Vol. 24 No. 9 November 2017 orientaviation.com

SHOOTING FOR STARS President Jaime Bautista is expanding Philippine ’ fleet and network with an eye to winning five star status by 2020

Career pilot Infrastructure HK Express recruits takes top job at overload morphing president from sister Airlines into crisis HNA carrier

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COVER STORY

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PUBLISHED BY

ORIENT AVIATION MEDIA GROUP Mailing address: GPO Box 11435 Office: 17/F Hang Wai Commercial Building, 231-233 Queen’s Road East, Wanchai, Hong Kong Tel: Editorial (852) 2865 1013 E-mail: [email protected] SHOOTING Website: www.orientaviation.com

Publisher & Editor-in-Chief FOR STARS Christine McGee E-mail: [email protected] President Jaime Bautista expands

Chief Correspondent ’ fleet and Tom Ballantyne network with an eye to being a Tel: (612) 9638 6895 five star carrier by 2020 Fax: (612) 9684 2776 E-mail: [email protected]

Greater Correspondent Dominic Lalk Tel: (852) 2865 1013 COMMENT INDUSTRY ADDENDUM E-mail: [email protected] 7 Bombardier back from financial brink 27 Airbus takes control of Sepang Aircraft

North Correspondent Engineering Geoffrey Tudor ADDENDUM 27 SIA Engineering and Air Engineering sign Tel: (813) 3373 8368 E-mail: [email protected] 8 Career pilot takes top job at MoU 8 Government weighs re-launching MH370 search 27 European MROs to service CFM Leap engines India Correspondent R. Thomas 8 executive to run HK Express 27 Airbus teams with Nordam for A320neo P&W Tel: (852) 2865 1013 fares in the 77% cheaper than a engine build up E-mail: [email protected] decade ago 27 ExxonMobil establishes scholarship in China Photographers 9 Government lends support to new Hong Kong Rob Finlayson, Graham Uden, Ryan Peters aircraft leasing and aviation finance association

Chief Designer Chan Ping Kwan NEWS BACKGROUNDERS 14 Bombardier deal adds heat to subsidy battle Printing Printing Station(2008)

ADMINISTRATION 28 AAR explores blockchain implementation General Manager 28 FlightSafety International promotes Shirley Ho E-mail: [email protected] distinguished air force veteran 28 Rapid rise through the ranks for AJW Group’s ADVERTISING Tom De Geytere

Asia-Pacific, & Clive Richardson INDUSTRY INSIGHT SPECIAL REPORT Tel: (44) 7501 185257 E-mail: [email protected] 18 Digging deeper at China’s OEMs Aircraft engine Asia-Pacific market: an update 30 Engine business booms in Asia-Pacific The Americas / Canada Barnes Media Associates MAIN STORY Ray Barnes 10 Infrastructure overload morphing into crisis Tel: (1 434) 770 4108 Fax: (1 434) 927 5101 E-mail: [email protected] [email protected]

Follow us on Twitter @orientaviation 30 Single aisle engine market accelerates also - keep up with the news of the week with Orient Aviation’s Week in 30 Mixed fortunes for wide body propulsion the Asia-Pacific manufacturers

© All rights reserved 32 3D printing revolution Wilson Press HK Ltd., 33 Electric engines on horizon Hong Kong, 2017 33 Global engine market enjoying unlimited growth

NOVEMBER 2017 / ORIENT AVIATION / 3 SO WE DID.

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Bombardier back from financial brink

The industry was caught off guard last month when it was regard as an excellent product – and which has not recorded a revealed Airbus had become Bombardier’s White Knight with its sale for more than 18 months - will have a new lease of life. planned purchase of 50.01% ownership of the Canadian C Series Analysts have said that many airlines, particularly in the single aisle jet programme. The new structure of the programme Asia-Pacific, have not ordered C Series planes because of the is scheduled for completion in the second half of this year. programme’s precarious financial position. Now, with financial Airbus had entered into discussions with Bombardier about stability restored and with Airbus’ strong sales and support team investing in the Canadian company in 2015 but Airbus CEO, Tom marketing the jet, it is hoped more carriers in the region will follow Enders, decided to end the dialogue. The general view was that ’s lead and add the C Series to their fleets. Airbus was no longer interested in buying into Bombardier. For Boeing, in a region where single-aisle jets are the biggest As a result, Bombardier has been struggling for buyers for the sellers and will continue to be in coming years, the heightened C Series. Its search included Mainland aerospace manufacturer, Airbus presence in the single aisle market is a challenge. With the COMAC. new Bombardier jet in its stable, Airbus can compete with the big While Airbus and Bombardier might be very happy with selling B737 MAX 8 by squeezing it from below with the C Series the restructured ownership of the C Series programme, Boeing and from above with the A321neo. definitely is not. Immediately after Enders said Airbus planned Some analysts have suggested Boeing may counter Airbus’ to open a Final Assembly Line (FAL) for the C Series at the A320 Bombardier investment by increasing its co-operation with facility in Mobile, Alabana, it cried foul. . The Brazilian manufacturer’s new E-Jet family is a natural It alleged the new Mobile FAL decision was intended to competitor to the C Series. circumvent duties of 300% the U.S. will impose on Bombardier An Airbus/Bombardier versus Boeing/Embraer sales battle in for the sale of 75 C Series jets to . Boeing has called the lucrative Asia-Pacific would be an interesting contest. the Delta deal price dumping because the Canadian jet series If such a structural shift in aircraft manufacturing did come to programme has been so heavily subsidized by its government. pass it would be good news for the region’s airlines. They would Whether Airbus will avoid the tariff is open to question. But for expect to negotiate better deals with the manufacturers as they the industry in general it is important that an aircraft many experts compete for orders for single-aisle region’s fleets.■

TOM BALLANTYNE Chief Correspondent Orient Aviation Media Group

The most trusted source of Asia-Pacific commercial aviation news and analysis

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NOVEMBER 2017 / ORIENT AVIATION / 7 ADDENDUM

Career pilot takes touch point, he said. “We have ultimate flexibility, then covering weathered many storms together costs will likely lead to a rise in top job at Malaysia as a family and we will come back average fares,” he said. Airlines stronger and better than ever.” De Juniac also urged the To ensure a smooth Philippine government to avoid Malaysia Airlines Berhad (MAB) transition, a Board Executive implementing a tourism tax and quickly appointed a successor to Committee will be in place for six abandon a proposed Green Peter Bellew after the Irishman months, led by chairman Nor, Fee. “The proposed Green accepted Ryanair’s offer to return the said. ■ Fee is misguided and should to his former employer as chief be abandoned. Governments operating officer. through the International Civil The new MAB group CEO Air fares in the Aviation Organisation (ICAO) and executive director-designate the leadership of MAB,’’ MAB Philippines 77% have agreed to a global approach is Captain Izham Ismail, a chairman, Nor Yusof, said in an to climate change. There is 38-year veteran of the airline e-mail to the carrier’s staff. lower than a CORSIA, an agreed carbon who has worked as the group’s “I am proud that he is our decade ago offsetting and reduction scheme chief operating officer during own internal home grown talent for international aviation,” he Bellew’s tenure. His promotion and I am confident he will be able Speaking at an International Air said. took immediate effect on to take the airline further forward Transport Association aviation “The cause of sustainability October 20. Captain Izham is the and ensure the turnaround (IATA) day in last month, is best served by the Philippines fourth Group CEO in last four plan is met. We are now in our the association’s director supporting this global approach years in a period that has seen third year of the five year MAS general, Alexandre de Juniac, and volunteering to participate in MAB run by two consecutive Recovery Plan and it is timely said that in 2016 air fares in the CORSIA. See Shooting for stars, foreign bosses, Christoph for us to appoint a Malaysian to Philippines were 77% cheaper page 21. ■ Mueller and then Bellew. see it through to the finish line,” than they were in 2006. “Captain Izham will assume Nor said. “Over the same period, the his role as GCEO from December Izham is elated by the number of destinations served Li Dianchun 1, 2017 upon the departure of appointment. In a statement directly by the Philippines anointed new HK Peter Bellew who is currently on he said: “I am humbled and at increased from 40 to 55 and administrative leave,” an MAB the same time ready for the passengers travelled almost Express president airline statement said. challenge. We are on track to a tripled from 24 million to 64 Captain Izham began his full and complete transformation million,” he said. Former Hong Kong Airlines Malaysian Airlines career as a as outlined in the 12 point MAS chief commercial officer, Li pilot. He rose through the ranks Recovery Plan (MRP). I am Dianchun, is the new president to become director of operations, looking forward to working with of HK Express, effective from then chief executive of MAS my MAB colleagues to make this October 31. Li will be responsible Wings and most recently as the airline the pride of the nation for the day-to-day management successor to Bellew as COO. again.” of the low-cost carrier, but also It is no surprise that MAB’s Chairman Nor urged staff will work closely with executive owners, the Khazanah Nasional to rally around the new CEO. chairman, Zhong Guosong, Berhad sovereign wealth fund, Flights must continue to take off in formulating strategy and decided to appoint a local to and land on time and staff must operational expansion. the job. “Bellew’s departure, continue to provide sincere and A HK Express statement said: if anything, has merely genuine Malaysian Hospitality “among the priorities for Mr. Li in accelerated our plans to localize across every customer’s his new role will be strengthening De Juniac was making communication between staff and the industry’s case against management as well as enhancing advocates of air fare caps in the Philippines. “Airlines offer a wide variety of fares at different price points to satisfy customer needs. Introducing government imposed fare caps would likely have the unintended consequence of reducing deeply discounted fares. If airlines cannot charge a premium for

