Saturday, April 8, 2017

The Electronics Ban

This first appeared on SimpliFlying  as a comment on the article #ELECTRONICSBAN

I traveled from DXB to DTW via AMS with KL and DL. At DXB security was the normal x-ray and walk through metal detectors. However, at the gate in AMS boarding DL all the names of the DXB connecting passengers were on the monitor requesting them to check with the counter. Simply all were required to undergo extra security measures, nothing unusual just a swab of laptops, iPads and tablets for explosive traces and the usual start it for me. This was done in AMM every time I boarded to DTW. So, if it is good enough for DL why is it not good enough for ME carriers. Why go for such an unsafe procedure of putting hundreds of lithium battery powered devices in the aircraft hold? A procedure EASA, the FAA, FSF, IATA and every safety organization has warned against?!!

Just saying

Thursday, March 17, 2016

Plus ça change, plus c'est la même chose

A French proverb meaning the more it changes the more it stays the same. It was great to fly on a B787-9 from DXB to SPL. The aircraft was spacious and the cabin was probably as advertised.
The IFE was great; the selection was good and the screens were the latest model.

I guess great thanks to Boeing and Technology in this case.

But then you hit what matters; the airline offering to mere mortals in economy class. The same ultra firm cushions that are not the best for an 8 hours flight, specially the bottom cushion. The same food offering that has not changed for years and mostly the professional and cold service offered sometimes with a smile.

A modern aircraft with a great IFE does not constitute a great passenger experience; it certainly helps. It is this human interaction during flight and on ground that matters, a concept that seems to allude most airlines. The lip service and rhetoric of improved on board services still stops at the curtain seperating first and business from economy.

So I suppose, plus ça change, plus c'est la même chose 

Thursday, May 14, 2015

US3 vs ME3

The rhetoric has calmed down since the earlier days, from accusations of complicity in 9/11 to massive subsidies and the inability to compete against rich states to the US3 just requiring the US government to seek consultation with the UAE and Qatar regarding subsidies to the ME3.

The rhetoric included issues ranging from subsidies to labor unions and gay rights.
It appears that subsidies are like beauty, strictly in the eye of the beholder. While the ME3 talk about equity the US3 talk about subsidy and then Chapter 11 is thrown in the mix as an undue advantage accorded to US industry. The US3 counter and rightly so that this is the law of the land but then without it the US3 would not be with us today.

As for labor unions; the ME3 employ expatriates who sign up for a package that  pobably is superior to whatever they can get at there home countries, so why would they care about unionizing.  But then labor unions are governed by each country's law, just like Chapter 11 I guess.

Similarly, the anti gay issue has nothing to do with fair competition. The ME3 have gay people in their staff, and as long as they do not break any pertinent country laws, they remain employed. But then do the US3 want the US government to discuss labor unions and LGBT rights laws in the UAE and Qatar, of course not, then why bring it up other than to muddy the waters. After all the track record in the USA when it comes to these two issues is not the most pogrssive, with laws enacted in individual States that roll back the rights to unionize and gay rights.

The position of the US3 is opposed by almost all segments of the industry from Aircraft manufacturers', OEM's, the travel and tourist industry, airports and cities. Then why all the screaming?
The US3 are making record profits and there is very little overlap in the international routes they operate with those of the ME3. Is it an anticompetitive sentiment and a myopic view of what constitutes competition? Partly yes, look at the postion taken against Norwegian 's application to operate to the USA or the stance of Delta against the EXIM bank as an indication. The ME3 counter with; compete on  service; invest in new modern aircraft, state of the art IFE systems and customer service on board and on the ground and passngers will come back.

The issue that really scares the US3 and their EU Lgacy airlines partners is 5th freedom rights from Europe and the ensuing comptition on the North Atlantic market. FedEx and that segment of the market oppose the US3 position because they do not want any changes to these 5th freedom rigths. Emirates Airline's Milan/New York route was opposed by both the US3 and the EU Legacy airlines because it directly affects North Atlantic traffic. Tim Clark, Emirate's president intimated last week that the airline might exercise its 5th freedom rights under the bilateral if it proves profitable. He basically declared if a European city asks Emirates to operate because they feel there isn't enough capacity to the USA then subject to profitability Emirates will operate. Etihad has that option but then they do not really need the bilateral to operate on the North Atlantic, they have their own EU approved equity partners; Alitalia, airberlin to name a few.

