Malaysia Airlines said it "proved its resilience" with a MYR38.6 million ($10.3 million) third-quarter profit that, while representing an 89.4% plunge from the MYR364.6 million profit reported in the year-ago period, was the ninth straight quarter in the black for the restructured airline.
The percentage of U.S. online leisure travelers who consider themselves brand-loyal has plunged by 19%, from 31% in 2006 to 25% this year, according to Forrester's North American Technographics Retail, Travel, Customer Experience and Financial Services Benchmark Survey, Q3 2008. In a report on the study, authors Henry Harteveldt, vice president and principal analyst, and Elizabeth Stark, researcher, offer five reasons for the nosedive:
DURING A LONG "SAVE THE AIRLINE" MEETING, someone declared that airlines are basically cash accumulators for other constituencies. It's truethere are plenty of government entities that tax them, groups sell them equipment and banks lend them moneybut I've always believed they are so much more. Airlines drive the global economy and connect us in ways that no other business or technology can.
US airline financial woes deepened in the third quarter as even good news--per-barrel crude oil prices dropping significantly--was tinged with frustration: Carriers hedged fuel at prices that turned out to be much higher than actual prices as the quarter wore on, leading to big noncash charges that contributed to heavy net losses. The 10 largest passenger airlines posted a cumulative net loss of $2.52 billion, reversed from a $1.67 billion profit in the year-ago period, with only American Airlines in the black thanks to the sale of its asset management subsidiary for $432 million.
INTERNATIONAL AERO ENGINES celebrated its 25th anniversary this year. Plenty has happened since the consortium formed in 1983 to produce the V2500 and its shareholders divided design and production responsibilities, leaving Pratt & Whitney (32.5%) to take on the combustor and high-pressure turbine, Rolls-Royce (32.5%) to engineer the high-pressure compressor, Japanese Aero Engines (23%) to build the fan and low-pressure compressor and MTU Aero Engines (12%) to forge the low-pressure turbine.
OVER THE PAST SEVERAL YEARS, Flybe has chosen the road less traveled, yet the trail it has blazed has become a popular thoroughfare for the rest of the industry. Building a fleet dominated by high-speed turboprops in an era of regional jets, becoming the first carrier to charge for checked baggage, focusing on developing ancillary revenue and offering passengers an environmental report card for each flight they take: These are some of the things that Flybe pioneered.
ON AUG. 6, 1947, IN THE FIRST of several such appearances, Howard Hughes told an emotion-charged and sometimes heated US Senate hearing that he had put the sweat of his life and his reputation into his H4 Hercules "Spruce Goose" and if it was a failure he would leave the country and never return. During the hearings, which lasted several months, Hughes snuck in the aircraft's one and only flight on Nov. 2, 1947--about three years after it was contracted to fly.
ONE WAY TO PROCURE PRODUCTS and services is to focus on the destination of nickels and dimes and let the dollars take care of themselves. Then there's this one: Build strong strategic partnerships and everything else tends to fall into place.
It is hard to argue with British Airways CEO Willie Walsh's observation that the April 1-Sept. 30 financial semester "will be remembered as one of the bleakest on record," what with record fuel prices, the credit crisis and the failure of several airlines.
The world's first sustainable biofuel flight now is expected to take place as early as Dec. 18 or possibly over Christmas with a jatropha-based fuel powering one engine on an Air New Zealand 747-400 on a 3-hr. gate-to-gate flight from Auckland. The fuel is a 50/50 blend of standard Jet A1 and synthetic paraffinic kerosene derived from jatropha oil.
HERE'S A FAMILIAR STORY LINE: The airline industry is bracing for what it expects will be a serious traffic downturn in 2009 as it prepares to accept a record number of new aircraft at the very point at which the global credit crisis means that capital to finance those aircraft is on indefinite holiday. To paraphrase Yogi Berra, "It's deja vu all over again."
Goodrich's long-term program for nacelle aftermarket services, Prime Solutions, is gaining speed, with a major seven-year US program, a new customer in the growing Asian market and a product improvement that should enhance future business. Bob Gustafson, VP and GM-Goodrich Aerostructures Aftermarket Services, reports customer interest is increasing. The company looks forward to signing up more Prime customers, especially as the 787 enters service.
AAR Corp. elected Donald J. Wetekam group VP-maintenance, repair & overhaul. Air Namibia appointed Helen Adamou UK sales & marketing mgr. AirPlus International welcomed Colleen Black as VP-key account sales and John Callahan as regional sales dir.-northern Midwest. Alaska Air Group elected Thomas Nunn VP-safety. Arab Air Carriers Organization elected Saudi Arabian Airlines CEO Khalid Abdullah Almolhem president. Aviapartners named Henning Dieter GM-cargo services-Germany.
