Category Archives: Airplanes and Airports

Flashback Friday: Airbus A380 Planespotting

By Luis Linares / Published January 23, 2014 / Photos by author

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Lufthansa Airbus A380 at Frankfurt International Airport

Our week-long commemoration of the 10th anniversary of the rollout of the Airbus A380 included the airplane’s history, statistics, and a unique passenger experience aboard the first A380 commercial flight.  As the number of A380 aircraft in service increases, so do the sightings.

I split my time between Miami and Washington, D.C., during a typical week.  I’m very new to the A380 world since I have never flown it and seldom see it.  However, over the last year I spotted the A380 at Miami International Airport (MIA) and Washington-Dulles International Airport (IAD) during my travels.  I also had the privilege of covering the inaugural A380 service to MIA.  On this Flashback Friday, I share some pictures and the stories behind them.

The first time I saw an A380 was at night as my Europe-bound aircraft took off from New York’s JFK International Airport in 2008.  It was an Emirates example, and to this day, the airline still flies it there from Dubai.  Fast forward to June 2014, when, after landing at Frankfurt International Airport, I saw a couple of Lufthansa A380s from my window seat and I had my camera ready.  Fortunately, 2014 gave me other opportunities to see more of the A380.

My current residence in Northern Virginia is located near the downwind flight path for many flights when they have to land to the north on either runway 1R or 1L at IAD.  It is very common for traffic coming from Europe to follow this arrival procedure when winds are out of the north.  I like to have my camera handy, especially on clear days, and this usually makes for some great spotting opportunities.

One clear evening, I was lucky enough to capture the daily Air France A380 flight as it turned from downwind to base before landing on runway 1R.  As a nice bonus, I caught it as the landing gear dropped.  One of the characteristics of the A380 that will immediately capture the attention of spotters and passengers alike is the very quiet engines.

AFR A380 IAD 1 - LFL AFR A380 IAD 2 - LFL AFR A380 IAD 3 - LFL AFR A380 IAD 4 - LFL   Air France Airbus A380 lowering landing gear as it turns from downwind to base before touching-down on runway 1R at Washington-Dulles International Airport.

Another A380 frequency to IAD is that of British Airways from London’s Heathrow International Airport.  I have been able to photograph this flight landing on runways 19L from IAD’s long-term parking lot on the northeast side of the airfield.  This is a good location in general for spotting landings when the winds are out of the south.

EXTRA: British Airways Launches A380 Service at Washington Dulles

BAW A380 IAD 1 - LFL British Airways Airbus A380 on final to runway 19L at Washington-Dulles International Airport

An even better treat at IAD is not just visiting the fantastic Smithsonian National Air and Space Museum annex, also known as the Steven F. Udvar-Hazy Center, but also going up to its observation deck, especially when flights are landing to the north.  On one of those very cold, but beautiful winter days, I shot the British Airways A380 during its final approach and touchdown on runway 1R.  The museum’s observation deck is on the southeast corner of IAD and offers a clear view of the entire airfield.  In addition, a live feed of ATC can be heard over the loudspeaker.

BAW A380 IAD 3 - LFL BAW A380 IAD 4 - LFL BAW A380 IAD 5 - LFL BAW A380 IAD 6 - LFLBritish Airways Airbus A380 seen from Steven F. Udvar-Hazy Center (Smithsonian National Air and Space Museum Annex) as it lands on runway 1R at Washington-Dulles International Airport.

Another unique experience at IAD is a ride on the vintage “moving lounges” that connect the main terminal to the two mid-field terminals.  Despite the opening of an underground train, these lounges still operate.  I had a couple of hours to spare on a recent trip from IAD to MIA, so I hopped on one of the lounges to photograph the British Airways A380 as it prepared for its return to Heathrow.  The two jet bridges to the lower deck and the one to the upper deck were clearly visible, as well as the service trucks designed to serve either of the decks.

BAW A380 IAD 2 - LFL        British Airways Airbus A380 parked at Washington-Dulles International Airport

I usually spend most of my work week in Miami and seldom miss a chance to do some planespotting at MIA.  The prime location has to be where NW 72nd Avenue dead-ends next to the holding point of runway 9.  Air France and Lufthansa currently provide A380 service to MIA and both use gate J17.  The Lufthansa flight typically departs about 90 minutes before the Air France flight arrives.  However, one evening the Lufthansa flight had a delay of over an hour, which I suppose was great for us AvGeeks, but an inconvenience for the passengers.  As a result of the delay, I enjoyed getting to photograph the Air France A380 as it landed, while the Lufthansa A380 was approaching the holding point of runway 9.

BAW A380 IAD 2 - LFL        Air France and Lufthansa Airbus A380s at Miami International Airport

The A380 will progressively become more and more of a common sight at some of the major U.S. international airports, as well as others around the world.  As part of this future increase in A380 sightings, the next A380 that will come to MIA will be operated by British Airways later this year.

Gate D10 in the North Terminal will be modified with the jet bridges necessary for the lower and upper decks.  As far as the A380 program itself, what remains to be seen is whether or not Airbus will upgrade the A380 with a new engine option (neo) and a stretch that will be known as the A380-900.  Based on comments from Airbus and interest from Emirates, the largest A380 operator, this will more than likely be the case.  The sole variant right now is the A380-800, since the freighter version never came to fruition after UPS cancelled its order.  In the meantime, we wish the A380 a very happy 10th birthday!

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Contact the author at luis.linares@airwaysnews.com

Contact the editor at benet.wilson@airwaysnews.com

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Rewind: Dallas/Fort Worth International Airport Celebrates 40 Years

By Jeremy Dwyer-Lindgren

This article was originally published on January 13, 2014

Forty years ago, Dallas Ft. Worth International Airport received the first commercial air flight, starting off a long history for one of the world’s larger airports. The airport maintains a laundry list of superlatives, maintaining one of the largest people mover systems in the world, four workings runways at 13,000 feet, and its own postal code.

The airport celebrated this morning as DFW and American Airlines celebrated the arrival of flight 1461 from Little Rock, Arkansas. Yellow Texas roses were presented to each passenger as they deplaned, along with a slice of cake, mirroring the very first to arrive at the airfield in 1974. As the airport celebrates its birthday, we take a quick look back at the history of this remarkable airport.

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Photos courtesy of American Airlines

The idea for DFW first came to be in September, 1964. At the time the cities of Dallas and Ft. Worth both had their own separate airports: Love Field for Dallas, and Greater Southwest International Airport for Ft. Worth. The two cities maintained a rivalry between their two fields for years as both fought for passengers. As Dallas grew to overshadow its neighbor, so too did Love Field. By 1965 the airport hosted 49% of Texas air traffic, while Ft. Worth had declined to under one percent.

EXTRA: Dallas / Ft. Worth International Airport Photos

Seeing the writing on the wall a few years earlier, the FAA (named CAA at the time), in 1964, refused to continue financially support both fields going forward. It also ruled that both would be insufficient to meet future demand, and thus ordered the two cities to set aside their differences and create a joint airport.

The original plan for DFW. Quite ambitious. Photo courtesy Noah Jeppson Creative Commons / Flickr

The original plan for DFW. Quite ambitious.
Photo courtesy Noah Jeppson Creative Commons / Flickr

A site was chosen between the three towns of Euless, Irving, and Grapevine Texas, and ground was broken on the airport on December 11, 1968. The construction, which lasted five years, produced a truly monumental feat. The original four terminals enclosed nearly one million square feet of floor space, and each could handle up to eighteen 747s, the largest plane at the time. It is said that enough concrete was used to build the runways, taxiways, and aprons to build a four lane highway between Dallas and Oklahoma City (205.7 miles).

The completed airport was unveiled to the public in a lavish ceremony on September 20, 1973. More than 200,000 turned out for the dedication. But the big draw was the first visit of Concorde to the US. The  British Airways jet made a DFW its pit stop while en route from Caracas to Paris. It was accompanied on the apron by Braniff’s famous and first Boeing 747 “Big Orange”.

The field officially opened several months later on January 13, 1974, as American Airlines flight 315 from Little Rock touched down on the fresh runway. At the time Dallas-Ft. Worth Regional airport had only four terminals (it now has five, though was built to accommodate up to thirteen). Every airline that had been serving the bustling Love Field moved over practically immediately to DFW, except for budget carrier Southwest which chose to stay behind.

DFW-First-Arrival-image003 DFW_AA87-275-4-35_SF1
AA pilots talk to the press following the first flight (L).  The inside of the C terminal, not long after opening, in 1974. Photos courtesy C.R. Smith Museum – Ft. Worth, TX.

As Southwest grew, however, the city of Ft. Worth resented the carrier, the airport, and the cities continued success. Ft. Worth’s congressional representative, Jim Wright, wound up creating the now infamous Wright Amendment, which severely limited Southwest’s operating capabilities from the airport. The law has provided DFW significant protection from competition since it went into effect in 1980. After decades of protest from Southwest, the arcane law is set to expire in the fall of 2014.

One of American Airlines DFW Hub Terminals seen in the late 1980s.

One of American Airlines DFW Hub Terminals seen in the late 1980s.

Meanwhile, DFW continued to hum along.  Braniff, which had hubbed at Dallas Love prior to the move, was DFW’s first airline to hub in the city. It began the airport’s first European route in March of 1978, operating to London Gatwick, and added service to Asia in 1979. Braniff also brought DFW regular Concorde service in the late 1970s and very early 1980s, giving Dallas/Ft. Worth a distinction only a handful of US airports can claim. The carrier borrowed the iconic airplane from both Air France and British Airways, touting one-stop Concorde service Dallas to London and Paris.
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American followed suit in the same year, choosing Ft. Worth as its corporate headquarters in 1978. It doubled down a few years later, making DFW an official hub in 1981, and adding international flights to London in 1982. It went on to add service to Tokyo in 1987.

Bad day for Braniff. Photo from Airchive Archives.

Bad day for Braniff. Photo from Airchive Archives.

The airport’s first big shake up took place on May 12th, 1982 when Braniff abruptly ended service and filed for bankruptcy. At the time Braniff was by far the airport’s largest carrier. The scene created a chaotic nightmare in the hub, as passengers already on airplanes were forced to leave the aircraft. Passengers were simply told that Braniff no longer existed.

The airport eventually went on to assume its present name, Dallas Fort Worth International Airport, in 1985. The same year also saw the first major disaster, Delta 191. The flight, operated by a Lockheed L-1011 Tristar, crashed while trying to land in a thunderstorm.  Twenty-seven of the 152 on board survived. Three years later a Delta 727 crashed on takeoff in 1988, killing 14 of the 108 on board.

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DFW today. Photo by Chris Sloan / Airchive

DFW attempted to expand in 1989, wishing to add two additional runways and terminals. The surrounding cities, all of which share land with the massive neighbor, all objected and sued to stop the growth. The case meandered its way to the very top of the justice system, the Supreme Court. The court ultimately sided with the airport, paving the way for the airports seventh runway being complete in 1996. Existing primary runways were also all extended the first batch in 1996, the latter batch by 2005.

Like all airports, DFW struggled after 9/11. Delta dehubbed the airport in 2005, leaving American as the uncontested ruler of DFW. It wound up recovering nicely.

The International Terminal D and the present Skylink train system were both completed in 2005, providing a fresh and modern alternative to the now aging A, B, C, and E terminals. American, which had gone bankrupt in 2011, also began the process of renovating sections of terminal, starting with A in 2012. The renovations are expected to continue for several years, especially following the successful merger of American with US Airways.

Recently the airport has seen a heavy and long overdue rash of international expansion in the past year. American announced new routes to Hong Kong and Shanghai in October 2013, the airport’s first service to China. Qatar plans service to Doha, and Etihad to Abu Dhabi. Rumors have also been flying that the airport will start construction of Terminal F some time this decade. If so, DFW will come one step closer to those thirteen terminals originally envisioned.

Today, AA and DFW will mark the occasion by giving each arriving passenger from a Little Rock flight a commemorative yellow rose like they did 40 years ago when the airport first opened. We hope to have photos of the event.

PHOTOS: Historical ads, sales brochures, and timetables for American Airlines and Braniff International.

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Contact the editor at benet.wilson@airwaysnews.com

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Delta Unveils Latest Expansion to JFK Airport Terminal 4

By Seth Miller / Published January 13, 2015

The ribbon-cutting ceremony at the Terminal 4 expansion. Image Courtesy of Seth Miller / AirwaysNews

The ribbon-cutting ceremony at the Terminal 4 expansion. Image Courtesy of Seth Miller / AirwaysNews

Delta Air Lines unveiled the latest expansion to its hub operations at New York’s JFK airport this morning, adding 75,000 square feet of additional terminal space and 11 new gates dedicated to regional jet operations. The expanded space sits at the far end of Terminal 4 at JFK and augments the expansion for mainline operations,  inaugurated in late 2013.

EXTRA: A Fond Farewell and Happy Hello at JFK: The WorldPort Terminal 3 Closes and Delta’s Expanded Terminal 4 Opens

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The new gate space replaces the regional jet facility Delta was operating in Terminal 2 and provides significant improvements for passengers on these flights. All planes will now be served by jet bridges rather than requiring walking outside, for example, an experience which can be particularly challenging with the range of weather New York has.

A Delta Connection regional jet parked at a JFK T4 gate. Image Courtesy of Seth Miller / AirwaysNews

A Delta Connection regional jet parked at a JFK T4 gate. Image Courtesy of Seth Miller / AirwaysNews

Extra: Additional WorldPort history and preview of Terminal 4 in Soho

Gail Grimmett, Delta’s senior vice president for New York, noted that 65 percent of Delta Connection passengers are connecting through JFK to another flight. Moving these flights into the T4 concourse will make those connections far easier for thousands of passengers each day.

EXTRA: Delta Wows With Their New JFK Terminal 4 and SkyClub

A Delta jet parked at JFK T4. Image Courtesy of Seth Miller

A Delta jet parked at JFK T4. Image Courtesy of Seth Miller

The new space is the latest in a series of investments Delta has made in building out a hub in New York City. The carrier has a significant presence at both JFK and LaGuardia airports and has made a number of improvements in its operations. And the company is not done yet.

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An escalator down to Deltas’s expansion of Terminal 4. Image Courtesy of Seth Miller

Grimmett noted that a further $65 million investment is slated for LaGuardia this year, while more moving walkways and other improvements are coming to JFK. “You’re going to see changes product-wise on the airplanes as well as further investment in the terminals.”

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Contact the editor at benet.wilson@airwaysnews.com

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BrewTown: Inside Milwaukee General Mitchell Airport

By Benjamin Bearup / Published January 12, 2015

Milwaukee’s General Mitchell International Airport is often an afterthought to the American flying public. For years, the airport took a back seat to the much-larger airports in Chicago, about 90 miles down the road. To help get the truth about this airport, Southwest Airlines and Mitchell Airport flew AirwaysNews to Milwaukee to take a behind-the-scenes tour of the facility’s operations.

General Billy Mitchell. Image Courtesy of Benjamin Bearup

General Billy Mitchell. Image Courtesy of Benjamin Bearup

History

Hamilton Airport, as it was called then, began handling passenger traffic in July 1927, when the first terminal, named the Hirschbuehl Farmhouse, opened. Within days, Northwest Airlines began regularly scheduled service to Chicago and Minneapolis. In July 1940, the airport welcomed a new multi-story terminal building to help meet Milwaukee’s demand for air travel.

