June 2009 Archives

I logged on tonight to find the shocking news that Royal Jordanian chief executive Samer Majali has resigned from the carrier.

Flightglobal's David Kaminski has everything we know about the story here.

We'll drop Samer a line to find out why he's decided to call it a day from an airline he has led with great dignity and skill. Samer is one of the industry's good men - a real gentleman.

I doubt this is the last we will hear of Samer. He is a high-profile airline industry CEO and recently chaired the IATA annual meeting in Kuala Lumpur.

Good luck my friend, whatever and wherever you go.

Read our cover interview with Samer last year after he'd successfully steered the carrier through privatisation and into oneworld.

.

I'm finally feeling normal again after the Paris air show last week. I had the chance to sit down with International Aero Engines chief executive John Beatty who agreed to give his assessment  of the industry's resilience to survive the downturn. Take a look for yourself.

So which way does the wind blow on air taxes in Europe? Clickair chief executive Alex Cruz, who will head the newly merged Spanish carrier it is forming with Vueling, and Ryanair boss Michael O'Leary were both in London this week talking to the media. Both took the opportunity to hit out at the UK's £10 air passenger duty.

  "We are most concerned about the passenger taxes," said Cruz. The new Vueling will serve London from four Spanish cities and is switching all its London flights to Heathrow. "It puts a huge burden on our pricing. If we had lower taxes on the final purchasing price, I think we would be doing significantly better and we would be adding even more routes." Cruz said.

O'Leary's Ryanair meanwhile has frozen its growth at UK airports this year after slamming the UK's APD. "This year we expect to add 9 million passengers...but all that growth will be delivered in continental Europe," he said. "The UK Government is devestating UK traffic and tourism. We are calling again on the UK Government to scrap to the £10 APD and save the UK tourism industry from further collapses."

But after the Dutch Government earlier this year dropped controversial plans to implement an environment tax on flights, and amid other European schemes aimed boosting tourism, there were differing takes from the two on whether anything is likely to change with the UK APD.

Cruz was far from optimistic "We don't expect them to. Look at the Amsterdam experience, the tax was put in, then taken off. I think its a one-off. I just don't see a whole load of taxes being put in, then taken off. So I think we have to assume it will be there."

 

But O'Leary was altogether more optimistic.

"I think it will have to be scrapped. One of the few industries governments can control is tourism. It is an incredibly price-sensitive industry. Yet the numbers in UK tourism are in freefall. That could be reversed very quickly with a sensible tax cut."

And pointing to examples in Europe, in Spain, Greece and Belgium in addition to the Netherlands, he suggests: "What you see across Europe is Governments reducing taxes.

"I think the governments are beginning to realise that the theory behind a lot of these taxes, that passengers don't mind paying another £10 as it's not a lot, well the answer is yes they do."

 

 

 

 

 

All change at Kuwaiti budget carrier Jazeera Airways, with Stefan Pichler - until recently chief commercial officer at Australia's Virgin Blue - taking the helm as chief executive. He replaces former Sama chief Andrew Cowen in the role, who only joined Jazeera earlier this year.

Here's the story from our premium news service, Air Transport Intellligence

Jazeera chief Cowen leaves just months after joining
Alex Derber, London (24Jun09, 12:13 GMT, 93 words)

Source: Air Transport Intelligence news

And here's a link to a Sun Herald report on Pichler' s move

Ryanair chief Michael O'Leary was in London to talk to the media today, ostensibly to lay into the UK Government for its £10 air passenger duty and the associated impact on tourism - but as ever covering a range of topics. Highlights from this morning include:

 

• On UK air passenger duty - O'Leary called APD "tourism suicide", hit out at the UK and Ireland for both "following the visonary policy of taxing themselves out a recession" and said Ryanair would freeze its growth in the UK as a result. He says that while Ryanair will continue to grow "all of that growth is being directed at continental Europe", noting it would carry only 32 million passengers in the UK this year - down on 34 million the previous year. "Certainly for the rest of the year there will be no more growth in the UK," O'Leary says, adding that if the APD was lifted tomorrow, "we would increase capacity at about six UK airport bases and open one maybe two more UK bases";

