Showing posts with label Air Canada. Show all posts
Showing posts with label Air Canada. Show all posts

Air Canada signs agreement to buy up to 109 Boeing 737 MAXs

by Devesh Agarwal

Boeing 737 MAX 9 final concept CGI rendering. Boeing image.
National carrier Air Canada has agreed to buy up to 109 Boeing 737 MAX single aisle narrow body aircraft as part of its fleet renewal plan. Boeing has wrested back an existing Airbus narrow-body customer as the MAXs will replace Air Canada's existing mainline fleet of Airbus A320 family.

The agreement with Boeing, which is subject to completion of final documentation and other conditions, includes firm orders for 33 737 MAX 8 (equivalent to A320) and 28 737 MAX 9 (equivalent to A321) aircraft with substitution rights between them as well as for the 737 MAX 7 (equivalent to A319) aircraft. It also provides for options for 18 aircraft and rights to purchase an additional 30. Deliveries are scheduled to begin in 2017 with 2 aircraft, 16 aircraft in 2018, 18 aircraft in 2019, 16 aircraft in 2020 and 9 aircraft in 2021, subject to deferral and acceleration rights.

With regards to the existing regional jets fleet, the airline said
Air Canada continues to evaluate the potential replacement of its Embraer E190 fleet with more cost efficient, larger narrowbody aircraft that are better suited to its current and future network strategy. Consistent with this strategy, the agreement with Boeing provides for Boeing to purchase up to 20 of the 45 Embraer E190 aircraft currently in Air Canada's fleet. The E190 aircraft exiting the fleet will be initially replaced with larger narrowbody leased aircraft until the airline takes delivery of the Boeing 737 MAX aircraft. The company will be reviewing various options over the next six months for the remaining 25 Embraer E190 aircraft including continuing to operate them or replacing them with a yet to be determined number of aircraft in the 100 to 150 seat range.
Air Canada's plan is for its total fleet including Air Canada rouge™, but excluding aircraft flown by its contracted regional carriers, to grow from the existing 192 aircraft to approximately 214 aircraft by the end of 2019. Air Canada has 13 options and rights to purchase 10 Boeing 787 aircraft, rights to purchase 13 Boeing 777 aircraft as well as the 18 options and 30 purchase rights for Boeing MAX aircraft.
Read more »

Air Canada transfer all its Embraer 175 regional jets to Sky Regional

by BA Staff

Embraer 175. Photo courtesy Air Canada
Air Canada has successfully completed the transfer of all 15 of its Embraer 175 regional jets, the smallest jet aircraft in Air Canada's fleet, to Sky Regional to operate the aircraft on behalf of Air Canada under the capacity purchase agreement between the parties. Sky Regional now operates 20 aircraft on behalf of Air Canada, under this agreement.

Sky Regional has been an Air Canada Express partner since May 2011, operating service between Billy Bishop Toronto City Airport and Montreal Trudeau Airport with a fleet of Bombardier Dash 8 Q400 turboprop aircraft. Since March 2013, Sky Regional has been phasing in the operation of a fleet of Embraer 175 regional jet aircraft on existing Air Canada short-haul regional routes, primarily from Toronto and Montreal to destinations in the north-east United States including New York La Guardia, Newark, Boston, Philadelphia, Chicago and Dallas/Fort Worth, under the Air Canada Express banner. Sky Regional currently employs approximately 550 people and is the sole Air Canada Express operator serving Billy Bishop Toronto City, Philadelphia, Chicago and Dallas/Fort Worth airports.

In addition to Sky Regional, Air Canada has capacity purchase agreements with its other regional airline partners, Jazz, Air Georgian and EVAS, that operate regional Air Canada Express flights on behalf of Air Canada.
Read more »

787 Dreamliners alone cannot save an inefficient Air India

by Devesh Agarwal

Recent media reports blare the headline
The Boeing 787 Dreamliner, the latest acquisition of Air India, is likely to shore up the fortune of India's national carrier.
This is backed by the many advertisements portraying some of the top Indian CEOs, giving big thumbs up after travelling in the next generation flying machine of India’s national carrier.