In 1941, Hamilton Airport was renamed General Mitchell Field, after the famed Brigadier General and Milwaukee resident William “Billy” Mitchell. After World War II and into the early 1950’s, Milwaukee saw a boom in air travel. This growth not only meant more passengers, but also “growth in the number of flight operations, including the large propeller-driven StratoCruisers and Constellations.” July 1955 brought the opening of a new $3.2 million terminal that featured three concourses and 23 additional gates.

General Mitchell Airport Terminal. Image Courtesy of Benjamin Bearup

General Mitchell Airport Terminal. Image Courtesy of Benjamin Bearup

The 1940s and 1950s brought the addition of the military to Mitchell Airport. In the late 1940s, Mitchell Airport began to be used as a prisoner-of-war camp. In 1947, the 128th wing of the Wisconsin National Guard made Mitchell Airport its home. Today the wing is an Air Refueling Wing and operates on the east ramp of the airport. From the 1950s to 2008, 440th Airlift Wing of the Air Force Reserve was stationed at Mitchell Airport.

With a new age of aviation upon them and an increasingly larger flying public, Mitchell Airport renovated and greatly expanded the terminal, to the tune of $44 million dollars in the late 1970s. The renovations welcomed many new shops and expanded ticketing and baggage claim areas. October 1989 brought the opening of a new cargo operations center and maintenance center. In 1990, Concourse D expanded by 16 gates to help modernize the facility. In 2007, Mitchell Airport added eight gates to Concourse C.

Mitchell Airport Tour

Upon entering General Mitchell Airport, the first stop we made was the Mitchell Gallery of Flight. This small flight museum offers viewers a peek at the history of Mitchell Airport and highlights many great accomplishments in aviation history. Without spoiling the visit too much, one can see the history of Billy Mitchell, the role of Midwest Airlines and AirTran at the airport, and view an outstanding collection of World War II aircraft models. The Mitchell Gallery of Flight is located pre-security in the main terminal.

EXTRA: Mitchell Gallery of Flight Museum Images

Mitchell Gallery of Flight. Image Courtesy of Benjamin Bearup

Mitchell Gallery of Flight. Image Courtesy of Benjamin Bearup

Displays at Mitchell Museum. Image Courtesy of Benjamin Bearup

Displays at Mitchell Museum. Image Courtesy of Benjamin Bearup

From the Gallery of Flight, we drove to the snow management hangar. With an average snowfall of around 47 inches annually, Mitchell Airport needs a large fleet of snow removal vehicles to keep runways clear and flights on time.

A fleet of 12 snow combos quickly and efficiently clean up a runway in under 30 minutes. The crews work in two shifts of 12 men, with six snow combos on each side. Each group of snow combos is accompanied by what is called a snow thrower. This mega machine is capable of rotating at around 2,400 rpm and can throw thousands of pounds of snow over 300 feet. This machine pushes snow away from the runways and off of the runway lights. A chemical truck often also joined the combos out on the runway to remove ice from the surface.

A staff of 65 men and additional seasonal employees work to keep aircraft clean and safe during the treacherous winter months. To finish off the mega machines are two massive snow melters. Each snow melter is capable of melting tens of thousands of pounds of snow an hour. These machines are used to reduce snow piles along the airfield.

Snow combos at Mitchell Airport. Image Courtesy of Benjamin Bearup

Snow combos at Mitchell Airport. Image Courtesy of Benjamin Bearup

The snow management fleet utilizes a massive former C-130 hangar at the former home of the 440th Airlift Wing. The hanger fits the needs of the snow management fleet perfectly with the long snow combos nicely sliding in.

After the snow management hangar, we toured the Emergency Operations Center. This room serves as a nerve center in the event of a crisis. One large table seats eight airport officials, each designated to a department. Seats at this table include airport operations, emergency responders such as police and fire, public relations, and others. Hundreds of cameras are connected in a network and can be broadcasted real time in the Emergency Operations Center. Maps and airport diagrams are displayed on the walls for emergency management while each department is designated a personal monitor and telephone.

Emergency Operations Center at Mitchell Airport. Image Courtesy of Benjamin Bearup

Emergency Operations Center at Mitchell Airport. Image Courtesy of Benjamin Bearup

Next door to the Emergency Operations Center is the Airport Operations Center. The Airport Operations Center is a highly complex room that controls much of the airport. A team operates the room 24/7 and 365 days a year to make sure the airport is running smoothly. From aircraft emergencies to a leaking faucet, the room controls everything.

Inside the Airport Operations Center are several small stations reserved for unique roles such as fire protection, monitoring every door in the airport and runway light conditions. During our brief visit to the center, five automated alarms rang from the central computer, alerting the workers of an abnormality. Luckily the instances were just false alarms such as an jammed or unclosed door. The workers said that hundreds of automated alarms go off daily with the overwhelming majority of them being false alarms. Either way all alarms are treated equally with a quick and professional response.

Airport Ops Center main station. Image Courtesy of Benjamin Bearup

Airport Ops Center main station. Image Courtesy of Benjamin Bearup

On another computer screen a large airport map can be seen. This interactive map shows areas of needed maintenance and other abnormalities along the airfield. During our visit, a small private aircraft blew a tire during taxi and needed assistance. On the screen a large red circle appeared showing the position of the aircraft on the taxiway. Within a minute, the team alerted airport operations ground personnel to assist the disabled aircraft. All passengers onboard the aircraft were safe, but a Green Bay Packers game that night would ultimately be missed.

Disabled aircraft on taxiway at Mitchell Airport. Image Courtesy of Benjamin Bearup

Disabled aircraft on taxiway at Mitchell Airport. Image Courtesy of Benjamin Bearup

A fire control system gave the control center team complete management of the hundreds of fire alarms, smoke detectors, and sprinkler systems within the airport. Any potential fire would be instantly located and proper personnel would be dispatched to the scene.

As in the Emergency Operations Center, the Airport Operations Center had full control of the hundreds of cameras in and around the airport campus. With the touch of a button, the main cargo delivery gate could be monitored while Gate C14 was being watched. The room also had direct access the the air traffic control tower.

After the Airport Operations Center, we watched the baggage screening process. The baggage room featured a state-of-the-art system where computers track where each bag is located at all times. Rapid-moving conveyor belts and trap doors moved to get the bags where they needed to be. In a separate room, the Transportation Security Administration (TSA) physically searched bags. To avoid lifting heavy bags, each bag was lifted from a conveyor belt to the TSA officer by a vacuum suction arm. This straight-out-of-a-sci-fi movie technology greatly reduced TSA liability and work related injuries. Unfortunately, due to federal regulations, we were not allowed to photograph this process.

From there we walked onto the Southwest Airlines ramp at Concourse C, Gate 22. We were getting ready to view an aircraft turnaround from the ramp. As aircraft N7708E, a 737-700, pulled into the gate, we were delighted to see that the aircraft was in the new Southwest Airlines livery. In fact, the aircraft was former AirTran bird N175AT delivered in October 2005 and refurbished for Southwest in October 2014.

Southwest Airlines Boeing 737. Image Courtesy of Benjamin Bearup

Southwest Airlines Boeing 737. Image Courtesy of Benjamin Bearup

The Southwest employees at Milwaukee happily welcomed us onto the ramp. We were given a complete walk-around of the aircraft and saw how the ground crews work. We even got to go underneath the plane and took a picture of the Southwest Heart featured on the bottom of their new livery planes.

Southwest Heart logo. Image Courtesy of Benjamin Bearup

Southwest Heart logo. Image Courtesy of Benjamin Bearup

The turnaround and departure of N7708E marked the end of our tour at Milwaukee’s General Mitchell Airport. I came to the airport and city with no true predictions of what it would be like. After a day full of great adventures touring the airport and the city I left knowing what Milwaukee Airport truly is about. It is a city that often doesn’t get the attention that it deserves and is often seen as the “little brother” of Chicago. In reality Milwaukee is its own unique city that far surpasses its reputation.

EXTRA: Milwaukee General Mitchell Airport Photo Gallery

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Contact the editor at benet.wilson@airwaysnews.com

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US Airlines Won’t Lose Capacity Discipline Because of Oil

by Vinay Bhaskara / Published December 30, 2014

Few changes in macroeconomic conditions have been more impactful for the global airline industry than the precipitous drop in oil prices from June 2014 to the present. From a peak of $115.49 per barrel, the price of global-benchmark Brent Crude oil fell to $57.88 Monday, near a five-year low.

The fall in oil prices will have a mixed impact on the world’s airlines, but will be primarily positive for US airlines, who operate in an economy not dependent on high oil prices and generally have diversified networks not highly reliant on oil industry business travel. Lower oil prices mean lower fuel costs, and as the largest expense for US airlines, the reduction in oil prices more than offsets adverse demand effects in select markets. But despite the prospective boost to US airline earnings, the fall in oil prices has also been accompanied by a small but growing undercurrent of naysayers, who fret that lower oil prices will drive airline management to engage in fare and capacity wars in an attempt to boost market share (see here and here). Most notable of these worriers is Hunter Keay, the airlines analyst at investment firm Wolfe Research.

Respectfully, (as Mr. Keay is one of the best in the business), I fundamentally disagree with his assessment. I do not believe that lower oil prices will cause airlines to sacrifice hard-won capacity discipline and I will go on record stating that I believe that 2015 will be yet another year of record profitability for US airlines (and that lower fuel prices will be a net positive contributor to higher pre-tax earnings). The idea that US airlines would, once again, devolve into a war for market share is founded on a misunderstanding of the new structure of US airlines, and a misdiagnosis of localized conflicts between airlines in certain markets as indicative of a broader trend towards increased competition.

Starting with the present structure of the US airline industry, the first thing to keep in mind is that years of consolidation, increased regulation from the FAA, have fundamentally altered the dynamics in the US airline market. We are unquestionably living with an air travel oligopoly, though I am not unsympathetic to arguments that the present oligoply is a net positive as a reimbursement to the stakeholders (airline employees and shareholders) who effectively subsidized lower-than-cost air travel for the general public for years (employees through wage and benefit cuts, shareholders through investment losses [and eventually Chapter 11 Bankruptcy]).

However, no oligopoly can hold without strategic convergence. And that is where capacity discipline amongst airlines comes into play. The early 2000s were a period of giddy catch-up growth in the US airline industry post 9/11, but after the late 2000s recessions, new airline management pivoted sharply towards capacity discipline. Even today, total system capacity for US airlines, as measured by available seat miles (ASMs) is 3.1% below its 2007 peak, with domestic ASMs down 8.0% and international ASMs up 6.8%. But ASMs alone don’t give a complete picture. Total available seats (both domestic and international) in the US airline industry are still a whopping 7.9% below levels in 2007, even as total enplaned passengers have largely recovered.

This kind of en-masse capacity reduction does not happen without across-the-board discipline at every major US carrier. Sure there was a deep recession, the deepest since the Great Depression, but judging by the pattern of recovery from every other recession, if US airlines were being managed the way they were in the late 80s, 90s, and early 2000s, capacity would already be 10-15% ahead of its 2007 levels, even adjusting for the severity of the recession. This is a different breed of airline management.

Post-2009, airline managers have ridden capacity discipline to boost revenues and profits. In fact, by almost any financial metric, the current crop of airline management is the most successful in the US since deregulation. They have little incentive to act like previous generations of airline management, their compensation is largely tied to ROIC and shareholder returns, and shareholders are not in the mood to reward airlines for growth (revenue/market share), instead preferring profitability.

There have certainly been myriad examples of US airline management squandering positive exogenous shocks (fuel prices, GDP growth in the early 2000s), but what in the behavior of current airline management leads anyone to believe that this group of managers will repeat those mistakes? Remember, this is the same management group that (instead of allowing passengers to reap a modest reduction in fares) responded to the FAA’s inability to collect taxes in mid 2011, by gleefully raising base fares to where total out of pocket costs were exactly the same (earning a windfall of $28.5 million per day). This is the same management group that has closed redundant hub after hub, that has retired 50-seat regional jets at remarkable rates, that has implemented revenue-based frequent flyer programs (which have certainly driven away incremental passenger traffic). Heck, this is the same management group that has shied away from competing directly with Spirit Airlines on fares, allowing Spirit to gain a foothold in many legacy airline hubs. To reiterate, Spirit presented US majors with a clear opportunity to defend market share… And they responded by largely ignoring the ultra-low cost carrier (ULCC). This is a different breed of airline management.

Now the obvious counterpoint is to look at Seattle, the Dallas-Fort Worth Metroplex, and Los Angeles, currently the hottest battlegrounds amongst major US airlines. Starting with Seattle, this is certainly an area of competitive concern, particularly for Alaska who has already begun to see some softness in Seattle margins in the wake of Delta’s domestic expansion. But at the end of the day, Seattle is still Delta adding a bunch of RJ flights to key west coast destinations, with a handful of narrowbodies likely to eventually ply routes to key non-hub business markets in the rest of the country. I’m not going to argue that Delta’s growth in Seattle isn’t going to affect Alaska somewhat, but in Delta’s overall network, it’s a drop in the bucket. Lower oil prices aren’t going to magically make Delta add dozens of new daily flights in the market. If anything, they’ll help the two airlines co-exist, by improving margins for both.

Los Angeles might be more worrying, with both Delta and American adding capacity at a dizzying pace. However, I see United as likely to blink soon (and reduce frequency and capacity in the market). Moreover, any serious expansion (large enough to put a meaningful dent in the overall industry’s fare levels) is impossible given the facility constraints at the airport. Dallas Fort Worth has recently been thrown into a new fit of competitive fare pressures thanks to the expiration of the Wright Amendment and Spirit’s continued growth in the market. Certainly the market dynamics have been altered somewhat, but the potential for further capacity additions and fare wars in the Metroplex is still limited. Southwest is boxed in by facility restrictions at Love Field and while American’s new management has been aggressive competing against Southwest in the past, they are also smart enough to realize that unlike Philadelphia, Southwest are here to stay in the Metroplex. The long run interplay between the two carriers is much more likely to resemble that in Phoenix (another shared hub), where the competition is far more amicable (though American will hold far more market power in the former). As far as Spirit, they will certainly continue to fly the routes that they already do, but I see them as unlikely to add a lot of further capacity. Spirit CEO Ben Baldanza has famously said that the carrier has 750 markets in the domestic US identified and ready to go that meet Spirit’s margin criteria. At the same time, Spirit has specifically called out Dallas Fort Worth as a market where it is experiencing significant fare weakness. Why would Spirit add more capacity in a three-way battle in the Metroplex when there are plenty of viable routes around the country in far less competitive environments?

In addition to Spirit, fellow ULCCs Allegiant and Frontier would hypothetically be good candidates to drive capacity growth and fare wars in the industry given their high levels of proposed growth. However, there are two key issues with this thesis. First, the major airlines by and large don’t seem interested in combatting Spirit and the ULCCs. ULCCs today mostly cater to a previously unserved segment in the market, a segment that the US majors abandoned in the wake of consolidation and the last recession. A fare war requires some sort of competitive response to low fares, and a broad-based competitive response to the ULCCs doesn’t appear imminent. Second, Spirit and Frontier are largely locked in to their present levels of growth, which the industry has already planned for and taken into account for 2015. The way that Spirit and Frontier would drag the overall industry down is by growing much faster than they have previously indicated. But unlike US majors, Spirit and Frontier don’t have slack in their fleet. Their aircraft are (mostly) highly utilized and with a relatively set number of new aircraft deliveries for the year, they cannot wholesale add 10 percentage points to their capacity growth plans, they simply lack the spare and newly arriving capacity to do so.

