IATA Cuts 2010 Loss Forecast in Half – Strong Start to 2010

Geneva – The International Air Transport Association (IATA) halved its loss forecast for 2010 to US$2.8 billion (compared to the US$5.6 billion loss forecast in December 2009). The improvement is largely driven by a much stronger recovery in demand seen by year-end gains that continued into the first months of 2010. Relatively flat capacity translated into some yield improvement and stronger revenues.

IATA also lowered its 2009 loss estimate to US$9.4 billion from the previously forecast US$11.0 billion loss.

Improvements are driven by economic recovery in the emerging markets of Asia-Pacific and Latin America whose carriers posted international passenger demand gains of 6.5% and 11.0% respectively in January. North America and Europe are lagging with international passenger demand gains of 2.1% and 3.1% respectively for the same month.

“We are seeing a definite two-speed industry. Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe which have continuously contracted since mid-2008,” said Giovanni Bisignani, IATA’s Director General and CEO.

Forecast highlights include:

Improving Demand: Passenger demand (which fell by 2.9% in 2009) is expected to grow by 5.6% in 2010. This is an improvement on the previous forecast in December of 4.5% growth.  Cargo demand (which fell by 11.1% in 2009) is expected to grow by 12.0% in 2010. This is significantly better than the previously forecast 7.0% growth.

Load Factors: Airlines kept capacity relatively in line with demand throughout 2009. A strong year-end recovery pushed load factors to record levels when adjusted for seasonality. By January the international passenger load factor was 75.9% while cargo utilization was at 49.6%.

Yields: Tighter supply and demand conditions are expected to see yields improve—2.0% for passenger and 3.1% for cargo. This is a considerable improvement from the precipitous 14% fall experienced by both in 2009.

Premium Travel: Premium travel, while slower to recover than economy travel, now appears to be following a cyclical recovery in volume terms. But it is still 17% below the early 2008 peak. Premium yields, which are 20% below peak, may be suffering a structural shift.

Fuel: With improved economic conditions, the price of fuel is rising. IATA raised its expected average oil price to US$79 per barrel from the previously forecast US$75. That is an increase of US$17 per barrel on the US$62 average price for 2009. The combined impact of increased capacity and a higher fuel price will add US$19 billion to the industry fuel bill bringing it to an expected US$132 billion in 2010. As a percentage of operating costs, this represents 26%, up from 24% in 2009.

Revenues: Revenues will rise to US$522 billion. That is US$44 billion more than previously forecast and a US$43 billion improvement on 2009.

“Revenues are half-way to recovery—US$42 billion below the 2008 peak and US$43 billion above the 2009 trough. Important fundamentals are moving in the right direction. Demand is improving. The industry has been wise in managing capacity. Prices are beginning to align with the costs—premium travel aside. We can be optimistic but with due caution. Important risks remain. Oil is a wild-card, over-capacity is still a danger, and costs must be kept under control—throughout the value chain and with labor,” said Bisignani.

Regional differences in airlines prospects are sharp:

• Asia-Pacific carriers will see the US$2.7 billion 2009 loss turn to US$900 million in profits on the back of a rapid economic recovery being driven by China. Cargo markets are particularly strong with long-haul cargo capacity for shipments originating in Asia experiencing a capacity shortage. Demand is expected to grow by 12% in 2010.
• Latin American carriers will post an US$800 million profit for the second consecutive year. The region’s economies are less debt-burdened than the US or Europe. Economic ties to Asia helped isolate the region from the worst of the financial crisis. Carriers in parts of the region have benefitted from liberalized markets which have facilitated some cross-border consolidation, giving greater flexibility to deal with changing economic conditions. Demand is expected to grow by 12.2% in 2010.
• European carriers will post a US$2.2 billion loss—the largest among the regions. This reflects the slow pace of economic recovery and faltering consumer confidence. Demand is expected to grow by 4.2% in 2010. Intra-European premium travel is expected to recover more slowly. In December it remained 9.7% below previous year levels.
• North American carriers will post the second largest losses at US$1.8 billion. The jobless economic recovery continues to burden consumer confidence. Demand is expected to improve by 6.2% in 2010. But with intra-North America premium travel still down 13.3% as of December, the region remains in the red.
• Middle East carriers are expected to experience demand growth of 15.2% in 2010, but will see losses of US$400 million. Low yields in long-haul markets connected over Middle East hubs is a burden on profitability.
• African carriers are likely to post a US$100 million loss for 2010, halving 2009 losses. Demand is expected to improve by 7.4%. But this will not be sufficient for profitability as they continue to face strong competition for market share.

