Air Zimbabwe calls for cash to bring airline back in line

In submissions made to the Parliamentary Portfolio Committee on Transport and Infrastructure Development in Harare, Air Zimbabwe acting board chairman Eric Harid said the airline needs $331.97 million to lease or purchase aircraft, $11.4 million for human resources recapitalisation and $10.6 million for plant and equipment upgrades.  Additional costs include $7.5 million for the construction of new office infrastructure and $2.1 million to clear up debts owed to the IATA. The airline also owes serving and forcibly retrenched workers $302 million in salary and terminal benefits arrears. It is presently paying workers only 40 percent of their monthly salaries, thereby accruing 60 percent in monthly salary arrears.  “We are currently paying human resources 40% and accruing 60% debts every month through our staff. Our staff and creditors have been suing us and as a board we hope we are able to tackle that,” Harid said. He added that the airline, which last made profit in 2003, recorded a loss of $44, 77 million in 2013 due to short routes, high fuel costs and the continued use of aged and ageing equipment.  The highest operating costs on the company accrued from the fuel bill as the company was using fuel-intensive Boeing 737 planes for one and a half hours flights when they are meant to fly continuously for six hours.  According to Harid, the national airline has a total of 10 aircraft including three 160-seater Boeing 737, two 200-seater Boeing 767s, two Airbus A-320 each with a capacity of 160 people and at least three aging, Chinese-made MA 60 medium haul jets and a few smaller aircraft.  Only one of the Boeing 737-200s is functional while the other two are in a state of disrepair. The airline operates a total of three functional aircraft – two Boeings and one MA-60. The two leased Airbus A-320 aircraft are due for re-delivery to Harare soon after spending six months undergoing special maintenance in South Africa.  “Our core business is in three models, passengers, cargo and mail, but our greatest asset is people. The airline has got the following fleet: two Boeing 767 2RER which seats about 197 passengers and these are owned by Air Zimbabwe. Only one is operational while the second is undergoing final C-checks at a regional aircraft maintenance factory.  “Two leased Airbus A-320 aircraft, each with a capacity of 156 are both undergoing maintenance in South Africa. “Of the three MA-60s, two are grounded while the only operational one is presently servicing the Victoria Falls-Kariba- Harare route which we re-opened in August last year," Harid said.  Despite spirited attempts, Air Zimbabwe has failed to attract joint-venture partners and financiers because it is heavily indebted while accusations of corruption and reports of financial scandals involving the company's former board members have forced potential funders to adopt a wait and see attitude as the new board settles down to work.  The airline flies to only one regional destination - Johannesburg - with flights originating from Bulawayo, Harare and Victoria Falls. It also operates three regular domestic flights on the Bulawayo-Harare, Harare-Bulawayo-Victoria Falls and the Harare-Kariba-Victoria Falls routes.  Despite the bad state of its finances, Air Zimbabwe recently announced that it is negotiating with Canadian business jet manufacturer Bombardier for the acquisition of an undisclosed number of low-cost twin-engined, medium range, turbo-prop Bombardier Q-400 regional jets. Bombardier sales director for Africa and Middle East, Sameer Adam said the company will be happy to do business with the ailing Zimbabwean national flag carrier:  "We have seen that Zimbabwe is a market full of opportunities and we hope that if we manage to strike a deal with Air Zimbabwe we will be able to supply and introduce the latest technology in this market. We have over 110 Q Series aircraft in Africa and we would be happy to offer our services to Zimbabwe,” Adam told local media in Harare after the  Bombardier Q-400 jet made a maiden Zimbabwean test-flight from Harare to the resort town of Kariba and back.  Commenting on the ongoing negotiations with Bombardier Aerospace, Transport and Infrastructural Development Minister Obert Mpofu said Air Zimbabwe should seize the opportunity and take advantage of the high technology offered by Bombardier to rebuild its fleet back to a world class civil aviation service.  “Air Zimbabwe must take advantage of new technology being offered by Bombardier and select the most suitable aircraft for the local environment. Many companies have approached us with proposals for us to buy their planes and we are still considering them,” Mpofu said.   According to its strategic business re-development model for the 2014-2016 period, Air Zimbabwe presently needs at least two more aircraft, of which one will be dedicated to service the domestic market while the other will be dedicated to regional destinations.  Mpofu said Air Zimbabwe will deploy the two Airbus A-320s set to be re-delivered shortly from the South Africa, to service flights on key regional routes which include Nairobi in Kenya, Lilongwe in Malawi and Kinshasa in the Democratic Republic of Congo (DRC). “We will soon be adding the two Airbus A-320s to the fleet. They can accommodate the routes that we have not been able to service as a result of the limitations on our fleet. The old fleet will also be brought in. “We have been doing our best to look for funding to get all those aircraft flying to give Air Zimbabwe an edge in terms of competition,” minister Mpofu said 

Denel Recognises Young Achievers Who Excel In Maths And Science

Top engineering students with bursaries from Denel that study at universities across the country were honoured at an awards function in Tshwane, South Africa, today. They were joined by high school learners who benefitted from Denel's enrichment programmes and achieved distinctions in maths and science in the 2014 matric exams.

