Monthly Newsletter issued by Dubai Civil Aviation Authority
www.viadubaionline.com
Issue 16 September 2014
Ready for Take Off
Inside DCAA Sawaheen Team 4 rewards staff members
UAE in Focus UAE telecom sector 10 earns AED29.18 billion Emirates, GE signs $13 11 billion maintenance deal
New visa rules to 13 boost cruise tourism
Middle East
From Cambodia to Costa Rica and India to Zimbabwe, several new airlines are taking to the skies
DCAA records 28 % increase in Emiratisation in less than six years
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Change the airport experience
400 Kuwaitis to quit for 14 airline privatization
International Airlines profiting from 16 rising travel demand
Opinion
17 Keflavik airport undergoes transformation
Aerospace: A flagship industry for Canada
Flashback The ‘air’ Silk Route 26
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Hamad Al Janahi
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18
Marc Parent
In Focus 20
Strengthening the fundamentals of air hub
The way forward in a global environment 18
Tony Tyler
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Cargo & Logistics 22
Lee Seow Hiang
The new runway investment
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Tim Johnson
Technology 24
Message from the President In 2007, the functions of the Department of Civil Aviation were restructured. Accordingly, the Dubai Civil Aviation Authority (DCAA) was established as a regulatory body, by a decree of H.H. Sheikh Mohammed Bin Rashid AlMaktoum, Ruler of Dubai, on proclamation of law No. 21 of 2007, as amended by law No. 19 of 2010, to undertake development of Air Transport Industry in the Emirate of Dubai and to oversee all aviation-related activities.
Via Dubai is the official bilingual monthly newsletter of DCAA, designed to highlight the initiatives and developments in the aviation industry and act as a knowledge-sharing platform for all the stakeholders and aviation professionals.
General Supervision Mohammed Abdulla Ahli Coordinator Hanan Al Mazimi Executive Editor Mohammed Abdul Mannan Creative Manager Mohammed Akram E-mail: viadubai@naddalshiba.com Legal Disclaimer The views expressed in the articles are of the writers and not necessarily belong to DCAA. We take all reasonable steps to keep the information current and accurate, but errors can occur. The information is therefore provided as is, with no guarantee of accuracy, completeness or timeliness. The DCAA or Via Dubai does not warrant or assume any legal liability or responsibility for the quality, accuracy, completeness, legality, reliability or usefulness of any information. Via Dubai does not endorse or recommend any article, product, service or information mentioned in the newsletter. Any perceived slight of any person or organisation is completely unintentional.
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Tel +971 4 25 66 707 Fax +971 4 25 66 704 info@naddalshiba.com www.naddalshiba.com
Brilliant achievement
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he aviation sector in the Emirate of Dubai has recently witnessed a significant strategic infrastructure development –the upgradation of Dubai International Airport’s two runways. The project has been acknowledged as the biggest specialized refurbishment of airport runways in the modern history of civil aviation. Dubai International Airport, which was the second busiest airport in the world for international passengers in 2013, is now ready to reap the benefits of this major investment and remarkable achievement. We are working with confidence to accomplish our goal of welcoming 70 million passengers by the end of year 2014. All performance indicators of Dubai International Airport strongly suggest that we will be able to achieve our objective. The airport has been receiving five million passengers every month since the past 18 consecutive months, a strong indicator of the growing importance of Dubai International on the global aviation map as a most soughtafter air connectivity hub for millions of passengers from across the world. The title of the ‘Biggest Airport in the World’ will not be a gift considering the intense competition in the global aviation sector.
Ahmed bin Saeed Al Maktoum This achievement would not have been possible without the unfaltering commitment and hard work of all the stakeholders, including comprehensive studies, effective planning and follow-up to attain our current position and towards conquering our targets. That is why it was extremely important for us to upgrade the runways to meet the growing demands. The refurbishment will help us a great deal in absorbing the expected increase in local and international aircraft movements, which are expected to jump to 1.2 million movements by 2020 in the UAE. In fact, the benefits from the upgradation of Dubai International runways are going to be many in the long term. Dubai’s reputation as the global aviation hub is strongly linked to its ability to continuously improving the safety standards. This could not have achieved without upgrading the runways as part of the larger development plans in works at the Dubai International. I would like to take this opportunity to express my deep appreciation of the efforts of all those who participated in accomplishing this major task, which added another feather to our cap of achievements. It proves to the world that Dubai does what it says and says what it can do – walk the talk.
Printed by Printwell Dubai
Our Vision Dubai Civil Aviation Authority is driven by the vision of Dubai to become the global Aviation Capital contributing to prosperity and enabling growth for Dubai.
Our Mission Dubai Civil Aviation Authority is committed to support the aviation sector in:
E-mail: dcaa@dcaa.gov.ae Website: www.dcaa.gov.ae Tel: (971) 4 216 2009 Fax: (971) 4 224 4502 P.O.BOX 49888 Dubai, United Arab Emirates
u Capturing the full value potential as a global passenger, tourism, trade, cargo and logistic hub u Providing the capacity, connectivity and leveraging existing assets to meet the aviation sector and economic growth plans of Dubai u Ensuring sustainable and responsible growth committed to safety, health, environment and security u Providing and creating customer-focused services to gain competitive advantage from innovation, knowledge and efficiency u Building and retaining capabilities, for the aviation sector, while offering career opportunities for Nationals u Ensuring a transparent, effective and commercially balanced regulatory framework that reflects the interests of the aviation industry, Dubai and the UAE u Providing efficient and cost-effective services to the aviation sector
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Message
from the Director General
DCAA employees donates for UAE Water Aid campaign Mohammed Abdulla Ahli
Runway refurbishment success
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he movement of aircraft through Dubai International Airport has been increasing steadily providing more connectivity through Emirates, flydubai and other international airlines which required expansion of infrastructure to facilitate the current requirements. The two runways that the has been serving one of the world’s busiest airports over the years needed refurbishment to cope up with the increasing movements of aircraft which included the super jumbos like Airbus A380 aircraft. Dubai International being an aviation hub, the runways refurbishment became a challenge with its flight operations place 24/7. This was not an easy task. It required to safeguard service levels and optimize capacity while the work was in progress whilst scheduled passenger flights were reduced and all freighter, charter and general aviation flights were moved to Al Maktoum International Airport in Dubai World Central (DWC). A considerable amount of advanced planning and coordination between all stakeholders were put in to minimize the impact of the 80-day closure. His Highness Sheikh Ahmed bin Saeed Al Maktoum formed a committee which laid a perfect programme for the successful completion of the project in record time. The upgraded runways would go a long way in handling the air traffic which has been consistently growing between five to seven per cent annually, higher than the global average of 3.5 per cent. The biggest runway refurbishment programme did not hamper the growth despite around a quarter of flights had to be reduced during this time June. Figures show a 6.2 per cent rise in passengers over the first half of 2014 – that’s almost 35 million passengers. Despite the refurbishment project, the airport was able to record its 18th consecutive month of more than five million passengers. The project was carried out by the Dubai Aviation Engineering Projects (DAEP) with the other key players being Dubai Airports and Dubai Civil Aviation Authority. Inputs from DCAA and DANS were crucial in the planning of the whole project. The runways are ready to meet an increased capacity for High Speed Turnoff (HST). Busy airports typically construct high-speed or rapid-exit taxiways.For flight operations, Dubai International has four peak hours and an average of 33 arrivals is handled in an hour. DANS aims to increase it to 45 by the year 2016. The UAE airspace system currently handles approximately 600,000 movements a year. Dubai is projected to handle 660,000 movements by 2020.
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September 2014
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mployees of Dubai Civil Aviation Authority (DCAA), during the Holy Month of Ramadan, have enthusiastically participated in the UAE Water Aid campaign designed to provide safe drinking water to five million people in underdeveloped and economically-backward countries. The UAE Water Aid campaign raised more than AED140 million surpassing its own targeted amount of money needed for the humanitarian initiative. The money raised for the UAE Water Aid campaign from donations from government departments, companies and individuals is enough to help 5.6 million people around the world gain access to potable water, according to the Organizing Committee of UAE Water Aid. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, made a personal donation of AED25 million to the UAE Water Aid campaign, on behalf of the citizens of the UAE. The Water Aid Campaign was launched by His Highness Sheikh Mohammed on the first day of the Holy Month of Ramadan to provide access to fresh drinking water for people around the world who suffer from shortage of potable water. The World Health Organization (WHO) figures show that a child dies every 21 seconds from a water-related illness and 9,863 people die every day from thirst and water-related diseases.