So let me end with a question to you the readers. Will airlines squander the windfall from oil in 2015 as they chase market share? Or will a new brand of profit-focused managers act in a responsible manner, using lower fuel prices to boost margins and profits even further? I’m betting on the latter, and I’m willing to put my money where my mouth is, as my disclosures below the fold should indicate.

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Disclosure: The Author is Long AAL, LUV, UAL, SAVE, and DAL.

Contact the author at vinay.bhaskara@airwaysnews.com

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Final AirTran 717 Ferry Flights

By Jack Harty / Published December 28, 2014

ATLANTA, GA - When Southwest Airlines announced that it would acquire AirTran Airways, many wondered what Southwest would do with the 717s AirTran had. It seemed unlikely that Southwest would operate two aircraft types because it has been an exclusive 737 operator since birth, with the exception of a few leased 727s from Braniff in the late 1970s. B59iXaRIAAAO8-l

In 2012, Southwest was able to make a deal with Delta Air Lines to lease them through 2024. This deal was perfect for Delta because they would provide a great replacement to the older DC-9-50 aircraft it planned to retire. The first 717 entered service with Delta Air Lines in the Fall of 2013, and it will continue to add more to its fleet through next year.

EXTRA: Delta Inaugurates 717 Flights

In May, Southwest published the final AirTran schedule. On the final day of operations, AirTran would operate approximately 90 flights with only 717s.

Many were surprised to see that several 717s would end the day in outstations including Chicago and Houston, and many hoped there would be a few more flights added to Atlanta on December 29 for one final flight.

Unfortunately, this would not be the case. They are wasting no time in getting them stored temporarily or to locations like Miami to be converted.

Extra: Onboard AirTran’s Final Flights

N717JL, the 717 that flew AirTran's final flight departs Tampa Monday December 29, 2014 bound for Goodyear, AZ and its conversion for lease customer Delta.

N717JL, the 717 that flew AirTran’s final flight departs Tampa Monday December 29, 2014 bound for Goodyear, AZ and its conversion for lease customer Delta.

Aircraft by Aircraft

The flights below are scheduled to operate tomorrow. Some aircraft are headed to Goodyear Airport for storage, until they can be converted into the Delta configuration. The aircraft that are headed to VQQ (Cecil Airport) will begin the process of getting configured.

Aircraft Number Departs at:  Origin  Destination
764 800 ATL  GYR
737 800 ATL  GYR
768 800 ATL  GYR
724 1300 ATL  GYR
705 1300 ATL  GYR
730 700 ATL  VQQ
785 700 ATL  VQQ
704 740 MKE  GYR
711 710 MSY  GYR
710 715 STL  GYR
702 1025 MCI   GYR
709 750 RDU  GYR
739 850 HOU  GYR

Earlier today, aircraft 765 ferried to VQQ. It quietly pushed back from gate C7 to not much fanfare other than a few ground crew workers shaking hands as it pulled away.

Please note that the schedule above is subject to change.

N717JL, the 717 that flew AirTran's final flight departs Tampa Monday December 29, 2014 bound for Goodyear, AZ and its conversion for lease customer Delta.

N717JL, the 717 that flew AirTran’s final flight departs Tampa Monday December 29, 2014 bound for Goodyear, AZ and its conversion for lease customer Delta.

Extra: A History of Air Tran

Extra: Employees say farewell to AirTran

Extra: Onboard the final flights of AirTran

Extra: Vintage AirTran and ValuJet Timetables and Schedules

 

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Contact the author at Jack.Harty@AirwaysNews.com

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Program Analysis: Airbus Likely to Launch A350-1100

by Vinay Bhaskara / Published December 22, 2014

Qatar Airways took delivery of the first Airbus A350-900 yesterday, marking the entry into service (EIS) for Airbus’ first new-build aircraft since the A380 was launched by Singapore Airlines in October 2007.IMG_7504

EXTRA: Qatar Airways Takes Delivery of World’s First Airbus A350 XWB

EXTRA: On-Board Qatar’s A350 XWB Media Flight

Given the momentous occasion, we thought the time ripe to provide a comprehensive analysis of the A350 program.

Project Execution Exceeds That of 787 But Specifications Weakened

Airbus had an advantage over Boeing in executing on the A350 project given that it could incorporate lessons learned from its own struggles with the A380 as well as from Boeing’s problems with the 787 Dreamliner. We spoke with program head Didier Evrard at the Farnborough Airshow this past July, and he noted that Airbus had taken an extremely cautious approach with the A350′s development.

Yes, we have learned a lot from the previous programs, particularly from the A380. We’ve defined a very clear process for improvement, which was about program management, customization, which was about stability of the design, focusing on maturity, meeting maturity gates in a straight manner. And sometimes, we had to take hits at the early stage of the program to protect the back end of the program. And it’s clear that since two years, we have had a very stable plan for development, but this did not come just by chance. It came because we had really adhered to these principles. For instance we had a new block of design tools, [and] we had invested massively in these design tools that we shared with our worldwide suppliers. We developed new customization policies and we have built our [development] principles on a very rich platform, which reduces a number of issues that we have to deal with. And this platform is able to accommodate a large variety of layouts for our customers without changing its foundations. So this enables us today to be rather confident at the start of the production… and at the start of the customization… [It’s] not just the number of aircraft, which is great, but also the number of different customers that we are addressing. Plus we have our customer definition center in Hamburg, which helps a lot from that point of view. So it’s about lessons learned, it’s about maturity, not cutting corners, and trying to provide strategy. But it’s also a lot of work – we’ve had a very stable team from the very beginning of the program and a strong management as well as our regime of partners.

As a project, the A350 was less risky than the 787 by design. Airbus incorporated far fewer new and unproven technologies, and where it did use the same technology as the 787, Airbus’ implementation was frequently more conservative. For example, the A350 has twice as many lithium-ion batteries as the 787, but more conservative power and energy levels. This is not to discount the similarities between the two aircraft. The 787 and A350 share several design solutions, including a carbon fiber reinforced plastic (CFRP) – based structure, a wing designed with high lift arrangement, and similar avionics system. But where Boeing ran into trouble with its electrical systems architecture for delivering power to the 787′s various system, Airbus found success with a conventional system passed on from the A380.

All of this resulted in an unusually smooth systems testing period for the A350, which has enjoyed a trouble-free flight test period. Whereas Boeing had to work on perfecting its systems on the 787 during testing, Airbus could instead focus on delivering systems and aircraft maturity at EIS, having long before perfected most elements of the systems.

Airbus’ conservatism and “Stop and Fix” mentality have taken their toll however, with the result an 18-month delay from the initial planned EIS of early 2013 to the present. Like Boeing, Airbus ran into difficulties with manufacturing its CFRP fuselage for the A350 as well as with other new technologies implemented in the aircraft, and accordingly, the timeline of the A350 slipped and slipped, three to six months at a time.

Even more troubling was the steady creep in weight as the program matured, with operating empty weight (OEW) 6-7% higher than planned at launch. This is still below the 9% at present for the 787 and certainly below the 12% weight increase the 787 had at launch, but substantial nonetheless. The effect of this can be seen in the 350 nautical mile reduction in the A350-900′s published range earlier this year despite a shift to a lighter passenger configuration and an increase in maximum take off weight (MTOW) from 268 to 275 tons. All told, the A350-900′s effective range was reduced by roughly one hour, and while the A350-900 will still be able to perform 95-97% of advertised missions, this range reduction played a substantial role in Emirates’ cancellation of an order for 70 A350 aircraft earlier this year. While any such weight challenges have not yet become apparent publicly on the A350-1000, our sources at Airbus and its suppliers indicate that the A350-1000 will be overweight by at least 7-8% as it heads towards EIS in 2017.

We also spoke with sources at Rolls Royce, who revealed that the Rolls Royce Trent XWB has met most of its performance targets through flight testing, with specific fuel consumption (sfc) within 0.5 percentage points of revised targets from 2013. However, the A350-900 will likely EIS with higher fuel burn than advertised due to the weight challenges noted above.

Airbus has already ramped up well on the A350′s production in advance of EIS. Additional aircraft for Qatar Airways and the first A350s for Vietnam Airlines and Finnair are already on the final assembly line (FAL) in Toulouse as Airbus has progressed at a rate of two aircraft started per month. In the new year, Airbus will increase to three new aircraft started per month, steadily ramping up thereafter until it reaches a production rate of 10 aircraft per month in 2018, four years after EIS. However, we believe that Airbus will move to push A350 production rates higher to boost cash flow in the latter half of this decade, and speed up the break even target date (currently 2020). We think Airbus will eventually target rates of 11 or even 12 aircraft per month, however the recent decline in fuel prices, especially if persists through 2015, could alter the timing of those rate increases based on cash-strapped airlines delaying long haul fleet replacement.

Airbus Ends 2014 with Order Momentum

From a backlog perspective, 2014 was certainly not a strong year for the A350, due primarily to the cancellation of an order for 70 aircraft by Emirates. However, Emirates was not the only airline to eliminate an A350 order during 2014, as Hawaiian Airlines also cancelled its order for 6 A350-800s, and the Alitalia/Air One order for 12 A350-800s was removed from the books as well. Thus through the first 11 months of 2014, the A350 looked to be in for a rough year, only winning orders for 20 A350-900s (10 from Kuwait Airways, 8 from Iberia [announced in 2013], and 2 from Libyan Airlines).

But the last two months of the year brought a flurry of activity, with Airbus winning an order for 4 A350-900s from Air Mauritius, a top-up order for 8 additional A350-900s from Finnair, and notably, 25 A350-900s from Delta. With the additional orders, Airbus ended the year with a net decline of 31 orders for the A350, still leaving the program with 786 firm orders (and 288 purchase options) at EIS.

The A350-900 order from Delta was a big win, as it represented the most recent head-to-head competition between the A350-900 and the 787-9, which Boeing claims has met or exceeded performance targets. Both aircraft are of course excellent, with Boeing largely shedding the issues that plagued the 787-8, but as our analysis showed, the A350-900 more than holds its own in a head-to-head comparison.

Even as Emirates cancelled its order (dealing the A350-1000 a more substantial blow), reports emerged that the airline would re-consider the A350 in a new sales competition next year, presumably searching for a medium haul widebody to complement its two pronged fleet of A380s and Boeing 777-300ERs/777Xs. While Emirates is certain to reconsider the A350-900 in particular (the A350-1000 makes little sense given the large numbers of 777-8X and 777-9X aircraft Emirates has on order), our view is that the 787-10 should be favored in any competition for a regional and mid haul widebody aircraft, given its superior operating economics on routes that it can fly. The A330-900neo could also play such a role effectively as Delta’s recent order indicates, and it would also require a smaller cash outlay on the part of Emirates.

Despite Emirates’ cancellation, year-end sales and the good feelings surrounding the EIS should soften the blow to the overall program. Moreover, given Airbus’ famed “Fifth Quarter” where lead salesman John Leahy announces a slew of orders at the airframers annual press conference in mid-January, we cannot count out the the possibility of additional A350 order announcements in the coming weeks, perhaps filling the slots vacated by Emirates from 2019 onwards.

A350-800′s Demise Offset by the A330neo

The A350-800 is dead, killed off by the A330neo. Technically, there are still 26 outstanding orders for the type (10 from Yemenia, and 8 apiece from Asiana and Aeroflot), but both Aeroflot and Asiana have up-gauged a portion of their A350-800 orders to the A350-900 in the past and could likely be easily persuaded to do so. Yemenia is in financial shambles, and will likely convert or cancel its order outright.

Recent history and basic aeronautical science show that aircraft shrunk from the base variant (whether the 737 MAX 7, A319neo, or earlier the 737-600 and A318) tend to suffer from poor operating economics relative to the base model. Even the 787, for which the 787-8 was technically the base model, is likely to gain most of its sales from the 787-9 and 787-10 moving forward. 75% of what Airbus wanted to achieve with the A350-800 from a strategic perspective can be met by a mix of the A350-900 and the two A330neo models. While customers will have to sacrifice some range and or take on increased capacity with either alternative, few routes need the A350-800′s excess range over the A330-800neo, let alone over the A350-900. Moreover, by eliminating the A350-800, Airbus will improve its future financial performance (especially cash flow) through two mechanisms.

First, it will avoid a substantial cash outlay (perhaps as much as $1.5 – 2 billion) that it would have spent on developing the A350-800 and retooling its production to ramp up production of the type. Additionally, the A330-800neo and A330-900neo have already had their production line development largely written off and are relatively cheap to develop ($2.5 – 3 billion). For that reason, the A330neo is likely to be a positive contributor to cash flow in a way that the A350-800 would not have been. Until 2020, each A330neo sold in place of an A350-800 generates millions of dollars of net excess cash flow.

The A350-900 is a Powerhouse 

While Airbus may face challenges on the smallest and largest members of the family, the base variant of the XWB is in fantastic shape. With 585 firm orders (plus 16 likely conversions), the A350-900 represents 74.4% (76.5%) of the overall backlog. For its core mission of replacing the Boeing 777-200ER and A340-300, it is clear that the A350-900 has been a resounding success. Amongst its largest customers, the A350-900 will (at least partly) be replacing 777-200ERs and LRs at Singapore Airlines, Japan Airlines, Air France-KLM, Asiana, Vietnam Airlines, and Thai Airways. Meanwhile, amongst A340-300 customers, the A350-900 will play a replacement role at Air France – KLM, Lufthansa, Cathay Pacific, Finnair, China Airlines, TAP Portugal, Kuwait Airways, SAS, Iberia, Air Mauritius, and Sri Lankan Airlines.

Admittedly, the A350-900 shares this replacement market with the 787-9, but there is no doubt that it has been a resounding success. We believe that Airbus will eventually easily surpass 1,000 sales for the A350-900 and perhaps even approach 1,500 sales in an upside case scenario. This is a far cry from the tepid market response to the A350 Mark I, though some concepts from that offering have been resuscitated by the A330neo.

In terms of its cost competitiveness, our most recent estimates regarding the A350-900′s operating costs based on our proprietary model were released in our analysis of the Delta widebody order. You can find the summary table here, and the assumptions used can be found in the main body of the article. While the recent drop in fuel prices affects some of the specific numbers in the table, we believe that our broader conclusions are still applicable. The table illustrates the competitive parity between the 787-9 and A350-900, and the A350-900s abilities as a 777-200ER/LR replacement.

Furthermore, an operating cost analysis does not even take into account the A350-900′s superior revenue generation potential versus the 787-9. The A350-900 will seat anywhere from 5-15 additional passenger (315 in a two class configuration) versus the 787-9 depending on configuration, as well as superior cargo capacity. The A350-900 is the most capable aircraft in its class, to the point that it can even function as a viable 747-400 replacement for certain airlines looking to down-gauge on certain routes or boost frequency. For example, Delta will use the A350-900 to ply many of the same missions currently run by 747-400s inherited in its merger with Northwest Airlines.

The A350-1000 is a Viable Aircraft but Has Been Outflanked by the 777X

The largest A350 variant has come into its own since boosting the aircraft’s specifications back in 2011. While it was struggling at the time, subsequent orders have boosted the aircraft’s viability. At present, Airbus has 169 firm orders for the A350-1000, including 37 from Qatar Airways, 35 from United (converted from A350-900s), 26 from Cathay Pacific, 22 from Etihad, 18 from British Airways, 13 from Japan Airlines, 10 from Asiana, 5 from Air Lease Corporation, and 3 from Air Caraibes.

