Airbus abandons its 2022 commercial aircraft delivery goal

Airbus on Tuesday, December 6 abandoned a numerical forecast for jet deliveries and a date for its key production goal but maintained financial targets as it limped towards the end of a year haunted by disruption in factories and supply chains.

The world's largest planemaker said its previous target of "around 700" deliveries in 2022 was now out of reach but that it did not expect to fall "materially short" of the estimate. Reuters reported that the target was under review after November deliveries had fallen short of expectations.

Airbus also confirmed that it had delivered a net total of 563 aircraft between January and November after adjusting for the earlier cancellation of two jets caught up in Western sanctions against Russia over the Ukraine war. That included 68 in November, compared with what suppliers had described as an industrial planning target of 80.

Airbus abandons its 2022 commercial aircraft delivery goal

The announcement, originally due on December 8, was brought forward by two days. Jefferies analyst Chloe Lemarie said in a note to investors that she interpreted the new comments as pointing to around 680 potential deliveries in 2022.

The delivery crunch immediately set the stage for an uncertain production outlook next year. Once closely tied, production and deliveries have become disconnected since the pandemic hit demand and rippled through supply chains.

Airbus reaffirmed an interim production goal of 65 A320neo-family jets a month but withdrew its implementation date, saying instead it would adjust the speed of the ramp-up during 2023 and 2024. It said it still planned to reach an ultimate target of 75 such single-aisle jets a month but adjusted the deadline to the "middle of the decade" from 2025.

Airbus reaffirmed an interim production goal of 65 A320neo-family jets a month but withdrew its implementation date

Airbus had previously planned to reach 65 a month by early 2024, having pushed this back from mid-2023 earlier this year, when it also lowered its original forecast of "around 720" deliveries to the now discarded target of "around 700".

ALSO READ - Airbus reports growth in Q3, eyes to deliver 700 aircraft

The downgrades partly follow a stand-off between Airbus and engine markers over supplies. Engine makers are juggling the demand for new jets with the maintenance of existing fleets. That led to what one person involved described as tough negotiations, though executives also highlight wider shortages.

The downgrades are also a disappointment for Airbus chief executive Guillaume Faury, who has emphasized transparency in production goals, especially the later target of 75 a month, in a bid to shore up supplier support for investments in higher output.

Airbus is however expected to argue that it faces exceptional uncertainty this year, and Faury said last week that the environment "remains very complex".

Airbus had previously planned to reach 65 a month by early 2024, having pushed this back from mid-2023 earlier this year

The rate of production of the A320neo and its rival, the Boeing 737, set the tempo for global supply chains and drive a large proportion of aerospace industry profits. Boeing is producing more slowly as it recovers from successive safety and pandemic demand crises.

Airbus has said it aims to end the current year at a production rate of 50 A320neo-family aircraft a month, compared with 60 before COVID-19. The speed of the production increase will depend in part on how many 2022 jet deliveries get pushed into 2023.

It is also linked to demand, with global airlines issuing upbeat comments on industry profitability next year.

Airbus is pushing buyers to take delivery of jets scheduled for this month, even though it has also started delaying further deliveries planned for 2023, some of which may spill into 2024.

Boeing is producing more slowly as it recovers from successive safety and pandemic demand crises.

Not all buyers are willing to cooperate. Sources have said some lessors are objecting to taking already-delayed jets in the last week of the year, fearing an immediate drop in their resale value when the valuation calendar trips over to 2023 in January.

Airbus meanwhile said it had booked 29 new orders and 14 cancellations in November. So far this year it has taken orders for 1,062 planes or a net total of 825 after adjusting for cancellations.

Boeing, which has been lagging on orders and deliveries so far this year, will issue new data next week.

Boeing’s production and certification struggles have been well-documented in recent months. However, the manufacturer recently announced an increase in production, and with an order backlog of almost 4,000 aircraft, this cannot come quickly enough. The vast majority of the delivery backlog is made up of Boeing 737 MAX aircraft, in addition to Boeing 787s and Boeing 777s.

Air India will refurbish its entire legacy wide-body fleet, comprising 27 Boeing B787-8 and 13 B777 aircraft, committing over USD 400 million for the project. This refurbishment will see a complete overhaul of existing cabin interiors, including the addition of the latest-generation seats and best-in-class inflight entertainment across all classes.

