Airline Affairs

Klm Upgrade Business Class Seating:

As part of the apparent trend to attract more of the increasingly important business class market, KLM is installing new business class seating throughout its fleet. First aircraft type to have its business class reconfigured is the Boeing 737. On European business class flights wider, more comfortable five abreast seating (instead of the usual six abreast) has been introduced.

The package entails installing the new seat ing configuration on all 18 KLM 737s and on the four KLM European route A310s. It is believed that this is the first time that a five abreast Boeing narrowbody cabin configuration has been tried. A separate partitioned business class cabin is also part of the upgrade program which will be completed by the end of September. On intercontinental business class flights, new seats are currently being tested as part of a planned upgrade to attract more business class passengers on longer distance flights. Improved business class service, amenities, meals and toiletries have also been introduced, while a new business class lounge will be opened at Schiphol Airport by year end.

 Soviet Holiday Airline Formed:

A deal has been signed to establish a Lenin-grad-based, non scheduled airline to service the Soviet Union.

Called Vakatsia, the vacation airline of Russia’, the new airline is the result of an agreement between the USSR Academy of Civil Aviation and the UK/USSR business lai- son specialist, Neville Jones Associates. The airline will commence operations in 1991 or early 1992 and will link European capital cities with Moscow, Kiev, Sevastopol and Odessa. Vakatsia is seeking twelve 100 seat jet airliners to commence operations with and is also assessing some 30-50 seat Western turboprop airlines such as the Fok- ker 50 and Saab 340.

Compass Float Attracts Investors Large and Small:

The Compass float attracted investors from both ends of the investment ladder, from major companies and institutions to small investors.

Topping the list of investors is the Sarich. Corporation – the family company of orbital engine inventor, Mr Ralph Sarich- and the AMP Society, each holding 10 million shares, or 7. 58% of the 132 million shares originally offered. Other big Compass shareholders are Prudential Assurance with a 3. 88% stake in the airline, Perpetual Trustees with 3. 41% and BT Australia with 3. 03%.

The Compass share float has proven very successful, with some 11,200 individual shareholders attracted by the chance to own a part of the promising airline. Of these, 7,434 are the expected “Mums and Dads”, small time investors holding between 1,001 and 5,000 shares, or about 17% of those floated.

More Foreign Investment in Airlines Possible:

Following the recent round of Australian/New Zealand Closer Economic Relations (CER) talks, the possibility of a review of the foreign ownership limit of Australian airlines has been announced.

The limit review is the result of New Zea land pressure, initiated by the fact that fully Ansett owned Ansett New Zealand is able to compete in the New Zealand domestic market and Qantas holds a 19. 9% stake in Air New Zealand. The proposed CER program is designed to allow the two economies to operate as a single market and the aviation transport industry is an important aspect of this. Certainly New Zealand interests have been pushing for some time to have more access to the Australian market and only an increase in the foreign ownership limit would effectively allow them to do so.

Whether the relaxing of the limit would only involve New Zealand interests at this stage is unclear. Given Government indications that the privatisation of Qantas or merging of Australasian-Pacific carriers is desireable, if not inevitable, to enable the national carrier to expand and compete effectively with major international carriers, this may not be so. Financial experts though consider the most logical place to attract foreign investment for Qantas is certainly not New Zealand.

 BA First All 747-400 Australasia/ UK Carrier:

British Airways has become the first all 747-400 carrier on routes linking Australia and New Zealand to the UK.

On 1st July British Airways replaced its 747-200 Adelaide/London flights with a 747-400, thus becoming the first airline to utilise only the-400 on Australia/UK and New Zealand/UK services. All flights from the airline’s six Australasian points of departure (Sydney, Melbourne, Brisbane, Adelaide, Perth and Auckland) now benefit from the aircraft’s increased capacity, longer range and faster flight times. Additionally, BA is the only airline to currently offer -400 flights to London out of Adelaide, Perth or Brisbane.

