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Global airlines to lose $2.8B in 2010 -- not the $5.6B previously forecast

2010-03-11T08:51:00.001-05:00

Carriers in Asia and Latin America are leading the global airline industry to a stronger-than-expected recovery in 2010, an international trade association said Thursday. The group had previously forecast worldwide losses of $5.6 billion for the year but now says total losses will likely be just half that number. Europe and North America continue to lag other regions, however, as a weak economic recovery limits demand for business-class travel.
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Airline study finds 2% boost in fuel economy

2010-03-11T08:51:00.000-05:00

A series of experiments on trans-Atlantic routes has shown airlines can cut their fuel consumption by about 2%, the FAA said in a report released on Tuesday. American Airlines, Delta Air Lines and Boeing Co. were among the U.S. companies taking part in the ongoing study, which included about 30 participants in all. Making relatively small adjustments, including engine thrust and cruising altitude, can have major implications for fuel savings, the study found.
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JetBlue delays orders for new aircraft

2010-03-11T08:49:00.001-05:00

JetBlue Airways CEO Dave Barger told investors Tuesday the company will cut orders for new aircraft next year to slow growth and control costs. The order for Airbus A320s was dropped from eight to four next year, and the schedules for deliveries of A320s and Embraer 190s have been changed, some being pushed as far back as 2016.
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Chairman: EADS won't bid solo against Boeing for tanker contract

2010-03-11T08:49:00.000-05:00

In response to Northrop Grumman's decision not to bid for the Air Force aerial tanker contract, EADS Chairman Louis Gallois said EADS would not move ahead with a solo bid against Boeing, and he noted that the request for proposals is based on a smaller airplane that gives a big advantage to Boeing's 767 over the A330 Multirole Tanker Transport. "What is the consequence of that? The U.S. Air Force won't have the most modern airplane in the world. It means Australia, the U.K., Saudi Arabia, the Emirates will have a more capable airplane than the U.S. Air Force," he said.
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LaHood: Washington looking at NextGen funding help

2010-03-11T08:48:00.000-05:00

The Obama administration "wants to be helpful" in funding the NextGen air-traffic control system, Transportation Secretary Ray LaHood told airline executives on Tuesday, while refusing to give any details on what that help might look like. Airlines have complained that Washington is providing $8 billion to high-speed rail projects while failing to help the air travel industry in the face of a severe downturn. While stressing the importance of modernizing ATC, LaHood said high-speed rail will continue to be a priority for the administration. "This is the president's vision, this is the vice president's vision, this is America's vision ... We're going to get into the high-speed rail business," he said.
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Donley: F-35 may face overrun, but there are no alternatives

2010-03-10T08:50:00.003-05:00

A major cost overrun in the F-35 Joint Strike Fighter program is likely, and, under the Nunn-McCurdy statute, the overrun would prompt a mandatory review of alternatives, but there aren't really any alternatives to consider, said Air Force Secretary Michael Donley. "This is a fifth-generation fighter/attack capability," he told reporters last week. "There are no alternatives to that in our system. Yes, you can build the 4.5-generation, enhanced-capability F-15 kind of capability. But, really there are no good alternatives to F-35 at this point."
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Airlines' on-time performance for January beats December

2010-03-10T08:50:00.002-05:00

The 18 biggest U.S. airlines improved their overall on-time arrival performance rate in January compared with the previous month. Nearly 79% of flights were on time in January 2009 -- the best for that month since 2006 -- up from 77% in December, according to monthly data from the government. The report also delves into cancellations, mishandled luggage, customer complaints and other aspects of the airline business.
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American Airlines still far from agreement with pilots, CFO says

2010-03-10T08:50:00.001-05:00

American Airlines and its pilots are "far apart" in their contract negotiations, CFO Tom Horton said Tuesday, while refusing to comment on talks with two other major employee groups. "We are negotiating in good faith," Horton said, adding that the market eventually would set salary levels. "It is our objective to see our people fairly compensated and well-compensated, but also that the company is competitive and strong for the long term."
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Continental CEO says he's willing to discuss consolidation

