Malaysia Airlines Replace MH674 Boeing 737, Flight Destination Singapore to Penang
The problematic engine of a Malaysia Airlines Boeing 737 aircraft on flight MH674 from Singapore to Penang yesterday is being replaced, the national airline said on Friday.
“The aircraft is expected to be fully serviceable by Monday,” said Malaysia Airlines director of operations, Capt Mohamed Azharuddin Osman.
The affected aircraft with 95 people, including a crew of seven, landed safely with one engine at the Bayan Lepas International Airport in Penang.
Mohamed Azharuddin said in a statement that during the approach of the aircraft to Penang, its captain noticed that the right engine was surging with vibrations.
The captain decided to go around to further assess the situation and initiated a precautionary shutdown of the engine before landing the plane safely, he said.
Azharuddin said immediate investigations revealed that there was no external damage to the aircraft and engines.
In clarifying that the aircraft concerned was not on fire as reported by the media, he said in that situation when the engine was shut down, the residual fuel left would be burnt off at the exhaust section of the engine, thus they could be visibly seen as flashes.
“This is normal. These flashes will dissipate once all the residuel fuel burns off. The plane is perfectly safe, capable and certified to fly in this condition,” he added.
Azharuddin said the affected engine would be sent to the overhauler and the authorities would conduct investigations to ascertain the cause of the problem.
A Malaysia Airlines spokesperson contacted by Bernama said the national airline had always placed passenger safety as a top priority at all times.
Airline Trade Group Expects To Chop Loss In Half In 2010
Rising demand will reduce carriers’ red ink to $5.6 billion, the International Air Transport Assn. predicts. A U.S. group, citing volatile fuel prices, is not so optimistic.
The airline industry will rebound modestly next year, losing only about half of what it is expects to lose in 2009, a trade group predicted Tuesday.
“The worst is likely behind us,” said Giovanni Bisignani, director general of the International Air Transport Assn., the trade group that issued the financial outlook. The association represents about 230 airlines worldwide.
The group’s forecast for $5.6 billion in net losses next year attributes the improving picture partly to growing passenger and cargo demand.
Still, other airline experts say the industry is not in the clear yet. Many unpredictable factors — including fuel prices — could lead to more losses next year.
“There is too much volatility in the marketplace to make a forecast,” said David Castelveter, a spokesman for the Air Transport Assn. of America, which represents the largest air carriers in the U.S.
The recession has hit airlines hard by drying up business travel budgets, a key revenue stream. Most carriers responded by cutting capacity — eliminating flights and parking aircraft — and adopting new passenger fees to check bags, board early and upgrade seats, among other services.
The forecast predicted that net losses next year would be about 15% higher than the $3.8 billion the group had previously forecast. Still, the losses are just a little more than half the $11 billion that association anticipates losing in 2009.
Revenues for the world’s airlines are expected to rise to $478 billion in 2010, an increase of $22 billion from 2009, according to the forecast. Still, that figure is about 11% below the peak of $535 billion in 2008.
After a 4.1% drop in passenger traffic in 2009, the international group predicts traffic to grow 4.5% next year, with a total of 2.28 billion people flying. Airlines will also benefit from a 7% growth in cargo demand, according to the forecast.
North American airlines will continue to cut capacity to reduce losses while European carriers suffer bigger losses because they risk losing access to busy airports if they eliminate flights, the report said.
While Castelveter and other analysts say it’s too early to forecast clear skies for the industry, others say the worst of the financial storm is over.
“The U.S. will come out of it a little stronger,” said Ray Neidl, an independent airline analyst based in New York.
As the economy stabilizes, he said corporate spending on travel will increase.
Stable fuel prices are crucial to the industry’s recovery, Neidl said. For every dollar increase in crude oil prices, the U.S. airline industry must spend an additional $430 million on fuel, Castelveter said.
At an investor day event Tuesday, Delta President Ed Bastian said the world’s largest airline is on track to lose $1.1 billion in 2009, primarily because of fuel hedges. But he said fourth-quarter trends show improvement from earlier in the year, with a 15% increase in business travel sales in the last few weeks.
Businesses may be increasing travel budgets, but they haven’t loosened some of the austerity measures they adopted in the last year, experts say. Many business travelers are required to fly coach and stay in economy hotels.
“Business travel is picking up, but corporate business managers have not loosened up the policies,” said Noah Tratt, a vice president at Egencia, the corporate travel arm of Expedia.com. “Those policies will stay in place for a while.”
Japan Airlines to Cut Jobs, Pursue Alliance
Japan Airlines Corp. confirmed tie-up talks with foreign carriers and said it would slash its work force by 14% as the struggling carrier seeks to escape its long malaise.
Delta Air Lines Inc. and American Airlines parent AMR Corp. have been in separate talks with JAL in recent weeks to build stronger ties and potentially invest hundreds of millions of dollars in the unprofitable airline, according to people familiar with the matter.
Speaking briefly Tuesday, JAL Chief Executive Haruka Nishimatsu declined to disclose the identity of the other carriers but said he expects a mid-October deadline to conclude talks. He said his company is likely to choose just one partner, adding that this partner won’t necessarily become the biggest shareholder of JAL.
Mr. Nishimatsu also said his company will seek to reduce its 48,000-strong work force by 6,800 employees in the latest round of job cuts. He added that JAL will pursue a “drastic” reorganization of its routes, though he declined to disclose details.
Mr. Nishimatsu’s comments came after he met with an independent panel set up by the Japanese transport ministry to oversee the airline’s revival. The cash-strapped carrier — which has suffered along with other airlines from the global economic slump and slowdown in traffic — is due to announce a revamp plan by the end of this month.
At a briefing to explain what was discussed at the meeting with the independent panel, an official at the transport ministry said the company seeks to reduce the ratio of its international flights to less than the current 50% of overall flights.
The restructuring plan is key for JAL to get fresh loans from banks, as it will have to persuade lenders that it can get back on its feet. Analysts estimate JAL may need as much as 150 billion yen, or $1.65 billion, in new funds in the second half of its fiscal year through March, on top of the 100 billion-yen loan partially backed by the government that it received in June.
In its fiscal first quarter ended in June, JAL reported a loss of more than $1 billion at current exchange rates as the softening economy added to older woes that include high costs and intensifying competition. It is predicting a net loss of 63 billion yen for the full business year ending in March.
The International Air Transport Association on Tuesday said the global airline industry faces $11 billion of losses this year, greater than forecast, as business travel remains in a slump and fuel prices are rising.
JAL is appealing as a partner for its lucrative trans-Pacific and Asian routes, which could be a major asset to the rival airline alliances that Delta and AMR belong to. Such alliances have become crucial, as they allow airlines to share passengers and the costs of operating aircraft and ground services. JAL is already a member of the oneworld alliance, along with AMR’s American.
But government restrictions limit investment by foreigners to about one-third, and other airlines face their own headwinds and aren’t likely to make enough of an investment to change the airline’s fortunes.
JAL has already retrenched somewhat — a particularly painful process for companies in Japan, where layoffs are politically unpopular. Its work force totaled nearly 54,000 workers five years ago. Over the same period, it has trimmed capacity, as measured by airline seats flown, by 15% as it has canceled routes, reduced flights and switched to planes with fewer seats.
Mr. Nishimatsu, a longtime company employee, has had some success shaking up the airline’s bureaucratic culture. But the former government-run Japan flag carrier has hit hard times since striking out on its own more than two decades ago. In addition to the global traffic slowdown, its business also has suffered from Japan’s long economic slide and from increasing competition from All Nippon Airways Co. and other, fleeter rivals. Internationally, its prominence has fallen as business travelers increasingly turn to China and other faster-growing Asian nations.
The airline has been unprofitable for four of the past seven years. Last fiscal year, it flew 83.49 billion revenue passenger kilometers, a common industry measure of traffic. Four years earlier, it flew more than 102 billion.
In Tokyo, JAL shares ended 3.4% lower at 170 yen after Monday’s 8% surge sparked by deal talks.
Charlotte City Council Approve Airport Expansion Plans
The Charlotte, N.C., City Council has approved a design contract for a new parking deck, kicking off the airport’s expansion plan, officials said.
With that in place, the airport expects the $300 million roadway, terminal and parking lot expansion project will be done in 1015, The Charlotte Observer reported Monday.
Plans call for building half of a new parking deck before demolishing the old one, which will make room for the new one to be completed, the newspaper said.
Despite the recession, the expansion was necessary due to the increased number of passengers who see Charlotte as a destination, rather than a link between connecting flights, said Bob Mann, an independent airline consultant.
“The parking issue is really an issue of how rapidly the origin and destination market of Charlotte has grown,” he said.
Airlines Express Seats : American Airlines Adds New Fees for Express Seats Option
American Airlines issued a policy for passengers who want a seat at the Express Seats will be subject to additional costs of approximately $19 to $39. Express airplane seats located on the first two or three rows in coach class.
Customers who buy the Express Seats option also will be assigned to AA’s “Group 1″ queue for general boarding. That means they’ll be among the first passengers on the plane, giving them better odds for snagging increasingly coveted space in the overhead storage bins.
The Chicago Tribune writes “seats beyond the first few rows in coach will continue to (be) free, with the exception of exit rows. Elite frequent fliers and customers (paying) full fares will not be subject to the new seat charges, the airline said.”
In a press release announcing the program, AA says “Express Seats are available to all American Airlines customers and can be purchased exclusively via airport Self-Service Check-In machines anytime from 24 hours to 50 minutes prior to scheduled flight departure for travel wholly within the United States, including Puerto Rico and the U.S. Virgin Islands.”
The Fort Worth Star-Telegram notes “Express Seats is the third initiative American has launched this summer under its new Your Choice program, and the latest program airlines have launched to try and generate extra revenue.”
The Dallas Morning News details one of the latest offerings, writing that AA “in June rolled out a fee that allowed purchasers to board a flight in the first boarding group, pay $75 to change a flight rather than $150 and stand by for an earlier flight without the usual fee.” That fee ranges $9 to $19 each way, depending on the length of the flight.
In its other recent fee initiative, AA began charging $10 each way for customers to get guaranteed access to Group 1 in the boarding queue.
AA spokesman Tim Smith tells the Star-Telegram the carrier could tie more perks to fees in the future, but says that depends on how well the current options are received by customers. Smith says that will be determined by “people voting with their wallets.”
