News Desk

Sales
BOEING 767: Kazakh carrier Air Astana has ordered four 767-300ERs.
BOEING 777: Pakistan International Airlines has ordered five 777-300ERs with options on five more.
BOEING 787: Air Astana has ordered three 787 Dreamliners,
EMBRAER E-JET: Estonian Air will purchase E-175s and one 112-seat E-190 and will lease an additional four E-170s and four E-190s.

Boeing delivers first 747-8I – to a VIP
Boeing has delivered the first 747-8I, with the milestone aircraft now to be outfitted in a VIP configuration before entering service with its undisclosed owner, reported to be the Government of Qatar.
The VIP 747-8I, registered A7-HHE, was handed over on February 28 with minimal interior fitout and will now spend six months having a luxury sleeping loft installed at a Boeing facility in Kansas. The aircraft will then head to Lufthansa Technik in Germany to complete the remainder of the interior, which will be designed to seat up to 100 passengers. Service entry is expected in 2014.
Boeing says it will deliver the first passenger configured 747-8 Intercontinental to launch customer Lufthansa in the “very near future.”
Boeing has so far announced 111 orders for the passenger and cargo versions of the 747-8, with Lufthansa ordering 20 747-8Is. Deliveries of the 747-8F freighter began in October.
Airbus in A380 talks with two ME carriers
Airbus says it is in negotiations to sell its A380 superjumbo jet to a pair of new airline customers in the Middle East, with a company official telling Bloomberg the delivery schedule of the aircraft will likely determine whether the deals go ahead.
The Middle East has already emerged as the prime sales market for the A380 as Emirates, Etihad and Qatar Airways position themselves as premier long haul carriers connecting Europe and the Americas with Asia.
Emirates is the world’s largest A380 operator with a fleet of 20 out of a total order of 90. Etihad and Qatar Airways have ordered a combined 20 of the jets.
Other potential Middle Eastern A380 customers could include Royal Jordanian Airlines, Saudi Arabian Airlines and Gulf Air.
First flight for Thai A380
Thai Airways’ first Airbus A380 made its maiden flight yesterday from Toulouse, France to Hamburg, Germany, where it will undergo cabin installation and painting.
Thai will become the ninth A380 operator when it takes delivery of the aircraft, scheduled for the third quarter of this year. The airline has ordered six of the superjumbo jets and will operate them on routes between Bangkok and Europe.
Airbus readies A350 landing gear tests
Airbus will begin testing the main and nose landing gear of its A350 XWB after completing a test bench at its facility in the British city of Filton.
The European planemaker says it is carrying out extensive testing campaigns on all A350 systems well ahead of first flight next year, part of an effort to head off the production problems that have delayed other high-profile new jetliners such as the Airbus A380 and Boeing 787.
China blocks Airbus orders over EU carbon price

The Chinese government has held up $12 billion in aircraft orders from Airbus in retaliation for the EU’s emissions trading scheme, Airbus says.
China has held up $12 billion in aircraft sales from Airbus over the European Union’s carbon pricing scheme, Airbus said in a call for the EU to reconsider the plan.Louis Gallois, the CEO of Airbus parent EADS, told a news conference yesterday that Airbus has become a “hostage” to the dispute between the EU and Beijing, which believes Brussels’ emissions-trading system violates national sovereignty by imposing a price on emissions made outside EU territory.
China is among some 25 non-EU countries that have voiced opposition to the scheme. But Beijing has gone further than most, with Chinese regulators blocking the planned sale of 10 Airbus A380s and 35 A330s to Hong Kong Airlines, Airbus says.
“China is putting on hold orders already agreed with airlines but not approved” by regulators, Gallois said. “We are worried that this conflict is becoming a commercial war.”
Gallois urged the EU to reconsider the carbon pricing plan.
“We’re asking the EU to take into account the global opposition of almost every country outside Europe against this scheme,” he said.
The row will test China’s growing ability to influence international trade policy. Airbus now sells roughly 20 per cent of its new aircraft to Chinese airlines.
Emirates boss has a crack at Airbus over A380 problems

Emirates Airlines President Tim Clark has lashed out at Airbus over its handling of A380 wing cracks, saying the airline will seek compensation for a claimed $90 million in lost revenues.
Emirates is having to temporarily ground six of its 21 A380s at a time while the wing cracks are fixed. Clark told the Financial Times that cracks have been found in 10 A380s so far and that all 21 are likely to need work.
“From a commercial point of view, it’s a dreadful experience,” Clark told the newspaper. “It has caused a lot of commercial hardship and we are not very happy with the way this has gone.”
Clark said Airbus had initially been in denial about the extent of the problem though he said it was now reacting appropriately. Airbus parent EADS this week said it had allocated 105 million euros to cover the cost of repairing all 67 A380s currently in service.
The hairline cracks, first discovered in the wing of a Qantas A380, affect L-shaped brackets connecting metal ribs with the wing interior. Airbus said the cracks were discovered long before they posed any safety risks, but European regulators last month ordered inspections on all A380s once they reach 1300 flights.
Like Airbus, airlines have insisted the cracks pose no threat, but Clark’s comments were a clear indication of simmering frustration over an issue that threatens to undermine passenger confidence. Qantas flies a fleet of 12 A380s as its flagship jet, making it the third largest A380 operator behind Emirates and Singapore Airlines.
Airbus did receive a vote of confidence from a surprising source on Thursday, with Qatar Airways CEO Akbar Al Baker saying the A380 problems were a normal part of the launch of any new aircraft. Al Baker is well known as an often scathing critic of aircraft manufacturers.
“I think they will solve the problems with the A380,” he told Reuters. “It is not a big issue. It is an aircraft that is in its infancy.”
Qatar Airways, however, has yet to take delivery on any of the 10 A380s it has on order. Emirates operates the world’s largest A380 fleet and has 69 more of the jets on order.
Boeing wraps up testing of 787 with GE engine

Boeing says it has completed all testing required for type certification of its 787-8 Dreamliner with General Electric GEnx engines.
“The last phase of testing focused on extended operations onboard a production airplane,” said Mike Sinnett, vice president and chief project engineer, 787 program. “The airplane performed beautifully during this testing, further demonstrating its reliability.”
The 787 received FAA certification with Rolls-Royce engines in August 2011 and Boeing expects certification with the GE engine option to follow soon. Flight testing concluded last month.
Boeing makes up lost ground on Airbus
Boeing has scored nearly four times as many aircraft orders as Airbus over the first two months of 2012 as it seeks to make up ground on its European rival.
The US airframer sold 387 aircraft during January and February, headlined by the closing of a deal for 230 737 MAX aircraft with Indonesian LCC Lion Air. Airbus, meanwhile, sold 97 aircraft, with both manufacturers delivering 84 aircraft.
Boeing reached a low point in its longtime rivalry with Airbus last year but has tabbed hopes for a comeback on a new generation of fuel efficient aircraft like the 737 MAX and 787 Dreamliner. The 787 entered limited commercial service late last year. The 737 MAX is scheduled to begin deliveries in 2017 but is already tallying substantial orders, with Boeing predicting 2012 will be “The Year of the 737 MAX.”

