Interview: Klemen Bostjancic, Adria Airways CEO

Adria Airways shelves fleet renewal amid funding delay

Adria Airways has abandoned plans to overhaul its fleet as negotiations continue over a delayed €9 million ($11.8 million) loan that chief executive Klemen Bostjancic says will be necessary for the airline to continue flying this winter.

The revolving credit facility was due to arrive in late September and would have been the first instalment of a €50 million cash injection pledged by Slovenia's government in August 2011 in response to a two-and-a-half-year turnaround plan.

Local media reports on 16 October 2012 quoted Bostjancic as saying that the flag carrier would be grounded unless the outstanding loan from Nova Ljubljanska Banka and UniCredit Banka materialises.

Interview: Martin Gauss, Air Baltic CEO

ReShape results will spur Air Baltic investors: Gauss

Demonstrable success under the 'ReShape' restructuring plan will be the driving force behind Air Baltic's search for a strategic partner, chief executive Martin Gauss tells Flightglobal, with management looking to make the case for investment through quantifiable results.

Insisting that talks with prospective Gulf and Chinese partners remain at the early stages and may not require due-diligence for "a while", Gauss candidly adds: "I don't expect a quick win on this one, but you never know."

Interview: John Brayford, RAK Airways CEO

RAK Airways sees CFM-powered A320s in short supply

RAK Airways will issue a request for proposal (RFP) for CFM-powered Airbus A320s this week, chief executive John Brayford tells Flightglobal, with previous searches having identified just one aircraft "in any way suitable" for its upcoming fleet expansion.

The Ras al Khaimah-based carrier operates two CFM-powered A320s and has announced plans to lease a third aircraft in early March 2013, followed by a fourth unit in late summer.

According to Brayford, however, preliminary studies for the third unit indicated that "there are very few relatively new CFM-powered A320s on the market". He says scarce availability has prompted the airline to bring forward its search for the fourth unit.

Loose connections at Heathrow

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News that Patrick McLoughlin, the UK's new transport secretary, has postponed his decision over Heathrow's third runway until after the next General Election, in 2015, has prompted a collective groan across the aviation industry and the wider business community.

"How many more reviews do we actually need," asked Laurie Price, former aviation adviser to the select transport committee between 1997 and 2005, in his opening remarks at a conference in London last week.

Previous attempts to reach a consensus on airport expansion have included the 1971 Roskill Commission and the 2003 Future of Air Transport White Paper. These, however, have often appeared to kick decision-making into the long-grass, sparing successive governments the headache of long-term infrastructure projects that risk angering the electorate, while delivering scant benefit to their political backers...

Kuwait Airways privatisation up in the air

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In July, an Airbus A300 operated by Kuwait Airways made an emergency landing in Medina, Saudi Arabia, after what appears to have been a potentially catastrophic double engine failure. Camera-phone footage of the incident shows passengers clinging onto their armrests and nervously reciting the Shahada, as the only functioning engine sputters in the background.

Far from an isolated incident, this latest in a string of security scares renewed concerns about whether the airline’s ageing jets should remain in the skies while Kuwait’s parliament drags its feet over sorely-needed restructuring – originally promised in a 2008 privatisation bill...

Fast track into Africa

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FastJet, the new pan-African low-cost carrier backed by Stelios Haji-Ioannou, and one of the highest profile new entrants to the market this year, is at the show to explain its routes philosophy. The carrier will launch operations in Dar es Salaam, Tanzania in early November and plans to expand its fleet size up to 15 Airbus A319s within the first year of operations.

Chief executive Ed Winter says east African governments have been sympathetic to its arguments against taxation. "We've shown them that a reduction in the tax - and the stimulation of demand and the overall size of the market - will cause a rapid increase in the net revenues for government," he explains. "But it needs a bit of a leap of faith for governments to actually reduce taxes...

Doing business Down Under

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Emirates Airline, the flag carrier of Dubai, this summer announced that a code share partnership with Australia’s Qantas is likely to be signed within months.

The move follows the decision by Etihad Airways, Abu Dhabi’s flag carrier, to increase its equity stake in Virgin Australia to 10 per cent. It also comes as Qatar Airways voices renewed interest in Australia. Taken together, the hubbub spells a new phase in the long-running tussle between the Gulf carriers and their western counterparts for supremacy over inter-continental traffic flows...

Interview: Alex Cruz, Vueling CEO

Cruz says AENA fee hike will not derail Barcelona growth

Vueling will achieve net growth at its Barcelona El Prat hub throughout 2012, chief executive Alex Cruz tells Flightglobal, with the availability of spare capacity following Spanair's demise comfortably outweighing the impact of higher fees at the airport.

The low-cost carrier is lobbying AENA over the doubling of charges at El Prat and Madrid Barajas airports in "continuous" top-level private meetings, he says.

But Cruz does not anticipate any revisions to the higher fee structure - implemented on 1 July 2012 - and Vueling is instead pursuing "concessions" from the airports operator over the 5%-above-RPI increases planned for the beginning of 2013 and 2014. Though a goal for the airline, Cruz admits that such provisions will be "insufficient".

Hedging your bets

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When Delta Air Lines announced its intention to acquire an oil refinery earlier this year, the unusual move drew a mixed response from analysts. Some praised its innovation, arguing that its daily consumption of 210,000 barrels of jet fuel justified cutting out the middle man. Others questioned whether airlines should be in the business of refining crude oil.

But one thing no one disputed was the urgent need to offset fuel price volatility. According to IATA's latest forecast, Brent crude, the main European benchmark, is likely to average $110 a barrel this year - but in just six months spot prices have ricocheted wildly between $128 and $88.

For airlines that rely on stable ticket pricing to deliver profitability, such swings have brought fuel hedging firmly back into vogue during the post-2008 recovery. In its simplest form, hedging allows fuel prices to be fixed or capped for future expenditure, smoothing out unforeseen spikes in the oil price and bringing some certainty to margins...

Cracking up

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On 4 November 2010, in the skies above the Indonesian island of Batam, one of the four engines powering an Airbus A380 operated by Australian flag carrier Qantas blew up mid-flight. The force of the explosion was so great that shrapnel from the Rolls-Royce Trent 900 engine punctured the wing, sent fuel gushing from two tanks, and disabled an array of vital flight control systems.

Despite malfunctioning hydraulics, limited reverse thrust and no anti-skid brakes, Captain Richard de Crespigny successfully landed Qantas Flight 32 at Singapore Changi Airport. None of the 440 passengers and 29 crew aboard was injured.

In the months that followed, air safety investigators branched out from focusing solely on the faulty engine to addressing a new issue of concern – the discovery of hairline cracks in the Qantas A380’s wings. Though not a contributing factor to the mid-air explosion, it quickly became apparent that these newly identified fissures – located on nine-inch aluminium brackets connecting the wing’s outer skin to its inner rib structures – warranted further scrutiny...