Mobil Jet Oil™ 387: Reducing Complexity for Fleet Maintenance

Vol. 21 No. 9 November 2014 orientaviation.com

MAN WITH A MANTRA Low-cost does not mean low quality insists IndiGo’s youthful president, Aditya Ghosh

Aer Lingus boss Asia-Pacific leads Oil glut clouds new MAS CEO? cargo renaissance fuel hedging strategy Asia-Pacific SPECIAL REPORT MRO innovation:an update B: 8.5”

T: 7.7”

S: 6.9”

Mobil Jet Oil™ 387: Reducing complexity for fleet maintenance

Since the dawn of powered flight, ExxonMobil Aviation has deliver superb and consistent performance benefits and the been at the heart of aviation history. desire to reduce operational complexity.

That’s why, today, successful airline fleets all around the world How will Mobil Jet Oil 387 help reduce complexity in fleet rely on the company’s family of Mobil Jet™-branded lubricants maintenance? and expert services. To streamline maintenance plans—as well as plans for lubricant With the recent introduction of its most advanced synthetic jet storage—many airlines are looking for a single jet oil solution to turbine engine lubricant—Mobil Jet Oil™ 387—ExxonMobil has manage their fleet needs. In addition, many operators are looking for B: 11.2” T: 10.5” once again set the benchmark for lubricant innovation. opportunities to reduce risk associated with managing multiple oils. S: 9.5”

To discuss some of the trends affecting the aviation industry, With Mobil Jet Oil 387, we are pursuing oil certifications from as well as the performance benefits of Mobil Jet Oil 387, we all major engine manufacturers, as well as for use in a variety of caught up with the former SAE E-34 Chairperson, Susan Ardito, accessory applications, facilitating the consolidation of lubrication ExxonMobil Aviation product deployment manager. needs to a single product. In so doing, ExxonMobil Aviation can help operators streamline their lubricant needs and reduce the What are the main performance enhancements that potential risk of misapplication across mixed engine aircraft fleets. ExxonMobil Aviation achieved with Mobil Jet Oil 387? What certifications and application approvals does Mobil Jet Oil 387 is the most advanced synthetic jet turbine Mobil Jet Oil 387 currently have? engine lubricant that we have ever created, delivering the combination of performance benefits that engine manufacturers Mobil Jet Oil 387 is approved against some of the most need most—including exceptional engine cleanliness, outstanding demanding industry specifications, including the SAE AS5780 seal compatibility and oxidative stability. High Performance Capability (HPC) and the MIL-PRF-23699-HTS. It is certified for use in a range of GE engine applications, as well Mobil Jet Oil 387 has consistently performed very well in a as numerous Rolls-Royce engines, including the Trent 900 and range of engine technologies, exceeding our expectations with the company’s latest technology, the Trent XWB. regard to oil consumption, pressure and condition—even after extensive hours in operation. In fact, we recently completed an Mobil Jet Oil 387 has been gaining commercial flight experience inspection on an engine that logged more than 10,000 hours for several years. Globally, many carriers have reported great on wing, without a single shop visit. Not only was the engine in success using Mobil Jet Oil 387 in their fleets, some of which excellent condition, but the oil looked brand new. have been using the oil on-wing for more than three years.

What are some of the key industry trends propelling To learn more about Mobil Jet Oil 387 and how it may be able interest in Mobil Jet Oil 387? to help your fleet, visit MobilJetOil387.com or contact an ExxonMobil Aviation representative. The growing interest in Mobil Jet Oil 387 stems from two key factors: the need for advanced lubrication solutions that will

Copyright © 2014 Exxon Mobil Corporation. All rights reserved. All trademarks used herein are trademarks or registered trademarks of Exxon Mobil Corporation or one of its subsidiaries unless otherwise noted.

This advertisement was prepared by BBDO New York Filename: P46352_EML_I01_V4.indd CLIENT: ExxonMobil Lubricants Proof #: 4 Path: Studio:Volumes:Studio:MECHANIC... Created: 10-9-2014 4:53 PM PRODUCT: Mobil Jet Susan Q & A Advertorial Mechanicals:P46352_EML_I01_V4.indd Saved: 10-10-2014 10:05 AM JOB#: P46352 Operators: Brand, Adrienne / Bright, Jordan Printed: 10-10-2014 10:06 AM SPACE: None Print Scale: None BLEED: 8.5” x 11.2” TRIM: 7.7” x 10.5” Fonts Ink Names SAFETY: 6.9” x 9.5” EMprint (Semibold, Regular), Helvetica (Light) Cyan GUTTER: None Graphic Name Color Space Eff. Res. Magenta PUBS: None 111502.jpeg (CMYK; 576 ppi), energy_lives_here_80.eps, exmo_tech_ Yellow Black ISSUE: None grey_cmyk.eps, Mobil_Jet_H_4C-TM.eps TRAFFIC: Darcey Lund ART BUYER: None ACCOUNT: None RETOUCH: Steve Lakeman PRODUCTION: Len Rappaport ART DIRECTOR: None COPYWRITER: None CONTENTS Volume 21, Issue 9

COVER STORY

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ORIENT AVIATION MEDIA GROUP Mailing address: GPO Box 11435 Hong Kong Office: 17/F Hang Wai Commercial Building, 231-233 Queen’s Road East, Wanchai, Hong Kong Tel: Editorial (852) 2865 1013 Fax: Editorial (852) 2865 3966 E-mail: [email protected] Website: www.orientaviation.com

Publisher & Editor-in-Chief MAN WITH Christine McGee E-mail: [email protected] A MANTRA Chief Correspondent Tom Ballantyne Low-cost does not mean low quality says Tel: (612) 9638 6895 Fax: (612) 9684 2776 IndiGo’s youthful president, Aditya Ghosh E-mail: [email protected] COVER PHOTO: BLOOMBERG Greater China Correspondent Dominic Lalk Tel: (852) 2865 1013 Fax: (852) 2865 3966 COMMENT Lima via Los Angeles; Boeing and China’s COMAC E-mail: [email protected] 5 Cargo revival on the way? in biofuel project; China Aviation Supplies has North Asia Correspondent signed a General Terms Agreement for 70 A320s; Geoffrey Tudor Tel: (813) 3373 8368 NEWS Garuda Indonesia has confirmed its order for 50 E-mail: [email protected] 8 Asia-Pacific carriers lead cargo growth B737 MAX family aircraft; Kunming Airlines has

India Correspondent 8 Government changing the rules to favour Jetstar ordered four B737-700NG and six B737MAX; EVA R. Thomas Hong Kong? Airways has leased two B777-300ER from BOC Tel: (852) 2865 1013 E-mail: [email protected] 8 India’s IndiGo sets Airbus record for A320neo Aviation; Mitsubishi has unveiled its first 92-seat 9 THAI president wants 6,000 staff to go MRJ test aircraft; Photographers Rob Finlayson, Colin Parker, 14 Aer Lingus boss tipped for MAS? Graham Uden 14 Etihad unveils new alliance model Design & Production 16 Oil glut clouds fuel hedging strategy Chan Ping Kwan Printing MAIN STORY Printing Station(2008) 20 Asia-Pacific leads air cargo revival ADMINISTRATION

General Manager Shirley Ho 9 Qantas signs wage freeze with engineers E-mail: [email protected] 9 Pratt & Whitney to test Exxonmobil synthetic fuel ADVERTISING 9 Flight Safety and Abu Dhabi Aviation announce flight school South East Asia and Pacific Tan Kay Hui 9 Pan Am plans joint venture Bangkok training Tel: (65) 9790 6090 academy E-mail: [email protected] BUSINESS ROUND UP The Americas / Canada 10 Dreamliner costs drag on Boeing’s positive news Barnes Media Associates Ray Barnes 10 Tigerair Singapore subleases surplus jets NEWS BACKGROUNDERS Tel: (1 434) 770 4108 10 Spring Airlines’ IPO application approved 23 Scoot eyes Greater Japan Fax: (1 434) 927 5101 E-mail: [email protected] 10 Bangkok Airways IPO heavily oversubscribed 32 Support for global tracking system falters 10 Virgin Australia ownership boosts Tigerair 34 Australian aerospace on the hunt for Asian Europe & the Middle East REM International Australia business Stephane de Rémusat 12 SHORTTAKES includes: Cathay Pacific Airways Tel: (33 5) 34 27 01 30 Fax: (33 5) 34 27 01 31 updates Brushwing logo; All Nippon Airways will SPECIAL REPORT E-mail: [email protected] code share with South America’s Avianca to the Asia-Pacific MRO Innovation: an update

© All rights reserved U.S. and with Ethiopian Airways to Europe via 28 Less still means more for Asia-Pacific MROs Wilson Press HK Ltd., Kenya and Addis Ababa; Korean Air and Lan Peru 29 European MRO breaks ground in Indonesia Hong Kong, 2014 have extended their partnership from Seoul to 30 Smart phones drive MRO innovation

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Asia-Pacific leads cargo renaissance

Last month, the International Air Transport Association (IATA) And airlines have begun reintroducing the parked released its latest five year industry forecast. It projected freighters to their fleets. The air cargo market is growing in international freight volumes should increase at an annual line with long-term rates. What comes as even better news is compound rate of 4.1% to 2018, and that the fastest growing that despite a slowing economy China, responsible for 45% of routes would be between the Middle East and Asia, at 6.2%. the region’s air freight and a key to full long-term recovery, is In five years, six of the ten largest international air cargo performing well. markets will be in Asia. They will be China (2), UAE (3), Hong As Wang Zhiqing, deputy administrator of the Civil Aviation Kong (5), Republic of Korea (6), Japan (7), Taiwan (9) and Administration of China (CAAC) told an International Civil India (10). Aviation Organization (ICAO) Air Cargo Development Forum For those in the industry this good news has been a long in Zhengzhou in September (the first time the Mainland has time coming. Air freight business in the Asia-Pacific has been hosted the gathering), that following a decline in cargo in 2011 stagnating since the Global Financial Crisis in 2008 – except for and 2013 “we have finally come out of that in the first half of a brief fillip in 2010. Dozens of big freighters were parked in the this year as domestic freight increased 5.7% and international desert and several airlines closed their air freight divisions. 6.6%”. So it is a relief that air freight is showing strong signs of a Of course, nothing should be taken for granted given the turnaround, particularly in this region which is the source of volatile nature of the economies of the world, and cargo is no nearly 40% of all cargo carried by air. exception. The cargo industry is moving at two speeds. There IATA statistics show that globally freight tonne kilometers may be strong growth in the Asia-Pacific, but the same isn’t true (FTKs) rose 6.1% year-on-year in July and 5.1% in August. But of Europe, where recovery is anemic. As IATA director general the Asia-Pacific was ahead of the game with growth of 6.3%. and CEO, Tony Tyler, pointed out, there may be more business The world’s largest air freight hub, Hong Kong International confidence around, but there also is a long list of political Airport, increased volumes by 8.6% in August. September, and economic risks with the potential to affect business and based on preliminary figures, has performed just as well. Even consumer confidence. better, capacity expanded at the slower pace of 3.4%, which But for now, at least in the Asia-Pacific, the future of air signaled easing yield pressure. cargo is brighter.

