Archive for June, 2009
June 30, 2009–The world’s airlines lost more than USD$3 billion in the first quarter of 2009, the International Air Transport Association (IATA) said on Tuesday, maintaining its estimate for full-year losses of USD$9 billion.
In its latest snapshot on the industry, the Geneva-based lobby group said weak travel demand and lower freight volumes in the global recession had bled revenues for major carriers, in “a significant deterioration from last year.”
“This deterioration was before the recent rise in fuel prices,” IATA said, warning the 30 percent increase in oil and jet fuel prices since early May would squeeze airline cash flows further in coming months.
Both oil and jet fuel prices have risen almost USD$20 a barrel in the past two months, and are now 75 percent higher than their low point at the end of 2008, the Financial Monitor report said.
“Airlines have not yet felt the full impact of this oil price rise,” it said.
But it said it was not changing its previous 2009 loss forecast of USD$9 billion, which follows revised 2008 losses of USD$10.4 billion.
On Tuesday, US crude traded around USD$72 per barrel.
IATA, which represents more than 200 airlines, also said carriers trying to fly fewer flights to save costs during the downturn have not managed to cut capacity in line with shrinking air transport demand.
Leading airlines have been seeking mergers and acquisitions to help build scale and shield themselves against continued market weakness until the global economy recovers.
Delta Air Lines swallowed rival Northwest Airlines last year to create the world’s largest airline, and European carriers have also consolidated with Lufthansa agreeing to buy Austrian Airlines and Air France-KLM taking a stake in Alitalia.
British Airways is also in merger talks with Iberia, and Singapore Airlines has said it is eyeing acquisitions in China and India.
(Reuters)
Jun 28, 2009 –Fly out of Orlando International Airport on any given day, and you’re likely to see a real difference in the security lines in the two-sided main terminal.
The line on the east side — which funnels passengers to the airport’s four busiest airlines, Southwest, Delta, AirTran and JetBlue — is often packed with people. By contrast, getting through security on the west side — serving older-but-smaller airlines such as American, Continental and US Airways — generally takes much less time.
“Our concern is that right now we have this imbalance, that 70 percent of our passenger traffic is going to the eastern airsides, and that’s causing lines at the security,” acknowledged Steve Gardner, executive director of the Greater Orlando Aviation Authority.
That’s about to change.
The authority is wrapping up a $230 million project to renovate, update and enhance OIA’s two older airsides — the satellite terminals where passengers board or get off airplanes and then take trams to the main terminal — on the west side. And in a parallel effort aimed at equalizing passenger traffic, the airport wants to embark on an airline shuffle.
Among those slated to shift: JetBlue Airways, the airport’s fourth-busiest airline in terms of passengers, which right now flies domestic and international passengers out of east-side Airsides 2 and 4, respectively.
JetBlue is likely to consolidate its flights at Airside 1, on the west side. Lufthansa, which has corporate ties with JetBlue, also may move from east-side Airside 4 to be alongside its new partner.
Northwest Airlines, which recently merged with Delta Airlines, is expected to abandon its west-side gates at Airside 3. Continental Airlines, now on the east side, will move into that space.
The result of that shuffle would change the passenger balance to 55-45, still favoring the east side. But the deals are not yet closed — in part because it will cost up to $3.5 million to move everything around, and GOAA wants JetBlue to pay a share.
JetBlue isn’t saying no — but it hasn’t said yes yet, either.
“What we are looking for is to grow. We’re looking for ease of connectivity, and how quickly you can move from the ticket counters to the gate,” said JetBlue spokeswoman Jenny Dervine. “I think that [gate-shuffling plan] is still at the proposal stage. We haven’t come to any terms.”
Gardner said one incentive for the airlines to move will be completion of a major overhaul of the two west-side terminals.
The east-side airsides, built in 1990 and 2000, offer airy, well-lighted space as well as restaurants, taverns and shops near the gates.
The west-side terminals were designed and built 30 years ago, when such amenities weren’t considered all that important. GOAA is seeking parity.
“If [passengers] got over [to the west-side terminals] early and had time to eat, we not only didn’t have sufficient numbers of facilities, we didn’t have the variety,” Gardner said.
The renovations are nearly finished at Airside 3, with a new food court and stores, anchored by a table-service Ruby Tuesday restaurant in the terminal’s hub. There are new large skylights, updated utilities and new floors.
Similar work is under way in Airside 1 and should be finished in October.
“You could never make them look like the new sides without demolishing them, but the word parity means close,” Gardner said. “So we got them to be as close as we can.”
