Hong Kong airline Cathay Pacific has been ‘hit hard’ by the global financial crisis with a significant drop in the number of first and business class travelers.

Cathay’s chief executive Tony Tyler said that concern had shifted from the sky-high price of oil earlier in the year to weak passenger numbers.

He said, ‘In the first half of the year the problem was very much a cost crisis caused by runaway fuel prices, but now — in the midst of a global financial meltdown —  we are also being hit hard on the demand side.

‘The fact that revenue growth is stalling in our biggest market, Hong Kong, is a serious worry.

‘We are very exposed to the financial industry here and when banks, our biggest corporate customers, cut or even just curtail their travel plans we know we can expect to be in for a rough ride.’

‘I wish I had something more optimistic to say but the truth is that Cathay Pacific — and the airline industry as a whole —  has entered another very troublesome period.’
Source: AFP

Xi'an airport

After flirting with China’s airports for several years, Frankfurt airport operator Fraport has finally settled down in Xi’an, Shaanxi province, in northwest China.

Fraport Asia has acquired a 24.5″ stake in the new Xi’an Xianyang International Airport, one of the top 15 cargo airports in China and a fast-growing passenger destination, for $71.79 million. The other main partners in the venture is China West Airport Group with a 50.9% stake and China National Aviation with 24.5%.

The $293 million joint venture began operations early last month. It owns the infrastructure and associated land at Xi’an airport and is responsible for all airside facilities.

Robert Payne, an official with Fraport, said the Xi’an deal was clinched more than a year ago and was just awaiting approval from Beijing authorities.
More HERE.
Source: Cargonews Asia

Hainan Airlines

Massport CEO Thomas Kinton Jr. said he expects a deal will be reached with Hainan Aviation Group soon and that direct, nonstop flights from Boston to China could be offered in 2010.

Kinton said Logan’s passenger numbers are down 5% to 6% this year and operations are down 20% percent compared to 1999 when landings and takeoffs were at its height.

The deal with Hainan Airline (which changed its name to Grand China Air) hinges on the ability to obtain Boeing 787 Dreamliner aircraft.

Boeing is backed up in the production of the 787’s because of the huge demand for the fuel-efficient jets.

The Boston Business Journal previously reported that the flights would be daily, non-stop 13-hour, 20-minute flights. The nonstop service from Boston to China was a key goal of Gov. Deval Patrick’s trade mission when he visited China last December.
Source: Boston Business Journal

Where have all the passengers gone?

China is undergoing a slowdown in airline traffic and car sales as the financial slump starts to pinch.

Carlos Gomes, economist at Bank of Nova Scotia, cut his forecast for U.S. auto sales to 13.7 million vehicles this year and 13.5 million units next year, saying Americans have little room to spend on big-ticket items because they’re already heavily indebted.

The latest evidence that China’s transport boom is hitting a wall came when the International Air Transport Association released figures showing Asia Pacific carriers had a 3.1% year-over-year drop in passenger traffic in August after a 0.5% decline in July. International freight traffic among the region’s cargo airlines, measured in freight tonne kilometres, fell 6.8%.

Analysts say the Games may also be responsible for a 6.2% drop in Chinese motor vehicle sales in August, the first decline in more than two years. The theory is that buyers shied away from dealerships and stayed home to watch TV instead.

GM executives are still predicting annual auto sales growth in China this year of about 12%. They argue the slowdown, also a result of a government-mandated hike in gasoline prices, won’t last.
Source: The Financial Post

Airbus SAS has announced plans to purchase up to $1 billion of aeronautic components from China by 2020.

According to CEO Tom Enders, the company was ‘already in a steep first year to increase its sourcing’ - which may not be grammatical but the meaning is clear — with plans to ‘triple it’ in two years and double it again ‘three, four or five years later’.

Enders also explained that Airbus maintained 95% of its workforce in Europe and noted unions and politicians ‘wanted to keep it that way’.  But he emphasised that the company couldn’t ‘keep it all [the workforce] in Europe or the US’.

Airbus recently began shipping segments for assembly at the Tianjin plant — its first assembly line outside Europe. The assembly factory is reportedly a $600 million venture between Airbus and a Chinese consortium composed of the Tianjin Free Trade Zone and China Aviation Industry.

The company is also awaiting government approval of a 280-aircraft order with Chinese airlines that includes A320, A330 and A350 models. Airbus, which estimates that China may require 3,000 planes over the next 20 years, plans to rapidly increase its presence in Morocco, Mexico, India and Russia.
Source: ITExaminer

Jet engine for a Chinese carrier

Chinese airlines started their fourth-quarter operation with a good news — lower jet fuel price.

In the forth quarter, jet fuel price on the Chinese mainland was lowered to RMB7,750 ($1,138) per ton, nearly 6.9% or RMB570 ($83.7) less than in the third quarter.

As of 2007, China’s domestic jet fuel has been usually adjusted quarterly in accordance with the price fluctuation of international jet fuel.

Zhang Wei, an industry insider with the Chinese Ctrip.com website, said the cut resulted from a price drop on the international crude oil market.

Zhang Wei, said, ‘Investors are worried that demand for crude oil is becoming weak, which brings down the oil price. To the aviation industry, domestically and globally, lower oil price. ‘ He also suggest that this might be a turning point.

Fuel cost accounts the biggest part, about 50%, of the operating cost among Chinese airlines.
Source: China View

Smiling service

China Eastern Airlines currently connects two Indian cities, Delhi and Kolkata, with Shanghai, Beijing and Kunming in China.

It is now planning to increase its frequency of operations to India from next month.

The airline will add one more flight on its Delhi-Shanghai-Beijing route, which currently has a frequency of four flights a week.

It will also increase the frequency from three flights a week to daily on the Kolkata-Kunming by the end of next month.
Source: TravelBiz.com

Airbus 380 giving double decker comfort

Airbus Chief Executive Thomas Enders has said the company’s dominance of the global aviation industry alongside Boeing is destined to end as China and Russia develop their abilities to produce large commercial aircraft.

Speaking on a panel at the World Economic Forum in Tianjin, he said, ‘I hope we will be able to cooperate with them, and we will be fierce competitors in other areas.’

China has set a target of 2020 for production of aircraft that will seat more than 150 passengers, which could compete against Boeing and Airbus.
Source: CNNMoney.com

Continental Airlines  will start daily direct flights between Shanghai and New York from March 26, 2009 as was planned.

Interior economy cabin Continental Airlines

The direct flights focus on businesspeople, aiming to adapt to the flexible arrangements of these passengers, who are able to fly to more than 60 cities in the US and Canada with the help of Continental Airlines’ aviation hinge in New York’s Newark Liberty International Airport.

Boeing 777-200 will be used for the route, and make one flight per day.

The company has already operated routes from New York to Hong Kong and Beijing.

The seat kilometer utilization of the two airlines is very high, about 80% to 90%. Continental Airlines will become the sole airway to operate daily direct flights between the world’s two important financial centers, as well as between China’s three largest cities and New York.
Source: Trading Markets

China's airline freeze

China’s aviation authorities are suspending applications for new airlines until 2010. This in order to prevent overheating of the nation’s airline industry.

A statement on the General Administration of Civil Aviation of China (CAAC) website said the move would check the overheated development of air transport, and ensure safety standards would be maintained.

The rapid development was threatening safety because of a shortage of pilots and the limited capacity of both airspace and domestic airports.

However, CAAC will still welcome applications for establishing cargo airlines that employ mostly foreign pilots and operate at night, as well as airlines that use China-made aircraft and operate in western and northeastern China.
Source: Ou Meng Jue Ding