Preflight

The two initiatives, announced on June 15, were the major outcomes from Virgin’s capital structure review.

Borghetti said the downturn in the mining and regional market prompted the decision to reduce the number of ATR turboprops from 14 currently, while some routes served by smaller gauge aircraft had now grown to the point where it was possible to deploy a larger 737 jet.

While the withdrawal of 18 E190s and up to six ATRs suggested a significant fleet reduction, Borghetti noted the airline was continuing to take deliveries of 737s and had the flexibility to keep leased aircraft longer.

Further, Borghetti said the current ATRs and E190s were “not very well utilised”. The move comes after Virgin said in February five E190s would leave the fleet by September.

The Boeing website shows Virgin has five outstanding deliveries for 737-800s alongside an order for 40 of the updated 737 MAX.

“It is all about network footprint and frequency, not about capacity,” Borghetti told reporters during a conference call on June 15.

“Fundamentally, 90 plus per cent of the footprint will remain the same, it is the tweaking around the edges which are driven really by supply and demand. ” Borghetti said the move to simplify the airline group’s fleet and reduce the number of different aircraft types would help drive the bulk of its cost-cutting initiatives over the next three years alongside operating efficiencies in crew and ground operations, as well as in maintenance, engineering, procurement and its supply chain.

Asked if this “very rigorous and comprehensive” cost reduction program and efficiency drive would result in overall job losses, Borghetti said: “There will be. Yes, there will be some positions that will become redundant. ” He declined to put a figure on the number of jobs that would be affected, saying it was “an evolution, not a slash and burn”. Virgin’s workforce had grown from 6,000 to 10,000 over the past five years.

The $852 million capital raising, when added to the $159 million share placement with new investor HNA Group, brings the total amount Virgin is raising to $1. 011 billion.

Part of the proceeds would be used to repay the $425 million, 12-month loan from shareholders Air New Zealand, Etihad Airways, Singapore Airlines (SIA) and Sir Richard Branson’s UK-based Virgin Group announced in March.

The remainder would also be used to retire debt and in the process reduce interest payments and improve the company’s credit ratings.

“We are seeking a reduction in leverage of around 15 to 18 per cent with the capital raised,” Virgin chief financial officer Geoff Smith said.

Under the share offer, existing shareholders can purchase one new share for every share they currently hold at a price of 21 Australian cents per share. This is a 28. 8 per cent discount to the company’s closing share price of 29. 5 cents on June 14.

Further, Virgin said SIA, HNA, Virgin Group, Nanshan Group and Air New Zealand had committed to take up their full pro-rata entitlements.

However, Virgin’s other major airline shareholder Etihad Airways was yet to make a call on its participation in the capital raising.

“Etihad Airways is a long-term strategic investor and partner to Virgin Australia. We are fully committed to this partnership and to remaining as a shareholder,” an Etihad spokesperson said in an emailed statement.

“Our comprehensive 10-year commercial agreement is further evidence of our confidence in and support for Virgin Australia, and our commitment to the airline and Australia.

“We will continue to review our option to take up the pro-rata entitlement, and will announce our decision at the appropriate time. ” And should the offer not be fully subscribed, SIA, HNA and Virgin Group have also made binding commitments to contribute to the sub-underwriting of entitlements not taken up by other shareholders.

Virgin said it expected the initiatives announced on June 15 to result in net free cash flow savings increasing to $300 million a year by the end of 2018/19.

“As a result of the upcoming equity raising, the Group will have a capital structure that is appropriate for its position as a mature, diversified airline group and will be in a stronger position to deliver sustainable growth,” Virgin Australia chairman Elizabeth Bryan said in a statement.

Borghetti said the airline’s move from its low-cost carrier Virgin Blue roots to a diversified airline group over the past five years had been achieved with a “very stretched balance sheet”.

“A lot of our initiatives have been funded over the last five years through debt,” Borghetti said.

“It is now time to strengthen the balance sheet, deleverage the company. ”

Virgin Australia seeks Hong Kong, Beijing traffic rights

Virgin Australia has taken the first step in launching flights to North Asia in partnership with HNA Group, after lodging its official application to the International Air Services Commission (IASC) for traffic rights to Hong Kong and Beijing from a yet-to-be-confirmed major Australian gateway.

The application, which sought an allocation of 1,925 seats per week on the China route and an allocation of seven frequencies per week on the Hong Kong route, said Virgin would serve the two routes with Airbus A330-200 aircraft configured with 275 seats.

The first flight was planned for June 1 2017, Virgin said in its application.

As Beijing and Hong Kong were well within 12 hours flying time from any part of the Australian mainland, Virgin could theoretically offer a daily service on both routes with two aircraft, depending on schedules.

Virgin currently has six A330-200s flying between Perth and Australia’s east coast capitals, as well as to Fiji from Melbourne and Sydney.

There is enough available capacity under Australia’s bilateral air services agreement with both China and Hong Kong for Virgin to mount the two new routes.

However, there is no more available capacity for Hong Kong-based carriers, such as HNA’s Hong Kong Airlines, to operate to the four main Australian capitals of Brisbane, Melbourne, Perth and Sydney, given Cathay Pacific has utilised all available traffic rights.

Once traffic rights are confirmed, Virgin will need to secure landing and takeoff slots at busy Hong Kong and Beijing airports that fit with its proposed flight schedules.

That has proved challenging in recent times for Qantas, with a lack of available slots hampering efforts to grow its Hong Kong operation out of Australia.

“Unfortunately until the third runway is built in Hong Kong it means there is limited growth opportunities for Australian carriers compared to Hong Kong-based carriers and that needs to be recognised in any bilateral discussions,” Qantas chief executive Alan Joyce said in September 2015.

