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Chinese Aviation Revealed Fly by Wire How Quick a Recovery? U.S./UK Hypersonic Thresher for All
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The U.S. Marine Corps is recommending deactivation of three 32 aviation units.
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DEPARTMENTS 5 | President’s 12 | Inside Business Letter Aviation 6 | FeedBack 13 | Airline Intel 7 | Who’s Where 54 | Classified 8 -9 | First Take 56 | Contact Us 10 | Going Concerns 56 | Aerospace Calendar
COMMERCIAL AVIATION 21 | The aerospace supply chain’s worst falloff ever FEATURES 39 | FARA downselect gives U.S. Army 23 | Mitsubishi Aircraft flies the first armed scout configuration options SpaceJet of revised design 14 | Hypersonic Threshold The UK confirms a new hypersonic 40 | As pandemic rages, ULA delivers 24 | Domestic networks provide a weapon project with the U.S. final AEHF satellite into orbit safety net for Asian carriers leveraging decades of expertise PROPULSION 24 | Chinese airline domestic capacity 18 | Life Support 42 | Hydrogen gains renewed interest, responds to policy Differing levels of support for the but challenges remain SPACE world’s airlines and aerospace HYPERSONICS 28 | OneWeb goes bankrupt after companies threaten to distort 44 | HyperSpace unveils hypersonic prime backer exits amid pandemic competitive dynamics engine concept tests 30 | NASA picks tops priorities as its 26 | Point/Counterpoint 46 | Aircraft developer Hermeus tests a centers shut down Will China’s aviation sector scaled engine to Mach 5 dominate or recede after the DEFENSE COVID-19 crisis passes? UNMANNED AVIATION 34 | New contenders emerge for the 50 | USMC assesses eVTOL potential U.S. Army’s intel fleet 32 | Pacific Pivot in unmanned air logistics The U.S. Marine Corps’ proposed 36 | GA-ASI adapts the Gray Eagle for force design changes may affect CARGO the Future Vertical Lift future aircraft buys in the next decade 52 | Cargo operators work together for 37 | South Korea’s KF-X radar sustainability gains prototype nears ground testing 48 | Fly by Wire for All U.S. startup Skyryse develops a EDITORIAL 38 | Tempest accelerates toward end- FBW retrofit for a wide range of 58 | A straightforward code of conduct of-year decision milestone light aircraft and helicopters for the aviation industry’s recovery
ON THE COVER DIGITAL EXTRAS The U.S. Marine Corps has proposed a massive force structure shift, the largest for the amphibious force in nearly Access exclusive online two decades, as it focuses attention on the Pacific. A number of squadrons and groups would be deactivated, and features from articles the planned purchase of aircraft including the CH-53K, being developed to replace the CH-53E, could be curtailed. accompanied by this icon. Pentagon Editor Lee Hudson’s report begins on page 32. U.S. Navy photo. Aviation Week publishes a digital edition every week. Read it at AviationWeek.com/AWST
AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 3 Editor-In-Chief Joseph C. Anselmo [email protected] Executive Editors Jen DiMascio (Defense and Space) [email protected] Jens Flottau (Commercial Aviation) [email protected] Graham Warwick (Technology) [email protected] Editors Lindsay Bjerregaard, Sean Broderick, Michael Bruno, Bill Carey, Thierry Dubois, William Garvey, Ben Goldstein, Lee Hudson, Irene Klotz, Helen Massy- Beresford, Jefferson Morris, Guy Norris, Tony Osborne, Bradley Perrett, James Pozzi, Adrian Schofield, Lee Ann Shay, Steve Trimble Chief Aircraft Evaluation Editor Fred George Director, Editorial and Online Production Michael O. Lavitt Associate Managing Editor Andrea Hollowell Art Director Lisa Caputo Artists Thomas De Pierro, Rosa Pineda, Colin Throm Copy Editors Jack Freifelder, Arturo Mora, Natalia Pelayo, Andy Savoie Production Editors Audra Avizienis, Theresa Petruso Contributing Photographer Joseph Pries Director, Digital Content Strategy Rupa Haria Content Marketing Manager Rija Tariq Data & Analytics Director, Forecasts and Aerospace Insights Brian Kough Senior Manager, Data Operations/Production Terra Deskins Manager, Military Data Operations Michael Tint Editorial Offices 2121 K Street, NW, Suite 210, Washington, D.C. 20037 Phone: +1 (202) 517-1100 GoGo beyondbeyond thethe newsnews ofof thethe 605 Third Avenue, New York, N.Y. 10158 Phone: +1 (212) 204-4200 dayday withwith AviationAviation WWeekeek Bureau Chiefs Auckland IntelligenceIntelligence Network’sNetwork’s Adrian [email protected] Market Briefi ngs. Beijing Bradley Perrett [email protected] Cape Canaveral These sector-specifi c intelligence Irene Klotz [email protected] Chicago briefi ngs empower busy Lee Ann Shay [email protected] executives to stay-ahead of the Frankfurt market, identify opportunities and Jens Flottau [email protected] Houston drive revenue. Mark Carreau [email protected] London Tony Osborne [email protected] Los Angeles LEARN MORE: Guy Norris [email protected] aviationweek.com/marketbriefi ngs Lyon Thierry Dubois [email protected] Moscow Maxim Pyadushkin [email protected] Paris Helen Massy-Beresford [email protected] Washington Jen DiMascio [email protected] Wichita Molly McMillin [email protected]
President, Aviation Week Network Gregory Hamilton Managing Director, Intelligence & Data Services Anne McMahon
4 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST P C
Editor-In-Chief Joseph C. Anselmo [email protected] Executive Editors Jen DiMascio (Defense and Space) [email protected] How can we help you navigate, recover and grow? Jens Flottau (Commercial Aviation) [email protected] Graham Warwick (Technology) [email protected] Editors Lindsay Bjerregaard, Sean Broderick, The daunting challenges that currently face humanity will Michael Bruno, Bill Carey, Thierry Dubois, William Garvey, Ben Goldstein, Lee Hudson, Irene Klotz, Helen Massy- leave an indelible mark, but there will come a point when Beresford, Jefferson Morris, Guy Norris, Tony Osborne, the COVID-19 crisis begins to fade and we adjust to life in Bradley Perrett, James Pozzi, Adrian Schofield, Lee Ann Shay, Steve Trimble the aftermath of this pandemic. Chief Aircraft Evaluation Editor Fred George The Aviation Week Network has helped to keep our industry abreast of global Director, Editorial and Online Production Michael O. Lavitt Associate Managing Editor Andrea Hollowell developments during every major crisis since we launched the fi rst edition of Art Director Lisa Caputo Aviation and Aeronautical Engineering on Aug. 1, 1916, in the middle of the Artists Thomas De Pierro, Rosa Pineda, Colin Throm World War I. Copy Editors Jack Freifelder, Arturo Mora, And today — more than at any point in our history — the Aviation Week Natalia Pelayo, Andy Savoie Network is uniquely positioned to help the world’s aviation community make Production Editors Audra Avizienis, Theresa Petruso sense of seemingly overwhelming challenges. Contributing Photographer Joseph Pries Director, Digital Content Strategy Rupa Haria Recent additions of CAPA, ASM and Routes to our team mean that we have the entire information spectrum covered in Content Marketing Manager Rija Tariq all regions, from daily news to detailed analysis from the industry’s most experienced and connected team of experts, a Data & Analytics unique portfolio of data and forecasts and all forms of face-to-face and digital events. The Aviation Week Network can Director, Forecasts and Aerospace Insights Brian Kough help the industry through the coming weeks and months by supporting situational awareness, critical decision-making Senior Manager, Data Operations/Production and, ultimately, a return to growth. Terra Deskins Manager, Military Data Operations Michael Tint We are committed to action and are introducing more robust ways for you to know, predict and connect as we all Editorial Offices navigate the crisis and position for the future. 2121 K Street, NW, Suite 210, Washington, D.C. 20037 Phone: +1 (202) 517-1100 Know. Predict. Connect. 605 Third Avenue, New York, N.Y. 10158 GoGo beyondbeyond thethe newsnews ofof thethe The fi rst step has been about situational awareness as the crisis unfolds and morphs every day around the world: Phone: +1 (212) 204-4200 dayday withwith AviationAviation WWeekeek Bureau Chiefs ● So far, our global team of aerospace journalists and analysts have produced more than 4,000 articles, podcasts IntelligenceIntelligence Network’sNetwork’s Auckland and news briefs covering the crisis, diving deep to help each of our customer communities: Air Transport, Adrian [email protected] Defense & Space, Aerospace, Business Aviation and MRO. Market Briefi ngs. Beijing Bradley Perrett [email protected] ● We have launched a curated landing page to help you navigate that content across our portfolio along with the Cape Canaveral fi rst of an expert-webinar series to share predictions, advice, viewpoints and best practices. These sector-specifi c intelligence Irene Klotz [email protected] Chicago See the landing page: AviationWeek.com/COVID19 briefi ngs empower busy Lee Ann Shay [email protected] executives to stay-ahead of the Frankfurt Register for our webinar series: AviationWeek.com/COVID19/webinar market, identify opportunities and Jens Flottau [email protected] Houston At the same time, we are ramping up our analytical and forward-looking intelligence and data. Finally, we are drive revenue. Mark Carreau [email protected] pursuing innovative ways to reestablish buyer-seller relationships in the absence of face-to-face platforms London across the aviation community. Tony Osborne [email protected] Los Angeles There is much, much more to come. Is it helpful? What can we do better? LEARN MORE: Guy Norris [email protected] aviationweek.com/marketbriefi ngs Lyon I’d love to hear from you. Thierry Dubois [email protected] Moscow As a recent Aviation Week editorial said: “This is without doubt the greatest crisis aviation has faced since the dawn Maxim Pyadushkin [email protected] of the commercial jet age more than six decades ago....The coming days will be dark, but rest assured the industry Paris will recover and once again prosper.” The Aviation Week Network is proud to stand alongside our partners during this Helen Massy-Beresford [email protected] unprecedented period of challenge, helping to keep the market informed and focused on a bright future. Washington Jen DiMascio [email protected] I’ll keep you up-to-date on new initiatives in this letter in the coming weeks. Wichita Molly McMillin [email protected]
President, Aviation Week Network Greg Hamilton, Gregory Hamilton President, Aviation Week Network Managing Director, Intelligence & Data Services Anne McMahon [email protected]
4 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 FEEDBACK
MORE CARROT, LESS STICK to on every flight unless you are lucky notes,” which reliability engineers, I just read with interest Helmut enough to be in first class. In fact, the failure analysts and flight-test crews Kunz’s letter “Local Languages” removal of every other row would be a in the average large manufacturer are (March 23-April 5, p. 6). I was a Royal good idea in the future as well. well equipped to program. Air Force navigator long ago, flying With about a 20% load factor these But that automated subsystem Canberras, Buccaneers and Torna- days, and probably for a long time in must never be given control authority dos. I did two tours in Germany and the future, this will keep us safer and over the airplane without the pilot am now a happily naturalized U.S. give us lots of legroom. having reviewed the conclusions and citizen—I just celebrated 35 years of proposed course of action. There is very fulfilling life here in the U.S. Bob Seelos, San Diego always the possibility that the au- It is not “arrogance” to use one’s tomation logic may fail under some native language in the air, as Kunz AUTOMATION LOGIC rare unforeseen combination of writes; it is merely natural and David Vecchi hits the nail on the head circumstances, as with the Boeing 737 convenient. in his letter “Manual Proficiency” MAX’s Maneuvering Characteristics I fully agree about the vital im- (March 23-April 5, p. 6): The basic Augmentation System. portance of everyone being “on the problem is “the inability or reluctance To preserve the admirable Boeing same page”—that is, in the same of some pilots to fly under manual philosophy of designing an airplane language—in aviation, but a lot more control.” that can be flown satisfactorily under carrot, a lot less stick and some rea- At the same time, we must rec- fully manual control, then we must ban sonable tolerance for the less gifted ognize that the system complexity automated gizmos that accommodate linguists among us aviators seems a accompanying automation is placing flaws in mandatory flight character- more hopeful way forward. unreasonable demands on the pilot istics if we are to continue producing to instantaneously recognize system airplanes that will be flown by pilots of Tim Price, Pittsburgh failures, their cause and the best greatly varying experience. remedial action. The answer to that THE MIDDLE SEAT is to automate and expand the “pilot’s Malcolm Bowden, McDonald, Tennessee American Airlines recently announced that it would not be assigning the middle seat to help combat COVID-19 Address letters to the Editor-in-Chief, Aviation Week & Space Technology, and achieve social distancing. This 2121 K Street, NW, Suite 210, Washington, DC, 20037 or send via email to: should be a permanent solution to the [email protected] Letters may be edited for length and clarity; cramped quarters we are subjected a verifiable address and daytime telephone number are required.
BEHIND THE SCENES Forced to work from home since March 10 due to the novel coronavirus pandemic, the New York- based Aviation Week & Space Technology editorial production team produced the March 23-April 5 print issue of AW&ST from 12 home offices—or living rooms, dining rooms or kitchens— a first in the history of the magazine. The team has transferred their highly collaborative workflow online, substituting chat messages, screen-shares and calls via the Teams app for the immediacy of shouting questions across the newsroom and discussing edits and layouts face-to-face until it is safe to return to their office in Manhattan. The production crew (top row, from left): Andrea Hollowell, Michael Lavitt, Lisa Caputo; (second row, from left): Michael Stearns, Thomas DePierro, Theresa Petruso; (third row, from left): Colin Throm, Audra Avizienis, Arturo Mora (and Pretty); (bottom row, from left): Rosa Pineda, Michael Hayes and Jack Freifelder.
