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2013: The year ahead in air travel
"Will they or won’t they” might be the theme of a dicey year in commercial aviation. Here are 10 stories to watch
About the only thing aviation industry insiders are clear on heading into 2013 is that there are very few sure bets to be had.
Following a banner 2012 highlighted by a thousand or so orders for its 737 MAX aircraft, Boeing faces a possible workers strike. Fallout could be devastating.
Details of international airline mergers and takeovers remain to be worked out and approved.
The fate of Europe's controversial Emissions Trading Scheme (ETS) carbon tax is still up in the air.
More on CNN: 2012: The year in aviation
Still, there's one thing we do know. The Paris Air Show in June will be the focal point of the year and should answer at least a few of the industry's burning questions.
Here are the other stories that will shape the coming year in aviation.
10. Possible strike at Boeing
Perhaps the first “Will they or won’t they?” moment of the year, Boeing’s engineering union, Society of Engineering Employees in Aerospace (SPEEA), says it may strike against Boeing on February 1.
A strike would have global implications, as Boeing's international customers would be affected by any lengthy work stoppage.
The last time SPEEA struck for an extended period, 42 days in 2000, Boeing delivered 50 fewer airplanes for the year. In 2009, the machinists union struck Boeing for 57 days and customers worldwide fumed at delivery interruptions.
An SPEEA strike would likely encourage Boeing to shift work to engineers in places like Russia, India and, of course, right-to-work states in the United States.
Theoretically, Airbus might pick up some disgruntled customers, though this is less likely. It’s difficult and costly to switch fleet types and a more compelling reason than a strike would typically be needed.
9. American Airlines to emerge from bankruptcy
The United States' third-largest airline has been in Chapter 11 bankruptcy for more than a year and hopes to exit in March.
US Airways, the smallest of the United States' legacy airlines, wants to merge with American. The combination would create the largest airline in the United States and the world.
Star Alliance carrier US Airways would adopt American’s name and join oneworld, the alliance that includes British Airways and Cathay Pacific Airways. US Airways wouldn’t really bring much to oneworld, which needs beefing up to compete with the larger Star Alliance (led by United and Lufthansa) or SkyTeam (led by Delta Air Lines and the Air France-KLM group).
But a stronger American Airlines would shift the North American market, and one combined with US Airways would provide a needed boost to oneworld.
8. Delta Air Lines/Virgin Atlantic deal to be approved
While waiting for American Airlines' exit from bankruptcy and the possible merger with US Airways, Delta Air Lines agreed in December to purchase the 49 percent share Singapore Airlines held in Britain’s Virgin Atlantic.
Delta is an also-ran at London Heathrow Airport and owning part of Virgin Atlantic would boost its London presence immeasurably, giving the combination about a 25 percent of the market between New York and London.
The deal requires government approvals and should become effective this year.
7. "China Inc." expands country's influence on global aviation
A consortium of companies referred to as “China Inc.” announced in mid-December that it will acquire 80.1 percent of mega-lessor International Lease Finance Corp. (ILFC) from parent AIG, the global insurance company that was bailed out by the U.S. government following the financial meltdown in 2008.
The Chinese group has an option to buy another 9.9 percent of ILFC. The major buyers are China Trust, China Aviation Industrial Fund and P3 Investments. China Life Insurance and ICBC Investment Holdings are in line to take the final tranche.
The acquisition of ILFC instantly makes China a global player in aircraft leasing. Expect its influence to increase.
6. Bombardier's huge gamble CSeries to fly in June
The question is whether the first flight will occur before, during or after the Paris Air Show (June 17-23). Bombardier wants it to fly before. Will it or won’t it? It’s too early to say.
The CSeries is a bet-the-company project. It potentially lifts Bombardier from its traditional role as a regional airplane provider and positions the company squarely against the Airbus' A318/A319/A319neo and Boeing's 737-700/7 MAX.
Sales have been slow while the market decides whether Bombardier can meet its advertisement performance targets in test flights.
5. Boeing’s 787-10 and 777X to launch in June ... probably
Boeing had been expected to launch the 787-10 in 2012, but formal launch of the program is now expected in 2013.
According to the blog Aspire Aviation, the launch will take place in June. Coincidentally (or not) that’s the same month as the Paris Air Show, where Boeing would like to make a big splash.
