December 2005 Archives

Sometimes the acronyms on which aviation depends make real sense. As they did the other day when the FAA showed off how the RNP function of RNAV works in the RW-the Required Navigation Performance that is part of Area Navigation in the Real World. The aviation agency showed how a high-end bizjet equipped with the proper avionics could make a hands-off precision approach through complex airspace that's surrounded by terrain and limited by no-fly security restrictions. The River Approach into  Reagan Washington National's north south Runway 19  is called that because it requires pilots to centre over the tortuous and twisting Potomac while avoiding such restricted area as the CIA, the White House and the monument-strewn National Mall-and some of the best-organised anti-noise communities in the nation.

With reporters on board, FAA pilots flew down the River on autopilot, not even touching their control yokes as the airplane banked to the left and right while swerving and descending under control of satellite-based navigation equipment and on-board Flight Management System computers. Instead of flying straight to line up with a runway, pilots stick to a tightly controlled path fed into the flight management system through the GPS.

Russ Chew, the FAA's chief operating officer, explained that RNP isn't so much a tool to increase airport capacity but an instrument to support airline scheduling: "airlines schedule to optimise, and weather is the major variable. With predictable, uniform approaches, in all weather, the airlines can schedule and sequence with reliability". And with the RNP, the FAA can 'deconflict' approaches to runways at nearby airports such as New York City's JFK International and LaGuardia-airports that are less than 20 miles apart and where a north-south JFK runway approach presents a conflict in certain weather with an east-west LaGuardia approach. By allowing planes fly curved approaches instead of long straight paths for miles until they're at the runway, RNP can avoid the conflict of intersecting approaches.

RNP's 'repeatability' - ensuring that aircraft fly exactly the same approach every time - lets the FAA design procedures to avoid noise-sensitive areas. FAA Administrator Marion C. Blakey said in a hangar at National before the demo flight, "The environmental benefits are terrific too, because flying straight down the middle of the flight path means that people on the ground perceive less jet noise and experience fewer engine emissions".

On this bright and calm December day, it was an interesting sight to behold the pilots take their hands off the yokes of the FAA's new $25 million Bombardier Global 5000 as they watched their FMS keep the $25 million bizjet centered over the Potomac; indeed as we went by the CIA headquarters -on a high bluff near the river-they could have put their heads in their hands had they wished to make a point.

Alaska Airlines is the first carrier authorised by the FAA to use the RNP procedures at Reagan National. The airline pioneered the use of RNP procedures at Juneau and other airports in Alaska. Alaska's vice president for flight operations, Kevin Finan, said that even though the Seattle-based carrier only operates a single pair of frequencies into Reagan National, "we had developed plenty of other RNP approaches over the decade and we were eager to show the proud Eskimo (on each Alaska tailfin)." Finan said Alaska flies into airports using RNP procedures 6,000 times a year. Of those flights, 800, or about 13%, would otherwise have to be diverted, so the airline saves as much as $16 million. Alaska has flown along the required navigation performance path into Reagan National 10 times since late September. Under lower-tech procedures, three of those flights would have had to be diverted, at a cost of $5,000 to $10,000 for each diversion. Finan quipped, "RNP benefits Aunt Martha because she spends less time in a holding pattern waiting for the weather to improve".

As the plane made its way up the river to turn around for the approach, Nick Sabatini, associate FAA administrator for aviation safety, told reporters "You're going to see a proliferation of RNP approaches at those approaches that make the most sense". Sabatini said it costs the FAA just $20,000 to develop each new RNP approach plate. JetBlue Airways and American Airlines are in talks for FAA approval for the procedures, he said. The FAA has authorized RNP at Juneau; San Francisco; Portland, OR; Palm Springs, CA; and Hailey (Sun Valley), ID. One loss: at Palm Springs, a point on the approach over mountainous terrain had long been identified as MORON, but that name will be replaced when the new RNP is standard there, said FAA officials.

Boeing's commercial aircraft team are heading into the festive break in their best mood for years. Sales of the 787 mid-sized widebody are booming, as are those of the 777; the 747-8, the successor to the jumbo jet, has finally been launched with significant orders; production of the 767 has been reprived; and 2005 looks set to end as the manufacturer's best ever year for orders.

