A preview of my trip(s) on US Airways today:

Wow.

So far anyway.

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And who cares?

China is and its very own aircraft manufacturer, COMAC, says it is about to deliver the first ARJ-21 aircraft to customers.

I suspect the customers cringed at the idea of having to take delivery.

The ARJ-21, for those of you who don’t know, is China’s attempt at a regional jet.  To be fair, the aircraft has a lot of US content in it in the form of avionics from Honeywell and Rockwell Collins as well as a GE engine (the CF34 used by many regional jets and which is being replaced with Pratt & Whitney GTF engines by other regional jet manufacturers.)

Nominally, the aircraft is designed to compete in the 70 to 100 seat class also known as Embraer and Bombardier country.  It won’t.

The airliner, despite China’s protestations to the contrary, is a copy of the McDonnell Douglas MD-80 series aircraft that was assembled in China as the MD-90 for a brief while.  Admittedly, Chinese MD-90s are reportedly just as good as any other but they were also made from kits.  It even will share the 5-abreast seating the DC-9/MD-80 series had.

It does have some new bits:  the airliner got a new wing courtesy of Antonov and “fly by wire” courtesy of Honeywell.  But if you think the latest generation of intellectual property was given to China for this airliner, you would be wrong.

The only companies who have ordered this airliner are Chinese airlines, Chinese lessors, an Indonesian airline, a Myanmar airline and GECAS.  I’m betting GECAS ordered its token 5 to keep doing business in China.

I’m somewhat surprised that North Korea or Cuba or Iran hasn’t ordered one.

I’m pretty sure the Myanmar order is political as this airline (Myanma Airways) also recently made a much more real order with GECAS for 6 Boeing 737-800 and 4 Boeing 737-MAX8 aircraft.  It already is leasing the Embraer 190AR.  One suspects that China felt it needed some “international” orders and went out and strongarmed a couple.

The Indonesian airline, Merpati Nusantara Airlines, does operate a Chinese airliner.  It operates the AVIC MA-60 which is a kind of revised Antonov which kind of looks like an ATR-42 turbo-prop.  This airline also has some old 737 aircraft.  Given what we know about the state of airlines in Indonesia, I think we can assume that this airline has ordered what it did simply because it couldn’t get airliners from anyone else.

Still, the ARJ-21 is important if for only one reason:  It’s a very educational exercise for China who will use it to build the also inferior COMAC C919.  The so called Boeing/Airbus competitor that China is already late on as well.

China won’t build a competitive airliner in this decade.  It probably won’t build one in the next decade either.  You can bet that if they stick with it, they will be building a competitive airliner in the decade after that.  The one thing that the ARJ-21 does signal is that China is serious about figuring out how to capture that aviation market which is theirs and a piece of the global market as well.

Filed under: Aircraft Development by ajax
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In the airline industry, mergers are a mixed bag of successes and failures.   Continental Airlines, for instance, nearly died twice due to poorly executed mergers.  Northwest Airlines was impacted for years and years from its merger with Republic.

In more recent history, those mergers have been more successful such as US Airways (from America West and US Airways) and Delta (Delta and Northwest).  The jury remains out on Southwest and Airtran (although this is trending towards success) and US Airways and American Airlines.  Sadly, I think the trend on United is that it is failing as a merger.

Delta is the rock star of airline mergers and I think there two great reasons why.

First, Delta engaged in an airline merger that built a powerhouse network.  Delta and Northwest had hubs that were truly complementary and which brought together a strong domestic network and a strong international network.

That union of networks provided genuine revenue synergies that you rarely see in a merged airline.  The networks supported each other and built upon strengths and didn’t merely see capacity reduction on common routes.

The second reason Delta hit the right pace is financial.  This airline watched its capital costs and set financial targets for performance that, for the first time, included paying for the cost of capital at an airline.  Instead of buying all new aircraft, the airline has managed its fleet carefully using aircraft that had low capital costs but which also provided near competitive fuel efficiency.

The airline also managed its revenue appropriately by focusing on doing something that my own father was a vocal advocate for:  treating each city pair and route as a business that should be profitable.  Instead of asking that a sum of routes make some kind of profit, Delta expects its routes to ultimately become profitable or to be removed from its system.

The airline is no loner focused on being the biggest airline nor the airline with the greatest frequencies.  It’s focused on being the most profitable airline and managing to that goal by ensuring what it does brings a return on investment to the company.

And who embodies this same kind of approach?

Definitely Southwest although they continue to be on my watchlist.  Before anyone says it isn’t the same Southwest Airlines from 20 years ago, let me offer this:  I wouldn’t want it to be.

Southwest does watch its routes carefully still and does work hard to ensure it’s city pairs are profitable.  However, they are clearly going more network than ever before and I do wonder if the complexity is going to overwhelm their good senses.  Time will tell.

