BA parent forecasts €500 million profit

BA parent forecasts €500 million profitInternational Airlines Group today forecast a €500 million boost in annual profits but is cutting winter capacity.

This came as second quarter operating profits for the British Airways, Iberia and Vueling group rose by €135 million to €380 million.

Revenue for the quarter to June 30 was up 6.7% to €5,086 million

IAG’s half year operating profit came in at €230 million against a loss of €33 million before exceptional items in the same period last year.

IAG expects the full year operating profit to increase by at least €500 million, from a 2013 base of €770 million at current fuel prices and foreign exchange rates.

While passenger revenues should remain “relatively flat,” margin growth will be driven by cost cuts.

IAG chief executive Willie Walsh said: “In the quarter, we made an operating profit of €380 million which is up from €245 million last year.

“This performance shows that we are making further solid progress. Our disciplined approach to capacity continues and we will make reductions where it makes sense as we go through the year.

“We are, therefore, trimming planned IAG capacity by around three percentage points for the winter 2014 season.

“All of our airlines had their highest second quarter operating result since 2007.

“British Airways’ operating profit was €332 million in the quarter, up from €247 million last year while Iberia made an operating profit of €16 million, compared to an operating loss of €35 million last year. Vueling’s operating profit was €30 million, up from €27 million last year.

“Iberia’s restructuring continues to have a positive impact and last week Iberia signed an agreement that could lead to an additional reduction of up to 1,427 jobs. This will create new opportunities for Iberia to enhance its profitability further in the next two or three years.”

Sourced from Travel Weekly

Iberia secures deal for new long-haul aircraft

International Airlines Group (IAG) is to convert eight Airbus A350-900 aircraft options into firm orders and has secured eight A330-200s for Iberia.

The fuel efficient aircraft will replace 16 A340s in Iberia’s long haul fleet and will be delivered between 2015 and 2020.

IAG said it has secured commercial terms for the A350 aircraft, each worth $285 million, as part of a group long haul order announced in April 2013.

The eight A330s will be obtained either by converting existing options from an Airbus order in 2011 or from the operating leases depending on financial and delivery terms.

IAG chief executive Willie Walsh said today: “Iberia has taken significant steps to restructure its business and the progress made so far means that we can bring new long haul aircraft into the airline’s fleet.

“These orders demonstrate our commitment to make Iberia competitive.

“Both aircraft will provide cost efficiencies and environmental benefits, enabling Iberia to replace its long haul fleet with modern and fuel efficient aircraft.

“The new technology and improved aerodynamics will lower fuel burn and CO2 emissions per seat by 18%, as well as providing both noise and NOx performance advantages.

“Retaining an all Airbus long haul fleet will also generate cost savings in maintenance and crewing.”

The Spanish carrier currently has 33 aircraft in its long haul fleet.

Sourced from Travel Weekly

Edinburgh-bound plane diverted after woman ‘threw prosthetic leg at cabin crew, demanded cigarettes and parachute’


The plane was travelling from Tunisia to Scotland


 Thursday 31 July 2014

A pilot was forced to divert a plane to Gatwick Airport on Wednesday night, after a woman on a flight bound for Edinburgh allegedly launched a foul-mouthed tirade and threw her prosthetic leg at staff.

The Thomson Airlines flight 297 was travelling from Enfidha in Tunisia to Edinburgh, when the woman began “swearing blue murder” and threw food at staff, according to a Sussex Police spokesman.

Another passenger on the flight told the Edinburgh Evening News she had demanded cigarettes and a parachute and was “off her face on drink.”

John Smith, from Falkirk told the paper: “She was shouting ‘I want cigarettes’ and that she wanted a parachute to jump off the plane.

“She slapped a young girl and then assaulted the cabin crew with her prosthetic leg.”

The captain became so alarmed by her behaviour that he diverted the plane to Gatwick, West Sussex.

A Sussex Police spokesman said: “She was swearing blue murder, saying she was going to do this and that and the other, so the flight was diverted to Gatwick.”

But he refused to comment on reports the woman was drunk when the alleged attack took place.