Structural Adjustments

“The stark contrast between profitability among Asian and Latin American carriers while losses continue to plague the rest of the industry clearly demonstrates the fact that airlines have not been able to develop into global businesses. The restrictions of the bilateral system prevent the kind of cross border consolidation that we have seen in industries such as pharmaceuticals or telecoms. Airlines are battling the challenges of the financial crisis without the benefit of this important tool. It’s time for change,” said Bisignani.

In November 2009, IATA’s Agenda for Freedom initiative facilitated the signing of a multi-lateral statement of policy principles focused on liberalizing market access, pricing and ownership. Seven governments (Chile, Malaysia, Panama, Singapore, Switzerland, the United Arab Emirates and the United States) and the European Commission signed the document. Kuwait joined the group by endorsing the principles in March.

“The second stage talks between the US and Europe are the big opportunity for 2010. The slow recovery in both regions should be an invitation for change. Liberalizing ownership would boost both markets. Even more importantly, as these markets combined represent about 60% of global aviation it would send a strong signal for global change. Brands, not flags, must guide the industry to sustainable profitability. That cannot happen until governments throw away the outdated restrictions of the bilateral system,” said Bisignani.

Initiative results in improved maintenance for B-1 bomber

02/11/2010 - WRIGHT-PATTERSON AIR FORCE BASE, Ohio (AFNS) – As part of the Repair Network Integration initiative, the Band 4-8 receiver, a critical component to the defensive avionics suite aboard the B-1B bomber, was chosen for a live test in order to validate key concepts associated with integrating the repair network.

Repair of the receiver long has been troublesome due to sub-components difficult to keep in stock and due to the fact that repair is spread unevenly across the country.

Historically, the receiver always had hovered around a 15-25 percent Requisition Objective fill rate, which meant that at least one mission capable aircraft was left waiting for this one part. Evaluation of the existing capability and capacity quickly revealed a known constraint to repair production: parts. Availability of shop-replaceable components supplied through contract vendors was found deficient.

By applying the developed core management processes to the receiver’s repair processes, the receiver RO fill rate climbed to over 100 percent within the first 60 days of this test and currently remains at this level.

With the integration and collaboration of network managers with supply chain managers on the repair requirement, ownership of the requirement and workload or production plans to satisfy the requirement, the repair network was able to more proactively respond to this demand, plan resolution to constraints and increase repair production without detrimental effects on other repair nodes.

Contracts currently in place did not allow for flexibility to meet changing demands. Therefore, one key to success was engaging contract vendors and collaborating with them to be more flexible through sharing Air Force requirements on a regular basis, allowing them to meet the requirement.

Once consistent communication and discussion of the requirement vs. production began, the repair contractors took more ownership of and better understood “their” network and its full function.  This was a force multiplier and truly the difference between success and failure of this test.

The success of the 4-8 receiver live test came in many forms, and some were unforeseen. At the outset, many technicians and managers associated with the day-to-day repair of this receiver did not think meeting the actual quarterly requirement would be possible; historically it had never been met. There was a consensus that other critical B-1 electronic warfare components would be pushed into a negative supply posture due to the attention the 4-8 receivers would be receiving. However, that turned out to not be the case.

The repair network manager applied standard core management processes to help resolve low RO percentages and an inability to meet the demand. After seeing the results, repair network managers are furthering efforts to collaborate and adjust contracts to obtain increased sustained production to meet demand without adversely affecting production for other B-1 repair nodes.

Source: USAF
Picture: Rob Vogelaar, ZAP16 Group

Finnish Fighter Jet Crashes in Forest

ATR Aircraft deliveries in 2009

Status 2009

ATR booked orders for 40 new aircraft (see figure 1) and options for 17 aircraft in 2009. Europe and Asia, each with orders for 16 aircraft, represented 80% of the total order intakes of the year. In addition, 50% of the orders of the year were booked for the newest ATR ‘-600 series’ aircraft (2 ATR 42-600 and 18 ATR 72-600).