Widely talked-about launch customers are British Airways, Singapore Airlines, Lufthansa Airlines and Air Lease Corp.
The successor to the popular cash cow, the 777-300ER, is currently known as the 777X. Concepts include a 777-8X, roughly the same size as the -300ER but much more efficient, and the 777-9X, nominally a 407 passenger airplane that's at the low end of the Very Large Aircraft segment that includes the Boeing 747-8 and Airbus A380 superjumbos.
Why the delay?
There's a lot of customer pressure to launch the X sooner than later, but among the reasons for the slip from 2012 to 2013 are the anticipated impact the launch might have on slowing sales of the -300ER, and waiting for Airbus to enter final design for the A350-1000 (see below).
More on CNN: How do you pick up a 'superjumbo' A380?
4. Airbus A350-800, -1000 future to become more clear
Boeing has been engaged in an effective campaign to cast doubt on the smallest and largest members of the Airbus A350 family, the -800 and -1000 respectively.
Airbus hasn’t been nearly as effective in defending the -1000 and its own actions seem to support the doubters of the -800. Airbus has been actively pushing -800 customers to switch to the mainstay, and larger, A350-900, a more profitable model for Airbus than the -800.
There are now fewer than 100 remaining orders for the -800. Airbus insists it will proceed with the model, but the airplane costs about as much as the -900 to operate and the -900 carries more passengers.
Sales stalled for the -1000 for several years and Boeing, aided by Emirates Airlines president Tim Clark, who likes to negotiate in the press, told everyone who would listen that the -1000 isn’t the airplane he wants, despite his being a launch customer.
Airbus announced changes at the 2011 Paris Air Show that increased engine thrust, weights and range, but Boeing’s dissing continued, along with complaints by Clark and Qatar Airways’ CEO Akbar Al-Baker, another customer of the original specification -1000. Clark’s issues haven’t been satisfied, but Al-Baker’s apparently have -- he converted some of his -800 orders to the -1000 (and the remainder to the -900).
Still, final design of the -1000 won’t commence until 2013 and this will affect Boeing’s launch of the 777X. And the future of the -800 remains in doubt.
3. Airbus A350 first flight for Paris Air Show ... probably
Will the A350 make an appearance at the Paris Air Show (PAS)?
The thrice-delayed first flight of the A350-900, the first of the three family models to be developed, is now scheduled for mid-2013.
Airbus, parent EADS and the French government (which owns 15 percent of EADS and which is home to the A350 production line in Toulouse) all want the A350 to fly before the Paris Air Show.
It’s high on many want-to-see lists, but it remains to be seen if it will happen.
2. Fate of European carbon tax scheme
The European Union kicked the can down the road a year on its controversial carbon tax, called Emission Trading Scheme (ETS). China, India, some Middle Eastern countries and the United States told their airlines not to pay the tax.
An anxious EU postponed ETS implementation until October, saying it will wait for the International Civil Aviation Organization trade group to negotiate an agreement.
While passengers will remain largely clueless about the issue, the tax will likely ultimately show up in ticket fees, which often amount to more than the actual fare.
But this is a huge issue to airlines -- and to international trade.
China held hostage Airbus orders pending a resolution to the ETS. When the EU delayed implementation, China quickly affirmed 70 orders for Airbus A320s and A330s.
A carbon tax isn't sexy, but its global implications place ETS near the top of the list of items the industry will be watching and talking about in the coming year.
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1. Paris Air Show 2013
The 2012 Farnborough Air Show was a snoozer. The 2011 Paris Air Show (PAS) was electrified by orders and commitments for about a thousand Airbus A320neos, the re-engined version of the stalwart A320.
Boeing was gobsmacked by the neo’s success and a month later launched the re-engined Boeing 737 MAX, kicking and screaming the whole way.
Anticipation for the PAS revolves around the prospective launch of the Boeing 787-10, the first flight of the Bombardier CSeries and the first flight and possible appearance of the Airbus A350-900.
Will these events happen? Betting is yes, yes and maybe-to-probably yes.
The first flights and program launches tied to the PAS are largely public relations events rather than critical to the evolution of the industry. But the profile of the PAS is such that these events can make or break the success of the Air Show as a media extravaganza.