Airline Affairs

James Strong comes to Qantasas nothing less than a Great White Hope. He was instrumental in turning around an airline swamped by low morale , moulding it into a proud and effective competitor to the Ansett group during his tenure as CEO from 1986 to 1989.

Prior to joining the then TAA he had no airline experience whatsoever and was looked upon by many within the airline as being wimpish, immature and of little long term consequence. That his doubters were proven wrong was probably the understatement of the century as Strong began to wield a restructuring programme that cut inefficiency, increased profits and slashed overheads in a form never before undertaken within the Australian airline industry.

He departed Australian in 1989 for a new career with Coors, the law firm and presently in addition to being an active Qantas board member is also Group MD of the DB Group in New Zealand. His appointment as Qantas chief executive becomes effective late October. Chairman, Gary Pemberton will act as MD till that time.

AA Comment: The choice of James Strong is a good one.

It is no secret that Qantas is presently in somewhat of a mess. The massive employee cuts have left quite a few areas of its day to day operation understaffed and overstressed whilst the merging of Australian with Qantas was always a venture that no matter how well executed would produce significant short term problems. Morale overall is relatively low and many of the former Australian employees carry an ‘us and them’ attitude that needs to be put aside, quick smart. Even many Qantas employees feel that the sale of a quarter of their airline to British Airways was an unjustified intrusion and of little tangible gain. Whether they are right or not for us to say though itis now time forall these men and women to work together, for a new airline and a new and profitable tomorrow. James Strong is just the man to take the new Qantas into the future. The Australian staffers will respect him for what he achieved at ‘their airline. They will also now feel that they have at least their’ man at the helm of the big international they have been forced to live with. Qantas staff ers on the other hand have nothing to fear, are no doubt well familiar with Strong as a vocal and highly regarded board member and somebody that really knows which way is up. .

AA would like to wish both men, John Ward and James Strong, the very best for their respective futures and we certainly hope that the many talents of the former will not be totally lost to that wonderful industry we call aviation.

United for the Workers:

United Airlines’ various workers’ unions have proposed a plan to gain a large or even majority holding in the airline in return for major wage and condition concessions.

The proposal has been put forward by the United Airlines Union Coalition, whose members consist of the flight attendant, machinist and pilot unions. The coalition aims in light of a recognised need to further cut costs (despite a recently completed $US-400m cost cutting programme) to avoid a confrontational style to negotiations, instead offering an unusual quid pro quo deal in the financially secure carrier.

A similar style proposal was put forward in 1990, but it is felt that United’s management would be reluctant to relinquish control of the airline despite the massive losses that the world’s second largest carrier has accumulated these past two years.

Sayonara Eastwest:

gested in our August issue, it appears that all of the Ansett Group carriers will now be melded into the single Ansett Australia brand image.

Ansett WA has already lost the WA titles on most if its aircraft whilst Ansett Express will also disappear into history sans (for the time being) the highly successful Canberra Sydney Shuttle. Eastwest will, or has, already departed the scene in hardware terms and really as an airline only now exists on the colourful brochure shelves of your friendly travel agent.

The quandary for ATI with Eastwest is that, from Ansett’s point of view, the airline attracted one million buyers of its product during 1992/93 that deliberately selected the Eastwest brand name in preference to either Australian or Ansett itself. Eastwest is also the dominant carrier into Coolangatta and is particularly strong in the Cairns and Tasmanian markets. If Ansett kills the airline outright then it may see some of this traffic flow over to Qantas. The problem thus for Ansett is to transition the old EW brand image across to Ansett Australia as painlessly and discreetly as possible whilst highlighting the better service standards and schedule opportunities available via the larger airline. ” Unfortunately Eastwest had never made a profit since expanding from being a small, protected, NSW regional in the seventies and early eighties flying F27s. Its venture outside the State and into jet aircraft proved disaster in economic terms whilst even with the full backing of Ansett’s extensive engineering and admin services it could not return an operating profit sufficient to war- a rant it’s retention as a competitor to its larger owner.

Australia to Take a Tough Stance in Bilateral Negotiations:

Transport &; Communications Minister, Senator Bob Collins, speaking at the 19th Ansett Transport &; Travel Writers Seminar on Hayman Island has stated that Australia will be taking a tough stand in the forthcoming round of government-to-government bilateral negotiations between the US and Australia.

