Debrief for December

Bombardier announced on November 8 the sale of its turboprop commercial aircraft business to the parent company of Canada-based aircraft manufacturer Viking Air for $CAD300 million. The sale to Longview Aviation Capital included the in-production Q400 as well as all assets, intellectual property and type certificates associated with the out-of-production Dash 8-100, -200 and -300 series aircraft. Separately, Bombardier also said it would sell its business aircraft flight and technical training activities to CAE for $CAD800 million. The company said the sale of these “non-core assets” was in line with its strategy of streamlining its portfolio and “focusing on growth opportunities in its transportation, business aircraft and aerostructures segments”.
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As a result of the investigation into the crash of Lion Air Flight JT610, The United States Federal Aviation Administration (FAA) on November 7 issued an emergency airworthiness directive (AD) to operators of Boeing 737 MAX aircraft, calling on them to address procedures in the event of pilots receiving erroneous angle of attack sensor information. “This emergency AD was prompted by analysis performed by the manufacturer showing that if an erroneously high single angle of attack (AOA) sensor input is received by the flight control system, there is a potential for repeated nose-down trim commands of the horizontal stabiliser,” the AD said.

‘There is a potential for repeated nose-down trim commands.’

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A mock-up of the CR929, China and Russia’s candidate to challenge the Airbus and Boeing duopoly in the widebody passenger market was shown off to attendees at the 2018 Zhuhai Airshow. The China-Russia Commercial Aircraft International Corporation (CRAIC) joint-venture CR929 mock-up featured a flight deck and a three-class passenger cabin with two rows of first class, three rows of premium economy class and four rows of economy class seats. CR929 chief designer from the Russian side, Maxim Litvinov, said the program was currently at design definition stage, with the selection of the aircraft’s main systems and equipment suppliers also underway. This was expected to be completed by the end of 2019.

Airbus has begun flight tests of the second member of the A330neo family, with the A330-800 completing its maiden flight in Toulouse on November 6. The aircraft, msn 1888, took off from Toulouse-Blagnac Airport at 1031 local time and returned four hours and four minutes later. There were two test pilots and three engineers on board. Airbus said the A330-800 flight test campaign was expected to involve 300 flight hours, with certification expected in 2019. Kuwait Airlines is the only customer for the aircraft after signing a purchase agreement for eight of the type in October.
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Turboprop airliner manufacturer ATR says the boom in online shopping could help spur demand for its aircraft in Australia as part of a mixed business model where cargo shipments supports passenger services on regional routes. ATR regional sales director Jean-Daniel Kosowski told Australian Aviation on the sidelines of the Association of Asia Pacific Airlines assembly of presidents in Jeju, South Korea, on October 18 the company was working hard to win over Australian carriers with a mixed freight and passenger offering.
“They are interested but I think not convinced yet,” Kosowski said. “It is something we keep pushing. We’ll see what’s going to happen.”
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Still on ATR, Kosowski said there was little demand for a 100-seat turboprop aircraft and it was not currently under consideration at the company, which is jointly owned by Airbus and Leonardo. “We realised that overall there was no real market for a turboprop over 70-80 pax,” Kosowski said. “One of the reasons is that if you look at aircraft very often there is a correlation between the number of pax and distance, and the turboprop is really super-efficient over one hour and 15 minutes. So if you fly 100 people, 90 people over an hour and 15 minutes we think it doesn’t really make sense. We think it is better to have two flights a day with an ATR 72 than one flight a day with a bigger aircraft. The argument of frequency was going against this 100-seater.”
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Embraer has unveiled two new business jets based on its existing Legacy line-up that offer improved performance and updated technologies. The company launched the Praetor 500 and Praetor 600 at Orlando, Florida, on October 14, ahead of the United States National Business Aviation Association’s Business Aviation Convention and Exhibition (NBAA-BACE). The Praetor 500 is in the mid-sized business jet category currently served with the Legacy 450, while the Praetor 600 is a super-midsize aircraft that is based on the Legacy 500. Two Praetor 600 prototypes and one production-conforming aircraft were currently in flight test, with certification slated for the second quarter of 2019. Meanwhile, the Praetor 500 is due to be certified in the third quarter of calendar 2019. One production-conforming Praetor 500 was in its maturity campaign. The aircraft have been named after the Roman title given to an army commander or elected magistrate.

