July 2011 Archives

The fact that Boeing has decided to go derivative rather than all-new for its competitive response to the Airbus A320neo will have been greeted with relief in Toulouse, but it could actually create headaches elsewhere in the airframer's product line-up.

Okay, so the threat of the A320neo being obseleted almost before its paint has dried by an all-new competitor from Seattle has gone. But this removes a huge potential weight from the Boeing PD engineering teams who - once they've sorted 787-9 and possibly -10 and tinkered with the 737RE, will be relatively unencumbered.

And guess what their next task will be? You can bet it will centre on nailing the 777 refresh/successor programme to blow the A350-1000 out of the water (now they have a better idea what that beast will actually look like).

And don't take my word for it - that was the surmise that a certain industry icon with the initials SUV made to me a couple of months ago, and he knows a thing or two about product development.

Given the lukewarm reaction that Airbus's attempt to sharpen up the A350-1000 received from customers at Paris, this task may be easier than Boeing had feared it would be.

The 777, in -300ER guise (above), is already established as the long-haul widebody benchmark so taking it on to the next level will be a challenge. And I wonder what engine the 777 revamp might have? There's one engine maker whose initials also stand for "Get Everything" that might possibly be well placed, particularly as Airbus has closed the door to anyone other than Rolls on the A350-1000 (below).

But then again, wouldn't a Pratt GTF-powered 777 be an interesting proposition? And Pratt of course let on a few years ago that it had been approached by an airframer about the possibility of a GTF sized for a widebody application. So the idea might not be as daft as it sounds...

The Sarasota region's tourism chiefs have got some big smiles on their faces this week following the news that their very own Siesta Key Beach has been named "America's Best Beach".

Normally, even the Airline Business blog does not venture into such territory. But seeing as this news comes from our friends in Sarasota, namely the city's international airport (SRQ) and its Convention & Visitors Bureau, and with both being former hosts of our popular airline-airport speed dating event Network USA. then we'll make an exception. Oh, and they invited us to a party in London to celebrate.

Having America's best beach is a peachy one, demonstrating the attraction of Sarasota as a destination. It is the first time in the 21 years that the award has been going that Siesta Key has won, says Erin Duggan, communications director at the Sarasota CVB.

Siesta Key is an eight mile long crescent-shaped barrier island on the Gulf of Mexico's Gulf Islands. The judging is done by Dr Stephen Letterman - aka Dr Beach - who undertakes a rigorous analysis of beaches across the USA to come to his decision, measuring factors like sand and water qualit and beach safety.

Waxing lyrical about Siesta Key, Dr Beach says: "The sand is super soft. So soft in fact that it sqweaks when you walk on it."

Sarasota is a popular destination for travellers from the US, Canada and Europe alike. British Airways, for example, via its Holidays arm has seen its business in the region rise by 20% this summer so far, says Gemma Pascall, BA Holidays destination executive.

BA Holidays works with 15 hotels and properties in the area and is always on the look out for more, she says.

Below, Airline Business publisher Mark Pilling (left) and SRQ marketing chief Michael Walley pose with the Sarasota beach rubber ring photo cutout. It's a tough job but somebody's got to do it right?

"This is the world's greatest flying machine, I'll tell you that!" 30 years ago, those words from  STS-1 commander John Young ushered in what many thought would be the era of routine spaceflight after he had flown Space Shuttle Columbia to a smooth touchdown at Edwards AFB in California.

For Young, along with "co-pilot" Bob Crippen, had become the first astronauts to ride a spacecraft into orbit and then "fly" it safely back to a runway landing.

And back in 1981, when NASA achieved that remarkable feat (above), many of us really believed - or hoped, perhaps - that the shuttle era would lead to regular - perhaps weekly - flights into space from "shuttle-ports" across the USA, and maybe even the world. Perhaps there was even the chance that, by the turn of the century, a fleet of "Pan Am World Spacelines" shuttles could be ferrying civilian passengers to huge orbiting space hotels?

But the reality, of course, was somewhat different. NASA never got anywhere near its launch frequency targets, and the world would quickly wake up to the fact that space travel would never become "routine" when the Challenger exploded within sight of the Kennedy Space Center on that tragic day in January 1986.

So three decades on from that first historic mission in April 1981, the return of a shuttle, in this case the Atlantis (above), to KSC earlier today for the last time finally ends those dreams about space-planes operating scheduled passenger services into orbit. But it was great while it lasted, and who knows - perhaps one day it may still become a reality! Thanks NASA, for letting the world almost live the dream for three decades!

American's order for 260 A320s is a landmark deal for Airbus, as it represents Toulouse's first narrowbody deal ever with the Iconic US carrier. It also marks the first Airbus order from American for some two decades - in 1986 it was launch customer for the A300-600R widebody.

But the A320 deal is also a coup for Europe from an airline that has often thought a bit differently about fleet acquisitions. In the 1960s it was the launch customer for the UK-built BAC One-Eleven 400 short-haul jet (above), and 20 years later it ordered the Fokker 100.