2010-03-10T08:50:00.000-05:00

Jeff Smisek, CEO at Continental Airlines, said he would consider consolidation to maintain competitiveness. "We'll continue to watch competitive dynamics," Smisek said. "If we think it's in our best interest to bulk up defensively, we'll do so. But I think it's premature to make that decision at this time."
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Delta, United express optimism about revenue

2010-03-10T08:49:00.000-05:00

Delta and United airlines told investors Tuesday that economic trends are improving and they may increase their profit margins by charging more fees for services while cutting costs. "The return of higher quality traffic, combined with the significant reductions in capacity that we undertook in 2009, has really begun to improve our relative revenue results," said United CFO Kathryn Mikells.
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Airline finances improved in Q4

2010-02-03T11:34:00.003-05:00

Early reports from some airlines suggest that the industry's financial performance continued to improve in the fourth quarter of last year, the industry association IATA said on Wednesday. A strong upturn in air travel and freight demand at the end of the year, as capacity cuts remain in place, is offsetting the rise in fuel prices which markets now expect to moderate, the International Air Transport Association said. But revenues in both business and economy classes are still sharply lower than in early 2008, it said. "There is still some way to go -- perhaps several years -- before the revenue environment can be described as having 'recovered'," IATA said. IATA, which groups 230 airlines including Lufthansa, American Airlines and Cathay Pacific has forecast that airlines will lose $5.6 billion this year after $11 billion in 2009.
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Iberia Sets British Airways Merger Date

2010-02-03T11:34:00.001-05:00

Spanish airline Iberia has slated February 12 and February 25 as possible dates to sign the memorandum of understanding for its merger with British Airways, financial daily Cinco Dias reported on Wednesday. Iberia hosted a summit with 90 top executives last week in Madrid, during which it set the date for the planned tie-up and a target to grow its long-haul operation by 10 percent in two years, Cinco Dias cited sources familiar with the summit saying. Iberia and BA announced a memorandum of understanding in November for a merger to create the world's third largest airline by revenue. The main stumbling block to the merger will be an agreement on how to address the British carrier's multi-billion pound pension fund deficit. BA posts third-quarter to end-December results on Friday, with analysts expecting an operating loss of between GBP90 million and GBP100 million. Iberia reports its full-year to December results on February 24.
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Moody's affirms Textron's ratings, ups outlook

2010-02-02T11:31:00.000-05:00

Moody's Investors Service on Tuesday affirmed the ratings of Textron Inc. and its finance subsidiary Textron Financial Corp., and upgraded the rating outlook. The conglomerate, parent of Cessna Aircraft Co., Bell Helicopter and other companies that produce items ranging from golf carts to tools to unmanned aircraft systems for the Army, kept its Baa3 rating for its senior unsecured debt. Its short-term rating was kept at Prime-3. Moody's upgraded the rating outlook to stable from negative, citing improved liquidity at the parent organization and better-than-expected progress in the liquidation of certain assets held by the financial unit. "We estimate cash on hand will be sufficient to cover the substantial portion of the scheduled debt maturities of Textron and TFC through 2011," Moody's said. The company faces $3 billion of bank credit facilities maturing in April 2012, so continued progress in liquidation and stability in its manufacturing units is important, said Bob Jankowitz of Moody's. Bell and Textron Systems are expected to be steady performers in the next few years, supported by continued defense spending, Moody's said. Bell can also count on revenue from helicopter servicing and commercial sales. Nevertheless, the company has a lot of debt and Cessna, which is historically its largest profit producer, faces challenges even as the economy recovers, Moody's said. Its profit has been hit harder than expected, even during a downturn. It is critical for the unit to improve profit and operating margin to maintain the rating. The rating could be lowered if Textron's free cash flow falls below $300 million for any 12-month forward period, if Cessna doesn't improve its operating margin, cash on hand falls below $1 billion or enough to at least cover the next two quarters of debt payments. The rating could also be threatened if the financial unit has to book heavy write-downs or if it has difficulty collecting payments. "A positive rating action is unlikely for some time," Moody's said. In afternoon trading, Textron shares added 12 cents to $20.76.
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B/E Aerospace Swings To Q4 Profit

