2016 saw its share of triumph, tragedy and challenge; we look back over 12 busy months in aerospace.


For commercial jet makers, 2016 posed a unique challenge. Commercial airline traffic has continued an unabated 12-year upswing, rising by nearly 6% worldwide over the first nine months of 2016. The industry’s familiar cyclical downturn still seems beyond anyone’s near-term planning horizon. So with the normal channels of adversity held at bay, the challenge for airframers and suppliers has been to manage the fruits of success.

In broad terms, the results from January to early December (when this article went to press) were mixed. But if any company exceeded expectations from 1 January, it was Bombardier. As 2015 faded, Bombardier was nearly eight months from entry into service of the delayed and over-budget CSeries and was still searching for the first new customer in more than a year. Then came major, albeit loss-making, orders from Air Canada and Delta Air Lines for the CS100 and CS300, packing a five-year production ramp-up with firm delivery slots. That was followed by one of the smoothest entry-into-service events with the CS100 at Swiss in July. The only blemish on the CSeries all year was a shortage of Pratt & Whitney PW1500G engines, which caused Bombardier to slash expected deliveries by half. The entry into service of the CS300 will begin in early 2017, followed by a steady ramp-up to full-rate production in 2020.

Another pleasant surprise in 2016 involved the fate of the 747-8. It seemed all chances to extend the venerable widebody’s production were exhausted – until late October, when UPS came through with a surprise firm order for 14 747-8Fs and options for another 14. At a continuing annual delivery rate of six aircraft per year, Boeing will be building 747-8Fs well beyond late 2017, when the programme will celebrate 50 years of continuous assembly in Everett, Washington.

A321 Jetblue


Amidst the bright spots were also disappointments, which seemed to fall especially hard on Airbus. The manufacturer racked up several notable highlights, including delivering the first US-built A320 from Alabama, flying the first A350-1000 in France and establishing a strong sales lead over Boeing into early December. But the company’s troubles fell especially on the manufacturing side, where a series of shortages blamed on suppliers held up promised delivery ramp-ups for the A350-900 and A320neo alike. The fate of the A380 programme also took an uncertain turn when Airbus acknowledged a planned production rate cut.

The year began on a hopeful note with the delayed introduction of the first A320neo powered by Pratt & Whitney PW1100G engines. But just when engine start-up problem that caused the delay seemed fixed, a critical shortage of key engine parts delayed the ramp-up of the A320neo, which uses a larger version of the geared turbofan engine also used on the CSeries. The delays led to a public and heated backlash from certain customers, especially former launch customer Qatar Airways. P&W officials have noted that the engine’s fuel consumption and reliability have met or exceeded expectations, but acknowledge that the parts shortages will not be fully resolved until the end of 2017.

In Seattle, Boeing’s ramp-ups of the existing 737 and 787 products continued smoothly. With the first 737 Max 8 due for delivery in the second quarter of 2017, the first 787-10 in 2018 and the first 777-9 in 2020, Boeing’s real production ramp-up challenge with new products still lies ahead. In the meantime, the company has struggled to meet sales targets on a variety of fronts. Boeing entered 2016 still hoping to maintain 777 production at a monthly rate of 8.3 until the transition to the 777-9 in four years. But an industry-wide slump in widebody sales forced Boeing in late January to lower planned output to seven a month during the transition to the 777X. By October, Boeing acknowledged the effective rate could decline to as low as 3.5 a month as undelivered 777-9 flight test aircraft occupy slots in the production system.

By contrast, narrowbody sales seem less urgent, with an order backlog of more than 3,100 737 Max aircraft. But Boeing still has reason to be disappointed: Airbus has 60% of the market. The company has responded with a major revamp of the original three-aircraft family. Only the 737 Max 8 is spared any consideration of revision. The 737 Max 7 will be stretched to seat more passengers and fly longer routes. As this article went to press, Boeing was continuing to evaluate options for either a simple stretch of the 737 Max 9 or something more elaborate, requiring a larger engine and a redesigned wing.

The commercial aircraft market is at the beginning of a five-year transition. The industry’s stalwart competitors, such as the 737, A320 and 777, are now like runners in a relay races, handing off batons to even faster teammates, even as new rivals from Canada, Russia and China get closer to joining the competition.


