Tag Archives: A330-243

Hawaiian Holdings reports adjusted third quarter net income of $49.5 million

Hawaiian Holdings, Inc. (Honolulu), parent company of Hawaiian Airlines, reported its financial results for the third quarter of 2014.

GAAP net income in the third quarter of $35.6 million or $0.56 per diluted share.

Adjusted net income, reflecting economic fuel expense, in the third quarter of $49.5 million or $0.79 per diluted share, an increase of $12.7 million or $0.10 cents per diluted share year-over-year.

Operating revenue per available seat mile (RASM) increase of 4.6% and passenger revenue per available seat mile (PRASM) increase of 2.2%.

Unrestricted cash, cash equivalents and short-term investments of $582 million.

Announced new service from San Francisco to Maui beginning November 2014.

Operated Los Angeles to Kona, three-times-weekly, and Los Angeles to Lihu’e, four-times-weekly, summer seasonal service through the beginning of September.

Operated Oakland to Kona, three-times-weekly and Oakland to Lihu’e, four-times-weekly, summer seasonal service through the beginning of September.

Operated Los Angeles to Maui second daily summer seasonal service through the beginning of September.

Hawaiian Airlines:

Air Transat to fly to Budapest, Hungary next summer

Air Transat (Montreal) (website) has announced it is adding a new destination, Budapest, Hungary, to its trans-Atlantic program for 2015, as well as increasing seats and frequencies on many of its European routes, including Paris, London, Barcelona, Athens, Lisbon, Marseille, Nantes, Rome and Venice.

The new route will be routed from Toronto (Pearson) to Montreal (Trudeau) and finally to Budapest with Airbus A330s from June 17 through October 8, 2015.

Besides service to secondary cities in France, the carrier is now offering twice-daily flights to Paris from Montreal and six a week from Toronto. Air Transat also remains the only airline offering direct flights to Paris from Quebec City, Calgary and Vancouver.

In addition, Air Transat announced a new connection between Halifax, Nova Scotia) to St. John’s, Newfoundland and Labrador and finally to London (Gatwick), with two weekly Boeing 737-800 flights in the high season, in response to strong demand from travellers in the region. The route will be operated from June 17 through September 3, 2015.

Elsewhere in Canada, the carrier will increase flight frequencies on its London routes as well, offering 10 weekly departures from Toronto, two each from Montreal and Halifax, six from Vancouver, and three from Calgary.

Flights will also be added to Athens and Barcelona from Montreal and Toronto, and to Lisbon from Montreal.

In 2015, Air Transat will no longer offer flights to Germany from Western Canada, and will no longer fly to Turkey. Although the airline is eliminating service between Montreal and Istanbul, Air Transat will continue to market that destination, with land tours sold under the Transat Holidays and Transat Discoveries brands.

Copyright Photo: TMK Photography/AirlinersGallery.com. Airbus A330-243 C-GTSZ (msn 971) of Air Transat departs from Toronto (Pearson).

Air Transat:

Air Transat Aircraft Slide Show:

Hainan Airlines arrives in Paris

Hainan Airlines (Haikou and Beijing) on September 3, took off for the first time to Paris. Hainan’s flight HU 7907 took off from Hangzhou International Airport at 9:15 pm (2115), making a stop at Xi’an Xianyang International Airport, before heading on to Paris (CDG). This is the airline’s fifth European route following its routes to Moscow, Saint Petersburg, Brussels and Berlin. The launch of the service will provide new opportunities for further political, economic and cultural exchanges and cooperation between China and France, as 2014 marks the 50th anniversary of the establishment of diplomatic ties between the countries.

Hainan Airlines held inaugural flight ceremonies at Hangzhou Xiaoshan International and Xi’an Xianyang International airports on September 3, with representatives from local government agencies and airline partners as well as Hainan Airlines chairman and vice president in attendance. Passengers onboard the inaugural Airbus A330 flight received gifts from the Hainan Airlines staff before the plane took off for its maiden flight to Paris, the city of romance.

According to Hainan Airlines’ head of marketing, the flight will be offered twice-weekly, on Wednesdays and Saturdays. HU 7907 departs Hangzhou at 8:50 pm (2050) and arrives in Xi’an at 11:10 pm (2310), then departs Xi’an the next day at 1:00 am (0100) and arrives at Roissy-Charles de Gaulle Airport at 6:55 am (0655). The return flight, HU 7908, departs Paris at 2:25 pm (1425) and arrives the next day in Xi’an at 6:45 am (0645), then departs Xi’an at 8:45 am (0845) and arrives in Hangzhou at 10:50 am (1050) (arrival and departure times are local).

The route will be operated using an Airbus A330-200 wide-body aircraft. The plane’s cheery and spacious cabin seats 36 in Business Class and 186 in Economy Class. The Business cabin is configured with 180-degree flat-bed seats with built-in gentle massage and 74 inches of space separating each seat. In addition, wide HD LCD screens and adjustable reading light serve to make sure passengers feel comfortable in a private environment.

Since 1993, Hainan Airlines has evolved from a regional to an international airline with several long haul intercontinental routes. The airline has launched routes to Chicago, Boston and Paris in recent years. According to the Sino-French Joint Press Communique, which emphasized building a peaceful, democratic, prosperous and progressive world, both China and France seek to strengthen mutual benefits and win-win results in civil aviation and the aviation industry. This provides Hainan Airlines with strong policy support and confidence to speed up the build-out of its international route network.

