CAPA News Briefs

Japan Airlines (JAL) and Garuda Indonesia signed (03-Oct-2024) a joint business agreement, after Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLITT) approved JAL's antitrust immunity application. JAL president and group CEO Mitsuko Tottori stated: "We expect to launch this joint business relationship in the second quarter of 2025 to provide additional travel benefits for our mutual customers". As previously reported by CAPA, the two airlines commenced codeshare services in Oct-2018. [more - original PR]

IATA director general Willie Walsh reported (03-Oct-2024) "good news" in air cargo markets for Aug-2024, with the sector recording a second consecutive month of record high demand for the year to date. Mr Walsh noted yields are up 11.7% compared to 2023, 2% compared to Jul-2024 and 46% compared to pre-pandemic levels. Mr Walsh added: "This strong performance is underpinned by slow but steady growth in global trade, booming e-commerce, and continuing capacity constraints on maritime shipping". [more - original PR]

KLM announced (03-Oct-2024) a set of measures aimed at improving the company's operational and financial performance. These include increasing productivity, simplifying the organisation, cutting costs and deferring or postponing investments. KLM stated that despite revenue growth, these interventions are necessary due to the rising cost of equipment, staff and airport fees, as well as its ongoing fleet renewal. KLM aims to improve its operating result by EUR450 million in the short term, targeting structural profit margin above 8% by 2026 to 2028, in line with Air France-KLM's group ambition. Key actions include:

• Increase labour productivity by 5% by 2025, including through automation, mechanisation and reducing absenteeism;
• Address pilot shortages to ensure "we can operate all flights with our pilots", with a better balance between inter continental and European flights;
• Address technician shortages and supply issues to reduce cancellations, with possible partial outsourcing of maintenance if needed;
• Reconsider and defer non-essential investments, such as new headquarters and engineering and maintenance buildings, while aiming to maintain fleet investments;
• Enhance onboard services, trialling an expanded catering offer and optimised aircraft layouts to boost revenue by EUR100 million p/a;
• Simplify the organisation, increase synergy, eliminate overlap and overhead, including through the planned reorganisation of flight services and training organisations;
• Explore options for outsourcing, divesting or discontinuing activities that do not directly contribute to flight operations.

The Works Council and trade unions have been informed of the proposed measures and objectives and will be consulted through the standard consultation process. President and CEO Marjan Rintel stated: "KLM is suffering from high costs and shortages of staff and equipment", noting that "our aircraft are full, but our capacity is still not back to pre-corona levels". Mr Rintel added that in order to effectively "remain at the forefront of customer and employee satisfaction as well as sustainability", the carrier "must make clear and decisive choices now". [more - original PR]

Argentina's Government passed (02-Oct-2024) a decree officially declaring Aerolineas Argentinas as an organisation subject to privatisation. The decree states privatisation of the carrier is necessary to reduce Argentina's public spending, citing the airline's poor financial performance and "inefficient" cost structure. The privatisation process will encompass methods including the sale of assets and share placement. [more - original PR - Spanish]

Rossiya - Russian Airlines, via its official Telegram account, stated (01-Oct-2024) it rerouted Sochi-Dubai World Central service on 02-Oct-2024 to operate via the airspace of Türkiye, Egypt and Saudi Arabia, with a technical stop in Hurghada. Saint Petersburg-Dubai World Central service was rerouted to operate via the airspace of Turkmenistan, Afghanistan and Pakistan, with a technical stop in Samara. As previously reported by CAPA, Russia's Federal Air Transport Agency advised carriers to avoid the airspace of Israel, Iran and Iran.

Sydney Kingsford Smith Airport announced (02-Oct-2024) China Southern Airlines plans to commence four times weekly Beijing Daxing-Sydney service with A330-300 equipment on 13-Dec-2024. Sydney Kingsford Smith Airport group executive for aviation growth & group strategy Greg Botham stated: "We are proud to be the first airport in Australia offering flights to Beijing Daxing". The airline will be the sole scheduled operator on the route, according to OAG. [more - original PR]

Emirates Airline resumed daily Dubai-Lagos service using Boeing 777-300ER equipment on 01-Oct-2024, according to OAG. The carrier last operated the service in Oct-2022 and is the sole scheduled operator on the route.