169 orders by itself is a firm foundation for a program that many speculated was destined for cancellation as recently as 2012, but unfortunately, the A350-1000 cannot escape the competitive glare of Boeing’s 777X. The 777-8X is the same size as the A350-1000 (and similar to the present-day 777-300ER), though it offers an additional 1,200 – 1,500 nautical miles worth of range. However, the A350-1000 holds a substantial edge in operating economics (our most recent estimates, not publicly released, place the figures at a 6-7% cost per available seat mile [CASM] delta including capital costs), even after taking into account the fuel burn improvements offered by the new General Electric GE9X engines. The 777-8X is likely to be a niche aircraft for the few operators that require an ultra long haul (ULH) aircraft, and to date, only 43 777-8Xs have been ordered (35 by Emirates, 8 by Etihad).

The core 777-9X presents a far more interesting competitive comparison, with a stretch that offers anywhere from 40-50 additional seats versus the A350-1000. To date, Boeing has sold 243 777-9Xs (115 to Emirates, 50 to Qatar Airways, 21 to Cathay Pacific, 20 to Lufthansa, 20 to ANA, and 17 to Etihad), outselling by itself the A350-1000. Moreover, since it was launched, the 777-9X has effectively won three of five head to head order competitions with the A350-1000 (ANA, Lufthansa, and Emirates [in a manner of speaking] while Airbus won the smaller Japan Airlines and British Airways contests). Moreover, Boeing won roughly an equal split with the A350-1000 amongst Middle East customers Qatar Airways and Eithad, as well as at Cathay Pacific. And we do see British Airways as likely to eventually order the 777-9X given space constraints at its London Heathrow home base.

Our most recent analyses of the 777-9X’s operating costs versus those of the A350-1000 were released in March and April, corresponding respectively to the ANA order and an initial consideration of the Delta widebody RFP. While these analyses were conducted assuming a higher price of fuel than at present, the broader conclusion of a small but statistically significant CASM advantage for the 777-9X still holds, especially given that lower fuel prices will narrow the trip cost gap with the A350-1000.

Both aircraft hold their merits, but from an airline fleet planner’s perspective, the 777-9X may hold a slight edge, if the extra space can be filled. The 777-9X does have higher trip costs, but that is offset by the lower CASM and extra revenue potential (both from additional passengers and from larger cargo capacity), assuming that an airline can take advantage of that potential. For example, Japan Airlines, operating from a capacity constrained hub no less, decided that given Japan’s economic and demographic trends, that the 777-9X was too much airplane for the market demand in its network.

So there are clearly airlines for whom the A350-1000 makes more sense, but from a long run perspective, we think that Boeing will be able to outsell the A350-1000 with both 777X models by a 55-45 or even 60-40 ratio given present conditions. That being said, the next couple of years may be slow for 777X and A350-1000 sales given Boeing’s desperation to fill its 777 production gap by selling 777-300ERs at cost, and the reduction in fuel prices causing airlines to delay fleet replacement plans. Even allowing for the fact that Airbus can theoretically bracket the 777-9X with the A380 on the (extremely) high end, Boeing appears to have seized the upper hand in this segment.

Enter the A350-1100?

While Boeing today holds the upper hand, Airbus could counter with a stretched A350-1100, which would close the capacity gap with the 777-9 while restoring the overall economic advantage for the A350 program over the 777X. Airbus needs a 400-seat A350 variant, but achieving that with the current Trent XWB engines is complex. Without improvements in specific fuel consumption (beyond the usual 1-3% from performance improvement packages), the A350-1100 would have to sacrifice range like the 787-10. Alternatively, Airbus could increase MTOW to maintain, which would be prohibitively expensive given that it would require a stronger wing and higher thrust engines.

One alternative could be to use Rolls Royce’s new Advance engine, which we believe will be used to power the A380neo. Using the Advance, which would offer a 5% fuel burn improvement over the present day Trent XWB, allowing Airbus to offer an aircraft cost-competitive with the 777-9X with a similar range. Even with Boeing’s ability to offer superior pricing on the 77X, with a 2021 or 2022 EIS, such an A350-1100 would bring Airbus to parity in the segment. We believe that Airbus will in fact launch both an A380neo and an A350-1100, both powered by the Rolls Royce Advance and targeted for EIS in the early 2020s.

EXTRA: Photos from the Delivery Event

EXTRA: The Airbus A350 Program Timeline

EXTRA: The Airbus A350 XWB: Being There At The Maiden Flight

EXTRA: Qatar Airways Takes Delivery of World’s First Airbus A350 XWB

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Contact the author at vinay.bhaskara@airwaysnews.com

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ANALYSIS: Boeing Cuts 747-8 Production Amidst VLA Weakness

by Vinay Bhaskara / Published December 12th, 2014

Lufthansa receives its first 747-8 in a handover ceremony. Image Courtesy of AirwaysNews

Lufthansa receives its first 747-8 in a handover ceremony. Image Courtesy of AirwaysNews

Boeing announced yet another cut in the 747-8′s production earlier this week, with production to drop to 1.3 aircraft per month beginning in September 15. The 747-8 is currently produced at a rate of 1.5 aircraft per month (18 aircraft per year), but has a backlog of just 39 aircraft out of 119 total firm orders. Under program accounting block rules, Boeing will soon be required to take a substantial one-time charge, which would hamper financial results in 2015. Boeing’s announcement mirrored recent commentary from Airbus, which has signaled its own struggles in the very large aircraft (VLA) market.

EXTRA: Boeing’s 747 Celebrates 1,500th Delivery as Future Remains Uncertain

Sales Dry Up

The 747-8′s sales record has been poor and future prospects are grim. Its current backlog of 39 aircraft is composed of 26 passenger 747-8 Intercontinentals (747-8i – including one VIP aircraft), and 13 freighters. Boeing had previously cut production in 2013 from two aircraft per month to 1.75 and then 1.5 aircraft per month, where it settled until the announcement of the latest cut. And despite Boeing’s protestations, its unclear where additional orders will come from, especially on the passenger side.

The original Boeing 747 rollout in 1969. Image courtesy of Boeing

The original Boeing 747 rollout in 1969. Image courtesy of Boeing

EXTRA: Korean Air Lines Orders Five Boeing 747-8i Jumbo Jets, Program Hangs On

Our sources indicate that Boeing has a major sales push in place for six VIP 747-8is in the Middle East, but beyond that, there is nothing on the radar. Many of the intended customers for the 747-8i have already opted for the A380, A350-1000, or Boeing’s own 777X, and the number of airlines that need a VLA or VLA sized aircraft (seating more than 400 passengers) without having already placed such an order is dwindling. There is (hypothetically) a potential order for five-10 VLA frames from Turkish Airlines, but we view Turkish Airlines as most likely to opt for the 777X as its interim VLA solution. Beyond that Boeing can maybe pitch El Al or Saudia amongst 747-400 operators without a direct replacement yet. And of course there is some potential for top-up orders from existing customers Korean Air, Transaero (rumored around the 787 cancellation), Lufthansa and Air China. But overall, Boeing cannot reasonably expect more than 20-30 further orders for the passenger variant without a major shift in airline strategy.

The Boeing 747-8 on the assembly line. Image Courtesy of Boeing

The Boeing 747-8 on the assembly line. Image Courtesy of Boeing

The VLA market is smaller than Airbus (and Boeing’s) projections

In their most recent current market projections for the period between 2014-2033, Airbus projected a VLA market of 1,228 passenger aircraft, whereas Boeing projected a market of 500 aircraft. Both of these numbers appear overly optimistic, given a combined backlog between the two programs of just 210 aircraft (a number which includes close to 50 A380 orders which we view as uncertain [and 30 that are outright doubtful]) extending over the next 10 years. Our view is that the market is smaller than Airbus’ projections and will settle at around 400-450 additional airframes (treating the 777X as outside the VLA sphere). Airbus is likely to soak up the majority of that demand with an A380neo if it chooses to launch the aircraft type, but otherwise it will be captured by the 777X and a hypothetical A350-1100 stretch.

EXTRA: Boeing Delivers 50th Boeing 747-8

Indeed the 777-9 may be the biggest culprit for the 747-8i’s sales weakness. Our economic analysis shows that the 777-9 at 10-abreast seating holds a substantial advantage over the 747-8 in terms of operating costs at today’s fuel prices, let alone at the $80-100 per barrel prices that persisted over much of the last five years. The 747-8 counters with added performance (especially at hot and high airport) and some extra revenue potential, but it’s not enough to compensate for the higher cost of operations.

No Help Is Coming From the Freighter Market

When Boeing launched the 747-8F, a significant portion of the business case rested on the new-build freighter market, which Boeing projected to boom in line with generally bullish projections about the air cargo market as a whole and expectations of high fuel prices. The last five years have instead been extremely choppy for the air freight market, with economic uncertainty and growth slowdowns in several emerging markets pressuring cargo space utilization and yields. Moreover, belly cargo is playing a larger and larger role in the long-haul freight market, as the passenger widebody fleet booms in size.

Photo Courtesy JDL Multimedia

Photo Courtesy JDL Multimedia

EXTRA: Air China Takes Delivery of Its First 747-8 Intercontinental

The 747-8F is the best and only new build freighter in its class. But there’s nobody left that has a true need for it. The shift to belly cargo has tamped down demand for medium and large widebody freighters, and amongst airlines that actually need or could use an aircraft of that size, there are still 263 Boeing 747-400 passenger aircraft available for passenger to freight (P2F) conversions available at a small fraction of the purchase price of new build 747-8Fs. At reasonable fuel prices, those 747-400s may approach similar operating costs (including the cost of capital) to the 747-8F, especially when the larger 747-8F is harder to fill. There may yet be top up orders from a few existing customers, but overall, we see Boeing selling no more than 15-20 additional 747-8 freighters in an optimistic scenario. Between the lack of additional passenger and freighter orders, we think Boeing will be forced to cut production even further, to one aircraft per month in 2016.

Holding Out for Air Force One

Recent rumblings in the defense industry indicate that the US Air Force (USAF) is fast tracking the acquisition of the next generation of Air Force One presidential transport aircraft. According to defense industry newsletter Inside Defense, the USAF has moved forward the timeline to acquire new aircraft in 2018, after previously indicating that a purchase would not occur before 2021. Under the new timeline, a request for proposals (RFP) for new-build aircraft to replace the 747-200 based VC-25s that currently service as presidential transport aircraft would be issued next year, with the purchase decision made in 2016 and delivery occurring two years later.

Air Force One at Miami International Airport. Image Courtesy of AirwaysNews

Air Force One at Miami International Airport. Image Courtesy of AirwaysNews

The Air Force One contract is a prestigious one for Boeing, which also supplied the 707 and 747-200 that made up the base for previous iterations, and Boeing can be expected to compete vigorously for the new contract. And while building Air Force One, with its secretive materials and interior on the same line as the commercially produced 747-8 may prove challenging, other defense aircraft are built on the same production lines as commercial ones, having the production line open is critical to enable Boeing to produce the new Air Force One, a public relations bonanza, at reasonable cost. And for that reason alone, we expect Boeing to try and hold out producing the 747-8 until 2018, when the Queen of the Skies will be allowed to die a dignified death.

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Contact the author at vinay.bhaskara@airwaysnews.com

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This Month in Airways Magazine: The Twilight of the MD-11

An all-new issue of Airways Magazine with an upgraded paper stock and spine is now available on newsstands!

Subscribe or buy yours today! Don’t miss a single issue.

PHOTO: TIM DE GROOT

FEATURES


PHOTO: TIM DE GROOT

THE TWILIGHT OF THE MD-11

by ENRIQUE PERRELLA

On November 11, 2014, the world witnessed the end of an era in commercial aviation. Twenty-eight years had passed since McDonnell Douglas launched the MD-11 program. Originating in the United States in 1986, the adventure culminated with its last passenger commercial flight in the Netherlands in 2014. This event marked the end of the tri-jet wide-body passenger operation, just nine months after Biman Bangladesh (Airways, November 2014) retired the last passenger DC-10.


PHOTO: JETBLUE

THE DESIGN AIR — TOP-10 INTERNATIONAL FIRST CLASS CABINS

by JONNY CLARK

In our brand-new monthly section in the larger and improved Airways, we will bring a series of Top-10 lists curated by TheDesignAir. This month, we award the best International First Class Cabins.


PHOTO: QR

QATAR AIRWAYS IS REACHING FOR THE CUTTING EDGE 

by BENET WILSON & CHRIS 

Qatar Airways began flying in 1994 as a small carrier serving a handful of routes in the Gulf region, using Airbus A310s and Boeing 727s. In 1997, the airline re-launched with the mandate to become a leading global carrier with the highest standards of service and excellence.


SEA

PHOTO: SEA

SEATTLE-TACOMA AIRPORT REVIEW

by ALBERT RODRIGUEZ

To say that Seattle-Tacoma International Airport (SEA/KSEA) has grown by leaps and bounds is an understatement. Though it ranks a mere #15 among domestic airports for number of passengers served in 2013, it impressively ranked #40 last year for international travelers, with nearly 3.6 million people coming in from, or going out to, Dubai, Tokyo, Frankfurt, Paris, Seoul, London, Beijing, Reykjavik, Taipei and Shanghai, plus five Canadian cities and three Mexican resort areas.


PHOTO: ANDREAS ROHDE

AIRWAYS TRAVELER: FLYING TO/FROM MOSCOW THE RUSSIAN WAY // AEROFLOT VS. TRANSAERO

by ANDREAS ROHDE

“HAVING RECENTLY CELEBRATED ITS ninetieth birthday, Aeroflot is almost a mystic name in commercial aviation. Once the largest airline on the globe—incorporating everything that had been connected to civilian flying in the former Soviet Union— today’s Aeroflot is only a fraction of its former self.”


PHOTO: AUSTRIAN

AIRLINE REVIEW: AUSTRIAN AIRLINES

by JEFF KRIENDLER

Born 60 years ago in Puebla, Mexico, the grandson of Austrians on his maternal side, Jaan Albrecht would have never dreamed of returning to the “old world” to try to save the once-proud and highly-regarded national carrier, Austrian Airlines, from insolvency.



Mohawk DC-3-1 - Copy

MOHAWK AIRLINES, PART TWO

by DAVID H. STRINGER

“America’s Local Service Airlines were created for the purpose of bringing air transportation to small and medium-sized cities. Mohawk was born from one man’s effort to fill that need for his hometown.”


PHOTO: CX

AIRWAYS INTERVIEW: RUPERT HOGG – CATHAY AIRWAYS COO

by ANDREAS SPAETH

CATHAY’S NUMBER TWO TALKS TO Andreas Spaeth in Hong Kong about his carrier’s rôle in a vibrant market and how global its reach has become.


 

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Airways Literature: CREW REST

by CLAY TAYLOR

Left Seat Chronicles: AIR FORCE ONE AND HALF

by JOHN MARSHALL

Airways Photo News

Colorfully illustrated highlights of the major news developments from North America and around the world, including fleet changes, new airlines, and new paint schemes.

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Our global forum for our readers’ opinions, feedback, and contributions.

Departing Shot & Arriving Shot

Introducing a new readers’ photography gallery.