“We’ve got plenty of room to grow in the current bilateral, the trouble is we can’t get the slots to grow. ” Virgin Australia chief executive John Borghetti told media on May 31 the alliance with HNA would have both carriers “jointly operating to China from Australia”.

(Read more about Virgin’s China plans and share register changes elsewhere in this issue. )

First flight for RAAF’s first P-8A Poseidon

The first Boeing P-8A Poseidon for the RAAF has made its first flight, completing the short hop from Renton, where it was built, to Boeing Field where its mission systems equipment is being installed, on May 6.

The aircraft, wearing 11 Squadron RAAF markings and the temporary US registration N940DS, took off from Renton at 1:31pm local time, landing at Boeing Field 1hr 53min later, flight tracking website Flightaware shows.

It is due to be ferried to Australia “in late 2016 following post-production checks and acceptance”, Defence said on May 24.

P-8s are built on a separate final assembly line at Boeing’s Renton facility in Washington State, where all 737s and their variants are assembled, before they are ferried to nearby Boeing Field, Seattle for mission systems fit-out.

The RAAF is acquiring up to 15 P-8As to replace, along with the unmanned MQ-4C Triton, the AP-3C Orion maritime surveillance aircraft.

Acquisition of an initial eight P-8As was approved in 2014, while in February the Defence White Paper’s accompanying Integrated Investment Program (IIP) revealed that, “Eight Poseidon aircraft will be introduced in the early 2020s, with seven additional aircraft to be acquired in two tranches to bring the total to 15 aircraft by the late 2020s. ” Approval of the first of those additional tranches of P-8s was subsequently announced by Defence Minister Senator Marise Payne at the RAAF’s Air Power Conference in Canberra in March.

“The first of the Poseidons is expected to be delivered late this year and 12 aircraft will be in service by 2022,” Senator Payne told the Air Power Conference.

RAAF, BAE mark 100,000 Hawk flying hours

The RAAF has marked the 100,000 flying hours milestone of its BAE Systems Hawk 127 lead-in fighter trainer fleet with a ceremony at RAAF Base Williamtown on May 19.

The 33 Hawk 127s were introduced into service in 2001 and are operated by 78 Wing’s 76 Squadron based at Williamtown and 79 Squadron based at RAAF Base Pearce and are used to train pilots and air combat officers bound for RAAF Hornet and Super Hornet fast jets.

“This considerable milestone has been achieved with the highest professionalism by the men and women of 78 Wing, 76 and 79 Squadrons, and in partnership with BAE Systems Australia and our program subsidiaries,” Officer Commanding 78WG Group Captain Terry van Haren said.

“100,000 hours is a significant milestone in the life-cycle of a fast jet system, and even more significant when it is achieved without loss of an aircraft or aircrew. ” The RAAF’s Hawks are maintained by BAE Systems Australia under the Hawk Lead-In Fighter In Service Support arrangement. The current in-service support contract was awarded in July 2013 for five years, with potential extensions out to 2026.

Those arrangements are “a great example of how the Commonwealth can effectively partner with industry to maximise platform availability and quality, while achieving significant savings,” BAE Systems Australia aerospace director Steve Drury said.

From July 1 BAE Systems Australia will also deliver all Hawk flightline support, including aircraft launch and recovery, on-site management support and supporting deployments.

The RAAF’s Hawks are currently in the process of being upgraded to the Hawk 127 + LIFCAP (Lead-In Fighter Capability Assurance Program) standard which adds an advanced mission computer and updated OFP software.

The aircraft are due to be replaced in the late 2020s under a new ‘Lead-In Fighter Training System’ program unveiled in the recently-released Defence White Paper’s accompanying Integrated Investment Program document, with a project timeframe of 2022-2033 and an “approximate investment value” budget range of $4-5 billion.

Navy completes ScanEagle trials from HMAS Choules

The Royal Australian Navy’s Unmanned Aircraft System Unit completed the first-of-class flight trial for the Insitu ScanEagle unmanned aircraft system in late March, Navy Daily has reported.

The trial was conducted aboard amphibious Landing Ship Dock HMAS Choules with the aim of assessing all facets of unmanned aircraft operations in an embarked setting.

ScanEagle detachment commander Lieutenant Commander Matt Hyam said the trial validated operating limits and allowed personnel to gain their maritime qualifications.

“Over the two weeks on Choules, ScanEagle conducted 26. 1 hours of embarked flight operations during the trial, spread amongst eight sorties,” he said. “This allowed us to validate operating limits for Choules, and gather information to inform future acquisition projects. ”

RAAF C-27J suffers tyre blow-out in landing incident

An investigation into a landing incident of a RAAF C-27J Spartan at Waco, Texas on May 18 is continuing.

“The C-27J Spartan is currently being assessed for repairs, which will determine the timeframes for return to flying. The safety investigation is also continuing,” a RAAF spokesperson said on May 27.

The aircraft blew two tyres in the incident, which took place during a night time pilot training flight, causing the temporary closure of the airport while the aircraft was inspected and removed from the runway.

Defence said the aircraft was flying “a pilot qualification flight for RAAF pilots converting to the new C-27J Spartan battlefield airlifter, flown alongside industry instructors”.

Ten C-27Js are on order for the RAAF, of which two have been delivered to Australia so far. The aircraft are built by Alenia (recently renamed Leonardo Aircraft) in Italy but L-3 Communications is the prime contractor for the aircraft under a US Foreign Military Sales (FMS) arrangement, modifying the C-27Js with mission systems and undertaking pilot conversion training at Waco.