Emirates Airline announced (01-Oct-2024) the deployment of retrofitted Boeing 777 equipment on one daily Dubai-Riyadh frequency. Riyadh becomes the carrier's first destination in the GCC to be served with the retrofitted aircraft type, which features Emirates new business class cabin and premium economy product. Emirates stated its fleet fitted with premium economy seats is set to reach 48 aircraft by the end of 2024 and will serve 27 destinations. [more - original PR]

Virgin Atlantic Airways announced (30-Sep-2024) Flying Club members will be able to pay for "any seat onboard" using Virgin Points, effective 30-Oct-2024. The carrier also plans to launch a new Saver reward seat product for seats priced "at or below today's prices", as well as increase the amount of Virgin Points earned on Upper Class tickets (up to 50%) and Premium tickets (up to 75%). [more - original PR]

Qantas Airways operated (01-Oct-2024) its inaugural A380 flight from Sydney to Johannesburg on 30-Sep-2024, the first time the aircraft type has been deployed between Australia and Africa. The A380 will operate up to six times weekly on the route, doubling capacity with an additional 130,000 seats between Australia and Africa per year. The A380 has capacity for 485 passengers across four cabins, with the introduction of the aircraft seeing a return of first class on the route for the first time since 2018. Qantas First features 14 individual suites arranged in a 1-1-1 configuration which convert into a 212cm bed. The upgauge will also more than double the number of premium economy seats available between the cities. [more - original PR]

Qatar Airways confirmed (01-Oct-2024) its intention to acquire a 25% minority stake in Virgin Australia from Bain Capital. Details include:

• Subject to authorisation from the Australian Competition and Consumer Commission, the cooperation will enable Virgin Australia to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha, connecting into Qatar Airways' global network;
• The additional flights will open up over 100 new connecting itineraries across Europe, the Middle East and Africa for Australian travellers;
• Proposed wet lease services will commence in mid-2025, enabling Virgin Australia to assess longer term merits and viability of widebody aircraft;
• The arrangement will provide access to a greater range of international destinations with improved schedules and frequencies, as well as increased earn and redemption opportunities for members of Velocity and Qatar Airways' Privilege Club, and broader access to value fares;
• The carriers plan to place focus on sustainability, including the development of sustainable aviation fuel;
• The partnership will also explore opportunities at Western Sydney International (Nancy-Bird Walton) Airport and its economic ecosystem, including jobs and training opportunities.

Virgin Australia Group CEO Jayne Hrdlicka said the arrangement will "further strengthen Virgin Australia's ability to compete over the long term". Ms Hrdlicka noted an estimated AUD3 billion (USD2.07 billion) economic benefit of new proposed long haul services between Australia and Doha through incremental visitor flows over the next five years. She added: "Additional benefits will flow from increased freight capacity, supporting Australia's high-value exports to markets such as the Middle East and Europe". Qatar Airways Group CEO Mohammed Al-Meer stated: "The investment further demonstrates our strategic alignment with Virgin Australia and our collective ambition to deliver the best possible service and value to Australian passengers". Mr Al-Meer added: "This agreement will also help support Australian jobs, businesses and the wider economy". [more - original PR]

US Senator Dick Durbin introduced (26-Sep-2024) the Protect Your Points Act, aiming to strengthen consumer protections by requiring increased transparency from airline frequent flyer points and loyalty programmes. The legislation would provide the US Department of Transportation (DoT) and the Consumer Financial Protection Bureau with authority to:

• Prohibit airlines from including provisions in their frequent flyer programmes and co-branded credit card terms of service that reserve their right to make changes at any time without notice to customers, and instead require airlines to provide at least one year's notice of any changes to terms of service or any actions that would devalue or jeopardise accrued points;
• Require airlines to prominently display a disclosure of the financial value of one point/mile, updated in real time, within 90 days of enactment;
• Require carriers to display airfare and add-on pricing concurrently in dollar value and points/miles value so that consumers can easily compare the worth of their points, within one year of enactment;
• Ban junk fees related to points/miles by ensuring that consumers are allowed to transfer points to family members or other participants in the same programme and prohibiting airlines from charging fees to do so;
• Prohibit carriers from limiting the number of points/miles that can be transferred to another traveller's account and ensure that any points/miles remain of equal value once transferred;
• Prohibit accrued points/miles from expiring.

Senator Durbin stated: "Without adequate oversight, airlines are taking advantage of their customers by offering grandiose rewards, only to change the terms and conditions without consumers' knowledge… If these programs are as valuable to consumers as the airlines claim they are, the airlines should have no trouble taking these simple steps to make them more transparent". [more - original PR]