Boeing Talks with Chinese Airlines to Revitalize Sales Boeing 787 Dreamliner

Boeing Co. is engaged in “very advanced discussions” with Chinese airlines to revitalize sales there of its 787 Dreamliner, according to a senior sales executive, as the U.S. plane maker competes with rival Airbus for a greater share of the growing market.

Chicago-based Boeing currently has orders for 60 Boeing 787 Dreamliner jets from China Southern Airlines Co. and other Chinese customers. Those orders came in 2005, and Boeing hasn’t received any additional orders since.

In an interview on the sidelines of Aviation Expo, an air exhibition that kicked off in Beijing on Wednesday, Boeing’s top sales executive for China said that may change.

“On the 787, we are in constant discussions with airlines in China. Demand is very high,” said Ihssane Mounir, the sales executive. “We do have some very advanced discussions that could lead to more orders soon.”

Boeing’s future in part hinges on the high-profile 787 jetliner, which the company says will be more fuel-efficient and cheaper to maintain than other long-haul jets. But the plane’s rollout has been beset by delays. Boeing is scheduled to deliver the first 787 Dreamliner to Japan’s All Nippon Airways Co. later this month. That would put it more than three years behind schedule.

Boeing officials say the company needs to win more orders in China, one of the fastest-growing commercial aircraft markets, where competition from Airbus is becoming stiffer. Airbus’s China president, Laurence Barron, said in a separate interview Wednesday that it expects to account for a 50% share of China’s commercial-jet market by 2013. Also speaking on the sidelines of Aviation Expo, Mr. Barron said he expects Airbus’s market share in China to be 47% by the end of this year. Airbus is a unit of European Aeronautic Defence & Space Co.

Randy Tinseth, vice president of marketing for Boeing’s commercial-aircraft division, said earlier this month that the company aims at least to maintain its slightly higher than 50% share of China’s market of commercial airliners in service. But he acknowledged that Boeing’s share of new orders from China in recent years has been declining, in part because of competition from Airbus.

Earlier this month, Boeing raised its 20-year forecast for China’s spending on commercial aircraft by 25%, citing planned international expansion by airlines in what the company expects will become the world’s second-biggest aircraft market after the U.S. In that forecast, Boeing said it expects Chinese carriers and others to spend $600 billion for 5,000 new commercial airplanes from Boeing, Airbus and other manufacturers. Boeing last year estimated that China would spend $480 billion on 4,330 planes over the next 20 years.

American Airlines Considering Flights to Australian Aviation Market

Frequent travellers to the USA will be interested to hear what American Airlines CEO Gerard Arpey has to say about his airline’s thoughts on the Australian market, including possible plans to fly to Australia, and updating the AA fleet.

Arpey, speaking to Executive Road Warrior, let slip several important pieces of information for Australian business travellers.

It’s fairly clear to industry observers that Boeing has given American some cheap deals on 777s to make up for the delays to the 787 Dreamliner program.

American dropped some serious hints that American has aspirations for the very lucrative trans-Pacific route in the interview, saying: “we did just apply for the Joint Business Agreement with Qantas and they started flying into and out of DFW, which is great for both of us. We may want to put our ducks in Australia with the Qantas guys, but [the 777-300ER] certainly could do that route.”

When talking about delivery dates for the 777-300ER, American spokesman Tim Smith was very clear about the timeline: “All 8 are set for 2012 and 2013.”

And there could be more to come: “We still have seven 777-200 deliveries for 2013 through 2016 that are on the books. Now, whether those might be changed to 300s, I don’t know,” Smith hedged.

American could even be planning a Qantas-busting new first class product on flights to Australia. When asked about whether the existing American Flagship Suite first class seat will be put on the 777-300ER, American said: “We haven’t decided for sure how we’re going to configure that [aircraft].”

Since Qantas has eschewed the 777-300ER and is using its 747-400ER planes — which have diverted twice to refuel just this week — instead, is American losing patience with Qantas’ trans-Pacific problems?
New aircraft: what does it mean for Australian connections?

Australians will be affected by the aircraft purchase as older planes are replaced with newer ones. The first set to go is clearly the old McDonnell-Douglas MD-80 fleet, which are ancient in aircraft terms.

But American’s Tim Smith also mentions retiring the Boeing 767-200 domestic fleet. Those are the planes that American flies between New York JFK and Los Angeles or San Francisco with better seats and service as part of its “Flagship” transcontinental service.

