Miyuru Sandaruwan: October 2012 Archives

The Indian DGCA announced today, that it has suspended the license (AOC) of cash-strapped Kingfisher Airlines (IATA: IT).
The airline was asked by the regulator earlier this month to submit an explanation on why its AOC should not be revoked, after its engineers and pilots went on strike in late September. The airline is several months behind in its salary payments and had had the majority of its fleet repossesed earlier this year.
Following the strike action of its staff, the airline announced a partial lockout - that has since been extended till 23rd October.
While its AOC has not been revoked yet - the airline's inability to provide a satisfactory plan for resumption of operations within a reasonable timeframe may very well lead to that happening.
The Indian business tycoon Vijay Mallya led Kingfisher had been operating for several years without a named CEO, till it appointed ex SpiceJet chief executive Sanjay Aggarwal in late 2010. The airline which operated over 60 aircraft an year ago, is now down to ten aircraft - and had suspended all of its international operations earlier in 2012 following the repossesion of a vast majority of its fleet by the lessors. Kingfisher began operations in 2005, when the Indian government's liberalisation of the aviation industry was launched under then Civil Aviation minister Mr. Praful Patel.

KLM has revealed on the GDS that it plans to launch service to Fukuoka in Japan, in Summer 2013. Fukuoka will be the airline's third Japanese destination after Tokyo and Osaka.
The new service will begin on 3rd April, 2013 and will operate thrice weekly.

Schedule:
KL869 AMS FUK 1440 0820+1 772 D357
KL870 FUK AMS 1025 1505 772 D146

KLM's new service to Amsterdam, will become the longest flight out of Fukuoka when it starts operating. Presently this title is being held by the Hawaiian Airlines service to Honolulu. The KLM flight is well timed to connect with domestic flight babjs at Fukuoka.
The KLM service will be the first nonstop route linking Fukuoka with Europe in over a decade. Prior to year 2000, Fukuoka used to cater to a number of long haul airlines - including the likes of British Airways and Air Lanka - and has recently shown a resurgence of new international services.

Japan Airlines has announced that it plans to launch a new nonstop route to Helsinki from 25th February 2013.
The new 787 service will operate four times per week. Helsinki is the hub of fellow oneworld member Finnair.

Schedule
JL413 NRT HEL 1145 1505 787 D1246
JL414 HEL NRT 1725 1015+1 787 D1246

The airline plans to increase the service to daily in the first half of JAL's FY2013.

Finnair also operates a daily Helsinki - Narita service, which will continue operation.

Maldivian (IATA: Q2), (Island Aviation Services) the national airline of Maldives, has added an Airbus A320 to its fleet and will be shortly launching three new international destinations.

Photo credit: YPspotter32

The airline will be launching new service to Chennai and Mumbai in India, and Dhaka in Bangladesh. It's first Airbus A320, pictured above, will be configured with 14 Business Class, 24 Premium Economy and 114 Economy Class seats.

Chennai - Dhaka

There has historically been significant O&D traffic between Dhaka and Maldives, albeit not sufficient to warrant a non-stop service. Maldivian is using the Chennai stop to cater for this, and also appears to hold fifth freedom rights between Chennai and Dhaka - another city pair presently without direct service. The route begins on 18th November.

Male - Chennai - Dhaka vv

Q2 550 MLE Dep 0700 - 0940 MAA 1040 - DAC Arr 1340 320 D246

Q2 551 DAC Dep 1440 - 1640 MAA 1740 - MLE Arr 1920 320 D246

Mumbai

Mumbai is a new addition to Maldivian's international network and will launch with three weekly services beginning on 15th November.

Q2 710 MLE BOM 0830 1200 320 D357

Q2 711 BOM MLE 1300 1530 320 D357

Map generated via Great Circle Mapper

 The airline has used the rest of the flying hours of its A320, to be utilized on flights to Trivandrum - its only other international destination, presently served on-board Dash 8 aircraft.

Q2700 MLE TRV 0800 0945 320 D1

Q2700 MLE TRV 1630 1815 320 D357

Q2700 MLE TRV 2020 2205 320 D246

Q2701 TRV MLE 1045 1130 320 D1

Q2701 TRV MLE 1915 2000 320 D357

Q2701 TRV MLE 2305 2350 320 D246

Success of Maldivian's foray into international jet aircraft operations - specially with a three class premium heavy narrow-body configuration - still remains to be seen. But one thing is for sure - that it is going to be an exciting period for the Maldivian aviation industry.

 It all began on a sunny Thursday, the 6th of September, in Sydney, and how far we have come in a little more than 30 days would have certainly been beyond imagination had we not experienced it firsthand. Beginning with the Qantas - Emirates alliance and on to Qatar joining oneworld to the Etihad tie-up with Air France - KLM, the recent events have very possibly shifted the global alliance axis forever.