Source: orlandosentinel.com
OneWorld wants to limit its size, while Star Alliance thinks of membership’s differentiation
Jun 29, 2009 –Although global alliances in the airline industry seem to only look to have more members, strategies can vary. OneWorld wants to concentrate exclusively on quality members. “Size does not matter. We really favor quality over quantity,” said John McCulloch, managing partner of OneWorld, during the recent IATA meeting.
The alliance recently announced the integration in 2010 of S7 -Russia’s largest domestic carrier with a growing international activity. “S7 offers all the guarantees in terms of quality and reliability. The airline will definitely enhance the OneWorld brand,” said Gerald Arpey, CEO of American Airlines.
Mexicana is another airline due to join before the end of the year. Mexicana recently reopened flights to Europe to complement the network of its future partners British Airways and Iberia.
McCulloch said he remains cautious about OneWorld including new partners. “We still need partners in Brazil, China and India. For China, we have been for a long time in discussion with China Eastern in Shanghai. However, due to the reshaping of air transport by China, it might take a while before we come to a new agreement. We are also in talk with Kingfisher and Jet Airways in India but it is still too early to make any announcement,” he added.
Once a deal inked with a Chinese and Indian partner, McCulloch does not see any other partnership in Asia. “ We do not focus Southeast Asia as we estimate to have already a good network and strong partners such as Qantas in the region,” said McCulloch.
OneWorld’s main weakness –when compared to Star Alliance- is probably its relatively lack of visibility for consumers. The alliance has recently launched a communication campaign in Europe and started to paint some aircraft in OneWorld colors. It has officially asked the government to be granted an anti-trust immunity pact on North Atlantic routes by US and European aviation authorities. The pact should include American Airlines, British Airways, Iberia and Royal Jordanian. “We are confident to get the green light from authorities. We believe it will deliver additional benefits to our customers if we can be put on a same foot than our competitors,” said American Airlines’ Arpey. OneWorld has claimed it is hoping to get an answer by October.
Meanwhile, competitor Star Alliance continues to integrate new members with a target of 26 carriers in 2010 compared to 21 today. The alliance will soon take on board Air India, Brussels Airlines, Continental Airlines, TAM (Brazil) and – last announced- Aegean Airlines (Greece). Rumors indicate the integration of further partners in Africa.
As Star Alliance is increasingly turning into a giant association of airlines of various calibers, difficulties emerge to coordinate decisions. It must then redefine relations between its members to be sure to preserve a relative homogeneity and efficiency.
According to Star Alliance CEO Jan Albrecht, the alliance is looking to introduce various degrees of involvement for its members. Premium members will basically continue to shape the destiny of the alliance with a more active role than second-tier members. Each airline will be able to choose its future status. Discussions are now going on to shape the new Star Alliance.
25/06/2009 –American Airlines has launched a national advertising campaign aimed at U.S. Hispanic travelers in an effort to increase American’s business and to better serve the booming Latino population.
With this new campaign, American seeks to continue to be the airline of choice, uniting Latinos and their families by meeting all of their travel needs –connecting them to business associates and loved ones in any part of the world.
The campaign –conceived by American’s long-standing U.S. Hispanic agency, Zubi Advertising Services, Inc.- will target Hispanic consumers with advertising in print publications and the major Spanish-language TV networks, Univision and Telemundo, among other media.
The focus of the campaign is to make Hispanics more aware of the benefits of becoming a member of the American Airlines AAdvantage program, the world’s first loyalty program and consistently recognized as the best in the industry.
American’s Latin America/Mexico route system now boasts 40 destinations in 17 countries, including five American Eagle destinations in Mexico. Additionally, American and American Eagle fly to San Juan, Puerto Rico, and five destinations in the Dominican Republic. In just 19 years, American Airlines has become Latin America’s premier airline, offering more flights to more destinations than any other carrier.
June 25, 2009 —- Gol Linhas Aereas Inteligentes SA, Brazil’s second-largest airline, is adding routes to the Caribbean and smaller domestic cities while scaling back flights in the rest of South America as demand slows, Chief Executive Officer Constantino de Oliveira Jr. said.
“The flow between Brazil and South America had a noticeable reduction,” Oliveira said in an interview Wednesday in New York. “The Brazilian market is the biggest driver of growth in South America.”
Gol, based in Sao Paulo, will start flights next month to Punta Cana in the Dominican Republic and the islands of Curacao and Aruba in the Netherlands Antilles. The airline also plans to begin operations to the Brazilian cities of Bauru, about 300 kilometers (187 miles) west of Sao Paulo, as well as Aracatuba and Montes Claros.
