Blackberry - what if?

MSNBC -- I’ve been monitoring the BlackBerry e-mail patent fight as a problem that will work its way through the courts and be solved someday. But, with the Supreme Court refusing to hear Research in Motion's appeal this week, I’m beginning to worry — just a little. I’ve been using a BlackBerry to do my mobile e-mail for more than six years; I can’t really remember life without it. The Supreme Court's action means the battle heads back to a trial judge in Richmond, Va., who is presiding over the patent infringement case against Canadian-based Research in Motion brought by a tiny U.S. holding company, NTP. The judge could impose an injunction blocking BlackBerry use among thousands of users in the United States — including many businesses and federal government and law enforcement employees. RIM has been trying anything and everything to avoid this, from challenging the patents that NTP is suing over, to veiled threats that since BlackBerry servers reside in Canada, RIM is not subject to U.S. legal action. It's made the most progress not in court but at the U.S. Patent Office, which is in the process of researching the validity of each of the patents in question. So far they’ve been ruling against NTP. That’s a good thing for RIM. --------- So, Crackberry users, whatchagonnado? You nervous yet? You should be. Or do as a friend did, he ordered a machine from the UK which cannot be turned off in the US. A secondary market in these machines - ah the power of a world economy. With so many users, there are bound to be all kinds of hacks real soon. This will irritate RIM, but who cares? You need your fix.

jetBlue & Dunkin Donuts

JetBlue Airways will serve Dunkin' Donuts coffee on all flights effective Feb. 1, 2006. Americans want better coffee on their flights, according to a recent survey by JetBlue and Dunkin' Donuts. More than one-third of Americans said airline coffee is worse than their daily cup of coffee. Those surveyed also cited coffee most frequently as the beverage they would like to improve on the airplane. --------- In the US we call this progress in passenger service. So what? United has had Starbucks (much better coffee) for years. But the fresh donuts, now that is awesome. Anyway, jetBlue is a great airline and this just goes to show they are full of creativity and fun.

Indian market sees impacts

ATW -- Jet Airways' net profits fell 53% to INR610 million ($13.8 million) in the third fiscal quarter ended Dec. 31, a "positive result," according to Executive Director Saroj Datta, who cited "industrywide capacity addition that was far in excess of demand growth," surging fuel costs that outstripped fare increases and operating losses on Jet's new international routes. The report came on the heels of the carrier's $500 million acquisition of Air Sahara, which will create the country's largest domestic airline. Systemwide traffic rose 26% to 2.42 billion RPKs against a 37% increase in ASKs to 3.45 billion, driving load factor down 6.1 points to 70.1%. Domestic load factor was "consistently above 70%," according to Datta, who insisted that profitability remained strong on those routes. ------- As capacity starts pouring into this market, ASKs will continue to outstrip RPKs. So prices will fall to better match the two. It has happened in every market. Bear in mind the capacity growth is big, but only a taste of what is to come. Expect similar data for Kingfisher and Air India. India is going to be a much more interesting aviation market than China's. A recent paper put out by T2impact states that the Indian market will probably grow faster than China's. This is based on the fact that India has a blossoming LCC market and is creating intellectual property faster. With its high growth in skills and the ability to move these skills cheaper and faster, India may surpass China. Fascinating.

US Army Antonov 72?

Flight International had this gem of news - "Boeing may introduce a Soviet-era military transport jet as a new option for the US military's need for a new fleet of small airlifters, the airframer told Flight International in Washington, DC yesterday. The Antonov An-72, a 70-seat jet with over-wing-mounted engines, is one of the options Boeing is considering to enter the US Army's pending Future Cargo Aircraft (FCA) competition, says George Muellner, Boeing vice president for Air Force Systems. A Boeing evaluation team has visited Antonov headquarters in Kiev, the Ukraine, and both companies remain in active discussions, says Muellner." The silence has been amazing - nobody in the US media said a word. Does this surprise you? It amazes us. This unfortunate looking plane is known as the Coaler by NATO. Why no media or political response from DC? Its a thought that crossed our minds.

Delta starts a battle with American

Delta PR -- Delta Air Lines' customers in New York will be able to fly non-stop between the city's preferred airport at LaGuardia and more of the city's top business destinations with the addition of new daily flights to Chicago-O'Hare and Dallas/Fort Worth this spring. Beginning April 3, Delta will introduce five daily flights between LaGuardia and Chicago-O'Hare International Airport, and two daily flights between LaGuardia and Dallas/Fort Worth International Airport, with a third Dallas flight beginning May 1. Service on the new routes will be operated by Delta Connection carrier Shuttle America with the new 70-seat Embraer 170 jet featuring both first class and economy service. The Embraer 170 jet is one of the most preferred narrow-body aircraft flying today with large overhead bins and a comfortable seating configuration where every seat is a window or an aisle. ------- Watch American, already smarting from the Wright Amendment/Love Field mess, react without mercy to this. People traveling between NY and Chicago or Dallas are in for a delightful time of lower fares. Delta is using a small plane, so expect American to throw in 757s to burn Delta. This is a game that American is best at. Nobody plays rougher than they do when it comes to taking on competitors, particularly in this way. This is going to be a lot of fun to watch. American has seen off competitive threats before and we bet this will be no different. Delta can't stand a fight and can't take it.

Cruise woes for Cunard

Some passengers on the Queen Mary 2 are threatening a sit-in when the cruise ship reaches port in Brazil to protest a last-minute change in itinerary, the vessel's operator said Sunday. Cunard offered 1,000 passengers who had been scheduled to disembark in Rio de Janeiro, Brazil, a 50% refund to make up for the missing stops. The world's largest and most expensive ocean liner left New York on Jan. 15 and was scheduled to arrive in Los Angeles on Feb. 22. Carrying more than 2,500 passengers, it hit the side of a Florida shipping channel Jan. 18, damaging a motor and reducing its speed. ------- The most expensive technology can turn into trouble when mishandled by a human - but, oh the cost of the reputation to the ship and line when the customer gets put out! As if this industry does not have enough trouble with food poisoning and mising passengers. For more cruise fun see this site: www.classactionlitigation.com Should any of this sort of bad luck befall you, what can you do? In most cases, not much. Your remedies are limited by long-standing maritime law so take a good look at what's printed on your cruise ticket.

IFE on a turboprop - thats an upgrade

ATR has won a $350 million order for 20 ATR 72-500 aircraft from rapidly expanding Indian airline Kingfisher. The airline also has options on a further 15 aircraft. The airline says that the introduction of the type, equipped with an in-flight entertainment (IFE) system, will “put it ahead of the competition”. The order represents the first move into regional aircraft by Kingfisher. It plans to use the aircraft for feeder services from secondary cities to major hubs. “This aircraft will feature a number of firsts in the Indian market including the IFE system which is a key differentiator for Kingfisher Airlines and puts us ahead of our competitors,” said Dr Vijay Mallya, chairman and managing director of Kingfisher Airlines at the show yesterday. ----- Nice move! The world has too many single aisle planes with little or no entertainment. This is a smart decision as the Indian market is heating up and competition is driving service offerings.

Striking airlines

Scandinavian airline SAS was hit by severe disruption in Denmark and Norway on Monday after pilots went on strike and called in sick, leaving thousands of passengers stranded. Alitalia looks set to face a withering week of wildcat strikes, as unions took aim at CEO Giancarlo Cimoli and his cost-cutting plan to rebuild Italy's largest airline. Union unrest forced Alitalia to cancel at least 121 flights on Sunday, the fourth consecutive day of industrial action that the company warned would likely get worse. In the US, Northwest remains under a strike threat. On the third day of Northwest Airlines' bid to have its union contracts tossed out by a bankruptcy court, an airline executive testified that a strike by employees would cause it to liquidate and that it has not prepared for any work stoppage. One has to be very careful making bookings these days.

Qantas still evaluating 777LR

ATW -- Originally, the carrier was hoping to offer year-round nonstop Sydney-London service, but that would have required a 120-seat configuration and passengers would have had to pay a 30% fare premium. Late last year, industry analysts suggested to ATWOnline that a 1-hr. fuel-only technical stop westbound in winter would give the airline greater flexibility, allowing operation of the dash 200LR with a 250-seat configuration, including premium economy, with no fare premium. "The reality is our operational criteria is tougher than other airlines and in service we will find that the 777-200LR will operate nonstop both ways almost year-round," said one Qantas source. Gregg reconfirmed that the carrier also wants the 777-200LR for other long-haul flights from Sydney to destinations such as Dallas, New York or Frankfurt. It is contending with intense competition from Emirates on routes to Europe via Dubai and also faces the prospect of archrival Singapore Airlines entering the Australia-US market at some point. It wants an ultra-long-range hub-busting aircraft to give it more flexibility. Analysts expect it to order between 10 and 15 777-200LRs. Interestingly, Qantas was one of the seven airlines that helped Boeing design the 777 in the early 1990s and is the only one of those not to have ordered the jet. -------- A number of years ago Airbus was testing the idea of the 340-8000; a 340 with 8,000 mile range. Part of that study was to see how much more a traveler would pay to fly non-stop as well as what they would pay to make use of a bunk in the hold. Airbus had an ingenious design that created a 4 bunk space in a container sized “room”. The data indicated business travelers would pay a premium for non-stop flights with bunks because it would save them a hotel night. Those were the “good” old days before LCCs and companies cutting T&E costs to the bone. Airbus dropped the 340-8000 idea and developed the 340-500. So the thought of passengers paying a 30% premium on Sydney-London gets our attention. That seems inordinately high. Memory fades, but the Airbus data showed somewhere around $400 premium on top of then current business class fares. This was nowhere near 30%. Another aspect of the story is that Qantas seems determined to differentiate itself from competitors and they appear to have decided non-stop is the way to do it.

Aer Lingus plans emerge

Irish Sunday Times -- Aer Lingus is ordering four A330s (probably -200s) for delivery beginning later this year. Final details have yet to be concluded, however it is expected that the deal will put Airbus in prime position to conclude a much larger deal with Aer Lingus on its new generation A350 at a later date. Mannion is expected to insist on an option to upgrade the fleet to the more expensive but more efficient A350 aircraft at a later date. The double-decker A350 is the European manufacturer’s answer to the highly successful Boeing 787. The long-haul wide-bodied aircraft is the new battleground for the two world premier manufacturers. ------------ Double decker 350? Ok so the writer is not bright but this does confirm what we have been saying, Aer Lingus is buying the 350.

Connexion – where is it headed?

Connexion was supposed to have over 1,000 planes in service by now. But this not happened and they have been in business six years now. It is true 9/11 was a negative factor because no US carriers followed through on their initial interest. Connexion has apparently run into difficulties with airlines. Only non-US carriers are using it. The fleet is limited to about 200 planes and growing slowly. So Connexion has started to experiment with maritime users. The latest iteration Connexion is working on relates to creating an alternative broadband pipe to cockpit communications traffic. In January’s ATW John Croft writes a great story about creating an aerial network using airplanes as nodes. This is a very cool idea and Boeing, already offering EFBs (electronic flight bag), wants to add a feature to the EFB that will enable aircraft health management using the Connexion pipe. Good move. First some background is useful. It is smart to keep coming up with new uses for the existing connectivity. Clearly this sort of exploitation enables Connexion to do what every successful Internet play has done – exploit the leverage technology allows. The current “normal” approach for cockpit to ground (specifically airline operational control) communications uses something called ACARS (Aircraft Communications Addressing and reporting System) and as its name implies, it was developed so long ago nobody under 60 can remember. Its speed is pathetic in today’s terms – 2.4 kilobits/second. Its no wonder airlines spend a fortune on ACARS costs – in a time when communications charges are plunging for everyone else. ACARS may get an upgrade from SITA and ARINC to a sprightly 31.5kbs. Ho hum, even dial up modems run faster than that. Currently passengers are accessing satellite radio and live TV, but airline to cockpit transmissions are crawling along. Obviously change is needed and Connexion has a big pipe to help solve this problem as well as save airlines a bundle – something that Boeing is keen to do. Connexion does not have this world to itself though. AirCell and Verizon plan to offer airborne broadband soon. Cell communications are much cheaper than satellite. Connexion is Ku-band dependent and might not have primary approval in the US – potentially seriously limiting its service. This is why Boeing is a dark horse in the FCC auction set for a few months’ time. AirCell’s solution offers 3Mbits/sec or DSL-type speeds. This leaves the ARINC/SITA solution in the dust and costs about the same – so no higher order math skills needed to figure how that will work out. The neat aspect of broadband is that packet switching means very efficient use of capacity – meaning broadband access can also be used by passengers and the airline. Clearly this means revenue – something airlines love more than cheap fuel. SITA processes over 500,000 messages per day and 95% of these are AOC traffic that airlines pay for. There are 3,500 planes from 120 airlines using the service. No wonder Connexion is all over this idea. These messages might be worth a lot – at potentially 5c per message this means $25,000 per day. Background now delivered, back to the airplane-as-node story. AeroSat is the firm behind the idea of Airborne Internet. Each plane can act as a part of a peer to peer network. This is very important to comprehend because there are many spots in the sky where there is no satellite coverage. For example, once you fly south of the equator Connexion does not work. Hence no Qantas, Air New Zealand or South African Airways use of Connexion. If aircraft add three antennae they can become part of the AeroSat network and then sell spare bandwidth. AeroSat believes they will be able to deliver 45Mbits/sec when within 300 miles between aircraft or 150 miles from a ground station. The challenge here is airlines adoption of this idea. As we have seen, airlines are not falling over themselves to sign up with Connexion which also requires an antenna – but only one not three. The registration process for Connexion is getting better. It is amazing that Connexion have not developed their website into a travel portal. Currently users can create accounts and then login when in-flight without any further ado. There seems to be a disconnect between marketing and strategy in terms of better exploiting the potential. (We don’t give free advice) Burke Research did a survey for Connexion which found that 89% of respondents find the greatest benefit of in-flight connectivity being the ability to catch up on email. Clearly this speaks volumes about current in-flight entertainment which we have mentioned a lot on this blog. Moreover, it confirms IAG’s own survey findings. Speaking of revenues, the airline industry’s number one revenue maven is Michael O’Leary at Ryanair. He has made it clear that he sees in-flight connectivity as a revenue stream, particularly in terms of enabling BlackBerry-type devices to handle messages. In terms of revenues, Connexion, with the best in-flight broadband, should be raking in cash. But it is not. Based on IAG’s unofficial sources we think Connexion is generating under $50,000 per day in fees. Indeed, this may even be a high number. There are approximately 200 planes that are Connexion-enabled at present. If each of these planes flies every day (they are all long haul planes) and on average there are 5 users per flight, Connexion at its highest charge (~$30/day on a long haul) is probably collecting $30,000/day or $11m per year. There is no way this revenue stream will sustain the operation. We understand that Boeing’s Phantom works has a lot invested in Connexion’s technology and want to see it succeed. We think Connexion’s technology is amazing. But how can they make enough money to sustain? We hear rumors of layoffs. Clearly the upside potential is there but what will it take to turn this thing around?

Israeli market heats up some more

- Delta Air Lines is planning to introduce daily flights to and from Israel on broad-hulled Boeing 777s in March 2006. - Lufthansa are slated to meet with representatives of the Israeli Ministry of Transport in February 2006. They plan to open the aviation agreement between Israel and Germany. Lufthansa plans to ask for another daily flight, and landing rights in Munich and Frankfurt at a later stage. - Continental Airlines route from New York to Israel is considered one of its most profitable, if not its most profitable. Continental has also announced that if demand is sufficient, it will consider adding another daily flight on this route. Continental claims to be the preferred airline of Israel’s business travelers. - Arkia Airlines, considered the big loser in the Tel Aviv-New York designated carrier race has announced that there is a misunderstanding and that it plans to continue demanding designated carrier status on the NY route. Arkia controlling shareholder Avi Nakash says that he plans to lease a state-of-the-art plane, and will start flying to New York as a designated carrier. Failing that, Arkia will at least operate as a charter company on the route. Arkia is Israel’s second largest airline and cannot be ignored. ElAl has said that it was ready for the contest and had been "expecting it for a year". Which is an odd statement given its reaction to Israir's win. ElAl threatened it would go to court to overturn the decision, claiming that the government’s privatization guarantees it exclusivity on the NY route. ElAl has set up a call center to issue boarding passes by phone. It also plans to install state-of-the-art seats in business class and coach. It is hoped to do away with the complaints about the quality of seats and crowding. (Bear in mind ElAl has the record for carrying more people on a 747 than anyone - over 1,000 during the Ethiopian operation. So they know how to pack them in.) Israir has already offered to cut its price on NY-Tel Aviv by 10%. The cat fight has started. Travelers on this route should look forward to better service and cheaper flights.

Indian consolidation

ATW -- Jet Airways yesterday announced it is buying much smaller Air Sahara for $500 million, a step that will give it more than half of India's domestic market based on 2005 boardings, according to press reports.The two carriers had been in talks for some time. Both began flying in 1993 during the first phase of India's airline liberalization. Jet completed an initial public offering of 20% in early 2005, leaving Chairman Naresh Goyal holding 80%. According to Airclaims' CASE database, Jet operates 50 aircraft: Three A340-300s, five 737-400s (a sixth is in storage), eight ATR 72s and 34 737NGs. It has 10 A330-200s, 10 777s and 10 737NGs on order. Air Sahara operates 24 aircraft: Six CRJ200s, four 737-300s, three 737-400s and 11 737NGs. One CRJ is in storage, as are a 767-300ER and a 737-400. It has two 737-800s on order. Jet carried 9 million passengers in 2005 while Air Sahara flew 3.5 million, according to the Associated Press. Indian Airlines carried 8.7 million. The deal is subject to government approval. --------- This means the combined carrier has a bigger pilot pool - an huge asset in India today. The consolidation in the market is likely to continue. The Indian market, because of its very active LCCs is in good shape. A virile aviation market means a growing economy. What is of concern is the number of planes instorage - why would they do this? The Indian market is desperate for lift (hence these huge orders) so keeping relatively modern plaes in storage is odd. These stored aircraft could provide over 500 seats.