Weekly competitions during Ramadan
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awaheen Team has organized a campaign titled ‘Our working times is different in the Month of Blessings’. The campaign included weekly competitions, each sponsored by a different company or organization. The campaign evoked strong participation from employees from the four government organisations forming the Sawaheen Team –Dubai Police, Dubai Customs, DCAA and Dubai Airports. Emails in English and Arabic languages highlighting the cultural and religious topics were sent out to the employees.
Inside DCAA
Sawaheen Team’s activities during Ramadan
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uring the Ramadan Iftar party hosted at the InterContinental Hotel Dubai Festival City, Sawaheen Team, which is comprised of representatives from four government departments – Dubai Police, Dubai Customs, DCAA and Dubai Airports – collected donations from the participants for the ‘Dress One Million Needy Children’ campaign. Launched by His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of
Dubai, the initiative is aimed to provide dress to one million underprivileged children from around the world, especially from underdeveloped and conflict-affected countries. The campaign coincided with the ninth death anniversary of the UAE FounderPresident Sheikh Zayed bin Sultan Al Nahyan and Emirati Humanitarian Work Day, an annual event in memory of Sheikh Zayed. The campaign covered 46 countries where children were provided with dresses.
DCAA initiative to mark Sheikh Zayed’s death anniversary
T Sawaheen Team rewards staff members
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he Ramadan Iftar party, hosted at the InterContinental Hotel Dubai Festival City by Sawaheen Team, which is comprised of representatives from four government departments Dubai Police, Dubai Customs, DCAA and Dubai Airports, was utilized to
he Dubai Civil Aviation Authority (DCAA), in association with Beit Al Khair charity organisation, launched an Ediyah initiative to mark the 10th death anniversary of Sheikh Zayed bin Sultan Al Nahyan, UAE’s Founder-President, and the UAE Humanitarian Work Day, as announced by the UAE Cabinet, on
the 19th day of Holy Month of Ramadan. Employees were provided with bags to collect Eid items for different age categories including clothes, shoes and other personal accessories. The initiative was welcomed by the DCAA employees keen on contributing to the programme designed to make the needy people happy.
reward the employees and police officials who are tasked with security at the Dubai International Airport. A number of competitions and raffle draws were conducted with the winners getting AED300 vouchers in addition to perfumes.
September 2014
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Exclusive
DCAA records 28 % increase in Emiratisation in less than six years
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he Dubai Civil Aviation Authority (DCAA) has been in the forefront of attracting and retaining qualified and talented UAE nationals as part of the Emiratisation programme in the civil aviation domain in the Emirate of Dubai.
In an exclusive interview with Via Dubai, Hamad Al Janahi, Head of Human Resources Section at DCAA, said that Emiratisation programme has been progressing well at the Authority with 28 per cent increase in a span of less than six years. The Emiratisation has surged from 42 per cent in 2008 to 70 per cent in 2014. He said the Emiratisation in higher management levels has reached 100 per cent while it stands at 77 per cent at the middle management levels. The number of DCAA employees has increased by 18 per cent since the opening of Al Maktoum International Airport in Dubai World Central (DWC). He said that the continuous expansion of the aviation industry in Dubai and the winning of the rights by the UAE to host Expo 2020 in Dubai have created strong demand for specialized and skilled professionals in the aviation domain.
Excerpts from the interview: How is the Emiratisation programme progressing in DCAA? Since the inception of the DCAA in 2008, we have focused our attention on achieving a number of important goals related to human resources, the chief being the Emiratisation which gained paramount importance with His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, declaring 2013 as the Year of Emiratisation. A quick look at the development of human resources in DCAA reveals that Emiratisation goes hand in hand with the continuous increase in the number of DCAA employees. For example, the number of DCAA employees in 2008 was 36, including 15 UAE nationals, which is 42 per cent, compared with 21 expatriates or 58 per cent. In 2009, the number of DCAA employees rose to 62, of which 29 were Emiratis or 47 per cent, compared with 33 expatriates or 53
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September 2014
Number of DCAA employees jumped 15% since the opening of Al Maktoum International Airport per cent. The year 2010 witnessed a dramatic turn when the number of UAE national employees for the first time exceeded the number of expatriate employees. That year, out of the total 74 employees, 40 were Emiratis or 54 per cent, compared with 34 expatriates or 46 per cent. The trend got further boost in 2013 when the number of UAE national employees numbered 61 or 64 per cent as against 34 expatriates or 35 per cent. In 2014, the number of DCAA employees rose to a total of 105, of which 73 were Emiratis or 70 per cent compared with 32 expatriates or 30 per cent. In order words, the Emiratisation jumped from 42 per cent in 2008 to 70 per cent in 2014 resulting in a net increase of 28 per cent in Emiratisaiton programme in less than six years. When we talk about Emiratisation at DCAA, we should distinguish between four levels of Emiratisation. The first is related to higher management level where it has reached 100 per cent while it stands at 77 per cent in middle management levels which encompasses the second and the third line of leaders. Currently, we focus on raising the Emiratisation ratio in this category. This increase in Emarati staff is also a reflection of the increase in the availability of professional and technically qualified UAE Nationals from UAE Universities and Educational Institutions, and awareness,
patriotism among the UAE Nationals for career in Government Organizations. Is Emiratisation programme all about replacement of expatriates with the UAE nationals? Replacement of expatriate employees with the UAE nationals should be viewed against a number of important factors, the chief among them are efficiency, cost and sustainability. These factors gain paramount importance in the sector as complicated and sensitive as the civil aviation. When we started Emiratisation at DCAA, our efforts were based upon extensive studies that we carried out in cooperation with other departments and sectors. We opted to start with internal Emiratisation which means hiring a new employee to develop in his professional career during a five year period and at the same time putting him/her to undergo extensive training courses that go parallel with the his occupational path. When we talk about Emiratisaiton in the aviation sector, we should bear in mind a number of factors that affect the Emiratisation like the huge expansion in the aviation industry in the UAE as a whole and Dubai in particular, especially after the UAE won the rights to host the Expo 2020 in Dubai. We should also note that the starting of operations of Al Maktoum International Airport in DWC has also impacted the Emiratisation plans. In short, all these factors helped create a huge demand for skilled professionals in the aviation sector. We are trying to cope up with the demand and fill the needs with as many as UAE nationals as possible. The number of DCAA employees has increased by 15 per cent since the start of operations of Al Maktoum International Airport in DWC which opened in 2010 with cargo operations and last year started passenger operations. It’s not all about replacing expatriates, but it’s about hiring and preparing (as much
Exclusive
DCAA achieves 100 % Emiratisation in higher management positions 77 % at middle management and 70 % overall as possible) qualified UAE nationals who can meet the increasing demands in the fast growing civil aviation sector, and to give better chances to UAE Nationals in Government Sector. The expatriates will be a key factor to provide on the job training in qualifying these UAE nationals, to occupy the positions, to be the best workforce in future. How DCAA does achieve occupational stability? The Human Resources Section at DCAA has devised an occupational development programme which let every employee know what exactly are the paths he/she has to cross from the current position to climb up career ladder. They know what conditions and achievements are needed to for their career development within the DCAA. For example, if a person has been hired as an officer, we let him/her know that he/she can become a Senior officer through achieving the occupational performance levels attached to his/her position or by gaining educational qualifications or by exceeding the achievement levels attached to his/ her job description. It goes without saying that the occupational performance is one of the main indicators we use to define the occupational growth path of the employees. Is your role limited to providing the human factor? At the Human Resources Section, we perform multiple roles. We work as an early warning system to guide our higher management about the weakness and strategic missteps. Today, without any doubts, the Human Resources is a strategic partner to other departments and our role is not limited to providing just human factor but also provide incentive, benefits and training plans to employ and retain the skills pool we have. On the other hand, we are keen about attracting best skills that contribute towards outstanding performance for the DCAA and to keep training them to reach higher levels. This cannot be done without motivating benefits and good work environment.
