Airline Affairs

For Australians, the deal will ultimately offer even greater cut-throat competition on the Pacific as the world’s biggest airline wades in to carve up the local market with inaugural discounts that United hope will capture it a far higher relative market share than was ever enjoyed by PanAm.

The purchase now has to clear the Department of Transportation (USA) and then President Reagan himself before full approval can be given. Additionally United has also to negotiate with the various nations concerned (Australia, Japan, Hong Kong. Singapore, Taiwan, Korea, Thailand and the Phillippines) to gain equal entry approval to the new markets. United also may, in time, exercise many of the long-dormant routes that PanAm has not flown in recent years as its market base strengthens.

Either way the Pacific basin will never be the same again in terms of international air transportation.

Will Taa Retain Central Queensland Routes:

One of the surprise airline moves of 1983/84 was the announcement by TAA that they were going to bid fiercely for the right to serve the traditionally sparse central Queensland market with aged F27 aircraft. Indeed TAA pledged that they would not only service their agreement with the Queensland government for seven years but would do so even if the dual federal/state subsidies on the routes were cut. On top of that the carrier also agreed to introduce new advanced technology cabin class airliners to the routes that most observers acknowledge do not generate much on-carriage or freight revenue.

Air Queensland at one stage wanted to move its smaller Metroliners onto the routes but was vetoed aggressively by both the Queensland government and local travellers who preferred the larger, though more costly to operate Friendships. TAA is now in a difficult position as On March 30th the Federal government announced that it was to withdraw its annual $1. 35m subsidy on the routes. At present time the Queensland government had not announced whether or not it would do the same though in the past the State government has gone on the record as stating that it would not carry the routes without assistance from Canberra.

Meanwhile, TAA is progressing towards a decision on which aircraft will wear its colours On the outback services. Under study is the 36-seat Saab Fairchild 340, the 36-seat DHC Dash 8, Embraer’s 30-seat Brasilia and BAe’s 19-seat Jetstream. In view of the capacity requirements and the need for enhanced frequency as an aid to generating more traffic one TAA executive commented “that the smaller aircraft looks the best option at this Stage”.

While this may brings smiles to British Aerospace salesmen it might also be worth remembering that TAA could, if it is in a mean enough mood commercially, to withdraw its services as being unjustifiedly uneconomic to operate without the previously agreed to government subsidies. This would then return TAA to an all-jet fleet and perhaps leave the struggling routes again to Air Queensland with their new and fuel-efficient ATR42s. The outcome will be interesting to say the least.

 East West Go International:

The enterprising team heading East-West Airlines are about to launch themselves on the international charter market. EWA has applied to the DolA to operate one and possibly two 747 charters into Australia each week commencing this October and operating for a minimum of three years.

EWA will operate the charters into the major geographic entry points Perth, Darwin, Cairns and Brisbane. Charters will hub out of Amsterdam from Europe and Guam for US and Japanese services. While the long haul carriers have not been named yet it is believed that either KLM or Martinair will handle the European side of the operation.

East West are targeting their market at the Visiting Friends and Relatives (VFR) and tourist package market at all-inclusive prices better than those presently available on the international market. While the North American and European markets offered great potential, an East-West spokesman confirmed that Japan offered the greatest overall area for growth. It is expected that full approval to operate the services will be given by late June.

Ansett See Need for a 75-Seat Jet:

With the successful introduction to service of Ansett WA BAe 146-200s in Western Australia, the airline is now eyeing opportunities for productively exploiting the jets on the Eastern seaboard. Ansett presently operates 100-seat 737s, 150-seat 727s and 210-seat 767s while its subsidiaries fly the 55 and 69-seat F28s. The 146-200, which can be configured for up to 107 passengers is pleasantly equipped in Ansett WA service for only 75 passengers in what is truly a Business Class layout. Seats are 1 1/2 inches wider than those found on the 737/727s while the centre seat converts to a table, when not occupied. The seats themselves are ergonomically designed and are set at 34 and 35-inch pitch.

