The Most Influential Airlines Of 2013

December 17, 2012
Delta's oil refinery purchase and regional airline moves could be influential in 2013.Joepriesaviation.net

Adrian Schofield and Jens Flottau
In a constantly changing airline industry, there are always some carriers that act as catalysts for wider upheaval. Aviation Week's commercial editorial team has assembled this list of 25 carriers that are the main contenders to fulfill this role in 2013. Many on the list are poised to make major advances that will present new challenges for their competitors, some will influence the industry as they disintegrate, and others are reaching an inflexion point where either outcome is possible. Wherever they fall on that spectrum, these are the airlines that are likely to provide the industry's biggest talking points over the next year.
Delta Air Lines will be in the spotlight in 2013 due to its acquisition of a Pennsylvania oil refinery as a hedge against the widening spread between crude oil prices and jet fuel costs. Airlines will be watching to see if the move really does produce at least $300 million in savings, as the carrier estimates. Delta is also at the forefront of the shake-up in the U.S. regional airline industry, with plans to remove at least 200 of the 325 50-seat aircraft in its network by 2015. Its plans for achieving these cuts should become clear by early next year. Delta drew even more attention last week when it agreed to purchase a 49% stake in Virgin Atlantic, boosting its access to London's Heathrow Airport.
Southwest Airlines acquired AirTran Airways in May 2011, but it will be in 2013 that the real impact of that acquisition will start to become clear. Customers will be able to book single-ticket itineraries by March, connecting Southwest and AirTran networks for the first time, and Southwest is expecting this to significantly boost revenue and give it a competitive advantage. Southwest also faces some new challenges, with CEO Gary Kelly warning that the carrier must respond to the cost-cutting that American Airlines and other competitors have achieved in bankruptcy protection. That raises the prospect of a problem Southwest usually does not encounter: divisive disputes with its labor unions.
American Airlines is likely to emerge from Chapter 11 bankruptcy protection in 2013, but in what form? US Airways is pushing for a merger, but American's management has long stated its preference to emerge as a standalone carrier, focused on high-value business routes from its hubs in Chicago, Miami, Los Angeles, Dallas/Fort Worth and New York. A merger with US Airways would create an airline with a strong presence on the U.S. East Coast and Midwest, Europe and Latin America. American's three unions have thrown their support behind the deal, saying the carrier will not be able to compete with rivals Delta Air Lines and United Airlines without merging with US Airways.
Pinnacle Airlines will be the focus of the U.S. regional airline industry in 2013. Operating under Chapter 11 bankruptcy protection since April 2012, Pinnacle's reorganization will have a major bearing on the future of rivals SkyWest Inc. and Republic Airways, which are both anticipating a sharp reduction in Pinnacle's operations. It is likely that Pinnacle will bear the brunt of partner Delta Air Lines' planned cuts in regional jet requirements, and the carrier has already shed its contracts with other major airlines. There may still be a future for Pinnacle if its pilots agree to an extensive concessions package, although the likelihood is that the carrier will become another victim of consolidation.
The coming year will be another period of international growth for Hawaiian Airlines, as it continues to look to Pacific Rim nations for new opportunities. It will launch flights from Honolulu to Taiwan and New Zealand in 2013, and nobody would be surprised to see other new destinations also added. This follows the recent expansion of services to Australia, and new routes to Japanese cities and South Korea. All of this is part of Hawaiian's plan to reduce its reliance on the highly competitive routes from the Western U.S. to Hawaii. The airline will also be looking to increase its coverage of its local market, as it plans to launch a new regional turboprop subsidiary.
WestJet is looking to give Air Canada a run for its money next year. The launch of a new regional feeder operation called WestJet Encore is sure to heighten domestic competition. Encore intends to reach smaller communities, and the carrier says fares could dip 50% below those charged by rivals on comparable routes. Could a price war result? The answer to that will become apparent when Encore launches in the second half of the year. One thing that does seem certain is WestJet's commitment to the venture, with 20 Bombardier Q400s on firm order and options for 25 more. The Canadian low-cost carrier has been vocal about the advantages of Encore over competitors, but it will soon be up to consumers to decide.

Air Canada will make an aggressive push into new international markets next year—if all goes as planned. The carrier is awaiting government approval to begin non-stop Toronto-Istanbul service on June 4, as a gateway to Turkey, Central Asia, the Middle East and Africa through a code-share with Turkish Airlines. This expansion could prove particularly valuable for Air Canada as competition stiffens on its home front, where WestJet's planned new regional operation could significantly undercut Air Canada's fares. Although Air Canada remains confident that its hold in domestic markets will remain strong, the new international markets could be important to its fortunes in 2013.
The merger of Chile's LAN Airlines and Brazil's Grupo TAM in 2012 created Latam, one of the world's largest carriers by market capitalization, and furthered airline consolidation in Latin America. Latam expects demand to remain strong throughout South America and is adding capacity in the region. The carrier is taking a page out of the low-cost-carrier playbook and altering its product on short-haul regional routes to compete more effectively with startups and LCCs. The one blight on the forecast is Brazil, where domestic demand has cooled. TAM is shifting its focus to international routes and pulling capacity out of its domestic Brazil operations, but it is poised to grow, should demand recover.
Whether Mexicana DE Aviacion finally emerges from bankruptcy protection and resumes operations is the story to watch in Mexico this year. Newly inaugurated Mexican President Enrique Pena Nieto vowed on the campaign trail to resurrect Mexicana, but it remains unclear if he will make good on that promise. A bankruptcy court dismissed an investment group that had pledged to recapitalize the airline, and although several investors have expressed interest, the court has yet to approve a new restructuring plan. Since Mexicana's grounding, Interjet has emerged as the country's largest domestic carrier and, along with Volaris and Aeromexico, it has filled the gap left by Mexicana.
A major overhaul of Qantas's international operations is going to have serious ramifications for the other big players in Australia's long-haul markets next year. The most significant change will see Qantas partnering with Emirates, giving the pair a more dominant position in the highly contested Australia–Europe market. The link-up will enhance Qantas's network into Europe but will make life more difficult for carriers, such as Singapore Airlines, that draw a lot of revenue from the so-called Kangaroo routes. Next year will also be important for Qantas low-cost subsidiary Jetstar, which is due to take delivery of the first of its 15 Boeing 787-8s.
Jetstar Japan is on this list as a proxy for the three Japanese low-cost carriers that were established in 2012—the other two being Peach and AirAsia Japan. LCCs are a relatively new phenomenon in Japan, and while their fleets of narrowbody aircraft are still small, they are already having an impact on the market. This will be amplified in 2013 as they add new aircraft and continue their expansion into domestic and international markets. Peach and AirAsia Japan were set up as joint ventures by All Nippon Airways, while Japan Airlines set up the Jetstar Japan joint venture. The coming year will provide more clarity on how much traffic the upstarts will siphon from their mainline parents.
China's Spring Airlines is a budget carrier that is a potential threat to the lumbering state airlines, with service and cost levels closely matched to the needs and wallets of Chinese fliers. The experience of low-cost carriers in Southeast Asia suggests that China is superb territory for this model: Income levels there, though varying by region and city, compare closely with those of Indonesia, Thailand and Malaysia, where budget carriers have become dominant. So far, Spring has not been able to realize anything like its growth potential, as it has only about 30 Airbus A320s. But with a new administration taking control in Beijing, market-based reform in aviation could yet appear—to the benefit of Spring.
Tianjin Airlines is the leader in the current fad of subsidized local subsidiaries of Chinese mainland airlines. It is an offshoot of Hainan Airlines backed by the Tianjin city government. Since Tianjin Airlines was formed in 2009, such carriers have been popping up all over China. How big can they grow? Pretty big, if the ambitions of Tianjin Airlines are anything to go by. Originally an operator of Embraer ERJ regional jets, the carrier now uses mainly Embraer 190s, has begun introducing Airbus A320s and has plans for A330s that it could fly on intercontinental routes. Tianjin is a large and well-developed city, and many others are following its example with locally based subsidiaries of the major carriers.
The AirAsia group appears set to make acquisitions next year so it can expand its footprint farther across Asia. Possible takeover targets include Zest Air in the Philippines and T'way and Eastar in South Korea. The group is also believed to be eyeing potential opportunities to launch a carrier in Cambodia. To help fund its expansion and boost its balance sheet, AirAsia plans to float some of its businesses. Its Kuala Lumpur-based, medium-haul low-cost carrier AirAsia X aims to have an initial public offering early in 2013 on the Kuala Lumpur stock exchange. AirAsia also wants to float its Indonesian affiliate, Indonesia AirAsia, on the Jakarta stock exchange.
Lion Air is set to shake up Southeast Asia's airline industry next year. Its Malaysian affiliate Malindo Airways is due to start flying in the first half of 2013 and will compete head-to-head against Malaysia's AirAsia. Malindo may also capture some traffic from Malaysia Airlines, because Malindo will offer frills such as free checked baggage and inflight entertainment. Lion also recently established a Singapore-based aircraft leasing company called Transportation Partners. The airline has a large order-book for 737-900ERs and Boeing 737 MAX aircraft, and Transportation Partners' remit is to secure aircraft financing and place some of these aircraft with other carriers around the globe.
Singapore Airlines (SIA), under CEO Goh Choon Phong, has been transformed from a carrier focused on the premium segment to an airline group with a range of brands for different market segments. No longer content to be reliant on the slow-growing premium business, the group aims to tap into all market segments with its portfolio: SIA mainline (premium), SilkAir (premium short-haul), Tiger Airways (low-cost short-haul) and Scoot (low-cost medium-haul). Tiger and Scoot plan to add aircraft next year, as does SilkAir. In terms of route expansion, China will be a key focus for the group in 2013. It may also look to strengthen relations with Star Alliance partner Air China as another means of accessing China.

