ETOPS in action: Perth – Mauritius

I thought a recent flight from Perth to Mauritius provided a great basis to highlight the impact of ETOPS restrictions on airline operations in the Southern Hemisphere.

There is no trans-polar or oceanic route in the Northern Hemisphere that requires more than ETOPS 240 approval (four hours from flying time from a suitable airfield), and more than 90% of routes require no more than ETOPS 180.

ETOPS speed schedules are designed assuming a MTOW at departure with highest gross weight and enroute weather conditions at critical points enroute determining diversion speed and endurance. Speeds vary by operator, and other factors including carriage of additional passenger oxygen allowing operations at an intermediate level above FL140 are also taken into account.

Down south ETOPS restrictions have arguably a much greater operational impact as this Perth – Mauritius sector highlights.

Air Mauritius’ previous A340 operation to Australia tracked along a flight path relatively close to the great circle routing (see map below). Now operated by its A330-200 fleet – approved for ETOPS 180 (for arguments sake roughly 1,000nm) – the aircraft must track significantly to the north of the great circle route. Flying north-west after departing Perth to remain within diversion flying time of Learmonth, the Cocos Islands and then Diego Garcia, before tracking to the south-west for Mauritius.

The result is a longer flight time – the previous 8:30 minute block time westbound, is now an 8:30 minute flight time – approximately 45 minutes to one hour longer airborne.

The associated impact on flight economics is substantial as Virgin Australia learnt the hard way in its brief foray into Boeing 777-300ER operations between Melbourne and Johannesburg. To remain with ETOPS 180 restrictions the 777 operated a more northerly, inefficient routing – maps of westbound and eastbound flights – resulting in a flight time 1:15 longer than Qantas’ 14 hour Sydney – Johannesburg service.

The lightest grey shade on the map indicates ETOPS 180 limits. If Air Mauritius were to gain approval for ETOPS 207 or even 240 it would allow a more efficient southerly routing. But would you really be comfortable knowing you are that far from land on the off chance your Royce stops Rolling?

 

 

 

Virgin Australia: A decade of international services.

Today marks ten years since Virgin Australia (Blue at the time) launched it’s first international flight, DJ007 between Christchurch and Brisbane on January 29, 2004.

Across the Tasman, Virgin’s competitive bullseye wasn’t locked squarely on the Qantas Group, it was also taking on a newly relaunched and reinvigorated Air New Zealand in its highest yielding market place. Pacific Blue grew quickly, leveraging the opportunity to develop reliable low-cost air services to the remote, developing islands of the Pacific, an area of the world that couldn’t support the high-cost operation of either national carrier.

Virgin’s long-haul ambitions came to fruition in 2009 – the worst time to launch an international airline, but it had little choice – with the launch of V Australia services to the US.

Continue reading “Virgin Australia: A decade of international services.” »

Carry-on’s top 13 of 2013.

2013 was exceptional proof that aviation is far from sclerotic. Beginning with continued fixation on the 787 as Boeing’s amour propre was tested by further incidents and a grounding. Eyes turned skyward for the equal greatest number of first flights in history. Rarely appreciating the continued challenging conditions airlines and the industry faces, politicians continued to provide opaque interference, compounding an already fractured dichotomy. There was awe as the world’s largest airline was replaced with with an even larger carrier, rosy profit turnarounds turned into sickening loss projections, and a renewed geopolitical rivalry in everything from aerospace manufacturing to air traffic rights. Here’s our 13 of 2013:

1. The 787.

The most exciting new aircraft in years became known for one thing in 2013: fire. In January the worldwide fleet was grounded – only the second aircraft since the DC-10 to be grounded in this way – following a series of electrical faults and battery fires caused by thermal runaway. The batteries were pulled out, boxed, and additional venting at a cost of approximately $500,000 per aircraft. Back in the air confidence has grown, the 787-9 is now flying and there has only been a small fiery issue relating to a locator beacon. Image: Richard Deakin.

 

2. CSeries flies.

110 years later Bombardier did it again for the very first time. This time with the first completely new narrow-body design since the A320 family.

 

3. ICAO’s emissions agreement.

ICAO’s member states reached a landmark multilateral agreement to develop a market-based measure that would reduce carbon emissions by 2020. The agreement will allow countries and airlines to operate under a single global standard rather than competing carbon regimes. Governments’ individual plans will be approved at the next assembly in 2016.

 

 

 

 

Continue reading “Carry-on’s top 13 of 2013.” »

Results day 2: Virgin Australia

FY13 proved a much darker year for Virgin Australia.

The last of the regions’ airlines to post Financial Year ’13 results was Virgin Australia.  The Virgin Australia Group posted a statutory loss of $98 million dollars, on slight 2.5 per cent increase in revenue to $4.02 billion.

