The first Airbus A321neo equipped with CFM International Leap-1A engines completed its maiden flight on Tuesday from Hamburg, Germany. During the five hour, 29 minute flight experimental test pilots Martin Scheuermann and Bernardo Saez Benito Hernandez and test-flight engineer Gérard Leskerpit performed tests on engine speed variation, systems behavior and flight envelope evaluation. Airbus expects to deliver the first production A321neo with alternative Pratt & Whitney PW1100Gs at the end of the year.

Originally planning to fly the first A321neo with its PW1100G geared turbofans, Airbus switched the flight test sequence as Pratt continues work on a cooling problem that forced it to impose certain operating restrictions on the smaller A320neo related to restart. Airbus originally expected to deliver the first production A320neo to Qatar Airways, but the Persian Gulf carrier deferred delivery until Pratt & Whitney resolved the cooling problem. The first A320neo now flies for Lufthansa Airlines.

In a statement immediately following first flight, CFM International took the opportunity to highlight what its characterizes as a flawless test program for the Leap-1A, which received joint EASA-FAA certification last November.

“We could not be happier with the Leap engine and are proud of the many ‘firsts’ such as today’s flight it has powered throughout the A320neo flight-test program,” said CFM chief executive Jean-Paul Ebanga. “We have confirmed that the engine is meeting its performance specifications, and the reliability and durability it has exhibited throughout testing is a glowing testament to the professionalism and expertise of the team that is bringing this product to market.”

Airbus expects the first CFM-powered A321neo to enter service in early 2017.

Mitsubishi Aircraft (MITAC) has modified the first MRJ90 regional airliner since its initial three flights last November and has resumed flight tests, the company announced Wednesday. The company performed taxiing tests with the updated aircraft—Japan’s first domestically developed passenger airliner since the NAMCYS-11 regional turboprop more than 50 years ago— early this month following functional tests performed in January.

Meanwhile, MITAC has postponed the MRJ90’s entry into service for a further year—to the second quarter of 2018—even as launch customer All Nippon Airways (ANA) has conducted its first acceptance inspection of the initial delivery aircraft. The setback marks the program’s fourth major delay.

After flying the first flight-test aircraft (FTA-1) three times in November before withdrawing the machine from operation to incorporate planned structural and systems changes, MITAC confirmed the design’s “basic characteristics and functionality.” Analysis of the flights, including operation of landing gear and flaps (but not reverse thrust), verified performance according to specifications and complemented feedback from ground and taxiing tests.

In late January, Mitsubishi revealed details of planned airframe strengthening modifications after it analyzed static test results last year that indicated a weakness in the airframe and wing attachment. “Some components that join the wing and the fuselage, as well as those of the fuselage frame, would have insufficient strength” during ultimate load tests, according to the manufacturer.

As a result, it has introduced additional “plates” to reinforce original parts, a move Mitsubishi had deemed unnecessary ahead of first flight but for which the Japanese Civil Aviation Board issued a special permit in October. “But we decided to implement the upgrades during this round of feedback upgrades,” said MITAC.

Type certification requires the airframe to withstand a load 50 percent greater than the limit load, or the highest load expected during operation. Other changes consist of software upgrades to avionics, and engine- and flight-control systems. Mitsubishi plans also to apply the modifications to the second MRJ (FTA-2).

Functional testing of third aircraft—FTA-3—began in January, as MITAC installed final systems parts and cabin interiors on FTA-4 and FTA-5, both of which had entered final assembly. Schedules call for all four remaining flight-test MRJ90s to fly this year, as trials continue on two further airframes constructed for static and fatigue strength tests. Mitsubishi has completed assembly of major structures for the latter test specimen, which by late January stood on its own landing gear while mechanics installed measuring instruments.

In revising the MRJ initial delivery schedule, MITAC and parent Mitsubishi Heavy Industries (MHI) have extended the time available for flight trials in both Japan and the U.S., and testing now might continue into early 2018. The two years previously allotted by the two companies for flight testing, certification, and entry into service has now grown to at least 30 months.

Allotted time for related ground testing also increased by about 50 percent. Looking ahead, Mitsubishi said its plans called for “increasing the precision” of its scheduling and starting U.S. flight testing “as soon as feasible to propel development.”

Initial MRJ flights came after ground and engineering tests and final aircraft inspection in September and followed MITAC analysis of results from 13 formal taxiing trials conducted over five weeks from October 3. Taxiing had begun slowly in June, at the same time as ground vibration tests with second MRJ90, FTA-2, according to MITAC senior executive vice president and executive chief engineer Nobuo Kishi. Test feedback modification and technical data checks followed in July and August.

The October taxiing trials saw MITAC test emergency stop and rejected takeoff braking, nosewheel steering, and expansion of the speed range up to 120 knots. The MRJ’s three flights, at Tokyo's Nagoya Airport between November 11 and 27, covered takeoff and landing performance, ascent to 15,000 feet and descent, cruise up to 200 knots and turns, as well as landing-gear and 0- to 30-degree flap operations.

Confirming the latest delivery-schedule revision in late December, MHI and MITAC acknowledged that the review reflected additions to and revisions of original test items, as well as Mitsubishi’s joint engineering work with U.S. partners aimed at ensuring a better-integrated aircraft. The resulting new MRJ development structure intends to ensure “prompt execution” of all activities and a clear division of roles and responsibilities assigned among three engineering bases in the two countries.

Tokyo-based MITAC will look after type certification documentation and coordination with airworthiness authorities, flight tests, manufacturing preparation (including design and production) and customer support. In the U.S., the Seattle Engineering Center, an engineering arm of subsidiary MITAC America opened last August, has assumed responsibility of design development and innovating technological “solutions.”

This fourth MRJ delay, which followed discussions with U.S. partner Aerospace Testing Engineering & Certification (AeroTEC), will permit much more time for testing, both on the ground and in the air; AeroTEC's Moses Lake Test Center at Grant County International Airport in Washington state serves as the site for U.S. flight tests and support, including data analysis and report writing. AeroTEC provides data analysis, FAA certification and flight-testing services to manufacturers like Honeywell and Lockheed Martin and aircraft modification companies such as Aviation Partners Boeing and Raisbeck Engineering.

Discussions with AeroTEC stimulated caution last year as the manufacturer approached the MRJ’s flight readiness, resulting in more time devoted to checking each step. A thorough review identified a number of different items that Mitsubishi added to pre-flight test work.

MITAC officials acknowledge the value of a more pragmatic approach, even though further delay has almost certainly compromised the project’s credibility. For example, Kishi has described plans to deliver the first MRJ before July 2017 as “naïve and based on incomplete knowledge.”

MHI executive vice president and MITAC president Hiromichi Morimoto acknowledged as much upon the revelation of the latest delay at the end of last year. “We're still feeling our way along, and often lack the ability to take decisive action,” he said. “We have frequently not been able to make quick decisions when the time has come to do so.”

Kishi has also acknowledged the need for further work on the aircraft and in reaching agreement with suppliers. He said the MRJ’s landing gear and wheels require a redesign  “for better safety,” while he talks with engine manufacturer Pratt & Whitney about a revised schedule for supply of the aircraft’s PW1200G geared-turbofan powerplants.

In December, MITAC and Boeing unveiled their joint development of the My MRJ Fleet.com (MMF) customer-support service web portal. Construction also has started at MHI’s Kobe Shipyard & Machinery Works for a new factory to build MRJ wings. Workers will manufacturer main wing skins/spars and the center wing under an integrated system in the new 5,600-square-meter factory and an adjacent 25,400 square meter plant.

ANA’s mid-January acceptance inspection and approval covered the first-delivery MRJ’s “wing framework assembly” at MHI’s Nagoya Aerospace Systems plant at Tobishima. Plans call for such on-site customer inspections to happen at several points within MITAC's manufacturing process, and include the structural state of fuselage, tail assembly, wing, and other components, as well as component integration and system parts installation. Final ground and in-flight inspections will precede delivery, according to MITAC.

Chinese investors recently signed a “framework agreement” with Russia’s ministry for development of eastern regions (MinVostokRazvitia) to establish a new assembly line in the Russian city of Komsomolsk-upon-Amur for Xian Aircraft’s MA-60 turboprop. Timed to coincide with Russian president Vladimir Putin’s visit to Beijing last September, the deal involves a partnership between Xian Aircraft and the Jiangsu Baoli International Investment company to help fund the production of 50 aircraft a year.  

“This aircraft is oriented for export into 16 countries, including Russia,” said Alexander Galushka, Russia’s minister for eastern development. Plans call for building a production line in the TOR Komsomolsk industrial zone. 

The Chinese investors–represented in Beijing by Xian chairman Fang Yunfeng and Jiangsu Baoli president Zhou Dehong–expect to spend $100 million on the project. 

According to Zhou, the project calls for two phases of development, the first involving final assembly followed by gradual localization of
parts production.  

The MA-60 “Modern Ark” is a regional turboprop based on the 48-seat Antonov An-24, whose more-than-1,000-unit production run ended in 1979. Since 2000, Xian has assembled about 80 Modern Arks, including a handful of 60-seat MA-600s powered by U.S.-made Pratt & Whitney PW127J turboprop engines and featuring Rockwell Collins Pro Line 21 avionics, also from the U.S. 

The Chinese investors believe ailing Russian airlines could afford to replace their outdated An-24/26s with MA-60s. “The decrease in the value of the ruble to other currencies has led to notable changes in the economic conditions in Russia, making them more favorable to foreign investors,” Galushka said. 

Officials see the MA-60 as an alternative to the now stalled Rostec-Bombardier plan to build Q400s turboprops in Russia, following the imposition of Canadian sanctions due to Russia’s annexation of Crimea and alleged military support of Ukrainian separatists. 

Russian aerospace conglomerate UAC has also urged the Kremlin to provide funds for the 64-seat Ilyushin Il-114-300, but the government now finds itself short of cash as a result of the economic slump in Russia. Meanwhile, the inability of the Russian aerospace industry to produce competitive turboprops in sufficient numbers has encouraged Chinese manufacturers to develop competing products aimed at a market expected to generate demand for 400 units. 

MA-700 Designed for Russia

At last year’s MAKS’2015 airshow in Moscow, the 19-seat Xian Y-12F, powered by P&WCPT6A-65B engines, flew daily, and its manufacturer appointed FlyAvia to be the official dealer in Russia and the CIS. 

China’s AVIC also displayed a mockup of the new MA-700, a 78- to 86-seat turboprop described as a “100 percent a new development.” 

In fact, the next step in the unfolding Chinese campaign to capture the Russian market for regional turboprops involves the MA-700. AVIC offers eight cabin layout options, the most condensed of which offers seating of 86 with a 28-inch pitch. A 78-seat version offers a 32-inch pitch, while the standard factory layout shows four business and 68 economy-class seats. The cabin has all-LED lighting and offers a ceiling height of 1.97 meters (6.5 feet) and maximum width of 2.618 meters (8.64 feet). A four-abreast arrangement in the fuselage cross section allows for 17.3-inch-wide seats. 