TOM BALLANTYNE Chief Correspondent Orient Aviation Media Group

The voice of Asia-Pacific aviation

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Airbus_OrientAviation_Nov.indd Pg1 Prodigious UK 21/10/2014 08:51 REGIONAL ROUND-UP

Asia-Pacific carriers lead global cargo growth

In the next five years, the fastest growing IATA. By 2018, six of the ten largest cargo (2,350,000) and India (2,223,000). IATA air cargo routes will be between the Asia markets will be in the Asia-Pacific. The U.S. said China, the UAE and the U.S. will each and the Middle East, at 6.2% per year, said will be the largest market, at 10,054,000 add more than 1 million tonnes of freight the International Air Transport Association tonnes, followed by China (5,639,000), the to the market by 2018 compared with (IATA) in its new industry forecast to 2018. United Arab Emirates (4,974,000), Germany today and the UAE will replace Germany as Projected international freight volumes (4,763,000), Hong Kong (4,648,000), the world’s third largest air cargo market in should increase at a compound annual Republic of Korea (3,487,000), Japan five years (See Cargo revival gains regional growth rate (CAGR) of 4.1% to 2018, said (3,480,000), Britain (2,808,000), Taiwan traction, page 20). ■

India’s Indigo sets A320neo order record Government changing rules to favour

At press time, Indian domestic passengers, almost JetStar Hong Kong? low-cost carrier, IndiGo was double Jet Airways’ 16.7% and expected to have firmed up its Air India’s 16.6%. Rival LCC, Cathay Pacific Airways (CX) will operation of Qantas in Hong record-breaking $26 billion SpiceJet also outperformed not change its opposition to the Kong, albeit with a majority Memorandum of Understanding both full-service carriers and establishment Jetstar Hong Kong local partner, is still a franchise for (MoU) 250 A320neo jets, a came in second with a market said a senior executive last month. operation.” senior executive familiar with share of 18.6%. Cathay believes the proposed In October, Hong Kong’s the deal told Orient Aviation. And additional competition low-cost carrier (LCC) remains Transport and Housing Bureau, “We’re still working on is on the way. AirAsia India a “branch office of Qantas” and which is in charge of designating some minor additions and launched in June, bringing to fails to meet the legal definition of local carrier status, issued revisions to the deal, but the table an airline group which a local entity needed to obtain an a statement that said it had we’re pretty much set. We’re manages to operate with one Air Operator’s Certificate (AOC). “fine-tuned” the framework of aiming at final closing by the of the lowest unit costs per Speaking at a recent Sydney designation by spelling out the end of the month,” he said. kilometre flown in the industry. conference, the airline’s head of factors it now takes into account The IndiGo commitment is The Singapore Airlines – corporate development, James to also include “public interests”. the biggest single A320 family TATA Group start-up Vistara Barrington, said Hong Kong’s China Eastern Airlines (CEA), order in Airbus’ history, and is is awaiting regulatory approval constitution clearly spells out that Qantas Airways and Shun Tak in addition to purchases of 180 for operations. Once cleared, an airline had to have its principal Holdings – a Hong Kong-based of the A320 family made by the Vistara plans to ‘redefine’ India’s place of business in Hong Kong casino conglomerate – hold Indian low-cost carrier (LCC). domestic market with ‘a brand in order to operate flights from equal 33.33% equity in Jetstar “This new order reaffirms that aims to set new standards’ there. “It looks to us that Jetstar Hong Kong, although Shun Tak’s IndiGo’s commitment to the by offering a full-service luxury doesn’t have its principal place voting rights have been increased long-term development of experience’ at low cost. “The of business in Hong Kong. It is to 51%. This change allows it to affordable air transportation in biggest risk for IndiGo is how a branch office of an Australian appoint four of the seven board India and overseas,” said Aditya the competition behaves, that airline. All the legal advice taken members of the proposed LCC, Ghosh, IndiGo’s president. is, whether AirAsia and others has said it just doesn’t meet the thereby meeting the government’s Speaking to Reuters, the respond more aggressively requirements of the Basic Law,” requirement to be a “Hong 39-year-old said India was now,” Starair’s Vardhan said. Barrington said. Kong-controlled carrier”. a “highly underpenetrated In other news, the “A franchise operation A source close to Jetstar market” and that the majority of Directorate General of of McDonald’s in Hong Kong told Hong Kong’s South China the Airbus narrow-body planes Civil Aviation (DGCA) has with a 51% local partner is still Morning Post it is unlikely it will on order would be for growth commenced the recertification McDonald’s based in North be in business for the upcoming rather than replacement. The of all Indian carriers before a America,” he said. “A franchise peak travel season. ■ LCC has been India’s only scheduled Federal Aviation profitable carrier in the past Administration (FAA) two years, and reported a audit next month. India was six-fold rise in net profit, to 7.87 downgraded to Category 2 billion rupees ($128 million), in January, barring its airlines in the 2012-13 financial year. from adding new flights to the Gurgaon-based IndiGo has U.S. or entering new codeshare become the country’s largest agreements with U.S. airlines. airline by market share. In (See Man with a mantra, page September, it carried 32.8% of 24). ■

8 / ORIENT AVIATION / NOVEMBER 2014 REGIONAL ROUND-UP

New THAI president says 6,000 job must go TRAINING Thai Airways International’s (THAI) third political protests of 2103 that culminated in a president since last December, Siwakiat military coup in May. International visitors fell Pan Am joint venture Jayema, is seeking approval for a four billion off dramatically during the unrest and have opens Bangkok baht (US$126 million) cost cutting program that yet to return to pre-protest numbers. Airlines training centre includes eliminating 6,000 jobs by 2018 from and hotels are reporting that the impact of the the flag carrier’s bloated payroll. Struggling political uncertainty, coupled with the conflicts All Nippon Airways and THAI’s efforts to stay afloat were highlighted by in the Ukraine, have produced very low pre-high low-cost Thai airline, Nok Air, have the airline’s decision to cancel its only remaining season bookings in the resorts of southern announced the establishment destination to Africa, Bangkok to Johannesburg, Thailand, particularly Phuket and Koh Samui. of a flight training school in from January next year. THAI, along with all THAI reported a loss of 7.7 billion baht for its partnership with the Pan Am Thai airlines, has suffered from the prolonged second quarter to September 30. ■ International Flight Academy and a local university. Pan Am Flight Training Academy Centre will operate at the Suvarnabhumi campus of Assumption University, where the facilities will include an A320 Level-D full Motion Flight Simulator, an A320 Multi-Functional Training Device as well as conference areas and classrooms. In early 2015, a B737-NG Level-D Simulator will be added to the training equipment and two more full motion simulators are scheduiled to be operating at the complex in 2016, Qantas signs wage freeze Pratt & Whitney to test said CEO, Gary Anderson. ■ with engineers ExxonMobil’s synthetic fuel Flight Safety and Qantas Airways has reached a four-year pay ExxonMobil and Pratt and Whitney have signed Abu Dhabi plan deal with its aircraft engineers, which includes a commercial agreement to test the energy an 18-month wage freeze, followed by annual provider’s new synthetic jet engine oil, Mobil flight school increases of 3%. The settlement is a major Jet Oil 387, on the engine manufacturer’s step towards achieving the goal of Qantas PurePower engines. The multi-year testing Global leader in flight training, chief executive, Alan Joyce — freezing pay program will begin next year and will include Flight Safety International, across the company, in a strategy to strip all the variants of the PurePower engine. In has signed a Memorandum of A$2 billion ($1.76 billion) in costs from the commercial aviation, PurePower engines power Understanding with Abu Dhabi business within three years. Joyce announced the recently launched Mitsubishi regional jet, Aviation to set up a learning a “confronting” A$2.8 billion net loss in its Embraer’s second generation E-Jets, and are centre in the Middle East, said last financial year, to June 30. Qantas wants to offered as options for the A320neo family. President and CEO, Bruce strike similar deals with its short-haul pilots Mobil Jet Oil 387 is the most advanced jet oil Whitman. The first stage of the and ground staff, but the latest talks have ExxonMobil has produced, said Frans Horjus, facility will open in September shown no signs of an early resolution. global aviation lubricant sales manager next year, equipped with eight Meanwhile, Qantas has unveiled a new at ExxonMobil. “The outstanding turbine full flight FS1000 simulators and fully-flat business class seat for its A330 fleet, component advanced technology training the first ever to allow for a partial recline protection that systems to instruct cockpit crew and mattress installation during take-off and Mobil Jet Oil 387 for commercial, military and landing. The new seat will be progressively offers a wide helicopter flying. Abu Dhabi rolled out from December to the end of 2016. range of engine Aviation was established in 1976 Rival carrier, Virgin Australia has announced technologies and is the largest helicopter plans to outfit its A330 and B777 fleets with is generating operator and Maintenance and new premium cabins. Its first installation will significant interest,” Repair facility in the Middle East. ■ not be completed until March. ■ he said. ■

NOVEMBER 2014 / ORIENT AVIATION / 9 BUSINESS ROUND-UP

Dreamliner costs drag on Boeing’s positive news

Boeing has reported third-quarter net the Asia-Pacific. However, Boeing shares that included battery fires, loss of revenue income of $1.36 billion, up 18% or $200 still fell almost 4% following the profit due to recurrent technical issues and the million, compared with a year ago, with the announcement, as investors fear another resultant adverse publicity the carrier manufacturer’s commercial airplanes unit hike in Dreamliner B787 production costs. endured because of the flight cancellations performing strongly. Its revenue increased According to analysts, the groundbreaking and service failures. Fears of a potential 15% year-on-year, to $16.11 billion. airline’s deferred production cost has risen onslaught of similar compensation claims Deliveries rose 9%, to 186 commercial 4%, to above $25 billion, which exceeds continue to weigh on Boeing’s share aircraft, in the reported three months. the $25 billion cap Boeing had forecast and price, analysts explained. Asia-Pacific”s The company booked 553 orders in the will put a critical drag on cash flow. All Nippon Airways was the B787 launch quarter, which brought the total backlog to Earlier this month, Boeing settled with customer. The region’s carriers form a very 5,500 aircraft valued at $490 billion, with Air India for losses the carrier suffered large portion of the aircraft type’s order more than half of the commitments from from repeated B787 groundings in 2013 book. ■

