Archive for July, 2009
July 24, 2009–Backers of the delayed Airbus A400M military aircraft gathered in a hilltop village in southern France on Friday to decide the fate of Europe’s biggest military project, plagued by delays and cost overruns.
Defence ministers from seven European NATO countries were expected to discuss holding six months of further talks aimed at rescuing the project, which is designed to wean Europe off US-manufactured airlift capacity to support global operations.
Barring surprises, Britain is expected to signal on Friday that it will remain part of the EUR20 billion euro (USD$28.5 billion) programme despite earlier threats to pull out due to production and budget problems, defence sources said.
But Airbus parent EADS could face a hefty bill to help Britain and France fill gaps in troop transport capacity in Afghanistan while chronic development problems are ironed out.
Britain, France, Germany, Belgium, Luxembourg and Turkey ordered a total of 180 of the propeller-driven A400M planes in 2003. Malaysia and South Africa have ordered 12.
France was due to take delivery of the first plane in 2009 but EADS now says the earliest it can deliver a plane is 2013.
To avoid triggering an automatic cancellation of the project and sacrificing some 4,000 high-tech European staff, buyers have agreed a moratorium that expires at the end of July.
“We hope to convince our partners to take a step forward and go into more precise discussions during the rest of the year,” a French official said.
Nations have so far spent EUR5.7 billion on the plane, which EADS would have to repay if the project were cancelled.
However it may still have to pay penalties for late delivery as well as help fund stop-gap measures such as leasing Boeing C-17s or Lockheed Martin C-130Js and could see plane orders reduced, depending on the outcome of the talks.
The company, which reports earnings next Tuesday, has so far taken provisions of around EUR2 billion for A400M delays.
(Reuters)
July 24, 2009–The US FAA on Thursday proposed mandatory safety measures designed to prevent the accumulation of ice inside the pipes of the fuel systems in certain Boeing 777s.
The Federal Aviation Administration proposed these new measures in response to a British Airways accident last year and would require Boeing install redesigned cooling systems on some of its jets with Rolls-Royce-made engines by January 2011.
The accumulation of ice can “result in an unacceptable engine power loss, and loss of control of the airplane,” the FAA said in its proposal.
“The conditions that seem to have led to the British Airways accident are rare to start with, and the non-normal procedures we have in place will serve to minimize the effects these conditions will have on airplanes in flight until the new FOHEs (fuel-oil heat-exchangers) are installed,” a Boeing spokeswoman said.
There are about 220 Rolls-Royce-powered 777s in service, of which 50 operate in the United States and are therefore affected by the FAA’s proposal, Boeing said.
In January 2008, British Airways flight BA38 crashed into the ground at London’s Heathrow Airport when both of the plane’s engines reduced their thrust unprompted by the pilots. All passengers survived the incident.
The deadline for comments on the FAA’s proposal is August 24.
(Reuters)
July 22, 2009–Airlines around the world now spend millions of dollars annually upgrading their inflight entertainment systems, but iPods and other mobile entertainment gadgets could render all that useless.
Besides bland airline food, one other certainty for most long-haul travellers flying in economy class has always been time passed with movies and games on a tiny 5-inch screen provided by the airline.
However, with USB ports and a power socket increasingly common even for economy class passengers on carriers such as Singapore Airlines and Cathay Pacific Airways, the concept of in-flight entertainment could change.
Adding to the mix are plans by carriers such as Delta Air Lines, which has begun offering an Internet connection on board, allowing passengers to continue tweeting and updating their Facebook status instead of flipping channels on the in-flight entertainment (IFE) system.
Analysts call this content customisation, where passengers are no longer limited to an airline’s offerings in their in-flight entertainment systems and are able to pick and choose what they want to watch or do on board a flight.
Airlines, badly hit by weak demand for air travel and volatile jet fuel prices, are likely to welcome the move, as it would allow them to save on costs such as licensing fees to production studios and maintenance fees.
“There’re so many reasons for airlines to change the way it works right now,” said Peter Harbinson, an analyst at the Centre of Asia-Pacific Aviation in Sydney. “The biggest advantage for airlines is the weight of the IFE equipment. Fuel burnt, regular engineering checks, and licensing fees to movie studios all add up to a considerable amount of money for airlines.”