Speaking at the Denel Young Achievers event the Deputy Minister of Public Enterprises, Bulelani Magwanishe, said South Africans should value academic achievers on an equal basis with top sports people, musicians and entertainers.

He commended Denel for creating a culture in which “finding engineering solutions to bring water to rural communities are valued equally with the ability to pass a ball with pin-point precision; where the designers of next generation aeroplanes, satellites and unmanned aerial vehicles are as well-known as pop idols; and where scientists and artisans receive the same recognition as fast bowlers and goalkeepers.”

The Group CEO of Denel, Riaz Saloojee said the company is attracting some of the brightest students in the country with bursaries for engineering studies and internships at Denel.

The company is committed to invest in the training of young engineers, scientists and artisans at tertiary level and promote the teaching of maths, science and technology among high school learners.

Denel is responsible for the teaching of enrichment classes for Grade 10, 11 and 12 learners in Gauteng, Limpopo, Mpumalanga, the Free State and the North West. Denel Dynamics has a partnership with two high schools in its vicinity, Steve Tshwete and Olievenhoutbosch whose learners receive additional tuition in maths and science from Denel employees over weekends and during school holidays.

Both Denel Aviation and Denel Aerostructures have similar programmes in place to support schools in the vicinity of their campus in Ekurhuleni, including at the Rafedile Academy in Springs and the Etwatwa Secondary School in Benoni.

Matriculants who participated in the programme scored a combined total of 66 distinctions in physical science and maths in the 2014 year-end exams. Among the top achievers were John Nyatshamo and Lwazi Selatole from Geluksdal Secondary School in Brakpan and Thabang Tshabalala from M.O.M Seboni High School in Nigel who all three scored more than 90% in both subjects.

Deputy Minister Magwanishe said Denel’s programmes and bursaries enable students to bridge the gap between the school environment and tertiary education. The company also provides continued support to deserving students through internships, mentoring and eventual full-time employment.

New data quantifies 179,800 new jobs of Heathrow expansion

Heathrow expansion is the best option on jobs and GDP gains for every part of the UK, as the Airports Commission’s consultation deadline nears.

New figures released today quantify for the first time how an expanded Heathrow will benefit every UK nation and region. The findings prove that Heathrow is the best option for both jobs and economic growth in all parts of the country.

With the Airports Commission’s consultation coming to a close next week, the data sheds new light on the aviation debate.

The independent report by QUOD, commissioned by Heathrow, confirms over half the gains from forecasted economic benefits and job creation will be made outside of London and the South East, a fact that is further endorsed by the public support Heathrow has already received from 26 Chambers of Commerce across the UK.

Regional employment benefits as a result of foreign investment and trade could total 179,800 new jobs across the UK in 2050, as long haul connections and increased freight capacity at an expanded Heathrow bring more business to the UK.

Trade is likely to play a big part in economic growth, with towns and cities across the rest of the country currently benefitting from nine times more employment from foreign investment in manufacturing than those in London and the South East. Scotland, Wales and Northern Ireland are expected to lead the way in research and development and the digital technology field, experiencing the greatest benefits from increased employment in these sectors.

Source and image: Heathrow Airport

MRO warfare in the NextGen widebodies battlefield

To date, Airbus has secured orders for more than 3 500 new wide-body aircraft. Meanwhile, the world’s latest generation wide-body, Airbus A350XWB, has been recently delivered for Qatar Airways, after an 11-day demonstration tour around Asia, and successfully finished its flight from Frankfurt to Doha. On the one hand, powered by Roll-Royce Trent engines, A350XWB promises the industry a further increase in cost effectiveness. On the other hand, the NextGen widebodies will definitely require suitable MROsolutions as well. In addition, the early indications suggest that the demand for new wide-body aircraft will result in substantial investments and rising labour costs to support the new comprehensive aircraft MRO systems. With this in mind, what are the challenges for MRO’s in the upcoming future?

Understandably, many experts report that the MRO development for NextGen widebodies will result in a fierce competition, requiring expert knowledge, geographical expansion and, as a consequence, demanding more investment not only for OEMs, but for independent providers as well.

Asia vs. North America

To begin with, there are predictions that some of the US air carriers will stop using maintenance services overseas and shift back to USA‘s MRO. Due to increasing cost, more and more operators realise that outsourcing is not as efficient as it was before. Growing maintenance costs also alert about the change in the scope of heavy maintenance outsourcing, thereby increasing the pressure on local providers. For example, according to AAR, these trends served as a reason for it to open a $15+ million MRO facility in Illinois, designed specifically to accommodate newer wide-body types.