I think the American Airlines / US Airways merger has the potential to be more profitable than Delta in time.  And I think it will have one key advantage over Delta:  Better aircraft.

Delta is walking a very fine line on its fleet ages and will be in danger of getting into trouble from a fuel spike as a result.  American will have one of the newest, most fuel efficient fleets around and that will help mitigate against fuel spikes quite a bit.

United, I think, is a growing failure and the truth is that while I think this has a great deal to do with poor management, I also struggle to find a compelling argument for merger these days.  The synergies don’t seem to be there and I don’t see the two parts adding up to a sum greater as a whole.  The jury may still be out on this merger but the jury foreman is taking final votes and it’s not looking good presently.

Filed under: Mergers and Bankruptcy by ajax
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Both Airbus and Boeing have next generation updates to their single aisle products on track for delivery in the next few years.  The Airbus A320NEO is arguably the better seller over the 737MAX but both are succeeding well enough to continue sales for quite some time.

But who will blink first?

That is, who will build the next completely re-designed single aisle aircraft that will replace the Airbus A320NEO and Boeing 737MAX aircraft in the market?

In the greater scheme of things, I continue to believe that if Boeing had built a new 737 replacement, it would have ultimately won The Single Aisle Wars for a decade or more.  They would have sacrificed some sales today but . . . I think they would have cemented dominance in that market for years to come.

Sadly, that didn’t happen.

Airbus has been making the right calls lately and I think they’ve done a great job in estimating what the market wants as well as being willing to step forward and build what the market wants.  Boeing hasn’t shown much courage.

Yet, I think it will be Boeing who builds that next aircraft.  I think Airbus will focus on its A320NEO and I think their next project will be an A330NEO and they still have considerable work to finish on the A350 series aircraft.

Boeing has the 787-10 to complete which will be an unsatisfying derivative instead of a hit (it won’t have enough range/payload to really attract customers to it, in my opinion).  Nonetheless, the 787-10 will be pretty easy to bring to market.  They have the 737MAX to get done and that will be a low risk effort as well.  The 777-8/9 will also be a fairly low risk aircraft, too.

Boeing has all low risk programs with everything getting to market by 2020.   By 2020, Boeing will have realized that the 737MAX isn’t quite making it for the single aisle airlines.  To remain in business and truly engage with the airlines of the world, Boeing will have to commit to a new 737 replacement and it will have to push the envelope pretty far.

I believe that 737 replacement will start at about the 160 seat capacity (standard 2 class) and run up to 210 to 220 seat capacity.  I think all variants will have trans-continental range and I believe that at least the top two variants will have intercontinental range with ETOPS at introduction.

I do think there will be 3 variants but I also suspect many will speculate that there will be 4 variants.  My expectation will be:

Variant 1:  150 – 160 seats, 3600nm range

Variant 2:  180 – 190 seats, 4200nm range

Variant 3:  210-220 seats, 4200nm range

I think we’ll see a geared turbo fan a la Rolls Royce on the aircraft or a Pratt & Whitney engine.  What I don’t think we’ll see is a CFM engine.  The CFM design isn’t going to make the leap into the next generation.  It held up for the NEO and MAX but only barely.  The Pratt & Whitney is more likely the future.

What else will be different?  The fuselage will not be metal although it likely won’t be like the 787 either.  The wing will be much more efficient and the cockpit will be harmonious with the 787 and the 777-8/9.

What it won’t be is a 757.  As much as everyone hopes for another overpowered 757 to show up, it won’t be that.  Instead, it will be an aicraft uniquely designed to answer a question for 20 or more years.  It might look like a 757 but its design and requirements will make it entirely different.

But first someone has to blink.

Filed under: Aircraft Development by ajax
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About a week ago, I received a comment posted here on FlyingColors that was both rude and offensive.  That post came from a long time Braniff fan located here in Dallas.

Sadly, Brooke Watts isn’t a nice man.

I have found his website (The Braniff Pages) and associated Facebook page to contain a wide array biased comments on Braniff over the years with a vitriol marked for former Braniff CEO Harding Lawrence that borders on rabid.  Frankly, the things said about the Harding era are bizarre and don’t actually reflect many facts.  Hey, that’s my opinion and you’re free to ignore it.

But I don’t think that Brooke is one to really rely upon facts to support arguments.

The bias tends to change the story of the airline, particularly in the Harding years, but I’ve tended to maintain an attitude that it’s his website and his opinions and he’s free to shout them out as he wants.

I regret to inform all of you that Brooke doesn’t really extend the same courtesy to anyone. else.

That’s a shame because he does have quite the collection of items and he could be a great advocate for the airline’s history.

Instead, Brooke tends to threaten and abuse people and does it with such regularity that I cannot ignore it anymore.

