13FEB edition

Air Canada has officially announced that it will be reconfiguring 5 of its soon to be delivered new Boeing 777-300ERs into a high density configuration allowing it to serve specific volumetric demand markets from Canada that witness more economy class travel than premium and also enable it to compete more effectively against its main low cost trans-atlantic rival i.e. Air Transat on certain key European routes. Currently, AC's B773ERs seat 349 passengers in a 2 class configuration, however from 11JUL13 onwards, the first reconfigured high density B773ER will have 458 seats on board with the introduction of a premium economy class cabin as well. The new layout will be 36 business class (flat beds) + 24 premium economy + 398 economy class and its first route will be Montreal-Paris.

Analysis:

This is how you can make good money on long haul VFR (ethnic) routes operated with B777-300ERs by having a ultra high density configuration perfectly suited to the market demographic hence reducing your operating cost per seat unit. A pioneer of this successful concept was Emirates since the mid 1990s using 434 seater B773As on high density routes from DXB to PAK, India, MNL and DAC. With this layout, Air Canada thus becomes the airline with the second highest seat count for a legacy carrier operating long haul flights using a B77W as # 1 is Air France (Caribbean/BKK flights layout) which has 478 seats on board its B77Ws.
Since 5 B77Ws are being reconfigured and already one aircraft going to be dedicated for YUL-CDG, the other 4, I would suggest should be used as follows:

YVR-HKG for which 2.5 aircraft would be required
YUL-FRA for which 1 aircraft would be required

However, if this concept works out and I really hope so it does as it has all the necessary tools to succeed, I think AC can easily do with 11 B77Ws configured in this layout to be operated in the following manner:

2.5 for daily YVR-HKG
1 for daily YVR-LHR

1 for daily YUL-CDG
1 for daily YUL-FRA

1 for daily YYZ-LHR
2.5 for daily YYZ-PEK

New Routes:

• 1 for 4 weekly YVR-MNL (90,000 pax O&D market size alone and for rest of Canada its an additional 230,000 pax). Via YVR, AC can also get some transfer traffic bound to U.S. West Coast especially SEA, ORD, Texas and LAS markets where PAL is offline. Some might say that YYZ-DEL is also a feasible option, but after doing some rough calculations, it is not especially since DEL-YYZ sector on a 458 seater will be severely payload restricted. Note that when AI operated DEL-YYZ nonstop with a 340 seater B77W it could not carry any cargo so expect AC's B77W too have a payload penalty of 100 pax at least on DEL-YYZ flight portion. In comparison, Canada-MNL market size is more or less the same as Canada-DEL but the average fare is 30% higher to MNL versus DEL and its a shorter flying distance. Plus unlike Canada-DEL which actually has major seasonal demand i.e. majority of travel is between OCT-FEB, Canada-MNL is year round. Last but not least, Canada-MNL has way less in-direct one stop competition versus Canada-DEL hence more easier for AC to fill up the plane.

• 0.5 for 3 weekly YUL-CMN (94,000 pax O&D market size alone) ...to be replaced by B789 when it gets delivered and increased to 4 weekly by that time.

YVR-HKG and YYZ-PEK, are required as these are long haul routes where the operating costs of flying B77Ws shall remain the same but the extra potential revenue that 109 seats brings to the table on these 2 very high volumetric routes shall definitely come in handy. There are 36J class seats on board which would translate into a 86% S/F on the current 42J B77W which is adequate as well. Some people might argue that YVR-MNL/HKG and YYZ-PEK would not be possible to operate using a 458 seater B773ER, for which my counter argument is that Air France uses a 478 seater on BKK-CDG which is a 12 hour 20 minute flight without any payload issues and Etihad Airways uses a 412 seater Boeing 777-300ER on AUH-ORD which is a 14 hour 45 minute flight i.e. longer than YYZ-PEK by nearly 2 hours plus EY offers 2 pieces baggage allowance compared to AC's 1 piece!

Etihad Airways has officially announced few capacity increases for its medium haul route network for the IATA S13 season of which the main highlights are as follows:

ISB - frequencies increased from daily to 11 weekly nonstop flights i.e. 3 weekly B773ERs + 8 weekly A320s

KRT - frequencies increased from 5 weekly to daily nonstop flights using an A320

IST - capacity increased from daily A320 to daily A332


Turkish Airlines has officially announced that it has placed another order with Airbus for 5 additional wide bodied aircraft. TK confirmed that these are for 5 A330-300s of which 2 are firm and 3 are held as options. Deliveries are expected in 2014-15 and as IST airport gets congested, TK will be upgrading a lot of its high density European routes from B738s to A333s especially where there is a lot of cargo demand such as MUC, MXP, FRA, AMS and CDG.

