February 24, 2022 - No. 12 In This Issue : Russian Civil Aerospace Spared from Sanctions So Far : Kenya Airways Eyes Downsizing Its Dreamliner & Embraer Fleets : P&WC Expands Options in Spare Engine Program ; Judge OKs Boeing settlement with investors over 737 Max : Wireless capable ruggedized laptops enhance maintenance capabilities : Boeing to have 15 aircraft conversion lines in China by end of 2022 : Fair: Emirates President Threatens Airbus & Boeing Russian Civil Aerospace Spared from Sanctions So Far As Russia sends troops into separatist areas of Ukraine, and facing the prospect of a full-scale invasion, the U.S. and its allies are beginning to target Russian entities with sanctions. From Defense One: The U.S. and its allies began sanctioning Russian officials and banks shortly after Russian tanks and equipment began pouring into Ukraine’s east once more following Putin’s Monday speech. “We’re implementing full blocking sanctions on two large Russian financial institutions: V.E.B. and their military bank,” President Biden said Tuesday. “And because of Russia’s actions, we’ve worked with Germany to ensure Nord Stream 2 will not—as I promised—will not move forward.” Biden also promised more to come should Russia escalate further inside Ukraine. – DEFENSE ONE We haven’t yet seen efforts by the Biden Administration or European governments to directly target Russia’s civil aerospace programs, which include both the Irkut MC-21 narrowbody airliner and the Irkut Superjet 100. Development of both of these aircraft began at a time before Putin adopted an aggressive posture to NATO and the United States, and both aircraft make use of a considerable amount of Western content. Sanctions could cripple the programs in the short term, though the Russian government is trying to redesign both aircraft to make them less reliant on foreign content. Western-built airliners from Airbus and Boeing also form the backbone of the Russian airline industry. There doesn’t seem to be any appetite at the moment to target what amounts to civilian infrastructure in Russia. Russian airlines are likely to continue to receive manufacturer support from Boeing and Airbus. Targeting both the MC-21 and Superjet 100 would also have limited utility since the Russian government is already moving toward making the programs resistant to sanctions. An embargo of engines, parts, or avionics systems would cause headaches in the short term but would not kill either program. https://dsm.forecastinternational.com/wordpress/2022/02/24/russian-civil-aerospace-spared-from-sanctions-so-far/ Kenya Airways Eyes Downsizing Its Dreamliner & Embraer Fleets Kenya Airways is reportedly looking at trimming its fleet of 787- Dreamliners by four aircraft and fleet of E190s by five aircraft. Nairobi-based Kenya Airways is eyeing cutting its fleet from 36 planes to 27. The as yet un-confirmed move is part of a broader turnaround strategy that aims to cut costs and rejuvenate the airline. Kenyan media report Kenya Airways' Boeing 787-8 and Embraer E190-100ARs fleets are set to shrink. Kenya Airways Dreamliner & Embraer fleets set to shrink Embattled Kenya Airways enlisted the London-based Steer Group to put together a turnaround plan last year. Kenya Airways posted a US$333 million loss in 2020 (2021 numbers are yet to be released), but its financial woes predate COVID-19. The airline has been insolvent for 10 years. “Kenya Airways has come up with short, medium, and long-term strategies to help in realizing two main objectives. The first is to survive the current depressed market, and the second is to implement strategies that will make the business more sustainable in the long term," said Kenya Airways CEO Allan Kilavuka last May. According to Kenya's Star newspaper, the Steer Group has finished its turnaround plan and during a meeting between the consultancy and airline executives, the prospect of trimming Kenya Airways' fleet was raised. Notably, if planes go, so will jobs - further reducing costs at the airline. Kenya Airways is reportedly eyeing cutting is Embraer E190 fleet from 15 to 10 planes. Kenya Airlines Chairman says nothing is yet decided After substantial job losses already at the airline, the Kenya Airline Pilots Association (KALPA) and the Kenya Aviation Workers Union (KAWU) are not in favor of further job cuts. “Nothing has been decided,’’ Kenya Airways Chairman Michael Joseph told the newspaper. But sources at that meeting told The Star the airline was eyeing trimming its Boeing 787-8 back to five planes and cutting its Embraer E190 fleet to ten planes. Kenya Airways currently has nine Dreamliners and 15 Embraers - meaning a fleet reduction of nine planes. In addition to those two aircraft types, Kenya Airways also flies a dozen Boeing 737s, including eight B737-800s, two B737-700s (both parked), and two B737-300(SF)s. There is no move to cull the Boeing 737 fleet. The overall fleet is a mix of 17 owned and 19 leased jets. Nine of the Embraers are owned while six are leased. Six of the Dreamliners are owned while three are leased. Breaking leases might cause ripples among lessors but isn't an insurmountable