High air fare inevitable . . . As report says poor infrastructure impact airlines’ operations.

Domestic air travel in the country may further witness a sharp price increase if airlines are to stay afloat in the coming months, a report released by Agusto & Co, foremost research agency, has sad. Already, in the last few months, air fares have jumped from N18, 000 to N30, 000 for an hour flight as a result of skyrocketing prices of aviation fuel.

According to the report, hike in aviation fuel price and exchange rate exposures would adversely affect the fortunes of airlines forcing some to hike fare or exit the industry. According to the report, some players have already begun to revise their rates upwards by as much as over 50 percent on major routes in order to safeguard their profit margins.

“In 2011, we envisage high oil prices through the year, occasioned by a prolonged civil crisis in some oil rich regions like Libya. This would translate to a hike in aviation fuel prices through import shortages and speculative hoarding.  “The resultant effect would be lower margins for domestic airlines if consumers resist an increase to air fares.

The domestic aviation industry also has significant exchange rate exposure, whose adverse effects would become more evident if the Central Bank of Nigeria allows a free floating exchange rate regime. Consequently, we believe that some airlines would record losses in the short term and weaker players may exit unless domestic air fares increase significantly.”

The domestic aviation sector, according to the report, continued its five-year journey of low profit margins, which rallied at an estimated five percent. It stated: “Aviation fuel alone accounted for an estimated 40-50 percent of airlines’ operating costs in 2010. Earnings were further stunted by huge debt burdens to regulators, service providers, suppliers and financial institutions.

The largest portion of debt is passenger service charge (PSC) owed to regulators and service providers, which was restructured in 2010 to allow repayment over 3 years.” Agusto & Co added that during the year, poor infrastructure continued to be the bane of the airline industry.

“For instance, the run-down Gombe State airport was taken over by Federal Airport Authority (FAAN) in the hope of revival. The most recent short-coming is air-field lighting, which has disrupted night flights and resulted in the loss of billions of naira according to air carriers. Nevertheless, the country’s airspace was relatively safe in 2010.

According to the report, the domestic aviation industry’s performance in 2010 was characterised by competitive pricing by airlines, which was aggressive in the year, stimulating demand and leading to over-crowding at some of the nation’s few airports.

“Airlines flew new routes, increased flight frequencies, reduced catering and thus pushed feverously for profits. The nation’s airports were clad with more of the middle-class bound together by numerous sales promotions, distressingly, it appeared the airlines and support agencies were ill-prepared for the surge they had partly orchestrated, which led to increased booking errors, flight delays and cancellations.

It was in light of this that passengers sought the aid of the Consumer Protection Department (CPD) of the Nigerian Civil Aviation Authority (NCAA) in the period under review. In 2010, the CPD received over 47,000 complaints including grievances on delays and cancellations.”

Agusto & Co advised that the NCAA should vigorously pursue the enactment of its consumer protection law, which should come into effect in the short term. The agency said it expects that the law would not only penalise airlines for undue delays and cancellations but also offer compensation to affected passengers.“In our opinion, this would serve to improve efficiency in the industry particularly for airlines with aggressive cost management strategies,” it said.

Source:  http://www.businessdayonline.com

Analysis: Airlines stand by fare hike despite pressure. (Reuters)

(Reuters) - U.S. airlines are not likely to bow to pressure from the White House and elsewhere to rollback a fare increase facilitated by a Washington political standoff that could net the industry more than $1 billion in unexpected third quarter revenue.

Analysts and carriers have said the industry justifiably capitalized on quick profits when, because of congressional inaction on temporary aviation funding legislation last month, they stopped collecting certain ticket taxes and raised fares by a like amount.

"Airlines are not making tons of money. They're barely surviving," said Helane Becker, an industry analyst with Dahlman Rose & Company.

Major airlines lost an estimated $440 million for the first six months of 2011 due mainly to higher fuel costs, industry figures show.

By comparison, the government has lost an estimated $360 million in ticket tax revenue due to the 12-day impasse that has also prompted a shutdown of airport construction projects overseen by the Federal Aviation Administration (FAA), congressional and transportation officials said.

Congress has been fighting over unrelated rural air subsidies that have delayed passage of the stop-gap FAA funding bill that requires collection of a 7.5 percent passenger ticket tax. FAA air traffic operations are unaffected.

Analyst Jamie Baker of JP Morgan said in a note to clients that airlines could net up to $1.2 billion from the start of the shutdown on July 23 to early September -- when Congress is scheduled to return from a vacation begun this week -- if the impasse is not resolved before then.

