June 2009 Archives

Here we go again. For years, the Bush administration dithered on Taiwan's request to buy 66 Lockheed Martin F-16C/Ds and never made its mind up. Instead, the Obama administration inherited the contentious issue and is about to start studying the request.

Taiwan is a special case in international relations, and Washington is wary of selling it anything that might harm its relationship with China. And 66 new F-16s will definitely make Beijing squawk loudly and temporarily freeze bilateral ties.

It will be a tricky decision. Some observers believe that the Obama administration will eventually go ahead and the only question when. Others feel that Washington will only sell Sikorsky UH-60 Blackhawks to Taipei and then sit on its hands for a while.

Taiwan also has some hard decisions to make. Its air force has approved AIDC's upgrades to the F-CK-1 fighter and is waiting for the government to fund the programme. It is also hoping to get mid-life upgrade packages for its F-16A/Bs.

Moving on these would boost Taiwan's air defence capability vis-a-vis China's air force, and buy them time until Washington does make a decision on the F-16C/Ds. Taiwan has to help itself even as the USA thinks about what it can do.

According to news reports from China, privately-owned Spring Airlines could give passengers the option of cheaper standing room only flights. I really don't see how they are going to get permission for this whacky plan.

And the more I read it, the more it sounds like this is coming straight out of the Ryanair and Michael O' Leary school of publicity stunts. Keep trying, guys.

China's government has granted approval for Aviation Industry Corporation of China (AVIC) to build a large amphibious aircraft for fire-fighting and rescue missions.

This is a programme the Chinese have been looking at for the last couple of years but according to the AVIC General Aircraft official I spoke to today last year's Sichuan earthquake was the impetus for the Chinese ministry of industry and information to give the go ahead finally.

The aircraft, which has been tentatively named the Dragon 600, will be a four-engine propeller aircraft.

When I met with AVIC officials in September 2007, they told me it would have a take-off weight of 60t and that the catalyst for the move was the August 2007 forest fires in Greece.

The officials back then said the plan was to deploy the aircraft overseas on fire-fighting and rescue missions.

If China succeeds in putting this aircraft into service overseas it will do a lot of boost China's image and develop goodwill overseas.

People overseas still associate China with the People's Liberation Army but if this aircraft is used to rescue people facing forest fires and other natural disasters it could change that perception of China as a threat.

It reminds me of the way, China has worked to win over other adversaries with the use of Panda Power, the Sichuanese pandas that China gives to overseas zoos as a way of encouraging people to take an interest in China.

India's SpiceJet has reported a sharp increase in its net losses for the last fiscal year, but it surprisingly had a relatively strong fourth quarter.

It is still not clear if that is a sign that things are taking a turn for the better in the Indian airline industry, but the fact remains that the carrier is still making losses due to high costs despite stronger demand for its services.

The other listed Indian carriers, Jet Airways and Kingfisher Airlines, will soon be reporting their full year results and that will give us a clearer indication of where things are going. And state-owned Air India and some of the privately held airlines are still not making money.

The Indian airline industry is still very much in the red overall, and there are numerous challenges ahead for them. They ordered too many aircraft during the boom times, and they focused on increasing market share without worrying about profits.

Expect to see more consolidation in the coming year as they grapple with both rising costs and falling demand for air travel. There is still much work ahead for India's airline industry.

Here's another great cheeky video from Air New Zealand. This will be the new in-flight safety video on all of the airline's domestic flights, and it is a fresh twist on their earlier "Nothing to Hide" campaign. If you still don't get it, watch their clothes carefully. Keep it coming, guys!

And below is a video of the bloopers!

It is a sign of the times when Qantas' share price moves up after the airline announces that it will cancel orders for 15 Boeing 787 dreamliners and defer the delivery of another 15.

Normally, the announcement would have been met with dismay. The 787 is meant to replace older Boeing 767 aircraft, and it would have helped to increase Qantas' revenues after coming into service by giving the carrier more range and capacity while lowering fuel costs.

But the airline is struggling to manage its balance sheet and preserve cash in these dire economic times. Cutting capital expenditure, therefore, is good news now and the shareholders are rewarding the airline for that.

On the other hand, what are the bets on the direction for Boeing shares when the US markets open tonight? The news could not have come for a worse time after the company delayed the first flight of the 787 once again earlier this week. It will add pressure on the company to get the programme on track before someone uses the delays as a reason to cancel their orders.

The Qantas decision is due more to the airline's financial situation, but this is bad publicity for the airframer any way we look at it. Boeing's shareholders are unlikely to be as optimistic.

