PHOTOS: Sharklets fitted Airbus A320 completes first flight

Airbus has completed the first flight of the company's A320 development aircraft MSN001 F-WWBA fitted with the new ‘Sharklet’ wing-tip devices.

Airbus A320 MSN001 F-WWBA takes off for its first flight equipped with "Sharklets"

This flight marks the start of the early flight-test campaign to capture data for fine-tuning the flight control laws required for the fly-by-wire controls, as well as for certification and performance validation.

The current A320 wingtip fence in
yellow vs. the Boeing 737 winglet
Photo by Wikipedia user Dtom

The current generation of A320 family aircraft use the wingtip fence. Sharklets are around 2.5 metres tall, very similar to the wingtip devices used on the Boeing 737NG, and will replace the aircraft’s current wingtip fence.

Due to significant changes in the aerodynamics of Sharklets, Airbus will have to modify the wing of the A320 family aircraft and therefore will offer the Sharklets only as an option of new aircraft. Air New Zealand will be the launch customer of the Sharklet equipped A320 classic. The Sharklets will be standard on the A320neo, whose launch customer is Qatar Airways, thanks to the hard bargaining, some may call it tantrums, of its CEO Akbar Al Bakar at the recent Dubai air show.

All the images are ultra-high resolution. Click on them for a HUGE view. For more reading on various wingtip devices we recommend reading this article.

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Boeing, yet again, delays Air India 787 Dreamliner delivery to next year

It appears that delivery Air India's Boeing 787 Dreamliners are delayed, yet again, this time in to 2012. Air India has chosen the General Electric GEnx-1B engine to power its 787 fleet.

According to a report from Flightglobal, due to a lack of production aircraft at Boeing, the airframer is unable to complete the final certification requirements of the US Federal Aviation Administration (FAA) in a timely manner, causing deliveries of the General Electic GEnx-1B powered Boeing 787 aircraft to be delayed, yet again, into 2012.

The other engine offered for the 787 is the Rolls Royce Trent 1000. Boeing has delivered two of the Trent 1000 powered 787s, both to launch customer All Nippon Airways

While two test aircraft with the GEnx engines have undergone rigorous testing, the FAA requires a part of the 300 hour Functionality and Reliability testing campaign, to be undertaken on regular production aircraft.

Boeing has selected aircraft number 35, which is ultimately destined for Air India, to undergo these tests. Because of this new delay, delivery of the first Boeing 787 to Air India will be pushed back to the first quarter of 2012 which is a revision from an initially "confident" delivery date in the fourth quarter of this year.

How confident this re-re-re-revised delivery date is, is anyone's guess. Repeated calls and message to Boeing India were left unanswered. An Air India spokesperson refused comment on this delay saying he did not have immediate individual knowledge of the situation and that any communication from Boeing regarding 787 deliveries or delays would be with the engineering teams and higher management.

Air India has claims for delayed delivery of the 787s pending on Boeing for $1 billion.

Boeing is aiming to delivery between 10~15 787s in 2012, but on-going improvements to the aircraft are slowing things down. Against a delivery plan of five 787s this year, Boeing may delivery only two more.

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Air India fleet plan calls for sale-leaseback of 787

Earlier this week, Air India, the beleaguered Indian national carrier, announced that it would be utilizing a sale-leaseback arrangement to evade the divisive lawsuit filed by the Air Transport Association (ATA), a US airline lobby group, over Us $ 3.4 billion worth of financing for the carrier's order of 27 Boeing 787 and 3 777-300ER widebody jets.

The lawsuit from ATA claims that because Air India is in dire financial straits (having lost more than Rs. 13,000 crore in the past four years), Air India might very easily default on its loans, leaving the US taxpayers on tab. Without getting too far into the politics of this lawsuit, it will suffice for us to say that the Maharaja will not be dying any time soon; as the imminent Rs.30,000 crore (plus) bailout proves, there are many in the government who are not yet willing to give up their "personal Netjets."

