Air France

Air France has released details of its Winter 2008/09 network which sees changes in particular to its long haul destinations. The main highlights are as follows :

MAA - frequencies increased from 4 to 5 weekly A 343s.

IAD - capacity increased to 2 daily B 772ERs (currently daily A 332 + daily B 772ER)

EZE - capacity increased from daily B 772ER to daily B 773ER.

NRT - capacity increased to double daily B 773ERs + 6 weekly A 332.

PEK - capacity increased to 10 weekly B 773ERs.

PVG - frequencies increased to daily B 773ER + daily B 772ER.

Royal Jordanian

Royal Jordanian will be taking delivery of 2 newly ordered Airbus A 319s which will be used on the following routes :

DEL - previously flown 3 times a week with an A 342, however effective April 2nd, the service will increase to 6 weekly A 319s.

BAH & DMM - both routes to be increased from 4 weekly to daily effective May.

KLM

KLM will be making capacity adjustments with regards to its India operations for the upcoming summer 2008 season. Flights to HYD-Hyderabad will increase from 4 to 5 weekly MD 11s and DEL-Delhi will see a daily B 772ER operation until June 15th. From that date onwards, it will switch to a daily MD 11.

Apart from India, KLM has also announced that it will be upgrading capacity to MNL-Manila by deploying a Boeing 777-300ER on the route flown nonstop from AMS as it seeks to cash in by being the only European airline to offer nonstop flights from the continent to MNL because of Lufthansa withdrawing their MNL service shortly. KL will fly to MNL 3 times a week nonstop from AMS with the B 773ER on WED/FRI/SUN.

Singapore Airlines

Singapore Airlines has announced that due to high load factors being witnessed on its Mumbai bound flights, it will be upgrading the in-flight product on this key route by deploying the Boeing 777-300ER which has their new business class product on board for SQ 423/24.

The J class product on this aircraft type has a seat width of 30 inches (the biggest in the world) and a seat pitch of 51 inches. Besides upgrading the in-flight product, it will be upgrading capacity too by sending a B 773A on its second daily SQ 421/22 flight instead of a B 772A.

Etihad Airways

Etihad Airways will be increasing its flights to Dublin-DUB by adding an additional weekly flight thus making the service a daily operation using an Airbus A 330-200. This will come into effect from 30th March 08. EY's reported loads on their DUB flight are 80% in economy and 73% in business.

TAM

TAM of Brazil has officially signed a contract with Airbus for an order worth US$ 6.9 billion. The order comprises of 46 aircraft i.e. 22 A 358 / A 359s + 4 A 332s + 4 A 320s.

Air Europa

Spanish airline i.e. Air Europa pulled off a major coup by cancelling its original order for 10 Airbus A 350-800s and instead sealing a deal with Boeing for 16 Boeing 787-800s (8 firm + 8 options) earlier on in the week. The airline will use the jets on nonstop flights to Argentina, Mexico and the Dominican Republic.

China Airlines

China Airlines of Taiwan has officially confirmed placing a multi billion dollar order with Airbus for 20 Airbus A 350-900s (14 firm + 6 options). These aircraft will be used to entirely replace its A 343 fleet on long haul flights to USA and Europe + to cater for further expansion in North America in particular. CI also revealed that its B 744 fleet will be undergoing extensive interior refurbishment hence it will not be seeking to replace them for at least another 4 years.

British Airways

British Airways has announced that it will be flying new 5 weekly flights to HYD-Hyderabad, India effective October 27th 2008. All flights will be flown using a Boeing 777-200ER nonstop from Heathrow.

Flight timings are as follows :

BA 277 Dep LHR 1330 Arr HYD 0425+1

BA 276 Dep HYD 0715 Arr LHR 1300

Analysis :

An excellent strategic move by BA to gain a strong foothold in this niche market segment before others start flying there. They will have a lucurative monopoly on this sector as no other airline flies to HYD nonstop from LHR. Currently, only LH & KLM offer nonstop flights from Europe to HYD but with BA's B 772ERs having a superior in-flight product in all cabin classes compared to LHs A 343s & KLs MD 11s, one can expect them to take a decent chunk of the HYD-UK & HYD-USA/YYZ market share away from KLM & LH.