Boeing’s biennial World Air Cargo Forecast for 2018-2037, published on October 16, showed there is a need for 2,650 additional freighters over the next 20 years to meet the growing demand for air cargo transport. The report said global freight traffic is expected to double over the next 20 years with annual growth of 4.2 per cent, led by the rise of e-commerce and online shopping. It said the global freighter fleet would grow from 1,870 aircraft in 2017 to 3,260 freighters by 2037. Of the current fleet, 610 aircraft would still be flying in 20 years’ time, with the 2,650 additional aircraft comprising 1,670 converted freighters and 980 new freighters. “The air cargo market continues to be a major element of commercial aviation’s growth story,” Boeing Commercial Airplanes managing director of market analysis and sales support Darren Hulst said in a statement. “Our new forecast indicates strong long-term air cargo trends, which coincide with the market recovery that we have seen over the last few years across Europe, North America, and Asia.”
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VIRGIN AUSTRALIA NEWS

Virgin Australia chief executive John Borghetti says product improvements, both on the ground and in the air, and network changes for the airline’s trans-Tasman operation following the end of its alliance with air New Zealand, have been well-received by the travelling public. “We are getting not only good feedback but we are seeing bookings shifting our way so that is very good,” Borghetti told reporters after the company’s annual general meeting (AGM) on November 8. “We know our strategy is right. We know that the capacity that we’ve put is adequate and suitable, and we’re seeing some of the benefits that are starting to come through by people moving.”

‘We know our strategy is right.’
John Borghetti

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Still on Virgin Australia, Borghetti said the airline has increased ticket prices in response to the rise in oil prices in recent times. However, he said sale fares were still very low. “When you’ve got such a big impost on the business on what is effectively, I guess, your biggest expense line, there is an element of it that you have to pass through, if not all of it,” Borghetti said. “But at the same time you can’t rely on just that, so you have to work harder on your costs and that’s exactly what we’re doing.”
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Also, shareholders at the AGM took the opportunity to express criticism of the airline’s share price, which has traded between 19 and 30 cents for the past 12 months despite an improved outlook. One shareholder, fund manager Geoff Wilson whose Wilson Asset Management owns Virgin Australia shares, described the company’s shareholding structure as “dysfunctional”, telling chairman Elizabeth Bryan at the AGM she should be “embarrassed” by the share price performance.
Bryan rejected that characterisation: “I’m not embarrassed about this company. I’m very proud of its achievements,” Bryan said. And on the shareholding structure, Bryan said: “I will grant you unusual, but I will not grant you dysfunctional.”
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Virgin Australia announced on October 31 it planned to open a pilot training school in the northern NSW city of Tamworth. The airline said it had been chosen by Tamworth Regional Council as the preferred airline group to establish the facility. No start date for the facility was given, with negotiations ongoing between Virgin Australia and the council on the details of the proposed facility.
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Virgin Australia said in a trading update on October 22 it expected underlying profit before tax for the first half of the 2018/19 financial year to exceed $100 million, an improvement of at least 22 per cent from a restated $81.9 million in the prior corresponding period. The forecast growth in underlying profit comes despite an $88 million rise in fuel costs. The airline said revenue rose 9.7 per cent in the three months to September 30, above forecasts of seven per cent forecast growth in August. And looking further ahead, Virgin Australia said its revenue was expected to grow 10 per cent in the three months to December 31, compared with the prior corresponding quarter, based on current booking trends, particularly in the domestic business.
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Finally, Virgin Australia says it will consult community groups and its own staff on the best way to recognise Australian Defence Force veterans travelling on its flights following criticism from groups such as the Australian Defence Association. It was announced on November 4 the airline had planned to offer veterans priority boarding and acknowledge them before flights. However, Virgin Australia said on November 5 it was “mindful of the response” to the proposed initiative, which would have been voluntary. “Over the coming months, we will consult with community groups and our own team members who have served in Defence to determine the best way forward,” the airline said.

QANTAS NEWS

Qantas chief executive Alan Joyce has defended the airline’s method of paying bonuses at the company’s annual general meeting (AGM) in Brisbane on October 26, arguing the conditions were the same as previous staff bonuses. The $2,000 bonus for 27,000 non-executive employees was announced at Qantas’s 2017/18 full year results in August. However, unions argued it could be up to three years before those employees received their bonuses, given the need to have reached a new labour deal with the company. Joyce said he was surprised and disappointment this round of bonuses had received such criticism. “It’s being communicated the same way as all the previous ones were,” Joyce said. “The reality is I think people should be looking at the glass half full and be positive about it. There’s not many companies that have given $300 million of discretionary bonuses in Australia.”

