9 june 2015 .pdf
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http://www.smh.com.au
Qantas, Emirates and Singapore Airlines out of excuses for fuel surcharges
Although fuel prices have fallen Qantas hasn't lowered its fares
instead wrapping the former fuel surcharge into the headline price of
the ticket and only offering some savings on frequent flyer points
redemptions Photo: Glenn Hunt With oil prices almost half what they were this time last year,
travellers could be forgiven for wondering when they will benefit from
an equally large fall in air fares. The bottom line is that you won't. Egged on by investors, airlines are doing their utmost to pocket the
gains from cheaper fuel and weaker competition on international and
a domestic routes. In fact, airlines worldwide are set to report
due mostly to billion) profit this year4 .38billion ($3 .29collective $US
the sharply reduced fuel prices and cramming more passengers on planes. Their profit margins will be almost double what they were last year,
and Qantas is among the biggest beneficiaries as it flies towards a
$1 billion annual pre-tax profit. Advertisement With airlines on cloud nine, it makes the fuel surcharges that Qantas,
Emirates and Singapore Airlines slap on tickets harder to justify by
the day. The airlines cried poor as they rushed to repeatedly raise surcharges
when oil prices were climbing between 2011 and 2014. But
they have been acting at glacial pace to cut them since the good
times returned.
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http://www.smh.com.au
Continue)( Qantas and Emirates still impose surcharges of $1080 for a
return business-class flight from Australia to London, and
$570 for economy. On the popular Australia-Los Angeles run,
the flying kangaroo has a fuel fee of $670 for a business seat
and $570 for those in cattle class. Frequent losers They hit frequent-flyer members hardest. Airlines cannot dramatically raise overall ticket prices by
boosting surcharges because travellers would opt for rival
carriers that do not impose them. But they can bolster their revenues from frequent flyers who
have to pay for the fuel surcharge component of their fare in
cash or loyalty points. They also snare travel agents in their net. The likes of Flight
Centre have long complained about fuel fees because they
often don't earn a commission on the surcharge component
of the total fare. Qantas first introduced the fuel surcharges in 2004, charging
passengers up to $14 a sector on international flights and $6
for domestic services. It was a convenient way of justifying to travellers increases in
ticket prices, which consumers were willing to stomach so
long as the cost of fuel was soaring. .
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http://www.smh.com.au
(Continue)
But it has plunged since the middle of last year, and the
surcharges are quickly becoming a PR nightmare for good
reason. Virgin Australia inferred as much in January when it
removed the last surcharge from its international network. Qantas is doing its best by no longer referring to them as fuel
it is "folding" them into its base fares. Instead,. surcharges Different course In Hong Kong, the aviation regulator has cut the surcharges
airlines can impose on passengers flying to Australia by 75
per cent to $HK211 ($35) over the last year. Australia is not regulated, and there appears little appetite
here to take a leaf out of Hong Kong's book. The Australian Competition Consumer Commission applied
began the blow torch to Qantas and Virgin in January when it
.investigating fuel surcharges
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http://www.smh.com.au
Continue)( Six months on, the regulator is still looking into the matter. It's questionable whether it can do much anyway. Unless
Qantas, Emirates or Singapore Airlines are deceiving or
misleading consumers, they are free to slap on surcharges
as they like. One of the few forces that will drive fares down is increased
competition. In both domestic and international markets, the battle
between airlines is lessening after a ferocious few years. per cent 26 surged domestic routesclass fares on -Business
earlier, in the wake of Qantas and Virgin from a year, in May
ending their capacity war. raise this week that it has been able to Qantas also said
because foreign airlines have reduced international fares
their level of growth on routes to Australia. Ultimately, airline executives believe they answer to their
shareholders first, and their customers second. But they can't afford to annoy the latter for too long,
especially on something that flies so close to their
back pockets.
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http://www.globalindonesianvoices.com
Challenges in the Air as Indonesia Climbs to 2034th Largest Aviation Market by 6Become
Jakarta, GIVnews.com Indonesias aviation industry is one of the countrys most promising sectors. Being an archipelago, Indonesia naturally needs air travel for the
mobility of its people and goods. With a population of roughly
250 million and with a rising middle class, Indonesians are
hungrier than ever for air transportation. Indonesian airlines have been making headlines around the
world; Garuda Indonesia won Worlds 7th Best Airline, 1st Best Cabin Staff, 9th Best First Class, 8th Best Business
Class, 2nd Best Economy Class, and 7th Best Airport Services
in the prestigious 2014 Skytrax World Airline Awards. By 2034, Indonesia is expected to be the sixth largest market
for air travel. By then some 270 million passengers are
expected to fly to, from and within the country. -5Garuda Indonesia Officially Recognized as (Read more:
)Star Airline by Skytrax In November 2011, Lion Air ordered 230 Boeing 737s worth
USD 21.7 billion (IDR 286.5 trillion), the largest order ever
received by Boeing. Barely one and a half year later, the
same airline placed an order for 234 Airbus A320s worth
USD 24 billion. The order was also Airbus biggest ever, and so significant to the struggling European economy that its
signing was held in the Elyse Palace in Paris, in the presence of French President Franois Hollande. Thanks to the two massive orders, Lion Air is now on track to become
Asias biggest airline.