In short, we have a goal of keeping the annual resignation of employees at less than five per cent. Every employee who resign is subjected to face to face exit interview to learn about the factors and reasons behind his/her decision to quit and his/her inputs about the working environment. As previously explained, to retain the employees we have a package of programmes which includes honouring ceremony for those who have spent more than 10 years with the DCAA. We also have another programme to encourage employees to make financial savings through a programme conducted in cooperation with National Bonds. In general, we study all the factors that might affect the human factor including the cost of living, house rents, children’s education fees and we are keen about ensuring that our salaries are very competitive. Currently, we are preparing a study about this issue and we will submit it to the higher management after finalizing our recommendations and suggesting available options. In addition, we are also playing a consultancy role in cooperation with the other departments to plan out for future replacement for those who reach the aged of superannuation or retirement. This task requires us to prepare leaders ready to replace them when time comes. For example, we are now preparing 15 employees from the second line which include directors and assistant heads of sections to replace leaders in the first line. We are also preparing 20 employees from the third line which includes executives and
specialists to replace their counterparts in the second line. Thus Human resources role works as an important Value Addition to DCAA. Why human resources have been assuming an increasing importance in today’s business world? In the past, human resources sections or departments used to be treated with the way an organization used to deal with the stores department- the only difference was the inventory used to be people and not goods. This age-old thinking has now given way to a new approach to human resources due to increasing competition to excel in whatever the business and the advancement in the management sciences which has proved that human factor is the most important on the list of factors that contribute to productivity. It is not only capable of achieving growth but also capable of drawing the line between the success and failure. In the past, we used to talk about preparing the first line of leadership. After some time, we started talking about preparing the second line of leadership and now these days we are talking about preparing the third and fourth line of leadership in an organization. We have to bear in mind that human resources cycle will dictate the movement of the human resources continuously from the bottom to the top and if those people are not ready and trained to replace the outgoing employees there will always be a gap in the organizational structure that will affect the ability of the organization to survive and continue. September 2014
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Cover Story
Ready for Take Off
From Cambodia to Costa Rica and India to Zimbabwe, several new airlines are taking to the skies
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ccording to International Air Transport Association (IATA), last year the airline industry carried more than three billion passengers on nearly 100,000 flights per day. The association, which represents 244 member airlines accounting for 84 per cent of global air traffic, says new airlines which became its members last year were Corendon Airlines, Uzbekistan Airways, Germania, BH AIR and Air Uganda.
“Over 3.3 billion people will board aircraft this year. We are seeing healthy demand for air traffic to support and help sustain the pick-up in global economic activity,” says Tony Tyler, IATA’s Director General and CEO. The industry is expected to generate $5.42 from every departing passenger on an average, a rather soft number for a high-risk business. IATA predicts airlines will carry 64 per cent more passengers in 2014 than they did in 2004. The airline industry exists in an intensely competitive market. Passenger demand is “robust” and expected to rise a whopping 31 per cent until the year 2017. In a report, leading global consultancy firm, PwC, says the global airline industry is set to face more aggressive competi6
September 2014
tion in the coming year, charged by expansion of the low-cost carrier (LCC) business model and a rise in joint ventures (JVs) to increase international flights. In the coming months, the airline industry in several countries including the US, India and China will see new entrants vying for business. Over the last few years, the aviation industry in the US – the world’s biggest aviation market - has seen several consolidations. With major and legacy airlines of the US joining forces, the total number of carriers operating within the industry is becoming less. This has resulted in less competition, higher airfares and increased fees, thus affecting the fliers. The US passenger carriers are still trying to recover from the domestic economic sluggishness says IATA.
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In the past 20 years, the US has seen 77 airline bankruptcies and several liquidations American West Jets will be flying to four regions: the South Pacific, America Samoa, Fiji Beach and Australia. Dreamjet SAS, a boutique airline that connects Paris with Newark, raised the rough equivalent of $40 million euros in venture capital.
In Germany, one of the biggest source markets for the global tourism industry, Lufthansa may soon start a new trend by launching low-cost long-haul flights under a new brand
The picture may not be rosy, but it has not deterred a new crop of industry players in the US from venturing out with new airlines. In the past 20 years, the US has seen 77 airline bankruptcies and several liquidations. They are ready to take the challenge of ruling the skies. According to The Wall Street Journal, out of the 400 carriers authorized to operate in the United States since 1978, only 68 are still flying. The report reveals that 264 carriers shut down and 62 approved airlines never even took off. The six startups that have taken the challenge to prove their mettle in the highly-competitive market are People Express, Eastern Air Lines, Odyssey Airlines, American West Jets, Dreamjet SAS and Airline 4.0.
People Express, which took off in June, is a startup whose original incarnation was shuttered in 2012 when it was acquired by Southwest Airlines. It flies to Newark, New Jersey, West Palm Beach, Florida, Pittsburgh and Boston. Eastern Air Lines, which used to be a charter airline in Miami, is expected to start flying in January 2015. With more than $10 million in venture capital, the company has already placed orders for 10 Boeing 737-800s, and tentatively agreed to buy 20 Mitsubishi Aircraft MRJ90 regional jets. Odyssey Airlines, a business-class only startup, will fly from London to New York in 2016. The fleet comprises of 100-to-125-seat Bombardier CSeries jetliners.
Two in Canada In Canada, the airlines industry is also expected to witness tough competition as two “ultra low-cost� airlines are set to spread their wings. Calgary-based Jet Naked promises fares that will be at least 40 per cent lower than Air Canada and Westjet, while passengers will have option to buy carry-on space, luggage space, drinks and meals separately. According to The Financial Post, the airline has lined up three Boeing 737s and has hired a private equity firm to raise up to CAD50 million ($47 million) in financing. Canada Jetlines, the Vancouver-based start-up, also plans to adopt the ultralow cost carrier model, which offers a no-frills flying experience for significantly lower fares and aims to target the underserved markets in western Canada, such as Regina, Edmonton and Winnipeg. Planning to launch in the late spring of 2015, the airline announced plans to raise $10-million and get listed on the TSX Venture Exchange. Europe too In Germany, one of the biggest source markets for the global tourism industry, Lufthansa may soon start a new trend by launching low-cost long-haul flights under a new brand. In another European Union memberstate, Turkey will witness the rise of a new airline next year. Van Airlines, with startup capital of $3 million, is expected to take off in April 2015, with daily flights from Van to Ankara and Istanbul. The start-up has the plan to connect Van to Armenia, Iran, Iraq and Georgia in future. Chinese airlines China is another big market that will see new airlines taking off sooner or later. According to a report by Centre for Asia Pacific Aviation (CAPA), China in the next year could see about a 50 per cent increase in its number of passenger airlines which stands at 15. September 2014
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This rapid growth comes as China loosens restrictions on new carriers that have been in place since mid-last decade. These new carriers join about 10 airlines launching in other parts of Asia in 2014. Whereas those 10 airlines outside of China are exclusively low-cost carriers, almost all of China’s new carriers will be full-service – at least initially. The report said 13 Chinese airlines could each have a fleet of over 100 aircraft by 2020. The number of passengers flying on domestic routes within China last year was 690.9 million, 11 percent more than a year earlier. Last year, China government deregulated the nation’s civil aviation industry. According to a CAPA report, there are 15 known airlines that either plan to launch or have launched in recent months. Almost all of the new carriers will be full-service, although their size (by number of seats) will be small. Many of the new or proposed airlines are affiliated with an existing airline group, HNA. Chang’an Airlines, Guangxi Beibu Gulf Air, Guilin Airlines, Heilongjiang Airlines, Fuzhou Airlines, Yangtze River Express and Urumqi Airlines belong to the HNA Group. The group has formed joint ventures with several public as well private organizations to launch these carriers. Donghai Airlines, Hefei Airlines, Jiangxi Airlines, Juneyao, Loong Airlines, Qingdao Airlines, Ruili Airlines and Okay Airways are the other airlines that are either still awaiting approval or planning a first flight soon. 8
September 2014
According to a CAPA report, there are 15 known airlines that either plan to launch or have launched in china India calling In India, the entry of new airlines during this year will make it more difficult for the incumbent airlines, whose finances have weakened further, said aviation consultancy Centre for Asia Pacific Aviation (CAPA) in a report. Easy Air and Air Pegasus are also looking at launching this year. A further one or two new LCC start-ups are also likely, according to CAPA. A joint report released by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG earlier this year observed that India’s aviation sector holds much untapped potential and could become the largest aviation market by 2030. The Ministry of Civil Aviation has recently issued No Objection Certificates (NOCs) to six entities whose applications to start airlines in India were pending for long. The list includes three national airlines namely Air One, Premier Air and Zexus Air, while Turbo Megha, Air Carnival and Zav Airways have been given NOC for regional operations. AirAsia India, an Indo-Malaysian low cost carrier, is the latest passenger carrier in India which commenced domestic operations in June 2014.