After a 2015 marred by a fatal crash, Airbus’s A400M tactical transport programme lurched through 2016, with a gearbox problem severely restricting operations and key customer Germany signalling its dismay with delays and underperformance – by indicating it might buy half a dozen Lockheed Martin C-130Js.

Berlin has 53 A400Ms on order to replace an ageing fleet of C160 Transalls, but performance shortfalls – notably the lack of in-flight helicopter refuelling capability – appear to have pushed it towards an acquisition of the US-built type, which it could contribute to a joint air unit being set up with France, which earlier this year confirmed a deal for four C-130Js

If Germany does move to buy American, it will mark another low point for the European transporter programme. An interim fix for cracking in a gearbox component looks to be extending inspection intervals from just 100h to 650h, and it must also be noted that the A400M’s Europrop International TP400 turboprop engines – which caused much delay during development – are performing beyond expectations. However, in its half-year accounts Airbus took a fresh charge of just over €1 billion ($1.1 billion) against the programme, warning: “The potential impacts on the [future] financial statements could be significant.” Chief executive Tom Enders added that while the development of tactical capabilities would continue over the next two to three years, responsibility was “very much in the court of the engine-makers, to outfit this aircraft with a very robust, long-living engine and propeller gearbox.”



Power, indeed, has long been an A400M Achilles heel. The May 2015 crash – which killed four Airbus crew members and injured two others shortly after take-off on a test flight from Seville of an aircraft for delivery to Turkey – was attributed to an engine control computer failure which left three of four engines in idle mode.

Meanwhile, things are not going well on the customer side, either. Spain took delivery of its first A400M in November – the 34th delivery from a total 174 on order, making it the sixth nation to receive the type, after France, Germany, Malaysia, Turkey and the UK. But while cash-strapped Spain has 27 on order, it can only guarantee to take 14, and at a reduced pace up until 2022. It will then look at funding options to cover deliveries post-2025 for the remaining 13 – or try to flog them to an air force that can actually pay for them.

If nothing else, Airbus can do without giving its customers any more excuses to defer deliveries or even cancel orders.


For the long-overdue, way-over-budget and highly controversial Lockheed Martin F-35 Joint Strike Fighter – the US defence department’s largest-ever programme – 2016 seemed more like a pilgrimage than a forward sprint to active service: two steps forward, one step back.

In July, the F-35B made its triumphant debut at the Farnborough Air Show, two years after a Pratt & Whitney F135 engine fire grounded the fleet and cancelled the jet’s first attempt at a UK premiere. In August, the US Air Force declared 15 F-35As ready for limited combat. Initial operational capability for the F-35A marked an even greater milestone than the US Marine Corps’ IOC the previous summer. The Marine Corps and Navy have a combined order of 640 B- and C-variants, but the USAF alone intends to buy 1,763 F-35As, and most international partners are on board with the A variant.

But the following month, a supply chain issue threw cold water on the IOC announcement. An issue with the insulation from an avionics cooling line grounded 15 operational F-35As, as well as 42 production aircraft. The USAF returned the 15 jets to flying status this month, but repairs continue on the production aircraft.

Lockheed remains on track though, with its commitment to deliver the first two F-35s to Israel on 12 December. In November, the company reported that repairs were under way and the jets were flying at the Ft Worth, Texas plant. Japan’s delivery, which was not affected by the insulation issue, is also on track and Lockheed rolled out the first 42 F-35As ordered by the Japan Air Self Defence Force in late September.

The relationship with some F-35 partners remains unsteady. In Canada, the F-35’s planned procurement was thrown into question following the election of Liberal Party candidate Justin Trudeau as prime minister. While the Harper administration was committed to the jet, the current government is reassessing its Boeing CF-18 recapitalisation programme and could announce an interim buy of Boeing Super Hornets.

Turkey confirmed its second order of F-35s in late October, even as President Recep Tayyip Erdogan purged his military of more than 200 pilots and members of the military with ties to the US.

Meanwhile, an unsettled milieu has hung over Washington and the US defence industry, which is not sure what to make of the new president elect. Defence stocks shot up on 9 November and Donald Trump has touted the need for a larger army. However, that may not signal a long-term mark of confidence; Trump has also expressed scepticism over the F-35 and a need to shrink the size of the federal government.


The business aviation market has been floundering, and the large-cabin sector was the major casualty in 2016. The halcyon days of booming orderbooks and long sales pipelines are now a mere memory for this high-end aircraft segment, which is reeling from a collapse in demand from emerging economies.