Tigerair steps up Jetstar war with Virgin Australia backing Singapore’s struggling Tigerair Virgin Australia said in October its hitherto the “ongoing subdued consumer demand” in the leases A320s domestic-only subsidiary, Tigerair Australia, Australian market. When Virgin first bought its may fly on international routes to better compete Tigerair share in 2013, it indicated the fleet could to IndiGo with Jetstar in the low-cost market - subject to be expanded by up to 35 aircraft, from its present regulatory approval. But chief executive, John 13 A320s. Virgin wants to acquire the remaining Tigerair Singapore will sublease Borghetti, said the growth plans of the Tigerair 40% stake in loss-making Tigerair Australia held by 12 of its A320s to Indian domestic fleet are “likely to be reduced”, given Tiger Airways Holdings Singapore, for one Australia low-cost carrier, IndiGo, as part dollar. The transaction is expected to be completed of the process of “right sizing” before the end of this year. its operation, said the Singapore Brisbane-based Virgin Australia has reported based budget carrier. Tigerair an A$59.1 million ($52 million) net loss for the first needed to dispose of the surplus quarter of the 2015 financial year, ended September aircraft, which it was left to 30, an 18.3% improvement over the prior-year manage after the airline closed period, despite the first quarter being traditionally a down its LCC subsidiary, Tigerair weaker period for the airline. ■ Mandala, and disposed of its interest in fellow budget carrier, Tigerair Philippines. “Tigerair Shanghai’s Spring Airlines IPO approved Bangkok Airways said in a statement last month the offering heavily aircraft will be leased to IndiGo Privately-run mainland low-cost of 86 domestic and 24 regional at a discount to their original carrier, Spring Airlines, has destinations, serviced by 48 oversubscribed lease rates. However, compared received regulatory blessing to A320s, a fleet that will increase with the idling of these aircraft, launch an initial public offering to 58 in 2015. Wang Zhenghua, Full service carrier, Bangkok this sublease agreement will (IPO) to fund its rapid fleet who also owns the Spring Airways, had its US$400 considerably reduce the group’s expansion. By year end, the International Travel Agency, million initial public offering cash flow burden by about profitable Shanghai-based carrier has used the custom created by (IPO) enthusiastically US$128 million over the sublease plans to trade one billion shares his travel agency to build a load oversubscribed by institutional period.” Tigerair may launch an on the city’s stock exchange to factor at the airline that averages and retail investors when it Initial Public Offering (IPO) as it collect about 2.5 billion yuan 95%. Spring reported a net offered 520 million new shares seeks to balance its books after a ($41 million) for the purchase of profit of US$11.88 million for the to the market in late October. long to period of losses. ■ nine A320s and three A320s. 2013 financial year, but it also The result made it Thailand’s After a listing freeze and received government subsidies most successful IPO to date a revised application, the of US$8.143 million in the same this year. The Bangkok Airways China Securities Regulatory 12-month period, said Hong parent company, which owns Commission approved the IPO Kong’s South China Morning three Thai airports, will use application, which made it the Post. China’s other listed airlines the funds to replenish its fleet, first non-state owned carrier are Air China, China Eastern engines and components as to launch an IPO. Founded in Airlines, China Southern well as renovate some of its 2004, the carrier has a network Airlines and Hainan Airlines. ■ aircraft. ■

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DTO_7058-2_Feb_OrientAviation_202mmx273mm.indd 1 1/16/14 10:13 AM BUSINESS ROUND-UP

SHORTTAKES it is developing biofuel that is Eastern Airlines, including Yanji. Ethiopian Airlines will converted from waste gases of engines manufactured by reduce frequency on the Addis BRANDING: Cathay Pacific industrial steel production. GE’s joint venture, CFM Ababa – Seoul route from Airways has updated its logo, FLEETS: China Aviation International. CFM is an equal four- to twice-weekly from the brushwing. It will no longer Supplies has signed a General partner joint venture between October 26. Etihad Airways sit constrained inside a box and Terms Agreement with Airbus GE and Snecma. Rolls-Royce will increase B777-200LR Abu has been gently harmonized for 70 A320s. Garuda has has flown its new generation, Dhabi – Dallas Fort Worth and set free, the Hong Kong ordered 46 B737 MAXs and lighter weight composite service from thrice-weekly to carrier. converted four B737-800s from carbon/Titanium (CTi) fan daily from April 16. Further, the CODE SHARES: AEROFLOT Boeing. Subject to approval blades on a Trent 1000 engine carrier will not proceed with has commenced adding its by the Chinese government, tested on a B747 in Arizona in the planned B787-9 operations ‘SU’ code on four of Bangkok Kunming Airlines has ordered the U.S. on the Abu Dhabi – Doha Airways’ Thai domestic four B737-700NG and six B737 ROUTES: All Nippon Airways route from December 27. Gulf services. Subject to regulatory MAX, valued at a list price of will operate a second flight Air will resume five-weekly approval, from October 26, All $897 million. from Tokyo Haneda to Hong A320 Bahrain – Hyderabad Nippon Airways (ANA) plans INFLIGHT: Boeing Shanghai has Kong, mainly at weekends, from services after almost six years to put its ‘NH’ code on eleven completed the installation of December 20, to provide better of absence. Hainan Airlines Avianca routes out of the U.S. high speed Wi-Fi on the first of onward connections to ANA’s will increase frequency on Simultaneously, the South three Nok Air B737-800s. Nok domestic and regional network. the B787-8 Beijing – Chicago American carrier has applied Air is the first airline in Asia to Etihad Airways will introduce route to daily from June 25. to place its code on five of offer free Wi-Fi to its passengers services from Abu Dhabi to Philippines Airlines will add ANA’s Tokyo – U.S. services. LEASING: Taiwan’s EVA Airways Dallas Fort Worth, Phuket three more weekly frequencies ANA also has signed a code will lease two B777-300ER and San Francisco by year on the Manila – San Francisco share agreement with Ethiopian airliners from Singapore-based end. Beijing Capital Airlines route from December 12 Airways that will connect BOC Aviation with deliveries will launch a twice-weekly through to January 16, using flights between Addis Ababa scheduled for 2017. Hangzhou – Okinawa A320 A340-300 aircraft. Qatar and Bangkok and Hong Kong MANUFACTURERS: Airbus service from October 29, its first Airways will introduce a as well as Mombasa, Nairobi, president and CEO, Fabrice international route. BIMAN has daily A380 service on the London, Frankfurt and Paris. Bregier, Tianjin Free Trade cancelled service resumption Doha – Bangkok route from Korean Air and LAN Peru have Zone (TJFTZ) president, Feng on the Dhaka – Hong Kong January 5, with three additional extended their partnership with Zhijiang and the Aviation route, originally scheduled daily services operated by a new codeshare agreement for Industry Corporation of to reopen from November B777-300ER aircraft. Thai the Seoul–Los Angeles–Lima China (AVIC)president, Lin 11. From October 26, China start-up Siam Air Transport route from October 21. The two Zuoming, signed a Letter of Eastern Airlines resumed (Siam Air), has launched a daily airlines have been codesharing Intent to establish an A330 service on the Beijing – Osaka Bangkok (Don Mueang) – Hong on the Seoul–Los Angeles– Completion and Delivery route with four weekly A320 Kong service on B737-300 Santiago route since 2005. Centre in the TJFTZ. The joint rotations. Moreover, it will aircraft. Singapore Airlines ENVIRONMENT: Boeing and venture complex is planned start a thrice-weekly A330-200 will increase frequency on the China’s COMAC have opened to offer cabin installation, Kunming – Paris service Singapore – Ho Chi Minh City a demonstration facility for engine runs, aircraft painting from December 18, the first route from 14 to 17 weekly turning waste cooking oil, and aircraft delivery services. long-haul operation for the flights from December 19. commonly referred to as gutter Mitsubishi has unveiled its first carrier’s Yunnan branch. Skymark Airlines from January oil in China, into sustainable 92-seat MRJ flight-test aircraft China Southern Airlines will 29 to March 28 is introducing aviation biofuel. Experts in that will undergo about six add a new four-weekly B787 a seasonal Sapporo – Okinawa the field estimate that China months of ground evaluations Guangzhou – San Francisco service on B737-800 aircraft. generates enough gutter oil to before taking to the air in non-stop service from June 22, The new service will initially produce 500 million gallons of the second quarter of 2015. in addition to the thrice-weekly operate four times a week, biofuel annually. Hong Hong’s Engine Alliance’s GP7200 Wuhan – Guangzhou – San before being increased to global bank, HSBC, has joined engines entered service on Francisco route to be daily from March 1. SriLankan Virgin Atlantic and Chicago- Qatar Airways’s first A380, launched on December 16. Airlines has revised its planned based biofuel producer, when the Doha-based carrier South Korea’s Eastarjet, from operation on the Colombo – Lanza Tech, as a partner in the commenced revenue flights October 26, is adding three Kunming route, due to start venture’s plans to get biofuel on on the airliner between Hamad new B737-800 routes from from December 1. Initially board the Virgin Atlantic fleet in International Airport and Cheongju to Northeastern service will be four-weekly 2015. The biofuel company was London Heathrow. GE Aviation parts of China, with two-weekly as planned, however, from set up in New Zealand in 2005, has delivered its 1,000th engine flights to Dalian and Harbin January 1, this will be reduced to but moved to Chicago where to Shanghai-based China and three-weekly services to thrice-weekly. ■

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Aer Lingus CEO tapped for MAS?

By Tom Ballantyne

o Kuala Lumpur from still ongoing”. Yahya expires next September, Germany by way However, insiders insisted which would allow a decent of the Emerald Isle. Mueller “is the man they want for handover period for the new Is Aer Lingus chief the job”. He has a proven track CEO. of the Executive Committee of executive, Christoph record in aviation and travel and Local sources said Deutsche Post in 2004 when TMueller, the man who will has been credited with turning approval has been given for a Deutsche Post acquired DHL. He resurrect Malaysia Airlines? That around Aer Lingus, which was in non-Malaysian to get the job joined Aer Lingus after several is certainly the word from several deep financial trouble when he and that Mueller was among years as executive aviation reliable sources in the Malaysian took charge in 2009. three candidates with aviation director at TUI Travel. capital as the airline moves closer The company recently industry experience on the If he is confirmed, Mueller to becoming fully owned by reported its fourth successive short list. German-born, he had has a challenge ahead of him. state sovereign fund, Khazanah year of profitability. a senior role at Daimler Benz MAS is still reeling from the Nasional. The timing could hardly be Aerospace, was an executive shock of two aviation disasters Khazanah said the reports better. Mueller announced in vice president at Lufthansa and – MH370 and MH17 – as the were speculative and premature July he will be leaving the Irish was chief executive of Belgium’s search continues for MH370 in and issued a statement that said operator in May next year. This Sabena airline group. He also Indian Ocean. The new CEO will “at this point in time, no person would fit perfectly with MAS’ served as chief financial officer spearhead a 12-point recovery has been appointed as the new plans. The contract of the current of DHL Worldwide from 2002 plan being put in place by CEO of MAS and the search is chief executive, Ahmad Jauhari to 2004 and became a member Khazanah. ■ Etihad unveils new alliance model

