cair issue no. 78 - july 2010

CANADIAN AVIATION INTELLIGENCE REPORT

IN THIS ISSUE: CEO Update – p 1 Fuel Price Update – p 2 Canada’s Airports – The Important Unseen Workforce – p 3 Top International Tourism Destinations – p 5 North American Seat Capacity – p 7 Credit Cards and Airlines – p 9 Caribbean Report – p 19 Asia Report – p 20 European Report – p 21 Washington Report – p 22

JULY 2010

InterVISTAS’ Canadian Aviation Intelligence Report July 2010 Copyright ©2010 InterVISTAS Consulting Inc., all rights reserved. Page 1

CEO UPDATE July 2010

Welcome to the July 2010 edition of InterVISTAS Consulting Inc.’s Canadian Aviation Intelligence Report (CAIR).

InterVISTAS supports NACO in supervising TAV’s concession over Macedonian international airports InterVISTAS supports NACO in providing consulting services to the Government of Macedonia by enforcing continuous and regular supervision of the implementation of the concession contract awarded to TAV Airports in 2008 to develop, finance, operate and maintain the airports in Skopje and Ohrid. NACO’s and InterVISTAS’ services include monitoring and/or analysis of: development of construction activities; airport operations, services, fees and charges; improvements to services and infrastructure; compliance with ICAO standards; Concessionaire’s financial and operational results etc. The services also include providing analytical advice to the Government on the impact of force majeure and political events on contractual obligations, as well as technical assistance in any dispute resolution. The duration of the contract is 2 years, as of July 2010.

InterVISTAS provides route forecasting support for Queen Alia International Airport in Amman, Jordan InterVISTAS has been engaged by Queen Alia International Airport in Amman, Jordan, to provide route forecasting support for a potential non-stop flight of an important long haul market. The analysis will include forecasts of market share, load factor, flight revenues and traffic simulation, and will be used to strengthen the business case for new service.

InterVISTAS takes on projects for the Canadian Aviation Maintenance Council The Canadian Aviation Maintenance Council (CAMC) has engaged InterVISTAS to complete two projects. The first project is to develop a web-based evaluation tool that will allow aviation employers to assess a worker's knowledge of Safety Management Systems. The second is a project to develop and deliver a workshop on HR and Training Solutions for Small Airports.

The July 2010 CAIR Line-Up This month, we lead off with an article on an update on fuel prices and also a market analysis column that looks at credit cards and airlines (the impact of credit card holdbacks on airlines).

Our regular columns include:

Caribbean Report

Asia Report

Europe Report

Washington Report

We hope you enjoy this issue.

Gerry Bruno CEO


Doris Mak Director,

Special Projects

FUEL PRICE UPDATE July 2010

Crude oil prices at $76 a barrel…

Crude oil prices for near term delivery are currently at $76 per barrel, which is $4.02 per barrel more than a week ago and $16.15 above last year. The price per barrel dropped to $72 within the first week of the month in response to a report released by the U.S. Labor Department indicating that, for the first time this year, there was a loss in jobs for the month of June. The subsequent increase in price in the last week was mainly influenced by increased confidence in the market, after the U.S. Energy Information Administration released data indicating a strong supply of crude oil. In addition, the EIA expects that as the global economy recovers, crude oil prices will continue to increase slightly.

… with future prices at $91 per barrel in 2018.

Currently, a futures contract for delivery of crude oil in December 2018 costs $91 per barrel (20% higher than the current spot price). The price of this contract remains lower than prices established at market peak in May 2008 by 38%, as shown in the figure below.

Crude Oil Futures Prices

$0

$20

$40

$60

$80

$100

$120

$140

$160

Jan-

03

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Jan-

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Month of Delivery

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$ pe

r Bar

rel

Crude Oil Spot Prices

Crude Oil Futures Prices

May 2008

Jan 2009

Sep 2008

Jul 2010

May 2010

Jun 2009


David Berrington Director,

Strategic & Corporate Services

CANADA’S AIRPORTS THE IMPORTANT UNSEEN WORKFORCE July 2010

Overview The Canadian Aviation Maintenance Council (CAMC) in partnership with the Canadian Airports Council (CAC), and with funding from the federal government, commissioned InterVISTAS to conduct an Airport Occupations Rationalization Project to analyze airport occupations. InterVISTAS conducted a detailed survey of 31 Canadian airports to examine the labour-related trends and issues at Canada’s airports and to provide observations and recommendations for the future. There is a certain urgency to resolve the human-resource issues determined by this study. Factors that require a fairly rapid and comprehensive response include the following:

The greying of the airport workforce and the challenges of recruitment.

The lack of specialized training at educational institutions in skills relating to airport operations.

The increased demand for flexibility in the workforce.

The growing number of regulations requiring specific training and the required financial support and resources.

Address the need for aviation-related curriculum for airport occupations.

The needs of smaller airports, particularly for training related to safety and security regulations.

Retaining and Recruiting Airport Workers The survey and analysis revealed that airports in Canada enjoy a generally stable labour force and are considered attractive employers, but are still challenged with issues pertaining to retirement, recruitment and training. Smaller airports are also challenged as they cannot offer the same advancement and career opportunities seen in other sectors or in larger enterprises. In preparation for the anticipated wave of retirement over the next five years, airports will need an investment in new staff positions and increased headcount in the short term, as the new hires overlap with the soon-to-be-retired. This is a necessary step in ensuring that expertise and knowledge is passed to the succeeding generation of airport employees.

Hiring Trends While hiring is expected to increase (collectively, respondents say 189 new employees in the coming year, 192 in two years and 269 in five years), most hiring will be based on the goal of improving internal efficiencies, and therefore, will not increase the headcount. Currently, large airports are attracting more interest, as airports are viewed as a stable employer with an attractive working environment and benefits. Airports emphasized, however, the difficulty in finding candidates with experience in airport operations or aviation management. As a result, new employees often have a steep learning curve, with concurrent training issues for airports. This appears particularly challenging for smaller airports.


CANADA’S AIRPORTS THE IMPORTANT UNSEEN WORKFORCE (CON’T)

Well-Trained Staff Required for Airports to be Competitive The need to provide high levels of service at competitive costs places particular pressure on staff training and recruitment. Well-trained staff is essential, but costs must also be minimized. A further dominant influence on the need for well-trained, competent staff is that of safety. While the first focus of safety programs is on all aspects of aircraft operations, the safety credo must also extend to all operating areas and systems. Establishing and maintaining a safety culture requires comprehensive and current staff training. All of these considerations focus on the complexity inherent in providing timely, effective and efficient training. While the means may differ according to location, airport size and role, the retention of professional, well-trained staff has to be a prime objective.

