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Title: AIN:Charter and Fractional

Rival F-16 Upgrades Proceed; Iraq Delivery May Not

Lockheed Martin (LM) and BAE Systems reported progress this month on their rival upgrades for F-16 Fighting Falcons. Two aircraft from each company's launch customer (Taiwan for LM, South Korea for BAE) are now in rework, ironically just a few miles from each other in Fort Worth, Texas. Meanwhile, the ferry of Iraq's first two new Block 52 aircraft in September is looking unlikely.

Bill McHenry, LM's F-16 program director, said that the F-16V upgrade design review is complete, Elbit has delivered some of the new cockpit displays, and Northrop Grumman is due to deliver the first scaleable agile beam radar (SABR) radar later this year. Although the U.S.Air Force can no longer afford the same upgrade, for budget reasons, McHenry noted that the FY2015 defense budget has allocated funds to upgrade the F-16's core computer and for some cockpit upgrades, and speculated that the Air Force would eventually adopt a ‘CAPES-Lite' (the F-16V upgrade was previously designated the Combat Avionics Programmed Extension Suite). For sure, he said, those aircraft must be able to communicate with the stealthy F-22s and F-35s in some way.

A few miles from LM's giant Fort Worth facility, BAE Systems has begun work on two Korean F-16s at Alliance Airport. It says the program marks the first time a non-original equipment manufacturer is performing a major upgrade for a fourth-generation U.S. fighter jet. The BAE upgrade features a rival AESA radar, the Raytheon Air Combat Radar (RACR). BAE claims its solution offers higher-definition displays, greater decoupling of front and rear cockpits of two-seaters, and an Ethernet-based system that allows faster data transfer. Before the first modified KF-16 takes off in 2016, BAE Systems will test-fly the new avionics and radar in a commercial aircraft testbed.

John Bean, v-p and general manager of global fighter programs at BAE Systems, said that between 1,000 and 1,300 of the approximately 3,000 F-16s flying today are ripe for upgrade, representing approximately $10 billion of potential business over the next decade. "We expect to get the majority of that work," he added. BAE also hopes that the U.S. Air Force competes any ‘CAPES-Lite' work rather than awards it sole-source to LM.

Earlier this year, LM and BAE were in a dogfight over who will upgrade some  60 F-16C/Ds for Singapore, with LM apparently on the inside track. The island state has still not made its choice, it seems. "We believe they have taken a pause to re-evaluate," said BAE's Bean. "We're still in dialogue," said LM's McHenry. Greece could be the next battleground.

Meanwhile, LM continues to offer structural improvements that extend the service life of Block 40s and 50s from 8,000 to 10,000 or 12,000 hours, and two distinct avionics updates to Block 20s and 30s. And there are approximately 40 new-build Block 50 aircraft in the backlog, extending production to 2017 in theory.

But 34 of those are for Iraq, two having already flown and been ceremonially handed over at Fort Worth. This first pair are due to be ferried to Balad airbase in Iraq in September, and the first four Iraqi F-16 pilots have been trained. But McHenry reported that the 23 Lockheed Martin personnel already preparing Balad were evacuated to Baghdad at the U.S. government's request, when ISIS forces advanced south last month. "Everything was moving along, but now it's up in the air," McHenry said.

July 23, 2014, 4:07 PM

AIN Blog: MH17 Insurer Pledges Payments as Liability Questions Loom

The lead insurer for Malaysia Airlines war risk hull coverage, London-based Atrium Underwriting Group, has agreed to settle its share of the latest hull loss suffered by Malaysia Airlines. Western military intelligence suggests that separatists in eastern Ukraine shot down Flight MH17 as it flew at 33,000 feet over a region near Donetsk, killing all 298 on board.

Extrapolating from a liability allowance of $150,000 per passenger as prescribed by the Montreal Convention, war risk payouts apart from hull loss compensation would approach a minimum of some $45 million. But depending on what courts around the world judge the extent of Malaysia Airlines responsibility for the disaster, the total amount of damages the airline might incur stands to increase exponentially.

Still, the answer to the question of liability becomes murkier when one considers that Malaysia Airlines technically did nothing outside operating norms as they apply today. Individual countries ultimately determine whether or not to close the airspace over their territories, and, in this case, Ukraine restricted access to the airspace over the area around Donetsk up to only 32,000 feet. Although some airlines such as Qantas decided on their own to circumnavigate the area, no authority had even issued a Notice to Airmen (Notam) directing its respective operators to do so. As a result, most airlines continued to fly directly over the war zone, as they do in many other global "hotspots."

Immediately after the downing of MH17, the U.S. Federal Aviation Administration did issue a Notam instructing operators registered in its country not to fly over the area. Other aviation authorities followed suit. Now, many of the same authorities have banned their operators from flying into and out of Tel Aviv after a Hamas rocket landed in a neighborhood roughly a mile away from Ben Gurion International Airport.

