Airline Affairs

Qantas essentially wants every passenger flying on a Qantas aircraft between Australian ports to be classed as a domestic passenger even if that person boarded (for instance) QF1 in Melbourne and flies to Sydney just so the aircraft can pick up pax at that port before departing for Bangkok and London.

Ansett naturally feel that this person would rightly not be eligible to be classed as a domestic passenger as he or she did not depart the aircraft (or airport) at Sydney and thus only had transit status.

Qantas, under the banner of Australian only secured 42% domestic market share in 1992/93 as against Ansett with 51% without ATI even taking into account now merged Eastwest. This is obviously a situation that Qantas needs to quickly reverse.

However, in the middle of this the DoTC Avstats unit (which does a great job) cannot get the raw data it requires to process the Information that you and I expect quite rightly as taxpayers. If the situation isn’t resolved soon then legislation will have to be enacted to make compulsory the supply of traffic data though in the meantime the DoTC and Minister Collins need to quickly lay down the law on what is, or isn’t a domestic passenger.

AA Comment:

Why not bend to sheer unadulterated logic and simply deem any passenger that is flying from an Australian destination to another Australian destination and is actually departing the aircraft/ airport as a domestic passenger as just that. Those that don’t and proceed onto other overseas destinations are international travellers. Simple as that.

This solution of course might well be nicely muddied when the trans Tasman even tually becomes a free market, but that’s another story!

Global Explorer Expanded:

British Airways has expanded its Global Explorer fare to include its associate airlines Qantas and USAir.

The inclusion of USAir means that passengers who buy a Global Explorer fare (available until March next year) in first, business and economy classes can now travel extensively within the USA as well as Europe, Africa, Asia and the UK.

Members of BA’s executive club will also be able to earn frequent flyer points for all travel taken on a Global Explorer fare, as both Qantas and USAir services now qualify for points. Global Explorer fares start at $2199 and allow passengers to depart from any BA or Qantas gateway in Australia and travel to London via Singapore, Bangkok, Hong Kong, Africa or the USA-and back- on one fare.

New Jets for Ansett?:

In what could potentially be a major shift in Ansett’s aircraft operations, speculation is rife over a recent visit to Australia by the Managing Director of Airbus Industrie, Jean Pierson. It is no secret that Ansett will soon announce a major contract and that the sales executives at Boeing and Airbus have been hard at it to win a substantial order which would no doubt alleviate some of the pain caused by recent cancellations from major Asian customers.

Although there is no confirmation from Ansett, some circles believe that Ansett will operate an all Boeing fleet by the year 2000, cancelling the A321 orders and withdrawinging the A320s from service and bringing in 757s and new 767-300s. The company’s to acquire three 747-300s, possibly from Singapore Airlines, for its Asia services will mean that Ansett will have operated every aircraft from the Boeing stable except the 707, though even this type was operated for a time by ATI joint shareholder, TNT via its Transcorp operation.

Conversely, ATI could also swap its Boeings for Airbus aircraft, boosting its A320/321 fleet, perhaps adding the A319 and acquiring A340s to augment its required 747 capacity. A decision is expected before Christmas.

 Cathay Reviews Fleet Plans:

Prompted by substantial changes in the economics of some longhaul routes and the need to introduce cost cutting, Cathay Pacific is reviewing its long term fleet plans.

The review will not affect current firm orders for Airbus A330s and Boeing 747- 400s and 777s, but may bring some changes to the options it currently holds on nine 747- 400s, eleven 777sand 14 A330-300s. Aspects to be examined include whether or not a new type is required for ‘long thin’ routes (mainly Hong Kong to Europe), if the air- line’s fleet of Lockheed Tristars will be kept in service for longer than planned, and if some second hand 747-200s need to be pur- chased as an interim measure for use on these routes.

Alternatives for these routes include the 777 in its longer range B version, or switching the A330 options to the higher gross weight A340-300 in its longest range version. Neither the Boeing or the Airbus aircraft will be available until 1996, necessitating an interim type. Due to its size, Cathay regards using the 747-400 as a waste on many of these routes, thus the possibility of choosing to use older 747-200s in the meantime or retaining the Tristars.