The growing popularity of low-cost netbook PCs and other mobile entertainment devices such as Apple’s iPod and other MP3 players could further hasten IFE’s demise, as more and more airline passengers carry these gadgets with them when they travel.
GREATER COST SAVINGS
The biggest draw for airlines, industry watchers say, is that they could save money in tough economic times, while simultaneously disguising the change as a product enhancement.
Passengers engrossed with their laptop PCs and mobile entertainment devices that can be used continuously as a result of the power sockets on every seat could also free up cabin crew.
“I’ve heard stories about the number of crew on board each flight being cut by airlines after they introduced personal TVs on every seat,” said Anthony Prakasam, an aviation consultant.
Low-cost airlines such as Ryanair and AirAsia, always eager for a fresh revenue source, could also turn to installing USB ports and power sockets and charging for their use.
The biggest losers from the entire episode could be companies such as Rockwell Collins and Panasonic, which develop and build current in-flight entertainment systems but now look like they might have innovated themselves into obsolescence.
These companies have been on the forefront of encouraging airlines to install power sockets and USB ports onto every seat in the aircraft, but they could have to start looking at diversifying their work if they are to stay ahead, analysts say.
Possibilities include venturing into providing advertisers with an entrance into a space that has long been seen as the last bastion of a commercial-free world, broadcasting ads on large screens to a captive audience. But such a plan could backfire.
Khoa Huynh, 24, a self-professed airline geek, said he would want to turn off the in-flight entertainment system even more if he were forced to watch advertisements on board.
“I travel everywhere with my laptop, and being able to use it without having to worry about the battery dying on me is a great plus. I won’t say I’ll stop watching in-flight movies, but I suppose that could mean less time spent on it.”
(Reuters)
July 22, 2009–Continental Airlines made an apology to former Indian president A.P.J. Abdul Kalam on Wednesday after staff had frisked him at Delhi airport, to Indian uproar.
The Indian government has filed a police report against the airline, as protocol at Indian airports exempts specific dignitaries from security checks, and gave Continental Airlines seven days to respond.
“Continental Airlines apologises to the former President of India, Dr. A.P.J. Abdul Kalam for any misunderstanding and/or inconvenience related to the security screening,” the airline said in a statement.
“Our intention was never to offend Dr. Kalam or the sentiments of the people of India.”
Continental Airlines had earlier said there were no exemptions to its security procedures and that it believed Kalam had not been offended.
Kalam is seen by many Indians as the founding father of the country’s missile programme and a man with a common touch.
He was frisked in April but the check caused an outcry in the Indian media and parliament when it became public knowledge. The aviation minister called it “unpardonable”, according to local media reports.
Indians posted blogs or comments on the internet asking how Americans would react if a former US president were frisked by a foreign airline.
(Reuters)
July 23, 2009–JetBlue Airways reported a second-quarter profit on Thursday despite headwinds on demand and lower revenue.
The low-cost airline posted net income of USD$20 million, or 7 cents per share, compared with a year-earlier loss of USD$9 million, or 4 cents per share.
Excluding an accounting gain from the valuation of some of its auction rate securities, profit would have been 5 cents per share.
Operating revenue fell 6 percent to USD$807 million on lower demand the industry blames on recession. Operating expenses fell 17.7 percent, or USD$107 million.
Seat-mile revenue was off 4.4 percent at 9.8 cents, while seat-mile costs, excluding fuel expenses, fell 11.2 percent to 8.8 cents.
JetBlue ended the quarter with about USD$880 million in cash and cash equivalents.
The carrier hedged about 9 percent of its fuel consumption and said it had realised “significant cash savings” from lower prices.
(Reuters)
Jul 14, 2009 –Several leading air carriers have been accepted as members to the Sustainable Aviation Fuel Users Group as announced by Boeing today. Existing members welcome the new group members Alaska Airlines, British Airways, Cathay Pacific, TUIfly, and Virgin Blue.