About a year ago, Brooke decided that he would attempt to bully me away from a comment on his Facebook page by posting my name and address publicly and demanding to know if I was that person.  Only after he did this did I find out that he’s done it to others several times.   Unfortunately, Brooke has the habit of deleting anything that disagrees with him on his Facebook page.

Fortunately, I kept a screenshot of his bullying for posterity before he deleted it since I had noticed that he had that habit some time earlier.

Still, I tend to look at people acting like that and just leave it be.  After I replied firmly to Brooke suggesting he acted inappropriately in taking that action, he banned me from his Facebook page.

This had the effect of . . . nothing.

I’ve ignored Brooke since then and I’ve counseled a number of other people that he’s attacked both privately and publicly to do the same.  Specifically, I’ve suggested that there is no arguing with someone who spews hate and its best to leave it be.

I’ll admit that the cumulative effect of his actions has upset me at several points for he seems to have a flair for attacking people who actually have nothing to do with him.

And then his latest remark came in the form of a comment made to the FlyingColors blog.  Specifically, he wrote:

“Yes, and you have NO airline experience. You are a tool and an idiot.”

I approved the comment because I’ve generally had a policy of approving all comments that didn’t include blatantly foul language.  This one was borderline but it seemed more right to approve it than not.

I’ve let this be for a period of time because I wanted some clarity before responding, if I did at all.

I think the bullying and insults needs to stop, frankly.  So I’m making it public.  As many pointed out to me when I was growing up, how you act in public really is a direct reflection on upon yourself and what you stand for.

Brooke is free to comment all he wants on his forums.  He’s free to ban people from his websites and forums.  He can send private emails and insult anyone he wishes to.  Including me.  Brooke can shout and denigrate a wide variety of people from the Braniff era if he so wishes.

But I won’t tolerate someone like him being like a low-brow and a cretin.   So his comment gets published here and any other insults he cares to push onto my site will be published as well provided they meet the guideline that I don’t care to have intentionally foul language.  However, there is one caveat:

From here on out, I shall be giving them a place of prominence so that those associating with Brooke can see his behavior clearly.

And for those of you wondering if that could have been Brooke, the IP number of the person who made the post traces back to his home address which, coincidentally, I had available due to a purchase I made on Ebay.  So, it was Brooke, his wife or his dog, I would imagine.

Filed under: Trivia by ajax
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Virgin America appears to be the winner of the 2 gates at Love Field according to numerous reports in Dallas media.  There is no official city announcement to date but reporters are citing two unnamed sources in the City Manager’s office confirming this outcome.  Dallas media is rarely wrong with such sources.

It’s an acceptable outcome for Dallas.  It won’t really increase competition in this marketplace very much except on a few long haul routes out of Dallas but it will be quite interesting to see the effect Virgin America has on those routes as I think it will provide justification for pursuing even more competition in the marketplace.

When I’m asked who I would like to see get those gates, that’s a tough question.  Frankly, after much thought I’ve begun to think that Dallas might have actually been best served with common use and better served by Delta Airlines or American Airlines flying out of those gates.

Let me make an announcement:  There is room in the DFW marketplace for a shorthaul provider using the Q400 or ATR72 to serve markets in the Texas regional area out of DFW.  In my opinion, you could very well make a killing with this airline.

Particularly if you base out of DFW.

From DFW, you could serve:  Houston (2 airports), Austin, San Antonio, Corpus Christi, Brownsville-Harlingen, McAllen, Abilene, Laredo, Midland-Odessa, El Paso, Lubbock, Amarillo, Little Rock, Fayetteville, Tulsa, Oklahoma City, Shreveport, Memphis, and New Orleans.

You can string together low frequency cities for a better load factor and you can do high frequency turns at larger city airports.  And you could probably do a deal with some of the other airlines serving DFW to interconnect.

Your seat costs would be superior, your weather would be more than acceptable and your price would make your competition whimper.

In the meantime, let’s be glad the The Great Gate Fight is over (we hope) and see what comes next.

Filed under: Airline Service, Airports by ajax
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The City of Dallas promises a decision on the Love Field gates held by American Airlines at this time.  Their plan is to have a briefing on the LEK Consulting report, an executive session briefing by the City Attorney and then there will be an open discussion.

In my opinion, the City of Dallas is marching blindly towards major lawsuits from a number of parties.  The City Council has apparently chosen to believe that the sudden demand for these gates means they get to be the big players.

Careful what you ask for.  Airlines have vastly more powerful legal resources and the US Justice Department is never amused at amateur hour getting in the way of a Justice Department decision.

If Dallas chose to acknowledge the lease currently held by American Airlines and permit a reasonable sub-lease, it would be ironclad in its ability to withstand challenge.  Maintaining the status quo, so to speak was its safe and legally appropriate choice.

