Alitalia threatens to shift its Rome Fiumicino hub elsewhere

Alitalia (3rd) (Rome) is upset about the airport’s continued focus of attracting low-cost operators at its Rome Fiumicino (FCO) hub and the current neglect for the infrastructure. The flag carrier is now threatening to move its hub elsewhere. The airline issued this statement about the current situation at FCO:

Alitalia (2015) logo

The damage to Alitalia by the consequences of the fire which broke out on May 7 at Fiumicino Airport amounted to 80 million Euros to date.

The recent reopening of Terminal 3 has marked the end of the emergency phase but not the end of many problems and limitations that continue have heavy effects on airport operations. Alitalia will calculate the total amount of damages only when the airport will operate at pre-fire standards.

FCO Airport Terminal Map

Alitalia is the only airline to have its hub in Fiumicino. About 50% of the total number of flights in Fiumicino are Alitalia. Alitalia is by far the airline most affected from the consequences of the fire.

“We had a difficult period due to an event that affected us deeply. – declared Silvano Cassano, Chief Executive Officer of Alitalia -. In this period we have given up any controversy and we focused entirely on the service to customers, to reduce the inconvenience.”

Alitalia has completed an initial balance of the damages for the cancellation of thousands of flights and for a multitude of operational problems that have highlighted the fragility of the airport infrastructure as a whole. Alitalia will seek compensation for the damage it sustained, which so far totals 80 million euro.

“Our relaunch plan is complex, and in one of the most competitive sectors in Italy and in the world – continues Cassano – Fiumicino Airport in its current state is not an appropriate infrastructure to serve as the hub of an airline with our ambitions“.

“The problems of Fiumicino come from years and years of inadequate investment and planning and are now structural, we hope there will be less attention to finance and more attention to the market and to passengers needs”.

“If Fiumicino will continue to focus on low cost carriers and mediocre services, Alitalia will be forced to shift its growth elsewhere”.

Alitalia A330 underside (Alitalia)(LR)

Top Copyright Photo: Marco Finelli/AirlinersGallery.com. Boeing 777-243 ER EI-DBL (msn 32781) arrives at the FCO hub wears special “Franciacorta” markings as a salute to Alitalia’s Expo 2015 partner.

Alitalia aircraft slide show: AG Airline Slide Show

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IAG reports an operating profit of €530 million ($582 million) in the second quarter

International Airlines Group-IAG (British Airways, Iberia and Vueling Airlines) (London) presented the Group’s consolidated results for the six months to June 30, 2015:

IAG logo

IAG period highlights on results:

  • Second quarter operating profit €530 million ($582 million) (2014: operating profit of €380 million)
  • Revenue for the quarter up 11.2 percent to €5,656 million
  • Passenger unit revenue for the quarter up 5.0 per cent and down 6.6 per cent at constant currency
  • Fuel unit costs for the quarter up 3.0 per cent, down 12.0 per cent at constant currency
  • Non-fuel unit costs for the quarter up 3.2 per cent, down 6.9 per cent at constant currency
  • Operating profit for the half year €555 million (2014: operating profit €230 million), up 141 per cent
  • Cash of €6,421 million at June 30, 2015 was up €1,477 million on 2014 year end
  • Adjusted gearing down 8 points to 43 per cent and adjusted net debt to EBITDAR improved 0.4 to 1.5 times

Willie Walsh, IAG Chief Executive Officer, said:

“We made an operating profit of €530 million in the quarter, up from a €380 million operating profit last year.

“At constant currency, revenue was down 1.2 per cent with passenger unit revenue down 6.6 per cent. Non-fuel unit costs were down 6.9 per cent while fuel unit costs were down 12 per cent.

“We said previously that profit improvement would be slower in the second quarter and we are on track to reach our full year targets.

“We continue to take cost out of the business, with both employee and supplier unit costs down at constant currency, and improvements in productivity levels.

“In the half year, we made an operating profit of €555 million which is up from a €230 million operating profit last year”.

