Airline Affairs

The NSW State Government has thus at long last decided that the third runway is of ‘national importance’ and should not be held up any longer by often self centred local councils.

Tower Shutdowns Possible:

Alarm bells are ringing over the possible decrease in safety as the Civil Aviation Authority conducts cost benefit studies on control tower facilities at eleven of Australia’s busier airports.

The studies, to show whether the costs of running control towers outweigh the benefits, could greatly increase the chance of a mishap, so local communities are saying.

Control towers under the financial microscope are at Coffs Harbour, Hamilton Island, Proserpine, Mount Isa, Port Hedland, Kar- ratha, Albury, Wagga, Alice Springs, Rockhampton and at Tasmania’s capital city. Hobart. The possible axing of control towers foreshadows the new airspace management system which is based on an ICAO model where there is no airspace management on aircraft below 5,000 feet. It’s expected the new system will be introduced Australia wide in February next year.

At Coffs Harbour on the New South Wales north coast another concern is that the axing of the city’s airport control tower will effectively kill any plans to upgrade the facility as an entry and departure point for international flights. (Halden Boyd)

Domestic Fare Discounts on Offer, Despite Airfares Rise:

Both Australian and Ansett are continuing to offer their latest rounds of discount airfares, despite the fact that overall airfare prices rose by 7. 5% on November 1.

With the list of very commendable public relations oriented discount fares on offer seemingly ever growing, it is a less publicised fact that airfares were set to rise come deregulation. Both the major airlines applied for airfare increases to the Independent Air Fares Committee (AFC) prior to the introduction of deregulation though their requests were turned down. With deregulation meaning that the IAFC no longer has a say in the setting of ticket prices, however, fare increases in the order of 7. 5% were enacted on November 1 so that the airlines can make up for the increased cost of fuel. Though discount fares such as half price night time travel will remain available (at least up until the traditionally busy Christmas holiday period) there will effectively be no decrease in the price of the standard air fares offered by the airlines. An increase in the standard ticket cost also increases by the same relative margin the cost of the discounted fare.

BA To Introduce Personal Video Screens:

British Airways is to introduce video screens for First Class passengers on intercontinental routes.

At a cost of about $9m, the screens will be introduced from January as a part of the airline’s continuing $55m First Class improvement program, launched in March 1989. Some 1,500 video units with high resolution five inch LCD screens have been ordered to be fitted to all BA long haul airliners. The new screens will give First Class passengers control over inflight entertainment on long haul flights, the passenger having the choice of about 40 videos carried onboard which can to be watched at any time during the flight. The video units fit into the armrest of BA First Class seats and include all features normally associated with VCRs such as stop. start, rewind and pause, and can be tucked away when not in use.

KSA/City Rail Link Plan:

The NSW Minister for Transport, Mr Bruce Baird, has called for expressions of interest to develop the Sydney city to Kingsford-Smith Airport rail link.

The rail link is by no means a new idea, having in fact been mentioned as a possibility by AA in our January issue this year. The call for expressions of interest, however, moves the project that one step closer to fruition. Already a consortium comprising Qantas, CRI and Westpac have proposed a $210m rail link which, if given the go-ahead, could be up and running as early as 1993. CRI managing director, Mr Peter Wills, said that the consortium had been working on the proposal for two years. It would utilise existing State Rail train lines and would run from Central station along interurban lines to Sydenham and then on the existing freight line to Kingsford-Smith, a journey time of just 13 minutes being suggested with trains departing each way every 15 minutes.

The two other proposed routes also start at Central. One would follow the F5 freeway corridor to the airport while the other would involve the construction of a tunnel from Central out to Mascot. Two presently unused platforms at Central would be used for the service(whichever proposal is selected), while three new stations at Mascot under the domestic and international terminals would be constructed.

The line will be a private line. The cost of fares has not been publicly discussed, though special cheaper fares for airport workers, comparable to normal State Rail

fares, would probably be introduced. Apart from the tens of thousands who fly out of KSA each day more than 16,000 people work at the airport, a large number of whom could find the direct rail link via Central most useful.

Panam Cuts Jobs, Costs and Capacity:

PanAm has begun drastic job cuts which will see 2,500 employees laid off by the end of the year and capacity reduced throughout the airline’s network.