Hainan Airlines:

Virgin Australia CEO: “The 2014 Financial Year has seen one of the most difficult operating environments in the history of Australian aviation”, loses $332.2 million in its fiscal year

Virgin Australia Holdings Limited (Virgin Australia Airlines) (Brisbane) reported a Statutory Loss after Tax of A$355.6 million ($332.2 million) including the impact of equity accounted investments. Financial performance for the 2014 Financial Year was impacted by the confluence of excess market capacity, weak consumer sentiment, continued economic uncertainty and the $51.6 million cost of the carbon tax.

Virgin Australia Chief Executive Officer John Borghetti said: “The 2014 Financial Year has seen one of the most difficult operating environments in the history of Australian aviation.

“While the Virgin Australia Group performed well in attracting high yielding passengers and containing cost growth over the full year, underlying revenue performance was impacted by the challenging operating conditions.

“Notwithstanding these conditions, it was important for the Virgin Australia Group to complete the Game Change Program strategy and strengthen our balance sheet in order to deliver sustainable returns for shareholders over the long-term.

“Over the 2014 Financial Year, the Group further increased revenue from the Corporate and Government market segment, which now represents over 25 per cent of our domestic revenue, far exceeding our original goal of 20 per cent.

“Furthermore, our success in integrating the Skywest8 business has enabled us to significantly grow revenue from the Charter segment, increasing comparative revenue by around 30 per cent on the 2013 Financial Year. We have also positioned our loyalty program Velocity Frequent Flyer as a significant value driver for the Group, with the highest annual membership acquisition in the program’s history and a significant increase in member engagement.

“The Group’s cost program delivered a significant reduction in cost growth over the second half of the 2014 Financial Year, with growth in Cost per Available Seat Kilometre (Underlying CASK)9 including fuel and foreign exchange halving to approximately 2 per cent – a strong performance given we had lower capacity growth and we continue to invest in product and service initiatives for our customers.

“As a result of several major balance sheet initiatives executed during the year, the Virgin Australia Group finished the year with a total cash position of $783.8 million and an unrestricted cash position of $541.0 million.

“Virgin Australia also re-entered the Australian domestic budget market through the acquisition of a 60 per cent interest in Tigerair Australia at the beginning of the 2014 Financial Year. Over the last 12 months Virgin Australia has worked with Tiger Airways Holdings Limited and Tigerair Australia to overhaul revenue and accounting systems, develop the management team, improve asset utilisation and enhance the operational platform. Tigerair Australia’s performance needs to be viewed in the context of overall industry performance and weak consumer sentiment, particularly in the last quarter of the year, which has a more pronounced impact on low cost carriers. As a result of progress made during the 2014 Financial Year, and in particular marked increases in customer satisfaction, Tigerair Australia is now well positioned to benefit from a recovery in the domestic market when conditions improve.

“While the 2014 Financial Year has been an extremely tough year for the industry, I am confident that the Virgin Australia Group is in a strong strategic position going forward.

“This next period for us is about maximising the Group’s potential, by extracting value from the business and generating sustainable profitability”, Mr Borghetti said.

Financial and Operating Performance

“Total Group Revenue increased 7.1 per cent to $4,306.6 million on the 2013 Financial Year, including the additional revenue associated with the acquisition of Skywest. While revenue growth in the leisure and regional segments was subdued, this was partially offset by revenue growth in the Corporate and Government, Charter and Interline and Codeshare segments.

“Group Yield increased by 1.2 per cent, driven by a change in customer mix and improved access to global distribution channels following the introduction of the SabreSonic system in January 2013.

“The recently acquired Skywest business has now been fully integrated into the Virgin Australia platform and we are seeing positive performance from the Charter business which has increased its comparative revenue contribution by 30 per cent this financial year.

“International revenue increased 2.6 per cent compared to the 2013 Financial Year against the backdrop of strong competition and a particular weakness in the South East Asian market.

“As we outlined in February, Virgin Australia increased its focus on driving down costs during the second half of the 2014 Financial Year. Over the half, we implemented a number of major cost reduction initiatives including programs to reduce overall employment and procurement costs, as well as introducing a new Fuel Management System, targeting 2 per cent fuel efficiency savings by the end of Financial Year 2015.

“While there was a material increase in overall costs this year due to the full year impact of the Skywest acquisition in April 2013, Underlying CASK growth was well contained over the year, with a particularly strong performance in the second half.

“Virgin Australia incurred $117.3 million of restructuring costs11 during the 2014 Financial Year as a result of the balance sheet initiatives undertaken, the completion of strategic investments and the optimisation of the business platform. The business has also taken a restructuring provision for the exit of the two original Airbus A330 aircraft, as part of our program to reduce our future cost base through further fleet optimisation, and has booked an asset impairment charge of $56.9 million, driven predominantly by excess capacity and competitive pressure in the South East Asian market.

“We continued to exceed business efficiency project targets, delivering cumulative efficiency gains of more than $191 million and remain on track to deliver cumulative productivity gains of more than $400 million over the three years to 30 June 2015.

“With Virgin Australia’s major shareholders equity accounting their investments in Virgin Australia from 1 July 2014, it was appropriate for Virgin Australia to align its accounting policies with those of its shareholders and other industry participants. Consequently, a revised maintenance policy in relation to leased aircraft has been adopted which required a restatement of prior financial year results in the Appendix 4E. As a result of the adoption of this maintenance policy, there is an increase in the opening retained earnings and the equity of the business of $67.2 million.

