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Asia-Pacific training providers look to future

Following the shortest pilot shortage in history and the industry slump of the past year, pilot training organisations in the Asia-Pacific are looking forward to growth and planning expansion. Emma Kelly reports.

As the airline industry starts to pull itself out of the doldrums, the pilot training industry in the Asia-Pacific region is already gearing up for the upturn in the cycle.

Training providers are optimistic the tide is turning and many are planning expansion of their facilities and services in preparation for the upturn. Recovery means, furthermore, that interest in the multi-crew pilot licence (MPL) is now expected to revive, and a number of providers are launching MPL programmes, while others are planning to do so in the near future.

In 2008, the Asia-Pacific pilot training market was worth almost US$10 billion, according to business research and consulting firm Frost & Sullivan. While the economic downturn has resulted in a corresponding decrease in the demand for new pilots, that is expected to change in 2010 when the economy picks up, the company says.

Despite the slump in travel demand, Australia continues to maintain a thriving training industry. In Queensland, Archerfield Airport-based Airline Academy of Australia (AAA) says it has not been impacted by the downturn.

“In fact, our cadet numbers are up substantially, we have employed more instructors and acquired more aircraft, including Garmin 1000-equipped Cessna 172s,” says Stewart Cameron, AAA’s chief executive officer. To meet its need for instructors and maintain standards, it is running a number of flight instructor courses.

Prospects for the future look good, according to Cameron, with a two-year contract recently signed with a local Brisbane university to train up to 100 cadets a year. In addition, AAA is looking to offer training to airlines in South-East Asia. As a result, expansion of the company’s facilities and fleet is on the cards. AAA is in discussions concerning the construction of purpose-built training facilities and is also adding more Garmin 1000-equipped 172s, says Cameron.

China contracts

Fellow Archerfield-based training provider Flight Training Australia recently picked up contracts from China Eastern Airlines and the Civil Aviation University of China. Some 33 cadets from China started their training in August, with a further 100 set to train at the school up to the end of 2010.

Flight Training Australia received its Civil Aviation Authority of China Part 141 pilot school certificate, authorising it to train cadets from the People’s Republic of China, earlier this year. It is one of only five training organisations in Australia and the only one in Queensland holding such authority, it claims.

“Flight Training Australia is very proud to have been selected by both China Eastern and CAUC as their Australian flight training partner,” says Managing Director Captain Peter Boughen. “This recognises the quality of training provided at Flight Training Australia and is also evidence of Australia being a major player in the world pilot training arena. Flight-training remains a growth industry in Australia and we are planning on expanding our facilities and bases further, as well as employing additional staff.

Also in Queensland, Australian Wings Academy (AWA) director Phil Sweeney concedes that his school has been hit by the downturn, although things are looking up.

“Our total numbers are about the same, but numbers are down from within Australia and from India,” he says. “The level of enquiries has now started to recover.”

Last year, AWA announced plans to open up a second school in conjunction with Australia Asia Flight Training (AAFT) at New South Wales’ Gunnedah Airport, complementing its existing operation at Coolangatta on the Gold Coast. The partnership with AAFT fell through, with AWA no longer involved in that project, says Sweeney.

“We are considering another alternative right now but I am not able to disclose details as the discussions have not progressed far enough,” he says.

In addition, the company is looking at expansion in Asia, although Sweeney declines to elaborate.

AirAsia partnership

Recently, AWA was selected by AirAsia as its Australian flight training partner. The first intake of students started in September and the contract allows for up to 100 cadets per year. In addition, Sweeney says, AWA is in discussions with two more carriers.

Although AWA is no longer involved in the Gunnedah project, AAFT is still proceeding, with support from the New South Wales government. NSW minister for regional development Phil Costa announced in December that the A$13.5 million (US$12.29 million) pilot training academy will be built by September 2010. It will train up to 400 students per annum.

Leading pilot training organisation Oxford Aviation Academy (OAA) is also looking to expand its operations in Australia, says Anthony Petteford, managing director of OAA’s ab initio training division. OAA acquired Melbourne-based General Flying Services (GFS) last year as part of efforts to add scale and geographic presence in the region.

GFS, which has been operating since 1968, trains 150-200 students per annum and is a major supplier of pilots to Qantas, as well as training cadets for airlines in China, South East Asia and the Middle East. It also has relationships with two major Australian universities, offering pilot training management degree courses.

The next aim for the Australian operation is to secure European approval so that OAA can start sending its European students there, says Petteford, adding that the company hopes to achieve that in May. The Australian facilities will also be used by customers in the Middle East, with OAA recently forming a partnership with Bahrain-based Gulf Aviation Academy to create a new airline pilot training capability in Bahrain.

Australia is a “very conducive environment” for pilot training and attractive to airlines, says Petteford. As a result, “very significant expansion is planned” for OAA’s Australian operation, he says. The aim is to double the size of the facility at Moorabbin to allow it to cater for 350-400 students per annum. Building work has yet to start but plans are in place and the work is expected to be completed in nine months, says Petteford.