Cathay Pacific

Cathay Pacific & Dragonair have announced that they will be increasing their flights to India by adding 27 weekly flights to the country all flown nonstop from HKG. The main highlights are as follows :

BOM - increased from 4 weekly to 10 weekly flights i.e. 3 weekly terminators HKG-BOM-HKG using a 2 class A 333 + 4 weekly HKG-BKK-BOM-DXB using a 2 class B 773A + 3 weekly HKG-BOM-DXB using a 2 class B 773A. CX will now fly BOM-DXB-BOM daily with full 5th freedom traffic rights using a 2 class 410 seater B 773A. This flight increase comes into effect from 31st March.

DEL - increased from 4 weekly to double daily A 333s effective 30th March.

BLR - new daily nonstop service using an A 333 of Dragonair effective 1st May.

MAA - new 4 weekly nonstop service using an A 333 effective 1st June.

Analysis :

Many of you upon reading this might be thinking why is CX sending KA aircraft to fly the all important HKG-BLR route when it could have instead used KA's A 333 dedicated for BLR for the second daily DEL flight. One should not underestimate the business acumen of CX's management board as they are astute students of the game. FYI, KA's new J class product on board its A 333s seats 30 having a seat pitch of 63 inches and a seat width of 27 inches. Yes 27 inches which means that its J class seats are wider than most airlines first class seats!

All of CX's new flights to India connect very well in both directions with their Japan, China, LAX, SFO, YVR and TPE flights in both directions which is essential for the routes to be profitable.

Another very important element which AI, 9W, EK, IT & IC have to worry about is that CX will be flying daily the high density BOM-DXB-BOM route with a 2 class 410 seater B 777-300A. By using such a big aircraft (capacity & cargo wise) for this key route, it will definitely give few headaches to the above mentioned airlines for market share control purposes.

Thai Airways

Thai Airways's President has officially told the media yesterday that his airline has finalized a deal to introduce 2 new aircraft types into its fleet. TG will be leasing 14 Boeing 787-800s + 20 new Airbus A 321-200s which will be used to replace its entire fleet of Boeing 737-400s and Airbus A 300-600Rs from 2012 onwards. The B 788s will be delivered to the airline from 2012 onwards and many insiders indicate that these planes are coming from ILFC.

Gulf Air

Gulf Air has signed a MOU (Memorandum Of Understanding) with Boeing over the weekend for the purchase of 24 Boeing 787-800s + with Airbus for 8 A 320s. With regards to the Boeing order, 16 are firm orders whilst 8 are options. Boeing has informed GF that first delivery will be in 2016. However, GF is talking to leasing companies such as ALAFCO of Kuwait to lease out their fleet of B 788s from 2010-11 onwards until theirs are delivered from Boeing.

Source : http://www.flightglobal.com/articles/2008/01/14/220804/gulf-air-ordering-787s-for-2016-but-considering-earlier-lease.html

Analysis :

Finally the much hyped order by GF is revealed to the public. Its a good move to stick to one airplane type for premium medium/long haul flights i.e. B 787 and one for short haul regional flights i.e. A 320 as that keeps operational and maintainance costs down.

However, what most people cannot phantom is why the B 789 wasnt ordered as you cannot replace a 3 class 270 seater A 343 with a 200 seater B 788! The answer to that is simple. BAH-Bahrain is a city that sees very little O&D traffic volume from all over the world unlike its neighbours such as AUH, DXB, RUH & JED. Hence, since GF's flights will be filled by 95% 6th freedom / transit traffic, it only makes sense to be safe by ordering medium sized aircraft rather than take the risky ambitious route by ordering 300 seater planes just for prestige purposes.

