February 2010 Archives

Following Saturday's 8.8 magnitude earthquake in Chile, LAN's operations to Australasia are in flux.

A statement from the carrier says LAN's Saturday Sydney-Auckland-Santiago flight  LA800 arrived in Chile but was diverted to an unspecified airport. Authorities shut Santiago's airport for at least three days from Saturday.

Sunday's LA800 to Chile arrived in Auckland on its scheduled stop but is "delayed until further information is available from our head office about the current situation in Chile".

As of Sunday night in Sydney, it is unknown if Monday's inbound Santiago-Auckland-Sydney flight LA801 will arrive, which is curious given that by 5 PM in Sydney the flight would have to have been underway for approximately three hours.

The carrier's website says flights from Santiago have been suspended, but says "Passengers on 17 of the airlines flights from both national and international cities of origin have been redirected to alternative airports".

The earthquake in Chile subsequently created a tsunami warning in the Pacific. A statement from Air Tahiti Nui says the carrier has delayed for 24 hours TN101 from Papeete to Auckland and the inbound TN102.

An Air Tahiti Nui flight from Tokyo was diverted to Honolulu and delayed one day due to crew rest requirements.

LAN passengers needing emergency contact information only can call in Australia: 1800 558 129 and in New Zealand: 0800 451 373.

It was one year ago today Virgin Blue subsidiary V Australia made its first commercial flight, taking off from Sydney for Los Angeles. Yours truly was on the Sydney tarmac that day to capture the above photo of VH-VOZ making her last few seconds of contact with the runway.

Flightglobal publication Airline Business went on an around-the-world tour with Sir Richard Branson celebrating V's launch. The May edition of Airline Business featured our exclusive interview with the CEOs of three Virgins: Brett Godfrey of Virgin Blue, David Cush of Virgin America, and Steve Ridgway of Virgin Atlantic.

At Air NZ's half-year financial results, CEO Rob Fyfe announced his carrier will make undisclosed improvements to its Trans-Tasman product. The carrier will start to unveil the improvements in mid-March, after which Fyfe said competitors would be "scrambling to catch up".

The improvements come as Air NZ faces "unstable market dynamics" on the Trans-Tasman market, as Fyfe characterized it. He said demand was down 2.9% and the carrier cut 10.5% capacity. Air NZ faces increased competition, primarily from non-full-service carriers Jetstar and Pacific Blue.

It seems likely then the improvements will aim to increase passengers' perceived value of Air NZ's full service, thus wooing them away from Jetstar and Pacific Blue--or stopping a further exodus. It's unlikely Jetstar and Pacific Blue would improve their product since it is tied to offering passengers the lowest fare.

The Trans-Tasman improvements, new cabin design, and introduction of more A320s will make the next twelve months "one of the most defining" in Air NZ's history, Fyfe remarked.

Financial results summary:

• Normalised earnings* before taxation of NZ$96 million, up $70 million from the same period last year
  
• Normalised earnings* after taxation of $64 million
• Operating revenue down 15% to $2.1 billion
• Passenger demand down 4.6%
• Passenger load factor up 3 percentage points to 81.6%
• Net cash position $1.1 billion
• Interim dividend of 3.0 cents

* Normalised earnings exclude the impact of derivatives that hedge exposures in other financial periods.

Fyfe said other carriers have approached Air NZ asking to license its premium economy seats, but said "They'll have to wait a little while."

At the end when there were no further questions, one NZ reporter asked Fyfe about the carrier's claimed drink-driving problem. Fyfe declined to comment, saying the conference was about financial results. "We are not dealing with those issues", he said. Ouch.

Virgin Blue subsidiary Pacific Blue gets props in this edition of quirky news. The honour is for its cheeky ad campaign promoting NZ-Australia flights.

First, some context: an earthquake last July moved New Zealand's South Island 30cm closer to Australia.

And now the ad from an e-mail sent earlier this week:
For those looking to brush up on their geology, the world's continents move every year. The Atlantic is widening while the Pacific is shrinking. So expect fares to change. More so than usual.

A Qantas A330-300 at Narita last July. Starting this July Qantas's SYD-NRT flights will be operated with B747-400s and A330-200s in lieu of A333s. (Photo: Author)

Qantas announced today it will add more seats to the Tokyo market. Qantas currently has a daily A330-300 operation to Narita from Sydney. From 5 July a 2-class B747-400 will replace the A330-300 Thursday-Tuesday and an A330-200 will operate on Wednesday departures from SYD. The move will add 1,256 seats a week. Qantas's thrice-weekly Perth-Narita B767 service is unchanged.