6 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST FEEDBACK WHO’S WHERE
MORE CARROT, LESS STICK to on every flight unless you are lucky notes,” which reliability engineers, has I just read with interest Helmut enough to be in first class. In fact, the failure analysts and flight-test crews Dany Eshchar leadership positions at LMI Advisors, as his last active duty position. He been hired as CEO Kunz’s letter “Local Languages” removal of every other row would be a in the average large manufacturer are Kymeta and EADS North America and succeeds Norris Krone, who passed of Orbit Communica- (March 23-April 5, p. 6). I was a Royal good idea in the future as well. well equipped to program. serves as director and treasurer of the in 2019. tions Systems, which Air Force navigator long ago, flying With about a 20% load factor these But that automated subsystem International Institute of Space Law. Honeywell has elected U.S. Army provides maritime Canberras, Buccaneers and Torna- days, and probably for a long time in must never be given control authority Capella Space has hired Dayna Gen. (ret.) Raymond T. Odierno to and airborne satcom dos. I did two tours in Germany and the future, this will keep us safer and over the airplane without the pilot Anderson as vice president of business its board as an independent direc- terminals and mis- am now a happily naturalized U.S. give us lots of legroom. having reviewed the conclusions and operations and Mack Koepke as vice tor. Odierno was military advisor sion-critical airborne citizen—I just celebrated 35 years of proposed course of action. There is president of global sales. Anderson to former U.S. Secretaries of State audio systems. Eshchar was deputy very fulfilling life here in the U.S. Bob Seelos, San Diego always the possibility that the au- and Koepke previously worked for Colin Powell and CEO for the Israel- and U.S.-based It is not “arrogance” to use one’s tomation logic may fail under some Maxar Technologies. Condoleezza Rice. Aeronautics Group. native language in the air, as Kunz AUTOMATION LOGIC rare unforeseen combination of Rodney Freling- Western Aircraft Aeronautics Group has hired Moshe writes; it is merely natural and David Vecchi hits the nail on the head circumstances, as with the Boeing 737 huysen has joined has hired Jacqueline Elazar as CEO. He succeeds Amos convenient. in his letter “Manual Proficiency” MAX’s Maneuvering Characteristics Greenberg Traurig Rambacal as regional Mathan. Elazar was Rafael Advanced I fully agree about the vital im- (March 23-April 5, p. 6): The basic Augmentation System. as a senior director sales manager. Prior Defense Systems executive vice pres- portance of everyone being “on the problem is “the inability or reluctance To preserve the admirable Boeing for government to joining Western ident and general manager of Rafael’s same page”—that is, in the same of some pilots to fly under manual philosophy of designing an airplane law and policy. For- Aircraft, she served land and naval division. He also held language—in aviation, but a lot more control.” that can be flown satisfactorily under mer congressman as vice president of aviation at Bank senior positions in Israel’s defense carrot, a lot less stick and some rea- At the same time, we must rec- fully manual control, then we must ban Frelinghuysen had been chairman of OZK in Little Rock, Arkansas. ministry and the Israel Defense Forces. sonable tolerance for the less gifted ognize that the system complexity automated gizmos that accommodate the House Appropriations Committee. AAR has appointed H. John Gilbert FlightSafety International has hired linguists among us aviators seems a accompanying automation is placing flaws in mandatory flight character- Electro-magnetic motor company son, Jr., to its board. Gilbertson is a Brad Thress as president and CEO. He more hopeful way forward. unreasonable demands on the pilot istics if we are to continue producing ePropelled has promoted Tim Quaglieri former managing director and 27-year succeeds David Davenport, who has to instantaneously recognize system airplanes that will be flown by pilots of to head its human resources team in veteran of Goldman Sachs. left. Thress was senior vice president Tim Price, Pittsburgh failures, their cause and the best greatly varying experience. addition to his role as Clark Hill law firm has hired at Textron Aviation and before that, remedial action. The answer to that director of finance. Eduardo Alfonso Angeles as managing president of Able Aerospace. THE MIDDLE SEAT is to automate and expand the “pilot’s Malcolm Bowden, McDonald, Tennessee Mehtap Cevher director and senior counsel for gov- Spacecom has hired Dan Zajicek as American Airlines recently announced Conti has joined ernment and regulatory affairs in Los CEO. He succeeds interim CEO Itzik that it would not be assigning the Hogan Lovells’ New Angeles. Angeles was general counsel Shnaiberg, who resumes his deputy middle seat to help combat COVID-19 Address letters to the Editor-in-Chief, Aviation Week & Space Technology, York finance practice and senior assistant city attorney at CEO position. Zajicek was CEO of and achieve social distancing. This 2121 K Street, NW, Suite 210, Washington, DC, 20037 or send via email to: as a partner. Previ- Los Angeles World Airports, which Satcom Systems, chief financial offi- should be a permanent solution to the Letters may be edited for length and clarity; ously with Arnold & oversees Los Angeles International [email protected] cer at Bezeq International and senior cramped quarters we are subjected a verifiable address and daytime telephone number are required. Porter Kay Scholer, she brings 15 years and Van Nuys airports. deputy director general of Israel’s of finance experience across a variety communications ministry. of aviation transactions. Dunmore has promoted Thomas AE Industrial Partners has named HONORS & ELECTIONS S. Rimel, Jr., to president from chief Kevin McAleenan an operating part- Mark Spangler has been selected to operating officer. Dunmore produces BEHIND THE SCENES ner of the aerospace, defense and serve on the Armed Forces Commu- laminated film substrates for the air- government-services private equity nications and Elec- Forced to work from home since March 10 due to craft industry. firm. McAleenan was acting secretary tronics Association Motion Indus- the novel coronavirus pandemic, the New York- of Homeland Security. He also will sit International Cyber tries has promoted on the boards of portfolio companies Committee. Spangler based Aviation Week & Space Technology Greg Cook to exec- Gryphon Technologies and American is TriSept Corp.’s editorial production team produced the utive vice president Pacific Corp. senior cybersecu- March 23-April 5 print issue of AW&ST from 12 home from senior vice Amit Musli has rity advisor, with president. He contin- offices—or living rooms, dining rooms or kitchens— been hired as Percepto 36 years of CIA ues to serve as chief vice president of and National Reconnaissance Office a first in the history of the magazine. The team has financial officer of the industrial parts sales. Musli joins the leader ship experience. transferred their highly collaborative workflow online, distributor as well. autonomous industri- The fifth Martha King Scholarship for substituting chat messages, screen-shares and calls Mitsubishi Aircraft Corp. has shifted al drone manufactur- Female Flight Instructors was awarded executive responsibilities in its push to at the annual Women via the Teams app for the immediacy of shouting er from Kramer Elec- Anna Stanphill to obtain SpaceJet M90 certifica- tronics, where he was on the senior in Aviation International Conference questions across the newsroom and discussing edits tion. Senior Vice Presidents Keisuke management team. in Orlando, Florida, in February. It and layouts face-to-face until it is safe to return to Masutani and Hiroyuki Tatsuoka will The University Research Foundation provides lifelong flight-instructor con- their office in Manhattan. The production crew (top become board directors with, respec- has hired U.S. Navy Vice Adm. (ret.) tinuing education from King Schools, tively, oversight of governance and as president. Architzel founded by National Aviation Hall of row, from left): Andrea Hollowell, Michael Lavitt, David Architzel engineering development. Hitoshi was with Naval Air Systems Command Famers John and Martha King. c Lisa Caputo; (second row, from left): Michael Stearns, Kaguchi becomes a part-time director, Thomas DePierro, Theresa Petruso; (third row, and Hiroyoshi Kodama a part-time To submit information for the Who’s Where column, send Word or attached text files statutory internal auditor. from left): Colin Throm, Audra Avizienis, Arturo Mora (no PDFs) and photos to: [email protected] For additional information on HawkEye 360 has hired Dennis companies and individuals listed in this column, please refer to the Aviation Week Intelligence (and Pretty); (bottom row, from left): Rosa Pineda, Burnett as executive vice president Network at AviationWeek.com/awin For information on ordering, telephone Michael Hayes and Jack Freifelder. and general counsel. Burnett held U.S.: +1 (866) 857-0148 or +1 (515) 237-3682 outside the U.S.
6 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 7 FIRST The Deep Drop: 70% Less Traffic TAKE Predicted Globally For the latest, go to 20% AVIATIONWEEK.COM 10 0 COMMERCIAL AVIATION -10 The $29 billion in loan guarantees for -20 IATA is projecting a 38% fall in average revenue pas- U.S. airlines, and $17 billion for the senger kilometers for the world’s airlines in 2020, -30 defense industrial base, available un- due to an expected 70% drop in traffic in the second der a $2.2 trillion rescue bill to offset -40 quarter caused by COVID-19. Based on this forecast, the coronavirus crisis come with re - -50 IATA is predicting a $252 billion loss of passenger strictions including limits on layoffs revenue for 2020 (page 13). (page 18). -60 -70 Change Year-Over-Year Percent Facing delivery deferrals and substan- -80 tial production cuts, Airbus has boost- 2015 2016 2017 2018 2019 2020 2021 ed liquidity to €30 billion ($32 billion) but is not asking European govern - Source: International Air Transport Association ments for help.
IATA is pushing for broad adoption of British taxpayers have paid £156 million Qantas pilots have voted to accept new travel vouchers in place of requiring air- ($193 million) so far in response to the contract conditions that would allow lines to refund passengers when flights September 2019 collapse of leisure air- ultra-long-haul flying, although plans are canceled during the COVID-19 crisis. line Thomas Cook. to order aircraft for such flights are on hold. VIEW FROM WASHINGTON SPACE Broadband satellite constellation net- FAA Proposes Supersonic Standards work operator OneWeb filed for Chap- ter 11 after its biggest investor, Japan’s Responding to a congressional directive to exercise leadership in SoftBank, balked at providing addition- enabling the return of supersonic air travel, the FAA has proposed al financing because of the COVID-19 noise certification regulations for new supersonic aircraft. The crisis (page 28). proposed rules cover landing and takeoff noise and would not lift Veteran astronauts Shannon Walker of the prohibition on civil supersonic flight over land. NASA and Soichi Noguchi of the Japan The notice of proposed rulemaking (NPRM) released on March Aerospace Exploration Agency have been added to SpaceX’s first operational 30 outlines landing and takeoff (LTO) noise standards for super- Commercial Crew flight. sonic aircraft with a maximum takeoff weight no greater than 150,000 lb. and a maximum cruise speed up to Mach 1.8. The FAA NASA has selected SpaceX as the first to fly cargo to the planned lunar-orbit- defines such aircraft as Supersonic Level 1 (SSL1). ing Gateway in anticipation of spending “This definition would include most of the proposed supersonic $7 billion over 15 years with multiple airplane design concepts that U.S. manufacturers have described companies to resupply the outpost. to the FAA,” the NPRM says. As defined, SSL1 would include Aeri- TEXTRON AVIATION on’s AS2 supersonic business jet but would not cover Boom Super- sonic’s larger Overture airliner, which is being designed to carry up to 75 passengers at speeds up to Mach 2.2. “The FAA anticipates that when data is available to establish LTO-cycle noise standards for other weight and speed supersonic airplanes, other similar classes of airplane and noise level would be added . . . with separate definitions,” the NPRM says. “The FAA has indicated this is an initial step,” says Boom. “We’re actively engaged with U.S. and other international regulators and GENERAL AVIATION Textron Aviation has completed initial with ICAO to develop thoughtful, practical standards that will ground engine tests on its prototype apply to larger and faster aircraft such as Overture.” Cessna SkyCourier twin-turboprop utility aircraft.
8 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST FIRST The Deep Drop: 70% Less Traffic TAKE Predicted Globally Dornier Seawings’ prototype New Gen- ture Attack Reconnaissance Aircraft to The U.S. Space Force has awarded Ray- eration Seastar amphibious aircraft replace AH-64 Apaches used for armed theon $378 million to replace comput- For the latest, go to 20% AVIATIONWEEK.COM made its 31-min. first flight from Ober- reconnaissance (page 39). ers in its next-generation GPS ground 10 pfaffenhofen, Germany, on March 28. system due to cybersecurity concerns. 0 Excessive leaks first identified in July COMMERCIAL AVIATION -10 2019 in the fuel system of the Boeing Saab has cut metal on the first compo- The $29 billion in loan guarantees for KC-46A have been upgraded to a Cate- nents for the two-seat JAS 39F Gripen, -20 IATA is projecting a 38% fall in average revenue pas- U.S. airlines, and $17 billion for the senger kilometers for the world’s airlines in 2020, gory 1 deficiency in the U.S. Air Force’s being developed for export customer -30 defense industrial base, available un- due to an expected 70% drop in traffic in the second DORNIER SEAWINGS new aerial refueling tanker. Brazil. der a $2.2 trillion rescue bill to offset -40 quarter caused by COVID-19. Based on this forecast, the coronavirus crisis come with re - at least its Space -50 IATA is predicting a $252 billion loss of passenger China appears to have deployed The U.S. Space Force declared strictions including limits on layoffs one of perhaps three direct-ascent an- Fence surveillance system operational revenue for 2020 (page 13). (page 18). -60 ti-satellite systems under development, on March 27, on Kwajalein Atoll in the -70 Change Year-Over-Year Percent according to a pair of U.S. reports is- Marshall Islands. Facing delivery deferrals and substan- -80 Electric air taxi developer Lilium has sued March 30. tial production cuts, Airbus has boost- 2015 2016 2017 2018 2019 2020 2021 raised an additional $240 million from Germany will make a split buy of 45 Eu- ed liquidity to €30 billion ($32 billion) existing investors, taking the total Work on a hypersonic weapon concept, rofighters and 45 Boeing F/A-18 Super but is not asking European govern - Source: International Air Transport Association raised so far by the German startup to Thresher, is underway between the Hornets to replace its Panavia Torna- ments for help. more than $340 million. UK’s Defense Science and Technology dos, local media reports suggest. Laboratory and the U.S. Air Force Re- IATA is pushing for broad adoption of British taxpayers have paid £156 million Qantas pilots have voted to accept new Lynn Tilton has stepped down as CEO of search Laboratory (page 14). The U.S. Marine Corps is to commission travel vouchers in place of requiring air- ($193 million) so far in response to the contract conditions that would allow MD Helicopters after a bankruptcy court an independent study of a plan to rede- lines to refund passengers when flights September 2019 collapse of leisure air- ultra-long-haul flying, although plans ordered her to sell companies to repay After receiving antitrust and other reg- sign its force that would reduce the num- are canceled during the COVID-19 crisis. line Thomas Cook. to order aircraft for such flights are on loan obligations worth nearly $2 billion. ulatory approvals for their merger, United ber of F-35s in its squadrons (page 32). hold. Technologies and Raytheon planned to European create the combined Raytheon Technol- OBITUARIES VIEW FROM WASHINGTON Embraer received Brazilian, SPACE and U.S. type certification for its up - ogies on April 3. Jean-Marie Saget, former chief test pi- Broadband satellite constellation net- graded Phenom 300E light business lot for Dassault, died March 19 at age FAA Proposes Supersonic Standards work operator OneWeb filed for Chap- jet on March 27. Airbus has paused production of 91. Born in Paris, Saget was a pilot with ter 11 after its biggest investor, Japan’s A400M and C295 airlifters and A330 the French Air Force in 1954 when he Responding to a congressional directive to exercise leadership in SoftBank, balked at providing addition- DEFENSE tanker/transports in Spain because of won a Paris-Cannes air race in an Oura- enabling the return of supersonic air travel, the FAA has proposed al financing because of the COVID-19 Bell and Sikorsky are to build compet- a more restrictive lockdown to combat gan fighter. The fol- noise certification regulations for new supersonic aircraft. The crisis (page 28). ing prototypes of the U.S. Army’s Fu- COVID-19. lowing year, Marcel proposed rules cover landing and takeoff noise and would not lift Dassault hired him Veteran astronauts Shannon Walker of as a test pilot. He the prohibition on civil supersonic flight over land. NASA and Soichi Noguchi of the Japan was chief test pilot The notice of proposed rulemaking (NPRM) released on March Aerospace Exploration Agency have 50 YEARS AGO IN AVIATION WEEK from 1955 to 1989. been added to SpaceX’s first operational Europe’s first Boeing 747 was featured “He will remain, at 30 outlines landing and takeoff (LTO) noise standards for super- Commercial Crew flight. Dassault Aviation, on our cover of April 13, 1970, flying over sonic aircraft with a maximum takeoff weight no greater than DASSAULT AVIATION an example of the 150,000 lb. and a maximum cruise speed up to Mach 1.8. The FAA NASA has selected SpaceX as the first western Washington shortly before its entry qualities that the aeronautical world to fly cargo to the planned lunar-orbit- into service with Lufthansa. The widebody requires to accomplish the greatest defines such aircraft as Supersonic Level 1 (SSL1). ing Gateway in anticipation of spending aircraft, one of five 747s initially ordered by purposes,” the company says. “This definition would include most of the proposed supersonic $7 billion over 15 years with multiple the German carrier, was scheduled to fly airplane design concepts that U.S. manufacturers have described companies to resupply the outpost. between Frankfurt and New York. But all was Aviation entrepreneur Joe Clark, co- TEXTRON AVIATION not well at Boeing, which was suffering from founder and CEO of blended winglet to the FAA,” the NPRM says. As defined, SSL1 would include Aeri- developer Aviation Partners (API), died declining commercial sales and a slump in on’s AS2 supersonic business jet but would not cover Boom Super- in Palm Springs, California, on March sonic’s larger Overture airliner, which is being designed to carry up its defense and space businesses. The com- 30 at age 78. Clark, who was born in pany’s workforce—already projected to drop Canada, also cofounded Horizon Air. to 75 passengers at speeds up to Mach 2.2. from 134,000 at the start of 1969 to less He formed Seat- “The FAA anticipates that when data is available to establish than 79,000 by the end of 1970—declined tle-based API in 1991 LTO-cycle noise standards for other weight and speed supersonic at nearly twice the expected rate during after selling Horizon the first quarter, the magazine reported, Air to Alaska Air- airplanes, other similar classes of airplane and noise level would be lines. “His legacy will with the heaviest hits coming in the Seattle added . . . with separate definitions,” the NPRM says. long be visible on the “The FAA has indicated this is an initial step,” says Boom. “We’re area. Lufthansa ultimately ordered 81 747s Aviation Week Intelligence Network’s Fleet thousands of busi- between 1966 and 2006. Thirty-two of those Discovery database: 19 747-8s, 11 747-400s actively engaged with U.S. and other international regulators and GENERAL AVIATION ness and commercial Textron Aviation has completed initial are still in the airline’s fleet, according to the and two freighters. aircraft fitted with AVIATION PARTNERS with ICAO to develop thoughtful, practical standards that will ground engine tests on its prototype his winglets to increase performance apply to larger and faster aircraft such as Overture.” Cessna SkyCourier twin-turboprop Read every issue of Aviation Week back to 1916 at: archive.aviationweek.com and efficiency,” says the National Busi- utility aircraft. ness Aviation Association. c
