US Airlines’ Revenue Trends Improve In October

November 7, 2009

Traffic for the top three US airlines slumped in October, but load factors for most of the nine largest carriers rose and the decline in unit revenue showed signs of slowing down.

Delta Air Lines’ traffic fell 6.5 percent in October versus a year ago. Delta said its load factor rose 1.6 points to 84.2 percent.

American Airlines and United Airlines also reported traffic declines last month.

An FTN Equity Capital Markets analyst said on Friday that unit revenue, a measure of profitability, did not fall as sharply in October as it did the prior month, a sign that operating conditions may be improving.

“October unit revenue improved sequentially from the prior month,” analyst Michael Derchin said in a note. “It now appears that June and September marked the double bottom for the airlines in this important earnings driver.”

US Airways said its consolidated unit revenue sank 10 percent in October, better than the 15-percent decline it logged in September.

For the industry as a whole, mainline unit revenue fell 14 percent in October, better than the 17.4 percent drop in September, according to Derchin.

“The revenue outlook continues to show material signs of improvement with continued strength in both close-in bookings and yields,” US Airways President Scott Kirby said in a statement.

Seven of the nine largest carriers cut capacity in October, typically a strong month for business travel.

(Reuters)

Asur October Passenger Traffic Down 7.2 Pct

November 6, 2009

Mexican airport operator Asur said on Friday its October passenger traffic fell 7.2 percent from a year before, hurt by declines in six of its nine destinations, including the resort of Cancun.

Grupo Aeroportuario del Sureste is slowly recovering from the harsh effects of a flu outbreak in Mexico earlier this year that halted key chunks of the economy for several days and scared tourists away.

In May, Asur’s traffic dropped 51 percent but subsequent monthly results have shown less abrupt declines.

(Reuters)

US Couple Arrested For Stealing Scores Of Luggage

November 5, 2009

Police have solved the mystery of where about 1,000 pieces of luggage from Phoenix’s Sky Harbor Airport disappeared to — the home of local couple Keith and Stacy King.

Authorities initially detained Keith King three weeks ago after he was spotted entering the airport from outside and taking a piece of luggage police learned was not his from a baggage carousel to the parking lot.

However, his initial arrest apparently did not put an end to his alleged activities as King was found again on Monday at the airport taking another suitcase. Police followed him to his home on the outskirts of Phoenix, obtained a search warrant, and discovered the huge luggage stash.

“We believe that the suspects… went through the bags pretty much as soon as they got them and took out what they thought was of value and could use,” Phoenix police spokesman Detective James Holmes said.

“It’s a God awful lot of luggage, you can’t even imagine,” he said.

Holmes said that interviews with neighbours revealed that the couple had yard sales most weekends to sell a variety of the stolen goods, including the suitcases themselves.

While it was unclear what was the role of King’s wife in the scheme, the two are likely facing a multitude of charges including theft and burglary, he said.

Authorities are now trying to identify “massive amounts of stolen items” in an attempt to reunite them with their owners.

(Reuters)

Aeroports de Paris Wins Iraq Airport Contract

November 2, 2009

French airport operator Aeroports de Paris has won a contract to work on plans for a new international airport in Iraq, a spokesman for ADP said on Monday.

Iraqi Transport Minister Amer Abdul-Jabbar said the contract was worth around USD$42.5 million.

He said the airport would be built between the three provinces of Kerbala, Najaf and Hilla, which are home to some of Shi’ite Islam’s holiest cities. Hundreds of thousands of Shi’ite pilgrims have visited them since the fall of Saddam Hussein.

Abdul-Jabbar said the aim was to have the new airport up and running within three to five years, with an initial capacity of five million passengers per year and eventual capacity of 35 million per year.

By comparison, Baghdad Airport currently manages around seven million passengers a year, he said.

French President Nicolas Sarkozy visited Baghdad in February to promote business opportunities for French companies.

(Reuters)

BAA Says Worst Over, Targets Bond Market

October 28, 2009

Debt-laden British airports operator BAA said the worst of a slump in passenger numbers was over and it hoped to re-enter the bond market soon following the sale of London Gatwick airport.