In expectation of an expected air travel recession in the US, PanAm has opted to cut its workforce by 8. 6% and during next year will cut capacity by an overall 7. 5%, with transatlantic services being particularly hard hit with a 15. 4% capacity cutback and US domestic services’ capacity being cut by 10. 1%. This represents a cut in capacity from 46bn available seat miles this year to 42bn next year, with many 747 services being replaced by A310-300s which have less than half the seating capacity. Such action should, PanAm management. believes, cut costs by $US50-60m a year.

Other airlines are expected to similarly cut back on operations and costs in the near future. USAir had already announced the axing of some 3,600 jobs prior to PanAm’s announcement, while Northwest Airlines is known to be considering staff layoffs and the grounding of its less economic fleet of 727s and DC-9s to cut costs.

Transcontinental Plans Begin to Firm:

The second major newcomer to the Australian airline scene, TransContinen- tal, is in the final stages of refining its opera- tional strategy.

The newcomer, headed by ex-Ansett pilot Capt Alex King, is currently planning to commence operations in late March with a fleet of six Boeing 737-300s. The airline will initially serve the Hobart, Launceston, Melbourne, Canberra, Sydney and Brisbane markets with Townsville, Cairns, Proserpine, Adelaide, Alice Springs and Darwin coming on stream later in 1991 as an additional six 7378

are placed into service. The Boeings are coming from a European based lessor and at presstime leases on the first six were about to be signed. It is believed that some of the aircraft are already in service with various charter operators.

According to Capt King, the airline hopes fly its first revenue services in late March though this raises the question of the viability of beginning services in what is traditionally the quietest period of the year and at a time when the economy is in recession amidst an environment of very high fuel prices.

Whilst Compass has decided to primarily target the leisure market, TransContinental has pitched its service directly at the business community. While the airline will operate a three class configuration, its fare levels will be somewhat different to either Ansett or Australian. The new entrant will for instance charge (at Feb 90 fare levels) a business class fare for first class service and standard economy rates for its business class. Econ- omy itself will be significantly discounted and will feature the standard six abreast arrangement at a 32″ pitch. First and Business will be four abreast with both classes at 34″.

The primary difference between the two premium classes will be the overall standard of service and catering. This will mimic the standards currently set by the majors, though in this case TransContinental business class passengers will be paying what was an economy fare whilst enjoying first

class seating standards. The airline provisionally plans to configure the bulk of its cabin in a four abreast arrangement with just a small portion of around two dozen economy seats six abreast with the first four or five rows of the aircraft being dedicated purely to first class.

Line servicing would be undertaken at the airline’s yet to be built facility at Tullamarine, while ASTA is looking to conduct the elements of heavy maintenance that will be required as the fleet begins to reach its third. and fourth year of service. A firm decision is still to be taken as regards which CRS system to link with, though Galileo and Sabre at presstime are the preferred options.

On terminal access, Capt King shares the same sentiments as expressed continually by Compass’ Bryan Grey and previously by Capitol Airlines. TransContinental will have to share space at the Ansett terminals in Sydney, Melbourne and Perth and has been assigned gates as far away from each other as possible and without aerobridge access. This is naturally perceived as being a major hindrance for an airline that is targeting primarily the high profile premium class market. Consequently TransContinental is looking to eventually build its own terminal at Sydney and Melbourne, something that will involve an investment of at least $50m. It is not inconceivable, given the fact that both new entrants are targeting primarily different markets, that Compass and TransContinental may decide to jointly build a single terminal that will adequately meet the requirements of both operators. Other areas of concern for both operators is that their host airline (Australian in Compass’ case) also controls the movements of their customers’ baggage, catering and security arrangements.

On the finance side Capt King stated that the airline has considerably more in hand than Compass and that all of it had been raised offshore, though no foreign investors actually had a shareholding in the new company. Staff would also be given the opportunity to invest, something that the airline considered essential in order that the best possible attitude prevailed between staff, management and the customer.

Virgin Voted Airline of the Year:

Virgin Atlantic has received the coveted Executive Travel magazine Airline of the Year award, ousting previous award holder. Swissair.

