New German airline Azur Air has taken delivery of the first of two Boeing 767-300ERs and is preparing to start operations this month. The Düsseldorf-based carrier plans to operate leisure flights.
According to its website, Azur Air is owned by Amsterdam-based Holding NW International BV.
Leased 330-seat Boeing 767-33A(ER) (27909/591) D-AZUA will be first used for ground training and is undergoing final preparations for licensing by the German Aviation Federal Office.
First destinations from Dusseldorf will be Palma de Mallorca (Spain); Rhodos (Greece); Hurghada and Marsa Alam (Egypt); and Antalya (Turkey). From July, long-haul flights are planned to Punta Cana (Dominican Republic). Azur Air also plans flights from Berlin Schönefeld to several of these destinations.
By the end of this year, the fleet is expected to grow to three aircraft.
For the winter season, the network should also include Phuket (Thailand) and Varadero (Cuba).
El Al Israel Airlines will launch its first Boeing 787 flights in September from Tel Aviv to destinations in Europe, followed by services to North America and the Far East from October.
By 2020, the Israel flag carrier expects to operate 16 Boeing 787-9s, which are replacing its 747-400s and 767-300s, El Al said in a June 23 statement.
Rendering of 787 in El Al livery (Boeing)
On June 21, El Al firmed orders for two additional 787-8s and one 787-9 valued at more than $729 million at list prices, which are part of El Al’s original commitment for up to 15 787s in 2015. The airline has six unfilled orders for 787s that it will take directly from Boeing.
El Al’s 787s will offer 28 seats in premium-economy, 32 seats in business and 222 in economy class.
Tel Aviv-based El Al has selected US technology company ViaSat to provide high-speed Wi-Fi, which will be offered from 2018 onward, the airline said in a statement.
The first Dreamliner to be delivered will be a 787-9 later this summer, according to Boeing.
El Al also has lease agreements in place for seven 787s.
Low-cost carrier Norwegian will launch 4X-weekly London Gatwick-Buenos Aires Ezeiza services from Feb. 14, marking the airline’s first-ever South American route.
Buenos Aires will become Norwegian’s 11th long-haul route from Gatwick as part of its continued expansion from the UK into a range of new global markets.
The LCC currently offers long-haul flights from Gatwick to nine US cities and Singapore.
Norwegian CEO Bjorn Kjos said, “From Europe, the US, Asia and now South America, our long-haul network is going global and the UK will continue to be at the heart of our ambitious plans for expansion. We also see huge potential in the Argentinian market so this is not only a major milestone as our first South American route, but also a first step toward ambitious plans for international and domestic growth in Argentina.”
The new London-Argentina route will be operated by its Norwegian UK (NUK) subsidiary, which was established in 2015 to give the airline a stronger foothold in the UK market. NUK also allows the carrier to access bilateral traffic rights to a series of new markets in Asia, Africa and South America.
NUK is headquartered at London Gatwick, and will use British-registered aircraft and Gatwick-based crew to operate the new services.
In January, Norwegian also established an Argentinian subsidiary, Norwegian Air Argentina, with plans for a considerable operation in Argentina, including domestic flights.
“Norwegian’s new direct route to Buenos Aires shows the low-cost, long-haul revolution continues to break new ground. The boom in these routes is a major factor in Gatwick, recording the second largest increase in direct connectivity of any European airport over the last five years,” Gatwick Airport CEO Stewart Wingate said.
Norwegian carries more than 5 million UK passengers each year from five UK airports, to over 50 destinations.
Strong sales of the 737 MAX family powered Boeing past Airbus in the sales race at last week's Paris Air Show.
The most important air show of the year is always held in Europe. Airbus operating on its home turf -- usually makes a point of outpacing its American rival Boeing in the order race. Last year, Boeing's order haul at the Farnborough Airshow was so dismal that the company felt the need to fudge the numbers in its end-of-show press release to save face.
However, Boeing didn't have any trouble selling airplanes at this week's 2017 Paris Air Show. The launch of the new 737 MAX 10 and solid demand for the Dreamliner wide-body allowed Boeing to score a clear victory over Airbus in terms of deal activity.
Firm order totals were relatively similar
Looking just at new firm orders, Boeing and Airbus were relatively evenly matched. Airbus announced firm orders for 144 aircraft at the Paris Air Show: 132 A320-family narrow-bodies and 12 wide-bodies. The vast majority of those orders came from General Electric's GECAS aircraft leasing arm, which ordered an additional 100 A320neos.
Meanwhile, Boeing announced new firm orders for 134 aircraft: 97 737s and 37 wide-bodies. Separately, Qatar Airways announced that it had firmed up an order for 20 737 MAX 8s. (It's not clear why Boeing didn't mention this deal in its press release.)
In terms of raw numbers, these firm order totals were pretty similar. However, Boeing's firm orders included a higher proportion of wide-body aircraft -- which typically cost more than twice as much as narrow-bodies like the 737 or A320 -- so the total value of these deals was considerably higher for Boeing.
Boeing racks up hundreds of commitments for the 737
Most of the deals announced by Boeing in the past week were commitments rather than firm orders. Commitments are not binding contracts, but they are usually (albeit not always) converted into firm orders sooner or later.
In total, Boeing announced commitments for 418 737 MAX aircraft at the Paris Air Show. Much of this activity was driven by the launch of Boeing's new 737 MAX 10 jet -- the largest member of its 737 family -- as well as a last-minute commitment for 125 737 MAX 8s from a "major unidentified airline customer" that was revealed on Thursday morning.
Boeing also announced commitments for 19 wide-bodies (mainly 787 Dreamliners) from four customers this week. This gave it a total of 437 commitments for the week. By contrast, Airbus logged just 182 commitments during the Paris Air Show, consisting of 174 commitments for A320-family aircraft and eight for the A330neo.
Wide-body deals were also a differentiator
Including commitments rather than just firm orders, Boeing won the pure numbers game by a wide margin: 571-326. However, winning lots of orders for narrow-bodies isn't very impressive in the current climate, because demand for these aircraft exceeds production capacity.
By contrast, Boeing and Airbus both need more wide-body orders to solidify their production plans for the next several years. Here, too, Boeing outperformed Airbus by a wide margin last week.
Boeing announced deals for 56 wide-bodies at the Paris Air Show. It started strong, signing up two aircraft leasing companies on Monday for a total of 38 Dreamliners. By the end of the week, it had announced firm orders for 33 Dreamliners along with 17 commitments. Boeing also secured a firm order for four 777-300ERs, along with a commitment for two 777 freighters.
In the meantime, Airbus only managed to drum up three relatively small widebody orders last week. Ethiopian Airlines placed a firm order for 10 more A350-900s, Hi Fly ordered two A330-200s, and Zagros Airlines placed a commitment for eight A330neos.