Preparing Workers for Airport Employment: Education and Training The need to expand the pool of eligible applicants to fill airport operational positions implies a corresponding increase in output capacity from institutions providing such training. A review of typical aviation related training programs provided by Canadian secondary and technical training institutions indicates that there are currently few airport dedicated programs available. Educational institutions need to provide more opportunities for apprenticeships and certification across the sector to prepare the next generation of airport employees. While educational institutions play a role in training future airport workers, the greatest benefit is in the trades (e.g., electrician, firefighter) whose skills are general and portable between sectors.

Complex Training Requirements for a Highly Regulated Sector The airport sector faces comprehensive and complicated training needs that are costly and time-consuming. The growing volume of regulations is increasing the amount of training required and causes an additional challenge of finding the financial support and resources to meet the need, creating a greater burden on smaller regional airports. The sector can respond through a more coordinated effort to develop and deliver training. Industry partners such as the CAC, CAMC, ACI-NA and others can collaborate as partners to deliver effective training modules, in a variety of methods, to the sector. There are significant benefits to providing a sector approach to understanding and responding to airport staff training requirements. An integrated approach providing forward looking data on needs and numbers will help address the limited airport sector training resources available in Canada. In addition, a probable solution to meet the demands of today’s airport professionals and non-professionals (or the general public) is online/web-based learning.

Conclusion This study identifies the key trends and issues affecting the essential but small airport labour force, with particular emphasis on retention, recruitment and development. The labour market review conducted in this project provides the industry with an overview and flags key human-resource issues associated with airport occupations, including important findings for further deliberation by industry stakeholders.

By this thorough examination, we hope to bring the important airport workforce into greater focus and prominence, as well as providing relevant and actionable human resource initiatives for the sector.


TOP INTERNATIONAL TOURISM DESTINATIONS AND OUTBOUND MARKETS IN 2009 July 2010 Overall, 2009 was a challenging year for the global tourism industry. Total international tourist arrivals decreased by 4.2% to 880 million, while tourism expenditures dropped to US$852 billion, a decline of 5.7% in real terms. However, actual tourism performance varied by country. This column examines the top 10 international tourism destinations and outbound markets in 2009, as measured by tourism receipts and expenditures, respectively.

Ranking of Top Destinations Unchanged Overall, the top destinations by international tourism receipts remain largely unchanged – with the United States, Spain and France occupying the top three spots. In 2009, the top 10 destinations all recorded a drop in tourism receipts, with the notable exception of Australia, which posted a year-over-year double digit increase of +11%. Top growth markets for Australia in 2009 in terms of economic value include China, Malaysia and India.

In 2009, the United States earned nearly $94 billion in tourism receipts. This is followed by Spain ($53 billion) and France ($49 billion). Of note is that although the United States is first in terms of foreign exchange earnings from tourism, the destination is second to France in terms of international tourist arrivals. This implies that the U.S. is able to generate larger per visitor expenditures. In fact, the United States generates over two and half times the amount of tourism receipts per arrival as France ($1,710 per tourist arrival compared to $665).1 In 2009, Canada earned $13.6 billion in tourism receipts, for an average of $860 in tourism receipts per arrival.

1 Tourism receipts are reported in U.S. dollars and subject to exchange rate fluctuations.

Eugene Chu Senior Project Manager

Source: World Tourism Organization (UNWTO). Adapted from June 2010 issue of UNWTO World Tourism Barometer.


TOP INTERNATIONAL TOURISM DESTINATIONS AND OUTBOUND MARKETS IN 2009 – CON’T China Continues to Move Up the Ranking of Top Tourism Spenders The top three outbound tourism markets as measured by international tourism expenditures remain largely unchanged in 2009, with Germany, United States and the United Kingdom as the top three international tourism spenders. Of note is that China continues to move up the ranking of top tourism spenders to surpass France for fourth place in 2009. China was also the only country among the top 10 tourism spenders to record significant growth in international expenditures (+21%) in 2009.

When tourism expenditures are expressed on a per capita basis (total tourism expenditures expressed as a proportion of the corresponding source country population, not just travellers), Netherlands ranks first ($1,255 per capita) followed by Germany ($985 per capita) and the United Kingdom ($785 per capita). Of note is the extremely low expenditure per capita for China ($33), because according to data from Statistics Canada and Tourism Australia, visitors from China have a relatively high spending rate per trip. This speaks to the current low incidence of travel in China and the future long-term growth potential of the market.

The Opportunity Although the current top destinations and outbound markets remain largely unchanged, there is clearly a continued shift in the rankings, particularly with China continuing to move up in the top tourism spenders category (and also as a top destination). Nearly every major destination in the world, including Canada, has now received Approved Destination Status (ADS) from China (see January 2010 issue for column with details on ADS) - putting everyone on a level playing field in terms of access to this rapidly growing outbound travel market. It is now up to each organization to position and market itself effectively to target those current and emerging top markets that maximise tourism receipts and economic impact for their own business and destination.

Source: World Tourism Organization (UNWTO). Adapted from June 2010 issue of UNWTO World Tourism Barometer.


Connie Chang Senior Analyst

NORTH AMERICA SEAT CAPACITY CHANGES 2010 VS. 2009 July 2010

Global airline industry experiences overall growth Globally, airlines are offering 6% more scheduled seats to passengers in July 2010 over July 2009. The region with the strongest percentage growth was Central and South America, with total seats within the region having increased by 16% from 19.6 million seats in July 2009 to 22.7 million seats in July 2010. The Asia-Pacific region, on the other hand, experienced the strongest absolute growth in seat capacity, having increased by 8.5 million seats to 93.5 million in July 2010. Other regions, such as Europe, Africa, and the Middle East, also experienced modest increases in scheduled seat capacity within each region. North America was the only region with a marginal decline, with overall seat capacity within North America having decreased by 1% in July 2010 over July 2009, to 19.6 million seats.1

This column examines the changes in North America’s domestic seat capacity for major carriers in the U.S. and Canada.

U.S. carriers give mixed results… U.S. full service carriers (FSCs) showed fairly mixed results in terms of seat capacity changes over the past year. Among the major FSCs examined in Figure 1, Alaska Airlines, US Airways and American Airlines were the only ones to experience growth in domestic seat capacity levels from July 2010 over July 2009, while several other FSCs faced capacity cuts during this time period. Hawaiian Airlines had the greatest capacity cutback of 6%, while Delta Air Lines, Continental and Alaska had more modest seat reductions of less than 2% each over the same time period.

However, most of the U.S. low cost carriers (LCCs) examined in this analysis increased their July seat capacity levels over the same month last year. Allegiant Air saw the greatest capacity increase by 24% in July 2010 over July 2009, while Spirit and Midwest also experienced fairly strong growth by 13% and 12% respectively, over the same time period. Southwest was the only LCC that scheduled fewer domestic seats over this time period, but only by less than 1%.

Canada’s domestic seat capacity levels rise Canadian carriers are facing a general upward trend in terms of their capacity levels, with both Air Canada and WestJet working to expand their domestic route network.

