Wednesday, November 15, 2017

Egypt Air places a huge order at the Dubai Air Show


Egypt Air has officially announced that it has placed an order with Bombardier at the Dubai Air show today for 24 C Series 300 aircraft. 

The breakdown is 12 firm plus 12 options and shall be initially used to fully replace its Egypt Air Express fleet of 10 E70s. 

The realistic flying range capability of the C300 out of CAI airport during summer season can be seen on the map below:

*Official stated payload range has been penalized by 30% in chart below taking into account CAI summer weather and 105kg average pax weight 

*Eastbound it can fly nonstop up to Karachi

*Westbound nonstop up to Manchester or Lisbon

*Southbound nonstop up to Accra, Dar Es Salaam and Kinshasa

map

In addition to the above, MS also announced it has placed an order for 6 new Boeing 787-9s + 15 Airbus A320NEOs. The latter will be used to replace its existing fleet of 4 A320s + a few of its oldest B738s. 

The B789 will be used to expand its long haul inter-continental network with flights to Washington DC from Cairo expected to be launched as the first new route operated by this aircraft type. 

The realistic flying range capability of the B789 with a full payload of 290 pax approximately out of CAI airport in summer season is mentioned below:

* Official published range of B789 penalized by -25% 
* For Cairo-Houston, there will be a payload restriction
* No payload issues for any Southeast Asian route + Sao Paulo
* Aircraft cannot operate from CAI to Australia nonstop 

map

Tuesday, November 14, 2017

Ethiopian Airlines orders 4 more B777Fs

Ethiopian Airlines has officially announced at the on going Dubai air show that they have placed an additional order for 4 Boeing 777-200LR freighters. 

ET currently has 6 B77Fs in its fleet and these incremental 4 will be used to expand its freighter network as per the CEO. 

Sunday, November 12, 2017

my analysis on Emirates ordering 40 Boeing 787-10s

Emirates has officially announced that it has placed an order for 40 Boeing 787-10s worth US$15 billion at list prices. These are the largest variant currently available on the Boeing 787 family line.

The other airlines that have placed an order for the B781 version are as follows:

BA 12
EY 30
BR 18
SQ 49
UA 14
AF 8
NH 3
Total - 134 versus 689 for the B789 and 423 for the B788

For some time now, EK has realized that their fleet strategy of it being revolved around the B77W and A380 only was not working as the B77W was for logical reasons too big of an aircraft to be considered its smallest type. Though EK has a fleet of 10 B777-200LRs which are actually its smallest aircraft, it is used on dedicated ultra long haul routes primarily where the B77W cannot operate to.

The B781 is similar in size to the A333 and B772 but has better operating economics due to its more modern technology. In fact compared to the B77W, Boeing has officially stated in its EK B781 order press release, that the fuel consumption savings alone for the B781 is 25% less per flight!

Source: http://boeing.mediaroom.com/2017-11-12-Boeing-Emirates-Announce-Commitment-for-40-787-10-Dreamliners

As far as the placement of this order is concerned, there are positives and negatives. The positives are as follows:

1. EK desperately needed a smaller aircraft in the 250-330 seat range which they lost out on since the retirement of their A332s over a year ago. 

2. The B781 is an ideal medium density aircraft for regional operations to the Indian subcontinent, Africa and Europe plus can cover all of EK's Southeast Asia network easily with a full payload of pax + cargo. The realistic maximum flying range capability out of DXB airport for this aircraft type is 10 hours 30 minutes.  

3. Mega operational cost savings to be incurred over the long run by deploying this aircraft variant instead of the B77W on routes where the latter is deemed too big. 

4. The LOPA is not yet known but in a 2 class configuration, the B781 can seat 330 passengers whilst in 3 classes it is 290. 

5. The usefulness of having a 330 seater B781 for EK can also be looked at in a manner on which they operate on certain sectors where they are limited in terms of seating capacity per week. For example, on DXB-HYD if EK is limited to fly 7,945 seats per week, they currently do so by flying triple daily B77Ws. If they switched over to B781s exclusively, they can increase frequency by operating 24 flights per week using a 2 class 330 seater version or 27 flights per week using a 3 class version compared to 21 on a B777-300ER!

The negatives are as follows:
    
1. The realistic flying range capability of the B787-10 out of DXB airport during summer season is mentioned below with the brightly colored area being reachable whilst the dark shaded area being untenable. 