Meanwhile, Defence announced on May 19 that cracking had been discovered in the folding strut of its Pilatus PC-9 training aircraft’s nose landing gear and “as a precautionary measure”, each PC-9 would “undergo an additional engineering review, and remediation repairs, before returning to normal flying activities”.

Canada to bridge fighter gap with interim Super Hornet acquisition?

Canada is studying acquiring Boeing F/A-18E/F Super Hornets as an interim partial replacement for the country’s ageing CF-18A/B ‘classic’ Hornets.

The Ottawa Citizen newspaper reported in early June that the new Canadian government is considering acquiring Super Hornets to cover a looming capability gap to partially replace the Royal Canadian Air Force’s 77 CF-18s and then defer any acquisition of the F-35 Joint Strike Fighter by a decade.

Canada’s new Liberal government promised ahead of its election in 2015 that it would not go ahead with the acquisition of the F-35. So deferring, rather than cancelling the purchase of F-35s and buying a smaller number of Super Hornets as a partial replacement for the CF-18 was reported as a way of meeting that election promise while minimising the loss of industrial work and avoiding potential legal action that could come from withdrawing outright from the JSF program.

“We are looking at a gap – that’s [what] we have to deal with. And these jets should have been replaced a long time ago,” Canadian Defence Minister Harjit Sajjan told media on June 7.

“We’re in options analysis, looking at the capabilities required. We’re actively looking at replacing the F-18. ” So far Canada’s aerospace industry has won F-35 work contracts worth C$750 million.

But F-35 prime contractor Lockheed Martin’s vice-president of F-35 business development, Jack Crisler, told the Ottawa Citizen that: “There’s not an entitlement to future contracts unless you’re buying aircraft. ” In a separate interview with The Canadian Press news agency, Crisler noted: “Right now, all we want to do is to be able to compete.

“So if we get told that we’re not allowed to compete, then we’ll go and evaluate all of our alternatives at that point. But right now all we’re asking to do is be able to compete in a fair, open, transparent and requirements-based competition for the replacement of the CF-18s. ” Australia, of course, acquired 24 F/A-18F Super Hornets late last decade to bridge a capability gap between the retirement of the RAAF’s F-111s and the arrival of the F-35.

But unlike in Australia, where the acquisition of the F-35 to replace the RAAF’s classic Hornets has bipartisan political support, in Canada the aircraft’s acquisition is highly contentious.

“Canadians know full well that for 10 years, the Conservatives completely missed the boat when it came to delivering to Canadians and their armed forces the equipment they needed,” Prime Minister Justin Trudeau told his country’s parliament on June 7.

“They clung to an aircraft [the F-35] that does not work and is far from working. ” Canada’s equivalent of the shadow minister for Defence, Conservative defence critic James Bezan, has accused the Liberal government of breaking a promise to run a competition for the RCAF’s next fighter.

“The Liberals have broken their promise for a fair and transparent competition to replace our CF-18s and are sole-sourcing the Boeing Super Hornet instead,” Bezan said last week. “Maybe we should not be surprised. Boeing officials have met 10 times since February with senior political staff. ” Under then Prime Minister Stephen Harper Canada’s former Conservative government had committed to acquire 65 F-35As to replace the RCAF’s CF-18s.

In December 2014 a Conservative government-appointed expert panel found that “there was no need to pursue a bridging option,” as “it is possible, with certain investments, to fly the CF-18 to 2025 and even beyond. ”

CASA publishes new timeline for reg changes

Aims to avoid “unnecessary burdens”

Australia’s Civil Aviation Safety Authority (CASA) says it has “learnt from past mistakes” and taken into account feedback from industry as it issued a new timetable for changes to the nation’s aviation regulations.

The timetable outlines the 20 regulatory change projects, including regulations covering general operating rules, air transport operations, aerial work, continuing airworthiness and maintenance for small aircraft, small aircraft maintenance licensing, sport and recreational operations and unmanned aircraft, that CASA is undertaking between now and 2020.

CASA director of aviation safety Mark Skidmore said the main aim of the timeline was to “avoid placing any unnecessary burdens on aviation organisations or individuals during the process of developing and implementing new and improved regulations”.

Further, it included “realistic transition periods to give everyone adequate time to move across to the new regulations”.

“CASA has learnt from past mistakes made during the development and introduction of regulatory changes such as the flightcrew licensing suite,” Skidmore said in a statement on June 8.

“Consultation processes are being improved, regulations will be tested with the aviation community before introduction and information will be presented clearly and provided consistently.

“Our new approach to regulatory reform is consistent with the Federal Government’s response to the Aviation Safety Regulation Review, which stated time was needed for the aviation community and CASA to adjust to and successfully implement regulatory changes. ” In November, CASA set up a dedicated team of full-time staff to address issues raised by the suite of new licensing regulations, including Parts 61, 64, 141 and 142, as well as review transition arrangements and determine what needed to be prioritised.

Meanwhile, the aviation safety regulator also held a series of community consultation sessions to get feedback from owners and operators over recent months.

In addition to the taskforce, CASA also invited representatives from the nation’s key aviation industry groups – The Australian Aviation Associations Forum, the Regional Aviation Association of Australia, the Australian Helicopter Industry Association, the Aircraft Owners and Pilots Association, the Australian Business Aviation Association, the Royal Federation of Aero Clubs of Australia and the Aerial Application Association of Australia – to join a new advisory panel.

The panel also included representatives from the regular public transport and mustering sectors, flying schools, and the tertiary education sector.

Separately, Skidmore said the overhaul of CASA’s corporate structure, first announced in November 2015, was almost complete.

