Low Cost Airline News.

Discount carriers facing higher costs, competition. Some analysts say low-fare airlines are becoming more and more vulnerable to fuel prices and competition. Discounters are facing higher costs and operational issues after several years of strong growth. Mar 17, 2006

Airlines add fees for previously free services. Airlines have added fees for services that were once included in ticket prices. Some carriers charge for booking tickets over the phone, flying standby, and baggage that exceeds specified weight limits. "This could make a lot of difference to an airline. It could mean up to $1000 per plane, and that could make the difference between a profit and a loss," said Terry Trippler of cheapseats.com. Mar 16, 2006

Air Berlin

Air Berlin will launch a 12-times-weekly Belfast-London Stansted service on May 2. Mar 17, 2006

Air Berlin ready for IPO. Air Berlin announced last week that it is "ready for the stock market" and intends to go public.The timing of the flotation on the Prime Standard of the Frankfurt Stock Exchange was not announced, and the airline said it was "impossible" to forecast the proceeds from the move. German media reported earlier this year that the IPO is designed to raise [euro]700 million ($834.8 million). Commerzbank and Morgan Stanley were appointed as joint global coordinator and joint bookrunner. Mar 13, 2006

EasyJet

EasyJet, with its Orly hub, is now the second largest airline in Francel. It was forced last week to drop its proposed Paris - Ajaccio service announced earlier this month. The DGAC (French CAA) said that it could not agree to a second airline operating scheduled flights on this route, as the French Government had granted a monopoly to Air France/CCM under a so-called Public Service Obligation (PSO). After careful consideration of all options, easyJet has decided not to operate the route, for which it says there is a high demand, claiming that taxpayers' money is being handed over to Air France. easyJet says it could provide a better service at a better price without subsidies, with return fares starting at E70 compared to the lowest return fare of E263 for Air France/CCM (AF quoted prices). It says tourism will suffer in Corsica, which incidentally is where AF CEO Jean-Cyril Spinetta originates (as did Napoleon). On 7 March easyJet announced further expansion in France with five new routes and three new airports (Ajaccio, Bordeaux, La Rochelle). The new services are Luton to Bordeaux starting on 29 June, Bristol to Toulouse 21 July and Marseille 22 July, as well as four weekly flights from Bristol to La Rochelle which begin 21 July. http://www.easyjet.com Mar 19, 2006

EasyJet said yesterday it was "forced" this week to cancel plans to operate daily Paris Orly-Ajaccio service from July after being informed that French authorities "had granted a monopoly to Air France/CCM under a Public Service Obligation," according to the London-based LCC. Most PSO routes are operated by only one carrier, but EasyJet claims the route can support two airlines. "There is a huge demand for flights from Paris to Corsica, as we have seen over the past few weeks, and there is no justification for a monopoly. Not only are other airlines banned from this route, but also is tax-payers' money being handed over to Air France," easyJet DG-France Francois Bacchetta commented, saying the ban also hurts Corsicans because tourists "have to pay ripoff prices." The Ajaccio flight was part of a French expansion that comprised five new routes and three new markets (Ajaccio, Bordeaux and La Rochelle). EasyJet is France's second-largest airline. Mar 17, 2006

Jet2.com

Jet2.com will launch daily Leeds-Dusseldorf service on May 8. Mar 17, 2006

JETBLUE AIRWAYS 

JetBlue Airways signed a 10-year contract with Hamilton Sundstrand for MRO services for Hamilton Sundstrand systems on its A320 fleet. The agreement covers electric power generation, cabin pressure control and emergency power systems. The airline has firm orders for 96 A320s through 2016 with options for an additional 50. Mar 17, 2006

JetBlue should focus on original business plan. JetBlue Airlines is struggling with high fuel prices and stiff competition, the Los Angeles Times editorial board writes. The airline began departing from its successful operations formula by expanding rapidly and flying more than one type of plane, the newspaper argues. JetBlue executives should focus on the parts of the business plan that work, the board writes.