2. As you can make out from the range map below, the B781 can on a normal day during the IATA summer season fly a maximum of 9,500 km nonstop from DXB airport which means it cannot operate to any North American/South American and Australian destination nonstop with a full payload with the exception of Perth but on the return PER-DXB there will be a payload penalty in place. 

map

3. By not ordering the longer range B789 which can cover the U.S. East Coast + PER, it does not provide EK with the scheduling + cost saving flexibility to downgrade flights during the low season period between FEB-MAY + OCT-NOV. For example, a B789 operated DXB-BOS-DXB round trip flight at a total net cost level would cost EK approximately US$112,000 less versus using a B77W. This same sensible approach has been adopted by Qatar Airways who downgraded many U.S. East Coast flights due to seasonal demand fluctuations from a B777 to a B788/A359.  

4. EK actually needed a 280-290 seater aircraft to be their smallest wide body and not a 330 seater B781. In this way the fleet layout would have looked more reasonable as follows:

B789 - 280 seats (2 class) or 250 seats (3 class)
B77W - 427 seats (2 class) or 354 seats (3 class)
A380 - 615 seats (2 class) or 489 seats (3 class) 

The above is a much more commercially acceptable aircraft capacity distribution.  


5. New USA routes requiring a 250-300 seater sized aircraft such as PHL and DTW cannot be operated with a B781

To conclude, this order was very much needed by both Boeing and Emirates as it helps increase for the former especially the residual value and credit-ability of the B781. It gives EK good positive PR in USA with the Trump Administration in particular as the order is worth US$15 billion and will stimulate new local jobs for sure.  

Hopefully down the road, EK management decide on converting at least 10 of the B781s to 12 B789s as it will really help them all round over the long run.
Plus it can enable them sensibly to launch new routes such as DTW and PHL with a smaller B789 versus a more expensive B77W.  

Tuesday, November 7, 2017

Ethiopian announces Chicago, Geneva and Shenzhen

The CEO of Ethiopian Airlines has officially announced that the carrier would launch 3 new long haul destinations from June 2018 as part of its aggressive global expansion plan.

The new routes are to Chicago, Geneva and Shenzhen. This would provide SHE and ORD's first direct link to Africa whilst GVA already has Tunisair operating along with other carriers to North Africa in particular. 

The routing for ORD is not yet announced but going by the trend of its current North American operations, it is likely to be flown via DUB. 

Source: http://thereporterethiopia.com/article/ethiopian-fly-chicago

Comments:

ET should have instead launched Houston via Lagos with a B787 or A350 operated 3-4 times per week as the yields + demand are much higher for this segment versus Chicago. 

Thursday, November 2, 2017

Etihad to suspend Dallas flights


Etihad Airways
has officially announced that due to the commercial reasons it shall be suspending all its daily flights to Dallas, USA effective 25MAR18. EY blames the suspension of its code share relationship with American Airlines for this pullout as it has been badly impacted with the loss of this vital feed.


EY operates currently to DFW nonstop from AUH on a daily basis using a B777-200LR.

Saturday, October 21, 2017

Hawaiian confirms A330NEOs will not be taken

Hawaiian Airlines CEO has officially confirmed that the airline will no longer be taking delivery of its 6 Airbus A330-800NEOs and is seeking alternate aircraft for its long haul expansion program. 

HA wants aircraft that can operate with a full payload on 15-16 hour flights to London and mainland Europe on a year round basis from HNL airport.

Source: https://www.flightglobal.com/news/articles/hawaiian-seeking-a330-800neo-alternatives-ceo-442337/

Comments:

Its best if HA exchange it for Airbus A350-900s and transfer over the deposits to that. 

China Southern orders 38 additional Boeing planes

China Southern Airlines has officially announced that it has placed a multi-billion dollar order with Boeing for the purchase of 38 narrow body and wide body jets. The breakdown is 8 Boeing 777-300ERs plus 30 Boeing 737 MAX8s. 

CZ currently has 10 B77Ws operating in its fleet configured with 309 passengers in a 4 class cabin layout. It is expected to base these incremental ordered aircraft at its upcoming new Beijing Daxing airport base. 

Source: https://www.ch-aviation.com/portal/news/60650-china-southern-places-order-for-b777-300er-max-8s

Friday, October 13, 2017

Austrian studying wide body replacement

The CEO of Austrian Airlines has officially announced that the carrier has begun studying placing a large order for wide body aircraft to fully replace its aging fleet of 6 B767-300ERs + Boeing 777-200ERs from 2019 onwards. The carrier needs newer, more efficient aircraft to offer a more competitive product offering as well as operational cost savings in the long run.

Link: http://atwonline.com/airframes/ceo-austrian-airlines-must-begin-replacing-long-haul-fleet-2019-20

Comments:

By the end of Q1 2018, OS shall have 12 wide body aircraft in its fleet i.e. 6 B772ERs + 6 B763ERs. Their B777s have 48J + 264Y seating 312 pax in total whilst the B763s have 225 (26J + 199Y). It is too small of a fleet to have 2 different variant types and from a commercial standpoint, the B787 family is the ideal logical replacement.

