Nineteen years to the day since the last rollout from its factory in Renton, Washington, Boeing Tuesday introduced its 737 Max 8, a new take on what has become the manufacturer’s most ubiquitous airframe and a redemption of sorts after rocky introduction of the 787 Dreamliner in 2007.

The 737 Max is the latest iteration of an aircraft first introduced in 1966. The difference between the first Boeing 737 and the first 737 Max, however, is stark. Boeing 737 Max vice president and general manager Keith Leverkuhn pointed to aircraft 1A002, the second Max still on the assembly line in Renton, noting that virtually all the components below the wing differ from those on the current models still in production a few feet away.

Along with major avionics upgrades, the Max features new powerplants built by CFM, a joint venture between General Electric and France’s Snecma. Leverkuhn said the new engines, together with design changes, will deliver a 14-percent increase in per-passenger fuel efficiency over current technology. At least one customer, Ryanair, said Boeing has promised it an improvement of no less than 16 percent per seat.

But whether or not the 737 Max can counter the surge in orders currently enjoyed by Boeing’s chief rival, Airbus, remains an open question. The European airplane manufacturer projects it will hold some 60 percent of the total volume of orders for new narrowbodies by the end of the year. Leverkuhn insisted Boeing will soon reach parity again.

“Don’t forget that the Airbus A320neo launched 18 months ahead of the Max,” he told reporters gathered on the floor of the company’s Renton assembly building. “They gained orders early. But by the time we launched, we’re very comfortable with the way the market is settling… It’s about 50-50.”

Tuesday’s rollout proved deliberately low-key compared with the fanfare that surrounded the 787’s debut eight years ago. Then, video feeds carried the ceremony to 40 countries. A live band banged away and former NBC Nightly News anchor Tom Brokaw served as master of ceremonies. But the airplane on display didn’t yet carry some major systems and temporary fasteners held together several parts. After several delays due to parts shortages, supply chain interruptions, software glitches and incomplete or inaccurate supplier documentation, the airplane flew for the first time in December 2009, some two and a half years after its rollout.  

Leverkuhn made it clear Boeing has changed its approach since then.

“We’re depending on something we call ‘right at first flight,’” he said. “That’s the idea of making sure that the systems are put together in a way that we know not only how they’ll function, but also just how reliable they’re going to be.”

Leverkuhn said the Max remains on schedule for first flight early next year. Certification of the new engines should come “within weeks” after that, he predicted. He promised the Max would undergo rigorous, “first-of-its-kind” testing that will closely simulate the way the airlines use the aircraft, ensuring its readiness for first delivery in 2017.  

“A new airplane is like a comet sighting,” Leverkuhn said. “It’s very rare and it’s a very big deal. This is an exciting day.”

Potential Bombardier CSeries operations from Toronto City Airport remain in limbo after Porter Airlines failed to persuade authorities to support plans to fly the 120-seat jetliner from the airport's island location in Lake Ontario. The proposal, involving an extended runway, required the Canadian Ministry of Transport, the Toronto Port Authority (recently re-styled as PortsToronto) and the City of Toronto to amend the airport operating agreement, which bans jet operations.

PortsToronto, which manages the airport, followed the new Liberal national government's confirmation of pre-election commitments not to permit jet operations there by saying Tuesday it would not proceed with “public engagement-related activities” on the matter. Rather, it will “complete technical work” and “focus on… current operations to benefit our passenger base, fulfill the airport’s potential and serve Toronto’s economic interests.”

Porter told AIN it is considering the implications of the decision. “We will continue assessing the situation and do not have any additional statement,” it said. The airline placed a conditional purchase agreement covering acquisition of 12 CS100s and options on a further 18 and operates Bombardier Q400 turboprops from Toronto City.

A Porter order always hinged on the airport receiving runway-extension approval, but the operator has not apparently discounted alternative CSeries applications completely. Canada’s Financial Post business magazine reported last month that the airline has also considered western Canada-based operations.

If confirmed, the Porter deal would boost firm CSeries orders by 5 percent, to more than 250, but if lost the pain will no doubt be felt more broadly, with 14 CSeries suppliers based in Ontario.

The possible loss of the Porter order comes as Bombardier prepares to celebrate formal airworthiness approval for the aircraft. Executives say the design remains “on track” to receive Canadian type certification by year-end.

Meanwhile, CSeries function and reliability testing will continue early next year in northern Europe. “We conducted recent customer demonstrations to much enthusiasm in Stockholm and Riga,” said Europe, Russia and CIS sales vice president Ryan DeBrusk during a company luncheon Tuesday in London. “We’re seeing a very positive impact and tone in the market as a result [of meeting promised performance commitments and] yes, we do see this translating into sales in the very near future,” accompanied by “much more news on the program side.”

United Airlines plans to scrap its only direct flight between the U.S. and Dubai in late January after seven years of operation due to what it called the addition of “subsidized” capacity by Emirates Airline and Etihad Airways into Washington D.C., the company revealed in an internal memo released Wednesday. United’s withdrawal means no U.S. airline will fly directly to Dubai after Delta Air Lines drops its service between Atlanta and the Gulf emirate in Februrary. 

“Due to Gulf carriers’ expansion and a recent U.S. government decision, we are discontinuing our Washington Dulles-Dubai service,” said United. “Our last departure from Washington, D.C., to Dubai will be on January 23, 2016, and the last departure from Dubai will be on January 25, 2016. Our joint venture partners Lufthansa Group and Air Canada will continue to serve Dubai.”