Air India, following its privatisation and under new owner, Tata Sons, has stepped up measures to get into a new avatar to take on rivals in the world's third-largest domestic aviation market. As the latest step in its makeover, the carrier plans to spend over USD 400 million to refurbish the cabin interiors.

ALSO READ - Air India starts discussing aircraft orders; to introduce a premium economy class in long-haul flights

In addition, the refurbishment will see the introduction of a Premium Economy cabin on both fleets. The First Class cabin will also be retained on the 777s.

The First Class cabin will also be retained on the 777s.

Air India has engaged London-based product design companies, JPA Design and Trendworks, which have produced designs for major brands including Taj Hotels, The Orient Express and Herman Miller International to assist with the cabin interior design elements of this refurbishment programme.

ALSO READ - DGCA asks Air India to repair its aircraft’s shabby interiors

The airline said it expected the first refurbished aircraft to enter service in mid-2024 due to regulatory and engineering preparation as well as the time required to manufacture seats.

"We are working closely with partners to accelerate the refit process as fast as possible and, in the meantime, leasing in at least 11 new widebody aircraft with brand new interiors to improve our offering at the earliest opportunity. Under our Vihaan.AI transformation program, Air India has committed to attain the highest standards of product and service befitting of a world class airline. We know that, at present, the cabin product on our 40 legacy widebody aircraft falls short of this standard. We are delighted to now publicly announce this significant investment on a complete interior refit, and we are confident that, when revealed, the new interiors will delight customers and show Air India in a new light."

Campbell Wilson, Managing Director and CEO, Air India

The Tata conglomerate had earlier indicated getting rid of the 'chalta hai' culture in its newly-acquired and once government-owned flag carrier Air India. It has roped in London-based brand and design consultancy firm Futurebrands to redraw Air India’s branding strategy, as the airline targets to become an airline of choice across the world, according to sources.

ALSO READ - Air India to undergo a brand makeover, hires London-based consultancy firm

Reportedly, among multiple strategies being considered is creating a new mascot for the airline as there is a thought that the current one of Maharajah has become outdated.

ALSO READ - Air India issues new grooming guidelines for Cabin Crew

Last month, Air India issued a circular of over 40 pages, instructing grooming requirements for all its crew members, including asking men to put on hair gel and mandating women to apply foundation and concealers matching their skin tone. After taking over Air India in January, Tata group advised the airline's cabin crew to wear minimum jewellery to avoid flight delays.

ALSO READ - Air India issues several guidelines to cabin crew to enhance on-time performance

Tata Group, which paid USD 2.2 billion to buy Air India back from the government, has a five-year transformation plan called Vihaan.AI -- Sanskrit for a new dawn.

ALSO READ - Air India unveils Vihaan.AI – a comprehensive 5-year transformation plan

Vihaan.AI is Air India's transformational roadmap to focus on dramatically growing both its network and fleet for five years developing a completely revamped customer proposition and improving reliability and on-time performance. As per the airliner, "Vihaan.AI is aimed at putting Air India on a path to sustained growth, profitability, and market leadership."

Air India is up against younger operators, with the likes of Akasa entering the market and Jet Airways aiming to return.

The Tatas-controlled airline has hired Sunil Suresh, a former MakeMyTrip executive, as a chief marketing officer and Colin Neubronner, who had earlier worked on the branding of Singapore Airlines and Jet Airways, as part of a new brand-building team.

While Tatas want to shake off the old look of Air India, which according to most had lost out on glamour to private airlines, the conglomerate is also merging Air India and Vistara to create India's second-biggest carrier.

ALSO READ - Air India becomes the most punctual airline in October in 8 years

Air India is up against younger operators, with the likes of Akasa Air entering the market and Jet Airways aiming to return. IndiGo, controlled by InterGlobe Aviation Ltd., dominates with its low-cost services, taking more than half of the domestic market. Air India aims to have a 30% share of India’s local and international passenger traffic in five years, versus about 9% now.

