Issue 252


1. SAA moves to counter Emirates offer
South African Airways has responded to last week’s Emirates promotion of fares to South Africa via Dubai. As part of its 75th Anniversary celebrations, SAA is offering Adelaide and Perth to Johannesburg return for $1300, with connecting fares to four cities in South Africa. The prices exclude taxes. Passengers can connect with Cape Town, Durban, Port Elizabeth or East London for $100 more. Emirates last week launched a new tactical fare available from Perth to Johannesburg and Nairobi. Specials are available for travel from now until June 30, 2009. Travel from Perth to Johannesburg for $1199 Economy Class return excluding taxes, or $1499 Economy Class return excluding taxes to Nairobi. Or fly Business Class from Perth to Johannesburg on Emirates for $6390 excluding taxes and $6690 to Nairobi during the same travel dates. The Virgin group’s V Australia, which recently launched services to Los Angeles, is eyeing the Australia-South Africa route, a move that, if approved, would bring much needed competition and lower fares to the route.
Source: Times of India,10 March, 2009

2. Dubai launches mega fam for agents
Dubai has launched a massive global campaign to promote its tourism facilities internationally. Initiated by Emirates airline and group in partnership with the Dubai Department of Tourism and Commerce Marketing (DTCM), Dubai hoteliers and destination management companies, the campaign is estimated to be costing around AED 50 million (US$13.6m) , including flights, accommodation, meals and tours. Starting today, more than 2,000 frontline travel staff from around the world including travel agents, tour operators and MICE agents will be invited to visit Dubai throughout March, April and May for a three day familiarization trip, under the banner of the ‘Keep discovering Dubai’ campaign. “It is critical that we maintain a constant dialogue with international travel agents, tour operators and MICE agents, to ensure they are aware of the new attractions that may be of interest to their clients. “This campaign is a major highlight of our joint efforts with the key players of the tourism industry in the emirate,” said Mohammed Khamis bin Hareb, DTCM executive director marketing and operations. "With so many of Dubai’s key travel companies and operators dedicating their services to this initiative we are confident in its success.” As part of their welcome package each guest of "Keep discovering Dubai" will receive a complimentary silver Vice Versa card. Valid for one month, users will instantly receive up to 20 per cent of the amount spent back on their card as a cash reward, when booking leisure activities, shopping and dining at Vice Versa Partner Outlets across Dubai.
Source: Business Standard,05 March, 2009

3. Australia mulls free flights for international tourists
Australia is debating an audacious plan to fly international tourists to the country for free to beat the economic turndown, which has seen visitor numbers plummet. There is only one small catch: tourists who take advantage of the free flights would have to guarantee to spend freely in shops, hotels and restaurants while they were in Australia. Under the proposal, labelled the "Mayday Project" and due to be put to the government this week, airfares - which would be offered at a discounted rate by participating airlines - would be paid for by the government. Across Australia, the number of international visitors to Australia dropped 30,000 to 5.1 million in 2008. Visitors specifically “on holiday” accounted for 2.04 million of the total – down by 141,000 on the previous year. The Mayday Project is the brainchild of Independent Tourism Holdings' innovation director Glenn Millen, who says the free flights, favorable exchange rate and novelty of the promotion would position it strongly to succeed. "We can really limit the impact of the recessionary slide on tourism through this," he said. Independent Tourism Holdings director Steve Cusworth, who is steering the project, will meet with the federal, state and territory governments, as well as airlines and industry players, to discuss the proposal.

Source: The Age,12 March, 2009

4. Air Berlin marks birthday with two for one deal
UK travellers are being offered two flights for the price of one for one day only as Air Berlin marks its 30th anniversary. Tickets for the anniversary promotion can only be booked tomorrow (March 13) for flights between May 1 and June 30.The deal applies to selected flights from Stansted and Manchester to five German city destinations: Düsseldorf, Hanover, Munster Osnabruck, Paderborn and Nuremberg. The German carrier’s first flight was on April 28, 1979 between Berlin and Palma with a Boeing 707 carrying 178 passengers.
Source: Hindustan Times,12 March, 2009

