Monday, June 8, 2009

USAF Thunderbirds


From their fabled past to their storied present, the United States Air Force Air Demonstration Squadron is the premier demonstration squadron of the most elite air and space force the world has even known. They are the best of the best:U.S. Air Force professionals teamed together to present precision aerial maneuvers that exhibit the capabilities of modern, high performance aircraft and the high degree of professional skill required to operate those aircraft.

The demonstrations themselves are unimaginable before you see them and unforgettable afterwards, but that is only a small fraction of what this team represents. The Air Force is engaged in global operations every day, fighting the Global War on Terror, defending their homeland, providing strategic deterrence and giving their nation unparalleled global vigilance, reach and power.

This year, the Thunderbirds celebrate 56 years of representing the more than 500,000 Airmen, National Guardsmen and Reservists worldwide. Whether at home in Las Vegas or at an air show on the other side of the world, the team embodies the same pride, precision and professionalism required to achieve uncontested air dominance anywhere, anytime.
I was there to watch this team at Kansas City Air Show 2004.


Sunday, June 7, 2009

Boeing: Realising the 787 dream

Roughly a year ago, Boeing was fighting its way out of a production paralysis in 787 development, marked by parts shortages and design changes, along with a fight to regain control of the supply chain.
But even as the global credit crisis has hit the industry, design changes have begun to slow and Boeing's first flight-test Dreamliners have emerged from the nightmare, ready to perform.
In spring 2008, three of six flight-test aircraft were in final assembly. The programme was showing signs of forward motion, with a slate of milestones laid out for Boeing to regain credibility by demonstrating forward progress on a predefined timetable.
By 1 July 2008, then-787 programme general manager and vice-president Pat Shanahan said ZA001, the first flight-test 787, would have achieved power-on. Final assembly of ZA003 and ZA004 would be under way, and all first-flight hardware would be qualified and ready for first flight by the year-end.
While June saw power-on for ZA001, a major milestone in bringing the 787 to life, that month also brought news of a production mishap at the Global Aeronautica facility in Charleston, South Carolina, Boeing's 50/50 joint venture with Alenia Aeronautica. A contract employee's use of improper fasteners damaged the skin of the aircraft, resulting in a delay in delivery to Everett of the centre fuselage for ZA004.
By mid-summer, the aerospace community was gathering at Farnborough for the biennial air show. Boeing appeared confident, but had no target for final assembly to begin on its fourth 787 test aircraft and the programme chief was saying publicly he had yet to receive the brake-control monitoring software from Crane Aerospace, a unit of GE Aviation.
IMPROPER VERIFICATION
Behind the scenes, Boeing and Crane were struggling to complete the software because of improper verification conducted by Indian company HCL. Sources say the software, which was delivered to Everett prematurely, caused feedback loops that crippled the brake-control system in systems integration laboratory testing. Crane's budget for the programme ballooned more than 10 times after requiring massive upfront costs to straighten out the situation, say those directly involved in the software development.
The "blue label" brake-control software was delivered to Boeing in late October, with the formal "red label" version two weeks later. But by last February, Crane said a further redesign was required because of higher-than-expected brake temperatures interfering with remote data concentrator units restricting aircraft turnaround times in certain conditions.
As the summer drew to a close, ZA004 final assembly was under way, but Boeing's list of 787 challenges continued to grow, even as the pace of work on ZA001 was moving rapidly, but not swiftly enough to meet the end-of-the-year target. Assembly completion of Dreamliner One had slipped more than six weeks from its original target of late August to early October, pushing first flight forecasts into the early part of 2009.
As Boeing worked to correct highly scrutinised design and supply chain issues, it was dealt another blow when the airframer's largest labour union, the International Association of Machinists and Aerospace Workers, authorised a strike on 3 September, the second such sanction in three years. The 27,000-strong membership ground Boeing's commercial product lines to a halt for 57 days, disrupting not only the 787 schedule, but many airlines that were expecting new aircraft deliveries.
Within days of the machinists returning, Boeing announced it would not be able to meet its 2008 787 first flight date, blaming the strike, although the company had already been behind its revised schedule even before the action, say multiple programme sources.
The programme suffered yet another setback when it was revealed that roughly 3% of the fasteners installed across all aircraft, an amount numbering in the thousands, were improperly installed due to a poorly written specification. The 787 was grounded again, with production frozen until the fasteners in the critical locations could be removed and replaced. The latest problem reverberated through the supply chain, halting work on supplier structural sections while fasteners were replaced.
Across the factory, the 747-8 was suffering as resources were diverted towards the 787. Design changes on that aircraft were taking their toll on the supply chain's ability to keep up. Eventually, Boeing would be forced to delay the entry into service of its first 747-8 freighter by as much as six months.
LEADERSHIP SHAKE-UP
Along with a revision of its first 787 flight and delivery schedule to the second quarter of 2009 and the first quarter of 2010, respectively, Boeing shook up its leadership team, promoting programme manager Pat Shanahan, and replacing him with head of Missile Defense programmes Scott Fancher, who became vice-president and general manager of the 787 programme. Fancher served as Shanahan's number two when he was responsible for the company's Missile Defense programmes.
Shanahan was tasked to run all aircraft programmes in a significant realignment that included bringing the 787 under the Boeing Commercial Airplanes umbrella of oversight. Previously, it was its own entity and operated separately from the legacy programmes.