Oliveira said Gol is reorganizing its routes after posting losses every quarter last year because of costs related to the takeover of Varig in March 2007, and the more than doubling of oil prices between the acquisition and July 2008. Gol, which already dropped flights to Europe and North America, suspended its flights to Lima, the capital of Peru, and reduced the frequency of its flights to Santiago, Chile, he said.
“We made some mistakes, or the situation changed, for example, in international flights,” Oliveira said. “So we backed out and focused more in the domestic market.”
Oliveira was in New York to meet investors and ring the closing bell of the New York Stock Exchange on the fifth anniversary of Gol’s initial public offering.(Bloomberg)
Wednesday, June 24th 2009 –THE only way to action the idea of a single airspace across the eastern Caribbean is for the merger of the two existing airlines, Caribbean Airlines and LIAT, and for the adoption of an open skies policy among the countries involved, the Task Force on enhanced regional unity has recommended.
It says further that if these and other related recommendations are accepted, this would lead to the following outcomes.
Not only would the countries involved have strengthened their air transportation sectors, but they would have taken a giant step towards strengthening their economies, given the inescapable relationship between air transportation and tourism, and the highly important role of tourism in these countries.
Governments of Trinidad and Tobago and the Organisation of Eastern Caribbean States have been urged therefore to “merge Caribbean Airlines and LIAT into a single regional airline with a purely commercial operating mandate”. They have been advised also to establish “common institutions for air transport and civil aviation management”.
Four major advantages have been advanced as obvious results from this move alone. A single airspace would make for the harmonisation, regulation and management of air transportation, air navigation and other civil aviation services under a single set of rules, procedures and policies. The adoption of a liberalised policy towards air services, specifically an open skies policy, would follow. Also, a merged airline entity would operate under guidelines provided by the World Bank and the Caribbean Tourism Organisation. This in turn would mean reviewing the question of state ownership of airlines. Flowing naturally from this would be the ending of “blanket subsidisation of loss-making carriers and putting in place an appropriate policy to ensure continuity of services on non-profitable intra-regional routes”.
Such a merged operation under an open skies policy would also create an environment of merged civil aviation authorities among the countries involved, “for the proper regulation of civil aviation matters in the single airspace”.
Not only would the air transport sectors in these countries have been strengthened by these moves, the Task Force has argued, but the economies, those of the OECS countries in particular which are heavily tourism oriented, would have also been strengthened.
The Task Force referred to a statement on this matter issued at the end of a meeting of Caribbean tourism ministers in San Juan, Puerto Rico, in October 2007.
“Air transport solutions are crucial to tourism and general business development and a regional approach would be much more effective, far reaching and sustainable,” those ministers held.
From the World Bank report in 2006, the report found that regionally owned airlines were “generally facing serious operational and financial problems, with a consequent negative impact on the quality and reliability of regional services”.
Given that Prime Minister Patrick Manning has been speaking about the Task Force report, it suggests that the Trinidad and Tobago Cabinet has approved the document, submitted to group Heads of Government at a meeting in Port of Spain on May 24.
The Task Force was headed by St Lucian political scientist and former prime minister Prof Vaughn Lewis, and its membership included legal, international relations and economics experts from Grenada, Barbados and St Lucia.
Its proposals have been drawn up against a broad mandate to make recommendations for an economic union by 2011 and further political union by 2013. The countries involved are Trinidad and Tobago and those of the OECS.
Having been part of the revived initiative in 2003, the last government of Barbados appears to have opted out of the equation, but the current Prime Minister, David Thompson, is known to be anxious for speeded up regional initiatives on both air and maritime services in the region. Both are listed as priority items in the party’s manifesto for the 2008 general election, which brought Thompson’s Democratic Labour Party to power after 13 years in opposition.
Surveying the data on intra-regional travel, the Task force confirmed widely held information about the critical role of air transportation through the island chain. It found that statistical data showed “a substantial volume of air travel among member countries of the OECS and between them and Trinidad and Tobago”.
Regional tourism forms a considerable percentage of overall tourism. Intra-Caribbean movements account for 25 per cent of arrivals within the OECS themselves, and airlift and seats available from elsewhere in the Caribbean to the OECS accounts for 30 per cent of the total. For St Vincent and the Grenadines and Dominica, however, “intra-Caribbean travel forms 100 per cent of their air travel”, the Task Force report found.
