26APR edition

Abu Dhabi and India have signed a radically liberalized new bilateral accord giving each other the right to increase capacity from the current 13,000 seats per week to over 50,000 in three gradual stages by 2015. This is as a result of the 24% investment that Abu Dhabi’s Etihad Airways made into Jet Airways of which the latter will establish a new scissors hub at Abu Dhabi airport feeding into Etihad’s vast European/MENA and North American network from all across India. As far as the 5^th freedom rights beyond AUH are concerned, 9W revealed that it is interested in operating new flights to Najaf, Cairo, Beirut and Amman via AUH in the future using Boeing 737-800s/900ERs.

Analysis:

Etihad must be laughing all the way to the bank with this bilateral announcement  as from AUH they will get 100% of the allocation. Taking this into account, one would advise EY to increase its order of 7 A321s to at least 10 as it will require such aircraft to operate double daily services to the high demand markets of COK, DEL, BOM, TRV, MAA and CCJ in particular due to its better operating economics versus the smaller A320s. To operate a double daily A321 service into these Indian cities, EY would require a minimum of 6 A321s dedicated for India and use the remaining 4 for other network routes such as KHI, PEW, CAI, CMB, the newly added LHE/ISB flights, JED, BEY, RUH and KRT.

However what will be interesting to see is how the Indian carriers will utilize the extra 12,000 seats given to them incrementally annually till 2015 as there is no way Spice Jet, Air India Express and Indigo will allow Jet Airways to take the lion’s share as these 3 carriers too have future expansion plans from all across India into AUH built into their forecasts. If 9W really want to feed EY, they should initially focus on supporting EY with flights from Indian cities not operated by EY but can supply it with good feeder traffic beyond the AUH hub. These include CCU, PNQ, GOI, ATQ, LKO and JAI.    

The state of Qatar and Ethiopia have officially announced that the two countries have officially signed a newbilateral accord allowing for the national carriers of both countries to launch services. The bilateral permits for daily frequencies from each side. QR has been lobbying for many years to operate to ADD due to the large demand from the country for its prime GCC home market.

Analysis:

In order to ensure that QR reaps the maximum benefit, they need to launch ADD with a split schedule so that all the major markets beyond the GCC region are covered adequately with quick connections via DOH in both directions. Therefore the flight scheduling options should be as follows: 4 weekly day time services *This will ensure good 2 way connections to GCC, ISC and certain SE Asian destinations. QR XXX Dep DOH 0950 Arr ADD 1330 QR XXX Dep ADD 1430 Arr DOH 1805 3 weekly overnight services *This will ensure good 2 way connections to GCC, North America and Europe QR XXX Dep DOH 2140 Arr ADD 0120+1 QR XXX Dep ADD 0220 Arr DOH 0555 If daily operations are not allowed and only 4 weekly are, then each of the above should be flown twice a week as the main focus will be O&D + GCC bound traffic which is connected very well via DOH with the proposed schedule. Also regardless if 4 or daily frequencies are allowed, QR needs to utilize for 2 weekly flights at least an A330 (preferably on daytime services) as the yield and cargo revenue to/from ADD is very lucrative all across QR's network. Plus with the big market sizes on offer, it can easily fill an A330 year round on this medium haul route at 80-85% in the passenger cabin. ADD-GCC market sizes in 2012 were HUGE and very high yielding at the same time. There is only EK, ET and 3 weekly GF A320s to contend with as the SV flights mainly target KSA bound pax only.

Emirates has officially announced that it will be launching a new nonstop service to ARN-Stockholm effective 04SEP13 as the carrier looks to further expand its presence in the economically stable Scandinavian region. EK will be deploying the 350 seater Boeing 777-300ER from the on set to operate this new service with the below mentioned schedule:

EK 157 Dep DXB 0715 Arr ARN 1200

EK 158 Dep ARN 1355 Arr DXB 2255

The above schedule connects very well with its 5-6am arrival hub wave bank from SE Asia, India, GCC, Australia and certain African points where as the arrival from ARN into DXB connects nicely to the 0200-0330 departure hub wave bank to all over Australia, SE Asia and ISC region. The top markets that EK will be targeting to feed its ARN bound flights are BKK, DXB, DEL, BOM, PEK, IKA, HKG, Iraq, PVG, NRT and MNL.