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http://www.globalindonesianvoices.com
(Continue) One of the most problematic issue for Indonesian aviation is
safety. According to IATA, at least one airplane is lost every
year since 2010, and in the latest International Civil Aviation
Organizations )ICAO( Universal Safety Oversight Audit Program, the country is still far below the global average.
Moreover, in the International Aviation Safety Assessment
program, Indonesia was downgraded to category 2 by the
U.S. Federation Aviation Administration, and the European
Union still bans all but five of Indonesian airlines from flying
into its territory. Of the 62 airlines operating scheduled or
chartered flights in Indonesia, only Garuda Indonesia is
registered in the IATA Operational Safety Audit. Furthermore, the latest major disaster involving AirAsia flight
QZ8501, is still fresh in Indonesians memories. All 155 passengers and 7 crews are either dead or lost. More
recently on June 2nd, Garuda Indonesia flight GA618 skidded
during a rough landing amid a heavy downpour in Makassar.
Fortunately, there are no casualties. Maximizing Potential Considering the potential for air traffic boom in the future, it is
essential to develop new airports, refurbish existing ones,
and build other necessary ground infrastructures.
Introduction of the modern Kuala Namu airport in Medan is
an excellent first step, and the government plans to add 62
more airports in the next five years, plus new terminals for.
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http://www.globalindonesianvoices.com
(Continue) the flagship Soekarno-Hatta International Airport (SHIA) in
Jakarta. Unfortunately, SHIA would still be running below its
optimum capacity even after the new terminals are realized.
Plenty of land are still available around the current buildings,
those too must be developed sooner than later. Meanwhile, Angkasa Pura II, the company which manages
SHIA and other airports, recently revealed that Boeing 777s
are not allowed to take off with full capacity from SHIA due to
weight restrictions. This also means that existing runways in
SHIA will never be able to accommodate fully loaded Airbus
A380s, the biggest airplane in operation. A full-capacity
Boeing 777s weigh around 350 tons, while an A380 can
reach up to 560 tons, a significant difference. This lack of
quality infrastructure must be resolved soon, as the current
condition forces heavier planes to make a transit in
Singapore, increasing costs and reducing efficiency. The government has also launches several policies that are
meant to improve safety and efficiency in the aviation
industry. The first is forbidding carriers to sell their tickets
below 40% of the upper bound price set by the government
to prevent unhealthy competition. To help reduce people
congestion in airports, carriers are no longer allowed to sell
tickets within the airport area. Lastly, airport taxes are now
included directly in the ticket price to help streamline airport
protocols.
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http://www.globalindonesianvoices.com
(Continue) Fortunately, the slump in oil price has acted as a catalyst for
the growth of Indonesian airlines. In the first quarter of 2015,
Garuda Indonesia managed to book a profit of USD 11.39
million, compared to a massive loss of USD 168 million in the
first quarter of 2014. This positive trend is largely thanks to
cheap oil, which allows Garuda to churn some profit even
though its market share fell by 9% on a year-on-year basis. In short, Indonesias aviation market holds huge potential. The government should work with airlines and international
regulatory bodies in order to prepare Indonesia for the
unavoidable surge in air traffic. New airplanes are coming in
great numbers and the passengers will be there to fill them,
but it remains to be seen whether new airports can be build
fast enough to accommodate both the planes and the
people. Airlines must cut costs and spend less as the oil
price will not stay down forever. When it climbs up again,
Indonesian carriers must be ready
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http://www.jamaicaobserver.com/
'Flying has never been safer,' says air industry
chief FLORIDA, United States (AFP) Traveling by plane is safer than ever despite a series of headline-grabbing airline
disasters in recent months, the head of a major global
aviation group said Monday. "With one jet hull loss for every 4.4 million flights last year,
flying has never been safer," said Tony Tyler, International Air
Transport Association (IATA) director general, told the
group's 71st annual meeting. "In contrast, paradoxically so, aviation safety has been a
constant in recent headlines," added Tyler, describing the
disappearance of Malaysia Airlines flight 370 in March 2014,
the shooting down of Malaysia Airlines flight 17 over war-torn
Ukraine in July last year and the deliberate crash by a co-
pilot of a Germanwings flight into the French Alps in March
as "extraordinary events." "Every loss is a tragedy," Tyler told the opening session of
the meeting, which drew more than 1,000 industry leaders
from around the world to south Florida. "The greatest tribute we can pay to them is to make flying
ever safer. That is precisely what we are doing." He said improved tracking standards are being developed to
report on an airline's whereabout every 15 minutes. "In the near future, emerging technology and proposed new
practices will move us closer to ensuring that never again will
an aircraft simply disappear."
