What a year the civil aviation industry has experienced. From ash clouds to grounded the ZA002, dull is not a word that airline executives would use to describe 2010.
Here’s our round-up of the biggest global news of the year:
Eyjafjallajokull torments European airlines
Probably the most famous volcano in modern times, Eyjafjallajokull was responsible for shutting down large amounts of airspace across Europe for six days in April. An estimated 250 million cubic meters of ash rising 30,000ft into the air caused airlines to ground their fleets, causing European carriers to lose some $1.8 billion in revenue, according to IATA.
Boeing’s 787 Woes
2010 has not been a great year for Boeing and its Dreamliner. The aircraft maker once against suffered several setbacks and proved unable to get the airliner into customer hands. The 787 delivery schedule was impacted in August after a Rolls-Royce Trent 1000 uncontained failure, forcing Boeing to push its scheduled delivery into early 2011.
Then, in November, Boeing had to suspend its 787 flight testing after an electrical fire occurred on board ZA002.
Flight tests resumed this month. Meanwhile Boeing’s key airline customers are counting the costs of the delay to deliveries.
Rolls-Royce, Qantas and THAT engine problem
A fatigued oil pipe in a Rolls-Royce Trent 900 engine caused an uncontained engine failure forcing a Qantas A380 (QF32) to make an emergency landing in Singapore in November.
Subsequently, Trent-powered A380s across the world were grounded as airlines conducted inspections of their own engines.
Qantas is seeking compensation from engine-maker Rolls-Royce after the cost of grounding its A380 fleet exceeded $100 million. The fall-out also caused Airbus to miss its target of delivering at least 20 A380s this year..
Rolls-Royce has continued to say as little as its investors will let it get away with, despite a disastrous plummet of its share prices. Qantas meanwhile, learnt lessons in social media the hard way.
One of the big question going into 2010 was whether Airbus and Boeing would launch plans to reengine their cash-cow single-aisle aircraft.
As the year progressed, it became increasingly obvious that Airbus was leaning toward such a move, but the aircraft maker was unwilling to pull the trigger. Even once the company had determined it could see a business case, it remained worried about having adequate engineering capacity to pull off the program without impact the A380, A350XWB development and A400M military transport.
In December, Airbus finally determined it was ready to go ahead, and announced the A320NEO (new engine option) would be ready for initial entry into service in 2016. Pratt & Whitney’s geared turbofan and CFM International’s LEAP-X are the engine on offer for NEO. The move has big implications for the International Aero Engines joint venture now offering the V2500, since the two key partners in the business – Pratt and Rolls-Royce – have decided to part ways when it comes to the A320NEO.
In the continued war against terrorism, a major revamp of airport security measures including body scans, pat-downs and passenger profiling were introduced in 2010. The measures were brought in following a failed bombing attempt onboard a Northwest Airlines flight to Detroit on December 25, 2009.
In the U.S., the Transport Security Administration has introduced whole body scanners at numerous airport security checkpoints. The new scanners, using whole-body imaging technology, have sparked furious reaction from opponents of the device, with some questioning the long-term health impacts from repeated x-ray screenings. European airports have been experimenting with technology, while European politicians debate privacy concerns.
In the U.S., passengers have the option to bypass the scanners and instead opt for pat-downs, but these friskings have been opposed too, with one pilot filing a law suit claiming that the procedure of “groping” is a ‘violation of his constitutional rights’.
And cargo gets it too
Terrorists, impeded by body-scans and pat-downs, added a new weapon to their arsenal: printer bombs.
In October, printer cartridges modified into bombs were found on cargo aircraft operated by UPS and FedEx in Dubai and the U.K.
The discovery prompted a review of cargo screening, resulting in an overall ban of printer cartridges on board aircraft and talks of 100% cargo screening. The Airports Council International has argued that 100% screening would cripple the flow of trade goods.
A year for mergers and joint ventures
JAL and AA
Japan Airlines kicked off 2010 in bad shape and ended it with a new open skies partner. The airline entered bankruptcy protection in January with debt of around $11 million, then started restructuring the business with a reduction to its workforce and fleet and a withdrawal from unprofitable routes.
