Hot Topics News

Source : Financial Times, February 21, 2012
Lufthansa and Fraport are braced for long-running and potentially costly disruption, after ground staff extended until Friday their strike action over pay. A conflict between Fraport and the GdF has escalated into one of bitterest in Germany in recent years, highlighting the emerging strength of trade unions representing small groups of workers in key jobs. Tuesday, the trade union said the strike, which had been expected to end early Wednesday, would be extended until 11pm Friday. Much of the disruption is being borne by Lufthansa. It cancelled 160 flights Tuesday, but that was considerably lower than on previous strike days and the company said it continued to operate more than 80% of services in and out of Frankfurt. Long-haul services were unaffected, and the airline hoped to reduce the number of cancellations further in coming days. So far, Lufthansa has declined to estimate the possible financial cost. more

Source : Canadian Press, February 21, 2012
Jazz Air will work to help Air Canada compete with WestJet when their rival launches a low-fare airline serving smaller domestic markets, Chorus Aviation CE Joe Randell said Tuesday. “It’s Air Canada that makes the commercial decisions in response to any competitive reality that they face,” Randell said. “We’ll certainly be working with Air Canada in terms of how and if there’s any change to the network or the plans. Obviously, it’s of great importance to us,” Randell said. WestJet recently announced it will launch a low-fare, no frills regional airline, expected to intensify competition in smaller domestic markets with rival Air Canada and regional partner Jazz Air for business and leisure class travellers. “I think it’s really premature to say exactly how it will affect Air Canada and therefore us, but suffice to say it is a significant factor and we’ll be watching this very closely,” Randell said. more

Source : National Business Review, February 20, 2012
Price hikes feared on the Los Angeles-Auckland route may not eventuate since Qantas pulled out of the route last week. Air NZ has no immediate plans to raise fares and the delivery of more efficient aircraft to the market next year will increase the competition on North American routes. A spokeswoman for the carrier says there was no plans to raise fares and capacity on the route would be increased as a result of Qantas’ announcement. “Air NZ plans to add further capacity on the route as a result of Thursday’s announcement, meaning even more everyday low fares will be available,” the spokeswoman says. While the average fare was likely to increase with a reduction in the frequency of cheap fares offered per flight it would not make sense for individual fare levels to be increased, an aviation consultant said. more

Source : New Zealand Herald, February 22, 2012
Air NZ reported a 4.3% decline in long-haul passenger numbers last month. Long-haul total passengers carried fell to 149,000 in January from 156,000 in the same month a year earlier, with a 5.5% decline passengers on the North America/UK route to 88,000 and a 2.7% fall in numbers on the Asia/Japan/UK route to 62,000. The airline blamed the Canterbury and Japan earthquakes for declining numbers of Japanese routes. Domestic passenger numbers were flat at 583,000, while Tasman/Pacific numbers fell 1.4% to 248,000. Passenger numbers fell 1% to 980,000 in the month, and were down 0.7% to 7.73m in the financial year-to-date. Air NZ said in November it's aiming for a NZ$110m profit improvement by 2015 from long-haul flights, which are now an under-performing part of the company. Total revenue passenger kilometres fell 1.3% to 2,334m, while capacity was flag at 2.71m. more

Source : ATW, February 22, 2012
The Civil Aviation Administration of China has granted approval for China Eastern to a launch a business aviation company based on the assets of subsidiary China Eastern Airlines Executive Air. CEAEA was established in 1995 as a ground handling company for business jets. The new entity would operate five aircraft and is expected to expand its fleet to 10 this year. All major Chinese carriers have been exploring the burgeoning business aviation market in China. Hainan Airlines operates Deer Jet, and Air China established Beijing Airlines to enhance its position in the fast-growing domestic business aviation market. China Southern and subsidiary Xiamen Airlines also plan to launch business aviation companies. It is reported that Beijing levies a 22.85% tax to the general aviation industry, which means that business aviation companies must pay more than 20% tax on each business jet. more

Source : Sydney Morning Herald, February 22, 2012
Jetstar will be majority owned by Vietnam Airways under an ownership change confirmed in Hanoi late Tuesday. Under the new arrangement Vietnam Airways will hold 69.93% of Jetstar with Qantas owning 30% of the carrier. Previously, Vietnam’s State Capital Investment Corporation held the majority stake in Jetstar. A new CE and chairman would also be appointed in coming weeks. Vietnam Airlines and Jetstar said the two carriers would work together to develop a two-brand strategy focused on serving domestic and international routes. Jetstar CE Bruce Buchanan said he welcomed Vietnam Airlines as a new partner in Jetstar Pacific. ‘‘We are confident this partnership between a low-fares carrier and a full-service airline can replicate the success of the two brand strategy used by Qantas and Jetstar in Australia,’’ Buchanan said Wednesday. more

