AirAsia orders more Airbus A320s, reveals long

Transcription

The Region’s Only Comprehensive Aerospace Industry Publication
Volume 3 No.11
February 2007
Business
aviation
review
– Page 16
China’s
aviation
paradox
– Page 22
Cessna’s
Pelton
interviewed
– Page 19
AirAsia orders more Airbus A320s, reveals long-haul plan
Malaysian low-cost carrier (LCC)
AirAsia gave Airbus a new-year boost
when it signed an agreement covering
up to 100 more A320 single-aisle
jetliners. The airline has since also
revealed plans to start a low-cost,
long-haul operation in July.
The A320 agreement includes
50 firm orders, which will bring the
carrier’s A320 fleet to 150, plus another
50 options. The agreement makes the
Kuala Lumpur-based LCC one of
Airbus’s biggest A320 customers.
As of January, the airline had
received more than 15 A320s and
expected to take delivery of 18 during
2007. AirAsia is phasing out its
Boeing 737s, with “a lot” scheduled
to leave the fleet this year and all by
2013, group Chief Executive Tony
Fernandes says.
Signing the order in London in
early January, Fernandes described the
agreement as “one of the best among
the highs and lows” of the airline’s first
five-years of operation.
“We’ve gone from 200,000
passengers in year one [2002] to
15 million in year five, with 50
aircraft,” he says. “[Next year] we will
carry 21 million.”
According to Fernandes, the
additional aircraft will permit AirAsia
to carry about 52 million passengers
in 2013 and 60 million in 2015. At
current projected growth rates, Air
Asia expects by then to be the region’s
largest airline, having become the
second-largest A320 operation three
years earlier. Fernandes praises the
manufacturer for the help it has
provided: “Airbus has gone more
than the extra mile to get us where
we are.”
Marking what Airbus chief
commercial officer John Leahy
characterises as “one of the most
phenomenal growth operations”,
Fernandes was in Toulouse, France,
a few days later to take delivery of
the 3,000th A320-family aircraft.
Deliveries of the latest batch of
aircraft will begin in 2008, alongside
A320s covered by earlier orders as
the manufacturer increases its singleaisle production rate to 36 a month.
Fernandes also revealed plans now
being put in place for a proposed longhaul LCC that would link AirAsia’s
regional network with distant markets
such as Europe, Australia and New
Zealand. He says that the planned
LCC operation between Kuala
Lumpur and London wouldn’t be an
AirAsia took delivery of Airbus’s 3,000th A320 on 18 January.
AirAsia service, but a new, separate
operation called AirAsia X, which is
scheduled to be launched in July with
three leased aircraft.
Operations will begin with flights
to Tianjin and Hangzhou in China,
with services to London’s Stansted
or Luton airport beginning later the
same month.
AirAsia X will be operated by Fly
Asia Express (FAX), previously a
regional-turboprop airline now owned
by Fernandes and his two AirAsia
partners. The LCC itself has a 20
percent stake in FAX and an option
on a further 10 percent.
Both Leahy and Fernandes
confirmed discussions over the
possible acquisition by AirAsia X
Crashed Adam Air 737’s flight recorders found
US teams searching for the wreckage
of the Boeing 737-400 operated by
Indonesia’s Adam Air, which crashed
on 1 January, announced almost four
weeks later that they have located the
aircraft’s cockpit voice and flight data
recorders.
While searching the projected crash
site, the US Navy oceanographic
survey vessel USNS Mary Spears
“detected pingers on the same
frequency of the black boxes
associated with the missing airplane”
using a towed pinger locator,
according to a statement issued
by the US Embassy in Jakarta on
25 January.
“In subsequent sweeping of
the ocean floor around the pinger
location, the Mary Sears detected
heavy debris scattered over a
wide area and is currently analysing
that debris to verify if it is
from the missing aircraft,” the
statement says.
Up to that point, the only trace
of the aircraft was a few pieces of
wreckage, including a part of the
horizontal stabiliser found on 11
January by a fisherman, 300m off
the coast near Parepare, between
Indonesia’s Sulawesi and Kalimantan
islands. Also recovered were two
flight attendants’ seats and two
cameras belonging to passengers,
according to First Air Marshal Eddy
Suyanto, commander of Makassar air
base, who is coordinating the search
and rescue operations.
Recovery of the recorders and
wreckage will be difficult because
of the depth of the water in the
Makassar Strait. The wreckage has
been estimated to be lying some
1,500m below sea level.
Adam Air flight KI 574, en
route from Surabaya to Manado,
disappeared from radar screens in
a violent storm one hour and 10
minutes after take-off.
The 17-year-old aircraft had 102
passengers and crew on board. No
bodies have been recovered.
(Continued on page 3)
www.asianaviation.com
of as many as 20 Airbus A330-300
widebodies, for which some 2009
delivery slots are available. The
airline is also talking to Boeing about
a similar number of 777-300ERs and
is expected to make a decision by the
end of January.
Fernandes says he will not be directly
involved, concentrating instead “on
driving AirAsia’s costs down”. He
admits that his original first LCC
thoughts had encompassed a longhaul airline, with the AirAsia X name
now licensed because of the potential
Fernandes sees for such services to be
provided as an independent “extralong range” operation involving
“similar shareholders”.
Ian Goold / London
CONTENTS
Viewpoint
General News
Airlines
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MRO
Manufacturers
Defence
Business
Cessna Interview
Airbus in China
CAPA Analysis
Training & Simulation
Business
Technology
Airports & ATM
General Aviation
Late News
3
4
6
9
11
12
13
16
18
20
22
26
27
28
29
30
31
Success flies on the
Bombardier Q400
All-Nippon Airways
QantasLink
Japan Air Lines Group
Jeju Air
The regional aircraft market in Asia/Pacific is taking off. And Bombardier’s Q400 turboprop is leading this
revolution in the air. As the world’s most advanced turboprop, the Q400 provides the lowest operating costs
of any regional aircraft plus superior passenger comfort and unparalleled jet-like speed. No wonder the
region’s most respected airlines have chosen the Q Series aircraft – in fact, there are over 200 Bombardier
aircraft already flying in Asia/Pacific. www.Q400.com
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Contributors
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Asia’s legacy
carriers must
adapt to LCCs
earmarked for expansion, barely a
year after it first opened.
Also in the news this month, we see
signs that a relatively new offshoot
of the LCC phenomenon – low-cost,
long-haul services – are giving every
indication of proving successful.
Qantas’s Jetstar unit says its
long-haul services, introduced last
September, have proved so popular
that the airline is speeding up its
expansion plans. Meanwhile in
Malaysia, the region’s highest-profile
LCC has announced plans for a longhaul offshoot called AirAsia X, set to
begin operations in mid-year.
Indeed, Asia’s LCCs have proved
so successful that the region’s
established, full-service airlines risk
irrelevance or extinction if they don’t
get to grips with the changes taking
place in the market.
Speaking in Singapore in January
at the opening of this year’s Low Cost
Airline Congress, Peter Harbison,
executive chairman of the Sydneybased Centre for Asia Pacific Aviation
(CAPA), said an “aviation revolution”
is taking place.
“Any new entrant must be low-cost
and any existing airline not heeding
this message will become and exairline,” Harbison says. “We haven’t
yet seen a major international airline
shut down in this region – although
Ansett Australia’s collapse was
contributed to by the entry of LCCs
domestically – but it will happen.”
The region has become home to a
variety of airline models, where one
used to dominate. Unique, hybrid
business models adapted to their
own environment have established
themselves, with Australia’s Virgin
Blue being an example. Then there
are those such as VIVA Macau, with a
particularly Asian flavour, and now the
low-cost, long-haul operations such as
Jetstar and Oasis Hong Kong.
According to Harbison, these
hybrids defy many of the traditional
rules. But they share one common
ingredient – a passion for costreduction.
In five years, CAPA predicts, the
number of Asian international airlines
will double. Harbison dismisses talk
of consolidation among carriers as
“nonsense”.
“Who is going to consolidate?” he
says. “Not Singapore Airlines and
Thai Airways? There will certainly
be some market exits, but large-scale
consolidation won’t happen – it’s
just too difficult and the market is
expanding too fast.”
Harbison predicts that 2007 will be
a significant year for liberalisation of
aviation access by governments,
although there is some inertia to be
overcome.
“It’s wake up time,” Harbison
says. “The only thing preventing
economic expansion for hundreds
of thousands of people, especially in
regional centres, is the dead hand of
government aviation policy.”
This is the message that needs to
be shouted at every opportunity, he
concludes.
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From humble beginnings, Asian
low-cost carriers have come to play
an increasingly prominent role in the
region’s aviation industry.
The opening in the past year
of dedicated low-cost passenger
terminals at some of the region’s major
airports have only served to underline
that. The first of those terminals, in
Kuala Lumpur, has already been
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Adam Air rescue attempt turned to debacle
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(Continued from page 1)
The search for the aircraft got off
to a bad start when rescue teams
initially headed into the mountains,
despite satellite data from Singapore
that suggested the aircraft had hit the
water 30km northwest of Sulawesi’s
capital Makassar.
Inaccurate information from Adam
Air and government officials in the
days following the crash sparked
anger among passengers’ families.
On the day of the accident, the airline
said the aircraft had sent two distress
signals before it disappeared. The
following day it said wreckage had
been found in the mountains, along
with 12 survivors.
The carrier was then forced to
backtrack and apologise for giving
false information.
Adam Air President Rusdi Kirana,
insists the 737 was airworthy.
Maintenance checks were carried
out according to the manufacturer’s
schedule and the aircraft had logged
45,371 hours as of 25 December.
Privately-owned Adam Air
previously had question marks raised
over its safety standards last year. In
February 2006, one of the airline’s
737-300s was forced to make an
emergency landing at Tambolaka
airport, after apparently suffering
a failure of its navigation and
communications systems.
In the wake of the latest tragedy,
the Indonesian government has
promised to set up a group to
investigate transport safety in the
country. The move was spurred by
the government’s embarrassment over
the false information released in the
immediate wake of the crash, which
was broadcast around the world and
had to be retracted.
The government says the new team
will carry out a thorough evaluation,
concentrating especially on air and
maritime safety. The Adam Air crash
came days after a ferry sank in the
Java Sea with more than 600 people
on board.
Jakarta-based Adam Air, which
started operations in February 2003,
has a fleet of 30 737-300/-400s
serving a domestic network of more
than 20 destinations. It also operates
two international routes: JakartaSingapore and Medan-Penang.
The carrier is one of the six
prominent Indonesian low-fare
airlines that have surfaced in the last
seven years, after deregulation of
the country’s civil aviation industry
in 1999. The others are Mandala
Airlines, CityLink, Bouraq Airways,
Lion Air and Indonesia AirAsia.
Dennis William / Makassar
Briefs
KOREAN AIR (KAL) says
it plans to launch freighter
services between Seoul and
Moscow starting 27 January.
A Moscow stop will be
added to one of the carrier’s
weekly Seoul-Frankfurt
return services, making
the route Seoul-MoscowFrankfurt-Seoul. The airline
says it’s adding the service
in response to demand for
transportation of clothes
and electronic items such
as cell phones. Demand is
expected to rise because of a
recent move by the Russian
government to reduce import
duties, KAL says.
Asian Aviation February 2007 – 3
General
EADS board gives green light for A330-200 Freighter
The new aircraft has already gathered 34 commitments from four customers, including Indian cargo start-up Flyington Freighters.
Airbus has won the go-ahead from its
parent company European Aeronautic
Defence and Space (EADS) for the
industrial launch of the A330-200
Freighter, obtaining commitments for
34 aircraft from four customers within
a week of the launch announcement.
“The decision for the industrial
launch of the A330-200F is based
on a strong market demand for over
400 freighters in the 60-plus tonne
category over the next 20 years,”
Airbus says. The manufacturer says
the aircraft is the only mid-size, longhaul freighter capable of carrying 64t
over 4,000 nautical miles, or 69t up to
3,200 nautical miles.
The aircraft is due to enter service
in the second half of 2009.
Airbus President and Chief
Executive Louis Gallois says the
aircraft makes Airbus “well-placed
to satisfy a large percentage of the
market demand by offering superior
main- and lower-deck flexibility than
the competition, while providing more
range and 21 percent more lift.” He
adds that the aircraft flies 20 percent
further at a cost per tonne 13 percent
lower than its direct competitor.
Malaysia Airports considers
upgrade for KL’s LCC terminal
Malaysia Airports Holdings is drafting
a plan to upgrade the low-cost carriers
(LCC) terminal at Kuala Lumpur
International Airport (KLIA), as
traffic grows and low-fare, long-haul
services become a reality.
The plan will cover the expansion
of the terminal and handling of
widebody aircraft. With the upgrade,
the terminal’s handling capacity is
expected to double to 20 million
passengers a year, to cope with
anticipated traffic growth over the
next 15 years.
Work on the project is expected to
start in the fourth quarter of this year
and be completed late in 2007. The
LCC terminal opened for operations
in March last year and presently
serves four low-fare airlines - AirAsia,
Thai AirAsia, Indonesia AirAsia and
Manila-based Cebu Pacific.
AirAsia X, the new low-cost,
4 – Asian Aviation February 2007
long-haul airline launched in Kuala
Lumpur in January (see page 1), will
start operations at the terminal on 2
July with daily flights to Hangzhou
and Tianjin, in China, using widebody
Airbus A330-300 aircraft. Qantas’s
Jetstar international unit has also
announced plans for low-cost flights
to KLIA from Sydney.
Separately, another LCC terminal
has begun operations at Kota Kinabalu
International Airport in the East
Malaysian state of Sabah. Built at a
cost of 60 million ringgit (US$17.1
million), the facility can handle 2.5
million passengers a year. It will be
used by AirAsia, which previously
operated to the airport’s Terminal 2.
The new terminal has 26 checkin counters, compared to four at
the older terminal, and six aircraft
parking bays.
The A330-200F’s main-deck
cargo loading system is designed
to accommodate both pallets and
containers, enabling operators to
cater to both markets. The main
deck can take as many as 23 sideby-side pallets, a single-row load of
16 pallets, or nine containers aimed
at the higher-density, general cargo
market.
Commitments to the aircraft to date
have come from Hyderabad, Indiabased Flyington Freighters, Intrepid
Leasing, Guggenheim Aviation and
Turkey’s MNG Airlines. Etihad
Airways of the United Arab Emirates
is also expected to order seven.
Flyington became the first cargo
airline to order the A330-200F, signing
for six of the aircraft for delivery
starting in the second half of 2009.
The carrier’s Chairman T Venkattram
Reddy says the aircraft “offers us
significant operational advantages and
suits our business model”.
“India is one of the world’s most
important aviation markets right
now and the development of locally
based freight operations will play a
big part in the growth of the region’s
cargo market,” says John Leahy,
Airbus’s chief operating officer for
customers.
Flyington plans to begin operations
in March with the first of four Airbus
A300-600F freighters, scheduled for
delivery early the same month. Two
more will arrive this year and the
fourth is to be handed over in 2008.
The company also has firm orders
for four Boeing 777-200F aircraft
for delivery by 2010. Flyington is
understood to be in discussions with
potential financing sources for the
Airbus and Boeing orders and is also
examining the possibility of sale-andleaseback deals on some of its aircraft.
The freight start-up will operate
on international routes only, and is
examining destinations in north and
southeast Asia – including China
– Europe and the Middle East. The
company is exploring a partnership
with an unidentified Indian carrier
on hold space for domestic cargo
services.
Kenne Chan / Indianapolis
Briefs
GREAT WALL Airlines has resumed operating its all-cargo
services from 21 January, with six-times weekly flights between
Shanghai’s Pudong Airport and Amsterdam’s Schiphol. The
airline says it will expand in 2007, connecting the manufacturing
hubs of China with the world’s major consumer markets. Great
Wall says it will restore services to Mumbai and Chennai, India,
“within weeks”. Great Wall is a joint venture of 51 percent
shareholder Beijing Aerospace Satellite Applications with
Singapore Airlines Cargo, which holds 25 percent, and Dahlia
Investments – a subsidiary of the Singapore Government’s
Temasek Holdings investment arm – which holds the remaining
24 percent.
CANADIAN SIMULATOR manufacturer CAE has bought
KESEM International, an Australian firm specialising in
modelling, simulation and decision support services. The
transaction was valued at A$5 million (US$3.86 million).
