Monthly Archives: February 2014

Scandinavian Airlines improves its inflight food service with two new levels

Scandinavian Airlines-SAS (Stockholm) is improving its inflight food service and has issued this translated statement today:

As a part of the continuous development of SAS’ service concept, SAS has developed the onboard food and beverage offering to improve the customer experience. The adjustments follow a broad customer survey and are introduced from beginning of March.

In June 2013, SAS launched the new service concept called “SAS Go & Plus” which has been overall well-received by SAS customers. A customer survey, with more than 4500 respondents, shows that the customers appreciate SAS Go & Plus for its
simplicity and 85% of the customers are positive or neutral to the concept.

There are three main initiatives in the development of SAS Go & Plus:

1. Improvements of the food and beverage offering; adjustments of onboard concept and clarification of the difference between SAS Go & SAS Plus.

2. We introduced SAS Go & Plus to make travel easier for our customers. By clarifying and improving our on board offering we want to ensure a pleasant and joyful overall experience for customers when they choose SAS says Snorre Andresen, Vice President Product Management and Development at SAS.

The first changes to the onboard concept come into effect on March 1 and again on March 20. The improvements of meals are ongoing.

Facts about improvements and adjustments:

SAS improves food experience on board

SAS customers appreciate proper meals on longer flights, and snacks and beverages on shorter flights.

SAS reduces the number of menu variants and introduces a clearer concept for flights within Europe: one for the Nordic region and one for flights to Europe.

SAS Plus includes a new evening meal and drinks served in classic Orreforsglass

Warm bread with the meal.

The cafe offers a selection of fresh food, such as sandwiches salads and hot wraps.

The cafe menu is continually updated with seasonal additions.

The dining experience will be enhanced on intercontinental flights for SAS Go & Plus and Business.

All meals will be renewed or enhanced and the food presentation improved with new design and packaging.

Along with other treats, pre-departure champagne will be re-introduced in Business. SAS Go includes pre-departure water and one non-alcoholic drink together with meals. Alcoholic beverages are included in SAS Business and Plus, and are for sale in SAS Go.

SAS clarifies the difference between SAS Go and Plus:

SAS Plus includes everything, also food and drinks onboard, and with SAS Go food and drinks are for purchase.

Breakfast included in SAS Plus and available for purchase in SAS Go. It is possible to buy breakfast with EuroBonus points.

Coffee, tea and newspaper are as always included for all SAS passengers.

Copyright Photo: Arnd Wolf/AirlinersGallery.com. Boeing 737-883 LN-RCY (msn 28324) in the special “Disney Planes” motif taxies at Munich, Germany.

Scandinavian Airlines-SAS: AG Slide Show

International Airlines Group returns to profitability for 2013

International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London and Madrid) today (February 28, 2014) presented Group consolidated results for the year to December 31, 2013.

IAG Airlines logos

IAG period highlights on results:

  • Fourth quarter operating profit €113 million (2012: operating loss of €40 million) before exceptional items
  • At constant currency and excluding Vueling and one-offs, fourth quarter passenger unit revenue up 2.7 per cent, and non-fuel unit

    costs down 2.7 per cent

  • Operating profit for the year to December 31, 2013 of €770 million (2012: operating loss of €23 million) before exceptional items
  • Revenue for the year up 3.1 per cent to €18,675 million and passenger unit revenue for the year up 0.6 per cent (3.7 per cent at constant currency)
  • Fuel costs for the year down 2.5 per cent to €5,951 million (2012: €6,101 million). Fuel unit costs down 5.0 per cent at constant currency
  • Non-fuel costs before exceptional items for year down 0.7 per cent at €11,954 million. Non-fuel unit costs down 5.6 per cent, down 2.7 per cent at constant currency
  • Cash of €3,633 million at December 31, 2013 was up €724 million on 2012 year end (December 2012: €2,909 million).
  • Adjusted gearing down 1 point to 50 per cent

Willie Walsh, IAG chief executive, said:

“In 2013, we strengthened the Group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability with a turnaround of nearly €800 million. Our operating profit was €770 million before exceptional items, with passenger revenue up 5.8 per cent and non-fuel costs down 0.7 per cent.