8 / ORIENT AVIATION / NOVEMBER 2017 ADDENDUM

management efficiency and aircraft lessors and aircraft leasing operational stability.” managers. Li has worked in a variety Association president, of senior positions in the Stanley Hui, said the aviation industry in the last introduction of Hong Kong’s 20 years, including network tax regime for the aircraft and planning, market operations and aviation finance sector could management. ■ capture up to 18% of the market in the next two decades. “With our many established Hong Kong gets advantages, the industry’s serious about concerted efforts and the Airways (9) and others, Dutch firm Fugro and an government’s clear policy Airlines (10). unidentified Malaysian company, aircraft leasing support, we are optimistic this “To be named in the top ten, had submitted proposals that could be achieved,” he said. airlines must have achieved a were under discussion. “We Hong Kong made it clear it was “This is just the beginning. seven star rating safety rating won’t be deciding anything on a mission to build the Special Let us all work together to build and demonstrate leadership now on embarking on a new Administrative Region into an and grow aircraft leasing and in innovation for passenger search,” Liow told reporters on aviation finance hub with the financing into Hong Kong’s comfort,” the ratings company the sidelines of an event in Kuala said. Lumpur. “We have to discuss it “We are looking for leadership with the companies. It will take and airlines that innovate to make some time as they are detailed a real difference to the passenger discussions.” experience, particularly in MH370 vanished on March . In our evaluation, 8, 2014, somewhere over the we will also consider the southern Indian Ocean on audited website feedback from a scheduled flight to passengers on our website and from . It had 239 other reputable websites such as passengers and crew onboard. CNTraveller.com. Its disappearance has become “Whether number 1 or one of the world’s greatest number 10 these airlines are aviation mysteries. the best of the best – the elite in Some floating wreckage coming out party of the Hong new economic driver, and aviation. They are the trendsetters has been found and identified Kong Aircraft Leasing and most importantly, a new home and the benchmark by which all as coming from the aircraft, but Aviation Finance Association for aircraft leasing companies others are judged.” ■ , Malaysia and China on November 1. In her speech around the world.” ■ decided to call off a US$159.16 at the packed official ceremony, million two-year search for the Hong Kong’s top government Malaysia considers plane in January, despite protests official,chief executive, Carrie Asia-Pacific carriers restarting search from the families of passengers Lam Cheng Yuet-ngor, said dominate top ten on the lost aircraft. that as a global financial centre for MH370 Liow said the proposals and international aviation hub, ratings poll would be presented to the Hong Kong possessed several The Malaysian government is other countries in the tripartite favourable conditions necessary In 2017, eight of the top ten considering offers from three committee - China and Australia to thrive as an aviation hub airlines in the world, as private companies to resume - before a decision to resume the including a free economy, rule of assessed by Airline Ratings. the search in the Indian Ocean search was made. ■ law, sophisticated legal services com, are Asia Pacific carriers. for missing Malaysia Airlines and a strong pool of talent in Only and Virgin flight MH370, the B777 which financial services and aviation. Atlantic made the list from disappeared in March 2014. She said that since December elsewhere across the globe. At least one of the bidders, 2015, the withholding tax between They are Texas-based Ocean Infinity, has China and Hong Kong has been (1), Airways (2), said it does not have to be paid 5 % and now a dedicated tax Airlines (3), Virgin unless the aircraft is found. regime has been enacted in Australia (4), (5), Malaysia’s Transport Hong Kong that provides profit Etihad Airways (6), All Nippon Minister, Liow Tiong Lai, tax concessions for qualified Airways (7), Korean Air (8), confirmed Infinity and two

NOVEMBER 2017 / ORIENT AVIATION / 9 MAIN STORY INFRASTRUCTURE OVERLOAD MORPHING INTO CRISIS When the region’s airline leaders met in last month for the 61st Assembly of Presidents of the Association of Asia Pacific Airlines, the threat of an infrastructure crisis and more costly airport security measures dominated the discussion. Chief correspondent, Tom Ballantyne, reports from Taipei.

ndustry leaders gathered in Taipei last month once told delegates at the hosted assembly. again warned governments that the aviation faced an “In many ways, the Asia-Pacific is ahead of the game infrastructure crisis and that in the Asia-Pacific several with major hubs investing in expansion, but , airports were close to crisis operating conditions. Manila and are among airports that need major “We are headed for an infrastructure crisis. I believe an upgrades,” he said. “Chinese air traffic management Iinfrastructural crisis everywhere in the world can only be struggles to cope with growth. And high costs at India’s averted with coordinated efforts to address deficiencies. We privatized airports are burdening the industry. must remind our governments of basic infrastructural needs, De Juniac said the 34 million jobs and $700 billion of which is sufficient capacity and technology in line with our economic activity supported by aviation in the Asia-Pacific developments and affordability,” the International Air were expected to more than double in the next 20 years. Transport director general and CEO, Alexandre de Juniac, “But the realisation that these economic benefits are at risk

10 / ORIENT AVIATION / NOVEMBER 2017 MAIN STORY

meet our targets,” Bautista said. Already, he added, the IATA campaigns against airline’s ability to grow had been affected. private ownership of China Airlines strategic planning department general manager, James Chung, said some of the issues could be airport monopolies addressed by smarter management, including better IATA director general and CEO, Alexandre de Juniac, integration of resources. “For instance, under airline said in a press briefing at the AAPA Assembly of Presidents alliances, carriers using the same business model should be in Taipei last month that many governments see privatiza- accommodated in the same terminal,” he said. tion as a solution to gain revenue and funds, but airports A primary motion passed at the China Airlines hosted perform better in public hands. AAPA assembly urged Asian governments to coordinate “We have seen disappointing experiences with airport investments in aviation infrastructure, including airport privatization. The primary focus of airports is to support local prosperity as an economic catalyst. In private hands, runways, terminals and air navigation services to keep pace shareholder returns are top priority and we have seen cost with growth and also to deliver operational efficiencies and a increases in privatized airports like Paris and Sydney. reduction in emissions, noise and waste. “We need robust regulation to balance private and At congested and slot constrained airports around the national interests, and we have not seen any long-term world, of which close to 40 are in the Asia-Pacific, the AAPA success story.” He said airlines had no issue with injecting assembly called on governments to ensure optimal use of private sector mentality into the operation of any airport. “But our conclusion from three decades of largely disap- pointing experiences with airport privatization tells us Airlines bearing burden of airports perform better in public hands. The primary focus of airports should be to support local and national pros- enhanced and discretionary perity as an economic catalyst.” security rules Also under the spotlight at the Taipei assembly were the numerous problems caused by discretionary and unco-ordinated security measures. The latest examples were the new security rules the U.S. has imposed on all inbound flights that came into effect in October. The new rule can subject any passenger travelling to the U.S. from any airport in the world to additional inter- views at check-in or at the boarding gate. All personal electronic devices also must be inspected. In Taipei, De Juniac said the industry understood security threats to aviation were made regularly, but in this case the U.S. in the region does not address the long-term challenges of government had not shared any specific information about sustainability, infrastructure and regulatory harmonization,” new risks before it imposed the October rule. he said. “What we have seen is very strange. Unilateral measures announced without any prior consultation. That IATA’s latest 20-year air passenger forecasts that 7.8 is something that is very concerning and disturbing,” he billion passengers will travel in 2036, almost twice the four said. billion passengers expected this year. More than half of that The Association of Asia-Pacific Airlines (AAPA) growth will be in the Asia-Pacific, with the region director general, Andrew Herdman, said the new security accounting for 2.1 billion new travelers in 2036. measures for flights to the U.S were a “significant cost and Even with traffic at today’s levels, panellists at the a training burden” for airlines. A globally coordinated Assembly pointed to the daily difficulties their airlines faced security approach made more sense than having destina- from delays caused by congestion that were irritating tion-specific requirements, he said. increasing numbers of passengers and higher fuel costs. “They must add screening staff, find dedicated space Major hubs across the region are operating well beyond for additional screening of passengers on affected flights, allocate longer time windows at gates for each flight and full capacity. One of the worst affected cities is Manila, train employees to conduct the extra screening. The result where two runways are limited to handling 40 movements is lower gate utilization, a potential knock-on effect on an hour. Speaking during a “Market Growth and airline on-time performance and extra cost,” he said. Infrastructure Challenges” panel in Taipei, Philippine “Who provides the extra manpower and facilities? Airlines president, Jaime Bautista, said his home hub airport Who pays for it? Ultimately, it will be the passengers. We was designed to handle 30 million passengers annually, a are concerned that people rarely sit down and work out level it reached in 2012. the costs; I don’t think the costs have been estimated, but This year the airport is coping with a forecast 42 million they are significant. A globally coordinated security passengers. “At PAL alone, we expect to carry 15 million approach made more sense than having destination-spe- passengers this year and 20 million by 2020. With airport cific requirements,” he said. infrastructure limitations we are not really sure if we will