Continue reading “Results day 2: Virgin Australia” »

While distracted by partnerships, Qantas sneakily changes their traffic stat reports.

Turning away from the giddy heights of Qantas’ new global focus for just a few moments, and back home it seems Qantas’ is a bit sore.

Qantas has been publishing monthly yield and traffic statistics for all Group business since 2000. However, yesterday while everyone was distracted by Qantas-Emirates announcement speculation, the airline released its July traffic statistics, and for the first time published only qualitative, not quantitative yield data.

Why is this important? Yield is the amount of profit an airline makes per passenger after all costs have been attributed for.

Australian Domestic yields (comprising Qantas Domestic, QantasLink and Jetstar Domestic) were lower than the prior period (July ’11), and Qantas mainline Domestic passenger numbers were also down 2.6% with seat factor down 4.3% to 77.7%. A fare war looms large as all four domestic Australian carriers increase capacity in the market, and as competition between Qantas and a ‘game on’ Virgin Australia escalates both carriers profitability will suffer.

Qantas says “going forward, yield commentary in the monthly traffic statistics will be qualitative in line with international and domestic peers”, the airline is playing coy. Competition in the Australian domestic market has not been this intense since prior to the collapse of Ansett.

Is Emirates or Etihad one step closer to the Pacific?

Will a unified Qantas and Emirates partner with Air Pacific or will Etihad and Virgin Australia move in?

The ambitions of Emirates and Etihad were given a boost this week, with Fiji and the UAE signing their first bilateral air service agreement. Apparently, Emirates had requested an open skies agreement, but the Fijian government declined reasoning that they want the national carrier Air Pacific/Fiji Airways to first become ‘stronger’.

The Fijian government is seeking an ‘airline’ partnership, though what form this will take is still unclear. The new Fijian ambassador to the UAE, Mr Robin Nair confirming “we have spoken with Emirates and are also in talks with Etihad, they are very close to circumnavigating the globe”.

Mr Nair also noted “Fiji needs more airlines to bring tourists and business people, especially from newer markets, such as from the Middle East and Europe.”

Would it be viable? Perhaps, but geographic and economic factors often stymie carriers in there attempts to viably serve the South Pacific Island Countries.

A significant proportion of international traffic to Fiji already transfers through Australia, and the market is also substantially tourism based with little high-yield business traffic. During Virgin Australia’s transformation the carrier’s Boeing 777 services to Fiji were cut, John Borghetti reasoning “to be operating a three class widebody (B777) service to leisure markets like Fiji has to be a no-no”.

The South Pacific suffers from separation anxiety. A long way most of the world, at 14,000km a direct Abu Dhabi (AUH)/Dubai (DXB) – Nadi (NAN) service pushes the economical range limits of any aircraft except the Airbus A340-500 or 777-200LR. In addition, Emirates Chairman Tim Clark maintains it won’t operate to a location unless it can operate daily services.

But would there be enough traffic to sustain daily services? Tellingly, Air Pacific only operates to Auckland, Brisbane, and Sydney at a frequency of daily or higher. Even with the power of Emirates and Etihad’s back-end network feed, it may be difficult to fill an A340 or B777-200LR daily,  let alone a 400-seat Boeing 777-300ER.

Emirates serve the largely tourist markets using 2-class 278 seat A330s operating direct from Dubai to Cairns,
piggybacking to Nadi, or to Nadi via Singapore. Image: Peter Russel

Emirates will inevitably operate to Cairns, and could piggyback NAN services through the city. Its current second daily Brisbane service operating DXB – Singapore (SIN) – Brisbane (BNE) could have a Nadi leg added on. Alternatively, services could bypass Australia altogether, operating via SIN to collect connecting intra-Asian traffic feed.

Air Pacific will rebrand as Fiji Airways in 2013 with new Airbus A330s replacing its three Boeing 747-400s.

In reality how would a Fijian Government ‘airline partnership’ take? Rumour is Emirates is close to announcing a comprehensive partnership with Qantas (perhaps even this week), but although Qantas and Air Pacific continue to code share, the carriers are no longer friends following a bitter political dispute over board executive influence. This may make a code share arrangement with a relaunched Fiji Airways difficult.

Etihad and Virgin Australia could also prove suitable suitors. Rather than operate its own aircraft to Fiji, Etihad could leverage its partnership with Virgin Australia with passengers connecting to Virgin services in Brisbane or Sydney. A relationship with Virgin could also be a boon for Fiji Airways. Coordination of services and traffic feed providing the relaunched carrier with better returns, and free aircraft to launch services to destinations outside the region. Perhaps even allowing Fiji Airways to return to Singapore, with services passengers connecting to onward Etihad services.

Will a middle eastern carrier serve the South Pacific? Definitely. It’s now just a matter of how and when than if.