As excellent as this is, most Melbourne-based Ansett marketing executives are now considering the advantage this would give Ansett on the closely fought Eastern seaboard routes in the years ahead. Primarily, the aircraft, for which Ansett holds 6 options, would be used on Tasmanian and Queensland sectors in place of 737s where loadings were insufficient to sustain the larger jet. Ansett feel that the better standard of accommodation and perhaps added frequency would provide them with a superior market share. The company is also eyeing the -200 Freighter version in addition to the stretched -300 which can accommodate up to 120 passengers in standard configuration.

British Airways Commence Major Expansion Programme:

Shrugging off the cold chill of economic deficits a revitalised and money-making BA is about to launch into a new era of market expansion. During April the carrier initiated three new services to the USA, Tampa, Orlando and Pittsburgh and commenced services to South America. To support the latter services BA has acquired two further Tristar 500s, from Air Lanka, to take their total Tristar fleet to 19 aircraft. The long-range Tristar 500s will be capable of flying nonstop on the London/Rio sector and the type will also be used extensively through South America. BA have also ordered two additional Boeing 757s and in a move related to the Kangaroo Route will introduce a 14th crewmember aboard 747 flights.

 Declining Fuel Prices a Major Boost for Airlines:

Following the savage price hikes in aviation fuel in 1973 and again in 1979 it is nice to record that prices have in most areas declined in real terms (adjusted for inflation) by as much as 50% since 1981. The recession has been the primary catalyst for the decline, which ironically to some extent was a product of the mammoth 1979 fuel hikes. Aviation Week reports that for US operators, a 1c a gallon drop in price represents a further industry-wide saving of around $140m. This has over the past three years enabled many marginal operators to remain viable as fuel, expressed as a component of total airline operating expenditure, declined from a peak in 1981 of 31% to as low as 23% for the first quarter of 1985.

Australian fuel prices continually come under greater taxation pressure than they do in the US though basically the cost of avtur and avgas has remained constant in real terms. The biggest problem nowadays, which largely affects Qantas, is that as fuel is paid for overseas in US dollars a 10% swing can see a mammoth increase occurring in fuel costs that is largely beyond the control of the operator. Tankering is nowadays used by most international carriers to make the most of fuel at cheaper prices even though extra fuel has to be burnt to transport it in the first place. With prices for a gallon of avtur ranging from as low as 78c in the USA to as high as $1. 80 in Africa and certain parts of the Middle East and South America it is a prudent airline that plans ahead in the fuel price war.

TAA Cools Its Relationship With East West on Competitive Routes:

Inevitably as day turns to night, TAA has begun to cool its long-standing relationship with East West where that carrier flies on a competitive basis. Such ports are Canberra, Devonport, Hobart and Coolangatta. TAA has denied East West baggage and ground handling services in these ports which as a result has made EWA resort to kerbside baggage check-in at Canberra.

Kerbside check-in is a First Class service in the USA and is shortly being introduced by Ansett at selected major terminals. While the chills of a Canberra winter may dim the glow of such an alternative one benefit to the consumer is that there are no baggage weighing facilities. Coolangatta, Hobart and Devonport check-in will be undertaken in the terminal in a special area set aside for EWA by the DolA.

East West have also applied for a specialised route licence to serve the Canberra-Melbourne route. This will be the first time the Sydney-based carrier has taken on the majors on a direct non-stop trunk type route. Both TAA and Ansett have now to take up the options of increasing their own frequencies on that sector il it can be proved by EWA to the Department that the requirement is there for a viable alternative. As the majors currently split this route to some extent their remains the possibility that they would simply reinstate their own parallel services to ensure that EWA is kept from entering the market. On the other hand if EWA should win DolA approval then it will certainly become a test case for EWA direct entry onto much of the remaining trunk route which is something that the present Two Airline Policy is certainly not equipped to handle.

