Korean Air has finalized an order for 30 Boeing 737 MAXs and two 777-300ERs, with a list value of nearly $4 billion, firming up the commitment it made during the Paris Air Show in June.
Boeing said the total order could reach up to 52 aircraft, if Korean Air exercises the 20 737 MAX options which form part of the deal.
“I am confident these new airplanes will play an important role in Korean Air’s fleet modernization program for many years to come,” Boeing Commercial Airplanes president and CEO Ray Conner said.
The SkyTeam member operates a fleet of 166 aircraft, of which 91 are Boeing passenger variants, spanning 737s, 747s and 777s. It also operates an all-Boeing cargo fleet. With this latest order, Korean Air has 62 Boeing aircraft on backlog.
Korean Air’s aerospace division supplies the raked wing-tips on both the 747-8 and 787 programs. It is also one of the two suppliers of 737 MAX advanced-technology winglets.
Geneva - The International Air Transport Association (IATA) released data for global air freight markets showing very modest growth in September. Measured in Freight Tonne Kilometers, air cargo volumes rose 1.0% compared to the same month a year ago. This is a slight improvement on the August performance when volumes were broadly stable. Overall, however, air cargo volumes remain 1.2% down from their 2014 year-end peak.
The results varied widely by region. Carriers in the Middle East reported the most significant growth (7.5%) followed by European (2.8%) and African airlines (2.5%). Asia-Pacific based airlines recorded negligible growth (0.3%), and markets in North America (-3.3%) and Latin America (-6.4%) recorded declines. All regions reported capacity expansions ahead of growth in demand, taking the freight load factor down to the lowest level since 2009 (43.2%).
"Although slightly improved from August, the global trend is fragile, and the improvement
is narrowly based. The 2.8% growth reported by European carriers reflects positive trends in trade with Central and Eastern European economies as well as a general improvement in manufacturing in the Eurozone. But the largest air cargo region, Asia-Pacific, was only just in positive territory, held down by weak regional trade," said Tony Tyler, IATA’s Director General and CEO.
vs. Sep 2014
|FTK Growth||AFTK Growth||FLF|
|YTD 2015 vs.
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Regional analysis in detail
Asia-Pacific carriers saw a slight rise in FTKs of 0.3% in September compared to September 2014, and capacity expanded 2.1%. The contraction in Emerging Asia trade appears to have bottomed out, although China, Korea and Chinese Taipei, among other key economies, are suffering from poor trade growth.
European carriers reported a rise in demand in September of 2.8% compared to a year ago and capacity rose 7.7%. The European performance looks more impressive considering that volumes for the year to date have been flat. Improvements in Eurozone manufacturing activity and in trade to/from Central/Eastern Europe seem to be finally feeding through to support air freight demand.
North American airlines experienced a decline of 3.3% year-on-year and capacity grew 4.8%. Despite the poor year-over-year result, volumes in September were up 0.8% compared to August, indicating possibly that anticipated improvement in economic performance for the second half of the year may drive stronger air freight demand.
Middle Eastern carriers saw demand expand by 7.5%, and capacity rise 12.6%. Although once again the fastest growing region, the increase was 5.5 percentage points down on the average for the year to date. Major economies in the region have seen slowdowns in non-oil sectors, but growth rates remain robust enough to sustain solid demand for air cargo.
Latin American airlines reported a decline in demand of 6.4% year-on-year, and capacity expanded 2.1%. Worsening economic and political conditions in Brazil have led to regional trade activity falling 7% between July and August. Air cargo demand is down 6.8% for the year with no sign of improvement in the months to come.
African carriers experienced growth in demand of 2.5%, and capacity rose by 8.1%. Nigeria and South Africa, the largest economies in the region, have underperformed. Regional trade, however, has held up, and generated increases in air freight volumes.
Geneva - The International Air Transport Association (IATA) announced global passenger traffic results for September showing solid demand growth compared to September 2014 for domestic and international traffic.