A comeback year for Boeing
As of the end of May, Airbus had logged just 73 new firm orders in 2017, compared to more than 200 for Boeing. Many pundits thought Airbus might even the score at the Paris Air Show. Instead, it looks set to fall further behind -- especially once Boeing starts firming up the hundreds of commitments it announced during the week.
Airbus still has a significantly larger narrow-body backlog than Boeing. But on the wide-body side -- where orders are needed more urgently -- Boeing was already well ahead of Airbus before the Paris Air Show. It increased this advantage last week, suggesting that 2017 will be a comeback year for Boeing in the long-running battle with Airbus for orders.
The South Carolina Boeing plant where President Donald Trump spoke about saving American jobs is laying off almost 200 workers, the company says.
Boeing’s South Carolina assembly plant has notified employees that they will be off the company's payrolls from 25 August, company spokeswoman Lori Guntr told The Independent.
The layoffs are part of a larger effort to cut costs at Boeing, where intense competition with rival manufacturer Airbus has forced the company to lower prices and make savings. Orders for the company’s signature 777 jet have also slowed, with production down nearly 60 per cent from its peak.
The company told employees in December that it would resort to layoffs “as a last resort”. But they went on to announce some workers would be made redundant at their Washington plant in March, and the first-ever round of layoffs at the South Carolina plant were declared on Friday.
“We have gone through a variety of other ways of improving competitiveness at the South Carolina site, including voluntary layoffs and costs reductions,” Ms Guntr said. “...We had exhausted all of those and we still were not at the level that our business requires.”
The layoffs come just months after Mr Trump addressed crowds at the South Carolina plant and assured them he would “put our great people back to work”.
"My focus has been all about jobs. And jobs is one of the primary reasons I'm standing here today as your president," Mr. Trump said. "And I will never, ever disappoint you.”
The President campaigned heavily on creating more jobs for Americans, and has frequently touted the number of jobs he says his administration has created.
The US economy added about 600,000 jobs in the first four months of Mr Trump’s presidency, according to the Bureau of Labor Statistics. In the four month before his election, it added about 840,000.
Last month, the Carrier manufacturing plant where Mr Trump claimed he had saved 1,100 jobs – and promised to create even more – announced it would be cutting more than 600 jobs by the end of the year.
“I am appreciative of what took place,” Carrier employee Robert James told The Daily Beast. “But there are still 500-some people who are going to be unemployed. And he bragged about saving 1,100 jobs.”
My last photo of the day as the clouds broke just long enough for me to capture this lovely aircraft as she arrived at Denver International Airport (DEN/KDEN) following a brief late afternoon rain shower on June 17, 2017.
The first new jet for Poland's government officials, U.S. made Gulfstream G550, is blessed by a priest after it landed at the military airport, in Warsaw, Poland, Wednesday, June 21, 2017. Since early 1990s Poland has been planning to buy new planes for VIP's to replace Soviet made aircraft.
(Alik Keplicz - AP Photo)
The first of five Western-made jet aircraft acquired by Poland to transport Polish government officials arrived in the country on Wednesday.
A U.S.-made Gulfstream G550 (c/n 5547) N547GA tbr 0001 capable of carrying 19 people landed at the military section part of Warsaw's Frederic Chopin Airport to an official welcome and a Catholic blessing.
For over two decades, consecutive governments postponed the costly purchase of VIP planes while the Soviet-made fleet inherited from the communist era was aging and developing technical problems.
In 1999, a government plane carrying the Senate speaker made an emergency landing in the Saudi Arabian desert. There were other incidents.
Poland's Defense Minister Antoni Macierewicz speaks during the welcoming ceremony of the first new jet for government officials, U.S. made Gulfstream G550, at the military airport, in Warsaw, Poland, Wednesday, June 21, 2017. Since early 1990s Poland has been planning to buy new planes for VIP's to replace Soviet made aircrafts. (Alik Keplicz - AP Photo)
The current government decided to buy two Gulfstream G550 and three Boeing 737 jets.
The ruling party leader, Jaroslaw Kaczynski, is sensitive to air travel safety because his twin brother, President Lech Kaczynski was killed in a 2010 plane crash. The crash in Russia was not blamed on any technical issues.
Since the crash, state officials traveled by chartering regular flights of the Polish LOT airline or on military helicopters and transport planes.
The Bedek Aviation Group, responding to a surge in used-freighter demand, is teaming with Mexicana MRO Services to open a Boeing 767-300 conversion site in Mexico City, the Israel Aerospace Industries (IAI) subsidiary announced. The first aircraft, part of an order for “a number of” conversions, is expected to be inducted by July 1, Bedek said.
“We are experiencing a period of increased demand for conversion into freighters, and Bedek is up to its neck in work,” said Yosi Melamed, Bedek executive v-p and general manager. “The collaboration with Mexicana has significant business potential and is good news for both parties,” he continued, adding that such arrangements “allow us to make time for development activities and reduce the workload in Israel to provide faster and better service to our many customers.”
Mexicana, a subcontractor on the project, sent dozens of employees to IAI’s Israeli headquarters for training. IAI will retain engineering authority and overall responsibility for the conversions.
Business aviation analyst Brian Foley believes that aircraft such as the Dassault Falcon 5X will lift deliveries of large-cabin business jets once they enter the market. (Photo: Dassault Falcon)
Noting that supply has evened out with demand, business aviation market analyst Brian Foley predicts that the market for new aircraft is going to remain flat for the foreseeable future. In his recent forecast, Foley likened the current market to what he referred to as the “Lost Decade,” a period between 1986 and 1996 when business jet deliveries stagnated at about 350 units each year. “It’s going to potentially be an even a longer period than the Lost Decade,” Foley said. But the silver lining, he added, is that the deliveries will average between 650 and 750 units per year over the next few years, rising to 775 to 825 after that through 2025. This is double that of the so-called Lost Decade.
Many important economic indicators have stabilized since the downturn, including corporate profits, the stock market and even gross domestic product, Foley pointed out. Along with it, so have many industry indicators. The pre-owned market, which had reached a point where almost one in five jets was for sale during the economic crash, has now returned to normal levels. The number of business jet takeoffs and landings are coming back. But the puzzling piece is the lack of significant return of deliveries since the downturn, he said.
Foley pointed to a number of key changes in the market today. In 2008, he said, it was almost the perfect storm: credit was easy to obtain; a weak dollar made it cheaper to buy U.S. products; a number of markets were emerging; and commodity prices were soaring. “Today, it is almost a complete flip-flop,” he said. “If you are not in the U.S., you are probably seeing generally some sort of economic weakness. The dollar is a lot stronger, so buying offshore is more expensive…and commodity prices fell off a cliff.”
