Princess Juliana International Airport Media

Archive for 2007

The airline industry has cut its forecast for profits next year by a third as soaring fuel costs and the credit crunch begin to take their toll.

The International Air Transport Association (IATA) predicted yesterday that the global aviation business would make profits of $5 billion (£2.4 billion) in 2008, compared with a previous forecast of $7.8 billion. The greatest burden on airlines next year will be fuel prices, with the spike in charges set to add $14 billion to the industry fuel bill, to $149 billion, based on an average price of $78 per barrel.

The impact of the credit crunch is also expected to lead to slower revenue and traffic growth. The delivery of new, bigger aircraft will make the problem worse, with a greater numbers seat competing for a smaller number of passengers.

Giovanni Bisignani, the IATA director-general, said: “The challenges get tougher in 2008. A favourable economic environment and effective efficiency measures helped to mitigate the impact of high fuel prices and underpinned profitability improvements. With the credit crunch, that is changing. The peak of the business cycle is over and we are still $190 billion in debt. So we could be heading for a downturn with little cash in the bank to cushion the fall.”

The predicted downturn would come after the sector’s first profitable year since the terrorist attacks of September 11, 2001. The global industry is set to make profits of $5.6 billion this year.

North American carriers are expected to see the largest fall in profitability, partly because they have the oldest and, therefore, least fuel-efficient aircraft. The region is also at the centre of the credit crisis, with implications for business travel.

British Airways poured cold water on the IATA predictions and their potential impact on its lucrative transatlantic market, saying that it was experiencing no slowdown in traffic in the final months of the year and was confident for the year ahead. November traffic figures released by BA last week show that long-haul markets are strong, but there is some indication that business-class passengers are choosing to travel in economy for short-haul trips.

European carriers have been particularly concerned about the impact of the credit crunch. Premium travellers, usually business customers, account for 25 per cent of traffic for the top five European airlines on transatlantic flights, compared with 15 per cent for the leading American carriers. MaxJet, the Stansted-based business class-only airline, which floated on the AIM market in June, suspended its shares last Friday because of financial difficulties thought to have been caused by a combination of a fierce price war and soaring fuel costs.

The IATA has predicted that European and Asian carriers would experience only minor falls in profitability, of $100 million each to $2 billion and $600 million respectively.

Despite the problems, profitability of the Latin American air industry will improve by $100 million, allowing the region to break even in 2008, largely as a result of industry restructuring.

TaxiwayEcho.com ( http://www.taxiwayecho.com/ ) is the latest website to cater to aviation enthusiasts. The info/entertainment website, belonging to Licious Industries, is the brainchild of the company’s founder and CEO Bob Engelhardt.

The featured content on the website is research-based predictions regarding new nonstop domestic routes in the U.S. that have high likelihoods of being established by passenger airlines. Wondering if an airline might start nonstop service between Pittsburgh and Des Moines?

You can go to http://www.taxiwayecho.com/NewRoutePredictions/tabid/71/Default.aspx , find the Pittsburgh section, and see if Des Moines (DSM) is one of the five airports listed. If Des Moines is not one of those five airports listed, you can sign up for a premium membership which allows you to see up to fifteen predictions for new nonstop destinations from Pittsburgh.

With predictions available for 75 airports, a premium membership grants the user access to as many as 1125 new route predictions on the website, compared to 375 for free users. The website has a forum ( http://www.taxiwayecho.com/TheRunUpArea/tabid/55/Default.aspx ) where users can discuss the predictions, along with voting polls in each airport section where users can vote on which new nonstop destination they think will be added next. “The forum is a key component of this website,” says Engelhardt, a lifelong aviation enthusiast. “Enthusiasts really enjoy talking about new nonstop routes; it’s always a hot topic.”

There are also plans for a weekly podcast, in which Engelhardt will discuss aviation news topics from that week and give his opinions on a variety of issues from the aviation industry.

Montreal, 30 November 2007 – Global Air Transport – a driver of sustainable economic, social and cultural development is the theme for the 2007 edition of International Civil Aviation Day, celebrated annually on 7 December to mark the creation of the International Civil Aviation Organization (ICAO) on that day in 1944.

