29 2015

http://www.traveldailynews.asia

Airline alliances have run their course and will

not survive, says aviation analyst OAG
As the leading American and Gulf carriers embroil themselves in
an unfair competition debate, the next stage of the battle for
global air passenger markets has commenced. Those airlines
which are focused purely on traditional alliance models may have
taken their eye off the ball as rapid changes take place, according
to OAG, the market leader in aviation intelligence.
OAG presents its considerations for future international strategies
in its new analysis report The Fight for Global Markets Is Three
the Magic Number?, to be launched at CAPAs Americas
Aviation Summit in Las Vegas (27-28 April 2015) by OAGs EVP
Data and Market Intelligence, John Grant.
John Grant says: Alliances are no longer the only means of

international competition. Increasingly joint ventures, equity

stakes and less formal partnerships are being used, all of which
challenge existing structures and operations. There are currently
more airlines than can realistically exist and in a truly global
market where barriers were eased, we would expect to see a
consolidation of carriers."
The global aviation outlook is transforming and there have to be

changes to the business structure, the key players and shape of

the industry. Alliances are not a long-term solution they are a
fixed solution which have run their course for many
circumstances.

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International capacity for US carriers falls

OAGs report explores how dominant airlines have arisen and
considers the academic label Rule of Three, whereby many industries
are dominated by three large players which compete alongside smaller
market specialists.
According to OAGs Schedules Analyser, two thirds of domestic
capacity is provided by the big three US carriers, American, Delta and
United, which together operate 59% of all US seat capacity, up from
37% nearly 20 years ago. With domestic capacity, this share becomes
62%.

Furthermore, these big three airlines are ranked as the top three in
the world with a combined share of 13% of global capacity. However,
as industry consolidation has impacted supply, the total seat capacity in
both domestic and international flights is 9% smaller today than it was
in 1996.

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Alongside market maturity has come some convergence of the
business models. Low-cost carriers (LCCs) now provide over a quarter
of capacity and when combined with the big three alliances, they
account for 93% of US domestic capacity.

According to OAGs report, whilst US carriers have developed

international markets, those markets have been typically in close
proximity to the US. At the same time, new carriers from further afield
have successfully built scheduled services to the US. International
capacity share for US carriers, of which the big three account for 83%
of seats, has fallen from 57% to 53%, as Gulf, Chinese and other
carriers increase their respective shares.
In particular, looking at the US-UAE market, the US carriers have
missed potential opportunities, according to OAG, as the Gulf carriers
have sought new markets to serve from their hubs.

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China to overtake US as worlds largest market by 2022
John Grant says: While the target of the US concern has been Gulf

carriers, it could equally have been Chinese carriers. Chinese airlines

will operate 140% more seats to the US in a typical week in April 2015
compared to 2010. In contrast, the US carriers will have increased
capacity by 80% in that time, leaving the US carriers with slightly more
capacity on China-US routes. However, the Chinese carriers are
closing in and within seven years China will have replaced the US as
the worlds largest aviation market.
LCCs as global leader contenders
LCCs are playing a major role in all markets, according to OAG. While
their rapid growth makes them contenders to be global leaders, they
have the wrong fleets to currently develop long-haul networks. OAG
reports that the convergence between legacy and low-cost business
models and common branding alongside joint ventures, such as
AirAsia uses, might be the means to take this forward.
The future of alliances
According to OAG, while airline alliances have served a purpose, the
merits of being aligned to a few major carrier brands can become
outweighed by the need to be more flexible and to make strategic
partnerships. Korean Air, a SkyTeam member, announced this year it
will be code-sharing with American, a key member of Oneworld,
highlighting how alliance members will still make decisions in their own
best interests.

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The US carriers, in highlighting the ASK growth of the Gulf carriers,
have drawn attention to airlines with bases a long way off, yet still in
a position to compete for traffic. Turkish Airlines, which ranks 11th in
the world for ASKs and ahead of British Airways in terms of seat
capacity, is an airline which has developed from a niche carrier to a full
service provider; with the benefit of a large domestic market and
strategically placed hubs, it will continue to grow.
Future global players
OAGs report concludes that China, Indonesia and Turkey might be the
markets where three globally dominant airlines are based in ten years
time, benefitting as they do from large domestic markets, growing
economies and advantageous geographic position.
John Grant, OAGs EVP Data and Market Intelligence, will be speaking
on Day 2 of CAPAs Americas Aviation Summit in Las Vegas, in the
session: The Strategy behind Airline Network Planning.