‘People should be looking at the glass half full and be positive about it.’
Alan Joyce

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In other news from the Qantas AGM, a resolution proposed by the Australasian Centre for Corporate Responsibility (ACCR) that called on the airline to review its approach to the movement of asylum seekers both around the country and internationally, failed to pass. The resolution called for a change to the constitution to require Qantas to conduct a heightened due diligence process in relation to involuntary transportation activity on behalf of the Australian Government. ACCR executive director Brynn O’Brien said Qantas was either ignoring or failed to understand its human rights commitments in this matter and had “unwittingly waded into very dangerous territory”. “What concerns me with this company, more than any other company I have engaged with, is our company’s refusal to think seriously and deeply about the issues we have raised,” she said. “Our company has misjudged this, has misread the winds of community sentiment and the risk profile of these activities.” Outgoing Qantas chairman Leigh Clifford called on groups such as the ACCR to leave Qantas out of its lobbying efforts to get Australia’s asylum seeker policies changed.
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Qantas said in a trading update on October 25 it expected its total fuel bill to be $4.09 billion for the 2018/19 financial year, an 27 per cent increase compared with the prior year and higher than its $3.92 billion forecast from August. The airline said rising fuel costs were “substantially offset by net passenger revenue growth and capacity discipline”, with the value of forward bookings up eight per cent compared with the same period a year ago. “Our record passenger revenue performance for the first quarter meant that we were able to substantially recover higher fuel prices,” Joyce said in the trading update. “Market demand for travel remains fundamentally strong and we’re seeing some wind-back of competitor capacity growth.” Further, Joyce described current market conditions as “cyclical headwinds impacting the sector”.
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The United States Department of Transportation (DoT) said on November 1 it had finished its initial review of American Airlines and Qantas’s application for expanded alliance and anti-trust immunity for services between the United States and Australia and New Zealand. “The record is now substantially complete,” the DoT said notice said. The application was lodged in February 2018. It is the second time the two carriers have applied for approval to deepen cooperation on trans-Pacific routes. The first bid was rejected in late 2016.

AIRLINE NEWS

Alliance Aviation Services has reaffirmed plans grow its operating fleet in Australia from 33 to 42 aircraft by the end of the 2018/19 financial year. Speaking at the company’s annual general meeting in Brisbane on October 30, Alliance managing director Scott McMillan said the airline had taken three aircraft so far in the current financial year, with two more due to arrive by December 31 2018. “The remaining four aircraft are scheduled to complete their entry into service maintenance checks towards the end of this financial year,” McMillan told shareholders in prepared remarks. “These additions will bring the operating fleet size to 42 aircraft which we consider will meet current and future demand.”
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Fly Corporate has restored nonstop air links to Brisbane and Melbourne for residents in Wollongong and the broader Illawarra region that were lost when JetGo collapsed earlier in 2018. The regional carrier started flying from Illawarra Regional Airport, also known as Albion Park, to Melbourne Essendon and Brisbane on November 12 with Saab 340s. There will be four flights a week to Brisbane and nine flights a week to Melbourne Essendon. The airline was the winning bidder in a tender conducted by Shellharbour City Council for regular public transport (RPT) flights into and out of Illawarra Regional Airport following the loss of JetGo.

