Newsdesk – Commercial

Chinese Re-Invent the 720:

China has recently test-flown the first of its Y-1O 124 passenger jet transports. The Y-10 is basically similar both visually and dimensionally to the Boeing 720 of so long ago, the Y-10 is even powered by four Pratt & WhitneyJT3D-7turbofans purchased during the early seventies as spares for China’s early707 fleet. The Chinese insist with great tenacity that the Y-10 is not a Boeing copy and that the aircraft will not be built for commercial use, but moreover as a test bed for future designs.

1981 a Commercial Airline Disaster:

The US Air Transport Association reports that America’s eleven major airlines experienced a 6.4% slump in traffic during 1981 in comparison with 1980, which itself was extremely depressed. 1980 traffic was a whopping 15% below that of 1979. Among the majors best weathering the storm were American (RPM or Revenue Passenger Miles, down 1.4%, Load Factor 61.4%), Continental (RPM down 2.5%, LF 56.9%), Delta (RPM down 6.8%, LF 53.3%), Northwest (RPM down 3.2%, LF 57.4%), PanAm (RPM down 4.2%, LF 60.8%), USAir (RPM down only 0.9%, LF 57.8%) and Western (RPM down 2.9%, LF 58.9%). Airlines having a bumpier ride were TWA with RPM down 8.4% and LF 62.4%, Braniff with RPM down 25.7% and an LF of 56.9% and Eastern Marginal with RPM down 7.50/o and an LF of 55.8%. Overall the US majors had a 1981 RPM down 6.4% for an average Load Factor of only 58.6% as against 59.4% in 1980.

These figures indicate the vast amount of excess seating capacity still prevalent in the US system. Australian Load Factors are routinely ten percentage points above these figures. In comparison the emerging nonmajors, using cheap second-hand aircraft, principally fuel-efficient DC-9-30s and used 737s with low overheads are doing nicely while the majors are simply too big in a depressed economic environment. The market share held by the majors in 1980 was 850/o while in 1981 this share had reduced to 800/o mirroring the share transfer to airlines such as Midway, Empire, New York Air, Altair and People Express. Altair and Empire are recording strong load factors on their Fokker F-28s which save as much as 250/o in fuel alone over routes traditionally the domain of the majors. Internationally the CAO reported that 1981 saw a market growth of only 10/o as against 100/o per annum through the 1970s. Total passenger uplift was 730 million or a 2.5% decline on 1981 for a Load Factor of 640/o, one per cent up on the previous year. Freight increased about 3% to thirty billion revenue ton kilometres but increased market competition actually reduced per kilo yield to the point where much freight is currently being carried at below cost.

Second-Level Airlines Making Better Use of Smaller Aircraft:

In this day and age of expensive fuel it is not surprising to see some of the regional second-level operators looking to increase yields with the use of less costly equipment. Air New South Wales are leading the way in concert with Wings Australia, the latter company providing a scheduled Bandeirante on the Sydney/Mudgee route and a Shorts 330 on the Sydney/Walgett sector. These aircraft operate in conjunction with the regular Air New South Wales Fokker F-27s but operate on services that are known to be below regular F-27 breakevens. The result is that the established carrier can continue to provide a regular scheduled service to a rural community and at the same time avoid the inherent losses that were so evident in similar scenarios in Queensland in recent years. Certainly, it is much easier to make money using a thirty-seater with twenty passengers than carrying the same twenty passengers in a 55-seat aircraft using significantly more fuel per revenue seat kilometre.

Warded Off:

We advertised in our last issue that this edition would carry a story on the operation of Ward’s Air Cargo Learjet parcel service. We went to a lot of trouble doing this article and preparing special artwork to accompany it only to have Ward inform us that under no circumstances did they wish the article to run. Despite specific requests, no reason was forthcoming from management and a review of the article by a number of senior airline flight crew has certainly indicated no apparent mistakes in copy. Why Ward should adopt this attitude remains a mystery to everybody associated with this magazine. The subject of night air freight operations is one of great interest and we hope to be able to bring you a similar article, using other operators, in a coming edition.

