Debrief

Still on Embraer, the manufacturer’s commercial aircraft business will be known as Boeing Brasil-Commercial when its acquisition by Boeing clears the final regulatory hurdles. Boeing, which unveiled the new name on May 23, will own 80 per cent of the new entity, with Embraer holding the remaining 20 per cent. The transaction, first announced in July 2018, was expected to be completed by the end of 2019.

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Longview Aviation Capital has established a new company called De Havilland Aircraft of Canada Ltd that will be responsible for manufacturing the Q400 turboprop. The return of the iconic De Havilland name was announced on June 3 following the completion of the purchase of the Q400 program from Bombardier that was first announced in November 2018. Production of the Q400 will continue at the current manufacturing site located at Downsview, Ontario under a land lease agreement that stretched out until 2023.

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‘Boeing will own 80 per cent of the new entity

Japanese giant Mitsubishi Heavy Industries is in talks to buy the CRJ regional jet program from Canada headquartered Bombardier, both companies confirmed on June 5. The deal, if completed, would result in Bombardier ending commercial aircraft production having already sold off its Q400 turboprop business to Longview Aviation Capital and a majority stake in the CSeries (now A220) to Airbus. Bombardier said any sale of the CRJ regional jet program would require approval from management and the board, with no assurance that the talks with Mitsubishi Heavy Industries would ultimately lead to an agreement.

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Airbus said on May 21 it will offer an additional 450nm of range on its two-aircraft A220 regional jet program from the second half of 2020 after increasing the maximum takeoff weight (MTOW) by 2.3 metric tonnes. As a result, the A220-100 will have a range of 3,400nm, while the A220- 300 would have a range of 3,350nm. The A220-100’s basic MTOW would increase to 63.1t, from 60.8t currently, while the A220-300 would have a basic MTOW of 69.9t, up from 67.6t.

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Cirrus Aircraft has revealed Zean Nielsen as its new chief executive. He takes over from the company’s co-founder Dale Klapmeier, Cirrus

Aircraft said on June 4. Prior to his appointment, Nielsen had been executive vice president of sales at James Hardie Building Products since August 2017, having previously held senior executive roles at Tesla and Bang & Olufsen.

I N D U S T R Y N E W S

The New South Wales government has signed a contract with United States based Coulson Aviation to purchase three aircraft for firebombing duties – a modified Boeing 737 large air tanker and two Citation V lead/intelligence aircraft. NSW Minister for Police and Emergency Services David Elliott said in a statement on May 15 that the modified 737 would give the state year-round access to a large air tanker amid an increasing number of winter bushfires in recent times. Coulson Aviation said the 737 Fireliner, which was certified by the United States Federal Aviation Administration (FAA) as an air tanker and passenger transport in 2018, was the largest ever air tanker purchased by a country.

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Red Bull announced on May 29 the current season of its Air Race World Championship will be the last. The company said in a statement the competition, launched in 2003, “did not attract the level of outside interest as many other Red Bull events across the world”. There were three more races scheduled in 2019, to be held in Kazan in the Russian Federation on 15-16 June, Lake Balaton in Hungary on 13-14 July and Chiba in Japan on 7-8 September. (See Page20.)

Q A N TA S G R O U P N E W S

Qantas has named Flight Training Adelaide (FTA) as its new training provider for the proposed pilot academy at Wellcamp Airport in Toowoomba, west of Brisbane. Flight Training Adelaide has replaced US-based L3 Commercial Aviation, which backed out of the project in March 2019 after being unable to reach an agreement with Qantas. The first intake of students was due to start in September in temporary accommodation at the University of Queensland while the hangars, classrooms and student accommodation lodges are being built.

