Sky Talk

US Airways prices $820 million debt offering to finance purchase of 18 Airbus planes

US Airways announced on Wednesday it has priced an $820 million debt offering that will be used to purchase 18 Airbus planes.

The planes are scheduled for delivery starting on September 2013. The Tempe-based carrier said the financing is comprised of $620 million of Class A enhanced equipment trust certificates with a final distribution date of November 15, 2025 and about $200 million of Class B certificates with a final distribution date of November 15, 2021.

Goldman Sachs handled the debt offering for US Airways with certificates expected to be issued on April 24.

-Andrea Ahles

American unveils interiors for new Airbus narrowbody fleet

Building on its announcement earlier this year that American Airlines was going to be upgrading its older wide-body fleet with lie-flat business class seat and all-aisle access first class seats, the carrier unveiled the interiors of the new narrow-body aircraft it will be receiving next year from Airbus.

The Airbus A321 will be used on its transcontinental flights and will offer three classes of service. The interiors will have a modern look with in-seat entertainment at every seat and will have Wi-Fi service. First class will have 10 lie-flat seats in a 1-1 configuration while business class will have 20 lie-flat seats in a 2-2 configuration.

The aircraft will replace its existing Boeing 767-200 fleet that currently fly between New York's JFK airport and Los Angeles and San Francisco. The first Airbus A321 will be delivered in November 2013.

“By using the A321 aircraft with three classes of service and outfitted with fully lie-flat premium class seats, all-aisle access in First Class, and state-of-the-art amenities, we will be able to continue providing an industry-leading premium experience on transcontinental routes, while significantly reducing costs through improved fuel efficiency,” chief commercial officer Virasb Vahidi said.

-Andrea Ahles

Flight testing the 787 Dreamliner from the passenger compartment

Seattle Times reporter Dominic Gates flew from Washington to Dallas-Fort Worth aboard the Boeing 787 Dreamliner on Friday and filed a story and narrated video from the flight.

Here's the story and Gates review of his first flight aboard the 787:

 http://seattletimes.nwsource.com/html/businesstechnology/2018192887_787flight12.html

And here's the video:

http://seattletimes.nwsource.com/flatpages/video/mediacenterbc3.html?bctid=1634743784001

- Bob Cox

DFW airport unveils A380 mock-up for fire training center

It's big. It's tall. It's burnt orange.

On Thursday,the airport unveiled its new double-decker Airbus A380 model where airport fire fighters can train on handling fires on the world's largest passenger aircraft.

“We are committed to maintaining the best training firefighters and facilities in the world, and this A380 mockup is a key piece of the infrastructure that we need,” said airport chief executive Jeff Fegan. “Our aircraft rescue and firefighting teams are known globally for their excellent training and preparedness, and we expect to share our research and best practices with airports worldwide.”

The DFW Fire Training Research Center is currently in the middle of a $29.2 million renovation program that will be completed at the end of 2012.

Photo by Star-Telegram photographer Khampha Bouaphanh.

-Andrea Ahles

France, Italy subsidize new helicopter development

When it comes to developing new helicopters, the European competitors of Bell Helicopter have one advantage the Fort Worth company doesn't.

That would be direct financial assistance from the government treasuries.

Aviation International News reports that the European Commission has approved government loans, at very generous, even lenient terms, to Eurocopter and AgustaWestland for the development of helicopter models.

The funding doesn't rise to the level of the massive European government loans made to commercial jet builder Airbus, but it's fair to say taxpayers in France and Italy will be substantially subsidizing the helicopter makers.

France will provide Eurocopter with €143 million ($186 million) as "a repayable advance" to aid in development of a new medium helicopter design known as the X4. Eurocopter will be required repay the loan in full when an unspecified but “pre-defined sales target” is reached. Each additional delivery beyond the target result in the payment of royalties to the French government.

AgustaWestland will receive a €272 million ($354 million) zero-interest loan, which will be spread over 19 years, for development work on the AW169 helicopter. The zero interest equates to €94 million ($122 million) in state aid, the EC calculated.

The European Union’s governing body decided that these measures are compatible with EU rules on state aid, as the planned public funding is “justified and proportionate.” Moreover, the EC deems it unlikely to limit competitors’ willingness to invest. The sector is characterized by “significant scope for technological innovation and high growth prospects.” Therefore, the aid is “unlikely to distort competition,” the EC said. 

American helicopter manufacturers -- Bell and Sikorsky -- get some development aid, but largely for military contract work. Pay for performance, you might say, but generally do not receive direct aid for developing commercial aircraft; technological developments gained from miltiary work could and almost certainly do get transferred to commercial aircraft. Profits earned on the sale of military aircraft are used to fund commercial aircraft development.

The U.S. government did, however, directly subsidize development of the BA609 civil tilt-rotor aircraft (now the AW609) through the backdoor. Bell charged 50 percent of its R&D expenses on the program to defense contract work as "independent research and development" costs. The Italian government, presumably, will now be picking up a large part of AgustaWestland's tab to continue work on the 609 program that it took over from Bell.

