Airline Affairs

TAA is now faced with an aging fleet of DC- 9 and Boeing 727 aircraft. While there are considerable benefits to be had by operating a written-down fleet, there still comes a time when the overall maintenance burden overwhelms the operating savings to be gained by servicing a minimal debt. While the DC-9-30s are performing excellently, indeed TAA wish they had kept more of them, the 727s are nowadays requiring a heavier maintenance burden and can only be termed fuel guzzlers by comparison with alternative 150-seaters such as the MD-80 and the smaller 737-300. The FE dispute has now put much of the re-equipment programme on the back burner for the time being as TAA assess what long-term damage the December FE strike caused the airline.

What TAA is principally seeking is an entire fleet rollover, excluding the four A300s, from the one manufacturer, and the only company able to totally satisfy that requirement is McDonnell Douglas. We believe that TAA is primarily interested in the MD-83 and the MD-87 and is looking at a purchase of 16 and 14 respectively. The MD-83 is the long-range version of the MD-80 and can fly a max payload mission Sydney/Perth under any conditions with full reserves. Carrying around 150 passengers, the MD-83 is an ideal 727-200 replacement and burns around 30% less fuel per seat kilometre than the older Boeing. Additionally, second-hand 727-200s are in big demand these days and TAA would be assured of receiving a premium payback on their existing fleet.

The MD-87 on the other hand has just recently been launched by MDC and primarily is a competitor to the Boeing 737-300 and the eventual BAe 146-300. In TAA livery the MD-87 would be typically configured with around 110/115 seats though its greatest asset is its longer range and ability to operate out of relatively short strips. Austrian Airlines and Finnair are launch customers for the MD-87 and plan to put the type into operation in 1987.

The benefits to be had by TAA of operating a common fleet would additionally reduce overall operating costs by requiring a smaller spare inventory and a streamlined training and service organisation.

Qantas Wins Second Air Pacific Battle:

Qantas’ appointment to manage Fiji’s Air Pacific for three years had thwarted Ansett Airlines’ hopes for international carrier status in the medium term. One might say that Qantas was in a situation where it could not let Ansell win at any cost in order to keep the Melbourne-based carrier from gaining international status.

The victory for Qantas will however pay attractive dividends. Qantas will now be able to operate a myriad of previously unattainable routes through the Pacific that will allow it to capture much of the booming Circle Pacific market. Up till now, Qantas has really been only able to carry US passengers to Australia. As most US tourists wish also to visit New Zealand and the Pacific, Qantas was at a distinct disadvantage in not being able to put together comprehensive tourist packages that offered the flexibility and variety that the US market demands.

Qantas will find good use for their Boeing 767 aircraft in this region while a smaller type, mooted as the 737-700, will also probably be required as growth solidifies in the coming year and Qantas can feel more confident about a second term as guardian of Air Pacific’s destiny.

The loss of Air Pacific to Qantas was a morale blow to Ansell, who saw their first real opportunity to break free from the restrictive Australian government legislation they serve under. By winning Air Pacific, Ansett could have then opened up a route structure throughout the Pacific in addition to using carriage agreements with to established international carriers pioneer an international route network. Negotiations had taken place with both United Airlines and British Caledonian to this end with only Ansell winning Air Pacific as being the final requirement for a firm agreement.

Meanwhile Air Pacific has leased from Qantas a Boeing 747 which it will operate a four times weekly round trip between Nadi and Sydney replacing the present four Qantas flights. Qantas will lease seats on each of the four flights, thus effectively reversing the previous seat-leasing arrangement between the two airlines on the route. While the new flights operate under joint Air Pacific/Qantas flight numbers, they are actually Air Pacific flights and in themselves will generate a substantial new revenue basis for the Fiji carrier. The Sydney-Nadi market currently produces around 120,000 passengers a year for Qantas and Air Pacific. Qantas is also going to great lengths to refute misleading media claims that they have inherited Air Pacific’s accumulated debts. Qantas is merely providing management expertise and has not ‘taken over’ the airline.

The Air Pacific 747 flights will be crewed initially by Qantas pilots and cabin attendants, but these functions will be taken over by Air Pacific’s own staff as 747 training is completed. Air Pacific’s pilots training for the 747 are already licensed to fly DC-1Os, which operate between Nadi and Honolulu. Their retraining to Qantas 747 standards will be provided by Qantas on simulators in Sydney, at the Qantas Jet Base where cabin attendant training will also be undertaken.

Air Pacific’s leased Boeing 747 is to be repainted in the airline’s own colours by August, and at that time will be reconfigured to accommodate passenger growth.

Between Melbourne and Nadi, Qantas is now operating three 747 flights a week as part of the new through flights to the U.S.A., servicing Honolulu and Los Angeles with direct connections at Honolulu for San Francisco and Vancouver.

Air Pacific will maintain a presence in the Melbourne/Fiji market by leasing seats on each Melbourne/Nadi return sector on these flights.

The Melbourne/Nadi segment of the flights will carry joint Qantas/Air Pacific flight numbers. Beyond Fiji, the new flights to the U.S.A. are Qantas services exclusively. However, these flights, providing additional capacity between Fiji and the key mainland U.S.A. market at Los Angeles, will be of great benefit to Fiji’s tourist industry.