2010-02-02T11:30:00.000-05:00

"As airline traffic improves and the need to refurbish seats continues... volumes get better," -- Howard Rubel, Jefferies & Co. B/E Aerospace, the world's biggest supplier of aircraft interior products, posted better-than-expected quarterly results on higher bookings at its commercial aircraft segment. For the fourth quarter ended December 31, the company reported net income of USD33.3 million, compared with a loss of USD253.6 million a year ago. Revenue fell 9 percent to USD479.4 million. Sales at the commercial aircraft segment increased to USD239 million from USD233.2 million. The company said bookings improved during the fourth quarter to about USD480 million, which represented a book-to-bill ratio of 1 to 1. Book-to-bill ratio compares orders on the books with those filled. B/E Aerospace's free cash flow of USD53.2 million for the quarter represented a free cash flow conversion rate of 160 percent of net earnings, the company said. The company forecast first-quarter earnings below estimates on continued weak demand, but said it expects revenue in the remaining three quarters of the fiscal to be "very much better" as heavy aircraft maintenance will be required due to a projected increase in 2010 air traffic. Global airlines continue to suffer from weak demand for passenger travel, especially in the premium segment, despite nascent signs of a recovery, chief executive Amin Khoury said. "As airline traffic improves and the need to refurbish seats continues... volumes get better. They also have added to their backlog, so they have more visibility," Jefferies & Co analyst Howard Rubel said. Weakness in air travel had led the global airline industry to cut flights and ground aircraft, hurting maintenance revenue for parts suppliers including Goodrich and Rockwell Collins. B/E Aerospace, whose customers include leading plane makers Airbus and Boeing, also said it expects a "significant" increase in revenue, earnings and cash flows beginning 2011.
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Defense Industry Feels Pressure As Scrutiny of Spending Grows

2010-02-02T11:29:00.000-05:00

After a record run during the Bush administration, defense contractors are starting to play defense. The latest quarter's earnings foreshadow the pressures that lie ahead for some of them. While Raytheon Co. did well, with profit up 20%, Rockwell Collins Inc.'s profit slid 20%. Lockheed Martin Corp.'s earnings just inched ahead. Rockwell Collins noted its government markets are "more challenged" by the budgetary pressures, and it has built that into its projections. The company believes that represents the low point, and expects defense sales will rise 12% for the year. "Maybe more than anything else we recognized that we and our customers are facing a new reality," Lockheed Martin CEO Robert Stevens said Thursday, "as they confront expanding mission requirements and greater fiscal pressure that's simply not going to go away in the near term." Lockheed Martin ended a year that brought the high-profile cancellations of the F-22 fighter jet and presidential helicopter programs. Mr. Stevens noted that Lockheed faced "some sizable near-term operational and financial challenges" in mid-2009 as the new administration shifted priorities and several of the company's programs "were terminated or canceled or capped, some with immediate effect." To be sure, how well the contractors are faring depends on which programs they are involved in. General Dynamics Corp., for instance, said the federal defense budget for 2010 "fully supported our core programs." Raytheon executives, however, don't sound particularly concerned about any dark clouds on the horizon. Chief Executive William Swanson said performance is key to maintaining U.S. government business, and "if your program isn't running right, then you ought to expect some bad things to happen to it." There is increased scrutiny from Washington "starting to take place," he said. "The government has an obligation and will put added pressure" on contractors to perform well. Mr. Swanson said, "We are seeing strong demand in important areas to Raytheon," including missile defense. "The administration has identified our Standard Missile-3 and X-Band Radars as critical elements in the missile defense systems for the U.S. and our allies around the world." Raytheon has navigated the shoals well so far, which helps explain some of its swagger. The Waltham, Mass., company ended 2009 with a $37 billion backlog, "including the highest year-end funded backlog in the company's history," Mr. Swanson said. Raytheon added 2,000 employees last year, taking its work force to 75,000. It also helps that the company operates in 80 countries, and Mr. Swanson said 30% of total bookings and 21% of total sales in 2009 came from international customers. And "we believe that our international business will continue to be a key driver in Raytheon's growth," he added.More details on defense-budget pressures are coming Monday, when the White House releases its fiscal 2011 proposal. The Pentagon is expected to continue to try to cut Boeing Co.'s C-17 transport plane and an alternate-engine design used in F-35 Lightning II, known as the Joint Strike Fighter. Unlike last year, analysts and executives don't expect a head-on assault on the Pentagon's costliest weapons programs. The year was bumpy, but Lockheed isn't about to go begging. Backlog at year end was about $78 billion, up $1.6 billion versus the third quarter, Lockheed Chief Financial Officer Bruce Tanner said. Its CEO, Mr. Stevens, said longer-term business prospects "have been strongly reinforced" with commitments to tactical aircraft, missile defense, space systems, intelligence and reconnaissance systems.
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PASSUR Aerospace Reports Revenue Increase of 18% for Fiscal Year 2009

