Dreamliner hit by landing gear malfunction

Boeing Co. and All Nippon Airways are investigating a landing gear problem on the 787 Dreamliner, the first technical glitch reported since the new jetliner entered service less than two weeks ago, the airline said on Monday. Pilots on the first of two aircraft delivered so far to ANA were forced on Sunday to deploy the landing gear using a manual backup system, after an indicator lamp suggested the wheels were not properly down. They landed at Okayama on the second attempt following the incident, the airline said. "We are not yet sure what the problem was, but we are investigating," an airline spokesman said, adding that Boeing was also involved in the investigation. Kyodo news agency linked the problem to a hydraulic valve, but Boeing declined to confirm the cause.

A Boeing spokesman in Europe said: "We are aware of this matter and are on site in Japan with ANA offering whatever assistance they require." The 787 Dreamliner is a revolutionary lightweight aircraft built mainly of carbon composites designed to save fuel. It was delivered in September after three years of production delays and made an inaugural flight on October 26 from Tokyo to Hong Kong followed by regular services from November 1. ANA has said it will fly the aircraft domestically on a trial basis before putting it on long international routes. The 787's two engines power electrical systems that operate flight controls and landing gear. U.S. aviation regulators required that Boeing satisfy extra steps before certifying that system because it was a new design.

Because the high-profile Dreamliner incorporates so many design and manufacturing firsts, the airplane is under increased scrutiny from the aviation community. The plane is about three years behind its original development schedule because of snags in the extensive global supply chain. Boeing departed from traditional use of reliable aluminum construction, opting instead for reinforced carbon composites to improve fuel savings. Many in the traveling public know the Dreamliner as the world's first plastic jet "Teething" problems are relatively common for a new jetliner entering service, but the 787 is under a lot of scrutiny due to its difficult development history," said Richard Aboulafia, an aerospace analyst at Teal Group. "This glitch shouldn't have any impact on customer perceptions of the 787, as long as Boeing aggressively pursues its investigation and implements any needed fix," Aboulafia said.

The incident comes days after a Boeing 767 landed on its belly in Warsaw after the landing gear failed to deploy. The wheels-up landing was hailed as a miraculous escape for the 230 people on board, but aviation experts say such incidents are relatively rare. There have been 10 accidents involving stuck landing wheels since 2000, none of them fatal, according to a database run by the Flight Safety Foundation.The landing gear for the 787 Dreamliner is made by Messier-Dowty.

Azhul takes delivery of the first ATR72-600

Brazilian carrier Azul Linhas today took delivery of the first ATR 72-600 regional turboprop aircraft. Fast-growing carrier Azul has placed orders for a total of 30 ATR 72-600s, with options an additional 10 aircraft. Azul was founded in December 2008, and in less than three years has developed an extensive network of 40 destinations throughout Brazil. In addition to its ATR 72s, Azul operates a jet fleet of Embraer 190s and 195s. With the delivery of the aircraft today, Azul Linhas  becomes one of the first operators of the newest generation ATR aircraft. With the introduction of its new fleet of ATR 72-600s, Azul will continue to support its growing national jet network with shorter haul regional routes. With its current fleet of 8 ATR 72s, Azul serves more cities within the economically vibrant state of Sao Paulo from its Campinas base than any other carrier.

Brazil has become in recent years a booming market for ATR, whose aircraft are optimally suited for the expansion of domestic short-haul routes due to their low operating and maintenance costs, up to 45% less than its competitors. The environmental friendliness of the ATRs, which produce up to 50% less CO2 than other regional aircraft, are also among the reasons for their popularity in Brazil. Today there are 50 ATR aircraft operating in Brazil, a figure expected to more than double within the next three years.  David Neeleman, Founder and Chairman of the Board of Azul, declared: “We are delighted to introduce the new ATR -600 series in Brazil and to be among the very first operators of the newest generation turboprops in the world. In addition to offering our passengers the highest standards of comfort, we are committed to making flying more accessible to Brazilian customers in terms of both frequency and cost. This aircraft fits this mission perfectly."

Filippo Bagnato, Chief Executive Officer of ATR, declared: “With the new ATR 72-600s, the Brazilian regional passengers will have the opportunity of experiencing the new ‘Armonia cabin’, which features the most advanced technologies in terms of comfort, including larger overhead bins and thinner seats with more legroom. Brazil is a very dynamic market and we are convinced that the performance of the ATRs, coupled with the high levels of comfort proposed to passengers, will continue providing us expansion opportunities across the country and in the whole Latin America”.

Qatar Airways to expand its cargo destinations in North America

Qatar Airways is boosting cargo services to North America, days after its Gulf rival Emirates outlined plans for new U.S. passenger routes. Qatar Airways said Sunday it will begin flying Boeing 777 freighters twice weekly to Atlanta and Houston and once a week to Toronto early next month. The flights will originate in the Qatari capital, Doha, and stop in Luxembourg, where freight carrier Cargolux is based. Qatar Airways bought a 35 per cent stake in Cargolux in June. Qatar Airways already runs a cargo route to Chicago and has passenger services to Montreal, Houston, New York and Washington.

Late last month, Dubai-based Emirates said it was expanding its U.S. service by adding nonstop flights to Dallas and Seattle next year.

Arik Air orders 2 Boeing 747-8 Intercontinental

Boeing and Nigeria's Arik Air today announced a deal for two 747-8 Intercontinental airplanes. The order is valued at $635 million at list prices and was previously attributed to an unidentified customer on Boeing's website. The order was announced during a signing ceremony at the Corporate Council for Africa's 8th Biennial U.S.-Africa Business Summit in Washington, D.C. "Air travel within the region continues to grow at a rapid pace and we must prepare our fleet to accommodate that growth," said Sir JIA Arumemi-Johnson, owner and chairman of Arik Air. "Boeing's new 747-8 fits perfectly into our long-term planning. It brings the best operating economics for its size, which is important with the increase in fuel prices."

Arik Air is Nigeria's fastest-growing privately owned airline operating a large fleet of Boeing Next-Generation 737s and serves more than 22 domestic, six regional and three long-haul routes. The airline plans to use the 747-8 on its key long-haul routes. "Arik Air is growing to become a leader in aviation in Africa and Boeing is happy Arik will use the 747-8 as a cornerstone of their future growth," said Van Rex Gallard, vice president of Sales for Africa, Latin America, and Caribbean, Boeing Commercial Airplanes. "With its unmatched operating costs and economics, the 747-8 is the right airplane to help Arik Air meet growing demand." The new 747-8 Intercontinental features a new wing design and an upgraded flight deck. The airplane interior incorporates features from the 787 Dreamliner including a new curved, upswept architecture that will give passengers a greater sense of space and comfort.

Using General Electric's GEnx-2B engines, the airplane will be quieter, produce lower emissions and achieve better fuel economy than any competing jetliner. It also increases cargo volume by 26 percent. "As we look into the future, the 747-8 Intercontinental is a must have for Arik Air," said Sir Arumemi-Johnson. "Our airline strives to bring the best, most efficient and most modern products to our customers and that is exactly what this airplane is."

Boeing delivers Soman Air's first B737-900ER

Boeing has delivered the first Next-Generation 737-900ER with the new Boeing Sky Interior to Tajikistan-based Somon Air, making it the first Central Asian carrier to operate an airplane featuring Boeing's innovative interior. The delivery is also Somon Air's first direct purchase of a 737. "This new interior will set Somon Air apart from other regional operators by bringing a new, unmatched flying experience to our valued customers," said Jamshed Rahmonberdiev, chief executive officer, Somon Capital, which owns Somon Air. "Reliability and fuel efficiency are key considerations and the 737-900ER will contribute to our financial performance as well as help us maintain our high standards of safety in accordance with international air transportation standards."

"We congratulate Somon Air on becoming the first carrier in Central Asia to offer the enhanced 737 cabin experience to its passengers," said Marty Bentrott, vice president of Sales for Middle East, Russia and Central Asia, Boeing Commercial Airplanes. "We look forward to playing a role in Somon's future as it continues to expand its network." The Boeing 737-900ER is the newest member of the Next-Generation 737 airplane family and is also the highest capacity, longest-range airplane in Boeing's single-aisle fleet. The 737 Boeing Sky Interior takes the passenger experience to a whole new level with new overhead bins, LED lighting, new designs for window reveals and sculpted sidewalls.

As part of Boeing's Humanitarian Delivery Flights program, Boeing partnered with Somon Air, the U.S. Department of State's Humanitarian Program and Project HOPE to transport medical supplies to the country's capital Dushanbe. The relief shipment of 2,852 pounds of medical supplies will improve the quality of medical care for the less-privileged in Tajikistan and help alleviate the shortage of medicines needed for oncology, psychiatric health and in the treatment of infectious diseases. "Boeing, through its Global Corporate Citizenship (GCC) organization, supports humanitarian efforts around the world in partnership with nongovernmental agencies and non-profits like Project HOPE," said Liz Warman, director of GCC for the Northwest Region. "Our Humanitarian Delivery Flights program is another way we can continue leveraging our resources to help those in need."

UTair finalizes orders with Boeing

Boeing and UTair Aviation, Russia have signed an order for 40 Boeing Next-Generation 737 airplanes, comprised of seven 737-900ERs and 33 737-800s. The agreement was previously announced at the 2011 Paris Air Show. The order is valued at $3.8 billion at list prices. "UTair is a wonderful business partner with Boeing. We are truly proud of the airline's history and accomplishments in Russian commercial aviation. The Next-Generation 737s with the Boeing Sky Interior will enhance their network and customer appeal for both domestic and international routes," said Marty Bentrott, vice president of Sales for Russia, Central Asia and Middle East, Boeing Commercial Airplanes. All 40 UTair airplanes will be delivered with the new interior that offers unprecedented passenger appeal and comfort with such features as spacious cabin headroom, overhead bins that disappear into the ceiling yet carry more bags and LED lighting that brings any color into the cabin.

Emirates SkyCargo adds new destination in far East and Australia

Emirates SkyCargo, the freight division of Emirates Airline, yesterday celebrated the inaugural service on its new Far East and Australasia freighter route. The weekly air cargo service, operated by its new Boeing 777 freighter, will fly Dubai-Singapore-Sydney-Hong Kong-Dubai, providing the key trading points with additional connectivity to Emirates' Dubai hub, which can link businesses to the 114 destinations on the carrier's network.

