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March 2011 Archives

Video: Japan crisis and fuel costs test Asia-Pacific airlines

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I had an interesting chat with CNBC's Oriel Morrison this morning on the challenges facing the Asia-Pacific airlines, and she had some great questions about how they are affected by the crisis in Japan and rising fuel costs.

The importance of Japan to the airline industry cannot be over-stated - it is a major leisure and business travel market, and its airports serve as an important hub for traffic between Asia and the USA.

Qantas Airways, which is also reeling from natural disasters in its key Australian and New Zealand markets, is badly affected. The Korean carriers, for whom Japan is immensely important, will suffer as well. Japan is also a big market for Singapore Airlines, which has deferred plans to operate its Airbus A380 on the Singapore-Narita-Los Angeles route due to the crisis. Many other carriers are reducing frequencies in line with lower demand on these high-yield routes.

Factor in rising fuel prices - and the risks associated with hedging that comes with it - and it has turned out to be a tough first quarter of 2011 for Asia Pacific carriers. 

There are going to be be some testing times ahead for the airlines in this part of the world, and we will be covering how they are coping with these challenges.

China Southern's 506-seat A380 cabin plan released

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A380 Configs updated with China Southern.jpgThe configuration of China Southern's A380 has reportedly been leaked on Sina Weibo, China's equivalent of Twitter. A seating diagram (below) shows the carrier will operate its A380 with 8 first class seats, 70 in business, and 428 in economy for a total of 506.

Of the eight carriers whose seating plans we know (see above chart), the average number of seats is 487, so China Southern's runs on the slightly more cramped side.

For details on the cabin, both first class and business class will be a in 1-2-1 configuration with first on the lower deck and business on the upper deck. Economy will primarily be located on the lower deck in a standard 3-4-3 configuration save for 9/10 rows (the last row only has the 4 middle block of seats) in the rear of the upper deck in a 2-4-2 configuration, like on Singapore Airlines.

China Southern's first A380 flew on 3 March from Toulouse to Hamburg. As of last year's Zhuhai airshow, the aircraft is due to enter service in the middle of this year.

For those of you who do not read Mandarin and are looking to translate the original mini-blog entry, my online translator of choice tells me the configuration is 8 "bold heads", 70 "prime", and 428 "economics".

There are also, reportedly, 19 lavatories as well as 14 galleys fitting 87 meal carts.

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Rico and Snoop Dogg get with it....

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The marketing guys at Air New Zealand are certainly creative, and must have pretty big budgets. This is the latest in the fantastic series of videos featuring Rico. Have fun watching him rap with Snoop Dogg - it sure looks like they're having a great time together.

Emirsyah Satar gets his hands dirty at Garuda

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I wrote about my impressions of Emirsyah Satar, and the changes he is implementing at Garuda Indonesia, a few weeks ago.

Here is the full Airline Business cover interview with Satar and I sure hope you like it. I found his points interesting and refreshing - but the reality is that there are plenty of challenges ahead for Garuda if it is to achieve the goal he has set for the airline.

While you are at this, please check out the newly revamped Airline Business cover interview section - we have freshened it up with more details, pictures and even videos of the person who who we interview and the airline represented. Let us know what you think.

Here are a few more Airline Business cover interviews from Asian CEOs since I began doing them in 2009: Qantas CEO Alan Joyce, former Singapore Airlines CEO Chew Choon Seng, the chairman of Air China Kong Dong, the CEO of Korean Airlines Cho Yong-Ho and the CEO of AirAsia Tony Fernandes.

Slosar steps up at Cathay

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Cathay Pacific are one of the world's best run airlines. Their recovery from the financial crisis and measured approach to growth has allowed them to post record full year net profits, and it is amid this scenario that John Slosar takes over as CEO this week.

He replaces Tony Tyler, who joked at the airline's results press conference in Hong Kong two weeks ago that he leaves with three records in his four years at the helm of the Oneworld carrier - two full-year record profits with one record loss in between. It is not a bad way to bid adieu.

Slosar will be a different CEO to Tyler - he has a more measured approach, insiders say that he is a "hands-on details-oriented guy", and he has a disarming charm about him that makes people very comfortable. They add that it does not mean he would shirk from making quick hard decisions when necessary - something that will stand him in good stead amid the challenges that will inevitably come his way.

In a detailed interview with Airline Business a few weeks ago, Slosar spelt out the various issues facing Cathay in the coming years. Chief among these are retaining the importance of the Hong Kong hub and tapping on the growth of the China market together with Air China and Dragonair.

