Airports worldwide adapting to the demands of the LCCs - new study released

The air transport business has undergone a massive transformation, accelerated by the economic malaise of the past 18 months since the first edition of the 'Low Cost Airports & Terminals' (LCAT) report was published by the Centre for Asia Pacific Aviation in February 2008. The airports and terminals referred to in the original edition were conceived and instigated largely during a period of comparative economic boom. That boom was replaced by bust, but the Low Cost Carriers (LCCs) have, so far, survived better than the legacy carriers, and have even profited from their demise in many cases.

The Centre has now published the second edition of this unique management report. The report notes it may be that the LCCs have all but exhausted viable routes to fly in some regions, but the enormous delivery schedule of new equipment from Seattle and Toulouse to the LCCs both now and during the next few years suggests that an ever more desperate search for new routes on which to fly these aircraft will continue and grow, creating a major opportunity for some airports.

Airports must understand LCCs!

Airports must therefore continue to adapt to the demands of the LCCs, allowing for their increasing propensity to change shape.

The second edition of the Low Cost Airports and Terminals (LCAT) report notes, "apart from the well-documented cases of hybrid airlines that attempt to satisfy all passenger types, we are seeing a clear shift towards the business traveller in some LCCs – including GDS participation, business lounges and fast-track check-in and security clearance, while others experiment with shared website booking facilities, and codesharing between themselves, long haul LCCs and even legacy airlines. We have not seen many major mergers or takeovers in this segment in recent years, but that is not to say they will not occur".

The long haul LCC experiment having previously failed, AirAsia X looks as if it will succeed, and has already established new operating patterns, such as 30% of its passengers transferring to other, short haul LCCs at London’s Stansted Airport.

"This introduces a new conundrum for airports – how to cater for the long haul/short haul low cost non-interline transfer", states the LCAT report.

No longer is the interface between legacy airline and LCC regarded as ‘contamination.’ It is clear that the two must co-exist and the low cost terminal epitomised for example by early versions at Singapore and Kuala Lumpur (March 2006) may already be out of date. Indeed, the decision by Malaysia Airports to make the new low cost terminal at Kuala Lumpur part of a ‘next generation hub’ concept demonstrates the contemporary thinking. It will facilitate ‘seamless interchange’ between all sorts of airlines - full service, low cost and regional.

Some airlines are not party to such agreements and will continue to hammer home their own message for as long as it takes. Ryanair for example remains fixated on cost and regularly takes the decision to quit operations completely at airports that will not comply with the charging structure it expects. But recently one British airport took a very public stance and refused outright to lower its charges, losing almost all Ryanair service as a result, but arguing that there were already too many unsustainable routes.

At the same time, another British airport is standing firm against the demands of easyJet to lower its charges. Could it be that the slimmed down, leaner airport sector is now in a position to drive its own bargains with the LCCs? And what implications would that have for the level of facilities it offers the airlines?

Source: Centre for Asia Pacific Aviation

Alitalia and Aeroflot sign a MoU

Alitalia and Aeroflot have signed a Memorandum of Understanding between the two Companies, within the framework of the official Russian – Italian intergovernmental summit talks, held under the leadership of the Russian President Dmitry Medvedev and the Italian Chairman of the Council of Ministers, Silvio Berlusconi. The document ascertains the intention of both Airlines to develop their existing bilateral partnership and cooperative relationship.

The goal of the cooperation is to further develop new routes and frequencies between Italy and Russia as well as implement a wide ranging reciprocal code-share to domestic and beyond destinations (Alitalia services to Africa, Middle East and Latin America will ideally show the Aeroflot code; Aeroflot services to Asia will reciprocally bear the Alitalia code). Such ambitious development will allow Alitalia and Aeroflot to improve their joint presence on key aviation markets.

Alitalia and Aeroflot intend to cooperate more closely in network planning between Russia and Italy, in reservation procedures in order to increase connectivity between their respective networks, in joint sales and marketing promotions to increase the flows of business and tourist passengers between the two countries.

Both Airlines intend to also extend mutual access to their loyalty programs and to harmonise their passenger service standards, irrespective of the actual operating carrier on the route, to the benefit of the common customers.

Alitalia and Aeroflot are going to partner in information technology, charter and cargo traffic as well as in the other spheres of the airlines’ activity.

In order to manage effectively their strengthened cooperation, Alitalia and Aeroflot will establish a governance mechanism: it will ensure the timely and balanced delivery of positive results, to the airlines and their customers.

Alitalia and Aeroflot have a long standing cooperation based on bilateral agreements such as code sharing, interline, interline e-ticketing, and are both key members of the SkyTeam alliance.

At present Alitalia and Aeroflot code share jointly operated daily flights between Moscow and Rome, Milan, Venice and Torino.

The signature of this Memorandum inaugurates a new stage in the development of the commercial cooperation between two Aairlines and adds a valuable contribution to the progress of the Italian-Russian relationship.

