Aer Lingus defends directors’ pay as Ryanair seeks cut

By David Kaminski-Morrow

Aer Lingus is urging shareholders to vote against a proposal by Ryanair to cut directors’ pay at the Irish flag-carrier’s upcoming annual general meeting.

Ryanair, a major shareholder in Aer Lingus, is to propose on 5 June that the non-executive chairman’s salary be cut to €35,000 from €175,000 in 2007, stating that this cut would take the pay figure “back to the amount earned by the previous non-executive chairman in 2006”.

It will also propose that non-executive directors’ pay be cut from €45,000 to €17,500.

Future increases in the remuneration of both, the proposal adds, should not exceed the “general level of pay increase” agreed between Aer Lingus and its employees.

Aer Lingus, which has recently posted poor financial figures, says the board voluntarily reduced by 20% their 2009 salaries – paid through directors’ fees – to €36,000 for directors and €140,000 for the chairman.

It insists these payments are “reasonable” given the “high level of board activity” and the increase in directors’ responsibilities since the airline’s initial public offering.

Cessna mates wing and fuselage of third CJ4

By Kate Sarsfield

Cessna has mated the wing and fuselage of the third Citation CJ4 production conforming aircraft – the first of the six-seat light jet types to be assembled with production tooling on the new assembly line.

Three aircraft, a prototype and serial numbers 001 and 002, have clocked up more than 800h of flight-testing to date and the $8.4 million aircraft is earmarked for certification later this year and service entry in early 2010.

© Cessna

“The Citation CJ4 joins the CJ1+, CJ2+ and CJ3 as part of one of the most popular families of business jets in production,” says Cessna. The original CitationJet was introduced in 1993 and the family of nearly 1,400 aircraft has amassed more than 2.1 million flight hours.

Mi-38 helicopter faces further delays

Russian Helicopters’ Mi-38 medium-lift utility helicopter is likely to be delayed for at least two years, due to a switch to locally made TV-7-117 engines from the originally intended Pratt & Whitney Canada PW127.

“The Mi-38 will be ready slightly later than they wished, in approximately two years. I think we will start selling it in 2012,” Oboronprom director Andrei Rus said on 14 May.

Russian Helicopters general director Andrei Shibitov, in a television interview with Russia Today, said the company blames political pressure from the USA for the stalling of a deal with P&WC to make the PW127 in Russia under licence.

“Our co-operation with P&WC has been frozen practically since last summer due to political factors,” Shibitov said. “As I understand it this was due to pressure from the USA. But both ourselves and P&WC are trying to resolve this. It’s held up the programme by around a year.”

P&WC has no comment other than “we are in discussions with the client”.

The two sides signed a groundbreaking deal last year in which Russia would have produced a PW127 variant under licence in Russia for the 30-seat, 5t-payload Mi-38, which is also capable of carrying external loads of up to 7t. At that time, the plan called for Russian certification of the PW127TS for 2011 and the Mi-38 to enter into service in 2012.

This would have been the first time Western turbine engines had been made under licence in Russia since the Rolls-Royce Nene was built for the Mikoyan MiG-15 in the late 1940s.

The delay is the latest in a string of hold-ups with the Mi-38, many of them associated with its foreign partners. The programme was initially a joint venture with Eurocopter called Euromil, but Eurocopter pulled out in the early stages over concerns about intellectual property right protection.

Air France-KLM, Delta see protection in transatlantic venture

By Victoria Moores

SkyTeam members Air France-KLM and Delta Air Lines believe their new transatlantic joint venture will strengthen their competitive and financial positions, shielding them from the economic downturn.

The long-term cost- and revenue-sharing venture covers 200 daily transatlantic flights to over 400 destinations in Europe and North America, representing 50,000 daily seats or 25% of total transatlantic capacity, with estimated revenues of over $12 billion.

Speaking during a media briefing to mark the signing of the agreement in Paris today, Air France chief Pierre-Henri Gourgeon said the joint venture would be a major strength for SkyTeam against its rival alliances.

“By optimising the use of our pooled resources, this joint venture will help us weather the current economic situation and protect our product offering,” he says.

Delta Air Lines chief Richard Anderson adds: “We will operate as a single business where we consensually develop our strategies, and share revenues and costs.”