5. Cathay chief slams passenger security shambles
Cathay Pacific CEO Tony Tyler has called on the aviation industry to work towards a more efficient and harmonized process of aviation security that can make life easier for the millions of passengers who keep the industry alive. In a speech to the International Aviation Security Conference, Tyler said that Cathay Pacific is strongly supportive of a move, led by the International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO), to accelerate the harmonization of security standards through one-stop security. “The airline industry has been trying to achieve this since 1997 but progress has been painfully slow and sporadic,” he said. The Cathay chief said there was no suggestion that the industry should relax its guard, “but I strongly believe we have to make a greater effort to tackle some of the long-standing issues that make the security process more difficult and more costly than it should be. “I have lost count of the number of times customers have complained to me about the ambiguities and lack of consistency they encounter in security requirements in the world’s airports. “Some airports require you to take out your laptop, others don’t; some make you remove your shoes, others don’t; some want you to take off your belt; others don’t. “What kind of message does that send to passengers? “They are understandably puzzled and frustrated and more than occasionally worried about these inconsistencies. “Take liquids and gels, as another example. As Giovanni Bisignani of IATA asked pointedly in a recent speech in New York, where is the data that shows that a shampoo bottle is a greater risk than a belt buckle? There is none. Yet we spend millions to limit carry-on liquids. “The bizarre array of rules currently in place serves only to confuse and annoy passengers, create unnecessary costs for airlines and caterers and place strain on security staff.” Tyler said that “inconsistent and poorly conceived” rules bring the whole security process into ridicule, while imposing unproductive cost onto the airlines and frustrating all concerned – passengers in particular. “There are solutions waiting out there to iron out all the anomalies. We must find them and implement them,” he said.

Source: Times of India,05 March, 2009

6. ITB Berlin opens in style
The travel industry put on a show of strength on the opening day of ITB Berlin 2009. This year’s show, which has been fully booked since February, featured over 11,098 exhibitors (compared to 11,147 last year) – no mean feat given the global economic climate over the past 12 months. Highlight of day one belonged to reigning Miss World, Ksenia Sukhinova, who brought the ICC to a virtual standstill as she breezed elegantly through the exhibition halls. The Russian beauty won the coveted beauty contest in December in Johannesburg. She dropped by the South Africa Tourism stand to catch up with friends, pose for photos with fans, and also see how preparations for the Confederations Cup 2009 and Fifa 2010 were progressing. Day one also witnessed a healthy turn-out of tourism ministers – over 120 from around the world, and providing that essential link between private and public sectors to ease the travel industry through the downturn. Edmund Bartlett, Minister for Tourism for Jamaica, was in jubilant mood as his island posted a 2 percent rise in visitor arrivals in February, including a 3.9 percent rise in overall visitors. He said “Our winter season was particularly strong, which is always a good barometer for how the rest of the year will take shape. People continue to travel during downturns, however they become more discerning, choosing destinations that they can trust and that offer great value.”The world’s newest nation, Kosovo, made its debut at the ITB this year. A number of hotels also made their first appearance, including the Bahia del Duque (Tenerife) and the Gran Hotel Valentin Imperial Maya (Cancún). Eurostar also made its inaugural ITB appearance. The high-speed train between the UK and Europe is riding high on the back of carrying a record 9.1 million passengers last year thanks to its winning formula of affordable prices combined with stress-free travel.
Source: The Financial Times; London;11.3.2009