When we discussed the issue in our podcast last week, Devesh brought up the point that the ATA's suit could well affect employment at Boeing. However, the ATA has countered that export-import financing has given a direct edge to foreign competitors in adding international capacity to the US. Both of these are valid points (that will be hopefully explored in a later post), however Leeham Co., a respected aviation consultancy, implied that the dispute had more to do with a conflict between Delta Air Lines and the Indian government. In that case, any argument about there being an attempt to change the Ex-Im system is a bit overstated. Still, we will keep a close eye on the situation as more news becomes available.

Air India sale-leaseback is sound strategy; lease plans, not so much

As part of Air India's new fleet plan, the carrier will take delivery of all 27 aircraft on order, contradicting earlier reports that they would be halving the order. These 27 aircraft would be immediately sold to lessors such International Lease Finance Corp (ILFC) and General Electric Capital Aviation Services (GECAS), who would then turn around and lease the plane back to Air India. IndiGo has used this strategy to great effect with its fleet of Airbus A320 aircraft; a large chunk of its fiscal year 10-11 profit was derived from similar agreements. By selling these aircraft off immediately after purchase, Air India is able to generate cash to pay off some of its debts and avoid using Export-Import Bank funds. Given that the 787 is currently a very desirable aircraft, lessors will likely be quite willing to bring those aircraft onto their books as assets.

As part of this new fleet plan, Air India plans to lease out 5 Boeing 777-200LRs and 2 Boeing 747-400s once the 787s come on property. These leases are expected to raise Rs. 300 crore for the company. Boeing 747-400s are relatively un-economical, 4-engined aircraft, that beyond short term charters (such as Hajj), will be of little value to most airlines (save Iran Air and Air Koryo). Meanwhile the 777-200LR fleet, while newer, is not in high demand amongst world carriers. The only major operators of the type are the MEB3 (Emirates, Etihad, Qatar), Delta Airlines, along with a host of other niche carriers around the globe. Thus these aircraft are unlikely to be leased out at all, and if they were, the rates would most certainly be unprofitable for Air India.

I've gone on record as stating that Air India should cosider leasing out its larger 777-300ERs; which are highly desirable assets that would command premium lease rates. On many routes, the 777-200LR can have trip costs of up to 20% less than those of the 777-300ER. Thus for an airline of Air India's profitability; the additional revenue from leasing out the 777-300ERs would be topped off by a minimization of losses on Air India's route network.

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Air India selling a London-Heathrow slot is a smart move.

Yesterday, Air India chief executive Rohit Nandan announced that Air India would be withdrawing one of its two daily Delhi-London-Heathrow flights from February 2012 and auctioning off the slots. Currently, Air India competes on the sector with Kingfisher, British Airways, Virgin Atlantic, and Jet Airways; all of whom offer more consistent products and command higher fares than Air India.

The Delhi-London market is over-supplied and hyper-competitive; so this capacity cut actually is a very sensible move. In fact, Bangalore Aviation has learned that revenues generated on the Amritsar-Delhi-London segment (AI 115) do not even cover the cost of fuel for the flight (performed on Boeing 777s). While most of Air India's flights are unprofitable, AI 115 reaches a special level of incompetence because the revenue it receives cannot cover 60% of the cost of the flight!

Furthermore, Air India's well timed Heathrow slot is a highly coveted asset amongst world carriers. Numerous airlines such as Air China, Vietnam Airlines, and Korean Air have been forced to shift their London expansions to the less convenient Gatwick Airport. These companies would likely pay princely sums for Air India's peak-hour slot; similar slots have sold for as much as US $58 million (Rs. 303.5 crore). Thus Air India's slot auction would serve two purposes; raise at least Rs. 100 crore for a cash-strapped airline, and terminate a highly unprofitable route; one of the few solid business moves Air India has performed in the last year.

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Air India is offering great rates for upgrades to premium classes

For all of the ribbing targeted towards national carrier Air India, the carrier appears to have finally provided some good value, with some very good deals on offer for travel within its entire network. Of course, in typical Air India fashion, they've made it very hard for passengers to find out about these upgrades; I've seen mazes that are easier to navigate than Air India's website. So we've decided to summarize the offerings in the table below.