The progress of the 787 has been perhaps the most remarkable turnaround in Boeing's fortunes. As of 21 December, Boeing had clocked 254 firm orders, says programme director Mike Bair. Altogether the aircraft has 364 orders and commitments, with proposals out with carriers for another 500 units.

As Bair says: "The challenge is to build enough aircraft to satisfy demand." Boeing will deliver a total of 112 787s in 2008 and 2009, but is studying a production rate increase beyond that. The aircraft will fly for the first time in 2007. The list price for the 787-8, the standard size of the aircraft seating from 210-250 passengers, is $145 million, plus or minus $5 million depending on interior configuration, says Bair. The company has not announced a price for the larger 787-9. List prices are simply the starting point of course. As Bair notes: "It's been a long time since we sold an airplane at list price...probably 20 years!"

Pressure from carriers like Emirates is forcing Boeing to look at a further stretch of the aircraft to around 300-seats in a three-class layout. "They have not been shy about their desire to have an aircraft bigger than the -9," says Bair. The company is leaning towards this second stretch. "My guess right now is that it is very likely something we'll end up doing," he says. If Boeing does go ahead with the "787-10", it would not start to be delivered before 2012.

"The real issue on timing is figuring out exactly what it is," says Bair, noting that there are a lot of trades to be made in terms of the range of the aircraft and how large it will be. "We haven't done enough of that work to know what we will be selling somebody yet," he says.

The company is also unconcerned about whether a larger 787 will begin to compete with the smaller 777s, he says. If customers want a Boeing product they should be able to buy it, he explains. "To try and finesse that is probably not a good idea," he says of the suggestion that Boeing could hold back on 787 development to sustain 777 sales.

The prospect of high-flying Emirates using some of its Airbus A380s in a high-density layout to operate what would be medium or long-haul low-cost carrier-style services is enough to send a shudder down the spine of many of its competitors. But it is a thought on the mind of the carrier's vice-chairman and group president Maurice Flanagan (see left).

Emirates has already stated that it will configure its A380s in three-different layouts to suit different markets, and has studied using the aircraft in a single-class layout too, says Flanagan, building on remarks made by the airline's president Tim Clark in the April 2005 issue of Airline Business. "It could work," says Flanagan. "The aircraft offers an interesting set of possibilities. In principle I quite like the idea."

The carrier has dubbed its internal concept airline Emirates Express, and this would see an A380 with a lot more seats on it than the maximum the airline is planning to date, or another alternative it has considered is setting aside a low-cost area on the aircraft. Its most dense configuration will be a two-class cabin of 644 seats for routes into the Indian subcontinent. Long-haul routes see a three-class A380 with 489 seats, while medium-haul sectors will feature a three-class 530-seat aircraft.

Just in time for Christmas, there is a virgin birth, of sorts.
After more than a year of road shows with investors, and after months of "news any day now", followed by pregnant pauses, Virgin America has come up with real money, or at least real vows of money, to start founder Richard Branson's long-promised US airline.
With $177.3 million committed to its start-up, Virgin America would be the most strongly capitalised US launch ever, with deeper pockets than a 1999 venture known as New Air until it changed its name to JetBlue. Of the total, $90 million is from VAI Partners, a US investment group funded by Black Canyon Capital and Cyrus Capital Partners. The two investment funds are run by veterans of large Wall Street firms, including the defunct Drexel Burnham Lambert. About $30 million of the total comes from companies owned by Branson. The rest is debt held by Virgin companies.

Virgin America chief executive Fred Reid insisted that the capital structure fully complies with US rules on foreign investment in air carriers and stressed that the Virgin America application was unrelated to proposed changes in Transportation Department rules on ownership and control. Speaking from his car-phone on a warm California afternoon, the former Delta executive said, "This is something we have been working on for a long time. It just took longer than we thought."

With the funding committed, Virgin should have 17 new A319s and A320s flying within its first year. Virgin would name only one route, an unspecified New York airport to San Francisco, where it would use SFO, the San Francisco International Airport that is now its corporate base as well as its flight centre. It had earlier planned on a separate corporate headquarters in New York City. Reid did not explain the change but said, "With our plan, our business model and this funding, we'll be profitable with oil at almost any cost. We're building an airline people are going to love".