In addition, TK revealed grand expansion plans for its secondary hub at SAW-Sabiha airport in Istanbul for the upcoming IATA S13 season of which the main highlights are as follows:
*All flights to be operated using a B737-800

SAW/KWI - new daily flights to be launched
SAW/AMS - new daily flights to be launched
SAW/LGW - new daily flights to be launched
SAW/VIE - new daily flights to be launched
SAW/MXP - new daily flights to be launched
SAW-CDG - new daily flights to be launched
SAW/GYD - new daily flights to be launched
SAW/TBS - new daily flights to be launched


Cathay Pacific has officially announced that it will be increasing capacity to LHR-London Heathrow in a significant manner effective 27JUN13 onwards. Currently, CX operates 4 times daily on the HKG-LHR sector however from 27JUN, this shall be increased to 5 times daily using a B773ER four times a day + a B744 once daily. The new flight is CX 239/238 which departs HKG at 1025 and arrives back the next day at 1715 HKG time.


Oman Air has officially announced that it will be increasing its services to HYD-Hyderabad, India effective immediately as the carrier looks to take full advantage of the new bilaterals being awarded to by the Indian Govt. Frequencies on the MCT-HYD route shall therefore be increased from daily to double daily using a Boeing 737-800 with flights departing MCT at 0120 and 1000 local time respectively


China Southern Airlines has revealed many capacity changes for its medium and long haul route network for the upcoming IATA S13 season of which the main highlights are as follows:

*All flights mentioned below are operated from its primary CAN-Guangzhou hub base

DME - new 3 weekly nonstop service to be launched using an A332 eff 19JUN

MEL - frequencies increased from daily to 10 weekly nonstop using an A332

YVR - frequencies increased from 3 weekly to daily nonstop using a B772ER

DEL - frequencies increased from 10 weekly to double daily i.e. daily B757 and A332 each respectively

Fly Dubai has officially announced that it has been granted bilateral permission by the Pakistani Government to launch 2 new routes to the country i.e. Sialkot and Multan effective immediately. As a result, FZ confirmed that it will be doing so with pleasure effective 13MAR when it inaugurates 3 new weekly flights each respectively to both cities using a 189 seater Boeing 737-800. The schedule for both these new routes have the flights departing DXB at 2200 and arriving back by 0715 DXB time. The main markets for FZ from here are JED, KWI, DMM, DOH, RUH and O&D to DXB along with interline traffic bound to UK, FRA and USA.


Bahrain Air has officially announced that it has filed for bankruptcy and shall be suspending all of its flights effective immediately as the carrier struggles with a financial crisis, large payments owed to Bahrain Airport Company and a host of other issues of which a detailed statement is available to read on their website http://www.bahrainair.net

There has been no comment from Gulf Air on whether it plans to increase its own services on any of the commonly flown routes. The main interest for GF would obviously revolve around BN's India frequencies bound to Calicut and Trivandrum as these are high volume routes with huge O&D demand to BAH along with KWI, Saudi Arabia and DOH.


LOT of Poland has officially announced that due to high demand in summer for its USA bound services, it shall be increasing capacity by 40% on each of its flagship Chicago ORD and New York JFK services effective 01JUN 2013 till 30SEP. Both routes shall witness an increase in frequency from daily to 11 weekly nonstop flights each using its new Boeing 787-800s. The new flights arrive and depart USA late evening i.e. ORD 1940/2150 (arr/dep) and JFK 2100/2255
(arr/dep)


KLM has officially revealed few changes to its medium/long haul route network for the upcoming IATA S13 season of which the main highlights are as follows:

BAH - frequencies increased from 5 weekly to daily using an A332

NRT - frequencies increased from 10 to 11 weekly using a mixture of B777s and B747-400 Combis

ALA - frequencies increased from 4 to 5 weekly using an A332

LIM - capacity increase from daily B772ER to 4 weekly B773ER + 3 weekly B772ER
AUH - frequencies increased from 5 weekly to daily using an A332


TAAG of Angola has officially announced that it has struck a deal with Boeing to purchase 3 additional new Boeing 777-300ER aircraft from the manufacturer to be delivered from 2016 onwards. Currently, TAAGs long haul fleet consists of 3 B772ERs and 2 B773ERs of which the latter seats 293 pax in a 3 class layout i.e. 12F/56J and 225Y. It is worth noting that LAD is the highest yielding long haul African route of all European airlines that operate there due to the country's vast oil wealth and its status as Africa's largest oil exporter. There is also massive demand to China from Angola with large investments being made by Chinese companies in various sectors of the Angolan economy. The total market size between Angola and China is approximately 75,000 passengers annually out of which 90% is bound to Beijing itself alone!