It will be followed by Vistara, another new airline which is launched by the Tata Group in partnership with Singapore Airlines. A full service airline, Vistara is expected to start its operations by October 2014. Saudi Arabia and Bangladesh In the Arab world’s biggest travel market, SaudiGulf Airlines is a new domestic carrier aspiring to serve passengers in the Kingdom of Saudi Arabia. With its base in Dammam, the nascent airline is planning to commence services in 2015 operating three to four daily flights to Riyadh and Jeddah. Bangladesh may be among the poorest countries, but the private airline sector is expanding rapidly, thus bringing intense competition to the domestic and regional aviation markets. The three privately owned airlines currently operating in Bangladesh are expected to face stiff competition with the arrival of two more private airlines -- US-Bangla Airlines and Epic Airways. US-Bangla Airlines launched its operation in July with flights on two domestic routes Dhaka-ChittagongDhaka and Dhaka-Jessore-Dhaka using two 76-seater DASH-8-Q400 turboprop aircraft. Epic Airways is planning to start operations on domestic routes by the end of 2014 using an initial fleet of two Boeing 737s. Second coming in Seychelles Since the past 37 years, Seychelles has had one national airline, Air Seychelles, flying the archipelago’s name through the
Cover Story
skies across the Indian Ocean to the African, European and Asian continents. Now a second airline has applied for permission to start operations in the near future. A private venture in the making for a little over a year, Seychelles Airlines submitted its formal application to the Seychelles Civil Aviation Authority (SCAA) for an Air Operator Certificate. Seychelles Airlines is aiming to offer local travelers and tourists alike, direct routes to and from Mahe, the main island of the archipelago in the Indian Ocean. It plans to undertake five weekly flights from Seychelles to France, Italy and Germany. Condor is currently the sole airline directly linking Seychelles to Europe. Seychelles Airlines, a project backed by Intershore Aviation Limited, which will be flying B767-300, plans to initially undertake five weekly flights from Seychelles to France, Italy and Germany. The airline plans to expand its network to the United Kingdom, Russia, Singapore and India, in the second phase. Africa beckons Africa is another hugely-promising market for the airline industry. African airports have witnessed a seven percent growth rate in traffic from 2011 to 2012 and the sector is expected to grow at 5.1 percent annually. However, flying still remains relatively expensive in this part of the world, as high taxes and fees spike up air fares. An IATA report says there is beyond doubt tremendous potential for African aviation if the shackles are taken off. A potential five million passengers a year
are being denied the chance to travel between these markets because of unnecessary restrictions on establishing air routes. The trend of low cost carrier has also reached Zimbabwe, as flyafrica launched its first route Victoria Falls, Zimbabwe, to Johannesburg, South Africa, in July. The low fare airline will operate scheduled regional flights in Africa from various bases; the first of which is from Zimbabwe. Rainbow Airlines is another Zimbabwean start-up that seeks to exploit the country’s under-served domestic and regional markets. Scheduled to launch operation in October 2014, the airline has applied for both domestic and regional traffic rights. The Democratic Republic of Congo has created a new national airline as part of a push to clean up its poor air safety record. Shareholders, including the Congolese state and several state companies, hope to launch Congo Airways by the end of the year. The Congolese government also signed an agreement with Air France Consulting to develop a business plan for the carrier. Kinshasa announced in September that it aimed to launch a new national airline to replace Lignes Aeriennes Congolaises (LAC), which went bankrupt in 2003. DR Congo has an unenviable aviation record, with more than 50 of its airlines on an EU blacklist that bans them from flying over Europe. The government hopes the new airline will
Seychelles Airlines is aiming to offer local travelers and tourists alike, direct routes to and from Mahe help to turn around that reputation and the country’s aviation industry. Cambodia A new group of Cambodian charter carriers are set to unlock the growth potential in the country. Bassaka Air is set to lead the revolution as the nascent airline has already sourced its first aircraft, a used A320. It is expected to launch services in in the third quarter of 2014 with an aim to operate in multiple routes to mainland China. However, it will soon witness a competition from Cambodia Bayon Airlines, which is planning to launch services in December. Using Chinesebuilt Xian MA60 turboprops, it will operate on domestic routes, while flights to China will be operated using A320s. Costa Rica Costa Rica is expected to witness arrival of five new airlines, out of which two may start operation later this year. According to The Tico Times, Air Costa Rica, a new local carrier, may soon get authorization from the Costa Rica’s Civil Aviation Administration (DGAC). The company has applied for licensing to operate three routes between San José and Miami, Nicaragua and Panama, plus charter flights to San Andrés island in Colombia. Another local carrier, Ticos Air, began the process last year; however, the application is still pending due to several technical requirements and formal requests for routes. Salvadoran carrier VECA is expected to submit a formal application soon to operate in Costa Rica and launch a San Salvador-San José route. Two additional airlines, Azul Linhas Aéreas Brasileiras and Russia’s Transaero Airlines, have also requested meetings with DGAC officials to discuss the country’s requirements to launch operations. September 2014
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UAE in Focus
Enoc opens first fuel station at AMIA E
mirates National Oil Company (Enoc) has inaugurated its first commercial service station inside the Al Maktoum International Airport in Dubai World Central (DWC) to meet the growing fuel requirements at Dubai’s fast-growing new commercial and cargo airport. The fuel station is the first of three stations being built by Enoc in cooperation with Dubai Aviation Engineering projects (DAEP), at both Dubai Airports. The two other commercial sta-
tions are currently being built within Dubai International Airport. The strategic location of Al Maktoum International near the Dubai Expo 2020 site and the ongoing infrastructure development will make it an even busier destination in the near future. The fuel station at Al Maktoum International is part of a long-term strategic partnership between Enoc and Dubai Airports. Al Maktoum International’s first phase, now completed and fully operational, has the
capacity to handle over 600,000 tonnes of cargo per annum. Enoc’s subsidiary Horizon Terminals Limited is currently
on schedule with the construction of a new oil terminal in Jebel Ali, with a storage capacity of over 141,000 cubic metres.
UAE telecom sector earns AED29.18 billion
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he UAE’s telecommunications sector reported a 6.57 per cent increase in revenue to AED29.18 billion last year compared to AED27.38 billion in 2012, fuelled mainly by
growth in mobile services, according to Telecommunications Regulatory Authority (TRA). It said the number of active mobile subscriptions by both etisalat and du crossed 16 million last year with a penetration rate of 192.9 per cent, one of the highest mobile penetration rates in the world while revenues generated from mobile services has been progressively increasing and increased by 6.3 per cent in 2013. The report said that number of residential fixed telephone lines increased by nine per cent between 2012 and 2013 over 2.08 million and number of business
lines by two per cent. The fixed line penetration rate in 2013 stood at 25 per cent. International voice revenues fell by 13 per cent in 2013 while domestic voice revenues fell by four per cent. Calls to mobile phones represent the largest proportion of fixed line call minutes. Calls to Pakistan, India, Egypt and the Philippines represented 55 per cent of total outgoing international traffic in 2013 while calls from Saudi Arabia and India represented 70 per cent of the top 10 countries in incoming traffic in 2013. As of December 2013, there were 1.04 million internet subscribers in the UAE
and the total number of broadband subscribers increased by 9.1 per cent between 2012 and 2013. The penetration level of broadband was 12.5 per cent as at December 2013.
