Airline Roundup Friday 14 January 2011

Qfa380b Hot on the heels of AA, BA and IB (Iberia) being given permission to more or less merge (on the specious grounds that merging the three airlines will create more competition and benefits to us as passengers, of course), we now learn that the three pilots unions involved are embarked on a similar sort of merger, signing a 'Mutuality Agreement', whatever that may be.

Well, actually, it is a very interesting balancing act between the three unions.  None of the three unions wants to lose jobs to either of the other two unions, while of course all of the three unions want to gain jobs at the expense of the other two unions.  But most of all, none of them want to see the increased internationalization of this new joint venture cause external pilots – 'outsourced' pilots appear from yet another source, particularly if they are, horror of horrors, not yet unionized and working for lower rates of pay.

The bottom line will almost certainly be that the unions will work together to create a ratchet type effect to benefit all three groups of pilots.  Here's how it works.

The lowest paid of the three groups of pilots will say to their airline employer – 'Hey, now that the three of you airlines are closely working together, we feel we need to align and coordinate our pay and benefits more closely with the other two airlines, just like you're aligning and coordinating service standards, schedules, and fares'.  After some theatrics and the threat of a strike (which perhaps now the other two unions will support) that first airline will make some concessions, allowing the pilots to get more benefits and better pay.

There is, after all, a certain logic to this scenario, which of course is unlikely to work in reverse – the airline that pays its pilots the most will never tell its pilots that they will be dropped down to match the lowest paid pilots.

So, what happens next?  Yes – one of the other two pilot groups says to their employer 'We've always enjoyed a xx% differential compared to the pilots at this other airline.  They've just got some improvements in their conditions, and you're now enjoying greater efficiencies and productivity and profits from this merger, so a fair share of this should flow through to us too, allowing us to preserve our historical relativity'.

And so on, and so on, around and around.

Talking about mergers, AA and JL (Japan Airlines) have said their new joint business venture will start on April Fools Day – a most auspicious choice of date.  The two airlines are dividing their routes between themselves, with one airline operating the flights on some North America-Japan routes, and the other operating the other routes, and both selling into each other's flights.

This too, we are told, will improve competition and make it better for us as passengers.  Yeah, sure, right.

Internationalization of another sort is occurring with US Airways.  The one-time unstoppable seeming trend for US companies to outsource their call centers to foreign countries continues to reverse itself, with US Airways announcing it will close its Manila call center completely.

This call center had been opened in 2004 as a result of the airline's bankruptcy.  In 2006 US Airways brought back 600 of the jobs it had sent to call centers in Manila, Mexico City and San Salvador, and it is now bringing back the balance, with the transition to be complete by October.  The airline has US call centers in Reno, Phoenix and Winston-Salem.

Thank you, US Airways.

I wrote, just before Christmas, a multi-part series about Airbus' plans to develop an enhanced A320, (to be known as the A320neo – 'new engine option') with most of the enhancement being due to a new more fuel efficient engine fitted to the plane, along with some necessary changes to the airplane itself to handle the new more efficient engines.

This was announced by Airbus on 1 December, and when I wrote about this just prior to Christmas, I wondered out loud how urgently quickly Boeing would respond, while pointing out the difficulty Boeing will have in countering this Airbus initiative, and pointed out the essential importance of the 737/A320 dynamic to both companies.

So what has happened since then?  Airbus this week announced what it terms the largest order in aviation history for its new A320neo – an order for 150 planes, plus 30 more regular A320s to be delivered prior to the start of the A320neo deliveries (expected to start in 2016).

This is definitely a ringing endorsement for their new plane, weakened only slightly by being an order from a current Airbus customer, and from a new airline that doesn't yet have the funding in place to pay for the 180 planes it has ordered.

So what has Boeing done in the now six weeks since Airbus publicly pushed the 'Go' button on their new plane project?  Nothing.  Actually, less than nothing.  The president of their Commercial Airplanes Group said they continue to study the subject and will announce their decision sometime in the middle of the year.

Sounds like Boeing is neither very interested nor feels very threatened by this, because surely they can't have been caught unawares by the Airbus announcement which has been slowly building all of last year, and the overall need to update replace Boeing's oldest plane is also nothing new.

Look at the statistics.  Last year Boeing sold a net 468 of the 737 series family – 90% of all the planes it netted in new orders for the year (the other sales being some 777 sales).  Airbus has fired a shot across the bow of their ultra-most strategic product, and Boeing says it will study the subject for yet another six months before deciding what to do?

How long will it be before current Boeing customers start ordering A320neo planes too?

In the past, Boeing has proudly spoken about how it 'bet the company' on various new airplane initiatives such as developing the 707 and the 747.  I wonder if its executives fully appreciate that they are again betting the company, but this time not on a pro-active new plane development, but instead on the lack of any sort of reactive response from their major competitor that threatens their most important model airplane?