In a pole of 50,000 readers of Executive Travel, Virgin was also voted best transatlantic carrier and best for inflight entertainment. The award has naturally delighted Virgin management and employees, coming as it does just seven years after the airline was formed. Speaking about its success, Mr Richard Branson, chairman of the Virgin Group, said: “If you are small you have to be the best. From the outset we have tried to create an airline that is different in almost

every respect. ” Different meaning quality of service. Virgin’s eight 747-2008 two of which will soon be flying UK/Australia – offer its business class passengers a massage. service, manicure and choice of three meals. Little wonder then that Virgin Business Class is generally regarded within the industry as being the best.

Meanwhile, carriers within our own region have also done very well in the Executive Travel awards. Singapore Airlines was runner-up after Virgin in the main Airline of the Year category, whilst Qantas and Air New Zealand were joint runners-up (after SIA) in the Best Long Haul Airline category. For the eighth year running. ANZ was also voted Best Carrier to the Pacific.

Qantas 1989/90 Performance:

Qantas performance data for the 1989/90 financial year show that the airline per- formed well during the period in view of the massive upheavals of late 1989.

Qantas carried 4,220,373 passengers during the financial year, up 5. 6% on the 1988/89 financial year, an excellent figure considering the drastic effect the pilots’ dispute had on the airline. It performed a total of 3,639,540 revenue tonne kms (up 5. 4% and out of a total of 5,447,029 available), of which 1,136,540 was cargo. Load factor suffered a drop of 2. 4% (down to 66. 8%) due to the increase in capacity being greater than RPK growth. As at 30 June the airline’s fleet stood at 12 Boeing 7678 and 29 Boeing 7478.

With Qantas performance rebounding nicely and the airline to be partially pri- vatised, Qantas is preparing for growth in the 1990s. Firm orders or options for 45 747-400s have already been placed with Boeing to allow for the necessary fleet expansion. Purchases of other aircraft types are also probable. In 1990 dollars, the airline will spend at least $11bn on capital equipment by the year 2000, $9. 5bn of which will be on aircraft. By current estimates, however, this expenditure should more than pay for itself by allowing the airline to remain competitive in the growing international airline market, especially vital in the increasingly important Pacific rim area.

The Canberra based Centre for International Economics has already released figures showing the value of Qantas to the Australian economy. It stated that for every dollar spent by the airline on aircraft and associated equipment, it was earning $1. 72 for Australia in exports. Purchasing new aircraft ensures that this net revenue from sales and passenger services will remain high.

Aas Buys 38 Delta DC-98:

Sydney- based Australian Aircraft Sales (AAS) recently purchased 38 surplus Delta Airlines DC-98 plus a package of spares and equipment.

The $US280m deal included the 38 aircraft, two DC-9 simulators and spares valued at $US30m. The signing of the bulk order comes at a time when sales of older airliners are softening. AAS, however, expect to sell most of the 38 aircraft quickly because a strong market for the DC-9 does exist at least for the moment. The majority are expected to be sold in North America or Europe to smaller airlines not able to afford large purchases of more modern aircraft; eight of the DC-9s have already been sold to Miami-based Air Inter.

The 38 aircraft are about 17 years old and each has completed between 39,000- 44,000 cycles with flying hours between 38,000-40,000, well below retirement age. None of the aircraft have been hushkitted.

PNG Domestic Services Suffering:

Douglas Airways has become the second of Papua Nuigini’s two major domestic airlines to cut back or cease operations.

The airline which is 51% owned by national carrier Air Nuigini has ceased operating and has been placed into voluntary receivership. Its mixed fleet of 16 Islanders, Trislanders, Nomads and other light twins has been offered for sale, though a final decision on the airline’s future has not been officially decided.

The move into receivership has occurred only shortly after Talair-what was the country’s other major domestic airline – heavily cut back services and began withdrawing staff and some of its fleet of 50 aircraft to Australia. Talair chairman, Mr Dennis Buchanon, has blamed ongoing law and order problems and disputes with sections of the PNG public service for his airline’s decision to get out. There is, he claims, an “anti foreigner sentiment in the bureaucracy”, making effective profitable operations difficult.

With an estimated 70% of the PNG population reliant on air services to the nation’s 447 airstrips which are not connected to the national road system, many people have been affected by the ending of services by the two major internal airlines. Small locally owned operators have begun offering services but some serious gaps are evident.

Qantas Share in Domestics Possible:

Qantas has expressed interest in acquiring a share or implementing a partial merger with either of the two major domestic airlines.