Current airline members include Air France, Air New Zealand, ANA (All Nippon Airways), Cargolux, Gulf Air, Japan Airlines, KLM, SAS, and Virgin Atlantic Airways. Boeing and Honeywell’s UOP, a refining technology developer, are associate members.
Since its launch in the fall of 2008, the User Group has established a foundation of airlines, environmental organizations, research projects, and practices and principles that can help accelerate the commercialization and availability of sustainable biofuels.
User Group members have pledged to work through the Roundtable for Sustainable Biofuels (RSB), a global multi-stakeholder initiative, consisting of leading environmental organizations, financiers, biofuel developers, biofuel-interested petroleum companies, the transportation sector, developing-world poverty alleviation associations, research entities, and governments. All RSB and User Group members agree that working across sectors, interests, and regions is the best approach to ensure the next generations of biofuels are developed in a sustainable manner.
Working through User Group representatives, aviation industry input is being included in “Version 1″ RSB principles and standards, which will be the first widely-reviewed and accepted set of international standards for sustainable biofuel production. These standards will be tested, improved, and tailored via future User Group and RSB stakeholder efforts and verified through peer-reviewed research and development collaboration.
These strategic efforts by User Group members and RSB stakeholders are focused on making renewable fuel sources available that can reduce greenhouse gas emissions, while lessening commercial aviation’s dependence on fossil fuels and potentially reduce aviation sector exposure to fuel price volatility.
In addition to previously announced research projects on algae and jatropha curcus, the group will also launch a sustainability assessment of halophytes, a class of plants that thrive in saltwater habitat, later this year. That effort will assess lifecycle CO2 emissions and socio-economic impacts. Additional details will be announced closer to the project launch date. All of these sustainability assessments will be subject to scientific peer review and used by the RSB process to guide improvements to “Version 1.”
“Aviation is stepping up and addressing its environmental and fuel challenges, and the work being done by these industry leaders is at the forefront of that effort,” said Billy Glover, managing director, Environmental Strategy for Boeing Commercial Airplanes. “Tremendous technical progress has been demonstrated over the past several years, and as we move closer to approval to use these advanced generation fuels, we are rapidly developing sustainability practices and conducting ongoing research to ensure we remain on the right path.”
To be eligible for membership, group members must subscribe to sustainability criteria that stipulate the following:
- Jet fuel plant sources should be developed in a manner that is non-competitive with food and where biodiversity impacts are minimized; in addition, the cultivation of those plant sources should not jeopardize drinking water supplies.
- Total lifecycle greenhouse gas emissions from plant growth, harvesting, processing, and end-use should be significantly reduced compared to those associated with jet fuels from fossil sources.
- In developing economies, development projects should include provisions or outcomes that improve socio-economic conditions for small-scale farmers who rely on agriculture to feed them and their families and that do not require the involuntary displacement of local populations.
- High conservation value areas and native eco-systems should not be cleared and converted for jet fuel plant source development.
Monday, 13/07/2009 –The owners of ultra-low-cost carrier Spirit Airlines have bought Air Jamaica, according to a published report. The Jamaica Gleaner newspaper on July 4 reported that Jamaica is trying to privatize Air Jamaica, the national carrier, with the sale.
In an email1313131313131313131313131313131313131313, Spirit spokeswoman Misty Pinson declined to comment on what she termed “market rumors.” Air Jamaica did not return a call for comment. A conflicting article in The Jamaica Observer on July 5 reported that the deal had not yet been finalized.
If the deal is real, it could be good for Spirit, said Stuart Klaskin, an analyst with Coral Gables-based KKC Aviation Consulting. Miramar-based Spirit has a strong presence in the Caribbean and a takeover of Air Jamaica– the country’s largest carrier– would augment Spirit’s market presence, he said.
Air Jamaica has reportedly struggled in recent years and Spirit may be able wring value out of Air Jamaica with its low-cost discipline, he noted.
Spirit flies to 39 destinations in the U.S., Latin America and the Caribbean. The carrier currently has three flights a day that go from the U.S. to Jamaica, Pinson said. She could not immediately provide the number of flights during peak travel season.