 

 

While in Taiwan this week, I made a point of visiting Evergreen Aviation Technologies, the Taiwanese maintenance, repair and overhaul firm behind the Boeing 747-400 Large Cargo Freighter (LCF).

So far EGAT has produced three LCFs for Boeing, which uses the aircraft to transport subassemblies for the Boeing 787. No surprise then that Boeing has since renamed the LCF the Dreamlifter.

I was lucky enough to see the fourth LCF being worked on at EGAT's base at Taipei Taoyuan International Airport. This aircraft is due to be completed towards year end.

When you see one of these LCF up close it is really impressive. This is the only freighter conversion work EGAT does at present but it has got to be the most ambitious cargo conversion programme ever undertaken.

 

  This week I have been in Taiwan meeting with the heads of China Airlines, EVA Air and TransAsia Airways to write a report for Airline Business magazine on the further opening of cross strait flights.

In April, a new landmark deal was signed in which, for the first time since 1949, there will be non-stop scheduled passenger and cargo flights starting in August.

CAL's president Sun HH (seen in the picture) sums up the enthusiasm by saying: "This is what we have been working for for so many years."

TransAsia Airways chairman Charles Chen goes further by saying the very survival of TransAsia depended on getting traffic rights to China.

But the Taiwanese carriers' enthusiasm is capped, the same way the number of Chinese tourists to Taiwan is capped.

Under the agreement, China has said it will allow 3,000 tourist arrivals a day.

Sun says from January to early March the number of tourist arrivals each day was less than 1,000 but starting in early March it rose rapidly and for April and early May it was 6-7,000. Under the scheme the number can be more than 3,000 daily if it averages out at 3,000 per day over the course of the year.

The number of tourist arrivals depends on China granting visas and the Taiwanese know China controls the lever. This means some Taiwanese are concerned.

They can see what has happened to Macau.

Macau experienced a gambling-fuelled boom up until last year but it came to an abrupt end when the Chinese Government stopped issuing as many tourist visas.

These concerns may explain why none of the Taiwanese carriers are rushing to order aircraft.

For an airline known as the "Maharajah", or emperor, of the skies, it has been quite a come down for Air India in recent weeks.

We knew that things were not going well at the state-owned carrier, which in reality has been a mess for several years. But the first sign of how bad things were came when Raghu Menon was eased out as chairman and managing director in April after only a year.

The full extent of the troubles has been revealed, with the government likely to cough up the $800 million that is needed to keep Air India afloat. It has attached strings to the bail-out and Arvind Jadhav, who replaced Menon, has the unenviable task of embarking on a massive restructuring of Air India.

Air India's management need to employ all of their skills - and have massive doses of luck - to achieve New Delhi aim of becoming profitable within two years. The airline is now only the third largest in India measured by its share of domestic traffic, and it has the lowest load factors in the country. Translation: passengers shun it and it has highly inefficient operations.

Some say that New Delhi will not allow the airline to fold, and that may be true. But there is an added impetus to reform the airline - the government does not want to erode its fresh electoral mandate and the goodwill it has through a massive but unsuccessful infusion of public funds into an ailing and ineffective carrier. In India, where politics permeates everything, Air India could become a tinderbox.

The Maharajah needs new clothes and they are going to be very expensive ones.

AirAsia is in a tussle with Malaysia Airports, operator of Kuala Lumpur's low cost terminal, over RM65 million ($18.4 million) in taxes that owes.

The airline refuses to pay until the operator lowers its fees, which AirAsia says are unfair and too high. This comes after AirAsia CEO Tony Fernandes called airport operators "parasites" in a recent interview with our sister publication Airline Business.

The spat comes a few months after Malaysia Airports stymied a bid by AirAsia to build and operate its own budget terminal away from Kuala Lumpur International Airport. It has promised to expand the low-cost terminal at KLIA to cater to AirAsia's growing business, but the airline doubts that the operator will go far enough.

Malaysia's government is trying to mediate between the two on both issues.

The result could have implications on how low-cost carriers work with airport operators. Airlines like AirAsia feel that they should get preferential treatment due to the sheer number of passengers that they bring to the airport, and it could pave the way for other carriers to demand the same if it gets its way with Malaysia Airports.

Low cost carriers around the world will be watching the way this is resolved.

There has been another accident involving a Zest Airways MA60 (similar to the one above) in the Philippines. This morning, one of the China-made aircraft overshot the runway while trying to land at Caticlan airport and ended up in a canal. Luckily, nobody was hurt in the incident.

It is still not clear what caused the incident and we still do not have any photos from the airport. Investigators from the Civil Aviation Authority of the Philippines are on their way to the airport, which has been shut indefinitely.