The Japanese carrier had been toying with the idea of joining Delta over at Skyteam, but American Airlines, a fellow Oneworld alliance member, came dangling a financial joint venture carrot, guaranteeing $100 million in new revenue to JAL for the first three years of the venture.
Despite Delta having a wider network than American, JAL’s decision was probably the result of wooing and promises of various incentives by other Oneworld carriers BA and Qantas.
The airlines signed an open skies deal in November, paving the way for additional flights between the U.S. and Japan.
BA and Iberia one step closer
In late November, over 99% of British Airways’ shareholders voted in favor of the airline’s merger with Iberia. The deal is expected to be completed in January 2011 - over three years after BA first indicated an interest in taking over the Spanish carrier.
The two airlines will retain their own brands but will be run by holding company International Airlines Group with current BA CEO Willie Walsh at the helm.
Southwest gets bigger with AirTran buyout
In a surprise move, Southwest Airlines in September announced it was buying AirTran Airways, giving the largest carrier of U.S. domestic traffic even more heft.
The $1.4 billion acquisition opens up access to a prized airport for Dallas-based Southwest, Atlanta, where AirTran has a hub-and-spoke operation. It’s “where the big numbers are” according to Southwest CEO Gary Kelly.
Atlanta, the U.S.’s highest-volume airport, places low-cost Southwest firmly in competition with Delta for the all-important business travel market.
Delta’s only public comment on the day the deal was announced was that it “successfully competes with these airlines in most of the major domestic markets we serve. Customers choose Delta for our full-service product offering, including complimentary first-class upgrades, airport lounges and assigned seating, and because no low-cost carrier can match the global access we bring to more than 350 cities across six continents.”
“A new era in competition”
14 years after British Airways and American Airlines first sought antitrust immunity for a transatlantic pact, the two carriers, along with fellow Oneworld member Iberia, finally joined forces in October to announce “a new era in competition on the transatlantic”.
Following regulatory approvals earlier in the year, the three carriers launched the joint transatlantic business enabling the airlines to commercially cooperate on flights between Europe, Switzerland, Norway, Canada, Mexico and the U.S.
The airlines will benefit from revenue and market share gains, with BA’s Willie Walsh saying that passengers can look forward to “better service, enhanced customer proposition, greater competition, access to cheaper fares, greater choice through increased frequencies and destinations, and better schedules.”
Snow competes with ash for European airspace closures
Not wanting to be outdone by Eyjafjallajokull, the snow made an early appearance in Europe and the end of November, causing large swathes of disruption at airports across the continent and on the British Isles. Not content with that first round of disruption, the snow returned just before Christmas, causing even more cancelations and delays than the first time as major hubs across Europe were severely affected by heavy snowfall.
London’s Heathrow gained notoriety after it took two days to clear the snow and reopen one of its runways. The second runway was closed for almost four days. Inside the terminals, passengers were forced to sleep on the floor due to a shortage of hotel rooms, whilst lots more were stopped from coming through the doors at all. Heathrow’s passenger handling has been called into question with U.K. ministers demanding answers and Prime Minister David Cameron expressing frustration at the airport’s closure.
The European Commission also stepped into the fray to criticize European airports over the handling of the snow disruptions, stating that the airports “must get serious” about planning for these kind of severe weather conditions. The EC accused airports of under-investment in snow clearing equipment. BAA, Heathrow’s owner, has been widely attacked after it emerged that just £500,000 was spent on upgrading its equipment this year.
Throughout the year, government support for various elements of the air transport industry were in the crosshairs. This year, the World Trade Organization issued a final verdict on the case the U.S. brought against Europe over illegal state-aid provided to Airbus and also a preliminary verdict on the counter-case filed by the European Union against the U.S. and support of Boeing.
But the story doesn’t end there. U.S. and European airlines went on the offensive on export credit agency loan support to buyers of Airbus and Boeing aircraft. They complain that rivals, such as the high-growth Middle East carriers, are receiving unfair support because of the preferential loan terms the ECAs offer. By December, an OECD task force created a new set of rules for ECAs to mitigate the subsidy effect, although some of the network carriers are still not happy with what was accomplished.
Have we missed something? What did you think was big in 2010? Tell me by posting a comment below, or tweet me at @avweekrupa