“British Airways continued its solid revenue performance this year and we’re seeing cost improvements, resulting in an operating profit of €762 million. This is the first full year that it’s benefited from the additional Heathrow slots and greater network flexibility created by bmi’s integration. Both the A380 and Boeing 787 were introduced into the airline’s fleet successfully. The new aircrafts’ economic and environmental performance has been excellent and customers love them.

“Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved. It has reduced its losses in the year, reporting an operating loss of €166 million. The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.

“Vueling is a great asset and provides a new cultural dimension to IAG. The airline reported an operating profit of €168 million from April 2013, when we acquired it, and expanded its network across continental Europe. To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling’s value to the Group.

“We have shown strong financial management this year. Despite buying Vueling and increasing our capital expenditure, cash was up €724 million versus last year and adjusted gearing was down 1 point to 50 per cent.

“Quarter 4 saw an improved financial performance from all our airlines and we are reporting an operating profit of €113 million before exceptional items. Passenger revenue was up 4.0 per cent and non-fuel costs were down 4.1 per cent”.

Trading outlook:

In 2014 we expect to make steady progress towards our 2015 Group operating profit target of €1.8 billion, with relatively flat unit revenue growth, and margin expansion driven by falling unit costs.

Copyright Photo: Keith Burton/AirlinersGallery.com. Vueling has been a good buy for IAG. Formerly operated by Belle Air Europe, Airbus A320-214 EI-LIS (msn 3492) has been repainted at Southend.

British Airways: AG Slide Show

Iberia: AG Slide Show

Vueling Airlines: AG Slide Show

 

RwandAir takes delivery of its first Bombardier Q400

RwandAir DHC-8-400 over Kigali (Rwandair)(LR)

RwandAir (Kigali, Rwand) and Bombardier Yesterday (February 27) celebrated the delivery of a dual-class Bombardier DHC-8-402 (9XR-WL, msn 4464) (marketed as the Q400). RwandAir’s order for the aircraft was announced on April 22, 2013.

RwandAir is now one of 15 operators of Q400 and Q400 NextGen aircraft in Africa, and its Q400 NextGen aircraft joins more than 55 Q400 and Q400 NextGen aircraft that are already in service, or ordered for operation, in 12 countries in Africa. RwandAir is also now the fourth airline operating the dual-class Q400 NextGen aircraft among the five customers that have ordered this configuration to date.

In other news, RwandAir will launch a new route to Doula, Cameroon on March 30, 2014 with four weekly flights departing Kigali every Tuesday, Thursday, Saturday and Sunday.

RwandAir will operate the new with the new Bombardier CRJ900 aircraft equipped with 7 Business Class and 68 Economy Class seats. The aircraft also operates daily services to Nairobi, Entebbe, Dar es Salaam, Bujumbura and Brazzaville via Kigali.

All images and photos by RwandAir.

RwandAir logo

Cabin photos of the new Q400:

RwandAir DHC-8-400 Cabin Photos (RwandAir)(HR)

China Eastern Airlines orders 70 Airbus A320neo aircraft, will trade-in its seven A300-600s

China Eastern Airlines (Shanghai) has ordered 70 Airbus A320neo aircraft according to Reuters. The new aircraft will be delivered from 2018 through 2020.

China Eastern operates both the Airbus A320 Family and Boeing 737 Family aircraft.

China Eastern will also trade-in its seven remaining Airbus A300-600s.

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A320-214 B-9950 (msn 5668) with Sharklets arrives in Beijing.

China Eastern Airlines: AG Slide Show

Air China to start Beijing-Vienna-Barcelona flights on May 5

Air China (Beijing) will start Beijing-Vienna-Barcelona service on May 5, 2014, giving travelers an additional easy access to the “Capital of Music” and the “Flower of Europe”.