You Can’t Beat ‘Em

Southwest Airlines’ successful high frequency, short haul network which in the main bypasses major hubs and has low unrestricted fares, has inspired Continental Airlines to introduce similar services within the USA.

Called ‘Peanut Fares’, the services involve direct flights between 53 city pairs mainly on the US east coast using Boeing 737s and McDonnell Douglas DC-9s. As is the case with Southwest’s network, hubs will be largely avoided and the now standard (and largely inflexible) hub and spoke system abandoned for these services.

The result will be lower fares- a proven demand stimulant – and greater convenience and flexibility for passengers who will be able to travel directly to the city of their choice rather than being forced to pass through a major hub. Continental Southwest’s $US49 one way fare on the Baltimore/Cleveland route and recorded an increase in traffic of 300% USAir did the same thing and traffic increased by nearly 400%.

 Virgin’s Latest Gamble:

Running an airline has always been one of the biggest gambles in the business world, but now Richard Branson’s Virgin Atlantic Airways plans to take that one step further by introducing inflight gaming to the skies.

From next February, Virgin passengers flying from London Heathrow to Hong Kong on the airline’s new Airbus A340s will be able to play poker, roulette, blackjack and other games from their seats on video ma- chines. At the same time, the airline will introduce electronic shopping facilities which will also allow gamblers to immediately dispose of their winnings! Virgin will also have live croupiers on some flights in the lounge area of the A340 and says that once an aircraft is 32 kilometres out of the airport there is no legal reason why gambling should not take place.

The video gambling system has been developed by Hughes Avicom, each seat having a credit card swipe to credit or debit passengers as they play. The same basic system isused on the video’s shopping channel. It’s interesting that Virgin has decided to start its ‘casino in the sky’ idea on the Hong Kong route, apart of the world where gambling is a very strong tradition and there’s plenty of spare money to lose! • SUNSTATE AND AUSTRALIAN REGIONAL MERGE: Sunstate Airlines and Australian Regional Airlines Queensland have merged their operations, resulting in a Queensland regional carrier with a fleet of three Dash 8s, four Shorts 360s and five Twin Otters. The name Sunstate will be retained though all aircraft will of course wear Qantas livery.

The airline operates 525 flight sectors within Queensland each week including services to the Qantas group’s holiday resorts on Great Keppel, Brampton, Dunk and Lizard islands. The former Australian Regional Twin Otters will continue to be maintained in Townsville and it is planned that some Sunstate maintenance work previously carried out in Brisbane will also be transferred to the northern city.

 Sita Wins Large Travel Contract:

SITA, the global telecommunications network, has won the hotly contested contract for the communications network of Australia’s Travel Industries Automated Systems Pty Ltd (TIAS).

The $A60m deal is probably the travel industry’s largest technology contract to be awarded between now and the turn of the century. TIAS is owned by Qantas, Air New Zealand and Ansett and provides infrastructure for the distribution of both the Sabre and Galileo computer reservation systems in Australia and New Zealand. TIAS is also introducing a new land content database which will be distributed to travel agencies via the SITA network. About 4000 Australian and New Zealand travel agents use Sabre or Galileo.

The TIAS contract follows several recent successes for SITA, including being awarded the contract to provide data services for the Department of Foreign Affairs and Trade’s Australian Diplomatic Communications Network. It also provided and installed Sydney Airport’s CUTE 2 (Common User Terminal Equipment) late last year, giving Sydney the first CUTE usage in the region and the first in the world to combine a sophisticated baggage handling system with the CUTE check in system. CUTE allows airlines to swap check in counters at will, thereby ensuring that each carrier has sufficient peak hour counter capacity to reduce airport congestion to a minimum.

SITA was founded in 1949 as a non profit society for the world’s airlines. It now has over 500 member airlines and travel companies and operates the world’s largest privately managed network in more than 200 countries.

Ansett Awarded Hong Kong Capacity:

The International Air Services Commission has confirmed allocations which allow Ansett to operate three Boeing 747 services per week between Sydney, Melbourne and Hong Kong from next September.