The owner of London’s Heathrow has been a burden for its Spanish parent, infrastructure group Ferrovial, which bought BAA using debt at the top of the market in 2006. It sold the capital’s No. 2 airport Gatwick at a EUR142 million euro (USD$211 million) capital loss last week.

But the sale has cleared the way for the operator to re-enter the bond market.

“We would like to be in the bond market as soon as we can and we’d expect that to be relatively soon,” BAA’s chief executive Colin Matthews said.

“As the economy recovers, passenger numbers will recover with it… I think we can say the worst is past.”

Ferrovial had planned to sell around GBP4.5 billion pounds of bonds to refinance its purchase of BAA before the credit crunch intervened.

BAA said earlier that nine months earnings rose as increases in landing charges and a strong performance from its airport shops offset declines in passenger numbers.

Adjusted earnings before interest tax, depreciation and amortisation (EBITDA) rose 16.8 percent to GBP804.6 million, while passenger numbers fell 5.5 percent to 90.7 million.

Net debt at September 30 was GBP9.771 billion, up from GBP9.426 billion at the end of 2008, and it booked a GBP225 million impairment charge on the Gatwick sale.

Its outlook for 2009 remained in line with expectations.

An initial GBP9 billion bridge loan for Ferrovial’s purchase of BAA was refinanced one year ago, and Ferrovial on Tuesday denied speculation it was about to make a capital increase.

The company put in place a funding platform which it can use to issue bonds or utilise a GBP7.15 billion bank facility.

Ferrovial is expected to post a 1.9 percent fall in core earnings on Thursday.

(Reuters)

Shanghai May Consider Investment From HK Airport

October 15, 2009

Shanghai Airport may consider bringing in Hong Kong’s airport authority as a strategic investor when its parent company carries out a full listing of the group by shifting assets to its listed unit, an executive of the parent company said on Thursday.

Li Derun, executive vice president of the parent company, Shanghai Airport Authority, made the comments to reporters at an industry event.

Shanghai Airport Authority, which operates the Chinese financial hub’s two main airports, Pudong International and Hongqiao International, has not set a timetable for completing its full listing of the group.

(Reuters)

ADP Jan-Sept Traffic Down 5.6 Percent

October 15, 2009

French airport operator ADP on Thursday said traffic dropped 5.6 percent between January and September and added it aimed to keep its underlying earnings stable this year against 2008.

“For the January-September period, we are at minus 5.6 percent,” ADP chief executive Pierre Graff said on the sidelines of an event held at Roissy, just outside Paris.

He said traffic fell 4 percent in September alone.

Traffic for the whole of 2009 would fall between 4.5 percent and 6.5 percent and earnings before interest, tax, depreciation and amortisation (EBITDA) would match that of 2008, Graff said.

(Reuters)

Japan Plans To Turn Haneda Into International Hub

October 13, 2009

Japan’s new government plans to turn Tokyo’s Haneda Airport into a hub for international flights, the transport minister said at a press conference on Tuesday.

Haneda, which mostly handles domestic flights, is scheduled to expand its capacity by 110,000 slots next autumn, about half of which will be assigned to international flights.

Transport Minister Seiji Maehara wants to turn Haneda into an international airport by operating it round the clock.

“Many passengers from Japan’s regional airports go abroad by way of South Korea’s Incheon Airport. Japan needs its own international hubs. Haneda would be the first one,” said Maehara.

But the plan may run into opposition from local governments in Japan where other international airports are located.

Haneda is closer to central Tokyo than Narita, the country’s main international airport.

(Reuters)

UK Dilutes Proposed Airport Insolvency Rules

October 13, 2009

The British government on Tuesday watered down proposed new solvency rules for big airports, dropping plans for a special administration regime to ensure airports stay open even if their operators go bust.

The industry had claimed the government’s original plan would have meant that investors in airport infrastructure projects could demand higher returns, pushing up the cost of financing development projects.

“The government has concluded that the implementation costs of introducing Special Administration would outweigh the benefits, and could significantly restrict airport operators’ ability to commit to ongoing investment in the airport infrastructure,” the Department of Transport said.

The move is a boost for debt-laden airport operator BAA — which runs Heathrow, Gatwick and Stansted airports –, whose bond ratings were at risk of a downgrade if the original plan had been introduced.

“We view this is an extremely important de-risking event,” said a Macquarie Equities Research analyst in a note to clients.

