Airline Affairs

Capacity from Melbourne to Sydney increases by 9%, to Brisbane by 15%, Adelaide by 12%, Perth by 6% and Canberra by 9%. An important and possibly overdue move is increasing the number of direct flights between Melbourne and Brisbane to avoid the inconvenience of having to stop at Sydney en route. Qantas points out that one of the advantages gained as a result of the merger between it and Australian Airlines is the ability to bring extra widebody aircraft into the domestic schedules when needed.

Qantas has also increased the number of domestic seats it flies to and from Queensland by an additional 10,854 seats each week. This represents a substantial 23% increase with some markets’ capacity increasing considerably more than that. Cairns sees its available capacity up by 35%, the Whitsundays by 40% and the Gold Coast by 37% From June, Qantas will introduce a daily nonstop 737 service between Cairns and Coolangatta, timed to connect with flights arriving from Japan and giving tourists the option of flying on directly to the Gold Coast.

 Free Enterprise Gone Mad:

A recent piece from Karl Greenfeld writing in the Wall Street Journal caught our attention, as in a way it’s funny but then again, perhaps not. . .

Greenfeld was describing his recent Aeroflot flight from Vladivostok to Khabarovsk. After arriving at the airport for a 0700 flight he found it had been cancelled, news which obviously did not disturb the multitude of Russian merchants who had camped out at the airport awaiting any flight out as they were obviously resigned to enduring delays.

In the VIP lounge, Greenfeld was told by a uniformed Aeroflot employee that the 0700 flight had no fuel but perhaps the 1030 flight would leave. The conversation was translated by a well dressed young man called Dimitri who then of fered Greenfeld a charter flight to Khabarovsk for $US140, a price which was quickly negotiated down to $US90. After agreeing to the price, Dimitri put Greenfeld on board a Tu-154, (pretty much an equivalent of our 727-200) which took off shortly afterwards. Even though the terminal was full of rouble paying customers, the aircraft left with just one passenger on board – the hard currency paying Greenfeld.

Dimitri apparently divided the money between the crew and various Aeroflot officials, after pocketing his own share, of course! Aeroflot’s operations are now severely hampered by a lack of fuel (which must be purchased in hard currency), spare parts, effective management and now – so it seems by excessive zeal in the private sector.

 When You’re on a Good Thing. . . :

That quaint Antipodean habit of spraying the interiors of arriving overseas airliners with pesticides will continue in Australia and New Zealand, despite US concerns it could be a health hazard.

The US government is apparently considering taking steps to discourage the practice continuing, but according to the Australian Quarantine and Inspection Service, the spraying is a very valuable quarantine measure which destroys insects which may be carrying human, animal or plant disease. Quite right, too.

Too Close for Comfort

Two Boeing 747s came close to colliding over Russia in January, the result of a serious error by an air traffic controller.

The British Airways and All Nippon Airways 747s were put on a collision course by the controller, and according to a Russian aviation official, disaster was avoided thanks to the aircrafts’ TCAS collision avoidance equipment giving sufficient warning for courses to be changed. The 747s were flying at 33,000 feet at the time of the incident.

 Kansai Recalcitrant

Japan’s new Kansai International Airport has no intention of reducing its proposed landing fees, the highest in the world, despite widespread criticism from carriers (refer p24 Mar 94 AA).

The airport’s management says that even with the proposed scale of fees ($US9525 for a 747-400) the airport will suffer a ¥20bn ($A265m) loss in its first year of operation and should actually be charging more! By contrast, the small airport at Elizovo in Russia is trying to entice cargo aircraft to stop there and refuel by offeing the lowest landing charges in the world along with very cheap fuel. The airport’s air freight enterprise is run by a joint US-Russian company, and the idea is to not only create business for it but also to earn some scarce hard currency – fuel and landing fees would be paid only in US dollars.

 Farnborough Dates:

In our March issue we listed the dates for this year’s Farnborough Air Show as September 25-30. Unfortunately this is wrong. the correct dates being Sept 5 thru 11. The error occurred while in final text editing.