Aviation Minister Jyotiraditya Scindia on Wednesday, December 7 convened an important meeting with aviation stakeholders regarding passenger congestion at major airports in the country. During the meeting, Minister Scindia issued directions to the stakeholders to reduce congestion at airports during peak hours.

"Jyotiraditya Scindia held a meeting with the management of all major airports in connection with passengers congestion issues, in Delhi. Recently Mumbai and Delhi airports reported passenger in-convenience during peak hours," an official from MoCA told ANI. Senior officials from Central Industries Security Force (CISF), Immigration and airports attended the meeting.

"Held a detailed discussion with heads of all major Indian airports, CISF and Immigration officials on capacities deployed and those required at every point to process domestic and international passengers smoothly through the peak travel season.

Plans for peak-hour capacity based on passenger processing capacity at each major airport. Landing cards are to be distributed on board and filled up prior to arrival, so as to minimise queues at immigration counters. X-ray capacity for baggage to be assessed."

Jyotiraditya Scindia, Unon Minister fo Civil Aviation

Minister Jyotiraditya Scindia showed unhappiness during the meeting as the ministry receives several complaints through social media and calls regarding huge rush at airports during peak hours. In the meeting, Scindia issued instructions and plans to aviation stakeholders for smooth travel.

However, Scindia asked the security agency CISF and the airport management to provide adequate manpower to avoid overcrowding during peak hours.

Minister also directed airport operators to ensure adequate availability of wheelchairs for senior citizens and differently-abled. He also asked airport operators to ensure that every volunteer is on the ground for the ease of passengers and to ensure that there is enough staff on the ground.

https://twitter.com/JM_Scindia/status/1600452476695552000

"Capacity augmentation of security manpower and hand baggage screening. Longer-term technology-related upgrades for security and baggage drop-off processing," the minister said. According to sources, CISF raised the issue of a shortage of staff during the meeting here today.

Recently heavy congestion during peak hours has been reported in Delhi, Mumbai and Bangalore and unhappy passengers at Delhi airport tagged Aviation Minister on social media.

ALSO READ - Operations at Mumbai Airport hit by fibre cable damage

Due to glitches in the internet server at the Mumbai International Airport also faced a tough time for passengers last week in completing the check-in process for their flights and forcing airlines to issue boarding passes manually.

Recently heavy congestion during peak hours has been reported in Delhi, Mumbai and Bangalore and unhappy passengers at Delhi airport tagged Aviation Minister on social media.

Airlines are now “recommending” domestic passengers flying out of some places like Delhi to report for check-in three hours before flight departure time “due to heavy congestion at airport security.” Such is the rush that Delhi International Airport Ltd (DIAL) is asking airlines operating from T3 to shift some of their peak-hour flights to T1 and T2. And also reschedule some T3 departures to ease terminal woes.

Immigration, a sovereign function like security, has become a major pain point in Delhi and Mumbai, especially for foreigners who are now required to give biometrics on arrival. While the aviation ministry and airport operators did not comment on the immigration bottleneck, sources said “software upgrade that was to happen has so far not happened, leading to delays.” Manning of counters is also an issue at times.

Mr. Scindia also mentioned in Lok Sabha on Thursday, December 8 that civil aviation was one of the most affected sectors during the COVID-19 pandemic when all the planes were grounded.

Mr. Scindia also mentioned that civil aviation was one of the most affected sectors during the COVID-19 pandemic when all the planes were grounded.

Pre-Covid, he said, the highest number of passengers in India's history was 4.07 lakh on a single day in 2019 and the number was breached three days ago when 4.13 lakh passengers travelled by air on a single day.

"This speaks a lot about this government's, and the Prime Minister's priority -- the democratisation of civil aviation, increasing the breadth as well as depth in civil aviation," he said. This, he said, also brings up the issue of crowding at the airport.

"We have to understand the seasonability of civil aviation. The festive season is from October to February which is the peak season. Then comes the normal season which is from March to May and then the lean season of monsoon which is from June to September," he said. Replying to another question, Scindia said he would look into the issue of senior citizens facing inconvenience while transiting through Indian airports en route to their onward journey abroad.

IATA anticipates that the aviation industry will become profitable again in 2023 as airlines continue to reduce losses brought on by COVID-19 in 2022.