Jal Take Business Class One Step Further:

The demand for business class seats aboard JAL’s popular non-stop Tokyo/ New York services is now so great that the carrier has introduced a number of peak flights that completely do away with economy class. Configured in first and business class only, the 747s operate on the peak weekend sectors with yield per seat now rising by as much as 100% compared with a typical JAL 747 flight. Previously JAL had been operating with 160 business class seats, already an industry record, and will now push this to well past 220 for the new services.

 East West Growth Continues:

East West Airlines certainly is maintaining the pace in terms of growth. Figures released for April 1985 against April 1984 indicate a growth in passenger uplift of 44%. This figure has been adjusted for the effects of an EWA pilot strike which affected some services in April last year. Preliminary estimates as we went to press indicate that the March quarter recorded growth of 49% system-wide compared with the same period in 1984.

EWA has yet to get the official go-ahead from Canberra to import an additional F28-4000 and a single Boeing 737-200. The airline was hoping to have both aircraft in service by Christmas in order to cope with the continuing growth. Meanwhile sister airline, Skywest is evaluating the Embraer Brasilia as a 30-seat high-speed complement to their 19-seat Jetstreams in addition to the Dornier 228 for possible use on the Perth Rottnest Island route and as a replacement for Bandeirante and Twin Otter aircraft.

 Qantas One Stop to London at Last:

Regular Kangaroo Route travellers will be pleased to learn that Qantas will be initiating a one stop Sydney/London service around May next year. To avoid the limitations set by curfews at both Sydney and Heathrow the carrier will alter its departure times to ensure that the service takes no longer than 21 hours from port to port. This will effectively shave three to four hours off the present journey time, something that should see Qantas boosting yet again its availability for its popular Business Class. To service the route Qantas will be using only 747-300s which will refuel at Singapore to continue the hubbing system that Qantas has successfully exploited at the giant Changi airport.

The airline also hopes to begin using its 767ER aircraft on a Canberra/Singapore Service from late next year. This would hub into Singapore for onwards connections on regular Qantas 747 flights.

Overnight Parcels a Giant Industry in the US:

It is now estimated that the overnight parcel business in the United States for 1985 will exceed six billion dollars turnover. This massive turnover, which barely existed ten years ago, is shared by a number of companies that between them operate a fleet of more than 200 aircraft, half of which are jets.

Federal Express is still the market leader with more than 60 jets in its fleet shifting around half a million packages nightly throughout the USA. Founded initially with a fleet of Dassault Falcon 20s, the FedEx inventory now boasts DC-10s, Boeing 727s and the new Cessna Caravan for specialised service to smaller and previously unserviced ports. Emery Air Freight has a fleet of 67 aircraft, many of them being DC-8 jets which also support a growing international operation. A boon for the small package market was deregulation. This ultimately reduced the number of ports being served by scheduled airlines in addition to dumping a large number of older, but useful, jetliners onto the second-hand market when the effects of deregulation combined with the 1980 fuel hike forced major airlines to sell excess equipment in order to remain solvent. The flooding of the market with used jets, particularly 727-100s, allowed freight forwarders the opportunity to build heavy-lift jet fleets at minimal cost in a period where the high-priority small package industry was growing rapidly. If timing is the linchpin of business success then the small package industry was spot on time in a nation where population distribution allowed such an industry to operate literally by the text book.

Taa Snaps up Queensland Regional:

In a lightning raid, TAA Chairman Neil Smith seemingly caught Ansett off guard and won total control of Air Queensland.

Ansett already owned 19. 4% of the company’s shares, and had aircraft leasing. commercial, engineering and ground handling agreements with the regional carrier which secured an estimated $8m annually in passenger on-carriage for Ansett.

