- WestJet and Emirates have signed a cooperation agreement allowing seamless connections between WestJet flights to Toronto and Emirates flights from Toronto to Dubai. Bags will be transferred.
- The deal comes after Emirates was refused additional landing rights in Canada last year due to government policy restricting Emirates.
- The partnership will give travelers easier access to Emirates' global network of destinations through connections on WestJet flights.
1. NEWSWATCH
30th September 2011
Volume 11; Issue 37
In this Issue:
Lufthansa Orders 12 New Aircraft to Meet
Soaring Demand
Lufthansa orders
12 new aircraft to The Board members at Lufthansa have approved the order
meet soaring of 12 new aircraft as the airline seeks to meet soaring
demand demand.
India Leads EU Of the aircraft, two Airbus A380s and one Airbus A330-300
Levy on Airlines will be deployed for Lufthansa German Airlines on long-
haul routes for an interim period.
O'Leary claims BA
The decision was taken by the Board at its meeting earlier.
group has sights on
stake in Aer Lingus There are also plans to order four Airbus A320s for
Lufthansa German Airlines.
Boeing’s first 787
In addition, five new Embraer 195s will augment the
Dreamliner lands
in Tokyo Lufthansa Regional fleet.
The new, modern, fuel-efficient aircraft will be delivered
Finnair To Slash to the Group in stages from 2012.
155 Jobs As It Cuts
Costs The order has a list-price value of about one billion euros.
Commenting on the decision, Lufthansa Chief Executive
WestJet, Emirates
sign co-operation Christoph Franz, said: “The moderate expansion of
pact Lufthansa’s passenger fleet will serve primarily to ensure
that we can meet short-term requirements while
Tajikistan’s Somon modernising and consolidating our European fleet until
Air Receives Its such time as new aircraft technologies are available.
First Boeing 737-
900ER “It is the latest step in our ongoing strategy of deploying a
modern fleet in terms of fuel efficiency, operating costs,
IBA Group News noise and emissions.
“At the same time, the additional order for the Airbus
A380 and A330 will underpin our plans on long-haul routes
in the medium term.
“Along with the aircraft we have already ordered, which
will join our fleet over the next few years, it will increase
our ability to take targeted action and respond flexibly to
IBA Group Ltd. fluctuations in demand or market changes.”
IBA House
7 The Crescent The order will be financed from the group’s cash reserves
Leatherhead, Surrey
KT22 8DY or from external sources.
United Kingdom
Tel: +44 (0) 1372 224488
Lufthansa was recently recognised as Europe’s Leading
Fax: +44 (0) 1372 224489 Airline by the prestigious World Travel Awards.
www.ibagroup.com
Source: breakingtravelnews.com – 30th September 2011
Page 1
2. NEWSWATCH
30th September 2011
Volume 11; Issue 37
India Leads EU Levy on Airlines
India has gathered with more than 30 nations to create a
strategy to oppose the European Union’s Emissions Trading
Scheme (EU ETS), which will begin imposing charges on
carriers that fly into the 27 member states at the turn of the
year. Indian civil aviation minister Vayalar Ravi questioned
how the EU can dictate terms to other nations. He also
questioned why everyone would simply accept that.
The EU made the decision in 2008 that airlines should become
part of its ETS after discharges in Europe grew twice over in 20
years. It says emissions from international carriers now IBA’s Comment:
account for 2%-3% of global greenhouse gas discharges. The “The ETS has
programme already covers more than 11,000 power stations met with a high
and factories located within the EU.
level of
Airlines that fly into the EU will be made to purchase carbon
opposition from
permits from January 2012 if they exceed the emission caps
set by the group of member states. Under the scheme, 85% of IATA and some
the emission cap for airlines will be allocated free, and the on-European
balance will be auctioned next year. These benchmarks were countries. It is
set this week. European Commission director-general for
surprising that
climate Jos Delbeke says the cost to meet emissions targets
could increase airfares for transatlantic services by between this opposition
€2 and €12. has been raised
Measures by the EU to impose the carbon caps have garnered so late. The ETS
protests from airline groups in the US, China, Russia and the guidelines have
Middle East. In June, the China Air Transport Association said
been in the
that the plan is illegal and unreasonable. The International Air
Transport Association (IATA) said earlier this week that it’s the pipeline for
EU’s plan to break international law and attack the some time now”
sovereignty of other nations. Chief executive Tony Tyler said – David Rushe
that the legislation will add $1.2 billion to airline costs next
year. The organisation has forecasted carriers to make only a
combined $4.9 billion profit for the year.
