Airline Affairs

Meanwhile, the problem for Cathay is that if tourism and business travel drop, then many airlines will begin to phase out flights to Hong Kong. The net result of this would be that Cathay would then have far less leverage in being able to bargain for additional traffic rights into ports where their flag carriers had downgraded their HK services. For an airline that relies purely on a single market plus fifth and sixth freedom rights, then this can present a significant problem. Fortunately also speaking at the FT conference was Mr Lu Ruiing, chief administrator of China’s CAAC, who quickly went on record in defence of Cathay as stating that from 1997, Cathay would be the official Hong Kong flag carrier. as it is now, and would be based at the for- mer colony at the new $33bn airport to be built on Chek Lap Kok island in HK harbour. With 12 additional 747-400s on firm order and commitments on up to 20 Airbus A330s, then obviously Cathay is Icoking ahead with total confidence.

Pan Am Will Refund:

Pan American World Airways will fully refund first class passengers on transatlantic flights if they are in any way unhappy with the inflight service provided. The unusual offer comes as a result of Pan Am’s efforts to win back lucrative first class business, much of which was lost following the Lockerbie disaster in late 1988.

Fifth 767 for Air New Zealand:

Air New Zealand is to replace one of its leased Boeing 767s with another leased Boeing 767-200ER expected to be in operation by November.

The airline currently operates four General Electric and three Pratt and Whitney powered 7678 and of the seven, three are leased. However, with the ex-Varig Pratt and Whitney powered 767 lease due to end later this year, Air New Zealand has taken the opportunity to replace it with a General Electric powered aircraft to improve fleet compatibility. The replacement aircraft, currently in service with Britannia Airways of Britain, will be on a long term arrangement via an intermediate leasing company.

Air New Zealand says the aircraft, ZK-NBI, will be fully compatible in terms of extended range operations with other General Electric powered 767-200ERs in its fleet. These aircraft regularly operate long haul Pacific service to Honolulu and Los Angeles.

 Us Passenger Numbers Fall:

Despite the rapid worldwide growth of commercial air transport, it’s perhaps surprising to discover that in 1989 US airlines carried 2 million passengers fewer than they did in 1988.

Last year US airlines (domestic and international) carried a total of 453 million passengers compared with 455 million the previous year. Falling domestic travel was responsible for the drop, with international passengers actually increasing by 10% to 38. 5 million while internal traffic was down by 1. 2% or 5. 5 million passengers. Despite this, total revenue passenger kilometres travelled increased by 2%. The drop has been attributed to fare increases and a slight softening of the US economy.

BA May Not Be Able to Utilise Changi Hub Till 1993:

British Airways has revealed that it may not be able to commence full operations from its proposed Singapore Changi hub till perhaps as late as 1993 owing to delays in obtaining traffic rights to a number of regional destinations including Malaysia, Thailand and possibly Australasia.

Singapore Airlines allowed BA the landmark use of a major hub facility at Singa- pore’s Changi airport in its July 1989 agreement which also allows SIA much additional uplift to the UK including eventual fifth free- dom on-rights across the Atlantic to the US East Coast. SIA presently flies nine Singa- pore/UK services a week with this increasing to 17 by 1993/94. The benefits for BA in hubbing out of Changi (like Qantas) is that it can utilise and home base smaller aircraft at Singapore to provide a greater number of higher frequency direct non stop flights to regional centres too big for the 747. Overall, the move will give BA a greater presence in Asia, whilst SIA gains a foothold in the transatlantic market, which it can well augment with its growing trilateral association with Delta and Swissair.

 Solomons Airline:

At the request of the Solomons Islands government, Air New Zealand is helping establish a new national airline for the small nation.

Solomon Islands Airways will begin services on 1 June this year using a Boeing 737-200 and will fly Pacific routes between Honiara, Auckland, Brisbane, Port Moresby, Nadi and Vila. Air New Zealand has a two year $NZ4m contract with the airline to provide full maintenance and spares support, flight operations assistance, flight planning and pilot training.

 New Soviet Airlines:

As part of the Soviet Union’s ongoing restructuring of many aspects of the country’s e, it has been revealed that plans are underway to give the country at least eight separate airlines.