Game on as Virgin Australia’s profit soars.

Year two of its three-year game change programme, and a transformed Virgin Australia has shown it is the antithesis of Qantas. The airline today posted an after tax profit of $22.8 million, and a full year underlying profit before tax of $82.5 million, an improvement of $149.1 million from the last financial year.

Virgin’s results are admirable given a continued tough operating environment, a loss from fuel hedging and the need to absorb costs associated with the transformation.

The airline has experienced strong revenue growth over the year up 19.8% to a total of $3.9 billion.

Two years into its game change programme and a year ahead of schedule Virgin Australia has achieved a 20 per cent share of the Australian corporate and government market. High yield revenue is up 113 per cent and John Borghetti believes the airline has achieved the “tipping point in realising a new competitive norm in Australia”.

CEO John Borghetti attributes the result to the “tireless dedication of our people, their drive to make a real difference for customers, and their unwavering determination to deliver on strategy”.

The Game Change transformation may be complete, but the game is only just starting for Virgin.

Starting October, Virgin will roll out its WiFi streaming IFE product. The system developed by Lufthansa Systems’ will stream content directly to Samsung Android tablets. From early 2013, the airline will implement a new Sabre reservations system allowing the airline to use a single VA airline designator for all services.

Virgin is reaping the benefits of being the world’s largest virtual network carrier. International operations are now extremely profitable, “the best part is we did this without buying one aircraft” says Borghetti. Codeshare and interline revenue from its international partners is up 158 per cent. New international destinations and virtual network partners are also on the horizon as Virgin targets an additional $150 million in revenue from its virtual networks by 2015.

The Airbus A330-200 fleet will also see international services sooner rather than later. Given the benefits of its virtual network, Virgin’s own international network will continue grow in an extensive but complementary fashion.

One aircraft will be delivered in 2013 and by June 2016 the airline will have eight of the type. Its widebody transcontinental services require five aircraft, and the remaining three will likely be used to complement Etihad’s eventual Perth to Abu Dhabi services, and launch services from the east coast to new destinations in Asia.

Virgin Australia is currently evaluating both the Airbus A350 or Boeing 787 and will place an order for unspecified number by June 2013 for delivery from 2017. Borghetti noting “its a holistic view of our long-haul and medium-haul operations” as the 777s will need to be replaced around that time. It also provides Virgin the opportunity to mature its own international network and presence to better leverage the capability of its next generation narrowbody Boeing 737 MAX 8 and widebody aircraft for expansion post 2017.

Closing his press conference, John Borghetti took a jab at the competition, “I’ve been around a long time, probably a lot longer than some would like”. With everything at Virgin looking up, he’s going to be around a lot longer yet.

Virgin Australia’s full results presentation to the ASX can be found here and breakdown here.

Perth Airport, best in airport design? Unlikely.

Part 1

Who remembers the glamour era of air travel when travel was fabulous and happened on a 747 or Concorde? People living, visiting and doing business in Perth are reminded everyday as they travel through Perth Airport’s International Terminal, circa 1984.

Undertaking its first substantial redevelopment since 1984, the Airport has now made available artists’ impressions, of the expected interior of the completed international terminal and Virgin Australia’s new domestic pier at the airport. Some analysts have even labelled the redevelopment as providing Western Australia with the ‘best in airport design’.

Original plans promised a “world-class” 3 pier, 40-gate redevelopment that would be “one of the best in Asia” akin to Hong Kong or Seoul’s Incheon. These were subsequently reduced to:

  • a new domestic pier;
  • the construction of Terminal WA for intrastate services;
  • one upgraded and one new international gate;
  • expanded international customs and security facilities;

All built to unexceptional IATA service C standard as extensions to the substandard circa 1984 terminal. Best in Airport design indeed.

Overview of T1 redevelopment. International terminal left, domestic pier centre, terminal WA right. Image: Perth Airport

Continue reading “Perth Airport, best in airport design? Unlikely.” »

Qantas, the little airline that couldn’t.

When I was young I wanted to be a Qantas pilot. Growing up I was granted the privileged opportunity of being invited into the cockpit for landing in various Qantas aircraft at various airports around Australia. The dedication and enthusiasm with which staff undertook their jobs was an inspiration to me.

20 years later, and I don’t know how I feel about Qantas. Today’s Qantas just goes through the motions. The timid annual result announcement is a reflection of the diminishing presence Qantas is playing in the lives of Australians. It is also a reinforcement of the distinct strategy which Qantas has chosen to follow.

The annual results also show a distinct change in Qantas rhetoric. Gone are the battle cries of a “65% line in the sand”, replaced by “The Group aims to maintain a profit-maximising 65 per cent domestic market share”. Brave faced Qantas executives are worried. Continue reading “Qantas, the little airline that couldn’t.” »

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