Boeing has succeeded in three very important achievements for the B737 MAX project this week: the rollout of the first B737 MAX 9, the unveiling of the 737 MAX 10 and the certification of the B737 MAX 8.
The rollout of the first 737 MAX 8
On March 7th, Boeing has rolled out the first 737 MAX 9 in front of thousands of Boeing employees.
The 737 MAX 9 will soon begin system checks, fueling and engine runs on the flight line at Everett Paine Field. Once all these tests will be completed, in the coming weeks the airplane will start its flight testing campaign.
“The 737 MAX team continues to do a fantastic job getting us to these important milestones right on schedule,” said Keith Leverkuhn, vice president and general manager of the 737 MAX program, Boeing Commercial Airplanes. “Our primary focus is delivering an aircraft that has the legendary reliability our 737 customers depend on, plus the optimized flexibility and range capability they desire.”
The 737 MAX 9 is scheduled to enter service in 2018.
The unveiling of the 737 MAX 10X
Boeing has also unveiled the first image of the proposed 737 MAX 10X on March 6th at the ISTAT Americas convention in San Diego.
The 43.8m (143.7ft)-long 737 Max 10X was revealed as a relatively straightforward, 1.68m stretch of the 737 Max 9, featuring the latter’s distinctive mid-aft exit door and no other obvious differences besides length. Boeing is continuing to evaluate several options to extend the rotation point of the landing gear, allowing more flexibility on take-offs despite the longer fuselage.
Tinseth argues the 737 Max 10X will offer the same capacity as the slightly longer Airbus A321neo, but with lower fuel consumption and slightly greater range.
Boeing could formally launch the 737 Max 10X later this year, becoming the fourth member of the re-engined 737 family, Tinseth says.
The certification of the MAX 8
Boeing on March 9th has announced the 737 MAX 8 has been officially certified for commercial by the US Federal Aviation Administration (FAA). Boeing is now in the final stages of preparing the first MAX 8 delivery in the coming months.
To earn certification for the 737 MAX 8, Boeing undertook a comprehensive test program that began just over one year ago with four airplanes, plus ground and laboratory testing. Following a rigorous certification process, the FAA granted Boeing an Amended Type Certificate for the 737 MAX 8, verifying the design complies with required aviation regulations and is safe and reliable.
“This certification is a true testament to the dedication and commitment of our entire MAX team throughout the process, from airplane design to flight testing,” said Keith Leverkuhn, vice president and general manager, 737 MAX program, Boeing Commercial Airplanes. “The Renton team looks forward to delivering superior efficiency, reliability and design to our customers as they start to receive their 737 MAX aircraft in the next few months.”
LOT Polish Airlines has signed an agreement with Aviation Capital Group (ACG) over the lease of three B787-9s.
Sourced from ACG’s order book, the first aircraft is expected to be delivered in March 2018. They will be powered by Rolls-Royce Trent 1000 engines and will be configured with 24 seats in Business, 21 in Premium Economy and 249 in Economy class.
Outlining the carrier’s proposed longterm expansion plan, LOT Chief Executive Officer (CEO) Rafał Milczarski said in September last year the Polish carrier would operate sixteen B787 Family aircraft by 2020. It currently has eight B787-8s on order from Boeing, of which six have been delivered.
“At first Boeing 787-9 will operate flights to destinations in the United States of America. However we hope that soon, we will see them flying to Asia as well,” Milczarski added.
Amazon.com has announced it will develop Cincinnati Int’l Airport into an air hub to support its growing Prime Air fleet.
In a press release, the global online retailer said the first of the forty B767 freighters to use the Kentuckian airfield will arrive in April. Thereafter, Amazon plans to build a 280,000 sqm handling facility which, once fully operational, will create 2,700 jobs (600 of them full-time).
“Amazon’s Prime Air hub promises to revolutionize the fulfillment industry worldwide, and Kentucky is excited to partner with them as they embark on this disruptive, transformative and exciting venture,” said Governor Bevin. “Kentucky’s ideal location, proven workforce and an already extensive shipping and logistics industry have been the backbone of our relationship with Amazon for nearly 20 years.”
