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.

26MAY edition

Qatar Airways has officially announced many changes to its route network for the current IATA S13 season as well its future plans of which the main highlights are as follows:

CAI - frequencies increased from double daily to 16 weekly i.e. daily B77W + 9 weekly A320/A321

KHI - frequencies increased from daily to double daily

LHE - frequencies increased from 4 weekly to daily

PEW - frequencies increased from 2 to 3 weekly

Three new destinations were revealed to be added to the airline's rapidly growing network which are Philadelphia (daily effective April 2014), Addis Ababa (daily effective September 2013) and Clarke Airport (Manila secondary airport effective October 2013).

As far as fleet news is concerned, QR's CEO revealed that the airline is keenly interested in being a launch customer for the newly launched Boeing 777X program and would be willing to place an order for 50 aircraft comprising of both the B778X and the B779X. Along with this, Mr Baker too disclosed that QR may sign an order with Airbus at June's Paris Air Show for a dozen more Airbus A330s as a safety measure to protect its expansion plans against any further delays to the B787 and upcoming A350 delivery schedules.

Comments:

QR's new PHL bound flight schedule is revealed to be departing DOH at 0100 and arriving back the next day by 0730am DOH time respectively using a B777-300ER (77W). Unfortunately, this schedule does not offer 2 way connectivity to the high volume India market in either direction which would be a vital source of feeder traffic for a new PHL service. In fact, the only Indian subcontinent routes that connect in both directions to PHL with this released schedule are CMB and KTM of which both have minimal demand on this sector. The reason for QR choosing PHL is because its now a major One World alliance hub via the take over of US Airways by American Airlines. However one feels that even though the flight schedule timings might be changed to match the current JFK service, using a 335 seater B77W for PHL is a bit too much but the B787 on the other hand is an ideally sized aircraft to use here efficiently.


Emirates has officially announced that it will be undertaking significant expansion of its route network during the current IATA S13 season as well as Winter 2013/14 of which the main highlights are as follows:

ISB - frequencies increased from 8 to 11 weekly effective 17JUN

PEW - frequencies increased from 3 to 5 weekly effective 17JUN

BNE - capacity increased from double daily B77W to daily A380 + daily B77W

AKL - capacity increased to triple daily A380s operated via BNE/MEL and SYD each respectively

CMB - frequencies increased from 21 to 24 weekly with all flights operated using a mixture of B772s and B773s

HKG - capacity increased effective 01JAN14 to double daily A380 + daily B77W + daily A332


Ethiopian Airlines has officially announced that it will be increasing its services to Dubai effective 01JUN13 as the airline continues to witness very high demand on this route. Currently, ET operates 17 weekly services into DXB and these will be upgraded to triple daily nonstop flights using a B787 daily + B738 daily + B763ER daily.

Comments:

Emirates surprisingly only operates a daily A332 into ADD when its direct competitor operates much more. The O&D demand between DXB and ADD can alone fill up over 60% of an additional A332 operated service.

Turkish Airlines has officially announced that it will be heavily expanding its medium and long haul network during the course of 2013 in the following manner:

NRT - frequencies increased from daily to double daily nonstop i.e. daily B77W + daily A332 effective NOV13

KTM - four new weekly nonstop flights to be launched using an A332 effective 01SEP13

CAI - frequencies increased from 17 weekly to triple daily effective 17JUN13

HBE - frequencies increased from 4 weekly to daily

ELQ (Gassim, Saudi Arabia) - four new weekly nonstop flights to be launched using a B738 effective 03JUN13

MGQ (Mogadishu) - frequencies increased from 4 to 5 weekly flights operated via Djibouti


Kuwait Airways has officially announced that it has received approval from the Kuwait Govt to place an order with Airbus at the upcoming Paris Air show for a major order worth over US$ 4 billion. KU confirmed that the bid from Airbus was overall US$ 280 million cheaper than Boeing's bid and the final aircraft order will consist of 25 new planes replacing entirely its current fleet of 17 aircraft. The breakdown of the 25 airplane order is for 10 A 350-900s + 15 A 320NEOs + an option for five A359s and five A320NEOs each respectively. In an effort to help it bridge the gap between now and the delivery of its new planes, Airbus included in the deal an offer to help place with KU thirteen used A320/A321s and A332/A333s.