KESEM, based in Melbourne, specialises in the application of
modelling and simulation to decision support systems for the
defence and homeland security markets. Clients include the
Australian Defence Forces, Defence Science and Technology
Organisation, Defence Materiel Organisation and other defence
and security-related bodies.
Dennis William / Kuala Lumpur
General News
Bangkok’s Don Muang airport set to re-open
Congestion at Bangkok’s new
Suvarnabhumi Airport has prompted
Airports of Thailand (AOT) to reopen the old facility at Don Muang for
low-cost airlines and domestic flights
operated by Thai carriers.
AOT will submit its proposal to the
Thai Cabinet early in February at the
latest. No date had been fixed for the
re-opening, as the proposal needs the
Thai cabinet’s approval, which is seen
as a formality.
Thailand’s deputy transport minister
Sansern Wongcha-um says Thai
Airways International’s domestic
flights to Phuket, Chiang Mai and
Khon Kaen will continue to operate
at Suvarnabhumi Airport, due to large
number of international travellers that
connect with these flights.
AOT has been under pressure from
airlines to ease the congestion at
Suvarnabhumi, which began operating
on 28 September. Low-cost carriers
have also complained about high
operating costs at the airport.
According to Sansern, Suvarnabhumi
has already reached its annual handling
capacity of 45 million passengers.
“The congestion is causing
inconvenience to passengers and
airlines are demanding that Don Muang
being re-opened as the city’s second
Low-cost carriers such as AirAsia and its Thai affiliate are set to
move back to Bangkok’s old airport to ease congestion.
airport,” Sansern says. “Suvarnabhumi
will not be able to handle the surge
in traffic during the Lunar New Year
holiday,” starting on 19 February.
Sansern adds that the government
is keen to re-open the old airport,
as “this will ease the congestion at
Suvarnabhumi by 30 percent. The
government also feels that Don
Muang should not be left idle, as
US$500 million had been invested
in refurbishing the facility in
anticipation of the delay in opening
Suvarnabhumi.”
Seven low-fare airlines now operate
at Suvarnabhumi. The carriers are:
Thai AirAsia, Nok Air, One-Two-Go,
AirAsia, Tiger Airways, Cebu Pacific
and Jetstar Asia.
Sansern says AOT’s plan to
build a LCC Terminal with annual
capacity of 15 million passengers at
Suvarnabhumi may now be scrapped
or delayed to 2014.
The government of ousted Thai
premier Thaksin Shinawatra decided
on the one-airport policy for Bangkok.
The master plan of Suvarnabhumi will
now be reviewed, as the authorities
feel there is no need for the airport to
eventually have six runways.
“The airport was built without
considering traffic growth and the
limited land it has for expansion,”
Sansern says. “The design of the
airport was changed to increase the
number of gates by 11 to 51, but the
handling capacity was not expanded.”
Landing charges at Don Muang
and Suvarnabhumi will be the
same, as AOT will go ahead with a
planned 15 percent hike for the latter
on 1 April.
Briefs
AIR
TRANSPORT
officials from Malaysia
and Singapore will return
to the negotiating table in
March to debate whether
to open the Kuala LumpurSingapore route to lowfare airlines. This will be
the second round of talks
between the countries,
after November ’s first
round ended in a stalemate.
According to Malaysia’s
Minister for Transport
Chan Kong Choy, the
country has agreed in
principle to have a more
liberal arrangement with
Singapore. Chan declined
to elaborate. Malaysia’s
low-fare airline AirAsia and
Singapore-based Tiger
Airways have applied to
operate on the route,
which is currently served
by Malaysia Airlines and
Singapore Airlines with
six daily flights each, while
Japan Airlines offers a
daily service.
Dennis William / Bangkok
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Airlines
All Nippon plans restructuring of domestic network
All Nippon Airways (ANA), Asia’s
second-largest carrier, will restructure
its domestic operations, to prepare for
an expected capacity surge at Tokyo’s
Haneda airport with the opening of a
new runway in 2009.
The airline says in a statement that it
plans to move towards a hub-and-spoke
model “to stimulate demand, better
match supply with demand and thus
improve profitability”. The revamp is
part of the carrier’s corporate plan for
the business year starting on 1 April.
At least six routes will be suspended
and eight more will have their
frequencies reduced, while another
three may be suspended “depending
on performance”. Services will be
increased on another eight routes.
The revised model will see increased
more flights routed through major
hubs such as Osaka’s Kansai airport,
rather than operating direct between
secondary airports. ANA says it will
make “organic use of the three airports
in the Kansai (Osaka) area – Itami,
Kansai and Kobe”.
The carrier also says it plans to
“establish a [domestic] cargo network,
placing emphasis on a convenient
schedule, centred around China and
Asia routes where demand for cargo
services is strong”.
The routes marked for suspension
are: Sapporo-Memanbetsu, KansaiMiyazaki, Kobe-Kagoshima, KobeNiigata, Sendai-Hakodate and
Oita-Okinawa. Frequencies are
to be reduced on: Itami-Sapporo,
Nagoya-Fukuoka, Nagoya-Okinawa,
Sapporo-Fukuoka, Sendai-Hiroshima,
Sapporo-Wakkanai, Sapporo-Risshiri
and Fukuoka-Komatsu.
Frequency increases are planned
for: Kansai-Sapporo, Kansai-Kochi,
Kansai-Fukuoka, Kobe-Tokyo
Haneda, Kobe-Okinawa, Okinawa,
Okinawa-Ishigaki, Nagoya-Sapporo
and Kobe-Sapporo.
ANA’s international services will
be expanded with a view to greater
profitability “to be achieved through
improvements to the Asia network
and aircraft downsizing, coupled
with more daily services on the China
network.
The airline’s second extended-range
Boeing 737-700ER will be configured
with 36 business class seats and used
to open a new route linking Tokyo
to Mumbai from 1 September. This
marks the first time a Japanese
airline will introduce an all-business
class aircraft, marketed as an ANA
BusinessJet service.
The first –700ER is to be fitted with
a mix of business-class and premium
economy seats, and will enter
service between Nagoya and
Guangzhou in March.
Frequencies between Tokyo and
Guangzhou will be doubled to tap
increasing demand for business
travel. ANA says larger aircraft on
some China routes will be replaced
with single-aisle Airbus A320-200s,
ANA is planning to start an all-business class service between Tokyo and Mumbai using its new Boeing 737-700ER.
seating 110 passengers including 20
in business class.
The airline will also introduce a
Boeing 777-300ER aircraft on its
Tokyo-London services, making
the UK capital the first European
destination served using that aircraft,
which replaces the current 747-400
service.
Meanwhile, larger rival Japan
Airlines (JAL), revealed its plan for
its international services in the new
business year, including frequency
boosts on eight overseas routes
and cutbacks on another three.
Cutbacks will affect JAL’s TokyoHong Kong and Tokyo-Guangzhou
services, while Tokyo-Zurich is to
be suspended from 1 June. Increased
services will be seen on flights linking
Tokyo to Paris, Moscow, New Delhi
and New York.
Hong Kong Express takes delivery of first 737
Chinese cities such as Xi’an and
Wuhan, as well as destinations in
“wider East Asia following the
success of the route between Hong
Kong and Chiang Mai [in Thailand]
launched last year,” the carrier says.
The new 737s will be configured
for 164 passengers with eight
business-class seats.
Hong Kong Express was scheduled
to unveil its new corporate identity on
29 January. The airline underwent a
change of ownership last year, when
China’s Hainan Airlines acquired a
45 percent stake.
Briefs
LOW-COST Thai airline Nok Air
has introduced flights linking
Bangkok’s Suvarnabhumi
airport with the southern resort
destination of Krabi starting
in mid-January. The new
service is being offered twice
a day using a Boeing 737-400
aircraft, configured for 156
passengers. Krabi becomes
the carrier’s fifth destination in
southern Thailand after Hat Yai,
Phuket, Nakhon Si Thammarat
and Trang.
The carrier’s new 737s will replace its current fleet of Embraer 170s.
Hong Kong Express Airways took
delivery of the first of seven Boeing
737-800 jetliners scheduled to join the
carrier’s fleet this year on 22 January,
ahead of the unveiling of the carrier’s
new corporate identity.
The aircraft’s entry into service
marks the “transition into the next
stage in the airline’s development,”
Hong Kong Express says in a
statement. A number of new routes
will be launched this year, and
capacity will be added to existing
services.
New services will include mainland
International flights from Osaka
will see more frequencies related
to the introduction in May of new,
smaller-capacity Boeing 737-800s
on the routes. Affected destinations
will be Dalian, Hanoi, Hangzhou and
Qingdao, while JAL says it also plans
to introduce the aircraft on its OsakaGuangzhou service starting in July.
The carrier additionally plans to
increase charter services by about
13 percent from the previous year,
mainly to take advantage of an
expanding leisure market as the babyboomer generation retires. JAL will
offer charter flights to destinations
including Alaska, Australia, the Czech
Republic, Hungary, Mongolia, Palau
and the Marshall Islands.
JAL is expected to announce
plans for its domestic network by
mid-May.
As part of the change, Hong Kong
Express will phase out its entire
fleet of four Embraer 170 regional
jets, leased from GE Commercial
Aviation Services (GECAS). One
of the aircraft will reportedly go to
charter operator Sky Air World, two
will go to Kenya Airways and the
fourth will transfer to Airnorth in
Australia.
Hainan Airlines also holds a 45
percent stake in Hong Kong Airlines,
formerly called CR Airways. The two
carriers will continue to be managed
separately, however.
DRAGONAIR launched a
new, thrice-weekly service
from its Hong Kong base to
Busan, South Korea, on 19
January. The route is being
offered as a codeshare flight
with Dragonair’s owner Cathay
Pacific Airways, which is
marketing the service through
its international network.
Dragonair says it has already
set up an office in Busan
and begun recruiting Korean
cabin crew.
TRADE VISITORS
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It is the perfect forum in which to compare
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Trade day admissions are restricted to those
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aviation, aerospace or defence.
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Airlines
China’s low-cost carriers seek removal of discount limit
China’s low-cost carriers (LCCs) say
they want the General Administration
of Civil Aviation of China (CAAC)
to remove its 45 percent discount
limit on domestic air fares.
The carriers say they should be free
to determine their own fare structure
and the level of discounts that they
offer. The airlines’ comments follow
a fine of 150,000 yuan (US$19,180)
imposed on Spring Airlines by
eastern China’s Shandong provincial
government, for selling air tickets
at 1 yuan each on 28 November, for
flights between Jinan and Shanghai’s
Hongqiao airport from 30 November
to 10 December.
Spring Airlines is the first LCC
to be punished under the CAAC’s
fare regulations, which were
implemented on 20 November,
following complaints from state-
owned, full-service airlines that they
were losing money on routes where
both types of carrier operate.
Hongqiao airport-based Spring
Airlines says it will not appeal
against the fi ne, as the regulator
is unlikely to consider waiving or
reducing it.
“Putting a cap on discounts
is putting low-fare airlines at a
disadvantage, as full-service, stateowned carriers are also offering
discounts but not penalized,” says
Spring Airlines spokesman Xu Hao.
If the cap stays, it will slow LCCs’
growth, he adds.
Another low-fare airline that
declines to be named also says the
authorities should remove the cap,
as the LCC market segment should
be free from fare restrictions.
An offi cial of the airline says it
doesn’t make business sense for an
LCC to operate with a 50 percent
passenger load because of discount
restrictions.
Xu says many full-service
airlines have been offering massive
discounts just to gain market share
and remain in business. He cites the
case of the Beijing-Shanghai route,
where there is fierce competition,
where discounts of as much as 78
percent have brought fares down to
as little as 290 yuan for a one-way
journey.
“The 1 yuan fare offered by Spring
Airlines was a one-off promotion,”
Xu says. “The authorities should
have the consumers in mind and not
entertain complaints from full-service
airlines.” Instead of complaining, the
full-service carriers should be ready
to compete, he says.
Jetstar’s long-haul growth beats expectations
Jetstar will transition its long-haul fleet from Airbus A330s to Boeing 787s starting in August 2008.
Jetstar, Qantas’s low-cost subsidiary,
says the performance of its recently
introduced long-haul services is
beating expectations, spurring the
carrier to speed up expansion of the
network.
The carrier says it plans to
introduce thrice-weekly services
between Sydney and Kuala Lumpur
starting from 9 September, adding
Malaysia to its international network.
The proposed services, which are
subject to regulatory approval, will be
operated using 303-seat Airbus A330200s in a two-class configuration.
Jetstar chief executive Alan Joyce
announced the latest expansion of
the company’s long-haul services in
an address to the Asia Pacific Low
Cost Carrier Congress in Singapore.
Joyce added that he has applied for a
capacity allocation for Qantas Group
services on the route.
The carrier says it began offering
tickets for the route at an initial,
one-way, all-inclusive fare of
A$249 (US$194), or A$999 for
business class.
“The next growth phase for Jetstar is
part of the Qantas Group’s two-brand
strategy,” Joyce says. “We are excited
by the prospects of entering this route
with a highly competitive, two-class
product that since our launch longhaul flight last November, is operating
ahead of expectations.”
The international operation is
forecast to make a small operating
loss in its first financial year, ending
in June, but is set to make a profit the
following year.
The carrier has already finalised
a commercial agreement with
Malaysia Airports, “including choice
of terminal to support our launch,”
he adds.
Jetstar will be the second foreignowned low-cost carrier to fl y to
Kuala Lumpur International Airport
after Cebu Pacific began operating
there in December.
The Australian carrier now serves
f ive international markets from
Sydney and Melbourne, flying 18
weekly return services. Destinations
include Bangkok, Phuket, Ho Chi
Minh City, Bali and Honolulu.
Jetstar international operations
will grow further with the
introduction of a daily SydneyOsaka service from 25 March,
while other planned services
include Cairns-Nagoya, starting in
August, and Cairns-Osaka from
September.
Jetstar’s fleet will number
six A330-200s by mid-2007,
transitioning to 12 new Boeing 787
jetliners starting in August 2008.
Xu denies that Spring Airlines was
previously warned by the authorities
for violating the discount cap.
Spring Airlines, which operates a
fleet of four Airbus A320s, operated
its first flight on 18 July 2005,
flying between Shanghai Hongqiao
and Yantai. The carrier now has a
network covering 12 destinations,
and introduced two new routes
– Shanghai-Qingdao-Harbin and
Shanghai-Zhengzhou – from 6
January.
With an average passenger
load of 95 percent since it started
operations, the airline made a profit
of 20 million yuan for the period
ended 31 December, a stark contrast
to some of the larger state-owned
carriers that are operating in the red
despite growing travel demand.
Dennis William / Shanghai
Briefs
THE SAUDI Arabian General
Authority for Civil Aviation
has issued an air operating
certificate (AOC) to Sama Air,
a low-fare, domestic start-up
airline. The airline, based at
the King Fahd International
Airport in Dammam, will
start operations at the end of
February with a fleet of four
Boeing 737-300s. Its initial
network will cover Jeddah,
Madinnah and Abbha. Sama
Air was originally to have
started operations in July
last year, but was delayed as
the Saudi aviation authority
debated whether to issue
the AOC. The airline is now
in talks with SR Technics for
maintenance of its fleet. Sama
Air is the second private airline
in Saudi Arabia to secure an
AOC. The other is National
Air Service, which is based at
the King Khaled International
Airport in Riyadh.
THE NUMBER of Nepalese
who flew last year rose
significantly 32 percent to
3.12 million, an all-time record
for the country. Domestic
flights handled 1.75 million
passengers, a 58.8 percent
surge from a year earlier,
while 1.37 million travelled
on international flights. The
director general of the Civil
Aviation Authority of Nepal,
Yagya Prasad Basnet,
attributed the increase to
more Nepalese switching to
flying from driving, and locals
leaving to work overseas.
Freight
Boeing wins two 777 Freighter orders from Qatar Airways
Qatar Airways has placed an order for
two Boeing 777 Freighters in response
to growing regional air-cargo demand,
bringing total orders to date for the
twin-engine aircraft to 51.
“Qatar is a country of robust
economic growth,” says airline Chief
Executive Akbar Al Baker. “While the
conerstone of our success has been
focused on our passengers, we also
recognise that the 777 Freighter brings
asset value to our fleet as we address a
growing regional freight market.”
According to Boeing, Qatar boasts
the highest gross domestic product per
capita of any Gulf country and among
the highest in the world, while the
Middle East has been experiencing
continued strong air cargo growth.
Doha’s new international airport
is scheduled to open in mid-2009,
offering freight-handling capacity of
some 750,000t a year, with additional
development potential.