A Qantas statement says the move is to "meet increased demand".

Earlier this year during JAL's drawn-out decision of sticking with oneworld or switch to SkyTeam, there was much discussion if Qantas would add capacity to Japan in the event its oneworld partner switched alliances or cut back capacity. JAL stuck with oneworld and a JAL spokesman in Australia says the carrier will not make changes to its Australia services. "None whatsoever," he said.

So Qantas's move does not appear to be grounded in worries over JAL. Another explanation could be Qantas wants to re-deploy its more lean A330-300 (which currently flies SYD-NRT), and knows it can easily fill up a 2-class B747-400 with leisure traffic to Japan. Surprise, surprise the Qantas statement quotes CEO Alan Joyce saying: "The growth comes on the back of increased travel to Japan by Australians, particularly in the leisure and VFR (visiting family and friends) markets." Qantas took the opportunity to announce a fare sale to Japan.

But if the increase really is due to Qantas expecting an increase in demand, the move should be seen as a rebound, not growth.

Even with Qantas's increased capacity, the Australia-Japan market is still down 24% from 2008 levels. Some capacity number crunching courtesy of BITRE:
Qantas had the biggest drop, cutting in 2009 54% of 2008's capacity. JAL cut approximately 44% of seats in the same period. The difference with Qantas is that its low-cost subsidiary Jetstar picked up half of the drop, giving the Qantas Group (Qantas + Jetstar) only a 18% decline.

Given slot restrictions in Japan and the A330 being Jetstar's largest aircraft, Qantas was the only outlet to increase capacity. It's thus hard to judge if the Qantas Group expects future growth in passengers willing to pay for full-service--and vindicate its two-brand strategy--or if the group's future is with Jetstar.

After an hour the Virgin Blue half-year earnings press conference is still going on, but here are some highlights:

Financial results

• Virgin Blue posts A$62.5m profit after tax for the six months to December 2009 compared with a $101.4m loss in the same period a year earlier. Virgin Blue's half-year profit was $4.5m more than that of formidable Qantas.
• Virgin Blue attributed the sharp turn around to a decrease in fuel cost as well as cost containment (such as operating more services with the same number of staff)
  
• V Australia contributed a $39m loss
• Profit before tax for the short haul business was $108 million, up 126% against the prior period
  

Developments

• Virgin Blue is still in discussion with Boeing to order upwards of 50 737s to be delivered in the short-term. The aircraft will feature Boeing's new Sky Interior and will be outfitted with Boeing's fuel saving improvements.
• All aircraft from May onwards will have premium economy
• V Australia gave A$200m worth of traffic to Virgin Blue (that's passengers who travel across the Pacific on V Aus and then transfer to a Virgin Blue domestic flight)
• V Aus is still expected to reach break-even within 18 months of launching ops, i.e. August this year
• Virgin Blue will develop a Blackberry application to allow passengers to book and modify tickets as well as check-in with their Blackberry
  
• Brett Godfrey affirmed my December article that Virgin Blue is looking to order the -900 variant as part of its 737 order. The -900's increased capacity would be a boon for slot-restricted Sydney, he said, adding the -900 has a 2-3% lower operating cost per seat.
• Godfrey said he expected this earnings report to be his last, indicating he still expects his successor to start by August
  

The headline of V Australia applying to return to sister-carrier Pacific Blue its rights to fly to Fiji is gaining a lot of traction, but it's important to read the details.

Emphasis added from Etravelblackboard:

In its submission V Australia said the move was in "response to market conditions" and instead would operate six services a week.  The day which it will drop its service will then be taken up by sister airline Pacific Blue in its smaller B737-900s [sic].

V Australia will return its rights for one day. It's not even going to have to cut capacity: while V Aus applied for and received daily flights, it has only operated the 777 six times a week. Pacific Blue already operates a flight on Wednesday, the day V Aus does not fly to Fiji.

Thus to say the reason is a "response to market conditions" is rich on Virgin's part. It's no secret the V Aus route to Fiji was launched because its 777 was spending a full day at Sydney waiting for its next LA flight, as a source with Virgin Blue confirmed to me. As the maxim goes, an aircraft not in the sky is an aircraft not making money.