Following the merger of Delta and Northwest Airlines, the partners say the single transatlantic venture was “the next logical business strategy”.

It extends to all flights between North America and Europe, Amsterdam and India, as well as between North America and Tahiti. A second tier to the agreement extends it to include services between North America and Africa, the Middle East and several Latin American countries.

Customers will benefit from the partnership through improved flight schedules, competitive fares and harmonised services, say the partners, while corporate clients will gain from a broader offering and more efficient account management.

Governance of the joint venture will be equally shared between the three carriers, but the partnership does not include any equity stake or the creation of a new subsidiary.

It will be led by an executive and management committee. The executive committee will comprise Gourgeon, Anderson and KLM chief Peter Hartman. The management committee will define the venture’s strategy, with representatives from marketing, network, sales, alliances, finance and operations.

Operational roll-out of the agreement will be overseen by 10 working groups, responsible for implementing and managing the venture’s network, revenue management, brand, product and other aspects.

The venture’s network will be structured around six main hubs – Amsterdam, Atlanta, Detroit, Minneapolis, New York JFK and Paris Charles de Gaulle – and four subsidiary hubs: Cincinnati, Lyon, Memphis and Salt Lake City.

Carriers’ brands will be combined in advertising and at all North American and European airports, and they will codeshare flights where possible. The deal is an ‘evergreen’ arrangement that can only be cancelled, with three years’ notice, after an initial 10-year term.

Thomsonfly 737 stalled on approach says UK accident report

By David Learmount

The airspeed of a Thomsonfly Boeing 737-300 on approach to Bournemouth airport, UK, dropped to 82kt (151km/h), the aircraft stalled, and the maximum pitch-up during the crew’s go-around manoeuvre was 44°, according to an Air Accidents Investigation Branch report. The crew recovered control of the aircraft successfully and landed safely from a second approach.

No crew or passengers were hurt in the 23 September 2007 incident. The AAIB says the main cause was that the crew allowed the airspeed to decay to 20kt below the approach reference speed of 135kt because they did not notice the autothrottle had disconnected for an unknown reason after it had reduced the engine power to idle thrust for the early descent.

The captain eventually noticed the low speed and took control, announcing a go-around just before the stall warning stick-shaker operated. The lowest altitude reached during the recovery manoeuvre was just above 1,500ft (460m).

The result of applying maximum power was that the engines exceeded their full power setting, causing a nose-up pitch moment that exceeded the elevator authority, although the captain had applied full nose-down pitch on the control column. The low approach speed had caused the autopilot to motor the horizontal stabiliser to a high nose-up trim setting, and the AAIB notes that aircraft’s quick reference handbook does not alert crews to the fact that trim may need to be applied to aid recovery from the stall or extreme attitudes.

One of the AAIB’s recommendations is that crew should be made aware of this need.

A contributory cause of the incident, according to the AAIB, is that the autothrottle disconnect light, which is not associated with an audible alert on 737 classic models such as this one, failed to attract the crew’s attention, and the agency recommends that Boeing, the US Federal Aviation Administration and the European Aviation Safety Agency should study whether the alert is sufficiently effective.

Fault on Embraer 170 leads to actuator redesign

By Leithen Francis

Actuators used to move the wing slats on Embraer 170s have been redesigned as a consequence of a fault discovered by airline operators in Australia and overseas.

The Australian Transport Safety Bureau (ATSB) says in a statement that since the fault has been discovered the slat actuator manufacturer has initiated a redesign of the actuator “to reduce torque trip and limiter engagement”.

Meanwhile, “the aircraft manufacturer has issued a new fault isolation task to address the fault and stop recurrence, it says.

The ATSB and Australian carrier Virgin Blue discovered the fault last year.

The bureau says on 10 August a Virgin Blue E-170, local registration VH-ZHA, was operating from Sydney to Melbourne with six crew and 54 passengers on board.

“During the approach into Melbourne, the flight crew selected the flaps to ‘flaps 1’ [but] when the selection was made, a number of caution messages including ‘slat fail’, ‘spoiler fault’, ‘aircraft operating angle of attack limit fail’ and ‘shaker anticipated’ appeared.”

“The flaps were cycled up and down, again with the caution messages reappearing.”

