The Export-Import Bank is a government-chartered U.S.export credit agency that provides financing for foreign buyers purchasing American-made goods. They also insure the sales for American companies should the foreign buyer default on the payments. The Ex-Im Bank is willing to accept the risk in financing international deals that most private creditors are not willing to take. The Export-Import Bank does not compete directly with the private sector creditors, its goal is to boost the U.S. economy and create and support American jobs. Credit is available for any American company with a more recent concentration on small businesses. The bank has made $3.4 billion in profits since 1934, and only 2% of its loans have failed in that same amount of time.
The Export-Import Bank is often referred to as "Boeing's Bank", because Boeing creates the largest number of transactions for the bank. Being that Boeing manufactures airliners to be sold and flown in a global market, of course the majority of customers are going to be foreign airlines. The Export-Import bank allows several developing foreign airlines, which otherwise wouldn't be able to, the ability to purchase Boeing aircraft, ultimately supporting U.S. jobs.
The bank has been in the news lately because for the first time in its nearly 78 years of existence, the Senate has voted against re-chartering the bank before its current charter expires on May 31st. The bank is close to reaching its current $100 billion lending limit, and lawmakers are seeking an increase to $140 billion on the new charter. According to Reuters, the bank supports about 290,000 jobs annually in the export industry, and a loss of the bank would be a big blow to Boeing and other exporters. Unfortunately, this normally uneventful reauthorization has become yet another case of politics. In another attempt to tarnish the Obama Administration before the upcoming elections, conservative Congressional Republicans have decided to vote 'no' on the bill unless they get it written their way, citing the bank as being "corporate welfare" and disagreeing with the general idea of the bank. They also cite the bank as giving huge cost breaks to foreign businesses while U.S. businesses end up having to pay much more for the same product. A Delta Air Lines executive was quoted in the Seattle Times saying that if they could use the bank like foreign carriers then "it could have saved approximately $100 million a year in financing costs and we could have used that money to hire more workers or even purchase additional aircraft from Boeing". Other Republicans are working to create a bipartisan extension for the Import-Export Bank which includes reforms and accountability measures.
The ATA stands against the Ex-Im Bank, filing a lawsuit against them in November of 2011. The lawsuit is over a $3.4 billion loan guarantee to Air India to finance 27 B787s for the airline. The ATA is trying to halt the deal, citing that the bank "fails to meet statutory requirements, including consideration of the impact on the US airline industry and US airline jobs”-CAPA. The ATA claims that the Ex-Im Bank is offering financing to a poorly run airline with very risky credit. They say that the company's poor financial status should disqualify them from the financial assistance.
Boeing has paid two of Washington's top lobbying firms to persuade lawmakers to reauthorize and expand the bank's charter. This lobbying is an attempt to overpower U.S. airlines' objections to the bank, who say they are hurt when our government helps foreign rivals buy airplanes-Bloomberg, as well as Tea Party lawmaker opposition. Anyone can see why Boeing would have an obvious interest in reauthorizing the bank. It helps them to sell a lot of airplanes all around the world, and may end up enabling a huge Air India 787 deal.
Saturday, March 24, 2012
Friday, March 16, 2012
The Corporate Aviation Boom in China
Business Aviation is expected to boom in China over the next decade and onward. In January 2011 there were 116 business aircraft registered in China, including Hong Kong and Macau. Of that 116 aircraft, 86 were manufactured within the last ten years according to Flightglobal. The number of total corporate aircraft is expected to grow by about 600 by 2019. Aviation businesses in China are seemingly popping up overnight. Fifty new aviation companies were started in China in 2011, and Chinese companies have purchased Cirrus Design and Teledyne-Continental, with more acquisitions expected to come in the future.
Even until recent years, China has suffered from a lack of business aviation infrastructure, strict airspace regulations, and a lack of knowledge about business aviation, all of which prevented growth in the sector until recently. Even until current times the Chinese low altitude airspace (below 13,000 feet) has been very restricted to privately owned aircraft. Flights over China must have prior approval by the military and flight plans must be filed well in advance. The Chinese government is reportedly committed to opening up that low altitude airspace to general aviation aircraft within the next five years, however. Business flights above that altitude will still require prior government approval, though. They also are committed to creating a network of general aviation infrastructure by the year 2020.
China is a country that has had a growing economy for some time. As the communist country's industrial economy has continued to grow and its GDP rises, the wealth has began to trickle downward. China now has more emerging millionaires and billionaires than ever before. Like it used to be in the United States, a corporate aircraft is a great way to show off your wealth, not to mention an important business tool. Over time as the economy grows, more infrastructure emerges, and regulations continue to loosen up, China's corporate aircraft fleet will only continue to grow.
All business aircraft manufacturers are turning their attention to China, whose economy continues to grow while the rest of the world's struggles. Jason Liao left Bombardier Aerospace to found the Asian Business Aviation Association, which helps potential business jet owners in China choose the right business aircraft for them to purchase. His company has been very successful to this day. His jump is a sign of the strength and confidence people should have in the nation's corporate aviation industry. Bombardier planned to open a regional support office and parts depot in Hong Kong in the first quarter of 2011, and Deer Jet opened the first fixed-base operation in southern China in the past year and a half. With all of the growth of the industry, there will be countless people needed to run FBOs, market aircraft, and of course fly the airplanes. China had a total of 8,800 civilian pilots several years ago, but now has over 10,000 ATP certified pilots alone, according to the NBAA. The job opportunities appear limitless in China.
More information on Chinese corporate aviation can be found in these articles:
Unlocking Opportunities in China, The Industry's New Frontier
Even until recent years, China has suffered from a lack of business aviation infrastructure, strict airspace regulations, and a lack of knowledge about business aviation, all of which prevented growth in the sector until recently. Even until current times the Chinese low altitude airspace (below 13,000 feet) has been very restricted to privately owned aircraft. Flights over China must have prior approval by the military and flight plans must be filed well in advance. The Chinese government is reportedly committed to opening up that low altitude airspace to general aviation aircraft within the next five years, however. Business flights above that altitude will still require prior government approval, though. They also are committed to creating a network of general aviation infrastructure by the year 2020.
China is a country that has had a growing economy for some time. As the communist country's industrial economy has continued to grow and its GDP rises, the wealth has began to trickle downward. China now has more emerging millionaires and billionaires than ever before. Like it used to be in the United States, a corporate aircraft is a great way to show off your wealth, not to mention an important business tool. Over time as the economy grows, more infrastructure emerges, and regulations continue to loosen up, China's corporate aircraft fleet will only continue to grow.