 

•  On Stansted groundings - he says without a break in its costs at London Stansted the carrier would again ground aircraft at the London airport this winter;

 

• On check-in bags - says the carrier now has 70% passengers traveling with check-in bags only and predicted the carrier would around next spring be ready to look at 100% carry-on bags, with passengers bringing bags to be put in the hold and collected at the gate. "The strategy we have been on for the last 18 months is to move people away from checked in bags towards carry on bags," he says, noting the next development could come in the spring. "We'll still only let you on with one bag, the other two will be left on the steps and put in the hold. It will be much simpler. What it means is we will have got rid of all the expensive terminals and baggage halls, handlers and lost bags," he says. "People will wonder why they ever had a check-in bag ever before."; 

 

• On fuel hedging - says the airline, already 90% hedged for the first nine months of its current financial year, has not hedged further in the fourth quarter yet as he expects the oil price to drop again in the second half. "I still think the oil price will ease between now and the end of the year. I don't trust the green shoots of recovery";

 

• On the recession - does not see any imminent end to the recession. "I think there is at least a year to go. I think the US will emerge out in the first half of 2010, and European economies a year after, and the UK and Ireland some time after that," he says;

 

• On toilet charges/fat tax - insists the carrier continues to look at a charge for people to use the toilet onboard, but has given up on a mooted fat tax . Asked if he had more such schemes up his sleeve. "I hope so," but adding, "it will be hard to repeat the success of our pee for a pound and fat tax, but we'll do our level best".  

More shots from visiting the SuperJet here at Le Bourget today.

David Kaminski (right) of Air Transport Intelligence and Flightglobal and Barbara Cockburn of Flightglobal give a wave from the SuperJet cockpit. And (below) share a joke inside the aircraft. SuperJet had put in three rows of seats at the rear of the cabin.

David Kaminski does a piece to video for Flightglobal inside the SuperJet Cockpit.

 

Looking from the back of the prototype here at Paris towards the cockpit.

Those friendly folks at Sukhoi kindly let a few of us from Airline Business and Flightglobal take a peek inside the Sukhoi SuperJet here at Paris.

In this shot (below) you can see me, Mark Pilling, and the test equipment that lines the main fuselage. After the show the aircraft returns to Russia for more testing and then goes to Armenia for hot-and-high work.

The aircraft is the second flying prototype and takes part in the flying display every day.

Sukhoi has put a few rows of seats in this prototype to show visitors what a proper cabin configuration could look like. The company says the SuperJet is a regional aircraft with a mainline aircraft feel. It certainly is wide. The general layout is for 98-seats in a 3-2 configuration.

 

Grigory Feodorov of Sukhoi's Aircraft Technical Support is on hand to answer any questions about the SuperJet's test programme.

AirAsia's $2.4 billion order for 10 Airbus A350 XWBs could turn out to be the biggest order of the 2009 Paris Air Show.

In a sweltering press room, AirAsia boss Tony Fernandes stole the show and the hearts of Airbus. The Transport Ministers of France and Malaysia also turned up to show their support and EADS head Louis Gallois came along to join in the fun.

Above: A good old-fashioned scrum as Tony poses for snaps.

Above: Tony interviewed by Bloomberg with Airbus chief salesman John Leahy and EADS head Louis Gallois looking on.

In the press conference Tony thanked Leahy for his efforts in making the deal happen. "I don't know your title," said Tony, introducing Leahy. "Somebody who sells," joked Leahy.

  

Above: Gallois thanks Tony for the business.

Above: No ties gentleman? Well Tony never wears a tie. I gestured to Tom Enders about his lack of tie (not usual you see) and pointed to Tony. Enders nods. He has discarded his corporate emblem in true low-cost carrier fashion, in honour of one of his company's largest customers.