8 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 9 COMMENTARY GOING CONCERNS MICHAEL BRUNO
UP UNTIL THE START OF MARCH, tential stress tests, minimum employment levels and/ new Boeing CEO and President David or labor controls. In turn, they say, Boeing’s stock will Calhoun’s biggest challenge was getting trade at a discount. the 737 MAX back in the air. Since then, While these conditions are the most prominent the narrowbody’s grounding and production halt has “strings attached” being discussed for Boeing, they may become quaint as Wall Street and others subtly but not be the last—nor should they be. As one Wall Street increasingly wonder whether Boeing can survive the icon said recently about government bailouts, it is time post-COVID-19 world. for a better return on investment for the country. Boeing triggered the new skepticism March 17 when it Mohamed El-Erian, Allianz chief economic advisor formally asked Washington for a $60 billion-plus bailout and the former CEO of fixed-income investing company of the U.S. aerospace manufacturing sector, ostensibly to Pimco, says: “The notion of governments in different flow through the Chicago-based OEM. So dramatic was companies, that’s going to be the case because a lot the turn of events that Nikki Haley, a former official in the of companies are going to have to be bailed out. [It is] administration of President Donald Trump, quit Boeing’s best to start with the technocratic approach, which is board in protest, asserting that companies should not to define your objectives. Protecting jobs is one exam- receive federal handouts. ple; protecting nation- In response, Boeing al security is another. thanked her for almost a Bail Out Boeing? Then go through what it year of directorship and mean[s] for who you bail removed her chair from Likely yes, but maybe not the way Boeing wants out and how you bail out, the boardroom. Wheth- and importantly, how you er Haley has ulterior motives is a debate for another get incentive alignment coming out of the bailouts.” day, but it is clear why the manufacturer is seeking What do such incentive alignments with Boeing look money. According to Jefferies analysts, Boeing Com- like? It should go way beyond maintaining employment mercial Airplanes alone was burning through about figures and shelving shareholder returns. Washington $4.3 billion a month to fund its operations and support is desperate for U.S. aerospace and defense providers suppliers before the novel coronavirus outbreak. to innovate, but independent research and develop- Boeing has $15 billion in liquidity, Calhoun said ment (IRAD) spending has been emaciated over the March 24. But it ended 2019 with more last decade as public companies raced than $27 billion in debt. By mid-March, “THE NOTION OF GOVERNMENTS to reward shareholders. Getting Boe- it had fully drawn down a new credit ing to double or triple IRAD could be line totaling nearly $14 billion. And by IN DIFFERENT COMPANIES, a good start. the time Calhoun spoke, Boeing had At the same time, the Pentagon, closed Puget Sound widebody manufac- NASA and Congress are exhausted turing for health reasons, frozen hiring, THAT’S GOING with poor contractor performance on suspended dividend payments—which its major defense acquisition and space on top of already frozen share buybacks TO BE THE CASE.” programs. Does anyone remember the is a doomsday for investors—and said Future Combat Systems or the recent Calhoun will forgo pay through 2020. Starliner failure? As government au- But as fellow Chicagoan and former Chicago Mayor ditors have documented in countless reports, weapon Rahm Emanuel once said, you never let a good crisis programs are years late and often double-digit per- go to waste. If there was ever a time to socialize the centages over budget—assuming they ultimately de- risks facing Boeing, this pandemic is the hook. The liver. With that in mind, Boeing could be “incentivized” question for U.S. leaders then becomes: Is it worth tak- to dramatically improve its results across the board. ing Boeing up on its bailout bid? Finally, there has been a lot of talk in the U.S. in re- The answer likely is “yes,” but maybe not for obvious cent years about a crisis of not producing enough sci- reasons—and probably not the way Boeing wants. Pro- ence, technology, engineering and math (STEM) grad- tecting Boeing’s workforce of more than 150,000 em- uates. But as Aviation Week workforce studies have ployees and tens of thousands of suppliers is statistical- shown, industry acts as a poor pull on the demand for ly significant as Washington tries to fend off a prolonged such graduates, with relatively few hired out of schools recession, but maintaining Boeing’s payroll and supply each year. Instead, companies have long preferred to chain could be accomplished other ways, such as direct poach talent from each other when needed. So make payments to those employees or grants to suppliers. Boeing either more directly fund STEM education or Boeing will surely have to swallow some once-in- hire an industry-leading ratio of cohorts each year. conceivable conditions, starting with an ongoing lack There are likely many more ways to better align Boe- of dividends and share buybacks. UBS analysts say ing with U.S. interests, and they should be considered. Af- there also likely will be executive pay regulation and ter all, U.S. taxpayers already are being promised more incremental board governance oversight, including po- bang for the buck—so let us get more Buck Rogers. c
10 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMENTARY GOING CONCERNS MICHAEL BRUNO
UP UNTIL THE START OF MARCH, tential stress tests, minimum employment levels and/ new Boeing CEO and President David or labor controls. In turn, they say, Boeing’s stock will Calhoun’s biggest challenge was getting trade at a discount. the 737 MAX back in the air. Since then, While these conditions are the most prominent the narrowbody’s grounding and production halt has “strings attached” being discussed for Boeing, they may become quaint as Wall Street and others subtly but not be the last—nor should they be. As one Wall Street increasingly wonder whether Boeing can survive the icon said recently about government bailouts, it is time post-COVID-19 world. for a better return on investment for the country. Boeing triggered the new skepticism March 17 when it Mohamed El-Erian, Allianz chief economic advisor formally asked Washington for a $60 billion-plus bailout and the former CEO of fixed-income investing company of the U.S. aerospace manufacturing sector, ostensibly to Pimco, says: “The notion of governments in different flow through the Chicago-based OEM. So dramatic was companies, that’s going to be the case because a lot the turn of events that Nikki Haley, a former official in the of companies are going to have to be bailed out. [It is] administration of President Donald Trump, quit Boeing’s best to start with the technocratic approach, which is board in protest, asserting that companies should not to define your objectives. Protecting jobs is one exam- receive federal handouts. ple; protecting nation- In response, Boeing al security is another. thanked her for almost a Bail Out Boeing? Then go through what it year of directorship and mean[s] for who you bail removed her chair from Likely yes, but maybe not the way Boeing wants out and how you bail out, the boardroom. Wheth- and importantly, how you er Haley has ulterior motives is a debate for another get incentive alignment coming out of the bailouts.” day, but it is clear why the manufacturer is seeking What do such incentive alignments with Boeing look money. According to Jefferies analysts, Boeing Com- like? It should go way beyond maintaining employment mercial Airplanes alone was burning through about figures and shelving shareholder returns. Washington $4.3 billion a month to fund its operations and support is desperate for U.S. aerospace and defense providers suppliers before the novel coronavirus outbreak. to innovate, but independent research and develop- Boeing has $15 billion in liquidity, Calhoun said ment (IRAD) spending has been emaciated over the March 24. But it ended 2019 with more last decade as public companies raced than $27 billion in debt. By mid-March, “THE NOTION OF GOVERNMENTS to reward shareholders. Getting Boe- it had fully drawn down a new credit ing to double or triple IRAD could be line totaling nearly $14 billion. And by IN DIFFERENT COMPANIES, a good start. the time Calhoun spoke, Boeing had At the same time, the Pentagon, closed Puget Sound widebody manufac- NASA and Congress are exhausted turing for health reasons, frozen hiring, THAT’S GOING with poor contractor performance on suspended dividend payments—which its major defense acquisition and space on top of already frozen share buybacks TO BE THE CASE.” programs. Does anyone remember the is a doomsday for investors—and said Future Combat Systems or the recent THERE IS NO COMPARISON. Calhoun will forgo pay through 2020. Starliner failure? As government au- But as fellow Chicagoan and former Chicago Mayor ditors have documented in countless reports, weapon NO EQUAL. THERE IS ONLY ONE. Rahm Emanuel once said, you never let a good crisis programs are years late and often double-digit per- go to waste. If there was ever a time to socialize the centages over budget—assuming they ultimately de- THE COMMERCIAL JET ENGINE risks facing Boeing, this pandemic is the hook. The liver. With that in mind, Boeing could be “incentivized” IN A LEAGUE OF ITS OWN. question for U.S. leaders then becomes: Is it worth tak- to dramatically improve its results across the board. ing Boeing up on its bailout bid? Finally, there has been a lot of talk in the U.S. in re- Powered by an industry‑first geared architecture — and more than The answer likely is “yes,” but maybe not for obvious cent years about a crisis of not producing enough sci- 40 other groundbreaking innovations — the Pratt & Whitney GTF™ reasons—and probably not the way Boeing wants. Pro- ence, technology, engineering and math (STEM) grad- tecting Boeing’s workforce of more than 150,000 em- uates. But as Aviation Week workforce studies have is unlike any engine that’s come before it. ployees and tens of thousands of suppliers is statistical- shown, industry acts as a poor pull on the demand for EXPLORE THE FUTURE OF FLIGHT AT PRATTWHITNEY.COM ly significant as Washington tries to fend off a prolonged such graduates, with relatively few hired out of schools recession, but maintaining Boeing’s payroll and supply each year. Instead, companies have long preferred to chain could be accomplished other ways, such as direct poach talent from each other when needed. So make payments to those employees or grants to suppliers. Boeing either more directly fund STEM education or Boeing will surely have to swallow some once-in- hire an industry-leading ratio of cohorts each year. conceivable conditions, starting with an ongoing lack There are likely many more ways to better align Boe- of dividends and share buybacks. UBS analysts say ing with U.S. interests, and they should be considered. Af- there also likely will be executive pay regulation and ter all, U.S. taxpayers already are being promised more incremental board governance oversight, including po- bang for the buck—so let us get more Buck Rogers. c
10 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMENTARY INSIDE BUSINESS AVIATION WILLIAM GARVEY
THE NOVEL CORONAVIRUS HAS There’s more. Clark, who has facilitated the private severely affected the aviation commu- sale of thousands of warbirds, including 80 P-51 Mus- nity, among countless others. Were it tangs, says: “Anybody with enough money can buy one not for the pandemic, spring’s arrival of these things.” But, he adds, if the aircraft is heavy, normally means many of us would likely encounter complex or a jet, the purchaser will need appropriate some deep-throated, octogenarian war veterans with piloting experience and training and to demonstrate a surprising flash, noble character and clearly serious high level of skill to win government approval to go fly it. purpose. And with eyes drawn skyward, we would And more. Even with the FAA’s blessing of the air- watch them rumble by. craft and pilot, a warbird operator still needs insur- These are members of the “warbird” fleet—all for- ance. According to Lance Toland, a prominent avia- mer military fighters, bombers, transports, trainers, tion insurance broker and pilot who at one time observation and other owned 38 warbirds, cov- aircraft now owned and erage for such aircraft is operated by civilians. The Warbirders hard to find and becom- There were to be 100 ing “exorbitant.” such aircraft forming Keeping history alive and airborne As far as the Mente- an aerial parade up the marketed F-5 is con- National Mall in Wash- cerned, Toland says, ington, on May 8 as part “I wouldn’t touch that of the Arsenal of Democ- with a 10-ft. pole.” Such racy Flyover (AW&ST a negative outlook is Feb. 10-23, p. 14), but concerning for warbird COVID-19 forced a re- operators since “with- scheduling to Sept. 25. out in surance they risk Delaying or canceling everything they own on air events has become a a single flight,” he added. common practice since Then there’s the mat- the virus took hold. ter of maintenance and While there has been parts. The production of attrition over the de- COURTESY AIRCRAFT many warbirds ended 60 cades—the loss of a B-17 in Connecticut along with or more years ago, and those with the skills required seven on board last October is among the most recent to keep them flying have steadily declined in number. and tragic example—there remain an estimated 6,000 Clark says there remains “a pretty good network of warbirds in the U.S. alone, though not all are airworthy. shops” able to service the fleet. However, in any mar- It comes as a surprise to many outside of aviation ket, scarcity affects pricing. that an individual or group of individuals can buy and For all those reasons, Toland has a frank assessment fly a B-25 Mitchell bomber or MiG jet fighter. But it is of the appeal of warbird ownership: “I think it’s waning.” perfectly legal . . . albeit with lots of restrictions. And yet there are those with a special passion for Brian Hammer, vice president of transactions at the the winged vets. They see the machines as fabric and Mente Group, a business aircraft sales company and aluminum symbols of bravery, determination, selfless- consultancy in Dallas, oversaw the sale of a MiG-29 ness and love of country. They are iconic artifacts and, late last year. Furthermore, he’s got a Northrop F-5 on by the way, fun to fly and put on display. the market right now. The price? It’s “Make offer.” Steve Craig, a lawyer, real estate investor and ho- Should that offer come from a foreign customer and tel man from Lawrence, Kansas, is one such person. be accepted, the aircraft would have to comply with A seasoned aviator—and owner of the Beaumont federal International Traffic in Arms Regulations. Hotel, a favorite Kansas nexus among pilots—he has And any foreign-registered warbird must receive an owned a variety of warplanes including a Grumman import permit from the Bureau of Alcohol, Tobacco, F4F Wildcat, Boeing Stearman PT-17 and a Buecker Firearms and Explosives to enter the U.S. Jungmeister. He loved them all. Furthermore, explains Mark Clark, a well-known In Craig’s experience, the warbird appeal is three- warbird specialist and president/owner of Courtesy fold. First is the welcoming fraternity of fellow enthu- Aircraft in Rockford, Illinois, such aircraft must be ab- siasts who have included Harrison Ford, Bob Hoover, sent any guns or cannons, bombs or targeting systems Baron Hilton and Robin Olds, among many. Second is and any drop tanks must be permanently secured. the thrill and satisfaction of piloting such unique air- With the exception of some light aircraft, most war- craft. And third is “doing my part in a small way to birds fall under the “experimental” airworthiness cat- preserve history.” c egory. As such, they have specific operational restric- tions imposed by the FAA. William Garvey is Editor-in-Chief of Business & Commercial Aviation