Various media reports quote the Indian civil aviation minister Ajit Singh, on the planned expansion of Air India's network using the 787 Dreamliners. In a press release by the Indian Government, the minister spells out progress on the Dreamliner battery modification
The Minister for Civil Aviation , Shri Ajit Singh has said that out of six Dreamliners, two Dreamliners have already been modified for commercial operations and all 6 planes will be ready for operation by the end of this month.
Singh goes on to reveal a few financial performance parameters of the airline. In typical government fashion, the information reveals a small part of the story while concealing the essential. Reported is the increase in yield (revenue per passenger-kilometre) but hidden is crucial information like cost per passenger-kilometre, since revenue minus cost reveals the true performance of the airline, which the government will never report to the tax-payer whose money is being used to fund the airline.

Statistics aside, the main question here is: Why is the Indian minister for civil aviation making operational announcements about the airline? Globally it is the top management of the airline performing this task. Is Singh also assuming the duties of the Chairman and Managing Director of the Air India? Why is Ajit Singh also doing Rohit Nandan’s job? Should Singh not be concerned more about the abysmal performance of the DGCA in the sphere of safety regulation and the impending audit by ICAO?

Singh should let Nandan do his job, while he focusses on building a strong policy and robust regulatory structure for the benefit of the entire Indian aviation sector, and not just individual airlines.

These actions exemplify the daily and deep interference by the political and administrative class in the operations of ‘India’s National Carrier’, and how the airline's leadership, which is beholden to the political and bureaucratic establishment for their jobs, are side-lined.

As a result the airline leadership is rendered powerless, and relieved from any ownership of performance, and by extension absolved of responsibility for results.

In my humble opinion, this is akin to a criminal abandonment of one's duties and responsibilities.

Air India is losing thousands of crores each year and has racked up debts exceeding a mind blowing 53,400 crores ($8.9 billion) till date; and, and no one is held accountable!!!

Recently Air India was given a mammoth Rs. 30,000 crore bailout or Rs. one crore for each of its 30,000 employees in an over-bloated workforce. In comparison India's health department budget for last year was Rs. 28,000 crore. Surely India does not need a 'national airline' more than the health of its citizens.

The politicians appear to be the driving force of this "feel happy" message on the 787 to deflect from some horrid truths. The Indian public is being kept blissfully unaware, much of the airline's modern Boeing 777 fleet remains grounded due to a lack of spare parts; shocking considering most of the bailout money has already been spent. Read related story.

In another example of political interference killing the airline, in 2006, Air India was forced to buy the special purpose ultra-long range Boeing 777-200LR, to fulfil the pipe-dreams of non-stop Indian USA flights, of then civil aviation administration led by Praful Patel. Even as the Comptroller and Auditor General (CAG) questioned the purchase of the 777LR's itself, the configuration of aircraft shows the wasteful nature of "planning" at the airline.

Air India's 777-200LRs are configured with a pathetic 238 seats in 8/35/195 first, business, and economy class. In comparison, global airlines offer many more economy class seats, the type of passengers Air India most commonly flies. Emirates offers 10.7% more seats, Air Canada 17% more, even Qatar Airways, rated one of the most luxurious economy class in the world, offers 10.6% more economy class seats.

The airline has been trying to sell these LRs since 2009, but this is a special use aircraft with very few airlines as takers; and within this limited market, no airline in its right mind will buy such an uneconomically configured aircraft with so few seats. The advice of many an aviation expert for Air India to re-configure its LRs and increase seats, have fallen of deaf ears.

The airline is forced to fly this uneconomic configuration, and the political spin machine generates stories that the 777 is not a commercially viable aircraft. The sales performance of the 777 speaks for itself. The 777 is one of the most successful aircraft in history with over 1,400 orders and 1,105 deliveries till date. The new Boeing 777X project is expected to replace the venerable 747 Jumbo Jet in the next decade. The two largest 777 operators in the world are Emirates and Singapore Airlines, essentially India's neighbours.

If blowing up precious tax-payer rupees and not repairing, improving and deploying, the existing fleet is a criminal waste, what would you call the misinformation and misdirection?

Another quote by the minister that needs to be placed in perspective
"The Boeing 787 has the optimal size and range to allow Air India to not only operate its current routes more profitably, but also to open up new markets giving Air India a true first mover advantage,"
Where were these grand plans in July 2012 Mr. Minister?

