Qingdao Airlines the proposed JV between Qingdao Municipal Transport Development Group Co (25%), Nanshan Group Co (55%) and Shandong Airlines (20%) on Friday received preliminary approval from CAAC Southeast Regional Administration. They are going to operate 737 and A320 aircraft.
Air India has sought compensation from Boeing for 787s ordered that do not meet the 20% fuel efficiency claims previously advertised, stating that they were in fact just above 17% at best.
“We have already sent a demand notice to Boeing seeking compensation for under-delivery of fuel efficiency as our six 787s on an average gave us only a little over 17% on the fuel efficiency front,” reports one source.
Air India is looking for price reductions on the remaining 21 787s to be delivered by 2016 year end. This is seen by many as being an announcement to compound already noted demands for compensation over the delivery delays on the 787s. Air India is seeking $700m in reparations for delivery delays. Maybe this latest leak/demand is aimed at gaining more traction from Boeing on the issue of 787 reparations, this in turn points to difficult negotiations on the issue at best between the two companies.
A Piedmont Airlines De Havilland Dash 8, operating for US Airways as flight 4560, was flying from Philadelphia with 34 passengers and three crew members aboard when it was forced to make an emergency landing on its belly at Newark’s Liberty Airport early on Saturday morning after the plane’s landing gear failed to deploy.
The airport was closed for more than an hour, with the runway closed for more than eight hours following the incident. The NTSB is investigating.
Etihad Airways has finalised an agreement to acquire three airport services companies which will accelerate and consolidate the development of in-flight catering services, ground handling and cargo operations at Abu Dhabi International Airport.
Ryanair pilots have been warned by management not to sign to a letter to the IAA expressing concern that the airline’s employment practices could jeopardise passenger safety – if they do, then they will be charged with gross misconduct and dismissal could follow. The letter was drawn up by the Ryanair Pilot Group (RPG), which represents captains and co-pilots working for the airline but is not recognised by the airline. The RPG is taking action amid concerns that the airline is making the majority of its pilots self-employed as pilots are currently signing contracts binding them to fly exclusively for Ryanair, but not as employees leaving pilots to pay for their own uniform, ID cards etc.
Turkish Airlines employees largely chose not to participate in the strike that was initiated by Hava-Is Union Labor on May 15 and operations continued without interruption. THY has now extended an invitation to the Hava-Is Union to sign the 24th Collective Bargaining Agreement by May 22, 2013. If it is not signed by that date, THY has decided to grant a pay increase to all employees, whether they are members of the Union or not. This will be done without any changes to the working conditions or social and employee rights
The only realistic solution to the UK’s shortage of hub capacity involves a third runway at Heathrow, owner BAA has confirmed at it delivered a seven-point plan to the UK government’s Airports Commission on Friday to mitigate noise and pollution at the London hub.
“Although the measures proposed are valuable, by themselves they are no substitute for providing an additional runway which is ultimately required to deliver long-haul connectivity for the UK,” BAA told the commission. In the report BAA rules out mixed runway modes for Heathrow. “The only real solution to a lack of runway capacity at our hub airport is to build another runway.
Ryanair has announced record annual profits of €569m, up 13% on last year despite higher oil costs. Revenues rose 13% to €4.88bn as traffic grew 5% to 79.3m passengers. Unit costs rose 8% mainly due to an 18% (€292m) increase in fuel. Excluding fuel unit costs rose by 3%, while avg. fares improved by 6%.
“Announcing these profits Ryanair’s, Michael O’Leary, said: “Delivering a 13% increase in profits and 5% traffic growth despite high oil prices during a European recession is testimony to the strength of Ryanair’s ultra-low cost model. Fuel costs rose by over €290m, and now represent 45% of total costs. Excluding fuel, unit costs were up 3% due to excessive and unjustified increases in Italian ATC, Eurocontrol and Spanish airport fees. Ancillary revenues outpaced traffic growth, rising 20% to €1,064m or 22% of total revenue.”
