Airline Profits - Volume II - Issue 9 - July-Aug 2016

Volume II—Issue 9

A Magazine for Aviation Leaders & Influencers

www.airlineprofits.com

FEATURED

Should Airlines Reconsider How They Generate Revenues?

More articles inside...

Record Profitability: Will African Airlines Ever Join the Feast?

Edition: July-August 2016

Norwegian Air: Is the US Outcry Justified?

Alaska Air-Virgin America: An Airline Alliance for the Best or the Worst?

Volume II—Issue 9

July-August 2016

Airline Profits

Contents 6

Editorial: Alask a Air -Virgin America: An Airline Alliance for the Best or the Worst?

12

Profile: Spir it Air lin es: W hat Did the Air lin e Profits Sustainability Index Reveal?

18

Perspective: Nor w egian Air : Is the US Outcry Justified?

24

Performance: Recor d Pr ofitability: Will African Airlines Ever Join the Feast?

30

Paradigm: Shou ld Air lin es Recon sider How They Generate Revenues?

36

Platform: The First CSeries Is Delivered: Will Bombardier Beat the Odds?

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3

HEAD OF PROGRAMS: Kofi Sonokpon

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July-August 2016

Volume II—Issue 9

Editorial Alaska Air-Virgin America: An Airline Alliance for the Best or the Worst?

Kofi Sonokpon editor@airlineprofits.com

Alaska Air Group, the parent company of Alaska Airlines acquired Virgin America for 2.6 billion US dollars in April 2016. As curious observers, we are all waiting to know and with varying level of interest, firstly whether the US Government will bless their alliance, secondly, will their integration work and last but not least, what will happen to Virgin America as a brand.

The Acquisition Was it for money?

On one hand, as far as finances are concerned, Virgin America posted increasing profits from 2013 to 2015, totalling US$ 0.4 billion. However, the financial performance since 2007 revealed

that the airline has lost a cumula-

We are all waiting to know and with varying level of anxiety, firstly whether the US Government will bless their alliance; secondly, will their integration work and last but not least what will happen to Virgin America as a brand.

tive US$ 0.22 billion, although revenues

grew

steadily

and

mulative profits of US$ 2.8 billion

the

reached a cumulative as high as

from 2006 to 2015 and average

potential of the former.

US$ 8.5 billion. Meanwhile aver-

operating and net margins were

age operating and net margins

respectively at 9.83% and 5.73%.

were respectively -25% and -14%.

immediate

money-making

Was it for compatibility?

Therefore, the acquisition of Vir-

On the other hand, Alaska Air

gin America by Alaska may not

Maybe and to

some

extent.

was performing better with cu-

have been necessarily driven by

On one hand, Virgin America has been recognized for their excep-

6

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Alaska Air and Virgin America Aircraft Tails. Photo Credit: Alaska Air

tional in-flight experience. As a

Therefore, Alaska Airlines and

matter of fact, the airline has won

Virgin America do have a few

several awards over consecutive

things in common. However, ac-

years, including a Skytrax 4 Stars.

cording to industry analysts, the

On the other hand, Alaska also has claimed the spot of the top airline in the US for customer service for consecutive years accord-

ing to JD Powers. Furthermore, both airlines have been recognized to be good employers.

two airlines are too different to form a compatible alliance, in terms of organizational culture and client base. With that said,

Virgin America does bring to the table a unique network, which will allow Alaska Air to become the largest west coast carrier.

The Merger Timeline According to the timeline issued, the Virgin America brand will

coexist with that of Alaska Air until 2018 when a single air operator certificate (AOC) is anticipated to be granted. In the meantime, travelers can continue to fly

either

airline

In

meantime,

the

as

usual. regulatory

approval of the transaction is expected no later than January 1, 2017.