Qatar Airways had made a lot of publicity in London that they would be the first carrier to operate the Dreamliner in to the prestigious city. Their deliveries were additionally delayed. Air India, which constantly complains of competition from the gulf carriers, received its Dreamliners months ahead of Qatar Airways, and could have destroyed the million dollar campaign of Qatar by operating the 787 to London, its largest international destination. The lack of a logical answer as to why Air India chose not to, is so compelling, one is forced to ask, is this a result of "lobbying" or some quid-pro-quo?

Instead of obtaining first mover advantage at one of the world's most premium destinations, Air India operated the Dreamliner, on routes like Dubai, which is filled with low yielding low cost labour traffic. Instead of London, its largest international destination, Air India operated 787s to Frankfurt, where it constantly loses to global network behemoths like Lufthansa. When I asked why, there was no logical answer, but sources in the airline told me, the airline was just ordered to fly the Frankfurt route, at the behest of "someone in power".

Air India continues to remain a wife with 1,000 husbands - interfered with, used and abused, by all of its stakeholders, with the exception of the tax-payer whose money is being burnt like the fuel in jet engines.

The 787 Dreamliner is a good and fuel efficient aircraft that will benefit Air India, if used properly; but any person with a modicum of common sense will realise just even this next generation fuel efficient aircraft alone cannot save an inefficiently and negligently run airline.
Read more »

Trip report: Air Canada Executive First Boeing 777 Frankfurt Toronto, 767 Ottawa London Heathrow

On a recent trip from Bangalore to Dallas-Fort Worth I flew Air Canada international for the first time in my life.

The first trip was from Frankfurt to Toronto Pearson on their Boeing 777-300ER and thanks to mother nature, and two very efficient and caring customer service executives at United and Air Canada in Boston, from Ottawa to London Heathrow in the Boeing 767-300ER.

Air Canada Executive First Suites on their two class Boeing 777-300ERs


Both trips were in the Executive First Suites cabin product which the crew call "The Pods". On the 777s the mini-suite seats are found in the airline's two-class 777-300ER and all 777-200LR aircraft, in a four abreast 1-2-1 configuration, while on the 767 and A330 they are in a 1-1-1 three abreast configuration

Frankfurt to Toronto. AC873. Depart 10:00 Arrive 12:15. All times local.
Boeing 777-300ER. C-FITW. Seat 1K. 29-Apr-2013.

Air Canada Executive First Seat 1K on the two class Boeing 777-300ER

The seats open out to 191cm (6’3") long in lie-flat mode, and is 53cm (21") wide. Each pod is equipped with a 30 cm (12") touch-screen TV married to an Audio-Video On Demand (AVOD) in-flight entertainment (IFE) system, and fitted with noise-cancelling Sennheiser headphones. The seats also offer a single-pin audio jack for your own headset. Pillows and a duvet are standard.

Seat 1K on the 77W lacks a window. Comfort of the seat is good. Lots of nooks for storing small items. Can get confusing for the first timer. Did not notice the plugged in Sennheiser noise cancelling headsets in the nook to the right of the seat. Fresh foam covers for the speakers are provided. Also did not notice the bottle of water tucked in left nook (see the second seat in the picture above). The amenity kit is minimal and nothing to write home about.

The seat has nice padding not too firm, and not too soft. I had a comfortable sleep, though, thanks to my excessive international travels back in the 1990s and early 2000s, my sleep patterns are permanently damaged and I cannot sleep for long periods of time.

The "pods" offer a sense of privacy, but are completely individual traveller focussed. There were some couples travelling on the flight and they had to keep getting up to talk to each other. Also the mini-suites do not offer too much of a window view, so any claustrophobia gets magnified.

Was offered the obligatory hot towel, and it was better than what I have experienced on US carriers, but thinner and colder than those on Lufthansa and Singapore Airlines. A choice of water, orange juice or Champagne is offered before the flight.

Unlike the forward facing seats of most business class which allow you to quietly switch on the flight path display and watch while the plane taxies and takes-off, the Air Canada screens are mounted on the side wall and must be opened 90 degrees for viewing. The crew comes around and shuts all the screens once the safety video completes.

Post take-off, the drinks trolley is wheeled out and warm almonds accompany. I was overwhelmed by the extreme generosity of the Canadians when it came to serving alcoholic drinks. Wine, including the fortified Port which is around 20% alcohol, were poured like water, and one could quickly find themselves floating well above the aircraft's cruising altitude if not careful. Since I sampled all the wines, I had to keep raising my hand to stop the crew from over-pouring the wines. I found the whites being served at almost room temperature 

Once the cabin is darkened, the funky blue LED lighting under the screen and around the seat give some very exotic effects.

