Asian Aviation Weekly No. 4
GENERAL NEWS
» THE INTERNATIONAL Air Transport Association (IATA) says international traffic results for September show an “alarming” decline in both passenger and cargo demand compared with the same month last year. Passenger traffic fell 2.9 percent, while cargo dropped 7.7 percent, with a 4.4 percentage-point reduction in international load factors from August as demand fell faster than capacity. “The deterioration in traffic is alarmingly fast-paced and widespread,” says IATA chief Giovanni Bisignani. “Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand.” At this rate, Bisignani adds, the global airline industry may lose even more this year than the current forecast of a US$5.2 billion deficit. Up to August, the drop in international passenger traffic was isolated to Asia-Pacific carriers, as the the region’s two major growth markets, China and India, suffered slowing economic growth and Japan saw industrial production drop 5 percent in August. The sharp downturn in world trade disproportionately impacted Asia-Pacific carriers, which posted a 6.8 percent drop in traffic in September, IATA says.
» BOEING ANNOUNCED at the beginning of November that striking machinists in Washington, Oregon and Kansas had voted to ratify a new four-year contract “that includes excellent wages and an industry-leading pension”. About 27,000 employees represented by the International Association of Machinists and Aerospace Workers (IAM) were set to begin returning to work with the third shift on 2 November, ending a 58-day walkout that analysts say may have cost the company as much as US$2 billion in lost profits. “This new contract addresses the union’s job security issues while enabling Boeing to retain the flexibility needed to run the business,” says Scott Carson, Boeing Commercial Airplanes president and CEO. “It rewards employees for their contribution to our success with industry-leading pay and benefits and allows us to remain competitive.” The contract promises general wage increases of 15 percent over four years, an immediate 16 percent pension increase and lump-sum payments of at least US$8,000 over the life of the agreement. The new contract covers a longer period than Boeing has typically negotiated with the IAM, adding to long-term stability, the manufacturer says.
AirAsia X's first Airbus A330
» BOEING HAS predicted that China will require 3,710 new commercial aircraft over the next 20 years, valued at about US$390 billion. “China will continue to be the fastest-growing aviation center in the world, requiring 41 percent of the entire Asia-Pacific region airplane demand,” says Randy Tinseth, Boeing Commercial Airplanes vice-president of marketing. “This makes China the largest market outside of the U.S. for new commercial airplanes.” Growing passenger and cargo demand in the Asian country will cause China’s fleet to more than triple to 4,560 airplanes by 2027 - about the same number of aircraft as are in Europe today, Boeing says. Single-aisle jetliners will account for 70 percent of the new purchases, driven by the world’s fast-growing domestic market, with about 2,600 new aircraft deliveries. Demand for intermediate twin-aisle jets, such as the Boeing 787, 777 and Airbus A330 and A350, will result in approximately 780 airplane deliveries. When combined, the single-aisle and intermediate twin-aisle market will make up 91 percent of China’s total delivery dollars. Demand will include about 100 large jetliners in the class of the Boeing 747 and Airbus A380. Chinese carriers will add about 370 freighter airplanes by 2027, quadrupling its total freighter fleet size, the manufacturer says.
» THE AUSTRALIAN Competition and Consumer Commission (ACCC) says it has reached settlements with British Airways and Qantas on financial penalties amounting to millions of dollars in fines for price-fixing in the carriers’ international cargo operations between 2002 and 2006. While no information has been relased on BA’s fine, Qantas says in a statement that it has agreed to pay A$20 million (US$12 million). Both carriers were among a group of airlines found guilty by US authorities of participating in an international price-fixing scam. “The airlines are the first to be proceeded against because both came forward and voluntarily made admissions under the ACCC’s co-operation policy,” the Commission says.
» ROLLS-ROYCE is now carrying out final tests on jatropha-based biofuel, which it hopes to use in demonstration flights in partnership with Air New Zealand in December. The jatropha oil was produced from seeds grown on environmentally sustainable farms in Malazi, Mozambique, Tanzania and India. The plant is about three metres high and produces about 30 to 40 percent of its weight in lipid oil. According to Rolls-Royce, the oil meets all social, technical and environmental criteria for use in biofuel production: it does not compete with existing food resources, it acts as a drop-in replacement for jet fuel, is competitive with regular fuel and at least as effective. The fuel, refined by Honeywell’s UOP subsidiary, will be demonstrated aboard an Air New Zealand Boeing 747-400.
» BOMBARDIER AEROSPACE says it will display its business and regional jet aircraft including the Challenger 605, Global Express XRS and CRJ900 at Airshow China 2008, which is being held in Zhuhai from 4-9 November. According to Bombardier’s market forecasts, China represents 15 percent of the 20- to 149-seat aircraft market over the next 20 years, or approximately 2,000 aircraft. Currently, five commercial airlines in China operate a total of 25 CRJ-family regional jets. These operators include China Eastern Yunnan Airlines, China Express Airlines, Kunpeng Airlines, Shandong Airlines and Shanghai Airlines. Additionally, government agencies operate 12 corporate variants of the CRJ200 and CRJ700 aircraft as personnel shuttles. Bombardier says its aerospace activities in China have grown substantially in recent years as the Chinese marketplace shows increasing demand in both the regional and business aviation sectors. Bombardier has sales offices in Beijing and Hong Kong for both business and commercial aircraft. Airshow China will this year feature 60 exhibitors from 35 countries and expects over a quarter million people to visit the show. The Bombardier exhibit is located in Hall 1, B2-3 at the China International Aviaiton & Aerospace Centre.
FUEL PRICE UPDATE
» THE PRICE of jet fuel continues to fall from its recent record levels. As of 24 October, the price stood at US$85.1 per barrel, or 202.5 US cents per gallon, down 35.5 percent from a month earlier and 18.4 percent from a year ago. However, the price is still almost two and a half times the level in 2000, when jet fuel sold for 87 US cents per gallon. According to IATA, the figure brings the average fuel price for 2008 to US$137 per barrel, causing an estimated year-on-year increase in the global airline industry’s 2008 fuel bill of some US$83 billion.
