Comment: December 2011 Archives

Old friends Boeing and Southwest are celebrating another milestone in their 40-year relationship after the airline's decision to launch the 737 Max.

However, as with many relationships that span decades, cracks have emerged since the foundations were laid when Southwest ordered 48 737-200s and subsequently launched the -300, -500 and -700 variants.

Before Southwest opted to remain with old faithful the carrier had, during the past couple of years, publicly voiced frustration over Boeing's inflexibility in granting delivery slots and the airframer's hesitancy in fully committing to re-engine the 737 during the past year.

In April, Southwest chief Gary Kelly declared that during his 25-year tenure at the carrier little time had been spent with any other airframer besides Boeing, and "that's got to be different in the future".

Even if Southwest never held court with other airframers, the carrier offered public praise for the Bombardier CSeries and revealed the Airbus A320neo was included in the technical evaluation conducted prior to the carrier settling on the Max.

Perhaps to make Southwest feel more appreciated and smooth over any ruffled feathers, Boeing opted to sweeten the Max deal. Typically dodging questions on actual pricing, Southwest said only that it received a substantial discount from the list price.

Now the cracks appear to be mended in what Boeing Commercial Aircraft chief Jim Albaugh labels a "truly special relationship" between the airframer and Southwest, the real work lies ahead. Southwest's launch customer status gives it a pre-eminent position in approving the final configuration of the Max.

In some ways, Southwest has a blank canvas in crafting the direction of Boeing's 737 Max development, since the airframer has yet to declare which variant - the -7, -8 or -9 - will be built first. Boeing intends to work with the carrier during the next five to six years to "make sure it is the right airplane for Southwest".

As it works to meets the airline's demands, perhaps Boeing should consider accelerating firm configuration from mid-2013, instead of trumpeting the fact it racked up more so-called commitments for the Max during the programme's first 100 days than rival Airbus did after launching the A320neo a year ago.

After all, the airframer has a big promise to keep, with Albaugh having told Southwest: "We'll deliver the real thing, I guarantee you, on schedule and on spec, and you will continue to have the best aircraft in this market place."

(Published as main leader in Flight International 20 December)

Solutions for dealing effectively with the atmospheric volcanic ash problem for aviation are slowly coming into focus.

It is clear now that almost all the data that will provide best practice for operating in ash was already available in April 2010, when Mt Eyjafjallajökull erupted, grounding Europe. However, at the time that data was in the hands of scientists, not policy makers or decision makers. As usual, it took a graphic lesson from mother nature before national aviation authorities (NAAs), departments of transport and governments were prepared to listen to what the scientists had to offer. If they had known how to use the data, 98% of the flights grounded in 2010 would have flown safely.

When they did start listening, they found there was a lot to take in. Converting practical knowledge into sound policy takes understanding, and that is never instantly available.

What is happening now at the science level, is mostly about refining ash detection technology and methodology, about proving and refining the algorithms that enable the experts to define, not only where the ash is and where it is going next, but what its local concentration is. Also emerging is the understanding of which concentrations are hazardous and harmless.

Individual airlines that have to regularly deal with ash on the routes they fly had standard operating procedures determined by practical experience. The simplest example is that of British Airways, which nearly lost a Boeing 747 over Indonesia and subsequently learned that if it flew 100nm (185km) from the visible volcanic plume, it had no problems.

However, the NAAs want more than trial and error to make policy with: they want figures, they want tests, they want confidence. The rate at which the space-based and ground-based ash surveillance methodology is being refined is accelerating now it is being taken seriously. The airborne measurement and testing programme, however, has been lagging. There are only a handful of aircraft worldwide with the capability for ash surveillance and sampling.

Enter EasyJet, with an answer for Europe - fit 100 airliners based around the continent with an ash sensor developed by Norwegians and tested by Germans. That way, not only can pilots see ash ahead and avoid it, but the sampling data needed to build confidence in the total system will gradually accumulate. Who says low-cost carriers fail to think laterally?

(This article appeared as the main Flight International leader in our issue of 13 December 2011). 

For some, a bit of nostalgia vanished when American Airlines' parent, AMR, opted to file for Chapter 11 reorganisation on 29 November. As American's legacy competitors each took their respective trips through bankruptcy during the last decade, American loudly beat the drum that it, for one, had never opted to embark on that journey.

The period from 2000 to 2010 is referred to by many airline executives as the "lost decade", in which carriers were pummelled by the 9/11 terrorist attacks, the SARS breakout, ash-spewing volcanoes, swine flu and volatile fuel costs.

During that time, American continued to pride itself on the fact that it was the last legacy carrier standing without the help of the bankruptcy courts to toss out labour contracts and transfer pension burdens to the US government. But part of that gratification enjoyed by management was belied by discord among labour groups angered by the bonuses reaped by American's executive team during 2007 as the concession deals which labour agreed to in 2003, in order to stave off bankruptcy, remained unchanged.

Still, management argued in 2010 that it had a $600 million labour cost disadvantage relative to its network peers, and in its statement on the Chapter 11 filing emphasised its plans to initiate further negotiations with unions to reduce labour costs to competitive levels.

"A proud man is always looking down on things and people; and, of course, as long as you're looking down, you can't see something that's above you," wrote CS Lewis. The view above American during the past few years is a dramatic shift in US airline industry dynamics driven by tough, but necessary, decisions by its legacy peers to merge, slash supply to meet demand and zero in on cost control like never before to weather the fuel spikes and economic volatility that awaited them after they emerged from bankruptcy protection.

A year after those carriers gladly bade adieu to the lost decade, American has dropped from first to third in terms of revenue market share among US majors, and it was the only legacy carrier to record a loss in 2010.

That performance clearly shows American has more to fix than labour cost disadvantages as it embarks on the restructuring process. The airline needs to leave pride at the door and take a realistic look above and below if it is to ensure that the American name survives the next decade.

(The above article appeared as the main leader article in Flight International, 6 December)