The purpose of the annual celebration is to establish and reinforce worldwide awareness of the importance of international civil aviation in the social and economic development of States. The role of ICAO in promoting the safety, efficiency and regularity of international air transport is emphasized in this context.

International Civil Aviation Day was first celebrated on 7 December 1994 to mark the 50th anniversary of the signing of the Convention on International Civil Aviation, the charter of ICAO. In  1996, pursuant to an ICAO initiative and with the assistance of the Canadian Government, the United Nations General Assembly by resolution officially recognized 7 December as International Civil Aviation Day and listed it as an official UN day.

Every year, States are encouraged to develop programmes of activities. Flag raisings, award presentations, air shows, exhibitions, tours and symposia can all be part of these programmes throughout the year. A brief description of International Civil Aviation Day, news releases as well as messages from the President of the Council and the Secretary General from previous celebrations can be viewed at the ICAO website: www.icao.int.

Note to Editors: ICAO has developed guidelines to help States evaluate the contribution of their civil aviation industries to a given local, regional or national economy. Circular 292 – Vol. 2, is available through ICAO’s Document Sales Unit at www.icao.int/icao/en/m_publications.htm

visit:

http://www.icao.int/icao/en/aviation_day.htm

December 10, 2007

European airlines should face stiffer penalties for losing luggage after complaints against carriers almost doubled, Europe’s consumer watchdog said.

“Lost luggage” topped the list of complaints against airlines in a report compiled by the European Consumer Centre (ECC) — which covers the European Union, Iceland and Norway — with Irish carriers Ryanair and Aer Lingus the biggest offenders.

“The total of complaints made rose to 2,979 in 2006 from 1,521 a year earlier,” the report said, adding that problems with luggage accounted for 33 percent of claims, while 26 percent of complaints concerned cancellations and 16 percent were due to delays.

In its report, the ECC recommends greater penalties for lost luggage and for an automatic mandatory payment for passengers to purchase emergency items when their luggage is lost. It said it had yet to determine how much this payment should be.

“Most of the complaints in 2006 are against the same airline companies as in 2005… from Ireland, Spain, United Kingdom, Italy, Germany and France. It is also shown that consumers from Ireland, Sweden, Germany, Spain, Italy and Belgium make the most complaints,” the report said.

“In the first six months of 2007… some 1,500 complaints and disputes relating to air travel have been received. This is on par with the number of complaints received in 2006 and it remains to be seen whether an increase will be recorded, once complaints received after the busy summer period have been counted.”

Although the report does not specify which airlines are responsible for the complaints, 612 angry passengers complained after travelling with “Irish airlines” — up 181 percent from 2005. Ryanair dismissed the importance of the report.

“The ECC received just over 400 complaints about Ryanair which equates to just 8 letters for every 1 million passengers carried by Ryanair. This is less than 10 complaints a week,” it said in a statement.

But ECC said the complaints received represent the tip of the iceberg.

“The analysis of complaints received by ECC-Net relating to air travel should, therefore, be read within a wider context,” it said in a statement.

(Reuters)

December 10, 2007

French Prime Minister Francois Fillon said on Monday the government would try to dissuade Airbus parent EADS from its plan to shift jobs outside the euro zone to help it cope with the euro’s strength.

“The state as shareholder will do everything to dissuade EADS from delocalizing its production,” he said in an interview with Les Echos daily.

EADS has said Airbus, which already plans to shed 10,000 jobs and sell factories in Europe, could shift jobs on a large scale to the dollar zone to help reduce currency exposure and compete with rival Boeing of the United States.

The euro’s recent rise to record highs above USD$1.496 has eroded the value of euro zone exporters’ dollar earnings and made euro-denominated price tags look more expensive to foreign buyers.

“The government is very aware of the problems the euro’s level poses for the aeronautical industry. The president (Nicolas Sarkozy) has not stopped sounding the alarm to our partners and the monetary authorities,” Fillon said.

“All the same, Airbus will not overcome this difficulty by delocalizing. You don’t respond to a purely cyclical problem by strategic decisions which commit you in the long term.”