7. Air France KLM cuts schedule as demand falls
The Air France KLM Group’s summer 2009 schedule (29 March - 25 October) has been adjusted in line with the sharp decline in demand caused by the economic crisis which is affecting all corners of the world. In terms of available seat kilometers (ASK), Air France-KLM Group capacity for the summer 2009 season will be down by -3.4% compared with summer 2008; - 3.4 % on the long-haul network and -3.4% on the medium-haul network. KLM Royal Dutch Airlines’ service to Tallinn, Hyderabad and Aruba will temporarily be suspended while direct flights to Liverpool and Calgary are scheduled for introduction. Even more than in previous seasons, during the summer schedule, capacity will be adjusted towards the peak months. KLM’s overall capacity will be reduced by about 5% compared to last summer. North Atlantic: KLM plans to pursue its strong focus on strategic markets, an example of which is the introduction of a new service to Calgary, Canada, five times a week using an Airbus A330-200. Air France, KLM and Canadian low-cost airline WestJet recently announced their plans to build a new commercial relationship between the three airlines. This offers Air France and KLM the opportunity to strengthen their position in services to Canada and increase the number of destinations. Following the recent merger between Delta Air Lines and KLM's US partner Northwest Airlines, KLM intends to maintain its successful transatlantic joint venture while developing this further within the new context. As one of the first steps in the intensifying cooperation, Delta and Northwest are planning to mutually implement cross-fleeting (combining each others fleet). Newark and Portland (Oregon) will be the first destinations to apply this, using a Delta Air Lines Boeing 767-300. Northwest Airlines will add the third frequency to New York JFK using a Boeing 757-200. New early morning departures from JFK and Chicago should improve connections to the Middle East and Africa, making these schedules commercially more attractive. Northwest plans to operate all four daily services between Detroit and Amsterdam and will also raise capacity to Seattle by deploying an Airbus A330-300. Central and South America: In Central America, KLM responds to the good performance on the Amsterdam-Panama City route by adding two weekly flights, raising the total to five weekly roundtrips. This major capacity increase reflects the strength of this growing market and the fruitful cooperation with Copa Airlines on this route, which was launched less than a year ago with code-share flights beyond Panama City. To adjust to the market situation, KLM has temporarily suspended flights to Aruba at the start of the summer schedule. Passengers can still fly to Aruba seven days a week with Martinair, part of the KLM Group. Flights and capacity to Paramaribo will increase from three flights a week using a Boeing 747 full passenger aircraft, to four flights per week using an MD-11. Starting 1 June, KLM will add a fifth weekly flight to this schedule to better gear to the seasonality of this market. Reallocating aircraft should result in a major increase in capacity on the route to Curaçao. Daily flights will use a Boeing 747 full passenger aircraft instead of an MD-11. Twice a week these flights will also serve the island of St Maarten. Asia: KLM will continue to serve the Greater China region with a comprehensive passenger product. Together with strategic partner China Southern, KLM plans to operate 14 weekly services between Beijing and Amsterdam. Shanghai is scheduled for twelve frequencies, while service to Chengdu will increase to four weekly roundtrips. Responding to the wishes of business travellers, KLM is adjusting its schedules to Hong Kong and Shanghai, ensuring that flights from these cities — and from Amsterdam — depart in the evening. Service to the Indian market will be adjusted in response to local market developments and financial results from these routes. KLM has suspended operations to Hyderabad, while trimming capacity to Mumbai as a Delta Air Lines Boeing 767-300 replaces the Northwest Airlines Airbus A330-200 now in use. Overall capacity to Asia is reduced by approximately 5%.Africa and the Middle East: Less affected by the economic crisis, Africa and the Middle East still offer opportunities for growth. Overall, KLM plans to raise capacity to these regions. In Africa, KLM will increase frequency to Entebbe (Uganda) from four to five flights a week, while deploying larger aircraft on the Amsterdam-Nairobi route. In the Gulf region, KLM plans to grow and improve its network and services by increasing frequencies to Teheran (from four to five flights a week) and Muscat (from five to six flights a week). Daily services between Amsterdam and Kuwait and six direct flights a week to Abu Dhabi offer attractive schedules to business travellers. Europe: In Europe, KLM will be trimming capacity in the range of 4% according to varying performance and demand in specific markets. KLM will free up fleet in Europe by suspending the Tallinn route and reducing capacity to Nice, Bristol, Kiev and several other destinations. The reallocated fleet should strengthen KLM’s presence in Northern Europe by increasing flight frequency to Stavanger (five daily roundtrips) and Helsinki (four daily roundtrips). In this way, KLM can also expand its UK network by launching thrice daily service between Amsterdam and Liverpool. This summer KLM expects to welcome its third and fourth Boeing 777-300. These aircraft are intended for deployment on routes to South East Asia, Latin America and Africa. KLM is also renewing its regional fleet by gradually replacing its Fokker 100s with Embraer 190s. These will be deployed mainly on routes operated by KLM City hopper to Denmark, Norway, Sweden, the United Kingdom, Switzerland and Germany.