While corporate profits came back, Foley pointed to a “business mentality in corporations that you have to do more with less. Even though economic indicators are up, everyone is still a little bit skittish.”
Another factor is plummeting residual values. “Where’s the floor?” he asked, adding that business jets are now behaving more like a capital good. “There are more than 20,000 flying. They are not such a hard thing to come by.” Also business aviation consumers have many more options than outright purchase of aircraft, including jet cards and membership programs.
By cabin size, he forecasts that, by percentage, deliveries of larger-cabin aircraft will continue to dip below those of below small-cabin models over the next year, but will return to account for roughly 40 percent of the market as some of the newer large business jets, including the Dassault Falcon 5X, Gulfstream G500/G600 and Bombardier Global 7000, reach the market.
Once those aircraft begin entering service, the value of the business jet market, which began to fall after 2015, will begin to strengthen, Foley said. But he does not see a return to the 50 percent share the large-cabin jets held earlier this decade.
Geographically, North America, which accounts for two-thirds of the business jet fleet, will continue to dominate. But a stronger Euro and improved European stock markets are bolstering the market in Europe. The Central and South American markets, which have just a few more business jets than in Western Europe, however, are likely to remain soft for the foreseeable future, Foley predicted. “I can see that sitting out for five to 10 more years,” he said.
CFM International, the GE Aviation/Safran Aircraft Engines joint venture, secured orders for $27.3 billion worth of engines at list prices at this week’s Paris Air Show.
Significantly, CFM won all of the order competitions for Airbus A320neo engines, with its LEAP-1A beating out rival Pratt & Whitney’s PW1100G.
“This air show has far surpassed all of our expectations,” CFM president and CEO Gaël Méheust said.
Among the highlights were LEAP-1A orders from China’s Spring Airlines (120 engines), International Airlines Group (110), GE Capital Aviation Services (200), ICBC Leasing (80), China Southern Airlines (100), Air Lease Corp. (50), China Eastern Airlines (140) and VEB Leasing (40).
Iran Airtour CEO Reza Mousavi, Airbus Commercial Aircraft EVP-Middle East & North Africa Fouad Attar and Iran Airtour chairman Majid Shekari. (Airbus)
Tehran-based Iran Airtour Airlines has signed a memorandum of understanding (MOU) to purchase 45 Airbus A320neo family aircraft, Airbus said at the Paris Air Show June 22.
Variant specifics for the aircraft were not detailed in the announcement; at minimum, the planned acquisition is valued at approximately $4.5 billion.
If cleared, this will be Iran Airtour’s first order with the Toulouse-based manufacturer. Airbus said the MOU is contingent upon all necessary approvals, including those from the Office of Foreign Assets Control.
Iran Airtour presently operates a fleet of two Boeing 737-300s a 737-500 and six DC-9s. In a statement, Airbus said the airline will benefit from the new aircraft to modernize its fleet and expand its operations to domestic and international markets.
“The A320neo family … will contribute to our growth and expansion strategy,” Iran Airtour Airlines chairman Majid Shekari said. “Our success as a domestic and regional airline will be reinforced by this investment.”
Airbus will fit new fixed and deployable combined flight data and voice recorders as standard on long-range aircraft starting in 2019 in a bid to make it easier to find aircraft wreckage in the event of an accident over the sea.
The Toulouse-based manufacturer has teamed with commercial and military avionics specialist L3 Aviation Products and DRS Leonardo to develop the devices, which will be fitted on the A350 XWB first, beginning in late 2019, before being offered on A380s, A330s and A320LRs.
L3 Aviation will design and manufacture the lighter and more compact fixed, crash-protected cockpit voice and data recorder (CVDR), which will be able to record up to 25 hr. of voice and flight data, in line with new EASA and ICAO requirements that require an increase from the current 2 hr. of voice recording.
L3 Aviation and Airbus will integrate the automatic deployable flight recorder (ADFR), designed and manufactured by DRS Technologies Canada, part of Leonardo DRS.
The ADFR will be fitted at the rear of the aircraft and is designed to deploy automatically via a preloaded spring system in the event of water submersion or significant structural deformation of the aircraft. It can float and is aimed at long-range aircraft that fly for extended periods over water or in remote areas.
The crash-protected ADFR can also store up to 25 hr. of recorded cockpit voice and flight data. It is fitted with an emergency locator transmitter to help rescuers locate and recover it rapidly.
The plan is the result of discussions about the difficulties of locating aircraft that have crashed into the sea, following the crash of Air France flight 447, an A330, in 2009 and the disappearance of Malaysia Airlines flight 370, a Boeing 777, in 2014.
“We have had a few cases recently where everyone is frustrated because they just don’t know what happened,” Airbus Commercial Aircraft EVP-engineering Charles Champion said at the Paris Air Show this week. “Of course, we could think about real-time transmission of data—it will come eventually—but in the meantime, especially in very remote areas, you need to think of a hard solution in order to be able to answer all the open questions.
Airbus said two of the new fixed CVDRs will be deployed on shorter-range A320 airliners.
“This is about Airbus’s wish to go beyond the regulations to improve the chances of recovering data in the event of an accident,” Airbus product safety enhancement manager Géraldine Vallée told journalists at a pre-Paris Air Show briefing.
She added that the company has done feasibility studies into retrofitting the deployable recorder and concluded that it was technically possible but would be very expensive because of the large-scale restructuring of the aircraft’s cables that would be needed.
Zagros Airlines CEO Seyed Abdolreza Mousavi. (Airbus)
Iranian domestic carrier Zagros Airlines has signed a memorandum of understanding (MOU) with Airbus for the purchase of 28 aircraft at the Paris Air Show, Airbus announced June 22. The Tehran-based airline intends to buy 20 A320neos and eight A330-800neos, an acquisition valued at $4.2 billion at list prices.
“[Zagros has] been a loyal operator of the A320 family,” Zagros Airlines CEO Seyed Abdolreza Mousavi said. “This represents a practical step for Zagros Airlines’ fleet renewal as well as expanding our operations both domestically and internationally.”
Zagros operates a fleet of 11 Airbus A320 family aircraft, in addition to nine DC-9s.
“[These aircraft] will allow Zagros to modernize and expand its fleet with minimum change benefiting from our fleet commonality which is unique to Airbus,” Airbus COO and Commercial Aircraft president Fabrice Brégier said at the signing.
Airbus said the MOU is contingent upon all necessary approvals, including those from the Office of Foreign Assets Control.
Qatar Airways has made an unsolicited bid to take up to a 10% stake—an investment of at least $808 million—in American Airlines, an SEC filing American submitted Thursday revealed.