By sheer coincidence, another MA60 operated by Zest crashed at Caticlan in January. The airline, however, clearly has confidence in the aircraft type and ordered another six MA60s last week. Good luck to them.

The accident raises questions about air safety in the Philippines once again, and the authorities certainly need to do more to allay the worries.

One man's meat is another man's poison. The latest delay in the Boeing 787 programme is disappointing news, but Asian airlines are likely to have mixed emotions.

Have some pity for launch customer All Nippon Airways - it is going through what Singapore Airlines did with the Airbus A380. Just last week, there was a celebration in the USA as Boeing rolled out the first 787 in ANA livery. Now, the celebratory sake would have soured as its marketing and advertising personnel put aside the promotional material once again.

Carriers with a long-term view like ANA and Qantas would also want their aircraft in their fleets sooner rather than later to meet operational requirements. Simply put, the folks at ANA would rather have the 787 in service than the Boeing 767-300ERs that they have ordered as interim capacity.

At the same time, Chinese airlines like Air China, China Eastern and China Southern are probably somewhere in between. They would have liked to have some 787s in service, but they have already adjusted the delivery schedule and are not one of the early recipients. That has worked out well given the current economic climate, and at a challenging time for the Chinese airline industry.

Others India's Air India and Jet Airways must be relieved. Their weak balance sheets mean that they can hardly afford the capital expenditure that comes with new aircraft like the 787, which are due to be delivered in addition to other types that were previously ordered. The delay is probably a blessing in disguise.

When the 787 eventually flies, will be a big boost for airlines that hope to have a fuel-efficient aircraft with a longer range than existing ones. But in the current economic climate, some Asian airlines would probably be glad that they do not have to induct new aircraft at a time of falling load factors and reduced capacity.

It has been a landmark week for both China and Airbus when the first A320 (above, having its first flight) to be assembled in the country was delivered to its customer on Tuesday and began operations with Sichuan Airlines on Wednesday.

For China, it shows the world that it can manufacture an aircraft that meets the highest standards desired by a global aerospace giant like Airbus.

For the EADS subsidiary, it is an important step towards capturing half of China's airline market - Airbus now has around 40% market share. The Tianjin assembly plant is one way of being close to the customer.

These are challenging times for the global airline industry, but Airbus and China remain optimistic about the prospects for China's airline industry.

The European Commission could allow four Indonesian airlines to fly to the EU from next month, lifting a ban that it imposed last year after a number of accidents, some of which were fatal, involving the country's carriers.

Airfast Indonesia, Garuda Indonesia, Mandala Airlines and Premiair are likely to be the beneficiaries when officials from the EU and Indonesia meet next week, and the onus is now on them to raise the image of the country's airlines.

There have been far too many safety lapses in Indonesia, although the country's regulators are trying their best to improve that. A lot is at stake - the Indonesian airline business, the country's reputation, and its tourism industry.

Indonesian airlines will continue to be closely monitored by the EU in the coming months. If these four prove to the EU that they can meet global safety standards, they would set the standard for other carriers and it would be a big boost to the Indonesian airline industry. If they fail, the repercussions could be devastating.

The ball is in their court.

Eurocopter has learnt its lesson from the last time around, and is sending the militarised AS550 C3 Fennec (above, at the Paris Air Show) to India for the light utility helicopter trials. The last time around, it used the civilian version of the helicopter, the AS350. This became a controversy when it won that competition, which was eventually cancelled for various reasons.

Let's just hope that it has also learnt not to use those who are close to members of the tender's selection committee as its representatives while the bidding and evaluation process is underway!

Vietnam's military market has been thought of as a potentially big one for western defence contractors for a long while, and it could finally open up for them if Eurocopter lands a deal with the country's navy to sell the EC225 (above) and EC155 (below) helicopters.

Lockheed Martin executives have already said that their F-16 could be offered to Vietnam late in the next decade when the country is expected to begin a new competition for fighters, while Boeing officials have also been wondering if there might be a market there for either the F/A-18E/F or F-15SE.

Ever since Vietnam opened up its economy, its dependence on the former Soviet Union and Russia has eroded and it is now a major investment destination for US and European companies. Its military market could be the next target for them.

Want to see what the Mitsubishi MRJ would look like? I just got this off the Mitsubishi Aircraft guys, and it is a pretty cool promotional video of the regional jet.

