fare yields on the rise, as premium demand bounces back

worldAirlines
FARE YIELDS ON THE RISE, AS
PREMIUM DEMAND BOUNCES BACK
Image credit: www.photolibrary.com
By Jenny Burns
T
HE cost of airfares throughout
Asia Pacific has rebounded from
the heavy discounting witnessed
during the depths of the global
financial crisis on the back of
positive trends in both the consumer
and corporate sectors, according to
the latest American Express Business
Travel Monitor.
The monitor shows a steady return of
confidence during the second quarter
of 2010.
Analysis of the Asia Pacific region
as a whole reveals year-over-year price
increases across all class categories at
an average of two per cent. Comparing
the second quarter of the year to the
first, price increases occurred across
all destinations, except for flights to
the Americas which recorded a two
per cent quarter-over-quarter price
decline. Flights to Europe, the Middle
East and Africa, as well as throughout
intra Asia Pacific, recorded the biggest
price increase, up two per cent quarterover-quarter.
“The Asia Pacific region is rebounding
strongly on the back of a challenging
economic period with air traffic, and
particularly premium traffic, showing
positive trends,” said vice president
of global business partnerships and
advisory services for American Express
Business Travel, Japan and Asia Pacific,
Robert Tedesco.
“But airlines have been burnt in
44
travelBulletin October 2010
Stronger demand from both the corporate and leisure sectors
has seen airfare yields recovering this year after the deep
discounting of 2009. Control of capacity will be the key to
sustaining recovery in 2011.
the past by adding capacity back too
quickly. Recent history is littered with
events that have negatively impacted
the industry, from natural disasters
through to financial downturns. The
memories of these events mean airlines
will proceed with caution.”
The monitor predicts that the airlines’
current strategy to not increase capacity
to the same levels as traveller demand
will result in higher prices.
“Airfares will continue to be heavily
influenced by travel patterns from the
corporate sector, and this group has
fundamentally changed their approach
to travel since the financial crisis,”
Tedesco said.
“While we are seeing corporate
travellers returning to the skies again
in strong numbers, the lessons learnt
during the financial downturn have
meant that there is now a greater
emphasis on demonstrating the return
on investment of a trip.
“Virtual meeting alternatives are
also gathering increased interest from
companies, especially for internal meetings among international colleagues. In
this ‘new normal’ operating environment airlines will likely exercise a
‘wait and see’ approach before making
dramatic price adjustments.”
According to the study, published
fares in Australia were flat overall, but
up as high as five per cent quarterover-quarter for economy discount
seats. They were up one per cent in
domestic.
The biggest price reduction was in
flights from Australia to the Americas,
down two per cent quarter-overquarter.
“The declining cost of airfares to
the Americas started last year with
the introduction of new carriers to
the market and continued through the
second quarter,” said Tedesco.
Meanwhile, the International Air
Transport Association (IATA) is
projecting a profit of $US8.9 billion
for the world’s airlines this calendar
year, but in its first look at 2011, the
association estimates that profitability
will drop to $US5.3 billion.
“The industry recovery has been
stronger and faster than anyone pre-
dicted,” said IATA’s director general
and CEO Giovanni Bisignani.
“The $US8.9 billion profit that we are
projecting will start to recoup the nearly
$US50 billion lost over the previous
decade. But a reality check is in order.
There are lingering doubts about how
long this cyclical upturn will last.”
IATA says the improved outlook for
2010 is being driven by a combination
of factors. On the revenue side
increasing demand and disciplined
capacity management are leading
to sharply stronger yields pushing
revenues higher. At the same time,
costs remain relatively stable.
IATA predicts Asia Pacific carriers
will post a $US5.2 billion profit. This is
better than the $US3 billion recorded
during the previous peak in 2007 and
double the previously forecast $US2.2
billion.
Looking ahead to 2011 the global
outlook grows weaker.
“Consumer spending is not expected
to pick-up the slack as joblessness
remains high and consumer confidence
falls in Europe and North America,”
Bisignani said.