Qatar Airways has outstanding
orders for 22 777 aircraft, for delivery
between November this year and mid2010.
The latest order came within days
of a contract for three 777Fs from
US-based aviation investment firm
Guggenheim Aviation Partners, with
an additional option. That order was
valued at US$708 million at list
prices, with deliveries scheduled to
begin in 2009.
Qatar needs the 777 Freighters as economic growth is boosting Middle Eastern cargo demand.
Hong Kong International
plans new cargo terminal
Air China, Cathay Pacific
plan Shanghai cargo venture
Hong Kong International Airport
(HKIA) has decided to go ahead
with the development of a new cargo
terminal, following consultations with
the airport’s cargo terminal operators.
The airport says it will now proceed
with an open tender for the terminal,
which is expected to be operational
from 2011. The tender process will be
completed in 2008.
The main cargo handler at the
airport today is Hong Kong Air
Cargo Terminals (HACTL), which
handles about 80 percent of the
airport’s freight. Asia Airfreight also
provides cargo-handling services
at the airport, while locally based
Cathay Pacific Airways has for some
time been seeking to operate its own
cargo terminal at the airport, in the
Air China and Cathay Pacific Airways
are planning to establish a cargo joint
venture in Shanghai in the first half of
this year, according to reports in the
local media.
The 50-50 joint venture is believed
to be part of a cross-shareholding
agreement finalised by the airlines
last June, under which Air China
increased its stake in its Hong Kongbased partner to 17.5 percent, while
Cathay boosted its stake in the
face of opposition from HACTL.
The Airport Authority, which
operates HKIA, says that all interested
parties, including existing cargo
terminal operators will be able to
participate in the tender covering
investment, design, construction and
operation of the new terminal.
The plans come as a response to
continued growth in freight traffic at
the airport. Over the last 12 months
some 3.6 million tonnes of cargo
passed through the airport – an
increase of 5 percent on the previous
year.
“The timely provision of adequate
air cargo capacity will sustain the longterm development of Hong Kong as a
leading international air cargo hub,”
says the Airport Authority.
The new cargo aircraft will operate on routes between Europe and Asia.
Beijing-based carrier to 20 percent.
The proposed freight partnership is
expected to produce the largest cargo
carrier on the Chinese mainland.
It follows the failure of more than
a year of talks between Air China
and Shanghai-based China Eastern
Airlines on a potential merger of their
cargo operations.
Meanwhile, CITIC Pacific is
reported to be considering selling its
25 percent stake in Air China Cargo.
Briefs
INTERNATIONAL FREIGHT traffic experienced its weakest monthly
growth rate in a year last October, according to the International
Air Transport Association (IATA). Year-on-year demand growth for
the month was 2.3 percent, compared with 4.9 percent growth in
September. For the first 10 months of the year, freight-traffic was up 4.9
percent. “Despite strong underlying positive economic conditions, the
results for freight traffic are disappointing,” says Giovanni Bisignani,
IATA’s director general and chief executive officer.
PRECISION CONVERSIONS has received supplemental type
certification from the European Aviation Safety Agency (EASA) for
its Boeing 757-200PCF freighter modification. European certification
follows Chinese and US approvals.
TNT receives first Boeing
747-400ER Freighter
European express and mail operator TNT has taken delivery of its
first Boeing 747-400ER Freighter. The aircraft, purchased through US
investment company Guggenheim Aviation Partners (GAP), will operate
between Europe and Asia. “The arrival of the first TNT-owned Boeing
747 is a major step towards achieving our strategic objective of being the
number one carrier between Asia and Europe,” says Peter Bakker, TNT’s
chief executive officer. TNT currently operates a fleet of 46 aircraft that
includes six Boeing 737 Freighters and one 757 Freighter. The company
will add a second 747-400ER Freighter to its fleet later this year, in cooperation with GAP.
TAIWAN-BASED China Airlines (CAL) has added a twice-weekly
freighter service to the Swedish capital Stockholm. The route runs
from Taipei, via Abu Dhabi and Luxembourg, and is being operated
using Boeing 747-400 freighters.
CHINA POSTAL AIRLINES is introducing six-times weekly services
from Tianjin to Seoul in South Korea. The flights will be operated using
Boeing 737 freighters.
AUSTRALIAN AIR Express took delivery of its first converted Boeing
737-300 freighter late last year. The conversion was performed by
Qantas and Israel Aircraft Industries’ Bedek Aviation. Australian Air
Express is a joint venture between Qantas and Australia Post. The
express freight operator is receiving four former Qantas passenger
737-300s converted into freighters and has subsequently released
a tender for three more 737Fs. Qantas’ maintenance division is
conducting the conversions using kits supplied by Bedek.
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MRO
Korean Air completes its own
747-400 freighter conversion
Korean Air has completed its first
Boeing 747-400 passenger-to-freighter
conversion, delivering the aircraft to
Korean Air Cargo on 23 January.
The delivery took place at Korean
Air’s Aerospace/Engineering and
Maintenance base in Busan, marking
the success Korean Air’s first step into
the civil aircraft conversion market.
The company says the conversion
took six months to complete,
involving the replacement of about
40,000 parts by 200 workers and
costing about US$30 million.
Korean Air says it now plans to
convert eight of its passenger aircraft
by 2009, and that it will also now
offer the service to other airlines.
Korean Air says it expects the
conversion business to bring in about
US$100 million in annual sales and
create 500 new jobs.
“The conversion will not only be
a new source of business for Korean
Air, but will also allow [a] stable and
economical supply of cargo capacity
for Korean Air,” the company says.
The airline is the world’s number one
cargo carrier by volume, and points
out that the cost of conversion is a
fifth of the US$150 million-plus price
tag of a new freighter.
The aircraft was scheduled to enter
service on 25 January.
The conversion work took Korean Air six months to complete..
ST Aero wins US$470 mln FedEx freighter conversion contract
Singapore Technologies Aerospace (ST
Aero) has announced that its US-based
ST Mobile Aerospace Engineering
(MAE) unit has won a contract from
FedEx to convert 87 Boeing 757-200
jetliners into freighters.
The deal is valued at US$470
million, ST Aero says in a statement
to the Singapore stock exchange.
Work will begin this year, and will be
implemented in three blocks over a
seven-year period.
Under the agreement, Mobile,
Alabama-based MAE will carry out the
conversions and perform maintenance
on the aircraft. The conversion work
will be done on a supplemental type
certificate developed and owned by ST
Aero and based on data licensed from
Boeing.
The conversion work includes
the installation of a side cargo door,
strengthening the main deck floor and
installation of a rigid cargo barrier and
loading system.
The Singapore-based company says
the contract is “a significant milestone”
in its relationship with FedEx.
“MAE opened its hangar doors for
FedEx’s first aircraft about 15 years
ago,” ST Aero says. “Since then, through
its global network of companies, ST
Aerospace has been providing airframes,
engines and component maintenance
and modification solutions to FedEx’s
fleet of Airbus A300, A310, Boeing
727, MD-10 and MD-11 aircraft.”
Separately, another ST Aero unit,
ST Aerospace Engines (STA Engines)
has secured an engine maintenance
contract from Xiamen Airlines for its
fleet of 11 Boeing 737-700 aircraft,
powered by CFM International
CFM56-7B22 turbofans.
The contract is valued at US$160
million and covers support for 22
engines over 15 years. Under the
deal, ST Aero will provide heavy
maintenance and restoration support
for the engines, working closely with
the airline’s own engineers on-site for
support including engine-condition
monitoring and removal planning.
The Xiamen deal came just days
after ST Aero announced that its
wholly owned ST Aerospace Supplies
subsidiary had been awarded an
aircraft components maintenance
contract from Malaysia’s AirAsia for
the airline’s new fleet of Airbus A320
jetliners. The US$130 million contract
involves components maintenance
support over 10 years for 130 of the
low-cost carrier’s Airbus A320s.
ST Aero says none of the contracts
will have an impact on the net assets
and earnings of its parent company, ST
Engineering, for this financial year.
SIA, Rolls-Royce sign Trent 800 HAL considers setting up
engine-maintenance agreement freighter conversion arm
Singapore Airlines signed a Letter
of Intent today with Rolls-Royce
(R-R) to provide a comprehensive
maintenance package for Trent 800
engines on the carrier’s fleet of 58
Boeing 777 aircraft, under a TotalCare
services agreement.
R-R will provide off-wing
maintenance, repair and overhaul
of the engines, as well as spareengine support. The engines will be
repaired and overhauled at Singapore
Aero Engine Services (SAESL)
– a joint venture of the airline’s SIA
Engineering unit and Rolls-Royce.
The agreement builds on a longstanding relationship between the
two companies, SIA says. Besides
powering the Boeing 777, other Trent
models will power SIA’s Airbus
A380 fleet, as well as all 19 of
the carrier’s Airbus A330-300s,
which will be delivered starting in
January 2009.
Briefs
AMECO BEIJING has signed an engine services agreement
with the UK’s Dart Group, to provide overhaul services for two
Rolls-Royce RB211-535E4 engines owned by Dart’s affiliate
airline, Jet2.com. Ameco is a maintenance, repair and overhaul
joint venture of Air China and Lufthansa. Jet2, based at the
UK’s Leeds-Bradford International Airport, is a low-cost carrier
operating a fleet of three RB211-powered Boeing 757-200
jetliners and 22 smaller 737-300s. It flies to 26 destinations
from six British airports.
Bangalore-based Hindustan Aeronautics
(HAL) is considering setting up a
dedicated facility for passenger-tofreighter conversions, as part of a
proposal for a new maintenance, repair
and overhaul (MRO) operation.
“We are planning to set up this
conversion facility as part of our
MRO project,” says HAL Managing
Director A K Saxena. The company
“will be aiming at converting Boeing
passenger planes such as the 737 and
747 for international market.”
The company is now looking for
an international partner for a possible
technical tie-up. However, HAL hasn’t
revealed any details of the financing
and structure of the proposed facility.
HAL stands to benefit substantially
from the labour-intensive conversion
work, industry analysts say. The
company hopes to be in a position
to tap global demand for freighter
aircraft, which is expected to double
by 2025 as air-cargo demand surges,
especially in Asia.
“Across the world, there is a
sizeable fleet of these Boeing family
aircraft that need to be converted into
freighters,” Saxena says.
Airbus predicts that India alone will
need 165 more freighters by 2025. Stateowned Air India has already begun
converting two Airbus A310 jetliners,
while Indian Airlines is planning to
convert five of its Boeing 737s.
The express cargo shipments
business alone in India is expanding
at 20-25 percent a year, according
to Express Industry Council of India
Chairman R K Saboo.
HAL has already been reportedly
in talks with Airbus, exploring the
possibility of co-operation in an
MRO venture. However, Airbus has
also been in similar talks with Indian
Airlines, and a final decision on which
partnership to pursue is expected early
this year.
India’s current airline boom and
the resultant surge in aircraft orders
has caused a spike in demand for
MRO capacity.
Akash Rao / Bangalore
Manufacturers
Boeing completes first 787 components-delivery cycle
Boeing delivered the first major
assemblies for its new 787 twinjet
to partner Global Aeronautica
in Charleston, South Carolina,
on 15 January, completing the
f irst-ever delivery cycle using
the specially modified 747-400
Large Cargo Freighter, now called
the Dreamlifter.
“The Dreamlifter proved beyond a
doubt that it is the right transportation
solution for the lean, global production
system we are using to build the 787,”
says Scott Strode, vice president of
development and production for the
787 programme. “We can now do in
hours what used to take weeks.”
The assemblies transported from
Nagoya, Japan, included a forward
fuselage section made by Kawasaki
Heavy Industries (KHI), and the
centre wheel well and centre wing
tank made by KHI and Fuji Heavy
Industries. The Dreamlifter left
Japan on Friday, 12 January,
performing some required flight
tests in Seattle before heading to
Charleston late Sunday.
The 787 assemblies were loaded in Nagoya, Japan, for transportation to the US.
Boeing seizes lead in 2006 aircraft orders from Airbus
Boeing regained the lead in unit
orders for jetliners seating more than
100 passengers in 2006, ending five
years of dominance by rival European
manufacturer Airbus. The companies
don’t reveal prices agreed with
customers, so no genuine comparison
of order value is possible.
Nevertheless, the 81.7 percent
proportion of lower-priced, singleaisle aircraft among Airbus orders
contrasts with Boeing’s more balanced
business, where narrowbodies
represented 69.8 percent of new
orders. The US manufacturer’s orders
will, therefore, have a higher book
value at catalogue prices.
Airbus’s parent European
Aeronautic Defence and Space
(EADS) warned in January that the
Toulouse-based aircraft maker would
probably report negative earnings
before interest and tax for the 2006
business year.
Overall, Boeing took gross orders
for 1,050 commercial jetliners
in 2006, while Airbus sold 824
machines. This gives Boeing two
consecutive years of record unit
orders, although the total declines
to a net 1,044 after allowing for
cancellations and conversions. A
year ago, the US company announced
1,002 net orders for 2005.
For Airbus, 2006 was its secondbest year, with its net bookings
falling to 790 after subtracting
cancellations, compared with 2005’s
1,055 net orders.
For both companies, and especially
for Airbus, single-aisle aircraft
demand was the backbone of their
business. Airlines placed 673 gross
orders for narrowbody aircraft with
Airbus – or 653 net – including 312
A320s, before cancellations. Boeing’s
total ran to 733 units, or 729 net.
The Boeing figure represents
a record performance for the
narrowbody 737 family, the US
company’s previous best being 2005’s
net total of 569.
Boeing also reported a strong year
for its twin-aisle models, taking 72
orders for 747 quadjets, 76 for 777
widebody twins, 157 for the new
787 family, and 10 for 767s. The 747
business was the highest annual total
for the type since 1990, exceeded
only on four previous occasions.
Some 76 customers – including
passenger and cargo airlines, lessors,
and private buyers – ordered aircraft
from the US manufacturer, which
delivered 398 machines.
“The strong orders for the past two
years are a validation of our strategy
of focusing on our customers,
simplifying our product and services
offerings and transforming our
production system,” says Scott
Carson, Boeing Commercial
Airplanes’ president and chief
executive. Highlights included the
beginning of 787 parts production
in all factories and start of final
assembly, introduction of the 777
moving assembly line, delivery of
the first 777-200LR, the first flight
of the 737-900ER, delivery of the
5,000th 737, and launch of the BBJ3
business jet variant of the 737.
For Airbus, 2006 saw deliveries
increase to the highest level ever –
reaching 434 aircraft, including 339
single-aisle jetliners, 86 widebodies
and nine A300 Freighters. Airbus
says its 824 new orders, accounting
for about 44 percent of the market,
included 134 twin-aisle A330s,
A340s, and A350s, as well as 17
A380 very-large airliners.
According to the European
company, its 790 net orders represent
a 43 percent market share. Airbus’s
year-end backlog stood at 2,533
aircraft – a 17 percent increase on
the previous year’s record.
The European manufacturer’s 2006
highlights included joint EASA/FAA
type certification of the A380, the
launch for the A350 XWB family
and the formal offering of the A330200F cargo variant. The company
was plagued, however, by delays to
the A380 programme and upheavals
in its upper management.
Ian Goold / London
Aero In
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Defence
Briefs
The aircraft is the first of four tankers being built for Japan air force.
Boeing flies first KC-767 tanker for Japan
Boeing took the first KC-767 Tanker
slated for the Japan Air Self-Defence
Force (JASDF) on its maiden flight in
mid-January.
The aircraft, set to become Japan’s
first ever aerial-refuelling platform
when delivered in February, completed
a three-and-a-half hour flight after
taking off from McConnell Air Force
Base, Kansas. Boeing is to supply
four KC-767s to Japan.
“The aircraft has great flexibility
in its aerial refuelling and cargo
capabilities, and will help Japan
provide aid to the world’s population
during major natural disasters,” says
Major Kenji Nagatomo, Japan’s on-
site tanker programme liaison officer.
Japan’s KC-767, a military
derivative of the 767-200 commercial
jetliner, was selected over the rival
Airbus A310 in competition in
2001. It has been configured with
the advanced Boeing air-refuelling
boom and a Remote Aerial Refuelling
Operator (RARO II) system.
According to Joe Shaheen, director
of Boeing International Tanker
Programs, the Japanese aircraft takes
advantage of “more than 540 hours
and 180 flights” of the KC-767 built
for Italy’s defence forces, making it
“a low-risk, high-demand asset for
the Japanese military.”