Here are some photos I managed to get off the internet of an AirAsia X Airbus A340-300 (above: AirAsia staff with the aircraft in the background, below: the aircraft in hangars) painted in the colours of the Oakland Raiders American football team

When I interviewed AirAsia chief Tony Fernandes last month, he said that most sponsorships are related to routes. Hence the sponsorship of the Williams F1 team - many of the races are held in cities that AirAsia and AirAsia X, its long-haul low cost associate, fly or plan to fly to.

And that brings me to the Oakland Raiders aircraft. The airline has said that it is considering Kuala Lumpur-Los Angeles and Kuala Lumpur-London-New York flights, and the USA is a potentially big new market along with more cities in Europe.

The airline ordered the Airbus A350s at Paris, and it all points to a massive increase in routes in the coming years as AirAsia and AirAsia X expand their network. AirAsia is no longer just a player in the regional market - it is fast becoming a global airline, and that point will only be underscored when it begins flights to the USA.

Given the uncertain market at home for the Hongdu Aviation L-15, China Aviation Industry Corp (AVIC) is pushing the advanced jet trainer to foreign customers here in Paris. The company has brought a model and simulator, and has been seek talking to officers from several foreign air forces.

The latest version, the L-15-05, had its maiden flight in 9 June. But there is still no news if the People's Liberation Army Air Force is keen to induct the type. Hongdu Aviation and AVIC are promoting both the baseline AJT version and a light attack variant that comes fitted with weapons to foreign customers. Namibia, the Democratic Republic of Congo and Zimbabwe have been mentioned as potential customers.

China is keen to become an arms exporter to reduce the cost of manufacturing these products at home, but politics plays a major part in these deals as well, especially since Beijing is keen on the raw materials in these countries to feed its massive manufacturing industry at home.

For those who are keen to see what the L-15 looks like, here is a video of the aircraft flying at the last Zhuhai Air Show.

Canadian fashion model Linda Evangelista once famously said she wouldn't "get out of bed for less than $10,000 a day".

Twelve months ago Airbus chief operating officer customers, John Leahy, might have had a similar attitude. But how things have changed.

At the Paris Airshow, Airbus issued a statement announcing Philippine carrier Zest Airways ordered for one A320. That's right. Not 10 but ONE A320.

Leahy was quoted in the release talking about how pleased he was that Zest Airways had decided to buy from the manufacturer.

Its also interesting to note that this aicraft is due to be delivered to Zest Airways next month. It used to be that airlines had to wait months and years for aircraft to be delivered. That is no longer the case.

Taiwan plans to upgrade its indigenous AIDC F-CK-1 fighters to the C/D "Goshawk" standard, but it may not be enough. Washington is still stalling on Taipei's request to buy 66 Lockheed Martin F-16C/Ds, and there may be a major capability gap vis-a-vis China's air force without them.

Apart from the IDFs, the air force also operates Lockheed F-16A/Bs, Northrop F-5 and Dassault Mirage 2000-5s. If there is a conflict across the straits, they will come up against China's Chengdu J-10s, Chengdu FC-1s, Sukhoi Su-27s and Su-30s.

The assumption is that Taiwan will be the defender in such a situation, which means that it would require fewer fighters than China. So while its current fighters may be sufficient, bolstering them with a fourth generation fighter like the F-16C/D - and proper surface-to-air defences - would greatly increase its chances of warding off an air attack.

Indonesia is a massive archipelago with over 15,000 islands, many of which have only short runways. Therefore, it is no surprise that several companies are keen to offer air services using smaller aircraft.

Susi Air is one of them. In Paris, the company ordered 30 Cessna Grand Caravan turboprops, a Piaggio P180 Avanti II turboprop, and one AgustaWestland AW119 Ke single engine helicopter and one AgustaWestland Grand light twin helicopter.

It was created by Susi Pudjiastuti and Christian von Strombeck (above) in late 2004, with an original mission of transporting fish from Western Indonesia to other markets in Asia. The company, which already operates 10 Cessna Caravans, has now added scheduled commuter services and on-demand services for VIPs and passengers as well as cargo, as well as flight surveying and pilot training.

Indonesia is becoming a major general aviation market in Asia, something that will continue over the next few years, and companies like Susi Air are in a good position to take advantage.

  Since the stock market rally started in late March, many publicly-listed Chinese carriers have experienced a 50% increase in their share price, making Chinese carriers the best performing airline stocks in the world.

But what is the reason for this increase? It seems a bit unusual considering other airline stocks are still suffering due to the sharp fall in traffic.

There is also no indication that Chinese carriers - with the exception of Air China - are financially strong. In fact, China Southern and China Eastern have had to rely on government bail-outs.

Loss-making Shanghai Airlines, meanwhile, has had to merge. So why would investors buy into airlines that are losing money and are subject to government bail-outs?