In his monthly CASA Briefing column for May, Skidmore named the men and women to lead the revamped CASA under his leadership.

First, a stakeholder engagement group would be led by former senior Airservices executive Rob Walker, whose role would be to ensure the regulator’s communications with the aviation and broader community was consistent and that information was delivered effectively.

Second, an aviation group to be led by Graeme Crawford would manage and deliver all collaboration and interaction with the aviation community. This includes entry control, surveillance, regulatory services, standards setting, regulatory development and regulatory implementation”.

Third, Tracey Frey heads up a sustainability group that provides internal and external support functions.

Skidmore said the new structure would “build stronger and more effective internal relationships, helping to break down any ‘silos’”.

“The reinvigoration of CASA’s leadership team has been completed and the final touches are being made to CASA’s new structure,” Skidmore said.

“Our new structure has been carefully developed to better align CASA’s activities with our responsibilities to the aviation community.

“These changes set the platform for developing and implementing a range of reforms to CASA that will fundamentally alter the way the organisation delivers its safety regulation responsibilities. ” Skidmore said Jonathan Aleck would be in charge of the Legal Affairs, Regulatory Policy and International Strategy Branch, while Simon Frawley would manage CASA’s finance branch.

Industry groups have expressed concerns about the slow pace of change at CASA, and in April The Australian Aviation Associations Forum proposed changes to the Civil Aviation Act, arguing Australia’s “highly prescriptive approach to aviation safety” had “hindered the development of the industry for little discernible safety benefit”.

John Martin, a well-travelled life

Qantas’s number one frequent flyer has departed on his final journey. John Martin passed away in Wollongong recently aged 83, after clocking up more than 1,000 trips with the Flying Kangaroo.

He took his first trip in 1964 on a Qantas Boeing 707 and became a familiar face to Qantas pilots and cabin crew, reaching his milestone journey in 2015, a record that was featured in the television series “Ready for Take Off” and one the airline says will stand the test of time.

For more than 50 years John flew almost three million miles with Qantas, including 143 trips to New York and 138 trips to London, where he would catch the latest Broadway productions and West End musicals.

John was a devoted Qantas flyer and could tell any intended passenger or anyone interested in listening of every movement in the aircraft fleet, what movie would be showing and what meal would be served on board.

In 2014, John helped Qantas to launch its Boeing 737-800 in the 1971 (Retro Roo I) livery, with Captain Alex Passerini presenting him with a set of ceremonial keys to the aircraft.

John grew up in the Wollongong suburb of Thirroul where his parents ran a haberdashery. He became a stringer cameraman for the fledgling WIN TV television station in the early 1960s and was soon appointed news editor, a position he held for more than 20 years.

Former television news anchor Michael McRae said John was a long-time friend, work colleague and Qantas’s number one frequent flyer.

“I was always fascinated by his travels. When he turned up at work in a suit and his well-worn and weathered carryon bag I knew he was heading overseas again,” Michael said.

“It was nothing for him to leave on Friday after putting the nightly news to air for a show at the West End in London, then straight onto Broadway in New York. He always took a carryon bag so he was first off the plane and would have two airline tickets on the go at once. ” Television and radio personality Susie Elelman said John was responsible for launching many television careers.

“When I started at WIN TV in Wollongong in 1974 John was established as news editor. WIN TV was the training ground for many journalists who went on to bigger and better things and John had a significant hand in that,” Susie said.

“In those days journalism was a real apprenticeship. John was meticulous in nurturing young journalists and teaching them everything they needed to know, from reporting to producing news, only to find they would be snapped up by the bigger Sydney television networks.

“He was very proud of every one of his protégés. They include David Hill, who became Executive Producer of Channel 9’s Wide World of Sports, joining Kerry Packer’s World Series Cricket and then moving to Los Angeles to produce the Academy Awards.

“They also include Walkley Award winning senior political reporter Paul Bongiorno. ” Susie said in later years John served on the board of the Illawarra Performing Arts Centre, where he worked to promote theatre in the region.

“There is no doubt he has left his mark in both the media and entertainment industries,” Susie said.

John’s funeral was held in Wollongong and was attended by Qantas pilots and many former media and theatre colleagues.

DARRYL JOHNSTON

Australia’s third F-35A pilot takes to the skies

A third RAAF pilot is now qualified on the F-35A after Flight Lieutenant Edwin Borrman recently completed his qualifying flight at Luke Air Force Base in Arizona.

Defence said on May 24 FLTLT Borrman was now qualified to instruct other pilots in flying the aircraft, joining SQNLDRs Andrew Jackson and David Bell as Australia’s first qualified F-35 pilots.

“The last jet I flew in Australia was the Hawk 127 as an instructor and I must say it feels good to be back at the front edge of aircraft performance,” Borrman said.

“A little more power and capability definitely puts a grin on my face.

“The training went surprisingly quickly, although I did rely upon my previous experience in the F/A-18A and instructional experience in the Hawk 127 to help me through.

“Tactically the jet is amazing, there is so much situational awareness on display. The hardest part is determining what my priority is at any given time and where do I look to get that information.

“This course has given me great insight as to how our future F-35 pilots will transition directly from the Hawk to the F-35A. ” Australia’s first two F-35As are based at Luke AFB as part of a pilot training aircraft pool there. Subsequently, the first RAAF F-35As are due to arrive in Australia at the end of 2018, with the first operational squadron (3 Squadron) expected to be operational by 2021.

The federal government has ordered 72 F-35As to replace the F/A-18A/B Hornet.

Marand wins new F-35 contract

Melbourne-based Marand has won a contract from Lockheed Martin for the detailed design and manufacture of training technology for the F-35 Lightning II, following on from the company’s work manufacturing vertical tails, aerostructures tooling and the engine installation and removal trailer.