Arnaud Lagardere, whose family conglomerate owns 7.5 percent of Europe’s largest aerospace group, said on Sunday the plan to move jobs out of the euro zone would not go against EADS’ interests and that the French state would not do anything that harms the interests of EADS.

Fillon chose to put a different emphasis: “France and Germany invested heavily in Airbus. It wasn’t to see it leave in pieces towards the dollar zone.”

Asked how the government would go about trying to dissuade the firm from moving jobs abroad, he said more efforts would be made to boost productivity, by helping subcontractors and applying more political pressure.

“France is no longer isolated on the issue of the euro/dollar exchange rate,” he said. “Nicolas Sarkozy has talked about it with American and Chinese leaders. I want us to go further by putting it on the agenda of the G8″ nations.

France has been the most vocal European critic of the euro’s export-denting ascent in the foreign exchange markets and for a long time, was alone in speaking out against its appreciation.

However, Germany and others in the euro zone have recently started to complain about what they termed “disorderly” moves in foreign-exchange rates.

For example, German Finance Minister Peer Steinbrueck said last week the Group of Seven leading industrial nations may need to talk tougher on the dollar.

(Reuters)

A group of entrepreneurs has applied to the Jamaican government to create the first Caribbean low-cost airline. Group head representative Ian Burns said: “We have made a formal application to the Jamaican Civil Aviation Authority under the name of Airone Ventures Ltd, although this isn’t the name that we will be flying under. We have the potential to add one million tourist arrivals to Jamaica within five years, a huge boost to the tourism industry.” The airline will also seek to open new markets and new routes. It will service the Caribbean, the United States and Latin America.

“We have commenced a recruitment drive and will be employing over 200 persons initially during the coming months. We are looking for bright, energetic, dynamic Jamaicans in positions ranging from management to cabin crew,” Burns said. The airline will launch mid-2008.

The Chairman noted that Jamaica had invested in infrastructure by providing excellent facilities at Norman Manley and Donald Sangster International airports. He believes that it can now connect people and businesses and bring far greater access to the region, allowing for Jamaicans and the diaspora to meet on a more frequent basis.

Increased access and more affordable prices are two of the benefits to consumers that the airline will provide. When asked specifically about pricing, the chairman said he would give no further details, but promised that the consumers would be happily surprised.

In relation to the existing competition, he said that there was room for more players and significant growth and that at the end of the day the consumer would be the real winner.
Every region with a low-cost carrier (LCC) has grown tremendously, while the Caribbean, which to this point has not had the benefit of a LCC, has grown at a rate of only one per cent per year, over the past five years.

With the growing interest of the diaspora in their homeland, Airone will facilitate their coming home more often and promote business investments in Jamaican enterprises.
Ian Burns, chairman of Airone, said that the Jamaican government had so far been very receptive and is open for business.

Speaking with Caribbean Business Report last night, Burns said: “We will be providing non-stop airlinks to the Caribbean, the United States and Latin America and will be using Boeing 737-300 aircraft. The idea is to develop Kingston’s Norman Manley International Airport as an international hub for the Caribbean.

Presently, 1.7 million passengers go through it every year and right now infrastructure is being built to accommodate four million passengers a year. In our first year of operations we are projecting to have 376,000 of our passengers pass through Kingston’s number one airport. We see the diaspora as being a huge market and we will be concentrating heavily on it while also looking to the tourism industry.”

December 7, 2007

Pressure on US airlines to merge is mounting as high fuel costs and weakening domestic travel demand threaten to destabilize freshly restructured carriers, senior airline executives said this week.

Airlines will have a hard time passing fuel expenses to customers through higher fares in a softening economy, senior executives of American Airlines parent AMR, UAL – parent of United Airlines, Delta Air Lines and US Airways said at the Reuters Aerospace and Defense Summit.

Delta’s Chief Financial Officer Edward Bastian said Delta remains confident in its future as a stand-alone company, but the current economic environment poses unforeseen threats that make the airline consider alternatives.

“The timing has certainly been accentuated by having oil at nearly USD$100 a barrel,” Bastian said on Thursday. “That causes one to look harder at structural solutions.”

Airline leaders see industry consolidation as a way to cut costs and capacity and lend stability to the volatile industry. A common view is that if two of the big airlines merge, others will scramble to find partners of their own.