“Air transportation can deliver greater gains to the economies of all the countries if it can be improved through restructuring,” the report said. It added, however, that “the best way for the countries to reform their air transportation sectors to achieve the expansion and development of their tourist industries is through regional integration”.
Using figures from 2004, the Task Force found that the majority of Caribbean arrivals into Trinidad and Tobago come from Barbados, while a similar volume of traffic was going the other way. St Lucia and St Vincent and the Grenadines got the second and third highest number of arrivals from Barbados, with those OECS countries also providing the second highest number of arrivals into Barbados.
Arrivals to these countries from Guyana was also significant, the report found, adding that “if these countries merge their economies and form a political union, they would have to adopt a common air transportation policy if they are to sustain and develop their regional tourism”.
June 24, 2009
Boeing delayed its new 787 Dreamliner for the fifth time on Tuesday, just a week before its first test flight, saying it needs to strengthen the side panels near where the wing joins the fuselage.
The plane was set to fly by next Tuesday, according to the latest schedule — almost two years after the first target in the summer of 2007. No new date has been set.
Boeing has been struggling with a range of supply, manufacturing and design problems, made worse by a two-month strike at its Seattle-area plants last year.
The following events show the slow and bumpy progress of the new, carbon composite aircraft, which is key to Boeing’s financial success.
2002 - Boeing drops its “Sonic Cruiser” concept, responding to airlines’ calls for better fuel efficiency rather than extra speed.
June 2003 - dubs its new, carbon-composite plane the “Dreamliner.”
Dec 2003 - approves an initial version of the plane with the temporary name 7E7, the E standing for “efficiency”.
April 2004 - officially launches the plane as Japan’s All Nippon Airways (ANA) orders 50.
Dec 2004 - ends 2004 with 56 orders for the new plane, fewer than it had expected.
Jan 2005 - gives plane official designation 787.
Dec 2005 - ends year with 232 orders for 787s, for a running total of 288.
July 2006 - Popularity of 787 design forces Airbus to go back to drawing board on its competing A350, relaunching it as the A350 XWB (extra wide body).
Dec 2006 - ends year with 160 orders for 787s, for a running total of 448.
Jan 2007 - unconfirmed talk of some 787 suppliers falling behind schedule sends Boeing shares lower. Boeing CEO Jim McNerney says plane is on target for first test flight around end of August 2007 and first delivery May 2008.
May 2007 - starts to put together first 787 in Everett, Washington.
June 2007 - reports surface at Paris Air Show that 787 is up to four months late. Boeing says first test flight may slip to September 2007, while still on schedule for first delivery in May 2008.
July 8, 2007 - gleaming shell of first 787 rolled out in front of 15,000 ecstatic employees and customers at Everett.
July 25, 2007 - Boeing shares hit all-time high of USD$107.80, boosted by strong 787 orders. Company admits plane is running slightly behind in certain areas but holds to schedule.
Sept 2007 - Boeing puts back first test flight by about three months because of a shortage of bolts and problems with flight control software. Shifts flight target to mid-November to mid-December 2007; keeps May 2008 delivery target.
Oct 2007 - announces longer delay, due to continued production problems, pushing first test flight to end-March 2008 and putting back first delivery by about six months to late November or December 2008.
Oct 2007 - 787 program head Mike Bair replaced by Pat Shanahan from Boeing’s defense unit
Dec 2007 - Boeing says 787 is sticking to revised schedule; ends year with 369 orders for the plane in 2007, for a running total of 817.
Jan 2008 - after two weeks of rumors, Boeing announces further three-month delay due to problems with unnamed suppliers and slow assembly progress at Everett plant. Pushes back test flight to end-June 2008 and first delivery to early 2009, making plane about nine months behind original schedule.
March 2008 - company admits it had to redesign centre wing box to make it stronger.
April 2008 - announces third major delay due to continuing problems with unfinished work from suppliers. Sets first test flight for the fourth quarter of 2008 and first delivery for the third quarter of 2009, about 15 months behind the original schedule.
June 2008 - Boeing completes “power-on” testing on first 787, bringing the plane’s electrical systems to life. It is the first public milestone the company has hit on the program.
August 2008 - first cancelation of a 787 order, by Azerbaijan Airlines.
Sept 6, 2008 - Boeing’s assembly workers go on strike over contract terms, shutting down Boeing’s Seattle-area plants. They return to work in early November after 58 days out.
Nov 4, 2008 - Boeing says first flight delayed by strike, will not happen until 2009.