Africa's first low-cost carrier, Fastjet, achieved a load factor of 78% on Nov. 28—not bad for its first day of operations. But the jury is still out as to whether the low-cost model will work in Africa, or if the lack of infrastructure and liberalization as well as political opposition will prevent it from becoming as successful as it is in most other parts of the world. Fastjet plans to operate up to 15 aircraft by the end of 2013 and wants to expand beyond its initial base in Tanzania, at least to neighboring Kenya. But the real breakthrough will come if the airline becomes established in the south and west of Africa.
Ethiopian Airlines, based in one of the world's poorest countries, has had an impressive track record in recent years. It joined the Star Alliance and became the first African airline to take delivery of the Boeing 787. Now, with its 787 fleet growing, Ethiopian has to make the next transformation—upgrading its onboard product to industry-standard levels. The airline aims to build a long-haul network between Africa and Asia, so it must compete not only with the onboard products of Asian airlines, but also with those of the big three Persian Gulf carriers. In its efforts to quadruple sales by 2025, Ethiopian also has to further develop its African network and its Togo-based affiliate, ASKY Airlines.
The coming year will be pivotal for South African Airways as it looks to establish its future direction. The airline is in a leadership crisis once again, following the departure of CEO Siza Mzimela in late 2012. South Africa's government has also had to inject a further 5 billion rand ($576 million) into the airline to keep it afloat. The carrier now has to find a new CEO who can craft a strategy that will turn it into a sustainable business again. SAA has to determine where it can grow and how it can participate in the expected development of air transport in the continent. It is looking again at joint ventures in other African countries such as Ghana, although previous efforts have failed.
Qatar Airways prides itself on its five-star service levels, although until now that description would not have applied to its main hub airport. The terminals at Doha are nice, but with no contact gates available, all passengers have to be bused across the airport, sometimes with multiple stops. That will all soon change when the New Doha International Airport (NDIA) opens in 2013. The exact opening date has not yet been made public, following delays in the completion of lounges in the terminal. But once NDIA is ready, Qatar Airways will for the first time have a home base that is designed for connecting traffic.
Etihad Airways has bought shareholdings in Air Berlin, Aer Lingus, Air Seychelles and Virgin Australia, and if CEO James Hogan has his way, this is only the beginning. Etihad appears to be preparing to pursue more acquisitions in Europe and possibly one in India, which would make it an even more serious player in the international long-haul market. At the same time, Etihad will have to prove in 2013 that its current investments are paying off. While Virgin Australia—which is also partly owned by Singapore Airlines and Air New Zealand—looks good, there are major questions about whether its riskiest investment, Air Berlin, can be turned around.
Vueling's impressive performance over the past few years could turn out to be a blessing and a curse. The airline is doing so well that International Airlines Group, which is already a shareholder, plans to fully acquire the carrier in 2013. The question is whether that will be a major advantage or impact the business model and reduce Vueling's ability to grow in its niche. Vueling has been one of the most creative low-cost carriers with CEO Alex Cruz at the helm, and it is going against traditional LCC behavior by opening up to connecting traffic and cooperating with legacy carriers. So far it all looks good, but major challenges are still ahead.
Only a year or so after the merger of Iberia and British Airways, the International Airlines Group (IAG) is already in crisis mode. This time, all attention is on Iberia, which has to implement a draconian cost-savings and capacity-reduction program. This will see the airline withdraw from essentially all European routes that are not needed as feeders for its long-haul network to Latin America. Iberia is also axing 20% of its workforce, and IAG says still more drastic plans are in the cupboard if agreements cannot be reached quickly with unions. As the examples of SAS Scandinavian Airlines and others show, unions have few options to oppose such restructuring moves in tough times.
Germanwings is taking over all Lufthansa short-haul flights except the feeder network into Frankfurt and Munich on Jan. 1. Lufthansa—Germanwings' parent—has finally concluded that it cannot operate short-haul flights profitably while competing against low-cost carriers. The move to allow Germanwings to grow has been long overdue, many observers believe, but internal group politics and concerns over brand dilution had kept Lufthansa from going ahead with it. Now, within a short space of time, Germanwings has to integrate 35 more narrowbody aircraft as well as cabin crew and pilots, and take over dozens of routes. In 2013, it will become clear how the transition is progressing.
Like Iberia and Lufthansa, the Air France part of the Air France-KLM group is in the midst of a major streamlining exercise that it expects will make it 20% more efficient. Putting its short-haul operation back on track is only one of the tasks that Air France has to address in 2013. Its bilateral alliance with Etihad Airways has to be implemented, along with new code-sharing arrangements with Air Berlin, both of which represent deals outside of the SkyTeam alliance. But of even more strategic importance, the group has to determine if it wants to grow further by taking a larger stake in Alitalia or investing in other subsidiaries.
With Andrew Compart, Christine Grimaldi, Darren Shannon and Madhu Unnikrishnan in Washington; Leithen Francis in Singapore; and Bradley Perrett in Beijing.





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Boeing Holds 747-8 Destined For Lufthansa For Test Work

December 20, 2012
Joe Walker

Lufthansa and Boeing have agreed that a 747-8 previously allocated for delivery to the airline will now become a dedicated test aircraft for a set of airframe, system and engine improvements due for delivery in late 2013.
The aircraft, Line Number 1435, first flew in April 2011 but has already been used for some upgrade testing and will now continue in this role rather than be refurbished for Lufthansa. The move, which was triggered by the need to flight test a revised tail fuel system for activation on later aircraft, means that Lufthansa’s firm order book backlog reduces from 20 to 19, though the airline hints that this may only be a temporary reduction.
Lufthansa is still scheduled to take five 747-8s as planned in 2013, and 10 more aircraft by the end of 2015 that will incorporate the lighter structure and improved systems and engines. The airline currently has four 747-8s in service.
Explaining the decision, the German carrier’s 747-8 chief pilot Elmar Boje says the extensive flight test modifications already made to the aircraft would mean that, even after post-test refurbishment, the unit would be a non-standard “white elephant” in the Lufthansa fleet. However, he adds the airline’s long-range fleet group is due to decide on adding additional aircraft by the third quarter of 2013, some of which could include 747-8s.
Although the decision effectively shrinks Boeing’s overall 747-8 backlog to 71, the manufacturer is putting a brave face on the move because a variety of upgrade testing, including the General Electric GEnx-2B performance improvement package (PIP), can now be bundled into one dedicated certification effort. “The plan was to use a 747-8F freighter for the PIP flight test, but when we de-activated the tail fuel we needed an -8 Intercontinental” to flight test the revised system, says 747 vice president and general manager Elizabeth Lund. “That’s when we started our conversation with Lufthansa.”
The aircraft, originally destined to be Lufthansa’s fifth 747-8, will be used for flight testing throughout 2013 and refurbished for onward sale in 2014 as either a standard airliner or for possible business jet modification.
“Lufthansa opted to take a new aircraft instead in 2014,” says Lund. “So as a result, we had to pull this one out and delay delivery to next year. Lufthansa reserves the right to add another at the end. We asked to use it, and it was already instrumented for tail fuel testing. So all in all it’s a good business decision by them,” she adds.
Improvements to be tested next year are concentrated on the upgraded engine configuration and tail tank fuel system, though also include updates to the flight management computer (FMC) to incorporate additional required navigation performance features and a ‘quiet climb’ function.
The FMC 3.0 load is scheduled for the end of 2013.

The 747-8 passenger model’s 3,300 gal. tailplane fuel tank was de-activated before the first aircraft entered service after analysis indicated that, under certain fuel load circumstances, the tail tank could induce flutter.
Re-activation of the tail fuel tank will provide added range and improve the aircraft’s performance says Lufthansa’s Boje. The extra weight of the fuel in the aft of the aircraft can be used to assist in trimming the 747-8 to lower cruise drag. The 747-8’s fuselage extension “tends to be nose heavy so we might gain performance,” he adds.
Lufthansa also plans to ask Boeing to study minor software changes to the fuel transfer system which would extend the length of time the fuel remains in the aft tank, which would increase the trim benefit.


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Pratt & Whitney Readies First A320NEO Engine For Testing

October 26, 2012

Pratt & Whitney (P&W) next month expects to start the first test runs of the PW1100G for the Airbus A320NEO following its official completion today in Florida.
The event marks a major milestone for P&W’s two decades-long campaign to develop geared turbofan technology for the mainstream single-aisle market. The engine is due to be certified early in the third quarter of 2014, and should power the A320NEO for the first time on its initial test flight a few weeks after that.
P&W currently has 1,036 PW1100G engines on firm order for the A320NEO, or slightly under half the overall market that has so far selected an engine. The first P&W-powered NEO is due to enter service in October 2015.
The engine manufacturer plans to fly the PW1100G on its Boeing 747SP flying testbed in the second quarter of 2013—a few months before the competing CFM Leap-1A engine is due to fire up for the first time.
CFM expects to start flight testing the first engine in 2014, and according to Airbus will enter service late in the second quarter of 2016, roughly eight months after the P&W-powered version.
P&W is building eight PW1100G engines for the test program, and will likely begin assembly work on the initial flight compliant production engines in late 2013 to support the Airbus flight test and certification effort.
This is scheduled to include four aircraft: two A320; one A319; and an A321. The final version to fly with the PW1100G will be the A321NEO in late 2016, says Airbus A320NEO family Senior VP Klaus Rowe.
P&W Commercial Development Chief Engineer Graham Webb says hopes are high for a shorter flight test effort on the NEO engine thanks to lessons learned on the Bombardier CSeries and Mitsubishi MRJ test efforts. Certification of the PW1500G for the CSeries is expected shortly, with paperwork now in the process of being submitted to regulatory authorities, Webb adds, noting, “We’re trying to get more efficient in our test program,”
Rowe says Airbus is applying the same ‘lessons-learned’ process to shortening the test cycle for the NEO itself with over 2,000 “lines in the database” collected from recent test efforts ranging from the A380 to the on-going A320 sharklet.


