20SEP edition

Website: http://airline-news.blogspot.com

Lufthansa has officially announced that they have placed the largest ever order by a legacy European airline (in terms of $ value) as the German carrier finally revealed its highly anticipated wide body aircraft replacement order. LH signed up for 34 Boeing 777-900Xs + 25 Airbus A350-900s worth a combined total of US$ 19 billion.

The B779s will be replacing LH’s entire fleet of B744s and A346s by 2020 where as the A359s will be replacing its A343 fleet from 2016 onwards and the A333s during the next decade. The initial routes identified by LH for these aircraft are as follows:

A 359 – FRA/YVR and FRA/SSG

B 779 – FRA/BKK (2 class high density)

B 779 – MUC/PVG and FRA/PVG (3 class)

Philippine Airlines has officially announced that it will be launching new nonstop flights to LHR-London Heathrow from its Manila hub effective 04NOV13 onwards as the carrier looks to embark on a major EU expansion as its ban has been lifted after a security/safety audit being passed. PR will be operating 5 weekly nonstop services to LHR using a B777-300ER which are expected to go daily from June 2014. Flights will be arriving into LHR at 1415 and departing back at 1705. In other EU related news, PAL confirmed that it has secured obtaining bilateral rights to fly double daily flights into Italy effective Summer 2014 i.e. daily to Rome and Milan each respectively. These two cities are expected to be operated as a triangular service 4 times per week as MNL-FCO-MXP-MNL using a B777-300ER.

With regards to its fleet expansion drive, PAL’s Chairman revealed that the carrier will be dry leasing 10 additional aircraft to cater for robust North American and European expansion. Four B773ERs + 6 A343s shall be dry leased into the fleet next year and to cater for replacements from 2020 onwards, the carrier shall be obtaining 10 A350-900s + 10 B777-900Xs.

Emirates has officially announced that it shall be launching 3 new destinations from Dec13 onwards as the carrier continues to aggressively expand its route network in under served niche markets. The main highlights are as follows:

TPE – new daily nonstop flights to be launched from FEB14 using a B773ER

KBL – new daily nonstop flights to be launched from DEC13 using an A345

BOS – new daily nonstop flights to be launched from MAR14 using a B772LR

Qatar Airways has officially announced today details of its route network expansion plans for the upcoming IATA W13 season of which the main highlights are as follows:

JKT - frequencies increased from 11 weekly to double daily using a B773ER

ISB - frequencies increased from 4 weekly to daily (3 weekly A320 + 4 weekly A332)

RGN - frequencies increased from 3 weekly to daily nonstop using an A319LR
DXB - frequencies increased from 11 to 13 daily flights
BAH - frequencies increased from 6 to 7 daily flights
DME - frequencies increased from 10 to 12 weekly
BEG/SOF/ESB/OTP - all shall receive an extra weekly service

Delta Airlines announced that it has placed a major order with Airbus totaling US$ 6 billion for the purchase of 40 new jets from the European manufacturer. The breakdown of the order was as follows:

10 A330-300IGWs of which majority shall be based at SEA for trans-pacific nonstop flying seating 293 pax in a 3 class layout i.e. 34J + 32P + 227Y.

30 A321-200s which will seat 190 passengers in a 3 class configuration i.e. 20J + 22P + 148Y

Etihad Airways has officially announced capacity increases to its Indian subcontinent route network for the upcoming IATA W13 season of which the main highlights are as follows:

DEL – frequencies increased from daily to double daily i.e. daily A332 + daily A320

BOM – frequencies increased from daily to double daily i.e. daily A346 + daily A320. Both the additional 

DEL and BOM services depart AUH at 1530 and arrive back by 2355

MAA – capacity increased from daily A320 to daily A321 (174 seater)

KTM – frequencies increased from daily to double daily using an A320 for both flights

China Southern Airlines has revealed that due to the ever growing popularity of its nonstop Guangzhou (CAN) – London Heathrow service, it shall be increasing its presence on this route effective 27OCT13 onwards. The current 5 weekly nonstop flights operated by a B787-800 shall be increased to a daily nonstop service using the same aircraft type offering quick connections in both directions via CAN to Australia in particular.

Ethiopian Airlines has officially announced that it is extremely pleased with the performance economics that the Boeing 787-800 has brought to the airline and has attributed this as a key aspect to their strong financial performance in 2013. As a result, ET decided to place an order for 8 additional B788s bringing the total number of units ordered to 13 by the East African airline! As far as its route network for the IATA W13 season is concerned, ET announced many changes to its medium and long haul network of which the main highlights are as follows:

SIN – new 3 weekly flights to be launched via BKK using a B763ER effective 17DEC13

COO/ABJ – frequencies and capacity increased from 3 weekly B738s to 4 weekly B757s

BKO/DKR – capacity increased from 4 weekly B757s to 4 weekly B763ERs

HKG – all 3 weekly flights to be operated nonstop using a B763ER instead of via BKK

DEL/HGH – frequencies reduced from 5 to 4 weekly

NIM/OUA – new 4 weekly service using a B757

Alitalia has officially announced that it shall be launching adjusting its services to NRT-Tokyo for the Summer 2014 season of which the main highlights are as follows:

VCE – new nonstop VCE/NRT nonstop flights to be launched using a B772ER

MXP – frequencies increased from 4 to 5 weekly nonstop using a B772ER

FCO – frequencies reduced from 10 weekly to daily nonstop using a B772ER

Air India has officially announced that if it does not hear any positive feedback from Star Alliance by the end of September 2013, it will stall all further attempts to join this alliance group and instead focus its resources to joining One World instead. The carrier is very keen to be part of a large alliance group which would enable it to realize higher yields, revenue and feeder service on board its long haul and domestic route network in particular.

Comments:

Finally AI is thinking sensibly as One World is ideal for them (I am looking at this from their perspective only) as they can code share with:

AA on all their India-USA flights
BA on all their UK-India flights
QF on their new daily DEL-MEL/SYD flights
CX on all their HKG-India flights
JL on all their NRT-India flights
QR on all their DOH-India flights + via DOH to Africa/Europe/Middle East

India-UK is the biggest market in Europe for which a BA-AI JV partnership would be a serious threat to all the direct and in-direct carriers. On the Aussie route, AI/QF can code share on domestic Australia and trans-tasman to boost feed. On the trans-pacific front, AI via HKG or NRT can code share to YVR, LAX and SFO with JL/CX rather than spend reckless amounts of money operating its own services.