The meal service is a five course offering. A good selection of hot breads are offered, and the appetizer plate is switched out for the main course, and finally the dessert.


I was very surprised, almost shocked, at the wine list. Air Canada, the national carrier of Canada, does not feature even one wine from Canada, in its wine list, which is made up of rather mediocre but quaffable $6~$10 wines from Southern France, South America, and California. Given the wine culture in Canada, this should be something the carrier must look to improve.


The quantity of food is ever so slightly on the lesser side, but you can make it up with some additional bread.

Staff service is by and large good. I found the Air Canada cabin crew far more responsive and hospitable compared to their US counterparts, and I certainly appreciated the crew's effort to serve my tenderloin as close to medium-rare as possible, something most Asian, and many European carriers just do not do.

Arrival at Toronto was decent. For a connection to the Toronto - Dallas Fort Worth leg, there was a long walk, and then a long wait to enter the US immigration pre-screening, since your name comes up on the screen only after your bags are put on the baggage belt and their photograph is available to the CBP officer.

The US Immigration is followed by a stringent security but regular metal detectors. Immediately after security there is a very nice Air Canada lounge, equipped with the best business centre I have seen till date. Free computers, printers and photo-copiers. Even mobile phone printing, and internet printing.

After almost 20 hours travelling, the first thing I did was take a nice, long, hot, shower. Finally refreshed and not smelling like some over-ripe fruit, I headed across to the food and drink section. Given that it was around 2:30pm by then, there was no food. Just some dry tid-bits. The food was finally refilled around 5pm with salad, soup, and some hot food. Almost the whole lounge, including me, descended on the food like it was going out of fashion. So after went down to catch my YYZ-DFW flight. Was very tired by then. Got on board. Ate something, and passed out.

Ratings*: Flight 7/10. Transit 5/10. Lounge 8/10

Ottawa to London Heathrow. AC888. Depart 22:30 Arrive 10:15. All times local.
Boeing 767-300ER. C-FXCA. Seat 8K. 09-May-2013.

The counter agent staffing the United GlobalFirst counter at Boston Logan saw me coming, and decided to walk away from her counter, leaving me to wait for the BusinessFirst counter to open. I must thank that snooty woman for abandoning her counter, because Joanne at the BusinessFirst counter turned out to be very courteous and super efficient. Thanks to bad weather at Boston, my Boston to Washington Dulles flight was delayed and this would cause me to miss my United Dulles to London Heathrow connection. While she was thinking of options, I informed her that I remembered there was a Boston-Halifax-London connection on Air Canada. Joanne promptly contacted her counterpart at Air Canada Boston, and in little over five minutes I had a new re-routed ticket Boston-Ottawa-London Heathrow. Thanks once again Joanne.

The Boston Ottawa trip was a all-economy CRJ200. I found the transit connection sort of odd. I had to go through Canadian immigration, pick up my bags, go through Canadian Customs, detour through a side door, check-in my bags in, again, for the Ottawa London flight, undergo security, and then board the aircraft. Ours was one of the last flights to board. By this time, all the duty free shops were closed. Sorry Canada, you missed earning some duty free dollars.

This time, I got the last seat, 8K in the cabin, and in the photo below, you will get a better appreciation of the slightly claustrophobic feeling one gets in the "pods".


The crew on this flight were not as hospitable or responsive when compared to their AC873 colleagues. I almost got the feeling they wanted to just complete the service and get some sleep, but still the service was decent. Professional, but lacking warmth.

A generous helping of Gin between the water and tomato juice

The main course selections for the dinner were good, and this time I got my steak medium-rare and bloody. Just as a good cut of beef should be served.


Morning arrival faced the usual delay in the skies over London. Our flight did the obligatory race-track loops before getting clearance to land. After landing, we had to wait on the taxiway, as our gate was occupied by another aircraft that had technicaled. After about a 20 minute wait we finally embarked.

The usual long walk-run to Heathrow's chronically under-staffed immigration counters. Business class passengers have a separate set of queues, but this turned out to be a curse, as one of the two counters was busy processing the rejection of an arriving passenger, and the other counter had its share of complex cases which took much longer to process. After an almost 45 minute wait, an additional counter was opened up, and at the other counter, the rejection too was processed, so the queue moved along and I passed through immigration quickly. By the time I reached baggage claim, the bags were just arriving. Collected and was soon on my way.