Ansett’s allocations are equivalent to 2000 seats per week, while a further two 747 services will be available from April 1995. In addition, Qantas has been allocated a further 500 seats per week to operate two new 767 flights from Queensland to HK from last October, while it was also allocated a further 100 seats, which, in conjunction with the conversion of 100 tonnes of existing freight capacity to passenger capacity will allow the carrier to operate an additional two 767 flights. The Commission also confirmed Qantas rights to provide 1800 seats or seven 767 services between Perth/Singapore/Hong Kong and Brisbane/Hong Kong Bangkok, which it has until now operated on an interim basis.

Despite protestations from Ansett that additional flights would threaten the viability of its newly inaugurated services, the IASC has issued a draft determination to allow Qantas to operate services to Bali from Darwin. If confirmed, Qantas would operate a twice-weekly Darwin/Denpasar service, supplementing the three services already operated by Ansett and Garuda.

Meanwhile, a further IASC draft determination seeks to award Qantas additional capacity to South Africa which the airline to operate a second weekly service. The new flight would involve rerouting a current flight to Harare in Zimbabwe via Johannesburg and would operate Sydney/ Perth/Johannesburg/Harare/Joburg/Perth/ Sydney.

The IASC also confirmed additional capacity to the Philippines for Qantas, allowing a third weekly flight which will route Sydney/Manila/Brisbane/Sydney.

 Australia Air Announces Key Contracts:

In preparation for start of operations by year’s end, Australia Air International has placed a number of key service contracts.

Perhaps most interesting is that Qantas will perform both maintenance on the airline’s two Boeing 747-200s in addition to providing ground, ramp, passenger and cargo handling within Australia. Australia Air will employ its own airport manager and passenger service agent, with other functions being performed by Qantas. Catering meanwhile will be handled by Cathay Pa- cific in Australia and the airline will use SITA’s Gabriel II booking system.

Australia Air plans to commence operations “later this year”, with a once weekly return flight from Melbourne and Sydney to Beijing, under the IATA flight designation code XF. In the meantime the airline needs to satisfy the IASC that it indeed has the physical backing of at least $54m before full route approval is given.

Australia Air also needs to gain it’s all important Air Operators Certificate (AOC) from the CAA before it can be registered in Australia as an RPT airline. This also needs to be endorsed by the civil aviation administrations of the countries that Australia Air wishes to operate to such as China, the Netherlands and Greece.

According to an airline spokesperson, an announcement would be made during early November as to the specific underwriting of this sum, probably via US and Chinese backing.

GPA Slashes Orders:

In a move designed purely to save the company, airliner lessor GPA has severely cut its firm orderbook to the year 2001.

Its shareholders have also been asked to approve a rescue package which effectively will give control to General Electric Capital, the finance company which presently holds GPA’s future in its hands.

Cuts in firm orders earlier this year had reduced GPA’s commitment to 242 aircraft, but the latest round reduces that to just 57: two Fokker 100s (already delivered), 11 Boeing 737s, seven 757s, eight 767s, six Airbus A320s, ten ATR42s and 13 MD-11s, although the latter is subject to litigation and may not go ahead. Lufthansa Indonesia has purchased 30 used Boeing 737-200s from Germany’s Lufthansa. To be used by a number of domestic carriers, the aircraft will most likely augment and replace a variety of ageing types including Electras and Viscounts. Unit price per aircraft is believed to be around $US9m. Meanwhile, US freight specialist Federal Express is planning to boost its domestic capacity with the lease of 13 Airbus A310s from Lufthansa. Prior to first delivery in July 1994 (occurring one per month thereafter) the A310s will be converted to freighters by Deutsche Airbus. Currently in storage or on lease to THY and MEA, the Airbuses will be primarily used to replace ageing 727-100s, offering an expected payload capacity of 28. 5 tonnes. FedEx meanwhile will lease five 747-200Fs it inherited from Flying Tigers to Lufthansa from 1998 as that airline builds upon its long haul freight capability.