The negotiations were being held in Canberra during mid August and were principally involved with determining a structure that would overcome the emotive Northwest/Australian Government dispute that flared earlier this year.

Senator Collins accused the US of pursuing an Open Skies policy when really it meant that everybody else’s skies would be open to exploitation by US mega carriers but not negotiable when a smaller nation’s airline wished greater access to the giant US market.

“The US portrays Open Skies as a truly liberal policy but doesn’t respond equally when another nation demands reciprocal rights in the US”. He said.

Whilst the Government is still monitor- ing Northwest to ensure it adheres to the 50% through traffic rule that the Australia/ Osaka US route is sanctioned upon, it also appeared that an increase in traffic follow- ing the announcement that the US gateway was being moved from New Yorkto Detroit would enable the embattled carrier to meet the uplift requirement that was the initial cause of the damaging dispute. Services from Detroit are scheduled to commence from this October.

Qantas Blames Govt for Wrong Advice on China:

Qantas has pointed the finger at the Federal Government, claiming that it had been misled over the air services agreement with China.

Qantas said it deliberately stayed away from the International Air Services Commission’s bidding process for China flight rights because of a government assurance that its air service agreement with China allows for the designation of more than one Australian carrier.

Qantas could well be locked out from flying direct flights to China following the IASC’s endorsement of Australia Air International to fly direct services, as China has made it clear that it only recognises one carrier from each country. If Australia Air succeeds in starting operations to China, Qantas could well find itself in the embarrassing position of missing out on what will surely be a highly lucrative business and tourist market, given the high rate of economic growth in that country.

Australia Air intends to begin operations later this year with a Boeing 747-200, purchased second hand from KIM. In all, the new airline ultimately plans a fleet of five 747s, serving China, Cyprus, Athens and Amsterdam. The airline’s ability to operate these routes however is fully dependant on its ability to convince the LASC that it has the financial backing to be viable. Something that at presstime it still was unable to achieve.

 Caa Briefs Instructors in Readiness for New Airspace System:

The CAA’s Industry Support Branch has recently completed a round of instructor briefings in readiness for the introducthe ICAO based airspace system.

The CAA’s aim was to brief all training areas before the distribution of self briefing material to all licensed pilots later in the year. A most comprehensive instructor pack, containing lesson plans, supported by overhead transparencies was provided to all Australian flight and groundtheory training organisations, domestic and supplementary airlines, check and training personnel and the Defence Force.

Face to face briefings were given to training organisations in the capital cities and major provincial centres, with the remaining organisations and major provincial centres receiving their material by mail. In a thoroughly thought out programme, tele- phone follow up was made to all those unable to attend the main briefings, to explain the material and to answer queries. A significant part of the changeover to the new system will be the introduction of new charts, the latter being provided to all those pilots who subscribe to the CAA chart and amendment service. This should take place in October.

Of concern is those pilots who do not subscribe to the chart service and who will possibly attempt to continue with their old charts, such action will be dangerous in the extreme because of the totally different system. It is up to the individual to use a little intelligence in this matter and ensure that he or she acquires the correct charts.

An Airspace Hotline has been established on (008) 676 063 and provides callers with recorded airspace information and during business hours access to an ICAO based Airspace Briefing Officer who can personally answer questions. Commonly occurring questions will be picked up and promulgated with answers, as amendments to the instructor pack.

There is no doubt that the CAA is making every effort to ensure that the new airspace system is fully understood by all concerned before the planned implementation date. It is to be hoped that it will be matched by all in the aviation fraternity.

 Airlines Undercut Agents:

Airline travel offices are adding only marginal fees on top of ticket cost prices on some trans Tasman flights, markedly underscoring agents’ commissions.

One airline reportedly added as little as $20 to a $600 net fare, this would yield agents who decide to match the rate a commission of just 3%. Air New Zealand’s latest Sydney/Auckland return fare at the time of writing was $449, well below Qantas’ published price of $499. This round of undercutting is much to the ire of travel agents, which are left with very small margins, despite the fact that they provide much of the airlines’ ticketing.