In the course of a few days, TAA made an offer of $1. 25 for the airline’s shares, Ansett raised the bidding to $1. 50, and TAA matched the Ansett offer. The TAA matching offer was recommended by the Air Queensland Board, and taken up by a majority of the shareholding before Ansett ever formalised the $1. 50 offer to shareholders. It is understood that Ansett final- ly conceded defeat by hand-delivering its shares around the corner to TAA’s Head Office in Melbourne.

There have been no sudden changes. Under existing agreements, Ansett still controls Air Queensland’s reservations and most of its ground handling, but TAA expects to take up the agreements when they expire, and ultimately to benefit from the passenger and freight on-carriage.

TAA have declared that Air Queensland will function as a separate airline, with management, operational and engineering arrangements largely undisturbed. The airline’s present fleet comprises four DC-3’s, five Twin Otters, four Fokker Friendships, three Cessnas and a Nomad. Delivery of four French/Italian ATR-42’s starts next May, and options are held on another three.

Of note though is the future of Sunstate Airlines, the supplemental carrier TAA sponsored to compete with Air Queensland when it was under the Ansett wing. On some of Queensland’s main regional routes, Air Queensland and Sunstate are in straight competition, and airline statistics show that neither carrier is picking up profit-making load factors.

Continental Welcomes Back the Pub:

Continental have introduced their popular Pub service to all their South Pacific flights. The Pub is a special area just aft of First Class and is like a cocktail lounge in appearance. The area can accommodate up to 30 passengers and includes seating for 10 in specially designed sofas and bar stools. The Pub is open to all passengers and has been extremely popular on Continental’s US domestic DC-10 sectors for some time.

Domestic Airline Traffic Surges in Recent Months:

Australian domestic airline traffic has appeared to surge since Easter. Both TAA and Ansett report growth of around 10% for the Easter period and to some extent this has not dropped off as much as it has in previous years. The airlines point to an increase of marked proportions in bookings for Australian holidays while business traffic has also improved markedly in the past quarter. Both carriers confirmed that if this growth. continues then they could have a lack of capacity by the end of next year.

Meanwhile, international carriers have reported a slight decline in interest for overseas holiday packages, particularly to the USA where the ground component of a holiday has risen by more than 40% since January alone. Most trips are booked months ahead though, so a flow-on effect should not be fully apparent till later this year, then hopefully our dollar will be sufficiently strong to regain the status quo in domestic/offshore leisure travel. Qantas are also reporting a considerable increase in inbound tourist traffic and are looking at an overall increase in traffic for this financial year in the region of 13%.

 Record Profits at British Airways:

British Airways has reported a record $A540 million operating profit in the financial year ended last March 31.

This unaudited result was 13 per cent up on the previous year. Turnover rose 16 per cent to $A5300 million and profit before interest and taxation was $A570 million.

The nine weekly 747 flights from London to Australia operated at an undisclosed profit. The British Airways chairman, Lord King. said that in the three years since March 1982, the airline had eliminated its state of technical bankruptcy, re-established a surplus on capital account and had reduced debt from more than £1000 million to less than £650 million.

During the year, borrowings of £330 million were repaid and at March 31, outstanding borrowings totalled £647 million. The value of reserves increased from £126 million to £319 million, improving the debt/equity ratio from 88/ 12 a year ago to 67/33.

Traffic growth in the year was more than 12 per cent, compared with the International Air Transport (IATA) average of eight per cent and less than six per cent for major European carriers. Lord King said only two other airlines – United and America profits anywhere near those of British Airways, and both these carriers were much larger.

He said British Airways would soon need more capacity and although higher utilisation had allowed the airline to meet demand, it would soon need to consider ordering new aircraft, particularly Boeing 747s.

The Boeing 757 fleet would probably be expanded at the expense of Boeing 737s because of the 757’s efficiency which Lord King described as “a legend in its time. ” British Airways would be in a position shortly to order Rolls Royce RB211-D4 engines to meet the competitive challenge of other airlines flying non-stop sectors such as London-Hong Kong and London-Tokyo.