Additional facility

OAA also plans to identify a site for an additional pilot training facility and is working closely with the Victorian Government on a suitable location, says Petteford, pointing to areas such as Bendigo or Mangalore. The plan is to fill up the existing facility and then have a second centre ready in two years, he adds.

OAA has also been looking elsewhere in the Asia-Pacific region. It had been close to opening a training school in India before consolidation hit that market, resulting in OAA deferring its plans.

“We might be interested in a joint venture in the future there,” says Petteford.

On the ab-initio side, China also remains a market of interest, with OAA exploring possible strategic partnerships. The company is currently talking to a potential training partner in China, with an announcement possible within six months, he suggests.

OAA already has an established flight-crew training operation in Hong Kong and recently announced a significant expansion of the facility and its capabilities. OAA will move into its own dedicated training centre, previously used by Hong Kong Dragon Airlines and close to Hong Kong International Airport Terminal. Since 1998, OAA has been operating out of the Cathay Pacific Airways flight training centre.

It is also expanding the number of full-flight simulators there, with a second Airbus A320 device to be added by the end of the first quarter of 2010, increasing total simulator numbers to four.

The company’s two existing A320 simulators and its single A330/A340 device will be installed in the new training facility, while the Boeing 737NG simulator will remain in the Cathay Pacific flight training centre, which is close by. OAA will also be adding Airbus Pilot Transition (APT2) training courses in Hong Kong for the A320 family.

Asia-Pacific strategy

The expansion of flight-crew training in Hong Kong is part of OAA’s overall growth strategy for the Asia-Pacific region, which has previously seen the acquisition of flight-crew supplier Parc Aviation – the largest provider of flight crews in the Asia-Pacific region with over 300 pilots flying in Asia-Pacific and offices in Beijing and Tokyo – as well as GFS in Australia.

Expansion plans by other providers in the region have been put on hold for the time being, however. The Flight Training Group, parent of Flight Training Adelaide, for example, has shelved plans for the immediate future of establishing a Flight Training Queensland (FTQ) operation. FTQ was planned for Maryborough, north of Brisbane, with the school originally set to be up and running in the first quarter of 2010.

Failure to reach agreement with the local council, noise concerns from the local community and the downturn resulted in FTG withdrawing its development application. At the time, FTG said it would “continue to explore options for additional capacity but in a cautious and diligent manner”. The Queensland project remains on hold, says business development manager Michael Wallis, with no plans to pursue it at this time.

Instead, the training provider is focusing on its Adelaide operation, where it has a strong customer base of Asia-Pacific airlines. In 2010, FTA will start work with another airline, Wallis says, declining to provide details. As well as fixed wing training, FTA is also growing its rotary wing training activities.

Meanwhile, MPL has a good future in the region, a number of training organisations believe. Singapore’s ST Aerospace Training Academy (STATA), part of ST Aerospace, announced in late September that it has partnered low-fare carrier Tiger Airways for pilot training on Airbus A320 using STATA’s MPL curriculum. STATA said last year that it planned to pioneer MPL in Singapore.

Tiger MPL programme

The MPL programme with Tiger started at the end of November with six cadet pilots and will last 20 months, according to Tay Kok Khiang, president of ST Aerospace. Student pilots will undergo ground school training in Singapore, followed by flight training at STATA’s flight training centre in Ballarat, Australia, before embarking on further flight training in a multi-crew environment in Singapore, says Tay.

“Upon programme completion, ST Aerospace’s training academy, in close collaboration with major industry players as stakeholders that include national aviation authorities, educational institutions, simulation experts and renowned aviation professionals, will evaluate and validate the trial,” Tay says. “These six students are expected to graduate together and will receive an MPL issued by the Civil Aviation Authority of Singapore.”

“We believe the MPL curriculum is the way of the future for airline pilot training and we are confident that the MPL programme will better prepare students for actual multi-crew operations in their future careers,” Tay adds.

STATA plans to launch further MPL courses with other national aviation authorities and is keen to see standardisation of MPL training in the region. “As we continue to make efforts to bring as many partners as we can to this forum, we look forward to the standardisation of the MPL programme, first in the Asia-Pacific region. It is also our desire to facilitate dialogue on this front to ensure that MPL can be adopted more widely,” says Tay.

STATA’s focus is on MPL but it is also providing commercial pilot licence courses. So far, 15 pilots have graduated from its CPL/IR course. “We currently have over 60 student pilots undergoing CPL for Shenzhen Airlines and Juneyao Airlines, with plans to recruit more next year,” says Tay. In addition, STATA has private students from Singapore and Sri Lanka.

Philippines pioneer

In the Philippines, Clark Aviation, part of the Alpha Aviation Group, is already a firm believer in MPL and a pioneer of the programme in the region.

In October, Clark’s first batch of 27 MPL cadets completed their base training with Cebu Air. Base training is the final stage of the MPL programme where the cadets were required to perform 12 take-offs and landings, using an actual A320 from the fleet of the cadets’ airline sponsors.

The benefit of MPL is that from day one cadets are trained as airline pilots in a multi-crew airline operating environment. MPL offers many benefits, Clark believes.