The JASDF has selected the
convertible freighter configuration
of the aircraft, which providing
flexibility in carrying cargo or
passengers, while maintaining its
primary role as a tanker.
Boeing also recently completed
US Federal Aviation Administration
(FAA) certification on the first KC767 for Italy, and will deliver the first
two of four tankers to that country
this year. The manufacturer is also
competing for a contract to build 179
next-generation tankers for the US
Air Force, which is to replace its KC135 fleet under the KC-X acquisition
program next year.
India, Russia close in on fighter co-operation
Russian Deputy Prime Minister and
Defence Minister Sergei Ivanov says
the country will “open up contractual
work” allowing India to join its
fifth-generation fighter development
programme, now being led by the
Sukhoi Design Bureau.
“Some time ago, India showed
interest in joining this project,” Ivanov
told reporters following the sixth
meeting of the Inter-Governmental
Commission on Military Technical Cooperation. “Now, India has informed
us that a final choice has been made.”
However, even though the decision
has been made, it may be some time
yet before any contracts are signed.
During a meeting between Ivanov
and his Indian counterpart A K Antony,
the two sides also signed a protocol
of intent on joint development of a
medium-sized, multi-role transport
aircraft (MTA).
“We are looking forward towards
joint development and production of
the MTA for use in the Indian and
Russian air forces and for sale to third
countries,” Antony said.
Bangalore-based Hindustan
Aeronautics (HAL) is likely to take a 50
percent stake in the proposed US$700
million joint venture to develop the
60t MTA, with the remainder divided
between Russia’s Ilyushin design
bureau and manufacturer Irkut.
The MTA is a proposed replacement
for the Indian Air Force’s Antonov
An-32 transport, with an estimated
requirement for some 200 aircraft
divided between the partner nations.
Detailed design could begin late this
year, with a first flight by 2012.
HAL will probably be responsible
for the wing and forward fuselage of
the aircraft, while the rear and centre
fuselage will be designed in Russia.
A separate agreement covered
licensed production of RD-33
engines, which power the Indian Air
Force’s RSK MiG-29 fighters, as well
as the more advanced MiG-35. The
ministers’ discussions reportedly also
touched on the sale of MiG-35s to
India to meet the country’s MediumRange Multi-Role Combat Aircraft
(MMRCA) requirement for 126
fighters.
The MiG-35 is a thrust-vectoring,
extended-range development of the
MiG-29.
The two ministers agreed that IndoRussian defence co-operation had
developed beyond a “buyer-seller”
relationship, and that the future would
see increased joint development
work. Antony cited co-operation
on the BrahMos supersonic cruise
missile as a “successful chapter in
our relations”.
Describing the talks as “most
successful”, Antony said the
discussions also touched on possible
additional purchases by India of
Sukhoi Su-30 fighters and Mil Mi-17
helicopters.
HINDUSTAN AERONAUTICS
(HAL) says it will increase
production of the 5.5-tonne
Dhruv Advanced
Light
Helicopter (ALH). The
company will produce 18 of
the aircraft this year, targeting
production of 24 in 2008 and
33 in 2009. Some 65 Dhruvs
are already in service with
the Indian defence forces
and Coast Guard, while the
company is also considering
launching a weaponised
version of the helicopter next
year. Meanwhile, the upgraded
version of Dhruv, equipped
with the high performance
Shakti/Ardiden-1H engine, is
expected to obtain certification
before the end of this year. The
Shakti engine will increase the
helicopter’s payload to 560kg,
and will eventually become its
standard powerplant, replacing
the current TM333-2B2 engine.
Separately, India’s Disaster
Management Authority is
planning to place order for 12
air-ambulance version of the
helicopter.
SOUTH KOREA is to run an
open competition for another
batch of 20 front-line fighters,
instead of expanding its 2002
contract with Boeing for the
supply of 40 F-15K combat
aircraft. A purchasing plan
for the follow-on order, worth
as much as 2.3 trillion won
(US$2.5 billion) is expected
in February, with requests
for proposals to be issued in
March. A contract will probably
be signed in February 2008,
following test and evaluation
and price negotiations, and
the aircraft will probably be
delivered in 2010-2012. The
Korean Defence Acquisition
Programme Administration
(DAPA) says the requirement
is for “F-15-class aircraft”, but
adds that the defence ministry
wants to see what other
manufacturers have to offer
before making a decision.
LOCKHEED MARTIN has
delivered the first of nine,
upgraded P-3C Orion maritime
patrol aircraft to the Pakistani
navy. The aircraft departed the
USA on 10 January and second
will follow in February. Seven
of the nine aircraft are ex-US
Navy machines upgraded in
Greenville, South Carolina,
while the remaining two will be
upgrades of aircraft previously
in service in Pakistan.
Defence
The J-10 represents a new level of sophistication for the Chinese aerospace industry.
The fighter is also available in a two-seat tandem version, the J-10B.
China unveils Chengdu J-10 fighter to public
China finally officially revealed its
indigenously developed Chengdu J-10
fighter to the world in late December,
releasing photos and film footage to
its state-run media and holding a press
conference.
Public knowledge of the aircraft
to date has been sketchy, and China’s
decision to publicise it now may be
a move towards finding more export
customers for the fighter – in addition
to Pakistan, which is already practically
committed to acquiring the type.
The J-10 marks a new level of
sophistication in Chinese fighter
design, giving the country a product
that could meet higher-end advanced
combat aircraft requirements, while
the FC-1/JF-17 Thunder, developed in
partnership with Pakistan, is marketed
towards lower-end customers.
The J-10 is built by Chengdu Aircraft
Industrial (CAIC), which is part of
the China Aviation Industry I (AVIC
I) group. The aircraft flew for the first
time in March 1998, two years behind
its original schedule, powered by the
indigenously built WS-10 engine.
The engine was later replaced in the
J-10A by the Russian-made LyulkaSaturn AL-31FN, after the original
powerplant failed to deliver adequate
performance.
Based on the fact that China ordered
an initial 54 engines from Russia, it
is believed that at least 50 J-10s are
now in service, although no reliable
figures are available. However, China
ordered another 100 AL-31FNs in July
2005, meaning that the number may
be greater – reportedly as high as 72
single- and two-seat variants.
Redesign needed
The engine replacement necessitated
a redesign of the aircraft, delaying the
development programme again, and
the first J-10A production aircraft flew
in June 2002. The flight was followed
by the delivery of a batch of aircraft to
the Central Flight Test Establishment
for test and evaluation.
The J-10A was then at the end of
2003, and initial deliveries were made
in 2004 to the 44th Air Division of the
People’s Liberation Army Air Force
(PLAAF), based in Yunnan province.
The air force’s 3rd Air Division is now
also operating the aircraft.
The two-seat, tandem J-10B,
designed for training and operational
conversion, first flew in December
2004, obtaining certification at the
end of 2005.
CAIC is understood to produce
about two aircraft per month, and
there is speculation that a second
production line may open to meet the
needs of the PLAAF and potentially
the Chinese navy’s aviation arm. China
is now restoring the Soviet Varyag
aircraft carrier to operational service
in Dalian, raising the possibility of a
requirement for a carrier-capable J10 – although the navy is believed to
favour the Sukhoi Su-33 instead.
Even then, the J-10 is seen as a
potential replacement for the navy’s
older land-based fighters such as the
J-7 and J-8.
While details of the aircraft’s
performance are still unknown, the
J-10 is commonly believed to be the
equivalent of a Lockheed Martin F16C/D Fighting Falcon in its Block
40 or Block 50 configuration. Whether
this is true will only be known once the
Pakistan Air Force takes the aircraft
and operates it alongside its F-16s.
Performance estimates
Such information as is available,
based on the AL-31FN’s dry thrust of
79.43kN – or 122.58kN with reheat –
suggests a maximum speed at sea level
of Mach 1.18, rising to Mach 2.34 in
a clean configuration at high altitude.
With three drop-tanks and four PL8 air-to-air missiles the fighter’s top
speed at altitude is probably Mach
2, while its combat radius in this
configuration is 1,100km.
The combat radius drops to 900km
with a single drop-tank, four PL-12
beyond-visual range missiles and two
PL-8 missiles. The J-10A/B is fitted
with an air-to-air refuelling probe.
While the aircraft was initially
intended mainly for air combat,
its air-to-ground capabilities are
increasingly being stressed. At
the January press conference,
a J-10A model was displayed with
targeting and navigation pods, while
pictures of conventional bomb releases
were also shown.
Other weapons the aircraft can
carry are believed to include the Lei
Ting or LT-2 laser-guided bomb and
the Lei Shi 500kg stand-off weapon,
which has combined satellite and
inertial guidance. Other groundattack weapons will also probably be
integrated into the aircraft in time.
The standard air-to-air weapons are
the PL-8 short-range missile, a Chinese
design based on Israel’s Rafael Python
3, and the medium-range PL-12. The
latter weapon has a range exceeding
70km and features a Russian seeker
and Ukrainian flight-control system
with a Chinese motor.
The J-10A’s radar is a mechanically
scanned array, reportedly capable of
tracking four to six targets at ranges
of 100km. It is believed that an active
electronically-scanned array radar is
now under development as a potential
replacement for the current sensor.
Other potential upgrades for the
aircraft include the development of
a two-seat strike variant called the J10S, which would offer capabilities
similar to Israeli or Singaporean F16Ds. Meanwhile, Lyulka-Saturn
has also developed a thrust-vector
controlled version of the AL-31FN
engine, in which China is believed to
have expressed an interest.
Business Aviation Review
Airbus delivered a VIP-configured A340-600 to SAAD Air in December.
Middle Eastern business aviation outpaces China market
The market for business jets in the Middle East is booming,
dominated by Saudi Arabia, while China is still failing to live
up to its promise, writes Andrzej Jeziorski.
The first two months of 2007 see two
major – and contrasting – business
aviation conferences timed closely
together in regions of great interest
to the global industry.
The Middle East Business Aviation
(MEBA) conference, in Dubai, will
showcase a region where booming
trade and oil revenues have already
created a surge in demand for small
and mid-sized business jets. The
subsequent Asian Business Aviation
Conference & Exhibition (ABACE),
in Hong Kong, may come off as lowerkey by comparison, as forecasts of
booming aircraft demand in the AsiaPacific region have remained largely
unfulfilled to date.
China is the world’s most populous
nation and has the world’s fastestgrowing major economy. It is
attracting investment from a large
number of international corporations
and the number of wealthy individuals
is growing apace. Logic would
dictate that this should translate into
corresponding growth in the sale and
use of business aircraft – but this has
not yet happened.
Industry officials admit that there
has been no significant increase in the
number of business jets in China over
the past few years, despite market
estimates of demand for between
500 and 2,000 aircraft. For now, the
actual number, including government
and charter aircraft, remains at a
meagre 26.
A prominent recent example of the
market failing to live up to its promise
was in the collapse last March – amid
heavy losses – of Shandong Airlines’
Rainbow Jet business jet charter
subsidiary, acquired by the airline
in 2001.
The company had purchased two
Bombardier Challenger 604 business
jets in anticipation of a surge in
demand, and ended up selling them
to customers outside Asia. In fact,
Rainbow’s original order had been for
four of the aircraft, but the company
converted two of the orders into
CRJ700 regional jets once it became
clear that demand for VIP charters
was not living up to expectations.
Charter survivors
The failure of Rainbow has left
three charter operators in business
in China, the largest of these being
Hainan Airlines’ Deer Jet unit.
Deer Jet operates a fleet of four
Hawker 800 aircraft, one Gulfstream
GIV, a G200 and a Beechcraft
Premier I. Among the other two
operators, Shanghai Airlines Business
Jet flies one Hawker 800 and Air
China Business Jet has a GIV and a
Bombardier Learjet 45XR.
Up to now in China, growth has
been held back in part by local
regulations prohibiting companies
from operating their own aircraft.
Other factors holding the industry
back are the country’s underdeveloped
infrastructure and restrictions in the
country’s airspace, which is largely
controlled by the military.
Only about a third of China’s 300
current airfields are open to business
jets – compare this with the US,
where the aircraft can operate to about
5,500. At the same time, the country’s
airports lack essential facilities.
In the whole country, there is only
one fixed-base operation (FBO)
providing essential ground services
– at Shanghai’s Hongqiao airport,
with another under construction in
Beijing. The US has 4,500.
Unfortunately, the situation is
perpetuated by the circular argument
that investment in FBOs is only
justified if there are enough business
jets, while the number of business
jets is unlikely to increase
significantly without the infrastructure
available. The only solution, industry
executives say, is to expand both at
the same time.
Airport investment
More airports are being built, with
the General Administration of Civil
Aviation of China (CAAC) planning
to invest almost US$18 billion to
construct eight facilities a year up to
2010.
Still, a further problem remains
– the fact that much of China’s
airspace is under military control,
requiring flight plans with sevendays’ notice for permission to land
from overseas operators, making
last-minute changes of itinerary
impossible. Locally based operators
have an easier time of things, but they
remain in the minority of business
aircraft flying into China.
High import taxes remain a block
to those considering buying aircraft,
with overseas-made business jets
incurring a 22 percent charge.
Meanwhile, foreign-registered
aircraft face overflight and landing
fees as much as eight times higher
than their local counterparts.
Still, manufacturers such as Cessna
remain upbeat, saying they are selling
enough aircraft in the market to
stick with it, and pointing out that
China’s new generation of decisionmakers is more favourably inclined to
business aviation. Embraer, too, has
expressed confidence that things will
get better.
“We believe the operating
environment is improving and
enabling the expansion of business
Business Aviation Review
aviation in China,” says Guan
Dongyuan, Embraer’s director of
executive jet sales in the country.
Luis Carlos Affonso, the Brazilian
manufacturer’s senior vice-president
of executive aviation, has also painted
a positive picture of the broader Asian
market.
“We see great potential for the
business jet market in China, AsiaPacific and the Indian subcontinent
in light of the relatively small fleet in
the region compared to its GDP,” he
says. Embraer predicts 250 business
jet deliveries in the region over the
next 10 years, with an average annual
growth rate of 9.1 percent and a market
value of US$3.8 billion by 2015.
million by 2012 – double its current
level – as people increasingly turn
to ‘aviation on demand’ for privacy,
safety and corporate efficiency,”
Al Naqbi says. “Business aviation’s
share of the region’s overall aviation
market will grow during the same
period from its current 20 percent to
40 percent.”
The sector’s current growth rate is
about 11 percent per annum, he adds.
MEBA has attracted some 80
exhibitors from 18 countries,
with about 30 aircraft on display.
Companies attending include Airbus,
Bombardier, Boeing Business Jets,
Cessna, Embraer, Gulfstream and
Dassault.
The Middle East accounts for a quarter of all Boeing’s BBJ sales.
Middle-East shines
Bombardier, Raytheon
But whatever the potential in the
Asia-Pacific, it has been undeniably
outshone by the recent boom in the
Middle East, where there has been a
notable shift away from customised
widebody VIP aircraft, exclusively for
the super-rich. With a surge in trade
and oil revenues, wealth has become
less concentrated and demand for
corporate air travel has increased
dramatically.
The number of business aircraft
in the region – not including the 68
or so in full-time military service –
totals 295, with 146 of them in Saudi
Arabia, according to the data service
Acas. That’s more than six times as
many business jets in Saudi Arabia
alone as in the whole of China.
Arrivals in the region over the
past year have included types such
as Bombardier’s Challenger 300
and Learjet 45XR, Cessna’s Citation
Bravo, XLS and Sovereign, Dassault’s
Falcon 2000EX, Embraer’s Legacy
and Gulfstream’s G550.
Ali Al Naqbi, Chairman of the
Middle East Business Aviation
Association (MEBAA), has said
the region’s booming market will
continue to grow apace.
“Business Aviation in the Middle
East will be worth around US$800
Bombardier says it will use the
MEBA conference as a showcase for
its business-jet range and to highlight
its Skyjet International unit’s global
charter services.
“MEBA gives us an exciting new
forum to highlight our commitment
to the Middle East as we continue
to expand our presence in Dubai,”
says Bob Horner, the manufacturer’s
vice-president of sales for Europe,
the Middle East and Africa.
Bombardier has established firm
roots in Dubai since 1995, when the
company set up its regional sales
headquarters for the Middle East and
Africa. Since then, the company has
expanded its presence through the
addition of a Skyjet regional office,
in February 2005, and an Authorised
Service Facility and parts depot, which
began operations in December 2005.