Unlike Qantas, which can rotate its large 747 fleet to Asia, Europe, Africa, and South America, V Aus only flew to LA. Fiji at four hours away and a popular tourism spot, was a match. Replacing Pacific Blue capacity with unused V Aus capacity freed up Pacific Blue aircraft for new routes.

Perhaps at the time of application V Aus did think it would fly daily, but then a schedule change took time away, or V Aus wanted more time for ground maintenance.

The underlying connotation that Fiji is merely a stop-gap measure until V Aus has a larger fleet and can organically rotate aircraft hasn't been lost on Qantas.

In its response to the International Air Services Commission granting V Aus seats to Fiji, Qantas wrote:

It is entirely possible that, when conditions improve on routes to which the B777-300ER
is better suited, V Australia will redeploy this aircraft to other destinations.

(Note: Qantas applied for its Jetstar subsidiary to gain seats to Fiji. The IASC decided to split the seats between Qantas/Jetstar and V Aus. So Qantas is understandably pessimistic about V Aus--and is right.)

V Aus rebutted, "The operation of services by V Australia is an important part of our long tenn growth strategy for Fiji and will remain so."

It's hard to see that Fiji, a leisure destination four hours away, is matched to V Aus's 777 lie-flat business beds and premium economy. Those cabins take up a third of the aircraft. But again, an aircraft not in the sky is an aircraft not making money. As long as V Aus has ample ground time in its schedule, Fiji will be the stop-gap measure.

In this edition of quirky news, it's bad enough for an airline when one its pilot gets arrested for being drunk. But it's really bad when a police superintendent says an airline has an underlying alcohol problem, as Air New Zealand has been accused of.

From January to May 2008, according to recently released documents, four Air NZ employees were arrested for drink-driving. Fairfax New Zealand reports:

One was a pilot [not on his way to work], who had been charged with excess breath alcohol on three previous occasions. A mechanic on his way to work was 2-1/2 half times the legal limit.

A flight attendant, on the way to work, and dressed in full Air NZ uniform, was also over the limit and was later fired

TV3 said the OIA documents showed others had been caught, but Air NZ bosses did not know who they were, because they weren't caught on the way to work or in uniform and identifiable.

They are a mechanic with three breath alcohol convictions in four years, another pilot and an aircraft engineer.

Air NZ's response?

Mr Fyfe said the four cases mentioned in the year to May 2008 indicated an incident rate of 0.03 percent over the airline's 12,000 employees compared with a rate of 1 percent over the New Zealand population at large.

"This suggests to me that, rather than a drink-drive problem at Air NZ, the available facts suggest that the application of the drug and alcohol policies that are in force...have led to an improvement in the drink drive culture as compared to that which is evident across the New Zealand population at large."

Summary: enjoy your trip on Air NZ's new seats, but perhaps it's best you never the airport.

My colleague Siva Govindasamy attended this morning's Qantas press conference. The Qantas Group announced traffic was marginally up, its half-year earnings were down 72% compared to last year, and the big ticket item: from the end of 2011 to 2012 Qantas will undergo a A$400m fleet revamp.

Key note: the announcement on the fleet revamp wasn't an announcement. It was a confirmation. The Australian Financial Review first ran the story last November, from which point Qantas declined to comment. And no wonder. Under the fleet revamp, first class will be removed from 9 of the 15 747-400s that have first class. All together Qantas has 28 747s, according to Flightglobal's ACAS database.

The A380 isn't fairing better. The 6 A380s Qantas has, and six on their way, will retain first class but see a decrease in business and corresponding increase in premium economy. The remaining 8 on order (ACAS shows Qantas also has 2 on option) will have business, premium economy, and economy--no first class.

The question that immediately comes to mind is what this decrease in first class says about the prospect for premium travel, as Siva wrote about. Earlier this week IATA said business travelers who have been relegated to economy may not ever return to business class. You can also read that as first class passengers relegated to business won't return to first. And, of course, British Airways expects to end business class on short-haul routes. If it's going to end on short haul, surely long-haul won't go away unscathed.

A second question that comes to my mind is what this decision says about premium economy. Answer? Sold. The 747s will see an increase in Y+ of four seats (if I've got Qantas's figures right) while A380s will see an unspecified increase in premium economy.

