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UPDATED: Tigerair negotiations continue amid claim it broke charter agreement.

TIGERAIR Australia chief executive Rob Sharp says the airline is doing everything it can to resume normal operations to Bali as an Indonesian aviation official accused the low-cost carrier of breaking its operating agreement.

Thousands of holidaymakers found themselves stranded in Bali after the budget carrier, a subsidiary of Virgin Australia, suddenly had its authority to fly to the island suspended. 

The airline was later granted a four-day reprieve to fly customers home and by Sunday had brought back more than 3000 passengers. 

The Australians have blamed the suspension on a change in the way Indonesia was treating a 12-month agreement, struck in March last year, allowing Tigerair to lease planes and crew from its parent Virgin Australia (wet- lease) and operate to Bali from Perth, Adelaide and Melbourne.

 A caveat was that it was not able to sell tickets in Bali to the  Australian destinations — something the airline has adamantly denied doing.

The budget carrier said Monday it was working on options to resume services “as soon as possible this week’’ but that parent Virgin Australia would operate two flights to pick up passengers on Tuesday.

Tigerair flights from Bali to Australia from Wednesday remained under review, while those from Australia up to and including January 20 remained cancelled.

The airline said discussions with the Indonesian government centred on the way flights were classified, including new administrative requirements that would allow it to resume B737 flights to and from Bali.

Alternatively, it might use its existing Airbus A320 aircraft to operate the Bali flights but it noted this was subject to regulatory approval.

“Tigerair Australia continues to work constructively with the Indonesian Government, and I am confident we are making good progress on options to resume services as soon as possible this week,’’ Sharp said in a statement issued Sunday.

The airline boss said the airline had temporarily paused the sale of flights to Bali but hoped to bring them back online quickly.

Sources have told AirlineRatings that problem arose after the Indonesians moved the oversight of the agreement from the department that looks after normal regular passenger flights to the charter area.

But an Indonesian official told the ABC the decision was taken because Tigerair sold one-way tickets from Bali to Australia and breached its agreement.

A spokesman for Indonesia's Director General of Civil Aviation (DGCA), Agoes Soebagio,  said an investigation at Bali’s airport had found that Tigerair was selling online tickets on its website from Bali to Australia.

"If Tigerair insists it is innocent we'll let them prove it, and whether they deliberately broke the rules, that will be investigated," Soebagio told ABC News. "The DGCA will summon Tigerair to explain the inspector's findings in the field and we will cross-check those together."

The spokesman said there had been no changes to Indonesia’s regulations and the suspension was based purely on evidence of violations.

This had also determined the timing in the peak holiday season.

"Our inspector has found a violation, that is why we took action straight away,"  he said. "I don't think that was unfair."

Australian Transport Minister Darren Chester said Monday he had not been asked to intervene in what were sensitive negotiations between a commercial entity and the Indonesian Government and did not expect that to happen.

He said it was not a question of Indonesia targeting Tigerair and passengers had been caught up in the negotiations, which he understood to be the administrative questions about whether the airline had the right to fly to Bali beyond March. 

“But our embassy is certainly working with the passengers who were affected, and unfortunately for the passengers they have been like the meat in the sandwich,’’ he told ABC radio.
.

Crew in spotlight after 747 freighter slams into village.

Officials in Kyrgyzstan are already pointing the finger at the crew of a Turkish Boeing 747-400  freighter that slammed into a village while trying to land in wintry conditions on Monday, killing 37  people and destroying at least 15 houses.

But the company which operated the flight, MyCargo Airlines,  cautioned there was still no clear or confirmed information about the crash.

The freighter was on a run from Hong Kong to the  Kyrgyz capital of Bishkek.

A state-run news agency said preliminary information had prompted Kyrgyz Deputy Prime Minister Muhammetkaly Abulgaziev to conclude that "crew error" had led to the crash at the village of Dacha-Suu,  near Bishkek's Manas Airport.

The Aviation Herald said the plane, being operated by MyCargo for Turkish Airlines as flight TK-6491, was on final approach to Bishkek's runway when it attempted a go-around but failed to climb to safety.

Initial reports said all four crew and 28 people on the ground had died but CNN later quoted Kyrgyzstan's emergency situations ministry as saying there were 37 fatalities and at least 15 houses destroyed.

Images of the scene showed wreckage towering above ruined buildings.