The Canadian company says 47
of its business jets are now based
in the Middle East and the IndoPakistan subcontinent. It adds that
the Challenger 600 leads the region’s
large business jet market with a 48
percent share, while Skyjet boasts
the largest charter fleet in the Middle
East.
Raytheon Aircraft says it will also
be prominent at both conferences – as
Raytheon Aircraft will be displaying its Hawker 850XP at both MEBA and ABACE.
well as at the subsequent AeroIndia
show in Bangalore in February –
displaying a Hawker 850XP, a Hawker
400XP, a Beechcraft Premier IA and a
Beechcraft King Air 350 aircraft.
Both the Hawker and Beechcraft
brands have strong market share in
each of the regions, says Ted Farid,
the manufacturer’s vice-president of
international sales.
“International recognition and
acceptance of business aircraft,
as well as robust international
economies, have combined to boost
general aviation sales around the
globe,” Farid says. “ The company’s
percent of international sales to total
sales nearly doubled between 2004
and 2005, increasing from 16 to 25
percent, and Hawker and Beechcraft
international deliveries increased 89
percent year-over-year.”
He adds that the Raytheon’s goal is
to bring international aircraft deliveries
closer to 50 percent of the total.
VIP jetliners
Canada’s Bombardier has had roots in Dubai since 1995.
The region’s market for mid-size
and larger business jets continues to
be dominated by Gulfstream, which
holds a 50 percent market share and
has 49 of its GV and G550 aircraft
operating in the Middle East. In the
large-cabin market, Bombardier with
its Challenger 604 and Dassault with
the Falcon 2000 have the edge.
Boeing dominates the Middle
Eastern business jet market with
74 aircraft operating in the region.
Aircraft in service there range from
Boeing Business Jets’ BBJ, based
on the single-aisle 737 twinjet, to
corporate versions of the four-engine
747 airliner and 777 widebody twin.
The Middle East is Boeing’s largest
BBJ market outside North America,
accounting for a quarter of all BBJ
sales, while about 75 percent of the
region’s widebody VIP aircraft are
Boeing models.
For Airbus, the region accounts
for about 30 percent of sales of the
company’s Airbus Corporate Jetliner
(ACJ) – the European manufacturer’s
competitor to the BBJ, of which more
than a dozen are operational in the
Middle East. Widebody VIP sales are
also picking up for Airbus, with the
delivery in December of a VIP A340600 to Saudi Arabia’s SAAD Air.
The aircraft will be configured for
80 passengers, and will join a fleet
that already includes an Airbus A320
Prestige jet. According to Airbus,
SAAD is “in negotiations to double
its fleet in the near future”.
A Middle Eastern operator is also
reportedly going to become the first
customer for the VIP version of
Airbus’s A380 very-large airliner.
● MEBA 2007 runs from 31
January – 1 February at the Dubai
Airport Expo Centre.
● ABACE 2007 runs from 6-7
February at the AsiaWorld Expo
centre, adjacent to Hong Kong
International Airport.
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Executive Interview
The Citation Mustang is the latest member of the world’s most popular business jet family.
Cessna’s Pelton looks to future aircraft models
This year US general-aviation manufacturer Cessna celebrates 80 years of manufacturing
light aircraft and business jets. Ian Goold interviews chairman Jack Pelton about the
company’s latest models and future projects.
After 80 years of manufacturing
aircraft, Cessna refuses to rest on
its laurels. Instead, the company
is preparing for new generations
of aircraft – including private,
recreational, and executive-jet
designs.
In eight decades, Cessna has
produced more than 187,000 aircraft,
comprising 43 single-engine piston
models, 18 twin-engine designs,
and 19 business jet variants. The
total is equivalent to more than half
the number of aircraft flying today,
company Chairman, Chief Executive
and President Jack Pelton says in an
interview.
In addition to piston and turboprop
aircraft, Cessna this year aims to
deliver some 370 business jets,
including 40 new Citation Mustang
very light jets (VLJs). The Mustang
is the latest addition to the Citation
range, which, at 4,500-plus units
to date, is the world’s most popular
business jet family.
In 2006, which also saw the 50th
anniversary of the ubiquitous Model
172 and 182 piston-props, Cessna
celebrated assembly of the 7,000th
“piston single” at its factory in
Independence, Kansas, which opened
for production 10 years earlier.
Last October, just nine months after
the first metal was cut, Cessna flew
its concept for entry into Light Sport
Aircraft (LSA) market, an emerging
segment defined by a maximum gross
weight of 1,320lb, top level-flight
speed of 120kt, and no more than two
seats. The proof-of-concept aircraft is
as close as possible to the expected
final version, Pelton says.
The mainly aluminium LSA concept
aircraft sports a high wing with a 30ft
span, side-by-side seating for two in
a 48in-wide cockpit, tricycle landing
gear, and a 100hp Rotax 912 engine.
Composite material is used in the
cowl, wing, and dorsal fin.
‘Attractive design’
Cessna has a clear idea of the required
performance, with “pre-defined
characteristics locked in”, according to
Pelton. He says the “attractive design”
will sell for under $100,000, at which
price the manufacturer will still make
a profit.
“We wouldn’t do it if it was of no
value to us,” Pelton says, adding that a
decision on whether to go ahead with
the programme is expected before the
end of March.
A major driver for Cessna is the
hope that student pilots learning to fly
the LSA will become life-long Cessna
owners. “Experience shows that brand
loyalty is a powerful force, and we
believe [the LSA] could provide a
conduit for new pilots to grow through
the Cessna product line,” says Pelton.
The company is continuing to study
sales and distribution alternatives and
manufacturing options. “The business
case is looking promising, and the
responses we’ve received from current
and potential customers has been
overwhelmingly favourable,” he says.
“Our Cessna Pilot Center flightschools say this would be a good fit
for their needs,” the company chief
says. “The more we evaluate the
market potential, the stronger our
conviction is that [the LSA] could be
a favourable step.”
Cessna has also now flown its Next
Generation Piston (NGP) proof-ofconcept aircraft, expecting to decide
on a go-ahead by mid-2007. If the
high-wing project proceeds, Pelton
estimates an 18-month certification
schedule.
“Aerodynamically, the design is
very clean,” he says. “Stability and
control are both very good. This family
would be a great addition to our lineup, offering speed and performance
beyond our Model 182. We’ve had
lots of customer input, asking for
improved performance, [and] better
ergonomics and comfort.”
The manufacturer wants the NGP
to be easier to build in large numbers
than current types that are “very
complex, with many parts and lots of
labour. The next generation should
have [fewer] parts [and be] designed
for manufacture.” Pelton says an NGP
family remains to be defined, but it is
“not just an idea floating around: all
our programmes have a dated review
process”.
Turboprops, jets
Pelton is more cautious about
turboprop market opportunities,
saying that any development will be
designed around existing powerplants,
since no new engines are available. He
argues that small turboprop singles,
such as the EADS Socata TBM850,
are “really quite expensive, when
one can go straight to a [Citation]
Mustang”. Cessna cannot see how
to produce a small turboprop “at
the price it needs to be” to compete,
he says.
Regarding future business jets,
Pelton says that – with existing
customers accounting for 65-70
percent of new sales – the main market
potential is “where [Citation] XLS,
X, and Sovereign customers want
to go”. Cessna is “always exploring
[opportunities] to go up-market,”
although it will not address the ultralong range segment “until we have
filled the gap [at shorter ranges]”.
Jack Pelton, Cessna’s
chairman, president
and chief executive.
Cessna has already developed a
concept for a bigger business jet and
is talking with Citation customers
about preferred range and speed
characteristics. “Our concept is in its
infancy, but many customers would
like [to see] a larger, longer-range
jet,” Pelton says.
Configured for nine passengers
and two pilots, the large-cabin
design includes a flat floor with a
walk-in baggage compartment and
large refreshment area. Cessna hasn’t
specified avionics or engines, and a
go-ahead decision isn’t expected
before the end of 2007.
Meanwhile, the company continues
developing existing products. In
December, Cessna received US
type certification for its Citation
Encore+, which offers a 340lbhigher payload than its predecessor,
the Encore, along with new avionics,
more standard equipment, and new
interior styling. This development
followed the award of full clearance
for the Citation Mustang to be flown
into known icing. European Mustang
type certification is expected ahead of
initial deliveries to that region before
October 2007.
Pelton says the manufacturer
is committed to building its new
customer base through training.
“More people have learned to fly
in Cessnas than in any other aircraft,”
he says. “We are devoted to flight
education, safety and efficiency,
and we will embrace these aspects
in every way as we proceed into the
future.”
Airbus in China
Chengdu Aircraft, which supplies
rear passenger doors and nose-section
parts, and Shenyang Aircraft, which
produces and assembles emergencyexit doors and makes fixed leading
edges, wing inter-spar ribs, cargo
doors, and skin plates.
Xi’an Aircraft produces electronicbay doors for both the A320 and
A330/A340 families, fixed trailing
edges for the A320 wing, and A330/
A340 brake parts and air ducts. Hong
Yuan Aviation Forging & Casting
produces titanium forgings used
as engine mounts, while Guizhou
Aviation Industrial Group fabricates
maintenance jigs and tools.
China Eastern remains Airbus’s biggest customer in the country.
Technology transfer
Airbus strengthens ties with China
Airbus’s plans to set up an A320 final assembly line in Tianjin and its intention to procure
parts for the A350XWB jetliner from China are the latest efforts by the European aircraft
maker to strengthen its presence in the world’s fastest-growing major economy. Ian
Goold writes that these moves are the culmination of 20 years of industrial co-operation
with the country, where Airbus has now sold more than 600 aircraft.
Airbus has been steadily expanding
business in China since 1985,
increasing the number of its aircraft
delivered to the mainland, Hong
Kong and Macau to about 270 now
from just 29 in 1995.
Overall, the manufacturer has
received orders from 17 Chinese
customers covering almost 640
aircraft. Including machines obtained
from other sources, just over 400
Airbus models are operated in the
fast-expanding market.
In 2005, Airbus was buying about
US$15 million worth of Chinesemade parts – a figure that is expected
to grow to US$60 million this year,
before doubling to $120 million by
2010.
In terms of industrial co-operation
with China, Airbus has shown
commitment to technology transfer
– not least through its proposal for
an A320 assembly line in Tianjin – as
well as to increasing procurement,
research and development. The
manufacturer’s local business entity,
Airbus China, opened a Beijing office
in 1990 and now employs around
260 people, 80 percent of whom are
Chinese nationals.
Airbus China is headed by
Laurence Barron, who was appointed
President in January 2004 and holds
responsibility for Airbus’ overall
activities in the country, including
business development, commercial
activities, customer services,
and industrial co-operation. The
manufacturer also has a string of local
customer-support offices in Chengdu,
Fuzhou, Gansu, Nanjing, Qingdao,
and Shanghai to assist airlines.
Shanghai-based China Eastern
Airlines, then operating as CAAC,
became the first Chinese carrier to
operate Airbus aircraft in 1985 and
remains the country’s biggest Airbus
customer, with a fleet of 112 aircraft
as of the beginning of this year.
Among
other
operators,
Guangzhou’s China Southern Airlines
operates more than 100 aircraft,
while national flag-carrier Air China
has received 35 out of 79 on order.
Chengdu-based Sichuan Airlines
operates a fleet of 25, and Hong
Kong’s Cathay Pacific Airways and
its Dragonair unit operate a total of
77 Airbus jetliners.
Huge potential
Airbus says it sees “huge” future
potential for its products in the
region.
“By 2020, some 100 million
Chinese tourists will be travelling
internationally,” Airbus says.
“Chinese airlines therefore expect to
be transporting at least four times their
current levels of passengers, creating
a growing demand for aircraft.”
The manufacturer is aiming to
maintain a 50 percent market share
in the country.
Following a 1996 agreement,
Airbus set up a Beijing training and
customer-support centre in a US$80million joint venture with China
Aviation Suppliers Import & Export
Corporation (CASGC), whose
business covers leasing, maintenance,
and consignment of aircraft, engines,
aviation parts and equipment. Since
1980, CASGC has imported over 800
airliners.
Described as China’s most modern
such facility, the training centre has
two full-motion flight simulators for
A320-family and A330/A340-series
crew training. The adjacent customersupport centre holds some 25,000
spare parts worth $22 million and
available for dispatch to airlines all
over the Asia/Pacific region. More
than 20 European and US equipment
vendors share the centre, which also
has an avionics repair workshop.
The facility, which provides
10,000 hours of crew-transition and
recurrent training annually, occupies
some 13,000 square metres. Since
receiving an initial group of trainee
pilots in October 1997, it has trained
some 12,000 staff for more than
30 carriers. About a third of these
trainees came from outside China,
according to Airbus.
The manufacturer says that
over half the 4,350 aircraft in the
worldwide Airbus fleet contain
Chinese-made parts. Contractors
on the A320 programme include
Airbus is keen to establish additional
industrial partnerships, pointing out
that its smallest product – the A318
– was its first new design to have been
developed with the help of a team of
Chinese engineers. Also, the specially
commissioned roll-on/roll-off ship
used to ferry large A380 components
was built at the Jinling shipyard.
In addition, several major Airbus
technology-transfer programmes
are now underway in China. These
include a joint venture to manufacture
complete A320-series wings in
the country and another that will
employ up to 200 Chinese engineers
at the planned Airbus engineering
centre by 2008.
“The success of such projects means
that, as Airbus increases production, it
can continue to expand in the region,”
the company says.
In late 2002, Airbus extended
agreements first signed in 1999 with
Xi’an Aircraft and Shenyang Aircraft
covering small A320 wing subassemblies. Since 2005, the companies
have respectively been delivering
leading- and trailing-edge assemblies
as part of these expanded deals.
Work at Chengdu Aircraft includes
the manufacture of 600 sets of cockpit
floor sections. Chengdu, Shenyang
and Xi’an are all part of the stateowned China Aviation Industry I
(AVIC I) industrial enterprise, one of
two such aerospace groups.
While China encourages overseas
investment in its aerospace and
aviation industries, it has strict
rules limiting the degree of outside
influence. In 2002, the General
Administration of Civil Aviation of
China (CAAC), Ministry of Foreign
Trade and Economic Co-operation,
and the State Development Planning
Commission issued regulations for
foreign investment covering three
goals: to continue opening the civilaviation industry, promote industry
reform and development and protect
industry investors’ rights and
interests. Under these rules, overseas
ownership is limited to 49 percent, or
25 percent where two foreign entities
are involved.
Airbus in China
Asked in 2004 about Airbus’s
further aspirations for co-operation
with China, then-chief executive Noel
Forgeard looked ahead to upcoming
developments and partnership
opportunities.
Significant partnership
“I would like to take Chinese industry
on board the A350 at a significant
level,” Forgeard said. “My ultimate
goal is that Chinese industry becomes
a risk- and revenue-sharing partner
for the next new Airbus programme
[after the A350].”
Forgeard wanted to see Chinese
industry accorded the kind of status
that Japanese aerospace companies
were being given for participation
in the Boeing 787 programme, a
process that would require increased
technology transfer. “I am a great
believer in China, and geo-politically
it’s what Airbus has to do,” he said.
Airbus remains interested in
partnerships in Japan, but faces a
tough challenge in getting past the
strong relations many of the country
firms have with Boeing.
“We shall also invest in Japan, but
we will never be able to erase the
legacy of Boeing and the remarkable
work it has done there. In China
we start on an equal footprint, and
everything is possible,” Forgeard
said.
Since then, Airbus has begun to
realise its aspirations through an
agreement struck two years ago
with AVIC I and II. This covered
the establishment of a joint-venture
engineering centre by mid-2005 in
Beijing’s Tianzhu Airport Industrial
Zone, adjacent to the Airbus China
offices and intended to carry out
specific design work for the A350,
in which China had been offered a 5percent share covering components
on a first-tier supplier risk-sharing
basis.
“We believe that Chinese engineers
will be able to make significant
contributions to the design of
[future] aircraft,” says Airbus. “The
engineering centre will enable China
to increase substantially the number
of world-class aircraft engineers.”
Design responsibility
As a risk-sharing partner in a future
new Airbus project, in which its
work share would be increased to
at least 10 percent, China could
take complete responsibility for a
part of a programme, from design
to manufacturing, including the
corresponding investment and profit
sharing.
The move to set up the engineering
centre was followed by agreement
with AVIC I to enhance the A320
wing-box co-operation programme.
The initial US$70 million contract,
signed in April 2005, covers assembly
of a first batch of wing boxes and
corresponding tooling.
