Cargo carrier Atlas Air Worldwide plans to acquire air cargo charter company Southern Air Holdings in a transaction valued at $110 million that will combine two significant U.S. air cargo operators. With the purchase, which is subject to approval by the U.S. Department of Transportation, Atlas Air gains Kentucky-based Southern Air’s agreements with shipping company DHL Express and two additional aircraft types—the Boeing 777 and 737.

New York-based Atlas Air Worldwide is the parent company of cargo carrier Atlas Air and freighter leasing company Titan Aviation Holdings. Atlas is also the majority shareholder of Polar Air Cargo Worldwide, with DHL Express holding a 49-percent interest in the latter company. Atlas Air operates a fleet of Boeing 747-8 and 747-400 freighters; Polar Air operates 747-400s.

Atlas Air Worldwide expects the combination with Southern Air will add $100 million to its annual revenues. We are very pleased to announce a strategically compelling, highly complementary and immediately accretive acquisition of Southern Air,” William Flynn, Atlas Air Worldwide president and CEO, said on January 19. “We are eager to capitalize on the substantial opportunities that the transaction will provide, especially 777 and 737 aircraft operations.”

Based at Cincinnati/Northern Kentucky International Airport, a DHL Express hub, Southern Air Holdings is the parent company of Worldwide Air Logistics Group and its two operating subsidiaries: Southern Air and Florida West International Airways. Southern Air operates five Boeing 777-200Fs and five 737-400Fs under agreements with DHL. Miami-based Florida West operates three Boeing 767-300Fs for LAN Cargo.

Southern Air Holdings emerged from Chapter 11 bankruptcy reorganization in 2013. By joining the Atlas Air family of companies, Southern Air Holdings will now have a strong and viable parent to enable us to continue to grow,” said CEO Daniel McHugh. “We share the same commitment to providing superior customer service via our exceptional team of aviation professionals.”

Gulf Air thrust itself into the spotlight at the Bahrain International Airshow on Thursday with an order for 17 Airbus A321neos and 12 A320neos. Long-term loss-maker Gulf Air expects to post its first profits in more than a decade when it announces its 2015 results in the spring. It said it expects the 29 new neos to “fit seamlessly” into its current fleet of 22 A320s and six A330-200s.  

Appearing at the show with Airbus CEO Fabrice Bregier and Bahraini government officals, Gulf Air CEO Maher Salman Al Musallam alluded to plans to simplify the airline’s fleet structure with the order, which confirms and adds to a deal in 2012 calling for delivery of 10 A320neos.

“This restructured order meets Gulf Air’s future fleet requirement and our network expansion plans,” he said. “As a result, I now look forward to furthering Gulf Air’s fleet modernization process while supporting our network and overall passenger experience enhancement strategies.”

Gulf Air’s restructuring exercise began in 2012, when it effectively replaced an order for 20 A330s with a commitment for eight A320ceos and up to 16 A320neos and curbed aspirations to compete directly with Emirates Airline, Qatar Airways and Etihad Airways on long-haul services. Rather, it implemented a new plan to provide more service within the Gulf Cooperation Council (GCC) states with narrowbodies, including 10 Bombardier C Series jets over which it remains in negotiations.

Gulf Air’s long-haul plans now center on Boeing Dreamliners. Just before announcing the Airbus order, it said it converted delivery positions on sixteen 787-8s to larger 787-9s.

A slight reduction in delivery expectations this year will accompany renewed sales efforts by ATR in Iran, China and the U.S., as the Franco-Italian manufacturer adjusts to headwinds in the turboprop market due to economic softening in the developing world and a sharp dip in fuel prices. Although the company collected record revenues of $2 billion last year, it missed its deliver target of 95 by seven airplanes, while it collected firm orders for 76 machines and options on another 81.

Some customers did not hedge their purchases and, because of the strong U.S. dollar, they could not afford to take delivery of their aircraft, CEO Patrick de Castelbajac explained in a press conference last week.

He also mentioned “a lot of tension” in the supply chain, which caused components to arrive late. The situation has translated into some weeks of delivery delay, he acknowledged. “We are trying to help some suppliers improve their production performance,” Castelbajac said. But, despite his company's efforts, some suppliers seem unable or unwilling to cooperate.

ATR has therefore downgraded a planned ramp-up to more than 100 deliveries in 2016, adjusting the delivery goal for this year to “above 90.” Its order target stands at “roughly 100,” about a quarter of which Castelbajac said could come from Iran. “As the sanctions have been lifted, people there are eager to fly in recent, safe aircraft and the country has airports and pilots,” Castelbajac noted.

Meanwhile, “China has reached a maturity level where they realize they need regionals,” he continued. ATR late last year opened a representative office in Beijing, with full support from Airbus.

ATR also hopes to finally realize its aspirations to return to the U.S. market after several years of no sales activity. “The number of jets that are flying for half an hour is crazy there,” said Castelbajac. “Using an ATR would take five more minutes and burn half the fuel.” As if to underscore its commitment, the company plans to organize a demo tour in the U.S. this year.

Still, ATR’s quest for orders now takes place against a not-so-favorable backdrop. The dwindling price of oil price decreases the turboprop’s competitive advantage, for example. Growth has slowed in Asia and even turned to recession in Brazil. As a result, ATR’s firm backlog has slightly decreased, from 280 to 260.

In terms of product improvement, ATR's engineers continue working with Elbit on a “wearable” head-up display to feature an infrared-based enhanced vision system. ATR expects to gain certification in 2017. The year after, ATR plans to upgrade the standard of satellite-based navigation tools aboard its aircraft to RNPAR 0.3/0.3 for better precision in mountainous areas in particular.

