Kenya Airways

Kenya Airways will be reducing its capacity to Mumbai, India for the upcoming summer peak season. Currently, 3 weekly B 772ERs + 4 weekly B 763ERs are flown nonstop from NBO to BOM. However from July 1st 08, the service will become a daily Boeing 767-300ER operation.

In addition, KQ has announced that it will be increasing its flights to Far East Asia from July 2008. The main highlights are as follows :

CAN - increased from 4 to 6 weekly B 763ER flights i.e. 4 via DXB and 2 via BKK. KQ can carry 5th freedom traffic from DXB & BKK to Guangzhou (CAN).

HKG - increased from 3 to 4 weekly B 763ERs flights all flown via BKK with 5th freedom traffic rights.BKK - increased from 3 to 6 weekly B 763ERs all flown nonstop from NBO.

Analysis :

It seems evident that KQ and ET are making good money with their CAN bound flights which is not surprising at all as this city has more "direct trade" with Eastern/Southern Africa than any other region in China! Since they offer a vastly superior business class product compared to CZ on the popular DXB-CAN route, their J class loads on this route might also be bringing in good yield. Overall, its very pleasing to see KQ taking the initiative at expanding in the Far East as the demand for Africa-Far East Asia travel is growing rapidly year by year due various large scale investments made by Chinese and Japanese state enterprises in different African states.

Garuda

Garuda of Indonesia is in final talks to place a multi billion dollar order at next week's Singapore Air show and the announcement includes purchasing 10 B 777-200ERs + 25 B 737-800s + 10 B 787-800s. In the mid 1990s, GA originally placed an order for 6 B 772ERs but then the Asian financial crisis hit which ended up in the order being defered. As far as the B 738s are concerned, GA has already ordered 25 previously and these additional 25 are part of the "options" plan it had with Boeing. Lastly, the B 788 deal is basically a firm signing of an earlier MOU which was signed in 2005 between GA and Boeing.

Source: http://www.flightglobal.com/articles/2008/02/13/221505/garuda-to-order-more-737-800s-and-firm-order-for-787s.html

Analysis :

Personally speaking, I'm not totally in favor GA's management ordering 10 B 772ERs exclusively as this aircraft type will be a detrimental factor for their long term growth. GA's board should instead seriously consider ordering a mixture of 7 B 772LRs and 3 B 773ERs. The reasons being that the latter will prove to be an ideal replacement for their entire fleet of B 744s four to five years down the road as its a more "cost effective" aircraft to use on high density flights to Japan, Europe & Middle East. You cannot replace a 410 seater B 744 with a 310 seater B 772ER as that is a huge capacity decrease particularly on routes to the Middle East which see high density demand year round. If GA want to increase the life span of their B 744s, they can later be converted into freighters as the country desperately needs a strong all cargo airline.

As far as why the B 772LR should have been ordered instead of the B 772ER is because of payload issues. The full capacity uplift of the B 77L would come in handy on long haul nonstop flights to LGW, FRA & AMS as there would be no payload problems year round. With the B 772ER, GA would suffer seasonal payload restrictions on nonstop flights bound to LGW & AMS especially. LGW would work well if GA flew DPS-CGK-LGW due to the high volume of DPS bound traffic year round from the Greater London Area. If GA fly daily into LGW from CGK, they should time their flights to connect with SYD/MEL/PER so that they can grab a small piece of the "Kangaroo route" market share with their one stop flights.

Thai Airways

Thai Airways has announced that it will be increasing its flights to Southern India from the onset of the Summer 2008 timetable. Both Chennai and Bangalore will each get 3 additional weekly flights flown by an A 300-600R (AB6). This will result in MAA being increased from 4 weekly to daily flights with the 3 additional flights being terminator flights as the remaining 4 continue onwards to DXB-Dubai with 5th freedom traffic. With regards to BLR, it will result in the city being upgraded from daily flights to 10 weekly i.e. daily A 333 + 3 weekly AB6s.