Over 30 members of the International Civil Aviation
Organization (ICAO) met in New Delhi this week to discuss the
EU ETS. The group has 190 members states, including China
and the US. Ravi said that his country’s aviation ministry was
hosting the two-day meeting, but he didn’t name any of the
nations that were to participate. He has called the ETS a
penalty on all foreign airlines operating to Europe. The
Page 2
3. NEWSWATCH
30th September 2011
Volume 11; Issue 37
aviation industry is growing in India, and they can’t be
penalised for that, he added.
Binit Somaia, the director of South Asia for the Centre for Asia
Pacific Aviation (CAPA), said that, by making the ETS apply to
non-EU carriers, there is a feeling that the EU is stepping over
its authority. Retribution may take the form of equivalent
retaliation of taxes, restrictions on traffic rights for European
airlines and an impact on European planemakers.
Source: news.carrentals.co.uk – 30th September 2011
O'Leary claims BA group has sights on stake in
Aer Lingus IBA’s Comment:
“A BA stake in
The owner of British Airways may snap up the Irish
government's quarter stake in Aer Lingus, according to rival Aer Lingus has
airline boss Michael O'Leary. been long
rumoured and
O'Leary, chief executive of Ryanair, said International Airlines
Group, which owns BA and Spanish flag carrier Iberia, appeared would make
to be the most likely buyer of Dublin's 25 per cent stake in the sense from BA’s
Irish airline. point of view,
Ryanair, which owns 29 per cent of its rival, said IAG would, particularly
however, only buy Aer Lingus if the company's board made given Aer
clear it was not liable for a €400 million (£347.9m) pension Lingus’ strong
scheme deficit for Aer Lingus staff. branding in the
IAG plans to expand by buying other carriers, but it has not UK and its
publicly expressed interest in buying the Aer Lingus stake and dominance of
declined to elaborate on O'Leary's comments. An IAG the London
spokeswoman said: "We're not really commenting on it." Heathrow-Dublin
Aer Lingus is understood to be considering joining a route – one of
transatlantic airline venture, such as those involving BA, the world’s
Lufthansa and Air France-KLM, in the next few years after busiest – which
dropping plans to become a member of a global airline alliance has historically
such as Star Alliance. But Aer Lingus has warned the
provided
government against selling its stake to a larger rival, saying this
connections to
could undermine it by damaging existing partnerships.
BA long haul
Ireland's transport minister was quoted as saying last week that
flights for Irish
the government had received expressions of interest from
passengers”
airlines and investment firms in its stake in the former state
carrier. – David Rushe
Page 3
4. NEWSWATCH
30th September 2011
Volume 11; Issue 37
Chief Executive Christoph Mueller said Aer Lingus would prefer
a sale to an institutional investor as it would allow it to stay
outside major alliances and keep several bilateral deals.
Ryanair has twice had takeover bids for Aer Lingus rebuffed and
says it would be ready to sell its 30 per cent stake, allowing
another airline to take majority control.
Dublin has not yet decided whether to sell its stake, but it has
hinted it is open to a sale.
Source: Philip Waller, The Scotsman – 30th September 2011
Boeing’s first 787 Dreamliner lands in Tokyo
The first 787 Dreamliner to go into service landed in Japan
yesterday, greeted by media, excited plane spotters and high “Shinichiro Ito,
hopes that Boeing’s gamble on a mid-sized, lightweight aircraft
will pay off. president and
The plane — painted in the blue and white All Nippon Airways CEO of ANA, who
livery with red highlights — touched down at Tokyo’s Haneda travelled on the
airport shortly after 9:00 am (0000 GMT), three years after it
aircraft from the
was originally promised to ANA.
US after
The delivery comes after a string of technical mishaps and
delays that have cost US-based Boeing billions of dollars in lost receiving it from
or cancelled orders and seen it give ground to fierce rival Boeing, declared
Airbus.
himself
But Shinichiro Ito, president and CEO of ANA, who travelled on
the aircraft from the US after receiving it from Boeing, “delighted” with
declared himself “delighted” with “the aircraft’s first the aircraft’s
touchdown... after a trouble-free flight”.
first
Boeing says the twin-aisle 787’s construction, partly from
touchdown...
lightweight composite materials, means it consumes 20 per
cent less fuel than comparable planes, an attractive after a “trouble-
proposition for airlines facing soaring fuel costs. The company free flight.”
has also been touting the larger windows, bigger luggage
storage bins and greater cabin humidity than conventional jets,
a factor it says will reduce passenger fatigue.