The General Aviation Manufacturers Association’s recent industry shipment report perfectly illustrates the fragile state of the large-cabin sector. The trade body records 155 new aircraft deliveries in the first nine months of 2016 – a 15% fall year-on-year – and GAMA predicts the delivery tally will continue on this downward trajectory for some time to come.

Faced with a bleak sales outlook and a low order backlog for its G450, Gulfstream announced in October that it would halt production of the 14-year old model, the third and final iteration of the segment-defining GIV-series. The final example will roll off the production line in 2018.

Cautious Bombardier began executing this year a planned reduction in its Global 5000 and 6000 production output and elected not to release a firm schedule or marketing decisions about the developmental Global 8000. The ultra-long-range aircraft – an outlier in the industry offering 7,900nm (14,615km) range – was launched in 2010 with a planned entry into service date of 2019.

While the fragile market may have pummelled orderbooks and weakened sales prospects for the handful of large-cabin aircraft developers, it certainly hasn’t curtailed their innovation and enthusiasm. Development has continued unabated this year on a plethora of new high-end products, as airframers – believing in the power of new technology to revive customer interest – strive to bring new programmes to market over the next five years.

The hugely anticipated Global 7000 – a 7,300nm-range, larger-cabin version of the Global 8000 – made its first flight on 4 November, and Bombardier is confident it can bring the GE Aviation Passport-powered model to market in the second half of 2018.

Gulfstream moved forward service entry of its G500 and G600 to 2017 and 2018, respectively, from their original timetables of early 2018 and 2019. Although the readjustment probably amounts to only a matter of weeks, it signals the Savannah-based company’s confidence in its two clean-sheet designs.

The five aircraft in the G500 flight test programme have flown about 1,800h to date, with the first production-conforming aircraft taking to the skies in August. Meanwhile, Gulfstream is readying the G600 for its first flight in December.

Fellow top-end business jet developer Dassault had cause to celebrate in June when its flagship Falcon 8X secured European approval after two-year development effort. The first model was handed over in October to Greek charter operator and long-time Falcon customer Amjet Executive.

Development of the much-delayed 5X is back on track after Safran resolved unspecified issues with its Silvercrest engines. The company has not specified the precise nature of the problems, but says the performance of the 9,500-12,000lb-thrust (42-53kN) turbofan degraded due to issues with the airflow through the engine. Upgrades are being progressively added to test engines being flown on its flying test-bed – a modified Gulfstream GII – operated from San Antonio in Texas. Silvercrest certification is on track for the first half of 2018, and while Dassault has not specified a timeframe for first flight of the 5X it is hoping the wide-cabin business jet will be ready to enter service in 2020.

The Silvercrest engine was also selected by Textron Aviation this year to power its sole large-cabin offering, the Cessna Citation Hemisphere. A mock-up of the flagship Citation, launched in 2015, was unveiled at the NBAA convention in November, and Textron plans to fly the clean-sheet twin in 2019. No date has been released for certification and first delivery, but generally could be expected one to two years after first flight.


As is so often the case, 2016 has been a year of mixed fortunes in the rocket launching business.

On the plus side, Orbital ATK’s Antares vehicle successfully returned to flight in October, two years after a spectacular failure seconds after launch from Wallops Island, Virginia. Wallops was again the launch site, for a resupply mission to the International Space Station.

Also good news was United Launch Alliance, the Boeing-Lockheed Martin joint venture, and the US Air Force signing a deal to begin the certification process for ULA’s new Vulcan Centaur launch vehicle. Vulcan is important, being a modular system that will eventually replace ULA’s Atlas V and Delta IV, both of which are hugely reliable workhorses for US national security launches and NASA.

The modular concept – also being pursued by Airbus Safran Launchers for Europe’s Ariane 6 – is aimed at cutting launch costs, and cutting the time needed to prepare a launcher for a particular mission, essentially by working from standard building blocks that can serve several configurations. Where cost is concerned, SpaceX has benefited from being a clean-sheet operation competing against established rivals such as Atlas V, Delta IV and Ariane 5 which are, at various levels, working with manufacturing and operating technologies that are decades old – reliable they might be, but you wouldn’t do it like that today.

According to ULA, Vulcan is on track to fly from 2019. Ariane 6 looks set to go from 2020.