Please note that even though new aircraft are expensive, this is a long term (20 year) investment that OS shall be doing with these aircraft hence buying 7-10 year old A330s and B777s isn't the right thing to do. To cater for future growth, OS needs to order 15 WB aircraft i.e. B787s as follows:

5 B788s + 7 B789s + 3 options

If demand for certain routes sees a big upswing in the mid 2020s, then the 3 options should be converted to the larger B787-10. If not then the options should be for the B789 variant. The B788 would seat 30J + 198Y comfortably so 228 seats in total whilst the B789 would seat 291 i.e. 30J + 261Y. Do note that EL AL went for the exact same above fleet plan strategy for the 2020-2030 period i.e. replacing their B767s/B777s and B744s with all 3 B787 variant types. 

One also does not see the need for 17 E95s in their fleet. These planes should be gotten rid off by 2021 along with their 7 A319s. In turn 25 Bombardier C300s should be ordered to replace both types as the long term savings incurred by operating the CS3 versus these 2 types with 25 aircraft is massive. The NB fleet part i.e. 23 A320s + 6 A321s should all be replaced with 30 A321NEOs.

Therefore, the future fleet in an ideal commercial scenario for the 2020-2030 period for OS should look like this:

i. 15 B787s for WB seating between 220-290 pax
ii. 30 A321NEO for high density intra-EU flying seating 200 pax
iii. 25 C300 for medium demand destinations seating 135 pax and operating within a 5.5 hour flying time radius
iv. 18 Q400s (they already operate 18 of the type) seating 76 pax and operating with 1-2 hours flying time radius 

Total fleet size 88 aircraft

Thursday, October 12, 2017

Ethiopian increases Toronto flights

Ethiopian Airlines has officially announced that it has been awarded additional bilateral access to Canada and as a result of which will boost its services to YYZ-Toronto effective 02DEC17.

From 02DEC17 onwards, ET will increase its ADD-YYZ flights from the current 3 to 5 weekly using a B787 for all services.


Friday, October 6, 2017

PIA suspends New York JFK flights

PIA has officially announced via filing across major GDS systems, that will be sending all of its New York JFK bound flights effective 01NOV17 due to continued high losses amidst lower yields and increasing competition from the Middle East carriers. 

Currently, in S17 season, PIA flew 3 weekly KHI-LHE-MAN-JFK flights using a B777-200ER and demand from JFK to PAK in 2016 was as follows:

*Round trip pax*

LHE 101,000
KHI 62,000
ISB 43,000

Tuesday, October 3, 2017

Emirates increases Stockholm services

Emirates has officially announced that due to increasing demand for both passenger and cargo, it shall be boosting its services to ARN-Stockholm effective 08DEC17.

Current daily nonstop flights will be increased to 10 weekly using a B777-300ER with the 3 new services departing DXB at 1500 on Fri/Sat/Sun. 


Monday, October 2, 2017

Air Arabia reduces Bangladesh flights

Air Arabia has officially announced that it will be reducing its presence in Bangladesh from the on set of the IATA W17 season as follows:

DAC - frequencies reduced from 25 weekly to triple daily nonstop using an A320

CGP - frequencies reduced from 13 to 10 weekly nonstop flights using an A320

Sunday, October 1, 2017

Oman Air suspends Chittagong flights

Oman Air has officially announced via publishing on major GDS systems that it shall be exiting the Bangladeshi market totally effective 31OCT17.

This is as a result of their lone surviving Bangladeshi route i.e. Chittagong (CGP) being suspended from the above mentioned date. Currently, WY operates 5 weekly B738s nonstop from MCT to CGP. WY had already suspended DAC-MCT flights since May 2017.

The GCC carriers now remaining in CGP are Fly Dubai who fly a daily DXB-CGP service + 10 weekly Air Arabia who operate from SHJ. G9 actually is reducing CGP from 13 weekly to 10 weekly effective 01NOV. 




Saturday, September 30, 2017

China Airlines announces Ontario-Taipei nonstop


Taiwan's national carrier i.e. China Airlines based out of Taipei airport officially announced that will be officially launching new nonstop flights to Ontario, California (ONT) which is a suburb of Los Angeles effective April 2018. 

CI will be operating the new nonstop TPE-ONT flights 4 times per week using a B777-300ER after an intensive lobbying campaign by local Ontario officials desperate for a trans-pacific long haul link to cater for the huge Asian community residing in this part of the greater Los Angeles area. 