Daks Soldier on in a Sea of Black Ink:

“They may be old but in the right environment they are still a great money earner,” stated John Hardy of Darwin-based Air North. John was referring to his two DC-3s which are performing admirably and turning into real money earners. Each of the two Dakotas, VH- MMA and CAN are logging around 700 hours per annum in support of a wide range of specialist charters and RPT operations. The older of the two aircraft, in terms of hours flown, is MMA which has seen 65,000 hours flown in its long history: CAN on the other hand is still a filly with barely 15,000 hours to date. “When you consider that even with a full refurbishment, each aircraft cost us only around $150,000, for a 32-passenger airliner, then that is a minimal amount to have to finance and support in terms of repayments compared with comparative modern aircraft of similar performance. We want to make a profit, not support a bank,” stated John North. Air North commenced operations in 1978 under the name of Air Charter Operations. In 1981 the small organisation commenced scheduled services, acquired the DC-3s and now looks set to log around 8,000 hours in 1985 alone. Apart from the two DC-3s, Air North also operate a mixed fleet of Cessna 404, 402s and 310s, an Islander and a King Air 200.

A Little Light at the End of the Tunnel on De-parallelling Schedules:

The curse of the Australian domestic airline system – parallel scheduling. is at last slowly breaking down albeit at the expense of choice. Over the past year both TAA and Ansett have rationalised quite a few schedules to ensure that load factors are kept high and unnecessary competition does not stifle their eventual capability of servicing a port.

Some examples are Canberra/Melbourne. Both airlines formerly operated early morning flights with often marginal load factors. Nowadays each carrier takes his turn with the operating aircraft usually gaining a very healthy load factor as a result. Other routes that have been rationalised are Brisbane/Mt Isa, Perth/ Melbourne red eye, the central Australia Adelaide/Alice/Darwin run with the final sector rationalised and Darwin/Brisbane services.

The other point that comes to note once you live outside either Sydney or Melbourne is the amount of rubbing that takes place in Australia. Most flights out of Tasmania have to hub into Melbourne for ongoing ports while Canberra and Brisbane residents also have to hub via Sydney on most occasions when travelling beyond that port. Perhaps food for thought for those who are seriously pushing the 90/100-seat airliner for an increase in potential non-stop services between the lesser ports?

Asia/Pacific Air Cargo Market Soon to Be World’s Busiest:

Singapore Airlines believes that the Asia/ Pacific basin will soon become the world’s busiest in terms of air freight. Internationally. air cargo is growing at around 15% per annum while in Asia the figure is well beyond 20%. Both SIA and Qantas have experienced dramatic growth in air freight over the past four years while nowadays no carrier can afford to ignore air freight as they did during the early seventies. Use of air cargo over sea freight provides benefits in a reduced stock inventory. reduced warehousing costs, lower insurance premiums, reduced lead time on delivery and better overall inventory stock management.

Another Queensland Regional Bites the Dust:

In early May Coddair Airlines, the Brisbane-based supplemental carrier, went into provisional liquidation. Coddair was the latest of a long line of regional airlines to run into trouble on the thin pickings left behind when Ansett dropped its routes West of Brisbane and Rockhampton. Other operators who have either failed on the services or abandoned them as non-viable, are Countryair, Nationwide, Burnett Airways, Bush Pilots (now Air Queensland), and some small local service carriers.

The routes have long been dogged by the problems of small centres of population, zero or negative population growth, long distances, and increasingly efficient and economical surface transport.

Air Queensland withdrew from the routes in favour of Coddair when the Commonwealth subsidy was withdrawn two years ago. .

