Airline Post » Abbey

EasyJet undergoes changes in the Boardroom

Abbey — Thu, 17 Dec 2009 08:22:47 +0000

EasyJet’s Chief Executive Andy Harrison recently quitted from the company. This is the third major executive board departure that occurred during this year. The cause of such leavings is a long executive board fight with the founder of EasyJet Haji-Ioannou.

According to Harrison, he wished to leave the company because of the budget and also find new challenges. But he did not say anything about his future plans.

It was decided that he would continue working in the company until June 30, 2010 despite the fact that his contract was revised in order to guarantee a smooth transition till a new chief executive would hold the post.

Also EasyJet said Michael Rake would accept the post from David Michels chairman from January 1, 2010. Since June Rake held the post of chairman and senior independent director. As for Michels, he was acting Chairman since the retirement of Colin Chandler in July.

The company is also looking for a chief financial officer as Jeff Carr quitted in May because Haji-Ioannou refused to approve the annual accounts of the last year.

A boardroom dispute occurred between the EasyJet founder and the board last year. Haji-Ioannou expressed his concerns about the growth strategy of EasyJet describing it very aggressive during the economic recession. As a result both the EasyJet founder and the board decided to set 7.5% of seat flown instead of 15%.

It is planned that the company will have 207 aircraft in its fleet by 2012.

Carr became the director of finance at bus and rail company FirstGroup PLC for that reason Bob Rothenberg held the post of non-executive director in August. Such appointment was done according to the request of Haji-Ioannou.

The company believes that the three major boardroom leavings that occurred in this year will not influence negatively on the company’s future.

“Andy Harrison has done a great job over the past four years and under his leadership, easyJet has developed into a truly pan-European airline operating Europe’s leading air transport network. EasyJet has a very strong senior management team and I look forward to being part of the continuing development of the business,” said Rake.

Cathay Pacific expands to North America

Abbey — Wed, 09 Dec 2009 14:51:03 +0000

The Hong Kong based Cathay Pacific has been recently chosen by us as one of the world’s most luxurious airlines. But have you ever thought about flying with Cathay even when you’re not in Asia?

At present the Hong Kong-based airline company expanded and now provides flights and sells tickets between New York’s JFK and Vancouver, British Columbia.

It is necessary to note that such flights are usually offered only by U.S. or Canadian airlines. But Cathay Pacific that has been providing flights to the New York-Vancouver route since the summer of 1996 is considered to be one of the airline companies that is able to sell tickets on flights from the United States to a country where the carries do not have its representative office.

Such companies as Air India, Kuwait Airways, Philippine Airlines and Chile’s LAN Airlines are airlines that offer such flights, as they signed a series of bilateral agreements with the U.S.

Many passengers choose such flights as they are infrequent and in some ways they give an opportunity to fly to a distant country and provide a unique brand of service.

“Travelers who know to look can sometimes score big savings,” says George Hobica, founder of Airfarewatchdog.com.

A person that is going to fly to any country should know about the trick, as without doubts no person will look for Air India in case he or she wants to fly to Europe from the United States. According to Hobica, the airlines that provide such flights undercut the fares quoted by local competitors sometimes by hundreds of dollars.

Very often the third-country airlines have long-haul jets that offer high quality of service outshining the local airlines. Because of such firm competition the home-country airlines occur to be at a disadvantage.

Singapore Airlines have fights of fifth-freedom routes from the USA such as Houston-Moscow; New York JFK-Frankfurt; San Francisco-Seoul, San Francisco-Hong Kong and Los Angeles-Tokyo Narita.

Due to such routes U.S. customers have an “interesting mix” of options. According to Boyd, in case a passenger wants to use an Asian standard of service to Europe, he is able to take a non-stop New York JFK-Frankfurt flight in place of usual options provided by U.S. and European airline companies.

Easyjet reports increase in revenue

Abbey — Tue, 08 Dec 2009 08:17:57 +0000

The fight on driving revenue on Easyjet’s flights has been making progress. The revenue of the average flight is increasing and it seems that Orange Crew leaves the Ryanair crew behind in this fight.