According to the June 22 filing, Qatar Airways would buy the stake on the open market. If that happens, it would make the Doha-based carrier one of American’s largest investors. Dallas/Fort Worth-based American stresses that the proposal was not solicited and says it “would in no way change the company’s board composition, governance, management or strategic direction.”
For now, it is unclear if or how the deal will proceed. In its filing, American states that its certificate of incorporation prohibits anyone from acquiring 4.75% or more of the company’s outstanding stock without advance approval from the board following a written request. The company’s board did not receive any written request from Qatar Airways, American says. American also notes that foreign ownership laws limit the total percentage of foreign voting interest in a US company to 24.9%.
Both airlines are oneworld global alliance members, but they are also rivals on either side of the fractious US Open Skies dispute. American is one of the three US major carriers campaigning against what they allege to be unfair, government subsidized practices by Doha-based Qatar Airways and UAE-based Emirates Airline and Etihad Airways. The US has Open Skies agreements with Qatar and the UAE, which has allowed the Gulf carriers to expand services to the US.
In its filing, American makes clear Qatar Airways’ bid does not change its viewpoint on this issue, stating, it “does not alter American Airlines’ conviction on the need to enforce the Open Skies agreements with the UAE and the nation of Qatar and ensure fair competition with Gulf carriers, including Qatar Airways. American Airlines continues to believe that the President and his administration will stand up to foreign governments to end massive carrier subsidies that threaten the US aviation industry and that threaten American jobs.
Qatar Airways has been on an airline investment spree. Late last year it acquired a 10% stake in LATAM Airlines Group, another oneworld member, and it has also increased its stake in IAG—parent of British Airways—to 20%.
While Airbus and Boeing racked up orders for narrow-body aircraft at the 2017 Paris Air Show, with the newly launched 737 MAX 10 garnering the most attention, wide-body orders have been few and far between this week.
Several of the wide-body orders that were announced were disclosures of customers for sales already on the books or the firming of options. Significantly, Boeing so far has announced no new orders for the 777X; the manufacturer already is making two production rate cuts to the 777 program this year because of weakness in wide-body sales.
Why are airlines shying away from wide-body orders? Five major reasons:
Delta Air Lines CEO Ed Bastian said earlier this year that there is “excess capacity in wide-bodies as we look to the future of the industry as a whole.” That means many airlines feel they have enough already—Delta and American Airlines have collectively deferred 32 A350-900s this year—and, if they do need a few in a pinch, there is a surplus of used wide-bodies available at very attractive prices.
Middle East challenges
The Big Three Gulf carriers—Emirates Airline, Etihad Airways and Qatar Airways—have been the big drivers of wide-body orders in recent years. But these are difficult times for those airlines for a number of reasons, including the laptop ban, the diplomatic rift between Qatar and its Gulf neighbors, the ongoing conflicts in Syria and Yemen and basic business issues such as Etihad’s problematic foreign investments. The Gulf carriers are simply in no position to order more wide-bodies at this time.
Neo and MAX range
The A321neoLR has a range of 4,000nm while the 737 MAX 7, 8 and 9 all can fly at least 3,500nm. Norwegian is planning to deploy the MAX 8 on transatlantic routes. These extremely efficient aircraft can operate many shorter long-haul routes that were previously only viable with wide-bodies. So airlines can buy a cheaper aircraft and deploy it at less risk from a capacity standpoint on routes that used to be the province of wide-bodies. That is making carriers think twice about wide-body purchases. Waiting for what’s next
Boeing this week teased details of its potential middle of the market aircraft—the so-called 797—that would enter service in 2025, and could be formally launched within the next year and a half. Boeing said the aircraft will include a fifth-generation composite wing, a “hybrid” composite fuselage, next-generation digital architecture and super-efficient engines. It would have two aisles, seat up to 270 passengers and have a range of more than 5,000nm. If Boeing—and potentially Airbus in response—will be launching a new aircraft by early 2019, why pull the trigger now on an order? If an airline is looking to replace older 757s or 767s on transatlantic routes—as is the case with United Airlines—why place an order when a tantalizing new offering is coming soon?
Previous large wide-body orders
Finally, at least with the Airbus A350 and Boeing 787, many airlines have previously made their new wide-body fleet picks and placed their orders. Airbus has more than 850 A350 orders; Boeing north of 1,200 Dreamliner orders. With these orders already placed, there are simply fewer opportunities for Airbus and Boeing in the wide-body market compared to the narrow-body market, where startups and low-cost carriers are big players. Much of the current wide-body focus, therefore, is on production execution and delivery.
Boeing continued to build its order book for the 737 MAX, including Netherlands-based lessor AerCap becoming the latest customer to commit to the 737 MAX 10 by converting 15 MAX 8 orders to MAX 10s.
AerCap has 100 737 MAX aircraft on order, now comprising 85 MAX 8s and 15 MAX 10s.
Boeing said it has secured 361 orders and commitments for the MAX 10 this week, including 147 incremental orders (not conversions from other MAX variants).
Boeing also said it signed an order agreement with an unidentified major airline for 125 737 MAX 8s valued at more than $14 billion at list prices. The agreement, not yet finalized, includes purchase rights for an additional 50 aircraft, Boeing said.
“We continue to see great demand for the 737 MAX family of airplanes across all regions around the world,” Boeing Commercial Airplanes SVP-global sales and marketing Ihssane Mounir said.
Chinese low-cost carrier Ruili Airlines inked a memorandum of understanding (MOU) for 20 737 MAX aircraft valued at $2.2 billion at list prices. The breakdown of MAX variants was not released. Kunming-based Ruili said earlier this month it had agreed to lease three 737 MAX aircraft from AVIC International Leasing Co.
“The 737 MAX’s promised efficiency, reliability and passenger comfort make it a very compelling airplane for us in our domestic and regional network,” Ruili GM Xie Jinguo said.
Ruili, which launched operations in 2014, currently has a fleet of 14 737s that fly on 28 domestic routes. The carrier said it plans to grow its fleet to 40 aircraft by the end of 2020.
Boeing additionally revealed an order with Algeria’s Tassili Airlines for three 737-800s valued at more than $294 million at list prices. The order was previously attributed to an unidentified customer.
When Southwest’s inaugural flight to Turks and Caicos touches down this November, it will mark the 11th country or territory served by the Dallas-based carrier.
The flight will cap another year of aggressive international growth for Southwest, which has transformed itself from a short-haul domestic airline once confined to the borders of Texas into an emerging heavyweight in the Latin American and Caribbean markets.
Since its first international flights in 2014, the Dallas-based company has launched service from 15 U.S. cities to a total of 16 international destinations, with a heavy focus on beach towns and leisure-friendly spots in places like Mexico, Jamaica and the Bahamas.