Air Transport Study Underlines Exclusivity of Air Travel:

The Bureau of Transport Economics has released a report that indicates that a small minority of Australia’s population use the airline system. The report indicated that only 0. 5%, or five people per thousand, fly regularly. The report also concluded that while the majority of TAA and Ansett passengers were on business, more than three-quarters of East West’s passenger uplift were on holiday or leisure-related activities. An East West spokesman stated that this tends to confirm EWA’s market- ing theory that there is a large untapped market in Australia for domestic air travel.

Air New Zealand Orders Additional 737s:

In a master stroke of Boeing marketing. Air New Zealand has signed for 6 new Boeing 737-200 jets for delivery during the first quarter of next year. ANZ already operate 10 early-build 737s and will backtrace some of these aircraft on the new jets.

The deal represents a master stroke of salesmanship from Boeing as the Seattle company is believed to have made ANZ a deal truly too good to refuse on the relatively outdated aircraft. Air New Zealand were also looking at the BAe 146, the MD-87, A320 and Fokker 100. By getting ANZ back into the Boe- ing 737, Boeing effectively shut the door on any of its rivals getting a toe hold in the New Zealand short haul market. This latest order brings to 25 the number of Boeing aircraft purchased by ANZ and its domestic sector forerunner, NAC since 1967.

 Senior Management Changes in Qantas:

The Chief Executive at Qantas, Ron Yates, has announced a number of senior management changes to the Corporate Planning, Marketing, and Information Systems Branches of the airline. This follows the recent appointment of John F. Ward, 39, formerly General Manager Marketing, to the position of Deputy Chief Executive. Mr Yates said the appointments would provide further develop- ment opportunities for a number of executives and assist with succession planning within the organisation.

As Deputy Chief Executive, Mr Ward will assist Mr Yates in the day-to-day management of the company with specific responsibilities for Corporate Planning, Marketing and Information Systems.

Meanwhile Peter Stainlay, 35, has been appointed General Manager Marketing. Mr Stainlay joined the Company as a Junior Commercial Trainee in 1968 and during his career has held a number of senior commercial and planning positions including Manager Indonesia and Director of Marketing Planning.

New Name in Pacific Skies:

A regional Pacific airline carrying the national flag of American Samoa became airborne during February with its first flight from Pago Pago to Honolulu. Samoa Air will initially operate two nights a week on the route using a Boeing 707 aircraft.

The aircraft was purchased from charter operator Aero Filipinas and while it was delivered to Pago Pago last September, it took until February for Samoa Air to receive all necessary international clearances to begin services. The Boeing 707, which is configured as 16 First class and 143 Economy, has been fully refurbished and given a new livery. The aircraft is currently operating under a dispensation from the US Federal Aviation Administration with regard to noise levels but a US$2. 2 million “hush kit is to be installed by Boeing later this year.

Two other airlines operate on the route, Hawaiian Airlines and South Pacific Island Airways, each providing three services a week.

Business Class Becomes the Boom Class of the Mid-Eighties:

When Qantas ‘invented business class in the late seventies it probably did not appreciate the enormity of its decision. Today, more and more long haul carriers are rapidly expanding their business class sections as full fare economy passengers (estimated generally to be between 10% and 20% of total international economy uplift) upgrade to business, and first-class in some cases revert to business for a similar standard of service at a vastly reduced fare.

The expansion of business class appears to be strongest in Europe where so much of the scheduled traffic is for business trips rather than holiday travel. Specialised holiday charter airlines and direct offshoots of the majors, such as -Condor (Lufthansa) and -Balair (Swissair) claim a high proportion of the holiday market, leaving the line carriers fighting ever harder for the high yield frequent flier business market. Locally. TAA is happy with the performance of its business class though many passengers comment that this class operates best on the wide-bodied A300 rather than the more congested 727 and DC-9 aircraft. Qantas of course are emphasising their faith in the class by completely eliminating first class aboard their 767s in favour of a business/ economy mix.