Hear about the Milliondollarhomepage?

If you did not, its too late, the thing sold out. But there is hope. We just found another one - here This one offers live tracking of your ad - which the orignal did not. Considering your ad is up for 5 years, we decided to buy one and grab a little bit of web real estate before it too is sold out. In case you're wondering, yes these pages work. Our minute ad on the original milliondollarhomepage generates 60 clicks per day...maybe because its next to the one with breasts - see if you can find it!

Southwest does it again

ATW -- Southwest Airlines once again demonstrated a "record unmatched in this bruising commercial airline business," reporting net earnings of $548 million for 2005, a remarkable 75.1% increase over a 2004 profit of $313 million as its extensive hedges cushioned the impact of high fuel prices.CEO Gary Kelly said yesterday that the airline expects its good fortune to continue through the first quarter of 2006 as it "continues to enjoy strong revenue momentum and benefit from reductions in competitive capacity," although he did warn that the shift of the Easter holiday from March into April this year will reflect on year-over-year first-quarter comparisons. Southwest's 2005 operating revenue rose 16.1% to $7.58 billion against a 13.2% increase in expenses to $6.76 billion. Fuel costs climbed 34.2% to $1.34 billion and the company is more than 70% hedged for 2006 at $36 per barrel. Annual operating income rose to $820 million, a jump of 48%. ----------- This is an amazing performance. Profitable for 33 years - a record not matched by many other airlines, anywhere.

MaxJet starts DC-London

Following the success of its New York service MaxJet is growing. Starting March 15, the airline will start service to Stanstead from Dulles. Introductory fares are at $999. On March 18 the NY flights goes to daily. This will add to pressure on Virgin and BA in Dulles. We expect government travelers, who must fly a US-carrier, to try get on this flight before United's. Now the DC area has another LCC in the market - this one offering North Atlantic service. This airline seems to be doing things right.

Revenge of the VLJ

AP -- Taking off for the first time this year will be small, speedy, cheap jets that big airlines worry will cause traffic jams around major metropolitan areas. Called "microjets" or "very light jets," they've been likened to SUVs with wings. With two engines and seating capacity for five or six people, they cost half as much as the most inexpensive business jet now in service. Three thousand of the little jets are already on order at three manufacturers. Albuquerque, New Mexico-based Eclipse Aviation has 2,350 on back order and expects to receive Federal Aviation Administration certification for its E500 by June. The first E500 — which takes less than five days to make — will be delivered 10 days later. The FAA and airline pilots are wary of the sudden emergence of a new class of jets. But Vern Raburn, the brash founder of Eclipse Aviation, scoffs at the notion that VLJs will blacken the skies. Supporters of the little jets predict they'll go to out-of-the way sites, in the vast empty skies between more than 5,000 small, underused airports. "We're going to offer service where the airlines don't," Raburn said. Duane Woerth, president of the Air Line Pilots Association, the largest pilot union, said it's more likely the new jets will swarm to the busy airspace above the 35 biggest airports, through which 95 percent of all air passengers travel. The FAA predicts at least 4,500 VLJs will be in service 10 years from now, though Blakey concedes that's a conservative estimate. NASA projects 20,000 in 2010. --------- We come down on the side of the VLJ - you would have guessed that from the title of the story. Travelers wanting to use these little birds will fly from smaller airports and AVOID big airports like the plague. Why would you want the benefit of a VLJ only to be held up in line with 50 other planes at LAX, JFK, ORD, ATL, etc? It makes no sense. Users, we believe, will opt for small airports where they can drive up to the plane and split. Fast turnarounds will be needed to make these planes financially effective. No way will you get that at a traditional airport. At a $2m cost and eight seats you don't need to fly hard to make the ROI work. With three ops/day, an 8-seater generates 8,400 seats in 350 days. Three ops is low please note. Excluding operating costs, you only need $238 per seat over 350 days to amortize the plane (assuming 100% load factor). Nice numbers don't you think? Note legacy carriers are up in arms at airport charges. Why would an air taxi service want to bother with big airports? Stupid they are not. With the VLJ you go to where the traveler is - not the other way around. If LCCs caused legacy carriers heartburn, VLJs will cause ulcers.

Mobile TV

russellbeattie.com -- Mobile TV is just going to get more and more prevalent over the next couple years. There’s tons of momentum in the area, even if we’ve only seen a few commercial products so far here in the U.S. Yes, the first solutions introduced during the past year or so ago were definitely less than optimal - MobiTV choppily “streamed” over GPRS using a Java client is a good example - but networks are getting faster, and handsets are getting more powerful and alternative sources like iTunes video are popping up everywhere. Verizon and Sprint both have decent mobile video experiences over their EV-DO networks right now. And soon we’ll have digital TV receivers built right into the handsets themselves capable of streaming 10-50 channels of high-quality content right to your phone, just like your cable TV. There are phones right now in Korea which do this already, *and* have PVRs built right in, so you can pause and record shows right on the handset for viewing later. ------ If you run an airline and you are spending north of $500,000 on IFE equipment per plane start worrying. IFE's great promise has been trumped again and again by chnages in technology. Some IFE systems use Intel's 386 chip - remember that one? Its so mid-nineties. Forget about putting in IFE equipment. People will bring their own - all you have to do is provide the pipline for the content. Its cheaper, simpler, requires much less maintenance and you get to make more money by just selling access. For example - click to see what BSkyB is offering.

Advice to US flight crews - go abroad

With ongoing disputes across the US airline world, there is yet another ray of hope. Previously we pointed out the urgent need for pilots in India and China. Now another option has become available in the Middle East. Emirates, which will begin receiving Airbus A380 superjumbos from April next year, will hire 8,000 new cabin crew for its rapidly expanding fleet, said a top official. "We are currently hiring 60 crew members every week. From next year the average recruitment of cabin crew will go up to 100 per week as larger aircraft join the fleet, especially the A380s," said Terry Daly, Emirates Senior Vice-President for Service Delivery. This is in addition to the 6,000 cabin crew that we already have. By 2011, we will have more than 14,000 cabin crew on our payroll." If you're looking for a gig, check out their website. This is probably the world's fastest growing airline in history.

Northwest - how bad is it really?

Daniel M. Kasper, managing director of LECG, LLC and head of the firm's transportation practice says that the economics of the U.S. airline industry have changed dramatically and NWA must adapt. "The financial problems experienced by Northwest and other legacy network carriers during the past several years resulted from a number of factors. Chief among them has been a series of major changes in the U.S. airline industry that undermined legacy carriers' ability to charge prices sufficient to cover their costs and depressed the demand for commercial air service." "These and other factors have caused industry-wide airline ticket prices to fall sharply during the past several years. Because low-cost carriers (LCCs) now set pricing in markets accounting for the vast majority of domestic origin and destination passengers, and because this is a trend that is almost certain to continue, Northwest has little choice but to reduce its costs to levels that will enable it to effectively compete against LCCs," Kasper said. Kasper added that, "At the heart of Northwest's uncompetitive cost structure are labor costs that are now the highest in the industry. Total compensation per Northwest employee is more than 66 percent higher than LCC average employee compensation." "Northwest's unit operating costs (excluding fuel and stage-length adjusted) were second highest in the industry during the third quarter of 2005 and 61 percent above the average of the LCCs. Including interest payments, Northwest's stage-length adjusted unit costs are the highest in the industry and 67 percent above the LCC average," Kasper said. He continued, "Northwest's unit labor costs are far and away the highest in the industry. Northwest's unit labor costs are significantly higher than those of the other restructured legacy carriers and 71 percent higher than the LCC average." Kasper added that, "Restrictive work rules limit the productivity of Northwest's workforce." ----------- Wow, reading this we want to prepare the coffin. What is not mentioned here is the urgent need to park those 35 year old DC9s that love $2/gallon fuel. Bear in mind Kasper's is one opinion of the airline's situation. Northwest has always had a strange route network - their little internal joke was "its cold and dark but its ours". The network is very dependent on short hops hence their love of smaller planes. But they kept refurbishing the DC9s - when they could have bought 717s at bargain prices. The 717 is gone and now they are looking at the bigger Canadian RJ which is still a paper airplane. They kept their DC10s longer than any other airline too - though they first ordered the Airbus 330 a long time ago as a replacement. The point we are making is this, Northwest moves very slowly (maybe its too cold?) and its dithering has cost it big time. If Kasper is even half correct, the airline is in big trouble. They have run out of dither time. Big decisions are being forced on managers and they don't like it at all. Its even worse for the pilots, cabin crew and ramp workers. We recall visiting Northwest's offices some years back and seeing whole floors in the building left vacant (cold and dark, the way they like it) after big layoffs. A sick airline is a very sad place to visit. Everyone looking over their shoulder, many hiding under their desks - not a place where you find fresh thinking and creativity. This used to be a company that leased nothing; its fleet was bought and paid for. Those were the days when bankers could not tell managers what to do. We couldn't imagine Delta wanting to merge with Northwest no matter what Mr. Mineta thinks.

Bird Flu update

Item - A flu pandemic triggered by a new strain of virus against which people would have no defense could cause 40,000 deaths in the Netherlands, according to the country's public health institute (RIVM). Over a three-month period, such a virus could make a quarter of the Dutch population -- about four million people -- ill, according to the worst-case scenario by the institute's experts. Item - Turkey announced that another child was diagnosed with bird flu, raising to 21 the total number of human cases in the country, among them four teenagers already dead and a small boy in worsening condition. With the lethal virus now raging at the threshold of Europe, officials from half of the world's nations gathered in Beijing for a two-day meeting aimed at raising 1.5 billion dollars to help fight the disease. Item - A U.S. avian flu pandemic on the scale of one that took place in 1918 could take the lives of an estimated 1.9 million people and cost the life insurance industry $133 billion in extra death claims, according to a study released on Tuesday. A moderate influenza outbreak, based on similar events in 1957 and 1968, could cause 209,000 deaths, according to a report released by the Insurance Information Institute (I.I.I.), which cites data from U.S. Department of Health and Human Services. That compares with a typical year when 36,000 Americans die from the flu. ------- This is getting scarier because governments the world over are reacting too slowly (what a shock). Bet you not one politician will get sick and there will be shortage of flu shots for them.

Train beats plane

Eurostar, operator of the "chunnel" trains between London and Paris, has increased its share of business travel between those cities. A report in The Times indicates that the train now claims "71% of the market share of air and rail routes" between the two European capitals, up 14% increase from 2004. The success of the train shows because of two airlines serving this market (British Airways and bmi) have eliminated business-class. Eurostar executive Richard Brown used this news to take a dog at the airines “Our focus on business travelers is paying off. As some airlines cut out their business-class cabins, they’re also cutting out their customers.” Convenience of train service compared with air travel is a big factor, for example door to door time by train is shorter. A 2007 upgrade will reduce travel time to two hours and fifteen minutes as UK rail speeds increase.

African aviation getting serious about safety

USAToday -- With a reputation for having some of the world’s most dangerous airlines, Africa’s continental civil aviation body said Monday that it will try to “name and shame” airlines operating "coffins in the air," Agence France-Presse reports. "Countries needing to spruce up their aviation safety will be asked what sort of assistance they need: logistical or financial," says Tshepo Peege, president of the African Civil Aviation Commission (AFCAC). "If they then to do not make the improvements, we will name and shame the offending airlines and countries. Enough is enough, we can't continue to see coffins in the air." Several African airlines have been involved in serious crashes during the past year, while others have had planes grounded because of serious safety concerns. "People are flying into Africa on other airlines because of their safety concerns," Peege says. "As a passenger you want to fly out as a passenger and return as a passenger. You don't want to fly out as a passenger and return as cargo. ---------- We couldn't have said it better.

Israel Names Second Tel Aviv-NY Carrier

Reuters -- Israel said on Monday it would allow local airline Israir to compete with El Al on flights between Tel Aviv and New York. Tourism Minister Avraham Hirchson told a news conference: "In light of the data that was presented to me regarding the significant rise in the number of passengers on the transatlantic route, there is a blatant and essential public interest in the appointment of an additional designated carrier on the Tel Aviv-New York route." The decision would increase the number of flights and seats to meet demand and lower prices, he said. El Al said in a statement it would seek legal ways to reverse the government's decision, which was a "gross breach of the commitment" given by the government to the new owners on the eve of El Al's privatization in 2003. Israir will get the designated carrier permit for the route for two years starting immediately, during which time the full impact of the decision would be assessed, Hirchson said. ----------- Great news! Competition will sharpen ElAl's performance. Israeli service (not only on airlines) has always spotty and enhanced competition will reduce the likelihood of getting poor service. Of course ElAl, although recently privatized, reacts the way it does because its culture remains one of a government owned airline. It hates competition. Lufthansa has been driving competition in the Israeli market by using 747-400s. Other European carriers have also started using bigger planes. So the traffic volume is there as security fears start to taper off. Israelis in general and Jews in particular prefer ElAL as the "home" team. It is among this crowd that Israir will go sopping for customers and why ElAl is so put out.

Airbus wins 2005?

Reuters -- Airbus outsold Boeing in 2005 with 1,055 net orders, it said on Tuesday, capping a record year for both marked by fierce price competition and strong demand from Asian and budget airlines. Airbus almost tripled the 366 net orders it had captured in 2004 and beat Boeing's tally of 1,002, despite many analysts' expectations that the European planemaker risked losing its lead for the first time since 2000. Airbus had 678 orders at the end of November, trailing Boeing at 827. At an annual news conference Airbus said it also led Boeing in deliveries for a third consecutive year, with 378 planes leaving its assembly lines compared with 320 in 2004. Boeing had 290 deliveries after a strike trimmed higher expectations. Airbus claimed victory over Boeing in orders, deliveries and backlog, with a 51 percent share of net orders for jets able to seat at least 100 passengers and 55 percent of the order book. Airbus figures showed that its orders were mainly driven by sales of cheaper, single-aisle models to budget airlines, while it lost several deals for larger jets to Boeing. The US planemaker had a record year for its twin-engined long-haul 777 and beat Airbus's planned mid-sized A350 with strong sales of its new 787 Dreamliner. Airbus said it had 87 firm orders and another 85 commitments for the newly launched A350, whereas Boeing said earlier this month it had orders for 235 of the 787s last year. --------- What a blockbuster year! Airbus' success remains with the 320 family, its bigger planes losing lots of ground to the 777. Airbus' 350 is still way behind the 787 - so we are a bit skeptical of the 350 sales numbers. Airbus booked 172 orders and commitments in 2005 for the 350, 28 short of its very publicly-stated target of 200. A one week ago EADS co-chief executive Noël Forgeard said they had reached its target. So you can understand our skepticism. Also, 918 out of 1111 gross orders for Airbus in 2005 were for A320s. Some with delivery dates in 2016 by which time the 737 and 320 replacements will be flying. We can't figure how they sold almost 40% of their annual sales in one month. Talk about new math. We also expect to see Boeing deliveries shoot up this year as we don't expect another strike. Overall 2005 was been a fantastic year for sales - one has to wonder how many will be delivered to some of the ambitious startup airlines. The combined gross orders for the two companies is 2,140, the largest in history, beating the 1989 total of 1,631.