problem. With only three 787-8s leased, one would need to be sold - a tougher ask. Consultancy says they put forward a range of options Steer Group says its task at Kenya Airways was to develop the least-cost option for the airlines' largest shareholder, the Government of Kenya. "Steer's responsibility was to advise the client on the different options for the airline's future, providing a reasoned and quantified analysis. The possibilities considered ranged from continuing business as usual to restructuring options to complete closure of the airline," the consultancy says. "We developed recommendations for the preferred option based on impacts on the airline, government finances, and the Kenyan economy." Kenyan Government plans to privatize Kenya Airways went nowhere. Instead, the Government continues to tip funds into the airline as it struggles to pay for ongoing operational costs such as salaries, aircraft maintenance, and aeronautical fees. As well as absorbing debt, the Kenyan Government is contributing nearly US$800 million in the 12 months to June 30, 2022, to keep Kenya Airways in the air. https://simpleflying.com/kenya-airways-downsizing-dreamliner-embraer-fleets/ P&WC Expands Options in Spare Engine Program Pratt & Whitney Canada (P&WC) has added a lease-to-own option to its Spare Engine Solutions program. Under lease-to-own, customers can lease a new or used P&WC turbine, turboprop, or turboshaft engine and own it by the end of the lease term. It’s one of four options in P&WC’s spare engine program intended to offer customers ways to prioritize their spending, reduce costs, better plan their monthly expenses, and extend aircraft life, according to P&WC. Created in 2020, the spare engine program also offers long-term leasing, on-wing leasing, and short-term engine rental. Long-term leasing offers terms of 12 months or more and equips the customer with a spare engine under the latest configuration. On-wing leasing entails the leasing of an engine that remains on-wing. In some instances, the company will purchase the customer’s existing engine and lease one back to them, which lowers their operating expenses and extends the life of their aircraft. The program also offers a short-term rental option for customers whose engine is in the shop for scheduled or unscheduled maintenance. “We are expanding our Spare Engine Solutions portfolio because more and more of our customers seek new ways to conserve cash and spur operational efficiency,” said P&WC v-p of customer service Irene Makris. “Our new leasing and ownership models serve customers who want alternatives that align with their individual situation.” https://www.ainonline.com/aviation-news/business-aviation/2022-02-23/pwc-expands-options-spare-engine-program Judge OKs Boeing settlement with investors over 737 Max DALLAS (AP) — A judge has approved a $237.5 million settlement of a lawsuit in which Boeing investors accused company board members of failing to properly oversee safety issues around the 737 Max before two of the planes crashed, killing 346 people. The investors filed the so-called derivative lawsuit on behalf of Boeing. Insurers for several current and former Boeing directors will pay the settlement to Boeing. New York State Comptroller Thomas DiNapoli, representing two funds that sued Boeing, said the settlement included needed safety reforms such as a method for employees to raise concerns and adding a board member with aviation or safety experience. “We hope this settlement will help safeguard Boeing and the flying public against future catastrophe and protect shareholders’ long-term investments in the company,” he said. The settlement, which was reached in November, was approved Wednesday by a court in Delaware. Boeing and two of its subcontractors also face lawsuits by families of passengers who died in the 2018 and 2019 crashes. On Thursday, one of those families asked a federal judge in Chicago to add Boeing CEO David Calhoun and former CEO Dennis Muilenburg as defendants. A lawyer for the parents of 24-year-old Samya Stumo said the executives have not been held accountable or acknowledged fault in connection with the second crash, which occurred five months after the first one. https://www.yahoo.com/news/judge-oks-boeing-settlement-investors-173732983.html Wireless capable ruggedized laptops enhance maintenance capabilities LUKE AIR FORCE BASE, Ariz. – Having readily available resources within arm’s reach could be the difference between mission success and mission failure. Through innovative thinking and implementing advanced technology, a workforce can find ways to save time, money, and manpower. The 56th Fighter Wing Program Integration Office seeks to meet this goal by providing Luke Air Force Base maintainers a new laptop they hope increases productivity, efficiency, and overall capabilities. “In July 2019, the F-35 Lightning II Joint Program Integration Office issued a wireless policy update pressing the need to generate sorties at relevant speed,” said Master Sgt. Felipe Pent, 56th Fighter Wing Program Integration Office superintendent. “The 56th PIO answered that call