EK too revealed that it shall be increasing its services to New York-JFK with the addition of a third daily frequency operated via Milan on a daily basis with 5^th freedom traffic rights. A Boeing 777-300ER shall be used to operate the new service effective 01OCT13. The new flight departs DXB at 0905 and arrives back by 2230 the following evening.

British Airways has  officially announced that it will be increasing its services to Seattle, USA effective 27OCT13 as the carrier looks to defend and increase its market share on this key route before Delta Airlines launches its own new SEA-LHR services. Frequencies by BA shall be upgraded from daily to 10 weekly nonstop flights using a B744 daily + 3 weekly B772ERs. The new flights depart LHR at 0920 and arrive back the next day at 0730 thus offering excellent connections via the LHR hub to India, Europe, Middle East and Africa. In addition to SEA, BA too revealed that from the onset of the IATA Summer 2014 schedule, it will be adjusting capacity to LAX-Los Angeles, USA by operating double daily A380 nonstop services instead of triple daily B747-400 operated flights as a double daily A380 will offer more or less the same seating capacity per day but the cost of operating 2 flights versus 3 is significantly lower hence the logic for the move.

In other BA related news, the airline revealed that it has placed a historical debut order with Airbus to supply it with long haul jets. An order for 36 Airbus A350-1000Xs was placed by the British flag carrier (the largest of the A350 family) and this aircraft type has been officially designated to replace the 52 strong Boeing 747-400 fleet. BA ordered 18 firm + 18 options of the A351s and is expected over the course of this decade to gradually exercise these options.

Qatar Airways has revealed on the GDS system that it will be suspending all flights to NCE-Nice, France currently operated 3 times per week using an A330 via Milan. The suspension comes into effect from 31MAY13. By offering a sub-standard 3 weekly two stop product for its NCE passengers versus a more convenient daily one stop option offered by EK, TK, LH, KLM, AF etc, QR was bound to fail along with the fact that the Boeing 787 groundings didn’t make life easier too for the carrier from a scheduling perspective.

Etihad Airways has officially announced that it shall be launching 2 new destinations this summer as it targets emerging markets that can act as good feeder destinations for its wide body operated Austral-Asia bound flights. The main highlights are as follows:

BEG – new daily nonstop service to be operated using an A320 effective 15JUN. This service is in line with EY purchasing a 49% stake in JAT Airways who in turn will code share on this new route as well as beyond via AUH to Australia and SE Asia. EY in return will code share with JAT via BEG to all across Russia and Europe.

SAH – new 4 weekly nonstop flights to be launched using an A320 and to be operated as all overnight services only departing AUH at 2245 and arriving back by 0650 thus targeting primarily GCC and Europe bound traffic.

Cathay Pacific has officially announced that it will be increasing capacity to Toronto, Los Angeles, Bangkok, New York JFK and Seoul this year in order to be ultra aggressive against ever expanding long haul competition especially from PAL and the Taiwanese carriers. The main highlights are as follows:

LAX – frequencies increased from 20 weekly to triple daily and maintained in W13; all operated with B773ERs

YYZ – frequencies increased from daily to 10 weekly in W13; all operated with B773ERs

BKK – frequencies increased from 6 to 7 times daily

ICN – frequencies increased from 4 to 5 daily flights

JFK – frequencies increased from 18 weekly to triple daily; all operated with B773ERs

UAE and Nepal have officially announced that their respective civil aviation authorities have struck a deal to further liberalize air traffic between the two countries. Currently 42 flights per week are allowed between the two states overall, but this has now been increased to 70 flights per week for each country’s designated carriers combined. The biggest UAE presence in KTM is of Fly Dubai who operate a double daily 189 seater B738 service on the DXB-KTM route. Emirates surprisingly does not fly to KTM though it can easily fill up a double daily operated Airbus A330-200 service into the airport with its GCC, KSA and European network alone.

Turkish Airlines has officially announced that it has placed a major order with Boeing for 95 Boeing 737s worth US4 9.4 billion at list prices of which the breakdown is as follows:

40 Boeing 737-800MAXs + 10 Boeing 737-900MAXs + 20 Boeing 737-800Xs + 25 options on the B738MAX version

Hawaiian Airlines has officially announced that it will be suspending all services to Manila effective 31JUL. HA currently operates 4 weekly A332s on the HNL-MNL sector but experiences high S/F at very low yield margins hence an unprofitable service to carry on. In its place, HA confirmed that it shall be launching new nonstop service to China i.e. Beijing effective April 16^th 2014 three times per week from its HNL base using an A330-200. The new service is expected to produce $81 million in annual visitor spending and $8.47 million in tax revenue for Hawaii, according to the Hawaii Tourism Authority.

