Wednesday, 31 October 2007

Level Heads Prevail At Austrian After Q400 Hiccup (And Goodrich Weighs In On SAS Withdrawal)

File this in the Bombardier "just can't catch a break" folder. Today an Austrian Airlines Q400 was forced to turn back on the runway at Vienna International due to a faulty propeller part. But kudos to Austrian, which quickly put the incident in perspective by calling the turn back "purely a security precaution", and to CEO Alfred Otsch, who says the carrier's trust in its Q400 fleet is unbroken "particularly as we have carried out around 116,000 takeoffs and landings with the fleet, without any problems".

Bombardier has faced an avalanche of bad press lately (particularly in Sweden), after SAS Group decided to ditch its entire Q400 fleet following three landing-gear incidents, the latest in Copenhagen. Q400 landing-gear manufacturer Goodrich today announced its disappointment in SAS's decision given that the latest incident is still under investigation by the Danish aviation authority.

"Goodrich is supporting Bombardier and the Danish aviation authority in the investigation of Saturday's incident and has sent a team to Copenhagen to assist with the investigation. Goodrich concurs with Bombardier's assessment of the situation which did not identify a systemic landing gear issue," says Goodrich.

Tuesday, 30 October 2007

Knee Jerking...Did SAS Make Mistake With Bombardier Q400 Withdrawal?

SAS Group's decision to withdraw its entire Q400 fleet, following three landing-gear incidents in less than two months, is the fodder for many discussions this week.

Industry players are considering the possible fall-out on Bombardier's reputation, Q400 residual values, and passenger perception. One conversation that deserves notes can be found at the ever-popular IAG blog. Could the SAS grounding be a big mistake? Is it related to the company's internal procedures, or maintenance practices? Time will tell.

Meanwhile, a glut of Q400s on the market would in fact be welcome news to airlines seeking large turboprop lift. As prominent consultant Doug Abbey points out, if the aircraft come available, they will "find homes and they’ll find homes rather quickly".

Monday, 29 October 2007

Eight is Great: Embraer Reveals Timeline for Next Generation Aircraft

Embraer could introduce its next generation aircraft in under eight years. The Brazilian manufacturer has revealed it is looking at a "mid-next-decade" timeframe. Hey folks, that's right about the time that Boeing is expected to introduce a new-technology replacement for its 737.

Far be it for me to speculate, but could Embraer be gearing up to challenge Boeing - and Airbus for that matter - in the mainline sector? CEO Frederico Curado in July told Bloomberg that the company is mulling it over. A decision now, he said, would be "premature" because "there'd be no sense bringing to the market a product that will be similar to existing products". New engine technology must first be developed, he said.

Nonetheless, the use of composites seems almost assured. Embraer VP market intelligence-airline market Luiz Sergio Chiessi says composites will probably be considered for the next generation airliner's wing and fuselage. He sees no point in rejigging the current E-Jet line with these materials.

Bombardier, meanwhile, is looking to bridge the gap between regional and mainline with its proposed CSeries. As currently defined, the CSeries will be made up of 46% composites, but retains an aluminium lithium fuselage. A launch decision is expected by calendar 2008 with a targeted entry into service in 2013.

Chiessi says he is "almost sure" Bombardier will opt for Pratt & Whitney's geared turbofan (GTF) to power the 110- to 130-seat aircraft.

Thursday, 25 October 2007

Curb Your Enthusiasm: Canada's Submission in EU-US Subsidy Row is Standard Practice

Some journalists got excited this week over the news that Canada has jumped into the EU-US row taking place at the WTO concerning large aircraft subsidies. In a third party submission, Canada says Europe’s argument fails on a number of levels. The home of aircraft maker Bombardier certainly has reason to care about the case since it could set precedent in other commercial discussions, like the previous one fought between Canada and Brazil, where rival manufacturer Embraer is based.

What hasn't been mentioned yet is that the submission is standard practice. Oh yes, and Brazil has made one too, as has China, Korea, Australia and Japan (let’s try to sniff these out…such submissions are confidential unless made public by the submitting country)!

The EU says it feels Canada’s submission “is fully appropriate” since WTO Members frequently intervene as third parties to express views. After all, the EC does this in almost every case.

It hasn't yet responded to Canada’s arguments, saying the appropriate time to do that would be at the so-called third-party session, a meeting in Geneva with the panel, the parties, and third parties, currently scheduled for January 15.

Both the EU and the USA have filed separate subsidy complaints with the WTO. The core of the EU’s challenge is the alleged research and development support provided by the US government to Boeing. The EU claims the US airframer will have benefited from more than $23 billion worth of subsidies between 1987 and 2024.

The USA, meanwhile, alleges the benefit of EU member state financing to Airbus alone amounts to as much as $205 billion.

Tuesday, 23 October 2007

Out of the Tub…JetBlue Overflies Hub

Just as my mother used to push the boundaries of our tub’s capacity by squeezing at least three of her five children in a bath at one time, so too have airlines stretched New York JFK to its scheduling limits. To unmuddy the waters, the US government has vowed to intervene at JFK and is expected to release details of a scheme after meeting with airlines today and tomorrow in Washington DC. Inhabitants at JFK already know what to expect; the FAA last week released a set of proposed schedule reduction targets for peak hours at the facility.