Page 4
5. NEWSWATCH
30th September 2011
Volume 11; Issue 37
“It is an honour to have participated in an historic programme
for ANA and I have been extremely moved,” pilot Hideaki
Hayakawa told a news conference following the arrival.
“I feel there is a potential that the aircraft will make changes
in the aviation industry,” Hayakawa said, citing its fuel
economy, cost performance and comfort.
The windows are 30 per cent larger than those on the similar-
sized Boeing 767 and have an electric sunshade function that
enables passengers to control the amount of sunlight coming in
at the touch of a button.
One of the plane’s more striking features are the toilets which “The mid-sized,
are equipped with electric seats with a bidet function long-haul plane
commonly found across Japan, but not usually on international
— which has an
flights.
average list
“The bidet toilets are actually an option for ANA. But this is
something that obviously Japanese customers are used to price of $202
having at their home,” said Rob Henderson, communications million — is
director at Boeing Japan.
crucial to the
“So I suppose what we could say is that flying in the air is now
an experience that’s much closer to their homes than it would company’s
have been before,” Henderson said. future. It is the
The 787 represents a big bet by Chicago-based aerospace and firm’s first new
defence giant Boeing on cutting-edge technology and materials
for commercial aircraft. design in more
The mid-sized, long-haul plane — which has an average list than a decade,
price of $202 million — is crucial to the company’s future. It is drawing on huge
the firm’s first new design in more than a decade, drawing on
advances in
huge advances in aviation technology.
aviation
With seating for up to 330 passengers, the 787 is Boeing’s
gamble that airlines will demand mid-size aircraft, rather than technology.”
planes in the category of the mammoth A380, Airbus’s star.
Its development has been far from smooth — ANA had originally
been told to expect the first of its 55 ordered planes in early
2008.
But Boeing says that by the end of July this year it had 827 of
the new aircraft on order from dozens of carriers and leasing
companies around the world.
ANA president Ito said the new fleet of 787s will play a “key
part” in his plans for international expansion.
Page 5
6. NEWSWATCH
30th September 2011
Volume 11; Issue 37
The Japanese carrier is planning to begin the world’s first
commercial 787 service on the Tokyo to Hong Kong route in
October, followed by regular flights to Beijing and Frankfurt.
ANA, in common with other high-end carriers, is facing
increasing competition from budget airlines and is banking on
the 787 to boost demand and cut costs.
Source: main.omanobserver.om – 29th September 2011
Finnair To Slash 155 Jobs As It Cuts Costs
Finnair said yesterday it will lay off 155 more workers as it
streamlines operations to cut costs and retain its competitive
edge.
The layoffs will mainly be in support functions and the
marketing and distribution sectors, the airline said.
CEO Mika Vehvilainen said it was necessary to increase
efficiency as "Finnair simply has to change to be able to meet
the increasingly tougher competition and take our share of “Finnair simply
market growth." has to change to
Finnair's share price was down slightly, closing at €2.98 ($4.06) be able to meet
on the Helsinki Stock Exchange.
the increasingly
In March, the national carrier announced 450 layoffs in
technical services, and the transfer of dozens of other jobs as it tougher
outsourced services. competition and
Finnair has been struggling to cut costs amid declining demand, take our share of
competition from budget airlines and overcapacity in the
market growth.”
European airline sector. It has laid off hundreds of workers and
last year was plagued by several strikes, including by cabin - Mika
crews, that cost it more than €25 million in lost earnings. Vehvilainen
It also doubled an annual savings program to €200 million with
most cuts aimed at personnel costs.
Last month, Finnair reported a second-quarter loss of €23
million and announced a new savings target of €140 million
($191 million) by 2014. It said that profitability had not
matched expectations, citing increased competition from
budget airlines as "more efficient business models" had entered
the market.
Page 6
7. NEWSWATCH
30th September 2011
Volume 11; Issue 37
Finnair PLC, which is 56 percent government-owned, flies to
about 50 destinations with a fleet of 65 aircraft. It employs
7,500 people — down from 7,600 a year earlier.
Source: The Associated Press – 29th September 2011
WestJet, Emirates sign co-operation pact
On Thursday, Emirates said its new “interline” agreement
paves the way for consumers departing on a WestJet flight for
Toronto to more easily catch Emirates at Pearson International
Airport. Bags will be transferred for Dubai-bound travellers
making such bookings.