NO ONE KNOWS JUST WHAT MIX OF INVESTMENT AND INGENUITY will work to turn the economy around and drive it back north. It's probably safe to assume, however, that it won't just be Washington and bailouts.
Procurement of rotable and consumable parts for aircraft, along with the many nonaviation products airlines need, continues to be a tough game, played now for the highest stakes--carrier survival. New tools help achieve better deals and ensure deals are fulfilled. But better procurement requires a sound strategy and thorough process as well as tools. Choices are getting better, more varied and complex. The procurement process must match this complexity.
A PASSENGER-TO-FREIGHTER AIRCRAFT conversion is not a simple matter. It's not the actual conversion process that is particularly complicated; there are a number of companies with the capability to do modifications. Rather, it is the process before the conversion takes place that is among the most tangled in the aviation business. An airline needs to ground an aging passenger aircraft and then determine a price at which to sell it. A lessor or another airline needs to be seeking to add a freighter and agree to pay that price.
Continental Airlines announced that along with Boeing, UOP and GE it will fly a 737-800 on Jan. 7 using a biofuel blend including from algae to power one of the CFM56-7B engines. Like the Air New Zealand flight, the fuel is a 50/50 blend of kerosene jet fuel and renewable biofuel, but in this case the biofuel component is a cocktail of jatropha and algae.
There won't be any significant breakthrough [in engine emissions] for at least three decades. There's no technical fix. All we can do is reduce the amount we fly." So says Joss Garman, founder of the anti-airline PlaneStupid.com environmentalist website. But talk to Mike Benzakein, Wright Brothers Institute professor and chair of the Aerospace Engineering Dept. at Ohio State University, or Alan Epstein, former R. C. MacLaurin professor of aeronautics and astronautics, Dept. of Aeronautics and Astronautics at Massachusetts Institute of Technology, and you get a starkly different story.
There's no way to prettify it: 2008 has been an annus horribilis, probably the worst economic mess since the Great Depression of the 1930s. It was a year dominated by the three Fs: fuel, fees and fear. The mortgage crisis morphed into the credit crisis. Once-venerable financial institutions like Lehman Brothers hit the skids. A jaw-dropping 1.9 million jobs were lost.
In the next 24 hr., deforestation, mainly in the tropics, will release as much CO2 into the atmosphere as 12.5 million people flying from London to New York. That is the stark reality of the effect of deforestation outlined in a new report from Oxford-based Global Canopy Program, an alliance of 38 leading scientific institutions in 19 countries that forms a collaborative program of research, education and conservation addressing biodiversity, climate change and poverty alleviation.
London Heathrow's third runway moved a step closer with a qualified endorsement from the independent UK Climate Change Committee last month. Lord Turner, chairman of the CCC, told the Guardian newspaper that it was possible for aviation to be expanded while still meeting the target of cutting greenhouse gas emissions by 80% by the middle of this century, especially if airlines were able to use biofuels or other low-carbon power sources.
In October, Leading Edge Aviation Services, a major provider of aviation painting and related services, reached the 600 mark on its Continental Airlines account. That's about how many planes it's painted for the legacy carrier since 1994.
Emirates will use the launch of nonstop service between Dubai and San Francisco on Dec.15 to demonstrate its green credentials with what is claimed to be the world's longest green flight. Group Chairman and CEO Sheikh Ahmed bin Saeed Al-Maktoum will be on the flight.
THE WORLD IS A RICH, YEASTY stew of about 6,900 living languages. As one might assume, Mandarin and English are spoken by the largest numbers of people, but assumptions fall apart as you go down the list. Far more people speak Portuguese or Indonesian than French. More than 2.5 times as many people speak Yoruba as Swedish. Fortunately for most airlines, the world in which they operate is linguistically narrower. But as they set up shop on new websites in markets far from home, carriers must navigate a minefield of bad translations, cultural gaffes and technical oversights.
WENCOR CLAIMS TO BE one of the largest PMA holders in the world and currently has US FAA authority to manufacture more than 2000 PMA parts. Based in Utah, the company boasts more than 3,500 customers worldwide, including more than 250 airlines. A major aerospace engineering, distribution and manufacturing enterprise, it offers aftermarket parts and services to commercial and military aerospace industries worldwide. The Wencor Group is made up of three entities that have long-established roots in the aviation parts supply industry: Wencor, Dixie Aerospace and Kitco Defense.