The other trend, particularly on the long haul services, is to convert 747 business cabins from the previously usual 8-abreast configuration to 6-abreast. While this obviously provides a greater sense of space this writer would personally prefer the seclusion of the 747 upper deck any day to the noisier main deck for business class. Upper-deck business classes have proven extremely popular with passengers and as one flier recently stated to me, “It is about the closest you can come to civilised travel while at the same time inherit- ing jet lag!”.

Ansett Targets the Opposite End of the Market With Innovative Children’s Club:

Remember the old TAA Junior Flyers Club of the fifties and sixties? Well Ansett have brought the basic idea into the space age with their new Ansell Starship Crew club. Believing that children were largely left out of the travel experience, the Club aims to ensure that children are well catered for aboard Ansett aircraft with a special menu of their own. gifts and plenty of games to play that will make the parents job a little more relaxing. A joining fee of $20 buys quite an array of goodies that may placate the conscience of a travel-weary dad or even make a winning birthday gift for a youngster that is into aviation Club goodies include a specially designed digital watch that converts to a robot (just what this editor could use at deadline time), a special school bag, regular magazine, Club wings, air travel bag, baggage tag and a show bag full of games and puzzles when the youngster boards the aircraft.

From experience of being in the TAA Junior Flyers Club as a boy the youngster will probably then insist that his parents fly Ansett, which at the end of the day was a winning formula for marketing success at McDonalds Restaurants so why shouldn’t it work for aviation. Now where’s my twenty dollars!

Air Queensland Solidifies $Som Aircraft Purchase:

Air Queensland early in April finally signed contracts to buy four French/Italian ATR42s with options for a further three aircraft. The company’s chairman, Sir Sydney Williams, said the $50m order, signed with Aerospatiale of France, included $2. 5m worth of spares.

“The first aircraft will be delivered in April next year and the others will arrive at monthly intervals afterwards,” Sir Sydney said.

The F27 aircraft (which are leased from Ansett, who will still enjoy AQ on-carriage for at least a year to come) in the Air Queensland fleet and the Cairns-based DC-3 aircraft would be progressively phased out during the introduction on the ATR42. Air Queensland, the largest operator of provincial services in Queensland, also operates Lizard Island Lodge, the Top of Australia Wilderness Lodge and tourist services to Brampton, Hamilton, Dunk and Lizard Islands.

The 42-seat aircraft will cruise at 470 kilometres per hour and is equipped with ground cabin air-conditioning for passenger comfort. The spacious walkaround cabin will have reclining seats, folding trays, special glass holders, overhead lockers, window blinds, piped music, coat lockers, modern overhead lighting systems, and full in-flight facilities providing hot meals, snacks arid beverages.

The ATR42 was manufactured in Toulouse, France and much of the aircraft’s modern technology had been gained from the Airbus and Concorde projects. The engines selected were the new technology Pratt & Whitney 120, which is a low cost, low-noise engine. manufactured for use well into the next century.

Us Airlines Score Best Year Since ‘78:

The major US carriers have marked 1984 as their best year since 1978. Total operating income represented an improvement of $US1. 75bn over 1963 while every major carrier, with the exception of ailing Pan American, made a healthy profit. Operating profits of the top dozen US carriers exceeded two billion dollars while net profit stood at $US810m, a vast improvement over a combined loss of $US163m during 1983. The overall increase in operating profit was 10. 6% while Piedmont led the way with an increase of 35%, United with 14%, Delta with 15% and USAir with 14%. Growth through 1985 is continuing and is expected to exceed that of REGULATION

Independent Review of Economic of Domestic Aviation:

An independent review of Australia’s long-established two-airline policy was announced recently by the Minister for Aviation, Mr Peter Morris.

The review will be headed by a prominent Australian business man with wide experience in the transport, construction and communications industries, Mr Thomas E.

May.

Mr May is a former Commissioner, Deputy Chairman and Acting Chairman of Telecom, and also Commissioner and Vice-Chairman of OTC. He recently chaired the inquiry into the National Road Freight Industry.