05APR edition

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

26MAR edition

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

09MAR edition

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.

21FEB edition

The Turkish Government has officially announced that the Indian DGCA has awarded Turkish Airlines the bilateral right to increase its services to the country by 100% by upgrading its current daily Mumbai and Delhi flights each respectively to a double daily service using A330s. Currently, both routes are flown daily using a 289 seater A330-300. TK has also shown great interest in serving HYD, BLR and MAA if given the authority to operate there.
TK too revealed that it will be increasing its services to KIX-Osaka, Japan from the on set of the IATA W13 season. Current 5 weekly nonstop flights shall be increased to daily using an A330-200.
Analysis:

Due to a current shortage of wide bodied aircraft in its fleet, one would forecast that the earliest time that TK would increase its DEL and BOM bound flights is effective IATA W13 season. This is also because the Winter season is the peak season for travel to/from India hence it would be far easier filling up the flights from the on set of W13 versus S13.

The new daily flights are expected to depart IST between 0030-0130 and would arrive back by 1700 therefore nicely feeding TK's 1900-2100 EU departure hub wave bank as well as its 1820 IST-JFK bound service. This would mean a 1200-1230pm departure timing from India which VFR pax would definitely prefer versus an ungodly 4-5am flight!

Double daily A330s DEL is easily do able and fill able with TK's vast USA and EU network. The market size from DEL to EU/USA is far larger than BOM. Plus remember TK also carries a lot of pax to North Africa from India especially to Libya, Algeria, Tunisia, Morocco etc. Double daily DEL may also result in 1-2 EU carriers suspending their own DEL services or forcing some to reduce which in turn will help TK and in the future EK too when they expand.

BOM too can survive with two A330 flights daily but it would struggle versus DEL unless TK gets ultra aggressive with its pricing strategy. Cargo though for both flights (DEL/BOM) would be FULL with double daily flights regardless! Now if TK wants to get a bit creative and really operate double daily BOM flights, I would suggest that their BOM flight be extended to KTM-Kathmandu as the KTM-EU market size is big, higher yielding than EU-India + no EU carrier operates to KTM. IST-BOM-KTM is suggested because KTM on its own cannot support a daily A330 service but if operated via India, it can! The flight schedule proposed for IST-BOM-KTM-BOM-IST would look like this:

Dep IST 0135 Arr BOM 1030+1...will connect 2200-2300 inbound arrival hub wave bank from Europe
Dep BOM 1200 Arr KTM 1450
Dep KTM 2155 Arr BOM 0020+1
Dep BOM 0145 Arr IST 0605

In this way KTM-BOM-IST is connected very well to both TK's 0730-0830 EU/North Africa departure hub wave bank + the all important 0725am IST-JFK service where as the current BOM-IST flight is connected very well to the 1200-1300 departure hub wave bank which is already an established service. TK's current BOM flights are witnessing high S/F so this will help relieve the burden a little bit as well as provide very useful feed to the A333/B77W operated JFK services.

Boeing has officially released details of its new 787 model i.e. the Boeing 787-1000X aircraft which will be the largest of the B787 family. The main characteristics of the B781 are as follows:

• Seats 323 passengers in a standard 3 class configuration
• To be sold as an A343 and B772 replacement aircraft
• Flying range will be 7800 miles nonstop or 12,500 KM

Etihad Airways has officially announced that it will be increasing its flights to LOS-Lagos, Nigeria effective March 31st 2013 as the carrier looks to capture more of the booming Nigeria-SE Asia/India traffic movement. Services currently operated 5 times per week nonstop will be increased to daily nonstop using an Airbus A 330-200. 