“When we looked at the global market and zeroed in on the U.S. market, we saw a need for maintenance hangars that are capable of managing these new generation aircraft” - says David Storch, CEO of AAR.

One way to keep up with the growing competition is to provide tailored MRO solutions, as done by Boeing. The company’s strategy is to tie its manufacturing and maintenance businesses. Thus, apart from delivering orders, Boeing provides essential support for Malaysia Airlines (100 737 aircraft), BOC Aviation (50 737 MAX 8s, 30 Next-Generation 737-800s and two 777-300ERs) and Emirates (150 777Xs).

In the meantime, the changing situation may create new possibilities for MROs in Asia, which are not expected to give up without a battle and try to retain their place under the sun, even though it will not be a simple task. The capital cost of such an expansion is indeed challenging.

As stated by Mr William Kircher, Vice President at Pratt & Whitney Singapore Overhaul & Repair, Pratt & Whitney is continually investing in global partnership network to offer customers choice and flexibility. Doing business across the globe allows Pratt & Whitney to remain competitive with the right work in the right places, yet remain in close proximity to many customers.

„Established for more than 30 years, our footprint in Asia Pacific has also grown to allow us to remain well-positioned to benefit from future growth in this market. Singapore is home to Pratt & Whitney's most comprehensive aftermarket presence in a single location. Complementing our existing MRO capabilities in Singapore, Pratt & Whitney Eagle Services Asia is currently our global center of excellence for PW4000 large commercial engine overhauls, and will be one of the five Pratt & Whitney engine overhaul centers for the PurePower® engine family when it enters into service beginning this year”- shares Mr William Kircher, Vice President at Pratt & Whitney Singapore Overhaul & Repair, President at UTC Aerospace Singapore.

According to MTU Maintenance, the company is also continuously investing in new and state-of-the-art machinery, as well as further capabilities in China. As such, MTU Maintenance Zhuhai is permanently working on extending its capabilities and improving its service level, and only recently has introduced MRO capabilities for the CFM56-7BE engine variant. MTU Maintenance established the location with the aim to increase its presence in emerging markets and to offer its innovative services portfolio locally as well. Today, the company is China’s market leader for engine MRO and one of the top players in Asia.

“Taking into consideration the fact that some providers already have joint ventures in Asia, it is very likely that these shops will provide engine MRO for next generation wide-body engines as well. At the same time, strong orders from Middle East airlines for widebodies may impact the equation, and engine MRO for wide-body engines could shift from Asia to the Middle East in future. MTU Maintenance is continuously reviewing and improving its workflow and flexibility in order to better fulfil changing market requirements, as a confirmation that we are on the right track and a well-recognized competitive player – not only in Asia, but worldwide.” – shares MTU Maintenance management.

Independent MRO vs. OEM

To continue, the warfare between providers may not only occur for the location, but for the production. It is not a secret that the new technologies will allow original equipment manufacturers (OEMs) to hold a stronger position in the market of MRO, thereby surpassing the independent players at the expense of owning a unique knowledge of maintenance and limited access to relevant certificates. The situation is best described in the engine segment as original equipment manufacturers (OEM‘s) are dominating present MRO and will, most probably, hold their position for the NextGen widebodies. And if OEM’s are controlling 85% of engine MRO market, it is hard to imagine how independent MRO’s are going to develop technical maintenance hubs.

“Given the increasing OEM coverage for engine maintenance, it is very likely that MRO for next generation widebody engines will be to an even greater extent performed either in OEM shops or within the OEM partner network. As a result, it will be the decision of the OEMs which airlines they will license and/or whether they will develop regionally” – continues MTU Maintenance.

Nevertheless, it is not the right time to panic, because in terms of globalisation, every player of the market is interconnected and needs each other. For example, according to Zilvinas Lapinskas, CEO of FL Technics, despite the competition between independent MRO’s and OEM’s in the engine maintenance for NextGen widebodies, there are cooperation possibilities for players in the airframe maintenance. Original manufacturers benefit from cooperation with independent MROs, as it extends OEMs service network. And, respectively, MROs benefit from cooperation with OEMs, because it is very difficult to get the expensive maintenance license for individual technical operator.

In any case, competition and cooperation between both OEMs and MROs – is a long-term trend, which has become an integral part of the existing MRO market. Will the balance between MRO markets in Asia and North America be achieved? Probably, the answer to that question will come after decade or more. One thing is for sure - Asia grew rapidly in the recent years, but the crisis is over, and the North American aviation market as well has actively begun to return its power. Yes, it is expected that in the 2030 Asia will be the largest aircraft operator. But whether it will be the largest MRO market? Quite possibly, but not due to the maintenance of the NextGen widebodies. This niche can possibly belong to North America.