The Boeing 777F - which touched down for the first time in Sydney on 12th September - has the capability to carry up to 103 tonnes of freight. "This new route not only bolsters capacity, it provides our customers with more options and increased trade opportunities," said Hiran Perera, Emirates' SVP Cargo Planning & Freighters. "We currently transport cargo in the belly-hold of 126 passenger flights a week between Dubai and Australia, as well 28 Hong Kong flights and 42 Singapore flights, and the freighter - with a wide main deck door - will increase our ability to carry oversized shipments," added Perera. "This takes our import capacity to Australia to 1370 tonnes per week and, in these uncertain economic conditions, is further testament of our commitment to facilitating international trade for businesses in the region."

The inaugural fligh - which carried 100 tonnes of cargo, including medical equipment, diagnostics, spare parts, textiles and clothing - was met by Greg Johnson, Emirates' Cargo Manager Australia, and Alex Barkway, Emirates' Cargo Manager New South Wales. "The addition of a dedicated freighter service is a major milestone in Emirates SkyCargo's growth in Australia, and offers new possibilities for expansion into other areas of air cargo transport," said Johnson. "With the high Australian dollar driving up imports, this new flight will also provide us with much needed additional capacity into the market."

EK9920 will depart Dubai every Sunday at 20:35 and touch down in Singapore at 07:55 the following day. The B777F will then depart at 09:00 and complete its outbound journey at 18:30 when it touches down at Sydney International Airport. The return service, EK 9921, will depart Sydney every Monday at 21:30 and land in Hong Kong at 04:35 on Tuesday. Departing Hong Kong at 07:35 as EK 9865, the service will then terminate in Dubai at 10:35. With a long-range flying capacity and technologically advanced General Electric (GE) engines, the Boeing 777F provides greater flexibility than any other freighter aircraft currently in operation. It maintains the lowest fuel burn of any comparable sized aircraft, consuming nearly 18 per cent less fuel than today's freighters.

Emirates SkyCargo introduced its first Boeing 777F in March 2009. In December 2010, it operated its longest ever non-stop flight on the Boeing 777F; 17.5 hours from Sydney to New York. Emirates is the largest operator of Boeing 777 aircraft in the world, with 91 in its fleet currently.

Dreamliner becomes a reality

Boeing delivered its first 787 jet on Sunday. It's been a long time coming. The new jet, which was supposed to be flying passengers three years ago, has been delayed by production and design problems. But now it's here, and airlines expect it to offer travelers much more comfort, open up new routes and provide significant fuel savings. The first one goes to Japan's All Nippon Airways, which has been printing the 787 logo and "We Fly 1st" on its business cards for years. Airlines love the jet, which Boeing calls the Dreamliner. They've ordered more than 800, well above levels for previous new jets. "A lot of carriers are betting that this is going to be a winner," says George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Va.

Instead of the usual aluminum skin, most of the 787 is covered in carbon fiber, basically a high-tech plastic that is strong but lightweight. Military planes and portions of other jetliners have used that material for years, but this is the first time so much has been used on an airliner. The new material brings improvements that passengers should notice. Its strength allows windows to be bigger and higher, so passengers don't have to hunch over to see the horizon. Electronic dimming replaces pull-down shades. That should mean you'll no longer be blinded when the guy next to you falls asleep with the shade up. Finally, the cabin is pressurized to the equivalent of 6,000 feet, instead of the usual 8,000 feet. That means air pressure will be closer to what passengers are used to on the ground. And without corrosion-prone aluminum skin, the humidity can be kept higher. Those two changes should reduce dry noses and throats.

All Nippon plans to begin flying the 787 from Tokyo to Okayama-Hiroshima on Nov. 11. The first international route will be Tokyo to Frankfurt starting in January. The first US customer is United Continental Holdings Inc., which will get its first 787s next year and plans to fly them between Houston and Auckland, New Zealand, and Houston and Lagos, Nigeria. Those are good examples of "thin routes" that airlines say the 787 will be good for - routes for which there is regular demand that won't fill a larger plane. The 787's size, fuel efficiency and long range should allow airlines to turn a profit on those routes. The jet will be as much as 20 percent more fuel-efficient than planes it replaces. Its efficiency was a nice perk when Boeing first proposed the 787 in its current form in 2003. Now it's essential for airlines dealing with high fuel costs.

Building an all-new plane like the 787 is a massive undertaking. Delays stacked up. Boeing was hit with an eight-week strike in 2008. It had to reinforce the spot where the 787's wings meet the fuselage. In November, the company had to delay the plane further after an electrical fire forced a landing during a test flight. Boeing expects to deliver a combined 25 to 30 of the 787s and new 747-8 this year. To meet the high demand. Boeing has set an ambitious goal of building 10 per month by the end of 2013. No one has ever made a large plane that fast. Richard Aboulafia, an aerospace analyst at the Teal Group, thinks Boeing will miss that goal because the company hasn't smoothed out its production process fully. It's also not clear when the 787 will make money. Boeing already took a $2.5 billion charge in 2009 on the program, and it owes additional money to customers for the late deliveries. Boeing executives have said they will announce when the jet will be profitable after the first one is delivered.

The 787 list price runs between $185 million and $218 million. Discounts on new jets are common, though. Aboulafia says it's not clear how steep the discounts offered by Boeing were to lock in all the orders. Boeing rival Airbus hopes to soon launch its new A350, also made with a significant amount of carbon composites. A successful 787 will put pressure on Airbus to meet its fuel-efficiency goals, and to deliver the plane on time.

Airbus sees Asia as recession buffer

Demand for new planes from China and Asia will provide Airbus with a buffer for growth in the event of a global recession resulting from Europe's debt crisis, the company's chief operating officer said on Thursday.  "So far we have 1,000 net orders (from Europe) at the end of August and the air traffic is still good," Fabrice Bregier said.  "However, we might well expect some adjustments in the future. This is very different from 2008-2009. In this case we see a problem of some European states with excessive debt but the real economy is very good," he said on the sidelines of the World Economic Forum in Dalian.  The euro area debt crisis has contributed to increasing concerns in financial markets that the world economy could slip into another recession. Bregier said it may be a "challenge" to avoid another recession that would bring about less air.

Demand for new planes from China and Asia will provide Airbus with a buffer for growth in the event of a global recession resulting from Europe's debt crisis, the company's chief operating officer said on Thursday. "So far we have 1,000 net orders (from Europe) at the end of August and the air traffic is still good," Fabrice Bregier said. "However, we might well expect some adjustments in the future. This is very different from 2008-2009. In this case we see a problem of some European states with excessive debt but the real economy is very good," he said on the sidelines of the World Economic Forum in Dalian.

The euro area debt crisis has contributed to increasing concerns in financial markets that the world economy could slip into another recession.
Bregier said it may be a "challenge" to avoid another recession that would bring about less air traffic and slower growth for airlines. But he said he expected growth in Asia and especially China to provide a suitable growth buffer for Airbus. "If there is a big recession there will be less traffic and so the airlines will not generate the cash to buy new aircraft," Bregier said. "Now we are in the global market, so we don't sell exclusively to Europe or America and in our order book our biggest share comes from Asia, and China plays a big role."
Bregier said Airbus will deliver its first superjumbo to mainland carrier China Southern Airlines in a few weeks and the aircraft will be operational in November.

Boeing said on September 7 that China will need 5,000 commercial aircraft worth USD$600 billion over the next 20 years, a 25 percent increase on the company's previous estimate. Airbus, which currently has a 45 percent market share in China, is due to publish its global forecasts on September 20. Bregier said the firm's market share in China will exceed 50 percent in the next few years.
"We plan to deliver about 90 aircraft in China next year and about 100 this year," he said. In June, China placed an order for 88 Airbus A320 planes putting aside a bubbling trade row with Europe over a proposed emissions scheme as it sought to fuel economic growth. The deal, worth USD$7.5 billion at list price and with deliveries scheduled for 2012-15, was signed by China Aviation Supplies and Industrial Commercial Bank of China.

Although China plans to start competing with Airbus and Boeing by building its own narrow-body passenger jets from the second half of this decade, it has ordered large numbers of Airbus A320s and Boeing 737s to feed traffic growth.
Airbus began assembling planes for the Chinese market at a factory in Tianjin, outside Beijing, in 2009. Bregier said he expects to make inroads into the China market with sales of the A380 superjumbo aircraft. "I think they (other Chinese airlines) will be very interested in A380s when they see the success of China Southern... We expect other top players in China to progressively order A380s," he said. "The trend is clear, China will need bigger aircraft in the future and so we think with the A380, we really have a trump".traffic and slower growth for airlines. But he said he expected growth in Asia and especially China to provide a suitable growth buffer for Airbus. "If there is a big recession there will be less traffic and so the airlines will not generate the cash to buy new aircraft," Bregier said. "Now we are in the global market, so we don't sell exclusively to Europe or America and in our order book our biggest share comes from Asia, and China plays a big role."

Bregier said Airbus will deliver its first superjumbo to mainland carrier China Southern Airlines in a few weeks and the aircraft will be operational in November.  Boeing said on September 7 that China will need 5,000 commercial aircraft worth USD$600 billion over the next 20 years, a 25 percent increase on the company's previous estimate. Airbus, which currently has a 45 percent market share in China, is due to publish its global forecasts on September 20. Bregier said the firm's market share in China will exceed 50 percent in the next few years.  "We plan to deliver about 90 aircraft in China next year and about 100 this year," he said. In June, China placed an order for 88 Airbus A320 planes putting aside a bubbling trade row with Europe over a proposed emissions scheme as it sought to fuel economic growth.

The deal, worth USD$7.5 billion at list price and with deliveries scheduled for 2012-15, was signed by China Aviation Supplies and Industrial Commercial Bank of China. Although China plans to start competing with Airbus and Boeing by building its own narrow-body passenger jets from the second half of this decade, it has ordered large numbers of Airbus A320s and Boeing 737s to feed traffic growth. Airbus began assembling planes for the Chinese market at a factory in Tianjin, outside Beijing, in 2009. Bregier said he expects to make inroads into the China market with sales of the A380 superjumbo aircraft. "I think they (other Chinese airlines) will be very interested in A380s when they see the success of China Southern... We expect other top players in China to progressively order A380s," he said. "The trend is clear, China will need bigger aircraft in the future and so we think with the A380, we really have a trump".

