Airline Affairs

Similarly, between Brisbane and Mackay. services will increase from just eight to 13 allowing Australian Airlines to better serve its own offshore islands such as Great Keppel off Rockhampton and Brampton off Mackay. The carrier will also operate from Caims to Darwin, Alice Springs and Gove, and will introduce new non-stop services between Cairns and Rockhampton, and Ayers Rock and Cairns, largely to assist the booming

international tourism market.

Australian Airlink is a subsidiary of Australian Airlines, however its crews and maintenance services are to be supplied by National Jet Systems under a commercial lease agreement, as previously reported in AA. The 146-100s will seat 58 economy passengers and seven business class in a five abreast configuration, their smaller size compared to a 737 allowing greater frequency on the routes to be operated.

To an extent Australian Airlink is a direct response to the recently formed Ansett Express (refer p. 24 Mar 91 AA), offering its parent the potential to utilise the obvious benefits of a smaller jetliner in place of larger twinjets which in a size restricted market do not allow sufficient schedule flexibility to be competitive.

 Fac Forecasts Strong Airports Growth:

The Federal Airports Corporation (FAC) is expecting strong growth in air-ports usage in the coming decade, and is therefore undertaking impressive redevelopments of several of its airport properties and facilities. At the moment, the FAC is one of the few Government statutory bodies in Australia returning a profit, primarily because of the financial profits made from the running of Brisbane, Sydney and Melbourne Airports. During 1989 and 1990, only these three airports and those of Canberra and Coolangatta returned a profit; the other 18 all recorded financial losses. The Corporation however aims to have all of its airports running profitably by 1993.

At present the FAC still earns a significant portion of its revenue from its aeronautical concerns, which account for 37% or almost $100m of revenue annually; 35% ($92. 5m) comes from commercial trading: 21% ($56. 6m) from property accounts; 3% from service recharges; and 4% from other businesses. For the future the FAC has tasked itself with achieving a 7. 5% return on assets before interest “in fair markets or foul”.

A strong growth rate for the FAC airports is expected. The nation’s busiest airports – Sydney, Melbourne, Brisbane, Perth and Adelaide-are expected to achieve long term annual domestic passenger growth of between 3. 3 and 5. 4%, though some airports such as Coolangatta (6. 5%) are expected to grow at stronger rates, with the highest performer being Alice Springs with an expected annual increase of 7%. In the near term Coolangatta is expected to experience an annual growth in passenger movements of 13% over the next two years, with airline movements increasing by about 16% over the same period, easily outstripping growth at both Sydney and Brisbane.

 Two Airport Rail Link Options:

The NSW Government has narrowed down to two the number of contenders for the Sydney City/Airport rail link.

The two consortiums chosen – Bechtel/ CRI/Westpac and City Tunnel/Transfield/ Macquarie Bank – have now been invited to submit more detailed plans to a high level Government steering committee. The committee’s report will then go to Cabinet for consideration, with a firm decision to made within the next 6-8 months. A firm decision is expected on time both because the rail link is needed to cope with passenger growth during the 1990s, and because it would help firm Sydney’s bid for the year 2000 Olympics.

The two short listed proposals are quite different, both in concept and cost, however both have definite merits. The Bechtel/CRI/ Westpac proposal entails the building of a dedicated railway running from unused underground platforms at Central Station to new stations at suburban Mascot and both terminals at the airport. This proposal would utilise extensive stretches of existing rail lines and would cost about $200m to build over three years.

The City Tunnel/Transfield/Macquarie Bank proposal involves building a new, dedicated railway from the East Hills line under the airport and Botany area to Redfern, from where it would continue underground beneath Pitt Street and the Harbour to Crows Nest and St Leonards. The cost would be about $1,200m and the rail link would take about seven years to build. Nel- ther proposal would involve taxpayers” money. Each would be privately operated, with private stations and independently determined timetables and fares.

And on a good note for Qantas workers, both proposals involve the building of a Jet-base station. In a survey of Qantas workers conducted in October 1990, most Mascot based staff said they would prefer to travel to work by train if a convenient rail service was available.

United Refused Japan/Australia Rights:

The Australian Government has again refused to grant US carrier United Airlines the right to fly from the US to Australia via Tokyo.

United contends that it has the right to do so under the existing bilateral agreement. However both Qantas and the Australian Government contend that United is simply seeking to grab a slice of the lucrative Japan/ Australia market currently shared between Qantas, JAL and ANA. Given the availability of direct US/Australia services with several carriers, it would be unlikely that many (if any) travellers would elect to fly Australia/ USA via Japan; most passengers would be Australia/Japan and Japan/USA travellers.