Another 380 problem?

http://www.luchtzak.be/postt15051.html -- The rumor starts - "fuel pump problems have arisen, Engineers are working towards a speedy fix. Then we came across this - "Seems there may be a difference of opinion on fuel safety systems. The Airbus A380 will not feature fuel tank inerting, but rather a comprehensive effort to minimize ignition sources. National Transportation Safety Board (NTSB) officials say the system safety assessments upon which the fuel system for the A380 is predicated, with the focus on ignition sources, is an incomplete approach. "The special review under SFAR 88 shows that the system safety assessment doesn't work," an NTSB official said. He hastened to add that it is not believed the A380 "will be more vulnerable than any plane flying today," but he hoped that "new production would be harmonized" in terms of European Aviation Safety Agency (EASA) and Federal Aviation Administration (FAA) requirements. Here is where the failure to produce a notice of proposed rulemaking (NPRM) on this side of the Atlantic has now undercut the U.S. position. Last year, the FAA said a flammability reduction system (e.g., inerting) is being considered for the A380 and Boeing's new B787. At that time, FAA officials said they wanted to avoid surprises, and that manufacturers should plan on including the systems. The B787 will feature inerting, although regulatory requirements are evidently years away, if that. As EASA notes, "Regulatory action to address both current and future aircraft fuel system certification standards has been proposed by FAA ... but this is not yet in place." Moreover, "EASA is not aware of any Supplemental Type Certificates [STCs] already issued for nitrogen inerting systems." In other words, no requirement, no STCs, no mandate for inerting. "Airbus will demonstrate that the ignition source prevention features are sufficient, in and of themselves, to meet the aircraft safety objectives considering a permanent flammable fuel tank environment," EASA declares. "Airbus will further demonstrate through its flammability assessment that it has further upgraded its safety level by implementing design features, which minimize heat transfers to the fuel tanks, avoiding unnecessary increases in the fuel tank flammability." There is no center wing tank on the A380, although one could be fitted on subsequent models of the aircraft (e.g., the 800-passenger version). Moreover, the air conditioning packs on the A380 are located on the forward side of the front wing spars, with insulation. Thus located, they are not directly under any fuel tanks, which is the case on the B747 and the B737; these models have experienced three fuel tank explosions in recent years - TWA 800 involving a B747, a Philippine Air Lines (PAL) B737 at Manila, and a Thai International Airways (THA) B737 at Bangkok. All three sustained explosions of the center wing tanks. "The A380 air conditioning packs are in the 'shoulder' of the wing," the NTSB official conceded, but on a hot day on the ground, as was the case in the Philippine Air Lines and Thai Airways explosions, the airplanes didn't have the benefit of airflow to dissipate the heat of the packs, and this also would be the case with the A380 on a hot day. The safety board registered its objections to EASA, which rebuffed the complaints. The Europeans seem bent on issuing special conditions for the A380 that focus on three sources of ignition, and the need to minimize them: electrical arcs, friction sparks resulting from mechanical contact of rotating equipment in the fuel tank, and hot surface ignition. "The applicant should perform a Safety Assessment of the fuel system showing that the presence of an ignition source within the fuel system is Extremely Improbable [that is, 1 x 10- 9, or one in a billion flight hours] and does not result from a single failure," the EASA said. Airbus must account for a variety of fuel pump failure modes that can cause ignition (e.g., debris lodged inside pumps, poor bonding of components to structure, etc.). It's generally conceded that a pump immersed in fuel cannot cause ignition due to any failures. Indeed, that is why so many airworthiness directives (ADs) have been issued limiting the running of in-tank pumps to a certain minimum fuel level. This ensures that fuel levels in heated tanks (those with air conditioning packs located below) with flammable ullage would never drop to a level where fuel pumps would not be immersed - no matter what the aircraft's pitch, roll or yaw attitude. Yet, knowing this, Airbus apparently is not being required to locate fuel pumps outside the fuel tanks, where they would never be "not immersed" nor exposed to in-tank heated ullage. This logical avoidance step would also allow high voltage/high current pump wiring to remain outside of the tank. Regarding specific FAA and NTSB objections to its special conditions, EASA was pretty clear in its view: FAA: "Flammable conditions within the [Thai and Philippines jets] would have been reached in flight after these airplanes began to climb, even if the tank had not been heated." EASA: "EASA does not consider any of the A380 fuel tanks as exhibiting high flammability characteristics." FAA: "The Monte Carlo assessment approach ... has been used for the last seven years to assess the impact of design changes on fuel tank flammability." EASA: "The Monte Carlo tool is not the most adequate tool to establish if a tank belongs to either the low or high flammability categories." NTSB: "The draft [special condition] ... is based on a philosophy that accepts fuel tank flammability, proposes that safety assessments be performed to demonstrate that the presence of an ignition source within the fuel system is 'extremely improbable,' and describes the operation of a new transport airplane with a flammable fuel/air mixture in the fuel tanks." EASA: "It should be noted that the 3 accident airplanes were certified before the requirements to conduct rigorous safety assessment of fuel systems were put in place." The EASA overall view is as follows: "EASA shares [the] NTSB concern about the need to control flammability. EASA would however first target fuel tanks which receive the largest heat input, as put into evidence by the 3 accidents (737 PAL, 747 TWA, 737 THA). This is typically the case of center wing tanks on most Boeing aircraft as well as on some Airbus models. Targeting all tanks, including those displaying low flammability exposure, would be impractical and is not justified by the in-service experience." The FAA itself has nominated avoidance of heating, cooling, inerting and reduction of fuel misting due to agitation (use of tank baffles) as valid measures of flammability reduction. Airbus has gone for cooling and avoiding fuel heating as its methodology. Moreover, because of the demonstrated need to reduce the A380's basic weight, it seems doubtful that Airbus or EASA would endorse a system they deem unnecessary (such as nitrogen inerting). As the EASA says, "The A380 is indeed a 'SFAR 88 airplane.' " That is, it will meet all ignition prevention measures. The NTSB wants it to meet flammability reduction measures, too. There's the rub. It's worth noting, for future designs, that a sealed and pressurized fuel storage system could also control the flammability of ullage, whether heated or not. Designers may wish to look to this as a potential solution."

Airbus Facing Pressure To Update A340

Reuters -- Airbus is expected to announce record sales and aircraft output for 2005 on Tuesday but could be forced to update the four-engine A340 to fight rival Boeing's 777, a US newspaper reported on Monday. The three versions of the Airbus A340 won only 15 orders in the 11 months to November, according to the most recent figures Airbus published, the Wall Street Journal said. The two-engine A330-300 also won 15 orders. But Boeing's competing 777 models won 154 orders last year. Airlines say that the 777 is beating the A340 because it is newer and less expensive to fuel and maintain, it said. According to aviation executives, modifying a plane like the A340 could cost USD$1 billion. ---------- 340-600 Yes Airbus has got caught. Yet you can be sure the spin from Airbus' PR will make it positive. The current 340-600 is heavy and less fuel efficient because its reinforced hull is so much longer than the original 340-200. Air France, is a major Airbus customer and also a big 777 user. It is one of a few airlines that has flown both A340s and 777s on the same routes. WSJ reports that Chief Financial Officer Philippe Calavia said a first-generation A340-300 from the 1990s burns about 15% to 20% more fuel per seat than a 777 of the same vintage. Tim Clark, president of Emirates, said that its new 777-300ERs have had fewer problems than its new A340-500s. The 777 has "exceeded all its planned performance criteria" for fuel consumption and range, Mr. Clark said. "That's why there's a resurgence of interest" in the 777." Air Canada CEO Robert Milton says the 777 has considerable economic efficiencies over Airbus models. Moreover, Airbus is working so hard on fixing the 380 plus its commitment to the 350. There is simply no money for a 340 fix. Unless the Euro-gnomes step up, taxing the EC a bit more to help out. But with the WTO issue so hot, we don't think that dog will hunt right now. Boeing's 777 has boxed Airbus into a corner for now. Once the 380 is rolling, revenues will improve at EADS enough to consider a replacement of the 330/340 line - likely an enhanced 350. GE90-115 The other story here is that the 777 was "saved" by the GE engine. Its lower than expected fuel burn and incredible power, mated with fabulous maintenance changed the plane completely. The big GE gave the 777-300 a new lease of life.

Airfax prediction

Every year we try to see if we can out guess this crazy IFE market and this year will be no different. In the past we correctly predicted portable IFE, wired in-seat portable systems and the rise of Wi-Fi. Conversely, we missed a few easy ones too like the ascension of Connexion by Boeing, the predominance of in-flight telephony R&D, and the dramatic increase in aviation in China. [snip] - Be afraid; be very afraid, of Smartphones; such as Mobile PC and others with 3 rd generation connectivity solutions and Wi-Fi. These devices are going to be big and if they dont make it big time this year, they absolutely will next year. - We anticipate mobile entertainment and connectivity to further expand into the automobile industry, leaving the technologists to wonder why aircraft are so wholly unconnected. - At least one engineer, if not more, will draw a block diagram of an iPod-based IFE system for aircraft. -------- We couldn't agree more.

90% of airports to support WiFi in 2 years

The results of the 2nd Airport IT Trends Survey - 2005, commissioned by SITA, Airports Council International, and Airline Business magazine, were released. - Only 6% will have RFID technology deployed by the end of 2006. 33% of airports say they have no plans to implement RFID for baggage management, while 47% of airports surveyed have no plans to deploy RFID for cargo operations. [so expect you bags to continue to get lost most of the time] - At least 50% of airports surveyed globally have already deployed some form of self-service kiosk; plans over the next two years will see this figure rise to 75%. [there is hope soon you won't have to speak to anyone at the airport - this will be a serious upgrade in passenger relations] - More than 90% of airports surveyed will offer public access to a Wi-Fi network within the next two years. [expect more stupid policies on free wiFi access at airline clubs like at Boston. If you can, get a bluetooth cellphone and have a bluetooth laptop to avoid needing any other means of going online. If you don't know what this means you deserve to pay $10/hr for Internet access.]

Lufthansa & Connexion growing

With 50 long-haul aircraft equipped with Connexion, Lufthansa has the world’s largest in-flight Internet fleet. We hear that by the end of 2007 the entire long-range Lufthansa fleet (more than 80 aircraft) should be so equipped. According to our sources, there about 200 Connexion-equipped planes. The latest availability data is to be found here. Lufthansa is by far the biggest Connexion customer. Other carriers are simply not showing as much commitment. This frustrating because the concept is so good - we ask again - why is this service not on every airplane?

Aeroflot flips Boeing 787 for Airbus 350

Aeroflot, it appears, has decided to order the A350 instead of the 787. The order will apparently be announced during a press conference next week. This allows Airbus to announce that it met its goal of 200 orders in 2005. Well sort of. The 787 order information can be found here. Reports say that it has been a "very politically charged environment". You may recall that Aeroflot initially decided on the 787 late last year. The Russians want us to believe that the 787 order was in reaction to the EU's reaction during the Russian/Ukraine natural gas crisis. Now, it appears all is well the EC and they "remember" how much the Russian aerospace industry is working with Airbus to build the A350. More on this here Aeroflot seemed a certain for the A350 even before Airbus invested in Irkut and gave them work for the A320 as they have a number of new Airbuses already. That's why the 787 announcement caught most pundits off guard last year - although it fitted well with other airlines were doing facing the same choice (the Qantas order was at the same time). The gas crisis happened way after this. So the whole story is just that - though a story that Andrei Gromyko would have been proud of. And to think we all thought the heavy hand of the Kremlin was a thing of the past. In case you're wondering about Kremlin involvement in Aeroflot decision making, so are we. This is like the old days, the bad old days. If you are a regular reader you know our opinion on government "involvement" which always means interference. For the thinking person, Apparatchiks everywhere remain your enemy. LOT, the Polish airline, faced similar pressure from Airbus when it was making its 787/350 decisions. The Polish, to their eternal relief, do not have a Kremlin. This is a big win for Airbus though and especially for Mr. Leahy, whose credibility took a big dent on December 31st when there weren’t 200 A350 orders. So well done to them for pulling this off – however, nothing is final until the announcement. Meaning the wires are burning between Seattle and Moscow even as you read this. Boeing does not want to see a 787 loss to the 350 at Aeroflot and will pull out the stops to win this one back. As we said, its like the “good” old days again.

Connexion cuts prices

From the end of the month passengers on the daily total of around 170 Connexion-equipped flights will be able to obtain 24 hours’ unlimited Internet access for $26.95. Should a passenger board another Connexion-equipped aircraft within the 24 hours, he will be able to transfer any remaining paid-for time to that flight. This deal compares with a present whole-flight tariff of $29.95, with no provision for transfer of time to a subsequent flight. Prices for lesser blocks of time have been simplified to $9.95 for an hour, $14.95 (two hours), $17.95 (three hours). ---------- Transferring flights? Not too many people do this and the Connexion-fleet is small, so that is really a low risk move. As for the new pricing, the price has come down marginally. We don't expect to see useage jump because of these changes. The concept remains hot. “Initially, we found differences in the levels of Connexion usage depended on whether travellers were flying to or from Copenhagen, our main hub in Scandinavia,” says SAS Americas VP Sveneric Persson. “Going to Copenhagen, it is passengers from Seattle, Chicago and New York who top the usage figures. From Copenhagen, the highest numbers of users are found on flights to Seattle, Tokyo and Beijing.” You have read here about SK938. Connexion seems to be struggling with its growth prospects in two areas - fleet size and on-board use. The issues are clearly related. Connexion even tried advertising the service in newspapers - a long shot unlikely to do much. Late in 2005 they were offered an opportunity to advertise the service in a survey that would enable them to put a logo next to each airline and airplane carrying the service. This would get the message across to exactly the target audience - but they demurred. Connexion has got to get the traveler hooked early. Data is the drug. If, for example, Connexion created its on-line portal as a web site accessible to anyone, that would start to create dependency and brand awareness. Making their portal open to every potential traveler is possibly the best first step. Travelers will then start to make flight choices around the ability to stay linked to the portal. Connexion’s new relationship with Yahoo hopefully could lead to this. Yahoo could certainly help create a portal with content to attract every business traveler everywhere – the content is out there, it just has to be assembled in one place. If Connexion could prove that its service has become a primary factor in airline choice, then other airlines will sign up because they have to. The technology is powerful enough to do this because it attracts the airline industry’s key customer – the business traveler. But until business travelers actually know about the service and are comfortable with it, taking out their credit cards in-flight is simply not going to happen. The portals users log into appear to be that of the airline, yet the charges and all the back-end activity is Boeing Connexion. They have all the pieces but have not assembled it or executed well. Boeing has never been in the retail space before and it shows. One would think the company understands the air traveler as well as any other company in the world. Yet we see this disconnect between its clever technology (it is the best in-flight Internet service) and its ability to translate this advantage into a decision-impacting brand comprehended by travelers. Boeing speaks about its interaction with passengers in designing its 777 and 787 - but it sells to airlines not consmers. So part of what they need exists, but only a part. You can have the best technology in the world, but if you don’t connect with the end user, you have nothing. The world is going wireless so the future should be bright and yet its not. What's the matter with Connexion?

Air One to trump Alitalia?

ATW -- Italy's Air One, which operates an all-737 fleet to 23 domestic destinations, repositioned itself as a European player yesterday by signing a contract with Airbus for 30 A320s and 60 options.The deal reportedly is worth $1.8 billion at list prices. The CFM56-5B6/P-powered aircraft will be configured in a two-class layout seating 159 and gradually will replace the carrier's leased fleet of 21 737-400s, six dash 300s and three dash 200s. It now is Italy's second-largest airline and has partnered with Lufthansa since 2000. It also has codeshare arrangements with Air Canada, Aegean Airlines and Darwin Airlines. --------- This sounds more like Italy needs Alitalia less - which is a wonderful thing. Alitalia, like the Greek government owned Olympic, has passed its time. Governments have no business owning airlines as they invariably become a place where jobs for pals is the primary qualification. Moreover, other LCCs are eroding the market. EasyJet and Ryanair have both seen good growth. EasyJet's new base in Milan is expected to generate 1.2m passengers this year after seeing a 92% rise in business between 2004 and 2005. Meanwhile in 2005 Ryanair expected to carry 10m passengers on 66 Italian routes, double the 5 million passengers it carried only two years ago. Clearly the Italian market is sizeable and as these two LCCs demonstrate, can easily live without Alitalia. Government owned airines should make an appointment with Dr. Jack Kevorkian. As you can see from this picture he even looks qualified to work with gnomes. (For those of you unfamiliar with our weird sense of humor, have a nice day) For those of you not familiar with this fellow - see this link: http://www.kevork.org/

USAF Tanker update - EADS gets serious

FI -- The first aircraft to be equipped with the new boom technology (pictured above) – an EADS-owned Airbus A310 demonstrator – was rolled out from the company’s Getafe plant near Madrid on 23 December and will soon begin a qualification campaign expected to total some 300-400 flight hours. EADS’s Military Transport Aircraft Division, which had planned to fly the demonstrator for the first time in mid-2005, says its original schedule has been delayed not by “major incidences, but by normal ones derived from a programme of this complexity.” -------- This has got to make the people in Seattle nervous. Congress does not seem as Boeing-fiendly though there is still a strong "buy America" sympathy among some. All the same, the USAF has a choice now and Boeing is been selling up a storm in the commercial arena. On balance, with the KC767 on ice and talk of a KC777 so much hot air, EADS could sneak one in. A non-US vendor has pulled this off before - note the new Marine One helicopter. At the same time, the cancellation of the US Army Aerial Common Sensor project has been cancelled, in part because the Embraer ERJ-145 regional jet, was not large enough. So while non-US vendors have mixed succes, it is important to note that the Pentagon is certainly looking at their options and the next tanker is not a given for Boeing.

US To Auction Airwaves For Airline Internet

Reuters -- US regulators plan to sell airwaves starting May 10 to provide communications services such as high-speed Internet to US air travelers. Download the FCC document from here: here The US Federal Communications Commission said on Wednesday it plans to auction airwaves now used by phones embedded in airplane seats. Those phones, operated by a Verizon Communications unit, are not used regularly because of the high cost. The financially strapped airline industry could generate a new stream of revenue by partnering with companies wanting to offer high-speed Internet, known as broadband, or a cheaper on-board phone service. Verizon plans to bid in the sale so it can offer wireless broadband during flights, according to company officials. It could take about a year for Verizon to deploy if it wins a license, they said. "We're certainly planning on being successful at the auction," Bill Pallone, president of Verizon Airfone, said. "Primarily, initially we believe it will be data (service), which is the biggest usage we anticipate here in the States at least." The FCC proposed setting USD$5 million as the minimum the auction must raise for the sale to be completed. Cingular Wireless, the biggest US wireless carrier, declined to comment on whether it would bid. The FCC is also weighing whether to allow consumers to use their own cell phones on planes, but that would need agreement from aviation regulators and the FCC has yet to make a decision amid fears of a backlash from many fliers who see airplanes as a cell phone-free zone. Already Boeing offers a satellite-based in-flight Internet service, known as Connexion, on foreign carriers such as Germany's Lufthansa and Israel's El Al. The cost ranges from USD$9.95 an hour up to USD$26.95 for 24 hours. The FCC set up scenarios for splitting the airwaves and will go with whichever one receives the highest bids. The possibilities include two overlapping licenses for 3 megahertz (Mhz) of airwaves, or one 3 Mhz exclusive license and another 1 Mhz exclusive license. ------------ Word on the street is that Verizon wants this bad - real bad. They have United ready to go on 757s if they get the go ahead. United is keen to take the step as a differentiator and good for them. Based on United's published plans in-flight broadband is not a primary focus. How about American and Continental? Playing their cards close to the vest and waiting to see who wins. They could go with anyone. While this is in play, Verizon is not the only game in town. OnAir and Air Cell are known to be sniffing around for spectrum as well. There may be others under the radar. Its going to be interesting.