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Pratt & Whitney Starts Flight Tests Of MRJ Engine

May 02, 2012

Flight tests of the PW1200G geared turbofan for Mitsubishi’s Regional Jet (MRJ) got under way at Mirabel, Canada, on April 30.
The engine was flown on Pratt’s second Boeing 747SP flying testbed, which is modified with an upper fuselage-mounted stub wing to test smaller turbofans and turboprops.
Pratt & Whitney expects to run through the initial flight test campaign as planned despite Mitsubishi’s announcement in late April that it has delayed delivery of the first aircraft by up to two years, to the first quarter of 2016. First flight, previously slated for this quarter, is now expected to take place in the fiscal year beginning April 1, 2013.
The flight test engine joins three other complete MRJ units and a core PW1200G in the evaluation campaign.
The MRJ engine enters flight test as Pratt starts the final stages of certification for the 24,000 lb. thrust PW1500G engine for Bombardier’s CSeries. “We have four key tests in front of us,” says Bob Saia, Pratt & Whitney VP-next generation product family.
Engine 805 is in the company’s Middletown, Conn., assembly and test site in readiness for the flocking bird strike test, in which several carcasses will be fired into the engine. At least one of the birds must pass directly into the high-pressure compressor inlet for the test to count, adds Saia.
Another engine, 806, also is being readied for a third and final flight test on Pratt’s first Boeing 747SP. The engine will be used to validate the final software load for the start of flights on the CSeries late this year or early in 2013.
The engine also will include a final improvement package to boost fuel burn. Saia says the final configuration will meet performance guarantees. Flight tests of the production standard engine, including the variable-area nozzle, will take place in July and August.
Other key tests include a full fan-blade-out evaluation in late July, which will clear Pratt’s final production build standard for follow-on manufacture. Another engine will also conduct cyclic endurance testing starting in late July, culminating in a triple “red line” ultimate temperature and speed test.


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Pratt Readies For Start Of MRJ Engine Flight Tests

April 11, 2012
Photo Credit: Mitsubishi

Pratt & Whitney confirms the first flight test of the PW1200G geared turbofan for Mitsubishi’s Regional Jet (MRJ) on the company’s Boeing 747SP flying testbed is scheduled within the next two weeks.
The PW1200G will be the third version of the GTF to fly following initial flights of the proof-of-concept PW6000-based demonstrator in 2008 and, more recently, the initial production PW1500G variant for Bombardier’s CSeries. Pratt also confirms that the PW1500G completed its second flight test campaign last month, logging 130 flight hours and 26 flights.
The first MRJ engine to fly, PW1200G test unit 404, is the smallest member of the PW1000G GTF family and also the first to fly on the company’s second 747SP. Unlike its higher-powered siblings, the MRJ engine has a smaller 56-in.-diameter fan and a thrust rating range of 15,000-17,000 lb.
Because of these changes, Pratt is testing the engine on a specially designed side strut adaptor mounted to the fuselage of the 747SP, rather than placing it under the wing in the No. 2 inboard position, as on the first testbed.
The MRJ engine was transferred to Pratt’s Mirabel, Quebec, site for the start of flight tests following the completion of sea level testing in Florida in February.
The second PW1500G flight test effort for the CSeries program explored engine handling, restart capability and modifications to improve the efficiency of the compressor and fan. The changes were concerned with clearance management, thermal growth and tighter clearances, as well as slight changes to the aerodynamic profile of the production standard fan blade, says Pratt.
Tests were conducted at altitudes up to 41,000 ft. and also included fan stress certification. Bob Saia, VP-next generation product family, says, “We also subjected the propulsion system to substantial flight maneuvers, including negative g testing, which validated system capability.”
A third flight test phase in “late summer” will fly the CSeries engine with the full-up production nacelle and validate the final electronic control logic.
“This will manage the compressor as well as the variable area nozzle,” says Saia.


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Successful Blade-Out Test Keeping Bombardier CSeries Program On Track

September 11, 2012

Pratt & Whitney’s (P&W’s) first production geared turbofan engine, the PW1500G for Bombardier’s CSeries aircraft, has passed a crucial blade-out test, keeping the program on track for certification in the fourth quarter.
The milestone test comes as P&W nears completion of the first shipset of engines for Bombardier’s initial CS100 flight test aircraft at Mirabel, near Montreal. “They will be delivered to Bombardier shortly,” says P&W VP-Development Programs President Bob Saia, adding that the engine program is 90% through the certification process. First flight is expected late this year or early 2013.
The blade-out evaluation, which took place in late August, was one of the two “nail-biter” tests on the road to regulatory approval, says Saia. Two more full engines will undergo endurance runs, “and one of those at the end of 150 hours will do the triple ‘red-line’ test, which is the other nail-biter.”
In the test, one of the PW1500G’s 18 blades was deliberately detached at full power by detonating an explosive charge at its root. The test is designed to show the engine is capable of containing damage without catching fire and without failure of its mounting attachments when operated for at least 15 sec., unless the resulting damage induces a self-shutdown. “It has the highest risk because it has the highest level of unknowns, but the following blade [to the detached blade] was fully intact,” says Saia.
Although “we suffered minor damage to some of the other blades,” the remainder of the engine is in “such good condition we will use it for lightning tests.” Saia also was P&W’s VP for the Engine Alliance and oversaw certification of the GP7200 for the Airbus A380. He says that after the same test on the GP7200, which it passed, the fan rotor seized after 15 sec. and the high-pressure rotor after 3 sec. “After the PW1500G blade-off, in contrast, the engine could still be turned or ‘motored.’ I’ve never seen that done before,” he notes.
The triple red-line evaluation, which is expected to run through early October, will see another engine run for about 60 hr. at maximum fan speed, core speed and exhaust gas temperature to demonstrate its capability beyond the most extreme operating conditions. Another endurance engine, running at about the same time, will be used to verify the initial maintenance interval.
A PW1500G also is in the third and final flight-test phase on one of P&W’s Boeing 747SP flying testbeds. The program, which P&W admits began about a month later than scheduled, incorporated the latest software changes from Bombardier. It is the first to validate a fully compliant variable area nozzle and thrust reverser. Tests will “confirm the software logic and validate that for Bombardier’s flight readiness,” says Saia, who expects the flights to conclude by the end of September.
Although acknowledging “there are some sleepless nights here,” Saia says problems encountered have been “the normal optimization you’d hope to do in a situation like this.” Despite some early issues with inadequate tip clearances and endurance of some parts, all of which he says are now corrected, Saia eplains “. . . we are tickled pink with the performance. We will hit our contractual obligations on fuel burn, weight, noise and emissions on the first Bombardier engine to enter service.”
Saia says that while fuel burn on the first flight-test engine shipsets “will be under [guarantees] by 1%,” he adds planned improvements for the PW1500Gs on the fourth aircraft will bring it up to specification. The company, which base-lined a 15% fuel burn improvement for the larger CS300 variant over the CFM56- and V2500-powered Airbus A319, expects to regain some performance through efficiency improvements now under test on the sixth development engine. In addition, the engine is “better than spec” for weight after the fan blade-out tests showed the planned structural margin was not required.


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Test Run Underway For First A320NEO Engine

December 17, 2012
The PW1100G fired up on the first attempt Nov. 28 the Pratt & Whitney West Palm Beach, Fla. test site.Pratt & Whitney

Guy Norris Los Angeles
A full moon hung over Pratt & Whitney's test site the night its Airbus A320NEO engine ran for the first time. Whether this was a good omen or not, the company knows only a successful test effort will prove if its pivotal gamble on geared turbofan technology was correct.
Pratt began its march back into the single-aisle mainstream at 11 p.m. on Nov. 28, when the first PW1100G NEO engine fired into life on the company's West Palm Beach, Fla., test stand. “The first time we put power to the igniter it lit,” says the engine maker's Next-Generation product family Vice President Bob Saia. Since then, the engine has been taken through a 'break-in' cycle from idle to full thrust, ensuring the mechanical integrity at various power levels before clearing the PW1100G for the remainder of the forthcoming test effort.
Although it is too soon to know whether the engine is on track to meet critical fuel-burn targets, the overall performance from a temperature and speed perspective “is right on pre-test predictions,” says Saia. “We haven't yet got a true calibration in terms of fuel efficiency,” he adds. Mechanically, the engine has completed the break-in cycle testing with “no anomalies. We're really pleased with what we got.”
The initial work allows Pratt to make some design tweaks to optimize the engine at the early stages if needed. It also incorporates lessons learned from the two forerunner geared turbofan (GTF) developments, the PW1500G for Bombardier's CSeries airliner and the PW1200G for the Mitsubishi Regional Jet (MRJ). “On the PW1500G, for example, we had an unexpected rub in the last stage of the low-pressure compressor. This wasn't due to the way we broke in the engine, but because of the way it was designed,” says Saia, who adds that a quick change corrected this “subtlety.” Similarly, the initial runs also indicated that designers had allowed too much clearance in the PW1500G high-pressure compressor, which had to be tightened.
Testing now is focused on measuring the effectiveness of the engine's secondary flow system to adequately cool and seal the turbine, and other hotter running stages, as well as the various cavities. “So this first engine is involved in a lot of first-of-model testing, and evaluations of the fundamental architecture. So if we uncover anything, we will have time to adapt the design,” Saia says.
The second and third engines are in assembly with the second expected to start tests around mid-February. This will be used for operability and performance trials, as well as fan work that will include crosswind testing to check the ability of the inlet and compressor to handle various simulated angles of attack. For “fan-mapping” tests, the engine will be fitted with flapper valves to form a rudimentary variable area fan nozzle to alter the pressure ratio. “We also want to characterize the structural element of the fan for operability as well as for stress or flutter,” Saia adds. The same engine will be flown in the second quarter of 2013 on Pratt's Boeing 747SP flying testbed with a production-representative variable nozzle.
The third and fourth test engines will be heavily instrumented “stress-test” units aimed at gathering strain-gauge measurements of the high- and low-pressure spools, respectively. The sheer amount of internal wiring required for these measurements means the stress-test engines enter the build cycle much earlier, says Saia. Here again, Pratt hopes to take advantage of work already performed on the PW1500G. “We have completed all of the certification testing on things like aerofoil stress (on PW1500G), so before the PW1100G starts testing we've already got the fundamentals of it characterized. There may be differences in the lengths of the blades and such, but it takes a lot of risk out of the early engines. That is not to say we still may not break a motor now and then.”

Engine certification is targeted for August 2014, providing adequate margin before the first flight of the Pratt-powered A320NEO, which is planned for early in the fourth quarter that year. In all, eight PW1100Gs will be involved in the test program, which is divided into two main blocks. The first block involves the engine now under test as well as three sister units. Performance and operability characterization, sea level tests and evaluation of systems will be conducted on these. Block 2 engines will undergo evaluations required for simultaneous FAA and EASA (European Aviation Safety Agency) certification such fan blade out, bird ingestion and cyclic endurance. Entry-into-service of the first PW1100G-equipped A320NEO is scheduled for October 2015.
A virtually identical version of the PW1100G is also in development for the Irkut MS-21, which is due to enter service in 2017. Pratt completed the critical design review of the PW1400G variant with the Russian manufacturer in November, says Saia. The key differences to the NEO engine involve the “arrangement of the external packaging,” adds Saia, referring to the positioning of the accessory gearbox and hook-ups for power and aircraft systems extraction.
Pratt and Irkut are also working with Bombardier-owned Shorts of Belfast, Northern Ireland, on development of the nacelle. “We are in the last stages of finalizing the nacelle architecture, and will be testing it in early 2014,” Saia says. The nacelle deal, which was announced in June 2012, was a breakthrough for Shorts, which had seen its market share in nacelle work gradually eroded in recent years by competition from the U.S. and France. Although it currently produces complete nacelles for the General Electric CF34 and Rolls-Royce BR710, as well as components for Rolls's Trent 700 and International Aero Engines' V2500, the MS-21 is the company's first significant work for a next-generation airliner.
Until the MS-21, all the nacelles for Pratt's GTF series were produced by Goodrich, a company now known as United Technologies Aerospace Systems since becoming part of Pratt & Whitney's parent company earlier this year. Safran's Aircelle is providing the nacelle for the CFM Leap-1A, which competes with the PW1100G on the A320NEO, as well as for the Leap-1C-powered C919 in development by Comac of China.
Pratt and Irkut also signed a definitive agreement earlier this year to confirm the PW1400 as the only Western engine option on the MC-21. The agreement came 2.5 years after Irkut chose Pratt's geared turbofan for its new family of 150-210-passenger aircraft. Irkut plans to complete design work on the MC-21 by year-end and to make the first flight in 2016. The indigenous Aviadvigatel PD-14A turbofan will be the alternate powerplant.
Despite the fact it will already be running the identically configured NEO core engine, Pratt will begin development of the PW1400G with a dedicated test unit for Irkut, says Saia. However, the company plans to convert two NEO Block 1 test engines into MS-21-configured Block 2 standard for certification of the engine for the Russian airliner.
Meanwhile, development testing continues of the PW1200G for the delayed MRJ. “We have completed all Block 1 testing and finalized the Block 2 design,” says Saia. More than 1,600 hr. of testing have been accomplished, and the first Block 2 engines will be assembled in the second quarter. Certification testing is due to begin by mid-year with Federal Aviation Regulations Part 33 approval expected late in the fourth quarter “or early 2014,” Saia adds. Engine development has slid to the right to stay in line with the aircraft schedule, which Mitsubishi announced in April has been delayed by more than a year to 2015. However, Pratt says this is deliberate. “We like the engine to be close to the aircraft schedule so if anything changes on the aircraft, like accessories, we can use the last certification tests to qualify to the required standard,” Saia adds.


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MTU Pushes For Participation In 777 Replacement

September 11, 2012

MTU Aero Engines already expects its revenues to effectively double by 2020, but it is counting on more programs to emerge that would ensure further growth.
CEO Egon Behle says the engine manufacturer is in talks to participate in several additional programs, including with General Electric (GE) and its possible new offering for the Boeing 777 and a re-engined Embraer 170/190 family.
“There is a strong likelihood that we will be together with GE (on the 777 replacement),” Behle said on the sidelines of the ILA Berlin Air Show. “There are intense discussions ongoing, but no papers have been signed yet.”
Boeing is currently considering its options for a replacement of the current generation 777 and has said it plans to make a decision on the basic direction by the end of this year. It is expected that whatever the new aircraft looks like, it will be equipped with new engines, too.
Behle also says that there are discussions ongoing with Embraer to re-engine the Embraer 170/190 and says that the geared turbo fan “would fit very well”.
MTU now has an 18% share in the Pratt & Whitney-led PW1000G programs.
GTF work is providing the bulk of the planned growth until 2020, but MTU also sees its existing business expanding. That will lead to the company opening more sites and expanding existing ones. MTU is in the process of buidling a blisk factory in Munich, where its headquarters are located. It is also considering expanding facilities at MTU Aero Engines Polska. Behle says that between now and 2020 there will be more bases opened in Latin America, the Middle East and Asia, particularly for its maintenance, repair and overhaul (MRO) activities.
Behle sees big potential for business jets in Asia, where that segment “is only just starting. The demand will be shifting to emerging regions.”
MTU is expecting €3.3 billion in revenues in 2012 and Behle can “already see the €4 billion.”

MAS Orders 20 More ATR 72s

December 18, 2012

Malaysia Airlines (MAS) has ordered 20 additional ATR aircraft for its regional subsidiaries, with options for 16 more.
Of the 36 orders and options, MAS turboprop operations Firefly and MASwings will be allocated 20 and 16 aircraft respectively, Firefly CEO Ignatius Ong tells Aviation Week. He says first deliveries will be in the second quarter of 2013. All the new aircraft are understood to be ATR 72-600s, ATR’s newest model.
Firefly currently operates 12 ATR 72-500s, and MASwings operates 10. Neither had any ATRs left on order, but Ong told Aviation Week earlier this year that Firefly and MASwings planned to order ATR 72-600s. ATR is ending production of the -500 model.
Firefly is based in west Malaysia, while MASwings is based in East Malaysia. It is understood that Firefly has been considering the merits of establishing an offshoot in Indonesia. Ong, however, declines to confirm this. “We keep all options open, but none is planned as of now,” he says.
In a separate development, ATR is competing against Bombardier to secure an order from Garuda Indonesia’s Citilink.
Industry sources say Citilink is due to make a decision as early as Dec. 18 and no later than Dec. 21. Garuda has said the order will be for 50 aircraft, but this number includes options. Industry sources say the initial deal will be 25 firm orders and 25 options.


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Avio Purchase Strengthens GE Engines

December 24, 2012

Michael Mecham San Francisco, Guy Norris Los Angeles and Amy Svitak Paris
General Electric is pulling more aero engine technology under its roof with the $4 billion purchase of Avio SpA, the Italian transmission, gearbox and turbine specialist that is simultaneously helping GE and rival Pratt & Whitney develop some of the era's biggest commercial engine programs.
Formal announcement of the deal was expected Dec. 21 in Naples, although it must pass European and U.S. antitrust approval. BCV Investments owns the controlling interest in the Avio Group, which is managed by Cinven and Finmeccanica.
Besides strengthening GE's control over its manufacturing capacity, the Avio purchase also helps ensure the integrity of the Evendale, Ohio-engine maker's intellectual property. When prime contractors bring in risk-sharing partners on new product development, they spread their financial risk. At the same time, they increase the possibility that their intellectual property will drift away. Strict controls of IP are every manufacturer's goal. There is no suggestion in the Avio purchase that IP has been a problem.
But the manufacturing process has become so complex that primes often must share IP with key suppliers—and vice versa—in order to derive all the advantages of including a specialist manufacturer into the fold of design and development.
With demand for its engines higher than ever, GE Aviation is stepping past potential IP problems while increasing the vertical integration of its manufacturing base by capturing the skills sets of suppliers through acquisitions or joint ventures. Its joint venture with Safran Group's Snecma unit that created CFM is its template for industrial cooperation.
The Avio announcement is another in a string of acquisitions and joint ventures GE has made in just the past two months. They include a JV with Parker Aerospace to develop an advanced fuel-nozzle technology center in Clyde, N.Y., and the acquisition of Morris Technologies and Rapid Quality Management of Cincinnati, to expand GE's use of additive technology and advanced machining for combustion chambers.
More expansion is anticipated. In a matter of weeks, GE is expected to complete the permitting process for two additional engine test cells, one at its main Peebles, Ohio, test and development center and another at an unnamed facility outside the state. The company has ramped up its capacity in composite fan blade production by adding two factories in Mississippi. And in the next few weeks, it is expected to announce a deal that will take it in quite a different direction—a joint venture to produce specialty forgings.

GE's external expansion is a standout, but on a smaller scale others have been busy. GKN's purchase of Volvo Aero Engines moves it beyond parts and components into full engine production. Pratt & Whitney and Rolls-Royce are counting on internal development to grow their aero engine programs. However, Pratt will benefit with a closer relationship with Goodrich Aerospace, a long-time industrial partner on nacelles, including for the geared turbofan (GTF) engine series. Having been purchased by Pratt's parent, United Technologies, Goodrich is now part of UTC Propulsion & Aerospace Systems.
With the strength of CFM's control of about 75% of the market for single-aisle transports, due largely to being a sole-source engine on the 737 NG and 737 MAX—plus its own dominance on Boeing's widebody products—GE is claiming its share of the general upsurge in engine sales that is being felt across the industry as airframe production rates rise. Together with CFM, GE will see engine production increase from 2,270 this year to 2,785 in 2014.
Avio's rise as a supplier started in 1976 with a contact from Pratt for the PW2037. But since the 1980s, starting with T700s for U.S. Army helicopter programs, GE has become Avio's biggest customer, accounting for about 65% of current revenues. The shift became most evident in the 1990s when Avio emerged as a risk-sharing partner on the GE90 for the Boeing 777. It was further strengthened when Avio won the drive train and low-pressure turbine contracts for the GEnx that powers the 787 and 747-8. Already a CFM56 supplier, Avio signed a March 2012 agreement to help develop its successor, the Leap for the Boeing 737 MAX, Airbus A320NEO and Comac C919 programs.
Still, Avio has maintained close relations with Pratt, largely through the International Aero Engine consortium that Pratt helped found to build the V2500 as a competitor to the CFM56 on the A320 and other Airbus products. Specifically for Pratt, Avio supplies components for the Pratt PW4000 and PW2000 engines, the latter now being produced only for the Boeing C-17 military transport. The Italian supplier also works with Pratt & Whitney Canada on the PW150 turboprop that powers the Bombardier Q400, and on a turboshaft version of the PT6.
In 2011, Avio signed a long-term agreement to supply the fan drive gear for the PW1500G GTF engine that will power the Bombardier CSeries regional jet. This strong link with the GTF is expected to be worth more than €4 billion ($5.3 billion) for Avio over the next 20-plus years. In 2012 Avio expanded its GTF role when it was selected to provide the gear system, transmission and oil tank for the PW1100G engine now starting tests for the NEO.
Besides the fan drive gear system, Avio is producing the accessory drive gearbox and the mid-turbine frame for the PW1500G. One of the main parts of its deal with Pratt includes rights to participate in the engine's maintenance and overhaul network. Avio called its first GTF production contract “the crowning achievement of years of study and investment with Pratt & Whitney,” a sentiment amplified by the subsequent deal on the PW1100G. Avio developed prototypes of the gear systems at its plants in Turin and Naples, Italy.
With the Avio purchase, GE becomes a supplier of engine programs across Europe. A GE Aviation spokesman noted that such cross ties are not unusual; when GE bought the former Smiths Aerospace, it inherited components contracts with both Pratt and Rolls-Royce.
Avio is heavily involved with Rolls-Royce, notably providing components for the Trent 900 that powers the A380 and producing the afterburner for the Eurofighter Typhoon's EJ200, on which Rolls led the development. Avio also is a partner on the Snecma-led SaM146 engine for the Sukhoi Superjet.
Avio's 2011 revenues topped €2 billion with pre-tax earnings of €348 million, a 13% rise from 2010. The company's orderbook was valued at more than €6 billion. Engines accounted for 83% of its revenues; space propulsion was 15%.
GE is not interested in Avio's space propulsion unit. Safran is regarded as most likely to acquire it through its Snecma motors division. Snecma and Avio are 50:50 shareholders of Paris-based Europropulsion, which develops and commercializes solid rocket motors for European launch vehicles, including the Ariane 5 heavy-lift launcher and Italy's new Vega light launcher, which made its successful inaugural flight in February. Avio also is a 70% shareholder in ELV, the prime contractor for Vega. Italy's ASI space agency owns the rest.


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Kingfisher Airlines Files Revival Plan

December 26, 2012

Grounded carrier Kingfisher Airlines has submitted an interim revival plan with Indian regulators, in an effort to gain a reprieve from the expiry of its operating license on Dec. 31.
The airline’s limited restart plan was submitted to the Directorate General of Civil Aviation (DGCA) on Dec. 24, a Civil Aviation Ministry official says.
“Kingfisher Airlines has proposed to restart flights with five Airbus jets and two ATR turboprop regional aircraft,” according to the official. “The airline has proposed to increase the fleet to 10 Airbus and 11 ATR aircraft within 10 weeks of resuming operations.”
However, the government has not yet made a decision on renewing the airline’s operating license. “We [the ministry] will seek additional details from the airline, including its financial condition, before considering its plan,” the official says.
Kingfisher is reported to have indicated to the regulator that it will require about 6.5 billion rupees ($118 million) over the next 12 months to run its operations, and the funds will be channeled from parent company UB Group because lenders are unwilling to fund the airline.
“There is no date yet for the airline restarting operations,” a source says. “It will take the DGCA a few days to examine the airline’s interim plan. After the DGCA gives the go-ahead, it will take 6-8 weeks for the airline to begin operations.”
Debt-ridden Kingfisher Airlines is currently in talks with various potential investors, including Etihad Airways, regarding the sale of a large stake in the carrier.
Labor unrest over unpaid salaries followed by the suspension of its operating license forced a complete shutdown of Kingfisher’s daily operations from Oct. 1. The DGCA has also suspended the airline’s Scheduled Operator’s Permit.
The DGCA has said that in order to gain approval to fly again, the airline has to give an assurance about the implementation of its operational and financial plan.

Iberia Poised For More Downsizing

August 13, 2012
Iberia plans to address unacceptably high costs in its long-haul operations, the core of its business.Airbus

Jens Flottau Frankfurt
When British Airways and Iberia formed the International Airlines Group (IAG) with their merger early last year, the idea was to make both airlines stronger. But the IAG example shows that mergers don't help if flaws in the underlying business model are not addressed properly.
IAG finds itself in an awkward position. While British Airways is performing reasonably well under the current circumstances, Iberia is turning into a serious problem that has so far been underestimated and that does not seem prone to quick or easy solutions.
CEO Willie Walsh says that a “much broader and deeper restructuring” of Iberia is needed. The changes will be based on “a fundamental review of every aspect of the business.” That review is likely to lead to further downsizing and a reshaped network. The results are to be presented by the end of September, illustrating the urgency of the matter. Because of Iberia's troubles, IAG no longer expects to reach a breakeven result in 2012, but rather anticipates a “small operating loss.”
While British Airways managed to eke out a £12 million ($18.7 million) profit in the first half of 2012, Iberia posted a €263 million ($323 million) loss, almost twice as much as a year earlier. And as BA grew capacity (5.9%) and traffic (9.1%), demand for Iberia's services was down 3.6%.
What must be extremely worrying to IAG is that Walsh says that Iberia's long-haul routes, which historically have cross-subsidized the money-losing short- and medium-haul operations, are also part of the problem. “The long-haul cost base is unacceptable and completely out of line with the market,” Walsh concedes. “The historical levels of profitability are not sufficient.”
Iberia's long-haul network to Latin America is its core business. No other airline has a network between Europe and Latin America nearly as extensive. The entire Madrid hub is organized to feed European traffic onto the long-haul services. Iberia has limited exposure to North America, even more limited services to Africa and does not serve Asia with its own aircraft.
The focus on a single market segment is risky even conceptually, but market changes kick in as well. As Air France-KLM and Lufthansa restructure and shift capacity from other markets, they are rediscovering Latin America, a region with strong economic growth and rising demand for air travel. There, more serious competition is emerging through the creation of big airline groups such as Latam (LAN and TAM) and Avianca-TACA. While IAG's two airlines are members of the Oneworld alliance like LAN, they are also competing for the same passengers. And TAM has its own growth plans for Europe.

TAM, LAN and Avianca-TACA are also offering a superior onboard product, making additional investment in Iberia's service levels necessary.
The long-haul woes are compounded by the ongoing problem of not being able to operate short-haul profitably, because costs are too high and the Spanish market has become weaker with the local economy suffering.
Walsh says that Iberia is “chronically uncompetitive against the low-cost carriers,” which long ago made Spain their most important destination.
One move to limit short-haul losses was the introduction of Iberia Express, an affiliate with lower labor costs and significantly higher productivity. But now serious doubts are emerging as to whether Iberia Express can continue to expand as planned.
The airline launched three months ago and has been an operational success so far. It currently flies 10 former Iberia Airbus A320s and reached a unit cost improvement of 30% compared to its parent, 10 points higher than forecast. Another four aircraft are to be added next year as the Express unit has already been profitable in June. “Iberia Express and Vueling (the group's low-cost affiliate) show that it is possible to make money in Spain,” Walsh notes.
However, Iberia may no longer be able to use Express as a cost-savings tool. The airline and its unions have been in arbitration over pay and work rules and the ruling—unpublished—is “unclear and difficult to implement,” Walsh says. If it is not changed, it could effectively lead to a cap on Iberia Express' cost-competitiveness, limiting the carrier to only 14 aircraft. Iberia wanted Express to grow to 40 aircraft and provide a substantial part of its European service by the end of 2015. Those plans now hang in the balance until at least October, when a court is scheduled to resolve the case. Walsh already indicates that while Iberia Express was the preferred option to address short-haul losses, IAG has alternatives. Iberia could outsource part of its network to an operator in which it lacks majority ownership, industry sources say.
Meanwhile, integration of BMI into British Airways is going smoothly. Eight of BMI's 25 aircraft have been taken on the BA air operator's certificate (AOC) and have been rebranded, and 87 pilots and 125 cabin crew have transitioned. BA will not continue to operate BMI's two remaining Airbus A330-200s. It has also decided to shut down low-fare affiliate BMIbaby on Sept. 9.
Iberia may be one of the most difficult restructuring cases among Western European airlines, but it is not unique. While even market leaders Air France-KLM and Lufthansa are in strategic trouble, smaller yet relatively large independent carriers such as SAS Group's Scandinavian Airlines are even more exposed. SAS is suffering because the overwhelming majority of its business is short-haul—and no European legacy carrier makes money on short-haul these days.
SAS has gone through several restructuring programs and leadership changes, with industry novice Rickard Gustafson at the helm since last year. But neither Gustafson nor his predecessors have managed to stop the airline's downhill slide. For the moment, he is responding with more staff cuts. Gustafson says that “delivering productivity gains and cost savings will create redundancies that must be taken out.” The airline is already eliminating around 300 administrative positions and has cut thousands of jobs over the past several years. SAS has not made a profit since 2007.
Gustafson has also launched the 4Excellence program that is aimed at returning the airline to profitability. Unit costs are to improve by 3-5% annually and SAS reached 4% in the first half of this year. However, that is excluding the significant rise in fuel costs. With fuel included, the revenue/cost gap is actually widening and no end of that dangerous trend is in sight. Gustafson also admits that SAS cannot raise fares to compensate for higher costs given intense competition, notably from low-fare rival Norwegian, which continues its strong growth in the Scandinavian market. The uncertainties are so great that Gustafson does not even want to give financial guidance for the full year.

Air Berlin is another of Europe's desperate carriers. The airline was saved late last year by Etihad Airways, which bought a 29.2% stake and became its single largest shareholder. More importantly, Etihad provided $255 million in financing over a five-year period. Only six months later, Air Berlin has drawn on almost the entire credit facility. The carrier admitted that it had used up a €169.2 million Etihad loan by June 30.
The statement illustrates how serious its financial woes have been and how serious they remain. Air Berlin's second-quarter loss widened, reaching €66.2 million, compared to €43 million a year earlier. Sales rose 1.7%, but costs were up 2.5%. CEO Hartmut Mehdorn nevertheless claims the airline is on track to make a profit next year.



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Airline Industry Power Shifts Toward Middle East

June 18, 2012
In addition to its baseline forecast, IATA issued financial predictions based on higher oil prices and a worsening Eurozone crisis. It sees a probability of only 50% for its baseline scenario.

Jens Flottau, Adrian Schofield and Bradley Perrett/Beijing
With huge losses for European airlines and growth in the Asia-Pacific region, the pattern of the power shift in the air transport industry is firmly set. But Middle Eastern airlines are also driving consolidation and securing key positions that give them a tight grip on the industry's general agenda.
The new balance of power comes in several shapes and sometimes is apparent in tiny instances, such as occurred on the sidelines of last week's International Air Transport Association (IATA) annual general meeting in Beijing. But all of them send a strong message. Lufthansa CEO Christoph Franz has been the most vocal opponent of the three big Persian Gulf carriers— Emirates, Etihad Airways and Qatar Airways—criticizing them for being state-owned and subsidized. He believes that the Persian Gulf carriers enjoy other unfair advantages such as access to export financing, low or no taxes and cheap labor. Franz's rage culminated in the statement that the Persian Gulf countries are a “sandpit with money.”
But several high-level diplomatic interventions and a lunch date with Emirates President Tim Clark later, Franz now says he has “high respect for the entrepreneurial achievements” of his new competitors.
Their influence is stronger because Emirates, Etihad and Qatar continue to grow relentlessly, while other regions, and Europe in particular, are suffering. The shift may even lead to new partnerships in some cases. For example, Qantas has fought against the three exhaustively to protect its “Kangaroo route” between Australia and Europe, once a lucrative business. But this month, the Australian carrier said it will take a full-year net loss. Investor shock drove Qantas stock down 32%, shaving $1 billion from the company's market capitalization.
Qantas CEO Alan Joyce, who was still elected as IATA's new chairman of the board of governors, is under immense pressure to deliver improved results. But Emirates was quick to say it is interested in a “commercial arrangement” with Qantas, as Clark said here, noting that Emirates does not want to buy a stake in the largest Australian airline. As the three Persian Gulf carriers are offering attractive connecting services through their Middle East hubs, a deal with Emirates would be similar to admitting defeat for Qantas.
Emirates does, however, want access to local feed in Australia, particularly now that its rival Etihad is picking up a 4.99% stake in Virgin Australia. Etihad CEO James Hogan would like to increase the shareholding significantly, with the deep commercial alliance between the two that includes Etihad's wet-lease of a Virgin Australia Boeing 777-300ER.
Etihad is in negotiations with Air France over a possible code-sharing agreement, and it also has stakes in Air Seychelles, Air Berlin and Aer Lingus, and its Middle Eastern competitors are considering buying into other carriers, too. Qatar Airways has invested in Cargolux and was close to purchasing Spanair before pulling out of talks early this year. Turkish Airlines, fast-growing and ideally situated between Europe, Asia and Africa, is on the verge of taking a minority stake in LOT Polish Airlines. It is also imaginable that a Persian Gulf carrier could buy the International Airlines Group (IAG) stake that Spain's troubled financial institution Bankia might be forced to sell, a purchase no one would have foreseen a few years ago.

Qatar Airways and Etihad are also playing with the idea of joining one of the global alliances, as well. The sidelines of the IATA meeting were rife with rumors that Qatar Airways will announce it is joining Oneworld. But no announcement came, and CEO Akbar Al Baker refused to say anything on the matter. Industry executives indicate the process is not far enough along for anything more concrete at this stage.
But a potential Oneworld membership was about the only thing on which Al Baker did not have a comment, and the resonance of his opinions has grown, too. Previously, Al Baker wielded influence by writing multibillion-dollar checks for new Airbus and Boeing aircraft and scaring competitors with record rounds of passenger growth. Last year, he criticized IATA for being a club of the past, a nontransparent lobby representing the interests of old-style legacy carriers in the U.S. and Europe.
IATA's chairman for the past year, KLM CEO Peter Hartman, was forced to launch a review of the association's corporate governance and distribution of power, resulting in remarkable changes that were adopted by the general assembly. North America is losing a board seat and the Middle East and Africa are gaining one—to be filled by Al Baker. The Asia-Pacific region will also get more representation. Other governance changes include limiting board members to three three-year terms.
Hartman points out that the measures are “by no means” the end of the reforms and states that more changes can be made if members are in favor of them.
The shift in power is taking place against the backdrop of an industry on the edge, particularly in one of its former strongholds, Europe. IATA Director General and CEO Tony Tyler sees “serious downside risks” for the projected $3 billion profit of its members in 2012. “The biggest and most immediate risk is the crisis in the Eurozone,” he says. “If it evolves into a banking crisis, we could face a continent-wide recession—dragging the rest of the world and our profits down.” IATA's baseline forecast is for $631 billion in revenues and a $3 billion profit, a margin of 0.5%. But a 1% shift in revenues could turn the profit into a $3 billion loss.
That IATA was not forced to revise its forecast downward has to do with the fact that oil has become somewhat cheaper, relieving some pressure on operating costs. The cargo market appears to have put the worst behind it after sharply declining in the last 1-2 years, and passenger demand is still strong in several key markets, including Europe, whose airlines have nonetheless been unable to turn that demand into profitability. In fact, IATA's stable guidance masks significant deterioration in Europe, where the association now expects a combined loss of $1.1 billion, almost twice as much as it predicted only three months ago. North American airlines, by contrast, are now projected to reach a $1.4 billion profit, $500 million more than foreseen in March and a little better than in 2011.
Carriers in the Asia-Pacific region are struggling with continuing weakness in cargo traffic—despite some improvement in the first half of the year—as well as the economic slowdown in China and India, which still contribute two-thirds of the overall industry profit. The deteriorated European markets will lower Middle Eastern airline profits to $400 million from $500 million, although they are the fastest-growing carriers and have received 80% of the benefits of the slow rebound in cargo markets.
In the current cycle, global air transport profits peaked in 2010 at $15.8 billion, a margin of 2.9%. A year later, they fell to $7.9 billion, a 1.3% margin. Where they will go next depends largely on which risks will become realities and when.
IATA Chief Economist Brian Pearce says, “overall performance is still pretty good, except in Europe.” Cash flows are close to mid-cycle levels and airlines have managed to keep load factors up. Pearce notes that carriers have also added capacity at a slower pace. But he is worried this might change soon with an expected up-tick in aircraft deliveries from Airbus and Boeing this year.
“The problem is that the rest of this year looks very uncertain,” Pearce says. “We expect further deterioration in Europe; the second half will be worse.” The IATA guidance assumes anything up to and including a Greek exit from the Eurozone, but nothing more dramatic. The guidance also assumes a weak U.S. economic recovery, no hard landing of the Chinese economy, no Iran conflict and an average oil price of $110 per barrel.

To bolster airlines' ability to capitalize on demand, meanwhile, IATA is proceeding with its initiative for airline distribution. Tyler says the global distribution systems “have not been able to facilitate innovation like we have seen in other industries.” Therefore product innovations “cannot break free of product descriptions limited to booking classes such as F, C or Y and their derivatives,” he says.
IATA is working on new distribution standards that better enable airline differentiation; the foundation standard, to be defined this year, will be the basis for a common interface between airlines, consumer applications, distributors, travel agents or even other airlines. The common interface is also intended to allow airlines to make offers tailored to individual consumers. The business case for the new system and a road map for its implementation are to be presented at the World Passenger Symposium 2012 in Abu Dhabi in October.
Separately, to save costs, IATA is consolidating its global operations, reducing the number of local offices to 45 from 59. The remaining offices will in turn take on a broader role and drive global campaigns on a local level. The IATA financial settlement system will be consolidated into five hubs: Miami, Amman, Beijing, Madrid and Singapore.

ATR Sees One More Large Order Before End Of Year

December 18, 2012

ATR is planning to increase production next year to more than 80 aircraft. It also appears confident of securing one more large order in the coming days. “There was a significant increase in production this year,” ATR CEO Filippo Bagnato tells Aviation Week in Singapore, adding that this year the total number of aircraft built will be 65 and that “next year it will go beyond 80.”
The most recent order came from Brazilian carrier AviancaTaca, which earlier this month ordered 15 ATR 72-600s with first deliveries set for June 2013. ATR has an order backlog of 220 aircraft, but Bagnato says the aircraft maker can still provide some early delivery slots to meet customer needs. “We have a dynamic structure. We have to play day-by-day to make available the slots,” he says.
Garuda Indonesia’s Citilink, which is due to decide this month on an order for up to 50 turboprop aircraft, is considering the ATR 72-600 and the Bombardier Q400. Citilink has said publicly it wants first deliveries at the end of 2013’s third quarter or early fourth quarter.
Bagnato says that ATR can fulfill this requirement and that the airframer and airline are in active negotiations. Garuda CEO Emirsyah Sata told Aviation Week in October that the request for proposals stipulates that manufacturers competing for the turboprop aircraft order must provide a solution to finding pilots for the aircraft. Garuda is unable to provide pilots to Citilink for the turboprop operation because its pilots are needed for Boeing 737 and Boeing 777 operations.
Bagnato says ATR can help Citilink source foreign pilots. He says there are pilots in Europe who are type-rated for ATR aircraft and could come to Indonesia. Lufthansa’s ATR operation Air Dolomiti, for example, has announced it will be downsizing, which will make ATR pilots available, he adds.
Bagnato was reluctant to comment further on the competition to win Citilink’s business, adding that he generally likes to refrain from commenting publicly while still in the negotiation stage. Bagnato was speaking to Aviation Week on Dec. 14 at an event at Seletar Aerospace Park to celebrate the opening of an ATR-owned pilot simulator training center, which has a full-motion flight simulator, built by CAE, that is designed for training pilots to fly the ATR 72-600. Some of Bagnato’s colleagues, who also were at the opening of the training center, were bullish on the prospect of winning the Citilink competition.
ATR Senior VP-Product and Services Lilian Brayle said at a news conference that ATR “hopes to share some very good news with you in the coming days.” He adds, “We’re very optimistic” that in the coming days the order backlog from Asia Pacific will increase.

IAG, Ryanair In Potentional Deal For Aer Lingus Slots At London Heathrow Airport

December 18, 2012

British Airways (BA) parent International Airlines Group (IAG) has signed a non-binding agreement with Ryanair covering most of Aer Lingus’s slots at London Heathrow. Airport.
The IAG deal is part of the remedies package put together by Ryanair to address the European Commission’s (EC’s) concerns that its proposed takeover of Aer Lingus will impede competition on some 40 routes. Ryanair, which owns 29.8% of Aer Lingus, in June launched a takeover bid, which lapsed after the EC opened a formal investigation into the combination. The EC is expected to release the outcome of the ongoing Phase II investigation by Feb. 27.
“We have signed a non-binding memorandum of understanding (MOU) with Ryanair. The MOU is subject to the EU’s approval of Ryanair’s proposed takeover of Aer Lingus and IAG board approval,” an IAG spokeswoman confirmed to Aviation Week.
BA initially would lease the Aer Lingus slots and after a three- to five-year period, it would have the right to buy and redeploy the slots.
Aer Lingus is Heathrow’s third-largest slot holder, after BA and Virgin Atlantic Airways. The airline operates on average 23 daily roundtrip flights to the airport. It serves Dublin, Cork and Shannon in the Republic of Ireland and Belfast City Airport in Northern Ireland. BA would possibly base aircraft in Ireland and take over Aer Lingus’s services from Cork, Shannon and Dublin.
Aer Lingus told Aviation Week that the four Heathrow routes are among the 10 most profitable routes in its network, which spans more than 100 routes. If the EC will be favorable to the Ryanair-IAG deal remains to be seen, because it would create a BA monopoly on all four routes. BA currently competes with Aer Lingus on the Heathrow-Dublin and Dublin-Belfast City Airport segments. BA took over these two routes from BMI, when it bought the airline last year.
The deal might have wider repercussions for Virgin Atlantic Airways. Aer Lingus lost out in its bidding contest with Virgin Atlantic for Heathrow slots being disposed of by BA following the acquisition of BMI. Virgin Atlantic was awarded the 12 daily slot pairs and will use them to launch short-haul operations during the next IATA 2013 summer schedule. Aer Lingus reached a preliminary agreement to wet-lease four Airbus A320 aircraft to Virgin Atlantic to operate its domestic routes between London Heathrow and Manchester, Edinburgh and Aberdeen.
If the Ryanair-Aer Lingus deal receives EC clearance and Ryanair sheds Aer Lingus’s Heathrow slots to BA, Virgin Atlantic will have to look for a new partner to operate its short-haul flights.

Aer Lingus is confident the European regulators will once again reject the Ryanair takeover attempt. The carrier plans to source additional aircraft and flight crew to support the Virgin Atlantic deal. It currently operates 36 Airbus narrowbodies, and the fleet will increase by about 9% as a result of the new contract. The airline was scheduled to receive two new Airbus A319s next year and return two Airbus A320s to lessors, but these aircraft now will be retained if the agreement with Virgin Atlantic is firmed up.
The airline believes also that the combination of its own operations at Heathrow with the Virgin Atlantic wet-lease operations will result in additional efficiencies and savings due to economies of scale at the airport. Some analysts estimate that this agreement could boost earnings-per-share forecasts for Aer Lingus by about 5%.


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Qatar Membership Opens Africa, Middle East For Oneworld

October 09, 2012

Qatar Airways’ pending membership with Oneworld gives the global alliance access to emerging markets, particularly in Africa, and a controlling presence at a new airport in Doha, which Oneworld deems one of the primary gateways in the Middle East.
Speaking at the formal announcement of Qatar’s designation in New York, Oneworld’s CEO Bruce Ashby on Oct. 8 said Qatar will increase the alliance’s market share in the Middle East to 10% from 4%. International Airlines Group (IAG) CEO Willie Walsh added that the Persian Gulf cannot support three large hubs so close to each other, but the “smart money” is on Doha and Emirates Airline’s Dubai base winning out over Etihad Airways’ Abu Dhabi operation.
The Qatari government’s $15 billion investment in a new airport at Doha augurs well for Qatar’s future growth and made the decision to admit the airline to Oneworld easier, Walsh added.
With Oneworld membership, which should be completed in 12-18 months, Qatar will become the first major Persian Gulf carrier to join a global alliance. “We have joined an alliance very fast,” Qatar CEO Akbar Al Baker said during the New York event. “We are only 15 years old, so this was a fast step and a good step,” Al Baker continued, adding, “It is a sign that the world is taking the Gulf carriers seriously.”
The announcement was expected, and while Al Baker was denying such a move as recently as two weeks ago, the CEO now admits a previously announced service to Chicago O’Hare International Airport scheduled to begin in the first quarter next year was planned in anticipation of joining Oneworld and connecting with the alliance’s anchor member American Airlines.
Qatar also will be opening new markets in the U.S. next year in consultation with its Oneworld partners, although Al Baker declined to identify possible candidates. Qatar also says Oneworld’s presence in Doha, currently limited to British Airways and Royal Jordanian, will “be explored.”
During the New York event, IAG’s Walsh also said Oneworld expects to add its first carrier from South Asia with the admission of SriLankan Airlines “soon.”

Garuda May Launch 777 Flights To Russia

September 27, 2012

New services to Russia are among the long-haul plans Garuda Indonesia is considering for the Boeing 777-300ERs it is due to begin receiving next year.
The airline currently has no 777-300ERs in operation but has 10 on order, with the first scheduled for delivery in mid-2013. A Garuda spokesman says the first two 777-300ERs will be used for services from Indonesia to Tokyo and to destinations in the Middle East. Garuda presently has two Boeing 747-400s that it operates to Middle East destinations, such as Jeddah in Saudi Arabia, but it wants to phase the 747s out.
“We will go to Tokyo and the Middle East first with the 777s, but maybe later on, when more 777s are delivered to Garuda, we will launch services to cities in Russia, such as Moscow,” says the spokesman.
Garuda has said that its wants to use 777-300ERs to turn its one-stop service from Jakarta to Amsterdam, which uses an Airbus A330 via Dubai, into a non-stop service. It has also said it wants to resume services to London with the new aircraft.
The Russian market, however, is appealing because there are already many Russian tourists coming to Indonesia’s resort island of Bali for holidays, says the spokesman. “A lot are coming to Denpasar, Bali so maybe we will consider doing some charters first from Bali to Russia, before doing scheduled operations,” he adds. Russian carriers, such as Transaero and S7 Airlines, already operate between Russia and Denpasar.
In a separate development, Garuda says it is seeking to negotiate sale-and-leaseback deals on the 10 777-300ERs it has on order. It also wants to make similar arrangements for four Boeing 737-800s and 10 Airbus A320s that are due for delivery in 2013-16. The A320s are for its low-cost carrier Citilink.

Indonesia's Citilink Orde“ATR also has agreed to fully support Citilink on the maintenance side for the first two years and to cooperate with Garuda’s maintenance, repair and overhaul company GMF AeroAsia,” says Wibowo. Under this agreement, ATR will providing maintenance technicians to ATR for the first two years, says Wibowo, adding that while it is normal practice for an aircraft manufacturer to assign one or two field representatives to a new customer, this deal will involve several more technicians. Wibowo says Citilink plans to operate its ATR 72-600s from five hubs—Balikpapan, Batam, Jakarta, Lombok and Surabaya—across 45 routes. The number of daily frequencies will reach 300 in five years, he adds. Services from Batam, an island near Singapore, will include international destinations such as Johor Bahru, Kuala Lumpur and Penang in Malaysia, Wibowo, while the ATRs will open domestic tourist destinations from Lombok. Balikpapan is a hub for Kalimantan, one of Indonesia’s largest provinces, although Wibowo says the turboprops also will to link Balikpapan to Kota Kinabalu in Malaysia’s Sabah province. Wibowo says turboprops are ideal for low density, high yield routes. Garuda will code-share on some of Citilink’s turboprop flights, he adds. ring 25 ATR 72-600s

December 27, 2012

Garuda Indonesia’s low-cost carrier Citilink has decided to order ATR 72-600s after the manufacturer agreed to help provide foreign pilots and maintenance technicians.
The airline will be ordering 25 ATR 72-600s, with options for 25 more, and first deliveries will be in September, Citilink CEO, Arif Wibowo, tells Aviation Week.
He says five aircraft will be delivered in 2013. The delivery schedule for the first 25 aircraft runs “up to 2015” and if the 25 options are converted into firm orders, the delivery schedule goes “up to 2017”, says Wibowo.
Prior to selecting the ATR 72-600, Citilink also considered the Bombardier Q400. Some industry sources had expected that Citilink would choose the Q400 to more clearly differentiate itself from its nearest competitor, Lion Air’s Wings Air, which is one of the largest ATR 72 operators in the world.
Wibowo says there were three key considerations to selecting the aircraft type: economic, such the purchase price; financing; and aircraft performance. “With these three considerations in mind, our target was to be the most competitive in the market.”
The aircraft’s fuel-burn and runway performance was important, Wibowo says, although ATR’s offer to help Citilink to get support from European export credit agencies also helped.
In the request for proposals, Citilink required bidders to present plan to provide pilots, and ATR has agreed to this condition, says Wibowo. He adds that Citilink likely will rely on foreign pilots for the first two or three years until enough locals can complete ab initio training at flying schools and then be type-rated for the ATR 72-600.
The type-rating will conducted at ATR’s new simulator training centre in Singapore, he notes.
Citilink is unable to source pilots from Garuda for the turboprop operation, says Wibowo, because of demand to supply parent company Garuda’s growing Boeing 737 operation.

“ATR also has agreed to fully support Citilink on the maintenance side for the first two years and to cooperate with Garuda’s maintenance, repair and overhaul company GMF AeroAsia,” says Wibowo. Under this agreement, ATR will providing maintenance technicians to ATR for the first two years, says Wibowo, adding that while it is normal practice for an aircraft manufacturer to assign one or two field representatives to a new customer, this deal will involve several more technicians.
Wibowo says Citilink plans to operate its ATR 72-600s from five hubs—Balikpapan, Batam, Jakarta, Lombok and Surabaya—across 45 routes. The number of daily frequencies will reach 300 in five years, he adds.
Services from Batam, an island near Singapore, will include international destinations such as Johor Bahru, Kuala Lumpur and Penang in Malaysia, Wibowo, while the ATRs will open domestic tourist destinations from Lombok.
Balikpapan is a hub for Kalimantan, one of Indonesia’s largest provinces, although Wibowo says the turboprops also will to link Balikpapan to Kota Kinabalu in Malaysia’s Sabah province.
Wibowo says turboprops are ideal for low density, high yield routes. Garuda will code-share on some of Citilink’s turboprop flights, he adds.


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2013 Forecast: Commercial Up, Defense Down

December 31, 2012
Xinhua/Landov File Photo

Graham Warwick
Commercial production rising. Defense budgets falling. Economic uncertainties and regional instabilities that could affect both. That is the world the aerospace and defense industry faces entering 2013, and which is examined in detail in the pages that follow.
But if there is one theme that recurs frequently through this latest edition of Aviation Week's annual forecast issue, it is China and its growing financial, industrial, political and military influence on aerospace and defense globally.
By flying two new stealth fighter prototypes, operating an aircraft from a navy carrier for the first time (pictured) and unveiling a range of unmanned-aircraft designs over the past two years China, at least in the eyes of the public, has narrowed the U.S.'s technological lead.
In the commercial world, China continues to be a major buyer of Western airliners and a growing market for business jets. The country has also cemented its position as a leading financer of the global air transport industry through its December acquisition of U.S. lessor International Lease Finance Corp. for $4.8 billion.
But it is China's ambitions as a manufacturer that have caught the most attention. Although it is struggling to certificate the 90-seat ARJ21, Comac is pushing ahead with development of the 160-seat C919 to challenge Airbus and Boeing. Plans to buy Hawker Beechcraft out of bankruptcy collapsed in late 2012, but with its market and its money few doubt China will become a major player in business aviation through acquisitions and coproduction. Avionics and engines are next on Beijing's target list.
For the first time, Aviation Week's annual forecast issue incorporates the global military analysis of our Defense Technology Edition and detailed commercial maintenance, repair and overhaul insights of our MRO Edition, as well as Aviation Week & Space Technology's outlooks for individual industry sectors ranging from combat aircraft to communications satellites.
Also for the first time, five-year forecast data produced by Aviation Week Intelligence Network's own analysts are presented, providing projections for combat aircraft, military transports, rotorcraft and commercial aircraft deliveries for 2013-17, as well as detailed analyses of projected MRO demand.

What emerges is a picture of an industry on divergent trajectories. For the large commercial aircraft sector, 2013 will see order-taking moderate, but production rates increase to record levels. The year will also see the first flights of key new aircraft: the Airbus A350, Bombardier CSeries and Mitsubishi MRJ. Business aviation remains flat, but the rotorcraft sector is rebounding.
For the defense and security sector, 2013 will see lower spending globally and a focus on squeezing more out of existing platforms. Progress on developing the Lockheed Martin F-35 Joint Strike Fighter will be crucial, with the international partners increasingly concerned about escalating costs. For the space sector, the hope is 2013 will see solid backing for the fledgling transition to commercial from government launch services. Commercial suborbital passenger flights are also expected to begin by year-end.

Aerospace 2013 has been prepared with analysis and data from Forecast International Inc. in Newtown, Conn. For more comprehensive market information, visit www.forecastinternational.com Contact Ray Peterson, vice president for research and editorial services, at +1 (203) 426-0800, or e-mail him at ray.peterson@forecastinternational1.com
Key Intel

DEFENSE: Global hotspots and country-by-country analyses of national priorities and programs. See pp. 52-69.

MILITARY AIRCRAFT: F-35 delays and costs keep market hopes alive for other combat-aircraft makers. Market for military transports looks increasingly crowded. See pp. 70 and 75.

UNMANNED AIRCRAFT: Military demand cooling off, but still growing as civil market begins a slow takeoff. See p. 80.

AIR TRANSPORT: Region-by-region analyses of commercial aviation developments. Carriers adjust to depressed demand for air cargo. Crucial year ahead for airspace modernization. See pp. 105-114, 115, 117.

COMMERCIAL AIRCRAFT: As order-taking slows, but production ramps up, manufacturers and suppliers are challenged by simultaneous development of new, derivative and re-engined aircraft. See p. 100.

MRO: Detailed forecasts for narrowbody, widebody, engine, landing gear, avionics and components maintenance, repair and overhaul. See pp. 120-136.


BUSINESS AIRCRAFT: Large-cabin aircraft and growing-economy markets remain the bright spots in an otherwise flat business-aviation market. See p. 137.

ROTORCRAFT: Energy and military markets keep manufacturers healthy as they look toward future requirements and technologies. See p. 85.

ENGINES: Commercial production ramps up as new engines enter testing, and military market prepares for next-generation powerplants. See p. 87.

SPACEFLIGHT: From satellite communications to spacecraft launches, commercial providers taking over from government agencies. See pp. 94 and 97.

TOP TECHNOLOGIES: Which defense and commercial advances will make the headlines in 2013? See pp. 89-93 and 139-142.

OPINION MAKERS: Lockheed Martin's Marillyn Hewson, European Defense Agency's Claude-France Arnoud, International Air Transport Association's Tony Tyler and Aeronautical Repair Station Association's Sarah MacLeod. See pp. 48-49, 54, 96 and 104.


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