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American Express Opens Centurion Lounge at San Francisco International Airport

By Benjamin Bearup / Published November 17th, 2014

All photos courtesy of American Express

All photos courtesy of American Express

San Francisco International Airport has become the latest home for a brand new American Express Centurion Lounge. The lounge, located in Terminal 3 near gate 74, becomes the fourth Centurion Lounge in the United States, with a fifth coming in early 2015.

A prime position airside and directly above the premium passenger security check within Terminal 3, home to United Airline’s domestic hub, offers passengers a perfect chance to relax before making connection onward to Asia or to recoup after a long-haul flight. The Centurion Lounge replaces the old Alaska Airlines Board Room at SFO, which closed on June 24, coinciding with the carrier moving from T3 to the International Terminal.

The new San Francisco Centurion Lounge is modeled after the Las Vegas lounge and features a “living wall” (live plants growing on wall) that greets visitors upon entering. For the casual passenger passing through, the Centurion Lounge offers multiple options for entertainment and relaxation.

A large complimentary bar run by mixologist Jim Meehan is sure to please the upbeat crowd, while a wine bar run by Centurion Wine Specialist and author Anthony Giglio will offer customers a sample of California’s famous wine country. The large food buffet, run by Executive Chef Christopher Kostow, will offer passengers a taste of locally inspired cuisine. Other amenities include shower suites and multiple spacious lounge areas throughout. Passengers traveling with family can use the special family room or pass the time watching one of the many flat-screen televisions within the lounge.

Screen Shot 2014-11-13 at 9.28.34 PM

For business passengers, the Centurion Lounge offers spacious workspaces with power outlets and a computer bar with fax, print and copy capabilities. High-speed WiFi is also available.

As with other Centurion Lounges in Dallas, Las Vegas, and New York LaGuardia, dark hardwoods and modern design techniques will be prevalent throughout the complex. The overall design appeals to the upbeat and tech-savvy crowd around the Bay Area and certainly will become to go to lounge within SFO.

American Express recently announced that it will open its fifth Centurion Lounge at Miami International Airport,  due to open in early 2015. It was originally scheduled to open in December 2014. Located in the North Terminal, the Miami Centurion Lounge is in a prime location to serve passengers flying oneworld alliance partners American Airlines, US Airways and Qatar Airways.

Lisa Durocher, senior vice president of benefits at American Express, sees the opportunities that this lounge brings saying “We’re thrilled to bring The Centurion Lounge experience to Miami International Airport, a critical hub for domestic travelers as well as the nation’s largest gateway to Latin America and the Caribbean.”

Access to Centurion Lounges is free for American Express customers with Platinum or Centurion cards and American Express customers with any valid credit or charge card can pay $50  for a one-day pass.

Editor’s note: Have you subscribed to our weekly newsletter yet? Click here to subscribe today for a summary of our best stories, along with exclusive subscribers-only content.

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Contact the editor at benet.wilson@airwaysnews.com

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Flashback Friday: Planespotting International Flights at JFK in 1992

By Luis Linares / Published November 7th, 2014

LOT B763 - JFK - LFL

LOT Polish Airlines Boeing 767-300ER at JFK in 1992

New York’s JFK International Airport has been and continues to be a plane spotter’s dream, given the variety of domestic and international carriers that fly there.  In a previous Friday Flashback, we looked at the changes that were taking place at JFK, such as the construction of a new ATC tower and Delta’s takeover of Pan Am’s operations more than 20 years ago.  Join us for another look at JFK in the early 1990s, this time focusing on international flights and some of their history, in some cases fateful.

Last month, the McDonnell Douglas MD-11 made its last commercial passenger flight on KLM Flight 672 from Montreal to Amsterdam.  When I visited JFK in 1992, the MD-11 was a new aircraft.  Many passenger MD-11s are getting a second lease on life by being converted to freighters.  American Airlines used the MD-11 for trans-Atlantic and South America operations.

AAL MD11 - JFK - LFL SWR MD11 - JFK - LFL
American Airlines and Swissair McDonnell Douglas MD-11s at JFK in 1992

Another carrier starting MD-11 service at the time was Swissair for flights to Geneva and Zurich.  Unfortunately, one of these flights would go down in history as the deadliest MD-11 accident, killing all 229 passengers and crew, when on September 2, 1998, Flight 111 from JFK to Geneva crashed five miles off the coast of Nova Scotia, Canada.  The official investigation concluded that an electrical fire and very flammable insulation material resulted in the crew losing control.  Eventually, Swissair would become a casualty of post 9/11 airline financial difficulties.

What would a good plane spotting experience two decades ago be without seeing some DC-10s?  The MD-11, designed to replace the DC-10, was just starting to roll out of Long Beach in the early 1990s.  Therefore, DC-10s were very common at major airports like JFK. When I visited, I spotted a couple of Lufthansa models, which flew the routes from Frankfurt and Munich.  At the time, they sported a classic blue cheat line in their fuselage.  Another DC-10 operator at JFK was Nigeria Airways, which ceased operations in 2003.  The carrier flew form Lagos at the time, and Nigerian company Arik Air serves this route today.

DLH - DC10 - JFK - LFL SNGA DC10 - JFK - LFL
Lufthansa and Nigeria Airways DC-10s at JFK in 1992

UAL B744 - JFK - LFL

United Airlines Boeing 747-400 at JFK in 1992

The Boeing 747-400, which started service 25 years ago, is slowly starting its farewell to passengers and is also undergoing conversions for an extended life in the cargo world.  At the time of my visit, this variant of the “Queen of the Skies” was brand new.  Although United Airlines today only flies to its Los Angeles and San Francisco hubs from JFK, in the early 1990s it had a more robust presence, which included trans-Atlantic flights and trans-Pacific flights.  The 747-400, decked in United’s “rainbow/tulip” livery, operated from JFK to Tokyo.

VRG B744 - JFK - LFL

Two generations of the Boeing 747 at JFK in 1992:  Varig 747-200 and Singapore Airlines 747-400

Speaking of the 747, the classic -200 series variant was a very common sight at JFK at the start of the 1990s, especially since its eventual -400 series replacements were still very young.  Some of the -200s I spotted included those flown by Aer Lingus from Dublin and Shannon; Alitalia from Milan and Rome; Pakistani International Airlines from Lahore; the infamous and defunct Tower Air mostly to Europe and Israel; and Brazil’s Varig, another failed but historic carrier, from Rio de Janeiro and São Paulo.

EIN B742 - JFK - LFL AZA B742 - JFK - LFL JPIA B742 - JFK - LFL TOW B742 - JFK - LFLBoeing 747-200s at JFK in 1992:  Aer Lingus, Alitalia, Pakistani International AIrlines, and Tower Air

MSR B763 - JFK - LFL

EgyptAir Boeing 767-300ER at JFK in 1992

EgyptAir operated the Boeing 767-300ER from Cairo to JFK with continuing service to Los Angeles in the early 1990s.  The airline continues JFK-Cairo service to this day using new 777-300ERs.  Like Swissair, EgyptAir also suffered a tragedy on a flight originating from JFK.  On October 31, 1999, Flight 990 crashed into the Atlantic Ocean 60 miles south of Nantucket, and all 203 people onboard perished.  Egypt’s Civil Aviation Authority lacked the resources for a complex accident investigation and thus turned to the NTSB for help.  However, the U.S. and Egypt failed to agree on the findings.  The NTSB determined deliberate intent by the relief first officer, while Egypt concluded elevator failure.

Another aviation icon at JFK was the Concorde.  Air France and British Airways took passengers from JFK to their respective Paris and London hubs in just over three hours.  Concorde service catered to the rich and famous, but that didn’t prevent us regular people from seeing and especially hearing this legendary aircraft.  I captured an image of an Air France Concorde during this visit.

While I do not want to focus too much on tragic accidents, it is important to note that JFK was the destination of the only fatal Concorde accident. On July 25, 2000, charter flight 4590 crashed shortly after takeoff from Paris, killing all 100 passengers and nine crew.  The cause was a metallic strip that fell from a Continental Airlines DC-10 that had just departed.  The fragment made a tire on the left main landing gear explode, which in turn punctured a fuel tank.  The pilots were unable to maintain control after the two left engines failed, while their wing was consumed by fire.

AFR B744 - JFK - LFL AFR Concorde - JFK - LFL
Regular and luxury flying options: Air France Boeing 747-400 and Aérospatiale-BAC Concorde at JFK in 1992

I will end on a more positive note by talking about two Chilean carriers flying to JFK during this time.  Ladeco and Lan Chlie were competing carriers in Chile and operated various domestic and international routes.  Ladeco flew a Boeing 757-200, which meant it could not provide non-stop service from Santiago since the 5,100 mile trip exceeded the 757’s range.  Lan Chile, on the other hand, operated a 767-300ER, which was capable of connecting Santiago and JFK without any stops.  A couple of years after this plane spotting visit, Lan Chile took over Ladeco.  Today, Lan Chile is known as LAN Airlines, featured in this month’s issue of Airways Magazine, and it is part of the larger LATAM Airlines Group.

LCO B752 - JFK - LFL LAN B763 - JFK - LFL
LAN Airlines predecessors:  Ladeco Boeing 757-200 and Lan Chile Boeing 767-300ER at JFK in 1992

EXTRA: AirwaysNews collection of JFK pictures

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Contact the author at luis.linares@airchive.com

Contact the editor at benet.wilson@airwaysnews.com

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Qantas Set to Open New First Class Lounge at LAX

By Benjamin Bearup / Published November 4th, 2014

All photos courtesy of Qantas

All photos courtesy of Qantas

Australian flag carrier Qantas is preparing to open a brand-new first class lounge at Los Angeles International Airport’s Tom Bradley International Terminal in January 2015. The 200-seat lounge, which is set to open around New Years Day 2015, will become Qantas’ flagship international first class lounge.

The lounge will be a greatly modernized recreation of Qantas’ Melbourne and Sydney international first class lounges, which underwent major overhauls in 2007. One of the greatest features of the first class lounge will be the first Neil Perry restaurant in the United States. Perry, the famed Australian chef and coordinator of Qantas flight catering, has been tapped to redesign and revolutionize the dining experience in the new first class lounge.

la-lounge-1

Perry has given several hints about what to expect, such as a menu heavily centralized around vegetables native to North America. He has also hinted at offering a very diverse menu by introducing flavors from the culturally diverse Los Angeles culinary market.

Chef Neil Perry

Chef Neil Perry

Unlike its Sydney and Melbourne counterparts, the Los Angeles first class lounge will not feature the famous Aurora day spa, due to lack of space within the Bradley terminal.

Passengers flying first class or equivalent aboard Qantas OneWorld partners, Qantas Platinum or Platinum One passengers, or OneWorld Emerald passengers will be eligible to use the new international first lounge.

Business Lounge

In the ribbon-cutting ceremony for the new lounge, Qantas will also unveil a 200-seat extension to its existing business class lounge. The expanded business class lounge will hopefully alleviate peak time overcrowding at the current business class lounge. The expansion comes months after Qantas experienced an embarrassing and public problem regarding their LAX business class lounge where hundreds of passengers were denied access to the lounge due to overcrowding.

The business class lounge, which opened in June 2014, is available to passengers flying business onboard several OneWorld partners, including British Airways and Cathay Pacific along with several frequent flyer levels and OneWorld frequent flyer levels found here.

Qantas currently offers once daily service to Melbourne with the A380, once daily service to Brisbane with the 747, and twice daily service from Sydney with the A380 and 747, once daily 747 service to New York JFK.

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Contact the editor at benet.wilson@airwaysnews.com

 

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Virgin Atlantic Welcomes the 787-9 in Atlanta

Sir Richard Branson addresses the audience at the 787-9 Atlanta event. Photo courtesy of Benjamin Bearup

Virgin Atlantic’s Boeing 787-9 in Atlanta. Photo courtesy of Brian Gore

Virgin Atlantic welcomed the state-of-the-art Boeing 787-9 Dreamliner into its fleet at an event in Atlanta that also commemorated the launch of the carrier’s new London Heathrow-Atlanta route. Founder Sir Richard Branson was on hand to welcome Virgin’s first 787-9 Birthday Girl to the fleet.

Birthday Girl is the first of 21 787-9 aircraft Virgin Atlantic will welcome to the fleet in the coming years. The addition of the 787-9 to the fleet comes at a time when many carriers, including Virgin Atlantic, are retiring older and less fuel-efficient aircraft such as the 747 and the Airbus A340, both which are currently in Virgin Atlantic’s fleet. CEO Craig Kreeger stated that the new 787-9 will be up to “27 percent more fuel efficient compared to the aircraft it will be replacing.”

The Upper Class bar. Photo courtesy of Virgin Atlantic

The Upper Class bar. Photo courtesy of Virgin Atlantic

The new 787-9 will seat 264 passengers (two less that Virgin Atlantic’s A330-300) in a 31 upper class, 35 premium economy, and 198 economy class configuration. When asked if the 787-9 will rotate schedules with the A330-300 similar to how Virgin Atlantic’s 747’s and A340-600’s do, Kreeger stated that “although unintentional, it is very likely that the 787-9 will operate on A330 routes and vice versa.”

Virgin also unveiled an updated Upper Class “Dream Suite” that gives customers more space and access to cutting-edge technology such as personal 24-inch touchscreen monitors at each seat. Virgin Atlantic will fit 31 Dream Suites seats in roughly the same space as 33 fit on the A330.

Onboard the 787-9, Virgin created a dedicated area to serve premium economy passengers called the Wonder Wall. Here passengers can get up and stretch their legs all while getting a drink or snack mid flight. Several other features include a walk-up bar as found on all Virgin Atlantic aircraft, satellite WiFi capable of connecting passengers even over large bodies of water, and ambient mood lighting that Virgin has become famous for.

Sir Richard Branson at the Atlanta event. Photo courtesy of Benjamin Bearup

Sir Richard Branson at the Atlanta event. Photo courtesy of Benjamin Bearup

During this event, Branson got his first taste of what the Dreamliner has to offer. A private tour was offered to him by Virgin Atlantic’s design staff shortly after the event. Branson, who was not able to participate in the inaugural flight due to a schedule conflict, toured the flight deck, all three classes and even took a break from his busy schedule to take in a drink at the luxurious upper class bar.

The 787-9 will replace Virgin Atlantic’s last two A340-300s. Additional 787-9 aircraft will be used for growth primarily in trans-Atlantic markets such as Detroit, San Francisco, and Atlanta. As more new 787-9s arrive, Virgin Atlantic will face an increasingly large problem regarding slots at the already busy London Heathrow Airport.

The 787's Upper Class cabin. Photo courtesy of Virgin Atlantic

The 787′s Upper Class cabin. Photo courtesy of Virgin Atlantic

During a Q and A session, Branson addressed the issue by taking a strong stance favoring the building of a much-needed third runway at Heathrow. Currently with no room to expand at Heathrow, the carrier has had to cut routes in order to start new ones, including the London-Atlanta route. As an alternative, Virgin Atlantic will have to expand at the less-favorable London-Gatwick Airport, where the airline also has a hub. It is also planning to expand service from Manchester as more planes arrive.

Virgin Atlantic flight attendants show off their new uniforms. Photo by Benjamin Bearup

Virgin Atlantic flight attendants show off their new uniforms. Photo courtesy of Benjamin Bearup

At the conclusion of the celebration, showcased the new Virgin Atlantic flight attendant uniforms designed by Vivienne Westwood. Branson also gave news regarding that Virgin Atlantic has converted five 787-9 options to firm orders, bringing the total number of the type in the fleet from 16 to 21.