Mr Morris said that the terms of reference call for a review of existing arrangements for economic regulation of domestic aviation in Australia and to provide advice for Government consideration.

Domestic aviation is currently regulated by a package of legislation passed by the Fraser Government in June 1981. The arrangements cannot be amended by the Commonwealth before 1990 without the agreement of Ansett and TAA.

The 1981 legislation also provides that the Commonwealth Government or Ansett may after January 1987, give three years notice of termination of the two airlines agreement.

Public submissions will be invited and a series of public hearings will be held in capital cities and major towns around Australia.

Mr Morris said he had asked Mr May to report to him by the first half of 1986. The aim is to place the Government in a position where it can, if it wishes, begin renegotiation of the existing two airline arrangements prior to January 1987.

 Japanese Charter Flights to North Queensland Approved:

The Minister for Aviation, Mr Peter Morris, has announced that he has approved an application from the Japanese charter operator, All Nippon Airways, to operate four inclusive tour charter flights from Japan to Cairns.

Mr Morris said that All Nippon would be permitted to undertake the four inclusive tour charter flights between Fukuoka, Nagoya and Sapporo and Cairns over the period September 1985 to March 1986 using B747 aircraft.

Approval for All Nippon does not include Brisbane, as a weekly service is already provided by Qantas. JAL (Japan Airlines) is the carrier designated by Japan to operate air services between Japan and Australia.

 SAS Flies Ex-TAA F278 in Business Class Configuration:

The four Fokker F27 Friendships that Scandinavian Airline Services (SAS) acquired from TAA via Australian Aircraft Sales last July have been refurbished and configured in a 40-seat Business Class at 34″ pitch layout. SAS have fitted completely new interiors using Airbus-style seats, larger overhead bins and a new galley in a service designed specifically for the business traveller. The four aircraft are based at Copenhagen and operate primarily in support of feeding the transatlantic services.

CFM568 Log More Than a Million Engine Hours:

CFM56 turbofans, built by Snecma and General Electric, have logged more than 1 million operating hours aboard DC-8-70 aircraft. Dispatch reliability for the -2 is an excellent 99. 9% which also is an indictment of the overall reliability of the DC-8 airframe in addition to its new-generation engines. Modified DC-8-70s are burning between sixteen and twenty percent less fuel per seat mile than the standard version. To date some 90 DC-8 60 Series aircraft have been updated to -70 specifications while total orders and options are for 120 aircraft.

British Bid to Win Back America’s Cup:

British Airways has put up almost $500,000 to sponsor the British challenger for the America’s Cup yachting series off Perth in 1967.

The challenge, being mounted by the Royal Thames Yacht Club is reckoned to be the best chance Britain has ever had of winning the trophy originally donated by Britain 135 years ago.

British Airways flies from London to all five major Australian gateway cities and is the only airline offering a one-stop flight from London to Perth. The airline already has special America’s Cup holiday packages in preparation for sale both in Europe and the east coast of the USA.

MDC Earnings Increase:

McDonnell Douglas earned US$325. 3 million on sales of $9,662. 6 million in 1984. Earnings in 1983 were $274. 9 million on sales of $8,111. 0 million.

Sales in 1984 were higher than 1983 in all product lines, except space systems and missiles, where they remained essentially unchanged. The gain was especially strong in combat aircraft and information systems, but in both cases it resulted primarily from acquisitions.

Total backlog, including these additional amounts but excluding options and aircraft being built for short-term lease, was approximately US$22,460. 2 million on December 31, 1984, compared with approximately $17,337. 9 million a year earlier. Employment at the end of 1984 was 88,391 compared with 74,466 at the end of 1983. MD-80 programme status as of December 31 included 131 firm orders, 6 aircraft being built for lease to airlines by McDonnell Douglas or other lessors, 170 conditional orders and options and 195 deliveries for a total of 502 aircraft.