Europe’s five largest airline groups have formed a new association to lobby the European Union and national governments for reduced airport and ATC costs. Airlines for Europe (A4E) combines Air France KLM, Lufthansa Group, International Airlines Group (IAG) and low-cost carriers easyJet and Ryanair.

Officially launched on January 21 during the European Aviation Summit at Amsterdam Schiphol airport, the association affirmed its support of the European Commission’s recently released “Aviation Strategy for Europe,” a set of proposals that some airline and pilots groups have criticized as not sufficiently ambitious. European commissioner for transport Violeta Bulc posed with CEOs of the founding airlines at the launch event.

“We welcome the European Commission’s Aviation Strategy for a stronger and more competitive European aviation industry,” the CEOs said in a joint statement. “But we need to act now; large-scale airport monopolies, high charges, taxation and inefficiencies characterize the aviation supply chain. We want to work with the Commission and the member states to implement the strategy, and we call on the member states to support the work of the Commission to reduce monopoly supplier costs.”

The formation of A4E exposes ongoing divisions within the European airline industry over different issues. Last March, IAG, the parent company of Aer Lingus, British Airways, Iberia and Spanish low-cost carrier Vueling Airlines, broke off from the Association of European Airlines because of differences over competition from Persian Gulf carriers—an issue that influenced Delta Air Lines’ decision last year to break away from the U.S. trade group Airlines for America.

The A4E airlines claim to carry more than 50 percent of passengers in Europe. “A4E will be a powerful vehicle to address the industry’s issues,” the groups said. “For the first time, low-cost and network carriers are creating an association to support the adoption of a new European Aviation Strategy. Today we also call on all airlines in Europe to join us and make our voice even more powerful.”

Citing a study that found that airport charges have increased by 80 percent at the 21 largest European airports over the last decade, the A4E airlines said they want to ensure that “monopoly airports are effectively regulated” so that passengers “receive the full benefit of commercial revenues which they generate.” They also call for the timely completion of the Single European Sky modernization effort and “better economic regulation at EU level” of ATC costs assessed by national and regional air navigation service providers (Ansps). “The best way to improve the competitiveness of EU airlines is to lower the costs of monopoly providers, which would help everyone,” the airlines said, adding that they will seek an “urgent meeting” with Ansps to develop an action plan. A third focus of the association is “removing unreasonable taxes” levied by national governments.

The founding airlines named Thomas Reynaert, who formerly headed the European government relations office of United Technologies, as A4E managing director.

Air BP, Norwegian airport operator Avinor and SkyNRG last week achieved what they say is an important breakthrough in making biofuels a viable option for airlines when they delivered the first jet biofuel to operators at Norway’s Oslo Airport using the existing hydrant mechanism of the main fuel farm. Germany’s Lufthansa was the first airline to use the new option when it refueled an Airbus A320. Scandinavian flagcarrier SAS and KLM Royal Dutch Airlines confirmed on January 22 that they too will be using the new service.

Following an assessment of local market demand by Avinor, Air BP agreed to supply a minimum of 1.25 million liters of jet biofuel at Oslo Airport. Specialist biofuel provider SkyNRG helped to source initial supplies from the Neste Provoo refinery in Finland.

 “With the recent Paris agreement signed [on measures to slow climate change] and the airline industry’s ongoing commitment to protecting the environment, we are delighted to be the first airport in the world to enable refueling of biofuel from our existing fuel farm and hydrant dispenser system,” Avinor CEO Dag Falk-Peterson commented.

The biofuel initiative is part of a wider response to the International Air Transport Association’s goal of achieving carbon neutral traffic growth by 2020 and a 50 percent reduction in carbon emissions by 2050. The European Union has set a more specific goal of ensuring that 3.5 percent of all aviation fuel consumption will consist of biofuel by 2020.

In December 2015, The Port of Seattle partnered with Boeing and Alaska Airlines to launch a $250,000 study aimed at assessing the feasibility of offering a blend of biofuel and conventional Jet A to aircraft at Seattle-Tacoma International Airport. Eventually, the partners want to be able to fuel all flights from the airport with biofuel, but as yet have set no specific timeline for achieving these goals.

A coalition of liberal advocacy groups has emerged that opposes a move within the U.S. Congress to create a new entity separate of the Federal Aviation Administration to manage the nation’s ATC system. Calling itself Americans Against Air Traffic Privatization, the coalition declared that it has an online petition signed by 130,000 people that it will deliver to Congress as that body deliberates the next FAA reauthorization bill.

In a conference call on January 26, principals of the coalition said they suspect that lawmakers will seek to privatize the ATC system to benefit the airlines—an outcome that general aviation groups including the National Business Aviation Association also fear. With the notable exception of Delta Air Lines, major U.S. carriers represented by trade organization Airlines for America (A4A) back the formation of a “federally chartered, not-for-profit corporation” that would operate independently of the FAA to run the ATC system.

Leading the conference call were two Democrats who sit on the Republican-controlled House Transportation and Infrastructure Committee: Rep. Elijah Cummings (D-Md.) and Del. Eleanor Holmes Norton, a non-voting delegate to Congress who represents the District of Columbia. Both called for a bipartisan accord on ATC reform, saying they oppose any move to privatize the system.

“The system that we have now under the current regulations has been a very strong, effective and efficient system,” said Cummings. “We don’t need to create a governmental entity to oversee air traffic control, and we certainly don’t need to give airlines more power over the aviation system, which is precisely what they would get under the Republicans’ proposal as we know it.”

Cummings added: “Americans know that the only so-called innovations that the airlines have made in recent years are corporate consolidations that have resulted in fare increases and the introduction of hidden fees for everything from aisle seats to checked bags to stale coffee. Americans already dread the experience of air travel, and giving the airlines yet more power over the aviation system will not make flying any better or easier.”