V Australia and Air New Zealand are no stranger to the potential of Y+ (and Air NZ is stepping up its Y+ to quasi-business class). At the V Australia launch last February, Godfrey remarked to me he expected premium economy (right) would be the carrier's best-selling product. He re-affirmed that this past December at the launch of Melbourne to LA flights on V Australia, tell me:

We have a boutique business class...and forty premium economy [seats], which have done very well for us. We've exposed less of our footprint, about a third, to premium whereas Qantas was closer to a half. They were clearly configured for the best of times, not what we're seeing right now.

An aside: Godfrey noted it was unlikely V Australia would change its configuration any time in the next five years.

To crunch some numbers, premium economy accounts for 11% of all seats on V Australia and 15% on Air New Zealand (777-200), but 9-11% on Qantas 747s and 7% on Qantas (A380). Between Qantas' 747s and 380s, the 380s are poised to receive the biggest increase in Y+, affirming the trend Air NZ and V Australia started with large Y+ cabins will stay in this region.

How long before more carriers ditch high-end premium cabins for mid-tier Y+ cabins?

My friends Grant McHerron and Steve Visscher over at the excellent Plane Crazy Down Under podcast have a joke slowly becoming true.

Jetstar aircraft are branded as "A Qantas Group Airline" (above). Yet Qantas's new CEO, Alan Joyce, came from Jetstar--which he founded--and Qantas is adopting Jetstar initiatives, particularly with regard to cost-cutting. And as Qantas's freshly released half-yearly results indicate, as last year's full results did too, Jetstar is propping up Qantas.

The Plane Crazy joke is when Qantas aircraft will be branded as a "Jetstar Airline".

My colleague Siva Govindasamy inadvertently reached that conclusion in his blog today:

Sure, Qantas would say that full-service carriers everywhere were devastated by the economic crisis. However, the Group's two-brand strategy increasingly appears to be Jetstar leading and Qantas following.

The Australian Department of Defence announced that five ATC officers have arrived in Haiti, nearly a month after US ATC aid arrived. Their arrival is a few days shy of American Airlines resuming commercial flights on the 19th, the first carrier to do so.

You readers had a debate about the merits of John Travolta sending aid--and Scientology ministers--to Haiti. Better to be early with ministers or late without?

Passengers belonging to a SkyTeam frequent flyer programme (Delta, Air France/KLM, Alitalia, Aeromexico) long bemoaned there were few options for them to get to Australia both for earning and redeeming miles.

The main route from North America was with Korean Air through Seoul, a convoluted journey compared to the hops Star Alliance members could take on United or oneworld members could take on Qantas. From Europe, no simple solution existed for SkyTeam passengers, whereas Star's numerous Asian carriers (Singapore, Thai) could provide service, as could oneworld's British Airways and Qantas.

A reprieve for Delta passengers (who undoubtedly comprise the majority of SkyTeam customers in North America) came with the inking of a joint venture with V Australia. But before that, Vietnam Airlines announced it was interested in joining SkyTeam, giving hope to passengers SkyTeam's blackout in Southeast Asia and Australia would end.

Vietnam's ascension to SkyTeam, announced yesterday to occur in June, will see the blackout end and enable some travelers to fly to and from Australia. But the biggest gains for SkyTeam with Vietnam Airlines will be around Southeast Asia, where it is desperately playing catch-up.

I first flew AirAsia X in July 2008 not knowing what to expect. It was a low-cost carrier but flew long-haul. After a few hours on my flight from Australia's Gold Coast to Kuala Lumpur (disclosure: it was a complimentary ticket) I was sold.

The flight felt like any other. The main difference was that when you book your ticket you also need to pay for luggage and food (if you require them), and mid-flight snacks will cost you a few dollars. And heck, AirAsia X even had flair some legacy carriers lack.

After talking to CEO Azran Osman-Rani in KL, I knew this then-quiet carrier was going to usher in a new era in travel--low-cost, long-haul--and make it work.

Operative word: work. My flight was on the carrier's leased A330, a former Aer Lingus bird in a standard configuration (added bonus: Celtic music and Galway tourism ads on the audio system). AirAsia X's growth, however, hinged on 25 A330-300s in a dense 3-3-3 392 seat configuration. That's 79 fewer seats than what Singapore Airlines fits on its A380.