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http://www.jamaicaobserver.com/
(Continue) He described the loss of flight MH17 -- which killed 298
people when it was shot down over Ukraine last year -- as
"an outrage," adding that civilian aircraft "must never be
targets for weapons of war." He said the global governments are working to better share
security information through the International Civil Aviation
Organization, and called for a global convention to "control
the design, manufacture, sale and deployment of weapons
with anti-aircraft capability." Kiev and Western governments say the plane was shot down
by separatists using a surface-to-air missile supplied by
Moscow. Russia has denied involvement and placed the
blame on Kiev. The loss of Germanwings flight 9525, which crashed into the
French Alps, killing all 150 people on board in an apparently
suicidal act by a mentally ill copilot, was a "deliberate and
horrible act by one of our own," Tyler said. "There is no immunity to mental health issues," he said,
adding that the investigation should help "airlines and
regulators look again at the balance needed to monitor
mental health." Tyler said that the global airline industry as a whole is poised
to earn $29.3 billion in profits in 2015, as more airlines fly
with their planes filled to capacity and the cost of fuel drops
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http://business.financialpost.com
global profit 2015 Airline profit boom: IATA hikes billion 29forecast to US$
MIAMI/PARIS Global airlines raised their forecast for 2015 industry profits by more than 17 per cent to US$29.3 billion
on Monday, almost doubling from last year and heralding a
boom for carriers in North America that stand to reap half the
worldwide total. The International Air Transport Association (IATA),
announcing the upgrade during a gathering of 260 member
airlines, said lower oil prices were the main factor pushing
the industry further into the black. But the windfall could be
muted by the rise in the value of the dollar and widespread
airline fuel hedging. The industrys profits are far from uniform. Many airlines still face huge challenges, IATA Director General Tony Tyler said in a declaration to the airline lobbys annual meeting. IATA had previously forecast a US$25 billion 2015 profit. It said the industrys average net profit margin would almost double to 4 per cent from last years 2.2 per cent. It saw the fuel bill dwindling to US$191 billion from US$226 billion in
2014, when airlines made a restated profit of US$16.4 billion. At the same time, planes are expected to fly fuller than ever
before as the industry continues to match capacity more
closely to demand, though some airline bosses meeting in
Miami are worried such discipline could start to fray.
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http://economictimes.indiatimes.com
http://economictimes.indiatimes.com MIAMI: Oneworld, the world's third-largest airline alliance
after Star Alliance and SkyTeam, is not disinclined to
inducting a low-cost carrier into its alliance from India, its
CEO Bruce Ashby told ET. "A low-cost carrier will be required to do a certain changes in
its system like the Frequent Flier programme and a few
technical upgrades to be eligible to join our alliance. If any
airline is willing to invest in that, we would surely look at
inducting them," Ashby told ET on the sid "A low-cost carrier
will be required to do a certain changes in its system like the
Frequent Flier programme and a few technical upgrades to
be eligible to join our alliance. If any airline is willing to invest
in that, we would surely look at inducting them," Ashby told
ET on the sidelines of the Annual General Meeting of
International Air Transport Association. He added that the alliance had a former LCC as its member.
"Air Berlin turned into a hybrid carrier from being a low-cost
Ashby, however, said that the alliance is not talking to
anyone in the country, but didn't rule out such a possibility in
the future. Oneworld was founded on February 1, 1999, and constitutes
15 members. The alliance had, in the past, tried to induct
Kingfisher AirlinesBSE -4.83 % as its member from India, but
the plan did not materialise after Kingfisher stopped flying.