In addition, TG has also revealed additional major aircraft and frequency changes for Summer 2008. The main highlights are as follows :

NGO - increased from daily to 10 weekly B 772A operated flights.

AKL - frequencies reduced from daily A 346 to 5 weekly B 772ERs.

ATH - capacity reduced from 3 weekly B 773As to 3 weekly B 772ERs.

MUC - capacity reduced to daily A 346s from 4 weekly A 346s + 3 weekly B 744s effective mid May.

CAN - capacity increased to double daily A 333s effective Aug 1st.

MXP - capacity reduced from 4 weekly B 772ERs to 4 weekly A 346s (fyi...TG's A 346s seat 267 pax where as their B 772ERs seat 292 pax).

Lufthansa

Lufthansa announced today that it will be increasing capacity to Charlotte, USA from June 10th onwards by replacing the daily A 343 operated flight with a larger 3 class configured A 340-600 which seats 306 pax. LH currently codeshares with US Airways on this route which sees a high volume of premium traffic in the summer months especially as CLT and its surrounding areas are home to a size able number of various pharmacutical companies + famous doctors who fly J & F class on LH consistently.

Qatar Airways

Qatar Airways will be increasing its flights to Shanghai, China from 5 weekly to daily effective November 2008. All daily flights will be flown using a 2 class configured A 330-200.

However, from January 1st 2009, QR will be further upgrading capacity on this route by deploying a daily Boeing 777-300ER on it which seats 336 pax in a luxurious 2 class layout.

China Eastern

China Eastern Airlines has revealed a lot of interesting changes across its international route network which will come into effect from the onset of the Summer 2008 IATA timetable period. The main highlights are as follows :

***MU's hub is based in PVG-Shanghai

LHR - frequencies increased from 2 to 5 weekly nonstop flights using an A 343.

BNE - all flights to be suspended from Feb 20th onwards.

MEL - frequencies reduced from 4 weekly to 3 weekly A 343s.

BKK - capacity increased to daily A 332 + daily A 320.

KUL - frequencies reduced to daily A 319s.

DEL - frequencies increased to 5 weekly nonstop flights flown by an A 332.

Singapore Airlines

Singapore Airlines is expected to reduce its nonstop flights to Manchester, England from the on set of the Winter 2008-09 timetable. Currently, a daily nonstop flight using a B 772ER is being flown, however from Oct 26th 08, this is expected to be reduced to a 5 weekly operation.

Malaysia Airlines

Malaysia Airlines will be adding "summer seasonal" flights to two key routes to meet high demand levels for its flights. Service to AMS-Amsterdam, Holland will be increased to 8 weekly nonstop using a B 744 for all flights where as services to Perth, Australia will increase by 2 weekly nonstop flights using an A 333.

Korean Air

Korean Air has announced that it will be purchasing 3 additional Airbus A 380s bringing the total number ordered by the airline to 8. Besides that, it has been revealed that KE is increasing frequencies to IAD-Washington DC with the launch of an additional weekly nonstop flight flown from its ICN hub using a B 772ER. This comes into effect from Oct 26th 08 and will result in IAD being flown 5 times a week by KE.

The airline will also be doubling its flights to CAI-Cairo, Egypt by launching an additional 3 weekly flights via DXB-Dubai using an A 333. KE will have 5th freedom rights on the popular DXB-CAI-DXB route. Currently, nonstop flights are flown by KE to CAI using an A 332 three times a week. The additional flights will result in CAI being served 6 times a week by KE.

Asiana

Asiana Airlines of South Korea has decided to expand its LAX-Los Angeles flights from its main ICN-Seoul hub by flying the route double daily nonstop effective 16th May. Currently, the service is flown 12 times a week and the 2 additional weekly flights will be flown using a B 772ER. To LAX, OZ's flights will be flown using a B 772ER daily + 3 weekly B 744 + 4 weekly B 744 Combi.