AirFrance-KLM splits orders worth $12 billion between Airbus and Boeing

Air France-KLM has split a $12 billion order for long-range jets following a year-long competition, announcing plans to buy 25 Boeing 787 Dreamliners and 25 Airbus A350s. The move is part of a plan to renew the fleet of Europe's largest airline and the order could rise to 110 of the next-generation aircraft including 60 more options. EADS unit Airbus said it expected to receive 35 of these. Air France-KLM shares opened up more than 1 percent before slipping 0.5 percent to 6.035 euros by 4:26 a.m. ET. Shares in Airbus parent EADS were down 1.1 percent.

The deal follows months of politically sensitive negotiations during which the airline appeared to be pulled between pressure from French politicians to protect jobs at Toulouse-based Airbus and its own differences with Airbus over what caused the 2009 mid-Atlantic crash of an Airbus jet. The airline believes pilots have been wrongly blamed. Air France-KLM has said it ignored calls from French politicians to favor Airbus, but in a sign of frosty relations it snubbed the usual practice of endorsing the Airbus part of the deal in the planemaker's press release.

Boeing is delivering its first 787 Dreamliner to Japanese airline All Nippon Airways next week after three years of production delays as it switched from aluminum to lightweight carbon composites. Airbus plans to deliver its similar A350 mid-decade after earlier delays in the design. Air France-KLM said it aimed to operate 73 of the 250-300 seat aircraft through 2024, including 43 Airbus A350-900 and 30 Boeing 787-9 models. The first Boeing 787-9 will enter into service with KLM in 2016, and the first Airbus A350-900 with Air France in 2018. "Later, both airlines will operate both types of aircraft," the carrier said in a statement. The airlines merged in 2004 but maintain separate networks.

Final details of the order are still being negotiated. The firm part of the order for 50 aircraft is worth $6.7 billion to Airbus and $5.5 billion to Boeing, according to list prices. Airlines usually obtain significant discounts. Air France-KLM indicated in June it would follow United Airlines in splitting the order for the new generation of aircraft between Airbus and Boeing. The plane order guarantees business for Britain's Rolls-Royce (LSE:RR.L - News) to provide power for the A350-900, for which it makes the only engines currently on offer. But industry sources say rival General Electric is front-runner to power the Boeing 787s, for which it competes with Rolls-Royce. Air France traditionally buys long-range engines from the U.S. company.

FedEx may buy more freighters

FedEx Corp may buy about 50 wide-body freighters from Boeing Co. and Airbus to update its cargo airline fleet, an industry source familiar with the matter said on Thursday. FedEx is considering Boeing's 767, which lists at $167.7 million, and Airbus's A330, which lists at $203.6 million, according to the source. Memphis, Tennessee-based FedEx runs the world's largest cargo airline and No. 2 package delivery company. Its potential freighter purchases were first reported on Wednesday by Bloomberg.

FedEx has been updating its fleet to add more fuel-efficient aircraft. "As a matter of policy, we don't discuss market rumors or speculation," FedEx spokesman Jim McCluskey said on Thursday. Airbus declined to comment, and Boeing had no immediate comment. According to the company's website, the FedEx Express division has 688 aircraft made by various companies, including Boeing and Airbus. FedEx shares were off 1.5 percent at $75.01 in midafternoon trading.

Gol set to buy rival Webjet

Brazil's No. 2 airline, Gol, confirmed on Friday it plans to buy smaller rival Webjet for BRR96 million reais (USD$61.4 million), the latest consolidation in the booming Latin American airline sector. Gol Linhas Aereas will complete the transaction to buy 100 percent of Webjet through its Varig subsidiary. Webjet has been valued at BRR311 million reais, much more than the deal price. The filing did not explain why the price was less than a third of Webjet's estimated worth, or whether Gol would assume any debt as part of the deal. Gol said the deal's completion still depended on legal and technical audits of Webjet and the approval of government authorities. It said it would provide more details on July 11.

A source said earlier on Friday that lawyers representing the Constantino family -- Gol's majority shareholders -- and Webjet's biggest shareholder, Guilherme Paulus, had been finalising the terms. The takeover underscores Gol's efforts to expand capacity to meet growing demand as more Brazilians use air travel as household incomes increase. Webjet operates 154 daily flights to 14 Brazilian destinations, including the country's largest cities, while Gol operates around 900 flights per day. Webjet's Paulus sold a controlling stake in his tourism company, CVC, last year to buyout firm Carlyle Group in a deal valued at USD$300 million at the time. He refused to include Webjet because he expected better offers from other parties, people familiar with the situation said at the time.

The potential alliance comes as Gol faces increased competition from a handful of relatively new carriers in Brazil which, like Webjet, target routes largely underserved by Gol and its largest rival TAM. TAM and start-up TRIP signed a letter of intent in March to explore a potential "strategic alliance" that would complement their existing codeshare agreement. Brazil's No. 2 airline, Gol, confirmed on Friday it plans to buy smaller rival Webjet for BRR96 million reais (USD$61.4 million), the latest consolidation in the booming Latin American airline sector.

Gol Linhas Aereas will complete the transaction to buy 100 percent of Webjet through its Varig subsidiary. Webjet has been valued at BRR311 million reais, much more than the deal price. The filing did not explain why the price was less than a third of Webjet's estimated worth, or whether Gol would assume any debt as part of the deal. Gol said the deal's completion still depended on legal and technical audits of Webjet and the approval of government authorities. It said it would provide more details on July 11. A source said earlier on Friday that lawyers representing the Constantino family -- Gol's majority shareholders -- and Webjet's biggest shareholder, Guilherme Paulus, had been finalising the terms.
The takeover underscores Gol's efforts to expand capacity to meet growing demand as more Brazilians use air travel as household incomes increase.
Webjet operates 154 daily flights to 14 Brazilian destinations, including the country's largest cities, while Gol operates around 900 flights per day.
Webjet's Paulus sold a controlling stake in his tourism company, CVC, last year to buyout firm Carlyle Group in a deal valued at USD$300 million at the time. He refused to include Webjet because he expected better offers from other parties, people familiar with the situation said at the time.
The potential alliance comes as Gol faces increased competition from a handful of relatively new carriers in Brazil which, like Webjet, target routes largely underserved by Gol and its largest rival TAM.

TAM and start-up TRIP signed a letter of intent in March to explore a potential "strategic alliance" that would complement their existing codeshare agreement. Webjet is Brazil's fourth largest carrier, while TRIP is the sixth biggest.
TAM plans to merge with Chilean carrier LAN Airlines, which could create Latin America's largest airline. The deal is pending approval by Chilean authorities.
Webjet is Brazil's fourth largest carrier, while TRIP is the sixth biggest. TAM plans to merge with Chilean carrier LAN Airlines, which could create Latin America's largest airline. The deal is pending approval by Chilean authorities.

AirAsia extend Airbus order by another 100 A320neo

AirAsia will buy an extra 100 Airbus A320neo jets, taking its record-breaking order to 300 planes, a source said, a deal that would make the Malaysia-based low-cost airline one of the world's largest carriers. AirAsia and Airbus announced an USD$18.2 billion deal for 200 planes at the Paris Air Show last month, shattering aviation records for the largest ever airline order. The additional order takes the list price of the contract to a staggering USD$27 billion. The bumper order highlights Airbus's growing lead over Boeing and throws the spotlight on AirAsia's aggressive growth plans at a time when high oil prices and an uncertain global economy are clouding the outlook for travel demand. Analysts expect the extended order to drive AirAsia's expansion as it competes with short-haul carriers such as India's IndiGo, Singapore's Tiger Airways and Australia's Jetstar in the Asia-Pacific region, the fastest growing in the world. "AirAsia's last replacement order was in 2007/2008. These new orders are long overdue so it's not an aggressive order," said Kunal Sinha, an aerospace expert with the Frost & Sullivan consultancy. "AirAsia's new fleet is to be used mostly to link Southeast Asia to India and China. By 2015, Southeast Asia will have open skies so you have to have a growth plan."

Boeing on Wednesday said it expected 33,500 new planes to be delivered by 2030, driven by growth in India and elsewhere in Asia. AirAsia plans to list its operations in Thailand and Indonesia this year as it expands in those markets and is in talks to open a hub in Singapore, its chief executive Tony Fernandes has said. Like the previous order, the additional 100 planes would also use CFM International engines, the source with direct knowledge of the deal said, declining to be identified because the deal is not public yet. The source said AirAsia would receive a discount for the entire order, but did not give further details. AirAsia's regional head for corporate finance and treasury Aireen Omar said, "We ordered 200 and so far there are no changes." An Airbus spokesman said the manufacturer would not comment on commercial discussions with customers that were confidential. AirAsia, which flies to 63 destinations in more than 20 countries, has 90 planes currently, almost all single-aisle Airbus A320s. Besides the 300 Airbus A320neo deal, it has another 75 Airbus aircraft already on order. "Though we look aggressive, we have expanded very cautiously," Fernandes said this week. "But I have always said this airline is worth at least 500 aircraft."

According to International Air Transport Association (IATA) data, United Continental had the largest passenger fleet of 737 planes at the end of 2010, followed by Delta Air Lines with 722, American Airlines with 618 and Lufthansa with 427. Non-IATA member Southwest Airlines, the only low-cost carrier currently in the top five, has around 550 planes. "AirAsia had the first-mover advantage and it continues to stay ahead of the game by ordering fuel-efficient planes and keeping the size growing," said an aviation analyst with a Malaysian investment bank who declined to be identified due to company policy. "But the key risk is if expansion plans do not succeed. The Malaysian base is fairly saturated so if the other markets do not grow or cannot take off because of protectionism or other factors, then they will find themselves having to manage a lot of aircraft," the analyst said.