The celebration of the 787-9 was only half of the days festivities, with the other half reserved to welcoming Virgin Atlantic to Atlanta and the ceremonial beginning of an increased partnership with 49 percent stakeholder Delta Air Lines.

Atlanta Airport General Manager Miguel Southwell, along with Atlanta Mayor Kasim Reed, were on hand to welcome Virgin Atlantic to the city of Atlanta. Shortly after Branson’s grand introduction, featuring a choir singing “London’s Calling” by The Clash along with two flight attendants bearing flags from both the United Kingdom and the United States, Atlanta Mayor Kasim Reed joked that he “hopes his staff was watching” and to “take notes.” The addition of the London Heathrow to Atlanta route was the first of several routes Virgin Atlantic will add in cooperation with partner Delta Air Lines.

A 787 premium economy seat. Photo courtesy of Virgin Atlantic

A 787 premium economy seat. Photo courtesy of Virgin Atlantic

Virgin Atlantic will be taking over the London Heathrow-Atlanta from Delta as both carriers overhaul their trans-Atlantic schedules to better suit existing markets. Growth in the Atlanta market will not end there for Virgin Atlantic. It also plans to take over the Manchester-Atlanta route from Delta using an A330-300 starting March 29, 2015. Additional growth will come this summer, when Virgin Atlantic goes to two daily flights between London Heathrow to Atlanta. Customers flying both carriers will be able to earn frequent flyer points for either carrier through this codeshare.

Virgin Atlantic will be the first carrier to utilize the new incentive based program recently passed by Atlanta’s city council designed to attract foreign carriers to start routes to Atlanta. “The programs overall goal is to make Atlanta a more diversified international destination,” said the airport’s Southwell, while also dismissing rumors that Delta is unhappy about the potential competition this program may bring. As part of the incentive program, Virgin Atlantic will not have to pay landing fees for one year in Atlanta, resulting in savings of up to $600,000. Currently Virgin Atlantic is the only carrier to use this incentive program.

RELATED STORIES

Virgin Atlantic Takes Delivery of First Boeing 787-9 Dreamliner

ANALYSIS: Virgin Atlantic Restructures Network to Focus On Delta Relationship

Analysis: DOT Approves Delta & Virgin Atlantic North Atlantic Joint Venture

Virgin Atlantic To Fly First 787-9 This October

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Contact the editor at benet.wilson@airwaysnews.com

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A 36-hour Odyssey with Qatar Airways

By Luis Linares / Published October 22, 2014 / Photos by author

QTR B77L - LFL - DOH

Qatar Airways Boeing 777-200LR at Hamad International Airport

Recently, Airways News contributor Luis Linares was one of a handful of guests invited by Qatar Airways to experience a “vacation without a destination,” via a 36-hour luxury roundtrip from the U.S. to Doha’s new Hamad International Airport (HIA). The trip included seven hours on the ground to take in the Al-Mourjan Business Class Lounge, the HIA Hotel, and other highlights at this state-of-the-art facility.

This unique VIP layover did not require customs and immigration formalities or exiting security.  Qatar Airways uses “The World’s Five-Star Airline” as its corporate slogan, and accolades, such as Skytrax’s “World’s Best Business Class” and “Best Business Class Lounge” for the last two years, suggest the airline is worthy of its five-star self-description. Find out if the five-star hype lives up to its name.

New York to Doha

I arrived at New York’s JFK International Airport on an American Airlines evening flight from Miami.  American dominates Terminal 8 in JFK, and this building also serves some of American’s oneworld alliance partners, including Qatar Airways.  A Qatar staff member met me at my arrival gate to escort me to the departure gate, where she issued my boarding pass and quickly walked me to window seat 1K in business class on a Boeing 777-300ER.  The seat is 78 inches long and 22 inches wide and converts to a flat bed.  The 42 business class seats are arranged in a 2-2-2 layout.  We reviewed Qatar’s business class service on a couple of occasions in February and June, so I will spend more time on the experience at HIA.

QR Business Seat - LFL QR Business Bed - LFL
Seat 1K in upright and bed settings

We pushed back at our scheduled departure time of 11:00 p.m.  Doha is seven hours ahead of New York, which meant our 11 hour and 35 minute flight would have us there before 6:00 p.m. local time.  As soon as I sat down, a very friendly flight attendant, Elizabeth, introduced herself and offered me an amenity kit, as well as a set of pajamas.  She also explained the on-demand dining menu, which included multi-course and lighter options, and mentioned it would take up to 20 minutes for a main course to be served.

I opted to stay on U.S. time for the entire itinerary by choosing to sleep first, and Elizabeth offered turndown service as soon as the seat belt sign was off.  She covered the seat with a fitted sheet and arranged the pillow and blanket accordingly.

QR J Class - LFL QR IFE Main Menu - LFL QR Arabic Breakfast - LFL QR Moving Map - LFLBusiness class section, IFE main screen, Arabic breakfast, HUD on the moving map

I slept the first eight hours of the trip.  The aircraft has a variety of mood light settings to enhance passenger comfort ranging from bright pink to dark blue, which was used when most of the passengers were sleeping.  When I woke up, I ordered a traditional Arabic breakfast plate.  During breakfast I explored the IFE, called Oryx Entertainment by Qatar.  It offered noise-cancelling headsets, a USB port for personal devices, 554 TV programs, 274 movies, and a wide variety of audio options, including music, talk, and audiobooks.  Other screen options include a moving map, airport information, and duty free shopping.  The remote control is very easy to figure out and navigate.

The Al-Mourjan Business Class Lounge

Upon arrival at HIA, a Qatar ground staff member escorted our small group through transit passenger security, then directly to the Al-Mourjan Business Class Lounge, which is solely dedicated to Qatar’s business and elite customers.  HIA has a business lounge for other oneworld customers, as well as those traveling on the rest of the airlines that fly there.  As Qatar shifts first-class service to its new Airbus A380 fleet, a new lounge will open solely for those clients.  The first thing that struck me about the lounge was its sheer size!  The two-floor facility totals more than 100,000 square feet in space or the size of 10 Olympic-size swimming pools.

QR Business Class Lounge - LFL Fountain at QR Lounge - LFL
The vast expanse of the Al-Mourjan Business Class Lounge and a fountain inside the lounge

We first toured Al-Mourjan’s business center, which features a conference area, Internet computer stations, printers, scanners, 24/7 secretarial services, a media room, and a game room that boasts a Formula One simulator as one of its main attractions.  Throughout the lounge, there is complimentary WiFi, seating that offers a personal flight information display screen, a reading light, and USB or power outlets for personal devices.

Since Qatar is a predominately Muslim country, the lounge offers a prayer room, which is segregated into an area for men and another for women.  Quiet rooms are another service offered at the lounge, and these spaces consist of individual and double occupancy rest areas.  Staff can provide amenities like pajamas and toothbrushes, as well as services like wake-up calls.  There are also various small rooms to relax and watch television.  Male and female shower rooms are also available for customers.

Bar - LFL Hot Options - LFL TV Room - LFL F1 Simulator - LFL Bar, hot eating options, personal TV room, and Formula-One simulator

The lounge is also very family friendly.  It has a dedicated family area that provides a nursery, playrooms with toys and videogames, and a food and beverage station.  In addition, it provides more private areas for nursing mothers, and staff members are readily available to provide assistance.  Upon completion of the structured tour of the lounge, we were allowed to explore and enjoy this elegant area on our own.

Dining options are available 24/7, and they range from light snacks to full hot meals in self-serve and catered buffet stations.  There is also a bar that keeps wine, champagne, and other beverages constantly flowing.  We left the dining area, but not before enjoying a few glasses of champagne, as well as some appetizers.  The entire lounge can handle up to 1,000 customers at a time.  The lounge was very quiet when we arrived at 6:00 p.m., but we were told that the numbers pick up as flights arrive from Europe and the U.S.  Even during that peak period, the complex felt very comfortable and spacious.  All the amenities mentioned are an option to passengers at no extra charge.

The HIA Hotel

Hotel Lobby - LFL

HIA Hotel front desk

At 7:00, one hour into our luxury layover, another member of Qatar’s airport staff took us to the 200-room HIA Hotel.  I was expecting to exit security and to have to go through immigration formalities in order to get to the hotel, but it is actually located inside the security checkpoints.  HIA Hotel transcends a typical hotel by offering stays that start at three hours, considering many customers are on longer layovers, but do not necessarily have to leave the airport or stay an entire day.

Room offerings include standard rooms and executive suites, 32-inch LCD TVs, room service, and complimentary WiFi, tea, coffee and bottled water.  The soundproof rooms offer views of the main terminal’s vast dining and retail spaces.  Hotel clients also have the option on enjoy a swim in an 82-foot long swimming pool or work out at the fitness center, which includes personal instructors, weights, and different exercise machines.  There are two squash courts available too.  For passengers looking to relax and rejuvenate, the hotel offers a sauna, steam room and various spa treatments.

Hotel Executive Suite - LFL Hotel Pool - LFL Hotel Gym - LFL Hotel Squash Court - LFL Executive suite bedroom, swimming pool, gym, and squash court

After providing walkthroughs of the above facilities, our hosts offered each one of us a room to enjoy for the remaining five hours of our layover.  Prior to the trip they also offered a complimentary spa option. I relaxed in my room for about an hour, where I was able to complete some notes on my experience so far, plus enjoy a nice shower.  With a couple of hours still left on the ground, I checked out of my room and proceeded to the terminal building to examine the amenities offered to all customers transiting HIA.

Other Features at HIA

HIA started passenger operations in May of this year.  The airport is currently capable of handling 30 million passengers per year with concourses A, B, and C.  Once concourses D and E are finished, this number will soar to 50 million.  The terminal complex is almost two million square feet in size, with 41 gates.  After the final construction phase, HIA will have 60 gates.  I explored the almost 270,000 square feet of retail and food and beverage spaces.  This area includes 104 retail stores selling goods from famous fashion and electronics labels.  Familiar names include Rolex, Chanel, Gucci, Tag Heuer, Coach and Virgin.  Twenty cafes and restaurants offer various types of local and international cuisine.

HIA Concourse C - LFL HIA Lamp Bear - LFL HIA Retail - LFL HIA Playground - LFL Councourse C, the “Lamp-Bear”, retail space, a sculpture that doubles as a playground

Scattered throughout the concourses are various art exhibits and sculptures, one that serves as a playground for children.  A hard to miss sculpture is the 23-foot Lamp-Bear, designed by Swiss sculptor Urs Fischer, located in the center of the terminal.  In the retail area there is a noisy animatronic dinosaur that seemed to keep the little ones very entertained.  There are also seating spaces to watch TV, computer stations to surf the internet, and spaces to recharge electronic devices.  WiFi is free throughout the entire airport.  Qatar Airways not only uses HIA as its hub, it was also involved in the development of the airport and currently manages the facility.  Qatar claims that it holds HIA’s facilities to its “five-star” standards.

Doha to Philadelphia

Mood lighting - LFL

Mood lighting during dinner

At midnight, I returned to the Al-Mourjan to rendezvous with the other guests.  We enjoyed a round of champagne and toasted to our wonderful experience on the ground.  Our flight back to the U.S. was set for 1:05 a.m., to Philadelphia International Airport.  Given the strong headwinds, flight time clocked at 13 hours and 25 minutes, almost two hours longer than the first segment.  On both legs, the crew followed restrictions by avoiding Iraqi and eastern Ukrainian airspace, which probably added more to the length of the trip.  Our aircraft was a Boeing 777-200LR.  I sat in the last row of business class in seat 7A right next to the engine.  Both the 777-200LR and -300ER have significantly quieter engines than the first generation of 777s, hence it did not really feel like I was sitting by the engine.  When we pushed back, it was past 6:00 p.m. in the U.S. east coast, and I saved my appetite for a multi-course dinner.

Qatar’s “World Culinary Menu” boasts the work of four celebrity chefs – Nobu Matsuhisa, Tom Aikens, Vineet Bhatia, and Ramzi Choueiri.  The flight attendant offered chicken tikka as a “palate pleaser,” and then I ordered a salmon appetizer, lamb loin for the main course, and a very tasty dessert consisting of a biscuit with coconut, white chocolate mousse, and fruit concoction by famous French bakery Ladurée.  Since I was able to stay in my time zone the entire trip, I also opted to watch a movie before going to bed.  I decided to go “old school” and watch the classic western “A fistful of Dollars”.

Lamb Dinner - LFL Salmon and Eggs - LFL
Lamb loin dinner and smoked salmon & scrambled eggs breakfast

I slept eight hours and woke up two and a half hours before landing.  I went with a delicious breakfast consisting of yogurt and fresh fruit, plus a smoked salmon with chive scrambled egg plate, and I had time for one more movie.  During descent, the flight attendant walked up to personally ask about my onboard experience, as well as to thank me for my patronage.  A Qatar staff member greeted us on the ground to escort us to immigration, where we parted ways and proceeded to our domestic connections.

A Five-Star Experience?

Qatar Airways and its main regional competitors, Emirates and Etihad Airways, are commonly referred to as the “Big Three” and have earned reputations for providing top-of-the-line products and services to their customers.  Competitors in the U.S. and Europe are noticing and reactions range from introducing new upgrades and features in their fleets to complaining about how the “Big Three” unfairly benefit from government subsidies while aggressively expanding their networks into their territory.  The “Big Three” are also wooing customers in the U.S. and Europe to connect through one of their lavish hubs.

While I have not flown on Emirates or Etihad, my frequent travel with the oneworld alliance has allowed me to experience first or business class service on American Airlines, British Airways, Cathay Pacific, LAN Airlines, Qantas Airways, and Royal Jordanian Airlines, and I can confidently conclude that the whole Qatar Airways business class experience is in a league of its own and deserving of its five-star moniker.  The very comfortable seat itself is comparable to most international business class seats offered by the major world carriers.  However, Qatar’s level of crew friendliness, attentiveness, and hospitality; the quality of the cuisine; and the experience on the ground eclipse the competition

I expected to fell exhausted after this 36-hour whirlwind, but the 25 total hours aboard Qatar’s business class had to be at the top of the most comfortable and relaxing flights I have ever taken.    I did my part by keeping myself hydrated, but what made the experience so special was having crews fully committed to ensuring I got the maximum, satisfaction from my onboard experience.  Very friendly flight attendants, excellent food, a wide variety of IFE options, and a comfortable sleeper seat give a pretty good sensation of being at a five-star resort.

Dawn in the U.S. - LFL

Our aircraft reflected on the engine during sunrise in the northeastern U.S.

Moreover, the sampling of services I experienced at HIA as a business customer was heavenly. Any business passengers fatigued by a long flight will no doubt get a boost from everything the Al-Mourjan Business Class Lounge has to offer.  Furthermore, all customers willing to pay can take their level of comfort, relaxation, and privacy a step further by booking a stay at the HIA Hotel.  A lengthy layover at HIA, regardless of which of the two facilities a passenger chooses, will feel more like a well-deserved rest, rather than an inconvenience.

The lounge and the airport have an aesthetically-pleasing modern architecture that provides a great sense of space and comfort.  The only processes I did not get to judge were the check-in and security lines at HIA, but if they live up to the standards Qatar Airways expects from HIA, I have no doubt they would get high marks.  I also look forward to taking in the visual beauty of HIA during daylight hours in the future.