Southwest’s international presence is still relatively small, representing just 4 percent of the company’s flying, and an even smaller fraction of its revenue. Southwest reported international revenue of about $383 million in 2016 — up 69 percent in just two years — against a total of $20.4 billion.
But for an airline with a historic appetite for growth and a domestic network that is increasingly built out, capitalizing on close-in international destinations offers a tantalizing opportunity that will be central to the carrier's future.
The new service from Florida to Turks and Caicos will depart from Fort Lauderdale airport’s new five-gate international concourse opening at the end of June. The concourse will provide Southwest much-needed growing room — it’s adding at least seven international routes there in 2017 — and serve as a key connecting point for passengers heading south of the border.
The Fort Lauderdale airport will play a role similar to Houston’s Hobby Airport, where Southwest opened an international concourse in 2015. But Fort Lauderdale’s geography also creates new possibilities.
Coupled with the launch of the new, more fuel-efficient Boeing 737 Max later this year, Southwest will be able to take passengers farther than ever before. The Florida airport could serve as a launching point for flights to northern parts of South America, a currently untapped market for the company that is seen as a logical next step in its growth. An overnight transformation
Whether to expand internationally had been a topic of discussion at Southwest dating back years.
“The question was always: Would the effort be worth the benefit?” Southwest’s chief revenue officer, Andrew Watterson, said.
Launching international service comes with a host of challenges not found on domestic routes, from navigating customs to training foreign workers to making sure crew members have their passports.
Instead of building its network from scratch, Southwest decided to buy one, acquiring AirTran’s limited footprint of Latin American and Caribbean routes as part of its $1.4 billion deal for the company in 2011.
“It basically allowed us to go from a history-laden all-domestic carrier to an international carrier overnight,” said senior vice president of ground operations and provisioning Steve Goldberg. “It gave us a quick opportunity to learn the business and get us ready for where we’re at today and where we’re going in the future.”
Post-merger, Southwest operated international flights for several years under the AirTran brand while the two carriers were integrated. Southwest launched international flights under its own brand in July 2014 and since then has built out its network by looking at where it’s existing customers want to fly.
Southwest has reported international revenue of about $896 million since 2014.
“The destinations we add are because they have relevance to places where we are already the hometown carrier,” Watterson said.
Instead of building up massive international hubs along the coasts like rivals American, Delta and United, Southwest has worked to add a selection of routes from major points across its network from Southern California to Chicago to Baltimore.
“Southwest has this brand and this style. It’s the attractiveness of saying to their customer base ‘Hey, we can get you to Phoenix and we can get you to Mexico City,' ” said George Ferguson, a senior airlines analyst with Bloomberg Intelligence. “It’s a natural progression as they continue to grow.”
With Southwest's value-minded offering and bags-fly-free policy, Ferguson said, the airline is also well-positioned to compete for the business of U.S. residents traveling south of the border to visit friends and family.
The company’s much-bragged about “Southwest Effect” of lowering fares in new markets it enters has seemed to play out internationally, with average prices from the U.S. falling about 25 percent, or $155, according to a 2016 analysis of selected routes by FareCompare. Competition at home and abroad
But success won’t come easy in a competitive market that already includes major U.S. carriers like American and discounters like Spirit and Frontier, not to mention the foreign airlines also vying for their share of traffic.
“You’re probably faced with even more competition than you’re faced with in the U.S. in some of those markets,” Ferguson said.
Launching international routes also means delving into international politics, from securing takeoff and landing slots at local airports to dealing with the fallout from diplomatic decisions, like President Donald Trump’s decision last week to tighten restrictions on travel to Cuba less than two years after Barack Obama opened the door for U.S. carriers to serve the island.
Southwest moved aggressively to establish its presence in Cuba last year, launching six daily flights to three cities. While service to the capital Havana has performed as expected — the company is seeking government authority for another daily flight from Fort Lauderdale — there have been growing pains on routes into smaller Cuban markets, Watterson said.
Future international growth at Southwest will rely in part on partnering with foreign airlines to help take passengers to destinations it doesn’t serve directly. That prospect has drawn concern from the company’s pilots union and is sure to be a continued item of debate in the next round of contract negotiations.
With the opening of the new Fort Lauderdale concourse and subsequent expansion playing out over the rest of this year, Southwest expects its international growth will slow a bit in 2018. Where exactly the carrier will land next is unknown, but there are plenty of opportunities.
When Southwest first launched international service, CEO Gary Kelly said there were nearly 50 destinations outside the contiguous U.S. on the company’s radar, including Hawaii and Alaska.
Boeing is going to kill its most iconic plane. Not right this second, but in the coming decades. In a 20-year forecast of the aviation market, the company has decided not to set aside a place for the world's jumbo jets.
Boeing has completely dropped the category of large, four-engine planes like its 747 and the competing Airbus A380 in its predictions, estimating that this type of plane will soon become obsolete. And while of course any plane will become obsolete in time, Boeing sees no future for this breed of aircraft in general.
It's not a surprise. This has company's direction for the past few decades. Boeing has been focusing on smaller, long-range aircraft like its 787 Dreamliner, the 737-MAX, and the upcoming 777X to better support what it sees as the future of the aircraft industry. The downscaling of 747 production has already begun.
Boeing is betting on a revolution in the way air travel works. Traditionally, airlines follow a "hub and spoke" model, where passengers fly from small regional airports to large central airports and then to their destination. Boeing envisions a different model where passengers fly on small, long-distance airplanes directly from their regional airports.
This model was impractical for decades because the only long-range aircraft were jumbo jet passenger planes like the 747 and A380. But Boeing's new generation of planes are smaller and much more fuel efficient, allowing for longer and less populated routes.
Judging by the sales figures, Boeing might be right. Sales of the 787 have sharply risen in recent years, while Airbus has struggled to sell a single 380. It seems airlines are agreeing with Boeing's forecast.
Airbus, however, sees a different future, and will continue to manufacture its A380. Airbus believes that increasing populations will force airliners to fly larger aircraft, and it's making refinements to the design of the A380-increasing the plane's range and fuel efficiency-in preparation for that possible future.
Only time will tell whether writing off the 747 is the right move.
(Avery Thompson - Popular Mechanics / Bloomberg News / Yahoo Business News)
Rapidly expanding African carrier Ethiopian Airlines has placed a follow-on order for 10 Rolls-Royce powered Airbus A350-900s, which were previously listed as undisclosed on Airbus’ order book.
In addition, the Addis Ababa-based carrier ordered 10 additional 737 MAX 8 aircraft, exercising options from their 2014 order, which was the largest for the 737 MAX in Africa. Ethiopian now has firm orders for 30 737 MAX 8s.
Ethiopian took delivery of the first of its original order for 12 A350s in June 2016 and it now operates four of the type, including two leased aircraft.