Military
F-35 clears test hurdle with weapons flight
The F-35 Joint Strike Fighter has flown its first test mission fitted with external weapons.
The load for the test flight from at Edwards Air Force Base in California included a pair of air-to-air AIM-9X missiles mounted on outboard wing stations of an F-35A, in addition to two 2000lb guided bombs and two medium range AIM-120 air-to-air missiles, according to F-35 maker Lockheed Martin. No weapons were fired during the mission.
The F-35A is designed to carry up to 8170kg on 10 weapon stations, including four stations in a pair of internal weapons bays designed to maximise stealth.
Boeing completes multi-year II Hornet deliveries
Boeing today announced that it has completed delivery of 257 F/A-18E/F Super Hornet strike fighters and EA-18G Growler electronic attack aircraft to the US Navy under its second multi-year contract.
The aircraft were delivered to the Navy from 2007 through 2011 under a multi-year procurement (MYP) contract awarded in 2003. The Navy purchased the aircraft during fiscal years 2005-2009.
The initial MYP II contract award included 210 F/A-18E/F and EA-18G aircraft. Through fiscal year 2009, 47 more aircraft were added to the contract, including 24 F/A-18Fs acquired by the Royal Australian Air Force under a Foreign Military Sales agreement with the US Navy.
On September 28 2010, the Navy awarded Boeing the MYP III contract for delivery of 66 F/A-18E/Fs and 58 EA-18Gs, to be purchased through 2013.
Boeing delivered 210 Super Hornets to the Navy during MYP I, which spanned fiscal years 2000 through 2004. Procuring aircraft through the first two multi-year contracts generated $1.7 billion in savings for the Navy, Boeing says. MYP III is projected to generate more than $600 million in savings, with total savings of more than $2.3 billion across the three F/A-18E/F and EA-18G contracts.
Boeing said the aircraft purchased under MYP II were all delivered ahead of schedule and within budget.
Lockheed plans F-35 ramp up

Ankara talks turkey
Lockheed Martin says it is preparing to dramatically increase flight testing of the F-35 Joint Strike Fighter this year, with plans including the first firing of live weapons.
In a progress report released today, Lockheed said the F-35 had conducted 114 flight tests for the year through to February 20, with plans for at least 1001 test flights during 2012 and further increases in subsequent years. Since the start of flight testing in 2006, F-35s have flown a total of 1704 times, Lockheed said.
Preparations for live firing are already underway, with test aircraft flying with external wing-mounted weapons in recent days as other aircraft begin “pit testing” of weapons by firing while parked on the ground.
Though the F-35 has been plagued by delays and cost overruns, Lockheed said the test program has reached a number of milestones this year, including first night flight and delivery of the first two production models of the F-35B STOVL variant to the US Marine Corps on January 11.
In other F-35 news, Turkey’s defence minister said on Thursday that the country will buy 100 of the fighters for an estimated US$16 billion and expects to receive the first two aircraft by 2015.
A JSF program partner country, Turkey has long planned to purchase the jets to replace ageing F-4 and F-16 fighters, but rising costs have raised questions about the program in a number of countries, and the comments on Thursday were the first indication from Ankara of how much it expects the purchase to cost.
Interestingly, Australia’s own total buy of 100 F-35s has been budgetted to cost A$16 billion.
JSF partners to march on Washington
International partners in the F-35 JSF program are set to meet with US Defense officials in Washington next week to express their dissatisfaction at the continual slowdown in US service acquisition numbers.
Many of the partners slated to buy F-35s early in the production run – including Canada, Australia and Italy – reportedly are disappointed at the Obama Administration’s proposal to delay acquisition of as many as 179 F-35s from about five low rate initial production (LRIP) lots, leaving partners facing higher acquisition costs for their early build aircraft. The slowdown has been attributed to ‘concurrency’ issues found during testing and production, which will see early build F-35s require structural modifications at a later date in order to meet their projected life-of-type.
But concurrency issues are not new to fighter programs and industry sources indicate those found on the F-35 to date have been caught much earlier and are of an “order of magnitude” fewer than those found on previous programs such as the F/A-18A-D and F-16. They say claims by Pentagon acquisition head Frank Kendall that the slowdown is due to the concurrency issues are really a cover for budget cuts under the US’s ongoing fiscal crisis.
Australia is scheduled to take its first two F-35As from LRIP 6 which is currently being negotiated for delivery in 2014, with four more in LRIP 8 and eight F-35As in LRIP 9. These first 14 aircraft will be required in order to commence pilot and maintainer training in the US from 2015 before returning to Australia in 2017 to establish an initial operating capability (IOC). But US plans to push the 179 aircraft out beyond these lots will see a price rise of up to US$10 million per aircraft due to lower economies of scale.
Alenia stance complicates C-27J prospects
The RAAF has expressed a clear preference for the C-27J tactical transport as a replacement for the Caribou airlifter, the last of which were retired in 2009. (Alenia)
A refusal by Alenia Aermacchi to support existing C-27J transports sold by the US to other countries will likely complicate Australia’s long search to replace its retired Caribou airlifters.
In what were seen as surprising comments, Alenia CEO Giuseppi Giordo has been quoted saying the company will not support the 21 C-27Js it has delivered to the US if they are resold elsewhere. The US is considering selling the nearly new aircraft after cutting the C-27J program, with Australia having expressed interest in the aircraft to fulfil the Air 8000 Phase 2 requirement for a battlefield airlifter.
Giordo said Alenia will support new C-27Js purchase through the US Foreign Military Sales (FMS) program but views the used aircraft as competition to its own efforts to sell the C-27J internationally.
“In fact, we will do our best – not only us, but the Italian government – not to support those planes,” he told the US publication DefenseNews. “In that case the US government will be competing against our international campaigns in a market where 21 airplanes is a big deal.”
The US Defense Security Cooperation Agency in December flagged the possible sale of 10 C-27Js to Australia for an estimated US$950 million, but that was before the aircraft fell victim to budget cuts and was cancelled early this month.
For Australia, the US decision to axe the program removed the interoperability advantages of flying an aircraft also used by its chief ally. On the other hand, it opened up the possibility of buying little used US aircraft – all of which have been delivered since 2008 – at a substantial discount.
Alenia’s move to refuse support for the used aircraft will likely undermine the appeal of the existing aircraft, but it’s also worth noting that the US hasn’t formally announced plans to sell the aircraft and could instead decide to transfer them to the Air National Guard or another agency like Homeland Security.
In any case, Alenia’s aggressive stance is likely to bolster Airbus Military’s equally aggressive push to get the RAAF to consider its C295 transport for the Air 8000 requirement. Though the RAAF has expressed a clear preference for the C-27Js larger cargo capacity and better short-field performance – and Australia could still buy new planes either through FMS or directly from Alenia – the C295 presents a cheaper and more widely used alternative, advantages Airbus is sure to mention as it lobbies Defence over the coming weeks.
USAF nixes Embraer contract over concerns
Concerns over the procurement process have led the US Air Force to cancel a US$355 million contract to supply light attack aircraft to the nascent Afghan Air Force.
The Light Air Support (LAS) contract was awarded in December to Embraer and California’s Sierra Nevada Corp for 20 Embraer AT-29 Super Tucanos. Rival Hawker Beechcraft filed suit against the government on December 27, claiming its AT-6 aircraft had been unfairly disqualified from bidding.
In a statement released yesterday, Air Force Secretary Michael Donley said the service was “not satisfied with the quality of the documentation supporting the award decision” and had initiated an investigation, with the first report due on March 12.
In a statement, Embraer said it would await further clarification of the issue before deciding how to respond.
“Embraer participated in the LAS selection process providing, on time and without exceptions, all the required documentation,” it said.
Hawker Beechcraft, meanwhile, hailed the decision and said it looked forward to competing for the contract.
“This LAS competition is about much more than 20 aircraft for Afghanistan,” Hawker’s chairman, Bill Boisture, said in the statement. “It is about the US Air Force’s ability to build relationships with US partner nations around the world for a generation to come. We continue to believe the American manufactured AT-6 is the right aircraft for this critical United States mission.”
Yes we can support the C-27J, Alenia says
Likely seeking to tramp down concerns over its ability to support any C-27J transports purchased by Australia, Alenia Aermacchi and longtime partner L-3 Communications issued a statement today reiterating their commitment to “meeting the needs of the Commonwealth.”
“The capability that the C-27J can provide for the Commonwealth is well suited to its operational requirements,” Alenia CEO Guiseppe Giordo said in the statement. “Beyond delivering the capability, we are committed to a long term and value added relationship with the Commonwealth that will enable them to operate and maintain the capability autonomously throughout its service life.”
The statement offered few specifics, however, and is unlikely to quiet the questions swirling around the C-27J after Alenia said it would refuse to support used aircraft sold by the US to third countries. The US, which ordered 21 C-27Js, cancelled the program earlier this month due to budget cuts and is reportedly seeking buyers for its nearly new aircraft, all of which have been delivered since 2008.
Alenia and L-3 have a longstanding partnership to market the C-27J through the US Foreign Military Sales (FMS) program, and today’s statement indicates their position that an FMS purchase of new aircraft remains a viable option for Australia. It’s unclear how much the US withdrawal from the program will impact the long term cost effectiveness of an FMS purchase, but it’s not likely to make it a more attractive option.
It is understood that Alenia and Raytheon Australia are also partnering to offer the C-27J to Australia as a direct commercial sale. Airbus Military, meanwhile, has used the turmoil surrounding the C-27J to launch a renewed push in favour of its C295 airlifter, though the RAAF has expressed a clear preference for the C-27J’s larger cargo hold and better short field performance.
In response to questions over Alenia’s refusal to support used C-27Js, a Defence spokesman said support arrangements would be taken into consideration as the ADF weighs its options.
“The support capacity and ability of manufactures and suppliers…are part of the evaluation process for all Defence acquisitions,” the spokesperson said.
The US Defense Security Cooperation Agency in December flagged the possible FMS sale of 10 C-27Js to Australia for an estimated US$950 million, but much has happened since then.
Japan threatens to cancel F-35 orders if costs rise