http://gulfnews.com

Donkey at Cairo airport causes media stir

Cairo: To some commentators the sight of a donkey roaming
near Cairo airport was a humorous occasion. To others, it was
a serious security breach at Egypts main airport.
A video showing the animal walking unguided in the car park
of the airports upscale Terminal 3 went viral, generating
sardonic remarks. In the footage, cleaners are seen chasing
the animal.
The incident caught the attention of the nations most serious
talk shows on Monday night. I dont know how the donkey
reached the airport where there are security checkpoints, said
celebrated TV host Lamees Al Hadidi. Maybe he was waiting
to leave the country, she added sarcastically on her show
This is the Capital on private broadcaster CBC. Generally
speaking, this is a scene you wouldnt see anywhere but in
Egypt, she said on a serious note.
Ahmad Mousa, another famed TV host, had a more serious
take. This is a sheer shame. Who is responsible for this? he
asked. The donkey could have been loaded with explosives.
Daesh uses such things in carrying out explosions, he added
on the private satellite TV station Sada Al Balad.
Egypt has in recent months seen a surge of attacks targeting
civil facilities and blamed on Islamist militants.
It was not clear how the animal had reached the perimeter of
the airport on the outskirts of the Egyptian capital. A
spokeswoman for Cairo airport, Hanan Abdul Monem, said
that authorities had ordered an urgent investigation into the
incident.

http://atwonline.com

US carriers insist they only want talks on Gulf

competition
Senior executives from two of the three major US carriers
involved in the growing dispute over alleged unfair competition
from the Gulf carriers said Tuesday they are simply asking for
government-to-government consultations on the US Open
Skies agreements with the United Arab Emirates (UAE) and
Qatar.
Speaking as panelists at the CAPA Americas Aviation Summit
in Las Vegas April 28, American Airlines SVP-government
affairs Will Ris and Delta Air Lines VP & chief legal officer Ben
Hirst said that both of the Open Skies agreements include a
clause that allows either side to request government-togovernment consultations for any reason related to the
agreement. They said they want those consultations to
happen soon, but are not against the Gulf carriers or against
competition.
There was no representative from the US third airlineUnited
Airlinesthat joined AA and Delta in commissioning a white
paper report alleging that Emirates Airline, Etihad Airways and
Qatar Airways have received a total of more than $40 billion in
subsidies from their state owners that contravene the fair
competition conditions of the Open Skies agreements.

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COMMENTARY: US white paper on Gulf carriers distorts my
academic report
This is not a campaign. From the American Airlines point of

view, this is not about airlines at all. Its about US government

trade policy. When you have an airline receiving massive
amounts of government money and unfettered access to the
US, we should do something about that, Ris said.
Hirst said Delta was being foreclosed from serving the India
market because of Gulf carrier capacity there. We are not
serving those markets because of subsidized flow from the
Gulf, he said.
Etihad general counsel & company secretary Jim Callaghan
was the only panel representative from the Gulf carriers. He
said he had seen the exact same playbook before when he
was formerly at Irish low-cost carrier Ryanair and European
majors threw the kitchen sink at us.
Callaghan said, The three largest carriers not just in the US
but also in the world, and which also control the three clubs
the global alliancesthat control 50% of the worlds traffic, are
trying to shut the door on any competition or potential
competition. Thats whats going on here.

http://www.breakingtravelnews.com

British Airways to go daily on Singapore A380 flight

British Airways has announced that the A380 will make a daily
appearance on the Heathrow to Singapore route, from winter this
year.
The airline already operates a double-daily flight from London to
Singapore and the A380 flies three times a week on the route.
This will increase to a daily service from December 14th, 2015.
The winter A380 BA11 service will depart from Heathrow at 19:10
and the BA12 service will depart from Singapore Changi airport at
23:20, each day.
In addition, the airline also announced that it will be opening its
newly refurbished lounge at Changi Airport Terminal 1 in summer
2015.
ADVERTISEMENT
Stephen Humphreys, British Airways head of UK&I sales, said:
Scheduling the A380 on the Singapore route on a daily basis
signals our commitment to the route and the region.
It will allow us to fly even more customers from the UK to the Far
East in style.
Gwyneth Paltrow famously launched the A380 on the British
Airways route to Singapore in October 2014.
The British Airways aircraft boasts four sophisticated cabins and
469 seats.
The airline currently has nine super jumbos in its fleet flying to
Johannesburg, Hong Kong, Singapore, Washington and red
carpet route, Los Angeles.
The aircraft will also commence flights to Miami from October 25
and British Airways tenth

http://www.atn.aero

Turkish Airlines 10th flight destination in the Italy is

Bari
With existing services to Rome, Venice, Milan, Turin, Naples,
Bologna, Genoa, Catania and Pisa, Turkish Airlines adds
flights to Bari as its 10th destination in Italy. Beginning from
today, Bari flights will be operated 4 times per week on
Tuesdays, Wednesday Fridays and Sundays in both
directions.
Round trip fares are available from Istanbul to the second
most important economic Centre of mainland Southern Italy
after Naples, Bari starting at 99 Euros (including taxes and
fees). Additionally, for the first 6 months of operation to the
new destinations, there is a special offer for the Miles&Smiles
members with a 25% reduction in the miles needed to redeem
either award tickets or upgrades.