In addition to Aeroflot and the recently announced ASDA, consideration is being given to the formation of six new regional domestic carriers serving the Baltic states and drawing staff from Aeroflot. The intention was to set up such an operation in Lithuania first, but recent independence moves there may cause a revision.

At the other end of the scale, ASDA will specialise in long range operations and is talking to Boeing about the 747-400. How times have changed!

Worse Than They Thought:

Recent predictions of enormous passenger and freight traffic growth in Europe – which painted a fairly unpleasant picture of congestion and delays – have proved to be pes- simplistic according to figures released dealing with 1989 to the end of August.

The International Civil Aviation Organisation (IACO) predicted European scheduled traffic would grow by 4. 5% in 1989 and for the rest of the century but the actual figure has been nearly double that. As a result, delays have been worse than ever with 20% of flights being held up by more than 15 minutes during August, the summer peak. This figure represents a doubling of the delays experienced in the same month just three years ago.

More Parking at Sydney:

A $10m program to provide a new domestic apron area at Sydney-Kingsford Smith Airport is now underway.

More aircraft parking space in the domestic area of the airport is urgently needed, particularly with the coming of airline deregulation and the extra aircraft movements that will generate. The work is scheduled to be completed by November this year.

 More Heathrow Movements?:

The chairman of British Midland Airways, Mr Michael Bishop, has come up with a series of proposals which he claims could generate an extra 75,000 takeoffs and landings a year at London Heathrow Airport.

The airport recorded 343,000 movements last year. The proposals – some of which may be regarded as novel and to some environ- mentally unfriendly-come as a result of the problems faced by BMA and other airlines who are suffering due to insufficient slots being available at Heathrow.

His suggestions include mixed mode operations on the airport’s parallel runways allowing takeoffs and landings on both at the same time (50,000 extra slots), reducing separation on approach from 3nm to 2. 5nm (5,000), building rapid exit turn offs for smaller aircraft (2,500), extending the working day by one hour (7,500) and improving ground handling efficiency, a 3% improvement equating to 10,000 additional slots.

Cathay Pacific Mounts Additional Hong Kong Flights:

Cathay Pacific is to continue operating an additional twice weekly supplementary passenger service between Eastern Australia and Hong Kong during the period 1st April to 30th June 1990.

The services will provide much needed additional capacity between Sydney. Melbourne and Brisbane to Hong Kong, during the Easter and late Autumn Australian inbound periods.

The Australian Government has approved the services as one off extra sectors to ease the seat shortage on the Australian/Hong Kong route, prior to new Government bilateral talks which will be held in June.

American Getting Bigger:

As part of its current expansion strategy, American Airlines is purchasing a series of routes from Eastern, Continental and TWA.

The airline has secured Eastern’s Central and South American routes (including 20 destinations), Continental’s Miami/London service and TWA’s Chicago/London route. The purchases also include Eastern’s Miami/ Madrid service, two Florida/Canada routes and a number of Continental gates and buildings at New York, Miami and San Juan.

 Cairns Restrictions Lifted:

The recently completed extension of Cairns’ run- way 15/33 from 2,600m (8,500ft) to 3,200m (10,500ft) has allowed full load use of the airport by the Boeing 747, an advantage particularly useful to Qantas which operates from Cairns to Tokyo and Vancouver, the latter via Honolulu. Previously, 747s had to operate from Cairns with between 50 and 100 passengers and up to 10 tonnes of freight less than the aircraft was capable of carrying.

Cairns Airport is also having a new inter- national terminal built which is due for completion in August. More than one 747 load of passengers at a time is too much for the current terminal to handle and with 18 inbound and 19 outbound Qantas services per week plus others by Thai, Continental, Air New Zealand, Air Niugini and Britannia, it is clearly inadequate.

Ansett Introduces $99 Inters- Tate Mystery Tours:

The success of Ansett’s January-only Mystery Fare joy rides has resulted in the airline revamping the concept to include sightseeing at the mystery destinations.