Malaysia Airlines website hacked by islamists

The official Malaysia Airlines website has been hacked by a group claiming to support Islamist terrorist organization ISIS.

On accessing the website, users were presented with a picture of a lizard, which read "Error 404 - the plane could not be found" and "Hacked by Lizard Squad -- Official Cyber Caliphate”,informs Lenta.ru with the reference to CNN. The browser tab also read "ISIS will prevail."

The airline added the issue has now been resolved with its service provider and the system is expected to be fully recovered within 22 hours.In a post on its Facebook account, the airline denied its internal servers, which contain passenger information, had been compromised. It said it's the airline’s Domain Name System (DNS) that had been hijacked, redirecting the users to the hackers' website.

Source and image: Lenta.ru / Malaysian Airlines

Flying solo: will co-pilots become a thing of the past?

It is no secret that crew-related costs typically represent 10-20% of an airline’s cost structure – as much, if not more, than any other cost bucket, except fuel, at least before its recent drop in costs. Naturally, reducing the size of cockpit crews for commercial aircraft has been a topic of theoretical discussion among aerospace industry representatives for many years now. Nevertheless, while today realization of such a solution is far less science fiction than it was a few years ago, the possibility of its actual implementation still remains in question.

In 2010 Ryanair's CEO Michael O'Leary made another one of his controversial statements, declaring he wants to eliminate co-pilots in his Boeing 737 jets. In an interview with Financial Times he argued that they are essentially unnecessary in modern aircraft because most of the flying is highly automated. “In 25 years with over about 10 million flights, we’ve had one pilot who suffered a heart attack in flight and he landed the plane,” he told the paper. While O’Leary is well known for making far more outrageous comments, his thoughts on single-pilot operations are not new to aviation, and are even backed by some of the industry players.

For instance, in 2013 a big European research programme has begun to look at the possibility of a single-pilot flight deck for commercial operations. The project, called ACROSS (“Advanced Cockpit for Reduction of Stress and Workload”), is funded with €30 million and brings together a team of 35 industry and research partners, including such giants like Thales, Airbus and Boeing. Moreover, NASA has recently reported it’s advancing an airliner flight deck of the future that features one seat in the cockpit for a captain and one on the ground, occupied by an operator filling the role of either “super dispatcher” or first officer. However, the actual benefits of such a concept remain ambivalent.Flying solo: will co-pilots become a thing of the past?

“Co-pilots are currently employed on flights to monitor the other pilot and intervene if there is a problem or share the work if there is too much for one person to do. So, if new technology could carry out all those functions, theoretically we wouldn’t need a second pilot anymore,” comments Skaiste Knyzaite, the CEO of AviationCV.com. “However, there are other important questions to be asked, even if their importance is more for the long-term. Where will the PICs of the future come from if they have no apprenticeship as first officers? Can new pilots go straight to command? Would you mind if the only pilot on your A380 was a recent piloting graduate?”

Five years ago, O’Leary argued that since regulations allow trains to operate with just one driver, the practice ought to be admitted at least for short-haul flights. According to Ryanair’s CEO, flight attendants could cover for co-pilots, who he stated are essentially required only to “make sure the first fella doesn’t fall asleep and knock over one of the computer controls.” However, while this scenario is already common place in the military with success, the situation is a little different when dealing with paying clients, therefore the risk factor is increased. After all, the international aviation system has reached unmatched levels of safety and reliability not only because of greater automation, but also thanks to a widely accepted global standard for cockpit behaviour and cooperation. In the meantime, there are some other obstacles the players are likely to face.

“Of course, airlines would like to reduce pilot costs. For example, instead of sending four pilots on a long-haul flight, they could send just two. Moreover, it may be the answer to the industry-wide worries that the worldwide pool of pilots will decrease over the next two decades while air-travel volume are expected to double. However, it is likely that current practicing pilots will not welcome this direction as it could potentially mean the end of their career. Moreover, current regulation is likely to be the real stumbling block to this progression,” shares the CEO of AviationCV.com “Nevertheless, one needs to take such developments with all the seriousness. After all, we might be on the verge of an industry-wide revolution.”

Source and image: AviationCV.com

U.S. AF identifies Boeing 747-8 platform for next Air Force One

Secretary of the Air Force Deborah Lee James, in coordination with the Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall, has determined the Boeing 747-8 will serve as the next presidential aircraft, commonly known as Air Force One.

“The presidential aircraft is one of the most visible symbols of the United States of America and the office of the president of the United States,” James said. “The Boeing 747-8 is the only aircraft manufactured in the United States (that), when fully missionized, meets the necessary capabilities established to execute the presidential support mission, while reflecting the office of the president of the United States of America consistent with the national public interest.”

Analyses of the capability requirements conclude a four-engine, wide-body aircraft is required to meet the needs of the Air Force One mission. Market research determined there are two four-engine platforms that could meet the requirements; the 747-8 manufactured by Boeing in the state of Washington, and the A380 manufactured by Airbusin Toulouse, France.