Noise level peaks at 83dB(A) and sound interference level (SIL) inside the cabin measures less than 65dB. AVIC calls the 100-foot-long MA-700 the next step in the evolution of Chinese turboprop designs, with a “focus on the 800 kilometer [432 nautical mile] short- and medium-range air transportation market.” Gross weight totals 27.7 metric tons (61,068 pounds) and maximum payload is 8.6 metric tons (18,960 pounds), while “standard range” extends to 1,700 kilometers (917 nautical miles). Takeoff and landing runs are less than 1,310 meters (4,323 feet) and service ceiling is 7,620 meters (25,000 feet). 

A high-wing turboprop with a T-tail empennage and retractable tricycle landing gear, the MA-700 features integrated modular avionics (IMA) and a fly-by-wire flight control system. The cockpit mockup shows four MFDs with large color LCDs, an electronic flight bag on the left- and right sides and yoke-style flight controls. Designers achieved a high lift-to-drag ratio with the airplane’s high-aspect-ratio, 92-foot-span wings, complete with upward-curved wingtips. 

The MA-700 is powered by two Pratt & Whitney PW150C“next generation engines with newly designed propellers.” The combination of advanced aerodynamics and modern engines should result in an 8- to-10-percent fuel burn reduction compared with in-service Western designs, according to AVIC. 

Fuel burn with 78 passengers totals 21.6 grams per seat-kilometer on a typical 600-kilometer (324 nautical mile) trip and 20.0 grams per seat-kilometer for a 1,200-kilometer (648 nautical mile) mission. In the latter case fuel burn totals 1,870 kilograms (4,122 pounds). 

The IMA, along with other technical innovations, promises to decrease maintenance costs by 15 percent, according to AVIC. The company has set a target of dispatch reliability at 99.5 percent and turnaround time at “below 20 minutes.” Intervals for A and C checks stand at 600 and 4,800 flight hours. 

Other design targets include maximum cruise speed (at 6,000 meters or 19,800 feet) of 630 kilometers per hour (340 knots), economy cruise speed of 550- to 580 kilometers per hour (297 to 313 knots) and single-engine ceiling of 5,690 meters (18,777 feet).

The design calls for short-runway capability even at field elevations of 4,000 meters (13,200 feet) above sea level. Ambient operating temperatures range from -55 to +55 degrees Celsius. Commercial airlines operate in temperatures as cold as -55 degrees C only in Russia’s Yakutia region, leading to the conclusion that MA-700 designers had the Russian market firmly in mind when designing their airplane.

Singapore Airlines (SIA) is continuing to add subsidiaries, joint ventures and partnerships to its portfolio to meet the challenge of stiffening international competition on the Kangaroo route and in Southeast Asia from Gulf-based and other regional airlines.

The transition has taken SIA from being focused solely on the full-service market in recent years into the low-cost segment. The group now operates 186 aircraft and as of July flew to 280 destinations in 70 countries, almost twice the size of Emirates’ network.           

“We are making significant investments in a wide range of strategic initiatives to address these challenges and better position the SIA Group for the future,” CEO Goh Choon Phong said earlier this year in the company’s latest Sustainability Report. “Many of these new initiatives have been implemented over the past year.”

SIA is frank about the challenges faced, which not only include the Gulf threat, but also other global trunk-route players, the low-cost battle, which is as acute in Southeast Asia as anywhere, and the Singapore market’s maturity, which has slowed growth. It is investing heavily, and establishing hubs away from its base.

Tigerair has seen strong load factors of greater than 80 percent in all but one of the past five years, but has suffered operating losses in three out of the past four financial years. On November 6, SIA announced the latest step in its strategy, the intention to take full control of the low-cost carrier, in which it already has a 55.8 percent stake, to stem losses.

This would add to existing wholly owned subsidiaries Singapore Airlines Cargo, the full-service SilkAir, low-cost Scoot and SIA Engineering.

“These are the main operating companies in the group. We have many other investments, but these are the core areas we are operating in. Most of the contribution from the group still comes from SIA and SilkAir in terms of the percentage of passenger revenue,” Nicholas Ionides, divisional v-p, public affairs for Singapore Airlines told AIN during an interview here in Singapore late last year.

“But the others are growing, and the reason we have investments in them is because they are emerging segments of the travel market and we feel we should have a role in it to complement the rest of what we have.”

SIA also has a 49 percent stake in Indian airline Vistara, which launched services in January 2015. It seeks to tap into India’s domestic market, as well as west-bound traffic flows when international flights become available. “It is a joint venture between us and Tata, the biggest conglomerate in India. It has eight aircraft now,” he said.

“Because India has a law that says that Indian airlines must operate for five years and have at least 20 aircraft before they can fly internationally, we are appealing to the Indian government to remove those restrictions, because we think that it holds back development of the Indian market.”

As a long-haul low-cost operating widebodies, Scoot is almost unique. It started three years ago with Boeing 777s, but is transitioning to a Boeing 787 fleet. It seeks to tap into China and Australia. SilkAir is a regional airline that provides feeders into the SIA network.

Singapore-based Tigerair is an LCC in the more traditional context, with a single narrowbody aircraft type, the Airbus A320. SIA’s investment in Thailand is through low-cost NokScoot, which is 49 percent owned by Scoot and 51 percent by Thai interests.

SIA’s partnership with Virgin Australia, a 22.8 percent stake, began in 2011. The partnership is designed to ensure the group remains a strong Kangaroo route competitor.

“On our own we fly to seven points in Australia. With Virgin Australia, we can fly to another 40 through codesharing. Passengers are connecting as well to the hubs that we serve in Australia, and then through the Singapore hub.”

He said that in addition to Virgin Australia, Air New Zealand customers were flying on SIA to the Singapore hub and travelling on to many other parts of the world.

“We have five flights a day from Sydney to Singapore. We have four flights a day from Singapore to London. The combinations can be very strong. Minimum connection time is less than an hour,” he said.

“It’s very important that we remain efficient in Singapore, that the connections are very good, in order to give people a choice. When we are expanding our network, it’s not solely about new routes, although routes are important as a part of hub development. But it’s also about increasing frequency and ensuring that timings are very good.”

He said the group’s strategic initiatives were focused on addressing competition of various forms. “The reality is that we’ve had competition on every route that we’ve operated on since day one. Competition is not new. The Middle East carriers are certainly strong competitors, but they are not the only competitors we are looking at,” he said.

 “If you look at the Australia-Europe market, we’ve been a major player in that for all time. We remain a very strong competitor. You also have airlines in Hong Kong, China, Thailand, Kuala Lumpur and other parts of Asia which are also tapping into the Kangaroo route traffic.”

SIA has nine flights a day from Jakarta to Singapore, the most in its network in terms of single-destination frequency. Not all of those flights are sustained solely by point-to-point traffic: many people only fly the first leg because of the availability of a second. The group also flies to 13 points in India and 24 points in China.

“We have partnerships with Air New Zealand, Scandinavian, and we announced a joint-venture agreement with Lufthansa [in early November], to share revenue on flights between Singapore and points in Europe. Partnerships are very important for us. You don’t need equity necessarily in order to have a partnership.”

The SIA Group’s order book is almost as large as its existing fleet. “Our policy of maintaining a young and modern fleet means we are very often in the market for new aircraft. As a group, we have something like 160 aircraft on firm order right now. That includes SIA, SilkAir and Scoot. The subsidiaries are growing quite effectively,” he said.

Ionides put total Singapore Airlines fleet size at 107, with an average age of seven years, three months. “The figure is generally around 105. It’s not a static number.”

As of November 30, Singapore CAA data showed that SIA had 19 A380s, 59 Boeing 777s (27 of them -300 ER variants), as well as 31 Airbus A330s. SilkAir’s transition from the A320-type (15 aircraft) continues, with fourteen 737-800s now in the fleet. In addition to two 777-200s, Scoot operates three 787-8s and six 787-9s. SIA’s cargo arm runs eleven 747-400Fs.

SIA hopes to take delivery of its first A350 in February. It has 67 A350-900s on order (and it had seven A350-900 ULRs on order but these have since been cancelled). It also has a further batch of A380s expected in 2017.

“[SIA] had an order for twenty 787s, split 10-10. We transferred that order to Scoot. They have been ramping up their 787 fleet. SilkAir has orders for 50-plus 737s. They are transitioning from an A320 to a 737 fleet and are about halfway through that process.

“We have a portfolio strategy which gives us an interest in both the full-service and budget elements of the market. We have short-haul and medium long-haul. Tiger and Scoot provide [synergies] to each other at the budget end, and SIA and Silk Air [allow] feed-through to each other at the premium end,” he said.

“It works for us because we are differentiated: very premium at one end and budgeted at the other. We limit cannibalization. It’s not something that works for everybody, but it works for us.”

Changi Airport Group (CAG) is to expand Singapore’s International Airport to a capacity of 135 million passengers per year by around 2025, cementing the island state’s status as one of Asia’s leading hubs. Plans for the expansion through construction of the new Terminal 5 (T5), to be built on an unused 1,080-hectare site at Changi East, were announced by Transport Minister Liu Tuck Yew in 2013.

Much of the existing and new site is reclaimed land – Singapore has a policy of preparing land in advance to prevent infrastructure bottlenecks from hampering development. “Terminal 5 will increase Changi Airport’s total capacity to 135 million passengers per annum,” CAG said in a statement. “Set to be one of the largest terminals in the world, Terminal 5 will be capable of handling 50 million passengers per annum in its initial phase. It is scheduled for completion in the mid-2020s. There will be land for subsequent expansion,” it said.

Terminal 5 will be connected to Terminals 1, 2 and 3 to allow the expanded airport to be operated as a single, integrated facility for ease of transfer between different terminals, passenger convenience and airfield operational efficiency, the Transport Ministry said. “Terminal 5 will be built in two phases, with the pace of construction dependent on air traffic growth,” it said.

The airport will see the introduction of a third runway, situated to the southeast of the airport, and currently used by the military, which will be lengthened from 2.75 km to 4 km (from 9,000 to 13,000 ft). “Changi Airport’s three-runway system will be ready by around 2020,” CAG said.

Current Changi capacity is 66 million, which will increase to 82 million in 2017 with the addition of Terminal 4 (T4), now under construction. “Construction for T4, our next terminal–to be completed in 2017–is progressing well and will enter into the operational testing stage sometime in 2016,” said Lee Ching Wern, CAG senior manager corporate communications.

Between January and October 2015, Changi Airport recorded 45.52 million passenger movements, 2.1 percent more than the year-earlier period. Cargo shipments were steady at 1.53 million metric tons while aircraft movements grew 1.2 percent to 286,980 for the same period. Changi was the 16th busiest airport in the world in 2014, with 54.09 million passengers, according to the Airports Council International.

As at November 1, 2015, more than 100 airlines were operating at the airport, connecting Singapore to some 320 cities in about 80 countries and territories worldwide. Changi sees more than 6,700 scheduled flights a week. Ground handling and flight catering are handled by SATS, with around 80 percent of the business, and Dnata.