With MPL, progress is dependent in competency, not hours; flight instruction hours are increased; modern training methodologies are used; there is an emphasis on modern jet aircraft techniques rather than light aircraft techniques; there is continuous assessment; and modern simulation technology allows weather and environmental effects to be included in the course. Students follow a comprehensive, integrated syllabus and airlines end up with pilots that are trained in a highly disciplined, multi-crew operating environment, Clark says.

In Australia, Queensland’s AAA was the first training provider to gain experience of MPL. The school was selected by Boeing Training & Flight Services (formerly Alteon Training) to provide flying training for its MPL beta trial.

The six cadets from China Eastern Airlines and Xiamen Airlines who undertook the course completed their training in late 2008. That is unlikely to be AAA’s last experience of MPL, with Boeing planning to run more MPL courses, according to Cameron.

He says he is aware of a number of airlines that want to take up MPL, but need to have regulatory approval in place first. Cameron says negotiations are under way with a number of airlines and regulators, but is unable to comment further.

Asia-Pacific opportunity

OAA believes there is a great opportunity for MPL in the Asia-Pacific region. The training provider recently launched its first UK-based MPL course, in conjunction with local regional airline Flybe.

Six cadets are undertaking a 70-week, 240-hour training course, comprising 90 hours of core skills flight training, including multi-engine flying, followed by 150 hours of training in new generation flight simulators. OAA is a strong believer in MPL and has been actively involved in its development since it was launched by ICAO.

OAA’s Petteford says the company plans to gain experience of MPL in the UK and take that knowledge to offer an MPL programme at its Australian training facility in 2011. Although Petteford concedes there is not a lot of interest in MPL from local Australian carriers, there is a lot of interest from other markets in the region, particularly China and Malaysia.

Meanwhile, Flight Training Adelaide’s MPL plans are on hold for the time being, according to Wallis. Former Chief Executive Officer Keith Morgan (who has since left the organisation to become CEO of TAG Aviation Asia) told the SimTect training and simulation conference in June that FTA was in discussions with an unidentified Asian customer and its regulatory authority on launching an MPL programme.

FTA is now not going ahead with that programme, says Wallis.

feature stories

Dubai Show Report

This year’s Dubai Airshow, which ran from 15-19 November, set a new record in visitor numbers, which increased 18 percent from 2007. The biennial event attracted 52,978 attendees from 138 countries and some 890 exhibitors from 47 countries, as Liz Moscrop reports.

Dubai Airshow ends with US$14 billion in orders

The Dubai show closed with a declared order book in excess of US$14 billion, including sales of civil and military aircraft, helicopters, engines, plus agreements for heavy maintenance, cabin refurbishment and crew management processes.

Despite subsequent reports of a debt crisis in the Arab emirate, the strictly trade-only shindig once again confirmed that the Middle East is a force to be reckoned with in the aerospace industry.

Airbus closed lucrative deals with customers including Ethiopian Airlines and Senegal Airlines, along with Nepal Airlines and Yemenia Airways. By the end of the show, the Toulouse, France-based manufacturer had gathered US$5.3 billion in new commitments, including orders and letters of intent.

Ethiopian placed a US$2.9 billion order for 12 A350-900s worth US$2.9 billion, while Air Austral signed a US$655 million contract for two, 550-seat A380s. Separately, Comlux placed a firm order for a single Airbus Corporate Jet (ACJ), valued at US$75 million.

The European manufacturer’s new commitments total exceeded announcements by US rival Boeing by a factor of five. The Chicago-based manufacturer revealed just two contracts at the show, worth a combined US$800 million, with Algeria’s state-run Air Algerie and Tassili Airlines placing orders for 11 737-800 single-aisle jetliners.

“We had a good air show, better than many expected, but our industry is not out of the woods yet,” says John Leahy, Airbus’s chief operating officer, customers. “There will be a difficult winter ahead of us, but with the deals we made in Dubai and the interest in our products that we saw here, spring may not be that far away.”

Still, total sales for the rival manufacturers were modest compared with the 2007 Dubai show, when they collected a combined US$75 billion in orders and letters of intent.

Defence ministers, airline chiefs and senior officials of civil aviation authorities attended this year’s event as part of 511 civil and military delegations. According to Alison Weller, director of show organiser F&E Aerospace: “The exhibition halls and static park area were thronged, right up until the doors closed.”

“Visitors are there to see the latest products and services and negotiate deals,” Weller says. “Without doubt, this Dubai Airshow has been a platform for doing business, giving exhibitors a better and more profitable return on investment.”

The next Dubai Airshow will take place at Airport Expo, Dubai, from 30 October to 3 November 2011.

Rolls-Royce announces US$2 billion of orders

Rolls-Royce kicked the show off in style by announcing US$2 billion of Trent orders on the opening day.

Air China signed a US$1.5 billion contract for Trent 700 powerplants to power its new Airbus A330 aircraft. The order includes the engine maker’s long-term TotalCare service support plan.