I predict there will be a game of one-upmanship between the “Big Three”, as they continue to attract business customers to their hubs and premium services.  Qatar Airways continues to demonstrate a commitment to improvement by introducing a 1-2-1 business class seating configuration that offers more privacy and direct aisle access aboard its Boeing 787 and Airbus A380 fleets.  In addition, the airline plans to unveil what CEO Ali Al-Baker called a “Super Business Class” berth seating within the next two years.  I would also be curious to see how legacy carriers in the U.S. and Europe try to compete against the overall business product offered by Qatar Airways.  My lavish jaunt with Qatar Airways began on a Wednesday evening and ended on a Friday morning.  I went to work at my Miami office shortly after landing at noon that Friday and did not feel tired.  If anything, I want to partake in a similar experience again!

DISCLAIMER:  Qatar Airways paid for our trip, but opinions are our own

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Contact the author at luis.linares@airchive.com

Contact the editor at benet.wilson@airwaysnews.com

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Flashback Friday: A Look at Continental and Other Airlines at Newark in the 1990s

By Luis Linares / Published October 17, 2014 / Photos by author

COA B722 - EWR - LFL

Continental Boeing 727-200 and Newark’s old ATC tower in 1993

In the early 1990s, the largest tenant at Newark Liberty International Airport (EWR) was Continental Airlines, and it continues to be the largest carrier there today as United Airlines.  EWR is one of the three major airports serving the New York City area and has the distinction of being the first major airport in the U.S., opening 86 years ago.

Travel with us back to March 1993 to spot some aircraft from Continental, which was emerging from a second bankruptcy at the time, and other airlines at EWR.  We will also look at some of the other domestic and foreign carriers serving Newark at the time.  Finally, we will jump six years forward to 1999 to see a very healthy and successful Continental at Newark.

UA DC10 - DEN - LFL

Continental DC-10s at Newark in 1993

The 1980s were a turbulent decade for Continental Airlines.  Texas Air Corporation, under the leadership of Frank Lorenzo, acquired Continental in 1981.  Most of the workforce saw Lorenzo as fiercely anti-union, and he took the airline into bankruptcy protection in September 1983, after failing to negotiate to negotiate lower pay rates with the unions.  This allowed the company to force new labor agreements on employees, which resulted in a more competitive airline, but at the cost of workforce morale.

In June 1986, Continental emerged from bankruptcy, and a year later in 1987, the airline merged with PeoplExpress, which had been a mainstay in Newark since 1981, and New York Air.  This transformed Continental into the third-largest carrier in the U.S.  However, in the late 1980s, Texas Air also bought struggling Eastern Airlines, and Lorenzo dedicated most of his time to labor issues with Eastern.

Continental faced the burden of having acquired two airlines (really three taking into account PeopleExpress bought Frontier Airlines two years before the Continental takeover), plus the surge in fuel prices after the 1991 Gulf War.  Moreover, these acquisitions left Continental with various types of aircraft in its fleet.  Lorenzo retired at the end of 1990, and Continental entered a second bankruptcy.  In early 1991, Continental unveiled the “globe” livery that lives to this day as United and emerged from bankruptcy in 1993, after other companies, including Air Canada, invested $450 million in the carrier.  We will get back to Continental’s story.

During a visit to Newark in 1993, I took some pictures of some of the other airlines that operated there.  Among the foreign carriers, Air France provided non-stop Boeing 747-200 service from Paris-Charles de Gaulle.  Today, this flight is handled by Delta, which has had a very close relationship with Air France since merging with Northwest Airlines in 2010.  Furthermore, Air France and Delta are two of the four founding members of the Sky Team alliance.

Scandinavian Airlines in 1993 served the three Scandinavian capitals (Copenhagen, Oslo, and Stockholm) from Newark using Boeing 767-300s, and today these routes are operated by either Airbus A330s or A340s.  Portugal’s TAP used an Airbus A310 from its Lisbon hub in 1993, and today this flight continues using an A330.  One transatlantic flight I took from Newark as a Virgin Atlantic Boeing 747-200 to London’s Gatwick Airport.  These days, Virgin uses A330s and A340s to serve London’s larger Heathrow Airport from Newark.

AFR B742 - EWR - LFL SAS B763 - EWR - LFL TAP A310 - EWR - LFL VIR B742 - EWR - LFLEuropean airlines at Newark in 1993:  Air France Boeing 747-200, SAS Boeing 767-300s, TAP Airbus A310, and Virgin Atlantic Boeing 747-200

AA A300 - EWR - LFL

American Airbus A300 at Newark in 1993

As I have mentioned in other flashback pieces, U.S. airlines, especially before the September 11 terrorist attacks, had different fleet utilization, such as using widebody jets for relatively short domestic routes. Twenty years ago, jet fuel prices were low and high load factors had less importance, compared to today.

One domestic widebody I photographed at Newark in 1993 was an American Airlines Airbus A300 originating from Miami.  An interesting tidbit about this aircraft was that American was unable to adopt its classic polished metal scheme on the entire aircraft since some its components, especially in the tail and aft section, were made from composite materials, instead of aluminum.  American eventually polished the fuselage, but had to maintain a gray color on the tail and rear fuselage.

Getting back to the Continental story, after emerging from its second bankruptcy in 1993, the carrier experienced a historic revival.  In 1994, former Boeing executive Gordon Bethune became COO, and was elected CEO in 1996.  Five years later, he authored his aptly titled  book “From Worst to First,” which chronicled the company’s stunning turnaround under his leadership.  Continental went from consistent bottom rankings across most airline rating categories to being one of the best.

For example, for six consecutive years, Fortune Magazine named Continental among the “100 Best Companies to Work for in America” and “Number One Most Admired Global Airline” from 2004 to 2008.  Moreover, in the late 1990s, Bethune undertook an aggressive fleet modernization plan, in which the airline became an all-Boeing operator with orders for 737-700/800/900s, 757-200s, 767-200ER/400ERs, and 777-200ERs.

COA B738 - EWR - LFL COA B752 - EWR - LFL COAX ERJs - EWR - LFL COAX ATRs - EWR - LFLContinental rejuvenated and triumphant at Newark in 1999: Boeing 737-800, Boeing 757-200, Embraer ERJ-145s, and ATR-42s

By the early 2000s, Continental had the youngest fleet in the U.S.  In addition, it acquired ExpressJet Airlines, which it held until 2002.  The regional carrier provided jet service as Continental Express using Embraer 135 and 145 aircraft.  Continental also operated ATR-42/72 turboprops, using the Continental Express label, out of Newark to serve smaller regional airports.

I was working in Washington, D.C., in the late 1990s, and had a few opportunities to fly to and from Newark.  I was not only impressed by the new fleet of aircraft, but also by the friendliness and excellent costumer service of the crews.  Memorable flights included brand new 777-200ERs from Newark to Gatwick and to Rome, as well as connecting to Reagan National Airport on new Boeing 737-700s or Embraer 145 regional jets.  I also experienced Continental’s completely revamped international business class, “Business First,” aboard a recently delivered Boeing 757-200 on a flight to Bogota.  I even got to say goodbye to the DC-10, which was being replaced by the new Boeings, from Newark to Madrid on one of its last flights.  As we know, today Continental is part of a much larger United Airlines, but its positive transformation during the 1990s brings back good memories of some very enjoyable flights.

CO 752 TO  EWR 2 - LFL CO 752 TO  EWR 3 - LFL
Taking-off from Newark to Bogota in 1999 aboard a Boeing 757-200

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Contact the author at luis.linares@airchive.com

Contact the editor at benet.wilson@airwaysnews.com

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ANALYSIS: Wright Amendment Expiration Highlights Battle Between American and Southwest – Part 2

by Vinay Bhaskara / Published October 17th, 2014

Editor’s note: In part 1 of our analysis, we offered a history of the Wright Amendment, and took a look at Southwest Airlines’ prospects now that it has been lifted at Dallas Love Field after 43 long years of fighting.  Today we look at competitor American Airlines’ competitive response at Dallas-Fort Worth International Airport.

Competitive Impact on American Will Be Mixed

There is no question that the end of the Wright Amendment will have an adverse impact on American’s O&D market and revenue share in the markets affected. O&D passengers are more profitable than connecting ones, and insofar as American’s absolute O&D figures on these routes is set to decline, this will generate a hit on the profitability of American’s largest hub at DFW. Southwest Airlines is the leader or even with American in terms of O&D market share in the 16 markets it currently serves, and while American generates a fare premium in those markets, for the 14 city pairs where Southwest is adding service, American currently generates 60% O&D market share and 70% O&D revenue share. From here on out, it will trade those figures for something like 45% and 60%.

American Airlines Airbus A319 at DFW

American Airlines Airbus A319 at DFW

American’s stranglehold on business travel in the region should continues, as it will offer superior frequency in every single market save Oakland, which it does not compete directly in (while offering a combined 16 daily flights to San Francisco and San Jose in the Bay Area). Business customers have a well established preference for higher frequency, and when combined with the massive global reach of American’s DFW hub including rapidly growing links to Asia, corporate contracts centered on the region will continue to (heavily) favor American. This is not to say that Southwest will not be able to capture a substantial share of business traffic. It already does so in existing markets from Dallas Love Field, but that market share (driven disproportionately by Austin, Houston, New Orleans, and San Antonio) is generated in part because Southwest is at parity with American in terms of frequency on those routes.

In the near term, the impact of Southwest’s entry will likely be O&D revenue and share declines, and likely a modest hit on margins. However, in the long run, American has a couple of factors weighing in its favor.

Banking on Connectivity

American is counting on its re-banking initiative to boost connectivity at DFW, with a commensurate jump in revenue. The plan is driven by the experience of pre-merger US Airways, who rode banked hubs at Philadelphia and especially Charlotte to high profitability despite limited O&D markets.

Relative to the rolling hub structure that American currently uses at DFW with flights spaced (relatively) evenly throughout the day, the new banked hub will feature far more volatility. In a banked hub structure (the most common type around the world), flights depart and arrive in alternating waves, and at a hub of DFW’s size, these waves might number 50 or 60 cities at a time. Banked hubs offer more connectivity than rolling ones, which raises revenue potential, but they also cause challenges in terms of asset utilization and cascading delays at certain airports. However, American is rolling out banking projects at DFW, Chicago O’Hare, and Miami, seeking to boost revenue as the merger changes traffic flows.

Specifically with regards to the Wright Amendment, American will lose some traffic that migrates to Southwest’s new services. Love Field is extremely convenient for Dallas based leisure travelers (though DFW is quite convenient in its own right), and overall, the airline will win passengers away. But American will be able to offset that traffic decline by filling its planes with connections. And thanks to the ever-increasing pricing power of U.S. airlines, American should be able to maintain margins and absolute profitability in the market with high-fare connecting passengers.

Economics and Demographics Favor American

One of American Airlines DFW Hub Terminals seen in the late 1980s.

One of American Airlines DFW Hub Terminals seen in the late 1980s.

The Dallas-Fort Worth metropolitan area is one of the fastest growing in the United States. Cheap housing and a booming economy are drawing residents to the region, while businesses lured by Texas’ business-friendly tax policies and regulatory environment have generated well-paying jobs. These demographic and economic trends have boosted air travel demand, both leisure and business, substantially over the past 25 years and are expected to do so for at least another 15.

Clearly this is beneficial for both carriers, which will see fuller planes and rising demand. But American is better positioned than Southwest to take advantage of the growth of the region, and the reason has to do with the compromise allowing Southwest to begin nationwide service in the first place. Thanks to the 20-gate cap, of which Southwest is unlikely to control more than the 16 it does today, Southwest is effectively stuck at 153 or 155 flights per day as the natural limit for daily utilization of its gates. Now there are ways for it to grow its operation at Love Field as we will outline below, but those methods have drawbacks and once again have a natural limiting factor.

Meanwhile American basically has no restrictions at DFW. It has plenty of terminal space to expand into today, and the airport has ample room for additional terminals as necessary. As O&D demand rises in the Metroplex, American will be able to soak up a larger share of the growth than Southwest (because of both frequency and network – it will always serve more destinations), and it would not be surprising to see American holding 50- to 70-percent O&D splits even in markets where it competes head-to-head with Southwest a decade from now.

Southwest Is Not As Much of A Threat as it Used To Be

Fifteen years ago, the prospect of a Southwest freed from the shackles of the Wright Amendment would have rightly terrified American, who would have been undercut at every turn by a nimble, low-cost carrier and see fares plummet. Today? Southwest isn’t really a low-cost carrier and it needs similar fares to those required by American for profitability. The cost gap between the two airlines has narrowed substantially, and while Southwest remains a formidable competitor, it is a different kind of competitor.

Moreover, American also has an advantage in its new management team, composed primarily of pre-merger US Airways executives. No legacy airline did a better job of fighting off Southwest than US Airways (who had no choice given its revenue shortfalls). While Las Vegas was sacrificed to Southwest and Allegiant, US Airways more than held its own in Phoenix and most notably, drove Southwest out of Philadelphia with its tail between its legs after Southwest attempted to build a secondary Northeast connecting complex with close to 75 daily departures. If you could pick one management team to face off with Southwest in a post-Wright Amendment world, it would be Doug Parker, Scott Kirby, and company.

Southwest’s Growth Opportunities are Limited

Circling back to Southwest for a moment, its growth prospects at Love Field are not great. The natural cap for its daily departures is around 155 unless it can get its hand on more gates. That being said, in terms of pure capacity, Southwest does have some room for growth on the basis of aircraft mix. For the January day in question, Southwest will split its 153 daily departures across all four aircraft types in its fleet, including 24 daily 737-300s, 30 daily 737-500s, 87 daily 737-700s, and 12 daily 737-800s. That works out to 21,633 outbound seats, a substantial increase over pre-repeal capacity. But just 12 of the 153 flights use the 737-800, which seats 175 passengers versus 143 for the 737-300 and 737-700 and 122 for the 737-500. Replacing smaller 737s with the 737-800, of which Southwest has an additional 43 on order, or (later) the 737 MAX 8 or 737 MAX 9, could be its best strategy for capacity.

If Southwest were to convert all of its daily flights (up to 155) to the 737-800 or eventually the 737 MAX 8, it could offer 27,125 daily outbound seats. If it upgauged even further to the 737 MAX 9 as has been heavily rumored, and assuming a 200-seat MAX 9, it could offer up to 31,000 daily outbound seats. Using annualized comparisons (which are imperfect given that this analysis uses peak-day departures), that’s the equivalent of adding more than 4 million or 6.5 million annual seats (bi-directional) respectively.

Compositionally, Southwest does not have a ton of room to grow with additional destinations. That being said, in a scenario where it up-gauges to the 737-800, it could conceivably free up frequencies for new destinations. Consolidating the Houston Hobby service to an hourly shuttle would free up six daily flights, while consolidating Austin and San Antonio to eight daily flights apiece would add four to the tally. Albuquerque, Lubbock, and Midland could be brought down to three daily departures apiece, as could Amarillo and El Paso, adding eight additional frequencies. Finally, Kansas City, New Orleans and St. Louis could each drop down to six daily flights, giving Southwest a total of 22 additional frequencies to work with.