British Airways has revealed major expansion plans for its long haul route network for the IATA S14 season as the carrier looks to take opportunities in niche markets that can generate good S/F and yields at the same time. The main highlights are as follows:

AUS – new daily nonstop flights to be operated using a B787

ACC – frequencies increased from daily to 10 weekly nonstop i.e. daily B744 + 3 weekly B763ER

SEA – frequencies increased from 10 to 11 weekly nonstop using a B744

TLV – frequencies reduced from triple daily to double daily

EBB – frequencies increased from 3 to 4 weekly

ICN – frequencies increased from 6 weekly to daily

JNB – frequencies reduced from 17 weekly to double daily

How to restructure PIA

PIA this year have floated a tender 3 times already for the dry lease of 10 narrow bodied A320/A321 or B738s but on all 3 occasions, it has been messed up through some form of outside interference.

Their B747 fleet after completion of Hajj 2013 operations shall be permanently grounded where as their A310s are now configured in a 227 seater all Y class cabin only. FRA and AMS have already been suspended with LBA next in line. I will not be surprised if both CPH and OSL too follow suit and mainland Europe is just left wit MXP and CDG which is operated 3 times per week using a B777 as ISB-MXP-CDG-ISB.

The A321-200 is the ideal replacement aircraft for the A310 for them to be used on the high density PAK-Middle East routes. This aircraft type can also be used to replace the A310 on their BKK-HKG services as the A321 can easily perform the 4.5 hour flight from PAK to BKK nonstop in both directions without a payload problem. The only route where it might face a hurdle is the 2 weekly ISB-PEK-NRT flight as PEK-ISB is a 6 hour 15 minute flight which can only be done with an A321-200 that has 1ACT (additional fuel tank) and not the standard model.

All being said though, it might not be a bad idea to completely shut down PIA write off the bad debts and start afresh with the B777s and ATRs being the only aircraft type of the current fleet being transferred over. The new PIA would have to get rid of the old dinosaurs of the current upper management team whose bad decisions have plagued this airline such the turn of the century. The long haul route network should focus only on UK, JFK, BKK and EY or EK via UAE and the Far East can be served via BKK with a code share with TG.

The core route network should encompass exploiting the higher yielding and higher volume PAK-Middle East market segment with A321s and B777s (mainly to JED/RUH and DXB only). The B777s configuration too needs to be changed to reflect reality i.e. having a J class cabin with 35 seats is fruitless for a non-premium branded airline like PK. It should maximum have 24 J class seats (all flat beds) on board its B772 and B773 fleet. The B773s though should have a 3-4-3 configuration in Y class (but not the B772 as they will be used on the longer flights primarily) in order to have great economies of scale especially on the higher volume PAK-Saudi flights + ISB/LHE-LHR/MAN.

JFK needs to be routed via SNN i.e. PAK-SNN-JFK-PAK so that the pax can clear U.S. immigration/customs easily at SNN and not have to endure the horror at JFK.

The restructured fleet of the new airline would look like this:

6 ATR 42-500s (from current fleet) seating 50 pax

4 B777-200ERs
2 B777-200LRs
*both of the above would be from the current fleet and should be able to seat 320 passengers (24J + 296Y)

6 B777-300ERs (3 active and 5 are an additional order placed over a year ago but I dont feel a need for there to be 8 in the fleet so 2 would be canceled)
*these shall be transferred from the existing fleet and should be configured to seat 434 passengers (24J + 410Y with a 3-4-3 arrangement) which in turn will be used on flights to RUH, JED, DXB and MAN exclusively !

12 A321-200s (with 1ACT preferably) seating 186 pax (12J + 174Y)

5 A319s seating 122 pax (8J + 114Y)

Total desired fleet strength is 35 aircraft which is ideal !

The 6 B77Ws I would use in the following manner:

1 aircraft for 4 weekly LHE-JED + 3 weekly LHE-RUH
1 aircraft for 4 weekly ISB-RUH + 3 weekly ISB-JED
1 aircraft for daily KHI-JED-KHI-DAC-KHI same plane service
1 aircraft for daily ISB-MAN
1 aircraft for 4 weekly LHE-MAN + 3 weekly ISB-BHX
1 aircraft for daily ISB-DXB + daily LHE-DXB

The 2 B77Ls would exclusively perform:

1 aircraft for 3 weekly KHI-LHE-YYZ-LHE-KHI
1 aircraft for 4 weekly KHI-LHE-SNN-JFK-LHE-KHI

The 4 B772ERs would perform:

1 SPARE aircraft to cover for the B77Ls and B77W
1 for daily PEW-DXB + 4 weekly PEW-RUH
1 for 3 weekly KHI-LHR + 4 weekly ISB-LHR
1 for 3 weekly LHE-LHR + half aircraft spare as cover

The 12 A321s would perform:

1 aircraft for 4 daily KHI-LHE-KHI
1 aircraft for 4 daily KHI-ISB-KHI
1 aircraft for double daily KHI-PEW-LHE-PEW-KHI
1 aircraft for 6 weekly PEW-AUH + 3 weekly PEW-DMM + 3 weekly PEW-JED
1 aircraft for 4 weekly LHE-KWI + 3 weekly LHE-DMM
1 aircraft for daily LHE-MCT + daily LHE-BKK
1 aircraft for daily KHI-BKK-KUL (to be timed the same as LHE-BKK so that pax from both KHI + LHE can connect via BKK to KUL hence making BKK a small scissors hub)
1 aircraft for double daily KHI-DXB + daily KHI-MCT
1 aircraft for daily ISB-AUH + daily LHE-AUH
1 aircraft for 3 weekly ISB-DMM + 4 weekly ISB-MCT
0.5 aircraft for daily LHE-DOH
1.5 aircraft as SPARE back up in case of AOG/maintenance for A321s and A319s

The 5 A319s would perform:

1 aircraft for daily KHI-MUX-DXB-MUX-KHI + daily KHI-UET
1 aircraft for daily KHI-SKT-DXB-SKT-KHI + 3 weekly KHI-DEL
1 aircraft for 3 weekly KHI-MED + 4 weekly KHI-BOM + 4 weekly KHI-DMM
1 aircraft for daily ISB-UET + double daily ISB-PEW + 5 weekly ISB-BKK (which would connect to BKK-KUL) +
1 aircraft for an additional daily flight each from KHI to LHE and ISB respectively + half an aircraft to act as SPARE back up

The above plan may not bring PIA back into profit mode, but it shall definitely bring a level of commercial efficiency, respectability, lower losses, higher yields and higher revenues versus the current cauldron that it is stuck in !