This summer Ryanair opened seven new bases, and more than 200 new routes. Nevertheless, O’Leary warned that despite having 9 additional aircraft and longer sectors “traffic growth this summer will be very modest at approx. 2%”. The airline intends to ground fewer aircraft next winter to deliver slightly faster H2 monthly growth it hopes will result in overall traffic growth for the full year rising by more than 2m to 81.5m passengers.
The airline reports forward bookings on new routes and bases this summer to be “ahead of expectations (albeit at modest yields) as competitor airlines continue to restructure and cut short-haul capacity”.
Looking ahead, Ryanair is considering new route opportunities in Germany, Scandinavia and central Europe.
O’Leary took the opportunity of the results announcement to again voice his disappointment with the EU’s decision to block its purchase of a stake in Aer Lingus. “We were disappointed that the European Commission in February 2013 decided to prohibit Ryanair’s third offer for Aer Lingus. It is bizarre that the EU can wave through BA’s offer for British Midland in Phase 1 with few remedies, yet months later reject Ryanair’s offer for Aer Lingus which was accompanied by a revolutionary remedies package delivering two upfront buyers to open competing bases in Dublin and Cork airports. We have no doubt that this was yet another politically motivated decision by Europe’s competition authority and it is inexplicable in the context of its stated policy of promoting European airline consolidation.”
He added that the UK’s Competition Commission review into its 6½ year old minority stake in Aer Lingus was “ bizarre” give that “it may have “lessened competition” between Ryanair and Aer Lingus”.
“Given that the UK Competition Commission has a legal duty of sincere co-operation with the EU, we believe they cannot make a contrary finding, and so this spurious and time wasting inquiry into a 6½ year old minority stake between two Irish airlines, one of whom (Aer Lingus) has a tiny presence in the UK market should now be abandoned in the light of the EU Commission’s finding that competition between Ryanair and Aer Lingus has intensified,” he said.
Ryanair is 90% hedged for FY’14 at $980 per tonne (approx. $98 p.bl) and has extended its hedges into FY’15 with 25% of H1 hedged at $930 per tonne (approx. $93 p.bl).
Cebu Pacific Air posted net income of PHP1.16 billion during the first quarter of 2013, a 20.2% increase compared to PHP962.40 million in the year-ago period.
The airline attributes the growth to robust passenger volumes, a rise in average fares, as well as increases in ancillary and cargo revenues.
CEB flew 4.9% more million passengers in Q1 2013, while the number of flights operated increased by 4.8%.
Average fares increased by 8.3%, driving passenger revenues to grow by 13.6%.
Growing passenger volumes raised ancillary revenues by 12.9% to PHP1.8 billion for Q1 2013, compared to PHP1.6 billion posted in the same period last year. Online bookings accounted for 52.8% of the total sales in the first quarter of 2013, an increase from 51.7%.
Meanwhile, cargo revenues grew by 3.5% due to increased volume and average freight charges of cargo transported in 2013.
CEB incurred operating expenses of PHP9.2 billion for the quarter, only 3.4% higher than the PHP8.9 billion operating expenses recorded for the same quarter last year. This contributed to a surge in Operating Income to PHP1.32 billion, 214% higher than the PHP420.1 million operating income earned last year.
Caribbean Airlines (CAL) has reported losses estimated at US$70 million last year, which does not include the US$40 million in fuel subsidy to the airline.
Finance Minister Larry Howai insists that the airline remains solvent: “Government has made certain provisions for the airline to restructure its balance sheet. One of the things they have done is to use a lot of their cash to actually do acquisitions of the planes and I have instructed a new restructuring of the balance sheet where you would need to borrow and replace the cash which was being used.
“It’s better to leverage the assets rather than leave it unencumbered but having the company incurring significant debt obligations,” Howai added.
Preliminary unaudited figures showed US$32 million of the $70 million loss was incurred by the Air Jamaica route, with the London route also accounting for a major part of the losses.
In 2011, CAL had recorded losses of USE43.7 million.