The decision, made official through a Determinations and Findings document, authorizes the commercial aircraft purchase by other than full and open competition. This decision, in conjunction with the notification of the Air Force’s intent to award a sole source contract to Boeing for the modification of the 747-8, allows discussions with Boeing that will likely lead to a contract for the aircraft platform as well as the modifications necessary to missionize the aircraft.

“This decision is not a contract award to procure 747-8 aircraft,” said Col. Amy McCain, the Presidential Aircraft Recapitalization (PAR) program manager. “We still need to finalize the overall acquisition strategy and conduct risk-reduction activities with Boeing to inform the engineering and manufacturing development contract negotiations that will define the capabilities and cost.”

The Air Force wants to own enough of the technical baseline to permit competition for sustainment throughout the aircraft’s planned 30-year life cycle. Competition can keep costs down, spur innovation and provide options.

“We are committed to incorporating competition for subsystems of the missionized aircraft as much as practicable, and will participate substantively in any competitions led by the prime contractor,” James said.

“The current fleet of VC-25 presidential aircraft has performed exceptionally well, a testament to the Airmen who support, maintain and fly the aircraft,” James said. “Yet, it is time to upgrade. Parts obsolescence, diminishing manufacturing sources and increased down times for maintenance are existing challenges that will increase until a new aircraft is fielded.

“The Air Force provides the president with safe and reliable air transportation with high levels of security and communication capability as the alternate airborne White House,” she added. “This platform will meet the requirements necessary to provide that level of service for future presidents.”

Source and image: USAF

Air France to cut 800 jobs

In 2015, Air France will benefit from the impact of the measures taken within the framework of Transform 2015 and from the fall in the fuel price. However, as announced in December 2014, the Group will also have to contend with the weaker unit revenue trend that has developed since the summer of 2014, which requires the implementation of additional measures.

The Air France management presented a number of actions to the Corporate Works Council: downwards revision in fleet and capacity growth, new initiatives to drive revenues, the reinforcement of ‘purchasing’ initiatives, maintained wage moderation and productivity efforts and further adaptation of headcount to requirements.

In particular, during a meeting of the Corporate Works Council to be held during the first fortnight in February, the Air France management will provide details on proposed new Voluntary Departure Plans. These Voluntary Departure Plans will relate to ground staff and cabin crew and aim at the departure of approximately 800 people.

These measures relate to both the full execution of Transform 2015 and an immediate adaptation to the Group’s competitive environment.

Source and image: Air France

Lufthansa subsidiary signs new wage agreements with pilots’ union

Settlement at Eurowings to run for five years – Sustainable collective rules for pilots at SWISS International Airlines and Austrian Airlines. New wage agreements apply for the approximately 300 pilots at Eurowings GmbH as of 1 January 2015.

At the beginning of the year, the airline reached agreement with the Vereinigung Cockpit pilots’ union on new settlements that are to run for five years. They govern such matters as developments in working conditions and “grandfathering clauses” for the duration of the agreements. The collective bargaining partners agreed on a wage increase of 2.5 per cent for the year 2015 and at least two per cent for subsequent years, depending on the rate of inflation. Signing the wage agreements means that the forthcoming renewal of the Eurowings fleet with Airbus A320 aircraft, and thereby the safeguarding of Eurowings and its future prospects, is being aided and supported in terms of collective bargaining, too.

Sustainable settlements with various pilotsʼ unions have already been reached for other flight operations in the Lufthansa Group.

These recent wage settlements mean that the Lufthansa Group and almost all its pilots now have agreements that reflect changes in the industry and that introduce sustainable wage conditions. Still outstanding, however, are wage agreements at Lufthansa German Airlines, Lufthansa Cargo and Germanwings. In December 2014, Lufthansa offered further talks on unresolved topics, along with a concrete plan for arbitration. The Vereinigung Cockpit pilots’ union turned down this offer. Lufthansa is always prepared to cooperate on a viable solution for all sides.

Source and image: Lufthansa

US drone pilots are massively bailing out

Hundreds of American drone pilots have resigned, complaining of long hours and excessive stress involved in bombing jihadist targets remotely, from thousands of miles away.

A growing crisis has led the US air force to pull fighter pilots out of their cockpits and put them into “office” flying seats in America to operate the armed Predator and Reaper drones attacking Islamic State targets, reports Lenta.ruwith the reference to The Times.

Air Force chiefs are considering to offer $25 000 in bonuses each year to persuade operators to stay after a report found that 240 pilots quit. According to pilots, it psychologically difficult to see dead people on the screen translated from drone’s camera.