The aircraft will be delivered starting from 2011, meaning Air China will eventually have 43 twin-aisle A330s powered by Rolls Royce engines. There are now 178 Trent 700s on A330s in China, either in service or on order.

Phil Harris, Rolls-Royce’s senior vice president for customer business, says: “We are delighted that Air China is again turning to Trent engine technology.” As part of the contract, Trent 700 engines for Air China’s existing fleet of A330s will be retrofitted with enhanced performance kits.

The engine maker also announced an Ethiopian Airlines order for Trent XWB powerplants worth US$480 million, taking the new engine past the 1,000-order milestone. This is Ethiopian’s first Trent acquisition and the engines will power 12 Airbus A350 XWB jetliners from 2017 onwards.

Briefs

IN A MOVE linking two of the world’s major aerospace players, Boeing and Abu Dhabi’s Mubadala Development signed a wide-ranging strategic framework agreement at the show, covering a range of areas of collaboration. The companies say they intend to develop mutually beneficial initiatives in areas where there is strategic alignment between them, including: composites manufacturing; engineering; research and development; commercial maintenance, repair and overhaul; military maintenance and sustainment; pilot training and people development. State-owned Mubadala owns Abu Dhabi Aircraft Technologies, as well as 70 percent of SR Technics and 35 percent of Piaggio Aero, alongside other aerospace interests.

SAUDI ARABIA’S Alsalam Aircraft announced that it is moving away from heavy maintenance of large airliners, focusing instead on VIP aircraft completions and maintenance, as well as component manufacturing and even airframe final assembly, while keeping up a strong presence in military aircraft upgrades and maintenance. The company was formed as the result of an offset deal with Boeing and has become a profitable, independent entity. Mohammed Fallatah, president and chief executive of the Riyadh-based company says: “Despite the global economic climate, this year has been a very good year for Alsalam.” The Royal Saudi Air Force accounts for the lion’s share of the company’s revenue, followed by BAE Systems.

Canadian flight planning company bolsters Ariana’s European hopes

Canadian flight services provider Skyplan announced that Ariana Afghan Airlines has signed a two-year deal for its flight planning and training services.

Ariana has been running trials of Skyplan’s software and training courses for the last four months and confirmed on 17 November that it would continue the contract, which means Skyplan will train Ariana’s flight operations staff at its Sharjah facility in a ‘train-the-trainer programme’, while also providing the system that they will use.

Ariana dispatchers are now able to use Skyplan’s Cybertrac One software. The first class of students recently graduated and members are now working in the airline’s flight operations office. To date, they have filed some 650 flight plans for the carrier, which flies to several destinations in the Middle East, India and Pakistan, as well as serving Frankfurt, Istanbul, Ankara and Moscow.

“We are delighted with Skyplan’s training and flight support services,” says Ariana’s president, Captain Moin Khan Wardak. “We want to increase the number of routes we fly into Europe and Skyplan’s systems are bringing us up to the standards required by Eurocontrol.”

Imran Aslam, Skyplan’s executive director for Sharjah, adds: “Our flight-planning software is producing more than 4,000 computerized flight plans a day. This is an amazing figure and we are striving for more.”

Skyplan also announced at the show that it has established a new base at the Dubai International Airport Free Zone, a year after setting up shop in Sharjah. It is the only North American company that provides contract flight dispatch from offices in the West and the Middle East.

Ethiopian Airlines places US$3 bn Airbus A350 order

Ethiopian Airlines announced that it is to buy Airbus aircraft for the first time. The carrier signed an order for 12 Airbus A350-900 twin-aisle twinjets in a deal worth US$3 billion, firming up a previously signed Memorandum of Understanding (MoU).

“Until this order, I had not been successful in selling Airbus to Ethiopian,” says John Leahy, Airbus’s chief operating officer for customers. “The key is that they saw that the A350 is the aircraft of the future. This is not a price deal but a technology deal.”

Deliveries of the aircraft are scheduled to begin in 2017, although Ethiopian Airlines Chief Executive Officer Girma Wake says that the airline might need them earlier, depending on market conditions. Ethiopian has been growing at 20 percent a year for the last five years, adding six international destinations annually to its network, and taking delivery of five or six aircraft a year to support the expansion.

Separately, Yemen’s national airline Yemenia Airways signed an MoU for ten A320 single-aisle jetliners, valued at US$700 million. The aircraft are scheduled for delivery in 2011.

The new aircraft will help the airline deliver on “ambitious plans” to expand its network in Africa, the Middle East and Asia, says Saleh Alawaji, a member of the Yemenia board of directors.

“Our long-term strategy is to grow with an integrated fleet of super-efficient and reliable aircraft,” he says. “The A320 shares operational and maintenance commonality with our existing Airbus aircraft and will bring added efficiencies.”

Nepalese national carrier Nepal Airlines also signed an MoU for an Airbus A330-200 and an A320, which could become an order worth US$250 million. The A330-200 will be deployed on North Asia and European routes and will play an important supporting role in helping develop the country’s tourism sector.