Shanahan replaced Carolyn Corvi, whose departure came as a significant surprise to those inside and outside Boeing. Industry analysts and programme staff expressed surprise at Corvi's premature departure, because she was a major engine of productivity and innovation for jetliner production at Boeing.
As 2008 drew to a close, the 787 was again a programme in transition - new leadership, production challenges and an uncertain economy lay ahead.
When 2009 arrived, Boeing was again finding its footing, preparing for the arrival of its fifth flight-test aircraft for final assembly. On 2 January, ZA001 left the 787 final assembly line in Building 40-26 for a spot two bays down for final fastener rework and systems testing. The aircraft was repowered-on at the end of January, signalling a restart of the push towards its first flight.
The early months of 2009 saw the arrival and the start of final assembly of the final two flight-test aircraft, ZA005 and ZA006.
The programme has been steadily gaining momentum since March, when all the aircraft systems were elevated to flight status. Boeing has found the aircraft systems performing beyond expectations, completing testing milestones faster than expected.
Programme leaders say the past two years have not only been devoted to production issues, but revising the design of many parts of the aircraft to improve systems maturity.
For example, in April, Boeing completed the factory gauntlet - the first of three closed-loop system testing phases - sooner than expected. ZA001 was run through a full simulated first flight profile with chief project pilot Mike Carriker at the controls.
"We were able to accomplish that testing in about half the time we had originally planned, demonstrating increasing maturity of the systems on the aircraft and reliability and repeatability of those systems," says Fancher.
Static test frame ZY997 completed all requirements in support of the first flight in late April as the limit load test that saw the test airframe's wings deflected about 5.2m (17ft) or 120-130% of maximum load.
After running the gauntlet and completing a series of gear swing tests, ZA001 left 40-24 and transitioned to the paint hangar for a comprehensive aqueous wash of its fuel tanks, to have final instrumentation installed and close out the wing tanks ahead of fuel tests.
Meanwhile, in early May, ZA001 left the confines of the paint hangar and officially moved to the fuel dock for fuel system testing and validation of the internal power distribution capability, which included the first start for the Hamilton Sundstrand auxiliary power unit two days ahead of schedule, says Fancher.
By late May, the aircraft moved from the fuel dock to the flight line for myriad tests, including the first electric start of a commercial engine on a commercial aircraft when, on 21 May, the twin Rolls-Royce Trent 1000 engines were spooled up.
Boeing is confident its flight-test programme will get under way this month, pointing to additional consolidation of preflight testing by shortening the final gauntlet testing, while expanding the intermediate gauntlet to meet its latest schedule commitment of flying the first 787 by the close of the second quarter.
CHALLENGING ROAD
For Boeing, the road ahead for the 787 is no less challenging than the path that brought the airframer to this point.
Boeing has laid out an ambitious six-aircraft flight-test plan - expected to start this month - to achieve US Federal Aviation Administration, European Aviation Safety Agency and Japanese JCAB certification by the first quarter of 2010.
Key to achieving certification in eight to nine months, as Boeing sees it, is a change in the methodology of its test campaign. The flight-test team has had 22 months of additional time to prepare for the 6,800h campaign, which was originally set to begin in August 2007.
Boeing's changes in flight-test methodology include recognising efficiency improvements it could introduce in advance. The amount of time allocated for flight-testing and for unknown contingencies or "discovery layups" is based on conservatively held assumptions from previous programmes.
"Where we do have an ability to change is how much time we take for planned layups and when we do ground tests," says Frank Rasor, 787 test programme manager.
Boeing believes it will save significant time by using prefabricated ice shapes rather than having to search for known icing conditions in flight. Also, it is using a pressure valve system for flight load survey, rather than the previous system that took 30 days to install during flight testing. The new system, including prefabricated pressure belts with internal electronics, reduces layup time to seven days.
Rasor says Boeing built in 15-20% additional margin into the flight test for "contingent testing, so that would include the availability of any airplane, any time".
In April, Boeing had submitted 2,280 compliance reports - nearly 60% of the total required by the FAA for certification under Part 25 regulations for the programme. Of the 3,900 "deliverables" required by the FAA, only 275 directly depend on data from flight-testing.
The company has six flight-test aircraft in various states of completion at its Everett facility and two further ground-test airframes for static and fatigue trials.
Static airframe ZY997 will undertake a robust test programme in the middle of 2009 to support flight testing. Full-scale ground testing will continue on ZY997 into the middle of 2009 to support flight-testing of the fatigue airframe, ZY998. Tests on the second airframe are supporting certification of the aircraft through 165,000 simulated cycles tested over three years to understand the long-term wear-and-tear on the aircraft.
Four of the six flight-test aircraft will be fitted with Trent 1000 engines, including ZA001, the first 787 to fly. These first four test aircraft will account for most of the programme's flight test hours, with 2,430 flight and 3,100 ground hours, respectively.
ZA002 will support systems testing, with ZA003 validating cabin architecture. ZA004 will validate range and performance, and aircraft three to six will all support 207-330min extended twin-engine operations certification.
Two additional flight-test aircraft, ZA005 and ZA006, will be powered by General Electric GEnx-1B engines for 670 flight and 600 ground test hours. Much of the testing for GEnx-1B certification will be done primarily by ZA005, which will be equipped with a full data systems and ZA006 will follow on with additional lightning protection tests.
POINT TO POINT PHILOSOPHY
When Boeing envisaged the 787, it created a mid-size aircraft that embodied the company's point-to-point philosophy underscored by unparalleled range at entry into service.
By bypassing traditional hubs, Boeing's belief is that the 787 could enlarge the number of direct city pairs offered by airlines.