Israeli officials have characterized the move by the FAA as an overreaction, insisting that airlines run no particular risk by operating into Ben Gurion. Of course, sensitivity to such risk has increased since last Thursday, not least among insurance companies.

While courts will ultimately answer the question of whether Malaysia Airlines assumed undue risk flying over Donetsk, the International Air Transport Association appears willing to advocate for its member airline.

"No airline will risk the safety of [its] passengers, crew and aircraft for the sake of fuel savings," said IATA director general Tony Tyler. "Airlines depend on governments and air traffic control authorities to advise which airspace is available for flight, and they plan within those limits...It is very similar to driving a car. If the road is open, you assume that it is safe. If it's closed you find an alternate route."


July 23, 2014, 4:00 PM

Trade Associations Weigh in on Foreign Mx Drug Testing

A coalition of aviation trade associations spoke out on behalf of the international maintenance, repair and overhaul market. While the matter at hand was drug and alcohol testing at foreign aviation repair stations, the Aeronautical Repair Station Association says that what is really at stake is international sovereignty, the health of the global aeronautical business community and the safety of the flying public worldwide.

Daniel Fisher, ARSA's vice president of legislative affairs, told AIN, "The aviation industry is unequivocally united in its belief that this rulemaking has the potential to detrimentally impact the global aviation sector with no real safety benefit. The complexity of the drug and alcohol testing laws of sovereign countries and the need to respect international agreements necessitates ICAO's involvement, not unilateral FAA action."

ARSA, which is leading the coalition's efforts, is joined by the Aerospace Industries Association, Airlines for America, Cargo Airline Association, General Aviation Manufacturers Association, International Air Transport Association, National Air Carrier Association and Regional Airline Association. The coalition submitted comments to the FAA in response to the agency's advanced notice of proposed rulemaking. The ANPRM is the first stage of a process that could impose testing requirements on aviation maintenance providers around the globe. Additionally, the FAA is considering expanding the rulemaking to include maintenance personnel working at certain non-certified repair stations.

Fisher added, "We're asking the FAA to remember that good safety is good business. This is a solution in search of a problem, not a good-faith effort to protect the public. In the end, this rule would impose costs on businesses, their customers and passengers worldwide while producing no additional safety benefit."

The coalition asked the FAA to adhere to congressional language requiring any such rule be "consistent with the applicable laws" of the countries involved.Brett Levanto, ARSA's operations director, pointed out that this is more than a legal issue. The American imposition of testing requirements could damage bilateral aviation safety agreements (BASAs) and weaken the small businesses that are the industry's backbone.

He said, "In the lead-up to the FAA's extension of the comment deadline, our team, mostly Daniel [Fisher] and Crystal Maguire, our vice president of operations, had been hearing a lot from the rest of our allies about all of the work they were doing–or were planning to do–to address the ANPRM. After the extension, everyone got together on a conference call with the simple goal of making sure we didn't duplicate effort and waste time."

"After a couple of calls, a really powerful strategy emerged," Levanto continued. "Let each association focus their own submissions on their strongest areas of expertise and best serve their individual constituencies while joining together to send some kind of single message to the FAA. The coalition comments were a tool for us all to speak with one voice, simply and clearly, and tell the agency that a final rule would be all downside, another burden on businesses without any direct benefit to the flying public."

The coalition's perspective is not without critics. The Transportation Trades Department of the AFL-CIO (TTD) submitted comments to the FAA urging the swift implementation of a statute requiring foreign-based aircraft repair facilities working on U.S. aircraft to be held to the same alcohol and drug testing standards as those based in the U.S."The time is now to end a double standard that has permitted FAA-approved foreign aircraft repair stations to evade significant safety requirements for more than 25 years," said TTD president Edward Wytkind.

July 23, 2014, 3:45 PM

Jet Aviation Resumes Full Mx Operations in Dubai

With runway construction nearing completion, Jet Aviation Dubai has resumed full operations from its maintenance facility and newly refurbished FBO at Dubai International Airport. The company took the opportunity to rebrand its FBO while the airport resurfaced its runway in order to integrate the new corporate look and feel initially launched at the Jet Aviation facilities in Geneva and Zurich last year.

In addition to the rebranding, the FBO now offers airside duty-free shopping. Jet Aviation Dubai's maintenance and FBO location was established in May 2005 as a joint venture with the Al Mulla Group. The facility has 45,192 sq ft of hangar space, a workshop area of 10,760 sq ft and a two-story, 11,300-sq-ft FBO building. The facility holds EASA, FAA, Bahrain CAA, Indian DGCA, Saudi Arabian GACA and UAE GCAA approvals. The MRO is also an authorized service center for maintenance and warranty support for the BBJ, the Gulfstream G150, G200, GIV and GV, G450, G550 and G650, Dassault Falcon 900s, 2000s and 7X, and it provides full service for the Hawker 800/900 series, Airbus ACJ series and Embraer Legacy, including L4 and L12 inspections.

July 23, 2014, 3:40 PM