New home for Concorde at Manchester

March 25: Manchester Airport’s new environmentally-friendly ‘Concorde Visitor Centre’ – which will display the former British Airways flagship Concorde G-BOAC – was opened by British Airways Chief Executive, Willie Walsh and Manchester Airport Group’s Chief Executive, Geoff Muirhead CBE in the Aviation Viewing Park.

“Manchester Airport was one of 60 high-profile locations worldwide that originally bid to give a home to a retiring Concorde. It gives me great pleasure to see the culmination of that bid today in this magnificent new exhibition area and visitor centre”, said Walsh.

Construction of the Visitor Centre began in December 2008 to protect the historic and much-loved aircraft from the elements. “The Concorde Visitor Centre is the first new building on the airport site to comply with strict construction standards as part of Manchester Airport’s commitment to having carbon neutral operations by 2015,” said Geoff Muirhead CBE. “The new building is not only home to a unique piece of aviation history but it is also an important visual statement of our future low carbon ambitions.”

Since the launch of Manchester Airport’s environment plan in 2006, all designers are tasked to ensure that new buildings are carbon efficient, which is why the Concorde Visitor Centre includes emerging technologies such as biomass heating fuelled by willow grown on the airport site. The hangar also utilises rainwater harvesting and solar panels to capture the sun’s energy and heat the water system.

The new visitor centre includes a corporate hospitality suite, an education centre for local schools and a glass-walled visitor restaurant alongside Concorde that offers views of Manchester Airport’s runways.

Airliner leasing company may need more financing

American International Group Inc.’s (AIG) aircraft-leasing unit International Lease Finance Corporation (ILFC) is seeking billions of dollars in order to stay in business. ILFC disclosed its financing needs in its annual report, filed with the Securities and Exchange Commission on Wednesday, March 25.

ILFC, which leases jets to airlines, owns 955 aircraft, has nine additional aircraft in the fleet classified as finance and sales-type leases and provides fleet management services for 99 aircraft. It has contracts with Boeing and Airbus for 168 new aircraft for delivery through to 2019 with an estimated purchase price of $16.7 billion, of which 49 will be delivered in 2009 at about $3.0 billion. Customers will have to be found for these aircraft, as they were ordered in more buoyant times – non-refundable deposits of $252 million with Boeing and $216 million with Airbus have already been made.

The report highlights downgrades in ILFC’s credit ratings or outlooks by rating agencies, and increased borrowing from the parent company, AIG, to the tune of $1.7 billion to carry the company to the end of April. It makes it clear that without extra funding from April, “without additional support from AIG or obtaining secured financing from a third party lender, in the future there could exist doubt concerning our ability to continue as a going concern.” In 2008 AIG experienced liquidity issues and entered into a credit facility and a guarantee and pledge agreement with the NY Federal Reserve on September 22.

Key to AIG’s ability to provide extra funding is the New York Federal Reserve – AIG has received $182.5 billion in financial support from the government since September 2008. AIG has announced plans to sell ILFC, making getting secured financing from third parties difficult in the current economic climate. The report states that “If we are not able to obtain secured financing or additional support from AIG, we will have to pursue alternative strategies, such as selling aircraft.” What is clear is that ILFC needs some clarity on ownership before its credit rating can be improved – but quite who would want to step into a volatile market now is not.

More gloom as European traffic predicted to decline

March 25: Eurocontrol, the European Organisation for the Safety of Air Navigation, predicts that the economic crunch will take a big bite out of European air traffic in 2009, with a predicted reduction of flights of nearly 5%. Some countries, such as France, Italy, Spain, Germany and Sweden are set to be particularly affected.

According to its forecast, the decline in traffic will affect all sectors – even the low-cost market is not immune, as in November 2008 it saw its first 12-month decline in 15 years. The business aviation market is also declining – down by 21% in February 2009 compared to February 2008. The weak trans-Atlantic traffic caused by the economic and financial crisis has wiped out any benefits of the EU-US Open Skies agreement that came into effect last spring.

“As passengers look for cheaper ticket options, yields are falling and load factors remain weak despite airlines cutting capacity in the winter,” said David Marsh, Head of Forecasting. “All of these factors suggest that this decrease will not be short-lived and the recovery in traffic growth is not expected before the end of 2009 with, at best, weak growth in 2010.”

Etihad completes Abu Dhabi moves

Etihad Airways’ phased move into the new Terminal 3 at Abu Dhabi International Airport has been successfully completed with the transfer this week of the final four long-haul services from Terminal 1.

The final flight moves saw the airline’s Beijing, New Delhi, Johannesburg and Mumbai services move across on Monday, March 23. A total of 31 destinations now operate from Terminal 3.

“The transfer of flights is supported by Etihad’s new passenger facilities, which include new premium lounges as well as improved check-in areas, including a designated check-in zone for our premium customers,” said James Hogan, Etihad Airways’ chief executive. Etihad has 18 destinations remaining served by Terminal 1, including its JFK New York service.

Grim prospects for Airlines

March 24: Geneva – Amid an air of gloom in the aviation industry, the International Air Transport Association (IATA) today announced a pessimistic outlook for the global air transport industry with potential losses of US$4.7 billion in 2009.

