9 june 2015 .pdf

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http://www.smh.com.au

Qantas, Emirates and Singapore Airlines out of excuses for fuel surcharges

Although fuel prices have fallen Qantas hasn't lowered its fares

instead wrapping the former fuel surcharge into the headline price of

the ticket and only offering some savings on frequent flyer points

redemptions Photo: Glenn Hunt With oil prices almost half what they were this time last year,

travellers could be forgiven for wondering when they will benefit from

an equally large fall in air fares. The bottom line is that you won't. Egged on by investors, airlines are doing their utmost to pocket the

gains from cheaper fuel and weaker competition on international and

a domestic routes. In fact, airlines worldwide are set to report

due mostly to billion) profit this year4 .38billion ($3 .29collective $US

the sharply reduced fuel prices and cramming more passengers on planes. Their profit margins will be almost double what they were last year,

and Qantas is among the biggest beneficiaries as it flies towards a

$1 billion annual pre-tax profit. Advertisement With airlines on cloud nine, it makes the fuel surcharges that Qantas,

Emirates and Singapore Airlines slap on tickets harder to justify by

the day. The airlines cried poor as they rushed to repeatedly raise surcharges

when oil prices were climbing between 2011 and 2014. But

they have been acting at glacial pace to cut them since the good

times returned.


Continue)( Qantas and Emirates still impose surcharges of $1080 for a

return business-class flight from Australia to London, and

$570 for economy. On the popular Australia-Los Angeles run,

the flying kangaroo has a fuel fee of $670 for a business seat

and $570 for those in cattle class. Frequent losers They hit frequent-flyer members hardest. Airlines cannot dramatically raise overall ticket prices by

boosting surcharges because travellers would opt for rival

carriers that do not impose them. But they can bolster their revenues from frequent flyers who

have to pay for the fuel surcharge component of their fare in

cash or loyalty points. They also snare travel agents in their net. The likes of Flight

Centre have long complained about fuel fees because they

often don't earn a commission on the surcharge component

of the total fare. Qantas first introduced the fuel surcharges in 2004, charging

passengers up to $14 a sector on international flights and $6

for domestic services. It was a convenient way of justifying to travellers increases in

ticket prices, which consumers were willing to stomach so

long as the cost of fuel was soaring. .


(Continue)

But it has plunged since the middle of last year, and the

surcharges are quickly becoming a PR nightmare for good

reason. Virgin Australia inferred as much in January when it

removed the last surcharge from its international network. Qantas is doing its best by no longer referring to them as fuel

it is "folding" them into its base fares. Instead,. surcharges Different course In Hong Kong, the aviation regulator has cut the surcharges

airlines can impose on passengers flying to Australia by 75

per cent to $HK211 ($35) over the last year. Australia is not regulated, and there appears little appetite

here to take a leaf out of Hong Kong's book. The Australian Competition Consumer Commission applied

began the blow torch to Qantas and Virgin in January when it

.investigating fuel surcharges


Continue)( Six months on, the regulator is still looking into the matter. It's questionable whether it can do much anyway. Unless

Qantas, Emirates or Singapore Airlines are deceiving or

misleading consumers, they are free to slap on surcharges

as they like. One of the few forces that will drive fares down is increased

competition. In both domestic and international markets, the battle

between airlines is lessening after a ferocious few years. per cent 26 surged domestic routesclass fares on -Business

earlier, in the wake of Qantas and Virgin from a year, in May

ending their capacity war. raise this week that it has been able to Qantas also said

because foreign airlines have reduced international fares

their level of growth on routes to Australia. Ultimately, airline executives believe they answer to their

shareholders first, and their customers second. But they can't afford to annoy the latter for too long,

especially on something that flies so close to their

back pockets.

http://www.globalindonesianvoices.com

Challenges in the Air as Indonesia Climbs to 2034th Largest Aviation Market by 6Become

Jakarta, GIVnews.com Indonesias aviation industry is one of the countrys most promising sectors. Being an archipelago, Indonesia naturally needs air travel for the

mobility of its people and goods. With a population of roughly

250 million and with a rising middle class, Indonesians are

hungrier than ever for air transportation. Indonesian airlines have been making headlines around the

world; Garuda Indonesia won Worlds 7th Best Airline, 1st Best Cabin Staff, 9th Best First Class, 8th Best Business

Class, 2nd Best Economy Class, and 7th Best Airport Services

in the prestigious 2014 Skytrax World Airline Awards. By 2034, Indonesia is expected to be the sixth largest market

for air travel. By then some 270 million passengers are

expected to fly to, from and within the country. -5Garuda Indonesia Officially Recognized as (Read more:

)Star Airline by Skytrax In November 2011, Lion Air ordered 230 Boeing 737s worth

USD 21.7 billion (IDR 286.5 trillion), the largest order ever

received by Boeing. Barely one and a half year later, the

same airline placed an order for 234 Airbus A320s worth

USD 24 billion. The order was also Airbus biggest ever, and so significant to the struggling European economy that its

signing was held in the Elyse Palace in Paris, in the presence of French President Franois Hollande. Thanks to the two massive orders, Lion Air is now on track to become

Asias biggest airline.