All business aircraft manufacturers are turning their attention to China, whose economy continues to grow while the rest of the world's struggles. Jason Liao left Bombardier Aerospace to found the Asian Business Aviation Association, which helps potential business jet owners in China choose the right business aircraft for them to purchase. His company has been very successful to this day. His jump is a sign of the strength and confidence people should have in the nation's corporate aviation industry. Bombardier planned to open a regional support office and parts depot in Hong Kong in the first quarter of 2011, and Deer Jet opened the first fixed-base operation in southern China in the past year and a half. With all of the growth of the industry, there will be countless people needed to run FBOs, market aircraft, and of course fly the airplanes. China had a total of 8,800 civilian pilots several years ago, but now has over 10,000 ATP certified pilots alone, according to the NBAA. The job opportunities appear limitless in China.
More information on Chinese corporate aviation can be found in these articles:
Unlocking Opportunities in China, The Industry's New Frontier
Thursday, March 8, 2012
The FAA Modernization and Reform Act of 2012
The FAA Modernization and Reform Act of 2012, or FAA Reauthorization Bill as it is commonly known by, was signed into law by President Obama on February 14, 2012. This bill provides the FAA with $63.4 billion in funding through 2015. It also sets forth new requirements on the industry and the FAA. The Bill creates several changes and FAA projects that I believe are important in the industry such as more stringent standards for carrying lithium batteries on aircraft, short-term runway incursion reduction goals, researching installation of cockpit doors on cargo aircraft, authorizating transpacific alternate airports to stay open, data protection for safety reporting programs, weather and aircraft spacing research, the researching of alternative fuels, and rules for inspecting Part 145 repair stations and foreign repair stations. I believe that the three changes brought by the bill that will have the most impact are the increased funding and establishment of standards for the Next Generation Air Transport System (NextGen), the stance taken against the European Union Emissions Trading Scheme (EU ETS), and the renewing of the Essential Air Service (EAS) program.
First and foremost, the Reauthorization Bill gives a huge boost to the development of NextGen. Prior to this bill, the FAA's NextGen program was becoming critically underfunded, far behind schedule, and lacking of any sort of project master schedule or definitive project leadership. Until the Reauthorization Bill, a 5-10% decrease in government funding for NextGen was expected, which would have delayed the project even farther than its present 5 years behind schedule. One of the main components of NextGen, En Route Automation Modernization, or ERAM, has been found to be seriously flawed during live traffic testing. ERAM is the new ATC computer system that will replace the aging HOST computer system and will be the first step in implementing NextGen. Now having adequate funding from the federal government, the FAA should be able to get the bugs worked out of ERAM faster and more thoroughly, giving a huge boost to the program. The bill also mandates that the position of 'Chief NextGen Officer' be appointed by the Administrator, and will serve 5 year terms. The responsibilities of the Chief NextGen Officer include creating an annual NextGen plan, creating a budget for the program, and general coordination and oversight of the program. More about the Chief NextGen Officer's duties can be found in the FAA Modernization and Reform Act of 2012, page 28. This position means an overall more clear mission and timeline, and greater efficiency of the project. Additionally, the act states that the ADS-B technology to be required for NextGen be identified by the FAA.
Beginning this year the European Union began tracking the carbon emissions of aircraft flying to or from Europe, causing aviation to become a part of the ETS. If the EU gets their way, they will be collecting a bill from all applicable airlines for a large percentage of their total carbon emissions, plus fines for any emissions over their allotted amount. This has caused outrage around the world including in the United States, particularly because the EU will be taxing for the entire duration of a flight to or from Europe, even that portion outside of EU airspace. I believe that the government's stance on this topic in the Reauthorization Bill will be monumental in the outcome of the ETS controversy. It states that the EU should not implement their carbon trading scheme on the aviation community without going through the ICAO. It also states that the "US should use all political and diplomatic tools available to prevent ETS from being applied to US aircraft operators."- arentfox.com . This portion of the Act further strengthens the US's opposition to airline ETS implementation. I believe the inclusion of this subject in the Act is so important because this would be such a huge financial burden to US airlines, and the outcome of the arguments may well determine the future financial health of US airlines, impact ticket prices, and impact future international relations including a possible trade war.
As I mentioned above, the final element of the three most impactful sections of the Reauthorization Bill is the changes to the Essential Air Service program. EAS is a program that grants government subsidies to airlines that operate to select smaller communities that are not necessarily profitable for the airline to operate to on its own. The program greatly enhances air transportation opportunities for those populations not located near a major US airport (not to mention probably provides a few more jobs for us pilots). It is a very successful program, but it has been under some scrutiny by lawmakers. There was an attempt made to completely eliminate EAS, but the Reauthorization Bill has preserved it. In compromise for keeping the program, it will see as much as $50 million less in funding, with reductions every year- $143 million total funding in 2012, $118 in 2013, $107 in 2014, and $93 million in 2015, as seen in a summary of the Act. The legislation also limits the EAS program to airports with 10 or more operations per day and must be located within 175 miles of a large or medium hub airport (except in Alaska or Hawaii), and prohibits any more airports from applying to the EAS program. I do believe it is important that many communities located far from hub airports maintain the availability of commercial air transportation. It is a service that I do believe should be easily available to all Americans. I believe that this program does raise the standard of living of America as a whole. With the reduction in funding for EAS, airline service to some small airports will inevitably be cut, leaving many travelers with a much longer journey. The cut in funding and stricter requirements may reduce the profitability of some regional airlines being that they were receiving basically free money to sell seats on their aircraft. This will also leave some people without the jobs that the airlines previously created in their towns, and tax revenues will decrease. It is however better than the alternative of this program ending altogether.
First and foremost, the Reauthorization Bill gives a huge boost to the development of NextGen. Prior to this bill, the FAA's NextGen program was becoming critically underfunded, far behind schedule, and lacking of any sort of project master schedule or definitive project leadership. Until the Reauthorization Bill, a 5-10% decrease in government funding for NextGen was expected, which would have delayed the project even farther than its present 5 years behind schedule. One of the main components of NextGen, En Route Automation Modernization, or ERAM, has been found to be seriously flawed during live traffic testing. ERAM is the new ATC computer system that will replace the aging HOST computer system and will be the first step in implementing NextGen. Now having adequate funding from the federal government, the FAA should be able to get the bugs worked out of ERAM faster and more thoroughly, giving a huge boost to the program. The bill also mandates that the position of 'Chief NextGen Officer' be appointed by the Administrator, and will serve 5 year terms. The responsibilities of the Chief NextGen Officer include creating an annual NextGen plan, creating a budget for the program, and general coordination and oversight of the program. More about the Chief NextGen Officer's duties can be found in the FAA Modernization and Reform Act of 2012, page 28. This position means an overall more clear mission and timeline, and greater efficiency of the project. Additionally, the act states that the ADS-B technology to be required for NextGen be identified by the FAA.