Backed up by Qantas’ large marketing organisation throughout North America, the new Los Angeles-Nadi link increases the opportunity to feed more American tourists into Fiji both as a destination and as a stopover.

For Qantas, the new services via Nadi further strengthen the Australian carrier’s leadership on the Pacific, in terms of frequency and destination. The network of points served on Pacific Australia routes direct from North America is now more extensive than that of any other airline.

In the Melbourne market, Qantas can also offer more direct flights both to Fiji and the U. S. A. Air Pacific will continue to be the direct operator between Brisbane and Nadi with four Boeing 737 flights a week.

Qantas wants to greatly expand its Asian and Pacific area of operations and to increase the frequency of service; this no doubt could prove a requirement for additional Boeing 767s to complement the six already on order. With the growth in passenger uplift in the region of 20% for 1984 as against 1983, it is certain that Qantas will shortly have to look at additional capacity in order to meet the demands of its excellent market comeback since the bleak days of 1982 and ’83.

Virgin for Australia?

Virgin Atlantic is hoping to shortly make a formal application to operate low-cost services to Australia. The carrier, which operates entirely wet-leased equipment, had planned to operate a Boeing 747 between London/Gatwick to Australia via the Falkland Islands. Recent approval for British Airways to operate military charters on a scheduled basis to the Falklands has all but scuttled this proposal. Virgin Atlantic, which is owned and headed by 34-year-old Richard Branson of Virgin Records fame, has caused a stir on the North Atlantic where it operates a low-cost service similar to that of People Express with the exception that passenger service is to normal airline standards. Virgin Atlantic has also allowed a number of performers free travel in exchange for live entertainment aboard flights en route to their destination. Since this service commenced in 1984 a number of musicians, jugglers, comedians and magic acts have worked their way across the Atlantic in what must be a first for civil air transport.

BA Recovery Strengthens:

Following their turn round in 1983/84, British Airways appears nowadays to be in the best of health as the carrier heads towards privatisation which was due as we went to press. Half-year figures released in January indicated that BA had made a pre-tax profit of nearly $A300m which was 26% up on the same period the previous year.

Results for the six month period highlighted a growth rate on passenger uplift for the Kangaroo Route of 14% and a 66% revenue load factor. The Australasia route was also the second strongest in passenger growth after South America. Total BA Revenue Tonne Kilometres (RTK) was up 20% overall for an operating load factor of 69%.

Market Growth Providing East West With Significant Capacity Problem

Perhaps it’s the problem that every airline would like, but for Sydney-based East West, the perceived lack of capacity in the near future is causing problems that are creating a true Catch-22 situation for the airline. The problem is that EWA is naturally reluctant to invest in new jet equipment until the full results of the Government’s enquiry into the Two Airline policy is known. As most industry observers feel that little will be released till the end of this year, EWA may have to wait well into 1986 before being able to project the exact type of aircraft it will require in the years ahead.

Presently operated by EWA are four Fokker F28-4000s of 72-passenger capacity and seven F27-500s of 48-passenger configuration. So rapid is EWA’s growth (30% in 83/84, 37% targeted for 84/85) that they decided last September to retain their final trade-in on the new F27s that were ordered by Brian Greyback in 1983. Aircraft presently under investigation are the Fokker 100, the Boeing 737-200 and the BAe 146-200. Also of interest, though thought to be just a little too big, are the 737- 300, 146-300 and the MD-87.

While EWA needs to some extent to await the outcome of the DofA enquiry, it may well be forced into a situation of having to order earlier so that it has the required capacity in the years ahead. Fokker will no doubt be gunning hard as the thought of a rival capturing EWA after all these years would be depressing to say the least for the Dutch manufacturer. Fokker in all likelihood will offer an extremely favourable rollover deal on the entire EWA fleet, offering both F100s and F50s in a package deal. The values of used F2Bs and F27s are presently at record levels and no doubt EWA could see its current fleet of young, but technically mature, aircraft back traded on extremely attractive terms.

TAA Back the SA Mangalore Fly-In:

TAA has signed a sponsorship agreement, said to be valued at more than $50,000, with the Sports Aircraft Association of Australia to underwrite the annual Mangalore SAM fly-in. The agreement runs for three years and specifically excludes Ansett aircraft from serving or appearing at the air show. Ansett in the past has been a big supporter of Mangalore and has run several profitable charters to the event from as far away as Adelaide and Brisbane. At times it was not uncommon to see up to four Ansett aircraft, F27s and Boeing 737s on the Mangalore ramp at any one time earning revenue on an otherwise slow day (Easter Sunday) and gaining much in the way of public exposure. . TAA no doubt will take up the nettle and operate its own charters using DC-9 aircraft.

Mangalore will be held over the Easter weekend this April and if you have the slightest interest in home builts, ultralights, warbirds, vintage aircraft or just GA in general, then you won’t want to miss it.

New Name, New Plane, New Image For Ansett’s West Australian Offspring:

Airlines of Western Australia, which had undertaken an extensive livery change only in 1982, has been renamed Ansett W. A. with a new image directly in line with the Southern Cross scheme of Ansett Airlines.

