United Arab Emirates

The A380 becomes mainstream, with 103 now in service: which airlines, destinations, stage lengths?

There are 103 A380s in service as of early May-2013. Emirates has 33 and Singapore Airlines has 19, so when assessing network scheduling, these two and their hubs predominate: of the 1,048 weekly A380 flights, 402 are from Emirates alone. Dubai and Singapore airport see the most A380 flights.

But there are some less predictable statistics. The airport to see the most A380 operators is Hong Kong followed by Paris and Los Angeles. The largest A380 destination that is not (yet) an A380-hub is London Heathrow. The UK and USA are the most common A380 destinations after Australia, Singapore and the UAE. Asia, not the Middle East, sees the most A380 flights; South America sees none. Guangzhou-Shanghai Pudong is the shortest A380 route at 1,202km while Los Angeles-Melbourne is the longest at 12,751km. Qantas and Lufthansa have the highest average sector length while Thai Airways is placing the most number of cycles – about two – on its aircraft per day. Qantas and Air France are placing the least (just over one).

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.

Qantas-Emirates alliance: the last piece of the puzzle falls in place across the Tasman

The final piece of the Qantas-Emirates alliance has fallen into place with the New Zealand minister of transport Gerry Brownlee giving his belated approval for the two carriers to extend their union across the Tasman by authorising a master coordination agreement. This will to all intents and purposes turn the Tasman market between Australia and New Zealand into a duopoly between the Qantas-Emirates Group and Air New Zealand-Virgin Australia partnership.

The Australian Competition and Consumer Commission (ACCC) had already granted Qantas and Emirates conditional approval for the trans-Tasman leg when it gave the final green light for the pair’s broader global alliance in Mar-2013. Mr Brownlee, who under New Zealand law has the authority to rule on arrangements between two airlines where this involves price or capacity fixing of international air services, had originally been expected to make his decision by the end of Mar-2013.

South African Airways codeshares with Etihad and Jet have mutual advantages for all - except Star

South African Airways has become the latest carrier to join the embrace of the Gulf carriers, signing a codeshare agreement with Etihad which adds 22 new codeshare connections between Africa and the Middle East and follows another important codeshare agreement with India’s Jet Airways. The agreements mark a shift for cash-strapped SAA towards recognition that as an end-of-line carrier it must develop a more virtual long-haul network. Such partnerships are part of SAA’s long term turnaround strategy and allow the carrier to extend its network without the need to commit capital to expensive long-haul aircraft.

SAA acting CEO Nico Bezuidenthout said the codeshare agreements would grow the carrier’s revenue, with initial expectations that the Etihad partnership would add about ZAR100 million (USD11 million) a year to revenue.

Meanwhile Etihad will increase its already comprehensive African coverage with the addition of SAA which improves access to the continent’s biggest economy.

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.

Heathrow Airport's slot machine: hitting the jackpot again?

British Airways now holds more than 50% of the slots at capacity-constrained Heathrow, thanks to its bmi acquisition. Nevertheless, BA had managed to grow its holding for years, mainly due to secondary slot trading. After years of uncertainty over its legality in EU law, the EU clarified its position in 2008 and allowed the practice. It went on to commission a 2011 study which concluded that slot trading had clear beneficial impacts at Heathrow.

In this report, CAPA analyses the small proportion of the total number of Heathrow slot trades where slot values have been reported in the media and elsewhere. For many years until the mid 2000s, the average traded value per daily slot pair calculated from such transactions was around GBP4 million. A series of trades at more than GBP20 million per pair captured headlines in 2007 and 2008 before the market went underground. Surprisingly, after such a long quiet period, 2013 has seen two deals valuing Heathrow slots at GBP15 million per daily pair.