

Reducing output to six a year would help to bridge that period and support key second-hand values while Airbus looks for other buyers, but could keep the programme in the red for at least part of the period.

Airbus shares extended losses and were down 2.16 percent at 1601 GMT.

Airbus broke even on the A380 for the first time in 2015, when it delivered 27 aircraft. After a clampdown on costs it has said the A380 can break even at around 20 a year and Chief Operating Officer Fabrice Bregier has said he is pushing the breakeven level as low as possible to sustain low production.

The company said in October that any losses triggered by lower A380 production would have little financial impact.

Finance Director Harald Wilhelm also told analysts that A380 deliveries were protected by the existing backlog until 2019.

Singapore Airlines, the first airline to fly the double-decker jet, is due on Wednesday to take delivery of the first A380 featuring a new cabin, following an $850 million investment.


(Tim Hepher - Reuters)

Southwest passenger threatens to 'kill everybody' on plane after being caught smoking

A Southwest Airlines pilot was forced to declare an emergency on Saturday after a passenger repeatedly told a flight attendant she would “kill everybody" on the plane.

The trouble started after the female passenger disabled a smoke detector aboard Southwest Flight 2943 from Portland, Ore., to Sacramento, and proceeded to smoke onboard, Southwest confirmed to Fox News. After she was caught, the woman created a “disturbance” which was captured on video by a fellow passenger.

“I have a destination for this, I have a destination for myself, and I need to go there,” the woman can be heard saying in footage provided to KOIN 6.

"I swear, if you … land, I will kill everybody on this [expletive deleted] plane,” she shouted. “I will kill everybody on this [expletive deleted] plane!”

A man can then be seen stepping into the frame to confront the irate passenger.

The woman, who was later identified as 24-year-old Valerie Curbelo of Sandy, Ore., was physically restrained for the remainder of the flight, according to KOVR, although Southwest has not confirmed those details.

“Our Crew in command of Flight 2943 traveling from Portland on Saturday afternoon safely landed on-time in Sacramento following an inflight disturbance,” said Southwest in a statement. “Our reports from Flight Attendants indicate a customer violated federal laws by both smoking onboard an aircraft and by tampering with a smoke detector in an aircraft restroom. Our Crew enforced the regulation and that was followed by the passenger outburst.”

“The safety of our Crew and Passengers is our top priority and we take all threats seriously. The pilots declared an emergency to receive priority handling from air traffic controllers, and our crew handled the situation onboard until the plane landed and local authorities stepped in.”

Curbelo is currently booked in the Sacramento county jail for making criminal threats, KOVR adds. She cited “anxiety” as the reason she lit up a cigarette aboard the flight.


(Michael Bartiromo - Fox News)

Why Hawaiian Airlines' Response to Southwest Is a Huge Mistake (and One You Should Avoid)

Never use this strategy when your startup is facing a lower priced competitor
The CEO of Hawaiian Airlines, Mark Dunkerley, announced this past Tuesday that Hawaiian Airlines is considering a basic economy class--a no-frills ticket for a very low price--fares as a response to the looming threat of Southwest Airlines entering the Hawaii market.

At face value you can see why lower prices might be a reasonable response to an airline famous for its lower fares--but it actually reveals a poor mindset about competition. The best way to face your competition is to focus on your category superconsumers--the highest profit, highest passion customers in your category--to figure out a way to grow the pie, not shrink it.

This may seem obvious, but many companies and startups don't realize their growth strategy is predicated on stealing shares with lower prices or similar products--which often ends up losing money in the end. There are three specific lessons Hawaiian Airlines should have followed--and are critical for all startups to get right:

1. Never lower price if it shrinks the category.

I've researched Nielsen data across 75 categories and found that when categories grow, one percent of brands capture 80 percent of category growth. Trying to grow in a declining category is extremely difficult, so startups should avoid any actions that might shrink the pie.

There are only a few very specific conditions when lowering price can be a good idea--for example, if you can credibly be the lowest-cost provider for a sustained period of time. For Hawaiian Airlines, this might be possible--but I wouldn't want to get into a price war with Southwest Airlines.

I've seen a good number of startups base their entire strategy and reason for existing by offering a disruptively lower price. You have to be more than just a lower price for the long haul. In my experience, only about 10-20 percent of consumers in a category buy just on price. Most consumers care about benefits, too.

2. Focus on increasing benefits, while holding prices constant.

The far better way to respond to a lower priced competitor is to add benefits.