(Continue) One of the most problematic issue for Indonesian aviation is

safety. According to IATA, at least one airplane is lost every

year since 2010, and in the latest International Civil Aviation

Organizations )ICAO( Universal Safety Oversight Audit Program, the country is still far below the global average.

Moreover, in the International Aviation Safety Assessment

program, Indonesia was downgraded to category 2 by the

U.S. Federation Aviation Administration, and the European

Union still bans all but five of Indonesian airlines from flying

into its territory. Of the 62 airlines operating scheduled or

chartered flights in Indonesia, only Garuda Indonesia is

registered in the IATA Operational Safety Audit. Furthermore, the latest major disaster involving AirAsia flight

QZ8501, is still fresh in Indonesians memories. All 155 passengers and 7 crews are either dead or lost. More

recently on June 2nd, Garuda Indonesia flight GA618 skidded

during a rough landing amid a heavy downpour in Makassar.

Fortunately, there are no casualties. Maximizing Potential Considering the potential for air traffic boom in the future, it is

essential to develop new airports, refurbish existing ones,

and build other necessary ground infrastructures.

Introduction of the modern Kuala Namu airport in Medan is

an excellent first step, and the government plans to add 62

more airports in the next five years, plus new terminals for.


(Continue) the flagship Soekarno-Hatta International Airport (SHIA) in

Jakarta. Unfortunately, SHIA would still be running below its

optimum capacity even after the new terminals are realized.

Plenty of land are still available around the current buildings,

those too must be developed sooner than later. Meanwhile, Angkasa Pura II, the company which manages

SHIA and other airports, recently revealed that Boeing 777s

are not allowed to take off with full capacity from SHIA due to

weight restrictions. This also means that existing runways in

SHIA will never be able to accommodate fully loaded Airbus

A380s, the biggest airplane in operation. A full-capacity

Boeing 777s weigh around 350 tons, while an A380 can

reach up to 560 tons, a significant difference. This lack of

quality infrastructure must be resolved soon, as the current

condition forces heavier planes to make a transit in

Singapore, increasing costs and reducing efficiency. The government has also launches several policies that are

meant to improve safety and efficiency in the aviation

industry. The first is forbidding carriers to sell their tickets

below 40% of the upper bound price set by the government

to prevent unhealthy competition. To help reduce people

congestion in airports, carriers are no longer allowed to sell

tickets within the airport area. Lastly, airport taxes are now

included directly in the ticket price to help streamline airport

protocols.


(Continue) Fortunately, the slump in oil price has acted as a catalyst for

the growth of Indonesian airlines. In the first quarter of 2015,

Garuda Indonesia managed to book a profit of USD 11.39

million, compared to a massive loss of USD 168 million in the

first quarter of 2014. This positive trend is largely thanks to

cheap oil, which allows Garuda to churn some profit even

though its market share fell by 9% on a year-on-year basis. In short, Indonesias aviation market holds huge potential. The government should work with airlines and international

regulatory bodies in order to prepare Indonesia for the

unavoidable surge in air traffic. New airplanes are coming in

great numbers and the passengers will be there to fill them,

but it remains to be seen whether new airports can be build

fast enough to accommodate both the planes and the

people. Airlines must cut costs and spend less as the oil

price will not stay down forever. When it climbs up again,

Indonesian carriers must be ready

http://www.jamaicaobserver.com/

'Flying has never been safer,' says air industry

chief FLORIDA, United States (AFP) Traveling by plane is safer than ever despite a series of headline-grabbing airline

disasters in recent months, the head of a major global

aviation group said Monday. "With one jet hull loss for every 4.4 million flights last year,

flying has never been safer," said Tony Tyler, International Air

Transport Association (IATA) director general, told the

group's 71st annual meeting. "In contrast, paradoxically so, aviation safety has been a

constant in recent headlines," added Tyler, describing the

disappearance of Malaysia Airlines flight 370 in March 2014,

the shooting down of Malaysia Airlines flight 17 over war-torn

Ukraine in July last year and the deliberate crash by a co-

pilot of a Germanwings flight into the French Alps in March

as "extraordinary events." "Every loss is a tragedy," Tyler told the opening session of

the meeting, which drew more than 1,000 industry leaders

from around the world to south Florida. "The greatest tribute we can pay to them is to make flying

ever safer. That is precisely what we are doing." He said improved tracking standards are being developed to

report on an airline's whereabout every 15 minutes. "In the near future, emerging technology and proposed new

practices will move us closer to ensuring that never again will

an aircraft simply disappear."