Air Canada scheduled 4% more domestic seats in July 2010 compared to July 2009. According to Air Canada’s Vice President, Marcel Forget, “Air Canada is strategically expanding its domestic services...” and is offering new daily non-stop services between Iqaluit, Nunavut and Ottawa,2 as well as between Ottawa and Regina,3 both of which have same-plane service to and from Montreal.

1 “OAG Reports Strong Air Service Growth for the Asia Pacific Region”, Official Airline Guide 6 July 2010. 2 Air Canada Press Release, 28 March 2010. 3 Air Canada Press Release, 17 May 2010.


NORTH AMERICA SEAT CAPACITY CHANGES 2010 VS. 2009 – CON’T During the same time period, WestJet also increased their domestic seat capacity by 7%. WestJet’s capacity growth is likely a result of added seasonal services between Kitchener-Waterloo and Vancouver (daily),1 and between Windsor and Calgary (daily).2

Figure 1: Year-over-Year Percentage Change in Domestic Seat Capacity for Major Carriers in the U.S. and Canada, July 2010 vs. July 2009

Source: OAG Schedules, July 2009 and July 2010. * According to Delta Air Lines” website, they have “merged Northwest reservations and booking functions into Delta’s. As of January 31, 2010, all flights are Delta flights (with a Delta code)…”3 Therefore, this analysis compares Delta’s reported seat capacity for 2010 to the combined Delta and Northwest seat capacity for 2009.

1 WestJet News Release, 28 June 2010. 2 WestJet News Release, 31 May 2010. 3 Delta website: http://www.delta.com/help/faqs/merger/index.jsp


Celina Ramirez Project Analyst

CREDIT CARDS AND AIRLINES July 2010

The rise of credit card fees and the impact of credit card holdbacks With many airline travellers now booking their flights online, the majority of ticket sales are now paid for through credit card transactions. However, in order to cover the merchant fee that carriers are required to pay the credit card company, many airlines pass along the credit card processing fees to consumers as a transaction fee. Another important factor in the contracts that airlines have with their credit card companies is the holdback policy, which allows credit card companies to retain a certain amount of ticket revenue in case the airline or the passenger are unable to pay. Several airlines facing bankruptcy have asserted that this holdback policy was a significant factor in contributing to their financial difficulty, as credit card companies withheld reimbursing the carriers.

This article discusses the recent increase in credit card fees that some airlines are charging their passengers, and the impact of the credit card holdback policy on the bankruptcy of several airlines.

Rise of Credit Card Fees

Many airlines have recently increased the credit card transaction fees that they pass on to their passengers, and this has brought about concern among passengers and government officials. The following carriers currently charge the following credit card fees to customers:

Figure 2: Selected Credit Card Fees Charged to Customers, by Carrier

Airline Specifications Credit Card Fee (USD)

Ryanair $7.78 Finnair $12.97 Qantas Domestic $6.93 International $22.51 Tiger Airways Australia Domestic $5.94 International $5.40 KLM $7.00 Spirit Airlines $4.90 Allegiant Air $13.50

Source: Various articles and respective airlines’ websites. Notes: Credit card fees for Spirit Airlines and Allegiant Air are for online bookings only.

Credit Card Holdback Policy

In the past couple of years, the airline industry has seen instances of carriers facing increased financial pressures in part because credit card companies did not reimburse the carriers their withheld revenue from the holdback policy in a timely manner.

In 2008, Denver-based carrier, Frontier Airlines, filed for bankruptcy protection after its credit card processor unexpectedly proposed to increase a holdback of customer receipts, which would have tightened the airline’s cash flows. Slovakia’s SkyEurope and Scotland’s Flyglobespan both blamed their credit card processor, E-Clear UK, for withholding revenue amounting to about $20 million and $47 million, respectively. Because of the lack of ongoing liquidity, the airlines ended their contracts with E-Clear and discontinued services in September 2009 and December 2009, respectively.


AIRLINE DATA – CANADA Traffic and Load Factors on Canada’s Major Air Carriers June 2010

Air Carrier

Passenger Traffic Revenue Passenger

Kilometres Capacity

Available Seat Kilometres Load Factor

% Change over 2009

% Change from 2008

% Change over 2009

% Change from 2008

Change over 2009

Change from 2008

Air Canada1 +15.0% +4.5% +9.9% +1.5% +3.8pts (to 84.7%)

+2.5pts (from 82.2%)

Domestic +2.9% -4.0% -0.6% -6.2% +2.8pts -1.8pts International & Charter +21.2% +8.8% +15.4% +5.5% +4.1pts -2.6pts

WestJet +19.0% +10.5% +10.9% +8.1% +5.3pts (to 78.2%)

-1.7pts (from 76.5%)

Analysis:

• Air Canada’s domestic traffic sector grew 2.9% in June 2010 over June 2009. Available capacity remained the same over the same period (-0.6%), leading to an increase in load factor of 2.8 percentage points (81.4%).

• Air Canada’s international sector experienced increases in both traffic (21.2%) and capacity (15.4%) in June 2010 over June 2009. This growth was mainly due to a 33% increase in Pacific-region traffic. Air Canada Mainline’s international load factor increased 4.1 percentage points from 82.1% in June 2009 to 86.2% in June 2010.

• WestJet traffic grew 19.0% in June 2010 over the previous year. Capacity was also up 10.9%, resulting in a +5.3 percentage point increase in load factor to 78.2%. Traffic growth has outpaced capacity growth for the past four months which has resulted in a higher load factor.

1 Air Canada Mainline consists of all Air Canada operations with the exception of Jazz.

-12%-10%

-8%-6%-4%-2%0%2%4%6%

M ay-09

Jun Jul Aug Sep Oct Nov Dec Jan-10

Feb Mar Apr May Jun

Dom RPK Dom ASK

Air Canada Domestic Mainline Air Canada Domestic Mainline

-12%-10%

-8%-6%-4%-2%0%2%4%6%

M ay-09


Feb Mar Apr May Jun

Dom RPK Dom ASK

Air Canada Domestic Mainline Air Canada Domestic Mainline

-15%-10%

-5%0%5%

10%15%20%25%

May-09


Feb Mar Apr M ay Jun

Int'l RPK Int'l ASK

Air Canada InternationalAir Canada International

-15%-10%

-5%0%5%

10%15%20%25%

May-09


Feb Mar Apr M ay Jun

Int'l RPK Int'l ASK

Air Canada InternationalAir Canada International

-10%

-5%

0%

5%

10%

15%

20%

25%

M ay-09


Feb M ar Apr M ay Jun

RPK ASK

WestJetWestJet

-10%

-5%

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25%

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WestJetWestJet


AIRLINE DATA – U.S. U.S. Airlines Release June 2010 Traffic Figures

Airline Traffic (RPMs – millions)

Capacity (ASMs – millions) Load Factor

18,532 ↑4.2%

21,129 ↑1.8%

87.7% ↑2.2 pts

11,246 ↑3.2%

12,963 ↑1.3%

86.8% ↑1.6 pts

2 10,939 ↑3.5%

12,443 ↑1.1%

87.9% ↑2.0 pts

1 8,443 ↑4.7%

9,721 ↓2.2%

86.9% ↑2.1 pts

7,066 ↑5.0%

8,627 ↑1.9%

81.9% ↑2.4 pts

2 5,591 ↑2.9%

6,431 ↑2.8%

86.9% ↑0.1 pts

2,470 ↑10.9%

2,933 ↑5.8%

84.2% ↑3.9 pts

1,893 ↑7.4%

2,193 ↑4.0%

86.4% ↑2.8 pts

736

↑5.3% 956

↑6.5% 77.0% ↓0.9 pts

Notes: 1. Mainline operations only. 2. Load factor includes scheduled service only. Sources: Carrier traffic reports.