The privately-owned Australian company stated that it will be designing the fuselage assembly for the Engine and Lift Fan Removal and Installation Trainer (ELFRIT).

The initial trainer will be delivered to the US and is set to be used to train maintenance crews in the precision tasks of removing and installing engines and lift fans; further examples might be required at major sustainment bases worldwide, according to Marand.

The company expects to complete the design phase in mid-2017 and to deliver the first unit in late 2018.

“Marand has been an extraordinary performer in the global F-35 program already, manufacturing the F-35 vertical tails, being the original equipment manufacturer for the complex F-35 engine trailer, supplying thousands of production tools, and now sole supplier for the ELFRIT,” said Air Vice-Marshal Leigh Gordon, Head Joint Strike Fighter within the Capability Acquisition and Sustainment Group (CASG).

Airbus maintains 50 A350 delivery target for 2016

Low fuel prices to boost A380 prospects? Airbus has reaffirmed its forecast of delivering 50 of its A350-900s in calendar 2016, despite the “challenges” of delays to cabin equipment.

Through the first five months of the year, Airbus has delivered nine A350-900s to the likes of Cathay Pacific, Singapore Airlines and others, meaning it has to hand over a further 41 frames by the end of December to meet its target.

Efforts to get A350s out the door to its airline customers have been hampered by a shortage of cabin equipment from a number of suppliers.

However, Airbus executive vice president programmes Didier Evrard says the target can still be met, albeit not without a big effort from all involved.

“We have challenges,” Evrard told reporters at the company’s Innovation Days media briefings in Hamburg on May 30.

“The target remains absolutely achievable with a high level of effort from the A350 team. ” Evrard said production had improved in the past three months, with Airbus adding extra resources to the task.

“Fortunately, we are lucky enough that this year the A330 production is going down so this frees up an additional station 20 that we can use for the A350,” Evrard said.

“We have also mobilised other facilities in Toulouse to cope with working parties.

“We are where we are. The fixes are in place. ” Meanwhile, Airbus chief operating officer Tom Williams said the proposed production rate of 60 A320 Family aircraft a month by 2019 was “enough for what we see today”.

“We’ve made studies to go beyond that but we are always making lots of studies and evaluations,” Williams said.

“I don’t think there is any real serious work going on and there is certainly no capital investment plans at this stage. ” “We are not spending too much time and energy thinking beyond that.

“It is not one of our top priorities. ” Williams said the falling fuel price made it more challenging to sell A320s today compared with the period when the A320neo was launched.

However, low fuel prices could help support efforts to boost sales of the A380.

“The fuel price, as it is today, helps us in presenting the risk and reward ratio of the A380. That is one of the other things that we are going to push really hard,” Williams said.

“This is an aircraft that will still come back. ” Other efforts to promote A380 sales included improvements to the efficiency of the cabin (ie add more seats) and boosting the operational reliability of the aircraft through longer periods between maintenance checks. These efforts may allow airlines to operate a small fleet of A380s without causing big schedule disruptions when an aircraft is out.

Given the low demand for the world’s largest passenger aircraft, Airbus has installed a fourth final assembly line for its A320 Family into a building at its Hamburg-Finkenwerder facility that was originally slated for A380 production.

Embraer E190-E2 completes first flight

Embraer’s new E2 family of jets has successfully completed its maiden flight ahead of schedule at the company’s São José dos Campos facility.

The first E190-E2, powered by two Pratt & Whitney PurePower geared turbofan engines, took off at 1306 local time on May 23 and flew for three hours and 20 minutes with Captain Mozart Louzada, First Officer Gerson de Oliveira Mendes and Flight Test Engineers Alexandre Figueiredo and Carlos Silveira on board.

“Today’s flight evaluated aircraft handling and performance characteristics with the crew analyzing a significant number of flight parameters, including speed, altitude and landing gear retraction,” Embraer said in a statement.

“This was made possible by the high level of maturity that the E2 reached during program development through the extensive use of digital modeling simulations and ground and static tests that employed rigs and an iron bird. ” Previously, Embraer had guided the market to the first flight taking place in the second half of 2016.

Captain Louzada said the flight was “very smooth”.

“We were able to significantly open the flight envelope by flying at mach 0. 82, climbing to 41,000 feet and retracting the landing gear and flaps, and engaging the fly-by-wire in normal mode. All of these demonstrate that the E190-E2 project is very mature and robust, and exceed all performance targets,” he said.

The E190-E2 is one of three models in the E2 family of jets and can seat between 97 and 114 passengers, depending on configuration. The first E190-E2 rolled out at the company’s São José dos Campos facility in February, with four prototypes to be used in the certification program. Entry-into-service was planned for 2018.

The E2 improves on the current generation E-jets with new aerodynamically advanced, high-aspect ratio, distinctively shaped wings, improved systems and avionics, including fourth generation full fly-by-wire flight controls.

This was expected to result in double-digit reductions in fuel and maintenance costs compared with the current E-jet family. From an environmental perspective, the new aircraft also produced less emissions and less noise. The aircraft will also have a new interior with larger overhead bins and a new first class concept, among other interior improvements.

The other two E2 models were the E175-E2, which seats 80-90 passengers, and the E195-E2 (120-144 seats).

Embraer president and chief executive Frederico Fleury Curado said the first flight took place a “few months ahead of schedule”.

The company said the E2 family of aircraft had logged 267 firm orders and 373 options and purchase rights since the program was launched in June 2013.

The current E-jets are flown by about 70 customers in 50 countries, including Airnorth, Cobham, Jetgo and Virgin Australia in this part of the world.