A mixed-use area, Jewel Changi Airport, a joint venture between CAG (51 percent) and CapitaLand (49 percent), is expected to open in 2018 adjacent to Terminal 1. The development, with retail space, a hotel and facilities for airport operations, will have a total gross floor area of about 134,000 square meters, and 10 floors, with five levels below ground for parking.

While much of Singapore’s MRO business is associated with the growing business aviation airport at Seletar, Changi’s MRO cluster is home to more than 100 companies, capturing upwards of 20 percent of the Asia Pacific market.

Singapore Airlines’ MRO arm, SIA Engineering Co. (SIAEC), is the dominant player at Changi. Together with its 26 joint ventures and subsidiaries in nine countries, the SIAEC Group provides MRO services to the aircraft of more than 80 international airlines.

Group financial data showed 61 percent of revenue in repair and overhaul in the last full year, with 39 percent in line maintenance. In June, SIAEC renewed its maintenance contract with SilkAir for a further five years for its A319 and A320 fleet, a deal valued at US$139 million.

A major MRO facility, to be known as Changi East Industrial Zone, will be built to the northeast of the future T5. “To support the long-term growth of the logistics and aerospace industries, land will also be set aside to the north of T5 for air freight and air express operators as well as MRO activities,” CAG said.

Singapore’s previous civilian airport, at Paya Lebar, which replaced the original Kallang Airport in the city center, was converted to an airbase in 1981.

In comparison to the wider Asian region, airline liberalization, both domestically and internationally, has come relatively slowly to Japan, especially in adopting the low-cost carrier (LCC) model. It wasn’t until 2012 that the government truly began breaking down barriers, paving the way for greater market freedom.

Since then, four new LCCs have cropped up in the hotly contested Japanese airline sector. A fifth, AirAsia Japan, is slated to re-commence operations in March-April from Nagoya Chubu International Airport.

AirAsia Japan is the second attempt for the AirAsia Group to gain a foothold in the Japanese market. In 2013, a first joint venture (JV) with All Nippon Airways collapsed due to management differences. AirAsia sold its stakes to ANA Holdings–parent of All Nippon Airways–which used the remains of the partnership to launch its own LCC: Vanilla Air.

AirAsia Japan’s current owners include the AirAsia Group, which holds a 49 percent stake with four local investors holding the balance. The airline has an initial capital investment of about $69 million and will start with a fleet of two Airbus A320-200s. By year-end, AirAsia Japan plans to operate a fleet of six A320s, adding five aircraft each additional year through 2018 when it expects to operate a total of 16 twinjets.

AirAsia Japan’s initial destinations include Sapporo and Fukuoka in Japan and Seoul in Korea, with plans to add Sendai and Taipei later. By 2018, the airline hopes to move into Nagoya’s purpose-built low-cost carrier terminal (LCCT), which is slated to be open in two- to- three years. The LCCT will cost up to $165 million and is expected to accommodate 3-to-5 million passengers per year.

Initially, AirAsia Japan will be the only locally based budget carrier at Nagoya, although Jetstar Japan operates a mini hub there. Rather, Tokyo’s Narita International Airport has become a major base for Japan’s four LCCs–Spring Airlines Japan, Jetstar Japan, Vanilla Air and Peach Aviation. Last April, Narita became the third Japanese airport to open an LCCT, after Osaka Kansai and Okinawa Naha. Of the four Japanese LCCs at Narita, Peach is the only airline that has opted against moving to the new terminal.

Unlike other Japanese LCCs, both AirAsia Japan and Spring Airlines Japan defy the status quo by not being affiliated with ANA or Japan Airlines (JAL). Spring Japan is also uniquely positioned as being the first Japanese subsidiary for a Chinese carrier. The LCC is 33 percent owned by Shanghai-based Spring Airlines, with the remainder held by various Japanese investors.

Since its launch in 2014, Spring Airlines Japan has been restricted to flying domestically with an under-utilized fleet, leading to an accumulation of losses. Spring is hoping to turn this around after recently securing approval to fly internationally. Starting this month (February), the airline will launch flights from Narita to the Chinese cities of Wuhan and Chongqing, effectively becoming the first Japanese LCC to enter the Chinese market.

            Peach and Vanilla

Meanwhile, Japan’s Vanilla Air is one of 10 airlines actively being courted by the Filipino government in a bid to attract more visitors to the island nation.  ANA Holdings CEO Shinya Katanozak has hinted at the possibility of Vanilla adding more destinations in 2016, but as yet there has not been any definite announcement.

Overall, Vanilla has been rather conservative when it comes to expansion. The LCC has two international markets–Hong Kong and Taipei, Taiwan–and operates service on four domestic routes. Over the next two years, Vanilla plans to double its fleet, from its existing eight A320s to more than 16 of the single-aisle airliners, while also looking at the possibility of acquiring widebody aircraft for future long-haul destinations.

In contrast, Jetstar Japan has expanded aggressively since launching in 2012. While it has the largest domestic network among its peers, such tactics have come at a cost. Last August, the loss-making carrier received a cash injection of $57.8 million from major shareholders JAL and Australia’s Qantas Airways group. Qantas expects Jetstar Japan to be profitable in the 2016-17 financial year.

Out of the four LCCs, Peach is the only one known to be profitable and the largest Japanese LCC with international seat capacity. According to OAG, Peach also surpasses both ANA and JAL in seat capacity from its main international hub at Kansai. Peach has a second base at Okinawa, a third at Narita and it is vying to make Sendai Airport its fourth hub by 2017.

Over the last year, Peach has concentrated on expanding its international market by launching new routes and adding more flights. This trend is set to continue this year with new service from Haneda to Seoul beginning February 6. The growing LCC will also expand service between Okinawa to Seoul, and Naha to Taipei.

Peach operates a fleet of 17 aircraft in the Airbus A320 family and the carrier plans to have a fleet of 20 A320s by April 2017.

A new Indonesian Ministry of Transportation (MOT) rule banning the import of any commercial passenger aircraft more than 10 years old and freighters more than 15 years old amounts to merely a cosmetic exercise, according to a senior aviation technical executive, while a ban on any aircraft more than 30 years old appeared likely to cause serious financial hardship for operators of some commercial, general aviation and regional aircraft.

Ignasius Jonan, Indonesia’s Minister of Transportation, signed the new rule into law on October 16, two weeks after a 34-year-old de Havilland Canada Twin Otter 300 operated by Aviastar Mandiri crashed into Mount Latimojong during a scheduled passenger flight from Masamba to Makassar on the island of Sulawesi, killing all 10 people aboard.

However according to Phil Seymour, CEO of UK-based aviation technical services and data company IBA Group, the rule’s enactment would likely not improve Indonesia’s poor commercial-aviation safety record.

“Age restrictions are a fudge, because it’s easy for authorities to impose restrictions,” said Seymour. “I get very concerned with what these restrictions are trying to do. If they’re meant to improve the safety record, it becomes almost irrelevant. [The Indonesian authorities] have much bigger problems they must face up to.”

Some of those problems include the nation’s inadequate aviation-safety oversight, a high rate of commercial-aviation accidents and incidents and low pilot-training and pilot decision-making standards, according to Seymour.

The FAA’s International Aviation Safety Assessment program currently rates Indonesia as a Category 2 nation. That means Indonesia’s aviation-safety oversight–handled by the Ministry of Transport–does not comply with ICAO safety standards. The rating disallows Indonesian carriers from launching any new services to the U.S.

Additionally, the EU has banned almost all Indonesian carriers from operating in its airspace because of their poor safety records. The ban includes Lion Air, which operates a large fleet of young Boeing 737-900ERs and has hundreds of new 737s and Airbus A320s on order.

Indonesia’s new aging-aircraft rule also bans any Indonesian carrier from operating any commercial aircraft older than 30 years of age. Carriers operating aircraft aged 30 or older at the rule’s promulgation date have 36 months to stop flying them. If any carrier doesn’t do so within that time, the Indonesian government will de-register the aircraft concerned and potentially also will remove the airline’s Air Operator’s Certificate.

Two of Indonesia’s three fatal accidents in 2015 have involved aircraft more than 30 years old: the Aviastar Mandiri Twin Otter and a 54-year-old Lockheed C-130B operated by the Indonesian Air Force, which crashed shortly after taking off from Medan-Soewondo Air Force Base on June 30, killing all 122 aboard the aircraft and 17 on the ground.

Indonesia’s third fatal accident in 2015 also involved an aging aircraft. On August 16, a 27-year-old ATR 42-300 operated by Trigana Air Service crashed on Tanggo Mountain while approaching Oksibil Airport in Papua Province, killing all 54 onboard.

However, Indonesia’s two most recent commercial-aircraft incidents have involved young jets. On December 21, a nine-year-old Embraer 195 operated by KalStar Aviation overran the runway at Kupang El-Tari Airport while landing during a storm. Although none of the 125 people onboard sufferes serious injury, the aircraft sustained substantial damage.

On November 6, a two-year-old 737-900ER operated by Lion Air subsidiary Batik Air ran off the side of the wet runway upon landing at Yogyakarta-Adisutjipto Airport. The aircraft’s nose gear collapsed but all 177 people aboard survived.

Additionally, on December 28, 2014, Indonesia’s worst accident in nearly 18 years involved an aircraft that was just six years, three months old. That airplane–an AirAsia Indonesia A320–crashed into the Java Sea after the pilots lost control at FL320 and stalled the aircraft. The accident killed all 162 people onboard.

Seymour conceded that by restricting the importation of commercial aircraft to those aged 10 years or less (15 or less for freighters), Indonesia has made it more likely all airliners it registers in the future will contain modern navigation equipment and situational awareness aids, such as EGPWS.

However, Seymour argued that even if an aircraft gets fitted with the latest navigation equipment, pilots still need training to use it properly and to make sensible decisions when operating in bad weather. Many Indonesian operators’ safety records indicate they don’t train pilots well.

Seymour said another “probably” relevant issue is that 27 aircraft with 19 seats operate in Indonesia, according to IBA Group’s JetData database. The regulations do not require aircraft with 19 seats or fewer to carry cockpit voice recorders and 21-channel flight data recorders, he said, making it harder for Indonesia’s National Transportation Safety Committee to determine definitively the causes of accidents involving such aircraft.

According to JetData, Indonesia’s new rule immediately affects three commercial jets on the nation’s registry. All are more than 30 years old and all are Boeing 737-300s. Operators will have to soon deregister another nine 737-300s, two 737-400s and five ATR 42s, all of which are at least 27 years old.

Trigana Air Service has eight of the 19 Indonesian-registered large commercial aircraft aged 27 years or older. However, Cardigair, a freighter operator whose fleet consists of three 737-300Fs, stands to feel the most severe effects. One of its airplanes is more than than 30 years old and the other two are 29, according to JetData.

Ironically, Cardigair appears to have spent heavily to give its aging 737-300Fs modern avionics. According to its website, Cardigair installed satLINK (an Iridium satellite-based voice and data communications system), TCAS, EGPWS, digital flight data recorders and windshear detection systems in all three aircraft.

According to JetData, the new rule will immediately affect 24 other commercial aircraft operating in Indonesia because of their advanced age of 30 years or more. They include 18 Twin Otters, two DHC Dash 7s and six Fokker F.27s.