In August, the General Services Administration (GSA) announced that it awarded a U.S. government contract for 2016 on the Washington-Dubai route to JetBlue, a codeshare partner of Emirates Airline. The Dubai-based carrier will fly the route for JetBlue and carry some 15,000 government employees. United’s formal protest of the decision proved unsuccessful.

“It is unfortunate that the GSA awarded this route to an airline that has no service to the Middle East and will rely entirely on a subsidized foreign carrier to transport U.S. government employees, military personnel and contractors,” said United regulatory and policy vice president Steve Morrissey. “We believe this decision violates the intent of the Fly America Act, which expressly limits the U.S. government from procuring commercial airline services directly from a non-U.S. carrier. For the Washington to Dubai route, JetBlue merely serves as a booking agent for Emirates.”

United and fellow U.S. carriers American Airlines and Delta Air Lines have formed a lobbying group called the Partnership for Open and Fair Skies in an effort to convince the Obama Administration to revisit open skies agreements with the United Arab Emirates and Qatar. The so-called Big Three U.S. carriers contend that that Qatar Airways, Etihad Airways and Emirates Airline all benefit unfairly from government subsidies. Not all the U.S. airlines have joined the campaign against the Persian Gulf carriers, however, as the likes of FedEx fear that other countries might retaliate by limiting their overseas operations.  

Meanwhile, the Gulf airlines not only deny the accusation, they charge that the U.S. airlines have benefitted from several anti-competitive policies of the U.S. government, including generous “stabilization grants,” public assumption of pension obligations, loan guarantees and bankruptcy relief from debt and other obligations following the terrorist attacks of Sept. 11, 2001. 

Fifteen years after it helped to introduce the technology, UPS is removing traffic information displays from its Boeing 757 and 767 flight decks because the equipment is obsolete and there is no Federal Aviation Administration mandate to use it, the cargo carrier said. It expects to remove the automatic dependent surveillance-broadcast (ADS-B) “In” capability by next spring.

Responding to an AIN inquiry, the carrier said ADS-B In avionics developed by its former UPS Aviation Technologies subsidiary are no longer supported by Garmin International, which acquired the subsidiary in 2003. That reason, and the lack of an FAA mandate to equip aircraft for ADS-B In capability, led to UPS’s decision to remove the equipment, reportedly announced in October in an internal company memo.

While it is removing avionics that support ADS-B In—the capability to display nearby air traffic targets in the cockpit—UPS said it is committed to equipping for ADS-B “Out,” the capability of an aircraft to regularly broadcast its GPS-derived position to the ground for use by controllers in separating aircraft. The FAA has mandated that all operators equip for ADS-B Out by 2020, but it deferred requiring ADS-B In.

“It’s important to understand UPS remains an early adopter of ADS-B Out,” the carrier said. “Our 747, MD-11, 767 and A300 fleets already have ADS-B Out, and we are installing it on our 757 fleet as they cycle through C checks. UPS will be equipped well in advance of the FAA’s 2020 mandate for ADS-B Out.”

UPS, FedEx Express and the former Airborne Express (now DHL) started evaluating ADS-B in 1999 under the FAA’s Safe Flight 21 program. In October 2000, UPS hosted an operational evaluation at its Louisville, Ken., hub, using several Boeing 727s. The trial focused on using ADS-B with a cockpit display of traffic information (CDTI) for approach spacing, departure spacing and airport surface operations.

UPS’s Aviation Technologies subsidiary based in Salem, Oregon, provided an ADS-B system for the evaluation that included a CDTI, display processing unit and datalink connection. In August 2003, Garmin acquired the subsidiary for $38 million and renamed it Garmin AT. “The company is known for its leadership in the development of ADS-B technology and has participated in the development of innovative equipment to enhance flight safety as part of the Federal Aviation Administration Safe Flight 21 and Alaskan Capstone projects,” Garmin said at the time.

Despite disconnecting ADS-B In, UPS said that it “remains an advocate for ADS-B” and the FAA’s broader NextGen program to modernize the nation’s ATC system. As evidence of its commitment, the carrier cited its participation in the FAA’s Data Comm program to implement text-based communications between pilots and controllers. UPS started testing that capability in 2013 at Newark Liberty International Airport.

The world’s airlines will post record net profits of some $33 billion in 2015, exceeding the cost of capital for the first time, according to a revised forecast by the International Air Transport Association (IATA). But despite the sixth consecutive year of airline profitability since the 2008-2009 recession, the financials remain “fragile,” according to IATA director general and CEO Tony Tyler. “We should enjoy the benign trading conditions while they last but not get used to them,” he noted in remarks during IATA’s December 10 global media day in Geneva.

The $33 billion marks a nearly 66 percent increase from IATA’s profit forecast of a year ago, and a more than 12 percent jump from the $29.3 billion upward revision at the trade association’s annual general meeting in June. The prediction for 2016 suggests another record: $36.3 billion.

IATA chief economist Brian Pearce said the exceptional airline profits should be considered “normal.”

“In most industries, generating a return on capital at least equal to that cost is the minimum performance and is commonplace,” he said. The airline industry’s cost of capital runs at about 7 percent. Forecasts call for 2015 airline return on capital to amount to 8.3 percent, rising to 8.6 percent next year.