ACT Airlines, which operates as MyCargo,  confirmed the deaths of its four crew members and said there was no clear and confirmed information about the cause of the accident. It also cited 33 civilian deaths.

“Captain Ä°brahim Gürcan Diranci and first officer Kazım Ondul  are ex-military pilots who have represented Turkish Air Force for many years abroad,’’ it said. “Our captain has a total of 10,821 flight hours of which 833 hours are on B744. Our first officer has a total of 5910 flight hours of which 1771 hours are on B744.’’

The company it said it had commissioned two pilots to investigate the tragedy and was sending technical staff to site to help in the investigation by Kyrgyz and Turkish authorities.

It said there had been no problems reported during the flight and the crew had rested for 69 hours in Hong Kong before the six-hour flight carrying 85,618kg of general cargo.

There were no faults in the technical log of the freighter, which was manufactured in 2003 and joined the company in late 2015, and maintenance had been carried out “in a timely manner and according to the aviation standards”.

“According to the first findings, it is understood that the reason of the related accident is not caused by technical reasons or loading related factors,’’ the company said. “The actual reason of the accident will be shared with the public after the inspection of aircraft and the place where the accident happened.’’

A321 arrival in Tehran an historic occasion.

January 12, 2017 was such a memorable day in Iranian aviation history that local  television broadcast it live.

The focus was on the arrival of an Airbus A321, registered EP-IFA,  at Tehran’s Mehrabad airport, marking the first delivery of a new aircraft to any Iranian airline since 1994.

Even the delivery 23 years ago of two Airbus A300-600s was the result of special permission as compensation for another of the type shot down by the USS Vincennes in 1988 over the Persian Gulf.

The last regular delivery of any factory-fresh Western aircraft to Persia was in 1980 when an A300B2 was ferried to Tehran as part of an order of six made in 1978 prior to the 1979 revolution.

“This aircraft, registered EP-IBS, is still flying safely, despite all the imposed sanctions and problems they made for us, all thanks to Iranian maintenance crews. We will fly it as long as we can”, pledged soft-spoken Iran Air chairman and chief executive Farhad Parvaresh, in an exclusive interview with AirlineRatings in Toulouse prior to the delivery flight.

 In the last few decades, as Iran became internationally more and more isolated due to suspicions about its nuclear program, the country had to improvise and rely on middlemen to keep its airlines aloft.

 All  Western aircraft contain American components and sales of new aircraft were out of the question. 

This all changed after in 2015 a nuclear deal was signed between Iran and the UN Security Council and the EU, starting a process to end the embargoes and sanctions. 

In January 2016, an agreement was signed between Iran and Airbus for an order of 118 aircraft from the European manufacturer, made up of 21 A320s, 24 A320neos, 27 A330s, 18 A330neos, 16 A350-1000s and twelve A380s. 

Airbus then had to obtain all the necessary licenses and permissions for the export of the aircraft, including US-built parts, to Iran. On December 22, a final contract comprising 100 new aircraft was signed but in a big blow to Airbus, the A380s had been dropped. 

 “The necessary infrastructure in Iran would not be ready in the near-term future to accept the A380, so we decided to drop it and stay with the other new aircraft first to get more familiar with them,’’ Parvaresh said. “As Iran Air we presently have no plans to buy any Boeing 747s or A380s.” 

In terms of widebody aircraft, the airline will receive both the A350-1000 and the Boeing 777-300ER in a separate, still-to-be -approved deal with Boeing.
This currently comprises 80 aircraft (50 737 MAX 8s, 15 777-300ERs and 15 777-9s). 

In addition, Iran Air is close to signing a final deal with Toulouse-based regional aircraft maker ATR for 20 aircraft, bringing the total of new airframes arriving in the next 11 years to 200. 

Iran Air denies it has any further interest in products from other manufacturers or even larger aircraft. 

“This is sufficient capacity, maybe in the future there is a need for bigger aircraft, we will see,’’ Parvaresh said.

The new arrivals are eagerly awaited, as the 23 active aircraft are over 23 years old on average and there is still about the same number of aircraft are in storage.

 “Some are under maintenance, and some are waiting for engine replacements for example, but we think it wouldn’t be economical to bring them back and spend money on them as we are receiving new aircraft,’’  the chief executive said. “Within the next five years we will gradually phase out some of the other types, like the Fokker 100s or the MD-82s, of which we operate four each, as well as older Airbuses.” 

With the exception of one freighter, all 747s have already been grounded for some time and the 747SPs being the last ones to retire in 2016. 