Having been refused Australia/Japan rights yet again, United is now expected by some industry observers to reapply and/or ask the US Dept of Transportation to retaliate against flag carrier Qantas.

 Huge Fall In First Quarter Ticket Sales:

Figures now available reveal the extent of the downturn in both international and domestic travel agent ticket sales in Australia.

Net sales during the first quarter dropped dramatically by 25%, though the number of ticketing transactions held relatively steady with a drop of just 3. 6%. This suggests that sales were mainly for domestic tickets, which generate much less turnover than the more expensive international air tickets. Travel agents themselves were hit quite hard during the period, with commissions falling by 31% and refunds to passengers being 19% above that recorded during the same period of 1990. In March, the worst of the three months in the first quarter, net sales were 28% down on the same period last year, commissions dropped by 32% and transactions were down 10%, though requests for refunds slowed. The big seller in the market is Australian holiday packages of less than $1,000 in cost.

Australian Cargo Renamed and Updated:

Australian Cargo has been renamed Australian Airlines Express, a name designed to reflect the improved efficiency of the cargo operation.

Amongst its organisational improvements, Australian Airlines Express has introduced a new bar code labelling system, designed to speed the handling of domestic air freight and to readily determine where an item is at all times during its journey. Similarly, the name change has been introduced to “help convey the image of a fast, efficient handling company research [having] made it clear that the word “cargo’ created an image of slow bulk shipping. ”

The bar code system has been under development for more than two years, and once initial testing in the Sydney region has been completed will be introduced Australia-wide. Further features of the electronic based system will be the introduction of electronic weighing and measuring of items, with information fed into the computer sys- tem, and the installation of data screens in courier vans to enable pick-up and delivery information to be despatched directly and more efficiently between the driver and despatch office. With the introduction of the new, more efficient computer based system will also come the expansion of Australian’s own courier service.

Avianca Crew Blamed for Crash:

The US National Transportation Safety Board has blamed the pilots involved for the crash of the Avianca 707 whilst on approach to New York’s Kennedy Airport on 25 January this year.

The Board found that the probable cause of the crash was the failure of the Avianca flightcrew to effectively manage the aircraft’s fuel usage and alert air traffic controllers of their emergency situation. Contributing causes were the flightcrew’s failure to work with airline dispatchers; the lack of standardised, understandable terminology to notify controllers of the emergency; and the Federal Aviation Administration’s inadequate air traffic flow management on the day. Action has been taken to improve some of the lesser contributing facts of the crash, however only a better standard of training and flying could have saved the 707 and those on board.

American Axes First Class to Us:

American Airlines has dropped First Class from its US/Australia services as part of its renewed marketing campaign.

The airline has instead introduced a two class DC-10 configuration seating 290 passengers on the trans-Pacific route. Business Class has been radically upgraded to include 34 seats, “the roomiest in the sky”, with six abreast (2-2-2) seating with 44 inch pitch, up from 40 inch; plush, contoured leather seats covered in soft lambs wool, with swivel-arm

meal tables and hydraulic foot rests; first class drinks, blankets and pillows, and an amenity kit and gift.

Economy Class has also been increased to 256 seats, with American becoming the first US airline to offer slipper socks and eye shades for economy passengers. It will also introduce a “Movie snack”, and a special bar at the rear of the aircraft serving drinks, sweets and cookies.

Virgin to Commence Heathrow Flights:

Virgin Atlantic Airways will commence services from London’s Heathrow Airport for the first time on 1 July, with daily services to Los Angeles, New York and Tokyo.

Chairman and owner of the airline, Richard Branson, stated that the move to Heathrow was the “culmination of years of struggle”. the main antagonist being British Airways which until recently had so successfully guarded its interests at its Heathrow hub base. “Our dream of being able to compete on a level playing field with the other long haul carriers is now a reality, and we will no longer be forced to operate at a severe commercial disadvantage. ”

Virgin will continue scheduled services and charter operations from Gatwick, from where it launched services to Boston on 30 May. The airline has however upgraded facilities at Heathrow so that it can now offer the same services to passengers at both primary London airports. These include for Upper Class passengers a free limousine collection service and a dedicated lounge facility.

 Compass Passengers Now Barred From Using Flight Deck Lounges:

As the relationship between Compass Airlines and their Australian Airlines landlord at the key ports of Sydney and Melbourne continues to deteriorate, the host airline has now moved to restrict entry to its Flight Deck lounges to passengers primarily flying with Australian.

The move comes at a time when more and more Flight Deck members are flying Compass rather than Australian, largely as a result of the new carrier’s expanding schedules. Whether through wishing to save money or just for curiosity value, Flight Deck members flying Compass have up till now also enjoyed the benefits of the landlord airline’s comfortable lounges whilst flying the competitor carrier.