Only one aircraft previously boasted such promises of ranges of more than 14,800km (8,000nm) in a first-generation technology package: Airbus's A380. Before its first flight, the A380 was 4-5t overweight. The excess growth represented less than 1% of the total maximum take-off weight of 560t, although operators were still disappointed at the loss of payload range, once estimated to be as many as 50 passengers.
For the 787, an aircraft with a 220,000kg (484,000lb) maximum take-off weight, less than half of the A380, every kilogram matters that much more.
Boeing recently acknowledged that the first aircraft would be overweight, but has never specified by how much. The first production 787, aircraft seven, is expected to begin final assembly in June, and will be weighed to determine both the baseline weight and the extent of the weight gain.
Despite the expected shortfall, Boeing is committed to the performance of its early aircraft. "The bottom line is, we think that with the first block of aircraft, we'll have aircraft that do the missions our customers need, and as we continue to improve on weight, aerodynamics and engine performance going forward, that will only improve," says Fancher.
Boeing now advertises the range of the 787-8 as 14,150-15,170km, a reduction of about 550km from the first touted of range of 14,800-15,720km.
Bernstein Research said in a recent report that the first production 787s would be as much as 8% overweight, resulting in a 10-15% shortfall in range, putting the aircraft performance closer to 12,760km.
But Boeing says: "The conclusion on range is inaccurate." It claims the 787-8's range is closer to 14,800km than 13,000km.
Aircraft seven will be the first to incorporate significant weight reduction into the design. Most of the changes focus on removing weight from the wing. A second early blockpoint change is planned around aircraft 20 that will feature "broader weight improvements, including wiring", says Fancher.
In recent months, customers have expressed doubt about the 787's ability to perform as first promised. Andres Conesa, chief executive of Aeromexico, said in February: "The expectation was that the aircraft could go all the way to Greece [from Mexico City]. It has changed. Today we don't know the final conditions." The distance between Mexico City and Athens is about 14,000km.
In March, Shanghai Airlines openly considered cancelling part of its 787 order as Chinese carriers were working to renegotiate with Boeing on their early delivery slots. The carrier's chairman, Zhou Chi, was quoted by Bloomberg as saying the aircraft did not "fully meet the quality Boeing touted earlier".
It was revealed in April that many of the early 787 operators, including the five Chinese airlines that helped launch the aircraft's namesake in 2004, delayed early deliveries, moving many early production aircraft into the hands of launch customer All Nippon Airways. Also, the first six test 787s originally bound for ANA, Delta Air Lines and Royal Air Maroc, were no longer scheduled for delivery.
Many industry watchers suggested that the significant increase in weight contributed to the change, although Boeing says some customers opted for production standard 787s because they would be available earlier than refurbished flight-test aircraft. The change in the Chinese delivery schedule was later confirmed in April by airlines, including China Southern, announcing a deferral of both 787 and A380 deliveries.
WEIGHT REDUCTION
For Boeing, much of the future 787 weight reduction depends on understanding how the aircraft performs in flight - information that will not be known fully until the flight-test programme is well under way.
Programme sources indicate that many of the full-scale structure tests Boeing has conducted revealed significant structural over-engineering, with some areas exceeding twice the required strength for certification.
"What we focus on is getting this aircraft given how it is performing, and how the weight case, how the loads are distributed across the aircraft once it is built and tested, where can we go and incorporate more efficient structure to take weight out," says Fancher. "[Weight reduction] tends to be very specific actions, not a parametric approach and that's where our focus is on the -9 and the -8 improvements going forward."
Engine suppliers R-R and GE have been able to make use of programme delays to improve the performance of their respective powerplants.
After many months of additional development, GE expects its GEnx-1B engine to be at spec at entry into service, with additional aerofoils, a revised low-pressure turbine, and improved durability of the combustor.
For the Trent 1000 engine, R-R had an even higher hill to climb, with an acknowledged 4-5% shortfall in fuel burn. The manufacturer now says it will deliver what it calls the Build 4A engine, expected to be flight-tested by year-end on ZA004.
Build 4A features a revised six-stage low-pressure turbine, higher aspect-ratio blades, relocation of the intermediate-pressure compressor bleed offtake ports, and improved aerodynamics on the fan outlet guide vanes.
All these improvements will bring the engine within 1% of target specific fuel consumption by entry into service, and exceed cruise SFC by 0.5%.
Without aerodynamic data and route proving trials that can be gained only in the forthcoming flight-test programme, many of these performance estimates fall within a reasonable, albeit speculative, analysis.
Yet the contribution of technologies such as trailing-edge variable camber, raked blended winglets, drooping ailerons and spoilers, laminar flow optimised engine nacelles and additional engine performance improvements, all leave open questions until real-world data can deliver a conclusive verdict on aircraft performance.
"In the long run, this will be an excellent aircraft," said Steven Udvar-Hazy, chief executive of Boeing's largest customer, International Lease Finance, in March. "But I pity the airlines that get the first ones. Obviously those aircraft will not be the same standard as those 787s later on."
HERCULEAN TASK
By all outward appearances, Boeing has left behind the production paralysis that marked the first two years of the 787 programme, giving way to the herculean task of ramping up for an ambitious 10-aircraft-a-month production rate by the end of 2012.
What Boeing sees now are the opening years of what could be a three-decade or an even longer road to delivering several thousand 787s. Boeing holds orders for 861 787s from 56 customers. The key now is getting those aircraft built and into their hands as quickly as possible.