Yes only a handful of GF's B 788s will see a 3 class layout i.e. approximately 6 aircraft used for LHR/CDG/BOM/FRA/JED flights where as the remaining ones would be configured to accomodate 230 pax in a 2 class layout for high density Indian subcontinent & Far East flights.

GF's business model has now changed where by they are focusing on increasing frequencies to key markets such as SYZ, MHD, LHR, BOM etc rather than increase capacity. In this way, by offering more frequencies to key markets, it hopes to attract the business traveller i.e. high yielding pax more often than not.

Kingfisher Airlines

Kingfisher Airlines is looking to firm up the options it had on 5 additional A 380s which would then increase its order to 15 aircraft. One of the main reasons for converting the options into confirmed orders is the fact that the cost of the aircraft would work out cheaper than its current selling price since the options are now around two years old.

Source : http://www.livemint.com/2008/01/13235805/Kingfisher-doubles-A380-orders.html

Analysis :

The only logic one can derive from this massive A 380 order is that KF plans to take advantage of the extra passenger capacity available on board i.e. 500+ seats and offer very cheap fares in Economy class but charge a hefty premium for F & J class to subsidize the low yielding Y class fares. KF should look into a EU/UK base for its A 380s to fly via enroute to USA similar to the style of 9W's BRU scissors hub as it would be very hard to fill up flights flown nonstop from BOM/DEL to JFK/ORD on a year round basis.

Air Canada

Air Canada will be adjusting capacity on its most popular European route i.e. Toronto-Heathrow by flying 4 times daily instead of 5. However, the aircraft used will compensate for the one less daily flight i.e. 2 daily B 773ERs + 2 daily B 763ERs will be flown. In addition, Montreal-Frankfurt too sees an upgrade in capacity as the usual daily A 333 will be replaced by a daily B 773ER.

Singapore Airlines

Singapore Airlines has announced that due to high yield being witnessed on its Bangalore-BLR bound flights, it will be increasing capacity on the route by flying 10 weekly B 773As from July 2008 replacing the B 772A used currently for this sector. The B 773As to be used for BLR will be a 3 class configured aircraft.

Phillppine Airlines

Phillppine Airlines has applied to the Canadian Authorities to start 3 weekly flights from Manila to San Diego routed via Vancouver with full 5th freedom traffic flights on the YVR-SDA-YVR route. PR plans to use an A 343 for this service and is targetting SDA due to the extremely large Filipino community that resides in the city and within its limits.

Garuda

Garuda of Indonesia has released tentative details of its Summer 2008 schedule which sees few interesting changes across its route network. The main highlights are as follows :

JED - increased from 3 to 8 weekly flights all using a B 744.

HKG - daily B 738 service is replaced by 5 weekly A 333 from CGK.

NGO - resumption of service using an A 333 thrice a week nonstop from CGK.

Jet Airways

Jet Airways of India has placed an order for 7 additional Boeing 777-300ERs last week thus increasing its commitment from 13 to 20 of this popular aircraft model. Three of these planes would be delivered to the airline by Winter 2009 as the carrier looks to embark on an ambitious international expansion before its main rivals i.e. Air India and Kingfisher gain a stronger hold in UK and North America.

Analysis :

What will be interesting to see is whether or not all 20 B 773ERs ordered by 9W will see a fancy 3 class layout or will some have a 2 class configuration as many people don't see the need for all of its EU/North America flights warranting a first class cabin.