AIRLINE DATA – INTERNATIONAL International Airlines Release June 2010 Traffic Figures

Airline Traffic (RPKs – millions)

Capacity (ASKs – millions) Load Factor

1 17,881 ↑4.7%

21,329 ↑0.4%

83.8% ↑3.5 pts

2 16,854 ↑27.9%

20,403 ↑21.6%

82.6% ↑4.0pts

8,827 ↓11.1%

11,394 ↓8.6%

77.5% ↓2.1 pts

5 7,972 ↑19.6%

9,340 ↑7.7%

85.4% ↑8.6 pts

3, 4 7,918 ↑0.1%

10,561 ↑3.8%

75.0% ↓2.7 pts

4

6,647 ↑12.3%

8,890 ↑0.5%

74.8% ↑7.9 pts

4 5,861 ↑1.4%

8,877 ↓13.0%

66.0% ↑9.3 pts

1. Includes Martinair. 2. Includes Lufthansa Passenger Airlines, SWISS from July 2009 onwards, British Midland from Sep 2009 onwards and Austrian Airlines. 3. Includes Qantas Domestic, QantasLink, Jetstar Domestic, Qantas International, Jetstar International, and Jetstar Asia. 4. Traffic results are for May 2010 – June 2010 results are not yet posted. 5. Includes Cathay Pacific and Dragonair. n/a – not available

InterVISTAS’ Canadian Aviation Intelligence Report July 2010 Copyright ©2010 InterVISTAS Consulting Inc., all rights reserved.

Page 13

Summary of Total Year-Over-Year Passenger Traffic Performance at Selected Canadian Airports

Toronto Vancouver Montréal-Trudeau Calgary Edmonton Ottawa Winnipeg Halifax Victoria Kelowna Saskatoon Regina St.

John’s

2009

May -11.9% -14.6% -10.4% -8.3% -8.5% -4.5% -8.1% -8.4% -3.4% -2.9% -2.0% -2.8% 2.0% June +12.3% -16.0% -7.8% -6.9% -9.9% -6.9% -8.3% -7.5% -4.1% 11.0% -1.9% 1.0% -4.4%

2nd Quarter -10.4% -13.1% -8.2% -6.8% -5.7% -6.2% -6.6% -5.9% -2.5% +2.4% +2.3% +1.4% +0.1% July -4.9% -11.7% -1.5% -2.5% -7.5% -5.5% -7.6% -3.0% -1.9% +2.0% +8.0% +1.2% +1.5%

August -5.2% -9.6% -2.5% -1.9% -7.8% -4.9% -5.9% -3.7% -3.2% -1.2% +3.3% +5.9% +2.0% September -5.1% -4.5% -5.4% +3.1% -7.3% -1.8% -4.3% +1.2% +2.3% +0.3% -7.2% +3.3% +2.8% 3rd Quarter -5.1% -8.9% -3.1% -0.7% -7.5% -4.1% -6.0% -2.1% -1.1% -4.9% +1.3% +3.5% +2.1%

October -1.9% -6.6% -3.1% +0.4% -6.4% 1.3% -4.5% -1.3% -2.4% -4.9% -5.2% +0.0% -2.1% November -3.2% -5.2% -4.4% -4.0% -5.2% +3.2% -8.9% +2.2% +1.5% +9.6% -3.8% +2.5% -0.1% December -0.6% -0.7% -0.1% -3.7% -2.6% +5.4% -2.9% +4.3% +13.1% +2.1% +4.8% +1.4% +3.8% 4th Quarter -1.9% -4.1% -2.5% -2.4% -4.7% +3.2% -5.4% +1.4% +3.6% +2.0% -1.4% +1.3% +0.3%

2010

January -0.4% -1.9% 0.0% +1.7% -1.4% +6.7% -2.1% +1.2% +0.1% +10.0% +7.0% +10.5% +4.6% February -0.1% +3.4% +0.5% -1.5% -2.7% +6.1% -3.6% +0.9% -6.8% -1.3% +5.8% +11.7% +4.1%

March 4.1% 2.9% 3.3% 3.8% 1.2% 8.1% 1.2% 5.8% 4.6% 4.4% 5.6% 13.5% 10.9% 1st Quarter 1.2% 1.5% 1.4% 2.1% -1.0% 6.2% -1.5% 2.9% -0.5% 4.4% 6.2% 11.9% 6.8%

April 2.7% 2.2% 3.4% -1.1% -3.8% 5.0% -4.4% 0.5% -1.6% 3.4% 4.9% 9.7% 9.3% May 7.9% 7.3% 8.7% 6.0% 3.7% 3.9% 1.5% 5.0% 1.5% 0.3% 9.5% 11.0% 8.4%

Source: Transport Canada and individual airports’ traffic reports. Note: Subject to revision.


NEWS AIR CANADA UPDATE AIR CANADA TO OFFER NEW SERVICES FROM TORONTO ISLAND

Air Canada has been given approval to offer services from Billy Bishop Toronto City Centre Airport on Toronto Island. Prior to this, the

only carrier operating out of the airport has been Porter Airlines. Slots for air services from the airport have also been awarded to Continental Airlines. Porter Airlines will still hold majority of the landing slots (44 slots) at the airport. The Toronto Port Authority has granted Air Canada and Continental 30 and 16 slots, respectively.

INCREASED CAPACITY ON SERVICES BETWEEN TORONTO AND CHINA

With Canada officially recognized by the Government of China as an Approved Destination last 25 July 2010, Air Canada announced that

it will be doubling its capacity on flights between Toronto and China starting fall 2010. The additional services include daily operations year-round to Shanghai, Beijing and Hong Kong from Toronto. The carrier already has year-round flights to these three cities from Vancouver.

NEW NON-STOP SERVICE BETWEEN TORONTO AND COPENHAGEN On 24 June 2010, Air Canada began offering the only daily, non-stop service between Canada and

Scandinavia. Flights between Toronto and Copenhagen operate five days a week, and are operated by a 211-seat Boeing 767-300 ER aircraft. This service will be the fourth new European route offered by Air Canada from Toronto, and is expected to conveniently connect passengers with the 120 daily flights offered by their Star Alliance partner Scandinavian Airlines from Copenhagen to 52 other European destinations.

