The Industry

EasyJet attacks Luton Council in ad campaign

alex7582 — Fri, 25 Sep 2009 09:38:20 +0000

from marketing

EasyJet has launched an ad campaign attacking Luton Council for not helping to reduce airport costs

Paul Simmons, easyJet UK general manager, said the ‘Head in the sand’ campaign highlights that the authorities are risking future job losses by not taking up the issue of costs with Luton Airport owner, Abertis.

In an open letter to Luton Council, easyJet chief executive Andy Harrison said: ‘Luton airport should be growing not shrinking. The council cannot escape its responsibility to make the airport competitive. The council own the airport, the council take more than half of the airport charges paid by easyJet.’

The budget carrier had reduced its number of flights from Luton by 14% and plans to reduce it by a further 20%.

British Airways sets seat charges

alex7582 — Fri, 25 Sep 2009 08:51:21 +0000

from bbc.co.uk

British Airways said seat charges will give customers “more control”

British Airways passengers may have to pay to choose their seats before they travel, the airline has said.

The charges will affect those seeking to ensure they sit together on a flight and people with a preference for window, aisle or emergency exit seats.

People will pay from 7 October. Prices range from £10 per person for European economy flights, to £60 for long haul trips in business class.

BA said it would “give customers more control over their seating options”.

The airline currently allows passengers to reserve seats in the 24 hours prior to departure.

The charge will be £20 on long-haul economy or short flights in business class, while a seat in an emergency exit row will cost £50 and can be booked between 10 and four days before take-off.

A BA spokeswoman said: “Customers frequently request specific seats, but in the past we’ve only been able to confirm them 24 hours in advance or on the day.

“We know people want to secure them in advance and have real control over their flying experience. This will allow them to do that.”

The move comes as the airline attempts to bolster its balance sheet after a £401m loss in the last financial year.

And it follows BA’s decision to cut luggage allowances and abolish free meals on short flights.

Japan Airlines requests bail-out

alex7582 — Thu, 24 Sep 2009 09:36:06 +0000

from bbc.co.uk

The airline had said it expected to make a heavy loss this year

Loss-making carrier Japan Airlines (JAL) has asked for a government bail-out to help it survive.

JAL president Haruka Nishimatsu made the requests after meeting Japan’s new transport minister. He also proposed a more drastic restructuring.

The airline recently announced plans to cut 6,800 jobs.

JAL’s shares had already tumbled 18% to a record low on rumours that it was seeking public money, or that it might seek to break up the company.

Tie-up hopes

“Ultimately, we think that the use of more funds will reduce our debts to the public,” Mr Nishimatsu said.

He made the comments to reporters after meeting Transport Minister Seiji Maehara, who took over the role after the Democratic Party took charge of the government.

Mr Nishimatsu plans to apply for public funds under the industrial revitalisation law.

The law means that companies need to obtain approval from the government to restructure. They can then apply for loans from banks, which are backed by the Japanese government’s wholly-owned Japan Finance Corp.

Media reports recently have said that several US and European airlines – including Air France-KLM, Delta Airlines and American Airlines – are in the running to take a stake in JAL and expand into Asia via code-sharing agreements.

Mr Nishimatsu said last week that he hoped JAL would have a deal in place with an international carrier by the middle of October.

Sector suffers

The airline industry as a whole has suffered in the global downturn, hit by a combination of falling passenger numbers and high oil prices.

The International Air Transport Association (Iata) has increased its forecast for losses across the whole industry to $11bn for 2009, from the $9bn it predicted earlier this month.

Airlines have already lost $6bn in the first half of the year alone, Iata said, with Asian airlines among the hardest hit.

In the Asia-Pacific region, Iata predicts airlines will report losses of $3.6bn for 2009.

Think flying economy is bad now? New aircraft design puts passengers face-to-face in rows for budget travel

alex7582 — Wed, 23 Sep 2009 14:15:54 +0000

from Daily Mail

Air travel is being overhauled with a new aircraft design which plans to seat passengers facing each other in rows.

The controversial design is intended to save space and money and could see 50 per cent more passengers packed on to each plane.

Howard Guy, director of the UK company Design Q, acknowledges that some people will not be happy with the plan, but says they will be able to pay less for any inconvenience.

The future of air travel: The new design could see more passengers on each plane and ticket prices lowered

‘Having passengers face each other is not an ideal situation,’ he said. ‘But this will see increased revenue for the operator and more economical tickets for the passenger – so by keeping both happy, this concept makes an attractive alternative.