Airline Profits

July-August 2016

Volume II—Issue 9

Airline Profits

July-August 2016

Volume II—Issue 9

Editorial

Brad Tilden and David Cush, re-

fifth mega US airline, after Delta

However, according to a recent

spectively Chairman and CEO of

Air Lines, Southwest Airlines,

report, Mr. Tilden may have

Alaska Air Group and President

United Airlines and American

reached an understanding that

and CEO of Virgin America will

Airlines, thus furthering the con-

they are probably better off

co-lead the integration of the air-

solidation of the American airline

by keeping Virgin America as a

lines into a single entity. The

industry. And that could be fig-

separate brand.

merged airline will retain the

uratively speaking considered as

name Alaska Airlines, will be led

a honeymoon, which everyone

by Brad Tilden and be headquar-

tends to agree to be the sweetest

tered in Seattle, Washington.

part of an alliance. The hardest

Beyond the Paperwork

part will then be the livingtogether as one entity or plainly

When finally approved as a

speaking the effective merger of

single air carrier, Alaska Air

two sets of cultures, values, pro-

and Virgin America will form the

cesses and systems.

8

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Therefore, we only hope that the team in charge of the implementation of this particular merger does it best to ensure a harmonious co-existence to employees and

a painless

customers.

transition

to

Time

“My favorite things in life don't cost any money. It's really clear that the most precious resource we all have is time.”

— Steve Jobs

Airline Profits

July-August 2016

Volume II—Issue 9

“ I try to be grateful for the abundance of the blessings that I have, for the journey that I'm on and to relish each day as a gift.

― James McGreevey

Airline Profits

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@AirlineProfits

Click on image to download or visit www.airlineprofits.com

Airline Profits

July-August 2016

Volume II—Issue 9

Profile Spirit Airlines: What Did the Airline Profits Sustainability Index Reveal?

In the previous edition of Airline Profits, we presented our first review of Copa Airlines based the Airline Profits Sustainability Index (APSI). This is an integrated metric, which takes into account three dimensions: People, Performance and Agility.

In this edition, we are presenting another airline review on the basis of the APSI: that of Spirit Airlines.

Our analysis covered a period of 10 years, starting 2006 through 2015. We have also considered pieces of information available

on Spirit Airlines website and other reputable sources such as Flightglobal at the time our review was conducted.

Based on the data available as of June 2016, our analysis revealed that on a scale of 1 to 10, Spirit Airlines has an Airline Profits Sustainability Index of 8.6.

Based on the data available as of June 2016, our analysis revealed that on a scale of 1 to 10, Spirit Airlines has an Airline Profits Sustainability Index of 8.6.

In the next few lines, we are going to offer a breakdown of this rating. However, let’s begin with a brief overview of the company by highlighting some key facts.

12

Creation and History

Company, his first transportation

Spirit Airlines started initially as Charter One in 1990. The tour operator

was

established

by

Ned Homfeld, a Michigan, visionary and serial entrepreneur who founded Clipper Trucking

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business at 23, while in college in the 1960s. The charter operation began in the early 1980s and started offering scheduled air services less than a decade later, in 1990.

A Spirit Airlines Airbus A319. Photo Credit: Spirit Airlines

After acquiring jet equipment,

industry, while at constant dollar

Business Model, Network and

two Convair 580s in 1992, Char-

-value contributed nearly 10% to

Fleet

ter One was renamed Spirit

the cumulative net profits of the

One of the world’s largest ultra-

Airlines and catered to several

industry over that period of time.

low-cost carrier, Spirit Airlines

niches in the leisure market.

Since then, Spirit Airlines expanded rapidly and became a well-established

ultra-low-cost

carrier and one of the most profitable airlines in the world.

As a matter of fact, from 2006 to 2015, Spirit Airlines consistently outperformed the world airline

Airline Profits

Obviously, that outstanding and steady financial performance comes in sharp contrast with the reputation Spirit Airlines has earned over that same period as the least customer-friendly among US air carriers and arguably the most controversial airline in terms of marketing and newsjacking.

July-August 2016

serves 57 destinations across the Americas, of which North America accounts for almost 60 percent.

Spirit Airlines operates an all-

Airbus fleet of over 80 aircraft inservice composed of mainly A320 along with A319 and A321. The current in-service fleet has an average age of 5.7 years.

Volume II—Issue 9

Airline Profits

July-August 2016

Volume II—Issue 9

Profile The airline also has over 90 air-

2006 to 2015.

craft on order.

calculation.