“Virgin Australia operates a very successful Australian dollar designated hedging program, providing a large degree of short term certainty and longer term participation and protection. The program achieved effective fuel and foreign exchange rates during the 2014 Financial Year, delivering a result that was significantly favourable compared to spot prices.

“In order to reduce the volatility of reported financial performance attributed to the hedging program, Virgin Australia will adopt AASB 9 – Financial Instruments early, from 1 July 2014. As a result of the early adoption of this accounting standard, future statutory financial results going forward are expected to reflect reduced accounting ineffectiveness and deferral of time value of options until maturity for qualifying hedges. In the 2014 Financial Year, time value of options has been separately identified from the underlying results in anticipation of adopting this standard. The 2013 comparatives have been restated in the Financial Year 2014 ASX presentation to reflect this treatment.

“Virgin Australia acquired a 60 per cent interest in Tigerair Australia on July 8, 2013, with our share of equity-accounted losses for the 2014 Financial Year amounting to $46.1 million. Despite the challenging operating conditions, Tigerair Australia carried 500,000 more passengers than the previous year, with passenger numbers increasing to 3.3 million for the 2014 Financial Year.

“In terms of capacity growth, Virgin Australia recorded normalised growth of 0.112 per cent across the domestic network (excluding Tigerair Australia) for the 2014 Financial Year.

“Importantly, during the 2014 Financial Year, domestic Revenue Load Factors expanded 1.8 percentage points to 76.9 per cent, supported by a record 17.3 million customers choosing to fly with us.

“Virgin Australia is focused on delivering on time services for all of our customers and we have achieved an On Time Performance (OTP) of 84.0 per cent for the 2014 Financial Year, an increase of 2.9 percentage points compared to the prior corresponding period”, Mr Borghetti said.

Cash Position

“Virgin Australia paid down approximately $200 million in Gross Debt during the second half of the 2014 Financial Year and finished the year with a total cash balance of $783.8 million and an unrestricted cash balance of $541.0 million, up $203.3 million and $214.5 million respectively on 30 June 2013.

“We have significantly enhanced our balance sheet and liquidity through initiatives such as the issue of Enhanced Equipment Notes in October 2013, the Entitlement Offer in November 2013 and the sale and lease back of our Brisbane based office in May 2014. The proposed transaction with Velocity Frequent Flyer announced today will see a further boost to the liquidity position of the Group.

“Virgin Australia remains focused on maintaining a strong unrestricted cash balance and continues to review ways to utilise resources more efficiently”, Mr Borghetti said.

Game Change Program Strategy Update

“When we introduced the Game Change Program, it was a long-term strategy to reshape the airline and establish the Virgin Australia Group as a long-term player in all key segments of the Australian aviation market.

“Over the 2014 Financial Year, the Group focused on fast-tracking the completion of the Game Change Program and finished the strategy ahead of schedule.

“I am pleased to report that we have now increased our percentage of domestic revenue from the Corporate and Government market segment to more than 25 per cent, far exceeding our original strategic goal of 20 per cent. This is an enormous credit to all of our team members, who have worked tirelessly to ensure we could attract this important market segment.

“As a result of the important alliances we have forged and the implementation of SabreSonic, we have developed a comprehensive global virtual network and accessed growth markets around the world. In just a few years, the business has grown from offering around 150 destinations to more than 460 destinations and increased interline and codeshare traffic by more than 300 per cent.

“At the same time we have completed the important process of integrating and aligning the airline operations and brands, delivering and investing in one strong Virgin Australia brand that is recognised around the world.
“Under the Game Change Program, Velocity Frequent Flyer has gone from strength to strength, expanding its global network to over 460 destinations and offering competitive earn and redemption rates and unique member rewards. Over the last four years, the program has doubled membership numbers to 4.5 million and has built the widest retail offering of any program in Australia. Velocity has achieved a range of industry accolades, including recognition in five categories at the 2014 Freddie Awards, the highest achievement of any airline program at these global awards.

“Completing the transformation of the in-flight and on-the-ground experience under the Game Change Program has been a key focus for the business during the 2014 Financial Year, with significant enhancements to our lounge network, in-flight entertainment and catering”, Mr Borghetti said.

“It is thanks to the tireless efforts of every one of our team members that we have successfully implemented this strategy ahead of schedule in a challenging environment. We have transformed the business and our research indicates that we have now established Virgin Australia as the airline of choice14. Therefore we can confidently say that “The Game” has changed.

“I would like to thank all of our team members for their passion and dedication in delivering the strategy”, Mr Borghetti said.

Virgin Vision 2017

“Now that we have completed the Game Change Program, this next period for us is about maximising the Group’s potential, by extracting value from the business and generating sustainable profitability. To do this, we need to increase the growing customer loyalty to the Virgin Australia Group. That is what will assure our business of a stable future revenue stream and enable us to deliver sustainable profitability as the market recovers.

“A few years ago, many travellers were wedded to our competitor because they had no other viable alternative. The Game Change Program essentially created an indifference15 and helped to dislodge those travellers loyal to the incumbent airline group, so that they were happy to travel with either of us, whilst building a Virgin Australia loyalty base.

“Going forward, we no longer want to create an indifference for this group, we want to convert more of them to our loyalty base. Therefore, our Virgin Vision to 2017 is to become Australia’s favourite airline group.