Source and image: Lenta.ru

Asian aircraft finance market: new local players to support region’s growing fleet

When addressing the Legislative Council on the 13th of January, 2015 the Hong Kong’s Chief Executive Leung Chun-ying revealed the government’s intentions to turn the city into a major aviation finance hub capable of competing with the likes of Ireland and Singapore. The upcoming changes in Hong Kong’s tax legislation and financial system serve as yet another clear signal that the Asia Pacific region is getting ready to grab the largest piece of the lucrative aviation finance pie.

“Being the world’s third largest financial centre, Hong Kong undoubtedly has the potential to evolve into a leading aviation finance hub. However, there is still a lot to be done. Firstly, when it comes to flexibility, the existing tax system for leasing companies is still behind the ones in Ireland and Singapore. Then there is also the issue of a wider geography of Double Taxation Avoidance Agreements and the ratification of the Cape Town Treaty. The Treaty would certainly be a good starting point for a rising aviation leasing hub,” shares Tadas Goberis, the CEO and Chairman of the Board at AviaAM Leasing.

The newly revealed plans of the HK officials have come as a direct response to the rising activity of local participants of the aviation finance market. For the last couple of years Asian banks and investors have been acquiring substantial aviation assets either directly from the manufacturers or via the acquisitions of the existing market players.

There’s no need to dig deep for examples: starting with the Japanese Sumitomo Mitsui and Mitsubishi UFJ Lease & Finance Co spending billions on grabbing several European and US-based leasing businesses in 2012, and up to the most recent Cheung Kong’s intentions to enter the market with its own initial portfolio of 60 aircraft. In addition, during the last several weeks it was reported that the Australian Macquarie AirFinance might soon sign a deal with AWAS to buy 100 newly built and on-order airplanes whilst China Aircraft Leasing Company had placed an order for 100 Airbus A320s. 
Whether the primary goals are diversification, expansion beyond the home markets and a natural exploration of new promising opportunities – global aviation finance system is naturally shifting to the East (along with the demand for aircraft). Moreover, since many Asian carriers prefer to partner up with local lessors (should they have the capabilities), no wonder that Asian leasing companies and other financial institutions are quickly lining up for new aircraft.

At the same time, just having a bunch of newly-built aircraft doesn’t guarantee that one will enjoy high yields. Yes, investing in aircraft brings 2-3 times higher margins than investing in air carriers, however considering certain signs of deceleration in the Chinese economy and a rising concern related to an over-capacitated Asian fleet, the actual growth in demand for new aircraft may mismatch the forecasted one. Moreover, a substantial drop in oil prices will bring airlines a breath of fresh air and lessen the pressure for fleet renewals thus prolonging the service of mid-life airplanes and current generation aircraft types.

“Lower jet fuel prices may allow the current generation of narrow-body aircraft, such as Airbus A320ceo and theBoeing 737NG, to remain economically competitive with next-generation aircraft – Airbus A320neo and Boeing 737MAX,” shares Tomas Sidlauskas, VP Sales at AviaAM Leasing. “If the current models maintain higher values they would provide securitizations with higher-than-expected cash flows. Low fuel costs may also support airline profitability, lowering potential default risks in the near term. If the operating cost differential between current and next-generation aircraft decreases, demand for the B737NG and A320ceo families could prove more resilient than forecasted and cash flow/securitizations would be positive.”

According to the International Air Transport Association, as of January 2, 2015 the average price for jet fuel was $1.71 per gallon – 18.1% lower than a month before that and down 43.2%, year over year. From a long term perspective, a sustained drop could potentially have an impact in the estimated operating cost reduction of next-gen aircraft. For instance, the current jet fuel price is approx. 51.1% lower than the one Boeing has assumed in calculating the estimated $112 million in cost savings for a fleet of 100 B737 MAX 8s.

“Meantime, the entrance of new players is certainly a good sign for the industry. It is especially beneficial to carriers which get more options to choose from. However, in many cases the new entrees don’t have a strong background in either aircraft finance or aviation in general. Buying an aircraft is just a small step in a 10-15-20 year-long uneasy road one will have to travel while managing the asset. Will the lessor be able to monitor the asset as it is operated? Will it be possible to successfully remarket the aircraft should the operator decide to squeeze its fleet? Does one possess the required technical knowledge and market understanding to ensure long-term residual values? These are the questions that new aircraft finance players should address upfront. Hopefully, they will find well-established partners from within the aviation community to guide them through the exciting but challenging times,” concludes Tadas Goberis, the CEO and Chairman of the Board at AviaAM Leasing.

Source and image: AviaAM

Alitalia unveils its new strategic plan

The strategy for the new Alitalia was unveiled today, with an unequivocal commitment by the new executive team and strategic investors to reinvent the airline.

Alitalia will introduce new routes, new product and service standards, a new cost management strategy and new branding, as the foundations to build a premium global airline representing the best of Italy.