‘Sure the passenger can choose a flight facing forward in a traditional seating position, but he or she will have to pay more for the luxury.’

Mr Guy predicts that the design could see a 50 per cent increase in the number of passengers on board and a 30 per cent reduced cost per seat.

However, he did concede that the seats would not be comfortable for passengers on flights of more than two hours.

Military personnel are used to travelling in rows facing each other

‘Our thoughts are really to do with short-haul journeys – anything from 30 minutes to 80 minutes. As the seats will be designed for less occupancy time, passenger comfort will be reduced on longer trips,’ he said.

Another downside to the seating design is that food carts would not be able to pass down the plane as the aisles are too narrow, so food distribution would be difficult.

Although the idea has caused a negative reaction among many travellers, others have voiced their opinions in support of the idea.

Mr Guy said: ‘Military personnel are used to travelling in that way and have had a positive reaction to the idea.

Flying high: Earlier this year Ryanair looked into vertical seating options

‘Many other forms of transport use this layout to maximise space, even VIP’s private jets, so why not use something similar for short plane journeys?’

The lighter seating would mean that planes use less fuel and more passengers could travel on each flight which could significantly lower the price of fares.

Design Q is not the only company looking at alternative ways to transport passengers in planes.

Ryanair recently claimed it was looking into having standing areas and bar stools located at the back of some of its flights so passengers could travel on flights of less than an hour and a half for free.

Airlines plan ‘to cut emissions’

alex7582 — Tue, 22 Sep 2009 10:38:10 +0000

from bbc.co.uk

Cutting emissions could mean a rise in air fares for travellers

The aviation industry is to pledge to cut carbon dioxide emissions to half the 2005 levels by 2050, the head of BA will tell world leaders later.

British Airways Chief Executive Willie Walsh will say the industry’s proposals are “the best option for the planet”.

The move would force air fares up and could prompt a race for green technologies among aircraft makers.

The deal between airlines, airports and aircraft companies will be presented at the UN’s climate summit in New York.

Around 100 or so world leaders are attending the conference aimed at building momentum before a meeting in Denmark in December, where it is hoped a new deal on global emissions reduction targets will be thrashed out.

The aviation industry’s plan is thought to be an attempt to head off criticism from environmental groups over increasing emissions at the Copenhagen meeting.

Mr Walsh will speak with senior executives from Qatar Airways, SAS and the International Air Transport Association at the UN headquarters in New York later on Tuesday.

Mr Walsh will tell the conference: “International aviation emissions were not included in the Kyoto protocol 12 years ago.

‘Seize this chance’

“Now we have a chance to rectify that omission, and we must seize it.

“Our proposals represent the most environmentally effective and practical means of reducing aviation’s carbon impact.

“They are the best option for the planet and we urge the UN to adopt them.”

The proposals are:

• to halve net carbon dioxide emissions by 2050, compared with 2005 levels

• to make all industry growth carbon-neutral by 2020

• to cut carbon dioxide emissions by 1.5% each year over the next decade

• to submit plans for joining a global carbon trading scheme to the UN by November 2010

If these are accepted by the UN, they will be on the agenda at Copenhagen.

Meanwhile, Ed Miliband, Energy and Climate Change Secretary, who is at the New York summit, said achieving a deal on climate change would not be easy.

“Many of the jigsaw pieces are starting to come into place, despite the fact that we are trying to do something incredibly difficult, which is get an agreement among 189 countries and do something the world has never done before, which is cut our overall emissions – global emissions – and that is incredibly hard.

“But I think there’s signs from India, from China, from Brazil, and, of course, I think Europe has been doing a job, and indeed I think the political will in the US that exists, I think is encouraging.”

Government ‘cannot allow’ JAL bankruptcy

alex7582 — Fri, 18 Sep 2009 09:37:55 +0000

from ft.com

Japan’s transportation minister sought on Thursday to allay concerns that the country’s new centre-left government might withdraw financial support for Japan Airlines, the loss-making carrier that is seeking at least Y100bn ($1.09bn) in emergency aid.

Seiji Maehara, who assumed the transportation post on Wednesday, said: “Japan’s skies have always had two airlines, and it’s important that we continue with a system of two major airlines. We absolutely cannot allow a bankruptcy.”

Mr Maehara had inflamed concerns about JAL’s future in a news conference following his appointment. He said he planned to dismiss a panel of academics, lawyers and other experts installed by the previous government to oversee JAL’s turnround effort, and to craft his response to JAL’s problems beginning with “blank slate”.

The expert panel has been responsible for reviewing cost-cutting and other measures implemented by the airline and evaluating its requests for aid.