But intriguingly, I recently learnt that Toulouse missed out on landing an American Airlines order back in the days of the Caravelle. Speaking to Sud Aviation and Airbus legend Roger Beteille for a forthcoming article on the Caravelle, he told me that there was a possibility of a sale to American during Sud's marketing tie-up with Douglas Aircraft in the early 1960s.

Beteille says that Sud made "the crucial mistake" of rejecting a Douglas suggestion, made at the request of American, to broaden the fuselage section to increase luggage capacity. That decision ultimately stunted the Caravelle's sales potential and left the door open to the US manufacturers who went on to enjoy huge sales success for more than a generation.

American's A300-600 acquisition, of course, would lead to the dreadful 2001 AA587 New York crash after a tailfin failure caused when the aircraft was apparently mishandled when flying through wake turbulence. Clearly this deal shows that both sides have now moved on from that tragedy.

Anyway, well done Airbus on this landmark A320 family deal. By my reckoning, that leaves just Delta as the airline that (in its own right) has never ordered Airbus single-aisles (or any type of Airbus, for that matter). Well this task should be easier for Airbus now, after Atlanta became an A320 operator through the take-over of Northwest!

I know it's only July (although the weather in London makes it feel more like October), but I think I might have just enjoyed the best moment of my first year as Airline Business editor.

For on Sunday night, I hosted my first Airline Strategy Awards (that's me mid-flow, below) - in the magnificent Great Hall at Lincoln's Inn - in front of an audience of over 200 distinguished guests that included a raft of current and former airline CEOs.

To be honest, it was a relief when the big night finally arrived as it had been six months in planning by the Airline Business editorial and events teams, along with partners Spencer Stuart who did a great job facilitating the whole judging process. And the last few weeks have been particularly challenging, as we juggled completing the final arrangements along with our IATA AGM and Paris air show responsibilities, and the production of this month's huge Airline Business issue which contains the our annual airline financial rankings survey.

On the night (17 July), Emirates boss Tim Clark (pictured below) was our most prominent A-lister, receiving the Airline Business award from myself and former editors Kevin O'Toole and Mark Pilling. This was a special 10-year award recongising the leader of the airline that has made the biggest impact over the decade that our awards have run.

Few would disagree that Tim and Emirates have achieved that. I think Tim's influence on the industry is best summed up by paraphrasing what another airline boss told me recently: "Emirates is the airline that other CEOs lie awake at night worrying about."

So congratulations to Tim for that well-deserved award, and to all the other 2011 winners.

And now I've got that monkey off my back, I can't wait for the 2012 event! 

More pictures from the event here:

http://www.strategyawards.com/strategyawards2011/gallery-2011#

More details about all the winners here: The Airline Strategy Awards 2011

This month's final flight by a BAE Systems Nimrod marked the end of an era in more ways than one.

The last Nimrod to fly, an R1 (XW664) was ferried from its old base at RAF Waddington to East Midlands Airport for preservation on 12 July, touching down after a flypast. That final flight came almost 62 years to the day that the world's first jet airliner, and the Nimrod's "great grandfather" - the de Havilland Comet prototype - completed its maiden flight from Hatfield.

Three years after that first flight on 27 July 1949, the Comet 1 ushered in the start of the jet age for airline passengers worldwide when BOAC put it into service on 2 May 1952 between London and Johannesburg.

The Comet 1 era was of course far too short, coming to an abrupt end in 1954 after a series of disastrous in-flight break-ups. The larger, re-engineered Comet 4 was introduced in 1958, when it inaugurated transatlantic jet services just ahead of the Boeing 707's arrival. But by then the de Havilland jet had missed its calling, although the Comet 4 series did provide the basis of the Hawker Siddeley Nimrod.

At the time of that 1952 jet airliner inaugural of course, it looked like the UK aircraft manufacturing industry was set fair to rule the commercial airways until fate took its toll.  So the retirement of the Nimrod is the final chapter in the UK's jet-age dream that began six decades ago.

Oh well. At least it gives me a good excuse to publish a few pictures of Britain's beautiful, RE Bishop-designed jet pioneer.

Emirates Airline president Tim Clark was presented with the 2011 Airline Business Achievement Award at the magazine's annual Airline Strategy Awards on Sunday night.

From left to right: Max Kingsley-Jones (Aug 2010-present); Tim Clark; Mark Pilling (July 2005-Aug 2010; Kevin O'Toole (1998-July 2005).

Airline Business editor Max Kingsley-Jones outlined the reasons why the three editors of the magazine over the past decade had chosen Tim as the most influential airline head over that decade.

His citation is in full here.

The full list of the Airline Strategy Award winners and photos from the night is found here. 

No doubt pilots at St Louis-based Trans States Airlines are welcoming a tenative argreement boosting salaries for captains by nearly 12% while first officers are set to enjoy a 14.5% rise.

But what I find most interesting was this quote planted in the release issued by ALPA.