TN History Gets Green Light!

Qantas management has approved a project aimed at documenting the full his- tory of TAA from its inception in 1946 through to its merger with Qantas in 1992.

To be written by noted aviation historian John Gunn, the book will be fully sponsored by Qantas and will be available in 1995. John Gunn was responsible for the excellent three volume series (The Defeat of Distance, Challenging Horizons & High Corridors) on Qantas’ own history and is partly through the fourth volume which deals with events from 1970 through to the present. This, obviously most interesting, fourth volume though will not be released till later this decade.

The approval to proceed with the TN project was certainly assisted by the arrival of James Strong at the helm of Qantas, a move that has also breathed new life into the Southern Preservation Super Constellation restoration in the US.

Apparently former CEO John Ward was never all that excited about the pros- pect of bringing a Qantas liveried Connie back to Australia though fortunately for aviation his successor does truly share a real love for aircraft and what they represent. A truly welcome change in this all too clinical era of bean counting technocrats and ego driven corporate raiders.

AA is certain that the positive publicity generated by the Connie’s exploits around Australia through 1995 will be worth a zillion dollars in free television airtime when it comes to promoting the heritage of Qantas prior to its eventual privatisation. Good on you James.

Ansett Looking Better:

As Ansett Transport Industries partners, News Corp and TNT, begin to look better with every passing day, the fiscal fate of Ansett Australia also improves.

News recently reported a half year profit of a startling $625m whilst TNT, after three consecutive loss making years, has also turned the corner with $25. 5m profit nicely backing up its share price surge of the past eighteen months. Both reports mentioned the solid contribution that ATI had made to the fortunes of both partners whilst News listed its ATI profit for the six months as $64. 5m indicating that Ansett itself this financial year might well be able to top $250m in operating profit, an incredible turnaround from the situation of just two years ago.

Both partners also quashed rumours of a third equity partner and that TNT most certainly had no plans to sell its share of ATI though News has for a long time indi- cated that it would prefer to divest itself of non core assets as reflected by its air- line and resort operations.

 Traffic Continues to Soar:

Backed by a improving economy, increased inbound tourism and a newfound penchant for Australians preferring to holiday at home, the domestic airlines recorded another record quarter in the three months leading up to Christmas.

December 1993 quarter data from the Dept of Transport (refer table) indicates a rise in Revenue Passenger Kilometres (RPK) of around 5% on the same period last year and around 4. 2% on the September quarter which itself was up something in the region of 20% on the same period in 1992. The reason for the approximate rather than precise comparisons stems from the fact that there is now a slight difference in the year on year figures now that Qantas and Ansett are also flying international.

Ansett held its market share lead by a healthy margin over Qantas and even increased it in the important RPK area whilst Qantas made up some ground on the basis of pax uplifted. Qantas’ freight performance was exceptional with a massive increase in tonnes uplifted whilst Ansett remained fairly static compared with the September quarter.

Average load factor increased from 76. 0% to 77. 4% whilst both airlines privately reported that their yields had increased significantly with tangible growth in the full fare premium class market not seen since before the Pilots’ Dispute of 1989.

Vietnam Continues to Grow:

Vietnam Airlines is receiving further in- AIR INTER ternational cooperation in its sprightly development, this time from Air France, reports Julian Green.

Three A320s have been wet leased to Vietnam Airlines on a two year contract. The aircraft, painted in VN’s imaginative all white ‘colour’ scheme, landed at Ha- noi’s Noi Bai Airport in late October and were impressed into service on the air- line’s regional and internal routes. Twenty one AF pilots and 15 technicians are now based at Hanoi.

Part of the agreement with Air France entails the training of Vietnamese flight and cabin crew, after which they will take over the aircraft on dry lease. The contract with VN is expected to raise $US60m in revenue for Air France over the two year period.

With more and more western aircraft being operated by Vietnam Airlines, it is anticipated that fewer than 5% of all foreign travellers to and within Vietnam will travel on the outmoded Tupolevs, Antonovs and Yaks by years end.

