‘Worst May Be Over’ For Airline Industry
Air passenger traffic fell 3.1 per cent in April, slowing from double-digit falls in the two preceding months, the airline industry association IATA says, noting the “worst may be over”.
However, the International Air Transport Association warned on Wednesday that the Easter holiday traffic may have lent a boost of “at least two per cent,” and that recovery may still take a while to come.
“The worst may be over. However, we have not yet seen any signs that recovery is imminent,” said Giovanni Bisignani, IATA’s director general.
He added in a statement that as the decline in passenger demand still outstripped the capacity cuts made by airlines, therefore yields had not improved.
Asia Pacific carriers still saw the biggest falls in demand, with an 8.6 per cent drop in passenger traffic for April.
Cross-Atlantic traffic meanwhile benefited from sharp discounts offered by airlines.
North American airlines posted a fall of 13.4 per cent in March, but saw the decline reduced to 4.2 per cent in April.
European carriers posted a decline of 2.7 per cent in April as opposed to a fall of 11.6 per cent in March.
Middle Eastern and Latin American carriers bucked the negative trend, recording demand growth of 11.2 per cent and 7.5 per cent respectively in April.
Air freight meanwhile stayed weak, falling 21.7 per cent during the month year-on-year.
IATA noted that this marked the fifth consecutive month that cargo had fallen in the 20 per cent range, therefore suggesting that freight demand has “found a solid floor.”
AFP
China and Taiwan Prepare Airlines Flight Route
Taiwan and China, enemies since the end of the Chinese civil war in 1949, will launch direct sea links, postal links and daily charter flights Monday.
Both sides made final preparations for launching the links Sunday with Taiwan issuing a stamp showing two doves carrying a letter across the Taiwan Strait – to mark the launch of direct postal service – while China was loading container ships to sail directly to Taiwan.
According to the United Evening News (UEN), President Ma Ying-jeou who preside over the ceremony for sea links at the Kaohsiung harbour in south Taiwan for the Evergreen Marine.
Premier Liu Chao-shiuan would attend a joint direct shipping ceremony for four shipping lines at the Keelung Harbour near Taipei, the evening paper said.
On Monday in China, vice premier Wang Qishan will preside over COSCO Shipping’s direct shipping launch ceremony at the Tianjin Port, to see off a container ship sailing directly to Kaohsiung.
Lien Chan, honorary chairman of Taiwan’s ruling Chinese Nationalist Party (KMT), has been invited to attend the ceremony at the Tianjin Port.
KMT vice chairman John Chiang will attend the direct sea link launch ceremony at the Shanghai Port, the UEN said.
A total of 16 charter flights will cross the Taiwan Strait Monday, A TransAsia Airways plane, carrying 148 passengers, will take off from Taipei for Shanghai at 8 am Monday, becoming the first Taiwan flight bound for China.
From China’s side, a Shenzhen Airlines flight is scheduled to land at the Sungshan Airport in Taipei at 9 a.m., becoming the first Chinese aircraft to operate the daily charter flights.
Taiwan banned direct sea, air and trade links with China since 1949, after the Chinese Nationalists lost the Chinese Civil War and fled to Taiwan to set up their government-in-exile.
Public opinion polls have shown that about 80 percent of Taiwanese want to keep the status quo, rejecting both immediate unification with China and declaration of independence which would trigger an attack from Beijing.
The six-decade ban on trade links has severely hurt Taiwan’s economy. The damage is increasing as China becomes the locomotive of the world’s economy and foreign countries are stepping over Taiwan to deal directly with China.
Ma unveiled peace overtures when he became president May 20, launching weekend charter flights on July 4 so that Chinese tour groups could visit Taiwan.
The opening of direct sea links and charter flights will cut the time and cost of shipping and passenger travel by up to one-third.
Ma, while seeking economic cooperation and trust-building with China, insists Taiwan is a sovereign state whose future must be decided by the Taiwan people.
In an editorial Sunday, the United Evening News hailed the new opening as a page in China’s history which took 59 years to turn.
“There is a basket of problems to solve. But for the time being, let’s drop political dogmas and learn to put charcoal on a muddy road, so that people can walk on this road.”
American Airlines Mechanics Union May Strike
The American Airlines’ mechanics union has rejected a tentative contract proposal and may be headed toward a strike, according to the Transport Workers Union (TWU).
In a vote Tuesday night, 3,371 members of the mechanic work group voted in favor of the proposal while 6,074 voted it down, officially rejecting the May 5 proposal.
A second work group, stock clerks, voted down the pay deal 384 to 332.
A third unit, made of technical specialists, approved their deal.
Since its restructure in 2003, in which labor groups made concessions to keep the airline afloat, the company has complained that its labor costs by some measures are higher than its competitors, many of whom reorganized out of bankruptcy under court protection, where workers were forced to cut even more.
An American Airlines spokesperson has said the company will continue working toward new agreements.
According to a report by Reuters, the union said the negative votes amount to strike authorization, though airline strikes are rare and safeguarded by The Railway Labor Act.
Shares of AMR were down more than 2.3% Wednesday to $6.09 ten minutes before market close.
Boeing Engineers to Vote on Contract for 4 Years of Labor Peace
Boeing Co. and union leaders agreed on a contract offer that if approved would give engineers an average 5 percent raise and Boeing the labor peace it needs to get production of the new 787 and 747 jumbo jet back on track.
Boeing and the Society of Professional Engineering Employees in Aerospace agreed yesterday on a four-year proposal that 20,500 union members will vote on by mail-in ballot from Nov. 21 to Dec. 1, the day the current contract expires.