BAA, which is controlled by Spanish builder Ferrovial and owes lenders some GBP10 billion pounds (USD$15.9 billion), said the change would make it easier to complete the planned refurbishment of London Heathrow airport.

BAA said the revised proposal “removes key uncertainties for BAA and its creditors and underlines the need for the regulator to ensure airport operators have the necessary resources to operate and invest in their airports”.

In place of the special administration regime comes a package of proposals, including a new minimum creditworthiness requirement for operators.

The government is also planning to give the Civil Aviation Authority (CAA) responsibility for ensuring airport operators can finance their day-to-day activities.

The CAA said that did not mean it was required to maintain airport financing in all circumstances.

(Reuters)

India pilots in mid-air ’scuffle’

Air India plane
Air India has ordered an inquiry into the incident

Pilots and cabin crew have come to blows on an international flight bound for India, media reports say.

The scuffle is said to have begun as an argument in the plane’s cockpit over claims of sexual harassment but spilled into the galley, startling passengers.

One pilot and one air hostess suffered bruises, as punches were thrown.

The incident took place over Pakistan on an Air India flight from the United Arab Emirates to Delhi, with 106 passengers and seven crew on board.

Indian police are investigating the incident, which took place at around 0430 local time on Saturday (2300 on Friday GMT).

The cabin crew alleged that pilots sexually harassed a 24-year-old air hostess, who filed a complaint once the plane landed.

But the Times of India newspaper said the pilots made a counter-claim, saying that the harassment claim was an attempt to divert attention from accusations of misconduct against a male flight attendant.

Air India said it had ordered an inquiry into the incident, and had grounded all the staff involved.

(BBC)

Pilots protest over flying hours

Airliner
Pilots claim long duty hours are putting passengers in danger

Airline pilots who say long flying hours are “putting lives at risk” are to hold demonstrations across Europe.

European air crew unions argue current rules governing how long they can fly for are unsafe, with fatigue a factor in 15% of accidents.

But the European Aviation Safety Agency says it is still considering a scientific report on the issue.

There will be no demonstrations in the UK because industrial action by pilots is outlawed.

British pilots are expected to join demonstrations on the continent with colleagues from 35 other countries.

It is not clear whether the action will cause disruption to travellers.

Pilots and air crew have complained that their working conditions have deteriorated as the airline industry looks to cut costs.

The British Airline Pilots Association (Balpa) said two million leaflets would be handed out across Europe by the protesters.

The general secretary of Balpa, Jim McAuslan, said he feared that attempts by the EU to standardise working conditions by 2012 would put more pressure on pilots.

This is a defining moment in how passengers will be protected
Jim McAuslan,
British Airline Pilots Association

He said: “Only fatigue experts understand the impact on a body of flying through so many time zones, having consecutive early starts and late duties and all the other factors that make up a pilot’s life.

Mr McAusland told the BBC that while EU law meant a pilot could work up to 14 hours a day, scientists believe they should not exceed 13 hours.

“Anything over that increases the risk of an accident by five and a half times,” he said.

“When that’s brought home to the public, I hope the public will put pressure on the regulator to say ‘you mustn’t do this – you must listen to what science has been saying.’”

A Department for Transport spokesman insisted that safety would not be compromised by the new rules.

He said: “The European Aviation Safety Agency is in the process of considering the responses to its consultation on a first draft of rules establishing flight and duty time limits.

“While these are unlikely to be finalised until some time in 2011, we are confident they will maintain the same high level of safety as the current rules.

“The safety of passengers and crew is our top priority and we will not allow this to be compromised.”

(BBC)

Saudi Arabia Licenses Pilgrimage Airline

October 5, 2009

Saudi-based pilgrimage airline Alwafeer Air has obtained an operating license and is expected to start flying during the haj season in November, an official said on Sunday.

The Jeddah-based airline is the kingdom’s fourth after state-owned Saudi Arabian Airlines and low budget carriers Nas Air and Sama.

“Today they received their Air Operation Certificate (AOC) but they will not start yet,” said Abdulhalim Felemban, supervisor of economic planning at the General Authority of Civil Aviation.

“It will take time but it will definitely operate in haj,” he said.