PIA has officially announced that it shall be reinstating its flights to ORD-Chicago, USA effective 05JUN 2013 as the carrier looks to once again try its luck in this market segment where it has suspended service a total of 4 times over the past decade. The routing will be as follows:

Days of service: WED/SAT
WED flight is routed KHI-LHE-BCN-ORD-BCN-ISB
SAT flight is routed ISB-KHI-BCN-ORD-BCN-LHE

Comments:
Once again PIA is biting off more than it can chew. The routing itself is mind boggling and they will not be able to compete effectively with QR launching ORD daily nonstop from April 2013 + having EY/TK already established there. Note that from ORD and BCN there is no connection to KHI on the return unless you clear customs/immigration in North Pakistan and change terminals from international to domestic. This is poor planning on behalf of PIA since KHI-ORD is the biggest market segment in terms of annual passenger demand! Expect the route to be once again suspended within 8 months of it being re-launched.

PIA's strategy in USA should solely be focused on JFK (the largest PAK-USA market segment) and then via JFK code sharing with either AA or DL to beyond points (preferably with AA). With JFK flights in S13 being routed via SNN which would allow PAK citizens to clear immigration/customs at SNN airport itself, this provides PIA a good opportunity to experiment with the following:

*All flights to operated with B777-200ER/LRs
3 weekly LHE-SNN-JFK
2 weekly KHI-SNN-JFK
2 weekly ISB-KHI-SNN-JFK
By operating in the above mentioned manner, they have the potential of really hurting EY/TK/QR/EK's PAK-NYC market share in both directions!


Emirates has officially announced that it shall be launching new nonstop flights to Manila's secondary airport i.e. Clark International which is located 80km north of the city. EK will be inaugurating the service from 01OCT13 onwards using a Boeing 777-300ER (434 seater) on a daily basis with flights departing DXB at 0400 and arriving back by 2300 DXB time. In other EK related news, it has officially filed with MXP airport authorities for slots to operate to New York's JFK airport via Milan on a daily basis using a Boeing 777-300ER effective October 2013. The flight schedule filed is as follows:

Days: Daily B77W
EK 205 Dep DXB 0910 Arr MXP 1350 /// Dep MXP 1600 Arr JFK 1810
EK 206 Dep JFK 2215 Arr MXP 1215+1 /// Dep MXP 1400 Arr DXB 2205


Egypt Air has officially announced few capacity changes for its medium haul network for the upcoming IATA S13 season of which the main highlights are as follows:
DOH - frequencies increased from 10 weekly to double daily nonstop i.e. 10 weekly B738s + 4 weekly B77Ws
BGW - frequencies increased from 3 to 4 weekly nonstop flights
BRU - frequencies increased from 6 weekly to daily
FRA - capacity increased from daily B738 to daily A332
TUN - capacity increased from daily A320 to daily A321


Lufthansa has officially announced that for the year ended 2012, it has posted a record net profit of US$ 1.32 billion driven largely by sales of its equity investments. As a result of this impressive performance, it has officially requested a tender to supply it with brand new 100 narrow bodied plus 8 wide bodied aircraft for delivery effective 2015 onwards. It is expected that the order will be split as 8 Boeing 747-800s + 100 Airbus A320NEO family aircraft.


Fly Dubai has officially announced that it has posted its first net profit since its launch in 2009 amounting to US$ 41 million as the carrier looks to consolidate its presence in the MENA region and continue to offer nonstop service to under served niche markets within a 6 hour flying radius of its Dubai hub. Alongside these impressive results, FZ too revealed that it will be launching new 4 weekly nonstop flights to Juba, South Sudan effective April 2013 using a 189 seater Boeing 737-800. Flights shall depart DXB at 10am and arrive back by 9pm DXB time and will be interlined with Emirates. As a result, it will offer convenient connections via DXB in both directions to India, SE Asia, JFK and Europe.

13FEB edition

Air Canada has officially announced that it will be reconfiguring 5 of its soon to be delivered new Boeing 777-300ERs into a high density configuration allowing it to serve specific volumetric demand markets from Canada that witness more economy class travel than premium and also enable it to compete more effectively against its main low cost trans-atlantic rival i.e. Air Transat on certain key European routes. Currently, AC's B773ERs seat 349 passengers in a 2 class configuration, however from 11JUL13 onwards, the first reconfigured high density B773ER will have 458 seats on board with the introduction of a premium economy class cabin as well. The new layout will be 36 business class (flat beds) + 24 premium economy + 398 economy class and its first route will be Montreal-Paris.