Andrea Miller, executive director of the organization People Demanding Action charged that A4A and the libertarian Reason Foundation are lobbying Congress for ATC privatization. “There’s one group pushing this plan and that group stands to benefit the most by corporate consolidation of power—Airlines for America,” she said. For its part, the Reason Foundation “is driving a conservative, ideological plan through Congress.”

Miller cited a study the National Air Traffic Controllers Association commissioned in 2003 by Columbia University Professor Elliot Sclar which found that ATC privatization would be detrimental for workers and users of the system. She added that other groups “are making their voices heard” in opposing a new ATC entity, including Delta, the NBAA, the Air Care Alliance and the Alliance for Aviation Across America.

The founding organizations of the coalition are: Public Citizen, People Demanding Action, Daily Kos, Progressive Congress, American Family Voices, RootAction.org, and the Courage Campaign.

Responding to the coalition’s conference call, A4A issued a statement saying that Americans Against Air Traffic Privatization “is arguing against positions no one is taking. Proponents of reform advocate for a not-for-profit organization that will be overseen by the FAA and governed by a board inclusive of all stakeholders, including employee unions, general aviation and private fliers, and passengers. That’s the way air traffic services are run in most of the rest of the world. We want to see more air traffic controllers hired. We want to make the system even more safe. And most importantly, we want to make flying better for the traveling public. Members of Congress should want the same thing.”

The start of a transition from the Boeing 737NG to the 737 Max on Boeing’s Renton, Washington production line and a previously announced cut in production of the 747-8 to just six per year will account for a majority of a some 20-airplane reduction in projected commercial airplane deliveries this year, according to executives speaking during the company’s quarterly earnings call on Wednesday. After delivering a record 762 airplanes last year, Boeing now expects to ship somewhere between 740 and 745 in 2016.

Boeing CEO Dennis Muilenburg said the transition to the 737 Max will account for a drop of roughly 12 airplanes, due in part to the need to build two Max test articles and “build ahead” some airplanes for delivery in 2017.

“This year you’ll see a bit of a transition because of the Max [and] a temporary reduction in revenue, top line if you will, as a result,” said Muilenburg. “But we can tell you very clearly that our long-term view here is increasing top and bottom line performance and cash growth year-over-year.”

In fact, Boeing announced plans to increase 737 rates to 57 per month in 2019 following a move from 42 to 47 in 2017 and from 47 to 52 in 2018, reflecting what Muilenburg characterized as a fundamental strength in the marketplace. Although plans call for 787 Dreamliner production rates to increase from 10 to 12 this year, shipments will remain basically flat at some 135 due to natural shifts in delivery timing. The company expects book-to-bill ratio to again reach 1:1, said Muilenburg, suggesting roughly flat unit sales. This year Boeing reached its 1:1 book-to-bill target with late sales in December that raised its net total to 768.

Separately, Boeing confirmed that the transition from 777 to 777X production in Everett, Washington, will require it to lower 777 rates from 8.3 to seven per month in 2017. Notwithstanding the reduction, Muilenburg cited continued strong demand for the widebody, reflected in a sellout of delivery slots in 2016, an 80 percent sales-to-delivery-slot ratio in 2017 “a healthy position” for 2018. Boeing has booked firm orders for 101 777s over the past two years, including an order for six from Air China earlier this month. The 777 backlog now stands at 224 airplanes while the 777X orderbook shows orders for another 306. “We indicated last year that we did not anticipate the production rate on the program going below seven per month,” said Muilenburg. “In solidifying our production plan over the last few months we can confirm that view.”

Iranian officials have signed two agreements with Airbus covering orders for 118 airplanes and a comprehensive civil aviation cooperation package, the European manufacturer confirmed Thursday. The sides signed the agreements at the Élysée Palace in Paris, during Iranian President Hassan Rouhani’s official visit to France with French President François Hollande.

Iran Air has signed an agreement with Airbus for the acquisition of what Airbus calls the full range of its new airliners, including 73 widebodies and 45 narrowbodies. The deal includes pilot and maintenance training and support services.

Airbus also announced that Iran’s minister of roads and urban development, Abbas Ahmad Akhoundi, signed a “cooperation agreement” to support the development of air navigation services (ATM), airport and aircraft operations, regulatory harmonization, technical and academic training, maintenance, repair and industrial cooperation.

The two agreements took place as part of the implementation of the JCPOA (Joint Comprehensive Plan Of Action) on January 16 and its associated rules and guidance. Under that deal, Iran has agreed to significantly curb its nuclear ambitions and allow the International Atomic Energy Agency regular access to its facilities for inspection.

Iran Air’s contract includes orders for 21 airplanes from the current A320 family, 24 A320neo-family airplanes, 27 of the current A330 family, 18 A330-900s, 16 A350-1000s and 12 A380s.

“Today’s announcement is the start of re-establishing our civil aviation sector into the envy of the region and along with partners like Airbus we’ll ensure the highest world standards,” said Iran Air chairman and CEO Farhad Parvaresh.

“The skies have cleared for Iran’s flying public and Airbus is proud to welcome Iran’s commercial aviation back into the international civil aviation community,” added Airbus president and CEO Fabrice Brégier. “Today is a significant step in the overhaul and modernization of Iran’s commercial aviation sector and Airbus stands ready to play its role in supporting it.”

Airbus received a big boost for its A380 program with a firm order for three of the superjumbos from Japan’s All Nippon Airways, the manufacturer and airline announced Friday. With the order, ANA becomes the first Japanese operator of the quadjet, orders for which had slowed to a trickle before this week’s earlier announcement that Iran Air would take 12. ANA has chosen Rolls-Royce Trent 900 engines to power its fleet.

ANA said it plans to take delivery its A380s starting in its 2018 fiscal year, when the airline launches primarily tourist services between Tokyo and Hawaii as part of a strategy to expand seat capacity by 50 percent on international routes and expand the group’s fleet by 300 airplanes over the next five years.