12 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMENTARY COMMENTARY INSIDE BUSINESS AVIATION AIRLINE INTEL WILLIAM GARVEY JENS FLOTTAU
THE NOVEL CORONAVIRUS HAS There’s more. Clark, who has facilitated the private BEFORE THE NOVEL CORONAVIRUS without government aid will apply for it, because they severely affected the aviation commu- sale of thousands of warbirds, including 80 P-51 Mus- began to dominate events in aerospace know their competitors will be seeking similar infu- nity, among countless others. Were it tangs, says: “Anybody with enough money can buy one and air transport, the most heated politi- sions. Governments will then pick winners and losers. not for the pandemic, spring’s arrival of these things.” But, he adds, if the aircraft is heavy, cal debates took place around how much In the U.S., for instance, a massive coronavirus normally means many of us would likely encounter complex or a jet, the purchaser will need appropriate government support should be allowed in the industry. bailout signed into law by President Donald Trump some deep-throated, octogenarian war veterans with piloting experience and training and to demonstrate a There was no shortage of disputes: The long and bitter includes $29 billion for airlines to keep their workers surprising flash, noble character and clearly serious high level of skill to win government approval to go fly it. trade conflict between the U.S. and the EU about sub- employed through Sept. 30, even if most of their fleets purpose. And with eyes drawn skyward, we would And more. Even with the FAA’s blessing of the air- sidies for Boeing and Airbus began in 2004 and is still are grounded. While that’s good news for the carriers watch them rumble by. craft and pilot, a warbird operator still needs insur- going strong. For years, the big three U.S. legacy airlines and their employees, that level of support is highly con- These are members of the “warbird” fleet—all for- ance. According to Lance Toland, a prominent avia- argued that market access for the big three Gulf carri- cerning for airlines elsewhere. mer military fighters, bombers, transports, trainers, tion insurance broker and pilot who at one time ers should be limited because they received state sup- Consider that before the coronavirus crisis the five observation and other owned 38 warbirds, cov- port—a claim Emirates has always denied. In Europe, largest U.S. airlines already made about half of the in- aircraft now owned and erage for such aircraft is bailouts of Alitalia have been a never-ending story, as dustry’s profits worldwide. Most of those profits were operated by civilians. The Warbirders hard to find and becom- have been airport subsidies and “marketing support” for directed back to shareholders (leaving a thin cushion There were to be 100 ing “exorbitant.” whenever an airline opened a new route (the least con- for hard times). But there was still enough money left such aircraft forming Keeping history alive and airborne As far as the Mente- tentious issue since everyone benefited at some point). for Delta Air Lines to begin building a global empire by an aerial parade up the marketed F-5 is con- JOEPRIESAVIATION.COM National Mall in Wash- cerned, Toland says, ington, on May 8 as part “I wouldn’t touch that Should governments be shaping of the Arsenal of Democ- with a 10-ft. pole.” Such Airline Bailouts the industry’s future? racy Flyover (AW&ST a negative outlook is Feb. 10-23, p. 14), but concerning for warbird COVID-19 forced a re- operators since “with- scheduling to Sept. 25. out in surance they risk Delaying or canceling everything they own on air events has become a a single flight,” he added. common practice since Then there’s the mat- the virus took hold. ter of maintenance and While there has been parts. The production of attrition over the de- COURTESY AIRCRAFT many warbirds ended 60 cades—the loss of a B-17 in Connecticut along with or more years ago, and those with the skills required seven on board last October is among the most recent to keep them flying have steadily declined in number. Now that COVID-19 is changing life as we know it, investing in Virgin Atlantic, Air France-KLM, LATAM and tragic example—there remain an estimated 6,000 Clark says there remains “a pretty good network of some of those that have been most outspoken against Airlines, Aeromexico and China Southern, among oth- warbirds in the U.S. alone, though not all are airworthy. shops” able to service the fleet. However, in any mar- state support, such as Boeing, could be big beneficia- ers. Delta even seriously considered buying a stake in It comes as a surprise to many outside of aviation ket, scarcity affects pricing. ries of it, via government loans or guarantees aimed notoriously unprofitable Alitalia. that an individual or group of individuals can buy and For all those reasons, Toland has a frank assessment at ensuring their survival. In the airline industry, even While the case for taxpayer support exists now, fly a B-25 Mitchell bomber or MiG jet fighter. But it is of the appeal of warbird ownership: “I think it’s waning.” the healthiest carriers now say they cannot survive for governments need to realize they cannot be long-term perfectly legal . . . albeit with lots of restrictions. And yet there are those with a special passion for an extended period without state aid. An industry that players in the industry and should define their sup- Brian Hammer, vice president of transactions at the the winged vets. They see the machines as fabric and likes to routinely criticize governments for failing to port as emergency relief. Unfortunately, there is no Mente Group, a business aircraft sales company and aluminum symbols of bravery, determination, selfless- recognize its strategic importance to the world econo- coordination among nations, even those inside the EU. consultancy in Dallas, oversaw the sale of a MiG-29 ness and love of country. They are iconic artifacts and, my is now fully dependent on them. In most countries, France has said it will do whatever is needed to res- late last year. Furthermore, he’s got a Northrop F-5 on by the way, fun to fly and put on display. governments appear willing to help, debunking some cue companies in which the government has stakes— the market right now. The price? It’s “Make offer.” Steve Craig, a lawyer, real estate investor and ho- of the routine complaints that have become common- among them are Airbus and Air France. It is incon- Should that offer come from a foreign customer and tel man from Lawrence, Kansas, is one such person. place at industry conferences in recent years. ceivable that Germany would let Lufthansa Group fail, be accepted, the aircraft would have to comply with A seasoned aviator—and owner of the Beaumont That is not to say that the case for government aid for even though it is a fully private company. Meanwhile, federal International Traffic in Arms Regulations. Hotel, a favorite Kansas nexus among pilots—he has aviation is spurious. The economic crisis that has way- airlines in the UK have been told not to expect a direct And any foreign-registered warbird must receive an owned a variety of warplanes including a Grumman laid airlines is partially the result of government-im- government rescue. import permit from the Bureau of Alcohol, Tobacco, F4F Wildcat, Boeing Stearman PT-17 and a Buecker posed travel restrictions to deal with the initial health To be sure, the industry’s playing field was never Firearms and Explosives to enter the U.S. Jungmeister. He loved them all. crisis. And given aviation’s critical role in the global completely level in good times. Italy spent billions of Furthermore, explains Mark Clark, a well-known In Craig’s experience, the warbird appeal is three- economy, there is a strong case to be made that it is in euros on Alitalia over decades. The airline, now nation- warbird specialist and president/owner of Courtesy fold. First is the welcoming fraternity of fellow enthu- the public interest to preserve a critical mass that can alized, still exists but is no longer relevant. Etihad Air- Aircraft in Rockford, Illinois, such aircraft must be ab- siasts who have included Harrison Ford, Bob Hoover, ramp back up once the COVID-19 pandemic subsides. ways was propped up with billions by Abu Dhabi but sent any guns or cannons, bombs or targeting systems Baron Hilton and Robin Olds, among many. Second is The industry undoubtedly will look different after the has been retrenching after it became abundantly clear and any drop tanks must be permanently secured. the thrill and satisfaction of piloting such unique air- crisis. To start with, it will be smaller, though analysts that its strategy did not work. Those examples show With the exception of some light aircraft, most war- craft. And third is “doing my part in a small way to vary widely in their estimates of how much. Wheth- that in the past, even the biggest subsidies ultimately birds fall under the “experimental” airworthiness cat- preserve history.” c er airlines live or die will depend not on their perfor- did not rescue unfocused or flawed business models. egory. As such, they have specific operational restric- mance, but on which has access to government money But they pale in comparison to the market distortions tions imposed by the FAA. William Garvey is Editor-in-Chief of Business & Commercial Aviation and which does not. Even airlines that might survive that will be caused by the COVID-19 bailouts. c
12 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 13 HYPERSONICS HYPERSONIC THRESHOLD > UK/U.S. THRESHER PROJECT EXPERIMENTS CONTINUE TO 2022-23
> PROJECT ADDS TO UK-FRENCH HYPERSONIC MISSILE WORK
> UK IDENTIFIES BOOSTERS, AERO DATA AS HYPERSONIC NEEDS
Steve Trimble Washington, Guy Norris Los Angeles and Tony Osborne London
he disclosure of a new U.S./UK collaboration on a hy- personic weapon concept highlights proposals within the British government and industry to leverage de- France also committed to fielding a cades of research and expertise in high-speed flight and hypersonic, nuclear cruise missile by T the mid-2030s. propulsion to rapidly emerge as the latest country to weaponize The UK, a pioneer in the field since hypersonic technology. a Queen’s University professor de - veloped the hypersonic waverider Extensive experimentation for comprehensive weapon system con- concept in 1951, has quietly remained a new weapon concept called the cept,” with science and technology- active as basic research has shifted to Thresher—originally an acronym for level activity for the Thresher over the weapons development. Air Vice Mar- Tactical High-Speed, Responsive and next 3-4 years focused on the aerody- shal Rocky Rochelle, leader of the Roy- Highly Efficient Round but now sim- namics, warhead and propulsion, the al Air Force’s (RAF) Rapid Capabili- ply a name—is underway between the Defense Ministry says. ties Office, committed in July to study UK’s Defense Science and Technology The two-year-old collaboration was the feasibility of fielding a hypersonic Laboratory (DSTL) and the U.S. Air launched as the U.S. laid plans for a weapon within four years. Force Research Laboratory (AFRL), $10 billion investment in a broad port- “The RAF, in particular, has been the UK Defense Ministry confirms to folio of conventional hypersonic weap- clear about its desire to obtain hy - Aviation Week. ons, responding to moves last year personic munitions for air launch in The previously undisclosed joint by Russia to field the nuclear-armed the early 2020s if at all possible,” says Project Arrangement, which expires Avangard and by China to deploy the Justin Bronk, a research fellow for the in fiscal 2022 or 2023, is “maturing intermediate-range DF-17 hypersonic Royal United Services Institute. technologies within the context of a glide vehicles by year-end. Last year, The existence of the collaborative
DSTL studies of a notional hypersonic glide vehicle are helping to hone UK high-speed design tools. Control Surfaces
Nose Tip Antenna Windows
DSTL
14 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST HYPERSONICS DSTL HYPERSONIC THRESHOLD > UK/U.S. THRESHER PROJECT EXPERIMENTS CONTINUE TO 2022-23
> PROJECT ADDS TO UK-FRENCH HYPERSONIC MISSILE WORK
> UK IDENTIFIES BOOSTERS, AERO DATA AS HYPERSONIC NEEDS
Steve Trimble Washington, Guy Norris Los Angeles and Tony Osborne London he disclosure of a new U.S./UK collaboration on a hy- personic weapon concept highlights proposals within the British government and industry to leverage de- France also committed to fielding a For its concept study, DSTL employed a Boeing cades of research and expertise in high-speed flight and hypersonic, nuclear cruise missile by 747-400-based airborne-launch system similar to T the mid-2030s. DSTL propulsion to rapidly emerge as the latest country to weaponize the Virgin Orbit’s underwing-location (inset) method. The UK, a pioneer in the field since hypersonic technology. a Queen’s University professor de - veloped the hypersonic waverider Thresher and Rochelle’s feasibility Fires Capability, which has also been capability in the hypersonic realm. Extensive experimentation for comprehensive weapon system con- concept in 1951, has quietly remained study may suggest that the RAF is shelved. “DSTL is developing tools and ex- a new weapon concept called the cept,” with science and technology- active as basic research has shifted to preparing multiple projects to ad- Despite a rich history of hyperson- pertise to understand this new class Thresher—originally an acronym for level activity for the Thresher over the weapons development. Air Vice Mar- vance the science and technology, ic research within the UK, a senior of vehicles, and we are on the road to Tactical High-Speed, Responsive and next 3-4 years focused on the aerody- shal Rocky Rochelle, leader of the Roy- says James Bosbotinis, a UK-based DSTL official acknowledges collabo- do that,” says Hunter. Highly Efficient Round but now sim- namics, warhead and propulsion, the al Air Force’s (RAF) Rapid Capabili- defense and international affairs rations are necessary to transition the Designed for a maximum speed of ply a name—is underway between the Defense Ministry says. ties Office, committed in July to study analyst. A final decision may await technology to an operational weapon. Mach 5 and impact speed of Mach UK’s Defense Science and Technology The two-year-old collaboration was the feasibility of fielding a hypersonic the conclusions of the still-pending For example, the UK lacks the indus- 2-plus, the configuration that emerged Laboratory (DSTL) and the U.S. Air launched as the U.S. laid plans for a weapon within four years. review of the UK’s defense, security trial capacity to manufacture large from the study was 3.6 m long (12 ft.) Force Research Laboratory (AFRL), $10 billion investment in a broad port- “The RAF, in particular, has been and foreign policy, he says. solid rocket motors, which must by and 1.2 m wide, with a small nose the UK Defense Ministry confirms to folio of conventional hypersonic weap- clear about its desire to obtain hy - Any commitment that emerges supplied by international partners, radius of only 10 mm (0.4 in.). “That Aviation Week. ons, responding to moves last year personic munitions for air launch in from the review would build on de - DSTL Principal Scientist David keeps drag down, but that will have The previously undisclosed joint by Russia to field the nuclear-armed the early 2020s if at all possible,” says cades of UK hypersonic science and Hunter said at a Royal Aeronautical a thermal penalty,” says Hunter. The Project Arrangement, which expires Avangard and by China to deploy the Justin Bronk, a research fellow for the technology research. Society conference on hypersonics vehicle’s mass of 900 kg (2,000 lb.) in fiscal 2022 or 2023, is “maturing intermediate-range DF-17 hypersonic Royal United Services Institute. In the early 2000s, a team of UK en- in late November. The UK also needs was “sufficient to fit a [350-kg] war- technologies within the context of a glide vehicles by year-end. Last year, The existence of the collaborative gineers from Qinetiq performed trials of access to high-speed wind tunnels, as head in it for a medium-range [2,500- a scramjet engine called the HyShot 3, limited hypersonic flight-test data to 3,000-km] hypersonic glide vehicle.” developed jointly with Australian re- date reduces the quality of predictions Carbon-carbon material was se- DSTL studies of a notional hypersonic searchers. Fitted to a sounding rock- for aerodynamic control over Mach 5, lected for the nose tip and control glide vehicle are helping to hone UK et, the HyShot successfully achieved Hunter says. surfaces, with carbon or silica pheno- speeds of 9,000 kph (5,600 mph), A notional air-launched hyperson- lic used in a heat shield to protect the high-speed design tools. prompting the UK to consider follow-up ic glide vehicle outlined at the confer- interior. Navigation would be provided Control trials. Two flights of the Sustained Hy- ence by Hunter also offered a glimpse by an integrated GPS/inertial system personic Flight Experiment, a Mach 6 of one possible pathway toward an with support from a ground-scanning Surfaces ramjet, were scheduled, with the first affordable offensive tactical weapon synthetic aperture radar. The vehicle set for August 2009. But the plans system using existing technology. itself would be designed for direct were scrapped as the UK reconsidered Based loosely on Lockheed Martin’s insertion into its glide phase, there- Nose Tip its deep-strike aspirations. High-Performance Maneuvering Re- by eliminating the complexity of an Antenna The technology was being mulled entry Vehicle of the 1990s, which was exoatmospheric reaction control sys- Windows for the Defense Ministry’s Future related to the common air vehicle tem for post-boost reorientation. Long-Range Cruise Missile, later re- concept, the blended body study was Computational fluid dynamics anal- DSTL named the Future Long-Range Deep used to exercise DSTL’s new design ysis indicated that at Mach 7.5, 5 deg.