 The initial announcement of an Emirates tie-up with Qantas, was unexpected by many - despite the fact having been a very badly kept secret in the last few days running up to the announcement. Qantas would end its JBA with British Airways, terminate its Frankfurt route, suspend its European services via Singapore and switch those to Dubai. The worst impacted from the announcement, appeared to be British Airways - which had been a faithful partner to the flying Kangaroo for several decades. Initially agreed for a ten year term, the EK-QF partnership was nothing short of revolutionary.

Even before the warmth of that news had gone away, the Emirates chief architect Tim Clark set the stage on fire by announcing that they were discussing a similar potential partnership with American Airlines, another oneworld member.

 This raised considerable concerns over the future of the global airline alliance axis - only for it to take an even more revolutionary tale a few days later.

 Rumours soon spread of a oneworld alliance event due in New York on the 8th of October. The rumour had it that the chiefs of American Airlines and British Airways would join to announce a new member to the alliance. Who that member would be? Many believed that this would be the long rumoured Qatar Airways partnership coming to fruition, while some others argued that it could well be Etihad or Emirates. And some others believed that it is the announcement of a merger between AA and US Airways, and the subsequent entry announcement of US Airways into oneworld. Proving many others wrong, it became Qatar Airways which was invited to the oneworld alliance on the 8th of October. The airline would be the first of the three largest Middle Eastern airlines to join an alliance and will bring with it fifteen new destinations to the alliance. The same event has elevated oneworld to a new position in the alliance scene, as it now appears to possess much superior connectivity opportunities in comparison to its rivals.

Stealing the show the same evening in another corner of the world was a four-airline-alliance led by unaligned Etihad. Fast growing Etihad together with oneworld member AirBerlin (in which it holds a stake) will link a code-share partnership with SkyTeam members Air France and KLM. The airlines plan to initiate their quad-directional partnership as soon as 28th October, the start of the Winter 2012 scheduling season.

The tie-ups of these giants have quickly made the airline world a different place. A British Airwasy passenger may now begin its journey in Kigali, transit at Doha and reach London. A Qantas passenger may start their journey in Warsaw and connect onto a Qantas Airbus A380 at Dubai. A KLM passenger may now fly on a KLM flight to Abu Dhabi and connect on an Etihad flight onto Seychelles. The consolidation and partnership scene in the industry seems to have taken to a new level, and the next logical partnership now appears to be possible between arch-rivals Emirates and Lufthansa. Emirates now lacks a European partner while both of its large Middle Eastern rivals do, while Lufthansa lacks a Middle Eastern partner which both of its large European rival groups now possess.

 The industry partnership axis has shifted, and it may not be over yet...

Disclaimer: The opinions expressed above are the author's own and do not reflect or represent those of his employers or clients. Every effort has been made to ensure that the facts are completely accurate.

Air Canada this week announced their latest plans on improving the performance in an ever competitive North American airline industry. The carrier now appears to look more into long haul traffic, while shifting its short haul services to a lower cost subsidiary.

According to a recent press release released by the airline, it now plans to pursue international growth opportunities while releasing some of its existing narrowbody aircraft to a lower cost operation - which AC dubs as a 'low-cost leisure carrier'.

This shift of AC's business model proves not only the changing shape of the North American airline industry, but also the level of success achieved by its US counterparts. Almost all of the US based majors have come out of bankruptcy protetction leaner and more efficiently, something with which AC's cost base is now having difficulty matching.

 At a time when AC's Calgary based neighbouring rival WestJet is moving from a low cost operation to launching a premium regional carrier, possibly following on from the success achieved by Porter Airlines - another Canadian carrier - it is more interesting to notice AC's decision to establish a lower cost subsidiary.

The biggest impact of a high cost base is often experienced on the short haul routes, as the higher level of fixed costs in comparison to a longer flight causes an uneven distribution of the unit cost. The perfect remedy for this, as AC has identified, is to gradually shift its lower yielding short haul routes to a lower cost base - by establishing a LCC subsidiary.

And AC is not the first to do so, while airlines such as Qantas have found success with a similar formula long ago, fellow Star Alliance carrier Lufthansa too announced that it was moving in the same direction.

Yet, if the Canadian market dynamics are considered - AC's low cost leisure carrier may in fact not be purely a no-frills operator. The Canadian market has quite a few dedicated charter airlines such as Air Transat and Sunwings, and there is a very good possibility that AC will try to develop a lower cost subsidiary with some frills - as signalled by the 'leisure' moniker.

While things wait to begin materialzing, AC has already begun its cost-base transformation activities by moving its Embraer 175 fleet to Sky Regional Airlines, under a capacity purchase agreement. Sky Regional is a non-unionized airline, and allows AC to break free from some of the work rules in place at a unionized airline.

The specifics of where Air Canada is heading may not be crystal clear yet, but one thing is for usre - that times at AC are going to be exciting in the next few months.