The use of the all 747-400 service comes at a time when BA is looking to expand its services to the region. From 28th October the airline will add to its already 12 weekly flights so that it can offer daily Melbourne/ London flights and four Perth/London services per week. The airline currently operates eight 747-400s, but has a further 21 on order to facilitate route network expansion.

Singapore Airlines Launches Raffles Class:

Singapore Airlines introduced its new Raffles Class for business passengers during July.

Raffles Class replaces and improves upon Singapore’s already very successful business class. It introduces a new range of inflight serviceware and amenities to entice the business traveller. Included amongst these are new hydraulically operated seats with adjustable calf supports and footrests; new electronic stereo headphones; Nina Ricci toiletries for men and Elizabeth Arden toiletries for women; and an improved catering service offering lighter meals as increasingly demanded by passengers.

No doubt this all adds up to offer an even more comfortable long distance journey and should achieve the desired aim of attracting more business travellers.

 Ansett Operating Half Price Perth Charters:

Ansett in August commenced operating half price charter flights from the eastern states to Perth.

The half price Perth flights are an extension of the already successful ‘Fare Go 50 Special offer for off peak flights between major eastern Australian cities. It offers return air fares of just $472 for Melbourne/ Perth flights and $528 for Sydney/Perth, and will operate through to 16 December 1990, just before the Christmas rush begins. Fights depart Sydney for Melbourne at 8. 00pm every Saturday, then fly Melbourne Perth at 10. 00pm and return the following day. Restrictions are that passengers must book and pay for their return flights at least seven days prior to departure and must stay away at least seven days but no more than 27 days. Sir Peter Abeles, Ansett Joint Managing Director, claimed that the extension of the Fare Go 50 offer to include Perth is “an example of what can be expected once we break free of the shackles of regulation. ”

Garuda May Go Public:

According to the Indonesian Finance Minister, Johannes Sumarlin, Garuda Indonesia Airways will be publicly listed by 1992.

The airline is one of a number of Indone sian enterprises slated to go public, with 30% of the airline to be sold to public investors. Like Qantas, the airline needs private investment so as to be able to expand and update its present international fleet. The airline plans to invest $4. 5bn in new aircraft over the next eight years to increase capacity to 8-10 million passengers per year. It is plan. ned to buy six 747-400s and 13 737s from Boeing plus six MD-118 from MDC.

BA Shareholders Worried About Foreign Ownership:

British Airways investors have expressed concern about the level of foreign investment in Britain’s flag carrier.

British Airways is now 40% owned by foreign investors, with 33% of the company’s shares held by North Americans. The high foreign ownership is despite a “trigger” of 35% foreign ownership set as the maximum. For the moment, because no foreign share-holder holds more than a 5% stake in the airline, the situation is considered acceptable. The British Government though, apparently concerned about the level of foreign ownership rising, has drawn up plans to introduce controls that would force some investors to divest part of their holdings.

European Airline Traffic Boom:

Major European airlines are experiencing a massive above forecast traffic boom in almost all areas of operation, with no region experiencing traffic drops.

International scheduled passenger traffic for the Association of European Airlines member carriers was up 11% in April on the same month last year, while the accumulated total for January-April 1990 was 8. 7% up on the same period in 1989. Despite worsening airport congestion, traffic within Europe (as against non European destinations) gained by a healthy 15. 5%, while load factors were raised by 3. 2 points to 64. 7% because capacity increased by only 9. 8%. On North Atlantic routes traffic passenger demand increased by 11. 6%, but capacity rose at a greater level of 13. 8% though load factors were still a respectable 68. 5%.

 Us Passengers Show Preference for Regionals:

While the US majors suffer with huge financial losses (refer Stop Press August AA), US regional airlines are experiencing strong growth.