LCC makes pledge

Monarch's manifesto clearly sets out the airline's pledge to its passengers and encourages everyone to stand up, say enough is enough and join the low cost revolution to make flying fun again. Recent passenger research conducted by Monarch shows that whilst most people claim to choose their airline based on price - which is an expected outcome, the flight experience including factors such as flight time, the use of major overseas airports and the in-flight service/benefits is becoming increasingly important. The research also indicates that people are getting tired of the apathy adopted by the carriers, with no-one surveyed spontaneously claiming to enjoy flying with any of the familiar low cost airlines. Monarch is pledging to change people's perception of flying with a low-fares airline and has launched its passenger manifesto. The manifesto outlines its commitment to providing a higher level of service for passengers. Monarch's passenger manifesto: -- We will always treat our passengers in a respectful way -- All passengers will be treated as individuals and not herded like cattle -- We will not presume that all passenger needs are the same. Increased communication between our staff and our passengers is encouraged -- When things go wrong, we will always listen to our passengers and act to resolve problems with minimal disruption and fuss -- Unlike our low cost competitors who fly with the legal minimum number of cabin crew, we will always carry one additional crew member on our flights -- We understand it is the extras that make a difference and will always go that extra mile to provide these and make our passenger's flying experience more comfortable. The extras our passengers can expect to receive include - A complimentary newspaper - Free in-flight entertainment - Pre-bookable seats including extra legroom seats offering an extra 6 inches of legroom on every flight - A good selection of hot and cold food including complimentary tea and coffee - Free hot towels to freshen up on every flight - Passenger loyalty scheme, Vantage Club, which provides passengers with priority check in, executive lounge access, free date and name changes and a dedicated reservation phone line -- And most importantly we will continue to offer low fares on flights to main European airport ------------ Can you imagine a service company committed to service? Is this not LCC heresy? Why this is wonderful to read....could they fly in the USA, please? Even Southwest and jetBlue don't have one of these manifesto things. Bet you their legal depts won't allow it because somebody will sue....

Content vs Devices - we're still arguing over this

Hollywoodreporter.com -- The dizzying array of portable, personalized, potentially ubiquitous devices and competing platforms at last week's Consumer Electronics Show in Las Vegas provides a charged backdrop for the next battle for consumer spending -- this time over interactive content, services and functionality. That represents as much opportunity as challenge for more traditional media companies willing to change their perspective and strategy. The emergence of differentiated services and content as the next frontier in the new-media revolution -- which will be as important as pricing among all competitors by this time next year -- foreshadows new players and new rules, already evident at CES. For instance, the declarations of a living room war by such unlikely rivals as Intel, Dell and Microsoft presents formidable new competition for Comcast, DirecTV and other cable and satellite providers, whose businesses are rooted in the home. These Internet-based hardware and software giants are in a position to establish the personal computer as the new-media center in the home -- the one place where content and services can interface with all other digital broadband devices, from the iPod to the television viewer to the Web-connected video cell phone. That eventually will shift fundamental viewing, access, manipulation and customization of content from inside the home to the hands of consumers anywhere in the world. As a result, cable's $60 billion upgraded fiber-optic systems could be reduced to an expensive means to an end -- a way to interface with portable devices and other digital broadband platforms in order for such cable giants as Comcast and Time Warner to compete in an interactive market that reaches far beyond their historical domain. No way, you say? Just consider that News Corp. and its majority-owned DirecTV are on the verge of announcing the formation of their own Wi-Max network to be able to independently distribute their content and services anywhere, any way, without relying on any other distributor. That has the potential of taking the wind out of the sails of rival cable, satellite, telephone and broadcast gatekeepers who until now thought they had only each other to worry about. Once again, Murdoch may trump his most formidable foes. And there is so much more to come on the content front. Clearly the penetrating and broad rapid adoption of new digital devices demands the creation of innovative content and services that go well beyond the mere cutting and pasting of existing TV and film fare for these myriad new monitors -- from personal computers and televisions to cell phones and Internet-connected game consoles. Despite last week's high-tech one-upmanship over who has the sleekest screen, fastest connections and coolest functions, the real battle is what you can get with and do with digital broadband devices and platforms. It's all about the content and its manipulation, the services and the interaction. The proliferation of devices, platforms and content heightens the need for search and other navigation tools allowing consumers to download, store, manipulate, transfer and personalize all video, data and voice. So, Google, Yahoo! and similarly inspired service facilitators will continue to make their fortunes, even if it's not quite the $600 a share Piper Jaffray analyst Safa Rashtchy has predicted for Google by year's end. But for all of the exciting opportunity inherent in this next stage of new-media growth, CES also offered glimpses of what could become serious shortcomings, even by the most seemingly indefatigable players. For instance, Google last week announced its long-anticipated stretch into television's mass market domain with its new Video Store. It enables consumers to find, buy and rent content from broadcast and cable networks, sports leagues, filmmakers and independent producers. It is a development worth noting in that it takes Google from being a broad search aggregator to being a specific industry search facilitator, in much the same way Google has emerged as an applied force in maps and locations, and more recently in advertising. It is Google's way of bringing television to its shores, rather than having to fight its way into the television world. There are endless ways in which the indispensable need for search in an interconnected digital broadband world makes Google a must-have force. But that also becomes a temptation for Google to delve too deeply in any one area of search, regardless of how lucrative it appears on the surface, and stray from its core proficiencies. Applying its search tools and software magic to everything digital is one thing. Becoming too integral a part of the industries it serves, and potentially diluting its business model, is quite another. That is the risk Google runs in its new video ventures. By the looks of things, Microsoft could likewise find its digital rights management technology and enabling software so widely distributed among hardware manufacturers (like Verizon) and content providers (like MTV and Starz!) that Bill Gates and Co. once again find themselves a cross-platform facilitator rather than a supporting pillar of the new digital age. It is much the same quandary Microsoft has struggled with in computing. The same fate potentially awaits Intel and Dell as they seek to cross the computing divide into multimedia tasking and digital device interface. While device and software manufacturers duke it out in the retail arena, content producers appear to have come to the realization that they must not rely on the easy or predictable ad nauseam recycling of their existing fare. But, as News Corp. chairman and CEO Rupert Murdoch so succinctly pointed out Monday at Citigroup's media conference in Phoenix concerning digital broadband devices and platforms: "They're useless without something to watch!" Original content made specifically for an interactive environment -- such as AOL live events and the political animation JibJab.com -- still remains all too scarce. Most big media companies don't even know where to begin. The pricing and availability of existing fare in any form will need to be worked out over time whether as stand-alone on-demand offerings, part of bundled content or as segments and slivers on cell phones and other wireless portable interactive devices. They may eventually replace what is left of TV syndication and DVD sales. Much of the appeal of recycled content may come from facilitating features such as voice, instant messaging and Fox film and television Web links attached to the product for cell phone, iPod or Internet use, something News and its Fox subsidiary are planning. Murdoch raised yet another intriguing option Monday: building a content business on the power of community by simply managing the user contributions of MySpace (which News Corp. acquired last year) and pairing it with Fox content links to rely on the organic growth of social networking. The one indisputable underlying message from CES is that changing economics are in store for every company involved in the digital broadband business, if for no other reason than the way in which interactivity alters everything about the process and price of producing and distributing content and services, and facilitating h dware and software, as well as consumer and advertiser sensibilities and expectations. At the moment, the economic reverberations are barely registering as iTunes charges consumers $1.99 per hourlong network TV download, compared with the average overall 20 cents per hour paid by cable subscribers for a variety of basic original and reconstituted content, according to Bank of America analyst Douglas Shapiro. But consider that video-on-demand alone will nearly double average video revenue per subscriber from $87 per month to $163 per month, according to Park Associates. To be sure, all of the pending chaos is going to make it difficult for many media and entertainment players to accurately forecast transitional profits, cash flow and even revenue. But it looks on the surface, and certainly according to last week's CES, that making money will not be a problem in the new digital broadband age that already dictates survival of the fittest. ------------ Our view: - The PC swallowed the TV wherever broadband hit a home and the average IQ is north of 100. Evidence: TV viewership continues to drop as even those with lower IQs become more intelligent by not watching TV. Its true that TV will kill your brain. - Content owners still can't compete with interactive content - like blogs. People want canned content less and less. How many times can you watch a re-run? - Personal content like MySpace never is dull. Nobody finds themselves boring - ever. Good move Mr. M. - Chaos is here to stay. People keep changing their tastes and experimenting online. Its exciting and the web offers unending change.

As Airlines' start to look healthier, the unions come forward

Look at these headlines: Because of this - "Airlines poised to return to profitability " We start to see these - "United Airlines Unions Object to Executives' $24 Million Stock Award Plan" "United Flight Attendants Want Bankruptcy Exit Plan Rejected" "BA Pilots May Strike Over Pension Dispute" 2006 will be yet another tough year for the airlines - but this time the impact will likely fall on passengers rather than on airline bank accounts. A strike hurts unions big time and, of course, hurts airlines too. Travelers in the US have grown used to ongoing service in the midst to the worst airline financial crisis ever. As has been seen with Northwest's mechanic strike, passengers have scant tolerance for stikers. Any more strikes will be seen in very negative light by travelers. Travelers have had to endure huge service declines and then there are those TSA-imposed security delays; air travel is no fun anymore. Travelers will, we predict, be very unsympathetic to striking airline employees. Non-airline employees have their own stresses to deal with in a world of outsourcing, layoffs and bankruptcies (real ones, not the airline version).

Another Northwest strike looms

ATW -- Northwest Airlines pilots, represented by the Air Line Pilots Association threatened a walkout if the company moves forward with proposed plans to launch a separate carrier dubbed NewCo to operate 70/100-seat RJs. The union's MEC called the initiative "absolutely unacceptable" and warned that if Northwest receives bankruptcy court approval to reject the current pilot agreement and impose terms including the establishment of NewCo, it "should expect a strike by the Northwest pilot group." --------- Northwest is desperate to get their hands on 100 seaters, their DC9s are about 30 years old and guzzle gas. Northwest must get the problem fixed and the pilots won't budge - you can guess what comes next. There is a good explanation of the background on the 100-seater market here

Connexion News

ATW -- Connexion by Boeing will add four channels of live television to its high-speed inflight Internet service beginning Jan. 23. The channels are CNBC/MSNBC, BBC World, EuroNews and EuroSportnews. Scandinavian Airlines said yesterday that beginning on Jan. 23, passengers on SAS flights between the US and Scandinavia will be able to view live programs on their laptop computers through SAS Net Access, the carrier's high-speed wireless Internet service provided by Connexion. SAS said more than 26,000 of its passengers used the system in 2005 to send and receive e-mail and access the Internet. Connexion also unveiled a new price structure from Jan. 31; 1 hr. of access will cost $9.95, 2 hr. $14.95 and 3 hr. $17.95. Unlimited 24-hr. access, including connecting flights, will cost $26.95. Connexion has made Yahoo! the exclusive search engine on its portal. --------- The most interesting information, for us, in the above story is 26,000 users. They neglect to tell you how their usage has worked during the year - was it rising each month? In fact, the SAS flight between Seattle and Copehagen (SK938) has the highest Connexion use of any flight. Microsoft is the reason - this flight being employees most popular way to Europe from Seattle. SK938 still holds the record for number of users in-flight at 50. This is the first airline to actually provide a number of users, perhaps because SAS is doing better than other Connexion-powered airlines. Indeed Connexion had hoped for a fleet of over 1,000 by now but is closer to 200. We have heard rumblings that Lufthansa, the first airline to signup, has not been too pleased with service technical hitches. The Asain carriers have been very quiet - had the service been as awesome as on SAS, you could bet that Singapore Airlines would have been touting it. As it is, China Airlines is currently the most aggressive service advertiser. The concept remains promising, but you have to wonder why is take up is so slow if the service is so compelling? If you are wondering why long haul carriers like Qantas and Air New Zealnd have not made use of this service, it is because there is no service south of the Equator. Currently its a Northern hemisphere thing.

Research Points To Pay-For-Play's Dim Future

AS APPLE AND GOOGLE STAKE their successes as Internet video-hubs on pay-to-play models, new data is emerging that suggests consumers are unwilling to pay up. A report released Tuesday by Points North Group shows that consumers prefer ad-supported content over a fee change by a greater than three to one margin. When Points North researchers asked consumers if they missed their favorite TV show and could watch it online or order it through cable or satellite, 62 percent of respondents said they would prefer getting it for free with commercials, versus 17 percent who chose paying $1.99 without commercials. Twenty-one percent were undecided. For the report, Points North surveyed 800 people by telephone in November. "I'm the last guy to advocate more advertising in the world, so it was surprising to see such strong support for advertising over fees," said Points North analyst Craig Leddy. In the coveted demographic of consumers ages 18-34, the preference for free, ad-supported content was even higher: 68 percent compared to the 26 percent who favored pay. Just 5 percent within that group said they were undecided. The report comes at a time when pay-per-view models are drawing a lot of attention online. Google founder Larry Page unveiled Google's pay-per-download video service last Friday at the Consumer Electronics Show in Las Vegas. The move places Google in direct competition with Apple's video store on iTunes, which began selling music videos, TV shows, and movies in October of last year. Speaking Tuesday at company's annual Macworld show in San Francisco, Apple CEO Steve Jobs said iTunes has sold eight million videos since October. While the announcements made headlines, some industry watchers (in addition to Points North) concurred that relatively few consumers would agree to pay for play. "All of our research shows tremendous consumer resistance to paying for video," said Jupiter Research analyst David Card. Card was particularly critical of Apple's and Google's paid video strategy. "With eight million or so downloads, I don't think Apple's video store has been successful," he said, adding: "I was very surprised by Google's decision to charge for video." But not all analysts condemned the pay-per-view. "I'd say it's very early to be making any definitive pronouncements regarding different models," said Gartner Research Director Mike McGuire. "There's a lot of experimenting going on, and there's a lot more that will need to be done in the future." Indeed, Google's new paid video service is nothing if not flexible--content owners can charge as little as five cents for their offerings or simply give it away--and even Apple is experimenting with free content on the iTunes music store. At the end of the year, Apple let NBC Universal put a free "Saturday Night Live" skit up on Apple's iTunes music store. The skit--in which "Saturday Night Live" veteran Chris Parnell and freshman Andy Samberg stomp through the streets of New York rapping about cupcakes and things--was the second free piece of content that NBC has made available on iTunes since entering into a partnership with Apple in early December to distribute a wealth of new and archived shows through iTunes for $1.99 an episode. Expanding upon that relationship, NBC announced on Tuesday that it would add bundles of "Saturday Night Live" skits to existing content for sale on iTunes. Offerings include a "Best of SNL" category with hour-long collections of sketches grouped by individual performers from Chevy Chase and Dan Aykroyd to Adam Sandler and Chris Farley. Major content publishers are also knee-deep in experimentation with broadband video. CBS Digital President Larry Kramer told OnlineMediaDaily late last year that while CBS is the only remaining major network without an iTunes distribution deal, it is considering a number of models including subscription and ad-supported models--as well as selling content piecemeal via iTunes. Some publishers, such as WashingtonPost.com, have begun uploading video through iTunes without an official partnership with Apple. In late October, Chet Rhodes, the Post's deputy multimedia editor, told OnlineMediaDaily that he aspires to a free ad-supported distribution model. Rhodes estimated that video clips would have to be downloaded at least 10,000 times before the Post's advertisers would take notice. -------------- Based on IAG's research, over half of frequent fliers surveed are willing to pay for their online access while in-flight personally. Therefore we see that travelers don't want to pay for content poured at them via the TV model - underscoring our premise that, essentially, the market has spoken regarding TV; viewership is dropping because content is awful. However, web use continues to rise and rise. Therefore Connexion and OnAir - offer your connectivity for free. Have advertisers pay for the cost - they have an audience strapped to the seat! By the way, as travelers get used to being connected in-flight, you will see useage rise big time. This in turn will help airlines to invest in the technology because IT WILL MAKE MONEY. Which is something airlines (in the US at least) have shown they don't know how to do consistently.