The last merger of two major carriers was in 2005 between US Airways and America West. Early this year, Delta fought off a hostile bid from US Airways.

Speculation swirled last month that United and Delta were in talks. Delta denied the reports, but said it is considering strategic alternatives that could include consolidation.

The US airline industry is recovering from a years-long downturn triggered in part by low-fare competition and exacerbated by high fuel prices.

In 2006, the industry began cutting the number of seats for sale and raising fares. But trouble is brewing for the industry as it grapples with oil prices that hit a record high near USD$100 a barrel in November.

Airline executives have been increasingly vocal this year about the need for consolidation as a way to cut costs and reduce capacity.

“I’m happy to see more people come to the conclusion that we came to long ago,” US Airways Chief Executive Doug Parker said on Wednesday. “Wall Street seems extremely interested in trying to figure out what would trigger consolidation.”

So far, however, carriers have been reluctant to tackle obstacles presented by organized labor and anti-trust laws. Parker and other leaders also believe the transition to a new presidential administration in January 2009 poses a logistical hurdle to airline consolidation.

“There is a bit of a timing issue in that there is going to be a change,” Parker said. “If there is not something announced very early in ’08, I think you will see everything put on hiatus.”

AMR CFO Tom Horton said on Monday that carriers may attempt consolidation before the end of the Bush administration believing it to be more receptive to merger proposals than its successor government would be.

“It would seem that this administration has been relatively accommodative toward large mergers,” Horton said.

But regulatory history is not on the side of merger proponents. Aviation experts note the government’s long-held aversion to approving deals that involve relatively healthy big carriers. The last two major airline mergers involved at least one bankrupt airline.

The last attempt of two relatively healthy airlines to merge — United and US Airways — foundered on competition concerns in 2001.

UAL CFO Jake Brace said on Monday that regardless of economic conditions and regardless of the presidential administration, consolidation is healthy for the airline industry.

“We want consolidation to happen sooner rather than later, and we think that doing something now and getting it done in this administration is a good thing,” Brace said.

“If we were able to control that outcome, that’s what we’d do,” Brace said.

(Reuters)

St. Maarten Government Information Service (GIS)

Leader of Government and Commissioner responsible for Aviation Affairs Sarah Wescot-Williams, extends congratulations to all those working directly and indirectly in the aviation field with respect to the annual celebration of International Civil Aviation Day, December 7 which marks the creation of the International Civil Aviation Organization (ICAO) on that day in 1944.

The theme for this year is, “Global Air Transport – a driver of sustainable economic, social and cultural development.” 

The purpose of the annual celebration is to establish and reinforce worldwide awareness of the importance of international civil aviation in the social and economic development of States.  The role of ICAO in promoting safety, efficiency and regularity of international air transport is emphasized in this context.

In 2006, 2.1 billion passengers traveled on scheduled flights alone.  Still to be added are charter and other aircraft operations.  Nearly 40 million tones of freight were carried by air, from fresh produce to computer equipment for the home and office.

Today, some 32 million jobs are linked to civil aviation.  Employment in airlines, airports, air navigation services and aerospace industries (5.5 million jobs), plus indirect and induced multiplier effects, account for about 15 million jobs.  Some 17 million additional jobs are supported in a wide range of industries related to trade and tourism such as hotels, restaurants and many more.

Civil aviation’s extended global economic impact is estimated in the order of US$3.5 trillion, equivalent to nearly eight per cent of the global Gross Domestic Product (GDP ). 

“I would like to congratulate all those working directly and indirectly in the civil aviation field on this special day, for all your hard work and dedication to the aviation field.

“This includes pilots, airline stewards, control tower staff, airport fire fighters, airlines, other service providers, airport security, taxi driver’s, airport management and staff and all those not mentioned, for a job well done.

“Our island nation is dependent on civil aviation as our land-based tourism sector is dependent on the travelers who fly in to the island on a daily basis.  We therefore must be able to continue to provide the best of services and infrastructure that we can provide as a nation,” Commissioner Sarah Wescot-Williams told the Government Information Service ( GIS) on Thursday.