News link: http://www.dailybulletin.com/2017/09/29/china-airlines-announces-nonstop-weekly-flights-to-ontario-airport-in-spring-2018/

Thursday, September 21, 2017

Turkish Airlines orders 40 Boeing 787-9s


Turkish Airlines has officially announced that it has placed a US$ 11 billion order with Boeing for 40 B787-9s after a long process studying the Airbus A350-900, Boeing 747-8 and Airbus A380 aircraft.
These B789s will be initially used to replace TK's aging A330-200 fleet from 2023 onwards as the oldest A332s were delivered between 2005-06. 
Though no configuration layout has been revealed, it is expected that TK's B789s would seat 291 passengers in a 2 class layout i.e. 30J + 261Y. With this cabin configuration, it is also the ideal replacement aircraft (size and range wise) for its A333 fleet between 2025-28. 
The B789 can fly all of TK's current routes nonstop with a full payload of pax + cargo but for it to launch nonstop services to SYD/MEL, it will need to either order the Boeing 777-8X or have a less dense B789 cabin configuration (with more J class seats similar to what QF is going to use on PER-LHR effective March 2018).
Source: https://www.bloomberg.com/news/articles/2017-09-21/boeing-lands-11-billion-787-deal-from-resurgent-turkish-air






Comments:

This is a very smart decision made by TK as:

1. The B789 would likely seat 291 pax in a dual class layout i.e. 30J + 261Y thus enabling it to be used to replace both its 250 seater A332s and 289 seater A333s between 2023-2030. 

2. The B789 can operate all of TK's current long haul routes nonstop without any payload issues

3. It is cheaper to purchase versus the A359

4. By placing an initial order for 40 units, it has smartly locked in favorable pricing conditions as this aircraft will appreciate in value over time hence once it gets delivered, TK can engage in a sale-leaseback transaction which would have a decent cash profit margin for the carrier. 

5. Hopefully this would mean that their future WB fleet would revolve around 2 types only i.e. B777 and B787 rather than 3 i.e. with the A359 included as there is now no real need to order the A359 for them. Fleet standardization is a must which will enable them to save big time in cost savings over the long run. 

6. I am quite sure TK would have options for the larger B781 incorporated into this order in case they feel the need to upgrade for some high demand medium range flights. The B781 would likely seat 329 pax i.e. 30J + 299Y in a 2 class layout for TK (if ordered) so about 38 more seats than the B789 overall approximately.

For sure this has gained the Turkish Govt major brownie points with the Trump Administration for which they will be suitably rewarded through other means!

American Airlines A350-900 order problem?


American Airlines
CEO has officially stated that the airline is closely examining the need to have an order of 22 Airbus A350-900s incorporated into its fleet which it inherited after merging with US Airways whom had a fleet of 24 A330s which the A359s were destined to directly replace.


With a large fleet of Boeing 777s and B787s already in service, AA feels having a small sub fleet of A350s puts extra pressure on the entire system especially rotating them across its different hubs in USA. 

Comments:

In my view, there are two options here for AA to choose from:

1. Exchange 22 A359s for 44 A321NEOs 

2. Exchange 22 A359s for 25 A330-900NEOs

Both options mentioned above are good and have their own respective pros and cons. The safe bet would probably be option 1 as it can also opt for many A321neoLRs and base them out of MIA for medium demand LATAM routes where using a 763 isn't viable plus to fly PHL/BOS to U.K./Ireland year round and in the premium config boosting frequencies to LAX/SFO from these two markets along with MIA.


Option 1 allows mega cost savings over the long run as its wide body fleet would exclusively revolve around the B777 and B787 families. 

If Option 2 gets implemented, then AA should just base the aircraft out of MIA airport and use them on high demand flights year round to Europe and Latin America. 


United Airlines orders 45 Airbus A350-900s


United Airlines
has officially announced that it has re-negotiated its wide body order book with Airbus which originally stood at 35 Airbus A350-1000s. These aircraft were originally expected to replace their aging B747-400 fleet as well as compliment its Boeing 777-300ER on high demand long haul routes.


However, it has now decided to opt to exchange all 35 A351s for 45 Airbus A350-900s which in turn will be a direct replacement for a majority of its aging Boeing 777-200 fleet. Currently, UA operates 55 B772ERs + 19 B772As (used on high demand regional/domestic services only).  

Source: https://www.reuters.com/article/us-airbus-united/united-orders-more-airbus-a350s-but-drops-largest-model-idUSKCN1BH1P8


Gulf Air increases Istanbul and Moscow


Gulf Air
has officially announced that it will be increasing its services to Moscow and Istanbul from the on set of the IATA W17 season due to increased demand being witnessed on both routes.