NOVEMBER 2017 / ORIENT AVIATION / 11 MAIN STORY

guidance to ensure a single, globally harmonised process. Airlines also are disappointed in the slow progress of a Seamless Asian Skies, which has been hampered by national interests in the region. “It is about changing operational procedures,” said the AAPA’s Herdman. “Unlike a centralized flow control in Europe, Asia is a different mechanism and is more complex. You have to overlay that with individual institutional arrangements and operational practices to deliver the results.” Despite challenges on several fronts, the region’s airlines continue to grow. The latest AAPA statistics, for September, reported double-digit air freight volume growth, a sign that the freight business, which had been in the doldrums since the global financial crisis, is continuing its strong recovery. Mitigation measures need Freight volumes carried by Asian airlines over the first nine to be proportionate so unnecessary months of the year were up by 10.7% year-on-year. “The global economy is in pretty good shape, with disruption is avoided. There has to encouraging growth in both international air passenger and be a balance. We are doing it for the cargo demand seen this year,” said Herdman. Improvements assurance of the passenger and to serve in global trade sentiment had delivered robust 10% growth in air cargo volumes so far this year, “a welcome their needs. We need global standards development for Asian carriers which account for nearly and global harmonization, but what we 40% of global air cargo traffic”. ■ are seeing contradicts that. What we have is destination security Taxing times Andrew Herdman Despite past exhortations, more taxes have been Association of Asia-Pacific Airlines director general imposed by various countries on international air transport and via air passenger charges, airlines said. Several of them can be categorised as taxes on the sale or use of interna- scarce airport capacity by managing slots in an independent, tional air transport which contravenes International Civil fair and non-discriminatory manner. Aviation Organization (ICAO) policies on taxation, the “Airspace modernization is a global challenge with the Association of Asia-Pacific Airlines (AAPA) director gen- objective of deploying new technologies to improve both eral, Andrew Herdman, said. airspace utilization and further enhance safety performance. A number of governments have recently introduced Failure to make the necessary investments and operational or increased taxes on including Australia’s improvements in Air Traffic Management (ATM) Passenger Movement Charge, Malaysia’s Advance infrastructure and services to keep pace with air traffic Passenger Information (API) charge and ’s growth will lead to adverse consequences for the travelling Embarkation Tax, the association said. public and the wider economy,” the AAPA said. “AAPA renews its call on governments to carefully consider the overall economic effects of putting additional The Association urged governments to think beyond financial strain on the travelling public and on the aviation national borders and commit to the development and industry and to refrain from increasing the burden of avi- implementation of enhanced Asia-Pacific air traffic flow ation levies in any form. The Association goes further in management systems.” calling on governments to avoid the imposition of unjus- Airlines also want improvements to the system of airport tified or discriminatory taxes on international aviation, in slot allocations. In 2017, almost half of all passengers fly contravention of ICAO policies,” it said through 179 slot-coordinated airports, of which 37 are in “AAPA carriers operating in the world’s most compet- the Asia-Pacific, the AAPA said. “Although overall slot itive markets have continuously innovated and adapted coordination is managed in accordance with global their service offerings to satisfy the ever-changing demands principles, a number of governments and slot coordinators of the global travelling public, whilst maintaining the highest safety standards,” said Herdman. have deviated from these processes, adversely affecting the “Whilst these achievements are certainly celebrated, efficiency and predictability of airline operations to the the ever-growing burden of restrictive government legis- detriment of the travelling public. lation, increasing taxes and charges and the lack of shared The association urged governments and slot vision for the industry hold back the potential of Asia’s co-ordinators to allocate slots in an independent, carriers to fully contribute to the social and economic transparent, fair and non-discriminatory manner in line development of the region.” with International Civil Aviation Organisation’s (ICAO)

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O O O O NEWS BACKGROUNDER

Bombardier deal adds heat to subsidy battles

Airbus’ surprise announcement last month that it would take control of Bombardier’s C Series jet program stunned industry observers, including Boeing. Chief correspondent, Tom Ballantyne, reports on the impact the investment will have on the world’s aircraft manufacturers.

he stunning “ Airbus-Bombardier partnership for the C Series program guarantees the futureT of the new airplane, kills off the A319 and thrusts a big stick up Boeing’s tailpipe,” said Scott Hamilton, the founding principal of a North American aviation consultancy, after it was announced that the Toulouse- headquartered manufacturer is buying 50.01% of the Canadian rail and aircraft builder. Certainly, the Airbus investment revives the fortunes of the new aircraft type, particularly in Asia where the C Series’ only customer is Korean Air’s with an order of 10 of the planes. support of Embraer’s KC-390 two heavily state-subsidized enter the United States fully or Just as significant is military aircraft. competitors to skirt the recent partially assembled”. speculation Boeing may counter Boeing has made it clear it findings of the U.S. government. The October agreement was Airbus by forming closer ties with was not happy with the Airbus Our position remains that concluded very quickly, given Brazilian aircraft manufacturer, buy in of the C Series programme. everyone should play by the same the complexity of negotiations. Embraer. Teal group analyst, It accused Airbus and Bombardier rules for free and fair trade to Airbus chief executive, Tom Richard Aboulafia, said: “the of attempting to circumvent a work”. Enders, said discussions with world has two top-tier air framers decision by President Donald The terms of Airbus’ majority Bombardier had started in and two second-tier air framers. Trump’s administration to hit investment included a new C August. Airbus and Bombardier are now the C Series aircraft with import Series final assembly line at There had been reports the allies. This greatly increases the duties of 300%. Airbus’ plant in Mobile, Alabama, Canadian company had been likelihood of a stronger Boeing- The duty imposition where it now assembles A320s. in touch with a small group of Embraer alliance as a response.” followed Boeing’s complaint Whether that decision would Chinese state-owned enterprises Boeing and Embraer already that Bombardier had sold 75 allow the partners to avoid the about a C Series holding, work together on runway safety C Series jets to Delta Air Lines hefty tariff was not clear at press including the Commercial and alternative jet fuels. Their for “absurdly low prices”. The time. A U.S. government fact Aircraft Corporation of China, or partnership has deepened in Seattle plane maker said the sheet on the matter said the COMAC. The Mainland aerospace recent years to include Boeing’s Airbus-Bombardier agreement duties would apply to C Series manufacturer has built China’s commitment to joint sales and is a “questionable deal between jets “regardless of whether they first single aisle commercial