Anz Adds Third Frankfurt Service:

Due to strong growth in the number of German and northern European visitors to New Zealand, Air New Zealand will add a third weekly service to Frankfurt from November. The 747-400 service will operate via London Gatwick.

 Qantas Investigates Recycling:

Qantas is studying the possible introduction of a recycling system on its International network, following the success of efforts on its domestic routes.

PET products, glass and aluminium cans would all be collected and separated into different waste compactors, although some obstacles, including the allocation of space for compactors, need to be overcome before a fully fledged recycling system can become operational.

Cathay Pacific actually developed their own in-aircraft compactor for their long haul 747 services some years back. The unit is the same size as a standard galley cart and can compress down about seven times its initial volume. This reduces the need for additional space on board the aircraft for waste and presents a better overall package for recycling at home base.

 Northwest and Unions Make a Deal:

Troubled Northwest Airlines was (at the time of writing) close to securing a pay cut for equity deal with its machinist and flight attendant unions and non union labour.

The agreement would give the airline’s workers a 37% holding in Northwest with three seats on the board. The tentative pay and conditions agreement follows the ear- lier acceptance of the arrangements by the airline’s pilots (refer p5 Aug 93 AA).

If approved, the move by Northwest’s employees takes the airline one step away from the spectre of Chapter 11 bankruptcy protection, and , fic, better yields and reduced costs will slowly return the airline to some form of profitability.

The major long term problem though for Northwest is that at some point in time the deferred expenditures will have to be paid and that the majority of its fleet are aged Stage 2 jets which must be replaced later this decade.

As a cost reduction measure, Northwest last year cancelled most of the new generation Airbus and Boeing aircraft that it had ordered earlier in the decade when it was on a ‘growth at any cost, take on the world’ binge.

Lufthansa and Lauda Combine Oz Ops:

Lufthansa and Lauda Air have agreed to merge their Australian administrative operations.

The merger, which will see the carriers represented by joint offices in Australia and New Zealand, has a number of benefits including joint administration and marketing, plus the combined utilisation of service facilities. The new arrangement will come into affect when both airlines merge their Sydney and Melbourne offices on September 1. This, and a number of other cooperative agreements follows Lufthansa’s acquisition of a 26. 5% shareholding in Lauda Air last year.

Anapilots to Train Atavalon:

ASTA Airport Services Division has signed a contract with Japan’s All Nippon Airways to train 160 pilots from its Avalon airport. Pressure on airspace and ground facilities at ANA’s Shimojishima Island training centre near Okinawa has forced the airline to base some of its training activities elsewhere. The first time a foreign airline has based widebody training activities in Australia, the training programme involves 10 days flying in Boeing 747s or 20 days in 767s. Avalon was chosen because of the airport’s location, proximity to a major city, small time difference with Japan and uncongested airspace.

ASTA will provide ANA with aircraft despatchers providing Notams, weather data and normal day to day communication and operational coordination; ramp operations, ground operations and despatch; and aircraft line maintenance. ANA is also a regular customer of ASTAAS for heavy maintenance of its 747 fleet.

Consultation between ANA, ASTA and the CAA has lead to the creation of operational conditions as required by the Japanese Civil Aviation Bureau. To this end the SANTAS As further visible sign of the continuing integration of Australian Airlines into Qantas, at long last the Flying Kangaroo appears on an Airbus Industrie aircraft. Airbus A300 VH-TAA (pictured here being rolled out in its new Qantas livery) was the first of five ordered by TAA in the early 1980s, also seeing service at one time on lease to both Lufthansa subsidiary Condor, and Air Nugini. Prior to the amalgamation of the two carriers, Qantas had operated an a Boeing passenger fleet since the early 1970s, when the last Lockheed Electras were retired. (Brian Wilkes) CAA has tailored approach and departure facilities to ANA’s ANA’sspecific needs, while other changes include altering the runway desination and the addition of new PAPI and VOR/DME approach systems.