The charter airline will focus on flying pilgrims to Saudi Arabia, home to Islam’s holiest sites in Mecca and Madina, starting with three Boeing 747 aircraft, and may expand its fleet to eight planes within three years.

More than two million pilgrims from around the world flock to Mecca to perform the annual haj. Umra, the minor pilgrimage, can be done throughout the year.

Alwafeer aims to attract “the largest share of the haj and umra transportation”, the carrier said on its website without giving details.

(Reuters)

AirAsia To Defer 8 Airbus Deliveries – Report

October 5, 2009

Malaysian low cost carrier AirAsia is to postpone delivery of eight Airbus A320-200 aircraft due in 2011, the Star newspaper reported on Monday.

“We will defer eight of the 24 deliveries for 2011,” AirAsia chief executive Tony Fernandes was quoted as saying by the paper.

The aircraft will now be delivered in 2014, the paper said.

(Reuters)

American, BA Warned By EU Over Proposed Tie-Up

October 2, 2009

Oneworld alliance partners American Airlines, British Airways and Iberia face fresh European Union antitrust hurdles as they look to extend their pact to include coordinated schedules and prices.

The airlines had planned to deepen the pact to take advantage of the US/EU “Open Skies” agreement, with the focus on routes between the United States, Mexico, Canada, the EU, Norway and Switzerland, but European Union regulators said the latest plan may violate antitrust rules on restrictive business practices.

Alliances are seen as a lucrative alternative to mergers and large-scale investments. The three carriers have applied for US government antitrust immunity for their trans-Atlantic pact.

The European Commission, which in April launched a probe into both the three Oneworld members and the Star Alliance, said it had sent a charge sheet to the three Oneworld members.

“The Commission’s statement of objections concerns agreements… regarding the coordination of the parties’ commercial, operational and marketing activities in relation to passenger traffic on transatlantic routes,” the EU executive said in a statement.

Price-fixing is illegal under EU antitrust rules.

The Commission may be concerned that the alliance could monopolise certain routes and lead to fewer flights for some destinations, said antitrust lawyer Martin Bechtold at Allen & Overy.

“What happens in these alliances is that the parties agree to jointly serve destinations, so for example offering one flight instead of three. Their argument would be that this is not restrictive and this creates efficiencies,” he said.

“It appears that the Commission has so far not been convinced that the efficiencies are great,” Bechtold said. He said allowing rivals to offer a similar service or join their bonus programmes and giving up airport slots may address competition concerns.

British Airways, American and Iberia said they were ready to cooperate with the Commission and look for remedies.

“We look forward to the opportunity to address and overcome the EU’s concerns, especially given the substantial benefits for consumers that would result from our trans-Atlantic joint business,” AMR said in a statement.

Rival airline Virgin Atlantic said the antitrust concerns were justified.

“This alliance between British Airways and American Airlines is a monster monopoly which, if given the go-ahead, will allow these dominant carriers to increase their stranglehold at Heathrow by setting prices and agreeing schedules,” Virgin’s chief executive, Steve Ridgway, said in a statement.

The Commission said it was still investigating the four Star Alliance members’ (Air Canada, Continental Airlines, Lufthansa and United Airlines) current trans-Atlantic cooperation and their planned four-party tie-up as well as a proposed pact between SkyTeam members Air France-KLM and Delta Air Lines, which merged with Northwest last year.

The airline industry is expected to post USD$11 billion in losses this year, with weak passenger and cargo demand denting revenues, IATA said last month.

(Reuters)

Police Shoot At Men In Jakarta Airport Attack

September 30, 2009

Indonesian police opened fire on three cars after an altercation involving men with weapons at Jakarta’s Soekarno-Hatta airport on Wednesday, according to an airport official said.

“The information I received was that there were three cars, suddenly the passengers got out and attacked the counter for Sriwijaya Air and then left,” Tahoma Sirait, head of operations at Soekarno-Hatta airport said.

“Airport police then chased them and warned them to surrender their weapons but they didn’t, so the police shot at the cars.”

Police could not be reached for further details about the attack or any casualties. The reason for the attack was not clear.

Sirait said he was told that the men were carrying knives or swords. Local media reported that there was blood visible on the street outside the airport.