Qantas Freight to DFW

Qantas has added Dallas/Fort Worth to its dedicated Boeing 747-400F freighter network.

Beginning June 9, the 747 freighters, operated by Atlas on behalf of Qantas, have started stopping in Dallas/Fort Worth every Thursday morning as part of a triangular routing from Australia to China and the US.

The airline, which has cargo traffic rights from China to the US and held about five per cent of that market, said the midweek service suited deliveries of electronics, e-commerce and general cargo into the USA from China.

Further, the return leg to Australia supported energy, mining and aerospace cargo from the US.

Currently, Qantas’s 747 freighters operate from Sydney to Chongqing, flying onwards to Shanghai and Chicago before returning to Sydney via Los Angeles four times a week. Under the new schedule, the return service to Sydney will operate from Chicago via both Dallas/Fort Worth and Los Angeles.

Eva Air to boost Brisbane schedule

Eva Air plans to add an extra three flights a week to Brisbane from October and tweak flight schedules to offer its Australian passengers more beyond connections from its Taipei hub.

The frequency boost, from two flights a week currently, means the Star Alliance member will operate five times a week to Brisbane, its sole Australian port, when the new schedule kicks in on October 5.

All flights are operated with Airbus A330-200 equipment configured with 252 seats – 24 in business and 228 in economy.

In terms of the schedule change, BR316 will switch from an overnight flight currently to a late morning departure from Brisbane and 1845 arrival in Taipei and will operate on every day except Mondays and Thursdays.

The BR315 service from Taipei to Brisbane, which will operate every day except Wednesdays and Sundays once the new flights begin, remains a red-eye flight that arrives into Brisbane a little before 1000.

Hong Kong Airlines to launch daily Auckland service

Hong Kong Airlines has announced it will launch daily flights to Auckland from November 10.

The airline will operate 283-seat Airbus A330-200s on the Auckland route.

Hong Kong Airlines currently operates twice weekly flights to the Gold Coast and Cairns – on a Hong Kong-Gold Coast-Cairns-Hong Kong routing. A third weekly service is due to be added in July.

Emirates focused on boosting capacity to Australia on existing routes

Emirates president Sir Tim Clark says his airline is currently more focused on adding extra capacity on its existing Oceania routes operated in conjunction with alliance partner Qantas rather than establishing new services to secondary cities.

The Dubai-headquartered carrier serves five Australian points with its own metal – Adelaide, Brisbane, Melbourne, Perth and Sydney – as well as Auckland and Christchurch in New Zealand.

Although Clark had previously raised the prospect of opening flights to the likes of Alice Springs, Broome, Cairns and Darwin, according to an October 2015 report on Gulf News, the veteran aviation executive took a more cautious tone when speaking to reporters on the sidelines of the International Air Transport Association (IATA) annual general meeting in Dublin on June 2.

“We have a major link with Qantas to serve multiple smaller cities and that is what we will do. We will continue to grow that,” Clark said.

“At the moment we are satisfied with what we’ve got. ” Under an expanded air services agreement signed in November 2015, Emirates has an allocation of 105 services to Australia each week to the four major gateways of Brisbane, Melbourne, Perth and Sydney, an increase of seven from the previous agreement.

Meanwhile, Abu Dhabi-based Etihad also received seven additional frequencies to Australia’s four largest airports, lifting its cap to 56 flights a week.

Currently, Emirates has 77 flights a week from its Dubai hub to Australia, with a number of services stopping via Asian points Singapore, Kuala Lumpur or Bangkok. The airline also has 28 flights a week between Australia and New Zealand.

It recently added new capacity into Oceania with the start of nonstop services to Auckland from Dubai with Boeing 777-200LR equipment.

In perhaps an encouraging sign regarding the ultra long-haul route’s performance, Clark said Emirates planned to upgauge the aircraft to three-class Airbus A380s from the end of October .

“We can load more capacity onto the existing points,” Clark said.

“We have switched over Auckland to nonstop. So there is growth there. ” Meanwhile, Emirates said on June 8 it would end its Kuala Lumpur-Melbourne service at the end of October. Instead the airline will offer two daily nonstop flights from Melbourne to Dubai. Emirates recently signed a partnership with Malaysia Airlines, which has two daily flights between Kuala Lumpur and Melbourne.

IATA forecasts US$40 billion in airline profits in 2016

The world’s airlines are collectively expected to post close to US$40 billion in profits in calendar 2016 as lower oil prices and demand for air travel buoy the bottom line.

The forecast, presented by International Air Transport Association (IATA) chief executive Tony Tyler at the industry body’s annual general meeting in Dublin on June 2, was an improvement from the estimated profit of US$36. 3 billion that was published in December 2015.

The result would be achieved on revenues totalling US$709 billion, representing a net profit margin of 5. 6 per cent.

IATA said the return on invested capital of 9. 8 per cent would exceed the cost of capital (forecast to be 6. 8 per cent) for a second straight year.

Tyler said the mood of the industry was “generally optimistic”, with airlines producing solid results despite some economic headwinds.

And while passenger markets were growing robustly, with load factors at record levels, Tyler noted the cargo market was stagnating.

Tyler said the industry was “probably nearing the peak of the positive stimulus from lower prices”.

“Lower oil prices are certainly helping – though tempered by hedging and exchange rates,” Tyler said in his speech to delegates at the IATA AGM on June 2.