“Over the next three years, the Virgin Australia Group will focus on six key areas: capitalising on growth business opportunities, driving yield enhancement, implementing a new cost program, optimising the balance sheet, setting a new standard in customer experience and developing our people to their full potential”, Mr Borghetti said.

Capitalizing on growth business opportunities

Velocity Frequent Flyer

“Velocity Frequent Flyer will be one of our key growth businesses, as we aim to build one of the world’s leading loyalty programs. Today’s announcement regarding a strategic transaction for Velocity Frequent Flyer is just the beginning. This transaction represents an opportunity to accelerate growth and value for Velocity and the Virgin Australia Group. Over the next three years we plan to grow membership to more than 7 million, further diversify Velocity’s partner mix, increase partner numbers and strengthen member engagement in both points earned and points redeemed.

Charter

“Charter also represents a significant opportunity for the Group to grow and diversify revenue. Our Charter business has had a very successful first year, delivering comparative revenue growth of around 30 per cent for the 2014 Financial Year, from a combination of new contracts, growth from existing clients and the launch of our first charter operations on the East Coast. This business continues to represent strong growth opportunities for the Group, and we expect it to deliver more than $200 million in revenue by 30 June 2017.

Freight

“In the 2015 Financial Year, we will launch a Freight division, which will leverage off our current Regular Passenger Transport and Charter capability. We expect the freight business to grow on a similar trajectory to our new charter business with revenue expected to treble to between $150 and $200 million over the next three years to 30 June 2017.

Tigerair Australia

“Our investment in Tigerair Austraia presents an important opportunity for the Group to participate in the growth of the budget market segment.

“The Tigerair business has undergone the first year of its transformation program, which sets out a clear path to profitability. The focus over the next three years will be on successfully executing this program, to achieve profitability in Financial Year 2017.

“This includes:

Further improving customer satisfaction – Customer experience is a major driver of revenue growth and will be a strong focus for Tigerair Australia, with significant progress already made during the 2014 Financial Year.
Driving incremental revenue growth – Tigerair Australia has implemented a number of revenue enhancing initiatives this year, including a new revenue management system. Further initiatives to help drive incremental revenue growth will be rolled out.

Delivering cost synergies – Tigerair Australia will implement a range of network, operational and financial synergies, building on the cost savings from synergies already delivered, including the launch of the Brisbane base, coordinated pricing and joint procurement of fuel purchases with Virgin Australia.

Develop an efficient operating platform and network footprint – Operational efficiency will be a continued focus. Tigerair has made a number of enhancements this year which will drive benefits, including launching a Brisbane base, securing a new more efficient maintenance provider in BAE systems and reaching agreement with Sydney Airport Corporation Limited about infrastructure constraints at Sydney Airport.

“We are committed to working with Tiger Airways Holdings Limited and Tigerair Australia to ensure the airline has the right network footprint, service standards and cost leadership, to deliver improved financial performance.

Drive yield enhancement

“In addition to capitalising on growth businesses, we will be focusing on other opportunities to drive yield enhancement. This includes increasing our target of Corporate and Government domestic revenue mix to around 30 per cent by 30 June 2017; increasing interline and codeshare revenue through strengthening and expansion of alliance partnerships and optimising our new PROS revenue management system to drive incremental revenue opportunities.

$1 billion cost program

“Importantly, cost will be a major focus over the next three years, building on the work of the Business Efficiency Project. Over the five years to 30 June 2017, the program will generate $1 billion in cumulative productivity gains and will centre on the following:

Enhancing procurement – individually and with alliance partners.

Improving productivity – including increased fuel efficiency, increased utilisation of the Boeing 737 fleet and the retirement of two 12 year old Airbus A330 aircraft; as well as bringing forward our Boeing 737 Max aircraft deliveries from 2019 to 2018.

Streamlining our operations – including the integration of Virgin Australia’s New Zealand operations into the rest of our international business and the consolidation of our long-haul international bases from three into two.
Optimise the balance sheet

“Going forward, optimizing the balance sheet will be central to maintaining a strong platform. The proposed transaction with Affinity Equity Partners and Velocity Frequent Flyer will improve the liquidity and gearing position of the Virgin Australia Group even further, providing additional flexibility and resilience as we execute on “Virgin Vision 2017”.

“As a result of this transaction, lease-adjusted balance sheet gearing will reduce by 8 per cent. The Group profit and loss impact from this transaction is expected to be neutral in the 2015 Financial Year. Over the next three years, we will continue to execute initiatives designed to improve liquidity, reduce debt and maintain a strong cash balance.

Set a new standard in customer experience

“The Virgin Australia Group will also maintain its strong focus on product and service and over the next three years, we will set a new standard in customer experience.

“While we cannot disclose all the initiatives for competitive reasons, they include: the introduction of Business Class on our Trans-Tasman and Fiji services from February 2015; the launch of our first Premium Exit at our Melbourne Airport lounge next month; the unveiling of a new state-of-the-art airport ground experience with the opening of our new terminal and lounge in Perth next year; and the upgrade of our Brisbane terminal and launch of our Darwin lounge in March next year.

“Furthermore, in the next few weeks, we will make a major announcement on our premium product offering.

Develop our people to their full potential

“Our people, and their willingness to go above and beyond for our customers and our shareholders, remains the Virgin Australia Group’s core differentiator in the market.