Analysis:

This is how you can make good money on long haul VFR (ethnic) routes operated with B777-300ERs by having a ultra high density configuration perfectly suited to the market demographic hence reducing your operating cost per seat unit. A pioneer of this successful concept was Emirates since the mid 1990s using 434 seater B773As on high density routes from DXB to PAK, India, MNL and DAC. With this layout, Air Canada thus becomes the airline with the second highest seat count for a legacy carrier operating long haul flights using a B77W as # 1 is Air France (Caribbean/BKK flights layout) which has 478 seats on board its B77Ws.
Since 5 B77Ws are being reconfigured and already one aircraft going to be dedicated for YUL-CDG, the other 4, I would suggest should be used as follows:

YVR-HKG for which 2.5 aircraft would be required
YUL-FRA for which 1 aircraft would be required

However, if this concept works out and I really hope so it does as it has all the necessary tools to succeed, I think AC can easily do with 11 B77Ws configured in this layout to be operated in the following manner:

2.5 for daily YVR-HKG
1 for daily YVR-LHR

1 for daily YUL-CDG
1 for daily YUL-FRA

1 for daily YYZ-LHR
2.5 for daily YYZ-PEK

New Routes:

• 1 for 4 weekly YVR-MNL (90,000 pax O&D market size alone and for rest of Canada its an additional 230,000 pax). Via YVR, AC can also get some transfer traffic bound to U.S. West Coast especially SEA, ORD, Texas and LAS markets where PAL is offline. Some might say that YYZ-DEL is also a feasible option, but after doing some rough calculations, it is not especially since DEL-YYZ sector on a 458 seater will be severely payload restricted. Note that when AI operated DEL-YYZ nonstop with a 340 seater B77W it could not carry any cargo so expect AC's B77W too have a payload penalty of 100 pax at least on DEL-YYZ flight portion. In comparison, Canada-MNL market size is more or less the same as Canada-DEL but the average fare is 30% higher to MNL versus DEL and its a shorter flying distance. Plus unlike Canada-DEL which actually has major seasonal demand i.e. majority of travel is between OCT-FEB, Canada-MNL is year round. Last but not least, Canada-MNL has way less in-direct one stop competition versus Canada-DEL hence more easier for AC to fill up the plane.

• 0.5 for 3 weekly YUL-CMN (94,000 pax O&D market size alone) ...to be replaced by B789 when it gets delivered and increased to 4 weekly by that time.

YVR-HKG and YYZ-PEK, are required as these are long haul routes where the operating costs of flying B77Ws shall remain the same but the extra potential revenue that 109 seats brings to the table on these 2 very high volumetric routes shall definitely come in handy. There are 36J class seats on board which would translate into a 86% S/F on the current 42J B77W which is adequate as well. Some people might argue that YVR-MNL/HKG and YYZ-PEK would not be possible to operate using a 458 seater B773ER, for which my counter argument is that Air France uses a 478 seater on BKK-CDG which is a 12 hour 20 minute flight without any payload issues and Etihad Airways uses a 412 seater Boeing 777-300ER on AUH-ORD which is a 14 hour 45 minute flight i.e. longer than YYZ-PEK by nearly 2 hours plus EY offers 2 pieces baggage allowance compared to AC's 1 piece!

Etihad Airways has officially announced few capacity increases for its medium haul route network for the IATA S13 season of which the main highlights are as follows:

ISB - frequencies increased from daily to 11 weekly nonstop flights i.e. 3 weekly B773ERs + 8 weekly A320s

KRT - frequencies increased from 5 weekly to daily nonstop flights using an A320

IST - capacity increased from daily A320 to daily A332


Turkish Airlines has officially announced that it has placed another order with Airbus for 5 additional wide bodied aircraft. TK confirmed that these are for 5 A330-300s of which 2 are firm and 3 are held as options. Deliveries are expected in 2014-15 and as IST airport gets congested, TK will be upgrading a lot of its high density European routes from B738s to A333s especially where there is a lot of cargo demand such as MUC, MXP, FRA, AMS and CDG.

