Wednesday, October 27, 2010

CAE sells three A320 full-flight simulators

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Montreal flight training giant CAE Inc. said Wednesday it has sold two Airbus A320 full-flight simulators to Sichuan Airlines Group, the largest Airbus fleet operator in Southern China, and another A320 full-flight simulator to an unidentified customer.

The three simulator sales are worth more than $25 million at list prices, CAE said. Sichuan Airlines, a domestic and international carrier, is a new customer for CAE and the simulators are due for delivery to the airline's training centre in Southern China by the end of 2011.

CAE has now won orders for 16 full-flight simulators from commercial airlines so far in fiscal 2011. It also has a large defence industry base and has launched its simulation technology into the healthcare sector.


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Iberia expects to complete merger with BA in January

Spanish airline Iberia expects its merger with British Airways, which will create Europe's second-biggest airline by market value after Lufthansa, to be completed in January 2011.

Iberia has called an extraordinary shareholders assembly for November 28 to vote on the planned merger while British Airways shareholders are scheduled to vote on the issue the following day.

"Subject to the approval of the operation by the shareholders of both companies, the merger is expected to be carried out in January 2011," Iberia said in a statement late on Tuesday.

The two airlines signed the merger deal on April 8 in a bid to compete more effectively in the fast-consolidating aviation sector and the European Commission gave the green light to the deal in July.

BA chief executive Willie Walsh will become chief executive of the new umbrella company which will control the two airlines, International Consolidated Airlines Group (IAG), while Iberia chairman Antonio Vazquez will become group chairman.


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NTSB probes safety of airline partnerships

The regional airline industry says safety is its top priority, in part because accidents are bad for business. But pilot unions and the families of air crash victims say safety has been sacrificed to cost-cutting at some carriers.

The Federal Aviation Administration says it holds all airlines, large and small, to the same standards. But a coalition representing corporate travel managers says business travelers don't believe regional carriers are as safe as larger airlines, and many travelers don't want to fly them.

Those were some of the sometimes contradictory messages presented at a two-day National Transportation Safety Board forum that began Tuesday. The board is examining the safety implications of "code-sharing" agreements that allow major carriers to sell seats to passengers on smaller, regional carriers that operate one leg of a flight.

By working together, major and regional carriers benefit from money-saving efficiencies in flight connection times, integrated baggage handling, gate locations and marketing.

Major carriers, ticket agents, and online ticketing websites are supposed to tell passengers before they buy a ticket that a portion of the flight will be operated by another carrier. But in practice, passengers are often unaware that the airline they buy a ticket from isn't the operator of the entire flight, witnesses told the board.

The issue is an important one for anyone who flies in different parts of the country. Regional airlines now account for half of domestic departures and a quarter of all passengers on domestic flights. For more than 400 communities, they provide the only scheduled service.

The last six fatal domestic airline crashes all involved regional airlines. Pilot performance has been cited as a factor in four of those.

"Regional airlines can no longer be considered the minor leagues. They are major players in the airline industry and they are here to stay," NTSB chairman Deborah Hersman said.

Continental chief executive Jeffrey Smisek told a congressional hearing in June that his airline doesn't have the resources to oversee safety at all of its code-sharing partners. That responsibility, he said, belongs to the Federal Aviation Administration.

John Kausner of Clarence, N.Y., told the safety board he was outraged by Smisek's remarks. He said his daughter, Elly Kausner, a 24-year-old Florida law student, had no idea when she bought a ticket online from Continental Airlines to fly home to western New York that the last leg of the flight would be on an airline she had never heard of - Colgan Air. Her e-mail confirmation ended with a cheery "Thank you for flying Continental."

Elly Kausner, along with 48 other passengers and crew members, and one person on the ground, was killed last year when Continental Connection flight 3407 crashed near Buffalo. NTSB cited errors by the flight's two pilots.

Even if his daughter had known part of her flight was operated by Colgan, she couldn't be expected to make an informed determination of whether a small airline she was unfamiliar with was safe, Kausner said. Continental should have ensured Colgan was employing pilots that were as competent as the pilots employed at the larger carrier, but that wasn't the case, he said.

Instead, Continental, Colgan and FAA "passed the buck," he said.

After the accident, FAA Administrator Randy Babbitt said he would look at whether the FAA has the authority to review code-sharing agreements with regard to safety oversight by major carriers.

However, FAA spokeswoman Laura Brown said Monday the agency doesn't plan to review the agreements. She said all carriers - large and small - are held to the same safety standards laid out in FAA regulations.

But Babbitt has leaned on major carriers to work voluntarily with their regional partners to adopt many of the crew training, aircraft maintenance and other safety programs at larger airlines that exceed FAA standards.

Airlines and FAA officials say the effort has been successful.

Roger Cohen, president of the Regional Airline Association, told the safety board that the voluntary safety programs have been adopted by 85 percent to 100 percent of regional carriers, depending upon the program.

"Every carrier does recognize that it's bad for business not to be as safe as you can be," Cohen said.

The proof of safety has been a steady decline in airline accidents, said John Meenan, the chief operating officer of the Air Transportation Association, which represents major carriers.

But Captain John Prater, head of the Air Line Pilots Association. said major carriers partner with regional carriers in part to cut costs, creating extraordinary pressure to keep staffing to a minimum and salaries low. Some carriers promote pilots to captain with only a few hours of leadership training before putting them in charge of a passenger airline, he said.

U.S. carriers are required to conduct a safety audit of their foreign code-share partners, but not their domestic partners. Most international carriers also demand their foreign code-share partners - and sometimes their domestic partners - complete a safety audit by the International Air Transport Association, a trade association for the airline industry.