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jet, the C919. Both COMAC about-face for Enders. He halted and Bombardier declined to Ranging from 100 to 150 seats, negotiations for a tie up with comment. Bombardier two years ago. For Bombardier, the Airbus the C Series is highly complementary Analysts viewed the deal as a partnership was a massive to Airbus’ existing single aisle triumph for Airbus that turns the boost to the future of the C aircraft portfolio, which focuses on C Series from an attack on U.S. Series. Bombardier reportedly jobs, as Boeing has complained, spent more than $6 billion in the higher end of the single-aisle to a job creator in Alabama, a key development costs on the jet business (150-240 seats). Republican state. and had to rely on Canadian It is believed the arrival of government assistance to the C Series at Airbus signaled complete the project. aircraft also will benefit from represented 70% of future global the end of the line for the A319, Apart from the Delta deal Airbus’ powerful sales network aircraft demand. which has not posted a sale for of 18 months ago, Bombardier and support throughout the “The world class sales, five years.Airbus is expected to has not received a major order region. marketing and support networks pressure the key B737 MAX 8 for the aircraft. Bombardier chief Bombardier head of Airbus brings to the venture model by squeezing it from below executive, Alain Bellemare, said structured finance, Marc are expected to strengthen with the C Series and from above the joint venture would double Meloche, said several Chinese and accelerate the C Series’ with the popular A321neo. the value of the C Series program, lessors, who were largely commercial momentum. The joint venture gives to $4 billion. looking for sale-and-leaseback Additionally, Airbus’ supply chain Airbus access to a technologically The company’s chief opportunities, had issued term expertise is expected to generate advanced, fuel-efficient design financial officer, John Di Bert, sheets in support of C Series significant C Series production that could form the basis of its said Bombardier had agreed deliveries. cost savings,” Airbus said. challenge in the highest volume to provide $350 million for the New Mainland rules that Airbus’ Enders said: “The C jetliner sector for years to come, C Series in the first 12 months require Chinese airline startups Series, with its state-of-the-art saving billions in development after the close of the deal, with to operate at least 25 smaller design and great economics, is costs. completion of the transaction regional jets before graduating a great fit with our existing single- It will put pressure on Boeing, expected in the second half of to bigger aircraft have fueled aisle aircraft family and rapidly which is only now embarking 2018. hopes of Chinese demand for the extends our product offering into on plans for a new short-haul It is hoped the new C-Series. a fast-growing market sector. model. It has been estimated that arrangement will jump start Under the new shared “I have no doubt our piggy-backing on the C Series orders for the jet in the ownership, Airbus will provide partnership with Bombardier will could save Airbus $10 billion in Asia-Pacific. Founder of Malaysia- procurement, sales and boost sales and the value of this development costs. based Endau analytics, Shukor marketing and customer support program tremendously. Not only Enders said it was too early Yusof, said airlines in the region expertise to the C Series Aircraft will this partnership secure the C to speculate on whether the have held back from placing Limited Partnership (CSALP), the Series and its industrial operations plane would form the basis for orders for the Canadian plane entity that manufactures and sells in Canada, the U.K. and China, the company’s next short-haul because Bombardier’s weak the C Series. but it also will bring new jobs offering, but he acknowledged financial position placed the C To close the deal, Airbus to the U.S. Airbus will benefit it was likely Airbus would take Series program in jeopardy. will acquire a 50.01% interest from strengthening its product cues from the Canadian aircraft’s “Potential buyers of the C in CSALP and Bombardier and portfolio in the high-volume cockpit design and advanced Series are given comfort now Investissement Québec (IQ) will single-aisle market, offering aeronautics. that Airbus will be a major own approximately 31% and superior value to our airline Regardless of the shareholder. It will ensure stability 19%, respectively. Airbus pointed customers worldwide.” development boost for Airbus, in the program,” he said. The has out the single aisle market The agreement was an the near-term ramifications for Boeing may be severe, with Airbus now able to bundle the C Series, which typically seats 108 to 130 passengers, and the larger A320 into a single offering. Also it should not forgotten that China’s C919 is on the horizon and new narrow bodies from Russia and Japan will eventually join the battle to win orders in a market worth some $125 billion a year. ■

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Digging deeper in China China’s drive to become a major commercial aerospace manufacturer is quickening. Europe’s Airbus and North America’s Boeing have joint aviation ventures on the Mainland and Russia is building a wide body jet in partnership with China.

hina and Russia classes; 310 seats in a tight three have agreed on their class plane or a 416 seat all individual roles in economy layout, said Chen. The the production of new aircraft will target airlines in their joint venture China and Russia as well as other CCR929 wide-body commercial Asia-Pacific markets. jet. The Commercial Aircraft “It’s competing models will Corporation of China (COMAC) include Airbus’A330 and A350 will design and manufacture the and Boeing’s B787. Currently, fuselage. Russia’s United Aircraft we are selecting suppliers Corporation (UAC) will devise worldwide,” he said. “By the and produce the wings. The joint end of the year, we are likely venture company is known as the to open tenders for the aero China-Russia Commercial Aircraft engine. Rolls-Royce and General International Co. Ltd. Electric are expected to bid. We The latest development are also trying to develop engines plans for the CR929 - the C and ourselves together with Russia.” R stand for China and Russia, Chairmanship of the joint respectively, 9 is the largest single Zhonshan in eastern Zheijiang. E195-E2 aircraft in 2019 before venture will alternate between number and means long-lasting The joint venture is funded with it deliberates on plans for China. China and Russia every three in Chinese and 2 references the registered capital of US$55 “We may consider it if we have years. Each country will hold four joint partnership – were revealed million. Boeing has invested $33 the right partner and enough seats of the eight board director at the recent Aviation Expo million for a 60% equity in the interest in our jets. In the next 20 seats. China. project and COMAC will pay $22 years, we see potential in China Ironically, the venture may A member of the CR929 million for the remaining 40%. for a little bit more than 1,000 open up more business for design team, Chen Yingchun, And there may be more aircraft of the size that Embraer Airbus in China. The Toulouse announced at the exhibition Sino-foreign joint ventures on manufacturers. We have 80% of manufacturer holds 30% of the and conference that the new the way. Embraer chief executive, that market.” Haifei Manufacturing jet would have a range of up Paulo Cesar de Souza e Silva, China and Russia announced Centre (HMC), a joint venture to 12,000 kilometers and was said in Singapore last month their plans for their joint venture with Chinese partners in Harbin, expected to be flying at customer that the company will consider in May, but gave no details of Northeast China. airlines by 2027. establishing a commercial-aircraft the project at the time. Now they The company manufactures The latest CR929 factory in China down the line. have disclosed the main design composite elevators, rudders, developments were made public Earlier this century, the center will be in Russia but that maintenance doors and belly within a few days of Airbus’ Brazilian company built its E-145 will have its own design fairing parts for the A350 XWB inauguration of its A330 regional jets in Harbin, in a joint office. Each partner will take half and is the sole supplier to Airbus Completion and Delivery Centre venture with the Harbin Aviation of the work and send design for these components. It also (C&DC), a facility built adjacent Group and the Harbin Hafei staff for exchange visits on a assembles elevators and rudders to its successful nine-year-old Aviation Industry Co. Embraer non-scheduled basis between for the single-aisle A320 family. A320 Final Assembly Line. then switched to manufacturing the two project centres. Some In June, the facility delivered In the same week, Boeing its Legacy 650 business aircraft 51% of the aircraft will be made its 1000th A320 rudder. The and COMAC revealed more in Harbin until the plant closed of composite materials. head of HMC, Olivier Guillon details about the U.S. plane in 2016. The CR929 could have four told Orient Aviation in Beijing in maker’s first overseas completion Silva said Embraer would configurations: 280 seats in September that there is potential and delivery center being built in wait for the rollout of its first three classes; 291 seats in two to produce composite parts for

18 / ORIENT AVIATION / NOVEMBER 2017 FRA_4433_2017_Imageanzeigen_SoE_202x273_5mm_R_OrientAviation_RZ01.indd 1 28.07.17 13:13 NEWS BACKGROUNDER

companies other than Airbus, cabin installation, painting, flight are located at each side of the the end of next year. The centre including the CR929. testing and aircraft maintenance. Pacific Ocean. In the past, most will have a maximum delivery “Until now, we did not have COMAC, manufacturer people living in Seattle didn’t capacity of 100 planes a year. a clear direction on this topic, of China’s first narrow-body know about Zhoushan, but now In its most recent 20-year but from the top management jet, the C919, said the project they come to work here. Our forecast, Boeing said China would of Airbus they are now ready to will broaden international completion center has linked require 7,240 planes, valued consider any opportunity,” he cooperation between China and us together,” said COMAC at almost $1.1 trillion, in the said. international manufacturers and president, He Dongfeng. next two decades. Seventy-five Construction of the Boeing/ optimize the environment for Boeing is scheduled to percent of the future fleet would COMAC completion centre the growth of the civil aircraft begin delivering its B737 MAX be narrow bodies as full-service and a separate delivery centre industry in China. planes directly from Zhoushan and low-cost carriers expand their owned by Boeing will carry out “Zhoushan and Seattle to Chinese domestic airlines by regional networks. ■