http://www.jamaicaobserver.com/

(Continue) He described the loss of flight MH17 -- which killed 298

people when it was shot down over Ukraine last year -- as

"an outrage," adding that civilian aircraft "must never be

targets for weapons of war." He said the global governments are working to better share

security information through the International Civil Aviation

Organization, and called for a global convention to "control

the design, manufacture, sale and deployment of weapons

with anti-aircraft capability." Kiev and Western governments say the plane was shot down

by separatists using a surface-to-air missile supplied by

Moscow. Russia has denied involvement and placed the

blame on Kiev. The loss of Germanwings flight 9525, which crashed into the

French Alps, killing all 150 people on board in an apparently

suicidal act by a mentally ill copilot, was a "deliberate and

horrible act by one of our own," Tyler said. "There is no immunity to mental health issues," he said,

adding that the investigation should help "airlines and

regulators look again at the balance needed to monitor

mental health." Tyler said that the global airline industry as a whole is poised

to earn $29.3 billion in profits in 2015, as more airlines fly

with their planes filled to capacity and the cost of fuel drops

http://business.financialpost.com

global profit 2015 Airline profit boom: IATA hikes billion 29forecast to US$

MIAMI/PARIS Global airlines raised their forecast for 2015 industry profits by more than 17 per cent to US$29.3 billion

on Monday, almost doubling from last year and heralding a

boom for carriers in North America that stand to reap half the

worldwide total. The International Air Transport Association (IATA),

announcing the upgrade during a gathering of 260 member

airlines, said lower oil prices were the main factor pushing

the industry further into the black. But the windfall could be

muted by the rise in the value of the dollar and widespread

airline fuel hedging. The industrys profits are far from uniform. Many airlines still face huge challenges, IATA Director General Tony Tyler said in a declaration to the airline lobbys annual meeting. IATA had previously forecast a US$25 billion 2015 profit. It said the industrys average net profit margin would almost double to 4 per cent from last years 2.2 per cent. It saw the fuel bill dwindling to US$191 billion from US$226 billion in

2014, when airlines made a restated profit of US$16.4 billion. At the same time, planes are expected to fly fuller than ever

before as the industry continues to match capacity more

closely to demand, though some airline bosses meeting in

Miami are worried such discipline could start to fray.

http://economictimes.indiatimes.com

http://economictimes.indiatimes.com MIAMI: Oneworld, the world's third-largest airline alliance

after Star Alliance and SkyTeam, is not disinclined to

inducting a low-cost carrier into its alliance from India, its

CEO Bruce Ashby told ET. "A low-cost carrier will be required to do a certain changes in

its system like the Frequent Flier programme and a few

technical upgrades to be eligible to join our alliance. If any

airline is willing to invest in that, we would surely look at

inducting them," Ashby told ET on the sid "A low-cost carrier

will be required to do a certain changes in its system like the

Frequent Flier programme and a few technical upgrades to

be eligible to join our alliance. If any airline is willing to invest

in that, we would surely look at inducting them," Ashby told

ET on the sidelines of the Annual General Meeting of

International Air Transport Association. He added that the alliance had a former LCC as its member.

"Air Berlin turned into a hybrid carrier from being a low-cost

Ashby, however, said that the alliance is not talking to

anyone in the country, but didn't rule out such a possibility in

the future. Oneworld was founded on February 1, 1999, and constitutes

15 members. The alliance had, in the past, tried to induct

Kingfisher AirlinesBSE -4.83 % as its member from India, but

the plan did not materialise after Kingfisher stopped flying.

http://www.travelagentcentral.com

Lufthansa GDS Fee Latest in Battle for Direct

Bookings

16 's controversial decision to charge a fee of Lufthansa

is the latest in a push by GDSeuros for tickets booked using a

many airlines to encourage bookings through direct channels,

such as airline websites and call centers. Last August, American Airlines briefly removed its flights

