BOEING vs. AIRBUS

Whose plane is better?  For quite some time now, Boeing and Airbus have been providing the best flying jets for transporting passengers around the globe.  Both companies are one of the corporate world's greatest and most visible corporate rivalries, a set-to between manufacturers of world-class aircraft.  Since these two companies have dominant control over the aviation market, competition has been surely intense since the 1990s and that Airbus and Boeing will continue on with competing with building better efficient jets in every aspect. 
 
With Boeing and Airbus, duopoly will always remain in constant competition with their different builds of aircrafts.  The competition can be seen at any major airport on any given day: Boeing 747 jets take off while an A380 taxis in a few hundred yards away, or an easy Jet-owned A320 comes into land while one of Boeing 737s rapidly unloads its passengers in preparation for yet another return flight (Milmo, 2012).    The Boeing 737 is the U.S. company's most popular aircraft and competes with the Airbus A320 in the largest segment of the aircraft market, estimated at $2 trillion over 20 years (2012, Reuters).   However, not only these 4 jets have competition, but others as well.  Boeing 787 is the first commercial jet to use the lightweight but powerful batteries, which discharge a large amount of energy to support an increasing array of electrical equipment on modern aircraft but must be shielded from the risk of overcharging.  Airbus executives defended the use of lithium-ion batteries on the company's A350 passenger jet which is currently in development, saying its rival to the Dreamliner is designed differently.  The 787 relies on electrical power rather than traditional hydraulic and pneumatic systems for a larger number of aircraft systems.  Airbus are developing and releasing 3 models of their new A350 XWB in which is to be fuel efficient, light-weight designed and will also replace its own jets; A330-300, A320-200 and A340-600.  These new developments will take on Boeings 777 and 787 production line (2013, Terdiman).

Unlike Boeing, Airbus has its operating automated systems to fly its aircrafts using fly-by-wire technology through a side-stick controller; referencing a joystick.  Most likely, Airbus jets fly on its own and automatically knows what is needed for safety purposes.  Boeing will always have its manual operated systems but also with advanced technology to support them.  Pilots who fly Boeing jets will at least have the option to control the aircraft manually if needed.

With Airbus and Boeing manufacturing nearly all aircrafts for current merged airlines, they're both build for safety flying which is top priority.  Its hard to tell which aircraft is better built due to their technology incorporate into the systems each aircraft have for pilots and passengers.  In all, market wise, I think both companies has the opportunity advance further in the future with building different jets for certain purposes for each country, always compete-no matter what other company may come in to try compete against them and will always please the aviation industry for the air traveling public. 
 
Sources:

Airbus.  (2013).  Retrieved from:  http://www.airbus.com/innovation/proven-concepts/in-operations/fly-by-wire/

CNN.com (2013).  Boeing 747-8 vs. Airbus A390-- the airline giants face off.  Retrieved from:  http://travel.cnn.com/explorations/life/boeing-747-8-and-airbus-a380-death-match-152563

Milmo, D. (2012, July 7).  Boeing hard on the tail of Airbus in race for orders.  Retrieved from:  http://www.guardian.co.uk/business/2012/jul/08/boeing-hard-tail-airbus

Terdiman, D.  (2013, March 20).  It's airbus a350 vs. boeing's dreamliner in the war of wide-bodies.  Retrieved from:  http://news.cnet.com/8301-10797_3-57575248-235/its-airbus-a350-vs-boeings-dreamliner-in-the-war-of-the-wide-bodies/ 

Sequestration for better or worse...

Sequestration will soon be a plan if not done so already for numerous of agencies and departments within the U.S. for budget and debt issues through Congress.  With United States fiscal cliff, sequestration is a good place to start in cutting federal budget.  However, it will cause many furloughs in certain industries.  With that being said, the aviation industry will most likely be the 1st to get severely sequestered. 