UAE overtakes Saudi as top FDI recipient in GCC
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he UAE continued to attract foreign direct investments (FDIs) in 2013, rising nine per cent to $10.5 billion last year, the United Nations Conference on Trade and Development (UNCTAD) said in its latest report. The report said FDI flows to the UAE continued their recovery after the sharp decline registered in 2009, increasing in 2013 for the fourth consecutive year and positioning the country as the second largest recipient (after Turkey) of FDI in the Middle East. Flows to Saudi Arabia registered their fifth consecutive year of decline, decreasing by 24 per cent to $9.3 billion, and moving the country from the
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second to the third largest recipient economy in the region.
FDI outflows from the UAE reached $2.9 billion in 2013 as compared to $2.53 billion in the previous year. The UAE FDI inflows peaked in 2013 when they reached $13.7 billion. FDI flows to Middle East decreased in 2013 by nine per cent to $44 billion in 2013, failing to recover for the fifth consecutive year. FDI outflows from Middle East soared 64 per cent to $31 billion in 2013, boosted by rising flows from the GCC countries, which enjoy a high level of foreign exchange reserves derived from their accumulation of surpluses from export earnings.
UAE in Focus
Emirates tops world for First Class, Business capacity
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Emirates, GE signs $13 billion maintenance deal
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E Aviation said that Emirates Airline has signed a 12-year agreement for the maintenance, repair and overhaul (MRO) of its new GE9X engines that will power its 150 Boeing 777X aircraft. The agreement is valued at more than $13 billion over the life of the contract. The aviation firm said it is part of the finalization of Emirates’ commitment for 150 Boeing 777X twinengine aircraft, powered by GE’s new GE9X engine. The agreement for the 300 GE9X engines announced
at the 2013 Dubai Air Show is worth more than $15 billion list price. With this agreement, GE Aviation secured its largest ever commercial jet engine award from an airline. Emirates is the world’s largest operator of GE90-powered Boeing 777-300ERs, with 96 aircraft in fleet and another 56 pending delivery. Emirates also operates the largest fleet of A380s powered by the GP7200 engine produced by the Engine Alliance, a joint company of GE Aviation and Pratt & Whitney.
mirates Airline is the number one airline for premium capacity measured in international available seat kilometres (ASKMs), clocking 876 million ASKMs per week, according to flights data firm OAG. The popularity of the Dubai-based airline’s Business and First Class cabins is primarily due to the long haul nature of Emirates fleet deployment. Earlier, the airline received delivery of its 50th A380, configured with 90 First and Business Class seats, further adding to Emirates’ average weekly capacity of over 191,000 premium seats. Over 27.5 million passengers have flown on Emirates’ A380s since 2008, with premium and overall seat factors on the A380 fleet consistently outperforming the network. Globally, Emirates’ First Class capacity grew by six percent over the last year, while First Class passenger traffic increased by eight percent.
New routes fuel flydubai’s growth
Emirates take out $425 million loan for A380 purchases
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ubai-based flydubai continues the expansion of its network in Central and Eastern Europe (CEE) by adding Sarajevo in Bosnia-Herzegovina and Zagreb in Croatia. These two new routes, on which operations will commence in December this year, bring the number of destinations the carrier serves in the CEE and the Commonwealth of Independent States (CIS) to 26. The airline will then serve a total of 75 destinations within a five-anda-half-hour flying radius of Dubai. flydubai will become the first carrier to operate direct flights from Dubai to Sarajevo and Zagreb. The airline is also the first Dubai-based airline to serve Almaty and Shymkent in Kazakhstan and flights to these routes will commence in September. In addition, Business Class will be available on all four of these routes, providing passengers with additional convenience and comfort as they travel.
mirates Airlines has taken out a loan of $425 million from three banks to fund a purchase of two A380 planes, Reuters reported. According to the report, the airline has agreed the loan with Abu Dhabi Islamic Bank (ADIB), Commercial Bank of Dubai and Dubai Islamic Bank. Quoting ADIB, Reuters said that Emirates had used the loan to acquire its most recent A380 – the 50th superjumbo in its fleet. Emirates has recently taken delivery of its 50th A380. Sir Tim Clark, President of Emirates Airline said: “The A380 has been very successful for us, and this is reflected in the strong customer interest and high seat factors wherever we’ve deployed the aircraft. The A380 has helped us serve customer demand on trunk routes, operate more efficiently at slot-constrained airports, and also introduce new concepts on-board that have redefined the flying experience.
By late 2017, the airline will have around 90 A380s in its fleet to support existing and new A380 routes. The airline has 140 A380 on order. Since first entering service in 2007, the A380 has joined the fleets of 11 world class carriers. To date over 60 million passengers have already enjoyed the unique experience of flying on board an A380. Every four minutes, an A380 either takes off or lands at one of the 37 airports where it operates today and the network is constantly growing.
September 2014
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UAE in Focus
EK plans to double capacity on Morocco route
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mirates Airlines has announced plans to step up services to Morocco with a second daily flight, boosting the service to 14 weekly flights from September 1. From October 26, Emirates said it will upgrade this additional daily from an Airbus A340-500 to a Boeing 777-300ER, which means that both daily services will be served by Boeing 777s. The additional flight, coupled with an aircraft upgrade, will increase Emirates’ weekly passenger capacity to Morocco by 100 percent, representing an extra 2,520 seats per week in each direction. Emirates’ new capacity initiatives are expected to increase the momentum for Mo-
rocco’s import and export industry. Emirates SkyCargo will have a daily belly-hold capacity of 46 tonnes in each direction, ensuring businesses benefit from the additional 322 tons of weekly capacity on the route. Key exports from Morocco include electrical components, mineral, chemical and agricultural products and garments while some of the main im-
Air Arabia profit swells 128 per cent
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ir Arabia has announced alltime high second quarter financial performance as its net profit more than doubled, beating forecasts. The first low-cost carrier of the Middle East declared AED173 million net profits for the June quarter, compared to AED76 million for the same period last year, showing 128 per cent jump. The only publicly listed carrier operating out of the UAE served more than 1.6 million passengers in the second quarter of 2014, showing an increase of eight per cent compared to the
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1.5 million passengers carried in the same period of last year. Air Arabia has seen its route network in the first half of this year increase to 97 destinations in total, including the additions of Cairo in Egypt, and Antalya in Turkey from its main base at Sharjah International Airport. Earlier in the first half of 2014, Air Arabia opened its second hub in the UAE and fourth worldwide at Ras Al Khaimah International Airport following a long-term strategic partnership with Ras Al Khaimah Department of Civil Aviation.
ports are petroleum products, automobiles and wheat. Since the route launch in 2002, Emirates has carried over 1.6 million passengers between Dubai and Casablanca, the airline said. Emirates currently employs 750 Moroccans across the group, including over 320 cabin crew based at its home in Dubai.
Dubai Tram ready to hit tracks in November
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ork on phase one of the Dubai Tram project is nearing completion with 11 trams ready to roll out in November. Served by seven stations on a 10.6 km stretch in phase one, Dubai Tram will have the world’s first tram stations with platform screen doors. The trams will work in sync with Dubai Metro, with the two networks connecting at two locations - Dubai Marina station and Jumeirah Lakes Towers station. The two networks will connect through footbridges at both the stations for a smooth and seamless interchange of passengers between the two systems. The tram will also link with the Palm Jumeirah Monorail.
Set to operate for 20 hours a day between 5am and 1am, the trams will run every 6 minutes during peak hours and eight to 10 minutes during off peak hours. Moving at an average commercial speed of 21.44km/h and achieving the maximum speed of 50km/h, the trams will make a round trip in 42 minutes. Measuring 45 metres each, seven of the eleven stations in phase one are at ground level and four are elevated. With a capacity to accommodate 405 passengers at a time, the 44-metre long trams have been divided into three class — Gold, Silver and Women-children.