Iran Air’s fleet has shrunk considerably recently, with Pavaresh noting “six years ago we had 54 aircraft flying.” 

And it doesn’t look better for his competitors, including the market leader, privately owned Mahan Air. 

“There are 150 passenger aircraft flying now in Iran altogether, about hundred are stored, for all the 16 airlines we have,’’ he said. 

The six aircraft currently registered in Iran —  before the latest delivery — were all built after the year 2000 and are second-hand A340-600s operated by Mahan Air.

Iran Air used to have daily flights from Tehran to New York on Boeing 747SPs 40 years ago and Parvaresh sees great potential for a major hub operation once the infrastructure is ready:

 “Due to our location we can offer a flight time of up to two and a half hours less between Europe and Southeast Asia than via the current Gulf hubs, so it would be less fuel- and time-consuming and you could offer less expensive tickets. We all have to work on that to make it happen.”
 

World Expert; Not finding MH370 risks more lives

Governments planning to halt the search for missing Malaysia Airlines flight MH 370 next week are facing a growing tide of opposition from international experts worried the Ministers involved are avoiding their responsibilities and putting the flying public at risk.

Do Malaysia and China really want to find MH370?

David Gallo, a world-renowned oceanographic expert who co-led the teams that found Air France flight 447 and produced the first detailed maps of the wreck of the Titanic, yesterday warned the governments to look closely at the cost of not continuing the search.

“I have everyday people emailing, texting and tweeting asking can you please stand up and say we need to get this done,’’ he told The Weekend West from the US.

“I think people don’t realise what the impact is. One is to the families and the loved ones. But the second part is the flying public and not knowing what happened to this aircraft means that we’re all at risk of having the same thing happen to us or to our loved ones,” said Mr Gallo.

Over 10 million people get on board over 95,000 flights every day.

“When you look at that cost I think it becomes worth it to spend that kind of money and effort.’’

Australian Transport Minister Darren Chester, his Malaysian counterpart Liow Tiong Lai , and China’s Yang Chuantang decreed last year that the search will end after almost three years in the absence of credible new evidence leading to the identification of a specific location for the aircraft. 

This is expected to happen late next week when the last remaining ship, the Fugro Equator, halts operations to head back to Fremantle. where it is scheduled to demobilise and return to Singapore. 

The decision leaves unsolved the mystery of what happened to the Boeing 777 — which disappeared on March 8, 2014, while flying from Kuala Lumpur to Beijing with 239 passengers and crew on board — and any lessons from its mysterious disappearance unlearned. 

The Equator is currently using an autonomous underwater vehicle to run sonar scans in the new 25,000 sq, km area identified by international experts as the most likely site for the aircraft debris. 

The experts identified the site, to the north of the original 120,000sq km site where the plane was not found, after reviewing critical new ocean drift data made possible by the discovery of wreckage from the plane. 

They recommended the search continue and exhaust the remaining high probability crash site options.

The families of MH370 victims and Australian investigators also want to extend the search but the Ministers indicated the information is not precise enough to warrant the additional $50m in funding.

Mr Gallo, who is a former director of special operations at the US-based Wood Hole Oceanographic Institution and one of the first scientists to use robots and submarines to map the deep ocean floor, questioned how the governments could decide the information provided by the experts was not precise enough. 

He said the search area for AF447 had been a circle with an 80-mile (129km) diameter, even though the aircraft was transmitting data prior to plunging into the Atlantic Ocean in 2009 and wreckage was found on the surface. 

The search for the Air France Airbus A330 in deep water is the one most often compared to the MH370 operation because the black boxes were not found until a second expedition funded by French air safety investigator BEA, Airbus and Air France was mounted in 2011.

The US expert said the disruption of ending the search and demobilising the Fugro Equator would break up an experienced team and meant it would cost more to restart the search later, something he considered inevitable.

“You break the ribbon, you lose all the pieces and the cost goes way up in attempting to bring it all back together.’’ he said.

Debris hunter Blaine Gibson, who has found over 10 pieces of MH370 wreckage yesterday told AirlineRatings.com that the Malaysians just want to move on.

“I think the Malaysians right now just want to forget about it. 

“They just want to put it behind.” 
 

MH370: Do Malaysia and China really want to find MH370?

MH370

There is no question that Malaysia and China are failing to meet their international obligations to find MH370.

And there is no question that the investigation conducted by Malaysia into the disappearance of MH370 is among the most mismanaged in modern history.