21AUG edition

Cathay Pacific has officially announced that it shall be launching 2 new routes i.e. one medium haul and one long haul to further expand its global network catering to markets that are in particular seeing ever growing demand from mainland China. The new medium haul route announced is MLE-Male in the Maldives which shall be launched effective 27OCT13 operated 4 times per week nonstop using an A333. MLE over the past year has seen over 200,000 tourists arriving from mainland China alone and the market demand for this destination is also rapidly growing from South Korea, Hong Kong and Japan alike. CX's MLE announcement of MLE comes on the back of its main HKG based competitor i.e. Hong Kong Airlines also announcing that its own MLE services have been reinstated 4 times per week since July.

With regards to the new long haul route, CX announced EWR-Newark in USA which shall be flown on a daily basis nonstop using a 2 class configured Boeing 777-300ER. In turn, this will make CX service the New York area market with 5 daily flights i.e. daily EWR + daily HKG-YVR-JFK + 3 daily HKG-JFK nonstop all operated with B773ERs. CX also revealed some other long haul capacity changes to its network for the upcoming IATA W13 season of which the main highlights are as follows:

CDG - frequencies reduced from double daily to 11 weekly i.e. daily B773ER + 4 weekly A343

FRA - capacity reduced from daily B744 to daily B773ER

JNB - capacity reduced from daily B744 to 3 weekly B773ER + 4 weekly B744s

Air Canada has officially announced that it has adjusted its original order with Boeing for 37 Boeing 787-800s to be divided between both the -800 and the more popular larger -900 models. The new breakdown is 22 B789s + 15 B788s. The B789s provide the airline with the right capacity to perfectly replace its A333s on European services as well as replace the B763ER in the future on certain YVR-Asia flights. The attractive economics of this aircraft type also give the option to AC in allowing it to open new long haul routes from Canada that do not require the additional capacity of the B773ER such as Montreal-Beijing and Montreal-Casablanca in particular.   

Emirates has officially announced many changes to its IATA W13 schedule of which the main highlights are as follows:

AMS - frequencies increased from daily to double daily i.e. daily A380 + daily B772LR effective 02DEC

BKK - frequencies increased from 5 to 6 daily nonstop flights

SKT - new 4 weekly flights to be launched effective 05NOV using an A332

KBP - new daily nonstop flights using an A340-500 to be launched effective 16JAN14

BCN - effective 01FEB, capacity increased from daily B773ER to daily A380

MRU - effective 16DEC, capacity increased from double daily B773s to daily A380 + daily B773

Qatar Airways has officially revealed few capacity changes to its medium haul route network of which the main highlights are as follows:

NBO - frequencies increased from double daily to 18 weekly nonstop flights all operated with an A320 effective 01SEP13

DME - frequencies increased from 10 to 12 weekly nonstop flights using a mixture of A320s and A321s

JKT - frequencies increased from 11 weekly to double daily nonstop flights i.e. daily B773ER + 3 weekly A330s

Malaysia Airlines has officially announced that it will be increasing its presence in Austral-Asia during the upcoming IATA W13 season as the carrier looks to take advantage of the growing O&D + transfer traffic demand from these markets and focus its expansion primarily within a 7-8 hour flying radius of its main KUL hub. The main highlights are as follows:

JED - frequencies increased from 5 weekly to double daily nonstop flights effective 28JAN14 using a B772ER for all flights

MEL - frequencies increased from double daily to triple daily effective 21NOV i.e. double daily A333 + daily B772ER

BLR - frequencies increased from 10 to 11 weekly nonstop flights using a B738

DEL - frequencies increased from 12 weekly to double daily i.e. daily A333 + daily B738

AKL - frequencies increased from 6 weekly to daily nonstop flights using a B772ER

COK - new daily nonstop flights to be launched effective 27OCT13 using a B738

Turkish Airlines has officially announced that it will be launching new nonstop flights to BOS-Boston, USA effective 12MAY14. Flights shall be operated on a daily basis from IST using an A330-200 offering excellent connections in both directions to Middle East, Africa and Indian Subcontinent. TK will henceforth become the first airline from the Middle East region to operate into BOS. In addition to BOS, TK too revealed that it will be launching 2 new African destinations from 12DEC13 onwards i.e. Kano-Nigeria and N'Djamena which will be operated 4 times per week using a B737-800 in a triangular routing manner.

With regards to its fleet, TK confirmed that it has placed an order for 3 additional A333s + 5 additional B773ERs as the carrier is betting heavily for its long haul route network to grow rapidly over the next three years. Some of the A333s by 2015 will be replacing the A321s on selected flights to mainland European airports which have slot restrictions.

United Airlines has revealed that due to lower demand stemming from the U.S. forces pull out from Iraq in particular, it has seen reduced demand for its services to Kuwait and Bahrain in particular and as a result has decided to reduce its presence in these two markets from September onwards. Currently, UAL operates a daily IAD-KWI-BAH service using a B772ER. These shall be reduced to 4 times per week only using the same aircraft type.

Egypt Air has disclosed that it will be launching new services to CGK-Jakarta, Indonesia effective 02DEC13 as the carrier looks to take advantage of its CAI geographical hub location to tap into the growing Indonesia-Saudi Arabia and Europe bound market segments. GA revealed that the new flights shall be operated 4 times per week via Kuala Lumpur using an A330-200 and as a result of which the daily CAI-BKK-KUL service using an A333 shall terminate in BKK itself. Other changes for the W13 season revealed by MS are as follows:

BOM - frequencies increased from 4 to 5 weekly nonstop flights using a B738 (this is one of the world's longest B737 operated flights nonstop)

YYZ - frequencies reduced from 4 to 3 weekly nonstop flights using a B773ER

08JUL edition

Air India has officially announced that it will be launching new daily services to Australia effective 29AUG13 from its Delhi hub. Flights shall be routed as 3 weekly DEL-MEL-SYD-DEL + 4 weekly DEL-SYD-MEL-DEL all operated with a 256 seater Boeing 787-800. The triangular services are operated to ensure a daily presence exists in both key market segments and for each to have a minimum 3 weekly nonstop service to India in either direction. All flights depart DEL at 1300 and arrive back the next day at 1800 local time.