ASTA Aircraft Services meanwhile is investigating the possibility of performing heavy maintenance of Airbus aircraft, and it is also looking at performing Airbus freighter conversion work. Converted early build A300s represent economically viable medium lift/medium range Stage 3 freighters that could ultimately replace the large numbers of ageing 707 and DC-8 freighters currently in operation whilst also augmenting the uplift capability of the more than 100 747 freighters currently in operation.

 Delta’s Million Movements:

Delta Airlines has become the first airline to exceed one million flight movements in a twelve month period.

The total flights, 1,010,058, represents an aircraft departure every 30 seconds. In RPK terms, Delta is the world’s third largest airline, after American and United and ahead of Northwest and Continental.

Love Somebody:

Indonesian regional carrier Sempati plans to mount a new advertising campaign with a little help from the 1970s Aussie pop band the Bee Gees.

Sempati hopes to alter the lyrics of the song “To Love Somebody’ to ‘To Love Sempati’. On p21 of our July issue we reported how the use of hit records for airline advertising had proven an incredible success, for both the airline and the musicians concerned. Maybe the Bee Gees will now make a resurgence in Indonesia?

Ansett to Service Cocos/ Christmas Islands:

Ansett is to service the Indian Ocean islands of Cocos and Christmas in its own right effective September 1.

Formerly, Dept of Territories (or its equivalent) charters were flown specifically for the benefit of the islanders without any practical consideration of the future tourism potential that a better, more regular and affordable air service might provide. This was always a bone of contention with the local population who consider that there are significant opportunities to be had by improving access to the remote islands.

Ansett will be running two BAe 146 services per week to both islands with an additional flight to Christmas Island every fortnight on a trial basis. Tourism infrastructure on both islands, and in particularly Christmas, is being expanded with the potential to also link Indonesia and Singapore more effectively into the islands than has previously been the case.

 Icaopredicts Modest Growth:

The International Civil Aviation Organization (ICAO) has forecast annual growth of 6% for 1993, rising to 7% in 1994 and 1995.

Domestic and international air travel within ICAO’s 180 member states was estimated at 1. 95 billion passenger kilometres for 1992 with this expected to rise to 2. 07 billion for this year and 2. 21 billion in 1994.

Not surprisingly the Asia/Pacific region will grow at a faster rate than the rest of the world, with a forecast growth rate of 9. 3% in 1993, 10. 4% in 1994 and 10. 6% in 1995.

ICAO emphasised however that the primary problem with the world’s airlines is not lack of traffic growth but rather yield. Until the product increases in price by between five and ten percent, an adequate return on investment will not eventuate, which in turn will limit an airline’s ability to not only make a profit but also earn sufficient capital to be able to replace and augment their fleets in the years ahead.

Cheaper Fares, Strengthening Donesian Links:

Improved services, increased competition and new entrants have helped stimulate traffic growth between Western Australia and Indonesia.

Garuda Airlines has recorded an increase in traffic of 14% in the past year, while newcomers Sempati Air and Ansett Australia, and additional planned services from Qantas, should only help to further boost patronage. A concurrent growth is also be ing experienced in air freight, with exporters further developing trade and business opportunities in Indonesia.

Airport Costs World Competitive:

In replying to the damning recent draft report into it by the Prices Surveillance authority, the FAC has claimed that its airports’ operating costs are amongst the lowest in the world.

The FAC usedthe WorkLoad Unit (WLU) measuring system as devised by the Transport Studies Group of the Polytechnic of Central London to measure airport costs, and compare them with similar airports in Europe. The study found that with the exception of Townsville, all of the FAC’s ma- jor airports; Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra and Coolangatta, had significantly lower operating costs than their European counterparts.

The FAC says that apart from Townsville, all major FAC airports have operating costs per WLU below that of Nice, the most effective (by the WLU measure) in Europe, while on average, operating costs per WLU are between a quarter and a fifth of the comparable figures for Europe. It also found that the average total costs per Work Load Unit are less than half those in Europe, and its larger airports are better performers than any of the European airports listed.

by The FAC also says that its performance against the range of indicators published Moodys of selected airport medians for the US shows that its overall performance is better than the average US airport. A Travis Morgan report recently released also showed that Australia’s airport charges were amongst the lowest in the world. This reportfound that Sydney airport charges were ranked 36 lowest out of a representative selection of 40 international airports.