Quarter 2 operating profit overview:

IAG’s operating profit for the quarter to June 30, 2015 was €530 million, an improvement of €150 million from the same quarter in the prior year. British Airways made a profit of €453 million (2014: operating profit €332 million); Iberia made a profit of €51 million (2014: operating profit €16 million) and Vueling’s profit was €24 million (2014: operating profit €30 million) on top of a 13.9 per cent capacity increase.

Half year financial review:

Strategic development

Aer Lingus clover logo

On May 26, 2015 IAG and the independent directors of Aer Lingus Group plc (‘Aer Lingus’) reached agreement on the terms of a recommended cash offer for the entire issued ordinary share capital of Aer Lingus to be made by AERL Holding Limited, a wholly incorporated subsidiary of IAG. The offer is for €2.55 per Aer Lingus share, comprising a cash payment of €2.50 per Aer Lingus share and the payment of a cash dividend of €0.05 per Aer Lingus share (paid by Aer Lingus on May 29, 2015 to Aer Lingus shareholders on the register of members on May 1, 2015). The transaction values Aer Lingus’ entire issued ordinary share capital at approximately €1.4 billion. The offer, extended to August 18, 2015, is subject to the terms and conditions that have not already been satisfied which are set out in Appendix I of the Offer document (www.iairgroup.com), in particular acceptance of the Offer having been received in respect of the Aer Lingus shares held by the Ryanair Group.

Operating and market environment

The half year has seen decreasing fuel prices although partially offset by adverse exchange. The improvement in the pound sterling against the euro has generated translation benefits for the Group which again have been partially offset by the US dollar strength.

Revenues in our domestic, LATAM and Asia Pacific markets were up 3 to 4 per cent at constant currency (‘ccy’) on capacity growth of about 8 per cent. The LATAM market has been impacted by weakness in Brazil and Venezuela. Revenues in our European markets rose 8 per cent at ccy while capacity for the Group was increased by 13 per cent partially through seat densification but also reflecting additional capacity in our low cost carriers, Iberia Express and Vueling. Capacity in the Africa, Middle East and South Asia region was reduced 4 per cent but revenues fell further impacted by weakening of oil routes. North Atlantic passenger unit revenues were broadly flat for the six months, down 1 per cent.

Capacity

IAG increased capacity (ASKs) by 5.3 per cent in the first six months of the year and traffic volumes rose 5.8 per cent, increasing seat factor to 79.3 per cent. The rise in capacity reflects growth at Vueling, restoration of routes at Iberia and seat densification in British Airways’ shorthaul.

Revenue

Passenger revenue increased 11.5 per cent compared to the prior year six months with approximately 10.4 points of beneficial currency impact. Passenger unit revenue (passenger revenue per ASK) was down 3.8 per cent at constant currency (‘ccy’) from lower yields. Yields have been impacted at Vueling and Iberia by growth. British Airways yields are down related to weakening oil routes and increased competitor capacity on transatlantic routes in addition to the impacts of currency dislocation. Overall the Group has maintained its volumes in the first half of 2015 with seat factor rising 0.4 points.

British Airways logo

Cargo revenue for the period decreased by 8.0 per cent at ccy reflecting the reduction in the Cargo freighter programme. The performance of the Cargo business was up with load factors flat, positive mix partially offsetting market price pressure, and benefits from strong cost management.

Other revenue was up 6.3 per cent at ccy. The increase includes a €50 million benefit from the timing of the recognition of Avios revenue. The underlying revenue rose through higher customer engagement at BA Holidays and in the Avios loyalty scheme, partially offset by lower third party maintenance activity in the period.

Costs

Employee unit costs improved 3.5 per cent at ccy. The average number of employees reduced by 0.3 per cent and productivity rose by 5.6 per cent with improvements at each airline.

Fuel costs decreased 6.8 per cent at ccy, driven by lower average fuel prices net of hedging. At constant currency and on a unit basis the improvement was 11.7 per cent, with benefits from more efficient aircraft and improved operational procedures.