Since the beginning of the programme, ATR has sold 1,000 new aircraft (418 ATR 42s and 582 ATR 72s). In the last 5 years, ATR has booked net orders for 316 new aircraft, which represents almost a third of the total orders registered by ATR.

ATR’s current portfolio is composed by 150 operators in over 80 countries.

ATR delivered 54 new aircraft in 2009 (see figure 2). As of December 31st 2009, ATR delivered a total of 864 aircraft (409 ATR 42s and 455 ATR 72s).

ATR finished 2009 with a backlog of 136 aircraft, including a total of 59 ATR ‘-600 series’ aircraft. The current backlog represents more than two years of production.

ATR reached a new record in the annual turnover, with US $ 1.4 billion (see figure 3).

In 2009, according to their scheduled development programme, the ATR 72-600 pre-series aircraft started its flight test campaign, while the first ATR 42-600 was powered-on and began its ground tests.

ATR continued in 2009 the reinforcement of its customer support activities and further expanded its presence in Asia with the opening of a new logistic support center in Kuala Lumpur. This new facility enables its operators in the Asia-Pacific region having contracted a Global Maintenance Agreement (GMA) to benefit from increased efficiency and reduced costs. In addition, ATR booked in 2009 new GMAs with 5 operators, covering 41 aircraft. Among these contracts, ATR inked with Spanish carrier Air Nostrum the first GMA for the maintenance of ‘-600 series’ aircraft. Today, 26% of the ATR aircraft in operation –over 200 aircraft- are covered by GMAs.

ATR has a total workforce of 870 employees.

Outlook 2010

ATR plans to consolidate its deliveries over 50 aircraft during 2010, while waiting to get a better overview on the recovery of the economy in order to continue its delivery ramp up. For 2010, ATR points also at the stabilization of its annual turnover, around US $ 1.4 billion. As already done in previous years, ATR will keep on strengthening its activities to assist its clients in order to source the optimal aircraft financing.

According to its development programme, the ATR 72-600 will continue its 150 hours flight test campaign in order to obtain its certification. The ATR 42-600 will start in 2010 its 75 hours flight test campaign, and will benefit from certain tests completed by the ATR 72-600. The production of the first commercial ATR ‘-600s’ will start in 2010, for an entry into service, as planned, in 2011.

In the last five years, turboprops are achieving higher commercial results than jets in the regional market and represented almost 60% of the total orders. The potential for turboprops is high both in growing economies and in regions where turboprops are replacing regional jets or previous turboprop versions. In 2010, ATR focus on consolidating its leading position in the turboprop market, with more than 50% of the total sales.

Concerning the support and services activities, ATR will continue expanding its worldwide support offer in 2010 with the opening of new training facilities, while evaluating further developments of its regional support policy.

AIRLINE	ATR 42-500	ATR 42-600	ATR 72-500	ATR 72-600
Afrijet (Nigeria)			4
Air Algérie			4
Air Nostrum (Spain)				10
Alenia (for Italian Navy)				4
Arkia (Israel)			1
Belle Air (Albania)			1
Golden Air (Sweden)			1
Libyan Airlines	2
Lion Air / Wings Air  (Indonesia)			5
Royal Air Maroc		2		4
Vietnam Airlines			2
TOTAL ORDERS	2 ATR 42-500	2 ATR 42-600	18 ATR 72-500	18 ATR 72-600

AIRLINE	COUNTRY	ATR 42-500	ATR 72-500
Air Austral	Réunion (France)		1
Air Botswana	Botswana		2
Air Caraibes	French Caribbean		1
Air Guyane	French Guyana	1
Air Saint Pierre	Saint Pierre et Miquelon (France)	1
Air Tahiti	French Polynesia		1
Air Vanuatu	Vanuatu		1
Alenia Aeronautica	Italy	1
Arkia	Israel		1
Aurigny Air Services	Channel Islands (United Kingdom)		2
Belle Air	Albania		1
Berjaya Air	Malaysia		2
Buquebus	Uruguay		1
Capitaneria di Porto	Italy	1
Cebu Pacific	Philippines		2
Firefly	Malaysia		2
Finncomm Airlines	Finland		2
Golden Air	Sweden		1
Lao Airlines	Laos		2
Libyan Airlines	Libya	2
Lion Air / Wings Air	Indonesia		3
MASwings	Malaysia		6
NAYSA	Canary Islands (Spain)		2
Precision Air Services	Tanzania		2
Royal Thai Air Force	Thailand		4
Tarom	Romania		2
TRIP	Brazil		2
Vietnam Airlines	Vietnam		5
TOTAL DELIVERIES		6	48