“We are confident that the A380 will play an important role in the success of ANAHD’s new business strategy,” said Airbus president and CEO Fabrice Brégier. “The A380 will help ANA Group overcome capacity constraints at Tokyo’s busy airports, transporting more passengers, more efficiently and in greater comfort—all at lower cost.”

ANA’s new order follows a orders placed in 2014 and 2015 for 37 A320-family narrowbodies.

The order also signals ANA’s first non-Boeing widebody commitment. Its widebody fleet now consists of Boeing 767s, 777s and 787s. It also holds an order for 20 Boeing 777-9X jets, scheduled for delivery in 2020.

Pilot error was to blame for the July 23, 2014 crash of a TransAsia Airways ATR 72-500 that claimed 48 lives, Taiwan’s Aviation Safety Council (ASC) has determined. The twin turboprop crashed into a residential area while on approach to Magong Airport on Penghu Island, in the Taiwan Strait, during a thunderstorm.

Seven months later, a TransAsia ATR 72-600 crashed into Taiwan’s Keelung River after taking off from Taipei Songshan Airport, resulting in 43 deaths. The ASC continues to investigate that accident.

In a final report on the 2014 crash released on January 29, the council stated that “contrary to standard operating procedures” the pilots executed an approach to the airport below the minimum descent altitude (MDA) when they could not see the runway. The aircraft, operating as Flight GE 222, had departed from Kaohsiung International Airport on the Taiwan mainland with 58 passengers and crew on board. It collided with terrain 850 meters northeast of the threshold of Magong Airport Runway 20.

“Flight crew coordination, communication, and threat and error management were less than effective. That compromised the safety of the flight,” the ASC stated in a summary of its findings. “The first officer did not comment about or challenge the fact that the captain had intentionally descended the aircraft below the published minimum descent altitude. Rather, the first officer collaborated with the captain’s intentional descent below the MDA.” Neither of the pilots recognized the need for a missed approach until the aircraft reached the point where a collision with terrain became unavoidable, the council added.

The ASC report contains 29 safety recommendations. Among them, the council calls on aircraft manufacturer ATR to “evaluate the feasibility of a modification” to provide a new enhanced ground proximity warning system on all ATR 72-500s.

The first Boeing 737 Max 8 flight-test airplane took to the air for the first time Friday, taking off at 9:47 a.m. local time from rainy Renton Municipal Airport and landing at Seattle’s Boeing Field some two and half hours later. The event marked the start of a four-airplane, nine-month flight test campaign expected to culminate in FAA certification and delivery to launch customer Southwest Airlines in the third quarter of 2017.

Powered by a pair of CFM Leap-1B turbofans, the 737 Max took off on a northward track, circled and headed west-northwest over Puget Sound and Olympic National Park until it turned east toward Port Angeles and the Straight of Juan de Fuca. At the time cruising at 14,800 feet, it turned south-southwest after flying to the east of Port Angeles and crossed its original northwesterly path until it reached the southern end of the Olympic Peninsula. From there it turned around and flew north-northeast toward Canada before flying a pair of oval patterns west of Puget Sound, heading back toward the northernmost reaches of Washington state, turning east and then south, taking it past Boeing’s Everett widebody plant and into the Seattle area for landing at Boeing Field. The airplane reached a top speed of 250 knots and an altitude of 20,000 feet.

“In places it was a little tough up there,” said 737 chief test pilot Ed Wilson. “The weather wasn’t real kind to us over eastern Washington but it was great over in the west, so we stayed over there on the west side and got everything we needed to get done today.”

Featuring newly designed engines, major avionics upgrades and several aerodynamic changes including the addition of a pair of “split scimitar” winglets expected to deliver up to a 1.8-percent fuel efficiency improvement over the current “in line” design, the 737 Max promises to burn on average 14 percent less fuel than the 737-800NG consumes.       

Having now collected orders for more than 3,000 Max jets, Boeing will build the first airplanes exclusively on a new production line in its Renton, Washington factory. The new line will allow the team to isolate assembly of the first 737 Max from the rest of production to help it learn and perfect the new build process while the Renton factory continues to turn out airplanes at rate of 42 a month. Once mechanics validate the production process, the company will extend Max production to the other two final assembly lines in Renton.

Since last year Boeing has restructured the factory floor in Renton yet again and installed the wing-to-body join tool that the two current production lines use, ensuring its production readiness by the time the company loads the Max. Meanwhile, the company has consolidated fuselage systems installation from two parts, each serving one assembly line, into a single new three-level, moving design tool, allowing the company to more efficiently use the available space in Renton.

Years from now, if people ask me where I spent the great (and hopefully only) blizzard of 2016, I will have to say “a lot of places.” Having been in Tampa attending NBAA’s annual Schedulers and Dispatchers Conference, I was aware of the increasingly dire weather predictions and was initially willing to dismiss them as media hype.

Besides, the show didn’t end until Friday afternoon, and the heavy stuff wasn’t due until late Friday night, by which time I should surely be home. Therefore, it came as a surprise when I received the text from United notifying me that my flight that night was already cancelled. As soon as my last session ended, I started working the phone to United, trying to score a seat on the next available flight. After a lengthy wait on hold, I was informed that the next flight would be Monday evening out of Orlando, but I should try again the next day. When I called back on Saturday morning, after another lengthy wait, I was told there was a flight to Newark on Sunday departing from Fort Lauderdale, an approximately four-hour drive. Despite my wife’s suggestion that I just wait it out in Orlando and go to Disney (not in my book while she was stuck shoveling 30 inches of snow), I hopped in my rental and headed south. As I was eating dinner Saturday night, I once again received the text of doom from United. Yes, my Fort Lauderdale flight was now also off the board. Back at my hotel room, I dialed United.  While I like Gershwin’s “Rhapsody in Blue” as much as the next guy, after hearing it repeatedly while I was on hold for more than two hours, I never want to hear those chords again.

