May 2007 issue

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Airport expansion
in India

India is aiming to improve its airport infrastructure in a bid to remain competitive in the global aviation market. Passenger capacity out of Delhi’s Indira Gandhi Airport is set to double as work commences on a billion dollar revamp of the airport. India’s civil aviation secretary, Ashok Chawla, also recently announced that a revamp of airports in Kolkata and Chennai is likely.

By 2010, 37 million domestic and international passengers are expected to pass through New Delhi’s airport each year, but the airport re-design has been envisaged to handle a maximum of 100 million passengers per annum.

The airport overhaul, prompted by complaints of poor airport infrastructure and inadequate facilities, will ease passenger congestion and aviation traffic and will ultimately modernise the airport in time for the Commonwealth Games in 2010.

The US$93 billion project includes a new two-tier terminal, housing restaurants, bars and shops, and a third runway capable of handling the next generation of aircraft, the Airbus A380.

According to Delhi International Airport Limited (Dial) Managing Director, Srinivas Bommidala, “Delhi will boast a world class airport which will cater to growing aviation traffic [and] serve as a benchmark for other airports”.

Dial Chairman, G M Rao, added, “This is the first step towards the realisation of our dream for India – the dream to build a gateway for its rich cultural heritage, values, traditions and economic potential that the Indian nation offers to the rest of the world.”

EU bans Pakistani planes

The European Union (EU) has banned 35 aircraft, operated by Pakistan International Airlines (PIA), from flying anywhere in the region after concerns were raised regarding safety regulations.

Airworthiness, technical ability and other cabin-related issues were discussed in recent talks between EU officials and PIA representatives with officials advising the airline to use its newer aircraft on all flights bound for Europe. Eight out of the 27 countries PIA flies to are based in the EU and its most lucrative routes include Britain and the Middle East. Only the Boeing 777s were cleared to fly to the EU, forcing the airline to consider leasing aircraft and flight crew in order to meet passenger demand.

PIA spokesman, Nasir Jamal, said that such restrictions were only temporary and that, “once necessary refurbishment and cabin upkeep [has been] completed” the Boeing 747 and Airbus 310s would resume their services.

The EU has recently lifted a ban on Thailand’s Phuket Air. Transport Commissioner, Jacques Barrot, said it had been removed from the blacklist after “taking decisive action to remedy its failings”.

Malaysia Airlines making profit

After continued losses in net profit, Malaysia Airlines posted a US$35 million increase in revenue for the fourth quarter last year and cites better yields and cost reductions as factors contributing to this success. Chief Executive, Idris Jala, said the airline was “fully alive and kicking” and that its crisis period was over.

The airline hopes to post a profit of at least MYR50 million (US$14 million) in 2007 and is setting up a new domestic and regional operation as it competes with budget operator Air Asia.

Increasing fuel prices and strong competition have put pressure on the airline in recent months, but the increase in fuel prices was eased somewhat by hedging 68 per cent of the carrier’s fuel requirement for 2007, thus resulting in a marginal fuel cost increase of 2.8 per cent.

Meanwhile, the Malaysian government has announced that a new Malaysian airline is seeking permission to launch services from Penang this year, suggesting that competition in the domestic marketplace will remain high.

USA and EU agree tentative open skies deal

The European Union (EU) and the USA are reported to have reached an agreement in principle as to the structure of an open skies deal that will restrict US ownership of EU airlines while including an antitrust immunity clause to facilitate airline alliances.

The deal will generate a reported additional 26 million transatlantic passengers over the next five years and will create 80,000 new jobs on both sides of the Atlantic, if approved by EU Transport Ministers. The two trading partners have been slowly working towards a bilateral agreement for years.

“Our initial reaction is that there seems to be a substantially improved balance in the wording of the agreement,” said Ulrich Schulte-Strathaus, Secretary of the Association of European Airlines.

Travel Update

The aggressive mainstream expansion of Australia’s low-cost budget airline, Virgin Blue, continues as the carrier is looking into ordering several new Boeing 777-300ER aircraft ahead of proposed route expansion to the USA. Chief Executive, Brett Godfrey, said the new service would be ‘US- centric’ and sees the airline moving away from its budget roots, targeting international travellers. In fact, the airline is reported to be looking into setting up a separate budget brand as it presses ahead with moves into the international market.

China's third-largest carrier, China Eastern Airlines, has commenced talks with global airline alliance, Oneworld. The alliance is looking to expand within the growing Chinese market and is currently undergoing the biggest expansion in its history. Meanwhile, JAL, the Japanese airline, is set to join Oneworld this month.

Hong Kong International Airport , is upping security measures by screening all liquids, gels and aerosols taken on board departing aircraft. The new guidelines, formulated by the International Civil Aviation Organisation (ICAO), were devised following the foiled liquid explosive plot in the UK last year.

Following the start of the Brussels to Geneva service in June, low-cost budget airline, EasyJet, is looking to expand its operations arm at Brussels Airport. Meanwhile, in February, a 17th EasyJet base was launched at Madrid Barajas airport, servicing 18 routes, including two in North Africa. Over two million passengers are expected to utilise the Madrid EasyJet service this year.

After purchasing rival airline Dragonair in October 2006, Cathay Pacific, the third biggest airline in Asia, posted a 24 per cent rise in net yearly profit thanks to passenger revenue and the hedging of fuel costs. The merger has also opened up a network of alternative routes for overseas passengers and enabled Cathay Pacific to increase passenger capacity, giving it a more secure market share.

Atlanta’s Hartsfield International in the USA has again been ranked the world’s busiest airport, according to the Geneva-based Airports Council International. In 2006, 84.8 million passengers went through the Atlanta terminal, a 1.2 per cent decline on last year. Chicago’s O’Hare and London’s Heathrow took second and third spot, dealing with 76.2 and 67.5 million passengers respectively.

Munich Airport intends to become a leading European hub with plans for a third runway confirmed. Dr Michael Kerkloh, President of the airport operating company, FMG, said, “This is an extremely important step toward achieving our capacity expansion goals.” The airport authorities believe that increased air traffic over the coming years will exhaust current runway facilities.

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