Fernandes said the A320neo purchases would be funded by debt and cash flow as staggered deliveries begin in 2016. "We're buying the planes now, we don't pay for it all now. They become due in 2016 so we're just paying some deposits now which is not erroneous at all to our balance sheet." The A320neo is a version of Airbus's best-selling 150-seat passenger jet offering fuel savings with new engines from 2015. The huge orders for the single-aisle plane at the Paris Air Show have piled pressure on rival Boeing to come up with a newer version of its 737 workhorse. Fernandes said his airline's growth was closely twinned with Airbus. "We have a fantastic relationship with Airbus," he said. "They are much more than just suppliers to us. I credit them tremendously with our growth and I want to be more than just a customer of theirs."

It is now part of aviation industry lore that Fernandes asked Airbus chief salesman Joe Leahy to come on to the dance floor of a Paris nightclub before signing the A320neo deal. "As part of a family we do some crazy things together," the 47-year-old Malaysian millionaire said. Asian budget airlines placed a record USD$42 billion in plane orders during the Paris Air Show, illustrating their high expectations for travel in the world's fastest growing market and also triggering worries some may not survive. Many of the no-frills carriers such as AirAsia and Indigo aim to more than double their fleets to power rapid growth, partly at the expense of full-service airlines such as Cathay Pacific and Singapore Airlines. Worldwide passenger demand is expected to rise 4.4 percent over the next year with the Asia-Pacific region growing faster at 6.4 percent, according to IATA, which represents the majority of airlines operating in the USD$598 billion industry. The Centre for Asia Pacific Aviation, an independent aviation market research provider, said low-cost carriers accounted for 16 percent of the market in terms of seats within Asia Pacific last year, up from 6 percent in 2005. Their market share is set to rise 2 percentage points annually to about 26 percent in 2015, it said.

Passenger Jet crashes in Congo

An airliner plowed into dense forest as it tried to land during a rainstorm in the Democratic Republic of Congo on Friday, killing 127 people on board, the Congolese transport ministry said.  There were 51 survivors, a ministry statement said. The chief executive of the airline involved in the crash told Reuters earlier that there had been 110 people on board the plane, of whom 53 had died and 57 survived. But a spokesman for the transport ministry, Gudile Bualya, accused the airline of underestimating the number of passengers.

The accident at the international airport of Kisangani, a commercial center and river port town in the east, is the latest in a string of disasters in the vast central African country which has saddled it with one of the worst air safety records in the world. "The pilot tried to land but apparently they didn't touch the runway," Stavros Papaioannou, chief executive of Hewa Bora airline, told Reuters by telephone. Hewa Bora is on a European Union list of airlines banned due to security concerns, as are all carriers certified in Congo. It is the second fatal accident involving the airline in three years, after its DC-9 airliner plowed into a suburb of the eastern Congolese city of Goma, killing 44, in 2008.

Earlier, government spokesman Lambert Mende said rescue services had pulled 40 survivors from the Boeing 727. Jean-Paul Bongisa, a local reporter for Congolese state television at the scene of the crash, told Reuters the rescue was being hampered by difficulties in reaching the wreckage, some 200 meters (yards) from the runway in dense equatorial forest. Congo is roughly the same size as Western Europe but rail and road links through its jungles are few, so air and river travel are usually the only viable options for long distance journeys. In April, 32 people were killed when a U.N. plane crashed as it tried to land at the airport serving Congo's capital Kinshasa. The operator of the plane was Georgian flag carrier Airzena Georgian Airways. According to Hewa Bora's website, the airline has two Boeing 727s, both configured as passenger planes with 137 economy seats and 12 business class seats. They fly purely within Congo. Once the world's best-selling airliner, the Boeing 727 first flew in 1963 and was designed for short- and medium-haul routes. The last aircraft was delivered in 1984.

China signs for 88 new Airbus 320 aircrafts

China placed an order for 88 Airbus A320 planes on Tuesday, putting a bubbling trade row with Europe over a proposed emissions scheme aside as it tries to to fuel economic growth. Airbus said on Tuesday it had signed the deal with China Aviation Supplies and Industrial Commerce Bank of China. The deal, worth USD$7.5 billion at list prices and with deliveries scheduled for 2012-15, was signed by Airbus president Tom Enders and CAS President Li Hai during a visit to Germany by Chinese Premier Wen Jiabao. The visit came days after industry sources said China had delayed the high-profile announcement of a USD$3.8 billion order for 10 Airbus A380 superjumbo jets at the Paris Air Show to protest over European Union emissions trading rules. Under plans to include international aviation in its carbon market from next year, the EU would require all airlines flying to Europe to buy permits for each tonne of carbon dioxide they emit above a certain cap.

While China continues to put the brakes on lucrative orders of European wide-body aircraft, industry analysts said it seemed as though China was pulling back from a full-blown trade spat to protect economic growth. Although it plans to start competing with Airbus and Boeing by building its own narrow-body passenger jets from the second half of this decade, China is still ordering large volumes of Airbus A320s and Boeing 737s to feed huge traffic growth. Ordering A320s is also in the country's interest as Airbus began assembling planes for the Chinese market at a factory in Tianjin, outside Beijing, in 2009. While China typically schedules aircraft orders to coincide with political visits, the deals can be difficult to break down. In November 2010, China and France announced 102 Airbus orders during a visit to Paris by President Hu Jintao, but the manufacturer said only 66 involved new contracts. In January, China announced final approval for 200 Boeing aircraft worth USD$19 billion in a boost for President Barack Obama as Hu visited the United States. Again, analysts said the deals had been in the works and accounted for by investors for some time.

Tuesday's orders were all new and firm, Airbus claimed.

More Pilots and Mechanics needed - Boeing

The world’s commercial airlines will need 460,000 new pilots and 650,000 new maintenance technicians by 2030, Boeing predicted Wednesday.
“Clearly, the sheer size of this vital pipeline is staggering,” Sherry Carbary, vice president, Boeing Flight Services, said in a news release. “To meet the demand for capable, well-trained people, Boeing and the aviation industry need to move with the speed of technology to provide the tools, training and work environment that tech-savvy pilots and technicians will expect from us.”
The demand amounts to an average of 23,000 new pilots and 32,500 new technicians per year to account for growth and retirements.
The Asia Pacific region alone will need 182,300 pilots, 72,700 of them in China, and 247,400 technicians, 108,300 in China. Here’s projected demand in other regions:

• North America – 82,800 pilots and 134,800 technicians;
• Europe – 92,500 pilots and 129,600 technicians;
• Africa – 14,300 pilots and 19,200 technicians;
• Middle East – 36,600 pilots and 53,000 technicians;
• Latin America – 41,200 pilots and 52,500 technicians;
• Russia and the Commonwealth of Independent States – 9,900 pilots and 13,500 technicians.

Paris air show aircraft orders' list

The orders confirmed by Airbus and Boeing as it stands at Paris air show.

Company Firm Value Provisional Value

Airbus 312 $30.2 bln 318 $29.5 bln

Boeing 47 $7.5 bln 94 $14.9 bln



Last year at Farnborough Airshow, Airbus unveiled net new orders for 130 planes worth over $13 billion, and Boeing 103 new orders worth over $10 billion.

Between them, they racked up a combined 176 provisional orders worth over $19 billion



AIRBUS ORDERS BY CUSTOMER:
FIRM ORDERS

Company No of aircraft Type Value

LAN 20 A320neo $1.8 bln

IndiGo 30 A320 $2.5 bln

IndiGo 150 A320neo $13.7 bln

TransAsia 6 A321neo $0.6 bln

Air Lease Corp 11 A330 $2.4 bln

Air Lease Corp 1 A321 $0.1 bln

SAS 30 A320neo $2.7 bln

GECAS 60 A320neo $5.5 bln

Saudi Arabian 4 A330 $0.9 bln



PROVISIONAL ORDERS

Company No of aircraft Type Value

Alafco 30 A320neo $2.7 bln

Republic 40 A320neo $3.6 bln

Republic 40 A319neo $3.4 bln

Avianca 18 A320 $1.5 bln

Avianca 33 A320neo $3.0 bln

Alafco 6 A350-900 $1.6 bln

Garuda 15 A320 $1.3 bln

Garuda 10 A320neo $0.9 bln

JetBlue 40 A320neo $3.6 bln

CIT 50 A320neo $4.6 bln

Air Lease Corp 36 A320neo $3.3 bln



BOEING ORDERS BY CUSTOMER:

FIRM ORDERS

Company No of aircraft Type Value

*Malaysian 10 737-800 $0.8 bln

*Aeroflot 8 777-300ER $2.3 bln

Norwegian 3 787 $0.6 bln

Norwegian 15 737-800 $1.2 bln

Mongolian 1 767-300ER $0.16bln

Mongolian 2 737-800 $0.16bln

Unidentified 2 747-8 $0.6 bln

*Qatar Airways 6 777-300ER $1.7 bln * - orders were previously in Boeing order book but customer was unidentified



PROVISIONAL ORDERS

Company No of aircraft Type Value

UTair Aviation 7 737-900ER $0.6 bln

UTair Aviation 33 737-800 $2.7 bln

GECAS 8 777-300ER $2.3 bln

GECAS 2 747-8F $0.6 bln

Unidentified 15 747-8 $4.8 bln

Air Lease Corp 20 737 $1.6 bln

Air Lease Corp 5 777 $1.4 bln

Air Lease Corp 4 787-9 $0.9 bln

Boeing bags an additional 10 B737-800NG order from Malaysian Airlines

Boeing and Kuala Lumpur-based Malaysia Airlines today announced the airline has exercised an option to purchase 10 additional Next-Generation 737-800s. The order is valued at more than $800 million at current list prices. The airline still has purchase rights for an additional 10 Next-Generation 737-800s remaining from their initial 2008 contract. Today's announcement was made at the Paris Air Show by Boeing Commercial Airplanes Vice President of Sales & Marketing Marlin Dailey and Malaysia Airlines Managing Director & Chief Executive Officer, Tengku Dato' Sri Azmil Zahruddin Raja Abdul Aziz. His Excellency Tan Sri Abdul Aziz Zainal, the Malaysian Ambassador to France, was also in Paris for the signing ceremony. "Today we celebrate Malaysia Airlines as key member of the Next-Generation 737 family of operators and we welcome this occasion to strengthen our long-term relationship with a valued partner," Dailey said. "The selection of the Next-Generation 737 to support the airline's strategic fleet modernization plan reinforces the superior economics of the most fuel efficient single-aisle airplane operating in today's market."

