Aviation

Alarming drop of international traffic

Istanbul - The International Air Transport Association (IATA) announced global international traffic results for September. Passenger traffic declined 2.9% while cargo traffic dropped 7.7% compared to the same month in 2007. International load factors tumbled by 4.4 percentage points from August to 74.8% in September.

“The deterioration in traffic is alarmingly fast-paced and widespread. We have not seen such a decline in passenger traffic since SARS in 2003,” said Giovanni Bisignani, IATA’s Director General and CEO. “Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast US$5.2 billion for this year,” said Bisignani.

This is the first time since the SARS crisis in 2003 that global passenger traffic has shrunk. Capacity cuts were not able to keep pace with the fall in demand. September load factors in all regions fell compared to August.

For September, all major regions reported that passenger traffic shrank, with the exception of Latin American carriers which saw an increase of 1.7%. Even this is shockingly down from the 11.9% growth of the previous month.

Up to August, the drop in international passenger traffic was isolated to Asia Pacificcarriers.

The economies of the region’s two major growth markets - China and India - slowed and Japan saw industrial production drop 5% in August.

The sharp downturn in world trade disproportionately impacted Asia-Pacific carriers with a 6.8% drop in traffic in September.

After years of double-digit growth, passenger traffic by Middle Eastern carriers turned a negative 2.8%.

While the region’s oil-based economy remains strong, the large portion of transit traffic exposes the region’s carriers to the global economic weakness.

This is the worst decline since the technology bubble burst in 2001.

The most alarming drop was with Asia Pacific carriers - the largest players in the market. The region’s carriers reported a 10.6% decline.

“The industry crisis is deepening - along with the crisis in the global economy. Airlines, like all other businesses, are facing enormous challenges. But unlike other companies, they are denied some basic commercial freedoms - access to markets and to global capital - that could help them manage their business in this difficult time,” said Giovanni Bisignani.

Cathay Pacific denies a takeover of British Airways

Cathay Pacific denied market rumors that it was planning a takeover of British Airways.

“These rumors are unfounded. We have no plans to buy British Airways,” a Cathay spokeswoman said.

London-listed shares of British Airways rose yesterday on speculation that the firm was a takeover target. British Airways is in merger talks with Spanish national carrier Iberia, but company president Willie Walsh said in an interview in early October the move would take longer than expected due to the downturn in the aviation sector.

Cathay said last week its passenger numbers had dropped in September due to the global financial crisis, its first fall since 1993.

The airline said in its company newsletter earlier this month it had been “hit hard” by the economic downturn, with a significant drop in the number of first and business class travellers.

(Sun)

Indian Govt. announces relief package

The Government announced a relief package to airline industry where in it has allowed Indian carries to clear a total fuel bill outstanding of Rs. 2,962 crore in six equated monthly instalments to oil companies, according to reports.

“Cumulatively the dues of the airlines industry to the oil companies are about Rs. 2,500 - 2,800 crore (Rs. 25-28 billion). We have decided that this shall be cleared by the airlines in six-monthly instalments by March 2009,” Civil Aviation Minister Praful Patel told reporters after the meeting.

“One of the major issues was the dues that the airlines owed to oil public sector units, which needed to be resolved,” Petal added. Country’s airlines had a outstanding bill of Rs. 2,926 crore, out of which Rs. 2,131 crore was defaulted beyond credit period.

The carriers have also been given extension of their credit period to 90 days from the current 60 days. Additionally, the prices of aviation turbine fuel (ATF) will henceforth be revised every fortnight to adjust for the volatility being witnessed in international crude oil prices recently.

RTTNews

IATA blasts EU ETS decision

Istanbul - The International Air Transport Association (IATA) blasted the decision of the European Council of Justice and Home Affairs Ministers for rubber stamping - and sealing into law - Europe’s decision to bring air transport into the European Emissions Trading Scheme (ETS) from 2012.

“Crisis is not the time for rubber stamps. But that is exactly what the Council of Justice and Home Affairs Ministers used today - without a word of debate - to seal into law the EUR 3.5 billion cost of bringing airlines into the European ETS. It’s Brussels acting in a bubble - even in the middle of a global economic crisis,” said Giovanni Bisignani, IATA’s Director General and CEO.

“IATA does not oppose emissions trading. Positive economic measures are part of the industry’s four pillar strategy to address climate change. Along with economic measures, we need to improve efficiency with technology, operations and infrastructure.”

Thai Airways to push the cabin factor up

Bangkok, Oct 2 - Thai Airways International said on Thursday its third-quarter net loss would be smaller than the 9.25 billion baht ($273 million) loss it made in the previous quarter thanks to a reduction in costs.

The national carrier, due to announce quarterly results next month, expected a cabin factor - the percentage of seats sold - of just 70 percent in the July-September period, Executive Vice President Pandit Chanapai told reporters.

“As costs declined, the loss in the third quarter should be less than the second quarter’s,” Pandit said.

The airline cut back on flights during the quarter to cushion a drop in revenue attributed to political unrest in Thailand.

The carrier aimed to push the cabin factor up to 76 percent in the fourth quarter, given some improvement in the political situation and after it cut fuel surcharges by up to 30 percent for tickets from Oct. 1, Pandit said.

Fuel costs in general have fallen since mid-July.

Thai Airways’ cabin factor dropped to 75.1 percent in August from 81.6 percent a year earlier.

It has said it expected revenue this year to drop from the 174 billion baht it earned last year, and it expected the cabin factor to fall from an average 77 percent last year.

The airline, hit hard by surging fuel costs, reported a net loss of 7.04 billion baht in the first half of 2008, partly due to a foreign exchange loss, and it earned 105 billion baht in revenue.

Eight analysts polled by Reuters Estimates expected a 2008 net loss of 9.6 billion baht, against a net profit of 1.83 billion baht in 2007. Thai airways operates daily frequency to Colombo.

Reuters

Dragonair to Hanoi

Dragon air has announced that it will launch a new daily flight to Hanoi, the capital city of Vietnam, on 26 October 2008. Operated by an Airbus A320 aircraft, the new service will serve to strengthen business and tourism ties between Hong Kong and Vietnam.

An economic and cultural hub, Hanoi is also one of Vietnam’s most popular tourist destinations.

In addition to carrying passengers from Hong Kong, Dragonair expects to carry business and leisure travellers from North Asia and long-haul markets such as North America, Australia and New Zealand to and from Hanoi.

“We are excited about entering this dynamic market with its fast-growing economy and rapid growth in tourist traffic. Adding Hanoi as our latest destination represents another important step forward for Dragonair, helping to further expand our network of niche destinations in Asia,” said Dragonair Chief Executive Officer Kenny Tang.

“Using Hong Kong’s hub advantage, we can provide business and leisure travellers with excellent connections to Dragonair’s extensive network of destinations in Mainland China as well as the international network of our sister airline Cathay Pacific.” he added.

The schedule is designed to provide a variety of travel choices to optimise connectivity. Hanoi is the eighth new destination to be launched since Dragonair became part of the Cathay Pacific Group.