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News Letter 12 December 2019

Good day all

So, yet another year is gone by in a blink of an eye to all those that are traveling to holiday destinations, whether by air or by land, please be safe out there. In 2019 we had more than our fair share of tragedies in our small community, let’s not add to that please.

Flying wise this is going to be a very quiet weekend with no events planned that we are aware of other than the annual SACAA awards dinner of Friday night.

Chilean Air Force finds debris believed to be from C-130 aircraft

The Chilean Air Force said Wednesday it had located debris believed to be from a military cargo plane that crashed this week with 38 people aboard over a remote stretch of frigid sea between South America and the Antarctic. The debris was found 19 miles south of where the plane last made contact, the Air Force said in a statement. The parts were being recovered for analysis to determine if they belonged to the Hercules C-130 cargo plane.

The Brazilian Ministry of Defence said in a statement that one of its ships had recovered personal items and debris compatible with the plane, about 311 miles from the southern Argentine city of Ushuaia in Patagonia.

The aircraft, which was heading to a base in Antarctica, disappeared shortly after taking off late Monday from the southern city of Punta Arenas in Chilean Patagonia. The Air Force concluded early the next morning that the aircraft must have crashed, given the number of hours it had been missing. "We will continue the search and hope for a better result," said Air Force General Eduardo Mosqueira, who has been leading the search effort.

The cause of the crash was unknown and officials acknowledged the slim chances of finding any survivors. Earlier on Wednesday, the Chilean military sent fighter jets in an expanded search after large rolling waves in the icy Drake Passage and low clouds had complicated the mission the day before, authorities said.

The flight, which was carrying 17 crew members and 21 passengers, appeared routine until the moment it disappeared, Mosqueira said. The region where the plane disappeared is a vast, largely untouched ocean wilderness of penguin-inhabited ice sheets off the edge of the South American continent with depths of 11,500 feet.

The military was using sonar-enabled Navy ships to detect irregularities at depth, Mosqueira said, adding it had established quadrangles to help organize the search. Ships from Argentina and Brazil were assisting, he said.

World's first fully electric commercial aircraft takes flight in Canada

The world’s first fully electric commercial aircraft has taken its inaugural test flight, taking off from the Canadian city of Vancouver and flying for 15 minutes. “This proves that commercial aviation in all-electric form can work,” said Roei Ganzarski, chief executive of Australian engineering firm magniX.

The company designed the plane’s motor and worked in partnership with Harbour Air, which ferries half a million passengers a year between Vancouver, Whistler ski resort and nearby islands and coastal communities. Ganzarski said the technology would mean significant cost savings for airlines and zero emissions. “This signifies the start of the electric aviation age,” he said.

Civil aviation is one of the fastest-growing sources of carbon emissions as people increasingly take to the skies, and new technologies have been slow to get off the ground. The International Civil Aviation Organisation (ICAO) has encouraged greater use of efficient biofuel engines and lighter aircraft materials, as well as route optimisation.

The e-plane, a 62-year-old, six-passenger DHC-2 de Havilland Beaver seaplane retrofitted with a 750hp electric motor, was piloted by Greg McDougall, founder and chief executive of Harbour Air. “For me that flight was just like flying a Beaver, but it was a Beaver on electric steroids. I actually had to back off on the power,” he said.

McDougall took the plane on a short trip along the Fraser River near Vancouver international airport in front of around 100 onlookers soon after sunrise, the flight lasted less than 15 minutes.

“Our goal is to actually electrify the entire fleet,” said McDougall. On top of fuel efficiency, the company would save millions in maintenance costs because electric motors require “drastically” less upkeep, Mr McDougall said. However, Harbour Air will have to wait at least two years before it can begin electrifying its fleet of more than 40 seaplanes. The e-plane has to be tested further to confirm it is reliable and safe. In addition, the electric motor must be approved and certified by regulators.

In Ottawa, transport minister Marc Garneau said ahead of the maiden flight that he had his “fingers crossed that the electric plane will work well”. If it does, he said: “It could set a trend for more environmentally friendly flying.”

Battery power is also a challenge. An aircraft like the one flown on Tuesday could fly only about 160km on lithium battery power, said Ganzarski. While that’s not far, it’s sufficient for the majority of short-haul flights run by Harbour Air. “The range now is not where we’d love it to be, but it’s enough to start the revolution,” said Ganzarski, who predicts batteries and electric motors will eventually be developed to power longer flights.

While the world waits, he said cheaper short-haul flights powered by electricity could transform the way people connect and where they work. “If people are willing to drive an hour to work, why not fly 15 minutes to work?” he said.

IATA predicts a better 2020

The headline figure from IATA predicts a net profit of $29.3bn in 2020, up some $3.4bn from the expected profits being generated in 2019. This year’s profits are estimated to finish the year at $25.9bn, well under the forecast level of $28bn published by IATA in June. Nevertheless, 2019 is expected to be the aviation industry’s 10th year in the black.

In addition to the overall profits showing growth, IATA predicts some other key metrics for 2020, including:

Net profits per passenger: $6.20, up from $5.70 in 2019

Passenger numbers: 4.72bn, up 4% from 4.54bn in 2019

Profit margins (net): 3.4% up from 3.1% in 2019

Operating expenses: $823bn, up 3.5% from the estimated $796bn in 2019

Overall revenues: $872bn up 4% from the estimated $838bn in 2019

IATA 2020 predictions

On the topic of airline bankruptcies, IATA maintains a realistic perspective. Chief Economist Brian Pearce was asked today at the IATA Media Days in Geneva whether IATA expects the same level of bankruptcies as we’ve seen this year. He replied, “We hope not! He slightly better growth situation in 2020 and relatively low fuel prices may help. However, there’s a long tail of airlines where the situation is pretty fragile, so we can’t rule it out.”

The economic performance of airlines in 2019 was weaker than had been predicted previously. Although it’s easy to lay the blame at the foot the 737 MAX grounding, this was actually a factor that influenced less than 1% of the global airline fleet.

What really did have an impact was the ongoing trade wars, particularly between the US and China. Other factors such as political unrest and Brexit contributed to a weaker than anticipated year. Overall, passenger yields fell 3% and cargo fell by 5% compared to 2018’s performance.

However, the mitigating factor here was that operating expenses did not rise as much as anticipated. The predicted 7.4% forecast in expenses in June translated to just 3.8% in realty, largely due to lower than expected fuel costs. This led to a minor reprieve for airlines suffering from the curse of 2019.

“Slowing economic growth, trade wars, geopolitical tensions and social unrest, plus continuing uncertainty of Brexit all came together to create a tougher than anticipated business environment for airlines. Yet, the industry managed to achieve a decade in the black, as restructuring and cost-cutting continued to pay dividends. “It appears that 2019 will be the bottom of the current economic cycle and the forecast for 2020 will be somewhat brighter. The big question for 2020 is how capacity will develop, particularly when, as expected, the grounded 737 MAX aircraft return to service and delayed deliveries arrive.”

Overall, the outlook for 2020 is a positive one. However, the bigger picture points to an overall slowdown in growth of aviation. Whether this is indicative of a long term shift change, or simply a temporary bump in the road remains to be seen.


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