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The first two photos show the regular economy seats and the second two show the bigger business class-like seats

An AirAsia X ticket might be a fraction of a full-service carrier, but would the seats be too cramped to make the trip worth it? I wanted to find out, and with AirAsia X half the price of other carriers on a recent trip from Melbourne to the UK I had no reason to say no.

Below are cabin photos of A330s direct from Airbus. I flew this aircraft from MEL to KUL. (KUL to STN was on the carrier's A340.)

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The first interior on AirAsia X's new A330s. This interior will be replaced by June. These photos depict the regular economy seats in a 3-3-3 configuration for a total of 364 seats.

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The first interior on AirAsia X's new A330s. This interior will be replaced by June. These photos depict the XL economy seats in a 2-3-2 configuration for a total of 28 seats.

The verdict? The cabin is sleek, leg room is standard for economy, seat width is narrower but not uncomfortably so, or at least not for your skinny author, and there are flexible headrests.

One problem: the seats don't recline. As hard as I pressed on that silver reclining button while leaning back, the seat didn't budge. Flight attendants embarrassingly told me the seats didn't recline.

Osman-Rani explained to me in an e-mail the other day:

When we first procured the A330s in 2007, that was the period when all airlines were buying up new planes like crazy, and all the seat manufacturers were at full capacity. We did not have a choice as only one seat supplier could meet our time frame requirements.

So AirAsia X went with a supplier that provided a fixed-back shell design. The seat cushion was supposed to slide forward, giving passengers a recline without interfering with the passenger behind them. But it failed, and Osman-Rani doesn't hide it:

However, while the theory [of the seat] was interesting, in practice, it wasn't a great seat because the cushioning was not soft enough and the gliding mechanism was too stiff that most passengers did not know how to slide the bottom forward to recline.

It appears I was in the majority that couldn't slide the bottom forward.

AirAsia X doesn't want to be that carrier passengers love for the price but hate for the service. So AirAsia X is going to rip out the old interior and put in new seats that properly recline. Even full-service carriers shudder at the thought of re-configuring aircraft, but AirAsia X knows bad word could spread that their seats don't recline.

The re-configuration is being fast tracked: the first A330 with the new interior (including lie-flat business class-style seats--check back here in a few days for more details) entered service this month and all five of the carrier's owned aircraft will be completed by June. AirAsia X's leased A330--the former Aer Lingus bird--will receive the new interior by November, Osman-Rani says.

Costs will be high--the carrier hasn't disclosed a figure--but will be off-set because the new seats won't have AVOD IFE units in the seats (see above photos), shaving off more than one ton of weight per aircraft according to Osman-Rani.

AirAsia X found its IFE, at 30 Malaysian ringgits (US$8.75) for an eight hour flight, wasn't selling well. On my daylight flight from MEL to KUL, which was nearly full, I couldn't find more than 15 passengers using the system in the regular economy cabins. That's less than four per cent uptake. Ouch.

Instead of built-in IFE, Osman-Rani says flights will have a limited supply of portable units. "Portables are the way to go," he wrote, explaining the carrier can also achieve efficiency by regulating demand. I suspect IFE would be more popular on the carrier's eight-hour hauls to Australia than four-hour flights to Taiwan, or soon India. I wonder what my IFEC whiz colleague Mary "Runway Girl" Kirby will have to say about built-in units versus portables.

I'm due to fly on the aircraft with the new interior Thursday on my return to Melbourne. I'll post an update then. Before then, expect a report on my AirAsia X KL-London flight, currently the longest flight operated by an LCC.

This month the second Qantas A330-200 in the new domestic configuration will join the fleet. It will be heralded as an improvement in passenger comfort. But it's a harrowing indicator Qantas isn't competitive enough.

Until their retirement in 2008, B747-300s used to operate on flights to Perth from Sydney and Melbourne (the equivalent of NYC-LA/San Francisco flights in America). The B747-300s were known to be hangar queens and could have used an updated interior, but they did the trick.

Their replacement, the A330-200, was lauded as an improvement for passengers. Yet passengers probably would have preferred the B747-300: it had PTV screens in Y unlike the A332, and business class was in a 2-2-2 configuration while the A332 had a 2-3-2 business configuration. The tight configuration wasn't due to the A330's space parameters: business class on international A330s in the Qantas fleet had a better value configuration at 2-2-2.