Well there has been one positive change for the large publicly-listed Chinese carriers. The Civil Aviation Administration of China has made it clear that it supports the big three carriers and that it doesn't think much of the small privately-owned carriers.

This means investors can be confident that if they buy into Air China, China Eastern or China Southern that these carriers will be around in future and that it is now less likely that new entrants will significantly dent their market share.   

Aircraft orders are usually the biggest news in air shows, but that has certainly been scarce in Paris this time as the global economic crisis bites in.

So it has been left to the Asian airlines to make many of the headlines in what has generally been a rather slow show.

AirAsia X has ordered 10 Airbus A350-900s, Vietnam airlines said yes to 16 Airbus A321s and two ATR 72-500s and signed a memorandum of understanding for two more A350-900s, Cebu Pacific inked a deal for another five Airbus A320s.

There is something to be said about all of these airlines, which appear to have sensible long-term business plans. And so unlike the Indian airlines, who have been conspicuous by their absence this time and are now the victims of their own doing.

Cross-straits ties are set for a further boost through the aerospace industry if Taiwan's AIDC wins a contract to be a supplier for China's upcoming narrowbody passenger aircraft.

AIDC officials yesterday confirmed that they could help Commercial Aircraft Corp of China's (Comac) manufacture flaps, slats, leading edge flaps, rudders, elevators and belly fairings.

China has regarded Taiwan as a renegade province since its ruling communists won a civil war in the mainland in 1949 and there were only irregular air links between the two until last year.

That changed after Ma Ying Jeou became Taiwan's president in May 2008, and regular direct charter flights began last July. In April this year, Taiwan and China agreed to allow scheduled services and for more cargo and passenger flights.

AIDC's president George Shiah may want to avoid the political aspects of the deal. But it would be stretching things to think that in China, where the state runs the aerospace manufacturing industry, there isn't some form of recognition right at the top of the government that this would be a big boost to bilateral relations. And that can only be a good sign.

Here is the Airbus A350 in the AirAsia X livery. The Kuala Lumpur-based long-haul low-cost airline has ordered 10 A350-900s as part of its plans to expand its services in the 4-8h mark.

The carrier, an associate of Malaysia's AirAsia, placed a firm order for 10 aircraft with deliveries due to begin in the first quarter of 2016. It was weighing up the A350 against the Boeing 787 but earlier this month indicated it had settled on the Airbus twin-jet.

The airline is fast becoming one of the key players in the low-cost market and Tony Fernandes, the chief executive of AirAsia, said in an interview with Airline business last month that it was a "wonderful addition" to the AirAsia brand

AirAsia X, however, sure plans to pack them in when it starts to operate the aircraft. It says that it will have more than 400 passengers on board in a two class configuration. It just may be a little tight back in economy.

Here is the first ATR 72-500 in Vietnam Airlines' new livery. The airline inked a deal for another two ATR 72-500s in Paris, bringing the total it bought since 2001 to 16. It already has three in service and the one in new livery will be its fourth.

I just received some pics today from All Nippon Airways (ANA) showing a Boeing 787 test aircraft painted in ANA livery.

The Star Alliance carrier received these pics courtesy of Boeing which must be working over time to keep ANA and other 787 customers on side.

Boeing is due to have the first flight of the 787 before the end of this month but it seems to be waiting until the very end of the month to do this. ANA is due to receive its first 787 in February.

 

 

 

Here is a picture of the ATR 72-500 in Lao Airlines colours. The airline, the national flag carrier of Laos, said in Paris that it will introduce the aircraft into its fleet in the coming weeks. The 70-seat aircraft will join a fleet of two ATR 72-200s in the carrier, which is expecting its second ATR 72-500 to be delivered later this year.

Two years ago when I was at the last Paris Air show, top executives from the Indian carriers were out in full force signing orders and meeting manufacturers as they rode the wave of optimism about the country's airline industry. There was a wave of excitement as reporters followed the likes Kingfisher CEO Vijay Mallya and Jet Airways CEO Naresh Goyal around the show.

How things have changed in just less than 24 months. None of the Indian airlines made it to the show this year, and their absence is a sign of the times.

They were already not making money during the good times, but the prospects have visibly darkened over the last few months as the global economic crisis bit. Massive losses are the order of the day as they try to form alliances and explore almost every way possible to cut costs.

Perhaps, nothing exemplifies their plight better than the fact that state-owned Air India has to delay paying its staff their wages for two weeks. It is also waiting on a government bail-out to help pay for its operations.