Source : Reuters, February 21, 2012
American Airlines aims to boost revenue by US$1b annually by beefing up its international routes and fleet to lure more business passengers, the company said Tuesday. Lower costs achieved through bankruptcy will enable AMR 'to create the premier airline for high-value customers, who choose airlines based on network, alliances, products and services,' chief commercial officer Virasb Vahidi said. 'While the number of these customers is small, they provide a disproportionate amount of revenue and are critical to our success,' Vahidi said. The company said that by cutting costs and easing restrictive contracts, it can focus on network, fleet and partnerships to generate the revenue improvements. About two-thirds of the revenue boost will come from 'right-gauging our fleet,' Vahidi said. The remainder will come from bolstering existing partnerships with foreign airlines. more

Source : Reuters, February 21, 2012
Gulf Air, which is seeking govt funds to continue operations, said the Omani govt owes the carrier BHD117m. Gulf Air said Tuesday that it is in talks with the sultanate for the amount which has been due since 2007. 'There is a residual amount of BHD117m that remains outstanding from the Sultanate of Oman from the time it withdrew as a shareholder of the airline,' the airline said. 'This continues to be a matter of discussion amongst concerned parties.' The airline was hit by falling passenger numbers in 2011 as anti-govt protesters continue to clash regularly with riot police in the island kingdom. Last week the carrier cancelled its service to Damascus, Athens, Milan and Kuala Lumpur. This follows ending services to Entebbe and Geneva earlier in the month. The airline said in May it had laid off 200 employees and that bookings were down by a quarter following the Arab Spring uprisings. more

Source : Reuters, February 21, 2012
Kingfisher edged closer to the brink Tuesday after nearly a week of mass cancellations of flights and the resignation of dozens of the carrier's pilots. Vijay Mallya said he was determined to keep the airline flying and blamed a cash crunch on the tax authorities who have frozen its bank accounts over outstanding dues. 'I am absolutely committed to keeping the airline going unless some govt agency wishes to ground it,' Mallya said. Kingfisher shares plunged nearly 20% Tuesday ahead of a meeting between the airline's senior executives and the country's aviation regulator. The Directorate General of Civil Aviation (DGCA) has asked the carrier to explain the cancellation of more than 100 flights since Saturday. Of the 64 planes in its fleet, Kingfisher is using just over a dozen to operate flights currently, stranding thousands of passengers at airports across the country. more

Source : Financial Times, February 21, 2012
Kingfisher Airlines risks losing its flying slots unless the carrier comes up with a viable flight schedule for its downsized aircraft fleet within 24 hours, India’s aviation director said. Bharat Bhushan, director-general of civil aviation, said he was extremely concerned about the financial stress Kingfisher was under and how this might affect passengers’ travel plans and safety. “They have kept downsizing the airline without telling us, they’ve gone from 66 aircrafts to 28, they need to come up with a new schedule otherwise their [flying] slots will be cancelled and given to other airlines,” Bhushan said. “My job is to ensure that passengers are treated fairly and safely . . . many have not been informed about the cancellations, that is not acceptable, we have told them in strict terms that they will have to refund passengers and keep them informed.” Kingfisher has cancelled at least 65 out of 240 flights since Feb 17. more

Source : ATW, February 22, 2012
Transaero Airlines will transfer some flights from Domodedovo to Vnukovo because Domodedovo cannot keep up with the carrier’s rapid expansion, CE Olga Pleshakova said. Pleshakova and Vnukovo board chairman Vitaly Vancev Tuesday were expected to sign a memorandum of strategic partnership detailing the cooperation. The 10-year agreement will see Transaero eventually handle up to 2m passengers annually at the airport. Transaero’s route network from Vnukovo is under discussion. Operations are expected to start in May. “Domodedovo’s development rates are slower that Transaero’s and they restrain our own expansion especially of our Boeing 777 and 747 operations,” Pleshakova said. “Domodedovo remains our main base.” She said Vnukovo has a “new state-of-the-art terminal with a large capacity and management is forthcoming in meeting our needs.” more