Dec 11, 2008 - Boeing announces fourth major delay, due to the strike and continuing fastener problems. Says first flight now set for second quarter of 2009 and first delivery in first quarter of 2010, making the plane about two years late.
Dec 31, 2008 - Boeing ends year with 93 orders for 787s, making a running total of 910.
Jan 2009 - Russia’s S7 becomes first major airline to cancel orders for the 787, walking away from a deal to buy 15 of the planes worth USD$2.4 billion. More cancelations follow.
June - Boeing reports 59 total cancelations for 787s, with net orders for 866 of the planes.
June 23, 2009 - announces fifth delay due to side panel issue, says new dates for first flight and first delivery will be set in “several weeks,” when problem is resolved.
(Reuters)
June 25, 2009 –Demand for cross-border air freight dropped 17.4 percent year-on-year in May, suggesting international trade is still a long way from recovery, IATA said Thursday.
The International Air Transport Association (IATA) said that passenger demand fell a more modest 9.3 percent year-on-year in May, and repeated its view that for airlines, “this crisis is the worst we have ever seen”.
“We have lost several years of growth and yields are under severe pressure. Airlines are in survival mode. Cutting costs and conserving cash are the priorities,” Giovanni Bisignani, IATA’s director-general, said in a statement.
The latest reading of international air traffic includes the first estimate of the impact of H1N1 flu on airline travel.
Mexican carriers saw their passenger traffic fall nearly 40 percent in May, compared to a 9.2 percent drop among all Latin American airlines, said IATA, which represents 230 carriers.
US airlines also reported weak demand to Latin American destinations affected by the newly-discovered virus, the figures show.
Air cargo is a leading indicator for world trade, and equity markets are watching it closely for signs of economic recovery.
IATA said the 17.4 percent drop is a relative improvement compared to the 21.7 percent year-on-year fall in April, but remains far from full health.
It said although manufacturers have begun to add to their product inventories in anticipation of an eventual economic rebound, “inventories remain 10 to 15 percent higher than normal in relation to sales levels, indicating that a significant recovery is not expected in the near term”.
Passenger traffic demand is slightly stronger than the 11 percent drop seen in March, indicating “a floor may have been reached,” but it also has a long way to go, said IATA, which has estimated airlines will lose USD$9 billion in 2009.
(Reuters)
June 23 2009 — THE United States government is helping the Airports Authority of Trinidad and Tobago (AATT) to improve facilities at the Piarco International Airport, according to an article in the Airport 2009 magazine.
The article states that the AATT and the US Trade and Development Agency have entered into a funding arrangement to conduct feasibility studies for the air cargo and aircraft maintenance and overhaul facility “to formulate a strategic development plan for the creation of these facilities” at Piarco.
Recently the AATT and the Airports Council International signed an agreement establishing a global training hub for aviation in TT. The hub is currently providing training and support for airport personnel in Latin America and the Caribbean.
The AATT’s aviation training centre continues to broaden its scope in providing aviation management and security training programmes for the region, inclusive of the International Civil Aviation Organisation (ICAO) security programmes.
Wednesday, June 24th 2009 — Airlines around the world are cutting back on flights, trying to save on fuel and putting a freeze on hiring. But Panama-based carrier Copa Airlines, which entered the Trinidad and Tobago market a little over a year ago, has increased the number of flights it operates out of the country on a weekly basis.
“We started with a schedule of four flights a week but since our inaugural flight, we’ve moved up to six,” said Camille Bennett, Copa Airlines local station manager.
Speaking to reporters at the Hyatt Regency hotel in Port of Spain, where Copa and the Hyatt’s administration yesterday welcomed media professionals from the Dominican Republic and Panama for a short educational stay in T&T, Bennett explained the secret to Copa’s success in tough economic times.
“Copa is a very progressive company. The way that we operate, the modern aircraft we have, the new technology we use, our fuel-efficient aircraft allow us to be quite successful in what we do,” she said.
The airline which is more than 60 years old, offers direct fights from Piarco to Panama.
The carrier made its first trip to Trinidad and Tobago last March. From Panama, travellers can fly directly to Miami, Orlando and Washington DC in the US; Mexico, Costa Rica, Guatemala, El Salvador, Nicaragua and Honduras in Central America; as well as Aruba, Puerto Rico, Jamaica, Haiti, the Dominican Republic and Cuba in the Caribbean; and Colombia, Venezuela, Ecuador, Peru, Brazil, Chile, Argentina, Bolivia and Uruguay in South America.