Sourced from The Independent

TTG Intelligence: Bespoke sector keeps growing

Travellers are increasingly looking to create their own bespoke trips, prompting tour operators to seek to add new destinations to their programmes.

That was the conclusion of the Hayes & Jarvis long-haul trend report, released last week.

The long-haul specialist said that customer demand had pushed it to put in place plans to add holidays to Zimbabwe, Mozambique, Java and the east coast of Sri Lanka for 2016, as clients seek new adventures.

Tailor-made bookings are also on the up. Hayes & Jarvis said it defined a tailor-made booking as those which include visits to three or more destinations in one trip, and added that these were now forming an “increasing part of the business”.

“Tailor-made itineraries really are the focus for us,” said Verity Rice, general manager for Asia, Africa and Latin America. “In the Far East travellers have already ventured to Thailand and Bali, so they are now planning to go somewhere different.”

One such destination is Vietnam, where Hayes & Jarvis said it had seen a 12% increase in bookings compared with this time last year. Despite its recent political turmoil, Thailand is also proving popular, 
with 68% of those travelling to the Far East visiting the country at some stage of their holiday.

Other more interesting holiday destinations include Kenya where, despite the recent troubles in Mombasa and warnings from the Foreign Office, the tour operator insisted tourism remains largely unaffected to the beach resorts and on safaris, which tend to attract a more confident and adventurous traveller. The company said it would be resuming booking holidays to the Kenyan coast from December 2014, although it added it would “continue to monitor the situation closely”.

Old favourites
Meanwhile, although some travellers continue to look for new destinations and experiences, figures to June 2014 revealed that the firm travel favourites have retained their hotspots. US favourites such as New York and Las Vegas ranked first and second, while the Indian Ocean’s Maldives and Mauritius came in at three and four. Mexico was fifth.

For the summer period – May to September 2014 departures – the picture was similar, but Las Vegas took the number one spot, while California was number five, largely Hayes & Jarvis said, due to self-drive and touring success. Tennessee is the tour operator’s fastest growing destination with a 20% increase in passengers this year.

Shona Swain, the tour operator’s general manager for the US and Canada, said touring and self-drives in the US had proved to be a real growth area. The Deep South and New Orleans are also seeing further growth, while Canada saw an 11% increase in sales.

Elsewhere, Hayes & Jarvis said it expected an increase in certain destinations due to heightened publicity. This includes Barbados and Grenada, with the new Sandals resorts significantly raising the profile of the islands. The tour operator also anticipates a boost to its Brazil sales after the World Cup, while sales to Costa Rica also spiked following their success in the tournament.

Sourced from TTG Digital


A “hellish noise”: Fighter jets causing sonic booms in the skies above Wales

Windows have been broken. a greenhouse was damaged and a supermarket was forced to close after roof damage following a sonic boom

An aircraft which changed the face of fighter jet design has gone on show at the RAF Museum in Shropshire. The Experimental Aircraft Programme (EAP) technology demonstrator, built by the then-British Aerospace company (now BAE Systems) in the 1980s, paved the way for todayÕs Eurofighter Typhoon which is flown by some of the worldÕs leading air forces. It has gone on show to the public for the first time having been donated to the RAF Museum at RAF Cosford, Shropshire, by BAE Systems. Please find attached a full press release on the donation, including quotes from Dave Ward, a former BAE Systems employee who was part of the team which worked on the EAP, and a couple of images of the aircraft in flight and in the museum.

Half of all sonic booms recorded from fighter jets in the UK over the past five years occurred above Wales.

Windows have been broken, a greenhouse was damaged and a supermarket was forced to close after roof damage following a sonic boom.

In the most dramatic case a fighter jet was reported to have made a “hellish noise” over Aberystwyth, according to the BBC.

Ministry of Defence (MoD) data lists 17 incidents across the UK between May 2009 and June 2014. Eight were over Ceredigion, Powys or Anglesey.

A sonic boom is created as an aircraft breaks the sound barrier. The boom is a shockwave caused when an aircraft accelerates through the speed of sound (761 mph/1,225 kmh at sea level and an air temp of 15C).

It can be destructive when it reaches the ground, causing damage to buildings.

