Airbus Delivered Five A380 to China Southern Airlines

Airbus has delivered the first of five A380s to China Southern Airlines (CZ), the first A380 operator in China.

Powered by Rolls-Royce Trent-900 engines, the aircraft will be initially operated on domestic routes between Beijing, Shanghai and Guangzhou. Later on, the airline will deploy the A380 on international routes.

“We are proud to become the first A380 operator in China,” said CZ chairman Si Xianmin. “The introduction of the A380 in our fleet is a very important step for the development of China Southern. The economics offered by the A380 will undoubtedly improve our competitiveness on international routes and is the perfect asset to make China Southern Airlines achieve its goal of becoming a leading global carrier,” he said.

Emirate Airlines Expected to Grow Capacity up to 12 percent Each Year

Dubai based Emirates Airlines is expected to grow in terms of capacity by up to 12 percent each year to the middle of the decade according to a new report compiled by analysts. The airline is currently the largest in the world when it comes to international traffic, and by 2015 is also expected to have the largest fleet of wide-body planes.

The study of Middle Eastern Megacarriers has been put together by Boston Consulting Group. In just five years, the airline has managed to introduce 32 new destinations to its itinerary, triple revenues and capacity and improve operations in terms of load factors, utilisation of aircraft and yields.

Among the 157 aircraft it has in its fleet is the largest number of Airbus A380s of any carrier and presently Emirates boasts 114 destinations around the world in some 67 countries. Boston Consulting said that other Middle Eastern airlines were likely to put in a similarly strong performance by the middle of the decade with passenger capacity predicted to triple over the coming two decades.

Middle East Partner and Managing Director for the Group, Rend Stephan, explained that the region was important for carriers travelling on long-haul journeys and that the carriers’ based there were able to tap into cost advantages which enabled them to compete aggressively with other international rivals.

According to the International Air Transport Association, Middle Eastern airlines increased capacity by 8.9 per cent in July, which was still not enough to keep up with a growth of 9.7 per cent in demand.

Qantas and British Airways Increase Flight Services on Joint Services Agreement

Australia’s Qantas announced on Tuesday plans of enhancing Joint Services Agreement (JSA) with British Airways. Enhancements will strengthen their Singapore hub and offer better services on flights between London Heathrow and Australia.

Qantas and British Airways are set to develop their long-running Joint Services Agreement (JSA). The two airlines aim to strengthen their Singapore hub and offer better products and services to passengers booking flights between London Heathrow and Australia. The move is seen as a part of the Qantas Group’s plan to create a competitive global airline business.

Qantas will maintain its Airbus A380 operations from Melbourne and Sydney to London via Singapore. The carrier also proposes to construct a new premium lounge at Singapore’s Changi International Airport. On the other hand, UK’s flag carrier, British Airways will upgrade its London to Sydney (via Singapore) operations from a Boeing 777 to Boeing 747.

These developments will consolidate Singapore’s standing as the principal hub in the relationship, reinforcing the two airlines’ competitive position in the Asia-Pacific region. Both airlines are known to be premier carriers. Cheap flight tickets may not be their forte, but the carriers still enjoy popularity among travellers for offering quality on-board services.

Under the updated Joint Services Agreement, Qantas will offer flights on Australia – Bangkok and Australia – Hong Kong routes, while British Airways will provide services on Bangkok – London and Hong Kong – London routes. This move is aimed at maximising the carrier’s respective operational strengths and will come into effect from 2012 beginning. BA also plans to augment the frequency of London – Hong Kong flights from 14 per week to 17 per week.

Australia’s Qantas will discontinue its Bangkok – London and Hong Kong – London routes and BA will terminate Bangkok-Sydney operations in favour of Qantas operating flights on the route. This will ease early retirement of Qantas’ four Boeing 747 aircrafts.

Qantas CEO Alan Joyce remarked that the time was right to restructure the JSA between British and Qantas Airways.

“Strengthening our relationship with British Airways is an important element of our new strategy for Qantas International,” Mr Joyce said in the company’s press release that was posted on the website on Tuesday.

“Singapore will become the focal point of the JSA relationship, with daily Qantas A380 services from Melbourne and Sydney and onward to London, increased British Airways capacity and a new premium lounge.

“The new approach is a smarter use of both airlines’ resources that will enhance our competitive position in Asia and in the Australia – Europe market.