Demand continues to grow in India but the airlines cannot try to increase their market share without thinking about the future. Only through sensible business plans, backed by prudent investment, can India's airline industry return to profitability. Hopefully, that will happen before the next Paris Air Show in 2011.

The pilot of this Dornier 328 turboprop passenger aircraft slips into the grass beside the runway while trying to land at Tanah Merah airport in Papua province, Indonesia. The only operator of the type in Indonesia is Xpress Air, but it is not clear if this aircraft is part of its fleet.

You can see the propeller fly off at 0.15 as the wing hits the ground, and the passengers scramble off later on as the aircraft comes to a stop.

If you look closely at the start of the video and read the comments, it appears as though the pilot was trying to avoid the dog that ran across the runway. But the dog is a far way off from the aircraft, which was trying to land in wet conditions, and it appears as though the pilot literally slips up.

Thankfully, nobody was reportedly injured in the incident. Having said that, it makes for a great funny video.

India is becoming an increasingly important market for Boeing, with many of the company's military products corresponding to the country's ongoing requirements.

Jim Albaugh, president of Boeing IDS, said in Paris that the company is looking at strategies to win the highly lucrative Indian contracts that could be worth in excess of $20 billion in the next few years.

 "India is looking for tactical aircraft, maritime patrol, heavy lift helicopters, tactical transport aircraft, attack helicopters and even airborne early warning systems in the future. We can offer something in all of those segments and the country is a great opportunity," he says.

The company made a breakthrough in the country earlier this year when it signed a deal for eight P-8 Poseidon long-range maritime patrol aircraft in a $2.1 billion deal. Its F/A-18E/F fighter is also in contention in India's medium multi-role combat aircraft competition that could be worth $10-12 billion. The CH-47F Chinook heavy lift helicopters and AH-64D Apache attack helicopters are also in the running in existing requirements, while New Delhi has also issued a request for information for tactical transport aircraft for which Boeing is offering the C-17.

International markets are very important for Boeing, which is facing numerous challenges in the domestic US sector. The company, however, faces a lot of competition from the likes of Lockheed Martin and EADS, which have also taken steps to establish themselves in India in recent years.

It will be interesting to see how it all pans out over the next few years, and all eyes will certainly be on India.

As Hindustan Aeronautics officials arrive for the Paris Air Show 2009 this week for the air show, they will have last Friday's deal between Tata and Sikorsky to manufacture S-92 (above) cabins in India at the back of their minds.

Tata wants to move into India's aerospace industry and has deals with several Western manufacturers, including Boeing and AgustaWestland. Industry sources say that it is keen to expand its manufacturing base and begin full-scale aircraft assembly and production in the civil and military markets. This would put it in direct competition with state-owned HAL, which is now the only Indian company with the capabilities.

India's burgeoning aerospace market and the country's plans to open up the defence sector to private sector players has given the likes of Tata a chance to make a mark. If they are successful, it could radically change the country's manufacturing landscape.

But this could be an opportunity for HAL as well. Ashok Nayak, who became its new chairman and managing director in April, could use this as a reason to ring in the changes that the company needs to make to become more nimble and less bureaucratic. This is essential as it faces up to competition from the likes of Tata.

If it succeeds, India will likely have a truly competitive and world class aerospace industry. If it does not, HAL risks falling behind the upstarts over the long term.

A Vietnamese Sukhoi Su-22M4 (similar to the type shown above) crashed into a farm on Wednesday, killing the pilot. The aircraft was on a routine training mission when the incident took place, according to Vietnamese news reports. An investigation is underway.

Vietnam has bought over 120 Su-22s (below is a video of the type), which are a variant of the Soviet-era SU-17 attack aircraft. Around half of these are believed to be still operational. Hanoi is looking to modernise its air force, which also has RAC MiG-21s, RAC MiG-23s, Su-27s and Su-30s in its inventory. It is in the process of inducting additional Su-30s.

Being first has its advantages. Singapore Airlines, which was the launch customer for the Airbus A380, will now operate the aircraft on its Singapore-Hong Kong flights.

This makes it the first airline to fly the European superjumbo to Hong Kong. Earlier this month, SIA began using the A380s on its Singapore-Paris flights. It also operates the aircraft from Singapore to London-Heathrow, Sydney and Tokyo-Narita, and was the first there too.

It is still not clear which cities the SIA A380s will serve next. The airline has said that it will accelerate the retirement of its Boeing 747-400s, and those are the most logical routes for the A380. But it replaced a Boeing 777-300ER on the Singapore-Hong Kong route, and so that may not be cast in stone. Let's wait and see.

China's is now the world's second largest defence spender, something that would surely alarm its neighbours who will want to speed up the modernisation of their armed forces as well.