The new cuts involve 55 Airbus, 109 Boeing and 13 MD-11 airliners, reducing GPA’s commitment from $US11. 3bn to $US3. 6bn between now and the turn of the century.

GE Capital now controls GPA’s future and it requires equity options which if exercised could give it 100% control of GPA. It also wants major management changes, new capital from existing shareholders and new lending agreements. GPA currently has more than 450 aircraft on its books.

Air France Cuts Costs:

Air Franceis embarking on a major cost cutting exercise which will see 4000 jobs lost and 23 aircraft orders either cancelled or delayed between now and 1996.

The moves are part of a drastic restructuring plan for the financially troubled airline which lost $US576m in 1992 and $US670m in the first half of 1993. Overall losses for this year could be as high as $US1000m.

Air France has already postponed delivery of the last batch of 23 Airbus A330s from 1993 to 1996 and could return eight leased A320s to GPA and the International Lease Finance Corporation. The new Air France’s orderbook between now and the beginning of 1996 reduced to just 12 aircraft: two Boeing 747-400s, one 737-300, three 767-300s, four 747-400 freighters and two Airbus A340s.

In addition, Air France’s domestic and regional subsidiary, Air Inter, is considering postponing delivery of 10 of the 15 Airbus A330s it has ordered. Air Inter is the A330’s launch customer.

 Hawaiian Airlines Broke:

Hawaiian Airlines has filed for Chapter 11 bankruptcy protection in an attempt to complete its restructuring plan.

The airline lost $US24m in the June quarter of this year and has cut 150 of its 2400 jobs to reduce costs. Under the restructuring plan, Hawaiian Airlines’ creditors would own 71% of the company.

The primary problem of Hawaiian (and competitor Aloha) are low load factors accompanied with very low fares in a hotly contested high frequency short haul market not suited to the jet equipment generally operated.

Additionally, Hawaii as a tourist destination has now seen several years of inbound tourism decline owing to competition from more exotic, newer destinations, recession in both Japan and North America and an increasing trend towards long haul over-flights where once that traffic transited Oahu as a matter of course.

Klmends Melbourne Services:

After 22 years, KLM Royal Dutch Airlines will end services to Melbourne.

Effective February next year, the airline will fly only to Sydney from Amsterdam via Singapore. KLM says it will absorb all do- mestic costs for passengers connecting from Melbourne and other major ports. Melbourne has been designated an ‘offline’station by KLM but the airline’s Melbourne sales and ticket office staff will continue to service Victorian, South Australian, West Australian and Tasmanian travel agents.

New German Us Agreement:

Air traffic negotiations between Germany and the USA have concluded with the of a new Bilateral Air Traffic Agreement which is valid for four years.

For the first two years, the new agreement freezes the rights of US carriers in Germany to the current level of 246 flights per week and opens up new opportunities for Lufthansa. It allows the German carrier to fly to 25 gateways in the USA as against 12 destinations under the terms of the previous agreement. Lufthansa may now offer 150 weekly flights to the USA instead of the current 112.

In addition (and in partnership with a US carrier), Lufthansa can now serve all destinations in the US market under a code sharing arrangement. Weekly frequencies in this method of operation are limited to 140 in the first year, 280 in the second and third and 350 in the final year. The agreement is bad news for Northwest Airlines, which has recently been pushing the US Transportation Department to suspend Lufthansa’s authority to operate to at least six of the American ports it now serves (refer p22 Oct 93 AA) Following approval to operate within the US market under a code sharing agreement, Lufthansa and United Airlines have established a comprehensive co-operation programme which will cover code sharing services across the Atlantic and allow passengers to participate in both airlines’ frequent flyer programmes and to use each others ground facilities. Germany sees this move as an important step towards the privatisation of Lufthansa.

 Lauda Orders Canadair Rjs:

Austrian operator Lauda Air has signed a contract with Canadair for the purchase of six Regional jets and placed options on a further six.

The order increases the Regional Jet’s firm orderbook to 54 aircraft from seven customers. About 20 are already in service with Lufthansa CityLine, Comair and Xerox, the latter in corporate configuration. SkyWest, Air Canada, Air Littoral and Lauda Air will be added to the list in 1994.