Source: http://www.bloomberg.com/news/2013-05-12/kuwait-airways-said-to-plan-purchase-of-25-airbus-planes.html


Philippine Airlines has officially confirmed that due to poor performance of its Delhi route currently operated 3 times per week using an A320 via Bangkok, it shall be suspending all services effective 17JUN13. PAL has never been serious in giving this route a chance to succeed with its route structure, choice of aircraft and weekly frequency from the on set. Operating it in the first place via BKK was bound to fail when it has to compete with multiple daily 9W, AI, TG nonstop flights + CX daily. In addition, one does not operate such a long flight with a stop en-route using an A320 as the operating cost per seat unit is too high. In other PAL related news, it has confirmed that the 4 additional A343s that it has dry leased for its network expansion are ex Iberia (Spain) birds and these shall be used for new services to AUH, DME and IST later on in the year.


Oman Air has officially announced that it has placed an order for 3 additional Airbus A330-300s as the carrier looks to expand its long haul network in the short term with Manila and Jakarta new short listed routes. It is expected that these 3 A333s will be configured in a high density configuration seating at least 290-300 passengers versus the current premium heavy 230 seat version that it operates.


Thai Airways has officially revealed many changes to its route network for the upcoming IATA W13 season of which the main highlights are as follows:

VIE - new nonstop flights to be launched effective 01NOV13 using a B772ER operated 3 times per week

PEK - capacity increased to double daily B744s

OSL - capacity increased from daily B772ER to daily B744

AMD - frequencies increased from 2 to 4 weekly

DME - frequencies increased from 4 to 5 weekly using a B773

LHR - capacity increased to double daily A380s

TPE - frequencies increased from double daily to 18 weekly

HND (Tokyo Haneda airport) - capacity reduced from daily B744 to daily A346


Lufthansa has officially announced major capacity changes to its route network for the upcoming IATA W13 season of which the main highlights are as follows:

DMM - frequencies increased from 4 weekly to daily flights using an A333

YVR - capacity increased from daily A343 to daily A346

PEK - capacity reduced from daily A380 to daily B748

JNB - capacity increased from daily B744 to daily A380

NRT - capacity reduced from daily A380 to daily B744

03MAY edition

Emirates has officially announced that it will be significantly increasing capacity to Hong Kong and Bangkok from the on set of the IATA W13 season as the carrier looks to increase its market share on the Europe-Far East market segment in particular. 

The main highlights are as follows:

HKG – new 4^th daily service introduced using an A332 (dep DXB 2100 and arrives back into DXB at 1455).  As a result, HKG becomes a daily A380 via BKK + daily A332 nonstop + double daily B77W!

BKK – capacity increased with EK 372/373 (dep DXB 0940) from daily B77W to daily A380. Thus BKK becomes a double daily A380 + double daily B77W operated sector.

The Indian Government has officially announced some clarifications on the newly liberalized bilateral accord signed between Abu Dhabi and India as a result of the “Jetihad” alliance. The main highlights are as follows:

DEL/BOM – Etihad is restricted to operating 3300 seats per week to each city respectively. Taking this into account, the choices EY have to BOM and DEL are to operate either triple daily A320 flights or double daily A321 or daily A332 + daily A321. (Personally speaking from a commercial aspect, a double daily A321 makes the most sense, but from a market share penetration point of view, a daily A332 + daily A321 takes the cake especially with now the support of 9W on board for domestic India and beyond AUH feed + cargo for the A332 bound to EU/USA/Africa)

Rest of India – Etihad can only operate daily frequencies but can increase capacity to COK, BLR, HYD, AMD, TRV, CCJ and MAA from daily A320 to daily A321 or A330/B77W if it chooses to. EY also has the right to launch services to CCU and JAI if it wishes to do so.