IST - frequencies increased from 6 weekly to daily nonstop flights using an A320

DME - frequencies increased from 4 weekly to daily nonstop flights using an A320

Philippine Airlines announces USA 2018 expansion plan

Philippine Airlines CEO has officially announced plans for the carrier's North American expansion in 2018. The main highlights are as follows:

YYZ - 4 weekly nonstop flights shall be launched from Dec 2016 using a B77W

JFK - daily nonstop flights to be operated from June 2018 using an A359

SEA - new 4 weekly nonstop flights to be launched from Nov 2018

ORD - new 4 weekly flights via YVR to be operated from Summer 2018 using a B77W

IAH - new 3 weekly flights via YVR to be operated from Summer 2018 using a B77W

In addition to the above, PAL announced that some of its newly Airbus A321NEOLRs will be used to launch new nonstop flights from MNL to Mumbai, Delhi and Sapporo as they get delivered to the airline in due course.

Tuesday, September 12, 2017

Malaysia Airlines orders 8 Boeing 787-9s

Malaysia Airlines has officially announced that it has placed a landmark order with Boeing for the purchase of eight Boeing 787-9s to revitalize its aging long haul fleet. MH cited the excellent flexibility of this aircraft type which can fly to Western Europe nonstop from KUL airport without suffering any payload restriction. It even acknowledged its capability of operating nonstop LAX/SFO like UA/SQ do out of SIN if the need arose. 

MH placed this order by converting purchase rights for 16 B738MAXs into 8 B789s.

Link: http://boeing.mediaroom.com/2017-09-12-Boeing-Malaysia-Airlines-Sign-Memorandum-of-Understanding-for-16-Airplanes?sf113471564=1


Thursday, September 7, 2017

Lufthansa suspends Doha services

Lufthansa has officially disclosed via filing on major GDS systems that it shall be suspending its daily Doha bound services effective 29OCT17.

Currently, LH operates a daily FRA-DOH-FRA service using an A330-300 via KWI in both directions thus making it effectively a non competitive one stop service versus QR's double daily FRA-DOH on an A359. 

P2P demand in 2016 on DOH-FRA-DOH was 34,000 passengers.

Friday, September 1, 2017

Air Canada announces Vancouver expansion plan

Air Canada has officially unveiled major long haul expansion plans for its route network from the on set of the IATA Summer 2018 season. The main highlights are as follows:

CDG - new 4 weekly flights using a B787

ZRH - new 3 weekly flights using a B787

DEL - frequencies increased from 3 to 5 weekly using a B789

MEL - becomes a year round service operated 3 times per week 

LHR - frequencies increased from daily to double daily using a B787

Comments:

YVR-CDG/ZRH are well thought out new additions as in the summer season, the yields are high along with demand. In 2016, 85,000 P2P pax flew YVR-CDG v.v. and 44,000 flew YVR-ZRH v.v. 


Thursday, August 31, 2017

Cathay Pacific announces 3 new European routes

Cathay Pacific has officially announced that it will be embarking on a major European expansion from Summer 2018 onwards as the carrier looks to fly to niche markets where there is good P2P demand as well as feed to its Asian + Aussie network. It aims also to poach away market share from the Middle East and other Asian competitors especially for its HKG home market. 

The main highlights are as follows:

*All below flights to be exclusively operated by the A350-900 only

DUB - new 4 weekly flights from 27MAR

CPH - new 3 weekly flights from 02MAY

BRU - new 4 weekly flights from 02JUN

Qantas to suspend Dubai flights

Qantas has officially announced that it will be adjusting its long haul route network from the on set of the IATA S18 season as the carrier looks to streamline better its partnership with Emirates. The main highlights are as follows:

DXB - all flights to be suspended effective 28MAR

LHR - flights in S18 will be operated as daily B789 MEL-PER-LHR + daily SYD-SIN-LHR using an A380

SYD/SIN - frequencies increased to daily A380 + daily A330

MEL/SIN - frequencies increased from 10 weekly to daily A380 + daily A330

Monday, August 21, 2017

Cathay Pacific orders 32 Airbus A321NEOs

Cathay Pacific has officially announced that it has placed a new order with Airbus for 32 Airbus A321NEOs exclusively which are meant to replace its aging A320 family fleet at its subsidiary carrier Dragonair.

The latter currently operates 8 A321s + 15 A320s built in the late 1990s and is in need of replacement hence the placement of this order. 

The incremental order amount of 9 aircraft has been made to cater for growth into secondary cities in China, Thailand, India, Taiwan, Philippines and Vietnam where CX sees big opportunity to stimulate future demand as well as efficiently ward off threats stemming largely from mainland Chinese carriers.

Deliveries of the A321NEOs commence from 2020.  