The four-times weekly service CA 841/2 will be offered on Mondays/Thursdays/Fridays/Sundays. The outbound flight will leave Beijing at 02:10 and arrive in Vienna at 06:10 local time and in Barcelona at 09:25 local time. The return flight will leave Barcelona at 11:25 local time and arrive in Vienna at 13:25 local time and Beijing at 05:55. The service is to be operated with an Airbus A330-300. Onboard, the Business Class is outfitted with full-flat seats. The Premium Economy Class offers 120% of the legroom available in standard Economy Class and great mileage deals. The Economy Class impresses with its ergonomic seats that make journeys less tiring. Personal entertainment systems are available in all classes of service.

For a long time, no nonstop flights have been offered to link East Asia and Barcelona, and there have been very few flights between Beijing and Vienna.

As a member carrier of the Star Alliance, the world’s largest airline network, Air China has been actively expanding its European schedule. Currently, Air China offers more than 100 flights per week between China and Europe, serving such major European cities as London, Paris, Frankfurt, Rome, Moscow and Madrid. The Beijing-Vienna-Barcelona service will bring Air China’s European routes up to 23, offering access to 19 European cities and expanding the carrier’s European network. It will further improve its global network with its hub in Beijing and make it easier for travelers to transit to other parts of the world via Beijing.

Copyright Photo: Michael Stappen/AirlinersGallery.com. Airbus A330-343X B-6511 (msn 1110) touches down in Dusseldorf.

Air China: AG Slide Show

Southwest Airlines’ pilot union opposes the application of Norwegian Air International

Southwest Airlines‘ (Dallas) pilots, represented by the Southwest Airlines Pilots’ Association (SWAPA), issued this statement today in opposition to the application to the DOT by Norwegian Air International of Ireland:

The Southwest Airlines Pilots’ Association (SWAPA) is joining numerous pilot groups across the United States along with Airlines for America to battle against Norwegian Air International’s application to the Department of Transportation that would provide them the ability to circumvent labor laws of their home country.

SWAPA’s opposition is contradicted by the Washington Airports Task Force who have chosen to support the Norwegian Air International (NAI) application.  SWAPA has written to the Task Force to rethink their position and not oppose the many D.C.-area Southwest Airlines pilots.

NAI is an attempt by a Norwegian-owned entity to capitalize on the EU’s loose labor and aviation oversight regulations. They have applied for – and received – an Operating Certificate from Ireland although not one of their aircraft will operate from there.  They have also contracted a Singapore-based company to staff their cockpits with Bangkok-based contract pilots (to evade EU labor and tax provisions).

“This ‘Flag of Convenience’ strategy is one that has decimated the U.S. Maritime industry,” said Captain Paul Jackson, Chair of SWAPA’s Governmental Affairs. “That industry was once robust and employed over 200,000 U.S. workers. Today the number of jobs has been reduced to around 2,500 due to the offshoring of work through foreign flag registrations of ships seeking the lax labor laws of those countries. Southwest pilots will not stand by and let this happen to the U.S. airline industry.”

“We are not opposing the entrance of an airline that competes fairly and doesn’t use the lax EU laws to drive out labor protections, bringing a questionable level of oversight to their operation,” continued Jackson. “We strongly believe that our product and the work of our industry can stand up to any competitor if they play by the rules in place and do not seek to lower costs at any price.”

Located in Dallas, Texas, the Southwest Airlines Pilots’ Association (SWAPA) is a non-profit employee organization representing the more than 6,800 pilots of Southwest Airlines. SWAPA works to provide a secure and rewarding career for Southwest pilots and their families through negotiating contracts, defending contractual rights and actively promoting professionalism and safety.

Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-5H4 N527SW (msn 26569) completes its final approach for the runway at Las Vegas’ McCarran International Airport.

Southwest Airlines: AG Slide Show

SWAPA logo

 

American Airlines ends its bereavement fares for family members

American Airlines (Dallas/Fort Worth) has ended its policy of extending special fares to family members who must buy a ticket a last-minute flight because of a relative’s death according to the Associated Press.