Good articles on this deal are mentioned below with passenger data stats obtained from IATA MarketIS which is a software used by major airlines and consulting firms worldwide identical to Shepherd System Market Master and PAXIS:

http://www.bangaloreaviation.com/2013/04/jetihad-is-born-etihad-buys-24-stake-in.html

http://centreforaviation.com/analysis/etihad-jolts-the-status-quo-again--jet-airways-and-wait-for-it-air-canada-are-its-newest-partners-107102

Air India’s CEO has officially announced that the airline will engage in an aggressive long haul expansion plan to counter the consequences of how the newly formed alliance between Etihad and Jet Airways will impact its market share and revenue on services to Europe and North America in particular. AI’s CEO revealed that the new destinations that the airline has short listed for launch in 2013/14 are Milan, Rome, Moscow, Sydney, Melbourne and Birmingham and all these new services will be exclusively operated by the Boeing 787-800s only which seat 256 passengers in a 2 class configuration i.e. 18J + 238Y. 

Analysis:

Unfortunately the choice of BHX seems more political rather than commercially oriented because if AI had done some basic research, they would have noticed that the Manchester-India market size is approximately 50% larger than BHX-India plus MAN-India is higher yielding and in turn has a greater demand for SE Asia (6^th freedom transfer traffic) via AI’s DEL hub which it can use to feed pax on to HKG, BKK, ICN, SIN, KTM, DAC and Australia.

In 2012, according to Shepherd system data, the total market size between MAN-India was 190,000 (dominated by EK and QR) passengers versus BHX-India being 130,000 (dominated by EK overall). Demand from BHX is mainly concentrated to ATQ/DEL and sees virtually no premium demand. Currently, Emirates, Uzbekistan Airways and Turkmenistan Airlines dominate this market segment (ATQ/DEL) and the Central Asian carriers in particular offer extremely low fares to fill up their flights. 

As far as flying to Australia is concerned, this was in the pipeline since 2010 with two options put forward i.e. DEL-MEL-SYD-DEL triangular service with a B787 or DEL-MEL nonstop terminator as the DEL-MEL market size is way bigger than DEL-SYD. However, the current plan as per Air India is to operate it as a triangular service using a B787. This is not feasible mainly because by having extra costs incurred via a triangular service with no 5^th freedom traffic rights using a 256 seater aircraft. Instead, due to the market size demand between MEL/SYD (combined) and DEL totaling over 200,000 passengers annually, it should be operated using a 342 seater Boeing 777-300ER as it offers 34% more passenger seating capacity + more cargo uplift carrying capacity hence overall more revenue generation potential at a higher operational cost which would be negated with the extra pax/cargo revenue derived. 

With regards to FCO and MXP, the MXP-DEL market size is 3 times bigger versus FCO and higher yielding as well. AI should not look at FCO unless it has intentions of joining Sky Team which it doesn’t  as even if it did, it would be more lucrative launching DEL-AMS instead or increasing DEL-CDG capacity versus operating to FCO. The potential for AI in MXP in terms of sheer volume is most decidedly there, but the issue for them will be how to revenue manage it !

Qatar Airways has officially announced that it will be significantly increasing capacity to COK-Kochi, India effective 01JUN13 in order to capitalize on the growing traffic demand between Kerala and the GCC in particular. Currently, QR operates 11 weekly nonstop flights into COK using a 177 seater A321, however from June, all these flights will be upgraded to a 260 seater A330-200. Thus, overall an increase of 47% in capacity along with the capability of up-lifting an additional 10 tons of cargo per flight in each direction.

Spice Jet of India has officially announced that due to surge of bookings on its recently launched Delhi-Guangzhou services, it will be increasing frequencies on this sector. Currently, it operates 4 times per week from DEL to CAN using a B737-800 and these shall be increased in turn to 6 times per week using the same aircraft type effective May 2013. The Delhi-Guangzhou market size according to Shepherd system in 2012 was 37,000 and two airlines operate nonstop flights on this route i.e. Spice Jet and China Southern.