Moreover, analyst William Greene of Morgan Stanley said the tax holiday is a positive catalyst, noting unit revenue "will be favorably impacted" for months after the matter is resolved.

The development enhances liquidity, he said in a note which also expressed a view that recent consensus sell-side share downgrades are a "contrarian indicator that only enhances the attractiveness of shares" when benefits of the tax holiday and lower fuel prices are considered.

Transportation Secretary Ray LaHood expressed opposition to fare increases in conversations with airline executives. And on Wednesday, President Barack Obama joined in, decrying the total tax revenue that could be lost to the federal Treasury.

"That would be a billion dollars at a time when we're worrying about how we pay for everything from education to Head Start," Obama said prior to a Cabinet meeting. "And we don't anticipate it's going to be easy to get that money back. Even though the airlines are collecting it, they're keeping it."

Delta Air Lines (DAL.N), United Airlines (UAL.N), US Airways (LCC.N) and Southwest Airlines (LUV.N) have said little about the unusual fare increase that is not without precedent.

But the industry is unapologetic about finding new revenue at a time when losses mount and there are concerns about the impact of a weak economy on demand.

"Airlines are merely seeking to function as responsible businesses that are able to cover their costs, which airlines are not doing today," the Air Transport Association, the chief lobbying group for major carriers in Washington.

"Airlines like any U.S. business have a fiduciary responsibility to their shareholders, customers and employees, not only to cover their costs, but to earn a meaningful profit," the ATA said.

Moreover, analysts, industry and fare experts note passengers are not paying more than they were two weeks ago and believe the windfall will run its course sooner rather than later.

Rick Seaney, chief executive of FareCompare.com, said airlines might have no choice but to roll back prices to entice consumers heading into the slower fall season if the congressional stalemate is resolved and the tax holiday ends.

Some airlines say they will help passengers try to collect limited IRS refunds related only to tickets purchased before the shutdown for travel during the shutdown.

Source:  http://www.reuters.com

Winter bonanza: City fliers to get dozen more flights. Ahmedabad, India.

Ahmedabad: To fliers' delight, airlines have proposed over a dozen new flights in domestic sector from Sardar Vallabhbhai Patel International Airport in the coming winter season.

Of the proposed flights, there will be one direct flight to Bhopal from the city. However, out of the all proposed flights, most have been rescheduled as new flights.

For Bhopal, Jet Airways has proposed to start a new flight (9W-2509) from the city. The airline wants to launch the flight on this route with an ATR 72-500. Besides, popular destinations like Delhi and Mumbai will have more flights.

Jet Airways officials, however, didn't respond to calls to give details of the proposal. Officials at the city airport said the details could be revealed after the proposal received approval.

The proposed schedule has been submitted by the airlines to the Directorate General of Civil Aviation (DGCA) in New Delhi. The winter schedule usually starts from the last Sunday of October and remains in force till the last Saturday of March. The proposals, once okayed by the DGCA, are sent to the airports concerned for flight operations.

"There are over a dozen new flights that the airlines have proposed in the list. However, half of them have been rescheduled or their codes have been altered," SVPI airport officials said.

JetLite, SpiceJet, Jet Airways and IndiGo have introduced a couple of new flights for popular destinations, they said.

Most of the proposed flights for cities such as Mumbai, Delhi and Bangalore have either been rescheduled or their codes have been altered.

Source:  http://daily.bhaskar.com

Passengers milestone for Ryanair

No-frills airline Ryanair has claimed to be the first European carrier to fly eight million passengers in one month.

The budget carrier said its passenger figures grew 6% in the 12 months to July, hitting 8.1 million that month.

However, the airline's chief Micheal O'Leary again hit out at the Irish Government's three euro air travel tax, and charges imposed by semi-state company the Dublin Airport Authority (DAA).

"Why are the Irish airports and Irish tourism losing out on this traffic growth. It's not the recession, because Ryanair's growth proves that you can continue to grow strongly during recession," Mr O'Leary said.

"The reason that Ireland and Irish tourism is suffering such appalling declines is because of the travel tax and the DAA's high fees, and the new (Irish) Government has failed thus far to address these issues."

Mr O'Leary predicted Dublin would slip from the airline's second largest base in Europe, after London Stansted, to fifth place, blaming a 40% hike in charges by the DAA.

The Irish Government has committed to retaining the three euro travel tax on each departing passenger until next spring, claiming airlines had not given solid commitments on capacity or inbound routes to scrap the levy.

Ryanair accused the Department of Transport of turning down its offer of promising to increase passenger numbers by five million over the next five years, based on Transport Minister Leo Varadkar's pledge to retain the tax.