American clearly hasn’t made its mind up on the planes that will replace the 767-200s.

“We’re not saying that we’re going to fly a bunch of 737s or Airbus A321s on the transcons. We’re just saying it opens some new possibilities for those aircraft,” Smith says, cagily, especially when probed on whether American’s much-delayed Boeing 787 fleet will be deployed on those flights.
Qantas: not on American’s radar?

An interesting aside from the interview is that American doesn’t seem to see the Red Roo as a key part of “the best network for premium traffic”, despite applying for a trans-Pacific joint venture with Qantas.

Arpey cited British Airways, Iberia, Japan Airlines and Cathay Pacific as parts of that network, yet pointedly failed to list Qantas.

That’s an interesting omission, considering that Qantas is not only a founding member of oneworld but has been closely involved with American, especially in the high-profile shift of QF’s Sydney flights from San Francisco to American’s mega-hub in Dallas with the goal of feeding Qantas passengers into AA’s domestic US network.

The airlines’ membership of the oneworld alliance doesn’t necessarily signify a meeting of minds between the two airlines either. Hong Kong-based Cathay Pacific and Qantas have famously not seen eye to eye in recent memory, with Qantas’ decision to skip Cathay’s Hong Kong base (the natural oneworld stopover location for Kangaroo Route flights to Europe) in favour of the existing Qantas-British Airways joint venture via Singapore.

Arpey could have some advice to offer Qantas CEO Alan Joyce with regards to Jetstar and its increasing role in the Qantas family — to the point where it seems that Jetstar could morph into “Qantas Lite”.

From the perspective of the US airline industry, low-cost carriers affiliated with legacy airlines just don’t work.

Delta Air Lines attempted a low-cost move with Song, moving 48 of its Boeing 757 planes into a subsidiary with a low-cost model to try to compete with new airlines like JetBlue. Song only lasted three years, from 2003 to 2006.

Similarly, United Airlines tried a low-cost subsidiary called Ted between 2004 and 2009. It failed, and its nearly 60 Airbus planes were folded back into the United fleet.

An earlier version of this story quoted AA CEO Gerard Arpey regarding American’s flights to Australia.

Emirates Airlines, Etihad Airways and Oman Air Propel Global Flight Capacity to Record

Propelled by Emirates, Etihad Airways and Oman Air, global flight capacity is poised to soar to “unprecedented” levels in April, according to new figures released by a key data and analysis provider for the aviation industry.

The three carriers operating from the Middle East — the fastest growing market in terms of capacity — are due to deliver an 11 per cent increase in capacity for the region in April, said the UK-based Official Airlines Guide, or OAG, in its monthly snapshot of airline activity.

Other carriers driving the region’s capacity growth are Qatar Airways and low-cost carriers Air Arabia and flyDubai.

The capacity growth forecast for the Middle East far exceeds the five per cent global flight capacity growth expected in April.

The unprecedented capacity surge comes at a time when world’s airlines continue to adjust their schedules and capacity daily to meet fluctuating demand in the wake of Japan’s devastating earthquakes and tsunami.

The report showed that airlines around the world will provide 317.4 million seats to passengers during the month of April in 2011. “This figure is five per cent higher than at the same time in 2010, or 13.9 million more seats, and represents the highest capacity ever provided by the industry,” the OAG said in its April Frequency and Capacity Trend Statistics report.

Frequencies have also been rising, up three per cent, or 80,653 more flights scheduled to operate worldwide in April 2011 compared to April 2010.

The Asia-Pacific region will be served with an extra 6.2 million seats by airlines during the month of April this year. Europe will see a three per cent increase in the number of seats offered by budget carriers in April, compared with the same month last year.

“The fastest-growing market by volume of seats is to and from the Middle East, with an 11 per cent increase in capacity year on year. However, political events in the region will likely have an effect on sustaining this level of scheduled capacity,” the report observed.

Giovanni Bisignani, director general of the International Air Transport Association (IATA), said air passenger traffic was picking up in the Middle East after the region was torn by instability but warned airlines would have to wait until after the summer for a recovery in Japan.

IATA, which represents the majority of world airlines, said the industry was also reeling from a $30 billion rise in its fuel bill this year due to the Arab unrest. IATA had previously said the March 11 Japanese earthquake and subsequent nuclear crisis would cause a major slowdown from which airlines would not recover before the second half.

