General News. February 2011.

A glance at Aviation News. Feb, 2011.

1st Feb 2011

 [Strapline:] General News
IndiGo places largest aircraft order ever, launching A320neo

IndiGo, India's largest low-cost carrier, has signed a Memorandum of Understanding with Airbus to acquire 180 A320 jetliners, 150 of which will be re-engined A320neo’s and 30 will be standard A320s.

Airbus says the agreement is “the largest single firm order” for commercial jetliners in aviation history, while also making IndiGo the launch customer for the A320neo. The airline will announce its choice of engine at a later date.

Available from 2016, the A320neo replaces the current powerplants – CFM International CFM56 or International Aero Engines (IAE) V2500 turbofans – with all-new, more efficient engines such as CFM’s Leap-X or Pratt & Whitney’s PW1000G. The upgraded aircraft will also have Sharklet wingtips, which offer fuel savings of up to 15 percent, cutting carbon dioxide emissions by up to 3,600t annually per aircraft.

The A320neo also provides a double-digit percentage reduction in NOx emissions and reduced engine noise, the manufacturer says.

“Ordering more A320s was the natural choice to meet India’s growing flying needs,” say IndiGo co-founders Rakesh Gangwal and Rahul Bhatia. “The opportunity to reduce costs and to further improve our environmental performance through the A320neo [was] key to our decision.”

Airbus has to date received orders for about 6,800 A320-family single-aisle jetliners and has delivered some 4,500 to more than 310 customers and operators worldwide. That makes the A320 the world’s best-selling single-aisle aircraft family, the manufacturer says.

The A320neo improves the type’s efficiency while maintaining more than 95 percent airframe commonality with existing versions of the aircraft. It will also offer up to 500 nautical miles (950km) more range or 2t more payload.

IATA sees bright future for Vietnam aviation

The International Air Transport Association (IATA) says Vietnam will become the world’s third-fastest growing market for international passengers and freight traffic by 2014, and the second-fastest for domestic passengers.

However, the country needs to prepare by focusing on three areas of improvement: air traffic management technology; cost-efficiency for airports and air navigation services; and improved business efficiency, the organization adds.

“The future for Vietnamese aviation is bright. But it is a future that cannot be taken for granted,” says Giovanni Bisignani, IATA’s Director General and CEO. “Vietnamese aviation must be built and supported by sound policies that take into account that this is a dynamic industry where change is the only constant.”

Bisignani visited Vietnam in mid-January, meeting with Vietnam Airlines, the Southern Airport Corporation and Vietnam Air Traffic Management (VATM). During the meetings, the IATA chief highlighted the areas for improvement.

“Vietnam has a world-class air navigation service provider,” Bisignani says, adding that VATM predecessor VANSCORP was awarded an IATA Eagle Award for most improved air-navigation services provider in 2009. “While VATM has taken over from VANSCORP, there is still a lot of work to be done to prepare the region for the expected enormous traffic expansion.”

Bisignani says he hopes VATM “will make the implementation of ADS-B [automated dependent surveillance – broadcast] and Performance Based Navigation (PBN) a priority”. ADS-B allows aircraft to fly more efficiently using satellite navigation systems while PBN uses on-board equipment to improve landings.

On cost-efficiency, Bisignani says IATA members are grateful for the three-year discount scheme implemented in April 2010, to reduce airline charges at Vietnam’s major airports.
“It is a clear signal that the government recognizes the important aviation plays, and will support the aviation growth in Vietnam,” he says. “Additional efforts are also needed to reduce the cost burden on current users of Vietnam’s airports and airspace.”

As Vietnam’s airports expand to meet growing air-travel demand, Bisignani adds that it is important to have cost-efficient infrastructure “following ICAO’s charging principles of consultation with users, transparency, cost recovery and non-discrimination” to maximize the benefits that aviation brings.

To improve efficiency, Bisignani urged Vietnam’s industry to take advantage of IATA’s ‘Simplifying the Business’ project, which includes such elements as e-freight, which removes paper from the cargo supply chain and will generate an estimated US$4.9 billion in annual savings.