Handling, catering and other operating costs decreased 1.8 percent at ccy benefiting from an improvement in operations reducing costs related to disruption, including compensation fees and baggage costs. The improvements have been partially offset by higher costs due to additional passengers carried, inflationary price increases and BA Holiday activity.

Landing fees and en-route charges rose 6.4 per cent excluding adverse currency impacts. The performance reflects increased airport charges and additional volume, with ASKs up 5.3 per cent and sectors flown up 6.1 per cent.

Engineering and other aircraft costs were broadly flat at ccy. Increases are driven by volume and price, offset by the reduced freighter flying of IAG Cargo and less third party maintenance activity.

Property, IT and other costs decreased, half of which is due to cost improvements including IT initiatives and the remaining reduction from one-time benefits.

Selling costs decreased 3.9 per cent excluding adverse currency impacts due to the timing of promotions and from improvements in supplier contract terms. The reduction in selling costs was partially offset by volume increases related to additional passengers carried during the period.

Ownership costs increased 1.6 per cent at ccy. At June 30, 2015 the Group had 472 aircraft, an increase of 13 from June 30, 2014. The increase in aircraft primarily related to 22 additional Airbus A320s, while the Boeing 737-400s are being retired.

At constant currency non-fuel unit costs decreased by 4.9 per cent with benefits from exiting the Cargo freighter program and the seat densification at British Airways. Non-fuel unit costs improved at British Airways and Iberia, while Vueling was broadly flat.

Operating profit overview

IAG’s operating profit for the six months to June 30, 2015 was €555 million, an improvement of €325 million from the prior year. British Airways made a profit of €570 million (2014: €327 million); Iberia made a loss of €4 million (2014: €95 million) and Vueling’s loss was €5 million (2014: €0 million).

Exceptional items

There have been no exceptional items in the six months to June 30, 2015 or 2014.

Non-operating items

The net non-operating cost was €143 million for the six months compared to €75 million for the same period last year. The increase related to ‘Net currency retranslation charges’ from the weakening of the euro against the US dollar and additional finance costs primarily from adverse translation currency with the weakening of the euro against the pound sterling.

Taxation

The tax charge for the six months to June 30, 2015 is €80 million (2014: €59 million charge) with an effective tax rate of 19 per cent.

Profit after tax

The profit after tax for the six month period to June 30, 2015 was €332 million (2014: €96 million).

Exchange rates

For the six months to June 30, 2015, the reported results are impacted by translation currency from converting British Airways’ results from sterling to the Group’s reporting currency of euro. The net impact on the operating profit was €73 million favourable, with an increase in revenue of €814 million and an increase in cost of €741 million, reflecting a 10.3 per cent weakening of the euro versus the pound sterling.

The transactional exchange rate impact across the Group was €167 million favourable on revenues and €194 million adverse on costs with a net adverse impact of €27 million.

The net benefit on operating profit from currency was €46 million for the six months to June 30, 2015.

Cash

The Group’s cash position was €6,421 million up €1,477 million from December 31, 2014. British Airways’ cash position was €3,730 million, Iberia €1,118 million, Vueling €829 million and the parent and other Group companies €744 million.

Compared to December 31, 2014, the Group’s adjusted net debt decreased by €618 million to €5,463 million and adjusted net debt to EBITDAR improved 0.4 points. Adjusted gearing improved by eight points.

Principal risks and uncertainties

During the period we have continued to maintain and operate our structure and processes to identify, assess and manage risks. The principal risks and uncertainties affecting us, detailed on pages 87 to 93 of the December 31, 2014 Annual Report and Accounts, remain relevant for the remaining six months of the year.

Other strategic developments

Iberia (2013) logoOn January 26, 2015, Iberia announced plans to begin flights to Cali and Medellin in Colombia in early July. Iberia highlighted that this has been possible due to its restructuring which has allowed it to achieve a competitive cost base.