The Agility Index has a 15%

Ownership and Subsidiaries

People Index

weight in the overall APSI.

Spirit Airlines currently has a simple ownership structure: 100 percent of the equity is publicly traded.

Leadership, People and Opera-

The Airline Profits People Index is based on a scale of 1 to 10.

Summary

Spirit Airlines has a high People

Spirit Airlines’ Airline Profits

Index of 8.4. Five factors were

Sustainability Index of 8.6 is es-

considered in our calculation.

sentially driven by the Perfor-

tions The People Index has a 45% Spirit Airlines is currently led by

weight in the overall APSI.

mance Index, which in this case happens to be very high. This is

Robert Fornaro, in the role of

mainly due to the fact that over

President and Chief Executive

the past decade (2006-2015), Spir-

Officer, who replaced Ben Baldanza in January 2016. And as of 2015, the airline employed over 49,000 people. It is worth noting

that the time period covered in our analysis coincides with the span of time Ben Baldanza was

Performance Index The Airline Profits Performance Index is based on a scale of 1 to 10. Spirit Airlines has a very high Performance Index of 9.5.

years out of ten. In addition to that, the airline has posted above average operating and net profit

margins.

Five factors were considered in

With a high People index and

our calculation.

very high Performance indices,

President and CEO of Spirit AirThe Performance Index has a 40%

lines.

it Airlines was profitable ten

weight in the overall APSI.

our primary recommendation is that Spirit Airlines would do well

Headquartered in Miramar, Flor-

to focus on improving its Agility

ida, Spirit Airlines uses Fort

index.

Lauderdale International Airport as its main operational base.

Airline

Profits

Sustainability

Agility Index The Airline Profits Agility Index is based on a scale of 1 to 10.

Profile

Spirit Airlines has a relatively

As mentioned at the beginning of

high Agility Index of 7.0. Seven-

this review, our analysis covered

teen factors were considered in

a 10-year period ranging from

our calculation.

14

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Expectations

“High expectations are the key to everything.”

— Sam Walton

Airline Profits

July-August 2016

Volume II—Issue 9

“ The key to abundance is meeting limited circumstances with unlimited thoughts.

― Marianne Williamson

Airline Profits

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July-August 2016

Volume II—Issue 9

Perspective Norwegian Air: Is the US Outcry Justified?

Delta Air Lines, United Airlines and American Airlines have formed the Joint Carriers to prevent Norwegian Air International from flying to the USA. Last year, it was against the Gulf carriers, this year, the American outcry is against a European airline: Norwegian Air. Indeed, the flag carrier of Norway has set up a subsidiary in Ireland, in order to offer connecting flights to the USA.

This arrangement would allow them to take advantage of existing the Open Skies agreements between the USA and the Euro-

pean Union.

Ireland is known for its favorable business tax law. However, the protest against Norwegian Air International, the Irish subsidiary

US airlines alone have made US $ 44.1 billion in cumulative net profits over the past five years.

That represents some 57% of the financial results posted by the global airline industry. Around that same period of time, Norwegian Air was struggling to make profits, if any.

of Norwegian Air, is not about them taking advantage of a favorable fiscal environment but rather Ireland’s labour law. Ac-

cording to their US opponents, Norwegian

Air

International

would allegedly hire “cheaper flight crews” from Asia.

This practice will then allow

The outcry has since garnered

them to operate cheaper flights to

support over the past couple

the USA, in what is anticipated as

years not only from commercial

cut-throat competition. As a re-

airline unions, but also from pri-

sult, American jobs would be lost

vate pilot unions and US Con-

as US carriers are forced to aban-

gress

don transatlantic routes.

candidates seeking the US Demo-

members.

Furthermore,

cratic Party nominations for the

18

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A Norwegian Air Boeing 737. Photo Credit: Creative Commons CC0

2016 US presidential election,

The US protesters are asking

If this were so, then that would

namely Hillary Clinton and Ber-

their Government to revoke the

be in sharp contrast with the

nie Sanders have also expressed

temporary permit and simply

open-mindedness

their strong opposition to grant-

reject the AOC application made

American people in the past.

ing a permanent US air operator

by Norwegian Air International.

