DOT Proposes Approval of oneworld Antitrust Immunity Application

The U.S. Department of Transportation today proposed to grant antitrust immunity to American Airlines and four international partners to form a global alliance. Under the proposal, the airlines must agree to conditions to protect consumers and preserve competition.

If the decision is made final, American and its “oneworld” alliance partners British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines would be able to more closely coordinate international operations in transatlantic markets.

In today’s show-cause order, the Department tentatively found that granting antitrust immunity to the oneworld alliance would provide travelers and shippers with a variety of benefits, including lower fares on more routes, increased services, better schedules and reduced travel and connection times. The Department also said the proposed alliance would enhance competition around the world by creating competition with the existing Star Alliance and the SkyTeam alliance, which already have been granted immunity.

However, the Department also noted that the alliance could harm competition on select routes between between the United States and London’s Heathrow Airport, oneworld’s primary hub, where the availability of landing and takeoff slots is limited. As a condition of approval, the Department is proposing in its show-cause order that the applicants make four pairs of slots available to competitors for new U.S.-Heathrow service. The Department also would require changes to the agreement to ensure capacity growth, and require the carriers to submit traffic data and implement the proposed alliance within 18 months of a final decision.

Interested parties are invited to show cause why the proposed decision should not be made final. Objections are due in 45 days, and answers to objections 15 days afterward. Following the comment period, the Department will review all filings and then issue a final decision.

 

Source: Air Transport News

Boeing 747-8F First Flight

The Boeing 747-8 Freighter successfully took to the sky for the first time on Monday 8 February 2010.

With 747 Chief Pilot Mark Feuerstein and Capt. Tom Imrich in the flight deck, the newest member of the 747 family took off at 12:39 p.m. local time from Paine Field in Everett and landed at Paine Field at 4:18 p.m.

"It was a real privilege to be at the controls of this great airplane on its first flight, representing the thousands of folks who made today possible," said Feuerstein. "The airplane performed as expected and handled just like a 747-400."

This flight was the first of more than 1,600 flight hours in the test program for the newest member of the Boeing freighter family. The airplane followed a route over Western Washington, where it underwent tests for basic handling qualities and engine performance. The airplane reached a cruising altitude of 17,000 feet (5,181 m) and a speed of up to 230 knots, or about 264 miles (426 km) per hour.

Powered by four General Electric GEnx-2B engines, the 747-8 Freighter will transition its testing program to Moses Lake, Wash., and Palmdale, Calif., where the other two test airplanes will join it in the coming month.

The 747-8 Freighter is the new, high-capacity 747 that will give cargo operators the lowest operating costs and best economics of any freighter. The airplane is 250 feet, 2 inches (76.3 m) long, which is 18 feet, 4 inches (5.6 m) longer than the 747-400 Freighter. The stretch provides customers with 16 percent more revenue cargo volume compared with its predecessor. That translates to an additional four main-deck pallets and three lower-hold pallets.

Boeing launched the airplane on Nov. 14, 2005, with firm orders for 18 747-8 Freighters: 10 from Cargolux of Luxembourg and eight from Nippon Cargo Airlines of Japan. All told, Boeing has secured 108 orders for the 747-8, of which 76 are orders for the new freighter. Cargolux, Nippon Cargo Airlines, AirBridgeCargo Airlines, Atlas Air, Cathay Pacific, Dubai Aerospace Enterprise, Emirates SkyCargo, Guggenheim and Korean Air all have ordered the 747-8 Freighter.

 

Source: Air Transport News

American Airlines and Japan Airlines Apply to the U.S. Department of Transportation for Antitrust Immunity

American Airlines and Japan Airlines (JAL) today filed an application with the U.S. Department of Transportation (DOT) for antitrust immunity to forge a closer relationship and implement a Joint Business Agreement (JBA) governing the operation of their flights between North America and Asia. The airlines also will notify the Ministry of Land, Infrastructure, Transport and Tourism in Japan of the transaction.