BMI bans Christian symbols on Saudi flights

WorldNetDaily -- A British airline banned its staff from taking Bibles and wearing crucifixes or St. Christopher medals on flights to Saudi Arabia to avoid offend the country's Muslims. British Midland International also has told female flight attendants they must walk two paces behind male colleagues and cover themselves from head to foot in a headscarf and robe known as an abaya, the Mirror newspaper of London reported. Teddy bears or other cuddly toys also are not allowed. Airline officials, who have sparked outrage, the paper says, explain the Islamic kingdom's strict laws – enforced by religious police – prohibit public practice of Christianity and figures of animals. BMI spokesman Phil Shepherd said: "In providing air services people want, demand and use, we have an obligation to respect the customs of the destination country." An airline employee who asked not to be named told the Mirror: "It's outrageous that we must respect their beliefs but they're not prepared to respect ours." The employee said his grandmother gave him a crucifix shortly before she died that he wears at all times. "It's got massive sentimental value and I don't see why I have to remove it," he said. The airline's staff handbook says: "Prior to disembarking the aircraft all female crew will be required to put on their company issued abaya. It will be issued with the headscarf which must be worn." The employees' union wants staff members to be able to opt out of the flights, but the airline says the only option is to transfer from overseas staff to domestic flights, which could mean a loss of about $30,000 a year in wages. About 40 staff members have filed complaints since the route began in September. Some of the male members who are homosexual have called in sick, because they are afraid of traveling to Saudi Arabia, where homosexual activity is punishable by flogging, jail or death. ----------- This is out to lunch. Surely this market is not worth it. Further comment will lead to us being branded, so we'll stop here.

EC strikes a blow for consumers that will boomerang

Various sources -- European Court of Justice followed last September's opinion of the advocate general and upheld the European Commission's regulation concerning common rules on compensation and assistance to passengers in the event of denied boarding, long delay or flight cancellation.The regulation came into force on Feb. 17, 2005, and provides for compensation of €250 ($302.73) for denied boarding on flights of under 1,500 km., €400 for flights of between 1,500 and 3,500 km. and €600 for flights of more than 3,500 km. Meals, hotel rooms and other compensation are required for certain delays. IATA and the European Low Fares Airline Assn. (ELFAA) challenged the regulations. That court concluded they "are compatible with the Montreal Convention 1 and do not infringe the principle of proportionality." ELFAA, which includes easyJet, Ryanair, Wizzair and Hapag-Lloyd Express, argued the rules were unfair to budget carriers because compensation levels often are much higher than fares. But the ECJ was unmoved, ruling the "damage suffered" by customers subject to cancellation or delay "is similar whatever the airline with which they have a contract and is unrelated to the pricing policies operated by the airline." The Court insisted that the amount of compensation "does not appear excessive" and dismissed the claim of discrimination between air transport and other transport sectors, citing inconvenient airport locations and the hassle of checking baggage, among other factors. No appeal is possible, but ELFAA said challenges in national courts are likely. The regulations will be reviewed next year, at which time the organization said it will push for legislation absolving airlines for events over which they have no control and placing some of the compensation burden on ATC providers. The rules initially were intended to dissuade carriers from intentionally overbooking flights. ----------- While the concept is good, its execution likely creates other problems. We forsee lawsuits against every organization in the air travel funnel - from EuroControl to airports. As much as we like to skewer airlines, often external events mess up their schedules. Passengers understand this, but it only takes one to start a lawsuit. Watch airlines like Ryanair start charging for a seat if you don't turn up for your flight. The term "No appeal is possible" will become a new mantra.

Mineta puts foot in mouth

Reuters -- U.S. Transportation Secretary Norman Mineta suggested on Tuesday that a merger between U.S. airlines Northwest Airlines and Delta Air Lines could result from the latest round of industry restructuring. "I sometimes wonder whether or not ... Delta and Northwest will come out as a merged carrier," Mineta told an audience of business executives in Shanghai, adding he was "just thinking out loud." "Until the remaining legacy carriers do something about extracting themselves from a hub-and-spoke operation, I'm not sure they are going to be very successful." ------- Amazing words....and not to be ignored. One has to wonder how he could make these statements - is he guiding the market? Hub-and-Spoke airlines are not going to change their models because Mr. Mineta thinks its a good idea. It is actually rather disturbing to read these "thoughts". No doubt Wall Street is sitting up as they read his words. Wonder where this will lead?

Airbus now favors composites

Airbus chief executive Noel Forgeard AFP -- European aircraft maker Airbus plans to launch a new generation of planes built with light, composite materials to help increase fuel efficiency, a senior company executive said. Airbus has begun investigating the use of composite materials, which offer weight-saving advantages. The company is working on a new range of planes to replace the A320 family, a collection of small, medium-range aircraft with a single aisle. He also said that the company would review its A340 family of planes, which trailed Boeing's 777 model in 2005. --------- Couple of credibility problems - first, Airbus last week caused a fracas when they suggested Boeing's composite 787 (fantastic plastic) might not be safe because of its composite structure. Now Airbus likes the composite idea a week later? Second, Airbus will "review" its 340 family? What exactly does that mean? They are not selling very well - the 777 thrashed it last year. Could this mean the 340 line as we know it is coming to an end?

Mile High Club

A recent poll shows that a surprising nine percent of 600 respondents claim to be members of the so called Mile High Club. The poll by Airlines.Ws(http://airlines.ws) asked it's visitors whether they had ever had sex with a partner while flying as passenger. The Mile High Club refers to people who have had sex while flying at over 5,200 ft - 1 mile up. The Poll results have an error rate of +/- two percent. Polling results showed little difference in response from men and women. Both sexes responded at around the 9 percent mark. It is remarkable that women claim to have had as many sexual encounters while flying as men. The results are not clear as to whether women have become as open and suggestive of their own sexual activity as men claim; or if the results are tearing away at old biases that suggest men tend to brag more about their sexual activities. Psychologist say it isn't difficult to understand why flying is such an aphrodisiac for both sexes. Everything from the physical vibration of the airplane to the raising of adrenaline from the sheer excitement of flying and the dangers involved. The first published accounts of Mile High Club activity was in 1916. Lawrence Sperry, daredevil pilot and inventor of the automatic pilot and a New York Socialite, Mrs. Waldo Polk who Mr Speery was giving flying lessons crashed in the South Bay. The pair were found naked by 2 duck hunters. Upon being rescued Speery claimed the crash "divested" them of their clothing. ---------- Amusing and quite amazing. How come we never seem to be on these flights?

TiVo desktop

Think of how this will change the way you use your laptop.... think what it means to airline stuck with lousy IFE. Technology is a wonderful thing.

Boston Airport WiFi Fiasco

eweek.com -- In their efforts to ban airlines from offering free Wi-Fi services in their lounges, officials representing Boston's Logan Airport continue to insist that it's not about money, but rather about public safety and management. The Massachusetts Port Authority, which charges a minimum of $7.95 per day for public Wi-Fi access throughout Logan Airport, sent a letter to tenant Continental Airlines Inc. last summer, demanding that the airline turn off the antenna that provided free Wi-Fi access to its President Club lounge in Logan's Terminal C. Continental Airlines offers complimentary Wi-Fi to its frequent flyers in more than 20 airport lounges throughout the country. In response, Continental filed a complaint with the Federal Communications Commission last July, asking the FCC to overturn the order. The FCC has yet to issue a ruling, but wireless and airline industry organizations have taken sides. The ATA (Air Transport Association) and CTIA (the Cellular Telecommunications and Internet Association) side with Continental. Local safety organizations and Airports Council International side with the Massachusetts Port Authority. Officials representing Logan say that too many Wi-Fi antennas in an airport could be a safety concern, even though they acknowledge that dedicated public safety networks and WLANs (wireless LANs) generally don't share the same frequency. "Normally public safety entities run their networks on licensed frequencies," said Christine Gill, a partner with McDermott Will and Emery LLP, the Washington law firm representing the Massachusetts Port Authority in its case against Continental. "We have tried to make it clear in the filings that this is not the backbone for the public safety network in the airport. They have their own proprietary networks that would not be subject to interference, but they want to make use of the Wi-Fi network, too." Logan Airport argues that there should be only a single, centrally managed network for the public. "They actively manage the Wi-Fi network, they encrypt it, they offer control over it, and they can shut down the network in an emergency if they need to," Gill said. "It's a management function more than anything else." Officials at Continental, which is headquartered in Houston, argue that it took Logan a full year to bring up any public safety concerns: Continental installed the wireless access point in its Logan lounge in the summer of 2004. ---------- What a mess - the airport looks really, really stupid. Continental looks like a star. The whole world is going WiFi and Massport will probably try to ban every WiFi signal near the irport. Since the airport is close to lots of WiFi-friendly places like hotels and the harbor, you can imagine the reaction from off-airport WiFi sources. As the technology changes and we move to wider band WiFi, Massport will be playing catch-up. They will be paying lawyers for years. Note ACI is backing Massport (no surprise). Airports lost a lot of revenue when travelers stopped using public phones, using their cell phones instead. Imagine airports trying to block access to those signals? As you are aware, people and organizations that get in the way of technological advancement tend to get run over and left behind. If you think passengers should get their WiFi from any source - including the signals sold by airports - add your comments below. Feedback is a good thing and costs nothing.

Avian Flu in Turkey

BBC -- Five new human cases of bird flu have been confirmed in several Turkish provinces, pushing the number of people infected up to 14, officials say. The cases, identified as being of the deadly H5N1 strain, mean the virus is now present in the east, north and centre of the country. At least two Turkish children have died, and correspondents say fear is spreading rapidly across the country. Health experts say there is no sign the virus is passing from human to human. The World Health Organization (WHO) has confirmed only two cases of H5N1 through its own laboratory tests in the UK, but says it considers the Turkish results reliable. "We're certainly considering these 14 as cases and are treating them as such," the WHO's Christine McNab told the BBC News website. Forty-eight cases are said to be under investigation in Turkey. The fact that the virus is now present along the Black Sea coast and central Turkey, as well as in the east, is seen as worrying. -------- People are still in denial about this. This is more serious than last year's tsunami, except we can see this coming and governments are simply not doing enough. Suffice to say, we advise against traveling to Turkey.

United Airlines defers Airbus order

Bloomberg is reporting that UAL has deferred an order from 1998 for 320s. The order has been deferred to 2011. Of course by then replacements for both the 320 and 737 will be firmed, so you might assume (we do) that UAL will never take delivery of these 320s. Now if Mr Leahy's crew are clever (and they are VERY clever), you might see this order switched to 350s for delivery around the same period - just when UAL will need to replace many of its 767s and, most importantly, might be in a position to afford this. The 320 replacement will probably not be ready in 2011. Imagine the PR coup if Airbus could announce United as a 350 customer? Think about it; Airbus has not got one tier 1 airline for the 350 and they have UAL over a barrel. Its speculation on our part, so let’s see how this plays out. UAL cannot afford to cancel the order, so money will go to Toulouse no matter what. The issue is what will come back from Toulouse to Chicago. We think 350s, not 32X.

Moroccan airline plans major African expansion

Middle East online -- Royal Air Maroc (RAM), encouraged by its majority shareholdings in the national airlines of Senegal and Gabon, is planning a major expansion of routes in Africa, a senior official said. "The central thrust of RAM's development is the African gap in the market and the Casablanca hub is the key element in the company's strategy," Transport Minister Karim Ghalab said. RAM has held a 51 percent share in Air Senegal since 2000 and on December 29 it said it had been chosen by the government of Gabon to take a 51 percent stake in Air Gabon international. Additionally "talks are at present under way" for RAM, said by its management to be north Africa's leading airline, to take a stake in the national carrier of the west African state of Mauritania. RAM says its strategy is to consolidate the Casablanca hub as an international platform for North African traffic to Europe, the Middle East and North America. It turned over 1.2 billion dollars in 2005, up 15 percent on 2004. Between now and 2012 it plans to spend 220 million dollars (180 million euros) a year on modernising its fleet compared with 156 million dollars a year in the period 2001-2005. ----------- So RAM sees what we stated in the previous story. There is gold in them thar hills. Casablanca is as suitable an African gateway to the USA as Senegal. Behind Casablanca you have essentially the whole African continent. Interestingly RAM is connecting South Africa yet and this is where the most traffic will come from.

USA-Africa; the ignored market?

In may 2005, the African Union Air Transport Group(the African nation's club) had an interesting meeting. Notes from the meeting are at this site (http://www.africa-union.org/infrastructure/air%20transport%20sun%20city/en/AT2-%20Brief%20Rpt%20on%20the%20Status%20of%20Air%20Transport.doc) Some stats that should make the folks at the US majors pay attention: - Today, nearly 75% of international African air traffic is ensured by major Western airlines - Traffic towards the United States of America is carried out essentially via Europe. It should represent approximately 25% of this traffic, that is, 1 million passengers per year. - International traffic in South Africa is in full expansion. It often serves as a “crossroads”. - Principal Airlines: TAAG, South African Airways, Ethiopian Airlines, Kenyan Airways. (IAG note - this is for ALL of Africa) There are many useful numbers in the report. However, our reading suggests that a US carrier could do very well in the market using either Atlanta, NY or Dulles as gateways. Service to a West African city like Dakar with continuing service to Johannesburg, South Africa should generate a lot of traffic. The traffic is growing (bi-directionally) and the revenue/mile beats many markets. SAA, the principal carrier in the US-Africa market appears out of its depth. Its traffic data has not been reported for a while - anecdotal reports from South Africa speak of chaos, delays and poor management issues. SAA has grown very quickly and cannot sustain its market share - it needs Star Alliance membership more than Star needs it. The South African market is the kind of market that would cheer a new entrant. It would seem that Delta has refocused on new international markets and its recent un-hooking with SAA should give it the inside view on the market's potential. United won't compete with an Alliance member. American used to be in cahoots with SAA many years ago (before Delta) and Johannesburg was, at the time, American's largest offline market. Time for Delta or American to revisit this market?

JAL warned over another mishap

Japan Times -- A Japan Airlines passenger plane flew from Osaka to Kagoshima on Saturday with its engine thrust reverser locked, the company said Sunday. The thrust reverser helps a plane to slow down after landing. The Land, Infrastructure and Transport Ministry gave JAL a verbal warning for improper maintenance, because a mechanic forgot to remove the safety pin locking the engine thrust reverser during maintenance operations on Friday evening. The plane was carrying 181 passengers and crew members. JAL had a similar maintenance problem in July, forcing a passenger plane to land with its engine thrust reverser nonfunctional. --------- This is amazing! Another safety mishap. Is this airline going to the dogs? Can't be, there must be something seriously wrong in their management.

You gotta LUV Southwest

USAToday -- Southwest has become the first big airline to offer free travel to customers ticketed on now-defunct Independence Air. Federal laws passed after 9/11 already require surviving carriers to transport customers of a collapsed airline for a fee of no more than $50 each way, but Southwest is the first to say it would accommodate Independence Air customers for no charge. That move comes as Southwest’s traditional rivals are charging customers holding Independence Air tickets $50 per flight to fly standby -- and some are charging $100 each way for customers wanting a confirmed seat. That could backfire on the traditional airlines, some industry observers say -- with some adding that the tactic is yet another shrewd public-relations move by Southwest. “Southwest will win customers for life with their strategy,” says industry analyst Henry Harteveldt of Forrester Research. He tells me that the additional costs Southwest will incur by doing this are relatively minor. "But the PR Southwest will get, as well as new customer loyalty, will more than pay for this," he says. Alan Bender, Professor of Aeronautics at Embry-Riddle Aeronautical University, agrees. “They gain incalculable goodwill” with the move, he says. As a result, Bender tells me he thinks “Southwest makes the legacy carriers look like Scrooges.” Travel columnist Joe Brancatelli put it like this: "The Big Six (airlines) are actually trying to sell people seats. ... On the other hand, Southwest, which probably has the most available seats, is saying, 'Hey, come on over and we won't charge you.' Who do you think the customer is going to remember bailed them out? They are going to remember Southwest." --------- Another reason to admire America's best run airline - for decades. Also a shot across the bow (radome?) of the managers at Virgin America. Smart, smart, smart.

More on India's aviation infrastructure

IndiaExpress.com -- On the face of it, all is well with the newly installed ILS CAT IIIB system at Delhi airport. Pilots are using it and the Airports Authority of India has proof that users are satisfied. But the fact is that the surface movement radar is still faulty and AAI had to officially shut it twice for checks. Notices were posted in less than a fortnight of its installation on December 28 and January 3 saying that the radar was ‘‘not available’’ for over three hours. While the weather was clear during the time, the frequency of checks has created further doubts. As The Indian Express had reported first, there are no controllers trained on the system and it is only later this month that a team will leave for training in US. For the week starting December 24, the day the ILS CAT IIIB was operationalised, there have been 13 adverse observations by air traffic controllers. So much so that AAI uses ‘‘follow me’’ jeeps to guide the craft from the runway, a clear indication that the surface movement radar cannot be relied upon. -------- Here is a market that should be buying everything the commercial aviation industry has to sell. From training schools to technology.

jetBlue moves to fill Flyi gap

Boston.com -- JetBlue Airways Corp. said it is bringing back the $25 one-way fares between Logan International Airport and Dulles International Airport in northern Virginia that were briefly offered in November. JetBlue will begin offering six daily Boston-Dulles round trips Jan. 17. The $25 fares are expected to go on sale early today and will be available through Tuesday; $40 one-way tickets will remain available through April 4, JetBlue spokeswoman Jenny Dervin said. Normal fares range from $55 to $140 one-way. Prices do not include taxes and fees, and JetBlue is not disclosing how many flights are available at those prices. Dervin said JetBlue resumed offering the cheapest fares in part to serve people holding tickets on Independence Air, the bankrupt low-fare carrier that shut down operations last night ---------- Nice move - and they can do this because of the E190s. No wonder Northwest wants to get these planes.