“We are looking forward to
enlarging the scope and improving
the levels of our cooperation,” says
AVIC I executive vice-president
Yang Yuzhong. Airbus has affirmed
its determination “to substantially
increase its industrial cooperation
with China”.
A320 wing co-operation dates back
to 1999, when a first-phase agreement
with AVIC I covered transfer of
manufacturing technologies and wing
assemblies to China. Three years
later, a second agreement permitted
Xi’an Aircraft and Shenyang Aircraft
to produce fixed trailing and leading
edges. The first leading edges were
delivered in September 2004, followed
six months later by the initial batch
of trailing edges. Some 30 Airbus
engineers went to Xi’an Aircraft and
Shenyang Aircraft to help ramp up
production.
Speaking at the European UnionChina Aviation Summit in Beijing
in mid-2005, Barron provided
the Airbus view of China’s future
place in the industry and within the
manufacturer’s order book.
“Over the next 20 years, China will
become the second-largest aviation
market in the world,” he said. “The
number of aircraft delivered to
China per year will count for over 10
percent of annual Airbus deliveries
worldwide.”
Barron underlined the country’s
rapid growth in recent years. “From
2000 to 2004, China’s total aviation
traffic has grown at an average rate of
The agreement on an A320-family assembly line in Tianjin came together with an order for 150 of
the aircraft for six Chinese airlines.
Airbus chief Louis Gallois says the plan
for a Chinese assembly line is mainly
aimed at improving market access.
16.7 percent,” he pointed out. “Airbus
forecasts it will deliver nearly 1,800
aircraft to China over the next 20
years, [equivalent to] an average of
90 aircraft delivered per year.”
According to Airbus forecasts,
China will need at least 200 large
aircraft like the A380. China Southern
Airlines, which has ordered five
A380s, has become the country’s first
customer for this size of jetliner.
Tianjin assembly line
Two decades after their first tentative
steps together, the Chinese and
European partners took a major step
forward at the end of 2005 when the
National Development & Reform
Commission of China (NDRC)
and Airbus signed a memorandum
of understanding on further cooperation. The agreement aims to
enhance the existing partnership
and, crucially, foreshadowed the
establishment of a final assembly line
for the A320 family in China.
Simultaneously, Airbus established
a general terms agreement with
CASGC for the purchase of 150
single-aisle aircraft. With a total value
close to $10 billion, the order covers a
mix of A319s, A320s, and A321s and
constitutes the largest single order
Airbus has received from China.
The 150 aircraft are to be operated
by six carriers: Air China, China
Eastern Airlines, China Southern
Airlines, Hainan Airlines, Shenzhen
Airlines, and Sichuan Airlines.
“Since it was introduced into the
Chinese market in 1995, the A320
family has [entered service with]
10 operators [flying] 216 aircraft,
accounting for two-thirds of all inservice [A320s], or nearly a quarter
of the aircraft in operation in China,”
says CASGC president Li Hai.
Handing over the first A330-300 to
China Eastern Airlines in Shanghai in
January 2006, former Airbus president
Gustav Humbert revealed studies
under way to select a suitable site for
A320 final assembly, from among
locations that included Shanghai,
Tianjin, Xi’an, and Zhuhai. Airbus
and CASGC formally extended
their training and support-centre
co-operation agreement for a further
20 years on its tenth anniversary in
April 2006.
Six months later, Airbus signed
a framework agreement covering
establishment of A320-family final
assembly line in Tianjin Binhai,
under a joint venture with the
Tianjin Zhongtian Aviation Industry
Investment group.
This local consortium comprises:
Tianjin Free Trade Zone Investment,
which will hold a 60 percent stake in
the group; AVIC I, with 20 percent;
and two AVIC II member companies
– Jiangxi Hongdu Aviation Industry,
based in Nanjing, and Hafei Aviation
Industry, located in Harbin, each
of which will hold 10 percent. The
business is to have registered capital
of almost US$40 million.
The division of equity in the
assembly venture between Airbus and
the Chinese consortium hasn’t been
officially revealed, although some
reports both in China and overseas
have said the European company may
take as much as 51 percent.
Tianjin already hosts Stork
Aerospace’s Fokker Elmo subsidiary,
as well as BHA Aero Composite
Parts – a joint venture among Boeing,
carbon-fibre producer Hexcel and
AVIC I. It also is home to the Civil
Aviation University of China.
Local assembly of up to four A320s
a month will be a major step for China,
which this year is scheduled to begin
delivering A320 wing boxes. Airbus
China’s Barron has said that “ideally”
wings for Tianjin-assembled A320s
would be manufactured in-country.
Airbus’s current Chief Executive
Louis Gallois has denied that the
move is a way of obtaining low-cost
labour to enhance A320 marketing.
“The assembly line we envisage
creating in China [is] above all
related to market access, rather than
economic reasons,” he says.
CAPA Analysis
Of the country’s ‘Big Three’ carriers, China Eastern has been suffering the biggest losses, despite strong sales growth.
Paradoxes hamper China’s aviation growth
The Chinese airline sector is likely to continue to see strong growth in traffic and revenue in
2007. But a number of apparent contradictions are preventing the country’s airlines from
translating that growth into profitability, writes the Centre for Asia-Pacific Aviation.
China’s airports handled about
300 million passengers in 2006, an
impressive 17 percent gain on 2005,
while cargo volume was set to smash
through the 10 million tonne barrier,
also registering double-digit growth.
The outlook for the next few
years is equally positive, with 14.5
percent and 14 percent annual growth
respectively in the passenger and
freight segments until 2010 as the
Chinese economy continues to grow
strongly, averaging 10 percent per
annum. China has been surging up the
global aviation rankings according to
traffic, taking the second spot behind
the huge US market in 2005, in terms
of revenue passenger kilometres.
However, all is not as rosy as it
would seem, as the industry faces
several paradoxes that are limiting
profitability and threatening to prevent
Chinese aviation from attaining its full
potential. These paradoxes dominate
the industry outlook for 2007.
Firstly, despite impressive growth
in sales and demand, China’s
airlines remain largely unprofitable.
Furthermore China Eastern Airlines,
the financially weakest of China’s
‘Big Three’ carriers, is based in the
country’s most economically dynamic
city – Shanghai.
The domestic industry has gone
through various consolidations and
mergers – yet these have in some
cases created diseconomies of scale,
with major increases in cost bases
post-merger. At the same time, new
airline entry is occurring, despite
continued central controls over basic
aspects of the airline model, including
pricing.
Another apparent contradiction is
that China, the world’s most populous
country and home to 1.3 billion
people, faces a worsening skilled
labour shortage, with a lack of pilots,
managers, maintenance and other
personnel.
Other paradoxes exist, such as the
country having a burgeoning freight
market, but few dedicated freighters
in the domestic fleet to service the
demand. In practice, this is being
overcome by the establishment of
joint-venture freight carriers by
foreign investors with local partners.
The foreign investors are infusing
capital, capacity and management
know-how in the sector, deregulated
under China’s commitments to the
World Trade Organisation.
Growth versus profitability
Most of China’s major airlines,
with the exception of Air China, are
expected to report losses for the full
year 2006, in the wake of combined
first-half losses of over US$300
million. This bleak outlook comes
despite a better third quarter for
many, as fuel surcharges introduced
earlier in the year flowed through to
revenues.
China Eastern, for example,
bounced back from a devastating
first-half loss, to record a US$62
million profit in the third quarter.
But the result was aided by a US$14
million government subsidy to offset
high fuel costs – and the carrier
still predicts a loss for the full year,
despite very strong revenue growth
and easing fuel prices.
China Southern’s US$164 million
third-quarter profit was aided by the
stronger yuan and a US$4 million
subsidy in the period, but the carrier
declined to give a full-year earnings
forecast.
More tellingly, Chinese carriers
are not making profits even though
they are in the relatively privileged
position of operating in a protected –
and recently consolidated – domestic
market.
India presents an interesting
contrast. The South Asian country
also has a rapidly growing domestic
market, with pressure on yields
leading to losses by most carriers. But,
by contrast, the Indian experience is
the result of domestic liberalisation,
which has led to a fragmented market
where new entrants are competing
with incumbents primarily on price.
So the question remains: when will
growth equal profits?
The question is not just important
for investors, but also for the Chinese
Government itself, which is investing
heavily in more aircraft and capacity.
China leads the world in aircraft
orders, with another firm commitment
for 150 Airbus A320s agreed with the
European manufacturer in October
last year.
China Eastern struggles
Shanghai is a key example in this
paradox. The economic powerhouse is
a key destination in China, being both
a manufacturing and business base.
However, of the “Big Three” airlines,
China Eastern, with its primary
domestic and international bases in
Shanghai, continues to struggle to
convert strong market fundamentals
into profits.
In the first half of 2006, the carrier
reported a 56 percent year-onyear increase in revenue, but also
a three-fold increase in its net loss.
Meanwhile, Shanghai’s airports
have reported world-class earnings
margins.
China Eastern’s inability to convert
its favourable strategic location in
China’s fastest-growing economic
region, the Yangtze River Delta,
also represents one of the biggest
opportunities in global aviation.
Shanghai’s two airports handled over
40 million passengers in 2005, and
have experienced tremendous growth
since 1999, when the total was about
15 million.
In April last year, China Eastern
announced its intention to sell a
minimum 20 percent shareholding to
a foreign carrier, subject to regulatory
approvals. Its then-president, since
replaced, confirmed the airline has
been conducting discussions with
CAPA Analysis
three or four carriers about a possible
strategic investment.
Ongoing talks, seeking to raise up
to US$500 million through the sale,
have included Singapore Airlines, but
have reportedly had little success.
More competition is now on the
way for China Eastern, following
the ‘Deal of the Decade’, which
strengthened equity and business
ties between Air China and Hong
Kong’s Cathay Pacific Airways. The
mutual increase in shareholdings
simultaneously granted Cathay
Pacific vastly increased access to
mainland China, including the Hong
Kong-Shanghai route – one of China
Eastern’s most profitable services.
The Shanghai-based carrier’s
6 percent operating margins on
“regional” routes to Hong Kong and
Macau in 2005 were underpinned by
relatively high yields between Hong
Kong and Shanghai.
China’s burgeoning air freight market is increasingly being served by joint ventures such as
Jade Cargo, a partnership of Shenzhen Airlines with Lufthansa Cargo and a German bank.
Ownership questions
Questions regarding the future of
China Eastern continue, stirred up
by a recent proposal by Beijing to
transfer control of the loss-making
airline to the Shanghai Municipal
Government in exchange for control
over the Shanghai Yangshan deepwater port. There was speculation
that the transfer, which was rejected,
could potentially have resulted in a
merger between China Eastern and
Shanghai Airlines, the successful
carrier established by the Municipal
Government in the 1980s.
Solving the carrier’s ownership
issue and restoring profitability will be
the main – and possibly linked – tasks
for the carrier’s new President Cao
Jianxiong, appointed in mid-2006, if
he is to ensure the Shanghai-China
Eastern paradox does not endure.
Extensive consolidation and
mergers in the Chinese airline
industry have led to a worrying
cycle of losses that increase, the
larger airlines become, exacerbated
by the high fuel-price environment,
particularly in China Eastern’s case.
China Eastern’s labour costs more
than doubled in the first half of last
year, while fuel costs also rose by
about 86 percent. Air China and China
Southern, which have progressed
further in their integration of local
partners, still reported sizeable labour
cost increases of 18 percent and 11
percent, respectively. Sharp focus
must be applied to rationalising
duplicated resources in their domestic
systems in the months ahead.
Several new private airlines have
entered the Chinese market in the
past 18 months, despite basic controls
over the airline business still retained
by Beijing. The central controls over
pricing, distribution, fuel, airport
charges and aircraft purchases offer
little room for airlines to differentiate.
Even so, the market’s growth potential
is so powerful that investors continue
to enter.
In December 2005, the General
Administration of Civil Aviation
of China (CAAC) stated it was
considering further deregulation
of fares in 2006, following the
introduction of guidelines on price
floors and ceilings in 2005. The
CAAC considered eliminating the
existing 45 percent discount limit on
fare pricing, although airlines would
still be able to increase fares by up to
25 percent above guideline prices.
Jet fuel prices were also to be more
market-driven and would be set within
a range, rather than determined by the
Government. However, movement on
these issues – which are crucial for
start-up carriers – has been limited
this year.
Until the CAAC pulls back from
its influence over the structure and
operation of the airline sector, China’s
new entrants will struggle to gain a
toehold. Much of the innovation and
change wrought in aviation markets
overseas is attributable to new
entrants significantly changing the
dynamics of the market.
But with private carriers struggling
to gain even a cumulative 5 percent
share of the market, the road ahead
looks difficult.
Skills shortage
It is hard to imagine a skills shortage
affecting a country of 1.3 billion
people, but in China, there is a
particularly acute lack of suitable
candidates for flight crew, managerial
and executive roles. And the situation
could get worse before it improves.
The CAAC estimates 11,000
additional pilots are required by 2010,
Air China is the only one of the country’s ‘Big Three’ airlines not expecting a full-year loss for 2006.
and another 18,000 by 2015.
The high-level growth of China and
India will continue to drive substantial
demand for airline employees and
apply pressure to training and
regulatory structures across the AsiaPacific and Middle East in 2007.
The number of aircraft awaiting
delivery to carriers in the region has
risen by 54 percent to 1,554 in the
past 12 months. Of these, 41 percent
are destined for new entrants and
existing airlines in China and India,
and a further 12.5 percent for the
Middle East.
With most of the current fleet
additions due to enter service between
now and 2012, the aviation labour
pool will struggle to keep pace with
requirements, especially in highlyskilled areas such as flight crew and
maintenance. This looming scarcity
is likely to see pilot wages increase
and apply pressure to other manpower
costs, which will, in turn, make
it progressively more difficult for
operators to maintain cost controls.
The impact is already being felt
in countries where the demand is
greatest, leading China’s CAAC and
India to relax regulations on the use
of foreign pilots.
The International Civil Aviation
Organisation (ICAO) has adopted a
new worldwide standard moving the
mandatory retirement ages for pilots
from 60 to 65, subject to two yearly
medical exams and the second pilot
on board being below the age of 60.
While the US, France and a number
of other countries are opposing this
move, it has the potential to relieve
pilot shortages.
Poaching has also become a
problem, particularly in China and
South-East Asia where new entrants
are taking pilots from incumbent
carriers.
The CAAC, for example, has
brought into effect a regulation that
allows pilots to transfer from one
airline to another only if agreement is
reached between the carriers and a fee
is paid, with the amount varying from
CAPA Analysis
Table 1: First-half 2006 financial highlights for China’s ‘Big Three’ (figures in millions of yuan, followed by year-on-year percentage change where applicable)
China Southern
20,604 (+15.5%)
20,847 (+14.2%)
-243|
-784
China Eastern
17,119 (+59.2%)
18,383 (+69.2%)
-1,264
-1,843
1st Half 2006
% Change
% of Total Costs
19,038
7,064
1,670
950
37,492
+22.5%
+39.5%
+18.1%
n/a
+12.8%
37.1%
8.8%
5.0%
CHINA SOUTHERN
Total costs
Fuel costs
Labour costs
Aircraft*
Capacity#
20,847
7,080
898
950
45,390
+14.2%
+27.6%
+11.2%
n/a
+8.7%
34.0%
4.3%
5.0%
CHINA EASTERN
Total costs
Fuel costs
Labour costs
Aircraft*
Capacity#
18,383
6,176
1,561
950
33,590
+69.2%
+85.8%
+108.7%
n/a
+60.6%
33.6%
8.5%
5.0%
Revenue
Expenses
Operating profit
Net profit
Air China
19,931 (+17.7%)
19,038 (+22.5%)
893 (-36.1%)
478 (-25.6%)
Table 2: First-half 2006, key costs and capacity growth (costs in millions of yuan)
Carrier
AIR CHINA
Total costs
Fuel costs
Labour costs
Aircraft*
Capacity#
* Aircraft and engine operating lease expenses, excluding depreciation. # Capacity in millions of available seat kilometres.
Shanghai Airlines also suffered a first-half loss last year, even as airports in
China’s eastern business hub posted strong profit margins
about US$85,000 to US$255,0000,
depending on the seniority of the
pilot.
As a consequence, a number
of Chinese airlines are turning to
foreign pilots. Recent hirings have
involved captains and first officers
from Europe, South America, Taiwan,
Hong Kong and Australia.