Lauda Air will operate Regional Jet services in conjunction with Lufthansa from a new Vienna hub from April next year with destinations including Turin, Berlin, Cologne, Paris-Orly, Manchester and Oslo. The aircraft will join Lauda Air’s existing fleet of four Boeing 767s and four 737s.

Qantas Top Entertainer:

The 5th annual Avion Awards-which recognise achievement in inflight has given Qantas several ‘gongs’ including the Gold Award for Excellence in Overall Flight Entertainment.

Qantas won more awards than any of the 36 other airlines represented at the World Airline Entertainment Association awards in California including Best Audio Programming (for the second year running), Best Audio Programme of an Original Nature and other awards for its inflight magazine, its inflight video magazine and the new first class entertainment guide.

The 12 members of the Avions Awards judging panel included representatives from the International Herald Tribune, Billboard magazine, EMI Records and Orion Pictures.

More Flights to Korea Approved:

The International Air Services Commission (IASC) has given Qantas approval to operate additional flights to South Korea from late October 1993 and for Ansett to start services to that country in October next year.

There are currently six flights each week between Australia and Korea provided by Qantasand Korean Air. The new approvals allow Qantas to operate five additional Boeing 767-300 weekly services between Sydney/Brisbane and Korea and Ansett to fly two 767 Sydney/Korea services per week from October 1994 and another two weekly 767 services between Brisbane and Korea from October 1995.

Ansett has considerably scaled down its original requests for services to Korea. It originally applied for all the 5. 8 Boeing 747 equivalent units available on the route each week but reduced this to 2. 4 747 units as part of a more cautious approach to international expansion. Ansett’s various international approvals will place heavy demands on its fleet and the more modest recent application for Korean services reduces the need for expensive new equipment.

For the same reasons, Ansett has applied to delay the launch of its Hong Kong services from April to September next year, so they will coincide with the start of Japan services and therefore provide better fleet schedules.

Ansett is also expected to start services to Malaysia sometime next year and to Singapore in November 1994. A major announcement as to the specific aircraft types destined to take Ansett into the next century is imminent.

Awas Clinches New Deals:

Ansett Worldwide Aviation Services (AWAS) has put together several new leasing and sales deals with airlines around the world and has provided part owner TNT with sufficient profits to see the transport giant in the black.

Recent AWAS contracts include the lease of three McDonnell Douglas MD-83s to US regional operator Reno Air, the supply of a Pratt & Whitney PW4000 engine to China Northern Airlines (which leased two Airbus A300-600Rsfrom AWAS earlier this year), a Boeing 757-200 to Turkmenavia of Turkey and the sale of a 767-300 and spare PW4000 to Royal Brunei Airlines.

AWAS’s good financial performance has long been included in TNT’s overall results but its individual performance has been revealed for the first time in the prospectus for TNT’s $300m issue of preference shares. The figures show that while AWAS made a before tax and profit of $119. 5m in the 1991/93 period, TNT’s equity profit for the same period was $87. 1m. On the other side of the coin, the prospectus also shows that net debt has blown out by $1bn during the same period.

The TNT share issue has been successful, setting the scene for a significant refinancing of the group which has long been burdened with excessive debt. The company’s recovery strategy has won approval from credit ratings agency Standards & Poor’s, which has now put TNT on its ‘positive implications list. That could ultimately lead to an upgrading of the current rating to investment grade.

Meanwhile, News Ltd supremo, Rupert stated on October 12 that his company still wanted to sell its 50% share in Ansett Transport Industries.

News has in recent years considered its involvement in ATI and related non media functions as contrary to the objectives of its core asset programme and has made no secret of the fact that it would like to divest itself of Ansett.

Murdoch claimed that ATI would be an easy company to float in two or three years time now that it had returned to profitability and is likely to improve yields substantially in the years ahead as the economy improves and Australia moves closer to the 2000 Olympics.