While slower growth is expected to
keep costs in check and oil prices are
expected to remain constant at $US79/
barrel, a surge in aircraft deliveries
will see capacity expansion of six per
cent in excess of expected demand
improvements.
“This year (2010) is as good as it gets
for this cycle,” Bisignani warned.
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Credit: TNZ
Lake Wakatipu, looking towards Queenstown and the Southern Alps
Air NZ boosts trans-Tasman capacity
AIR New Zealand is increasing trans-Tasman seat
capacity by 10.2 per cent this summer, as part of its
new Northern Winter schedule, effective from the
end of this month.
A big winner is the New Zealand South Island
resort town of Queenstown, which will receive
extra flights from Sydney, Melbourne and Brisbane
during the Christmas-New Year period.
From Sydney, a third weekly Queenstown flight
will be added from mid December until the end of
January, while a second weekly flight will operate in
February and March. Brisbane will receive a second
weekly flight to Queenstown from mid December
until the end of January, and a new weekly roundtrip
flight in February and March.
Melbourne will receive a second weekly flight to
Queenstown each week from mid December until
the end of January.
All of the flights to Queenstown will be operated
with Airbus A320 aircraft.
Elsewhere, Air New Zealand will increase
Auckland to Perth flights from an average of six
times weekly to daily throughout the Northern
Winter schedule period. These flights will continue
to be operated with wide-bodied Boeing 767-300
aircraft. Auckland to Adelaide flights also will
increase at peak times to six Airbus A320 services
per week, up from the current average of four.
Dunedin to Sydney services will operate twice
a week in December and January, then weekly in
February and March. These also will be operated
with Airbus A320s.
Air Pacific adds third flight to Hong Kong schedule
AIR Pacific is adding a third flight to its Hong
Kong schedule with a Monday departure
commencing on December 13.
The Boeing 767-300ER aircraft being used
on the route will leave Nadi at 8.35am and
arrive in Hong Kong at 1.50pm then leave
Hong Kong at 3.50pm to arrive back in Fiji at
6.50am on Tuesday – the same flight times as
the Thursday and Saturday flights.
46
travelBulletin October 2010
The new flights will again offer Air Pacific
full service product with 18 Tabua (business
class) and 229 Pacific Voyager (economy class)
seats.
In other news, Fiji’s domestic carrier, Pacific
Sun has announced more flights at more
convenient times with lower fares for travel
between Suva and Labasa.
As an introductory offer, the airline has been
offering $70 one-way fares, which include all
surcharges and taxes. At the time of press it
was uncertain how long this fare would be
available for. A fare of $99 will replace the
special deal.
Air Pacific managing director Dave Pflieger
said the airline was now offering better choices
and more affordable travel between Vanua
Levu and Labasa.
“We have listened to comments from
customers and have developed a great way to
meet those requests,” he said.
The changes mean there will be 25 return
flights between the two ports. An ATR41-500
aircraft seating 42 passengers is now departing
Labasa at 8.35am departing on return from
Suva at 2.50pm on Mondays and Fridays and
at 3.40pm on all other days.
worldAirlines
Air France-KLM offer mobile website ‘firsts’
AIR France and KLM have launched
their new mobile websites: mobile.
airfrance.com and KLM.com for
mobile.
The respective free applications for
iPhones are available via the iPhone
App Store, and soon as well for BlackBerry’s via BlackBerry App World.
“With Air France and KLM’s mobile
websites, travellers can for the first time
ever worldwide, change tickets that can
be modified at no extra charge,” said
Air France KLM, Singapore, Indonesia,
Australia and New Zealand general
manager, Paul Rombeek.
“Passengers can thus adjust their
booking and arrange their new flight
in just a few clicks, in case of a change
in their schedule.”
Passengers can also check in
themselves and those travelling with
them, choose their seat on the seat
map, book their Siège Plus for extra
legroom (on the Air France mobile
site), or a seat in the Economy Comfort
zone (on KLM.com for mobile).