Segment	Price to Upgrade to Business/Executive Class	Price to Upgrade to First Class	Remarks
Domestic	INR 4000 for flts up to 750km INR 6000 for all flights beyond this distance		Only applicable when flight is boarded at the following airports: Amritsar, Bangalore, Chennai, Delhi, Goa, Guwahati, Hyderabad, Jammu, Kochi, Kolkata, Kozhikode, Lucknow, Mumbai, Patna, Portblair, Thiruvananthapuram, Varanasi
India-London	US $300	US $450 (From Business Class)	Valid for passengers originating at Mumbai, Delhi, Kolkata
Chennai/Delhi-Paris	US $300	US $450 (From Business Class)	Only applicable when originate at points listed in Segment category
Delhi-Frankfurt	US $300	US $450 (From Business Class)	Only applicable when originate at points listed in Segment category
Amritsar/Delhi-Toronto	US $300	US $450 (From Business Class)	Only applicable when originate at points listed in Segment category
Chennai-Singapore	US $75		Only applicable when originate at points listed in Segment category
Mumbai/Delhi-Singapore	US $150		Only applicable when originate at points listed in Segment category
Mumbai/Delhi-Bangkok	US $75		Only applicable when originate at points listed in Segment category
Mumbai/Delhi-Shanghai	US $175		Only applicable when originate at points listed in Segment category
Mumbai/Delhi- Hong Kong	US $175		Only applicable when originate at points listed in Segment category
Mumbai/Delhi-Seoul	US $190		Only applicable when originate at points listed in Segment category
Mumbai/Delhi-Tokyo/Osaka	US $350		Only applicable when originate at points listed in Segment category
Kolkata-Yangon	US $75		Only applicable when originate at points listed in Segment category
India-Saudi Arabia	US $90		Only applicable on non-stop or direct flights
India-UAE	US $85		Only applicable on non-stop or direct flights
India-Oman	US $85		Only applicable on non-stop or direct flights
India-Kuwait	US $85		Only applicable on non-stop or direct flights
Chennai-Colombo	US $75		Only applicable when originate at points listed in Segment category
Colombo-Chennai	US $75		Only applicable when originate at points listed in Segment category
Bengaluru/Trivandrum-Male	US $75		Only applicable when originate at points listed in Segment category
Male-Bengaluru/Trivandrum	US $75		Only applicable when originate at points listed in Segment category
Delhi-Kabul	US $75		Only applicable when originate at points listed in Segment category
Kabul-Delhi	US $75		Only applicable when originate at points listed in Segment category
Delhi/Kolkata-Kathmandu	US $75		Only applicable when originate at points listed in Segment category
Kathmandu-Delhi/Kolkata	US $75		Only applicable when originate at points listed in Segment category
London-India	GBP 200	GBP 500 (with business class ticket)	Only Applicable when destination Ahmedabad, Delhi, Mumbai, Amritsar, Kolkata
Mumbai/Delhi-New York	US $700	US $1200 (from business class)	Only applicable when originate at points listed in Segment category
Mumbai/Ahmedabad-Newark	US $700	US $1200 (from business class)	Only applicable when originate at points listed in Segment category
Hyderabad/Delhi-Chicago	US $700	US $1200 (from business class)	Only applicable when originate at points listed in Segment category
Hong Kong-India	US $193	US $257 (from business class)	Only applicable when originate at points listed in Segment category
Osaka-Delhi/Mumbai	US $768	US $1536 (from business class)	Only applicable when originate at points listed in Segment category
Seoul-India	US $200	US $310 (from business class)	Only applicable when originate at points listed in Segment category
Singapore-Chennai	US $80	US $103 (from business class)	Only applicable when originate at points listed in Segment category
Singapore-Mumbai/Delhi	US $180	US $230 (from business class)	Only applicable when originate at points listed in Segment category
Shanghai-Mumbai/Delhi	US $158/ US $237	US $315 (from business class)	Only applicable when originate at points listed in Segment category
Tokyo-Delhi	US $384/US $640	US $768/US $1280 (from business class)	Only applicable when originate at points listed in Segment category
Seoul-Hong Kong	US $142	US $190 (from business class	Only applicable when originate at points listed in Segment category
Osaka-Hong Kong	US $384	US $768 (from business class	Only applicable when originate at points listed in Segment category
Saudi Arabia-India	SAR 400		Only applicable on non-stop or direct flights
UAE-India	AED 400		Only applicable on non-stop or direct flights
Oman-India	OMR 40		Only applicable on non-stop or direct flights
Kuwait-India	KWD 30		Only applicable on non-stop or direct flights