It was thus interesting when Qantas announced last year (alas, a good week after I inquired about the matter to no avail) it was improving the product on the domestic A332.

All seats would feature USB ports for re-charging iPods and other devices, as well as Panasonic's eX2 on-demand system. A spokeswoman says existing domestic A332s will not be retrofitted, but elsewhere there is talk the existing A332s might go to Jetstar.

The connotation of the improvements was clear. Qantas thought it could fly high on its reputation for the flights to Perth and thus offer a product that was in the same category (except for a meal, checked luggage, and frequent flyer points) as Virgin, Jetstar, and Tiger for a whole lot more. Quick price comparison for a Melbourne-Perth flight mid-week in May: Qantas A$219, Virgin $169, Jetstar $159, Tiger $128.

These "improvements" (they should have been on the aircraft from the get-go) will help differentiate Qantas and make its product superior. It calls to mind a campaign British Airways had last year explaining its advantage over Ryanair and easyJet.

Whether the superior product is worth the added cost is another discussion. Globally, one thing is clear: full service carriers have to work harder to get passengers to see value in their product as low-cost carriers continue their encroachment.

Any recent Qantas accident or incident has been met with a familiar sequence of events. The Qantas maintenance union hits out against the airline, claiming the carrier's decision to save money by performing maintenance off-shore leads to shoddy and unsafe work. And then Qantas denies the accusation, saying its maintenance is fine.

Then another incident--exploding oxygen tank puts hole in fuselage, cockpit catches on fire, landing gear has problems.

Are these all coincidental? Or is there a fundamental problem with Qantas' maintenance?

Matthew Benns in The Men Who Killed Qantas sets out to answer that. His conclusion is there is a culture in Qantas hell-bent on cost saving and it bears the consequence of all the incidents over the years. Benns, however, never produces ample evidence to support this claim.

If you can get past the tacky and sensationalist cover, you'll find his book is a disjointed chronicle of Qantas' history, interlaced with random facts (it cost the carrier $2 million to redesign its kangaroo logo so it would fit on the A380) better suited to an IFE quiz game than your time.

One matter Benns overlooks is that if people "killed" Qantas, the carrier needed to be "alive" in the first place. Benns details every Qantas crash and incident, of which there were many throughout the carrier's history. Benns does not differentiate between what it was in the 1920s and today that lead to incidents. Given that a crash nearly occurred on the delivery flight of one of Qantas' first aircraft in 1921, was Qantas thus never "born" and so could never be "killed"?

The merits of Benns' work, aside from unsuccessfully arguing his point, is questionable. The book is well-researched but thorough on topics only about anything negative or the least bit unsavoury.

An example: Over five pages Benns details a 1971 extortion that saw Qantas depart itself from a half million dollars. Benns painstakingly details the car the perpetrator bought with the ransom money: "it was iridescent blue with bone white upholstery and had red wall tyres on its US magnesium alloy wire wheels". Immediately after the section Benns writes, "For Qantas the missing money was the least of its problems." You can almost hear Benns squeal in delight at having you wasted five pages of reading.

At the end, Benns does delve into questions about the existence and consequences of toxic cabin air. It is a matter worth investigating further (as my colleague David Learmount has written about), but the topic is not confined to Qantas, and would have no easy connection to Benns's main argument about cost-cutting.

What Benns ultimately does is use a series of incidents to get readers to turn their nose up at a carrier they likely already find arrogant. For some readers he's preaching to the right choir. But for most of us, a more balanced and authoritative account of Qantas' maintenance issues awaits.

On Thursday Tiger Group CEO Tony Davis said the Jetstar-Asia JV is "doomed".

This backlash from Tiger has been brewing since the JV was announced.

At the press conference announcing the JV, Qantas CEO Alan Joyce commented on why its subsidiary Jetstar chose AirAsia over Tiger. "Tiger is a loss-making entity", he quipped.

Joyce's remark was uncalled for. Tiger Australia is still in its start-up phase. To its credit, it has said from day one break-even would take a few years. Tiger's Singapore operations are profitable.

The real reason Jetstar didn't chose Tiger? Jetstar and Tiger compete in Australia. Jetstar and AirAsia don't compete in their markets except for a few regional routes in SE Asia.

Davis reportedly said, "We think it's hilarious...Since Qantas and AirAsia announced their so-called alliance, Jetstar has spent over $3 billion dollars on a completely different engine to AirAsia for their fleet of A320s and now AirAsia is taking on Jetstar Pacific in Vietnam."