Such American open-mindedness

certificate (AOC) to Norwegian

Obviously,

has contributed a great deal to

Air International.

involved in this argument may

Indeed, after delaying the matter for about two years, the US Department

of

Transportation

(DOT) has finally granted a temporary permit to Norwegian Air International. The DOT may be granting a final AOC in the near future.

Airline Profits

being

emotionally

make it difficult to look at the big picture. However, as an objective observer, guided mainly by facts,

one may ask the following question. “Are US airlines really afraid of international competition to the extent of pushing their Government into protectionism?”

July-August 2016

that

guided

the advent of aviation, that of the airline industry and the open sky concept. All these combined have pushed humanity much further ahead than one could have imagined possible. This is a unique legacy, which American people should be very proud of and

strive to preserve.

Volume II—Issue 9

Airline Profits

July-August 2016

Volume II—Issue 9

Perspective

Having said that, here are some

years. Furthermore their 10-year

USA? Why, they don’t need to go

facts to consider. Firstly, the US

cumulative net profits amounted

through the hassle of an “Irish

airlines alone have made US $

to US$ 130 million. That is very

flag of convenience” before oper-

44.1 billion in cumulative net

negligible compared to the earn-

ating flights to the USA with the

profits over the past five years.

ings that some US airlines have

so-called “cheap labour”.

That represents some 57% of the

been reporting for a single quar-

financial results posted by the

ter lately.

global airline industry. Around that same period of time, Norwegian Air was struggling to make

profits, if any. In fact, in 2014, Norwegian Air lost US$ 164.71 million. That was more money than the cumulative profits they made over the previous three

20

Thirdly,

another

points

that

seems to be overlooked is the fact

Secondly, if the reasoning of not

that Norwegian Air operates al-

wanting to set a precedent of

most exclusively a Boeing fleet of

“flags

holds

airplanes. In fact, they have a few

true, then one should consider

dozens more Boeing aircraft on

the

Why

order. And by that very fact,

aren’t the US protesters petition-

Norwegian Air is providing and

ing their government to ban all

sustaining American jobs.

of convenience”

following

question.

Asian airlines from flying to the

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All facts considered, the US airlines outcry against Norwegian Air International appears to be unjustified and over-amplified.

In reality, this sends a very awkward message, which sounds

like the following.

“You are

very welcome to buy as many airplanes made in USA as you want. Just make sure that you do

In reality, this sends a very awkward message, which sounds like the following. “You are very welcome to buy as many airplanes made in USA as you want. Just make sure that you do not intend to fly them to the USA.”

not intend to fly them to the

USA.” And that is certainly not

Once again, what it would take to compete effectively in an open-skies

the type of message the greatest

environment is: practical, down-to-earth, common sense. And that cer-

nation on earth ought to be send-

tainly does not require government intervention to prevail.

ing overseas.

Airline Profits

July-August 2016

Volume II—Issue 9

“ What is called genius is the abundance of life and health.

― Henry David Thoreau

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July-August 2016

Volume II—Issue 9

Performance Record Profitability: Will African Airlines Ever Join the Feast?

According to the International Air Transport Association (IATA), the overall profits for 2015 exceeded expectations by nearly US$ 6 billion, which is 20% higher than anticipated. In fact, airline profitability has been reaching record heights for the past three years, in part due to low oil prices. However, the African airline industry is continuously losing money. A pertinent question is: will African carriers ever join the feast?

Over the same 3-year period, African airlines with rare exceptions have collectively lost US$ 2 billion. As a matter of fact, Afri-

can carriers have lost as much money in three years (2013-2015) as the cumulative loss they have reported in the preceding decade

African carriers have lost as much money in three years (2013-2015) as the cumulative loss they have reported in the preceding decade (2003-2012).

(2003-2012).

Another important loss (US$ 0.5 billion) is likely to happen again in 2016, if one considers the midyear forecast that the Internation-

al

Air

Transport

Association

(IATA) released at their 72nd Annual General Meeting (AGM) in Dublin, Ireland in June 2016.