International Air Transport Association (IATA) director general Alexandre de Juniac says regulators and airports need to move faster to keep pace with the expected growth in passenger traffic. De Juniac’s call came as IATA released its 20-year forecast which showed passenger numbers expected to reach 8.2 billion by 2037, more than double the four billion of calendar 2017. “We don’t see, actually, the necessary, unavoidable and key decisions made to ensure that the infrastructure will be able to cope with the growth,” de Juniac told reporters during a conference call on October 24. “Some regions of the world are more lagging behind in air traffic control’ some others are late in terms of airport development. But everywhere we have an infrastructure shortage and we urge governments to make the right decision quickly because all these programs … take between five and 10 years to be implemented and to be in service.”
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Association of Asia Pacific Airlines (AAPA) director general Andrew Herdman said on October 18 that rising oil prices were expected to hit airline profitability as heavy competition limited carriers’ ability to lift ticket prices. While airlines in the region, and indeed globally, are still forecast to post healthy profits for the period ahead, Herdman expected the overall picture to be lower than in previous years. “The pressure in Asia based on the results we’ve seen so far this year are that it’s been very difficult to pass on the full cost impact, and so we are seeing margins come down and profitability pullback as a result,” he told reporters at the AAPA Assembly of Presidents in Jeju, South Korea. “Overall, I still expect Asian airlines, on aggregate, to make substantial profits, but it seems pretty clear that it will be lower than the levels we’ve seen in previous years.” The International Air Transport Association (IATA) jet fuel monitor shows the jet fuel price was at $US95.73 a barrel in mid-October, up about 40 per cent from a year earlier. Fuel is typically an airline’s second-biggest cost after staff.
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Still at AAPA, Herdman said there was a lot more that needed to be done, from expanding the teaching of STEM – science, technology, engineering and mathematics – in schools to having flexible rosters in order to encourage more women to pursue a career in aviation. “We are driven from an operational culture, we’ve got to adjust accordingly. Still run the operation, but try to offer a degree of flexibility because different people have different requirements,” Herdman told reporters at the AAPA assembly of presidents in Jeju on October 19. “There are many many opportunities ahead in this industry as we said in terms of the growth and it’s important that’s well publicised. It’s a challenge and it needs more than talk.”
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Korean Air president and chief operating officer Walter Cho said the global pilot shortage had been keenly felt at his airline. “I just got an email yesterday that two of our pilots left, one to China and one to one of our low-cost carriers in Korea,” Cho told reporters in Jeju. “Becoming a pilot is a long-term investment. It is a long-term investment for us, too, to have them be sufficiently trained and be safely operating our airplanes. For us, it’s critical to maintain that manpower, but it’s getting tougher and tougher.”
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Cathay Pacific chief executive Rupert Hogg said his airline was committed to greater gender equality. “There are two challenges. One is attracting people in the first place, and attracting women to come and work for us,” Hogg told reporters in Jeju. “And that’s just a huge opportunity and we’ve rdone that badly in the past and we can do better in the future. I mean, there is a fantastic potential workforce out there. The second issue, I think, is how can we adjust our structures, or the nature of working for us, that makes it easier for people to fulfil a life-long career through whichever role they are interested in?”

‘There is a fantastic potential workforce out there.’
Rupert Hogg

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Still on AAPA, it was announced at the conclusion of the gathering in Jeju that Cathay Pacific would host the 2019 assembly of presidents in Hong Kong.
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Aviation veteran Alan Milne has been appointed chief executive of Papua New Guinea flag carrier Air Niugini. He replaces Simon Foo, who has been interim chief executive since March 2018. Papua New Guinea Minister Public Enterprise and State Investments William Duma announced Milne as the new chief executive in mid-October. Previously, Milne spent more than three decades at Qantas in a number of roles, including as head of fuel and environment, head of engineering for the airline’s international operations, and as Boeing 747 fleet manager.
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Singapore Airlines (SIA) plans to operate nonstop flights to Seattle with Airbus A350-900ULR (Ultra Long Range) equipment from September 3 2019. The route will be the airline’s fourth nonstop service between Singapore and the United States alongside Los Angeles, New York (Newark) and San Francisco. While residents on Australia’s east coast would find heading to the United States via Singapore a somewhat circuitous route, those living Perth or Adelaide could find a one-stop international-to-international connection at Singapore’s Changi Airport a more palatable option than potentially a two-stop itinerary via Sydney and Los Angeles, for example.
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INDUSTRY NEWS