It was also a good year for Ariane 5 and 6. The modular 6 project got two shots in the arm – one being the formal legal creation of the Airbus Safran Launchers joint venture that is programme prime contractor, and under which the Ariane programme – from design to sourcing, production and launch – is being consolidated. The combination of new technology, a modular design and a rationalised industrial structure will have Ariane 6 flying for €70 million ($80 million) per outing – half the cost of an Ariane 5 lift.

Ariane 5 showed its strength as a reliable heavyweight, too. In November, a new variant specially designed for the purpose orbited four of Europe’s Galileo navigation satellites in one go. The flight, the 75th successive success for Ariane 5, marked a big step in plans to get the Galileo constellation up to full strength, taking to 18 the number of units in orbit – enough to start providing some services.

For SpaceX, triumph and tragedy – or, at least bad news – were both to hand. Successful recovery – twice – of a Falcon 9 first stage on a drone ship was impressive by any measure. Unfortunately, plans to demonstrate the re-use of such a stage, along with flights of any virgin Falcon 9s, were put on hold by a September launch pad fire at Cape Canaveral that destroyed the Falcon 9 rocket and its satellite payload. Investigation continues into an episode that may have been linked to a fuelling problem rather than rocket manufacture.

But while Falcon 9 suffered its second spectacular failure – the first being a 2015 mid-flight destruction – SpaceX expects to make a maiden flight of its Falcon 9 Heavy version in the first quarter of 2017.

And the heaviest lifter of all time – NASA’s Space Launch System – is being readied for static firing tests in 2017, in anticipation of a maiden, uncrewed flight in 2018.


Should you get an invite to the office Christmas party at Finmeccanica this year, by all means book a flight and be there for what will, surely, be a night to remember. Seriously, in the annals of year-end celebrations, few companies have had more cause to raise a glass – or three – than Italy’s national aerospace champion. Three, that is, for three milestone achievements.

One was March’s announcement of a 2015 profit – the first black bottom line since 2010 – along with reduction of a once-alarming group net debt, on track to fall below €3 billion ($3.36 billion) this year. Financial losses were only part of the story during that long dark period; Finmeccanica also suffered allegations of misconduct, especially in India over a helicopter deal, and doses of the political machinations that often come with state control.

Second was the essential completion of a turnaround restructuring strategy, put in motion following a disastrous 2011 that saw a net loss of more than €2.3 billion on heavy losses in power, road and rail businesses plus a €750 million write-down against defects in fuselage sections and horizontal stabilisers supplied to the Boeing 787. That turnaround strategy called for the group to be consolidated around helicopters, aircraft, space and defence and security electronics. Also, and critically, the plan sought to tighten up lines of management control while pushing responsibility for financial performance down to division and business level – to make the company more entrepreneurial and less bureaucratic.

But chief executive Mauro Moretti, who was put in place in mid-2014 by the then new Italian prime minister Matteo Renzi, deserves much credit for a third stream of reform – one which arguably stands to unleash a new vitality in an energetic and technically creative group. Formally, from 1 January 2016, Finmeccanica has been what Moretti calls “one company”. By that, he means what was once a financial holding company is now a “great integrated industry” focused on four sectors. And 2016 would see this particular “turning point” of restructuring completed.

As Moretti put it earlier this year, up until now “our customers don’t know the range of our ability, just one small piece. But we can offer incredible solutions.”

To best appreciate the Finmeccanica revolution, recall that the group – its name is a contraction of “Finanziaria Meccanica” – was formed in 1948 by a war-torn Italy to oversee the reconstruction of its engineering industries. Though the state still owns 30%, the transformation from a bloated hold-all for government assets to a sharp, focussed business has been profound.

Pulling that all together was – naturally, for a modern business – a rebranding. Out went Finmeccanica, in came Leonardo. As Moretti put it, the new name is easy to remember and brings to mind Italian technology while giving the group’s people “a symbol of our legacy”.


For the rotorcraft industry the story of 2016 was of crashes: of the market, of operators and of individual programmes.

In sales terms, the past 12 months have been awful. Each of the big four Western manufacturers has seen bookings slide on the back of low oil prices and a depressed commercial and parapublic market. If there has been a glimmer of hope it is that militaries have not entirely reined in their spending – Kuwait, Singapore and the UK all splashed the cash – although Poland deserves a special mention for a spectacularly bungled procurement process that mixed politics and industry to disastrous effect.