By contrast, US airlines are lead-

As the saying goes: a feast usual-

ing the pack thanks to low oil

ly precedes a famine. And this

prices, strong demand and im-

line of keen observation also ap-

proved efficiency as a result of

plies to the airline industry in

major consolidations. Airlines in

general, due to its cyclical nature.

other regions have also been improving their financial performance.

24

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Therefore, the question worth asking is not if market conditions

IATA Aviation Day—Africa. Abuja, Nigeria. May 2016. Photo Credit: IATA

are going to change for the

And more importantly what can

worse, namely a slow demand

we do about it? How can we pre-

combined with higher oil prices,

pare beforehand in order to sus-

but rather when will market con-

tain our business?” These are cer-

ditions change suddenly?

tainly far from being easy ques-

The other questions that African carriers ought to be asking themselves is: “If we are losing a great

tions, however they are critical for African airlines; the adequate answers to which can ensure

deal of money in good times

their sustainability. Well, because

while everybody else is enjoying

oil prices are certainly going to be

record profits, how much more

going up at one time or another.

money are we going to be losing

And that may in turn, directly or

in bad times?

indirectly slow down demand.

Airline Profits

July-August 2016

In fact, IATA is already noticing a slowdown in passenger demand. This slowdown can be accentuated further, if oil prices were to go up suddenly. Furthermore, additional taxes are likely to be imposed as part of initiatives to curb climate change. That would mean additional cost burden on airlines, especially in Africa. Hence the following question: is the African airline industry prepared for that? We all know the answer to that one: it is a resounding “No”.

Volume II—Issue 9

Airline Profits

July-August 2016

Volume II—Issue 9

Performance

Now, as highlighted in a previ-

Ethiopian Airlines, one can be

So, in reality, unless we are miss-

ous Airline Profits article about

hopeful that it is indeed possible

ing something of significant im-

open skies and the Yamoussouk-

for African airlines to become

portance, such a criticism has no

ro Declaration, African airlines

sustainably profitable. Some crit-

basis. In a previous article of Air-

do face several challenges. And

ics have gone to the extent of dis-

line Profits, we have highlighted

most of these challenges can be

counting the exemplary perfor-

the necessity of Re-thinking the

effectively alleviated by African

mance of Ethiopian Airlines by

Airline Business, so as to ensure

governments. However, in order

attributing their success to the

that critical components of sus-

to get there, it is necessary for

fact that the airline does not pay

tained profitability are effectively

African heads of State and politi-

income taxes, nor dividends to

incorporated into airline business

cal leaders to fully recognize the

their State-owner. However, the

models. Based on past and cur-

critical role of aviation as a pow-

fact is that a business is not ex-

rent

erful driver for economic growth.

pected to pay income taxes nor

clearly to be the world region

Yet at the same time, considering

declare dividends, unless is has

that needs to begin that process

the steady financial success of

posted profits in the first place.

sooner rather than later.

26

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results,

Africa

appears

Attention

“When you can do the common things of life in an uncommon way, you will command the attention of the world.”

— George Washington Carver

Airline Profits

July-August 2016

Volume II—Issue 9

“ We are buried beneath the weight of information, which is being confused with knowledge; quantity is being confused with abundance and wealth with happiness. ― Tom Waits

Airline Profits

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Airline Profits

July-August 2016

Volume II—Issue 9

Paradigm Should Airlines Reconsider How They Generate Revenues?

From the outset this question might appear controversial, especially knowing that according to the International Air Transport Association (IATA), the airline industry is anticipated to post much more profits in 2016 than initially forecasted, only six months ago. And this would be the third consecutive year that airlines are collectively setting annual records in terms of profitability.

Strong demand for air travel, network efficiency and lower oil prices have been highlighted as the main drivers of this excep-

tional surge in profits.

However, it is worth mentioning that jet fuel, which accounts for nearly 30% and in some regions close to 40% of an airline’s direct

The airline industry is anticipated to post much more profits in 2016 than initially forecasted, only six months ago.