Ansett earned profit of $59m last year before tax and abnormals against a loss of $91m the previous year. Unfortunately losses on foreign exchange related transformed the 1992/93 operating profit to an $180m loss, something not helped by ATT’s still substantial $2bn in debt.

Wa Looks Ahead:

Studies which could affect air services in the northern part of West Australia have been released, both of them designed to boost traffic.

The first deals with the possibility of starting direct flights from Asia to the Kimberleyregion in a few years time and ending Ansett’s current monopoly on air travel to the area if a competitor can be found. A second study examines international air freight capacity out of WA generally.

Also released by the WA government is a planning strategy for the tourist town of Broome which is intended to protect the economic potential of the area and maintain investor confidence. Direct flights from Singapore to Broome have brought in many tourists and the result has been an upturn in the town’s Industry as well as attracting investors.

Broome airport has been granted restricted international status to handle the flights from Singapore but the report recommends the establishment of a new airport on the northern side of the town.

Qantas Will Refinance Australian Debt:

Qantas will refinance the remaining $700m of Australian Airlines’ debt over the next three months, ahead of the second stage of Qantas’ float.

Although the date of the completion of Qantas’ privatisation has not been announced by Finance Minister Ralph Willis, many observers expect it to occur in October 1994. The date is dependent on favourable overall trends in the international air market and demonstration of the fact that the Qantas-Australian merger was a beneficial step. The clearing of Australian’s debt before that would be an obvious plus for potential investors.

On a nostalgic and slightly sad note, Australian Airlines will officially disappear this month, as will the TN flight code which was used for four decades by it and its predecessor, Trans Australia Airlines (TAA). As of November 1, all flights will carry Qantas’ QF code.

 More Flights to Bali:

heels of Ansett inaugurating services to Bali comes the announcement from Cathay Pacific that it will begin flying from Perth to Hong December. Cathay will now fly three weekly services from Perth to Hong Kong, two of them via Bali and one direct.

Ansett Predicts Third Carrier:

Ansett’s director, Graeme McMahon, has predicted the arrival of a third Australian domestic airline operating on the major routes within five years.

Mr McMahon said he expects any such carrier to most likely be an existing regional operator which outgrows its current network rather than an entirely new operation. He considers the infrastructure will support a new entrant, saying “as the small players at the bottom end of the market grow, they will come under pressure to acquire aircraft of a type, size and speed that will be suitable not only to fly over the existing network, but to head off in other directions”.

He went on to suggest that such competition to Ansett and Qantas/Australian would appear gradually, with operators Initially offering something like special weekend fares on some trunk routes to complement their regular services.

One thing’s for sure-any new entrant to the major routes marketplace won’t be called Compass Airlines!

Ansett responds to 146 Resistance:

Ansetthas responded to customer resistance to the six abreast seating arrangement of the BAe 146s used on its high frequency Melbourne/Hobart route by reconfiguring the aircraft.

The new configuration includes a business class, five abreast seating and hot galleys, the airline claiming this has turned the antipathy around. The former Eastwest1468 were originally delivered with five abreast seatingbut were later changed to six abreast to enhance profitability. The latter can be a bit tight in the 146 (which has a cabin width slightly less than a Boeing 737 but more than a DC-9/MD-80 or F28/100) while five abreast is very spacious.

Anz Looks to China:

Air New Zealand is looking to make use of the landing rights it has in China during the 1994/95 financial year.

The airline has rights to fly to China seven times per week but is not rushing to use them until it has a better understanding of the market. ANZ recognises China as being an enormous potential market for the future but sees trade as providing most of the early business with tourism taking some time to grow.

 Air Fares on the Up:

Australian domestic air fares have gradually increased since the demise of Compass Airlines, according to the Prices Surveillance Authority (PSA).

A survey of the first full quarter since Compass ceased operations has shown that fewer discount tickets available and that average fares on the 21 busiest Interstate routes rose by 7. 4% in the June 1993 quarter. Despite this, the average fare per passenger kilometre in June 1993 (just over 16 cents) was still lower than in 1992 (17. 2 cents) and 1991 (18. 4 cents).

 for the Birds:

That perennial bugbear for airports-birds causing problems for those who run Adelaide airport.