Let's break this apart. First, the Jetstar (not Qantas, ahem) and AirAsia JV is about saving money. If Pratt & Whitney, which equips Tiger's A320s, offered Jetstar a better deal than IAE (who Jetstar chose), Jetstar would have taken it. While early JV initiatives (passenger re-routing, spare parts sharing) were tooted, Jetstar CEO Bruce Buchanan conceded the biggest savings will come from when the carriers purchase new aircraft.

Second, yes AirAsia will now compete in Vietnam with Jetstar Pacific. But as my colleague Leithen Francis wrote, Vietnam is a booming market. Delving into details, AirAsia is going to have only a 30% stake in its Vietnam off-shot. Far from competitive.

Boys, please play nice. I won't have the stamina to write about your competition if either of you turn into a Michael O'Leary of the east.

You can read more about problems facing tigers here. Will Tiger make this a genuine and on-going campaign, or is it a short-term marketing ploy?

Lest anyone thought the non-equity JV between AirAsia and Jetstar might reduce competition, news arrives that AirAsia has acquired a 30% stake in Vietjet Aviation to establish a joint-venture airline, Vietjet AirAsia. The airline expects to launch flights as early as April or June (what, no May?) this year.

Vietnam, in addition to national carrier Vietnam Airlines, is home to Jetstar Pacific, which is part of the Jetstar/Qantas group.

Vietnam is AirAsia's third overseas base after Indonesia and Thailand, and only adds to the prowess of this dominating carrier in what is now the world's largest market.

Given current troubles Jetstar Pacific is having with Vietnamese regulators, it will be curious to see how another foreign carrier pans out in the current operating environment. Might an Asian carrier fare better than a carrier with overseas (Australian) roots?

BAE Systems put out a statement announcing the delivery of the first Avro RJ100 to Australia, part of a deal inked last December. Below you can see photos of the aircraft, which sports a special logo on the tail.

If you've ever wondered how a manufacturer delivers a small jet to the other side of the world, here's the answer. The aircraft's delivery flight schedule:

Thursday 28th Jan: Departed Southend  0730 local  Arrived Dubrovnik 1100 local

Friday 29th Jan:     Departed Dubrovnik 1400  local  Arrived Sharm El Sheikh 1830 local

                              Departed Sharm      1940  local  Arrived Muscat 0050 local

Saturday 30th Jan  Departed Muscat     1515  local  Arrived Mumbai 1915 local

                              Departed Mumbai     2030 local  Arrived Colombo 2300 local

Sunday 31st Jan    Departed Colombo   1555  local  Arrived Phuket  2025 local

                             Departed Phuket      2130  local  Arrived Jakarta 0040 local

Monday 1st Feb     Departed Jakarta      1440  local  Arrived  Broome 1900 local

Tuesday 2nd Feb   Departed Broome     0845 local   Arrived  Adelaide  1430 local

I'm not normally moved when airlines boast they are installing leather seats, but Tiger Airways' announcement that it plans to do just that has got me jumpy.

Why?

Ask me one bad thing about Tiger and I would respond: it feels like a low-cost carrier.

Well gee wiz, you say, it is one.

True. But when customers fly on a low-cost airline, the only bit of the "low-cost" part they want is the ticket--a cheap ticket. They'd like everything else to be full-service.

Tiger's low-cost feel is immediately apparent upon walking on board:
As you can see, the cabin interior is simple--cheap in the minds of passengers who are used to comparatively sleek interiors from Jetstar (a LCC that prices above Tiger):
and Virgin Blue (a quasi-LCC that prices above Jetstar but below Qantas):
Jetstar and Virgin Blue's interiors are relatively simple: leather seats with a bit of colour. On Jetstar, there is also an orange stripe below the overhead bins.

I've heard passengers make snide remarks about Tiger's interiors, and sometimes those remarks go on to frame their entire perception of Tiger. While the low-cost shed ("terminal") at Melbourne is no Changi and requires a decent walk out to aircraft, it is the aircraft customers have the longest experience with.

I wonder how something simple like leather seats might boost Tiger's profile, if at all. Tiger spokeswoman Vanessa Regan told me:

The key message about leather seats is they save us operating costs (last longer, cheaper to maintain).

