Airport Business News - Asia / Pacific.
Budget carrier bmibaby to close later this year Budget airline bmibaby is set to shut down later this year, threatening the loss of hundreds of jobs and the ending of its flights. The carrier transferred to International Airlines Group, the owners of British Airways, last month, but consultations have now started with unions about its closure in September. The GMB union said it was "devastating" news, especially for the East Midlands, where hundreds of jobs are now threatened with the axe. With bmi Regional, bmibaby transferred to International Airlines Group ownership on completion of the purchase from Lufthansa. IAG has consistently said that bmibaby and bmi Regional are not part of its long-term plans. A statement said: "Progress has been made with a potential buyer for bmi Regional, but so far this has not been possible for bmibaby, despite attempts over many months by both Lufthansa and IAG. Bmibaby has therefore started consultation to look at future options including, subject to that consultation, a proposal to close in September this year." Peter Simpson, bmi interim managing director, said: "We recognise that these are unsettling times for bmibaby employees, who have worked tirelessly during a long period of uncertainty. Bmibaby has delivered high levels of operational performance and customer service, but has continued to struggle financially, losing more than [pounds sterling]100 million in the last four years. In the consultation process, we will need to be realistic about our options. "To help stem losses as quickly as possible and as a preliminary measure, we will be making reductions to bmibaby's flying programme from June. We sincerely apologise to all customers affected and will be providing full refunds and doing all we can with other airlines to mitigate the impact of these changes." Jim McAuslan, general secretary of the pilots' union Balpa, said: "This is bad news for jobs. Bmibaby pilots are disappointed and frustrated that, even though there appears to be potential buyers, we are prevented from speaking with them to explore how we can contribute to developing a successful business plan. "The frustration has now turned to anger following the news that Flybe (which is part owned by BA) has moved onto many of these bmibaby routes without any opportunity for staff to look at options and alternatives. Balpa's priority is to protect jobs; and we will use whatever means we can to do so." The changes mean that all bmibaby flights to and from Belfast will cease from June 11, although this will not affect bmi mainline's services to London Heathrow. Bmibaby services from East Midlands to Amsterdam, Paris, Geneva, Nice, Edinburgh, Glasgow and Newquay, and from Birmingham to Knock and Amsterdam, will end on the same date. Reported by UKPA May 3, 2012
AirAsia, AirAsia X, Malaysian Airlines AirAsia, Malaysia terminate share swap deal. AirAsia, AirAsia X and Malaysian Airline System (MAS) have ended a share swap deal signed last year to end their rivalry and boost business, an official source in Kuala Lumpur has confirmed. The two are not ending their business relationship but moving it into a more flexible and less demanding form. OMAS, AirAsia and AirAsia X have refined the focus of the CobA (Collaborative Agreement) through the SA (Supplemental Collaboration Agreement),O MAS said in a statement. OThe key areas identified are procurement, aircraft component repairs, training, technical and operational efficiency, as well as mutually championing common industry issues,O the statement added. Under terms of the deal signed in August, Tune Air and Khazanah Nasional Berhad, the major shareholders of AirAsia and MAS, respectively, had acquired from each other existing shares of both companies. Tune held 20.5% of shares in MAS and Khazanah held 10% in AirAsia. That has now ended and has the tenure of senior officials from each airline on the board of the other. OKhazanah remains supportive of the compelling logic of proper collaboration between airlines so long as it complies with competition laws, but we also acknowledge the unintended and unfortunate confusion and distraction of the share swap arrangements that has been an impediment to the more important task of turning round the national carrier,O managing director Tan Sri DatoO Azman Haji Mokhtar said. The general feeling is that the move will not impact AirAsia much but could complicate MASOs attempts to claw its way back to the black. The flag carrier suffered losses of MYR2.52 billion ($832 million) last year. May 4, 2012
IATA IATA Reports U.S. Airline Profits Are Up 60 Percent . Profits for a small group of 17 U.S. airlines are 60 percent better than they were a year ago, according to the latest Airlines Financial Monitor from the International Air Transport Association. And airline share prices overall out-performed other industries thanks to modest economic improvements. But this trend was not universal. Freight volumes, an important economic indicator, are actually up 4 percent since the fourth quarter and passenger levels remain strong, approaching pre-recession highs in some major markets. Additionally, fuel prices eased slightly in April, falling 3 percent, but remain close to 2011 peak prices. Yields in the U.S. remain high but this is not true for airlines worldwide. However, load factors remain strong and even though airlines are taking delivery of new aircraft (119 in March, for example), airlines are retiring nearly as many. So, capacity is growing but not as quickly as demand. ThatOs good, as full planes mean airlines can recoup some of those fuel costs. However, the fact that international fares have not kept pace with domestic fare increases means the ability to recover fuel prices is not industry wide. May 3, 2012