 

Source: Air Transport News

American Offers $1.8B to Japan Airlines

In hopes of keeping Japan Airlines from Delta Air Lines, American Airlines, its oneworld partners and private equity firm TPG have offered to invest $1.8 billion in the Japanese carrier to keep its partnership. JAL has been struggling for years, losing billions and dealing with safety problems. However, the routes and Asian presence still make it an attractive acquisition for airlines, especially Delta which inherited Northwest Airlines’ Tokyo hub. American also sweetened the deal by adding the possibility of antitrust immunity, something Delta is also hinting they can provide.

Haruka Nishimatsu, JAL President, said he would make a decision on the offers by the end of the year.

While some may question the wisdom behind shelling out a billion dollars for a carrier that’s asking for a government bailout to avoid bankruptcy, I think both airlines have a lot to gain from the deal, which is why both are offering prices in the $1.5 to $1.8 billion range.

According to a recent BNET report, while Asian routes are suffering along with everyone else, they appear to be recovering quicker than European and North American markets. So right now the recession is killing business travel and tourism, but once the economy improves the profits for routes to Japan and Asia could rise faster and higher.

 

Source: BNET

Airline Year Over Year Unit Revenue Changes Aren't As Good as They Seem

According to BNET's Brett Snyder," airlines are reporting merely single digit unit revenue decreases year-over-year for November flying for the first time in a long time. It’s not an increase, but it’s a big improvement from the double digits of months past . . . or is it? The numbers are lying in this case, or rather hiding the truth.

Continental (CAL) says its November unit revenue decreased between 7 and 9 percent. US Airways (LCC) was much better, reporting its passenger unit revenue was down 2 percent year-over-year. That’s great, but we need to consider what was happening the year before as well.

Last November, US Airways reported a decrease of 3 to 5 percent. In October, passenger unit revenue increased 4 to 6 percent.

For Continental, the spread was similar. November’s unit revenue increased 1.2 percent. Meanwhile, the month before, October unit revenue was up 9.5 percent.

As you can see, we’re looking at much more favorable comparisons in November since unit revenues had fallen off a cliff, so this lower decrease shouldn’t be much of a surprise. There’s still a lot of progress yet to be made before we see real recovery".

 

Source: BNET.com , The CrankyFlier

SITA signs $26.7m deal to bring passenger self-service to Kenyan airports

SITA, today announced a ten year, $26.7 million agreement with the Kenya Airports Authority (KAA) for a complete upgrade of passenger processing at the country's two international gateways, Jomo Kenyatta International Airport (JKIA), Nairobi and Moi International Airport (MIA), Mombasa. This includes the installation of the country's first ever self-service check-in kiosks.

The installation of the new generation S3 Kiosks by June 2010 will bring passenger self-service to Kenya for the first time and the upgrade of passenger processing to the SITA AirportConnect Open platform will benefit 37 airlines as it allows them to share check-in and boarding facilities.

The AirportConnect S3 Kiosks are environmentally-friendly, boasting the smallest carbon footprint in the industry. Each kiosk weighs just 64 kg, can scan travel documents, and includes a printer that can issue up to 5,300 boarding passes from a single roll. S3 Kiosks take up half the space of previous generation kiosks. Nairobi will receive 32 S3 Kiosks while Mombasa will have 16.

George Muhoho, Managing Director, Kenya Airports Authority, said: "Working with SITA we are introducing world-leading technology that will provide the best service for both the airlines and passengers using these airports. This technology will also be available at the new Terminal Four in Nairobi when it opens.

"The move to self-service and the adoption of SITA's common-use technologies allows us to maximise the capacity at the airports and manage peak travel hours smoothly. The S3 Kiosks will bring a new look and feel to our airports and make them more passenger-friendly. "

Sam Munda, Sales Director, Sub-Sahara Africa, SITA, said: "There is now huge global demand for passenger self-service check-in. The majority of passengers clearly prefer self-service options when they are available, which reduces pressure on airport operators during peak periods.

"Some three million passengers will be able to have a quicker and smoother start to their journeys in Nairobi and Mombasa because so many airlines will be able to offer cost-efficient self-service check-in from these destinations."

The Kenya Airports Authority can also be confident that the technology implemented is future-proofed. The systems fully support the use of Bar Coded Boarding Passes which will be 100% adopted by the industry in 2010.

In addition, SITA's AirportConnect Open remains the only fully-integrated common use platform supporting CUPPS (Common Use Passenger Processing Systems), the new global IT standard for passenger check-in and boarding, the existing CUTE (Common Use Terminal Equipment) standard, as well as web and CUSS (Common Use Self Service) kiosk applications.

Source: Air Transport News

Continental Airlines Launches Mobile Boarding Passes at Frankfurt Airport

Continental Airlines (NYSE: CAL) today expanded its mobile boarding pass service to Frankfurt Airport, becoming the first U.S. carrier to offer paperless boarding passes outside of the United States.

The service allows customers to receive boarding passes electronically on their cell phones or PDAs and eliminate the need for paper boarding passes.

"Continental is continuing to lead our U.S. competitors by being the first to offer mobile boarding passes at an airport outside of the United States," said Mark Bergsrud, senior vice president of marketing programs and distribution for Continental. "Our customers have told us this is the type of self-service technology they want, and we are pleased to make it available at Frankfurt."

