The FAA has released a list of air traffic control facilities that could close with Sequestration, which is due to take effect March 1.
The following facilities in Washington State are on the list:
ALW Walla Walla Regional Walla Walla WA
MWH Grant County International Moses Lake WA
OLM Olympia Regional Olympia WA
PAE Snohomish County Airport (Paine Field) Everett WA
RNT Renton Municipal Renton WA
SFF Felts Field Spokane WA
TIW Tacoma Narrows Tacoma WA
YKM Yakima Air Terminal/McAllister Field Yakima WA
Additionally, the over night shifts in the following control towers are at risk:
BFI Boeing Tower Seattle WA
GEG Spokane Tower Spokane WA
The FAA warns that passengers at TSA lines could be up to three hours and tarmac delays at major hub airports could be up to 90 minutes.
Odds and Ends: Bernstein: no 777X before 2020; Alaska, Frontier and Competition; A380 repair costs; Boeing labor challenges
No 777X before 2020: Bernstein Research, in a note issued today, says it doesn’t see delivery of the Boeing 777X before 2020. Also: on a recently completed trip to Asia, Bernstein wrote this:
There’s clearly huge demand for the 787. There was a lot of excitement about it, but Boeing was heavily promoting the 747-8, for which the company is certainly seeking more orders, with few orders for the passenger version and the air freight market being very weak. To date, the majority of orders for that airplane have been freighter orders. This is a relatively small program, but we think it is the most difficult within Boeing’s portfolio right now. …[Y]ou’re probably not going to see the growth that Boeing had once hoped for there. That’s certainly how we have been making assumptions, as well.
Alaska, Frontier and Competition: The Centre for Asia Pacific Aviation has this analysis about Alaska and Frontier airlines, which aside from being a little geographically-challenged, is one of CAPA’s usual well-researched and thought-0ut looks at airlines. (In fairness, CAPA often strays from the Asia-Pacific, but we couldn’t resist the quip.) CAPA now actually calls itself Centre for Aviation.
A380 Repair Costs: Aviation Week has this article detailing the costs to Emirates Airlines for repairs to the Airbus A380 wing bracket cracks.
Boeing Labor Challenges: Boeing seems headed for war again with labor unions. Here’s an article from The Everett Herald with several links within it; one from MyNorthwest.com about SPEEA; and one from The Seattle Times about SPEEA.
Cargolux and Qatar: We posted some news about Cargolux and Qatar yesterday; The Seattle Times has this piece about the threat to the Boeing 747-8F from Cargolux’s problems.
With the announcement by Alaska Airlines for 20 737 MAX 8s, 17 737 MAX 9s (and 13 Next-Generation 737-900ERs), Airbus and Boeing continue their battle for the US market.
There are still a number of customers who have not ordered either aircraft. US Airways has been exclusively an Airbus customer. Airbus lost a hard-fought battle to Boeing in the competition for the A321-737-900ER order. ILFC orders seem to be on hold pending its Initial Public Stock offering.
|737 MAX||A320neo||No Order Yet|
|American*||Spirit Airlines||US Airways|
|Aviation Capital Group**||Frontier Airlines||Delta Air Lines|
|Air Lease Corp||Aviation Capital Group|
|*To be affirmed in bankruptcy court**Commitment, not yet converted to firm order||ILFC|
This just in:
Busted. We’re a big fan of the Discovery Channel’s Mythbusters. In the warped sense of humor department, we found this to be pretty amusing, since nobody got hurt.
TSA: Anyone who has flown in the US knows that the airport experience is probably the worst part of traveling. It’s worse than the abominable on-board service now provided by most US airlines. It’s worse than the crowded airplanes and the cramped legroom. TSA’s use of body x-ray machines is invasive. The 3-1-1 rule about liquids is absurd and the requirement to remove shoes before going through magnometers is silly.
In Europe, the body x-ray machines we’ve been through (and we had no choice for an alternative method) are less objectionable. The particular machine at Delta’s Amsterdam connecting gate was a stick figure, not an x-ray of the body itself. The stick figure shows dots where “something” appears and the security person did a quick pat-down of these locations. Much less invasive than the TSA. And the shoes stayed on. This actually was the first body scanner we went through since they were introduced and because it was a stick figure, we had no objection.
Business Week has this article talking about the TSA and its silly policies.
Boeing spent billions designing the 787 (we’re thinking only of the standard expense here, not the overruns) to dramatically improve the passenger experience, and it did a very good job. And Boeing is spending lots of money to aid airlines in training, to reduce in-flight fuel expenses and to improve the air traffic management systems.
Too bad it can’t control what the airlines do with the interior, but even that isn’t the real challenge: it’s the airport experience.
We’re going to deviate for a minute from our usual focus on Airbus and Boeing matters to comment on the bankruptcy filing of Frontier Airlines late yesterday.
We’ve followed Frontier closely since inception because we personally knew people in the executive ranks, one of our clients advised Frontier on airplane deals and Airbus had become the sole supplier of mainline jets in a competition that we also followed closely.
When Frontier announced its results for the December quarter, the cash level had declined but that didn’t worry officials. One said this during the conference call, which we wrote for Commercial Aviation Online:
The airline ended the quarter with $170.4m in cash, down slightly from $203m at 30 September. While the cash position hasn’t varied much during the past year, it’s down sharply compared with the year ended 31 March 2006.
This doesn’t worry EVP-CFO Paul Tate, who says the current cash level is fine. In the earnings call with analysts, Tate said Frontier considers its liquidity to be more than raw cash. Rather, he considers it to be a combination of cash and the equity that can be tapped in 22 owned Airbus A318s and A319s.
In fact, four of these are for outright sale, to be replaced by two larger A320s to be delivered this year. Frontier has executed previous sale/leasebacks, raising cash.
Tate admitted he’d like to have $300m or $400m in cash but that doing so has a “cost” to it. “Without diluting shareholders, we’d have to do sale/leasebacks. I don’t see any need to do that.”
“We have a pretty sophisticated model that goes forward 20 years and this is much more well-founded than some other bogus [cash] measure,” Tate said. Tate dismissed 25% cash-to-revenues goals as “bogus” and attributable to “pundits.”
We found the comments to be rather appalling, not just for the content but also for telling the “pundits” (analysts) on the conference call that essentially they were stupid.
In an analysis we did a short time later, also for Commercial Aviation Online, we wrote this:
Frontier’s cash-to-revenue level is a paltry 13.2% for the trailing 12 months ended 31 December 2007, of $170m on revenues of $1.29bn. Tate suggested that Frontier has plenty of other liquidity it can tap in its 22 owned Airbus A318/A319s. Frontier previously executed sale/leasebacks for these aircraft types and currently has two each for outright sale, although the attractiveness and value realization potential of the less-than-popular A318s remains questionable.
A review of the cash-to-revenues percentage for the trailing 12 months to 31 December for 10 reporting carriers in the US is 22.2% . Delta Air Lines has the lowest level but it also has a $1bn untapped line of credit which, if considered, brings Delta up to the average at 22.4%.
Frontier is clearly in the weakest position to weather a prolonged recession or a major squeeze at its Denver (CO) hub between giant United Airlines and interloper Southwest Airlines. Frontier’s efforts to diversify itself have largely been failures, with the company entering and withdrawing from routes on a regular basis.
Frontier filed bankruptcy because it said a credit card company wanted to sharply increase the cash hold back on tickets sold, which would have had a material adverse affect on Frontier’s cash position.
If the airline had had a better business plan and better cash management policies, perhaps Chapter 11 would not have been necessary.