“We are committed to remaining the most attractive employer in the industry and, for that matter, one of the most desirable employers in Australia. It is our ability to attract, develop and retain the best talent, not just in the industry, but across Australia and beyond, that will see us succeed. Over the next three years, we will be rolling out a range of initiatives to continue to develop our people to their full potential.

“I would like to take this opportunity to thank all of our team members for their passion and dedication to delivering the Game Change Program strategy. We are privileged to have such a talented, devoted team and we are committed to supporting their development”, Mr Borghetti said.

Conclusion and Outlook

“The 2014 Financial Year was an extremely challenging year for the Virgin Australia Group and the Australian aviation industry as a whole.

“Given the uncertain economic environment we are unable to provide guidance for the 2015 Financial Year at this time and we will not be providing guidance on capacity growth going forward.

“However, the Virgin Vision to 2017 sets out a comprehensive plan of initiatives that will see us deliver a sustainable, profitable business over the long-term.

“While the current environment remains challenging, the Virgin Australia Group has significantly enhanced its strategic position over the last four years and is well placed to capitalise on market recovery”, Mr Borghetti said.

Virgin Australia:

Azul to introduce the new Airbus A330 on domestic routes

Azul Linhas Aereas Brasileiras (Campinas-Viracopos) as previously reported, has filed with the National Civil Aviation Agency (ANAC) for its approval for flights to Fort Lauderdale/Hollywood (FLL) and Orlando (MCO). If approved, FLL service will start on December 1 and MCO service on December 15 with its new Airbus A330-200s.

In the meantime, the carrier will start operating the new type on domestic routes from Campinas to Brasilia, Manaus, Recife and Rio de Janeiro (Galeao), also subject to approval by ANAC. The new type will be operated on domestic routes from September 1 through November 30.

Copyright Photo: Azul. Airbus A330-243 PR-AIV (msn 532) is painted in the special Brazilian flag motif and was delivered on August 20, 2014 from AerCap. The wide body airliner has previously been operated by MEA (F-OMEC), Gulf Air (A9C-KI) and Turkish Airlines (TC-JNY).

Azul:

The Sunday Times: Monarch Airlines to cut more than 1,000 jobs, shrink the fleet to reduce its losses and find a new investor

Monarch Airlines (London-Luton and London-Gatwick) is at a critical stage in its nearly 47 years of existence. According to this article by The Sunday Times, Monarch will cut over 1,000 jobs, reduce the fleet from 42 aircraft to 30 in order to reduce losses. Long-haul flights will be dropped. The airline had previously announced it would drop charter flights and concentrate on scheduled flights. Seabury Capital is also leading the search for new investors.

A lingering question shadowing the company is its pension obligation.

Read the full article: CLICK HERE

Monarch Airlines talks about its history on its website:

The Group, as its exists today, came together in 1968 when Monarch Airlines was formed under the same ownership as Cosmos Holidays and Monarch Aircraft Engineering, following their establishment in 1961 and 1967 respectively.

Monarch Airlines was created to respond to the expanding charter holiday industry and demand for faster travel. In its early days Monarch operated with just two aircraft, but in the early 1970s the airline began to meet the requirements of an evolving travel market by committing to an all-jet fleet and by 1972 was carrying 500,000 passengers per annum.

The advent of mass market independent travel saw Monarch launch its scheduled division with increased routes in 1985. The Airbus A330 was added to the fleet in 1999 featuring new Premium cabin and a range of upgraded passenger benefits, followed in 2001 by the launch of Monarch’s first online booking tool. By 2007 online reservations had grown to over 90% of total bookings.

Monarch Airlines is now one of the leading scheduled carriers at its key bases at London Gatwick, across the Midlands and the north of England. Its current 30 aircraft fleet provides an annual capacity of seven million seats from six UK bases to destinations around the Mediterranean, the Canaries and to ski destinations in winter. The Airline also offers capacity to tour operators both through its scheduled and operations and traditional charter activities, where it continues with selected long-haul flying.

Monarch Airlines has always adapted to changing conditions in the marketplace:

On the Monarch blog, in this article written by Hannah Sardar, the author interviews Commercial Revenue and Network Manager – Marjan Schöke, on how the company puts together its schedule (Monarch just announced it was dropping East Midlands as we previously reported). Here is the article which is very insightful:

My name is Hannah and I work in the social media team for Monarch. We have had a few questions about how Monarch put together a flight schedule and why we have delayed the schedule for our Summer 15 flights. So, I’ve gone straight to the man who knows, our Commercial Revenue & Network Manager – Marjan Schöke to get his insight and find out how we create a network schedule. Who better to answer your questions?

Marjan Schoke

So Marjan, I am going to start with a broad question! In a nutshell what is the process for setting up a flights schedule?

Well, in a nutshell proves a bit tricky. Creating a flight schedule is not single process but the result of a lengthy and continuous analysis. Let me try to give you some insight into the complexity of the creation of a schedule. Marjan

The basis is the overall strategy of the company. It defines what market segments we serve, what aircraft type we are using and so on. So for a specific period we have a picture of where we want to head with our network and how many aircraft we have available for implementing this defined strategy.

As a first step in creating a schedule we evaluate many different variables including; customer demand, market trends, the economy and passenger flows in order to evaluate the future profitability of a route. In addition many inputs from operations and maintenance have to be taken into account.

