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Saturday, March 30, 2013

JK Kunjungi Bandara Kuala Namu Pemprovsu Diminta Buat Kebijakan yang Dapat Diterima Warga

Pantai Labu, (Analisa). Mantan Wakil Presiden Jusuf Kalla (JK) meminta semua pihak, baik masyarakat maupun instansi yang berkaitan dengan Bandara Internasional Kuala Namu, agar mendukung percepatan pengoperasian bandara ini.
Demikian diungkapkan JK didampingi anggota DPD-RI Rahmat Shah, Wakil Ketua DPRD Sumut Chaidir Ritonga, GM Bandara Polonia, T Said Ridwan, PIU AP II Joko Waskito dan Camat Beringin Batara R Harahap beserta rombongan saat mengunjungi bandara tersebut, Senin (25/3) pukul 15.00 WIB.
Selain indah dan megah, JK juga memuji desain Bandara Kuala Namu yang modern dan memiliki banyak fungsi, terutama dengan keberadaan lokasi yang akan menjadi toko yang memperdagangkan berbagai kebutuhan penumpang.
Menurutnya, salah satu nilai modern Bandara Kuala Namu tersebut dapat dilihat dari penggunaan dinding kaca sehingga cahaya mudah masuk pada siang hari.
Dengan desain tersebut, pengelola Bandara Kuala Namu nantinya tak perlu menghidupkan lampu pada siang hari sehingga dapat menghemat penggunaan energi listrik.
Demikian juga dengan fungsional bagian dalam bandara untuk dijadikan toko sehingga dapat menjadi unsur pemasukan dalam pengelolaan infrastruktur penerbangan itu.
Terkait rasa bangganya atas pembangunan Bandara Kuala Namu, JK menyatakan keinginannya untuk menghadiri peresmian nantinya. “Kalau diundang, saya pasti hadir,” katanya.
Ketika ditanyakan tentang adanya keterlambatan atau penundaan operasional yang awalnya direncanakan pada Maret 2013, mantan Ketua Umum DPP Partai Golkar itu menyatakan memakluminya.
Menurutnya, untuk infrastruktur yang digunakan jutaan orang, biasanya proses pembangunan akan lebih lambat jika sudah menyangkut masalah yang lebih detail.
Apalagi dengan keharusan terjaminnya unsur keselamatan sehingga banyak hal yang harus dipertimbangkan dan diselesaikan sebelum dioperasikan. “Lebih baik sedikit terlambat daripada mengurangi faktor safety (keamanan) dan kenyamanan,” katanya.
Mengenai adanya keterlambatan pembangunan infrastruktur jalan menuju Bandara Kuala Namu, ia menilai hal itu tak perlu terlalu dipersoalkan.
Namun, ia mengharapkan Pemprov Sumut dapat membuat kebijakan yang lebih dapat diterima masyarakat dalam hal ganti rugi lahan, termasuk untuk sejumlah kepala keluarga yang masih bertahan di kawasan Bandara Kuala Namu.
Untuk mempercepat pembangunan berbagai infrastruktur yang direncanakan, mungkin Pemprov Sumut dapat mengeluarkan biaya lebih besar dengan harapan seluruh proses pembebasan lahan dapat dilakukan.
“Kalau harganya Rp1 juta, lalu diganti Rp1,5 juta tidak ada soal. Dua kali NJOP pun wajar saja,” katanya.
Namun masyarakat dan kepala keluarga yang berada di sekitar kawasan Bandara Kuala Namu juga diharapkan dapat mengalah untuk merealisasikan kepentingan umum yang lebih besar.
JK juga berharap pengoperasian Bandara Kuala Namu jangan sampai terkendala karena hanya adanya beberapa orang yang tidak terima dengan “ganti rugi” pembebasan lahan.
Ditegaskan, jangan hanya karena satu dua orang saja sampai menghalangi kepentingan puluhan juta orang.
Dia juga mengaku kagum melihat perkembangan pembangunan Bandara Kuala Namu yang desainnya begitu indah dan luar biasa, di mana  kalau pembangunannya nanti selesai maka bandara ini akan menjadi yang terindah di Indonesia.
Untuk itu orang Indonesia tidak boleh merasa bodoh karena kita juga bisa membangun baik itu perencanaannya, kontraktornya, pengawasnya semuanya harus orang Indonesia.
Diakui dia belum tahu pasti kapan Bandara Kuala Namu ini akan diresmikan namun sekali lagi diminta kepada semua pihak agar mendukung pembangunan bandara ini agar dapat segera dioperasikan.

Bandara Kuala Namu Diresmikan September

Medan, (Analisa). Bandara Kuala Namu dijadwalkan akan diresmikan September 2013. Sementara uji coba (soft operation) akan dilakukan pada Juli untuk memastikan semua berjalan lancar. Demikian dikatakan Dirut PT AP-II Tri S Sunoko usai pertemuan dengan Satuan Kerja (Satker) baik sektor privat yang dibiayai AP-II maupun sektor publik yang dibangun dana bersumber dari APBN.

Dirut AP-II yang didampingi Dirjen Perhubungan Udara Dephub Harry Bakti, GM AP-II Bandara Polonia Medan HT Said Ridwan mengakui, peresmian KNIA nantinya tidak dipaksanakan. Namun diyakini sisi udara (air side) maupun sisi darat (land side) diperkirakan sudah rampung Juli 2013.

“Kalaupun yang belum final saat peresmian hanya masjid dan hotel yang dipergunakan untuk penumpang transit,” kata Tri S Sunoko yang pada kesempatan itu turut dihadiri deputi bidang ekonomi sekretaris Wapres Tirta Hidayat dan M Ikhsan Tatang, Komisaris Utama AP-II serta pejabat lainnya.

Namun acara soft operation akan dilakukan Juli 2013. “Uji coba itu perlu agar saat peresmian oleh Presiden SBY pada September tidak ada kendala lagi, artinya semua sinkron antara sisi darat maupun sisi udara,” kata Dirut AP-II.

Pada paparan di lantai 9 Hotel Arya Duta, Rabu (27/3), diawali laporan Joko Waskito, selaku Ketua Proyek Invesment Unit (PIU) Bandara Kuala Namu/KNIA. Secara umum pembangunan sudah selesai 94 hingga 95 persen.

Namun ada bagian-bagian yang sudah selesai 100 persen seperti terminal penumpang hanya tinggal memoles saja, terminal barang (cargo), area pengisi bahan bakar (avtur), alat bantu pendaratan pesawat atau Instrumen Landing System (ILS), landasan pacu (runway) dan taxiway juga selesai.

Namun yang belum final pembangunan ruangan VIP, terkait keinginan Pemprovsu. Sementara stasiun kereta api jalur bandara hingga saat ini sudah rampung lebih kurang 50 persen, begitupun dipastikan Juli dapat digunakan, kata Joko Waskito.

Cukup alot saat membicarakan masalah akses jalan non tol (jalan alteri) yang menghubungkan dari persimpangan kayu besar hingga Bandara Kuala Namu.

Terlihat berulang-ulang membahas akses jalan tersebut  antara Kepala Balai I jalan nasional Wijaya Seta dengan staf ekonomi Wapres Tirta Hidayat dan Dirjen Perhubungan Udara Harry Bakti. Ada puluhan titik pembangunan jalan yang belum terhubung dari kayu besar hingga ke bandara.

Namun Wijaya Seta meyakini akan selesai Juli 2013, sementara akses jalan tol hingga saat ini belum dimulai ke sana.

HT Said Ridwan yang hadir pada kesempatan itu menambahkan, padatnya kegiatan penumpang di Bandara Polonia Medan mengharuskan Bandara Kuala Namu cepat digunakan.

Misalnya, pergerakan pesawat setiap hari mencapai lebih kurang 183 pesawat, sebulan 5.490 pesawat bahkan setahun lebih kurang 66.795 pesawat. Sementara pergerakan penumpang/hari mencapai 21.637 orang, setahun diperkirakan mencapai 7.897.505 orang.

Sementara pergerakan kenderaan roda dua dan empat,  kenderaan pribadi yang masuk ke kawasan Bandara Polonia Medan 5.000 unit, taksi 1.000 unit, taksi umum 175 unit dan kendaraan airline 180 unit.

Kuala Namu akan Jadi Bandara Termegah di Indonesia

Starberita – Medan, Mantan Wakil Presiden Republik Indonesia, HM Jusuf Kalla, mengatakan Bandara Kuala Namu atau Kuala Namu International Airport (KNIA) akan menjadi bandara terindah dan termegah di Indonesia. Hal itu dapat dilihat dari designnya yang modren dan memiliki banyak  fungsi.


Hal itu dikatakan JK ketika bersama dengan anggota DPD RI asal Sumatera Utara, DR Rahmat Shah, Wakil Ketua DPRD Sumut Ir H Chaidir Ritonga, Fahmi Idris, Antoni Siahaan, Kadishub Sumut, Dirjen Perhubungan Kemenhub dan GM Angkasa Pura II Said Ridwan meninjau perkembangan pembangunan Bandara Kuala Namu, Senin (25/3).

Menurut Ketua Palang Merah Indonesia ini, salah satu nilai modren Bandara Kuala Namu terlihat dari penggunaan dinding kaca, sehingga memudahkan cahaya masuk pada siang hari. “Dengan design tersebut, pengelola Bandara Kuala Namu tidak perlu menghidupkan lampu pada siang hari, sehingga dapat menghemat energi listrik,” katanya.

Mantan Ketua Umum DPP Partai Golkar ini juga memaklumi keterlambatan operasional Bandara Kuala Namu dari yang ditargetkan. Sebab, menurutnya, setiap infrastruktur yang digunakan jutaan orang biasanya agak lambat. “Masalah keterlambatan infrastruktur juga tidak perlu dipersoalkan,” ujar JK yang mengaku bernostalgia di Bandara Kuala Namu.