Speaking at the press conference, Enders said: "This order is proof there are some rays of sunshine in the market."

Superjet International chief executive Alessandro Franzoni had a big smile on his face an hour ago as we photographed him for Flight Daily News here at the show.

He was posing in front of the Sukhoi Superjet 100 in the static park shortly after signing a deal with Malev for the Hungarian carrier to take delivery of the 98-seater jet.

This is big news for Sukhoi as it seeks to establish the Russian-built aircraft in the world market.

As we waited for Franzoni Sukhoi's test pilots Leonid Chikunov (left) and Alexander Yablontsev were being interviewed by the Italian media.

To see more Paris Air Show coverage from Flightglobal follow this link.

 

The Airline Business editorial team has shfited its based of operations, along with the rest of the Flightglobal, Flight International and Air Transport Intelligence journalists, to Paris for this week's big air show here in the French capital.

Check out our live Paris Air Show feed here.

It's going to be a busy week as we've got some massive dailies papers to produce, but look out for the odd blog from the team as well when we get a spare moment.

I caught up briefly with AirAsia CEO and founder Tony Fernandes on the fringes of IATA's annual meeting last week and, being in Kuala Lumpur, he arranged for me to visit the airline's HQ and its training centre.

And what an impressive set-up it is. Opened in 2003, the AirAsia Training Academy is a joint venture operation with training and simulator outfit CAE.

It already houses four Airbus A320 full-flight simulators, a Boeing 737 device and an A330 (which I landed without smashing it too hard into the runway at KLIA).

AirAsia is also in talks to acquire up to another 10 simulators. "With our growing fleet here at AirAsia we need more sims. Today we are running 24/7," said Shamuz Jeyaseelan, operations supervisor at the Academy.

In this shot (below right), Shamuz sits at the controls of the A330 simulator alongside AirAsia public relations executive June Chow.

The academy also has a full size pool for water evacuation drills and intriguingly a "grooming room". Decked out like a theatre dressing room, this is where flight attendants are taught how to dress in AirAsia's bright red uniforms, and also pick up make-up and hair style tips.

AirAsia needs to have a large training regime for flight attendants as it fleet grows. It is currently training three batches of up to 25 people every month. Here are Shamuz and June on the catwak in the grooming room.

For more on AirAsia, read the Airline Business cover interview with Tony Fernandes.

As industry executives gather in Kuala Lumpur for the IATA AGM, which formally kicks off tomorrow, we have been gauging the mood.

So far we've caught up with IATA director general Giovanni Bisignani, Malaysia Airlines chief executive Idris Jala and Icelandair boss Birkir Gudnason. Watch our footage below and check out our full coverage here.

 

The latest issue of Emirates public affairs journal, Open Sky, features a strong defence of the long-term health of Dubai from airline CEO Tim Clark in the wake of recent negative publicity. Dubai's fortunes have come under microscope after being hard hit by the economic downturn.

Here's a little snapshot of Clark's view on Dubai.

"If you believed the recent rash of bad press and rumour mongering on Dubai you would
be forgiven for thinking our city is all but a ghost town; tumble weeds rolling down Sheikh
Zayed Road," says Clark. "I argue that much of the recent reporting and overly negative focus on Dubai is both disproportionate and often wildly inaccurate.

"As the manager of Dubai's largest airline, Emirates, I have a self interest in defending my town, but also more insight than Germaine Greer secured from her four-hour bus ride that formed the basis of her recent anti-Dubai column in the UK."

 

"Dubai is a city that has confounded many pundits before. They said two Gulf Wars would ruin our tourism sector. It didn't. SARS would decimate our trade with Asia. A short-lived blip. Middle East uncertainties would make the West wary of investment. They weren't. Today's headlines are just as negative and alarming. The facts, however, are different. Dubai's economy is diversified with a focus not just on construction but professional services, trade, tourism, finance and resources. The vast majority of Dubai's construction projects continue at speed; our beaches are clean and enjoyed by residents and visitors alike; our airport is still busy and total traffic has increased slightly; and our future remains fundamentally sound.