As a response to the liberalisation of the intrastate trunk operations within West Australia and the strong competition now being afforded by Skywest/East West, the carrier will progressively update its existing Fokker F28 jet fleet to a higher standard than previously equipped. The F28-1000 will see seating capacity cut from 60 to 55 while the – 4000 will have a reduction in capacity from 74 to 69. Most overseas airlines operate their F28-4000s as 85-seaters so the extent of legroom available on the Ansett W. A. aircraft will be a boon to the essentially large-frame West Australians travelling to and from the northern mining and exploration centres. Additionally, new seats will equip the entire fleet which will also allow additional shin room, feature ‘ears’ in the headrest to ensure greater comfort for dozing passengers while the centre seat is now convertible, enabling it to be folded down when not occupied. All Ansett W. A. aircraft will be equipped with the Atlas galley system which brings their catering capabilities in line with the Ansett long haul fleet, providing a higher standard of hot and cold meals than was previously possible.

The F28s will also be reconfigured with larger overhead stowage bins while the new seats allow the stowage of a briefcase easier beneath the seat frame. Ansett W. A. takes delivery of its first BAe 146-200 in April and certainly looks set for a hard fight against Skywest/East-West in the years ahead.

Longer Legs for Qantas 747SP:

Qantas recently moved to further increase the payload/range of one of its 747SPs in an effort to further enhance its non-stop performance on the ultra-long range Sydney/LA route. It was not lost on flight operations that the first of their new 747-300s was equipped with Rolls Royce RB211-524D4 Upgrade engines which burn about 2/3% less fuel at cruise than the standard D4 as used on the SPs. As the 747-300 did not require extra payload/range and the trans-Pacific SP could always use the extra economy on the often marginal westbound route (requiring a fuel stop at Nadi on occasions), Qantas decided to fit the engines from VH-EBT, the -300 to EAA. According to Qantas spokesmen this is now worth several hundred miles extra ranges in the severest circumstances and in practical terms reduces the incidence of tech. stops to virtually nil.

The commercial advantage this poses for Qantas is obvious as the SPs used by PanAm are powered by less powerful Pratt & Whitney engines resulting in the PanAm aircraft cruising at a slightly lower altitude and burning as much as 10% more fuel per hour than the Qantas SP. It is not known whether or not the second Qantas SP will be so modified as this aircraft primarily serves the Tasman and will remain tasked with this role till the first 767s become operational around August this year.

Lufthansa Log Brighter 1984, Retire Last 707:

Lufthansa reported a growth in passenger uplift of nearly 7% in 1984 with an increase in freight traffic of 16%. During 1984 the airline boosted sales at twice the available capacity improving revenue load factor by 4% to 67%.

Meanwhile, Lufthansa retired their last Boeing 707 on New Year’s Eve. This ended 25 years of experience with the type which did much to pioneer Lufthansa’s international route network during the sixties. Lufthansa liked to set records with its 707s though one aircraft that ultimately managed a different type of record was the D-ABUA which upon its retirement in mid-1984 had logged some 75,000 flying hours and 19,000 cycles (believed to be a Boeing record) over a route distance of more than 55 million kilometres – equivalent to the distance from Earth to Mars!

Most of the 707 sectors have been handed over to the Airbus A310 which with a two-man EFIS cockpit burns 35% less fuel per tonne-kilometre and has a noise footprint one twentieth that of the old 707.

Braniff Staves off Bankruptcy for the Second Time:

After having declared bankruptcy in May 1982 and having reentered the airline field in March 1984, Braniff has managed to stave off a second bankruptcy last year. From November 1st, 1984 Braniff emerged once more a new, and smaller operator than it was before. Gone are 20 of the airline’s 30 Boeing 727-200s while staff will again be cut back to try to make the carrier profitable. Braniff never got within 10% of its operating breakeven load factor at any time in the period between March and October 1984 following cutthroat competition from American Airlines who matched Braniff dollar for dollar on its discounted business class style service from its Dallas/Fort Worth hub. America stood to lose heavily if Braniff succeeded and consequently fought back to retain its market share. Braniff has also sold a number of slots, abandoned new routes and airport facilities unwanted in the latest reshuffle and moved to Houston Airport. The carrier will now battle through the northern winter and contemplate restructuring back to a 30-aircraft fleet only when load factors exceed 60% in all sectors.

Outstanding Result Marks 20th Consecutive Profit for Thai

Thai International has announced its largest-ever pre-tax profit of $111 million for the financial year ending September 30, 1984, an improvement of almost $80 million over the same period in the previous year. The profit marks the 20th consecutive year of profitability for the Bangkok-based carrier – a rare achievement in the international airline industry.

Total traffic carried measured in revenue ton-kilometres was 1195. 4 million – an increase of 8. 7 per cent compared with the previous year, with freight traffic developing even stronger from 317 million freight ton-· kilometres to 378 million, or an increase of 19. 3 per cent. The recorded system-wide load factor was 65. 6 per cent and the number of passengers carried was up by 5. 2 per cent to 2,635,392.