Welcome to the global travel market.

Monday, October 27, 2014

Etihad, Lufthansa and EU Nationals Control

The LBA on 16 October 2014 reversed a decision to cancel 34 code share flights of Etihad and Airberlin that was taken a few days earlier. The reason for the earlier cancellation was that these code share flights violated the traffic rights agreement between Germany and the UAE. A meeting later in the month between both governments to discuss the bilateral will clarify things for the future. Lufthansa blames these code shares for the overcapacity on the Abu Dhabi route and called them unjustified.

Lufthansa has lobbied the EU to reexamine the control issues of foreign equity stakes in EU carriers and has lobbied for the courts to block Emirates Milan/JFK flights earlier in April 2014; those flights are now operated on a temporary authority pending an appeal's court decision.

Lufthansa has been more vociferous than most regarding the 3 Gulf carriers expansion into Europe. The EU now is examining whether Etihad controls Airberlin and Alitalia through its equity stakes and is also looking at the Delta/Virgin Atlantic deal. This has prompted the Swiss authorities to look at Etihad's control of Darwin Airlines now branded Etihad Regional.

The issue of foreign investors having control of EU carriers is  becoming a thorny issue. There is a needed balance required between control and the investment risk of bailing out a European carrier and preserving jobs and airline services to communities. The major EU legacy carriers are coming under pressure from EU LCCs and apparently from the Gulf carriers that they are not willing to invest more but are looking to cut costs and curtail services. Air France/KLM declined to increase its stake in Alitalia and Lufthansa was not interested in a minority stake. Etihad worked very hard to get the unions and the creditors to accept its terms for its USD 750 millions direct investment for a 49% equity stake in Alitalia. The problems of Lufthansa and AF/KL are compounded by the mega orders from the Gulf carriers for Airbus aircraft with the associated economic fallout of order cancellations.

Etihad will modify its agreements with its equity partners to comply with the EU and Swiss regulators control requirements. Etihad did the same in India when the regulators questioned its control of the Jet Airways board. Etihad will not jeopardize its strategy for expansion; one that is based on equity partnerships providing access to new markets, cost savings in aircraft acquisition, maintenance and other services and more traffic through its Abu Dhabi hub.

The airline industry is more global than ever; the EU has to balance its requirements and need of EU nationals control of its airlines and the foreign investment in these airlines. These investments preserve jobs and services in Europe at a time when its economies are under pressure and their own carriers are not willing to invest.

Friday, October 10, 2014

The Surplus Parts Market A Force Of Stability

In a recent article in AINonline "Surplus Parts Costs Forecast To Drop" it was suggested that prices will go down as more and more aircraft are parted out pushing "the current prices downwards making the already tense market even more competitive".

In principle, this is true to a certain extent.

Boeing and Airbus have both announced production rate increases on their current aircraft types.   Taking into consideration that as an aircraft type evolves and technology improvements are introduced; parts interchangeability is no longer maintained between the latest aircraft off the production line and an aircraft produced 2 or 4 years earlier. This is valid especially for avionics components, where software changes are the most common.

OEMs have to meet both the challenge of  supporting the production rate increases and that of supplying parts to support the industry with the latest and earlier component configurations; this will impose production pressures and supply difficulties.

As the number of retired aircraft increases to almost a 1000 aircraft per year in the next decade, so will the number of part-outs and the availability of surplus parts. However, these surplus components and parts will not support the latest and recent configurations of the active fleet, but will support the earlier and older configuration versions.

The availability of surplus parts for mature aircraft configurations of the popular fleets will tend to;

  • ease off the pressure for OEMs to support the earlier aircraft configurations; and
  • reduce prices in the aftermarket as a whole but remain competitive for avionics components and a variety of other parts.
The surplus market is detrimental in maintaining a stable components and parts supply for the mature aircraft.


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