Iberia Express (2013) logo-1

Iberia and its subsidiary Iberia Express were the world’s most punctual airlines in January according to the latest ranking published by FlightStats. Iberia led network carriers with 92.72 per cent of flights on time while Iberia Express achieved 96.34 per cent punctuality the highest score among low cost carriers. The airline’s improvement in operational performance has been a key aspect of its restructuring.

British Airways is changing its ‘On Business’ loyalty scheme for small and medium sized businesses to incorporate American Airlines and Iberia. The new partnership will allow On Business members to benefit from collecting and spending across all three airlines under one program.

Vueling logo

Vueling Airlines has become the first airline to offer a self-service baggage check-in at its hub in Barcelona, also as part of a marketing agreement, Vueling has begun to install power outlets in the priority seats of its fleet.

On March 4, 2015, Iberia announced that it had reached an agreement with Airbus to take early delivery of eight Airbus A330-200s that IAG ordered for the airline last year to replace Airbus A340-300s. The new aircraft will join Iberia’s longhaul fleet up to 14 months earlier than initially planned, between November 2015 and December 2016.

On March 19, 2015, Vueling signed an agreement with American Airlines to feed its longhaul flights from the US at Barcelona-El Prat and Rome-Fiumicino airports.

On March 29, 2015, British Airways began its Airbus A380 services to San Francisco from London Heathrow adding 6,000 more seats a month between the two cities.

In April 2015, IAG took delivery of its first five Airbus A320s standardized aircraft which have joined Vueling’s fleet. The aircraft are part of IAG’s harmonization plan which aims at reducing costs by standardizing its Airbus A320 fleet across the Group.

On May 13, 2015, Iberia announced that it won 17 out of 21 tendered licenses to provide handling services at Spanish airports. The airline remains the main handling operator in Spain and highlighted that this outcome has been achieved due to the cost and productivity agreements reached with its employees.

On May 27, 2015, British Airways started daily flights to Kuala Lumpur on a four class Boeing 777-200 ER aircraft. The airline also announced two new routes from Heathrow for the winter season. From October 25, 2015, it will start flights to Keflavik (Reykjavik) while services to Salzburg will commence on December 5, 2015.

On June 1, 2015, Iberia resumed its flights to Havana. The five per week service between Madrid and the Cuban capital is operated on Airbus A330 aircraft with new longhaul cabins. These new flights aim to strengthen further Iberia’s leadership between Europe and Latin America.

On June 9, 2015, Vueling announced that it had become a member of IATA (International Air Transport Association). The airline will benefit from lower costs on transactions with IATA members.

On June 17, 2015, the chief executives of IAG, Air France-KLM, EasyJet, Lufthansa Group and Ryanair announced that they will work together to develop an EU aviation strategy which will support growth and jobs across Europe, strengthen the sector and provide more choice and competitive fares to European passengers. This is in response to a consultation by the EU Transport Commissioner Violeta Bulc.

Objectives

Our mission is to be the leading international airline group. This means we will:

• win the customer through service and value across our global network;
• deliver higher returns to our shareholders through leveraging cost and revenue opportunities across the Group; • attract and develop the best people in the industry;
• provide a platform for quality international airlines, leaders in their markets, to participate in consolidation;
• retain the distinct cultures and brands of individual airlines.

By accomplishing our mission, IAG will help to shape the future of the industry, set new standards of excellence and provide sustainability, security and growth.

Aircraft Fleet:

IAG Fleet

Read the full report: CLICK HERE

Copyright Photo: SPA/AirlinersGallery.com. Iberia will retiring its Airbus A340-300s by December 2016. On March 4, 2015, Iberia announced that it had reached an agreement with Airbus to take early delivery of eight Airbus A330-200s that IAG ordered for the airline last year to replace Airbus A340-300s. The new aircraft will join Iberia’s long-haul fleet up to 14 months earlier than initially planned, between November 2015 and December 2016. Airbus A340-313 EC-GLE (msn 146) departs from London (Heathrow).