Better looking and more comfortable interiors for customers and lower costs for an airline? Win. My only retort is why Tiger didn't do this from the get-go.

There's also talk, which Regan couldn't yet confirm, that the carrier will install mood lighting. If it does, that gimmick could seriously shake up customer perception. Consider the strides Virgin America has made with its snazzy but simple interior. [Update 10 February: Regan says mood lighting "isn't a key consideration as we focus on short haul flights".]

The leather seats will be introduced on new deliveries after February this year. Tiger doesn't know yet if the first aircraft with the seats will go to its Singapore or Australian division, Regan says. She adds Tiger has yet to decide if it will retrofit existing aircraft during overhaul.

I'll throw it out to Tiger I'd like to see some creative, but low-cost, interior details. Maybe some tasteful orange tiger stripes or paw prints somewhere in the cabin? Purrrrr-lease?

In this edition of quirky aviation news, drag queens are taking over the industry. (Cue Seinfeld: Not that there's anything wrong with that.)

Virgin Blue announced its holiday division will offer a special Mardi Gras themed flight, 25 February's DJ 857 from Melbourne to Sydney, host of the gay and lesbian Mardi Gras. Virgin Blue is the official airline sponsor of the event. The flight--which will cost $199 one-way (a regular flight goes for $85)--will include drag queen flight attendant "Ms Marion De-Pilot".

It's ironic since last month on the other side of the Tasman an Air New Zealand flight attendant lambasted their new crew uniforms made them "look like drag queens".

In response, Air NZ Rob Fyfe made public he would add pink to his wardrobe, from ties to underwear.

Virgin Blue also isn't embarrassed about drag queen connections. Accompanying the press release (which carries possibly one of the best titles ever: Up, Up and a Gay! We're Boeing to Mardi Gras!) was the Virgin flying girl sporting a new flag.
Update 26 Feb: Here's a lively account of yesterday's DJ 857, the MEL-SYD Mardi Gras flight.

Sunset for Emirates' A340-500s in Oz: B777s, with lie-flat biz beds, to replace A340-500s by next year

Last week was a good week for economy class travelers with Air New Zealand's announcement of lie-flat seats in economy seats.

Economy passengers haven't fared so well this week. Emirates will pull all A340-500 aircraft off Australian and Tasman routes by 1 January 2011. The A340-500s currently fly to Melbourne, Perth, and Brisbane, with the Brisbane and Melbourne services continuing to Auckland.

This will leave just the A380 and B777 serving the region for Emirates. Economy passengers may enjoy the single A380 flight to Sydney with continuing service to Auckland, but aren't likely to enjoy the B777s: they feature 3-4-3 seating.

Economy passengers, however, aren't behind the change. It's the premium cabins driving the change. As Emirates Sales Manager for Australia Stephen Holl told me:

The A340-500's are being re-deployed to other routes, and we are ensuring the aircraft product ex Aust. (and all long haul routes) will be equipped with lie flat beds in business class & full flat beds first class.

The A340-500s do not feature lie-flat seats whereas the B777 (and A380) do. Sorry, economy passengers. But maybe you can look forward to Emirates bringing the A380 to more Australian cities.

As you've surely heard by now, IATA says the Asia-Pacific region has usurped North America to claim the number spot as the largest aviation market. IATA says carriers in Asia-Pacific flew 647 million passengers within the region compared to North America's 638 million in its region (that means wholly within and not to/from other regions).

Last year in Airbus's global market forecasts it said Asia-Pacific would be the largest market only by 2028. Boeing wasn't bullish either, also sticking to the 2028 date. But history is past and this is now: the future has arrived. Asia-Pacific is taking the helm.

This marks a monumental shift. We're going from carriers in North America that everyone knows and scrutinizes to a region where some big carriers are known but many more remain hidden (pop quiz: how many aircraft are in China? Answer: 1,400). We're going from stereotypically low-service cabins to stereotypically high-service cabins. And we're going from the home of the low-cost carrier (that's you, Dallas, home to Southwest) to the new frontier where LCCs are being taken to the next level by going long-haul and with early signs of success (that's you, Kuala Lumpur and Macau, respectively home to AirAsia X and Viva Macau).

And what better time to announce this than at the Singapore Air Show? You can see my colleagues' work--articles, photos, videos, Tweets--here at our special Singapore Air Show page.

Stay tuned. This is a good, if not the, place to be.