The Australian Federation of Air Pilots (AFAP) named Captain Louise Pole as its 32nd president at the pilots union’s annual convention on the Gold Coast on October 19 following a vote of its 4,700 members. A Dash-8 Q400 pilot with QantasLink’s Sunstate Airlines, Captain Pole had been an AFAP vice president since 2009. It is the first time the pilots union has elected a woman to lead the association in its 80-year history.
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Victoria Police Air Wing is replacing its four-helicopter fleet with three Leonardo AW139 helicopters and one Beechcraft King Air 350ER fixed-wing aircraft. The four aircraft are due to be delivered in 2020, Victoria Police announced on October 23. It said the three AW139s will be acquired from StarFlight Victoria, while the King Air will be acquired from Skytraders. It will be the first time the Victoria Police Air Wing will have a fixed-wing in its fleet, Victoria Police acting superintendent Mark Arneil said.
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Honeywell Aerospace’s annual Global Business Aviation Outlook, released on October 14, has forecast demand for 7,700 new business aircraft deliveries between 2019 and 2028. The estimate is below the 8,300 new business jet deliveries in the 2017 survey and continues the report’s downward trend in recent times with the annual report’s forecast of 8,600 deliveries in 2016, 9,200 deliveries in 2015 and 9,450 in 2014. However, Honeywell said the business jet market was expected to experience strong growth in the short to medium term supported by several new airplane models coming to market and an improved used aircraft environment. “We are excited about the used market and about new and innovative aircraft models that will not only drive solid growth in 2019 and 2020, but also have a significant impact on new business jet purchases in the midterm and long term,” Honeywell Aerospace vice president for global marketing Bill Kircos said in a statement.
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Global logistics company DHL has extended its sponsorship of Surf Life Saving Australia for a further three years. The company has sponsored Surf Life Saving Australia since 2003.
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Transport company FedEx Express started a new four times a week freighter service between Sydney and Singapore. The company said the new service, operated by an MD-11 tri-jet, would meet customer demand for more freight capacity in areas such as heavyweight shipments, retail, healthcare (cold chain), perishables, and lithium ion batteries. “We are seeing increasing inflows and outflows of goods and services worldwide to and from Australia, as we are across the rest of the Asia Pacific region. This new flight shows our continued commitment to adjusting our network and strengthening our operations to help local business go global with the solutions that meet customers’ needs,” FedEx Express president for Asia Pacific Karen Reddington said in a statement. In addition to Singapore, FedEx has freighter service between Sydney and Auckland, Guangzhou, Hong Kong, Honolulu and Osaka Kansai.

AIRPORT NEWS

Adelaide Airport Ltd (AAL) has reported an eight per cent improvement in revenue to $214 million for 2017/18 financial year amid good domestic growth and significantly increased international traffic. The company’s annual report released on November 2 showed earnings before interest, tax, depreciation and amortisation (EBITDA), before adjustment for fair value of assets, rose 7.1 per cent, or $8.8 million, for the 12 months to June 30 2018. However, the fair value line was $10 million lower at $15.9 million, while the pre-tax result also was dragged down by higher depreciation charges and an impairment charge of $980,000 against property, plant and equipment. As a result, net profit for the year slipped to $44.9 million from $48.5 million in the previous year. AAL managing director Mark Young said the new financial year had started well. “We are tracking OK for another good year, with passenger traffic up about 4 per cent,” Young told said.
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Air travel technology provider SITA and Qantas have started a trial at Brisbane Airport where passengers will be able to use their mobile phone and face to board the aircraft or use the lounge. The trial is for volunteers travelling on Qantas flights from Brisbane to Hong Kong, Singapore and Tokyo Narita. Those volunteers store their passport details and a photo of their face on a Qantas app. That data is then matched to their face when at the boarding gate or when entering the lounge so they are not be required to show their boarding pass or passport at these points in the journey.

DEFENCE NEWS

The Royal Australian Navy (RAN) held a commissioning ceremony for 822X Squadron on October 23 marking a major evolution in the development of naval aviation. The ceremony, at HMAS Albatross near Nowra, marked the transition of unmanned aviation from the Naval Unmanned Aircraft Systems Unit (NUASU) to an operational squadron of the Fleet Air Arm. Further, it was held to a backdrop that showcased the RAN’s long association with unmanned aircraft in the form of a Jindivik and a Kalkara. Both wore high visibility orange paint schemes, a testament to their roles as target drones while, in contrast, the modern aircraft of 822X Squadron carried inconspicuous, low-visibility schemes.
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On October 17, the Royal Australian Air Force publicly presented the colour scheme to be worn by the new Pilatus PC-21 training aircraft in its formation aerobatic display team the Roulettes. The Roulettes aircraft feature the same basic red fuselage, white tail and blue underside scheme worn by the PC-21s being introduced into service with the RAAF’s 2 Flying Training School (2FTS), but gains blue triangles on the fuselage and wings, and the trademark Roulettes ‘R’ and Southern Cross tail markings. “There are two PC-21 schemes. One of them is somewhat of a retro colour scheme with World War II style markings, and that will be the 2FTS bird … to help students identify the top and bottom of the aircraft and make it a very easy aircraft to see from a long distance,” Chief of Air Force Air Marshal Leo Davies told Australian Aviation at the launch of the new scheme at the Fairbairn Defence Establishment at Canberra Airport.