27MAR edition

Emirates has announced major expansion plans for its long haul network for the upcoming IATA S15 season of which the main highlights are as follows:

MCO – new daily nonstop flights effective 01SEP using a B77L

NBO – capacity increased from daily A332 + daily B77W to double daily B77W

DPS – new daily nonstop flights effective 01JUN using a B77W

SEA – frequencies increased from daily to double daily using a B777 effective July

DUS – capacity increased to daily A380 + daily B77W effective 01JUL

MAD – capacity increased to daily A380 + daily B77W effective 01AUG

ORD – capacity increased from daily B77L to daily B77W effective May

CCJ – frequencies increased from 11 to 12 weekly nonstop flights using a B777

PER – frequencies reduced from triple daily to double daily i.e. daily A380 + daily B77W

JFK – capacity increased to four daily A380s with MXP-JFK too being upgraded to a daily A380

Comments:

A big surprise pulled by EK by announcing new daily services to Orlando (MCO) as one cannot see any commercial rationale justifying a daily service on a year round nonstop basis using a 260 seater B777-200LR. It would have been better if EK flew to MCO via an EU airport that has high year round demand to the city such as LGW/MAN/AMS/CDG/Germany as then it would also attract additional source of revenue via 5^th freedom pax + cargo.

Hainan Airlines based out of Beijing, China has disclosed that it will be purchasing 30 additional Boeing 787s as the carrier has been highly impressed with the aircraft performance on its trans-pacific services to USA. Currently, it has 13 B788s in its fleet seating 213 pax (36J + 177Y) however the new order is for the larger B787-900 version only which is expected to seat 270 passengers in two classes. It is expected that this order will be a catalyst to replace the airline’s 17 strong A330 fleet (8 A332s + 9 A333s).

Source: http://www.scmp.com/business/companies/article/1747360/hainan-airlines-buy-30-boeing-787-dreamliners-us77-billion

Ethiopian Airlines CEO has disclosed that the airline is in talks with Boeing to purchase 6 of the “overweight terrible teens” Boeing 787-800s at a steep discounted price as the carrier has been very impressed with how this aircraft type has performed on its long/medium haul routes to Asia in particular. If this purchase gets confirmed, it will result in ET owning a total of 19 B787-800s! In addition, ET confirmed that it will be realigning its strategy in Sao Paulo in the following manner effective 27APR:

·         Flights will be flown nonstop using a B788 rather than one stop via LFW

·         Frequencies increased from two to three times per week

·         Flight reschedule retimed to attract 6^th freedom transfer traffic originating from Southeast Asia, India, DXB, Kenya and Saudi Arabia

Days: 1/3/6

ET 506 Dep ADD 0845 Arr GRU 1445

ET 507 Dep GRU 0230 Arr ADD 2030

Lastly, ET has confirmed that it has been granted additional access bilaterally into India hence will be in turn launching an additional second daily nonstop service from ADD to BOM effective April 2015. 

The schedule is as follows:

ET 640 Dep ADD 1540 Arr BOM 2315

ET 641 Dep BOM 0350 Arr ADD 0530

Comments:

The new second daily ET BOM flight is most likely going to be a failure due to the below mentioned reasons:

1. You do not launch a new daily long haul flight by giving the market 2 months notice only and that too in low season. Airlines such as EK/QR can do so because they have many more market segments that can adequately feed a new flight across various continents something which ET does not enjoy the luxury of !

2. You do not launch a new daily long haul flight when as a network carrier, you don’t even have 5 destinations that would connect to this new service in both directions via your main hub. From what I have seen, only KRT + NBO connect. Not even DAR/EBB connect in both directions !!! There is no way this new flight can be sustained on a daily basis using a B787.

3. Small O&D market size between ADD-BOM (20,000 pax in 2014) is one third the size of NBO-BOM (60,000 pax) hence this is totally un-warranted.

