AVIATION

Etihad Airways, equity partners, report successful 2012

Etihad Airways heralded a successful first year of its equity alliance strategy, after a financial reporting season which saw each of the five airlines within the alliance ' airberlin, Air Seychelles, Virgin Australia, Aer Lingus and Etihad Airways, announce profitable performance.

The airlines' individual and collective results were boosted by a number of measures, including growing codeshare traffic between their networks, successful joint sales and marketing efforts, and a range of increasing business and cost synergies.

James Hogan, Etihad Airways' President and Chief Executive Officer, welcomed the success of the airlines.

He said, "2012 was a year in which the global economy remained very tough and in which airline industry profits as a whole shrank, for the second successive year."

"Yet each of the airlines in our equity alliance showed strong financial performance with each reporting a profit. That broadcasts two messages, loud and clear. First, we have invested in businesses and in management teams which have the vision and focus to outperform the wider industry. Second, the 'win-win' of more passengers and shared cost synergies that our alliance brings to each member is having a positive effect on performance." Etihad Airways' equity alliance model has seen increasing cooperation with each of its equity investment airlines.

It has codeshare relationships in place with each of the other four airlines, adding to its 38 other codeshares around the world, which together delivered more than 1.2 million passengers onto the virtual network. airberlin, Virgin Australia and Air Seychelles have also already launched new services to Abu Dhabi from their respective markets.

In 2012, Etihad Airways and its equity partners carried 76 per cent of all passengers at Abu Dhabi airport. With the addition of the airline's remaining codeshare partners, the combined passenger number amounted to 83 per cent.

Etihad Airways also initiated a range of business and cost synergy programs, covering fleet and engine acquisition, maintenance, recruitment and training, and joint marketing.

It is working with its equity alliance partners to develop 'centres of excellence' in which operational and commercial expertise is pooled to deliver best practice across the group.

Hogan said: "Because we've got 'skin in the game', we go much, much further than the legacy alliances. Our new model gives benefits on both sides of the equation - revenue and costs." James Rigney, Etihad Airways' Chief Financial Officer, said: "On revenues, we have seen major boosts to our own traffic from our equity alliance and our other codeshare partners, generating more than US$600 million in additional revenues to Etihad Airways alone during 2012. Of course, those are two-way streets, with all our partners being fed passengers from our growing global network.

"Where we really win is in the business and cost synergies."

In its latest business forecast, published in December 2012, IATA forecast an overall drop in global airline industry profits, from US$8.8 billion in 2011 to US$6.7 billion in 2012.

Each of the regions in which Etihad Airways equity alliance partners are based was also forecast to drop: Europe down from US$0.4 billion to US$0.0 billion; Asia-Pacific down from US$5.3 billion to US$3.0 billion; and the Middle East down from US$1.0 billion to US$0.8 billion.

"The overall economic outlook remains challenging in 2013. The strengths of our equity alliance point towards a positive year ahead, with many further benefits to be unlocked for each of us."

Emirates to start services to stockholmfrom September

Expanding its presence in Scandinavia, Emirates has announced that it will begin operating a daily flight to Stockholm, Sweden from September 2013.

Consistently voted in the world's top ten places to live and work, Stockholm is famous for offering visitors a vibrant and diverse cityscape. With strong bilateral trade links already in place, trade between the UAE and Sweden reached more than US$ 896 million in 2012, an increase of 4.3 percent from 2011.

A major North European economy with a strong Gross Domestic Product (GDP) Sweden is well known for iconic global brands such as IKEA, Volvo, and fashion clothing brand H&M. The 4,956 seats per week offered year-round by this new service are expected to further stimulate economic growth with key Swedish trading cities across the Far East and Australasia.

"Following our successful launch into Copenhagen, Denmark in 2011 we have been closely evaluating options for further expansion in Scandinavia.

Sweden, with its stable and growing economy is the perfect location to extend our regional presence," said Tim Clark, President Emirates Airline.

"This new service will provide the only scheduled direct passenger service between Dubai and Sweden, giving passengers out of Sweden much easier access to our international network including convenient connections to popular destinations such as, Thailand, where we currently operate six flights per day."

the daily service will offer three cabin classes with eight seats in First Class, 42 seats in Business Class and 304 seats in Economy Class. With over 130 destinations in its international network, Emirates customers in Sweden will benefit from convenient flight schedules that allow them to reach 40 destinations in the Far East, West Asia and Australasia.