IATA IATA Reports Air Travel Up But Threatened by High Oil Prices. Global air traffic increased 7.6 percent in March, according to the latest figures from the International Air Transport Association. But part of that increase is due to fact that last yearOs results were dampened by the chilling effect the Arab Spring and the earthquake and tsunami in Japan. If it werenOt for those events, traffic would have increased just two percentage points, according to IATA estimates. ThatOs good news and bad news, according to Toby Tyler, director general and CEO of IATA. The good news is that airlines still managed to expand 5 or 6 percent. But little of that is going to airlinesO bottom lines because airline yields canOt keep up with oil price increases. Oil has been above $100 per barrel for the past 14 months. In 2008, the last time oil prices soared so high they went from $90 a barrel in January, peaked at $147 a barrel in late July but then dropped to under $50 in November. OWe have not seen such sustained high oil prices previously,O Tyler said. OJet fuel prices have risen 8 percent since January. Considering that fuel now accounts for 34% of average operating costs, itOs an increase that hurts.O In March, total airline passenger capacity rose 4.4 percent compared to the same month last year, resulting in a load factor of 78.3 percent, up 2.4 percentage points over the year-ago period. Freight capacity climbed 1.7 percent year-on-year, above the rate of demand, placing pressure on load factors. International air travel rose 9.6 percent in March compared to the year-ago period, while capacity climbed 5 percent, resulting in a load factor of 77.7 percent, up 3.2 percentage points from March 2011. European carriers are seeing the strongest traffic growth despite the regionOs economic problems, demand was up 8.8 percent, and capacity was up 4.1 percent. Load factors rose to 78.5 percent. Asia-Pacific carriers also showed healthy growth, with demand up 8.1 percent on a 4.1 percent increase in capacity and load factors up to 76.5 percent. These carriers, however, were affected the most by the tsunami and earthquake in Japan last year, so that exaggerated their growth by about 3 percent, IATA estimates. Middle East carriers saw the biggest demand increase -- 20.9 percent with a 12.4 percent rise in capacity and load factors of 78.7 percent. But much of that was because the Arab Spring hurt travel to the region last year. Meanwhile, North America saw a 5.3 percent rise in passenger traffic in March, which IATA called a solid performance that reflects an improving economy and increased consumer confidence. May 2, 2012
IATA IATA Reports Strong March Gains in Air Passenger Numbers. Premium and economy air travel were both up significantly in March from a year ago, according to theEInternational Air Transport AssociationE(IATA). The number of passengers traveling in business and first class on international markets was up 8.6 percent in March compared to the same month in 2011. Economy class travel also showed significant growth, increasing 8.9 percent on a year ago. Part of the reason itOs up is because of the impact of the Japanese tsunami and the Arab Spring, which depressed travel last year. Although those events exaggerated the improved figures, IATA says that premium travel was about 4 percentage points higher this March than it would have been in the absence of the Arab Spring and the Japan earthquake and tsunami, but that still has the market growing at a solid rate of over 4 percent in March. And economy travel would have been up 7 percent without the effect of the tsunami and Arab Spring. Growth in other regions of the world were also strong in March when compared to a year ago, expanding 4.9 percent and 6.7 percent, respectively, consistent with positive economic indicators from the U.S. and Germany. Travel within Europe also showed similar degrees of improvement in March, particularly for premium travel, which increased by 3.1 percent from a year ago, up on the February contraction of 0.8 percent. This result, however, is in contrast to the weak economic backdrop in Europe, where business confidence continues to decline and economic growth contracted for a second consecutive quarter. IATA said that an improving global business environment is helping airlines. World trade is up two percent over a year ago and leading indicators of business travel are showing further increase, with the Purchasing ManagersO Index signaling a modest expansion in business confidence for the fifth consecutive month. May 2, 2012
Qantas Qantas To Cut 400 Maintenance Jobs. Australian carrier Qantas will cut 400 jobs at its heavy maintenance base near Melbourne Airport and 660 workers at another base are also at risk, media reports said on Tuesday. A Qantas spokeswoman confirmed a review of the carrier's three existing heavy maintenance bases in Australia had been carried out but would not comment on how many jobs might be cut as a result. The Herald Sun newspaper said Qantas, Australia's biggest airline, has found its main Tullamarine base in Melbourne, the capital of southern Victoria state, must close within months. A similar base at Qantas's budget carrier Jetstar's home base at Avalon Airport, also in Victoria, will not be viable beyond two years, it said. The airline has three maintenance bases in Australia, with the other in Queensland state. The recent review found it does not need three separate operations, a Qantas spokeswoman said. "The significant reduction of maintenance required on our aircraft means we do not need three separate maintenance bases," she said. "We haven't confirmed how many jobs will be cut," she said. Qantas is considering various options at this stage and expects to make a decision by mid-May, the spokeswoman said. The airline has suffered industrial disputes due to job cuts in recent years. Planes were grounded during one dispute last year, leaving more than 70,000 passengers stranded. Apr 30, 2012
Qantas Airways Qantas to cut 400 jobs in Australia, 600 more in danger: media. Australian carrier Qantas will cut 400 jobs at its heavy maintenance base near Melbourne airport and 660 workers at another base are also at risk, media reports said on Tuesday. A Qantas spokeswoman confirmed a review of the carrier's three existing heavy maintenance bases in Australia had been carried out but would not comment on how many jobs might be cut as a result. The Herald Sun newspaper said Qantas, Australia's biggest airline, has found its main Tullamarine base in Melbourne, the capital of southern Victoria state, must close within months. Another similar one at Qantas's budget carrier Jetstar's homebase at Avalon Airport, also in Victoria, will not be viable beyond two years, it said. The airline has three maintenance bases in Australia, with the other in northeastern Queensland state. The recent review found it does not need three separate operations, the Qantas spokeswoman told Reuters. "The significant reduction of maintenance required on our aircraft means we do not need three separate maintenance bases," she said. "We haven't confirmed how many jobs will be cut," she said. Qantas is considering various options at this stage and expects to make a decision by mid-May, the spokeswoman said. The airline has suffered industrial disputes due to job cuts in recent years. Planes were grounded during one dispute last year, leaving more than 70,000 passengers stranded. Apr 30, 2012 2154-2260
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