JK juga berharap Pemerintah Provinsi Sumatera Utara dapat membuat kebijakan yang dapat diterima masyarakat terkait dengan ganti rugi lahan kepada masyarakat yang masih bertahan di lokasi Bandara Kuala Namu. Dan kepada warga yang masih bertahan karena menolak dengan harga yang ditawarkan pemerintah, JK, berharap hendaknya jangan demikian, karena lahan menuju Bandara Kuala Namu untuk kepentingan umum.  “Kalau dulu orang melihat pekerjaan fisik terminal, sekarang gedungnya sudah siap dan tinggal sedikit lagi,” sebutnya.

Diketahui pembangunan Bandara Kuala Namu dimulai sejak tahun 2006 lalu dan pelatakan batu pertama pembangunan dilakukan JK saat menjadi Wapres saat itu. Target yang semula bandara terbesar kedua di Indonesia itu beroperasi tahun 2010 hingga terakhir Maret 2013 belum juga dapat dipastikan, namun pemerintah memastikan kalau tahun 2013 ini Bandara Kuala Namu akan beroperasi.



http://www.starberita.com/index.php?option=com_content&view=article&id=93526:-kuala-namu-akan-jadi-bandara-termegah-di-indonesia&catid=173:headline&Itemid=784 

Bandara Kualanamu Dibersihkan Akhir Maret

Medan, (Analisa). Sesuai jadwal yang telah ditetapkan, pada Maret ini Bandara Internasional Kualanamu (KIA) masuk dalam tahap pembersihan. Semua sisa bahan bangunan dari proses pembangunan gedung akan dikumpulkan dalam satu tempat.

Kepala Proyek Kualanamu atau Project Implementation Unit (PIU) AP II Joko Wasito, menyatakan pembersihan ini mulai dilakukan pada akhir Maret mendatang, pembersihan akan  dilakukan mulai dari pembersihan abu-abu, sisa bangunan, hingga rumput liar yang akan dipotong.

"Untuk yang paling banyak dibersihkan itu bahan bangunan. Mengingat ada kayu, pasir, batu-batuan, dan lainnya." ujarnya.

Dikatakannya, pembersihan ini akan dilakukan sesuai jadwal yang telah ditetapkan oleh pihak Angkasa Pura II, dan tidak ada keterlambatan dalam hal ini. "Kemarinkan keputusannya April akan beroperasi, sebelum akhirnya ditunda. Jadi, tidak ada lagi keterlambatan," ujarnya.

Sisa Bangunan
Ia melanjutkan pertama sekali yang dibersihkan adalah sisa bahan bangunan berupa batu, kayu, dan barang-barang bekas. Bila ada sebagian sampah maka akan dilakukan pembakaran atau pemusnahan. Tetapi, bila tidak dapat dibakar, seperti batu, maka akan disimpan di kawasan yang memang sudah disediakan. "Kita siapkan lahan untuk sampah ini. Tepatnya dibagian ujung barat bandara. Luasnya sekitar 20 Hektare. Karena sampahnya cukup banyak," katanya.

Diperkirakan sampah yang dihasilkan cukup banyak, pengerjaan untuk pemusnahan inipun akan memakan waktu. Paling cepat sekitar 1 minggu. "Tapi kalau kita kerja rodi, 3 atau 4 hari selesailah," lanjutnya.

Setelah pembersihan sisa bangunan, petugas akan melanjutkan pada pembersihan abu-abu disekitar bangunan sebelum interior bangunan dimasukkan.

Joko juga menegaskan bahwa semua barang-barang bekas tersebut tidak diperjualkan. Karena, untuk saat ini belum ada instruksi untuk menjualnya. "Kalau saat ini, keputusannya masih menyimpan dulu. Kalau perkembangannya nanti, saya belum tahu. Tetapi, yang pasti, saat ini tidak dijual," jelasnya.

Wednesday, March 27, 2013

Malindo Air Jadikan Kota Kinabalu sebagai Hub Kedua Pada Akhir 2013

Malindo Air 737-900ER

(27/3/2013) Setelah sukses melakukan penerbangan perdana 22 Maret yang lalu, Malindo Air yang berbasis di Kuala Lumpur International Airport berencana menjadikan Kota Kinabalu sebagai hub keduanya. Kemungkinan rencana ini baru akan terealisasi pada Desember 2013.

Penetapan Kota Kinabalu sebagai hub kedua bagi Malindo Air setelah Kuala Lumpur sangat memungkinkan karena perusahaan akan mengoperasikan 12 pesawat Boeing 737-900ER hingga akhir tahun 2013. Selain itu, anak perusahaan Lion Air ini juga akan kedatangan cukup banyak pesawat baru pada tahun depan.

Masuknya Malindo Air di Malaysia membuat terpecahnya duopoli yang dilakukan Malaysia Airlines dan AirAsia. Sekarang penumpang yang akan terbang di Malaysia memiliki lebih banyak pilihan dengan produk yang tidak kalah bagus, tapi dengan harga yang kompetitif.

Kota Kinabalu yang terletak di Sabah juga merupakan hub bagi Malaysia Airlines dan AirAsia. Dibukanya hub kedua Malindo di Kota Kinabalu tentu saja akan mempersengit persaingan antara ketiga maskapai ini. (Photo: Malindo Air)



http://internasional.indo-aviation.com

Iberia CEO to leave by ‘mutual agreement’

Iberia CEO Rafael Sanchez-Lozano is to be replaced by Iberia Express CEO Luis Gallego, effective immediately.
In a statement, Iberia’s parent company said: “International Airlines Group (IAG) and Rafael Sanchez-Lozano have decided by mutual agreement that he will step down as chief executive of Iberia and from the IAG board with immediate effect. He will be replaced by Luis Gallego who is currently chief executive of Iberia’s subsidiary Iberia Express. Luis has joined the Iberia and IAG boards.”
The top management change follows a weak financial performance at the Spanish carrier and labor unrest over the airline’s restructuring plans. Sanchez-Lozano, who has led Iberia for three years, said: “The company is now entering a new phase and it is time for me to pass on the baton to my successor.”
New CEO Gallego will come across from Iberia’s Madrid-based short-haul subsidiary, Iberia Express, which he has headed since its launch in March 2012. Prior to that Gallego was chief operating officer of Spanish budget carrier Vueling—currently the target of an International Airlines Group (IAG) takeover approach.
“Luis Gallego has extensive experience across a range of international airlines,” IAG CEO Willie Walsh said. “He was instrumental as chief executive of Iberia Express in creating an airline that is a great success. It is profitable, punctual and popular with customers and has created 500 much-needed jobs in Spain. Iberia is entering its next transition phase and I have every confidence that Luis can return Iberia to profitable growth.”


atwonline.com

PICTURES: Emirates A380 makes Gatwick appearance

Emirates will take delivery of 17 Airbus A380s in its financial year beginning 1 April leading to a fleet of 48 of the double-deck type by this time next year.

Laurie Berryman, vice-president UK & Ireland for the Gulf carrier, speaking at Gatwick airport on 26 March ahead of the arrival of a one-off A380 service, says the super jumbo is "key to its operations".


 Credit - Flightglobal
 Flightglobal

Emirates has confined regular scheduled A380 operations in the UK to Heathrow - where it runs a five daily services - and Manchester, where it flies three times per week.

Gatwick is served using the Boeing 777-300ER, but with its three daily flights showing a load factor of 88%, Berryman believes the route is dense enough to support regular A380 operations. He would not be drawn on a timeframe to launch the service but stresses it will be a case of "if not when".


 Credit - Flightglobal
 Flightglobal

The A380 flight touched down at 12:15 local time, departing around two hours later and "was almost full", notes Berryman.

"We can't commit our service to this airport yet, but hopefully it won't be too long away," he adds.


 Credit - Flightglobal
 Flightglobal
Gatwick has recently completed a £6.4 million ($9.7 million) extension to stand 110 at its North Terminal to allow pier-served access for the type. Design services were provided by consultancy Atkins and construction was led by Vinci.


http://www.flightglobal.com 

BOEING 777: Garuda Datangkan 4 Unit Tahun Ini

BISNIS.COM, JAKARTA --  Garuda Indonesia akan mendatangkan empat unit Boeing 777 pada tahun ini, dan satu pesanan pertamanya datang pada Juni 2013.

Direktur Pelayanan PT Garuda Indonesia Tbk Faik Fahmi mengatakan empat pesawat Boeing 777 akan mulai datang pada Juni 2013, dan akan siap dioperasikan pada Juli untuk diterbangkan rute Jakarta-Jeddah.

“Keempat pesawat B 777 ini merupakan bagian dari total 24 pesawat pesanan Garuda Indonesia sepanjang 2013,” ujarnya, Sabtu (16/3/2013).

Menurutnya, pesanan pertama B 777yang akan datang memang masih untuk ke Jeddah, selanjutnya pada Oktober diperkirakan akan datang lagi yang kedua dan akan diterbangkan ke London.

Direktur Utama Garuda Indonesia Emirsyah Satar sebelumnya mengatakan perseroan akan mendatangkan 24 unit pesawat baru tahun ini. Pesawat-pesawat tersebut terdiri atas empat unit Boeing 777-300 ER, tiga unit Airbus 330 (dua unit 330-200 dan satu unit 330-300), 10 unit Boeing 737-800 NG, dan tujuh Bombardier CRJ 1.000.

“Ke-24 pesawat tersebut akan menambah armada Garuda yang saat ini mencapai 105 unit.
Pesawat-pesawat baru itu akan melayani rute-rute domestik dan internasional,” tuturnya.

Dia menambahkan pesawat Boeing 777 dan Airbus akan dipergunakan untuk penerbangan ke luar negeri, menggantikan Boeing 747 yang sudah tua.