The change at American now mirrors the policy at merger partner US Airways, which does not offer bereavement fares. US Airways management is now running the “new American”.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-823 N815NN (msn 33208) completes its final approach from the south into Washington’s Reagan National Airport.

American Airlines (current): AG Slide Show

 

Alaska Airlines is again the official airline of the Iditarod Dog Race

Alaska Airlines (Seattle/Tacoma) will again serve as the official airline sponsor of the Iditarod Trail Sled Dog Race, marking the 36th year the carrier has supported the event.

As the official airline of the Iditarod, Alaska continues its tradition of presenting the Leonhard Seppala Humanitarian Award, which recognizes one musher for providing exemplary dog care and is considered the highest honor a competitor can receive. Voted on by trail veterinarians, the Leonhard Seppala award is named after one of Alaska’s most-celebrated mushers, whose 1925 sled-dog team traveled the longest distance to transport diphtheria serum to Nome.

As part of its sponsorship, Alaska Airlines also will help provide air transportation and dog-care supplies for 45 Iditarod veterinarians who come to Alaska from across the United States to care for the race dogs’ health and safety.

In addition, many Alaska Airlines employees contribute their time at the event. Among them are several pilots who lead the Iditarod Air Force, flying veterinarians, supplies and volunteers to remote checkpoints along the trail.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-490 N705AS (msn 29318) in the “Spirit of Alaska Statehood” special color scheme departs from Anchorage, Alaska.

Alaska Airlines: AG Slide Show

Air Annobón to take delivery of its first BAe RJ85

Air Annobón (San Antonio de Pale, Annobón Island, Equatorial Guinea) is getting ready to take delivery of its first BAe (Avro) RJ85. The pictured RJ85 EI-RJS (msn E2365) was painted in Shannon and has repositioned back to Dublin pending delivery as 3C-MAA. The jetliner is named “Mebana”

Annobón Island (named after “ano bom”, Portuguese for “good year”), also known as Pagalu or Pigalu, is an island of the coast of Equatorial Guinea and is part of the Cameroon Line archipelago according to Wikipedia.

The remote airline was established in 2012 and currently wet leases two 99-seat BAe 146-300s (ZS-SBR and ZS-SOR) from Fair Aviation (Lanseria) in order to operate the daily Malabo-Bata route according to The African Aviation Tribune. According to this report the airline started operations on this route on January 25, 2013. The new addition is expected to replace this wet lease agreement.

Read the full report: CLICK HERE

Copyright Photo: Greenwing/AirlinersGallery.com. EI-RJS arrives at Dublin.

Air Annobón: AG Slide Show

QANTAS to cut 5,000 jobs and 50 aircraft, including 8 remaining A380s to be deferred, last 3 787s to be deferred, retirement of 747-400s to be expedited

QANTAS Airways (Sydney) has also issued its cost-reduction plan on the heels of its first half financial loss reported today (please see the separate financial report). The QANTAS Group issued this statement detailing the cuts:

QANTAS today announced detail of its $2 billion cost reduction program and capital expenditure review.

QANTAS will take action to permanently reduce costs in all parts of the QANTAS Group through to FY17, including fleet and network changes, productivity improvements, consolidation of business activities, new technology and procurement savings.  More than 50 aircraft will be deferred or sold and the Group’s workforce will be reduced by 5,000 full-time equivalent positions by FY17.

The QANTAS Group’s planned capital expenditure net of operating lease liability will be reduced to $800 million in both FY15 and FY16, a total reduction of $1 billion.

QANTAS has reached agreement on the return of its Brisbane Airport terminal lease, together with related assets, to the airport owner at a cash value of $112 million. The broader structural review of the QANTAS Group portfolio continues and no final decisions have been made on other assets.

Chief Executive Officer Alan Joyce said QANTAS would do everything in its control to overcome some of the toughest market conditions it had ever faced.

Market Conditions

“It’s clear that the market QANTAS operates in has changed, with structural economic shifts exacerbated by an uneven playing field in Australian aviation policy,” Mr Joyce said.