In only three months IATA has increased its forecast by US$2.2 billion, reflecting the rapid deterioration of the global economic conditions. Industry revenues are expected to fall by nearly 12% – this compares with just a 7% fall after the events of 11 September 2001. “The state of the airline industry today is grim,” said Giovanni Bisignani, IATA’s Director General and CEO. “Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated a few months ago. Combined with an industry debt of US$170 billion, the pressure on the industry balance sheet is extreme.”

Falling fuel prices are helping to curb even larger losses. “Fuel is the only good news,” said Bisignani. “But the relief of lower fuel prices is overshadowed by falling demand and plummeting revenues. The industry is in intensive care. Airlines face two immediate fundamental challenges: conserving cash and carefully matching capacity to demand.” IATA also revised its forecast losses for 2008 from US$5 billion to US$8.5 billion; the fourth quarter of 2008 was particularly difficult as carriers reported large hedging-related losses and a very sharp fall in premium travel and cargo traffic.

Regional differences remain significant – only the USA market is expected to return a modest profit, estimated at US$100 million. Elsewhere Asia will be the hardest hit, with losses estimated at US$1.7 billion closely followed by Europe at US$1 billion.

If there is a positive message, it’s that the deterioration forecast for 2009 had already happened by January, but weak consumer and business confidence is expected to keep spending and demand for air transport low. “The prospects for airlines are dependant on economic recovery,” said Bisignani. “It will be a grim 2009. And while prospects may improve towards the end of the year, expecting a significant recovery in 2010 would require more optimism than realism.” He also cautioned that this crisis must bring change: “Recovery will not come without change. There is no doubt that this is a resilient industry capable of catalysing economic growth. But we are structurally sick. Bailouts are not the prescription to return to health. Access to global capital, the ability to merge and consolidate and the freedom to access markets are needed to run this industry as normal profitable business.”

Irish workers to strike

The Dublin Airport Authority (DAA) has been informed by the unions SIPTU and Mandate that its members plan to take industrial action at Dublin, Cork and Shannon Airports as part of the Irish Congress of Trade Union’s ‘national day of action’ on Monday March 30.

SIPTU, which represents the airports’ fire, police and security services, has indicated that its members at Dublin, Cork, and Shannon Airports plan to stop work between 04:00 and noon on Monday. Mandate, representing retail workers at Dublin and Cork Airports, has also indicated that it will take industrial action on March 30.

The DAA urged its trade unions to attend the Labour Relations Commission (LRC) to discuss the company’s deteriorating financial situation as a matter of urgency and not to engage in any disruptive industrial action until this process is complete. The DAA wants to discuss the payment of pay increases under the national wage agreement before it has concluded a major cost recovery programme.

Cargo planes crashes at Tokyo airport

March 23: An MD-11 cargo plane belonging to FedEx crashed onto the runway and burst into a ball of fire while attempting to land at Tokyo’s main international airport, killing the pilot and co-pilot, the only two people on board.

Investigators said the accident may have been caused by low-level turbulence or ‘wind shear’, quoted Kazuhito Tanakajima, an aviation safety official at the Transport Ministry.

Unusually strong winds of up to 47 mph were blowing through Narita City in the morning, according to the Japan Meteorological Agency. Strong winds and turbulence have caused other recent incidents at the airport.

Gatwick temporarily closes during bomb scare

March 23: Gatwick airport was put on full alert after a passenger found a note in the toilet of an in-bound Emirates Boeing 777 from Dubai saying a ‘suspicious device’ was onboard.

The airport was closed for 15 minutes while the Explosive Ordnance Disposal unit searched the plane and a man in his 20s was arrested by the Police on suspicion of involvement in a bomb hoax.

Pilatus crash kills 14 in Montana

March 22: A Pilatus PC-12/45 crashed into a cemetery while on approach to Bert Mooney Airport in Butte, Montana. The US National Transportation Safety Board (NTSB) said in a statement that the PC-12, registered as N128CM, crashed at around 15:00 with the loss of 14 people, half of them children. It is reported that the plane may not have been legally allowed to carry more than nine passengers.

N128CM was owned by Eagle Cap Leasing Inc. based at Enterprise, Oregon. The crash is the fourth major plane accident in the US in three months – before 2009 there hadn’t been a fatal accident in the US involving a commercial airliner for more than two years.

Emirates expands A380 services

As Emirates’ experience with the A380 grows, so does its scheduled services. From June 1, the aircraft will debut in Canada while a new Thai route will extend the aircraft’s presence in Asia.

“The A380 will allow Emirates to address some of the unmet need in Toronto while in Bangkok it will help support the Thai government’s new tourism initiatives,” said Emirates President Tim Clark. The change on both services will provide a capacity increase of about 30% for each route.

The airline will accept another four A380 aircraft into its fleet in the next financial year and will introduce services to Seoul in December. It has shrugged off recent press speculation about poor serviceability of its fledgling fleet of ‘super jumbos’, saying “Our confidence in the A380 remains unchanged; it is an excellent aircraft and feedback from our customers thus far has been very positive. We have no plans to cancel any orders.”