Other
features
include
the
opportunity to purchase additional
baggage allowance at a discount and
receive a boarding pass by SMS or
New apps for iPhone and Blackberry allow passengers to change their tickets in a few clicks
e-mail, which travellers can either
display directly on their mobile phone
upon boarding, or print out at the
airport, if they need to, cancel their
check-in at any time up to the latest
2OYAL*ORDANIAN
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Tel: 1300 855 057 Fax: (02) 9290 3306
Email: [email protected] Box 5022 GPO Sydney NSW 2001
www.rj.com
48
travelBulletin October 2010
check-in time. Passengers can also
consult real-time flight information
from their mobile phone and check
the departure terminal, or the exact
landing time of a flight, consult the
timetable for the coming year and also
access Air France, KLM and Flying
Blue contact details worldwide.
If they need to check details of their
booking, passengers can also enter
their booking code or Flying Blue
membership number to access all their
flight details.
Before the end of the year, new
services will be available including
ticket reservation, modification of
most ticket types and consultation of
interactive frequently asked questions
offering rapid responses to customers’
questions.
HA adds extra
flights, new routes
and more aircraft
HAWAIIAN Airlines is entering a
fresh phase of expansion, with new
flights, new routes and new aircraft
being introduced progressively from
this month.
The airline introduced a new
Saturday service from Sydney to
Honolulu on October 16 with
onward connections to Hawaii’s outer
islands and to 10 US mainland cities,
including Las Vegas, Los Angeles,
San Francisco and Seattle.
On October 31 Hawaiian will inaugurate daily flights from Honolulu to
Tokyo’s downtown Haneda Airport.
From January, 2011, the airline will
add four weekly flights between
Honolulu and Seoul, South Korea.
Coinciding with its expansion,
Hawaiian has announced plans to
accelerate delivery of new 294-seat
Airbus A330-200 aircraft, which
gradually will replace existing Boeing
767-300ER twinjets on trans Pacific
flights.
Hawaiian recently introduced its
first two A330s, both of which are
currently deployed on the Honolulu–
Los Angeles route.
Another eight will join Hawaiian’s
fleet between November this year
and the first quarter of 2014, enabling
the airline to fly nonstop between
Honolulu and any North American
port, as well as a growing range of
destinations in Asia.
One of the carrier’s A330 deliveries
was brought forward last year to
accommodate the airline’s growth
plans and a second recently was
advanced by almost two years.
TG launches carbon offset program
THAI Airways (TG) has launched the Carbon
Offset Program with the International Air
Transport Association (IATA) to provide
customers with the opportunity to offset
carbon emissions generated from flying.
TG president Piyasvasti Amranand said the
airline was the first in the Asia-Pacific region
to join the program with IATA.
“Working with IATA, Thai is now able to
offer customers a way to compensate carbon
emissions through our website at www.
thaiairways.com,” he said.
“Information about the amount of CO2
emitted for the booked flight is available as
well as the cost to offset the CO2 amount.”
The IATA program calculates the carbon
emissions based on a methodology developed
by the International Civil Aviation Organisation
(ICAO). The system uses the efficiencies and
reliability of IATA’s long-established financial
system to enable airlines and their customers
to purchase tickets and offset at the same
time.
“The IATA Carbon Offset Program only
invests in UN-approved Certified Emissions
Reductions (CER) projects and voluntary
credits, which comply with the recognised
Gold and or Voluntary Carbon Standards,”
Amranand said. “The entire customer
contribution goes to the sponsored projects.”
When customers book online, they can
check the level of emissions created by their
flight and make a financial contribution that
will be devoted exclusively to the officially
approved renewable energy projects
worldwide, which include Thailand’s
Biogas Waste Heat Based project in Nakorn
Ratchasima.
Award-winning Business Class
Economy Class – entertainment in every seat
Via Lounge at Helsinki Airport
The friendliest people.
The world’s friendliest airline.
