Emirates Group chairman and CEO Ahmed bin Saeed Al Maktoum stated (15-Nov-2018) he anticipates the next six months will be "tough", however the group's foundations "remain strong". He stated the airline's hub in Dubai continues to attract travel demand, with 9% more customers enjoying Dubai in H1FY2018/19. The airline expects the demand to remain healthy as new attractions come online and the city gears up for Dubai Expo 2020. Moving forward, Emirates is "firmly" focused on business sustainability, and "we will do this by being agile to capitalise on opportunities, and investing to serve our customers even better with high quality products that they value". [more - original PR]
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The latest decade has been one of relative stability for the aviation industry, but the tide has almost certainly now turned, and it is certainly not for the better. A rise in fuel costs, increased global trade restrictions, political uncertainty and the potential for excess capacity have been among the biggest influencing factors from the past 18 months. But, what can we expect for the year ahead? What are the risks and opportunities in 2019?
CAPA – Centre for Aviation will once again attempt to address those questions with its World Aviation Outlook Summit (27/28-Nov-18, Berlin), which has more than nine hours of agenda content designed to provide a market outlook for 2019 and review the commercial and operational pillars that will drive global airline strategic decision-making.
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Saudia adds lie-flat on narrowbody A320ceos and A321neoLRsSaudia has introduced a lie-flat business seat on a portion of its A320 fleet, joining a small but fast growing group of airlines with narrowbody lie-flat products. Saudia’s new narrowbody lie-flat product is part of a broader initiative aimed at improving its service offering and attracting more sixth freedom passengers.
Saudia plans to outfit lie-flat business seats on 22 narrowbody aircraft – seven retrofitted A320ceos and 15 new A321neoLRs. The first retrofitted A320ceo was recently completed and is currently serving Geneva.
There are also plans for the airline to retrofit another six A320ceos over the next six months and deploy the subfleet to six existing destinations in continental Europe. Saudia also intends to deploy a new fleet of 15 A321neoLRs, slated to be delivered from 2020 with the same lie flat seats, mainly on existing European routes. New destinations in the UK and eastern India are also under consideration.
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LCC/ULCC model disrupting Latin America aviationThere’s been a raft of changes in Latin America’s low cost sector during the past two to three years, with start-ups in Chile, Argentina, Peru and Central America. At the same time, some of the older LCCs in Latin America have built up sizeable seat share in two of the region's largest markets – Brazil and Mexico.
As new competitors have emerged the region’s existing airlines have adapted their models to ensure that they compete effectively, since low cost ambition in Latin America shows no sign of abating. The ULCC group Viva plans to decide on a third country for its franchise within the region over the next 12 to 24 months, and the Chilean LCC Sky also plans to launch a new airline in Peru during 2019.
All of the ambition is driven by the still untapped potential in Latin America. The country’s largest airline – LATAM Airlines Group – calculates trips per capita in its domestic South American markets at just 0.6 in 2017. Given the difficult topography of much of Latin America, where other transport modes are inadequate, this could become much higher than other markets.
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Alitalia: politics trumps business logic. AgainThe 31-Oct-2018 press release from perennial loss-maker Alitalia that its administrators had received two binding offers and a non-binding expression of interest was in accordance with the previously communicated timetable for the planned sale of the airline. However, it may turn out to be as meaningless as all the other announcements and deadlines about the sale of Alitalia since the airline entered administration in May-2017.
The most recent announcement did not divulge the names of the bidders, but easyJet publicly revealed itself to be behind the expression of interest. In addition, Italy's state-owned railway company Ferrovie dello Stato had already said that it would make an offer (in effect, as a proxy for the state). Several media outlets reported that the third bidder was Delta Air Lines, although it would only be allowed a minority stake. Lufthansa, previously a bidder, has said that it is no longer interested.
The administrators will have to propose the best offer to the government. Although the Italian state currently has no shareholding in Alitalia, the final decision will be for the Minister for Economic Development. As in the past with Alitalia, politics are likely to trump any other logic.
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Los Angeles Int'l Airport: strong growth drives new investmentLos Angeles International airport (LAX) has one of the most diverse operating profiles in the US. All three US major global network airlines describe the airport as a hub, yet none of those operators has more than a 23% share of departing frequencies. Los Angeles is also a key market for other US airlines, including Southwest and Alaska.
