LCC airline news: AirAsia bid draws scrutiny; WestJet goes upscale; M&A potential

There are two items of note for low-cost carriers that we find interesting:

• AirAsia’s bid to buy Batavia Air looks like it is to become a political football, according to this article in the Wall Street Journal.
• Canada’s WestJet is adding premium coach class to its long-standing single-class service. We find this one particularly interesting.

Then there is this analytical piece from Seeking Alpha about a variety of potential mergers.

Ft Worth columnist blasts American’s Horton

This is one of the most blistering critiques we’ve seen of a company CEO where no improprieties were involved.

Mitchell Schnurman of American’s hometown paper, The Ft. Worth Star Telegram, just pummels AMR/American CEO Tom Horton.

Odds and Ends: the cost of a 737-800; Planes take off despite ground mishap; ‘We know about this’

Boeing 737-800: Wells Fargo’s aerospace analyst team issued a note today that confirms its previous calculations that American Airlines is paying $40m-$41m for its 737-800s.

Update, August 1: We received this note from Wells Fargo: What was confirmed was AA’s SELLING price to AerCap and ILFC, NOT what AA is paying.

American Airlines: AirInsight has this analysis of the current American Airlines situation.

Speaking of American: Flight Global has this story about how an American 767-300ER and a Ryanair 737-800 brushed each other on the ground all pilots were unaware and both airplanes took off.

One more American: The Seattle Post-Intelligencer has this series of 49 photos and airline liveries, past and present, starting with American.

And then there is Alaska Airlines: A passenger snapped this photo on an Alaska Airlines flight. Via NYCAviation’s Tweet.

SPEEA, Boeing contract: Don’t expect an “IAM breakthrough”

SPEEA, the engineers union at Boeing, and the company appear to be at odds in the early stages of contract negotiations and there appears virtually no chance of a surprise breakthrough similar to the IAM 751-Boeing contract last December.

People familiar with the situation on both sides say they are hunkered down for traditional contract negotiations in advance of the October 4 amendable date.

SPEEA suggested in June 2011 that both sides go to binding arbitration as a first, not last step as a way to speed up a contract and avoid protracted, potentially contentious negotiations. Boeing declined, according to SPEEA and confirmed by a person familiar with the Boeing position. According to two sources, Boeing didn’t want to give up decision-making to a third party. Boeing also didn’t see the urgency or need to avoid normal contract negotiations, according to the person familiar with the Boeing thinking.

Perspective on 787/GEnx engine event at Charleston

It wasn’t even 10:30 PDT and we had already received quite a few phone calls from media and Wall Street asking what we thought of the weekend engine event on an Air India Boeing 787 equipped with GEnx engines during a test at Boeing’s Charleston plant.

The airplane was on a runway when some parts shot out the tailpipe. The hot parts set grass along the runway on fire, closing the airport for an hour.

You can find a lot of stories on Google News but this one is typical–and, in our view, the headline is overly inflammatory.

We saw the early Tweets about the event and pretty much shrugged the event off. It was a test flight, it’s a new engine type, engine “events” happen more than the public or media realize, nobody was hurt, what’s the big deal?

So we’re surprised by how much interest this generated. True, it’s on the 787 and program difficulties mean that the paint could peel and it would become a headline.

Here’s what we’ve told those who called:

• We’re not concerned. Engines spewing parts is not unknown. It’s the nature of anything mechanical and with a new engine type, the prospect of glitches is elevated. It’s all a matter of context.
• There is no connection between this incident and the engine failure on the ANA 787. ANA’s airplanes are powered by Rolls-Royce engines; this incident was a GEnx engine.
• Any suggestion (and there were two) that this might have something to do with the presumption the airplane was made in Charleston is just silly. The engine was made in Ohio (or some other GE plant). Furthermore, there are three Air India airplanes in Charleston, two of which were flown there from Everett. We don’t know which airplane was involved.
• The authorities, GE and Boeing will consider as cause (in no particular order): FOD (foreign object damage–did the engine ingest something that caused the parts to separate and eject from the rear?; design flaw; defective part; and human error in assembly.

Based on what little is known right now, we don’t see any material impact, if any at all, to the 787 program.