Japan has said it may cancel its F-35 orders if the jets rise in price or face further delays, as fallout continues over US plans to put off its own orders for the fighters.
Japan has agreed to pay about US$123 million per plane under an initial order for four of the jets, which are scheduled for delivery by 2017. The country plans to buy 42 F-35s in all.
But as part of cost cutting moves at the Pentagon, the US has announced plans to delay orders for 179 F-35s over the next five years, a decision F-35 maker Lockheed Martin says will increase unit costs by as much as $10 million per aircraft and hamper plans to ramp up production.
Japanese Defense Minister Naoki Tanaka told the country’s parliament on Wednesday that he expected to conclude an official contract for the first four planes by mid-year.
“If it turns out they cannot meet what they have proposed by that time, that would raise concerns about our defence capability,” Tanaka said, according to Reuters. “I believe we would need to consider as a potential option matters like cancelling our orders and starting a new selection process if that is the case.”
Officials from other partner countries in the F-35 program – including Australia — were expected to meet with US defense officials this week to express their displeasure with the slowdown in US acquisitions.
Australia is scheduled to take its first two F-35As in 2014, with 12 more to follow out of a total requirement for 100. These first 14 aircraft will be required in order to commence pilot and maintainer training in the US from 2015 before returning to Australia in 2017 to establish an initial operating capability (IOC).
Meanwhile, the US Air Force this week authorised the start of initial, limited flights of the F-35A by certified test pilots at Eglin Air Force Base in Florida, where pilots and maintainers will be trained. The first flight is scheduled for next week.
Quickstep lands C-130J work
Sydney based Quickstep Holdings Limited has secured a contract to manufacture carbon fibre wing flaps for Lockheed Martin’s C-130J airlifter.
Quickstep said the deal would be worth an estimated $75 to $100 million over five years and could create more than 60 new jobs at the company’s Bankstown Airport facility.
The wing flaps were previously supplied by Boeing Aerostructures Australia. Quickstep secured right of first refusal on most of Boeing’s existing C-130J manufacturing facilities at Bankstown after Boeing announced that it would relocate from Sydney to Melbourne.
“It is good news for manufacturing in Australia demonstrating that we can keep manufacturing work in country through innovation and high-end capabilities,” Quickstep Managing Director Philippe Odouard said.
Quickstep moved to Bankstown from Western Australia last year after securing a major deal with Northrup Grumman to produce carbon composite parts for the F-35 Joint Strike Fighter.
ADF charter makes hard landing in Darwin
An A340 operating a charter flight carrying 115 Australian troops to the Middle East made a hard landing in Darwin on February 28.
No one was hurt in the incident, which was blamed on bad weather and heavy winds. The aircraft remains in Darwin awaiting a technical assessment and the ATSB will investigate the incident, Defence said.
A replacement aircraft was flown from the UK to Al Minhad air base near Dubai to pick up another group of 61 Australian troops who had been scheduled to come home on the return leg of the affected flight. Those troops arrived in Perth on Saturday morning.
“Any delay in getting our people home is regrettable,” Defence said in a statement.
ADF troops going to and from the Middle East typically fly aboard an Airbus A340 chartered by Brisbane based Adagold Aviation under a $122 million contract. The flights are operated by Portuguese firm Hifly.
The latest incident comes two weeks after news reports, quoting a former flight attendant, suggested the flights operate with poor safety standards and little security.
In its statement this weekend, Defence said Adagold “has consistently met and continues to meet it MEAO Air Sustainment contractual obligations to the full satisfaction of Defence.”
Williamtown RAAF pilot LIFTs local youth
Williamtown-based RAAF F/A-18 pilot SQNLDR Paul Simmons has officially launched a program aimed at youth at risk in the Newcastle and Hunter region.
Called LIFT – for Learning, Inspiration, Friendship and Trust – the organisation has been operating since 2009 in collaboration with other youth development organisations and offers tailored and practical aviation based programs that teach risk management and decision making life skills, while building self-esteem.
Perhaps best known as the RAAF’s Hornet display pilot from 2005 to 2007, Simmons says LIFT was born from his belief and that of other of military pilots that aviation could be used to radically engage at-risk youth, inspiring them to positively tackle adversity and achieve their inherent potential. Simmons has remained a senior Hornet instructor at 2OCU on a part-time basis while developing LIFT.
The organisation is advised by a board of professionals from areas including aviation, accountancy, law, psychology and business compliance and partners with organisations including Allambi Youth Services, Life Without Barriers, the NSW Department of Juvenile Justice and two Hunter region schools.
LIFT is supported by the Newcastle Permanent and the Royal Newcastle Aero Club and is taking its first tentative steps into publicising its activities and trying to attract new sponsorship. To find out more about LIFT’s activities, please visit its website.
Airbus Military calls for a level playing field
In the wake of the likely cancellation of the US Joint Cargo Aircraft program, Airbus Military has redoubled its marketing campaign efforts to push for an open tender for Australia’s Battlefield Airlifter (BFA) requirement under project AIR 8000 Phase 2.
In a media briefing held in Canberra on March 6, Airbus Military Australia C295 program manager Valentin Merino told journalists that the cancellation of the US JCA program meant many of the advantages in acquiring the Alenia C-27J, the RAAF’s preferred solution for the requirement to replace the retired Caribou capability, were no longer applicable.
“We are 50 per cent lower in the acquisition cost than the C-27J, and over the life of the aircraft … our assessment is that we can save around $400 million dollars over 30 years of operation,” Mr Merino said.
The recent Presidential FY13 budget proposal kills off JCA program, canceling future buys and with the existing fleet to be sold off. Mr Merino said this meant none of the certainties of a normal Foreign Military Sales (FMS) deal would now apply, such as supply chain confidence and commonality with a much larger US fleet.
Mr Merino also questioned the RAAF’s cited preference for the C-27J for its ability to carry an Army G-Wagon. “Why is this requirement for vehicle carriage seemingly driving the acquisition for these aircraft when this type of mission will constitute such a marginal number of those undertaken by the battlefield airlifter?” he asked.
Acknowledging the C295‘s inability to carry a G-Wagon because of its shorter cabin height, Mr Merino cited Airbus’s internal desktop-based analysis of Alenia’s own data, which he said showed the C-27J could not fit 50 per cent of the incoming G-Wagon fleet either. The G-Wagon fleet is made up of both station wagons and a cab-chassis version fitted with box-shaped rear modules. The height of these modules exceed the maximum safe cargo height for the C-27J under the RAAF’s own DEF(AUST) 9009A standards, according to Airbus.
Airbus pitches RAAF sixth MRTT
Airbus Australia Program Manager Valentin Merino has told Australian media that the company has made an unsolicited offer to the Royal Australian Air Force for a sixth MRTT/KC-30 tanker.
The ‘green’ Airbus-owned aircraft was built for the US KC-X program, which was originally awarded to Airbus before being cancelled on appeal. Mr Merino said the company had received interest from Spain and France for the tanker, but had made an offer to Australia, as a preferred customer.
“The original contract signing in 2005 was for five airplanes with options on three more, but that expired in 2006,” Mr Merino said. “The RAAF originally saw a requirement for eight tanker aircraft, and so we made them an offer of a sixth.”
Mr Merino said Airbus would require a decision from the Department of Defence by June 2012 at the latest, but the first customer to make an affirmative decision would get the aircraft.
“The tools for MRTT conversion at our Brisbane facility are already being disassembled and sent back. If the RAAF purchase the sixth MRTT, we can leverage existing knowledge and infrastructure, as well as keep up to 200 people employed,” Mr Merino said.
The Brisbane conversion facility for the existing five KC-30 tankers is operated by Qantas Defence Services and employs both Qantas staff and contractors.
The tanker has an estimated cost of between $150 million and $200 million, and could be ready for service 12 months after starting conversion.
Boeing delivers first P-8A
Boeing has delivered the first production P-8A Poseidon maritime surveillance aircraft to the US Navy.
The aircraft is the first of 13 scheduled to be delivered under a US$1.6 billion low-rate initial production (LRIP) contract awarded in 2011. The US Navy expects to eventually order 117 P-8s to replace its P-3C Orions, with IOC for the first set of aircraft expected by next year.
Australia expects to order up to 10 of the 737-800 based aircraft under phase 2B of Project Air 7000. India has also ordered eight similar P-8Is.
Following delivery, US Navy pilots flew the first P-8A to Naval Air Station Jacksonville in Florida where it will be used for aircrew training.
Military briefs