Following the retirement of Concorde in 2003, only some military fast jets and missiles are capable of supersonic flight.

The figures released by the MoD as a result of a Freedom of Information (FoI) request included the incident in Aberystwyth in March.

The US Air Force (USAF) later apologised, admitting that an F-15E Eagle fighter aircraft had been training near the coast when a pilot inadvertently broke the sound barrier.

A Morrisons supermarket closed temporarily when ceiling tiles fell. The FoI data also lists claims for broken windows and a damaged greenhouse.

Ceredig Davies, an Aberystwyth councillor and shop owner, described the sonic boom as a strange experience.

“It felt like something hitting you in the chest. It was a strange experience,” he said.

“I was walking out of my shop at the time and after the noise – an extremely loud bang – came this rush of air, hitting me in the chest.

“I thought it must be a plane, I’d heard them in the past but not like that.”

Other booms listed include two over Llangeitho, Ceredigion – in April and December 2012.

Military Low Flying Area 7 (LFA7) covers a large area of Wales and is used by the RAF and other air forces, particularly the USAF.

The MoD has received 15 claims for compensation as a result of sonic booms in the last five years and had paid out £1.8m.

The RAF said supersonic training was prohibited overland in the UK for both RAF and USAF fast jet crews.

For most incidents where supersonic booms were heard, they were either sound travelling from aircraft training over the sea, or RAF Quick Reaction Alert aircraft responding to intercept unidentified aircraft.

“It is very rare for accidental supersonic flight during operational training overland and we apologise for any inconvenience caused when this happens,” a spokesman said.

Sourced from walesonline

ANA Holdings firms up order for A320neo Family

ANA to become first A320neo operator in Japan


ANA Holdings has firmed up an order for 30 A320neo Family aircraft (seven A320neo and 23 A321neo). The initial agreement was announced in March 2014. The aircraft will be part of ANA Holdings fleet development and modernisation strategy to replace its existing single-aisle fleet in the coming years. Deliveries will start from 2016.

Shinichiro Ito, President and CEO of ANA HD said: “The aircraft we have selected will enable us to modernize and expand our fleet further as we seek to become one of the world’s leading airline groups. These new aircraft will give us maximum flexibility and improved fuel efficiency and will allow us to meet the growth in demand, both internationally and in our domestic Japanese market.”

“I’m delighted to welcome ANA as the A320neo’s first Japanese customer, and see the growing relationship between our two companies”, said Fabrice Brégier, Airbus President & CEO. “In addition to ANA taking full benefit from the A320neo’s efficiency and reliability, the deal also accelerates Airbus’s expansion in Japan – one of our main ambitions for the next decade”.

In selecting the A320neo, ANA is investing in the best in class, ensuring excellent cabin comfort as well as operational efficiencies. ANA’s A320neo Family will be equipped with Pratt & Whitney PW1100G-JM engines.

Japanese Aero Engines Corporation (JAEC) is a 23% collaboration partner in PW1100G-JM program. JAEC is responsible for development, manufacturing and engineering support of the fan, low-pressure compressor, combustor, and low-pressure shafts. JAEC is a consortium, consisting of three Japanese companies: IHI (65%), Kawasaki Heavy Industries (25%), and Mitsubishi Heavy Industries (10%).

The assembly of Airbus’ first A320neo has been completed following painting of the aircraft and the mounting of PW1100G-JM engines. It will soon start ground tests to prepare for first flight. The flight test campaign for the A320neo will kick-off in Q3 2014, paving the way for Entry Into Service in Q4 2015.

The A320neo – for “new engine option” – incorporates many innovations, including latest generation engines and large Sharklet wing-tip devices, which together deliver 15 percent in fuel savings and a reduction of 3,600 tonnes of C02 per aircraft per year. With a total of more than 3,000 orders received from more than 50 customers since its launch in 2010, the A320neo Family has captured over 60 percent of the market, clearly demonstrating its leadership.

Analysis: Bookings plunge 7% in June

Analysis: Bookings plunge 7% in JuneLatest booking figures show little sign of a pick-up in the summer market. Ian Taylor reports.