.BBCduring a fee dispute, reports the Orbitzfrom pulled Delta, New York TimesAccording to an analysis in the

its flight information from TripAdvisor last year and from

some European online travel agencies this year. Encouraging

fliers to book direct allows airlines to avoid fees associated

with third-party bookings, as well as offer lucrative add-ons. "Where a significant portion of Delta's profits come from is

ancillaries after you buy the basic transportation," Max

Rayner, a partner at travel industry consulting company

Hudson Crossing, told the Times. "That's one big reason for

Delta to be hellbent on denying access." The drawback? Critics say that making it more difficult to shop

for airfares on third-party sites will make it more difficult to

compare airfares, leading to higher prices for consumers. "Heightened attempts to lead travelers away from online travel

agencies and metasearch travel sites is likely to lead to higher

average airfares, increase consumers' search costs, make

entry into city-pair routes by smaller airlines more difficult,

reduce transparency, and strengthen the market power of the

major airlines," said a Travel Technology Association report

cited by the BBC.

http://www.travelagentcentral.com

(Continue) Agents Respond

Lufthansa has drawn criticism from a broad The new fee from

Travel Leaders , including array of travel agency groups

Group, the American Society of Travel Agents and

Ensemble Travel Group. on our Agents have also been chiming in on our website and

.Facebook page "That's ridiculous," says Margie McKay. "Penalize your

customer for using a professional travel agent?" Mandy Mathis says, "I won't sell them anymore. By

Lufthansa, Swissair, Austrian and Brussels air. Would rather

sell another airline now." The EUR 16 DCC was announced June 2 in a move

Lufthansa Group (LHG) said was part of a broder shift in

commercial strategy to earn a greater portion of revenue from

flight operations, as opposed to ticket sales. LHG said that

costs for using GDS are several times higher than for other

booking methods, and that LHG was in the process of

developing a new booking method to enable sales partners to

connect to their IT systems directly based on the new IATA

data standard NDC (New Distribution Capability). The first

NDC pilot project is currently being tested at SWISS and

should begin at Lufthansa during the course of this year,

Lufthansa said. .

http://www.reuters.com/

Qatar Airways CEO sees no need for concessions

to U.S. airlines Qatar Airways Chief Executive Akbar Al Baker said on

Monday he saw no reason for Middle Eastern governments to

propose any changes to transportation policy in response to

U.S. airlines that allege unfair competition from Gulf carriers. "Why should my government make any concession?" he said

in an interview at the International Air Transport Association

(IATA) annual meeting in Miami. "There is an agreement

signed by two mature governments. And those agreements

are being implemented." U.S. airlines are trying to persuade the United States to alter

"Open Skies" agreements with the United Arab Emirates and

Qatar, accusing them of giving their airlines more than $40

billion in subsidies and distorting competition. Emirates

[EMIRA.UL], Etihad Airways and Qatar Airways deny the

subsidy claims. Al Baker said Qatar Airways expects to deliver its rebuttal to

the U.S. airlines' claims in the next few weeks. The three Gulf

carriers are not coordinating their replies, he added, and he

does not see any scope for negotiation. "There is no olive branch on this issue," he said. Under the

agreements, "we can deploy as much capacity as we want in

the United States and the United States carriers can deploy

as much capacity as they want in my country. "It's a two-way street," he said." What is the problem?" .

http://www.reuters.com/

(Continue) The dispute has divided an often-cohesive if competitive

industry, and Al Baker spotlighted it in front of hundreds of

IATA delegates on Monday. There were also concerns about

protectionism. "The danger is if you gave it for aviation, what industry would

ask for it next?" Aengus Kelly, the CEO of aircraft leasing

company AerCap, said in an interview. Al Baker said in the interview that he was "absolutely

confident" the United States would act "in the best interests of

the people" who want Gulf carriers to serve them. Separately, Al Baker dismissed reports that Qatar Airways

was considering an initial public offering in the near future. He

said the airline was at least 10 years away from such a move,

having shelved the idea in 2008 because of the financial

crisis. He declined to discuss the FIFA scandal or the potential

impact if Qatar is stripped of its right to host the World Cup in

2022. But he said it would not affect the airline's growth plans.

He expects to have built up enough airline capacity by 2022 to

handle the World Cup without ordering more airplanes. .