Malaysia's 737s are the first in Asia to sport the passenger-pleasing Boeing Sky Interior and are fitted with Blended Winglets, which improve fuel efficiency by up to four percent, increase flying range, and reduce CO2 emissions and takeoff noise. "The option we exercised today marks another step in Malaysia Airlines' mission to strengthen and build upon the airline's award-winning service and passenger value, efforts that support the company's business transformation strategy to profitable operation," said Tengku Azmil. "Boeing's Next-Generation 737, with its economic advantages, including unmatched fuel efficiency, is the right airplane to support our business and our customers." The digitally designed Next-Generation 737 is the most technologically advanced airplane family in the single-aisle market. The 737-800, which can seat up to 189 passengers, is 771 kilograms (1,700 pounds) lighter, can fly 583 kilometers (315 nautical miles) farther while carrying 12 more passengers than the competing model. Malaysia Airlines, with a 64-year history as the national carrier of Malaysia, operates a mixed fleet of short- and long-haul airplanes, including 747 passenger and freighter, 777, 737-800s and Classic 737 airplanes. The airline flies nearly 45,000 passengers daily to more than 100 destinations worldwide.

Yet another Tupolev crashes in Russia

A passenger jet crashed in heavy fog and burst into flames late Monday on a highway in north-western Russia, just short of a runway whose fog lights had failed, killing 44 people, officials said. Eight people survived the crash. The Tu-134 plane, belonging to the RusAir airline, was en route from Moscow to the city of Petrozavodsk, an Emergencies Ministry spokeswoman, Oksana Semyonova, told The Associated Press. Her ministry said in a website statement that 44 people were killed. Eight survivors, including a 10-year-old boy and a female flight attendant, were hospitalized in critical condition in Petrozavodsk.

Semyonova said the plane went down on its final approach to the airport in Petrozavodsk, making a crash landing one to two kilometres (about a mile) short of the runway, breaking apart and then bursting into flames. It was unclear if the plane had attempted to land on the road, or just happened to fall there, she said. Petrozavodsk is in Karelia province, near the Finnish border, about 400 miles (640 kilometres) northwest of Moscow. Authorities had no immediate explanation for the accident, but the Interfax news agency quoted the airport director Alexei Kuzmitsky as saying there were "unfavourable weather conditions." Compounding the pilot's troubles was the failure of the runway's high-intensity illumination, which is supposed to be deployed at times of low visibility, Alexei Morozov, deputy head of the Interstate Aviation Committee, told the ITAR-Tass news agency.

A RusAir representative who declined to give his name told The Associated Press that the plane was in good working order and that the weather conditions, although tricky, "weren't critical." The Tupolev 134, along with its larger sibling the Tu-154, has been the workhorse of Soviet and Russian civil aviation since the 1960s. The model that crashed was built in 1980, had a 68-person capacity and a range of about 2,000 kilometres (1,240 miles). Photographs on the ministry website showed fragments of metal strewn across a road as thick fog hung over woodland in the background. A landing gear jutting out from the ground was the only recognizable plane part. The plane was carrying 52 people, including nine crew members, Semyonova said. Russian news agencies said Russian Premier League soccer referee Vladimir Pettay and a Swedish citizen were among the victims.

The Karelia branch of the Emergencies Ministry said radio contact with the pilot was lost at 11:40 p.m. local time (7:30 p.m. EDT, 1940 GMT). The black box flight data recorders have been recovered, the news agencies said. The accident occurred on the eve of Prime Minister Vladimir Putin's planned appearance Tuesday at the Paris Air Show to support dozens of Russian firms seeking sales contracts. Russia and the other former Soviet republics have some of the world's worst air traffic safety records, according to the International Air Transport Association. Experts blame weak government controls, poor pilot training and a cost-cutting mentality for the poor safety record, leading to emergency landings being reported with alarming regularity. Polish President Lech Kaczynski was among 96 people killed when his Tu-154 crashed in heavy fog while trying to land near the western city of Smolensk in April 2010. In 2006, three crashes - two in Russia and one in Ukraine - killed more than 400 people.

Big orders help AirBus

Airbus said on Monday it had won an order for 60 narrow-body A320neo planes worth $5.1 billion at list prices from the commercial aircraft leasing and financing arm of General Electric. Analysts expect narrow-body planes, the backbone of fast-growing budget airlines, to be a key battleground for orders between Europe's Airbus and U.S. rival Boeing at the biennial air show. Airbus believes it has the upper hand with the A320neo, whose more efficient engines save airlines 15 percent in fuel costs, according to the company. Engine maker Pratt & Whitney boss David Hess said on Monday he expected an astounding amount of demand for the A320neo. Sources close to the matter said Airbus was also likely to report an order on Monday for 30 A320neos worth about $2.4 billion at list prices from Scandinavian airline SAS.

Qatar Airways said it hoped to conclude a deal this week to buy A320neo planes as well. Boeing conceded it might lose some customers while it makes a decision about whether to re-engine or redesign its competing 737 narrow-body plane, although it was confident of winning out over the longer term. It also upstaged Airbus with successes in other plane sizes and booked the first big order of the show for six 777-300ER wide-body jets worth $1.7 billion at list prices from Gulf carrier Qatar Airways. Analysts expect Middle Eastern and Asian airlines to dominate the buying as they seek to boost transport links for their booming economies. The Boeing deal came a day after Airbus unveiled plans to boost the range of its future competing A350, of which Qatar is the biggest customer.

Paris air show - orders soar

Airbus faced the unexpected and daunting task on Monday of delivering a marketing blow to rival Boeing and maintaining momentum for a revamped jet with its two flagship planes grounded at the Paris Air Show. The European planemaker has targeted an order surge worth tens of billions of dollars, but was left reeling as the world's largest aviation event was jinxed by a series of mishaps including a taxiway collision involving the A380 superjumbo. The right-hand wing-tip of a test plane for the world's largest jetliner, with a wingspan of almost 80 meters (yards), scraped a building at Le Bourget airport on Sunday and was withdrawn from the air show's traditional flying displays.

A second aircraft, the delayed European A400M airlifter, was also withdrawn from air display after a gearbox problem but will be allowed to perform in a flypast when French President Nicolas Sarkozy inaugurates the biennial event on Monday. The A380 collision caused dismay hours after the arrival of its new rival Boeing's elongated 747-8 superjumbo which is showing its distinctive silhouette abroad for the first time. The latest version of the legendary 747 jumbo touched down in orange and red "sunrise" livery symbolizing the importance of Asia, whose economic growth is set to dominate aviation in coming years starting with this week's air show. Industry sources expect some sales of both the A380 and 747-8 during the June 20-26 event but the main joust for market share concerns narrow-body, medium-haul 150-seat planes.

The air show could bring two record deals on successive days as Airbus tries to woo buyers for a revamped A320neo with more efficient engines, saving airlines 15 percent in fuel costs. "We clearly believe in the business case and the orders you are going to see at the show are going to be astounding," said David Hess, chief executive of engine maker Pratt & Whitney. Buyers are already camped out in Paris hotels to negotiate the final details of major deals but are aware that Airbus has staked a lot on winning a slew of orders for the A320neo at the Paris show, and some are said to be digging in their heels. A $16 billion provisional deal from IndiGo to buy 180 A320neo passenger jets, first announced in January, was mired in further negotiations that could spill beyond the air show. The deal if finalized would set a record for the number of planes in one transaction. But sources say if all goes to plan it is set to be eclipsed by a 200-plane order being fine-tuned between Airbus and Malaysia's AirAsia.

Demand for aircraft is on a sharp rebound driven by demand from Asia's rapidly growing airports and the Middle East. "Those two markets will enjoy at least one-third if not more of the demand increase for global air traffic in the next decade," said Philip Toy, a managing director at Alix Partners. The Airbus A320neo has also benefited from airline concerns about fuel costs. Boeing said on Sunday it would decide by end-year whether to upgrade its 737 with new engines from about 2016, as Airbus has done, or build an all-new jet in 2019. "They will sell hundreds but it is hard to tell what is gross and what is net, what is a conversion from an earlier order. There are myriad complications," said Teal Group analyst Richard Aboulafia said of the A320neo.

Orders are likely to include a confirmation of an $8 billion 100-plane order from leasing giant ILFC and another plane order for both Airbus and Boeing planes another big lessor, GECAS. But it could be Boeing that grabs attention on day one of the show with a sale of 777 wide-body airplanes to Qatar Airways -- a reminder that the two planemakers are battling for market share on a second front after Airbus revamped its A350. Russia and China will flex their muscles as potential rivals to Airbus and Boeing, especially during a Tuesday visit by Russian Prime Minister Vladimir Putin and some analysts expect surprise sales. But Western planemakers say it will be some time before newcomers mount a serious challenge in civil aerospace.

Boeing 747-8 debut at Paris air show

Boeing Co's 747-8 Intercontinental, the new elongated passenger version of its legendary jumbo jet, made its international debut on Sunday, showing its distinctive silhouette abroad for the first time. The high-profile landing of Boeing's new 747 at the Paris Air Show -- three months after its first flight -- marks a show of engineering strength by the world's second-largest plane maker in a competition for control of the wide-body market. "We've seen a great deal of interest in the last six to eight months as the market has gotten better," Randy Tinseth, Boeing's vice president of marketing at Boeing's commercial division, told Reuters.

In Boeing's standard layout, the new 747-8 will have 467 seats, 51 more than its predecessor, but fewer than the 525 of its main competitor, the A380 made by EADS unit Airbus. The actual seat number, however, will be determined by the airlines. Boeing has taken 33 orders for the 747-8 Intercontinental, which will be joined in Paris on Monday by the better-selling freighter version of the plane, which has received 76 orders. The new 747-8 -- in red and orange livery to symbolize the importance of the fast-growing Asian aircraft market -- flew to Paris without passengers but was stuffed with computers, test equipment and barrels of water to simulate passenger weight and to test balance.