Mar 16, 2006

JetBlue to invest in methanol research: David Neeleman, President and CEO of JetBlue Airways said he is investing in methanol research, a less expensive fuel made from coal. "We should be able to make fuel out of coal," said Neeleman, who blames high oil prices, the Florida hurricanes and Hurricane Katrina for the airline's financial problems. Mar 16, 2006

LUFTHANSA GERMAN AIRLINES

Lufthansa plans to expand its lower-fare strategy for European flights, Executive VP-Marketing and Sales Thierry Antinori said during the ITB tourism fair in Berlin last week. The carrier recently introduced short-haul return flights starting at [euro]99 ($118) at Hamburg and Dusseldorf with slightly better than expected results. Additionally, it has taken share away from Air Berlin, according to Antinori. "We will definitely roll out this concept. I assume that we will also move into other catchments in the coming months," he said. Passenger numbers are up 40% in Hamburg and 15% in Dusseldorf, he claimed. Antinori said LH is very satisfied with the performance of its Lufthansa Private Jet services, which were introduced a year ago. It is expanding the product and adding bookings with Hawker 800XP and Falcon 2000 jets to encompass the entire EU and most of continental Europe and the Middle East, and is considering adding travel to states in the Russian Federation. "About 1,000 airports are reachable. Depending on the availablity of Netjets, we would like to offer this service also in Shanghai and Guangzhou, as well at other cities in China and Asia, if possible this year," he said. On the network side, Lufthansa will add Bahrain and plans more frequencies to the Middle East. "British Airways stopped flights to Saudi Arabia; we want to expand," Antinori said. More frequencies to Jeddah will follow. A sixth city in India will be added, but no new destinations are planned in China in favor of adding a third frequency to Shanghai. "It is better to consolidate in Shanghai and Guangzhou than to open a new destination in China like Chengdu," he said. Separately, LH said it flew 7.32 billion RPKs in February, a year-over-year increase of 2%. Capacity rose 4% to 10.41 billion ASKs and load factor fell 1.3 points to 70.4%. European traffic increased 5.3% to 1.89 billion RPKs against a 6.1% rise in capacity to 3.2 billion ASKs and load factor dipped 0.5 point to 59%. Mar 14, 2006

SOUTHWEST AIRLINES

Phoenix officials visit Southwest in Dallas. Phoenix officials want to be on the top of Southwest Airlines' list if it ever decides to relocate its headquarters. Phoenix economic development officials recently met with Southwest officials in Dallas to discuss air service and Southwest's presence in Phoenix. Mar 16, 2006

Southwest Airlines has "increased the near-entirety of its fare structure," according to JP Morgan analyst Jamie Baker, giving the green light to US carriers to raise their own domestic fares. Facing rising fuel costs and the erosion of its hedges, Southwest boosted one-way fares $2-$10 across two-thirds of its network over the weekend, Baker said. Its $299 fare cap, in place since 2002, has been raised $10 in "the largest single fare increase they have ever taken." A "significant" number of its one-way long-haul fares have increased by $10 as well. Southwest's fuel bill is expected to grow by up to $600 million this year, more than its 2005 profit of $548 million, according to The Dallas Morning News. American Airlines, United Airlines, Delta Air Lines, Continental Airlines, Northwest Airlines and US Airways quickly matched Southwest's hikes, according to press reports. Mar 15, 2006

Sterling

Sterling launched thrice-weekly Copenhagen-Edinburgh service yesterday. Frequency will increase to six-times-weekly from March 27. It also will launch twice-weekly Edinburgh-Helsinki service beginning March 27 aboard 737s. Mar 14, 2006

Tiger Airways, Airbus

Tiger Airways of Singapore chalked up a major milestone yesterday, carrying its millionth passenger. CEO Tony Davis told media he was "absolutely delighted to hit the one millionth passenger mark so early in the second year of operations." He predicted that "the rapid expansion with our A320 aircraft and new routes this year will allow us to shorten the time it takes to hit our second millionth passenger." The LCC will take delivery of two A320s in April and an additional three by year end. Its network, which now covers 13 cities in seven countries, will increase to 16 destinations next month with flights to Guangzhou, Haikou and Shenzhen. It moves to Changi's new Budget Terminal later this month. Mar 15, 2006

Vueling Airlines

Vueling Airlines will start a daily Barcelona-Santiago de Compostela flight aboard A320s from April 13. Mar 17, 2006