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February 2005 issue

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Ryanair diversifies further

Ryanair is to turn Liverpool in the north of England into its 12th European base, opening up this region to more budget air travellers. The news will be welcomed by language schools in the area, as the airport authorities at John Lennon Airport predict an extra million visitors this year. Ryanair is also increasing its flights elsewhere to turn up the heat on competitor EasyJet.

New routes from London to Brno in the Czech Republic, Granada in Spain and Wroclaw in Poland launch this spring, while increased services on the routes from London to Shannon in Ireland and Nîmes in France also take effect from March.

From Liverpool, flights will be offered to Barcelona, Limoges, Pisa, Cork, Murcia, Shannon, Granada, Nîmes and Venice from March, adding to its current services to Barcelona (Girona), Dublin, Milan and Rome.

Michael O'Leary, Ryanair's Chief Executive, threw down the gauntlet to his competitor. ''Our message to EasyJet is simple,'' he said. ''You can't match Ryanair's low fares. Consumers from Merseyside now have a real low fares airline.''

In November last year, Ryanair also announced expansion plans to Italy, capitalising on the collapse of Italian low-cost carrier Volare. A new service from Paris to Venice has since been launched. ''Even before the collapse of Volare, Ryanair was already Italy's second-largest and lowest fares airline,'' said Ryanair Deputy Chief Executive, Michael Cawley.


Korean Air's bold plans

Air services between Korea and China could soon increase as Korean Air has announced that it intends to increase its services to China as part of the company's focus.

The airline is seeking alliances with Chinese carriers and wants to increase its routes to China from 13 cities to 32 cities within its route network. Cho Yang-ho, Chairperson of Korean Air, said, ''Korean Air will focus on China, which is growing as the centre of the world's economy, so that we could become the world's largest cargo carrier by 2007 and a global top-10 passenger carrier by 2010.''

The airline has also signed a commercial agreement with Chilean carrier LAN that will improve connections between South America and Asia. The agreement covers a code-share deal between the two airlines and will give Korean Air passengers more options for travel to Latin America.

Olaf Kaehlert, the airline's Manager of Passenger Sales & Marketing for Latin America, said the number of passengers flying between Chile and Korea had increased by 58 per cent since September 2004. ''This traffic should [further] increase as a result of the free trade agreement signed this spring between Korea and Chile,'' he said. ''We'll be in a better position to handle this opportunity than any other Asian airline.''


Asia Pacific tipped as growth region

The Asia Pacific region is being tipped by airline manufacturers as the region where the steepest rise in passenger traffic will occur. Boeing said in a statement last year that it believes airlines in the region will need more than 6,400 new aeroplanes by 2023. Randy Baseler, Vice President of Marketing at Boeing, said that the regional airlines would invest around US$673 billion over the next 20 years ''to meet traffic growth and replace older planes''.

Meanwhile, German carrier Lufthansa has revealed that an annual increase in passengers last year of 13.2 per cent was largely due to an increase in customers flying on routes to the Asia/Pacific area. Business was found to be weakest in the Middle East and Africa.

British Airways has announced that it intends to increase services to China and Hong Kong although it has no immediate plans to launch new routes to the region.


Travel Update

Visitors to London were at the highest level ever recorded in summer 2004, according to travel authority, VisitBritain. Arrivals grew by eight per cent in the June to August period, year on year. Tom Wright, Chief Executive of VisitBritain, said, ''Visitors to Britain are now exceeding levels seen prior to September 11 [2001] in terms of visits. [In November], for the first time, expenditure was also at a record high.''

Austrian Airlines Group posted a better-than-expected profit for the first nine months of 2004, and then announced that it would cut medium-haul flights by three per cent because of higher fuel prices. Meanwhile, Vienna's airport operator, Flughafen Wien, said passenger traffic in October 2004 was 12.3 per cent up on the same month in the previous year.

Thai AirAsia, the budget operator launched by Malaysia's AirAsia group, has announced that it does not expect to reach profitability until the end of 2005, a year later than previously expected, because of rising fuel costs.

Singapore and Sri Lanka have forged an open skies deal that allows airlines to operate without restriction between the two countries. Negotiations for a similar open skies deal between Singapore and Australia have reportedly stalled.

Passengers travelling with American Airlines will have to bring their own pillows with them in the future, as the carrier has revealed that one of its cost-cutting measures is to remove pillows from half of its fleet. It says it will save several hundred thousand dollars by doing so.

Although many carriers in the USA are struggling as rising fuel costs and increased competition impact on their balance sheets, the USA's Air Transport Association has announced that it expects a record 685 million people will have travelled on US airlines in 2004. The rise of the budget airline industry is thought to have been one factor that contributed to this trend.

Slovenian airline Adria and Croatia Airlines have both joined the Star Alliance. Chief Executive, Jaan Albrecht, said the alliance wanted to strengthen its position among the 10 new European Union member states.

Low-cost airline Flybe is launching seven new routes from Birmingham International Airport in central England to Spain, Portugal and Switzerland. Flights to Alicante, Malaga, Murcia, Faro, Palma and Almeria launch in March. A Geneva service will follow later in the year.

Air India is planning to double the size of its fleet by buying up to 50 new planes, according to press reports. Meanwhile, an extra 21 flights have been authorised between India and the UK by officials and the increased services have been distributed to British Airways, Virgin Atlantic and BMI. Virgin Atlantic plans to operate a daily service to Delhi from February.

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