All Nippon Airways Immediately Operate Boeing 787 Dreamliner Aircraft

Plane-maker to celebrate in Everett, Wash., but experts note plenty of challenges ahead for Chicago-based Boeing.

Boeing marks a milestone in its long history Sunday when the aircraft-maker officially delivers the first Dreamliner, a twin-aisle plane that offers the best fuel economy and range for a craft its size and promises passengers far greater comfort while flying.

“It’s a very big deal, not just for Boeing but for the airline community,” said Aaron Gellman, professor of transportation at the Kellogg School of Management at Northwestern University.

The journey to delivering the 787 aircraft, which sells for about $185 million, has been long and problem-plagued for Boeing, which this month marks the 10-year anniversary of moving its world headquarters to Chicago.

Sunday’s contractual delivery of the plane to All Nippon Airways and a celebration on Monday in Everett, Wash., come about three years late because of design and construction problems. Those troubles earned the 787 jet the unflattering nickname “7-late-7.” ANA originally ordered the plane in 2004 for delivery in 2008.

Delays haven’t hurt sales, however. Boeing said it has more than 800 orders from 56 customers around the world.

While the 787 aircraft itself is a big deal, the celebration around finally delivering the first one is more fanfare than progress, said Richard Aboulafia, aircraft and aviation analyst with Virginia aerospace market analysis company Teal Group. More work lies ahead for Boeing, which will be pressed to deliver on its promises for the much-ballyhooed plane, he said.

“They have so many more challenges ahead of them,” he said. Chief among those are figuring out how to build the plane at a profit — Boeing will likely lose money for years on the ones it builds initially — and ramping up production to the rate of 10 planes per month by 2013.

The Dreamliner is the most technically advanced commercial aircraft ever built, and its information technology systems have been a selling point for Boeing, along with the jet’s lighter, largely composite structure, which promises greater fuel efficiency and creature comforts. The first version will hold 210 to 250 passengers; a typical 737-size plane holds about 150. A subsequent version will carry nearly 300 passengers.

For passengers, there’s the industry’s largest windows and overhead bins. The smoother-riding and quieter plane will have wider aisles and seats, lower cabin pressure and cleaner air using a filtration system that will remove offensive odors. The windows will even be dimmable, via electrochromatic window shades rather than physical pull-down shades. Boeing says these features combine to allow passengers to arrive at their destinations more refreshed.

For airlines, the midsize 787 offers fuel economy and the ability to fly long range.

If it lives up to expectations, the Dreamliner would burn 20 percent less fuel than other midsize jets but boast the range of far larger aircraft: 7,650 to 8,200 nautical miles. That would enable carriers to bypass airport hubs and directly connect city pairs, like Auckland, New Zealand, and Houston, that otherwise wouldn’t generate enough passenger traffic to fill jumbo jets.

“It is going to enable airlines to fly between points that they never served directly before,” Gellman said.

Air India Plans Purchase 27 Dreamliner Aircraft from Boeing

Air India has decided to go ahead and purchase the 27 Dreamliner aircraft from Boeing despite poor financials and doubts about its ability to repay the 17,000-crore loans needed for the planes.

The Air India board, which met in New Delhi on Thursday, agreed that the 27 aircraft are essential to expand operations and swing the airline back into profitability. Rohit Nandan, the chairman and managing director, said that the board has recommended purchase but declined to elaborate. The recommendation will now be discussed by the group of ministers (GoM) who will take the final call when they meet some time next month.

The national carrier’s fortunes have plummeted in recent years, thanks to rising fuel prices, the global slowdown and a hastily-arranged, ill-advised merger with Indian Airlines. Its monthly loss ( 600 crore) is equivalent to the market cap of a small-cap company and its brand image has been badly dented by a series of mishaps both in the air and on the ground. It has accumulated losses of 13,000 crore.

A number of people, including the civil aviation minister, Vyalar Ravi, have raised doubts about the airline’s ability to pay for the purchase. Talking to ET a few days ago, Ravi had said that Air India does not have the money. “Well, everybody knows about the financial health of Air India. That is precisely the reason I say AI simply does not have the funds to pay for the Dreamliner Boeing 787 aircraftâ that is the fact,” he told ET two days ago.

Though Boeing has offered help in the form of loans at low rates from US Exim Bank, Air India’s current financial predicament could impair its ability to service the loan. Its debt burden of 43,000 crore is likely to swell to an unmanageable 60,000 crore after the Dreamliner buy.

But the other big problem is that orders have already been placed and the aircraft is likely to be delivered in the next few months. Cancelling or restructuring the order now will be an extremely time-consuming and controversial exercise apart from leading to a diplomatic row between India and the US.