Briefs

EMBRAER HAS signed a contract with Oman Air for the sale of five Embraer 175 airliners. This is the first time the Brazilian manufacturer has sold the aircraft in the Gulf area. Four of the aircraft will be operated by the airline and one will serve with the Royal Omani Police. The order for the first five aircraft is worth US$177.5 million at list prices and deliveries are scheduled to begin in the first quarter of 2011, continuing until 2013. Frederico Fleury Curado, Embraer’s president and chief executive, says: “It’s a privilege to have our planes chosen by Oman Air – I am pleased that we can help them with their expansion.”

BAE SYSTEMS has won an exclusive mandate from an unidentified Middle Eastern operator to remarket a Boeing 767-300ER widebody jetliner for sale or lease. The late-model, General Electric CF6-80C2B7F-powered variant is configured in a three-class, 196-seat interior layout. BAE Systems regional aircraft asset management division is promoting the aircraft to existing customers, as well as into the freight or VIP-conversion markets.

Arab Wings obtains UAE certificate for Gulf Wings

Jordanian luxury charter company Arab Wings announced that it had obtained an air operator’s certificate (AOC) from the United Arab Emirates, which it will use to open a new charter company called Gulf Wings in Sharjah in December.

Gulf Wings has recently taken delivery of a new Bombardier Challenger 605 business jet and will have four more aircraft on its books by the end of the year. The fleet will eventually grow to 15 aircraft, including those the company has based in Jordan under its Arab Wings brand.

Speaking at the show, Ahmad Abu Ghazaleh, Gulf Wings’ chief executive officer said: “I can’t stress how proud I am of each staff member in Arab Wings. The GCAA [the UAE’s General Civil Aviation Authority] is a stringent authority, which is great news for operators in the region as aviation becomes safer here.”

He said the next logical step for the company is to establish a maintenance, repair and overhaul (MRO) company in Jordan and that Arab Wings has already taken steps towards this goal.

“Several large MRO players in Europe [are] talking about possible partnership with us,” Ghazaleh says.

Arab Wings’ fleet mostly comprises Bombardier aircraft, so any potential partner is likely to cater for that type.

The Jordanian company has also established a unit in Bahrain, Afaq Holding, which is 70 percent owned by a group of Saudi investors. Afaq has created an operating arm called Global Wings, a specialised global aircraft brokerage company.

Bahrain-based Global Wings will share its offices with Arab Wings and Gulf Wings in Jordan.

New business aircraft make static park debut

Several business aircraft were at the Dubai Airshow for the first time, showing just how important this region is to the beleaguered corporate aviation sector.

Dassault’s Falcon 2000LX was on display in Dubai for the first time, with NetJets’ Middle East unit, Saudi-based National Air Services, having just taken delivery of the type.

“The Middle East is an important market for us,” says Dassault. “The rest of the world is challenging today, but we are seeing a great deal of interest from this region and from India.”

The first Airbus Corporate Jet (ACJ) owned by Comlux Aviation also made its regional debut. The ACJ is proving popular in the region, with an announcement at the show that Al Jaber Group's new aviation division, Al Jaber Aviation, had placed a new firm order for two of the corporate version of the A319 single-aisle jetliner.

Al Jaber also revealed a previously undisclosed order for two A318 Elites, adding to an earlier deal for two of the same type.

Embraer brought its Lineage 1000 and the Phenom 100 to the show for the first time, highlighting the fact that Abu Dhabi’s Prestige Jet has taken delivery of the first Lineage in the region and the second is due to enter service in 2010. The first Phenom jets will also enter service in the Middle East over the next few months.

Bombardier debuted its six-passenger Signature Series Red interior for the Learjet 60XR, which it unveiled at the NBAA business aviation convention in October along with Signature Series Black. These interiors incorporate design elements aimed at bringing large-cabin concepts to a mid-size jet.

NetJets tweaks fractional model to please local market

NetJets Middle East (NJME) says it has seen a “significant boost” in sales since it altered its sales programmes slightly. The company now offers the traditional NetJets fractional ownership JetCard in 25-hour increments, as well as the ability to lease fractional shares for one to five years.

Graeme Deary, NJME’s new executive director for business development, says: “We have had a phenomenal response to the leasing programme. You’d think that the cheaper, one-year programmes would have been more popular, but people are signing up for the five-year leases.”

NJME’s current regional fleet consists of 20 aircraft, 17 under fractional ownership, which are a mix of Hawker 750s/800XPs, Falcon 2000s/2000EXs and Gulfstream GIV-SPs/G450s. There are also three business jets under management, which are chartered to both NJME and outside customers.

Briefs:

FALCON AVIATION Services (FAS) of Abu Dhabi has ordered two Sikorsky S-76D helicopters, with options for two more, becoming the worldwide launch customer for the new aircraft. The new helicopters are scheduled for delivery to FAS starting in 2011. They will be configured for VIP corporate, air taxi, and offshore oil and gas support missions. The S-76D helicopters will become the first Sikorsky aircraft in the FAS fleet, which currently numbers 21 helicopters and five corporate jets.

