Abu Dhabi International Airport

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.

Singapore Airlines cements its partnership with Virgin Australia, joining ANZ and challenging Etihad

Singapore Airlines’ (SIA) move to nearly double its holding in Virgin Australia to 19.9% reinforces the SIA Group’s new strategy of focusing more on Asia-Pacific, including the Australian market. The recent purchase of an additional 9.9% stake in Virgin Australia from founding shareholder Virgin Group also dilutes the presence of SIA rival Etihad, which now owns about a 9% stake in Virgin Australia.

Although equity is not the main driver, the increased stake could give the SIA Group an edge as it looks to further deepen its codeshare partnership with Virgin Australia, particularly in the key Australia-Europe market.

Independent Virgin Australia has quickly emerged as SIA’s most significant partner in the two years since the two airline groups first forged a codeshare agreement, a further testament to the waning importance of global alliances. SIA, which is a longstanding member of Star but has traditionally taken a passive role in the alliance, is keen to embed its relationship with Virgin Australia as other current and prospective partners circle.

Revitalised Air Seychelles looks to use Hong Kong as Asian hub and proxy service for Etihad

There are duelling ambitions for the new Hong Kong service from Air Seychelles, revitalised following Etihad Airways' Jan-2012 equity stake and secondment of Cramer Ball as CEO. First – and the carrier is fortunate to have options – is to promote the island nation by using Hong Kong as an Asian hub, with, probably, a partnership with Cathay Pacific that would start conservatively but could grow, and perhaps extend to Etihad Airways.

Second is Air Seychelles' ability, if it chooses, to rely initially on feed from Etihad, which owns 40% of the flag carrier. Etihad does not yet serve Hong Kong and Air Seychelles is routing its Hong Kong service via Etihad's hub at Abu Dhabi. Etihad will have a free sale codeshare on the Abu Dhabi-Hong Kong service, almost making the route its own.

This is not a reflection of a surrogate airline but rather a changed world and the power of hubs. Air Seychelles very much has its own strategy and is looking to shake up African aviation by forming ties (independent of Etihad) with Air Austral and South African Airways.

UAE airports booming, may reach 80 million pax throughput in 2012; Dubai to become world's biggest

The UAE has experienced a decade of relentless aviation growth. Separated by less than 120km, the three largest airports in the country at Dubai, Abu Dhabi and Sharjah have seen their traffic driven by their home carriers, Emirates, flydubai, Etihad and Air Arabia, each of which handles the majority of passengers passing through the airports.

This year could see the three airports reach a combined 80 million passenger throughput. With each achieving double digit growth, a combination of large order books for the local airlines and an increasing fleet of foreign carriers attracted to the market, the UAE airports are fast approaching the total airport traffic of New York City's system, stagnating at a little above 100 million passengers annually.

Despite a massive airport construction programme, capacity is being challenged and the restrictions on air traffic movements among the UAE and its neighbours are increasingly a constraint on efficient operation.

Etihad and Emirates continue cross-alliance moves: each to expand in Indonesia in its own way

Indonesia's short-haul airline market has quietly been booming for the past decade, as carriers seek to meet demand from a 240 million strong population spread over islands and difficult terrain, making aviation an ideal transport. Not to be forgotten however are long-haul markets, critical for a country with a rising middle class as well as the world's largest Muslim population.

That once meant seasonal religious charters but now it also means growing trade with the Middle East and north Africa – and Indonesia becoming a safe and democratic destination for Middle East markets to visit. So it comes naturally that Middle East carriers are advancing strategic developments in Indonesia. But they are doing it in their typically contrasting styles: Etihad will partner with flag carrier Garuda Indonesia, while Emirates plots its own capacity expansion with a third daily 777-300ER service to Jakarta, making the Indonesian capital Emirates' third largest non-stop destination by ASKs.

Delta’s new push to Paris confronts United and shows commitment to SkyTeam amid alliance shifts

Major shifts in the three major global airline alliances during the last few weeks have triggered a bevy questions regarding the future of those tie-ups. But just as Qantas attempts to forge a broad agreement with unaligned Emriates, British Airways has convinced reluctant members to allow Qatar to join oneworld and Air France has reversed its stance to embrace Etihad and airberlin, SkyTeam partners Delta and Air France are bolstering their presence in the US-France market.

It is not clear if Delta could benefit from the new Air France-Etihad tie-up that entails codesharing on flights to Abu Dhabi, but eventually Delta’s connecting customers in Paris could utlilise connections to the Middle East opened up by the new non-SkyTeam partnership.

Beginning in the northern hemisphere summer of 2013, Delta is introducing new flights from Newark Liberty International Airport to Paris Charles de Gaulle, and new seasonal flights from Boston to Paris. Delta also plans to add another daily flight from its Atlanta hub to Paris, which will increase to four the combined number of daily services offered by Delta and Air France on the pairing.