One AI member said that the board discussed the cost and the need for more aircraft. “Air India wants the Dreamliners but there are issues about repayment. Who’ll pay for the loans remains the bone of contention,” he said on condition of anonymity.

Virgin Australia Airlines to Introduce Flights Between Asian Countries and Northern Australia

Virgin Australia plans to introduce flights between Asian countries and remote northern Australia as part of any code share deal with Singapore Airlines.

However Virgin chief executive John Borghetti would not reveal what routes he was considering.

One possibility would be Broome, in Western Australia, which is a popular tourism destination but had virtually no international inbound flights.

The airline’s proposed partnership with the Singapore carrier is awaiting regulatory approval and would be the fourth piece in an alliance deal with overseas carriers that gives Virgin access to 400 destinations.

‘It will enable us to jointly look at routes, it will be good for tourism because it may open routes,’ Mr Borghetti told a business luncheon in Melbourne about the possible partnership with Singapore Airlines.

‘There are routes in the northern part of Australia that are not connected to Asia.’

He said that Virgin had already started luring ‘thousands upon thousands’ of customers to its new Velocity frequent flyer program, including a new top tier platinum corporate status.

Mr Borghetti’s plan is to capture a 20 per cent share of the corporate travel market dominated by Qantas. This follows Virgin being re-branded Virgin Australia from Virgin Blue in May.

‘We’ve set ourselves a three-year plan … we will be the airline of choice in this country, no doubt about that,’ he said.

Virgin’s other code share partners are Delta Air Lines of the US, Etihad Airways and Air New Zealand.

In the 10 years since the Australian airline Ansett collapsed, there had been no competition at the ‘top end’, Mr Borghetti said.

‘One player has a monopoly over the top end, what we’re doing is re-dressing that,’ Mr Borghetti said.

Since Ansett stopped flying, business class prices had increased while ‘leisure’ fares were 50 to 60 per cent lower.

‘What that tells you is the competition is all down here, and someone’s making a lot of money up here … so how do we get a piece of that?’ he said.

Virgin could not stay exclusively a low-cost carrier any longer if it wanted to survive, because it left it too exposed to discretionary spending by leisure customers, Mr Borghetti said.

The airline announced last month a full year loss of $67.8 million for 2010/11, with natural disasters in Australia and abroad affecting earnings. Virgin shares were steady at 30 cents on Friday.

Qatar Airways Adds Three Flights on Doha-Dubai Route

Qatar Airways is stepping up frequency on its Doha to Dubai route with three additional daily flights from August 25, the airline said on Monday.

The extra flights will take total capacity up to 11 services a day. A mix of morning, afternoon and late night flights to Dubai will give more travel options, the carrier said in a statement.

Qatar Airways CEO Akbar Al Baker said: “Additional capacity on our most popular route demonstrates the level of confidence and commitment we have to a key neighbouring market.”

Al Baker added: “It is also indicative that as we develop our international network with the introduction of new routes, we want to provide the travelling public greater travel options between Doha and our feeder markets such as Dubai.”

Qatar Airways currently operates flights to over 100 destinations across Europe, Middle East, Africa, Asia Pacific, North America and South America.

Recently named Airline of the Year 2011 in the prestigious annual Skytrax World Airline Awards, Qatar Airways has added 10 new routes to its global network so far this year.

The airline will add further routes from Doha over the next few months, including the Bulgarian capital Sofia on September 14; Norwegian capital Oslo from October 5; Entebbe in Uganda from November 2; Azerbaijan capital, Baku on November 30; and the Georgian capital Tbilisi, also on November 30.

Emirates Airlines Launch Flight Service to Malaysia With A380 superjumbo

Emirates Airline said on Tuesday it was to add Kuala Lumpur, the capital of Malaysia, to its list of destinations served by its A380 superjumbo.

The giant plane will start services to Kuala Lumpur on December 1, the Dubai-based carrier said in a statement.

Emirates’ partnership with Malaysia began in October 1996 when the airline launched its services to Kuala Lumpur via Dhaka.

By 2006, the airline connected Dubai and Kuala Lumpur non-stop and today operates 21 non-stop flights a week between these two important cities.

The Emirates A380 arrival will be the first scheduled A380 service to Malaysia by any airline, the statement added.

Richard Jewsbury, Emirates’ senior vice president, Commercial Operations Far East & Australasia, said: “Emirates has always been committed to Malaysia and the launch of the A380 on the route follows strong and increasing demand, not just from business travellers, but leisure travellers as well, boosting Malaysian tourism.”

Trade between Malaysia and the UAE has expanded more than three-fold over the last decade from $1.16bn in 2000 to $4.59bn last year.

The airline’s fleet of 15 A380s operate on services from Dubai to London Heathrow (double-daily), Manchester, Paris Charles de Gaulle, Toronto, Seoul, Bangkok, Beijing, Jeddah, New York, Hong Kong, Sydney, Auckland and most recently Shanghai.