The Malaysian end of the investigation has been a symbolic affair where a variety of government minsters, officials and the country’s military have contributed to a chaotic stream of misinformation about the fate of the plane.

If the Malaysian Government also wants to avoid accusations of a cover-up, it needs to continue the search for MH370 and to end almost three years of emotional agony for the victims’ families.

The suggestion something is dodgy in Kuala Lumpur will only gain credibility if the Malaysians fail to act on a recommendation by the team of international experts led by the Australian Transport Safety Bureau which is conducting the search.

New information led the experts to conclude that a relatively small area of 25,000sq km just outside the main search area likely contains the wreckage and should be searched. 

The exact cost of the search thus far is unclear but most analysts believe it is about $190 million split three ways with Malaysia paying $100 million; Australia $70 million and China just $20 million.

China’s contribution has been pitiful given MH370 was also a code-share with China Southern Airlines and carried the airline’s flight number CZ748. There were 153 Chinese aboard and China needs to contribute more.

When an airline code-shares (places its flight number and sells tickets at a profit on another airline’s plane) it must bear full responsibility for all aspects of the flight.

The hollow rhetoric of the Malaysian Transport Minister Liow Tong Lai saying “the aspirational goal” is to find MH370 simply isn’t good enough for families needing answers and closure.

Even Australian Transport Minister Darren Chester’s excuse that the new area of 25,000sq km was not specific enough to meet the criteria set down by officials from the three governments is lame.

Considering the vastness of the Indian Ocean an area of 25,000sq km is very specific and the analysis that has helped pinpoint the new area has broken new ground. 

Malaysia and China should bite the bullet, pony up the $40 to $50m needed to extend the search and do the right thing for the families of the 239 passengers and crew lost with MH370.

The fact that the main body of wreckage was not found in the original search area means we were looking in the wrong place but we were doing it for all the right reasons and using the facts available at the time. 

Now we have new facts, including a drift study by the CSIRO from all the debris recovered in the west Indian Ocean found, that says it is most likely in a different area.

The search must go on.

Drugs chief: Indonesian crash pilots on drugs

Most of Indonesia’s airline accidents have involved pilots who tested positive for drugs, including a Lion Air jet that slammed into the sea four years ago while trying to land on the tourist island of Bali, the chief of the national narcotics agency said.

According to a report in The West Australian , Budi Waseso made the comments at a ceremony on Bali to inaugurate traditional village security guards as anti-drug volunteers.

The comments are another blow to the image of the country’s airline industry after a video circulated online last month showing an apparently intoxicated pilot in the cockpit of a Citilink passenger plane.

News reports this week said two pilots of another airline, Susi Air, owned by the country’s fisheries minister had recently tested positive for drugs.

“Almost all air accidents in Indonesia, whether it was just a skid or whatever, the pilots are indicated to be positive for drugs,” Waseso told reporters.
Earlier in the day he told the event attended by Bali’s governor that a Lion Air pilot in the spectacular 2013 crash had “hallucinated” that the sea was part of the runway.

His comments are at odds with other official accounts. After the crash, which miraculously caused no fatalities among the 108 people on board, the transport ministry said the pilots had not tested positive for drugs. The final report blamed the accident, which occurred in rain, on poor communication between the pilots and inadequate trading.

Lion Air, the National Transport Safety Committee and the Ministry of Transport declined to comment.

 

Tigerair Bali flights grounded

The grounding of Tigerair’s operations to Bali has been extended for the next seven days as a war of words erupts between the airline and Indonesian aviation authorities.

However, the airline is able to bring passengers back to Australia from the holiday island for the next four days.

Tigerair chief executive Rob Sharp accused the Indonesians of not honouring a 12-month agreement struck in March last year.

That agreement allowed Tigerair to lease planes and crew from its parent Virgin Australia (wet- lease) and operate to Bali from Perth, Adelaide and Melbourne.

The only caveat was it was not able to sell tickets in Bali to those Australian destinations.

However, according to sources in Jakarta, the Indonesians have moved the oversight of the agreement from the department that looks after normal regular passenger flights to the charter area.

Thus the Indonesians have changed the rules by which the airline operates to Bali and thus it is technically in breach.

However, almost all airlines lease planes from leasing companies, banks and other airlines often with crew – particularly pilots.

Yesterday Mr Sharp said, “Tigerair Australia currently has approval from The Director General Air Communication and Director Air Transport to operate between Australia and Bali until 25 March 2017.”