Clark does acknowledge Dubai faces challenges; liquidity remains tight, property excesses and speculation have left some exposed, while like other major cities such as London, New York and Beijing, there have been job losses and company failures.

"But which of these great cities will be the first to show signs of emerging from this funk? I would put my money on Dubai," says Clark. "Dubai has emerged as a regional economic and development miracle over the past two decades because it is a fundamentally optimistic society that delivers on what it promises, regardless of adversity or the critics."

There certainly seems to be a more positive sentiment in Dubai's financial markets right now, its financial index starting June with a 24-month high.

Meanwhile, here's a link to Germaine Greer's less than impressed take on Dubai architecture from back in February.

Kuala Lumpur (KL) is a vibrant, dynamic and colourful city which first appeared on the map in the mid-1800s. It is Malaysia's largest city and the youngest capital in Southeast Asia, reflected by the mix of old colonial-style buildings and modern skyscrapers. There is plenty to do and see in KL, so here are a handful of ideas:

(1) Iconic architecture
At 452m (1,483ft), the Petronas Twin Towers or KLCC are tallest twin buildings in the world. The octagonal buildings, which were opened in 1998, have 88-storeys marking the significance of the Chinese lucky number 8. Although the public can't visit the top, you can take a free 10-minute tour of the double-decker Skybridge at the 41st floor (170m above street level).Tickets are allocated from 08:30 on a first-come, first-served basis, so you'll need to get there early to grab one of the 800 time-allocated passes (closed Mondays).

Picture credit: Daniel Berthold

(2) Bird's eye view
While the Petronas Twin Towers score points for their sheer architectural beauty, you get the best views of the city from the observation deck at the KL Tower, or Menara Kuala Lumpur to use its official title. The KL Tower, which is a telecommunications and broadcasting hub, is 421m tall and appears to be taller than the Petronas Towers, because it is built on a hill. At one point it claimed to house the highest McDonald's in the world, but if you're after something a little more upmarket, it contains a revolving restaurant providing diners with stunning views of the city.

(3) Hustle bustle
If you're on the look out for gifts, crafts, art work and souvenirs, you should visit Central Market in China Town. Housed in an air-conditioned art deco building, the market is located along Jalan Hang Kasturi, a few minutes away from Petaling Street. It has been classified as a heritage site and it is a landmark for Malaysian culture, packed with a wide variety of Malaysian arts and crafts, including textiles, sculptures and handmade jewellery. Keep an eye out for demonstrations and performances, which include martial arts, music and dance performances.

(4) China Town at night
Heighten your senses with a stroll through China town, which is based in Petaling Street - a former tapioca producing suburb. Take an evening stroll through the hive of vibrant activity at the night market, which has an array of colourful sights, stalls, restaurants and no shortage of opportunities to hone your haggling skills. It's also a great place to sample local fruits and food.

(5) Local tastes
Check out our previous blog on must-try local cuisine, which was compiled with the help of Malaysia Airlines and their Twitter followers. Other recommendations include Restoran Rebung, owned by a celebrity TV chef and Malaysia's first astronaut (when Malaysia bought Sukhoi jets from Russia, part of the deal was that Russia would put a Malaysian in space). This vibrantly decorated restaurant does very good Malay food and is set in a house in Bangsar, one of KL's most popular bar and restaurant areas. Another tip is the Crocodile Farm Seafood Village Restaurant, a quirky eatery which is a great choice for Cantonese seafood cuisine. It has a large wooden deck where you can sit overlooking what seems to be a round lake, but is an old open cut tin mine which has filled with water. Although not an actual crocodile farm, you can idle away the hours watching the fish and turtles (including some liberated ex-pets).