The A380 announcement comes as Emirates Airline remains frustrated in its efforts to launch the superjumbo to India.

Emirates celebrated the opening of the new terminal at the New Delhi airport last year by flying in a A380 but he plane has not returned since.

India’s government has not acted on requests to change regulations that bar overseas carriers, including Emirates and Deutsche Lufthansa, from flying aircraft bigger than the Boeing 747 into the country. That rules out the A380.

The two airlines are eager to tap India’s growing travel market with the A380, the world’s biggest passenger aircraft.

Singapore Airlines Chooses Boeing 777 Aircraft for Long Haul Services

The new Singapore-based low cost carrier being set up by Singapore Airlines has surprised the airline industry by choosing Boeing 777 aircraft for its long haul services.

Rivals Jetstar and AirAsia X both use Airbus A330 aircraft.

But the move reflects the fact the planned carrier will be using its parent’s ‘hand-me-down’ fleet for which is already has aircraft maintenance operations for servicing. Singapore Airlines has long been committed to the 777 but also has A330s in its line-up.

The new subsidiary will fly the Boeing 777-200 model when it launches flights next year, after a “detailed evaluation” which no doubt considered the cost of leasing or buying new aircraft as opposed to redeploying the Singapore Airlines planes which are in line for replacement when new 787 aircraft start joining the fleet next year.

“Aircraft will initially be acquired from parent company Singapore Airlines and reconfigured in a new seating layout.

“The B777-200’s proven versatility and reliability are key deciding factors in the selection of the aircraft. The B777 family of aircraft has been a mainstay of the Singapore Airlines fleet since its introduction in 1997,” the statement said.

Campbell Wilson, CEO of the new, as yet nameless, airline said: “The selection of the initial fleet marks another milestone in the establishment of the new airline. The process is progressing well for our launch next year.”

The new carrier will operate under a no-frills, low-fare model serving medium and long-haul routes. It will be operated independently and managed separately from Singapore Airlines.

Details of its branding, products and services, and route network will be unveiled in the coming months.

Singapore Airlines Adds Flights to Mumbai as Part of Regional Route Expansion Program

Singapore Airlines (SIA) has said it will increase flights to Mumbai to 17 from 14 at present, as part of its regional route expansion from end of October and March 24 next year, according to media reports.

SIA said its weekly flights would also double to 14 to Guangzhou in China and increase weekly services to Bangkok to 35 from 28, ‘The Straits Times’ reported today.

Citing strong growth in regional travel, SIA said its subsidiary ‘SilkAir’ would also increase flights to Bangalore as well as Chengdu and Chongqing in China.

SIA said it was also seeing a pick-up in travel to Japan, after the earthquake and radiation scare of March.

SIA would resume its twice daily flight to Tokyo’s Haneda Airport, the report said.

The SIA flight expansion comes after the International Air Transport Association reported this week a 9.5 per cent year-on-year growth in the number of first and business class travellers and 5.5 per cent growth in economy class in May this year.

Elsewhere, Austalia’s Jetstar is investing USD 500 million to add seven new planes to its fleet of 14 by this year-end, it said.

With more planes, Jetstar would increase its routes with flights to Beijing and Ningbo in China and Hanoi in Vietnam, the report added.

Emirates Airline Plans to Increase flights to Australia to 100 Flight Weekly

Dubai flag carrier Emirates Airline hopes to increases its flights to Australia to 100 a week, after seeing a 52 percent rise in profit for the year to $1.5bn.

The Arab world’s largest airline currently operates 70 flights a week to Australia but sees opportunity for further expansion, said chairman Sheikh Ahmed bin Saeed al-Maktoum.

“We are entitled to operate about 85 flights to Australia under the bilateral, When we meet that I am sure that we try to bring it to 100,” he said.

Emirates would require permission from Australian travel authorities to increase capacity.

“I hope Australia will not mind because it is good business for both of us,” Sheikh Ahmed said.

Emirates, which saw off surging oil prices and political unrest to post a 25 percent rise in revenues for 2010 of $14.8bn, has drawn fire for its ambitious expansion plans. Rival western carriers claim Gulf airlines use unfair subsidies and state funding to finance aircraft deals and draw long-haul traffic into their hubs.

Canada’s refusal to grant new landing rights to Emirates and Etihad spiralled into a diplomatic row between the two countries last year.

In Germany, national carrier Lufthansa has lobbied its government to deny Emirate’s additional landing slots at Berlin’s new airport, while British Airways has also criticized the Dubai carrier’s expansion plans.

Emirates took delivery of eight new aircraft during the year, including seven of its flagship A380s. The airline has a further $13.4bn worth of aircraft on order and plans to increase its fleet to eventually include 120 A380s superjumbos.