The cargo market is also of paramount importance for the airline - Cathay is investing in a dedicated cargo terminal in Hong Kong, inducting a new fleet of freighters from later this year, and starting up a Shanghai-based joint-venture with Air China.

The relationship between Air China and Cathay - the two airlines have a stake in each other - will also be closely scrutinised in the coming years. Will the Beijing-based carrier want to increase its stake in Cathay? That will be the question on everyone's mind.

It will be interesting to keep tabs on both Cathay and Slosar in the coming years.

What's that New York mention, AirAsia?

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AirAsia this morning is raising eyebrows with the above image it posted on its Facebook fan page. The photo carries the caption "What's your interpretation of East meets West? To be revealed on 29th March 2011."

That begs the easy reply that AirAsia will fly to New York City through its long-haul affiliate, AirAsia X. After all, it was only a few months ago AirAsia chief executive Tony Fernandes said he would like to see AirAsia X fly to New York this year via a fifth-freedom European stopover. The carrier is known for its social media and non-traditional marketing methods, making a Facebook hint for a new route plausible.

Alas, a few thorns. First, the AirAsia image also carries the broken disclaimer: "The image & copy above is not link to any AirAsia's promotional/marketing campaign/new routes." Nonetheless, the carrier's Facebook fans are taking the image to mean a New York route announcement is pending. If the image is not about a new route, promotion, or marketing, then what it is? Almost everything airlines publicise these days has a marketing element.

On the fleet front, the carrier is maxed out. It has deferred A330-300 deliveries for this year owning to lack of space at KUL and preparing for a possible IPO. Although the carrier in February ordered three A330-200 aircraft, which can fly from KUL to Europe to make the stopover before continuing to New York, they won't be delivered until 2014.

Additional A340 aircraft are unlikely given the carrier's prejudice against additional frames (unless, AirAsia X chief Azran Osman-Rani says, they could be leased for under US$400,000 a month). Recent high fuel prices certainly won't help the argument for the fuel-guzzling A340.

Finally, there is the matter of the Malaysian government needing to approve the route. AirAsia X has made recent strides with gaining access to Seoul and Tokyo, but is still blocked on Sydney and Jeddah. Although with Malaysia Airlines no longer flying to New York's Newark (via Stockholm), excuses would be stretched in blocking AirAsia X.

The verdict? New York, yes. But not now unless there's something up Fernandes's and Osman-Rani's sleeve.

Thailand's Nok Air cabin crew dance

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If Philippines Cebu Pacific cabin crews danced to Lady Gaga in their "Safety Dance" video, Thailand's Nok Air joined in the dance craze with a video of its own. 

Except that theirs wasn't a "safety dance" but more of random dancing to a Thai song titled "Too Much So Much Very Much". Oh, Nok Air's CEO, Patee Sarasin, knows about it too.


The Garuda Indonesia model for state-owned airlines

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Speaking to Garuda Indonesia CEO Emirsyah Satar (above) in Jakarta, I was struck by the transformation underway at the carrier.

An airline was once famous for flying dodgy aircraft and dodgier service now operates dozens of new Airbus A330s and Boeing 737-800s (below). The in-flight experience and service is comparable to some of the best in the business.

After coming close to bankruptcy several years ago, Garuda has returned to profitability and significantly pared down its debt. It has shaken off government interference in the management, and employees are assessed, paid and promoted based on performance and not seniority.

Satar and his team have made enough progress to begin resuming flights to Europe and building up their airline's network, join the SkyTeam alliance and hold an IPO (albeit with some controversy over the amount that was targeted and actually raised).

Sure, there are several issues that they have to overcome. There are still delays to flights, leading to frustration among many of its customers. The competition is intense, and there are other airlines offering a good product and in-flight service as well. It is still not clear if the airline will continue to be as profitable if oil prices keep creeping up.

Yet, the lesson from Garuda is this: if all of the stakeholders - the government, the management, and the employees - can buy into the idea that a state-owned airline must be  fundamentally restructured for it to be successful, they give it a better than fighting chance of surviving. Satar and Garuda have done just that.

Of course, having an energetic, charismatic and hands-on CEO like Satar helps. After talking to him, the difference between Garuda and other troubled state-owned airlines like Air India is even starker. There are numerous lessons that the guys from Mumbai can take away if they visit their friends in Jakarta.

We spoke to Emirsyah Satar for the cover interview of the next issue of Airline Business, which comes out next week.