Alitalia officially announced that it will be embarking on a new long term corporate plan designed to help it achieve an "operating profit in 2014" and a "net profit from 2016" onwards as the carrier looks at identifying ways to help it achieve these set goals.

Details of the new plan can be read here:

http://corporate.alitalia.com/en/media/press-releases/03-07-2013.html

Analysis:

With regards to the new long haul markets identified, their demand levels over the past year (stats from MarketIS and Shepherd System) were as follows:

VCE/NRT - 33,000

MXP/AUH - 32,000; this is obviously a partnership arrangement with Etihad similar to their FCO-AUH deal
MXP/PVG - 125,000
MXP/KIX - 24,000

FCO/ICN - 120,000; Sky Team hub to hub service should do well. What will happen here is that KE operates 3 weekly B744s on this route, so one would expect AZ to operate the remaining 4 days a week using a B777 !

FCO/NBO - 15,000
FCO/SFO - 53,000
FCO/JNB - 31,000
FCO/SCL (Santiago) - 21,000

Now as one can see from the above market size levels, there are 2 routes that are no brainers i.e. PVG-MXP + ICN-FCO and one which is good to provide feeder traffic at low cost beyond another airline's hub i.e. MXP-AUH which EY/9W will code share on and then they will feed it with GCC, ISC and SE Asia pax.

However, the choices which are not commercially justifiable include JNB, SCL and NBO for the following reasons:

1. JNB is not a Sky Team hub and low yielding for VFR traffic as the premium market demand between South Africa and Italy is marginal. The market size demand level is not high enough to even warrant a 3 weekly A332 nonstop service. It is best code sharing via CDG/AMS on AF/KL to South Africa. In addition, FCO-JNB is a long haul flight averaging 10 hours in flying time + in order to ensure good connections via FCO in both directions to Europe, the aircraft would also have a long ground time at JNB airport thus the aircraft utilization mixed with the low yield market characteristics of this route does not make it viable.

2. NBO maybe a Sky Team focus airport which can in turn result in KQ feeding it with pax bound to Central/East/South Africa via its hub but if an airline such as KQ could not itself make FCO work on its own over the past few years coupled with the fact that the O&D demand between Italy and Kenya is very low + what is even lower yielding would be the 6th freedom transfer traffic between EU/UK/USA and NBO. Another issue with FCO-NBO is that since its a 7 hour flight, it cannot be operated with AZ's A320/A321 fleet in order to reduce costs hence only an A332 needs to be utilized and unfortunately both these aircraft are too big to service this route and too expensive to justify a daily or even 4 weekly service !

3. SCL is a One World hub airport and not Sky Team. The flying time from FCO would be approximately 11:45 hours to service a market segment of 21,000 pax? In addition, transfer traffic volume potential via FCO to Eastern/Central Europe is also not that high. Once again, the return on investment on utilizing an expensive B777 on this sector is not commercially justifiable.

Instead, to replace these 3 above mentioned routes, AZ should seriously think about the following:

a) FCO/PEK - market size 101,000 + another 80,000 bound to other parts of Italy + huge feeder traffic potential available via FCO to Europe and North Africa. Good mix of high yielding business class and leisure/VFR traffic to be obtained here. Currently, only Air China operates this route nonstop on a daily basis using an A332 with a flying time of 10 hours 15 minutes which means for AZ a daily A 332 is perfectly well suited too. In case anyone is wondering why CAN-FCO is not being advocated in spite of it being a Sky Team hub of CZ, its due to the O&D market size between FCO and CAN being only 9,000 pax over the past year !

b) MXP/HKG - this market segment is very high yielding and has exploded in terms of demand levels since Cathay Pacific launched its services here 2 years ago. Market size is 102,000 and the O&D yield here is 35% higher than FCO/HKG ! Kindly note that before CX launched daily MXP-HKG services using a B77W, the annual market size demand on this route was only 36,000 pax which means over the past 2 years, it has grown by over 200% primarily due to CX creating this market stimulation ! For MXP-HKG, I would propose a daily B777-200ER operated service as it has a larger J class cabin (30 vs 20 on A332) and can carry more cargo in the belly. In addition to the O&D demand, it can carry transfer traffic via code share or on its own operated service to Europe out of MXP.

c) FCO/HND - the current demand between Tokyo and Rome alone is 190,000 passengers with only AZ operating a daily nonstop service using a B772ER. Along with this they also operate a daily MXP-NRT service using the same aircraft type and the annual demand for this route is 108,000 passengers. One option that should be considered by AZ here to increase their dominant monopolistic position is to launch a new daily service to HND with the B777. Currently, AZ's flights from Japan arrive into both MXP and FCO at 1800-1900 which limits the number of onward connections via their hubs to Europe + for some the arrival time early evening might be un-attractive. The yields of both FCO-NRT and MXP-NRT are identical and in order to offer another flexible schedule option + provide feed from Japan for its EU bound flights, AZ needs to consider the below mentioned schedule:

AZ XXX Dep FCO 2300 Arr HND 1810
AZ XXX Dep HND 0030 Arr FCO 0615


Emirates has officially announced that it shall be launching a new long haul route to West Africa namely to the city of Conakry (CKY) in Guinea effective 28OCT13. Flights shall be operated 4 times per week with a tag on to DKR-Dakar, Senegal using an A340-300. The routing will be triangular service i.e. DXB-CKY-DKR-DXB as EK looks at ways to help boost its current DKR operations. In other news, EK too revealed some further capacity changes to its long haul network for the upcoming IATA W13 season of which the main highlights are as follows:

WAW - capacity increased from daily A332 to daily B773

VIE - capacity increased to 13 weekly B773s from daily A345 + daily B773

KUL - capacity increased to triple daily B773s + daily A380


United Airlines has officially announced that it has placed a further order with Boeing for 5 additional B787 models as the carrier looks to rapidly accelerate getting these aircraft into its fleet to replace its aging B767s and early bird B772As to realize the mega operational cost saving benefits that the B787 brings to the table. In total, UA's 65 B787 order is henceforth split as being 21 B787-800s + 24 B787-900s and 20 B787-100Xs.


