Qatar Airways

airberlin 1Q losses widen, but restructuring will deliver benefits later. Pain now for gain later

airberlin’s losses widened in 1Q2013 on restructuring costs, but the message from CEO Wolfgang Prock-Schauer is that today’s pain will lead to tomorrow’s gain as the group’s “Turbine 2013” restructuring programme starts to show in the results.

Capacity cuts, network refocusing, headcount reductions and supplier renegotiations are all under way and the positive impact should be more visible from 3Q2013 onwards. Meanwhile, codeshare relationships with Etihad and oneworld partners are delivering growing passenger numbers.

Etihad, airberlin’s 29% shareholder and benefactor, has ploughed close to EUR500 million of cash into its German partner since last year. airberlin’s efforts on many fronts will need to translate into profits and a strengthening of airberlin’s flimsy balance sheet if Etihad is to see a return. Etihad's network traffic feed has been stimulated by the partnership, but it will want to see airberlin profits in due course.

Why Emirates and friends will soon reshape American aviation

Shortly after Emirates Airline announced its remarkable breakthrough partnership with Qantas in Sep-2012, Emirates CEO Tim Clark said he had also been talking to American Airlines for some time and publicly expressed hopes that the two would also establish a close relationship. This was despite the fact that American already had an extensive codeshare relationship with Etihad; and the third Gulf carrier, Qatar Airways, has since been invited to join the oneworld alliance – which American leads.

The Gulf airlines, and particularly Emirates, have had a devastating impact on European long-haul hub carriers. The impact will be different for US airlines, but despite the different geography, it will be much bigger than most expect. For one thing they will cut across the developed boundaries of the global alliances.

Qatar Airways set to join oneworld by late 2013

Qatar Airways CEO Akbar Al Baker announced earlier this month the carrier intends to join the oneworld alliance by Oct-2013, only 12 months after it announced that it had been selected for membership. The 2012 announcement that the airline planned to join the alliance system sent ripples of reaction through the aviation landscape of the Middle East, as well as globally, helping to bring about a major commercial reshaping.

Joining oneworld will usher in a new era for Qatar Airways. After years of setting its own path and growth trajectory, the airline has decided to hitch itself to the alliance system, albeit to the most loosely based of the international airline groupings. Its membership is being sponsored by British Airways. The airline’s membership in oneworld will see it coordinate flights, schedules and systems with other member airlines, including Iberia, Qantas, Royal Jordanian, Cathay Pacific, Malaysian Airlines, LAN and Japan Airlines.

nasair plans ambitious expansion in 2013 ahead of further liberalisation in Saudi Arabian market

nasair has long been the junior partner in the Saudi Arabian aviation market, but five years into operations its fortunes have begun to change. In 3Q2012, the airline reported its first-ever quarterly profit. It also managed to breakeven in the final quarter of the year, ending 2012 with a small loss. Load factors have hit a record 75% and nasair has turned its operational performance around to generate more revenue.

With the improving financial momentum and promising passenger traffic, the carrier is optimistic about its prospects for 2013. Sulaiman Al-Hamdan, Group CEO of NAS Holding – the parent of nasair – has announced the carrier is targeting a 50% increase in passenger traffic for 2013. As if that wasn’t ambitious enough, the carrier is also targeting a 100% increase in revenue and its first ever full-year profit.

CAPA Airlines in Transition report, Part 1: The natural history of airline alliances

From the first US Open Skies agreement with the Netherlands in 1992, and the subsequent granting of antitrust immunity to the KLM-Northwest joint venture in 1993, the evolution of airline alliances has been rapid and far reaching. Bilateral codeshares, immunised JVs, multilateral branded global alliances, the Etihad equity alliance: why are there so many models? In the first of a series of reports based on CAPA’s recent Airlines in Transition conference in Dublin, we examine the history and evolution of airline alliances and partnerships.

After decades of strict regulation of international traffic rights post WWII, which controlled destinations, capacity, frequencies and prices, a campaign for more liberal air services agreements (ASA) between nations began to gather pace in the US from 1977. In the words of Jeffrey Shane, General Counsel, IATA and a former senior US aviation regulator, any attempt to modify an ASA was characterised by a "highly calibrated, tit-for-tat mode of negotiation".

Australia must negotiate expanded bilateral agreements, particularly with China

Australia needs to urgently negotiate expanded international air capacity which is constraining access to services from some of the country’s most important markets in Asia along with the United Arab Emirates. Capacity for several Asian markets, including China, Hong Kong, Vietnam, Malaysia and the Philippines, is fully utilised by carriers from those countries which are important source markets for both tourism and trade.

The Australian Government is being criticised for not negotiating new bilateral capacity to keep pace with demand. Melbourne Airport CEO Chris Woodruff said at the Australian Airports Association convention in Nov-2012: “These agreements provide the framework in which we can go out to the international market and attract new air services to meet the increasing demand for travel to and from Australia. The Government needs to lead from the front on this issue. Our bilateral agreements need to provide plenty of capacity for future growth in passenger numbers.”