Last year, Amazon had signed agreements with Atlas Air and Air Transport Services Group, parent firm to ABX Air and ATI – Air Transport International, to lease twenty 767 from each of the groups, for a total of forty aircraft.
Lufthansa has stated the retirement of its fleet of twenty-three A340-600s having the first one been ferried to Arizona for storage.
Flightradar24 ADS-B data shows D-AIHM (msn 762) was ferried from Munich to Marana on January 24. Its last commercial service – LH425 Boston-Munich – took place on November 5 of last year.
The German carrier is replacing the outgoing quadjets with more economical A350-900s of which it has twenty-five on order from Airbus Industrie. The first of the type – D-AIXA (msn 74) – was delivered in December last year with the remainder due to arrive through 2023.
Lufthansa currently uses A340-600s on flights from its hub in Munich to Beijing Capital, Boston, Cape Town, Chicago O’Hare, Denver Int’l, Hong Kong Chek Lap Kok, Los Angeles Int’l, México City, Miami Int’l, New York JFK, Newark, San Francisco, CA, Seoul Incheon, Shanghai Pudong, Tokyo Haneda and Washington Dulles.
Over the last few weeks there has been news about Alitalia being about to go bankrupt for the fourth time, but what really caused this many problems for the Italian national carrier?
There are different opinions: some people say what caused Alitalia to be in its actual conditions was the missed sale to Air France-KLM; some say it was the bet on creating an international hub in Malpensa and some go way back to Umberto Nordio’s administration during the ‘Golden Era’ of the airline.
Alitalia’s golden era and Umberto Nordio’s management (1973-1988)
It was 1973 when the first oil crisis hit. Cesare Romiti was Alitalia’s top manager at the time, but he had to resign because of his bad performance, caused in part by the oil crisis itself.
Umberto Nordio, 54 and a retired official of the Italian Navy, took Romiti’s role and kept it for fifteen years, during which Alitalia always had good profits. This period also was the national carrier’s ‘golden era’: excellent service on board, selected crews and such a good image to make Alitalia a synonymous of ‘Made in Italy’.
The carrier’s golden era caused a lot of indirect problems to the company: pilots and cabin crews started to defend their luxury pays, they latch on to their privileges and benefits, they created Aquila selvaggia, a union which had huge power, so big it easily grounded planes and occupied airports.
Nordio resisted for a bit, but then had to give up, particularly because he was put under pressure by the Iri, political parties and the tensions between the company and the unions.
Nordio convened Alitalia’s Management Board and resigns, making international headlines, such as the New York Times.
Alitalia’s first loss (1996)
Since 8 years after Nordio’s resignation, Alitalia has always had financial problems: 1996 was the first year Alitalia had experienced a loss after a long streak of profitable years, losing an outstanding €625 million (using the current value of the euro).
At that time, Alitalia was still State-owned and Lamberto Dini’s government, which used to control the national carrier via I.R.I., gave the OK for a capital increase of Lire 1500 billion (around €775 million).
That capital increase would later reveal to be the first of many to happen during the last 20 years, as money has never been and will never be enough for Alitalia. Data by Mediobanca suggest that Alitalia has cost taxpayers around €7.4 billion between 1974 and 2014.
Ever since 1996 Alitalia has been losing money, mostly because of bad decision-making and substantial (and usually unsuccessful) changes in the management board.
The bet on creating a hub in Malpensa (1985-2008)
In the 90s Alitalia had the intention to create an international hub in Milan Malpensa (MXP; LIMC), which the carrier meant to use as a hub. The new airport was very close to the already important Linate, which still proves to be an important focus for Alitalia’s development from Milan.
This idea was supported only by political motivations. In those years the Lega was a very strong political party in Italy and it was all about Lombardia and its development. There was no economical or industrial justification whatsoever to the huge investment the development of Malpensa meant to Alitalia and the government.