IATA, Vietnam Airlines and freight forwarders are looking to implement e-freight in Vietnam, but the government must first ratify the Montreal Convention 99, Bisignani says.
“At the end of 2010, airlines worldwide completed the implementation of the 2D bar-coded boarding pass (BCBP),” the IATA head says. “But airlines operating at Hanoi Noi Bai Airport are still unable to reap the benefits from the BCBP, as the cost-efficient 2D bar code technology will only be available in the first half of this year. This is a rare exception in a world that is over 99 percent BCBP-capable.”

“I urge the Northern Airport Corporation to make the implementation of BCBP a priority,” said Bisignani. BCBP will save the industry up to US$1.5 billion annually, IATA says.

Asiana Airlines places order for six A380s

South Korea’s Asiana Airlines has become the latest customer for the Airbus A380, the world’s largest jetliner, placing a firm order for six aircraft.

Deliveries are scheduled to begin in 2014, with the airline planning to operate the aircraft in an all-premium layout on key European and US routes. Airbus says the carrier will make an engine selection in the near future.

“The significantly reduced operating costs and fuel efficiencies afforded by the aircraft will enable us to enhance our productivity and reduce our carbon footprint,” says Yoon Young-Doo, Asiana’s president and chief executive officer. “This is in line with our policy to operate one of the most modern and environmentally-friendly fleets in the world.”

According to John Leahy, Airbus’s chief operating officer customers: “The order is a further endorsement of the A380 as the most efficient tool to meet demand on the world's most heavily travelled routes, especially out of the fast-growing Asia-Pacific region. With the A380 in its fleet, Asiana will be able to increase its share of international traffic and reinforce its well-deserved status as one of the world's premier carriers.”

Airbus says that the A380, which burns less than 3 litres of fuel per passenger per 100km flown, has already given operators higher than average load factors and increased profitability.
Typically seating 525 passengers in a three-class layout, the A380 can fly 8,300 nautical miles (15,300km) non-stop, enabling direct service from Seoul to Europe and the US, the manufacturer says. Total firm orders for the aircraft stand at 240 from 18 customers worldwide.

Boeing meets 2010 delivery targets

Boeing announced in early January that it delivered 462 commercial aircraft in 2010, meeting its estimate of approximately 460 deliveries for the year.

The US manufacturer also gained 530 net commercial orders for the year, as airlines shifted from recovery-mode in the wake of the global recession, to fresh expansion. The company adds that it “maintains a strong order base of 3,443 unfilled orders”.

“With 376 deliveries in 2010, the Next-Generation 737 set a company delivery record for the second consecutive year,” says Jim Albaugh, president and chief executive officer of Boeing Commercial Airplanes. The single-aisle 737 “is the industry's most in-demand airplane, with 486 net orders as carriers continue to rely on its superior economics, versatility and continuous performance enhancements,” he adds.

The company’s 777 model was the leader among twin-aisle programmes, with 74 deliveries and 46 net orders in 2010 as the airplane continues to rank at the top of operator, investor and frequent traveller polls for its efficiency and passenger comfort.

Boeing announced a series of production rate increases throughout last year, to meet increasing airline demand for new aircraft. The monthly production rate for the Next-Generation 737 will increase to 35 in early 2012 and 38 in the second quarter of 2013. Monthly 777 production will rise from five aircraft to seven in mid-2011, rising further to 8.3 per month in the first quarter of 2013.

The first 747-8 Freighter is slated for delivery in mid-2011, while first delivery of the 747-8 Intercontinental passenger variant will take place late in the year. Boeing says it expects to provide guidance for 2011 commercial aircraft deliveries when it releases its annual earnings on 26 January.

MTA2011 lures aerospace sector

Aerospace will be one of the precision-engineering sectors in the spotlight at the MTA2011 conference and exhibition at the Singapore Expo on 23-26 March.

As manufacturing industry recovers in Singapore and across Asia, the conference organisers say they expect that industry professionals and business visitors from South-East Asia, India and China will form the majority of attendees.

“Seizing new opportunities in manufacturing clusters such as aerospace, oil and gas, and medical technology, MTA2011 will focus on these verticals by grouping technologies and applications under them,” says organiser Singapore Exhibition Services. “This enables buyers from specific industries to better navigate as well as explore new applications for their businesses.”