British Airways aircraft slide show: AG Airline Slide Show

Iberia aircraft slide show: AG Airline Slide Show

Vueling Airlines aircraft slide show: AG Airline Slide Show

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Emirates retires its last standard Boeing 777-200

Emirates (Dubai) has phased out and retired its last standard Boeing 777-200. The last 777-200, Boeing 777-21H A6-EMF (msn 27249), was ferried from Dubai to Arizona via Boston on July 14 for storage according to the carrier with this statement and video below.

Emirates still operates the newer Boeing 777-200 ER (Extended Range) and LR (Longer Range) models.

Read more from The National: CLICK HERE

Copyright Photo: Antony J. Best/AirlinersGallery.com. Sister-ship Boeing 777-21H A6-EME (msn 27248), now also retired, arrives at London’s Gatwick Airport in the past.

Emirates aircraft slide show: AG Airline Slide Show

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Emirates recently phased out A6-EMF, the last remaining Boeing 777-200 from its fleet. The aircraft departed from Dubai International to Arizona via Boston for de-registration on July 14. Since joining the Emirates fleet in 1996, A6-EMF flew an estimated 60 million kilometers (enough to fly to the moon and back nearly 80 times) and transported hundreds of thousands of passengers to destinations as far and wide as Warsaw and Ho Chi Minh City.

 

Air Canada takes delivery of its first Boeing 787-9 Dreamliner

Air Canada 787-9 C-FNOE (04)(Tko) PAE (Air Canada)(LR)

Air Canada (Montreal) announced the delivery of its first Boeing 787-9 Dreamliner (C-FNOE, msn 35265) with this statement:

Air Canada logo-1

Air Canada announced today it has taken delivery of its first Boeing 787-9, a larger version of the Dreamliner 787-8 already in its fleet that has proven extremely popular with customers with its new international product standard. The Dreamliner is the world’s most modern commercial aircraft and the larger 787-9 version’s greater range and capacity will enable Air Canada to further expand its international network.

“Air Canada is very excited to take delivery of its first Boeing 787-9. This new aircraft’s larger capacity and greater range will accelerate our international expansion strategy and allow us to offer customers more non-stop services to new international destinations. Already, we have announced two new 787-9 routes to Delhi and Dubai from Toronto beginning this fall and as more of these aircraft enter the fleet we will expand our international network even further,” said Benjamin Smith , President, Passenger Airlines at Air Canada.

The aircraft is due to arrive at Toronto Pearson this evening and the first designated routes for the Boeing 787-9 are nonstop services from Toronto to Delhi beginning November 1, 2015 and to Dubai beginning November 3, 2015 . In the interim, customers will have the opportunity to preview the new aircraft on select flights between Toronto and Vancouver during August and between Toronto and the cities of Munich and Milan during September and October. Future deployments of the 787-9 Dreamliner will be announced as new aircraft enter service.

Air Canada took delivery of its first Dreamliner in May 2014 and will receive a total of 29 new 787-9 Dreamliner aircraft by 2019, in addition to eight 787-8 aircraft already in operation. All Dreamliners will feature Air Canada’s redesigned interiors in a three-cabin configuration, including International Business with fully lie-flat seats, Premium Economy and Economy. Air Canada’s next generation seatback in-flight entertainment system will be available throughout. The Boeing 787-9 will seat 298 passengers and have a range of 15,372 kilometres, compared with the Boeing 787-8, which is configured to carry 251 passengers with a range of 14,500 kilometers.

Photo: Air Canada. Boeing 787-9 Dreamliner C-FNOE (msn 35265) departs from Paine Field near Everett.

Air Canada aircraft slide show: AG Airline Slide Show

Air Canada’s Boeing 787 Routes:

Air Canada 787 Routes

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Syphax Airlines suspends all operations

Syphax Airlines (Sfax, Tunisia) yesterday (July 30) announced it had suspended all operations from Tunisia.

Syphax logo-2

The company was launched in 2011 by Mohamed Frikha, CEO of TELNET Group, Syphax Airlines is a limited company.

The airline commenced operations on April 21, 2012 as previously reported.

Syphax was based at Sfax Thyna, and its network consisted of international destinations, mainly to France and Turkey.