The new Alitalia commenced operations on 1 January 2015, following the completion of equity investments by Etihad Airways and Alitalia’s existing shareholders. The new company’s Board meeting yesterday ratified the business strategy, which was outlined today by Luca di Montezemolo, Chairman of Alitalia, Silvano Cassano, Chief Executive Officer of Alitalia, and James Hogan, President and Chief Executive Officer of Etihad Aviation Group and Vice Chairman of Alitalia.

Luca di Montezemolo said: “The energies, passion and expertise I have experienced at Alitalia in recent weeks do not leave any doubt that the airline we’re unveiling today will become once again a premium Italian airline recognised worldwide. This is why I believe the people in Alitalia are a pillar of the history we’re about to write".

While exploring further opportunities to deepen the relationships with Skyteam members and in particular Air France/KLM and Delta, there will be a major new partnership with airberlin & NIKI, as well as increased connectivity with Etihad Airways. There are also plans to work more deeply with Air Serbia and Etihad Regional. These partnerships will increase customer choice across many markets.

Alitalia and Etihad Airways and its partners are exploring opportunities to improve jointly fleet efficiency. For example, Alitalia is in the process of relocating 14 Airbus A320s to airberlin, and looking into options with Etihad Airways to acquire additional wide-body aircraft for Alitalia. Alitalia will also have opportunities to receive aircraft from Etihad Airways’ existing fleet orderbook.

Source and image: Etihad

Sukhoi Superjet 100 VNAV certified

The Aviation Register of Interstate Aviation Committee (IAC AR) issued a Supplemental Type Certificate for the Sukhoi Superjet 100 (SSJ100), permitting the usage of Vertical Navigation (VNAV) functionality at all stages of flight.

The Sukhoi Superjet 100 represents the first Russian built aircraft to achieve VNAV certification at all stages of flight. 

IAC AR confirmed that VNAV functionality can be used on Sukhoi Superjet 100 aircraft in its Basic version. The VNAV will be possible at all stages of the SSJ100 flight, as well as in the airports with non-precision approach. 

The VNAV or vertical navigation is an aircraft function that calculates a vertical profile of the flight in accordance with the assigned path, considering aircraft performance, as well as all speed and height restrictions applied to a specific path. 

VNAV functionality provides vertical profile keeping recommendations to pilots during climb and cruising. It also ensures a fully automatic control during descend and approach. 

VNAV functionality of Sukhoi Superjet 100 significantly decreases crew workload and ensures compliance with all applicable restrictions. 

“At the moment, Sukhoi Civil Aircraft Company is working on VNAV certification at IAC AR for the SSJ100 Long Range version. Moreover, the Company plans to achieve validation by European Aviation Safety Agency (EASA) of the VNAV functionality, certified by IAC AR, for the SSJ100 Basic and Long Range versions," said Igor Vinogradov, the First Vice-President for Quality and Certification. 

The SSJ100 VNAV functionality was tested on both “Electronic Bird” integration bench designed to test new equipment, software and aircraft systems, and during the real flights at SSJ100 prototype 95003 at Ramenskoe airfield in Zhukovskiy, near Moscow. There were 58 test flights on the “Electronic Bird” integration bench and 24 flights performed by the test aircraft. 

During the bench running and ground tests, the VNAV was successfully demonstrated on the SSJ100 at all stages of flight: take-off, climb, cruising, descending, approach and missed approach. The tests also confirmed the accuracy of the assigned vertical profile-keeping performance, in accordance with the applicable rules of IAC AR, EASA and FAA.

Proflight Zambia begins 50-seater jet flights to mark jubilee

    Proflight Zambia has begun flights on its new 50-seater jet aircraft, introduced to mark Zambia's Golden Jubilee.

    The Bombardier CRJ-100 plane was delivered to Zambia last week and operate throughout October, giving the airline time to assess market demand with a view to extending the lease on the aircraft going forward.
    The new jet will primarily operate on the Lusaka-Ndola morning and evening flights, but where demand is high it will also be used on Solwezi, Mfuwe and Livingstone routes.
    The aircraft is already proving popular with passengers, said Proflight Director of Government and Industry Affairs Captain Philip Lemba.

    “We have already seen strong take-up of seats on the new plane and the feedback we are getting from passengers is that the larger, more spacious cabin is very much appreciated,” said Lemba.

Embraer delivers 30 commercial and 52 executive jets in 4Q14

Embraer delivered 30 commercial and 52 business jets, 38 light and 14 large jets, during the fourth quarter of 2014 (Q14), thus closing out the year with 92 aircraft delivered to the commercial airline market and 116 to the executive aviation market, that is, 92 light and 24 large jets.

On December 31, the firm order backlog stood at USD 20.9 billion. 

The quarter highlights in the commercial aviation segment were the confirmation of a firm order for seven E175 jets by SkyWest, to be operated under a Capacity Purchase Agreement (CPA) with Alaska Airlines, and the delivery of the1,100th E-Jet produced, model E190, to Aeromexico airlines. 

In the executive aviation segment, the quarter high lights were the first deliveries of the Legacy 500 and the additional request from NetJets, which converted 10 Phenom 300 options into firm orders.

ATR obtains EASA certification for developments on ATR-600 avionics suite

ATR has announced that it has obtained certification for the very latest innovations developed for the avionics of the ATR 42-600s and ATR 72-600s from the European Aviation Safety Agency.

The new certification concerns the LPV (Localizer Performance with Vertical guidance), RNP-AR 0.3 (Required Navigation Performance with Authorization Required) and V-NAV (Vertical Navigation) approach functionalities coupled to the autopilot. These new improvements will allow the latest generation ATRs to follow more accurate and even more secure approach trajectories thanks to satellite navigation, without requiring ground-based navigation facilities. These new features, which significantly reduce the pilot’s workload, are integrated into a new version of the ATR -600 avionics, the "Standard 2" version. 

"LPV" is a feature allowing approach procedures based on GPS information augmented by geostationary satellites, which allows the aircraft to be guided on vertical and horizontal axes, without the need of support from a ground station. This new feature is particularly useful for airports not equipped with an ILS (Instrumental Landing System), notably certain regional airports which are small or which have little infrastructure. High precision LPV approaches can achieve minimums of up to 200 feet, thus permitting landings with greatly reduced visibility. 

"RNP-AR 0.3" allows aircraft to follow trajectories with greater accuracy, thus with better anticipation of potential obstacles when approaching difficult to access airfields. The fundamental contribution of RNP-AR compared to conventional RNAV (GPS) approaches is that they are subject to increased monitoring of aircraft performance combined with onboard navigation alerts. By taking into account these safety constraints, these approaches also permit reduced minimums compared to conventional RNAV approaches. In addition to these advantages, this new feature is also used in the management of traffic at heavily congested airports or for anti-noise procedures. 

"VNAV", coupled to the autopilot, provides vertical guidance managed by the aircraft's navigation calculator (FMS). Based on the calculations of the FMS, the autopilot controls the aircraft to follow a specified vertical profile. This more accurately defines descent and approach trajectories, providing better safety in relation to the possible presence of obstacles. VNAV significantly reduces the workload of pilots approaching airports; this functionality is essential for RNP-AR operations. 

Carmine Orsi, ATR’s senior vice-president engineering, said: “This will allow ATR -600s to be even more efficient, more economic and more versatile. We are pleased to offer our operators the very latest innovations in terms of navigational aids and thus facilitate their day-to-day operations, while further increasing aviation safety and helping reduce congestion at certain airports.”

Satcom Direct introduces data center solutions provider TerraCom Direct

Satcom Direct has expanded its capabilities by launching a new data center solutions provider, TerraCom Direct.

“Information security is a huge issue for businesses and individuals. Our new data center is the key to safeguarding connectivity and communications streams, and better securing the missions of our customers. Satcom Direct and TerraCom Direct customers can have enterprise level security for air, land and sea,” said Jim Jensen, CEO and Founder of Satcom Direct.

The facility not only hosts and protects clients’ critical business technology systems and information, it secures Satcom Direct aviation, maritime and terrestrial-based services. Whether data traffic is generated in the air, on the ground, or on the water, TerraCom Direct is constantly monitoring in an effort to detect and report potentially malicious activity to customers.  

TerraCom Direct creates highly-secure solutions designed to meet client specifications and corporate security requirements. All security policies are in accordance with SSAE 16 and FISMA recommendations and the operation is SSAE 16 SOC 1 type 2 compliant. TerraCom Direct was built to accommodate a wide array of network requirements – whether hosting, power, cooling, or security, all can be scaled to meet changing demands. 

“The key advantage we have over other data solution providers is flexibility. We offer a wide range of connectivity options, so whether the client simply needs rack space, a private network, or full migration to the cloud, we have the expertise and the capabilities. With our highly-redundant infrastructure and 24/7 support, we do everything possible to ensure 100 percent uptime and uninterrupted service,” said Rich Pilock, president of TerraCom Direct

Jeppesen introduces Electronic Flight Folder

Jeppesen has recently introduced a new Electronic Flight Folder service to enhance flight-planning operations for airlines.

The new Electronic Flight Folder service increases situational awareness in flight for pilots and improves ground-to-air communication and integration of digital flight plan information. 

“The Electronic Flight Folder solution works seamlessly for airlines that use Jeppesen’s flight planning systems to enhance operational efficiency,” said Tim Huegel, director, Jeppesen Aviation Portfolio Management. “The Jeppesen and Boeing Electronic Flight Folder tools work together on the ground and in the air to improve integration of critical flight planning data across a mixed aircraft fleet and works with multiple EFB configurations to suit unique airline operations.”uf