Qantas Group chairman Richard Goyder stated (20-Sep-2023) the board will reduce short term incentives for senior executives by 20% for FY2023, in recognition of the "customer and brand impact of cumulative events". After applying the 20% reduction, the board will withhold the balance of the FY2023 short term incentive for senior executives as part of further "clawback provisions". Mr Goyder said in regards to former CEO Alan Joyce's remuneration for FY2023, in addition to AUD2.2 million (USD1.42 million) in short term bonuses that have been withheld, a further AUD8.3 million (USD5.35 million) of a total adjusted AUD21.4 million (USD13.80 million) is subject to clawback should the board determine that necessary. Mr Goyder added: "The board has significantly increased the weighting on customer outcomes for remuneration in FY2024 and introduced it as a metric on future long term incentives". Mr Goyder said the scorecard that determines short term incentive payments has a number of financial and non-financial measures, including safety, customer satisfaction and emissions reduction. He noted: "While customer satisfaction levels improved during the year, they are well below where they should be. As a result, this part of the scorecard was judged at zero out of a possible 20% and this had a corresponding impact on senior executive pay". [more - original PR]
EU Parliament approves sustainable aviation fuel mandate; up from 2% in 2025 to 70% in 2050
On 13-Sep-2023 the European Parliament voted to increase the use of sustainable aviation fuels (SAF) at EU airports.
Under the legislation, which still needs approval by EU member states, the share of aviation fuel that must be sustainable will rise from 2% in 2025 to 70% in 2050. These percentages have increased since the EU's SAF mandate, known as ReFuelEU, was first drafted in 2021.
Airlines and fuel suppliers, both old and new, are working to increase production of SAF from its current very low levels. Government and regulators also need to implement policies to grow SAF supply.
SAF mandates are one element of this, although IATA has criticised this approach for resulting in higher prices, thereby diverting resources from other environmental investment.
Tax credits and other incentives, as introduced in the US, are another government intervention to stimulate SAF production.
Fraport to sell out at Saint Petersburg Pulkovo: part two – domestic focus and Russian interest
Fraport had a hard enough time of it when it dipped its toe into the Russian airport scene well over a decade ago, in the form of taking an equity stake in the underperforming Saint Petersburg Pulkovo Airport.
It would be fair to say that they were both good for each other, but all good things come to an end – in this case by way of the Russian invasion of Ukraine, immediately after which Fraport walked away from the operational side for which it had responsibility.
But Fraport couldn’t sell its 25% share, as the contract did not permit it to do so until 2025. Now local news sources say a sale could be possible by the end of 2023.
Western operators will surely eschew the ‘opportunity’. But Russian operators (and there are many) assuredly will not, and bids could also emerge from some countries that have offered tacit support to Russia, including those in the existing and to-be-expanded BRICS bloc.
The airport has remained profitable, and it was the location of an innovative ‘open skies’ policy just before the COVID-19 pandemic.
Pulkovo certainly has potential, but it won’t be realised for a long, long time.
This is part two of a two-part report.
United Airlines believes an inversion is occurring in the US airline industry with ultra-low cost airlines, which were previously outperformers, battling margin pressure while legacy airlines are holding their own.
Now the question is if this is a permanent reversal of fortune, or just an aberration due to a myriad of factors ranging from air traffic control and supply chain constraints to shifting preferences among passengers to a more upscale experience.
Only time will tell how long legacy airlines will have the upper hand, but for now those operators are confident in their prospects for the near future.
Fraport to sell out at Saint Petersburg Pulkovo: part one – sale could be possible this year
Fraport had a hard enough time of it when it dipped its toe into the Russian airport scene well over a decade ago, in the form of taking an equity stake in the underperforming Saint Petersburg Pulkovo Airport.
It would be fair to say that they were both good for each other, but all good things come to an end – in this case by way of the Russian invasion of Ukraine, immediately after which Fraport walked away from the operational side for which it had responsibility.
But Fraport couldn’t sell its 25% share, as the contract did not permit it to do so until 2025. Now local news sources say a sale could be possible by the end of 2023.
Western operators will surely eschew the ‘opportunity’. But Russian operators (and there are many) assuredly will not, and bids could also emerge from some countries that have offered tacit support to Russia, including those in the existing and to-be-expanded BRICS bloc.
The airport has remained profitable, and it was the location of an innovative ‘open skies’ policy just before the COVID-19 pandemic.
Pulkovo certainly has potential, but it won’t be realised for a long, long time.
This is part one of a two-part report.
In the week of 18-Sep-2023 capacity in Europe is at 95.5% of the equivalent week 2019, which is a shortfall of just 4.5%. This puts Europe in last place in the regional ranking for the week, just behind Asia Pacific, where capacity is down by a low single digit percentage.
Seat capacity in North America is up by a low single digit percentage compared with the equivalent week of 2019, while capacity in Middle East, Latin America and Africa is above 2019 by mid-single-digit percentages.
With 3Q2023 now in its final week, Europe's capacity for the quarter has reached almost 96% of 2019 levels, which is an improvement on 2Q2023's 94% and the best quarterly performance since the COVID-19 pandemic.
Schedules filed by airlines point to further increases to the end of the year, with 4Q2023 projected at close to 97% – split as intra-Europe at 95% and intercontinental routes back to 100%.
However, the quarterly rising trend is not reflected in the month-by-month trend in 4Q projections, with Nov-2023 and Dec-2023 easing back relative to Oct-2023.
Upcoming Event
Shanghai: CTC Shanghai Corporate Travel Summit
The China market continues to be an important indicator of growth for the industry, and this will be a key discussion point for the Summit. We’ll also explore all aspects of the corporate travel ecosystem as part of our “Corporate Branches” format.