Talking about Boeing being slow (and risking its corporate future), it has now delayed three times its latest announcement on further delays to its 787 program.  Yes – Boeing even experiences delays at announcing its delays.

A rumor suggests Boeing might now be planning on delivering its first 787 to launch airline All Nippon Airways some time during the summer (more than three years late) – but it will be a rather meaningless act, because the plane would be delivered without the essential ETOPS certification it needs and which ANA had been promised, meaning they wouldn't be able to operate the planes on nearly all international routes, due to not being allowed to fly any appreciable distance away from the closest emergency airport.

The ETOPS certification is critical for the 787, and the FAA's earlier willingness to accelerate the certification program has now been diminished in view of the ongoing and as yet unresolved new (and old) problems with the plane.  It is now more than two months since the fire on one of the test 787s occurred on 9 November – something Boeing announced at the time as a 'trivial' issue, and Boeing has yet to advise the impact to its testing/certification/delivery schedule due to this 'trivial' issue.  A good job it wasn't a serious issue.

Oh yes – there are also some as yet unresolved problems with its Rolls Royce engines too.

Talking about both Rolls Royce engine problems and certification, it is time for an update on the oh-so-nearly tragedy that occured when a Qantas A380 almost crashed after one of its Rolls-Royce engines exploded in flight on 4 November (see my commentary on the Qantas A380 near-crash here).

The problem was apparently due to a structural/design fault in the engine, and no-one has blamed Qantas for any part of the incident (particularly because QF had contracted the maintenance on the engines back to Rolls Royce, rather like how you can buy a photocopier with 'free' maintenance included into a fixed price per copy).

Quite the opposite – there has been universal praise for the extraordinary skill of the Qantas flight crew in bringing the plane safely back to Singapore, notwithstanding massive malfunctions, both known and unknown, in the plane, its engines, its computers, and its control surfaces and systems, and Qantas's subsequent caution and insistence on absolutely understanding and resolving the engine problems before allowing any of its A380s to fly again also shows that Qantas' famed excellence and uncompromised safety culture still thrives.

Not only did one of the engines explode in flight, but another of them couldn't be shut down, even after the plane had landed and all the power switches were turned off.  An attempt to turn the engine off by activating its fire extinguishers and using the emergency disconnects also failed, and it was only after more than two hours of continued operation on the ground that hoses from the airport fire brigade were used to snuff the engine out.

Now, after two months of grounding, Qantas is finally prepared to risk allowing the engines to operate at full thrust once more (needed for the long flights from Los Angeles to Australia, when the plane takes off close to fully laden, needing full engine power).

Here's an interesting tale of what its Australian writer sees as perfidy on Rolls-Royce's part, including his inability to reconcile two parallel statements from Rolls Royce about the engine problems.

Both statements referred to engine upgrades that Rolls-Royce had done to newer engines it had made (but which it didn't add to already operational engines or tell Qantas about – an extraordinary omission that demands explanation and apology).  In its first statement Rolls Royce said, explaining why the upgrades hadn't been done to the existing engines, that they had

no relationship to the failure of the engine on QF32 on November 4.

That's a fairly clear statement isn't it.  So how to reconcile that with this second statement, made at close to the same time, which said of the same upgrade that it

would eliminate the problem that caused the failure of said engine.

Hmmm.  Something doesn't seem to add up, does it.

The writer, Ben Sandilands, in earlier excellent articles he has also written, claims that Rolls Royce may have caused the European Aviation Safety Agency (who certified the engine as safe and suitable for use with the A380) and also Qantas and other airlines who then chose to buy the new Trent 900 engine for their A380s, to believe the engine was more closely derivative from its earlier and time tested Trent 800 engine than was the case.

Sandilands believes a mistaken perception, promulgated by Rolls Royce, that the Trent 900 was merely an evolved tweak from the Trent 800 caused it to be spared as much rigorous testing as it really should have received, and suggests the engine design was more fundamentally original than was disclosed.  He points to the very high incidence of faulty engines that were subsequently uncovered as proof of an underlying design fault which more rigorous testing should have identified.

Sandilands also points out that when Qantas filed a preliminary statement of claim in an Australian federal court against Rolls Royce, the engine manufacturer didn't even bother appearing in court to represent or defend itself.  He concludes (Australians don't hesitate to mince their words when the occasion calls for it) :

There is little reason to doubt that EASA was incompetent in certifying an engine which proved so dangerous in use, and so badly made in the course of an audit of the inventory.  It should never have been allowed to fly in the condition that it was in when it disintegrated on QF32.  [my emphasis]

So what does the EASA say in response to this criticism?  The Director General said

You can't predict everything.  The working life of a material sometimes allows you to discover a problem.  This is not particular to aviation or to Rolls-Royce.

So what use then is the certification process?

More to the point, what use is the EASA?

Who wishes to be on a plane when a problem is discovered when 'the working life' of its engines suddenly spectacularly ceases without warning?

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