The People's Liberation Army Air Force [PLAAF] is a big beneficiary of this money. It has inducted the Chengdu Aircraft J-10 [official video above] and Chengdu J/F-17 fighters [below], and is believed to be having trials for the J-10B, an upgraded version of the multi-role fighter.

Ongoing military programmes within China re reportedly looking into fifth generation fighter, unmanned combat aerial vehicle programmes, new attack helicopters, airborne early warning and control [AEW&C] systems, and high-altitude long-endurance UAVs.

China's neighbours like Japan and South Korea have been increasingly wary of Beijing's plans to modernise its air force. Japan has renewed its efforts to procure the Lockheed Martin F-22 Raptor from the USA to modernise its air force, while Australia said earlier this year that China could become a maritime threat.

Another Indian Air Force aircraft is believed to have crashed, this time an Antonov AN-32 transport aircraft (similar to the one pictured above) with 12 people reportedly on board. This follows the crash of a Sukhoi Su-30MKI earlier in 2009 and several fatal incidents involving other IAF aircraft over the last year.

We still do not know what happened with the AN-32, but what is clear is that the IAF needs to push ahead with its modernisation programme and replace a lot of its ageing aircraft sooner rather than later.

It is simply too costly to maintain so many old aircraft, and the chances of unfortunate incidents like a crash increase as time passes by.

What price a dream? For Japan, it may be $12.5 billion for the fighter that it most covets.

It appears than an export model of the Lockheed Martin F-22 Raptor for Japan could cost $250 million apiece. Reuters reports that the price was revealed in a letter that US Senator Daniel Inouye, who heads the Senate Appropriations Committee and supports the fighter's sale, sent to Japan's ambassador to the USA and US Defense Secretary Robert Gates.

This includes the cost of developing an export model of the F-22, which is not available for export in its current form due to its highly sensitive equipment. It assumes that production would take place five years after a contract, with deliveries to begin in seven to nine years.

Japan has said in the past that it wants to buy 50 fighters as part of its F-X requirement, and the total bill if it gets its hand on the Raptor could come up to a whopping $12.5 billion. Even if it goes for half that number, it would still amount to $6 billion. That is a lot of money.

The unit cost is much higher than the $150 million that the USAF paid for each aircraft in the last batch of F-22s that it ordered. Gates announced in April that the Pentagon would halt the production of the Raptor at 187 airplanes after ordering four more in fiscal 2009, which ends 30 September.

So I repeat what I said in an earlier - it makes little sense for the Japanese to spend so much on a tuned down Raptor when it would be better value to get something else. Boeing's F-15 Silent Eagle and F/A-18E/F Super Hornet, Eurofighter Typhoon and eventually the Lockheed Martin F-35 would probably be better buys than a fighter that has been stripped away of the features that actually make it special.

But then again, very little makes sense when it comes to Japan's military procurement policy.

Asian airlines have the most belt-tightening to do if they want to return to profitability, according to the International Air Transport Association (IATA).

The IATA has revised its airline financial forecast for 2009 to a global loss of $9 billion, almost double its March estimate of $4.7 billion, due to a rapidly deteriorating operating environment. Asian airlines will conbtribute $3.3 billion to that figure, the largest among any region.

"There is no modern precedent for today's economic meltdown. The ground has shifted. Our industry has been shaken. This is the most difficult situation that the industry has faced," says Giovanni Bisignani, IATA's director-general and CEO in an address at the association's annual general meeting in Kuala Lumpur.

"Japan, the region's largest market, is in deep recession. The growth markets of China and India are delivering major losses as export-driven demand slows," says the IATA.

Both airlines and governments would do well to take heed - unchecked growth at any cost has resulted in this situation, which can only get worse if nothing is done to arrest the decline.

I was lucky enough to spend late last week having a personal tour of Indonesia Technic, the two-year old MRO business of Indonesian carrier Lion Air.

Lion Air outsources most of its heavy maintenance work to GMF AeroAsia but it does Boeing MD-82 heavy maintenance in-house at Jakarta Halim Perdanakusuma Airport.

I visited their facility near Jakarta Soekarno-Hatta International Airport, where it does a lot of low-level maintenance work for MD-80s and the other aircraft in its fleet such as Boeing 737-900ERs

It is certainly not the glamorous part of the business but it is impressive that Lion Air is investing so much in its support business.

Indonesia's Director General of Civil Aviation has given Lion Technic part 145 to do limited line maintenance, limited power plant and limited airframe work. 

The facility I saw had six or seven buildings housing an assortment of maintenance activities. The most basic activity was the seat cover repair and dry-cleaning section. There is also a division that looks after wheels and breaks.