UAE in Focus
Passenger traffic surges at Abu Dhabi airport
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bu Dhabi International Airport recorded 19.4 per cent year-on-year passenger traffic growth in the first half of 2014. The airport’s latest passenger statistics showed that a total of 9,481,744 passengers passed through Abu Dhabi International Airport during January-June 2014 period. The number of aircraft movements rose to 73,862, representing an 11.8 per cent growth during the period. Eng. Ahmad Al Haddabi, chief operations officer at Abu Dhabi Airports, said Bangkok, Manila, Doha, Jeddah and London Heathrow remained the top five routes from Abu Dhabi International Airport during the first half of 2014. During the period, several new destinations were added to the airport’s network, including Los Angeles, Zurich and Jaipur. India saw a massive increase in traffic for the first six months of 2014.Saudi Arabia, Germany, Pakistan and the UK were the next largest in terms of passenger traffic to and from Abu Dhabi. In terms of regions, the Far East experienced the most passenger traffic, followed by Europe and then the Middle
East. Abu Dhabi International Airport is currently undergoing a multi-billion dollar re-development and expansion programme to increase the overall capacity of the airport
to more than 40 million passengers per year. As part of this redevelopment, a second runway and a third terminal have been completed.
New visa rules to boost cruise tourism T
he new visa system, implemented from August 1, will have a “transformative effect” on Dubai’s cruise sector, according to the Department of Tourism and Commerce Marketing (DTCM). Under the new ruling, cruise passengers can get a multiple entry tourism permit for AED200. The permit will make travel to the UAE more cost effective and logistically more convenient. It is expected to have a particular impact on markets for which previous regulations made the cost significantly higher, including India, China, Russia, CIS, South Africa, and Brazil. According to a study conducted by the DTCM, Dubai alone hopes to see around one million
cruise tourists by 2020, with the sector expected to contribute around $3 billion to the emirate’s economy between 2010 and 2015. Dubai, Abu Dhabi and Oman joined hands to form the Cruise Arabia initiative late last year, to promote the region as a cruise destination. All three countries are investing in building new cruise terminals or facilities and plan to create common standards. According to the latest available figures, at least 300,000 cruise tourists visited Dubai and 189,000 called on Abu Dhabi in the previous season, which lasts from November until April. Major ports in the region, including Abu Dhabi, Dubai, Qatar,
Oman and Ras Al Khaimah, are expanding capacity in anticipation of attracting more cruise passengers. Dubai’s Mina Rashid Cruise Terminal is expected to handle seven cruise vessels simultaneously, up from five and process 14,000 passengers a day after the expansion. Abu Dhabi’s Mina Zayed is getting a permanent cruise terminal in two-and-a-half years, which will be able to handle three vessels simultaneously with up to 2,500 total passengers. Doha Port expects to cater to cruise tourists exclusively from 2016 after commercial port operations move to a US$ $7.4 billion facility outside the city. September 2014
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Middle East in Focus
Double-digit growth for Middle East carriers
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iddle East carriers, led by GCC airlines, continued to post the world’s strongest growth rates for the sixth consecutive month this year for international passenger demand, International Air Transport Association (IATA) data revealed. During the first half of 2014, global passenger traffic demand witnessed single-digit growth. Despite some tapering off in demand, the double-digit growth seen in the GCC remains robust. The strong growth continued even as the busiest international GCC airport, in Dubai, underwent runway upgrades. The UAE is the world’s second fastest growing market in terms of international and domestic passengers, according to IATA. The airlines in the UAE carried 45.3 million passengers in 2013, an increase of 11.7 per cent over the previous year. Middle East flew 157.9 million people, an increase of 8.8 per cent. Several Gulf airlines have fortified their positions within the global airline industry. Emirates lead the pack, followed by Etihad and Qa-
tar Airways, expanding in Europe, Africa and the BRICS, thus laying the foundation for an overall successful aviation sector. ICAO says the Middle East is expected to remain the fastest growing region in terms of PKP, with an estimated growth rate of 11.6 per cent in 2014. Strong expansion of the network of air carriers in the region will support this double-digit traffic growth.
Bahrain airport traffic to break eight million mark
400 Kuwaitis to quit for airline privatization
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assenger traffic at Bahrain International Airport during the first half of the year has witnessed significant growth. Total number of passengers in the period January- July increased by six per cent compared to the same period in 2013, for a total of 4,586,281 passengers. In terms of other activity at the Airport, there was also an increase in aircraft movements by six per cent during the first half of the year, while departing passengers increased by nine per cent during the same period compared to January- June 2013. The increase is largely attributable to national carrier Gulf Air’s introduction of more frequent routes to key Middle East and GCC airports, as well the introduction of some new routes to numerous international destinations. In addition, several airlines have newly launched flights to Bahrain during the first half of the year, including Pegasus from the Republic of Turkey, and numerous international airlines have increased the number of their flights coming to Bahrain. Officials have predicted continued growth during the second half of 2014, with total passenger numbers expected to reach eight million passengers by the end of the year.
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For year-to-date passenger traffic from January to June 2014, the Middle East continued to lead the region with a strong increase of 9.0 per cent, the Airports Council International (ACI) revealed. The Middle Eastern airports continued to demonstrate sturdy growth in H1 2014 over last year, with Abu Dhabi (19.4 per cent) and Doha (14.5 per cent) leading the pack with double-digit growth.
lmost half of all Kuwaitis working for the national airline have agreed to resign or be transferred to other government jobs as the carrier prepares to be privatized, according to Arabic daily Al Seyassah. Kuwait Airways is planning to retrench 1000 foreign workers on top of the 400-plus citizens who will leave the company. Kuwait Airways is undergoing a major restructure and upgrade as part of its plan to privatize after two decades of being burdened with old, inefficient aircraft, staff protectionism and a bloated workforce of 6000. It has signed a deal to purchase 25 Airbus aircraft and lease 12
planes while it waits for the new ones to be delivered from 2019. Its present fleet is an average of 20 years old. Officials said it would take at least three years to make the airline profitable and therefore attractive to an investor. Kuwait’s parliament first approved a plan to privatize the loss-making carrier in 2008 but the process has been repeatedly delayed. Last year, the Kuwaiti government paid off KD441 million ($1.55 billion) worth of debt accrued by Kuwait Airways in preparation to sell the national carrier. The debt had been accumulated since 2004.
Middle East in Focus
Saudia aims 286 aircraft fleet by 2025
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bdul Aziz Al-Hazmi, acting Director General of Saudi Arabian Airlines (Saudia), has announced that the kingdom’s international carrier has a plan to double its fleet strength from 131 to 286 aircraft by 2025. After receiving approval from the board, the airline would decide on the type, size and seat capacity of the aircraft it wanted to purchase, he said. The number of passengers rose eight percent in the first quarter of 2014 and revenues increased 10 percent. Saudia has no plan to increase its domestic fares. Saudia has increased seat capacity
Boeing says 55,000 new pilots needed in ME
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S plane manufacturer Boeing said that the Middle East will need to recruit 55,000 new pilots over the next 20 years. The company’s 2014 Pilot and Technician Outlook also forecast that a further 62,000 technicians will be needed in the region as airline fleets continue to grow. The report said the Middle East region in particular has seen significant growth due to “increased airline capacity and orders for widebody models which require more crew members”. Globally, Boeing forecasts continued strong growth in demand for commercial aviation pilots and maintenance technicians, projecting that between 2014 and 2033, the world’s aviation system will require 533,000 new commercial airline pilots and 584,000 new maintenance technicians. The 2014 outlook projects continued increases in pilot demand, which is up approximately seven percent compared to 2013; and in maintenance training, which increased just over five percent. Pilot demand in the Asia Pacific region now comprises 41 percent of the world’s need.
Egypt aviation suffers due to political crises
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assan Aziz, Chairman of the Egyptian Federation for Private Aviation, says the political crises had severe repercussions on passenger traffic in and out of Egypt. He asserted that the Egyptian Federation for Private Aviation lost approximately 40 per cent of total passenger traffic on its airlines in 2013. He said that airline companies hope to regain their pre-2011 shares of the market this
in the domestic sector by one million since the beginning of 2014 after receiving newly ordered Airbus and Boeing aircraft. There is tremendous increase in the number of domestic passengers, Al-Hazmi said, adding that the airline operates flights to 28 cities within the Kingdom in addition to serving international destinations, according to Arab News. Alhamzi also said Saudia’s entry into the SkyTeam alliance with 19 other airlines in 2012 had been a necessary step, and that Saudia brought valuable regional assets to the group.