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An aircraft for the living room

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At last week's Asian Aerospace show the Flight Daily News team was tasked with covering the big news (Air China 747-8I orders, for example) as well as filling the paper with stories about goings on in the hall.

One of the individuals I met was Matteo Bulletti of Delta Interior Design, an Italian firm that specializes in installing interiors for both private and commercial jets, aircraft maintenance, record keeping, and other services.

All good and well, but at the end of the meeting as we shook hands Bulletti mentioned something else, almost as an afterthought.

"By the way, this is one more thing I'm involved with," said Bulletti, passing me a brochure for another company he runs, Delta Art Design.

Delta Art Design takes old aircraft parts and converts them to furniture. Parts used in the series come from a range of classic aircraft including the McDonnell Douglas F-4 Phantom II, Vought A-7 Corsair II, Lockheed Martin C-130, Boeing KC-97 Stratotanker, B-52, and Grumman OV-1 Mohawk.

Something to think about when moving into the new flat.

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VIDEO: Japan's F-2 fighters damaged in earthquake and tsunami

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It appears as though up to 18 of Japan's F-2 fighters may have been damaged in last week's earthquake and tsunami, according to news reports. These are from the 21st Fighter Squadron, located at Matsushima Japanese Air Self Defence Force base in Miyagi prefecture.

The F-2, which is manufactured by Mitsubishi Heavy Industries, is the Japanese variant of the Lockheed Martin F-16. A total of 94 have been produced.

The programme has been controversial due to the high unit cost of around $127 million, which includes the developmental cost. This is around four times the price of a Block 50/52 F-16.

It is still not clear how much damage the aircraft suffered, and what impact this would have on the JASDF's operational capability in the country's eastern regions.

It may, however, increase the impetus to move ahead with the ongoing tenders for new fighter jets - although the budget come under tighter scrutiny due to the need to spend billions reconstructing the regions affected by the earthquake and tsunami.

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Asian Aerospace: Boeing displays new models of familiar jets

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During a quick glance at the exhibition halls under construction (still--as is the norm for airshows) for this week's Asian Aerospace show, two models quickly caught my attention.

First, Asian Aerospace marks the premiere of a large-scale model of the Boeing 747-8 Intercontinental in the Sunrise livery.

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Sunrise model-5.JPGSecond is a model of the Boeing 747-400 Boeing Converted Freighter (BCF) sporting a silver paint coat with 777-300ER-style wavy lines in 747-8F blue colours. The model's showing at cargo-heavy Hong Kong & Asian Aerospace (Turkish Airlines and China Southern have stands, but only for their cargo services) is appropriate, especially given last week's retirement of passenger 747-400 models from JAL.

747-400 BCF model-1.JPG747-400 BCF model-3.JPG747-400 BCF model-4.JPGApologies for the poor picture quality. Once we're back on site tomorrow we'll get you proper pics.

For more on Asian Aerospace, check out our dedicated show site.

AVALON: Cool B-1B take off; farewell Melbourne

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Though the airshow at Avalon will continue until Sunday, it's over for me: I'm in Melbourne Airport, waiting to board an SIA 747-400 back to Singapore. SIA is gradually phasing out the 747, so will this be the last time I fly the type on SIA?

Anyway, my last day at Avalon was excellent. Aside from a fascinating briefing on the F-35, I had my first opportunity to explore the cavernous C-17. The highlight of the day from a plane watching perspective was watching the B-1B take off. Truly awesome.

 All the American kit at the show drove home to me how close Australia and the United States truly are. For the show America sent two F-22s (sadly they didn't perform), F-16s, two B-1s, tankers, a C-17, and the MH-60R Romeo. American officers were everywhere, and the Romeo briefing included a talk by a serving US admiral.

 Shall be boarding soon. Look forward to my next trip here in two years.

AVALON: cool 747-400 video and personal appeal to USAF

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Before coming here somebody told me that Avalon is a terrific show for people who love planes. He was right, hanging out in the chalet row over lunch we were treated to a close up of a Qantas 747-400 taking off just 100 meters away. Not part of the show, but it was fun to watch this baby lift off. Best of all, the grass was recently cut, so the engines blew grass over the entire crowd.

Big disappointment is the F-22s. Yes, it's cool they are here on static, but I would much prefer to see them in the air. Much better to bring down one Raptor and have it do a demo, rather than two Raptors cooped up and surrounded by guards and attack dogs. Come on, USAF, give the people what they want. 

Hope for tomorrow? A B-1B takeoff. My colleague said it would happen today at 16:40, but no luck.