According to a USA Governemnt article, sequestration, sometimes called the sequester, is a process that automatically cuts the federal budget across most departments and agencies.  Congress included the threat of sequestration in the Budget Control Act of 2011 as a way to encourage compromise on deficit reduction efforts.  "The President and Congress have had a year and a half to come up with a smarter way to reduce spending, and they have failed" (Widom, 2013).  With no solution in sight after March 1st 2013, the U.S. is now stuck with sequestration, which is likely to result in $85 billion in cuts over the next year alone, with reductions being split equally between defense and domestic spending (USA.gov, 2013).  In my opinion, I think that sequestration should have taken place years ago so that we would not be in so much debt crisis in today’s society.  As Charles Spence stated in his article, “FAA spending over the past few years has shown several areas where belts could be tightened to prevent any cuts in more important places. These include $179 million for FAA employee travel and $143 million a year to maintain a fleet of 46 aircraft. Thune and Shuster say the FAA has $2.7 billion in non-personnel operations costs that should have been examined before furloughs were even considered.”

While cuts are being made progressively in certain industries, sequestration has definitely become a plan for the the Federal Aviation Administration (FAA) to take advantage of for the aviation world. The FAA is planning for over $600 million in spending cuts for the 2013 fiscal year. The government agency will not only be furloughing workers, but will also be reducing funding and closing over 100 air traffic control facilities, eliminate the overnight shift for at least 60 facilities, and reduce preventive maintenance and support for all air traffic control equipment. The high standards of safety in the aviation industry will also be affected (Matteson, 2013). This will not only affect the efficiency of the aviation industry, but also the safety, aircraft operations and maintenance.  This will also include aviation managers as well in which I am a bit concerned about due to being a avaiation management graduate:

"The furloughs will include all management and non-management employees working within the Air Traffic Organization" (Matterson, 2013).

 

Sequestration will also cause more delays and higher airfare. The reduced number of ATC facilities limits the amount of aircraft that can be safely followed by the controllers. This will create more delays during peak times. These delays could regularly reach 90 minutes during peak times. The FAA expects that airlines will estimate these delays and will change their schedules and cancel flights so they do not go bankrupt. The consequence of these changes will be a rise in airline tickets to compensate for lost revenues.

From what I've gathered, I think the sequestration will not benefit the industries including aviation.   If the government  stop wasting billions of dollars on unnecessary needs, maybe the U.S. wouldn't be facing budgeting and furloughs in the U.S.  It’s obvious that aviation will take a big hit and that there will be a lot of disappointed employees losing their jobs and that I now will have to be cautious on what organization, department, and facility I choose to work in.

 

Sources:

Matteson, C.  (2013, March 9).  How sequestration affects aviation industry.  Retrieved from: http://voices.yahoo.com/how-sequestration-affects-aviation-industry-12040508.html

Spence, C.  (2013, March 2013).  Some question faa’s selection of sequestion cuts.  Retrieved from:  http://www.generalaviationnews.com/2013/03/some-question-faas-selection-of-sequestration-cuts/

Widom, W.  (2013, February 28). What is Sequestration & Why Politicians Are a Bunch of Windbags.  Retrieved from: http://www.chicagonow.com/families-in-the-loop/2013/02/what-is-sequestration-and-why-partisan-politics-is-wrong/

USA.gov.  (2013, February 26).  What is Sequestration?  Retrieved from:  http://blog.usa.gov/post/44071444149/what-is-sequestration

 

EU Emissions Trading Scheme (EU ETS)

Burning less fossil fuels is definitely something to be concerned about in the future.  Looking for cost efficient traveling is always in research to find ways to reduce the amount carbon emissions produced. However, in the aviation world (planes), I honestly think that there should be a solution for carbon emissions due to the fact that flying is one major choice from all travelers for fast arrivals to their destinations.  But the question is, do we yet have the proper technology to reduce air traffic carbon emissions?  Meanwhile, airlines may get taxed for and may cause downfalls of passengers and flight crew.