No mild-mannered Canadian, that Robert Milton, the former Yank who took Air Canada from near death to profits; as host of the latest Star Alliance chief executive board meeting in Montr饌l in early December, Robert, as Milton is called by all, has rallied at least one Star ally to his fight against rising airport fees that finance grand and grandiose terminal construction, the Taj Mahal syndrome as he calls it.

Robert came to the Star summit fresh from a meeting of IATA - which he chairs this year - to reveal plans for a possible alliance boycott of the most egregiously offending airports. He says: "Airlines are going to have to talk in unison, beyond what the head of IATA, Giovanni Bisignani calls 'shouting politely'." Bisignani has campaigned diplomatically on this for the last three years and in November moved to a near-confrontation with the Airports Council International.

Milton is moving further, saying a boycott would mean "airlines as a group determining that they really will not as a group fly to a destination. That was discussed today and I think there really is a willingness to go that far because some of what is being done is really absurd. Unless we begin to act with one voice, we will continue to see this sort of reckless expenditure by generally ungoverned bodies around the world" - namely the "private monopolies" that many airports have, in his view, become.

Air Canada tried in vain to limit the massive C$3.3 billion expansion of Toronto Pearson, which is now "the most expensive airport on the planet", he said.

Milton, president and chief executive of Air Canada parent ACE Holdings, had an ally by the next morning: United Airlines chief executive Glenn Tilton. Sitting next to Milton at a breakfast table with reporters, Tilton said: "You bet I'm part of Robert's hit squad. You might call it Milton and Tilton..." Tilton joined Milton in naming Caracas, Venezuela, as a possible target; there, unlike the nearly-completed Toronto, action might head off unreasonable plans and inequitable fees. Tilton says: "There are a lot of airports on the hit list."

iPod Nanos, micro miniskirts, the relaunch of the Mini. It would seem everything's going small. And now airport hotels have their very own small but perfectly formed offering in the shape of Yotel - a no-frills but high-design hotel.

The people behind UK's trendy Yo! Sushi restaurant are bringing their high design concepts to the UK's hotel world, and have signed a contract with UK airport operator BAA. The agreement will see a 40-cabin hotel open at London Heathrow Terminal 4 and a 50-cabin hotel at Gatwick's South Terminal in early summer 2006.

Yotel's design accommodates small areas with not much natural light, meaning airports, underground buildings and poky inner city locations are ideal.

Designed by Priestman Goode - who also worked on the Airbus A380 interior - the 10m² capsules feature rotating double beds, sophisticated lighting, pull-down desks, shower, in-built flat screen TV and wi-fi access.

Travellers will be able to book their rooms in four-hour blocks.

So far it's been almost a love fest, the battle over Love Field in Dallas and the limits that the 1979 Wright Amendment put on flights to and from the close-in airport to protect the then-new DFW International airport. In its Set Love Free, Wright is Wrong campaign, Southwest has used its characteristic humour and trinkets: Set Love Free adorns the fanny packs, tote bags, sun caps and other paraphernalia that it sells (at low prices) on its Set Love Free website. The hub, with the backing of much of the business establishment of the Dallas/Fort Worth 'metroplex', has fought back with a serious staid website. Keep DFW Strong, its website, has drawn in community groups, even injecting that third rail of US politics, race and ethnicity, with testimonials for Latin (Hispanic American) groups. The argument is ideal for the Southwest public persona of the plucky underdog: "Aw, shucks, we just wanna to fly from our lil' ole' airport to wherever we want. Let big ole American fly from DFW wherever it wants. Fair's fair." Which is inarguably logical as far as it goes. And the counter-argument - "Gosh, you can just go on over to DFW and you can fly anywhere you want" - does not make the test of airline logic.