The problem this time revolves around two pigeon fanciers who refused FAC requests not to release their birds during peak traffic times because of the potentially great danger to aircraft and those inside them. The local council then took over, threatening fines on the two men, who again refused to cooperate.

One of them keeps his pigeons just 200 metres from the airport’s eastern boundary is even threatening taking legal action against the council and says he can’t understand what the fuss is all about.

Perhaps someone should show these idiots (who probably wear county caps and breed ferrets as well) some birdstrike crash statistics and remind them it may well be their houses a crippled aircraft will crash on.

A decade ago, BA nearly lost a Boeing 747 out of Tullamarine when it struck a flock of racing pigeons, suffering in the process major damage to two of the four engines. Fortunately it was a cold winter’s day and the 747 was destined for Sydney rather than Singapore or Bangkok. Summer and a full fuel load may well have resulted in a different story.

About the same time the RAF lost a Nim- rod (hardly a bug smasher) with an Australian pilot in command due to a massed birdstrike after takeoff, while the crew of an RAAF F-111 are also now nothing more than memories due to their impacting a sole seabird one evening off Evans Head. Birds and airports regrettably don’t mix.

Australian International Passenger Market Up:

Department of Transport figures show Australia’s passenger market grew more than 11% in June this year (compared with June ’92) and increased by an overall 8% during the 1992/93 financial year.

The rate of increase of international traffic into and out of Australia continues to exceed world averages. Over the past decade it has grown by 8. 7% compared with 5. 7% worldwide. Most of the growth can be attributed to ever increasing tourism to Australia, while the number of Australians travelling overseas increased only slightly. Inbound traffic rose by 8. 5% and outbound by 8. 8% Qantas’ share of the market increased from 37. 0% in 1991/92 to 39. 5% last year while the most popular route was Sydney/ Auckland followed by Tokyo/Sydney.

Sydney by Far the Busiest:

Sydney Airport is the country’s busiest international by a wide margin if passenger movements are any indication.

The 1992/93 financial year saw 4,647,209 international passengers move through Sydney, or 48% of the overall total of 9,753,816. Melbourne was next with 18. 3%, then Brisbane (14. 6%), Perth (9. 7%), Cairns (6. 19%) and Adelaide (2. 2%). No other airport exceeded 1% of the total.

Although the number of passengers using Melbourne Airport increased 1992/93, its share of the business was reduced while Cairns showed the biggest pro-portional increase, handling 596,164 passengers in 1992/93, 37% more than 1991/92’s total of 435,824.

The Greatstatesmanat Work:

As has been regularly reported lately, the United Nations is just about broke and operating on a day to day basis at the moment due to the reluctance of a large number of countries to pay their membership fees on time or at all.

But fear not, Australia’s foreign minister, Gareth Evans, has come up with a solution which removes the responsibility to pay from the errant nations and puts it firmly in the court of the poor international air traveller. Senator Evans has proposed to the UN’s 48th general assembly that a $5 surcharge be levied on each international air ticket sold throughout the world. The 300 million tickets issued each year would therefore raise about $1. 5bn which could be collected by the airlines on behalf of the UN.

The theory sounds great if a little unfortunate, but remember the problems caused by Australia’s ill fated arrivals tax which was supposed to be collected by the airlines? Not surprisingly the airlines were less than interested in collecting it (and the passengers even less interested in paying) and couldn’t legally be forced to do so, so the idea was-happily – dropped!

Continuing Heavy Airline Losses Predicted:

The International Air Transport Association (IATA) has predicted continuing heavy losses for the world’s airlines: $US2. 5-3bn this year, staggering $US14bn over the current four year period.

IATA expects further losses in 1994 and predicts no return to significant profits un- til 1995 at the earliest. Factors working against a recovery in 1993 included an increase in capacity of 7% over the first six months compared with traffic growth of only 6%. There is now 4% more capacity than there was four years ago, the equivalent of about 400 empty 747s crossing the Atlantic every day.

Of greatest concern is that the situation exists despite current low fuel prices and interest rates.