tihad Airways continues not signed up. on aircraft and on branded group offer an impressive global to the surprise the Etihad chief executive, materials by a group of airlines network, particularly across industry. Its latest James Hogan, said the new working together to connect Europe, India and Asia. If other development is Etihad group differs from legacy airline travellers around the world, carriers see benefits in tapping Airways Partners, which alliances such as oneworld, Star and increasingly to harmonize into that network or gaining Eaims to save members money Alliance and SkyTeam by offering standards in the air and on the economies of scale and cost through joint procurement and benefits beyond commercial ground,” he said. savings from joint procurement equipping while offering its cooperation. Hogan said Etihad Airways Hogan’s invitation may be hard member passengers improved “We’re aiming to deliver Partners is open to any airline, to ignore. networks, schedules and a consistent experience for even if it is a member of an Air France executive, Bruno enhanced frequent flyer benefits. frequent flyers when they existing alliance. For example, Matheu, has joined the airline The founder members are travel, as well as a consistent airberlin is a member of as chief operating officer, equity all airlines in which Etihad holds framework for earning and using oneworld. Analysts said that partners, to run the new division. equity: airberlin, Air Serbia, Air their miles.” That will include invitation may attract airlines He will spearhead efforts to Seychelles, India’s Jet Airways standardized mileage and tier to its fold. Even existing optimize business performance, and Swiss-based regional carrier, benefits across all partners with global alliance members are revenue and cost synergies Darwin Airline (now Etihad no blackout periods. pragmatic about partnerships between Etihad and its partner regional). The other carriers in “The Etihad Airways and co-operation with carriers airlines. Etihad, which has more which the Abu Dhabi-based Partners logo is a seal outside their grouping if it suits than 200 jets on order, has operator has an investment, of excellence and global them. signed aircraft order deals that Virgin Australia and Alitalia, have cooperation. It will be displayed Etihad and its equity-linked allow its partners to take part. ■

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Oil glut clouds fuel hedging strategy Oil prices have dropped to their lowest level in almost four years, holding out the promise of lower jet fuel prices and a big reduction in airline operating costs. But in the Asia-Pacific, as elsewhere, airlines are wary that after the drop, there will be a price spike.

By Tom Ballantyne

n the face of it, the A recent Reuters survey dramatically lower revealed that Asia-Pacific carriers oil prices of the are hedging substantial portions last three months of their fuel burn in expectation look good for Asia- that prices will be firm, which will OPacific carriers as they battle tough put pressure on profitability as times on the profitability front. competition from low-cost carriers Until the demand fall off began in intensifies. June, the average price of jet fuel Fuel traders at several regional was around $123 a barrel for the banks, Reuters said, have noted region’s airlines. a widespread pick-up in hedge By October 3, prices per barrel interest as oil prices have dropped, were $107, some 13% less than and volumes rise as the fuel price a year ago, 7.4% lower than the keeps falling. However, if they same day in September and 3.2% spike again,” Tyler said. boost in shale oil and reluctance are wrong, some airlines could under the price of a week earlier. IATA’s regular airline financial by OPEC (Organization of the have to pay more for fuel than the Seven days later, it was down to review, covering September, Petroleum Exporting Countries) market value. $105.10 and in the Asia-Pacific, said concerns about several members to cut output. Japan Airlines is hedging it was even lower at $102.10. geopolitical threats to crude oil This time, Saudi Arabia about 40% of its fuel Yet airline managements aren’t supplies have been offset by made it clear it was focused on consumption in the 2014 financial jumping with joy about news. increases in the oil supply in other maintaining market share, not year, which is similar to the Whichever way you look at regions, including the U.S. Some supporting prices with unilateral volumes in 2013. All Nippon it, said Tony Tyler, director general pessimism still exists about the production cuts. Other countries, Airways’ ratio for its 2014 financial and CEO of the International Air demand outlook, with key regions including Iran, Libya and the U.S. year is 45%, similar to the 2013 Transport Association (IATA), fuel like Europe forecasting slowing are following suit. and 2012 fiscal years. is still a major component of airline economic growth. As a result some industry Korean Air generally keeps its costs, at around 30% of expenses. Oil prices have dropped insiders believed the cost of a hedging volumes around at 30% “The industry has done dramatically, said commodity barrel of crude could drop to $70, of its annual fuel consumption. extremely well to adapt to rapidly analysts, because faltering global although few believed it would Cathay Pacific Airways is hedging rising fuel prices. A little over a growth had curbed demand dip below that level. 25% for 2014 and the first half decade ago, oil was less than $30 for fuel in a period of heavy If the price remains low for of 2015 at more than $94 to $95 a barrel. Today, it floats around oversupply. In October, oil saw a lengthy period it could impact a barrel, and about 11% for the the $100 mark (last month the its biggest daily fall in more seriously on the fuel hedging second half of 2015 and the first price of Brent crude temporarily than three years. Since June many airlines have in place. half of 2016. dipped close to $80, its lowest the price of a barrel of oil has Carriers have stepped up their jet Qantas Airways is hedging level since 2010). There is little dropped by 26%. That, said the fuel hedge volumes, with some as much as 94% of its fuel needs sign it will significantly decline and experts, was trigged by three airlines locking in fuel purchases as for the first half of next year, and every chance, given the instability events: a downgrade in global far out as 2016. Those long-term Singapore Airlines is hedging we see in some of the major oil consumption forecasts; positions, said analysts, suggested around 52% for its 2014-2015 oil-producing nations, that it could projections for another big airlines see oil prices bottoming. financial year. ■

16 / ORIENT AVIATION / NOVEMBER 2014 A never-ending story. I N

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TOM BALLANTYNE reports

inally, the air freight business has some good news. The International Air Transport Association (IATA)’s latest five-year forecast, issued in October, said international air cargo is expected to increase at a Compound Annual Growth Rate (CAGR) of F4.1% to 2018, with the Middle East-Asia route recording the highest annual growth rate of 6.2%. IATA added performance in August recorded robust growth in air cargo volumes, with freight tonne kilometers (FTKs) rising 5.1%, compared with a year earlier. It was the second consecutive month for strong cargo volumes, following a 6.1% year-on-year rise in July. Even better, capacity grew at a slower pace of 3.4%, easing pressure on freight yields. In August, Asia-Pacific carriers’ freight volume beat the global average, at 6.3%, continuing a solid acceleration that had been in evidence for more than two months. Cargo capacity in the region grew at only 4.4% and, according to IATA, a notable rise in Chinese export orders bodes well for future demand growth. Cathay Pacific Airways and Dragonair, airlines that operate out of the regional cargo behemoth, Hong Kong International Airport, reported a 14.5% increase in cargo in September, helped by shipments of new products such as the iPhone 6, which produced a load factor improvement of 2.9 percentage points, to 62.2%. Nevertheless, IATA director general and CEO, Tony Tyler, remained typically cautious about the recovery trend. “The outlook for air cargo is clearly getting better. However, there are some limiting factors on the extent of potential gains,” he said. “Demand for air cargo is growing more slowly than global economic activity. Businesses are reported to have more confidence, but the list of political and economic risks continues to moderate how that confidence translates into actual activity.”

20 / ORIENT AVIATION / NOVEMBER 2014 MAIN STORY

Tyler said the air cargo industry is moving Dubai World Central (DWC) at two speeds, with a sharp divide in regional Airport is poised to pass all other airports in terms of performance. European carriers are reporting freight and passengers anemic growth, while all other regions are making solid gains. The growth in the Asia- Pacific is encouraging because it demonstrates a recovery in trade and a positive response to China’s economic stimulus, he said. The association’s forecast said that by 2018, six of the ten largest international freight markets would be in the Asia-Pacific. The U. S. will still be the No.1 market, at 10,054,000 tonnes, followed by China (5,639,000), the United Arab Emirates (4,974,000), Germany (4,763,000), Hong Kong (4,648,000), Republic of Korea (3,487,000), Japan (3,480,000), the U.K. (2,808,000), Taiwan (2,350,000) and India (2,223,000). The U.S., China and the UAE will each add freight graph is on the way up. more than 1 million tonnes of freight by 2018, An indication of the air cargo revival is the return compared with today, and the UAE would have replaced of parked freighters to airline fleets. When air freight traffic Germany as the third largest market. plummeted in late 2008, air cargo operators parked as many “Air cargo remains as vital to the global economic system as 70 B747-400 and MD-11 freighters, the mainstay of long- as ever. This year, more than $6.8 trillion worth of goods, haul cargo operations. From July this year, operators were equivalent to 35% of total world trade by value, will be returning the planes to service as traffic volume picked up. transported around the world by air. So it is welcome that Airports, too, are reporting a strong freight rebound. The a forecast sees a return to growth for the sector after several latest figures from Airports Council International (ACI), also years in the doldrums” he said. for August, said freight volumes handled during that month “Nevertheless, trade protectionism is a constant danger. were up 5.8% year-on-year and well above the overall average According to the World Trade Organization (WTO), of 3.6% for the past 12 months. between November 2013 and May 2014 alone, 112 new Some weakness remains in domestic air freight markets, trade-restrictive measures were enacted by G20 governments. ACI said, but the trans-border shipment of air freight posted Geopolitical concerns, volatility of oil prices, and competition robust gains and international freight volumes jumped by from rail and sea could also affect this forecast. The air cargo 7.5%, coinciding with an expansion in international trade industry certainly cannot afford to be complacent.” activity and increasing business confidence. Asia-Pacific The largest freight traffic shares in 2013 were Within airports posted strong increases in volumes, some 8.2% Asia-Pacific (21.6%), Europe-Asia Pacific (12.3%), and North in August. The world’s largest air freight hub, Hong Kong and Mid-Pacific (10.0%). Looking ahead to 2018, Within International Airport, increased cargo volume by 8.6%. Asia-Pacific and Europe-Asia are expected to increase their “Although growth in domestic freight volumes in shares very slightly to 21.8% and 12.4%, respectively, with the Europe and North America showed weakness in August, Middle East showing the largest gain, 0.8 percentage points, international freight volumes experienced robust growth in to 6.9%, of global freight activity. most regions, particularly at airports in the large exporting At an international freight forum in Seoul, South Korea nations of the Asia-Pacific,” said ACI World’s economics last month, Boeing Commercial Airplanes vice president director, Rafael Echevarne. marketing, Randy Tinseth, released the U.S. planemaker’s The Middle East is challenging the dominance of Asia- biennial World Air Cargo Growth Forecast. For the first time Pacific on the air freight front. Dubai World Central (DWC) in years he was able to echo the growing feeling among airlines is poised to surpass all other airports in terms of freight and that the cargo market, finally, is heading for better times. passenger capacity and is now a major contributor to overall “We see strong signs of a growth in freight volumes for the region, recovery as air freight traffic levels said ACI. continue to strengthen after several To enhance air cargo “Although it only recently years of stagnation. The air cargo competitiveness, the industry commenced operations, in August alone market is now growing at nearly the is aiming to cut average air freight volumes at DWC quintupled long-term rates,” he said. to over 80,000 metric tonnes compared Among airlines, a cautious transit times by up to with 2013. Month after month, with reaction to marginal gains and 48 hours by 2020 increased operations, DWC is moving tentative recovery in late 2013 and up the ranks to be among the busiest early 2014 is turning to a belief the International Air Transport Association international freight airports in the