Meanwhile, AWAS’s contract to provide 767 VH-RMA has been extended for another two years. The agreement will see Ansett flightcrew and senior cabin personnel continuing on services which extend to Saigon from Sydney and Melbourne and on to Moscow, Hong Kong. Bangkok and soon to Paris. At least two more widebody aircraft are expected to be added to the fleet during 1994.

The outright purchase of Airbus aircraft has up till recently not been possible as a result of the US trade embargo prohibiting the sale of any US made component, including engines, to the former enemy. Although the embargo has now been lifted, the United States will have to make up considerable ground as international investment booms in the country. Boeing estimates that it has already lost $US3 billion in potential revenue as a result of the embargo.

Marking an ever increasing number of international airline agreements, Gulf Air has recently commenced services to Saigon via Bangkok, bringing the number of foreign airlines serving Vietnam to over twenty.

From January to October 1993, Vietnam Airlines operated 12,366 flights carrying 845,700 passengers, of which 490,500 were on domestic operations, 11,000 tonnes of freight was also uplifted.

China’s Quandary:

At its peak, China’s air traffic was increasing at a rate of 33%. It is now a more modest 22% However, the pressure placed on avia- tion infrastructure in the country after the start up of some three dozen airlines in recent years continues to increase at an alarming rate, and experts are con- cerned that unless stringent safety meas- ures are enforced, travel within China could see a repeat of the fearful year that saw 380 people killed in five major air crashes.

General Manager of Beijing’s Aircraft Maintenance Engineering Co (AMECO), a joint venture between Lufthansa and Air China, concisely put forward China’s dilemma by saying, “In the US there are about 3500 aircraft operating to satisfy the passenger, cargo and mail transportation needs of a population of 260 million. In China, we are talking about 350 aeroplanes and 1. 1 billion people.

“We can see the potential growth of this market, but the timeframe of this development is a different story. It has been realised that this growth rate cannot be managed. We (China) need well trained and experienced pilots as well as technical ground support. (The growth) has created a high level of uncertainty. ” Continued foreign investment in maintenance and overhaul joint ventures such as AMECO are one solution to the growing problem. GAMECO, a similar style of operation based in the southern city of Guangzhou suffers the same difficulties, saying “We cannot cope with the manpower requirements right now. ” Only three years ago, GAMECO’s business projections were based on the maintenance of 28 aircraft for China Southern, its principle customer. Today, the fleet boasts 71 western aircraft and is still growing. Garuda Indonesia New joint projects with Asian airlines such as Cathay Pacific, Japan Air Lines and Singapore Airlines are taking shape, while Swissair is understood to be negotiating with China Eastern Airlines to set up a maintenance facility in Shanghai.

These high investment enterprises may be able to keep the fleets of the major airlines in the air, but the air traffic control and airport infrastructure must keep pace with the development of maintenance facilities if air travel within China is to become the safe means of travel that it is elsewhere in the world. (Julian Green)

Russian Safety Under the Microscope:

Poor maintenance, an ageing fleet, overloading (including ‘standing room only) and dodgy safety standards have long been a perception of airline operations in the old Soviet Union, but since its breakup and the prolifera- tion of airlines flying in the colours of the various nations which now make up the Commonwealth of Independent States, the situation seems to have worsened.

While Aeroflot still exits as one of the Russian airlines, some 320 new operators have been registered in Russia alone. The crash of a Baikal Air Tupolev Tu-154M in Siberia this January with the loss of at least 120 lives has sparked new debates on air safety in the CIS.

Perhaps indicative of the situation is the fact that when an Antonov An-26 crashed last December, 36 were listed as killed even though only 11 were on the aircraft’s manifest. Last August, more than 70 people were killed in a Yakovlev Yak-40 crash, an aircraft designed to carry just 32 passengers.

The statistics seem to support concerns. In the CIS, one airline passenger is killed for every 1. 09 million passengers flown compared with 1. 25 million for the rest of the world and 14. 3 million in the USA. The world average is in some ways artificial as it doesn’t accurately reflect the extremely good figures for Europe, the Middle East and Australia, all of which are at least as good as the USA’s.