Ansett has now introduced two new same day return Mystery products for travel from Melbourne, Sydney, Brisbane, Perth and Adelaide: $75 joy flight style Mystery Flights which could involve as little as 20 minutes at the mystery destination, and $99 Mystery Tours with a guaranteed minimum 3. 5 hour stopover, including sightseeing coach tour, at the mystery destination.

Brisbane passengers fly on Ansett jets, while Sydney passengers could find themselves on either Ansett aircraft, Air NSW jets or turboprop aircraft flying to any of the air- line’s NSW destinations. Melbourne passengers will mainly fly on Ansett jets but could fly Air NSW on its jet and turboprop services to destinations such as Maroochydore or Coffs Harbour.

Ansett General Marketing Manager John Konrads said the new fares were a redevelopment of a special, limited offer Mystery Fare which was available in January. “Those Mystery Fares were popular with first time fliers, as surprise gifts and with groups such as office workers wanting a novel day out,” he said. “The concept has been redeveloped to take account of passenger feedback on aspects such as being able to see the sights at the mystery destination, wanting to book well ahead of travel date and to take account of problems some passengers reported with long queues at booking offices”.

Passengers must book and pay in person at Ansett Travel Centres or travel agents between 90 and two days ahead of intended departure. They are told what time to check in at the airport when they book and will find out where they are going when they check in on the day of travel. Sales are limited to six tickets per person, while bookings must be made in person. A special telephone number – 11670 – has been established with recorded information on Mystery details.

 Sydney to Seoul Direct:

After two years of negotiations, Australia and South Korea have agreed to allow direct air services between the two countries.

Korean Air began operating weekly DC-10 services from Seoul to Sydney in early April while Qantas will begin operating 747s on the route next October. If the number of passengers justifies it, Korean Air will substitute a 747 for the DC-10 later in the year.

 German Airline Unity:

The business of unifying the two Germanys has already begun – at least in the commercial sense with the announcement that Lufthansa has signed a letter of intent to acquire 26% of East Germany’s Interflug.

The arrangement will not be a full merger as such, but is the latest in a series of impor- tant links in the areas of catering, reserva- tions, pilot training, charter services and other operations. Interflug will reportedly receive refurbished and updated Boeing 737-2008 from retired Lufthansa stocks later this year.

 Capitol May Call Queensland Home:

New entrant, Capitol Airlines is most likely to make Brisbane its home base.

This follows a rejection of Adelaide as a HQ and base due largely to lack of airport space and the benefits of interlining out of Brisbane rather than the South Australian capital which is also remote from most major tourism destinations in comparison with Brisbane.

Capitol hope to be operational by year’s end with the first of eight MD-83s leased from Irish Aerospace, a partnership between McDonnell Douglas and Guinness Peat Aviation. The aircraft will be configured in a 135 seat first and economy class configuration. Capitol first class, a comfortable four abreast on the MD-83s, will be priced the same as Ansett and Australian’s existing business class while economy class will offer a 25% discount off current standard intercity jetfares. Discounts of upto 50% will however be featured for a variety of special fares including advance purchase, standby and those aligned to holiday packages, etc. Cap- itol’s MD-83s will be configured five abreast with a 32 in seat pitch.

Obtaining finance for all three major new entrants (Compass and Southern Cross are the others most likely to achieve takeoff) has not been easy with the general tightening up of investment, the pilots dispute and its widespread repercussions and the possibility of a change in government which could see the share market also hosting Aus- tralian and Qantas in competition with the three new entrants.

Capitol is seeking $100m largely from institutional and private investors and will also be ultimately looking to its own employees holding up to 20% of the stock of the airline by the end of next year. The first equity subscriptions were planned for launch during the course of this issue and are being handled by the Brisbane based stockbroking firm of Jarden Morgan. Capitol plans to hire 900 staff with 80% of these being based at its admin/maintenance base on Brisbane airport. With only 900 staff for 8 135 seat jets, Capitol is boasting an employee/capacity ratio of around 110 vs 280 for both Ansett and Australian. This, the airline believes, will allow them a far lower break even load factor than the present majors.

The benefits for the State of Queensland of Capitol basing out of Brisbane are substantial as in its first year of operation the airline will have a payroll of around $40m, 80% of which will go to Brisbane based employees with a flow on effect of some $160m.