Airbus Military, meanwhile, announced that Kazakhstan has ordered two C295 military transports for its air force. The deal includes options for six additional airlifters, with the first two firm orders scheduled for delivery in 2013.

Airlines
Union boss bashes “foul liar” Joyce
A union official has lashed out at Qantas plans to shed 500 jobs as illegal, saying the airline should be prosecuted under the Fair Work Act.
Calling Qantas CEO Alan Joyce a “foul liar,” Transport Workers Union boss Tony Sheldon said the plan to cut jobs violated requirement laid out by Fair Work Australia and called on the labour umpire to prosecute the airline “with all the strengths of the law.”
“They have an obligation to consult, negotiate and have proper conversations and engagement with their work force when restructuring occurs,” Sheldon said, adding that the union would “fight for the heart and soul of Qantas.”
The TWU and the union representing Qantas pilots remain in binding arbitration overseen by Fair Work Australia, which barred the unions and the airline from taking industrial action after Qantas management grounded the fleet in October amid a contract row.
Sheldon’s comments to reporters on Friday made clear that the relationship between management and the unions has continued to deteriorate.
“It’s clear the Australian people have got one foul liar running a company and destroying the company,” Sheldon said of Joyce. “It’s become clearer and clearer from both statements within Qantas management privately, and from our politicians in Canberra on both sides of the house, that Qantas intends to strip the flying kangaroo and Jetstar in an operation to maximise profits for the executives.”
Qantas announced plans to cut jobs yesterday after revealing that half yearly profits had fallen 83 per cent. The jobs cuts are expected to come from consolidation of catering and engineering operations, with another 1400-plus jobs under threat as Qantas reviews its heavy maintenance operations in Australia.
Alliance adds 737 to fleet
Alliance Airlines has added a 737-400 to its fleet, with the ex Qantas and Qantas-Jetconnect aircraft now operated on Alliance’s behalf by New Zealand based Airwork.
The aircraft, ZK-JTQ, arrived in Perth on Monday. It will be operate a twice daily mine charter between Perth and Karratha.

Skywest takes over Perth-Derby route
Skywest Airlines will take over the regular public transport (RPT) route connecting Perth and Derby (Curtin) following the collapse of Air Australia.
Perth based Skywest will operate the route Monday through Friday beginning today, with flights leaving Perth at 6 am and departing Derby at 9:30am. Skywest will operate the route, which is regulated by the WA Department of Transport, on an interim three month basis.
Skywest CEO Mark Shelton said the airline is keen to assist those in Derby who have been stranded after Air Australia ran out of money and ceased flights on Friday.
“As a regional airline, we are committed to assisting our regional passengers wherever possible,” he said.
On Friday Qantas had said it stood “ready to commence operations on Perth-Derby at short notice”, and that it will begin flights on the Brisbane-Port Hedland route from March 13.
Jetstar pitches plastic

Jetstar hopes plastic can buoy its bottom line as it rolls out a pair of announcements aimed at the card carrying public.
In what the budget carrier bills as a first for an Australian airline, Jetstar will offer a prepaid multicurrency Mastercard-branded travel card, which Jetstar says will offer frequent overseas travellers a more secure, convenient and less expensive alternative to traveller’s cheques and cash exchange.
Nine currencies are available, including the Australian, US, New Zealand, Hong Kong, Singapore and Canadian dollars as well as the Euro, British Pound and Japanese Yen. Customers can apply for and top up the card online.
Loading the card for the first time will incur a fee of $15 with a 1 per cent fee applied to subsequent reloads. A 3 per cent transaction fee will be charged if the card is used in a currency that hasn’t been pre-loaded. The fees are split between Jetstar, Mastercard and Macquarie Bank, which will issue the cards.
Separately, Jetstar is offering up to 30,000 Qantas frequent flyer points to people who successfully apply for a Jetstar Platinum Mastercard.
The moves come as airlines increasingly venture into services with little direct relationship to flying. Air New Zealand launched a similar travel card late last year.
Vietnam Airlines becomes Jetstar Pacific controlling shareholder