(6) KL take-away
For a real taste of local street food, head to one of the many bustling evening hawker stalls. Hang out with the locals on rickety chairs and tables and sample some very affordable dishes. There are around 50,000 stalls so you'll be spoiled for choice. The recommended food markets, where many are located, are around Jalan Alor (renowned for Chinese dishes); Bangsar Baru Hawker Stalls (good mix); Jalan Masjid India (mainly Indian) and Merdeka Square Hawker Stalls, just behind St Mary's Cathedral, (a wide variety of Asian food).

(7) A touch of tranquillity
Taman Tasik Perdana or the Lake Gardens Park is a botanical garden at Jalan Perdana which was built in the 1880s. Nestled deep in the city centre, this is a wonderful place to wind down and stretch your legs. Its lush green gardens, undulating hills, bright flowers and fauna make it a favourite spot for city dwellers. You can rent rowing boats and take in highlights including the bird, butterfly and deer parks.

(8) Back to nature
For something a little different, how about a trip to the spectacular limestone Batu Caves? Discovered in the 1890s, and situated seven miles north of Kuala Lumpur, this series of caves and cave temples is a sacred place for Malaysia's Hindus. But if you are feeling a little jaded after the conference, be warned you need to climb 272 steep steps to access the main Temple cave. Prepare for a little simian attention, as there is a large local monkey population.

(9) Serenity
Try visiting some of the local mosques and temples. Must sees include the Masjid Jamek mosque, a beautiful pink and cream brick building which is set in a grove of palm trees on the banks of the Klang and Gombak rivers. Also you should go to the Sri Mahamariaman temple which, built in 1873, is the oldest Hindu temple in the country. A few blocks away is the Sze-ya Taoist temple which was built by one of the founding fathers of Kuala Lumpur.

(10) Last-minute shopping
If you need to get that last-minute gift before heading home, KL has some huge shopping malls full of all the well-known global chain and designer stores, as well as housing entertainment venues and many restaurants and bars. Try visiting the Mid Valley Megamall or Berjaya Times Square. If you specifically want a designer label, Starhill Gallery is the place to go. If you're after electrical goods such as computers and laptops head to either Plaza Low Yat or Imbi Plaza located in the Golden Triangle.

How do UK airlines score on customer satisfaction? The answer, new figures published today by the UK National Customer Satisfaction Index (NCSI) suggest, is they outperform their US counterparts but lag the national average for the UK.

NCSI-UK is a sister initiative of the American Customer Satisfaction Index developed by Professor Claes Fornell in conjunction with the University of Michigan - and airlines were one of the sectors it specifically covered in the first quarter of 2009.

"The airlines category debuts in NCSI with a score of 69, below the national average [for the UK of 73%], but substantially better than the US [airlines figure of 64]," the report says. "While higher fares contribute to lower passenger satisfaction, low service quality has an even greater impact. And while customer complaint frequency is less than the national average at only 6%, barely half the national average, airlines do one of the poorest jobs of any industry at handling the complaints they do receive - with the exception of Virgin, which seems to have excellent complaint handling."

You can read more about the NCSI first quarter study here

 

 

Ryanair today revealed a further hit from its unsuccessful attempt to gain control of Aer Lingus after writing down its investment in the carrier by a further €222.5 million - an execeptional cost which helped drag Ryanair into the red for the year. Figures out today show Ryanair recorded an underlying pre-tax profit of €93 million for 2008/09 - itself sharply down on the €529 million pre-tax profit recorded in 2007/08 largely driven by a near 60% jump in its fuel costs. But exceptionals, largely comprising the writedown on its 29.8% stake in Aer Lingus and a €51.6 million accelerated deprecation charge on aircraft disposals, dragged its full-year pre-tax figure to a €180.5 million loss after exceptional items. Ryanair had already made a €91.6 million write down on the Aer Lingus stake in its 2007/08 financial year and now values its stake in Aer Lingus at €93 million.

Ryanair though does expect net profits (excluding exceptionals) to more than double for the coming year as it takes the benefits from far lower fuel bill this year - it is already largely hedged for the first three quarters of the year and says is on course to cut €450 million from its fuel bill.

For more details, here is the Ryanair release.