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The new airline will also be introducing a business class on all its aircraft and has already moved to eliminate one seat row from the F50s to increase seat pitch to a very generous 33in.

AA Comment: Congratulations Ansett. Readers may have noted that for years now we at AA have been constantly critical of the lack of hub bypass services offered by the airlines. With deregulation that is all changing and Ansett is now well positioned, via its fast and small F28 jets, to reap rich rewards in this long overdue market sphere. As ant after thought, this is one example of deregulation making flying safer. When it is considered that the vast majority of accidents (and incidents) occur in the descent, landing or takeoff phases of flight, then the effective elimination of one sector must make flying safer overall. Particularly when it is considered that the port saved is always either Sydney, Brisbane or Melbourne, which in adverse weather conditions during the evening peak is to be well avoided by those able to do so.

Airbus Reports Strong Sales:

Airbus Industrie figures for the first nine months of 1990 reveal strong sales, though down on the corresponding period of 1989.

During the first nine months of the year some 254 firm orders were recorded (310 in the corresponding 1989 period), more than half of which were for A320s and A321s. The orders recorded saw total Airbus orders since its establishment two decades ago exceed 1,500 to a total of 99 customers. Deliveries of airliners in the first nine months totalled 62, compared to 79 during the same period of 1989, the BAe strike being the cause of this drop in production. Over 600 Airbus aircraft have now been delivered to customers, with the 500th Airbus widebody twin being delivered to Monarch and North-west Airlines accepting the 100th A320.

In addition to sales and deliveries which

remained strong, Airbus Industrie expects during the 1990 calendar year to record its first operating profit. With its full range of air-liners achieving excellent sales, the organisation has indeed progressed a long way since the situation twenty years ago when its only product was the A300 and its only customer Air France.

Compass Targets Business Fliers:

In its latest marketing strategy. Compass has launched an innovative offer aimed at capturing a slice of the lucrative business travel market.

Having already offered such incentives as permanently discounted, no conditions travel and free flight for one child in a family group, Compass is now offering business travellers two seats for themselves-an aisle seat plus a guaranteed vacant seat next to them for a Compass business fare, equivalent to an economy fare of the two major domestics. This latest initiative is yet another part of a well planned strategy aimed at attracting as many passengers as possible from the well established Australian and Ansett, and making Compass a force to be reckoned with.

Meanwhile, Compass officials are reportedly confident that they will be able to absorb the higher than expected fuel cost increases so that adopting the 7. 5% price rise announced by the two majors (effective from day one of deregulation) will not be necessary. Fuel costs had (at the time of writing) risen to 36 cents per litre, compared with the 22 cents quoted in the airline’s prospectus, however a rerun of its costings has reportedly enabled Compass to offset much of the rise, albeit with a small decrease in first year projected profits.

Compass has also decided to operate from the international terminal at Perth after failing to reach agreement with Australian for use of one of their domestic gates. Oncarriage in WA is basically the province of Ansett, via Skywest, so not being located specifically at the primary domestic terminal in that city is not the problem that it would be at any of the other capital cities where Com- pass will either use the Australian terminal or FAC supplied facilities.

 Australian Strengthens South Pacific Links:

Australian Airlines and Solomon Airlines have signed a commercial alliance to expand the two airlines’ marketing opportunities in the South Pacific.

According to Australian chief executive, Mr John Schaap, the new commercial alliance “will further strengthen Australian’s links in the South Pacific at a time when international tourism and business traffic is steadily increasing in the region”. The signed alliance covers agreement on the oncarriage of customers between both airlines, introduces a number of marketing strategies aimed at consolidating the close working relationship and provides further opportunities for closer cooperation between the two airlines. Under the new arrangement, Solomon Airlines’ ground handling in Australia will be managed by Australian Airlines from early next year.

 SYD Peak Period Surcharge Introduced:

The Federal Airports Corporation (FAC) has introduced (effective 1 January) its controversial Sydney Airport peak period surcharge.