The deal comes a year after Emirates lost a bid to expand on its “Emirates’
own in Canada because of Ottawa’s refusal to grant new
landing rights. Transport Canada has defended the federal partnership with
policy to restrict Emirates, arguing that there is sufficient WestJet will
passenger seat capacity already between the United Arab
allow travellers
Emirates and Canada.
to explore our
“Emirates’ partnership with WestJet will allow travellers to
explore our vast network of diverse and remarkable vast network of
destinations with added ease and seamless connections,” diverse and
Emirates Canadian manager Don McWilliam said in a statement.
remarkable
Emirates, owned by the Dubai government and Calgary-based
WestJet are independent carriers that don’t belong to an destinations with
airline alliance. Air Canada and Germany’s Lufthansa are part added ease and
of the Star Alliance, which competes against Emirates for
transatlantic traffic. seamless
Emirates and the UAE feuded last year with Air Canada and connections” -
Ottawa over the Dubai airline’s quest to gain more access to Don McWilliam
Canada. The foreign carrier operates three round-trips a week
between Toronto and Dubai, but wants to boost its Pearson
schedule to a minimum of daily service, as well as target
Calgary and Vancouver in the long term as it expands in North
America. Earlier this week, Emirates said it plans to start daily
service to Dubai from Dallas in February and from Seattle in
March.
Page 7
8. NEWSWATCH
30th September 2011
Volume 11; Issue 37
WestJet and Emirates said their commercial deal means that
consumers will be able to make reservations more easily by
calling their travel agent or securing a single booking through
Emirates instead of separate itineraries.
“The new arrangement makes global travel more accessible for
outbound passengers who can now connect to the Emirates
network via WestJet, travelling to Dubai and beyond to any of
the 114 destinations that Emirates flies,” the carriers said. “The new
Consumers can also book through Emirates for flights from arrangement
Dubai to connect to WestJet’s Canadian network. makes global
WestJet noted that passengers will need to take the train at travel more
Pearson between its Terminal 3 and Emirates at Terminal 1.
accessible for
West Jet’s other interline pacts include those from the
Oneworld alliance (British Airways, Qantas, Japan Airlines and outbound
Dragonair), SkyTeam (Air France, Delta Air Lines, China passengers who
Airlines, China Eastern, Alitalia and Korean Air) and
can now connect
independent carrier El Al Israel.
The Calgary carrier has forged even closer partnerships through to the Emirates
“code-sharing” deals with two Oneworld members, American network via
Airlines and Cathay Pacific, and as of this week, SkyTeam’s
WestJet,
KLM.
travelling to
Ottawa refused demands by Emirates and Abu Dhabi-based
Etihad Airways for new landing rights at Pearson last October. Dubai and
The UAE responded by ousting Canadian soldiers in November beyond to any of
from Camp Mirage, a staging base near Dubai that had been
used for nine years to supply the Afghanistan war. the 114
Last December, the UAE imposed visa fees of up to $1,000 on destinations that
Canadian visitors, further escalating tensions between Canada Emirates flies”
and the Arab country.
Air Canada and Lufthansa are seeking to protect their Frankfurt
hub, complaining that Emirates is unfairly siphoning off
lucrative international traffic by funnelling passengers through
Dubai and transferring them to destinations such as India and
China.
Source: Brent Jang, theglobeandmail.com – 29th September
2011
Page 8
9. NEWSWATCH
30th September 2011
Volume 11; Issue 37
Tajikistan’s Somon Air Receives Its First
Boeing 737-900ER
Boeing has delivered Tajikistan-based Somon Air’s first 737-
900ER, the carrier becoming in the process the first Central
Asian carrier to operate an aircraft featuring the new Boeing
Sky Interior.
The Boeing 737-900ER delivery also represents Somon Air’s first
direct purchase of a 737.
“This new interior will set Somon Air apart from other regional
operators by bringing a new, unmatched flying experience to
our valued customers,” says Jamshed Rahmonberdiev, chief
executive officer of Somon Capital, which owns Somon Air.