Bell has launched a new commercial helicopter development program the 525 Relentless that the company will fund with profits from its other comemrcial and miltiary aircraft sales.

- Bob Cox

 

 

 

 

The latest in VIP travel accommodations

Bound for the government of Qatar, sources tell us, Boeing released this photo today of a brand spanking new 747-8I -- the latest versoion of the venerable and original jumbo jet -- outfitted in VIP necessities. 

- Bob Cox

Seattle company that invented winglets fights court battle with super jumbo Airbus

Interesting story from the Seattle Times on a legal dispute between European aircraft manufacturing super heavyweight Airbus Industries and a Seattle aviation shop that apparently invented the winglets used on modern jets to boost fuel economy.

Aviation Partners filed a patent in 1994 on winglets, which it proceeded to convince the likes of Gulfstream, Hawker and Boeing would make their planes more economical to fly. Seems the upswept wingtips cut down on drag. Boeing now uses winglets on its newer 737 models.

It turns out that after years of investigating the concept with Aviation Partners, the Times reports, Airbus went with its own design "sharklets" and got an European patent. then it filed suit in Austin, of all places, seeking to invalidate Aviation Partners patent. Aviation Partners has now responded, asking the court to dismiss the case or at least move it back to Seattle.

- Bob Cox

 

Court deadline for AMR looms on its fleet decisions

AMR Corp. was supposed to have figured out by today which airplanes it wants to keep.

Since filing for Chapter 11 bankruptcy Nov. 29, the Fort Worth-based company, which operates American Airlines and American Eagle, has decided on about one-fifth of its 1,000-plus aircraft fleet.

Newer Boeing 737-800, Boeing 777-200 and Bombardier CRJ-700 planes are keepers, while older MD-80s, Boeing 757-200s and Fokker 100s parked in New Mexico are not.

As the 60-day court deadline for Section 1110 notices on aircraft approaches, American will be in U.S. Bankruptcy Court today asking to get out of leases on 18 aircraft. American has filed for extensions on more than 400 aircraft, including all 216 ERJ-145s it operates in its Eagle fleet, that will be presented to the court for signing in the next week, and it's likely to file more.

If American does not tell the court that it wants to keep an aircraft, renegotiate its lease or abandon the lease within 60 days of bankruptcy, lenders can repossess the aircraft, Deutsche Bank analyst Michael Linenberg wrote in an investor note last week.

"While the repossession of in-service is not the preference of most financiers, it is generally even less desired by an airline given the risk of operational disruptions that the loss of more than a small number of aircraft can create," he said.

Although some industry experts have said American will be much smaller when it emerges from bankruptcy, its fleet probably won't look much different than now.

"But American will be paying less for what they're flying right now," said Mike Boyd, an airline consultant at Boyd Group International.

As of Sept. 30, American had 616 aircraft and 52 that it leased or owned but did not operate. American Eagle had 299 aircraft and 44 leased or owned but not operating.

To read the rest of the article that appeared in Friday's Star-Telegram, click here.

-Andrea Ahles

More cracks found in A380 wings

Airbus now says it has found cracks in wing components of at least two more of its A380 jumbo jets, according to both Reuters and the Wall Street Journal (subscription). From Reuters:

The announcement comes two weeks after tiny cracks were first reported in the wings of the 525-seat, double-decker aircraft, which entered service just over four years ago.

"Airbus confirms that some additional cracks have been found on a limited number of non-critical brackets ... inside the wings of some A380s," the planemaker said in a statement.

"Airbus emphasizes that these cracks do not affect the safe operation of the aircraft."

The European Aviation Safety Authority (EASA) confirmed it would issue a bulletin Friday mandating precautionary checks.

The latest cracking problem was discovered in two aircraft during a routine two-year inspection, an Airbus spokeswoman said. She declined to name the operators of the aircraft.

EADS subsidiary Airbus has so far delivered 68 superjumbos, starting with Singapore Airlines (SIAL.SI) which took the first aircraft in December 2007, followed by Dubai's Emirates and Qantas Airways (QAN.AX) of Australia.

- Bob Cox

 

Management changes at Recaro Seating's parent

There's a management change in the works at the top of Recaro Aircraft Seating, the German company that operates an airliner seat assembly plant at Fort Worth's Alliance Airport.

Axel Kahsnitz, CEO of the company since October 2007, is resigning effective April 1.He will be replaced by Mark Hiller, who has been chief operating officer since 2007 and a member of Recaro Group management since 2003.

Under Kahsnitz, Recaro underwent a significant restructuring and saw worldwide sales increase by more than 25 percent since 2008 and reported improved earnings.

The company is a major provider of seats to airlines for installation in new and refurbished airliners and employs about 300 in its Fort Worth facility. American Airlines, Delta and United have all been among its customers.

Kahsnitz is leaving Recaro for "a new professional challenge," the company said in a release issued Wednesday. 

Martin Putsch, Recaro Group principal shareholder, said: "The fact that Recaro Aircraft Seating is on the road to success is largely due to the skills and leadership qualities  of the management team headed by Axel Kahsnitz. He is handing over the reins to a well-organized company."

- Bob Cox