Air China has announced capacity reduction changes for its Germany bound flights for the upcoming IATA W13 season where demand levels tend to be light. On its core PEK-FRA route, frequencies reduced from double daily to 11 weekly flights all operated with B773s where as PVG-FRA gets reduced from daily to 6 weekly nonstop using an A332.  


Malaysia Airlines has revealed that it will be launching 2 new medium haul routes to expand its regional network offering less risk and higher yields versus experimenting with new routes to Europe or Africa. MH confirmed that the cities of Kochi in India + Darwin in Australia will be inaugurated effective 27OCT13 flown nonstop from its KUL hub along with frequencies to AKL (Auckland) being increased in the following manner:

COK - new daily nonstop flights using a B738

DRW - new 5 weekly nonstop flights using a B738

AKL - frequencies increased from 6 weekly to daily nonstop using a B772ER


Eva Air of Taiwan has officially announced its long term fleet plan that will see the carrier through to 2025 across its regional and long haul route network. The main highlights are as follows:

i. Regional narrow body network will be exclusively operated by Airbus A321-200s of which an additional 10 shall be ordered bringing the total expected A321 fleet size to 14 aircraft

ii. Eleven A332s + three A333s to be replaced exclusively by the Boeing 787-100X of which an order shall be placed in due course. The B787-100X will also be used on long haul flights to Europe, Australia and North America along side high density regional services to the ASEAN region.

iii. Size of freighter fleet to be reduced i.e. 9 B744Fs + 6 MD11Fs to be all replaced eventually by only 11 B777-200LR freighters!

iv. Long haul and high demand regional routes to be exclusively operated by the Boeing 777-300ER of which an additional 9 units shall be ordered to the 15 already in service. Airline is showing keen interest in Boeing's 777-900X program for growth in the next decade.

Source: http://www.taipeitimes.com/News/biz/archives/2013/06/19/2003565118


Korean Air has officially revealed few changes to its long haul route network for the IATA W13 season of which the main highlights are as follows:

CDG - capacity reduced from daily B744 to daily B773ER

SVO - frequencies increased from 4 to 5 weekly nonstop using a B772ER

MXP/FCO - capacity reduced from 3 weekly B744s to 3 weekly B772ERs
HKT - capacity increased to daily B744 nonstop service


Philippine Airlines has finally officially released information regarding its highly anticipated launch of new nonstop flights to DXB-Dubai, UAE from its Manila hub. Services will be launched effective 01OCT13 using an all economy class configured A333 operated daily with a 1815 arrival time into DXB and a departure at 1945. As a result of this, planned services to Doha are for the time being pushed back to be launched in IATA Summer 2014 season.


British Airways has revealed few capacity changes to its long haul route network for the upcoming IATA W13 season of which the main highlights are as follows:

BOM - capacity increased to double daily B744s
PEK - frequencies increased from 6 weekly B744s to daily nonstop using a B772ER
ORD - capacity increased from double daily B772ERs to daily B744 + daily B772ER

FNA/ROB - frequencies increased from 3 to 4 weekly flights using a B763ER

PVG - frequencies increased from 6 weekly B772ERs to daily nonstop i.e. 2 weekly B773ERs + 5 weekly B772ERs

new Alitalia corporate strategy review

Alitalia today officially announced that it will be embarking on a new long term corporate plan designed to help it achieve an "operating profit in 2014" and a "net profit from 2016" onwards as the carrier looks at identifying ways to help it achieve these set goals. 

Details of the new plan can be read here:

http://corporate.alitalia.com/en/media/press-releases/03-07-2013.html

Analysis:

With regards to the new long haul markets identified, their demand levels over the past year were as follows:

VCE/NRT - 33,000

MXP/AUH - 32,000...this is obviously a partnership arrangement with Etihad similar to their FCO-AUH deal
MXP/PVG - 125,000
MXP/KIX - 24,000

FCO/ICN - 120,000...Sky Team hub to hub service should do well. What will happen here is that KE operates 3 weekly B744s on this route, so I expect AZ to operate the remaining 4 days a week using a B777 !


FCO/NBO - 15,000
FCO/SFO - 53,000
FCO/JNB - 31,000
FCO/SCL - 21,000


Now as one can see from the above market size levels, there are 2 routes that are no brainers i.e. PVG-MXP + ICN-FCO and one which is good to provide feeder traffic at low cost beyond another airline's hub i.e. MXP-AUH which EY/9W will code share on and then they will feed it with GCC, ISC and SE Asia pax.

However the choices which I dont agree with at all are JNB, SCL and NBO for the following reasons:

1. JNB is not a Sky Team hub and exceptionally low yielding. The market size demand level is not high enough to even warrant a 3 weekly A332 nonstop service. It is best code sharing via CDG on AF to South Africa. Plus FCO-JNB is a long haul flight averaging 10 hours in flying time + in order to ensure good connections via FCO in both directions to Europe, the aircraft would also have a long ground time at JNB airport thus the aircraft utilization mixed with the low yield market characteristics of this route does not make it viable.

2. NBO maybe a Sky Team hub which can in turn result in KQ feeding it with pax bound to Central/East/South Africa via its hub but if an airline such as KQ could not itself make FCO work on its own over the past few years coupled with the fact that the O&D demand between Italy and Kenya is very low + what is even lower would be the 6th freedom transfer traffic between EU/UK/USA and NBO. Another issue with FCO-NBO is that since its a 7 hour flight, it cannot be operated with AZ's A320/A321 fleet in order to reduce costs hence only a B767 or an A332 needs to be utilized and unfortunately both these aircraft are too big to service this route and too expensive to justify a daily or even 4 weekly service !

3. SCL is a One World hub and not Sky Team. The flying time from FCO would be approximately 11:45 hours to service a market segment of 21,000 pax? In addition, transfer traffic volume potential via FCO to Eastern/Central Europe is also not that high. Once again, the return on investment on utilizing an expensive B777 on this sector is unjustified.