Beginning this year the European Union began tracking the carbon emissions of aircraft flying to or from Europe, causing aviation to become a part of the ETS. If the EU gets their way, they will be collecting a bill from all applicable airlines for a large percentage of their total carbon emissions, plus fines for any emissions over their allotted amount. This has caused outrage around the world including in the United States, particularly because the EU will be taxing for the entire duration of a flight to or from Europe, even that portion outside of EU airspace. I believe that the government's stance on this topic in the Reauthorization Bill will be monumental in the outcome of the ETS controversy. It states that the EU should not implement their carbon trading scheme on the aviation community without going through the ICAO. It also states that the "US should use all political and diplomatic tools available to prevent ETS from being applied to US aircraft operators."- arentfox.com . This portion of the Act further strengthens the US's opposition to airline ETS implementation. I believe the inclusion of this subject in the Act is so important because this would be such a huge financial burden to US airlines, and the outcome of the arguments may well determine the future financial health of US airlines, impact ticket prices, and impact future international relations including a possible trade war.
As I mentioned above, the final element of the three most impactful sections of the Reauthorization Bill is the changes to the Essential Air Service program. EAS is a program that grants government subsidies to airlines that operate to select smaller communities that are not necessarily profitable for the airline to operate to on its own. The program greatly enhances air transportation opportunities for those populations not located near a major US airport (not to mention probably provides a few more jobs for us pilots). It is a very successful program, but it has been under some scrutiny by lawmakers. There was an attempt made to completely eliminate EAS, but the Reauthorization Bill has preserved it. In compromise for keeping the program, it will see as much as $50 million less in funding, with reductions every year- $143 million total funding in 2012, $118 in 2013, $107 in 2014, and $93 million in 2015, as seen in a summary of the Act. The legislation also limits the EAS program to airports with 10 or more operations per day and must be located within 175 miles of a large or medium hub airport (except in Alaska or Hawaii), and prohibits any more airports from applying to the EAS program. I do believe it is important that many communities located far from hub airports maintain the availability of commercial air transportation. It is a service that I do believe should be easily available to all Americans. I believe that this program does raise the standard of living of America as a whole. With the reduction in funding for EAS, airline service to some small airports will inevitably be cut, leaving many travelers with a much longer journey. The cut in funding and stricter requirements may reduce the profitability of some regional airlines being that they were receiving basically free money to sell seats on their aircraft. This will also leave some people without the jobs that the airlines previously created in their towns, and tax revenues will decrease. It is however better than the alternative of this program ending altogether.
Saturday, February 18, 2012
EU Emissions Trading Scheme Tensions
1) The European Union Emissions Trading Scheme is the European Union's plan to cap and reduce greenhouse gas emissions over time. The concept of the scheme is that each member country submits a total yearly analysis of greenhouse gas emissions to the EU. Each member country is then assigned a limit for total yearly emissions. Factories producing greenhouse gasses must apply for permits which cap the yearly amount of carbon emissions that the specific plant can produce. At the end of the year if a company is under their yearly limit, they can sell off their surplus emissions allowances to another company which has gone over its limit, making a profit for themselves. If a company which has gone over its limit cannot find another company to trade with, they face heavy fines. The EU profits from the initial sale of the permits, and no additional allowances are sold, allowing the "currency" to hold its value and keep emissions rates at a constant. Over time, emissions caps are lowered, in an attempt to cause a shift to greener alternatives.
ETS was first implemented in 2005, but is just now being applied to aviation (it started January 1). If the EU gets their way, airlines will be allowed 82% of their carbon emissions, based on 2010 data, for free according to Forbes. They must purchase the remaining 15% at rates anywhere from 8.56-12 Euro per tonne. The total amount of emissions allowed, however, is a 3% decrease from the 2010 measurements, explaining the missing 3%. In 2013, caps will fall to 95% of their 2010 numbers, and free allowances will fall to 80%. I would like to note that the emissions are calculated from the point of origin, not within the European Union. This has caused outrage from governments and airlines worldwide. The regulation will cost the industry an estimated $23.8 billion up to 2020.
2) The US is upset about ETS because lawmakers claim that it violates the Chicago convention, as well as the Open Skies Agreement between the US and EU. EU courts have determined, however, that it is perfectly legal under both of these agreements. The US government is upset at this added expense to an already fragile and struggling industry. Secretary of State Hillary Clinton has urged the European Union to cooperate with the industry and foreign governments instead of working against them. Senator John Thune of South Dakota proposed a bill which would prohibit US airlines from complying with the ETS, if the DOT deems it to be in the best public interest. The government says that they are addressing the carbon emissions problems themselves in a different manner from that of the EU, like NextGen or financial incentives. Outside of the US, China has banned its carriers from complying with the regulation unless granted permission.
3) According to Air Transport World, the ICAO has agreed to adopt a working paper encouraging the European Union to exclude non-European carriers operating flights to or from Europe from ETS. This is perhaps a result of increasing pressure from ICAO non-European member states. Like the US, the ICAO has also encouraged the EU to work with the international aviation community in addressing the emissions problem. They also stated the ICAO's dedication and its role in reducing aircraft emissions. This document shows that significant global opposition to EU ETS is growing.
4) I believe that EU ETS is ridiculous. Applying such an expensive program to an industry already operating with such tight profit margins and that is struggling so much is mind boggling. This regulation will halt any airline expansion to or within Europe entirely and effect the European and global economy negatively. I do not agree with the EU ETS in the first place, let alone when it is applied to aviation. I believe that the airlines have already been doing a great job of reducing their emissions on their own by upgrading their fleets, running flights tighter, and taking other measures. The fuel prices and economy alone are already a great incentive for them to reduce fuel burn, ETS is just a burden. In addition, I think there are better ways to reduce emissions, such as financial incentives and more direct and efficient routing, as the US Government and the ICAO also believe. The added cost will leave the airlines without the cash to upgrade their fleet and actually reduce emissions, and trouble them further in meeting the even further reduction in emissions standards coming in the future. I also believe that the European Union is greatly stepping outside of their jurisdiction by charging airlines for carbon emissions based on the entire duration of their flight outside of European Airspace. And ultimately, this will hurt the consumer, raising ticket prices even further.
5) I think that the ICAO should promote new air traffic systems worldwide like NextGen to provide more direct routing, reduce taxi times, reduce holding, and allow a more optimal cruising altitude for each flight. The ICAO could require member countries to meet certain carbon emissions certification standards when certifying new aircraft. I think that the ICAO could also provide some sort of a special airline rating for airlines that make extra efforts to reduce emissions. The ICAO could allow a participating airline to put a special decal on their airplane to advertise the rating. This would benefit the airline simply by enhancing their public image, causing more consumers to book with the more environmentally friendly airline. Voluntary safety programs based on this premises have already proven to work in the industry.