“This involves selling tickets in Australia between Australia and Bali. Under the existing agreement, we are not able to sell tickets in Indonesia and we are fully compliant with this.”

Mr Sharp added, “we are not proposing any changes to the agreement – we are operating under the same approval we have been for the last 8 months.”

The airline said it is striving to work through the new requirements but may have to use a different arrangement with its own shorter ranged A320s but this will take two weeks to put in place.

Tigerair said it is doing everything it can to support its passengers, including transferring them to Virgin Australia flights, providing accommodation and refunds. 

“We understand this is a busy period during school holidays and we sincerely apologise for the inconvenience this has caused,” said Mr Sharp.

All other Tigerair flights (all domestic services) remain unaffected by this decision
 

Next: Long-haul travel on short-haul planes

Norwegian

Long-range versions of planes that have been flying for three to five decades will usher in a new era in air travel in the next two years.

After the debut of the super-efficient Boeing Dreamliner and Airbus A350 widebodies in the past decade — as well as the A380 super-jumbo —  the object of airlines this time is to bring super-cheap travel to intercontinental routes with narrowbody planes of less than 240 seats.

New versions of the 737, which will celebrate its 50th anniversary this year, and the A320 family, in service since 1989, can fly routes of eight and a half to nine and a half hours or 6500km to 7400km. New York to Rome is less than 6900km  for example.

That means a myriad of new routes between Europe and America.

In Asia, airlines will have the option of flying travel-hungry Chinese as far afield as Australia, where Chinese tourism is booming. South-east Asia will be within non-stop flying range of the Middle East and Africa aboard the new-age narrowbody planes that, until now, have been the mainstay of short-haul domestic air travel systems.

Using below-cost lead-in fares – the modus operandi of the low-cost carrier business – smaller regional cities of the northern hemisphere on either side of the Atlantic will be linked for the first time for less than  $US100 each way.

After two decades without deep discounting over the Atlantic, trail-blazing low-cost carrier (LCC) Norwegian Air Shuttle – Europe’s No.3 low-cost airline – is pledging lead-in fares of just $69 one-way between Europe and America using its new 737 MAX 8s, which it is expected Boeing will start delivering in the next three months.

That’s less than half of the typical transatlantic lead-in fares aboard Norwegian’s 291-seat Boeing Dreamliner 787s, which the airline says don’t have the ultra-low per-seat costs of the narrowbodies.

The North Atlantic hasn’t seen such deep discounting since Britain’s Laker Airways pioneered cheap long-haul travel in the 1970s and early 1980s.

The 737 MAX 8 will have fewer than 200 seats in the configuration Norwegian will use. The airline’s current 737-800s, on which the MAX 8 is based, have 186 seats at a minimum 29 inches (73cm) per seat row, nearly as tight as Europe’s Ryanair, which squeezes in 189.

Norwegian’s strategy is to target smaller regional cities that currently don’t have regular transatlantic services, such as Hartford, Connecticut, and Providence, Rhode Island, both with populations of more than a million.

On the other side of the Atlantic, regional centres like Cork and Shannon, Ireland, and Edinburgh, Scotland, currently have only seasonal services to the US with larger passenger jets that are hard to fill in winter — markets tailor-made for a new long-range 737.

While maintaining more expensive Dreamliner services to JFK airport on Long Island, Norwegian will also fly this year to New York City’s largely unused fourth commercial jet airport, Stewart International, at Newburgh, about 100km north of the city.

Nearby Newburgh train station, with bus links to and from Stewart International, is about two hours from downtown New York – which in peak hours is nearly as fast as getting from Kennedy airport on Long Island to the Manhattan city centre.

However, if a $US69 transatlantic fare was on offer from Stewart compared with Norwegian’s typical $US189 on its Dreamliner services from Kennedy airport, there would be an instant market among bargain-hunters on both sides of the Atlantic. 

“Our planes are very, very fuel efficient,” Norwegian chief executive Bjorn Kjos said in announcing the airline’s first transatlantic 737 services. 
“We have a totally different set-up to other airlines. The Boeing 737 MAX has a very modern engine, which means it can go for a longer distances. 

“We’ll also be flying to secondary airports in New York – not JFK. That means we don’t pay as much and can charge cheaper fares”.