Taiwan Approves Avro Deal:

The Taiwanese Government has at long last formally approved Taiwan Aerospace Corporation’s (TAC) role in the Avro partnership with British Aerospace.

The approval follows the recent securing of $US460m in funding from a consortium of Taiwanese banks with formal contract signing now a formality.

Doubts in the project had surfaced when Dassault entered discussions with TAC on a proposed partnership with the Falcon business jet range. Following the apparent success of the Avro deal though, this may well fall to the wayside, as did the previous year’s discussions with McDonnell Douglas on the MD-12.

Under the Avro deal, the Avroliner family of regional jets (previously BAe 146 or RJ) will be assembled in Taiwan. Avro is also hoping to begin work on its twin engined RJX 100 seat jetliner, which will be the first aircraft to be fully developed under the auspices of Avro.

Swapping Pigs to Fly:

In whatis becoming an increasingly common practice between China and the former Soviet republics, China’s Sichuan Airlines recently swapped five hundred boxcars of pork for four Tupolev Tu-154 airliners.

Some 35 new airlines have been created in China since the industry was deregulated and while airlines from more affluent provinces have been purchasing shiny new Boeings and Airbuses, some of the more cash strapped regions have been exchanging local products for a number of commodities. Another recent example was Hainan Airlines, which traded 212 boxcars of mango juice for an Ilyushin Il-86.

Reflecting the dramatic growth in air travel in China, as many as 37 leased airliners have entered service in the first six months of this year. Helping to ease a growing shortage in capacity, the 37 aircraft feature a combined capacity of 6500 seats.

 Australia/China Clarify Bilateral Air Rights:

Australian DoT officials were meeting with their counterparts from China during the reporting period to clarify certain aspects of the bilateral air services agreement which links the two nations.

Confusions exist over the precise nature of the requirement of the China bilateral. For instance, does China only sanction one Australian carrier, or does it, as is being suspected, allow two carriers to serve the PRC via non competing cities. If so, this would allow Qantas to reverse the embarrassing situation where it recently (at least theoretically) gave awayits China air rights to so far unlaunched Australia Air. Qantas has not served China since 1987 though still maintains a sales office in Beijing with one employee.

Amore specific understanding ofthe Aus- tralia/China bilateral will hopefully be known by the time this magazine goes on sale.

 Eastern Boosts Coffs:

Eastern Australia Airlines is increasing its services from Sydney to Coffs Harbour by 40% from early September.

The six new flights to Coffs Harbour using Dash 8s increases the each way weekly departures to 21. The new services to Coffs depart Sydney at 6:25 each evening while five of the flights will leave at 7:05 in the morning, with the sixth departing 9:10pm on Fridays. The new services will greatly assist business people wishing to visit Sydney just for the day.

Eastern began services to Coffs Harbour last December, since then traffic to the coastal city has grown by 14% through additional capacity and a far more competitive fare structure borne out of competition.

Fear of Flying Clinic:

Fear of flying is a rather more common problem than is generally realised, and certainly one which is not always readily admitted to.

The Australian Women Pilots Association runs fear of flying clinics in Canberra, Sydney and Melbourne twice a year, the next ones of which will start in October. The seven week, one night a week courses cost $450 and are run in association with Qantas/ Australian Airlines whilst Ansett also runs similar courses.

Covering a wide range of topics spoken about by industry professionals, the courses end with a ‘graduation’ flight between capital cities and the marvellous experience of playing with one of Qantas Australians’ flight simulators. It’s worth doing the course just for this aspect! For further details contact Liz McKenzie on (06) 243 7377.

Deregulation Puts Prices in Descent:

Air fare prices continued to fall in the first quarter of this year according to a Prices Surveillance Authority report.

On average, prices fell by 8% in real terms for the first three months of this year on the 21 major domestic routes, while since the airline system was deregulated in late 1990 real prices have fallen by almost a third. The decrease represents not so much a fall in standard economy fares, but an increase in the number of people travelling on discount rates, and it also reflects the final three months of Compass operations. The growth in the number of passengers flying on discount fares is also reflected in a 9. 7% fall in revenue per passenger kilometre.