14 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 15 HYPERSONICS
alpha (angle of attack) and an altitude quiring the rocket technology, aero- ti-ship missiles. “The program is early of 30 km, the vehicle had a lift-to-drag dynamic prediction and control, and in the concept stages and represents ratio of 3.5. “That’s not quite as good thermal protection systems,” Hunter an opportunity for the UK and France as we hoped. But the good aspect of says. “If we did it, the weapon would to build on the hugely successful fam- that is we have quite a wide peak on be highly capable.” ily that has produced Storm Shadow, the lift-to-drag curve, which means we International hypersonic develop- Meteor, Brimstone, Perseus [and] Sea should be able to fly at higher lift-to- ment partnerships are the most likely Ceptor—to name a few,” says Bollom. drag ratio for a wide range of opera- option for the UK, says Air Marshal “We are studying some concepts tional conditions,” Hunter says. (ret.) Simon Bollom, CEO of Defence at present, and this brings an inter- The results indicated the vehicle can Equipment and Support, the keynote esting trade-off into play between get “600-km cross-range and change speaker at the conference. “The cost speed and low observability,” he says. heading by up to 90 deg. azimuth. That associated with developing a weapon “The program has down-selected to means defenders would have to pro- or air vehicles would probably be pro- two main concepts with a number of tect across a huge range, which would hibitive at a single-nation level, and if derivatives: one based on high speed be a big challenge,” he adds. we are going to get into this technol- and the other on low observability. The glide vehicle would be boosted ogy, we are probably going to have to The two workstreams are probably to a deployment altitude of 65 km by collaborate,” he says. not compatible in a single system at air-launch on a two-stage solid rock- While the UK is beginning its initial this stage, and it is likely we’ll have to et from beneath the wing of a Boeing forays into potential hypersonic weap- take one or both paths to deliver the 747-400. The 747 design incorporates ons projects with the U.S., the bulk of full capability across a demanding set a built-in structural hardpoint, orig- the nation’s missile investment is with of requirements.” inally designed for carrying spare France through MBDA. “Much of the His comments support speculation engines, which provides a convenient hypersonic subject-matter-expert that the program is moving toward location for a mounting for rocket knowledge in this partnership resides development of a subsonic, low-ob- launching. in MBDA France, and the UK is work- servable, air-launched weapon to The same design forms the basis of ing with France to develop a future replace the SCALP/Storm Shadow Virgin Orbit’s 747-based LauncherOne cruise anti-ship weapon for entry into missile and a higher-speed missile to smallsat delivery system. The com- service in the late 2020s,” says Bollom. replace the air- and surface-launched plete DSTL concept stack is 13.5 m Launched in 2017, the joint pro - anti-ship Exocet and Harpoon mis- long and weighs in at 16,300 kg, “so it gram is targeted at replacing British siles. It remains unknown whether does fit on the 747,” Hunter says. and French cruise/long-range pre- the high-speed option, currently base- “[The study shows] it would be cision-strike and anti-ship missiles, lined on supersonic capability, could possible for the UK to develop a hy- including the air-launched SCALP/ be extended to hypersonic speeds of personic glide vehicle, but there would Storm Shadow as well as the air- and Mach 5-plus. be significant challenges including ac- ship-launched Exocet and Harpoon an- Peter Hall, head of aerodynamics
Hypersonic Defense Concept Targets Air Volumes
AS GOVERNMENTS AND THE AEROSPACE INDUSTRY GRAPPLE Assuming a head-on engagement, the missile would re- with the challenges of developing hypersonic countermea- quire around 35 sec. detection time—or around 200 km sures, even outline details of concepts for missile defense distance—prior to launch, providing time for last-second have remained classified. However, a notional system propagated targeting coordinates to be uploaded and dubbed the Quartet Interceptor, unveiled at the Royal sufficient time for intercept. The first stage would boost Aeronautical Society’s recent hypersonic conference, pro- for 6 sec. to place the missile at an altitude and speed at vides clues as to how some architectures may evolve. which the subinterceptors would separate, spread out and Conceived by Cranfield University researcher John Mar- begin flying preprogrammed trajectories toward a target kow, the Quartet is designed to use current or near-term air volume. propulsion, systems and seeker technology to meet the With a rocket burn time of around 10 sec., each inter- challenges of very brief engagement timelines and geome- ceptor would fly at up to Mach 8 toward the air volume and tries, hard-to-detect targets and precise fuse and warhead activate a seeker with a detection range of around 15 km. timings. The ground-launched system would be based “The subinterceptors decelerate to about 2000 m/sec. and on large, 5-6-m-long (16-20-ft.) vehicles incorporating a home in on their assigned section. At least one will find booster and multiple rocket-boosted subinterceptors. the target and intercept it,” says Markow. To compensate “The idea is to launch when the target is still relatively for the short time available for the end-game intercept, he far away, on the order of 10s of kilometers,” says Markow, says various solutions could be considered, including link- who modeled the system on inbound hypersonic missiles ing the warhead fuser to merger cues from Doppler chang- approaching at Mach 6-8 and altitudes up to 15 km (9 mi.). es in the pulse repetition frequency of the seeker. c
16 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST HYPERSONICS alpha (angle of attack) and an altitude quiring the rocket technology, aero- ti-ship missiles. “The program is early for MBDA UK, stresses the impor- the UK has “some dialog with the U.S. frame to develop a defensive capabil- of 30 km, the vehicle had a lift-to-drag dynamic prediction and control, and in the concept stages and represents tance of leveraging existing European from an exploitation and countering ity. “[But] through our collaborative ratio of 3.5. “That’s not quite as good thermal protection systems,” Hunter an opportunity for the UK and France partnerships to advance hypersonic viewpoint,” says Bollom. “At this stage, e orts, particularly with MDA, there as we hoped. But the good aspect of says. “If we did it, the weapon would to build on the hugely successful fam- missile developments in a timely and our spending is relatively modest with- is clearly an opportunity and an area that is we have quite a wide peak on be highly capable.” ily that has produced Storm Shadow, cost-e ective manner. The company, in the research program, but as oppor- of signifi cant interest to MDA,” Dack the lift-to-drag curve, which means we International hypersonic develop- Meteor, Brimstone, Perseus [and] Sea which is studying hypersonics for the tunities within hypersonics emerge, says. “That is the lead organization should be able to fly at higher lift-to- ment partnerships are the most likely Ceptor—to name a few,” says Bollom. UK’s Complex Weapons Program, we’d look to weigh them against many in research and development in the drag ratio for a wide range of opera- option for the UK, says Air Marshal “We are studying some concepts “sees a lot of benefit from working competing defense priorities.” U.S., particularly for hypersonic glide tional conditions,” Hunter says. (ret.) Simon Bollom, CEO of Defence at present, and this brings an inter- with other nations,” says Hall. The At the same time the UK’s interest vehicles, and there are UK players The results indicated the vehicle can Equipment and Support, the keynote esting trade-off into play between pan-European partnership avoids du- and involvement in hypersonic weap- supporting the U.S. mission.” get “600-km cross-range and change speaker at the conference. “The cost speed and low observability,” he says. plication, pools resources and reduces ons systems is in its very early phases. He adds: “Multinational engage- heading by up to 90 deg. azimuth. That associated with developing a weapon “The program has down-selected to costs, he adds. “We are literally in the proof-of-con- ment is key to our work, [as is] the means defenders would have to pro- or air vehicles would probably be pro- two main concepts with a number of MBDA, which is evaluating the cept stages, and the research as it strong relationship with the U.S. MDA tect across a huge range, which would hibitive at a single-nation level, and if derivatives: one based on high speed ASN4G, a high-supersonic or hyper- stands at the moment is to understand enabled through a [memorandum of be a big challenge,” he adds. we are going to get into this technol- and the other on low observability. sonic successor to the French ASMP-A the technology that’s out there and the understanding] signed in 2003 be- The glide vehicle would be boosted ogy, we are probably going to have to The two workstreams are probably supersonic stand-o missile, “is head- range of requirements we would need tween the UK and U.S. . . . This ar- to a deployment altitude of 65 km by collaborate,” he says. not compatible in a single system at ing toward having full-scale hypersonic to put together to counter these weap- rangement had allowed us to under- air-launch on a two-stage solid rock- While the UK is beginning its initial this stage, and it is likely we’ll have to [liquid] ramjet test facilities available,” ons,” says Bollom. take many collaborative activities and et from beneath the wing of a Boeing forays into potential hypersonic weap- take one or both paths to deliver the says Hall. “Germany has similar test The UK also has the potential for generated data analysis for the benefi t 747-400. The 747 design incorporates ons projects with the U.S., the bulk of full capability across a demanding set facilities for solid rocket ramjets.” The collaboration in hypersonic defense of both our nations.” a built-in structural hardpoint, orig- the nation’s missile investment is with of requirements.” company also has access to a “wealth” through its close relationship with the “Hypersonic missile defense may inally designed for carrying spare France through MBDA. “Much of the His comments support speculation of high-temperature-capable materials U.S. Missile Defense Agency (MDA) well be the most e ective area to in- engines, which provides a convenient hypersonic subject-matter-expert that the program is moving toward across Europe and to specialist seeker says Paul Dack, chief scientist of the vest in, and it may well be this that location for a mounting for rocket knowledge in this partnership resides development of a subsonic, low-ob- and missile control system technology UK Missile Defense Center (MDCT), a becomes the limit of our ambition in launching. in MBDA France, and the UK is work- servable, air-launched weapon to in the UK. MBDA’s European arm, led Defense Ministry-led government-in- terms of taking a program forward,” The same design forms the basis of ing with France to develop a future replace the SCALP/Storm Shadow by France, is also working on Twist- dustry partnership. Established in Bollom says. “The defense against Virgin Orbit’s 747-based LauncherOne cruise anti-ship weapon for entry into missile and a higher-speed missile to er (Timely Warning and Interception 2003 to address requirements, issues cruise challenging and difficult, smallsat delivery system. The com- service in the late 2020s,” says Bollom. replace the air- and surface-launched with Space-based TheatER Surveil- and opportunities related to ballistic since they remain in the atmosphere plete DSTL concept stack is 13.5 m Launched in 2017, the joint pro - anti-ship Exocet and Harpoon mis- lance), an endoatmospheric intercep- missile defense, the MDCT’s remit has throughout their fl ight times.” long and weighs in at 16,300 kg, “so it gram is targeted at replacing British siles. It remains unknown whether tor designed to tackle ballistic missiles been expanded in recent years to “in- Pointing out that the U.S. already does fit on the 747,” Hunter says. and French cruise/long-range pre- the high-speed option, currently base- and next-generation threats including clude maneuvering reentry vehicles fi elds a number of anti-cruise missiles “[The study shows] it would be cision-strike and anti-ship missiles, lined on supersonic capability, could hypersonic glide vehicles. and latterly hypersonic systems and including the SM-2, SM-6, NIADS possible for the UK to develop a hy- including the air-launched SCALP/ be extended to hypersonic speeds of Aside from national research e orts more specifi cally hypersonic glide ve- and Evolved Sea Sparrow systems, personic glide vehicle, but there would Storm Shadow as well as the air- and Mach 5-plus. through DSTL with British industrial hicles,” Dack says. he notes that none are designed for be significant challenges including ac- ship-launched Exocet and Harpoon an- Peter Hall, head of aerodynamics aerospace and defense contractors, There is currently no specifi c time countering hypersonic missiles. c
Hypersonic Defense Concept Targets Air Volumes I C
AS GOVERNMENTS AND THE AEROSPACE INDUSTRY GRAPPLE Assuming a head-on engagement, the missile would re- Subinterceptors (two more on rear side) Protective with the challenges of developing hypersonic countermea- quire around 35 sec. detection time—or around 200 km Shielding sures, even outline details of concepts for missile defense distance—prior to launch, providing time for last-second Mating Foldable Booster Structure Detachment Wings: have remained classified. However, a notional system propagated targeting coordinates to be uploaded and Fins Stowed (solid) dubbed the Quartet Interceptor, unveiled at the Royal sufficient time for intercept. The first stage would boost Unfolded (outline) Aeronautical Society’s recent hypersonic conference, pro- for 6 sec. to place the missile at an altitude and speed at vides clues as to how some architectures may evolve. which the subinterceptors would separate, spread out and Conceived by Cranfield University researcher John Mar- begin flying preprogrammed trajectories toward a target 22 in. (55 cm) kow, the Quartet is designed to use current or near-term air volume. 6.7 in. (17 cm) propulsion, systems and seeker technology to meet the With a rocket burn time of around 10 sec., each inter- challenges of very brief engagement timelines and geome- ceptor would fly at up to Mach 8 toward the air volume and tries, hard-to-detect targets and precise fuse and warhead activate a seeker with a detection range of around 15 km. timings. The ground-launched system would be based “The subinterceptors decelerate to about 2000 m/sec. and 5.6 ft. 10.5 ft. Missile Mount on large, 5-6-m-long (16-20-ft.) vehicles incorporating a home in on their assigned section. At least one will find (1.7 m) (3.2 m) (computer and electronics internal) booster and multiple rocket-boosted subinterceptors. the target and intercept it,” says Markow. To compensate O 2,560 lb. (1,160 kg) “The idea is to launch when the target is still relatively for the short time available for the end-game intercept, he 1,365 lb. (620 kg) far away, on the order of 10s of kilometers,” says Markow, says various solutions could be considered, including link- 4 X 2,000 lb. (100 kg) who modeled the system on inbound hypersonic missiles ing the warhead fuser to merger cues from Doppler chang- approaching at Mach 6-8 and altitudes up to 15 km (9 mi.). es in the pulse repetition frequency of the seeker. c 310 lb. (140 kg) Source: Cranfi eld University
16 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 1 COMMERCIAL AVIATION > Supply chain drop-off p. 21 Revised SpaceJet flight p. 23 Asian domestic networks p. 24 Chinese airline recovery p. 24 Life Support
> U.S. AIRLINES AND AEROSPACE COMPANIES TO RECEIVE GRANTS AND LOANS
> EUROPE, ASIA-PACIFIC GOVERNMENTS LAUNCH MULTITUDE OF RESCUE PLANS
Ben Goldstein, Michael Bruno and Sean Broderick Washington, Helen Massy- Airlines are grounding thousands of Beresford Paris, Adrian Schofield Auckland and Jens Flottau Frankfurt aircraft as air travel comes to a halt.
s air traffic began to move in markets that have been vacated by option in that time frame, the industry toward a level of zero in key those who fell by the wayside. would burn up to $61 billion in cash in Amarkets the past few weeks, Major conflicts are already emerg- the next three months (see graph, page the major players in aerospace and ing between airlines. Virgin Australia 20). IATA Director General and CEO air transport were soon very clear on is requesting a loan guarantee of A$1.4 Alexandre de Juniac says he is “fully one point: For this industry to sur- billion ($2.3 billion) from the govern- conscious of the inconvenience” the in- vive, bailouts would be needed. And ment so that it can survive, as part of troduction of vouchers would mean, as they would have to be big bailouts, a broader industry package. But its customers would not get their money to support the supply chain, aircraft much larger rival Qantas opposes a back at least in the short term. “But for manufacturers and airlines globally. bailout specifically for Virgin. If mon- us it is a matter of survival,” he says. Within days—often as part of gen- ey is allocated nonetheless to Virgin IATA expects the industry as a eral economic rescue packages—finan- Australia, Qantas wants three times whole to lose $39 billion in the second cial support at an unprecedented scale that amount, given the size difference quarter, versus a $7 billion profit in the was firmly on its way in some countries, between the carriers. In the UK, Virgin same period a year earlier. Revenues first and foremost in the U.S., which Atlantic is lobbying hard for state sup- for the quarter will be down 68% (and has been clear that it will do whatev- port, but International Airlines Group 38% for the full year) from the same er is needed to keep the sector intact. (IAG) and its UK unit British Airways periods a year ago, according to the This includes measures unthinkable say they are not asking for public funds latest estimates. For the quarter, IATA less than a month ago. But globally and are lobbying behind the scenes expects the industry to reduce capital the picture is less clear. Some coun- against aid for their rival. expenditures, including for new air- tries—many with a legacy of an active The International Air Transport craft, to zero from $17 billion in 2019. government industrial policy, such as Association (IATA) estimates air- As a result, Airbus and Boeing will France—appear equally committed to lines will need $200 billion globally in basically be unable to find airline cus- aviation, while other important players rescue funds to avoid a collapses on a tomers willing to accept aircraft in the such as the UK are telling their airlines major scale. next three months. And de Juniac says not to expect special treatment. Beyond the dearth of traffic, pas- no airline will be ready to buy new or As has been the case in past disputes senger refunds are the single biggest used aircraft “in the next 6-9 months.” over state aid, there is a major risk of it near-term threat to liquidity. IATA is In the U.S., President Donald Trump distorting competition if the measures pushing for broad adoption of travel signed into law a sweeping $2 trillion are not harmonized. They have not vouchers in place of passenger re - coronavirus rescue package, including been—and the financial volumes of the funds when flights are canceled. IATA up to $58 billion in financial aid to help aid packages will make market distor- warned that the refunds are a potential airlines blunt the financial impact of tion an even more pressing issue post- liability for the industry of up to $35 the COVID-19 pandemic. COVID-19, as state-sponsored carriers billion in the second quarter alone. If The 883-page Coronavirus Aid, Re- compete with privately funded airlines all customers were to use the refund lief, and Economic Security (CARES)
18 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMERCIAL AVIATION > Supply chain drop-off p. 21 Revised SpaceJet flight p. 23 Asian domestic networks p. 24 Chinese airline recovery p. 24