Exhibitors are being encouraged to bring state-of-the art machines specifically for these industry sectors, in addition to those that serve the traditional precision-engineering base.
“Confidence has returned to the manufacturing sector, following strong rebounds in industry and economic performances in 2010,” the Singapore Exhibition Services says.
Singapore’s manufacturing activity soared by about 58.6 percent year-on-year in May, while Malaysia’s industrial sector produced 14.1 percent more goods in March that a year earlier, the strongest year-on-year growth since 2004. In Indonesia, economic growth accelerated in the first three months of 2010 to the fastest pace since the third quarter of 2008, expanding 5.7 percent from the year-earlier quarter.

According to the conference organisers, the industry has understood that reliance on mass production of uncomplicated components and standardised products must be reduced.
“It is clear that moving up the manufacturing value chain into high-value sectors is imperative to long-term growth,” says William Lim, project director for Singapore Exhibition Services. “The time is right for industry players to step up their efforts to grow their manufacturing capabilities.”

Shandong orders Boeing 737-800s in fleet expansion

China’s Shandong Airlines has placed an order for 15 Boeing 737-800 single-aisle jetliners, with deliveries slated to take place from March 2014 through to the third quarter of 2015.
The aircraft will be used both for expansion and to replace the airline’s 11 ageing 737-300s. The carrier says it plans to launch services to more domestic and international destinations within five hours’ flight-time from its base in Jinan.

Shandong Airlines’ domestic network covers 54 destinations, while its international destinations include: Seoul’s Incheon airport, Daegu and Busan in South Korea; Osaka, in Japan; the Taiwanese capital Taipei; and the Chinese Special Administrative Region of Hong Kong. The airline has suspended flights to Singapore due to poor passenger loads.

The carrier has established operational hubs at Jinan Yaoying International Airport, Qingdao Liuting International Airport, Yantai Laishan International Airport, Chongqing Jiangbei International Airport, Xiamen Gaoqi International Airport and Beijing Capital International Airport.

Shandong Airlines was established by ten shareholders, including Air China and Shandong Development Investment (SDIC), in March 1994. Air China later acquired the shares of the eight other, unidentified partners to take a controlling stake.

Operations began in September 1997, initially on domestic routes only. The carrier also has 10 percent stake in Sichuan Airlines.

Apart from its 737-300s, Shandong Airlines also operates a fleet of 26 737-800s, three 737-700s, five Bombardier CRJ-200LR regional jets and two, larger CRJ-700ERs.
The carrier says it plans to operate as many as 100 aircraft by 2015. 

SIA announces organisational restructuring

Singapore Airlines (SIA) Chief Executive Goh Choon Phong announced on 5 January that the airline will restructure its organization to align the company’s commercial, operational and corporate planning activities more closely.

The new structure will come into effect on 1 February 2011. After that, all commercial areas – including marketing and sales, as well as the delivery of products and services – will be consolidated under Executive Vice-President Commercial Mak Swee Wah. Mak is currently executive vice-president for operations and services.

Ng Chin Hwee will oversee all human resources and operational activities as executive vice-president for human resources and operations. His responsibilities will include the Cabin Crew, Engineering, Flight Operations and Human Resources divisions. Ng is currently executive vice-president for human resources and planning.
A separate Corporate Planning division will also be formed, headed by Lee Lik Hsin, currently divisional vice-president of planning.

“With recent senior-management changes in the company, now is the appropriate time for an organisational restructuring,” Goh says. “By aligning closely-linked activities within commercial, operational and corporate planning areas, we can be more nimble to take on new challenges and pursue fresh opportunities for growth.”

Mak, Ng and Lee will report directly to the CEO, as will the airline’s Senior Vice-President Finance Chan Hon Chew.

MAS to deploy A380 on major Indian routes

In response to heavy demand, Malaysia Airlines (MAS) says it plans to deploy its new Airbus A380 jetliners on two major routes to India in 2012.
According to a senior MAS official, the specific routes have yet to be identified, as the airline is closely monitoring demand – particularly on services to Chennai, Mumbai and Delhi. MAS also flies to Hyderabad and Bangalore.