DANA EXECUTIVE Jets will take delivery of two new aircraft in the next few months – one large-cabin jet and one mid-size model. The company is remaining tight-lipped as to the exact aircraft types, but says that they form part of ambitious expansion plans for the region over the next few months. Wholly owned by the government of Ras Al Khaimah, UAE, Dana offers charter, management and line maintenance services.

Airbus, Boeing see renewed growth

The 20-year market forecasts of the world’s biggest aircraft manufacturers agree that recovery is in sight, but differ radically in demand estimates for their largest aircraft types, writes Justin Wastnage.

During any recession, common wisdom holds that airlines will probably cancel some of their aircraft orders. However, Airbus’s top salesman John Leahy insists that this is a myth.

They do defer deliveries if they can, but cancellations only hit 3 percent during 2009, says Leahy, who holds the official title of chief operating officer customers. In fact, 2009 was a record year of deliveries for Airbus, the result of the substantial backlog that built up over the past five years.

Leahy and his counterpart at Boeing Commercial Airplanes, Marketing Vice-President Randy Tinseth, have just completed a tour of the Asia-Pacific region, presenting their respective companies’ view of the airline industry’s future up to 2029. There are some important areas where they differ, but the econometric views of the two largest aircraft manufacturers are broadly similar.

The aviation business is cyclical and will emerge in a year or so to a period of growth once more, they both say.

Airbus has painted a worst-case scenario of zero growth next year, subsequently recovering to 6 percent growth in 2011; its best-case scenario has growth returning next year at a figure of around 4 percent.

Boeing meanwhile, breaks its recovery prediction into regions. It sees China and South-East Asia leading, having escaped recession and already likely to grow this year. The US and Canada will pick up early next year, while Europe will lag behind, Tinseth says.

Traffic growth

Air-traffic growth generally tracks increases in gross domestic product (GDP) at a ratio of 1:1.5, making it very resilient. Tinseth points out that world air travel has grown 5.2 percent per year since 1978, over a period when GDP growth globally was only 3.8 percent. Meanwhile, Leahy says air traffic has doubled every 15 years, and the next 15 years will be no exception.

Indeed, over the next twenty years Boeing expects passenger traffic to grow by 4.1 percent and cargo by 5.4 percent, so overall traffic will probably grow at an annual average of 4.9 percent.

When you break down the figures into the regions, you see Asia’s story painted in vivid colour.

North America currently accounts for around a third of all traffic in revenue passenger kilometres (RPKs) in the world today. This figure is down from a decade ago, when the US and Canada accounted for half of all traffic.

Leahy says that within 20 years, the region will only account for one-fifth of all RPKs, despite growth in the North American industry. But Asia will grow at an average of 6 percent per annum – more than double North American growth.

Asia will thus leapfrog North America, going from providing about 26 percent of total traffic today to around 33 percent in 2029. Europe, meanwhile, will stay at largely the same proportion – 26 percent – as it is today, as the fast-growing countries in Eastern Europe add to the contribution of the mature, Western European economies.

Asia will become the biggest single region because of two main growth drivers, Leahy says: China and India. Globally, the BRICs (fast-growing, developing countries named after Brazil, Russia, India and China, but also including South Africa, Indonesia, Vietnam and Argentina) will power much of the aviation industry’s growth over the next 20 years, both manufacturers agree. The Middle East will also be a key area of growth, but starting from a lower base, its share will rise to a more modest 8 percent, up from 4 percent today.

Leahy says with confidence that if the predictions about China and India turn out to be wrong, it will be because they were underestimated, not overestimated. He adds that 30 percent of all additional traffic will come from the two countries.

Developing world

“There are 6.5 billion people in the world. But only about 1 billion live in Western Europe, Canada, the USA, Japan and the South Pacific, the developed world,” he says. By contrast, “there are some 5.7 billion in the developing world and China is growing at 10-12 percent, India at 8 percent and the Middle East at 7.2 percent, which is a powerful combination if you consider that air-traffic growth outstrips GDP.”

Boeing’s GDP growth expectations, provided by its economist consultants Global Insight, are slightly lower than its competitor’s. According to the US manufacturer, China will see a 7.2 percent increase over the next 20 years, the Indian subcontinent and South-West Asia 6.1 percent, South-East Asia 4.6 percent and the Middle East 3.8 percent.

This will convert into 6.9 percent annual growth in passenger traffic in the Asia-Pacific region – with 8.6 percent growth expected just from domestic flights within China.

Part of the optimism is based on the spread of low-cost carriers to Asia. Air Asia, Tiger Airways, Nok Air and Jetstar Asia have all made inroads into the market, but a full-scale budget airline assault on Asia has not yet followed, says Leahy, with only 12 percent of the region’s carriers falling into its low-cost definition. There are hurdles in the way, chiefly deregulation.

Boeing’s Tinseth estimates that in 20 years’ time LCCs will account for 40 percent of all airlines and that 30 percent will be based in the Asia-Pacific. He too has reservations over the model here, as longer distances between cities and true international boundaries make it “far more challenging [for LCCs] than the USA or Europe,” says Tinseth.