Lets examine how the B 773ERs could be used :

2 used for daily EWR2 used for daily JFK

2 used for double daily BOM-LHR1 used for daily DEL-LHR

2 used for future daily BLR-BRU-LAX (summer 08)

2 used for future daily BOM-PVG-SFO (summer 08)

That makes 11 B 773ERs designated for current and future routes which have been mentioned many times in media outlets worldwide. This means there are 9 B 773ERs to play around with. They can be used in the following manner :

2 used for daily IAH...i.e. 4 weekly DEL-BRU-IAH + 3 weekly BOM-BRU-IAH

2 used for daily HYD-BRU-IAD

The main reason why IAH should be divided between DEL & BOM is because these 2 markets need extra service from 9W as the demand is there especially in the peak summer season (June-Sept) and winter (Nov-Jan). In order for 9W to increase and at the same time protect its market share from its 2 main Indian gatway cities i.e. BOM & DEL, it must increase capacity to meet growing demand to USA from these 2 market segments otherwise it will steadily lose out. Already AI offers triple daily BOM-NYC + double daily DEL-NYC flights + BA too flies double daily to both cities and soon Kingfisher will become a key player in this competitive segment.

2 used for daily same plane service LHR-BLR-SIN because the B 773ER has a larger number of high yielding premium class seats compared to its A 332s. 9W can easily make money on the LHR-BLR route (in all 3 cabin classes) which is currently dominated by BA who make a hefty profit flying it. 9W should consider using 2 aircraft for daily same plane SIN-BLR-LHR as SIN-BLR is a "premium route" capable of seeing high J class loads and a little bit of F here and there. The flight schedule can be as follows if LHR slots can be obtained :

Dep LHR 1500 Arr BLR 0600+1

Dep BLR 1000 Arr SIN 1630...i.e. 4 hr transit at BLRDep SIN 2230 Arr BLR 0200+1..plane gets parked in SIN for 6 hours which is ok.

Dep BLR 0600+1 Arr LHR 1200+1...i.e. 4 hr transit at BLR

The remaining 3 B 773ERs should be configured in a 2 class layout seating 370 passengers approximately as the Middle East routes forecasted for them below do not warrant having a first class cabin on board. Currently, 9Ws B 773ERs seat 312 pax in a 3 class configuration.

1 aircraft for double daily BOM-DXB-BOM...one forsees this happening in the near future (subject to DXB-India bilateral liberalizing). 9W has a better in-flight premium cabin product than EK does on its A 332s / B 772s which fly BOM-DXB-BOM and therefore stands to gain a good chunk of the premium traffic on this lucrative route.

Flight schedule can be as follows :

9W 600 Dep BOM 1100 Arr DXB 1230

9W 601 Dep DXB 1400 Arr BOM 1815

same aircraft can then be used for the night flight BOM-DXB-BOM which will arrive into BOM early morning next day thus providing excellent connections through 9Ws domestic India network i.e.

9W 602 Dep BOM 2100 Arr DXB 2230

9W 603 Dep DXB 0030+1 Arr BOM 0445+1

1 aircraft can be used for a daily DXB-DEL-DXB + daily DXB-BLR-DXB (subject to DXB-India bilateral liberalizing)

Dep DXB 0300 Arr DEL 0730

Dep DEL 1030 Arr DXB 1215

Dep DXB 1400 Arr BLR 1930

Dep BLR 2100 Arr DXB 2330

1 B 773ER can be used for daily MAA-DXB-MAA + daily HYD-DXB-HYD (subject to DXB-India bilateral liberalizing)

Dep DXB 0330 Arr MAA 0900
Dep MAA 1200 Arr DXB 1430

Dep DXB 1630 Arr HYD 2130
Dep HYD 2330 Arr DXB 0130+1

Sri Lankan Airlines

Emirates has decided that it will not be renewing its management contract with Sri Lankan Airlines which had been in place for the past 8 years. The DXB based airline also holds a 44% stake in the company. The main reason for the dispute has to do with the denied boarding of the current Sri Lankan President's entourage on a flight from Heathrow to Colombo in December. As a result, the Govt felt that as the majority share holder of the airline, its demands should have been met for which the airline refused to bow down to.

