New York (AirGuideBusiness - Company Watch) Nov 18, 2012
Earlier this month, Boeing announced the delivery of its 7,370th 737, which flew off to new customer Lion Air of Indonesia on Nov. 5. Add to these 7,370 planes already delivered another 2,845 as-yet-undelivered 737s sitting in Boeing's backlog, and the 737 tops 10,000 units ordered quite handily. But that does pose a problem for Boeing. Boeing's most recent 10-Q filing with the SEC lays out the problem clearly. Boeing owes its customers 2,845 planes. It's currently producing the birds, however, at the rate of only 35 per month. That's up from 31.5 planes per month earlier this year, but even so, it means that Boeing's backlog on the 737 alone now runs to six years, nine months -- and that's if it sells not a single new 737. (In fact, though, sales of the new "MAX" variant are already through the roof, recently topping 900 units of this model alone.) On the one hand, that's a nice problem to have. There's not a lot of businesses out there that can guarantee you a rock solid revenue stream nearly seven years long. On the other hand, though, look at this from the perspective of the customer. Say you need a new plane now. Say you want to place an order with Boeing. How are you going to react to being told "get in line, we'll have it ready for you in... 2018"? Think you might give Airbus a call and see if they can turn around your order any faster than that? Think you might even give an upstart like Canada's Bombardier a chance to win your business, if they offer a sweet enough deal on a shiny new CSeries? You can actually see this happening, in fact, over in China, where Boeing's backlog on the popular 737 is likely contributing to the success of local plane builder Commercial Aircraft Corp, which just landed 50 new orders for its C919 regional jetliner. This week, domestic operators Hebei Aviation and Joy Air each signed up for 20 new C919s. Meanwhile, General Electric's GE Capital Aviation Services has doubled its initial order of 10 C919s. Boasting engines and avionics from recognized Western airplane parts suppliers like GE and Rockwell Collins, COMAC is even starting to attract interest from international buyers, including a sister airline of British Airways. So what's Boeing to do if it wants to keep its current customers happy, and not discourage potential new buyers? Simple: It must build planes faster. Already, the company has announced plans to ramp production up to 38 planes per month by early next year, followed by a jump to 42 planes per month in Q2 2014. The Boeing 737 Technical Site thinks they'll go even further, recently asserting that Boeing has a plan to open a new assembly line and increase production to 60 aircraft per month. That's nearly twice today's pace -- two entire passenger planes, fully outfitted, rolling off the assembly line every day. Incredible as that sounds, Boeing seemed to confirm the theory in a statement yesterday, noting that a new production line under construction in Renton, Wash., that will be building the 737 MAX will "eventually" be used "for future rate increases." According to the company: "We don't have any specific plans when that next rate increase will be, but we're pretty sure it's coming." For the record, investors seem to see a big opportunity coming, too. Wall Street analysts expect to see double-digit profit growth at Boeing over the next five years. But the Foolish question to ask here is: What if it doesn't come? What if the growth of the global air travel industry gets delayed? After all, it's not as if it's all that hard to cancel even a supposedly "firm" order in the airline business. Why, just a few months ago, Qantas wiggled out of an order for 35 Boeing Dreamliners, citing little more than a "change" in its "circumstances." And it's not only Qantas finding its need for new planes may be less urgent than it once thought. Last quarter, revenue at Delta Air Lines grew a bare 1% in comparison to the previous year. Sure, China's doing better than that. But rumbles of an economic slowdown can be heard even over there. If you take Chinese travel agency Ctrip.com as a rough proxy for the industry, for example, well, revenues were up 20% at Ctrip last quarter. That's a good number. Don't get me wrong. But does even a 20% growth in business in China justify predictions that Boeing will need to nearly double the rate at which it builds its planes to keep up with demand? Seems to me, the danger here is that Boeing cold be overbuilding to satisfy demand -- demand which may evaporate in the absence of a strong economic rebound. Nov 16, 2012