The statistics show that safety in the CIS was at its best in 1989, the last year of the Soviet Union. At that time its fatality rate per one million passengers embarked was 0. 3, better than both the USA and the world average. Since then it has blown out to 0. 62 in 1990, 1. 26 in 1991 and 0. 92 in 1992, the latter figure about 13 times worse than that achieved in the USA.

There was an admittedly sharp decline in the number of fatal airline accidents in Russia last year – 11, compared with 25, 24 and 18 in the three preceding years, although this is tempered by the knowledge that there was also a significant decrease in passenger kilometres flown due to fuel shortages and the grounding of aircraft because of a lack of spare parts. In addition, substantially fewer passengers chose to fly as fares increased markedly.

 BA Plans World Cargo Centre:

British Airways has announced plans for a new $330m World Cargo Centre at London Heathrow Airport in conjunction with the British Airports Authority.

The three phases of the building schedule are due to be finished in 1996, 1998 and 2000 and when completed it will double BA’s capacity for handling freight, courier and mail shipments at Heathrow. It will be able to deal with a million tonnes of cargo each year and will have a floor area of 55,740m2 (600,000sq ft).

Maximum automation will be a feature of the World Cargo Centre, which is be- ing built around the present cargo terminal at Heathrow. Cargo contributed about $490m to BA’s revenue in the six months to September 1993.

 Tin Shed Ship Terminal:

Brisbane Airport’s infamous ‘tin shed’ international terminal could find itself in use as a shipping terminal when the airport’s new international facility is opened in 1996.

The Brisbane Visitors and Convention Bureau reckons the building has features which make it ideal for use as a cruise liner terminal and it could easily be adapted for shipping. The idea is only in its early stages but the Bureau wants to “float it (pun intended) and see what we come up with”.

Kununurra Short of Beds:

An accommodation shortage is inhibiting the tourism potential of Kununurra near Lake Argyle on West Australia’s Ord River, according to Ansett WA’s general manager.

Bill Jauncey noted the situation at the opening of Kununurra airport’s new terminal, saying that traffic into the town was good and growing at a rate of 8-11% each year. Most tourists visit the area in the dry season which creates too much demand on the available accommodation, while there are plenty of spare beds during the wet. He suggests that tourists should be encouraged to visit Kununurra in the wet season, which has its own attractions.

 Mas Upgrades Cabin Service:

Malaysia Airlines has completed the installation of personal in seat video entertainment systems in the first and business class cabins of its Boeing 747-400 fleet.

The in seat video system offers a choice of six programmes including five full length features and one short feature, while passengers also have the choice of 10 audio programmes or seven video games. Passengers in all classes can also use the newly introduced MASfone service allowing them to make inflight telephone calls from their seat. First and business class menus have also been upgraded to feature a wider range of Western and Asian style menus.

Malaysia Airlines operates a fleet of nine 747-400s. The 747-400 is currently operated on flights from Sydney and Melbourne, and is soon to be introduced on services to Brisbane.

Northwest’s Smoke Free First Class:

Northwest is the first North American airline to introduce non smoking first class cabins, the airline noting that a strong consumer preference for smoke free air exists. Northwest also recognised the difficulty in effectively maintaining smoking and non smoking sections in the small first class cabin.

Overall demand for a smoking section is still relatively high among Asian travel- lers, with 63% of Asian customers preferring smoke free flights. Among US and European travellers a significantly higher 80% of passengers prefer smoke free air.

 Mas Expands:

Malaysia Airlines (MAS) has added Rome and Buenos Aires to its route network with twice weekly flights to both cities from Kuala Lumpur.

The new services increase MAS’s worldwide scheduled network to 93 destinations on six continents, including ten in Europe. The Buenos Aries service is an extension of the existing Kuala Lumpur/Johannesburg flight, travelling on to Argentina via Cape Town. Both the new services offer convenient MAS connections from Australia.