"An immunized JBA will benefit the public, offer new competition in the fast-growing Asian aviation marketplace and strengthen the relationship between American and Japan Airlines, which will support JAL's successful restructuring," said Gerard Arpey, American's Chairman and CEO. "It will improve customer choice by giving the oneworld(R) Alliance, of which American and JAL are key members, strong hub operations at Tokyo, thus allowing more vibrant competition with other global alliances in northeast Asia and beyond."

"With immunity to enter a JBA, Japan Airlines and American Airlines will be able to cooperate more tightly in raising the quality of our services and thus encourage healthy competition in this promising region for the industry," said JAL Group Chief Operating Officer and President Masaru Onishi. "Furthermore, not only will both carriers be able to improve operational efficiency but most importantly, our valued customers will receive greater benefits and convenience which we hope will place us in a position to always be the airlines of their choice."

Antitrust immunity between American and JAL is made possible by the Open Skies accord reached by the United States and Japan in December 2009. When that agreement becomes effective, it will eliminate the restraints on competition.

More Consumer Benefits, Choices and Travel Options

Under an immunized JBA, American and JAL will cooperate commercially on flights while continuing to operate as separate legal entities. They will coordinate fares, services and schedules in order to attract new customers and boost revenues. By more closely integrating their networks, the airlines will be able to improve efficiency, find opportunities to lower costs and have greater ability to invest in products, services and fleets.

By working together to provide links for connecting passengers, the airlines can expand customer choice by offering new routes and supporting existing routes that would not be economically viable for the airlines individually. American and JAL expect more opportunities to expand their codeshare arrangements on flights within and beyond Japan and the U.S. and to create new competition in the trans-Pacific marketplace. Consumers also will continue to receive reciprocal frequent flyer benefits, and eligible customers will continue to have access to the airport lounges of both airlines.

Employees and other stakeholders are expected to benefit from the airlines' improved competitive position and financial stability.

The JBA will be "metal neutral," meaning American and JAL will benefit from a customer's ticket purchase regardless of which one carries the passenger, as the airlines will share revenue on all JBA flights. The revenue growth resulting from the JBA will provide both airlines with substantial support towards improving profitability.

Enhanced Trans-Pacific Competition

The closer cooperation between oneworld Alliance members American and JAL will improve network competition with the other alliances. Through the JBA, the two airlines will offer a fully-integrated network between trans-Pacific gateway airports, ensuring all customers a third robust global airline alliance from which to choose, and more options for time-sensitive business travelers.

Source: Air Transport News

Definition:  Exemption from prosecution under antitrust laws. In the transportation industry, firms with antitrust immunity are permitted under certain conditions to set schedules and sometimes prices for the public benefit.

Body Scanners Introduced at UK's Manchester Airport

Passengers flying through Manchester Airport in the North West of England may be body scanned as part of the airport's routine security procedures.

Manchester has been trialling a Rapiscan Secure 1000 scanner in its Terminal 2 since October. It is one of two airports that have been directed by the UK Government to introduce the technology.

Additional scanners are planned in the airport's Terminals 1 and 3 by the end of the month.

The introduction of the scanners follows the incident on an airliner bound for Detroit on Christmas Day.

Since that time the UK Government has been working closely with airport authorities to introduce additional security measures including introducing body scanners at airports.

Under the new rules, any passenger refusing to be body scanned will not be allowed to travel.

Source: Airwise

Boeing Sees Commercial Plane Demand Improving

Boeing is seeing improved demand for commercial planes and fewer deferral requests as the airline industry claws its way out of an economic downturn, the company's chief executive said on Thursday.

Speaking at an aerospace and defence conference, Jim McNerney said the economy is showing signs of improvement that will lead to orders.

"We have a rebound in our plans over the next couple of years," McNerney said.

Goodrich and General Dynamics were other US aerospace companies that cited improving commercial aircraft market conditions at the conference.

Boeing and rival Airbus were dogged in 2009 by fewer orders for planes as carriers around the world grappled with falling travel demand in the sagging economy.

Boeing said in January that orders fell 61 percent to 263 commercial planes in 2009, as air travel and freight transport slumped.