But it does do work that involves more skill. It has, for example, a section that repairs and overhauls aircraft components and a section that does non-destructive testing.

Lion Technic is still a small player in the world of MRO but I can see it growing into a very large business one day.

Washington is tantalisingly holding out the Raptor lollipop to Japan once again, but Tokyo is unlikely to get a lick. According to news reports, the US Senate is exploring the viability of creating an export variant of the Lockheed Martin F-22 stealth fighter (above, arriving in Japan for an exercise).

This comes after US Defense Secretary Robert Gates said in April that the Pentagon would halt the production of the F-22 at 187 aircraft, after ordering four more in fiscal 2009 that ends September 30. But several countries, most prominently Japan, are keen on an export variant and Lockheed would like to keep the production line open as well.

The Senate move sounds like great news for Japan, which has long coveted the F-22 for its next generation F-XX programme. But unless it makes a very strong case, and commits hundreds of millions of dollars to finance the development of an export model (which will take years to come up with), it will not get it. Gates has said that the aircraft will not be exported, and it is unlikely that Senate - or Tokyo - will make headway against a man who sticks by his decisions.

So here's a message to the bureaucrats at Japan's defence ministry - forget about the F-22. Why spend so much money on a tuned down version of the Raptor - and am I the only one who thinks that an F-22 without its best technology would just be another ordinary fighter - when it would make more sense to go and get something else. The Boeing F-15 Silent Eagle, Boeing F/A-18E/F Super Hornet, Eurofighter Typhoon and eventually the Lockheed Martin F-35 - all of those would probably be better buys.

India's air force has completed the technical evaluations of the contenders for its medium multi-role combat aircraft competition. And, just as we reported few weeks ago, the Dassault Rafale (the very nice looking French fighter that you see in the video above) is still in the mix despite media reports to the contrary.

Which just goes to show that there is still a long way to go in this competition, and any reports that someone has been kicked out must be taken with a pinch of a salt - unless you hear it here first!

Just a note to the companies that are competing for the MMRCA and other Indian military contracts. The country's defence minister AK Antony has reiterated that India is eager to wipe away the stain of corruption that has plagued it in previous military deals. So keep your hands clean - you never know who may be watching you.

Here are some videos of the first Airbus A380 flight to Paris-CDG. A passenger took the first video as he boarded the Singapore Airlines flight and got some comments and gestures from the crew and passengers, the second is one of the aircraft taking off (at night, so the visibility and the video are really not that great), and the final video is of the aircraft taking off from Paris-CDG to return to Singapore.

I'll be on the flight when I go to the Paris Airshow next week!

Kids who don't want to eat their vegetables may find some friends among Taiwan's airlines. According to news reports, the carriers are removing potatoes, carrots and other root vegetables from their in-flight vegetarian menus to comply with International Air Transport Association regulations.

The change is to follow Indian vegetarian rules, which according to the IATA mean that vegetables that grow under the soil and never see daylight are not allowed. Now, I am not sure where the IATA got its information, but I have eaten many Indian vegetarian meals and they sure have included plenty of root vegetables.

Unsurprisingly, the measure is likely to provoke complaints from Taiwanese vegetarian passengers already riled by the limited choice of in-flight food, says the Chinese-language Liberty Times. This is because meals on the airlines will no longer be able to use local favourites like sweet potatoes, carrots, potatoes and even ginger - a staple of Taiwanese dishes.

Caterers quoted by the news reports say that vegetarian food is a growing market for airline meals. An estimated 33% of Taiwanese citizens regularly come in touch with vegetarian cuisine, and 10% of Taiwanese airline passengers will order specially tailored meals, with Asian-style vegetarian meals the vast majority.

If this is the Taiwanese airline version of a food fight, I am backing the passengers to win this round.

"China Eastern to establish airline in Yunnan province", says one of the headlines in China's state-controlled news media.
At first glance, it may seem like a new airline but in fact it is not. China Eastern already has a carrier in Yunnan province's capital Kunming.
In fact, what is happening is China Eastern is reducing its equity in China Eastern Yunnan branch by selling a stake to the Yunnan provincial government. Rather than an effort to expand, this in fact part of China Eastern's effort to sell non-core assets and extricate itself from businesses that may push the cash-strapped carrier to the brink.
China Eastern has been losing hundreds of millions of dollars and has had to rely on government bail-outs to survive.
Last Friday I spoke to the Centre for Asia Pacific Aviation's executive chairman Peter Harbison who predicts the central Government is going to put China Eastern under increasing pressure to fundamentally restructure its business.