The Paris Air Show is the venue of choice for aerospace and defense companies to strut their stuff, to the delight of aviation enthusiasts around the world. The new 747-8 is more than 18 feet longer than its predecessor, with the added length mainly noticeable by the extended hump. The upper deck in the hump traditionally houses the business class section. Plane spotters looking for other differences with the 747 will notice the jagged, clam-shell look of the 747-8's engine casing, which reduces noise. The 747-8 also lacks the upwards-curving winglets at the wingtip, but has raked wings that sweep slightly upwards. Boeing says the raked wings reduce wind resistance and enhance fuel efficiency.

The plane also features bigger windows and some design elements of the new 787 Dreamliner, such as interior lighting that changes colors to help passengers adjust more easily to time changes as the plane crosses time zones. The first 747 made its maiden flight 42 years ago. Since then, the jumbo jet, with its distinctive hump, has become the world's most recognizable plane. The 747 was the world's largest airplane until 2005, when Airbus unveiled its A380. The 747-8 Intercontinental, however, is more than 10 percent lighter per seat than the Airbus A380 and consumes 11 percent less fuel, Boeing says. The Intercontinental lists at $317.5 million. Germany's Lufthansa has ordered 20 of the planes, and is set to be the first airline to bring the new jumbo into service early next year. Boeing says a VIP customer will take first delivery of an Intercontinental in the fourth quarter of this year.

Production of the 747-8 has been delayed, as has the mid-sized 787 Dreamliner, a carbon-composite plane, which represents a bigger leap in technology than the revamped 747-8. Although the 747-8 and A380 will compete directly for years to come, analysts say airlines are mostly interested in lighter, wide-bodied planes in the 200- to 350-seat range, like the 787 and the future Airbus A350, which are designed to bypass crowded hubs and take passengers closer to their final destination.

Cebu Air orders 37 Airbus aircrafts

Philippine budget carrier Cebu Air will buy 37 planes from Airbus for USD$3.8 billion as it looks to more than double its fleet over the next 10 years and expand its routes, the company's chief executive said on Thursday. Lance Gokongwei told reporters Cebu Air has put in orders for 30 new A321neos and seven A320s from Airbus with delivery between 2015 and 2021. The order is in addition to 18 A320s that Cebu Pacific is set to receive from the second half of this year up to 2014. "This is the largest single aircraft order ever made by a Philippine carrier," Gokongwei said, adding it was also the largest firm order for the A321neo in the world. "We expect to launch a flight using A321 by 2017," he said. "We will be able to serve cities in Australia, India, and northern Japan, places the A320 cannot reach."

The airline plans to use internally generated cash and may seek loans from export credit agencies and commercial lenders to fund the purchases. Cebu Air, which operates the country's largest budget airline Cebu Pacific, is a unit of Philippine conglomerate JG Summit Holdings. The airline expects to at least meet its target of flying 12 million passengers this year, up 14 percent from last year, despite rising fuel prices. It currently has 33 jets, of which 25 are A320s and eight are turbo prop planes from aircraft maker ATR. "With the A321neo, Cebu Pacific will be able to fly more people further at significantly lower cost per seat than any other competing aircraft, and with less impact on the environment," Airbus chief operating officer John Leahy said in a statement.

Cebu Air has yet to make an engine choice for the A321neo, but the choices open to it are CFM International's LEAP-X and Pratt & Whitney's PurePower PW1100G. The A321neo, the largest model in the recently launched A320neo series, uses new engines and large wing-tip devices called sharklets that would allow Cebu Pacific to achieve 15 percent reduced fuel burn, a statement from Cebu Air said. Cebu Air competes with flag carrier Philippine Airlines locally and with Singapore's Tiger Airways and Malaysia's Air Asia in the region.

Qantas to cut cost - cancels aircraft orders

Australia's Qantas Airways will cut spending by AUD$700 million (USD$750 million) and plans to cancel aircraft orders as it battles waning demand, high fuel costs and investor displeasure with its shares trading near multi-year lows. Qantas, which suffered a blow to its reputation after an Airbus A380 accident last year forced it to ground its flagship aircraft, said it will cut capital expenditure by AUD$400 million up to the end of fiscal 2012 and will reduce aircraft leasing costs by AUD$300 million. With its shares at two-year lows, pilots threatening strike action, costs rising and the domestic economy going through a rough patch, Qantas has been under pressure to take decisive action, with some analysts suggesting its credit rating could come under pressure.

The airline has already offered cabin crew voluntary redundancy in hopes of cutting 350 jobs and raised fares several times to combat its AUD$3.7 billion fuel bill. Qantas now expects its domestic capacity to grow by just 5.5 percent, below the 8 percent projected earlier and the airline will cancel or defer a fifth of its aircraft deliveries next year. Australia's economy contracted by the fastest rate in 20 years in the first quarter and recent data on retail spending and consumer sentiment indicates households are feeling more pain than earlier thought and were unlikely to sharply raise consumer spending. In addition, households have sharply raised their savings as they expect interest rates and mortgage costs, to go even higher.

Air Arabia delays Jordan hub plan

Low-cost carrier Air Arabia has delayed plans to establish a hub in Jordan due to regional unrest and high fuel prices, the airline's CEO said on Tuesday. "With the current environment, we have delayed the Jordan plans... we will review the situation and take a decision," Adel Ali said. The airline, set up in 2003 in Sharjah in the United Arab Emirates, had planned to open a hub in Jordan in June. It also has a hub in Morocco and launched operations at its third hub in Egypt last year.

Public protests have swept through North Africa and the Middle East, forcing leaders to step down in Egypt and Tunisia and sparking a violent struggle in Libya and Syria, which borders Jordan. Sporadic protests have also been held in Jordan. "Jordan is stable but countries like Syria, Egypt and Tunisia are still facing political instability. There is a lot going on in the region and with the current fuel prices, we thought this was not the right time," said Ali.

Airbus unveils Concept Plane

 

Airbus has unveiled a futuristic concept for a transparent plane that may be everyday air transport in 2050. With its see-through aircraft cabin, passengers of the future will get a window on the world as they fly through the sky. They will be able to see everything to the sides and in front of them.The concept cabin unveiled at the Royal Observatory in Greenwich, London, would be a bionic structure that 'mimics' the efficiency of the bird bone, claimed the company.It would provide strength where needed, and also allows for an intelligent' cabin wall membrane, which controls air temperature and can become transparent to give passengers open, panoramic views.The company believes that mid-century passengers might be able to enjoy a game of virtual golf or take part in interactive conferences, while the cabin 'identifies and responds' to travellers' needs.In the 'interactive zone' there are virtual pop-up projections taking passengers to whichever social scene they want to be in, from holographic gaming to virtual changing rooms for active shoppers.

The 'smart tech zone' is tailored towards the more functional-orientated passenger with what Airbus describes as 'a chameleon-style offering'. It aims to meet individual needs ranging from a simple to a complete luxury service, but all allowing 'you to continue life as if on the ground'. "Our research shows that passengers of 2050 will expect a seamless travel experience while also caring for the environment," the Daily Mail quoted Airbus engineering executive vice-president Charles Champion as saying. "The concept cabin is designed with that in mind, and shows that the journey can be as much a voyage of discovery as the destination," he added.

Thai Air places aircraft orders worth $3.9 billion with Airbus and Boeing

Thai Airways announced Monday that it would acquire 23 Airbus and 14 Boeing airplanes for about $3.9 billion to modernise its ageing fleet after a period of financial turbulence. The carrier said the deals, which have been approved by its board of directors, would enable it to grow profits and be among the top three leading airlines in Asia in terms of quality and service efficiency. The airline plans to buy six Boeing 777-300ER planes, four Airbus A350-900s and five A320-200s for a total of about $1.6 billion, for delivery between 2014 and 2017. It will also lease 22 aircraft, including eight Boeing 787 Dreamliners, to be delivered between 2012 and 2017, a company statement said. "Acquiring new aircraft made from lightweight and non-corrosive composite material to replace retiring aircraft will save fuel and maintenance costs," it added.

The company is bouncing back after a tough spell that saw it sink 21.3 billion baht ($702 million) in the red in 2008 owing to the global financial crisis, high fuel costs and political protests that temporarily shut Bangkok's airports. The carrier posted a net profit of 1.6 billion baht in 2010, up more than threefold compared with 2009 as revenue more than doubled. The airline faces increased competition from regional low-cost carriers such as Air Asia and last year announced plans to start its own budget airline in cooperation with Singapore's Tiger Airways. Currently Thai Airways operates a mixed fleet, including some ageing Boeing 747 jumbos and Airbus A300s, which are no longer being produced.

Thai Airways president Piyasvasti Amranand admitted in October that the carrier's planes were "pretty old" and said the company needed to move quickly given the backlog of orders facing Boeing and Airbus. The new orders are on top of a plan announced a year ago to take delivery of seven Airbus A330-300s medium-range aircraft and eight Boeing 777-300ER long-range planes by 2014 on lease.The group has delayed delivery of six Airbus A380s, now due to arrive starting from 2012, because of a shortage of cash. The launch of Boeing's new 787 Dreamliner, heralded as a new generation of highly fuel-efficient mid-sized aircraft, has been repeatedly delayed due to a string of technical mishaps. Delivery of the first 787s is now scheduled for the third quarter of 2011 to inaugural customer All Nippon Airways of Japan.

Hong Kong Airlines expanding its fleet with A380 orders

Hong Kong Airlines Ltd. will order Airbus A380s as it challenges larger neighbor Cathay Pacific Airways Ltd. and adds flights in China, the world’s fastest- growing air-travel market. The carrier, controlled by the investment arm of China’s Hainan province government, will announce the deal at next week’s Paris Air Show, it said in a text-message reply to questions today. It didn’t elaborate on the number of superjumbos it will buy at the show, which starts June 20th. The world’s largest airliner may help Hong Kong Air compete with Cathay on long-haul routes and offset a looming capacity crunch at the city’s airport caused by delays in building a new runway. The carrier will be the third new A380 customer this year, following Skymark Airlines Inc. and Asiana Airlines Inc., as Airbus boosts sales among smaller Asian carriers. “It’s a good move for brand-building,” said Kelvin Lau, a Hong Kong-based analyst at Daiwa Capital Markets. “It’s quite difficult for newcomers to break into lucrative long-haul routes.”