“We’ve addressed tough issues in this contract,” Boeing’s lead negotiator, Doug Kight, said on a conference call yesterday. “They’re offers that show our respect for our engineering and technical employees.”
Kight and engineering leaders have been in talks in a hotel near Boeing’s Seattle manufacturing hub since Oct. 29, three days before an eight-week strike by Boeing’s 27,000 machinists ended. That walkout, over job security and compensation, idled factories and cost Boeing more than $10 million a day in profit. Engineers had threatened to stop work over similar issues.
The machinist strike also contributed to a delay of as much as nine months in the new 747-8’s entry into service and pushed the first delivery of the 777 freighter into next quarter rather than this quarter, Boeing said yesterday. The company is still assessing the strike’s impact on the 787, which was at least 15 months behind schedule before the walkout.
Union members will pay about $200 a year more for improved health-care coverage that will cost Boeing about $3,000 extra under the agreement, Kight said. Boeing agreed to give the labor group more input into outsourcing decisions and to keep giving new employees a defined-benefit pension rather than the 401(k)- style plan the company had wanted.
Raise Pool
Boeing said it will set aside a pool amounting to 5 percent of its salary payments to cover the increases. Some workers will get more, while all engineers will be guaranteed at least 2 percent a year and technical workers at least 2.5 percent. The more than 13,000 Boeing engineers in Washington state, Oregon, Utah and California make an average of $88,000 a year now, and the nearly 7,000 technical workers average $67,000.
The company also agreed to increase pension payments and overtime rates and to keep Utah engineers on the same contract.
The engineers, like the machinists, had sought limits on the use of non-union, temporary workers that Boeing has employed to help control costs while developing and building planes like the 787 Dreamliner. The union wanted Boeing to agree to a set percentage of subcontractors.
Providing Input
Boeing instead allowed “unprecedented language” to be written into the contract giving the union “regular opportunities to provide input on our use of non-Boeing labor,” Kight said. The company retained its freedom to make business decisions itself, he said.
Boeing and the union agreed to set the duration of the contract for four years instead of three, as it did with the machinists union. The extra year would give Boeing a longer timeframe with labor peace with both groups.
While the engineers have walked out twice since their union was founded in 1946 — for one day in 1993 and for 40 days in 2000 — the machinists have stopped work seven times in strikes lasting as long as 10 weeks.
The engineers initially sought raises of 10 percent annually through 2011, more vacation days and a restoration of early retiree medical benefits.
“It was some very tough negotiations and it really did come down to the wire,” said Bill Dugovich, a union spokesman. “Boeing gave way on money,” which led to an agreement, he said.
The union calls Boeing an “island of success” in the slumping economy, because of its record profits and unprecedented $276 billion order backlog, and says employees deserve a greater share of the work and the earnings. Boeing has said any contract improvements must be affordable even if there’s a future slowdown and that it needs outsourcing flexibility to stay competitive.
Machinists Strike
The 27,000 machinists, who stopped work on Sept. 6, voted on Nov. 1 to accept a proposal that included a 15 percent raise over four years, higher pension payments and starting wages, job security for maintenance and parts-delivery workers and the ability to bid for more work that Boeing’s considering outsourcing.
A strike by engineers, who design the planes and oversee their manufacture, would extend jet-delivery delays, hurting airlines worldwide that are counting on newer models to ease fuel consumption.
Boeing and its larger rival, Toulouse, France-based Airbus SAS, have about seven years’ worth of orders to fill.
Boeing fell $2.12, or 4.9 percent, to $41.04 yesterday in New York. The stock has declined 53 percent this year.
Air Canada Flight Australia to Vancouver Emergency Landing in Honolulu
An Air Canada jet en route from Australia to Vancouver was forced to make an emergency landing in Honolulu on Friday after 22 people suffered minor injuries, following severe air turbulence.
Ian Gregor, a spokesman with the U.S. Federal Aviation Administration, said initial reports show 19 passengers and three crew members were injured when Flight AC34 encountered turbulence approximately 150 kilometres southwest of Honolulu.
“The plane diverted to Honolulu with initial reports of 22 injuries,” he said. “Four passengers were taken to hospital for treatment of their injuries, I don’t know the extent of their injuries.”
Peter Fitzpatrick, a spokesman for the airline, said he could not comment on the FAA report, but confirmed nine passengers and two flight attendants required medical attention for minor injuries. He said they were treated on site and released.
Two passengers and two flight attendants remained in Honolulu for further assessment for minor injuries, the airline said. Those two passengers were expected to continue their journey to Vancouver later Friday.
“Fortunately, they have been released and will likely be heading home this evening,” he said. “I think it is a very good sign that they have been released and they are fit to travel this evening,” said Fitzpatrick, who added the two flight attendants from the Vancouver-based crew were released from hospital late Friday afternoon.
The Boeing 777 aircraft landed in Honolulu about 7:10 a.m. ET Friday and departed two hours later. The plane was scheduled to arrive in Vancouver at 2:44 p.m. ET, according to an Air Canada release.
It was not immediately known if the plane lost altitude when it hit what the carrier called “severe turbulence.”
“Obviously, it was of such a nature to cause injuries and that was, of course, very worrisome,” said Fitzpatrick. “(The pilot) responded appropriately, making sure people got medical attention as soon as possible and that’s why they diverted to Honolulu.”
Upon landing in Hawaii, the flight was met by medical and emergency services to provide assistance if necessary, the airline said in a statement.
Air Canada said the seatbelt sign was turned on when the plane hit turbulence.