Security is tight across the country after suicide bombers attacked two luxury hotels in Jakarta in July, killing nine and injuring over 50. The mastermind of those and other earlier attacks, Noordin Muhammad Top, was killed earlier this month.

(Reuters)

Air Traffic Demand Improving, Profit Far Away – IATA

September 29, 2009

Air traffic demand is recovering from the steep slump caused by the global recession but the airline industry remains well away from a return to profit, the International Air Transport Association (IATA) said on Tuesday.

The IATA data added to news which has suggested the global economy was slowly recovering from the deepest recession since World War Two.

“Demand continues to improve, but profitability remains ever distant,” said Giovanni Bisignani, IATA’s Director General, in a statement. “Fares have stabilised, but at profitless levels. Meanwhile cost pressures are mounting from reduced aircraft utilisation and rising oil prices,” he said.

Airlines carried 9.6 percent less cargo in August year-on-year, while passenger demand fell 1.1 percent, said IATA which represents 230 airlines comprising 93 percent of scheduled international air traffic.

Demand was well off the lows hit earlier in the recession, IATA said. Freight levels were 12 percent above the low-point hit in December 2008 and passenger demand was 6 percent higher than the low in March 2009.

Air freight demand was down 18 percent in the first eight months of 2009 compared to the year-ago period, while passenger demand was down 6 percent.

IATA said Latin American and Middle Eastern carriers saw freight demand growing on the year in August and the Middle East was also the only region to record rising passenger demand.

In August, the passenger load factor improved by 1.2 percentage points on the year to 80.9 percent but average fares were 22 percent lower for premium seats and 18 percent down for economy seats.

IATA said earlier this month it expected a loss of USD$11 billion for the industry in 2009 and a USD$3.8 billion loss in 2010.

(Reuters)

Swine Flu Fears Hit Saudi Religious Tourism

September 28, 2009

Standing behind a wall of pearls and rosaries in a shop in Mecca, souvenir dealer Mohammad Hamdi says business has never been so bad.

Shops, hotels and tour operators in Islam’s holiest city in western Saudi Arabia are counting the losses as many pilgrims, worried about a spread of swine flu, stay at home.

The haj, one of the world’s biggest religious gatherings, is still two months away but there has already been a marked fall in visitors for the minor pilgrimage known as umra, which can be done at any time of the year.

“In previous years people were buying a lot but now only a few come which is hitting sales,” said Hamdi, from Egypt.

Losses in Mecca are small compared to the massive wealth of the kingdom which sits on more than a fifth of global oil reserves and billions of dollars in state coffers.

But the slump is plaguing a sector the government hopes to develop to help lower dependence on oil. Banks are also trying to cope with the debt problems of large family firms.

Faced with a mainly young native population of more than 18 million, job creation is a key challenge for the government.

Hotel occupancy rates during the last ten days of the fasting month of Ramadan, when many perform umra, fell by more than a third to 55 percent compared to last year, said Walid Abu Sabaa, head of the tourism and hotels committee at the Mecca chamber of commerce.

Countries such as Egypt, Tunisia and Iraq have sought to limit the number of pilgrims after Saudi Arabia urged the elderly and people with chronic diseases to postpone trips.

Businessmen say their biggest-spending clients are staying away. “There is an absence of Gulf pilgrims from Kuwait, the United Arab Emirates, Bahrain or Oman,” said Saudi jewellery dealer Saud Mohammad, who owns a shop inside a mall.

PILGRIM TOURISM SUFFERS

Analysts differ on the exact fallout of the H1N1 flu virus on tourism but agree there will be a hit. “Saudi authorities will be faced with serious health and economic challenges,” said a report by Political Capital consultancy.

Despite hosting historical sights such as the Nabataean town of Madain Saleh, the kingdom has never become a tourist destination like neighbours Dubai or Bahrain, due to the austere Islamic rules dictating daily life and a tough visa regime.

Women must cover their hair and are not allowed to drive and unrelated men and women cannot mix. Alcohol, cinemas and bars are banned in the kingdom.

Tourism only contributed 2.7 percent to the gross domestic product (GDP) in 2008, according to the central bank. The sector directly employs about 440,000 mostly expatriate workers.

The industry depends on domestic travel and pilgrims in Mecca and Medina — both holy cities are witnessing massive investments to build hotels, malls or time-share apartments.