2010-02-01T11:28:00.001-05:00

PASSUR Aerospace, Inc., a business intelligence and predictive analytics company, announced a revenue increase of 18% to $8,960,000 for the year ended October 31, 2009, compared to $7,572,000 in FY2008. Operating profit for FY2009 was up approximately 16% to $1,271,000 compared to $1,094,000 in FY2008. Net profit was $154,000 or $.03 per diluted share compared to $495,000 or $.09 per diluted share in FY2008. "Even with the challenging economic environment for our customers, PASSUR's sales growth reflects strong customer demand because of the Company's focus on providing measurable and actionable solutions which save our customers money, and improve the safety and security of the airspace," said Jim Barry, PASSUR Aerospace's President & CEO. "This is our fourth consecutive year of profitable growth, we continue to grow our sales, and we're optimistic about achieving our objectives," said G.S. Beckwith Gilbert, PASSUR Aerospace's Chairman of the Board.
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Business air travel seems to be taking off again

2010-02-01T11:28:00.000-05:00

After hitting a stiff economic head wind in 2009, business air travel appears to be reviving. The heads of major airlines, including United, American and Delta, said they're seeing the early indications of a resurgence as corporations get reacquainted with the idea of spending money on travel. "We are seeing signs that business travelers, who cut way back in 2009, may be ready to take to the skies again," American Airlines chief executive Gerard Arpey said this week as the company reported its quarterly earnings. For most airlines, overall passenger demand has been down, but airlines have been particularly grieving the loss of business travel, which is the industry's most lucrative sector. So the return of "road warriors" — even if it is a tentative increase since the economy tanked in the fall of 2008 — is most welcome. Delta and United officials report business bookings are up about 10 percent this month over January 2009. "Business travelers are returning," Delta CEO Ed Bastian declared Tuesday during a call to discuss the carrier's fourth-quarter earnings. For United, Denver's largest airline, it means closing the gap on profitability, said United chief financial officer Kathryn Mikells. The National Business Travel Association also sees "green shoots" beginning to spring up. "With air-travel and car-rental costs expected to remain nearly flat and hotel rates expected to decline, businesses expect to travel more," the NBTA said. Travel volumes should grow this year, according to about 70 percent of travel managers surveyed late last year, said NBTA spokesman Caleb Tiller. Survey respondents were managers at mid-size and large companies who oversee about $300 billion in business travel. Two-thirds of them predicted total spending will rise, Tiller said, while the other third said they envision more trips for the same amount of dollars. In downturns, low-cost airlines such as Southwest gain. "Bookings have risen, but they are not where we would like them to be," said Southwest spokesman Chris Mainz. Some companies such as Ball Corp. of Broomfield continue to keep a tight rein on travel. Spokesman Scott McCarty said travel isn't restricted but an explanation is required when the lowest-possible fare isn't booked. "Companies are thoughtful about spending travel dollars," said Andrea Shpall, president of Polk Majestic Travel Group in Denver. Some have asked for help in managing travel budgets. To keep the momentum going, airlines will be pitching to corporate America, one expert predicted. "As we go into February, March and April, you're going to see a lot of juice out there to swing business travelers to a particular airline," said Tom Parsons, CEO of BestFares.com.
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Korean Air Q4 op profit jumps on cargo recovery