North American generates nearly 60 percent of the industry’s profits ($19.4 billion in 2015). Pearce attributes the performance not only to lower fuel prices but also improved passenger load factors, boosted by consolidation and restructuring in some U.S. markets. IATA expects European airline profits to rise from $6 billion to $9 billion this year and $8.5 billion next year, when hedged fuel purchases expire and enable lower fuel costs.

Tyler cautioned that “large parts of the industry are still struggling,” citing a negative result in Brazil from a previously expected $600 million profit to a $300 million loss in 2015. He said the Brazilian government is “unnecessarily making life difficult for themselves and in turn making it difficult for airlines” with policies resulting in the most expensive jet fuel prices in the region and recent changes in tax liability laws.

The outgoing IATA leader, who has announced he will retire in June, also criticized some recent regulatory actions, including the new U.S. highway bill, which increases security fees paid by air travelers but shifts the funds to road network upgrades. “It is totally unjustified and violates international agreements with more than 100 countries,” said Tyler. “Needless to say, we are protesting.” He also chided Norway’s new passenger departure tax and China’s combination lottery-auction slot allocation, which “completely ignores the well established worldwide slot guidelines.”

South African Airways subsidiary Mango Airlines plans to join the Star Alliance network by the third quarter of 2016 under Star’s new “Connecting Partner Model,” concept, potentially paving the way for more budget carriers to enter the 28-airline alliance.

Star Alliance made the announcement at its annual Chief Executives Board meeting in Chicago on December 10. With the addition, Star Alliance will get access to 51 percent of the South African market.

The new model looks at adding routes operated by “low-cost” and “hybrid” airlines to the network. “With a focus on ‘Friends of the Family,’ the Alliance plans to add connectivity to these types of carriers within the family of Star Alliance,” said Star Alliance CEO Mark Schwab. “Many already own or are transitioning parts of their operations on to these types of platforms. There are also other parts of world we have a desire to look around where the panorama does not provide a full service and where entities like Mango provide connectivity.” Star has already started talks with Brazilian low-fare carrier Azul following Avianca recent induction. “We are now only concentrating on solving the second half of the solution in Brazil,” added Schwab.

Another likely addition in the near future could involve Singapore Airlines’ long-haul budget subsidiary, Scoot.

Although Star could accommodate two carriers in India, no active discussions have begun as Air India, a Star member, further integrates into the network of member airlines’ bilaterals and code shares, explained Schwab. India’s largest budget carrier, IndiGo, has not shown interest in diluting its present model.

Meanwhile, Star appears to have abandoned efforts to attract a Russian carrier after past hits and misses. “The Russian geography is well served on an international basis for the last couple of years and has not been, frankly, on our radar screen,” Schwab toldAIN.

Though Connecting Partners need to comply with Star’s operating standards they will not become a member of the Alliance itself. Only those transferring between a Star Alliance member airline and a Connecting Partner (and not on a point to point) will get benefits such as passenger and baggage through check-in.

“Embracing change and challenging the status quo would be a contributing factor to Star choosing us…We are the first on the African continent to offer a full suite of mobile apps, Wi-Fi, tickets through retail stores,” Mango CEO Nico Bezuidenhout told AIN, who insisted the new arrangement would not compromise his airline’s budget model. “Star has been surprisingly flexible in their engagement,” he said. “Traditional network carriers can be stuck in their ways. Becoming a Connecting Partner gives us a competitive advantage that immediately grows into market share.” 

Mitsubishi Aircraft and Mitsubishi Heavy Industries plan to announce the results of a new review of the MRJ’s program schedule by the end of this month, the companies said in a statement released Wednesday.

The announcement comes a little more than a month after the first MRJ prototype made its maiden flight from Nagoya Airport in Japan. Since then the companies flew the airplane at least two more times, on November 19 and November 27, and, according to Wednesday’s statement, flight testing continues.

The last program schedule called for certification in the second quarter of 2017, a date that remained unchanged following the last two delays to first flight. In April the companies announced a delay from the spring to “September or October” due to a need to review the structural strength of the ram air turbine (RAT) and address certain software bugs. Then, in the last week of October a problem with the MRJ’s rudder pedal forced the new regional jet’s manufacturer to reschedule first flight for the week of November 9. It finally took to the air on November 11, some four years after the original target date set at program launch in 2008.     

The Port of Seattle, Alaska Airlines and Boeing on Wednesday signed a memorandum of understanding to launch a $250,000 study to assess the feasibility a blend of biofuel and conventional fuel to aircraft at Seattle-Tacoma International Airport. The partners have set a goal of powering all flights with biofuel at Sea-Tac, the first U.S. airport to draft a long-term roadmap to incorporate aviation biofuel into its infrastructure.

“This will send a signal to airlines and biofuel producers that Sea-Tac Airport will be ready to integrate commercial-scale use of aviation biofuels,” said Port of Seattle Commissioner John Creighton. “Biofuel infrastructure will make Sea-Tac Airport an attractive option for any airline committing to use biofuel, and will assist in attracting biofuel producers to the region as part of a longer-term market development strategy.”  

Longer term plans call for the use of “significant” quantities of biofuel at Sea-Tac’s fuel farm, which now serves all 26 airlines and more than 380,000 flights annually at the airport. Sea-Tac ranks as the 13th busiest airport in the U.S. and expects to serve more than 42 million passengers this year.