The European Union Emissions Trading Scheme (EU ETS) is the first international trading system for carbon dioxide (CO2) emissions in the world and is a cornerstone of the EU’s efforts to address the issue of climate change.  EU-ETS is a cap-trade system that the principle of operations involves the allocation and trading of emission allowances. Every one allowance represents one ton of carbon dioxide. The capping, or maximum, of emissions is set and regulated by the European government. Most airlines will get an allotted amount accordingly.  Additional allowances are distributed to operators through trade. The EU-ETS is designed to reduce the total amount of emissions in multiple industries across the European continent (European Commission, 2013)). The goal is to successfully do this in a cost effective way and by allowing numerous companies to trade allowances, they will be able to potentially generate income and competition between joining countries.  With that being said, its hard to see how the ETS helps the environment when there is no mandate on how the funds collected can be spent.

President has made it clear that he wants change in the aviation world facing EU-ETS.  According to Aaron Karp article, President Obama signed into law last year prohibiting US airlines from participating in the European Union’s (EU) Emissions Trading Scheme (ETS).  It states:

"the transportation secretary can bar US carriers from participating in the EU ETS if doing so would be “in the public interest,” particularly taking into account “the impacts on US consumers, US carriers and US operators; the impacts on the economic, energy and environmental security of the United States; and the impacts on US foreign relations, including existing international commitments.” (Karp, 2012)

The U.S. and other countries are opposed in the Emissions Trading System because of taxes and other fees added to air carriers for flying. This will cause airlines to not make much profit and travelers will not considering traveling as much as they use to.  Starting from an airport that may be outside of Europe by a great distance and charging the airline for that trip if they enter European airspace. Many nations, including the US, have opposed this idea. This shows that their is a common goal for all to reduce the total amount of emissions throughout globe.

Solutions from the International Civil Aviation Organization (ICAO) should involve in a precise way of charging the allocations globally. If EU-ETS would want reduction in emissions through their airspace, then i think it should be their airspace and their airspace ONLY that should be charged. I think the difficult part will be when different nations will required different charges based on traffic, aircraft, and capabilities. Another way to possibly make a positive change will be to continue the development of reduce carbon-emitting engines. We have made great advances in limiting the total amount of emissions and I feel that the major countries of the world should focus on cleaner developments of their aircraft, rather than a focus on increasing profits.  The only issue now is not having the technology to to create a more efficient, quiet and cleaner burning engine in which I think we do but maybe too costly to have it done as of yet.


Sources:

China's Ambition/Investments in General Aviation Market Sector

As the market economy and worldwide influence of China grows, so too does the nation's significance to the U.S. economy. Not only the U.S. are one of the biggest consumers of Chinese goods, but China is also one of U.S. biggest creditors.  With that being said, China has made many investments within the past years in its general aviation market sector.   Chinese authorities will always expect explosive growth in sector to always continue in the future.

On February 28th of last year, China Aviation Industry General Aircraft Co. Ltd. (CAIGA) has purchased Cirrus Aircraft Industries. Cirrus CEO, Brent Wouters, has made a statement that the sale to CAIGA is sure to boost Cirrus’ Vision single-engine jet program (Hirschman, 2012).  In Wouters views,  the sale of Cirrus marks a major milestone for the pioneering aircraft manufacturer that introduced airframe parachutes, glass cockpits, and composite materials to general aviation.  CAIGA has the resources that will allow Cirrus to accelerate its aircraft development and the global expansion of Cirrus.

In addition of China's investment in general aviation, in 2012, China has recently purchased Hawker Beechcraft who filed for bankruptcy protection in May to expedite a prearranged restructuring of the company and some of its subsidiaries (Hegeman, 2012). The Chinese firm offered nearly $1.8 billion to purchase the company's business jet and other aviation operations.  However, there maybe an collapse on the deal due to complication nature of the deal, much of which was related to the origin of the buyer.

The reasons varies for rapid growth in Chinese general aviation industry. China has always been a major production country for the U.S. in which us Americans gives China much profit alone.  The Chinese authorities has been developing numerous policies including opening low-altitude airspace specifically for general aviation operations (Koh, 2012). Also, the demand for corporate aviation plays a big role. Corporations and citizens will be in need of additional modes of transportation; aviation.