ATR	31/12/05	31/12/06	31/12/07	31/12/08	31/12/09
Turnover(US $ billion)	0.54	0.70	1.10	1.30	1.40

EMBRAER DELIVERS 244 JETS IN 2009

RAF Hercules crews begin supplying troops in Afghanistan with air drops

Crews from RAF Lyneham are reverting to Second World War methods of resupplying troops on the front line in Afghanistan by air drops, helping to reduce the danger posed by roadside bombs.

Traditionally, the forward operating bases (FOBs), where front line British troops are located throughout Helmand province, have been restocked by road as air drops have been notoriously inaccurate.

But now stores, which include essential ration packs, are able to be thrown accurately out of the the back of a moving Hercules, helping to limit the danger to soldiers who resupply by land.

It’s only now a viable option because of the introduction of a new computerised system that works out a precise time and location for the drop to begin.

Group Captain Terry Jones, Commanding Officer of Air Assets at Kandahar, explained the importance of the air drops:

 

“If you drop by road, you put a convoy out for a long period where it’s vulnerable to attack and where the vehicles can run over IEDs [improvised explosive devices] and that puts the people at risk. 

“We can lower the burden on those patrols and reduce them to the minimum by making more use of air drops, where we can drop large numbers of supplies very close to the patrol bases and forward operating bases, precisely where the troops need them.”

Air drops to resupply the front line were used as far back as the Second World War, but historically the vast majority of loads never landed where they should.

For that reason the FOBs in Afghanistan have been restocked by road.

Flight Lieutenant Gareth Burdett, Captain of a Hercules C-130 aircraft dropping the supplies, said:

“The challenges with an air drop in Afghanistan have always been knowing what the wind is doing. Dropping stores in the way that we do is a bit like dropping a feather in a corner of a room with a fan blowing.

  “But the kit that we have now enables us to find out accurately what the wind is doing, and therefore we can make sure that from where we release these stores the parachutes will all land in the correct position on the ground.”Because of the accuracy of the new system, the size of the area the soldiers have to clear of improvised explosive devices is greatly reduced. The accuracy with which the pallets fall into a drop zone also makes it easier for the troops to unpack them quickly and take the consignment back to the relative safety of the FOB.

Source: MOD UK

Zimbabwe cargo plane crashes in China

Three crew members were killed when a Zimbabwe-registered cargo plane crashed and caught fire on take-off at Shanghai’s Pudong airport.

The plane left the runway and crashed into a storage building, sending thick black smoke billowing across the scene.

The plane, with a total of seven crew members on board, Avient Aviation McDonnell Douglas MD-11 freighter, registration Z-BAV  aircraft destined to Bishkek, capital of Kyrgyzstan. It flew out of the runway and crashed at the safety zone of the airport at around 8:12 am. It is believed that a failure to lower the plane’s undercarriage might have caused the accident.

The police, firefighters and armed police soon rushed to the site for the rescue and blocked the area, and the fire, which also lead to an ignition of a nearby warehouse that belongs to China Eastern Airlines, was put off at around 9 am.

So far the four injured were receiving treatments at the nearby Pudong People’s Hospital, one of them was reported to be seriously injured.

Shanghai television reported that the tail of the plane had broken into two or three parts, and that hundreds of firefighters were at the scene.

First Flight for Airbus A400M in 2 Weeks

The A400M was to replace aging military cargo carriers in several European air forces, but its development has been dogged by a series of serious technical problems and its in service date has been pushed from 2009 to 2013.

Some governments have begun to tire of waiting for Airbus to resolve the issues, and French and German officials have given the firm until the end of the year to prove that the project remains viable.