NOVEMBER 2014 / ORIENT AVIATION / 21 MAIN STORY

world,” said ACI. doubling by 2033. Tinseth said world But the Gulf has a long way to By 2016, the value of air cargo traffic began to improve go to catch up with the Asia-Pacific’s e-Commerce in China in one in the second quarter of 2013, with air cargo might. The region processes growth reaching 4.4% for the first 38.5% of all air cargo being moved day will reach $36 billion seven months of 2014, compared to compared with Europe (22.9%), the same period a year earlier. Zhu Gaozhang North America (21.3%) and the If this trend continues, 2014 Director compliance and facilitation, Middle East (13.1). Europe and Latin World Customs Organisation Brussels will be the highest growth year for America are lagging well behind the the airline freight industry since growth trend, seeing freight volume 2010. “Much of the past weak air growth of 1%-1.5%, a result of Brazilian economic weakness cargo growth can be attributed to two principal causes: an and EU sanctions on business with Russia, respectively. underperforming world economy and lackluster trade growth, In Asia, the Chinese economy has slowed compared with particularly in those traditional commodities served by the air the double-digit rates of expansion of previous years, but the cargo industry,” said Tinseth. government stimulus of earlier this year has helped manage The new Boeing forecast said Asia-North America and the transition of the nation to a slower growth path. Europe-Asia would continue to be the dominant world Recent results of purchasing manager surveys indicated air cargo markets. While Intra-Asia, domestic China and gains in business activity in the manufacturing sectors and Asia-North America markets are expected to have the fastest a notable rise in export orders. This should help sustain rates of growth over the next 20 years. positive trade momentum in the region, which in turn ought With increased cargo traffic, Boeing forecasts airlines to continue driving demand for air freight services on local will take deliveries of 840 new freighters over the next two carriers, said IATA. decades: 590 large freighters worth $190 billion and 250 Whatever the economic circumstances that exist in medium-sized freighters (40-80 tonnes) worth $50 billion. different world markets, it is universally accepted that China With some 70% of the new planes in the large category, the holds the key to the continuing recovery of air cargo. This sector will be dominated by the B777F and B747-8F because fact was recognized in September when the International Airbus does not offer a cargo version of its A380.■ Civil Aviation Organization (ICAO) held the first Air Cargo Development Forum in Zhengzhou. “China is a very important market and that is why we are here,” ICAO’s The belly cargo debate regional director Arun Mishra told the gathering, because its Kostya Zolotusky, managing director represents 45% of the region’s air cargo market. of capital markets development and Xia Xinghua, the director general of the China leasing at Boeing Capital, told Orient Civil Airports Association said a third of Chinese rely on Aviation people used tidbits of anecdotal e-commerce. “The rise of e-commerce in China is so fast that data to draw the wrong conclusions it forces freight handlers and airlines to find ways to work about air freight capacity. together, which is a very good trend,” he said. Wang Zhiqing, “Every day, the Asia to North America market over the deputy administrator of the Civil Aviation Administration of Pacific has 150 wide body passenger airplanes going back China (CAAC) reported that air cargo had grown by 10% a and forward. Every day, that same market has 70 dedicated year between 2002 and 2010, followed by a decline in 2011 freighters. If you took all that belly cargo capacity it would be equal to about 10 dedicated freighters. If the Asian to 2013. “We have finally come out of that, in the first half of market doubles its wide-body capacity, which it is not this year, as domestic freight increased 5.7% and international about to do, it would only consume about 10 dedicated 6.6%,” he said. freighters,” said. “The industry must adapt itself to meet changing “I think people are making much ado about nothing demands with the rise of the express market and become about the belly cargo. Belly cargo is a very important integrated logistics operators.” China’s express market has market, but relative to freight carried by dedicated freight- grown 43.5% a year since 2008 and become the world’s ers, it is relatively modest. You would need a dramatic shift second-largest after the U.S. This growth is underpinned by in belly cargo capacity to have any impact on dedicated the rise in e-commerce, Wang said. freighter traffic, which is not going to be the case.” China’s freight fleet stands at 101 aircraft, of which 80% “The challenge is that belly cargo is much lower yielding cargo. You have the capacity so you sell it at are used for express cargo. By 2016, based on a European whatever you can get for it, which does drive down some E-Commerce Association estimate, said Zhu Gaozhang, of the yields for the dedicated freighter. But overall capacity director of compliance and facilitation the World Customs is rather limited. There’s a lot of outsize cargo passenger Organisation in Brussels, the value of e-commerce in China aircraft can’t carry. There are nuances in the analysis, but could reach $36 billion a day. Boeing certainly doesn’t see that belly cargo will have a Boeing’s air cargo forecast should also cheer up operators meaningful impact on the overall cargo market. It’s an for longer term prospects. It foresees freight traffic will grow important part of it, but it’s not changing dramatically.” at an annual rate of 4.7% over the next 20 years, more than

22 / ORIENT AVIATION / NOVEMBER 2014 NEWS BACKGROUNDER

Singapore’s Scoot sets sights on Greater Japan

By Geoffrey Tudor

leet expansion at Mueang airport. One of the first Scoot will phase Singapore’s spunky out its B777s as routes for the new airline will be regional budget airline, its new all-B787 from Bangkok to Narita Tokyo in Scoot,has set the route fleet arrives at early 2015, subject to regulatory planners looking north for the airline approvals. Fmore business into Japan. Scoot Wilson said: “We’re reasonably flies to 13 destinations across satisfied. An airline has never been the Asia-Pacific, “but by March a finished product. As to where 2016, we will have 11 aircraft, we are now, I think our team said CEO, Campbell Wilson, “so has done a great job.It’s been a we are considering new points in journey of three phases. First was Australia, China and Japan. India is building a network and a fleet, also in our plans.” next was establishing a stable base Scoot serves Tokyo’s Narita and third will be building our fleet from Singapore, via Taipei. Wilson from the arrival of our first Boeing told Orient Aviation it would be “In just six months, we profitably reach in an important Dreamliner later this year. logical to fly to Osaka’s Kansai increased Singapore-Sydney leisure market. “For a two and a half year International airport in the second traffic by 69%. Contributing As to performance Wilson old airline, we’ve made a good half of 2015. Other Japanese to our success on this route are said: “We haven’t published any start.” ■ destinations include Nagoya’s our low fares, plus the fact that targets, but we are on plan. It Chubu International airport. Singaporeans like Sydney and takes years to go into the black. The Singapore-Narita flight Australians like Singapore.” We’re reasonably happy. This year Scoot: opened a year ago and has Wilson also intends to has been difficult. There’s been exceeded expectations, with an increase transit passenger unrest in Thailand and the MH370 Singapore’s average load factor of 81% that business by working closely tragedy. Traffic between China first all climbed above 90% in July and with fellow Singapore Airlines and Malaysia had a problem. B787 airline August. Group subsidiary, budget carrier “The Australian market has “Our assumption was that Tigerair. “Tiger is the ideal been a problem. We’re exposed to In a first for the airline industry, Singapore-based most of our passengers would partner for us. They are a short China, Thailand and Australia – all long-haul budget airline, be originating in Singapore, but haul, low-cost carrier and we are of which have had issues. But Scoot, will have an all-B787 now 55% are Japanese. That’s long-haul. About 34% of AirAsia that’s life. Confidence in Australia fleet of 20 aircraft by 2018 surprising as our market profile is X passengers are connecting is starting to return. after becoming the first low, but clearly shows there’s high to the airline from short haul “As a long-haul LCC, we’re “Dreamliner” airline to be potential demand in Japan need parent, AirAsia. There’s plenty of keeping our routes within the four based in Singapore. Cockpit for a long-haul low-cost operator,” opportunity for us to do the same to nine hours range. There’s plenty crew preparation is now in Wilson said. now we have anti-trust immunity.” of opportunity in Asia for us. India full swing. One of Scoot’s missions is to Wilson said Scoot is adding and Japan and Korea are our limits. In Japan in October to create new business for its parent to the Group’s network by flying Long-haul flights beyond nine attend a traditional Shinto blessing of a fuselage section company, and there are signs to destinations which are not hours – to North America and of one of Scoot’s B787s, the it is achieving that. “Everybody viable for a full service carrier like Europe - are too costly. airline’s CEO, Campbell said, when we started flying from SIA. Scoot’s China routes are Scoot’s latest development is Wilson, said the Singapore Singapore to Sydney, that there was not economical for parent SIA. the establishment of NokScoot, Airlines Group subsidiary no room for a newcomer. There Typically, Scoot’s costs are 50% with Thailand’s low-cost carrier, will have replaced its six were seven flights a day, including of SIA so the budget subsidiary Nok Air, to be based in Bangkok’s B777 jets by mid-2015. A380 service,” said Wilson. can serve destinations SIA cannot defacto LCC terminal, Don

NOVEMBER 2014 / ORIENT AVIATION / 23 COVER STORY

Adyita Ghosh president of IndiGo Airlines: Low cost does not mean low quality MAN WITH A MANTRA At only eight years old, budget carrier, IndiGo, is the country’s biggest airline by market share. Its mantra is low-cost does not mean low quality, Aditya Ghosh, the carrier’s president is a man determined to deliver the Indian travel experience differently.

