Oman Air
has officially announced that it has obtained approval from the Govt of Oman to
launch a low cost airline operating primarily to the Indian Subcontinent and
selected domestic routes to offer a more cost effective product to its core
clientele.
In addition, the airline too
revealed that the 3 new long haul routes that it intends to launch to
help boost revenues and profitability include Casablanca, Manila and Jakarta.
Analysis:
WY has yet to disclose the
business plan for this new venture however there are two options it can look
at:
Option 1 – the low risk
approach
Convert many B738s from its
existing fleet from a dual class configuration to an all economy class layout
seating 180-189 passengers and operate them on ISC routes which have minimal business
class demand such as CGP, LHE, ISB, PEW, COK, CCJ, TRV, LKO, HYD, BLR, MAA, CMB
and KTM. Routes such as KHI, BOM and DEL though should be maintained as a 2
class service as the airline does get a small amount of premium passengers
bound to Europe in particular. If WY is in desperate need of planes to propel
growth, they can easily dry lease from Fly Dubai or Jet Airways (JetKnonnect)
few all Y class configured B738s. In addition to the ISC routes, others
that should be served with these configured aircraft include KRT, DAR and ADD.
Option 2 – the fresh attacking
approach
Order a bunch of larger Boeing
737-900ERs from Boeing to be configured in all Y class layout which would seat
230 passengers i.e. at least 27% more than the B738s and the cost to operate
these aircraft would be about 8% higher at the very most which is off set by
the on board capacity increase. This is the same successful formula adopted by
airlines such as GF and QR who use the A321s (direct competitor to the B739ER)
instead of A320s (direct competitor to the B738) on higher volume, lower
yielding routes to the ISC region due to the better performance economics that
the bigger planes provide. Etihad too has followed suit by exchanging an order
of 7 A320s for A321s in 2012 which was announced in Q3 2012.
Yes ordering B739ERs might
require a fresh injection of large capital from the Omani Govt however this too
can be off set if WY negotiate with Boeing to exchange B787-800s that it has on
order for B 737-900ERs. Three B739ERs can be obtained for the price of 1
B787-800 of which WY has ordered 6 in total.
Manila/Jakarta/Casablanca plan
Now as far as the plan is
concerned with regards to launching MNL, CGK and CMN, yes there is good
potential for the first 2 mentioned (MNL/CGK) but none for CMN because it’s a
highly seasonal market and year round S/F are not high enough to warrant a new
GCC carrier entering the market segment. In addition, WY does not have a large
SE Asian market to adequately feed CMN which QR/EK/EY do.
As for MNL and CGK, WY needs to
first reconfigure at least 2 of its A333s into a high density J/Y configuration
in order to make these routes work as the current premium heavy configuration
of its A330-200 + A330-300 fleet are not suitable at all for either routes. A maximum
of daily service is required for MNL and CGK each to be operated nonstop from
MCT preferably using an A333 configured to hold 18J (sleeper seats in order to
main product consistency across its wide bodied fleet) plus 296Y. Both CGK and
MNL will provide a decent amount of high yielding O&D traffic bound to MCT
as well as help majorly feed its multiple daily GCC/KSA bound services. MNL too
at times can help contribute passengers on services to ZRH, LHR, FRA, CDG, MUC
and MXP for which there is high demand year round.
IAG the owner of British Airways and Iberia has officially announced that it has exercised
options that it held with Boeing for the purchase of 18 additional Boeing 787s
for British Airways. The exact breakdown of the sub models is yet to be known
however it is expected a majority to be for the larger B789 version. IAG too
disclosed that it has also secured additional delivery slots during the later
part of the decade for Iberia as it will use the B787s to gradually replace IB’s
fleet of A332s and A343s in particular.
Alitalia has officially announced that it will be
further increasing its services to AUH-Abu Dhabi, UAE in cooperation with
Etihad as both the airlines look to slowly tap into the high demand FCO-Asia
market segment. AZ’s current schedule of 4 weekly flights will be increased to
5 weekly nonstop using an A330-200 effective 11JUN.