Boeing talks 787-10 up

FI -- Boeing has finally acknowledged increased interest in the proposed stretched 787-10 and says it will “probably happen”. The double-stretch of the baseline 787-8, first revealed by Flight International (20-26 September, 2005), is provisionally expected to seat up to 300 passengers in a tri-class layout, “plus or minus 10 or so”, says 787 vice-president and general manager Mike Bair, who describes the development as a “relatively modest investment”. Up until now this has made Boeing reluctant to seriously consider the -10, but the company now appears to be changing its mind given Emirates’ insistence, growing interest from other carriers such as Qantas, and the imminent danger of the A350-900. Although Bair says it “could not really happen with an entry into service before 2012, but some time after that”, the overall message is the -10 is now an accepted derivative option. As for cannibalising the 777 market, Bair says: “It is better for us to step on [the 777] than someone else. If you can do a product that the market is clamouring for you’d be silly to ignore it.” --------- Not only Emirates, but also Qantas wants this plane. That means others are bound to follow, particularly 777-200 operators. Large operators include British Airways and the US majors. Boeing will not leave these customers to Airbus without a fight, so the fight has begun.

Alaska Airlines' Web site soars

Seattle PI -- When Alaska became one of the first airlines to sell tickets online in late December 1995, there was no reason to think that a decade later it would have 100 servers on two coasts selling 10,000 tickets a day through AlaskaAir.com. Last year, AlaskaAir.com pushed past traditional travel agents to become the airline's largest sales channel. The Web site sold about $900 million in tickets and travel packages, roughly 37 percent of the airline's sales, compared with 32 percent for brick-and-mortar travel agents. Traditional U.S. carriers such as American, United and Delta sold fewer than 15 percent of their tickets through their Web sites in 2004, and online travel agents accounted for a similar percentage of sales. Alaska, by contrast, sold 28 percent of its tickets through AlaskaAir.com in 2004 and 10 percent through online travel agents. And the disparity increased last year, with 37 percent sold through AlaskaAir.com and 14 percent through online travel agents. ------- Each ticket sold electronically through the web site costs about $1.50 to distribute - and will come down more with e-tickets. Travel agent sales cost over $10 to distribute. By becoming more web centric, the airline is saving itself buckets of money. The Internet remains an awesome technology tsunami, possibly the most important advance in our lifetimes.

Long-Range Jets Threaten Singapore Airport's Hub Status

Dow Jones - Even as Singapore Airlines Ltd. (S55.SG) bypasses Tokyo and Taipei by using long-range planes to fly direct to the U.S., the prospect of other airlines doing the same to Singapore's Changi airport has the city-state worried. Airlines such as Australia's Qantas Airways (QAN.AU) and British Airways PLC (BAB) could bypass Singapore to launch direct flights between Europe and Australia, although there are no such plans yet, Standard and Poor's aviation analyst Shukor Yusof says. "Airlines with the B777-200LR can fly nonstop London to Sydney in 18 hours and there's very little any airport, be it Changi or Bangkok, can do if an airline decides to bypass," Shukor said. Any drop in traffic at Changi would immediately hit a number of companies, including ground handling services like Singapore Airport Terminal Services (S58.SG), unlisted Changi International Airport Services and Swissport. In addition, aircraft maintenance companies like SIA Engineering (S59.SG) and Singapore Technologies Engineering (S63.SG) would feel the pinch. The effect would also trickle down to tourism-related businesses such as hotels, shopping centers and travel agents. Tourism accounts for 5%-7% of Singapore's US$111 billion economy, and most inbound tourist arrivals are by air, according to the city-state's government. Singapore considers the threat posed by the potential bypassing of Changi as serious enough for influential ex-prime minister Lee Kuan Yew to bring it up at a recent dialogue with SIA's management and unions. A small nation of four million with no natural resources, Singapore has banked on its excellent infrastructure and air and sea connectivity to attract investment and to develop as a financial center. For airlines, this segment - direct long-range flights - is becoming increasingly important. "This segment, which is focused on the business class and people who don't want to stop three or four times during a flight, promises high margins and is an area airlines want to appeal to," says Ian Thomas, senior consultant with Sydney-based Centre for Asia-Pacific Aviation. He estimates that the long-range customer segment accounts for about 30% of overall air travelers, but generates about 60%-70% of airlines' profit. ----------- Remember what the 707 did to Tahiti? What the 747-400 did to Hawaii? Airlines the world over are moving towards Boeing's vision of non stop flights. This is not a new thing, it has been happening for years. In typical Singapore fashion, they talk about issues and start preparing. Smart people. Watch them order 777LRs this year so they can leapfrog every other hub and keep Changi in the center of everything. Chicago-Singapore will be useful. Obviously LA, San Francisco and NY as well. Fortunately this airline still has cachet. People like flying them because of its superior service.

Impressed by growth in India's aviation sector?

India Gazette -- About 160 passengers on an Air Sahara flight from Mumbai to Delhi had to spend an entire night inside the aircraft, parked on a taxibay at Lucknow airport on Tuesday night. The flight was diverted to Lucknow due to fog in Delhi. By Wednesday morning, two children had to be hospitalised after bouts of vomiting. Weather warnings for low visibility due to fog was sent out to all airlines on Wednesday morning. For Sahara passengers, the ordeal began around midnight, when flight S2 104, that left Mumbai airport at 8.30 pm, turned back from the Capital and landed in Lucknow. According to sources, the Lucknow airport lounge was packed by then with over 300 stranded passengers, brought in by a couple of other diverted flights. "We were made to sit for two hours inside the aircraft, without any information on the happenings," said Swati Soni, a passenger -------- Makes you wonder what it might be like to sit on an Airbus 380 all night doesn't it? India's infrastructure is woefully unready for the fleet growth its airlines have embarked on. Its railways are death traps so flying is the better option. You would think. Recall earlier this week German passengers on a Britsh Airways flight called the police from the plane as they felt they were being held against their will during a delay. --------- Hindustan Times -- In an era of air fare war, Railways does not see any threat from domestic airlines but would not like to be complacent, charting out a slew of measures to improve passenger services and rail safety. "I don't see a very serious threat in the immediate future," Railway Board Chairman JP Batra said on Wednesday contending that all the airlines put together don't carry the number of passengers in a year that the Railways ferry in a single day. ------------ Deepikaglobal.com -- The government may agree to re-evaluation or rectification in six technical bids for modernisation and privatisation of Delhi and Mumbai airports, official sources said today. But it is unlikely that the entire process will be scrapped and new bids will be called following criticism from various corners, including from two senior officials of Airports Authority of India (AAI) who have asked for fresh technical and financial bids. Sources said derailing the process at this stage will hurt the growth of the country's aviation sector. ----------- For those of you that don't want cell phones on board, read the top story again and imagine you were on that flight. To get an airline to react fast under these circumstances, call the local media from your flight and describe what you're seeing. As the media scramble to put the story out (nothing sells like a potential passenger revolt on board), the airline will suddenly find resources to get the passengers taken care of. While you're at it, use the cell phone to take pictures of the bedlam on board. These will sell well.

Another Northwest union to strike?

AP -- Northwest Airlines' flight attendants union say in a bankruptcy filing that it may strike if a bankruptcy judge allows the carrier to reject its contract. Northwest is negotiating with pilots, flight attendants and ground workers ahead of a Jan. 17 hearing in which the nation's fourth-largest airline will ask to reject their contracts. Northwest has said it wants to use more foreign-based flight attendants on international flights and use flight attendants at a new subsidiary on smaller domestic flights. The Professional Flight Attendants Association, which has 9,600 members at Eagan-based Northwest, said such a move could reduce their number by half. "Northwest Flight Attendants understand that the carrier's proposals will destroy their profession and PFAA believes that, in response, the membership will authorize a strike to shut down Northwest's operations," union President Guy Meek said in the filing late Wednesday. "Indeed, there is little economic down-side for the flight attendant group with respect to initiating a strike: the drastic pay cuts proposed by Northwest, combined with the elimination of premium international flying, will make it relatively easy for flight attendants to find immediate employment at comparable compensation levels." Unions that represent ground workers and pilots have also said they could strike if Northwest gets its way, but Wednesday's statement was the strongest yet from flight attendants. Northwest Airlines Corp. filed for Chapter 11 bankruptcy protection Sept. 14. The Eagan, Minn.-based airline is Michigan's leading passenger air carrier with a hub at Detroit Metropolitan Airport. Bankruptcy law allows it to seek to overturn union contracts as part of its reorganization. Northwest has said such a strike would be illegal, but the unions have said the issue of whether they can strike during bankruptcy has not been tested in the courts. ------- Here we go again. Just avoid flying this airline. Seems everyone wearing a uniform at Northwest wants to fight. As a customer you don't want to be in the middle of this. You have options, fly somebody else. For an excellent analysis on Northwest see this link: http://enplaned.blogspot.com

UK Tourism deficit

ehotelier.com -- VisitBritain, the national tourism agency, has today published a 25 year review of inbound tourism, which for the first time reveals the trends that have seen the sector moving from a surplus to a £17 billion deficit even though visitor numbers have more than doubled over the period. The Foresight Review shows that while the numbers of inbound tourists has grown by 122% to more than 27 million between 1979 and 2004, spending has only risen by 40% in real terms, as visitors to the country spend significantly less time here and are increasingly likely to be visiting friends or relatives than coming on holiday. In 1979, the average visitor to Britain came for 12.5 nights. By 2004 this had shrunk to just over eight nights. At the same time the ‘spend per head’ in real terms for each stay had fallen from more than £740 to £470 (2004 prices). At the same time the reasons for people visiting Britain have changed dramatically since 1979. Then almost 45% were coming for a holiday. Today that proportion has shrunk to 34%. The fastest growth in visitor numbers has been in people coming to visit friends and relatives, which has risen by 249% to almost 8 million. Business traveller numbers have also risen far more quickly than tourist, up 212% compared with 68%. As a result the total amount spent by visitors coming on holiday has scarcely risen in real terms since 1979. The actual sum in real terms spent on holidays by inbound visitors is up just 3% to £4.2 billion. --------- There are other European (dare we say "Old Europe"?) countries that probably will have similar trends. France no doubt has also had a year impacted by riots. For us the telling stat is the change in the numbers of visitors now seeing friends and relatives. Besides the fact that these people are under-reported, their economic impact is stunted because they don't need to buy as much. No hotel rooms and hotel meals. It has always been tough to measure the visitor not staying in paid lodging as there is no real way to track them. Consequently we know their economic impact is lower but actually their impact is further understated since its just about impossible to track. A stat not mentioned here is the number of British leaving the country on holiday. 4.3m British visitors came to the US in 2004 and 3.8m Americans visited the UK (source: OTTI). As you see, on a pure count basis, the US has a surplus with the UK. Travel stats are a complex business because measuring travel is subject to many challenges. Measuring travel is like aiming at a moving target that won't sit still and therefore is subject to estimates and nuances.

Dulles price jumps expected

There are many opinions on the demise of Flyi. The one people need to think about most is the pricing impact this is going to have. Based on data we have been able to gather, Flyi in November 2004 (the last traffic data reported by Flyi) accounted for ~22% of passengers at Dulles. That is a lot. It is reasonable to assume that Flyi accounted for more than 10% of capacity in 2005. This is big enough to impact pricing. Take out that capacity at Dulles and even jetBlue can/will drive up its fares. United will do the same - and more. Unfortunately no other LCC looks close to stepping in. So fares will jump, even Southwest's impact at BWI is limited.

US Visa rules impact traffic

Skyliner -- Seven Central American countries that participated in an recent European conference on tourism and development, announced their interest to use the Canary islands as an alternative to Miami. This solves the near constant delays in Miami caused by the United States' strict visa policy and security. The geographic location of the Canary Islands are highly valued as a bridge between Latin America and Europe. Varig has decided that operations to Japan via the US are unsustainable because of the new US Transit Visa rules. The majority of passengers now fly to Japan via Europe. Varig announced it is dropping Tokyo from its network by mid January. Varig will offer passengers connections to Japan via Star Alliance Hubs at Frankfurt and Munich and via Los Angeles with Star Alliance partners United and All Nippon. On January 15th, Varig will start thrice weekly flights from Sao Paulo to Munich offering immediate connections with to Asia.

Online travel sales keep growing

CS Monitor -- So are the nation's 100,000 or so travel agents headed for the same fate as blacksmiths and buggy-whip makers - near extinction? The US Bureau of Labor Statistics expects positions as travel agents to decline through 2012 and warns those considering the profession to expect "keen competition for jobs." Meanwhile, the American Society of Travel Agents (ASTA) is working hard to get out a strong "we're not dead yet" message. It's motto "Without a Travel Agent, You're On Your Own," appeals to travelers who want to know that someone will act as their advocate if something goes wrong. Those who use agents aren't all computer-phobic senior citizens, either. ASTA points to statistics that show that 43 percent of its customers are between the ages of 35 and 54, and 33 percent are younger travelers, ages 18-to-34. Travel agents are still big players in the market. According to a 2004 survey, they sell nearly 9 out of every 10 cruise packages, 8 out of 10 tours and tour packages, and about half of all airline tickets, hotel rooms, and car rentals. But those percentages are likely to shrink in years to come, according to a November report from PhoCusWright, a research firm that tracks the travel market. This year, online bookings will represent nearly 30 percent of the US travel market, PhoCusWright says. And it projects that within two years they will rise to well over half of all bookings. Meanwhile, travel has become a mainstay of Internet commerce. Airlines and hotel-chain websites are evolving into low-cost, full-service, vacation-planning sites. Online travel agencies such as Orbitz.com, Expedia.com, Travelocity.com, and Priceline.com gather airline tickets, hotel rooms, car rentals, and cruises into one-stop shopping sites. Expedia, for example, touts the fact that customers save an average of $189 by booking their flight and hotel as a package. But they also continue to expand their offerings. Expedia bills itself as a full-service travel agency offering cruises, adventure travel (including special trips to historic World Heritage sites around the world), travel tips, even destination activities. Expedia, for example, charges $5 to book an airline flight. The average ASTA member charges $27. --------- TYhe last line is the most important. The market will not sustain the $27 charge. It is inefficient. Technology will close this gap. There is room for a human input though. No computer can assemble the disparate data points as well as human. So the value-add an agent needs to market is not transaction based. Rather the agent is able to gather all the disparate data to ensure the customer got the best deal and charges were appropriate. typically these services are worth the price on complex travel and overseas travel. The agent won't disappear, but rather morph into the specialist they should be.

Have Vongo, will travel

You know how we have raved about the pathetic IFE choices in the US? Lousy movies, on out of focus screens with color mixes all messed up? Well there is something really cool you want to know about right now. Go to Vongo (www.vongo.com) - they allow you to browse 1,000 (yes a thousand) movies and download movies to your laptop. There is a membership. But now you are watching what you want, when you want. You are not an airline's prisoner anymore. You don't have to be brain-numbed by CNN Airport channel. You can do your thing. This is very, very cool. You see before you the beginning of the end of IFE as you know it. All you'll need is high speed access and you bring your own content. (Hey Connexion are you reading this? We don't need your new movie channels) No more intellectual hostage crap while in-flight. No more recycled drivel delivered on awful screens. We've been waiting for this - its a wonderful world.

Pilots get big raises

FI -- Air India’s international low-cost subsidiary Air India Express is to give its pilots sizeable pay rises in a bid to keep them from resigning to join other airlines. Media reports from India say the Air India board met on 28 December and voted in favour of giving pilots at its subsidiary pay rises. Some reports say the pay increase amounts to around 20% in terms of basic salary, while benefits will also increase. Air India executives were not immediately available for comment. Air India Express launched services in April using leased Boeing 737-800s and currently has three of the type. Four more are to be added between February and April and the carrier is currently seeking to lease three more. Air India is also close to securing final Government approval to purchase 18 737-800s for Air India Express for delivery from the second half of 2006. All Indian carriers have been suffering from a shortage of pilots over the past year as new airlines have launched and existing airlines have expanded services on the back of domestic traffic growth of more than 20%. Air India Express has suffered particularly badly from a pilot shortage as its pay rates are reportedly below those of rival carriers, forcing it to delay the introduction of new services. The Indian Government has over the past year implemented new rules to try to prevent pilots from quitting to join other airlines, such as requiring them to give six months’ notice before leaving. It has also increased the retirement age of commercial aircrew to 65. -------- We have said this before - if you are a pilot looking for a new gig - try China and India.