It is expected that an estimated 450 airline specialists will also emigrate to Brisbane to join the carrier. The fact that housing values in Brisbane and environs are only a fraction of what they are in Sydney, and to a lesser extent Melbourne, has not gone unnoticed by many current employees of Qantas, Ansett and Australian. An interesting sidelight is that around 60 special child care positions will be made available at the new Brisbane Airport base, something that will be a big plus for young married couples and will consequently allow the airline to be extra selective in hiring the cream of available employees.

Capitol have also recently appointed Mr George Chan as their marketing and sales director. Mr Chan was formerly a managing director of Singapore Airlines and was principally responsible for the very successful Singapore Girl theme. Mr Chan’s primary responsibilities will be to secure market share for the new airline through an innovative advertising and marketing campaign in addition to securing crucial interline rights from overseas carriers through its Brisbane base. Capitol plans to fly between Adelaide, Brisbane, Cairns, Townsville, Coolangatta, Melbourne and Sydney. Its long range MD-83s have a full payload Sydney/Perth capability, even against the worst winter headwinds.

 Aeroflot Traffic Up:

Like the rest of the world, the Soviet Union is experiencing an upturn in air traffic.

In 1989 the airline flew more than 132 million passengers, a 5. 6% increase over the previous year. Revenue passenger kilometres (RPKS) reached 228. 9 billion (up 6. 6%) but its freight traffic dropped marginally to 2. 76 billion freight tonne kilometres.

Qantas Cleared for More Automatic Landings:

Qantas has become one of a select band of international airlines to gain approval for Boeing 747 aircraft to make automatic landings world wide in Cate- gory III conditions, with visibility below 350 metres.

The decision will mean a reduction in delays and diversions due to fog- a major source of disruption to all airline schedules in Europe, especially during winter. Category III operation is not yet available in the Australian or Asian regions.

Captain Cliff Viertel, Qantas Flight Technical Manager, said: “Qantas has operated with automatic landings since the early. 1970s and has accumulated a wealth of experience with the operation of 7478 in these situations. We presently have about 60 automatic landings each month and have totalled about 5,000. ” The latest approvals apply to Qantas 747-300 and 747SP aircraft though the latter are due to be retired shortly. The 747-400, the newest aircraft in the Qantas fleet, already has automatic landing approval and is expected to operate to Category Ill conditions later this year, following a series of proving flights now underway. London, Manchester, Amsterdam and Frankfurt are among the primary destinations where Qantas will be able to take advantage of the latest clearance, further increasing the airline’s efficiency and service to passengers.

Qantas has trained its pilots to make automatic landings in Category II conditions since 1972. Under Category II, pilots are required to have 350 metres visibility at an altitude of 100 feet. Under Category III conditions, Qantas expects to be operating in vis- ibilities as little as 200 metres at altitudes as low as 20 feet with 747-400 aircraft.

 Terminal Applications Opened:

Under the terms of the airline deregulation which comes into effect from November 1 this year and the leases on their airport terminals, Ansett and Australian Airlines are required to set aside terminal space and facilities for other carriers.

Applications for terminal space have now opened and some 11 operators have responded, including six new entrants to the fray: Compass, Capitol, Air Hibiscus/Seaboard, Transcontinental and Southern Cross Airlines.

Each applicant will receive a priority ranking based on the following: highest priority will go to those who propose to operate regular public transport (RPT) services over one or more interstate routes from November 1; second priority goes to applicants proposing intrastate RPT services after the same date; third priority applicants are those who began RPT services over new interstate routes between 1 January 1988 and 1 Febru- ary 1990; fourth priority goes to charter operators.

 Tourism Recovering:

Despite the effects of the pilots’ dispute, the Australian international tourism market is recovering by attracting tourists from countries other than the traditional ones.

Figures released by the Australian Bureau of Statistics show an increase of 3% in short term arrivals in November over the month before. The figures also show a marked decline in visitors from the traditional United States and Japanese markets compared with the previous year but this was offset by larger numbers coming from the United Kingdom, New Zealand and Asia. A very large reduction (68%) in the number of overseas visitors coming to attend conventions was partly offset by an increase in those visiting relatives.