Those audits are voluntary and aren't overseen by any government agency, but the airline association makes them available to government regulators.


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Alaska Airlines jet hits another plane on Sea-Tac tarmac

SEA-TAC AIRPORT -- Two Alaska Airlines jets were damaged when one aircraft bumped into the other while pulling out of a gate at Sea-Tac Airport on Wednesday morning. 

Airport spokesman Perry Cooper said one of the Boeing 737s was pulling out of gate D1 just after 7 a.m. when its wing hit the horizontal stabilizer on the tail of another Alaska jet that was parked at gate C9. 

No one was injured, but the plane that was being pushed back had 139 passengers on board and all were evacuated. 

Alaska Airlines spokeswoman Bobbie Eagan said the plane with passengers on board was flight 660 headed to Dallas. The other aircraft was empty. 

Eagan said the passengers scheduled to fly to Dallas were moved to another plane that took off at 9:15 a.m.

It was not clear how much damage the two planes sustained. 

"We'll definitely take those aircraft out of service and do a very thorough safety inspection before we would ever fly them again," she said. 

The airline says it will do a full investigation into what happened.

 
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Boeing: Airlines flexible with 787 delay talks

SEATTLE (MarketWatch) -- A senior Boeing Co. (BA

 70.32-0.54-0.76%) executive said Wednesday that customers of its new 787 Model Aircraft were being flexible, though investors are still awaiting details of financial penalties that the company may face after a nearly three-year delay in its first delivery.

Jim Albaugh, chief executive of Boeing Commercial Airplanes, said his company was responsive to the airline industry's financial plight in the wake of the Sept. 11, 2001 terrorist attacks, for example by easing payment schedules.

"We're seeing the same thing from the airlines," said Albaugh of ongoing talks with customers of the Boeing 787, which had been slated to enter service in May 2008.

"I'm hopeful they'll forgive us," Albaugh said of these customers, in remarks to a conference hosted by the American Bar Association.

He said despite the delays from a range of technical and production issues, airlines would appreciate the plane's better economics when it enters service. The first Model Aircraft is now due to arrive at All Nippon Airways Co. (ALNPY, 9202.TO) in February next year.

James Bell, Boeing's chief financial officer, said in May that it was three-quarters of the way through talks with affected customers and suppliers.

In July, Bell said such talks could be wrapped up by the end of the year. A Boeing spokesman said Wednesday that negotiations continued "in an orderly fashion".

Reparations are likely to involve a mix of cash penalties and nonfinancial "credits" such as subsidized freighter conversions or guaranteed future delivery slots, according to a person familiar with the process.

One of the most closely-watched negotiations is with International Lease Finance Corp., the largest 787 customer, which observers said could set a benchmark for reparations with other customers.

Boeing has been insourcing some production work from its array of 787 partners to alleviate quality-control and supply-chain issues. The outsourcing was intended to share the financial burden of the program.

"Sometimes business decisions get in the way of real good engineering," said Albaugh in his conference remarks.

Boeing is increasing production of existing models and nearing a decision on when and how to replace its best-selling Boeing737 model, as well as a revamp of its Boeing 777 widebody.

Executives have said airlines wanted an all-new narrowbody plane to replace the 737 by 2020.

Albaugh would not be drawn into discussing whether Boeing would put new engines on the 737 as an interim measure, though executives have indicated in recent weeks that they are leaning toward an all-new plane.

In addition to the 787, Boeing is also developing a replacement for its 747, but that program has also suffered delays.

Albaugh said there was a place for the new  Boeing747-8 -- due to arrive with its first customer in mid-2011 -- alongside the larger rival Airbus A380, which has already entered service after suffering its own protracted production delays

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Tuesday, October 26, 2010

Raft of carriers face freight cartel charges

LONDON - British Airways could be fined up to €80 million ($144 mil-lion) next month for fixing cargo prices with other carriers, a source with direct knowledge of the case said yesterday.

The European Commission charged BA, Air France-KLM, SAS and several other airlines in December 2007 with taking part in an air freight cartel. The EU watchdog is expected to announce penalties for the carriers on Nov 9, several sources have told Reuters.

The Commission has not identified the targets of its probe, but BA, Lufthansa, SAS, Air France-KLM, Japan Airlines, Cathay Pacific, Japan Airlines, All Nippon Airways, Air Canada and Alitalia all confirmed they had been investigated.

The probe initially targeted more than 20 carriers, including Qantas, Singapore Airlines, Korean Air, Cargolux, Malaysia Airlines and Alitalia, but not all are expected to be found guilty.
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Japan Airlines soliciting 270 voluntary retirement applications

TOKYO (Kyodo) -- Japan Airlines Corp. has begun soliciting some 270 voluntary retirement applications from pilots and cabin attendants, the company's president said Tuesday.

The solicitation, effective from Tuesday through Nov. 9, comes after the number of such applications fell short of the target of 1,500 in the previous solicitation lasting from Sept. 3 to last Friday.

"This is the final solicitation," President Masaru Onishi said at a press conference. "If applications fall short of the target, we'll make some decision after Nov. 9,"he said, indicating that a shortfall could force the struggling airline to dismiss some employees.

The target for the latest voluntary retirement solicitation consists of around 130 pilots and 140 cabin attendants. Applicants are scheduled to leave the company Nov. 30.

JAL is now under court-administered rehabilitation plans to cut a total 16,000 jobs from the JAL-led group of companies by March 2011. The group has secured about half the target through early retirement programs and other measures.

Japan Airlines said Tuesday the JAL group gained a consolidated operating profit of 109.6 billion yen in the April to September first half of fiscal 2010 due to cost cuts through service and personnel reductions.


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