http://aviationweek.com

South African Airways Upbeat On Turnaround South African Airways )SAA( has looked at a reset-the-clock scenario, but at this point in time there is no such action or need to take such action to bring the embattled airline to commercial sustainability, acting CEO Nico Bezuidenhout

said. But, Bezuidenhout warned, If we do not get the necessary agreements with all stakeholders, nothing is excluded. SAAwhich was in a semi-permanent state of restructuring over the past decades as a loss-making airline despite South

Africa being the largest and most-developed aviation market

in Africa received an additional loan guarantee of 6.5 billion rand ($521 million) from the South African government in

January to keep it in the air. Bezuidenhout says the airline is making good progress in its

targeted turnaround and is reducing costs. Were not yet out of the woods, but we are seeing some positive signs in

stabilizing the business, he says. SAA successfully completed its 90-Day Action Plan in March, and

operating results in April were 45% better than the year-ago

period, Bezuidenhout says. The 90-Day Action Plan aims to

deliver an EBITDA improvement of 1.25 billion rand per year

from the start of its current financial year. As part of the cost-cutting exercise, SAA is renegotiatingthe

. There have been some s340A Airbusits leases ofunfortunate fleet decisions in the past. But dont forget when we acquired the A340, fuel was at $20 a barrel, asserts.


(Continue) Bezuidenhout, adding that the airline operates the four-

engined widebodies profitably on a number of routes, such as

Frankfurt and Munich. Leases have been renegotiated for

three of SAAs eight Airbus A340s with a savings result of 112 rand million annually. Renegotiations for the other five A340s are ongoing and

expected to yield an additional savings of 150 million rand. Up

to 440 million rand in pre-tax earnings improvements will

come from network changes. SAA has already abandoned two of its most money-losing

long-haul routes, from Johannesburg to Beijing and

Johannesburg to Mumbai. The Beijing route reportedly lost about million rand per month,

and the international network accounted for 1.6 billion rand in

losses. The acting CEO says SAAs services to Perth, Australia, and Munich and Frankfurt in Germany are profitable. The South

American routes are marginal but improving, while Hong Kong is already benefiting from ending the route to Beijing.

The North American operation is expected to improve thanks

to planned changes. .


(Continue)

Washington DullesBeginning in August, the daily service to

will operate three times via Senegal and four times via Accra

after SAA gained fifth-freedom rights from Ghana to the U.S..

The point-to-point market from Ghana is much larger than

from Senegal and we will benefit from feeder and de-feeder traffic. There [is] no feeder airline available to cooperate with

in Senegal, Bezuidenhout notes. The network reconfigurations do not only include route

terminations. There is also positive news, Bezuidenhout

points out. We started a new route to Abu Dhabi to .Etihad Airwayscomplement our relationship with

SAA is also growing its sub-Saharan African network due to strong commercial demand with more flights between Johannesburg and Maputo, Harare and Mauritius. Africa is our bread and butter, he says. We target to increase revenue from Africa [by] 30% in the next 12-18 months. .

http://gulfnews.com

Lufthansa looks elsewhere as Gulf carriers

dominate Mena Miami: Lufthansa, Europe's largest airline, does not see the

potential to add new services to the Middle East and North

Africa, believing that the market is firmly dominated by the

major regional competitors. "There is no major expansion plans to that part of the world

because there are some other players in that part of the world

who have major expansion plans," Carsten Spohr, Deutsche

Lufthansa chief executive and chairman, told reporters in

Miami on Sunday. Lufthansa and it's other group airlines which includes Swiss

and Austrian fly to around 20 destinations in the region from

Iran to Morocco, according to its website. However, the Gulf's largest airlines - Emirates, Etihad Airways

and Qatar Airways - have similar networks, often flying

multiple daily frequencies, in and out of their hubs connecting

onto long-haul routes to Europe and North and South America

that Lufthansa also serve. "My expansion plans are to go to other destinations where we

have a chance to operate profitably," Spohr said at a press

conference ahead of the International Air Transport

Association (IATA) Annual General Meeting starting on

Monday.

http://gulfnews.com

(Continue) Lufthansa, which operates hubs out of Frankfurt and Munich,

has long warned about the growth of the major Gulf airlines

that transport East-West passenger traffic through their Middle

Eastern hubs. Spohr said the allegations by the US' biggest

carriers has made Lufthansa's argument "more credible." US carriers Delta, United and American allege the Gulf

carriers have received billions of dollars in government

subsidies and want their government to freeze additional

routes to Gulf airlines until their claims are investigated. However, Spohr said that in Europe existing bilateral

agreements should remain unchanged until the European

Union decides what, if any, action to take. Last month, the

Dutch government froze landing rights to Gulf carriers.

9 june 2015 .pdf

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