Vietnam Airlines will take over majority ownership of Jetstar Pacific in a move that will see the struggling budget carrier get a $25 million cash injection.
As part of the long rumoured deal, Qantas will increase its share in the airline from 27 to 30 per cent. Vietnam Airlines will take over the majority stake from the Vietnamese State Capital Investment Corporation.
The announcement leaves several unanswered questions. Vietnam Airlines, which in the past has blamed Jetstar Pacific for undercutting fares and causing both airlines to lose money, announced plans late last year to launch its own budget carrier, and it remains unclear whether it still plans to do so or whether Jetstar Pacific will essentially become that budget carrier — and in that case whether it will be rebranded.
Though Vietnam has emerged as one of the world’s fastest growing air travel markets, the budget model has struggled to make headway. Vietnam Airlines retains 80 per cent of the domestic market with Jetstar Pacific holding just 17 per cent, leaving LCCs with one of the lowest rates of market penetration of any country.
Jetstar Pacific has also faced a number of problems in recent years, including safety violations and a government investigation into fuel hedging losses that briefly saw two Qantas executives barred from leaving Vietnam. Indeed, when reports of the takeover by Vietnam Airlines first surfaced in December, Qantas union officials pointed to the budget carrier as an example of the pitfalls of expansion in Asia, saying the takeover was proof “the business model didn’t work.”
Not surprisingly, Qantas executives are taking a different view. In a statement released late yesterday, CEO Alan Joyce said the deal would allow Vietnam Airlines and Jetstar to form a “strategic partnership” similar to the one between Qantas and Jetstar in Australia.
“This partnership brings together the proven low cost model of Jetstar with the unique local knowledge and existing networks of the national carrier,” he said. Jetstar CEO Bruce Buchanon said the low rate of budget travel in Vietnam equalled a “tremendous potential for growth.”
As part of the deal, Qantas will contribute $7.5 million toward an A$25 million capital injection, which will be used to replace the carrier’s five leased Boeing 737-400s with Airbus A320s. Qantas said shareholders had expressed support for plans to expand Jetstar Pacific’s fleet to 15 A320s over the next few years.
A new CEO and Chairman of Jetstar Pacific are expected to be named in the coming weeks.
Virgin Australia profits double
Virgin Australia says rising profits are proof that its transition to a full service airline is paying dividends.
According to figures released today, Virgin’s net profits over the first half of the financial year rose 118 per cent to $51.8 million. Underlying pre-tax profits were up 34 per cent over the previous year to $96.1 million, exceeding market expectations. Revenue was up 18 per cent to $2.0 billion.
The airline said 17 per cent of its revenue came from the government and corporate market, up from 13 per cent in 2010/11 and a key indicator as Virgin rolls out business class cabins across its fleet and moves away from its budget carrier roots. Business and government travel has long been a cash cow for Qantas and remains a critical bulwark in its business model.
Coming a week after Qantas announced job cuts on the back of an 83 per cent drop in half yearly profits, Virgin’s news will add to the sense that the gap between the two airlines is narrowing quickly. Even still, Qantas reported underlying profits of $202 million, more than twice that of Virgin.
Both airlines continue to face difficult economic conditions. Virgin said volatile fuel prices and global uncertainty meant it was unable to forecast its full year performance, though the airline said it expected an improvement on last year.
Air New Zealand to launch Sunshine Coast service
Air New Zealand will launch twice weekly flights to Queensland’s Sunshine Coast this winter as part of its trans Tasman alliance with Virgin Australia.
The A320 flights will operate between Auckland and the Sunshine Coast on Tuesdays and Sundays between July 1 and September 18 and will offer connections to the respective domestic and international networks of the two carriers.
Air New Zealand CEO Rob Fyfe said the service might be expanded if it proves popular.
“There’s a long tradition of Kiwi travellers heading to Queensland for some winter sun so while we’re trialling this new service on a seasonal basis…it may be possible to extent the season if there’s enough demand,” he said.
Virgin plans to split business in bid for foreign investment
Virgin Australia has proposed splitting its business into distinct international and domestic holding companies in a move that would open the way for greater foreign investment in its domestic operations.
Under the Air Navigation Act, Australian airlines with international services are capped at 49 per cent foreign ownership, but purely domestic airlines face no such limit. With foreign ownership of Virgin Australia close to the 49 per cent cap, creating a technically domestic airline would open an avenue for further foreign investment as Virgin seeks to expand.
The move could be of particular interest to Air New Zealand, which already owns a 20 per cent stake in Virgin Australia, as well as to Etihad. The Abu Dhabi based carrier has long been rumoured to hold an interest in Virgin and has made investment in foreign airlines a key part of its business strategy.
Virgin said the move will have no effect on passengers and staff, with the international and domestic businesses continuing to operate as an integrated airline under one brand.
Rather, the changes amount to a reshuffle of the company’s corporate structure. The proposal would create an unlisted entity known as Virgin Australia International Holdings in addition to the current Virgin Australia Holdings, with VAH continuing to provide aircraft, crew, maintenance and capital requirements for both wings of the airline. VAIH would be owned by existing VAH shareholders.
Virgin said it plans to complete the change by the end of March. It proposed a board for VAIH chaired by current HSBC chairman Graham Bailey with directors including Business Council of Australia president Anthony Shepherd, former Federal Finance Minister Lindsay Tanner, Virgin Australia chairman Neil Chatfield and Virgin Australia CEO John Borghetti.
Air NZ to cut jobs on profit plunge

Air New Zealand will cut 441 jobs after profits fell 61 per cent over the first half of the financial year.
The carrier today reported net profits of NZ$38 million (A$29.9m) for the six months ending December 31, down from NZ$98 million for the same period the previous year. Revenues were up 2.5 per cent to NZ$2.3 billion but could not keep pace with rising fuel costs and weak demand for long haul international travel.
“The price of jet fuel has doubled over the last three years but a weak global economy is hindering our ability to pass on these higher fuel costs to passengers,” Air NZ CEO Rob Fyfe said in a statement. “Therefore we have been moving quickly to adapt, to gain greater efficiencies and to develop into a stronger more profitable business.”
Fyfe said 193 jobs had already been cut through non replacement of employees or non renewal of contracts, with a further 73 to be lost to attrition by the end of the financial year. The remaining 175 job cuts will come through redundancies, he said.
The job losses are part of a larger plan to improve the airline’s profitability by NZ$195 million by FY15, Fyfe said. The plan also includes expanding alliances with other airlines, strengthening its international focus on routes in the Pacific, and the recent launch of the carrier’s “OneSmart” prepaid debit and travel card.
Widely credited with stewarding the airline’s product-led renaissance, Fyfe has announced plans to leave Air New Zealand by the end of 2012. A replacement has yet to be named.
Separately, Air New Zealand confirmed that is has converted two options for Boeing 787-9 Dreamliners, bringing its total order of the fuel efficient aircraft to 10. The carrier said it has also agreed to new terms with Boeing that will see the first 787s delivered in the second quarter of 2014, more than three years later than originally expected.
“Despite the extremely frustrating and costly delays, we strongly believe the 787-9 is the right aircraft for Air New Zealand and worth the wait,” Fyfe said.
Jet and Jetstar to interline
India’s Jet and Australia’s Jetstar have announced a new partnership aimed at giving Indian travellers easier access to Jetstar’s Asia Pacific network.
Under the agreement, Jet Airways’ passengers will be able to purchase a single combined ticket that includes follow-on Jetstar connections via Singapore and Australia. Jetstar has agreed to accommodate Jet Airways’ baggage allowance under the agreement.
“India is one of the region’s strongest travel markets and a top inbound market for both Singapore and Australia,” Jetstar Group Chief Commercial Officer David Koczkar said. “This innovative agreement will allow both airlines to cater for the growing appetite for air travel from the emerging Indian middle class.”
Virgin Samoa touches down