Melalui program Quantum Leap, Garuda Indonesia akan mengoperasikan sebanyak 194 pesawat pada 2015. Anak usaha Garuda, yakni PT Citilink Indonesia, telah memesan 10 unit Airbus 320 dan 50 unit pesawat jenis Turbopropeler.



bisnis.com

Garuda Indonesia Sewa Boeing 777-300ER dari Air Austral Untuk Layani Umroh

Air Austral 777-300ER

(27/3/2013) Maskapai penerbangan nasional Garuda Indonesia akan menyewa satu pesawat Boeing 777-300ER dari Air Austral secara wet lease mulai 28 Maret hingga 30 Juni 2013. Penyewaan ini sudah termasuk pesawat, pilot, perawatan, dan asuransi atau biasa disebut dengan aircraft, complete crew, maintenance, and insurance (ACMI).

Rencananya pesawat akan digunakan oleh Garuda Indonesia untuk melayani penerbangan umroh dari Jakarta ke Jeddah mulai 1 April hingga 30 Juni 2013. Namun, sebelum digunakan untuk terbang ke Jeddah, pesawat akan digunakan untuk pelatihan awak kabin pada tanggal 28-30 Maret 2013.

Pesawat yang disewa Garuda ini memiliki nomor seri produksi (MSN) 35782 dan masih akan menggunakan registrasi F-OSYD dengan usia pesawat baru empat tahun.

Penyewaan Boeing ini dilakukan sebagai masa transisi sebelum Boeing 777-300ER yang dipesan Garuda tiba pada Juni tahun ini. Setelah pesanan Garuda tiba, pesawat dari Air Austral ini akan dikembalikan dan penerbangan ke Jeddah akan dilayani dengan pesawat Garuda Indonesia sendiri.

Selain itu, tambahan armada juga untuk mengakomodasi permintaan penerbangan umroh yang terus meningkat belakangan ini.

Sebelumnya Garuda Indonesia melayani penerbangan Jakarta-Jeddah dengan pesawat Boeing 747-400 yang sudah berusia cukup tua.


http://www.indo-aviation.com 

No decision on possible second A350 line: Enders

EADS has not embarked on any decision for a possible second production line for the Airbus A350, but acknowledges that success for the type might require more capacity.
Chief executive Tom Enders says that Airbus's chief operating officer for customers, John Leahy, is "very bullish" over the prospects for the twinjet family.
But Enders plays down suggestions of a second line, stressing that there is "no decision" regarding a complement to the final assembly line in Toulouse.
"This aircraft promises to be a success," says Enders, who was speaking during the EADS annual conference in Berlin. The A350 backlog at the end of January 2013 stood at 592 aircraft.
Boeing has established a second assembly line for the 787, located in Charleston. But Enders says that, if there is a business case for a second A350 line, it will be evaluated.
Enders warns that the A350 is entering a crucial phase and that the aircraft programme is "inherently risky". But he says he is "looking forward" to seeing the first prototype perform its maiden flight "in summer".
Germany's government, he confirms, has not yet contributed a €600 million loan for development of the aircraft.
"It has not been paid," he says. "We are still in discussions with the responsible people in the German government."


flightglobal.com

Engines fitted to first flight-test A350

Airbus has fitted the Rolls-Royce Trent XWB powerplants to its first flying A350 prototype, and is also installing the aircraft's auxiliary power unit.

A350 MSN1 is to undergo ground tests and painting over the next few weeks before being handed over to the airframer's flight-test team for ground runs.

Airbus has yet to finalise a maiden flight date, simply saying it is aiming to fly the twinjet "in the summer".

"With the installation of its engines and also the auxiliary power unit, MSN1 becomes essentially a 'completed' aircraft," says the airframer.

Airbus adds that the engines, which were certificated in February, have been undergoing preparation for installation with UTC Aerospace Systems. The APU, designated the HGT1700, has been developed by Honeywell.


flightglobal.com

Boeing completes first 787 functional test flight

Boeing conducted a functional check flight Monday on Line number 86, a Boeing-owned production aircraft built for LOT Polish Airlines. The flight was to test the redesign of the 787 lithium ion battery system, which was responsible for two failures that grounded the fleet earlier this year.
According to Boeing, the aircraft landed safely at Paine Field in Everett, Wash., after a 2 hr. 9 min. flight. The crew tweeted, “787 flight went according to plan. Teams now prepare for battery certification flight test in coming days.”
The manufacturer said the flight was a “normal Boeing production check flight intended to validate that all systems function as designed. During a functional check flight, crews cycle the landing gear and operate all the backup systems, in addition to performing electrical system checks from the flight profile. Across airplane programs, more than 600 functional check flights were completed in 2012.”
Boeing said in a preflight statement, “Following the completion of the functional check flight, we will analyze the data from the flight and prepare for certification ground and flight demonstration in the coming days. The plan is to conduct one certification demonstration flight. That flight, which will take place on Line 86, will demonstrate that the new battery system performs as intended during flight conditions.”
The US National Transportation Safety Board (NTSB) also announced Monday it would hold the first of two Boeing 787-related public events April 11-12, focusing generally on lithium ion batteries in transportation.



atwonline.com

Garuda Sewa Boeing 777 Khusus Untuk Umroh?

(16/3/2013) Maskapai penerbangan Garuda Indonesia dikabarkan akan mendatangkan pesawat Boeing 777-300 yang rencananya digunakan khusus untuk penerbangan umroh pada tahun ini. Hal ini dilakukan perusahaan karena permintaan dari Kementerian Agama untuk menambah kapasitas pada penerbangan umroh.

Saat ini permintaan penerbangan ke tanah suci mengalami peningkatan yang luar biasa. Setiap tahun terjadi penambahan jumlah penumpang yang berniat melakukan perjalanan umroh sangat banyak, sehingga cukup menyulitkan maskapai penerbangan dalam menyiapkan pesawat.

Menurut Direktur Penerbangan Haji Garuda Indonesia Hadi Syahrean seperti yang dikutip dari Hidayatullah.com mengatakan, perusahaan telah siap mengoperasikan satu pesawat Boeing 777-300 yang memiliki kapasitas 442 penumpang untuk penerbangan umroh dari Jakarta ke Jeddah.

Saat ini Garuda Indonesia telah melayani penerbangan Jakarta-Jeddah sebanyak 13 kali seminggu dengan pesawat Boeing 747-400 berkapasitas 425 penumpang. Pengoperasian pesawat dengan kapasitas yang lebih besar ini dapat menjawab kebutuhan masyarakat yang ingin melaksanakan ibadah umroh.

Tidak diketahui secara pasti apakah pesawat ini didatangkan dengan cara sewa atau beli. Namun, kemungkinan pesawat didatangkan dengan sistem sewa. Selain untuk keperluan umroh, Garuda bisa memanfaatkan pesawat Boeing 777-300 ini untuk familiarisasi awak pesawat dan awak kabin, sebelum pesanan pesawat baru Boeing 777-300ER Garuda Indonesia tiba pada bulan Juni nanti.



http://www.indo-aviation.com/2013/03/garuda-sewa-boeing-777-khusus-untuk.html 

Saturday, March 23, 2013

Bandara Kualanamu Ditarget Beroperasi Agustus 2013

REPUBLIKA.CO.ID, MEDAN--Pembangunan Bandara Kuala Namu yang berlokasi di Desa Beringin, Kecamatan Beringin, Kabupaten Deli Serdang, Sumatera Utara, diyakini selesai tepat waktu dan dapat beroperasi Agustus 2013. Optimisme itu disampaikan oleh pimpinan proyek, Ir Joko Waskito.

"Saya optimistis bandara yang dibiayai dari sumber dana lokal melalui APBN murni, Departemen Perhubungan dan anggaran PT (Persero) Angkasa Pura II (sektor privat) selesai sesuai ketentuan," katanya ketika dihubungi dari Medan, Jumat (22/3).

Joko menyatakan bandara bertaraf internasional yang cukup besar dan megah itu, dapat beroperasi pada Agustus 2013. Ia berharap tidak terjadi lagi penundaan seperti sebelumnya yang direncanakan selesai pada Maret 2013.

Keyakinan itu, ujarnya, karena saat ini pengerjaan proyek tersebut telah rampung mencapai 95 persen dan tinggal merapikan bangunan.

"Jadi, masih ada waktu cukup panjang untuk menyelesaikan sisa 5 persen lagi bangunan Bandara Kualanamu itu hingga Agustus. Sedangkan saat ini masih Maret, tinggal lima bulan lagi," katanya.

Luas area Bandara Internasional Kualanamu mencapai 1.365 hektare, area terminal 118.930 meter persegi (M2), kapasitas terminal 8.1 juta pax per tahun, luas area parkir 50.820 meter persegi (M2), gudang kargo seluas 13.000 meter persegi (M2) dan kapasitas parkir, 407 taksi, 55 bus dan 908 mobil.