"Trans States pilots provided Trans States Holdings the financial resources to start up GoJet Airlines and purchase Compass Air," said ALPA. "This TA finally recognises the sacrifices the TSA pilots have made to the continued growth of the company, and will allow both parties to move forward and expand this airline together."

Trans States parent Trans States Holdings had to create GoJet several years back in part to circumvent a stipulation in the American pilot contract that prohibited American Connection carriers from operating aircraft larger than 50 seats -- for anyone.  Republic Airways Holdings ran into its own problems with that little detail in American pilot contract, and had to pay fines to American while it worked to sort out operating certificates among its regional subsidiaries to comply with the scope restrictions of American's contract.

The irony here Trans States is no longer an American Connection carrier -- and its fleet is currently limited to 50-seat Embraer ERJs, which most pundits label as "undesirable."  

Where does this leave Trans States in the future if 50-seaters continue their decline in popularity? Trans States Holdings hasn't said which of its three subsidiaires -- Trans States, Comapss or GoJet -- will operate the 50 firm MRJs on order scheduled for delivery beginning in 2014.  Maybe this could be Trans States' time to shine on a larger platform.    

So English premiership side Manchester City have today confirmed that its City of Manchester Stadium, aka Eastlands, will from today onwards be know as the Etihad Stadium, as part of a expanded long-term sponsorship deal with the Gulf carrier. It follows in the footsteps of several other English football clubs in selling the naming rights to the stadium - notably Arsenal which play their home matches at the Emirates.

In many ways Manchester City and Etihad have mirroring ambitions, as both have been more recent arrivals to the top table. The Abu Dhabi-based carrier has rapidly grown to a $3 billion business since its launch in 2003 and has already climbed into the top 50 biggest airlines by revenue in 2010 (look out for annual rankings of the top 150 airlines in our August issue). And with a 100 aircraft on order has plenty of scope for more growth.

Man City meanwhile, after three decades in the doldrums and some pretty eye-popping transfer spending, finally last season broke the big four's stranglehold on Champions League football and will this season be looking to go one better and usurp arch rivals Manchester United's grip on the Premiership (apart from talisman Carlos Tevez who is looking for a transfer).

It's all a far cry from when Man City were playing in English football's third tier back as recently as 1999 at its old Maine Road ground - dubbed the Theatre of Base Comedy (in contrast to Man United's Theatre of Dreams) by City fan and commentator Stuart Hall.

We wait to see how long it will be for the Etihad name enters the lexicon of football supporters in the same way Emirates does at Arsenal - the latter was aided by it being a new stadium which didn't have any previous names.

And will more airlines follow suit? Could QPR one days be playing at Gulf Air Road? Or maybe Luton will play their home games at EasyJet Road. 

Demand erosion --- it's as equally unpleasant sounding as it is daunting. But for many of us that's what we eager to hear airline execs talk about later this month as the frenzied earning season kicks in for Americas-based airlines.

Have the fare increases that were so prevalent earlier this year waned as oil has crept back to the $90 range?  Are trends pointing to a troubling softness in demand?

At this point it's tough to say. JP Morgan analysts have trimmed their demand forcast 1% for the third and fourth quarters after slicing off 1% in May of this year.

Their take? 

"With demand bouncing around and no clear trajectory just yet, we nonetheless beileve it would be intellectually dishonest no to model for some level of demand weakness in 2H11."

To illustrate the waxing and waning of demand the analysts at JP Morgan say while June shows some sequential demand softening from May to June, "early channel checks" show July could turn a better performance than June.

Just how severe could the demand erosion be? JP Morgan's industry watchers think softer demand to only put a dent in the $8 billion in annualized industry fuel savings.

And what's become of the numerous fare incrases instituded early this year to offset fuel prices in the triple digits per barrel?  Here's the take from analysts at Rayomd James

"It appears that leisure travelers are resisting the numerous and cumulatively large fare increases implemented by the industry since mid December to offset higher fuel. With the recent slowdown in economic activity, we think airlines will be forced to retrench some of the fare increases."

Stay tuned for more on demand patterns when the chiefs weigh in.

As Red Bull Racing Formula 1 racer Mark Webber prepares to repeat his feat of a year ago by winning this weekend's British Grand Prix at Silverstone, he's swapped his 200mph RB7 for a 600mph Airbus A380.

Australian Webber, a "Qantas Ambassador", is to study for his pilot's license and has hooked up with his national airline to help him achieve his dream. He took the opportunity to get up close and personal to one of the airline's 450-seat A380s at London Heathrow, where he was shown around the cockpit by a Qantas training captain.

Qantas is providing "mentoring support" with one of its training pilots and will give Webber some valuable time in a flight simulator. It will also recommend an approved pilot training organisation for his tuition.

Webber is of course no stranger to "low flying", having famously become airborne in a high-speed barrel-rolling accident at last year's European Grand Prix in Valencia after colliding with the back of Heikki Kovalainen's Lotus (below). Here's hoping that Mark's next take-off is a less spectacular affair!