The US Regional Airline Association (RAA) reports that although the number of US regional carriers dropped from 163 to 151 during 1989, the number of passengers rose by a healthy 6. 3% to 37. 4m (compared with a rise of just 0. 4% for major internal carriers). Total revenue passenger kilometres flown last year increased by 12. 1% to 10. 9bn km. 817 airports were served by regional carriers as against 275 served by the majors, though of the top 50 regional airlines, 43 use code sharing with larger carriers.

The biggest regional airline is Air Wiscon-sin with 2. 2m passengers (about twice the uplift of East-West) and the most commonly operated airliner is the Fairchild Metro which accounts for 10. 8% of the regional airlines’ seating capacity. Of the 13 most common regional airliner types, however, just two are built in the United States while only one, the BAe 146, is a jet.

EC Warns Against Airline Mergers:

European Community (EC) member, Sir Leon Brittan, has strongly warned European airlines about mergers and anti competitive marketing agreements in the soon to be deregulated European market.

The warning follows the recent spate of airline mergers, acquisitions and marketing agreements negotiated by European carriers preparing for European airspace deregulation. Brittan claimed that such arrangements go against the EC’s plan for increased competition. He cited the recent purchase of Air Inter by Air France and KLM’s purchase of Transavia as examples of non competitive activity, while airline alliances such as those of Air France/Lufthansa/Iberia and Sabena/KLM/British Airways were also criticised as being contrary to the spirit of competition.

Brittan warned that as well as deregulating the market, the EC has the power to alter or dismantle the airspace agreements and would not hesitate to do so should the air- lines’ activities not be in line with the EC rules of competition.

Trial Ksa Curfew Made Permanent:

Despite objections made by a few vocal Sydney residents and politicians, common sense has prevailed and the trial KSA curfew has been made permanent.

Hours of normal operations for KSA are now permanently extended to being between 6am and 11pm. Aircraft utilising KSA outside these hours (at night between 11pm and 6am) are restricted to using flight paths over Botany Bay, they must be ICAO Stage 3 types, they face limits as to the length of runway and takeoff power that can be used dur ing takeoff, and are limited in the use of reverse thrust on landing.

The Federal Minister for Shipping and Aviation Support, Bob Collins, said that the extended curfew hours had not been ended – despite calls from local council members. that it should because tests, while “not totally conclusive, did make clear that while some people are marginally worse off, a much greater number of people are considerably better off under the new arrangements. ” Under the extended curfew hours the percentage of flights not over Botany Bay has dropped from 15% to just 3%.

Also taken into account was the apparent dramatic fall in curfew breaches since the Air Navigation (Aerodrome Curfew) Regulations were introduced last December. For example, while in January and February there were 20 recorded broaches of the airport. curfew, this fell dramatically to just five breaches in the three months from 1 March.

Under a new set of procedures introduced to ensure curfew breaches are kept to a minimum, aircraft will not now be given permission to depart KSA unless takeoff can be achieved by 11pm, though late arrivals will not necessarily be denied landing permission. Emphasis will be placed on the airlines for penalties for breaches with a maximum fine of $5000 and/or, more importantly, removal of KSA landing rights for up to one year.

Lufthansa Airport Express Rail Service Expanded:

Lufthansa has added a Frankfurt/Stuttgart service to its already highly successful Airport Express high speed rail service.

As part of its response to the worsening problems of Northern European airspace and airport congestion, Lufthansa has introduced the new twice daily Stuttgart railway station/Frankfurt Airport service. It is offered as an alternative to flying between the two centres and, as with other Lufthansa Airport Express services (between Frankfurt, Bonn, Cologne and Dusseldorf), the new service offers high speed non stop rail travel for Lufthansa passengers.

The Express consists of three German Railway First Class carriages with room for 120 passengers who receive the usual Lufthansa inflight service during the two hour trip. A Lufthansa check-in counter at Stuttgart station allows passengers to check in baggage for their onward flight to final destination.

The high speed rail link has proven to be a winner for the airline and is one that should no doubt catch on with congestion related problems rapidly worsening. It not only helps to ease airport and airways traffic congestion, but also offers a viable and comfortable alternative to passengers not on a tight travel schedule.