Instead, if I was in charge here, to replace these 3 above mentioned routes, I would launch the following for AZ:

a) FCO/PEK - market size 101,000 + another 80,000 bound to other parts of Italy + huge feeder traffic potential available via FCO to Europe and North Africa. Good mix of high yielding business class and leisure/VFR traffic to be obtained here. Currently, only Air China operates this route nonstop on a daily basis using an A332 with a flying time of 10 hours 15 minutes which means for AZ a daily A 332 is perfectly well suited too. In case anyone is wondering why I'm not advocating CAN-FCO as its a Sky Team hub of CZ, its due to the O&D market size between FCO and CAN being only 9,000 pax over the past year !

b) MXP/HKG - this market segment is very high yielding and has exploded in terms of demand levels since Cathay Pacific launched its services here 2 years ago. Market size is 102,000 and the O&D yield here is 35% higher than FCO/HKG ! Kindly note that before CX launched daily MXP-HKG services using a B77W, the annual market size demand on this route was only 38,000 pax which means over the past 2 years, it has grown by over 200% primarily due to CX creating this market stimulation ! For MXP-HKG, I would propose a daily B777-200ER operated service as it has a larger J class cabin (30 vs 20 on A332) and can carry more cargo in the belly. In addition to the O&D demand, it can carry transfer traffic via code share or on its own operated service to Europe out of MXP.

c) FCO/HND - the current demand between Tokyo and Rome alone is 190,000 passengers with only AZ operating a daily nonstop service using a B772ER. Along with this they also operate a daily MXP-NRT service using the same aircraft type and the annual demand for this route is 108,000 passengers. One option that should be considered by AZ here to increase their dominant monopolistic position is to launch a new daily service to HND with the B777. Currently, AZ's flights from Japan arrive into both MXP and FCO at 1800-1900 which limits the number of onward connections via their hubs to Europe + for some the arrival time early evening might be un-attractive. The yields of both FCO-NRT and MXP-NRT are identical and in order to offer another flexible schedule option + provide feed from Japan for its EU bound flights, AZ needs to consider the below mentioned schedule:

AZ XXX Dep FCO 2300 Arr HND 1810
AZ XXX Dep HND 0030 Arr FCO 0615

Now with regards to the 6 additional aircraft, if my 3 route recommendations were taken into account, it would have to be B772ERs only but from the original AZ plan it looks like it would be possibly an equal split of 3 A332s + 3 B777s !

26JUN edition

SAS of Scandinavia has officially announced that as part of its fleet rationalization and long term cost cutting exercise, it has placed an order with Airbus for 8 A350-900s (plus 6 options) + four additional A333IGWs as the carrier looks to gradually retire its A340-300s as soon as possible. Currently, SK has in its fleet 7 A343s + 4 A333s for its long haul flights to Asia and North America. The A359s will be delivered from 2018 onwards where as the additional A333s from 2015. According to information available, SK's A359s will seat 308 pax in a 3 class configuration i.e. 36 business + 32 premium economy + 240 economy class.

Comments:

It is expected in the future that the 6 options on the A359s shall be firmed up so that SK's wide body fleet will be further standardized to revolve entirely around the A359 exclusively which is a sensible option no doubt !


Jet Airways of India has filed for slots with Amsterdam airport authorities requesting permission to launch double daily flights from India into the airport from the on set of the IATA W13 season. In effect, this means the end of 9W's Brussels scissors hub as well as possible total suspension of the destination itself. According to AMS slot filing documents, 9W has requested for a daily DEL-AMS-YYZ using an A333 + a daily nonstop terminator BOM-AMS flight using an A333 as well. The schedules are as follows:

9W 224 Dep DEL 0540 Arr AMS 0940 // 9W 224 Dep AMS 1210 Arr YYZ 1420
9W 223 Dep YYZ 2025 Arr AMS 0940+1 // 9W 223 Dep AMS 1210 Arr DEL 0025+1

9W 231 Dep BOM 0420 Arr AMS 0940
9W 232 Dep AMS 1210 Arr BOM 0145+1

With regards to 9W's EWR service, that is expected to be re-routed as Mumbai-Abu Dhabi-Newark using a B777-300ER in code share with Etihad.

Comments:

There has been an enormous amount of investment put into BRU both as a hub and destination by 9W over the past 6 years. It would be an absolute waste if they decided to suspend operations in its entirety as over the past year the BRU-India market size was over 140,000 pax with nearly 50,000 bound to BOM alone! 9W should seriously look at maintaining at least a daily BOM-BRU flight using an A332 as there is fair enough premium traffic on this sector + via its BOM hub it can easily connect to other points in India + SE Asia.

If 9W does indeed suspend all of its BRU flights, this provides a mega opportunity for both EY and QR to grab the left over traffic + gives an excellent chance for Emirates to seriously consider launching its own DXB-BRU services using a B777. With regards to EY, its current 8 weekly BRU flights could easily be increased to 12 and via AUH it can connect the whole of India with its partner 9W. As far as QR is concerned, it should look at initially making its Flt # 193/194 a daily service hence in turn making BRU-DOH increase from the current daily to a 10 weekly operation from W13 season. The reason why QR 193/194 should be increased is because this flight number rotation offers the most connections via DOH in both directions to QR's network versus QR 195/196.


EVA Air's CEO has officially revealed the carrier's 5 year fleet and long haul route network expansion plan as it enters the Star Alliance membership club. As far as the fleet plan is concerned, it will be as follows:

i. A total of 35 Boeing 777-300ERs the carrier envisions having by the end of the decade. Currently it has 15 in service + 7 more on order hence a further order for 13 aircraft is to be made which will be mix of 10 Boeing 777-200LR freighters (replacing B744Fs) + 3 B773ERs.

ii. Regional high density and medium density long haul flights to be exclusively operated with Boeing 787-100Xs. The B781s will replace 11 A332s + 3 A333s once delivered.

iii. Narrow bodied fleet to revolve exclusively around the 14 A321-200s it has on order. 
 
With regards to route expansion plans, BR will be adding Houston and Chicago in 2014-15 with nonstop service out of Taipei using a B7777-300ER. Frequencies to LAX and SFO are also planned to be increased as both are major STAR hubs of fellow partner UNITED. New services to ORD and IAH shall be operated by BR in code share with UA too.