Authorities did not announce any deaths linked to flu in the two cities during Ramadan. In total, Saudi has treated around 3,500 cases of which 26 died, local media said.

The country plans new health centres and to import 10 million doses of vaccine. Pharmacies in Mecca sell masks worn by many pilgrims, police, shop and restaurant staff.

But even if the numbers go down authorities still face a big challenge — thousands flock every day to the Grand Mosque with some poor pilgrims sleeping and dozing in groups on prayer mats. Workers promptly clean up the mosque, toilets and narrow streets but dustbins quickly fill up in central malls where many eat in cheap restaurants or on the ground.

“I heard much of swine flu… (but) for an old woman like me there would be nothing better if I died here in this holy land,” said a pilgrim in her 70s from Algeria.

(Reuters)

Boeing Sees Return To Cargo Growth In 2010

September 9, 2009

Boeing expects global air cargo traffic to return to growth next year amid a broad economic recovery, with the United States and China leading the way, a senior executive said on Wednesday.

Air cargo growth typically leads economic and passenger traffic growth by 3-6 months, Jim Edgar, Boeing’s regional director, cargo marketing, said at the Asian Aerospace Expo in Hong Kong.

“This year, we’re anticipating a deeper decline and it’ll be the first time in history that we’ll have two years of decline back to back,” Edgar said, referring to worldwide cargo traffic.

“The decline is slowing… things are improving and we’re hopeful, but there’s a way to go yet,” he said, adding that near-term uncertainties include the global economy, oil prices and the stability of financial institutions.

Generous stimulus packages from governments will prop up the global economy, Edgar said.

“We expect the US and China to lead the worldwide recovery, followed by the EU, UK and Japan,” he said.

Air freight, a leading indicator of the health of world trade, is picking up slowly, but is still down on last year and the upturn remains fragile, the International Air Transport Association (IATA) said last week.

Airlines carried 11.3 percent less cargo in July than a year earlier, according to IATA data.

Boeing, like its European rival Airbus, has had a difficult year as carriers and air cargo operators have seen less business during the global recession.

The road to recovery for the airline industry still looks bumpy for the current second half, said Randy Tinseth, vice-president of marketing for Boeing Commercial Airplanes.

“We’re going into the worst part of the year — it’ll be a pretty tough next 4-6 months,” Tinseth said. “But in 2010, there’ll be a bounce back in traffic.”

On Tuesday, Airbus said it was seeing signs of recovery in freight demand and expects a recovery in total passenger traffic volume by 2010.

Airbus and Boeing are headed for their worst annual order tally in at least 15 years as struggling airlines cancel or defer almost as many planes as they are buying.

(Reuters)

Manchester Airport Wins UK Travel Trade ‘Oscar’

September 24, 2009

Manchester Airport in the North West of England has been named UK airport of the year.

The Travel Trade Gazette Awards, voted on by travel agents and independent industry observers, selected Manchester for the top prize ahead of London Luton, Southampton and Birmingham airports.

The award follows the unveiling of GBP80 million (USD$130 million) redevelopment work across the airport’s Terminals 1 and 2 including GBP25 million (USD$40.5 million) on improving security.

Andrew Cornish, the airport’s managing director said: “We are extremely proud to have secured such a highly acclaimed award which is a real tribute to the efforts of the 19,000 people who work at Manchester Airport.”

Airports were judged on their facilities, customer service standards, investment, innovation, travel trade relations, business strategy, environmental performance and commitment to their local communities.

(Airwise)

Macquarie Airports Sells Bristol Airport Stake

September 16, 2009

Australian investment firm Macquarie Airports (MAP) has agreed to sell its 35.5 percent stake in the UK’s Bristol airport and will lift its stake in Copenhagen airport, it said on Wednesday.

MAP sold the Bristol stake to Ontario Teachers’ Pension Plan for GBP128 million pounds (USD$211 million).

It will buy a further 3.9 percent of Copenhagen airport for DKK570 million kroner (USD$112 million), taking its stake to 30.8 percent.

“Bristol now represents just 4 percent of our portfolio by value, and we feel that our investors are better served deploying our resources elsewhere,” MAP said in a statement.

(Reuters)