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The airline has also now finalised on five MD-83 aircraft via GPA. The twinjets were previously operated by SAS which is also undertaking crew training at its Stockholm technical centre.

Additionally, some grey areas in the Southern Cross/Compass prospectus have been addressed and updated. Firstly, the estimation that only 10% of traffic would be at full fare business class tariffs has been considered as extremely conservative as has the estimation of 40% of uplift being non discount economy class passengers. The overall percentage (50%) of passengers travelling on a discount has also been revised downward in view of the size of the aircraft and the modest (62%) load factor noted in the prospectus. With average mainline load factors running in the mid to high seventies it is felt by most industry observers that Compass 2 will probably log an average load factor for its first six months of operation of something in the low to mid seventies. Ansett Australia load factor for the year ended March 31 was 77. 4% whilst Australian logged an impressive 80. 8% whilst in the March quarter these airlines recorded an impressive 78. 9% and 84. 4% respectively. The prospectus also bases the 1992 year industry average at just 70%, significantly below expectations by most observers.

Southern Cross has also revised upwards its second year operating profit from a conservative $11. 3m to $13. 2m largely to reflect cuts in CAA costs that have been slated for the 93/94 year.

The airline also feels confident that it will be able to operate up to 20 frequencies through Sydney and Melbourne each day using just two gates at each port. However, in the event of an unscheduled delay which has three aircraft at a port simultaneously the airline benefits at least by being able to service passengers via the autonomous forward and rear airstairs of the MD-83. There is plenty of parking space alongside the Australian terminal at Tullamarine for this whilst at Mascot the aircraft will probably deplane from the new hardstand near Flight Facilities with passengers busing to the terminal. It is stressed though that this would only be used as an option of last resort. Long term leases with Australian for terminal access were being concluded as this issue went to press.

An in-depth question and answer inter- view with Compass 2 chairman, Doug Reid, will be featured in the August edition of AA. Don’t miss it! THANK YOU The small crew at Australian Aviation, would sincerely like to thank each and every one of our readers for their continued support through these difficult times. Your support during the worst recession to hit the aviation industry since the thirties has enabled us to main- tain our CAB audited circulation at a time when our primary competitors have all been in decline.

Times are tough. Thousands of our readers have seen their jobs disappear this past year while advertisers understandably have trimmed their budgets significantly. Through this we have tried hard to continually improve the magazine and by offering a quality product at a sensible price backed up by innovative marketing campaigns AA has been able, with your help, to maintain its CAB audited circulation in the difficult Oct 91 to Mar 92 period at 18,173.

By way of comparison our primary competitors, Aircraft & Aerospace and Australian Flying have logged CAB and ABC audited circulations of 6,765 and 10,590 respectively. The CAB traditionally caters for trade journals and reflects total circulation whilst the ABC caters more for consumer/trade magazines and lists only paid sales.

To our many readers, a very sincere thank you from all of us on the AA team.

Safety Tax Fight Not Over Yet:

While our industry may be able to take some short term solace from the recent delay in implementing the controversial Safety Tax we would like to remind readers that this is merely a delay in introduction, not an abandonment of the tax as many within our industry believe.

1 What has occurred is that public, media and industry pressure has delayed the introduction of the Safety Tax from July 1 till January 1 next year nothing more. The tax still exists and if introduced its implications for our industry will be the same as outlined in our articles in the April (p67), May (p4) and June issues (p23). Readers concerned by this open reneg- ing of a previous firm agreement between industry and government (and this could involve your job) are advised strongly to do something and write to their local MP to explain the consequences of the situa- tion (send photocopies of our articles if you wish to more fully background your MP) and to back the various industry associations by joining them and conse- quently giving more muscle to their overall capability. The AOPA, GAA. ASAC and RFACA have all worked tirelessly to fight this inequitable tax every inch of the way but the battle is far from over and will be surely lost if the problem is now simply put on the back burner.

Keep the pressure up and lobby your MP today, before it is too late!

Further Changes to Airspace Proposals:

The CAA is recon- sidering its earlier proposal that E airspace, which is airspace in which separation of all aircraft operating under IFR is provided by air traffic controllers, be applied to all airspace over continental Australia.