Alaska Airlines, Sea-Tac’s largest carrier and leader of the airport’s fueling consortium, wants to incorporate biofuel into flight operations at one or more of its hubs by 2020. It has identified Sea-Tac as its first choice. The Port of Seattle’s Century Agenda Goal calls for a reduction in aircraft-related carbon emissions at Sea-Tac Airport by 25 percent by 2037, largely through the use of biofuel. 

“Biofuel offers the greatest way to further reduce our emissions,” said Joe Sprague, Alaska Airlines’ senior vice president of communications and external relations. “This study is a critical step in advancing our environmental goals and stimulating aviation biofuel production in the Pacific Northwest.”

Under the terms of the MOU, the Port of Seattle will manage the $250,000 study and, as Sea-Tac’s governing authority, would handle the engineering and integration of biofuel infrastructure on Port property such as the airport’s fuel farm. The partners plan to issue an RFP for the infrastructure study in the spring, in time for expected completion in late 2016. No energy company produces aviation biofuels in Washington state, requiring its importation by truck, rail or barge. 

Boeing’s role centers on lending expertise about approaches to develop a regional biofuel supply chain to serve the airport, including fuel types, fuel producers, processing technologies and integration with airplanes.

Using biofuel as a “drop-in” fuel in airplanes reduces lifecycle carbon dioxide emissions by 50 to 80 percent compared to conventional petroleum fuel, according to the U.S. Department of Energy. Since 2011, when biofuel won approval for use in commercial aviation, airlines have conducted more than 2,000 passenger flights with a blend of biofuel and conventional petroleum jet fuel. That same year Alaska Airlines became the first airline to fly multiple flights using a 20 percent blend of biofuel made from used cooking oil and waste animal fat.

In the next year, Alaska plans to partner with Englewood, Colorado-based Gevo, Inc., to fly the first commercial flight on alcohol-to-jet fuel. Also, as a partner in the Washington State University-led Northwest Advanced Renewable Alliance (NARA), the airline plans to fly a demonstration flight next year using a new aviation biofuel made from forest-industry waste.

Delta Air Lines this week reaffirmed its intention to place Embraer regional jets with its mainline operation by entering a deal with Boeing that includes orders for 20 used E190s and 20 new Boeing 737-900ERs. The deal, announced on December 16, follows the cancellation of an agreement earlier this year between Delta and Boeing that would have covered the same 20 former Air Canada E190s along with 40 of the 737s. At the time, the U.S. carrier said it canceled the orders because it could not reach an agreement with the Air Line Pilots Association on a new contract that would have included a pay scale for mainline E190 operations. However, according to Delta, the orders announced Wednesday offered “more compelling economics” than the previously announced order. The airline continues negotiations with its pilots over a new labor contract.

“Delta continues to look for opportunities to deploy larger aircraft, which bring customer experience enhancements and improved economics, across its fleet,” said Greg May, Delta’s senior vice president for supply chain management. “This aircraft order is another example of Delta’s unique fleet strategy to deploy a mix of new and used aircraft, maintain low capital costs, and leverage significant capacity flexibility to produce superior returns for our shareholders.”

Plans call for the E190s, owned by Boeing Capital Corp., to enter revenue service in early 2017. The airplanes would come with what Delta calls a unique cabin design that includes two-by-two seating in the main cabin and a one-by-two configuration in first class.

The additional Boeing 737-900ERs will bring the total in Delta’s fleet to 120 by 2019, the airline said. In 2011 Delta placed a firm order for 100 Boeing 737-900ERs, 50 of which have so far entered service.

The U.S. and Cuba have reached a bilateral arrangement to establish scheduled air services between the two countries, the U.S. State Department announced Thursday. The sides struck the deal during the third round of technical talks on civil aviation held in Washington, D.C. on December 14, 15 and 16.  Deputy assistant secretary of state for transportation affairs Thomas Engle led the U.S. interagency delegation, and Cuba's ambassador to the U.S. Yuri Gala Lopez led his country's delegation.

This arrangement will continue to allow charter operations and establish scheduled air service, which will, according to a State Department statement, “facilitate an increase in authorized travel, enhance traveler choices, and promote people-to-people links between the two countries.”

“While U.S. law continues to prohibit travel to Cuba for tourist activities, a stronger civil aviation relationship will facilitate growth in authorized travel between our two countries—a critical component of the President’s policy toward Cuba,” the statement said.

On December 14, 15 and 16 the third round of technical talks on civil aviation between delegations from Cuba and the United States, including the establishment of scheduled flights between both countries, was held in Washington.

The agreement allows airlines from both countries to conclude commercial cooperation agreements such as code sharing and aircraft leasing agreements between them or with third countries’ airlines. The memorandum of understanding ratifies both countries’ commitment to protect civil aviation from acts of unlawful interference and reiterates the commitment to act according to the international conventions related to aviation security, said a Cuban embassy statement.

Immediately following the announcement, American Airlines said it planned to submit a U.S.-Cuba service proposal to the U.S. Department of Transportation in hopes of “timely approval” to introduce scheduled service as soon as possible next year.

 “As the leading carrier to the Caribbean and the leading U.S. airline to Cuba, we look forward to establishing scheduled service to Cuba in 2016, from Miami and other American hubs,” said American Airlines CEO Doug Parker. “We appreciate the Administration's efforts and the hard work of the U.S. negotiators to reach this arrangement.”