Malpensa in 2017
As of today, Milan Malpensa has been almost completely abandoned by the troubled carrier, leaving just some long-haul routes out of it, while Linate is still the focus-airport for Milan, with almost all of AZ’s routes operating out of Milan’s city airport, which leaves Roma Fiumicino (FCO; LIRF) as Alitalia’s only current hub.
Recently the national carrier has also announced it would drop its Rome Fiumicino-Milan Malpensa service from the 31st of January. There are also rumors that Alitalia might cut its international services out of MXP.
The offer from Air France-KLM (2008)
The ‘Malpensa 2000’ project was abandoned almost at the same time the offer from Air France-KLM had arrived: €1,7 billion to buy all of Alitalia, but with the requirement that 2100 jobs would be cut.
At that time, Romano Prodi was the Prime Minister and Alitalia was barely able to survive, suffering the attack from LCCs and cutting non-profitable routes.
So Prodi said he was ready to sell Alitalia to the French-Dutch aviation group, but elections were coming and Silvio Berlusconi, who was largely expected to win them, said a determinate ‘NO’ to the offer by the French-Dutch group in name of ‘Italianity’.
After his political success, Berlusconi sold Alitalia to a group of ‘capitani coraggiosi’ (direct translation: ‘courageous captains’), which offered the same as Air France-KLM but didn’t want to take the carrier’s debts with them.
These courageous captains included the ex-Telecom Italia manager Roberto Colannino; the Benetton family, already members of Autostrade and Aeroporti di Roma; the Riva family, owners of steel giant Ilva; and the Ligresti, Marcegaglia and Tronchetti Provera families. Also three of Italy’s most important banks took part in the acquisition: Unicredit, Intesa San Paolo and Monte dei Paschi di Siena.
So a new company, Alitalia-CAI (2009-2014), was born with all of Alitalia-LAI’s (1947-2009) profitable assets. All of Alitalia’s old debts remained with the old company, which was destined to soon go bankrupt.
The government actually only received half of the money Air France-KLM had offered for the whole Alitalia and the 2000 job cuts asked for by the French-Dutch to complete the stock-exchange, soon became 7000 after privatization.
Alitalia’s survival (2009-2014)
For some years, Collannino, as president, and Rocco Sabelli, as CEO, were able to make Alitalia break even, cutting the expenses they could. But they soon realize that a strong alliance is needed to save Alitalia.
And that’s when Etihad came in, trying to save the Italian national carrier from going bankrupt for the third time.
Etihad becomes Alitalia’s largest shareholder (2014-now)
It was December 23rd, 2014 when Etihad announced it closed a deal with Alitalia-CAI to buy 49% of the already troubled carrier.
They promised they would make the Italian carrier “Europe’s sexiest carrier” and that Alitalia would break even by 2017.
The plan later changed, and Alitalia’s management proudly announced the carrier would be able to make a profit by the end of 2017.
An “unexpected” failure
This happened just four months before the start of the airline’s most recent money problems. How is it possible that the airline’s management noticed Alitalia was in such a bad situation just in December?
Somebody knew and did nothing, or better, they have hidden the situation from the media as long as possible.
Luca Cordero di Montezemolo, president of AZ, had said to the government that “Alitalia loses half a million euro a day” (Translation from: “Alitalia perde mezzo milione di euro al giorno”) way back in July.
In the end of September, more bad news arrived to the ears of the management board: not even the minimum goal of a loss of around 140 million is possible anymore, Alitalia has in fact already lost 200 million by the end of June and the skies don’t seem to be getting brighter.
The predicted loss for 2016 was more than 400 million and Alitalia’s liquidity had fallen down to 20 million between October and November, when an airline as big as Alitalia should have around 300 million of liquidity always available.
James Hogan is facing the possibility of another meltdown and reacted attacking the government, saying they didn’t respect some key aspects of the alliance between the two airlines.