EZ reported about its progress on the conference that was held 10 days ago. According to the report ancillary revenue increased by 22%, expelling baggage costs, the figure of baggage charges became huge, i.e. it went up by 62.3%, as for business travel accounts, the figure was over 20%.

It is probably the last thing that requires to come into notice of the other LCCs specifically Ryanair.

The enlargement of Biz Travel can be described as the availability in the GDS and one can say that it is an important fact that can serve as a lesson to any LCCs. Meanwhile the GDSs can be regarded as an anathema there is sense to provide support, i.e. a well established tool that the TMCs offer to its corporate clients.

There is an opinion that TMCs conduce to be process driven and often thanks to the growth of revenue. It looks like EZ is corroborating this fact on the coattails of improved revenue by Southwest that happened due to its reentering in the GDS.

There is not doubt that it is necessary for LCCs to make changes due to which it will be possible to offer not only standard services of booking for the Corporate business. But it is very important to weigh all pros and cons. In order to improve revenue one should augment footprint in front of the TMCs and the Corporate Travel Depts.

On Friday it was announced by the company that it carried more passengers in November if compared with the same period in 2008. 3.4 million passengers flew with Easyjet last month that led to the increase of load factor to 84.8% from 83.9%.

IATA’s strategy for environmental protection

Abbey — Mon, 07 Dec 2009 09:24:28 +0000

Giovanny Bisignani is a director general and chief executive of the International Air Transport Association (IATA), who worked hard in order to verify that IATA is not deprived of its exemption from the Kyoto Protocol at the COP15 Conference that will be held in Copenhagen this week.

In his newsletter, Bisignani applied to ministers of transport, heads of state and environment ministers in order they could assist “to make Copenhagen a success” for the airline industry as IATA was not able to be the only campaigner.

But the airline industry has a big number of denial, delay and inactivity for that reason many UNFCCC delegates are not ready to believe that IATA or the International Civil Aviation Organization(ICAO), the UN agency for civil aviation will contribute to curtailing greenhouse gas emissions from the sector.

Both the aviation industry and the shipping industry became the most unruly industry sectors when talking about global warming.

In late 1997 the Kyoto Protocol stated the following: emissions of greenhouse gases should follow restriction or reduction from the aviation sector by means of ICAO. Later little progress was seen as there were made changes by ICAO. But according to the recent United Nations Framework Convention on Climate Change report, international aviation emissions of developed countries increased by 65.8% during the period of1990 and 2005.

Also IATA accepted a four-pronged public relations strategy in order to smooth concern over its environmental influence. It was decided to promote the growth of fuel efficiency as well as to hype the fact that some of its member companies provide passengers the option to take part in a carbon offset program. The association also targeted at securing the support of International Civil Aviation Organization in order IATA was able to implement four-pillar strategy of investing in technology, flying planes effectively, building effective infrastructure as well as utilizing economic measures.

IATA airlines introduced a bold-sounding strategy in June 2009. The aim of the strategy was to design the image of resolute action by the industry.

Airports to raise the facility charge

Abbey — Thu, 03 Dec 2009 09:09:05 +0000

There was a Congress in terms of which airports wanted to increase the cap on the “passenger facility charge” that passengers pay as a part for the airline tickets. At present the charge is $4.50 for each person and as for the round trip it is about $18. Such funds are for building of runways, terminals and gates.

Many airports want to raise the charge up to $7.50 and indexed to the expansionary cost construction.

The growth up to $7 per passenger was proposed by a bill in the House. But a Senate committee decided to keep the cap at $4.50.

According to Todd Hauptli of the American Association of Airport Executives, the only thing they were trying to do was to bear up with inflation. He was concerned about the fact that the facility charge dropped by 50% since 2000

James May, CEO of the Air Transport Association, the trade group representing most airlines wrote to Congress recently this year, in case the cap went up to $7, it would lay on an extra unwarranted $2 billion-per-year tax increase on commercial passengers.

“With airport revenue eclipsing record levels … the imposition of an increased PFC tax is not only unwarranted, but will also further reduce demand for travel,” he added.

The first facility charge was approved by Congress in 1992. Since that times U.S. airports have increased more than $27.5 billion.