WESTJET UPDATE NEW DESTINATIONS ADDED TO 2010-2011 WINTER SCHEDULE

On 7 July 2010, WestJet announced three new

destinations and ten new routes in its 2010-2011 winter schedule. The new destinations are New Orleans, Santa Clara (Cuba) and Grand Cayman Island. These seasonal, non-stop services will begin in November 2010 from the Toronto Pearson International Airport, and will operate until May 2011. WestJet will also offer new seasonal, non-stop flights from seven Canadian airports (Vancouver, Edmonton, Calgary, Winnipeg, Saskatoon, Regina, Montreal) to Montego Bay, Jamaica; from two Canadian airports (Montreal and Calgary) to Varadero, Cuba; and from Toronto to Palm Springs. VANCOUVER-SAN FRANCISCO SERVICE INTRODUCED

WestJet launched a new seasonal service between

Vancouver and San Francisco on 28 June 2010. The non-stop service will be offered daily until 30 October 2010. The carrier will also offer seasonal services to the Bay Area from Calgary and Edmonton in its 2010 summer schedule.

U.S. AIRLINES DELTA SUBSIDIARIES, MESABA AND COMPASS, SOLD

Delta Air Lines sold its subsidiaries, Mesaba and

Compass, to Pinnacle Airlines Corp. and Trans States Holdings, respectively. The two subsidiary airlines belonged to Northwest Airlines prior to its merger with Delta. Pinnacle Airlines Corp. purchased Mesaba Airlines for $62 million, and Trans States Holdings purchased Compass Airlines for $20.5 million. There will be no changes in the organizational structure and services of Mesaba or Compass,


NEWS – CON’T U.S. AIRLINES – CON’T and both airlines will continue to be based in Minneapolis-St. Paul.

DELTA LAUNCHES NEW SERVICES BETWEEN JAPAN AND U.S. AND PALAU

On 5 July 2010, Delta Air Lines announced its intention

to add two more destinations to its services from Japan. These two new services will be for trips to/from Nagoya and Honolulu and from Tokyo and Palau. Daily operations to/from Nagoya and Honolulu are scheduled to begin on 22 December 2010, but are still subject to government approval. Nonstop services between Tokyo and Palau are proposed to operate four-times a week starting at the end of the year. On 06 July 2010, Delta was granted approval to add new routes from Los Angeles and Detroit to Tokyo Haneda to its current list international services. Daily nonstop services from these U.S. cities to Tokyo are scheduled to begin on 31 October 2010.

HAWAIIAN AIRLINES INTRODUCES SERVICES TO SOUTH KOREA AND JAPAN

On 30 June 2010, Hawaiian Airlines

announced that starting in January 2011 it will be offering services to Incheon Airport in South Korea from Honolulu. The carrier will operate flights four times a week. On 06 July 2010, U.S. Department of Transportation awarded Hawaiian Airlines approval to operate nonstop daily services to/from Honolulu and Tokyo Haneda. Services on this route are scheduled to begin on 31 October 2010. The airline is also looking into offering services to other destinations in Asia, such as China.

CONTINENTAL INTRODUCES NEW SERVICE BETWEEN NEW YORK AND CAIRO

Continental Airlines announced the launch of

new services from Newark Airport in New York to Cairo beginning on 18 May 2011. Non-stop service between the two cities will be offered on

a daily basis during the summer season, decreasing to five- and four-times-weekly during other periods of the year. Flights will be operated with a Boeing 777-200ER aircraft, and are scheduled for convenient connections to destinations in North America, Latin America, Africa and the Middle East offered by Star Alliance partner carriers.

CARGO SkyLink Express buys Cargojet’s Regional Air Cargo Business

In order to expand its domestic air cargo network,

SkyLink Express purchased Cargojet’s remaining 55% interest in the Cargojet Regional Partnership, in addition to it’s previously held 45% interest. SkyLink Express purchased the remaining interest for a $3.2 million promissory note secured by aircraft owned by SkyLink. The purchase increases the operations of SkyLink Express to 21 daily flights across Canada and the US, making the air cargo operator the largest regional operator in Canada. AIR FRANCE-KLM AND MARTINAIR HOLLAND SETTLE AGREEMENT WITH FREIGHT FORWARDERS

Air France-KLM and Martinair Holland settled an agreement with freight forwarders, wherein the airlines will be paying the

latter $87 million. Based on the air cargo price-fixing settlement agreement, the airlines will be compensating direct purchasers for the loss and damages the shippers experienced as a consequence of the global air cargo cartel that breached competition laws around the world between January 2000 and late 2006. However, they will not be paying indirect shippers, including those in Europe.


NEWS – CON’T CARGO – CON’T FEDEX SERVICE EXPANSION TO ISRAEL

On 06 July 2010, FedEx Trade Networks announced that it had

established an alliance with Fritz Companies Israel for the latter to serve as FedEx’s exclusive regional service provider (RSP) in Israel. FedEx does not operate directly in Israel, and, as an RSP, Fritz Companies Israel will support FedEx’s international ocean and air freight forwarding services, including customs brokerage, warehousing, distribution and surface transportation. Details of the agreement between the two companies are expected to be finalized by the end of the year.

HELLENIC IMPERIAL AIRWAYS TO BE REPRESENTED BY THE CARGO CONNECTION

Hellenic Imperial Airways has contracted The Cargo Connection (TCC) to

represent the carrier in South Africa, and to be responsible for its cargo brand in the country. Beginning in July, Hellenic Imperial Airways will offer services from Athens to Johannesburg twice a week. The fleet of the carrier consists of four B747s. Hellenic Imperial Airways is also looking into expanding its services from Athens to other countries, such as New York JFK, London Gatwick, Bangkok and Dubai.

ARROW AIR CEASES OPERATIONS On 30 June 2010, cargo carrier Arrow Air officially announced

that it will be ceasing all of its scheduled operations effective immediately. Increasing operating costs and declining revenues are two of the main reasons as to why the cargo carrier based in Miami is shutting down. Arrow Air had cargo services to and from Central and South America and the Caribbean. The carrier had also filed for bankruptcy in June 2004.

TIACA SIGNS MEMORANDUM OF UNDERSTANDING WITH WCO

In order to address air cargo customs and border practices, The International Air Cargo Association (TIACA)

and the World Customs Organisation (WCO) signed a Memorandum of Understanding (MoU) on 29 June 2010. According to the MoU, the WCO will attend TIACA meetings and will have a technical committee respond to specific air cargo issues. On the other hand, the TIACA is expected to also attend WCO meetings and participate in specialist WCO working groups. This cooperation is expected to develop efficient customs and border practices that will facilitate trade and economic growth.