Early on, Keurig faced a conundrum about an extremely popular accessory called "my K-cup" which allowed consumers to bypass the branded K-cups and fill them with their own coffee. It turns out that the availability of "my K-cup" made the entire ecosystem far more popular--it sent a message to consumers that Keurig cared about them.

Most people just wanted the option to make their own coffee, but in practice rarely did so. It was a win-win.

Hawaiian Airlines has a lot of options. The company could "Groupon" a ton of impulse activities like restaurants, surf lessons, or other fun experiences that fiercely compete for tourist dollars. It could upgrade and expand its lounge options for long layovers. It could create refreshment stations at the gate to start the paradise experience earlier for tourists (and extend the vacation just a little bit longer for those leaving).

Startups must remember that the value equation is a function of both price and benefits. Give equal, if not more, time to benefits. Don't just focus on price.

3. Ask your superconsumers what must be true to raise prices.

As I write in my book (which is about superconsumers), these high-passion and high-profit consumers exist in every category--including airlines. These consumers are more than willing to pay more or buy more because they love the category, but if you offer them something they really value.

For Hawaiian Airlines it could be local business travelers who go back and forth across the islands. Maybe they're locals or regular visitors who want a subscription service where they're guaranteed a first-class seat.
 
Maybe they're tourists who want a multi-month pass for the duration of their stay to travel an unlimited amount on seats that are available. Maybe they're homesick ex-locals like me visiting family, who want a Costco-like club membership that locks in preferred pricing reserved for a kama'aina (literal translation is "friend of the island").

Every startup can find superconsumers in the category they compete in. A disruption from a lower priced competitor might be the perfect time to introduce a new pricing innovation that increases prices via an entirely new offer.

(Eddie Yoon Founder, EDDIEWOULDGROW / Inc.)

Sunday, December 10, 2017

GermanWings McDonnell Douglas MD-95-30 (Boeing 717-2CM) (55060/5026) EC-HNZ "Espalmador"

GermanWings leased the aircraft from Aerolineas Baleares - AeBal (Spanair Link) from October 30, 2004 to March 27, 2005. It is captured on November 4, 2004 at Cote D'azur International Airport (NCE/LFMN), France.


(Photo by JC Giraud / Bernie Bianconi Slide Collection)

Saturday, December 9, 2017

Boeing delivers widebodies to Middle Eastern airlines and wins a 747 order

Boeing delivered two wide-body jets to Middle Eastern airlines and won a 747 order this week, generating some cash for the fourth quarter.

Chicago-based Boeing delivered a 787-9 Dreamliner to Oman Air and a 777 freighter to Turkish Airlines.

Boeing capped off the week by snaring a new order for the $387 million double-decker 747 from an unidentified buyer totaling 4 aircraft , according to its orders and deliveries website.

The new jumbo jet order means more work for the Everett 747 manufacturing line, which Boeing said last year it might shut down.

Airlines pay most of a new jet's price when they receive the aircraft, but also pay deposits when ordering.

"The delivery of our first 777 freighter is a milestone event in our cargo business," Turkish Airlines Chairman of the Board İlker Aycı said in a news release.

The Everett-made 777 freighter is based on the 777-200LR (longer range) passenger airplane. It has a $327.5 million list price and can fly 4,900 nautical miles with a payload of 112 tons.

"We're sure that this significant delivery, which will bring great value to our rapidly growing cargo operations, will also enable us to further compete, expand and reach new short- and long-range destinations from our hub in Istanbul," Ayci said.

Istanbul-based Turkish Airlines' cargo operation has increased its freighter destinations from 55 to 73 in 2017 and increased cargo by 29 percent to about one million tons, Ayci said.

Turkish Airlines carries over 60 million passengers a year, with direct flights to 300 destinations in 120 countries.

Boeing also delivered another Dreamliner to Gulf carrier Oman Air. That stretch 787-9 has a list price of $270.9 million.

Oman's Ambassador to the U.S., Hunaina Sultan Al Mughairy, traveled on the jet's inaugural flight from the South Carolina Dreamliner plant to Muscat on Dec. 6, according to an Oman Air news release.

The new jet has 288 seats, including 30 flat-bed business class suites designed by BE Aerospace, and 258 economy seats.

It has a state-of-the-art Thales Integrated In-Flight Entertainment System designed and developed specifically for Oman Air.