IATA (International Air Transport Association) is a global grouping of around 290 airlines.

According to industry group IATA, the global airline sector is anticipated to have a smaller loss of USD 6.9 billion in 2022, primarily as a result of higher passenger yields and cost management by carriers in the face of rising fuel prices.

The aviation sector is on the mend after being adversely affected by the coronavirus outbreak.

The estimated airline net loss for 2022 is $6.9 billion USD. Compared to losses of USD 42 billion and USD 137.7 billion in 2021 and 2020, respectively, this is a considerable improvement.

IATA reported that the global airline industry is anticipated to return to profitability in 2023 and generate a meagre net profit of USD 4.7 billion on Tuesday, December 6.

https://twitter.com/IATA/status/1600069105859678209

“We are on the right path... but still a long way to go.”

–General Willie Walsh, Director, IATA

IATA stated that stronger yields and solid cost control in the face of rising fuel prices are the main drivers of the improved outlook for 2023. Passenger yields are anticipated to increase by 8.4%. Because of that strength, passenger revenue growth is anticipated to increase by USD 438 billion (up from USD 239 billion in 2021).

There are many reasons to be positive about 2023 despite the economic difficulties. As long as the robust economic trend persists, lower oil price inflation and ongoing pent-up demand should assist to keep prices in check. With such small margins, however, even a slight change in any one of these factors has the potential to tip the scales in the wrong direction. The keys will be alertness and adaptability.

The majority of individuals are confident to travel despite the uncertain economic outlook

The sector has developed a strong ability to adapt to changes in the economy, and significant cost factors like fuel costs, and passenger preferences. This has been proven throughout the decade of increasing profitability that began with the global financial crisis of 2008 and ended with the pandemic.

The majority of individuals are confident to travel despite the uncertain economic outlook, and there is plenty of employment available.

The reinstatement of their ability to move freely is being embraced by passengers. According to a recent IATA survey of travellers in 11 different countries, approximately 70% are travelling equally as often as they were before the pandemic. While 85% of passengers are concerned about the state of the economy, 57% do not plan to reduce their trip frequency.

Airlines are predicted to report a loss of USD 10 billion in the Asia Pacific region this year, which is predicted to decrease to USD 6.6 billion in 2023.

The impact of China's zero COVID policy on travel, according to IATA, is a major hindrance for the Asia Pacific area. Performance in the region is greatly aided by lucrative air cargo markets, where it is the dominant player.

Also read: China lifts curbs on international flights; Trims quarantine time

IATA is optimistic about earnings, while CAPA (Centre for Asia Pacific Aviation) India believes that returning to profitability may be difficult given the ongoing external uncertainties, which may last for the majority of 2023.

The impact of China's zero COVID policy on travel is a major hindrance for the Asia Pacific area

Fuel prices, currency fluctuations, supply-chain problems, a potential recession, and geopolitical tensions, according to the report, will be the sector's biggest challenges in 2023.

“However, the financials are improving significantly is a relief and we expect top airlines around the globe to continue record profitability but overall industry financials may continue to be challenging.”

–CAPA India told CNBC-TV18

(Source: CNBC-TV18 & IATA)

GMR Airports (GAL), the airport business holding entity and a subsidiary of GMR Airports Infrastructure (formerly known as GMR Infrastructure) and NIIF (National Investment and Infrastructure Fund) announced a financial partnership for NIIF to invest in the equity capital of three airport projects. These include the greenfield international airports at Mopa, Goa and Bhogapuram, Andhra Pradesh.

The transaction envisages NIIF making a primary investment of INR 631 crore in the form of a Compulsory Convertible Debenture (CCD) in GMR Goa International Airport (GGIAL), a special purpose vehicle to run and operate the New Goa Airport. The transaction is subject to customary completion conditions & necessary approvals.

This investment shall be NIIF's first investment in an airport asset in the country and its first direct investment in the state of Goa.

NIIF and GMR Airports collaborate to invest INR 631 billion in 3 greenfield airports

GGIAL, in 2016, was awarded the concession to develop and operate a second airport in Goa on a Design-Build-Finance-Operate-and-Transfer (DBFOT) basis. Mopa airport is a greenfield airport PPP concession awarded by a state government.