Tunisia has seen a dramatic drop in tourism after it suffered severe blows following the Bardo National Museum attack and the Sousse attack in 2015.

Copyright Photo: Christian Volpati Collection/AirlinersGallery.com. Airbus A319-112 TS-IEF (msn 3853) wears a special livery as the “Official Airline of the Carthage Eagles”, the Tunisia national football (soccer) team.

Syphax Airlines aircraft slide show: AG Airline Slide Show

AG Prints-6 Sizes

SkyWest reports a second quarter net profit of $31.5 million

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) reported its financial and operating results for the quarter ended on June 30, 2015:

SkyWest (red-blue) logo (LRW)

SkyWest generated $31.5 million of net income for Q2 2015, or $0.61 per diluted share. This represents an improvement of $46.2 million from Q2 2014, which had a net loss of $(14.7) million, or $(0.29) per diluted share. Operating income for Q2 2015 was $70 million, which represents SkyWest’s best quarterly operating income since 2008.

ExpressJet 2011 logo

SkyWest reported $41 million of net income for the first half of 2015, or $0.79 per diluted share, a $79 million improvement compared to the first half of 2014 which had a net loss of $(38) million, or $(0.73) per diluted share.

Q2 2015 Financial Highlights

  • Pre-tax income increased $58 million in Q2 2015 from Q2 2014, primarily due to improved operating performance, additional flying contracts with improved profitability and a reduction in the number of aircraft operating under unprofitable flying contracts.
  • SkyWest generated $135 million in EBITDA in Q2 2015, compared to $77 million in Q2 2014. For the first half of 2015 EBITDA was $234 million, compared to $112 million for the first half of 2014.
  • Revenue included improvements of $32 million from the additional E175 operations, improved contract rates from renewals of SkyWest’s existing flying contracts and improved contract performance incentives compared to Q2 2014. Revenue also improved from Q2 2014 by $11 million from higher flight completion rates. These improvements provided a significant offset to the revenue decrease from a reduced fleet size and less scheduled production for a net decrease in revenue of $28 million year over year.
  • Operating expenses were down by $85 million compared to Q2 2014, primarily driven by operating efficiencies from improved completion rates, a net decrease in production, maintenance cost initiatives and a reduction in fuel costs.

Q2 2015 Operational Update

  • Excluding weather cancellations, the adjusted flight completion rate for ExpressJet Airlines, Inc. (“ExpressJet”) improved to 99.8% in Q2 2015 from 99.0% in Q2 2014. The adjusted flight completion rate for SkyWest Airlines, Inc. (“SkyWest Airlines”) also improved to 99.2% in Q2 2015 from 99.0% in Q2 2014.
  • Including weather cancellations, ExpressJet’s raw flight completion rate was 97.5% in Q2 2015 compared to 95.3% in Q2 2014. SkyWest Airlines’ raw flight completion rate improved to 98.4% in Q2 2015 compared to 97.4% in Q2 2014.
  • Total aircraft in service went to 676 at June 30, 2015, from 693 at March 31, 2015, summarized as follows:

1. Added six new E175 aircraft with United Air Lines, Inc. (“United”)

2. Added three new E175 aircraft with Alaska Air Group (“Alaska Airlines”)

3. Added ten used ERJ 145 aircraft with American Airlines, Inc. (“American”)

4. Removed 24 ERJ 145/ERJ 135 aircraft from service

5. Removed twelve EMB-120 turboprop aircraft from service

  • Under its fleet transition, SkyWest generated approximately 24,000 additional block hours with its dual class aircraft (CRJ700s/900s and E175s) compared to Q2 2014. SkyWest also had a reduction of approximately 72,000 block hours with its 50-seat and smaller sized aircraft (CRJ200s, ERJ145s/135s and EMB120s) compared to Q2 2014. The total aircraft in service decreased to 676 at June 30, 2015 from 752 at June 30, 2014.
  • Under an agreement announced in Q2 2015, SkyWest Airlines will place 8 additional E175 aircraft into service with Alaska Airlines, for a total of 15 E175s with Alaska Airlines. SkyWest Airlines is scheduled to take delivery of the remaining twelve new E175 aircraft for Alaska Airlines between Q4 2015 and Q4 2016.
  • Under a previously announced agreement, SkyWest Airlines is scheduled to take delivery of five new E175 aircraft for United during Q3 2015.