"Emerging markets, in particular China, have kept aircraft manufacturers airborne through a bout of weak demand from Western carriers. Chinese airlines accounted for 20 percent of global aircraft deliveries in 2010, and China’s civil aviation authorities estimate that by 2012 the country will need 2,100 aircrafts, nearly half of those for general aviation. It is also estimated that, for every dollar spent on an aircraft, $6 is spent on supporting sectors, leading to the burgeoning growth of the overall industry (Koh, 2012)."

With expansion taken place in China, career opportunities will be limited within the United States. The job market in U.S. aviation will quickly decrease. If China persist on investing more companies in the U.S., more jobs will be transferred over to China and other countries.  The U.S. will be left with nothing; particularly in general aviation and that American will have to relocate else where across the globe for their dream job in aviation. 

Thanks for reading

Ryan Pride

 

Sources:

Hegeman, R.  (2012, July 9).  Chinese firm to buy hawker beechcraft for $1.8b deal.  Retrieved from:  http://usatoday30.usatoday.com/money/industries/manufacturing/story/2012-07-09/hawker-beechcraft-china/56120442/1

Hirschman, D. (2011, February 28). Cirrus sold to china. Retrieved from: http://www.aopa.org/aircraft/articles/2011/110228cirrus_sold_to_china.html

Koh, W.  (2012).  Aviation in china: ready for take off.  Retrieved from:  http://www.agcs.allianz.com/assets/PDFs/riskfeatures/2011_02_Aviation_in_China.pdf

Lei, Z.  (2012, Novemebr 13). Civil aviation industry ready to take off .  Retrieved from:  http://www.chinadaily.com.cn/cndy/2012-11/13/content_15920218.htm

 

U.S. Airways/American Airlines merge in process...

I must say that airlines’ merging puts a pressure on air fares for traveling passengers but can also produce airline growth.  Throughout the past years, airline mergers have taken place due to profitability for its combined company; Delta/Northwest, United/Continental and currently in process American/US Airways.  The boards of American Airlines and U.S. Airways voted late Wednesday for an $11 billion deal to merge the two carriers. The result would make the combined airline retaining the name American Airlines, the largest in the world (Loyd, L.).  Consumers will most definitely complain about increase in prices and will try every alternative to seek cheaper prices elsewhere.  That will definitely be impossible due to the fact that American Airlines/U.S. Airways will be considered the largest merging airline, only if that consumer is still interested in that company for whatever reason that may be.  However, the choices on airlines are quite slim due to past and current merging.  Luckily, U.S. Department of Justice has the ability to limited on consumers and raising prices in which is still a working process.

Airlines have a very, very hard time making profits. US Airways endured a couple of round trips to bankruptcy court, and American is still trying to pull out of a bankruptcy filed in 2011 (Geewax, M.).  Merging AA/US Airways could definitely  be beneficial for American Airlines and could be pulled from bankruptcy pretty quickly by more consumers.  Monopolizing market is a main concern and must be prevented. This is why The Justice Department antitrust division is an important part because of that issue may occur.   

As in management, merging can definitely affect those who manage any department for either airline; American Airline/U.S. Airways and that it doesn’t make sense to have double management for each department.  Most likely for pilots-and even managers, there will be requirements that may have to be met depending on airline qualifications; American Airline and U.S. Airways. This is where seniority comes in.  Many pilots, flight attendants, baggage handlers, ticket agents may be laid off due to over staffing.  However, there is no question that the best worker with contributions to the company or great work ethics and experienced pilots with more flying time will be the chosen one by management to remain employed with the company once this proposed merger is approved by U.S.Department of Justice. Lets not forget the controversy of both unions combining together as well.  Both airlines would to analyze what will remain the same and what will change union wise before merge take place.

