Low-cost Carriers Airlines Take Flight in Asia
New low-cost carriers, with ties to the majors, are offering heavily discounted long-distance routes
The expansion of discount carriers like Southwest Airlines and Europe’s Ryanair has redefined air travel. Yet one area where the low-fare model hasn’t clicked is in long-haul international flying. From Sir Freddie Laker’s pioneering Skytrain of the 1970s to London-based Zoom Airlines, which folded in 2008, carriers that offered long-distance service on the cheap have failed. Despite that sobering record, both Qantas Airways and AirAsia are challenging long-haul companies like Singapore Airlines with a low-fare model.
There’s a key difference in these latest discount assaults: support from large, existing airlines. Qantas’ Jetstar Airways unit, which already offers cheap flights within Australia, will add budget long-haul flights from Singapore later this year. Jetstar intends to begin Singapore-Melbourne flights in December, followed by services to Auckland in March. Later it plans to add flights to other European and Asian destinations.
AirAsia X, 16 percent-owned by Air-Asia, the continent’s largest budget carrier, already flies from its Kuala Lumpur hub to London and Australia and plans new service to Japan and South Korea. Its partnership with Air- Asia lets it tap connecting traffic to about 70 cities from Kuala Lumpur. And Jetstar shares some flights with Qantas and has a partnership with Air France-KLM Group, Europe’s largest carrier. Such deals may help the upstarts avoid the fate of stand-alones like Zoom and Oasis Hong Kong Airlines, which also folded in 2008.
“Long-haul, low cost is transforming the whole aviation landscape in Asia,” says K. Ajith, an analyst at UOB Kay Hian Research in Singapore. “If [budget airlines] have a strong network and are viable, they can potentially lure passengers from established carriers.”
AirAsia X charges from about 1,286 ringgit ($402) for a flight from Kuala Lumpur to Stansted Airport, 40 miles outside of central London. An economy ticket from Kuala Lumpur to Heathrow Airport on Malaysia Airlines, the nation’s largest carrier, starts at about 2,104 ringgit ($657).
AirAsia X cuts costs by using fewer flight attendants, since it only loads and serves hot meals that customers have preordered. That saves the carrier up to $100 per passenger, says Chief Executive Officer Azran Osman Rani. Jetstar formed a venture with Air- Asia in January, lowering costs for spare parts and ground-handling services.
Continental Airlines To Launch Houston-Edmonton Flights
Flights between the US and Canada have been boosted with the addition of Continental Airlines’ latest offering.
The US carrier has launched new services between Houston in Texas and Edmonton in the Canadian province of Alberta.
Starting 1 November, the new flights will depart Houston at 18:00 and land in Edmonton at 21:25.
On the return journey, services will take off from the Canadian city at 06:40 and arrive in Texas at 11:56. All times are local.
Commenting on the new route, Jim Compton, executive vice-president of marketing at Continental, said: ‘We are pleased to add Edmonton to our portfolio of Canadian destinations.
‘The flight allows connections to Continental’s vast network across the Southern United States, Mexico and Latin America.’
Continental recently announced that it is joining the Star Alliance network of airlines in October.
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Air Canada Union Begins Negotiations With Call For Airline To Change
Air Canada’s largest union began two days of scheduled contract negotiations Monday with a call for the airline to change the way it operates in order to secure a contract agreement.
The International Association of Machinist and Aerospace Workers said its 10,000 members who work at the country’s largest airline feel ignored.
“Right now, unfortunately, there’s no trust between employees and management and that’s something that takes a long time to rebuild,” said Chuck Atkinson, president of District 140.
The airline’s request for a 21-month moratorium on unfunded pension liability payments and for labour peace are among the top items for discussion.
The talks in Montreal follow a preliminary meeting last Friday in Vancouver, where three union bargaining committees had gathered.
Air Canada has already started negotiations with the Canadian Auto Workers, whose contract with 4,500 sales and service agents expired on Sunday.
The contracts for pilots, machinists and flight attendants expire June 30.
The machinists represent Air Canada workers, including maintenance mechanics, cargo agents, baggage handlers, and cleaners.
Air Canada’s new CEO, Calin Rovinescu, has called the airline’s $2.9-billion unfunded pension obligations its top issue.
He also says labour peace if required to seek additional funding.
On the Toronto Stock Exchange, Air Canada’s shares gained five cents, or 3.68 per cent, at $1.141 in Monday trading. Over the last year, the shares have traded between 73 cents and $9.35.
American Airlines to Challenge Proposed Penalty by FAA
Federal officials have hit American Airlines with a record penalty of $24.2 million over maintenance lapses that caused thousands of canceled flights in 2008.
The Federal Aviation Administration said Thursday that American failed to take steps to prevent chafing of electrical wires in the wheel wells of its McDonnell Douglas MD-80-series jets.
The FAA says the wiring could have led to fires and fuel-tank explosions.
American vowed to challenge the proposed penalty. Airlines routinely challenge FAA penalties or negotiate to reduce them.
“These events happened more than two years ago, and we believe this action is unwarranted,” said American spokesman Tim Smith. “We are confident we have a strong case and the facts will bear this out.”
American officials have said the dispute is over a minor matter of leaving too much space between clips that held bundles of wire together. Smith said passenger safety was never threatened.
A large safety penalty would add to American’s financial and image problems. Parent AMR Corp. was the only major U.S. airline company to lose money in the second quarter, and it has lost more than $4 billion since the start of 2008 as it struggled against high fuel costs and a slump in travel.
American is also beset by labor issues, with unions representing mechanics and flight attendants talking about going on strike, and pilots openly criticizing the company.
The new penalty stems from early 2008, when FAA inspectors said they spotted problems with the wiring on two MD-80 planes. The FAA says American failed to correctly fix the problem, and inspectors found improper work on most of the planes they checked during follow-up visits to American maintenance facilities.
The airline ended up grounding its entire fleet of about 300 MD-80s and canceling thousands of flights in April 2008 while mechanics worked on the planes.
The FAA said Thursday that American operated 14,278 passenger flights on 286 planes that didn’t meet the wiring standards.
“We expect operators to perform inspections and conduct regular and required maintenance in order to prevent safety issues,” said Transportation Secretary Ray LaHood, whose department includes the FAA. “There can be no compromises when it comes to safety.”
American has since been retiring some of the gas-guzzling MD-80 planes and replacing them with more fuel-efficient ones. The FAA said safety officials had made progress working with American to improve the airline’s “maintenance culture.”
If upheld, the penalty against American would top the previous record of $9.5 million that the FAA levied against Eastern Airlines in 1987 for delaying required maintenance work. Eastern went out of business after paying only about $1 million.
As the FAA was focusing on American in 2008, it also proposed a $10.2 million penalty against Southwest Airlines Co. for operating about 1,400 flights before inspecting the planes for cracks. Southwest negotiated that down to $7.5 million.
The actions against American and Southwest came after whistle-blowers in the FAA and members of Congress criticized the agency for being too cozy with the airlines.
New Arrivals Terminal at Doha International Airport Close to Completion
Doha International Airport (DIA) is preparing to open its brand new Doha Arrivals terminal as the country’s only international airport expands to receive an increasing number of visitors to the State of Qatar.
The new Doha Arrivals terminal is a separate stand-alone facility to DIA’s current Main terminal and will handle all airport passengers arriving into the country.
Residents in Qatar will be familiar with the location of the Doha Arrivals terminal as the site of the temporary terminal erected for the Doha Asian Games in 2006, across the road from Qatar Airways’ Premium Sales office. The new facility is situated on C-Ring Road between VIP roundabout and Ras Aboud flyover and is designed to greatly enhance the arrival experience for people entering Qatar.
The Doha Arrivals terminal forms part of a multi-million dollar DIA re-development plan that will enable the airport to continue its efficient operation as it prepares for the opening of the New Doha International Airport, scheduled for 2012.
Features of the new Doha Arrivals terminal include an increased number of baggage belts, more immigration counters, Duty Free retail shopping, bus and taxi stands, and an enlarged meet and greet waiting area for those receiving passengers at the airport.
Frequent shuttle buses will provide passengers who have parked their vehicles at the Main Terminal – which will be renamed the Departure and Transfer terminal – with transport from the Doha Arrivals terminal on their return.
Soon after the new Doha Arrivals terminal becomes operational, work will begin on reconfiguring the existing arrivals terminal into an expanded Departure and Transfer terminal which will accommodate increasing passenger flows. The additional work will take several months to complete.
Doha International Airport is managed and operated by Qatar Airways, the national airline of the State of Qatar.
Qatar Airways Group Chief Executive Officer Akbar Al Baker said the changes were aimed at enhancing customer experience ahead of the opening of the New Doha International Airport.
“Over the next few days, Doha International Airport and Qatar Airways will be providing more information on the new facilities to ensure passengers are fully aware of the significant changes taking place,” said Al Baker.
“It was imperative for the continued development of Qatar that the existing airport infrastructure was expanded. The new Doha Arrivals terminal is the latest step in the infrastructure improvements to handle the influx of passengers through the airport.
“We are eagerly awaiting the opening of the New Doha International Airport in 2012, which will provide an even better facility for the people of Qatar and for international travellers flying on Qatar Airways and other airlines.”
Qatar’s only international airport has received several upgrades since November 2006 when Qatar Airways’ exclusive Premium Terminal for First and Business Class passengers opened, and has subsequently seen the expansion of the airport’s Eastern Apron, including increased aircraft parking space, a dual carriageway perimeter road to the Main terminal, and the establishment of a new Satellite Transfer terminal.
In 2008, the main airport terminal was also upgraded with extra boarding gates added to accommodate the increased number of flights departing from Doha. Last year, the Premium Terminal was extended to provide additional space for the growth of the number of First and Business Class passengers flying with Qatar Airways.
