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FLIGHT NEWS 2
Willie Walsh, CEO British Airways ...
"We cannot yet foresee the external challenges that 2006 will
present. However, what we at British Airways can do is foresee the internal challenges we
face in our business. These are many and varied and we must be focused on tackling them.
For a start, we must continue to address our cost base and further our journey to a 10%
operating margin. I am confident that this target is within our reach. The restructuring of the
airline’s management, announced last month, is an important step toward that goal.
- I believe firmly that the action we are taking will deliver a more efficient British Airways.
It will remove duplication, simplify our core business and provide clearer accountability.
When the new structure has bedded in and we have also fulfilled our total £300m employee
cost savings target by March 2007, we will be significantly better placed to carry out the
investment we need to make in the coming years to deliver a competitive, efficient and growing
British Airways. The cost outlook, not least on fuel, makes it impossible for us to achieve a
10% operating margin in the current year, but I believe we can achieve a margin of at least
8.5% if we remain cost-conscious and have some respite from external factors.
We will shortly announce our new Business Plan for the two years to 2008.
We have achieved a remarkable turnaround in the business since the worldwide crisis in our
industry following the tragic events of 9/11.
Everyone at BA can be justifiably proud of what has been achieved to date.
While many of our competitors continue to flounder we remain focused on strengthening our
financial position. We have more work to do before we can turn our attention to growth and
unleash the potential that exists within BA. There are few hindrances to achieving growth in
itself. However, there are many challenges to achieving growth that is profitable and sustainable.
Many of the world’s airlines have embarked on ambitious growth plans.
Few are profitable, indeed some are bankrupt and many will fail.
BA will expand its operations to India further in 2006, doubling frequency to Delhi, and we will
look at other long haul opportunities wherever practical.
On short haul, our financial and commercial performance is way better than it was five years
ago when we were losing hundreds of millions of pounds. But we need to do better.
We will look at our European and domestic network very closely in the months ahead to
make sure we capitalise on new markets especially in the former closed shop of Eastern
Europe so that we can improve our overall short haul profitability.
One element of the preparation of the business for growth is the need to tackle the £1bn
deficit in our main pension scheme. We plan to begin talking to staff in the coming months
about our proposals to solve the deficit – for solve it we must, once and for all.
Intensifying our preparations for the move to Heathrow’s Terminal 5 will be a fundamental
feature of our work in 2006. -
T5 is a once in a lifetime opportunity to transform our operations at our global hub.
We cannot afford to get it wrong or to miss the opportunity that it gives us.
The main benefit will be to have all our operations under one roof which will not only
hugely improve the customer experience but also give our staff a better environment in
which to deliver world-class service.
Another key priority for all of us at British Airways in 2006 is improving our poor performance
on punctuality. Ensuring that aircraft depart and arrive on time should be a fundamental
concern for everyone, right up there with safety and security.
It is something our customers expect BA to get right. Our current performance is
unacceptable and I am looking for significant progress in the next few months.
To achieve that, we will need all departments of the airline pulling together as
one team and striving to be the best in the industry. Despite all the potential difficulties,
I am confident that by the end of 2006 we will have built a stronger, fitter and leaner
British Airways. In doing so, we will ensure we are better placed to overcome the
never-ending challenges that face us all in this fascinating and extraordinary industry.
Willie Walsh"
BRITISH AIRWAYS is to drop its services to Melbourne at the end of the winter season.
Passengers already booked will be offered either a change to Qantas at Melbourne or
from Hong Kong. BA says that the route has not performed as well as expected and that
the aircraft/crews involved can be used more profitably on its developing
Indian and Chinese services. Clearly a factor is the fierce competition on the “kangaroo routes”-
between the established carriers, the Asian airlines that have served the Antipodes over the years,
and the fast expanding Middle East airlines. http://www.ba.com
AVIS UK has extended the number of locations open 24 hours with five additional airport sites.
The round-the-clock service, which has been available for a number of years at
Heathrow and Gatwick, has now been extended into Birmingham, Bristol, Stansted,
Manchester and Glasgow airport locations from the 1 December 2005. In addition to the
24-hour locations, Avis also uses the latest automated, key collection system to provide an
out of hours solution for key business customers at a further 22 sites.