“This situation is reflected in the financial result QANTAS announces today, an Underlying PBT1 loss of $252 million for the half-year.  This is an unacceptable and unsustainable result.  Comprehensive action is needed in response.

“QANTAS’ competitors have increased capacity to Australia by 46 per cent since 2009, more than double the world average, at a time of record fuel costs and economic volatility.

“We have met these challenges head on.  Over the past four years, we have been carrying out the biggest transformation since QANTAS was privatized – cutting comparable unit costs1 by 19 per cent over four years, introducing new aircraft and technology on a large scale, modernizing work practices and revitalising service.  But this is not enough for the circumstances we now face.

“The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign government-backed airlines – yet retain access to Australian bilateral flying rights.

“Late last year, these three foreign-airline shareholders invested more than $300 million in Virgin Australia at a time when, as Virgin Australia reported to the ASX on 6 February, it was losing money.  That capital injection has supported continued domestic capacity growth by Virgin Australia despite its growing losses.

“The Virgin Australia Group has increased capacity into the domestic market at more than twice the rate of the Qantas Group since July 2011.  As a result of these combined capacity increases, the total domestic profit pool has been shrunk from more than $700 million in FY12 to less than $100 million in 1H14.

“We have been clear with the Australian Government about the uneven playing field and the measures we believe could address it.  But our focus today is on the immediate steps that Qantas must take.”

Immediate Priorities

“We must take actions that are unprecedented in scope and depth to strengthen the core of the Qantas Group business.

“To reach $2 billion in cost cuts over three years, we have to work our assets harder, become more productive, retire older aircraft, and make sure that our fleet and network are the right size.  We must defer growth and cut back where we can, so that we can invest where we need to.

“We have already made tough decisions and nobody should doubt that there are more ahead.

“While the implementation and pace of delivery must change, the guiding principles of our strategy will not.  Safety remains our first priority and we are committed to being the airlines of choice for customers in all our markets.

“Our long-term goal remains the transformation of the Qantas Group for profitable, sustainable growth.

“Over the next three years, we aim to secure our strong Group domestic position and maximise Qantas International’s competitiveness.

“QANTAS Loyalty will continue to access new markets and revenue streams, building on its success to date.

“When it comes to Jetstar in Asia, we need to take the right decisions in accord with current market circumstances and our balance sheet.  In Singapore, growth has been suspended by the Jetstar Asia Board until such time as conditions improve.

“The over-arching focus in Asia continues to be profitably bedding down existing businesses and partnerships.  Jetstar has been a pioneer Australian brand across Asia and we continue to see major opportunities for it in the world’s fastest-growing aviation region.”

Commitment to Customers

“Despite the tough decisions we have to make, we will keep delivering outstanding service for our customers,” Mr Joyce said.

“Important customer investments will continue, such as the upgrade of our Airbus A330 fleet and the opening of new lounges in Hong Kong and Los Angeles, and the service that QANTAS passengers receive will not be compromised.   Thanks to the skill and commitment of our people, we have earned record customer advocacy, and we plan to keep it there.”

Accelerated Qantas Transformation Program

Fleet and Network

After a detailed review of network and schedules, the QANTAS Group will re-assign aircraft to better match demand, defer aircraft orders, dispose of aircraft, increase fleet utilization and exit under-performing routes.

    • QANTAS Domestic will increase utilisation of narrow-body aircraft, allowing Airbus A330 aircraft in the domestic market to concentrate solely on East-West services and peak services on the Sydney-Melbourne-Brisbane triangle.
    • A330-200s will be freed up to enter the QANTAS International fleet as replacement aircraft, helping to accelerate the retirement of older Boeing 747 aircraft.
    • All six of QANTAS International’s non-reconfigured Boeing 747s will be retired ahead of schedule, by the second half of FY16.  Nine reconfigured Boeing 747s with A380-standard interiors will remain.
    • QANTAS’ final two Boeing 737-400s have been retired this month and all Boeing 767s will be retired by the third quarter of FY15, resulting in cost and passenger benefits from fleet simplification.
    • QANTAS International’s eight remaining Airbus A380 orders will be deferred, with an ongoing review of delivery dates to meet potential future requirements.  Schedule changes will allow maximum use of QANTAS’ current 12 A380s.
    • The final three of 14 Jetstar Airways Boeing 787-8s on firm order will be deferred.
    • Jetstar’s A320 order book has been restructured.