Etihad Airways

Etihad Airways has been given the authority from the Indian Government to launch 4 new cities to its network under a revised bilateral arrangement. The amended treaty permits EY to start operations to Calcutta, Jaipur, Calicut and Chennai. However, their CEO Mr James Hogan has stated that he would like his airline to be also given the right to fly to Amritsar, Ahmedabad, Bangalore and Hyderabad as soon as possible.

In addition, EY will be increasing frequencies to SYD-Sydney, Australia by adding 4 additional nonstop flights to the route from Oct 27th 08. This means that a total of 11 weekly flights will be flown by EY on this route. These 4 additional flights will be flown using an A 340-600. The new flights timings are as follows:

Days : MON/WED/FRI/SAT

EY 454 Dep AUH 2350 Arr SYD 2055+1
EY 455 Dep SYD 2255 Arr AUH 0645+1

Analysis:

Its really surprising to see that the Indian Govt gave permission to EY to launch CCJ-Calicut which for decades has always been fiercely protected for Air India as a majority of the Keralite labor force working in the Middle East hails from CCJ. Hence, for the last 2 decades Air India has always successfully managed to lobby the Indian Govt to keep this monopoly and not allow Gulf carriers to tap this market segment.

Another interesting move has been to allow EY access to JAI-Jaipur where the bulk of the North Indian labor force in the Middle East hails from. From JAI, EY will face competition from WY-Oman Air only who fly nonstop from their MCT base using a B 737-800. JAI will also be a popular destination with European and USA tour operators who promote "The Golden Triangle (Delhi-Agra-Jaipur)" tour package to their clients.

However, EY should not make the same mistake that it has done currently with its TRV & COK flights i.e. by sending A 320s to JAI & CCJ. EY should deploy 2 class configured A 332s to JAI & CCJ to make money as the demand is there on a year round basis especially by it not facing competition from any European or prominent Middle East carrier on these routes. It must exploit this position to the maximum as the cargo demand too year round to both these cities is very high. The A 332 can carry 10-12 tons of cargo easily in its belly on these medium haul flights which means a lucurative source of additional revenue for EY.

With regards to CCU & MAA, the same thing applies. EK, SV and the European carriers use luxurious wide bodied aircraft to fly to both these key Indian port cities. For EY to be competitive especially against EK who send their B 777s and A 332s to both MAA & CCU, it must also respond accordingly by using a 2 class A 332 for both cities.

Lastly, as for it increasing SYD flights (which is a good competitive move) to 11 times a week, the main question is can the A 346 fly this route with a full payload in both directions nonstop? One doubts it as EY's A 346s carry heavy F & J class seats and in total accomodate 286 pax. This route with the A 346 operating it shall be very interesting to follow.

Gulf Air

Gulf Air announced that it has secured permission from the Indian Government over the weekend to start new daily nonstop flights from its BAH-Bahrain hub to Hyderabad as well as increase COK-Cochin and CCU-Calcutta bound flights to daily each respectively. Currently, GF flies twice a week A 320s to CCU and 5 times a week A 320s to COK.

Emirates

Emirates has revealed further capacity changes that it will implement across its route network in 2008-09. The main highlights are as follows :

CPT - to be launched using a 3 class B 772ER instead of an A 332.

MXP - capacity upgraded to daily B 773ER from January 1st 2009.

MLE - from July, capacity will be upgraded to 10 weekly B 773s.

SYD/AKL - capacity upgraded on EK 412/413 to daily A 380s from Feb 1st 09.

Analysis:

Looks like the demand for CPT has surpassed even EK's expectations for them to switch capacity to a larger aircraft to launch the route. FYI, EK's B 772ERs carries approximately 70 passengers more than its A 332s. The airline that will feel the punch most with EK's new CPT flights would be QR because they currently fly to CPT via JNB which will turn out to be un-competitive in the short term future.

Air France

Air France has announced that it will be adding a daily seasonal flight to JFK this summer which will be flown using an Airbus A 330-200. The flight timings will be similar to that of a "red eye" service. This new flight will be operated between 23rd June and 29th Sept 08 only.

Flight timings are as follows :

AF 004 Dep CDG 2045 Arr JFK 2250

AF 005 Dep JFK 0100 Arr CDG 1410

Japan Airlines

Japan Airlines has unvieled a major network restructuring initiative which is aimed at increasing frequencies to key long haul high yielding destinations at the cost of reducing the size of the aircraft used. The main highlights are as follows :

JFK - increased to double daily nonstop flights using a B 744. But from Aug 1st, capacity will be reduced to daily B 773ERs + daily B 744s.

CDG - summer seasonal increase from daily to 11 weekly B 773ERs.

SFO - capacity decreased from daily B 744 to daily B 773ER effective 1st Sept 08.

PUS - increased from daily to double daily flights using B 763ERs.

KHH - capacity reduced from daily B 744s to daily B 763ERs.

DME - increased from 2 to 3 weekly flights flown nonstop using a B 772ER.

China Southern

China Southern Airlines based out of CAN-Guangzhou, China has announced major capacity and frequency changes to its international network for the upcoming Summer 2008 season. The main highlights are as follows :

DXB - increased from 4 weekly to daily nonstop flights using an A 332s.

CDG - increased from 3 weekly to 4 weekly nonstop flights using a B 772ER.

DEL - increased from 3 weekly to daily nonstop flights using a B 752.

SYD - reduced from daily to 5 weekly nonstop flights using an A 332.

MEL - capacity reduced from 2 weekly B 772ERs to 2 weekly A 332s.

SGN - increased from daily to 10 weekly flights i.e. daily B 738 + 3 weekly A 319.

PAK-UK open skies

Pakistan and UK signed a new bilateral treaty last week which culminated in the two sides agreeing to having OPEN SKIES from all Pakistani and British airports including Heathrow/Gatwick. Currently PIA and BA/VS/BMI could only fly up to 10 times a week to LHR/LGW from PAK and vice versa. Included in the new bilateral arrangement is the allowance for Pakistani carriers to carry 5th freedom traffic from UK to USA only 6 times a week where as UK carriers can fly via an intermediate point only 6 times a week to Pakistan carrying 5th freedom traffic.

Analysis :

One hopes that this open skies deal leads to BA returning to KHI either this year or next. Tentatively, they had planned to launch KHI via MCT 6 times a week with a B 772ER but then Ms Bhutto got killed and those plans were put on hold indefinitely due to the law and order situation deteriorating in the country. PIA too have a lot to gain with the additional LHR flight rights but finding slots at decent times is a major issue. Presently, slots after 6pm-7pm at LHR are only available for PIA to pursue which shouldn't be a problem as that would mean an afternoon departure from PAK, a late night departure from LHR to PAK which would arrive late morning back home which is ideal for O&D passengers. If open skies is allowed to be implemented immediately then at least for the peak summer season, PIA should have one extra weekly terminator flight flown nonstop from ISB/LHE/KHI each respectively to cope with demand during the busy period.

Thai Airways

Thai Airways will be making a capacity adjustment for its Australia flights by removing the first class cabin product from the country as it will suspend using the Boeing 747-400 on its services to MEL, BNE and SYD. The capacity changes that TG will be implementing come into effect from March 31st 2008.

They are as follows :

SYD - capacity reduced from double daily B 744s + daily B 772ER to double daily B 773As + daily B 772ERs.

MEL - frequencies increased to double daily B 772ERs.

PER - capacity reduced from 5 weekly B 777s to 5 weekly A 333s.

Continental Airlines

Continental Airlines has announced that it will be increasing its flights to Spain to 4 daily from Summer 2008 by flying double daily to Madrid and Barcelona each respectively from its EWR-Newark hub. BCN will get double daily B 752s where as MAD will see a daily B 762ER + daily B 752.

Iberia

Iberia of Spain has placed an order for 3 additional Airbus A 340-600s that it had as options with Airbus for nearly a year. Insiders feel that not only will IB use these birds to increase its Latin America presence but also launch 2 new long haul destinations in Asia nonstop from its MAD hub such as to HKG because it is a One World hub airport of Cathay Pacific. IB is a part of the One World global alliance.