Sunday, August 20, 2017

Delta announces Lagos-New York JFK nonstop


Delta Airlines has officially announced that it shall be expanding its presence in Africa by adjusting frequencies to Lagos, Nigeria effective 24MAR18.

DL revealed that it will be launching new 3 weekly nonstop flights from its secondary New York JFK hub to Lagos using an Airbus A330-200 with the below mentioned schedule:

Days - 1/3/5

DL 415 Dep JFK 2300 Arr LOS 1430+1
DL 416 Dep LOS 2330 Arr JFK 0530+1

As a result of the above, DL will be reducing its current daily ATL-LOS service to 4 times per week using an A332 too operated on Days 2/4/6/7. 

Comments:

DL are using the A332 (decent on board product) on JFK-LOS-JFK as a B763ER cannot operate it nonstop unless it takes a big payload penalty. 

P2P demand between LOS and JFK has grown significantly for the past few years despite the economic crisis in Nigeria which mainly effected IAH corporate travel as JFK is more of a VFR market segment. 

Past 3 years travel demand between LOS-JFK-LOS (P2P only) was as follows:

2014 - 72,000 pax
2015 - 94,000 pax
2016 - 115,000 pax

Houston on the other hand was as follows:

2014 - 77,000
2015 - 65,000
2016 - 71,000

Sunday, August 13, 2017

Jet Airways announces Delhi-Riyadh


India’s Jet Airways has officially revealed that it shall be expanding its services to Saudi Arabia with a new nonstop flight from Delhi to Riyadh. 

The new route will be flown on a daily basis using a B737-800 effective 29OCT17 scheduled as follows:

9W 216 Dep DEL 2300 Arr RUH 0135+
9W 215 Dep RUH 0310 Arr DEL 0945


In 2016, the P2P demand between DEL and RUH was 268,000 passengers. 

Saturday, August 12, 2017

Mumbai flights increased by Oman Air


Oman Air
has quietly revealed that it has increased its services to BOM-Mumbai, India after getting slot approval. Current double daily flights have been boosted to triple daily exclusively operated by a mix of B738s and B739s only. The new third daily flight is scheduled as follows:

Days – Daily

Aircraft – B738


WY 205 Dep MCT 2240 Arr BOM 0300+1
WY 206 Dep BOM 0405 Arr MCT 0515

Wednesday, August 9, 2017

British Airways reveals major USA 2018 expansion plan

British Airways announces major USA capacity from May 2018 as the carrier looks to strengthen its market share with AA in light of the impending threat it sees with the new AF DL VS KL joint venture.

The main highlights are as follows:

Chicago - newest A380 destination operated daily

Nashville - new 5 weekly B787 flights to be launched


PHX and PHL - frequencies to be increased to both cities from current daily to 10 weekly with all PHX flights in particular being exclusively operated by the B747-400 whilst PHL receives a daily B744 + 3 weekly B772ER

Saturday, August 5, 2017

Colombo and Dhaka increased by Qatar Airways


Qatar Airways has officially published for sale another round of capacity increases for both S17 and W17 seasons of which the main highlights are as follows:

CMB - originally it increased this route from 3 to 4 daily effective 01AUG, however from 01SEP onwards it further gets boosted to 5 daily using a variety of aircraft types

DAC - frequencies increased from 2 to 3 daily effective 01SEP i.e. double daily A330s + daily A320

PEW - capacity increased from daily A320 to daily A321 effective 01SEP

KHI - capacity increased to daily B77L + daily B788 from 01NOV

KRT - frequencies reduced from triple daily to double daily A330s since late July with an increased block time of 6:30 hours due to Saudi air space blockade 


Friday, August 4, 2017

How to fix South African Airways - my personal opinion


According to a recent BBC article (http://www.bbc.com/news/business-40813582), South African Airways is once again figuratively bankrupt and requests another major government bailout to ensure its short term survival. Over the past five years, it is the airline which has had the most number of CEO's leaving the post amidst a variety of allegations. Time after time all new business plans that have been submitted and approved either dont get implemented or get so half way through only.

Make no mistake about it, the South African market demand overall is high in volume domestically as well as for some international routes, both long haul and medium haul. However like majority of leisure, VFR oriented markets, yields have been a core problem in lieu of increasing competition especially on the long haul front to EU and Asia. A lot of their prime domestic + intra Africa routes make good money and see high yields but its the long haul operation that is a big financial killer for the airline especially so many destinations are still flown nonstop using the gas guzzling A346s/A343s.

