An Emirates 777-31H/ER sits in a delivery stall at the Boeing Paine Field – Photo – Bernie Leighton | AirlineReporter
It’s that time again. Time for me to give you some of my personal thoughts on a topic. Some might call it a rant.
You know the time when an American aviation lobby group decides that there’s just too much competition in the world? Not only is it the “Big Three” themselves, but also an aviation lobbying group backed by them. Combined, these companies and interest groups can bring a lot more lobbying firepower to the table.
Their argument, as is everyone’s against someone who does business differently than them, is the old fallacy of “if their costs are lower than ours, it must be the result of either unfair trade practices or shady accounting.”
This time, the argument is about how Gulf airlines Emirates, Etihad, and Qatar Airways may have received launch subsidies. Indeed, the argument goes further and states that they are continuing to receive subsidies to fuel their current expansion and operation.
Airports are a complicated part of the airline business. Planes, vehicles, and people are constantly in motion, sometimes 24 hours per day. This video gives a pretty good idea of what goes down, during the typical day at Salt Lake City International Airport (SLC).
Airline flydubai is one of the fastest growing low-cost carriers (LCCs) in the Middle Eastern region. Since commencement of operations in 2009, flydubai’s network has grown considerably and today they operate to over 83 destinations with a fleet of more than 45 Boeing 737-800s.
Flights to Prague commenced in December 2014 and, at present, Prague is the furtherest destination that flydubai operates. I decided to book my next trip to the UAE with flydubai, as their fare was by far the cheapest. Fares on the Prague-Dubai route start at US$230 for a round-trip (including checked luggage and a meal).
Not a bad view on the way to Dubai – Photo: Jacob Pfleger | AirlineReporter
As this was an LCC and a relatively long flight on the 737, I decided to pay the extra US$20 each way for an exit row seat, which was well worth it. One criticism I have is that at present, flydubai only offers on-line check-in on flights originating from Dubai; this means I had to check-in at the airport, something I have not done in a very long time.
King County International Airport, or Boeing Field (BFI) as it is commonly known, is the largest business and general aviation airport in the Seattle area. If you are flying your Gulfstream or Challenger in to Seattle, this is the place you are likely going to be landing.
The line up of brand new Boeing 737s at BFI – Photo: Bernie Leighton
There are a few scheduled services in and out of this airport, which include Kenmore Air Express and cargo flights with UPS & DHL (FedEx is based at SeaTac). The major traffic at this airport comes from general aviation, business jets via the Fixed Base Operators (FBOs), and Boeing test flights.
Because of this diversity, BFI is a great place to go aircraft spotting.
Bombardier’s in a bad way lately. Their stock has hit some heavy chop, recently dropping 32% in a three-day period. There’s a margin warning. The company is pricing in a “bankruptcy scenario”. On top of that, the stock fell 11% after they announced the removal of their troubled CEO.
The company is ridiculously leveraged. The cost of a credit default swap on Bombardier has risen 500 basis points. There are even serious questions regarding the company’s liquidity.
The Learjet 85 – Photo: Bombardier
This whole mess started when the company announced that it was “pausing” its advanced, composite, Learjet 85 for an indefinite period of time due to lack of demand. Now, canceling a business jet should not result in massive investor panic and questions over the viability of a commercial program. The problem is, Bombardier finances a lot of its projects off of the revenue generated by its business jet division and debt. The CRJ and Q400 program, along with trains, are relatively low margin.
There’s a reason investors are starting to, in the words of one firm “[give] up hope.”
Bombardier is suspending its shareholder dividends and working on raising an additional $2.1 billion in capital.
The thing is, in the paraphrased words of Richard Aboulafia at the Teal Group, these moves display a startling amount of intelligence and transparency. The question is, is it too late for Bombardier?