And this would be the third consecutive year that airlines are collectively setting annual records in terms of profitability.

operating costs, does have a greater impact in setting these profit records.

Past Airline Profits articles have

hinted at the need for re-thinking the airline business. The process leading to that objective must of

airline

effectiveness

and

thinking airline profitability.

In this particular article, we are going to focus on why airlines should

reconsider

how

make money.

necessity include re-thinking airline leadership, re-thinking

30

re-

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they

As pointed out in another article, the airline business is mainly about people.

Yet, a key question airline leaders ought to consider is whether their current business practices truly and fully take into account people’s needs and wants, when it comes to air travel.

Man holding a model airplane. Photo Credit: Envato Photodune

Now, before jumping too quickly

public, customers included real-

And no one feels resentful at the

to an easy answer such as: “Off

ly, resents the fact that Apple is a

bus or train company for being

course, we do!” let us consider a

very profitable company. The

profitable. Be it in the case of Ap-

couple of analogies, which Tony

same applies to Starbucks. No

ple, Starbucks, a bus or train

Tyler, the outgoing Director Gen-

one walks into an Apple Store or

company, people generally feel

eral and CEO of IATA has shared

a Starbuck coffee shop and feels

that they are getting fair value for

at past AGMs. The first one is

it necessary to bargain their pric-

what they have paid for: they are

Apple and the second one is Star-

es on the account of the profits

getting

bucks. Both are profitable and

these companies have reported.

Therefore, it is as if, customers

both are well respected brand in

No one feels like Apple and Star-

are giving their consent to these

the eye of the general public. Alt-

bucks do not deserve to be profit-

businesses to charge them as

hough

of

able. Besides, although air travel

much as they see fit and at the

profiting by child labour may

is now considered to be very sim-

same time their approval to be as

negatively

Apple

ilar to travelling by bus or train.

profitable as they could possibly

brand to some extent, the fact re-

There is no such thing as bargain-

be. When it comes to airlines

mains that nobody in the general

ing bus or train ticket prices.

however, it is a different story.

recent

allegations

impact

Airline Profits

the

July-August 2016

their

money’s

worth.

Volume II—Issue 9

Airline Profits

July-August 2016

Volume II—Issue 9

Paradigm The general feeling is that airlines

runs counter to the conventional

attaches to that product or ser-

are charging too much for their

wisdom, which is prevalent in

vice. Now, whether that percep-

services and that they do not de-

the airline industry. As a matter

tion is fair and reasonable or not

serve to be making record profits.

of fact, some industry leaders are

depends mainly on how well the

Therefore, they expect to see and

expressing more and more opti-

provider has conveyed to the

get lower and lower fares as long

mism about the future of airline

customer the benefits attached to

as airlines are reported to be

financial performance. Their pos-

that product or service. And this

making

even

itive feeling does have some basis

explains in part why some cus-

though airlines in some regions

to it. And as Airline Profits, we

tomers are willing to pay a pre-

are claiming that airfares are at

do hope that such wishful think-

mium without bargaining, for

their lowest point in history.

ing does become reality. Howev-

things that are nice to have, while

How can an airline CEO justify

er, in the long run, it is not the

at the same time look for the

the fact that the layman thinks, it

optimism of airline CEOs that

cheapest possible flight, which

is not fine and feels resentful to-

will prevail. It is rather the level

they expect to be comfortable, on

ward an airline, which provides a

of customer engagement, satis-

time and safe enough to get them

service as vital to the economy as

faction and loyalty that will de-

to their desired destination alive.

air transportation, because of rec-

termine the sustainability of the

And that is much more valuable

ord profits. Especially knowing

airline industry.

than simply going from point A

“huge

profits”,

that the same layman thinks it is fine and in fact does not even care how many billions of profits

From arbitrary ancillary fees to unilateral frequent flyer program revamps,

combined

with

to point B. And that is why at Airline Profits, we strongly think that there is an urgent need for re

Apple can make in a few months

cramped aircraft seats, some air-

-thinking the airline business,

by selling “nice to have” items

lines are undoubtedly sowing the

which implies re-thinking how

and can make many folds more

seeds of customer dissatisfaction.