ETS was first implemented in 2005, but is just now being applied to aviation (it started January 1). If the EU gets their way, airlines will be allowed 82% of their carbon emissions, based on 2010 data, for free according to Forbes. They must purchase the remaining 15% at rates anywhere from 8.56-12 Euro per tonne. The total amount of emissions allowed, however, is a 3% decrease from the 2010 measurements, explaining the missing 3%. In 2013, caps will fall to 95% of their 2010 numbers, and free allowances will fall to 80%. I would like to note that the emissions are calculated from the point of origin, not within the European Union. This has caused outrage from governments and airlines worldwide. The regulation will cost the industry an estimated $23.8 billion up to 2020.
2) The US is upset about ETS because lawmakers claim that it violates the Chicago convention, as well as the Open Skies Agreement between the US and EU. EU courts have determined, however, that it is perfectly legal under both of these agreements. The US government is upset at this added expense to an already fragile and struggling industry. Secretary of State Hillary Clinton has urged the European Union to cooperate with the industry and foreign governments instead of working against them. Senator John Thune of South Dakota proposed a bill which would prohibit US airlines from complying with the ETS, if the DOT deems it to be in the best public interest. The government says that they are addressing the carbon emissions problems themselves in a different manner from that of the EU, like NextGen or financial incentives. Outside of the US, China has banned its carriers from complying with the regulation unless granted permission.
3) According to Air Transport World, the ICAO has agreed to adopt a working paper encouraging the European Union to exclude non-European carriers operating flights to or from Europe from ETS. This is perhaps a result of increasing pressure from ICAO non-European member states. Like the US, the ICAO has also encouraged the EU to work with the international aviation community in addressing the emissions problem. They also stated the ICAO's dedication and its role in reducing aircraft emissions. This document shows that significant global opposition to EU ETS is growing.
4) I believe that EU ETS is ridiculous. Applying such an expensive program to an industry already operating with such tight profit margins and that is struggling so much is mind boggling. This regulation will halt any airline expansion to or within Europe entirely and effect the European and global economy negatively. I do not agree with the EU ETS in the first place, let alone when it is applied to aviation. I believe that the airlines have already been doing a great job of reducing their emissions on their own by upgrading their fleets, running flights tighter, and taking other measures. The fuel prices and economy alone are already a great incentive for them to reduce fuel burn, ETS is just a burden. In addition, I think there are better ways to reduce emissions, such as financial incentives and more direct and efficient routing, as the US Government and the ICAO also believe. The added cost will leave the airlines without the cash to upgrade their fleet and actually reduce emissions, and trouble them further in meeting the even further reduction in emissions standards coming in the future. I also believe that the European Union is greatly stepping outside of their jurisdiction by charging airlines for carbon emissions based on the entire duration of their flight outside of European Airspace. And ultimately, this will hurt the consumer, raising ticket prices even further.
5) I think that the ICAO should promote new air traffic systems worldwide like NextGen to provide more direct routing, reduce taxi times, reduce holding, and allow a more optimal cruising altitude for each flight. The ICAO could require member countries to meet certain carbon emissions certification standards when certifying new aircraft. I think that the ICAO could also provide some sort of a special airline rating for airlines that make extra efforts to reduce emissions. The ICAO could allow a participating airline to put a special decal on their airplane to advertise the rating. This would benefit the airline simply by enhancing their public image, causing more consumers to book with the more environmentally friendly airline. Voluntary safety programs based on this premises have already proven to work in the industry.
Friday, February 10, 2012
The Importance of Professionalism in Aviation
1) After spending some time at a large passenger airline, I would like to fly for FedEx as a captain. FedEx pays well and is a great airline to fly for once your seniority grows a bit. It also is about as secure as a job comes in the airline industry, with no pilot layoffs in the company's 30 year history.
2) FedEx is a cargo airline based in Memphis Tennessee. It is a subsidiary of FedEx Corporation and it operates from numerous hubs around the world. FedEx is the world's largest cargo airline. The airline began to thrive in the late 1970s and early 80s with the coming of deregulation. The job that I would like to work up to at FedEx is a wide body captain. The airline flies mostly at night, and in your early years it will be almost impossible to see the light of day when working, but I have read that it is possible to get a majority of day flights and to be home almost every night once your seniority has grown.
3) When the question of safety concerns on this job is raised, the first thing that comes to mind is pilot fatigue. Will the extensive night operations create a hazardous situation on board the aircraft? Or will I simply be able to get used to being awake and alert when the human body is supposed to be resting? Pilot fatigue is much harder to combat in the cargo industry than in the passenger industry due to the night operations and often uncertain schedules. The new crew rest regulations are not mandatory to the cargo carriers and are probably not going to be adopted by most cargo carriers. Another safety concern I have is the decrease in safety during night operations in general. Without the sun to allow us to accurately perceive the landscape that we are flying over (and hopefully not into), flight becomes more dangerous. As a pilot I will be more susceptible to illusions and spacial disorientation. One FedEx accident (flight 1478) occurred when a 727 clipped the tree line on approach to Tallahassee, resulting in destruction of the aircraft. One of the contributing factors to the accident was pilot fatigue, and I am willing to say that a night time illusion also played a part. A final concern is what some of the cargo on board might contain. It would not be difficult for a terrorist to put some sort of an explosive in an envelope and ship it overnight aboard a FedEx aircraft.
The only way that I believe I can mitigate these fatigue issues is to be as well rested as possible. This means not getting distracted by things going on during the afternoon before a night of flying. I would need to have a dark, quiet room to sleep in and sort of assist my body in forgetting that it is day time. I am sure many cargo pilots do this or at least attempt to do this already. I think that early in my time with the airline when I am on standby, occasional naps throughout an on-call day would help to mitigate fatigue late at night. Another way to help decrease this risk is with lots of caffeine during a flight period. As far as night illusions go, the best any pilot can do is to be aware of them and continuously keep them in mind throughout a night flight.
4)
*1) To me, professionalism is acting in a mature, business-like manner, abiding by regulations and company procedures, creating a good line of communication of flight related information between flight crew members, and treating co-workers and customers respectfully. Professionalism also includes doing nothing that you believe may degrade safety.
*2) A lack of professionalism was demonstrated in "Flying Cheap" in numerous different ways. The documentary touched on the first officer's illness on the day of the crash. She had a cold, and her and the captain of flight 3407 were discussing it as we heard on the CVR. She was also quite fatigued, having commuted earlier that day from Seattle and rested on a chair in the crew lounge. Both flying in a state of fatigue and with a cold show that the first officer had little concern for the safety of the passengers. These two factors can hugely impare/change cognitive ability and motivation in the cockpit. This attitude begins with management, however. It was said in the documentary that management would strongly "suggest" that the pilot still execute the flight if the pilot were to call in sick or claim fatigue.