Fastjet has unveiled its new website, with reservations now open for domestic routes within Tanzania. Twice-daily services from Dar es Salaam to Kilimanjaro and Mwanza will launch on November 29, with flights from Zanzibar, Entebbe, Mobasa and Nairobi Ocoming soonO. Last week Fastjet unveiled its logo and livery, featuring the African Grey Parrot. Fastjet now has three Airbus A319 aircraft in its fleet, which are being painted with the new livery before being flown to Tanzania for the launch. Fares start from 32,000Tsh (around US$20) one-way excluding taxes and charges. Ancilliary charges include US$5 for one piece of checked luggage up to 20kg, US$20 for changes to departure date, and paid-for food and beverages from the Sky Caf. Similar to Easyjet (the two carriers both having been founded by Sir Stelios Haji-Ioannou), there is no weight restriction for hand luggage, so long as the bag is no larger than 56 x 45 x 25cm and passengers are Oable to place and retrieve the item of baggage safely in the overhead lockersO . Travellers will be allocated seats at the airport during check-in. The carrier has also launched Facebook, Twitter and mobile sites. Nov 16, 2012
UATP and the Latin American and Caribbean Air Transport Association (ALTA) will host Airline Distribution 2013, the interactive global forum dedicated to distribution issues facing today's airline industry. Airline Distribution 2013 will take place 16-18 April at the InterContinental Miami. "Airline Distribution is an excellent opportunity for attendees to learn from industry experts and their experiences with today's complex distribution issues," said Ralph Kaiser, President and CEO, UATP. "We look forward to hosting this forum with ALTA. With more than three decades of experience in the industry, ALTA will provide an immeasurable amount of knowledge and information to the attendees." Airline Distribution is UATP's annual conference that focuses on significant distribution issues affecting airlines worldwide. It is a neutral forum that allows attendees to contribute ideas among industry leaders who are working to solve the complicated distribution questions facing airlines today. "Airline Distribution brings together some of our industry's greatest minds to solve the complex issues airlines all over the world are experiencing today," said Alex de Gunten, Executive Director, ALTA. "We are proud to be a part of this event that is so important to our industry and helping shape the direction of its future." UATP has been hosting Airline Distribution for over ten (10) years. The event draws industry experts from around the globe, offering unparalleled education and networking opportunities, focusing on the many facets of airline distribution. Airline Distribution 2013 will feature industry updates on such items as "direct connect" and the Latin American market, along with airline executive keynotes and roundtables focusing on the keys to driving growth and profitability. To learn more about Airline Distribution 2013, please visit: http://uatp.com/news-and-events/AD-2013-Home.html For more information, visit http://uatp.com or www.alta.aero About UATP UATP accounts are accepted as a form of payment for corporate business travel worldwide by airlines, travel agencies and Amtrak[umlaut]. UATP accounts are issued by: Air New Zealand (ANZFF.PK); American Airlines (AAMRQ.PK); Austrian Airlines; China Eastern Airlines Co., Ltd; Delta Air Lines (DAL); EL AL Israel Airlines Ltd; GOL Linhas aereas inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4); Japan Airlines (9201:JP); Qantas Airways, Ltd. (QUBSF.PK); United Airlines (UAL); and US Airways (LCC). AirPlus International issues the UATP-based Company Account for: British Airways; United Airlines (UAL); Swiss International Air Lines AG; Air China Limited and Lufthansa German Airlines. About ALTA ALTA (Latin American and Caribbean Air Transport Association) is a private, non-profit organization, whose member airlines represent more than 90 percent of the region's commercial air traffic. ALTA coordinates the collaborative efforts of its members in order to facilitate the development of safer, more efficient and environmentally friendly air transport in the Latin America and Caribbean region for the mutual benefit of the association's members, their customers and the industry. Visit ALTA at www.alta.aero. Member Airlines: ABSA, AeroGal, Aerolneas Argentinas, Aeromexico, Aeromexico Connect, Air Jamaica, Avianca, Avianca Brasil, Aviateca, Bahamasair, Caribbean Airlines, Cayman Airways, Copa Airlines, Copa Airlines Colombia, Cubana de Aviacin, GOL, InselAir, Lacsa, LAN, LAN Argentina, LAN Cargo, LAN Colombia, LANCO, LAN Ecuador, LAN Express, LAN Peru, LIAT, MasAir, TACA, TACA Peru, TAM, TAM Mercosur, TAME, Volaris Associate Members: Air Canada, Delta Air Lines, Iberia, JetBlue Airways, TAP Portugal, Turkish Airlines, United Airlines, UPS Affiliate Members: Airbus, Air Lease Corp., Airline Business, Amadeus, ARINC, Ascend, ATR, AvGroup, Avio-Diepen, Bain & Company, Barfield, Boeing, Bombardier, CFM, Chromalloy, Embraer, GE Aviation, Hahn Air, HEICO, Holland & Knight, ICF SH&E, ILFC, Ilyushin Finance Co., Lufthansa Consulting, Lufthansa Systems, MARSH Aviation, Mitsubishi Aircraft Corporation, OAG, Petrobras Aviation, Pratt & Whitney, Rockwell Collins, ROUTES, SABRE...