The latest proposal, which follows extensive testing on the ATC simulator at the University of Tasmania, now provides for E airspace to be established in Australia’s busiest airspace which is under radar cover, and above 10,000ft outside present controlled airspace over the rest of the country. ATC radar extends down the eastern seaboard from north of Cairns; along the south coast to a point west of Adelaide and in the south west corner around Perth.

The change has been proposed because traffic density outside the proposed new E airspace is minimal and therefore the cost of establishing the ATC infrastructure required by the earlier proposal would be prohibitive.

The proposal is being currently discussed with CAA staff and the aviation industry, and it intended to be progressively introduced between December 1992 and June 1994.

Fourth Hornet Lost:

The RAAF lost its fourth F/A-18 Hornet on May 19 when one of the fighters crashed near Cape Clinton, north of Rockhampton. At the time of writing the pilot and his defence scientist passenger have been listed as missing presumed dead.

The Hornet involved was F/A-18B A21-106, one of 18 two seaters delivered to the RAAF The Hornet has been in RAAF service for seven years and it is interesting to note that after the same period of service, eight examples of the Hornet’s predecessor, the Mirage, had been lost. Though the specific cause of the latest crash is unknown the aircraft itself was considered not to be responsible for the previous three accidents which were generally attributed to human error.

 Taiwan Rethinks MD-12:

Taiwan Aerospace Corporation (TAC) has revised its original plans to take an equity stake of up to 40% in the McDonnell Douglas MD-12 long range, high capacity airliner, thus threatening the original idea of a kind of Asian Airbus’ consortium.

The new plan involves manufacturing MD-12 components on a commercial basis. and purchasing up to 20 completed aircraft for onward leasing to airlines through a new leasing company formed jointly by TAC and Taiwanese private investors. In return for this purchase, McDonnell Douglas would award offset contracts to TAC for the manufacture of the MD-12 fuselage and wings at a new factory in Taiwan.

The new plan does not rule out the possibility of TAC acquiring an equity stake in the MD-12 later (after investors are happier about the risks involved), but it certainly gets well away from the original idea. of a partnership which would see Taiwanese investors contributing a large part of the MD-12’s estimated $US4. 5bn development cost.

As currently proposed, the MD-12 is a four engined, double deck widebody airliner capable of carrying 511 passengers in three classes over a range of 7,100 nautical miles (13,100km). A stretched 600 seater is also being considered. A full Update of the proposed MD-12 programme features in our next issue.

BA Booming:

While most of the world’s airlines struggle to keep their losses at a minimum, British Airways has announced significant profits for its 1991-92 financial year (to the end of March), the result of cutting costs at the start of the Gulf War and leaving it in a much bet- ter position to cope with that disaster for airlines generally. ” British Airways’ 1991-92 pre tax profit has been listed as $A612m on revenues of SA12. 5bn, more than twice the profit recorded in 1990-91. Not included in that figure is the $A336m after tax gain resulting from the sale of BA’s engine overhaul business to General Electric last December. The result means that so far, BA is the only one of the world’s top ten airlines to record a profit in 1991-92.

Despite this, the airline still feels the need to find a partner for the long term but says it will not be rushed into a partnership. It has recently held unsuccessful talks with KLM and Sabena on that subject.

Us Airlines Waiting for Boost:

Simplified fare structures and lower prices for business travellers introduced last April have not so far provided the expected boost for US airlines.

Despite all this and the fact that the Easter holidays this year fell in April, overall traffic increased by just 2% in the USA in that month. The top three airlines – American, United and Delta – each recorded an increase in overall traffic but their domestic figures were disappointing, American’s growing by just 1. 1% and the other two’s falling by 7. 1% and 4. 3%, respectively.

Two airlines did record substantial improvements: Southwest at 33% and Trans World at 29%, both as a result of low fares. Southwest continues to be impres- sive (refer Airline Affairs this issue), and is the only US carrier with what may be described as healthy growth in the domestic market. The recession is being blamed for the sluggish performance of the domestic market, a problem exacerbated by the fact that the continuing delivery of new equipment means that fleet growth is outpacing any traffic gains. Load factors are falling as a result, Delta dropping to just 57% in April and Northwest to 50%, nearly 20 percentage points less than the Australianaverage.

Many predict that the figures for May will not be any better, to some extent due to the Los Angeles riots which caused severe disruption to air travel generally and knocked a large hole in the inbound tourism market to that city and the USA in general.