to action in October 2020 by purchasing 400 Rugged Extreme Business Laptops with wireless capabilities.” According to the PIO, the new laptops decreased the time between task completion and a maintainer’s ability to update the Autonomic Logistics Information System, a maintenance tracking system, in real time. “Lt. Col. Jason Bartels, 56th PIO chief, wanted to give maintainers the ability to access and update maintenance actions at the exact point of use,” said Pent. “The ability to wirelessly communicate with operations and maintenance systems, particularly [next to] the aircraft while on the ramp or in a hangar, will significantly improve our ability to keep the F-35 combat-ready.” Pent explained that the distribution of these ruggedized laptops was not only a significant upgrade from the older units, but how the laptops seamlessly align with the base's ongoing flightline Non-Secure Internet Protocol Router Wi-Fi modernization project, which allows for reliable Wi-Fi connectivity on the flightline. “Combined with the NIPR Wi-Fi expansion project, the ruggedized laptop's portability gives Luke Air Force Base maintainers access to critical information [in real time],” said Pent. “Now systems, such as the Autonomic Logistics Information System, are being updated at the point of use. This reduces turn times and increases aircraft ability rates as well as connectivity for flightline maintainers.” U.S. Air Force leadership visited Luke maintainers, communications squadron members, and representatives from the 56th PIO to observe the implementation and demonstration of these new laptops. “This was an incredible visit, the leadership team within the 56th Maintenance Group is working tirelessly to ensure their maintainers not only have persistent connectivity across the flightline, but recently secured an updated ruggedized Dell Latitude 7424 laptop,” said Lt. Col. Yogi Lebby, U.S. Air Force Logistics Directorate Maintenance Division chief of advance concepts. “This new laptop is a huge update to the previous version and provides maintainers not only an opportunity to wirelessly connect on the flightline, but introduces a sleeker, newly designed laptop over its predecessor. While touring the flightline, maintainer after maintainer [who were] using the new laptops raved on their capability and are excited for other innovation technologies coming to the 56th” Prior to the wireless capable laptops being implemented, flightline personnel had to leave their immediate work area to update maintenance tracking systems. “With the new laptops I am able to save time by completing my forms as I go,” said Staff Sgt. Tyler Viers, 308th Aircraft Maintenance Unit dedicated crew chief. “This saves four man-hours per week [per person]. Additionally, we are able to use our maintenance systems on the flightline to communicate with production superintendents that the jet is ready for the next flight. These new laptops not only accelerate change, but showcases innovation for the future.” https://www.aetc.af.mil/News/Article-Display/Article/2943954/wireless-capable-ruggedized-laptops-enhance-maintenance-capabilities/ Boeing to have 15 aircraft conversion lines in China by end of 2022 BEIJING, Feb. 24 (Xinhua) -- Boeing's total number of passenger-to-freighter aircraft conversion production lines in China will reach 15 by the end of this year, Boeing China said Thursday. Boeing and its local and global partners will facilitate the progress of the production lines for Boeing Converted Freighters (BCF) in China to meet growing market demands for freighters, according to Boeing China. By the end of this year, there will be 12 production lines for the 737-800BCF projects and three for 767-300BCF projects in the three Chinese cities of Guangzhou, Shanghai and Ji'nan. Boeing and ST Engineering have recently announced a plan to build additional capacity for the 767-300BCF, according to Boeing China. In the second half of this year, Boeing will add a 767-300BCF conversion line at ST Engineering's airframe facility in south China's Guangzhou. By then, the total number of conversion lines for 767-300BCF in China will reach three, Boeing China added. Last September, Boeing and Guangzhou Aircraft Maintenance Engineering Co., Ltd. announced plans to create two 767-300BCF conversion lines for converted freighters in Guangzhou. The 767-300BCF can carry up to 51.6 tonnes and fly up to 6,190 km. As part of the 767 freighter family, it offers strong performance on operating costs per trip, as well as payload and range capabilities. By now, the 767-300BCF project has received more than 100 orders and commitments from customers globally, data from Boeing China shows. According to the 2021 Boeing Commercial Market Outlook, the company forecasts a need for 1,720 converted freighters around the world over the next 20 years. https://english.news.cn/20220224/5f8e5a093e2746beb2df821f01d9aaaa/c.html Fair: Emirates President Threatens Airbus & Boeing Emirates President Tim Clark (understandably) isn’t happy with Airbus and Boeing, given the planes that the Dubai-based airline has on order. Unfortunately I’m not sure there’s