At the end of the year, Alitalia was forced to make an emergency plan, receiving 215 million from Etihad, giving the Italian airline the possibility to survive for an extra 60 days.
Even Carlo Calenda, the actual Minister of Economic Development, said the company was “badly managed” and it still is, because no industrial plan has yet been approved by the shareholders.
One of the possible solutions: splitting Alitalia in two
One of the possibilities is to split Alitalia in two different companies: one to become a short/medium haul low cost carrier in competition with Ryanair, easyJet and the recently developing Blue Air; one to acquire all of Alitalia’s current long-haul routes, which are the most profitable routes, remaining a full-service airline.
This is exactly what the 2013 industrial plan meant to make happen, but then Etihad arrived and it was abandoned.
Creating a new LCC? A very difficult task
Creating a brand new LCC using the Alitalia brand would be very difficult because the Italian airline market has not even tried to protect itself from foreign invasion, thing that many other nations have done (Germany, for example, has forced LCCs to use smaller airports further from the cities and is giving LCCs trouble over getting the permission to start new routes).
The cost of work and taxes would also prove to be a problem for the new LCC, because Ryanair, for example, pays a lot less taxes and spends about 30% less in employees’ pays.
Long-haul flights? There are problems on this part too
Alitalia would also have problems with its long-haul carrier, mainly because of the old alliance with Air France-KLM and Delta on flights to the US, which doesn’t give Alitalia the possibility to start new routes to the United States, and because there would be the need to find a strong partner able to finance and maintain new planes.
A solution is very far away
So, in conclusion, Alitalia still has a future of losing money ahead and that won’t change for a while. The expected loss for 2016 has now reached 600 million and at least 1600 jobs will be cut. To make things worse, James Hogan will leave its position of CEO in the Italian airline in the second half of 2017, after working with Etihad for more than 10 years.
If everything goes well with the new industrial plan that still has to be presented, maybe the carrier will be able to break even in 2020/2021.
The only things Alitalia can do for now is hope that shareholders keep feeding this money-eating monster until the managers find a way to save it or wait until they surrender, letting what could be one of Italy’s most valuable assets go bankrupt.
Mitsubishi Aircraft Corporation’s parent company, Mitsubishi Heavy Industries, has confirmed reports that deliveries of the first MRJ90s will be delayed by another two years. Deliveries were already delayed once.
According to Japanese broadcaster NHK, ANA – All Nippon Airways, the type’s launch customer is now scheduled to take delivery of its first jets in mid 2020. Last year Mitsubishi has said the first delivery was scheduled to happen in mid-2018.
Sources close to the project told NHK that technical shortcomings with the positioning of the MRJ’s electronics have forced a review of the design. This means the type certification for the aircraft will be delayed until about autumn 2019.
Asked for comment, Shinya Katanosha, the president of ANA Holdings, said the delay will forced the company to keep ANA Wings’ fleet of 737-500s in service longer than expected. Likewise, Katanosha’s counterpart at JAL – Japan Airlines, Yoshiharu Ueki, has said J-Air will keep its fleet of EMB-170s in service for longer as well. However, in JAL’s case, the airline expects to take delivery of its first MRJ in 2021.
“I know that developing a domestic passenger aircraft for the first time is not an easy job and I ordered it after understanding the risk,” Ueki said. “I have a sense of confidence in Japan’s manufacturing, I believe that they will deliver the goods.”
Flynas, Saudia Arabia’s biggest LCC, has signed an agreement with Airbus for 60 A320neo Family aircraft.
In addition to the new order, the carrier has converted an order for 20 A320ceo aircraft to aircraft part of the neo family, bringing the total order to 80 aircraft. The deliveries are scheduled to take place during 2018-2026.
Ayed Al Jeaid, Chairman, NAS Holding Group said, “Flynas has come a long way to establish itself as a highly reputed airline in Saudi Arabia. With the introduction of the new aircraft technology, we are confident of our ability to provide best services to our customers. We also look forward to being the first airline in the Kingdom to be successfully listed on the Saudi Stock exchange, which will offer equity ownership to the public and be a part of a great journey.”