 Gone Troppo:

Qantas has launched a competition offering 500 tropical island holidays for two to passengers travelling on its domestic flights between February 15 and March 26.

The holidays comprise five nights on the Queensland island resorts of Dunk, Brampton or Great Keppel as well as return air travel from any Qantas port in Australia. To enter, passengers have to be travelling between the nominated dates on any Qantas or subsidiary airline domestic flight. Fill in the entry form, wait for the weekly draws and then – with a bit of luck – catch some sun at Qantas’ expense.

 Death by Microchip:

Bearing in mind that in Australia the use of computers, CD players and other electronic devices during critical parts of an aircraft’s flight is banned, the following item from a Flight Safety Foundation circular may be of interest. It involves an American airline passenger using an HF marine band transceiver. . .

It isn’t clear whether the passenger was transmitting or receiving, but at around the same time the aircraft’s autopilot and yaw dampers disengaged while the aircraft was holding at 13,000 feet.

The first officer was sent aft and had the passenger turn the device off, but soon afterwards the autopilot and yaw dampers again disengaged. The first of ficer yet again visited the passenger, and on returning to the flightdeck told his captain the man had a bag filled with electronic devices and he was apparently trying each of them in turn.

Perhaps the passenger wanted to make absolutely sure the aircraft was sent plunging to earth!

Anz-Lan Chile Cooperation:

A new marketing alliance between Air New Zealand and Lan Chile Airlines has resulted in the introduction of further flights from Sydney and Melbourne to South America from this month.

Two flights will operate each Friday, one each from Sydney and Melbourne to Santiago via Auckland and Tahiti. Air New Zealand will operate the first half of the services with Lan Chile taking over for the Tahiti/Santiago legs. From San- tiago, passengers can travel on Lan Chile services to most South American countries and on the airline’s extensive network within Chile.

BA Cautious on Qantas Float!

Qantas shareholder British Airways has warned against rushing the Qantas float to take advantage of the booming share- market, saying that in the best long term interests of the airline, it should be delayed until a fundamental improvement of Qantas’ basic operating economics has been achieved.

The oft delayed float is now expected to take place in the first half of 1995 at the earliest, although there has been speculation that it might be brought forward to later this year in order to take advantage of the current bullish sharemarket. BA says that a longer lead time would allow Qantas to settle issues such as management restructuring and the complex merger with Australian Airlines.

BA has 25% of Qantas’ stock and has rejected suggestions it wants to increase this limit imposed by the Australian government.

Hazelton Looking Good:

Following its recent and very successful share float (refer p24 Mar 94 AA) regional operator Hazelton Airlines has announced a better than expected result for the December 1993 quarter.

The airline recorded a net profit for the three month period of $1. 15m – double the forecast – with the result that its share price soared to a high (at presstime) of $2. 68 compared to the issue price of $1. 00. It is expected the forecast profit of $2. 3m for the year will be easily ex- ceeded.

Managing Director Max Hazelton has ruled out immediate expansion of the airline and plans to increase its market share on existing routes before looking further afield.

New Tassie Service:

A new air service between Burnie in Tasmania and Tyabb on Victoria’s Mornington Peninsula has been launched by Phillip Island Air.

An initial four services per week will be offered, but this could build to several each day if the demand warrants it. Phillip Island Air says the service is particularly useful to travellers who don’t want to fly to Tullamarine and then be faced with a long drive to outlying areas. The airline has been flying between Phillip Island and Tasmania’s northwest for eleven years.

 Us Safety Improves:

US air safety had a good year in 1993, with improvements recorded in all areas when compared with 1992.

Major scheduled airlines suffered no passenger fatalities during the year, while air taxi operators recorded their lowest number of fatalities ever – 42 compared with 70 in 1992. Charter operators experienced their fourth successive year without a fatal accident. There was however one fatality recorded by a major carrier, not a passenger but a groundcrew member who was struck by a propeller.

Despite the lack of the majors did actually record more accidents in 1993 than they did the previous year, 23 compared with 16.