In the commercial market, however, the big news was the continued troubles experienced by the Airbus Helicopters Super Puma family. A crash in late April of an H225 on Norway’s west coast killed all 13 passengers and crew on board. Subsequent investigations linked the incident, in which the main rotor assembly detached from the rest of the helicopter at 2,000ft, to a gearbox fault.

Regulatory action was swift; on 2 June the European Aviation Safety Agency banned commercial flights with the type and the related AS332 L2, only removing the restriction in early October once “safety barriers” were put in place by Airbus Helicopters.

However, separate flight bans issued by civil regulators in Norway and the UK remain in place, not least due to the fact that no root cause for the gearbox failure has been identified. Besides this, operators, flightcrew and passengers in the North Sea are all thought to be extremely reluctant to push for a swift return to service, citing the lack of a root cause and a deep loss of trust in the manufacturer.



Bell Helicopter, too, has suffered this year: a fatal accident involving the first 525 Relentless flight-test vehicle, in which both experimental test pilots died, has resulted in the programme ending up in limbo. Although Bell has grounded the remaining two prototypes, it has continued to perform as many ground-based certification trials as possible. In addition, the next two flight-test prototypes look set to arrive in early 2017.

However, until the US National Transportation Safety Board issues its final report into the accident the flight tests will remain suspended. Information issued by investigators so far indicates rotor droop so severe as to allow the blades to strike the helicopter’s nose and tail boom.

There was better news for other development programmes, however: Airbus Helicopters continued its rapid progress with the H160 medium-class rotorcraft. A second prototype is now flying and the manufacturer appears on course to achieve certification by late 2018 or early 2019.

AgustaWestland has also returned its AW609 civil tiltrotor to flight, after a self-imposed grounding following another fatal crash in late 2015. The Anglo-Italian manufacturer is confident that it can now successfully bring the AW609 to market with little or no delay.

And Bell appears – at the time of writing – to be days away from achieving certification and service entry for its 505 Jet Ranger X light single. Production of customer aircraft has now begun at the helicopter’s final assembly facility in Mirabel, Canada – a site selected only in May after the reversal of a previous decision to base production at a new site in Lafayette, Louisiana.


After a nine-month delay for repairs in Hawaii, the Solar Impulse round-the-world flight attempt resumed in April with a two-day, 14h flight to NASA’s Moffett Field, near San Francisco. This ninth leg of a bid to circle the world on solar power alone followed a five-day/five-night flight from Japan in July 2015, which set solar-powered endurance records but destroyed the single-pilot aircraft’s batteries.

The Switzerland-based project – led by its creators and co-pilots André Borschberg and Bertrand Piccard – carried on from San Francisco with a multi-leg hop to New York before crossing the Atlantic and returning, on 26 July, to Abu Dhabi, where the flight began in March 2015.

So it took a little longer than planned, but when you’re talking about the impossible – or, at least, improbable – what’s nine months one way or the other? And at least the champagne was really well chilled by the time they got back to Abu Dhabi to complete a 17-leg, 43,000km (26,000 mile) round-the-world flight on solar power alone.

The facts and figures astonish. The single-seat Solar Impulse 2 has a wingspan of 72m (236ft) – compared with a Boeing 747-8I at 68.5m – but weighs a mere 2,300kg (5,071lb) including the lithium batteries and solar cells that provide 100% of the power needed to fly it. It flies at speeds of 27-54kt (50-100 km/h) and manages a 24h flight cycle by ascending to 28,000ft during daylight and gradually descending overnight as its batteries run down.

All of that is a triumph of engineering and materials, not to mention flight control (command centre in Monte Carlo) and logistics (travelling ground crew, portable hangar) – and, of course, of the other key component part of the aircraft, the pilots. Borschberg and Piccard tested the limits of human endurance by employing cutting edge techniques of training, diet, yoga and micro-napping; working alone in the unpressurised single-seat cockpit, they could rest for no more than 20min at a stretch, and then only at lower altitudes, when an oxygen mask was not needed. That cockpit is just 3.8m3 and subject to external temperatures ranging from -40°C to +40°C.