Twin Otter lessor CAAMS Leasing managed to get two aging Twin Otter 300s on to the Indonesian registry for lease to Dimonim Air just before the new rule took effect, but its attempt to register a third (MSN 524) came too late.

However, CAAMS Leasing CEO Everette Mash subsequently purchased a 2012-built Viking Air Twin Otter (MSN 857) as a replacement to lease to Dimonim Air. Schedules call for delivery of the aircraft in February.

Four other young Viking Air Twin Otter 400s already operate in Indonesia, according to JetData. Mash told AIN he saw a demand for the lease of another ten there within 18 months and he planned to try to meet that need.

Airbus’s U.S. Manufacturing Facility in Mobile, Alabama, opened last September, could augur well for increased production in Southeast Asia. A320-family airliners are already assembled in Tianjin, China. The U.S. facility rounds out the manufacturer’s production strategy for its high-selling A320 family of aircraft:“building close to its customers.” Airbus expects all aircraft built on the new line to go to U.S. customers, according to company president and CEO Fabrice Brégier.

Former FAA Administrator Allan McArtor, chairman and CEO of Airbus Group, Inc., Airbus Group’s holding company in the U.S., noted, “It’s part of our global industrial strategy to be located in Europe, China and the United States.” Europe traditionally was and remains a strong Airbus market, while China and the United States will represent the world’s two largest single-country markets throughout the foreseeable future.

Asked by AIN if Airbus now plans any new A320-family assembly facilities in Mexico or Latin America, where several customers have placed large orders for the models, Brégier replied, “No.”

He elaborated: “Despite the growth in the Latin American market, it is much smaller [than the U.S. market].” Airbus plans to deliver all Latin American and Mexican customers’ A320-family jets from its assembly lines at Toulouse and Hamburg.

Barry Eccleston, Airbus Americas president and CEO, confirmed that Airbus has no current plans to develop A320-family assembly lines anywhere else. Other than potentially doubling the capacity of the Mobile line, a step Airbus is already considering, its most logical step to increase single-aisle production even further “would be a new line in Hamburg,” Eccleston said.

Eccleston also ruled out any thought Airbus could decide in the near future to add a widebody completion facility at Mobile, as it plans to do for the A330 at its Tianjin location. “We have not thought of any plans like that–our first step is to prove what we can do here” in assembling A320-family aircraft, said Eccleston. “If anything, development at Mobile will be even more into the single-aisle market.”

McArtor called Mobile “our industrial home” in the U.S., because of the close relationship the manufacturer and the city have built since Airbus announced the Alabama site in 2007 as the production site for its U.S. Air Force tanker deal (later quashed). He cited Mobile’s “great capabilities technically” as a reason for locating the A320-family line there.

Also important to Airbus in choosing Mobile is that the Mobile Aeroplex at Brookley, where the A320-assembly facility is located, is just four miles from the city’s downtown area and a similar distance from the Port of Mobile, a large deep-water seaport. Airbus can transport A320-family major assemblies such as fuselage sections on ships from Hamburg’s vast seaport to Mobile and then truck them in less than an hour from the port to the assembly line.

U.S. Demand Forecast

Airbus foresees a market for “close to 5,000” large single-aisle jets in the United States over the next 20 years, said Brégier. (Airbus’ Global Market Forecast 2015-2034 predicts a market of 4,700 aircraft for North America, but Airbus has no significant new A320-family orders from Canadian carriers.)

Eccleston said the manufacturer is expecting to win a 40 percent share of that market, 1,880 aircraft. This implies selling an average of 94 large single-aisle aircraft a year in the U.S. annually throughout the next two decades.

Airbus is initially planning a maximum production rate of 48 to 50 aircraft a year from the Mobile line, a rate it expects to achieve in late 2017. Since that is only half of the annual rate at which Airbus expects to sell new single-aisle jets to U.S. customers through 2034, there appears no need for the manufacturer to direct any Mobile-built aircraft to customers outside America.

Although Airbus has secured rights to acquire another 116-acre plot of land adjacent to the existing 116-acre area occupied by its Mobile final assembly facility, a move which would allow it to double Mobile production, the rate could increase to a maximum of only 100 aircraft a year. This is virtually the same number of single-aisle aircraft Airbus expects to sell in the U.S. annually, so doubled production at Mobile could still be absorbed entirely by the U.S. market.

Its Mobile assembly line is the most modern and environmentally friendly facility Airbus has yet built: from the outset of operations the plant’s buildings have been awarded LEED Gold or Silver environmental certification. However, at the Mobile Aeroplex, Airbus has kept with company tradition in naming its main assembly hangar ‘Hangar Nine.’ Airbus first gave this name to the main assembly hangar at its Hamburg A320-family line and subsequently also adopted it for the main assembly hangar at Tianjin.

By September, Airbus employed 260 assembly-line staff at Mobile, many of them hired locally and trained in Hamburg and Toulouse for six to nine months. During the learning curve as Airbus ramps up to full production, the company will continue to hire and train employees from the Mobile County area. When it achieves its planned “Rate Four,” Airbus will employ approximately 1,000 people in Mobile. Doubling the annual production rate to 100 aircraft would add many more employees.

Engines Travel By Road

Airbus North America Engineering at Foley, on the other side of Mobile Bay from the Mobile Aeroplex, will handle podding the CFM International LEAP-1A and Pratt & Whitney PW1100G-JM engines for the Mobile-built A320neo-family aircraft, expected to start in 2017. The engines will be trucked from Foley to the assembly facility.

P&W says it will truck PW1100G-JM engines to Foley from its lines at West Palm Beach, Florida, or Middletown, Connecticut, “depending on Airbus’s need.” However, initially, all CFMLEAP-1A engines will be assembled by Snecma at its Villaroche facility in France, according to CFM. So CFM will fly LEAP-1As to Alabama for Mobile-produced aircraft.

Several subcontractors are performing facility and production functions at Mobile. One is AAA Aerospace USA, which will install engines on all airframes once assembled. Another is MAAS Aviation, which will paint assembled aircraft in a high-tech new hangar with its own oil-and-grease-free compressed air system. Additionally, Honeywell built and is operating the Airbus Mobile facility’s powerhouse, which provides all other compressed air the site requires, and all chilled and hot water.

When Myanmar opened to the world back in 2012, the country experienced a rapid expansion in air travel. Thirteen foreign airlines carried roughly 2 million international passengers. By 2014, the international market had jumped to 3.2 million passengers traveling with nine foreign airline groups, bringing the total number of international carriers to 22.

But now the initial boom seems to be tapering off. In the first half of 2015, the country’s three international airports–Yangon, Mandalay and Naypyitaw–handled about 1.7 million international passengers, representing an increase of just 10 percent from the same period in 2014. In October 2015, the latest month with preliminary data, the growth was only 4 percent and Myanmar’s three airports handled 300,365 international passengers.

While very few carriers increased capacity in 2015, two new foreign airlines entered the fray, bringing the total number of international carriers to 24. In October, Vietjet began operating non-stop services between Ho Chi Minh City and Yangon with a frequency of five return flights per week; while Novoair–Bangladesh’s second carrier to enter Myanmar–launched an inaugural flight from Dhaka to Yangon in early December.

Thai Airways formally transferred its Bangkok Suvarnabhumi-to-Mandalay route to its subsidiary Thai Smile. The low-budget carrier launched its inaugural flight from Bangkok to Mandalay in October and launched a second inaugural flight, to Yangon, in December. This month [February 2016], low-cost carrier Hong Kong Express has plans to launch flights to both Yangon and Mandalay, too.

With so many foreign airlines in the mix, Burmese carriers have seen their market share drop. The latest available data reveals that Myanmar-based carriers accounted for only 13 percent of the international market in 2014, compared to 15 percent in 2013 and 19 percent in 2012.

In May 2015, Golden Myanmar actually suspended its A320 services on two highly competitive routes, Yangon-Bangkok and Yangon-Singapore. Air Bagan only operates one international route, Yangon to Chiang Mai with two weekly ATR 72 flights, while Myanmar Airways International (MIA) ambitiously added two new routes in 2015, Taipei and Kunming, for a total of six international routes.  

State Gain

Where Golden Myanmar failed, state-carrier Myanmar National Airlines (MNA) hopes to gain. In June 2015, MNA took delivery of the first of ten 737-800s as part of an extensive rebranding effort. The $960 million deal was the largest commercial sale by a U.S. company to Myanmar in decades and the largest single aircraft order in the country’s history.

In August, MNA made good on its promise and launched services from Yangon to Singapore, effectively ending its 22-year hiatus from international skies. On December 4, MNA added a second route, Yangon-Hong Kong, and it plans to include Chiang Mai by the end of 2015. Several new destinations are planned for 2016, including Taipei in January along with multiple airports in mainland China.

Despite MNA’s optimism, Burmese carriers are relatively unknown outside the domestic market, making international expansion tricky. Moreover, routes such as Yangon-Singapore are already suffering from overcapacity with the Singapore Airline Group accounting for roughly a 62 percent share of total seat capacity.

Myanmar’s domestic market is no better. While MNA is the largest domestic carrier, serving 27 destinations, it faces stiff competition from no fewer than nine other carriers, and has thus seen very little growth on its home turf.

In 2013, total annual domestic passenger traffic numbered 1.9 million, representing a 5.5 percent increase over 2012–whereas in 2014 the market grew by 16 percent to 2.2 million passengers.

Final growth figures for 2015 will likely be modest, too, although in the first half of the year Myanmar’s domestic market handled 1.2 passengers, up 10 percent when compared to the same period in 2014.

“The biggest problem facing Myanmar is that the market is way too fragmented. Ten domestic carriers in a market that size is crazy. If you add them all together they wouldn’t have enough aircraft to make up a small carrier,” said Ian Douglas, former advisor to Air Bagan. “There are airlines with two or three aircraft, and nobody has a fleet big enough to register on the radar anywhere else.”

Recognizing that most domestic routes suffer from overcapacity, start-up FMI Air is positioning itself as a premium brand carrier. The airline currently operates two Bombardier CRJ200 jets to three destinations, Yangon, Naypyitaw and Sittwe. Mark Turner, FMI’s director of customer experience, told AIN that the airline is evaluating adding an additional three destinations in 2016–Thandwe, Heho and Bagan, along with a third aircraft option. By 2017, FMI expects to have a fleet of five aircraft.

FMI has about a 36 percent share of capacity on the Yangon-Nay Pyi Taw route, but faces competition from MNA, Asian Wings, Air KBZ and Apex Airlines, which all operate on the same route.

“In the long term the outlook is interesting, but only if there is consolidation. In the short term it’s very tough,” said Douglas. “If you look at Indonesia, they don’t allow carriers that have fewer than 10 aircraft. Myanmar needs that kind of discipline in the market.”

Compared to the U.S., China could be seen like a late bloomer when it comes to the development of its aviation industry. For the last several years, the country has been playing catch-up, especially since committing to a series of reforms in 2013 to bring greater liberalization to the sector. It was during this time that President Xi Jinping unveiled the “One Belt and One Road” initiative–an ambitious plan to unlock massive trade potential and extend China’s influence with central, west and south Asia as well as Africa and Europe through a series of projects ranging from oil and gas pipelines to roads, air routes and railways.