We evaluate market trends in detail. One question that needs to be answered is how the economic development for next year will influence the booking and travel patterns of our customers. For instance are they taking longer or shorter breaks? How taking short breaks? And of course we need to gain an understanding what the hotel availability is for certain destinations. All of this combined enables us to forecast market growth for the coming season. Keeping in mind the competition we then define how often we want to fly each route; we then decide on the aircraft to be used for a specific flight. This gives us the information we need to create our flights schedule.

A question I’ve always wanted to know is; do all airlines work the same way when releasing a schedule? Some airlines are before and some are after Monarch, can you please tell us why?

I would not be able to confirm how all airlines plan their schedules but I can say that in my opinion, the overall process is the same for each airline. However, the way the market analysis is done will differ for each airline, also pending what customer group they are serving. Doing research for business travellers is different from research on holiday-makers.

Why is the flights schedule for summer 2015 being released in stages this year?

There are a lot of changes going on within the company. We have new management and there are many people like me who have recently joined the company. A lot of new know-how and innovative processes are brought into the company. For example in my team we have adjusted our internal processes and we are putting much more time towards listening to feedback from customers or researching travel behaviour.

Our aim is to release a stable schedule that avoids as far as possible changes a few months or even weeks before the flights. We want to avoid rescheduling flights as customer feedback states this is really frustrating for them.

So, it’s taking longer because we are doing it once and doing it right. We have had a much closer look at each individual route, spent a lot of time on making the departure times more sociable with the ultimate objective being to give flexibility and value to all our customers.

We have already released four bases – Luton, Gatwick, Birmingham and Manchester and may still add flights to these bases over the coming months however the review is on-going for Leeds Bradford. The schedule for summer 2015 will offer our customers a better service with more frequent flights to some of our most popular destinations, better weekend flight times & flexibility to book a short break or a mid or longer length holiday.

When is the best time to buy cheap flights – now, when flights have just been released… or later, when there’s a deal or promotion?

It’s always best to book as soon as you can. It is an obvious statement but, we have a fixed amount of seats available on each aircraft on each flight. The fuller the aircraft gets for a specific flight the higher the price will be. So, when no seats have been booked soon after the flight goes on sale; customers will generally get the best price. It is the objective of my team and I to fill those seats, whereas closer to the time of departure we have fewer seats available and this may increase the price.

We’ve been asked about why our flight departure and arrival timings are different this year to previous years, how would you reply to this?

We look closely at internal data, data from external sources and we gain an understanding from our own customers about which departure times suit them best and which routes they prefer. An example of this: we know that on certain routes most passengers prefer to fly back in the evening so they’ve had a full day on the beach and then they fly home. Of course this varies by route.

This is a good opportunity to explain about “airport slots” to answer this properly. A slot is the right to depart or land at a specific time at an airport. Some airports like London Gatwick are very busy as most airlines want to depart or land at similar times (the customer preferences are quite often very similar).

There is a worldwide rule that manages the arrival and departure slots.

Other alterations to our schedule are required due to slight changes in the legislation concerning cabin crew duty working times. A Monarch crew that start later in the day can for example fly longer than a crew that gets up very early in the morning and of course we need abide by the working rules set for our crew.

So, based on that answer, how do airports decide which airline gets which slot? That sounds really difficult!

Well yes it can be quite challenging at some airports. This is a lengthy process that is followed worldwide by all airlines and all slot coordinated airports. The rules are created and implemented by the International Air Transport Association (IATA) and each country has a slot coordinator who is in charge of administering all the slots for the specific countries airports.

All airlines apply for the slots they require and then the initial slots are given to the airline. Whereas if an airline has flown consistently in the last season it is given the same timings (they call this a grandfather right) as before to try and give continuity.

This is why I explained sometimes we fly the exact same flight time.

However, it is possible for airlines to swap flight slots or request different times. Airlines then start to adjust their schedule once they feel confident about their slots. About two months before the summer season starts the airlines hand back all slots they don’t require and of course then a final swapping and adjustment to the schedule is completed.

Did you know? An airline is only given slot confirmation 2- 3 months before the winter or summer schedule begins. This is why sometimes we have to alter some schedule times – but this is typically within 30 minutes of the original timing. We also estimate the likely outcome of this slot allocation process so that our customers can book their holiday with more than 3 months’ notice.

Why do you decide to operate flights very early in the morning or very late at night?

An aircraft is very expensive and of course we need to utilize it as much as we can. Just to fly one flight per day within Europe “does not pay” for the aircraft.

This means we have to find the right balance between a lot of flying per day and the preferences of our customers. To find the right balance we speak to customers and research travel preferences. For example we have found that many people prefer to set off early to get the whole day at their holiday destination and this goes for coming back too.

If we depart too late in the morning we can only fly one flight per day which restricts customer choice and require us to increase the price for that flight much higher.

Why do we fly different types of planes to different locations, why aren’t they all the same?

We currently use a mix of aircraft ranging from the Airbus A320 with 174 seats to the Airbus A330 with 358 seats. Some aircraft have a longer range than others. Our A330 is being used for long-haul flying, whereas the A320 is better used within Europe. On airports where we have slot restriction – meaning we have only limited rights to take off or land at the ideal time – and very high demand for a route we might decide to use the larger aircraft. In addition; we create the schedule in a way that we can swap aircraft sizes between routes. This enables us to fly more of our customers to very popular destinations when demand is high.