Eva Air of Taiwan has announced a major fleet purchase order that will fuel its expansion into the next decade. The main highlights are as follows:

·         10 B787-1000Xs to replace its A330 fleet

·         5 B777Fs to replace its entire B744F fleet (8 units)

·         5 A321NEOs

Qatar Airways has officially announced major capacity expansion plans for the upcoming IATA S15 season of which the main highlights are as follows:

BLR – capacity increased from daily B787 to daily B77W effective 01AUG

SIN – frequencies increased from double to triple daily effective JUN using an A359

CMB – capacity increased to double daily B77W + daily A321 effective 01APR

MIA – capacity increased to 5 weekly B77Ws effective 02MAY

DPS – capacity increased to daily B77W effective 01APR

CPT – frequencies increased from 5 weekly to daily nonstop flights using a B787 effective OCT

ZNZ – new 5 weekly flights to be launched via JRO using an A320 effective 01JUL

CGK – frequencies increased from 18 weekly to triple daily using a B77W daily + double daily A330

Austrian Airlines has revealed that it will be launching new nonstop flights to Miami as the carrier looks to take advantage of rapidly growing demand from Europe to South Florida. OS will be operating 5 weekly nonstop flights using a B772ER with the below mentioned schedule:

OS 097 Dep VIE 0955 Arr MIA 1520

OS 098 Dep MIA 1710 Arr VIE 0850+1

Sri Lankan Airlines has officially filed for its return to Australia after a gap of 14 years as the carrier looks to tap into the mass Sri Lankan + South Indian diaspora that lives down under. UL has applied to serve Melbourne nonstop from Colombo four times per week using its brand new A330-300 effective 01NOV15 with the below schedule:

UL 601 Dep CMB 0100 Arr MEL 1600

UL 602 Dep MEL 1800 Arr CMB 2300

In Australia, a majority of the Sinhalese/Tamil diaspora (totaling 150,000+) reside in Victoria state of which Melbourne is the biggest city.

Etihad Airways has disclosed many capacity changes to its network for S15 season of which the main highlights are as follows:

ISB – capacity increased to double daily A321s

MAD – frequencies reduced from daily to 4 weekly A332s

NBO - capacity increased to from daily A320 to daily A321

MAA – capacity increased to double daily A321s

HYD – capacity increased to daily A346 + daily A320

IKA – frequencies increased from 3 weekly to daily using an A320

JFK – new daily A380 flight announced for EY 103/101 rotation (early morning arrival into JFK)

COK - capacity increased to double daily A321s

TRV – capacity increased from daily A320 to daily A321

Cathay Pacific has disclosed it will be launching a new long haul route in 2015 as the carrier looks to tap into high yielding niche markets with minimal direct access to Asia. The new route revealed by CX is Dusseldorf in Germany that will be flown 4 times per week using a B777-300ER effective 01SEP15. In addition, other capacity changes revealed by CX were as follows:

DME – all 3 weekly flights suspended effective June

SFO – frequencies increased from double daily to 17 weekly nonstop flights using a B77W exclusively effective 11JUN

YYZ – frequencies increased from 10 to 13 weekly nonstop flights using a B77W effective 27JUL

Kuwait Airways has officially revealed a major expansion plan of its medium haul route network from IATA Summer 2015 onwards as the carrier looks to increase aircraft utilization as well as expand with additional deliveries of new A320s in particular. The main highlights are as follows:

MUC - new 3 weekly nonstop flights effective 16JUL using an A343 with below schedule

Days 2/4/6

KU 173 Dep KWI 0745 Arr MUC 1255
KU 174 Dep MUC 1425 Arr KWI 2100

COK – frequencies increased from daily to double daily using an A320 for both flights with below schedule

KU 351 Dep KWI 2045 Arr COK 0430+1

KU 352 Dep COK 0550 Arr KWI 0815

KU 349 Dep KWI 2230 Arr COK 0615+1

KU 350 Dep COK 0715 Arr KWI 0940

IST - new daily nonstop flights effective 13JUL using an A320 with below schedule

KU 153 Dep KWI 2250 Arr IST 0310+1
KU 154 Dep IST 0415 Arr KWI 0800

BLR - new 3 weekly nonstop flights effective 01SEP using an A320

Days 2/4/7

KU 353 Dep KWI 2100 Arr BLR 0430+1
KU 354 Dep BLR 0530 Arr KWI 0755

AMD -  new 3 weekly nonstop flights effective 01SEP using an A320

Days 2/3/6

KU 345 Dep KWI 2245 Arr AMD 0505+1
KU 346 Dep AMD 0605 Arr KWI 0730

VIE - new 3 weekly nonstop flights effective 21JUL using an A320

Days 2/4/7

KU 177 Dep KWI 0120 Arr VIE 0605
KU 178 Dep VIE 1040 Arr KWI 1700

Analysis:

It is very pleasing to see KU once again growing its medium haul route network which has remained stagnant in terms of growth for over a decade now. However there are many concerns regarding the above expansion plan:

1. Munich has an O&D of 34,000 pax per annum with a majority flying in the summer. However like its competitors i.e. QR/EY/EK, KU too is a network carrier relying on more transit traffic out of Europe rather than O&D. Taking this into account, the schedule of KU 173/174 is guaranteed to fail because it only connects BKK + MNL in both directions via KWI and those flights are already full year round hence getting access to seats on BKK-MNL will be very tough. Operating a gas guzzling A343 too on a new route with such a schedule is also an extremely risky proposition due to the high operational costs involved.