Qantas, Virgin Australia face new industry normal

It is back to the future. In the movie the protagonist goes back to the past to seek guidance for the future. The same holds true for the Australian aviation market. Since the collapse of Ansett Australia in 2001, coupled with the proposed acquisition of Tiger Airways Australia by Virgin Australia, which is still subject to the regulatory approval from the Australian Competition and Consumer Commission (ACCC) whose final decision is due 14 March, the domestic aviation market has never been such dynamic, competitive and virtually returned to the duopoly era predating the Melbourne-based carrier’s liquidation.
As the fierce competition between Australia’s largest carrier, Qantas Airways and the aspiring Brisbane-based Virgin Australia gets underway, the domestic Australian market is being flooded with capacity, of which the highest total market capacity growth since Jetstar’s inception in 2004 stood at 10.1% in the first half of FY2012/13, according to the Bureau of Infrastructure, Transportation and Regional Economics (BITRE) figures; as a result, the domestic business class airfares have slumped to unprecedented multi-year lows.
The consequential dent in the airlines’ profitability in the domestic market was stark, with Qantas Domestic’s underlying earnings before interest and tax (EBIT) declining significantly by 34% from A$328 million in the first half of FY2011/12 to A$218 million in FY2012/13 first-half and group yield excluding foreign exchange impact slumping by 2.9% from 10.77 Australian cents per revenue passenger kilometre (RPK) in the prior year period to 10.46 Australian cents this year. Jetstar’s underlying EBIT also plummeted by 13% from A$147 million in FY2011/12 first-half to A$128 million in FY2012/13 first-half primarily owing to stiff domestic competition and the start-up losses recorded at its Jetstar Japan and Jetstar Hong Kong units.
The picture is not any rosier at Virgin Australia, whose 43.3% plunge in the earnings before interest and tax (EBIT) at its domestic business to A$49.3 million in the first-half FY2012/13 from A$87 million recorded a year earlier largely attributable for a 36.5% drop in the airline group’s underlying profit before tax (PBT) to A$61 million for the first six months of this financial year.
Image Courtesy of John Absolon
Qantas passes ‘turning point’
The challenge facing Qantas’ domestic business units overshadowed the progress being made in turning around its international unit, whose A$91 million loss in the FY2012/13 loss was a 65% year-over-year improvement over the A$262 million loss recorded in the prior fiscal year.
Revenue at a group level rose by 2% from A$8.05 billion in FY2011/12 first-half to A$8.24 billion in FY2012/13 first-half, matching a 2% increase in expense from A$7.77 billion last year to A$7.9 billion this year. A stagnant fuel cost at A$2.18 billion which the airline attributed to its fuel efficiency improvement initiative also helped produce a 12% increase in underlying earnings before interest and tax (EBIT) from A$277 million in the first-half of the last fiscal year to A$310 million this fiscal year. Underlying profit before tax (PBT), which took into account the effect of net finance costs for the group and stood at A$87 million this fiscal first-half, surged by 10% from A$202 million in FY11/12 first-half to A$223 million in FY12/13 first-half.
The key financials of the group continued to improve, with the group repaying US$450 million of debt due June 2013 early and launching a A$100 million share buyback programme. Cancelling a US$8.5 billion order for 35 Boeing 787-9 Dreamliners and selling its non-core assets such as its 50% stake in StarTrack Express and its Riverside and Cairns catering facilities have collectively reduced capital expenditure by a staggering 62% from A$1.5 billion in FY11/12 first-half to A$575 million in FY12/13 first-half. This in turn outweighed a 5% plunge in the group’s operating cash flow (OCF) from A$842 million last fiscal first-half to A$780 million this year, thereby producing a net free cash flow (FCF) of A$205 million, swung from the A$678 million net cash outflow a year earlier.
Net debt decreased by 5% from A$3.56 billion in FY2011/12 first-half to A$3.36 billion in FY12/13 first-half whereas net debt including operating lease plummeted by 8% from A$5.4 billion last year to A$5 billion this year, while adjusted shareholders’ equity increased by 8% to A$5.7 billion compared to the A$5.56 billion at 30 June 2012, thereby leading to a 7% improvement in the net debt-to-equity ratio from 0.96 times 6 months earlier to 0.89 times at the end of last year.
Qantas Group carried 4.3% more passengers to 24.7 million in the first-half of FY2012/13, up from 23.7 million a year earlier, though a 1.7% increase in capacity, measured in available seat kilometres (ASKs), from 70 billion in FY11/12 first-half to 71.4 billion in FY12/13 first-half, outpaced a proportionately less 0.7% increase in traffic, measured in revenue passenger kilometres (RPKs) to 57 billion from 56.7 billion in the corresponding period. As a result, the load factor slumped by 0.7 percentage point to 80% from 80.7% in the year-earlier period.
The airline also improved unit cost excluding fuel, measured in cost per available seat kilometre (CASK), from 5.38 Australian cents in FY11/12 first-half to 5.04 Australian cents in FY12/13 first-half. Factoring in the A$125 million Boeing settlement which provided a 0.18 Australian cents tailwind and the 0.08 Australian cents impact resulting from the carbon tax, the comparable unit cost declined by 3.4% from 5.24 Australian cents in the year-ago period to 5.06 Australian cents this year. This was partly attributable to Qantas’ fleet renewal programme, which saw 1 Boeing 747-400, 1 767-300ER and 3 737-400s being retired during the period in addition to the 2 747-400s and 1 Jetstar A320 being returned to lessors, leaving a fuel-guzzling fleet of 18 747-400s, down from 21 just six months earlier.
“We have now passed a turning point as we continue to deliver the transformation of Qantas,” Qantas chief executive Alan Joyce declared.
Yet these figures have masked the immense challenge facing Qantas going forward, especially on the lucrative domestic front.
First of all, the A$125 million settlement from Boeing over the cancellation of 35 firm 787-9 orders has significantly distorted the financial performance of the company, with the underlying earnings before interest and tax (EBIT) being A$95 million, a 66% slump than the year-earlier EBIT of A$277 million, had there not been the non-recurring compensation. By the same token, the underlying profit before tax (PBT) would have slumped by a staggering 96% to a mere A$8 million for FY2012/13 first-half, with the statutory profit before tax (PBT) bleeding red ink at a A$64 million loss and a A$104 million statutory profit after tax loss.
Most importantly, Qantas could no longer rely on its traditional profit powerhouse – Qantas Domestic to provide the bulk of the lift to the group alone. While successfully defending an 84% corporate market share and renewed 40 corporate accounts in addition to winning 39 new ones, including 4 won back from Virgin Australia. But the cost of doing so is taking its toll on Qantas with a 3% decline in domestic load factor from 79.6% a year ago to 76.6% despite a 2% increase in revenue to A$3.2 billion in FY12/13 first-half from A$3.1 billion in the prior year period. This was the primary culprit behind Qantas Group’s 2.9% decline in yield, measured in revenue per revenue passenger kilometre (RPK), to 10.46 Australian cents this year from 10.77 Australian cents a year earlier.
Looking ahead, Qantas will have to work extra hard to differentiate itself from the transcontinental A330 service offered by Virgin Australia in order to earn every dime of the domestic business. It has already announced to upgrade 20 domestic Airbus A330-200 aircraft with lie-flat business class seat, a new economy class design and a new in-flight entertainment (IFE) system, an additional order for 5 Boeing 737-800s in addition to the earlier announcements of ordering 5 extra 717s and 3 Bombardier Q400 NextGen turboprop aircraft for the lucrative fly-in fly-out (FIFO) market.
“The upgraded A330-200s will be joined by more next-generation Boeing 737-800s for domestic short haul operations. With five additional orders, our B737-800 fleet will ultimately grow to 75 aircraft. Older narrowbody Boeing 737-400s will be phased out by the end of 2013 and Boeing 767s by mid-2015. We are simplifying our fleet and making better use of the greater flexibility and higher frequencies that the B737-800s provide, while investing in what will be the best domestic onboard product anywhere in the world with the A330s,” Qantas chief executive Alan Joyce said.
One way to achieve further differentiation lies in its strong frequent flyer programme under Qantas Loyalty, which remains Qantas Group’s second-most profitable unit with an earnings before interest and tax (EBIT) of A$137 million, up 15% from the year-earlier result of A$119 million. Its member base has grown from 7.9 million in FY11 and 8.6 million in FY12 to 9.0 million in FY13 and has recently launched Qantas Cash, a pre-loaded frequent flyer card with up to 9 currencies that enables its bronze frequent flyer to check-in at airports and use the new card as a boarding pass.
Image Courtesy of Keith McInnes
Image Courtesy of Keith McInnes
Qantas must put meat on the bones in its Asia strategy
When the APA Mark II, a consortium led by investor Mark Carnegie, former Qantas chief executive Geoff Dixon and his fellow former chief financial officer (CFO) Peter Gregg and advertising magnate Jon Singleton, sold its 1.5% stake and netted A$18 million in profit, this has enabled Qantas to refocus on turning around its loss-making international operation instead of fending off a “destabilisation” strategy in pursuit of an alternative vision for Qantas to expand into Asia aggressively.
The centrepiece of the turnaround strategy is the Qantas/Emirates alliance (“Qantas/Emirates alliance to reshape competitive landscape“, 10 Sep, 12), of which the Australian Competition and Consumer Commission (ACCC) has given its interim authorisation this January.
“In its draft determination issued in December the ACCC formed the preliminary view, after conducting a detailed assessment, that the public benefits resulting from the alliance are likely to outweigh the public detriment which may result through its effect on competition where Qantas and Emirates offer overlapping services. In most regions, this detriment is likely to be mitigated by a number of factors, including continued competition from a number of established airlines,” ACCC chairman Rod Sims said in a statement.
“The ACCC raised concerns about the potential impact of the alliance on the overlapping routes between Australia and New Zealand. The ACCC is concerned that the alliance may have an increased ability and incentive to reduce or limit growth in its capacity in order to raise airfares. Therefore, the ACCC is granting interim authorisation on the condition that the applicants do not engage in the conduct for which authorisation is sought in relation to services between Australia and New Zealand,” Sims cautioned.
In a 20 February submission to the ACCC, Qantas has clearly explained that the Qantas/Emirates partnership, which entails the flying kangaroo ditching its hub in Singapore for European traffic in favour of Emirates Airline’s base in Dubai and grants access to 33 new one-stop European and 31 Middle Eastern/African destinations for Qantas passengers, is adopting a model of splitting routes under the “trunk routes” and “non-trunk routes” categories.
The Master Co-ordination Agreement (MCA) stipulates that Qantas flights via and to/from Dubai as well as Emirates from Dubai via/to Australia, including trans-Tasman services to Auckland, New Zealand will be categorised as “trunk routes”, for which a “benefit transfer” model will be adopted. The “benefit transfer” model will equally share the incremental profits gained as a result of the Qantas/Emirates partnership between both carriers, ensure that the partnership is on a “metal neutral” basis where none of a particular party’s aircraft is favoured or prioritised and enable both carriers to jointly manage yields and inventories.
For “non-trunk routes”, which include domestic Qantas and Jetstar flights, Jetstar New Zealand and Jetstar flights in Asia, a commission-based model will be adopted, whereby a commission payment will be made as a determined percentage of passenger revenue to the non-operating carrier.
“It’s off to a great start. It’s only been three weeks and there’s probably been some pent-up demand but the combination of Qantas and Emirates together is, I think, a killer combination,” Qantas chief executive Alan Joyce said in a Bloomberg interview, in which he noted the bookings to Milan and Barcelona, routes which are under the “non-trunk” and covered by the commission-based model, are up 17 times and 10 times, respectively.
Meanwhile, Qantas’ announcement of improving its Asia service offering is insufficient to securing a stranglehold in Asia profitably while the flying kangaroo may be unduly reliant on Emirates and Jetstar, which may prove to be a retrench in the interim in the world’s fastest-growing aviation market before the 787-9 arrives in 2016.
The first phase of the Asia expansion involves improving the QF29 Melbourne-Hong Kong flights by 3 hours and 55 minutes to improve connection times, QF77 Perth-Singapore flights by 2 hours and 5 minutes, QF51 Brisbane-Singapore flights by 3 hours and 20 minutes, QF23 Sydney-Bangkok flights by 3 hours and 35 minutes and Melbourne-Singapore flights by 4 hours and 35 minutes.
In doing so, there will be 10% and 40% more dedicated seats to Hong Kong and Singapore, respectively, where the latter will also see 25 net additional connections. Coupled with the reconfiguration of 10 Airbus A330-300s deployed to Asia with lie-flat beds, a new economy class and a new in-flight entertainment (IFE) system beginning late 2014, as well as the addition of Kuala Lumpur as an Emirates codeshare destination, Qantas claims its Asia services have been significantly improved.
“Through a combination of Qantas, Jetstar and our partners we aim to provide the best travel options between Australia and Asia, all linked to one of the world’s leading frequent flyer programmes. Our first step has been to restructure existing services to Asia now that they are no longer tied to onward links to Europe. The number of dedicated seats on Qantas services to Hong Kong and Singapore is increasing significantly, because capacity previously set aside for customers going to Europe via these hubs can be freed up,” Qantas International chief executive Simon Hickey contends.
“The refurbished aircraft will give Qantas International a truly world-class product in global aviation’s most dynamic and competitive market. Growing with Asia is a major priority for the Qantas Group and this investment underpins our commitment to the region,” Qantas chief executive Alan Joyce asserts.
BITRE domestic business fare Feb 2013