The 2013 Paris Air Show concluded last week with major orders placed for both Boeing, Embraer, Bombardier and Airbus aircraft by the following airlines + leasing companies:

Qatar Airways ordered 2 firm + 7 options for the B777-300ERs
United Airlines ordered 20 B787-100Xs + 35 A350-1000Xs
Air France/KLM ordered 25 A350-900s
Sri Lankan Airlines ordered 4 A350-900s + 6 A330-300IGWs
ILFC ordered 50 A320NEOs
Doric Air Leasing ordered 20 A380s
Easyjet ordered 135 A320NEOs
Korean Air ordered 5 B747-800s + 6 B777-300ERs
GECAS (leasing firm) ordered 10 B787-100Xs
Air Lease Corp ordered 3 B787-900s + 30 B787-100Xs
Ryanair ordered 175 B737-800NGs
British Airways ordered 12 Boeing 787-100Xs
Singapore Airlines ordered 30 Boeing 787-100Xs + 50 Airbus A350-900s
Arik Air ordered 4 Bombardier Dash 8Q400s + 3 CRJ1000s


Malaysia Airlines has officially announced that it will be relaunching its services to DXB-Dubai, UAE effective 05AUG13 as the carrier embarks upon a sustained expansion plan in line with its positive operating performance over the past year. Flights to DXB will be operated on a daily nonstop basis from its KUL hub using a B777-200ER with the below mentioned timings:

MH 162 Dep KUL 2330 Arr DXB 0220+1
MH 163 Dep DXB 0410 Arr KUL 1525

Comments:

From the above mentioned schedule, connections via KUL in both directions are easily available to SIN, MNL and Indonesia mainly. However to Australia, the connection from Dubai involved a cumbersome long transit in KUL but its very good on the way back though !


Air India has officially announced that it will be launching new services to BHX-Birmingham, UK effective 01AUG13 as the carrier looks to utilize its fleet of Boeing 787-800s to expand on medium density long haul routes in a cost effective manner. Flights will be flown nonstop 4 times per week out of its DEL hub catering to the huge Sikh/Punjabi community residing in the UK Midlands region. All services will be operated using a 256 seater B788 configured to accommodate 18 in business + 238 in economy class. The flight schedule is as follows:

Days: 1/2/4/6

AI 113 Dep DEL 1330 Arr BHX 1800
AI 112 Dep BHX 2130 Arr DEL 1005+1


Qatar Airways has revealed that it has been awarded additional bilateral rights by the Egyptian Govt to increase its services to the capital Cairo effective 01JUL13. Currently, QR operates 16 times per week nonstop from its Doha hub to Cairo. These shall be increased to triple daily nonstop using an A330 double daily + an A321 daily effective 01JUL13. Recently, Etihad too announced that it won permission from the Egypt authorities as well to increase their own AUH-CAI services from double to triple daily which they already are now operating. In other QR related news, the carrier also announced that it will be significantly increasing its capacity to Manila for the entire IATA W13 season in the following manner:

CRK - capacity increased from daily A332 to daily A333

MNL - capacity increased from daily A332 + daily B773ER to double daily B773ER

Comments:

FYI, the B773ER used by QR on MNL is the high density version seating 380 passengers i.e. 24J + 356Y therefore in total with this upgrade in W13, the added weekly capacity in terms of round trip seats is 2,338.


Gulf Air has officially announced that it has secured additional bilateral flying rights into JED-Jeddah, Saudi Arabia as the carrier looks to slowly expand on higher yielding regional routes using its fleet of 20 A320s. The new third daily service will be operated effective 09JUL13 using an A320 departing BAH at 0035 and arriving back by 0700.


Airblue of Pakistan has officially announced that it will be significantly expanding its services to Saudi Arabia effective 10JUL13 as the carrier looks to expand its presence on the high volume and high yielding PAK-KSA marketplace. PA will operate a 327 seater A343 four times per week from Lahore nonstop to JED plus 3 times per week nonstop from Karachi to Jeddah thereby giving it a daily presence on the PAK-JED sector.


Etihad Airways has officially announced that due to surging demand for its Kuala Lumpur bound service from AUH, it will be increasing services on this sector effective 15JUL13 by adding a second daily nonstop flight using an A332. The A332 used for this new service is leased from India's Jet Airways. The flight schedule for the new service enables EY to offer good connections in both directions to its European network which currently only connects nicely in one direction. The timings are as follows:

EY 416 Dep AUH 1105 Arr KUL 2240
EY 413 Dep KUL 0325 Arr AUH 0630


Fly Dubai has officially announced a major change of its business model as the carrier unveiled that it will install a proper business class cabin on board all of its Boeing 737-800s from the on set of the IATA W13 season. The new configuration will go from 189 seats in an all economy configuration to have 12 in business class + 138 in economy. The business class seat pitch shall be 42 inches offering 7 inches of recline and 21 inches of width.

For more information on this, click here http://www.flydubai.com/en/business/?utm_source=flydubai.com&utm_medium=fz_banner&utm_campaign=201306_flydubai_BusinessClass_Seat&utm_content=BusinessClass_Seat_fz_homepage_banner_eng

 
Philippine Airlines has further revealed that its newly announced services to both Doha and Abu Dhabi will see a capacity uplift from the start. Originally all flights were to be operated using an A343 seating 260 passengers but now all 6 weekly Doha + 5 weekly Abu Dhabi services will be flown using a 414 seater A330-300IGW similar to how its KSA bound flights are also planned.

12JUN edition

Emirates has officially announced major changes to its medium and long haul route network for the upcoming IATA W13 season of which the main highlights are as follows:

LAX - capacity increased from daily B773ER to daily A380 effective 01DEC

DAR - capacity reduced from daily B773ER to daily A332

MAD - capacity reduced from daily B773ER to daily B772LR

ZRH - capacity increased from double daily B773ER to daily A380 + daily B773ER

CMB - frequencies increased from double daily to 17 weekly with all flights operated with a 434 seater B773ER

Air France has officially announced that it will be expanding its services to New York's JFK services from the on set of the upcoming IATA W13 season as the carrier looks to further increase its market share in the face of increasing competition from its rivals. Originally, AF was operating 4 daily (28 weekly) services into JFK, these will be increased to 32 weekly with additional 4 flights operated by an A332 departing JFK at 1740. Therefore in W13, the CDG-JFK will see a daily A380 + double daily B772ER + 11 weekly A332. Apart from JFK, AF also is increasing capacity in a major manner on its popular ABJ-Abidjan, Ivory Coast route from Paris-CDG from the IATA W13 season as well. Currently, AF operates 10 times per week to ABV using a daily B773ER + 3 weekly A343. The latter gets upgraded to 3 weekly B772ERs in turn. Lastly, concerning ABJ, many media outlets in Europe and Africa are reporting that ABJ shall also be the first African route to receive daily scheduled Airbus A380 operated flights by the French national carrier effective Sept 2014.