Bookings for this summer 
remain down on last year following a 7% year-on-year fall in sales in June, a third consecutive month of decline, according to analyst GfK.

The shortfall against June 2013 came after a 3% fall in bookings year on year in May and an 11% fall in April.

The three-month decline followed a flat March, leading GfK to report season-to-date bookings to the end of June down 2% on 2013 and total revenue down 1%.

GfK business group director David Hope said: “It is unlikely the market will be positive at the end of the season.”

The slide in sales followed a strong start to the year but confirmed reports of softening demand for holidays, despite improving consumer confidence in the economy as a whole.

The First Rate Holiday Confidence Index, published this month, showed a fall on April (Travel Weekly, July 17).

However, latest figures from the Office for National Statistics showed a 4% increase in overseas holiday departures year on year in the three months to May. This followed a 4% rise in annual departures last year over 2012.

GfK attributed the June decline to a combination of the World Cup, good weather at home, lower footfall on the high street and “most important, lower availability due to better demand management”.

Strong sales early in the season almost certainly account for some of the bookings decline since, and some companies have cut capacity. Thomas Cook reported a 1% reduction in UK capacity this summer, in line with a 1% fall in bookings to early May.

However, other companies have added capacity. EasyJet reported a 16% increase in seats from Gatwick this summer and financial analyst HSBC reported an overall rise in short-haul seat capacity of 6% for the season.

The GfK figures account for a significant proportion of the market and there will be winners as well as losers, with volume of less concern to some companies than others. Tui Travel reported a 3% decline in summer bookings to May 4 but a 5% increase in average sales price.

Package holiday bookings remained ahead of the market in June and short-break bookings were up year on year.

At the same time, not everyone is solely focused on late bookings, with two other seasons on sale.

GfK reported bookings for winter 2014-15 close to flat on a year ago after a poor June but a strong May, but with revenue down 4%. The analyst suggested passengers were “trading down to a shorter or cheaper holiday”. However, it reported family bookings up 5% and short-haul bookings up 16%.

Hope said: “It’s difficult to call this season. Many operators have erred on the side of caution and cut some capacity.”

All-inclusive bookings continue to show growth – up 4% year on year for next winter – with package sales up 2% on the same stage a year ago. GfK reported the largest growth in holidays priced between £1,399 and £1,599.

Early bookings for summer 2015 also appear strong, with sales and revenue up almost 20% on a year ago.

Sourced from Travel Weekly

Monarch to terminate Swissport Gatwick contract

Monarch to terminate Swissport Gatwick contractMonarch Airlines is understood to have told baggage-handler Swissport that it is terminating its contract at Gatwick amid continuing problems at the airport.

Monarch has already moved to use alternative provider Menzies at Luton and Birmingham airports, and has put Swissport on 120 days’ notice at Gatwick and Manchester.

Aviation industry sources told Travel Weekly about the move by Monarch following a series of baggage handling delays in recent weeks caused by staffing problems.

Both Monarch and Swissport refused to comment on contractual arrangements. However, it is understood Monarch has already started looking for a new contractor at Gatwick.

The Times has reported that other airlines may follow Monarch’s lead and predicts further chaos this weekend as the big summer getaway continues.

It quoted unnamed airlines as saying the situation could be wore this weekend than during previous pinch points, particularly at peak travel times.

The latest problems at Gatwick occurred last weekend when passengers experienced severe delays late on Saturday night and into Sunday morning.

This followed problems earlier this month, when customers had to wait up to 90 minutes for their bags, and in June.

Swissport issued an apology saying the latest problems came after “a sustained period of consistent baggage handling throughout the busiest day of the year”.

It conceded service levels fell in the early hours of Sunday morning but blamed the volume of delayed arrivals.

In a statement it said: “Despite having already increased our resources to support the off‑schedule activity we were still unable to fully accommodate the handling of off-schedule arriving aircraft during this period.”

A Gatwick spokesman told The Times: “Gatwick is working closely with its airlines to improve the performance of Swissport in line with the airport’s own high standards of passenger service.”