restricted economy fares Feb 2013
Source: BITRE
However, this Asia improvement plan conveniently ignores the fact that Qantas will become increasingly dependent on Emirates and its Jetstar subsidiaries in Singapore, Japan, Vietnam, Hong Kong and Australia of which the Australian Competition and Consumer Commission (ACCC) last December approved its joint venture co-ordination agreement (JVCA) to expand internationally.
This is highlighted by the fact that Qantas International will suspend its Perth-Hong Kong and Adelaide-Singapore routes by the end of March and 14th April, respectively and reducing the flight frequencies on the Sydney-Hong Kong route from 11 to 7 per week.
In comparison, Hong Kong-based Cathay Pacific Airways offers 4 daily flights on the route, with the earliest arrival at 05:25 in the early morning, enabling passengers for onward connections to any destination in Asia/Pacific without compromising the flexibility in scheduling business meetings. In addition, Cathay Pacific also operates triple-daily flights to Melbourne with the earliest arrival in Hong Kong at 07:20 in the morning. Notwithstanding Qantas’ improved arrival times from Melbourne into Hong Kong at 1710 in the evening, which is better than the previous night arrival, are incompatible and uncompetitive in terms of accommodating business meetings and onward connections, let alone the 1725 arrival time for Qantas flights from Sydney.
The phenomenon is commonplace, with Singapore Airlines’ 4-daily flights between Singapore Changi and Sydney having an earliest arrival at 1300 against Qantas’ 1600; SIA’s Brisbane-Singapore flights have an earliest arrival at 0530 in the early morning against Qantas’ 1605 arrival; whereas SIA’s Perth-Singapore flights have an earliest arrival of 0635 in the morning compared to Qantas’ 1520 arrival time.
Should Qantas seek to leverage its strong brand and secure a firm hold in Asia, it should fast-track its Asian expansion and launch destinations to Beijing, Seoul, Mumbai, Delhi and Tokyo Haneda before the 2016 arrival of its first 787-9 Dreamliner, whose order has yet to be firmed.
While launching these new destinations may deem to be premature and risk jeopardising returning Qantas International to the black by FY2014/15 to financial analysts, the marginal benefit in doing so arguably outweighs the marginal cost and the risk involved provided these service/price offerings be timed and priced properly.
This is vital to enhancing the Qantas proposition to business travellers as neither Emirates and Jetstar Asia could serve these North Asian destinations as effective as Qantas International could since Qantas International passengers currently have to either board a Jetstar Asia onward flight from Singapore to Beijing or transit at Shanghai Pudong International Airport on China Eastern Airlines’ (CEA) connecting flights to Beijing, whereas Singapore Airlines (SIA) and Cathay Pacific offer consistent and superior in-flight products via their respective hubs at Singapore and Hong Kong.
Moreover, by no means are other competitors going to stand still for the next 2-3 years and not capitalise on the growing air travel market connecting the world’s fastest-growing region, especially the manufacturing powerhouse China which is targeting a 7.5% gross domestic product (GDP) growth for 2013, Indonesia where the World Bank forecasts its 2013 GDP growth at 6.5%; and the resource-rich country which will be feeding Asia/Pacific’s burgeoning economy.
Both Singapore Airlines and Cathay Pacific have already added 5th daily flight to London which are meant to capture the spill-over demand from those travellers who wish to transit at Asian stop-over destinations. SilkAir, a wholly-owned subsidiary of Singapore Airlines (SIA), will more than double its fleet from 15 Airbus A320s and 6 A319s to 23 Boeing 737-800s and 31 re-engined 737 MAX 8s in order to tap into rising regional demand, whereas Cathay Pacific’s wholly-owned subsidiary Dragonair has launched numerous new destinations in the past few months aimed at improving its network to burgeoning economies, such as Yangon in Myanmar, Zhengzhou, Wenzhou in China, Kolkata and Cathay Pacific’s new flights to Hyderabad, India (“Cathay Pacific to be a smarter & leaner airline in 2013“, 3rd Jan, 13).
Others, especially those Chinese carriers, have been quick to seize this market potential. Guangzhou-based China Southern Airlines, which intends to establish Guangzhou Baiyun International Airport as the hub on the “Canton Route”, has carried 24.6% more passengers in 2012 from 515,370 passengers in 2011 to 642,210 last year, according to the Bureau of Infrastructure, Transportation and Regional Economics (BITRE) figures compiled by Aspire Aviation. Shanghai-based China Eastern Airlines (CEA), meanwhile, carried 26.6% more passengers to 346,690 in 2012 from 273,905 in the prior year, whereas Air China carried 5.7% more passengers in 2012 to 297,954 from 282,025 in 2011.
Similarly, Singapore Airlines (SIA) carried 7.4% more passengers last year to 2.72 million, up from 2.53 million in 2011, while its wholly-owned long-haul low-cost subsidiary Scoot Airlines and SilkAir carried 233,013 and 24,271 passengers last year, respectively. A noteworthy point is the gap between SIA and Dubai-based Emirates over the number of passengers carried and their shares’ of Australia’s international traffic is closing, with Emirates transporting 2.496 million passengers in 2012, a 12.9% year-over-year growth from 2.21 million passengers carried in 2011, which leads to an 8.4% international share, compared to SIA’s 9.2% share for 2012. On the other hand, Abu Dhabi-based Etihad Airways flew 7.6% more passengers last year compared to 2011, from 505,345 in 2011 to 543,896 a year later.
On the contrary, Qantas has been growing its China operation sluggishly, registering only a 0.6% growth in the number of passengers carried from 140,944 in 2011 to 141,860 in 2012 while its overall international operation grew by 2.3% from 2011′s 5.13 million passengers to 5.25 million passengers and its international share has shrunk to just 17.7% from 33.5% in 2002, a 47.2% shrinkage which was an astonishing tale of contrast when considering Emirates only accounted for 2% of international traffic in 2002.
Having said that, Aspire Aviation predicts that Qantas is unlikely to see a reversal in trend while focusing on returning the international operation to profitability as its first priority before any “premature” international growth by Qantas International from management’s perspective; and adopting a “capital-lite” model that relies on its multiple Jetstar subsidiaries, Emirates, Japan Airlines (JAL) and China Eastern Airlines (CEA), which may ultimately see the Qantas/Emirates partnership extending to Jetstar Asia.
Aspire Aviation believes while it is a prudent practice to be backed by a strengthened balance sheet with a reduced capital expenditure of A$1.6 billion in FY2012/13 and A$1.5 billion in FY2013/14 and a newer group fleet with 3 Boeing 747-400s, 1 767-300, 3 737-400s and 1 Jetstar A320 being withdrawn in the second half of FY12/13, doing so would invariably pose a significant strategic risk since other Asian carriers would have firmly established their footholds and started reaping the rewards from an Asian growth model which would be very difficult for Qantas International to break.
Image Courtesy of Bloomberg
Image Courtesy of Bloomberg
Virgin Australia remains a work in progress
Having added 8.9% of capacity, measured in available seat kilometres (ASKs), to its domestic business and being locked in a dogfight with Qantas Domestic which has itself added 5% of ASKs in FY2012/13 first-half, Virgin Australia is undoubtedly feeling the heat on its bottom line despite significant underlying progress being achieved.
Group revenue rose by 5.4% from A$1.997 billion in FY2011/12 first-half to A$2.1 billion in FY12/13 first-half while net operating expense rose at a proportionately faster pace of 7.99% from A$1.91 billion in the prior fiscal period to A$2.1 billion in FY12/13 first-half, including an 8.4% increase in fuel expense to A$576 million from A$531.6 million a year ago, thereby producing a 51% fall in operating profit from A$99.4 million in the prior fiscal year period to A$48.7 million this year.
Underlying profit before tax (PBT) fell by 36.5% year-over-year to A$61 million from A$96.1 million, while a more than tripling in its business transformation cost from A$10.5 million in FY2011/12 first-half to A$36 million due to the migration to a Sabre reservation system this January, weighed down its statutory profit before tax (PBT), which slumped significantly by 63.5% to A$28.2 million in FY12/13 first-half from A$77.3 million in the corresponding period last year, partly due to the A$24.4 million carbon tax. Statutory profit after tax similarly collapsed by 55.6% to A$23 million in FY12/13 first-half from A$51.8 million a year ago.
The carrier transported a record 10.1 million passengers during the six-month period, up from 9.9 million a year ago, albeit the 6.5% increase in group capacity, measured in available seat kilometres (ASKs), to 21.2 billion from 19.9 billion outpaced traffic growth, which, coupling with a stiff domestic competition, led to a 1% decline in group passenger yield to 12.16 Australian cents per revenue passenger kilometre (RPK) from 12.28 Australian cents in the year-ago period.
“The Group has delivered a solid result in a difficult operating and economic environment, reflecting the significant progress we have made in diversifying our revenue base and improving cost control, while continuing to enhance the customer experience. We have continued to grow our corporate and government revenue and maintained the new norm in which more than 20% of our domestic revenue comes from this higher yielding market,” Virgin Australia chief executive John Borghetti said.
Virgin Australia’s operating cash flow (OCF) dwindled to A$42.6 million for FY2012/13 first-half, down 83.2% from FY11/12 first-half’s A$253.5 million, as the Sabre migration impacted forward bookings, while the Brisbane-based carrier witnessed a net cash outflow of A$118.6 million, swung from a net cash inflow of A$126.4 million last fiscal first-half. Total liabilities decreased by 2.8% to A$2.98 billion in FY12/13 first-half from A$3.07 billion in the prior fiscal period while total equities improved by 16.8% to A$1.09 billion from A$929.7 million in the year-earlier period, thus resulting in a drastic improvement in debt-to-equity ratio from 3.297 times to 2.745 times.
Virtually every part of Virgin Australia remains a work in progress and the ‘Game On’ phase of its “Game Change” programme as well as its cost-cutting programme must start to yield benefits to the business and create shareholder value, however.
For its domestic business, its earnings before interest and tax (EBIT) slumped by 43.3% to A$49.3 million in FY2012/13 first-half from A$87 million the prior fiscal period despite a 3.96% increase in domestic revenue to A$1.51 billion against the A$1.45 billion posted in FY11/12 first-half and more passengers being carried at 8.7 million, up from year earlier’s 8.6 million.
Importantly, successfully acquiring 100% of Skywest Airlines and 60% of Tiger Airways Australia will be the pre-requisite for Virgin Australia to compete effectively against Qantas and Jetstar in the domestic market, of which the former acquisition was cleared by the Australian Competition and Consumer Commission (ACCC) on 31 January.
“The ACCC’s view is that this acquisition is unlikely to lead to a substantial lessening of competition in any relevant market, primarily because the direct overlap between Virgin Australia and Skywest’s services is limited to a single route between Perth and Broome,” ACCC chairman Rod Sims said in a statement.
“This acquisition will enable us to accelerate our expansion in the high growth fly-in-fly-out (FIFO) and regional markets, increasing competition in these important segments and bringing new benefits to customers. It will also be very positive for business and tourism, particularly for regional Australia, as we will invest to support the growth of Skywest,” Virgin Australia chief executive John Borghetti said.
Though the ACCC has raised competition concerns regarding Virgin Australia’s acquisition of 60% of Tiger Airways, fearing the merger will “remove all competition between Virgin Australia and Tiger Australia”.
Aspire Aviation believes the ACCC’s assumption of a removal in competition between Virgin Australia and Tiger Airways Australia is categorically incorrect and misleading, as low-cost carriers (LCCs) do compete with their parents in the low-end segment for price-elastic or price-sensitive passengers who would otherwise not have flown on the domestic Australian routes and used bus or train travel instead.