Source: Indian Express, March 12 2009

8.Qatar Airways confirms schedule expansion

Qatar Airways has confirmed plans to launch scheduled flights to Australia and further expand its operations in India and Europe with new routes from the start of the Northern Winter 2009 schedules. Flights to the Australian cities of Sydney and Melbourne, together with new services to Goa and Amritsar in India, and two new European services are being earmarked over the next nine months. In addition, the Doha-based carrier will increase frequency to selected destinations across its global network from the beginning of the Northern Summer 2009 schedules on March 29.Subject to regulatory approval, the long-awaited Australian services will become reality as more Boeing 777-200 Long Range aircraft join the fleet. There are currently eight Boeing 777s in Qatar Airways’ fleet of 68 aircraft – of which two are the Boeing 777 Long Range version capable of flying from Doha to Australia non-stop. Amritsar, located in the rich northwestern Indian agricultural heartland of Punjab State, is home to the Golden Temple – the spiritual and cultural centre of the Sikh religion. Together with the popular idyllic beach holiday state of Goa, the two new routes will boost Qatar Airways’ Indian capacity from nine to 11 destinations. Qatar Airways will also step up its European presence with two new routes, which are currently being finalized. The airline’s first new route launch of 2009 will be daily flights between Doha and Houston which, at just under 17 hours, will be one of the longest non-stop flights in the world. Beginning March 30, the Houston route will feature Qatar Airways’ new fully flat Business Class seats deployed on its two Boeing 777-200 Long Range aircraft, which the airline took delivery of over the past six weeks. The expansion is part of the airline’s ongoing growth strategy – a long-term commitment to develop its route infrastructure as new aircraft join the fleet at an average delivery rate of one a month. The award-winning Doha-based airline currently has on order more than 200 new Airbus and Boeing aircraft worth over US$40 billion.“As a network hub airline, Qatar Airways does not rely on traffic from any specific markets, so we are largely immune from the circumstances surrounding the current global economic meltdown,” said Chief Executive Officer Akbar Al Baker. “With new aircraft joining our fleet at an incredible rate of one a month for the foreseeable future, we are confident going forward, able to consolidate our position by increasing frequency on existing routes and introducing new routes to give passengers greater choice.”In addition to the route expansion, Qatar Airways is gradually stepping up capacity from March 29 to eight cities – Geneva, Kuala Lumpur, Manila, Lagos, Muscat, Mashad (Iran), Tunis and Algiers. The frequency increases will see the Philippines capital of Manila being served with two daily flights, up from the current 11 services a week; Nigeria’s commercial capital of Lagos going from five services a week to daily; and capacity to the Omani capital of Muscat rising from 15 to 21 flights a week. With the opening of the New Doha International Airport scheduled for 2012, Qatar Airways plans to increase its global network to beyond 100 cities worldwide.

Highlights Of Qatar Airways’ 2009 Capacity Increases

Houston – new route launch daily from March 30

Geneva – up from 4 to 5 flights a week from March 29

Lagos – up from 5 to 7 flights a week (daily) from March 29

Manila – up from 11 to 14 flights a week (double daily) from March 29

Muscat – up from 15 to 21 flights a week from March 29

Mashad – up from 3 to 5 flights a week from March 29

Kuala Lumpur – up from 7 to 10 flights a week from June 1
Source: Reuters,11.3.2009

9. JAL aim for lower fuel surcharges

Japan Airlines filed with the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for a decrease in fuel surcharge for international cargo flights departing Japan, with effect from April 01, 2009.The international cargo fuel surcharge on long-haul international routes for flights departing Japan will decrease from 115 yen to 31 yen per kg. In the case of medium-haul international routes, the surcharge will decrease from 99 to 27 yen per kg, and on short-haul routes from 83 yen to 23 yen per kg, representing an overall reduction of up to 27% on all routes. In addition, JAL has also filed with the MLIT to revise the procedure of setting its fuel surcharge levels. At present, adjustments are made 4 times a year (once every three months) using an index calculated from a three-month average fuel price of Singapore kerosene reported by the U.S Department of Energy (DOE). Starting from April 01, 2009, JAL will adjust its fuel surcharge levels on a monthly basis by using the one-month average fuel price of Singapore kerosene of the month before last. As the average fuel price of Singapore kerosene in February 2009 was US$52.77 per barrel, the benchmark fuel price used for calculation of the fuel surcharge level in April will be US$50.00 per barrel (refer to table below), resulting in the fuel surcharge reduction mentioned above.JAL is conducting a wide range of countermeasures to limit the full impact of high fuel costs including fuel hedging, fuel consumption reductions, and the introduction of more fuel-efficient medium-sized aircraft to its freighter fleet. Despite these measures, the company is still reluctantly obliged to ask its international cargo customers to bear part of the burden caused by the unprecedented increase in the price of fuel over the past few years. The JAL Group is Asia's biggest airline group in terms of sales revenues and 2nd largest in Asia in terms of passengers carried annually. JAL Group airlines serve 214 airports in 33 countries and territories, including 60 airports in Japan. The international network covers over 240 passenger routes and 27 cargo routes, and the domestic network covers 156 routes.
Source: Hindu, March 11 2009