Finally, by now certainly unexpectedly, a human voice answered. At this point, explained the patient but clearly harried ticket agent, I would likely be enjoying Florida’s hospitality for another four days before a seat on a direct flight to the New York-area could be obtained.

Clearly it was time to start thinking outside the box. “What about connections through other cities?” I asked. By this point I’d have gone through Pyongyang if it would have gotten me home sooner. After 40 minutes, she came back with a solution. I could drive to Miami the next day and depart for Houston. From Houston, a connection to Chicago O’Hare where I would overnight, before (hopefully) departing for Newark on Monday morning. Not an optimal itinerary by any means, but if nothing else, at least it would get me out of Florida, where tens of thousands of vacationing Northeasterners were stranded

Before departing Fort Lauderdale, I accepted an invitation to visit the Sheltair FBO at FLL. After giving me a tour of the impressive facility, CSR extraordinare Beverly Patton—unbidden—began an unsuccessful canvassing of all the charter operators at the airport to see if anyone had a flight to the New York area and would be interested in taking a vagabond journalist with them. Now I understand firsthand why our readers regularly single her out for recognition in our annual FBO survey.

After a short drive to Miami and two packed flights, I found myself at O’Hare International after midnight. As much as I might have wanted to present my boss with a $300 hotel bill, it made little sense, given my early scheduled departure, to check in to a hotel, so instead, for the first time, I spent the night at an FBO. At Signature Flight Support’s facility I was welcomed by Laura, the overnight supervisor. I spent the night in a recliner in the pilots' lounge, and while it wasn't a bed I would kill to have one like it on my next long-haul flight.

I arrived back at Terminal B early the next morning. Amidst a series of flight delays the captain briefed us in the waiting area, informing us that the ramps and jetways at EWR were still not clear, and there was a ground hold in effect. If we landed, we would be stuck on the aircraft because there was no place to put us. Much better, he said, to be stuck here at the airport where at least there was food.

Five hours after the scheduled departure time, we finally got the OK to board. According to the flight crew, we were able to leapfrog some earlier scheduled ORD departures because of the high number of international connection passengers we had on board.

The flight itself was blissfully uneventful, anti-climactic, even. The effects of Jonas were very evident, with bulwarks of plowed snow everywhere. Upon landing we had to be towed to the gate to keep our jetwash from snowblasting other parked aircraft. After deplaning at EWR, I took a look at the arrivals board while waiting at the baggage carousel and was stunned to see the number of flight cancellations, even two days after the storm. I realized they weren’t kidding when they said the earliest I could possibly get home direct from Florida would be Wednesday.

In the long-term parking lot, the attendant had to call for a plow to liberate my car from its snowy prison. All told, I pulled into my driveway three days later than anticipated, and with a new realization of just how fragile the air transport system is.

Boeing Capital projects that airlines and lessors generally will encounter few problems acquiring aircraft financing this year. It describes the market as healthy as order books remain strong, industry growth continues to outstrip GDP and airlines continue to turn more profits than they have in decades, all the while low fuel prices offset the effects on economies of the commodities crisis.

Tim Myers, president of Boeing Capital Corporation, described the finance market as “very healthy” during a recent briefing in London. Boeing, he said, “did $500 million of equipment last year.” Boeing projects the value of industry deliveries to total around $127 billion in 2016. “And it will continue growing at a healthy rate,” noted Myers.

Aircraft purchases accounted for 24 percent of all acquisitions, thanks to the good state of airlines’ finances, allowing them to “deleverage their balance sheets;” 36 percent came from the capital markets such as pension funds and 27 percent from commercial banks. Export Credit Agencies accounted for around 11 percent, Myers suggested (down from a peak of 33 percent). “ECA financing continues to be at a fairly low level…we’re forecasting it will be down to 9 percent of our deliveries in 2016,” he noted.

Myers said that leasing companies now account for around 40 percent of deliveries in the market place “and the same is true for Boeing.” He said he believes that lessors will continue to enjoy ready access to capital markets, noting that such financing accounts for 53 percent of their funding. Meanwhile lessors rely on export credit for only 5 percent of their business, while 26 percent involve cash purchases.

Myers added that the asset-backed securitizations (ABS) market had come back strongly after almost entirely disappearing following the 2008 banking crisis. “There’s new equity coming into the aircraft finance sector…through the leasing sector…It’s terrific for our industry,” he said. “The Chinese banks all have leasing companies now. Banks [account for] the bulk of growth over the past five years and lots have offices in Dublin now.” Dublin has become the main center for aircraft finance companies and Myers had just presented at the annual Global Airfinance conference there.

He also suggested that “new types of structures” would emerge. “Some need this to remain competitive [versus] the new equity that is coming in,” he said, adding that the lease market remains extremely competitive.

Myers also said “returns have remained very consistent” in the EETC (Enhanced Equipment Trust Certificate) market.

He outlined “two ways to get business” for lessors, namely sale and leaseback deals with carriers, accounting for around 46 percent, and direct purchases from manufacturers, when they subsequently lease the aircraft to operators. The Boeing split now stands at 46 percent to 54 percent, which Myers described as a healthy ratio.

Myers also cited “an interesting split” between U.S. and non-U.S. airlines as access to EETC arrangements has proved “very beneficial” to U.S. airlines. However, non-U.S. airlines account for 25 percent of the market now, he noted. “They didn’t have access to that market five years ago,” said Myers, suggesting that the Cape Town Convention had helped a lot, allowing lenders to enforce against an asset in the case of a default. “The EETC market resurgence in 2015 will continue,” he predicted.