Mentioned below is my personal input on how (if the Pretoria Govt wants to) can implement a quick fix solution for SAA which will cost some money in the short term but will have long term cash saving benefits considerably:

1. SAA's fleet of 8 A343s + 9 A346s need to be grounded by end of IATA W17 season i.e. 24MAR18.

2. A tender should be placed immediately to dry lease A332s and A333IGWs (only) to replace these 17 A340s asap. Sri Lankan Airlines has 4 relatively new and in good condition A333IGWs which are in a 2 class 297 seater configuration. These aircraft can operate on flights up to 10 hours nonstop from JNB airport. In addition, airlines such as Turkish too (who are in a bit of a cash crisis) wont mind dry leasing out few A333IGWs or A332s to generate guaranteed cash. Another airline that has spare wide body capacity available especially if the on going political crisis in the Gulf continues is Qatar Airways. They may have few A332s to dry lease out to SAA if an agreement can be reached.    

3. Currently, there are 2 destinations that are operated nonstop by SAA's A340 fleet which the A332/A333 cannot fly to i.e. JNB-JFK and JNB-HKG each respectively. 

For JFK, if a deal can be reached to lease in additional A330s to replace the gas guzzling A340 there is an easy solution as SAA should look to operate JFK via DKR on a daily basis using an A333. In total, the block time is 2 hours 10 minutes more round trip JNB-DKR-JFK v.v. versus JNB-JFK-JNB but the operational cost savings of using the A333 versus the A346 on a 30 hour plus route (round trip) is huge. In this manner, SAA would fly JNB-DKR-JFK daily with an A333 and its JNB-ACC-IAD 4 weekly + 3 weekly JNB-DKR-IAD would become JNB-ACC-IAD operated daily also using an A333. 

Approximately, an A346 costs US$ 526,000 at full costs to operate JNB-JFK-JNB whilst an A333 approximately would cost US$ 456,500 to operate JNB-DKR-JFK-DKR-JNB thus a daily savings of US$ 69,500 equating to US$ 25.36 million annually.

As far as HKG is concerned, its operated daily using an A343 with the flying block time being 13:05. Unfortunately, SAA needs to make the hard call and suspend flying to HKG for the foreseeable future as the A332/A333 cannot operate this route nonstop from JNB airport. There is no point operating one stop via MRU or any other point as it will result in a big competitive disadvantage hence until it can get its finances in order, SAA should look to code share with SQ and CX on the HKG-JNB-HKG sector. Sometimes, tough calls need to be made which SAA did in 2015 by suspending BOM, EZE and PEK so once again over here too, HKG needs to get the axe as there is no way the route can turn a net profit using an A343. 

4. Routes such as FRA and MUC which are 10:40 in flying time are just 10 minutes longer than JNB-GRU which is 10:30 and that is flown currently using an A333 so FRA and MUC too can become daily A333 services instead of costlier A346s (FRA) and A343s (MUC). Frequency reduction to MUC should also be implemented to save on costs i.e. from daily to 4 weekly maximum and only in peak winter season (DEC-FEB) when demand is ultra high should daily flights be operated.  

The costs saved by downgrading FRA from daily A346 to daily A333 is US$ 25.5 million + US$ 11.8 million for MUC from daily A343 to A333.

5. PER-JNB-PER is operated daily by an A343 however this route needs to be downgraded to an A332 as the A333 wont be able to operate with a full payload out of PER to JNB as the flying block time is 11:15. 

The costs saved by downgrading PER from daily A343 to daily A332 is US$ 18.47 million net.  

So in total this adds up to be US$ 81.13 million saved by downgrading flights from A340s to A330s on an annual basis !

6. In its short haul fleet, SAA for silly reasons operate both A320s and B738s on domestic + intra Africa routes. In any disciplined airline, fleet standardization is a key driver in reducing costs and increasing profits. Initially, SAA had B738s operating on its short/medium haul routes but then was forced into placing an order for A319s/A320s mysteriously which makes no commercial sense having two aircraft of the same type operating similar routes. Due to JNB's higher altitude, the B738 is a more stronger and capable aircraft versus the A320 especially if the flight time exceeds 4 hours. However considering that SAA's current narrow body mainline fleet has only 7 B738s versus 20 A319s/A320s (combined), it is best to focus it around the A320 family and sell its 7 B738s. In this way, if fleet standardization can be implemented, SAA's fleet would only consist of two types of aircraft i.e. A320 and A330 families which also have a cross crew qualification certification allowing pilots of both aircraft types to fly one or the other thus making it easy to roster and maintain across the board. 

7. SAA must lobby their local government to restrict access to the Middle East carriers into South Africa as they have taken away a lot of the market demand by dumping way too much capacity combined with offering sometimes predatory low fares on long haul market segments. For EK, SAA must lobby the Pretoria Government to restrict them to operate JNB on a double daily basis only + 11 weekly to CPT, daily to DUR and nothing more. EK currently operates 4 times daily to JNB and though it sees high S/F year round, its fares on long haul segments especially out of JNB are quite low in economy class. To CPT, EK operates triple daily which again is very excessive for a carrier that is heavily reliant on transfer traffic via DXB rather than P2P. 