Upcoming Event
Kuala Lumpur: CAPA Asia Aviation Summit & Sustainability Awards
The CAPA Asia Aviation Summit is part of CAPA's regional summit series and is highly regarded as an industry benchmark event across Asia offering valuable networking opportunities and unique insights.
The role of Government in supporting aviation and travel in Australia
Moderator: Brisbane Airport, Executive General Manager Communications and Public Affairs, Rachel Crowley
Panel
- Brisbane City Council, Lord Mayor of Brisbane, Adrian Schrinner
- Queensland Government, Deputy Premier, Minister for State Development, Infrastructure, Local Government & Planning, Hon Steven Miles MP
International recovery eclipses domestic at Sydney Airport for second consecutive month
Sydney Kingsford Smith Airport reported (21-Sep-2023) it handled 3.3 million passengers in Aug-2023, an increase of 22% year-on-year and a decline of 11.4% compared to Aug-2019 pre-pandemic levels. The airport reported Aug-2023 was the second consecutive month in which international recovery (89.7%) exceeded domestic recovery (88%). For the first month since the reopening of the international border, US traffic exceeded pre-pandemic figures, with a 1% increase compared to Aug-2019. Airport CEO Geoff Culbert stated: "Recent boosts to capacity from some of our international airlines has led to a surge in overseas visitors, especially from countries like South Korea, the Philippines and Vietnam, where the numbers are now higher than in 2019... The domestic recovery continues to underwhelm". [more - original PR]
Qantas Group chairman Richard Goyder stated (20-Sep-2023) "As we move through our recovery, management and the board are acutely aware of the need to rebuild your confidence in Qantas". Mr Goyder said: "We're also conscious of the loss of trust that has occurred because our service has often fallen short of expectations, compounded by a number of other issues relating to the pandemic period". He added the company's board and management are undergoing a "significant period of renewal". [more - original PR]
Qantas Group announced (20-Sep-2023) it retains "significant flexibility" in its fleet to respond to changes in market conditions through fleet redeployment, refurbishment, lease extension or return and retirement. During FY2023, Qantas International took delivery of two Boeing 787-9 aircraft and QantasLink activated six additional wet lease Embraer E190s from Alliance Airlines. An additional two A320-200 aircraft were transferred from Jetstar Airways to QantasLink to support the growing resource market and one A320-200 was returned to the lessor. Nine next-generation A321LRs were also received in the Jetstar Group and one Boeing 737-300F was retired from freight operations. At 30-Jun-2023, the Qantas Group fleet totalled 336 aircraft. [more - original PR]
German Aerospace Centre (DLR), via its KuuL (Climate-friendly ultra-efficient long-haul flight) study, reported (20-Sep-2023) long haul flights account for around 10% of passengers annually but generate approximately 40% of the air transport's carbon dioxide emissions, due to the long distances and flight times involved. DLR found small changes in flight altitude and airspeed, together with the choice of energy source, can significantly reduce their climate impact. In addition, aircraft specially designed for flight at different altitudes will also make a "decisive contribution to climate compatibility on long haul routes". Highlights include:
- Switching from kerosene to sustainable aviation fuels (SAFs) reduces the climate impact by approximately 25%, without the need for new aircraft, while the actual climate impact of carbon dioxide emissions can be reduced by 100% if the SAFs are produced using a carbon-dioxide-neutral process;
- Use of SAFs can also reduce the impact of non-carbon dioxide effects, with condensation trails and the resulting contrail cirrus the most significant factors;
- If in addition to a change of fuel, the maximum flight altitude is reduced by 2000 metres, a reduction in the climate impact of up to 70% can be achieved. However, at this altitude, the aircraft design must also be modified due to the higher air density, and, in particular, the sweep angle of the wings must be reduced. The flight speed would also have to be reduced by up to 15% to remain energy efficient;
- Hydrogen powered long haul aircraft could be a long term prospect alongside SAFs.
DLR institute of aerodynamics and flow technology project leader Martin Hepperle commented: "In the long term, a compromise must be found here between energy demand, cost effectiveness and climate impact". [more - original PR]
OAG: London Heathrow Airport the top airport for international connectivity in 2023
OAG reported (19-Sep-2023) the following highlights from its 2023 'Megahubs' report, ranking the most internationally connected airports:
- London Heathrow Airport reclaimed the position of the most internationally connected airport. British Airways remains the airport's dominant airline with a 50% share of flights;
- New York John F Kennedy International Airport ranked second, up 16 places from 2019;
- Amsterdam Schiphol Airport ranked third, with KLM accounting for 53% of flights;
- Kuala Lumpur International Airport ranked fourth and is the most connected airport in Asia Pacific. AirAsia operates 34% of flights at the airport;
- Tokyo Haneda Airport ranked fifth, up from 22nd in 2019;
- Frankfurt Airport ranked sixth;
- Istanbul Airport joined the top 10 at seventh. Turkish Airlines is the airport's dominant airline with a 79% share of flights;
- Seoul Incheon International Airport ranked eighth;
- Paris Charles De Gaulle Airport ranked ninth;
- Chicago O'Hare International Airport ranked 10th. The airport is ranked first in the US for domestic connectivity. United Airlines accounts for 48% of flights at the airport;
- Dubai International Airport is the top ranked airport in the Middle East and Africa at 16th;
- Seven of the top 20 airports are in Asia Pacific, six are in Europe, the Middle East and Africa and six are in North America. [more - original PR] [more - original PR - II] [more - original PR - III]