In debt markets, Myers said, Japanese banks “are coming back with sizeable dollars” but that “China funds China” even though Chinese banks had shown some interest in the rest of the world.

Generally, Myers said that the number of parked aircraft continues to decrease, particularly as lower fuel prices make older aircraft viable. Neverthless, he insisted that demand for new aircraft remains as strong as ever. “Manufacturers can’t build aircraft fast enough,” he said. “[Boeing] delivered 762 aircraft last year.” Meanwhile, average aircraft utilization numbers have reached “historic highs” at 8.5 hours a day for single-aisle and 11.5 hours for twin-aisle aircraft, as have load factors, at some 80 percent.

Finally, Myers said he expects the industry to see a 2.5 to 3 percent rate of growth of replacement aircraft deliveries this year, and a 2.5 to 4 percent growth rate for additional aircraft, resulting in a total added before retirements of 6 to 7 percent. “We forecast that this will go to 9 percent by 2020,” concluded Myers.

Single-aisle airliners occupy perhaps the most dynamic and active segment in all of commercial aviation, with no fewer than five new competitors vying for the attention of the world’s fleet planners. While the Boeing 737 Max and Airbus A320neo have taken the majority of new orders, upstarts in the form of the Bombardier CSeries, Comac C919 and Irkut MC-21 have crowded the field and, in the estimate of the newcomers’ manufacturers, threaten to upset an unhealthy duopoly in the mainline airline business. Meanwhile, new aircraft such as the Mitsubishi MRJ and the next generation of E-Jets called the E2s stand to redefine the limits of regional jet operations, where a relative newcomer in the form of the Sukhoi Superjet now commands a limited presence and the Comac ARJ-21 enters service with its first Chinese operator. 

The first of the new narrowbody models poised to enter the market–the Pratt & Whitney PW1100G-powered Airbus A320neo–gained its joint FAA-EASA certification on November 24, after the company had to redistribute certification work among its flight-test aircraft to recoup time lost on the first aircraft, grounded by a defect in one of the geared turbofan engines in April and again in late September by a separate problem the company described as “minor.”

Development schedules call for the Pratt geared-turbofan-powered version of the family’s stretch variant, the A321neo, to gain certification late this year and the smallest model, the A319neo, before the middle of next year. In January last year Airbus launched a long-range version of the A321neo designed to carry 206 passengers 4,000 nm. Expected to win certification in 2019, the so-called A321neo 97t now ranks as the longest-range single-aisle airliner on the market, capable of flying transatlantic routes and potentially opening long-haul markets inaccessible by any other single-aisle airplane in production or in development.
 

GE Aviation recently filed petitions with the U.S. Patent and Trademark Office (PTO) for inter partes review (IPR) of five patents granted to United Technologies and another to Rolls-Royce, including technology at the heart of the Pratt & Whitney PW1000G, or so-called geared turbofan. GE claims the office improperly granted the patents mainly because of the age of the technologies and concepts in question.

GE directed its challenges at such concepts as bypass ratios, fan blade tip speeds, number of low pressure turbine stages, and use of thermal cooling components, composite materials and variable area fan nozzles with gas turbine engines. The concepts, GE Aviation’s January 29 petitions assert, were well-known in the industry long before the companies in question sought them. 

An IPR involves a proceeding conducted by the PTO to review the validity of issued patents. The America Invents Act created the relatively new procedure to help streamline the patent review process and “enhance competitiveness.” Since the PTO first accepted the petitions in 2012, companies have filed thousands of IPRs to dispose of inappropriately granted patents. The entire IPR process, which involves an initial determination of a petition’s validity and a final determination by three-judge panel, typically takes 18 months.

“Just as GE strives to responsibly respect the valid intellectual property rights of third parties, it also works to ensure that the patents it seeks truly reflect new innovations,” said GE in a statement. “IPRs are an especially appropriate tool to challenge patents when a party does not fully disclose what has appeared in the prior art to the PTO.”

The geared turbofan entered service last month on Lufthansa Airlines’ first Airbus A320neo. It also appears on the Bombardier C Series, the new Embraer E2s, the Mitsubishi MRJ and the Irkut MC-21.

GE, meanwhile, collaborates with France’s Snecma on the competing CFM Leap series of turbofans also available on the A320neo family. The CFM Leap-1B flew for the first time on the 737 Max 8 just last Friday and China’s Comac has fit Leap-1Cs onto the first C919 narrowbody.   

“GE cannot allow any engine maker to patent decades-old concepts, or broad technology concepts which have been long well-understood and known,” said GE. “Such efforts are in total conflict with the spirit of the patent laws, and create wrongful obstacles that impede technology progress.”  

Somali officials have launched an investigation into Tuesday’s emergency landing by a Daallo Airlines Airbus A321 at Mogadishu Airport after a gaping hole opened in the side of the aircraft’s fuselage. According to the airline, the flight had traveled some 15 minutes on a scheduled flight to Djibouti in the horn of Africa when the incident occurred. Pilots managed to return the airplane and land safely at Mogadishu Airport without further incident. However, according to an airline statement, one of the 74 passengers on board remains missing. Two other passengers who sustained minor injuries went to a local hospital for treatment.

An investigation by the Civil Aviation Authority in Mogadishu and a technical team from the owner of the airplane, Hermes Airlines of Greece, continues in close coordination with the Greek Civil Aviation Authority and Airbus. Hermes Airlines wet leases the A321 to Daallo.

The nature of the damage to the airplane raised speculation that an explosive device might have detonated on board. Meanwhile, local media outlets reported that residents of a village some 20 miles north of Mogadishu found the charred remains of a body suspected to have fallen from the airplane. Officials have yet to confirm that the remains were of the missing passenger, however.