Going against the trend, the only city pair to record a rise in prices was Sydney/Canberra, reflecting the largely high yield business travel nature of the route, while the only routes to record falls in passenger numbers were Brisbane/Canberra and Melbourne/Cairns.

Qantas & BA Link Frequent Flyers:

From August 1, Australian and New Zealand based members of British Airways and Qantas frequent flyer programmes have been able to earn points in each others schemes.

An early visible sign in the benefits of British Airway’s shareholding in Qantas, the second stage of the agreement will see benefits extended to European based members in the scheme later this year, with other international frequent flyers joining in early 1994. The new frequent flyer deal however does not at this stage involve USAir, in which BA also has a minority holding.

Members of the two schemes are able to ber 1, while bookings for free flights can be redeem points for free flights from October 1.

Corporate to Albury:

Corporated Airlines Canberra has begun Canberra Albury services following the withdrawal of Western Airlines from the route.

Corporate Airlines Canberra, a subsidi- ary of Vee H Aviation, Canberra’s largest GA organisation, began flying regional airline services to Moruya late last year, and launched the Albury service at Western Airlines’ request. Using Cessna Conquests, the airline flies twice daily return flights to Albury on weekdays, plus a Sunday afternoon service.

The new service is part of Corporate Airlines’ objective of establishing a regional network based on Canberra to ports not serviced by major carriers.

No Bull:

A wayward bull caused an Indian Airline’s 737 to abort its takeoff recently.

The bull had wandered across the active runway into the path of a 737 which had commenced its takeoff run. The pilot managed to brake, slowing the aircraft enough to avoid a major disaster, although the resulting collision killed the hapless beast and damaged the Boeing’s undercarriage.

Reminds us of a similar incident back around 1986 when a Polynesian 737 hit a donkey on landing at Apia, Western Samoa.

Ansett Handles Tamair:

Ansett Australia is now handling Tamworth based Tamair’s arrivals and departures at Sydney airport.

Tamair passengers will be accommodated in Ansett’s ground floor terminal lounge and the commuter will also take part in AN’s domestic reservation system. Tamair services the important Sydney/Tamworth route (in competition with Eastern) with Fairchild Metro 23s in addition to operating Chieftains plus Cessna twins which are used for charter work.

China Applies Brakes to Airlines:

In an attempt to restrain runaway growth in China’s airline industry, the CAAC has moved to block any startup carriers from easily beginning operations.

The move is designed to counter the strains placed on China’s personnel infrastructure where explosive growth in the airline industry has seen experienced pilots and managers spread too sparsely among the growing number of carriers. Last year saw traffic grow by 32% yet it was the worst year on record for major airline accidents, with 276 people killed in four separate major crashes (three of the four aircraft were operated by newly established carriers).

New more stricter criteria for airline start ups, such as proof of finance and experienced staff, will now need to be met before Chinese new entrants can gain their wings. AA Comment: In Australia, amongst other things, a new airline must acquire an Airline Operator’s Certificate. This incredibly lengthy, complex and all encompassing document is analysed in great detail by the CAA before approval is finally granted for an airline to commence operations.

New entrants often ‘bitch’ to us that the CAA (and others) are “holding them up, wasting their time with such bureaucratic nonsense”. What these learned souls don’t seem to ever realise is that Australia has an air transport environment that is the envy of the world. And much of that envy revolves around the professional operations of the infrastructure by all involved.

There is no room for corporate cowboys (the scourge of the eighties) in the 1990s real world business scene so next time you hear of an airline starting up on limited capital then wisely give them a big miss or it’s your money that they will be wasting.

Ansett and Lufthansa Link on Bali:

Ansett has scored a coup with a recently announced link with Lufthansa to expand the European feed capability of its Bali services.

Lufthansa presently serves Ball from Europe via Singapore but only flies to Australia’s major east coast cities via its traditional one stop services via Kuala Lumpur. The agreement with Ansett will see Lufthansa passengers having the opportunity to fly to northern Australia with Ansett as an extension of their Bali experience.

The link should see European tourism boom into Darwin and Cairns and is an example of what is possible with a little lateral thinking and good’ol fashioned competition now that Australia effectively has two international airlines.