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Still with Qantas, the airline planned to appeal against a draft ruling from Australia’s International Air Services Commission (IASC) denying approval for Cathay Pacific to codeshare on its flights between Australia and Hong Kong. The draft ruling argued that allowing the codeshare on flights from Brisbane, Melbourne and Sydney to Hong Kong was likely to “entrench and expand the market position” of the two airlines to the detriment of Virgin Australia’s competitive position and the position of any potential future entrants on the route. Qantas group chief executive Alan Joyce told reporters on the sidelines of the International Air Transport Association (IATA) annual general meeting in Seoul on June 3 that the IASC got it wrong, adding that the claimed public benefits the airline had put before the IASC had not been fully evaluated.

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The US Department of Transportation (DOT) granted American Airlines and Qantas “tentative approval” to form a joint-venture alliance on trans-Pacific routes with anti-trust immunity on June 3. The ruling, which is still subject to a public comment period, would allow American Airlines and Qantas to establish a metal-neutral, revenue-sharing partnership on routes across the Pacific. The DOT has placed some conditions on the alliance, such as an obligation to provide interline access for any new airline flying from Australia and New Zealand to the United States, as well as requirements to submit origin and destination data, compile an annual report and a “detailed self-assessment after seven years”.

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‘Virgin will cut capacity by 1.5 per cent across its network’

In response, Qantas said it planned to launch two new routes – Brisbane San Francisco and Brisbane-Chicago – once final approval was received, adding that the alliance would lead to lower fares, better flight connections and more frequent flyer benefits. Also, the two carriers said the joint-venture would create additional jobs.

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Still on Qantas, Joyce told reporters at IATA he expected Airbus and Boeing to submit their best and final offers by August to win the airline’s Project Sunrise challenge for an aircraft capable of flying nonstop from Australia’s east coast to London and New York. A decision from the airline whether to place an order was expected before the end of calendar 2019. And Joyce said management would have no hesitation in deciding not to proceed if the business case involving agreements with the pilots’ union and regulators, among other considerations, did not stack up: “If the business case doesn’t work … we will be ruthless and we will kill the project.”

V I R G I N A U S T R A L I A G R O U P N E W S

Virgin Australia group chief executive Paul Scurrah has foreshadowed an underlying loss for the full 2018/19 financial year as rising fuel costs and challenging market conditions hit hard. The company said in a trading update to the Australian Securities Exchange on May 17 that it expected “underlying earnings to be at least $100 million down on the FY18 comparative result of $64.4 million”. The statement said the outlook reflected uncertainty in the domestic market and a $160 million impact from high fuel prices and foreign exchange movements.

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In response, Virgin Australia said it would cut capacity by 1.5 per cent across its network. On the domestic front, the airline said it would end Perth-Geraldton nonstop flights in July. On the international network, Virgin Australia planned to cut some flights between Australia and New Zealand, including reducing frequency on Sydney-Auckland and switching Sydney-Christchurch to a seasonal service.

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Seasonal nonstop flights between Melbourne and Kununurra in Western Australia will begin in May 2020 with the launch of a trial service operated by Alliance Airlines under a codeshare arrangement with Virgin Australia. The announcement of the new service was made jointly by The East Kimberley Marketing Group, a collaboration of regional tourism operators formed five years ago, along with the Shire of Wyndham East Kimberley and Alliance Airlines, on May 27. Shire of Wyndham East Kimberley president David Menzel said the initiative was expected to boost business opportunities in the region, with local tourism operators keen to capitalise on the “bucket list” status of the Kimberley.

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Virgin Australia has applied to the Australian Competition and Consumer Commission (ACCC) seeking approval to cooperate with Virgin Atlantic on flights between Australia and the United Kingdom via Hong Kong and Los Angeles. The application sought authorisation for joint pricing, inventory management, scheduling coordination, network planning and marketing, as well as product alignment, airport operations, joint procurement and tenders for corporate contracts. Virgin Australia has existing partnerships with Etihad Airways (via Abu Dhabi) and Singapore Airlines (via Singapore) for services between Australia and the United Kingdom.