Still, the need for air traffic liberalisation notwithstanding, Airbus has high hopes for Asia. Traditionally the LCC market has been dominated by the Boeing 737, but the European manufacturer is confident of expanding its customer base as the sector grows and carriers need a longer-range aircraft, Leahy says.

Long-haul outlook

Boeing and Airbus differ fundamentally on how they see the long-haul market growing. Last year, Tinseth squared off against Colin Stuart, Airbus’s vice-president of marketing (Asian Aviation, December 2008). Stuart said then that the future was all about “megacities” (those with populations of over 10 million people).

When the 747 first flew in 1970, only Mexico City, New York, Seoul and Tokyo were members of the mega-city club, whereas today there are at least 20 cities of over 10 million inhabitants. Since many population anthropologists differs over the exact size of various cities, Airbus this year defines its megacity as one with over 10,000 daily departures by air. Some 37 cities now fall into this category, contributing 92 percent of long-haul traffic, says Leahy.

By 2029 there may be as many as 82 such cities. Where this leads, in Airbus’s eyes, is to an increased need for very-large aircraft, a category which now includes just two airliner models: Airbus’s new A380 and the Boeing 747.

“Carrying 150 more passengers than the rival [Boeing 747-8 Intercontinental], the A380 cuts down on fuel burn and the number of flights required” to serve a market, Leahy says. Airbus says there is a need for 1,729 very-large aircraft in the next 20 years, of which only around 400 will be freighters.

Asia is particularly suited to the ‘Superjumbo’, reckons Airbus Vice-President Product Marketing Laurent Rouaud, as 14 of the top 20 airports for very-large aircraft will be in the region by 2028, with Hong Kong, Beijing and Tokyo in the top five.

Furthermore, 75 percent of the megacities will be in this region. Population, too, is on Asia’s side, with almost 4 billion people in the region, compared with a billion for today’s top airline markets – Europe, North America and Japan – combined.

Domestic services

Urbanisation in China will grow from 30 percent to 55 percent in the period, at an annual predicted rate of some 10-12 percent. As a result, the People’s Republic is likely to provide a rich market for Airbus’s largest product.

Leahy eventually foresees the A380 flying on domestic routes within densely populated Asian countries such as Japan, China and India as populations in those countries become increasingly mobile. Airbus points to Singapore Airlines and Australia’s Qantas, both of which have picked up several percentage points of market share since their introduction of the A380.

“Passengers like flying the A380 and go out of their way to do so,” Leahy says.

It is of little surprise to find that Boeing does not subscribe to this view of the future. Boeing leads Airbus in the narrowbody, short-to-medium haul sector, with the 737 family. Furthermore, many of its airline customers are low-cost carriers, a sector Boeing is confident will keep growing, especially in Asia, as regulatory barriers are pulled down.

The US aircraft maker predicts a global requirement for 19,460 single-aisle jetliners over the next 20 years, while its European rival thinks demand will be closer to 16,977. The twin-aisle market is more even, with a requirement of 6,245 seen by Airbus, compared with 6,700 by Boeing.

It is in the very-large aircraft category where the forecasts diverge the most. Boeing sees a requirement for only 740 such aircraft, almost 1,000 fewer than Airbus.

The US company’s 747-8 Intercontinental is the latest development of the long-running 747 line and, as such, requires many fewer sales to recoup its development investment. The company’s much-delayed, all-new 787 ‘Dreamliner’ programme is therefore a higher marketing priority.

While both Leahy and Tinseth stress their research is independent and not skewed towards their product lines, Boeing’s expectations of the future are geared around passengers wanting to fly direct between more secondary points, avoiding hubs. This contrasts with the view from Toulouse, of megacities and megahubs.

“It’s about the right-sized aircraft available at the right time,” Tinseth says.

Average aircraft size

Tinseth backs up this claim by saying that, over the past 20 years, average aircraft size has remained more or less the same.

Airbus disputes this, claiming an average increase in average aircraft size of 1.2 percent. But the European manufacturer ignores the market for regional jets – those with fewer than 100 seats – from its forecast, despite the fact that Boeing estimates that Canada’s Bombardier and Brazil’s Embraer take roughly 7 percent of the global airliner market with their CRJ and E-Jet aircraft, respectively.

For Boeing, the emergence of regional jets backs up its theory of thinner routes. Since 1989, the frequency of flights has doubled, as has the number of routes, Tinseth says. As wealth increases, passengers will pay more for direct flights from their closest airport to one near their destination. Hubs have their place, Tinseth says, but the long-range 787 and 777 models will be the way people want to fly: further, faster and more direct.

The 787 programme delays have hurt Boeing’s credibility, Tinseth admits. The aircraft should complete its first flight by the end of 2009, with six prototypes dedicated to flight, engine and ground tests over almost nine months before deliveries begin late next year.

The lost credibility “cannot be regained overnight,” he says. “The only way is to deliver aircraft – so we have to be successful.”

The 747-8 should fly by early next year too and be delivered alongside the 787, refreshing the entire Boeing product line, he adds.