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http://www.travelagentcentral.com
Lufthansa GDS Fee Latest in Battle for Direct
Bookings
16 's controversial decision to charge a fee of Lufthansa
is the latest in a push by GDSeuros for tickets booked using a
many airlines to encourage bookings through direct channels,
such as airline websites and call centers. Last August, American Airlines briefly removed its flights
.BBCduring a fee dispute, reports the Orbitzfrom pulled Delta, New York TimesAccording to an analysis in the
its flight information from TripAdvisor last year and from
some European online travel agencies this year. Encouraging
fliers to book direct allows airlines to avoid fees associated
with third-party bookings, as well as offer lucrative add-ons. "Where a significant portion of Delta's profits come from is
ancillaries after you buy the basic transportation," Max
Rayner, a partner at travel industry consulting company
Hudson Crossing, told the Times. "That's one big reason for
Delta to be hellbent on denying access." The drawback? Critics say that making it more difficult to shop
for airfares on third-party sites will make it more difficult to
compare airfares, leading to higher prices for consumers. "Heightened attempts to lead travelers away from online travel
agencies and metasearch travel sites is likely to lead to higher
average airfares, increase consumers' search costs, make
entry into city-pair routes by smaller airlines more difficult,
reduce transparency, and strengthen the market power of the
major airlines," said a Travel Technology Association report
cited by the BBC.
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http://www.travelagentcentral.com
(Continue) Agents Respond
Lufthansa has drawn criticism from a broad The new fee from
Travel Leaders , including array of travel agency groups
Group, the American Society of Travel Agents and
Ensemble Travel Group. on our Agents have also been chiming in on our website and
.Facebook page "That's ridiculous," says Margie McKay. "Penalize your
customer for using a professional travel agent?" Mandy Mathis says, "I won't sell them anymore. By
Lufthansa, Swissair, Austrian and Brussels air. Would rather
sell another airline now." The EUR 16 DCC was announced June 2 in a move
Lufthansa Group (LHG) said was part of a broder shift in
commercial strategy to earn a greater portion of revenue from
flight operations, as opposed to ticket sales. LHG said that
costs for using GDS are several times higher than for other
booking methods, and that LHG was in the process of
developing a new booking method to enable sales partners to
connect to their IT systems directly based on the new IATA
data standard NDC (New Distribution Capability). The first
NDC pilot project is currently being tested at SWISS and
should begin at Lufthansa during the course of this year,
Lufthansa said. .
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http://www.reuters.com/
Qatar Airways CEO sees no need for concessions
to U.S. airlines Qatar Airways Chief Executive Akbar Al Baker said on
Monday he saw no reason for Middle Eastern governments to
propose any changes to transportation policy in response to
U.S. airlines that allege unfair competition from Gulf carriers. "Why should my government make any concession?" he said
in an interview at the International Air Transport Association
(IATA) annual meeting in Miami. "There is an agreement
signed by two mature governments. And those agreements
are being implemented." U.S. airlines are trying to persuade the United States to alter
"Open Skies" agreements with the United Arab Emirates and
Qatar, accusing them of giving their airlines more than $40
billion in subsidies and distorting competition. Emirates
[EMIRA.UL], Etihad Airways and Qatar Airways deny the
subsidy claims. Al Baker said Qatar Airways expects to deliver its rebuttal to
the U.S. airlines' claims in the next few weeks. The three Gulf
carriers are not coordinating their replies, he added, and he
does not see any scope for negotiation. "There is no olive branch on this issue," he said. Under the
agreements, "we can deploy as much capacity as we want in
the United States and the United States carriers can deploy
as much capacity as they want in my country. "It's a two-way street," he said." What is the problem?" .
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http://www.reuters.com/
(Continue) The dispute has divided an often-cohesive if competitive
industry, and Al Baker spotlighted it in front of hundreds of
IATA delegates on Monday. There were also concerns about
protectionism. "The danger is if you gave it for aviation, what industry would
ask for it next?" Aengus Kelly, the CEO of aircraft leasing
company AerCap, said in an interview. Al Baker said in the interview that he was "absolutely
confident" the United States would act "in the best interests of
the people" who want Gulf carriers to serve them. Separately, Al Baker dismissed reports that Qatar Airways
was considering an initial public offering in the near future. He
said the airline was at least 10 years away from such a move,
having shelved the idea in 2008 because of the financial
crisis. He declined to discuss the FIFA scandal or the potential
impact if Qatar is stripped of its right to host the World Cup in
2022. But he said it would not affect the airline's growth plans.
He expects to have built up enough airline capacity by 2022 to
handle the World Cup without ordering more airplanes. .