Keys are held in secure safes outside each rental station and customers are issued with
a passcode to open the safe and access the keys without delay. http://www.avis.co.uk
BLACKPOOL has lost its daily service to Aberdeen. City Star Airlines,
which introduced the return flights during the summer, withdrew the operation straight after
the year-end holidays citing a lack of passengers. The Icelandic-backed regional carrier
continues a twice-daily service from Aberdeen to Oslo and also Aberdeen to Stavanger and
on to Kristiansund. Dornier 328 turboprops are used on both routes.
http://www.citystarairlines.com
BOEING has set a new milestone likely to remain in the books for a long while.
With an order for ten 737-800s from Xiamen Airlines, total sales for the all-time best-selling
737 have surpassed the 6,000 mark. To date 3,132 models of the
"Initial" (100 and 200 series) and "Classic" (300, 400 and 500) families, and 2,893 of
the newer redesigned Next-Generation 737 series have been sold.
The grand total is 6,025. Xiamen Airlines will take delivery of its 737-800s beginning mid-2006.
Total orders for the Airbus 320 series stand at 3,914. http://www.boeing.com
BRITISH AIRSPACE flights grew to a record 2.3m in 2005, 5.7% more than in 2004.
The growth rate was the highest since 1999, says air traffic management provider -
National Air Traffic Services. This was partly due to a 36.5% jump in flights operated by
low cost carriers to Eastern Europe. Flights to the Middle East, Asia and Africa were up
nearly 13%. However, the strong year-on-year growth in domestic flights seen throughout the
year slowed down dramatically with the introduction of the airlines’ winter schedules,
dropping from a peak increase of 9.5% in May to just a 0.4% rise in December.
Transatlantic flights remained below the pre-9/11 peak recorded in 2001.
NATS London Area Control Centre at Swanwick remained the UK’s busiest air traffic
control centre, handling 4.9% more flights in 2005 for a new record total of 1.86m.
However, NATS’ other four control centres – London Terminal, Manchester Area,
Scottish Area and Oceanic Area – all established new records too. http://www.nats.co.uk
CAA has published a report ‘Demand for Outbound Leisure Air Travel and its Key Drivers’.
The document sets out the facts on, and the latest analysis of, how changes in income,
wealth, airfares and the composition of the population affect demand for leisure air travel.
Passenger traffic at UK airports has grown at an average annual rate of about 6%, more than
twice the rate of economic growth in the UK and considerably faster than in other developed
aviation markets. Also recently available is the 2004 air traveller survey, which was conducted
at four London airports (Gatwick, Heathrow, Luton and Stansted) and Manchester Airport.
The survey interviewed 121,000 of the 148m passengers travelling from the
London and Manchester airports. 73% of passengers using the London airports travelled for
leisure and 27% business. For Manchester they were 80% and 20%.
UK residents made up only 46% at Heathrow, 64% at Stansted, 76% at Gatwick, 78%
at Luton and 85% at Manchester. 35% of passengers at Heathrow changed flights,
compared with 14% at Gatwick, 12% at Stansted and 3% at Manchester.
The capital had the highest proportion of passengers travelling to the airport by public transport,
at 35%, although private cars were still the most popular mode of transport to the airports:
44% in London and 60% in Manchester.
One in three of Manchester’s passengers travelled alone, compared with just over half at
the London airports. http://www.caa.co.uk
CAPE VERDE AIRLINES, or officially Transportes Aéreos de Cabo Verde (TAVC) has been
getting some help from the British over the holiday period.
When Air Atlantique received an enquiry from Pria the first question was where? Cape Verde,
officially the Republic of Cape Verde, is 385 miles due west of Dakar, the most easterly point
of Africa. A former Portuguese colony, the islands became independent in July 1975 and have a
population of close on half a million. TAVC was established back in 1958, and currently has a
fleet of two Boeing 757s, ideal for international operations (the airline flies to Boston twice weekly)
and three ATR 42s, perfect for inter island operations. But aircraft sometimes need maintenance.
Atlantique positioned ATR G-RHUM down before the holiday as a replacement aircraft and it
has been kept very busy flying around the islands with some very good loads.
A full wet lease, the crews are expected to return somewhat tanned. http://www.tacv.cv
CELEBRITY CRUISES (and its sister company Royal Caribbean) have come up with a
scheme that is bound to be popular with guests facing the prospect of returning to
dry land and the exertions needed to transit an airport. For a nominal fee passengers whose
cruises conclude in Fort Lauderdale, Miami, San Diego, San Juan and Seattle can now
complete the airline and luggage check-in process for their flights home even before they
step off the ship. All the paperwork is done on board and after leaving out their luggage as
they turn in on the last night, the next time they see it will be their home airport.