By choosing to dangle these gates around on the pretext of benefiting The Citizens, Dallas is opening itself up to at least 3 lawsuits by my count.  Lawsuits that will cost Dallas and find Dallas having to bow to a legal settlement that could well be far worse than the present proposed outcome by The Leaseholders (aka American Airlines).

Evidently Dallas has a lot of extra money laying around these days and doesn’t mind the costs to its citizens.  It has already spent $50,000 on consulting to expose itself to these (potential) lawsuits.

If the City of Dallas wishes to promote the welfare of its citizens in this airport, the City should publicly and strongly advocate for a (needed) expansion of Love Field with gates held for common use by all airlines (including Southwest) on a periodic auction basis (annual is best).  That’s what would best benefit the city and certainly that is a “best investment” for The Citizens.

Filed under: Airports, Mergers and Bankruptcy by ajax
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I honestly think it’s only a matter of time before the American Eagle spinoff, Envoy, is shut down.  Unable to get an agreement with the pilots, American Airlines has decided that Envoy will not receive new aircraft for new flying.

Instead, new aircraft will go to other regional airlines and Envoy now faces a 3 to 4 years dry season and a wind-down of the EMB-140 fleet.

In part, I do think that pilots wrongly played tough in their latest negotiations.  I think that getting an agreement that kept them in the game was a far smarter bet than to reject the agreement and find themselves in a business that has no prospects.

If I were a pilot at Envoy, I would move heaven and earth to get a job with a “major” and move on with life.  Only if I had retirement prospects over the next 2 to 3 years would I hang on.

The choices are slim out there.  Pilots cling to the idea that a pilot shortage will change things.

The so called pilot shortage has been spoken of for 10 years and never really has materialized.  Airlines have figured out how to deal with such shortages in ways that don’t count on pilots. I wouldn’t be betting on a shortage that has never materialized to date.  It’s possible that it will but betting on it only makes you look naive at this point.

I fully expect Envoy aka American Eagle will be shutdown in less than 4 years.  I do not think it has good prospects for a merger either.  They have nothing but a very senior pilot base that has shown intransigence towards the changes in the industry.  Why merge with that when you can just wait for the creature to die?

No, I think Envoy will join Comair (ex Delta) in a very undignified death.

Filed under: Airline Fleets, Airline History, Airline News, Mergers and Bankruptcy by ajax
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jetBlue hasn’t impressed me in a long, long time.  That’s a shame because this airline was quite literally the best funded, most successful start-up airline ever until the board panicked and asked David Neeleman to leave the leadership.

Neeleman has two qualities I really like when it comes to airlines.  He knows how to sport real opportunity and meet it with innovative solutions.  He also knows how to learn from mistakes.

Since his departure, jetBlue has worked on growing routes on some of the least profitable routes ever.  This airline has stuck to the northeast corridor and Florida like a bad stain on a white shirt.  There is no real growth and jetBlue let its relationship with American Airlines influence it’s strategies in ways that were laughable.

Laughable because American Airlines tossed aside that relationship instantly upon a change in the regime at AA.  There is no leadership at jetBlue, only stewardship.

With a still low cost workforce, an efficient fleet and an opportunity to draw upon the largest O&D markets in the world, it barely turned a profit.  Other airlines with far less advantages are doing dramatically better.

Without better leadership, I really don’t know where jetBlue goes.  I don’t even necessarily see added value in this airline when it comes to mergers.  Their position at JFK is somewhat valuable but only marginally so as that airport is less effective than La Guardia or Newark.   They have some valuable slots but they’re not ideal.

Spirit Airlines and Allegiant are going to nibble at their business from the bottom.  Southwest and SuperLegacy airlines are going to intrude on their marketshare more and more from the top and there is no great alliance to be had with anyone else in my view.

There was, in my opinion, one great merger opportunity but it would have required a very strong leader with a lot of courage.  I could have seen a merger between jetBlue, Virgin America and Frontier.  There was enough fleet harmony, relatively few seniority issues and core strengths in area of the United States to make that work.

The combined airline could have focused on the West via Virgin America and Frontier Routes using SFO, LAX and DEN and could have used jetBlue assets and strengths to make inroads in the midwest and tie together the East and the West.

But Frontier is going ULCC.  Virgin America has slowed its growth but improved its profitability greatly.  And jetBlue is just stagnant.

More importantly, I don’t see enough of a leader at any of those airlines and I don’t see enough of a leader sitting on the sidelines to make it happen.

jetBlue had its growth and had its momentum killed with the Neeleman ouster and that’s a shame.  It’s gone from jetBlue to jetWho? over the past 8 years and what a lost opportunity that is.

Filed under: Airline News, Mergers and Bankruptcy by ajax
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