with Boeing, the consequence of a Delta Air Lines order for 75 Spicejet deal highlights firm and 50 optional C Series CS100 and CS300 aircraft in 2016. Bombardier’s change Bombardier is scheduled to begin delivery of the planes from next year. of fortunes Boeing has alleged Delta is acquiring the aircraft at far below October was a landmark month for Bombardier. It agreed cost and that subsidies from the national Canadian government a Memorandum of Understanding that will give Airbus and the Quebec government majority ownership in its C Series programme. It continued facilitated the Delta order. its battle against threatened U.S. duties for its Delta deal The sale happened as and it confirmed the largest order in its history for the Q400 Bombardier was suffering through huge cost overruns for the C Series turboprop. Chief correspondent, Tom Ballantyne, reports. and at a time when no orders were in sight. The aircraft manufacturer nly days after the will help us further enhance “We are very proud to firm overspent billions of dollars in U.S. Department connectivity to smaller towns and up this agreement with SpiceJet. manufacturing the CS100, and of Commerce cities and help us realize prime It is another demonstration of had to write down $4.4 billion on announced it minister Narendra Modi’s vision the Q400’s unique versatility. the aircraft. would impose up of ensuring that every Indian can This repeat order will not only In 2015, the Canadian Oto 300% in duties on Bombardier’s fly,” said Spicejet chairman and increase the Q400 aircraft fleet in government provided $3.4 C Series jet programme, the managing director, Ajay Singh. the fast-growing regional market billion in support, including $1 Canadian manufacture had some “Spicejet operates India’s in India and in the Asia-Pacific, billion from Quebec’s provincial much better news. India’s Spicejet largest regional fleet and always it will launch the high-density government, which took a 49.5% fully committed to another 50 has been a firm believer in the 90‑passenger model,” said holding in the C-Series in return. All Q400 turboprops, an order that growth story of India’s smaller Bombardier president, Fred of that, Boeing alleged, added up was announced at the Paris Air towns on the country’s aviation Cromer. to huge subsidies. Ironically, Boeing Show in June. map. We will strive to keep the In the meantime, Cromer has always said it does not regard Valued at US$1.7 billion at momentum going in the times to still has to find some sort of the C Series jets as competition. list prices, Spicejet’s order for come.” resolution to the ongoing dispute However, the largest model has the extra-capacity 90 seat Q400 around 100 seats , which positions is the most lucrative deal the it in the same category as some of manufacturer has secured for Boeing’s smaller narrow bodies. the aircraft type. The purchase The penalty imposed by the agreement, which will make the U.S. Department of Commerce on airline the first in the world to Bombardier will only take effect operate the larger seat version, if the U.S. International Trade was for 25 Q400s and purchase Commission (ITC) rules in Boeing’s rights on another 25. favour. A final decision is expected “I am sure this fresh order in early 2018. ■

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SHOOTING FOR STARS Philippine Airlines’ chequered times will soon be behind it as president and chief operating officer, Jaime Bautista, drives the carrier’s fleet and network expansion towards a five star rating in 2020.

By chief correspondent, Tom Ballantyne

22 / ORIENT AVIATION / NOVEMBER 2017 hilippine Airlines (PAL) is facing the same San Miguel management, the airline went downhill. In 2014, threats as its full service rivals across the Tan, whose love of the airline is legendary in the Philippines, Asia-Pacific, including fierce competition from bought back control of the carrier for $1 billion, twice the budget carriers and unprecedented capacity amount Ang had paid for its shareholding two years earlier. being thrown into the market by Gulf airlines, Bautista was immediately restored as PAL’s boss. He Pforcing yields down. quickly set about turning around the carrier. He ordered new, PAL also is severely constrained at its extremely fuel efficient single and double-aisle aircraft, deferred some congested Ninoy Aquino International Airport (NAIA) deliveries and benefitted from the lower fuel prices of recent home base, which is curtailing operational efficiency. Just as years. serious are the negative travel advisories issued by 11 countries As a result, PAL reported profits in 2014 and 2015, that advise their citizens to be cautious about travelling to but capacity adjustments remained necessary. The carrier the Philippines because of a protracted guerilla war centred deferred five of 10 A320 deliveries, initially scheduled to around the southern Phillipines island of Mindanao. arrive in Manila in 2015, as its domestic and regional network Despite these political and practical problems, PAL threatened overcapacity. president and chief operating officer, Jaime Bautista, is Two years on, PAL is on the cusp of one of the most pushing ahead with a fleet modernization plan that will significant fleet revamps in its history. The carrier operates 82 greatly improve profitability and help PAL achieve formal aircraft, including 20 at its domestic budget subsidiary, PAL recognition as a five star airline Express. Its fleet is made up of A320s, A321s, A330s, A340s The biggest challenge for Bautista in reaching his goals and B777s. is Manila’s NAIA. Its four terminals, designed to handle 30 Next year it will begin accepting 30 A321neo and six million passengers annually, last year processed 42 million A350s, which will replace its six AA340s. By December this domestic and international travelers. year, PAL Express will be flying four new Bombardier Q400 “That is why they are all very congested. It causes delays turboprops, part of a 12-strong order for the type. not only for PAL but for other airlines. Operations wise, Two B777-300ERs will arrive at the carrier by the end because of this infrastructure, there are many disruptions and of the year, that will increase the type in the fleet to 10 and many cancellations. We have to address these issues because allow the carrier to replace its A340s from Manila to London. if we want to be a five star carrier our on-time performance Bautista said the A340 is “not really a very good product. It (OTP) should be comparable with other airlines,” Bautista is an older plane and the IFE is not that good. Hopefully, the told Orient Aviation from Manila. B777s can attract more passengers from London”, he said. “If these external factors are not addressed our OTP will In the first quarter of 2018, three A321neos will arrive at be the lowest among our peers. In an AAPA (Association PAL. From June, Rolls-Royce powered A350-900s will begin of Asia Pacific Airlines) report I think we had one of the lowest OTPs. Largely, the reasons for the low ratings were factors beyond PAL’s control: airport congestion, air Gulf carriers want more traffic congestion and, lately, several typhoons that hit the flights from Manila Philippines.” As an interim solution, Bautista has asked the “There is overcapacity in the market. , for government for permission to build a $400 million, 89,000 example, operates 21 flights a week between Manila and and the market is really small,” PAL president square meter terminal (equivalent to 200 basketball courts) and chief operating officer, Jaime Bautista told Orient next to Terminal 2 at NAIA. It will allow PAL to consolidate Aviation. its flights from three of the four airport terminals under “What they do is carry passengers to other destina- one roof. Designed to handle 12 to 15 million passengers a tions. It affects our flights to the UK. The other Middle year and equipped with aerobridges that will take up to 17 East carriers do the same. They take passengers going to wide-bodied and single aisle jets, it will unlock the traffic log Europe, to and even to the U.S. jam, but it is not, as PAL knows, the ultimate solution. “This morning there was news that Emirates wanted “We can make it a world class international terminal. We to call another ASA (Air Service Agreement) meeting could move all our international flights to this terminal and with the Philippines to increase their entitlements to use terminal 2 for domestic operations,” Bautista said. “If we Manila. They operate to and Clark, but they still want Manila which is very congested. Emirates even are allowed to build this annex our code share partners also wants to operate the A380 to Manila.” could operate from the terminal.” Another annoyance is the ability of U.S. airlines such If the government approves the plan, it will be a feather in as and Delta Airways to use wide-ranging the cap of the veteran airline boss, who is well into his second sixth freedom rights through the Philippines, although stint as the airline’s president. He stepped down from the top Bautista said PAL has maintained its market share on job after tobacco tycoon, , sold 49% of PAL to San U.S. routes. “Foreign airlines are getting a good share Miguel brewery and its boss, Ramon Ang. of that market and they are offering very cheap fares,” Management control went with the deal, although Tan Bautista said. remained as PAL chairman once ownership changed. Under

NOVEMBER 2017 / ORIENT AVIATION / 23 COVER STORY

deliveries to Manila. Initially scheduled for next March, to Vancouver and we are looking at Chicago and Seattle.” well publicized production delays at Airbus have delayed the “This aircraft (the A350) can be a good aircraft for planes’ arrival by three months. developing long-haul markets. We will look at Europe. “Then we will receive one each in August, September Maybe in 2019, after we accept the next two A350s coming and December,” Bautista said. The new planes will increase in that year.” The A321neos will clear the way for the launch capacity by around 10% over the A340s, which have 295 of nonstop services to Brisbane, Delhi, Perth, seats against 354 on the A350s. PAL plans to carry 20 million and Sapporo and increase flights to Melbourne and other passengers annually by 2021 with a fleet of 96 aircraft. Asia-Pacific destinations. “We will phase out 18 older aircraft and take delivery of PAL, like many of the region’s carriers, has been hit by 27 brand-new airplanes,” he said. market conditions and competitive pressures. While it has The arrival of the long-haul aircraft not only brings been doing better than many of its peers, Bautista said it is significant economic benefits to PAL, it will allow the carrier “in the same boat” as everyone. The carrier is seeing “ever to fly non-stop Manila-New York at full capacity. “We should higher load factors compared with last year, but we are not be able to carry the required number of passengers without making money”, he said. doing a tech stop, especially returning to Manila, which is “The next quarter will be a difficult one for us because against the wind,” Bautista said. “We also will fly this aircraft it’s the low season. Hopefully, Christmas will generate more