Sadly, the scheme has only been approved by the US authorities for domestic flights.
http://www.celebrity.com
COVENTRY AIRPORT has been sold by TUI UK, the owners of ThomsonFly to
CAFCO (Coventry) Ltd, a new joint venture company constituting Howard Holdings plc,
an Anglo-Irish property development group, and CAFCOHL, an Anglo-American airport
management and development organisation founded in 2004. The Air Atlantique Group owned
Coventry Airport until early 2004, the airport purchased by TUI to safeguard the launch of
ThomsonFly. A planning enquiry took place during the summer of 2005 regarding the
existing operation, the result of which is thought to be imminent. Another enquiry,
for a new permanent terminal capable of handling up to 2m passengers per annum,
commences on 10 January. SouthWest Regional Airports Ltd (SRAL), owned by CAFCOHL,
has signed an exclusive agreement to provide management and operational services to the
airport with current Coventry MD Bill Savage stepping up as executive chairman,
focussing on the planning inquiry issues, and Adrian Jones, finance director, running the business
as acting managing director. SRAL was an unsuccessful bidder for Exeter Airport
(which is now the subject of a competition review).
AFCO owns, manages and operates airport facilities in more than 27 locations across the USA,
Caribbean and Europe. http://www.howardpropertyplc.com http://www.cafcohl.com
http://www.afcoinc.com http://www.coventryairport.co.uk
DVT seems at last to have been laid low as a major risk on long distance flights
following the publication of the largest ever study of its kind by the Department for Transport.
It was found that all forms of transport involving a journey of four hours or more,
led to an increase in the risk of blood clots forming in the veins of the legs. In a study of
air passengers’ cases regarding the likelihood of DVT (a blood clot on the leg),
it was only found in a single case per 6,000 journeys that lasted four hours or more.
In fact such clots are far more common amongst those in hospital than in those who travel.
Every year DVT occurs in about 1-3 per 1,000 people in the general population,
ranging from fewer than 1 in 3,000 in people under the age of 40 up to 1 in 500 in those
over 80. In all incidences of DVT, travel related or otherwise, only 1% of cases prove to be fatal.
The Department of Health website offers advice on reducing the risk of DVT during journeys.
Sitting still for long periods of time on long journeys – whether by plane, train, car or coach –
can lead to DVT. Department of Health advice is to move your feet frequently, or get up and walk
around as regularly as you can and drink a reasonable amount of water.
The report confirms the views of aviation consultant Dr Ian Perry that DVT was not a
medical problem and that essentially the commercial supplements alleged to reduce DVT were
a waste of time. One would hope that those people who failed in a recent House of Lords’ ruling
regarding DVT (ABTN 12 December 2005) agree that theirs is a lost cause. http://www.dh.gov.uk
EASYJET is to add 14 new routes across its European network this spring as it takes delivery of
nine Airbus A319s. It also will convert its bases in Liverpool, Edinburgh and Glasgow to
all-Airbus operations, replacing its current fleet of Boeing 737s. The announcement was made
in the name of new chief executive Andrew Harrison. EasyJet will operate 116 Airbus A319s by
this summer and serve 247 routes. The new services include Geneva – Palma
Mallorca (thrice-weekly from 25 April), Lisbon – Luton (daily from 1 March), Lisbon – Milan Malpensa
(daily from 21 April), Lisbon – Paris CDG (daily from 1 March), Liverpool – Faro
(daily from 11 April), Liverpool – Krakow (four-times-weekly from 10 April),
Liverpool – Mahon Menorca (twice-weekly from 22 July), Liverpool – Marseille
(thrice-weekly from 11 April), Malaga – Berlin Schoenefeld (daily from 26 March),
Malaga – Dortmund (thrice-weekly from 1 April), Malpensa – Naples (twice-daily from 27 March),
Malpensa – Palermo (twice-daily from 21 April), Malpensa – Olbia (four-times-weekly from 19 May)
and Malpensa – Ibiza (four-times-weekly from 19 May). http://www.easyjet.com
GRAND CHINA AIRLINES is to become the new name of Hainan Airlines,
China’s fourth largest airline group, the first to be stock market listed and also the first to attract
foreign investment. American Aviation, a company controlled by George Soros, has a 15% interes
in the airline, which dates from 1995. It is the world’s largest operator of the Dornier 328 JET and
also operates both Airbus 319 and Boeing 737-800 aircraft mainly on domestic services.
