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Northwest has had its own cash problems, but these have been alleviated to an extent by the airline’s home state of the airline SUS740m, half of which will be used to build two maintenance facilities in Minnesota and the remainder for unspecified “other uses”. A major feature on Northwest appeared in our November edition.

Northwest is meanwhile delighted with the response to its new Sydney/Osaka service (refer p. 22 Nov 91 AA) which is being extremely well supported by freight forwarders who can now send perishables directly to the Japanese city. The Sydney/Osaka flight continues onto New York, and the airline is reporting 80% load factors.

However, Qantas is not as delighted with the service as reciprocal rights were not granted to it, an “unprecedented” decision according to the Australian flag carrier’s chief executive. Qantas will eventually be able to service slot restricted Osaka, but not until 1994 at the earliest when the new Kansai Airport is completed.

 Compass After Govt Business:

In an attempt to break the stranglehold Australian and Ansett have on government department air travel, Compass Airlines is undercutting its rivals by one third on ther full economy fares.

The move is designed to test the resolve of government departments to reduce costs by taking the cheapest option. The unconditional offer provides further discounts on Compass’ own standard fares, which are on average 20% lower than those of Australian and Ansett. Even though Compass has a 12% share of the total domestic market and 24% of the routes on which it flies, it has less than 5% of government travel business, the airline’s lack of first and business classes explaining this to a large extent.

It will be interesting to see if the other airlines match the fares and if some senior pub- Sic servants are prepared to ‘rough it by travelling economy class.

36 Squadron’s 50th:

The RAAF’s No 36 (Transport) Squadron, currently flying C-130H Hercules out of Richmond, will be celebrating its 50th anniversary early next year and all former members are invited to attend the festivities.

The celebrations will take place between 28 February and 1 March 1992 at Richmond and will include a colour parade reviewed by AVM Barry Gration, a barbecue for all squadron members and their families, a golf morning and a scenic bus tour to Katoomba. For information telephone (045) 70 3610.

 Qantas Happy With Korea:

Qantas’ new once weekly Boeing 767-300 service to Seoul (Korea) has recorded strong customer support with inaugural flights running at bet- ter than 90% load factor.

Average loads are expected to settle down to about 70% (higher than originally anticipated) with the strongest demand coming from Korea. It is estimated that some 6,000 Korean tourists would use the service to travel to Australia in the first year. This is expected to increase as additional frequencies come online through 1992/93.

Meanwhile, Qantas’ twice weekly flights to Taipei in Taiwan-flown in the colours of subsidiary Australia Asia Airlines are also going well, to the extent that the airline has already added a third weekly flight.

As for another potentially important route, Qantas and South African Airways representatives have recently met to discuss the early resumption of flights between Australia and South Africa. Flights should commence this month after approval for services was given at the recent Commonwealth Heads of Government Meeting in Zimbabwe.

 Alice Springs Charters:

Alice Springs is becoming a centre for international charter flights. A US charter flight with 200 passengers on board arrived there in November, while Bulgarian company Jes Air will start a series of nine flights in December. British charter operator Britannia is also proposing to operate 44 flights to the Northern Territory in 1992/93.

 Close Shave:

It’s just as well Santa Clause has his own airline (SAS?) and doesn’t rely on Air New Zealand to deliver presents to children at Christmas time.

The Auckland Employment Court has ruled that ANZ’s pilots must be clean shaven (apart from trimmed moustaches) following an Airline Pilot’s Association challenge to an ANZ ban on beards on its flight crews. We assume they meant male flight crews! The airline says it banned beards in the interests of safety, although we don’t know exactly which areas of safety will be compromised if a pilot or flight engineer has a beard.

Curiously, the presiding judge was bearded!

Ansett Quits Polynesian:

Ansett Airlines has served notice that it will bail out of its operating agreement with Polynesian Airlines only halfway through the contracted term.

Ansett has given Polynesian six months’ notice of its withdrawal with terms still to be negotiated. Polynesian operates a single Boeing 727 leased from Ansett and flies from Western Samoa to Australia, New Zealand, Tonga, American Samoa and the Cook Islands. It lost SA1. 6m last year.

Caa Job Cuts Begin as Caa Records Modest Profit:

The Civil Aviation Authority’s staff reduction program has got underway, with about 400 employees having left by this Christmas.

The CAA plans to slash its 7,300 strong workforce by half over the next four years, with 2,500 going by mid year. Some 2,000 have expressed interest in taking voluntary redundancy.