Bahrain to get flight route development technology
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ockheed Martin has secured a deal with Bahrain Airport Company (BAC) for the implementation of its route analysis tool at Bahrain International Airport. The technology, BEONTRA B Route Development, will allow BAC to calculate, analyze and present high-quality route cases to airlines, while being able to recalculate and amend on-demand. The project is the first in the Middle East. The technology is just one component of Lockheed Martin’s comprehensive suite of aviation technology solutions, which includes products for air
traffic management and tools for airport operations management. B Route Development allows airports to develop and build route cases using data from Sabre MIDT, OAG schedule data as well as airport survey and statistical information. Through an intuitive, stepdriven process, route cases are delivered in an interactive, graphical format that can be used for improved analysis and collaboration. Bahrain International Airport served over 7.3 million passengers in 2013, having started out with only 24 passengers on its first scheduled flight in 1934.
year, by accounting for 10 per cent of passenger traffic to and from Egypt. He said he was optimistic about an upswing in air traffic in the near future thanks to the new political environment. Losses incurred by private airline companies exceeded $150 million last year. There are more than 10 companies that own and manage approximately 35 aircrafts and consume
approximately $300-400 million worth of fuel per year. Meanwhile, the Ministry of Aviation has announced a plan to increase Egypt Air’s fleet by pumping in $10 million by 2025, by which time the number of aircrafts will be 127, up from the current 81. EgyptAir has sustained great losses during the past years due to the decrease in the number of passengers on EgyptAir flights. September 2014
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International
Airlines profiting from rising travel demand
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he International Air Transport Association (IATA) says the expansion of the economic cycle along with rapid GDP and world trade growth is expected to boost air travel in 2014 by 5.9 per cent − the best since 2011. The rise in capacity may, in turn, lead to a 3.5 per cent cut in airfares, thus benefiting travelers. The IATA remains cautiously positive on the industry and projects overall airline profits of $18.0 billion on revenues of $746 billion for 2014, from an estimated 3.32 billion passengers. In 2014, net profit margin is expected at 2.4 per cent, up from 1.5 per cent in 2013. The industry is expected to generate $5.42 from every departing passenger on an average, a rather soft number for a high-risk business. Airlines in North America hold bright prospects in 2014. Although performance will continue to vary substantially between different US carriers, it forecasts a higher 2014 profit of $9.2 billion. In the Asia-Pacific, carriers are expected to post profits of $3.2 billion in 2014. IATA expects this year’s post-tax profit for European carriers to reach $2.8 billion.
Profits from carriers in the Middle East are expected to grow from $1.0 billion in 2013 to $1.6 billion in 2014 driven by rapid growth of airlines in the Gulf. Latin America’s profitability is expected to enhance substantially to $1.1 billion in 2014. Airlines in the African continent could see their profits touching the $100 million mark. The average industry load factor is expected at 80.4 per cent. While the projected capacity increase is 5.5 per cent, air travel demand is expected to see a 5.9 per cent pickup.
Venezuela blocking $4.1 billion owed to airlines
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he International Air Transport Association (IATA) has called on the Venezuelan government to honor the commitment it made to permit airlines to repatriate in full and at fair exchange rates airline funds being blocked in the country. While the government has permitted the repatriation of $424 million shared among a number of airlines, continuing
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sales in the country have seen the total amount owed grow to a staggering $4.1 billion. The blocked monies are from ticket sales in Venezuela and are being held by the government in breach of international treaties. Considering that the global air transport industry is expected to post a collective $18 billion profit this year, the outstanding $4.1 billion is significant.
ICAO predicts passengers’ growth through 2016
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orld scheduled air passenger traffic is expected to increase by 6.3 and 6.5 per cent in 2015 and 2016, respectively, according to the International Civil Aviation Organization (ICAO). World scheduled air freight traffic expressed in freight tonne-kilometres performed (FTK) is expected to increase by 4.2, and 4.4 per cent in 2015 and 2016, respectively. The 5.5 per cent growth in PKP (international and domestic services combined) recorded in 2013 by airlines of the 191 Member States of ICAO was higher than the 5.3 per cent increase posted in 2012. The number of passengers grew by some 4.5 per cent to 3.1 billion, while departures were up 1.2 per cent to 32 million globally. ICAO expects global scheduled air passenger traffic, in terms of PKP, to grow by 6.0 per cent in 2014, a slight upturn from the 5.5 per cent growth rate recorded in 2013. Current expectations of 3.5 (2015) and 3.7 (2016) per cent annual world GDP growth rates should support world passenger traffic growth of 6.3 and 6.5, respectively over the next two years.
Record profit for HK Airport Authority
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ong Kong Airport Authority said its full-year net profit hit a record, amid concerns about potential capacity constraints at one of the world’s busiest airports. The authority, which operates the city’s international airport, said that its net profit for the year ended March 31 rose 15 per cent to a record HK$6.45 billion ($832.1 million), due to strong contributions from its retail and commercial operations and stringent cost controls. Building a new runway –the third- would help expand capacity as the authority seeks to cope with growing air traffic in the region. The new runway project, estimated to cost HK$136.2 billion, would
boost the airport’s handling capacity by more than 40 per cent when it becomes operational in 2023. The airport’s existing two runways are expected to reach maximum capacity in 2016, three years ahead of the initial estimation, because of stronger-than-expected demand for air travel. Hong Kong’s airport handled an average of 1,055 flights departing and arriving daily in the first five months of 2014, ranking it as the world’s third busiest in terms of international air passengers, after Dubai International Airport and London Heathrow Airport, according to Airports Council International.
International
Keflavik airport undergoes transformation
Air travel in Ghana on a strong upward trajectory
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celand’s Keflavik International Airport is undergoing a transformation from a once underused transfer hub to a global stopover that shares local culture even with passengers just changing flights. Keflavik made headlines in 2010 when the Eyjafjallajökull volcano erupted, causing major disruptions to air travel across Europe for one week. The airport, surprisingly, ran with little trouble during the eruption and traffic has been on the rise ever since. In fact, air traffic is on pace to double over the past decade.
“We used to want the airport to have a global feel. Now we want to change the theme of the airport so it reminds people of downtown Reykjavik,” Gudmundur Dadi Runarsson, Keflavik’s deputy terminal director told Skift. On an average day at the airport, 33 percent of flyers are arriving, 33 percent are departing, and 33 percent are on transfer. The passengers are currently 60 percent foreigners and 40 percent locals, but he expects that to change. In five years, the airport expects 80 percent of flyers will be foreigners and 50 percent of traffic will be transfers.
nternational aircraft movements to and from the Kotoka International Airport (KIA) have improved tremendously between 2012 and 2013, as a result of the operation of new entrants into the industry and increased flight frequency of existing airlines. Ghana Airports Company Limited (GACL) has unveiled an ambitious programme to bring KIA at par with some of the best in the world in terms of infrastructure, security and services. GACL announced its decision to source for and invest over US$600 million in the next three years “to enhance and expand the airport infrastructure and services.” GACL intends to grow the non-aeronautical revenues from the current level of 10 per cent to 30 per cent within the next five years. Ghana’s aviation industry expects passenger traffic into the country to hit six million by 2015. With an average annual growth of 10 percent, the aviation industry is one of the fastest-growing and the most competitive in the West Africa sub-region driven mainly by the strong growth of economy.