With this latest Dreamliner, Oman Air said it operates a fleet of seven Boeing 787 jets. The new jet will be used to fly passengers on Oman Air’s European and Far-Eastern routes, the airline said.


(Andrew McIntosh - Puget Sound Business Journal)

Thursday, December 7, 2017

Ethiopian Boeing 787-8 (34748/167) ET-AOT "Walia Ibex"


Seen on short final to Rwy 25L at Los Angeles International Airport (LAX/KLAX) on November 24, 2017.

(Photo by Michael Carter)

KLM Boeing 747-406(M) (30454/1258) PH-BFW "Shanghai / City of Shanghai"

Captured on short final to Rwy 25L at Los Angeles International Airport (LAX/KLAX) on December 7, 2017.

(Photos by Michael Carter)

Wednesday, December 6, 2017

Boeing comfortable with pace of 777X sales

Boeing is comfortable with the relatively slower sales of the 777X series this year given the state of the large aircraft market.

Speaking to reporters in a briefing on the development of the new wide-body, vice-president and general manager 777X program Eric Lindblad says that the 340 orders from seven customers for the new jets thus far shows strong confidence in the program.

“It’s interesting, when you compare where we were at with the 777-300ER at the same reference point in development of that aircraft, the number of orders for the -300ER was 69. I think actually there is a lot of confidence in the 777X,” he says.

This year, the only 777X order announced was from Singapore Airlines, which placed a firm order for 20 777-9s.

Lindblad says the slow sales are more a reflection of the market, which has moved away from larger aircraft for the time being.

“I expect things to improve as customers need more lift and backfilling some of their fleet plans that they’ve got today. So I feel confident about what’s in front of us,” he adds.

The 414-seat 777-9 is a development of the hugely successful 777-300ER. The smaller -8 variant, with a nominal range of 8,700nm, is aimed at the long-range market.

This means that the -8 will take on the market segment covered by the 777-200LR, which has not enjoyed as much sales success as its larger sibling.

Flight Fleets Analyzer shows that there are presently orders for 53 777-8s from three operators, while 58 -200LRs are in service with 13 operators.

Despite that poor precedent, Lindblad says that the 777-8 should be able to achieve greater success.

“I anticipate that it will have a greater customer base than what you see with the -200LR. We also expect that the -9 will be our top seller,” he says.

The 777-9 will offer a 20% seat-mile cost advantage over the 777-300ER, or around 12% compared to the rival Airbus A350-1000, he adds.

The first three 777-9s are in various stages of manufacturing, with first flight of the type expected in 2019, and entry into service in early 2020.


(Ellis Taylor - FlightGlobal News)

Monday, December 4, 2017

Boeing focused on 777-8 tweaks to meet Qantas requirement

Boeing is focusing on tweaks it may be able to make to the 777-8 to meet Qantas’s requirement for an aircraft that can fly nonstop from Australia’s east coast to Europe.

Boeing’s vice-president and general manager of the 777X program Eric Lindblad says the 777-8 is the right platform for the Australian carrier, but admits that the manufacturer will have to tweak it to meet the expectation of carrying a full passenger load on nonstop services from Sydney to London and New York.

“Today we have more work to do to make that the right airplane to do that given the Qantas requirements. We also believe that it’s pretty dang close,” he tells reporters in a conference call.

Boeing’s 777X chief project engineer Michael Teal adds that it is looking at ways to achieve additional range from the -8, which is nominally set at 8,700m based on a 352-tonne maximum take-off weight.

“If you look at the exact airplane that we have on paper today - which is not a firm configuration - it falls short of all of their desires, but exceeds many of their desires,” he says.

One option is to increase the MTOW of the aircraft, which would allow it to carry more fuel in the enlarged wing. Teal says however that this would mean some trade-off in the aircraft’s available payload.

“We’ve got to work with them to find what that range balance is,” he adds.

Qantas threw down the gauntlet to Airbus and Boeing in August asking them for an aircraft that would be able to operate nonstop from Australia’s east coast to Europe and the US west coast with a full passenger load.

Airbus is expected to pitch its A350-90ULR to meet the mission requirements, but is also likely to require some modifications to meet Qantas’s needs.

The carrier is looking to launch the extended long-haul flights in 2022-23. More recently, chief executive Alan Joyce has said that the airline could place an order for that aircraft in 2019.

While refusing to talk about timelines on a potential order, Teal was confident that it could accommodate Qantas’s delivery schedule.