Japan Airlines
is seriously contemplating placing an order with Airbus for 20 of its largest
A350-1000X (according to Japanese media) as the airline’s CEO announced that it
was high time the carrier moved away from its total reliance on having all
Boeing fleet. JAL would use the A351s to replace B772ER and B773ER on services
to USA and Europe.
Source: http://www.reuters.com/article/2013/03/24/us-jal-airbus-purchase-idUSBRE92N02U20130324
Lufthansa has
officially announced that it is seriously studying the potential of creating a
new long haul low cost airline as the carrier finally acknowledges that it has
gradually losing a lot of market share bound to the Asia-Pacific and Indian
Subcontinent region to the Middle Eastern carriers which need to be tackled. No
hints of fleet type nor intended destinations nor possible aircraft
configurations being mentioned.
Source: http://www.bloomberg.com/news/2013-03-25/lufthansa-considers-low-cost-carrier-targeting-asian.html
Analysis:
There
are two things one feels that LH
can do here instead of creating a whole new airline for this very purpose:
1. Order a bunch of B777-300ERs (which it already has done for SWISS) and
configure them in more or less the same manner as Air Canada has for high
density long haul operations i.e. 430-440 seats in a J / Y class configuration.
Routes that can support such a high density layout include BKK, MIA, PEK, ICN, DEL, KUL, JNB, EZE and GIG.
2. If ordering a dedicated fleet of B77Ws (over a dozen required minimum) for
this type of service is too capital intensive, then it could look into
reconfiguring many of its B744s into a high density 2 class layout seating
470-480 passengers. The upper deck can be exclusively for business class and
the lower deck for economy passengers only.
Kenya Airways has
officially announced that it shall be launching new nonstop services to Abu
Dhabi, UAE effective 01JUL13 as the carrier enters into a strategic cooperation
pact with Etihad which will involve code sharing beyond AUH to Australia and
GCC destinations mainly. KQ will operate 3 times per week nonstop to AUH using
a B738 alongside EY’s daily A320 service with the below mentioned schedule:
Days: MON/WED/FRI
KQ 316 Dep NBO1925 Arr AUH 0105+1
KQ 317 Dep AUH 0205 Arr NBO 0555
In addition to the above, KQ too
disclosed that the first 2 routes to be operated with its new Boeing 777-300ER
fleet shall be LHR and AMS effective 04NOV13.
Ethiopian Airlines has officially announced that due to high
demand for both O&D and intra-Africa traffic on board its Muscat flights,
it will be increasing frequencies on this sector. Services will go up from 4 to
5 weekly nonstop flights in code share with Oman Air using a B737-700.
Analysis:
Oman
Air need to launch their own MCT-ADD flights at a similar frequency level of
ET. The GCC-ADD market segments are very big in volume and much higher yielding
than DAR/NBO. In addition, WY can attract feeder traffic from ADD at better
yields to India, BKK, KUL and KHI than it currently does so out of Europe. An
initial 4 weekly B738 operated service would work out just fine as long as it
ensures that UAE, KWI, DOH, BAH, BOM, BKK and DEL in particular are connected
nicely in both directions.
Wizz Air one
of Europe’s largest low cost airlines has officially announced that it will
entering the Middle East market fray by launching 4 new routes to Dubai’s new
Al Maktoum International Airport effective 28OCT13. The main highlights are as
follows:
*All flights to be operated
nonstop using an A320
OTP/DXB – new 3 weekly frequencies
BUD/DXB – new 4 weekly frequencies
IEV/DXB – new 4 weekly frequencies
SOF/DXB – new 3 weekly frequencies
India and Singapore Governments have recently concluded signing an amended
air bilateral accord giving increased access to airlines of both countries to
boost flights as air travel demand has risen considerably between both countries
since 2010. According to the new accord, the weekly capacity can be increased
on both sides from the current 23,000 seats to 29,000 effective IATA Summer 2014.
Analysis:
In
2012, the demand between India and SIN was as follows:
BOM - 530,000
MAA - 515,000
DEL - 385,000
BLR - 195,000
CCU - 90,000
HYD - 60,000
COK - 50,000
TRV - 50,000
AMD - 20,000
Taking this into account, DEL-SIN is already a double
daily B777 operated service by SQ
where as MAA
is only a daily A333. MAA
should be the one that should be really increased to double daily A333 at least
as the market demand is definitely there along with cargo. In addition to
O&D, SQ would also get a good chunk of transfer traffic from MAA to KUL,
China, HKG and Australia where there is good sized demand to tap into
especially for KUL !
Fly Dubai has
officially announced a major expansion plan for its route network for the
current Summer 2013 season of which the main highlights are as follows:
Dushanbe – new 2 weekly nonstop service
Osh - new 2 weekly nonstop service
Colombo – frequencies increased from daily to 10
weekly
5 new destinations in Russia to be
launched from 20SEP13 which are including Rostov, Volgograd, Dniepropetrovsk,
Odessa and Krasnodar all operated twice a week each respectively
Qatar Airways has officially announced that it shall be launching 2 new destinations in Iraq from
June 2013 as the carrier looks to take advantage of the rapid growth of
business and immigrant traffic that is flowing to/from the country. The
two new destinations are Basra and Sulaimaniyah which shall be flown 4 times per week each respectively using A320s. The flight schedules are as follows:
BSR - effective 03JUN on MON/WED/FRI/SUN
QR 448 Dep DOH 0725 Arr BSR 0905
QR 449 Dep BSR 1005 Arr DOH 1145
*Above schedule offers excellent 2 way connections to all of QR's European and GCC network in particular
ISU - effective 20AUG on MON/TUE/FRI/SAT
QR 438 Dep DOH 1335 Arr ISU 1600
QR 439 Dep ISU 1700 Arr DOH 1915
*Above schedule connects both ways to SE Asia, GCC and ISC only
In addition, QR too revealed that it shall be increasing flights to CDG-Paris effective 30MAY13
from the current 18 weekly to triple daily nonstop using a 310 seater
A340-600. Flights shall be departing DOH at 0145/0825/1355 and departing
CDG at 1120/1600/2225 respectively.
Comments:
QR's entry into BSR will hurt EY the most because of its ability to
offer convenient 2 way connections to/from Europe which EY cant since it
does not have a 1300-1400 EU departure hub wave bank out of AUH which
QR has out of DOH.
Turkish Airlines
has announced many changes to its medium and long haul route network
for the IATA Summer and Winter 2013 seasons of which the main highlights
are as follows:
MLE/CMB - frequencies increased from 5 weekly to daily using an A332
LOS - capacity increased from daily B739s to daily A332s
IAH - frequencies increased from 4 to 6 weekly nonstop flights using a B773ER
GRU/EZE - frequencies increased from 4 weekly to daily using a B773ER
ICN - capacity increased from daily A343s to daily B77Ws
DAR - frequencies increased from 5 weekly to daily
In addition to the above, TK also confirmed that it has placed its largest ever order in history with Airbus for 117 new Airbus planes
to be delivered over the next decade. The order breakdown consists of 4
A320s + 25 A321s + 53 A321NEOs + 25 options on the latter.
PIA of Pakistan has officially announced that due to increasing demand for its direct flights into Milan, Italy in particular from North Pakistan, it shall be increasing frequencies to the city along
with its tagged on destination CDG-Paris effective 09JUN13. From this
date onwards, frequencies will rise to 3 times per week operated with
Boeing 777-300ERs in the following manner:
Twice a week ISB-MXP-CDG-ISB and once a week LHE-MXP-CDG-LHE
In 2012, a total of 81,000 passengers flew combined between MXP and LHE/ISB compared to 68,000 in 2010 !
Lufthansa has
officially announced that it has placed the largest ever combined order
(worth US$ 11.6 billion) in its company history with Boeing and Airbus
recently with the firm purchase of 100+ aircraft from both
manufacturers. The breakdown of the order is as follows:
6 Boeing 777-300ERs for SWISS
2 Airbus A 380-800s
35 Airbus A 321NEOs
35 Airbus A320NEOs
30 Airbus A320CEOs
The
6 B77Ws ordered for LX will be in time increased to a minimum order of
15 aircraft as they shall be replacing in due course LX's entire A343
fleet.
Malaysia Airlines has officially announced due to booming passenger and cargo demand for its Dhaka bound services, it shall be launching an additional second daily nonstop service on
this route effective 01APR13. In total, all 14 weekly services will be
flown with a mixture of Boeing 777-200ERs (11 weekly) and Airbus A
330-300s (3 weekly). In 2012, a total of 285,000 passengers flew between
KUL and DAC. Flights will depart KUL at 0940 and 1850 daily and arrive
back by 0335 and 1825.
Eva Air of Taiwan has revealed that due to increasing demand for its Vienna bound services operated currently via Bangkok, it will be increasing
its frequencies on this sector effective 02SEP13. Currently, 3 weekly
flights are operated on the TPE-BKK-VIE sector with an A330-200 with 5th
freedom traffic rights available on the BKK-VIE-BKK portion. These
shall in turn be increased to 4 times per week from September using the
same aircraft type.
Cathay Pacific has officially disclosed that will be increasing its services to LAX-Los Angeles, USA during the IATA W13 season by maintaining its S13 frequency level of 20 weekly nonstop flights using a Boeing 777-300ER. Traditionally
in winter due to seasonal demand patterns, CX reduces LAX from 20 to 17
times per week but this year due to the rapid retirement of their B744
passenger fleet as well as the need to remain competitive from a seats
capacity stand point across this vital trans-pacific sector, it will not
be undertaking the reduced frequency approach.
Asiana Airlines of South Korea has officially announced many changes to its route network for the IATA S13 season of which the main highlights are as follows:
ORD - frequencies increased from 4 weekly to daily effective 22JUL using a B772ER
SEA - frequencies increased from 5 weekly to daily effective 22MAY using an A333
HKT - frequencies increased from 6 weekly to daily using a B763ER
CGK - new daily nonstop services to be launched with an A333 effective 21JUL
DPS - new 2 weekly nonstop services to be launched with a B763ER effective 25JUL
Lion Air of Indonesia
officially announced last week that it has placed Asia's largest ever
aircraft order totaling over US$24 billion for the purchase of 234
Airbus family aircraft in a remarkable shift of loyalty as the airline
currently has a fleet of over 100+ Boeing 737-900ERs on order and in
service. Lion also has another 200 + B739MAXs on order with Boeing and
must have received a heavily discounted offer from Airbus that could not
have been passed up. The breakdown of the new order is as follows:
65 A321NEOs
109 A320NEOs
60 A320CEOs
British Airways has officially announced that the first 2 long haul routes that it will be operating using its newly delivered fleet of Airbus A380s shall be Los Angeles and Hong Kong.
Both routes will receive one daily A380 operated service each from
15OCT (LAX) and 15NOV (HKG) each respectively. BA's A380s seat a total
of 469 passengers in a 3 class configuration with the premium cabin
having 14 first class + 97 business class seats. In addition, BA too
confirmed that due to on going high demand especially in the front end,
it will be increasing its services to PVG-Shanghai, China effective
31MAR from 6 weekly to daily nonstop flights using a mixture of Boeing
777-300ERs (5 weekly) and Boeing 777-200ERs (twice a week).
Philippine Airlines has officially announced that it shall be making its return to the Middle East with a big bang effective October 2013
as the carrier looks to take back its share of the high volume labor
traffic demand that currently all the GCC carriers (except Oman Air)
reap benefits of on their Manila bound services. PAL confirmed that its
first new Middle East route shall be Abu Dhabi operated nonstop on a daily basis from Manila effective 01OCT13 with the below mentioned schedule:
Days: Daily A333
PR 656 Dep MNL 1625 Arr AUH 2145
PR 657 Dep AUH 2315 Arr MNL 1320
Its
second Middle East route which was announced by the Philippine's
Ambassador to Qatar last week, shall be Manila-Doha nonstop using an
A333 as well but operated 6 times per week only nonstop effective Oct
2013.
PAL's President Mr Ramon also confirmed saying that now that Manila
airport as passed the ICAO audit and is going to get back its Category 1
status, planned services to ORD and JFK as well as upgrading its
product on LAX from B744 to its new B773ERs shall be taking place once
all the paper work is cleared.
Analysis:
PAL's entry into AUH will hurt the
most CX's performance on this route which is already operating at a
reduced frequency of 3 times per week as the carrier is heavily
dependent on the feed it generates to MNL on its AUH bound flights.
Their market share will suffer the most followed by QR and GF. With
regards to market size potential, the AUH-MNL segment in 2012 saw 95,000
passengers being transported where as in comparison, DXB-MNL had
580,000!
PAL needs to get into the KWI market as soon as possible as direct
competition on this route is far less versus the other GCC cities.
KWI-MNL market size is approximately 130,000 passengers annually and no
one currently offers nonstop flights as KU operates 6 times per week to
MNL via BKK using an A343 hence the capacity of the airplane is split in
half to support both routes.
Emirates has officially revealed that it will be increasing capacity on its popular Dubai-Sydney route by
making both its double daily nonstop flights operate with a 517 seater
Airbus A380 effective 01JUN13. Currently, EK operates a double daily
B773ER service to SYD (one nonstop and one via BKK) + one daily A380.
The flight receiving the upgrade is EK 414/415 which departs DXB at 0225
and departs SYD at 0600 respectively.
Air China has officially announced that it has placed a size able order with Boeing of which the break down is as follows:
8 Boeing 777-200LR Freighters
1 Boeing 777-300ER
2 additional Boeing 747-800s (passenger version...total order now stands at 7 for this type)
20 Boeing 737-800s
In
exchange for this order, CA sold back to Boeing seven of its B744
converted freighters and also enforced in its purchase deal the option
of converting 4 B737-800s for 1 Boeing 777-300ER in the future if the
need arises.
Austrian Airlines has officially announced few changes to its long haul route network for the upcoming IATA S13
season of which the main highlights are as follows:
DXB - frequencies reduced from daily to 5 weekly
YYZ - frequencies reduced from daily to 6 weekly
DEL - frequencies reduced from 6 to 5 weekly
PEK - frequencies reduced from daily to 5 weekly
The state of Qatar has officially announced that it has signed with Pakistan a new bilateral giving
it access to 24 more weekly flights to the country from the current 17
that it operates. In total, 41 weekly services can be operated by Qatar Airways to PAK from the on set of the IATA Summer 2013 season in the following manner:
KHI - can be increased from daily to double daily
LHE and ISB - can be increased from 4 weekly to daily each respectively
PEW - can be increased from 2 to 4 weekly
SKT and MUX - two new cities can be flown up to a maximum of 9 times per week combined
In addition, QR has announced major frequency cut backs across its
entire long haul network which are published till end May but are likely
to drag on till mid June at least due to the currently grounding of its
Boeing 787 fleet. The main highlights are as follows:
ORD - frequencies reduced from daily to 3 weekly
SIN - frequencies reduced from double daily to daily
HKG - frequencies reduced from double daily to daily
KUL - frequencies reduced from triple daily to double daily
LHR - frequencies reduced from 5 to 4 daily
Comments:
The
additional North Pakistan flights of QR are expected to be the same as
per current schedule however for the double daily KHI service if
launched, the additional flight should depart DOH at 1700-1730 so that
the carrier can diversify its passenger portfolio on its KHI route by
also focusing on carrying KSA bound traffic which it doesnt do so
currently. By having a 1700-1730 departure out of DOH and an arrival
back by 2330, it would connect beautifully in both directions to all of
QR's KSA destinations plus also be a popular departure time for high
yielding premium passengers originating from KHI bound to Europe
(0200-0300 hub wave) who currently like the EK 603 timings (2230 dep
KHI)
China Eastern Airlines based out of PVG-Shanghai has officially announced that it will be further increasing capacity on its popular YVR-Vancouver bound services
from July 2013 onwards. In Summer 2012, MU operated 11 times per week
nonstop using an A332, however from 20JUL13 onwards, these shall be
further increased to double daily nonstop using the same aircraft type
(A332).
United Airlines
has officially announced that due to it moving its entire Boeing
747-400 operations and maintenance base to SFO airport, its services
from ORD-Chicago to Hong Kong currently operated nonstop daily using a
B744 shall be downgraded from the on set of the IATA S13 season to daily
Boeing 777-200ER. This represents a total of 216 seats on the ORD-HKG
sector for UA on a daily round trip basis as its B744s seat 374 pax
where as its B772ERs seat 266 in a 3 class layout.