A I R L I N E N E W S

Singapore Airlines (SIA) has reported a near halving of net profit in fiscal 2019 as higher fuel prices, overcapacity in some markets and operational challenges weighed on the bottom line. The airline group comprising flying brands Singapore Airlines, regional wing SilkAir and low-cost carrier Scoot, as well as an engineering business, said net profit for the 12 months to March 31 2019 came in at S$683 million, down 47.5 per cent from S$1.3 billion in the prior corresponding period. Revenue rose 3.3 per cent to S$16.3 billion, SIA said in a regulatory filing to the Singapore stock exchange on May 16.

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Charter and fly-in/fly-out operator Cobham Aviation Services has added a 98-seat Embraer E190 to its fleet to take workers between Perth and Chevron Australia’s LNG Gorgon Project on Barrow Island, off the north-west coast of Western Australia. It is the second time Cobham has used the E190 regional jet for this purpose. In November 2014 it leased a 104-seat E190 jet but returned the aircraft to its European lessor in March 2018.

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Uncertainty about Darwin-based Airnorth’s future as its parent Bristow Group tries to stave off bankruptcy has prompted independent carrier Regional Express (Rex) to consider operating in the Northern Territory. Rex deputy chairman John Sharp said on June 3 he would lead a delegation to the NT in coming weeks to talk with key stakeholders after the Rex board discussed the option at a directors’ meeting on May 23.

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Another carrier looking to expand in the Top End was Alliance Airlines, which said on June 7 two Fokker 70s and one Fokker 100 would join an existing Fokker 100 at its Darwin base in response to growing demand from the tourism and mining sector. Alliance Airlines managing director Scott McMillan said in a statement requests for additional contractual business have grown to the point where the company was confident the Darwin operation could be significantly and viably expanded. Further, Alliance was also considering expanding its regular passenger transport operations (RPT) in the Northern Territory by commencing flights out of Darwin.

A I R P O R T N E W S

Sydney Airport chief executive Geoff Culbert told shareholders at the company’s annual general meeting on May 24 that traffic figures for the first third of calendar 2019 suggested passenger growth was likely to be slower than prior years as airlines adjusted capacity in response to changing market conditions. Figures from the airport showed its domestic and international terminals handled 14.69 million passengers in the four months to April, down 0.7 per cent compared with the prior corresponding period. “It is likely that 2019 will see more subdued growth in passengers across the board – we have seen that in the first four months of this year – but to a certain extent this was to be expected when we have just come off a number of years of extraordinary growth,” Culbert told shareholders in prepared remarks.

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Western Sydney Airport said on June 6 it had signed a memorandum of understanding (MOU) with the Qantas and Virgin Australia airline groups. The MOU would give the airlines the opportunity to have a say in the design and plan for the airport being built at Badgerys Creek in the city’s west, expected to be completed by the mid-2020s. Areas of collaboration included the passenger terminal and boarding, technology and innovation opportunities – particularly around baggage handling, security and customer service – and airport access, including train stations, parking and rideshare facilities, airfreight and cargo facilities and sustainability.

D E F E N C E N E W S

The Royal Australian Air Force (RAAF) has begun an upgrade program on its fleet of 12 Lockheed Martin C-130J Hercules transports with the installation of new Mode 5 Identification Friend or Foe (IFF) systems and Automatic Dependent Surveillance Broadcast (ADS-B) transponders. The installation is being conducted by Airbus Australia Pacific in conjunction with Defence’s Capability Acquisition and Sustainment Group’s (CASG) Air Lift Systems Program Office (ALSPO) and Lockheed Martin. All 12 of the RAAF’s C-130Js were expected to have received the upgrade by mid-2020 (see feature Page 68).

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Senator Linda Reynolds was officially sworn in as Australia’s new Defence Minister by Governor-General Sir Peter Cosgrove at Government House in Canberra on May 29. Prior to the May 18 2019 election, Senator Reynolds was Minister for Defence Industry, a post she had held since March 2018 following the resignation of Stephen Ciobo. The Prime Minister had named Senator Reynolds to take over from Christopher Pyne as Defence Minister should the Coalition be returned to government.