TOM BALLANTYNE reports

t 39, former corporate lawyer and IndiGo IndiGo has built a reputation for cheery, no thrills service president, Aditya Ghosh, knows what he and 99% plus punctuality. The latter factor is particularly wants from his airline - operational discipline appreciated by the airline’s corporate flyers, who work in and staff with the right attitude. affluent Gurgaon, IndiGo’s home city 32 kilometres south Ghosh takes attitude so seriously that he of Delhi. Apersonally interviews new employees, including drivers In a recent interview, Ghosh said keeping focused on and mechanics. “I try to judge if there is a desire to chase the business of delivering quality service with good fares is the dream. People can’t get motivated by a manual,” said IndiGo’s mantra. And it has worked. Last March, Indigo Ghosh, who prefers casual shirts to suits and knew very little became India’s largest airline, with a market share of 32.6%. about airlines when he was appointed president in late 2008, “I often marvel at what we achieve against all odds. But we aged 32. want to deliver the Indian experience differently,” he said. Under Ghosh and founding president, Bruce Ashby, Principally, this means that low-cost does not equal low

24 / ORIENT AVIATION / NOVEMBER 2014 COVER STORY

quality at IndiGo. Passengers know what they will – and will was a perfect corporate match. By 2012, less than four years not – get for their fare. after its launch, IndiGo was India’s third biggest airline. The carrier charges for food and passengers must In the next 18 months it sailed past competitors to become pay extra for pre-assigned seats. There is no inflight India’s largest airline by passengers. entertainment, only distribution of an inflight shopping It operates 534 daily flights to 36 domestic and five booklet. It offers web check-in and self-service ticket kiosks, international destinations with a fleet of 83 A320 family express check-in for a fee and a unique service in India of aircraft. It was voted one of the top 50 companies for a Braille Guide for visually, speech and sound impaired employees to work for and the best company for staff in passengers. the transport industry. It has won several global industry Passengers also like the fact that IndiGo’s fleet has an awards and has recorded double digit growth for most of its average age of 2.9 years and that it phases out aircraft after eight-year life. six years of flying. Nevertheless, IndiGo has not been immune to India’s Co-founded by the group managing director of sharp economic slowdown. In its latest year, ended March InterGlobe Enterprises, billionaire Rahul Bhatia (52.1%) 31, net profit plunged by 60%, to $130 million. on revenues and a former CEO of U.S. Airways, Rakesh Gangwal (48%), of $1.6 billion. But in a local industry that reported IndiGo has defied its critics by setting new levels of growth combined losses of $1.8 billion, the profit was a remarkable as other Indian budget carriers have faltered, especially in achievement. Rival SpiceJet lost a record $163 million and the aftermath of the Global Financial Crisis. full-service airline, Jet Airways, was $670.8 million in the Planning for the establishment of IndiGo began in red, also a record deficit. 2004. By that time Ghosh, who had caught the corporate IndiGo has stayed financially aloft by “keeping costs eye of Bhatia, was soon to become general counsel at structurally low”, Ghosh explained. For example, the airline InterGlobe. He came to be involved in the project because of stocks no hot food on board and has no loyalty program. his InterGlobe responsibilities. As an aviation novice, he said Every expense has to be justified. “We keep asking ourselves: he benefited greatly from the knowledge of the startup team What other cost can we remove without losing a single and Bhatia’s experience in the sector. customer? This is our religion, and it serves us well,” he said. IndiGo was always going to be a domestic airline with As for all these new planes, Ghosh says IndiGo will only one aircraft type. In June 2005 Airbus got the call and operate them wherever there is demand in the airline 12 months later IndiGo received its launch A320 aircraft network. The carrier qualified to fly international services and commenced operations on August 4. Its mantra of after completing a government requirement of operating hassle free, low-cost travel, had the perfect start up market in for five years as a domestic carrier. It now flies to Bangkok, Gurgaon, a corporate satellite city where more than half of Singapore, Khatmandu, Dubai and Muscat, but it is the Fortune 500 companies have offices. cautious about longer haul routes. Its first flight was from Delhi to Imphal, in north Bhatia once said that “it might be sexy to see the western India, from its home hub at Indira Gandi IndiGo tail in Los Angeles, but we are doing well right International Airport outside Delhi. By the end of 2006, here”. “We believe there is a lot more to be done in India. the fleet had expanded to six A320-20s. Nine more A320s Our primary focus is the domestic market and will continue arrived in 2007. In May that year, Ghosh joined the board to be,” said Ghosh. of IndiGo. A little more than a year later, Ashby decided to accept an offer from SAMA Aviation to be its CEO and Ghosh become IndiGo’s president-designate. He took control of IndiGo in December 2008. In 2009, after only a few months in the job Ghosh could report the carrier was making money. The key to its success, analysts agreed, is Bhatia’s almost fanatical cost-consciousness and Ghosh’s persistence in maintaining that disciple. The new president pared costs by significantly increasing aircraft utilization, implementing the fastest turnarounds of any Indian carrier – just 30 minutes – and holding to a lean staff to aircraft ratio. The learning curve steepened, said Ghosh, a notoriously media shy family man, who said his mother never expected him to amount to anything. To the outside world, Ghosh and the airline

NOVEMBER 2014 / ORIENT AVIATION / 25 COVER STORY

He holds to this view for the future of IndiGo because ordered in 2011 from next October. In the following three it is the world’s second largest nation by population yet months we will receive six planes. We have converted 30 only a tiny minority is airline flyers. “IndiGo will continue A320s from the 2011 order to A320neos so all 180 planes to expand its network to meet the requirements of both will be A320neos. We are also taking 12 A320 planes on business and leisure travelers wherever they demand it, both lease from Tigerair with deliveries to begin this month. in India and abroad,” he said in a recent interview. “We finished our first 100-plane order two years early. “We have been blessed with many years of double digit According to the original plan, the deliveries were to growth – and once in a while there is a slow year. But India is continue until 2016. We might speed up induction, but it a highly under-penetrated aircraft market with a burgeoning depends on market growth. and productive population that needs to fly at affordable “Airplanes from the latest order will start in 2018. Those fares,” he said. inductions will overlap with deliveries of the earlier order “We see huge potential in the Indian domestic market for 180 planes. Apart from the confirmed orders, we have and with our Gross National Product (GDP) growing at the rights to purchase another 100 planes from Airbus. Planning rate of 6% to 7% for the next decades, the growth of aviation in advance allows us to plan better. We have always done in India is just starting.” business that way. We ordered 100 planes in 2005 and Growth projections and past successes aside, the news started operations a year later. Our profitability also allows in mid-October that IndiGo had signed a us to plan for the next five years.” Memorandum of Understanding (MoU) There is speculation in India that IndiGo with Airbus for 250 A320neo family is preparing for an initial public aircraft plus 100 options, impressed the offering (IPO) next year. Ghosh market. If the MoU is converted to a won’t comment on the subject nor purchase contract, it will be Airbus’s will he talk about valuations of the single largest order by number of airline, which range from US$1.5 aircraft, at a list price of US$25.6 billion to US$3 billion. billion. Airbus said it expected the deal He said there is no urgent need to be finalized in 30 days. for IndiGo to raise cash because The order follows IndiGo’s the airline recently secured a $2.6 earlier commitments for 100 A320s billion loan from the Industrial & and 180 A320neos. At the same Commercial Bank of China for 30 time the latest fleet expansion planes – in a deal that was another first was announced, IndiGo agreed for India. to sublease 12 A320s from One thing is certain: making money Singaporean LCC, Tigerair. in India’s highly competitive market Analysts said the orders are a yet alone maintaining the sort of massive bet that India’s often chaotic IndiGo has the fastest income record of IndiGo is not easy – airline market is eventually going to turnaround of any Indian and there are more tests of the market sort itself out and its potential will to come. AirAsia India, a joint venture be realized. “The deal is a strong airline – 30 minutes with India’s Tata Industries and indicator of the long-term potential Malaysia’s AirAsia Group, is flying Adyita Ghosh of the Indian civil aviation market,” in India, but only has one aircraft in President IndiGo said Amber Dubey, partner and India operation so far. Another newcomer, head of aerospace and defence at global Air Costa launched earlier this year. consultancy KPMG. As well, the Tata joint venture with Singapore Airlines, Ghosh said at the MoU signing: “We have always full service carrier, Vistara, will soon commence operations. maintained that air traffic penetration in the Indian market It is reported that other entry level airlines have received is lower than countries such as the Philippines and a lot more government approval to fly. needs to be done to increase capacity.” How many of them will survive long-term is anyone’s “There are a lot of growth opportunities locally. The guess. But IndiGo is determined to maintain its market number of aircraft in India is lower than in Brazil, China or leadership, despite its planned huge capacity increase. Indonesia,” he said. Boeing forecasts India will require 1,290 In October, in the details of Winter Schedules filed by aircraft by 2032 to cater for demand in the world’s second all airlines with India’s aviation regulator, the DGCA largest country. (Directorate General of Civil Aviation), only two carriers Before Ghosh and his owners signed the MoU in will be operating more flights during the season, IndiGo October, IndiGo had an order book of 280. Of its original and another budget carrier, GoAir. IndiGo will increase 100-plane order, placed in 2005, it has received 99. The final its schedule by 25% and GoAir by 12.6%. Rivals cutting aircraft is due to arrive at the carrier this month. services include SpiceJet (16.2%), and Jet Airways (8.6%) Ghosh said: “We will start receiving the A320neos we and Air India (2.6%). ■

26 / ORIENT AVIATION / NOVEMBER 2014 ELIMINATE CREDIT CARD FEES NEW REVENUE STREAMS

COMPETITIVE MARKET INTELLIGENCE SELF-FUNDING PROGRAMS SPECIAL REPORT ASIA-PACIFIC MRO INNOVATION: AN UPDATE Less still means more for Asia-Pacific MROs

World beating Asia-Pacific fleet expansion will keep MRO growth at close to 5% year even though airlines are investing in fuel efficient aircraft and keeping their fleets young.

Tom Ballantyne reports

espite the increasing numbers of new generation, fuel efficient commercial jets entering airline Dfleets that need less maintenance less often, the business of Maintenance, Repair and Overhaul (MRO) continues to expand in the Asia-Pacific and the Middle East. But the sector also is undergoing significant change Vistara owners took as manufacturers win more after delivery of their first market business from their airline A320 in September clients - including Asia-Pacific carriers – when the airlines sign on should be aware of OEM’s levels, especially in emerging 2019 and then slow to 3.5% until the dotted line for their planes. growing importance in the markets,” he said. 2024. Narrow body aircraft MRO A recent example was the aftermarket support business, said With the worldwide fleet work will account for 46% to decision by India’s newest airline, Turkish Airlines chief executive, forecast to grow exponentially in 48% of the MRO business in that the Tata-Singapore Airlines Temel Kotil, when he delivered the next two decades, led by Asia period, wide bodies for 40% to joint venture Vistara, to sign a the keynote address at the MRO and Africa, he said that high-cost 43% and regional jets at 9%. comprehensive maintenance Europe conference in Madrid last services could stifle this growth The Asia-Pacific will grow at agreement, a “Flight Hour Services month. potential. 5% per year from 2014 to 2024, Tailored Support Package” with In the past, he said, a balance In the meantime, the global with China’s market expanding the European planemaker, for existed between OEMs, airline MRO revenue pie continues to from $4 billion to $10.2 billion in its first A320 jet. The package MROs and independent players in grow. According to U.S. aviation that decade. ICF also forecast the included airframe maintenance, supporting the worldwide fleet. consultancy Team SAI, the aircraft greatest growth in demand would engineering, reliability and Now, he predicted, there will be MRO market, valued at $57.7 be in the Asia-Pacific, which will components supply chain a shift in market power in favor billion this year, will increase to spend $7.1 billion more on MRO management. It was the first such of OEMs, fueled by the latest $86.8 billion by 2024. Another services in 2022 than it did in 2013, deal for an Indian airline. generation of aircraft coming into U.S. consultancy, ICF International, followed by the Middle East and While Vistara is hardly the service. “In the long term, the forecasts the market will expand China. only airline to give its MRO MRO market will be dominated by by 3.9% annually and be worth Speaking at a recent U.S. MRO business to an Original Equipment OEM monopolies,” he forecast. $89 billion by the end of the next conference, ICF principal, Richard Manufacturer (OEM), it is another But this did not mean Kotil decade. Brown, said aircraft modifications example of the increasing inroads was happy with the shift to OEM Expansion will be at a will be one of the fastest growing OEMs are making in the MRO dominance of the MRO sector. “healthy” compound average MRO sectors, at 6.4% annually, as market. “Costs need to come down, while rate of 4.2%, said TEAM SAI with airlines install winglets, upgrade Independent MRO providers maintaining quality and safety growth to accelerate to 4.9% until interiors and invest in inflight