The airport has already received an aerodrome license and upon commissioning, shall form part of the first dual-airport system in India alongside Dabolim airport. In the first phase, Mopa International Airport shall have a design capacity of handling up to 4.4 million passengers per annum, with an ultimate capacity of up to 40 million passengers per annum.

"It is a proud moment for GMR Group having developed Mopa Airport. Goa is the prime holiday destination in India and visited by travellers from across the world. We are confident that Mopa Airport will be a marquee airport in the country and shall add to the pride and economic development of the state. The Airports has been designed to capture the vibrancy and the essence of Goan culture. Our partnership with NIIF which will also extend to two more airports is a further testament of GMR's credibility as an Airport Infrastructure developer and the future of the Aviation industry in the country."

GBS Raju, Business Chairman - Airports, GMR Group

GMR Airports is the largest private airport operator in Asia and 2nd largest in the world with a passenger handling capacity of over 189 million annually. GMR Airports, a subsidiary of GMR Airports Infrastructure [formerly known as GMR Infrastructure] (GIL) has Groupe ADP as its strategic partner, which is holding a 49% stake.

GGIAL is promoted by GAL – one of the largest private-sector airport operators globally. GAL is a partnership between India’s GMR group and Groupe ADP (majority equity held by the French government). 

GAL has developed and operated airports in over nine countries and presently operates five airports, viz. Delhi, Hyderabad and Bidar airports in India, Kualanamu Airport in Medan, Indonesia and Mactan Cebu Airport in the Philippines. 

GMR Airports is the largest private airport operator in Asia and 2nd largest in the world with a passenger handling capacity of over 189 million annually.

In addition to Mopa International Airport, GAL is also developing the upcoming airports in Bhogapuram, Andhra Pradesh, and Crete, Greece and awaits the signing of the concession agreement of Nagpur airport, which is a brownfield project.

NIIFL is a government-led collaborative investment platform for international and Indian investors, managing over USD 4.3 billion of equity capital commitments across its three funds: Master Fund, Fund of Funds, and Strategic Opportunities Fund.

"NIIF believes that Mopa international airport will boost air connectivity to the state and provide strong tailwinds to the tourism linked economy of Goa. NIIF's Master Fund is India's largest infrastructure fund and has built a robust and well-diversified portfolio across ports & logistics, renewables, smart meters, roads and digital infrastructure. NIIF's investment in Mopa airport shall be the Master Fund's sixth investment and is a testament to our commitment to partner alongside reputed infrastructure developers, state governments and key stakeholders to fast-track the execution of the Government of India's ambitious National Infrastructure Pipeline. In line with the fund strategy, this investment complements the existing portfolio and is a first step for NIIF to expand its presence in the airport sector."

Vinod Giri, managing partner - Master Fund, NIIF

Last month, NIIF signed a memorandum of understanding (MoU) with Japan Bank for International Cooperation (JBIC) to promote Japanese investments in India. The partnership is aiming for an investment of USD 500 million to USD 700 million in a new bilateral India-Japan Fund (IJF), which will make equity investments in environmental preservation and low carbon emission strategies.

GMR Airports operates the Delhi Airport, which is the largest and fastest-growing airport in India. It also runs Hyderabad Airport. The company is also operating the renowned Mactan Cebu International Airport in Cebu, Philippines, in partnership with Megawide.

GMR Airports operates the Delhi Airport, which is the largest and fastest-growing airport in India. It also runs Hyderabad Airport.

Expanding its overseas footprint, GMR Airports, in collaboration with Angkasa Pura II (AP II), has recently bagged the development and operation rights of Kualanamu International Airport in Medan, Indonesia.

ALSO READ - GMR Airports officially took over the operations of Indonesia’s Medan airport

On a consolidated basis, GMR Airports Infrastructure's net revenue increased by 17% year-on-year to INR 1,126 crore in Q2FY23. It reported a net loss of INR 195 crore in Q2FY23 as against a net loss of INR 113 crore in Q1FY23 and a net loss of INR 502 crore in Q2FY22.

Shares of GMR Airports Infrastructure ended flat at INR 43.35 on Tuesday, 6 December 2022.