Hong Kong Air also agreed to order 32 Boeing Co. 787s and six 777 freighters earlier this year to help expand. It had 30 Airbus A320s, 12 A330s and 15 A350s on order as of the end of May, according to the Toulouse, France-based planemaker’s website. The carrier and affiliate Hong Kong Express now operate 18 planes, according to their website. The airline expects to double passenger numbers to 4 million this year as it adds planes and taps China’s rising travel, President Yang Jianhong said in March. The carrier has a less than 10 percent share of Hong Kong’s outbound travel market, Royal Bank of Scotland Group Plc said at the time. The airline will be the second in Greater China to order the A380 following China Southern Airlines Co. Airbus is due to deliver the first superjumbo to China Southern later this year. The planemaker has sold a total of 234 A380s, of which 49 have been delivered, as of the end of May, according to its website.

Orders for the A380 have been dominated by Middle East and Asia-Pacific carriers. Emirates Airline has placed orders for 90, making it the largest customer. Singapore Airlines Ltd. was the first carrier to fly the superjumbo on commercial services. Asiana, South Korea’s second-biggest carrier, signed up for six A380s in January. Skymark, a Japanese budget airline, confirmed an order for four the following month. Cathay Pacific has so far ruled out ordering A380s and is instead building its long-haul fleet with smaller planes. It ordered 15 Airbus A330-300s and 10 Boeing 777-300ERs in March, following an agreement for 30 A350s in August. “We’ll probably have another good look at big aircraft in the next one or two years,” Chief Executive Officer John Slosar said last week in Singapore at the International Air Transport Association’s annual general meeting.

Hong Kong Air is seeking to raise funds by selling a stake to private-equity investors ahead of an initial public offering that may raise as much as $1 billion, Yang said in March. The carrier had a net income of about HK$110 million ($14 million) in 2010, its first annual profit, and it may double that this year, he said. Hong Kong Airport will likely reach full capacity by about 2020 because of growing demand for flights into China, operator Airport Authority Hong Kong said earlier this month as public consultation on plans to build a third runway began. Passenger numbers at the airport may grow as much as 3.6 percent a year, reaching 105 million by 2030, according to estimates on its website. China’s international passenger numbers my rise 11 percent a year through 2014, about double the pace of the global market, according to the International Air Transport Association.

Flying car delayed further

Terrafugia, the company building a roadable aircraft, has indicated the first test flight of its production prototype called Transition should not be expected prior to March 2012. The earliest delivery date is now late 2012. The company’s proposed flight demonstration at EAA AirVenture 2011 has been postponed, but the company hopes to have the vehicle on static display. It will also provide information on progress so far. The flight had been highly anticipated. “We have encountered a number of the challenges that are common in aircraft development programs, including problems with third party suppliers,” said CEO Carl Dietrich. “The good news is that our team has done a fantastic job of minimizing the impact of these problems, and we continue to work through the issues. However, we have been forced to adjust our expected roll-out schedule in light of these challenges.”

The company displayed a proof-of-concept vehicle at Oshkosh in 2008. The vehicle presents a difficult engineering problem; it must meet highway crashworthiness standards and yet be light enough to fly. It will be flown under light sport aircraft rules. Dietrich noted much progress has been made. The company has a contract from the Defense Advanced Research Projects Agency, and has attracted new investment that allowed the staff to double from 12 to 24.

AirAsia could order upto 200 A320's

AirAsia could buy as many as 200 Airbus jets in a landmark deal shaping up to dominate the Paris Air Show, industry sources said. The deal is among the most keenly awaited in a recovering civil aviation sector, and could help to determine the success of the European planemaker's efforts to stymie a draft project by rival Boeing to design a new 150-200 seat aircraft. Under pressure from airlines to provide a cushion against high fuel costs, Airbus is marketing a new version of its best-selling A320 passenger jet with new engines which it says will save 15 percent in fuel bills starting from late 2015. Malaysia-based AirAsia has said it is considering buying at least 150 of the "A320neo" aircraft as the region's largest budget carrier expands in the face of high oil prices.

But industry sources told Reuters that the range of negotiations is higher than previously expected and could reach 200 planes, trumping a 180-plane provisional order from India's IndiGo as the industry's largest ever by number of aircraft. "They are talking about 150 to 200 aircraft," an industry source familiar with the negotiations said, asking not to be named. Such a deal would be worth $14 billion to $18 billion at list prices, depending on the exact model of aircraft involved, though big plane orders tend to generate significant discounts. The record for the largest Airbus deal by value is held by Emirates airline with a $22 billion purchase in 2007.

EADS  subsidiary Airbus declined to comment. A spokesperson for AirAsia said talks were continuing. Both sides hope to announce the deal at the Paris Air Show on June 20-26 but the size of the deal and its timing remain uncertain because of the sums involved, industry sources said. AirAsia founder Tony Fernandes has set his sights on doubling the size of the nine-year-old airline to rival Southwest Airlines' fleet of more than 500 jets. The airline has already ordered 175 of the original design of A320, of which 86 have yet to be delivered.

However in a sign that the Airbus deal should not be taken for granted, Fernandes wrote on Twitter on Friday that he was asked to meet aircraft manufacturer Bombardier in Montreal. The Canadian company wants to challenge Airbus and Boeing with its CSeries planes. Fernandes has regularly broken the secretive protocol of aircraft negotiations by tweeting about the talks. Boeing is mulling whether to follow Airbus down the "re-engining" route by tinkering with its 737 passenger jet or making more revolutionary changes with an all-new plane offering even bigger fuel savings to cash-tight airlines from 2020.

"The A320neo appears to have good traction with current A320 fliers, particularly low cost carriers," said Rob Stallard, aviation analyst at RBC Capital Markets, who predicts around 300 orders for the $90-million jetliner by the end of the year. "Even if Boeing goes ahead with a clean-sheet new narrowbody with entry into service around 2020, we think most Airbus narrowbody customers will stick with the neo due to the high cost of switching providers," he added. Airline executives say a key factor for Boeing will be whether Airbus manages to convert any of its major traditional clients, especially U.S.-based ones such as Southwest.

The AirAsia order, if confirmed, could also give a much-needed boost to transatlantic consortium CFM International. Industry sources say the Cincinnati-based company is the front-runner to win a lucrative contract for the airplanes' engines, breaking a drought of orders after rival Pratt & Whitney scooped up most orders so far for the A320neo. CFM is a joint venture between General Electric and France's Safran. Pratt & Whitney has developed an engine called the Geared Turbofan with a change of architecture for the narrowbody 737 and A320 market, the largest slice of the commercial aerospace industry worth $1.7 trillion in plane sales over 20 years.

Indian Aviation expanding rapidly

India's largest private airline Jet Airways and budget carrier GoAir are in line to order $6.5 billion worth of Airbus aircraft at the forthcoming Paris Air Show, The Economic Times reported on Thursday. The financial daily quoted Jet chairman Naresh Goyal as saying that they were buying 10 A330 aircraft worth $2.5 billion as part of plans to expand its routes in Europe. GoAir is looking to order at least 50 narrow-body A320 jets worth $4 billion for short-haul domestic routes, which will be brought into service as soon as next year, the report said, quoting two sources familiar with the matter.

Both orders were still being negotiated but were in the final stages, the newspaper added, quoting unnamed sources within Airbus. A Jet Airways spokeswoman in New Delhi told AFP that she had no details on the exact nature of the orders, as Goyal was speaking on the sidelines of the recent International Air Transport Association annual general meeting in Singapore. But she added: "We're asking for just a few (aircraft) because that's in line and keeping with our growth plan."

No one was immediately available for comment at GoAir. The Economic Times said budget airline IndiGo would also push ahead with a previously announced order for 180 A320 aircraft with an estimated value of $15 billion, after signing a memorandum of understanding with Airbus last year. Air India, the state-run national carrier, is planning to take 10 A330s and 16 A320s on a rental basis, it added. Aviation has taken off in India in recent years but private airlines have been grappling with rising fuel prices and a slowdown in economic growth that has hit business.

Singapore Airlines in partnership with Virgin Australia

Singapore Airlines and Virgin Australia on Tuesday announced a long-term partnership that will boost their global reach despite the exclusion of the lucrative Australia-US sector. "The alliance will connect Singapore Airlines' extensive international network with Virgin Australia's wide range of Australian and Pacific destinations," the two carriers said in a joint statement. They will share flights, coordinate schedules and undertake joint sales and marketing programmes. The tie-up, announced on the sidelines of a global aviation industry conference in Singapore, will take effect on August 1 if approved by regulators.

The deal has one notable exclusion -- the highly competitive trans-Pacific routes from Australia to the US West Coast that Singapore Airlines has so far been denied by the Australian government. But the two airlines said they were confident the alliance would boost their revenues significantly. "We don't have a specific figure right now, but as you can see, the value proposition speaks for itself," Singapore Airlines chief executive Goh Choon Phong told a news conference. "You can see the potential is really quite immense, both currently as we cooperate and going forward."

Goh hopes the tie-up will boost Singapore Airline's chances of eventually convincing Canberra to allow the Singapore carrier access to the trans-Pacific routes. "I think with greater cooperation, certainly it will strengthen our case," he said. Julius Yeo, an aviation analyst with financial consultancy Frost and Sullivan, told AFP the alliance takes Singapore Airlines one step closer to its dream of competing on the trans-Pacific route. "It's a step forward in penetrating the Australian network. Singapore Airlines has always been very keen on Australia. It's a staggered strategy to target the trans-Pacific route," Yeo said.

The move is the second major business announcement by Singapore Airlines, one of the world's most profitable carriers, in two weeks. On May 25, it said it will create a long-haul budget airline to tap growing Asian demand for no-frills travel to places like Europe, but details have not yet been unveiled. Singapore Airlines announced in May a profit of Sg$1.09 billion ($885 million) in the year to March on revenues of Sg$14.5 billion, but analysts say the airline is under pressure in its traditional core of first and business class travel.

Through the new tie-up, Virgin Australia will have access to about 70 more destinations, while Singapore Airlines customers will have access to about 30 extra routes, the statement said. Virgin Australia group chief executive John Borghetti said Asia was "a critical market" and Singapore Airline's extensive network "will be particularly attractive to our international business and leisure travellers." The airline, formerly known as Virgin Blue, already has a partnership with US carrier Delta on trans-Pacific flights as well as an alliance with Etihad Airways of the United Arab Emirates.