28 / ORIENT AVIATION / NOVEMBER 2014 SPECIAL REPORT ASIA-PACIFIC MRO INNOVATION: AN UPDATE

connectivity technology. new commercial airline pilots and “The biggest driver of revenue maintenance technicians in the Asia-Pacific carriers farewell overall will remain engine services next two decades would be 39% with the sector predicted to of the global requirements for grand lady of the skies generate more than $35 billion in new pilots and that 224,000 new There’s at least one area in which fewer MRO specialists 2023, up from $24 billion in 2013. technicians and engineers would will be required - the maintenance of the Boeing B747 jumbo ‘While we are set for a period be needed in the region through jet. Apart from a few new B747-8 Intercontinental passenger jets and freighters entering the market, the days of the B747-400 are of significant fleet renewal in the to 2033. It said China will require decidedly numbered. next 10 years, which is likely to see 101,000 technicians, Southeast Japan Airlines retired the last of its B747 fleet in 2011 as part maintenance cycles lengthen, it Asia 55,000, South Asia 30,000, of its restructuring and All Nippon Airways ditched its last B747 in seems that the increasing number Northeast Asia 24,000 and March. Cathay Pacific Airways operated the final flight of its last of aircraft in the air and the need Oceania 14,000. B747-400 on August 31, on the San Francisco-Hong Kong route but to ensure older aircraft are as All of which will undoubtedly Hong Kong-based carrier has B747-8 freighters in its cargo fleet. efficient as possible will generate be the centre of discussions at the Philippine Airlines (PAL) retired its last B747-400 on September plenty of MRO work,” he said. 14th Annual MRO Asia Conference 1 after the U.S.’s Federal Aviation Administration (FAA) upgraded Apart from winning business, & Exhibition, which is being held the Philippines to a category 1safety rating which allowed PAL to both OEMs and MROs face the from November 4-5 in Singapore. replace B747s with new B777s. Air New Zealand flew its last B747 flight on September 10, from San Francisco to Auckland route, issue of training and retaining It is expected to attract some again replacing it with B777 services. sufficient numbers of qualified 2,500 industry professionals from Qantas still has 13 B747-400s flying across the Pacific and said engineers to service the growth 50 countries to the Lion City to it will continue to use the aircraft “for the foreseeable future”. It has in demand. In September, Boeing address the critical MRO issues that said, however, it will remove four from service by 2016. projected Asia-Pacific demand for face the region. ■

MRO centre is its first regional, in-country facility. It also has European MRO breaks offices in Russia, Britain, Poland and Italy. The company’s strong growth is backed by Avia ground in Indonesia Solutions Group, a leading air transport industry consultancy and provider, also headquartered ne of Eastern adjacent ramp, aircraft parking MRO segment, in a market with in Vilnius. Europe’s stands and additional support more than 5,000 aircraft in Avia Solutions Group major airline facilities for up to three narrow airline fleets,” he said. provides pilot and crew training, maintenance, body aircraft at any one time. “Moreover, quite a few aviation staff leasing, ground repair and The complex will employ 150 Indonesian carriers are on handling and aircraft fuelling and Ooverhaul (MRO)providers has engineers, technicians and other the list of operators with the other aviation related services. taken its first major step into the qualified staff. fastest growing fleets,” he said. It is the largest aviation group in Asian market, finalizing a deal In 2013, Soekarno-Hatta Indonesia’s major carriers are the Baltic States and one of the that will see it set up extensive International Airport handled planning to more than double largest in Eastern Europe. Avia operations at Jakarta’s Soekarno- almost 400,000 domestic and their fleets in the next 10 to was listed on the Warsaw Stock Hatta International Airport. international flights carrying 59.7 15 years. With this in mind, Exchange in March 2011, the first FL Technics, headquartered million passengers and more than FL Technics is considering foreign company to do so. It is in Vilnius, capital of the Baltic 342,000 tonnes of cargo. It is building an additional hangar affiliated with General Electric state of Lithuania, won a tender one of the largest airports in the to accommodate growth in its and has more than 17 subsidiaries to rent of an 8,400 sq. m. aircraft Asia-Pacific and the busiest in the business. globally. maintenance hangar at the airport Southern Hemisphere. FL Technics will offer a FL Technics is an EASA and will launch its operation with “During the last couple of comprehensive range of services, Part-145, Part-M, Part-147, Part-21 base maintenance services for years we have been thoroughly including A-to-D checks, certified company, as well as Airbus A320 aircraft. The tender exploring the Asian market,” interior refurbishment services, a Boeing GoldCare Program was conducted by PT Angkasa explained Zilvinas Lapinskas, NDT (Non-Destructive Testing) partner, with certificate approvals Pura II, the airport’s operator. chief executive of the Lithuanian inspections, composite and in Russia, Bermuda and other FL Technics and its local firm. “We are now confident we structure repairs and spare parts countries. It currently services a partners will operate a 24,500 possess a deep understanding supply. wide range of Boeing, Airbus, square meter MRO centre, of its trends and the issues that The company has an office ATR, Embraer, Bombardier CRJ, which will include the hangar, an local carriers are facing in the in Malaysia, but the Indonesian and other types of aircraft. ■

NOVEMBER 2014 / ORIENT AVIATION / 29 SPECIAL REPORT ASIA-PACIFIC MRO INNOVATION: AN UPDATE Smart phones drive MRO innovation

Maintenance, Repair and Overhaul workshops are no longer places of sweat, noise and elbow grease as the mobile app drives innovation in the aviation workshop. device to engage with content from ERP and asset management Tom Ballantyne reports systems. The project aims to show that users can read updates, oday’s generation of authors said. availability and have the part make transactions, send alerts for MRO engineers grew “With some [analysts] delivered to the aircraft repair site. processes and receive important up with computers claiming that 99% of the revenue The White Paper pointed that notifications in real time. at home, cell phones received per flight by airlines mobile devices offer a window IFS, a major MRO company in their pockets and, is needed to break even, MRO to enterprise resource planning in the defence sector, has been Tmore recently, smartphones and mobile technology will drive (ERP) software, its maintenance expanding its commercial airline tablets as a part of their everyday innovation and profitability in this processes and sign-off, as well as MRO portfolio. Emirates Airline lives. market,” Olsen said. supply chain and configuration has selected IFS Applications™ Espen Olsen, director Traditional MRO involves a lot management. 8 to manage its new engine aerospace and defence business of paper maintenance manuals, “Businesses should look overhaul facility in Dubai. The development and sales at Europe’s he said, whereas a mobile app to integrate mobile apps as an solution will support all business IFS, a major supplier of solutions offers the manuals on a device extension of their full ERP suite, processes, including MRO for fleet management, contractor in a technician’s pocket. “Work as opposed to a separate entity,” and corporate performance logistics support, MRO, and becomes more interactive, more said Olsen. “In this way, MRO management (CPM). The Dubai defence manufacturing, said: interesting and, arguably, more providers can significantly improve airline is building an engine “They are well versed in how such effective with the inclusion of efficiency, improve the accuracy of overhaul facility in Dubai which technology works. In this age of videos and 360 degree images,” data capture and simplify what is could service up to 300 engines ‘bring your own device’, mobile he said. traditionally a slow, paper-based annually after it is completed. applications can drive innovation “Tablets are adaptable to process. The more holistic an Mobile technology is only in MRO.” the support of general MRO, ERP solution is, the simpler it is to one leg of advanced information In a White Paper released in are portable and relatively extract management information that will benefit future MRO September by IFS, “The Pivotal robust, providing the ability to and benefit the bottom line. This operations. Speaking earlier this Role of the Mobile in Civil Aviation take photographs of a specific includes the integration and use of year at an MRO event in the U.S., MRO.” Its authors said new mobile part which needs repairing, as mobile technology. Richard Brown, principal at ICF applications, combined with well as incorporating wearable “A mechanic can target the International, a U.S. management, agile resource planning tools, will technology. exact information he or she needs technology and policy consulting enable MRO shops to avoid costly “Maintenance engineers on to carry out a repair at any location firm, predicted the MRO market new software developments or the ground will enjoy the most and follow a rigorous MRO will produce significant cost extensive training as the business’ benefits from this mobile MRO process whether it is in a sprawling savings because of the big increase practices change. new age,” said Olsen. hangar complex or on the tarmac in e-enabled aircraft. “Nowhere is the use of smart Instead of assessing the at a remote location.” “In the next decade, as the devices more practical than in situation, attempting to identify Wearable technology, such fleet of next generation IP-enabled the world of aircraft MRO. The the specific manufacturer as smart watches, are expected passenger jets increases from numbers of aircraft in service part number, returning to to play a role in future MRO 400 to 11,300, MROs will use IT today is unprecedented and MRO the warehouse to retrieve the operations. IFS’s research and technology to improve prognostics is a major and swiftly evolving relevant part and finding that it development team is trialling and predictive maintenance, better market. New developments have isn’t currently in stock, engineers notifications from IFS applications coordinate maintenance planning, to take into account increasingly will be able to examine faults on a Samsung Gear 2 smart boost productivity, better manage competitive profit margins, on an aircraft in real time using watch as a proof-of-concept. supply chains and parts inventory extensive regulatory frameworks a mobile device to identify the The research team hope to and streamline technical record and passenger safety,” the asset, determine its immediate demonstrate the ability of the keeping,” Brown said. ■

30 / ORIENT AVIATION / NOVEMBER 2014 AFIKLM_202-273_2013-09-25.indd 1 25/09/13 15:42 NEWS BACKGROUNDER

Support for global tracking system falters

After the mysterious disappearance of Malaysia Airlines flight MH370 in March, the aviation industry began investigating options for a standardized worldwide aircraft tracking system. It has become clear a solution will be hard won as some industry figures doubt there is value in a global system.