A second example of a lack of professionalism was seen in one first officer's story. His aircraft was overweight and his captain told him to alter the load manifest to indicate that fewer adults and more children were on board. When he refused to do so, the captain did it himself. After the first officer shared this information with the FAA and the captain's certificate was revoked, airline management went as far as to protest the case in court and defend the captain. The only professional person here was the first officer. As we can see, the corporate attitude sets the tone for the rest of the operations of the company. In this case, their only goal was to complete all flights and get paid, and a compromise of safety seemed almost welcomed if it meant getting the job done.
*3) The first way that I plan to maintain or even expand on my level of professionalism when flying for FedEx is to always keep my morals in mind. I believe that I have strong morals, and I would never want to do something unsafe to others or unethical. I would always need to remember the enormous responsibility that I would have as a captain of the aircraft. Even though there are no paying passengers on board, there are still people on the ground all over the world, and an accident is likely to hurt or kill somebody. Any unsafe actions also put millions of dollars in aircraft and cargo at risk. In addition to this, I would create an open and comfortable environment for communication in the cockpit. I want my first officer to feel comfortable giving suggestions that may lead to a better outcome. Two heads are better than one when in the proper environment. My desire would never be to intimidate a first officer or to be the sole mind in the thought process.
2) FedEx is a cargo airline based in Memphis Tennessee. It is a subsidiary of FedEx Corporation and it operates from numerous hubs around the world. FedEx is the world's largest cargo airline. The airline began to thrive in the late 1970s and early 80s with the coming of deregulation. The job that I would like to work up to at FedEx is a wide body captain. The airline flies mostly at night, and in your early years it will be almost impossible to see the light of day when working, but I have read that it is possible to get a majority of day flights and to be home almost every night once your seniority has grown.
3) When the question of safety concerns on this job is raised, the first thing that comes to mind is pilot fatigue. Will the extensive night operations create a hazardous situation on board the aircraft? Or will I simply be able to get used to being awake and alert when the human body is supposed to be resting? Pilot fatigue is much harder to combat in the cargo industry than in the passenger industry due to the night operations and often uncertain schedules. The new crew rest regulations are not mandatory to the cargo carriers and are probably not going to be adopted by most cargo carriers. Another safety concern I have is the decrease in safety during night operations in general. Without the sun to allow us to accurately perceive the landscape that we are flying over (and hopefully not into), flight becomes more dangerous. As a pilot I will be more susceptible to illusions and spacial disorientation. One FedEx accident (flight 1478) occurred when a 727 clipped the tree line on approach to Tallahassee, resulting in destruction of the aircraft. One of the contributing factors to the accident was pilot fatigue, and I am willing to say that a night time illusion also played a part. A final concern is what some of the cargo on board might contain. It would not be difficult for a terrorist to put some sort of an explosive in an envelope and ship it overnight aboard a FedEx aircraft.
The only way that I believe I can mitigate these fatigue issues is to be as well rested as possible. This means not getting distracted by things going on during the afternoon before a night of flying. I would need to have a dark, quiet room to sleep in and sort of assist my body in forgetting that it is day time. I am sure many cargo pilots do this or at least attempt to do this already. I think that early in my time with the airline when I am on standby, occasional naps throughout an on-call day would help to mitigate fatigue late at night. Another way to help decrease this risk is with lots of caffeine during a flight period. As far as night illusions go, the best any pilot can do is to be aware of them and continuously keep them in mind throughout a night flight.
4)
*1) To me, professionalism is acting in a mature, business-like manner, abiding by regulations and company procedures, creating a good line of communication of flight related information between flight crew members, and treating co-workers and customers respectfully. Professionalism also includes doing nothing that you believe may degrade safety.
*2) A lack of professionalism was demonstrated in "Flying Cheap" in numerous different ways. The documentary touched on the first officer's illness on the day of the crash. She had a cold, and her and the captain of flight 3407 were discussing it as we heard on the CVR. She was also quite fatigued, having commuted earlier that day from Seattle and rested on a chair in the crew lounge. Both flying in a state of fatigue and with a cold show that the first officer had little concern for the safety of the passengers. These two factors can hugely impare/change cognitive ability and motivation in the cockpit. This attitude begins with management, however. It was said in the documentary that management would strongly "suggest" that the pilot still execute the flight if the pilot were to call in sick or claim fatigue.
A second example of a lack of professionalism was seen in one first officer's story. His aircraft was overweight and his captain told him to alter the load manifest to indicate that fewer adults and more children were on board. When he refused to do so, the captain did it himself. After the first officer shared this information with the FAA and the captain's certificate was revoked, airline management went as far as to protest the case in court and defend the captain. The only professional person here was the first officer. As we can see, the corporate attitude sets the tone for the rest of the operations of the company. In this case, their only goal was to complete all flights and get paid, and a compromise of safety seemed almost welcomed if it meant getting the job done.
*3) The first way that I plan to maintain or even expand on my level of professionalism when flying for FedEx is to always keep my morals in mind. I believe that I have strong morals, and I would never want to do something unsafe to others or unethical. I would always need to remember the enormous responsibility that I would have as a captain of the aircraft. Even though there are no paying passengers on board, there are still people on the ground all over the world, and an accident is likely to hurt or kill somebody. Any unsafe actions also put millions of dollars in aircraft and cargo at risk. In addition to this, I would create an open and comfortable environment for communication in the cockpit. I want my first officer to feel comfortable giving suggestions that may lead to a better outcome. Two heads are better than one when in the proper environment. My desire would never be to intimidate a first officer or to be the sole mind in the thought process.
Thursday, February 2, 2012
The Trend of Airline Merging
1) In April of 2001, American Airlines acquired Trans World Airlines, which operated its last flight on December 1, 2001. TWA was an airline that had been plagued by financial problems stemming from bad ownership since Howard Hughes became the majority stock holder in the 1930s. The nail in the coffin was the Carl Icahn era of ownership. Carl Icahn purchased the majority of stock in the airline in 1985. Icahn was a creditor of TWA, and was owed $190 million by the airline when they filed for bankruptcy in 1992. He made a deal before he left in 1993 that would get to him the money he was owed. He arranged a contract between Karabu Corp. (owned by Icahn) and TWA. Karabu would get a 45 percent discount on TWA ticket purchases, and was guaranteed a certain proportion of seats through 2003. Karabu then sold the tickets on LowestFare.com to consumers. The deal made millions for Icahn, but left TWA $540 million further in debt. Far in debt, TWA agreed to a merger with American Airlines, thinking it would be the best move to keep their employees working. More about this deal can be read at stlmag.com.