In total, more than 50 aircraft will be deferred or sold.

By FY16, the Group’s passenger fleet will have been simplified from 11 aircraft types to seven aircraft types, with an average age of eight years.

Over the next 12 months, QANTAS will exit underperforming routes and make aircraft changes on certain routes to better match capacity to demand.

    • QANTAS International will withdraw from the Perth-Singapore route (first quarter FY15).
    • QANTAS’ Brisbane-Singapore and Sydney-Singapore services will be operated by Airbus A330s, replacing Boeing 747s (first quarter FY15)
    • QANTAS services between Melbourne and London will be re-timed in November 2014 to reduce A380 ground time in Heathrow (second quarter FY15).  There are no changes to overall capacity on London flights.
    • The Melbourne-London service change frees up an A380 for additional flying, and QANTAS will evaluate opportunities to use the aircraft on other routes.

Workforce Changes

Over the next three years, QANTAS will reduce employee numbers across the Group by the equivalent of 5,000 full-time positions, through measures including:

    • Reduction of management and non-operational roles by 1,500.
    • Operational positions affected by fleet and network changes.
    • Restructure of line maintenance operations.
    • The closure of Avalon maintenance base, as previously announced.
    • Restructure of catering facilities including the closure of Adelaide catering, as previously announced.

The wage freeze for executives implemented in December 2013 will continue and will be extended to all QANTAS Group employees.

The wage freeze will be:

    • Ongoing for executives.
    • Immediate for open EBAs.
    • Proposed for other EBA-covered staff.

This is in addition to the reduction of fees paid to the QANTAS board and a reduction in the take home pay of the QANTAS CEO by 36 per cent this financial year.

No pay rises or bonuses will be contemplated until QANTAS is profitable again on a full-year Underlying PBT basis.

Mr Joyce said these were hard but necessary decisions to protect as many QANTAS jobs as possible and build a strong business for the future.

“I regret the need for these wide-ranging job losses, but we will do everything we can to make the process easier for employees who leave the business,” Mr Joyce said.

“At the end of this transformation, QANTAS will remain an employer of more than 27,000 people, the vast majority based in Australia – and we will be a better and more competitive company.”

Capital Expenditure and Financial Position

The Group’s planned capital expenditure net of operating lease liability in FY14 will be $1 billion.

Planned capital investment, including movements in operating lease liabilities, will be $800 million per year in FY15 and FY16 – a total reduction of $1 billion over the two years.  QANTAS will maintain flexibility to make further changes if needed.

Transformation through FY17 will be funded through the reprioritisation of capital, future free cash flow as benefits from the cost reduction program begin to flow, and asset sales.  QANTAS continues to target positive free cash flow from FY15, with capital expenditure aligned to financial performance.

QANTAS has total liquidity of $3 billion, comprising $2.4 billion in cash and $630 million in standby debt facilities, as at 31 December 2013.

Update on Structural Review

QANTAS has reached agreement on the return of its Brisbane Airport terminal lease, together with related assets, to Brisbane Airport Corporation, with a cash value of $112 million to be recognised in the second half of FY14.

QANTAS continues to work through the broader structural review of the QANTAS Group portfolio launched in December 2013.

The review has identified a number of high-quality assets of significant value.

No final decisions have been made about other assets within the Group’s portfolio.

QANTAS will update the market as and when required.

Copyright Photo: Bernhard Ross/AirlinersGallery.com. The retirement of the on-converted Boeing 747-400s will be expedited. Boeing 747-48E VH-OEB (msn 25778) rests between flights at Frankfurt.

QANTAS Airways: AG Slide Show