The new surcharge must be paid by all aircraft-general aviation, freighters, domestic and international passenger jets – which land or take off at Sydney Airport during peak periods. There is no distinction made between aircraft size or passenger capacity, all aircraft being subject to the same surcharge arrangements. The FAC has identified the peak periods at Sydney Airport as being from 8am to 9am and from 6pm to 7pm, Monday through Friday. During these periods a $250 surcharge for each landing and each takeoff will apply. In addition, during the busy shoulder periods (7. 30am to 8am, 9am to 10am, 5pm to 6pm, 7pm to 7. 30pm) GA and non airline aircraft will pay a $200 surcharge for each landing and $100 for each departure, these charges effectively replacing the existing minimum landing charge of $220 for these aircraft. The FAC believes the new surcharges will reduce congestion at a cost to smaller airlines who do not reschedule of just $3 to $10 per passenger, making it an effective but cost-efficient scheme.

The Regional Airlines Association has, however, condemned the new surcharge. It claims that the peak period surcharge was introduced using old information, ignoring the beneficial effects of recent initiatives such as simultaneous landings and the ending of cluster scheduling. The surcharge is seen by most within industry as merely a money grabbing exercise (refer Recce), for the newly introduced initiatives have improved traffic flow considerably, while air traffic controllers have indicated that they were well able to handle the present Sydney Airport peak period movements and at times there are even gaps available to aircraft during these periods.

The problems to be faced by regional airlines can be well seen when one considers, for instance, the plight of a nine seat Chieftain commuter aircraft operating into Sydney Airport. Should it land during the peak. period, the new surcharge would (assuming a typical load factor of seven seats) cost passengers (to whom the surcharge must inevitably be passed on) $35. 70. This is on top of increases brought about by fuel price rises and the prospect of proposed new landing charges at many country airports, a move made necessary by the ending of Federal Government funding of these airports (refer p. 87 Nov 90 AA). All this in an economy which in the country is particularly hard hit and whose regional airline services have suffered considerably since the mid 1970s, with the majority of non tourism based ports actually suffering a decline in passenger uplift in that period.

Understandably the major domestic airlines have welcomed the new surcharge. They of course can easily absorb the new charges and, with a reduction in fuel use on the ground because of reduced delays, will probably even save money.

 Hazelton and Eastern Greatly Disadvantaged by Arrival of Compass:

The commencement of operations by Compass Airlines at Sydney Airport is causing a major headache for regionals Hazelton and Eastern.

The problem revolves around the two new gates which Australian has grafted onto the south western sector of its passenger terminal. These gates absorb 50% of the parking space formerly set aside for commuters using the terminal. Whereas space previously existed for upwards of 11 commuters, there will now exist parking space for typically only two 36 seat propjets and three 18 seaters. Other aircraft will have to be parked well away from the terminal necessitating the use of bussing for the first time for Hazelton and Eastern. To facilitate this at least two buses will have to be in inventory operating three shifts per day, seven days a week with driver staffing to match. On top of this, additional baggage carts and tugs will have to be acquired due to the extra time taken to deliver baggage to aircraft well away from the Australian terminal.

Both airlines are concerned about the economic burden that this places upon them at a time of increased airport fees (refer story elsewhere), soaring fuel costs and a recession that has eroded the rural traffic base greatly this past year.

Buran for Australia?

Believed Australia bound in the first quarter of 1991 will be an Antonov An-225 Mriya (Dream) complete with piggy-back Buran orbiter.

The duo will be touring Australia as the flagship of a Soviet Union sponsored contingent to boost its Cape York Space Base efforts. Inside the giant six engined Mriya will be displayed a large selection of Soviet hardware commemorating four decades of achievement in space. It is believed that the aircraft will visit most of Australia’s capital cities and will be available for public display. For more information contact (03) 696 2666.

Australasian Internationals  Commit Fiscal Suicide:

Just when Qantas had reported a $A125m operating loss (transformed to a modest SA12m profit by the sale of aircraft), suffered the effects of a massive increase in fuel costs and announced the shedding of over 500 jobs amidst a very tight year to come, what does the airline do but offer a 30% across the board discount on all its services from late November right through till next March.