Qantas chief executive, Mr John Ward, was quoted as saying that although a merger of the airline with either Australian or Ansett was very unlikely, it was possible that Qantas could eventually obtain a shareholding in either of the two carriers. This, he said, was in the national interest so that Australia could have a strong integrated international and domestic airline operation to enable Qantas to better compete with the mega carriers growing in importance in the airline’s markets.

Qantas already has a 20% stake in Air New Zealand and agreements with foreign airlines, at least two of which will soon be able to buy a share in the airline now that it is to be 49% privatised. This, Mr Ward said, was essential “for our success and, in fact, our survival. . . ”

Fine for Smoking on International Flights:

Effective October 1, smoking on international flights between Australian airports can incur a $500 fine.

The new fine can be incurred only on that part of an international flight which is between two Australian cities. For example, on a Melbourne/Sydney/Los Angeles flight. smoking will be permitted on the Sydney/ Los Angeles sector, but not between Meibourne and Sydney. The new fine is an extension of the existing ban on smoking on domestic flights in Australia and applies to both passengers and crew. As well as a maximum $500 fine for individuals, a $2,500 fine can be imposed on airlines which fail to display “no smoking” signs and brief passengers accordingly on the affected sectors.

Saddam’s Airline Booty:

A lesser known fact of the Iraqi invasion of Kuwait is the seizure of over half of Kuwait Airways’ airliner fleet, together with the more publicised capture of the British Airways 747 caught on the ground at Kuwait City.

The seizing of the BA 747 at Kuwait City- perhaps the ultimate case of being in the right place at the wrong time – was widely publicised at the time of the invasion. With its crew and passengers forced to journey to Baghdad as ‘guests/hostages, the 747 was left on the ground in Kuwait. There it remains, fully fuelled up but looking like it will never leave. Common consensus is that the aircraft will not survive the crisis intact, probably destined to fall victim to either some well placed explosives or an innocent victim of a military air strike. BA have already filed a $US28m claim with Lloyd’s, the London based insurance firm, for the aircraft.

Kuwait Airways naturally suffered even greater fleet losses. Of its fleet of 23 aircraft, no less than 15 were seized by Iraqi forces, including three Airbus A300s, five A310s, two Boeing 7678, one 727, two Gulfstream G. Ills and two BAe 125s. These aircraft have been flown to Iraq as booty and are distributed around the country’s three main airports. Kuwait Airways have, however, been able to maintain reduced services from a temporary base in Cairo, Egypt. Fortunately the airline’s four 747s were beyond Iraq’s grasp as were three 727s and a 767, all of which were out- side the country at the time of the invasion, as were most of the airline’s senior management. Lloyd’s have again been big losers, having to pay $US524m for the stolen air- craft, which again are given little chance of long term survival.

Ironically, the aircraft are of limited value to the Iraqis. They cannot be flown on international flights for they would be impounded immediately. But this does not seem to matter to Iraq’s less than sane leadership, who perhaps only see themselves as having saved the cost of aircraft it originally had on order with Airbus.

Lufthansa Bans Smoking on All Domestic Flights:

Lufthansa has introduced a ban on smoking on all German domestic services.

The move to ban smoking came after extensive market research by the carrier. It revealed that over 90% of Lufthansa passengers would accept a smoking ban on German domestic flights, only 9% stating that they would not. Even the majority of smokers that Lufthansa questioned were in favour of a cabin free of smoke! A six month trial ban on smoking was completed on the Nuremberg/Cologne and Dusseldorf/Stuttgart routes with favourable results. A complete domestic smoking ban was therefore introduced, Lufthansa thus joining the growing number of western and Asian airlines. with smoking bans enforced.

Meanwhile, Japan Air Lines has opted to extend its no smoking ban to include all domestic flights of less than two hours duration. This effectively covers 16 of the airline’s 20 domestic routes.

New Cairns International Terminal a Boost for the Region:

Cairns Airport is experiencing a noticeable increase in international aircraft movements following the opening of its new international passenger terminal.

Between October and the end of the year a 40% increase in aircraft movements is expected, mostly as a result of additional Qantas services. Qantas has increased Tokyo/Cairns flights from three a week to daily, while two additional flights from Japan – from Nagoya and Fukuoka – will also stop at Cairns en route to Sydney each week. Services between Cairns and London will also be increased from three per week to five, while Christchurch/Sydney/Caims will now be offered as a daily service.