For example, on where Virgin Australia and Tiger Airways Australia have overlapping routes, i.e. virtually all Tiger Australia routes except Melbourne-Perth, Melbourne-Alice Springs and Sydney-Alice Springs, the ACCC could establish a baseline of capacity which Virgin/Tiger must maintain as a condition of approval and ensure that the lowest fare offered by Virgin Australia would be competitive with those offered by Tiger Australia, although Virgin Australia should remain free to manage the number of such heavily discounted seats being sold.
Most importantly, allowing Tiger Australia to merge with Virgin Australia is essential for the wounded Tiger’s survival, whose S$13 million third-quarter FY2012 loss was a 49.6% deterioration from FY11′s S$9 million loss and its parent company Tiger Airways, with a weak balance sheet and a 345% debt-to-equity ratio and a 0.297 current ratio, has already issued S$297 million rights issue and preferential offering in order to repay debts (“Singapore Airlines at a crossroads“, 29th Jan, 13).
Image Courtesy of Virgin Australia
On the contrary to the notion that a Virgin Australia/Tiger Australia merger will weaken competition, it in fact ensures a wounded Tiger Airways to make a full financial recovery and enables Virgin/Tiger to compete effectively with the former further differentiating its products offering and targeting price-inelastic, lucrative last-minute business travellers and the latter focusing on offering the lowest airfares at which profitability could be achieved. Absent a Virgin Australia acquisition and its A$35 million (US$36.2 million) payment and another A$5 million one for meeting certain specified financial targets within the next 5 years, Tiger Airways Australia is unlikely to survive in its current form, which is unsustainable financially (“Virgin Australia’s acquisition spree strengthens foundation for growth“, 12th Nov, 12).
Despite Virgin Australia chief executive John Borghetti’s reluctance to make a firm commitment to growing Tiger Australia’s fleet from 11 planes to 35 by 2018, Tiger Australia’s dire financial straits render such commitment non-sense commercially should it be unable to return to profitability and compete head-to-head with Jetstar Australia.
“You can’t give an iron-clad guarantee on something like that because you just don’t know what’s around the corner. No airline in the world would give a capacity commitment for five years,” Virgin Australia chief executive John Borghetti asserts.
But should Virgin Australia be allowed to use its insights behind the rising costs of Virgin Blue and pre-emptively prevent repeating the same mistake again while gaining economies of scale, the Australian consumers would be the ultimate beneficiary for a strong and thriving duopoly.
For instance, Qantas Domestic currently has a capacity share of 42.8% whereas Jetstar has another 18% share while Virgin Australia, Tiger Australia and Skywest Airlines have 29.9%, 4.2% and 0.7% shares, respectively, according to a Centre for Aviation (CAPA) report. Assuming an average annual capacity growth of 5% at Virgin Australia over the next 5 years, the combined Virgin Group will only control 47.9% capacity share, very close to a duopoly with Qantas Group by then at the expense of Jetstar and Qantas Domestic’s shares, Aspire Aviation forecasts.
‘We have seen the competitor change the strategy multiple times, and we have successfully introduced our two-brand strategy no matter what the competitor has done. Virgin has given up the low-cost end of the market and gone to the premium end. The performance of Tiger clearly shows that Jetstar is significantly outperforming Tiger at the leisure end,” Qantas chief executive Alan Joyce quips.
“We strongly believe the proposed acquisition will increase competition in the market to the benefit of Australian consumers. By partnering with Tiger Airways, we can use our expertise to leverage Tiger Australia’s low cost base and build a competitive and sustainable budget carrier. We are committed to maintaining the Tiger Australia business model and brand, and we look forward to growing the Tiger Airways business,” Virgin Australia chief executive John Borghetti counters.
An example case would be the Sydney-Melbourne route where Jetstar and Qantas have heightened capacity by 57% and 11% in FY13 first-half, respectively, while Virgin Australia only upped capacity by 3%. Had Tiger been a Virgin Australia subsidiary, the Brisbane-based carrier would have been able to respond to the market more effectively.
Image Courtesy of Virgin Australia
Image Courtesy of Virgin Australia
Internationally, Virgin Australia transported 7.7% more passengers during FY2012/13 first-half, with revenue soaring proportionately faster at 7.9% from A$551.7 million in FY11/12 first-half to A$595.4 million in FY12/13 first-half. Earnings before interest and tax (EBIT) at the unit surged by 9.9% to A$35.4 million, up from A$32.2 million in the prior fiscal period. Load factor decreased by 0.5% to 79.9% from 80.4% in the same period last fiscal year.
This robust result stems from the strong codeshare partnership with Singapore Airlines (SIA), which added 73 new codeshare destinations in the first 6 months of FY2012/13, such as Virgin Australia’s codeshare to Europe via Singapore from Adelaide, Perth and Darwin, with 24 more due to be added in the second half, including SIA codeshare flights to Europe from Sydney, Melbourne and Brisbane in the fiscal third-quarter.
As Virgin Australia has already set the platform for international expansion properly with a “capital-lite” model, with a 56.1% increase in interline and codeshare revenues which will rise further with the Sabre implementation, the future challenge facing its international unit lies in how to best serve Asian destinations without compromising its strengthening balance sheet and how to fund this growth.
With Qantas International highly unlikely to grow again before 2016 on the as-yet-firmed 787-9 Dreamliners, leveraging this strategic advantage created by its arch-rival could yield Virgin Australia significant profits such as deploying its yet-to-be-delivered A330-200s to Tokyo Haneda, Seoul, etc., while better serving North Asia and China by forging a codeshare partnership with Hong Kong-based Cathay Pacific Airways and its wholly-owned subsidiary Dragonair.
Indeed, Singapore Airlines is a 10% shareholder of Virgin Australia and is an important partner for Asian growth. There is no denial that it makes business sense for Virgin Australia to rely on Singapore Airlines and SilkAir to serve the Southeast Asia and Indian subcontinent via a strong origin and destination (O&D) hub for Indian traffic in Singapore, such as Coinbatore, Kochi, Thiruvananthapuram and Visakhapatnam in India; Bandung, Balikpapan, Lombok, Manado, Medan, Palembang, Pekanbaru and Solo in Indonesia that neither Cathay Pacific nor Dragonair serves in the medium term.
In terms of North Asian and Chinese network, though, Virgin Australia should forge a close pact with Cathay Pacific for a comprehensive network that features destinations such as Haikou, Sanya, Guilin, Hangzhou, Xi’an, Nanjing, Ningbo, Fuzhou and Qingdao in China, Busan, Taichung, Kaohsiung which SIA and SilkAir do not serve, in addition to the 3-4 hours time advantage Hong Kong has over Singapore on flights to Chinese destinations such as Beijing and Shanghai while having a roughly identical flight time from Australian ports.
Furthermore, Virgin Australia could feasibly co-ordinate with its sibling Virgin Atlantic, in which the United Kingdom-based Virgin Group has a 26% stake in Australia’s second-largest carrier, to take over the Hong Kong-Sydney leg of Virgin Atlantic’s flight. In doing so, not only could Virgin Atlantic avoid cannibalising its yields to fill up its last leg on the kangaroo route, a typical phenomenon given it is an end-of-point carrier, Virgin Australia could also gain more feeder traffic to its regional network and vice versa – providing more feeder traffic to its Hong Kong flight than the existing codeshare, thereby improving loads and yields in one fell swoop.
For Virgin Australia, this would be an attractive proposition for business travellers who will gain instant access to more Chinese and North Asian cities, while Cathay Pacific and Dragonair passengers could gain similar access to more than a dozen of smaller Australian cities with improved Dragonair feed.
Interestingly, this will bode well from a capacity perspective too as Virgin Australia’s new A330-200s, of which 1 will be received in FY2012/13 second-half and another 2 between June 2013 and June 2015, will be deployed internationally instead of domestically, thereby partially alleviating the overcapacity issue plaguing the domestic market.
Over the longer term, Virgin Australia could order 787-9s which are smaller than the A350s but are ideal for thin, long-haul routes to open up new destinations in Asia, China and India in particular, whose 20% fuel burn saving makes the previously economically unfeasible routes now workable. A maintenance and crew training partnership with Air New Zealand (ANZ), which owns 19.9% of Virgin Australia and is the 787-9 launch customer, or one with the 10% shareholder Abu Dhabi-based Etihad Airways, will slash the induction costs while minimising risks and possibly gaining early 787-9 delivery slots.
All in all, much remains to be done as Virgin Australia is still an ongoing project. Domestically it must continue to improve its products to differentiate itself from the competition and improve its yields, which currently includes rolling out the business class on its regional E190 fleet, equipping wireless in-flight entertainment on 80 aircraft before the end of 2013, new Cairns lounge and revamped lounges at Sydney and Melbourne, a new pier in Sydney and a new terminal in Canberra this March. The carrier is also going to introduce coast-to-coast A330 with 24 leather business class seats at a 60-inch seat pitch on the Brisbane-Perth route for the first time beginning 15 May 2013.
After all, continuously improving its product, as well as enhancing its Velocity frequent flyer programme (FFP) whose membership base grew by 500,000 to 3.5 million in addition to a better regional network which sees the entry of Virgin Australia into existing monopoly routes Brisbane-Moranbah and Brisbane-Bundaberg are the few means left to improve its domestic profitability in a market where business fares have slumped by 17.3% in February 2013 compared to a year ago and continued to bump along the bottom set in December 2011 which have never recovered since, according to the Bureau of Infrastructure, Transportation and Regional Economics (BITRE) figures. Restricted economy fares are not faring particularly well either, whose index, albeit recovering moderately since a February 2012 bottom of 63.5 and rose to 71.7 in February 2013, are still markedly lower than pre-May 2011 levels.
Factoring in Virgin Australia’s planned 5-7% domestic capacity growth in the FY12/13 second-half, it is apparent that driving the growth in high-yield traffic is paramount to mending its bottom line.
“We are very pleased with the increasing take up of Business Class, with passenger traffic in the Business Class cabin growing by 91.6% compared to the first half of financial year 2012,” Virgin Australia chief executive John Borghetti commented.
“Our new Sabre booking and check-in system will be key to driving future revenue growth. As a result of the new system, travel agents around the world now have far greater visibility of Virgin Australia, enabling them to book our flights with more ease using a system that aligns with global standards. In fact, we are already seeing the benefits of the system, with our proportion of bookings through the global distribution system (GDS) increasing five-fold since its launch in mid-January. It is also important to note that bookings through GDS channels typically have a 10% yield premium to average bookings.
“The Sabre system will accelerate our growth in the corporate, government and high yield markets. With the stabilisation of load factors following the change in our business model and further growth in higher yield markets, we anticipate improved RASK [revenue per available seat kilometre] performance going forward,” Borghetti said.
In conclusion, Virgin Australia has a strong foundation from which to grow and there are plenty of international expansion opportunities awaiting the carrier, which is the ultimate revenge for its chief executive John Borghetti, a former Qantas chief financial officer (CFO) when the board of directors of the flying kangaroo opted to promote then Jetstar chief executive Alan Joyce instead. With the game having already changed, the game is now on to deliver the benefits of the “Game Change” repositioning programme and successfully integrate and turn around the Tiger Airways Australia operation, while realising gains to the bottom line with A$60 million of cost reduction for FY2012/13, A$120 million for FY14 and A$200 million for FY15 after A$25 million of cost was taken out in the first-half.
Image Courtesy of JUBES747
Image Courtesy of JUBES747