“Regardless of which airline is operating flights between Australia and the United Kingdom, we are focused on delivering a smooth and enjoyable flying experience for passengers. Restructuring the JSA will put us on the front foot in the fiercely competitive Australia – UK air travel market,” Mr Joyce further elaborated.

Qantas Announces New Lounges and Fleet Upgrades

Qantas also announced that it is going to invest almost $400 million in new international lounges, in-flight entertainment and aircraft refurbishment to enhance travellers’ experience.

“Qantas will construct a new First Lounge and Business Lounge in Los Angeles, three times the size of the current space, as well as new First Lounges in Singapore and Hong Kong,” Mr Alan Joyce was quoted in the company’s press release.

Mr Joyce stated that the introduction of the A380 in 2008 brought new levels of customer satisfaction and now the airline aims to make sure that consistent superiority is maintained across the fleet and lounge network.

“In February last year, Qantas announced a $250 million upgrade for nine Boeing 747-400s to meet the changing demands of the airline’s international customers. The first reconfigured B747 will commence services between Brisbane and Los Angeles in October, operating three return services per week,” he said.

The Qantas Group additionally launched a new low-cost airline, Jetstar Japan, in partnership with Japan Airlines and Mitsubishi. The airline is aimed at Japanese market and will serve travellers who seek cheap flight tickets.

Qantas Airways Plans Expand Flight Service to Asia

Qantas Airways Ltd. Chief Executive Officer Alan Joyce switched the airline’s focus to Asia with plans to start two new carriers, betting on the region’s growing prosperity to end losses at international operations.

Australia’s largest airline will form a Japanese budget carrier and an Asia-based full-service unit, while handing some Europe services to British Airways, it said in a statement today. Qantas will also order as many as 110 Airbus SAS A320s, including 78 of the revamped neo version, it said.

The Sydney-based carrier will cut 1,000 jobs and delay the delivery of six Airbus A380 jets under its plan to reverse A$200 million ($209 million) in annual overseas losses. Qantas intends to pare its reliance on the Australia-Europe route after losing market share to Emirates Airline and because of rising demand in Asia.

“The growth is going to come from Asia,” said Nachiket Moghe, an analyst with Morningstar Inc. in Auckland. “The passenger numbers from there continue to grow strongly and airlines need to position themselves for that.”

Qantas fell 0.3 percent to A$1.525 at the 4:10 p.m. market close in Sydney, after earlier gaining as much as 4.9 percent. The stock has fallen 40 percent this year compared with a 10 percent drop in Australia’s benchmark S&P/ASX 200 index.

The airline’s budget unit Jetstar will form a low-cost carrier in Japan with Japan Airlines Co. and Mitsubishi Corp. Jetstar Japan plans to start domestic flights from Tokyo’s Narita and Osaka’s Kansai airports by the end of 2012 with a fleet of Airbus A320 jets. It will operate 24 planes within its “first few years,” Qantas said. Jetstar already has ventures in Singapore and Vietnam.

Singapore, Kuala Lumpur

Qantas hasn’t decided where to base the new Asian carrier, which will have a different brand, Joyce told reporters in Sydney today. Singapore and Kuala Lumpur are potential hubs for the venture, in which Qantas will likely have a large minority stake, he said.

“As a nation we used to fly over or via Asia, on our way to Europe,” Joyce said. “Now, we fly to Asia, both for business and relaxation.”

The Asia-Pacific region will be the most profitable aviation market this year, helped by economic growth in countries like China and India, the International Air Transport Association forecast in June.

On European routes, Qantas will scrap services via Bangkok and Hong Kong. Instead, it will focus on flights via its Singapore hub using A380s. British Airways will take travelers from Bangkok and Hong Kong to London and lease some slots at Heathrow from Qantas.

Qantas will offer voluntary redundancy packages as it cuts jobs, Joyce said. A cabin-crew buyout announced in June attracted about 400 workers.

‘Intend to Fight’

Qantas’ long-haul pilots union and a labor group representing check-in, clerical and information-technology staff criticized the plans for the cuts and the new carriers.

“We intend to fight this,” the Australian Services Union, the largest employee grouping at Qantas, said in an e-mailed statement today. “The ASU believes significant numbers of its members will ultimately be affected by this announcement.”