Other airlines are also expected to increase their number of services into Cairns, the Japanese market remaining a very strong source for inbound tourists. As a result of the increase in services, it has been predicted that the 1. 1m passenger movements recorded this year at Cairns will be doubled by 1993 and by 1995 three million passenger movements will be recorded, divided equally between domestic and international traffic. By 1996, international traffic should exceed domestic traffic, Cairns being the first Australian airport expected to achieve this result.

Meanwhile, showing the practical value of such an airport to the local community, a recent James Cook University study has revealed that the airport either directly or indirectly created almost 9,000 jobs in 1987/88 while related incomes were about $166m. Presently some 1,200 people are permanently employed at the airport, this figure being expected to rise substantially to cope with the predicted increase in movements.

Australia-Thai Aviation Relations Enter New Phase:

The Federal Minister for Transport and Communications, Kim Beazley, has announced a major expansion in airline services between Australia and Thailand.

Airline capacity for Qantas and Thai International will increase in two stages from October 1990 and 1991 by the equivalent of 14 Boeing 747 services a week in each direction, or almost 600,000 extra seats over a full year. Eight of these would be Qantas flights and six would be Thai International flights. “This will bring to 37 the number of 747 services that can be operated in each direction each week by the two airlines,” Mr Beazley said.

“Bangkok is already an important hub for air services to and from Australia and this agreement will provide significant new opportunities for the further development of inbound tourism to Australia and new export opportunities. This further development of Bangkok as a hub will also be of direct benefit to Australian travellers seeking faster connections to other points in Asia and Europe. ” New services are also planned to both Western Australia and South Australia. Thai International is about to begin a weekly service to Adelaide using an A310 aircraft and will also add an additional A310 service to Perth, bringing to three the number of services it operates between Perth and Bangkok each week. Qantas also plans to introduce, from November, two additional 747 services between Perth and Bangkok and a new service linking Cairns and Darwin to Bangkok.

 Qantas Now Offers Two Express 7478 Each Day to London:

Qantas has increased its fast flights to London from 12 to 14 a week and boosted its Asian network as part of schedule improvements which took effect in late October.

Two 747 services departing Australia every day will make only one overseas call- at either Bangkok or Singapore- en route to London. Both Sydney and Melbourne now have daily one stop and two stop flights to London.

The QF1 service will maintain its current routing but with later departure times. The flights will depart Melbourne at 4. 30pm, Sydney at 6. 15pm and, after calling at Bangkok, arrive in London at 6. 55am.

The QF9 flights will increase from five a week to daily services. All will be operated by 747-400 aircraft. These flights will depart Sydney at 3. 30pm, Melbourne at 6pm and, after a Singapore transit, arrive in London at 6. 10am. On Wednesdays, Fridays and Sun- days the aircraft will extend to Manchester, arriving there at 8. 10am. Returning passengers will have the choice of a daily 12. 15pm departure from London with the QF2 service (via Bangkok), or a 9. 15pm departure with the QF10 (via Singapore).

The new schedules also see more and faster flights from the east coast to Hong Kong. Non stop 747 flights from Sydney will increase to five a week, with a service on the other two days via Brisbane. Non stop flights from Melbourne to Hong Kong have also doubled to four a week, to be operated by 767-300 series aircraft offering first, business and economy classes. Perth/Hong Kong services also increase from one to three a week, via Singapore.

The new schedules will provide daily flights between Singapore and Bangkok, and three flights a week between Hong Kong and Bangkok. With direct Qantas flights from Sydney and Melbourne to Singapore, Bangkok and Hong Kong, and the Qantas flights linking all three Asian cities, it will now be much easier for Australian travellers to fly Qantas all the way on their south-east Asian itineraries.

Advanced Ambulance Station for Brisbane Airport:

South east Queensland’s first integrated aerial and coronary care ambulance station is to be built at Brisbane Airport.

The station will be manned by 14 staff on a 24 hour basis all year round and will be located next to the General Aviation area at Brisbane. It will combine aerial ambulance and medevac patient transfer facilities, including a direct aircraft to vehicle patient transfer capability, serving Queensland and NSW ambulance and aerial ambulance organisations.