With suppliers unprepared to meet schedule commitments during the early phases of production, Boeing was forced to perform "travelled work" that was originally intended to be performed by suppliers, but instead was shifted to final assembly and delivery in Everett.
Fancher recognises the obstacles in front of him, but is bullish about beating the challenges. "We've got plenty of condition of assembly to improve yet, plenty of travelled work to pull through the system to get to a fully stable production system, but we're on track to make that happen, and every day we're seeing stability spread deeper and deeper into the production system," says Fancher.
He cites the body joins for aircraft five and six as a significant point of progress for the programme, beating the planned 21-day span time by two and seven days, respectively.
But even with this marked improvement in progress, key areas of the supply chain raise significant misgivings about Boeing's ability to reach 10 aircraft a month by the end of 2012.
Boeing's ability to assemble and deliver one 787 every three days ultimately depends on its supply chain's ability to deliver one shipset at the same rate to final assembly.
Industry analysts cite integration times of more than 300 days for the centre fuselage section by Global Aeronautica in Charleston as a potential "bottleneck" for the production ramp-up.
Global Aeronautica, which began as a 50-50 joint venture between Alenia Aeronautica and Vought Aircraft Industries, became half owned by Boeing when it bought Vought's share in March 2008.
The facility, which receives structural elements from Alenia, Kawasaki and Fuji, is now a two-line, five-station pulsing production system, with room for a third line expected to be activated during the coming ramp-up.
Boeing is keeping a close watch on Charleston and is keenly aware that flow times at Global Aeronautica are a key to supporting the production ramp-up.
"We do a difficult body join there from a complexity standpoint, three elements of the aircraft coming together at the same time," says Fancher. "We are learning about that join, about the tooling and the tooling concepts that were used as a basis of the design at that station, and have seven improvement plans in place that I status every week, for improving the flow at that location."
Boeing chief executive Jim McNerney says: "We have taken more direct control of that factory, which I think has moved along process improvements significantly and we're making good progress there.
"While it has represented a bottleneck, we are confident that it won't as we meet our production schedule."
Despite Boeing's growing confidence in its production system, the company still expects to see changes in how responsibility of its supply chain is laid out.
"Now, [switching suppliers] does happen and clearly, as we go forward, we'll look at some rebalancing of work scope as we sort through where work is most efficiently and cost effectively done but, by and large, the focus is on helping our supply chain succeed, not moving the work in a rapid fashion [with travelled work]," says Fancher.
To guide the ramp-up, Boeing has created a command centre for the 787's global production, called the Production Integration Center. On 9 December 2008, the centre became fully "operational on day one, all over the world in some form or another", says Bob Noble, vice-president of 787 supplier management.
The idea of the centre, in one form or another, says Noble, was always in the plan to co-ordinate 787 production, although when the supply chain failed to meet the ambitious ramp-up, Boeing gave the green light for the centre in March 2008.
PAINFUL HISTORY
The centre's mission statement belies both the painful history and lessons that have been learned from the acute growing pains during early production. It is: "To provide situational awareness, early issue detection and real-time problem resolution for the 787 Dreamliner production system."
Noble says that he does not believe Boeing could have avoided the production problems with the production centre had it been established earlier, because the lessons learned helped to create the requirements for the centre itself.
"We were able to build the room...with a full understanding of our production system and our needs. So chances the are, if we tried to build something two or three years ago, we probably would not have done this. We probably would not have got it as right as this really feels like."
Noble says the integration centre was born out of a need "to take advantage of the night", adding that opportunities were often lost to get to grips with production issues that arose in the daytime in Japan or Italy when it was nighttime in Everett.
"You can lose a couple of days just getting a problem identified," says Noble.
The integration centre ties in Boeing's seven major structural partners and delves deeper into the sub-tiers of the global supply chain. The facility constantly monitors conditions around the world, ranging from floods, earthquakes and tornadoes to riots and, recently, swine flu.
Boeing openly acknowledges the challenge ahead, although it sees the integration centre as the centrepiece to taking production of the 787 to a streamlined 24/7 operation.
"Problems will continue to occur," says Noble. "Every programme will always have some kind of problem; the object here is to know it quickly and be able to resolve it quickly."
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BOEING CLOCKS IN FOR BUSY DAY
The underpinning of Boeing's 787 testing is based on efficient use of the 24h clock, ensuring that no part of the day is wasted. Three shifts support the aircraft.
Boeing envisages a day beginning at 06:00 with the arrival of the test crew, followed by a pre-flight briefing 30min later.
At 07:00, each of the six flight-test aircraft will be released back to the flight-test crew after undergoing maintenance or preparations overnight, beginning the 8h testing block. By 08:00, the 90min pre-flight briefings will be wrapping up and the aircraft will be in the sky by 09:00 for a typical 5h testing block. By 14:00, the aircraft will head back to base for a touchdown at 15:00, followed by 2h of post-test debrief.
After touchdown, the aircraft will be handed over for 16h of overnight maintenance and preparation by the second and third shifts, culminating in the aircraft's 07:00 release the following day, for the process to begin again.
Boeing then runs preliminary analyses of the data gathered during the day, running from 17:00 to 21:00.
Boeing's Production Integration Center at the company's Everett facility will also support the Seattle flight-test centre during the overnight schedule by co-ordinating maintenance routines overnight to ensure the aircraft are flying again by the next morning, says Bob Noble, vice-president of 787 supplier management.