24 / ORIENT AVIATION / NOVEMBER 2017 to speed up passenger processing and aircraft turnaround times. PAL’s trans-Pacific capacity, “We are mounting new flights from Cebu to Bangkok already increased by nearly in December, adding to flights from Cebu to Japan, Korea and Singapore. We did fly Cebu-Los Angeles, but we have 30% in the last 12 months, temporarily stopped the route until we take delivery of the should expand another 50% A350. as Manila to New York and “It’s another destination the A350 can serve. We tried the A340 on that route, but coming back we had to stop in Toronto are upgraded to nonstop, many times. We decided to wait for the right plane Cebu-Los Angeles is resumed and make the route a profitable operation.” and Chicago, Houston or One market that is doing well for PAL is China. “Shanghai is doing very well. In Xiamin we are doing well. Seattle are launched Hong Kong and Macao are good markets, but is a very challenging market for us,” he said. Jaime Bautista “We have charter flights to Chengdu and flights from Philippine Airlines president and chief operating officer other smaller Chinese cities to (on Western Vasayas island) where Chinese tourists go on to Boracay. On the other hand, we are experiencing some challenges in Japan. Flights are being cancelled because of the Mindanao [guerilla war] situation.” More and new planes are only part of PAL’s product development. It is spending $80 million reconverting eight A330s from an all economy 414 configuration to 311 seat business, premium economy and economy cabins. “We have refurbished four of the A330s. They are flying to Melbourne, Sydney and Honolulu. With the completion of the remaining four by the end of this year we should be able to introduce this aircraft to Japan, Korea and and really improve the product,” said Bautista. With the arrival of the new fleet, this reconfiguration is part of Bautista’s goal of winning five stars from airline ratings group Skytrax, which was expected to conduct an audit of the airline at press time. “Our timetable is to get four stars this year. Five stars are really difficult. We are giving ourselves until 2020 to get the fifth star. I am very optimistic that we should have a fourth star this year. We have implemented so many improvements in service, our systems and the fleet, including the refurbishment and reconfiguration of the A330s. And once the and A350s arrive, that will be a big help,” revenue and [we will] report a small profit.” Bautista said. PAL has reported a US$32 million net loss for the first There is another potential development on the horizon half of this year, to June 30, a reversal of a $92.2 million for PAL: selling equity to a foreign investor. Bautista was profit for the same period a year ago. Fuel costs increased coy about suitors when he spoke to Orient Aviation, but he 73.6% and the carrier operated additional flights during confirmed PAL “is still in discussion” with possible interested the period. Losses were recorded despite a 17.7% increase in parties. revenue in the six months, to $542.4 million, up from $460.8 “It’s not easy to find foreign investors at this time, but we million a year ago. are talking to one group who have really given a sign of good Passenger and cargo growth, increased ancillary revenue interest. They have investments in other airlines,” he said. and more flights and new routes pushed up cash flow, but “The biggest challenge for us is our ability to costs rose 32% outweighing the cash flow improvement. grow. We have ordered so many aircraft in the hope PAL has been doing its share to decongest NAIA while that the government will improve airport and aviation stimulating air travel to the Philippines. “We are building up infrastructure,” he said. a new network of local and regional flights from Clark, Cebu, “The development of this infrastructure is quite slow. So , Davao, Caticlan and Kalibo,” said Bautista, how should we maximize the utilization of our planes and how who added PAL continued to invest in the latest technology can we efficiently operate these aircraft in this situation? ■

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Airbus takes control of services in India. The two MROs will offer line maintenance and ancillary services at several Sepang Aircraft Engineering Indian airports to domestic and international airlines as well as engineering training. Airbus, which has partially owned Sepang SIAEC CEO, Png Kim Chiang, said: “We Aircraft Engineering (SAE) since 2011, has are delighted to enter into this collaboration bought all remaining shares in the Kuala with AIESL to expand in the Indian market. It Lumpur MRO. As a fully owned Airbus will allow SIAEC to offer our integrated MRO subsidiary, SAE is part of the Airbus Customer and Technical Support solutions to airline entry into service. When these engines have Services network and is a key element for customers.” to be overhauled, our customers will have a Services by Airbus growth in the Asia-Pacific. AIESL CEO, HR Jagannath, said: “The choice.” The first LEAP-A powered A320neo SIAEC collaboration will enhance our services flew with Turkey’s in August to existing airline customers and expand our last year. At press time, more than 20 airlines market exposure to domestic and foreign are operating aircraft equipped with LEAP airlines operating in and out of India.” AIESL, engines. established in 2004, is 100%-owned by Air CFM is a 50/50 joint venture between India and is the biggest MRO in India. ■ GE and Safran Aircraft Engines and is the world’s largest manufacturer of commercial aircraft engines. ■ Airbus selects Nordam for A320neo P&W engine ExxonMobil establishes build up scholarship at Chinese

Airbus and family-owned Nordam have University agreed that the U.S. aerospace manufacturer will supply the engine build up system for Multi-national oil conglomerate, ExxonMobil, A320neos equipped with Pratt & Whitney has established a scholarship program with PW1100G engines. Tianjin’s Civil Aviation University of China The engine build up system integrates (CAUC) for students of aviation, beginning “Since its creation in 2007, SAE has the engine to the aircraft by a series of this year. The multi-year bachelor program established a strong reputation in the MRO electrical, hydraulic, pneumatic, fire will support candidates intending to follow market for on-time and reliable performance, detection and bleed systems. Nordam will a career in engine propulsion and aviation said Head of Services by Airbus, Laurent design, integrate and deliver the specified systems. Martinez. “Our ambition is for SAE to be a combination of wires, brackets, anti-ice A CAUC panel will competitively select leading MRO in the region by becoming an valves, tubing and other components to the scholarship winners from a pool of innovation flagship for Airbus commercial Airbus Final Assembly Lines in Toulouse, candidates that must been in the top 10 per aircraft.” Hamburg, Tianjin and Mobile. ■ cent of their high school graduation class SAE has a floor area of 50,000 square and have also achieved reached a sufficient metres, two hangars and a staff of 500. One hangar can accommodate six single aisle European MROs to service aircraft or two wide bodies. The second CFMI LEAP engines hangar, opened in September, has the space to complete maintenance checks on two Engine manufacturer, CFMI, has awarded A320s at any one time. European headquartered MROs, AFI KLM SAE also provides overhaul of aircraft E&M and Technik contracts components and spare parts and technical for overhaul and maintenance of its LEAP support for Malaysia A400M military aircraft. ■ propulsion product line. CFM has three facilities in the U.S., Brussels and France that have LEAP capability to support the engine’s SIA Engineering and Air entry into service. The third party shops will India Engineering sign MoU provide additional LEAP-1A and LEAP-1B capacity as the engines enter service with SIA Engineering Company (SIAEC) and airline customers. Engineering Services Ltd (AIESL) CFM International president and CEO, have signed a non-binding Memorandum Gael Meheust, said last month: “We have just of Understanding to collaborate on MRO passed the one year anniversary of the LEAP