American, Delta and United not only use LAX as a hub, but also join other airlines in working to ensure that they capture their fair share of the airport’s O&D traffic, which is the largest in the US.
Although passenger growth at Los Angeles is among the most rapid at US airports, its customer experience has been lagging. The airport authority and airlines are both working to fix the obstacles that create a negative perception of the airport, and numerous projects are under way at the airport as passenger throughput could reach 100 million annually by 2040. However, although airlines are welcoming the upgrades, charges at LAX will inevitably grow to cover some of the construction costs.
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Shannon Group CEO Matthew Thomas forecast (13-Nov-2018) the west of Ireland will be without "critical EU connectivity" in a post Brexit situation. Shannon Airport currently has UK hub connectivity through London Heathrow and is welcoming Government support to implement "a strategic route development fund and regional tourism targets". Mr Thomas said the hub "provides the air access needed to grow tourism numbers, conduct business and attract FDI investment from Europe". [more - original PR]
Air Mauritius Group reported (14-Nov-2018) the following financial highlights:
- Three months ended 30-Sep-2018:
- Revenue: EUR146.2 million, +7.0% year-on-year;
- Operating expense: EUR141.5 million, +23.3%;
- Fuel: +51%;
- Operating profit (loss): (EUR2.4 million), compared to a profit of EUR14.8 million p-c-p;
- Net profit (loss): (EUR2.8 million), compared to a profit of EUR11.8 million in p-c-p;
- Passengers: 464,689, +8.8%;
- Passenger load factor: 81.3%, +0.6ppt;
- Six months ended 30-Sep-2018:
- Revenue: EUR268.2 million, +5.9%;
- Operating expense: EUR272.7 million, +21.5%;
- Fuel: +44%;
- Operating profit (loss): (EUR19.7 million), compared to a profit of EUR15.1 million in p-c-p;
- Net profit (loss): (EUR17.7 million), compared to a profit of EUR6.6 million in p-c-p;
- Passengers: 867,733, +7.1%;
- Passenger load factor: 79.3%, stable;
- Total assets: EUR371.5 million;
- Cash and cash equivalents: EUR18.4 million;
- Total liabilities: EUR292.6 million. [more - original PR]
Hellenic Civil Aviation Authority reported (15-Nov-2018) the following passenger traffic highlights at Greece's airports:
- Oct-2018:
- Passengers: 5.7 million, +8.8% year-on-year;
- International: 1.8 million, + 7.5%;
- Aircraft movements: 47,650, +13.1%;
- Passengers: 5.7 million, +8.8% year-on-year;
- 10 months ended Oct-2018:
- Passengers: 58.7 million, +9.9%;
- Aircraft movements: 483,341, +9.6%;
- International: 304,334;
- Domestic: 179,007. [more - original PR - Greek]
Western Sydney Airport CEO Graham Millett announced (15-Nov-2018) Arup has been appointed to deliver airport planning services for Western Sydney Airport. In addition, the airport shortlisted three organisations for initial earthworks:
- CPB Contractors and Lendlease JV;
- Ferrovial Agroman and QH & M Birt JV;
- Salini Impreglio.
The contract for the first bulk earthworks package is expected to be awarded in mid 2019. The airport confirmed there are four remaining major works packages that will be released to market progressively, including earthwork on the southern half of the site, terminal and runway construction, and landside construction such as offices and car parks. [more - original PR]
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16-Nov-2018 11:11 AM
Amadeus: A 'transformation' needed in travel and tourism to meet sustainability challenge
Amadeus group environmental officer Lucas Bobes, via the company's official blog, stated (15-Nov-2018) the company is fully committed to supporting the UN's vision of sustainability, having "embraced sustainability as an important part of who we are, not only because it makes business sense, but also because it's the right thing to do". Mr Bobes said "transformation" is needed in travel and tourism to contribute as much as possible to the UN's sustainable development goals by 2030. He highlighted the need to continue to foster technology which contributes to the sustainability of the travel industry, as well as cooperation between industry stakeholders on sustainability projects. [more - original PR]
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