American Airlines promised to keep TWA's primary hub in St. Louis operating at its 2001 level. However, shortly after the acquisition, American began cutting back operations at St. Louis drastically and laid off half of the former TWA workers within two years, as a 2003 USA Today article states. Many TWA routes were cut. At the time of the publication of this article, all TWA flight attendants had lost their jobs, and 80% of the pilots had lost their jobs. American attributes the job cuts to the terrorist attacks of 2001, a SARS epidemic, St. Louis' close proximity to Chicago O'Hare airport, and a war. Laid off workers claimed that American made false promises to workers in order to get approval for the deal from Congress, and then quickly changed face. The trouble with the merger is that all of TWA's employees went to the bottom of the seniority list, below all American employees, which made it easy to lay them off first.
2) United and Continental Airlines announced in May of 2010 that they would join together to form United Continental Holdings. The two had been in negotiation a merger two years earlier. Not liking United's financial outlook, Continental backed out of the deal. After the following two years had passed however, negotiations began again and a fast merger agreement came together. The merger created the largest airline in the world, surpassing Delta. Both airlines were struggling financially due to the recession, and merged with the expectation that creating one airline would save a large amount of money in operating costs. United and Continental were a good match because most of their routes domestically and internationally did not overlap, similar to Northwest and Delta's merger. United had large international operations to Asia, while Continental had large international operations to Latin America. On November 30, 2011, United Continental was granted FAA permission to operate under one operating certificate. Parties from the two airlines agreed to operate under the Continental certificate.
Last summer, United announced that 100 to 200 furloughed United pilots would be offered jobs at Continental Airlines, and would eventually fly for United again once the two airlines began operating on the same certificate- Dallas News. This had already given the merger a positive outcome. The first of the growing pains that the newly formed airline faced was how to form a new pilot seniority list. Unlike Northwest and Delta, United and Continental had not come to an agreement on this topic before the acquisition took place. All flight attendants are currently on a combined seniority list. There were other smaller, seemingly laughable issues, like whether or not to continue the broadcast of ATC communication on United's ATC channel for the passengers (they did), class configurations domestically and internationally (will be standardized this year), and whether or not to continue serving Continental's famous Angus cheeseburgers on flights. Also as part of the merger, the Department of Justice required United Continental to lease 18 slots at Newark airport to Southwest Airlines as part of an anti-trust agreement. The two companies also decided on equal branding and representation, keeping the United name but using the Continental globe. The Continental airlines CEO took control of the newly formed airline, and equal representation from each airline exists on the company's board.
3) As stated by the New York Times, American Airlines filed for chapter 11 bankruptcy in an effort to shed its debt burden and to cut labor costs. American Airlines was the last major airline to file for bankruptcy. The company has been having trouble competing with the growing low-cost airlines and has seen a large decrease in revenue, causing them to borrow money from creditors. AMR Corp. filed having $5 billion of cash. In the short term, American will continue to operate normally, and passengers are being told not to worry. American Airlines ordered 460 new 737s and A320s earlier this year in an effort to cut fuel costs and rejuvenate their fleet. According to Yahoo Finance, American plans on cutting 15% of their workforce, or about 13,000 jobs in an effort to further cut costs.
U.S. Airways and Delta are reportedly interested in acquiring American Airlines. A merger with U.S. Airways would strengthen American's weak domestic network. This would in turn increase traffic through American's hubs to transatlantic and Latin American destinations. Wary passengers are choosing not to travel with American which is creating a decrease in traffic through their hubs. A merger with U.S. Airways would strengthen consumer confidence and boost this traffic. In addition, the merger would allow the new airline to pay back creditors more easily than American could do alone (Bloomberg). Delta Air Lines is also reported to have interest in a merger with American, but will not confirm. The merger would once again create the world's largest airline for Delta. It would leave no corner of the globe uncovered by the mega-airline. I think that Delta's acquisition of American is far less likely than a U.S. Airways acquisition. There is far more fact-based value in a merger with U.S. Airways than with Delta, and the dust from Delta's merger with Northwest has just settled. I do believe that a merger with U.S. Airways is likely. Given the modern day trend with airline merging, I give American a 50/50 chance of making it out alone. I do believe that they will do everything they can to avoid a merger with another airline.
4) I foresee a decrease in job opportunities as a pilot resulting from these mergers. A merger happens because at least one airline is in a bad financial situation, which causes layoffs to pilots and route trimming. When one airline merges with another, usually at least some routes that overlap and flights will be cut. I would forecast a lower amount of hiring with one larger airline as opposed to two or three smaller airlines. It would take fewer pilots to run the larger airline with fewer total flights than if the two were still independent. Another reason for less flights is decreased competition between airlines.
American Airlines promised to keep TWA's primary hub in St. Louis operating at its 2001 level. However, shortly after the acquisition, American began cutting back operations at St. Louis drastically and laid off half of the former TWA workers within two years, as a 2003 USA Today article states. Many TWA routes were cut. At the time of the publication of this article, all TWA flight attendants had lost their jobs, and 80% of the pilots had lost their jobs. American attributes the job cuts to the terrorist attacks of 2001, a SARS epidemic, St. Louis' close proximity to Chicago O'Hare airport, and a war. Laid off workers claimed that American made false promises to workers in order to get approval for the deal from Congress, and then quickly changed face. The trouble with the merger is that all of TWA's employees went to the bottom of the seniority list, below all American employees, which made it easy to lay them off first.
2) United and Continental Airlines announced in May of 2010 that they would join together to form United Continental Holdings. The two had been in negotiation a merger two years earlier. Not liking United's financial outlook, Continental backed out of the deal. After the following two years had passed however, negotiations began again and a fast merger agreement came together. The merger created the largest airline in the world, surpassing Delta. Both airlines were struggling financially due to the recession, and merged with the expectation that creating one airline would save a large amount of money in operating costs. United and Continental were a good match because most of their routes domestically and internationally did not overlap, similar to Northwest and Delta's merger. United had large international operations to Asia, while Continental had large international operations to Latin America. On November 30, 2011, United Continental was granted FAA permission to operate under one operating certificate. Parties from the two airlines agreed to operate under the Continental certificate.
Last summer, United announced that 100 to 200 furloughed United pilots would be offered jobs at Continental Airlines, and would eventually fly for United again once the two airlines began operating on the same certificate- Dallas News. This had already given the merger a positive outcome. The first of the growing pains that the newly formed airline faced was how to form a new pilot seniority list. Unlike Northwest and Delta, United and Continental had not come to an agreement on this topic before the acquisition took place. All flight attendants are currently on a combined seniority list. There were other smaller, seemingly laughable issues, like whether or not to continue the broadcast of ATC communication on United's ATC channel for the passengers (they did), class configurations domestically and internationally (will be standardized this year), and whether or not to continue serving Continental's famous Angus cheeseburgers on flights. Also as part of the merger, the Department of Justice required United Continental to lease 18 slots at Newark airport to Southwest Airlines as part of an anti-trust agreement. The two companies also decided on equal branding and representation, keeping the United name but using the Continental globe. The Continental airlines CEO took control of the newly formed airline, and equal representation from each airline exists on the company's board.