Macchi’s New Lease of Life:

Following the discovery of fatigue cracks in the wings of the RAAF’s Macchi MB-326H jet trainers last December, most of the fleet has been grounded. To help alleviate the problem, a wing set purchase/ repair programme is now underway.

Eight wing sets have been ordered from the Italian manufacturer and a further 11 sets are expected to be ordered in September. This and a recovery rebuild programme of existing wings should see 29 aircraft in the air eventually, some of them within a year. The lead time required for delivery of the new wings from Macchi is about 12 months. The longer term future of the Macchi in RAAF service is still open to conjecture and will not be decided until further engineering investigations are made. Hawker de Havilland is conducting the recovery and repair work on existing wings, having undertaken a similar Lifex programme back in the late seventies.

Air New Zealand Welcomes Australian Landing Rights:

The new agreement on aviation rights between Australia and New Zealand has been described by Air New Zealand as signalling a major breakthrough in the airline’s long quest to obtain landing rights in Australia en route to and from Asian destinations.

Chief executive Jim McCrea said that the company had sought for years to have the right to set down and pick up passengers in Australia on its key Asian routes. “At last the principle of Australian landing rights on our Asian routes has been recognised,” he said. “These beyond rights in favour of Air New Zealand will be phased in progressively over several years in parallel with additional Australian carrier rights granted on the transtasman routes. Air New Zealand’s determination to have a more equitable opportunity in the development of South West Pacific tourism will progressively become a reality. ” Further negotiations between the Australian and New Zealand governments are scheduled over coming months to work through Air New Zealand’s access to the Australian domestic market plus details such as capacity allocation relating to beyond rights. Mr McCrea said that it is therefore not possible to be specific at this stage about either the short term effects or the ultimate outcome. However, he said that the basic principles for the next two to three years have been established, and it was important that the New Zealand Government ensure that this country’s tourism and airline interests are safeguarded in the further discussions still to be held.

Mr McCrea noted that rights beyond Australia to Asia will be a particularly useful addition to Air New Zealand’s existing direct routes because Asian origin and gateway markets are critical to New Zealand’s future tourism interests. Visitors from Asia now represent almost a quarter of the one million tourist arrivals per year in New Zealand, and that proportion continues to rise sharply.

“Tourists coming from Asia, Europe and North America will increasingly want to visit two, three or more different destinations while they are in our region. Accordingly, we will want to provide our customers with direct access to Australian cities as well as to the New Zealand and Pacific Islands destinations which we already serve. Prior to this breakthrough on landing rights in Australia, that opportunity was largely unavailable to us” he said.

Tassie Promotion a Success:

The joint Eastwest and Tourism Tasmania Wild About Tassie’ winter holiday promotion has proved to be an outstanding success.

Launched on May 1 this year, the promotion has resulted in a remarkable 85% increase in holiday package sales to Tasmania compared with May 1991. Aimed at tourists from Sydney, Brisbane and the, Gold and Sunshine Coasts, the basic package offers excellent value for money with three nights’ accommodation, return airfares, one day’s car rental and a tank of fuel for just $369 ex Sydney and $450 ex Brisbane. Longer duration packages are also available.

 Wrinklie Wings:

Australian Airlines has introduced a range of heavily discounted airfares with an unusual set of conditions attached.

In order to pay just $205 for a one way ticket between Perth and Sydney or $150 Brisbane/Melbourne, $95 Sydney/Gold Coast or $130 Hobart/Sydney, (discounts of up to 65%) you have to be aged 65 years or older. The deals are called ‘Senior Flyers Fares’ and are also available in combination with holiday package deals.

Ansett has introduced a similar scheme which should also make it more affordable for the aged to visit their relations in far off ports. The airline has also launched a range of deep discount winter specials which become effective from July 21 and extend through till September 18. Passengers must book 28 days in advance and stay away one Saturday night to snare these special fares which are as low as $169 for a Sydney/Melbourne return.

Both these fares and similar initiatives by Australian and Eastwest are aimed at the leisure traveller who is not necessarily interested in taking a specific holiday package yet would like to travel anyway. As the winter months are traditionally a slow period it is an excellent way for the airlines to mop up surplus capacity at a time when business traffic is thinner than usual.