McNerney said the company feels "very good" about current production rates for its popular 737 planes and even left open the possibility for a production rate increase.

Some experts have questioned whether the current rate of 31 per month is too high given the economic troubles faced by airlines around the world.

"You could say there's room for an upward move," McNerney said, quickly adding he is not necessarily predicting that. "If people order more planes, we will increase the rate."

McNerney repeated that Boeing also is considering putting a new engine in the 737, which would be faster and cheaper than building a new aircraft.

He said flight testing of its new carbon-composite 787 Dreamliner has revealed no significant problems and that Boeing still aims to deliver the plane to its first customer in the fourth quarter of 2010.

Some market experts have said the delivery schedule for the 787, which made its first test flight in December after two years of delays, is too ambitious.

Scott Kuechle, chief financial officer of Goodrich, which provides parts for planes, said order patterns for landing gear and interiors were stabilising. He said his company expected more robust growth in aftermarket services in 2011.

General Dynamics said its aerospace segment, which includes the Gulfstream business jet maker, was poised for low to mid-single-digit sales growth in 2010, followed by "double-digit growth" in 2011 as delivery of new jets begins.

Amid tough conditions in 2009, Gulfstream cut production and temporarily laid off part of its workforce.

"Barring any further deterioration in the global economy, I believe that 2010 is the start of an attractive growth trajectory in our aerospace business," General Dynamics chief executive Jay Johnson said on Wednesday.

Source: Airwise News

OAG Reports Positive Growth in Airline Capacity for February 2010

Global airline capacity for February 2010 shows positive growth compared to February 2009, reports OAG (www.oagaviation.com), the world’s leading aviation data business with its monthly report on trends in the supply of airline flights and seats. This marks the sixth consecutive month in which overall airline capacity has shown growth, with 272.7 million available seats this month, an increase of 5% over February 2009. Global frequencies are also showing growth, with an increase of 4%, with a total of 2.2 million flights scheduled for February 2010. Global frequency and capacity in the low-cost sector are up by 11% compared to a year ago, with 40,704 more flights and 6.1 million more seats.

The only regional decline to report for February 2010 is for traffic within North America where frequency and capacity have reduced by 1% (11,210) and 2% (1,512,278) respectively. However, frequency and capacity to and from the region have shown a positive growth of 3% and 2%. Overall, flights to and from Europe show positive growth compared to February 2009, with 6% more flights and 4% more seats. Figures for Asia show an increase both to and from the region and also within. For services to and from the region, there is an increase of 5% in flights and 4% in capacity, while intra-regionally, frequency and capacity is up by 11% and 10% respectively. Latin America, Central/South America, Africa and the Middle East also show increases in frequency and capacity.

“It is fascinating how much the movement in flight frequency and seat capacity seems to reflect the regional economic situation. Asia’s economy (except Japan) is gradually and carefully recovering and so are parts of Europe/the Middle East/Africa region, while North America and Japan appear to have difficulty and are struggling to come out of this recession,” said Mario M. Hardy, Vice President Asia Pacific, OAG Aviation.

Analysis of major routes reveals increases in many parts of the world, while decreases continue in the transatlantic market between North America and Western Europe. That route has 5% fewer seats (237,269) and 5% less flights (964) for the month. Carriers between Western Europe and Asia show a frequency decline of 2% and 4% reduction in capacity. Routes between Western Europe and Africa show a healthy 20% increase in frequency and 19% increase in capacity. Service between North America and Central/South America are up compared to a year ago, while routes between Western Europe and the Middle East have also grown compared to February 2009.

“This month, a number of new routes are being launched; the Asia Pacific region shows 174 new routes with a large number of them from Chinese carriers. In Europe, the Middle East and Africa, there are 210 new routes dominated by low-cost carriers, said OAG’s Hardy. “North America adds 108 routes with the majority being domestic flights and in Latin America, 17 routes were added mostly in the Caribbean. The increase in direct service is a global trend that has been driven by the increase in low-cost carrier services flying point-to-point, which benefits the consumers,” continued Hardy.

