Air China staff

Air China, the nation’s largest international carrier, said it dropped to a nine-month loss because of higher fuel costs and travel disruptions caused by the Olympics and natural disasters.

The Beijing- based airline made a profit of 3.49 billion yuan ($511 million) in the first nine months of last year.

Air China joins China Eastern Airlines in reporting a probable loss in the period after the government forced carriers to curb flights to Beijing during the Olympics in order to ease pollution and congestion.

Hundreds of flights were also canceled nationwide earlier in the year because of snowstorms in January and to help with relief efforts after the May Sichuan earthquake.

Li Lei, an analyst at China Securities in Beijing, said, ‘The third-quarter results will be dreadful, wiping out profits from the first half. There’s not much doubt that carriers will post full-year losses as well.’
Source: Bloomberg

Beijing International airport

Beijing international airport has said its aims to become an international hub for the Asia-Pacific region in five years, despite the global economic slump and the aviation industry’s downturn.
The airport forecast continuous passenger throughput growth this year, at 10%, while some airlines in other countries have gone bankrupt and airports have suffered from the economic downturn and soaring oil prices.

Dong Zhiyi, general manager of the Beijing Capital International Airport said, ‘The growth this year is slower than last year (18%), but China’s aviation market is the world’s aviation development engine, and its future is prosperous.’

The airport’s deputy general manager Fan Jun told China Daily: ‘Many more airlines have come to us and expressed wishes to open new routes to Beijing.’

The airport plans to attract more transfer passengers to Beijing, joining the ranks of other international hubs in the Asia-Pacific region, such as Incheon, Tokyo, Singapore and Hong Kong.

“Beijing’s advantages are the strong support from China’s rapidly growing economy and the pace of project completion,” the company’s deputy manager Gao Lijia
Source:China Daily

Air Asia not going to Johor

The state government of Johor in Malaysia said it was not informed by budget airline Air Asia that it was terminating its direct flights from Senai to Macau as of last Sunday.

State Tourism, Domestic Trade and Consumer Affairs Committee chairman Hoo Seong Chang said, ‘I cannot comment on the matter before finding out what prompted the move by Air Asia.’

Hoo said during his recent trip to China, airlines such as the Guangzhou-based China Southern Airlines (CSA), had expressed an interest in starting flights from several Chinese provinces to Senai.

‘We are enthusiastic about this as Senai Airport is gearing up to become an international airport,’ he said. It is possible that at these trying times his enthusiasm is misplaced.
Source: The New Straits Times

China Eastern to join Shanghai Air

This has been going on for months. If courtships progressed at this rate the human race would die out.

A proposed merger between China Eastern Airlines and Shanghai Airlines has been approved in principle by the Shanghai government according to China Business News.

The proposal calls for China Eastern to take a 60% stake in Shanghai Air, followed by a cash injection into China Eastern from the State-owned Assets Supervision and Administration Commission.

Spokesmen for both airlines said the carriers had not been informed by the government of any merger proposals or discussed the issue directly with each other. Nothing like keeping the important players in the dark.

Sources familiar with the matter said the government was discussing the possibility of brokering a merger of the two Shanghai-based airlines to create a dominant player with a 60% share of domestic flights in to and from Shanghai. No doubt, in the fullness of time, the two major players will be told.
Source: Reuters

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

In happier, earlier times

Some airlines will not survive the worsening global economic situation and there is an industry association warning that the next 12-18 months will be ‘extremely difficult’ for Asia-Pacific carriers.
The Association of Asia Pacific Airlines (AAPA) said in a statement passenger numbers are falling.

AAPA director-general Andrew Herdman said, ‘The biggest challenges right now are weakening passenger demand, particularly for first and business class travel, and continuing uncertainty about the global economic outlook.

‘The next 12-18 months will be extremely difficult times for airlines and some won’t survive the current crisis.’

He added that the association ‘remains extremely cautious about prospects for the airline industry in 2009′.

The hammer comes at the front end of the aircraft where the profit lies. That is where the numbers are declining the fastest.

An example:

British Airways said first- and business-class travel fell 8.65% last month as the credit crisis and economic slowdown led to job losses and tighter budgets in the City of London and on Wall Street. For an airline the profit is always in the front end.

AAPA is a trade association of international airlines based in the region.
Source: Straits Times

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

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