PEOPLE IN THE NEWS PRESIDENT OBAMA APPOINTED UNITED AIRLINES CEO TO EXPORT COUNCIL

On 07 July 2010, President Obama

appointed Glenn Tilton, United Airlines’ chairman and CEO, to his Export Council. The Export Council was formed to develop strategies that will aid in doubling the countries exports over the next five years. The council is also tasked to facilitate in the completion of the Korea-U.S. free trade agreement. Tilton is also chairman of the Air Transport Association and a member of the Future of Aviation Advisory Committee of the U.S. Department of Transportation (DOT).


NEWS – CON’T PEOPLE IN THE NEWS – CON’T HALIFAX INTERNATIONAL AIRPORT AUTHORITY VICE PRESIDENT RECEIVES AWARD

During the Airports Council International-North America's (ACI-NA) Marketing and Communications Conference in San Diego on 8 June 2010, Jerry

Staples, Vice President of Marketing and Business Development of the Halifax International Airport Authority (HIAA), was granted the Ted Bushelman Legacy Award for Creativity and Excellence for 2010. The award is considered the most prestigious honour awarded to a communications and marketing professional in the airport industry. Staples, the third person so far to receive the award, has been working with the airport for more than 22 years, and is responsible for the success of HIAA’s marketing initiatives, in particular the airport’s travel website and social media strategy.

AIRPORTS UPDATE PLANS FOR EXPANSION AT BARCENLONA EL PRAT

Aena, the owner and operator of Barcelona El

Prat announced that it has plans of expanding the airport. Extension of the main runway, a new third runway, a new control tower, and a new satellite terminal is scheduled to be completed within the next two years. Barcelona El Prat currently has a yearly passenger capacity of 55 million, and the new satellite terminal is expected to raise capacity by 15 million.

PHASE 1 OF SECOND DUBAI AIRPORT OPENED

Phase 1 of the second airport in Dubai, Dubai World Central – Al Maktoum International, officially opened on 27 June 2010. The

initial opening was for cargo operations only and, among the 15 cargo airlines signed up to operate at the airport, Rus Aviation, Skyline and Aerospace Consortium were the first three airlines to operate flights on opening day. Phase 1 of the airport has a cargo terminal with an annual capacity for 250,000 tonnes of cargo, and when completed the airport will have a capacity for twelve million tonnes of cargo. The Al Maktoum International airport will have five runways, four terminal buildings and capacity for 160 million passengers, making it the biggest airport in the world. The airport is scheduled to be open for passenger flights by the beginning of 2011.

VANCOUVER AIRPORT SERVICES AQUIRES 65% OF PEEL AIRPORTS LTD. On 22 June 2010, Vancouver Airport Services announced that it will be acquiring a 65% share of Peel Airports Limited. The Peel Group will hold the remaining 35% share, and will retain a presence on the board. This partnership adds three more airports to Vancouver Airport Services' portfolio, Liverpool John Lennon Airport, Robin Hood Airport Doncaster Sheffield and Durham Tees Valley Airport, and brings its total number of airports owned to 22.


NEWS – CON’TOTHER NEWS DEUTSCHE POST LAUNCHES SERVICES FOR CONFIDENTIAL ONLINE LETTERS

On 14 July 2010, Deutsche Post

launched its “E-Postbrief” services, which allows its customers to send confidential letters via the Internet. The privacy, reliability, and the cost of this service (€0.55) will be the same as a traditional postal letter, and delivered to the recipient as fast as an e-mail. Germany’s postal services provider is collaborating with SAP and Allianz on this initiative. Partnering with SAP will allow businesses to send payslips to employees online securely, and Allianz intends to use the new service to communicate confidentially with its insurance customers.

OAG REPORTS INCREASE IN SEAT CAPACITY IN ASIA PACIFIC REGION

On 07 July 2010, the Official Airport Guide (OAG) reported an increase in scheduled

airline seat capacity for flights within and to/from the Asia Pacific region for the month of July. More specifically, the number of seats within the region increased by 10% (8.5 million seats), and the number of seats to and from the region increased by 9% (1.2 million seats). Flights within the region and to/from the region had a total of 93.5 million and 15.3 million seats, respectively. With the region having highest growth so far for the year 2010, Beijing International Airport has become the second largest airport in the world, based on seats, and Guangzhou and Shanghai airports are now part of the top 20 airports.

ACI EUROPE CELEBRATES 20TH ANNIVERSARY

On 16 – 18 June 2010, Airports Council International (ACI) Europe celebrated its 20th Annual Assembly in Milan. ACI Europe, a professional

association of airport operators, has been holding the conference since 1991 for executives and industry leaders in the aviation industry. The theme of this year’s assembly was “A 20-year vision of the airports of 2030,” and included discussions on pertinent topics, such as the future of European airports, the sky liberalization, and Airport Carbon Accreditation. The conference also included the annual awarding of the Best Airports Awards. For the category “Airports of 1-5 million passengers” the award was granted to Malta International Airport, for the category “Airports of 5-10 million passengers” the award was granted to Lyon Airports, for the category “Airports of 10-25 million passengers” the award was granted to Manchester Airport, and for the category “Airports beyond 25 million passengers” the award was granted to Barcelona Airport.

BOEING TO INCREASE 737 JET PRODUCTION AND FINALIZED 787-9 CONFIGURATION

On 15 June 2010, Boeing announced that it plans to

increase the production rate of the 737 jet to 35 airplanes per month starting in early 2012. Boeing currently produces 31.5 airplanes per month. The decision to increase production was brought about by increasing demand for the 737, and in anticipation of long-term growth in this market. Boeing also finalized the structure, propulsion and basic design of the 787-9 Dreamliner on 01 July 2010. The 787-9 will be 206 ft long, with a capacity for 250-290 passengers and a range of 8,000 to 8,500 nautical miles (14,800 to 15,750 km). The airplane is designed for non-stop services between midsize cities, using 20% less fuel than similar aircraft. The first 787-9 is scheduled to be delivered by the end of 2013.


Jacqueline Clarke Director,

Strategic & Tourism Development

THE CARIBBEAN REPORT July 2010

Air service announcements WestJet’s 2010-2011 winter schedule significantly increases air access between Canada and the Caribbean. The carrier will launch seasonal, non-stop service to Santa Clara (Cuba) and Grand Cayman Island from Toronto and new seasonal, non-stop service between the following cities: Vancouver, Calgary, Edmonton, Winnipeg, Saskatoon, Regina, Montreal and Montego Bay, Jamaica; Montreal, Calgary and Varadero, Cuba. WestJet will also extend its service from seasonal to year-round between Toronto and Bermuda, Samana, DR and Montreal and Punta Cana. From Europe, British Airways will commence service from London Gatwick to Cancun on 3 November 2010. The airline will be the only UK scheduled carrier offering direct flights to Cancun. Regionally, Air Jamaica will resume service from Kingston to Grand Cayman and will reintroduce its summer service from New York to Barbados (three times per week) and Grenada (four times per week).