Manpower needs
CAPA has calculated estimates of
manpower needs in Asia and the
Middle East, based on known aircraft
orders as of November 2006, using
accepted industry multiples for
each of the major employee areas –
pilots, cabin crew, ground handling,
maintenance, sales and management.
It has been assumed that 30 percent of
the new aircraft will be replacements
for older types being withdrawn from
service.
The outcome of the analysis
suggests a need for 154,000
employees across the region over the
next five to seven years, including
10,200 pilots, 36,400 cabin crew,
26,800 maintenance engineers and
38,500 ground handlers. A similar
exercise undertaken a year ago
indicated potential demand for
130,000 employees.
The 23 percent increase reflects
the escalation of new orders,
particularly for narrowbody aircraft,
which comprises some 57 percent
of outstanding orders. Two-thirds of
these aircraft – mostly Boeing 737s
and Airbus A320s – will be taken by
carriers in China and India. This is
consistent with the rapid growth of
domestic and regional operations in
the two countries.
China and India together account for
48 percent of the pilot requirements
for the Asia-Pacific and Middle East
region. The Middle East, headed by
Emirates, Qatar Airways and Etihad,
has the next-highest requirement,
with 15 percent of the total, followed
by other countries in North Asia,
excluding China, with 12 percent
– mostly concentrated in Japan – and
South-East Asia with 11 percent.
With about a dozen new operators
pursuing applications or primed to
enter the Chinese aviation market,
and the existing three major groups
building capacity and services,
the CAPA estimates are probably
conservative for China and the region
as a whole. We have also not taken
into account attrition and retirement
rates of existing pilots, which could
run at about 5 percent per annum,
significantly increasing demand for
replacements.
Training shortfall
Other recent estimates suggested
that China’s present 11,000-strong
workforce of pilots may need to be
doubled in the next five years. Boeing
has predicted that 55,000 pilots could
be required in the country by 2020.
Whatever the outcome, it is clear
that the CAAC does not have the
training capability to meet national
requirements, even with a planned
expansion in pilot training schools.
This presents a considerable
opportunity for third-party training
operators both in China and other
countries confronted with crew
shortages.
The pool of available commercial
pilots globally now stands at about
125,000. Boeing’s Alteon Training
subsidiary forecasts demand for
about 17,100 pilots a year worldwide
over the next 20 years. The company’s
assessment is that 5,721 pilots per
annum will be needed by Asia, China,
the Middle East, Africa and Oceania
over that period.
Given the lead time required to
train pilots, this suggests a continuing
strong market for pilots and other
skilled aviation personnel outside the
US, where some 15,000 pilots are still
on furlough and can be brought back
into the workforce as required.
With shortages and consequent
likely pressure on wage levels, some
airlines will need to reassess their
options for expansion. For example,
it may be more feasible for airlines to
develop alliances, outsource or even
consolidate through mergers, rather
than pursue acquisition-led fleet
growth, with the inevitable labourrelated problems that approach brings.
Advances in technology and training
systems may also help in easing the
growing pains.
Overall, China’s aviation industry
displays excellent growth rates but
also suffers from clear structural
inefficiencies that hamper earnings.
Rigid controls remain on the
sector, which is fresh from a major
consolidation exercise at the start of
the decade, while high fuel prices
have buffeted the industry over the
past 18 months.
This year, 2007, will be a year of
further strong traffic and revenue
growth, possibly as high as 1520 percent, as China’s economy
continues to surge. But margins
will be low, or negative for many
players, particularly if fuel prices
stay high. This may force some
further rationalisation, particularly
in the fledgling new entrant sector,
while China Southern and China
Eastern will look for foreign partners
to provide fresh capital and strategic
guidance to raise their international
competitiveness.
The Centre for Asia Pacific Aviation
(CAPA) is a Sydney-based aviation
consultancy and partner of Asian
Aviation. The above article is adapted
from CAPA’s “Monthly Essential
China” newsletter.
Training & Simulation
Boeing’s Alteon unit opens Singapore training centre
Boeing’s Alteon Training unit
officially opened its Singapore
Training Centre on 18 January, in a
ceremony attended by Singapore’s
Minister for Trade and Industry Lim
Hng Kiang.
The new facility features seven
full-flight simulator (FFS) bays and
has opened with four simulators
already installed: one Boeing 777200/300; a Boeing 737-300/400/500;
an Airbus A320; and a Fokker 100.
A Boeing 737-800 is scheduled for
installation in mid-2007 and a 787
simulator is due to arrive in the first
quarter of 2008.
The centre is also equipped with a
cabin emergency evacuation trainer
and other devices such as flat-panel
trainers (FPT).
“We are very excited to celebrate
the opening of the newest addition
to our global network of training
centres,” said Alteon President
Sherry Carbary. “The Singapore
centre greatly expands our capability
to meet the increasing demands for
aviation training in the region.”
Carbary added the company “looks
forward to working closely alongside
the Singapore aviation industry”.
Trainee pilots, maintenance
and flight attendants at the centre
will use workstations equipped
with self-guided, computer-based
training software, allowing students
to progress at their own pace.
The facility has six classrooms, a
computer-based training room and a
student lounge.
Located near Singapore’s Changi
International Airport, the Alteon
training centre is capable of training
more than 6,000 pilot crews per year,
as well as maintenance and cabin
crew.
Alteon is a wholly owned
subsidiary of Boeing and offers more
than 80 FFSs in over 20 locations
worldwide.
Rockwell to provide image
generation for JSF training
CAE will supply Jet Airways with a full-flight simulator for its new Airbus A330-200 twinjets.
Jet Airways, Air India order
additional flight simulators
Indian carriers Jet Airways and Air
India have ordered new simulators for
their training facilities, as the carriers
try to keep pace with the country’s
booming aviation market.
Jet has placed an order with
Canada’s CAE for an Airbus A330/340
convertible full-flight simulator (FFS)
and a Boeing 777ER FFS, along with a
Simfinity Maintenance Flight Training
Device for the Airbus A330/340 and
a Simfinity Integrated Procedures
Trainer for the 777ER.
The equipment will be delivered
to Jet Airways’ training centre in
Mumbai, India, in the third quarter of
this year. The airline already has two
CAE-built Boeing 737NG simulators
in operation at the Mumbai centre.
Privately owned Jet Airways is due
to start taking delivery of 100 new
777-300ER and 10 A330 widebody
twinjets from April.
“As part of our expansion plans,
The Singapore centre has opened with four full-flight simulators, including one for Boeing 737s.
we are preparing for the induction
of the new wide-bodied aircraft into
our fleet, scheduled to commence in
April 2007,” says Jet Airways Chief
Executive Officer Wolfgang ProckSchauer. “These new simulators will
enable us to provide high-quality pilot
training as we introduce the Boeing
777-300ER aircraft to our fleet and
expand our A330 fleet.”
Meanwhile, Alteon is supplying
Air India with a Boeing 737 fullflight simulator. The training services
provider was scheduled to install and
certificate the simulator at the carrier’s
Mumbai training centre by the end of
January.
Alteon is already supplying the
carrier with 777 and 787 simulators
and training equipment, with the 777
simulator to be delivered in November.
Alteon has a US$75 million partnership
agreement with Air India to develop
the carrier’s Mumbai training facility.
Lockheed Martin has chosen
Rockwell Collins to provide imagegeneration systems for the F-35
Lightning Joint Strike Fighter (JSF)
pilot-training devices.
Under the new contract, Rockwell
Collins will supply two image
generator configurations -- one for an
F-35 full-mission simulator and one
for a deployable mission rehearsal
trainer. The manufacturer will also
supply database generation tools and
a database preview station based on
EPX technology, which Rockwell
inherited through its acquisition of
Evans & Sutherland’s visual systems
business last year.
EPX is designed to deliver
flexibility, responsiveness and
performance for the most demanding
military training requirements, says
Rockwell. EPX software runs on a
variety of hardware offering a range
of prices and capabilities, allowing
customers to select the right platform
for their training requirements.
Briefs
CAE HAS launched the Tropos-600 series image generator, its latest
high performance image generator for the commercial market. It uses
the latest off-the-shelf graphics hardware, new liquid crystal on silicon
projector technology and graphics processors supplied by ATI. The
image generator is available in three versions – the Tropos-6400, for
Level D training; the Tropos-6200, for full-flight simulators and flight
training devices not requiring Level D certification; and the Tropos6100, for laptop or desktop applications.
ALTEON TRAINING, a wholly owned Boeing subsidiary, has
appointed William McMeekin as director of Operations at the
company’s training centers in Japan and Korea. McMeekin was
formerly Boeing’s director of operations and international relations
in Seoul, Korea, and will continue to be based in the city. In his new
capacity, McMeekin reports to Keith Williams, regional vice-president
for Alteon, Asia Pacific.
CAE HAS appointed Lou Nemeth to the position of vice-president of
training delivery and standards for its commercial aviation training
business. Nemeth is responsible for recruiting and training CAE’s
instructors around the world. He joins CAE from US Airways where he
was a line pilot, pilot training manager and courseware developer.
Business
Air India-Indian merger to proceed by April
India’s two state-owned carriers, Air
India and Indian Airlines, will merge
by the beginning of April, government
ministers have said.
The merger will make the
carriers more competitive, boosting
profitability without job losses, Civil
Aviation Minister Praful Patel said
after meeting employees of the two
carriers.
The combined entity will enhance
its profitability by over 6 billion
rupees (US$136 million) a year, or 4
percent of current revenue, Patel says
in a statement. Network integration
will add 4.1 billion rupees in revenue,
while an equal benefit will come from
“cost and capital synergies driven by
The two airlines have dozens of orders
outstanding for Boeing and Airbus jetliners.
consolidation and better negotiating
power,” the statement says.
“Everybody feels the process of
merger is appropriate,” Patel says.
The minister has been campaigning
for the merger for more than a year,
arguing that the process will increase
the companies’ long-term value
and make them more attractive to
global airline alliances. There are
suggestions that an initial public
offering may follow.
Thai Airways says it has no plan to delist shares
Thai Airways International president
Apinan Sumanesani says the airline
has no plans to buy back its foreignheld shares and eventually delist the
carrier from the Stock Exchange of
Thailand (SET).
Apinan was responding to remarks
by the chairman of the National
Legislative Assembly’s Committee
on Suvarnabhumi Airport, Admiral
Bannawit Kengrian. Bannawit said
that the airline should be wholly
Thai-owned and no longer needs
to be listed on SET, to regain the
confidence and pride of the Thai
people and to support growth.
“Delisting Thai Airways is easier
said than done,” Apinan says. “It
would be a costly exercise, as the
carrier would have to fork out 20
billion baht (U$526.3 million) to buy
back shares from foreign investors.”
Thai Airways is 70 percent owned by
the government through the Ministry
of Finance. Foreign investors hold 21
percent of the company, while the
remaining 9 percent is owned by the
airline’s employees and other Thai
individuals.
Apinan believes that the
government wouldn’t want to acquire
the 21 percent held by foreigners, as
this would have a significant effect
on SET.
Foreign ownership in Thai Airways
is capped at 30 percent. None of the
“A combined Air India and Indian
Airlines has the potential to be a
powerful global carrier, provided the
merger can be completed quickly,”
says Kapil Kaul, chief executive for
India and Middle East of the Centre
for Asia Pacific Aviation.
Mumbai-based Air India serves
international destinations with a
widebody fleet and runs a lowcost unit, Air India Express. Indian
Airlines is primarily a domestic
carrier operating a fleet of mostly
narrowbody aircraft.
The airlines have a combined fleet
exceeding 110 aircraft with dozens
of orders still outstanding. Air India
announced an order for 68 Boeing
aircraft last January, while Indian
Airlines ordered 43 Airbus A320family aircraft.
foreign shareholders represent any
overseas airline.
The idea to reacquire the 21
percent from foreigners had been
under discussion for more than a
year. The government took four years
before it reduced its shareholding
in the carrier by 20 percent, to 70
percent, in October 2004.
Thai Airways posted a profit of
8.99 billion baht for the year ended
30 September, up 33 percent on the
previous business year.
Dennis William / Bangkok
Technology
Airbus flight tests laserbased turbulence sensor
Airbus has started flight-testing a
new forward-looking turbulence
sensor on an A340-300 quadjet.
Tests of the new “gust sensor”
began towards the end of last year.
The device uses ultra-violet light
detection and range (LIDAR) devices
to measure air movements ahead
of the aircraft and detect clear-sky
turbulence.
For the A340 test programme, the
LIDAR is housed in an aerodynamic
fairing attached to the underside
of the fuselage, although future
developments of the system will
probably see it installed in the nose
radome of the aircraft, as the size of
the laser and electronic components
are reduced.
The system emits bursts of singlefrequency ultra-violet light 50-150m
ahead of the aircraft, measuring the
Airbus is testing the new sensor on a four-engined A340-300 jetliner.
Doppler shift of light reflected from
particles in the air. An onboard
interferometer and processing
system determines the level of
turbulence from lateral, vertical and
longitudinal air speeds.
SMS secures regional deal with Embraer
Australian technology company
Structural Monitoring Systems (SMS)
has finalised a three-year deal with the
Brazilian Government that will see
its Comparative Vacuum Monitoring
(CVM) system used by regional
aircraft manufacturer Embraer on its
future aircraft.
Under the agreement the
government has approved funding for
the development and qualification of
an in-flight CVM system by Brazil’s
University of Uberlandia, for use by
Embraer.
CVM detects and monitors
structural integrity through the use
of an inert sensor attached to the
aircraft or embedded in the fuselage,
a vacuum source to apply and
control a low vacuum, and a fluid-
flow measuring device. The sensor
can detect cracks shorter than 1mm
in metal surfaces, measuring their
propagation and monitoring bonded
surfaces and joints.
SMS will provide CVM
instrumentation, sensors and
consultancy services. The programme
will be worth US$890,000 to
SMS, with the f irst year of
The project is being led by Airbus
and EADS’ Corporate Research
centre as part of the European
Aircraft Wing with Advanced
Technology Operation (AWIATOR)
project.
funding totalling US$223,500.
This is the first deal in the regional
aircraft market for the Perth-based
company, which already has contracts
with Airbus and Boeing.
CVM was used to test materials
being used in the Airbus A380 and
SMS is now developing a system
that will be incorporated in all-new
Airbus aircraft. In addition, SMS has
a commercial licence agreement with
Boeing that will see CVM used by
Boeing aircraft operators.
Qantas 737 makes first
GBAS landing at Sydney
Apple moves into IFE with
iPod integration on aircraft
A Qantas Boeing 737-800 twinjet
flying from Brisbane to Sydney late
last year became the first commercial
flight to land at Sydney airport using
Airservices Australia’s experimental
Ground-Based Augmentation System
(GBAS).
Airservices Australia is developing
the GBAS with partner Honeywell,
after the companies formed an
alliance last year to develop and
commercialise satellite-based landing
systems. A fully certificated GBAS is
expected to be available in two years,
according to the partners.
Honeywell and Airservices are also
developing a Ground-based Regional
Apple Computers has moved into
the in-flight entertainment (IFE)
world with a partnership with six
major airlines to provide seamless
integration between the iPod personal
music and video player with IFE
systems.
From the middle of this year, the
six carriers – Air France, Continental
Airlines, Delta Air Lines, Emirates,
Augmentation System (GRAS),
intended to provide coverage for
small, commercial and general
aviation aircraft. GRAS and GBAS
combined are expected to provide a
gate-to-gate landing system for all
aircraft types.
The Qantas 737 landed on Sydney’s
runway 16 left, using Cat-1 GBAS
instead of the airport’s instrument
landing system. Approval for the
landing followed an 18-month project
involving Airservices, Qantas, Sydney
Airport, Honeywell and Boeing.
Nine of the airline’s 737-800s
are approved to use the GPS-based
landing system for trial purposes.
Thales wins wireless IFE
deals for Chinese 787s
Thales has recently won a number of
competitions to supply wireless inflight entertainment (IFE) systems for
Chinese Boeing 787 customers.
Air China, Hainan Airlines and
Shanghai Airlines have all recently
confirmed that they have selected the
Thales i-8000 interactive IFE system
over the competing Panasonic Avionics
X-Series Wireless, which is also being
offered on the 787.
Air China has selected the i-8000 for
its 15 787s, Hainan Airlines will have
eight 787s equipped, while Shanghai
Airlines will have the system fitted
on nine 787s, all of which are due for
delivery in 2008.
The i-8000 will deliver audio
and video on-demand at every seat
of the aircraft, in addition to flight
information and in-seat laptop power.