3) As stated by the New York Times, American Airlines filed for chapter 11 bankruptcy in an effort to shed its debt burden and to cut labor costs. American Airlines was the last major airline to file for bankruptcy. The company has been having trouble competing with the growing low-cost airlines and has seen a large decrease in revenue, causing them to borrow money from creditors. AMR Corp. filed having $5 billion of cash. In the short term, American will continue to operate normally, and passengers are being told not to worry. American Airlines ordered 460 new 737s and A320s earlier this year in an effort to cut fuel costs and rejuvenate their fleet. According to Yahoo Finance, American plans on cutting 15% of their workforce, or about 13,000 jobs in an effort to further cut costs.
U.S. Airways and Delta are reportedly interested in acquiring American Airlines. A merger with U.S. Airways would strengthen American's weak domestic network. This would in turn increase traffic through American's hubs to transatlantic and Latin American destinations. Wary passengers are choosing not to travel with American which is creating a decrease in traffic through their hubs. A merger with U.S. Airways would strengthen consumer confidence and boost this traffic. In addition, the merger would allow the new airline to pay back creditors more easily than American could do alone (Bloomberg). Delta Air Lines is also reported to have interest in a merger with American, but will not confirm. The merger would once again create the world's largest airline for Delta. It would leave no corner of the globe uncovered by the mega-airline. I think that Delta's acquisition of American is far less likely than a U.S. Airways acquisition. There is far more fact-based value in a merger with U.S. Airways than with Delta, and the dust from Delta's merger with Northwest has just settled. I do believe that a merger with U.S. Airways is likely. Given the modern day trend with airline merging, I give American a 50/50 chance of making it out alone. I do believe that they will do everything they can to avoid a merger with another airline.
4) I foresee a decrease in job opportunities as a pilot resulting from these mergers. A merger happens because at least one airline is in a bad financial situation, which causes layoffs to pilots and route trimming. When one airline merges with another, usually at least some routes that overlap and flights will be cut. I would forecast a lower amount of hiring with one larger airline as opposed to two or three smaller airlines. It would take fewer pilots to run the larger airline with fewer total flights than if the two were still independent. Another reason for less flights is decreased competition between airlines.
Saturday, January 28, 2012
The State of the Airliner Manufacturers
The Boeing 787 is a wide body, long-range commercial airliner aimed as a replacement for the 767, A300, and A330 families. The first 787 entered into service with All Nippon Airways on October 26, 2011. The 787 is the first airliner built out of a majority of composites and Boeing claims it to be 20% more fuel efficient than the aging 767.
The Airbus A380 is the largest passenger airliner in the world. Entering into service in October of 2007 with Singapore Airlines, the A380 is a long-range, wide body, complete double deck airliner that can carry between 525 and 853 passengers. Airbus was aiming to break Boeing's monopoly on the Ultra High Capacity market with the A380.
The Boeing 747-8 is an Ultra High Capacity revamped version of the 747-400. The first delivery of the 747-8F Freighter was made in October of 2011. The 747-8 features a fuselage stretch of 18 feet over the 747-400 to increase its passenger capacity and help it compete with the A380. It is now the longest passenger airliner in the world. The 747-8 features a redesigned wing, new flight control systems and flight deck technology, and new 787 engines to make it more efficient.
The A350 is a wide body long-range airliner currently in its design phase with Airbus. The A350 project was started in reaction to the 787. The two are very similar aircraft. The A350 also will be built out of a majority of composite materials, and offers up to an 8% increase in fuel efficiency over the 787. The A350 is slightly larger than the 787, offering 270-440 seats as opposed to 210-330 with the 787. It is scheduled for entry into service sometime in 2014.
Based on the current status of Boeing and Airbus and the current amount of orders for each, I am sad to say that I see Airbus taking the lead in the commercial jet industry. The first reason that I see Airbus taking the lead is due to the current status of the maunufacturers' real money makers- narrow body, single aisle, short to medium range airliners. Airbus is currently designing the A320neo. Virtually the only change from the traditional A320s is new upgraded engines. The new engines will offer a 15% increase in fuel efficiency over the current A320s. Since the A320 is in direct competition with the 737, it has already gained a huge lead in orders over the 737-900 and MAX series. Some loyal Boeing customers have placed orders for the A320neo. The A320neo family has become the fastest selling, most popular airliner in commercial aircraft history with nearly 1,200 orders since being introduced. After hesitating for some time on whether redesigning the 737 would be cost effective relative to a marginal increases in fuel efficiency over the current 737s, Boeing announced the 737 MAX in August 2011. The 737 MAX will directly compete with the A320neo. The 737 MAX is advertised to be 6% more fuel efficient than the A320neo. Boeing has already received 250 orders for the aircraft, but is far behind Airbus who already has 1,200 orders for the new A320. In the narrow body, revenue generating arena: advantage Airbus.
I would consider Boeing's 787 and Airbus' A350 to be evenly matched in their competition. While the 787 has about a 5 year head start on the A350, orders for the A350 are currently at about the same number that the 787 had at this point in its design. With the A350 being up to 100 seats larger than the rival 787, it could potentially compete with Boeing's 777 line as well. Other than the size difference though, the A350 and 787 are pretty much the same airplane, and the 787 is considerable cheaper (~$200 million vs. ~$260 million). I don't see the A350 taking a lead over the 787 unless you truly are getting THAT much more for your money. In the new long-range, composite wide body niche: slight advantage to Boeing.
In the jumbo-jet competition between the new 747-8 and the A380-800, I expect the A380-800 to outsell the 747-8I (passenger version) easily. The 747-8I has only 36 orders thus far as opposed to 253 for the A380-800. Even though Airbus has a head start over Boeing on this project, Airbus has a runaway lead with the A380. Boeing is advertising a 6% cost savings per seat-mile over the A380, but it appears the airlines would still rather have the extra passenger seating of the A380. Where Boeing is winning in this match-up is with the 747-8F, the freighter version. With the 747 being a long respected cargo workhorse and production of the A380-800F being delayed indefinitely, Boeing as a runaway lead with 70 orders, as opposed to 0 for the A380-800F. Airbus still wins the jumbo jet category, however. A more in depth analysis can be found here.
As I began this topic saying and now am supported with the above evidence, Airbus is already taking the lead in commercial jet manufacturing. In the years to come Airbus will surpass Boeing with the majority of the world's airliner fleet.