Norwegian’s use of the 737-8 MAX  this year to open new transatlantic markets will be followed in 2019 by the introduction of the airline’s first Airbus A321LRs, which have even more range (7400 kilometres versus the 737 MAX’s 6500 kilometres) and carry more people, tipped to be 220-230, fewer than the upper legal limit of 240 in seat rows just 28 inches (71 centimetres) apart.

Ironically, airlines are adopting the A321LR as a replacement for the Boeing 757, the world’s biggest narrowbody airliner which went out of production in 2004, even though more than 1000 were built and sold.

In the past few years,  US airlines have been using the 757 to operate long, thin routes over the Atlantic between the America, Europe and even Africa.

But Boeing discontinued production when demand waned after the turn of the century as airlines traded up to widebodies or down to smaller narrowbodies.

However, it has now revived studies into the feasibility of a so-called Middle Of Market jet to occupy the space between the biggest single-aisle jets and the smallest widebodies.

The 737 can’t be stretched further because the 50-year-old design did not provide sufficient space under the wing for the big engines than power the A321, which is higher off the ground.

The Boeing 737-900 was meant to compete with the A321, but is slightly smaller and has won orders from only a handful of airlines.

“The A321neo LR will have longer range than the MAX, so that gives us opportunities in smaller cities where frequency is more important than having a large widebody jet,” says Norwegian’s chief of commercial, Thomas Ramdahl.  “It’s interesting to see if Boeing is coming up with a replacement for the 757 as well because they will need to if the LR does what Airbus is saying it will do.”

The A321neo (for “new engine option”) offers 10-15 per cent lower costs per seat than a wide-body jet, Ramdahl says.
 

Europeans put troubles behind them to hit the skies.

IATA issues summit
IATA boss Alexandre de Juniac

People in regions such as Europe and the Asia-Pacific forgot about their troubles and packed their old kit bags in November as demand for air travel reached its highest point in nine months.

Overall demand rose 7.6 per cent compared to the year before and airlines filled more seats and the load factor edged up almost a percentage point to 78.9 per cent, according to figures released Wednesday by the International Air Transport Association.

Global international passenger demand for the month rose 8 per cent, while worldwide domestic passenger demand — which tends to vary dramatically between countries — grew by 7.1 per cent.

Airlines also filled more seats in all regions.

Europeans  took to international travel with gusto as demand increased 8.3 per cent and the annualised traffic growth for the past five months hit 12 per cent. 

IATA said this suggested the disruption caused by terrorism and political instability had lifted “against a backdrop of a growing Eurozone economy’’. Planes travelling to and from Europe flew fuller with the region’s load factor climbing 1.1 percentage point to 80.8 per cent.

It was a  similar story in the Asia-pacific, where international passenger traffic also rose 8.3  per cent compared to the previous year and the load factor rose 0.8 percentage points to 77.4 per cent.

“The strong upward trend in demand has slowed recently but it is not clear whether this is a longer-term development or just a brief pause,’’ IATA said.

Middle East carriers trumped the field with a 12.2 per cent increase in demand, but load factors were a modest 68.7 per cent and IATA said the region’s seasonally adjusted traffic trend had paused.

The slowest growth was in North America, where traffic climbed just 1.5 per cent but the load factor still edged up slightly to 78.7 per cent. 

“Traffic across the pacific is growing rapidly but North Atlantic demand is moderating,’’ IATA said.

Latin America saw a 7.3 per cent rise in November traffic and the biggest climb in load factor for any region: 3.4 percentage points to 82.2 per cent. Africa was up 8.2 per cent with two thirds of seats full on average.

IATA director general Alexandre de Juniac said the stronger demand for air travel reflected a pick up in the global economic cycle and predicted this would play an increasing role as the stimulus of low oil prices receded.

“Travel has never been more accessible—with great fares, many options and more destinations,’’ he said. “Nevertheless, uncertainty lies ahead. The threat of terrorism, questions over the durability of the economic upswing, rising oil prices and increasing protectionist rhetoric are among the concerns. 

“The industry has reshaped itself and strengthened its resilience to shocks. We should see another solid year of collective profitability for the airlines in 2017.’’
 

Airbus expects to set new aircraft delivery record in 2017.

Airbus China
Photo: Steve Creedy

European giant Airbus doesn’t expect a predicted downturn in orders to stop it from delivering more than 700 aircraft next year after posting a record 688 deliveries in 2016.

Executives expect deliveries to rise despite a downturn in demand from airlines that is tipped to result in fewer orders than the 731 it received last year after cancellations.  