Thales has a new repair centre in
Beijing, which supports avionics and
IFE product lines.
Boeing has insisted on a wireless
IFE solution for the 787, and both the
i-8000 and the X-Series Wireless are
now undergoing rigorous laboratory
testing ahead of installation on the
third 787 test aircraft later this year.
KLM and United Airlines – plan to
offer seat connections which power
and charge passengers’ iPods during
flight and allow stored video content
to be viewed on the aircraft’s seatback
displays.
Apple says it is also working with
Panasonic Avionics to offer iPod
connectivity to customers of its IFE
system.
Briefs
CATHAY PACIFIC Airways has become the first commercial airline customer
for ARINC’s Iridium service. The airline has committed to an Iridium-based
voice telephone solution for its freighter fleet. ARINC will install the service
on seven Boeing 747-200 freighters using avionics and antennas from the
International Communications Group in Xiamen, China.
THAI AVIATION Industries (TAI) has awarded Rockwell Collins a contract
to upgrade the Royal Thai Air Force’s fleet of six Lockheed Martin C-130
Hercules transport aircraft with an integrated communications, navigation
and surveillance / air traffic management system (CNS/ATM). The solution
will be based on Rockwell’s Flight2 avionics, which include an Ethernetbased integrated processing centre with flight-management capabilities,
large-format multifunction liquid crystal displays and multi-mode receiver.
Also included are Rockwell’s TCAS II Traffic Alert and Collision Avoidance
System, weather radar, autopilot, and SATCOM, HF and V/UHF radios.
The upgrade will give the RTAF aircraft unrestricted access to civil airspace,
by providing required navigation performance compliance and automatic
dependent surveillance-broadcast (ADS-B) capability.
CHINA’S SICHUAN Airlines has selected Rockwell Collins avionics and
in-flight entertainment systems for 12 Airbus A319, A320 and A321 aircraft
it has on order, with 10 options. Deliveries are scheduled to start in June.
The deal includes the Programmable Audio Video Entertainment System
(PAVES), WXR-2100 MultiScan Hazard Detection System, ADF-900
Automatic Direction Finder, DME-900 Distance Measuring Equipment and
HFS-900D High Frequency System.
Airports & ATM
Hong Kong AA completes
Hangzhou airport purchase
Hong Kong Airport Authority (AA)
completed its purchase of a 35
percent stake in China’s Xiaoshan
International Airport in Hangzhou
late last year in a 1.99 billion yuan
deal. The stake was bought from the
provincial government in the east of
the country.
A new joint venture company
has been established to operate the
airport, says the government-owned
AA, which operates Hong Kong
International Airport. The company
plans to expand and upgrade
Hangzhou Xiaoshan International
Airport, making it into a “world-class
airport”.
The airport now has annual capacity
for 8 million passengers and 200,000t
of freight. The expansion and
upgrade programme is intended
to boost capacity to 25.6 million
passengers and 500,000t of freight.
The work will include a 6.8 billion
yuan (US$869 million) second-phase
expansion of the airport, including the
construction of a new international
passenger terminal, a second domestic
terminal and another runway.
The programme is due for completion
in 2011.
Meanwhile, the AA is also
launching engineering and
environmental feasibility studies
on the addition of a third runway at
the Hong Kong airport in an effort
to cope with rising traffic levels.
The feasibility studies are part of
the airport’s 20-year development
plan. Last year the airport handled
40.7 million passengers and 264,000
aircraft movements.
The airport’s original master plan
was based on 87 million passengers
and 380,000 aircraft movements
annually by 2040.
Hong Kong’s Airport Authority is studying the construction of a third runway.
“Over the past decade, demand has
increased dramatically and the mix of
aircraft has changed,” the authority
says. “As a hub airport, HKIA
now serves a significant volume of
transfer/transit traffic and a growing
number of small aircraft.”
Emma Kelly / Perth
Australia, Indonesia make new progress on ADS-B
Australia has taken a step closer to the
operational introduction of automatic
dependent surveillance – broadcast
(ADS-B) technology, with the release
by the Civil Aviation Safety Authority
(CASA) of a Notice of Proposed
Rulemaking (NPRM) covering the
carriage and use of the equipment.
At the same time, Indonesia has
launched a trial of the system as it
considers nationwide implementation.
Airservices Australia is establishing
28 ADS-B ground stations throughout
Australia, to provide an ADS-B
surveillance service above flightlevel 300, as part of its upper airspace
programme (UAP). The UAP, using
a Mode-S extended squitter datalink,
was launched in June when the first
ground stations came on line.
CASA says technical and
operational standards are now needed
to support the widespread use of ADSB. The technology offers “considerable
economic and safety benefits”, but the
costs and benefits will depend on the
type of aircraft, number of aircraft,
type of operations and locations, the
authority adds.
“The benefits will accrue as more
aircraft are fitted with the avionics
equipment,” CASA says.
The UAP is based on the voluntary
installation of ADS-B avionics.
Australia was considering mandatory
ADS-B equipage if a decision was
made on extending the programme
below FL300, but a decision on that
was deferred last year as some parts of
the aviation industry and government
needed more time to consider the
costs, timeframe and implementation
issues.
Meanwhile, Indonesia launched
its trial of ADS-B late last year. The
trial is being conducted with the help
of Airservices Australia, SITA and
Thales, and is a result of a partnership
between Airservices and SITA, aimed
at implementing ADS-B in the AsiaPacific region.
Three Thales-supplied ADS-B
ground stations have been established:
at Denpasar in Bali; Kupang in Nusa
Thales forms ATC joint venture in China
Thales and China-based technology
company Civil Aviation Air Traffic
Control Technology Equipment
Development (TEDC) have formed
an air traffic control joint venture in
Beijing.
The new joint venture, 60 percentowned by TEDC and 40 percent by
the Thales Group, will develop, sell
and maintain air traffic control (ATC)
centres using Thales technology,
predominantly in China.
TEDC was established in 1998 by
the Air Traffic Management Bureau
(ATMB) of the Civil Aviation
Administration of China (CAAC) and
seven local air traffic authorities. The
company provides operational and
technology support for China’s ATC
system, employing over 300 people
around the country.
The joint venture follows
considerable ATC work conducted by
Thales in the country. The company
was responsible for the NESACC
programme, which involved the
expansion and modernization of
ATC systems in Beijing, Shanghai
and Guangzhou. It also supplied its
EUROCAT air traffic management
technology to the centres, along
with primary and secondary
radars, navigation aids and training
services.
Thales has further strengthened its
Asia-Pacific air traffic management
business with the award of a contract
to supply of a fully integrated ATM
system to Taiwan’s Air Navigation
and Weather Services of the Civil
Aeronautics Administration.
Thales will provide its EUROCAT
system for two integrated en-route
and approach ATC centres, along
with simulation capabilities, software
development and controller positions
in 11 ATC towers. The contract
includes a fully integrated aeronautical
information service system and
a digital voice communication
switching system.
The ATM system is expected to
improve air traffic flow and reduce
flight congestion. It will include
ADS-B capability, air traffic flow
management and an air-ground
datalink.
Tenggara Timur; and Natuna Island in
the South China Sea.
SITA communication links and
surveillance processors link the ground
stations to Indonesia’s air traffic control
centres in Jakarta and Makassar.
Airservices is providing project and
technical support along with remote
monitoring for the programme.
ADS-B is considered to be a
cost-effective surveillance tool for
Indonesia, which controls a large
area of airspace, with heavy traffic
flows. Indonesia will evaluate the
technology during the trial and will
then make a decision on nationwide
implementation.
Emma Kelly / Perth
Briefs
INDIA’S GOVERNMENT has
opened a new terminal at
Pathankot Airport in the north of
the country as part of a national
airport upgrade programme.
The new terminal has a capacity
for 300 passengers and apron
space for three Airbus A320type aircraft, according to
the Ministry of Civil Aviation.
Scheduled services have
been launched at the airport
with Air Deccan now serving
Pathankot from Delhi with
ATR 42 turboprops. The Indian
Government is upgrading 35
airports throughout the country
as part of efforts to cope with
rapidly rising air traffic.
General Aviation
Crashed Grob
SPn prototype
lost parts of tail
The Japanese order is the fourth for Q300s in the maritime patrol role.
Japan Coast Guard chooses Bombardier Q300
The Japan Coast Guard has chosen
Bombardier’s Q300 Maritime Patrol
Aircraft (MPA) as its next-generation
patrol and surveillance aircraft.
The Coast Guard’s prime
contractor, Sojitz, will acquire the
three turboprop aircraft, which will
be modified by Toronto-based Field
Aviation, which will install the
surveillance equipment.
The order marks the fourth contract
for Q300s in the maritime patrol role,
Bombardier says in a statement. In
March last year, National Air Support
ordered three of the turboprops
to supplement five Q200s in the
Surveillance Australia Coastwatch
programme.
Sweden’s Coast Guard later
chose three of the aircraft for the
surveillance role, while in 2005 the
Japan Civil Aviation Bureau selected
the aircraft for low- and mediumaltitude navigation-aid inspection and
calibration.
“More and more operators around
the world are recognising the merits
of the Canadian-designed and built
Q-Series aircraft for non-airline
missions,” says Derek Gilmour,
NetJets signs US$500 mln
of new orders for Hawker
750, 900XP busness jets
Raytheon Aircraft has signed orders
valued at more than US$500 million
with NetJets and NetJets Europe
for the purchase of 48 additional
Hawker aircraft for the companies’
European and US operations.
Combined with NetJets’ order
for 48 aircraft announced at last
October’s National Business Aviation
Association (NBAA) convention,
the orders are now worth more than
US$1 billion.
Deliveries of Hawker 900XP
aircraft under the initial order will
begin in 2007 and continue through
2009, while deliveries under the
follow-on order will run from 2009
to 2012. The October order for
Hawker 750s envisaged deliveries
between 2008 and 2009, while the
follow-on batch will now arrive in
2010 and 2011.
Both aircraft types, launched at
the NBAA convention, are derived
from the Hawker 800-series
airframe. The Hawker 750 is a light
mid-size business jet offering a
2,100 nautical mile range with four
passengers, suited for the European
market.
The Hawker 900XP is the launch
platform for Honeywell’s TFE73150R engine, offering improved hotand-high performance. The midsize aircraft offers a range of more
than 2,800 nautical miles with six
passengers, making it capable of
flying from New York to Honolulu
in a one-stop flight.
NetJets offers fractional ownership
and aircraft charters around the
world. The company has operating
companies in the US, Europe and the
Middle East.
Bombardier’s vice-president for
specialised aircraft solutions.
A total of 39 Q-Series aircraft are
operating in, or have been ordered by,
operators in Japan. Last September,
Bombardier announced plans to
establish a spares depot in the country
to provide support for Bombardier
business and regional aircraft
customers. The facility is scheduled
to open this year and will be located
near Tokyo’s Narita international
airport.
More than 700 Q-Series aircraft are
in service worldwide today.
Grob Aerospace has confirmed that
both elevators and the left stabiliser
of the second prototype SPn light
jet separated from the aircraft
before it crashed on 29 November,
killing Chief Test Pilot Gerard
Guillaumaud.
The accident happened while the
aircraft was lining up for a highspeed pass over the company’s
airfield at Tussenhausen-Mattsies,
southern Germany. The reason for
the separation of the control surfaces
remains unknown.
The manufacturer has stated that it
had fitted longer stabilisers and larger
ailerons to the second prototype
aircraft to improve performance
in icing conditions, but these
modifications had not yet been tested
through the whole flight envelope. In
the meantime, flight testing has been
suspended, although construction of
a third prototype and two production
aircraft is continuing.
Grob said in December that
it remains committed to the
programme, but confirmed that the
crash has delayed the certification
programme, with European approval
now expected late in the first quarter
of 2008 instead of the third quarter
of 2007.
Briefs
DUBAI-BASED Eastern Skyjets has leased a 29-seat Jetstream 41
turboprop from BAE Systems Regional Aircraft. The Jetstream – the
first of its kind in the Middle East – will be used as a corporate shuttle
on routes to high-risk areas such as Iraq and elsewhere in the region,
as well as for charters and feeder services. Eastern Skyjets plans
to quadruple its Jetstream 41 fleet by the end of this year, including
the addition of a 14-seat VIP transport version. The company is also
understood to be considering starting an air taxi service using very
light jets.
GLOBAL VECTRA Helicorp, an Indian helicopter charter company
recently took delivery of four new Bell 412 helicopters and says it is
on track with plans to expand its fleet by more than half to 29 aircraft
by 2009. The company has reported increasing quarterly profit and a
gain of 57 percent in operating income, which it attributes to increased
demand for air transportation from the oil and gas industries. “The oil
and gas air logistics industry is a huge market and we have tapped
it at the right time,” says Ravinder Rishi, chairman of Global Vectra’s
parent Vectra Group.
BANGALORE-BASED Hindustan Aeronautics (HAL) has entered into
a partnership with Gulfstream to supply component packages for the
G150 mid-size business jet, including parts of the rear fuselage. HAL
has agreed to supply 25 packages, or the equivalent of about a year’s
production. This tie-up is seen as an attempt by HAL to increase its
civil aviation business as part of its plan to triple revenue to US$3
billion by 2011. At the moment, civil aerospace accounts for barely
10 percent of the company’s business.
Late News
Adacel wins ATC simulator contract from Airservices
Adacel has won a A$5.25 million
(US$4.09 million) contract from
Airservices Australia to provide and
support control tower simulators to
train the country’s next generation of
air traffic controllers.
The simulators will be installed
at the Airservices College at
Tullamarine, boosting the efficiency
and effectiveness of controller
training by using a full-immersion
simulator and mini-simulators.
Under the contract, Adacel will
provide a MaxSim tower simulator
with a 360-degree field of view
and three MiniMax 240-degree view
systems. The contract also includes
a warranty with support for four
years.
Adacel says its simulators help
trainees to develop their skills
faster “through concentrated
coverage of required capabilities
in a non-operational environment”,
cutting the time required in
operational control centres.
Airservices will also use the
simulators to analyse and evaluate
operational procedures, modelling
airf ields, tower conf igurations,
aerodrome emergencies and incident
investigations, the manufacturer says.
Qantas in talks on stake in
unidentified Asian airline
Qantas is in an advanced stage of talks
to buy a stake in an Asian airline in a
move to expand its network.
The purchase will involve an
investment of “two-digit millions of
US dollars,” the Australian carrier’s
Chief Financial Officer Peter Gregg
said at the Asia-Pacific Low Cost
Airline conference in Singapore in late
January. The company will not acquire
a majority in the unidentified airline
due to ownership restrictions, but wants
to take a large minority shareholding,
he added.
An announcement on the purchase
will be made within weeks and the
deal would be completed by mid-year,
Gregg said. Qantas has set itself a target
of making Asian regional traffic 15-20
percent of its total in the next ten years.
Some reports have identified the
target airline as Vietnam’s Pacific
Airlines, which has been searching
for an investment partner as part of its
plan to re-launch as a low-cost carrier.
Speaking at the same conference,
Pacific Managing Director Luong Hoai
Nam named the target date for the relaunch as 13 February, adding that the
carrier will be offering fares as cheap
as US$1.
State-owned Pacific, which was a
subsidiary of Vietnam Airlines until
early 2005, will offer international
services to Taipei and Kaohsiung in
Taiwan, as well as domestic flights
to Danang, Hanoi and Ho Chi Minh
City. It plans to have a fleet of about 20
Boeing 737s within five years.
Qantas already holds more than
40 percent of Singapore-based
Jetstar Asia.
CATHAY PACIFIC Airways is adding 11 more weekly freighter flights to
three major European cities starting from 1 February. The extra services
to Amsterdam, Frankfurt and Manchester, increase to 36 the number of
weekly European freighter services operated by the Hong Kong-based
carrier. The additional flights are still subject to government approval,
Cathay says. Five weekly frequencies are being added to Frankfurt,
operating via Dubai, while the remaining six additional flights will all
follow a circular Hong Kong-Dubai-Manchester-Amsterdam-DubaiHong Kong route. Amsterdam is a new freighter destination for Cathay,
which operates a fleet of 17 dedicated cargo aircraft in a mix of Boeing
747-200s, 747-400s and 747-400 Boeing Converted Freighters (BCFs).
Two more BCFs are due for delivery this year, with six long-range 747400ERFs (pictured here) scheduled for delivery starting in May 2008.
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AirAsia orders more Airbus A320s, reveals long

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