Friday, May 22, 2009

Interview: AirAsia CEO Tony Fernandes

We are stuck inside a busy restaurant called "Taste of Asia"at Kuala Lumpur's low-cost terminal for 20 minutes. A crowd has gathered because a rock star is in the house; his name is Tony Fernandes.

All it takes is for one person to tentatively walk up to the AirAsia chief executive and ask for a photograph. Fernandes adjusts his trademark red cap, shakes the passenger's hand, puts his arm around him and smiles widely with a thumbs-up as the camera clicks. He then turns to the passenger and says: "Thank you for flying with us."

Within seconds, dozens of AirAsia passengers -on their way to destinations as disparate as Bandung in Indonesia and Brisbane in Australia -leave their food and surround him. They are waiting to have a snapshot taken with the man who made their trip affordable, and possible. The 45-year-old Malaysian happily obliges everyone.

Welcome to the world of Anthony Francis Fernandes. In 2001, the man who spent much of his youth studying in England and playing schoolboy rugby, got out of a great career in the music business to plunge into a dream of running an airline. He mortgaged his house and, together with some friends and investors, bought AirAsia. Back then it was then a moribund Malaysian operation that cost 1 ringgit ($0.28) and brought with it 40 million ringgit in debt and two Boeing 737-300 aircraft.

He proclaimed that he would start Asia's first proper low-cost operation, and met polite smiles and condescending nods. He was seen as a maverick, who would crash and burn trying to take on the Malaysian and Southeast Asian airline and airport establishment. He has proven everyone wrong.

AirAsia is now the region's largest low-cost operator, with a network of 122 routes covering more than 65 destinations. It has carried over 65 million passengers since its inception and grown its fleet to 80 aircraft. It has gone public, ordered 175 Airbus A320s, started associates in Indonesia and Thailand, and finally secured access to Singapore after overcoming various obstacles. Fernandes and AirAsia have also helped to start AirAsia X, a long-haul, low-cost airline that has 25 Airbus A330s on order and will imminently sign a deal for around 25 Airbus A350s.

"For the first time, in 2009, we really see AirAsia's true potential," he says with a satisfied grin. "I've had a lot more white hair in the process, but it has been worth it." Many still think he is a maverick, but they add the "visionary"tag to that. AirAsia has grown beyond anyone's imagination - except, perhaps, his own - and has arguably done more than any other to unite the 10 members of the Association of Southeast Asian Nations.

He adds: "AirAsia has gone from a sparkle in my eye, to thinking that this could work, and then believing that we have arrived. It affects many lives and economies in a positive sense. We are no longer just a Malaysian ­carrier; we are an Asean airline."

The evidence is in Kuala Lumpur's low-cost terminal (LCCT), a 20-minute drive from the main Kuala Lumpur International Airport. It does not have flashy restaurants or fountains, but it packs in the crowds.