Since then, new airlines have cropped up, visa requirements have been relaxed, infrastructure has expanded and countries across the world have rolled out the red carpet for Chinese officials, welcoming hefty investments and new bilateral air service agreements.

These efforts are now coming with a tremendous pay-off. According to the Civil Aviation Administration of China (CAAC), the industry turned in a record-high profit of $8.5 billion in the first 11 months of 2015, representing an increase of 76.2 percent from the same period a year before.

In terms of passenger growth, the CAAC announced that traffic had grown by an average of 10.4 percent annually for the past five years, with the industry’s accumulated total profit for the five years reaching $27.3 billion. According to the CAAC, this is more than triple the amount than in the previous five-year period.

Meanwhile, China’s commercial fleet has more than doubled from 1,047 airplanes to 2,645 in the past five years, while the number of airlines has increased from 45 to 54.

Looking ahead to 2016, the CAAC is targeting a 10.7 percent growth in passengers to 485 million. To help achieve this, several start-ups formed in 2015 are expected to start flying this year including Colorful Guizhou Airlines and Yunnan Hongtu Air.

In late December, Colorful Guizhou took delivery of two E190 aircraft from Brazilian jet maker Embraer as part of a larger order inked at the Paris Air Show last June. The deal includes seven firm orders and 10 options for the E190 in a transaction valued at $834 million. The airline’s long-term fleet plans call for 30 aircraft by 2020 and 120 to 140 in the ensuing years.

Chinese start-up Hongtu Air also took delivery of its first aircraft in December, an Airbus A321. The airline has three A320s on order and will compete against five other carriers from its base at Kunming Changshui International Airport.

Overall, the end of 2015 marked an auspicious time for jet makers. On December 17^th, China Southern Airlines, Asia’s largest carrier by passenger volume, signed a $10 billion deal with Boeing to buy 110 aircraft, including thirty 737 Next Generation jets and 50 upgraded 737 Max aircraft. Its subsidiary Xiamen Airlines will receive 30 Max models that were previously logged as unidentified orders.

According to a statement filed on the Hong Kong stock exchange, the airline will take delivery of the current model 737s between 2017 and 2018, and the Max jets from 2017 to 2021. Xiamen will take delivery of its aircraft between 2018 and 2021.

Less than a week later, China Southern signed another deal, this time with Airbus for 10 A330-300s, valued at $2.3 billion at list prices.  According to a company statement, the widebodies are set to be delivered between 2017 and 2019.

December also saw China’s largest low-cost carrier, Spring Airlines, announce plans to buy 60 aircraft from Airbus worth $6.3 billion at list prices. The order includes 45 A320s and 15 A321s, which will be delivered from 2019 to 2030.

Beyond fleet expansions, China’s airlines are looking to add at least 200 international routes this year, with the intention of strengthening air links among countries that fall under the Belt and Road initiative. In line with this strategy is China’s Thirteen Five-Year Plan–a series of economic, political and social development goals for 2016-2020.

While details of the plan won’t be released until March, industry officials have already drawn up a blueprint to accelerate aviation infrastructure development and new medium- and long-haul routes linking core Chinese cities such as Urumqi, Kunming and Guangzhou for the purpose of connecting to the Middle East along with central, east and west Asia. By 2020, China aims to have 260 airports and more than 20 aviation hubs that will serve 91 percent of the national population who fall within a radius of 62 miles of each airport.

Other issues on China’s agenda for 2016 include tackling flight delays, enhancing safety and security measures, addressing environmental concerns and building an open and transparent market for full-service and low-cost carriers. Industry officials are also vying to obtain an airworthiness certificate for China’s first large passenger aircraft, the C919, which made its worldwide debut last November.

Airbus ProSky, the air traffic management subsidiary of the Airbus Group (Stand J23, Chalet CD19), joined with Sichuan Airlines and the Civil Aviation Administration of China (CAAC) to design required navigation performance-authorization required (RNP-AR) procedures at Gannan Xiahe Airport, the parties have announced. The remote airport is located in the Gannan Tibetan Autonomous Prefecture in Gansu Province, northwest China.

Using the new arrival and departure procedures, Sichuan Airlines can improve payload by two tons on one of the airport’s runways and four tons on another runway, Airbus ProSky said. Approach minimums were reduced from 1,810 feet to 600 feet and from 820 feet to 290 feet, respectively. The RNP-AR procedures have also produced track-mile savings of up to 18.6 nm for one of the approaches.

Sichuan Airlines, a regional carrier based in Chengdu in southwest China, first demonstrated the new procedures with an Airbus A319 narrowbody airliner on November 30.

“We are pleased to partner with Airbus ProSky on RNP-AR procedures at Xiahe. The stabilized approach and track-mile savings will not only enhance safety, but also operational efficiency,” said Wang Xinghua, Sichuan Airlines general manager of operational standards.

Rolls-Royce (R-R) has expanded its involvement in the Asia/Pacific aerospace industry with arrangements for producing Trent 1000 engine fan cases in Malaysia. The engine maker  has signed a 25-year agreement covering manufacture, assembly, and supply of the assemblies with UMWM&E, the investment arm of Malaysian conglomerate UMW, and the latter's newly established UMW Aerospace subsidiary.

The deal is part of the UK company’s strategy to create a supply chain closer to customers in developing regions. Three years ago, Rolls-Royce opened a 65,000-sq-m (about 650,000 sq-ft) fan-blade manufacturing, assembly, and testing plant at Singapore's Seletar Aerospace Park, which, in the future, will receive Trent 1000 fan cases from neighboring Malaysia.

The agreement follows R-R's development of Southeast Asia as a supply hub and “demonstrates the positive impact the Seletar facility has on growth in aerospace capability in Malaysia and the rest of the region,” according to UMW. The conglomerate sees its expansion into aerospace as a significant step that will make it Malaysia's first Rolls-Royce Tier 1 supplier.

R-R aerospace president Tony Wood said establishing a competitive global supply chain is part of a transformation of the engine manufacturer's industrial base. “With its commitment to creating a successful aerospace industry, Malaysia was an ideal country in which to look for manufacturing partners.” As well moving R-R nearer to Southeast Asia, the deal will reduce labor costs and complement UK manufacturing capacity as production approaches unprecedented rates, said Wood.

With its first Seletar-assembled example unveiled earlier this year, R-R plans to accelerate Singapore production of the Trent 1000, which competes against the General Electric GEnx-1B to power Boeing 787s, and that of the Trent 900, its offering for the Airbus. The facility, which accommodates a full-size engine testbed, has an annual capacity for 250-to-300 units, which permits the principal UK plant in Derby, UK to concentrate on increasing output of Trent XWBs to more than 300 a year. The engine is the exclusive powerplant for the new Airbus A350.

Transfer of Trent 1000 fan case manufacturing to UMW Aerospace during the coming five years will allow R-R's UK factory at Ansty to concentrate on other engines. UMW said that the initial agreement will expire at the end of 2040, although there is an optional five-year extension.

The industrial move comes as the engine company products continue to evolve to meet requirements for more-reliable, quieter, and more-economical powerplants. Unveiling half-year results early in 2015, R-R chief executive Warren East said: “In the near term, we are managing a significant transition from mature engines to newer, more fuel-efficient ones, such as the Trent XWB, Trent 7000 [for the planned Airbus A330neo], and Trent 1000.”

The Trent 1000 propelled the first Boeing 787 “Dreamliner” flight in December 2009 and first commercial service in October 2011. It was the initial powerplant certified on both the 787-8 and -9, and was the first 787 engine to be cleared for 330-minute, extended-range, twin-engine operations (ETOPS). Now, R-R is keen to see its latest Trent 1000-TEN (for Thrust, Efficiency, and New-technology) variant power the first flight of the stretched, short-range 787-10.

This new engine  introduces several features developed for the A350's more-powerful Trent XWB, including a “rising-line” compressor and three-stage bladed disc (“blisk”) at the front of the high-pressure compressor. R-R says that on flights of up to 3,000 miles the -TEN is expected to offer a specific fuel consumption advantage of some 3 percent, although this differential decays over longer sectors.

For flights of average 787 range, the basic 1000 delivers a fuel-burn advantage “well ahead” of the GEnx-1B at shorter ranges, according to R-R. An “additional 1 percent” is also said to accrue from superior performance retention through the life of the engine.

As testing has continued, one of the 1000-TEN prototypes (engine serial number 11003) has been put through its paces at the U.S. Air Force Materiel Command Aeropropulsion Systems Test Facility (ASTF) at the Arnold Engineering Development Complex (AEDC) at Arnold AFB in Tennessee. Altitude performance was “slightly better than pre-test predictions,” said R-R.

Tests for Trent 1000-TEN performance, operability, and icing certification were performed in the ASTF's C-2 engine cell. “The first program [tests] verified the expected improvements in thrust and fuel efficiency, operability (such as stall margins during fast accelerations and decelerations), [and] the start envelopes,” said Tom Schmidt, project manager at Aerospace Testing Alliance (ATA), which provides AEDC information management, maintenance, operations, and support services. “The C-2 icing system was then installed to run the prescribed icing condition and to demonstrate the engine's anti-ice systems and engine ice-shedding characteristics.”

Serial number 11003 is the third Trent 1000 to be tested at Arnold: during the first exercise in 2007, the engine was tested for performance, operability and starting. Last year, AEDC engineers tested a 1000 fitted with Pack C performance upgrades. Other R-R commercial engine testing there has involved Trent 900s and the BR725 powerplant for the Gulfstream G650.

Rolls-Royce has also been running Trent 1000 “maturity engines” to ensure behavior of units fitted with Pack B and Pack C performance-improvement measures and to stay ahead of operational in-service units. A recent, and new, customer is Ethiopian Airlines, which has selected the engine (and an associated long-term support package) to power six Boeing 787-8s. The decision is noteworthy since it represents a change of engine by the African carrier from the GEnx-1B it chose for 13 previous 787s.

Ethiopian Airlines chief executive Tewolde Gebremariam is confident that the R-R engines will “deliver outstanding lifetime fuel burn, performance, and reliability.” According to Dominic Horwood, the manufacturer's chief customer officer for large civil engines, R-R has “real momentum in the marketplace,” the Trent 1000 having been selected in more than 60 percent of applicable engine competitions in the past five years.

Rising domestic and regional competition, depreciation of the ringgit and a battered image could hinder Malaysia Airlines Berhad’s (MAB) aim of turning itself around in 2017 after an already difficult couple of years.

Having cut capacity by 30 percent including axing routes to Paris, Amsterdam, Frankfurt, Istanbul and Brisbane, and having reduced its workforce from 20,095 to 14,000, its focus has been reduced to little more than that of a regional carrier. London remains the airline’s only European destination.

The pair of infamous air disasters within five months in 2014 put a heavy strain on the carrier financially and its image took a severe beating, with passenger loads dropping to an all-time low. It is almost two years since MH370, a flight from Kuala Lumpur to Beiijing, disappeared from radar screens; and one year, seven months since MH17, flying from Amsterdam to Kuala Lumpur, was shot down over Ukraine. MAB chief executive officer Christoph Muller acknowledges that passenger loads are still low.