Meanwhile the CAA has announced that in the 1990/91 year it made an operating profit of $3. 3m after taking account of a $32m write down of assets. Deregulation had assisted the CAA greatly with an increase in RPKs of more than a third during the period.

At Last, the Third Runway:

Federal Cabinet has finally given formal approval for the construction of Sydney Airport’s third runway (refer p. 23 Nov 91 AA).

The decision was made easier for the government due to the high rate of unemployment in Australia and this issue featured strongly in the announcement that the runway would go ahead. According to the government, construction of the runway will immediately create 250 new jobs, 500 by the end of construction and 13,000 over 20 years. Work is scheduled to be finished by 1995.

Meanwhile, the anti-third runway lobby- which includes a number of government back benchers and Labor councils in the Sydney Airport area – has threatened legal action against the runway but at presstime all was quiet. Ironically, Labor dominated councils in the Badgery’s Creek area west of Sydney have threatened legal action against the third runway because they want a new airport built in their area. Instead, it now appears that Badgery’s Creek will see the construction of a new general aviation facility rather than international airport.

Btrwins Hawker Siddeley:

After a two month battle, UK based BTR Plc has gained control of the Hawker Siddeley group after shareholders accepted its $A3. 4bn takeover offer BTR now owns 72% of Hawker Siddeley’s issued capital.

BTR or its Australian subsidiary, BTR Nylex, will now have to bid for HS’s Australian subsidiaries, including Hawker de Havilland. If HDH does come under BTR’s control, it is not unreasonable to expect significant changes within the company’s structure.

Traffic Still Soft:

International scheduled traffic figures for the month of September 1991 show that although traffic matched the levels reached in 1990, they are nevertheless disappointing because the airlines need growth to return to profitability.

The important revenue passenger kilometers (RPK) figure for September exactly. Matched that of 1990 (down 3% on the first nine months of the year), seat availability increased by 2%, passenger load factor was 70% (67% for the year to date) and freight revenue tonne kilometers (RTKs) was down 4%. The strongest growth was recorded in Asia, where international passenger traffic was up 6% in September compared with 1990. Despite this, Asian carriers report an overall decline of 4% over the first nine months of the year.

 American Withdraws From Australia, Announces Cuts:

American Airlines, the west’s biggest airline, has announced it will cease operating its four weekly flights between Dallas/Fort Worth and Sydney, effective March 1992. It will also end its operations to New Zealand.

AA has blamed route unprofitability for the withdrawal, citing recession, overcapacity and a level of discounting which makes profits impossible to achieve. American began operating to Sydney in February 1990 and at the time warned it would withdraw if the route proved unprofitable. The airline has stated that it can’t fly unprofitable routes indefinitely and has a responsibility to its shareholders. It’s interesting to note that overall, American Airlines is operating with high load factors but more than 92% of passengers are travelling on tickets which are discounted more than 60%.

Meanwhile, American is cutting its capital spending generally by deferring or cancelling options on new aircraft. Its fleet will now grow from 602 aircraft to 682 by the end of 1992 and not to the planned 775. It will con- sequently not take up existing options on 33 Boeing 757s, 12 Boeing 767s, 11 McDonnell Douglas MD-11s and 37 Fokker 100s.

It is also considering upgrading its DC-10 fleet instead of buying new Boeing 777s. The upgrade would include re-engining with Rolls-Royce RB211-535 engines.

 Airbus and Compass Settle:

Compass Airlines has concluded a $25m cash and spare parts compensation settlement with Airbus Industrie after the airline. Sued the manufacturer over late delivery of one of its A300 aircraft.

The A300 was originally scheduled to be delivered in May 1991 but was delayed until August after sustaining tail damage after a ground mishap in Europe prior to delivery.

Compass is also suing Australian Airlines over the latter’s alleged failure to satisfactorily honour obligations to provide Compass with terminal gates. The amount Compass is seeking has not been revealed. Compass is also in dispute with Australian over rent levies with a decision expected this month.

BA Mega Airline:

Discussions have begun which could see the establishment of the world’s largest airline, a combination of British Airways, KLM, Northwest and Continental.

Talks are only in their very early stages at the moment, but the ‘mega airline – which has been called “British American’ in the UK press would be the first global carrier if established and it would have a fleet of nearly 1,000 aircraft.

BA and KLM have previously had talks about linking up, while the Dutch airline has a 20% stake in Northwest, which is itself keen to gain control of financially troubled Continental.