July 10, 2009–The head of aviation body ICAO on Thursday rejected a proposal by European Transport Commissioner Antonio Tajani to work on creating a global blacklist for unsafe airlines.
“I don’t think this is the solution at the global level,” Roberto Kobeh Gonzalez, president of the International Civil Aviation Organisation, told reporters when asked if he supported the idea.
(Reuters)
July 10, 2009–Comair expects to lay off up to 100 pilots in wake of capacity cuts by parent company Delta Air Lines, the regional carrier said on Thursday.
The lay offs are expected to take place between September 1 and year’s end, Comair spokeswoman Christine Wever said.
Cincinnati-based Comair has 1,088 pilots, she added.
Wever said the number of planned lay offs could be reduced based on voluntary options that could be put in place as it works with the Air Line Pilots Association union.
(Reuters)
July 10, 2009 –Figures from Lufthansa, one of the world’s biggest carriers of air freight, a key barometer of world trade, showed the airline slump continuing, while Air France-KLM braced for temporary lay-offs.
Continental Europe’s largest airlines — Lufthansa by market value and Air France-KLM by revenues — were unable to point to significant signs of recovery in separate announcements on Thursday, though Frankfurt airport operator Fraport sounded a rare but still fragile note of optimism.
Germany’s Lufthansa said shipments of cargo and mail1313131313131313131313131313131313131313 fell 14.3 percent in June after 10 percent in May as a slump in economic activity continued to weigh.
“In the air freight sector… the market environment remained weak in June,” the German flag carrier said.
Passenger traffic retreated 5.2 percent in June, it said, though this was better than the 7 percent some analysts had feared, and an improvement on May’s fall of 7.1 percent.
Cargo flows are under the spotlight as economists look for clues on physical trade movements. They have been hit both by economic weakness and a crisis over trade financing that G20 countries have promised to address by pumping in cash.
Just under half of international trade by value is shipped by air, according to airline lobbyists, and Lufthansa is the world’s second-largest cargo network after Korean Air. When Air France and KLM, which merged in 2004 but still operate separately, are combined, they outrank Lufthansa.
FRAPORT MORE OPTIMISTIC
Fraport said it had become slightly more optimistic about 2009 after a slump in passenger traffic had eased in June.
In the United States, airlines saw steep declines in traffic in June, a sign that demand remains weak and that carriers are likely to post second-quarter losses.
Germany has been the world’s biggest exporter of goods since 2003 but has been hit by a slump in exports this year.
In mixed economic data on Thursday, Germany said it might have already emerged from recession, but US unemployment data failed to cheer markets.
TEMPORARY LAY-OFFS
Air France-KLM chief executive Pierre-Henri Gourgeon told a shareholders’ meeting the Franco-Dutch group may impose temporary lay-offs to cope with recession as it saw no signs yet of a recovery in travel demand.
“Air France-KLM must remain competitive. I haven’t excluded temporary lay-offs. We will watch very closely. These measures should allow us to avoid affecting employment,” he said.
In May Air France-KLM said it planned 3,000 job cuts in the financial year to end-March 2010 through natural wastage.
The world’s airlines lost more than USD$3 billion in the first quarter of 2009, airline lobby IATA said last week, maintaining its estimate for full-year losses of USD$9 billion.
Airlines say there is little way of knowing how business trends will develop in the second half of the year and are conserving cash or merging to survive, while a rebound in oil prices looks set to delay profits when the recovery happens.
At USD$61.7 per barrel on Thursday, North Sea Brent crude futures have risen 56 percent since mid-February, but they are still less than half their peak of USD$146/bbl a year ago.
Merger talk was rekindled on Thursday when the chairman of Spanish airline Iberia stepped down and was replaced by proven dealmaker Antonio Vazquez.
Vazquez, who oversaw the sale of Altadis to Britain’s Imperial Tobacco in 2007, could put new life into merger talks with British Airways, which have been bogged down for a year, analysts said.
Vienna airport operator Flughafen Wien said passenger traffic fell by 10.5 percent in June as traffic to eastern Europe declined by almost 20 percent.
The June decline was less severe than in the first five months of the year. Year-to-date traffic declined 12.7 percent.
(Reuters)