TOM BALLANTYNE reports

s a new Australian Qatar, unanimously declared they completing its draft options At the NTSB’s public forum, Transport Safety would do whatever was necessary was uexpected. According to it quickly became clear that Bureau-led search to ensure their aircraft were an International Air Transport some agencies are in no hurry for the missing tracked at all times, at least one Association (IATA) spokesperson, either. The U.S. Federal Aviation Malaysia Airlines IATA member, Emirates Airline, Mona Aubin, the decision Administration (FAA), is not AMH370 aircraft commenced in has since said that despite the followed am “exhaustive internal drafting rules that would mandate the southern Indian Ocean last disappearance of MH370, there review” that determined “that enhanced tracking of planes. month it emerged that finding is no need to improve modern we needed more clarification on The FAA’s top safety official, a comprehensive solution to aircraft tracking systems. Emirates the recommendations and on Peggy Gilligan, indicated these track all aircraft in real time could president, Sir Tim Clark, instead guidance for implementation”. and some other long-discussed proving to be as challenging as wants measures put in place No details were given changes would be hard to justify the hunt for the lost B777 and its to ensure pilots can’t turn off about the issues that required under current federal cost-benefit passengers and crew. tracking devices. clarification, but IATA director trade-offs. The International Civil Aviation “The Boeing 777 is one of general and CEO, Tony Tyler, has She said the agency is Organization’s (ICAO) Aircraft the most advanced planes in the cautioned against hasty solutions. working on dozens of other, Tracking Task Force (ATTF), set up world, with the most modern Earlier this year, after the MH370’s higher priority safety rules that soon after the jet went missing on communications systems,” he disappearance, he said IATA offer more readily quantifiable March 8, was scheduled to publish said in an interview with the “also must ensure that prudent benefits. It isn’t clear, she added, its draft options in September, but German magazine Der Spiegel. decisions are made in line with “when and if” the agency can fit the deadline for delivery of the “It is already difficult to turn global standards. This is not the real-time tracking requirements recommendations has stretched to off current tracking systems time for hastily prepared sales into its agenda. next month. such as transponders and the pitches or regional solutions”. A leading European Aviation At the same time, at a ACARS (Aircraft Communication Safety Agency (EASA) official public forum held by the U.S. Addressing and Reporting said his agency is only months Transportation Safety Board System). away from proposing rules that (NTSB), serious differences about “Manufacturers should work would call for practically universal, the merits of a new real-time to make them impossible to switch real-time tracking of aircraft. tracking system emerged off. We have to ensure ACARS European lawmakers could take between U.S., European and runs continuously. If that happens, action on the rules as soon as international air safety authorities. then we can monitor planes over early next year. The dialogue clearly indicated a the seas, and we wouldn’t need However, what has become global agreement on standards extra tracking systems,” he said. evident is that airlines as well as and regulations affecting key The delay by the ATTF in equipment manufacturers are safety enhancements will likely working on improving aircraft take years to come to fruition. Tony Tyler, IATA director general tracking. During the NTSB and CEO: prudent decisions on And while International Air forum, airplane and cockpit aircraft tracking upgrades must Transport Association (IATA) be made in line with global manufacturers and airlines, at their June gathering in standards satellite-service

32 / ORIENT AVIATION / NOVEMBER 2014 NEWS BACKGROUNDER

providers said they were by casting doubt on the official developing procedures that We have to ensure that ACARS version of events surrounding transmit position, speed, altitude (Aircraft Communications Addressing MH370’s disappearance in March. and other airliner data to the He believed the aircraft was ground if there is a catastrophic and Reporting System) runs continuously. always under control and may not failure inflight or an airplane goes If that happens we can monitor planes be in the southern Indian Ocean. down for any reason. “MH370 was, in my opinion, Boeing executive, Mark over seas and we would not under control, probably until the Smith, told the forum the U.S. need extra tracking systems very end. Experience tells us that planemaker favours more in water incidents, where the effective use of the technology Sir Tim Clark aircraft has gone down, there is and capabilities aircraft have, President of Emirates Airline always something. We have not rather than mandates for new seen a single thing that suggests hardware. With some 69,000 and Inmarsat are working on to float. Asked how soon they categorically that this aircraft is airline flights daily world-wide, enhanced systems intended to would be installed, he said it where they say it is, apart from he spoke of the dangers of transmit more extensive data to would be “very soon after some this so-called electronic satellite “unintended consequences” if the ground as often as every 10 more studies and assessments” ‘handshake’, which I question as new devices or procedures were seconds if there is an emergency. are completed. well.” embraced. Separately, Airbus has Boeing’s Smith said the He said there was “not even Steve Kong, business and outlined plans to make it easier to company has placed deployable a seat cushion” of evidence that development manager for locate the black boxes – the data recorders on various aircraft it the plane had ended up there London-based satellite operator and voice recorders – if a plane builds for the military, but has no and that all the “facts” needed Inmarsat, said the company crashes into the sea. Airbus Head plans to put them on commercial to be re-examined. “There hasn’t has offered to provide free of of Security Operations, Pascal jets. “We think they need study” been one overwater incident in charge every-15-minute location Andrei, said the manufacturer before widespread adoption, the history of civil aviation - apart updates to airlines with systems intended to install deployable he said, and pointed out there from Amelia Earhart in 1939 - that compatible with those of black boxes on future A350 and were dangers in unintended or has not been at least 5% or 10% Inmarsat. Some airlines can pay A380 aircraft. They would be accidental deployment. trackable. I am totally dissatisfied for updates as frequently as every ejected from the plane in the In his interview in Der Spiegel, with what has been coming out of 60 seconds or even less. Boeing event of a crash and are designed Clark surprised some observers this investigation, he said. ■

MRO EXTRA

on ATR MRO, we aim to cover all our Asia-Pacific customers’ Boeing Shanghai wins operational requirements and improve their fleets availability by over Silk Way West providing 24/7 support.” The warehouse, in Changi Airport Free Tax Zone, also provides Sabena technics asia with the opportunity ull Service Maintenance, Repair and Overhaul facility, Boeing on improve our support on other aircraft types, such as the Fokker Shanghai Aviation Services Co ltd, has signed an agreement F100, as well as be closer to Australian operators, said Delisle. ■ F with cargo carrier, Silk Way West Airlines, for line maintenance. Based in Baku, Azerbaijian, Silk Way West serves businesses in Britain, the Middle East and South Korea, China and Hong Kong. Tigerair Australia and AJW It has a fleet of two B747-8s,three B747-400s, two B767-300s and sign support agreement Ilyushin and Antonov aircraft. ■ igerair Australia, which is expected to soon become Sabena establishes 100%-owned by Virgin Australia Holdings, has signed a T long term agreement with AJW Aviation to deliver complete ATR component warehouse inventory technical management, including components, major assemblies, wheels and brake, auxiliary power units, thrust reversers in Singapore and consumables. Tigerair is the British controlled company’s first major customer in Australia, after the establishment of its strategic RO and component provider, Sabena technics, has opened supplier relationship with Air New Zealand in 2013. Tigerair an ATR component warehouse adjacent to Singapore’s Australia “will be assisted by our Singapore office,” said AJW CEO, M Changi international airport, Said Sabena technics asia Boris Wolstenholme. The company has more than 500 aircraft CEO, Phillipe Delisle: “with more than 25 years of experience under power by the hour. ■

NOVEMBER 2014 / ORIENT AVIATION / 33 NEWS BACKGROUNDER

manufactured by the Commercial Aircraft Corporation of China Australian aerospace on (COMAC). He has visited the COMAC factory in China and hunt for Asian business “interestingly Australia, largely through the education sector, is very well connected to COMAC”, Australia’s aerospace industry has launched he said. “I met very senior aerospace a program designed to capture a bigger slice of engineers in the program fast growing international market, including Asia. who have studied at RMIT University (in Melbourne) or other Australian universities or are doing exchange programs Tom Ballantyne reports in the country. Our regional relationship, largely through new Australian the educational sector, hasn’t organization, the been fully leveraged. COMAC Meta National is a significant target for our Commercial capability.” Aerospace Hub, Meta’s Angelkovski said: Aaims to bring together Australia’s “We believe in understanding aerospace businesses and Australia’s core capabilities industry researchers to better and use that capability to tap promote Australian commercial into the global supply chain. aerospace expertise in the region Meta intends to bring these and beyond. great manufacturers to regional The “collaborative hub’’ is and global attention and backed by industry umbrella demonstrate what is possible in group, Aviation/Aerospace Australia.” Australia (A/AA), that wants A/AA estimates there are a bigger share of the world’s more than 800 Australian

US$50 billion aerospace market. Australian manufacturers could build COMAC partnership firms that generate an annual Meta managing director, Zoran turnover of $4 billion across the Angelkovski, said Australia has for this burgeoning market.” emerging opportunities and then aerospace supply chain. Some a $200 million share of the $50 Asked how Australia match our skills and capabilities of these companies are globally billion global market for metal could compete with powerful with that demand. competitive and successfully aviation components, which aerospace providers in such Fox believed Australia has tapping into the global market, should be much higher. countries as China, Singapore, a good chance of supplying but a collaborative approach “It’s all about generating Japan and South Korea he said: parts to new aircraft being built to win business is far better ideas and projects to create “I’m not saying we are going in the region, including China’s than markets being attacked by growth and jobs for the to just walk into their garden. C919, the single-aisle jet being individuals, said Angelkovski. ■ aerospace industry,’’ he There is a fairly well-trodden said. “We want Australian pathway. The sooner we start on manufacturers to tap into that pathway the sooner we will New LEAP engine completes the global supply chain as find those avenues to deliver our first flight commercial aircraft production specific services and solutions.” levels are set to double in the “We’re in a period of CFM’s LEAP engine made a successful maiden flight in next 15 years,” he said. unprecedented growth. Boeing October, aboard a modified B747 test bed at GE Aviation Flight Test Operations in California. The CFM LEAP test program for Deputy chairman of A/ and Airbus have said a number all three variants of the engine includes 28 ground and CFM test AA, Paul Fox, said: “Australia of times that they are going to engines and 32 test flight engines for Airbus, Boeing and China’s has the right skills, abilities struggle to keep up with the COMAC. The LEAP engine partners promise the engine will deliver and regulatory standards to demand. That opens up new double digit fuel consumption improvements and CO2 emissions capitalize in the aviation sector. opportunities. We don’t know compared with today’s best in class CFM engine. Airlines had Our manufacturers have a strong what the specific opportunities made 7,700 firm orders and commitments for the new engine by ability to innovate, solve complex are right now. That’s the first September this year. problems and provide solutions step, to do more research about

34 / ORIENT AVIATION / NOVEMBER 2014 No.1 Asia-Pacific commercial aviation magazine

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Snecma and GE CEOs, René Ravaud and Gerhard Neumann were two men who shared a vision: to make jet engines quieter and more fuel efficient. Together, they created CFM International and laid the foundation for the world’s most successful aviation joint venture. Today, on our 40th anniversary, we salute the everyday giants who continue to make that vision a reality. Those who achieved great things in our past and those who are now shaping our future. A future that would make René and Gerhard extremely proud. Here’s to powering the next 40 years of flight.

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