2. The same applies to VIE which has an O&D demand of 16,000 pax per annum to/from KWI + sees summer seasonal demand primarily. The schedule for VIE too does not offer convenient connections via KWI in both directions to ANY destination on KU's network. Instead, KWI-VIE-KWI should be re-timed to be as below

KU 177 Dep KWI 0900 Arr VIE 1345
KU 178 Dep VIE 1440 Arr KWI 2100 

The above proposed schedule at least allows in both directions India, Pakistan and BKK/MNL/KUL/CGK to be connected in both directions via KWI thus capable of supplying additional feeder traffic.

3. KWI-IST though has a large O&D traffic demand year round i.e. 130,000 pax in 2014 but so does DXB/DOH/AUH/BAH in greater or equal numbers. None of these carriers including TK are dependent on O&D traffic mainly on this route and rely a lot on connecting traffic bound to Asia. KU's schedule for IST only connects DXB, BAH and JED in both directions via KWI in addition the timings proposed are very un-attractive for O&D traffic as with a 0300am arrival into IST it means an extra night's hotel needs to be paid for ! The main direct competition is TK four daily + daily Jazeera (SAW). Once again to ensure good year round S/F, the best schedule for KU at IST would have been below

KU 153 Dep KWI 0950 Arr IST 1410

KU 154 Dep IST 1510 Arr KWI 1855

If slots at IST for these timings cannot be secured then slots at SAW should be obtained. The above proposed schedule allows all of KU's Asia routes to be connected in both directions via KWI to Istanbul !

4. With regards to its India bound expansion to AMD and BLR, it has and does not have merit. To begin with, KU needs to first consolidate its India bound services especially on routes that it does not fly daily i.e. MAA + COK + TRV as these three routes see massive year round O&D demand to KWI + GCC

KWI-MAA - 240,000 pax

KWI-COK - 185,000 pax

KWI-TRV - 80,000 pax

KWI-MAA is flown by KU only four times per week nonstop using an A300-600R (AB6) which is a shock because it has higher O&D demand to KWI versus BOM + DEL ! The first thing that needs to be done is make MAA-KWI daily nonstop followed by COK and then consider expanding other services. BLR is a poor choice of a new Indian route as demand to GCC is not as high as CCJ nor HYD which should have been given higher preference! 

5. Frequency increase of KWI-COK flights from daily to double daily from April 2015 using an A320 though a good move, from a scheduling, sales and aircraft utilization perspective, it looks very weird as explained below:

KU 351 Dep KWI 2045 Arr COK 0430+1

KU 352 Dep COK 0550 Arr KWI 0815

KU 349 Dep KWI 2230 Arr COK 0615+1

KU 350 Dep COK 0715 Arr KWI 0940

You cannot have two KWI-COK-COK flights departing within 1:45 hours of each other as it is not a business route unlike KWI-DXB for example. This is purely a VFR/labor market segment route and in order to better utilize the A320, the schedule I would suggest is nicely spread out and more convenient for both O&D + transit traffic:

KU 351 Dep KWI 2045 Arr COK 0430+1
KU 352 Dep COK 0515 Arr KWI 0750
KU 349 Dep KWI 0845 Arr COK 1630
KU 350 Dep COK 1715 Arr KWI 1940

With my above proposed schedule, you can use one dedicated A320 to operate both KWI-COK-KWI on a daily basis each respectively. You have a nice spread of morning + evening departure timings as with the 0845 KWI departure it will allow KU in the future to create a new Indian subcontinent departure hub wave bank between 0830-1000. In addition, if KU has a spare A320 at night, it should instead look at either increasing KWI-MAA from 4 weekly to daily or launching new 4 weekly KWI-HYD nonstop flights as last year 60,000 passengers alone flew KWI-HYD-KWI + increase KWI-LHE-KWI from 3 to 5 weekly A320s.