In 2010, New Zealand and Australia approved an alliance between Virgin Blue and Air New Zealand on trans-Tasman routes. At Tuesday's news conference, Goh said Singapore Airlines was still open to offers for its 49 percent stake in British carrier Virgin Atlantic. The Singapore carrier paid 600 million pounds ($981 million at current rates) in 1999 for the 49 percent stake in Virgin Atlantic, which was started by flamboyant British tycoon Richard Branson in 1984. Singapore Airlines has said its investment in the British carrier was not producing the sort of returns it was expecting. Branson has a 26 percent stake in Virgin Australia, a company spokeswoman said.

Malaysian onboard OneWorld

Malaysia Airlines is to join oneworld®, adding one of aviation's most frequent award winners to the world's leading quality airline alliance. Malaysia Airlines was unanimously elected a oneworld member designate by the Chief Executives of the alliance's member airlines, at a meeting on the sidelines of IATA's 2011 World Air Transport Summit, which opens in Singapore today. A formal alliance membership agreement will be completed soon.

Malaysia Airlines is expected to start flying as part of oneworld late next year. As it prepares for its alliance membership, Malaysia Airlines intends to develop bilateral links with a number of oneworld's established partners, who include some of the biggest and best names in the airline industry. It already codeshares with oneworld partners Cathay Pacific and Royal Jordanian. When it becomes part of oneworld, its customers will gain access to the alliance's truly global network. It will expand oneworld's global coverage to almost 950 destinations in 150 countries, served by a combined fleet of more than 2,600 aircraft operating some 10,000 flights a day and carrying 358 million passengers a year.

Three established oneworld member airlines currently serve Malaysia, with Cathay Pacific, Japan Airlines and Royal Jordanian flying to Kuala Lumpur, and Cathay Pacific also to Penang and, through its Dragonair affiliate, Kota Kinabalu. Opportunities for expanding the alliance's coverage of the country will be explored as Malaysia Airlines prepares to join. When it becomes part of oneworld, members of Malaysia Airlines Enrich frequent flyer program will be able to earn and redeem rewards on any of oneworld's 14 other top-class carriers, with top tier members able to use any of the group's 550 plus airport lounges, and its network will be covered by oneworld's range of alliance fares.

At the same time, frequent flyer cardholders of oneworld's established airlines will be able to earn and redeem rewards when flying on Malaysia Airlines. Qantas will serve a s sponsor of Malaysia Airlines entry into oneworld.Malaysia Airlines Chairman Tan Sri Dr Mohd Munir Abdul Majid said: "The Board of Malaysia Airlines had targeted entry into an alliance this year. I am glad we are at the stage where the initiation with oneworld is formalized."

Malaysia Airlines Managing Director and Chief Executive Officer Tengku Azmil Aziz said: "With the world airline industry increasingly focused on alliances, we have carried out careful analysis of the options now available to Malaysia Airlines. The time is clearly right for our company to join one of the global airline groups, and oneworld is clearly the best option for us. As a company highly focused on quality service, we are immensely proud to have been invited to join the highest quality alliance with the best airline partners offering a global network that best complements our own. We look forward to completing all joining requirements as soon as possible."

American Airlines Chairman and Chief Executive Gerard Arpey, Chairman of the oneworld Governing Board, said: "Today's agreement with Malaysia Airlines represents another significant milestone in our effort to establish oneworld firmly as the world's premier airline alliance with members unmatched in brand and service quality. Not only will Malaysia Airlines bolster oneworld's presence in Asia, in North America it will also further strengthen our alliance's position at Los Angeles, where American Airlines has significantly expanded with new international and domestic flights as well as enhanced facilities. We look forward to welcoming Malaysia Airlines to oneworld."

oneworld CEO Bruce Ashby said: "oneworld already features four of the best airlines in Asia-Pacific, including member elect Kingfisher Airlines. Adding another leading Asian carrier, in Malaysia Airlines, will greatly enhance oneworld's offering throughout the world's fast growing region for air travel demand." Qantas Chief Executive Officer Alan Joyce said: "Malaysia Airlines is an ideal candidate for oneworld, with its world-class reputation for customer service mirroring oneworld's own focus. Its Kuala Lumpur home will provide our customers with another of the world's best airports, geographically well placed between our existing hubs. Qantas is delighted to be serving as its sponsor in joining oneworld."

Kingfisher Airlines optimistic about growth

India's Kingfisher Airlines is looking to lease both wide-body and narrow-body aircraft to meet an unanticipated surge in demand as the domestic economy recovers more quickly than expected, the company's chairman, Vijay Mallya, said on Monday. Mallya also told reporters on the sidelines of the International Air Transport Association's annual meeting in Singapore that the company had revived a plan to sell Global Depository Receipts, taking higher oil prices into calculation. Asked if Kingfisher's current capacity was enough to cater to the projected increase in demand, he said: "Not quite, that is why we are looking for leased capacity.

"Kingfisher at one time had several aircraft that were on order from Airbus for delivery in 2010 and 2011. During the 2008-2009 crisis, I actually postponed the delivery of those aircraft to 2012 and 2013," Mallya said. "So right now we are looking for capacity, but our own new deliveries will start in about 18 months." He said he was looking to lease both narrow-body and wide-body aircraft. "We have been experiencing for the last six months unprecedented load factors, which I have never seen in the last six years," Mallya said. "We are running at mid to high 80 percent on every flight, which is extremely healthy."

According to its website, Kingfisher has 66 aircraft, mostly Airbus jets and ATR turbo-prop variants. It has more than 125 planes on order. Loss-making Kingfisher, India's second-largest airline by market share, has restructured its debt by converting almost INR12 billion rupees (USD$268 million) of loans into equity. Its current debt stands at about INR60 billion rupees. Last month, it reported a net loss of INR10.27 billion rupees in the fiscal year ending March 31, versus a loss of INR16.47 billion rupees the year before. But it had positive EBITDA amounting to INR1.4 billion rupees, the company says. "We reported significantly improved numbers and EBITDA profit for the first time. This is a sign of things to come," Mallya said.

He said the company had also revived a proposal to sell GDRs of USD$250 million - USD$350 million, but gave few details. "We had an excellent roadshow for our GDR in January and early February this year and we presented a compelling business plan." He said the plan assumed crude oil at USD$90 per barrel. "The minute crude oil prices started going up to USD$120 plus per barrel, prospective investors asked us to rework our business plans, which we did."

The flamboyant Mallya, who controls the United Breweries Group, owns a Grand Prix motor racing team and a team in India's cricket league, said Kingfisher's growth should be enhanced as it joins the oneworld airline alliance, which also includes Cathay Pacific, British Airways and Qantas. "The opportunities to leverage this alliance are huge," he said, adding that Kingfisher would become a fully operational member by 2012. "We see this as being a contributor of about 5-6 percent of enhanced revenue to us."

He said Kingfisher was continuing to lobby the government to allow foreign airlines to take stakes in Indian carriers. "Airlines in India must raise capital and the opportunity to raise capital from foreign airlines must not be excluded and that's why we will continue to request the government of India to reconsider its foreign direct investment policy." Kingfisher flies to eight international destinations and to more than 50 towns and cities in India. Its fleet of turboprop aircraft will help it to respond to the pattern of wealth creation in India, Mallya added. "There is a lot of wealth in tier-2 and tier-3 cities that is being created," he said. "It is no longer a situation where wealth in India is restricted to the big metro cities, so it offers a huge amount of opportunity. "Kingfisher is well positioned because it has a large number of ATR aircraft which are ideal to service the emerging demand in tier-2 and tier-3 cities," he said.

Airlines are slowly gaining from the global economic recovery - IATA

The International Air Transport Association (IATA) said on Thursday the global economy was recovering more slowly than expected, but was inching upward based on air traffic data, a key barometer of growth. High oil prices, the crisis in the Middle East and Japan's earthquake and tsunami dented growth, but the global economy appeared to be slowly overcoming the effects, said Giovanni Bisignani, director general of the global air industry body.

"From the numbers, the recovery is moving," he told a news conference in Singapore. "It is moving slower than expected because the recovery this year has been affected by many, many different situations (such as) the situation in the Middle East and the situation with the oil price. "What got spoilt in the situation is the price of fuel, because the record (average) price of USD$110 per barrel is not just affecting the profitability of aviation, but it’s affecting the profitability of the entire system."

According to the latest IATA figures, passenger traffic in April grew 11.9 percent year-on-year while freight traffic grew 3.3 percent. But these numbers were distorted because April 2010 was hit by severe air traffic disruptions following the volcanic ash eruption in Iceland. Air freight, which accounts for about one-third of global trade by value, was down 6 percent from a post-recession peak in May last year.

"The speed-up of last year was because you have to build the inventories," Bisignani said. "Once you have rebuilt your inventories, you have to sell your stuff. Now we have slowed down because of that reason." The airline industry itself will remain profitable, but IATA plans to revise its estimates from the latest forecast of USD$8.6 billion and will likely lower that estimate.

"Since (the last forecast), much has happened to make us less optimistic," Bisignani said. "Eliminating all distortions (passenger traffic) is growing at 3-4 percent. Unfortunately, two things are spoiling the party, demand shocks and high jet fuel prices." IATA has 230 member airlines and will hold its annual general meeting in Singapore next week and will announce its latest forecasts at that time.

When the group made the industry-wide profit forecast of USD$8.6 billion in March, it assumed an average oil price of USD$96 per barrel for Brent crude, but the year-to-date average of the oil price now has reached USD$110 per barrel. Load factors, or the amount freight or passenger capacity used, are key to airline profitability. In April, the overall passenger load factor was 77.4 percent, but the freight load factor was only 46.5 percent.

"Maintaining the high load factors needed to support profitable growth will be difficult given the ongoing challenge of matching capacity to volatile demand," Bisignani said. Disrupted supply chains after the Japan earthquake and tsunami disaster, slower growth in China and political unrest in Africa contributed to the slow take-up of freight space, IATA said.

Bisignani said airlines had built up freight capacity last year believing a strong recovery was imminent. "That was slowed down because of the cost of fuel, the Middle East, and all those kind of things. And it takes some time to adjust capacity to the new reality," he said.