Vancouver
Hong Kong
Honolulu
Los Angeles
Labasa
Savusavu
Taveuni
Kiritimati
Vanuabalavu
Apia
Tarawa
Honiara
Funafuti
Port Vila
Nadi
Nuku’alofa
Suva
Levuka
Nadi
Suva (Nausori)
Brisbane
Lakeba
Sydney
Air Pacific Routes
Melbourne
Auckland
Codeshare Routes
Pacific Sun Routes
Air Pacific, Fiji’s national
airline, has been operating
for over 59 years and
has earned an envious
reputation as the prime
carrier on the Australia-Fiji
route, offering typically
gracious Fijian service
with an abundance of
warm smiles.
Christchurch
Fiji is home to the world’s friendliest people and
the natural island warmth of the cabin crew is
the hallmark of Air Pacific’s service, whether
travelling in Tabua (Business) Class or Pacific
Voyager (Economy) class. Of course, younger
travellers are well catered for by our friendly
crew, and discounted fares apply.
Our fleet of Boeing 747s, 767 and 737s fly from
Brisbane, Sydney and Melbourne to Nadi and
beyond to Honolulu, Los Angeles, Vancouver,
Hong Kong, Auckland, Christchurch, Samoa,
Tonga, Vanuatu, the Solomon Islands, Tuvalu
and Kiribati. All flights allow a Fiji stopover.
As a full service international airline, all flights
from Australia include complimentary meals
and beverages. There is also a wide choice of
complimentary in-flight entertainment options
with free headsets, and the Boeing 747 fleet is
fitted with in-flight entertainment systems in
every seat. So the fun begins the moment you
step aboard.
B747 operates ex Sydney; B767/737 operates ex Brisbane and Melbourne.
braveAIRP3049_FE
Kadavu
In addition to our ‘Tabua Club’, Air Pacific is a
partner in the Qantas Frequent Flyer programme
and members can earn and redeem points, as
well as credit those points towards tier status.
Air Pacific code-shares with Qantas on AustraliaFiji, Auckland/Christchurch-Nadi and Nadi-Los
Angeles routes; with Alaska Airlines on the Los
Angeles-Vancouver route, and Cathay Pacific on
the Nadi-Hong Kong route.
Within Fiji, Pacific Sun is Fiji’s premier regional
and domestic airline and operates all domestic
and South–Western regional routes offering
services that are reliable, comfortable and
competitively priced, as well as having a
comprehensive range of schedules to connect
to and from international arrivals.
Pacific Sun services Nadi, Suva (Nausori),
Labasa, Kadavu, Savusavu, Taveuni, Levuka,
Vanuabalavu and Lakeba.
For Reservations call 1800 230 151
airpacific.com
worldAirlines
SAS enhances environmental status
THE SAS Group has received the environmentally
orientated ISO 14001 and EMAS certification
from Bureau Veritas.
“This means that the SAS Group (which
includes SAS, Blue1 and Widerøe) is the only one
in the world to have both certificates,” said SAS
Australian and New Zealand general manager
Irmgard Pedersen.
The air freight business, SAS Cargo, was already
ISO 14001 certified and has now added EMAS
(Eco-Management and Audit Scheme).
“The SAS Group now holds two internationally
recognised environmental certificates, covering all
aspects of the SAS Group’s business – everything
from flight operations to administration. That
makes us unique in the world,” Pedersen said.
“Many of our customers, particularly corporate
customers, demand environmentally certified
products and services. We can now offer these,
which further strengthens our position as one of
the most environmentally aware airlines on the
market.”
RJ urges agents to book new Crown Class
ROYAL Jordanian’s (RJ) move to A330 aircraft on the Far East
route has increased its Crown Class capacity by 33 per cent, a
class RJ’s Australian manager Iain Ferguson is urging agents to
book for their clients.
The new aircraft also provides in-seat interactive on-demand
(AVOD) entertainment units in both Economy and Crown Class.
“Royal Jordanian’s premium cabin, Crown Class, is a
combination of its previous Premium First and Business Class
cabins but at Business Class prices,” Ferguson said. “With lieflat sleeper chairs for the night sectors from Asia to Amman and
a la carte dining from the meal trolley, RJ’s Crown Class offers
real value for money for Australian travellers.
“We have a range of competitive Crown Class net fares
available through the consolidator of an agent’s choice.