The special 70% of full fare campaign coincided nicely with the carrier’s 70th birthday ‘celebrations’ and was meant to boost its load factor through the off season in all three classes. What happened though was that a day after Qantas announced the yield slashing fares its primary rivals followed suit to cut it off at the pass. BA waged in with the same offer, Singapore cut even more whilst Air New Zealand offered 40% off its competitive trans-Tasman routes.

BA is looking at a significant decrease in profit for this year as is Singapore, while Qantas and Air New Zealand are also in a very poor state at present. Is this really the time for such fare giveaways, specially considering the recent round of increases that all of these carriers introduced during October to offset their soaring fuel bills?

Three Qantas Deliveries for December:

Qantas is to take delivery of three new aircraft in the space of just six days. during December.

Scheduled for delivery on 17 December is Qantas’ 14th Boeing 767-300 VH-OGG, which will be followed three days later by the airline’s ninth 747-400, VH-OJI. The third new arrival will be 767-300 VH-OGH, which will fly into Sydney on 23 December. The arrivals represent a net increase of one airliner in the Qantas fleet as the P&W powered 747-200 VH-EBH flew out of Sydney in late September and VH-EBI is scheduled to depart Syd- ney on 15 December. The next important delivery will be that of Qantas’ tenth 747-400, VH-OJJ, which will arrive in Sydney during February.

With its fleet replacement program well underway, the Qantas Board has decided to bring forward the sale of the airline’s older. Pratt & Whitney JT9D-7 powered 747s. With VH-EBH and VH-EBI already sold, VH-EBK and VH-EBL are due to leave Qantas service in February and April 1991 (refer Newsdesk November 90 AA). The remaining P&W powered 747-200s should leave the fleet during the 1991/92 financial year. These are VH-EBJ, -EBM, -EBN, -EBO and -EBP. The remaining two P&W powered -200s presently operated, VH-EBA and -EBB, are leased aircraft due to leave service in August 1993. Once these aircraft depart, all Qantas 7478 will be Rolls-Royce RB211 powered.

Meanwhile, 747-400s now operate on flights QF1/2 (Sydney/Bangkok/London and return) on two of the daily services, replacing 747-300s. In January -400s will fly the route four times per week, by April six times per week, and by May the QF1/2 service will be operated by 747-400s daily. OF9/10 (Syd- ney/Singapore/London and return) are already flown by 747-400s. The displaced -300s will mainly replace -200s on services to Japan, Hong Kong and Kuala Lumpur.

Western European Defence Industry Faces Grim Prospects:

Western Europe’s defence industries will contract by up to one third over the next five years, according to the Stockholm International Peace Research Institute (SIPRI).

With the Cold War now formally ended, defence producers are facing the prospect of falling defence budgets and declining exports as many countries reduce their defence expenditure.

The biggest losers are said to be producers of heavy AFVS and warships. By far those with the best prospects are companies in the electronics field, whose products remain in demand and can usually be converted to civilian use. But with military expenditure cuts likely to affect all defence related companies in some way – defence production in European NATÓ countries should fall 15-35% from the $35bn baseline set in 1989 – SIPRI predicts that 350,000-500,000 of the industry’s 1. 4m jobs could go by the mid-1990s. About 100,000 workers have already lost their jobs over the last three years.

The aerospace industry, however, could come through relatively unscathed because air force capability remains a top priority. while manufacturers will also be able to take advantage of demand for civil aircraft.

SIPPI does, however, note that with manufacturers largely dependent on just three major military fighter aircraft projects – France’s Dassault Rafale, Sweden’s Saab Gripen and the multinational Eurofighter – the potential for crippling problems remains high, particularly should one or more of these projects be cancelled or severely cut back.

Continental Drives to Conserve Fuel:

In the wake of the Gulf crisis fuel price hikes, US carrier Continental Airlines has expanded its efforts to reduce fuel consumption.

The airline has added additional personnel to its fuel conservation task force to implement cost saving measures to normal operatons. Potential new work practices include using ground vehicles instead of an aircraft’s engines to push airliners back from gates converting ground equipment to use alternative non gasoline energy sources, flying cleaner aircraft to reduce drag, and introducing weight saving measures in the galley and cabin areas. If fuel consumption can be cut by just 1%, Continental will save at least $US16m annually.