American has operated charter service to Cuba since 1991, flying from Miami, Tampa and Los Angeles to the Cuban cities of Camaguey, Cienfuegos, Havana, Holguin and Santa Clara. The airline expects to operate some 1,200 charter flights to Cuba this year, amounting to a 9 percent increase over its capacity in 2014.

The Bombardier C Series CS100 won type certification from Transport Canada on Friday, clearing the way for its entry into service with Swiss International Airlines during the second quarter of next year. The approval comes more than two years after first flight and follows more than 3,000 hours of flight testing, validation of thousands of test results and authentication of design and performance data.

“This is an historic moment for Bombardier,” said Bombardier Commercial Aircraft president Fred Cromer. “Bringing to market the only new family of aircraft developed for the 100- to 150- seat market segment in close to 30 years is a standout accomplishment—the C Series aircraft is now well on its way to opening up new opportunities for operators, while delivering unrivalled economic advantages, performance, and environmental credentials. It's the new reality for the single-aisle market.”

Design Approval Designees (DADs)—engineers authorized to act on behalf of the Minister of Transport to approve aeronautical design and make findings of compliance—worked with Transport Canada over the last five years planning, testing and reviewing thousands of technical drawings and documents that ultimately define the C Series and allow for its assembly against that design definition.

Formally launched in July 2008 and originally scheduled for certification by the end of 2013, the C Series suffered no fewer than four separate delays during the course of its development due to problems ranging from software glitches to an uncontained failure of one of the Pratt & Whitney PW1500G turbofans on the first flight test vehicle during ground testing in May of last year.

Bombardier continues talks with Canadian federal government officials about a further $1 billion investment in the program following a $1 billion injection from the province of Quebec in October. The investment by the Quebec government came three weeks after Bombardier and Airbus each confirmed that they had explored “certain business opportunities” together and that talks had ended following reports that Bombardier offered a majority stake in the C Series to the European airframer.

The rescue bid belied Bombardier’s past efforts to dismiss suggestions that it didn’t control sufficient resources to overcome sluggish sales of the airplane and the certification delay. Before the Quebec investment, cost overages and a paucity of order deposits prompted Bombardier to raise $3 billion in debt and equity this year and announce plans to sell part of its train business to boost its balance sheet.

Notwithstanding its money woes, Bombardier reports that the airplane meets or exceeds all technical specifications. In fact, last year Bombardier announced an increase in the C Series’ maximum range, from 2,950 nm to 3,300 nm.

Separately, the larger Bombardier CS300 remains “on track” to gain its type certification within the next six months, Bombardier said Friday. That airplane, designed to hold as many as 160 passengers in a high-density configuration, has drawn orders covering 190 of the 243 C Series examples Bombardier has sold. In fact, Bombardier rightly points out that in the capacity category the C Series CS300 occupies, its product has actually outsold the Boeing 737 Max 7 and Airbus A319, neither of which have attracted much attention or market success. Still, questions over the overall size of the market persist, as the company still hadn’t yet collected the orders for 300 C Series airplanes management had targeted for the period leading to service entry.

NetJets pilot union members yesterday ratified the 2015 Tentative Agreement with 96 percent of members participating in the referendum and 75.43 percent voting to ratify the measure. According to the union, 1,759 voted to ratify the proposal, with 573 voting to reject it.  

The contract provides an average pay increase of 28 percent over five years in all fleets and holds down increases on health-care costs, according to the NetJets Association of Shared Aircraft Pilots (NJASAP) union. Health-care costs and wage ratios were among the key stumbling blocks in the negotiations last year between NetJets and the pilots’ union. The contract also includes signing bonuses equal to $150 per month of service, up to a $30,000 maximum.

The agreement, announced in October, followed more than two years of often contentious contract negotiations between the NJASAP and NetJets Aviation management. “The unflinching resolve and dedication of the NJASAP membership has brought us to today: the ratification of a contract that sets the bar even higher in the fractional aviation community,” NJASAP president Pedro Leroux said. “We look forward to partnering with NetJets to develop a seamless implementation plan.”

“Our pilots are a huge part of the NetJets story,” said NetJets Aviation president Shane Eyer. “This contract reflects their vitally important role in our success and the contribution they will make to our future.” 

The board overseeing Europe’s air traffic management (ATM) modernization effort approved an updated ATM Master Plan describing its strategy to produce a “high-performing” system by 2035. The plan acknowledges that the level of air traffic in Europe will likely be less than originally thought.

In a mid-December announcement, the administrative board of the Single European Sky ATM Research Joint Undertaking (Sesar JU) said it approved the 2015 iteration of the master plan, which updates versions from 2009 and 2012. Among significant changes, the latest version of the plan “introduces a vision” for the future European ATM system that reflects goals of the Single European Sky II and Flightpath 2050 initiatives. It “explicitly” introduces remotely piloted aircraft systems and helicopters as users of the airspace, and is more comprehensive in including the military, an executive summary states.

According to the summary, the future ATM system will have “increased levels of automation, digitization and virtualization and the management of the entire flight end-to-end.” ATM modernization will be achieved by treating a flight “as a whole, within a flow and network context, rather than segmented portions of its trajectory, as is the case today.”

When it was started in 2005, the Sesar program’s “aspirational goals” were to accommodate a projected threefold increase in air traffic, improve safety by a factor of 10, reduce environmental effects by 10 percent and provide ATM services at 50 percent less cost. But the forecasted level of air traffic on which the 2012 version of the ATM master plan was based has since been reduced by millions of flights due to factors including the continent’s economic downturn, a sharp reduction in airport expansion plans, and the growth of Middle East hub airports, the summary states.