In order to get the approval for each project that will get funds by facility charge funds, airports have to apply to the FAA.

John Meenan supposes the airports spend the money for projects very often that is not right and as for the FAA, it is too lenient when approving their projects.

It was considered that money received from the passenger facility charge should be used mainly for construction projects that improve safety, security or capacity, diminish noise or augment air carrier competition.

Alternatives to Business Classs offered by airlines

Abbey — Wed, 02 Dec 2009 09:59:34 +0000

The time when managers were able to travel in Business Class has finished, moreover, a majority of them decided to choose Economy Class. Such alterations happened due to the global economic recession. Airlines have offered different alternatives to the two classes, i.e. Economy Extra or Premium Voyager.

Such companies as United Airlines, Air New Zealand, SAS as well as British Airways were considered to be the first airlines that offered Economy and Business classes that were introduced in the past 10 years. Later Air France and Condor joined the companies.

According to United Airlines the number of bookings for Economy Class increased by 25 percent during January and August this year if compare them with the same period in 2008.

So what do customers have to expect from new classes and how much do they have to pay for tickets?

The distance between seats is the first thing that passengers are able to notice. There will be more space, i.e. between 15.6 and 22.7 centimeters, but in fact it depends on the type of plane. As for British Airways, the company has 97 centimeters between seats it means that it is 18 centimeters more in comparison with Economy Class.

With new classes passengers get more services than in Economy but in fact it depends on airlines. For example, United and Air France offer the same drinks to passengers as they serve travelers from Economy Class.

Ticket cost varies; the additional charge of United is between 80 and 120 euros per flight as well as per person. In case you want to fly from New York to London through British Airways, you will have to spend about 648 euros that is considered to be more in comparison with Economy Class.

But it is still unknown whether other airline company will join the club.

“There are no indications to suggest other airlines are planning to follow suit,” says Martin Gaebges, general secretary of the Board of Airline Representatives in Germany.

Singapore Airlines named Best International Carrier

Abbey — Fri, 27 Nov 2009 08:55:54 +0000

According to the recently released Zagat survey, Singapore Airlines were chosen as the best international carrier. The 2009 Airline Survey was conducted among 73 international carriers and 16 domestic U.S. airline companies. Each airline was estimated according to Zagat’s 30-point scale. Such aspects as comfort, food, in-flight entertainment and luggage policies in premium and economy classes were taken into account when choosing the best airlines.

Singapore Airlines, one of the main companies of the Southeast Asia that wins passenger choice awards very often, gained top marks for its service in both classes.

Hong Kong’s Cathay Pacific together with Dubai’s Emirates airline got the second rank in the premium-class category. Also Emirates occupied the second rank for its economy class service.

The third rank in premium class service was given to Virgin Atlantic and Air New Zealand.

Despite the fact that Continental, the U.S. airline, got a 15 score being behind the others, Tim Zagat, CEO of Zagat Survey, considered the result of the company as an achievement.

“The newer airlines continue to do well in the survey. Being less expensive to operate, they can therefore afford to provide better service,” said Zagat in his statement. He also added that such airline companies as Singapore, Emirates and Cathay Pacific prospered not due to governmental support. The question arose how Continental did so well as the company did not have any specific advantages.

Also Continental became the best value company in international routes.

As a result Continental Airlines, JetBlue Airways, Singapore Airlines and Virgin Atlantic Airways got the leading position in two categories. Southwest Airlines won in four categories while Virgin America was top-rated in three.

The Zagat survey was the third annual airline survey that exposed diminution in the number of flights because of the global economy recession.

The survey showed that only 7 percent of respondents flew more as well as others flew less this year.

The number of business flights diminished to 61 percent this year in comparison with 2007 when it was 64 percent. But as for leisure flights, their number increased by 4 percent this year.

Vietnam Airlines topped its rivals

Abbey — Thu, 26 Nov 2009 08:06:14 +0000

Jetstar Pacific was denounced for neglecting safety regulations while Indochina Airlines got into debts and suffered big losses from its license.

Three years ago there were long queues of investors in order to get licenses for their airlines. As a result from10 applicants only 3 licenses were given. Moreover, there were such talks according to which some investors wanted to pay a huge amount of money to get an approved airline that only subsisted ‘on paper’.