airlines generate revenue thus

than nearly 300 airlines com-

Consequently, they are gradually

profits. In fact, the time to chal-

bined.

leaving themselves exposed to

lenge the status quo and re-

This strongly suggests that some-

potential disruptive competitors

invent the airline business is

thing is fundamentally not right.

or substitutes. With that said, a

now. Conversely, maintaining

And this is certainly not about

key determining factor of cus-

the

the layman’s perception, but ra-

tomer willingness to pay a given

“business as usual” approach can

ther about the airline business

price for a product or service is

only prove to be a losing strategy

itself. Obviously this viewpoint

the perceived value the customer

further down the road.

32

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status

quo

through

a

Observation

“Look deep into nature, and then you will understand everything better. ” — Albert Einstein

Airline Profits

July-August 2016

Volume II—Issue 9

“ Today we have access to highly advanced technologies. But our social and economic system has not kept up with our technological capabilities that could easily create a world of abundance...

― Jacque Fresco

Airline Profits

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@AirlineProfits

Available in Kindle & Paperback on Amazon

Airline Profits

July-August 2016

Volume II—Issue 9

Platform The First CSeries Is Delivered: Will Bombardier Beat the Odds?

After years of delay and the related program cost overrun, the Bombardier CSeries has achieved another major milestone on June 29, 2016. Indeed, the first CS100, the smallest version, was effectively delivered to Swiss International Airlines, the launch customer of the Bombardier all-new family of aircraft. The historic event was celebrated at the Bombardier Mirabel plant, North of Montreal.

The great excitement surrounding this momentous achievement was shared by the representatives of both Canadian manufac-

turer and the European carrier, along with employees, Canadian government officials, suppliers and the media.

Thus, this first CS100 will enter revenue service on July 15, 2016 with a SWISS operated flight from Zurich to Paris CDG. By the same token, Bombardier will de-

liver the first CS300 to airBaltic later this year.

36

There is still a long way to go before the CSeries establishes itself as the game-changer the market has been eagerly waiting for. However, one can see that Bombardier is succeeding at bringing the program back on track.

There is still a long way to go

From

before the CSeries establishes

Transport Canada, then the FAA

itself as the game-changer the

and EASA to significant sales to

market has been eagerly waiting

Air Canada and Delta Air Lines,

for. However, one can see that

the

Bombardier is succeeding at

Equipment Manufacturer (OEM)

bringing the program back on

appears to have regained control

track.

over the program.

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the

certification

Montreal-based

by

Original

Rob Dewar, VP CSeries Aircraft, Bombardier and Peter Wojahn, CTO, SWISS. Photo Credit: Bombardier

This feeling seems to be well con-

And they tend to bring along a

Likewise, Airbus has had its chal-

firmed by the hostile comments,

defining moment, when it is

lenging times with the A380 and

which some top executives from

necessary to stand tall and face

recently with the A320neo. Now,

the competition, namely Airbus

challenges head-on, no matter

it is the turn of Bombardier with

and Embraer, have recently made

what.

the CSeries. As things seem to be

to the media.

To honor such a unique and re-

All told, the CSeries program is

warding moment requires the

the future of Bombardier and

best effort and performance.

consequently that of the Canadi-

In fact, Boeing has had its own

an aerospace industry. As such

defining moment with the 747

it is a make-or-break opportuni-

and later with the 787 Dream-

ty. Such once-in-a-lifetime op-

liner.

falling back into place, we hope that the Canadian aircraft manufacturer will do whatever it takes to stand boldly behind the allnew CSeries in service, so as to beat the odds.

portunities do come to individuals and organizations alike.

Airline Profits

July-August 2016

Volume II—Issue 9

“ Talent is always conscious of its own abundance, and does not object to sharing. ―Aleksandr Solzhenitsyn

Airline Profits

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Self Improvement

“Whenever things go a bit sour in a job I'm doing, I always tell myself, 'You can do better than this.'”

— Dr. Seuss

Airline Profits

July-August 2016

Volume II—Issue 9

“ When people are genuinely happy at the successes of others, the pie gets larger. ―Stephen Covey

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