Now though the empire has struck back with truly Texas-sized trinkets: real airliners. The 800-pound gorilla of DFW, American Airlines, has moved to start flights from Love Field, a move that defies airline logic every bit as much as would a move by Southwest to operate at DFW as well as Love. The reality of course is that both are network carriers, and that neither benefits itself by splitting a node of its network. American admits as much when it says that adding Love flights was hardly its first choice but was an unavoidable response. American acted after the Southwest campaign gathered enough momentum to win another exception, this time a last-minute amendment that added Missouri to the list of states that are allowed nonstop Love service. That pointed a dagger at American's minihub at St. Louis, the last remnant of its 2001 takeover of the thrice bankrupt TWA. Adding love flights was the lesser of two unpalatable choices, American is saying. So this is no longer a Love fest, but perhaps that is the way the airline business is meant to be: airlines compete with each other, sometimes with sharp elbows, and so do airports.

"My ambition post exit is never again to be referred to as a legacy anything," said United Airlines chairman Glenn Tilton, speaking at a press briefing in London following a robust defence of the Chapter 11 bankruptcy protection process at an Aviation Club lunch. There should be no more legacy, he said, before answering the journalist's question: United should earn the right to be called a "network" carrier, with low-cost components.

United is on track to exit bankruptcy protection after 38 months in February. It is a long and distracting process, and an expensive one. Tilton noted that the cost to United in legal fees alone as of June 2005 stood at an astounding $260 million.

The high price of oil has hampered United's turnaround plan. For a former oil company executive it is an irony not lost on Tilton. "Imagine how schizophrenic I am about $56 crude oil," he joked.

The International Air Carrier Association (IACA) welcomed its first fully-fledged non-European member at its annual general meeting in Palma de Mallorca this week, with the addition of Nouvelair.

The latter is is a Tunisian carrier with seven Airbus A320s and two A321s that operates on routes between the North African country and Europe.

IACA, the trade body for leisure carriers, does have two Turkish members, Atlasjet Airlines and SunExpress. However, both have significant stakes held by German shareholders.

Intriguingly, a Chinese charter carrier has indicated interest in joining the association.

The other change to the membership is that there are now a number of airlines operating a hybrid charter/seat-only model. Indeed, the organisation and its members eschew the word charter, and in recent years have preferred the term 'leisure carrier' to emphasise that the business model is not just about traditional package holidays. But with some members also carrying business passengers, this definition is also being questioned. One delegate suggested 'low-cost leisure' may be the way forward.

Stelios Haji-Ioannou, the founder of UK low-cost carrier EasyJet and a host of other "Easy" branded products, has an intriguing business card. The job title he gives himself is Serial Entreprenuer.

And, after a lunch time chat at an Aviation Club event in London with Economist transport editor Ian Carson, Airline Business learnt where Stelios got the inspiration for his modest title. A couple of years ago The Economist was writing a story about Richard Branson and wanted a catch-all description for the Virgin Group's figurehead. Serial entreprenuer was their conclusion. Stelios conceded he had read the article and liked the term so much he pinched it for himself.

When he was interviewing for the job of managing director at his new low-cost venture EasyJet in late 1995, founder Stelios Haji-Ioannou was turned down by a lot of potential applicants. They did not fancy the challenge of running a two-aircraft airline operating out of London's Luton Airport.

Then another call came in, this time from New Zealand, recounted Stelios at an EasyJet party this week. The man on the phone was Ray Webster, a Kiwi with over two decades of experience of running airlines, latterly at Air New Zealand's low-fare affiliate Freedom Air. Stelios liked what he was hearing from Ray, but the small matter of being on opposite sides of the world was a hurdle. Stelios needed a leap of faith. "I said to him that if he would come here to Luton for an interview that weekend, at his expense, then I would see him."

Undaunted, Webster flew over for that weekend. In fact, he arrived a day early to look at EasyJet's Luton operation.

Stelios was suitably impressed and within 10 minutes Webster had the job.

That was 10 years ago. On Tuesday 29th November, the carrier marked its 10th anniversary and the retirement of Webster with a party.

Webster, who has had one of the airline's new Airbus A319s named after him, is taking a well-earned break when he officially retires this week. He will spend some time in New Zealand, Christmas in Dubai and some time on the slopes in the New Year. He will remain as a consultant to EasyJet and will begin considering other opportunities next year.

We expect you to take it easy for a while Ray, but don't stay away for too long.