The following rules apply to this offering:

This Upgrade on Seat Available basis will be valid for travel with immediate effect till 15 th December 2011 .

No two schemes can be combined. e.g.Passengers availing of Companion Free Scheme will not be entitled to avail of this Airport Upgrade scheme.

No two schemes can be combined. e.g.Passengers availing of Companion Free Scheme will not be entitled to avail of this Airport Upgrade scheme.

Baggage Allowance will be as per the original booking of the passenger. (No enhanced baggage allowance of the higher class of travel)

Frequent Flyer Miles will be as per original class of travel. - e.g. Passengers holding Economy Class ticket, availing of Airport Upgrade will get FFP accrual of miles of Economy Class

When Passengers are through checked in with Immigration / Customs cleared at Board Point - but the flight number changes -

i)The MCO can be redeemed against the Airport Upgrade if seats available on the Gateway point to Destination. and Upgrade will be granted from Gateway point to Destination. (eg. AI 614 / AI 957 Ahmedabad – Mumbai – Dubai). If Passenger is through checked from Ahmedabad to Dubai, Airport Upgrade Scheme will be available only for the Mumbai to Dubai leg.

However, if passengers are travelling on AI 985 Ex Ahmedabad, e.g. Ahmedabad – Mumbai – Muscat, can avail of the Airport Upgrade Scheme for the entire journey from Ahmedabad as it is the same flight number.

The above upgrade offer is not valid on AD / ID tickets

This is a very solid offering from Air India; even with spotty product quality, it's always a treat to fly business/first classes on most carriers. One interesting thing to note is that upgrades to Tokyo and Osaka are priced very high, which lends credence to the rumor that these are Air India's most profitable routes.

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Are reports claming that Qantas will shelve plans for Asian premium carrier credible?

Reports have emerged from Reuters and Plane Talking that Qantas has shelved plans for its Asia-based premium carrier which has been called by the media at various times Red Q, One Asia, or Red One. The venture would apparently be replaced by a joint venture agreement with future oneworld alliance partner Malaysia Airlines in Asia. Earlier this year, Qantas had announced plans to launch a full service carrier based in Asia (likely Singapore) with Airbus A320 family aircraft featuring lie-flat seats in business class.

Meanwhile, Qantas CEO Alan Joyce has denied these reports, stating in an interview with the Sydney Morning Herald:

"Nothing has changed in relation to our plans. We still believe we have to have an Asian alternative for our core customer base, "We are still looking at setting up a premium airline in Asia. We are still talking to the Singaporeans and the Malaysians and when we have a more definitive decision about what we are going to do ... and who the partners are ... we will inform the market."

Unions predictably reacted to the report with what qualifies as joy for PR spokespeople; Richard Woodward, vice-president of the Australian and International Pilots Association, stated “We've said for months that this whole plan was incredibly risky and wholly unnecessary. Qantas management had little to gain and everything to lose from pursuing a race to the bottom in South-east Asia,”

Market dynamics in Asia, which has seen heavy growth in traffic for low cost carriers (LCC), would indicate that Qantas' plan is flawed, as we opined back in August. Furthermore, competition with Asian full service carriers such as Cathay Pacific and Singapore Airlines would be tough given their superior service reputation and lower operating costs.

Still, it will be interesting to see whether these reports are actually true; Qantas management seems to have its heart set on an Asian premium carrier as the cure to its international woes.

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