 

British Airways has officially announced a series of capacity and frequency changes for its long haul route network for the IATA W13 season of which the main highlights are as follows:

BOS – frequencies increased from triple daily to 24 weekly

DEL – capacity increased to double daily B744

JNB – frequencies increased from double daily to 17 weekly

BOM – capacity increased to double daily B744

PEK – capacity reduced from 6 weekly B744s to 6 weekly B772ERs

MIA – frequencies reduced from triple daily B744s to 18 weekly

Philippine Airlines has officially announced that it shall be embarking on a major expansion of its GCC network from the on set of the IATA W13 season using a fleet of brand new Airbus A 330-300s exclusively. It will be utilizing the planes under the PAL Express branding which will offer a dual class configuration of premium economy (42 seats) and normal economy class (300 seats) only  + it will also end all code sharing agreements in place with GCC carriers on the MNL-GCC sectors it intends on operating.

In other PAL news, the airline has dry leased 4 additional A343s in a dual class configuration and shall be using them to launch new services to Istanbul and Moscow this year which were previously announced. PAL’s CEO also confirmed that the airline has officially filed with the U.S. DOT to launch new flights to New York City effective November 2013 which shall be operated on a 5 weekly basis using a Boeing 777-300ER. PAL is also taking delivery of 2 new B77Ws from Boeing in Q3 which will be used for this new route.  

The main highlights are as follows:

MCT – new 4 weekly nonstop flights to be launched effective 30JAN 2014

DMM/RUH/JED – new daily flights to be launched to each Saudi city effective 01DEC13 using an A333

DXB – new flights to be launched effective 01NOV13

DOH - new flights to be launched effective 01NOV13

AUH – new 5 weekly nonstop flights to be launched effective 01OCT13

Official press release: http://www1.philippineairlines.com/news-and-events/pal-revs-expansion-kicks-12-new-routes/

Comments:

Excellent move by PAL to take advantage of the growing market segment between MNL and GCC especially now that the biggest market i.e. KSA has agreed to implement the minimum US$400 per month salary wage for labor workers from the Philippines. According to Shepherd System Market Master, the 2012 market sizes on the MNL-GCC sector were as follows:

DXB – 460,000 // RUH – 250,000 // DMM-190,000 // JED- 130,000 // KWI- 110,000 // DOH- 105,000 and AUH 80,000

Manila-New York City combined to JFK and EWR is also a high volume market seeing 91,000 passengers flying last year. It will be interesting to see if the B77W can indeed fly nonstop with a full payload or operate via Anchorage.  

Ethiopian Airlines has officially announced that it will be increasing its frequencies to YYZ-Toronto effective 10JUN13. Currently, ET operates twice a week from ADD via FCO to YYZ using a B777-200LR, however from mid June, a 3^rd weekly frequency shall be added using a Boeing 787-800 on THU flown in the same manner.

PIA of Pakistan has revealed on the GDS system that will be no longer going ahead its intentions of re-launching services to ORD-Chicago, USA as the carrier faces a massive operational headache by having only 19 aircraft in its fleet for the IATA S13 season deemed air worthy. All two weekly flights are now showing deleted from across all major GDS systems and in addition to ORD, flights to BCN-Barcelona, Spain are also showing cut off from 01AUG. Between June-August, PIA will be operating 2 weekly terminator flights to BCN from North Pakistan only.

Comments:

Very smart move to cut off ORD as it would have been a waste to operate there with the fleet situation is very critical. PIA should not think of re-launching ORD at all in the short term and even long term future until it first increases its JFK services from the current 3 to at least 5 times per week! Demand from JFK alone to PAK is greater than the rest of USA altogether combined to Pakistan hence PIA needs to focus on increasing its market share first to/from JFK rather than venturing back to places such as IAD, IAH and ORD.

Sri Lankan media has reported this week that Sri Lankan Airlines has made a decision on which aircraft it intends on purchasing soon to modernize its long haul fleet especially its aging A340-300s which have been around since 1994. According to the below mentioned link, six Airbus A330-300IGWs + 4 Airbus A 350-900s will be ordered in the near future along with a further three A359s listed as options. The new A333IGW does have the legs to operate its flagship route CMB-LHR nonstop without payload restrictions. These aircraft will be the ones used to firstly replace the A343s.

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