Source : AP, February 21, 2012
Southwest Airlines mechanics rejected a plan for combining their seniority list with that of mechanics at AirTran, complicating Southwest's job of combining the two airlines. The dispute could go to arbitration, although Southwest Tuesday held out the hope that the two labour groups could come together on their own. Members of the Aircraft Mechanics Fraternal Association, which represents about 1,600 Southwest mechanics, voted against combining the seniority lists. Southwest said the next step would be a filing for arbitration by AMFA and the Teamsters, which represents about 400 AirTran mechanics. Pilots and flight attendants at the two airlines have approved seniority-combination agreements. Several groups of ground workers are still negotiating. more

Source : Guardian, February 21, 2012
Stelios Haji-Ioannou has further stoked hostilities with the airline's board ahead of Thursday's AGM, accusing them of 'malicious acts' and a 'string of dirty tricks' after company lawyers sought details of his family's voting agreements – in what the airline described as a routine letter to shareholders. Haji-Ioannou claimed letters from the lawyers constituted 'frivolous and vexatious demands'. His family's 37.4% stake in EasyJet makes Haji-Ioannou the largest shareholder, and he has urged his fellow investors to vote against the remuneration report and the re-election of the chairman, Michael Rake. EasyJet said it had issued hundreds of such letters to all its shareholders and the airline's founder had been sent what was a standard letter in the run-up to voting at the AGM. A spokesman for Haji-Ioannou said the correspondence was 'more than a standard letter'. more

Source : Courier-Mail, February 22, 2012
The owner of Air Australia is one of the owners of another airline based in the tax haven of Luxembourg. Air Australia was put in the hands of administrators Friday, leaving 300 employees without a job and stranding thousands of tourists. James and his family companies are listed as the majority owner of Strategic Aviation, which operates an ageing fleet of three A320s, mostly flying between Manchester in the UK, Scandinavia and the Greek Isles. The rest of the company - 49% - is owned by the now collapsed Australian venture, and KordaMentha said Tuesday they were investigating what assets Strategic Aviation had in Luxembourg. Records show that a number of his local companies remain intact and are not under external administration. While Strategic Aviation continues to fly, creditors owed millions of dollars are poised to meet next Wednesday but expect to claw back little if anything. more

Source : eTravel Blackboard, February 22, 2012
The owner of Air Australia is one of the owners of another airline based in the tax haven of Luxembourg. Air Australia was put in the hands of administrators Friday, leaving 300 employees without a job and stranding thousands of tourists. James and his family companies are listed as the majority owner of Strategic Aviation, which operates an ageing fleet of three A320s, mostly flying between Manchester in the UK, Scandinavia and the Greek Isles. The rest of the company - 49% - is owned by the now collapsed Australian venture, and KordaMentha said Tuesday they were investigating what assets Strategic Aviation had in Luxembourg. Records show that a number of his local companies remain intact and are not under external administration. While Strategic Aviation continues to fly, creditors owed millions of dollars are poised to meet next Wednesday but expect to claw back little if anything. more

Source : Guardian, February 21, 2012
Air passengers' lives will be put at risk by EU proposals to relax British flying rules, the pilots' association, BALPA, has warned. Pilots will tell a parliamentary hearing Wednesday of their concerns at regulations that would allow them to land a plane after up to 22 hours without sleep. Changes to shift patterns and reduced crew requirements on certain long-haul flights will likewise raise the chances of pilots falling asleep in the cockpit, they say. EASA is proposing to harmonise safety rules across the continent, with its current consultation expected to lead to EU policy later this year. BALPA says the proposals fall short of current British practice and has called on the CAA to resist. The BALPA general secretary said the planned rules would, 'contrary to scientific advice, allow pilots to do up to seven early starts in a row, which is desperately fatiguing”. more

Source : Bloomberg, February 21, 2012
The extension of the EU’s emissions trading system to international airlines is “premature” and could lead to higher ticket prices and a slump in demand for flights, according to Russia’s govt. Russia, which is hosting a two-day meeting of countries opposing the inclusion of foreign airlines in the EU cap-and- trade plan, urged the exemption of non-European carriers and opted for global measures to tackle emissions from the industry, the Transportation Ministry said. “Before coordinated actions by countries are worked out it is necessary to refrain from applying the directive to carriers from countries non-members of the EU,” transportation minister Igor Levitin said Tuesday. Levitin said that the ETS curbs on airlines violate the Chicago Convention governing international civil aviation because carbon permits have to be bought for the entire flight and not just for the part in the EU airspace. more