Source : http://news.bbc.co.uk/2/hi/south_asia/7175527.stm

Analysis :

After the massive turn around that UL has achieved over the last decade under the guidance of EK, one would hope that sensible heads prevail and that whom ever takes charge from April 1st doesn't ruin all the positives that EK brought to this airline. Definitely, UL has more to lose than gain from EK abandoning its management contract renewal which many believe has a lot to do with Mr Peter Hill being thrown out of the country by the current Sri Lankan President. For one, UL's cash reserves and cash flow wont have the backing that EK could have provided it with nor can it now turn to EK to help get from Airbus or Boeing substantial discounts on future plane orders to especially replace its A 343s which are now over 13 years old.The ceasefire abandonment by the Colombo Govt with the Tamil Tigers would also make matters worse as this can have deadly consequences for the airline and the country's tourism industry which is the main target market for UL especially on European and Far East Asia flights. The only positive thing that one sees happening out of all of this is the fact that now UL does not have to be dictated to as to where they can fly and where they shouldn't. UL had been wanting to fly nonstop to MAN and return to Australia for many years but EK's management didn't wantlol that to happen. UL was also interested in launching one stop flights to NYC via Europe/UK with its A 343 but ended up code sharing with EK instead. To be frank, even though SYD / MEL/NYC/YYZ have large Sinhalese/Tamil Communities residing within their city limits ( YYZ alone has approximately 200,000), the passenger data base for CMB from these areas is usually low yielding therefore even though UL may see decent loads on flights bound for the above mentioned 4 cities, they will most likely end up losing money flying to these places due to the extremely high operating costs involved flying a 280 seater A 343 on these routes + strong competition from QR/KU/EK.

It would be best for the time being for UL to stick with what they have got and build up its marketing presence in key markets where they have a strong presence such as LON, UAE & India because the political situation in Sri Lanka right now is very fragile with the ceasefire agreement with the Tamil Tigers being cancelled. UL's management team for 2008 should therefore adopt a "wait and see" approach to view how the political situation unfolds in Sri Lanka before committing any large scale investment of network expansion or fleet expansion in the short term future as the airline's flight loads heavily depend on there being political peace and harmony on the island.

Gulf Air

Gulf Air has finally revealed many changes to its Summer 2008 schedule which will see its entire fleet of aging Boeing 767-300ERs being retired in favour of dry leased Airbus A 321-200s and B 737-800s. In addition, many destinations witness capacity and frequency changes. The main highlights are as follows :

SYZ - increased from 3 weekly A 320s to daily effective June 16th.

MHD - increased from 3 weekly A 320s to daily effective June 16th.

PEW - capacity reduced from 2 weekly B 763ERs to 2 weekly A 321s.

BOM - capacity increased from June 16th to 12 weekly A 321s + daily A 332 + 2 weekly A 343.

LHR - 3 daily A 332s

DXB - from June 16th, daily A 332 + daily A 321 + triple daily B 738 + triple daily A 320.

TRV - capacity reduced from daily B 763ER to daily A 321.

KUL - daily flights between June-Sept only flown by A 343s to cater for summer season peak traffic.

ATH - reduced from 5 weekly B 763ERs to 3 weekly A 320s.

LCA - increased from 3 to 5 weekly A 320s.

BEY - increased from 9 to 12 weekly A 320 / B 738 operated flights.

DAM - increased from 10 to 11 weekly A 320s.

AMM - increased from 10 to 12 weekly A 320s.

KRT - increased from 6 weekly A 320s to daily flights.

RUH - capacity reduced to daily A 343 + daily A 321.

DOH - capacity increased to 2 weekly A 332s + 2 daily B 738s + 19 weekly A 320s

Comments :

With SYD now suspended, GF needs to suspend its loss making route to ATH. In any case, the feeder traffic obtained by GF from SYD via BAH to ATH was low yielding! GF needs to seriously re-negiotiate its bilateral agreement with Pakistan in order to increase LHE & ISB flights respectively as their presence in these 2 cities have decreased by 50% due to Oman Air taking over MCT-PAK bound flights.