Boeing anticipates its Commercial Airplanes unit’s workforce will be reduced by 8% by the end of 2016 compared to January, and it is planning additional employee reductions in the unit in 2017, which could include involuntary layoffs. Boeing revealed last week that the 777 production rate will be reduced from 7 per month to 5 per month in August 2017. “The recent 777 rate-reduction announcement is the latest sign that the market is signalling near-term hesitation for twin-aisle aircraft in certain regions,” Boeing Commercial Airplanes president and CE Kevin McAllister wrote in the message to Boeing Commercial Airplanes employees. “But it also illustrates the dynamic business climate in which we currently operate; an environment characterised by fewer sales opportunities and tough competition.” <br/>
general
What airline passenger hasn’t felt the let-down? You board a long-haul flight, ready to settle in for hours of binge-watching a popular television series or movie franchise, only to discover the plane’s on board entertainment is stuck in a time warp. For a public increasingly accustomed to nearly ubiquitous internet access, with on-demand video and continuous social media feeds, the airline cabin too often feels like a final, frustrating frontier. But David Dicko is among the many taking aim at in-flight entertainment ennui. His start-up, SkyLights, has built a virtual reality headset that allows travellers to watch the latest 3-D Hollywood releases at their seats. Dicko’s 3-D headset is part of an industrywide push to bring carriers’ in-flight entertainment up to the standards that many passengers now expect when they travel by car or train. <br/>
Airbnb is developing a service for booking air travel as the home-rental start-up looks to compete with Priceline and Expedia for more of people’s online travel spending. Development of the flight-booking feature is early, and the company is considering various routes to break into the business, said people familiar with the plans. Airbnb may acquire an online travel agency or license data from a provider, such as Amadeus or Sabre, said the people. Within the company, the project is simply known as Flights, the people said. Airbnb aims to get Flights off the ground before it pursues an initial public offering, which is likely in the next 18 months, the people said. Moving into flights would be a shot across the bows of Priceline and Expedia, which operate the largest sites for flight searches and bookings. <br/>
London’s third airport, Stansted, is to build a separate arrivals building to allow for future expansion. The GBP130m (US$160m) building will take around 3 years to complete. The airport’s operator, Manchester Airports Group (MAG), which also operates the Manchester, East Midlands and Bournemouth airports, says Stansted has the greatest number of European destinations of any UK airport. The airport has a current throughput of around 24m passengers, and is currently the busiest single terminal airport in the UK. The plan being submitted to local planning authorities focuses on providing new facilities that will allow Stansted to grow to its current planning limit of 35m passengers and, potentially, up to the airport’s single-runway design capacity of 43m. <br/>
Air travellers globally are bracing for higher fares after OPEC decided last month to cut output. Not in India, the world’s fastest-growing major aviation market. Carriers cut fares in November and are selling tickets about 12% cheaper on average for Mumbai-New Delhi flights from a year ago. The steepest discounts were as much as 30% for the world’s seventh-busiest local route. The slashing of fares during the peak holiday travel season threatens to wipe out gains accrued from cheap oil and push some of the operators back to losses. Carriers in China and India are expanding capacity with orders for hundreds of planes and luring passengers with discounts. Excess capacity combined with tickets offering base fares have constrained the ability of Indian carriers to translate an increase in passenger traffic to profits. <br/>
The boom times are fading for the Middle East carriers whose rapid expansion has sparked a nasty war of words with European and US rivals in their battle for customers. Abu Dhabi’s Etihad Airways said late Sunday it will slash an unspecified number of jobs as part of a companywide restructuring triggered by slowing growth amid a weakening global economy. The Persian Gulf state-owned airlines have flourished in recent years, luring passengers from rivals by offering lavish amenities on their quickly-growing fleets of new planes. But a prolonged slump in the price of oil and a more muted global growth outlook has hit corporate bookings in many of the emerging markets served by the Mideast carriers, forcing them to reassess growth plans. <br/>
New rules governing Chinese airline start-ups are fuelling hopes at Embraer, Bombardier and other regional jet makers for a spike in orders next year, but local competition and doubts about size restrictions still loom as major obstacles. The new policy is aimed at encouraging fledgling carriers to boost domestic flights serving secondary markets in China rather than focusing exclusively on big cities. The 3-month old policy has still not been published in its entirety, leaving the industry guessing on some key details. But provisions include scaling back access to major hubs and a requirement that new regional carriers operate at least 25 smaller city-hopper jets before graduating to bigger aircraft. That could translate into Chinese demand for more than 250 new regional jets in the next 2 years. <br/>