The “most likely” scenario of a 2013 forecast by Eurocontrol’s Statistics and Forecast Service is that Europe will see 14.4 million flights in 2035, amounting to 1.5 times the level in 2012. “As of 2025, traffic growth will slow down as markets mature, economic growth decelerates and as capacity limits at airports increasingly become an issue,” the summary states. “The major challenge will be how to improve ATM cost efficiency in a slow-growing market.”

The master plan calculates that achieving an “optimized” ATM infrastructure “with strong, network-wide coordination” will require an investment of €18 billion ($19.6 billion) to €26 billion ($28 billion) through 2035, of which €15 billion to €20 billion will be required for ground infrastructure. The estimated annual, recurring cost-savings and benefits of the modernization range from €8 billion to €15 billion compared to a scenario in which the Sesar vision is not achieved.

Airbus agreed to buy flight operations support group Navtech, subject to regulatory approval and for an undisclosed price. The Canada-based company, which also has offices in the UK, currently serves more than 400 aircraft operators with a suite of flight operations products, including electronic flight bag solutions, aeronautical charts, navigation data, flight planning and aircraft performance and crew planning software. It employs more than 250 people and currently generates annual revenues of around $42 million.

In May, Navtech and Airbus launched a partnership to develop new high-quality electronic charts to airlines operating aircraft manufactured by the European airframer. Navtech has been integrating its software with the existing Airbus EFB Fly Smart platform to support the introduction of additional functionality. The planned acquisition of Navtech was announced on December 22.

“We are very pleased to welcome Navtech into our company, contributing its industry-leading portfolio of digital solutions and expert know-how,” commented Airbus president and CEO Fabrice Brégier. “This acquisition is further affirmation of Airbus’s digitalization and services growth strategies, and is a significant milestone to serve our existing and future customers.”

Separately, Airbus announced the cutting of first metal for its new Beluga XL heavy freighter. The first rear fuselage section was cut at Aernnova’s factory in Spain on December 22 and will soon be delivered to the Airbus final assembly line in Toulouse, France.

Bombardier and training system manufactuer CAE announced qualification of a flight training device and interim Level-C qualification of a full-flight simulator by three regulatory authorities for the new CSeries CS100 narrowbody airliner.

Officials from Transport Canada, the U.S. Federal Aviation Administration and the European Aviation Safety Agency granted their respective qualifications following final inspection of the simulator and training device at Bombardier’s training center in Montréal, the manufacturer said on December 22.

Transport Canada granted type certification of the CS100 on December 18, clearing the way for its entry into service with Swiss International Airlines early next year.

“Our teams have been working diligently to achieve the qualifications for the CS100 aircraft training devices and we are delighted that the three regulatory authorities approved [them] in quick succession,” said Todd Young, Bombardier Commercial Aircraft vice president and general manager of customer services. Young added that 95 percent of technical publications for the CS100 are complete and available to operators through an online portal.

There are alternative ways of funding the Federal Aviation Administration to insulate it from the vicissitudes of the federal budget process, the U.S. Government Accountability Office (GAO) advises in a report to Congress. The watchdog agency makes no recommendations in the report, which Congress requested as it considers the next long-term reauthorization of the FAA.

Released in December, the GAO report describes the impact on the FAA resulting from the partial lapse in its funding authorization in the summer of 2011, the 23 short-term funding extensions Congress passed before approving the FAA Modernization and Reform Act of 2012, the mandatory budget cuts through “sequestration” that began in March 2013, and the partial shutdown of the federal government in October 2013.

Uncertain government funding has caused delays in the FAA’s long-running, multibillion-dollar NextGen program to modernize the nation’s ATC system. The agency has delayed until late 2016 its segment 1/phase 2 plan to deploy data communications between pilots and controllers at en route centers; slowed the rate of new procedures implemented at multi-airport “metroplex” sites; and postponed awarding contracts for its Common Support System-Weather and NextGen Weather Processor programs. However, “current segments of NextGen programs are generally on schedule,” the GAO states in “Aviation Finance: Observations on the Effects of Budget Uncertainty on FAA.”

The FAA addresses budget uncertainty through various mechanisms; for example, it can reprogram up to $5 million of appropriations within an appropriations account without congressional approval, the GAO notes. However, the agency cannot transfer appropriated funds among its four main accounts: operations, facilities and equipment, research and development and airport grants. In its Fiscal Year 2016 budget request, the FAA is seeking authority to transfer up to 10 percent of funds between those accounts.

One alternative that Congress may advance in the next reauthorization bill is to separate the FAA and its Air Traffic Organization (ATO), re-establishing the ATO as an independent entity that charges airspace users for its services. Other possibilities include authorizing the FAA to issue bonds for infrastructure projects, allowing it to charge its own user fees or providing it with more flexibility to transfer funds between accounts. Each options comes with advantages and disadvantages, the GAO says.

The report “further highlights the need for Congress to take a comprehensive look at reforming the FAA after decades of budget uncertainty and the inability to meet its critical deadlines,” said U.S. Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee. “It’s clear that we need to come together to find a new path forward that ensures that Americans can travel our skies safely and more efficiently, and that U.S. aviation is globally competitive well into the future.”