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http://aviationweek.com
South African Airways Upbeat On Turnaround South African Airways )SAA( has looked at a reset-the-clock scenario, but at this point in time there is no such action or need to take such action to bring the embattled airline to commercial sustainability, acting CEO Nico Bezuidenhout
said. But, Bezuidenhout warned, If we do not get the necessary agreements with all stakeholders, nothing is excluded. SAAwhich was in a semi-permanent state of restructuring over the past decades as a loss-making airline despite South
Africa being the largest and most-developed aviation market
in Africa received an additional loan guarantee of 6.5 billion rand ($521 million) from the South African government in
January to keep it in the air. Bezuidenhout says the airline is making good progress in its
targeted turnaround and is reducing costs. Were not yet out of the woods, but we are seeing some positive signs in
stabilizing the business, he says. SAA successfully completed its 90-Day Action Plan in March, and
operating results in April were 45% better than the year-ago
period, Bezuidenhout says. The 90-Day Action Plan aims to
deliver an EBITDA improvement of 1.25 billion rand per year
from the start of its current financial year. As part of the cost-cutting exercise, SAA is renegotiatingthe
. There have been some s340A Airbusits leases ofunfortunate fleet decisions in the past. But dont forget when we acquired the A340, fuel was at $20 a barrel, asserts.
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http://aviationweek.com
(Continue) Bezuidenhout, adding that the airline operates the four-
engined widebodies profitably on a number of routes, such as
Frankfurt and Munich. Leases have been renegotiated for
three of SAAs eight Airbus A340s with a savings result of 112 rand million annually. Renegotiations for the other five A340s are ongoing and
expected to yield an additional savings of 150 million rand. Up
to 440 million rand in pre-tax earnings improvements will
come from network changes. SAA has already abandoned two of its most money-losing
long-haul routes, from Johannesburg to Beijing and
Johannesburg to Mumbai. The Beijing route reportedly lost about million rand per month,
and the international network accounted for 1.6 billion rand in
losses. The acting CEO says SAAs services to Perth, Australia, and Munich and Frankfurt in Germany are profitable. The South
American routes are marginal but improving, while Hong Kong is already benefiting from ending the route to Beijing.
The North American operation is expected to improve thanks
to planned changes. .
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http://aviationweek.com
(Continue)
Washington DullesBeginning in August, the daily service to
will operate three times via Senegal and four times via Accra
after SAA gained fifth-freedom rights from Ghana to the U.S..
The point-to-point market from Ghana is much larger than
from Senegal and we will benefit from feeder and de-feeder traffic. There [is] no feeder airline available to cooperate with
in Senegal, Bezuidenhout notes. The network reconfigurations do not only include route
terminations. There is also positive news, Bezuidenhout
points out. We started a new route to Abu Dhabi to .Etihad Airwayscomplement our relationship with
SAA is also growing its sub-Saharan African network due to strong commercial demand with more flights between Johannesburg and Maputo, Harare and Mauritius. Africa is our bread and butter, he says. We target to increase revenue from Africa [by] 30% in the next 12-18 months. .
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http://gulfnews.com
Lufthansa looks elsewhere as Gulf carriers
dominate Mena Miami: Lufthansa, Europe's largest airline, does not see the
potential to add new services to the Middle East and North
Africa, believing that the market is firmly dominated by the
major regional competitors. "There is no major expansion plans to that part of the world
because there are some other players in that part of the world
who have major expansion plans," Carsten Spohr, Deutsche
Lufthansa chief executive and chairman, told reporters in
Miami on Sunday. Lufthansa and it's other group airlines which includes Swiss
and Austrian fly to around 20 destinations in the region from
Iran to Morocco, according to its website. However, the Gulf's largest airlines - Emirates, Etihad Airways
and Qatar Airways - have similar networks, often flying
multiple daily frequencies, in and out of their hubs connecting
onto long-haul routes to Europe and North and South America
that Lufthansa also serve. "My expansion plans are to go to other destinations where we
have a chance to operate profitably," Spohr said at a press
conference ahead of the International Air Transport
Association (IATA) Annual General Meeting starting on
Monday.
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http://gulfnews.com
(Continue) Lufthansa, which operates hubs out of Frankfurt and Munich,
has long warned about the growth of the major Gulf airlines
that transport East-West passenger traffic through their Middle
Eastern hubs. Spohr said the allegations by the US' biggest
carriers has made Lufthansa's argument "more credible." US carriers Delta, United and American allege the Gulf
carriers have received billions of dollars in government
subsidies and want their government to freeze additional
routes to Gulf airlines until their claims are investigated. However, Spohr said that in Europe existing bilateral
agreements should remain unchanged until the European
Union decides what, if any, action to take. Last month, the
Dutch government froze landing rights to Gulf carriers.
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