“So whether it’s a full Business Class fare or the unbelievably
priced Kuala Lumpur introductory special mixed class fare
starting at $3000 to the Middle East and Eastern Mediterranean
destinations, Royal Jordanian has the right fare for agent’s
clients.”
Ferguson said flying RJ also offered the opportunity for
stopovers in RJ’s home of Jordan.
“RJ’s Crown Class travel becomes a popular alternative to
traditional premium class ways of getting to and from Europe,
the Middle East, North Africa and North America,” he said.
Major expansion for LAN’s
leisure network
LAN Airlines has commenced a major expansion of its leisure
network in South America, launching flights to Ecuador’s
Galapagos Islands and preparing for a January start to new
Lima–Easter Island and Lima-Iguazu services.
From November LAN will increase from six Airbus A340-300
flights per week to daily service on the Sydney-AucklandSantiago route.
The new routes will be incorporated in the popular LAN
South America Airpass, taking to more than 55 the number
of destinations served by the airline group within South
America.
travelBulletin October 2010
51
worldAirlines
Finnair launches emissions calculator
FINNAIR has launched a new revised
emissions calculator. The calculator is
“the only one in the world” to be based
on actual cargo, passenger and fuel
consumption figures, not averages or
assumptions.
The calculations are certified by
PricewaterhouseCoopers and they will
be updated quarterly on the basis of
actual realised figures.
“We wanted to devise a calculator
whose figures are indisputable, because
transparency is one of the cornerstones
of our corporate responsibility,” said
Finnair’s vice president, sustainable
development Kati Ihamäki.
“The fact that the calculations are
based on actual emissions figures is a
breakthrough in the airline industry.
“In the calculations, consumed fuel
has been allocated proportionately
based on weight to both cargo and
passengers for each flight, and
the calculator presents the share
attributable to passengers.”
Ihamäki said Finnair was committed
to reducing its emissions by 24 per cent
per seat from 2009 to 2017. Work to
reduce emissions also took place before
this period, so between 1999 and 2017
emissions would be reduced by 41 per
cent.
Australians travelling to Europe via
Asia on a Finnair ticket can make their
Finnair Business Class service
choice of connecting flights on their
choice of oneworld airlines, including
Cathay Pacific, Qantas, British Airways
and JAL. This meant they could depart
from their most convenient Australian
international airport and connect
via Bangkok, Hong Kong, Shanghai,
Beijing, Seoul, Tokyo, Nagoya, Osaka,
Delhi (and Singapore from May 2011).
The Finnair emissions calculator can
be found at the address: http://finnair.
com.
Emirates’ early bird fares on sale
EMIRATES’ European early bird fares for
2011 cover economy class airfares to 25
destinations across Europe.
Early bird fares start from $1710 return to
its new destination, Madrid. Return airfares
are also available to Emirates’ other new
destinations of 2010 Amsterdam – from
$1738 and Prague from $1727.
Fares to the UK start from $1857 return.
Emirates flies to six UK airports: London
Heathrow, London Gatwick, Birmingham,
Manchester, Newcastle, and Glasgow.
Early bird fares to Italy start from $1720
return to Venice, Milan and Rome.
Lead-in return airfares to other European
cities include Paris $1761, Nice $1742,
Frankfurt $1745, Athens $1756, Istanbul
$1714 and Vienna $1732.
Bookings must be completed by November
30, 2010. Early bird fares are available for
travel between February 1 and October 31,
2011 with fare levels varying during this
period. Economy passengers receive a 30
kilogram luggage allowance, business class
40kg while first class passengers can travel
with 50kg of checked baggage.
Emirates currently operates 70 flights per
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travelBulletin October 2010
week to Dubai from Australia – from Brisbane,
Perth, Melbourne and Sydney. One service
daily from Sydney operates via Bangkok.
One service daily from Brisbane operates
via Singapore. One Melbourne service daily
operates via Singapore, with another daily
service operating via Kuala Lumpur.
Emirates’ global network now features
services to over 100 destinations in more
than 60 countries in Europe, the Middle East,
Africa, the Indian subcontinent, North America,
South America, and the Asia-Pacific.