 http://www.aspireaviation.com/2013/03/06/qantas-virgin-australia-face-new-industry-normal/

Is Qantas back on track?

Judging by its FY2012/13 first half performance, Qantas looks like it is back on track. The Australian flag carrier reported a net group profit of A$111 million (US$114 million), which is almost triple last year’s A$42 million. This was achieved in spite of the continuing show of red ink for its international operations, which one may even say was an impressive result considering the reduced losses of A$91 million from last year’s A$262 million.
Qantas chief executive Alan Joyce, pleased with the turnaround, said: “We are now beginning to realise the benefits of the tough decisions that we have made over the past 18 months.”
Aviation watchers are all too familiar with the restructuring programme that Joyce rolled out more than a year ago amidst concerns of the deepening losses suffered by Qantas’ international operations. Measures to improve the airline’s performance included reduced capital expenditure, product upgrading, route restructuring that would see an increased presence in Asia, and rationalisation of ground operations to eliminate redundant staff numbers through centralisation and outsourcing.
The most significant of those measures was the split of the parent airlines’ operations into separate domestic and international units under different management teams. That, one may concede, has produced positive results overall considering the improved performance of international operations although profits from domestic operations declined by more than 33% to A$218 million from A$328 million a year earlier.
Joyce explained the domestic performance as follows: “Clearly the Australian domestic market is highly competitive. We have seen elevated levels of capacity growth from competitors attempting to claim market share from Qantas Domestic.”
No skin off its nose, so it seemed. After all, Qantas still boasts a 65% share of the local market. But the flying kangaroo can expect increasing competition from its rivals, more Virgin Australia than Tiger Airways, noting how Virgin has only last year acquired 60% of Tiger with the intent to strengthen the competitive edge, which is still subject to regulatory approval from the Australian Competition and Consumer Commission (ACCC). Though Qantas continues to upgrade its cabin product, the competition for the short haul – as almost anywhere else in the world – is likely to be influenced mainly by price and scheduling. Tying up with Tiger’s parent Singapore Airlines (SIA), Virgin has hoped to provide better schedule meshing and more seamless international connections.
Image Courtesy of Phozographer
Image Courtesy of Phozographer
Internationally, Qantas’ improved performance may be partly attributed to the recovery of the global economy, albeit a slow and uncertain one, in line with improved results reported by most other airlines in the region. However, it remains a big challenge for Qantas to not lose passengers to rival airlines that include not just long-time competitor SIA but new ones from the Middle East such as Emirates Airline, Etihad Airways and Qatar Airways. Qantas reported a 4.3% increase in the number of passengers carried in December 2012 compared to that a year ago.
The game may be shifting in Qantas’ favour as the authorities prepare to formalise their approval of the partnership between Qantas and Emirates, opening up additional channels to Europe, the Middle East and Africa for Qantas customers through Emirates connections. In the meantime, Qantas has initiated plans to shift its hub for Europe-bound flights from Singapore to Dubai. The impact of the partnership could already be apparent in the second half results expected in August. Only then can it be ascertained if the airline is finally back on course, and, if so, the next question to ask is: Can it uphold the trend?
You need big moves to reverse deep losses. While many airlines react to the global financial crisis by trimming costs with reduced frills and reducing capacity and re-routing to match demand, and by banking on the expected recovery of the economy, the Qantas/Emirates alliance aims at changing travel patterns and preferences, thus redefining the competition, on the kangaroo route. The strategy aims at eliminating key rivalry on a reconstructed route. Clearly SIA and its home base Changi Airport will be largely affected by the shift though, lest one be too hasty in the assessment, not necessarily adversely if travellers still prefer to fly via Changi and if SIA and Changi can continue to attract them to stick with the tradition.
No doubt the Qantas/Emirates partnership will make a formidable competitor, but Qantas cannot assume its main rivals will stand on the sideline and do little else but watch passively. If Qantas is upgrading its cabin product, so are SIA and Cathay Pacific Airways. Qantas’ restructuring plan has identified Asia as the growth area, but this is also where these airlines and others such as Asiana Airlines, Japan Airlines and All Nippon Airways are the strongest.

Qantas has announced it would increase frequencies to Asian destinations, with Singapore serving as its hub for the region. In a supplementary move, Qantas continues to push the Jetstar brand across Asia, setting up base in Singapore, Japan, Vietnam and Hong Kong, pending local authority approval. Jetstar has proven to be a profitable budget venture in the Qantas stable, increasing revenue by some 12%. Already the largest low-cost carrier in the Asia/Pacific by revenue, Joyce said Jetstar would draw on “close partnerships with local market leaders.”