With traffic to Europe from the region down at present, MAB believes that dropping Paris and Amsterdam will be a significant contribution to its turnaround plans.

The regional market is crowded with full-service and low-cost carriers (LCCs) engaged in fierce competition for a slice of a shrinking pie. So MAB is left with no choice but to drop its fares to compete in a tough market where LCCs have a whopping 60 percent share. Competing with LCCs in the domestic and regional markets just to fill the seats could prove costly for MAB, as history has shown.

Further afield, the airline surprised the industry when it announced a codeshare agreement with Emirates in December, coming into effect earlier this month [February]. Whether the Malaysian flag carrier will benefit from this partnership remains to be seen, as it is not in the same league as the UAE-based mega-airline.

MAB has to upgrade its product, which has been declining over the past six years, if it wants to retain any hope of seeing improving returns. Opting to codeshare with Emirates instead of Qatar Airways was surprising, as the Qatari carrier is also part of the Oneworld alliance, and has an extensive European network.

The drastic cut in capacity saw the phasing out of the airline’s remaining four Boeing 777-200ERs at the end of January, the last of a 777 fleet that was once 17 strong. The 737-800 fleet will be reduced from 56 to 35 aircraft, when the 21 that are on operating lease are returned to lessors by the end of 2016.

MAB expects to have an average daily utilization of 15 hours, one more than the current 14 for the 737-800, thus reducing the unit cost per aircraft. To save money on hotel accommodation costs for crew overnight stops, the airline has set up seven domestic bases–Kota Kinabalu, Kuching, Labuan, Miri, Penang, Kota Baru and Johor Baru. Flights from these bases will be operated by dedicated cockpit and cabin crew.

The cut in frequencies on almost all routes has paved the way for Malindo Air and AirAsia to capitalize on the situation to add more services. Rising competition will only make it more difficult for MAB to regain lost ground.

Meanwhile the reduction in its fleet size has left the airline with another problem–a surplus of pilots. While some have secured jobs with Asiana Airlines, Korean Airlines, Saudi Arabian Airlines, Emirates and Hong Kong Airlines, many are still wondering what the future holds for them. An estimated 40 percent of its 250-plus 777-200ER pilots have asked to take part in a voluntary Mutual Separation Scheme on an individual basis. Compensation will be paid to those who opt for this.

Those who decide to stay will have to wait for opportunities on other aircraft types with the carrier. This is the first time in the history of the airline that pilots have been affected under a restructuring exercise, which is the fifth since 2000. MAB started operations in October 1972 as Malaysian Airlines System (MAS). The carrier’s huge number of suppliers has been literally decimated, from 20,000 to 2,000 One even had a contract awarded for 25 years; but all contracts were renegotiated. Those suppliers that were retained had to reduce costs.

Still in restructuring mode, MAB’s image took another knock on January 5 when it posted on its website that passengers traveling to London, Paris and Amsterdam would be restricted to cabin luggage of  7 kilograms for economy passengers and 14 kilograms for business class, “in the interest of safety.” Blamed on strong headwinds facing European-bound aircraft, the decision  left passengers furious.

Several hours later this decision was reversed for London-bound flights, while the situation returned to normal for Paris and Amsterdam 24 hours later. With MAB finding it tough to regain market confidence, moves such as this will only make it more difficult for the carrier to recover.

The airline claimed that its flights to Paris and Amsterdam were taking longer, 14 hours against the usual 11.5, as it was necessary to avoid Iranian and Egyptian airspace. In reversing the decision, the airline said it had reconsidered the risk assessment and would fly over Iran after all.

The carrier has amassed $1.21 billion in losses since 2011, when it was taken private by the government investment arm, Khazanah Nasional Berhad (KNB), in a US$373 million buyout. In 2015 KNB committed an investment of US$1.5 billion (then) for the restructuring. The amount is expected to escalate with the payouts to B777 pilots who opt for the voluntary separation deal.

Singapore Airlines is in the process of upgrading its fleet of Boeing 777s with Astronautics’ Block Point 4 electronic flight bag. The new EFBs are replacing existing Block Point 3 units on the 777s and can be installed overnight.

“The new EFB will enable the storage of more information including detailed charts, maps, documents and databases, allowing operators to enhance airplane performance and improve operation efficiency,” explained Astronautics’ business development vice president Larry Levine.

Due to the enhancements introduced to the EFB by U.S.-based Astronautics, there has been substantial improvement to the mean time between failures. Additionally, these upgrades allow operators to continue to add new applications as they are developed. While the new EFBs will not require any changes to wiring, power or cooling requirements already in place, pilots and maintenance personnel will have to undergo minimal training.

Astronautics has supplied EFBs to the airline industry for the past 15 years. The latest Block Point 4 model also is standard equipment on the Boeing 787, and is an option for the 747-8 and 737.

This announcement comes from the Astronautic Corporation of America, the global leader in the development, design and manufacture of avionics equipment and systems for the commercial and military aerospace industry.

It is now nearly two years since Malaysian Airlines flight MH370 disappeared somewhere over the Indian Ocean. Apart from the trailing-edge flaperon that washed up on Reunion Island and was discovered last July, there has been no trace of the Boeing 777 or its 239 passengers and crew. It remains among the world’s most enigmatic aviation mysteries.

A search of the southern Indian Ocean, led by the Australian Transport and Safety Bureau (ATSB), continues in an area defined by a complicated set of calculations derived from five “handshakes” and five other communications events between the aircraft, the Inmarsat 3F1 satellite and a ground station in Perth, Western Australia. Two key parameters associated with the signals from MH370 over a seven-hour, 40-minute period were used in the analysis: Burst Timing Offset (BTO) and Burst Frequency Offset (BFO).

Inmarsat led the effort, assisted by other members of a Flight Path Reconstruction Group (FPRG), including Australian defense scientists, British air accident investigators, U.S.NTSB officials, Boeing, Honeywell, Thales UK and two specialist ground-station contractors, SED and Square Peg Communications. Four Inmarsat employees described the work in detail for the journal of the Royal Institute of Navigation in October 2014, including the reasons for revising the search area after a few months.

A 15-strong “Independent Group” of current and retired aerospace and communication industry professionals have voluntarily investigated the disappearance and corresponded with the relatives. The group’s spokesman is a former Thales flight simulation engineer, Don Johnson. He told AIN that “the challenge of finding MH370 is immense. The revised search area is equivalent to the land area of Switzerland and Austria with some similar mountainous [underwater] terrain.”

The Independent Group has questioned some of the FPRG’s assumptions. It has published its findings on the website www.duncansteel.com. In a recent post, they write that the longer the aircraft remains undiscovered, the more likely the possibility of a fundamental conceptual error. For instance, the BTO and BFO data might fit alternative calculations of the MH370 fuel burn, a much earlier descent, and a more northerly end point. The conclusion by the FPRG that one engine flamed out, followed within minutes by the other, is important to the search area calculation. It has been tested in the Boeing engineering simulator, based on historic data from MH370’s engines.

Others have disagreed more fundamentally with the search strategy. Aron Gingis, an Australian environmentalist specializing in cloud microphysics, told the ATSB that it should be possible to analyze archived satellite imagery for cloud changes generated by MH370’s vapor trails. He told AIN that “Inmarsat’s modeling and calculations have been largely approximate and possibly wrong.” The ATSB declined his assistance. A Ukrainian scientist claimed that acoustic and seismic data could be brought to bear. Australian scientists disagreed.

At the end of last November, five scientists from the Australian Defence Science and Technology Group (DSTG) published the draft results of their revisiting of all the available data, and their new modeling. As a result, the ATSB again slightly revised its calculation of the likely seabed location of MH370. The DST Group examined ocean drift data and said that discovery of the flaperon on Reunion was not inconsistent with the designated search area.

The Independent Group commented that the Bayesian approach used by the DSTG team has a pronounced bias favoring straight flight paths, and higher speeds. They also noted that assumptions about the 777’s autopilot roll mode affect the potential end point of the flight. 

Three specialist vessels have now searched more than 80,000 sq km of the seabed. Two of them use deep-tow sonar, while a third deploys an autonomous underwater vehicle (AUV) that surveys the most difficult terrain–of which there is plenty. The project director for Fugro, the maritime survey specialists contracted for the search, has described volcanic cones, fracture zones running for 100 km, and 70-degree cliff faces. If the aircraft broke into small pieces upon impact with the water, above such a zone, could sonar ever find it?

The governments of Australia, Malaysia and China have committed to searching a further 40,000 sq km, which should take until the middle of this year. That will be the end of the search, “unless credible new information leads to a specific location of the aircraft,” they say. 

Various theories on the cause of the disappearance continue to circulate. Last month, an Australian media article revived the pilot hijack theory. It repeated a report that the flaperon broke off the aircraft in an extended position, and suggested that MH370 made a controlled ditching. The ATSB stated last month that no conclusions had yet been reached on the flaperon. Further, it noted that “for search purposes, the relevant facts and analysis most closely match a scenario in which there was no pilot intervening in the latter stages of the flight.”

Earlier in the flight is another matter. There are no convincing explanations as to why the aircraft should have made three big turns–the initial 180-degree reversal over the South China Sea, another one to the northwest over Penang towards the Andaman Sea, and a final one to the south near the northern tip of Sumatra. These turns are assumed from the primary radar traces that were analyzed post-flight, after Malaysian air defense and ATC controllers failed to identify and track the errant airliner in real time. Those turns don’t make any sense in an emergency situation, and neither does continued navigation without communication from the flight deck.

A year after opening an initial customer-service center (CSC) here in Singapore to serve the Asia Pacific (including the Indian sub-continent, Japan, and Australasia, but not Greater China), Rolls-Royce (Stand N23) has established a global chain of such units. In January, it opened three further CSCs aimed at improving responsiveness, local awareness, and customer proximity in the Americas (served from Washington D.C.), Greater China (Beijing), and Europe and Middle East/Africa (Derby, UK).

Following two years of consultation with owners/operators, the UK engine-maker has re-structured support activities that previously were centered mainly at its Derby headquarters, according to head of services marketing Alex Dulewicz. The moves constitute a major overhaul of aftermarket operations that includes rationalizing R-R’s engine MRO network and enhancing other services.

The Singapore CSC, described by Dulewizc as having “pushed the limits of possibility to test the waters,” has provided a “major step change, a real organizational move right into the operators’ location” to serve the Asia Pacific, and is said to have reduced by 65 percent the lead time to address local customer issues. Establishment of regional CSCs offers a faster response for customers (with support responsibility delegated locally), while providing increased OEM accountability for “issues” and giving R-R a better understanding of “cultural nuances,” according to Dulewicz.

He underlines the value of offering direct support in Singapore, eight hours ahead of Derby (although R-R’s civil large engines “Flight Deck” operations service desk is open 24 hours a day). This rationale does not extend, however, to the Americas CSC, which is located on the U.S. East Coast since Rolls-Royce North America is based there–rather than the more logical West Coast, which is both eight hours behind the UK and ahead of Singapore.