Total revenue passenger kilometers (RPKs) rose 7.3% compared to the year-ago period, slightly above the 7.1% growth achieved in August. September capacity (available seat kilometers or ASKs) increased by 6.6%, and load factor rose 0.5 percentage points to 80.7%.
vs. Sep 2014
|RPK Growth||ASK Growth||PLF|
|YTD 2015 vs.
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September international passenger demand rose 7.0% compared to September 2014, with
airlines in all regions recording growth. Total capacity climbed 6.9%, and load factor edged up 0.1 percentage points to 80.5%.
European carriers saw demand increase by 7.1%, supported by economic recovery in the region. Capacity climbed 6.6% and load factor rose 0.4 percentage points to 85.1%, highest among the regions.
Asia-Pacific airlines’ September traffic rose 6.8% compared to the year-ago period. Capacity increased 5.9% and load factor climbed 0.7 percentage points to 77.0%. The healthy performance occurred in spite of notable declines in trade activity in Emerging Asia as well as slower than expected growth in China.
North American airlines’ traffic climbed 4.1%, which was matched by a capacity expansion of 4.1%. As a result, load factor was flat at 82.4%. Expectations for better economic performance are supporting travel demand.
Middle East carriers had a 9.9% demand increase in September, well down on the 13.7% year-over year growth experienced in August, but still a very healthy result. Capacity rose 12.9% and load factor slipped 2.1 percentage points to 75.7%. Major economies in the region, including Saudi Arabia and the United Arab Emirates, have experienced slowdowns in non-oil sectors, however rates of growth remain robust.
Latin American airlines saw September traffic climb 7.9% compared to September 2014. Capacity increased by 8.5%, however, causing load factor to dip 0.5 percentage points to 80.0%. Despite recessionary conditions in Brazil and Argentina, solid international trade activity has provided a boost to business-related travel.
African airlines experienced their third consecutive month of positive traffic growth in
September, posting a 5.2% rise compared to a year ago. However, the result could be owing to volatility in reported volumes, as fundamental economic drivers remain weak. Capacity rose 3.5%, and load factor improved 1.2 percentage points to 71.6%.
Domestic travel demand rose 7.8% in September compared to September 2014. All arkets
except Brazil showed growth with the strongest increases occurring in India, China and Russia. Domestic capacity climbed 6.1%, and load factor improved 1.3 percentage points to 81.0%.
|Sep 2015 vs Sep
|RPK Growth||ASK Growth||PLF|
Brazil’s domestic demand slipped 1.3% in September compared to September 2014 as the economy slid further into recession with rising unemployment, and the Brazilian Real continued to decline against the dollar.
The Bottom Line : “Aviation’s connectivity is vital to the health and well-being of the global economy. And financial strength is critical to the industry delivering its best. While the overall outlook is for a collective profit that covers the industry’s cost of capital, parts of the industry are really struggling. The poor economic performance in Brazil is having a dramatic negative impact on the industry’s performance in Latin America’s largest market. There are a number of swift policy options that the government could take to stimulate the sector by reducing the burden of onerous taxes, punitive regulation and a crippling fuel pricing regime. A comprehensive policy response would unleash the power of aviation connectivity and pay big dividends across the economy. There is no time for complacency,” said Tyler.
WestJet CEO Gregg Saretsky stated the carrier is considering more transatlantic routes, including European destinations such as Paris, Amsterdam and Rome (Travel Weekly, 26-Oct-2015). Mr Saretsky is targeting return on invested capital of 13% and 16% for its long-haul business, noting: “We’ll test that premise, and if it’s successful - as we expect it will be - then that becomes something we can extend to other geographies whether it’s continental Europe, Asia or Latin America.” He added, “This is the first piece of a new growth plan for WestJet. Bringing low fares to long-haul travel - this is something the world is just starting to see.”
Compared with its plan reported at the time of its 2Q2015 results announcement in Jul-2015, Norwegian's fleet at year end 2017 is now expected to be larger by two aircraft, with a total of 146 (see chart below). The increase is due to an additional two leased Boeing 787-9 aircraft.
