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Thursday 20th April 2017
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Emirates cuts US capacity – is the hub-and-spoke model suffering?
You likely will have heard by now that Emirates is reducing its service to the United States in response to a drop in demand, which the airline says is a result of the U.S. government’s travel ban on certain countries and restrictions on electronic devices in cabins. Emirates will reduce the number of US cities it currently serves from 12 to five.

From May 1 and 23, respectively, flights to Fort Lauderdale and Orlando will drop from daily service to five time a week. On June 1 and 2, respectively, service to Seattle and Boston will drop from twice-daily services to a daily service. And, starting July 1, flights to Los Angeles will also drop from twice-daily service to a daily service

Emirates is doing the right thing and if nothing else we can state clearly that the airline is being run well and is doing what is needed to keep capacity in line with demand. So, what’s the real story here? The fact that Emirates is cutting capacity again. Emirates, THY and Etihad are under real pressure and utilization figures across the three airlines are falling across the board – this is all part of a general shift away from airlines sending passengers via a hub transfer towards point-to-point travel again.

The major airlines and flag carriers such as British Airways, Lufthansa, SIA, Delta and American, have gradually managed to shift their products and pricing while maintaining yield and in the process they have cabins, entertainment and most importantly pricing that closely matches that of Emirates. Now that the product and the price point are not far off the Emirates level, passengers are opting to travel by the fastest possible means, which is direct point-to-point travel. As Emirates and the like cut capacity, the stopovers in many instances become longer and thus the situation is exacerbated. When you see capacity cuts for the big Middle East major airlines, it is wise to check to see what this will do to stop over times on many flight options as that is what will damage them most in the long term and that is the curse of their otherwise outstanding business model.

To be fair to Emirates, Etihad and THY, they have become premium brands (the latter damaged by political circumstances of late) and have managed to grow rapidly whilst remaining in profit, but now it is time to look far more closely at how the business model and how it copes with contraction.

It is a great day for many in the airline sector though after the EIA data released last night showed that the U.S. oil surplus had increased by 1.5m barrels. Oil prices fell by over 4% back towards $50. It remains too dangerous to hedge perhaps but it is hoped that even though oil production in the Middle East is at a historic low with investment in infrastructure also at a historic low, North American production and increases in European fracking can overcome worries.

Philip Tozer-Pennington
philipt@aviationnews-online.com

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Airline News
Norwegian launches London-Singapore route
Norwegian will launch a new route from London Gatwick to Singapore this winter as the airline’s growing low-cost long-haul UK network expands into Asia for the first time.

From September 28, Norwegian will operate four weekly flights, increasing to five in the winter, from London Gatwick to Singapore Changi Airport, from £179 one way.

The new Singapore route will be operated on Norwegian’s new state-of-the-art 787 Dreamliner aircraft offering up to 344 seats in both economy and Premium cabins. Premium cabin fares are available from £699 one way.

Norwegian already offers affordable flights from London Gatwick to nine U.S destinations including the newly announced routes to Seattle and Denver. With a huge aircraft order and new traffic rights in place, the new Singapore route marks the first step in Norwegian’s ambitions to expand its existing long-haul network into a range of new global markets.

Norwegian CEO Bjorn Kjos said: “Our transatlantic flights have shown the huge demand for affordable long-haul travel, so we are delighted to expand into new markets and offer our first route to Asia from the UK.

“Travel should be affordable for all so adding Singapore to our growing UK network will give passengers even more choice for affordable, quality travel to a range of global destinations.

“The UK is at the heart of Norwegian’s ambitious plans for growth so it is a significant moment not only to launch this exciting new route, but also for it to be the first long-haul route to take to the skies with our new ‘Norwegian UK’ subsidiary.”

Greek low-cost airline Ellinair announces Georgia flights
The Greek low-cost airline Ellinair will perform flights on the route Heraklion-Tbilisi-Heraklion once a week on Thursdays from June 15 to September 14.

Passengers will also be able to use the Thessaloniki-Tbilisi-Thessaloniki route that will link Tbilisi to the Greek port city from May 18 to September 14. The flights will be performed twice a week, on Mondays and Thursdays.

The airline, based at Macedonia International Airport, received permission to launch the above mentioned flights from Georgia’s Civil Aviation Agency on April 13, 2017.

Leasing News
NAC delivers one Dash 8-Q400 to Hawaii Island Air
Nordic Aviation Capital (NAC) has delivered one Bombardier Dash 8-Q400, MSN 4339, to Hawaii Island Air, Inc. on lease. This is the first aircraft to deliver as part of a two aircraft lease deal signed in 2017.

Maintenance News
Aero Norway achieves UAE GCAA CAR 145 Maintenance Organisation Approval
Norway-based engine MRO facility Aero Norway AS has been granted UAE GCAA CAR 145 Maintenance Organisation Approval. The engine MRO centre is now multi-release FAA, EASA, TCCA, CAAC and GCAA certified.

GCAA certification allows Aero Norway to carry out maintenance of engines for aircraft registered in the UAE in accordance with CAR Part-145. The certification covers the full spectrum of services offered by CFM authorised repair station Aero Norway across all three engine models: CFM56-3, CFM56-5B and CFM56-7B.

“At Aero Norway the focus is always on delivering the best service and industry-recognised EGT margins that we can,” comments Glenford Marston, General Manager – Aero Norway. ” We have recently moved to a shift working regime for our dedicated repair technicians and support staff, and securing GCAA approval demonstrates that our capabilities across core technical skills are recognised worldwide. We sought GCAA approval in response to an overwhelming demand from our customer base across the Middle East, it further strengthens our existing approvals and qualifies our global appeal to operators of CFM engines.”