2010-01-22T12:24:00.001-05:00

Korean Air Co, South Korea's top airliner, reported on Friday a nearly seven-fold jump in quarterly operating profit, as a cargo sector recovery picked up pace and the stronger won KRW= lowered costs. Korean Air posted a 154 billion won ($134.7 million) operating profit in the October-December quarter, above a consensus forecast of a 120 billion won profit from Thomson Reuters I/B/E/S. The result improved from a 22.6 billion won operating profit a year earlier and 100.1 billion won earned in July-September. Korean Air, also the largest cargo carrier among commercial airlines, is expected to enjoy a full recovery this year as the strengthening won boosts outbound travel demand and export growth in the South Korean technology sector supports high-yield cargo shipments. Shares in Korean Air climbed 14.4 percent in the fourth quarter, outperforming the broader market's 0.6 percent gain.
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Continental posts surprising 4Q profit

2010-01-21T12:24:00.000-05:00

Continental Airlines Inc. earned a surprising profit in the fourth quarter thanks to higher traffic and lower fuel spending. Continental said Thursday that it earned $85 million in the quarter. Without some special items, including an income tax gain, the company would have earned $4 million, or 3 cents per share. Analysts expected a loss of 7 cents per share. The biggest difference from a year ago was spending on fuel, which plunged by about one-third, as prices were much lower than they were in late 2008. The airline spent $388 million less on fuel than it did a year earlier. Houston-based Continental, the nation's fourth-largest airline, boosted passenger traffic by 3.5 percent in the quarter including its commuter airline affiliates. But revenue fell 8.3 percent, to $3.18 billion, because of a decline in high-paying customers, who were sidelined by the recession. Passenger revenue per available seat mile, a closely watched indicator for airlines, fell 9 percent. Still, that was much better than the 17.9 percent and 17.7 percent declines of the previous two quarters, and a sign that deep discounting of fares may be slowing. Chairman and CEO Jeff Smisek said some business traffic is increasing, but "we likely have a long and slow road to recovery." Big U.S. airlines have been hit hard by the recession, which led to a slump in traffic in the U.S. and on trans-Atlantic routes. Continental's surprising profit comes a day after American Airlines said international bookings were running ahead of last year's pace and high-paying customers may be returning, raising hopes for a recovery in travel. Continental and other airlines have also been helped by fees for checking baggage and other services, which made up for some of the decline in ticket revenue. This month, Continental raised its checked-bag fees. The fourth-quarter profit provided an upbeat ending to Continental's second straight money-losing year. For all of 2009, Continental lost $282 million, or $2.18 per share, as revenue plunged 17.4 percent, to $12.59 billion. The company includes Continental Express and Continental Connection commuter airlines. There was little premarket activity in Continental shares, which closed 19 cents higher Wednesday at $20.62.
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Southwest Airlines posts 4Q profit, extends string of profitable years to 37

2010-01-21T12:23:00.000-05:00

Flying against the headwinds of a recession and volatile fuel prices, Southwest Airlines Co. made money in the fourth quarter and extended its string of annual profits to 37 years. Southwest said Thursday it earned $116 million in the quarter, which was enough to lift the company to a full-year profit of $99 million after it lost money during the first nine months of 2009. Traffic on the nation's largest discount carrier has been rising in recent months while it's been falling on many competitors. But many of Southwest's customers are leisure passengers responding to the airline's constant fare sales, not the high-priced business travelers coveted by airlines. Traffic rose at Southwest each month of the fourth quarter, with paying passengers flying 5.3 percent more miles than in the same period of 2008. There were fewer flights and fewer empty seats. Southwest believes it is taking customers from other airlines by letting passengers check two bags for free, but it has boosted ticket revenue by charging fees for services such as flying unaccompanied minors and pets. The fourth-quarter profit of 56 cents per share included gains from fuel-hedging contracts. Without those items, Southwest, based in Dallas, said it would have earned $74 million, or 10 cents per share. Analysts, who don't count extra items in their forecasts, expected profit of 7 cents per share. Revenue fell less than 1 percent, to $2.71 billion. That compared to declines of 7 percent and 8 percent at American Airlines and Continental. Continental reported earnings earlier Thursday. American posted its results Wednesday. Spending dropped 4.5 percent, helped by a 13.5 percent reduction in fuel costs. Throughout its history, Southwest has grown rapidly and pushed into new markets. Last year, however, it reduced flights and capacity, and Kelly said the company has no plans for growth in 2010. But Southwest continues to tinker with its schedule, pruning unprofitable flights. It announced Thursday that it would add four more flights in Denver in June. For all of 2009, Southwest's $99 million profit equaled 13 cents per share, down from 2008 earnings of $178 million, or 24 cents per share. Full-year revenue fell 6.1 percent, to $10.35 billion. In afternoon trading, Southwest shares rose 4 cents to $11.37.
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American Airlines posts 4Q loss