“Given the conversations we have had with Qantas, I think our schedule that we have in place today would support the offer we have with Qantas,” he says.

(Ellis Taylor FlightGlobal News)

Gulfstream G650 (c/n 6285) N685GD tbr N709DS

This absolutely gorgeous aircraft destined for Steven A. Ballmer is captured on a very short final to Rwy 12 at Long Beach Airport (LGB/KLGB) this afternoon (December 4, 2017) following a pre-delivery test flight.

(Photo by Michael Carter)

Gulfstream G650 (c/n 6044) N829JV

Operated by RB Aircraft Leasing LLC, this early build G650 arrives at Long Beach Airport (LGB/KLGB) following a short flight from Los Angeles International Airport (LAX/KLAX) on December 4, 2017,

(Photos by Michael Carter)

Gulfstream G650 (c/n 6304) N604GA

The latest G650 from the factory at Savannah-Hilton Head International Airport (SAV/KSAV) , arrived on December 3, 2017 as "GLF18."
(Photo by Michael Carter)

Hawaiian using new Airbus A321neos to expand in San Diego

Hawaiian Airlines will add new non-stop service between San Diego and Kahului on the island of Maui.

Hawaiian will fly the route with its brand new Airbus A321neo narrow-body jets, offering one daily round-trip flight starting May 1. Kahului will be Hawaiian's second route from San Diego. It already flies to its main hub in Honolulu.

Hawaiian also is turning to its new A321neos to help it increase its summertime schedule on two existing routes. Hawaiian’s San Francisco-Honolulu service will get an extra flight from May 25 through July 31 while its service between Oakland and Kona on the “Big Island” of Hawaii will feature an additional flight from May 26 through Sept. 2.

Elsewhere, Hawaiian is adding an extra summertime flight on its Honolulu-Tokyo Narita and (Aug. 1-Sept. 30) and Los Angeles-Kahului (June 1-Aug. 31) routes. Those extra flights will be on Airbus A330 wide-body jets.

“We are delighted to offer travelers more options to visit our islands next summer,” Peter Ingram, Hawaiian’s chief commercial officer, said in a statement.

Ingram is set to take over as the company's CEO in March,when current CEO Mark Dunkerley retires.

Hawaiian took delivery of its initial Airbus A321neo in November, the first of 18 the carrier has on order. Hawaiian's A321neos seat 189 passengers, including 16 in business class seats and 45 in an extra-legroom economy section. The remaining 128 are standard coach-class seats.

The A321neo arrived to Hawaiian amid great fanfare. The A321neo is a next-generation update to Airbus’ popular A320 family of narrow-body jets, with the “neo” stemming from “new engine option.” The updated narrow-body aircraft is more efficient than preceding models, allowing carriers to fly the new version farther distances at normal passenger and cargo levels.

With that, Hawaiian has pledged that the A321neo will help it open new long routes between Hawaii and the U.S. West Coast. Hawaiian also is counting on its new A321s to help it phase out its aging Boeing 767 wide-bodies.

Meanwhile, the introduction of the A321neo into regularly scheduled service for Hawaiian now appears as though it will come nearly a month earlier than expected.

Hawaiian originally said its A321neos would first begin flying paying passengers Jan. 8. That was to come as Hawaiian began to slot the A321neos into service on its existing route between Oakland and Kahului.

Now, FlightGlobal reports Hawaiian plans to begin using the A32neos on Dec. 19, deploying them on existing intra-Hawaii routes. Those routes – Honolulu-Maui, Honolulu-Kona and Honolulu-Lihue (Kauai) – are intended to be “crew familiarization" flights that give workers a chance to learn the new aircraft ahead of a broader roll-out.


(Ben Mutzabaugh - Today in the Sky / USA Today)

Sunday, December 3, 2017

How the Boeing jet no one wanted became the plane airlines scour the planet for!

Delta Airlines McDonnell Douglas MD-95-30 (Boeing 717-2BD) N953AT rolls for takeoff on Rwy 25R at Las Vegas McCarran International Airport (LAS/KLAS) on December 14, 2016.
 (Photo by Michael Carter)

**The Boeing 717-200 went out of production in 2006.

**Only 156 of the planes have been built.


**A decade later, the airlines that operate the 717 want more of them.


____________________________________________________________

On May 23, 2006, Boeing delivered the last two 717-200 jetliners to customers at its Long Beach, California factory. It marked to the end of a program filled with promise but that had ultimately failed to capture the interest of airlines. Even Boeing's well-oiled sales operation could only manage to muster up 156 orders for the little 100-seat, short-haul-airliner.