Indochina Airlines was created in such conditions and as a result commercial flights were offered in November 2008. The company became the first private airline that provided flights. But after a year Indochina Airlines run into debts. Because of passengers’ scarcity all the flights were cancelled until November 25. Now it is hard to predict the future of the airline company.

But still the question arises, why Indochina Airlines underwent losses while the internal aviation market went up, despite the economic recession.

As for Jetstar Pacific, its passenger totals went up by 30 percent this year and the seat number increased by 80 percent. But, unfortunately, the company’s revenues are not able to cover expenses as Jetstar Pacific made reductions of ticket prices.

Jetstar Pacific became a serious competitor to the national company known as Vietnam Airlines as it augmented its Hanoi-HCM City service, i.e. it has 11 roundtrip flights per day. But, nevertheless, the company has its own problems. Jetstar Pacific has to refuse using “Jet” and the orange star in order passengers could not confuse it with the Australian air company. Also Qantas purchased shares of Jetstar.

Two foreign engineers were discharged by JP, they denounced the company for cutting corners on aircraft maintenance.

According to some analysts, Vietnam Airlines has already achieved success among its competitors, for that reason the company should anticipate its future without firm competition on internal routes.

No cash in coach?

Abbey — Wed, 25 Nov 2009 21:08:12 +0000

If you want to fly with Delta Airlines, then you have to take with you a credit or debt card in case you want to eat grape jelly sandwich or a grilled chicken gyro. But sooner than expected, cash transactions for airline food will soon become history.

Eight years ago when terror attacks happened in September, the company decided to make their food service chargeable making reference to financial problems.

At present Delta Airlines made up its decision to give up on cash in the sky for all flights to and from North America, Latin America and the Caribbean. It means that the company lines up with main airline companies that executed a noncash cabin for the last year.

As for Continental Airlines, the company will extend the policy to almost all flights all over the world. As a result US Airways is considered to be the last major company that provides paid food services.

“We like having the option for customers to use cash or credit/debit cards,” said a publicist of US Airways.

But according to Michael Boyd, the aviation consultant, US Airways would join other carriers, it just needed some time. He also added that cash would be considered as a hindrance in the nearer future.

Why will it happen so? Because having chargeable food service on board requires much more time when serving passengers.

One should say that there are advantages of noncash cabin, i.e. you will not be bothered by the staff to change $50.

Nowadays many business travelers are disconcerted as some airline companies accept only cash. Despite the fact that Delta acquired Northwest last year, the latter keeps to the following: accepts only cash for food and beverage purchases. According to a spokesman, Delta is still in the process of merging with Northwest.

Delta & Japan Airlines to join the Far East Alliance

Abbey — Mon, 23 Nov 2009 13:57:52 +0000

The Sky Team grouping of airlines that is headed by Delta Air Lines volunteered a helping hand to Japan Airlines (JAL) which equals to $1bn (£600m). According to Delta, cash assets were proffered to Japan Airlines in case it quitted from the One World Alliance where American Airlines was the member of it.

It became known that Japan Airlines were looking for a financial support from the Japanese government which was considered to be the fourth attempt since 2001.

Delta is looking forward to enlarge its direction to Japan which means the company wants JAL to become the part of SkyTeam’s Far East alliance. Korean Air and China southern are the members of SkyTeam’s Far East alliance. Making a merger with JAL, Delta will have a good opportunity to expand routes between the US and Japan.

The Sky Team made an offer to Japan Airlines according to which the team was able to purchase shares of JAL for the amount of $500m. Moreover, $300m will be given to JAL as a guarantee to cover all losses connected with the leaving the One World alliance, $200m in asset backing and $20m to cover expenses of Japan Airlines for changing alliances.

As for JAL, the company decided not to comment on the offer. Lately it was reported by Japan Airlines that the company lost 32.3bn yen ($357m; £214m) during July to September period while it was estimated that it had 40.1bn yen profit a year earlier.

Right now, Japan Airlines is trying to find a way to pay off $15bn of debts and a big pension deficit. The company is also struggling with falling passenger numbers as result of the economical recession.