a whole lot that he can do, given that global commercial aircraft manufacturing is essentially a duopoly. In this post: • The aircraft Emirates has on order • Emirates’ issues with future delivery aircraft • Bottom line • The aircraft Emirates has on order • Emirates currently operates a fleet of 250+ aircraft, consisting exclusively of Airbus A380 and Boeing 777 aircraft. With Airbus A380 production having ended, and current generation Boeing 777s more or less being outdated, the airline is looking to other aircraft for fleet renewals. Specifically, Emirates has ordered the following aircraft: • 50 Airbus A350-900s, with deliveries expected to start in 2023(ish) • 30 Boeing 787-9s, with deliveries expected to start in 2023(ish) • 115 Boeing 777Xs, with deliveries expected to start in 2024 (ish) • The problem is that at this point the delivery timeline for just about all Emirates future delivery aircraft is up in the air, and that poses a major issue. Emirates has 30 Boeing 787s on order Emirates’ issues with future delivery aircraft In an interview with Airline Ratings, Emirates President Tim Clark expressed frustration about all the planes that the airline has on order. What’s the problem? The biggest issue is with the Boeing 777X, since this will eventually become the backbone of Emirates’ fleet. Clark calls the current situation with Boeing “a complete mess.” Emirates was supposed to take delivery of its first 777X in April 2020, but that timeline has slipped significantly. Currently Boeing is hoping for the 777X to be certified by mid-2023. Clark isn’t too confident about the timeline. As he explains: “Honestly, if it goes beyond 2023 and it goes on for another year, we probably cancel the program. What else can we do? We can’t continue the way we are. Boeing really needs to get their act together and get this aircraft sorted. Don’t forget – the aircraft was originally designed for delivery in April 2020, it’s now 2024 if we are lucky. You’ve now got a four-year delay with the program. If they got another year on it, we are going to question if this is fit for purpose or not, what’s the problem with it? I hope it doesn’t happen, as there is nowhere else we could go. They are building the biggest aircraft and we want it. It was done at our request back in 2010, I don’t even want to think about it not being happening.” Emirates has a massive order for the Boeing 777X It’s one thing if it were just the 777X Emirates was having issues with, but the Boeing 787-9 isn’t much better. Boeing is now having Boeing 787 production issues, and the 737 MAX fiasco is only going to make certification of these planes more challenging. As Clark explains: “The total of 30 787s in there look very marginal now as they are so far behind in production. They were supposed to come in May 2023. But it’s not going to happen, how can they deliver? Look at the huge backlog, they haven’t produced any aircraft lately, that’ll take them two or three years to go over that. They got production and quality control issues that they admit, and now after the MAX crisis with the regulator saying ‘we want to have a good look at everything’, that is slowing the whole thing down.” Then there’s the Airbus A350 issue. Qatar Airways has been having major issues with the A350 fuselage degrading at an accelerated rate, and Emirates is concerned about this. As Clark describes the situation: “Fact is, it is an issue. I am not unsympathetic to Qatar Airways. We made it absolutely clear in Toulouse now that, if we have the same problem on one of our aircraft, we won’t take them over. Akbar Al Baker told me, not sure if it is true, that there were aircraft that hadn’t been delivered yet, that were also showing signs of that problem. Akbar is a bit like us, he probably learned from us that we will not accept anything but perfection. That’s not unreasonable, isn’t it? Our engineers looked at these A350s and said they are not in a good shape. So we say to Toulouse: By the delivery of the A350, you will have cracked this problem, otherwise, you will face us with no deliveries either.” Clark is one of the brightest guys in the industry. He has a great pulse on what’s going on, and I think he’s also incredibly reasonable. All of his concerns about Airbus and Boeing seem totally fair to me — these are very real issues. But when both aircraft manufacturers aren’t delivering on their promises, where else is Emirates supposed to turn? Emirates is concerned about Airbus A350 fuselage issues Bottom line It’s not a good time when it comes to future delivery wide body orders, between Boeing 787 production delays, concerns about Airbus A350 fuselages, and the Boeing 777X being delayed by years. Understandably Emirates is frustrated by this, given that these are the three aircraft the airline has on order. All of Clark’s statements are completely warranted and fair, especially for Boeing, which is having major issues with both of its wide bodies (the A350 issues, meanwhile, seem to be a bit more niche). I’m curious to see how this all plays out. https://onemileatatime.com/news/emirates-threatens-airbus-boeing/ Curt Lewis