Currently, the 717 is operated primarily by four airlines; Delta, Hawaiian, Qantas, and Spanish low-cost carrier Volotea. With 91 of the planes in its fleet, Delta is the by far the type's largest operator.

Incredibly, a decade after being axed from Boeing's lineup, airlines are scouring the planet looking for available Boeing 717s.

"These guys keep begging me to give them more 717s," Dinesh Keskar, Boeing's senior vice president of sales for the Asia Pacific and India, told Business Insider. "But that era over and it's not going to happen."

So how did a plane Boeing couldn't sell become an aircraft that airlines can't get enough of?


The difficult life of the 717

Well, there are several reasons, but first some background. Even though the 717 carries both the Boeing name and company's signature 7X7 naming scheme, it's not actually a Boeing. Rub on that Boeing logo with a brillo pad and some soapy water and you'll soon find the words McDonnell Douglas imprinted on the plane.

In 1997, Boeing acquired its long-time rival McDonnell Douglas for $13 billion. At the time, McDonnell Douglas produced the MD-11 widebody and the MD-80/90 narrow-body. Soon after the merger, Boeing phased out all of MD's commercial airliners. But, it spared a new variant of the iconic DC-9 airliner called the MD-95 that was set to enter service in 1999. (The MD-80/90 were also variants of the DC-9.)
To make it fit better into the Boeing's portfolio of products, the MD-95 was rebranded the 717-200.

However, that wasn't enough to convince to convince airlines to buy in.

Even though it carried the Boeing name, it was still a plane designed and engineered by a different company with differing thinking and philosophies. Thus, the 717 was an orphan that didn't belong to any of Boeings product families.

"We have the 737MAX 7,-8,-9, and -10. We have a family," Keskar said. "You talk to others and they'll tell you that family has a lot of value."

For airlines, there's great financial incentive to have aircraft of varying sizes and roles being operated by the same crew and serviced by the same maintenance teams using the same spare parts. There's a whole of synergy there.

Even though the McDonnell Douglas DC-9/MD-80/MD-90 still served as the backbone of many major US airlines like American, Northwest, and Delta, none of the big boys would take the bate. In fact, when American acquired Trans World Airlines in 2001, it sold off all of its 717s.

During the turbulent days of the early 2000s, the airline industry was reeling from the terrorist attacks on 9/11 and spiking fuel prices. Which means many of the 717's potential customers were either in no financial position to buy any planes or were dumping its aging MD fleet in favor of more fuel-efficient planes like the Boeing 737NG or the Airbus A320.

Interestingly, the people who did buy the plane loves them.

"They're brilliant aircraft. Anyone who has them wants more of them," Qantas CEO Alan Joyce told Business Insider.

And Hawaiian Airlines CEO Mark Dunkerley echoed those sentiments.

"It's great little secret. For what we do here in Hawaii, there's no better aircraft built today or even on the drawing board."

Delta CEO Ed Bastian also praised the 717 for its durability and reliability during a recent interview with Business Insider.


The rebirth of the 100-seat airliner

 

As with many things in life, what is old is new again. As the airline industry recovered, demand for air travel boomed while investors ratcheted up the pressure to lower unit costs. The solution; upgauging to bigger planes.

As a result, Boeing and Airbus both neglected the 100-150 seat market in favor of bigger, pricier, and higher margin models.

While this was happening, another little phenomenon happened in the airline industry, the regional jet. During the 2000s, Bombardier's CRJ and Embraer ERJ made their presence felt in a big way by offering small 50-70 seat regional jets that allowed airlines and their regional partners to serve routes traditionally operated by turboprops with jets.

"Back in 2009 we had over 500 small aircraft," Bastian said. "The CRJ-200 was our predominant fleet type."

Over time, airlines began to upgauge their regional jets with mainline aircraft. That's where the 717 jumps back into the picture.

With around 100-130 seats, the 717 is the perfect size aircraft to take over for regional jets. In fact, Boeing used to market the 717 as the "Full-size airplane for the regional market."

"The 717 is very much about how do we get out of the regional jets," Bastian said. "Customers hated the small regional jets, our employees hated them because they looked at it as an outsourcing of their jobs, and our [investors] hated them because they're fuel inefficient and their ownership costs were escalating."