The European company beat rival Boeing in terms of net orders in 2016 — the US manufacturer reported 668 — but fell short of the 748 deliveries logged by its competitor.

The Airbus deliveries were up 8 per cent on 2015 and included 545 single- aisle A320 family aircraft, 68 of them A320neos and 40 per cent of them the bigger A321s. There were also 66 A330s, 49 A350 XWBs and 28 A380s. 

“We delivered on our objectives in a challenging environment, proving our ramp-up readiness for the future,’’ Airbus Commercial Aircraft president Fabrice Bregier said.

The A350 target was met despite a problem with cabin equipment suppliers early in the year and represented a 350 per cent ramp-up in deliveries on 2015. 

The A320neo also suffered engine issues but the manufacturer and the engine companies managed to mitigate the impact of the problems and catch up on deliveries. 

A big push in December saw Airbus deliver a whopping 111 aircraft for the month, about twice the normal level,  and Bregier joked this level of output would not continue in the New year.

“We will see for December ’17 but I hope we’ll not have to strike another record and that we’ll be a but smoother during the year,’’ he said. “But 2016, especially the first six months, was unusually difficult from the production perspective.’’

There were 218 cancellations but this included a long-standing order for 82 aircraft with the now defunct Indian airline Kingfisher as well as 72 conversions from conventional aircraft to more fuel-efficient neo models.

About 20 per cent of Airbus deliveries by value went to lessors with 16 per cent heading to North America, 19 per cent to Europe, 31 per cent to Asia and 14 per cent to the Middle East.

Airbus’s overall backlog of 6,874 aircraft is valued at more than $US 1,018 billion at list prices, which is higher than the prices airlines pay.  More than 5000 of these are neo models. 

 The backlog is a major reason Airbus needs to keep boosting production because it is essentially sold out in areas such as single-aisle aircraft until 2021.

The company’s head salesman, John Leahy, conceded that there was an “order cycle’’ which saw airline demand dip and rise but said this was no longer linked to deliveries. He pointed to fact that Airbus had increased production for 14 consecutive years.

Leahy affirmed earlier comments by Bregier that Airbus would increase production to at least 700 in 2017 and said it would release more precise numbers next month 

“Now does that mean that orders are going up next year?’’ he said. “Most likely not. If you go back and look at that cycle, I would say that orders are going down next year.’’

Airbus celebrated its 10,000th delivery last year,  started deliveries of both engine variants of the A320neo and certified the Pratt and Whitney-powered A321neo.

It expects to certify the CFM-powered A321 variant at the end of the first quarter.

“This is on track and the family will soon be complete with the 320, the 321 and 319 will come a bit later,’’ Bregier said.

The Airbus executive said the company was also well placed to move progressively to a production rate of 60 single-aisle aircraft a month from mid-2019. 

“We have a backlog, our issue to is to make sure that we can deliver, but we are about at rate 50 right now and so I believe that we can be extremely confident that we will do it.’’

Despite initial difficulties, the company delivered A350s to 11 customers and met its production target. It also delivered two, bigger A350-1000s to its flight test program. The aircraft still has a backlog of more than 800 net orders after the deliveries.

The A350-1000 performed its first flight test on November 24 and Bregier said the company had opened the flight envelope, with both aircraft now flying and the plane performing as expected.

He believed that the company had largely de-risked the program and the ramp up to the delivery of 10 aircraft per month by the end of 2018 would be “a linear progression”.

The type had also achieved a steady 98.6 per cent operational reliability in the last four months of the year “which is very good after less than two years in operation’’, he said.

‘it confirms that the maturity in service of this aircraft is good, that the design is robust and, of course, we expect to improve it again and to be at 99 per cent in about one year’s time,’’ he said.

The A330neo is now in final assembly and the company last year delivered its first regional version of the conventional aircraft. 

“We have started the assembly at the final assembly line of the A330 on time and we will have a first flight, as we expect, during the first half of 2017,’’ Bregier said.

Airbus reaffirmed its support for the struggling A380 superjumbo and reiterated its stance that it believed traffic growth would ultimately stimulate demand.

Despite what he termed “a slow commercial performance’’,   Bregier said the aircraft had a future with the company as congestion hit more airports in coming years.

Airbus is slowing production of the A380 to one aircraft per month and has renegotiated its delivery schedule with Emirates to move back by a year deliveries of 12 planes originally scheduled to arrive in  2017 and 2018. 
 

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