Bander Al Mohanna, Chief Executive Officer, NAS Holding Group said, “We have operated exceptionally well with our existing Airbus A320 fleet, which has allowed us to maintain high performance standards in operations and passenger experience. We have an ambitious growth vision and the new A320neo order will further support our plans to be a leading low-cost carrier with the most advanced and efficient technology and will allow us to strengthen our offerings within and outside of Saudi Arabia.”
“The additional A320neo aircraft will continue to support Flynas’ growth plans as a leading low-cost carrier in Saudi Arabia’s fast-growing aviation sector,” said John Leahy, Chief Operating Officer – Customers, Airbus. Today’s agreement further consolidates the aircraft’s popularity that has been endorsed by operators worldwide. The aircraft will offer a unique combination of unbeatable economics, fuel and cost efficiency and outstanding passenger comfort.”
Embraer has announced its results for 2016, also saying that they have reached all the targets they had.
The Brazilian aircraft manufacturer ended the year with a total of 108 commercial aircraft and 117 executive aircraft. 73 of the private jets were light aircraft and 44 were large aircraft.
The manufacturer also said that these numbers are in line with the estimated reported to the market thought the year (105 to 110 commercial jets, 7o to 80 light executive jets and 35 to 45 large executive jets).
The total of 225 aircraft deliveries for the two markets represents the highest volume of deliveries in the last six years. As of December 31st, the backlog totaled US$ 19.6 billion.
2016 was a year of major challenges in the aviation industry due to global economic and political uncertainties. In response to this scenario, Embraer is implementing important actions and making adjustments to be well positioned in all business segments it operates,” says Embraer President & CEO, Paulo Cesar de Souza e Silva. “In executive aviation, for example, we now have a stronger presence with larger executive jets, which indicates a more balanced mix.
In Commercial Aviation, the highlights of the last quarter of 2016 included the delivery of the 1,300th E-Jet to China’s Tianjin Airlines and the beginning of E170 operations in Russia with S7 Airlines, which signed an agreement with GE Capital Aviation Services (GECAS) to lease 17 pre-owned E170 jets.
Another highlight was the signing of a contract with United Airlines for the firm sale of 24 E175 jets, transferring aircraft that were previously assigned to Republic Airways Holdings in Embraer’s backlog.
In the Defense & Security business, Embraer achieved another important milestone in November with the development of the KC-390 multi-mission military airlifter. The company received the Provisional Type Certificate for the KC-390 Basic Vehicle, issued by the Industrial Fostering and Coordination Institute (IFI–Instituto de Fomento e Coordenação Industrial), the Brazilian Air Force organization responsible for military certification. It attests that the KC-390, in this basic configuration, complies with the certification requirements.
Boeing and SpiceJet have announced a commitment for up to 205 airplanes during an event in New Delhi.
Booked at the end of 2016, the announcement includes 100 new 737 MAX 8s, SpiceJet’s current order for 42 MAXs, 13 additional 737 MAXs which were previously attributed to an unidentified customer on Boeing’s Orders & Deliveries website, as well as purchase rights for 50 additional airplanes.
“The Boeing 737 class of aircraft has been the backbone of our fleet since SpiceJet began, with its high reliability, low operation economies and comfort,” said Ajay Singh, Chairman and Managing Director, SpiceJet. “With the next generation of 737 and the 737 MAX we are sure that we can be competitive and grow profitably.”
SpiceJet, all-Boeing jet operator, placed its first order with Boeing in 2005 for Next-Generation (NG) 737s and currently operates 32 737 NGs in its fleet.
“We are honored to build upon more than a decade of partnership with SpiceJet with their commitment of up to 205 airplanes,” said Ray Conner, Vice Chairman, The Boeing Company. “The economics of the 737 MAXs will allow SpiceJet to profitably open new markets, expand connectively within India and beyond, and offer their customers a superior passenger experience.”