"Even the regional operators didn't the like them cause they are losing money on it because we had the contracts screwed down pretty low," Bastian added.

With the addition of AirTran Airways' fleet of 88 717s following the low-cost carrier's acquisition by Southwest, Delta was able to drop 200 regional jets from its fleet.

Unfortunately, for Delta or anyone else looking to their hands on a batch of 717s, they are pretty hard to come by. Delta currently operates roughly 60% of all 717s ever made while Qantas and Hawaiian, the second and third largest operators, have no plans to relinquish their planes anytime soon. And while Volotea's said that they will replace their 17 717s with Airbus A319s, there still aren't that many of the 100-seaters out there.



Since discontinuing 717, Boeing has also stopped selling the smallest variant of the 737, the 737-600. As a result, the company has abandoned the 100-150 seat market.

That's where a plane like the Bombardier C Series, now under Airbus control, comes into the picture. The CS100 is of a similar size to the Boeing 717, but much greater range and fuel efficiency.

According to Bastian, Delta's long-term plan is to eventually replace the airline's older 717s with the 75 CS100 jets it has on order.

Two decades after it first flew, the Boeing 717-200 is still going strong. Even though Boeing didn't sell many of them, those that did buy the 717 can't get enough of them. That's a sign of a great plane.


(Benjamin Zhang - Business Insider)

Saturday, December 2, 2017

Boeing, LOT Polish Airlines Celebrate Delivery of 737 MAX


LOT Polish Airlines first 737-8 Max (64067/6681) SP-LVA which also happens to be the first MAX for Airline Leasing Corp (ALC) departs Seattle Boeing Field (BFI/KBFI) as "PoleLot 9737" on her delivery flight December 1, 2017. 
(Photo by Joe G. Walker)

Poland's flag-carrier is the first in Central & East Europe to fly the new 737 airplane

Boeing and LOT Polish Airlines celebrated the delivery of the first 737 MAX for the carrier, ushering the new and improved 737 airplane into the central and east Europe market. The jet is also the first MAX placed by leading airplane lessor Air Lease Corporation.

LOT, the Polish flag carrier, plans to take delivery of additional MAX airplanes as part of its strategy to profitably grow its airline.

"We are proud to be one of the first carriers in the world with the state-of-the-art Boeing 737 MAX aircraft in our short- and middle-haul fleet," said Rafal Milczarski, chief executive officer, LOT Polish Airlines. "We are already one of the fastest growing European airlines and I am certain that this big step forward will help us achieve our goals of increasing our operational effectiveness and improving our service.


With the most modern Boeing 787 Dreamliners and brand new 737 MAX we are the most comfortable airline for our customers, more cost efficient and last, but not least, friendlier to the environment. Thanks to the cooperation with our partners, LOT is again one step ahead to set the tone for shaping the future of aviation industry in our region."

The 737 MAX delivers the highest efficiency, reliability and passenger comfort in the single-aisle market by incorporating the latest technology CFM International LEAP-1B engines, Advanced Technology winglets, the Boeing Sky Interior, large flight deck displays, and other improvements. The efficiency gains helped make the MAX the fastest selling airplane in Boeing history with more than 4,000 orders to date from 92 customers worldwide.

"We are very pleased to announce this first 737 MAX lease placement with LOT, which is the first of six new 737 MAX 8s on long-term lease to the airline. The MAX 8 offers new efficiencies and an enhanced passenger experience that will better serve LOT's growing route networks," said Steven F. Udvar-Hazy, Air Lease Corporation's Executive Chairman. ALC has 129 more 737 MAX airplanes on order.

"LOT has been a valued customer for decades and we are delighted that it has become one of the first operators of the MAX in Europe," said Monty Oliver, vice-president Europe Sales, Boeing Commercial Airplanes. "The 737 MAX will provide LOT unmatched efficiency, range, reliability and operating costs all while continuing to provide a premium on-board experience for its passengers."

Apart from the six 737 MAX 8s, LOT plans to expand its fleet of super-efficient and passenger-pleasing Dreamliners by adding four more 787-9s by the end of 2019.