Capacity between the UAE and Australia has surged over the last decade, with Emirates operating just four flights a week to Australia when it launched the route in 1996.

In February Australia’s competition watchdog cleared the way for the country’s no.2 airline Virgin Blue to tie-up with Abu Dhabi’s Etihad Airways for five years, giving Virgin Blue a firmer footing in its plans to expand on international routes.

Emirates said it carried 31.4 million passengers in 2010 and its passenger load factor stood at 80 percent for the 12 month period.

Emirates Airlines Reported Full Year Profit Increase 51.2 percent as Premium Travelers Traffic Growth

The parent of Emirates Airline on Tuesday reported a 51.2% rise in full-year profit as the world’s largest international carrier by traffic saw business from premium travellers return to pre-crisis levels.

The Dubai-based airline shrugged off the impact of turmoil in the Middle East and North Africa as traffic through its hometown hub surged, with double-digit gains in both passenger and cargo volume.

Emirates’ rapid expansion and huge order book–at $66 billion it accounts for 10% of outstanding commercial business at Airbus and Boeing Co. (BA)–makes it a key barometer of the global airline industry.

The airline’s operating margin of 9.9% in its fiscal year to Mar. 31 topped almost every other large international airline, and the record earnings saw a four-fold rise in the bonus paid to staff to an equivalent of 12 weeks pay, pushing labor expenses up 20%

“We are fortunate to be based in the Middle East where regional passenger seats grew by 17.8% compared to a global 8.2% growth,” said Sheik Ahmed Bin Saeed Al Maktoum, chairman of the state-controlled group.

Sheik Ahmed said profit would have been AED1 billion ($272 million) higher had it not been for the increase in oil prices, with fuel expenses last week accounting for a record 43% of operating costs.

Transfer traffic through Dubai accounts for around 60% of the airline’s total business, with passenger numbers up 15% to 31.4 million over the past year, and cargo rising almost 12%.

Emirates and rivals such as Abu Dhabi-based Etihad Airways and Qatar Airways have capitalized on their geographical location to use new long-range aircraft to funnel business through their hubs.

Nigel Page, Emirates head of the Americas, said the airline has leveraged changing trade patterns to capture business, with flows to and from Africa now going through the Gulf rather than via European airports.

The Americas was Emirates’ fastest-growing region last year with revenue up 37.9% while sales in its largest geographical area of operations–east Asia and Australiasia–rose by 30.9%.

Business in the Gulf and the Middle East was still up 14.2% despite regional turmoil which saw flights to Tunisia temporarily halted, while Libyan services remain shuttered. Flights to the Ivory Coast resume on May 12.

Page said the regional problems had actually helped Dubai’s financial recovery after its own debt crisis as companies relocated staff to the emirate.

Emirates Group reported net profits of AED5.46 billion in 2010/11 compared with AED3.62 billion a year earlier, with revenue–which includes its airport and travel arms–up 29 at 53.1 billion.

The airline unit’s passenger seat factor, a key measure of capacity utilisation, rose to a record 80%, from 78.1% in the year before, with profit rising to $1.5 billion from $964 million on a 25% rise in revenue. Capacity rose 15.8%.

Emirates expect delivery of six Airbus A380s and 13 Boeing 777 planes this year, while four new routes will be added: Geneva, Copenhagen, Buenos Aires and Rio de Janeiro. It is the largest operator of both aircraft types.

Last week, Sheik Ahmed said the government-owned airline is in no hurry to sell shares to the public. He said the decision on whether to launch an initial public offering rests with the government, but ruled out any IPO in either 2011 or 2012.

EasyJet Increased Airline Booking Fees

Flying in the face of a recent Office of Fair Trading investigation which highlighted unreasonable booking fees, EasyJet has increased its fees.

It is the third increase in seven months for the low-cost airline, which now charges travellers £8 for booking their flights using a debit card, a rise from the old fee of £5.50.

Passengers paying for their flights using credit cards now have to fork out a booking fee of either £12.95 or £8 plus 2.5 per cent of the total cost of the flight – whichever is the highest.

Which?, the consumer magazine, complained to the Office of Fair Trading earlier this year, saying that, while some airlines were levying hefty fees, the actual cost of processing a credit or debit card transaction was just 20 pence.

Ryanair also increased its credit card charge in March and is now taking £6 per person, per flight. Both airlines waive the fees for travellers using cards such as Mastercard Prepaid or Visa Electron, both of which have partner agreements with the airlines.

A spokesman for easyJet said: “EasyJet’s booking fee remains one of the cheapest across the airline industry – with other airlines charging per person per flight so that a family of four would be charged £48 rather than the £8 they would pay on easyJet – and the airline’s fares remain extremely competitive with all rivals.”

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