UNIFIED EUROPEAN SKIES

On both sides of the Atlantic, airline industry is on high temprature due to the prospect of a new aviation agreement about to be signed between the United States and the European Union. The headline of the agreement is “Open Skies”, which means: any airline based in the U.S. could fly to any destination in the E.U., and vice versa.

There is a lot of background noise around this agreement, such like the joy of some U.S. airlines that could be landing at London Heathrow airport. But in my opinion, the real revolution lies in the new form that the European airline industry would be taking as a result of this agreement. For the last half a century, Europe has transformed itself from a cluster of independent, and sometimes hostile, nation states, to a de-facto federation, even if not as strong as the U.S. Of course, this is not the place to tell the story of Europe’s history, but the E.U. is in fact the historical outcome of political resolutions that were taken by this continent’s governments and peoples along recent decades. They have chosen to eradicate any economic barriers within Europe, making it a unified economic unit, and by that, it is believed, the political and ethnic barriers will be eradicated as well.

A unified economic unit? In all fields but one - aviation. The European states have agreed to give away almost every aspect of national economy, even the most simbolic one - the national currency, but would not give away the nationalistic system of airlines. This is why today, in 2007, we still have, in each state, one or more airlines that are considered “home” or “national” airlines, thus possesing extra priviliges in flying rights to and from this state: Air France in France; Lufthansa in Germany; iberia in Spain; British Airways and Virgin in U.K; etc.

When you think about it, it’s quite absurd. Europe is a single economic unit, and that’s a fact. There is no reason for a given airline, based anywhere in Europe, not to have the same rights everywhere in Europe. There is no reason for European states to have “national” airlines. European airlines should play just like U.S. airlines: American happen to have its hubs at Dallas and New York, while Delta at Atlanta and New York. If a year from now Delta will decide to move its hub from Atlanta to Austin, Texas, there is no rule that can prevent it from taking that step.

Of course, a change this big can not, and should not, happen within days. The E.U. should prepare a long term plan, about five years in length, at the end of which there will be no British, French or Italian airlines. There will exist only European airlines. It is almost certain that some of the airlines that we have known for many decades, such as Olympic or Alitalia, will disappear some time in this future, but with all the regrets, this is the right course.

The de-nationalization of the European airline industry should not happen because of an open-skies agreement with the U.S. It should take place because it is the best policy for a unified Europe.

THE FLEET CRISIS - PART 3

For the third week in a row I find myself writing on the subject of the unfolding crisis in the U.S. airlines’ aging fleets. Some of the events that took place this week have contributed to the feeling that something is terribly wrong in the world of U.S. airlines.

The week started with a special presentation from Boeing, describing the status of the 787 project. Still months away from its first flight, this airliner has already some 500(!) orders in its book, and counting. A day or two after that event, Airbus have celebrated the first two U.S. landings of its 380 super jumbo airliner in an ongoing stream of ceremonies and other PR initiatives.

Amid all of this taking place in America, the irony is that U.S. airlines are out of the game. Apart from Continental Airlines, which ordered some 787s, all of the other airlines don’t seem to get involved in the business of buying new planes.

That is why I was surprised to read this article, claiming that American Airlines is at last considering to renew its fleet of DC-9 \ MD-80 domestic jetliners, a fleet that in my opinion has become a visual manifestation of the fleet crisis as a whole. I sure wish all the best for AA on this one…

A GOOD WORD FOR CONTINENTAL

As I described in my previous entry, there is a developing crisis among most U.S. airlines concerning their aging fleet and the fact that it is not being renewed. Continental Airlines is the only U.S. airline that has ordered new generation planes for its international fleet - Boeing 787. Today I learned that CO has ordered even more of those presumably graet planes.

The good news from CO shed further light on the grim reality at Delta, American, United and the rest of the airlines. I just can not understand their approach to this matter. Even if they ordered new 787s today, they wouldn’t have fly those before 2014-15. By then, most of AA’s 767 fleet - the backbone of its international fleet - will be at least 30 years old.

Every living body needs its dead cells to be replaced by new ones. When that doesn’t happen, it means that the end of life is near. An airline the size of AA, UA or DL must be constantly in a state of fleet renovation, just like blood circulation. If such an airline doesn’t have enough cash or credit to buy new planes, sooner or later it will go out of business.

For U.S. Airlines, a Very Dark Cloud in the Horizon

Every week I go to Airport Business web site to get myself updated on recent aviation news. Amid the regular flow of stories on operational debacles on the part of airlines (such as this one, about another incident where passengers got stuck on a plane for more than 7 hours) I found one genuine important article, taken from the Wall Street Journal.

The article deals with the problematic situation concerning the aging fleet of most U.S. airlines. Out of the 6 major U.S. airlines, which flies trans-atlantic and\or trans-pacific routes, only 1 - Continental - has ordered new planes to renew its international fleet.

First of all, it is important to make a more accurate definition of the subject’s terms. Each one of those 6 airlines - American (AA), United (UA), Delta (DL), Continental (CO), Northwest (NW) and U.S. Airways (US) - operates in fact two fleets. One is an international fleet, which is based either on Boeing’s 767, 777 and 747 airliners or on Airbus’ 330 airliner (in NW and US); The other is a domestic fleet, based on Boeing’s MD-80, 737 and 757 or on Airbus’ 320. The international fleet is what differ those airlines from other U.S airlines that cater the domestics market only, like JetBlue, Airtran and Southwest.

The center of the crisis is the international fleet. The backbone of this fleet in AA, UA and DL is the 767, and most of these are getting close to 25 years old or even past this point. Although there are also much newer 777 in those fleets, they do not exist in great numbers, and in any case they are not always suitable to replace a 767 in terms of size and range.

The natural replacement for the masses of 767 is the 787, which is due to fly its first flight this year. But unfortunately for the U.S. airlines, the 787 came to be very popular among airlines from all over the world, and this popularity means that if you order a new plane today, it will be delivered to you somewhere in 2014. The U.S. airlines, which even the succesfull ones of them do not have much cash in their pockets, can only watch and see how the new airliner is becoming less and less available for them.

This issue is not a matter of luxury. To understand the seriousness of it, I would like to take you some 10 years back. Two airlines have suffered huge blows after their planes crashed. In 1996, an aging TWA 747 exploded while taking off from JFK airport in New York, killing all of its passengers and crew. Not long after that accident TWA was out of business. Two years after the TWA crash, a Swissair DC-10, after taking off from JFK, crashed in Nova Scotia, Canada, killing hundreds of passengers and crew. Some two years after the accident, Swissair went out of business (changing its name and becoming a part of Lufthansa).

An airial accident, crashing an aging airliner of one of the U.S. airlines, could be a death verdict to this carrier. The chances of that will be even higher if it turns out to be that a major factor in the crash was structural problems in the plane’s body, connecting it to the whole aging fleet. This is not a fictional scenario.

As of today, the gloomy situation in most U.S. international carriers is that at least for the next 10 years there is no relief in their fleets’ horizon, and the risk keeps geting higher.