Tristar Ends an Era:

Lockheed will now be out of the commercial airliner market for some decades as a result of the cancellation of the Tristar programme. Lockheed lost heavily on the propjet Electra in the fifties and early sixties only to absorb the losses through ongoing profits made by the successful Orion ASW aircraft. Ironically, much of the profit made on the successful Orion and Hercules projects over the past decade has been poured year after year into absorbing losses by the Tristar That has ended now and Lockheed will be writing off something in the region of $400 m when the 280th and final L1011 leaves the Palmdale assembly building in 1984. Total accumulated Tristar losses adjusted for inflation in current dollars will exceed two and a half billion dollars.Abandonment of the programme was forced upon Lockheed when the bottom fell out of the airliner market during 1980 thereby losing Lockheed the opportunity to make the programme profitable with relatively large volume production through the nineteen eighties. Sadly for the Tristar, this was not to be. Lockheed has mentioned in the past that the Tristar programme could ‘tread water’ with a production run of 24 aircraft a year; 36 aircraft a year would see the aircraft eventually in the black. Rolls Royce will also be affected by the Tristar loss as almost 80/o of total RR sales revolve around the Californian Trijet. Rolls have in recent times been making strong inroads against their American engine competitors on the Boeing 747 which will help soften the loss of the launch airframe for the original RB211 back in 1970, in fact through the first half of 1981 more than half the 747s leaving the Boeing line were Rolls Royce powered

A Leg Ahead of the Competition:

Western Airlines has come up with an innovative idea designed to reduce aircraft dry weight and attract new passengers to its Los Angeles-based route system The airline came to the quite logical conclusion that as it was barely carrying a 50% load factor on most flights why not remove several seat rows, allowing passengers additional legroom not found on competitors’ aircraft, while reducing aircraft weight, thereby saving fuel. Western are removing no less than 21 seats from their 720-200s and 10 seats from their 737-200s. Western expects the weight saving will reduce company fuel bills by $640,000 alone in the first year of operation. Certainly, as a gimmick, the move does have a lot to commend it in an airline environment (North America) which is, despite the ATC problems, saturated with seat capacity

A Likely Scenario?

Residents of NSW, particularly Sydney, know well how controversial the twin problems of Sydney’s Mascot Airport and the lack of generating capacity in the NSW electricity grid are to the Wran government. Right, how about a scenario that goes like this – NSW is critically short of electricity; blackouts, a certainty for the coming winter, are destroying the electoral credibility of the NSW State Labor government. On the other hand, Neville Wran refuses to acknowledge the Federal government’s wishes for a second runway at Mascot Airport. Minister for Transport, Ralph Hunt and Federal Minister for Energy, Senator Carrick just might hold the cards around mid-year when Neville Wran has to literally beg for Snowy Mountains hydroelectricity to meet NSW requirements. Senator Carrick already has played a very tough role over the December power shortfall, stating unequivocally that the ‘power must be given back and NSW will not receive more than its fair share this winter’. Snowy Mountains Scheme water reserves are also required for Victoria, an energy State with a ‘cooperative to Canberra’ attitude. w,11 the axe falls when Mr Hunt, with a little assistance from Senator Carrick, persuades the NSW Premier what a practical idea a second runway would be at Mascot. Power for planes, well not entirely, but a little back-scratching between Canberra and Macquarie Street might find the lights on this winter and step one being taken to perform an exercise long overdue at KSA. It is certainly worth watching.

Ariane a Goer:

The European consortium of AirianeSpace have now declared their Ariane rocket programme a success with the completion of the fourth and final test mission running exactly as planned. Ariane can launch into orbit, claims the enthusiastic Arianespace marketing team recently visiting Australia to discuss our Auspat project, a payload 30% cheaper than NASA using either the workhorse Delta or Shuttle Orbiter. Already several major US corporations have defected to ArianSpace due to rising costs and programme delays with the US Shuttle. Western Union, Southern Pacific Communications and GTE Satellite Corp are three recent defectors to take advantage of earlier launch dates and lower costs currently provided by the European Space Agency.