“And your hard work is strengthening the business. Load factors are at record levels. New value streams are increasing ancillary revenues. And joint ventures and other forms of cooperation are improving efficiency and increasing consumer choice while fostering robust competition. ” On a region-specific basis, IATA said airlines in Asia Pacific were tipped to record US$7. 8 billion in 2016, compared with US$7. 2 billion the prior year. The region was the second-best performing in the world in terms of profitability, IATA’s forecast showed. Capacity was expected to grow by 9. 1 per cent, a little ahead of demand growth of 8. 5 per cent.

Meanwhile, North American carriers continue to lead all regions in terms of making money, with profits of US$22. 9 billion expected in 2016.

IATA estimated fares would fall by about seven per cent this year, which IATA chief economist Pearce suggested was in line with the declines in the price of fuel.

“There has been some price stimulation most recently from the fall in fuel prices and we think there is more to come because the impact of hedging has delayed the benefits of the fuel price falls we saw last year coming through to airline costs,” Pearce said.

On a negative note, IATA said cargo markets remained “in the doldrums”, with revenue likely to fall to US$49. 6 billion, from US$52. 8 billion in 2015. Demand was expected to grow a slender 2. 1 per cent in 2016 amid significant capacity additions due to the increase in passenger fleets to meet demand for air travel.

As a result, cargo yields were expected to fall eight per cent in 2016.

“Bottom line is, it is a difficult business for cargo,” Pearce said.

“Just emphasising how tough a business it’s been, this year we are expecting cargo revenues to be back where they were 10 years ago.

“That’s a combination of weakness of international trade and also the falling cost of air cargo.

“Passenger business in contrast is double what it was in revenue terms 10 years ago. ”

Tigerair Australia signs new maintenance contract in Singapore

Tigerair Australia has signed a two-year heavy maintenance contract for its Airbus A320 fleet with SIA Engineering Company Limited (SIAEC), with the work to be carried out by SIAEC and its joint venture company, SIA Engineering (Philippines) Corporation, at their facilities in Singapore and Clark, Philippines respectively.

Tigerair Australia chief executive Rob Sharp told Australian Aviation the arrangement was a key part of Tigerair’s ongoing turnaround efforts.

“The turnaround of Tigerair and building a sustainable business was pretty much predicated around addressing the key concerns that people had which was cancelling of flights and on-time performance,” Sharp explained while in Singapore for the announcement of the Value Alliance low-cost carrier alliance.

“So putting in that robust structure meant that we needed to address our engineering aspects. Very pleasingly, the line maintenance which was with BAE Systems domestically has provided a good platform. Our heavy maintenance, that’s the major engineering works, is a very important part of the airline activity base. It also underpins safety. Singapore Engineering is a high quality engineering facility and they have successfully won the tender process. We have a deep relationship with them so we very much looking forward to spending a couple of years developing that relationship and having the engineering work done. ” Getting the work done in Australia was not really an option, he added.

“Engineering activities that are done daily can be done in Australia. Heavy engineering is very labour intensive. Its efficiency is based on critical mass and historically Australia has struggled to develop the critical mass as well as the labour cost competitiveness to actually compete in that space. So we have gone out to the best of breed across the Asia Pacific region, which is reasonably close to Australia so in terms of actually getting your aircraft there keeps the cost down and you can also tap into the expertise and efficiencies. Singapore Engineering has a number of their own aircraft here in Singapore but they also have a number of other airlines’ customers, meaning they have ended up with a very large facility and the critical mass that keeps their costs efficient. ” Tigerair had looked at a number of suppliers across the Asia Pacific region, he said.

“What that process entailed was looking at safety, their experience with A320 aircraft specifically. We have some aircraft that are coming to end of lease and there is quite substantial engineering work involved with end-of-lease activities so we were also looking for expertise in that and obviously a competitive price because ultimately we are a low-cost carrier and the cost is one element of it. We then weighed up all of those criteria. Singapore Engineering came out well ahead and we were very happy to enter into a long-term arrangement with them. ” Chief executive of SIAEC Png Kim Chiang said the company was pleased to be entrusted with the heavy maintenance checks of Tigerair Australia’s A320 fleet.

“This agreement demonstrates the confidence and excellent relationship between Tigerair Australia and SIAEC. With our MRO experience on Airbus aircraft, built over a span of three decades, we are confident of delivering quality services and engineering support to Tigerair Australia’s A320 fleet. ” Tigerair currently operates a fleet of 14 A320s serving 11 destinations within Australia, as well as three Boeing 737-800s used to serve Bali from Melbourne, Adelaide and Perth.

The airline recently celebrated carrying its 20 millionth passenger since it began flying in 2007.

(Read more about Tigerair Australia and the Value Alliance elsewhere this issue).

Indonesia AirAsia X axes Melbourne, Sydney routes

Loss-making Indonesia AirAsia X has made a humiliating retreat from the Australian market after announcing the end of flights to both Melbourne and Sydney from Bali from September, a little over a year after commencing flights Down Under.

The airline explained in a statement that: “The suspension of these services is part of a network restructuring aimed at improving operational efficiencies at Indonesia AirAsia X. ” Given Indonesia AirAsia X’s only other international destination is currently Jeddah, Saudi Arabia, which the airline serves on an occasional basis, the announcement raises serious questions about the long-haul low-cost carrier’s future.

The airline began flying to Melbourne in March 2015. However, it was far from a smooth beginning, given the failure to secure its Civil Aviation Safety Authority (CASA) Foreign Aircraft Air Operator’s Certificate in time for a planned December 2014 launch, leaving thousands of passengers stranded and awaiting refunds.

Further, the Australian Competition and Consumer Commission (ACCC) had to step in and secure commitments-affected customers – many of whom had to wait more than three months for refunds and out-of-pocket expenses – would be promptly paid what they were entitled to.