Comac is a Chinese government corporation aimed at building large airliners that will relieve the country's dependency on Airbus and Boeing. It is a brand new corporation founded in May of 2008. Its launch aircraft is the ARJ21, a short-range regional jet. The ARJ21 has been test flying already for a few years, and is planned to enter into service this year. The ARJ21 is essentially a small MD-90. Its design was derived from McDonnell Douglas' MD-90. Comac is also developing the C919, a narrow body mid range airliner most comparable to the 737 MAX and A320neo. The C919 is scheduled to make its first flight in 2014 and to enter into service in 2016.
If Comac ever does become a direct competitor with Boeing and Airbus, I don't believe it will be any time soon. Comac is still in its infant stages and has a lot to prove. In the short term, Comac's goal is to relieve China's dependency on foreign built aircraft. I think it will take many years for Comac to prove themselves safe within their own country in order for its aircraft to start selling in the global market. With their first aircraft, the ARJ21, Comac is not even competing with Airbus or Boeing, rather the ARJ21 will be taking sales away from Bombardier and Embraer within China. Thus far, only Chinese airlines have ordered any Comac aircraft. There is a lot to prove safety wise and reliability wise to the world's air carriers. Comac is also not coming out with any innovative new products. The ARJ21 is essentially using a shortened design of the MD-80 and 90 series airliners over 20 years later. The C919 is designed to be only as good as the A320neo and 737 MAX at best. Until they develop new innovative aircraft and prove the reliability of their already existing products, Comac will not be a competitor of either of the two giants. I do no believe that Comac is even on Airbus' or Boeing's horizon yet.
The Airbus A380 is the largest passenger airliner in the world. Entering into service in October of 2007 with Singapore Airlines, the A380 is a long-range, wide body, complete double deck airliner that can carry between 525 and 853 passengers. Airbus was aiming to break Boeing's monopoly on the Ultra High Capacity market with the A380.
The Boeing 747-8 is an Ultra High Capacity revamped version of the 747-400. The first delivery of the 747-8F Freighter was made in October of 2011. The 747-8 features a fuselage stretch of 18 feet over the 747-400 to increase its passenger capacity and help it compete with the A380. It is now the longest passenger airliner in the world. The 747-8 features a redesigned wing, new flight control systems and flight deck technology, and new 787 engines to make it more efficient.
The A350 is a wide body long-range airliner currently in its design phase with Airbus. The A350 project was started in reaction to the 787. The two are very similar aircraft. The A350 also will be built out of a majority of composite materials, and offers up to an 8% increase in fuel efficiency over the 787. The A350 is slightly larger than the 787, offering 270-440 seats as opposed to 210-330 with the 787. It is scheduled for entry into service sometime in 2014.
Based on the current status of Boeing and Airbus and the current amount of orders for each, I am sad to say that I see Airbus taking the lead in the commercial jet industry. The first reason that I see Airbus taking the lead is due to the current status of the maunufacturers' real money makers- narrow body, single aisle, short to medium range airliners. Airbus is currently designing the A320neo. Virtually the only change from the traditional A320s is new upgraded engines. The new engines will offer a 15% increase in fuel efficiency over the current A320s. Since the A320 is in direct competition with the 737, it has already gained a huge lead in orders over the 737-900 and MAX series. Some loyal Boeing customers have placed orders for the A320neo. The A320neo family has become the fastest selling, most popular airliner in commercial aircraft history with nearly 1,200 orders since being introduced. After hesitating for some time on whether redesigning the 737 would be cost effective relative to a marginal increases in fuel efficiency over the current 737s, Boeing announced the 737 MAX in August 2011. The 737 MAX will directly compete with the A320neo. The 737 MAX is advertised to be 6% more fuel efficient than the A320neo. Boeing has already received 250 orders for the aircraft, but is far behind Airbus who already has 1,200 orders for the new A320. In the narrow body, revenue generating arena: advantage Airbus.
I would consider Boeing's 787 and Airbus' A350 to be evenly matched in their competition. While the 787 has about a 5 year head start on the A350, orders for the A350 are currently at about the same number that the 787 had at this point in its design. With the A350 being up to 100 seats larger than the rival 787, it could potentially compete with Boeing's 777 line as well. Other than the size difference though, the A350 and 787 are pretty much the same airplane, and the 787 is considerable cheaper (~$200 million vs. ~$260 million). I don't see the A350 taking a lead over the 787 unless you truly are getting THAT much more for your money. In the new long-range, composite wide body niche: slight advantage to Boeing.
In the jumbo-jet competition between the new 747-8 and the A380-800, I expect the A380-800 to outsell the 747-8I (passenger version) easily. The 747-8I has only 36 orders thus far as opposed to 253 for the A380-800. Even though Airbus has a head start over Boeing on this project, Airbus has a runaway lead with the A380. Boeing is advertising a 6% cost savings per seat-mile over the A380, but it appears the airlines would still rather have the extra passenger seating of the A380. Where Boeing is winning in this match-up is with the 747-8F, the freighter version. With the 747 being a long respected cargo workhorse and production of the A380-800F being delayed indefinitely, Boeing as a runaway lead with 70 orders, as opposed to 0 for the A380-800F. Airbus still wins the jumbo jet category, however. A more in depth analysis can be found here.
As I began this topic saying and now am supported with the above evidence, Airbus is already taking the lead in commercial jet manufacturing. In the years to come Airbus will surpass Boeing with the majority of the world's airliner fleet.
Comac is a Chinese government corporation aimed at building large airliners that will relieve the country's dependency on Airbus and Boeing. It is a brand new corporation founded in May of 2008. Its launch aircraft is the ARJ21, a short-range regional jet. The ARJ21 has been test flying already for a few years, and is planned to enter into service this year. The ARJ21 is essentially a small MD-90. Its design was derived from McDonnell Douglas' MD-90. Comac is also developing the C919, a narrow body mid range airliner most comparable to the 737 MAX and A320neo. The C919 is scheduled to make its first flight in 2014 and to enter into service in 2016.
If Comac ever does become a direct competitor with Boeing and Airbus, I don't believe it will be any time soon. Comac is still in its infant stages and has a lot to prove. In the short term, Comac's goal is to relieve China's dependency on foreign built aircraft. I think it will take many years for Comac to prove themselves safe within their own country in order for its aircraft to start selling in the global market. With their first aircraft, the ARJ21, Comac is not even competing with Airbus or Boeing, rather the ARJ21 will be taking sales away from Bombardier and Embraer within China. Thus far, only Chinese airlines have ordered any Comac aircraft. There is a lot to prove safety wise and reliability wise to the world's air carriers. Comac is also not coming out with any innovative new products. The ARJ21 is essentially using a shortened design of the MD-80 and 90 series airliners over 20 years later. The C919 is designed to be only as good as the A320neo and 737 MAX at best. Until they develop new innovative aircraft and prove the reliability of their already existing products, Comac will not be a competitor of either of the two giants. I do no believe that Comac is even on Airbus' or Boeing's horizon yet.
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