NOVEMBER 2017 / ORIENT AVIATION / 27 INDUSTRY ADDENDUM

competence in English to study the course. PEOPLE Industry forecasts agree there will be a need for 260,00 new aviation technical staff to Flight safety promotes Guggenheim Fellow. Additionally, Goodwin support airline expansion in the next two has a master of arts in national security decades. distinguished air force and strategic studies from the U.S. Naval “ExxonMobil is a trusted and reliable veteran to vice president College and was a senior executive fellow supplier of high quality lubricants and fuels simulation at Harvard University’s John F. Kennedy to the aviation industry,” said ExxonMobil School of Government. vice president of aviation and marine GBU, Global flight training company, FlightSafety FlightSafety International is a Exxon fuels and lubricants, Nancy Carlson. International, has appointed Scott professional aviation training company and “In this instance, our efforts to promote Goodwin from general manager simulation a supplier of full simulators, visual systems excellence in aviation go well beyond the to vice president simulation at the New and displays to commercial, government tarmac and into the classroom. We look York headquartered group. Goodwin and military organisations. The company forward to seeing the impact these students joined FlightSafety International as deputy provides 1.4 million hours of training will have on our industry.” director special projects in 2014 and every year to pilots, technicians and other CAUC president, Doug Jiankang, was promoted to executive director in aviation professionals from 167 countries said: “We aspire to have a progressive 2015. He will have overall responsibility and independent territories. ■ collaboration with ExxonMobil and for the design, manufacture and support believe this award will help contribute to of FlightSafety’s full flight simulators the development of the Chinese aviation and other advanced technology training Rapid move up the ranks industry.” devices. for AJW Group’s Tom De Founded in 1951, the CAUC operates Geytere under the control of the Civil Aviation Administration of China and is estimated to Global component and repair company, provide up to 20% of key aviation personnel the AJW Group, has announced Tom De working in China’s aerospace industry. Geytere has broadened his role at the It has working ties with ICAO, IATA, Boeing, company to chief sales officer. Previously, Airbus, the major engine manufacturers and he was managing director of the group’s industry research centres across the globe. ■ Singapore office. De Geytere, who spent more than four years running Bulgarian carrier, AirVia, will AAR explores ways to oversee parts and sales support and the implement blockchain group’s engine divisions as well as leading business development in Asia, Africa, the Application of the new technology blockchain “We are pleased to promote Scott,” Middle East and the Commonwealth of is moving to the aviation MRO industry, said FlightSafety executive vice president, Independent States. reports North American industry media. Ray Johns.“He has the experience, “Since joining AJW, Tom has developed “Currently, we are investigating ways to leadership qualities and business skills strong relationships with our customers in ensure part traceability and compliance using required to strengthen FlightSafety’s the Asia-Pacific. We are experiencing high distributed ledger technology, which is called position as a world leader in the design, demand in these growth markets. It was a blockchain,“ said AAR senior vice president manufacture and support of simulation natural decision for us to deploy his skill for intelligent solutions, Andy Schmidt. products.” set across the company so it benefits our This is a long way from the present Goodwin is a highly experienced pilot customers more widely, AJW president system where everything is done manually with more than 3,500 hours in a variety of and CEO, Christopher Whiteside said. ■ using paper, he said, with all customers aircraft. He served with the U.S. Air Force required to have paper documentation to for 30 years, retiring in 2013 with the trace a part. “In simple terms, blockchain rank of brigadier general. He was director requires consensus among trusted parties to of operations for the U.S. Air Mobility permit transactions. It allows trusted parties Command and oversaw the training and to share compliancy data and improve safety, evaluation of more than 20,000 flight efficiency and waste in the MRO industry.” crew personnel operating 1,300 aircraft Schmidt said AAR is looking at worldwide. SafeFlights, which is developing a He holds a bachelor of aeronautical consortium blockchain where OEMs, MROs, engineering from the U.S. Air Force suppliers, airlines and governments can Academy and a master of science in participate and update blockchain as a part mechanical and aerospace engineering moves from entity to airframe.” ■ from Princeton University where he was a

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RC_See the Future_Orient Aviation_Nov2017_202x273.indd 1 10/18/17 7:46 AM INDUSTRY INSIGHT SPECIAL REPORT ASIA PACIFIC AIRCRAFT ENGINES: AN UPDATE Engine business booms in Asia-Pacific

The Asia-Pacific will to lead the world in aircraft engine orders and deliveries Single aisle engine market accelerates in the next two decades. Demand for engines powering single aisle aircraft Pratt & Whitney have customers are “not happy” remains strong, but the appetite for very spent more than US$10 with the situation. IndiGo billion and more than 20 Airlines president, Aditya large aircraft engines is diminishing. years to develop the geared Ghosh, said in August: “We turbofan (GTF), which uses continue to have a high an internal gearbox to slow number of engine removals Dominic Lalk reports down the fan. Rolls-Royce and sufficient spare engines is committed to a geared have not been available. design, the UltraFan, by 2025. Regrettably, there have GE and CFM are working been days when we have on their own proprietary had to ground as many as solutions. nine A320neo due to lack of The GTF is being sold on spare engines.” He added the its ability reduce fuel burn operational disruptions were by 16%, lower emissions by “quite challenging”. 50% and reduce noise by In contrast, CFM has sold 75% compared with past ten times as many LEAPs for generation engines. The Airbus’ A320neo Family as its engine manufacturer has had rival. But Pratt & Whitney can serious teething problems still recover its lost ground. he most recent global biggest and most expensive with the GTF, which has Of the approximately 5,200 fleet forecasts of engine in the market. It has lost it business to CFM’s A320neo on order, 2,200 will Airbus and Boeing a unit cost of US$41 million, competing LEAP engine. be powered by LEAP and give the “Big Three” which extrapolates into a market Despite Pratt & Whitney’s 1,500 will have GTFs, which engine manufacturers valued at US$940 billion for best efforts, some of its leaves 1,500 aircraft without Tthe reason to dream big. large turbofans over the forecast The Asia-Pacific will require a period. Between them, the cost minimum of 29,500 new aircraft of the engines needed for the in the next two decades, up to two main aircraft sectors of Mixed fortunes for wide body propulsion 60,000 turbofans for single aisle the market will be a staggering lines and up to 23,000 engines US$1.81 trillion in engine for larger wide body aircraft. revenue. Revenue from spares and The single aisle engine sector replacements will come in over is dominated by Pratt & Whitney airlines’ initial purchases of the and the CFM joint venture. Rolls- engines. Royce has a firm grip on engines At a price tag of US$12 for wide bodies, although its two million for Pratt & Whitney’s American rivals are competing geared turbofan (GTF) and for business in that sector. US$14.5 million for GE/CFM The Engine Alliance and International’s rival LEAP, the International Aero Engines joint single aisle engine market should ventures appear to have peaked. be worth up to US$870 billion They are not pursuing new to 2036. turbofan lines, but have said GE’s GE9X, which will spare parts sales are still strong exclusively power the wide and that they are expected to body B777X programme, is the remain so for the next decade. ■

30 / ORIENT AVIATION / NOVEMBER 2017 Engine business booms in Asia-Pacific Single aisle engine market accelerates

an engine choice at press of higher temperature time. materials and higher GTFs are the exclusive efficiency components,” engines for the Bombardier Pratt & Whitney said. C Series, Mitsubishi Regional The “ultra-high bypass Jet (MRJ) and Embraer’s fan design” is said to have a second-generation E-Jets. “significantly higher” bypass Boeing’s competing B737 ratio than the 12.2:1 ratio in MAX series is powered solely the current PW1100G, the by the LEAP. company said. More than 175 hours “The success of this of ground testing have ground test is an important been completed for the step in taking our GTF engine next-generation GTF, which technology to the next is now in development. level,” said Pratt & Whitney GTF will compete against series—the most widely It promises another 2% vice president of technology a higher thrust version of used engine in the industry. reduction in fuel burn. and environment for the CFM’s LEAP engine. The most The CFM56 series flies “Opportunity exists to engine market, Alan Epstein. powerful LEAP produced with more than 550 airlines. further reduce the fan “We are working to make today, a -1A for the A321neo, About 2,400 aircraft are pressure ratio and combine sure the next generation GTF is rated at 31,160lb thrust. powered by the series at it with a short inlet. We are engine—already a game- CFM is confident it can push any one time. The new LEAP looking at how to further changer—remains on the it to 50,000lbs for future offers 16% efficiency savings optimize the work split cutting edge of performance A320neo and B737 MAX by using more composite through the engine. We are and sustainability.” series, with a design based materials and achieving also exploring development The next generation on the existing CFM56 higher bypass ratios.

pressure turbine that will Mixed fortunes for wide body propulsion deliver at least 20% better fuel burn and CO2 emissions The wide-body engine Emirates Airline in 2019. the manufacturer is relishing than the first-generation market is dominated by GE’s Certification testing will the “very smooth entry into Trent engine. CF6 that equips A330s, the commence in May. With service” of the Trent XWB The same core is also part GE90 for B777s and the GEnx almost 700 GE9X engines with the A350 programme of the UltraFan engine design for the B787s. Rolls-Royce on order, the GE9X will be and also preparing for the that will be available from Trent 1000s are on B787s and in the 100,000lb thrust class next-generation engine 2025. It will deliver power for the Trent XWB powers A350s. and will have the industry’s scheduled for entry into high by-pass ratio engines The Trent 700 propels the largest front fan at a 134” service from 2025. with a geared design similar A330ceo series and Pratt & diameter. For Rolls-Royce, the to the GTF. Whitney’s PW4000 family of The engine will be 10% future is its Advance and Just months after trials engines is manufactured for more fuel efficient than the UltraFan engine designs, with began Rolls-Royce said testing A330s and B777s. current generation B777 the first run of its Advance3 on the power gearbox has GE is focusing on the GE90. It is scheduled for demonstrator engine in the broken the world record as development of the GE9X flight testing on GE Aviation’s works. The demonstrator the most powerful aerospace for the B777X series, which flying testbed by year end. will test a new engine core, gearbox in existence when is scheduled to enter At the Derby headquarters attached to a Trent XWB fan it reached 70,000hp in tests commercial service with of Rolls-Royce in the U.K., system and a Trent 1000 low at its dedicated facility in