But if you wonder what happened to the much hyped proposal to set up a regional premium airline based in Asia, the idea is as good as dead. The failure to generate sufficient interest from potential partners in the proposal reflected the diffidence in either Qantas or the region or both then. Yet it may have been a blessing in disguise considering the uncertainty of the global economy that all but looked it would not spare Asia either. Besides, the proposal has outlived its promise, outdone by developments in the Qantas/Emirates relationships.
So, is Qantas finally back on track? The next six months will tell if the Qantas/Emirates partnership has made any difference, over and above the expected recovery in demand for seats and hopefully some stability in the fuel price.

Read Aspire Aviation‘s most in-depth & comprehensive analysis on the Australian market >>




http://www.aspireaviation.com/2013/03/08/is-qantas-back-on-track/ 

Is the premium economy trend finally catching on?

Is the premium economy trend finally catching on as Air Canada becomes the latest airline to announce its introduction as “a new class of travel”, starting with the Montreal-Paris non-stop route in July 2013. New, perhaps for the Canadian carrier, but not quite globally.
Eva Air of Taiwan was one of the first carriers to introduce the premium economy class, when it launched its operations in 1991. There was a limited number of seats, that boasted more legroom. Since then, a number of airlines have dabbled with the idea and more of them started to introduce an expanded “middle” class. This became almost a preogative during the global financial ciriss that took a toll on business and first class travel.
Many major airlines have started pushing the trend to catch downgraders and entice upgraders who are not quite ready to splash on frills. They include British Airways, Virgin Atlantic, Air France, United Airlines, American Airlines, Delta Air Lines, Cathay Pacific Airways, Japan Airlines, All Nippon Airways, Qantas and Air New Zealand.
There are noticeable exceptions. Singapore Airlines (SIA) introduced the class dubbed executive economy on non-stop flights between Singapore and Los Angeles but did away with it when it converted the flights to an all-business class configuration. The class was popular, but the prospect of higher yield in business ruled in its disfavour. After all, in good times SIA derived at least 40% of its revenue from its premium market. Since then the airline has insisted that it has no plans to revisit the concept anywhere in its network. Some analysts think it may be a mistake for SIA to not go with the flow as it continues to bank upon complete recovery of the business class traffic.
Image Courtesy of Chris Lofting
Noticeable too is the absence of premium economy on Emirates Airline, which may have prided itself as providing an economy class that is as good as any other airline’s premium economy. In the same way, one may ask: Do you fly legacy economy or budget business class?
Indeed, it is not what makes the premium economy better than the normal economy but by how much. The early model was not that much visibly different, and that probably explained why it was slow in catching on. Today, airlines such as Cathay Pacific and Qantas are putting much more into this in-between class to give it an exclusivity of its own. It used to sell mainly on wider seats with more recline and legroom, but the perks have been expanded to include a string of priorities at check-in, boarding and baggage delivery on arrival, more generous checked baggage allowances, an apparently more refined meal service on board, a wider screen for in-flight entertainment (IFE) system, brand-name amenity kits and higher frequent flyer mileage points.
However, as the name suggests, premium economy is more an economy than a business class product and, in spite of the effort of Cathay Pacific and the like, it still lacks a character of its own. This could explain the lukewarm attitude towards the product of airlines such as SIA and Emirates, which  probably prefer to focus their efforts on marketing a superior economy and at the same time be not detracted from the truly premium product of the upper classes. For the premium economy to sell, downgraders from business and upgraders from economy must be adequately tempted with visible advantages to make the trade-off vis-à-vis the cost, whether it is saving on the otherwise higher fare or paying the difference additionally for the added frills.
“We have a well-established policy that our goal is to segment the market. We want to sell the product we have onboard to passengers who are willing to pay for that. [Cathay will not] use a premium economy cabin as some overstore cabin rather than a truly different product,” Cathay Pacific head of product Alex McGowan said (“Cathay Pacific’s premium economy to improve profitability“, 24th Aug, 11).
But it may all be a case of nomenclature. The early days of the business class was but a marginal upgrade of the economy status. Swissair, the predecessor of Swiss International, swore it would not bow to the fad, believing there was no room for a three-class configuration. But it did in the end. Will today’s premium economy succeed in the same way? It depends on the strength of its exclusivity, but it is unlikely to evovle to the same degree as the business class which, for some airlines, has in fact replaced the first class product.
Quite on the contrary, carriers that susbcribe to the premium economy concept may be compelled to do even more for their business class to maintain an enviable difference.


http://www.aspireaviation.com/2013/03/12/is-the-premium-economy-trend-finally-catching-on/ 

Plunging Cathay profits: What went wrong?

With Cathay Pacific Airways, one of the world’s leading airlines, announcing an 83% plunge in annual profit, one must begin to wonder what went wrong.
Almost five years since the onset of the global economic crisis, the fortunes of the airlines can be best alluded to the unpredictable movements of the yo-yo. It was only at the end of last year that the International Air Transport Association (IATA) could with some confidence finally revise its profit forecasts upwards instead of downwards: from US$4.1 billion to US$6.1 billion for 2012, and from US$7.5 billion to US$8.4 billion for the current year.
Could Cathay be an exception to the rule? For all the hype about product improvement all round including the new Premium Economy class and a new regional business class, the Hong Kong-based airline posted a net profit of HK$916 million (US$118 million), down from HK$5.5 billion a year ago.
Cathay has attributed its poorer performance to a number of factors.
First, higher fuel costs. Cathay reported that throughout much of 2012, fuel prices were at sustained high levels and the Cathay Group’s fuel costs increased by 0.8% compared to 2011. What’s new anyway, when this should similarly affect all airlines across the industry? Yet, in spite of that, some airlines such as Japan Airlines (JAL) are reporting improved performances. The volatility of the fuel price has been an easy target to blame no matter what degree its impact is on performance. It may not apply to Cathay, but in fact the average jet fuel price had been falling from September to December 2012 before rising again.
What is more of a concern is the reason for the decline in the fuel price, as explained by IATA chief executive and director general Tony Tyler: “The reduction in fuel prices is a great thing for the airline industry but they are coming down because of concerns over world economic activity. If the world enters an economic slump, that will be even worse for the industry than the higher fuel price was on its own.”
Second, a drop in demand for corporate travel. This is a more cogent argument as the industry continues to be hard hit by the economic stagnation or slow recovery if at all it is happening, particularly in Europe and the United States. Cathay, which banks on its premium product, is naturally affected more than other airlines that thrive on the low-end traffic.
In a statement issued by the airline, Cathay Pacific chairman Christopher Pratt said: “Premium class yields were affected by travel restrictions imposed by corporations.
Again, this is not a new lesson gleaned only yesterday but widely recognised during the global financial crisis which all but favours cheaper alternatives. Cathay is not alone in this predicament; rivals such as Singapore Airlines (SIA) and Qantas face the same threat.
Cathay Pacific Boeing 777-300ER
Image Courtesy of Cathay Pacific
In a counter-move, Cathay introduced the premium economy class to retain downgraders and attract those who are prepared to pay a little more but not that much more to upgrade to enjoy the frills of an in-between class. It is tempting to conclude that this strategy – perhaps to the relief of SIA which has until now snubbed the idea – is not working judging by the results posted by Cathay, but its full impact is yet to be realised. If the global economy continues to weigh down, it may well prove to be Cathay’s lifeline.
That brings us to the third point as to what went wrong then. Cathay attributes it to increased competition. Pratt said: “An increasingly competitive environment added to the difficulties.” That may be true, but when an airline such as Cathay which is among the world’s most successful carriers resigns to that, it comes across as being somewhat less plausible and lame, and smacks of something amiss.
Competition is a given in this industry. So what has Cathay done or is doing to check the competition? To be fair, it has done much more than most airlines. It has rolled out new product improvements and improved its in-flight service. The airline is ranked consistently among the industry’s favourites, particularly its business class, by air travellers. By all account, its strategy should place it in the forefront of the competition, so what is missing that it should ascribe its falling performance to increased competition? If there’s such a thing as a success formula to suit different environments, has it got the equation not quite right?
Fourth, the weak cargo demand in major markets, particularly from Asia to Europe. No doubt this has affected Cathay’s overall profitability. If it is any consolation, close rival SIA is also similarly afflicted. There are no clear signs that the situation will improve substantially in the near term. In light of the weaker outlook, Cathay has cancelled an order for eight Boeing 777-200F freighters but instead placed an order for three Boeing 747-8F freighters which will carry 16% more revenue-producing freight than predecessor Boeing 747-400. Cathay Pacific chief executive John Slosar said the larger airplane would result in fuel savings for the revamped fleet.
Fifth, high operating costs, especially of the long haul routes that according to Pratt were dominated by “older, less fuel-efficient Boeing 747-400 and Airbus A340-300 aircraft”. Last year, the company announced plans to accelerate retirement of the less fuel-efficient 747-400 as it continues with the fleet upgrading programme for both airlines in its fold – Cathay and Dragonair. In January, Cathay ordered 10 Airbus A350-1000 and converted 16 of its existing order for A350-900 to the larger A350-1000. These 350-seaters will ply high-density routes which include non-stop flights to Europe and North America.
The future should look rosier. Slosar said: “This is an important strategic development for Cathay Pacific. The A350-1000 aircraft will bring us world-beating fuel efficiency.”
Last, incommensurate cost-cutting measures that include offering unpaid leave to crew and reducing capacity on some routes which unfortunately, according to Pratt, “were not enough to offset in full the effects of high fuel prices and weak revenues.”
And we have come one full circle. So what makes one airline more likely to succeed than another when almost every one of them alike ascribes its failed performance to the same factors?
Pratt said: “Our core strengths remain the same ever: a superb team, a strong international network, exceptional standards of customer service, a strong relationship with Air China and our position in Hong Kong. These will help to ensure the success of the Cathay Pacific Group in the long term.”
Sounds familiar, you may say, except for specific references applicable only to Cathay.


http://www.aspireaviation.com/2013/03/19/plunging-cathay-profits-what-went-wrong/