Mobile boarding passes display a two-dimensional bar code along with passenger and flight information, and scanners at the security check point validate the authenticity. The technology prevents manipulation or duplication of the boarding passes and heightens security.

Continental was the first carrier to offer paperless boarding passes in the U.S. in a pilot program with the Transportation Security Administration that began in December 2007. The airline currently offers mobile boarding passes at 35 airports, including its hubs in New York, Houston and Cleveland, with plans to expand to more U.S. and international destinations.

 

Source: Air Transport News

International Civil Aviation Day 2009 highlights ICAO's historic contribution to the global community

“65 years of empowering the global community through aviation” is the theme of the 2009 edition of International Civil Aviation Day, celebrated annually on 7 December to mark the creation of the International Civil Aviation Organization (ICAO) on that day in 1944.

From the outset, the vision has been for international aviation to promote friendship and understanding among peoples of the world, as well as peace and prosperity based on a global air transport system that would be operated soundly and economically, with equality of opportunity for all.

The vision gradually became reality through ICAO securing global cooperation and consensus among its 190 Member States to build and maintain a robust regulatory framework, thereby bringing the enormous economic, social and cultural benefits of air transport to entire populations all over the world.

In keeping with the rapid evolution of air transport through the years, Member States agreed on some 10,000 technical and operational standards, on hundreds of agreements dealing with often complex political and economic issues, and on assistance programmes to help apply the rules and regulations – concrete actions and tangible global results under the auspices of ICAO.

At the same time, States ensured that aviation would develop in an environmentally sustainable manner, by agreeing on stringent engine emissions standards, effective operational measures and comprehensive environmental policies through the ICAO process.

Today, the millions of passenger and cargo flights that criss-cross our skies have become the lifeline of economies on all continents. They provide businesses with access to the global marketplace, especially vital for land-locked or small-island States, and they are an integral component of the world’s largest industry, travel and tourism.

Aviation supports tens of millions of direct and indirect jobs in airlines, airports, air navigation services, aerospace companies, and produces a substantial spin-off effect on companies in the air transport supply chain and a host of related industries.

Another valuable contribution of aviation is the host of social benefits it generates, from the enjoyment of leisure and cultural experiences, to the rapid and effective delivery of emergency and humanitarian air relief in many regions of the planet.

The economic and social dimensions of aviation can also contribute to the realization of many of the United Nations Millennium Goals – promoting business development to eradicate extreme poverty and hunger, which in turn can sustain other aspects of societal progress. By its very nature, air travel can foster a global partnership among like-minded people dedicated to a common cause.

 

Source: Air Transport News

Jomo Kenyatta Airport is expanding

The China National Aero-Technology International Engineering Company has been awarded a contract to begin the second phase of expansion at Jomo Kenyatta International Airport in Kenya.

The $53m (Sh4bn) contract awarded in September 2009, is part of a larger $73m airport expansion and modernisation plan.

The second phase will include the new Terminal 4 and a multistorey car park to accommodate 1,500 cars which will begin construction in Jamuary and is expected to be completed in 21 months.

Plans for the third phase of the programme will be available by mid-2010.

Source: Airport Technology

Ethipian named carrier of the year by AFRAA

Ethiopian has earned another industry honor, "Airline of the Year Award" at the 41st Annual General Assembly of the African Airlines Association (AFRAA) held in Maputo, Mozambique on November 24, 2009. According to AFRAA, the award was presented to Ethiopian Airlines "In recognition of its outstanding, efficient and exemplary provision of Airline services to the African airline industry."

Mr. Paulo Zucula, Transport Minister of Mozambique handed out the award to Ato Girma Wake, CEO of Ethiopian Airlines at the Gala Dinner held on November 24, 2009 in Maputo, Mozambique. Commenting on the award, Ato Girma said, "We are indeed honored to receive this award which, once again, reaffirms our commitment to meet the needs of African aviation" and further added, "The recognition, coming at such a challenging time for the airline industry, is an acknowledgement of our continued hard work and dedication to provide outstanding service to our customers."

Ethiopian has frequently been chosen as the best Airline in Africa for its performance and outstanding contribution to the development of African aviation. In addition to the AFRAA award, Ethiopian has received four significant awards in a row since January, 2009.

 

Source: Air Transport News

Kenya Airways will soon be 100% BCBP

Kenyan runners are famous for their middle and long-distance running. While they may spend much of the race in the middle of the pack, their endurance is renowned the world over. Kenya Airways (KQ) displayed that endurance this month, raising BCBP (bar coded boarding pass) capability by a remarkable 40%. More than 80% of the airline’s boarding passes now carry the IATA standard 2D barcode. That enables the airline to cut costs as well as offer improved service to passengers, like web check-in and home-printed boarding passes. “Congratulations to KQ on this phenomenal achievement,” said Eric Léopold, BCBP Project Manager. “Their rapid rise in BCBP capability has lifted the capability of Africa as a whole, and is an example for other African carriers to follow.”

Source: IATA