US major airlines, represented by lobbying group the Air Transport Association, hit back today, saying it’s clear the government intends to cut or cap flights rather than to allow the carriers to agree on schedule changes. A calm voice amidst the clatter, however, was a somewhat unlikely subject. JetBlue, which alongside Delta is largely responsible for JFK’s evolution from a international gateway to a domestic hub, said it welcomes the government’s assistance. And one more thing, it’s going to focus on over-flying JFK – meaning, the carrier is going to increasingly avoid it’s own hub by adding point-to-point service down the East Coast such as between Syracuse, New York and Orlando, Florida.

JetBlue CEO Dave Barger says that of the 12 new routes being introduced between November and January, only two – to Puerto Plata, Dominican Republic and St Maarten – will “touch JFK”. Plans are in place to terminate service at Columbus, Ohio (home of no-frills start-up Skybus Airlines) and Nashville, Tennessee, two markets “tied to” JFK. Tied to? Barger's verbiage begs the question: With all the problems at JFK, is JetBlue rethinking its choice of tub? Check out my article at

Monday, 22 October 2007

40 Years Old But No Virgin

Northwest Airlines has begun touting its international fleet as "the youngest" of any North American airline, after taking delivery of its 32nd Airbus A330 aircraft. The self-promotion certainly makes sense. Travelers like flying in brand spanking new aircraft because they're seen as safer, more comfortable and friendlier to the environment. Is there anything less reassuring than stepping onto an old, paint-peeled aircraft that looks like it is being held together with masking tape?

Why then does Northwest continue to push back a decision on replacing the over 100, aged McDonnell Douglas DC-9 aircraft in its domestic fleet? Some of these jets are 40 years old, boasting build dates from 1967 - the same year that Lyndon B Johnson was President; Elvis and Priscilla were married; the Beatles released Sgt. Pepper's Lonely Hearts Club Band; and Pamela Anderson was born. Unlike Anderson, however, Northwest's DC-9s haven't received much plastic surgery of late. Some of them look downright decrepit.

Northwest says it expects to make a decision about DC-9 replacement next year. The company claims it is holding off to see if a manufacturer makes a new 100-seater that has the same carbon composites as the 787, of which Northwest is the North American launch customer with an order for 18.

The airline remains one of the leading candidates to launch Bombardier’s proposed 110-to 130-seat CSeries (it is also evaluating the Embraer E-Jet, and the Sukhoi Superjet 100). But Bombardier isn't expected to make a CSeries launch decision until calendar 2008 with a targeted entry into service in 2013. If Northwest opts to replace it's DC-9s with CSeries aircraft, will travellers be flying on near 45-year old DC-9s by the time CSeries deliveries take place?

That’s a question only Northwest can answer. For now, however, the carrier’s decision to advertise the newness of its international fleet only serves to highlight the fact that it’s domestic DC-9s are anything but.

Friday, 19 October 2007

SkyBusted at Bellingham

Bellingham, Washington, population 75,000, is one of those diligent US cities that fight endlessly to enhance air service to their airport, but get repeatedly burned in the process.

Take the recent announcement from no-frills start-up Skybus Airlines that A319 flights to Columbus, Ohio will be axed on January 6 - just seven months after launch. Bellingham is not the only one taking a hit; San Diego will see its Skybus service end on July 16. Of the two airports, however, there is little doubt that Bellingham will feel the most impact.

The airport had anticipated revenues would increase by $351,000 if Skybus flew once daily and about 36,000 passengers annually. Might seem like small potatos, but to Bellingham - which can call itself an international airport because tiny, Cessna operator San Juan Airlines flies to British Columbia - it was clutch. Why? Because SkyBus was advertising Bellingham as Seattle to consumers even though the two cities are a solid 90 miles apart. Had the experiment succeeded, Bellingham could have sold itself to airlines as a true reliever airport to Seattle.

There must have been some early evidence that the plan was flawed. Ah yes, here it is. In a statement released in advance of SkyBus' May launch at Bellingham, the president of Bellingham Whatcom County Tourism Bureau said the following: "Since Skybus announced service, we have received more than 60 phone calls and e-mails from people in the Columbus area wanting visitor packets."

Thursday, 18 October 2007

Steeling Pittsburgh

For a city that has for years laid out the red carpet to US Airways, Pittsburgh got a punch in the face two weeks ago. The blow didn't come from US Airways' continued retreat from the western Pennsylvania airport - that's been predicted for some time. It came when US Airways began shouting to everyone who would listen that Pittsburgh isn't a viable hub - for any airline!

After announcing plans to slash 40 more daily flights from the airport, close a crew base, and eliminate hundreds of jobs, the carrier went on record to say that the market simply can't support an operation that's much larger than what its own schedule will look like early next year. Accurate or no, the move was akin to rubbing salt into a very sore wound, and could make it even more difficult for Pittsburgh to convince other major airlines to grow operations there.

Sure, low-cost carriers AirTran, JetBlue and Southwest have been gradually ramping up service at Pittsburgh. Southwest CEO Gary Kelly said today the carrier will probably add a couple of flights from Pittsburgh next year. But such gains, at most, are slight.

The fact is that the home of the Pittsburgh Steelers - and lets not forget Iron City beer - has been without any direct transatlantic service since US Airways eliminated flights to London Gatwick and Frankfurt in November 2004. In light of US Airways' continued draw down of domestic service, and its latest remarks about the airport's future potential, it doesn't seem likely that Pittsburgh will regain hub status anytime soon.

That's not to say that Pittsburgh won't make a valiant effort. The city that loves Black and Gold doesn't like to see red.