This week it began examining a JAL proposal to eliminate 6,800 jobs, or 14 per cent of its workforce, and to shrink its international network. Its report on the plan, due next month, was to serve as the basis for the government’s decision on the release of new financial aid. JAL received Y100bn of emergency loans in June but needs another Y100bn or more by the end of the year to continue operating, according to people familiar with its financial situation.

The company is struggling with nearly Y800bn in debt, and suffered a record net loss of Y99bn in the three months to June.

In addition to seeking further government support, JAL is in preliminary talks with two US carriers, Delta Air Lines and American Airlines, over an equity injection of Y30bn ($328m). Haruka Nishimatsu, chief executive, said on Tuesday that the company aimed to agree on a capital tie-up by mid-October.

Some DPJ lawmakers have been critical of the long-ruling Liberal Democratic government’s seemingly open-ended support for JAL, which is heading for its fourth net loss in five years.

But disciplining the airline may prove difficult for the new administration. Many of the measures that analysts say are needed to turn the airline around are opposed by groups that supported the party in its landslide election victory on August 30.

One of those groups is organised labour, which has attacked the proposed job losses as well as plans by the airline to save Y88bn by cutting pay-outs from its pension scheme.

“Support from Rengo [the national federation of labour unions] is what won the DPJ its majority,” said Takao Toshikawa, editor-in-chief of the political journal Tokyo Insideline. “It can’t ignore that.”

The DPJ has also courted support from relatively poorer rural districts – areas that are inevitably the first to lose air connections when unprofitable routes are scrapped.

“You have all these small local airports in Japan that JAL flies in an out of. That is probably where the pressure comes,” said Robert Dujarric, director of the Institute of Contemporary Japanese Studies at Temple University in Tokyo.

One person familiar with JAL’s financial situation said the airline may need its next injection of emergency funds as early as next month.

Aeroflot plans to cut 2,000 jobs

alex7582 — Fri, 18 Sep 2009 09:28:32 +0000

from bbc.co.uk

The staff cuts are about 13% of Aeroflot’s total workforce

Russian airline Aeroflot, which is 51% government owned, has said it plans to cut 2,000 jobs in the next six months.

The company also suggested more job cuts could follow, after the airline said profits plunged amid fewer passengers and fuel costs.

“The general director has more than once said the staff needs to be thinned, now with the crisis this has become necessary,” the airline said.

The staff cuts amount to about 13% of Aeroflot’s total workforce.

In July, the airline announced that its net profit in 2008 had plummeted by 88% to $37m (£20m), down from $313m in 2007.

The company blamed it on higher fuel costs and losses at its cargo operations, which declared bankruptcy in June.

Airbus upbeat about plane demand

alex7582 — Fri, 18 Sep 2009 09:26:54 +0000

from bbc.co.uk

The European planemaker Airbus has raised its forecast for new aircraft demand over the next 20 years.

It predicted global demand for 25,000 new aircraft across the industry between 2009 and 2029, up from the 24,262 it forecast for 2007 to 2027.

It also said that passenger numbers would fall by 2% this year but rise 4.6% next year.

Its rival Boeing predicted in June that 29,000 new planes would be ordered between 2009 and 2029.

Airbus said that demand for aircraft would be resilient to economic upturns and downturns.

‘Big leap’

“Air transportation is a growth industry and an essential ingredient in the world economy,” said John Leahy from Airbus.

He added that the growth of low-cost airlines would be a factor in future growth.

Speaking after the Airbus briefing, Tim Coombs from the consultancy Aviation Economics said “making 20 year forecasts about anything is a big leap”.

“I found it slightly surprising that the figure was up on last year given that we are in a recession,” he added.

“We also don’t know how the industry is going to be treated in terms of emmissions.”

Airline in $1bn air mile sell-off

alex7582 — Fri, 18 Sep 2009 09:22:40 +0000

from bbc.co.uk

American Airlines plans to add capacity in the US

AMR, the parent of American Airlines, has raised $2.9bn (£1.8bn) of new financing to help it through the global downturn in air travel.

The group said $1bn of the total came from advanced sales of frequent flyer miles to Citigroup bank.

A further $1.6bn came from a sale and leaseback arrangement with General Electric’s aviation division for planes it had already ordered.

The airline also said it would add capacity at key US airports.

Shares in AMR jumped 18% on the back of the news.

‘Competitive advantage’

Citigroup has effectively bought air miles in advance with which it can reward its customers when they use the bank’s credit cards.