A hubs analysis shows impressive growth in South America Sao Paulo (GRU) and Bogota (BOG) with frequency increases of 24% and 17% respectively. The Middle East continues to perform well with Abu Dhabi (AUH) revealing a 24% growth in frequency for February 2010. Analysis of airports in North America shows that frequency at Atlanta Hartsfield remains unchanged at 70,651 compared to February 2009, while the major hub shows marginal growth of 1% in capacity, with 8,048,791 seats. European airports Paris Charles de Gaulle (CDG) and London Heathrow (LHR) both show declines in operations and capacity.

Source: ATN

Ryanair challenges Easyjet to "Chariots of Fire" Race

Ryanair’s CEO, Michael O’Leary, today (11th Feb) challenged easyJet boss Stelios to a “Chariots of Fire” race around Trafalgar Square to settle a dispute which has blown up over the last week with easyJet and Stelios’ expensive lawyers (Herbert Smith and Rachel Atkins) threatening Ryanair with legal action over Ryanair’s recent adverts (see attached) which confirm that:

1. easyJet is in fact a “high fares” airline, since their average fares (€66) are more than double those of Ryanair (€32) and,

2. easyJet is hiding its poor on-time statistics (which have not been published on its website for the last 40 weeks in a row) because (Ryanair believes) easyJet’s punctuality is so awful compared to that of Ryanair.

Michael O’Leary has promised to stop calling easyJet a “high fares” airline or an “always late” airline if Stelios wins the race, but if Stelios loses, then easyJet will admit that it is just another high fares airline (by comparison with Ryanair) and will agree to resume publishing its weekly punctuality statistics so that the travelling public can see just how poor easyJet’s punctuality is.

Laying down this challenge today, Ryanair’s Michael (Usain Bolt) O’Leary said:

“I am currently in rigorous training and believe that my daily regime of 40 cigarettes, 24 beers and extended sessions on the couch watching TV, leaves me in perfect shape to beat Stelios in a 21st Century version of the “Chariots of Fire” race around Trafalgar Square.

“We believe this race will be a much better use of Stelios’ time rather than paying expensive lawyers to issue vacuous threats, when both Stelios and easyJet know they can’t compete with Ryanair’s prices and they can’t match our punctuality either.

“If Stelios is too “tired” to run, then I will offer him the alternative of a wheelbarrow race around Trafalgar Square, with the winner taking all. Win or lose, at least Stelios and easyJet will save a fortune on expensive lawyers fees. No expensive lawyers can alter the facts, compared to Ryanair, easyJet is a high fares airline, and an always late airline.

 

Source: Air Transport News

Lufthansa and Brussels Airlines expand codeshare services to Africa

Wider choice of flights to African destinations for customers of both airlines

Lufthansa customers can now book codeshare flights with Brussels Airlines to four more destinations in Africa. For the first time, passengers can thus fly with the Belgian carrier from Berlin-Tegel, Hamburg, Hanover, Frankfurt, Munich, Nuremberg and Stuttgart through Brussels direct to the African capitals Conakry (Guinea), Freetown (Sierra Leone) and Kigali (Rwanda). Furthermore, Lufthansa can now offer its passengers two codeshare flights with Brussels Airlines to the Angolan capital Luanda in addition to its own twice-weekly service from Frankfurt. Frequencies to Angola are thus being doubled from two to four per week. Members of Lufthansa’s frequent flyer programme Miles & More can earn miles on all flights operated by Lufthansa and Brussels Airlines or redeem miles for award flights.

As part of the extended cooperation between the two carriers, Brussels Airlines, which belongs to the Lufthansa Group, will also issue its own tickets to passengers on Lufthansa flights from Frankfurt to Abuja, Lagos and Port Harcourt (Nigeria), Malabo (Equatorial Guinea) and also to Luanda.