Transport Minister Anthony Albanese said the job losses were “regrettable.” He said he plans to enforce rules governing Qantas, such as requirements for a majority Australian ownership, a main operation base within the country and a board two-thirds comprised of local citizens.

Restructuring Costs

The restructuring will cost at least A$350 million, Chief Financial Officer Gareth Evans told reporters in Sydney today.

The company’s forecast for pretax earnings between A$500 million and A$550 million in the 12 months ended June is unchanged, it said. Qantas reports audited earnings on Aug. 24.

Qantas will delay six on-order A380s by at least five years, with deliveries only starting in the year beginning June 1, 2018 at the earliest. The airline will have 12 of the double- decker planes by the end of 2011. Two more will be handed over before June 2018. The airline will also upgrade nine Boeing Co. 747-400s by the end of next year.

On Americas routes, Qantas will switch its South American flights to Santiago from Buenos Aires to boost cooperation with Oneworld partner LAN Airlines SA. The Australian carrier also intends to develop its partnership with AMR Corp.’s American in the U.S.

“We cannot fly our own aircraft to every port, but we will get our passengers wherever they want to go,” Joyce said.

Qantas Airline Reported International Flight Numbers up 7 per cent in April

Qantas carried 7 per cent more passengers in April compared with the prior corresponding month. But the airline group, comprising the mainline Qantas operations and low-cost offshoot Jetstar, cautioned that comparisons with the prior year were affected by one-off events.

Qantas’s international operations in April 2010 were affected by flight cancellations from the Icelandic volcano eruptions that closed European airspace.

Qantas international flights carried 509,000 passengers in April 2011, up 7.4 per cent from the prior corresponding period, the figures show.

With Jetstar, Qantas said the figures were affected by the Japanese earthquake and tsunami.

Jetstar’s international operations carried 9.9 per cent more passengers in April 2011 compared with April 2010.

Kingfisher Airlines Expects New Recorded Net Profit as Growing Passenger Traffic and Increase Airfares

Kingfisher Airlines Ltd., India’s second-biggest airline by market share, expects to post its first net profit this financial year thanks to growing passenger traffic and an increase in air fares, the chief financial officer of its parent group said Tuesday.

Kingfisher has been making losses since its inception in 2005 because of an ill-timed aggressive expansion that included ordering Airbus A380s, the world’s biggest commercial jet, and a merger with budget carrier Air Deccan. This came just before the global economic crisis and hurt the company as interest and fuel costs rose while passenger traffic fell.

A turnaround in the industry is now improving the performance of airlines in India as passenger traffic has increased, giving them the opportunity to increase ticket prices.

“We have been able to increasingly pass on higher fuel costs to passengers and that is a positive sign,” Ravi Nedungadi of UB Group said.

His comment came after the airline, controlled by billionaire Vijay Mallya, late Monday narrowed its net loss for the last fiscal year ended March 31 to 10.27 billion rupees ($227 million) from 16.47 billion rupees the previous year.

Kingfisher benefited from lower lease rentals and salary costs in the past year, while higher passenger traffic drove its sales up 23% to 64.96 billion rupees from 52.71 billion rupees.

The company said its net loss would have been bigger by 251.8 million rupees, if not for an accounting standard change through which it amortized costs on aircraft maintenance and engineering.

Kingfisher’s passenger load factors grew to 81% from 72% in the previous year. It carried 12 million passengers, up 9%, while revenue per passenger increased 10% to 4,666 rupees.

Kingfisher paid 9.84 billion rupees as aircraft lease rentals in the past year, a decline of 10% due to some changes in lease contracts that allowed the carrier to push its payments forward until the end of the lease agreement, it said.

The airline’s employee costs declined 2% to 6.76 billion rupees.

“We exchanged some expatriate pilots with Indians, which led to a cut in the wage bill,” Mr. Nedungadi said.

Kingfisher also “marginally” cut the size of its workforce, he said, but didn’t elaborate.

Kingfisher spent 22.74 billion rupees to buy jet fuel in the past year, an increase of 26%. Fuel comprises the bulk of an airline’s expenditure in India.

Emirates Airline Daily Flight Service to Johannesburg with Airbus A380 Superjumbo

Dubai-based airline Emirates will offer a daily service into Johannesburg on the A380 superjumbo from 1 October 2011.

Emirates’ first scheduled A380 service to Africa comes after a surge in the number of South African travellers flying with Emirates – with passenger numbers up 12 percent.

“We have enjoyed a successful partnership with South Africa since launching services in 1995, and now connect our Johannesburg, Cape Town and Durban gateways to our vast global network through 42 non-stop flights each week to Dubai,” said Tim Clark, President Emirates Airline. “The very positive trends we have witnessed over the last 12 months will only be boosted by the arrival of our flagship A380 aircraft, which has set a new benchmark for air travel.”

“Our A380 demonstrates the future of aviation – both in terms of passenger experience and environmental sensitivity,” he added. “By launching the aircraft to Johannesburg, we are further underlining our commitment to serving South Africa and we anticipate very strong demand from leisure and business travelers keen to experience its unique features and unparalleled levels of comfort in the air.”

The 489-seat Emirates A380 offers 14 Private First Class Suites, 76 lie-flat beds in Business Class and 399 seats in Economy Class. First Class passengers have access to two Onboard Shower Spas, while all premium passengers on the upper deck can socialise at 40 000 feet in the Onboard Lounge. Beverages and bar snacks are served once the aircraft reaches cruising altitude – all the way until descent.

The A380 service will operate daily as EK761, departing Dubai at 04h40 and arriving at O R Tambo International Airport at 10h50. The return flight, EK762, departs Johannesburg at 14h10 and arrives in Dubai at 00h10 the following day.

The arrival time of the A380 in Dubai will offer passengers from South Africa convenient connections to an extensive range of destinations within Europe, which following the 1 June launch of Geneva and the Copenhagen launch on 1 August, will stand at 27.

Emirates currently operates a three times daily service to Johannesburg, a double-daily service to Cape Town and a daily service to Durban; while the airline’s fleet of 15 A380s operate on services from Dubai to London Heathrow (double-daily), Manchester, Paris Charles de Gaulle, Toronto, Seoul, Bangkok, Beijing, Shanghai, Jeddah, New York, Hong Kong, Sydney and Auckland.

Emirate Airlines Group Concerned Other International Flight Destination as Increase Passenger Number and Earning

Dubai-based Emirates continues to cause concern for other international airlines as it announces a 14 per cent increase in passenger numbers and a 52 per cent jump in profits. While other carriers are being hammered by rising fuel prices, the Middle Eastern carrier appears to be weathering the storm remarkably well.

Competitors have been accusing Emirates and its neighbouring UAE airlines of effectively being subsidised for some time now and are also worried that fleets of superjumbos based in the Gulf will draw traffic away from their hubs. Emirates currently has an order for 90 additional Airbus A380s with the European manufacturer. Airline experts are warning that once in service this fleet will force a radical restructuring of the industry.

Sheikh Ahmed bin Saeed al-Maktoum, the airline’s chairman, admitted that the carrier’s growth was likely to upset the competition. He added that the market was there and that Emirates would continue to grab its share because it had the right product with which to do so. He went on to say that the airline intended to concentrate on Asia and the Americas.

A number of European and North American airlines have already voiced their concerns about Emirates’ rapid expansion. Germany’s Lufthansa has requested that landing slots are denied to the Dubai giant when a new airport opens in Berlin. Last year, Canada refused to grant permission for greater access to Emirates and Etihad.

Tim Clarke, Emirates’ president, has shrugged of complaints from competitors pointing out that if they used the energy they were putting into attacking his airline into running their own companies, they would probably make some money.

Emirates Airlines Order More Airplane for Increase Flight Place Destination

Emirates Airlines plans to fly to more places and order more planes, ignoring claims of unfair competition from rivals, the airline’s chairman said on Tuesday.

The airline’s aggressive expansion has been criticised by European carriers who say the Dubai-based company and other Gulf carriers are effectively subsidised, provoking fears that Gulf-based superjumbos will draw traffic from their hubs.

Emirates, which is state-owned, will soon fly to “several hundred destinations” from 111 locations now, Emirates’ Chairman Sheikh Ahmed bin Saeed al-Maktoum said after the airline reported a 52-percent jump in 2010 profits.

“I’m sure this will make a lot of people unhappy but the market is there to grow. Airlines in Europe don’t want to see us there because we are giving them competition. But we get good market share because of the product,” he said.

“We have big plans. We will operate more to North and South America and also Asia,” he added.

Sheikh Ahmed indicated that Emirates would announce new aircraft orders at the Dubai Airshow in November.

Dubai has led the charge in a war of words between North American and European carriers and their Gulf rivals over subsidies, export credits and landing rights, blaming their woes on “parasitic” taxes.

“If they spend as much time running their business as they do trying to run us down they might make even more money,” Emirates president Tim Clark said last year.

The UAE failed to gain greater access for Emirates and Abu Dhabi’s Etihad Airways in Canada last year, leading to tension between the two countries.

Meanwhile, German airline Lufthansa (LHAG.DE) has asked that Emirates be denied landing slots at Berlin’s new airport.

Emirates is the largest customer for the Airbus (EAD.PA) A380 superjumbo and has so far ordered 90 of the aircraft. It plans to increase its fleet to eventually include 120 A380s, from the 15 it currently flies.

That could turn the European aviation market upside down.

“If Emirates continue to execute as they have done they will force a restructuring of the industry simply by deploying the 90 or so A380s they have on order or in service,” Sudeep Ghai, a partner at London-based Athena Aviation, said.

“Expect other markets to start making even more protectionist noises than they have been in defence of their local carriers.”

Emirates Airlines Reported Full Year Profit Increase 51.2 percent as Premium Travelers Traffic Growth

The parent of Emirates Airline on Tuesday reported a 51.2% rise in full-year profit as the world’s largest international carrier by traffic saw business from premium travellers return to pre-crisis levels.

The Dubai-based airline shrugged off the impact of turmoil in the Middle East and North Africa as traffic through its hometown hub surged, with double-digit gains in both passenger and cargo volume.

Emirates’ rapid expansion and huge order book–at $66 billion it accounts for 10% of outstanding commercial business at Airbus and Boeing Co. (BA)–makes it a key barometer of the global airline industry.

The airline’s operating margin of 9.9% in its fiscal year to Mar. 31 topped almost every other large international airline, and the record earnings saw a four-fold rise in the bonus paid to staff to an equivalent of 12 weeks pay, pushing labor expenses up 20%

“We are fortunate to be based in the Middle East where regional passenger seats grew by 17.8% compared to a global 8.2% growth,” said Sheik Ahmed Bin Saeed Al Maktoum, chairman of the state-controlled group.

Sheik Ahmed said profit would have been AED1 billion ($272 million) higher had it not been for the increase in oil prices, with fuel expenses last week accounting for a record 43% of operating costs.

Transfer traffic through Dubai accounts for around 60% of the airline’s total business, with passenger numbers up 15% to 31.4 million over the past year, and cargo rising almost 12%.

Emirates and rivals such as Abu Dhabi-based Etihad Airways and Qatar Airways have capitalized on their geographical location to use new long-range aircraft to funnel business through their hubs.

Nigel Page, Emirates head of the Americas, said the airline has leveraged changing trade patterns to capture business, with flows to and from Africa now going through the Gulf rather than via European airports.

The Americas was Emirates’ fastest-growing region last year with revenue up 37.9% while sales in its largest geographical area of operations–east Asia and Australiasia–rose by 30.9%.

Business in the Gulf and the Middle East was still up 14.2% despite regional turmoil which saw flights to Tunisia temporarily halted, while Libyan services remain shuttered. Flights to the Ivory Coast resume on May 12.

Page said the regional problems had actually helped Dubai’s financial recovery after its own debt crisis as companies relocated staff to the emirate.

Emirates Group reported net profits of AED5.46 billion in 2010/11 compared with AED3.62 billion a year earlier, with revenue–which includes its airport and travel arms–up 29 at 53.1 billion.

The airline unit’s passenger seat factor, a key measure of capacity utilisation, rose to a record 80%, from 78.1% in the year before, with profit rising to $1.5 billion from $964 million on a 25% rise in revenue. Capacity rose 15.8%.

Emirates expect delivery of six Airbus A380s and 13 Boeing 777 planes this year, while four new routes will be added: Geneva, Copenhagen, Buenos Aires and Rio de Janeiro. It is the largest operator of both aircraft types.

Last week, Sheik Ahmed said the government-owned airline is in no hurry to sell shares to the public. He said the decision on whether to launch an initial public offering rests with the government, but ruled out any IPO in either 2011 or 2012.