“Today’s [A350] order tops-up [Ethiopian's] fleet, enabling it to pursue its growth strategy,” Airbus said, announcing the agreement at the Paris Air Show. The 343-seat aircraft (30 business and 313 economy seats), which were signed for in April, will be used to support Ethiopian’s long-haul growth.
“We have been a loyal Boeing customer for a very long time, because we were looking for the right aircraft in the Airbus family. Now we have found the A350 to be the right aircraft for us. We are very happy we made that decision very early in the A350 program. Now we see the performance of the aircraft is up to expectations, we made the right decision,” Ethiopian CEO Tewolde Gebremariam said.
He said the A350’s performance is up to specifications, if not more so. “We are a very satisfied customer and that is the main reason we have decided to have some more. That airplane has done a very good job.”
“Europe is still the largest trading partner with Africa and that has an impact on what we do. Having a very good airplane from Europe, as our biggest trading partner with the continent, is a perfect match,” Gebremariam said, although he was also quick to compliment the Boeing 787’s performance.
Alongside the A350 aircraft order, Ethiopian signed a $1.5 billion Trent XWB engine order with Rolls-Royce, as well as a TotalCare support contract.
The in-service Ethiopian A350s were initially deployed on Addis Ababa-London and have more recently been used on the airline’s Beijing route.
Other potential markets include Guangzhou, Hong Kong and Shanghai in China, Incheon in Korea, as well as Washington DC. “We certainly want to put these on an A350 because the loads are very high,” Gebremariam said.
However, Ethiopian faces operational challenges from the high temperatures and altitude of its Addis Ababa home base, which sits at 2,400m above sea level.
When asked whether the airline could take A350-1000s, Gebremariam replied: “We are still evaluating the -1000 version, but we have a unique situation in Addis Abba with the altitude of the airport, so we will have to see how it performs at that altitude. The -900 is doing very well.”
Airbus Commercial Aircraft president Fabrice Brégier said the A350-1000 will be certified in a few months. He added: “A further stretch of A350 is being studied. I believe we can do it at any time, but we don’t think today’s market is appropriate for it.”
The acquisition forms part of Ethiopian’s 15-year strategic plan, called Vision 2025. Ethiopian has posted 25% average growth over the past seven years.
Additionally, Ethiopian committed to purchase two Boeing 777 freighters, valued at $651.4 million at list prices.
Separately, Bombardier revealed Ethiopian was the previously undisclosed customer for a firm purchase agreement for five additional Q400 turboprop aircraft. The contract has a list-price value of $163 million.
Ethiopian fleet includes A350s, Boeing 787s, 777-300ERs, 777-200LRs, 777-200Fs and Bombardier Q400s.
Azerbaijan Airlines (AZAL) has committed to purchase four Boeing 787-8s, the Baku-based national flag carrier announced at the Paris Air Show June 20. The aircraft will supplement the two 787-8s AZAL now flies, and are valued at $918 million at list prices.
“Today’s commitment opens a new chapter in our partnership with Azerbaijan Airlines … [and] will contribute to Azerbaijan's fleet modernization plans,” Boeing VP sales-Middle East, Turkey, Russia and Central Asia Marty Bentrott said.
In addition to the two 787-8s, AZAL operates a fleet of 25 aircraft, comprising Boeing 757-200s, 767-300ERs, Airbus A319s, A320s, A340-500s, and Embraer E170s and E190s.
The airline flies to 40 destinations in 25 countries from its Heydar Aliyev International Airport hub in Baku, and carried over two million passengers in 2016.
In December 2016, AZAL announced plans to launch a LCC subsidiary, BUTA Airways, which the company plans to debut in fall 2017.
Rendering of 737 MAX 10 in Xiamen Airlines’ livery (Boeing)
Xiamen Airlines on Wednesday joined a long and still-growing string of customers for the new 737 MAX 10 that Boeing launched at the Paris Air Show this week.
Xiamen, a subsidiary of China Southern Airlines, signed of a memorandum of understanding (MOU) for 10 MAX 10s, valued at $1.2 billion at list prices.
The agreement needs the approvals of China Southern and Xiamen’s boards as well as the Chinese government.
The MOU brings Boeing’s orders or commitments for MAX 10s, the largest of the MAX family, to around 340 announced so far during the Paris Air Show week. Of those, about 200 are conversions from MAX 8 or MAX 9 orders.
Xiamen Airlines is an existing 737 MAX customer and plans to operate the aircraft with subsidiary carriers, including Hebei Airlines and Jiangxi Airlines.
Xiamen Airlines operates an all-Boeing fleet of more than 160 airplanes including nine 787 Dreamliners, 149 Next-Generation 737s and four 757s. The carrier plans to grow its operational fleet to 280 airplanes by the end of the decade and looks to expand regionally with the MAXs.
All MAXs are sole-source powered by CFM International LEAP-1B engines.
GE Capital Aviation Services (GECAS) plans to convert a further 30 Boeing 737-800s into freighters.
The aircraft lessor said it launched the 737-800 freighter program with Aeronautical Engineers in 2015 and Boeing in 2016. Since then, the Irish-American company has provided each program with a prototype aircraft for modification at separate conversion facilities in Miami, Florida, and Shanghai.
All the feedstock aircraft will come from GECAS’ existing portfolio and converted when the aircraft end their current passenger leases from 2018 onward.
GECAS currently owns approximately 220 passenger 737-800s that are distributed across 25 countries.
The ASL Group and West Atlantic Group have already become GECAS customers for the 737-800 freighter with deliveries occurring from the beginning of 2018 through 2019.
“We believe the 737-800 freighter will become an important express freighter for the 20-25 tonne air cargo market, GECAS SVP & cargo manager Richard Greener said. "The Next-Generation 737-800 freighter will be equipped with CFM56-7B engines, carry up to 23.9 tonnes of cargo with 12 main deck positions over 2,000 nautical miles."
At this week’s Paris Air Show, GECAS firmed an order for 100 more Airbus A320neo family aircraft, which will be delivered in 2020 to 2024.
Boeing offered tantalizing new details about its proposed next new airplane at the Paris Air Show on Tuesday, revealing that the fuselage as well as the wings of the jet unofficially dubbed the “797” will be carbon-fiber plastic composite — and will not have the typical airliner cross-section.
Significantly for this region, the information offered provides new hints about how the plane may be built.
Mike Delaney, Boeing vice president in charge of new airplane development, said the plane — like the 787 Dreamliner — will have an all-composite airframe. Previously, Boeing had made clear only that the 797 wings would be carbon-fiber composite.
Boeing has never built a composite fuselage in the Puget Sound region. The various composite fuselage sections for the Dreamliner are made in North Charleston, South Carolina; Wichita, Kansas; and Nagoya, Japan.
However, Boeing is fabricating the composite wings for the forthcoming 777X in a new $1 billion facility in Everett. That investment includes massive, very expensive autoclaves, which are high-pressure ovens where the carbon fiber infused with epoxy resin is baked to hardness.
Building the 797 fuselage will require further heavy investment, wherever Boeing decides to locate that work.
According to a Boeing spokesman who attended the Paris presentation, Delaney said Boeing is considering all options for fabricating the composites, including various new out-of-autoclave and resin infusion methods.
He said the decision on which manufacturing process is used will be based on multiple factors, including the quality of the parts and the time involved in the fabrication.
Delaney also described the proposed 797 fuselage as having a “hybrid cross-section,” meaning having characteristics of both a single-aisle and a wide-body fuselage.
Boeing has already said the jet’s passenger cabin will likely have two aisles, as do wide-body jets, and Delaney reiterated Boeing’s mantra that the jet will have “wide-body comfort” with “single-aisle economics.”
Some in the aviation trade press have speculated that this means Boeing must be looking at an elliptically shaped fuselage cross-section for the 797.
This could allow it to be wider though not as deep as today’s wide-bodies. Such a cross-section could reduce the overall size of the jet, though at the cost of cutting the available cargo space below the passenger cabin.
However, Delaney was not explicit about the shape.
Even if he persuades Boeing Commercial boss Kevin McAllister and the Boeing board to give the go-ahead to this 797 concept, it’s unlikely to be launched for more than a year at the earliest.
There are still lots of design decisions to be made, and more veils to be lifted later. Boeing order news
On the second day of the Paris Air Show, Boeing blew through its own projection for MAX 10 orders from the day before, with United Airlines committing to 100 of the new model.
A day after Boeing formally launched the MAX 10, the largest member of the new single-aisle jet family seating up to 230 passengers, it announced a further 153 orders for the airplane.
However, the United order is not technically a new order — the U.S. carrier simply agreed to convert its 2012 order for 100 MAXs to the larger model.
Additional MAX 10 orders announced in Paris on Tuesday included 20 for U.S. aircraft lessor Aviation Capital Group, 15 for China Aircraft Leasing Group (CALC), 10 for Irish airline Ryanair, and eight for Chinese airline Okay Airways.
The order news for Boeing went beyond the MAX 10.
Avolon, a rapidly expanding aircraft lessor that is Chinese-owned but headquartered in Ireland, ordered 75 MAX 8s.
Kuwaiti lessor ALAFCO announced a commitment for 20 MAX 8s and Tokyo-based Japan Investment Adviser Co., which has an aircraft-leasing unit, committed to buy 10 MAX 8s.
CALC ordered another 35 different MAX models in addition to its MAX 10 order and Okay Airways another seven MAX 8s.
Okay also signed a memorandum of understanding for five 787-9 Dreamliners. And Azerbaijan Airlines announced a commitment for four 787-8s.
Those follow a significant Dreamliner order Monday from the world’s largest lessor, Ireland-based AerCap, for 30 787-9s.
On Tuesday, United also ordered four 777-300ERs, which is good news in helping Boeing bridge the production gap to the 777X.
Also helping fill that gap, Ethiopian Airlines announced a commitment to buy two 777 freighters.
Boeing’s strong opening act for the new 737 MAX 10, the largest of its re-engined narrow-body family launched this week at the Paris Air Show, continued Tuesday with major orders from United Airlines and Chinese lessor CALC.
Chicago-based United Airlines is converting 100 of its previous 737 MAX orders to the new -10 variant. The conversion makes United the largest single 737 MAX 10 customer.
“The 737 MAX 10 will enable us to continue using larger and more efficient aircraft within our domestic network,” United EVP and CFO Andrew Levy said.
Boeing Commercial Airplanes president and CEO Kevin McAllister said the order “not only makes United a launch customer for the MAX 10, but makes it the largest MAX 10 customer in the world. United is one of Boeing’s largest customers, with 600 in service and 200 on order.”
McAllister noted this was the 11th Boeing aircraft for which United had been a launch customer, going back to the Model 88 around 1928.
United SVP-finance, procurement and treasurer Gerry Laderman said the MAX 10 was of particular interest to the carrier: “We’ve had great success with the stretch models of several aircraft, such as the 757-300 and 767-400, both of which we would call simple, economic stretches. We hope that the MAX 10 will be as successful.”
He added that he expected to receive the first MAX 10 in 2020, but was uncertain whether United would be the first customer to receive the variant. The airline had not yet decided on a seating configuration.
“The MAX 10 for us will largely be a domestic aircraft. Our need for replacements for the 757 is on transatlantic routes, so for both the 757 and 767-300 we’re looking forward to a next-generation aircraft to replace those,” he said.
Laderman noted the 100 MAX 10s would be conversions from United’s existing order for 161 MAX 9s. The first MAX 9s are scheduled to reach United in April 2018.
All MAX aircraft are sole-source powered by CFM LEAP-1B engines.
The four new 777-300ERs also announced at the show are expected to be in service by the end of 2018, with the first three expected to arrive in time for next summer.
United also announced an order for four additional Boeing 777-300ERs, which takes its orders for the widebody to 18.
China Aircraft Leasing Group (CALC), meanwhile, confirmed an order announced last week for 50 737 MAXs, revealing that 15 of aircraft will be the -10 variant. This was CALC’s first direct purchase from Boeing, with a value of $5.8 billion at list prices.
UK leisure carrier Monarch Airlines has firmed options on a further 15 Boeing 737 MAX 8s, valued at $1.7 billion at current list prices, and signed a support joint venture with Boeing.
The order, which was announced at the Paris Air Show, uses all of the options from Monarch’s 2014 order. It takes the airline’s total 737 MAX 8 commitment to 45 aircraft, with first delivery in 2018.
“The order was previously attributed to unidentified customers on the Boeing orders and deliveries website. Monarch has confirmed the 15 options and has agreed with a lessor for them to take 13 aircraft for lease back to Monarch,” Boeing said.
Monarch is transitioning from an Airbus to a Boeing fleet, which should be completed by the end of 2022.
“It is a rare transition to go entirely from one manufacturer to another and we are pleased with how it is moving. We already have NGs operating. We are very happy with our early sight of the aircraft and are in the process of getting them into the air. As a customer, it has been seamless,” Monarch CEO Andrew Swaffield said.
“The decision to exercise our option for an additional 15 737 MAX 8 aircraft is a clear illustration of confidence in Monarch’s future success.”
Monarch went through some recent financial troubles, but Swaffield said he is very pleased with the way the business has grown since and load factors are up 10 points compared with this time last year.
He added the new aircraft will add “£100 million ($128 million) a year to our bottom line,” driven by lower fuel and servicing costs.
This takes our order for 30 firm aircraft and 15 options to its completion. This isn’t necessarily the end point for Monarch,” he said, although the airline has no immediate plans to place any further orders or take any more options.
Boeing also announced it will supply Monarch with flight training for its 737 MAX fleet, as well as aircraft records management through Boeing’s AerData subsidiary.
Swaffield described the retraining of over 400 pilots from Airbus to Boeing as a “massive challenge.”
Beyond this, Monarch has signed up to Global Fleet Care—formerly known as GoldCare—for its 737 MAX fleet and the two companies have formed a maintenance joint venture, where Monarch Aircraft Engineering will perform third-party work for Boeing.
“We are looking at how to leverage the capacity that already exists at Monarch to be able to offer it to others. We are agreeing collective areas and will be better off together,” Boeing Global Services president and CEO Stan Deal said.
Monarch Aircraft Engineering has been doing third-party work for the past 50 years. External clients make up around 50% of its maintenance workload and the company is one of the few Boeing approved GoldCare providers across the world.
Rendering of 737 MAX 10 in SpiceJet livery. (Boeing)
Indian low-cost carrier SpiceJet has signed a memorandum of understanding (MOU) covering 40 Boeing 737 MAX 10s, although 20 of these are conversions from an existing MAX 8 order.
Once firmed, SpiceJet will join the 737 MAX 10 launch customer group.
“The agreement, valued at $4.7 billion at current list prices, is split evenly between 20 new orders for the 737 MAX 10 and conversions of 20 of the low-cost carrier's 737 MAX 8 airplanes from its existing order to 737 MAX 10s,” Boeing said, announcing the agreement at the Paris Air Show.
Boeing said the order will be posted to its orders and deliveries website once it is finalized.
“With the introduction of our 737 MAXs next year, we will be able to further expand our network, while keeping our costs low for our customers,” SpiceJet chairman and managing director Ajay Singh said.
“We got into a lot of trouble in 2014 and Boeing was there to support us. They ensured SpiceJet was revived again and became strong, therefore when we decided to place a new order, we decided to stick with our Boeing and I don’t think they will let us down. We think max completely change economics of SpiceJet.”
He added that SpiceJet evaluated the A321neo before placing the original MAX order. “Airbus approached us with an aggressive offer, but we felt that that in the MAX we had a better aircraft and in Boeing a better partner.”
Over the last 24 months, SpiceJet’s load factor has been over 94%. Singh said the MAX 10 can carry up to 230 passengers, capacity which is much-needed as “terribly slot-constrained” airports like Delhi and Mumbai quickly run out of capacity.
“For those airports, this is the perfect aircraft to get more people in than before. This is the fastest growing aviation market in the world today, but despite being the fastest growing market only 3% of Indians fly. The potential is enormous and SpiceJet intends to play a large part in the growth of the Indian market,” he said.
SpiceJet is also a potential customer for Boeing’s new middle of the market aircraft.
“From our side, they are very much in the target market and a target customer,” Boeing Commercial Airplanes president and CEO Kevin Mcallister said. “The way they are approaching their growth and running the airline means they can give us very important feedback if and when we bring this aircraft to market.”
Singh responded, saying: “We would love to be part of the discussions on the middle of the market aircraft. We have 1.3 billion people here who don’t necessarily need to travel through a hub. We think there is great potential in that market. We are still in the process of first absorbing the MAX fleet that we are going to get, covering our own country with small aircraft, but certainly this is something for the future.”
Another part of SpiceJet’s future strategy is the potential to go long haul. “The demand is certainly there, but I’m not sure the economics work at this time, so this is something we are studying and will be discussing with Boeing extensively,” Singh said.
SpiceJet operates a fleet of 35 737NGs and 20 Bombardier Q400s. The carrier plans to grow its fleet to 200 aircraft by the end of the decade and is looking to expand regionally with the 737 MAX family.
The Indian carrier will take delivery of its first 737 MAX in 2018.
Atlanta-headquartered freight giant UPS has signed an agreement with Boeing, covering passenger to freight conversions on three Boeing 767s it recently acquired.
Announcing the agreement at the Paris Air Show, UPS Airlines president Brendan Canavan said, “We are expanding our uplift to meet our customers’ needs.” Demand, he said, is increasing because of the exponential growth in e-commerce. This means UPS is working on “smart capital investments” to support that trend.
“At UPS, we are big into 767 freighters. They are a workhorse; they are very reliable. We recently acquired some aircraft that are the same vintage as our existing 767s and after conversion they will be virtually identical,” Canavan said.
Boeing Global Services president and CEO Stan Deal said the UPS agreement is one of the first for the newly created Boeing support division. “We see demand for converted freighters to be a robust market,” Deal said.
The manufacturer’s market outlook forecasts a need for 400 wide-body conversions over the next two decades, with strong demand for 767 freighter conversions.
In October, 2016 UPS announced the purchase of 14 747-8 freighters, with options to purchase 14 additional aircraft. UPS was the launch customer for the 767 freighter in 1995 and today the cargo specialist operates 184 Boeing aircraft.
CFM International had a banner start to the Paris Air Show, winning more than $8 billion worth of LEAP family engine orders while the LEAP-1B was announced as the exclusive engine for the Boeing 737 MAX 10.
The LEAP-1B is also the sole-source engine for the other variants of the 737 MAX. The GE Aviation/Safran Aircraft Engines joint venture also won major order competitions with rival Pratt & Whitney to power Airbus A320neo family aircraft with the LEAP-1A engine.
CFM said the LEAP-1B’s current configuration “is capable of meeting the thrust requirements” for the 737 MAX 10, which will be a stretch of 66 inches from the 737 MAX 9 and carry up to 230 passengers.
GE Capital Aviation Services (GECAS), CBD Aviation Lease Finance, TUI Group, Tibet Financial Leasing and SpiceJet were the first to announce 737 MAX 10 commitments at the show.
GECAS additionally announced a firm order for LEAP-1A engines valued at $2.9 billion as list prices to power 100 Airbus A320neo family aircraft it ordered at the show.
Also, China’s Spring Airlines signed an agreement with CFM to order LEAP-1A engines to power 60 new Airbus A320neo/A321neo aircraft previously ordered and scheduled for delivery between 2019 and 2023. The engine order was valued at nearly $1.7 billion at list prices.
International Airlines Group (IAG), parent of British Airways and Iberia, selected the LEAP-1A engine to power 55 A320neo family aircraft previously ordered and scheduled to begin delivering in 2018. The agreement includes spare engines and a long-term support agreement.
China's ICBC Leasing placed an order for LEAP-1A engines valued at $1.1 billion to power 40 A320neos previously ordered.