Tag Archives: Airbus A350-941

Iberia to expand Airbus A350-900 routes in 2020

Third Airbus A350-900 for Iberia

Iberia currently operates its six Airbus A350-900s from the Madrid hub to New York (JFK), Chicago (O’Hare), Buenos Aires and Santiago.

The airline is planning to expand A350 operations with the next six deliveries. IB will open new A350 routes to San Jose (Costa Rica) and Los Angeles with the beginning of the summer 2020 schedule. Tokyo (Narita) will follow in time for the 2020 Olympics.

On June 23, 2019, Iberia’s A350-900 landed for the first time at Chicago. This is the third city, after New York and Buenos Aires.

Top Copyright Photo (all others by the airline): Iberia Airbus A350-941 EC-NBE (msn 271) MAD (Javier Rodriguez). Image: 945745.

Iberia aircraft slide show:

SAS to open a nonstop route to Tokyo Haneda with the new Airbus A350-900

SAS' first Airbus A350-900, in new livery

Scandinavian Airlines System (SAS) has announced a nonstop route to Tokyo Haneda International Airport from Copenhagen Kastrup. The route gives travelers better access to downtown Tokyo and with All Nippon Airways (ANA), a fellow Star Alliance member, the route will increase connectivity to 30 domestic destinations in Japan.

Shinjuku skyline at sunset taken from Shibuya, Tokio.

The direct Copenhagen-Haneda route will be served by SAS’ new Airbus A350-900 aircraft. As the most environmental-friendly airplane on the market, the A350 will reduce emissions by 30 percent compared to earlier generations of similar long-haul aircraft.

In connection with the route between Copenhagen and Haneda, SAS will discontinue the service between Copenhagen and Tokyo Narita Airport. More capacity between Japan and Scandinavia will be added in spring 2020 when All Nippon Airways opens a new route between Haneda and Stockholm.

Top Copyright Photo: Scandinavian Airlines-SAS Airbus A350-941 F-WZHJ (SE-RSA) (msn 358) TLS (Eurospot). Image: 948184.

SAS aircraft slide show:

Video:

SAS reports an “unsatisfactory full year result”

SAS' first Airbus A350-900, in new livery

Scandinavian Airlines-SAS issued this financial report:

AUGUST 2019–OCTOBER 2019

  • Revenue: MSEK 13,463 (12,678)
  • Income before tax (EBT): MSEK 1,096 (789)
  • Income before tax and items affecting comparability: MSEK 1,226 (822)
  • Net income for the period: MSEK 861 (623)
  • Earnings per common share SEK 2.19 (1.56)

SIGNIFICANT EVENTS DURING THE QUARTER

  • SAS issued a new hybrid bond amounting to SEK 1.5 billion
  • New organizational structure implemented

OUTLOOK

  • SAS expects to deliver an EBIT margin before items affecting comparability of 3-5% for the fiscal year 2020

NOVEMBER 2018–OCTOBER 2019

  • Revenue: MSEK 46,736 (44,718)
  • Income before tax (EBT): MSEK 794 (2,050)
  • Income before tax and items affecting comparability: MSEK 786 (2,136)
  • Net income for the period: MSEK 621 (1,595)
  • Earnings per common share: SEK 1.54 (3.71)
  • Income before tax negatively impacted by strike MSEK -615
  • CO2 emissions reduced by 2.5%

COMMENTS BY THE CEO

SAS had an unsatisfactory full year result, significantly lower than last year, due to headwinds from higher jet-fuel costs, unfavorable currency movements and a strike. Despite these challenges, SAS’ attractive customer offering and operational efficiency improvements together with reduced market capacity, especially in the fourth quarter, led to a positive result for the full-year 2019.

During the fourth quarter, we noted strong momentum in the demand for our products and services. The total number of passengers grew 2.3%. In addition, sales of charter capacity and attached revenues also increased. Altogether, total revenues increased over 6% to MSEK 13,463.

Earnings before tax and items affecting comparability also developed favorably in the quarter and ended at MSEK 1,226, up MSEK 404 year-on-year. The improved earnings were mainly driven by increased revenues which were partially offset by higher operational expenditures from negative currency developments. Our ongoing work to improve operational robustness resulted in improved regularity and punctuality, as well as a significantly lower cost of claims.

During the quarter, we also strengthened our equity position by issuing a SEK 1.5 billion hybrid bond. The main objective of the issuance was to increase equity ahead of the new IFRS 16 accounting standard, which came into effect on 1 November 2019.