Oasis starts up longhauls

Oasis Hong Kong Airlines shareholders Mrs Priscilla Lee and Raymond Lee (centre) and chief executive, Stephen Miller. Reuters -- A Hong Kong startup airline aims to depart from the standard budget carrier model by operating exclusively on long-haul routes. Oasis Hong Kong Airlines, launched by a husband-and-wife team of property investors, plans to make its maiden flight from Hong Kong to London's Gatwick Airport in June as Hong Kong's first low-fare carrier. "The low-cost long-haul model has numerous advantages," said part-time pastor Raymond Lee, who founded Oasis with his wife Priscilla. Oasis recently won approval from the city's Air Transport Licensing Authority to operate scheduled flights to London, Milan, Cologne, Berlin, Oakland and Chicago. The carrier hopes to win an air operator's certificate (AOC) from the Civil Aviation Department in the next few months. It expects to raise about HKD$10 billion (USD$1.29 billion) in an initial public offering in mid-2007 to fund expansion, Lee said. The airline plans initially to lease five Boeing 747-400 jets and has a five year plan to expand its fleet to 25 aircraft, serving between 12 and 15 destinations. It will take on other planned startups as well as established players such as Hong Kong's largest airline, Cathay Pacific Airways. On its London route, Oasis will compete with Cathay, British Airways and Virgin Atlantic, all of which will offer more frequent flights than Oasis. Lee said full-service carriers have bloated cost structures, while his expenses can be kept low by flying long distances and maximizing flying hours of big aircraft with low per-passenger costs. "We'll keep a very lean and mean organization, and we'll outsource everything we can," Lee said. Oasis plans to broaden its potential revenue stream by carrying freight, which is not a priority for short-haul low-cost airlines such as Ryanair and easyJet. Oasis will not be alone. Qantas' Jetstar arm and Viva Macau, controlled by businessman Raymond Ho, the younger brother of Macau's Chief Executive Edmund Ho, also hope to launch low-cost long-haul flights. The Lees, who own 60 percent of Oasis, and others, are investing HKD$800 million (USD$102.56 million) in the airline. Allan Wong, chief executive of Hong Kong consumer electronics maker Vtech Holdings holds a 15 percent stake. Oasis aims to price round-trip tickets starting as low as HKD$1,000 (USD$128), although customers looking for such a bargain would have to book months in advance, said Oasis Chief Executive Stephan Miller, a founder and former chief executive of the city's second largest airline, Dragonair. Oasis expects its fares to average 40 to 50 percent below those of full service counterparts. It aims to attract a new market of passengers flying long-haul for the first time. "Fares starting from HKD$1,000 will be highly stimulative," said Lee, who also plans to offer budget business class service. A recent survey by brokerage CLSA found many potential passengers would upgrade to a lower-frills business class seat at the right price. "Based on our survey there is a niche for Oasis. Whether this niche is big enough for both Cathay and Oasis, only time will tell," CLSA analyst Kevin O'Connor wrote. Existing carriers are expected to fight back. "The incumbent airlines undoubtedly will lower many of their fares to the same level Oasis does, and the customers will most likely make the rational choice to fly with the known commodities, with their established safety histories and frequent flier programs," said Richard Pinkham, a Singapore-based consultant with the Centre for Asia Pacific Aviation. He also noted a global shortage of pilots, meaning Oasis could face high salaries, missing out on a source of cost savings historically enjoyed by budget airlines. It also faces the same high jet fuel prices and costly Hong Kong airport fees as its rivals, he said.

El Al gets competition - at last

Business Week -- El Al may not seem like much of a Goliath as international airlines go. But the now privately owned Israeli carrier is increasingly being portrayed on its home turf as a giant that doesn't want to face local competition. The Israeli government is due to decide soon whether to designate a second Israeli scheduled carrier on the lucrative New York route. El Al's new owners are making every effort to fend off the challenge from Israir, a low-cost startup modeled after airlines like JetBlue Airways. After operating weekly charter flights between New York and Tel Aviv, Israir is requesting government permission to launch daily scheduled service to New York. If the government agrees, El Al for the first time would encounter competition from another Israeli carrier on the Tel Aviv-New York route. Industry insiders think the government is leaning toward Isair. That has El Al crying foul. The carrier is locked in battle with the Tourism Ministry, which is pushing for further liberalization of the market, in order to lower airfares and bring in a million more tourists in 2006. A government decision is expected in the next few weeks. As if the threat from Isair weren't enough, El Al is looking over its shoulder at the U.S. and Europe. Continental Airlines is currently El Al's sole competitor in the Israel-to-U.S. market, but that's about to change. Delta Air Lines is planning to resume flights to Tel Aviv in March, after a five-year hiatus. Also, European carriers like Air France, Lufthansa, and British Airways are increasing service to Israel and using bigger planes. El Al's success of late may be another factor working against its attempt to keep Isair out of its market. Israel enjoyed a 30% increase in tourism this year. At the same time, El Al has benefited from a record number of Israelis traveling abroad, thanks to booming GDP growth of 5%. Add it all up, and the airline's load factor rose to 81% in 2005, among the highest in the industry. EL AL is buying new planes as well. Last month, it paid $230 million for two Boeing (BA ) 777s, and it has reportedly taken options for 11 787s. In the first quarter of 2006, El Al will institute a cell-phone service to inform passengers, while still in the air, if their suitcases failed to make the flight and when they'll be delivered. El Al is also planning to install state-of-the-art, personalized digital entertainment and Internet service on board. ---------- The Israeli public deserves the competition. El Al fosters a love-hate relationship with anyone that has flown it. Infuriating staff, whom only ex-Soviet apparatchicks could appreciate, make any flight exhausting before you even board. We are convinced that all the people who emigrated from the Soviet Union to Israel got jobs at Israeli banks, Ben Gurion Airport or El Al. Nowhere else in the world could competition do better. Its too bad Emirates won't fly to Israel. Isn't it a scream that El Al will send you a text message to your seat to advise you that your bags did not make the flight? What, dear reader, does that tell you? Why, they should also send you a message if your bags made the flight since this seems to be another one of their service pranks. Hiding every inefficiency, and flat out incompetence under the "security" blanket, El Al has been able to get away with horrible passenger service. Its only real competitor on the TLV-NYC route used to be Tower Air. Continental has done wonders for the market. Air Canada continues to siphon traffic from the US west coast. El Al will never thank its competitors the way it should, for they have made it a much better company. So kudos to Israir - may they succeed. How about the little gem in the story about the 787s? El Al is making buckets of money. Let the competition begin.

Singapore Airlines must divest: Kuan Yew

AFP -- Singapore Airlines must sell its catering and maintenance subsidiaries to help it stay focused in an increasingly competitive environment, the city-state's founding father Lee Kuan Yew said. The airline, one of Asia's biggest carriers, holds an 85 percent stake in SIA Engineering Company (SIAEC) and 83 percent in Singapore Airport Terminal Services (SATS), The Business Times said Friday. The newspaper quoted Lee, a senior adviser to the government, as saying the government's responsibility is to safeguard Singapore's hub status and not necessarily to protect Singapore Airlines (SIA). At the same time, SIA must be given the resources to maintain its "leading position", which it can maintain if it remains nimble and management has flexibility to change practices and cut costs, Lee said. "Sooner, rather than later, SIA's engineering and catering subsidiaries will be hived off and become separate companies to meet competition from non-SIA business because more companies will enter these two sectors. So SATS and SIAEC must compete for non-SIA business," Lee was quoted as saying during a meeting with SIA's management and union leaders. Lee was Singapore's first prime minister and currently holds the title of Minister Mentor in the cabinet headed by his son, Prime Minister Lee Hsien Loong. The Singapore Airlines board will meet to discuss on the divestment in the middle of 2006, chief executive officer Chew Choon Seng told The Business Times. In August, a senior official said Singapore's status as one of Asia's main air hubs is threatened by the emergence of larger long-range aircraft and the upgrading of rival airports in Kuala Lumpur, Bangkok and Dubai. Balaji Sadasivan, senior minister of state for information, communications and the arts, said Singapore's thriving aerospace industry was largely dependent on the city-state's standing as the fourth largest air hub in Asia. ---------- They never stop thinking in Singapore. Some readers might be fascinated to know that Changi Airport has the fastest processing time for inbound passengers. Singapore harbor also has the fastest time to process paperwork of any port. This is why they have been able to go from a poor little speck of an island next to Malaysia to a nation state with a GDP that rivals European nations in 50 years. Of the 3.5m people living in Singapore, 2.5m are Internet users. This is a happening place.

Yet another Airbus delayed?

People.co.uk -- JUMBO jet builders watched in horror as a new £15million wing fell from a crane and shattered. The gigantic 50-ton plane part which had taken TWO MONTHS to build was smashed in seconds when a support chain snapped. Workers at the Airbus plant near Chester stood in stunned silence as the 208ft wing - the length of seven double-decker buses - lay crumpled on the giant factory floor. An Airbus insider told the People: "As blunders go, it is astronomical. Everyone just fell deadly silent and people didn't know whether to laugh or cry."The wing was being hoisted for shipment to Germany over Christmas when disaster struck. The damage is repairable but is estimated to cost £5 million to fix. Bosses at European-owned Airbus had to frantically ring round workers on their Christmas holidays to ask them to come in and repair the shattered wing. The Chester plant - which is also building wings for the world's biggest passenger plane, the new double-deck A380 Megabus - had painstakingly constructed the part for Germany's Lufthansa airline. Our source said: "Jumbo wings are incredibly expensive and take a long time to build, so the repair bill is going to be massive. "It also means the plane it was destined for won't be ready on time. It's incredibly embarrassing." An Airbus spokesman refused to comment. ---------- This is awful news. The poor factory workers must have been devasted... two months of work smashed. Note the wording - its not clear this wing is for a 380. We see somewhere else this refers to a 340 wing which happens to be 206 feet. If you know anything about Lufthansa you will know this - they will probably reject that wing and demand a new one. Lufthnasa is very proud of their Technics group who inspect every new airplane painstakingly - no fault gets by them.

Flyi fleet

As this airline shuts down this week watch lease rates and prices on regional jets drop. This drop occurs in an already soft market.

Drunk passenger gets dumped

Reuters -- A drunken passenger on a leisure flight from the UK to Spain was dropped at a tiny island off the African coast after he swore at the cabin crew, a newspaper reported on Friday. The plane's captain decided to leave the man at Porto Santo, a volcanic outcrop in the Atlantic, after he became abusive when he was refused more alcohol, the Daily Mail said. The plane, heading from northern England to the Spanish tourist island of Tenerife, diverted to the Portuguese island, which is just 10 miles long and four miles wide. Police met the man at the airport. He is due to appear in court in mainland Portugal in January, the newspaper said. The island's airport is a legacy of the Cold War when NATO considered making Porto Santo a frontline base to guard Europe's southern approaches. With only half a dozen hotels and a few sandy beaches, Porto Santo is little known to most tourists who flock to the nearby, larger island of Madeira, a two hour ferry ride away. ------- This fellow is very lucky he was among Brits. In the US, we don't think he would have been allowed to walk off the plane. All the same, they nailed him.

Dumbest airline strike - ever?

AP -- Mechanics at Northwest Airlines Corp. voted to remain on strike Friday, a move that will have little impact on the bankrupt airline’s operations. Leaders of the Aircraft Mechanics Fraternal Association lobbied against the company’s latest offer, which would not have brought back any of the 4,400 union members who went on strike Aug. 20. Of the 2,223 votes cast, 1,258, or 56 percent, of union members rejected the offer while 965, or 43 percent, voted in favor, according to a news release from the union. --------- They have lost their jobs - now we can say with some certainty that they have also lost their minds. The stikers lost big time. What was the point of this vote? Those who want to get a job at the airline must now cross the picket line if they have to. Since there are 965 people who are willing to accept the offer, what few jobs are open will have lots of takers. The airline remains in the drivers seat. What a waste this all seems to have been.

Bangkok buying six Airbus 350

Speednews reports Bangkok Airways announced plan to order six A350s for delivery from 2012. It has not selected an engine. ---------- Another win for the 350 - but again not a tier 1 airline. But certainly a nice way to close the year.

DBA Expects 2005 Passenger Count to Rise 37%

Bloomberg -- DBA, Germany's third-largest airline, expects 2005 passenger numbers at its main base in Munich to rise 37 percent after the carrier took over a competitor's routes and offered tickets through Aldi Group supermarkets. The number of people flying with DBA through Munich, Germany's third-biggest city, will rise to 2.21 million travelers in the year through Dec. 31 from 1.61 million travelers in 2004, the airline said in an e-mailed statement today. DBA reiterated a forecast that passenger numbers on its 29-destination Europewide network in the year ending March 2006 will rise about 43 percent. DBA, the former German unit of British Airways Plc, postponed plans for an initial share sale after Heinrich Bischoff, owner of competitor Germania Fluggesellschaft mbH, bought a 64 percent stake in DBA, which received control of most planes and routes of Germania's Gexx low-fare division. DBA, which British Airways sold to a German aviation consultant for a symbolic 1 euro in 2003, posted its first profit in fiscal 2004. ``We want to build up our strong position in coming years as Munich's biggest low-cost airline,'' Chief Executive Officer Martin Gauss said in the statement. The carrier sold 565,000 one-way flights for 49.99 euros each at Aldi Sued supermarkets, the southern-German chain of the country's biggest discount food retailer, in late July. --------- We bet BA thinks this investment was stolen from them now. Very creative to use supermarkets as a distribution channel. Anyone in the US paying attention to this? How about using Walmart as a distribution channel? Probably cheaper than a GDS and probably reach more people too!

Flour in condoms confuse TSA

Philadelphia Inquirer - She was a freshman on an academic scholarship at Bryn Mawr College, preparing to fly home to California for Christmas, sleep-deprived, with questions from a calculus exam still racing through her head. In the space of a few hours on Dec. 21, 2003, Janet Lee landed in a Philadelphia jail cell, where she would remain for three weeks, held on $500,000 bail and facing 20 years in prison on drug charges. All over flour found in her luggage. "I haven't let myself be angry about what happened, because it would tear me apart," Lee said. "I'm not sure I can bear to face it... . I'm amazed at how naive I was." That naivete, she said, began when screeners at Philadelphia International Airport inspecting her checked luggage found three condoms filled with white powder. Lee laughed and told city police they were filled with flour. It was just part of a phallic gag at a women's college, she told them, a stress-reliever, something to squeeze while studying for exams. The police didn't find it funny. They told her a field test showed that the powder contained opium and cocaine. A lab test later proved the substance was flour - and no one now disputes that Lee is innocent, including the prosecutor. ----------- Who is dumber? Imagine if this was in Singapore, she might be hanged by now.

New Israeli/Russian Airport Security Lie Detector

REUTERS -- A woman undergoes testing by the GK-1 lie detector, a prototype of which is in use at a Russian airport, in this handout picture released November 17, 2005 by Nemesysco. A new walk-through airport lie detector made in Israel may prove to be the toughest challenge yet for potential hijackers or drugs smugglers. Picture taken November 17, 2005. -------- Imagine how long each "interview" takes! If you have flown through Ben Gurion you know what this feels like. Oh no....

More evidence 2006 might be better for airlines

Bloomberg -- The number of passengers using European carriers rose 7.3 percent this year through Dec. 18. Average seat occupancy for the 30 members of the Brussels-based Association of European Airlines reached a record 76 percent in the first 11 months of 2005. European airlines will report total earnings next year of about $2 billion, or almost five times the level of 2004, said David Henderson, an AEA spokesman. Air France, Lufthansa and British Airways Plc, Europe's three biggest carriers, have increased yields, a measure of average ticket prices, and covered higher fuel costs with surcharges and futures contracts. ``The super strong revenue momentum shows no signs of slowing,'' said Hugo Scott-Gall and Christopher Logan, airline industry analysts for Goldman Sachs Group Inc., in a Dec. 21 report for investors. ``Business-class demand is back to pre-9/11 levels in some markets and forward bookings look rosy.'' ``There's only three ways for airlines to improve,'' the AEA's Henderson said. ``Improve load factor, increase yield or reduce costs.'' Prospects for higher profit rely on oil prices remaining fairly stable, said Geoff van Klaveren of Exane BNP Paribas in London. Every $1 added to oil prices increases the industry's fuel bill by $1 billion, according to the International Air Transport Association. The price of Brent crude oil will average $53 a barrel in 2006, about $2 less than in 2005, IATA Chief Economist Brian Pearce said at a Dec. 14 briefing. Brent futures peaked at $67.72 a barrel on Sept. 1. Air France Chief Executive Officer Jean-Cyril Spinetta said on Nov. 23 that earnings before interest and tax will rise 50 percent in the fiscal year ending March 31. The airline is outperforming rivals by attracting passengers from across Europe to its bases at Paris Charles de Gaulle and Amsterdam's Schiphol airports for international flights, he said. Lufthansa expects to more than double operating profit to 1 billion euros ($1.81 billion) ``as soon as possible'' as it cuts costs and uses promotions to fill short-haul flights, Chief Executive Officer Wolfgang Mayrhuber wrote in the company's staff magazine on Dec. 16. ------------ This sounds positive. No wonder Airbus and Boeing are casting their eyes in the direction of these three for orders. However, among US carriers the picture is not as positive yet.

BA 747 craziness again

Remember earlier this year there was a story about a BA 747 from LAX to London that flew low and slow when it had an engine out? The pilot did not land, rather he chose to fly to the UK. Here's another gem. BBC -- A British Airways 747, flying from New York's JFK airport to Heathrow, London, diverted to Cardiff at about 1230 GMT and made an emergency landing. A Cardiff airport spokesman said fire crews were on standby but the plane landed safely. The cause of the problem in the cockpit is being investigated. There were 17 crew members aboard the plane but just two passengers. It was the second incident involving the plane in 24 hours. Earlier, the aircraft had suffered a bird strike as it flew into New York. This led to a six-hour delay for the plane at JFK airport. Nearly all the passengers were put on other flights, leaving just two on board the jumbo jet when it was involved in the incident as it headed to the UK. "The incident was dealt with by on-site engineers who discovered no fire and the passengers were sent onward to their final destinations by taxi."