Commuter airlines recorded fewer accidents in 1993 but the number of fatalities increased to 24 from 21. The total number of US civil aviation accidents in 1993 was 2158 (2221 in 1992) and the number of fatalities was down to 800 from 962.

General aviation also contributed to 1993’s good result, the statistics revealing the best ever year with all time low figures for the number of accidents (2022), the number of fatal accidents (385) and the number of fatalities (715). The fatal accident rate dropped to 1. 67 per 100,000 flying hours, an 11% improvement on 1992.

Us Airline Recovery on the Way?:

Even though US airlines posted another round of heavy losses in 1993, there are signs of recovery as a result of stronger yields and a reduction in the overcapacity problem which has burdened them for some time.

Overall, eight of the nine major US air- lines (TWA had not announced its results at the time of writing) recorded sales of $US67bn in 1993, an increase of 9% Be- tween then they lost $US684m, still a large sum by any standard but a vast im- provement on 1992’s staggering loss of $US3. 2bn.

Only two of the mainstream US airlines recorded profits in 1993, the remarkable Southwest ($US154m) and America West ($US37m), which turned around from 1992’s loss of $US132m thanks to substantial downsizing in an attempt to emerge from Chapter 11 bankruptcy protection.

The other majors recorded losses, although in all cases these were considerably less than the previous year. Individual losses for 1993 were American ($US96m), United ($US50m), Delta ($US226m), Northwest ($US115m), USAir ($US349m) and Continental ($US39m).

 Ana Restructures:

Japan’s All Nippon Airways (ANA) has announced a restructuring plan which it hopes will cut costs by $US54m in this financial year.

At the heart of the cuts is the loss of 1500 jobs, a reduction hoped to be achieved mainly by natural attrition, while a substantial number of administrative staff will be reassigned to jobs in sales and maintenance. ANA is also looking to increase its revenue by about $US180m by improving services for business travellers.

The airline shares the problem of extremely high overheads, a reduction in foreign currency earnings thanks to the strong yen and a decline in business due to Japan’s recession and fierce competition with rival airline JAL. The problem is recognised by both with the result that they are now trying to avoid duplication by sharing maintenance responsibilities for their common Boeing 747 and 767 fleets. ANA and JAL hope to save up to $US80m between them over the next five-years through this. Both airlines have also ordered the 777 and plans are already in place to pool resources with that aircraft.

ANA recorded a net profit of $US216m for the year ending March 1993 but this is expected to be substantially reduced in the financial year just ended with costs up and revenues down by about 3%.

 Northwest Cuts Australian Services:

Northwest Airlines has substantially reduced its services to Australia to just one per week, the result of financial considerations rather than the diplomatic and mooted legal battle between itself and the Australian government which was fought last year.

Northwest has dropped its thrice weekly Sydney/Los Angeles service from this month and now has only the weekly Sydney/Osaka/Detroit flight intact. Industry speculation suggests that even this will be abandoned later in the year, mak- ing Northwest the third US carrier to terminate trans Pacific services in recent times. The others were American Airlines in 1992 and Continental last year.

United Airlines is expanding its Australian operations and has indicated it would like to take over Northwest’s routes but is unhappy with the terms of the US-Australia bilateral agreement reached late last year.

 Lufthansa Orders New Unisys Boarding System:

Lufthansa has placed the first order for the Unisys Boarding Control Assistant system which should improve passenger service and reduce operational costs.

The Boarding Control Assistant is one component of the recently announced Unisys Airport Passenger Processing Systems (AAPS). Lufthansa will use a modified version called the Lufthansa Boarding Control (LBC)and it expects to improve customer service by automating the boarding process. LBC will improve flight boarding for passengers, while easing operations for gate agents and flight attendants.

By automating the procedure of “lift- ing” ticket coupons or boarding passes, LBC is designed to help Lufthansa staff move passengers more swiftly through the gates, determine seat duplications and reduce ticket fraud. LBC also will assist Lufthansa in increasing airport se curity by providing information to the air- port baggage reconciliation systems.