In a statement, Daallo Airlines said it has operated in the region for 25 years without a fatality. “Daallo Airlines takes security and safety of its passengers very seriously and would like to assure that all its aircraft [owned and leased] are registered/maintained under EASA [European Union] regulations and are being operated by highly qualified and experienced pilots from Europe,” the statement concluded.

Somalia remains in the grip of an insurgency by the Islamic extremist group al-Shabab, which has claimed responsibility for several deadly attacks throughout the country.

Republican leaders of the U.S. House Transportation Committee unveiled legislation on February 3 that proposes to relieve the Federal Aviation Administration of its role in managing the nation’s ATC system, assigning that task to a separate, not-for-profit corporation. The long-anticipated move was endorsed by unionized controllers but encountered immediate resistance from Democrats, airline pilots and other unionized FAA employees.

The creation of a federally chartered “ATC Corporation” is contained within the so-called Aviation Innovation, Reform and Reauthorization (AIRR) Act, legislation that would reauthorize, or reestablish, funded programs within the FAA for six years after its current authorization expires on March 31. Governing the corporation would be an 11-member board of directors consisting of a CEO; two directors appointed by the secretary of Transportation; four directors appointed by the “principal organization” representing mainline airlines; two directors representing general aviation owners and operators; one director representing controllers and one director representing airline pilots. Though federally chartered, the new entity would not be “a department, agency or instrumentality of the United States government,” according to the bill language.

Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, and three other Republican lawmakers unveiled the legislation at a Capitol Hill press conference. Shifting FAA management of the ATC system to a separate corporation will involve a three-year transition, predicted Shuster, who said an independent entity that charges airspace users for its services represents the best model for achieving ATC modernization.

“I believe by separating air traffic control into an independent not-for-profit corporation and leaving behind the regulatory, the safety aspect, in government, is something we need to do,” said Schuster. “There are 46,000 people at the FAA; I do not believe they are suited (to be) a high-tech service provider for the airlines and the traveling public.”

Asked what a corporation can do that the FAA cannot do, Shuster responded: “They can go to the markets and borrow dollars and issue bonds to get the dollars necessary, based on their cash flow, not based on an appropriations cycle, to go forward and make the investments (necessary) for the long term. Operating outside of the government, they’re going to be outside of this political pressure; if they want to change, modify, reform, consolidate different aspects of this organization, they will be able to do it.”

Acknowledging “genuine policy differences” with other lawmakers, Shuster said members of the Transportation Committee will be afforded an opportunity to discuss the legislation at a hearing next week, and to offer amendments during the “mark-up” process before the bill is sent to the full House.

But the prospects of the legislation passing both the House and the Senate before March 31 appeared dim. Hosting reporters in his office after the Republicans’ press conference, Rep. Peter DeFazio (D-Ore.), the committee’s ranking minority member, said Democrats oppose any spin-off of the FAA’s management of ATC, and will instead offer “targeted fixes to what we know are enduring problems with the FAA.” Those fixes, expressed as amendments, call for mandating the level of FAA funding and reforming its personnel and procurement processes. The reforms will help the FAA be self-funded, said DeFazio, adding that a 10-year projection indicates the agency is “3 percent shy of being 100-percent funded by user fees that currently exist.”

DeFazio, who was joined by Rep. Rick Larsen (D-Wash.), said transferring ATC oversight to another entity will undermine the FAA’s progress toward achieving the $40 billion-plus NextGen system modernization. “At this critical point in acquiring NextGen technology, it would be a huge disruption and a setback for that progress,” he said.

Lining up behind the legislation as proposed was the National Air Traffic Controllers Association (Natca), which represents most FAA controllers. “After extremely careful review, consideration and deliberation, we have reached a decision: Natca supports this bill,” the union said. Opposing the legislation was the Air Line Pilots Association (Alpa), which argued that commercial air carriers would shoulder the financial responsibility of supporting an ATC system run by a separate organization. Alpa said the legislation also does not provide a means to strictly regulate the carriage of lithium batteries. Also opposed were the American Federation of Government Employees, the American Federation of State, County and Municipal Employees and the Professional Aviation Safety Specialists, which also represent FAA employees. “Privatizing the FAA will only add uncertainty and potentially reverse major advancements that have been made over the past several years toward modernization,” the unions stated.

In the past week, the Republican and Democrat leaders of both the House and Senate appropriations committees have issued letters expressing their opposition to creating a separate ATC corporation. In response, Shuster said concerns that Congress would have less influence over an independent entity is “not an adequate argument.” He also assured that the federal government would maintain control of the national airspace system—not the ATC Corporation—if a crisis were to occur. “That is not going to happen. The president will assume control of the airspace,” he said. “The American people still own the airspace. I don’t think those (concerns) are something that we can’t overcome.”

South Korea’s Ministry of Transport has warned the country's six budget carriers to adhere to safety regulations or face possible action. The warning followed a safety review of the airlines after two recent incidents involving separate carriers. In the first, a Jin Air 737-800 en route from Cebu in the Philippines to Busan, South Korea, turned back after 40 minutes due to an air leak in one of its doors. The airline operates as a wholly owned subsidiary of Korean Air.

In the other, a Jeju Air 737-800 flying from Seoul to Jeju plunged 10,000 feet due to a malfunctioning cabin control pressurization device. The aircraft landed safely at Jeju International Airport.

According to Jim Hae, a Ministry of Transport official in Seoul, budget carriers should invest more in safety given the rapid growth in traffic over the past 10 years.

The airlines in question accounted for a 59 percent share of the crowded domestic market in 2015.

Hae said the ministry will revoke the operating certificates of any airline that fails to ensure safety.

The Ministry of Transport decided to suspend ground crew and the pilots involved in the incidents for 30 days after investigations revealed that they appeared to have ignored basic safety procedures. The two airlines also face suspension of their operations for a week or a fine equal to $496,000.