As the green shoots of economic recovery emerge in North America and Europe, Asia has escaped the worst of the global recession. Asian carriers will soon have to compete with their counterparts elsewhere for aircraft delivery slots.

These, both manufacturers admit, are what really gets pushed back during hard times.

Eurocopter, Harbin prepare for EC175 maiden flight

Eurocopter has teamed up with China’s Harbin Aircraft Industry Group to produce a new medium twin helicopter that is scheduled to fly before the end of the year, writes Andrzej Jeziorski.

At the Paris Air Show in June this year, Eurocopter announced its target of completing the first flight of the EC175 medium twin helicopter before the end of the year. With that deadline now approaching, industry observers are awaiting news from Marignane, France, of how the aircraft – developed jointly with Harbin Aircraft Industry Group (HAIG) in China – performs.

The EC175 (or Z-15, according to its Chinese designation) is a 7-tonne class utility helicopter seating as many as 16 passengers. The development contract was signed by the partners in December 2005, with the Preliminary Design Review completed a year later. With the acceptance of the critical design review on 5 December 2007, the design was frozen, and Eurocopter then unveiled its new project to the public in February 2008 during that month’s Heli-Expo show in Houston, Texas.

Once the flight test programme begins, Eurocopter says it expects to obtain European Aviation Safety Agency (EASA) certification for the helicopter in 2011.

“We have designed [the helicopter] together with our customers for our customers, listening closely to their requirements, input and operating experience,” said Lutz Bertling, Eurocopter’s president and chief executive during the Heli-Expo show. “In terms of safety, aircraft accessibility, cabin space and comfort, the EC175 is already shaping up to be a formidable contender in the market.”

Offshore operations

Bertling added that the helicopter’s design will suit the needs of offshore oil and gas companies, with more than 40 optional equipment items available. The manufacturer says the model will also fit well into roles such as long range search and rescue, homeland security operations, emergency medical services, business transportation and commercial flights.

“I have to say that our co-operation (with HAIG) over a distance of some 10,000km has been superb,” the Eurocopter chief continued. “Based on decades of shared experience from previous programmes, we have reached maturity in pooling our competences and distributing workload evenly.”

The development and production of the EC175/Z-15 is divided equally between the European and Chinese partners, while Eurocopter is “the technical leader of the programme”, Bertling said.

The helicopter is powered by twin Pratt & Whitney PT6C-67E engines, rated at 1,325kW (2,000shp), with fully-automated digital engine control (FADEC) systems, driving a five-bladed Spheriflex main rotor. The aircraft has been designed for minimal vibration levels, with the blade design drawing on Eurocopter’s experience in its EC155 and EC 225 programmes.

“Particular attention is being paid to internal and external noise,” Eurocopter says. “The target is to be the quietest in its class, far below the latest ICAO standards.” The manufacturer also plans to make the EC175 “the most eco-friendly aircraft in its category”, producing the least pollution per passenger.

The helicopter features a four-axis automatic flight control system (AFCS) and glass cockpit. The avionics and integrated architecture are based on the EC225 cockpit, with four 6” by 8” multi-function displays and one optional central mission display. Advanced caution and warning systems have built-in test functions for fault indication.

Eurocopter says the aircraft’s four-axis, duplex autopilot “provides unrivalled precision and stability”. The avionics system’s open architecture furthermore “permits easy connection of navigation sensors”.

The EC175 airframe and fuel system have been designed to exceed EASA CS29 crashworthiness requirements, while the helicopter’s emergency egress capacity exceeds EASA Type IV certification requirements. Two pilot doors, two extra-wide, sliding passenger doors and eight large push-out windows allow 16 passengers and two pilots to exit the aircraft in seconds.

Flotation devices

Front and aft flotation devices are permanently ‘armed’ in flight and can be inflated at high speed. The helicopter also offers two, 12-18 passenger life rafts, which can easily be released. “These features make the EC175 one of the safest helicopters in its category,” the manufacturer says.

Eurocopter performed a detailed Logistical Support Analysis on the design, which showed a new maintenance approach would provide significant, tangible economic returns to operators. “Therefore, the maintenance policy has been considered a cornerstone of the design of the EC175,” the company says.

The concept of Integrated Logistic Support was applied to optimise a preventive maintenance programme that enhances safety, operational availability, reliability and cost-effectiveness.

The company plans to deliver the first two aircraft to customers in 2012. The first helicopters will be produced in Marignane, France, while a second production line in Harbin will complete its first helicopter in 2013.

At the time of the Paris show announcement, Eurocopter said it had 111 letters of intent for the helicopter, with the majority coming from European customers. The launch customers are US-based Bristow Group, Canada’s VIH Aviation Group and Longken General Aviation in China. Commitments have also come from Bond in the UK, Dancopter in Denmark, Heli-Union in France, Era and Halvorson in the USA, Global Vectra in India and HNZ in New Zealand, NHV in Belgium and Pegaso in Mexico.

The Chinese People’s Liberation Army is also understood to be planning to acquire the Z-15, as a replacement for ageing Mil Mi-8, Harbin Z-8 and Z-9 helicopters.