Boeing rolled out its last Boeing 747 from a plant in Washington state, ending a more than 50-year production run, on Tuesday, December 6.

https://twitter.com/BoeingAirplanes/status/1600371756627554319

Initial Days 

The jumbo jet made its debut in 1969, which was the largest commercial aircraft in the world and the first with two aisles. The first 747 was produced by more than 50,000 Boeing workers in less than 16 months. Since then, the company has finished 1,573 more. 

In December 1969, Boeing delivered the first 747 passenger jets to TWA and Pan Am, two airlines that no longer exist now. 

Boeing delivered its first B747 jets to Pan Am and TWA

The design of the 747 incorporated a second deck that extended from the cockpit back over the first third of the aircraft, giving it a prominent hump that gave the plane its nickname, the Whale. More elegantly, the 747 became known as the “Queen of the Skies”.

The 747 used to be the aircraft of choice for the famous, wealthy, and even royalty.

Many films have used the plane or set designed to resemble the first class lounge on its top deck, notably the 1973 James Bond classic "Live and Let Die".

Myriad Responsibilities 

The Boeing 747 has served in a variety of roles, including cargo plane, commercial aircraft, and the Air Force One presidential aircraft.

The 747 continues to be used as Air Force One, and two already-assembled aircraft are currently undergoing modifications to become the next iteration of the presidential aircraft. Due to delays, those planes won't be delivered for at least four years.

USA's Air Force One

It was huge enough to transport the Space Shuttle from landing strips in California to its launch location in Florida. Next week, Virgin Galactic plans to launch a brand-new type of spaceship that it will have carried aloft under its wing.

B747 transported the Space Shuttle for NASA

India's knot to Boeing 747

In 1971, Air India bought its first jumbo, and thus India's relationship with the 747 began.

https://twitter.com/airindiain/status/1424040189014335493

Despite the fact that Air India already operated an all-jet fleet at the time, this new addition solidified the company's status as a premium carrier.

For many years, the aircraft effectively supported the Indian diaspora by flying to important western locations like the UK, the US, and Canada. The aircraft was used on the most challenging routes.

An era is slowly but surely drawing to an end with only a few airlines still operating the 747 and only four more of the type remaining to be delivered. The deregistration of the aircraft by India's aviation authority, the DGCA, is a clear sign that the days of the jumbo jets are numbered and appears to be a final step in sealing the destiny of Air India's remaining Boeing 747 aircraft.

Also read: Four Air India Boeing 747s to be sold by UK-Based Skytech

Also read: DGCA deregisters Air India’s 4 Boeing 747 jumbo jets

Towards the end

Boeing had previously stated that it would discontinue producing the 747 in 2020, even in freighter form, as clients opted to purchase the more fuel-efficient 777 freighters or save money by converting previous 747 passenger aircraft into freighters. In 2019, even the rival Airbus discontinued the A380, its two-level jumbo jet.

Also read: End of the line for the “Queen of the skies”?

The last B747 leaves the Washington state manufacturing line on Tuesday, on its way to serve as a cargo plane

Boeing hasn't built a passenger version of the plane since it delivered the last one to Korean Airlines in 2017. The final 747 will be purchased by Atlas Air Worldwide Holdings, who will fly it for Swiss logistics provider Kuehne+Nagel. Before being delivered to Atlas in the early part of next year, Tuesday's final aircraft will be flown to another Boeing plant shop for finishing touches like painting and other smaller details. 

The final 747 will be purchased by Atlas Air Worldwide Holdings

Delta was the last American airline to use the 747 for passenger flights, ending its use in 2017. Its ongoing appeal was demonstrated by the fact that the last US 747 passenger flights, operated by both Delta and United, attracted sizable crowds of the plane's devotees.

According to Aviation Analytics Company Cirium, 44 passenger versions of the 747 are still in operation today. Lufthansa flies 25 of those, which is more than half of them. However, Cirium reports that there are still 314 B747 freighters in operation, many of which were originally employed as passenger planes before being converted to freighters.

After 53 years and more than 1,570 planes, the world bows the “Queen of the Skies” as it leaves the Washington state manufacturing line on Tuesday, on its way to serve as a cargo plane.