Ploynesian Blue has been formally relaunched as Virgin Samoa as the airline’s 737 touched down in Apia today featuring its new Virgin Australia-style livery and interior.
The airline’s 737-800, ZK-PBF Tapu’itea, flew into Samoa from Auckland today, after being repainted and having its interior upgraded by Air New Zealand.
“Today we take the national airline of Samoa into the future,” CEO of Virgin Samoa Mark Pitt said.
“The new livery will increase the airline’s visibility in the eyes of local Samoans and those living abroad as Samoa’s national flag carrier. Since announcing the new name in December last year, the response from the Samoan people has been overwhelmingly positive.”
Virgin Samoa is a joint venture between Virgin Australia and the Government of Samoa.
Rex pilots vote for industrial action
Regional Express (Rex) pilots have voted to take industrial action that could include four hour work stoppages unless the airline ups its contract offer.
Negotiations broke down earlier this month after nearly 14 months of talks, and the Australian Federation of Air Pilots said its officials would meet this week to discuss plans for industrial action if the carrier continues to hold its line.
The action could include stop-work meetings of up to four hours, refusal to accept aircraft with minimum equipment lists, sticking to strict time for sign-on duty, and tinkering of fuel, The Australian reported.
Union officials say their pay demands are fair and would still leave the airline paying less than competitor QantasLink.
Virgin passes along carbon price
Virgin Australia will raise fares by between $1.50 and $6 in response to the carbon tax, a slightly lower surcharge than the one earlier announced by Qantas.
The fare hike will go into effect alongside the federal government’s carbon pricing scheme on July 1. The surcharge will add $1.50 to one-way flights of up to 900 km, $3 to flights between 901-2000km and $6 to flights over 2000km.Virgin said it would also levy an additional $2.80 surcharge on codeshare flights with Etihad Airways to Europe in response to the EU’s Emissions Trading Scheme.
Qantas earlier this month announced a carbon tax surcharge of up to $6.86 per flight as part of larger fare increases blamed on high fuel costs.
Virgin has said it believes the carbon tax, initially set at $23 a tonne, will cost it between $45 and $50 million per year. Qantas has put its cost at $110 to $115 million.
Worthless Air Australia leaves backers out $90m
The extent of the Air Australia debacle became clearer on Wednesday when it was revealed the failed budget carrier had just $442,000 in the bank and up to $90 million in debts when its house of cards collapsed on February 17.
The airline’s abrupt end stranded some 4000 travellers overseas, and it now appears clear that it will leave its 500 creditors holding the bag. During a creditors meeting in Brisbane on Wednesday, administrator Mark Korda reportedly said the airline had only about $1 million in assets. The carrier’s jets, terminal space and offices had all been leased.
ANZ Bank was the largest creditor to the airline, with the airline owing it $20 million.
Korda also revealed that the airline had propped up its failing business by taking in $36 million from the forward sale of 100,000 tickets that are now completely worthless. Korda said his firm, KordaMentha, was continuing to investigate whether the airline traded while insolvent.
Air Australia owner Michael James did not attend the creditors meeting on Wednesday. Beyond an angry text message lashing out at The Courier-Mail newspaper, James has not been heard from publicly since the airline collapsed.
Air Australia’s 354 employees will likely be out $3 million of the roughly $8 million in entitlements they were owed by the airline, with the remaining $5 million coming in only thanks to a government compensation scheme.
Korda said the airline’s losses had been “horrendous” and that a sale was “highly unlikely.” Creditors will meet again on March 23 and are likely to vote to liquidate the little that remains.
Rex says profits up but future bleak
Regional Express released first half financial results this week showing solid profits of $18.5 million but predicting a dismal future, with a “toxic” economic environment and “draconian” government policies conspiring against regional aviation.
“The twin effects of the impending global economic slowdown and the federal government’s draconian policies on regional aviation will no doubt succeed in wiping out regional air services to all but the biggest regional centres over the next few years,” the airline said in a statement, adding that it soon might be forced to cut services on unprofitable rural routes.
Australia’s largest independent regional carrier singled out the carbon tax for criticism, saying it would cost the airline more than $6 million per year even as fuel prices continue to skyrocket.
While the comments reflect Rex’s longstanding public stance against the carbon tax, the numbers released this week lent some new weight to its bleak assessment of the future of regional aviation.
The airline’s passenger numbers for the six months through to December 31 fell 4 per cent while costs per seat kilometre increased more than 8 per cent, mostly due to rising fuel prices. Rex said its positive financial results were mainly due to the strong growth of mining charters for subsidiary Pel Air as well as the commencement of Pel Air’s contract with Ambulance Victoria.
Those numbers underscored the extent to which regional aviation has reflected the increasingly “two-speed” economy of much of rural Australia, with growth overwhelmingly driven by the mining and natural resources sectors. Rex said those factors could force it to shift its focus away from passenger services that provide a vital link for regional towns – a threat it clearly hopes to leverage for more favourable treatment by Canberra.
“Rex will be monitoring the situation closely and in the absence of a more favourable environment will be compelled to divert its resources from marginal regional routes to more lucrative mining charters in order to protect shareholders’ returns,” the carrier said.
Virgin-MAS partnership at an end
Virgin Australia will end its frequent flyer partnership with Malaysia Airlines at the end of March in a move stemming from Virgin’s decision to form an alliance with Singapore Airlines last year.
Virgin and MAS said they would honour forward bookings made through the current partnership, but members of each carrier’s frequent flyer program will not be able to earn new points or use existing ones on the other’s services after April 1.
Virgin and Singapore Airlines launched a reciprocal frequent flyer arrangement last year and last month began codesharing, while Qantas has said it will sponsor MAS’s bid to join the oneworld airline alliance, and the Malaysian airline was expected to feature in Qantas’s Asian expansion plans.
Qantas-SAA deal nixed as ‘duopoly’
A Qantas plea to extend its code-sharing alliance with South African Airways has been rejected, with Australia’s International Air Services Commission saying the partnership discourages competition and amounts to an “effective duopoly.”
Qantas had appealed an earlier decision by the IASC against the agreement but the commission stood by the decision. The IASC did however back away from forcing an immediate end to the deal, allowing Qantas and SAA to continue code-sharing until the end of the year.
The ruling requires the airlines to operate a minimum of ten flights per week connecting Johannesburg with Sydney and Perth.
Qantas has warned that one of the airlines could discontinue services between South Africa and Australia if the tie-up was not allowed to continue. But the IASC ruled that the agreement was a “poor substitute” for direct competition between the two carriers that also discourages other airlines from taking on the route.
“The two airlines have an effective duopoly on the main routes, subject to very little competitive constraint,” the commission said.
Qantas launches Wi-Fi trial
Qantas will tomorrow begin an eight week trial of wireless internet service on A380 flights to and from the US.
Six of the airline’s A380s will be equipped with wi-fi during the trail, with internet connection available on flights between Sydney or Melbourne and Los Angeles. The service will initially be provided free of charge to first and business class passengers and will later be available at cost to economy passengers.
“The eight week trial will give customers the opportunity to access the internet in exactly the same way as a terrestrial wi-fi hotspot in which customers can pay with their credit card and surf the internet,” Qantas executive manager for customer experience Alison Webster said.
The A380 trial follows a more limited test run of in-flight wi-fi on selected domestic flights.
The moves come as Qantas heads toward a larger overhaul of inflight entertainment options built around wireless connections.
Qantas flags further job cuts
Qantas expects a 60 per cent drop in labour demand at its heavy maintenance facilities in Australia over the next five years, the airline has said in comments that could pave the way for further job cuts.
Qantas last month announced plans to consolidate maintenance facilities in Brisbane, Melbourne and Avalon that together employ 1460 workers. At the same time, the airline announced 500 job cuts in maintenance and catering operations.
The release of the 60 per cent figure, in a report in The Australian, represents the first time Qantas has given a public hint as to how much it might further reduce its workforce. Qantas said the reduction in maintenance demand would result from more efficient maintenance systems and the replacement of ageing aircraft with new models that require less work.
The airline has also said it will not do heavy maintenance work on its Airbus A380s in Australia.
The Australian said the airline is considering several options, the most dramatic of which would be to close two of the three Australian facilities and consolidate all operations at the surviving plant.
Tiger gets to second base with Sydney