“Ground tests of the first A400M are progressing satisfactorily at our facility. This allows us to anticipate a first flight in the week 50, weather permitting,” said Airbus military chairman and managing director Domingo Urena.

When the $28 billion (20 billion euro) A400M project began, it was hoped that a first test flight would be held in 2008 and that air forces would have had the airframe in service by the end of this year.

There is now little hope that the first production models will be delivered by 2012, and none is expected on the world’s battlefield airstrips until 2013.

The delays have cost millions and forced Airbus to renegotiate contracts with several customers. South Africa has dropped its order entirely and Britain has mulled switching is business to U.S. manufacturers.

Seven European countries – Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey – have ordered 180 planes between them, in most cases to replace aging Transall and C-130 Hercules transports.

AGENCE FRANCE-PRESSE

RAF pilot has ‘best job in the world’

A Royal Air Force Flight Lieutenant has become the first pilot in the world to reach 1,000 flying hours on the Eurofighter Typhoon.

“It’s a special thing to be the first in the world, and that’s a historic milestone, not just for me, but for the Typhoon.

“It’s taken five years of flying to reach 1,000 hours – almost exactly five years to the day – and it’s a privilege to be the first pilot to get it.”

Flt Lt Parkinson joined the RAF in 1983, aged just 18, and in the last 25 years he has had an amazing flying career, in which he admits he has been very lucky:

“This is my fourth 1,000-hour badge,” he said. “I had 1,000 on the Phantom, then with the Tornado F3 before joining the Red Arrows and completing 1,000 hours in the Hawk.”

Flt Lt Parkinson came straight from the Red Arrows to the Typhoon, and has also, for the last three years, flown the Spitfires and Hurricanes of the Battle of Britain Memorial Flight.

 

“I’ve been so lucky. The Reds was probably the ultimate job – to loop and roll with nine aircraft is very different! Some things are the same though, whether I’m air-to-air refuelling in the Typhoon, or in the Spitfire formating on the wing of the Lancaster; I will visually, manually fly the aircraft – the raw flying skills are the same to fly the Spitfire, to be a Red Arrow or to fly Typhoon.

 “I probably have the best job in the world at the moment, flying the combination of Typhoon and Spitfire!”

Flt Lt Parkinson follows in the footsteps of his grandfather who flew with the Royal Flying Corps in the First World War and trained other pilots after the birth of the RAF in 1918.

Flt Lt Parkinson’s ‘day job’ is as an instructor with the Operational Conversion Unit at RAF Coningsby, teaching pilots to fly the Typhoon. He also takes his turn as one of the pilots who maintain the station’s Quick Reaction Alert role.

He said:

“Not only have I probably flown with every one of the 100 plus Typhoon pilots in the RAF, but I’ve seen the very early version of the jet, and seen the capability of the aircraft rapidly increase in the five years that I’ve been flying.

“It has been very interesting and exciting seeing the aircraft become a truly multi-role platform. The raw performance of Typhoon is phenomenal, and technology has moved on so much since the Spitfire; we can go to 55,000 feet [16.7km], and pull plus nine G – they are both actually a joy to fly, although the Spitfire is way more difficult to land!”

The Typhoon FGR Mk4 provides the RAF with a highly capable and extremely agile multi-role combat aircraft, capable of being deployed in the full spectrum of air operations, including air policing, peace support and high-intensity conflict.

Initial production aircraft will be deployed primarily as air-superiority fighters, but will quickly be equipped with a potent precision ground-attack capability. The pilot can carry out many functions by voice command or through a hands-on stick and throttle system.

Combined with an advanced cockpit that is fully compatible with night-vision goggles, the pilot is superbly equipped for all aspects of air operations.

Source: MOD UK

Picture: Senior Aircraftwoman Sally Raimondo, Crown Copyright/MOD 2009

 

11 killed in Russian plane crash

A Russian cargo plane has crashed it crashed immediately after takeoff from Mirnyy Airport (MJZ), Russia, killing all 11 crew members of the Russian Ministry of Interior on board.

The government plane had just unloaded its cargo at Mirnyi airport. It took off and crashed 25 km (15 miles) away, Russian state media reports.