“Reliability and fuel efficiency are key considerations and the IBA’s Comment:
737-900ER will contribute to our financial performance as well
“The operator
as help us maintain our high standards of safety in accordance
with international air transportation standards.” base of the 737-
“We congratulate Somon Air on becoming the first carrier in 900ER continues
Central Asia to offer the enhanced 737 cabin experience to its to grow in what
passengers,” says Marty Bentrott, Boeing Commercial Airplanes’
vice president of sales for Middle East, Russia and Central Asia. has been a
“We look forward to playing a role in Somon’s future as it strong 12
continues to expand its network.”
months for the
The Boeing 737-900ER is the newest member of the Next-
aircraft. It can
Generation 737 family and is also the highest capacity, longest-
range aircraft in Boeing’s single-aisle fleet. The 737 Boeing Sky now be seen as
Interior improves the passenger experience by providing new the second most
overhead bins, LED lighting, new designs for window reveals
and sculpted sidewalls. attractive 737NG
As part of Boeing’s Humanitarian Delivery Flights program, asset after the
Boeing partnered with Somon Air, the U.S. Department of 737-800”
State’s Humanitarian Program and Project HOPE to transport
medical supplies to Tajikistan’s capital Dushanbe. – David Rushe
The relief shipment of 2,852 pounds of medical supplies will
improve the quality of medical care for the less-privileged in
Tajikistan and help alleviate the shortage of medicines needed
for oncology, psychiatric health and in the treatment of
infectious diseases, according to Boeing.
“Boeing, through its Global Corporate Citizenship (GCC)
organization, supports humanitarian efforts around the world in
partnership with non-governmental agencies and non-profits
like Project HOPE,” says Liz Warman, director of GCC for the
Page 9
10. NEWSWATCH
30th September 2011
Volume 11; Issue 37
Northwest Region. “Our Humanitarian Delivery Flights program
is another way we can continue leveraging our resources to
help those in need.”
Source: airlinesanddestinations.com – 28th September 2011
IBA Group News
Press Releases & Presentations can be viewed in the News & Views section of our website, www.ibagroup.com
Conference Dates
5th – 6th October 2011 – UBM Aviation, Aircraft & Engine Finance & Leasing USA Conference, Chicago – Phil Seymour
will be speaking
31st October – 2nd November 2011 – Euromoney Asia Pacific School of International Aviation Finance, Hong Kong –
Stuart Hatcher will be presenting
3rd – 4th November – 12th Annual Asia Pacific AirFinance Conference – IBA will be speaking
7th - 8th November - Aircraft Asset Management Training Seminar, Dublin, Ireland
1st – 2nd December 2011 – Aviation Investors Summit, London – Phil Seymour and Owen Geach will be speaking
24th – 26th January 2012 – Euromoney 14th Annual International Aviation Finance Conference, Dublin – IBA is sponsoring
and will be speaking
Country Visits
- Owen Geach and Steve Fisk will be in Tokyo from 25th to 30th September 2011 - Please contact Owen Geach if you
would like to arrange a meeting: owen.geach@ibagroup.com
Phil Seymour’s Notes on the Week
Sometimes in life it is easy to be fast, and fast can be easy. It can also become confusing. Stelios appears to be
putting pressure on Easyjet, which he founded and still owns a considerable slice of, by threatening to create Fast
Jet. We await details but he cannot be serious surely? Is it not easier/cheaper to buy a few more shares and regain
control? Perhaps it is too complex an issue for me to comprehend.
Meanwhile, the first 787 really did deliver this week. It’s about 3 and a half years later than expected, and a little
bit heavier than envisaged. Let’s see if it delivers the passenger appeal that is promised. In summary, the delivery
was not fast or easy.
Publications – 2011 Editions
Please contact marketing@ibagroup.com for more information.
Aircraft Values Book Published in February 2011 & August 2011 £660 per year
Lease Rate Digest Published in February 2011 & August 2011 £360 per year
Engine Values Book Published in April 2011 £650 per year
Maintenance Cost Journal Published Quarterly £200 per year
“Newswatch” is a free weekly round-up collated by IBA Group Ltd.
Go to our website to find the last year editions of Newswatch archived.
To either SUBSCRIBE or UNSUBSCRIBE to this newsletter, please send an email to
marketing@ibagroup.com with your request.
The items in this document do not necessarily represent the opinion of IBA, and is intended to be for information purposes only.
Therefore, IBA assumes no responsibility or legal liability for any action taken, or not taken, by the addressee, or by any other
party, with regard to the information and views contained.
As a leading independent aviation consultancy, IBA Group Ltd. offers technical advice, commercial business
solutions & asset valuations for our worldwide client base.
Compiled & Edited by Mike Yeomans
www.ibagroup.com
Tel: +44 (0)1372 224488 Fax: +44 (0)1372 224489
Page 10
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