In addition, TK revealed grand expansion plans for its secondary hub at SAW-Sabiha airport in Istanbul for the upcoming IATA S13 season of which the main highlights are as follows:
*All flights to be operated using a B737-800

SAW/KWI - new daily flights to be launched
SAW/AMS - new daily flights to be launched
SAW/LGW - new daily flights to be launched
SAW/VIE - new daily flights to be launched
SAW/MXP - new daily flights to be launched
SAW-CDG - new daily flights to be launched
SAW/GYD - new daily flights to be launched
SAW/TBS - new daily flights to be launched


Cathay Pacific has officially announced that it will be increasing capacity to LHR-London Heathrow in a significant manner effective 27JUN13 onwards. Currently, CX operates 4 times daily on the HKG-LHR sector however from 27JUN, this shall be increased to 5 times daily using a B773ER four times a day + a B744 once daily. The new flight is CX 239/238 which departs HKG at 1025 and arrives back the next day at 1715 HKG time.


Oman Air has officially announced that it will be increasing its services to HYD-Hyderabad, India effective immediately as the carrier looks to take full advantage of the new bilaterals being awarded to by the Indian Govt. Frequencies on the MCT-HYD route shall therefore be increased from daily to double daily using a Boeing 737-800 with flights departing MCT at 0120 and 1000 local time respectively


China Southern Airlines has revealed many capacity changes for its medium and long haul route network for the upcoming IATA S13 season of which the main highlights are as follows:

*All flights mentioned below are operated from its primary CAN-Guangzhou hub base

DME - new 3 weekly nonstop service to be launched using an A332 eff 19JUN

MEL - frequencies increased from daily to 10 weekly nonstop using an A332

YVR - frequencies increased from 3 weekly to daily nonstop using a B772ER

DEL - frequencies increased from 10 weekly to double daily i.e. daily B757 and A332 each respectively

Fly Dubai has officially announced that it has been granted bilateral permission by the Pakistani Government to launch 2 new routes to the country i.e. Sialkot and Multan effective immediately. As a result, FZ confirmed that it will be doing so with pleasure effective 13MAR when it inaugurates 3 new weekly flights each respectively to both cities using a 189 seater Boeing 737-800. The schedule for both these new routes have the flights departing DXB at 2200 and arriving back by 0715 DXB time. The main markets for FZ from here are JED, KWI, DMM, DOH, RUH and O&D to DXB along with interline traffic bound to UK, FRA and USA.


Bahrain Air has officially announced that it has filed for bankruptcy and shall be suspending all of its flights effective immediately as the carrier struggles with a financial crisis, large payments owed to Bahrain Airport Company and a host of other issues of which a detailed statement is available to read on their website http://www.bahrainair.net

There has been no comment from Gulf Air on whether it plans to increase its own services on any of the commonly flown routes. The main interest for GF would obviously revolve around BN's India frequencies bound to Calicut and Trivandrum as these are high volume routes with huge O&D demand to BAH along with KWI, Saudi Arabia and DOH.


LOT of Poland has officially announced that due to high demand in summer for its USA bound services, it shall be increasing capacity by 40% on each of its flagship Chicago ORD and New York JFK services effective 01JUN 2013 till 30SEP. Both routes shall witness an increase in frequency from daily to 11 weekly nonstop flights each using its new Boeing 787-800s. The new flights arrive and depart USA late evening i.e. ORD 1940/2150 (arr/dep) and JFK 2100/2255
(arr/dep)


KLM has officially revealed few changes to its medium/long haul route network for the upcoming IATA S13 season of which the main highlights are as follows:

BAH - frequencies increased from 5 weekly to daily using an A332

NRT - frequencies increased from 10 to 11 weekly using a mixture of B777s and B747-400 Combis

ALA - frequencies increased from 4 to 5 weekly using an A332

LIM - capacity increase from daily B772ER to 4 weekly B773ER + 3 weekly B772ER
AUH - frequencies increased from 5 weekly to daily using an A332


TAAG of Angola has officially announced that it has struck a deal with Boeing to purchase 3 additional new Boeing 777-300ER aircraft from the manufacturer to be delivered from 2016 onwards. Currently, TAAGs long haul fleet consists of 3 B772ERs and 2 B773ERs of which the latter seats 293 pax in a 3 class layout i.e. 12F/56J and 225Y. It is worth noting that LAD is the highest yielding long haul African route of all European airlines that operate there due to the country's vast oil wealth and its status as Africa's largest oil exporter. There is also massive demand to China from Angola with large investments being made by Chinese companies in various sectors of the Angolan economy. The total market size between Angola and China is approximately 75,000 passengers annually out of which 90% is bound to Beijing itself alone!