Carriers adapting to the outbreak of coronavirus, or COVID-19, and its stifling effect on China's economy face less pressure from fuel costs following a year-on-year drop in Brent crude futures prices since January. Demand for oil is poised for its first quarterly contraction in a decade, the International Energy Agency states in its monthly report for February. Lower-than-expected consumption in 2019 trimmed global oil demand growth to 885,000 barrels per day, but following the coronavirus outbreak the trade group states global oil demand growth will fall by 435,000 barrels per day year-on-year during the first quarter. The IEA has cut its 2020 growth forecast to 825 barrels per day, the lowest growth rate since 2011. Aircraft fuel is among the biggest expenses for airlines, positioning those companies for a windfall from decreased global oil demand. Brent crude began its recent slide around 21 January, just before Asia-based carriers Cathay Dragon, Scoot and China Airlines suspended flights to the Chinese city of Wuhan, where the outbreak of coronavirus was first reported. Values slid from $64.59 on 21 January to a 2020 low of $53.27 on 10 February. Brent crude rose to $58.70 on 19 February "following a decline in the number of new coronavirus cases", Nasdaq wrote in an investor note. Cases of coronavirus have been reported in the USA, but Asia-based carriers are facing the most cost pressure from lack of air travel demand compared with US carriers that have temporarily suspended flights to and from China, including United Airlines. Chinese carriers, in particular, have had to cut flights both domestically and internationally to contain the outbreak and respond to travel restrictions imposed around the world.

Source: Cirium

Nepalese investigators have attributed a fatal take-off excursion, involving an Aircraft industries Let L-410, to differential thrust following retardation of one throttle lever – but have been unable to determine the reason why the lever slipped back. The Summit Air turboprop had commenced its take-off roll from Lukla's runway 24, with the first officer flying, but within 3s the aircraft started veering to the right. It left the runway, travelling along grass, before hitting an inner perimeter fence and careering into a helipad, fatally striking two ground personnel and colliding with a helicopter. The L-410’s first officer received fatal injuries from the helicopter’s rotor. Nepal’s Aircraft Accident Investigation Commission found that, about 2s after the aircraft’s brakes were released for take-off, there was an “abrupt shifting” of the right-hand throttle lever rearwards. But the inquiry into the accident, on 14 April last year, says the specific reason for the sudden lever shift “couldn’t be identified”. The probe was hampered by an absence of cockpit-voice recorder information – which the inquiry believes resulted from incorrect installation of the recorder – as well as a lack of recordings from the control tower. Investigators instead relied on surveillance camera footage, interviews with controllers and the surviving pilot, and flight-data recorder analysis. The inquiry says the captain, as an instructor pilot, handed over controls for take-off to the first officer after line-up. According to the captain, the aircraft had some previous technical issues regarding the “friction lock and power lever”, and that normal practice involved keeping a hand on the throttle during the take-off roll. But the inquiry says the first officer removed his hand from the throttle to hold the control column, and that the captain did not use his own hand to guard the throttle position. Flight-data recordings indicate that, at brake release, the engines’ propeller speeds were the same but the right-hand torque was higher than the left. But the right-hand engine speed and torque began to fall moments later, and the aircraft veered towards a steep slope 28m from the threshold. “When [the captain] realised that the aircraft was veering towards [the] right, he took over the aircraft controls from the [first officer],” says the inquiry. While he understood the right-hand throttle was shifting backwards, he advanced it in a bid to correct the L-410’s course and applied foot braking. But the right brake proved to be “more effective”, the inquiry says, and this exacerbated the aircraft’s tendency to veer to the right. Only three occupants had been on board the L-410. The captain and a flight attendant survived. Investigators point out that there was evidence of “complacency” from the crew, possibly arising from the operation of repetitive short flights on the same sector in a lightly-laden aircraft with fair weather.

Source: Cirium

Boeing has asked for its tax breaks to be suspended amid an acrimonious and escalating trade war between the USA and the European Union, targeting its respective aircraft manufacturers, that threatens to play long-term havoc on aircraft deliveries on both continents. Lawmakers in the northwestern US state of Washington, where Boeing has a sizable presence, say they will introduce bills to stop giving the Chicago-headquartered plane-maker preferential tax incentives, dating back to 2003, until the USA and the European Union resolve their trade disputes. Boeing says it supports these changes. “Boeing applauds the actions today by Washington State leaders to introduce this legislation,” the company says in a statement on 19 February. “We fully support and have advocated for this action. When enacted, this legislation will resolve the sole finding against the United States in the long-running trade disputes between Europe and the United States over government support for the production of large commercial airplanes. This legislation demonstrates the commitment of Washington—and of the United States—to fair and rules-based trade, and to compliance with the WTO’s rulings.” The request is the latest move in an escalating trade dispute between US and European regulators. Last week, the Office of the US Trade Representative raised its tariffs on large European aircraft to 15%, up from the 10% levy implemented last October, in an ongoing disagreement over subsidies. At the centre of the ruling last October were EU subsidies for Boeing’s European rival Airbus, which the arbitrator heavily criticised as being “WTO-inconsistent”, and causing adverse effects to the USA. While the USTR was permitted to impose up to 100% tariffs on $7.5 billion of goods — including Airbus jets — the office said at the time it would initially impose 10% levies on new commercial aircraft of more than 30t, and 25% levies on other products such as Irish and Scotch whiskey, German machinery, and cheese. Airbus said earlier this week that it “deeply regrets” the increase, and warns that, as well as escalating the dispute, it creates “more instability” for those US carriers which are “already suffering from a shortage of aircraft”. The aerospace industry is waiting for a second case, currently before the WTO, to be resolved. It targets subsidies that Boeing received through various federal, state and local authorities, particularly in Washington and South Carolina as well as the city of Wichita, Kansas. European trade regulators promised a counterstrike to the USTR measures against European companies once a decision is made. The European Commission already drew up a list of US export targets collectively worth about $20 billion – far greater than the $7.5 billion of countermeasures granted by the WTO to the US government, which had been pursuing remedies for $11 billion of harm caused by EU subsidies. Airbus says it hopes the US Trade Representative will change its position once the World Trade Organization authorises these countermeasures – which are set to affect imports of the 777, 787 and 737 Max – around May-June. Washington State Governor Jay Inslee on Wednesday urged legislators to address the trade issues, “in order to avoid retaliatory tariffs that would damage not just our commercial aircraft industry, but other important Washington exports.” ”The potential negative impact of that is highlighted by the fact that Boeing has said it would like that tax incentive at least suspended until the issue is fully settled with the European Union,” Inslee says. He calls the bills in Congress “just a starting point”. In Wednesday’s statement, Boeing addresses “the billions of dollars of illegal ‘launch aid’ subsidies that have been provided to Airbus, which the WTO has repeatedly found to violate global trade rules, stand unresolved.” “Now is the time for Airbus and the European Union to finally come into compliance by ending illegal launch aid subsidies once and for all and addressing the harm they have caused the United States aerospace industry and its workers,” Boeing adds.

Source: Cirium