Updates Follow coronavirus coverage from across the Aviation Week Network United Airlines CEO Oscar Munoz if the government will not step in, oth- er funders will. at: AviationWeek.com/coronavirus and President Scott Kirby said in Life Support a candid message to the company’s By contrast, Airbus—like Boeing Check 6 AAR Corp. CEO John Holmes 100,000 employees that there will be faced with an avalanche of delivery de- joined the company just before the Sept. U.S. AIRLINES AND AEROSPACE COMPANIES no furloughs or layoffs through Sept. 30 ferrals and preparing for substantial > 11 terrorist attacks and helped lead it TO RECEIVE GRANTS AND LOANS as per the law but added that some production cuts—is asking that Euro- through the global economic meltdown downsizing may still be needed follow- pean governments not step in directly and a dire workforce shortage. Hear ing that date if air travel demand fails to aid it but instead focus on support EUROPE, ASIA-PACIFIC GOVERNMENTS how AAR is preparing for the COVID-19 > to rebound in a meaningful way. “If the for suppliers and airlines. LAUNCH MULTITUDE OF RESCUE PLANS downturn: AviationWeek.com/podcast recovery is as slow as we fear, it means Airbus CEO Guillaume Faury our airline and our workforce will have stressed that the company has a strong Act will provide $29 billion in work- to be smaller than it is today,” they said. balance sheet and “significant liquidity force grants for airline workers, avert- The legislation provides U.S. air- available to cope with additional cash ing the possibility of mass furloughs ports $10 billion in additional FAA requirements related to COVID-19.” for the next six months. Airport Improvement Program funds, The company now has access to a new The grants include $25 billion for authorized “for any purpose for which €15 billion ($16 billion) credit facility passenger carriers, $4 billion for cargo airport revenues may lawfully be used.” that increases its available liquidity JEFF SWENSEN/GETTY IMAGES airlines and an additional $3 billion for “The funding and flexibility provided from €25 billion as of the end of 2019 contractors such as caterers and air- by Congress will help airports cover new by almost another €5 billion. This is de- port workers. All of the money must operating costs, avoid defaults on their spite a €3.6 billion compliance penalty go toward employee pay and benefits. bonds and keep people working during payment to authorities, €500 million Airlines that accept the funds will be these challenging times,” says Airport for the acquisition of Bombardier’s barred from involuntarily furloughing Council International-North America share in the Airbus Canada partner- employees through Sept. 30. President and CEO Kevin Burke. ship and the funding of operations in Carriers receiving federal assis- An additional carve-out will pro- what normally is a low-delivery time Ben Goldstein, Michael Bruno and Sean Broderick Washington, Helen Massy- Airlines are grounding thousands of tance will also be prohibited from vide $17 billion to national security of the year. Beresford Paris, Adrian Schofield Auckland and Jens Flottau Frankfurt aircraft as air travel comes to a halt. repurchasing stock or paying out div- contractors, likely including aero- European airlines have been slash- idends through Sept. 30, 2021, and will s air traffic began to move in markets that have been vacated by option in that time frame, the industry have to abide by certain limits on exec- Daily European Network Traffic Evolution toward a level of zero in key those who fell by the wayside. would burn up to $61 billion in cash in utive pay increases. The act includes a markets the past few weeks, Major conflicts are already emerg- the next three months (see graph, page provision that would allow the federal A the major players in aerospace and ing between airlines. Virgin Australia 20). IATA Director General and CEO government to receive warrants, debt air transport were soon very clear on is requesting a loan guarantee of A$1.4 Alexandre de Juniac says he is “fully securities or equity in exchange for the one point: For this industry to sur- billion ($2.3 billion) from the govern- conscious of the inconvenience” the in- aid, although it is still unclear how this vive, bailouts would be needed. And ment so that it can survive, as part of troduction of vouchers would mean, as measure will be implemented. they would have to be big bailouts, a broader industry package. But its customers would not get their money The aid package also makes a fur- back at least in the short term. “But for to support the supply chain, aircraft much larger rival Qantas opposes a ther $29 billion in loans and loan manufacturers and airlines globally. bailout specifically for Virgin. If mon- us it is a matter of survival,” he says. guarantees available to cover losses Within days—often as part of gen- ey is allocated nonetheless to Virgin IATA expects the industry as a unrelated to labor expenses, although eral economic rescue packages—finan- Australia, Qantas wants three times whole to lose $39 billion in the second analysts question whether carriers cial support at an unprecedented scale that amount, given the size difference quarter, versus a $7 billion profit in the will opt for the loans, given the re - was firmly on its way in some countries, between the carriers. In the UK, Virgin same period a year earlier. Revenues strictive terms and conditions in the first and foremost in the U.S., which Atlantic is lobbying hard for state sup- for the quarter will be down 68% (and legislation and airlines’ ready access has been clear that it will do whatev- port, but International Airlines Group 38% for the full year) from the same to private capital markets. Airlines Source: Eurocontrol er is needed to keep the sector intact. (IAG) and its UK unit British Airways periods a year ago, according to the also secured suspension of a host of This includes measures unthinkable say they are not asking for public funds latest estimates. For the quarter, IATA aviation taxes through the end of the space companies such as Boeing and ing their flight schedules, by the end of less than a month ago. But globally and are lobbying behind the scenes expects the industry to reduce capital year, including taxes paid on domestic General Electric, the former of which March leaving only the bare minimum the picture is less clear. Some coun- against aid for their rival. expenditures, including for new air- tickets, international arrivals and de- Source: Eurocontrolhas separately called on Congress for of services operating to bring home tries—many with a legacy of an active The International Air Transport craft, to zero from $17 billion in 2019. partures, award-mile purchases, cargo $60 billion spread out across the aero- stranded nationals or maintain essen- government industrial policy, such as Association (IATA) estimates air- As a result, Airbus and Boeing will and kerosene. space supply chain. tial transport links. In addition, calls France—appear equally committed to lines will need $200 billion globally in basically be unable to find airline cus- American Airlines Chairman and Boeing proffered itself as the clear- for support from national governments aviation, while other important players rescue funds to avoid a collapses on a tomers willing to accept aircraft in the CEO Doug Parker said in a video inghouse for all of the $60 billion-plus and the European Union intensified. such as the UK are telling their airlines major scale. next three months. And de Juniac says message that the Fort Worth-based it originally asked for, meaning Boeing Italy, where the novel coronavirus not to expect special treatment. Beyond the dearth of traffic, pas- no airline will be ready to buy new or airline—the country’s largest by fleet ostensibly would dole out funds to has hit hardest so far in Europe, acted As has been the case in past disputes senger refunds are the single biggest used aircraft “in the next 6-9 months.” size and passengers flown—will be el- suppliers as appropriate. Also, Boeing decisively. Its national carrier Alitalia over state aid, there is a major risk of it near-term threat to liquidity. IATA is In the U.S., President Donald Trump igible to receive $12 billion of the total sought the funds without strings at- was already in trouble before the out- distorting competition if the measures pushing for broad adoption of travel signed into law a sweeping $2 trillion $50 billion in financial aid available for tached. President and CEO David break, three years into an unsuccessful are not harmonized. They have not vouchers in place of passenger re - coronavirus rescue package, including passenger carriers. Calhoun contends that aid to Boeing, search for a route out of bankruptcy. been—and the financial volumes of the funds when flights are canceled. IATA up to $58 billion in financial aid to help “We are confident that those funds, and secondarily its suppliers, is a gov- Italy plans to nationalize the airline. aid packages will make market distor- warned that the refunds are a potential airlines blunt the financial impact of along with our relatively high available ernment imperative for numerous rea- According to Italian media, the new tion an even more pressing issue post- liability for the industry of up to $35 the COVID-19 pandemic. cash position, will allow us to ride sons. He also insists that the future of Alitalia could see its fleet reduced to COVID-19, as state-sponsored carriers billion in the second quarter alone. If The 883-page Coronavirus Aid, Re- through even the worst potential fu- commercial aviation remains bright, 25-30 aircraft, around a quarter of compete with privately funded airlines all customers were to use the refund lief, and Economic Security (CARES) ture scenario,” Parker said. the long-term business case holds, and the current total, therefore making it
18 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 19 COMMERCIAL AVIATION
an entity of negligible size. The move ployee salaries for a period of up to 12 dustry during the crisis. Some moved to nationalize Alitalia is part of a €25 months if they are forced into part-time early to introduce packages based on billion economic support package ap- work. Condor and TUIfly have asked waivers of fees and charges, and state- proved on March 16 aimed at helping for government-backed loans to bridge backed loans for airlines have been of- the country, which is still in lockdown, the period during which essentially fered. Some governments are consid- recover from the COVID-19 crisis. no flights are taking place. Industry ering additional forms of financial aid French authorities have promised sources say they are likely to be helped. for carriers, with more likely to follow. to do whatever it takes to support the Condor could be taken over temporari- The Singapore government is a lead- big companies in France, including Air ly by the government through the KfW er in this regard, unveiling significant France-KLM, in which it holds a 14.3% development bank. measures to help aviation and other stake. Economy Minister Bruno Le Norwegian Air Shuttle was in trouble sectors on March 26. These include Maire said March 19: “We have several before the COVID-19 crisis hit, but the funding 75% of up to S$4,600 ($3,200) options on the table for all big industrial long-haul low-cost carrier said March of aviation workers’ monthly pay and companies that could be under threat 24 that it had reached an agreement providing S$350 million in fee relief for on the market. They include increasing with banks that would allow it to unlock airlines. This is part of a massive S$48 or taking a stake, or even nationaliza- an initial tranche of state-backed aid. billion economic stimulus package an- tions. All options will be studied and The Norwegian government launched nounced by the government. Singapore Airlines (SIA) is raising up to S$15 billion through the issue of A I E S C new shares and bonds, with the back- ing of its majority shareholder, state- $80 owned Temasek Holdings. SIA will 60 offer shareholders S$5.3 billion in new equity and up to S$9.7 billion through 40 Cash burn of 10-year mandatory convertible bonds. 20 $61 billion in These will be offered to them on a second quarter pro-rata basis, and both issuances will 0 be treated as equity on the company’s -20 balance sheet, says SIA.
-40 SIA has also arranged a S$4 billion
U.S. $ billion during quarter bridge loan facility with DBS Bank, -60 which it said will support “near-term
-80 liquidity requirements.” South Korea has deferred payments Tax CAPEX of airport landing, parking and facility Revenue Cash burn Crew costs Fixed costs Debt interest fees. State-run banks have also agreed Variable costs Semi-fixed costs to provide 300 billion won ($245 mil- Source: IATA Working capital charge lion) in unsecured loans to help low- cost carriers that have been hard-hit presented very soon to the president. a 6 billion Norwegian krone ($580 mil- by plummeting air traffic. The most We willSource: then IATA take action as and when lion) loan guarantee package for the recent step is a proposal for a 30-50% it is needed according to market con- country’s airlines, with up to half of aircraft property tax reduction for ma- ditions, with the sole strategic aim of that earmarked for Norwegian. But the jor airlines including Korean Air and preserving our key industries.” government said its provision of 90% of Asiana Airlines, although it has yet to The French government will have to the total sum was contingent on the fi- be finalized by the government. work out a way to coordinate help for nancial sector supplying the remaining South Korea’s Ministry of Infrastruc- Air France-KLM with the Netherlands, 10%. Finland has also proposed a €600 ture, Land and Transport has met with which owns a 14% stake in the airline million statutory pension premium loan airlines to explore measures to help the group. The Dutch government made guarantee for Finnair. industry. Airlines also held a separate the controversial purchase of the stake Meanwhile in the UK, the govern- meeting to discuss potential options for a year ago to give it a voice in strategic ment has effectively told the country’s government aid and are likely to push decisions for the group. airlines that they must exhaust all for further assistance. In Germany, too, the government other avenues to shore up their cash The Hong Kong Airport Authority, has launched a multibillion-euro res- reserves and protect their liquidity backed by the government, has rolled cue package from which airlines, OEMs before turning to the treasury for as- out an HK$1 billion ($129 million) and aerospace suppliers can benefit. sistance. UK Finance Minister Rishi package of financial relief to the avia- Lufthansa is in talks with the govern- Sunak wrote to airlines and airports tion industry. About two-thirds of this ment about loan guarantees and other March 24 insisting that they first tap comprises a government waiver of air options, including a minority share- their own shareholders for additional traffic control charges for the 2019-20 holding after the airline has cut back. funding to get them through the cur- year, which will be passed on to users. Like other businesses, it benefits from rent crisis. Other forms of airport fee relief for recently passed legislation that allows Asia-Pacific governments also are airlines and airport users make up the the state to partially take over em- taking steps to support the airline in- remaining third of the package. c
20 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMERCIAL AVIATION an entity of negligible size. The move ployee salaries for a period of up to 12 dustry during the crisis. Some moved The Aerospace Supply Chain’s later this year, lower long-term rates. to nationalize Alitalia is part of a €25 months if they are forced into part-time early to introduce packages based on He has lots of company in thinking billion economic support package ap- work. Condor and TUIfly have asked waivers of fees and charges, and state- Worst Falloff Ever that. “With airlines globally effective- proved on March 16 aimed at helping for government-backed loans to bridge backed loans for airlines have been of- ly parking the vast majority of their the country, which is still in lockdown, the period during which essentially fered. Some governments are consid- > ANALYSTS SEE 25% HITS TO NARROWBODIES AND WIDEBODIES fleets and an airline industry recovery recover from the COVID-19 crisis. no flights are taking place. Industry ering additional forms of financial aid likely to take several years, we expect French authorities have promised sources say they are likely to be helped. for carriers, with more likely to follow. > FACTORIES STRUGGLE UNDER HEALTH QUARANTINES AND aircraft production rates at Airbus to do whatever it takes to support the Condor could be taken over temporari- The Singapore government is a lead- WORKER FEARS and Boeing to fall materially,” says an- big companies in France, including Air ly by the government through the KfW er in this regard, unveiling significant alyst Cameron Doerksen of National France-KLM, in which it holds a 14.3% development bank. measures to help aviation and other Michael Bruno Washington and Thierry Dubois Lyon Bank of Canada Financial Markets. stake. Economy Minister Bruno Le Norwegian Air Shuttle was in trouble sectors on March 26. These include “Demand for new aircraft will collapse Maire said March 19: “We have several before the COVID-19 crisis hit, but the funding 75% of up to S$4,600 ($3,200) year ago, many commercial Tier 1 defense primes and OEMs ap- in the near term.” options on the table for all big industrial long-haul low-cost carrier said March of aviation workers’ monthly pay and aerospace suppliers were parently are not cutting workforces Analysts Rob Stallard and Karl Oehl- companies that could be under threat 24 that it had reached an agreement providing S$350 million in fee relief for A wondering how they were yet, many—Boeing for one—have fro- schlaeger of Vertical Research Part- on the market. They include increasing with banks that would allow it to unlock airlines. This is part of a massive S$48 ever going to meet rising production zen hiring. They also are rushing to ners foresee a 40% plummet in reve- or taking a stake, or even nationaliza- an initial tranche of state-backed aid. billion economic stimulus package an- rates set by leading OEMs as industry secure billions of dollars in new financ- nue passenger miles (RPM) this year, tions. All options will be studied and The Norwegian government launched nounced by the government. faced historic backlogs of airliners to ing as a short-term liquidity freeze the largest RPM drop in the history of Singapore Airlines (SIA) is raising build. Now some suppliers might be roils every market. In the latter half of commercial aviation. Looking beyond up to S$15 billion through the issue of wondering if they can even survive in March, Northrop Grumman priced that, they see a revised requirement A I E S C new shares and bonds, with the back- the post-COVID-19 world. $2.25 billion in debt, General Dynam- for around 6,300 new aircraft over the ing of its majority shareholder, state- For the aerospace manufacturing ics unveiled $4 billion in long-term next five years, compared with their $80 owned Temasek Holdings. SIA will sector, the novel coronavi- previous forecast of about 60 offer shareholders S$5.3 billion in new rus pandemic and ensuing Companies More Exposed 8,300 aircraft. By type, equity and up to S$9.7 billion through economic falloff combines they envision about 1,540 40 to the Commercial Aftermarket Cash burn of 10-year mandatory convertible bonds. the sudden shock of lost fewer narrowbodies and Degree of focus on civil aerospace 20 $61 billion in These will be offered to them on a business after the Sept. 11, roughly 380 fewer wide- second quarter pro-rata basis, and both issuances will 2001, terrorist attacks with bodies, both roughly 25% 0 be treated as equity on the company’s the drip-drip of worsen- cuts versus their prior de- -20 balance sheet, says SIA. ing news during the 2008 mand model. The market
-40 SIA has also arranged a S$4 billion financial crisis and Great for widebodies will be hurt
U.S. $ billion during quarter bridge loan facility with DBS Bank, Recession. It is shaping more than for narrowbod- -60 which it said will support “near-term up to be the worst collapse ies, cementing the latter