Dulewicz also acknowledged the value of a dedicated Middle East and Africa region for customer support, even though the related CSC is at Derby. Each CSC also will provide a hub for R-R's airline support teams.

Singapore also features in Trent engine MRO network developments that include rationalizing cross-shareholdings between two Asian R-R joint ventures (JVs), Singapore Aero Engine Services (SAESL) and Hong Kong Aero Engine Services (HAESL), and closure of Dallas-based Texas Aero Engine Services (TAESL). Ownership of SAESL now is shared 50-50 between R-R and SIA Engineering (SIAEC), while the manufacturer is an equal partner in HAESL with Hong Kong Aircraft Engineering Company.

TAESL, a 50-50 Rolls-Royce/American Airlines (AA) venture, saw dispatch of its last “old” Rolls engine last month. A further R-R/SIAECJV– International Engine Component Overhaul, which overhauls aero-engine components in Singapore – has been absorbed into SAESL. 

Tripling Demand

Anticipating tripled demand for MRO service by 2030, R-R also has evolved the 10-strong network of company- and customer-owned approved maintenance centers (or “shops”) and JVs to create a more competitive model that transcends previous territorial rights. Each entity, plus N3 Engine Overhaul Services (a 50-50 R-R/Lufthansa Technik partnership) will compete to provide contracted Trent overhauls and basic MRO“time and materials” services, said MRO services director Simon Hutson-Smith.

The manufacturer also has appointed U.S.-based Delta TechOps, the world’s third-largest MRO, as the first independent maintenance center for Trent XWB and 7000 powerplants at a new 100,000-square-foot facility and test-bed, scheduled to open by 2020.

An early industry philosophy of “sell an engine, wait until it breaks, and then sell spares” had been “turned on its head” with the 1990s’ introduction of R-R’s TotalCare power-by-the-hour support, said customer strategy and marketing senior v-p Richard Goodhead. The program, which R-R claims covers 90 percent of the Trent fleet (with all support customers also choosing it for future engines), has mushroomed: the nine customers logging 1.2 million engine-hours/year in the late 1990s has grown to 85+ operators recording 14 million engine-hours annually, as R-R’s installed base has grown from 2,160 units to more than 4,500.

Meanwhile, customer expectations have increased and extended-range twin-engine operations (ETOPS) have become de rigueur. A 1980s’ engine “on-wing” life of 300 hours was acceptable, but today’s Trent 1000 target is 25,000 hours. The key requirement has been to eliminate unscheduled events and aircraft downtime, said R-R director of services Tom Palmer, while Goodhead emphasized that customer-support programs give both parties an interest in increasing on-wing time.

Fleet growth has been accompanied by an evolving TotalCare service with three variants: Term (fixed-period contract), Life (variable term accommodating change of engine ownership), and Flex (until retirement, or end of engine life). Increasing maturity among RB.211 and early Trent engines has spurred recent developments, and R-R has had to consider what customized services would best support them toward the end of life.

Accordingly, almost 20 years after its first such deal, R-R has come full circle with AA, the original customer, launching the latest SelectCare service offering for the same engines: RB.211-535s powering its Boeing 757s. The contract replaces current AA/R-R TotalCare and MRO Services agreements, the latter involving basic aftermarket reactive support with direct payment for engine-shop time and materials. SelectCare fits between R-R’s comprehensive pro-active TotalCare product and the MRO Services offer (as used by Japan’s All Nippon Airways for Trent 1000 support), according to Goodhead.

SelectCare introduces event-based pricing, fixed-price overhauls, engine exchanges, and customized work scopes, allowing customers to contract for required services over an agreed number of shop visits to match requirements and budget. R-R claims its knowledge of RB.211 and Trent engines, comprehensive service network and advanced engine-health monitoring differentiate SelectCare from other fixed-price overhaul agreements. 

For Airbus, 2016 will see a strong emphasis on strengthening the production process as the European airframer deals with heavy delivery commitments for several programs. Announcing the 2015 results at a Paris press conference on January 12, Airbus CEO Fabrice Brégier indicated that a record 635 deliveries took place last year and he set a target of more than 650, including 50 A350XWBs, for this year.

Lufthansa is expected to receive the first A320neo over the next couple of weeks, delayed from the original delivery date in late December. Brégier confirmed that the slight delay is in part linked to the Pratt & Whitney PW1100G engines for the new narrowbody.

“We have a few limitations [with the PW1100G],” said Brégier, citing issues such as the start-up phase for the geared turbofans. “The start time of these big engines is longer than that of the V2500 [the IAE powerplant that is one of the engine options for the current A320 family]. But it will improve.”

The production ramp-up for the A320neo will accelerate in the second half of the year. In the first six months of 2016, Airbus wants to ensure that production processes “stabilize” at its own factories and at those of its engine suppliers, COO Tom Williams told AIN. He expressed confidence both Pratt & Whitney and CFM International (offering the Leap 1A engine) can increase their output as expected. There is no lack of capital investment and the management teams are strongly motivated, up to the parent company level, he said.

The A320neo may entirely replace the current ceo version in production from mid-2019. However, Airbus does not rule out the possibility that it will build ceos after 2019, as customers may still want them. Single-aisle production is predicted to be between 60-63 in the 2019-2020 period.

Airbus missed last year’s delivery target of 15 A350XWBs, with only 14 aircraft reaching operators. Brégier blamed seat and lavatory supplier Zodiac. He said he had been “very patient” and appeared irritated at the French firm’s top executives, who he said have been “in denial” over the problems.

Zodiac has been deselected as an A330neo cabin supplier. However, there is no intention yet to switch to another equipment manufacturer on the A350, as Zodiac has instituted a remedial action plan to improve its performance, according to Brégier.

Nevertheless, Airbus was satisfied with the overall performance of its supply chain last year. The number of missing parts is decreasing, for example. “We have issues beyond Zodiac but this is normal work,” Brégier said. Therefore, Airbus is continuing the ramp-up with a target of 10 A350s per month by the end of 2018.

“Now, it is a question of how we bring carbon fiber up to speed [in terms of production rates],” Williams said. Reducing the amount of rework in general is important, too, he added. Airbus is adding more employees and machine tools to increase production and make processes “very repeatable.”

Digitalization is being emphasized as a means to improve production efficiency across all Airbus plants and programs, for example: connecting workers on the assembly line with the company’s back offices. “We have to fix a lot of quality issues every year, and digitalization should help us anticipate and eradicate the problems,” Brégier explained.

Last year, Airbus also worked on securing production rates for the A330 twinjet. Having received some more orders for the existing A330ceo model, the airframer confirmed that it will produce these at a rate of six per month until it is eventually replaced by the new A330neo.

In Tianjin, China, where Airbus already has an A320 final assembly line, the investment for an A330 cabin completion and delivery center is to be launched next month with an undisclosed Chinese partner. The facility should be ready in 2017.

Meanwhile, 27 A380s were delivered last year, allowing Airbus to break even on the program for 2015. Brégier said this had been achieved through cost cutting and indicated that the company expects to be able to break even even if annual delivery rates fall to the low 20s.

Airbus confirmed that late last year it did receive an order for three A380s from an undisclosed customer. COO, customers John Leahy would say only that the contract is with “a global leading airline” – there is wide speculation that this is Japan’s All Nippon Airways. However, Airbus also reported that Russia’s Transaero has cancelled one of its four A380 orders, bringing the net tally to just two sales of the widebody in 2015. A380 orders thus total 319 since program launch.

Pressed about the prospect of a downturn, Brégier and Leahy appeared unfazed. One concern may be IATA’s passenger traffic forecast, which has been cut recently from 4.1 to 3.8 percent in average annual growth. “IATA is in a strange situation – they don’t cover all airlines,” Brégier suggested, stressing Airbus deliveries last year were above what would be expected based on IATA’s numbers.

He added that the Chinese economic slowdown is not being felt, as the appetite of Chinese consumers is being fueled by factors such a more relaxed U.S. visa policy. At the same time the country continues to build, Brégier said.

Asked whether China’s economic slowdown is impacting Malaysia and Indonesia, Brégier suggested that the tumbling Shanghai stock exchange should be seen as unrelated to the real economy. “More and more people are joining the middle class in Southeast Asia and they want to travel,” he insisted.

The Airbus executives touched on various other factors. Brégier said that low fuel prices “help our customers prepare for the future. They don’t expect oil will stay so cheap for a long time.”

Competition from Bombardier and Comac is not deemed a threat – the CSeries and the C919“will get some market share, but not massive,” Brégier said.

As of mid-January, the first A321neo was expected to fly “in the coming weeks.” The maiden sortie of an A319neo was predicted for next spring. The first delivery of an A320neo with CFM Leap engines is envisioned for the summer months.

Final assembly of the first A350-1000 was to start this month (February) with a first flight targeted for this year’s fourth quarter (2016). On the in-service A350-900, “we will achieve 98.5 percent of operational reliability this year, which is the minimum on a widebody,” Brégier promised.

The 635 aircraft Airbus handed over last year included the highest number it ever delivered - 144. The company gained 1,036 new orders, expanding its backlog by 401 units. The total backlog for Airbus now stands at 6,787 aircraft. This should increase further in 2016, as the book-to-bill ratio is projected to be above one.

In conclusion, Leahy pointed out that the Airbus firm order backlog is so strong that the manufacturer cannot afford to slow deliveries before 2020, no matter what happens in the meantime.

ATR (Stand E01) is here with a strong presence in the region, but one it would like to expand further–especially in China. Late last year the Franco-Italian turboprop manufacturer opened a representative office in Beijing, estimating the time is right for its 50- to 78-seat turboprops to find their first customers in China. ATR has long complained that China is not an open market, notably due to prohibitive tariffs.

The company’s new Beijing office, located at Tianzhu Airport, is headed by v-p sales and chief representative in China, Wang Qi. “We have hired three former Airbus salesmen–they are Chinese and have a wealth of experience in aircraft sales,” ATRCEO Patrick de Castelbajac told AIN. Airbus, which has 300 employees in Beijing, is fully supporting ATR through its established relationship with Chinese authorities, Castelbajac added. Formerly, ATR had only one representative in China, and he did not speak Mandarin. “We should not complain, we must convince,” Castelbajac asserted during a recent press conference in Paris.

Some 2,600 commercial aircraft are flying in China, of which 68 are considered regional aircraft with a capacity of less than 90 seats. Fewer than 20 of those are turboprops–specifically, Avic MA-60s. The remainder consist of Bombardier and Embraer jets, according to Castelbajac. “But there is no reason why the regional-aircraft fleet should account for [only] 5 percent of the total in China, against 25 percent worldwide,” he said.

ATR executives believe many of the routes currently flown do not need a 150-seat aircraft. Yet, many small cities are, nevertheless, believed to warrant direct airline service. Such routes may not be found on the densely populated coastal areas but rather in areas like Inner Mongolia. This is the kind of place where ATR salespeople estimate they have the best chances to place their aircraft.