10. Lufthansa reports on last year’s figures
The Lufthansa Group increased its offer and sales during the past business year. The Group was able to almost reproduce its previous year’s result by posting operating profit of around 1.35 billion Euros. The Group profit was posted at 599 million Euros; Last year’s figure had been 1.66 billion Euros, however, it had also included 585 million Euros of profit from extraordinary items. “This represents an outstanding result and its quality is underlined by the fact that it has been achieved during a time of global economic crisis. It reflects the quality of our company. A company in which a strong team, strong products and a strong balance were decisive in ensuring success. We intend to maintain our lead in the far more challenging environment of 2009. Our financial and operational flexibility will allow us to benefit from the opportunities that come our way during the crisis”, commented Lufthansa Chairman and CEO Wolfgang Mayrhuber, speaking at the presentation of the annual result for 2008. In view of the very good result and taking into consideration the current challenging economic situation, the Supervisory Board and Executive Board will be proposing a dividend of 70 eurocent per share at the annual general meeting. Whereas the worldwide economic slowdown has particularly been felt in the Passenger and Catering business segments, the operating results of the remaining business segments developed positively. In the Passenger Business segment, fuel costs at record levels, strike-related losses and the decline in demand caused by the state of the world economy during the second half of the year, all had a negative effect on the result. However, the attractive premium products, a demand-oriented offer strategy and the successful integration of SWISS all played decisive roles in ensuring a year-on-year growth in sales. “Crises also always seem to have a repositioning aspect to them and we will be sure to secure the right position for the future. We will be cost-effective, improve efficiency even further and take important steps in the planned expansion of our airline group, in order to ensure the long-term consolidation of our market position and that of our partners”, added the Lufthansa Chairman and CEO. Speaking on the initiated mergers with Austrian Airlines and Brussels Airlines, Mayrhuber underlined that it was important that no obstacles be placed in the way of integration: “Swift and uncomplicated implementation remains the most essential requirement to ensure the future survival of Europe as a successful centre of aviation in the face of global competition. The current economic crisis painfully reveals the structural deficits in European aviation. It has become obvious that European and intercontinental network connections from smaller and medium-sized markets can no longer be realized. Only a strong and economically successful European airline structure can meet the specific requirements of the European economy and provide its centers of business with a sustainable quality of global connections, thus also providing employees with long-term perspectives.” The Logistics business segment achieved a significantly improved operating result during the past year. In the MRO business segment, LHT extended its advantage as the leading provider of maintenance, repair and overhaul services for civilian aircraft and recorded a year-on-year rise in its operating result. The IT Services business segment was able to profit from targeted measures aimed at improving productivity and achieved a significantly improved operating result. Despite the introduction of cost reducing and productivity improving measures, the operating result of the Catering business segment was below the figure of the previous year. Lufthansa well-equipped to face challenging times. One of the most challenging years in its history lies ahead of the aviation industry said the Lufthansa Chairman and CEO looking ahead to 2009. It is not possible to forecast the duration and extent of the economic crisis. “Lufthansa stands for reliability and foresight. We cannot and will not rest on the laurels of last year’s result in this highly challenging economic environment. Lufthansa will continue to keep an eye on a solid balance sheet and maintain its financial and operational flexibility. We will continue to adjust our offer to the current demand situation. The prerequisite for success is that all of the employee groups and business segments, thus the entire Lufthansa family, work together through the crisis. Only in this way, will we be able to seize the opportunity to remain profitable and powerful in the crisis, and preserve and increase the attractiveness of our company. We intend to continue investing in aircraft, products and training. We want to secure jobs and offer perspectives; and we want to make dividends possible.” Lufthansa therefore introduced measures to secure the result at an early stage and shall continue to implement strict cost management and demand-oriented capacity management. However, in view of the dramatically deteriorating framework conditions, the further development of business is associated with significantly higher risks than usual. The Executive Board therefore expects a distinctively positive result for the 2009 business year; however, one that will be clearly below the previous year’s result.
Source: The News Age,11.3.2009

Prepared by
Jennifer Kumar, BBA (NAU) Alumni
Skyline Business School
Hauz Khas Enclave, New Delhi 110 016
Tel: 2686 4848, 2652 4399
http://www.skylinecollege.com