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ExpressJet Creates New Corporate Jet Venture October 17, 2006

Posted by Andrew in Commercial Aviation, Continental, ExpressJet.
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ExpressJet, a former unit of Continental Airlines, announced today that it was converting ten of its aircraft into corporate configurations to serve the burgeoning private jet market. ExpressJet Corporate Aviation, the new unit of ExpressJet, is slated to begin operation in December 2006 with Embraer 145XR aircraft. The carrier plans to invest $5 to $6 million into its new corporate division. ExpressJet boasts that the refitted aircraft will come replete with amentities like satellite radio, but without the delays that plague mainstream commercial air travel. Some analysts see this move as a natural decision to diversify the carrier’s interests, particularly since “Continental canceled [their] capacity purchase agreement” with Expressjet. Saddled with sixty-nine aircraft and no future partner, ExpressJet is exploring offers with other legacy carriers. A decision on plans for the remaining aircraft will come at a November 9 shareholder conference.

Source: Reuters

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Emirates to Order Planes to Account for A380 Delays October 12, 2006

Posted by Andrew in Airbus, Commercial Aviation, Emirates.
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Emirates Airlines said that it was looking into purchasing aircraft to make up for Airbus A380 delays. The carrier, which placed a $15 billion order for 43 A380 aircraft, will not receive an aircraft until August 2008. According to original plans, Airbus planned to deliver eighteen A380 aircraft to Emirates by the end of 2008. Seeking to make up for the lack of capacity, Emirates is evaluating deals from both Airbus and Boeing to fulfill their short-term needs. The carrier made no indication whether it had a preference for either manufacturer, but Tim Clark, Emirates CEO, said “We will acquire more aircraft, if we can, to fill the gap and we have teams of people actively involved in that.” Aside from leasing, it is not clear whether Emirates can receive new a substantial number of widebody aircraft before the delivery of the first A380. The Boeing 777 family is heavily booked for the coming years, while the inferior economics of the A340 family have made it less popular in light of high jet-fuel prices.

Source: Reuters

Irish Ryanair Announces Surprise Bid for Aer Lingus October 5, 2006

Posted by Andrew in Aer Lingus, British Airways, Commercial Aviation, Ryanair.
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For the past few weeks, the difficulties at Airbus have dominated commercial aviation news. Ryanair, known for its cheaps fares and no-frills policies, shocked the world airline industry this morning by announcing a takeover of Irish flag carrier Aer Lingus. This move marks the first time a low-cost carrier has sought to takeover a competitor with trans-Atlantic operations. Aer Lingus’ board rejected the offer, claiming that the $1.9 billion offer “undervalued the group’s business and long-term growth potential.” Ryanair CEO Michael O’Leary visited European news outlets this morning, praising the possible fusion of the two airlines as ” a unique opportunity to form one strong airline group for Ireland and for European consumers.” Initially, if the hostile takeover occurs, he said that the two carriers would maintain seperate entities under a common parent. A few commercial aviation analysts have noted the deal would tranform “Ryanair, with a market value of 6.7 billion euros and cash resources to fund the purchase of some 2 billion euros, from being a pure “no-frills” carrier investment to one with network carrier exposure.” The combination of Aer Lingus and Ryanair would benefit Aer Lingus’ international operations tremendously. Aer Lingus would gain instant access to 50 million passengers, most of whom funnel through Dublin, a major hub for both Aer Lingus and Ryanair. British Airways and other European carriers are the most affected by the proposed Irish synergy, as Aer Lingus will likely be converted into a more capable international competitor with the extra passenger feed. On news of the announcement, the Irish government, a twenty-eight percent shareholder in Aer Lingus, said that it would not sell its shares. Even though O’Leary has a history of criticizing the Irish government and Aer Lingus, O’Leary conceded that he would be content with having the government as a minority shareholder. Before approval, the deal must be investigated by the European Union. Industry insiders don’t expect any government interference, however.

Source: Reuters

Emirates, Other Airbus A380 Launch Customers Reconsider Orders October 3, 2006

Posted by Andrew in Airbus, Emirates, Lufthansa, Singapore Airlines, Virgin Atlantic.
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Emirates and a slew of other carriers are reviewing their options as they prepare for a detailed formal Airbus announcement today about more delays in the A380 program. Emirates Airlines, which ordered 43 A380 aircraft, claims that the delivery of its aircraft will be delayed an additional ten months, with the first delivery in August 2008. On the delay, Emirates president Tim Clark remarked: “this is a very serious issue for Emirates and the company is now reviewing all its options.” One source claims that has Airbus has whittled the projected number of delivered aircraft in the first year from twenty-five to just two airplanes. Many aviation analysts expect a full disclosure of the problems plaguing the A380 program by Wednesday, one day after the EADS board meeting. Emirates is not the only airline affected by A380 delays. Singapore, Virgin Atlantic, and Lufthansa expect delays ranging from six months to over a year. The latest grumblings from Emirates are the strongest warning yet that a cancellation of orders is a possibility. The carrier will likely use the latest delays as a way to negotiate compensation payments or better prices from Airbus. Furthermore, some analysts believe that Emirates may cancel some or all of its order with Airbus for the A380 aircraft. According to a Reuter’s report, “with U.S. airlines still in financial turmoil, the Gulf is one of the big markets to capture along with low-cost carriers in Asia and a cancellation from Emirates would be a potentially serious blow in money and prestige for Europe’s jetmaker.” Emirates, which has publicly stated that the A380 is at the core of this strategy, can afford few more delays. With the turmoil at Airbus, Boeing has reportedly stepped up its efforts to sell its slightly enlarged, updated 747-800 aircraft. Although not a direct competitor to the A380 aircraft, it will fit a niche between the current generation of 747’s and the A380. Deliveries of the Boeing 747-800 are expected to begin in 2010. As Boeing seeks to capitalize on Airbus’ mistakes, the European giant is slated to undergo massive restructuring. With manufacturing and engineering operations being shifted between Germany and France, Airbus is trying to lift itself from the doldrums.

Source: Reuters