Southwest Airlines’ is reducing the residual values of all 156 of its Boeing 737-300 and 737-500 Classic aircraft from about 10% of their original cost to 2%, citing changes in the retirement dates and “future market conditions.” Southwest says the new valuation was driven in part by its decision to sublease 88 Boeing 717 aircraft to Delta. Because Southwest is not using the 717s, it will need to hold on to some of its 737 Classics longer than anticipated, which will lower their value by the time Southwest retires them.
Arguing that civil aviation promotes economic growth, the Civil Aviation Administration of China (CAAC) is defending its policy of building airports before air traffic demand justifies them. As a developing country, China must maintain its policy of building civil aviation infrastructure in advance of requirements, CAAC Director-General Li Jiaxiang says in state media reports.
Republic Airways Holdings will focus on maintaining its 50-seat operations at breakeven and will only add to its higher capacity purchase operations if pre-tax margins are more than 5%, CEO Bryan Bedford told analysts Nov. 1 during the company’s third-quarter results conference call.
India’s second-largest, low-fare carrier, SpiceJet, is in talks with Airbus and Boeing to purchase aircraft to expand its domestic and international networks. “The plan is at a nascent stage. Discussions are on with both the companies,” an airline spokesperson tells Aviation Week. “We will look at both the options and take a final decision depending on whichever suits us best,” the spokesperson adds. The no-frills carrier plans to deploy 15% of its capacity on international routes over the next three years, up from 6% currently.
Click here to view the pdf Fuel Watch: Global Jet Fuel Prices (midpoint) As of October 31, 2012, compared with previous week and previous year cts/gal prev. week prev.
“I’m not Richard Branson,” says Tony Fernandes, co-founder and CEO of the AirAsia Group, when asked about the similarities between him and Branson. “I have zero interest to go to the Moon. My sense of adventure is more down to Earth.” Fernandes, who worked for Virgin Records in the U.K. and counts Branson as a personal friend, says the Virgin Group boss is a serial entrepreneur. Branson establishes a business, then finds people to manage it for him, so he can move onto the next venture, says Fernandes, noting, “I like to manage the business.”
The FAA is starting to define concepts and requirements for a phased-array radar that could replace all the mechanically scanned terminal aircraft and weather surveillance radars now in use, some of which have been in operation for four decades. The two-year concepts and requirements definitions phase for the next-generation surveillance and weather radar capability (NSWRC) program will begin in December and include demonstration of an active electronically scanned array (AESA) capable of both functions.
Japanese company Mitsui has become the first strategic partner to join General Electric’s (GE’s) GE9Xengine development effort for Boeing’s proposed 777X. Though technically not launched as a firm program, the GE9X study has been under way for more than 18 months, and additional partners are expected to be signed up in the near future as the effort crystallizes.
Airlines in the next decade will face what might be an unprecedented requirement to equip their aircraft with communications, navigation, surveillance and safety kits in order to gain access to the FAA’s NextGen system’s most efficient routing and operations.
State-owned airframer Indonesian Aerospace (IAe) is hoping to obtain funding to build the composite Dornier Seastar seaplane. “The problem is there has only ever been a prototype built of the Seastar and no production. But to start production we need to have a new factory. We are trying to find the investment money for the composite parts factory,” says a company source with knowledge of the program. According to the source, IAe is hoping the Indonesian or German government will provide some of the funding.
American Airlines’ pilots union wants to include a 13.5% equity stake in any new labor contract, despite rejecting such an offer in management’s “last, best” proposal. The condition could translate into a six-figure payout to pilots that choose a buyout. American had valued the equity stake at about $1 billion in August.
Maintaining its current fleet and dealing with operational issues while sticking to growth plans are prompting Spirit Airlines to lease three used Airbus A319 aircraft and five new Airbus A320NEOs. Spirit and International Lease Finance Corp. (ILFC) have signed a letter of intent for the leases, the South Florida-based low-cost carrier disclosed Oct. 31. Spirit already has an order with Airbus for 101 A320 family aircraft—56 of the existing model A320s and 45 A320NEOs—for delivery in 2012 through 2021.
To ensure a smooth production transition from the current A320 to the New Engine Option (NEO), Airbus plans to make parts for the re-engined version at the rate of 44 per month from the start, rather than instituting a gradual build-up. “We have no room for delays and recovery during the cut over from the old aircraft to the new, which is very fast,” says Klaus Rowe, Airbus A320NEO family senior VP.
Lufthansa is evaluating an even deeper restructuring and more capacity cuts, and next year will stop training new pilots as the airline struggles to adapt to a slump in passenger demand. Europe’s largest airline group is not revealing details on how deep the cuts will be and what additional cost-saving targets it plans to reach. But CEO Christoph Franz, during the company's Oct. 31 third-quarter results conference call, said, “We have to think about additional measures. It’s not enough to say we have a great program that works.”
Sukhoi Civil Aircraft Co. (SCAC) plans to deliver first Superjet to Indonesian carrier Sky Aviation by year-end, while Laotian carrier Lao Central Airlines will receive its “first aircraft by the end of this year or early 2013 at the latest,” says a SCAC spokeswoman. The deliveries will mark the first commercial operation of the aircraft in the region.
WestJet plans to headquarter its regional feeder operation WestJet Encore at the mainline carrier's Calgary base when it launches the subsidiary in the second half of 2013. The Canadian low-fare operator says it will work with the Calgary Airport Authority to study where to establish a 40,000-sq.-ft maintenance facility and office space for the new Bombardier Q400 operation. A route network is expected to be announced early next year.
The big names in commercial aircraft manufacturing no longer have Southern California addresses, but the area abounds with suppliers. Twice as many aerospace engineers, mechanics, technicians and assemblers work in California as in any other state, and the bulk of them is clustered between Los Angeles and San Diego. Airbus has made headlines with its plans to begin delivering A320s in 2016 from a factory it will build in Mobile, Ala.
St. Croix-based Seaborne Airlines is adding Saab 340Bs to its fleet and intends to put the type into revenue service by the end of the first quarter 2013. The first of the four 340Bs destined for Seabourne is being painted in Seaborne’s new livery and should start flying by January, a spokeswoman says. Current fleet plans call for the aircraft to operate between San Juan, Puerto Rico, and Tortola, British Virgin Islands. Eventually, the Saabs will fly between San Juan and St. Croix and St. Thomas, U.S. Virgin Islands, the spokeswoman adds.
Grupo Aeromexico has sold an additional 20% of its share of frequent flyer program Premier Loyalty & Marketing (PLM) to Aimia, a Canadian customer loyalty management company. Once the deal receives regulatory approval, expected by year-end, Aimia will own 49% of PLM and Aeromexico 51% of the loyalty company, the companies said Oct. 30.
Estonian Air has fired CEO Tero Taskila with immediate effect and instructed his successor to fundamentally overhaul the airline's strategy. The new CEO, Jan Palmer, was once the top executive at now-bankrupt Cimber Sterling, Skyways and Malmo Aviation. Palmer takes control of an airline that has posted massive losses for the first nine months of the year, a development that also forced Estonian's board of directors to step down.
Virgin Australia expects that buying a majority stake in Tiger Airways Australia and acquiring regional carrier Skywest will give it the critical mass to compete with rival Qantas in new domestic market sectors.