Airone applies to launch US service Airone Ventures, a startup airline based in Barbados, has filed an application with the US Department of Transportation to launch a daily nonstop low-fare service between Fort Lauderdale and Barbados in February 2011. The new carrier plans to use a 150-seat, all-economy MD-82 leased from Allegiant Air, a 10% shareholder in the venture. Other investors include 2 Irish businessmen and several investors from countries in the European Union.

Barbados and Jamaica reduce aviation restrictions Barbados recently signed a new open-skies agreement with the US that further liberalizes air service between the two countries. The previous US-Barbados agreement restricted the cities that carriers could serve and placed limits on charter operations. The new agreement enables airlines from both countries to select routes, destinations and prices for both passenger and cargo service in response to market demand. The agreement also allows code-sharing and intermodal rights. Jamaica recently signed a new open-skies agreement with Switzerland and anticipates signing seven additional agreements at the third annual International Civil Aviation Organisation Conference for Air Service Negotiations being held in Montego Bay at the end of June. The country also expects to initiate negotiations for 20 additional agreements at the conference.

Carrier applies to operate old Air Jamaica Express routes Air Turks and Caicos (ATC) recently applied for a six-year operating licence to take over regional routes previously operated by Air Jamaica Express. The carrier intends to build a Northern Caribbean network with a hub in Kingston. The new routes are from Kingston to Port Au Prince, Havana and Santo Domingo and will be operated by an Embraer 120ER, a DeHavilland 6-30 and a Beech 200C. The airline hopes to build a network that connects with international services into the DR. Currently, negotiations are underway with a Russian carrier to code-share onwards flights from Punta Cana to the Turks and Caicos. If the application is approved, ATC intends to hire additional staff in Jamaica and open a ticket office.

Important step taken towards abolishing Cuba travel ban The U.S. House of Representative's Agricultural Committee recently approved legislation that would significantly expand trade and travel to Cuba. The bill, if passed, would allow goods from the US to be sold directly to Cuba and allow some direct financial transactions with Cuban banks. It is seen as an important step toward ending the embargo on Cuba. The Travel Restriction Reform and Export Enhancement Act (HR 4645) must be approved by the Foreign Affairs and Financial Services committees before it can be brought before the full House for a vote.


Doris Mak Director,

Special Projects

THE ASIA REPORT July 2010

Qantas requests for advance delivery of eight 787s On 15 July 2010, Qantas Group announced that it requested eight of the 787s that the carrier has ordered to be delivered at an earlier date, mid-2012. The group had initially placed a total order of 65 787s in 2005, with a contract of delivery of one aircraft per month starting in August 2008. In June 2009, the order was decreased to 50 aircraft and the delivery date pushed to 2014. The newer aircraft is expected to replace the current 767s that Qantas’ low-cost carrier, Jetstar, currently uses. The additional aircraft will be used on Jetstar’s international operations, including nonstop flights to southern Europe, and will have a seat capacity of 313 seats.

Japan Airlines announces international scheduled flights from Haneda On 01 July 2010, Japan Airlines (JAL) began selling tickets for the carrier’s international services from Haneda Airport’s (HND) new international terminal. Starting on 31 October 2010, JAL will serve 10 international destinations with 13 daily flights. JAL destinations from HND will include San Francisco, Honolulu, Paris Charles de Gaulle, Bangkok, Singapore and Taipei. One daily flight is scheduled for each of these destinations, except for Taipei which will have two daily flights. JAL’s international flights are scheduled to leave HND at late hours, to take advantage of the airport’s 24-hour operations and to complement the carrier’s day-time international services from Narita International Airport (NRT). In addition, JAL will continue its current services to Seoul (Gimpo International Airport), Beijing, Shanghai and Hong Kong as scheduled passenger flights, with three daily flights to Seoul (Gimpo International Airport) and one daily flight to each of the other destinations.

China Eastern reports triple profit increase in 2010 first half China Eastern Airlines reported a half year net profit of CNY2.21 billion (US$326.7 million). This is more than triple compared to a profit of CNY600 million (US$88.5 million) during the same period last year. The carrier’s operating revenue, as of 30 June 2010, is CNY35.4 billion (US$5.2 billion), which is 46.5% higher year-over-year. The strong financial result was due mainly to an increase in demand of its domestic services in the first six months of 2010 and the merger with Shanghai Airlines in February.

New Hebei Airlines begins operations On 29 June 2010, Hebei Airlines began its first operation from Shijiazhuang to Shanghai. The new carrier was formed from the restructured Dongbei Airlines, which was bought out by Sichuan Airlines in June 2010. Sichuan Airlines currently owns a 97% share and Shenyang Zhongrui Investment Co. holds the remaining 3%. Hebei Airlines destinations from Shijiazhuang include Qinhuangdao, Guilin, Shanghai, Chengdu and Hohhot. The fleet of Hebei Airlines consists of one A319 and two ERJ-145s, and is expected to expand to a total of 10 aircraft by the end of the year and to a total of 20 by 2015.


Ian Kincaid Vice President

Economic Analysis

THE EUROPEAN REPORT July 2010

British Airways – Iberia merger and American Airlines alliance approved On 14 July 2010, the European Commission (EU) approved the merger agreement between British Airways (BA) and Iberia. With the two airlines continuing their existing services, the merged group will operate a fleet consisting of 408 aircraft, serve 200 destinations and accommodate more than 58 passengers a year. The EU also approved of the merger’s alliance with American Airlines, which will allow cooperation between the OneWorld alliance members on their trans-Atlantic routes. The U.S. Department of Transportation approved the alliance one week later.

Alitalia newest carrier in Air France-KLM and Delta Air Lines joint venture On 06 July 2010, Alitalia became a part of the Trans-Atlantic joint venture between Air France KLM and Delta Air Lines, which was initially formed in April 2009. As part of the joint venture, Alitalia will be equally sharing revenues and costs with the other partners on trans-Atlantic routes. The addition of the Italian carrier adds Rome Fiumicino Airport and Milan Malpensa Airport to the network that includes services between Amsterdam, Atlanta, Detroit, Minneapolis, New York JFK, Paris Charles de Gaulle, Lyon, Cincinnati, Memphis and Salt Lake City. The joint venture will now operate approximately 250 flights with an estimated daily seat capacity of 55,000 seats, representing 26% of total trans-Atlantic capacity. According to the terms of agreement, the carriers will jointly operate their trans-Atlantic routes until at least March 31, 2022.

Aegean airlines newest member of Star Alliance On 30 June 2010, Aegean Airlines became the 28th member of the Star Alliance network. Joining the alliance will grant Aegean Airlines passengers increased access to the international services of Star Alliance. Likewise, Star Alliance will benefit from Aegean’s domestic and international flights, increasing the alliances’ routes to/from/within Greece to more than 1,500 weekly flights to 69 destinations in 27 countries. With its growing connecting traffic, Greece will serve as a major hub airport in the Southeast European region. Just before Aegean Airlines joined the group, Star Alliance added TAM to its network. The alliance is also currently in discussion with Air India, for the carrier to join the group by the end of the year.