    Commenting on the results, Chip Childs, SkyWest, Inc. President, said,

    “Our second quarter results reflect meaningful progress in our action plans to secure profitable flying contracts, remove unprofitable aircraft and provide solid operating performance. These actions are the primary drivers for the strong earnings momentum we are generating. We remain committed to disciplined deployment of capital and resources as we continue the process of optimizing our fleet size and mix.”

Q2 2015 Capital and Liquidity Update

  • SkyWest had $505 million in cash and marketable securities at June 30, 2015, an increase of $24 million from March 2015. SkyWest made capital investments of $40 million during the quarter to acquire nine E175 aircraft including spare parts and engines.
  • SkyWest repurchased 1.25 million shares of its common stock for $18.7 million in cash during Q2 2015
  • The company issued $229 million in new long term debt to finance spare engines and the nine new E175s delivered during the quarter.
  • SkyWest anticipates using approximately $30 million in cash as investments in E175 aircraft scheduled for delivery in Q3 and Q4 of 2015.

SkyWest’s two airline companies provide commercial air service in cities across the United States, Canada, Mexico and the Caribbean with more than 3,500 scheduled daily flights. SkyWest Airlines operates through partnerships with United, Delta, US Airways, American and Alaska Airlines. ExpressJet operates through partnerships with United, Delta and American.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest is rapidly reducing the amount of 50-seat regional jets as the report states above. Its largest Bombardier CRJ200 customer is United Airlines but that too will continue to be reduced. Bombardier CRJ200 (CL-600-2B19) N956SW (msn 7871) in United Express colors departs from Los Angeles International Airport.

United Express-SkyWest aircraft slide show: AG Airline Slide Show

SkyWest Route Map: (click on the map for the full size view):

SkyWest 7.2015 Route Map

ExpressJet Route Map (click on the map for the full size view):

ExpressJet 7.2015 Route

Qatar Airways submits a “white paper” to the U.S. Government in support of “Open Skies”

Qatar Airways (Doha) today issued this statement concerning its on-going battle with the U.S. “Big Three” concerning alleged government subsidies and Open Skies:

Qatar Airways logo

Qatar Airways has yesterday submitted a ‘White Paper’ to the United States Government which fully refutes the subsidy allegations levelled against it by the Big 3 US carriers.

The detailed submission comprehensively addresses and answers all issues raised in the ‘Open Skies’ debate, which has put into question the longstanding US policy of allowing carriers to fly to and from the United States with minimal government interference.

The Big 3 – American Airlines, Delta Air Lines and United Airlines (and their unions) have been pressing the US Government to depart from its pro-Open Skies stance and impose unilateral limits on the services operated by Gulf airlines, even though the U.S. Open Skies policy was specifically designed by the US Government to ensure that US carriers were free to operate their extensive networks without foreign government restrictions on the level and routings of the services they offer.

The biggest US carriers have made ample use of their behind-country (Sixth Freedom) traffic rights, and have fought hard to preserve their own access to those rights, and to carry Fifth Freedom (third country) traffic as well. Given that these policies were created by and for US carriers, it is ironic that they are now describing the use of these traffic rights to be “unfair” when exercised by Gulf carriers.

In its report, Qatar Airways demonstrates that the many of the market changes complained of by the Big 3 are not the product of “unfair competition” (or anything remotely related to subsidy), but are instead the byproduct of important advances in aircraft technology and significant demographic changes. With ultra-long range Boeing 777 and Boeing 787 aircraft, passengers bound for the Middle East and India can now over-fly congested European hubs, and enjoy convenient one-stop services to their destinations, instead of making longer two-and three stop journeys. These technological changes have shortened travel times, and have brought families and businesses closer together.