2010-01-20T12:23:00.002-05:00

American Airlines ended 2009 with a loss and 2010 could have a rocky start if the carrier loses a key partner in the Asian market. The parent of American says it lost $344 million in the fourth quarter and nearly $1.5 billion for all of 2009 as traffic fell and many business travelers stayed home or bought cheaper tickets in the weak economy. Excluding special items, including a tax gain, AMR said Wednesday it would have lost $415 million, or $1.25 per share, in the fourth quarter. Analysts, who usually exclude items from their calculations, expected a loss of $1.23 per share. Revenue fell 7.4 percent, to $5.06 billion, slightly higher than analysts' forecast of $5.03 billion, according to Thomson Reuters. Now that the fourth-quarter accounting is done, investors will turn their attention to Japan, where American and parent AMR Corp. are scrambling to hold on to a valuable partnership with Japan Airlines. JAL filed for bankruptcy protection on Tuesday, and reports in the Japanese press say the airline wants to dump American and form a partnership with Delta Air Lines. That would mean a big decline in revenue for American. American is also waiting to learn whether U.S. regulators will approve antitrust immunity for an international joint venture with British Airways and other carriers. A decision had been expected last fall, but despite the delay, Arpey said Wednesday that American still expects its request to be approved. For all of 2009, AMR lost $1.47 billion, or $4.99 per share, compared with a loss of $2.12 billion, or $8.16 per share, in 2008. Revenue tumbled 16.2 percent to $19.92 billion, as $3.85 billion in revenue vanished with slow demand for travel. Spending on fuel fell 38 percent, however, to $5.55 billion a savings of $4.46 billion as prices fell from record levels in 2008. AMR, based in Fort Worth, also owns the American Eagle commuter airline.
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ANA still faces competition from JAL

2010-01-20T12:23:00.001-05:00

The English Web site of Japan Airlines Corp. now proclaims, "JAL. We're here to stay," with confidence that probably makes some executives at rival All Nippon Airways cringe. The equivalent message on JAL's Japanese site also assures the flying public that the airline will continue operating as usual, even after its filing late Tuesday for court-led rehabilitation -- similar to a U.S. Chapter 11 bankruptcy filing. See full story on JAL's bankruptcy filing. Both domestic and international media abound with stories of JAL -- a former national airline, whom some investors expected the government to support at all costs -- as a metaphor for the problems of the nation at large. An article in Japanese business daily Nikkei on Monday by Ikuo Hirata, its editorial page editor, called JAL a "microcosm of Japan's woes," because of its dependence on public funds and sense of entitlement among middle-age employees and retirees. JAL's latest and most drastic restructuring will also include public money, for the fourth time since 2001. The government-backed Enterprise Turnaround Initiative Corp. of Japan will inject 300 billion yen ($3.3 billion) into JAL so that it can continue operations. JAL will also get a 600 billion-yen credit line, and 730 billion yen in debt waivers.
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Air China to Return to Profit in 2009 on Hedging, Higher Travel