Shuster has pushed for a “transformational” change of the FAA in the next reauthorization bill, which Congress will take up early next year when it returns after the holidays. The agency’s current, temporary authorization expires on March 31.

While most major U.S. airlines represented by the trade group Airlines for America favor spinning off the ATO into an independent entity, Delta Air Lines found justification in the GAO report for its lone-wolf position that the FAA should remain intact. “Despite recent funding turmoil in Congress, the GAO report finds that NextGen programs remain on schedule—something the FAA should be applauded for,” the airline said in a statement attributed to Steve Dickson, its senior vice president of flight operations. “The report also finds that there are financing options available to Congress to consider without separating air traffic control out of the FAA and raises concerns that a new organization would greatly diminish Congressional control and oversight over air traffic control operations.”

The statement added: “Removing the Air Traffic Organization from FAA oversight in no way addresses the technical details and challenges of the U.S. air traffic system. The focus needs to remain on enhancing the FAA’s interaction with operators to continue implementing technology improvements that provide immediate and tangible benefits to customers.”

African airlines are facing another year in the red, with the International Air Transport Association (IATA) predicting collective losses of approximately $100 million for 2016. This follows loss estimates of some $300 million for African carriers in 2015, according to the organization’s recently revised industry outlook, in which it projected that globally the world’s airlines are set to register around $33 billion in net profits for the year now closing.

In an exclusive interview with AIN, IATA’s chief economist Brian Pearce said that the low commodity prices are seriously affecting airlines' profitability in Africa. “It is disappointing,” he commented. “Africa has got a big potential but the continent seems to be moving in quite a difficult position at the moment principally because of the weakness of commodity prices which means much lower revenues for the economy. That stopped a lot of beneficial improvement in economy growth.”  

According to Pearce, Africa continues to be hit by regional conflict, social unrest and epidemics. “There is a list of things unfortunately that all come together and make it very difficult for airlines to prosper in Africa,” he said.

Nonetheless, according to Pearce, there are still very good airlines in Africa held back by a high level of regulatory cost and government restrictions on market access. “That is why the majority of African passenger traffic is transported by non-African airlines,” said Pearce.

According to IATA’s research, for African airlines the reduced fuel costs associated with the lower oil prices are not offsetting the negative effect of the wider drag on the region’s economy caused by falling income from commodities like oil. Pearce explained that local currency devaluations are undermining the carriers’ ability to benefit from the falling price of jet-A, since the fuel is priced in U.S. dollars.

“We have seen in the past that airlines were able to make money when the price of oil is high,” said Pearce. “Oil is not the only factor. And indeed what we have seen in many African economies at the moment is that the exchange rate has fallen very sharply. For instance in Nigeria and South Africa. And that means that the dollar price of jet fuel is low but many African airlines are not seeing those benefits in local currency terms because of the exchange rate fall. Due to the currency devaluations, there has not been substantial fall in fuel cost.” 

The factors contributing to the losses sustained by African airlines are mostly external to the industry itself. Quite apart from the impact of lower commodity prices, violent conflict and social unrest in some countries are denting tourism demand. Pearce also claimed that government restrictions and high regulatory costs are impeding growth in the sector.

IATA is projecting that, on average, African airlines will lose 93 cents per passenger per flight in 2016, representing a declining net margin of -0.5 percent. This contrasts with an anticipated global net margin increase of 5.1 percent (amounting to a $9.59 profit per passenger with overall net profits of $36.3 billion).

“I think governments in Africa should see air transport as an engine of economic growth and development,” concluded Pearce. “And they need to facilitate the expansion of air transport which increases tourism, trade and create sustainable jobs in Africa.”     

IATA director general and CEO Tony Tyler highlighted inadequate airport infrastructure as another obstacles for airlines in Africa. At the same time, he expressed reservations about the viability of some planned airport developments, including Ndjamena in Chad, Addis Ababa in Ethiopia and Dakar in Senegal.

“What we would like to see is that investment in better infrastructure takes place in a measured way after consultation with the users and what is built is appropriate and relevant to what the industry needs and is not building palaces which cost too much and are much bigger than what the industry needs at that time,” Tyler commented. “It is important that the airports that are built are the right size and not being built wastefully.”      

Mitsubishi Aircraft and Mitsubishi Heavy Industries have extended the development schedule of the MRJ regional jet by another year following their recognition of “several issues” during the course of engineering work with experts in the U.S., the companies announced Thursday. Consequently, expected first delivery to Japan’s All Nippon Airlines has shifted to the second quarter of 2018, nearly five years later than the original target date set at program launch in 2008.

The announcement comes only a month and a half after the first MRJ prototype made its maiden flight from Nagoya Airport in Japan. Since then the companies announced that the airplane flew at least two more times, on November 19 and November 27.

The last program schedule called for certification in the second quarter of 2017, a date that remained unchanged following the last two delays to first flight. In April the companies announced a delay from the spring to “September or October” due to a need to review the structural strength of the ram air turbine (RAT) and address certain software bugs. Then, in the last week of October a problem with the MRJ’s rudder pedal forced the new regional jet’s manufacturer to reschedule first flight for the week of November 9. It finally took to the air on November 11.

“The first flight and the subsequent flight tests have confirmed the basic characteristics to be satisfactory,” said the companies in a statement released Thursday. “However, we also have recognized several issues as we attempt to accelerate our development. “Specifically, in the progress of our engineering work together with experts in the United States, we have made additions to and revisions of test items in order to complete a better-integrated aircraft. These have been reflected in the new delivery schedule. In addition, we have undertaken an overall review with our partners, and reflected this in our development schedule.”