Qatar Airways also demonstrated that although US carrier market share to the Indian subcontinent may have shifted over time, the market as a whole has grown, and US carriers are carrying more traffic in absolute terms.

Qatar Airways also disproved the claim that its services harm any US carrier, noting that it does not compete against any US carrier on any nonstop route, and serves cities that have never been served by US carriers, such as Cochin, Karachi and Amritsar. In fact, the services operated by Qatar Airways benefit US carriers. Qatar Airways works cooperatively with and feeds traffic to US carriers, including American Airlines (its code-sharing and oneworld alliance partner) and JetBlue Airways. The report also proves that the airline’s operations to the US market have significantly contributed to the economy in terms of jobs, cargo and overall passenger traffic (tourism and business travel growth), as well as providing benefits for non-aligned US passenger carriers, cargo carriers and airports.

In addition to benefiting American travellers, Qatar Airways has strongly supported the US aerospace industry. As of today, the airline has 162 aircraft flying to 150 destinations, of which over 40 per cent are Boeing jets worth over $19 billion USD.
Qatar Airways Group Chief Executive, Mr. Akbar Al Baker, commented: “Qatar Airways was a relatively unknown airline when it first launched a service to the United States in 2007.

“Since then, we have built up a significant brand presence on the routes that we operate to the United States. Our passengers have come to know us, not through size alone, but by the signature service and quality of the product on board – and also the breadth of our network.

“There has been significant demand for our services from the U.S. not just to the Middle East – but beyond – where no other carriers fly. This makes us a natural choice for consumers, and is a reflection of how globalised our world has become. People are travelling further than ever before and it is important that in an economy focused on open market principles, our wings remain open for business, rather than closed.”
Qatar Airways also demonstrated that its services are lawful and consistent with the US-Qatar Agreement, which in Article 11.2 says that “neither Party shall unilaterally limit the volume of traffic, frequency or regularity of service, or the aircraft type or types operated by the designated airlines of the other Party.” Despite this clear language, the Big 3 are urging the US Government to ignore its obligations by imposing a unilateral limit on Qatar Airways’ capacity.

Other US airlines have noted that foreign governments often try to block competition from strong US airlines by challenging “excess” capacity offered by US carriers, and cautioned the US Government against deviating from a free trade policy that has worked to the overwhelming benefit of US airlines.

As Qatar Airways GCEO Mr. Akbar Al Baker observed: “The US Government should reject calls to “freeze” the US-Qatar Open Skies Agreement, and recognize these allegations for what they are – a transparent attempt by the Big 3 to block air services that compete with their own.”

Qatar Airways also examined and rebutted each of the subsidy allegations made, noting that US carriers benefit from many of the same policies they have attacked. Indeed, the claims of subsidy advanced by the Big 3 include items of support that US carriers have themselves received for decades, and items that have never been viewed as a form of subsidy. In fact, many other airlines (including US airlines) have acknowledged publicly that they and the Big 3 have themselves been long-time beneficiaries of subsidies and favorable US policies and support.

While Qatar Airways is used to strong competition, it expressed concern about the efforts of the Big 3 to persuade the US Government to refer to rules that do not apply to aviation to resolve their complaints. The application of WTO trade principles, and US domestic trade laws to these complaints – rules that apply solely to trade in goods – would be completely unlawful.

Qatar Airways GCEO Mr. Akbar Al Baker added:

“It is puzzling to see the biggest US carriers describe Qatar Airways as a “threat,” given our small size and lack of direct competition with them. Their long-standing focus on other markets, and large (and growing) profits completely undercut this claim. The Open Skies model was developed by the American carriers and has demonstrated how an Open Skies paves the way for an open economy. We are concerned to see the Big 3 seek to change the rules of the game as soon as they see US consumers respond well to the services offered by a competitor. Qatar Airways is proud of its signature five-star service, brand identity, and the high standards we deliver to our passengers onboard.”

Photo: Qatar Airways.

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