2010-01-20T12:23:00.000-05:00

Air China Ltd., the nation’s largest international carrier, said it returned to profit last year as domestic travel recovered and it posted gains on fuel hedging. The profit for 2009, which wasn’t quantified, compares with a 9.15 billion yuan ($1.34 billion) loss the previous year, the carrier said in a statement to the Hong Kong stock exchange yesterday. Air China reported its first annual loss in at least eight years in 2008 on wrong-way bets on fuel prices. Chinese carriers are returning to profit as government stimulus measures boosted air traffic in the Asian nation, helping them overcome a decline in international passenger numbers amid the global financial crisis. Airlines also posted gains on jet-fuel hedging contracts after posting billions of yuan of losses after bets turned sour in 2008. “Chinese carriers have all been doing much better,” said Jim Eckes, Hong Kong-based managing director of industry consultant Indoswiss Aviation. “I’m optimistic about Air China unless there is some serious downturn.” China Eastern Airlines Corp., the nation’s third-largest carrier, said this week it likely posted a profit in 2009 after a record loss a year earlier. A refund of government levies and lower fuel costs also contributed to the improvement in the company’s results, Air China said yesterday. Jet fuel costs last year were on average 43 percent lower than in 2008. Chinese carriers had a combined profit of 7.4 billion yuan last year, the official Xinhua News Agency said on Jan. 13, citing data from the Civil Aviation Administration of China. The airlines moved 230 million passengers in 2009, 20 percent more than in 2008, the report said. Worldwide air travel likely fell about 4.1 percent in 2009, according to the International Air Transport Association.
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Boeing, Airbus fight over market share in India

2010-01-19T12:22:00.000-05:00

With around 242 aircraft expected to be delivered to Indian carriers over the next five years between 2010 and 2014, Boeing and Airbus are locked in battle over market share. According to Boeing India president Dinesh Keskar, the company is supposed to deliver an additional 100 aircraft to its Indian customers over the next five years. Talking to FE, Keskar said, “We have not had any cancellations from India and so far our orders are intact.” Boeing’s main customer is National Aviation Company of India, which alone accounts for 68 aircraft orders. Airbus is slated to deliver 142 aircraft according to a company official. This would take its share to around 54% of the total 680 aircraft expected to be in operation. Airbus’ primary customer in India is Kingfisher Airlines. Of the total 440 aircraft in use today, Airbus accounts for 223 or 51%, while close to 220 aircraft come from the Boeing stable. In 2005, Indian carriers were operating close to 200 aircraft and Keskar estimates that the country will need around 1000 aircraft, valued currently at close to $100 billion (Rs 470,000 crore), over the next 20 years. Airbus delivered its first aircraft in 1976 to the erstwhile Indian Airlines, and with carriers like Kingfisher Airlines, Jet Airways and Air India, among its current crop of customers, the company estimates that the country will need around 992 aircraft by 2026. The company also adds that of the 365 orders it has procured over the last 30 years, it has delivered around 50% of the order size and has yet to deliver 142 aircraft. Though the aerospace major did not mention a time frame, it is understood that Indian carriers in an expansion mode will need these aircraft within five years. Currently there are 440 aircraft in the Indian skies and with the new set of aircraft, India’s aircraft fleet size will increase to 683. According to a recent KPMG report, the capacity at the Delhi, Hyderabad, Bangalore, Mumbai, Chennai and Kolkatta airports, once their modernisation is complete, will be around 263 million passengers. The capacity at these airports today approximately stands at 100 million passengers. According to Boeing India’s website, in 2006, Air India had made an order of $11 billion (Rs 51,700 crore) for 68 aircraft, considered the largest commercial order in India’s civil aviation history. Jet Airways has an order for ten 787 Dreamliners.
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Northrop Wins $577 Million Army Contract

2010-01-18T12:22:00.000-05:00

Northrop Grumman Corp. said late Monday that a team of contractors it led has won a U.S. Army contract to develop an integrated air- and missile-defense battle command system. The Los Angeles defense contractor said the new system will help troops make better battlefield decisions by integrating weapons, radar and sensor systems. The system “takes care of the science of warfare, so the warfighter can focus on the art of warfare,” said Linda A. Mills, president of Northrop’s Information Systems sector. The five-year contract for system design and development is valued at $577 million. The system is expected to be ready to be deployed by 2014. The Northrop team includes Boeing, Lockheed Martin and 10 other companies. Shares of Northrop, which announced that it plans to relocate to Washington D.D. by 2011, closed up 6 cents, or less than 1 percent, to $57.50 on the New York Stock Exchange.
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