Tiger Airways will establish a second base at Sydney Airport after CASA approved the carrier’s plan to increase flights to pre-grounding levels over the next six months.
The plan will allow Tiger to use all 10 of its aircraft for the first time since its operations were shut down for six weeks over safety concerns last July and August. Three of the carrier’s jets have sat idle since Tiger returned to the air under a CASA-imposed cap, contributing to losses of about $37.6 million over the first three quarters of the financial year.
Under the expansion, Tiger will base its three currently unused A320s in Sydney starting on July 1 and will increase daily Sydney flights from 18 to 38. The added flights will include “up to four” daily return services on new routes between Sydney-Gold Coast and Sydney-Brisbane as well as two additional daily flights between Sydney and Tiger’s Melbourne hub.
Tiger said the expansion would add 150 new jobs in Sydney, including flight, cabin and ground crew and engineering support. Tiger currently employs about 350 people in Australia.
“We are continuing with our future Australian expansion as planned,” Tiger CEO Andrew David said in a statement. “The business goal was to have all 10 aircraft operating in Australia by the second half of 2012 and today’s news proves we’re on track.”
Under its agreement with CASA, Tiger is cleared to increase daily flights from its current limit of 38 to 42 by July, 50 by August, 58 by September and 64 by October. In an interview with The Australian, David said the increased flight cap combined with the second base in Sydney would allow Tiger to fully utilise its fleet and give the airline a “fighting chance” of profitability.
David said Singapore-based Tiger would also deploy an 11th aircraft to Australia by August to be used as an operational spare as the airline seeks to maintain significant improvements in on-time performance since it came out of the grounding.
Sydney Airport hailed Tiger’s announcement as a win for its partnership with the NSW government to promote the airport. Earlier reports had indicated Tiger was eyeing Brisbane Airport as a second base.
Alongside the announcement, Tiger unveiled plans to sponsor Sydney’s Wests Tigers NRL team for the upcoming season.
RedQ dead?
One of the key pillars of Qantas’s strategy to revive its international business came toppling over as the airline said it had broken off talks with Malaysia Airlines to establish a new premium carrier.
Qantas offered few details, saying only that the talks “would not continue due to parties being unable to reach mutually agreeable commercial terms.”
In a statement, CEO Alan Joyce said Asia remains a priority for Qantas and the airline would continue to look for opportunities to expand, either through joint ventures or alliances. However, he said the uncertain global economy meant the airline would “allocate minimal capital to such ventures.”
“The transformation of Qantas’s international business remains vital, with plans to return the international business to profitability in the short term on track,” Joyce said. “In the medium term, the Qantas flying businesses, both domestic and international combined, will exceed the cost of capital on a sustainable basis.”
The collapse of the talks with MAS come as little real surprise. Reports from as far back as November indicated that Qantas had abandoned plans to launch a new premium carrier, though the airline insisted it remained in talks. Last week, Malaysia Airlines said it was “in crisis” after a fourth straight quarterly loss.
Still, the news seemingly marks the end of the road for what was once a highly touted plan to revive Qantas’s increasingly unprofitable international operations. The new premium carrier — Qantas had trademarked such names as RedQ — was to have been a more nimble Asia-based spin off that could take advantage of the world’s fastest growing market without the high costs of being based in Australia.
ACCC accuses Flight Centre of price fixing

The Australian Competition and Consumer Commission has launched legal action against Flight Centre over claims the travel agency attempted to fix airline ticket prices.
The ACCC says that between 2005 and 2009 Flight Centre tried to induce Singapore Airlines, Malaysian Airlines and Emirates to stop offering lower prices on their websites than the fares offered by Flight Centre, which include booking and distribution fees.
“It is alleged that the purpose and likely effect of the arrangements sought by Flight Centre was to maintain the level of Flight Centre’s commissions,” the ACCC said. “Such arrangements constitute price fixing.”
Flight Centre, Australia’s largest travel chain, has denied wrongdoing, saying the allegations focus on “legitimate discussions” aimed at ensuring the agency had access to all fares released to the market.
The case is due for a preliminary hearing at Federal Court in Brisbane on April 13. The ACCC has not accused the airlines of any improper conduct.
Airports
Bankstown and Camden up for sale
Sydney’s Bankstown and Camden airports will be put up for sale as current leaseholder BAC Holdco steps out of the general aviation market.
The two airports were privatised in 2003 and are held under a long term lease from the Commonwealth government with 85 years remaining.
BAC, which represents a number of institutional investors, purchased the lease on the two airports for $211 million as part of a package that also included now defunct Hoxton Park. The company is likely to seek a substantial profit on the sale.
Bankstown Airport has emerged as a significant commercial property development, deriving income from more than 170 aviation, retail, commercial and industrial tenants. It also hosts over 240,000 aircraft movements annually.
Camden serves as a recreational aviation hub for gliding, ballooning and light aircraft.
Officials at both airports said operations would not be impacted by the sale. BAC Holdco said it would offer the airports as a package and has appointed Grant Samuel Corporate Finance as its financial advisor.
SAH takes loss to focus on Kingsford Smith
Sydney Airport’s parent company has posted a full year loss after selling its share of two European airports in favour of greater control at Kingsford Smith.
Sydney Airport Holdings (SAH) last week reported a net loss of $240.2 million for calendar year 2011, compared to 2010 profits of $100.8 million.
The numbers were tamped down by $361 million in revaluation losses resulting from SAH’s sale of stakes in Brussels and Copenhagen airports. Those deals were part of a larger repositioning that saw SAH gain an additional 10.86 per cent share of Kingsford Smith plus $800m in cash. The company now owns an 85 per cent stake in Sydney Airport as its only investment.
SAH has proposed a major overhaul of the airport that would see terminals divided into two alliance-based “precincts” by the end of the decade.
The company said its 2011 revenue grew 3.5 per cent to $1.04 billion.
Int’l growth outpaces domestic slump
The parent company of airports in Auckland, Cairns, Mackay and Queenstown has reported a 5.5 per cent increase in half yearly profits on the back of strong demand for international travel.
Auckland Airport said after-tax profits for the group rose to NZ$69.1 million (A$53.6m) for the six months ending December 31. Revenues were up 8.9 per cent over the previous year to NZ$215.9 million.
Passenger numbers reflected region-wide trends with rising international demand but mostly flat domestic figures. International travel was up 6.5 per cent at Auckland, 6.5 at Cairns and 30.1 per cent at Queenstown. Domestic numbers were up 0.9 per cent, 0.2 per cent and 3.9 per cent respectively.
Only Mackay airport bucked the domestic trend, with demand for flights to mining centres pushing passenger numbers up 6.3 per cent.
The company said international passenger growth was especially strong from Singapore and China, with Auckland also seeing a boost in visitors from Europe during the Rugby World Cup in September and October.
Architecture firm named for PER redesign
International Architecture firm Wood Bagot has been commissioned to complete the redesign of Perth Airport’s domestic and international terminals as the airport expands to meet a passenger boom.
The first phase of the expansion, construction of a $200 million new domestic terminal aimed primarily at spiking regional travel, is already underway and scheduled for completion by next year. The second phase, scheduled to get underway in April and reach completion by 2014, includes a $500 million redesign of the existing international terminal, which will expand to include some domestic flights.
Perth Airport has seen strong growth in recent years driven by demand from the mining and natural resource sectors. Passenger numbers are predicted to increase to 20.2 million by 2031, up from nearly 12 million last year.
Woods Bagot has worked on a number of high-profile projects in Australia in recent years, including Adelaide’s convention centre and city central precinct and Sydney University’s Abercrombie Precinct.
“Airports are an essential piece of infrastructure that not only act as gateways to major cities, but also form part of the commercial precinct and urban fabric of our metropolis,” Woods Bagot principal Grant Boshard said in a statement.
People