Whilst this was a ‘nightmare’ that Australian always knew would happen, they have held off till now before taking a firm decision to implement a boarding pass check before allowing entry to the lounge. Entry is being allowed to travellers on the basis that they have booked at least one sector on Australian with the only lounges being involved being those of Sydney, Melbourne and Bris- bane where Compass has its own terminal yet both Golden Wing (Ansett) and Flight Deck lounges are in close proximity to the Compass gates.

While the move is an obvious embarrassment to Australian in that it is having its lounges filled at peak times with non-Australian travellers, it will certainly be a difficult and potentially embarrassing policy to implement given that there is nothing specific about selective entry limitations in the club’s application form.

 Atlantic Facing a Marketing Bloodbath:

Competition on the transatlantic market is set to intensify as the peak northern summer season dawns and airlines find themselves battling for key routes.

Most at stake are London services, with it being estimated that there will be at least 58 additional return flights into London Heathrow and Gatwick per week this summer, bringing to 838 the number now on offer. This will create an additional 16,350 more seats per week, despite the fact that traffic growth remains at best very slow and the price war is already biting into carriers’ profits. British Airways may be the big loser, for this will be the first summer season in which it has had to compete so strongly against so many airlines, including British rival Virgin Atlantic and the US mega carriers new to the market, industry giants United and American Airlines. It is therefore expected that not only will competition for London/US traffic be stronger, but the price war wil intensify perhaps to epic proportions, further lowering airline yields and accelerating losses at a time when the opposite should be occurring.

 Qantas Aims to Secure New Asian Markets:

Qantas is aiming to secure a slice of the growing South Korean travel market when it commences services this year, and is lining up to eventually offer scheduled Vietnam flights.

Qantas inaugurates weekly non-stop 767-300ER services to Seoul on 2 November this year, effectively tapping into the South Korean travel market, which has been grow ing at a steady rate since travel restrictions were lifted in 1989. South Korea, Australia’s third biggest trading partner, is expected to provide the next wave of international travellers to Australia as its citizens increasingly look to international travel with money to spend. In the 1989/90 financial year Australia experienced a 25% increase in visitors from South Korea, and the Australian Tourist Commission has now targeted the country for further promotion. Qantas will compete with Korean Air direct from South Korea, and also Japanese carriers ANA and JAL who can carry passengers via Japan.

Also fast growing in importance as a tourist market is Taiwan, Australia’s fifth largest trading partner and one whose citizens are increasingly travelling abroad as a result of economic prosperity. This market has effectively also been tapped by forming Australia Asia Airlines, which will use a leased Qantas 767-300ER.

Meanwhile, Qantas is now flying charter flights to Vietnam with a view to future scheduled operations. At present, Australia’s 140,000 expatriate Vietnamese are being targeted by the current charterer Direct Air. The first 767-300ER flight to Vietnam was in December last year, and since then all passengers have primarily been Vietnamese people visiting friends and relatives in their home country, with services to date achieving a healthy 85% load factor. However Vietnam is also opening up as at potential tourist destination, and when more scheduled services by international carriers are permitted Qantas will hopefully already have a firm footing in the country.

 Lauda Plans Melbourne Services:

Austrian airline Lauda Air is planning to serve Melbourne from later this year.

Lauda commenced services to Australia in May 1988 with one flight per week linking Sydney with Vienna. Since that time services have expanded to currently include two Australia/Vienna services per week (via Phuket, Thailand). In December last year Lauda successfully concluded negotiations for a third Australian service to commence in March 1992, and at the same time was granted the right to fly into Melbourne and also fifth freedom rights to fly passengers between Sydney and Thailand.

Crew Module Attracts Interest:

The cabin crew rest module pioneered by Qantas for long-haul flights is now attracting considerable interest from other international carriers.

The 700kg roll on/roll off rest module was originally designed and built by Qantas Engineering and Maintenance personnel in consultation with the airline’s Cabin Services section. It was designed to be installed in the lower forward hold of Qantas 7478, with access via a hatch in the forward galley floor. Each module contains six bunks and two divans though they can be modified to accommodate up to 10 bunks for use in any widebody airliner.

Qantas is presently the only carrier to use the module, however usage of the modules is not presently high as the 747-400, which now flies most of OF’s long-haul services, is factory supplied with crew rest facilities in the rear of the aircraft.

However with interest in the unit now quite high from other carriers operating older model aircraft, Qantas has cashed in on the concept and sold the manufacturing rights to US firm Elsinore Aerospace, of California. Unfortunately this does rule out future Australian manufacture.

Japanese Want Cheaper Airfares:

Japanese tourists flying to Australia want cheaper airfares between the two countries, according to JTB Australia, a leading inbound operator.