“There is a very strong possibility that Mumbai and Delhi will get the nod,” the official says.

Starting 1 April, the airline will add flights on its Delhi route making the frequency twice-daily – with seven weekly services operated by Boeing 777 widebody aircraft and seven by single-aisle 737-800s.

Current, daily 777 services to Mumbai and daily A330-300 services to Chennai will both be doubled. The existing, four-times weekly services to Hyderabad and Bangalore will also be increased to a daily service from the beginning of April.

According to the airline official, capacity on Indian routes will increase by 40 percent in 2011.

MAS has six A380-800s on order, with deliveries scheduled to commence in March 2012. The carrier’s previous plan was to use the aircraft only on its twice-daily London and Sydney services.


MALAYSIA’S TRANSMILE Air Services is to sell four Boeing MD-11F freighters to FedEx in a deal valued at US$68 million. The proceeds of the sale, set for completion by the second quarter of 2011, will go towards reducing the financially troubled carrier’s debt, cutting the total amount by about 39 percent to 320 million ringgit (US$104 million). The aircraft have been standing idle since April 2008, and the carrier has been unable to identify any routes where they could be usefully reintroduced into service. In the meantime, the grounded aircraft are increasing Transmile’s costs with parking, storage, maintenance and other expenses to the tune of 1.18 million ringgit per year.


Bangkok Airways abandons European plans

Thai regional carrier Bangkok Airways has abandoned plans to operate long-haul flights to Europe, blaming the decision on stiff competition from larger rivals.

The airline ordered four Airbus A350 XWB widebody twinjets in 2009 with the goal of launching long-haul services that would feed passengers into the company’s regional network that serves popular tourist destinations such as the Thai islands of Phuket and Koh Samui.

The Bangkok-based, privately-owned carrier will still take delivery of two of the aircraft in 2015 and the other two the following year. With the change in the company’s network plans, the twinjets will instead be deployed on high-density intra-Asia routes to China and Japan.

According to Bangkok Airways President Puttipong Prasarttong-Osoth, it would be extremely tough for the airline to compete on European routes with the likes of Thai Airways International and Middle-Eastern carriers that have a firm footing in the international long-haul market. The airline will instead focus on restoring suspended flights to: Shenzhen, Xian, Guilin and Macau in China; Fukuoka and Hiroshima in Japan; and Ho Chi Minh City, Vietnam. Bangkok Airways shelved these routes in 2008 because of the global economic crisis.
Puttipong took over the leadership of the airline in 2008 from his father, Prasert Prasarttong-Osoth, who owns the carrier.

Bangkok Airways will launch flights to Mumbai on 2 March, offering six services a week operated by single-aisle Airbus A319 aircraft. This will be followed by daily flights to Dhaka on 27 March using larger A320s.

The carrier hopes to penetrate the Indian market further later in 2011, with services to Delhi and Kolkata. It is also seriously considering entering the Australian market in 2015.
After two consecutive annual losses in 2008 and 2009, Bangkok Airways expects to post a profit of 700 million baht (US$21 million) for 2010. Puttipong says the airline is confident of recording a higher profit in 2011, thanks to the rebound in global air travel demand.

As part recapitalisation plans, Bangkok Airways will embark on an initial public offering study in 2011.


INDONESIA’S MANDALA Airlines has grounded its fleet in the face of spiralling debt and stiffening competition in the country’s air-travel market. The company said on 13 January that it is looking for a cash injection from new investors as it restructures its business to try to restore profitability. Mandala President Director Diono Nurjadin told reporters that the company hopes to be “back in the air in 45 days”, adding that he could not disclose the amount of the debt because the company is filing its case to the commercial court. The airline had been operating services to 17 domestic and three international destinations, including flights linking Jakarta to Singapore and Hong Kong.


Wataniya Airways plans expansion

Kuwait-based Wataniya Airways plans to expand its fleet of seven Airbus A320 aircraft to 12 and acquire widebody aircraft over the next few years.

This fleet expansion is aimed at supporting the airline’s goal of launching services to new destinations in India and other points in Asia.