There’s also the chance that Southwest entirely eliminates Wichita and Birmingham from the network – two relatively recent additions with small O&D markets for another five daily flights. And if it has enough profitable opportunities, Southwest could eliminate Amarillo, Lubbock, and Midland entirely, giving it a grand total of roughly 36 additional frequencies to work with. In Southwest’s hands, that could generate anywhere from six to 18 new destinations (likely somewhere in the middle).

Of course paring frequency in existing markets will reduce Southwest’s O&D market and revenue shares in those markets, some of which could conceivably bounce back to American. Yet another reason why the competitive dynamics in the market are hardly dire for American.

Hardly #NonstopLove

With its heady marketing taglines and a well-timed sale launched just a day after the expiration, Southwest has certainly scored points and set the expectation that it will drive down fares. But Dallas consumers should not expect a sudden decline in ticket prices thanks to Southwest’s entry. In fact for many, ticket prices will actually increase. 

As we mentioned before, Southwest Airlines is no longer a purely low-lost carrier, but rather a hybrid network carrier with a complex business model and variegated product offering. The Southwest Effect above and beyond standard new entrant impact is dead, and the days of Southwest offering genuinely cheap fares is gone. In the Metroplex, that role will continue to fall to ultra-low cost carrier Spirit Airlines.

Southwest needs fares at roughly the same level as American to generate profits, and accordingly the pricing in most markets shouldn’t decline more than 5-7%. Moreover, there are many customers, who had previously traveled outside the perimeter from Love Field, for whom fares are actually going to increase.  After 2006, Southwest began selling “through” tickets at Love Field – direct, one-stop flights to beyond perimeter cities via an allowed airport. These one-stop flights helped Southwest fill its planes as traditional demand patterns tailed off, but they also were extremely low yielding. In many of the markets where it is adding nonstop service, Southwest was the lowest fare carrier in Q3 of 2013. Southwest is going to want to charge a premium for new non-stop service and accordingly passengers will have far fewer dirt-cheap one-stop flights from Love Field. Anyone expecting fares in the Metrpolex to drop sharply as a result of repealment is in for a disappointing surprise.

Partying Like its 1996

Southwest’s festive celebration of the passing of the Wright Amendment gave the impression that the market had changed in a monumental manner, but realistically, the Metroplex has simply returned to its status quo for much of the post-deregulation era. For years, American was the dominant player at DFW, but it was held in check by Delta Air Lines, who had a large hub in its own right at DFW (though American still led the market).

Southwest Airlines was the cheap, no-frills carrier who offered limited service to myriad destinations. Today? American is a dominant player at DFW though it is held in check by Southwest, who has a large operation in its own right at Love Field (and bears close resemblance to legacy carriers today). Spirit Airlines is the cheap, no-frills carrier that offers limited service to myriad destinations. Southwest Airlines may be overjoyed at the elimination of the Wright Amendment. But for many customers in the Dallas – Fort Worth metro area, their emotions today might be more aptly described as a muted sense of deja vu.

Related Stories
ANALYSIS: Wright Amendment Expiration Highlights Battle Between American and Southwest – Part 1

Southwest Trumpets End of Wright Amendment Restrictions at Dallas Love Field

Virgin America Makes Move to Dallas Love Field

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Contact the author at vinay.bhaskara@airwaysnews.com

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ANALYSIS: Wright Amendment Expiration Highlights Battle Between American and Southwest – Part 1

by Vinay Bhaskara / Published October 16th, 2014

At 12:01 am Monday, Southwest Airlines’ personal Berlin Wall came down, as the Dallas-based airline was allowed to begin non-stop service from Dallas Love Field to destinations across the contiguous United States, resolving a 43-year fight by the carrier to add service from its home base. The move, along with expansion by other airlines into the newly freed environs of Love Field, has created an unprecedented state of competition for origin and destination (O&D) in the Dallas-Fort Worth metropolitan area, challenging the hegemony of current market leader American Airlines.

A Protracted Battle

Written in 1979, the Wright Amendment was a federal law that governed air traffic at Love Field. Aimed at protecting massive government investment into the new Dallas-Fort Worth International Airport (DFW), the Wright Amendment prevented airlines from using aircraft larger than 56 seats at Love Field to serve destinations outside of the states of Texas, New Mexico, Louisiana, Arkansas, and Oklahoma. Flights between Love Field and airports in those states could be operated by aircraft of any size. While in theory, this law allowed for airlines flying small jets and turboprops to serve the entire nation, in practice (as the case of Legend Airlines illustrated) American Airlines was quick to quash any full-service competition at Love Field. As a low-cost carrier (LCC) with a single type fleet of Boeing 737, Southwest Airlines, one of few tenants who refused to leave Love Field for DFW, couldn’t take advantage of the 56-seat exception and was hemmed in by the restrictions of the Wright Amendment.

Defenders of the Wright Amendment claimed that it was necessary to protect the metro area’s investment into its green field airport, rightly pointing to examples such as Montreal’s Mirabel International Airport or Osaka’s Kansai International Airport of cities allowing traffic to be split across two different airports and losing traffic and airline hubs accordingly. Meanwhile, opponents of the law claimed that it was anti-competitive and a violation of free market principles, as well as needlessly restrictive. Both arguments held merit. Especially when DFW was opened, it was unclear whether the metropolitan area would have enough air traffic to justify two competing airports. Allowing two airports to fight over a limited pool of traffic often is a mistake, and strategically, the decision was justifiable at the time.

But the new connecting complexes built by American Airlines and Delta Air Lines meant that traffic at DFW boomed beyond anyone’s expectations and by the mid-1990s, DFW was over capacity, and it was clear that Love Field could be opened to new flying without damaging its prospects. While the airport and the city of Fort Worth managed to limit a 1997 repealment push to add Kansas, Alabama, and Mississippi, Missouri was added to the list of approved states with a 2005 amendment, and in 2006, another major push towards repealment that began in 2004 generated the compromise you see today.

The Specifics

Under the terms of the compromise ending the Wright Amendment in 2006, airlines are now free to begin service across the contiguous United States from Love Field, but the number of gates available to airlines will be capped at 20.  Of the 20 gates, Southwest will control 16 while United and Virgin America will control two apiece. Combined, the airlines will use these 20 gates to offer 178 flights per day by Thursday, January 15th, 2015, including 153 by Southwest, 13 by Virgin America, and 12 by United. Additionally, Delta Air Lines operates five flights per day to Atlanta, but those flights are in danger after Delta lost its lease on American’s gates (which were divested to Virgin America as part of the approval process for the American-US Airways merger).

Non Southwest Love Field Service

Delta is currently working with the city and other airlines (temporarily gaining accommodation at one of Southwest’s gates) on a deal to continue service but will otherwise be kicked out of the airport on January 5, 2015. The table to the right summarize peak-day frequency for the three airlines at Love Field (assuming Delta retains service) in January 2015. Virgin America will clearly be the second-largest airline at the airport, but United and Virgin America will operate just 25 daily departures (including 12 ERJ-145s with very quick turnaround times) across four gates for an average of 6.25 departures per gate, against Southwest’s 153 departures from 16 gates (9.6 departures per gate). Unless both airlines plan to expand operations, each could assist and/or be forced (in the case of a lawsuit) to accommodate Delta’s operations.

Southwest’s Operation

Southwest’s new non-stop service from Love Field will roll out in three phases to 17 new destinations, boosting the airline’s service offering at the airport from 116 daily departures to 153 by January 15, 2015, the peak day chosen for this analysis.

 

On Monday October 13, 2014,  Southwest launched service to the following destinations:

  • Denver
  • Chicago (Midway)
  • Baltimore/Washington
  • Washington, D.C. (Reagan National)
  • Las Vegas
  • Los Angeles (LAX)
  • Orlando

The following eight routes will begin November 2, 2014.

  • Phoenix
  • Orange County/Santa Ana
  • San Diego
  • Tampa Bay
  • Ft. Lauderdale
  • New York City (LaGuardia)
  • Atlanta
  • Nashville

And service to the final two destinations in Southwest’s initial round of expansion will begin on January 6, 2015.

  • San Francisco
  • Oakland

Southwest Love Field FrequenciesAll told, Southwest will operate 153 peak-day departures to 33 destinations. Frequencies for the 16 pre-repeal destinations on January 15, 2015 are shown to the right, with total frequency chopped down from 116 daily departures to 100. This reduction in frequency mostly happened to out of state destinations which had seen boosted frequencies due to Southwest’s ability to sell one-stop direct tickets to destinations outside the Wright Amendment “perimeter” via an intermediate stop within the perimeter. Since 2006, this has been the lifeblood of the Love Field operation, according to CEO Gary Kelly.

Meanwhile the chart below displays frequency to the new destinations for Southwest, along with a summary of American’s frequency (daily departures) for the same day of January 15, 2015. The fourth through seventh columns present a summary of key origin and destination (O&D) market data for the third quarter of 2013, representing the peak travel season for the DFW market. PDEW measures the O&D traffic demand for the market per day in each direction, fare and yield are self-explanatory, and the final column states whether American is the leader in O&D passengers or notes which competitor has the O&D lead otherwiseSouthwest vs. American at Love Field

Southwest is flying to 17 new destinations from Love Field, but only 14 new city pairs. The competitive dynamics with American are interesting, but what is key to note is that unlike some of the in-state quasi-shuttle routes, frequency to these new destinations is relatively low, with only New York La Guardia, Washington Reagan, and Chicago Midway surpassing five daily departures.

In part two of this story, Bhaskara covers American Airlines’ competitive response and the future of Southwest Airlines at Dallas Love Field.

Image Courtesy of Jack Harty

Related Stories
Southwest Trumpets End of Wright Amendment Restrictions at Dallas Love Field
Southwest Airlines Unveils New Livery and Brand
Southwest CCO Robert Jordan On Business Traveling, Rising Fares
Has “The Spirit Effect” Replaced ” The Southwest Effect?”

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Contact the author at vinay.bhaskara@airwaysnews.com

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Flashback Friday: Denver Stapleton International Airport in 1994

By Luis Linares / Published October 10, 2014 / Photos by author

Stapleton Tower - LFL

Denver Stapleton International Airport ATC Tower in 1994

Twenty years ago commercial aviation in Denver was in a period of transition, as the city prepared to open a brand new international airport.  The original airport, Stapleton International Airport, opened almost 85 years ago on October 17, 1929, and operated for 65 continuous years.

The last flight left the airport on February 25, 1995, and Denver International Airport opened the next day.  I went to college in Colorado from 1990 to 1994, and this gave me many opportunities to fly in and out of Denver.  Join us for some plane-spotting at Stapleton back in 1994.

UA DC10 - DEN - LFL

United Airlines DC-10-10 at Stapleton in 1994

United Airlines established Denver as a hub city after the signing of the Airline Deregulation Act of 1978.  In 1993, United unveiled a new livery, commonly referred to as “battleship gray”, which replaced the “rainbow & tulip” scheme introduced in 1973.  During this period, airlines used different fleet utilizations, compared to today.  For example, it was very common for United to use DC-10s for the 90-minute flight from Denver to Chicago O’Hare.  This was a time in which airlines were less concerned about planes being full, and jet fuel prices were very cheap, compared to the post 9/11 environment of today.  In fact, United sometimes used the DC-10 for one of its shortest routes that connected Denver to Colorado Springs 60 miles away.

I once flew on a United DC-10 from Fort Lauderdale to Denver, via Chicago.  The one time I had an opportunity to fly the Denver-Colorado Springs segment was on a TWA Boeing 727, originating in St. Louis.  The flight lasted 12 minutes at an altitude of 12,000 feet above sea level, roughly 7,000 feet above ground level, keeping in mind the higher altitudes of Denver and Colorado Springs.  This route was usually operated by a Boeing 737-200 or -300.  Twenty years ago, the subsidiaries and aircraft operating as United Express were also different.  Air Wisconsin flew to smaller cities in Colorado, especially the ski resorts, using the BAe 146-100.  Mesa Airlines also supported United Express, and it used Beechcraft 1900D turboprops.

UA - B7333 - DEN - LFL UA B752 - DEN - LFL ZW BAe146 - DEN - LFL BE1900D - DEN - LFLUnited’s Boeing 737-300 in “rainbow/tulip” colors and  Boeing 757-200 showing off new “battleship gray” scheme, United Express (Air Wisconsin) BAe 146-100 and United Express (Mesa Air) Beechcraft 1900D

Another airline in transition, in more ways than one, was Continental Airlines.  Continental had also established a post-deregulation hub.  However, in October 1994, the airline closed its pilot and flight attendant base at Stapleton, and operations significantly decreased.  Like United, Continental was also changing colors during this time.  It began to shed its “meatball” scheme, which had been around in 1968 and adopted the “globe” that the merged United-Continental retains to this day.

When I traveled home to Florida, I had a couple of flights from Denver on Continental.  As was the case with United, Continental also used widebodies to connect its hubs.  On both flights, I connected in Continental’s Houston hub aboard one of its Airbus A300s. At Stapleton, Continental also had regional operations.  One of the feeder airlines was GP Express Airlines, which operated Beechcraft 1900Cs to smaller cities.   A resurrected version of Frontier Airlines filled the void at Stapleton left by Continental in 1994, and today it still uses Denver as a hub.

GPE BE1900C - DEN - LFL CO - B733- DEN - LFL
The “meatball” becomes the “globe”:  Continental Connection (GP Express) Beechcraft 1900C and Continental Boeing 737-300

Besides United and Continental, I had the opportunity to fly on American, America West, Northwest, and TWA to and from Denver.  On American, I flew on McDonnell Douglas MD-82/83 aircraft to its hubs in Chicago, Dallas-Fort Worth, and Miami.  Furthermore, I got to fly on an America West Boeing 737-200 to its Phoenix hub and on a Northwest Boeing 727-200 to its Detroit hub.  In addition to the TWA flight I mentioned earlier, I also remember a Denver – St. Louis – Orlando – Fort Lauderdale “milkrun” on the same 727.  TWA flew the 727 or the MD-83 to Stapleton from its St. Louis hub.

AA MD80 - DEN - LFL AW B743 - DEN - LFL ZNW B722 - DEN - LFL TW MD80 - DEN - LFLAmerican Airlines McDonnell Douglas MD-83, America West Boeing 737-200, Northwest Boeing 727-200, and TWA McDonnell Douglas MD-83

Other major carriers, like Delta, also operated in Stapleton.  Several factors contributed to the decision to close the airport and open up a much larger facility further east.  First, more separation was necessary between the parallel runways, especially during adverse weather conditions, such as low visibility.  Second, there was no room for expansion, which made it difficult for other airlines to add Stapleton as a destination.  Third, local residents sued the city over aircraft noise.  Last, Adams Country threatened legal action if any of the runways were extended into Rocky Mountain Arsenal lands.  Today, the area once occupied by Stapleton consists of residential neighborhoods, commercial warehouses, and a large shopping mall called the Shops at Northfield Stapleton.

In the spring of 1994, an airshow commemorated the completion of Stapleton’s replacement, Denver International Airport, and it was held at the new airport.  The new Denver International Airport was supposed to start operations that same year.  However, the actual opening faced many delays that pushed the opening to the following year.

UA B733 - DIA - LFL UA DC10 - DIA - LFL
United Boeing 737-300 and McDonnell Douglas DC-10-30 on static display during airshow celebrating completion of new Denver International Airport in 1994

See more historical photos of Stapleton Airport here.

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Contact the author at luis.linares@airchive.com

Contact the editor at benet.wilson@airwaysnews.com

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