Timing new services to connect seamlessly across our network is an integral part of our planning. Having carefully assessed traffic trends we have ensured that passengers from Sweden will be able to reach over 25 destinations across the Far East with minimal transit time in Dubai, something that is incredibly valuable to our customers," added Clark

Daimler makes 2.2 bn euros on sale of EADS stake

German automaker Daimler said Wednesday it pocketed 2.2 billion euros ($2.9 billion) from the sale of its remaining 7.5-percent stake in the European aerospace and defence group EADS.

“Daimler received gross proceeds of about 2.2 billion euros from the offering and, following the offering, does not hold any residual shares in EADS,” the group said in a statement.

As announced the day before, Daimler put up 61.1 million EADS shares for sale at 37 euros apiece.

EADS itself bought 16 million of the shares worth 600 million euros.

“Demand from institutional investors was strong,” Daimler said.

“We have concluded a very successful transaction, enabling us to fully participate in the positive development of the EADS share price,” said Daimler's financial chief Bodo Uebber.

“The proceeds from this sale are contributing positively to our free cash flow this year and in addition to the earnings from our ongoing businesses, will also support our policy of stable dividends,” Uebber said.

Daimler was a founding member of EADS, but has decided to sell its stake as part of a broader overhaul of EADS's shareholder structure, and to focus on the automaker's core activities.

It had already sold a stake of 7.5 percent in December for 1.66 billion euros. At an extraordinary meeting in Amsterdam last month, EADS shareholders approved sweeping reforms that weaken the influence of European governments and allow the aerospace giant to pursue its global ambitions unfettered.

Shareholders overwhelmingly adopted 15 proposed amendments in a major easing of state clout in the powerful group that controls the civilian airplane maker Airbus.

They notably dissolved a complicated shareholders pact that gave EADS's three founding states -- France, Germany and Spain -- veto rights on strategic decisions and rights to nominate board members.

AFP

Airbus breaks ground on US plant

Airbus broke ground on its first US assembly plant in Mobile, Alabama, hoping it will help carve a greater share in the US market for the European aircraft maker.

“It represents the real transformation of Airbus into a truly global company,” chief executive Fabrice Bregier said at a ceremony to mark the launch of construction. “We'll be manufacturing aircraft in Asia, in America, in Europe,” he said. “Thanks to Mobile, the sun will never set on Airbus.” The company, the key rival of US plane builder Boeing, expects to assemble its A319, A320 and A321 models in Mobile, with the first to be delivered in 2016. Last year Airbus said production would hit between 40 and 50 aircraft per year by 2018. A subsidiary of the European Aeronautic Defence and Space Company, Airbus is also hoping the expanded US presence will help it compete with Boeing for US defense-related business.

In 2011 Airbus won a $35 billion contract from the Pentagon for air-refuleing tankers, only to see it taken away as Boeing weighed in with political pressure and a revised bid.

“We'll be seen, I think, as a very good US citizen and it's always helpful when it deals with military contracts,” Bregier told CNBC television.

AFP

Aviation, strategic driver of African development

The International Air Transport Association (IATA) called on African governments to build stronger partnerships with industry to prioritize and promote aviation policies that will improve safety, develop a more competitive industry cost structure and advance liberalization.

Aviation is a key driver of Africa’s economy. Some 6.7 million African jobs and nearly $68 billion in African GDP are supported by air transport.

“The benefits of aviation connectivity go far beyond these figures. With a few kilometers of runway the most remote region can be connected to the global community. And that could mean access to vital sources of health care and emergency assistance; jobs selling products in global markets or welcoming tourists; or opportunities for education, exploring the world or creating business,” said Tony Tyler, IATA’s Director General and CEO.

Tyler’s comments were made at the opening of IATA’s Aviation Day Africa in Addis Ababa, Ethiopia.

Safety

Safety continues to be the biggest challenge for African aviation. In 2012 airlines averaged one hull loss for every five million flights on Western-built jet aircraft while the African average was one for every 270,000 flights.

However, there were no Western-built jet hull-losses among the 380+ airlines on the registry of the IATA Operational Safety Audit (IOSA), including 25 airlines in sub-Saharan Africa.

“World-class safety is possible in Africa. The safety record of African carriers on the IOSA registry tells us that the key to this is integrating the best safety practices of the industry as captured in the IOSA standards.

IATA is committed and actively engaged in helping to enhance African aviation’s safety performance to reach worldwide levels based on the African Strategic Improvement Action Plan,” said Tyler.

AFP