-80 liquidity requirements.” in business that commer- as the unrivaled airliner South Korea has deferred payments cial aerospace and the for decades, according to Tax CAPEX of airport landing, parking and facility aftermarket have ever multiple analysts and con- Revenue Cash burn Crew costs Fixed costs Debt interest fees. State-run banks have also agreed seen, while other corners sultants. The biggest risk Variable costs Semi-fixed costs to provide 300 billion won ($245 mil- for delivery cuts are to the Source: IATA of aerospace and defense Working capital charge lion) in unsecured loans to help low- (A&D) struggle through Boeing 777 and 787, and cost carriers that have been hard-hit related challenges such the Airbus A330 and A350. presented very soon to the president. a 6 billion Norwegian krone ($580 mil- by plummeting air traffic. The most as liquidity crunches and of focus on the aftermarket* Degree Delivery drop-offs also We willSource: then IATA take action as and when lion) loan guarantee package for the recent step is a proposal for a 30-50% closed factories. Industry would be exacerbated by it is needed according to market con- country’s airlines, with up to half of aircraft property tax reduction for ma- consultants note conversa- * Includes defense services an expected sharp increase ditions, with the sole strategic aim of that earmarked for Norwegian. But the jor airlines including Korean Air and tions with corporate clients Note: GE represents GE Aviation; Honeywell represents Honeywell Aerospace in aircraft retirements. Ag- preserving our key industries.” government said its provision of 90% of Asiana Airlines, although it has yet to where Friday’s worst-case ing, larger models are es- The French government will have to the total sum was contingent on the fi- be finalized by the government. scenario becomes Mon- Source: Roland Berger pecially vulnerable for sev- work out a way to coordinate help for nancial sector supplying the remaining South Korea’s Ministry of Infrastruc- day’s best-case desire. notes, and Honeywell International eral reasons, including fuel inefficiency Air France-KLM with the Netherlands, 10%. Finland has also proposed a €600 ture, Land and Transport has met with Each business day seems to bring announced a $6 billion loan agreement. and looming maintenance check costs. which owns a 14% stake in the airline million statutory pension premium loan airlines to explore measures to help the an announcement of another commer- “The biggest question is what is Targeted fleets could include Boeing group. The Dutch government made guarantee for Finnair. industry. Airlines also held a separate cial supplier in Tier 2 or below laying going to happen with air travel, and 747s, 757s and 767s and Airbus A380s. the controversial purchase of the stake Meanwhile in the UK, the govern- meeting to discuss potential options for off staff, shelving investments, cutting here the spread of scenarios is quite Even middle-aged A320s and 737 Next a year ago to give it a voice in strategic ment has effectively told the country’s government aid and are likely to push pay and taking other actions aimed at wide, from a ‘decent recovery by the Generation airframes might be retired. decisions for the group. airlines that they must exhaust all for further assistance. shoring up balance sheets. Triumph end of the year’ to ‘we’ll never get back The effect is a double whammy for In Germany, too, the government other avenues to shore up their cash The Hong Kong Airport Authority, Group, Astronics, CAE and more in to where we were before the crisis’ be- many suppliers, particularly those has launched a multibillion-euro res- reserves and protect their liquidity backed by the government, has rolled March announced workforce cuts, cause behaviors will have changed, at- that boosted their focus and revenue cue package from which airlines, OEMs before turning to the treasury for as- out an HK$1 billion ($129 million) following those of TransDigm Group, titudes will have changed,” says Man- generation around commercial after- and aerospace suppliers can benefit. sistance. UK Finance Minister Rishi package of financial relief to the avia- Spirit AeroSystems and others in Jan- fred Hader, co-head of Roland Berger’s market opportunities (see graphic). Lufthansa is in talks with the govern- Sunak wrote to airlines and airports tion industry. About two-thirds of this uary and February. Wichita aerostruc- global A&D practice. Roland Berger, Oliver Wyman, JP ment about loan guarantees and other March 24 insisting that they first tap comprises a government waiver of air tures giant Spirit warns more tighten- He says the pandemic is the “second Morgan analysts and others have options, including a minority share- their own shareholders for additional traffic control charges for the 2019-20 ing could be coming. General Electric black swan to hit in a row,” following warned of a hit of up to 40% to after- holding after the airline has cut back. funding to get them through the cur- year, which will be passed on to users. Aviation has furloughed workers. the Boeing 737 MAX’s production halt. market revenue streams this year. Like other businesses, it benefits from rent crisis. Other forms of airport fee relief for Several suppliers also announced Hader predicts Airbus and Boeing will There are few places to hide. Suppli- recently passed legislation that allows Asia-Pacific governments also are airlines and airport users make up the that they have drawn down lines of announce new, lower, 2020 produc- ers will not be able to diversify much the state to partially take over em- taking steps to support the airline in- remaining third of the package. c credit available to them. And while tion rates for airliners in April—and into business jets, for instance, as an-
20 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 21 COMMERCIAL AVIATION U S D I H S
G INI
alysts continue to sour on the pros- fi nal assembly facility for the F-35, Gov- see a problem in a 2-3-week production pects for Bombardier and Embraer as ini notes. The latest monthly survey of suspension, comparing it to a busi- stand-alone business aircraft-makers local businesses from the Federal Re- ness-as-usual holiday period. Despite due to the potential for a permanent serve Bank of Dallas, released March protection measures on site, a CGT reduction in business travel from in- 30, found plenty of angst. “Business clo- representative would rather avoid hun- fection fears and recession cutbacks. sures are causing supply-chain disrup- dreds of workers propagating the virus. “Demand for business jets is histor- tions/stoppages and must end quick- Still, unions stopped short of using ically linked to the broader business ly—within two weeks—or the impact the so-called right of withdrawal, seen cycle, so the coming recession will al- will last a decade in my opinion,” one as their “nuclear option.” Under that most certainly hurt demand for new manufacturing executive told the bank. clause, if an employee perceives a “se- business jets,” Doerksen says. It sounds the same in France. For rious and imminent” danger to their The defense industrial base—now the supply chain, the bottom line is health, they may legally stop working. widely considered the best end-market uncertainty. CEOs face difficulties “Unions know a complete stop of in which to be across A&D, due to lon- planning on the number of employees production activity is not in their in- ger-term procurements and govern- who will show up in the morning. terest. They are walking a fi ne line,” ment protection of contractors—is not “People are scared,” says Safran says a French analyst, speaking on beyond risks either. Primes and suppli- CEO Philippe Petitcolin. “We do not condition of anonymity. ers are anxious about the possibility of ask 100% of [our] workers to come For some companies, the conun- having to close facilities due to health to work; we only ask that production drum is more about technical needs quarantines or because workers just lines keep operating to deliver our versus fi nancial risks. Some produc- fear becoming infected, Eric Fannings, products to those customers who are tion facilities are based on continuous Aerospace Industries Association CEO still open for business.” processes, as opposed to the manu- and president, tells Aviation Week. But some smaller businesses have facturing of discrete objects. After a While trade representatives man- halted operations. “Some small sup- shutdown, restarting is complex. aged to help push U.S. Defense and pliers have paused for 2-4 weeks,” says “Take a 3-hectare [7.5-acre] facility Homeland Security department o - Petitcolin. “If they do not resume work with a convoluted network of ducts; cials in March to declare the defense after that period, we will have a hard every gate setting and confi guration sector part of the nation’s critical infra- time.” Safran has an estimated 2-3 is critical for the quality of the fi nal structure—helping defense primes and weeks of production inventory. product,” says Stephane Albernhe, Ar- suppliers to convince state and local of- Unions have expressed reluctance chery Strategy Consulting president. fi cials to allow them to stay open while about resuming work. When Airbus If the facility is shut down, impurities most other businesses shutter—a heat- announced it was partially resuming may form in the ducts and cause “non- map by consultancy Govini of risks to production at its French factories, quality” problems, says Albernhe. Ev- major defense contracting communities unions reacted negatively or, at best, ery setting would have to be redefi ned. shows reason for concern (see map). cautiously. Some, like the CFE-CGC ex- Companies operating such factories For instance, the key centers of ma- ecutive employees union, did not oppose may have to choose the lesser of two jor defense contractors, such as Lock- the resumption, as long as the required evils. Continuing production may cause heed Martin Aeronautics, are in the health protection measures were taken. rocketing inventory costs. Stopping it Dallas-Fort Worth metroplex, as is the Others, such as the CGT union, do not may create even greater problems. c
22 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMERCIAL AVIATION MITS IS I AI AFTIT U S D I H S AW Hed Here Two Lines of Copy Two in the fi nancial year ending March 31, The sixth SpaceJet prototype made 2021. First delivery follows certifi ca- Lines Two Lines its initial ight from the program’s tion, so the delay must be at least nine nal assembly base at Nagoya. months. Looking toward the transfer > DECK COPY HERE ONE LINE of FTV10 to Moses Lake, the spokes- man said then: “We will have a better > DECK COPY HERE TWO LINES DECK COPY HERE TWO LINES COPY understanding of our schedule once HERE TWO LINES this happens, because as it begins its portion of our fl ight-test program, we Name Name City will enter the fi nal phase of TC [type certifi cation] fl ight test.” ropCap Interstate Black 9.5 on The twin-engine SpaceJet is pow- 10/5 ered by the Pratt & Whitney PW1200. D When the program was launched in 2008, fi rst delivery was scheduled for late 2013. All Nippon Airways is the Mitsubishi Aircraft Flies First launch operator. FTV10, at first called 10010, was SpaceJet of Revised Design tested for basic aircraft performance in normal operating conditions over THE NEXT STEP IS TO SEND THE AIRCRAFT TO MOSES LAKE the Pacific Ocean. The pilots were > Hiroyoshi Takase and Akira Udagawa. G INI > AFTER THAT, THE SCHEDULE SHOULD BECOME CLEARER It handled as expected, Takase says. Four SpaceJets of the superseded alysts continue to sour on the pros- fi nal assembly facility for the F-35, Gov- see a problem in a 2-3-week production Bradley Perrett Beijing design are at Moses Lake. The fi fth pects for Bombardier and Embraer as ini notes. The latest monthly survey of suspension, comparing it to a busi- has been kept at Nagoya for ground stand-alone business aircraft-makers local businesses from the Federal Re- ness-as-usual holiday period. Despite lying a sixth SpaceJet proto- plant. The aircraft is a SpaceJet testing. due to the potential for a permanent serve Bank of Dallas, released March protection measures on site, a CGT type on March 18, Mitsubishi M90—the version designed for 88 All these are also SpaceJet M90s. reduction in business travel from in- 30, found plenty of angst. “Business clo- representative would rather avoid hun- FAircraft took a big step toward passengers in a standard, all-econ- To better suit major U.S. airlines’ pi- fection fears and recession cutbacks. sures are causing supply-chain disrup- dreds of workers propagating the virus. certifi cation of the regional jet, though omy confi guration; it was previously lot contracts—which, contrary to ex- “Demand for business jets is histor- tions/stoppages and must end quick- Still, unions stopped short of using the company is not saying when ex- called the MRJ90. pectations in 2008, have not become ically linked to the broader business ly—within two weeks—or the impact the so-called right of withdrawal, seen actly it hopes to reach that milestone. Most SpaceJet testing is taking less restrictive—the second version cycle, so the coming recession will al- will last a decade in my opinion,” one as their “nuclear option.” Under that The fl ight came 1.5 months after the place in the U.S. at Moses Lake, will be the M100. Despite its designa- most certainly hurt demand for new manufacturing executive told the bank. clause, if an employee perceives a “se- company announced a sixth program Washington. “Our next priority be- tion, it will be smaller than the M90, business jets,” Doerksen says. It sounds the same in France. For rious and imminent” danger to their delay—and for the fi rst time did not comes preparing for the FTV10 ferry with standard all-economy seating for The defense industrial base—now the supply chain, the bottom line is health, they may legally stop working. even name a target date for complet- fl ight to the U.S., joining the fl ight- 84. Within the weight limits that the widely considered the best end-market uncertainty. CEOs face difficulties “Unions know a complete stop of ing development. The extension will test fleet and beginning the final U.S. airlines’ pilot contracts impose in which to be across A&D, due to lon- planning on the number of employees production activity is not in their in- be at least nine months long, however. phase of certifi cation fl ight test,” the on outsourcing carriers, the M100 ger-term procurements and govern- who will show up in the morning. terest. They are walking a fi ne line,” Mitsubishi Aircraft expects to nar- spokesperson says. achieves a better combination of ment protection of contractors—is not “People are scared,” says Safran says a French analyst, speaking on row down its outlook once the new The previous fi ve SpaceJet proto- payload and range than the M90 and beyond risks either. Primes and suppli- CEO Philippe Petitcolin. “We do not condition of anonymity. prototype has joined the program’s types were built before Mitsubishi Air- former MRJ70. ers are anxious about the possibility of ask 100% of [our] workers to come For some companies, the conun- fl ight-testing operation in the U.S. craft discovered in 2016 that design The program lost a major customer having to close facilities due to health to work; we only ask that production drum is more about technical needs The aircraft that fl ew on March 18 changes were necessary to achieve in October, when Trans States Hold- quarantines or because workers just lines keep operating to deliver our versus fi nancial risks. Some produc- is the fi rst that conforms to the new, certification. Avionics and wiring ings canceled an agreement to buy fear becoming infected, Eric Fannings, products to those customers who are tion facilities are based on continuous certifi able design of the regional jet, needed to be moved to improve sur- 50 SpaceJets and take options on 50 Aerospace Industries Association CEO still open for business.” processes, as opposed to the manu- formerly called the MRJ. The proto- vivability in case of water ingress or more. That company, the owner of and president, tells Aviation Week. But some smaller businesses have facturing of discrete objects. After a type, FTV10, will be the one used most explosions. This prompted the com- several carriers in the U.S., has since While trade representatives man- halted operations. “Some small sup- shutdown, restarting is complex. heavily for the remaining test-fl ying pany to defer scheduled fi rst delivery decided to close one of them, Trans aged to help push U.S. Defense and pliers have paused for 2-4 weeks,” says “Take a 3-hectare [7.5-acre] facility for the program, the company says. from mid-2018 to mid-2020. States Airlines. Homeland Security department o - Petitcolin. “If they do not resume work with a convoluted network of ducts; Two more aircraft of that design But that outlook became highly The contract was replaced by one cials in March to declare the defense after that period, we will have a hard every gate setting and confi guration are in the fi nal stages of production, doubtful in November 2019, when from Mesa Airlines in the previous sector part of the nation’s critical infra- time.” Safran has an estimated 2-3 is critical for the quality of the fi nal a spokesperson says. Mitsubishi Air- Mitsubishi Aircraft majority owner month for the same order and option structure—helping defense primes and weeks of production inventory. product,” says Stephane Albernhe, Ar- craft intends to use them mainly for and SpaceJet airframe contractor quantities and specifi cally covering suppliers to convince state and local of- Unions have expressed reluctance chery Strategy Consulting president. ground tests. “With the completion Mitsubishi Heavy Industries (MHI) the M100 version. Another U.S. cus- fi cials to allow them to stay open while about resuming work. When Airbus If the facility is shut down, impurities of FTV10’s first flight, Mitsubishi said the schedule was under review. tomer, SkyWest Airlines, ordered 100 most other businesses shutter—a heat- announced it was partially resuming may form in the ducts and cause “non- Aircraft Corp. is prepared to enter Also, FTV10 was clearly running late SpaceJets (MRJs at the time) in 2012 map by consultancy Govini of risks to production at its French factories, quality” problems, says Albernhe. Ev- the fi nal phase of certifi cation fl ight by then; it had been expected to join and took options on 100 more. major defense contracting communities unions reacted negatively or, at best, ery setting would have to be redefi ned. testing for the SpaceJet M90,” the the fl ight-testing e ort in late 2018. De- Mitsubishi Aircraft is reshuffling shows reason for concern (see map). cautiously. Some, like the CFE-CGC ex- Companies operating such factories company says. lays in receiving parts were to blame, executive positions. In April, Presi- For instance, the key centers of ma- ecutive employees union, did not oppose may have to choose the lesser of two FTV10 was in the air for 1 hr. 47 according to the Nikkei newspaper. dent Hisakazu Mizutani will become jor defense contractors, such as Lock- the resumption, as long as the required evils. Continuing production may cause min. after taking o at 2:53 p.m. local Mitsubishi Aircraft finally nar- chairman, replaced in his current role heed Martin Aeronautics, are in the health protection measures were taken. rocketing inventory costs. Stopping it time from Nagoya Airport, the loca- rowed down the outlook on Feb. 6, say- by Takaoki Niwa, president of MHI Dallas-Fort Worth metroplex, as is the Others, such as the CGT union, do not may create even greater problems. c tion of the program’s fi nal assembly ing the aircraft would not be certifi ed America. c
22 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 2 COMMERCIAL AVIATION C D I S C Domestic Networks Provide Safety Domestic International ANA A Net for Asia-Pacific Carriers > SIA, CATHAY ARE MORE VULNERABLE TO INTERNATIONAL DECLINE DOMESTIC TRAFFIC IS EXPECTED TO BOUNCE BACK FASTER > Adrian Schofield
he COVID-19 crisis shows that international traffic look more exposed. A A while it is good to have a glob- While international travel was the *Measured in available seat kilometers. ally diverse network, a strong first to be hit, the coronavirus crisis T Sources: CAPA – Centre for Aviation and OAG domestic operation is a major advan- has caught up with many domestic Sources: CAPA – Centre for Aviation and OAG tage for carriers when a shock disrupts networks as governments increasing- international markets were progres- international traffic flows. ly lock down internal movement. But sively closed off due to tightening travel Industry logic holds that a broad domestic networks can be expected to restrictions. spread of international routes lessens return sooner, and demand likely will SIA has been forced to ground 138 an airline’s reliance on any single mar- recover more quickly. of its 147 aircraft and suspend 96% of ket, including its home patch. So if a The Asia-Pacific region provides its capacity through at least the end of downturn occurs in one country or case studies of the benefits and limita- April. SIA notes that “without a domes- region, carriers can divert resources tions of different approaches. Singa- tic [operation] the group’s airlines be- to unaffected areas. Many successful pore Airlines (SIA) and Cathay Pacific come more vulnerable” when countries airlines have built their models around are examples of airlines that rely exclu- restrict or ban international travel. this concept. sively on international networks, and Cathay Pacific likewise plans to cut And that approach makes sense— lean heavily on connecting internation- its passenger capacity by 96% in April until something such as a pandemic al markets via their hubs. and May. The airline will operate just a appears out of nowhere to trigger At first both carriers were hurt “bare skeleton” schedule, and even this global border closures. Then domes- due to their relatively high number of could be under threat if more travel re- tic networks become a godsend, and routes to mainland China, which was strictions are imposed. carriers that depend on connecting the first market affected. Then other Japan Airlines (JAL), All Nippon
