Tuesday, 21 March 2017

America restricts large electronic devices on all flights from the Arab world

Full article on economist.com

Passengers flying nonstop to America from anywhere in the Arab world are now banned from bringing large electronic devices in their carry-on luggage. The Associated Press, citing American government officials, says the restriction applies to eight countries: Egypt, Jordan, Kuwait, Morocco, Qatar, Turkey, Saudi Arabia and the United Arab Emirates. But the only other Middle Eastern or North African country with passenger flights to America is Israel (which is also the country in the region that American carriers fly to). That makes the measure, in effect, a pan-Arab ban. All devices larger than a mobile phone must be checked in under the new rules, including laptops, Kindles, cameras and portable DVD players...

Wednesday, 15 March 2017

Air Baltic gaining altitude

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Martin Gauss is a man who understands only too well the perils of running a state-owned airline. In 2012, shortly after he stepped down as chief executive of Malév Hungarian Airlines, the European Union ordered his former employer to repay €130 million of illegal state aid. Unable to do so, Malév, one of Europe’s oldest flag-carriers, ceased operations.

Its demise came just three months after Gauss had agreed to steer another troubled eastern European flag-carrier: Air Baltic. Within one year, history was repeating itself and Brussels was launching a new investigation into the Latvian airline.

The similarities, however, end there.

Whereas Malév relied on subsidies from its government owner to stay afloat – violating competition laws in the process – Air Baltic deployed private-sector efficiency and commercial sustainability to get its house in order. The EU’s two-year investigation failed to unearth any wrongdoing by the state-owned carrier, clearing the way for a bold new future in Latvia’s picturesque capital Riga...

Loganair's independence vote

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Loganair’s decision to end its franchise agreement with Flybe amounts to a dramatic vote for independence by the Scottish carrier, returning commercial decision-making to Glasgow after 24 years as a white-label operator.

The airline has promised to create a “bold new corporate identity” when it parts ways with Flybe in September, most noticeably by phasing in a Scottish livery with an eye-catching red and black tartan design. An in-house reservations system should also go live by March, enabling the company to take direct bookings through its website.

Independence will further allow Loganair to take back control of its product and pricing strategy, amid accusations of poor service standards and exorbitant inter-island fares under Flybe’s watch...

NG conversions struggle to take off

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Aviation consultancy Flight Ascend predicts global demand for 1,530 jet conversions over the next two decades – more than 70% of them narrowbodies – as passenger airlines switch to the latest generation of fuel-efficient planes, and older models are re-purposed for a new life flying cargo. The work is conducted by a handful of highly specialised companies that obtain Supplemental Type Certificates (STCs) for their designs from national regulators.

Aircraft valuations are the main factor in determining the viability of such projects, with cargo customers routinely shelling out $3.5 million for conversions and $1.5 million for maintenance on top of base prices for narrowbodies. Older, more affordable models like the Boeing 737 Classics (-400s and -300s) therefore dominate the conversion market. But as the availability of Classics dwindles, the industry is turning its attention to younger – and much pricier – 737NGs (-800s and -700s), the current generation of narrowbody passenger jets...

Tuesday, 14 March 2017

Middle East slowdown: Narrowing the gulf

Full article on economist.com

Last April, Etihad Airways, the flag-carrier of the emirate of Abu Dhabi, claimed that 2015 had been its fifth consecutive year in the black, with net profits of $103m. James Hogan, the firm’s chief executive, hailed the result as proof that Etihad is a “sustainably profitable airline”. Yet less than one year on, both Mr Hogan and his chief financial officer, James Rigney, have been eased out amid a “company-wide strategic review” to “improve cost efficiency, productivity and revenue”; reforms ill-befitting a healthy business. Just across the sand, Emirates, the flag-carrier of Dubai, has deferred orders for 12 double-decker Airbus A380s in response to a 75% drop in profits. Qatar Airways, the region’s other super-connector airline, has abandoned plans for a subsidiary in Saudi Arabia. After years of uninterrupted and speedy growth, the Gulf carriers are hitting turbulence...

Wednesday, 1 March 2017

Air Astana turns to transfer traffic

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page 38/39 & page 40

The decision by Kazakhstan’s government to free float its currency in August 2015 had an immediate impact on Air Astana, driving up costs and dampening demand as the oil-producing nation adjusted to a new era of low commodity prices and high inflation.

Peter Foster, the flag-carrier’s president and chief executive, admits that the rapid devaluation of the Tenge was a “massive negative” for the 15-year-old company, which is jointly owned by sovereign wealth fund Samruk-Kazyna and BAE Systems. The airline’s revenues fell 20% over the course of 2016, with foreign investors thinking twice about the country and Kazakhs tightening their belts in response.

“Free float ought to have been called freefall, because the currency really went into meltdown this time last year,” he tells Asian Aviation.

“But thank goodness it did happen, because it would have been completely impossible to sustain the Tenge at the level that it was. And at least in terms of local salaries and local expenditure, that now is reflective of genuine economic conditions...