Sydney-Bali flights started in October 2015.

A joint-venture between Malaysia-based AirAsia X and Indonesia AirAsia, Indonesia AirAsia X had just two 377-seat Airbus A330-300s. Although its financial performance improved in the first half of calendar 2016, the airline continued to rack up losses.

“Indonesia AirAsia X’s net loss for first quarter 2016 narrowed by half to USD4. 6 million from USD9. 4 million in the same period last year as overall operations improved,” Kamarudin Meranun, group CEO of AirAsia X, said in a statement on May 24.

“However, Indonesia’s operational environment remains challenging due to restrictions imposed by Indonesian regulators. ” Passengers booked after September 1 on the airline’s five times weekly services to both Sydney and Melbourne were being offered full refunds, an airline credit or the opportunity to fly to Bali via Kuala Lumpur.

Tigerair Australia was quick to offer affected Melbourne-Bali AirAsia X passengers a 20 per cent discount on any fare currently available on its website provided they could show proof of their AirAsia itinerary.

Garuda and Qantas-owned Jetstar also operate between Melbourne and Denpasar, while Virgin Australia, Jetstar and Garuda are all on the Sydney-Denpasar route.

Wellcamp seeking approval for one-off international passenger flight

Brisbane West Wellcamp Airport is seeking approval to have a group of Australian business representatives depart for China in October.

The delegation, which is being organised by the Toowoomba and Surat Basin Enterprise (TSBE), would be the first international passenger flight to depart from Australia’s newest airport.

“Regulatory approval will be sought from both the Chinese and Australian governments to allow the AccessChina’16 Business Delegation to leave Brisbane West Wellcamp Airport bound for Shanghai on Sunday, 23 October,” TSBE said in a statement on May 26.

Wellcamp opened its doors to regular public transport (RPT) flights in November 2014. Currently, QantasLink, Regional Express and Airnorth operate domestic passenger flights from the airport.

Also, the airport’s owners Wagners have been keen to develop the facility as a new freight hub for Australian producers to export their goods to Asia and beyond.

In November 2015, Cathay Pacific brought a Boeing 747-8F to Wellcamp for a one-off freighter service, the first international flight from the airport, which picked up about 75 tonnes of cargo such as chilled beef, mangoes, pecan nuts, grains and some heavy machinery bound for Hong Kong and beyond.

Wagners chairman John Wagner said he supported the TSBE efforts to engage with China.

“This is a once-in-a-lifetime opportunity to network with likeminded people who deal regularly with China,” Wagner said.

“TSBE has strong business connections in Shanghai and Beijing and I think this is a fantastic opportunity to access key players in the world’s biggest economic powerhouse. ” TSBE chief executive officer Ben Lyons said Australian businesses from a range of different industries stood to benefit from the recent free trade agreement with China.

“It’s not just about beef or infant formula. Whilst China consumes across all commodity groups I would encourage people in the services sector be it health, education, construction, tourism, finance and investment to carefully look at this flight as an opportunity to investigate what those opportunities are,” Dr Lyons said in a statement.

Air Canada arrives in Brisbane

Air Canada’s first daily flight to Brisbane from Vancouver touched down on June 3, marking the first nonstop scheduled service between Canada and Brisbane.

The inaugural flight AC35 was operated by Boeing 787-8 C-GHPV, and touched down at 7:07am. The 251-seat 787 made the trans-Pacific journey in 14 hours 14 minutes, having departed Vancouver at 11:45pm on June 1 (crossing the international date line in the meantime).

Brisbane is now Air Canada’s second Australian port as the airline also flies daily to Sydney using either Boeing 777-200LRs or, during peak seasons, the larger 777-300ER.

“Our new Brisbane flights complement our daily flights between Canada and Sydney, solidifying our market-leading position as the airline providing the most seats between Canada and Australia,” Benjamin Smith, president, passenger airlines at Air Canada, said in a statement.

Air Canada schedules flight AC35 to depart Vancouver at 2345, arriving in Brisbane at 0715 two days later. The reciprocal AC36 is timed to depart Brisbane at 1040 and land in Vancouver at 0715 the same day.

The Brisbane services will initially be operated by 787-8s, fitted with 20 business class suites, 21 premium economy and 210 economy class seats. From October the route is due to be operated by the larger, 298-seat 787-9.

Air Canada says the Vancouver-Brisbane services are part of an ongoing international expansion, following the recent launch of Toronto-London Gatwick and Toronto-Prague services. New Toronto-Budapest, Toronto-Warsaw, Toronto-Glasgow, Toronto-Seoul, Montreal-Casablanca, Montreal-Lyon, Vancouver-Dublin and Vancouver-Delhi services are also planned this year.

Sydney Airports expects to receive Badgerys Creek contract by end of 2016

Sydney Airport chief executive Kerrie Mather says the company expects to receive the federal government’s offer to build and operate the proposed Badgerys Creek airport later in 2016.

Mather told shareholders at Sydney Airport’s annual general meeting on May 19 it was still studying Badgerys Creek’s prospects as it waited for the government to hand over the Notice of Intention (NOI) or sales contract for the proposed airport.

“We are expecting to receive a Notice of Intention this year, bearing in mind there is also a federal election six weeks from now,” Mather said in prepared remarks.

“The Notice of Intention will set out the material terms for the development and operation of the airport, and once received we will have four or nine months to consider the proposal.

“We continue to evaluate the opportunity using our rigorous investment criteria and disciplined approach, while understanding the impact on our existing airport and our investors. ” When the Commonwealth sold Sydney Airport in 2002 it included a 30-year first right of refusal to build and operate any airport within 100km of the existing terminals at Mascot.