Mr O'Leary reiterated the airline's call for the Irish Government to scrap the travel tax and break up the DAA, claiming Ryanair was scaling back in Ireland.

DAA claimed it had been independently verified that charges at Dublin Airport were not high. A spokesman said a study had shown charges were 25% lower than those at comparable European airports.

Source: http://www.belfasttelegraph.co.uk

IBC Travel to significantly increase Bimini airlift

Bimini is slated to receive additional airlift capacity of around 1,000 passengers per month – the result of a partnership between the island’s premier resort and IBC Travel.

Scheduled to commence from August 15, IBC Travel is expanding its service to the island, adding Miami to its schedule for direct daily non-stop flight services to Bimini. Bill Lee, general manager of Bimini Bay Resort & Marina, said the expanded flight schedule doubles the number of flights from South Florida to Bimini each week – a positive development for the resort and island’s economy.

“Getting to Bimini Bay Resort & Marina just got easier, so we expect to see an increase in reservations and, with that, more revenue coming into the resort’s restaurants and shops,” Lee said. “A boost in the number of visitors is also good news for our activity and excursion partners.”

The resort forms a major component of the economy in Bimini through direct employment and the business opportunities presented through the tourists it attracts to those shores.

Bimini Bay officials are expecting that with the bulk of IBC’s flights having afternoon departures, new markets from major cities throughout the northeast and midwest regions of the United States, as well as Canada, will be opened up as Bimini becomes more accessible.

“Before this, the only way to get to Bimini was by boat, charter plane or via infrequent commercial flights to the island,” Lee said. “It was always our goal to make it as easy as possible to get to Bimini Bay Resort & Marina, especially with its close proximity to South Florida. That’s why we’ve developed this new partnership with IBC and are also looking forward to the ferry launch.”

The ferry service Lee referred to is set to start this fall, offering a two-hour link between Miami and Bimini. Originally expected to commence this summer, it has the capacity to bring around 2,700 additional visitors to the island each week. Lee said the final logistical plans for the ferry are being ‘worked-through’ in Bimini.

Bimini Bay also announced a special incentive for IBC travelers to the island.

“Bimini Bay Resort & Marina, with its partnership with the Bahamas Tourism Office, is sweetening the deal by offering an instant saving of $400 for stays of six nights or longer and $250 for four- and five-night stays,” read a press statement recently released by the company. Certain conditions apply under the offer.

IBC’s flights to Bimini take about 30 minutes, with service days alternating between Fort Lauderdale and Miami, except on Sundays when flights depart from both airports. The flights return from Bimini daily. The service uses a Saab 340B plane that seats 30.

Lee said the additional access customers have to Bimini will let the cat out of the bag about all the resort and marina has to offer.

“For years, Bimini Bay Resort & Marina was one of The Bahamas’ best kept secrets,” said Lee. “Through our new partnership with IBC, more South Florida residents and visitors will be able to discover this piece of paradise, just 30 minutes away.”

Source: http://www.thenassauguardian.com

New Boeing 747-8 Freighter Completes Certification Flight Testing. Major milestone on drive to certification, delivery of newest member of the 747 family.

EVERETT, Wash., Aug. 3, 2011 -- The new Boeing 747-8 Freighter successfully completed its certification flight test program Tuesday, with two airplanes landing at Paine Field in Everett, Wash. Flight test airplane RC522 completed testing of the flight management computer (FMC) and RC523 completed function & reliability (F&R) testing.

"This is such a great day for the new 747-8 and for all the employees who played a part in designing, building and testing this incredible, game-changing airplane," said Elizabeth Lund, Boeing vice president and general manager, 747 program. "We are in the home stretch in delivering this airplane to our customers."

The first 747-8 Freighter is scheduled to be delivered to launch customer Cargolux in September after certification from the U.S. Federal Aviation Administration (FAA).

The 747-8 Freighter has flown more than 1,200 flights and 3,400 hours since its first flight Feb. 8, 2010. During that time, the five-airplane test fleet was used to gather data for more than 1,700 FAA certification requirements. Boeing tested the capabilities of these airplanes far beyond what they are expected to encounter in normal service. Tests concluded with F&R testing, a final phase in which an airplane must accrue 300 FAA-approved flight hours in its final delivery configuration.

"My team and I had the pleasure of spending hundreds of hours in these airplanes," said 747 Chief Pilot Mark Feuerstein. "We can truly say this airplane is a joy to fly, and our customers are going to love it. It flies like a 747, but one from the 21st century."

