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Aviation

Traffic volumes improve

But costs rising:

The International Air Transport Association (IATA) announced the international scheduled traffic results for August. Compared to August 2008, passenger demand was down 1.1 percent, (an improvement compared to the 2.9 percent decline in July), and freight demand fell by 9.6 percent (also an improvement compared to the 11.3 percent drop in July).

Compared to August 2008, passenger load factors improved by 1.2 percentage points to 80.9 percent. Despite the tighter supply and demand conditions average fares continue to be depressed (-22 percent for premium seats and -18 percent for economy).

To match capacity with demand, airlines have reduced daily aircraft utilization in recent months. For example, average daily hours for the global Boeing 777 fleet dropped by 2.7 percent to 11.1 hours per day through the first eight months of the year. Lower utilization helps load factors, but spreading fixed asset costs over fewer hours in the air pushes up unit costs.

"Demand continues to improve, but profitability remains ever distant," said IATA's Director General and CEO Giovanni Bisignani. "Fares have stabilized, but at profitless levels. Meanwhile, cost pressures are mounting from reduced aircraft utilization and rising oil prices. The industry is not out of the woods yet," said Bisignani.

International passenger demand:

Compared to the low point of March 2009, seasonally adjusted passenger demand has improved by 6 percent, but traffic levels remain 5 percent below May 2008 when the fall in demand began. All regions, except the Middle East, saw improved demand conditions in August compared to July:

Asia-Pacific carriers recorded the most significant improvement moving from a -7.6 percent drop in July to -1.6 percent in August. European and North American carriers saw smaller improvements driven by exposure to more robust long-haul markets, rather than local economies. European carriers saw demand fall 2.8 percent compared to August 2008 (up from the -3.1 percent recorded for July). For North American carriers, the improvement was to -2.5 percent in August compared to -3.2 percent in July. Middle Eastern carriers were the only region to show year-on-year growth with demand expanding by 10.8 percent.

This is below the 13.2 percent recorded in July due to a distortion resulting from the earlier start of Ramadan compared with last year. Middle East carriers continue to win market share on long-haul travel via their expanding hubs. Latin American carriers saw demand improve to -2.3 percent in August (from -3.5 percent in July).

Passenger confidence, dampened by Influenza A(H1N1) is returning with the end of flu season in the southern hemisphere. African carriers showed the weakest demand at -4.9 percent in August. This was a slight improvement on the -5.5 percent recorded in July. For 2010 IATA's latest industry outlook anticipates average international passenger growth of just over 4.0 percent, compared to an expected full-year decline in 2009 of almost 5.0 percent.

Freight Demand:

Compared to the low point of December 2008, seasonally adjusted freight demand has improved by 12 percent, but remains exceptionally weak at 16 percent below April 2008 levels when the fall in demand began. All regions saw improved demand conditions in August compared to July: Latin American and the Middle Eastern carriers were the only regions to report growth of 3.9 percent and 3.0 percent.

Asia Pacific carriers , representing 44 percent of the global freight market, saw year-on-year demand improve marginally from -9.5 percent to -9.0 percent in August compared to July. North American carriers saw a slightly larger improvement from -14.6 percent in July to -12.1 percent in August.

This is similar to the -16.2 percent to -14.5 percent improvement registered by European carriers. African carriers saw the largest improvement - from -25.9 percent in July to -5.1 percent in August. The region's small market size exaggerates any shifts. For 2010 IATA's industry outlook anticipates average international freight growth of 5.5 percent, compared to an expected full-year decline in 2009002E


Singapore Airlines begins A380 service to Melbourne

The inaugural Singapore Airlines A380 service bound for Melbourne, the capital city of the Australian state of Victoria, took off from Singapore Changi Airport recently.


Singapore Airlines

With 453 customers on board the 471-seat double-decker aircraft, SQ227 departed Singapore at 2100hrs and arrived in Melbourne around 0545hrs 25 minutes ahead of schedule. The A380 will embark on its return journey with over 450 customers on board, departing Melbourne at 1550hrs and touching down in Singapore at 2140hrs.

Melbourne is the second Australian city and sixth city in Singapore Airlines' network to receive the A380. Singapore Airlines currently operates 21 weekly flights between Singapore and Melbourne, including the daily A380 service.

"The A380 continues to be extremely popular with our customers, as we see very positive booking response for our scheduled A380 services between Singapore and Melbourne. Since the start of its operation in October 2007, the A380 has carried more than 1.8 million customers on more than 4,600 commercial flights.

Our A380 customers tremendously enjoy the quiet cabin ambience, our

innovative inflight products and gracious service delivered by our cabin crew.

On routes with multiple daily frequencies operated with different aircraft, many of our customers will specifically choose the service that is operated by this clean and green superjumbo," said Singapore Airlines' Executive Vice President, Marketing and the Regions Huang Cheng Eng,.

The A380 features the exclusive Singapore Airlines Suites. A private sanctuary in the sky, each Suite comes with sliding doors and adjustable roller-blinds, and a luxurious leather seat upholstered by Italy's Poltrona Frau.


Japan's first passenger jet lands big order

An ambitious project to build Japan's first ever passenger jet received a huge boost Friday, landing a 100-plane order worth up to 40 billion dollars from a US regional airline.

The state-backed Mitsubishi Regional Jet (MRJ) is expected to take to the skies in 2014, carrying Japan's hopes of developing a full-fledged civil aviation industry with it.

Mitsubishi Heavy Industries, the company developing the 70-90 seat airliner, announced that it had signed a letter of intent with US carrier Trans States for 50 firm orders and the same number of options.

Mitsubishi declined to say how much the latest deal was worth, but the catalogue price of each jet is 400 million dollars.

It is the second order for the MRJ, which aims to meet growing demand for fuel-efficient planes.

The project officially got off the ground in 2008 after launch customer All Nippon Airways agreed to buy up to 25 of the jets, the first of which are scheduled to be delivered in early 2014.

But it quickly flew into turbulence as the global economic downturn unleashed a severe slump in the aviation industry that forced many carriers, including Japan Airlines, to slash jobs and routes to keep flying. "This is a very proud moment for us," said Hideo Egawa, president of Mitsubishi's aircraft division.

"The world has high expectations for the MRJ. This is especially true in the US," where airlines operate jets of up to 90 seats on many routes, Egawa said. The Mitsubishi jet project, which has financial backing from Toyota Motor, is competing with small aircraft produced by Canada's Bombardier and Brazil's Embraer, as well as jets designed by Russian and Chinese firms.

"Making a decision of this size in this economic situation was difficult, " said Richard Leach, president of Trans States Holdings.

"But when these aircraft come into the market it's at a time when there's going to be a need in the US to replace aircraft.

"We want to be at the front of the line before there starts to be a feeding frenzy on wanting this technology."

The group, based in Missouri, operates Trans States Airlines and GoJet Airlines, and operates feeder services for United Airlines and US Airways. It has been a customer advisor for Mitsubishi since the past five years.

AFP

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