As far as merge is concern, this can only affect me as management by the amount of workload from both airlines combining and managing safety in which will be quite tough due to the differences between airlines qualifications and set certain standards.  As for a pilots perspective, it would not much effect them in a bad way due to the fact that they will obtain more experience in flying different aircraft's and senority in which they will be on top of the list to be rehired or remain with the new merged airline 'American Airline'.  Nevertheless, as mention before, there could be some lay-off due to over staffing.

Thanks for reading.
Ryan Pride

Sources:

Geewax, M.  (2013, February 14). How the american-us airways merger might affect you.  Retrieved from:  http://www.npr.org/2013/02/08/171506095/how-the-american-us-airways-merger-might-affect-you

Loyd, L.  (2013, February 14).  US airways, American merge in $11 billion deal.  Retrieved from:  http://www.philly.com/philly/business/20130214_US_Airways__American_merge_in__11_billion_deal.html

News Desk.  (2013, February 14).  American airlines-us airways merger by the numbers.  Retrieved from:  http://www.pbs.org/newshour/rundown/2013/02/american-airlines-us-airways-merger-by-the-numbers.htm

The New York Times.  (2010, May 8).  Why merge?.  Retrieved from:  http://www.nytimes.com/2010/05/09/opinion/09sun2.html?_r=0

 

Moderate Focus on Corporate Aviation...its "valuability"

I believe Corporate Aviation is important for those who run businesses that generates a great deal of income and in need for transportation of products and CEO's.  However, in an economy perspective, its not that important; due to the fact that its costly to run business aviation around the globe and may cause some type of debt with the general public (taxpayers). Corporate Aviation fits the transportation needs of corporations or businesses who desire to have their own personal air transportation, and not rely on the airlines to provide their air transportation needs.  Keep in mind that corporate aviation allows company executives or personnel to travel when they need to, and not be reliant on the airline scheduling system.  So, corporate aviation means efficiency.  It’s expensive efficiency, yet when time equates money, corporate aviation allows access to thousands of airports unserved by the airline system.  It puts company personnel very close to the target zone of their customers, or business enterprise.

Obama has made a great point when stating that corporate jet owners should not get a tax break and should proceed paying current or higher taxes.  Its obvious that if owning a jet, you are considered wealthy to not even complain about paying taxes.  President Barack Obama’s broadside against giving corporate jet owners a tax break scored him some populist points while potentially saving taxpayers $3 billion over the next decade (Stone, 2011).  I say that saving taxpayers money is what gave Obama more attention in the U.S. from his fellow Americans within the last few years; not just in corporate aviation.

Accelerated depreciation plays a big role for fixed assets.  Any method of depreciation used for tax purposes that alows greater deductions in earlier years of the life of an asset will be considered an acceleration of depreciation.  For example, President Obama signed a bill–the American Taxpayer Relief Act of 2012 that extends the 50-percent accelerated depreciation for capital goods, notably including business aircraft, through the end of this year. According to NBAA, this means that, in general, new business aircraft purchased this year are eligible to qualify for 50-percent “bonus” depreciation (Trautvetter, 2013). 

"Accelerated depreciation has consistently proved to stimulate sales in difficult economic conditions,” NBAA president and CEO Ed Bolen noted. “Given the current marketing environment, we view the continuation of accelerated depreciation as an effective sales incentive."

With all this being considered, corporate aviation is still beneficial for businesses/companies who utilizes it even if it does require higher tax pay.  Studies have found that businesses which use business aviation as a solution to some of their transportation challenges return more to shareholders than companies in the same industry that do not utilize business aviation (No Plane No Gain, 2013).  As mention before, the vast majority of companies utilizing corporate aviation-85%- are small and mid-size businesses, many of which are based in the dozens of markets across the country where the airlines have reduced or eliminated service.  In all, it definitely serves its purpose.

Sources:

No Plane No Gain.  (2013, February 11).  Why companies utilize business aviation.  Retrieved from:  http://www.noplanenogain.org/Advocacy_Tools.htm?m=47&s=407

Stone, D.  (2011, June 30).  Obamas privaate jet-offensive.  Retrieved from: http://www.thedailybeast.com/articles/2011/06/30/obama-spars-with-corporate-jet-owners-over-tax-breaks.html

Trautvetter, C.  (2013, January 8).  U.S. extends bonus depreciation for business aircraft.  Retrieved from:  http://www.ainonline.com/aviation-news/ainalerts/2013-01-08/us-extends-bonus-depreciation-business-aircraft

Topic 2: Individual/Industry Ramification of Flight/Duty Regulations

Due to the devastating crash of Colgan Air/Continental Express flight 3407 that took place in Buffalo, NY on February 12, 2009, it has truly led to some changes to requirements for obtaining an airplane transport pilot license (ATP).  On August  1, 2010, President Obama signed PL 111-216, The Airline Safety and Federal Aviation Administration Extension Act of 2010, into law that includes many safety provisions.  According to this Act, it list numerous of requirements (key sections) for improving the safety of the American flying public.

The Airline Safety and Federal Administration Extension Act contains two titles and how they will be implemented in flying aviation. Title I explains safety improvement on Airport and Airway Extension into seven different sections. Title II explains safety on Airline Safety and Pilot Training Improvement into seventeen different sections.  As you can see, Title II received a great deal of attention due to the flight 3407 accident in 2009.  The FAA proposes to allow pilots with an aviation degree or military pilot experience to obtain an ATP certificate with restricted privileges with fewer than 1,500 hours total time as a pilot. The proposal also would require at least 1,000 flight hours in air carrier operations in order to serve as a pilot in command in part 121 air carrier operations.  The proposed requirements would most affect any individual seeking an ATP certificate with an airplane category multiengine class rating. The proposed requirements would also affect any person wanting to serve as pilot in command (PIC) in part 121 air carrier operations as well as an individual wishing to serve as PIC or second in command (SIC) (Federal Aviation Administration, 2012).  I can see this affecting future pilots because of required flying time increased because of this NPRM.         

The way I see the proposed rules affecting my career in Aviation Management is searching for pilots who meet these new requirements to fulfill a pilot position that operates under part 121, 135, 141, 142 or 91 subpart K.  As I’m just listing one management job duty, I’m not certain what management position may be in store for me in the near future after graduation as entering into the aviation industry but I will say that it may require managers extensive training in the aviation field of safety or Systems Management Safety (SMS); section 215-requirements that needs to be met for maximum safety for our flying public.  I truly think that the curriculum for aviation management programs will change if not done so already for learning leading to safety.

It will definitely benefit EMU aviation program and other flight schools due to the increase in minimum of required flying time for students.  However, beneficial to all flight schools, the demand of profit will increase and bring more income to schools/certified flight instructors (CFI).  Students will have more familiarity and flight experience in the air due to more flying time required, and more advanced airplanes maybe supplied to flight schools.  The only one flaw this may have on flight schools is keeping young students in the air because of the cost of flying.  This was one reason why I switched over to Aviation Management as my career because the cost of flying is just shockingly high and was not able to manage the expenses to continue flying at the time given.

I do feel that the changes are a good idea.  The most important is to allow pilots to experience more time flying passengers all over the world.  Operating under Part 121, and with this signed law taking place, pilots will be highly qualified to fly for any carrier of their choice in aviation.  However, these requirements "might" reduce accidents in aviation, improper reaction (human factor) will always play a role if not pertaining to aircraft malfunctions.

 

Federal Aviation Administration. (2012, February 29). Pilot Certification and Qualification           Requirements  for Air Carrier Operations. Retrieved January 25, 2013, from gpo.gov: http://www.gpo.gov/fdsys/pkg/FR-2012-02-29/pdf/2012-4627.pdf

US Congress . (2010, August 1). Airline Safety and Federal Aviation Administration Expansion     Act of   2010. Retrieved January 25, 2013, from gpo.gov:   http://www.gpo.gov/fdsys/pkg/PLAW-111publ216/pdf/PLAW-111publ216.pdf