Imagine Kuala Lumpur's old Pudu Raya bus station -which in its heyday had hundreds of passengers arriving every hour from all corners of Malaysia, and Singapore and Thailand -and you get the idea. Simply substitute the buses with aircraft and include accents from every Southeast Asian country, with the Chinese, Indian, English and Australian twang thrown in.

"We're the only brand to promote Asean. It is not just about price, we brought points together like never before. Bandung-Singapore, Kuala Lumpur-Banda Aceh; it was not this easy to travel around the region until we started doing it," he says. It involved building the business up, and then doing "a helluva lot of lobbying and presentations" to convince governments it was better to open their doors, instead of protecting their legacy carriers.

"Commerce, rather than governments, drives Asean. Countries will always want more want tourists and traffic. Asean governments realised they had to open up or always play second fiddle to China and India," says Fernandes. "When you're AirAsia, carrying 24 million people, airport chiefs and tourism ministers realise it doesn't help them to protect national airlines after we talk to them."

Singapore, Southeast Asia's main air hub, is a prime example. It did not allow him to start an associate in the country, but he continued to lobby the government and proved the airline's value through its Malaysian, Thai and Indonesian operations. He still does not have a Singapore-based carrier, but finally has access to the country. AirAsia flies to five cities in both Malaysia and Indonesia, two in Thailand, and there are more to come.

Much of the success stems from AirAsia's work culture, which stresses innovation, openness and a never-say-die attitude. Its offices have few physical barriers between desks, there are no titles on name cards and everyone is encouraged to use first names. Cabin crew are pushed to develop their own personality, instead of conforming to preconceived notions about their role, resulting in a relaxed onboard environment. The CEO sets the tone. Anyone can walk up to "Tony", exchange a high-five, and offer a suggestion or just grumble about football. Talk to almost any of the 6,000-strong AirAsia staff, and a strong sense of ownership is evident.

"We're still a small operation, despite growing so fast, and that means everyone is valuable. At the end of the day, I would rather have 6,000 brains working for me instead of just 10. We are always innovating and we never stand still, and that has helped us," says Fernandes. "If there is a good idea, it can be implemented very fast as there is little bureaucracy. If there is a bad idea, we can kill it really fast too. That is how we do things that others may not try."The informal culture also helpskeep costs down, ever-important to a low-cost carrier. There are few personal assistants, the executives do not have drivers and Fernandes does not have a posse when he travels.

AirAsia has made tough calls recently, paying $115 million to exit fuel hedges last year and unwinding interest rate swaps, related to aircraft term loans. The short-term pain will save money in the longer-run and "we won't have a noose around our necks going forward over this year", says Fernandes. "We had to think on our feet. People initially criticised us, but we turned out to be right. The company's culture allows us to move fast when it comes to making decisions like those." As a result, Air-Asia had a unit cost of 3.08 cents per ASK in 2008, 10% lower than the previous year. "That is the toughest part of the business and our margins are among the best in the world."

Retaining focus on the key business helps, and that remains serving markets within four hour's flying time of its three hubs. "I'm still scratching the surface in Southeast Asia," he says. "I'm still small in Thailand and Indonesia, relative to their population sizes, and we're eyeing joint-ventures in the Philippines and Vietnam. We've faced obstacles in Vietnam, but we are patient. It took us seven years to get Kuala Lumpur-Singapore, and a lot can change in Vietnam in the next five years."

India and China are next in his sights, but that is in tandem with AirAsia X, which will serve the markets four to eight hours out of Kuala Lumpur. These include destinations in Japan, South Korea, Australia, the United Arab Emirates, Bahrain, India and China.

Fernandes is not involved in AirAsia X's day-to-day operations, even though he gives a lot of input into its strategic direction. Walking up one of the airline's new A330s, which is about to take off for Melbourne, and meeting the passengers, he becomes animated. It is clear that this operation is close to his heart. After all, the long-haul operation was his original plan until former Ryanair executive Conor McCarthy, who became an AirAsia investor, persuaded him that the short-haul market had better prospects.

He admits it was the right move: "AirAsia X is a wonderful addition; it brings the brand to another level. Look, it is sexier flying to London and Melbourne than Bandung," says Fernandes. "But without AirAsia's short-haul market and the connectivity to Southeast Asia it offers, there would be no AirAsia X. That is why it will be hard for anyone else to emulate it. Look at Oasis Hong Kong - what else did they offer apart from flights to London? Is it any surprise that they had to shut down?"

Keeping AirAsia X as a separate company was a "clever step" that protects AirAsia, which has only a 16% stake in it, he adds. Aero Ventures, which Fernandes started with other prominent Malaysians and Air Canada's Robert Milton, owns 48% of the long-haul operation. The other investors are Richard Branson's Virgin Group (16%), Bahrain's Manara (10%) and Japan's Orix (10%). "We work on lots of things together, but we have not put down any money since we started it up. It is an independent business that derives its own cash and is profitable."