Since July 2009, an increasing number of long-haul flights to Africa operated by Lufthansa and Brussels Airlines have also been offered under the partner airline’s flight number. The new codeshare services operated by Brussels Airlines give Lufthansa passengers a choice of three further destinations, which the German carrier does not serve itself. Lufthansa currently operates its own flights to 17 destinations in Africa. If one counts the services operated by the Lufthansa Group airlines Austrian, Brussels Airlines, SWISS and bmi, passengers now have a choice of 31 destinations in 27 countries in Africa. In addition, Lufthansa and Brussels Airlines offer all their flights on cross-border routes between Germany and Belgium as well as on selected European routes as codeshare services.

 

Source: Air Transport News

AirAsia and Jetstar ink wide-ranging cooperation agreement

Low-cost carriers Jetstar and AirAsia have formed a new alliance that will allow them to study the joint purchase of new aircraft, cooperate in ground and passenger handling services, and take on each other's passengers when there is a disruption.

The agreement will reduce costs and pool their expertise, and result in lower fares for customers throughout the Asia Pacific, say the carriers. This is the first time two major low-cost carriers are cooperating on such a large scale, they add.

Jetstar, a subsidiary of Australian flag carrier Qantas, and Malaysia-based AirAsia are the two largest low-cost carriers in the Asia Pacific. The deal will give them "a natural advantage in one of the world's most competitive aviation markets," say the carriers.

For future fleet specifications, the carriers will investigate opportunities for joint procurement of the next generation of narrow body aircraft. "A collective goal is to achieve cost reductions in terms of order volume and influencing design specification to deliver more efficient, low cost operations," they say.

They will also develop agreements to cooperate on the provision of passenger and ground handling in Australia and within Asia at overlapping airports, and will pool inventory for aircraft components and spare parts. They will jointly procure engineering and maintenance supplies and services, with Jetstar saying that it will maintain its existing use of and commitment to Australian facilities.

Finally, there will be reciprocal arrangements for passenger management. This will allow them to support passenger disruptions and recovery onto the other airline's service across both of their networks.

"The aviation market in Asia is a growth market and has proven resilient over the past 12 months despite the tough operating environment, with significant growth in passenger numbers forecast in the region. This partnership will ensure that both airlines can capitalise on these growth opportunities," says Qantas CEO Alan Joyce.

AirAsia's CEO Tony Fernandes says that the agreement is another step in his carrier's strategy to "maintain its position as the lowest-cost airline in the world despite rising costs associated with the fledgling global economic recovery".

AirAsia is Asia's largest low-cost carrier with associates in Thailand and Indonesia. It also has a long-haul associate, AirAsia X, which flies to Perth, Melbourne and the Gold Coast in Australia. Jetstar flies to regional and long haul destinations out of Australia, and has associate carriers in Singapore and Vietnam.

Source: Flight International

The Association of African Airlines (AFRAA) AGA held in Maputo

On 23rd and 24th November the 41st AFRAA AGA was held at Maputo, Mozambique, with the participation of more than 20 airline CEO’s. The theme of this year AGA was: “Succeeding in Challenging times”. In his keynote address the President of Mozambique, Armando Guebuza, put the emphasis on the fact that crisis is not something that the air transport industry should be afraid of or draw back from but on the contrary, a crisis can become an opportunitiy to challenge ourselves. He also added that air transport was, has been and is a catalyst of economic growth.

Mr Geoffrey Moshabesha, ICAO Regional Director, stated that the focus of the organization is on safety, security and economic liberalization. IATA RVP, Lance Brogden, added that all parties need to work together.

Christian Folly-Kossi in his last report as Secretary General of AFRAA made an overview of his contribution to the African air transport industry. His report began with a description of the state of the industry and a statement that the African airline industry has been adversely affected by the global recession although the effect has been more limited than elsewhere. He continued by adding that from 2003 total passenger numbers to and from Africa were steadily rising until 2007 but in 2008, there was a marginal drop of about 4% in passenger numbers as a result of the world economic recession. On the financial side African airlines are expected to lose around 300 USD for 2008, which is mainly due to the high fuel costs. For 2009 the estimate loss is 0.5 billion USD. In 2009 two airlines became members of AFRAA, Rwanda Air and Zambezi Airlines.

 

Source: Air Transport News