travel easier, helping to improve national output a bit. Obeying Orders, Chinese The Civil Aviation Administration of China has said sev- Airlines Lift Capacity eral times that the government will help airlines recover from the effects of the pandemic, especially those that make an extra effort to assist the country. There are no specifics > CAPACITY HAS BEEN FLAT AND MODERATE on future support, but airline managers are hopeful. INDUSTRY MANAGERS HOPE FOR FUTURE The government expects little from international opera- > tions. Although airlines are presumed to keep open minimal GOVERNMENT SUPPORT connections to foreign countries, they are forbidden from increasing capacity because China fears reimportation of Bradley Perrett Beijing the coronavirus that began in Wuhan. hinese domestic airline activity is not as good as it Domestic capacity for the week of March 30, measured looks. The airlines are doing national service: facil- by seats offered, should be 60% of 2019 levels, according to Citating economic recovery and creating the impres- OAG and Aviation Week Network’s CAPA – Centre for Avia- sion of a return to normality to suit government policy—not tion. Since growth for 2020 was expected before the corona- their profitability. virus hit, the airlines are flying roughly 55% of the capacity Domestic capacity is more or less holding up at a mod- they would have offered in the absence of the pandemic. erate level reestablished early in March, when the country Expected domestic capacity for the week of March 30 was well on its way to bringing the COVID-19 pandemic was down about 8% from a week earlier—contrasting enor- under at least temporary control. But the carriers have not mously with the 35% surge that the airlines had planned. followed through on plans to surge the offered number of The reasoning behind the decision not to surge capacity seats by more than a third in the week of March 30. Also, is clearer than the impetus to do so in the first place. The av- aircraft are only about two-thirds full and fares remain low. erage flight was only 66% full on March 25 and 26, according Loads are edging higher, however. to a compilation of industry-wide load factors obtained by The industry is evidently flying unnecessary capacity be- Aviation Week. This data includes international operations cause the government has been trying, for about six weeks, but is dominated by domestic. The load factor was about 57% to get the country back to normal. And Beijing expects all for the first nine days of the month and 83% for March 2019. industries to cooperate. Reasonably high flight frequencies Comprehensive data for yields is unavailable, but casual send a signal to the country that commercial aviation is checks with travel agencies reveal that fares are deeply dis- operating more or less normally. They also make business counted; for example, normally, the price for a one-way flight
24 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST COMMERCIAL AVIATION C D I S C
Domestic International Domestic Networks Provide Safety Airways (ANA) and Korean Air are is the world’s busiest domestic market. As recently as March 13, Virgin Aus- ANA A other examples of airlines for which In terms of seats rather than ASK, do- tralia said it was “insulated” to some Net for Asia-Pacific Carriers international connecting traffic is a key mestic capacity has increased from extent from the international market part of their strategies. However, un- 25.5% to 60.6% of the total for Korean. decline, since it is a “predominantly do- > SIA, CATHAY ARE MORE VULNERABLE TO INTERNATIONAL DECLINE like Cathay and SIA, these carriers also Garuda Indonesia typically has more mestic airline” with 78% of its revenue have domestic networks. And their do- domestic seats than international—by from that part of the business. Since DOMESTIC TRAFFIC IS EXPECTED TO BOUNCE BACK FASTER mestic operations have taken on great- a factor of three in 2019. The airline has then, however, it has been forced to > er importance since the COVID-19 out- noted that its extensive domestic net- suspend 90% of its domestic capacity. Adrian Schofield break began, as they have shrunk far work, spread over many islands, gives Carriers in Vietnam also have had less than international services. it an advantage over other carriers to shut down most of their domestic he COVID-19 crisis shows that international traffic look more exposed. A A This dynamic has caused the share more reliant on hubs. routes due to government restric- while it is good to have a glob- While international travel was the *Measured in available seat kilometers. of domestic operations to increase for Airlines based in Australia also had tions. Vietnam Airlines has canceled ally diverse network, a strong first to be hit, the coronavirus crisis all three of the airlines. In fact, the two a distinct advantage when COVID-19 all of its domestic flights except for T Sources: CAPA – Centre for Aviation and OAG domestic operation is a major advan- has caught up with many domestic Sources: CAPA – Centre for Aviation and OAG Japanese carriers now have more do- struck due to their broad domestic one flight per day on its three core tage for carriers when a shock disrupts networks as governments increasing- international markets were progres- mestic capacity—as measured in avail- networks, which remained in opera- trunk routes. Vietnam’s Hanoi-Ho Chi international traffic flows. ly lock down internal movement. But sively closed off due to tightening travel able seat kilometers (ASK)—than in- tion after international services were Minh City route is usually one of the Industry logic holds that a broad domestic networks can be expected to restrictions. ternational, reversing the trend from a shut down. However, their domestic busiest domestic routes in the region, spread of international routes lessens return sooner, and demand likely will SIA has been forced to ground 138 year ago, according to data from CAPA services have now also been dramat- and likely will be again when the pan- an airline’s reliance on any single mar- recover more quickly. of its 147 aircraft and suspend 96% of - Centre for Aviation and OAG. For the ically cut back as restrictions on local demic eases. ket, including its home patch. So if a The Asia-Pacific region provides its capacity through at least the end of week of March 30, 63.7% of ANA’s to- travel tighten. Air New Zealand has reduced its downturn occurs in one country or case studies of the benefits and limita- April. SIA notes that “without a domes- tal capacity was domestic, compared Qantas will cease all internation- international capacity by 95% and on region, carriers can divert resources tions of different approaches. Singa- tic [operation] the group’s airlines be- to 38.6% for the week of April 1, 2019. al service from the end of March April 2 raised domestic cuts to the to unaffected areas. Many successful pore Airlines (SIA) and Cathay Pacific come more vulnerable” when countries For JAL, domestic comprises 55% now through at least the end of May, and same level. Domestic demand and airlines have built their models around are examples of airlines that rely exclu- restrict or ban international travel. compared to 34.4% a year ago. will reduce domestic capacity by 60%. services will likely increase when the this concept. sively on international networks, and Cathay Pacific likewise plans to cut Korean Air’s domestic ASK share for Qantas CEO Alan Joyce predicts the country’s internal travel lockdown is And that approach makes sense— lean heavily on connecting internation- its passenger capacity by 96% in April the week of March 30 has risen to 8.1% domestic market will recover far fast- lifted. But CEO Greg Foran notes the until something such as a pandemic al markets via their hubs. and May. The airline will operate just a of its total, compared to 3.1% a year er than the international side. Domes- carrier is heavily reliant on internation- appears out of nowhere to trigger At first both carriers were hurt “bare skeleton” schedule, and even this earlier. South Korea does not have as tic restrictions are likely to be lifted al tourism, and because this traffic will global border closures. Then domes- due to their relatively high number of could be under threat if more travel re- extensive a domestic network as Japan, earlier, and consumer confidence may not bounce back for some time; there tic networks become a godsend, and routes to mainland China, which was strictions are imposed. and routes are mostly shorter. But it also be more easily restored on flights will be “a flow-on effect on our domes- carriers that depend on connecting the first market affected. Then other Japan Airlines (JAL), All Nippon does have the Seoul-Jeju route, which within the country. tic network.” c
Obeying Orders, Chinese travel easier, helping to improve national output a bit. doubt many potential tourists, fearful for their jobs, prefer The Civil Aviation Administration of China has said sev- Chinese Airline Operations to save their money. Airlines Lift Capacity eral times that the government will help airlines recover Feb. 17-April 5, 2020 vs. 2019 After the government in mid-February called for the from the effects of the pandemic, especially those that make 15 75% country to get back to work, tens or hundreds of millions an extra effort to assist the country. There are no specifics Load Factor (percent) of people began returning to offices and factories in big cit- > CAPACITY HAS BEEN FLAT AND MODERATE on future support, but airline managers are hopeful. ies from their hometowns where they had been spending INDUSTRY MANAGERS HOPE FOR FUTURE The government expects little from international opera- the Lunar New Year when the coronavirus emergency was > tions. Although airlines are presumed to keep open minimal recognized in late January. Some demand for flights still GOVERNMENT SUPPORT 10 50 connections to foreign countries, they are forbidden from appears to be coming from people returning to work, in- increasing capacity because China fears reimportation of dustry managers say. But after so many weeks, that effect Bradley Perrett Beijing the coronavirus that began in Wuhan. is surely dwindling. hinese domestic airline activity is not as good as it Domestic capacity for the week of March 30, measured Seats (millions) Weekly That leaves business travel as the likely main support looks. The airlines are doing national service: facil- by seats offered, should be 60% of 2019 levels, according to 5 25 for domestic demand in the industry, although even in Citating economic recovery and creating the impres- OAG and Aviation Week Network’s CAPA – Centre for Avia- this activity it is easy to see restraints. Anecdotes suggest sion of a return to normality to suit government policy—not tion. Since growth for 2020 was expected before the corona- that many companies are keeping belts tight and have em- their profitability. virus hit, the airlines are flying roughly 55% of the capacity braced video conferencing. State enterprises have less to Domestic capacity is more or less holding up at a mod- they would have offered in the absence of the pandemic. 0 0 fear from financial losses than private businesses do, but erate level reestablished early in March, when the country Expected domestic capacity for the week of March 30 20 25 29 5 10 15 20 25 31 5 they must pay particular attention to government demands was well on its way to bringing the COVID-19 pandemic was down about 8% from a week earlier—contrasting enor- February March April to minimize travel to help prevent a recurrence of conta- under at least temporary control. But the carriers have not mously with the 35% surge that the airlines had planned. Note: load factor data available for March 1-26 only. gion. (This policy is at odds with expecting airlines to offer followed through on plans to surge the offered number of The reasoning behind the decision not to surge capacity so many seats.) seats by more than a third in the week of March 30. Also, is clearer than the impetus to do so in the first place. The av- Sources: CAPA – Centre for Aviation and OAG; and internal industry statistics The industry load factor began picking up on March 10, aircraft are only about two-thirds full and fares remain low. erage flight was only 66% full on March 25 and 26, according between Beijing and Shanghai is about CNY1,200 ($170), but when it jumped to 60%. Then it tended higher, reaching Loads are edging higher, however. to a compilation of industry-wide load factors obtained by the airlines are now typically asking for around CNY400. 63% by March 24, followed by two days at 66%. More recent The industry is evidently flying unnecessary capacity be- Aviation Week. This data includes international operations Anecdotally, almost no leisure travel is happening in China information is unavailable, but the upward trend is clear. cause the government has been trying, for about six weeks, but is dominated by domestic. The load factor was about 57% right now. One obvious reason is that it would not be much Domestic capacity has been less stable, but the trend to get the country back to normal. And Beijing expects all for the first nine days of the month and 83% for March 2019. fun. Amusements such as night clubs and karaoke bars are can be characterized as flat: The weekly number of seats industries to cooperate. Reasonably high flight frequencies Comprehensive data for yields is unavailable, but casual still generally closed—the rules vary from city to city—and offered wandered from 8.5 million in the first week of March send a signal to the country that commercial aviation is checks with travel agencies reveal that fares are deeply dis- though some scenic attractions reopened a few weeks ago, to a peak of 8.8 million three weeks later, then dropped to operating more or less normally. They also make business counted; for example, normally, the price for a one-way flight last week the operators were told to close indoor facilities. No 8.1 million planned for the week of March 30. c
24 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 25 POINT/COUNTERPOINT
China’s Appetite for Aircraft May Disappoint By Richard Aboulafia etliner market recoveries for the past few de- travel demand drop. While 2018 saw a record of 355 cades have greatly benefited from the rise of jetliners delivered to Chinese customers, this was cut JChina, whose market was the only one that almost in half in 2019, to 180 jets. Some of this de- combined fast demand growth with sheer size. Over crease was due to the cessation of Boeing 737 MAX the past two decades, the country grew in impor- deliveries. But Airbus did not exactly pick up the tance to our industry, taking 2% of total Airbus and slack: Deliveries from Airbus fell 12% in 2019, despite Boeing output in 2001 and rising to a peak of 23% in a capacity expansion at the European company’s 2018. The graph below indicates this dramatic in- Tianjin A320 final assembly line. crease in China’s importance to the market. Even before the coronavirus-related traffic col- Our industry is clearly headed into a bust cycle, we lapse, scheduled deliveries in 2020 were slightly low- hope to be followed by a recovery. But this time, the er than 2019’s already low level. In relative and abso- industry might find that post-coronavirus Chinese lute terms, the China market has been halved, and demand is not what it was before and that the recov- given the coronavirus situation, it is quite likely that ery side of a V-shaped market downturn is a bit less demand will fall further before it resumes growth, steep. There are two reasons to be concerned. hopefully in the next few years. But it might not get back to the 2018 peak until 2023 or later. The situation is not completely bleak. L D C China can provide state aid for airlines 350 25% and lessors more readily than most oth- er countries, although that is just a sta- 300 T 20% bilization measure. It is not the same as 250 returning the country and its air travel 200 15% industry to the remarkable growth track it was on as it transformed from a poor 150 10% country to a middle-income one. In terms 100 of its economy and its air travel market, 5% China might be plateauing out. 50 This crisis has worsened China’s rela- 0 0% tions with the U.S. and the West, which 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 were already deteriorating. Looking beyond the post-coronavirus recovery, Source: Teal Group as economic nationalism increases and Western supply chains move away from First, China’s economic problems and its air traf- China—and as state aid plays a bigger role in many fic slowdown started months before COVID-19 was economies due to the coronavirus economic down- identified. Nominally, GDP growth last year was 6.1%, turn—China might pursue an increasingly autarkic but there were plenty of indicators of a less robust future. reality. For example, car sales actually fell more than Building jetliners is already a priority in the coun- 8%. And according to the International Air Trans- try’s 2035 plan, and while the results so far have been port Association, China air travel demand fell from poor, that problem could be solved with trade barri- 12.2% year-over-year growth in late 2018 to just 5.3% ers: Chinese airlines would be forced, against their by October and November 2019. will, to buy local jets. Typically, air travel demand for a fast-growth mar- This bigger concern about China’s aviation future ket like China is roughly twice GDP; that late-2018 is more of a post-2030 problem. But for the com- 12.2% figure is clearly supportive of 6.1% GDP growth, ing few years, the important conclusion is that Chi- capping many years of double-digit growth. The sin- na likely will not play the same big role in a steep gle-digit growth in the second half of 2019 would be V-shaped recovery. The country probably will stay at typical for an emerging economy growing at 2.5-3%. a somewhat muted level of growth in its economy, air China’s recent economic figures reflect a much travel demand and the jetliner market even after the worse reality. Its economy contracted in January COVID-19 crisis passes. There might be a robust Chi- and February for the first time in over half a century. na traffic recovery, but we are unlikely to see the kind Industrial production fell 13.5% from a year earlier. of strong, sustainable growth numbers that benefited China domestic air travel in January fell by 6.8%, the aviation industry for the last two decades. c which was just the start of the COVID-19 impact. Second, China’s jetliner market downturn started Richard Aboulafia is vice president of analysis at Teal Group. a year before COVID-19, in line with the country’s air He is based in Washington.
26 AVIATION WEEK & SPACE TECHNOLOGY/APRIL 6-19, 2020 AviationWeek.com/AWST POINT/COUNTERPOINT POINT/COUNTERPOINT
China’s Appetite for Aircraft No, Nationalism and Protectionism May Disappoint Will Favor China By Richard Aboulafia By Peter Harbison etliner market recoveries for the past few de- travel demand drop. While 2018 saw a record of 355 ince the first aircraft took flight, aviation has the different markets’ return to health and economic cades have greatly benefited from the rise of jetliners delivered to Chinese customers, this was cut moved in lockstep with politics and national secu- security. Combined with a likely pushback on mar- JChina, whose market was the only one that almost in half in 2019, to 180 jets. Some of this de- Srity and has been a major global socio-economic ket liberalism, the resulting constraint on airline net- combined fast demand growth with sheer size. Over crease was due to the cessation of Boeing 737 MAX force for good. It is no coincidence that the economic and work-planning freedom will create a further impedi- the past two decades, the country grew in impor- deliveries. But Airbus did not exactly pick up the political rise of China and Asia in this century has creat- ment to restoring the global system. The priority will tance to our industry, taking 2% of total Airbus and slack: Deliveries from Airbus fell 12% in 2019, despite ed a major power shift in aviation geopolitics, too. Later be on direct links between major countries. Boeing output in 2001 and rising to a peak of 23% in a capacity expansion at the European company’s in this decade, China is projected to overtake the U.S. Network airlines rely on access to a wide range of 2018. The graph below indicates this dramatic in- Tianjin A320 final assembly line. as the world’s largest aviation power. The coronavirus markets around the world, and achieving critical mass crease in China’s importance to the market. Even before the coronavirus-related traffic col- crisis will either accelerate or slow this transition. The depends on multiple feed routes. These factors will Our industry is clearly headed into a bust cycle, we lapse, scheduled deliveries in 2020 were slightly low- smart money would have to be on China’s preeminence. make life difficult for sixth-freedom operators with hope to be followed by a recovery. But this time, the er than 2019’s already low level. In relative and abso- Government leaders are increasingly describing the small or no domestic domain, particularly if liberal industry might find that post-coronavirus Chinese lute terms, the China market has been halved, and coronavirus onslaught as a world war. In fact, it is both market access is in retreat. demand is not what it was before and that the recov- given the coronavirus situation, it is quite likely that much bigger than World War II and very different from China, however, has the great advantage of a mas- ery side of a V-shaped market downturn is a bit less demand will fall further before it resumes growth, it. This time, there are 185 countries fighting it, with sive and still growing government-supported domes- steep. There are two reasons to be concerned. hopefully in the next few years. But it might not get more still to join, and every country is a battlefront. tic market, ensuring both a substantial airline indus- back to the 2018 peak until 2023 or later. Moreover, a collection of allies worked The situation is not completely bleak. more or less in concert in World War II to L D C China can provide state aid for airlines defeat the common foe, a fight led in its later C R P G 350 25% and lessors more readily than most oth- stages by the U.S. Today, there are few signs (2008-20)* er countries, although that is just a sta- of a similar level of cooperation; faced with 300 1,500 30% 20% bilization measure. It is not the same as this invisible invasion, most countries have fo-