Air Canada offers an arrivals lounge service at London Heathrow, but I did not use it.

Ratings*: Flight 6.5/10. Arrival 4/10.

*After almost ten years being pampered by Singapore Airlines, I am spoilt when it comes to service level expectations. So my reviews tend to be a little on the stiff side.
Read more »

As 787 Dreamliners return, passengers face economy class discomfort

As its much vaunted state of the art jetliner, the 787 Dreamliner returns to the skies, US airframer Boeing faces a dilemma. On the one hand Boeing has incorporated many improvements in the composite fuselage aircraft, which was meant to improve passenger comfort.

These include
  • Windows that are about 30% bigger, allowing more natural light.
  • Windows also feature an electronic dimming system
  • Cabin pressure being maintained at a lower altitude of 6,000ft MSL rather than the traditional 8,000ft, thus reducing passenger fatigue.
  • High cabin humidity reducing passenger dehydration
  • The air-conditioning system is fed with air from scoops rather than engines, thus much cleaner
  • The computer controlled LED lighting system that simulates the rise and ebb of natural light through the day, thus helping passengers better adjust to time zones.
  • High ceilings, bigger over-head bins, and the cabin derived from the Boeing Sky Interior which gives passengers a bigger sense of space
  • External to the cabin, the aircraft has an anti-turbulence system that makes for a smoother flight and much quieter engines.

Yet, despite all these improvements, with the exception of the two Japanese airlines All Nippon and Japan Airlines, all the other 787 operators have opted for the ultra-tight nine abreast 3-3-3 configuration in economy class that leaves the seats around a bone crushing 17" width. Fine for a short 737 flight, but extremely uncomfortable for the longer eight to twelve hour flights envisaged in the Dreamliner.

Even British Airways which recently revealed its 787 cabin layout has chosen the narrow 3-3-3 configuration for its World Traveller (economy) class.

One has to wait and see what configuration will "premium" carriers like Singapore Airlines choose.

So unless you are a zero sized petite Bollywood, Hollywood model, you might be well advised to leave the Dreamliner in your dreams. On the flip side, since most airlines have chosen not to have a first class in their 787s, if you have the big bucks or frequent flier miles to afford the Business Class, then the Dreamliner will truly live up to its name in its pampering.

Talking about frequent flier miles, I have just returned from one trip covering the US and Europe and had a chance to experience the new business class aboard Lufthansa's 747-8i's and the BusinessFirst "Pods" aboard Air Canada's 777s and 767s. They were both good experiences and I request you to please await my trip reports.

Unfortunately, I am going back to the US. Will be in the air when this publishes. While I am a charter member of Masochists-R-Us, but, after a long long time, I am flying Singapore Airlines, in their 777 economy class, considered the best in the world. Stay tuned for that trip report too.
Read more »

Analysis - Jet Airways decision to axe Chennai-Brussels and add Bangalore-Munich is viable

It has been almost a month since India’s largest airline Jet Airways announced that it was cancelling its flights between Chennai (India’s third largest city) and its once robust scissors hub in Brussels, and I still am having trouble fully understanding the impetus behind the decision, though I do believe that there is a scenario where the move(s) made by Jet do make sense. The cancellation left Jet Airways with just 4 daily flights in Brussels; Mumbai and Delhi on the Indian side – Newark and Toronto on the North American side.

Separately, Jet Airways appears to be launching a daily Bangalore – Munich terminator as Jet Airways flights 152/153, though the route has not yet been officially announced by Jet Airways and the winter 2012-2013 flight schedules have not been finalized.

The elimination of Chennai-Brussels flies in the face of the strategy we outlined earlier this year for Jet Airways’ North American operations, which called for an expansion of the scissors hub. From a practical perspective, it reduces the value of Jet Airways to Star Alliance (by eliminating a hub-hub route), while also reducing the attractiveness of Jet Airways to the rapidly burgeoning merchant and manufacturing travel base in Chennai by eliminating the direct flights.

Adding Bangalore-Munich makes more sense, especially if the expanded partnership between Jet Airways and Lufthansa comes to fruition. Even with a Lufthansa partnership, 9W 153 is not timed optimally to connect into Lufthansa’s North American bank in mid-afternoon; the 8:35 am arrival would require a 6-7 hour connection for most US destinations. The United, US Airways, and Air Canada flights are timed a little bit closer to the Jet Airways arrival but the business case seems to be primarily built on European connections.