Whether the adventure has any practical impact on aviation remains to be seen, but as Borschberg and Piccard have always stressed, Solar Impulse is not really about aviation – it is about energy efficiency in a world that desperately needs to be much, much more energy efficient. This magnificent aircraft was, at root, a dramatic way of demonstrating that great things can be achieved with existing technology.


Throughout 2016, the USA made advances in incorporating small unmanned air vehicles into commercial airspace, Europe continued to bolster its unmanned military fleets and testing continued of vehicles designed for a number of innovative applications.

Air forces continue to be the largest operators of UAVs – or at least the most ubiquitous – and a handful of systems dominate the market. This is led by the General Atomics Aeronautical Systems MQ-1/9 Predator family, which continues to be adopted by European militaries.

However, it has been a mixed year for the type on the continent. In February, Spain became the fourth European customer for the Predator family of UAVs when it ordered four Block 5 MQ-9s. This was followed in April by the selection of the new Certifiable Predator B by the UK to fulfil its Protector requirement, and the Netherlands has continued to search for funding options for its planned acquisition of four aircraft that was approved by the US government in 2015.

However, a curve ball thrown to General Atomics was a January decision by Germany to select the Israel Aerospace Industries Heron TP instead of the MQ-9 Reaper for an interim surveillance UAV requirement, which will be provided on a services basis until the European medium-altitude, long-endurance (MALE) UAV development becomes operational. This acquisition has been put on hold, however, until a protest from General Atomics to the German high court is settled.

The European MALE development has also made advances, as a two-year definition study phase kicked off in September that is expected to lead to the first flight of a prototype in 2023.

Furthermore, France and the UK announced in March that they were to launch a new project under their Future Combat Air System (FCAS) effort that will see UAV prototypes developed under a £1.54 billion ($2.19 billion) agreement.

The then UK Prime Minister David Cameron and French President Francois Hollande committed funding to build on the programme’s two-year £120 million ($170 million) feasibility study phase that kicked off in November 2014, and is expected to lead to the start of full-scale prototype development in 2017.

On the commercial side, the US Federal Aviation Administration passed a ruling in June allowing small UAVs weighing less than 24.9kg (55lb) access to national airspace. Once implemented in August, the approval of Federal Aviation Regulation Part 107 opened up airspace under 400ft – that is, 100ft below airspace reserved for manned aviation – to routine unmanned operations without the need for an FAA exemption as was previously required. This had been a long time coming for the USA, which had lagged behind other nations in allowing access to the airspace for small UAVs.

Non-traditional aviation players have caught on to the rise in applications for UAVs, which will be facilitated by the implementation of rulings like Part 107. Novel UAV applications include parcel delivery and the provision of bandwidth to areas of the world that do not have robust infrastructure to support connectivity.

Facebook is ambitious in the latter domain, and June saw the maiden flight of its Aquila solar-powered UAV. While hailed as a success at the time, it has since been discovered that it suffered a “structural failure” just before landing, and both Facebook and the NTSB are examining the implications of the event.

Nevertheless, Aquila is seen as a move in the right direction, and Facebook founder Mark Zuckerburg does not seem too fazed by the setback. In a similar vein, three examples of another long-endurance solar-powered UAV – the Airbus Defence & Space Zephyr – have this year been ordered by the British government to test how the surveillance aircraft could support military operations.

The other trending new application for UAVs is in parcel delivery, and while there seems to have been a slight lull in development since the excitement around this in 2014-15, developments are still being made. In August, Amazon announced that it was going to carry out testing of its Prime Air prototype UAV in the UK, under the supervision of the Civil Aviation Authority. Amazon aims to assess the safety and reliability measures essential for the use of UAVs in the delivery sector, and will help inform regulators on the operational rules required.


Personal spaceflight got a bit closer this year, with Virgin Galactic showing signs of recovery from the October 2014 crash that destroyed its suborbital spacecraft and killed one of its pilots. A second iteration of SpaceShipTwo was rolled out in February, at VG’s Mohave, California base, and in September it got off the ground, in a captive carry test that took it to its 50,000ft air launch altitude.

Glide tests, and then powered flights, will follow. The six-passenger, two-pilot ship is to be rocket-powered from air launch to 106km – more than 300,000ft – where its occupants will enjoy several minutes of weightlessness, and a spectacular view of the Earth, before gliding back to the runway.

But while VG and its founder Richard Branson insist that these spaceflights are on the cards for the several hundred prospective passengers who have paid deposits on the $250,000 fare, it remains to be seen when this era of personal spaceflight will get under way. The programme has suffered two fatal accidents, the 2014 crash and a 2007 rocket fuel test disaster that killed three people on the ground, and VG has shown no signs of rushing to space.

Virgin Galactic

Virgin Galactic

Indeed, the programme dates to 2004, when a smaller predecessor of the air launched craft won the Ansari X-Prize for putting a privately funded vehicle into space – and brought designer Burt Rutan of Scaled Composites into partnership with Branson to launch Galactic. At one point, commercial flights were expected in 2010, but the programme has gone on to delay, and disaster.

What should not be lost sight of, though, is the other half of the Virgin Galactic scheme: air-launching small satellites, a business for which there appears to be vast demand – if the price is right. To that end, VG has teams in Long Beach and Mojave developing their proprietary Newton engine for a LauncherOne rocket to heft up to 400kg to low-Earth orbits.

VG is already contracted to 39 flights – and 100 options – for UK-based OneWeb, which plans to orbit 900 Airbus Defence & Space-built microsatellites of less than 150kg (331lb) each, to provide affordable broadband internet to rural areas around the world from 2019.

Whatever headway is made towards suborbital passenger flights, VG this year took a big step towards realising the satellites scheme by acquiring an ex-Virgin Atlantic 747 to serve as carrier aircraft for LauncherOne. Fitted with under-wing rocket-carrying gear, the aircraft was named, appropriately for a Virgin ship, “Cosmic Girl”.


While 2016 will be remembered as a year of seismic shifts of the political landscape, the impact of these on the airline sector is still to fully filter through.

As 2016 began, airlines were wondering whether an economic downturn was round the corner, what impacts a rise in interest rates and a possible UK referendum vote to leave the EU might have, as well as about the potential effects of a Donald Trump presidency.

While some of that has come to pass, and despite the UK Government mantra of "Brexit means Brexit", what all this means for the airline sector is still not much clearer than it was a year ago.

The resulting uncertainty has undoubtedly contributed to market volatility, hitting yields and airline profitability. But structurally little has changed over the last 12 months and airlines largely find themselves where they were a year ago.

So while the gloss may have been taken off recent profit highs, strong results banked in the first half should still ensure 2016 will be one of the most, if not the most, profitable years in airline history.

At the heart of the improved airline fortunes are lower fuel costs. Those costs had come to be such a burden for airlines – accounting for around 30% of expenditure in 2014 – that any fall in the oil price was bound to give profits a lift. That oil prices should fall so far and, while rising since early year lows, remain at their lowest levels for a generation, has helped fuel bumper profits.

This has given airlines breathing space to deal with hits on the revenue side. That is just as well, given that in 2016 revenues have only been going in one direction. Reduction of yields this year was inevitable as airlines passed on some of the fuel savings through lower fares. And, yet more yield reduction was always likely to be the end result of increased airline capacity in certain markets.

Virgin America - Sunset


But a string of external factors has played a part, too.

Stock exchange wobbles in China had kick-started the year by sending global financial markets tumbling, serving as a reminder of the impact this key market has on the wider world economy. While China shored up, more market shocks followed as the year continued. The first big "what if" became a reality with the UK "Brexit" referendum vote in the summer, followed even more spectacularly by Trump's election victory.

Terror attacks, which most years play a part in stifling demand, hit close to home for the European aviation market in 2016, with the devastating bomb blasts at Brussels and Istanbul Ataturk airport. Coming between attacks in Paris and Nice, and the continued challenges in North Africa, demand in several markets has continued to suffer.

While the events have had an impact already, this has largely been a symptom of the uncertainty rather than the cause itself. Be it the duration of the economic cycle peak, the impact of Brexit on European economies or how the Trump presidency plays out, the waiting game continues. Airlines remain in something of a holding pattern.

Probably the biggest deal in a relatively quiet year for airline mergers and acquisitions saw further consolidation in the US, as Alaska Airlines outbid JetBlue to buy Virgin America.

The deal, yet to close, brings together the sixth-biggest US passenger carrier by revenue in 2015 with the 11th biggest operator. Alaska Air generated group revenues of $5.6 billion in 2015, while the now profitable Virgin America Airline had revenues of just over $1.5 billion. Combined, the merged carrier would sit just outside the 25 biggest airlines in the world by revenue.

Source: Flight International