The more significant fleet development, not reflected in the chart below, is a new order by Norwegian for an additional 19 787-9 aircraft. This brings its total orders for the variant to 30, to add to Norwegian's current long haul fleet of eight 787-8s. This is the largest single order for 787-9s in Europe.
Deliveries from the new order will commence in 2017 and are expected to be completed by
2020. In Norwegian’s configuration, the 787-9 will have 344 seats with 35 in premium and 309 in economy. This compares with its 787-8 configuration of 291 seats, with 32 in premium and 259 in economy. The larger, longer range aircraft offers lower unit costs and greater route flexibility, although filling the extra seats may bring some yield pressure.
The aircraft will be owned by Norwegian's Irish leasing subsidiary Arctic Aviation Assets and leased to Norwegian. Mr Kjos said that he was "very confident that Norwegian will be able to finance all of the aircraft without raising equity".
Barcelona-El Prat Airport has moved 13% more cargo
UPS, DHL, Qatar Airways, Emirates and Singapore Airlines currently lead air cargo from Barcelona-El Prat Airport. This emerges from the latest data published by AENA, reflecting a cumulative 44,734 tonnes transported between these five airlines so far this year, representing a market share of 52.7% of the total goods handled at this enclave.
As for the same data last year, Singapore Airlines dropped out of this top five, and the Company Carglolux, which has suffered a decline of 3%, climbed. Meanwhile, Singapore has risen more than 6%.
In terms of growth, the airline that has increased its freight traffic at the Barcelona-El Prat Airport most is Emirates, which has gone from transporting 6,000 tonnes in the first nine
months of 2014 to 8,396 tonnes accumulated this year, a figure which represents an increase of 39.86%.
The enclave increased the volume of vehicles by 18%
The Port Authority of Barcelona recorded, through September 2015, an increase of 9% in the traffic of containers full of imports and exports. Specifically, containerized import cargo increased 9.6% to over 366,000 TEUs, while containerized export cargo grew 8.7%, reaching 480,314 full TEUs. In addition, specialized port terminals in Barcelona transported, through September, 632,893 vehicles, a figure 17.8% higher than the same period of 2014.
Moreover, the volume of goods transported along the Motorway of the Sea from the port of Barcelona increased 20% between January and September 2015, a total of 100,666 ITUs. This result implies that, so far this year, short sea shipping lines at the Catalan Port have managed to divert more than 100,000 trucks from the roads to maritime transport, according to the data provided by the Port Authority of Barcelona.
International Airlines Group—parent company of British Airways (BA), Iberia, Spanish low-cost carrier (LCC) Vueling and Aer Lingus—reported a third-quarter net profit of €883 million ($992.8 million), up 39.3% compared to a net profit of €634 million for the same period last year. The figures do not include exceptional charges of €38 million related to IAG’s acquisition of Aer Lingus.
The profit figures were reached on total revenue of €6.76 billion, up 15.2% on the year-ago figure of €5.87 billion.
Friday’s results were the first to include a contribution from Aer Lingus, which IAG acquired in August.
Operating profits for the quarter to Sept. 30 climbed to €1.25 billion, an improvement from last year of €350 million, including Aer Lingus and €305 million better excluding the Irish flag carrier.
Breaking down the group’s operating profits by individual airline, BA recorded a figure of £589 million compared to £484 million for the same period last year; Iberia made a profit of €200 million, up from €162 million, and Vueling showed a positive figure of €178 million (2014: €140 million). Aer Lingus’s operating profit was €45 million from Aug. 18, the date of acquisition.
IAG expects to generate an operating profit for the full year of €2.25-€2.3 billion, excluding Aer Lingus. This figure is marginally up on previous guidance.
“We’re reporting strong quarter results with a positive contribution from all of our airlines,” commented IAG CEO Willie Walsh.
“Our passenger unit revenue showed a better trend than in the second quarter of the year and our cost performance remained strong,” Walsh said. “Aer Lingus made an operating profit of €45 million since it joined IAG on Aug. 18. While the airline’s profitability is seasonal, Aer Lingus is cost-effective and provides a natural gateway to build our business between Europe and North America. It’s a great asset for the group.”