As of right now, Jet appears to have no immediate plans to terminate the Mumbai-Newark and Delhi-Toronto services through Brussels. What this implies is that Jet Airways plans to continue with both a European operation to Munich, and a North American operation through Brussels. This sort of split operation is typically a bad idea, because instead of a strong European operation in one place, you can end up with a weaker operation in each of two places. That being said, there is a scenario under which the switch would make sense.

Since Jet Airways currently under-utilizes its fleet of Airbus A330-200 aircraft, two A330s could be dedicated to Munich flights from Bangalore and Chennai. The purpose of these flights would be to feed into Lufthansa’s Munich hub and secure the two major Indian cities currently outside of Lufthansa’s destination portfolio in Munich. The flights would be timed to depart India in the early morning (between 6 and 8 am), and arrive in Munich around noon. 

The critical piece is securing membership in the Trans-Atlantic joint venture (JV) partnership between Lufthansa, United, Swiss, Austrian Airlines, and Air Canada. The JV offers its members anti-trust immunity (ATI) for all trans-Atlantic flights. In practice, this means that the airlines can act like one business across the Atlantic; sharing the costs and profits of their respective trans-Atlantic network proportionally to their size, jointly marketing and selling trans-Atlantic tickets, and most importantly being allowed to coordinate and discuss strategy. It doesn’t matter to United if a passenger flies Lufthansa’s Frankfurt-Newark leg or United’s; because United will still get a share of the profits.

Without membership in this JV, the Munich flights by Jet will have to be treated as Indian competition for Lufthansa’s lucrative business here (especially in Bangalore). Once under the umbrella of ATI, these flights can instead be treated as strengthening additions to the Star Alliance hub in Munich – giving Jet a shot at financial viability. I am still not fond of Jet’s decision to abandon Chennai-Brussels and add Bangalore-Munich, but I can understand the strategy behind it.
Read more »

Weekly Airline Stock Update - BAASA Index Shows a Mixed Bag

Last week, Bangalore Aviation introduced the BAASA Index, the world's first index of 30 airline stocks measured from a 3,000 point base value and designed to provide a broad based measure of airline financial performance and investor confidence in the airline industry.

Over the past week, the BAASA index fell 0.49% to close at 2985.80 points. Performance was mixed across the board by region, though Asia-Pacific outperformed the pack (excluding Qantas).

The weakest performers were Qantas, who suffered a precipitous 30% decline in shares, primarily on recent worries over Qantas reporting a 90% drop in profits for the past fiscal year, and airberlin, which fell 15.56%

On the plus side, Jet Airways, jetBlue, and Air Canada each rose more than 7% over the week, with Air Canada leading the pack with an 8.14% rise.

Here is the full table of values for this week. The initial prices (normalized to 100) can be found here.All values are as


Asia-Pacific Value % Change
Jet Airways 107.04 7.04%
Singapore Airlines 100.50 0.50%
China Southern 104.74 4.74%
ANA 104.33 4.33%
Korean Air 102.21 2.21%
AirAsia 103.39 3.39%
Qantas 70.00 -30.00%
Cathay Pacific 101.34 1.34%
Air China 102.96 2.96%
North America    
United 97.24 -2.76%
Delta 90.41 -9.59%
Southwest 101.14 1.14%
US Airways 91.71 -8.29%
jetBlue 107.16 7.16%
WestJet 102.52 2.52%
Air Canada 108.14 8.14%
Allegiant 98.89 -1.11%
Europe    
IAG(British Airways/Iberia) 105.91 5.91%
Lufthansa Group 100.66 0.66%
Air France- KLM 96.55 -3.45%
Ryanair  101.21 1.21%
EasyJet 99.76 -0.24%
Turkish Airlines 105.08 5.08%
AirBerlin 84.44 -15.56%
Norwegian Air Shuttle 101.90 1.90%
Middle East    
Air Arabia 98.63 -1.37%
Africa    
Kenya Airways 98.33 -1.67%
Latin America    
Copa Airlines 95.72 -4.28%
LAN Airlines 104.51 4.51%
Aeromexico 99.31 -0.69%
Total 2985.30 - 0.49%
Read more »

Air Canada in talks to lease 5 Air India Boeing 777-200LRs... Huh?