The airline has won Chinese authorisation to operate Shanghai – Boston non-stop and assuming
US approval, will introduce services later this year. It is a lead airline for the Boeing 787 signifying
ambitious international expansion plans. http://www.hnair.com
HILTON starts 2006 as one company,
for the first time in 40 years. On 29 December US-based Hilton Corporation announced that it
would acquire its British counterpart Hilton Group plc, generally called "Hilton International".
The transaction is due to close in the first quarter of 2006 with the former Hilton Group retaining
its gambling and betting business and expected to be renamed Ladbrokes plc.
Upon completion of the transaction, Hilton Hotels Corporation will be the largest and most
geographically diverse lodging company in the world, with nearly 2,800 hotels and 475,000 rooms
in 80 countries, operating under the industry's most respected brand names, including Hilton,
Conrad, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Homewood Suites by Hilton,
Scandic and Hilton Grand Vacations Club.
INDEPENDENCE AIR, a Washington (Dulles) based regional carrier, has closed down.
The former Atlantic Coast Airlines has in truth been struggling since it was created in the
summer of 2004 following the loss of contracts with both Delta and United. It is the largest
US airline demise since 1991, when both Eastern Air Lines Inc and Midway folded.
Still flying on under Chapter 11 bankruptcy protection are seven American
carriers including Delta, Northwest and United. The airline had a fleet of over 80 Bombardier
CRJ aircraft and outstanding orders for 25 Airbus 319. http://www.flyi.com
NEWCASTLE AIRPORT has lost the much-hyped American Airlines route to JFK-New York
that was supposed to start later this year. An announcement by the airport,
rather than the airline, says AA has advised them that “as a result of continued high jet fuel
prices and economic conditions in the US airline industry, it has been forced to reconsider its
network expansion plans for 2006. Regrettably, this includes cancellation of the
Newcastle – New York service”. In the meantime Continental has confirmed minimum changes for
2006 with its various operations from Birmingham, Bristol, Edinburgh, Gatwick and Manchester to
Newark Airport, just across the Hudson in New Jersey from Manhattan.
http://www.newcastleairport.com
OASIS HONG KONG AIRLINES, a start-up budget carrier, has won licences to operate a
number of European and United States routes from Hong Kong, despite objections from
market leader Cathay Pacific Airways. Gatwick is the proposed UK destination.
The airline is also targeting Milan, Berlin, Cologne/Bonn and Oakland San Francisco Bay.
Behind the new carrier as chief executive is Stephen Miller, founder of Dragonair,
who says the company could start services to London next June using Boeing 747 equipment.
Lead-in fare is being promoted at as little as $128 one-way.
The company is 60% owned by American-Chinese businessman Raymond Lee and wife Priscilla.
Allan Wong, chairman of cordless phone manufacturer VTech Holdings,
has a 15% interest in the $100m project. http://www.oasis-air.com
OXFORD AND CAMBRIDGE are to be joined by a twice-daily air service from 1 February,
the flights undertaken by Sky Commuter, a long established executive charter operator.
Trip time is just 22 minutes. Although only 100 miles apart, the two university cities are linked
by some of the busiest dual carriageways in the country. Sky Commuter is part of
Nutricius Group, a travel industry marketing company based at Coventry Airport.
It operates a Citation Jet 1, KingAir C90, BAe Jetstream 21 and Piper Navajo.
http://www.skycommuter.com
SINGAPORE AIRLINES has stolen a march on the competing carriers in the Gulf region
with the introduction of a three times per week service to Abu Dhabi from 1 March 2006.
From Abu Dhabi the flights will continue on to Jeddah in Saudi Arabia,
which also does not have a direct service to Singapore.
Boeing 777-200 aircraft will be used.
VIRGIN ATLANTIC has confirmed Monday 27 March as the introduction date for an initial
four times a week service from Heathrow to Dubai.
The airline will operate a three class Airbus A340-300 with a flight time of 7 hours 10 minutes.
This will be the first time that Virgin has gone into a head-to-head with
Dubai national carrier Emirates, an airline which has been under recent pressure for
what has been termed “a fall in standards”. Also contesting the route are British Airways,
Bangladesh Biman and Royal Brunei.