NOVEMBER 2017 / ORIENT AVIATION / 31 INDUSTRY INSIGHT SPECIAL REPORT ASIA PACIFIC AIRCRAFT ENGINES: AN UPDATE

Dahlewitz, Germany two success of the next generation most popular engine choice wide body jet that would sit months ago. of Rolls-Royce jet engines.” for the A330ceo. The Trent between the B737 MAX 10 In partnership with Rolls-Royce has supported 7000 will improve specific fuel and the B787-8. The NMA will Liebherr-Aerospace, the U.K. three “first flights” in the consumption by 10%. be equipped with composite engine maker is developing last twelve months: the Trent All ‘Big Three’ engine wings and fuselage. Qantas manufacturing capability and XWB-97 on the A350-1000, makers confirmed to Orient Airways said in October it capacity for the UltraFan at the Trent 1000 TEN for B787- Aviation they were talking was “very keen” on the NMA. its Aerospace Transmission 10 and the Trent 7000 for the with Boeing about the Other Asia-Pacific airlines Technologies joint venture. maiden flight of the A330neo potential supply of engines have expressed a strong Rolls-Royce’s chief technology on October 19. for the under-study “New interest in the proposed officer, Paul Stein, said: The 68-72,000lb thrust Midsize Airplane” (NMA) plane. Boeing’s NMA will “Setting this record is a Trent 7000 delivers a that could enter commercial compete with Airbus’ great achievement for the step-change in performance service from 2025. A321neoLR, a fast-selling team. Our Power Gearbox compared with its predecessor, The focus will be on a aircraft that will be available technology is central to the the Trent 700, which is the 250-270-seat, 5,000nm range next year.

Electric engines 3D printing revolution on horizon The industry is looking more seriously at the viability of electric and hybrid-electric propulsion aircraft. Electric propulsion is a reality, but is restricted to powering very small aircraft. Airbus has outlined a technology roadmap that leads to a narrow body-sized hybrid electric demonstrator in about 20 years. Boeing has teamed up with JetBlue’s Technology Ventures to fund Zunum Aero, which is designing a hybrid-electric business aircraft and a 50-seat regional jet to fly in the early 2020s. “Gradual progression of electric and hybrid-electric aircraft from small planes to GE Aviation adopted an out-of-the- chair and GE Aviation president and CEO, large planes will require technology advances box approach to engine technology David Joyce, decided to take up 100% of in multiple areas, which include energy stor- from 2003 when the giant manufacturing Morris Technologies. age, electrical machines, power transmission, conglomerate developed a new fuel In 2015, GE launched the GE93, a power electronics, control systems, materials, nozzle, which was critical to reducing turboprop engine produced with more thermal management and multi-scale model- fuel burn and emissions. But turning than one-third additive components. ling tools,” said deputy director for research the game changing design into reality Additive design processes have enabled and engineering at NASA’s Glenn Research required the welding and braxing together its engineers to make parts with improved Center in Cleveland, Dr Ajay Misra. of 20 parts. weight and durability that have improved GE began a top secret project with fuel efficiency and performance Morris Technologies to produce the fuel capability. injectors of the fuel nozzle using 3D print- By 2016, these experiences led GE to ing – or additive manufacturing. Morris commit to being a “vertical” business as a employees had to sign confidentiality provider of additive machines, materials agreements if they were working the and application engineering expertise to nozzle prototype. several industries, from aerospace and Today, that fuel nozzle sits in the automotive to medical and luxury goods. engines of the LEAP family. The GE/Morris At Rolls-Royce, additive manufactur- Technologies partnership developed the ing is used to produce larger aircraft parts. 3D printing process to mass-produce Rolls built the world’s largest 3D-printed the 19 fuel nozzles in each LEAP engine, aero engine structure, the front bearing with the interiors made additively of housing, for the Trent XWB-97 engine cobalt-chromium, the same material used that powered the Airbus A380 flying test to make hip replacements. In prototypes, bed in November 2015. The front bearing GE found the material wildly capable, housing used in the test flight was 1.5 which is when the then CEO of GE, Jeff metres across, half a metre deep and Immelt, and current GE Aviation vice contained 48 titanium aerofoils.

32 / ORIENT AVIATION / NOVEMBER 2017 BOSTON | SHANNON | LONDON | SINGAPORE

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Engine market enjoying unlimited growth

In Airbus’ latest global market foresees demand for 8,690 twin valued at US$6.1 trillion, with a 5% increase over its 2016 forecast, the Toulouse manufac- aisles and 1,410 very large aircraft single aisles the fastest growing forecast. The wide body segment turer raised its 20-year forecast (VLA) such as the A380 or B747-8. market thanks to low-cost carrier will require 8,210 passenger from last year’s 33,070 to 34,900 Boeing was more optimistic. demand and air passenger expan- aircraft, with a wave of potential jets, valued at US$5.3 trillion. The U.S. manufacturer predicted sion in Asia’s emerging nations. It replacement demand beginning Seventy one per cent (24,810) of 41,030 new airplanes will be estimated the Asia-Pacific would in early 2020 – a significantly lower the aircraft will be single aisles. It needed in the next two decades, need 29,530 new narrow bodies, tally than the Airbus forecast.

GE Rolls-Royce CF34: 3, 252 aircraft with 261 operators Trent installed base CF6: 1,649 aircraft with 209 operators (in service and in storage) GE90: 1,112 aircraft with 73 operators 2016 year end = approx 1400 engines GEnx: 481 aircraft with 51 operators 2025 year end = approx 3300 engines

CFM Asia Pacific Region (including China) Aircraft In service Aircraft On order CFM56-5B powered 1293 67 CFM56-7B powered 2310 95 LEAP-1A powered 32 793 LEAP-1B powered 7 1022

Pratt & Whitney Engine Sum of number Engine Sum of number Engine Sum of number Engine Sum of number types of engines types of engines types of engines types of engines

GP7200 40 PW1000G 114 6 180 Widebody Jets 40 Narrowbody Jets 106 Hong Kong Airlines 12 China Eastern Airlines Jiangsu 32 Korean Air 40 2 32 336 ANA- 10 Jin Air 8 Airlines 28 JT3D 4 China Southern Airlines 14 Korean Air 142 Citilink 12 Government of Australia 2 Narrowbody Jets 4 GoAir 16 Lion Air 4 Malaysia Airlines 36 Hong Kong Express Airways 36 Indian Air Force 4 Hong Kong Express Airways 6 IndiGo 50 MIAT - Mongolian Airlines 2 IndiGo 220 4 Republic of Korea Air Force 4 Jetstar 122 JT8D 82 4 10 Jetstar Asia 36 Narrowbody Jets 82 Regional Jets 8 Silk Road Cargo Business 2 Jetstar Japan 42 Afghan Air Force 3 Mitsubishi Aircraft Corporation 8 Cargo 28 Jetstar Pacific 34 AIRFAST Indonesia 8 16 Juneyao Airlines 30 Astro Air International 2 PW2000 18 Airlines 10 Nepal Airlines 4 Express Air 2 Narrowbody Jets 18 PAL Express 10 Far Eastern Air Transport 16 Asia Pacific Airlines 4 V2500 2398 Pan Pacific Airlines 4 FitsAir 2 Raya Airways 2 Narrowbody Jets 2398 Philippine Airlines 38 Indian Air Force 8 Tajik Air 2 Air Astana 26 Philippines AirAsia 4 Air Bishkek 2 Indonesian Air Force 8 Uzbekistan Airways 10 12 Air 46 Jayawijaya Dirgantara 6 Scoot 46 PW4000 576 Air Calin 4 Shaheen Air International 26 10 Widebody Jets 576 110 Airlines 78 My Indo Airlines 2 Air Astana 6 Air 8 Sichuan Airlines 168 Raya Airways 6 Air China 20 Air India 30 SilkAir 26 Sigma Airlines 3 12 Air 34 Sky Angkor Airlines 4 Sky Capital Airlines 2 8 Air New Zealand 60 SriLankan Airlines 10 South East Asian Airlines (SEAIR) 2 Air India 16 Air 8 Thai Smile 40 Vision Air International 2 2 54 Tianjin Airlines 34 ANA-All Nippon Airways 60 Avia Traffic Company 4 Tigerair Australia 28 JT9D 12 Asiana Airlines 50 46 Tigerair 20 Widebody Jets 12 Biman Airlines 2 Bassaka Air 2 114 Jet Asia Airways 2 Cathay Pacific 24 Angkor Air 6 Regional Airlines 4 Kam Air 2 4 Capital Airlines 80 26 Uni-top Airlines 8 China Southern Airlines 60 46 (China) 26 Grand Total: 3244

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