“Today’s announcement positions our company well to face today’s industry challenges and allows us to remain focused on the future and on returning to profitability,” said AMR chairman Gerard Arpey.

He added a note of caution, however, saying that the airline “cannot borrow its way to prosperity”.

Reports also suggest that American Airlines is in discussions with Japan Airlines about taking a stake in the troubled Japanese carrier.

“In one fell swoop, American Airlines has raised its game and put itself back in the thrust of gaining a competitive advantage against a backdrop of weak airline travel demand,” said Saj Ahmad, airline analyst at the Gerson Lehrman Group.

“The real question now is how long will we wait before we see them make a move on Japan Airlines – today’s news is almost certainly a precursor to that.”

Economic case for Heathrow third runway flawed, figures show

alex7582 — Thu, 17 Sep 2009 15:17:57 +0000

from guardian

Critics say the new figures show the government’s support for the new runway is a ‘sham’ and have demanded that plans to expand the airport are scrapped

Ministers announced plans to expand Heathrow in January, which could mean another 220,000 flights a year. Photograph: David Levene

The economic benefits of expanding Heathrow airport will almost entirely be wiped out by the increased costs to the environment, a new analysis shows.

The government’s own figures suggest that ministers have underestimated by several billion pounds the financial impact of the extra greenhouse gases produced by a third runway at the airport.

Critics say the new figures show the government’s support for the new runway is a “sham” and have demanded that plans to expand the airport are scrapped.

Simon Hughes, energy and climate change spokesman for the Liberal Democrats, which carried out the new analysis, said: “It is time for the government to come clean on Heathrow. Ministers know the economic rationale for a third runway is a sham because their own figures prove it. By giving the green light to a third runway, the government has allowed hundreds of thousands more flights, creating a climate change disaster.”

Ministers announced the Heathrow expansion plan in January, which could add another 220,000 flights a year at the west London site. The government said the climate change costs associated with the project would be £4.8bn through to 2080, which it said would leave an overall benefit to the UK economy of £4.4bn to £5.2bn. But the Liberal Democrats say this calculation was based on out-of-date figures.

The government said the extra flights would generate 181m tonnes of carbon dioxide to 2080. To work out the associated cost, it used guidance issued in 2007 from the Department for the Environment, Food and Rural Affairs (Defra) on the “shadow price of carbon”. This was intended to account at the planning stages of new projects for the damage caused by extra pollution, at a price of £25 per tonne of CO2 produced. This calculation produced the £4.8bn climate cost, which still allowed for a healthy profit.

The Lib Dems repeated the calculation using revised guidance on CO2 costs published this summer by the Department of Energy and Climate Change (Decc). The Decc figures allow for increased costs over time, with the damage caused by a tonne of carbon dioxide rising to £70 in 2030 and £200 in 2050. The Lib Dems assumed a similar onward rate of increase, giving a carbon cost of £648 per tonne by 2080.

Using the Decc figures to repeat the government’s calculation gives a new overall climate cost of £9.3bn to 2080, an increase of £4.5bn, which swallows almost all of the expected profit.

The Department for Transport admitted it has not yet used the revised Decc figures to recalculate its sums. In a written answer to a parliamentary question from Hughes, Chris Mole, parliamentary undersecretary at the department, said: “No revised net present value estimate for a new runway and terminal at Heathrow airport that takes account of the new carbon values published in July 2009 by Decc are available. Preliminary work since the January Heathrow decision indicates that the economic case for Heathrow’s third runway is robust to the new carbon values.”

Hughes said: “The government’s ability to show leadership on reducing emissions is fatally undermined when it follows catastrophic policies like the third runway at Heathrow and a new generation of coal power stations. It cannot hope to meet its carbon reduction targets when it is wedded to high polluting industries like these. While the Liberal Democrats have long campaigned against a third runway, the Tories are wavering on airport expansion and Labour are ploughing full steam ahead.”

Andrew Simms of the New Economics Foundation (NEF) said: “Coming up with the shadow price of carbon is really like trying to hit a moving target but this seems entirely reasonable.”

In January, the NEF accused the government of “fantasy economics” to support Heathrow expansion. It argued the true environmental cost of the extra runway could be as high as £20bn, because carbon emissions released at altitude do more damage than those on the ground. Simms added that the “demonstration effect” could add to the effective carbon footprint of an expanded Heathrow, by setting an example to other countries that large, carbon-intensive development is acceptable.

The government says that aviation will account for up to 29% of UK carbon dioxide emissions by 2050 if all other industries meet CO2 reduction targets.