Philippine Airlines has officially revealed further information on its planned expansion into Saudi Arabia which shall take place effective 01DEC 2013. To begin with, all flights shall be operated with an all economy class configured Airbus A330-300 seating 414 passengers.

The breakdown of the operation is as follows:

DMM - 3 weekly nonstop flights on Days 1/3/5

RUH - 6 weekly nonstop flights on all days except SAT

JED - 4 weekly nonstop flights on Days 1/3/5/7

Above mentioned routes are available for sale across all major GDS booking systems.

Comments:

The DMM-MNL market segment has almost double the demand compared to JED-MNL plus DMM-MNL is higher yielding as well therefore since there is enough lead in time for PAL to change their schedule around, it should seriously consider making DMM 4 weekly and reducing JED to 3 weekly as this will benefit them far more than their original plan.


Virgin Atlantic has officially announced that due to on going cost cutting measures in place, it shall be suspending all its services to ACC-Accra, Ghana effective 23SEP13. Currently, VS operates 5 times per week to ACC using an A343 and has a one third market share on this high volume market segment. Its main competitor, BA operates a daily B772ER on this route.

Comments:

The one stop carriers such as IB, KL, TAP etc must be overjoyed with this move as they will get a huge chunk of the spill over traffic as BA's current ACC flights average 80% S/F and they cannot accommodate all the VS pax in the future.


Oman Air has officially announced that it has placed an order with Boeing for 5 additional new aircraft comprising of the largest member of the B737NG family i.e. the Boeing 737-900ER. WY plans to utilize the extra 20% capacity that these aircraft offer versus its B738s on its high volume Indian subcontinent and Jeddah routes in particular. The B739ER with a full payload has the capability to operate Muscat-Chittagong nonstop without any restrictions.


Qatar Airways has announced many changes to its Boeing 787 operational schedule as now that the lithium battery issue is passe, the airline can fully utilize its existing fleet of 5 aircraft and is expected to take delivery of a few more by the year end. The main highlights are as follows:

MUC - all double daily flights to be operated by a B788.

CPH - all daily flights to be operated by a B788

ARN - all daily flights to be operated by a B788

ZRH - all daily flights to be operated by a B788

OSL - all daily flights to be operated by a B788

LHR - one out of 5 daily flights to be operated by a B788 i.e QR 007/008 (dep DOH 0625 and dep LHR 1505)

In addition, QR too confirmed that it will be launching a new freighter service to ORD-Chicago effective 03JUL13. The routing will be Doha-Milan-Chicago and operated twice a week using a 101 ton Boeing 777-200LR freighter. According to the airline, it has 5th freedom traffic rights on the MXP-ORD-MXP sector which saw in 2012 a total of 16,500 tons of air freight carried between it on all airlines.


South African Airways has officially announced that it is accepting proposals from both Boeing and Airbus for an order for 30 wide bodied aircraft valued at US$ 7 billion as the carrier is extremely unhappy with the performance economics as well as its high leasing costs of its fleet of 9 Airbus A340-600s and 8 Airbus A 340-300s. The carrier last year had indicated that the Airbus A350 would be the perfect aircraft family to replace its A340s as it took into account the various payload restrictions that its primary JNB hub airport has due to elevation issues. The issue that SAA has with the A350 from a commercial stand point that it will not be delivered to them till the latter part of the decade and would prefer a twin engined replacement aircraft as soon as possible in order to save on operational costs.


Etihad Airways has officially revealed many capacity and frequencies increases for its medium haul route network for the current S13 season of which the main highlights are as follows:

BOM - capacity increased from daily A320 to daily A332

CAI - frequencies increased from 18 weekly to triple daily A320s

MSQ - frequencies increased from 3 weekly to daily nonstop flights using an A320

GRU - frequencies reduced from daily A346 to 3 weekly A345s

DME - capacity increased from daily A320 to daily A332 (operated as a daily same plane service to BOM)

ISB - frequencies increased from daily to 9 weekly

MCT - frequencies increased from 20 to 23 weekly

AMM - frequencies increased from double daily to 18 weekly


RAM (Royal Air Maroc) has officially announced that it will be launching a new long haul route i.e. GRU-Sao Paulo, Brazil effective 16DEC13 as the carrier looks to expand into emerging markets that can help feed its EU and Northwest African network via its primary CMN-Casablanca hub. RAM will fly to GRU nonstop from CMN 3 times per week using a Boeing 767-300ER.


Air Arabia of Sharjah, UAE has officially announced that due to rising demand out of Bangladesh for its services as well as for general travel to the GCC region, it shall be increasing its services to DAC-Dhaka effective 17JUN13. Currently, G9 operates 12 weekly nonstop flights from its SHJ base to DAC using an A320, these will be increased to double daily nonstop with a standardized schedule i.e. dep SHJ at 0325 and 1445 respectively.


Air Canada has officially announced two additional routes that shall be receiving its high density configured (458 seater) Boeing 777-300ERs from later on this year. These include daily Vancouver-Hong Kong (from W13) plus daily Vancouver-London Heathrow (from S14). The YVR-HKG route was a favorite from the on set to receive this aircraft type from the get go but YVR-LHR was not anticipated by many but it makes commercial sense as instead of operating a double daily A333 service to cater for peak summer season demand on this route, AC can save big time on operational costs by deploying the 450 seater B77W which would have almost the same capacity as two A333s. In addition to the above, AC also revealed 3 new European routes that its low cost subsidiary i.e. Rouge would be launching from May 2014 onwards. These include 5 weekly Toronto-Dublin + 3 weekly Toronto-Edinburgh + 3 weekly Toronto-Venice nonstop services all operated with B767-300ERs.


Singapore Airlines officially announced that it has placed a mega order with both Boeing and Airbus worth a total US$ 17 billion for its Airbus A350 and Boeing 787 models. With regards to the latter, SQ was revealed to be the first airline to order the largest B787 family member i.e. the Boeing 787-100X of which it ordered 30. These aircraft are ideally suited to replace the A333s, A343s and B772ER fleet of airplanes worldwide. As far as Airbus is concerned, SQ announced that it became the newest customer for the largest A350 family member as well i.e. the A350-1000X of which it ordered 30 + took an additional 20 options for the smaller A350-900 which can be converted to the larger -1000X if the need arises.