GA and Business
Bankstown and Camden up for sale

Sydney’s Bankstown and Camden airports will be put up for sale as current leaseholder BAC Holdco steps out of the general aviation market.
The two airports were privatised in 2003 and are held under a long term lease from the Commonwealth government with 85 years remaining.
BAC, which represents a number of institutional investors, purchased the lease on the two airports for $211 million as part of a package that also included now defunct Hoxton Park. The company is likely to seek a substantial profit on the sale.
Bankstown Airport has emerged as a significant commercial property development, deriving income from more than 170 aviation, retail, commercial and industrial tenants. It also hosts over 240,000 aircraft movements annually.
Camden serves as a recreational aviation hub for gliding, ballooning and light aircraft.
Officials at both airports said operations would not be impacted by the sale. BAC Holdco said it would offer the airports as a package and has appointed Grant Samuel Corporate Finance as its financial advisor.
GA shipments down but billings steady – GAMA

General aviation aircraft shipments were down in 2011 but billing figures rose marginally as the market appeared poised for a turnaround, the General Aviation Manufacturers Association said.
In its annual report, GAMA said 1865 aircraft were shipping worldwide in 2011, down from 1932 in 2010, with shipments slumping across the piston plane, turboprop and business jet sectors. However, general aviation billings remained steady at US$19.1 billion, a 0.4 per cent increase over the previous year.
“A majority of the market fundamentals are moving in the right direction,” GAMA chairman Caroline Daniels said. ‘Corporate profits remain at record high levels, the used market and flight activity made year over year improvements, and emerging markets are driving new sales.”
But Daniels said a lack of available financing remains a drag on the industry and a source of serious concern.
“Latent demand in the market exists and an ease in the credit markets could help boost our industry into positive growth once again,” she said.
“The piston airplane segment shipped a total of 860 units in 2011, compared to 873 units in 2010, a 1.5 per cent decline,” GAMA said. “The turboprop sector was down 2.4 per cent, shipping 324 units in 2011, compared to 332 units the previous year. The business jet sector declined 6.3 per cent with 681 airplanes shipped, compared to 727 jets in 2010.”
GAMA notes the figures do no include Hawker Beechcraft deliveries in either the fourth quarter of 2010 or fourth quarter 2011, as its figures for the quarter have yet to be reported.

ATC and Airspace
RAAF controller errors lead to separation incident
A series of errors by air traffic controllers at RAAF Williamtown that lead to a breakdown in separation between a Virgin Blue 737 and a defence-chartered Westwind business jet in February 2011, according to an ATSB report.
The report says the RAAF controllers maintained the two aircraft on a mirror image course despite urgent warnings from civil air traffic controller who were also tracking the two aircraft. The aircraft missed each other by just over 100 metres – well under half the required separation – and only after the Virgin flightcrew altered course in response to a warning from the aircraft’s Traffic and Collision Avoidance System (TCAS).
“The investigation identified a series of errors by the Williamtown Approach controllers involving separation assurance, coordination and communication, and compromised separation recovery,” the ATSB report said.
More troublingly, the February 1 2011 incident was one of 10 “breakdowns of separation” involving Williamtown controllers between January 2010 and June 2011, the ATSB said. The report noted that DoD has since conducted an internal investigation into the problems and has “implemented safety actions, at the local level, in response to their investigation findings.” The ATSB said it was satisfied with those measures.
The report does not say how many people were on board either the 737 or the defence chartered Westwind 1124 at the time of the incident. The 737-700 is configured to carry 144 passengers.
The Melbourne-bound Virgin flight had taken off from Williamtown while the charter jet was on approach to the base, according to the report. At their closest point, the two aircraft passed each other with a separation of 0.7nm vertically and 400ft horizontally. Flight rules require a separation of 3nm horizontally and 1000ft vertically.
The ATSB flagged poor communication between two controllers, one of whom was responsible for airspace up to 5000ft (Approach Low) and the other handling airspace above 6000ft (Approach High), as a key cause of the near miss.
“The aircraft involved were subject to different control jurisdictions and on separate frequencies,” the report said, adding that “controllers did not manage the compromised separation recovery effectively.”

Support
Work starts on fire fighting facility at Tullamarine

Construction of a new $11.5 million aviation fire fighting training ground at Melbourne Airport in underway.
The ‘hot fire’ training facility will be the only one of its kind in the southern hemisphere, with more than 250 fire fighters expected to pass through each year, Airservices Australia says.
The centrepiece of the 15,000sqm training ground will be a full sized mock-up aircraft fuselage replicating sections from Airbus A380, Boeing 767 and DC-10 aircraft. The 56m long, 10m high and 29m wide mock-up will be used to simulate real-world aviation fire fighting and rescue scenarios.
The facility is expected to open by early 2013.
StandardAero expands Air NZ work
StandardAero has signed a service agreement with Air New Zealand to perform engine maintenance and overhaul work for regional subsidiaries Eagle Airways, Air Nelson and Mount Cook.
The deal expands on an arrangement that sees StandardAero already perform engine maintenance for Eagle Airways
Air Safety
Airnorth crash highlights importance of simulators — ATSB
The training crash that killed two experienced pilots in Darwin in 2010 highlights the importance of using flight simulators to practice for dangerous situations, the ATSB has said in a report on the accident.
The Airnorth Embraer EMB-120 turboprop, VH-ANB, crashed moments after takeoff on March 29 2010 during a simulated engine failure. The flight was intended to revalidate the command instrument rating of one of the pilots.
Reads the ATSB’s summary: “The increased drag from the ‘windmilling’ propeller increased the control forces required to maintain the aircraft’s flightpath. The pilot under check allowed the speed to decrease and the aircraft to bank toward the inoperative engine. Additionally, he increased power on the right engine, and engaged the yaw damper in an attempt to stabilise the aircraft’s flight. Those actions increased his workload and made control of the aircraft more difficult. The PIC did not restore power to the left engine to discontinue the manoeuvre. The few seconds available before the aircraft became uncontrollable were insufficient to allow ‘trouble shooting’ and deliberation before resolving the situation.”
The ATSB says, “the occurrence provides a timely reminder of the risks associated with in-flight asymmetric training and the importance of the work being carried out by the Civil Aviation Safety Authority to mandate the use of simulators for non-normal flying training and proficiency checks in larger aircraft.”
Since the incident, Airnorth has been approved to undertake EMB-120 training on a simulator, the ATSB says.

Apology
Swiss cheese
The ‘Swiss cheese’ model to explain accidents is well known in aviation – where a series of events has to line up for an accident to occur, like layers of Swiss cheese, where a hole in each layer of cheese represents a failure at one level of a system, and if the holes are aligned a problem can pass through the differing layers of defence, allowing an accident to occur.
In the March issue we had our own ‘accident’ that pretty closely followed the Swiss cheese model. For a number of reasons we had a breakdown in some of our processes which meant we inadvertently run the From the Regions column twice, and not Phil Hurst’s Aerial Ag column, which should have appeared on one of those pages.
We have looked at the problem properly and have taken steps to ensure it won’t happen again, but I’d like to apologise to our readers and to Phil for the muck-up.
In general a few more errors than normal slipped through our defences in the March issue, but we have bolstered those defences to ensure we improve the high level of professionalism you rightly expect in AA.