Tarom Romanian Air Transport joins SkyTeam Alliance On 25 June 2010, SkyTeam Alliance added Tarom Romanian Air as its 13th member. Tarom adds to the alliances services in Central and Eastern Europe, and increases the networks’ destinations by 11. Passengers of Romania’s national carrier will benefit from SkyTeam Alliance’s services to 898 destinations in 169 countries. With the addition of Tarom, the alliance now consists of seven European carriers.

Majority of Lufthansa passengers flying to Munich come from Manchester Last May 2010 Lufthansa reported an increase in the number of passengers travelling to and from Munich and Manchester. Compared to last year’s traffic, this year’s traffic between the two cities increased by 38.5% in March, 14.6% in April, and 67.5% in May. More than 65% of the passengers from Manchester were connecting passengers and used Munich Airport (MUC) as a connecting airport.


Steve Martin Senior Vice President

THE WASHINGTON REPORT

July 2010

DOT Policy Allowing Congestion Pricing Upheld by U.S. Courts The U.S. Court of Appeals for the District of Columbia upheld the Department of Transportation’s rule allowing airports to charge higher landing fees during “peak” periods as a method of addressing congestion. In doing so, the court rejected claims from the airlines, represented by the Air Transport Association, that the rules were discriminatory and unreasonable.

The DOT regulations, proposed originally in the waning days of the Bush Administration in July 2008, would permit US airports to alter their rates and charges to reduce congestion. There are three basic elements of the DOT proposal: allowing an airport to include certain costs (relating to capital improvement) in the rate base for determining landing fees during congested hours, instituting the two-part fee structure (a per-operation charge and a weight-based charge), and permitting landing fees to vary throughout the day.

In challenging DOT’s regulations, ATA had argued first that the regulations authorized airports to charge unreasonable and unjustly discriminatory landing fees, in violation of the Airports and Airways Improvement Act of 1982. ATA also argued that the regulations wrongfully allowed state and local airport authorities to charge fees preempted by federal law and provided inadequate guidance to the airports on how the DOT would evaluate the reasonableness of the fees.

The court rejected each of those arguments. The court found that the regulations would allow airports to price landing rights in a way that was neither unreasonable nor discriminatory. On behalf of the three-judge panel that heard the arguments, Judge Douglas Ginsburg wrote that it is "entirely reasonable to expect an airline, and in turn its passengers, to pay a premium for the opportunity to arrive at a peak time."

Allowing airports to base fees on costs that relate to construction and to other airports owned by the proprietor is not inherently discriminatory, the court ruled, in part because the need for expansion is imposed by customers at peak hours. The court agreed that a congestion pricing scheme will adversely affect “airlines with a business model dependent on the use of certain size aircraft flying at certain times of day or with certain frequencies,” a reference to regional carriers. But the court also found that landing a small aircraft during peak periods “imposes nearly as much cost upon the other users of the airport as does an airline that lands a larger aircraft.” Raising landing fees to reflect that “…might make it unprofitable for [a regional airline] to leave its present schedule and fleet unchanged, but that is the point of peak-load pricing, not a defect that makes the price differential unjustly discriminatory.”

On the matter of peak pricing, Judge Ginsburg wrote that there are two ways for airports to find the “market clearing” price – slot auctions and congestion pricing. “In principle, neither system is preferable to the other,” he wrote. The “creativity” of regulators in attempting to manage the nation’s air transportation system “should be welcomed on its merits, not spurned for its novelty.”

ATA is reviewing the US Court of Appeals’ decision. "We remain concerned about the threat of unreasonable and unjustified airport rates and charges and their potential adverse impact on the cost of air transportation.”


THE WASHINGTON REPORT – CON’T

The airports community welcomed the ruling. ACI-NA President Greg Principato said “This landmark decision strongly upholds the rights of airport proprietors to manage airfield congestion and help prevent delays by modifying landing fees.” ACI-NA represents local, regional and state governmental bodies that own and operate major airports in the U.S. and Canada, including 36 of the 37 airports the DOT classifies as congested.

Whether the Obama Administration will push ahead with this policy is uncertain at this point.


INTERVISTAS NEWS InterVISTAS Consulting Group and its CEO Gerry Bruno Win Business Award The InterVISTAS Consulting Group and its CEO Gerry Bruno were awarded the Global Success Award by the Italian Chamber of Commerce in Canada - West. The prestigious award was announced at the Italian Business Awards Dinner held on June 17, 2010 in Vancouver, BC, Canada. The Global Success Award honours a business whose achievements are accomplished in the international arena, supporting the success of Canadian business competing in the global marketplace.

Dr. Emre Serpen Joins InterVISTAS as Executive Vice President InterVISTAS is pleased to announce that Dr. Emre Serpen has joined InterVISTAS as Executive Vice President, and will provide leadership to advance our newly established Airline Business Services Practice Group from London, UK. Dr. Serpen is an established and well known aviation professional with expertise in airline strategy and business transformation. As the former Senior Vice President and Head of the Business Transformation Practice of SH&E, he developed airline management consulting activity, where he defined content and service lines, sold projects, recruited and trained consultants, and led the delivery of projects. Dr. Serpen has a PhD in Cybernetics, Brunel University, Business Analysis and Enterprise Process Modeling and Optimisation in Transportation.


InterVISTAS’ Canadian Aviation Intelligence Report is a collection of information gathered from public sources, such as press releases, media articles, etc., information from confidential sources, and items heard on the street. Thus, some of the information is speculative and may not materialise.

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INTERVISTAS NEWS (CON’T) InterVISTAS Upcoming Speaking Engagements Mark Haneke, Vice President, Network and Strategic Planning • Northwest Chapter AAAE Annual Conference: Anchorage, Alaska – 01-03

September 2010 Mr. Haneke will speak on Air Tourism Development and Marketing at the conference

Steve Martin, Senior Vice President • U.S. State Department workshop, Washington, D.C., September 9, 2010.

Mr. Martin will speak on air service liberalization, now and beyond Open Skies .

Barney Parrella, Executive Vice President • ACI-NA Annual Conference: Pittsburgh, Pennsylvania – 28 September 2010

Mr. Parrella will present the Air Service Development session of the conference, entitled Air Service Reality Check

Dr. Mike Tretheway, President, InterVISTAS Consulting Inc., Executive Vice President and Chief Economist, InterVISTAS Group • Canadian Aviation Maintenance Council - AGM: Vancouver, BC – 30

September 2010

Dr. Tretheway will be giving an industry update CAMC’s Annual General Meeting Jacqueline Clarke, Director, Strategic and Tourism Development • Alberta Visitor Information Providers Conference: Canmore, Alberta – 23-24

October 2010 Ms. Clarke will be presenting the findings and recommendations of the ‘Rural Visitor Information Center Assessment Study” conducted for Canadian Badlands earlier this year.

cair issue no. 78 - july 2010

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