“We will have to see the numbers for April because March is not a big indicator, but there will be a big effect,” Bisignani said.

The Association of British Travel Agents, or ABTA, said Dubai and Florida holidays are among the popular travel destinations along with Spain, the most popular destination for Britons, with the ever-popular Costa del Sol and the Canary Islands attracting large throngs of holidaymakers.

ABTA said travellers in the UK are taking advantage of the extra bank holiday provided for the royal wedding, with workers only needing to take three days off to enjoy an 11-day holiday. Two million holidaymakers in the UK will be heading for holidays abroad over the Easter period.

OAG said in terms of absolute growth, the intra-Asia Pacific region is the clear leader with more than 6.2 million additional seats and 40,203 more published flights this month against April 2010.

Over the last five years, figures within the Asia Pacific region have shown average capacity growth of seven per cent compared to the global average of four per cent.

Analysis of the European market reveals marginal growth of 0.3 per cent in frequencies and two per cent in capacity for services within the region.

Boeing Co Again Postponed Deliveries of Boeing 787 Aircraft

Boeing Co. again postponed the delivery of its first Boeing Commercial Airplanes 787 to the middle of the 2011 first quarter, compounding a string of delays for the jetliner that is already more than two years past its original scheduled debut.

The latest delay is the result of engine delivery problems, Boeing said in a statement early Friday. The Chicago company said in July it expected to deliver the plane late this year, but it warned that might not happen. It had said at that time that a series of problems, including supplier work related to parts of the tail and instrument issues that might push the first delivery “a few weeks into 2011.”

The 787’s first customer, Japan’s All Nippon Airways, said in a statement the delay is regrettable especially “given the success of the flight test program so far.”

“However, we trust that the time will be used to deliver the best possible aircraft in the shortest possible time frame.”

The 787, which Boeing calls the Dreamliner, is made of many composite materials designed to make it lighter and more fuel-efficient than comparable planes already in the sky.

It lists for $150 million to $205.5 million, depending on the model, but major customers routinely get discounts.

Boeing said the delay won’t affect its financial expectations. Boeing spokeswoman Yvonne Leach said the company is working closely with British engine manufacturer Rolls-Royce to expedite engine deliveries, but current flight tests are continuing as planned.

Rolls-Royce said the delay was not related to the reported failure of an engine in a recent test.

“We have been informed by Boeing that the currently planned dates for Trent 1000 engine deliveries will not support their latest flight test program requirements,” Rolls-Royce said in a statement Friday.

However, Rolls-Royce confirmed “that the engine availability issue is unrelated to the test bed event which occurred earlier this month.”

The FlightGlobal website, an aviation news site, reported this week that a Trent 1000 engine suffered an “uncontained” failure – meaning debris broke out of the engine casing – during a test on Aug. 2.

American Airlines Lobbied Congress to Delay Legislation Tarmac Regulation

American Airlines spent $1.58 million to lobby Congress and executive branch agencies in the fourth quarter on legislation to limit tarmac delays and other issues.

American weighed in on bills in the House and Senate that would require airlines to give passengers a chance to get off a plane if it’s stuck on the tarmac for at least three hours.

American Airlines spokeswoman Mary Frances Fagan said Monday the company would have preferred a 4-hour limit.

The Transportation Department beat Congress to the punch by announcing in December a new rule to take effect in late April that includes a 3-hour limit. The airline industry has argued that the rule will cause carriers to cancel more flights rather than risk fines of up to $27,500 per passenger.
Read more

Japan Joins Asia And South Pacific Initiative To Reduce Emissions Program

Japan aviation industry yesterday joined US FAA, Airservices Australia and Airways New Zealand as a partner in the ASPIRE (Asia and South Pacific Initiative to Reduce Emissions) program.

ASPIRE flights use a host of optimized operational procedures and ATC routings, including tailored arrivals, to save time and fuel. “This is an important milestone in our collective effort to lessen aviation’s environmental footprint,” said FAA Administrator Randy Babbitt, who signed the agreement along with Japanese Civil Aviation Bureau DG Ryuhei Maeda.
Read more

Continental Airlines Flight Use Alternatif Fuel

Continental Airlines Inc. ratcheted up the race to develop alternate fuel for passenger planes Wednesday as it successfully flew a Boeing 737 twin-engine jet powered partly by algae and weed.
Read more