The companies added they would carry out the planned flight test campaign in North America “as soon as feasible.” They last said they would start certification flight testing in the U.S. during next year’s second quarter.

The companies decided to conduct much of the MRJ’s flight-testing at Grant County Airport in Moses Lake, Washington, in the U.S., to take advantage of its long runways and lack of regular scheduled airline service. Other testing sites in the U.S. include Gunnison-Crested Butte Regional Airport in Colorado, where they plan to conduct high-altitude takeoff and landing tests. Meanwhile, they have chosen Roswell International Air Center in New Mexico for special runway tests and McKinley Climatic Laboratory in Florida for extreme environment testing.

The rapid expansion of seat capacity to and from India by Middle East carriers is impeding United Airlines’ plans to build market share in the country. Instead, United, which already has daily nonstop service from New York to both Delhi and Mumbai, is mainly focusing on expanding operations to China’s secondary cities. Acccording to Brian Znotins, United’s network vice president, the carrier now has more nonstop flights to China than any other U.S. airline. “Despite the slowdown of China’s economy, as travel from China grows, we will be there in future,” said Znotins.

One new route pending Chinese government approval is a nonstop seasonal service to Xian that it hopes to start in May 2016. Demand for flights to the fast-growing city of Chengdu has exceeded United’s expectations, according to Znotins. Apple has an iPad factory in Chengdu in partnership with Foxconn.

For now, San Francisco is the main hub for United’s service into China, with the Boeing 787-9 deployed on these services. “Once Chengdu matures we will add more [U.S.] hubs,” said Znotins, adding that United’s partnership with Air China is the foundation for these expansion plans.

Meanwhile, Air India is working with its Star Alliance partner United to deal with the overcapacity issue created by rival Middle East carriers. The two airlines are discussing a new codeshare for services to and from India and this should provide seamless travel to multiple U.S. airports via United’s hubs in Chicago, New York and San Francisco (which Air India serves with nonstop flights).

“This is one sure way to deal with Middle East carriers. If we put our act together, we will be able to work out a solution,” commented Air India commercial director Pankaj Srivastava. The Indian flagcarrier is now exploring the viability of new direct service to Washington, D.C.

United currently has a codeshare arrangement with India’s Jet Airways, in which Abu Dhabi’s Eithad Airways now holds a 24 percent stake. Znotins would not comment on whether United might abandon this codeshare if it commits to an agreement with Air India.

The tarmac delay rule the U.S. Department of Transportation (DOT) implemented in 2010 has significantly reduced long tarmac waits, but it has served to increase overall delays that passengers experience, mainly due to flight cancellations, a new study finds. The study authors at Dartmouth College and the Massachusetts Institute of Technology recommend modifying the current rule to increase the allowed tarmac hold time from three to 3.5 hours.

Responding to a series of incidents in which airline passengers were stranded on aircraft for lengthy periods, the DOT announced the tarmac delay rule in December 2009, and it went into effect in April 2010. The rule prohibits U.S. airlines conducting domestic flights from allowing an aircraft to remain on the tarmac for more than three hours without deplaning passengers. International carriers operating to or from the U.S. are allowed four hours. Exceptions are made if the pilot determines that deplaning passengers would be a safety risk, or if ATC decides that doing so would disrupt airport operations. Violators can be fined up to $27,500 per passenger.

The Dartmouth-MIT study, “Tarmac Delay Policies: A Passenger-Centric Analysis,” determined that flights with three hours or longer of tarmac time decreased by 98 percent from 604 in 2009 before the rule took effect to just 11 in 2013. The rule “seems effective” in preventing lengthy tarmac delays, the authors acknowledge. But they argue that disruptions from flight cancellations, diversions and misconnections have increased delay times, especially for passengers scheduled to travel on flights that are at risk of long tarmac delays.

While other studies have concluded that the tarmac rule has increased the probability that flights with long taxi-out times will be cancelled, the Dartmouth-MIT study is the first to analyze the rule’s effectiveness from the passenger perspective, the authors contend. “Flight delay alone can considerably underrepresent the delay to passengers,” they state. “For example, as a result of a two-hour flight delay, a passenger on this delayed flight with a one-hour connection time misses his/her connecting flight leg, and has to wait, say three more hours, for the next flight with an available seat to his/her final destination. This situation results in a passenger delay of four hours, double the two-hour flight delay.”

Using an algorithm to estimate passenger delay, the researchers quantified delays to passengers in the peak year of 2007, when there were 1,654 instances of taxi-out times of three hours or longer, and compared those to estimated delays for hypothetical scenarios with the tarmac rule in effect. “Our main result is that, while the three-hour tarmac delay rule (in its current form) effectively decreases tarmac delays, especially the extremely long tarmac delays, each passenger-minute of tarmac time saving is achieved at the cost of an increase of approximately three passenger-minutes in total passenger delays,” the study states.

A “better balance” between conflicting objectives of reducing the frequency of long tarmac delays and reducing overall passenger delays could be achieved by modifying the current rule, according to the study. The authors recommend increasing the tarmac time limit to 3.5 hours and applying the rule to flights with departure times before 5 p.m. They also recommend that the clock should start when an aircraft begins returning to the gate, rather than when passengers are allowed to deplane.