“Multi-release certification means that we provide a portfolio of winning engine MRO services,” says Marston. “We recently achieved CAAC approval to capitalise on the huge future potential for our engine support programmes in China and looking forward we will further extend the global reach of our services in South East Asia with the granting of Indonesian approval.”

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Airline News
Qatar Airways achieves compliance with IATA Resolution 753 Certification
Qatar Airways has become the first airline in the world to achieve compliance with the International Air Transport Association (IATA) Resolution 753 at its hub in Hamad International Airport (HIA).

The resolution requires the airline to track every piece of baggage from the start of the journey all the way through to its finish. The certification has been achieved thanks to the airline’s Baggage Management System (HAQIBA) developed in-house, as well as its seamless real time integration with the Qatar Airways website and mobile app.

Qatar Airways offers real time updates on checked baggage through the “Track My Bags” feature on its website and mobile app. The mobile app provides real time notification to passengers with relevant updates on the bag, as well as the ability to retrieve the details on need basis using “My Trips”.

The information includes various stages of the baggage handling process such as check-in, transfer, arrival, as well as reference to bag tags and baggage belt. This information guides passengers during the journey and provides insight into any instance of delayed or lost baggage. The HAQIBA system enables Qatar Airways’ staff to proactively manage the delayed bags to provide an optimized handling process.

Qatar Airways Group Chief Executive His Excellency Mr. Akbar Al Baker, said: “Our careful attention to our passengers’ baggage, from the beginning of their journey all the way through to its finish, is yet another indication of the importance we place on customer experience. We have proactively taken steps to align our baggage management systems with IATA’s requirements. As a result, we are delighted that the association has declared Qatar Airways the first airline worldwide to become certified for end-to-end tracking for our hub at Hamad International Airport.”

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Airline News
Virgin America takes delivery of its first ever A321neo
Airbus has delivered the first-ever A321neo. The latest generation aircraft powered by CFM International’s LEAP-1A engines was handed over to U.S. airline Virgin America, an all-Airbus operator, at a ceremony in Hamburg, Germany.

“After Virgin America having been the first customer signing for the A320neo back in December 2010, we are today delighted to deliver the first A321neo to them,” said Fabrice Brégier, Airbus Chief Operating Officer and President Commercial Aircraft.

“We have been with Virgin America from the beginning and we are excited to launch this new chapter in that relationship,” said Gael Meheust, President and CEO of CFM International. “The LEAP-1A has done extremely well in its first months of commercial service.”

“We are honored to be the first operator of this high in-demand aircraft,” said Virgin America President Peter Hunt, speaking at the ceremony attended by Virgin America teammates, Executives from Airbus, CFM and the aircraft lessor GECAS. “The new A321neo – the third member of the Airbus A320 Family to join our Virgin America fleet – will allow us to further reduce our unit costs and enable us to further reduce our carbon emissions.”

“Increased operational efficiency, productivity, and state-of-the-art technology — this winning combination makes the A321neo an attractive investment for leasing companies like GECAS who are committed to meeting customers’ operational needs while providing the latest technology and a solid return on investment,” said Alec Burger, President and CEO at GECAS. “The low operating costs and reliability of the LEAP powered A320neo Family make it a strong asset in GECAS’ portfolio.”

Copa Airlines adds Denver route
Copa Airlines will launch a service to Denver International Airport from December 11. The Star Alliance partner will fly four direct flights each week to Copa’s hub at Tocumen International Airport in Panama City, Panama.

American Airlines flight attendants’ union loses wage dispute
American Airlines flight attendants will receive a 1.6 percent raise, following a ruling by an arbitrator, which is far less than the 8.2 percent the union had requested.

“Flight attendants at this airline deserve industry-leading compensation. American CEO Doug Parker had an opportunity to deliver on the promise he made to make his employees the best-paid in the industry, and he refused,” Bob Ross, president of the Association of Professional Flight Attendants, said in a statement.

The dispute traces back to the complicated contract negotiations to bring together flight attendants from US Airways and American Airlines after the two carriers merged.

Leasing News
ALC places one 787-9 with LOT Polish Airlines
Air Lease Corporation has announced a long term lease agreement with LOT (Poland) for a new Boeing 787-9 aircraft with Rolls Royce Trent 1000 engines. The aircraft is from ALC’s order book with Boeing and will deliver in the second quarter of 2018.

“We are very pleased to announce this new 787-9 lease placement with LOT. In addition to the six new 737 MAX 8s ALC placed with LOT last year (first delivery November 2017), the Dreamliner offers new efficiencies and an enhanced passenger experience that will better serve their growing route networks,” said Alex Khatibi, Air Lease Corporation’s Executive Vice President.


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Airline News
Air India to fine unruly passengers
Air India has announced it will start fining unruly passengers who delay flights. According to The Times of India, the airline is planning to fine 5 lakh Rupees (£6,043) for delaying a flight up to an hour, 10 lakh Rupees (£12,087) for delaying a flight between one and two hours and 15 lakh Rupees (£18,131) for delaying a flight for more than two hours.

Air India says this is a “symbolic amount” to deter unruly flyers.

Maintenance News
Air India 777-300 ER aircraft grounded in Delhi due to hydraulic failure
On April 18, an Air India 777-300ER aircraft due to fly to New York was grounded Delhi due to a hydraulic failure in one of the aircraft engines. Passengers were accommodated in a nearby hotel and the flight was rescheduled for the next day.