He added that IAG would make its first dividend payment (of 10 euro cents per share). “For the full year we expect to pay out 25% of our underlying profit after tax in dividends and plan to announce a proposal for a final dividend for 2015 when the full-year results are published.”
Both IAG’s revenue and cost figures have been favorably affected by the strength of the US dollar and sterling, two of the most significant currencies in its operations.
Walsh noted Iberia’s figures are expected to improve further as the Spanish carrier’s transformation process continues. Changes to its management structure means it is now much more nimble in taking advantage of rapidly changing tactical situations in the marketplace.
Growth in the quarter had come from all parts of the group; Iberia, for example, had restored some previously ditched routes, such as Madrid-Havana, and opened new ones, such as Madrid-Cali, while BA opened up London Heathrow-Kuala Lumpur.
JetBlue Airways reported a net profit of $198 million for the third-quarter of 2015, more than doubling its $79 million net income from 3Q 2014.
The New York-based low-cost-carrier’s third-quarter revenue increased 10.4% YOY to $1.69 billion as expenses declined 2% YOY to $1.34 billion. JetBlue’s operating income for the quarter was $351 million, more than doubling the airline’s operating profit in the 2014 September quarter.
“We continue to focus on our growth in high value geography—nearly 98% of JetBlue’s 3Q ASMs started or ended in one of our six focus cities,” JetBlue CEO and president Robin Hayes told investors and analysts. “Margins are expanding across the network, even as we grow capacity faster than the industry average. In fact, we closed the third quarter with the most comfortable September in JetBlue’s history.”
JetBlue’s third-quarter traffic was up 9.2% YOY to 11.06 billion RPMs on a 10.4% YOY rise in capacity to 12.98 billion ASMs. The airline’s load factor for the quarter was 85.3%, down 0.9 point from last year. The airline reported carrying 9.24 million passengers during the quarter, up 7.7% YOY. Yield gains were minimal, up 0.5% YOY at 14.02 cents; RASM was flat YOY at 13.01 cents. CASM dropped 11.2% YOY to 10.30 cents.
JetBlue had hedges in place for about 14% of its fuel during the third quarter, which resulted in realized fuel prices of $1.85 per gallon, down 39.4% YOY from the 2014 realized fuel price of $3.05, and down 13.2% from the 2015 second quarter realized fuel price of $2.13.
The airline lost $27 million on fuel hedges during the quarter. “JetBlue currently has no fuel hedges in place for 2016 or beyond,” the company said in its 3Q financial statement.
Looking to the remainder of the year, JetBlue expects to increase its capacity between 8.5% and 10.5% in the fourth quarter, and between 8.5% and 10.5% for the full year. The company attributes the higher capacity range on its full-year outlook as “a function of additional Mint service driven by higher utilization of our Mint fleet, and continued better than expected completion factor.” Mint is JetBlue’s 16-seat premium cabin service, launched in June 2014, configured on Airbus A321ceo aircraft. As of Sept. 30, JetBlue had received 21 of the 46 A321ceos originally ordered; eight A321s have been delivered this year, including two in the third quarter.
“We continue to be extremely pleased with all aspects of Mint’s performance, from customer satisfaction to its bottom line contribution,” Hayes said. “This tremendous success pokiesaustralian.com led to our decision to expand Mint’s footprint.” Hayes detailed the airline’s recent additional Mint frequencies between New York JFK-Los Angeles and New York JFK-San Francisco, as well as upcoming Mint-equipped expansions of New York-Aruba, New York-Barbados, Boston-San Francisco, Boston-Los Angeles and Boston-Barbados routes.
Additionally, according to EVP commercial and planning Marty St. George, JetBlue has completed installation of its Fly-Fi broadband service across JetBlue’s entire Airbus fleet, more than 150 combined A320 and A321 aircraft. “We plan to complete Fly-Fi installation on all 60 of our Embraer 190s by the fall of 2016 at which point we will be offering free Fly-Fi service on the entire JetBlue fleet,” St. George said.