 Check-in for Cathay Pacific by Telephone:

Cathay Pacific has extended its Telephone Check-in service to every city in the airline’s network.

The service, which has been operating in Hong Kong since last year, was made available on 1st July. The system allows first and business class passengers with hand baggage only to check in for their flights by telephone before arriving at the airport. On receiving the call, Cathay Pacific airport staff print out the passenger’s boarding card. The passenger need report to the check-in counter only 30 minutes (45 minutes at some airports) prior to departure to collect the card, pay any necessary departure tax and proceed to immigration control and the boarding gate. This typically saves the passenger up to one hour.

Schiphol Airport Upgrade Continuing:

Amsterdam’s Schiphol Airport’s recently started major upgrade and expansion program, aimed to allow the airport to cope with next century’s expected passenger numbers, is proceeding well.

The ‘Schiphol 2000 project will literally double the airport’s size to enable it to handle not only some 40-45m passengers per year by 2000, but also to be one of Europe’s main flight cargo centres. It is at present the largest construction project in The Netherlands and will be completed in several phases between 1992 and 2003.

The main terminal building is currently being expanded as Phase One of the project though construction work is not expected to seriously hamper passenger movements. When completed, the main terminal building will cover over 93,000 square metres (1 million square feet) and will be equipped with ‘people mover’ conveyor belts and a magnetic train system to facilitate ease of travel from the airport.

Fourth New York Airport Supported:

The US FAA and local business leaders are supporting the development of a fourth major airport to ease New York’s growing congestion problems.

Development of the fourth airport would involve the conversion of the USN/Grumman Corporation airport at Calverton, located about 96km east of JFK International Airport. At a meeting to discuss the fourth ai port option, FAA officials and business representatives said that developing Calver- ton would ease airspace and runway congestion at the three existing New York civil airports; could allow it to serve as a commercial transport and repair station for foreign carriers operating into nearby JFK and Boston Logan International airports; and would create jobs for workers laid off by Grumman and other Long Island defence contractors.

Upgraded Proserpine Airport to Rival Cairns:

The mainly Ansett funded upgrade of Proserpine Airport to international standards should see it eventually rival Cairns as the gateway to the north Queensland resorts.

The project will see the airport runway extended from 2,073m to 2,750m (and eventually 3,250m), the widening of the runway to cater for Boeing 767-300 size aircraft, and the building of a new international terminal complex. Reflecting its new capabilities, Proserpine will be renamed Whitsunday International Airport when completed and will provide a major point of access to the very important Whitsunday and lower Barrier Reef resorts from 1993.

Ansett is confident the upgraded Proser- pine Airport will be as successful for the international market as its initial development of the airport during the 1970s was for the domestic market. The airport will not overlap with the Hamilton Island airport because it will not be a suitable service point for the Whitsunday Islands, just the mainland where more than a billion dollars is planned to be spent over the next five years on three very large resorts plus a number of smaller tourist developments.

Meanwhile, the Hamilton Island runway is to be lengthened from its present 2,800m to cope with aircraft up to 747 size. Like Proser- pine, Hamilton will be looking to attract international charters. The new terminal at Hamilton Island is optimised for both international and domestic traffic and the first international charters are expected within the coming twelve months. Ironically, the stumbling block to having them operating now is the lack of capacity as both Qantas and All Nippon (the airlines primarily interested in serving the Whitsunday area) simply do not have the excess 767 capacity available at present to embark on a regular charter schedule. Meanwhile, UK charter giant, Bri- tannia plans to be serving Hamilton Island later this year.

The new Cairns International Airport terminal building and control tower (pictured during construction) were commissioned during August. The buildings are part of the airport’s Seam redevelopment program which also includes a 600m main runway extension and the enhancement of airport services and facilities. In addition, major airlines such as Qantas are undertaking further construction works to satisfy their own requirements.