The airline is using the new airplanes to grow its network. Since 2016, LOT has announced the launch of 42 routes, including long-haul service from Warsaw to Los Angeles, Newark and Kraków to Chicago. In May 2018, LOT will launch connections from Warsaw to Singapore as well as from Budapest to New York City and Chicago


(Daniel Mosely - European Communications Boeing Commercial Airplanes)

Delta adds stops to final 747 tour

Delta Airlines Boeing 747-451(23821/742) N666US arrives at Los Angele International Airport (LAX/KLAX) on November 18, 2017 operating an NFL charter flight.
(Photo by Michael Carter)

Delta Air Lines has added stops in Los Angeles and Paine Field near Seattle to the farewell tour for its final Boeing 747.

The 747-400 will fly from Detroit to Paine Field then on to Seattle Tacoma International airport on 18 December, as well as stop at Los Angeles International airport on 20 December, the Atlanta-based carrier says today.

The new stops are in addition to the Detroit-Seattle, Seattle-Atlanta and Atlanta-Minneapolis/St Paul flights from 18-20 December that were previously announced. The flights are only open to booking by employees and members of Delta's frequent flier program.

Delta is the last remaining scheduled passenger operator of the 747 in the USA, following United Airlines last revenue flight between San Francisco and Honolulu on 7 November.

The SkyTeam Alliance carrier will operate its last regularly scheduled 747 flight from Seoul Incheon to Detroit on 17 December.

Delta inherited its 747s from Northwest Airlines when the carriers merged in 2009. It previously operated the 747-100 from 1970 to 1977.


(Edward Russell - FlightGlobal News)

Niki Lauda still interested in NIKI if Lufthansa deal is blocked

Niki Lauda
(NL Holding)

Niki Lauda, ex-Formula 1 champion and founder of Austria-based airberlin subsidiary NIKI, confirmed his ongoing interest in partnering with UK-based Thomas Cook Group and its German leisure airline subsidiary Condor to bid for NIKI.

The Lufthansa Group has reached an agreement to take over NIKI, but the European Commission (EC) is seriously considering blocking that transaction over competition concerns. If the Lufthansa-NIKI deal is disallowed by regulators, Lauda and Thomas Cook Group could revive their bid for NIKI.

“Yes, our interest is there,” Lauda told ATW in Vienna. “I’m very interested and waiting to see what the European Commission does.”

Reuters reported Dec. 1 the EC, which is concerned about Lufthansa’s dominance as a result of the NIKI-takeover, has extended its deadline for a decision on the deal from Dec. 7 to Dec. 21.

Lufthansa has offered concessions to allay competition concerns, according to Reuters.

Lauda has long criticized the dominance of the Lufthansa Group in Austria. That dominance would become even more troubling if NIKI is integrated into Lufthansa’s LCC subsidiary Eurowings, Lauda said.

“If NIKI becomes part of Eurowings, the market share of the Lufthansa Group at Vienna in the morning peak-hours on routes to Germany and Switzerland will grow to 95%,” an industry source in Austria said.

“We, as the Lufthansa Group, are investing millions of euros into NIKI to keep their operations going” until the takeover closes and are eager to see the deal cleared, a Lufthansa Group executive told ATW.

Theo Thanner, the head of Austria's competition authority, said the EC is well aware that if the deal between Lufthansa and NIKI is blocked, more than 800 jobs at NIKI would be in jeopardy.


(Kurt Hofmann - ATWOnline News)

US court orders Atlas Air Worldwide pilots to halt work slowdown

A US federal court has granted Atlas Air Worldwide Holdings’ request for a preliminary injunction against its pilots. The Purchase, New York-based cargo operator had accused the pilots of its Atlas Air, Polar Air and Southern Air subsidiaries of an intentional work slowdown amidst ongoing contract negotiations.

In the court ruling, federal judge Randolph Moss of Washington DC ordered the pilots represented by the International Brotherhood of Teamsters (IBT) to cease “encouraging, permitting, calling, engaging in, or continuing any strike, work stoppage, sick out, concerted refusal to volunteer for or to accept work assignments (including, without limitation, open time flights), [or] slowdown.”

Further, the ruling said the injunction will remain in effect until the expiration of the 30-day “cooling-off” period following termination of contract mediation talks by the National Mediation Board, if the situation comes to that.

Daniel Wells, the president of the local IBT chapter in Purchase representing Atlas pilots, said the union disagreed with the judge’s decision and will appeal it swiftly.

Atlas said the court’s decision requires the IBT “to meets its obligations under the Railway Labor Act and stop its illegal and intentional work slowdown.” In the company’s third-quarter financial results conference call, Atlas president and CEO Bill Flynn said Atlas Air and Polar Air had seen a significant increase in sick and fatigue calls by pilots near the time of departure. The company posted a $24.2 million net loss for the third quarter.

