Hong Kong Airlines, which stated it would announce an order for A380 equipment at the Paris Air Show, reportedly failed to progress with the agreement, as China blocked the order in protest against Europe’s plan to bring international airlines into its emissions trading scheme from 01-Jan-2012 (Financial Times/Reuters/Gulf Times/Handelsblatt, 24-Jun-2011). Airbus CEO Tom Enders had previously expressed concern to the EU climate commissioner, Connie Hedegaard, that it was “madness to risk retaliation” from such influential players as China over the issue. Hong Kong Airlines is also reportedly behind an order for 15 B747-8s, which was attributed as being for an "undisclosed customer". Hong Kong Airlines is 46% owned by HNA Group, the parent of Hainan Airlines Co Ltd. The A380 agreement is reportedly in the Airbus order book, although the signing ceremony was reportedly cancelled due to uncertainty regarding the order. Aircraft purchases from Chinese airlines require Chinese government approval.
Hong Kong Airlines' A380 order in doubt due to EU ETS dispute
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Copa’s weapon of choice is the creation of a new low cost airline Wingo, operated as a unit of Copa Colombia with a targeted market debut in Dec-2016. Wingo is designed as a lower frills point-to-point airline, operating four Boeing 737s in a single-class 142-seat configuration. It is a shift in strategy for the Copa Group, which operates a full service model leveraging traffic flows over its hub at Panama City Tocumen international airport.
Wingo is also adding service to Panama City’s Pacific international airport, (Panama City Pacifico), which results in Copa’s business units then operating to the city’s two airports. Copa’s commitment to serve Panama’s secondary airport reflects its new strategy to become more competitive in Colombia’s aviation market, and create a defensive shield against further LCC encroachment in the future.
Hawaiian Airlines: cost creep casts a slight shadow over a favourable PRASM performance
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.