If Monarch wanted to launch a new route, how does that work?

Well as I am sure you can image, a new route has to be researched well. Starting a daily flight within Europe can be very expensive. We need to be convinced that enough passengers will fly on the new route and will find it enjoyable for a holiday. We factor in “running costs” from an airline point of view including; fuel costs, the crew , the aircraft, government and airport taxes and also hotel prices when the customers arrive.

Where do Monarch fly to? Which destinations?

Where can I fly to with Monarch?

Of course we have a look at how many passengers travel to this destination already and what the destination can offer to our customers. One example is our decision to fly to Salzburg in the winter months as a Ski destination. It offers a wide variety of ski and winter experiences has a very good infrastructure and at the same time is an interesting city destinations.

Can you please tell us why are some routes released before others?

After the schedule is approved it is exported to the Monarch sales-system and put on sale for our customers to purchase. Sometimes we decide not to put every flight on sale as we are still waiting on confirmation of airport-slots. In some instances we also wait and see whether certain destinations are booked much better than anticipated. We can then have more flights to popular destinations.

Why do some UK airports have more flights than others?

This is due to different customer demand being different from the regions. Our customer profile and preferences are very different across the UK bases we travel from.

What’s the most interesting part of the process for you Marjan? Is it quite challenging?

I’d say the most interesting part is that each individual route does has its own “personality” and typical customer which I find fascinating. My team and I like exploring this”personality” through analysing data.

And while doing so you look outside the window and see a Monarch aircraft taking off… it is a fantastic feeling to know that onboard that aircraft are customers jetting off to start their short-break weekend or holiday. This is quite rewarding.

When I first started at Monarch in March this year, I thought that the travel behaviour of customers would be the same from all the UK bases we fly from but actually in reality it’s different. Birmingham has different types of customers than those who travel in London – even if the flights from the two airports go to the same destination.

What is the most common customer misconception in your mind, about how flight schedules are put together?

Understandably our customers have their specific flight on their mind when thinking of schedules and ask why I cannot put flights at certain times in the day. Unfortunately it is not always that easy. Our customers rarely know how much complexity there is in the airline industry – though I am a big fan to make it less complex!

Hopefully I have given you some general insights just how complex it is when putting together a flight schedule.

It’s easier to think about a single aircraft taking one flight out and one flight back but we need to be strategic about how we move those aircraft around and make sure we are flying to and from the places our customers want to go and we need to do this for all 42 aircraft in the fleet!

Having the overview over the flow of an aircraft (and even the whole fleet) is one of the most interesting things in aviation as every aspect of an airline comes together. My colleagues and I absolutely love our jobs, as you can probably guess! I hope that helps explain everything for you and our customers.

I think it’s safe to say I’ve learnt just how complex putting together an airline schedule is, thanks so much for you time.

Copyright Photo: Paul Denton/AirlinersGallery.com. With the long-range routes being cut, Monarch’s two 374-seat Airbus A330-200s will be dropped from the fleet. The last three Boeing 757-200s are also being retired from the fleet at the end of the summer season 2014. Airbus A330-243 G-SMAN (man 261) taxies at Geneva.

Monarch Airlines:

Monarch Video:

Azul to fly to Fort Lauderdale/Hollywood starting on December 1 and Orlando on December 15

Azul Linhas Aereas Brasileiras (Campinas-Viracopos) has filed with the National Civil Aviation Agency (ANAC) for its approval for flights to Fort Lauderdale/Hollywood (FLL) and Orlando (MCO). If approved, FLL service will start on December 1 and MCO service on December 15 with its new Airbus A330-200s.

Schedule:

Copyright Photo: Rodrigo Cozzato/AirlinersGallery.com. Airbus A330-243 EI-FEL (msn 527) is pictured at Belo Horizonte (CNF).

Azul:

Hawaiian to fly between San Francisco and Kahului, Maui

Hawaiian Airlines (Honolulu) has announced it will offer nonstop service between San Francisco International Airport (SFO) and Kahului Airport (OGG) beginning November 20, 2014.

The nonstop service between San Francisco and Maui will begin with flights four times a week from November 20, 2014 before moving into daily service beginning December 17, 2014. The new daily service will add a total of more than 210,000 seats to both San Francisco and Maui travel markets per year, and will be operated by Hawaiian Airlines’ wide-body, twin-aisle Airbus A330-200 aircraft, which seats 294 passengers, with 18 in First Class and 276 in the Main Cabin.

Copyright Photo: Ivan K. Nishimura/Blue Wave Group/AirlinersGallery.com. Airbus A330-243 N395HA (msn 1469) departs from the Honolulu base.

Hawaiian Airlines:

Gulf Air adds its first retrofitted Airbus A330-200

Gulf Air (Bahrain) received its first retrofitted Airbus A330-200 aircraft at Bahrain International Airport today (July 23), arriving from Canada. The plane is newly configured for a total of 214 seats in a two-class configuration of 30 Falcon Gold Class and 184 Economy seats with significant enhancements across both cabins.

The revamped A330 product introduces fully-flat bed seats in the airline’s Falcon Gold Class, upgraded seats in Economy Class and a state-of-the-art in-flight-entertainment system throughout, and was designed specifically for Gulf Air, integrating features based on passenger feedback.