The 747-8 Freighter is the new high-capacity 747 that will give cargo operators the lowest operating costs and best economics of any freighter airplane while providing enhanced environmental performance. It is 18 feet and 4 inches (5.6 m) longer than the 747-400 Freighter. The stretch provides customers with 16 percent more revenue cargo volume compared to its predecessor. That translates to four additional main-deck pallets and three additional lower-hold pallets. The 747-8 Freighters will be powered with GE's GEnx-2B engines.

More information: http://www.boeing.com/newairplane/747/incredible/

Photo and caption are available here: http://boeing.mediaroom.com/

SOURCE Boeing 

http://www.marketwatch.com

Flydubai doubles fleet with 18th aircraft

DUBAI — Dubai’s pioneering low-cost airline flydubai has doubled the size of its fleet in just one year following the arrival of its 18th aircraft last week.

The new Boeing 737-800 NG represents an investment of $80 million and is the latest delivery of the order of 50 placed by flydubai at the 2008 
Farnborough Airshow.

“With the induction of latest Boeing 737-800, flydubai will soon be able to not only expand the 38 destinations that it already serves, the airline will also be able to ramp up frequencies between popular city pairs from its Dubai hub thereby giving customers additional choice and flexibility as to when and how often they wish to fly,” Saj Ahmad, Chief Analyst at FBE Aerospace London, told Khaleej Times.

Overall, flydubai’s continued growth highlights the sustained and resilient low-cost travel market that exists in and around the GCC region and this demand is still underserved as the carrier grows its business, Ahmad added. Commenting on the new arrival, flydubai Chief Executive Ghaith Al Ghaith said: “We are the world’s fastest growing start-up airline and a significant contributor to our success has been our young, efficient and expanding fleet. The range and capabilities of our 18 Boeing 737-800 NG aircraft allows us to provide our customers with high-quality, low-cost links to destinations in the GCC, Middle East, North Africa, Indian Sub-Continent, Asia and the fringes of Europe.”

The new aircraft has gone straight into service just in time to support the new CIS routes launching in September, as well as the upcoming busy Eid holiday, Al Ghaith said.

The 11th in the flydubai fleet to feature the Boeing’s new sky interior and the revolutionary fibre-to-the-screen in-flight entertainment system by Lumexis. The new aircraft will also incorporate Goodrich Corp’s carbon brakes and zonal drying system, increasing fuel-efficiency and savings in emissions and costs. As the fastest growing low-cost airline, flydubai is also tapping into lucrative money saving features to ensure that it keeps a lid on costs against a backdrop of rising and unstable fuel prices, Ahmad said.

“Incorporating carbon brakes saves over 300kg per airplane and with lighter in flight entertainment, this translates into a lighter 737-800 which in turn means lower maintenance costs and lower fuel burn. Future 737-800 deliveries will also hone in on engine efficiency too as CFM International’s CFM56-7BE engine will deliver up to 2 per cent better fuel burn on all forthcoming 737s which have aerodynamic airframe improvements that cut drag and fuel burn.

“All in all, flydubai is very likely at this November’s Dubai Air Show to commit to Boeings newly announced re-engined 737, to be powered by the CFM International LEAP engine, bring reduced fuel burn by up to 15 per cent,” he added.

Source: http://www.khaleejtimes.com

Witnesses say propeller fell off plane that crashed, killed North Carolina physician at Augusta Regional. Mooney M20K, N777CV.

http://www.ntsb.gov/Preliminary Report

A preliminary report by the National Transportation Safety Board reveals that witnesses saw a malfunction that led to a fatal plane crash at Augusta Regional Airport in July.

Dr. Thomas S. Wilson, 53, of Mooresville, N.C., was flying out of Augusta Regional when he crashed his single-engine Mooney 20 after the plane malfunctioned July 18.

Witnesses told the NTSB they "observed the propeller separate from the airplane and fall to the ground, followed by the airplane in a nose down spiral."

The pilot, who flew back and forth from Mooresville to Burke Medical Center in Waynesboro, Ga., for NES Healthcare Group, had been involved in a previous gear-up landing accident with the same plane April 11.

During the crash, the plane sustained substantial damage to the propeller and the fuselage.

Maintenance employees who worked on the airplane told authorities they had replaced the three-blade propeller with a two-blade propeller two days before the fatal crash.

The purpose of the July 18 flight was to take the airplane to 8,000 feet to see whether everything operated correctly before Wilson flew the plane back to North Carolina.

Source: http://chronicle.augusta.com

(Thanks for sharing, Jim)