Raaf 707 Crash Investigation:

The crash of an RAAF Boeing 707 transport aircraft from No 33 Squadron into the sea off Victoria in late October was still under investigation at the time of going to press, with no definite cause as yet made public. The 707 crashed off Woodside Beach into about 20 metres of water apparently during an asymmetric flight training sequence. All five crew members on board died, and the pilot was able to broadcast just one Mayday call before the aircraft hit the water in what appeared to be a spin. The Cockpit Voice Recorder and Right Data Recorder were recovered from the wreckage and data from these and other sources will be presented to a formal Board of Inquiry. Based at Richmond NSW, No 33 Squadron operated six 707s, two of which have been modified as aerial refuellers. The lost ex-Saudia 707 was not one of these. The 7078 were temporarily grounded after the accident but allowed to fly again after it became apparent that the accident was not caused by a structural failure or systems malfunction. Two weeks after the 707 crash, an Army Pilatus Porter with ten people aboard crashed shortly after takeoff from a strip near Nowra. The eight passengers were army parachutists about to undertake a training jump, and two of them were killed. The pilot was seriously injured but it is hoped he will be able to tell investigators why the Porter banked and dived to the ground immediately after takeoff.

Jet: Transcontinental Gets First

TransContinental Airlines, which hopes to commence operation with 737s in the first half of 1992 has acquired its first jet.

Not an RPT suitable jet, the fledgling airline has actually purchased VH-HVM, a Cessna Citation I from the Myer family for personal use by TransContinental senior executives. The handover of the aircraft, subject to finances being exchanged, was due as we went to press.

Coalition to Free up Qantas, Privatise Fac:

In its recent GST policy statement the Coalition verified that it would allow Qantas and Air New Zealand free access to Australia’s domestic routes. The Coalition would also sell 100% of Qantas and privatise the Federal Airports Corporation.

Already underway though are high level talks aimed at scrapping all cross border trade restrictions between Australia and New Zealand with the expectation that by 1993/94 Australia’s existing domestic airlines will be able to fly trans-Tasman and domestic routes within both countries without restriction.

This could then effectively see Australian domestic routes being flown by Qantas, Air New Zealand, Ansett, Australian, Eastwest, Compass and whatever new entrants make the runway over the next few years. Whilst this would inevitably be a bonanza for the consumer it begs the question whether our small market of just 21 million people would be big enough to sustain such a large number of jet operators.

One industry observer recently stated that GA operators would perhaps be well advised to sell their aircraft and put the money into. FAC shares when they become available. The consistently high level of profit made by this organisation are such that you could “forget aviation, buy a unit at Surfers and retire nicely living off the dividends. Oh well, it is Christmas!

 Son of Hercules:

Lockheed has begun development of an improved version of its ubiquitous C-130 Hercules transport, code named the Hercules 2.

The Hercules 2’s new features include some of the most radical internal changes to the now 40 years old basic design and incorporate state-of-the-art technology. It will have a new two crew cockpit with four flat panel liquid crystal displays and head up displays, while Allison GMA2100 turboprops with six bladed propellers will replace the familiar Allison T56 turboprops and four bladed propellers.

The much improved fuel efficiency of the new engines will allow the underwing fuel tanks to be removed without reducing endurance. The first Hercules 2 will fly in 1996 and the RAF is seen as a potential early customer.

V2500 on A319:

Airbus Industrie and International Aero Engines have signed an agreement which will see the V2500 turbofan engine on the proposed 130 seat Airbus A319 airliner.

The V2500 engine is already flying on the 150 seat A320 and is offered on the stretched 186 passenger A321 which is due to fly in 1993. The A319s powerplants will be rated at 22,000 thrust each, compared with 25,000lb on the A320 and 30,000lb on the A321. All three V2500s are identical, with the thrust varied electronically to suit the application.

FAA GA Forecast:

The US Federal Aviation Administration (FAA) has forecast that the number of general aviation aircraft in service in the USA will remain fairly constant over the next 12 years with fleet numbers increasing only marginally and hours flown increasing by only 1. 4% per annum. This compares with the 6% average annual growth experienced in the 1960s and 1970s.

It predicts the business sector will make greater use of GA with an appropriate expansion of the turbine engined fleet. The current fleet of 11,000 business jets is expected to grow to 15,000, for example, which implies the piston engine fleet will diminish due to a lack of large scale new production and the gradual retirement of older aircraft.

High costs haven’t helped the traditional basis of the GA fleet, the single engined piston aeroplane. According to the FAA it now costs 83% more to operate one of these aircraft than it did 12 years ago.