Air Pacific and Qantas Strengthen Links:

A new commercial agreement between Qantas and Air Pacific will see links between the two maintained and strengthened throughout the decade.

According to Qantas MD John Ward, the “agreement provides opportunities to ad- vance the commercial interests of each air- line and builds on a firm base. The agreement aims to enhance cooperation in a number of key airline activities including marketing, computer reservation systems, ground handling, catering, purchasing and spares management. Qantas holds a 10% shareholding in Air Pacific.

Anin-depth profile on Air Pacific appears elsewhere in this issue.

 Airline Conference Bridging the Taiwan Strait:

For the first time ever, representatives from both the Peoples Republic of China and Taiwan have held discussions on the restoration of air links between the two countries.

The ‘Conference on Air Transport Across the Taiwan Strait’ held in Shanghai saw over 200 senior level airline, aviation authorities and related industry representatives gather to begin the long process from a technical and business point of view of restoring direct air links between the two countries. Officials from 10 airlines and three airports were present from China and nine Taiwanese carriers sent participants. While the conference was believed to be too short to thoroughly work through all the complex issues, it is hoped that this beginning will allow the resolution of all current problems, leading to the eventual restoration of direct air services.

Southwest Heads Northeast:

Innovative and profitable American domestic Southwest will expand services to the US east coast from mid September.

The carrier’s first cautious move into east coast USA routes sees it begin services from Baltimore/Washington International to Cleveland and Chicago, causing much apprehension among the traditionally structured major airlines. While the modest number of departures is not a major threat at the moment, it does signify the highly successful airline’s first venture into east coast routes. In the past, Southwest has been highly successful at capturing significant market share and generating new traffic between the city pairs it serves.

The 737 only carrier is renowned for its low fare structure, and hassle free point to point services as opposed to hub and spoke operations.

Fac Harvests Brisbane:

Cut grass at Brisbane airport is being baled and donated to drought graziers in south and western Queensland.

The grass has been cut from open space inside the airport boundaries, outside the airport landing area. The innovative idea was conceived by the FAC staff canteen manager at Brisbane, Milan Kutija.

Our congratulations to Brisbane FAC for their initiative and good community spirit.

Southern Pacific Creditors Tolose:

Southern Pacific Regional Airline’s creditors are likely to get little or none of their money back, according to the airline’s liquidators.

A large number of creditors, including the FAC, CAA and the Australian Tax Office are unlikely to be paid any money owing, with total debts believed to be in the millions. It is likely that the failed Bundaberg based carrier’s assets, including its four Mohawk aircraft and spare parts will be sold by public tender.

 Air Freight Rationalises:

Australia’s domestic air freight industry has continued to rationalise following aggressive competition from express road trans- port companies.

The effects of competition from other forms of transport, plus the 1989 pilots’ dispute and recession has not only reduced the levels of activity in this sector, but rationalised and polarised the industry into two major players. Ansett Air Freight remains the biggest player, and was recently strengthened following the addition of capacity of two former IPEC DC-9s operated under lease, while Australia Air Express, the joint Australia Post/Qantas Group venture holds 38% of the air freight market.

The international air freight market into and out of Australia has also been characterised in recent times by a move towards manufactured products, away from traditional perishable goods. Despite this trend though, growing sales to Asian markets, shipping costs and seasonal space short- ages has seen seafood products emerge as a growing air freight market, with Ansett Air Freight experiencing particularly strong uplift from Hobart of farmed salmon destined for Japan.

Meanwhile, one of the world’s largest express freight operators, DHL International, has plans for a new Australasian marketing push. As part of a worldwide $1. 25bn investment programme, DHL (through National Airlines) plans to introduce a dedicated trans Tasman 727 freighter service, allowing overnight delivery to New Zealand. As a precursor to allowing this to proceed, the International Air Services Commission (IASC) has issued a draft determination to allow National Jet to upgrade the current 727 charter flights across the Tasman to regular scheduled services.

 Qantas Cleared to Noumea:

The IASC has issued a draft determination which if confirmed will allow Qantas to operate its planned new service to New Caledonia (referp5 Aug 93 AA). Dependant on the draft’s confirmation, Qantas will now be able to schedule three weekly services to Noumea using 7378.