DC-10 Reprieve:

The future of the DC-10 programme has been saved by a 13th January firm order for four additional KC-10A tankers for the USAF. These aircraft had initially been dropped from the 1982 US defence budget which placed in jeopardy the entire DC-10 programme as no such aircraft were due to be delivered to airlines once current orders were finalised at the end of this year. The four KC-10As bring to sixteen the number of Extenders ordered by the USAF while all four will be delivered during 1983 along with a late order for a single DC-10-40 for Japan Air Lines’ domestic operations. If the DC-10 can survive the next few years it will, in the absence of the Lockheed Tristar, go on to remain in production for many years to come due to the number of fuel-efficient extended fuselage versions in the offing that offer viable alternatives to the long-haul widebody airliner market. At the closing of the press, MDC had firm orders for 367 DC-1Os, plus conditional orders and options for 13 more. Of these, 358 had been delivered.

Australia Goes for FAA MLS Contract:

interscan Australia Pty Ltd (IAPL) have joined with Northrop-Wilcoxto to win one of the most important aviation contracts in recent history. IAPL will be tendering for the delivery and installation of 95 sets for the US Federal Aviation Administration (FAA). Whoever wins the contract will certainly be in the front seat to provide MLS systems as eventual replacements for the current VHF Instrument Landing Systems in use throughout the world. Worth billions of dollars in the long term Australia has already invested eight million dollars in MLS research and by plugging ahead with a system based on simplicity the!APL/Northrop-Wilcox partnership hopes to triumph over such electronic giants as Sperry, Haseltine, Thomson-CSF and Bendix.

INS Saves TAA Fuel:

TAA have, according to General Manager, Mr Frank Ball, saved the cost of purchasing a new aircraft fleet by using their in-house technical expertise to modernise their existing fleet. All TAA Boeing 727s are currently being fitted with dual Inertial Navigation Systems (INS) which will allow the Jets to fly a more fuel-efficient, shorter route between two points. On the Sydney/Perth sector, the INS-equipped 727s will be able to fly a maximum payload direct sector equivalent to that of Ansell’s 727LR. The LR has to carry the weight of additional fuselage fuel tanks on shorter sectors which TAA claim is an unnecessary payload penalty. The fuel saving on an INS-equipped 727 amounts to around 10/o or more than $130,000 annually which will pay for the system within two years of introduction. The primary benefit of the INS system – and the same applies to Ansett’s Omega system – is that the aircraft does not have to laboriously track between navigation beacons, often resulting in a dog-leg course which wastes not only time but fuel and does not allow the flexibility of route vectoring inherent in an INS type system. On encountering particularly turbulent weather the INS-equipped aircraft can bypass a storm centre much quicker than an aircraft tracking between land beacons. This widespread adaptation of independent navigation systems is causing a rethink in the DoTA regarding the requirement for such aircraft to have to use the dog leg beacon system. Plans are afoot to operate the two systems in concert with INS and Omega-equipped aircraft flying their own ‘straight’ routes and other aircraft utilising the DME-type beacon system.

The other development from TAA is of course the refurbishment of eight of their DC-9s to Super 30 specifications. The refurbishment will cost $500,000 per aircraft but according to TAA will result in aircraft as equally appealing as the competing 737-200. Fitment of a completely new pressurisation system, Dash 80 type interior, Airbus seats and an engine synchronisation system will save TAA from buying an interim aircraft prior to the new 150-seaters becoming available later this decade. To 1990 TAA will rely upon a fleet of Airbus A300, Boeing 727-200 and DC-9 Super 30 aircraft which the company believes will give TAA the most cost-effective ratio of seating capacity for the decade ahead. The airline has stopped active investigation of the 737-300 and the DC-9 Super 80 and will opt for either the Boeing 7-7, Airbus A320 or MDF-100 for introduction around 1990.