The Civil Aviation Administration of China (CAAC) does not know a lot about ATRs, and turboprops have a bad reputation in China, Castelbajac conceded. The civil aviation authorities of Indonesia and Myanmar in 2013 ordered the grounding of Merpati Nusantara Airlines’ and Myanmar Airways’ MA-60 fleets for airworthiness checks following a series of accidents. Shortly after, New Zealand sparked a controversy when it warned its nationals in the Pacific island country of Tonga against flying on an MA-60 operated by Real Tonga airline.

Castelbajac did not refer to the grounding or the controversy, but said he intends to demonstrate to the CAAC and Chinese airlines that ATRs are safe and reliable. He believes the environment friendliness of ATR aircraft–burning an estimated 50 percent less fuel per passenger-mile than a jet–will help convince Chinese operators and a country where environmental issues have recently become more important.

Asked for a sales objective, he suggested one or two ATRs might be sold this year in the country. “But once the airlines see the aircraft in service, a lot will follow,” he predicted.

Import tariffs had long been cited as an obstacle. Duty and VAT, combined, are still higher for aircraft weighing less than 25 metric tons. However, airlines may now amortize those costs over several years.

Despite the lack of any orders from China, Asia still accounts for 51 percent of ATR’s backlog, and more than 350 ATRs are flying in the region. ATR also has Chinese suppliers in its network, such as Avic, which manufactures 20 percent of the fuselage.

Has inflight connectivity become an expectation? Earlier this year airline comparison site Routehappy released its annual “Global State of In-flight Wi-Fi” report, which indicated that 2015 was a game-changer for the service. More airlines than ever now offer airborne Internet, and are upping the ante with faster speeds and more coverage. Today, 60 carriers offer Wi-Fi in most regions. Naturally, with its relatively cheap and reliable air-to-ground services, the U.S. leads the pack offering connectivity on 78 percent of all available seat miles (ASM).

The good news for Asian fliers is that many more non-U.S. airlines, including Garuda and Japan Airlines, now provide superior connectivity. Several carriers are already upgrading aircraft to their third generation of in-flight Wi-Fi. New York to Dubai offers the strongest overall service, while, perhaps surprisingly, London to Hong Kong is the least well connected.

So how are Asian locals stacking up? Singapore Airlines’ (Stand CS26) passengers will soon have access to high-speed Internet, thanks to Honeywell’s JetWave satellite communications hardware, working with Inmarsat Aviation’s Global Xpress (GX) network, provided by SITA OnAir. Honeywell (Stand G39) claims that the system will give passengers an in-flight experience that is “close to the capability they have in their home.” GX is slated to provide aircraft with data rates of up to 50Mbps.

Passengers should be able to do everything from accessing real-time social media updates and emails to live-streaming TV, from virtually anywhere in the world, over both land and sea, says Honeywell. Installation of the first system is scheduled for the second half of 2016 on the carrier’s Boeing 777-300ER aircraft, followed by its Airbus A380-800s and A350-900s.

Other airlines that have opted for JetWave include Vietnam Airlines and Lufthansa. Honeywell also signed a memorandum of understanding with Air China last year to begin testing GX on the airline’s A330 aircraft.

Singapore tends to be at the forefront of IFEC offerings. Last September it partnered with Panasonic to launch the industry’s first companion mobile app that spans across the entire journey. Passengers can enter their flight details before they fly and review the upcoming entertainment choices for their trip. 

Among other services, they can watch movie trailers, read reviews and synopses, and even save films, TV shows, and other media that they want to view on their flight. Once onboard, they synchronize their mobile device to their seat and call up their preferred entertainment or review the entire media library.  The app effectively then becomes a second screen, where they can access the IFE library, or watch the moving map.

Chinese airlines are feeling the pressure to compete internationally. In December Los Angeles-based Global Eagle Entertainment (GEE) announced a milestone deal with China’s HNA Group to launch its Airconnect inflight connectivity system in the third quarter of this year aboard five of Hainan Airlines’ 737NG aircraft, and then a further five A320s operated by HNA subsidiary Beijing Capital Airlines. This will provide passengers with the usual array of services, including Internet access, online shopping and payment, and live television, plus connecting gate information, weather, and flight tracking. GEE will also manage the supplemental type certification process and provide ongoing technical support.

Meanwhile Asia’s second largest carrier China Eastern Airlines was the first Chinese airline to launch international inflight connectivity, using Panasonic’s eXConnect Ku-band system on the airline’s newest Boeing 777-300ER widebodies on routes between New York, San Francisco, Shanghai, Toronto and Vancouver. It is also offering WiFi on domestic services between Shanghai and Beijing, Chongqing, Guangzhou, and Kunming.

Airlines are treading carefully, but China is evidently relaxing some of its more stringent rules to cater to international traffic. Last year Panasonic won a license to offer connectivity in Chinese airspace. Prior to that, carriers had to turn off connectivity when they entered its territory.

A delicate issue, however, is one of content and the list of banned websites under the “Great Firewall” of China (known within the country as the Golden Shield project). The firewall largely bans Western social media sites, such as Facebook, Gmail, Instagram, Snapchat and Twitter, as well as some media organizations.

But foreign players are soldiering on and gaining wins in the region overall. GEE also offers its WISE (wireless IFE software) platform, which has proved popular in the Philippines. Both the national carrier and low-cost Cebu Pacific have installed the system on their Airbus A330s.

WISE, along with connectivity provider OnAir, offers the software backbone for the carrier’s wireless IFE as well as a complete content line-up including movies and TV shows approved for streaming with digital rights management by major Hollywood studios.

There are some surprises, though. Over in Hong Kong, Cathay Pacific’s feet-dragging on offering in-flight connectivity seems odd, given its position as a premium carrier. It is finally trialing such services this year on its Airbus A350 fleet using Panasonic’s Ku band service. In Malaysia, AirAsia only offers a light download limit of 3MB per passenger, encouraging fliers to use chat and text apps, rather than images and web pages.

Most are not so cautious. Sri Lankan Airlines, for example, has opted for Thales’ (Stand F23) InFlyt Experience, becoming launch customer for the OEM’s Avant system, with an application delivering live news and weather. The live news and weather includes news articles, complete with images, plus five-day weather forecasts for 50 selected cities.

Today, international carriers offer IFEC on 24 percent of their ASMs. You never know, by the time Singapore 2018 rolls around, you could be reading this publication electronically en route to the show!

Faced with regulatory bottlenecks and high taxation, and a fledgling infrastructure, India’s aviation industry–having grown by 20 percent in 2015–is set to get a boost a new civil aviation policy. While the government has said it aims to provide a level playing-field to aviation-related sectors including airlines, airports, MRO organizations and GA, systems and processes will need to be simplified and made transparent. This is believed to be one of the conclusions of the draft aviation policy that is expected to be released imminently.

The policy recognizes an eco-system will be needed to handle a high-growth market that saw 70 million domestic tickets sold last year, with forecasts for 300 million by 2022 and 500 million by 2027. International ticketing is expected to touch 200 million by 2027 also.

Thorny issues remain, however. The government has not decided on the 5/20 rule that disallows start-ups from flying internationally until they have completed five years of operations and have at least 20 aircraft. The industry is visibly split on this, with established airlines lobbying the government not to lift the rule. “The 5/20 impacts not only Vistara and Air Asia India, but it is holding back the true potential of Indian aviation” said Phee Teik Yeoh, CEO, Tata SIA-owned Vistara, to AIN. “There is no global parallel to this. The regulation is discriminatory to [new] Indian airlines as foreign carriers that do not meet these criteria are allowed to operate in Indian skies.”

So intense is the fear of additional competition in the arena that airlines such as SpiceJet the second largest budget carrier in India, are discussing openly the issue of Substantial Ownership and Effective Control (SOEC) of airlines, even as the aviation policy looks at increasing the 49 percent ownership by foreign airlines in domestic Indian airlines. “Unfortunately, we are perhaps the only country in the world that does not define ‘effective control’ or properly enforce it,” said a candid Ajay Singh, chairman and managing director SpiceJet Airlines, “so that airlines such as AirAsia India and Vistara, [which are] clearly controlled by their foreign parents, continue to operate in India [but are] blatantly flouting the principal of effective control.”

“Indian policy allows airlines from any country to set up domestic airlines that are effectively owned and controlled by their parent, and in some cases by foreign governments themselves,” said Singh separately, in a statement. His concern is that these new carriers “will claim entitlement to bilateral rights to fly to overseas markets including to their “home” markets. “In such a situation, these airlines can potentially obtain rights from their countries into India and from India into their countries, thereby establishing monopoly control over key routes to and from India,” he added.

Indian airlines have over the years lost market share to cash-rich Middle East carriers supported by their governments. There is an industry view that a proposal in the draft policy that seeks to auction bilateral rights will ensure that such rights are cornered by financially stronger global airlines to the detriment of domestic airlines.

Until effective control is addressed by the policy, said Singh, “the 5/20 rule affords some protection to domestic airlines. It ensures airlines that seek to utilize India’s share of bilateral rights and fly abroad must first fly domestic routes.”

Singh was of the view that relaxing the 5/20 rule and the rules of ownership and control should be considered strictly based on reciprocity and for clear strategic advantage. “The [new] civil aviation policy is an opportunity to help create powerful global airlines that are Indian owned and controlled. In our view, this opportunity should not be sacrificed for short-term gains, if any,” said Singh.

Business Aviation Protection

Meanwhile, the ministry of civil aviation has accepted a plea that the Business Aviation Operator Association (BAOA) has been making on allowing small commuter airlines to run both scheduled and charter services. BAOA has also asked for import tariffs placed on general aviation aircraft to be rolled back to zero, going back to 2007.

“There is no logic to this duty because scheduled airlines do not pay it. If you want the hinterland to be connected, the roll-back will help regional connectivity as more aircraft will be imported,” said R.K Bali, managing director, BAOA to AIN.

A significant number of airports remains under-utilized and will be helpful to promote regional connections envisaged by the policy, said R.K. Srivastava, chairman of the Airports Authority of India. Of the 476 airports/airstrips in the country, AAI owns and manages 125, of which 94 are operational. The policy is looking at reviving disuse airstrips also, depending on demand.

While the Policy does not put a cap on the number of ground handling agencies eligible to operate at domestic airports, the Ground Handling Association of India has asked for a cap, and a ban on allowing domestic airlines and charter operators to carry out self-handling. “Foreign investors like us have backed this infrastructure project and have already seen significant erosion of value due to non-implementation of the original [promised] Policy. Since [2007] we have invested substantially in designing, upgrading and commissioning world-class ground handling facilities and operations at these airports,” said Murali Ramachandran, CEO of  Celebi.

However, there is a bright star on the horizon that brings hope to the MRO businesses burdened by heavy taxes; the tax on MRO services is to be reduced to zero, while aircraft maintenance tools and tool-kits will be exempt from customs duty. To enable economies of scale, the period for which the spare parts imported by MROs can be stored tax-free will also be extended to three years.

“The policy is still evolving and could be more robust. It should not take 20 years to settle. The government should also look at the private sector as partners in growth,” Shrinath Sundaram, director, VinMn Aerospace, said to AIN.