The full fiscal year 2019 was characterized by significant headwinds for SAS, including higher jet-fuel costs, unfavorable FX-rates and a seven-day strike. However, strong demand shown in passenger and attached revenues led to a total revenue increase of SEK 2 billion. The improved unit revenue and passenger yield show that our attractive value proposition for Scandinavian travelers generates strong revenues. Despite the increase, full-year earnings regrettably declined MSEK 1,350 due to the negative headwinds stated above.

FURTHER ENHANCEMENTS TO OUR CUSTOMER OFFERING

During the quarter we unveiled SAS’ new livery. This is part of our ongoing transformation to the most modern fleet in the market. The single-type fleet will, besides the financial advantages of streamlined maintenance and lower fuel consumption, also reduce our emissions significantly – a topic important for SAS, our customers and society at large.

Furthermore, we are pleased that the Norwegian Armed Forces selected SAS as their carrier of choice for the next four years. The contract strengthens our market position and presence in the important Norwegian domestic market. The Swedish Paralympic Committee also chose SAS as their partner ahead of the Paralympic Games in Tokyo 2020. The agreement with Sweden’s Paralympic Committee means that SAS is now the Olympic and Paralympic partner for all of Scandinavia’s athletes in Tokyo.

Looking ahead to next year, we are continuing to adapt our network to make life easier for our customers. For the coming summer program, we are launching 14 new direct routes and 5 totally new destinations from Scandinavia, including Bari (Italy), Rhodes (Greece), Tivat (Montenegro), Zadar (Croatia) and Valencia (Spain).

CONTINUED EFFORTS TO REDUCE CLIMATE IMPACT

Besides the fleet renewal, which is our most important initiative to reduce carbon emissions, we also made progress on several activities supporting our journey toward more sustainable air travel and a reduced climate impact.

We continued our efforts to increase the supply and usage of Sustainable Aviation Fuel (i.e. biofuel) and made it easier for travelers to voluntarily buy biofuel, in addition to the amount SAS is already using. On 31 October, we were happy to announce that the Swedish cross-country team decided to invest in biofuel to reduce its emissions. The team will buy biofuel from SAS at an amount equivalent to their fuel consumption on flights between Stockholm and Östersund.

SAS’ COO, Simon Pauck Hansen, was recently appointed Chairman of the Aviation Group in the Climate Partnership initiated by the Danish Government. The partnership is one out of 13, where all industrial segments in Denmark are engaged to fulfill the ambitious climate goals set by the Danish government. SAS looks forward to playing a vital role in the partnership and demonstrate leadership toward a more sustainable aviation future.

For the CO2 emissions that we cannot eliminate with today’s technology, we continue to carbon offset through Natural Capital Partners, which invests in global emission reduction projects, such as wind power in India. At the end of the quarter, we had compensated for over 3.9 million journeys with SAS, representing 40% of the total passenger-related CO2 emissions in the fourth quarter.

IMPROVED OPERATIONAL EFFICIENCY

Our efforts to improve operational quality continue. During the quarter, regularity increased 0.6 percentage points to 98.9% and punctuality increased 1.7 percentage points to 82.5%. In addition to supporting an improved customer experience, the improvements also resulted in lower claim costs.

We delivered on our efficiency target of SEK 0.9 billion set out for the year. The remaining SEK 0.6 billion of the total SEK 3 billion will be delivered in the next fiscal year, according to plan.

In the quarter, we implemented a new organizational structure to enhance accountability and to accelerate the next phase of transformation.

LOOKING AHEAD

SAS did not meet two of its’ three financial targets for the fiscal year 2019, despite a strong fourth quarter. Financial preparedness remains strong, but the return on invested capital came in at a disappointing 8% and our adjusted net debt to EBITDAR increased to 3.7x.

This outcome is not satisfactory and reinforces the need for additional efforts to improve our operational efficiency and competitiveness. We remain committed to our strategy which has resulted in substantial improvements since 2012. Under this framework we have started additional initiatives to further improve efficiency, flexibility and competitiveness in the coming years.

Some of these initiatives will yield results already in 2020, while others lay the foundation for increased efficiency in the years to come. As a part of our digitalization and Lean efforts, we have set aside MSEK 120 in restructuring costs to accelerate the automation of administrative tasks to reduce overhead costs.

Our investment in a single-type fleet in SAS Scandinavia will bring significant benefits to our operations, but due to the required training, productivity will be negatively impacted in the forthcoming years. However, we will see some of the benefits materialize in 2021 with reduced stand-by levels and maintenance costs, as Arlanda becomes our second all-Airbus base after Copenhagen.

We will also benefit from our initiative to improve asset and crew utilization. Here we aim to have a new system and planning processes fully up and running by 2022. Already in 2020, this will help us to further improve our strong operational robustness and drive further efficiencies, that will contribute with MSEK 75 in cost reductions as early as next year.

As a final point, we need to further enhance our operating model to increase productivity and flexibility. Approximately 20% of the destinations in SAS network are optimal to serve with an aircraft sized between an A320neo (180-seat) and a CRJ (90-seat). Our older 120-150 seat aircraft serving this segment today need to be replaced in the next few years and currently there is no order in place to bridge the gap.

Rightsizing of the fleet is crucial from a profitability perspective, but it is also an important part of our journey towards a more sustainable future.

However, to place such an order we need to certify that the benefits of single-fleet operations on all platforms remain intact, and that the available aircraft types perform to the standard for which we are known. We also need to secure competitive duty agreements appropriate for mid-size operation.

In summary, all additional initiatives come with a substantial long-term potential and the additional gross efficiency improvements are estimated at SEK 1.5-2.0 billion by FY23 and beyond. In 2020, we expect these initiatives to contribute to the full-year target of SEK 0.6 billion in efficiency improvements.

OUTLOOK

The uncertain economic outlook and emerging slowdown in key economies will negatively impact customer demand. The continued weakness of the Swedish and Norwegian krona against the US dollar and the Euro also remains a challenge. For the forthcoming year, we therefore foresee significantly lower growth, both from a demand and a supply perspective.

Given these market conditions together with higher costs for new aircraft, increased training volumes as well as the implementation of IFRS 16, we expect to deliver an EBIT margin of 3-5% for fiscal year 2020. For the same reasons we expect an increased loss for the first quarter of fiscal year 2020 compared to last year.

I would also like to take the opportunity to thank all SAS ­employees and partners for their efforts during the year. Similarly, I want to thank our customers and look forward to welcoming you aboard one of our 800 daily flights in 2020!

Top Copyright Photo: Scandinavian Airlines-SAS Airbus A350-941 F-WZHJ (SE-RSA) (msn 358) TLS (Eurospot). Image: 948184.

SAS aircraft slide show:

Hong Kong Airlines responds to reports of financial distress

Hong Kong Airlines Airbus A350-941 B-LGB (msn 153) LAX (Michael B. Ing). Image: 948427.

Hong Kong Airlines made this announcement:

Hong Kong Airlines acknowledged the new requirements set out by the Air Transport Licensing Authority (ATLA) today. Our operation is still running normally and we remain committed to flying our passengers to their destinations safely.

Hong Kong Airlines updates ATLA and the Transport and Housing Bureau (THB) regularly on our operation and financial improvement plan. We have addressed our financial situation by implementing cost-savings measures, while adjusting our operation from time to time to respond to changing market demand.

As weak travel demand resulting from the social unrest in Hong Kong has continued to affect our business and revenue, Hong Kong Airlines has reduced its capacity and flights in the coming months as well as further consolidated its network under the challenging business environment.

Hong Kong Airlines is actively communicating with our shareholders and other stakeholders to meet the new requirements from ATLA as requested. We will remain professional and deliver our best customer service to all passengers.

Hong Kong Airlines just turned 13.

Top Copyright Photo: Hong Kong Airlines Airbus A350-941 B-LGB (msn 153) LAX (Michael B. Ing). Image: 948427.

Hong Kong Airlines aircraft slide show:

Route Map:

x

SAS takes delivery of its first Airbus A350-900

Scandinavian Airlines-SAS Airbus A350-941 F-WZHJ (SE-RSA) (msn 358) TLS (Eurospot). Image: 948367.

Scandinavian Airlines-SAS has taken delivery of its first Airbus A350-900, becoming the newest operator of this latest generation, highly efficient wide body aircraft.

The airline has a total of eight A350-900 aircraft on order and operates an Airbus fleet of 68 aircraft (51 A320 Family, 17 A330 and A340 Family aircraft).

In the coming years, as part of an extensive fleet modernization, SAS will take delivery of 54 additional A320neo Family aircraft and the remaining seven A350-900s through direct purchase and lease contracts.

SAS’s A350-900 features a modern and highly comfortable three-class cabin layout with 300 seats: 40 “SAS Business” class, 32 “SAS Plus” class and 228 “SAS Go” class seats. On 28 January 2020, the airline will start to operate the new aircraft on its Copenhagen-Chicago long-haul route, followed by other international destinations including North America and Asia.

At the end of October 2019, the A350 XWB Family had received 913 firm orders from 50 customers worldwide, making it one of the most successful widebody aircraft ever.

Top Copyright Photo: Scandinavian Airlines-SAS Airbus A350-941 F-WZHJ (SE-RSA) (msn 358) TLS (Eurospot). Image: 948367.

SAS aircraft slide show:

Fiji Airways takes delivery of its first of two Airbus A350-900s

Fiji Airways has become the first airline from the South Pacific region to take delivery of the A350-900 XWB, the world’s most modern all-new wide-body aircraft.

The A350-900, which was delivered following a ceremony in Toulouse, is the first of two A350-900 XWBs that will join Fiji Airways’ fleet. Both aircraft are being leased from Dubai-based DAE Capital. The aircraft are the first to be directly purchased by DAE Capital from Airbus.

Delivering new levels of fuel efficiency, Fiji Airways will operate the A350 XWB on its Nadi-Los Angeles and Nadi-Sydney routes.

Configured in a two-class layout with 334 seats including 33 full flat business and 301 economy class seats, 39 of which are designated as BULA SPACE seats with extra legroom, passengers will enjoy new levels of space and comfort as well as Thales in-flight high-definition entertainment systems.

Fiji Airways currently operates a fleet of six A330 Family and will benefit from the common type rating with the A350 XWB which allows pilots and crews to operate on both aircraft types.

At the end of October 2019, the A350 XWB Family had received 913 firm orders from 50 customers worldwide, making it one of the most successful wide-body aircraft ever.

Fiji's first Airbus A350-900

Above Copyright Photo: Fiji Airways (2nd) Airbus A350-941 F-WZFR (DQ-FAI) (msn 299) TLS (Eurospot). Image: 948049.

Fiji Airways aircraft slide show:

Video:

Singapore Airlines reports higher first half net profit of $206 million

  •   Net profit for the second quarter rose 68 per cent to $94 million
  •   Strong passenger traffic growth continues to support operating performance
  •   Cargo demand remains weak amid trade uncertainties
  •   Vistara accelerates expansion and commences international operations 

    GROUP FINANCIAL PERFORMANCE First Half 2019/20

    The SIA Group achieved a net profit of $206 million in the first half of the financial year, $10 million (+5.1%) higher than last year.

    Revenue rose $418 million (+5.3%), primarily from strong growth in passenger flown revenue, partially offset by a reduction in cargo flown revenue, while higher expenditure (+$431 million or 5.8%) reflected enlarged operations. Accordingly, operating profit for the Group was $413 million, down $13 million or 3.1% compared to the same period last year.

    The Group recorded a reduction in share of losses from associated companies (+$36 million), mostly from Virgin Australia, and a higher share of profits from joint venture companies (+$19 million). These were offset by increased net finance charges (-$54 million) due to the recognition of interest expense arising from lease liabilities following the adoption of IFRS 16 Leases and additional financing for fleet renewal and expansion.

 

SilkAir continues to be adversely affected by the global grounding of the Boeing 737 MAX 8 aircraft, clocking an operating deficit of $19 million for the period.

Notwithstanding a reduction in capacity (-1.1%) from route transfers to Scoot and the withdrawal of the 737 MAX 8s from service, the carrier achieved passenger flown revenue growth of $4 million (+0.9%). Passenger load factor rose on the back of a 2.8% increase in traffic, driving a 1.2% improvement in RASK. However, this was negated by lower non-scheduled services revenue and incidental revenue, leading to a $6 million decline in operating revenue. Expenditure was up $10 million, partially attributable to 737 MAX 8 related costs, along with higher net fuel cost.

Total revenue for Scoot improved $7 million, driven by passenger flown revenue growth of $29 million as capacity expansion (+5.6%) was matched by higher passenger traffic (+5.8%). However, passenger revenue improvements were tempered by weaker RASK (-2.1%) on lower yields, declines in cargo revenue (-$4 million or 13.0%) and other operating revenue (-$18 million). Expenditure rose $74 million (+8.5%), mainly a result of higher depreciation from a larger fleet. In addition, Scoot continued to proactively reduce aircraft utilisation during the period to improve operational resilience. As a result, the carrier recorded an operating loss of $77 million, a deterioration of $67 million year-on-year.

Second Quarter 2019/20

Group net profit for the second quarter rose $38 million (+67.9%) to $94 million, mainly attributable to improvement in share of results from associates and joint ventures (+$78 million), partially offset by higher net finance charges (-$28 million) for the quarter.

Operating profit for the second quarter contracted $20 million (-8.6%) to $213 million, as expenditure increased $180 million (+4.7%), mainly from capacity injection, outweighing revenue growth of $160 million (+3.9%). Passenger revenue grew $244 million (+7.5%), while cargo revenue declined $93 million (-16.3%). Ex-fuel cost rose $160 million (+6.0%), following a 6.2% increase in capacity, while net fuel costs were $20 million (+1.7%) higher.

ROUTE DEVELOPMENT

 

During the quarter, the Parent Airline Company began operations of its inaugural Seattle services on 3 September 2019, its fourth non-stop service to the US, following the successful launch of Newark flights a year ago. In addition, Busan services launched by SilkAir in May, were taken over by SIA from 28 October 2019, boosting seat capacity to cater to growing demand. Seasonal services to Sapporo will also be operated from 30 November 2019 to 6 January 2020. As at 30 September 2019, SIA served 65 destinations, including Singapore.

SilkAir continues to see network changes as part of the planned merger with SIA, completing the transfer of Chiang Mai, Coimbatore and Visakhapatnam operations to Scoot in October. It is also on track to transfer Kota Kinabalu in December 2019, subject to regulatory approvals. Conversely, SilkAir took over Kochi services from Scoot from 27 October 2019, adding four more services to its existing 10 non-stop flights a week. As at 30 September 2019, SilkAir served 43 destinations, including Singapore.

Following the commencement of Fuzhou and Kota Bharu services in July 2019, Scoot added two new destinations in India, Coimbatore and Visakhapatnam, to its network from 27 October 2019. Scoot also suspended services to Quanzhou and Male, along with adjusting Harbin flight frequency to a Northern Winter (October to March) only seasonal service, to better match demand and capacity. Seasonal frequency additions will also be made for Melbourne, Perth, Phuket and Sydney during the Northern Winter peak period. Scoot ended the quarter with 67 destinations, including Singapore.

Overall, the portfolio of airlines in the Group served 137 passenger destinations in 37 countries and territories, including Singapore, as at 30 September 2019.

Following the launch of Vistara’s first international route, to Singapore in August 2019, SIA and SilkAir signed an agreement with Vistara to expand codesharing to international destinations, subject to regulatory approvals. Vistara increased its fleet from 22 to 32 aircraft during the first half of the financial year, and commenced international operations to Singapore, Dubai and Bangkok. Vistara is set to continue rapid fleet growth in the second half as it takes delivery of new A320neo and A321neo aircraft, and inducts its first two widebody aircraft (787-9). As a result, it will almost double its fleet size during the financial year. This will allow Vistara to quickly increase its domestic and international networks and, importantly, to commence medium to long haul international operations in 2020.

OUTLOOK

Passenger bookings in the coming months are expected to be stronger year-on-year, with yields supported by premium cabin traffic. However, headwinds persist in the form of intensifying competition in key operating markets, as well as an uncertain global economic outlook. Cargo demand is likely to remain weaker year-on- year, despite the seasonal peak, amid ongoing trade tensions and a manufacturing slowdown in key export economies.

Fuel prices are expected to remain volatile, as a result of geopolitical and economic risks. For the second half of the financial year, the Group has hedged 75% of its fuel requirements in MOPS and 3% in Brent at weighted average prices of USD76 and USD54 per barrel respectively [Note 2]. The Group will continue to enter into longer-dated hedges extending to FY2024/25.

As it enters the final lap of its three-year Transformation programme, the SIA Group remains committed to enhancing customer experience, improving operational efficiency and boosting revenue by strengthening digital capabilities. The recent expansion of the KrisConnect programme is one significant milestone. Utilising technology enablers such as NDC (New Distribution Capability), and APIs (Application Program Interface), KrisConnect facilitates integration and exchange of content between the Group and its partners, enabling customers to access personalised offerings across more distribution channels in addition to traditional owned channels.

KrisShop, the airline’s flagship travel retailer, has been restructured to become a premium omni-channel e-commerce retailer. It will continue to expand its range of products and services through its themed concept stores and official brand stores on the new website. Optimised by advanced technological and logistics capabilities, KrisShop has introduced multiple consumer-centric initiatives for convenient payment, pre-order and delivery services. Additionally, the new SIA mobile app, designed for faster performance and improved usability to give customers a seamless and more personalised experience, was launched in August 2019. These initiatives are testament to the Group’s aggressive digital transformation efforts.

Delivered on April 1, 2017

Above Copyright Photo: Singapore Airlines Airbus A350-941 9V-SML (msn 096) AMS (Antony J. Best). Image: 938574.

Singapore Airlines aircraft slide show: