Boeing 767 Flies with Blended Winglets

In my earlier post about aircraft winglets I have mentioned the Boeing 767 as the latest type to receive post-production blended winglets but at that time it was only in its final development phase and being tested.

A Sunday in early March 2009 marked the first commercial flight by American Airlines, using a blended winglet fitted Boeing 767-300ER. The aircraft with the freshly installed winglets flew from Dallas/Fort Worth to London Heathrow with 204 passengers onboard. The winglet has been designed and developed by Aviation Partners Boeing, that has previously worked on similar, post-production winglets for the B757 for example. The 767-300ER has received very large, and especially tall additions to its wings, as these new winglets stretch 11 feet high (3.35 m!!) from the tip of the wings and “represent the largest piece of structure ever retrofitted to a commercial aircraft“.

According to the airline, the winglets will reduce fuel consumption per airplane per year by up to 500,000 gallons (~6.5%), which also means a carbon dioxide (CO2) emmission reduction of up to 277,000 metric tons annually.  This figure makes “blended winglets the greenest aftermarket product available to the aviation industry today” – says Joe Clark, founder and Chairman of Aviation Partners Boeing. Using the special winglets also extends the airplane’s range by up to 360 nautical miles (666 kms) as well as increases the payload by up to 12,000 pounds (5450 kilograms) – by enabling better take-off performance without any engine updates. The winglets have been installed by American’s Maintenance & Engineering organization at its maintenance base in Kansas City, MO.

When American started to work with Aviation Partners Boeing, they estimated the winglets would save an annual 17 million gallons of kerosene for the airline, but with the final design they now predict to save 29 million gallons of Jet-A fuel a year when the winglets are installed on the full fleet of American‘s 58 Boeing 767-300s – they plan to finish the installation by 2011.

The 767-300ER Blended Winglet program proved to be a huge success even before the first commercial flight, as Aviation Partners Boeing has pre-sold more than 130 systems to 10 different airlines, even before the solution received certification.

Recently American’s fellow oneworld partner, LAN Airlines has also reported their first commercial flight between Santiago de Chile and Buenos Aires with a blended winglet equipped 767-300ER on 31st of March, while Delta and Austrian have also received their first jets with this adjustment. LAN is planning to update its whole fleet of 37 767-300s by year-end (investing nearly $70 million), with Austrian planning 4 planes to carry the high red winglet by the end of May, 2009, after the first two (registrations OE-LAE and OE-LAY with special Star Alliance livery) have joined its fleet earlier this month. Further airlines planning to introduce blended winglets on their 767s include Air New Zealand, Condor and Hawaiian Airlines (with 8+7 options).

To date over 2,480 Boeing aircraft have now been equipped with Blended Winglets, which includes 124 Boeing 757s and 77 Boeing 737s in American’s fleet alone.

by balint01

Lufthansa Shopping Around Europe

Lufthansa, the German flag carrier has been one of the most successful airlines in Europe in recent years and a leader in the Star Alliance. They have made very strong relationships with the other European Star Alliance members by sharing loyalty programs (pushing through their own Miles & More program to be used by others), promoting strong code-share agreements, etc. They have also assured to have an insight and some influence over at least some of their fellow European Star partners by having minority stakes in British bmi and the Scandinavian SAS. Lufthansa has also made a strong partnership with Italian Air One in 2000 – this is a nowadays often heard name, as Air One is merging with the nearly-collapsed Alitalia to form the new Italian flag-carrier.

1. SWISS International Airlines (2005)

Other European carriers may have also had some similar agreements in place, but no minority ownership in other airlines, until only a few years ago. Then in 2004 Air France merged with KLM, creating Air France-KLM and created the world’s largest Airline in terms of annual revenue in those days. As an answer, Lufthansa purchased the bankrupt Swiss International Airlines in March 2005, which was also officially communicated as a merger, but in reality it was a take-over by the Germans. Swiss has been turned around and is making profit these days – thus it is living proof that Lufthansa may be very successful in acquiring other airlines and merging them into its extended line of subsidiaries that contain smaller, regional partners such as Air Dolomiti, Lufthansa CityLine, Augsburg Airways just to name a few. Obviously Swiss became a much bigger subsidiary than these others by keeping its own brand and identity but sharing the coherences.

2. jetBlue (2007)

Then, two years after the succussful Swiss take-over, Lufthansa began airline shopping in late 2007. First it purchased a 19% stake in the American low-cost airline, JetBlue and announced extended partnerships.

3. Brussels Airlines (2008)

But in 2008, Lufthansa really shifted gears and became the main advocate and driver of airline consolidation around Europe. Basically any airline sales that have happened this year, included Lufthansa as a potential buyer at some point, but more interestingly in a number of cases they turned out to be the actual buyers. On September 15 2008, Lufthansa announced a relative surprise 45% stake acquisition in Brussels Airlines, just two weeks after the first rumours of such a tie-up. It is interesting as Brussels Airlines has not been a member of Star Alliance (has been an outsider to any airline alliances actually), and is a result of a merger by itself, that happened not so long ago. In 2006 SN Brussels Airlines (replacement of the earlier bankrupt Sabena) merged with Virgin Express, a Richard Branson owned low-cost carrier to create the largest Belgian airlines. Lufthansa now owns 45% of it, but has an option to purchase the remaining 55% by 2011. Brussels Airlines is bound to gain full membership to Star Alliance in the coming years as a result. During the merger process it was revealed that Brussels Airlines was also in talks with British Airways, but that deal has fallen through.

Over the course of 2008, Lufthansa was also mentioned as a potential buyer of SAS, or its subsidiary in Spain: Spanair. They are both members of Star, so it would have been a logical step. (The Spanair interest has been expressed already in 2007 as we reported.) However, a Spanair flight suffered a very bad, deadly accident on August 20th, 2008, following of which Lufthansa seems to have given up on purchasing the SAS lead airline group that fell into heavy losses after the accident.

4. bmi (British Midland) (2008)

But let’s not forget the large UK market, where as said earlier, LH has held a minority stake (30%-1 share) in the second largest local player on the market: bmi. The current majority stakeholder, Sir Michael Bishop has 50%+1 share, with the remaining 20% being owned by the Scandinavian SAS Airlines group. Lufthansa is planning to purchase the stakes of Sir Bishop (who expressed his intentions of selling his stakes to the Germans in late October, 2008), with which they would become the 80% owner of the second largest British Airlines, and the airlines holding the second largest number of take-off and landing slots at London Heathrow airport, the biggest European Gateway to North-America. This sale is expected at around GBP 314 Million, which at the time of the announcement was worth around EUR 400 Million. By the time the sale is concluded sometime in January 2009, it may cost less for the Germans due to the recent weakness of the Pound against the Euro. Having mentioned Sir Richard Branson’s name in connection with Brussels Airlines above, both parties have confirmed that should Lufthansa become the majority owner of bmi, he would very much like to link up the long-haul operations of his Virgin Atlantic Airways with the short and medium haul flights of bmi – to create a realistic competition to British Airways in the UK. Virgin Atlantic Airways President Richard Branson said in December that “talks will take place with Lufthansa, maybe are taking place, to see whether it makes sense for the two companies to work together,” the Associated Press reported.

Update: On 18MAY2009, the takeover bid has been approved by the European Commission.

5. Austrian Airlines (2008)

On the other hand, Lufthansa quickly turned its focus towards the recently loss-making Austrian Airlines, a long-time close Star Alliance partner. The Austrian Government was selling off the majority stake of its own flag-carrier over the course of October-November, 2008. There are some controversial details to the final bidding process where AirFrance-KLM had dropped its bid, but after all, Lufthansa was announced as the winner of this privatization effort. This sounds like a logical step, based on their long-time partnership. The deal is expected to be closed by January 2009.

Update (29AUG2009): It took much longer than expected, but finally on 28AUG, the European Commission has officially approved Lufthansa’s acquisition of Austrian Airlines Group. Lufthansa alleviated antitrust concerns by agreeing to reduce service between five European cities (Frankfurt, Munich, Stuttgart, Cologne and Brussels) and Vienna.

Update (05FEB2010): All remaining shares in Austrian Airlines Group held by minority shareholders have been transferred to Lufthansa subsidiary Osterreichische Luftverkehrs Holding by order of the Vienna Commercial Court. Share certificates are redeemable for cash compensation, Lufthansa said. In December it said it would pay €0.50 ($0.70) for each outstanding share. Austrian Airlines Group is expected to be delisted from the Vienna Stock Exchange soon.

6. Germanwings (2008)

Another late 2008 announcement saw Lufthansa taking full ownership of the German low-cost carrier, Germanwings (established in 1997), that was owned by Eurowings, a Dortmund based regional air carrier. To twist this story, Lufthansa has been holding a 49% stake in Eurowings since 2006 with full control as parent company, thus it was already partial owner of Germanwings before the announcement in December, 2008, that it will fully take it over as of January 1, 2009.

7. What’s next in 2009?

Looking at the dynamics of Lufthansa shopping around Europe for other airlines, we are sure they will continue in 2009. But what could be their next target(s)?

• Alitalia
  The Italian flag-carrier is just being reorganized and the new owners are looking for a strategic partner, which could be either Lufthansa (given their strong relationship to Air One, it would make sense) or Air France-KLM (they have been cooperating with Alitalia and are all in SkyTeam). And let’s not forget that Lufthansa has been interested in Alitalia all along the long and rocky road to its privatization.
  Update (09JAN2009): Lufthansa confirmed that it did not make an offer for Alitalia in the end, and prefers to work with its Star Alliance partners in the Italian market. Air France-KLM will hold a minority stake in the reorganized Italian flag-carrier.
• SAS / Spanair
  Given the earlier speculations and shared Star Alliance interests, a partial or majority stake exchange or merger could still happen between Lufthansa and SAS or SAS subsidiary Spanair.
  Update (02FEB2009): SAS has sold its 80.1% stake in Spanair for €1 ($1.31), leaving SAS with the remainder. This practically rules out Lufthansa buying the Spanish carrier, but would still offer the possibility for a stake in SAS.
• LOT Polish Airlines
  The Polish government is planning to sell all or at least part of the national carrier of Poland that has been in Star Alliance and has been cooperating with Lufthansa for quite some time.
• TAP Portugal
  We don’t know about TAP being up for sale, but would not be surprised if Lufthansa would simply buy the fellow Star Alliance member that would give them a much larger presence in South-America.
• CSA Czech Airlines
  I wouldn’t bet on such a tie-up, but given the aggressiveness of the Germans, if and when CSA will be up for privatization, they may join the tender process, just in case…
  Update: Lufthansa had not turned in an offer for CSA.
• Regional carriers
  There are a number of regional flag-carriers of smaller European countries that could theoretically be of interest to Lufthansa next year, such as those Star Alliance associates on the Balkans (Croatia Airlines and Adria Airways) or any of the small carriers in the Baltic states.

If Lufthansa will keep its course and will continue to be shopping around Europe for airlines in 2009, we’ll be here to keep you updated! And of course the other two major European players (Air France-KLM and British Airways) will also have to speed up their consolidation plans if they want to cooperate with any airline in Europe, before Lufthansa buys them all…

by balint01