IBT Atlas executive council chairman Robert Kirchner responded at the time by saying the company had grown too fast and could not keep pace in terms of pilot hiring. Inadequate pilot pay has also been a factor, Kirchner indicated, causing many pilots to depart the company. IBT said 216 pilots have left Atlas Air since the start of 2017, a 65% surge compared to all of 2016. Additionally, IBT has argued there are legitimate fatigue and health issues among Atlas pilots as the company’s operations are allegedly stretched to, among other growth initiatives, meet commitments to fly 20 Boeing 767-300 freighters for e-commerce giant Amazon by the end of 2018.

Flynn has rejected the notion that Atlas does not have enough pilots.

“[Atlas] pilots remain dedicated to shining a light on the serious staffing and operational challenges at the Atlas Air Worldwide airlines,” IBT’s Wells said. “After years of chronic mismanagement and intensifying pilot shortages, the fundamentals of our operation are crumbling every day, putting the success of our carriers and commitments to customers like DHL and Amazon at risk.”

Wells said the pilots will comply with the judge’s orders, “but it won’t solve the immense problems we face, and we are committed as ever to getting our airlines back on track.”

Atlas said it is continuing to negotiate with the IBT for a joint contract for Atlas and Southern Air crewmembers in connection with the carriers’ merger. Atlas completed its acquisition of Cincinnati-based Southern Air in April 2016.


(Mark Nensel - ATWOnline News)

Friday, December 1, 2017

Norwegian Air Shuttle Is Flying On a Wing and a Prayer

Diego Maradona's "Hand of God" goal helped Argentina dump England's soccer team out of the World Cup in 1986. Three decades later, divine Argentine assistance might be needed by another colorful adventurer: Bjorn Kjos, the boss and co-founder of Norwegian Air Shuttle ASA.

Kjos has plenty on his plate running a European budget carrier and adding cheap services across the Atlantic. Undaunted, he's setting up a low-cost airline in Argentina to boot. Norwegian is targeting $4.3 billion of investment in the country over the next decade and plans direct international flights between Buenos Aires and destinations such as Los Angeles and New York, Bloomberg News reported on Wednesday.

Norwegian's balance sheet is weak enough already and management attention is stretched thin. The ratio of lease-adjusted net debt to Ebitda and aircraft rent expense is about 10 times, compared to a European peer average of about 3 times, according to Bloomberg Intelligence data.

In business, it's said there's no opportunity without risk, but Kjos seems especially fond of throwing caution to the wind. Investors who've held on despite a 37 percent stock price decline this year, will continue praying that he knows what he's doing.

It's easy to see why Kjos finds Argentina appealing. Until recently, state-run Aerolineas Argentinas held a virtual monopoly, meaning fares there are comparatively high. Without a budget option, plenty of people take the bus or train despite the long distances. Norwegian should be able to stimulate new demand in Argentina, as Wizz Air Holdings Plc has done in eastern Europe.

Norwegian has regulatory approval for more than 150 Argentinian routes, meaning it will need up to 70 aircraft eventually. It will start off with fewer than that, of course. Though it will probably lease most of those planes, Norwegian's Argentinian adventure isn't free. One reason investors have taken fright this year is because margins have been squeezed by the high cost of starting new intercontinental services. Norwegian has to hire and train staff.

There's no guarantee the Argentina unit won't face similar operational or regulatory pressures. While the local economy has exited recession, consumer price inflation is still expected to be about 25 percent this year.

Then there's competition. Norwegian's long-haul services from the U.S. to Europe have already spawned low-cost imitators. There's a risk of the same happening in Argentina. Avianca Holdings SA is targeting the country, as is startup Flybondi. JetSmart, owned by investor Bill Franke's Indigo Partners, is setting up in neighboring Chile and recently ordered scores of Airbus jets.

Norwegian can ill afford another fare battle. The company wants to expand its fleet by about two-thirds by 2019, yet it's already highly leveraged and had only $700 million of cash and equivalents at the end of September.

Ryanair Holdings Plc boss Michael O'Leary has asserted that Norwegian isn't "long for this world," a comment that needs to be treated with appropriate skepticism (Norwegian has pinched some Ryanair pilots). Kjos has proven adept at tapping new sources of aircraft finance. Even so, his globe-spanning ambitions do depend on a wing and a prayer.


(Chris Bryant - Bloomberg)