AirAsia itself, which listed on Bursa Malaysia in 2004, posted a net loss last year - but Fernandes says the first quarter of 2009 was profitable. Its shares have had a rough time on the Kuala Lumpur stock exchange and last year, when the price fell to around 0.80 ringgit, Fernandes and the other founders considered taking the airline private. They abandoned that plan after credit became tight. "We saw value in the price at the end of last year, and we still do, but we could not raise the money," he explains. Even if the average Malaysian shareholder may not see value, others could. Branson is mentioned as a possible investor, but when questioned about it Fernandes says with a laugh: "Ask Branson about that one!" Equity partnerships with other airlines, however, are a possibility if they bring tangible benefits.

"The world is a very small place. Will there be combinations between airlines? Sure. Will we consider something? Yes, if it makes sense. Air France-KLM is a good example of how something like that can work, but the combination must add value to shareholders. The reality is that many mergers are driven by ego or airline necessity but, truthfully, most have not done a good job of it."

Fernandes concedes he may have to step down if there is a change in ownership, but he insists it may not be too hard. "If someone else feels that they can do a better job, sure. One of the great things is to know your sell-by date. Many people in Asia cannot let go. You are not a good leader unless you have a succession plan." However, he adds with a grin: "I'm not looking to leave any time soon. There's still a lot to do."

Fernandes gets a kick out of overcoming challenges, and there are still plenty of them. The biggest, he says, are airport operators, in particular Malaysian Airports, which runs KLIA and the low-cost terminal. MAB has successfully lobbied the government, preventing AirAsia from building its own low-cost airport near Kuala Lumpur. Instead, it promised it would expand the LCCT by 2011. A visibly exasperated Fernandes points out that they made similar promises in the past and nothing happened. The existing low-cost terminal is already bursting at its seams.

"Airports are parasites and, in Asia, their pricing is not transparent. Low-cost carriers should not be levied the same fees as the full-service airlines. We bring in a lot more volume, and there is plenty of ancillary income - just look at how crowded the shops and restaurants in our terminal are," he says. "I am an aggressive entrepreneur, but Asian airports are slow to respond. If anything stops our growth, it is the airports. If we have to defer aircraft orders, it is because of them. They curb our potential"

If the airports meet his ambitions, he says the possibilities are mind-boggling. "Southwest Airlines has 400 aircraft and a market of 300 million. On top of that, in America, you can drive from one end to another and they have pretty good train services. We don't have that over here," Fernandes points out. "Air-Asia is in a playground of 600 million people in Asean. If you add India and China, the other key markets we can touch, you can easily add a billion people, maybe more. That is Air-Asia's potential, and we aim to get there."

PLAYING THE GAME

As a young boy, Tony Fernandes dreamt of representing Malaysia in the Olympics. He played rugby, hockey and cricket while studying in England, and now loves squash and football. It is hardly surprising AirAsia is involved in sports sponsorship. It partners the Williams Formula Oneteam and sponsors the shirts of English professional football referees. It also worked with Manchester United and considered shirt sponsorship.

West Ham United fan Fernandes, says: "As a low-cost carrier, we constantly battle the image that we are low-quality. Our involvement in F1 and professional football helps. F1 races take place in the cities that AirAsia X plans to fly to, and English football is popular in Asia and shown all over the world. We won't be able to carry 24 million passengers without marketing." AirAsia gets good value through these deals, says Fernandes, but he is coy on the cost: "Let's just say that those in F1 and football are very good at making money!"

CUSTOMER DIVERSITY

AirAsia's main customers are still those who could not previously afford to fly, but its passenger profile is changing as it adds destinations and increases brand awareness.

"The economically disadvantaged are there, and the main market is still the mass market -that will never change -but we are reaching markets that we never dreamt of," says Fernandes. "Goldman Sachs executives in Singapore, for example, are very happy that we opened up Singapore-Bandung as it allows them to them to meet clients in the Indonesian city. Our corporate business has gone up 400% because companies want to save money and, once they fly us, they don't want to change."

Fernandes' airline is transforming the perception of low-cost travel, giving rise to a diverse cross-section of passengers. The AirAsia chief executive says: "We show that low-cost does not mean low class. In the Jakarta-Kuala Lumpur flight, you'll find women with diamonds sitting beside maids. You could not see that before. That shows we're reaching everyone."

What does he think AirAsia means to its customers? "Nobody has really asked me that before," he says, pausing for the first time in the hour-long interview. "I think they are really proud to travel in an airline that came out of nowhere and provides a service that they did not have before. AirAsia made air travel possible for millions; it's their airline. Every day that I walk around the terminal, people come up and says thank you. If you run an airline, there is probably little more that will make you more happy."

Friday, May 15, 2009

Air New Zealand TV Commercial

Air New Zealand staff have nothing to hide


Air New Zealand has a great new television ad (above) featuring eight staff members who appear in nothing but body paint instead of their regular uniform. The airline's CEO Rob Fyfe also makes a cameo appearance.