It says the pilots eventually landed the aircraft and an examination on the ground by the airline’s engineers “identified a slat jammed/under speed fault.”

“The appropriate fault isolation manual task was completed and it was found that the left side number-3 slat actuator torque trip limiter had actuated.”

The documentation “revealed that this usually occurs when the slats are operated in extremely cold conditions”.

It adds, the airline operator then contacted another E-170 operator overseas, that uses E-170s in cold climates, and that overseas operator “informed the operator of VH-ZHA that they experienced slat/flap failures weekly and at times daily.”

BMI majority owner launches legal action against Lufthansa

By Victoria Moores

German Star Alliance member Lufthansa‘s takeover of BMI seems to be turning sour, after a company owned by BMI’s major shareholder Sir Michael Bishop launched High Court action against the German Star Alliance carrier.

In October last year BMI chairman Bishop exercised a put option, forcing Lufthansa to acquire his full shareholding of 50% plus one share in BMI, under a deal which was agreed in 1999. Bishop holds his stake through an investment vehicle called the BBW partnership. The acquisition will give existing shareholder Lufthansa 80% control of the UK carrier. SAS owns the remaining 20%.

But the pace of the takeover has been slow and, over recent days, UK business daily The Times has reported an emerging a tussle between the two sides. It claims the dispute centres on whether Bishop should be required to recapitalise BMI.

In a brief statement, Bishop’s company says: “The BBW Partnership, controlling shareholder of BMI, has today issued proceedings in the High Court to declare that BBW has fulfilled all the necessary regulatory requirements to complete the sale of BMI to Lufthansa, and seek that Lufthansa be required to complete the acquisition of the shares.”

BMI posted a huge preliminary post-tax loss of almost £100 million ($138 million) for the year ended 31 December 2008, on a slight rise in revenue to £1.04 billion.

Swine flu drives 30% drop in traffic at Mexicana

By Brendan Sobie

Mexicana has seen its traffic fall by about 30% since the onset of the swine flu epidemic late last month.

A Mexicana spokeswoman says passenger traffic has been down 30% year-over-year since the beginning of the crisis.

In May of 2008, Grupo Mexicana carried 960,000 passengers, according to statistics from the Mexican DGAC. The group also carried 960,000 passengers in March 2009, the last month traffic data is available.

Mexicana began seeing a drop in demand in late April, prompting the carrier to cancel flights on a day-by-day basis. During the height of the epidemic in early May, Mexicana was cancelling roughly 50 flights per day. But in recent days demand has improved and the spokeswoman says the number of daily cancellations has been reduced.

While Mexicana has been cancelling flights every day it has not pulled out of any markets except those countries which closed its borders with Mexico. Four Latin American countries – Argentina, Cuba and Ecuador, Peru – banned flights to and from Mexico but Argentina, Ecuador and Peru have since lifted the restrictions.

The Mexicana spokeswoman says the carrier’s Buenos Aires service resumed on Monday. She says the only Grupo Mexicana route currently not operating is Mexico City-Havana as Cuba has still not yet lifted its ban on flights to Mexico.

Mexico’s other major carrier, Aeromexico, also has been cancelling flights on a day-by-day basis in response to slumping demand. But Aeromexico has not yet provided any information on how much traffic has fallen since the onset of the crisis or how many flights the carrier has been cancelling.

An Aeromexico spokeswoman says the carrier continues to serve all its markets and “we haven’t cancelled any destinations”.

She adds Aeromexico is resuming its Buenos Aires service today and resumed its service to Lima in Peru last weekend.

Early last week Mexico’s SCT announced it was working on an incentive package aimed at helping the country’s beleaguered airline industry. The SCT has not yet provided details on what kind of incentives it will offer but has said only airlines that do not have debts with the government and have sound medium to long-term business plans will be eligible.

The Mexicana spokeswoman says the carrier does not yet know the form or level of incentives. “Mexicana and Aeromexico are working on that face-to-face with the SCT,” she says. “We don’t know the details yet. They are working on it now.”

The SCT says the incentives are needed to help airlines cope with what it calls a “delicate juncture” for the industry. It points out Mexico’s carriers were already struggling to deal with the global economic downturn and the recent devaluation of the Mexican peso before the outbreak of swine flu, which has compounded the problems facing the country’s airlines.