Southwest Airlines says that it lost almost a billion dollars in operating income due to the grounding of the Boeing 737 Max aircraft, as it joins other airlines in scrambling to find capacity and make up for the jet’s ongoing problems. “I am confident about the Max, and our pilots are confident about the Max,” chief executive Gary Kelly tells analysts on the company’s earnings call on 23 January. “The timing remains uncertain, and we are working through all that right now.”
Kelly says that 2019 full-year operating profit was $828 million, 28% lower than had the Max been flying in the airline’s all-737 fleet. “The grounding of 75 of our airplanes, or about ten percent of our fleet, presents a crisis-like challenge for our team," he says. The Dallas-based carrier’s net profit in the full year 2019 fell to $2.3 billion from $2.4 billion in 2018. In the final quarter of 2019, net profit hit $514 million, down 21% from $654 million in the same quarter a year ago. Full-year revenues rose to $22.4 billion from $21.9 billion, up 2.1%. In the fourth quarter alone, Southwest had revenue of $5.7 billion, flat from the year-ago quarter. The airline has taken the aircraft out of its schedule until 6 June but will likely have to extend that as more information becomes available, executives say. In order to reduce some of the fleet deficit created by the lack of the newer generation, lower fuel burn 737 Max aircraft, the airline is planning on postponing 7 of 18 retirements of older 737-700 aircraft this year. These will fly 2 more years, chief financial officer Tammy Romo says.

Source: Cirium

Operators of Rolls-Royce-powered Airbus A380s are set to be ordered to inspect the type’s engines for cracking of spacers between intermediate-pressure compressor discs. The European Union Aviation Safety Agency says examination of a Trent 900 rotor shaft revealed a crack in an interstage spacer between the stage two and stage three discs, and that a similar crack was subsequently found – in the same location – on another rotor shaft. “Investigation is ongoing to identify the cause of these cracks,” it states. “It has been determined that more engines could be affected by this cracking phenomenon.” EASA warns that the condition could potentially lead to failure of the intermediate pressure compressor rotor shaft and release of high-energy debris. Rolls-Royce has published inspection instructions and EASA is proposing to mandate the checks through an airworthiness directive. It will require on-wing borescope inspections – for certain engines – within 200 cycles, but will also order repetitive in-shop inspections of the rotor shaft. EASA is also proposing inspection of certain shafts prior to installation. Engines found to have cracks would have to be withdrawn from service before the aircraft’s next flight. Emirates and Singapore Airlines are the largest operators of Trent-powered A380s, with Lufthansa, British Airways and Qantas among other major customers.

Source: Cirium

South Africa’s ruling political party insists that embattled South African Airways should be restructured and retained as the country’s flag-carrier. The African National Congress made the declaration following strategy meetings of its national executive council over 17-20 January. It states that SAA should be “retained as a national airline” but that this will require “substantial restructuring” of the company. “Cabinet should take the operational decisions needed to achieve that aim,” it adds. The ANC states that it received details of the situation at SAA – as well as another state enterprise, electricity firm Eskom – along with “specific proposals” to improve the companies’ performance. It refers to the negative impact of historical agreements on SAA, including aircraft leases and evergreen contracts. Broadly, it says government oversight of public enterprises should be “streamlined” in order for the government to respond “more rapidly and rigorously” when problems arise. “Appropriate forms of partnership with private companies, investors and workers will be considered where it will enable the public enterprises better to fulfil their developmental role,” the ANC adds. Government support is needed to maintain the capabilities of the public enterprises, it states, but this must be contingent on their acting more efficiently. Such support, it says, “cannot be a blank cheque” that allows continuation of wasteful, inefficient and – in some cases – corrupt practices.

Source: Cirium