The carrier says that the aim is to differentiate Air New Zealand from competitors "who levy additional charges if a passenger wants to simply check a bag or have a drink".

"Air New Zealand airfares have nothing to hide, with airfares including baggage allowances and refreshments," says the airline.

The behind the scenes video (below) is just as good, hear what the staff and crew said.

Friday, May 1, 2009

The Livery Design on Dragonair's 20th Anniversary Aircraft A330-343X

The spectacular work of art that is emblazoned across the length of Dragonair's 20th Anniversary Aircraft took a total of 14 months to realise, from design tender to completed image.The design brief called for an image that would raise a smile, be impactful, and convey the essence of Dragonair to those who saw it.And at the heart of this was a story that linked the greatness of the dragons in ancient Chinese culture with Dragonair's passion for service excellence today.The image also had to reflect the connections that Dragonair has helped built between Hong Kong and the world, especially the China Mainland.The artist whose design captured these requirements most effectively was Hong Kong-based illustrator Tania Willis. She found inspiration for the final design in a variety of sources, including the sophisticated patterns and colours of the folk-art paintings of Tianjin and Jinshan, the hills of Guilin, and the kite flyers on the beaches of Lantau at weekends.At the Airbus headquarters in Toulouse the design took shape on the Dragonair A330 following its conversion from a 2D design using special software. The design required 466 painted stencils to complete, almost double the number used on Airbus' previous most complex livery project.The result is the flying work of art that is Dragonair's 20th Anniversary Aircraft. You can also view my model of this plane at http://www.geocities.com/chewsengkeat or clickhere.



Sunday, April 26, 2009

Gulf Air: Playing catch up in Bahrain

The 6th Formula 1 Grand Prix of Bahrain this weekend is causing enormous excitement here in the Kingdom of Bahrain - and so it should. This small Gulf state is quietly proud to be the first country in the region to host one the world's greatest motor races.
The title sponsor of the race is home carrier Gulf Air, and its Swiss chief executive Bjorn Naf is outlining how far the airline has come in the past year or so.
Nobody is under any illusions that there is a lot of work to re-establish the Gulf Air brand, and make the carrier profitable. Describing Gulf Air's ambitious "realignment strategy" Naf notes: "We are trying to catch up from times when we have lost a little bit of market share, lost a little bit of our image."
Naf is seen below left with Gulf Air's chief people officer Ahmed Al Banna.
This involves a completely new fleet, starting with Airbus A320s replacing its older ones this year, and then the delivery of A330s and later the first of 24 Boeing 787s.
One of Gulf Air's frustrations has been an inconsistent in-flight experience across its fleet. "We are working on a new in-flight product - it will be rolled out this year," says Naf. "It is part of the plan we are setting out to bring Gulf Air back to its glory days."
But Naf knows going head-to-head with local rivals Emirates, Etihad and Qatar Airways is madness. The carrier is simply too far behind to do that.
So the message from Naf is Gulf Air will be "smarter, not bigger - we are not just looking to compete on size". It is "offering value, not excess".
"We will be a global premium carrier," says Naf. However, the first priority is to build its network to support business travel in the region and from Bahrain. This means making Bahrain the most convenient hub with fast connection times (30 minutes is promised) and making Gulf Air the carrier of choice with double-daily frequencies that allow a day's business at the leading Middle Eastern destinations.
The target is to offer a product that travellers within a flying time of 3.5 hours from Bahrain will select. After developing a network that does this Gulf Air then looks for the East-West transfer traffic that is so important to the region's big three. Naf describes the ability to offer these connections as a "byproduct of the network", but ranks its importance behind the regional mission.
In 2008 Gulf Air carried almost six million passengers. "If I can increase this on a steady base I'm sure we will become a profitable carrier," says Naf.
But like all carriers Gulf Air is feeling the pain from the global recession and seeing a shift in travellers from its premium cabin to economy. "We are challenged," he says. Traffic on its UK route for example is down while "India is obviously tanking, but it will come back". Gulf Air has suspended several Indian routes as it waits for India to rebound. It has shifting capacity to more profitable Middle Eastern routes.
"We are managing on a very tactical basis," says Naf.
For now, route expansion is on hold. "It is very risky and very costly to go into new markets, so therefore we rather increase freqencies in existing destinations," says Naf. "We will not open a new destination in 2009."
Gulf Air is also reviewing its short-term fleet needs. This includes deciding to only keep four Boeing 777s wet-leased from India's Jet Airways for six months and not extending the lease as originally thought. Then there is the decision over the future of its A340s. "We'll see how that goes, we may sell or sub-lease them," says Naf. "This is a very dynamic process, we are not there yet."
Naf doesn't have a magic wand, or unlimited funds to restore Gulf Air's fortunes overnight but here is one determined Swiss gentleman. As he says to his senior staff when he really wants a solution to a problem: "Fix it."
Visit Gulf Air website at www.gulfair.com.