Reduced airfares would attract even more Japanese tourists to Australia, while reduced hotel rates in Australia would also attract both more tourists and more Japanese convention groups. Australia is viewed by the Japanese as a relatively safe, clean and politically stable overseas destination, with the advantage that it can be reached by air in about nine hours with little time difference between the two countries. Lower airfares could tilt the balance in Australia’s favour over Europe, which can be reached in about the same time and at about the same price, though without the same feeling of security and cleanliness.

In 1990, 11 million Japanese travelled abroad, though Australia achieved only a relatively small proportion of these. It was however the number one honeymoon destination (22% of the market). Interestingly. though 11 million Japanese did holiday overseas, this is just 8% of the country’s population, compared with 11% of Australians, 17% of Americans, 22% of New Zealanders, 51% of Britons, 53% of Canadians and 96% of Swiss! It is estimated that around 20 million Japanese will holiday overseas by 2000.

 Eastwest Farewells Last F27:

Eastwest’s last remaining Fokker F27 Friendship, VH-EWP, has left the airline for its Defence contract work.

The aircraft has been modified to conduct aerial mapping for the Department of Defence as part of an $11 million engineering contract won by Eastwest in 1988. It has undergone major structural modifications so it can undertake high-tech laser coastline surveying. It will be based in Adelaide and has been commissioned into the RAN’s Operational Hydrographic Service.

To bring the aircraft to this stage of the Laser Airborne Depth Sounder project (LADS), Eastwest engineers have been involved in 9,690 hours of design and 6,200 hours of drafting time. Some 2,300 drawings were produced for the work, and Eastwest workers spent 45,000 hours in manufacturing, installation and systems integration work associated with the project.

Antonov for Australia?:

Oume-based company Antonov Airlines is discussing the possibility of basing an Antonov An-124 in Australia.

The company has aspirations to utilise Antonov aircraft to move large items around the world on an ad hoc basis, with the emphasis being on traffic to and from Australia. A company spokesman has stated that it has long established links with the Soviet Union (it was at one stage flying a wet leased An-124 on trans-Tasman freight operations) and negotiations are currently underway with the Laos Government to partake in a joint venture. It is anticipated that most shipments will be large, bulky items associated with oil and shipping companies and the like. The Antonov An-124 has no standardised airline container facilities.

Also, the company is remaining coy on the aircraft’s expected performance figures. Readers may be aware that the Antonov’s engines consume a significant amount of fuel not dissimilar to the early generation P&W JT91 (Peter Gamble)

 Qantas Achieves Peak Schedule Reliability:

Qantas reports that its on-time performance, which just two years ago was amongst the worst in the world for an international carrier, is now up amongst the best.

Qantas’ on-time reliability two years ago was far from anything to boast about, with just 60% of flights departing on time (with a record monthly low of 44%), much to the chagrin of many a passenger and crewmem- ber alike. However after a concerted campaign to improve efficiency, most notably in the area of baggage handling, Qantas staff nave been able to lift the on-time departure reliability rate to well above the target 75% mark in March an average of 87% was achieved, whilst other months are now consistently in the low 80s.

 American Offers More Us/UK Services:

American Airlines is now offering 105 transatlantic US/UK flights per week, more than any other US carrier and most other competitors.

Flights now operate daily between Heat-hrow and the US cities of Los Angeles, New York and Boston (routes recently acquired from TWA for $US445) as well as the newly acquired services to Chicago, Miami, Boston and New York/Newark. Services between London Gatwick and Dallas-Fort Worth, Miami and Chicago are also offered.

 Air Botswana Opens Australian Marketing Office:

Air Botswana, reputedly the fastest growing regional airline in Africa, is now represented in Australia by Peter Gisbome and Associates.

The IATA member airline currently operates to 20 domestic and regional destinations in Africa, including the capitals of Botswana, Tanzania, Zimbabwe, Malawi, Angola, Zambia, Swaziland, Mozambique, Lesotho, Namibia, South Africa and Nairobi. Established as a Government owned airline in 1988, its fleet now includes two ATR42 and two BAe 146-100s, surely making it one of the more modern equipped, though admittedly smaller carriers in the region.

Air Botswana’s services will now be extensively promoted in Australia and full reservations, sales and ticketing facilities will be available. The airline’s aim is to capitalise on the Australian tourist potential and to “quickly establish Air Botswana in the market place and work closely with the industry to capitalise on the new travel opportunities now available. This will involve a strong relationship with Qantas and other major international carriers in the region. ” Qantas presently flies into Harare, Zimbabwe twice weekly and is aiming to reintroduce South African services as soon as practical. As for an onward journey to Europe, Air Botswana offers international connections via British Airways and UTA