$5bn Showdown

BusinessWeek online -- The new year promises a $5 billion showdown between airlines and the companies that process reservations. Known as global distribution service (GDS) companies, they include Sabre Holdings (TSG), Cendant's (CD) Galileo unit, and privately held Worldspan. These outfits charge airlines $12 to $13 per round-trip to crunch fare schedules and let travel agents connect with airline reservation systems to make bookings. GDS costs are 2.5% of some airlines' revenue -- about $160 million a year for Continental and $500 million a year for American. "It's in the top five costs," says David Cush, American vice-president for distribution. "Fuel is No. 1, then labor, then airplane ownership, and then distribution." But major airlines' contracts with the GDS companies will run out by midyear -- and airlines want to cut their GDS costs by 50%. To get big rate cuts, they're threatening to walk away from some GDS companies completely -- or to withhold information on their best fares or schedules if others won't slash their fees. "It's going to be a three-way shootout between the airlines, the GDS [companies], and the online travel agents," Forrester Research analyst Henry Harteveldt says. . "The cost of providing our services isn't going to go down," says Jack O'Neill, chief operating officer of Carlson Wagonlit Travel. One of the carriers' major beefs is that GDS companies charge the same rate regardless of ticket price. "I don't have any problem paying $12 to sell a $1,000 ticket -- it's the $79 ticket [that's a problem]," says Dave Slater, managing director of e-commerce for Continental. In 2004, the government deregulated the GDS business, and in so doing gave airlines more flexibility to share special fares with their favorite partners. One possible model for a truce is Sabre's October deal with AirTran Holdings (AAI). Sabre cut GDS fees, and AirTran gave Travelocity discounted package tickets -- and stopped selling through Worldspan. Under this agreement, Sabre actually makes more from AirTran than before, both companies say, though a source near the talks says AirTran pays Sabre just $5.50 per round-trip. "It's because of increased volume and the limited participation of other GDS [companies]," AirTran VP Kevin Healy says. Meanwhile, technology has slashed the cost of alternatives. If a customer books a ticket directly on the airline's site and not that of a travel agent, the transaction can cost the carrier as little as $3. Startups ITA Software and G2 Switchworks have also invented low-cost GDS substitutes that let agents process reservations for $3 or less by using open-source software and skipping extra services GDS companies offer. JetBlue bypasses GDS companies and travel agents entirely in favor of selling more cheaply through its Web site and by phone. Southwest offers some seats through Sabre at a special discounted rate, but it sells most tickets directly, thus avoiding GDS fees. ---------- We have been following this story for a while over the year. Distribution is a cost airlines wanted to tackle for years. Like airport fees, GDS fees seem to go only up. Being technology oriented, you would think GDS' could cut their fees - but no. So you see that airports are revenue positive and GDS actually make profits - while airlines bleed. Somthing has to give. The LCCs have showed that they can seel directly just fine and operate outside the GDS world. Meta search services like SideStep show airlines might not need as much access to a GDS. As consumers learn that buying a ticket online is cheaper, faster and more efficient, meta search is a natural next step in optimising their deal. If you hav not yet tried one of the meta search sites, run a ticket price on a city pair you fly and see how neat they are. These tools scour the web for deals. The GDS model is strong when using travel agents - and as more business goes online, travel agents have become more specialized, charging legitimate fees for their special knowledge. But their world is shrinking because technology keeps breaking down the special knowledge barriers. That said, just as in the the investing world, there is room for a full service broker and online discounters. You use whichever is better for you. Bottom line - airlines have options that GDS don't. Star Alliance has already made it clear they are going with new players in the GDS world. Its time for GDS companies to drive down their own costs as hard as every other business in the travel space. Not doing so will start to shrink their world too. Already airline web sites are often the cheapest places to find a ticket and airlines have huge brand loyalty. Consumers want efficiently priced (read cheap) tickets and are agnostic as to how they get these tickets. Who cares if the ticket was handled by Worldspan? Consumers think of Expedia where they bought the ticket. GDS firms have little brand identity - if Travelocity were to become Sabre in the eyes of consumers then maybe they could drive their own brand and create their own loyal following. Meantime, airlines are likely to play the renewal game harder in 2007 and probably will renew for shorter periods because technology options are now working for them and against the GDS'.

Flyi shutting down?

USAToday (Ben Mutzabaugh) -- The company sent out furlough notices Monday telling employees that the carrier will “permanently cease all operations and separate all employees at all locations sometime during the period January 7-21, 2006,” if the company is “unable to secure significant external investment or a sale of all or substantially all of its operations” by Jan. 7. Letters sent to both flight attendants and pilots informed them that they are scheduled to be furloughed “effective Jan. 7,” though the letter states I-Air “retains the right to amend or rescind this notice of furlough.” However, I-Air spokesman Rick DeLisi tells me that "nothing has changed in any way" and says "the company is continuing to explore all available options, and anything could happen on any day" -- including an investment deal that could keep the company operating. He says the furlough notices sent to unionized employees contain the exact same information that was sent to other I-Air employees when the company filed for Chapter 11 bankruptcy in November, and he adds that the carrier plans to operate as scheduled. As for the furlough notices, a copy of one of the letters was posted on the Web. The subject was also a popular topic on the forums at Airliners.net. For customers holding tickets on Independence Air, the letter would seem to indicate that the carrier plans on flying through Jan. 6. After that, things appear uncertain. More news is likely this week. Stay tuned…

Flight International - World Airliner Census

Recommended download using this URL: http://www.flightinternational.com/assets/getasset.aspx?itemid=9647

Kofi wants your money

Reuters -- UN Secretary-General Kofi Annan urged governments to follow France's lead after its parliament approved a tax on airline tickets to finance development aid for poor countries. "The secretary-general warmly welcomes the adoption by the parliament of France of a levy on airline tickets issued locally that will benefit the health sector of developing countries," UN spokeswoman Marie Okabe said. Parliamentary approval of the tax came on December 22. It will range from EUR1 to EUR40 (USD$1.18 to USD$47.20) on flights from France, depending on distance traveled and class of ticket. It takes effect on July 1. French President Jacques Chirac has campaigned hard for an international tax on airline tickets to help fight global poverty. The government hopes that in France alone, the tax will generate EUR210 million (USD$248 million) a year. French Foreign Minister Philippe Douste-Blazy has said more than 66 countries support France's campaign. Chilean President Ricardo Lagos said in September the measure had been approved in his country and would go into effect on January 1, when a USD$2 charge would be added to tickets on all outgoing flights from Chile. But the plan has encountered resistance in the United States, failed to win widespread backing in Europe and upset airlines, which fear higher fares will drive away passengers. -------- This is, of course, of great comfort. Helping the poor is a good thing. Having the UN involved is never a good thing because they don't know how to take care of money - that’s for sure. Readers will know how we feel abut the Chirac-tax - its dumb. Good for the US and other countries that rejected this idea. The world has been handing out aid to Africa for a long time with no apparent success. Leave the Africans to help themselves instead of creating a dependent culture. Once they discover democracy and capitalism as the fastest way to a better life, they won't need aid. A French-inspired tax is of no help to them achieving societal change. If ex-communist countries can do it Eastern Europe, and even China can do it, then so can poor countries everywhere. The alternative is to look at Cuba as a model, a potentially self sufficient nation, now reduced to dependence on Hugo Chavez. How embarrassing for the Cuban people.

How you're going to fly after 2008

As the year draws to a close, you might want to think what these mega-orders from airlines mean to you - the unfortunate one who will eventually pay for these shiny new planes. First, even though Airbus has started flying its 380 and Boeing is going ahead with a newer version of its 747, for most people this is not how you will be flying at the end of the decade. This is good news, seriously. The 787 sales campaigns have shown that, without doubt, airlines have bought into the point-to-point markets. Connecting secondary cities is where the action is going to be. This means that for most of us who don't live (survive?) in large cities; there is a good chance we have a non-stop international flight in our future. This means, for example, you might be able to fly Dallas-Sydney without a stop. Avoiding a hub is worth at least two hours outbound and another two hours inbound. Seriously, how much extra would pay to avoid even 30 extra minutes in airport? Four hours saved is worth at least $50/hour - a non-stop flight between Portland and the UK is worth up to $200 more. There are attractive city-pairs all over North America - look where 777s are flying now as a guide. Middle East and Asian flights from just about any larger US city. Same with European cities - origin cities will include communities on the cusp of international service like San Diego, Phoenix, Portland and Salt Lake City. Axiomatically you can expect to see declines in connecting flights through hubs like DFW, Atlanta, Chicago and Newark. While the latter two have good sized origin traffic by being or located near big cities the same cannot be said of, say, Atlanta. Notice that JFK’s biggest airline today is jetBlue – not overseas focused airlines. Connecting international flights from further west are not as big a business as they were; Cincinnati, Chicago, Atlanta and DFW have captured this traffic. The 787 will make these and other cities even less dependent on connections. We already see the power of point-to-point service in the US as executed by Southwest and jetBlue. This is going to occur more going forward and change will impact hub-sensitive airlines. But as we can see at United, with its greedy managers, legacy carriers may face other challenges as well. One has to wonder what might happen at Delta as it tries to emerge from Chapter 11, as its pilots have "unfinished" business with management. Northwest also has unsettled labor relations. So the future of US commercial aviation remains murky - it is clear there is too much capacity. GE will keep the carriers flying if the banks don't. We expect to see fewer airlines flying and perhaps less planes, too. Hopefully the older, noisy, gas guzzlers will be parked. Expect to see more E-190s, like jetBlue flies, all over the US. Small, efficient planes are going to change things on short hauls as well. Watch for the VLJs – very light jets or air taxis - to inflict more undesired changes as well. The big airlines hate the idea of these little planes buzzing in and out of "their" airports using “their” slots. No problem really as these small jets can fly from smaller runways - these planes could have a really nice impact from the business travelers who get shafted on price now. Which is another reason big airlines don't like VLJs. Imagine how well VLJs might do out of LGA? As a consumer, where do you go with your shrinking wallet? We recommend that (if you can) sign up with American Express for their Platinum Card. This gets you into clubs at Continental, Delta and Northwest. Other cards also offer these types of benefits. Don't focus too much on miles; the miles you have are nearly impossible to cash in. Focus rather on what you can get out the airlines now. If it’s a cheap seat, take it. Loyalty is not what it used to be because it is not rewarded with real “value”.

Know an unemployed pilot?

NNI -- The resignation of nine pilots from China Eastern Airlines has thrown China's airline industry into turbulence. Ostensibly, the pilots quit because of dissatisfaction with their treatment and concerns about airplane safety. But amid the worsening shortage of pilots in China's rapidly growing airline industry, there is strong speculation that the pilots were hired away by another airline. Securing enough pilots has become a headache for all of the companies. According to local newspapers, the nine pilots were from the Jiangsu branch of China Eastern Airlines. In August, the pilots requested a dialog with company executives to discuss their treatment and safety issues. But the environment did not improve after the talks and they resorted to work strikes on two occasions. The airline considered the strikes a violation of labor laws and suspended the pilots. The pilots countered by submitting their resignations. China's airlines have been aggressively introducing planes from Airbus SAS and Boeing Co. and increasing their numbers of flights. But the training of pilots has not kept pace with the speed of expansion. Estimates now put the shortage at 400 pilots a year. Behind the shortage is the entrance of a succession of new airlines since the start of the year. Five new private carriers have been authorized by the Civil Aviation Administration of China (CAAC) and three have already begun flights. To crew their planes, the new carriers have been luring staff away from the other airlines. The story making the rounds is that the nine pilots resigned from China Eastern Airlines to work for better pay elsewhere. It would not be the first time: last year, the industry's feathers were ruffled when 14 pilots from China Xinhua Airlines, an affiliate of Hainan Airlines, moved to work for Okay Airways. Believing that this practice endangers safety, the CAAC in May said that an airline that hires a pilot away should pay reparations of 700,000 to 2.1 million yuan ($86,700 to $260,130). In China, it takes 10 years and 3 million yuan to train a pilot. For that reason alone, the airlines are bound to start making far greater efforts to keep their pilots. -------- After the same problem hit in India, unemployed pilots now have options in two markets. The growth in Asia is fantastic and clearly offers people with a clean commercial license a future. These two nations cannot train enough internally to meet their fleet growth plans so foreign pilots are required to fill the gaps. ----- 14:57 rejoinder - this story has generated 25% of all our traffic today so far. There must be a lot of pilots looking for the next gig.

Aeroflot buying 787s?

Reuters -- Flagship Russian carrier Aeroflot, which tendered for long-haul aircraft in July, wants to buy 22 Boeing planes worth more than $2.5 billion, business dailies Kommersant and Vedomosti reported on Tuesday. Flagship Russian carrier Aeroflot (AFLT.RTS), which tendered for long-haul aircraft in July, wants to buy 22 Boeing (NYSE:BA - news) planes worth more than $2.5 billion, business dailies Kommersant and Vedomosti reported on Tuesday. --------- This order has been generally accepted as going in favor of Airbus. Airbus has been bringing Russians into its fold with narrow body orders as well as investin in Russian aerospace ventures. If this order is indeed formalized, it will be a heavy blow to Airbus' 350 campaign. Note that, so far, not one Tier 1 airline has ordered the 350. We expect Airbus to react vigorously to this news. Boeing is already talking about price increases on the 787 (who can blame them?). Airbus needs to get a win on the 350 - can it be the 350 is so eclipsed by the 787?

In-Flight Magazines

We came across a really neat blog called Connecting Flights - use this link to get there. http://babelfish.typepad.com/babelfish/ We especially like their story on the future of in-flight magazines. Readers know that we are gung ho on in-flight internet access. So we are a bit chastised that we never thought of this before. Their blog entry Bored at 40,000 Feet reads: “My story on the illusory success of in-flight magazines appeared on Mediabistro.com Monday. These are good times for the custom publishers who actually do the heavy lifting and reap the profits -- Pace Communications, which publishes United's Hemisphere, Delta Sky, and U.S. Airways' Attaché, is more profitable than all three of its clients -- but they're about the hit turbulence, I argued. The arrival of live satellite TV in every jetBlue seatback changed the equation, as will the eventual arrival of cellphones and WiFi in cabins. If magazine readership usage in the general population has fallen over decades due to competing forms of media, then what would happen when all of that competition suddenly arrived in airspace at once? My conclusions were blasted as simplistic by some (Simon Leslie of Ink Publishing, which publishers a number of in-flight titles for mostly European clients, wrote to say he was particularly disappointed), but the point I was trying to make is that in-flight magazines need to use the isolating experience of most flights to their advantage. The magazine I loved the most, Virgin Atlantic Upper Class' Carlos, is compelling because of a combination of the content (sharp, funny, media-savvy, and unapologetically elitist) and the design is minimal and striking. Mr. Leslie meant to take issue with that -- "The fact that his favourite magazine is Carlos really sums it up, its a magazine that is different for different sake" -- but he hit upon exactly my point. The fact that I also spent three weeks doing nothing but fly from place to place and yet was still too busy to flip through Hemispheres proved to me that only something shockingly different, and for difference's sake could compel me to read it.“ We concur that in-flight magazines really don’t seem to have such a great future. They are, by and large, boring and self serving. Its kind of telling when you see the Skymall catalog has a distinctly more “used” look about it. We surmise that in-flight magazines will go the way of the crappy in-flight content pumped through the aged and mostly out of tune TV sets on planes – how many color settings do these have? Roll on the day where we can use our own equipment and access our own content.

LCC redefined - Jazeera costs nearly nothing to fly

Jazeera Airways yesterday announced the launch of a ground-breaking fare structure starting from 10 Kuwaiti dinars. The offer will be valid for flights to all its destinations for bookings placed three weeks ahead. The new fare will always be available on selected seats on every flight to Kuwait, and every flight from Kuwait to Dubai, Beirut, Damascus, Amman, and Bahrain in addition to future destinations. Michael Hayden, revenue manager of Jazeera Airways, said: "Our new fare structure brings more freedom to travellers who plan their flights before-hand. Early birds, as we call them, can now fly to any of our current destinations on board our brand new aircraft for only 10 dinars when they book three weeks ahead." Based on a low-fare business model, Jazeera Airways is the first privately owned (and non-subsidised) airline in Kuwait and the Middle East. The airline is a national carrier of Kuwait and operates a fleet of brand new Airbus A320 aircraft all fitted with 165 leather seats. Its unique business model works to achieve across-the-board efficiency through electronically integrated operations, innovative booking and ticketing systems, operating a fleet of single type aircraft, and contracting world renowned specialists such as Lufthansa-Technik for engineering services. The airline only recruits pilots who have a minimum of 5,000 flying hours. --------- Using the link below, you too can see that 10 Dinars is ~$34. If pundits thought Emirates growth outrageous then this pricing seems to indicate free fuel, aircraft and labor. What is going on over there? Note the revenue manager quoted in the story is clearly an ex-pat. Likely a Brit like many managers among the region's airlines. Mr. Hayden was not, apparently, trained at American Airlines. (Crandall would have skinned him alive in public) How long can these mid-east airlines continue to do business this way before reality strikes? BTW you might be impressed to know that Jazeera's IPO was 12 times over subscribed. http://www.xe.com/ucc/convert.cgi

Einstein's theory of boarding planes

Ananova: Researchers have used Einstein's theory or relativity to find the most efficient way for passengers to board an aeroplane. And they have concluded that the time honoured method of boarding by seat numbers is a waste of time, reports the Sun. Dr Eitan Bachmat, of Ben-Gurion University of the Negev in Israel, says airlines would be better off following the example of low-cost carriers who let passengers sit where they like. Dr Bachmat said: "Back-to-front boarding is bad because it is designed for cardboard-thin passengers, or for the spacious surroundings of the first-class compartment. "But there is no need to play with the rows. It doesn't matter which rows get on first." Dr Bachmat stumbled accross the theory when researching how to make computers run quicker. He said: "It dawned on us that we could use the same geometry that appears in relativity theory." -------- Now you know.