The other budget carriers that received the warning are Eastar Jet, T'way Airlines and Asiana-owned Air Busan and Air Seoul. Asked whether the warnings suggest lax safety practices at those four airlines, Hae characterized the two incidents as “isolated.”

India plans to release a new aviation policy next month and put it into effect on April 1, Ministry of Civil Aviation secretary R.N. Choubey confirmed to AIN during a civil aviation seminar in Delhi on February 2. The policy that has remained a draft for almost two decades comes at an opportune time, as Indian aviation posts record growth rates and low oil prices lead to competitive fares. Once a policy exists, investors can look seriously at investing in infrastructure-related projects.

The policy focuses on development of regional connectivity and waiving of taxes that make maintenance, repair and overhaul (MRO) more expensive to perform in India than abroad. Of the $700 million MRO business, only $70 million gets carried out in India, said H.R. Jagannath, CEO, Air India Engineering Services. “Discussions with the Ministry of Finance on waiving of taxes related to MRO have been encouraging,” said minister of civil aviation Pusapati Ashok Gajapathi Raju.

The policy will pursue development of around 350 unused airstrips to promote access to remote areas for regional connectivity. “India has a 350 million [strong] middle class of which only 70 million have traveled by air,” said Choubey. We plan to develop no-frills airports so that airlines can offer $40 fares for one-hour flights. [However], the central and state governments will have to take a haircut and will incentivize airlines to fly to smaller and remote airports.” Possible actions include waivers of landing and parking charges and taxes on tickets “to make flying affordable,” he added. “This is the single most important feature of the policy.”

A major issue that remains unresolved centers on whether or not to waive the so-called 5/20 rule, which prohibits domestic startups SIA-Tata Group owned Vistara and AirAsia India to launch international service until they complete five years of operations with 20 aircraft. While discussions on the draft policy opened to the industry have concluded, the Federation of Indian Airlines (FIA), whose membership includes Jet Airways, IndiGo, SpiceJet and GoAir, has appealed to the prime minister to review India’s norms on ownership and effective control of an Indian airline by foreign carriers. The law now allows foreign carriers to own up to 49 percent of Indian airlines. However, many express concern about the lack of effective enforcement. “Airlines such as AirAsia India and Vistara are clearly controlled by their foreign parent, blatantly flouting the principal of effective control,” said Ajay Singh, chairman and managing director of SpiceJet.

“Rules in India are ambiguous,” said another airline official. “They need to be elucidated as in the U.S. Given that all Indian carriers have had to wait for five years before being permitted to fly abroad, the two startups clearly get a competitive edge over us and remain feeder airlines to their parent. The 5/20 should be phased out, but slowly.”

“This will also ensure [new] airlines that seek to utilize the present carriers’ share of bilateral rights to fly abroad must first serve the country,” concluded Singh.

A new United Nations standard for aircraft carbon dioxide emissions recommended yesterday by 170 experts on the International Civil Aviation Organization’s Committee on Aviation  Environmental Protection (CAEP) met with the endorsement of manufacturers, regulators and lobbying groups alike, including Airbus, Boeing, Airports Council International and the U.S. Federal Aviation Administration.

Under the CAEP recommendations, the new emissions standard would apply to new aircraft type designs as of 2020, as well as new deliveries of current in-production aircraft models from 2023. The recommendations also included a cut-off date of 2028 for production of aircraft that do not comply with the standard.

According to ICAO, the most stringent aspects of the standard apply to “larger” aircraft, although it noted that it took “great care” to ensure that the proposal covers a full range of sizes and aircraft types while taking into account technological feasibility, emissions reduction potential and cost considerations. “Operations of aircraft weighing over 60 [metric tons] account for more than 90 percent of international aviation emissions,” said ICAO in a statement. “They also have access to the broadest range of emissions reduction technologies, which the standard recognizes.”

Nevertheless, both of the world’s manufacturers of large commercial airplanes commended the ICAO committee for its work.  

“Boeing is fully committed to meeting the new CO₂ emissions standard announced by ICAO,” said the U.S. manufacturer in a statement issued Tuesday. “This agreement represents real progress beyond the substantial industry achievements already made to reduce aviation emissions, with more steps ahead.”

In its own statement, Airbus said it welcomed the new CO₂ emissions standard, as did global airport trade association Airports Council International (ACI). “Today's agreement represents an important next step in aviation’s commitment to tackle climate change, and ICAO is to be commended for agreeing on the CO₂ standard,” said Angela Gittens, director general of ACI World. “The industry is moving forward collectively with ambitious goals—and more importantly making measureable progress—to cap net CO₂ emissions from 2020 and reduce net CO₂ emissions from aviation to half of 2005 levels by 2050.”

The ICAO standard follows series of industry initiatives aimed at reducing aviation’s effect on the climate. For its part, ACI in 2009 launched what it calls the Airport Carbon Accreditation program, which helps airports become certified across four levels, namely mapping, reduction, optimization and neutrality. As of early January, 151 airports representing 31.2 percent of global air passenger traffic had gained their certification, said ACI.

The FAA, meanwhile, cited its own Continuous Lower Energy Emissions and Noise (CLEEN) Program, through which the administration works with industry on accelerating the maturation of new aircraft and engine technologies to reduce fuel burn. It also pointed to its broader modernization efforts, including the installation of more than 7,000 GPS-based NextGen procedures, the majority of which it says result in more efficient routing, thereby reducing fuel consumption and emissions.

“I am pleased that ICAO reached an international consensus on a meaningful standard to foster reduction in CO₂ emissions from aircraft,” added FAA Administrator Michael Huerta. “We are encouraged by this success and believe it puts us on a promising path to secure a robust market-based measure later this year.”