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The Lockheed Martin C-130J-30 Super Hercules has won the contest to replace the Royal New Zealand Air Force (RNZAF) C-130H Hercules, the country’s Defence Minister Ron Mark announced on June 10. Mark said the government would request detailed pricing for five stretched fuselage C-130J-30 models, the requirement for which was considered the highest priority project in New Zealand’s most recent Defence Capability Plan 2019. The C-130J-30 was up against the Airbus A400M and the Embraer KC-390, Kawasaki C-2 transport and a joint Northrop Grumman/Leonardo bid with the C-27J Spartan.

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Defence contractor Raytheon and aerospace supplier United Technologies have announced plans to merge, creating a mega company with annual sales of about US$74 billion. The two firms said in a joint statement on June 9 that the new company, to be called Raytheon Technologies, would create a premier systems provider with advanced technologies to address rapidly growing segments within the aerospace and defence industries. The all-stock deal was expected to close in the first half of calendar 2020.

I ATA A G M N E W S

International Air Transport Association (IATA) director general and chief executive Alexandre de Juniac has called on regulators to collaborate and work towards the same timeline when re-certifying the return to service of the Boeing 737 MAX. “We are urging the regulators, first of all, to have the most comprehensive, consistent and collaborative approach,” de Juniac told reporters on May 29. Further, de Juniac called on regulators to “have the same timeline, if possible” for certifying the aircraft’s return to service to avoid creating discrepancies and “totally useless disruptions”.

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Airlines were collectively expected to post a decline in profit for the first time in three years in 2019 in response to trade tensions, rising fuel prices and a slumping cargo markets. The IATA forecast, published at the annual general meeting in Seoul on June 2, expected airlines to earn US$28 billion in net profit in calendar 2019. This was below a recorded in Canberra on May 29. Prior to the May 18 2019 election, Senator Reynolds was Minister for Defence Industry, a post she had held since March 2018 following the resignation of Stephen Ciobo. The Prime Minister had named Senator Reynolds to take over from Christopher Pyne as Defence Minister should the Coalition be returned to government.

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The Lockheed Martin C-130J-30 Super Hercules has won the contest to replace the Royal New Zealand Air Force (RNZAF) C-130H Hercules, the country’s Defence Minister Ron Mark announced on June 10. Mark said the government would request detailed pricing for five stretched fuselage C-130J-30 models, the requirement for which was considered the highest priority project in New Zealand’s most recent Defence Capability Plan 2019. The C-130J-30 was up against the Airbus A400M and the Embraer KC-390, Kawasaki C-2 transport and a joint Northrop Grumman/Leonardo bid with the C-27J Spartan.

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Defence contractor Raytheon and aerospace supplier United Technologies have announced plans to merge, creating a mega company with annual sales of about US$74 billion. The two firms said in a joint statement on June 9 that the new company, to be called Raytheon Technologies, would create a premier systems provider with advanced technologies to address rapidly growing segments within the aerospace and defence industries. The all-stock deal was expected to close in the first half of calendar 2020.

I ATA A G M N E W S

International Air Transport Association (IATA) director general and chief executive Alexandre de Juniac has called on regulators to collaborate and work towards the same timeline when re-certifying the return to service of the Boeing 737 MAX. “We are urging the regulators, first of all, to have the most comprehensive, consistent and collaborative approach,” de Juniac told reporters on May 29. Further, de Juniac called on regulators to “have the same timeline, if possible” for certifying the aircraft’s return to service to avoid creating discrepancies and “totally useless disruptions”.

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Airlines were collectively expected to post a decline in profit for the first time in three years in 2019 in response to trade tensions, rising fuel prices and a slumping cargo markets. The IATA forecast, published at the annual general meeting in Seoul on June 2, expected airlines to earn US$28 billion in net profit in calendar 2019. This was below a recorded

‘Korean Air is planning a seat upgrade program on its widebody fleet’