ATI & TAA Begin Discounting, Is This the Start of a New Era?

TAA’s decision to offer more than 57,000 tickets at a 30% discount (later increased to 40%) is certainly to be lauded, indeed it took all of us by surprise. The fact that Ansett retaliated overnight with a 40% discount (sounds like the Sydney/Canberra Fokker war all over again) shows how tenuous that precious state of market share (see Comment, p. 50, Sept. issue) Is to our two majors. Both carriers were responding to the current trough in the domestic passenger market which commenced around October last year. While it is refreshing to see both carriers offering the public an enhanced opportunity for air travel through cheaper fares we do wonder if many people intending to travel in the coming months will simply jump on the February bandwagon and fly now. The result, if this happened, would be that traffic again would slump even lower come the first of March. Either way, good luck Ansett and TAA and ten points to the latter carrier for initiating the action in the first place.

PSA Doubledash 80 Order:

California-based operator, Pacific Southwest Airlines has doubled its order of McDonnell Douglas DC-9 Dash 80 transports from 13 to 27 aircraft. PSA, like competitor, AirCal, are extremely happy with Dash 80 operations claiming fuel savings as great as 20% over the Boeing 737-200 and up to 40% over the older 727-100. MDC is looking at a CFM56-powered Dash 80 which will cut fuel consumption by a further 20% though will require more maintenance than the established JT8 variant.

Train vs Plane:

NSW Transport Minister, Mr Peter Cox is fairly confident that his new XPT express trains will wrest much traffic from the NSW intrastate airlines, principally Air New South Wales and East-West. Mr Cox was most jubilant during an evening television news programme on February 2nd where he stated that ‘the XPT will cost the passengers about half the first class fare of the airlines’. Obviously, Mr Cox’s knowledge of aviation, indeed NSW aviation in particular, is mirrored in his colleagues’ consistent head-in-the-sand attitude towards any extension of operations at Kingsford Smith Airport. The fact that the intrastate airlines do not have a first-class fare is probably as unknown to Mr Cox as the results of the MANS committee which sat so many years ago in an attempt to bring some sanity into the KSA second runway situation. Meanwhile both airlines report that the XPT won’t harm their traffic patterns unduly as a totally different market sector travel by train in NSW. One of the most apparent reasons all governments lose so much money on passenger train operations is that by and large a relatively high percentage of long-haul train travellers are on vastly reduced fares through their pensioner or welfare recipient status, hence the XPT will still be full of minimal-fare paying passengers.

MDF Project Scuttled:

Fokker and McDonnell Douglas took the aviation world by surprise last April with the unexpected announcement of their teaming for the development of the 150-seat MDF100 airliner. Almost as surprising was the announcement of early February that the partnership was over and that neither manufacturer felt that the world airline industry was ready for this class of airliner by 1985. For Fokker it is a big move; gone forever is the possibility of an F-29, a paper aeroplane that occupied the hearts and minds of the Fokker marketing and development divisions for almost a decade. Instead, the Dutch company will now launch into a full-scale effort to bring out a Friendship successor. Seventy to eighty seats, two advanced turboprops turning new generation ‘hush’ propellors and offering seat mile economies up to 40% better than existing 50 sealers. McDonnell Douglas, who are constantly in a very tenuous position with the DC-10 line, will proceed at a reduced pace with a 150-seater, probably a shortened version of the original ATMA twin-aisle aircraft. Boeing looks assured of extremely good long-term sales with their three new projects, the 757, 767 and the 737-300 and with the demise of a potential competitor in the MDF100 will now probably become more aggressive in their pursuit of the 150-seat market. Boeing will still time their entrant to be available around 1988 which would present airlines with a chance to climb out of the current financial gloom and with tried and tested engines that definitely won’t be available till around 1986.

Parcels More Profitable Than People:

Federal Express (p. 92, Dec. issue) certainly prove the theory that parcels are more profitable than people. The carrier grossed $US 34.9 m for the quarter ending November 30, a whopping 49% up on the same period for 1980.