Realized by three key partners: Avianor, Zodiac Aerospace and BE, the aircraft’s new Falcon Gold seats convert into fully-flat beds measuring 1.90 meters in length guaranteeing a comfortable night’s sleep. The Falcon Gold seats offer more personal space between seats than the airline’s previous A330 business class product, allowing passengers to sit back and relax in a 22-inch wide armchair that converts easily into the passenger’s desired position. The new Economy Class seats offer passengers the very latest in comfort: a greater recline to compliment an 18-inch seat-width and an adjustable head and foot rest that allows greater passenger relaxation.

All seats in Gulf Air’s upgraded A330 aircraft include an integrated Audio-Video on Demand (AVOD) feature, an individual touch screen (15-inch in Falcon Gold class and 9-inch in Economy) in every seat and high quality headphones. A suite of movies, video and audio titles in several languages are on offer, in addition to games. A USB port is available in every seat to allow passengers to easily charge electronic devices.

Gulf Air’s second retrofitted A330 is scheduled to arrive in early August while the carrier’s A330 fleet retrofit is scheduled to be completed by the last quarter of 2014.

Gulf Air’s A330 aircraft are used primarily on London and Bangkok routes.

Top Copyright Photo: Rolf Wallner/AirlinersGallery.com. Airbus A330-243 A9C-KJ (msn 992) taxies at Zurich.

Gulf Air:

Hawaiian signs a MOU for six new Airbus A330-800neo aircraft, reports 2Q GAAP net income of $27.3 million

Hawaiian Airlines (Honolulu) today announced the signing of a Memorandum of Understanding (MOU) with Airbus to acquire six new Airbus A330-800neo aircraft starting in 2019, with rights to purchase an additional six aircraft as part of the carrier’s vision to serve farther nonstop destinations from Hawai’i.

Image: Airbus.

The order replaces Hawaiian Airline’s existing order for six Airbus A350XWB-800 aircraft, which were due for delivery from 2017. Hawaiian Airline’s overall capital commitments will decrease in absolute terms and will be pushed further into the future. For the period through the end of 2018, this amounts to $500 million. Terms of the agreement were not disclosed, but the aircraft have a total list-price value of approximately $2.9 billion if all of the purchase rights are exercised.

“The A330-800neo’s fuel efficiency, additional range and commonality with our existing A330 fleet makes the A330-800neo an elegant solution to our need for growth aircraft toward the end of this decade,” said Mark Dunkerley, Hawaiian Airlines president and chief executive officer.

The A330-800neo wide-body is similar in size to Hawaiian Airline’s A330-200 which seats 294 passengers in a two class configuration (First and Coach), and will incorporate aerodynamic enhancements and new cabin features. The new aircraft will have up to a 400-nautical mile increase in range and reduced fuel consumption by 14 percent per seat with the latest generation Rolls-Royce Trent 7000 engines.

Hawaiian Airlines currently operates a fleet of 50 aircraft, comprised of 29 wide-body, long-haul aircraft (294-seat A330-200 aircraft and 252 to 264-seat Boeing 767-300 aircraft), 18 narrow-body 118 to 123-seat Boeing 717-200 aircraft and three 48-seat ATR 42-500 for Neighbor Island flights.

Hawaiian Airline’s existing orders include an additional four new A330-200s for delivery by 2015 and 16 narrow-body A321neo aircraft starting in 2017.

On the financial side, the company issued this statement for the second quarter:

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., today reported its financial results for the second quarter of 2014.

GAAP net income in the second quarter of $27.3 million or $0.43 per diluted share.

Adjusted net income, reflecting economic fuel expense, in the second quarter of $22.4 million or $0.35 per diluted share, an increase of $9.7 million or $0.11 cents per diluted share year-over-year.
Passenger revenue per available seat mile (PRASM) increase of 4.1% and operating revenue per available seat mile (RASM) increase of 6.7%.

Unrestricted cash, cash equivalents and short-term investments of $564 million.

“The same trajectory of substantially improving financial performance was evident in the second quarter as it has been over the last few quarters,” said Mark Dunkerley, Hawaiian Airlines president and chief executive officer. “Strong demand across our geographies, good macro-economic conditions, stable fuel prices and good cost control inside the business all played their part. Absent changes to the environment or competitor behavior, our prospects in the back half of the year look similar. As ever, we continue to build the business with new routes, this summer featuring our first flights from North America to Kaua’i and the island of Hawai’i, and a host of customer improvements including the roll out of our extra comfort economy section of the aircraft. Our wonderful employees continue to deliver the level of service on the ground and in the air that set the standard for others to aspire to. Without their dedication, none of this would be possible.”

Liquidity and Capital Resources

As of June 30, 2014 the Company had:

Unrestricted cash, cash equivalents and short-term investments of $564 million.

Available borrowing capacity of $69.4 million under Hawaiian’s Revolving Credit Facility.

Outstanding debt and capital lease obligations of approximately $1,071 million consisting of the following:

$708 million outstanding under secured loan agreements to finance a portion of the purchase price for eleven Airbus A330-200 aircraft.

$146 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.

$106 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.

$32 million outstanding under floating rate notes for two Boeing 767-300 ER aircraft.
$79 million of outstanding Convertible Senior Notes.

Top Copyright Photo: Jay Selman/AirlinersGallery.com. The new Airbus A330-800neo aircraft will supplement the current Airbus A330-200s and allow the airline to finally retire the older Boeing 767-300 ERs. Airbus A330-243 N383HA (msn 1217) prepares to land in New York (JFK).

Hawaiian: