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.

Global Aviation Industry Future : Airline Industry Expects Economic Recovery

The global airline industry is making a robust economic recovery and will need $3.6 trillion in new aircraft over the next 20 years, Boeing Co. said Thursday, July 15 in its annual long-range forecast.

In all, airlines will need 30,900 new jets between now and 2029, with more than two-thirds of the demand for smaller single-aisle jets such as Boeing’s 737 and Airbus’ A320, Boeing said in its 2010 Current Market Outlook.

Airlines have seen a rebound in passenger and freight traffic this year and should return to profitability in 2011, company officials say.

“For passenger traffic in 2010 we’re expecting to see a 5 to 6 percent improvement over where we were last year; in terms of cargo, somewhere around 14 percent or more,” Randy Tinseth, Boeing Commercial Airplanes vice president for marketing, said in a recent briefing in advance of Farnborough International Air show in Britain.

Airlines have been able to manage their way through the economic downturn fairly well by keeping costs down, Tinseth said. “We’re starting to see more airlines returning to profitability – returning to profitability really before we expected it,” he added Boeing’s 20-year forecast is slightly brighter than last year’s, when it predicted demand for 29,000 aircraft worth $3.2 trillion for 2009-2028. This year’s report says 21,160 single-aisle jets worth $1.7 trillion will be needed, along with 7,100 twin-aisle planes such as the 777, 787 and Airbus’ A330-340 family, worth $1.6 trillion.

The world will need 720 large aircraft such as Boeing’s 747 and Airbus’ superjumbo A380, worth $220 billion, and just 1,1920 regional jets – those under 90 seats – worth $60 billion.

The report, now in its 46th year of public release, is widely regarded as the most comprehensive and respected analysis of the commercial aviation market, and reflects the improving, yet still unstable conditions facing the industry.

It noted that commercial aviation has weathered many downturns in the past. Yet recovery has followed quickly as the industry reliably returned to its long-term growth rate of approximately 5 percent per year. Boeing expects the same resilience in the first half of 2010 as the industry rebounds from the recent severe downturn. Passenger traffic is projected to rise 6 percent for the year, with similar annual growth rates for 2011 through 2014.

Responding to improving demand, global airline financial performance is forecast to improve to the break-even point in 2010, following a $10 billion net loss in 2009. Asia-Pacific airlines, reflecting the region’s strong economic growth, are forecast to lead the world in profits during 2010, followed closely by North American airlines, which are exercising capacity discipline. Emerging markets are expected to be profitable, led by Latin American airlines. Europe is the only region forecast to lose money in 2010, owing to the lagging economic outlook and airspace disruptions from volcanic ash.

Worldwide economic activity, reflected in the global gross domestic product (GDP), is the most powerful driver of growth in commercial air services and the resultant demand for airplanes. The global GDP is projected to grow at an average of 3.2 percent per year for the next 20 years. Reflecting the economic growth, worldwide passenger traffic will average 5.3 percent growth and cargo traffic will average 5.9 percent growth over the forecast period. To meet the demand for commercial aviation services, the number of airplanes in the worldwide fleet will grow at an annual rate of 3.2 percent.

Air transport throughout the world continues to change in response to market opportunities and challenges. New airline business models and the dynamic growth of air travel in the emerging economies throughout the world are diversifying the demand for airplanes. As global air travel declined in 2009, there were still many markets and business models that experienced growth. Over the next 20 years, 77 percent of demand for new airplanes will come from outside North America, with about 34 percent of deliveries going to the Asia Pacific region.

The Boeing forecast continues to predict that the greatest demand for new aircraft, by market value, will come from the United States, followed by China. Remarkably, the United Arab Emirates-with a population of less than 5 million, yet home to several highly competitive airlines-will be the third largest market by value.

The need to replace older, less efficient airplanes accounts for 44 percent of the projected market for new airplanes. The 2010 forecast anticipates 13,490 airplanes will be replaced over the next 20 years. This reflects rising fuel prices and the increasing economic burden of using older, less capable, and less efficient airplanes. At this replacement rate, 84 percent of the fleet operating in 2029 will have been delivered after 2010.

Today, there are 11,580 single-aisle aircraft in operation around the world, representing 61 percent of the total jet fleet. The single-aisle fleet is forecast to more than double, reaching 25,000 airplanes or 69 percent of the total fleet by 2029, largely reflecting the rapid expansion of air services in Asia, the rise of intraregional air travel in emerging economies, and the growth and geographic expansion of the low-cost-carrier model.

Among the 30,900 aircraft to be delivered over the next 20 years, 21,160 (69 percent of the units and 47 percent of the value) will be single-aisle airplanes. Demand for single aisles comes not only from growth markets, but also for replacing older aircraft such as the 737 Classics, A320s, and McDonnell Douglas MD-80/90s. It is forecast that there will be a wave of single-aisle aircraft retirements in the 2015 to 2017 timeframe as many of these older aircraft reach 25 years of age – a typical retirement age for jet aircraft.

The fastest growing market will be for twin-aisle airplanes. This segment is expected to grow at an average annual rate of 4.4 percent. The twin-aisle fleet will grow from 3,500 airplanes in operation today to 8,260 airplanes in 2029. In 20 years, much of the in-service fleet will be newer aircraft, such as the Boeing 787 and 777, which offer more passenger comfort, improved efficiency, and better environmental performance than the airplanes they replace.

The next 20 years will see 7,100 new twin-aisle deliveries, which is about 23 percent of the total number of airplane deliveries for the period and 45 percent of the total market value. About 40 percent of the demand for twin aisles will come from the Asia Pacific region. The imminent introduction of the Boeing 787 Dreamliner and, later of the Airbus A350, is also driving demand, as these new aircraft offer significant efficiency improvements over the aircraft they are replacing.

There is expected to be little change to the size of the large aircraft fleet over the long term. The number of large airplanes in the fleet will grow from about 800 today to 960 in 2029. Nearly all the gain in large aircraft is coming from the freighter market. The number of large passenger airplanes in operation today is around 500. The large airplane passenger fleet will remain at approximately that level over the long term.

The 720 new large airplanes forecast to be delivered represent only 2 percent of the total aircraft deliveries. Yet with a value of $220 billion, large airplanes account for 6 percent of the total market value. About 43 percent of the deliveries will go to Asia, with China and Southeast Asia accounting for most of the delivery demand. The Middle East, with its already substantial backlog of aircraft in this category, accounts for another 23 percent of the large airplane market. More than half of those airplanes are already on order.

Qantas Airways to Investigate Damage Tire of Airbus A380 Landed in Sydney

Airbus A380 aircraft owned by Qantas Airways was damaged when it landed at Sydney airport. The plane suffered damage to the aircraft tires. When the plane landed ban sparks a worrying issue of passenger aircraft.

Witnesses reported seeing flames and hearing a loud bang as flight QF32 touched down late on Wednesday, while media said two tyres burst. Video footage showed bright flashes from under the plane.

None of the 244 passengers was hurt in the incident, which comes just a day after a Boeing 747 was forced to abort a flight from Sydney to Singapore.

“On landing last night, two tyres were damaged. The aircraft was assessed on the runway by engineers and it was determined it was unable to be towed to the gate,” a Qantas spokeswoman told AFP.
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Emirates Airlines warned Airbus Not Postpone Delivery of A350

Emirates Airlines has issued a strong warning to Airbus not to delay the introduction of the A350.

“We have clearly told Airbus that we will not accept again what they did to us with the A380,” Emirates Airlines President Tim Clark told The Daily at the ITB tourism exchange in Berlin. He pointed out that unlike in the case of the A380 – which was two years late – Emirates Airlines has alternatives to buy elsewhere: “All I have to do is pick up the phone and order more Boeing 777s,” Clark stressed. He showed concerns that the schedule could already begin to slip. “We have told Airbus numerous times that in our view they should build in more margin in terms of time and performance parameters, but they wanted to have it their way. Now they are already eating into margins,” Clark criticized.
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Airbus Warns Output Could Drop as Much as 25% in 2010 and 2011

Airbus executives warned over the weekend that output at their European factories could fall by as much as one-fourth over the next two years as the aircraft maker and its suppliers adjust to the sharp drop in air traffic and widening losses at the world’s airlines. But the company insisted that it could absorb those cuts without resorting to large-scale layoffs — at least for now. Read more

Shares Plummet After Delay in Airbus Jet Delivery

Shares in the parent company of Airbus plummeted today, wiping nearly $7 billion off its market value, as a fresh delay in the delivery of the new double-decker A380 airplane raised questions about the company’s management and strategy.

The stock of European Aeronautic Defense and Space slid as much as a third after the French-German company warned late Tuesday that a six- to seven-month delay in the A380 delivery schedule would probably reduce operating profits by $2.5 billion between 2007 and 2010. Several leading customers for the aircraft, including Singapore Airlines, Emirates and Qantas Airlines, suggested that they would seek compensation for the delay, adding further momentum to the sell-off. Read more