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Monday November 2, 2009

Air France took delivery of its first A380 Friday in Hamburg and will become the first European airline to operate the jumbo aircraft when it places it on Paris Charles de Gaulle-New York JFK service on Nov. 20. The Engine Alliance GP7200-powered aircraft seats 538 passengers (nine in first, 80 in business and 449 in economy), will carry 22 flight attendants and is one of three that AF will take through next spring. Johannesburg is scheduled to be its next A380 destination. CEO Pierre-Henri Gourgeon said each aircraft will allow the company to save €12-€15 million ($17.7-$22.1 million) per year. It has 12 A380s on order and Airbus now has delivered 20 of the type.

Kenya Airways reported a KES860 million ($11 million) profit in the fiscal semester ended Sept. 30, up 16.8% from the KES736 million earned in the year-ago period thanks to relatively stable operating results and gains on its fuel hedges. Six-month revenue fell 1.7% year-over-year to KES33.5 billion while costs inched up 1.7% to KES33.3 billion, resulting in an 8% fall in operating profit to KES162 million. KQ said the "volatile" political climate, an August strike and the "global economic meltdown" all impacted the results. Traffic dropped 4.7% against a 6.4% increase in ASKs, which lowered load factor 7.7 points to 66.1%. Yield measured in KES rose 12%, but fell 8.2% in US dollars owing to exchange rate fluctuations. KQ said it "remains optimistic that the company's performance will continue to improve throughout the second half" and it "intends to continue investing in developing an even more competitive product."

US Dept. of Transportation Inspector General Calvin Scovel and US Government Accountability Office Director-Physical Infrastructure Issues Gerald Dillingham last week told Congress that FAA faces considerable challenges in implementing a satellite-based NextGen ATC system, ranging from delays in approving new procedures and technology to skepticism among airlines regarding investment in new equipment. Testifying before the House of Representatives aviation subcommittee, Scovel warned that "the cost, schedule and benefits for NextGen are uncertain." Added Dillingham, "FAA faces cultural and organizational challenges in implementing NextGen capabilities."

Both said the agency needs to move away from developing Required Navigation Performance procedures for airports that merely "overlay existing routes" and toward implementing procedures that allow more direct flight paths that will increase efficiency and lower fuel burn and carbon dioxide emissions (ATWOnline, Oct. 26). Dillingham said ATC system stakeholders have told GAO "that the process of approving and deploying RNP navigation procedures remains extremely slow and that FAA's review and approval of a given original RNP design often takes years."

Both also said that the agency needs to determine how and when to equip aircraft with ADS-B-capable devices that would allow airlines to take full advantage of a new ATC system (ATWOnline, Sept. 15). Scovel said FAA and airlines "need to establish realistic transition benchmarks." Dillingham pointed to "risks" faced by carriers that are "early investors" in new equipment: "Potential changes in the proposed standards or requirements for the technology, later reductions in the price of technologies and installations, or the risk that FAA may not implement the requisite ground infrastructure and procedures to provide operators with benefits that would justify their costs to equip."

Rolls-Royce announced an order for Trent 700s to power 10 Virgin Atlantic Airways A330s. Contract, including TotalCare service support, is worth $720 million at list prices. Six of the aircraft were ordered directly by Virgin and the remaining four will be leased from AerCap. Delivery begins in 2011 (ATWOnline, June 23).

Bmi suffered a €10 million ($14.8 million) operating loss in the first nine months of 2009, according to the interim report released last week by Lufthansa. The UK carrier reported €301 million in revenue during the period and EBITDA of -€14 million. Comparisons with the year-ago period were not provided. Lufthansa was scheduled to become bmi's sole shareholder Sunday following the purchase of SAS's 20% stake (ATWOnline, Oct. 2).

SAS Group currently operates nine A330s/A340s and will not continue to operate a long-haul network if it is forced to reduce that fleet to fewer than seven, President and CEO Mats Jansson told ATWOnline at last week's Star Alliance event in Newark. "The crisis hit SK in November/December 2007, at a time where we had actually been evaluating extending our long-haul fleet from 11 to 12 aircraft. But we eventually had to reduce the fleet," he said. "Hopefully we can keep the nine aircraft." Should SAS be forced to cut long-haul capacity further as a result of additional declines in demand or yield, it could be facing a situation in which it would not make financial sense to fly intercontinentally. "Seven aircraft would be the limit," Jansson confirmed, adding that the company's restructuring will not include a merger. "We are not in business to be taken over," he said.

by Kurt Hofmann

Lufthansa Friday refused to confirm press reports that it has decided to defer A380 deliveries. CFO Stephen Gemkow said last week during the company's interim results news conference in Frankfurt that LH was discussing deferrals with manufacturers for aircraft scheduled to arrive in 2010-13. A spokesperson told ATWOnline, "We did not give any specifics regarding which aircraft types could be affected. I'm guessing it will not include our A380s, because we need up to five aircraft to be able to start sensible flight operations." LH has 15 A380s on order and is expecting the first five to arrive by the end of 2010.

by Kurt Hofmann

Hainan Airlines parent HNA Group launched a business jet subsidiary in Shanghai last Friday in an attempt to tap the increasing potential of the high-end business and general aviation market. Deer Business Jet Co. has registered capital of CNY300 million ($43.9 million), with HNA subsidiaries Deer Air and Yangtze River Express the main stakeholders. The ownership structure has not been made public. It initially will operate two Hawker 800s. China currently has no more than 30 business jets, but it is estimated the country will need 600-1,200 over the next 10 years.

Amadeus reached a 10-year agreement with Air France and KLM for implementation and operation of its Altea Inventory system. The solution will replace the carriers' legacy inventory systems by year end and will be fully integrated with the Altea Reservation sales platform.