Speaking at the Aviation Outlook Asia conference in Singapore late last year, Wataniya Chief Executive Officer George Cooper said that, while the airline’s main focus is on Kuwait and the Middle East, it is also keen to fly to India and select markets in Asia.

Wataniya now operates from the exclusive, private Sheikh Saad Terminal at Kuwait International Airport. The airline has a network of 11 destinations, covering Alexandria, Amman, Bahrain, Beirut, Cairo, Damsacus, Dubai, Istanbul, Jeddah, Rome and Vienna.

The carrier launched a thrice-weekly service between Beirut and Vienna on 31 October, and is looking at increasing this to a daily flight in future. The company has a code-sharing agreement with Austrian Airlines on 19 European routes from Vienna.

Wataniya Airways was set up in 2006, taking advantage of the Kuwait government’s aviation-liberalisation policy. The carrier received its air operating certificate in July 2008 and commenced operations in January 2009.

Wataniya is the only premium airline in Kuwait, and the only commercial airline to operate from the private terminal. The company is listed on the Kuwait Stock Exchange.

The carrier’s A320 aircraft are configured in a two-class layout, offering Business First and Premium Economy services. On 2 November, Wataniya moved its operations in Istanbul, Turkey, from the city’s Sabiha Gokcen International Airport to the older Ataturk International Airport.

KKIA expansion set for December completion

The planned, 1.4 billion Malaysian ringgit (US$451.6 million) expansion of Kota Kinabalu International Airport (KKIA), which has been delayed by two years and eight months due to the contractor’s financial constraints, will be completed in December 2011.

Work on the project, which started in April 2006, involves the land reclamation for an 800m runway extension, increasing the total length to 3.8km, as well as reinforcement of the runway, construction of a parallel taxiway, a new air traffic control tower, more remote parking bays, a new 110,000 square-metre passenger terminal, a terminal for low-cost carriers and an additional three aerobridges, increasing the number to 15.

When work is completed, KKIA’s annual passenger-handling capacity will be increased by 4 million, to 9 million.

Transport minister Kong Cho Ha attributed the delay to the fact that construction work could only be carried out at night for three to four hours when the airport is closed, between 1am and 6am.

Separately, Malaysia Airports Holdings (MAHB) is investing 250 million ringgit for the expansion of the Penang International Airport (PIA). The project involves the expansion of the terminal building by 24,500 square metres to 52,000 square metres, increasing the number of check-in counters as well as adding new immigration and security-screening facilities.
There will also be an increase in the number of baggage carousels. When completed in mid-2012, annual passenger capacity will be increased from 3.5 million to 5 million.
The investment is part of MAHB’s five-year business plan and its Master Plan for the development of PIA. It is part of the second economic stimulus package announced by the Federal government in 2008 and also of the Northern Corridor Economic Region blueprint, which was launched the same year.


QANTAS ANNOUNCED on 14 January that it will launch direct services from Sydney to Dallas/Fort Worth International Airport (DFW) from 16 May. The route will see Qantas operate direct, outbound flights from Sydney to DFW, returning via Brisbane. DFW is the primary hub of Qantas’ Oneworld alliance partner, American Airlines, and the Australian carrier says the two will “soon seek to expand their commercial relationship”. Qantas will offer four return flights to DFW each week, using Boeing 747 aircraft in a three-class configuration. The carrier will halt direct Sydney-San Francisco services on 14 May, but the US city will remain part of Qantas' network as a code-share destination. DFW is the fourth-largest and fastest-growing metropolitan area in the United States and an important centre of business and tourism. The airport handled over 56 million passengers in 2009, 59 percent of whom continued on to other destinations.

INDONESIA’S PT SKY, a charter operator which began scheduled services last year, will expand its fleet with the lease of three Fokker 50 turboprops, set to begin operations within weeks. The company became a scheduled airline after a management change, launching services to Surabaya, Banyuwangi and Denpasar in December, using a Cessna Grand Caravan aircraft. The Fokker 50s will be used for a mix of scheduled regional services and charter flights for the local oil and gas industry.


Asian Aviation at a glance