8. If all of the above cannot be agreed upon and implemented by December 2017, then the South African government should not waste tax payer money keeping the airline afloat and should look to just shut it down and allow a foreign airline to launch a new privatized version of SAA and pay an annual royalty to the Pretoria Government thus generating guaranteed income for the state versus incurring massive losses year after year. A foreign carrier looking to invest in the South African marketplace must be allowed full independence and no government control. They must not be forced into taking on 100% of all of SAA's staff but rather only the most qualified and best fit to perform their job functions. 

9. If even point # 8 cannot be agreed upon by the Government then must look at the Swissair successful model of shutting down the airline and re-emerging under a new name with a clean balance sheet which has no legacy debt included in it. In addition, the newly emerged airline should not be allowed to have in its fleet the A340s under any circumstances. For this to take place, the government must take the punt and absorb all of SAA's historical debt and losses.


Thursday, August 3, 2017

Malaysia Airlines announces Asia expansion


Malaysia Airlines has officially announced plans to boost its capacity offering on key markets where it has performed well over the past year along with seeing overall demand too grow. The main highlights effective from the on set of the IATA W17 season are as follows:

ICN - frequencies increased from daily to 10 weekly nonstop operated exclusively by A333s

BOM - frequencies increased from double daily to 17 weekly i.e. 5 weekly A333s + 12 weekly B738s

TPE - frequencies increased from daily to 11 weekly nonstop operated exclusively by B738s

DEL - frequencies increased from daily to 10 weekly nonstop operated by a mix of B738s (4 wk) and A333s (6 wk)

Tuesday, August 1, 2017

Vietnam expansion revealed by Qatar Airways


Qatar Airways
has officially announced major expansion plans for Vietnam as it looks to adequately feed its European flights with volume based demand destinations.


Effective 01JAN18, frequencies to Hanoi shall be boosted from daily to double daily flights exclusively operated by the B777-300ER. The existing daily service via Bangkok shall continue to operate whilst the second daily will be flown as a nonstop terminator. 

From the same above mentioned date onward, Ho Chi Minh City will also be increased from daily A332 to 10 weekly nonstop flights using the same aircraft type. 


Monday, July 31, 2017

Qatar Airways Airbus A350-1000 configuration - my brief analysis

The Airbus A350-1000 configuration of Qatar Airways has been officially disclosed today by Australian Business Traveler magazine stating that the aircraft will seat 327 passengers in a two class layout.

The cabin break down shall see 46 business class Q Suite seats + 281 in economy.

In total, QR ordered 37 A351s from Airbus.

Analysis:

The configuration chosen is a good one as it only has 8 less seats than its B77Ws but operational cost wise it is cheaper to fly by a decent margin. 

One would deploy the first 2.5 A351s to JFK (QR 701/702) daily replacing the B77W currently flown on this particular rotation as that would enable JFK to become a double daily A350 service as QR 703/704 is already flown by an A359. In this manner, it is easier for crew rostering to also plan accordingly for this sector.

The next 2.5 aircraft, one would use to replace the current B77W on DOH-IAD which is flown daily followed by 1 A351 to replace the B77W on 3 weekly DOH-YUL.

So in total the first 6 A351s could be used on daily JFK + daily IAD + 3 weekly YUL. The B77Ws coming out of these 3 markets, can be used to replace the gas guzzling 4 A346s from the fleet entirely which would be an additional cost saving.

Unfortunately, there is no chance that the A351 would be able to operate DOH-MIA in any season.

As far as having a separate high density configuration is concerned (like they have on their B77W fleet), the A351 with 24J class seats would likely seat 370 pax in a 2 class HD layout versus 380 on their current B77W (HD). This aircraft configuration (370 seater A351) is ideal for CMB, CGK, BKK and MNL etc.

Saturday, July 22, 2017

Thai Airways announces Vienna nonstop

Thai Airways has officially announced that it will be launching new nonstop services to VIE-Vienna, Austria effective 16NOV17. Flights shall be operated 4 times per week using a 292 seater B777-200ER. 

The schedule is as follows:

Days: 1/4/6/7

TG 936 Dep BKK 0130 Arr VIE 0700
TG 937 Dep VIE 1330 Arr BKK 0520+1

In 2016, the P2P demand between BKK and VIE was 114,000 pax and 3 airlines operate this sector nonstop i.e. Austrian, Eva Air and now Thai Airways.