The Ilyushin IL-76 (RF-76801) came down in a deserted area and there were no casualties on the ground, local officials say.

A special commission of the Russian Interior Ministry has left Moscow to investigate the cause of the accident.

“After being unloaded the plane… took off but then deviated from the course and crashed 25 km away from the runway,” an official from the Russian Emergencies Ministry told reporters.

Bodies of the 11 crew members from the interior ministry plane have been recovered from the crash scene, reports say.

Source: BBC

Top Honors for Eurocopter in Japan

Eurocopter, the world’s leading helicopter manufacturer and a division of EADS, is pleased to receive the 2009 French-Japanese Investment Award, presented by the French Agency for International Investment (AFII) in Tokyo today. The agency’s mission is to promote Foreign Direct Investment by targeting potential investors and assisting them in the investment process.

Since 2004, the French-Japanese investment awards have been attributed each year by the AFII to companies that have made outstanding contributions to the economies of Japan or France through Foreign Direct Investment. The 2009 ceremony was attended by Mrs. Anne-Marie Idrac, Secretary of State for Foreign Trade.

At this occasion, Mr. Philippe Harache, Executive Vice-President Customers in Eurocopter declares, “Eurocopter is extremely honored to receive the 6th edition of the French investment award in Japan. For our company, this award underlines the recognition of the efforts we have made in the country for more than 40 years. By significantly increasing the portfolio of our value-added services locally, we are confident that we will better improve customer satisfaction and ensure our continued success.”

Eurocopter has been present in Japan for forty years. The Group has captured a 57% share of the Japanese civil and parapublic helicopter market, with 360 Eurocopter helicopters currently in service in the country. In April 2009, Eurocopter decided to reinforce the activities of its local subsidiary, Eurocopter Japan, by acquiring an additional 80% of the shares in its former distributor, the Japanese Euroheli Corporation, thereby increasing its total holding to 90%. Eurocopter also acquired a 60% stake in the newly formed maintenance company Eurocopter Japan T&E. The remaining 40% is owned by the Group’s Japanese partner All Nippon Airways Maintenance (ANAM). These two acquisitions have significantly increased the Group’s industrial presence in Japan. Through the two deals, which were negotiated in complete transparency with the respective Japanese partners, Eurocopter has become the first foreign manufacturer in the aeronautics sector to possess its own industrial capacity in Japan, and to receive this prestigious award.

Eurocopter Japan (ECJ) has approximately one hundred and sixty employees and is directly responsible for sales and customer support activities for the full range of Eurocopter’s civil and military helicopters. The Group has made considerable progress in both the civil and military sectors on the Japanese market over the past few months. In the beginning of this year, the Japan Maritime Self-Defense Forces decided to replace the training aircraft for its pilots with a fleet of 15 EC135 helicopters. In the civil sector, the commercial version of the EC135 is being used to fly EMS (emergency medical services) missions, commonly known as “Doctor Heli” in the country. Buyers have also been found for the VIP Hermès version of the EC135, i.e. Mori Building, for whom it is now performing shuttle flights between downtown Tokyo and Narita International Airport.

Source: Eurocopter

EMBRAER EXHIBITS THE LEGACY 500 FOR THE FIRST TIME IN BRAZIL

 

São José dos Campos, August 6, 2009 present a full-size mock-up of the Legacy 500 executive jet to the Brazilian public, for the first time, at the sixth Latin-American Business Aviation Conference and Exhibition (LABACE), August 13-15, at São Paulo’s Congonhas Airport. The Company will promote its entire portfolio of executive aircraft, and display the Legacy 600, Phenom 300, and Phenom 100 jets. The latter model went into operation in Brazil last June and three aircraft have already been delivered. 

 

Visitors will be able to experience all of the comfort of the new midsize Legacy 500, which should go into operation in 2012. On August 12, at 2:00 p.m., in the Congonhas room, Embraer will hold a press conference to present recent advances in the programs under development, as well as updated information about the products in operation. 

said Breno“In 2007, we presented Embraer’s executive jets have achieved huge success in Latin America. In Brazil, alone, there are ten Legacy 600s in operation. The Phenom family has logged over 800 firm orders, 100 of  which are from Latin American customers.

Source: Embraer