Late last week, reports emerged that beleaguered Indian national carrier Air India, which is in the midst of a crippling strike by its international pilots union, was in discussions with Canadian airline Air Canada to lease out 5 of Air India's Boeing 777-200LRs to the Toronto based airline. The news broke as Air India continues to operate less than half of its international network due to the strike by the IPG, but it is actually just the logical extension of continuous Air India efforts since 2009 to lease out 5 777s as well as 2 Boeing 747-400s.

 In the previous instances, it was reported that Air India was looking to lease out these aircraft for 8-10 years. However, given their inability to place these aircraft with any carrier for 3 years, perhaps Air India has realized that it must be more flexible. As Air India continues to take delivery of the all-new Boeing 787s, the necessity for the 777-200LR in Air India's fleet, which has almost been miscast by Air India as a regional widebody to and from Asia, all but evaporates. Air India currently operates 8 777-200LRs, most of which are grounded due to the strike.

Air Canada on the other hand, operates a fleet of 6 777-200LRs, primarily on long range routes between Canada and Asia. The carrier recently moved to convert 5 options for the larger Boeing 777-300ER into firm orders for delivery in 2013 and 2014, ahead of the first delivery of its own Boeing 787s. As Air Canada continues to hemorrhage money on its short haul network in the face of heavy competition from more nimble domestic rivals like low cost carrier WestJet, it appears to be doubling down on its more profitable long haul network; especially important given that Air Canada is having labor struggles of its own.

Even with this rationale, it's hard to see the merits of the deal for Air Canada. The Boeing 777-200LR is a hard aircraft to make money with, though Delta and Emirates appear to have made a go of it. Moreover, while they do need additional international capacity, Air India's 777-200LR might not be the best choice. There are a number of differences between Air India's 777-200LR and Air Canada's that will increase the costs of such a long term acquisition. Firstly, Air India's 777-200LRs are equipped with the General Electric GE-115B engines, which deliver 115,540 pounds of thrust whereas Air Canada's 777-200LRs are equipped with the GE-110B engines that deliver 110,100 pounds of thrust. While this difference might seem irrelevant, having two different engines on the same aircraft increases operational complexity (due to slight differences in operating performance) and makes scheduling more complex. It also increases maintenance costs as an airline's MRO workers must now be trained to handle both types of engines, or separate workers brought in to handle each. These costs are not insignificant; American Airlines famously sold off many of TWA's 757s due to engine incompatibility earlier this decade. Air Canada would also be forced to retrofit Air India's 777-200LRS, which are configured in a 238 seat (8F/35J/195Y), 3-class configuration, into their own 2-class 270 seat (42J/228Y)configuration. The cost of retrofitting 5 aircraft would likely run into the millions of dollars, increasing the true cost of acquisition.

So it makes little sense to me that Air Canada would be actively seeking to lease Air India's 777-200LRs, unless Air India was practically giving these birds away with super-low lease rates. And if that is in fact the case, then even leasing out these 777s would do little good for Air India's abysmal finances.
Read more »

Virgin Atlantic's legal actions threaten Delta, Jet Airways, Cathay Pacific, and Air Canada

In 2003 Virgin Atlantic introduced the "Herringbone design" seat layout in it's "Upper Class" on which it had spent £50 million designing.

Contour, the Welsh seat manufacturer that built these seats for Virgin, sold the unusual design to other airlines. Virgin claiming that it owned the patent on the seat design took Contour to court to stop it making any more copies. Virgin’s argument was initially rejected, but the UK Court of Appeal recently upheld their patent application.

It is almost certain, that Virgin will file for an injunction against Contour to prevent it making any more of the seats. In parallel Virgin is taking legal action against US carrier Delta, Air Canada and India's Jet Airways, all of whom bought the Herringbone seats from Contour. Hong Kong based Cathay Pacific is also facing similar legal action for buying similar seats from another manufacturer.

If Virgin’s legal action is successful all these airlines could be forced to remove these seats from the planes and refit them with other cabin seating, which would be extremely expensive and time consuming.

It is more likely that these affected parties will try and reach and out of court settlement with Virgin and pay many millions.

Update 1 - October 27

The court decision is available via this link
The patent documents are available via this link

Thanks to the knowledgeable folks at Airliners.net.
Read more »