Sourced from Travel Weekly

Lufthansa defies recent warning with €1bn profit forecast

Lufthansa defies recent warning with €1bn profit forecastLufthansa reported a rise in operating profit in half-year results released this morning after posting a profit warning in June and forecast a full-year profit of €1 billion.

The German airline group posted an operating profit of €114 million for the six months to June, up €41 million on a year ago, although it reported a net loss of €79 million.

Lufthansa said “competitive pressures on fares” and a recent strike by pilots “depressed second-quarter results”. The strike cost the airline €60 million.

The group said it would slow capacity growth for the winter and “go on the offensive with new innovation and quality drives”.

Revenue for the half year was down 2.1% to €14.2 billion.

Lufthansa confirmed its previous profit guidance for the full year despite “adverse developments in the second quarter”.

It reported overcapacity “on North and South American services, on European routes and, more recently, on Asia-Pacific routes”.

Lufthansa said it had already responded to declines in passenger and cargo revenues by cutting capacity growth from 5% to 3%.

The group’s passenger operations saw a €96 million operating loss in the six months, up from €32 million last year.

Lufthansa and subsidiary Germanwings reported first-half operating losses of €146 million and Austrian Airlines a loss of €44 million, but Swiss an operating profit of €92 million – up €29 million on the previous year.

Lufthansa said it expected markets “to remain weak in the second half of 2014”.

“For 2014 as a whole, the group remains confident of posting an operating profit of around €1 billion, and for 2015 an operating profit of around €2 billion.

Sourced from Travel Weekly

Airline consolidation to bring pros and cons, convention told

Consolidation in the global airline business is to gather pace over the next five years, according to industry experts.

Speaking at the Global Business Travel Association’s annual convention this week, a panel of senior travel executives said joint ventures (JVs) and mergers would have both a positive and negative impact on the corporate travel community, and could hasten the demise of the big three airline alliances: Oneworld, SkyTeam and Star Alliance.

Bob Brindley, principal and vice president of
 Advito, the research arm of travel management company (TMC) BCD Travel, said future activity would be driven by those involved in the three major transatlantic JVs.

When US Airways merged with American Airlines it left Star Alliance to join Oneworld, but more significantly it became part of the relationship with British Airways, Iberia and Finnair.

United Airlines and Lufthansa, both Star Alliance carriers, formed their transatlantic partnership a little more than a year ago, while Skyteam’s Delta last year bolstered its JV with Air France-KLM and Alitalia by buying a 49% percent stake in Virgin Atlantic.

“An alliance is really just a marketing relationship and the partners, technically, remain competitors,” said Brindle.

“A JV is where there is ownership and sharing of costs and revenues and in [the next] five years we’ll see consolidation in all its forms, most likely the big three JVs adding partners in different parts of the world.”

Brindley predicted consolidation would result in less choice for corporate travel buyers and mean many would have to focus on working with one or two JVs to obtain worthwhile negotiated fares and discounts.

“Buyers won’t be able to work with them all, and that may mean taking tough decisions and leaving some partners behind,” he said.

The exception to the rule, according to Brindle and fellow panelist Yon Abad, a director at the Carlson Wagonlit Travel (CWT) Solutions Group, would be those buyers whose travellers are buying high-yield, unrestricted tickets.

“If you are a customer who buys a lot of high-yield tickets it makes you more desirable to an airline and gives you far more leverage. They will be at your door trying to get as much business as possible,” said Abad.

On the plus side, the panel said that though consolidation and shrinking capacity were making choice more limited, carriers were investing more in product and service in order to win business.

Aside from the transatlantic JVs that predominantly include legacy carriers from North America and Europe, GBTA delegates in Los Angeles heard it was the cash-rich airlines from the Middle East that would shape the future of aviation.

Holly Hegman, founder and editor of aviation news website, said Qatar Airways, Emirates and Etihad were turning the business upside down.

“They don’t need alliances,” she said. “They are cherry picking [the airlines] that will bring them the most money.”

She cited Etihad’s equity alliance with airlines such as Air Berlin, Jet Airways and Air Seychelles as the model of the future, and said all eyes should be on the imminent merger with ailing Skyteam carrier Alitalia.

Sourced from Travel Weekly


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