Unions Merge:

A single, powerful pilot’s union could emerge following agreement in principle on a merger of Qantas and Australian Airlines groups in the Industrial Relations Commission.

The agreement, when ratified, will see the Qantas union, the Australian International Pilots Association join forces with the Australian Airlines Limited Pilots Association. The agreement guarantees no loss of conditions to the pilots. Agreement over seniority lists was reached before the Qantas/Australian merger took place.

Ansett has its own company union of pilots. There is speculation that the formation of the Qantas union might put pressure on Ansett’s pilots to join, thus forming a single national union.

Major Changes Mooted for Regionals:

The continuing fast pace of change in the Australian aviation industry has set the rumour mill abuzz with suggestions that Hazelton Airlines will go public during 1994.

Although Hazelton cannot officially confirm the suggestion, it is claimed that a public float would provide the injection of funds to assist Hazelton in its fleet re-equipment programme, which recently has included the acquisition of Metro 23s to replace the Shorts 360s. A major profile on Hazelton begins on p32 of this issue.

Scuttlebutt that Kendells’s fleet of Saab 340s and Metroliners will soon be repainted in full Ansett Australia livery. As the Ansett Group rationalises its operations to create a more easily marketed single brand name and to provide a seamless service, Kendell could join Eastwest and Ansett Express in losing its individual identity.

 Virgin’s Vintage Airtours:

Virgin Airways is deliberating the viability of forming a DC-3 airline to fly 1940s style nostalgia flights from southeast England to Normandy or the Channel Isles.

The UK service would be modelled on Virgin’s successful Vintage Airlines operation in Florida. The Vintage Airlines flights are staged as if they are taking place on VE day in May 1945, complete with an inflight announcement from the then US President that the warls over with victory champagne served out. The European service would fly scheduled day tours to historical war sites.

Nice Little Earner:

That show business phenomena, Phantom of the Op- era, has proved to be a good money spinner for all concerned, including the airlines which carry patrons to the Australian performances.

Phantom’s two-and-a-half years and 1048 full house performances in Melbourne generated $25m revenue for Qantas and Air New Zealand, which carried more than 100,000 New Zealanders across the Tasman to see the show. The domestic airlines also benefited greatly, flying many thousands of Australians to Melbourne, many of them on special Phantom package deals. Some 35% of the Melbourne audiences comprised visitors from interstate or from New Zealand.

Qantas was a sponsor of the Melbourne production of Phantom and has followed that up with an involvement in the recently opened Sydney production, which attracted $25m worth of advance bookings. The show pumped an estimated $200m a year into the Victorian economy and there is no reason to suspect Sydney will not benefit in a similar way.

 Freight City at Melbourne:

The Federal Airports Corporation (FAC) has appointed a consortium (comprising Lend Lease, CRI and Canadian company International Aviation Terminals) to carry out a feasibility study for the first stage of development of a Freight City Concept at Melbourne Airport.

The study will cover a range of issues, such as new business enterprises for exporters and importers, infrastructure, and the implementation of international practices to increase the volume of freight passing through the airport.

Some 60 large and small businesses have expressed an interest in being involved with Freight City, which would be established on 13 hectares of land near existing passenger terminals. The international airfreight market is expected to increase by an aver- age 89% annually between now and the turn of the century. 1992/93 growth was 16%.

Qantas Flying 2200 Singaporean Troops to Rockhampton:

Qantas has scored a windfall with the commencement in mid October of a series of 16 charter flights as part of a $2m contract to fly 2200 troops from Singapore to Rockhampton, where they are to take part in Exercise Wallaby at the Shoalwater Bay Training Base.

Most of the are being flown on scheduled Qantas flights to Sydney and Brisbane, where they are connecting with the charter flights to Rockhampton. A similar combination of scheduled and charter flights will be used to fly the troops home in November. A few chartered flights will also operate directly between Singapore and Rockhampton.

The contract also includes the transportation of 29 tonnes of military equipment to and from Rockhampton for the exercise. Qantas Boeing 767-300 aircraft are being used for 14 of the charters, with Boeing 7378 being used for the other two.