Global airline industry to reach $767 billion by 2018
Cathay Pacific battles heat from ME carriers
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he global airline industry is expected to reach $767 billion by 2018. The industry is fragmented with top three and top five players. Lucintel, a leading global management consulting and market research firm, has conducted a competitive analysis on the major industry players and presents its findings in “Top Five Global Airline Companies.” The report projects that increasing competition will create intense competition
which will lower the industry’s market share and profitability. Threat of volatility of fuel prices because of business dependence on fuel price and fluctuation in fuel prices could affect the profit margin of the industry. The report gives a brief overview of the top five major players of the industry: Deutsche Lufthansa AG, United Continental Holdings Inc., Delta Airlines Inc., Air France KLM and FedEx Corporation.
athay Pacific Airways has reported profit that lagged behind estimates as competition with Middle East carriers held down fares. Cathay’s yields, or price a passenger pays to fly one kilometre, are under pressure as Emirates and Etihad Airways challenge Asian airlines for premium international traffic. Cathay and its Hong Kong Dragon Airlines carried 15.4 million passengers in the first half of the year, 6.5 per cent more than a year earlier, helped by growing travel demand to Northeast Asia and North America. Cathay is Asia’s largest international carrier, having moved 21.4 million passengers in all of 2013 while its regional rival Singapore Airlines moved 18.7 million. Cathay plans to increase passenger capacity by eight per cent this year. The company had a total of 140 planes on its fleet, according to a report by Bloomberg.
Boeing forecasts demand for 36,770 new airplanes
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oeing projects a demand for 36,770 new airplanes over the next 20 years, an increase of 4.2 percent from last year’s forecast. The company released its annual Current Market Outlook (CMO), estimating the total value of those new airplanes at $5.2 trillion.
Fueling this year’s forecast is the single-aisle market, which is projected to be the fastest growing and most dynamic segment due to the continued emergence of low-cost carriers. 25,680 new airplanes will be needed in this segment, making up 70 percent of the total units in the forecast. September 2014
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Opinion
Aerospace: A flagship industry for Canada
By Marc Parent President & CEO CAE
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AE is truly a Canadian jewel. Today, we have more than 8,000 employees, half of whom are in Montreal. In 1947, shortly after launching CAE, our founder, Ken Patrick won his first simulator contract from the Canadian Defence Forces. Eight years later, CAE won a milestone contract for the CF-104 Starfighter which gave
us entry into the global market with sales to several NATO allies. Today, the majority of commercial pilots flying around the world are trained on simulators designed and built right in Montreal. We’ve delivered over 2,000 simulators and training devices around the world, which is the lion share of our industry. Our simulation devices today are so sophisticated, so realistic in how they perform that the first time a pilot flies in a commercial aircraft is with passengers like you and me in the back as fare paying customers. Our technology is software – between five and 10 million lines of code in each simulator that perform tricks almost like magic – motion systems that make you believe you are banking and turning in the air or rolling down the runway. You can even feel the bumps as the airplane’s tires pass over cracks in the tarmac.
Our visual systems can replicate flying through dense clouds and thunderstorms, coupled with turbulence and lightning flashes, as well as the precise terrain of over 250 airports around the world. Our industry as a whole has 43,500 employees in Quebec and 85,000 employees directly involved across the country and more than 700,000 Canadians whose work is directly related to our industry. And that’s without counting international organizations like IATA and ICAO that are based in Montreal and that add great credibility to our city as a key aerospace player. Just in Montreal, one employee out of every 93 works in the aerospace industry –one in 93; this is twice more than in France and 2.5 times more than in the U.S. Total revenues for Canada are valued at $42 billion, of which 80 per cent is derived from exports.
And Montreal captures 55 per cent of those revenues. We’ve invested in partnership with the federal and provincial governments more than $1 billion in R&D over the past 10 years. We sell to more than 130 civil airlines, training centres and Original Equipment Manufacturers around the world with a roster of clients that is the envy of our competitors. Even though we remain the undisputed market leader with more than 70 per cent market share, our civil simulators actually make up only 20 per cent of our revenues. We are now a major training provider and train more than 120,000 aircrews every year. Our training network spans the globe with a total of 60 civil training locations, either 100 per cent owned or in joint venture with airlines. Excerpts from the speech at the Canadian Club, Montreal
The way forward in a global environment
By Tony Tyler Director General & CEO IATA
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he global air connectivity built-up over the last century is a critical component of modern economies the world over. The benefits of connectivity can only be fully realized if airlines—the core of the aviation value chain—are strong. We must work together in partnership to achieve our common goals. Some of those goals are achieved through global standards. We are reminded of that as we celebrate the
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70th anniversary of the Chicago Convention. It is the cornerstone of efforts that have made flying safe. It is the inspiration for the global approach on climate change that has placed aviation at the forefront of carbon-intensive industries on sustainability.It is important that we continue to shoreup the industry’s foundation—safety, security and sustainability—based on global standards. There is a very long list of things that Europe can and should do to improve the operating environment for its aviation sector. And the motivation for that is because aviation generates jobs and growth through connectivity. Many of the biggest factors that European airlines struggle with are the result competitive disadvantages placed in their way by Europe’s governments. European airlines are over-taxed and onerously regulated. Moreover, they suffer from a chronically
mismanaged air traffic management (ATM) system, insufficient airport capacity and infrastructure costs that are simply too expensive. This year the European tax bill for airlines and their passengers will reach nearly $40 billion. For perspective, that is more than double what is paid in the Asia-Pacific region. Many governments there value aviation more for the long-term economic value that the industry makes possible, than for short-term tax receipts. Some European governments have begun to realize this too. Experience teaches that we achieve the best results when governments use regulation to solve real problems, take full advantage of expert advice and consultation, calibrate regulation and taxation carefully to promote global connectivity and ensure that the costs imposed by regulation do not exceed its benefits, and respect global standards wherever they exist.
Passenger Rights is a good example of where European regulation has got it wrong. EU regulation 261 is not only a competitive disadvantage for airlines; it also fails in its mission to “protect” passengers. And, it competes—even conflicts—with some 60 other passenger rights regimes around the world. Regulation also has a role to play in Europe’s growing infrastructure crisis—both for airports and air traffic management. Governments must become more proactive. As a basic principle, we believe that airports need effective economic regulation to achieve three goals: providing protection from excessive charges, incentivizing efficiency gains and driving service quality levels and maximizing the value of investments by aligning with customer needs. Excerpts from the speech at the ECAC/ EU Dialogue Session, Vienna
Opinion
Strengthening the fundamentals of air hub
By Lee Seow Hiang CEO Changi Airport Group (CAG)
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ast year has been an exciting and amazing year for us as we continued our record-breaking growth in passenger traffic whilst keeping our accident-free record. We have enjoyed three years of doubledigit growth from 2010 to 2012 and a record-breaking year in 2013. Over the past 12 months, several factors have contributed to this moderating trend in passenger traffic.
Currency movements for instance have seen the rise of a much stronger Singapore Dollar versus key travel markets such as India and Indonesia, affecting inbound tourist travel to Singapore. Continued political uncertainty in Thailand and reduced Chinese demand for travel to Southeast Asia has dampened passenger traffic to and from these important markets. The Singapore tourism landscape itself is undergoing a fundamental change. There is a greater focus on higher-yield travel markets rather than mass numbers. The Singapore Tourism Board has estimated that visitor arrivals over the next decade will moderate to an annual growth of three to four per cent. From an airline’s perspective, the business environment continues to be challenging as well. Persistently high jet fuel prices hold up the cost base, while yields remain depressed due to intense competition to fill seats.
Under such pressures, airlines may understandably elect to first restore profitability by reducing capacity and slowing down growth plans. These developments will impact Changi Airport over the near-term. It is not possible for CAG to subdue the volatility that market forces present but we are determined to work closely with our airline partners to ride through this tough patch, by continuing to seek opportunities together, to position ourselves strongly for the next wave of growth. We remain deeply confident about the medium and longer term potential of air travel in the region. Changi Airport sits in the middle of a vibrant aviation market, rich in growth opportunities. The long-term prospects for the large economies of China, India and Indonesia remain attractive and demand for business and leisure travel will continue to rise. In fact, much of the restructuring of key economies like China and even our own is not
really to target slow growth but to achieve a higher quality of growth, with higher levels of income, on a sustained basis. The eventual full recovery of the US and European economies will also be a catalyst for the restoration of long haul services reduced over the past decade. Amidst these immediate challenges, CAG will continue to stay focused on strengthening the fundamentals of our air hub. We will continue to work hard to welcome more airlines to Changi and add new cities to our network. We believe a strong portfolio of airlines, with strong collaboration among partners where feasible, remains a key strategy to grow our air hub, by pooling together our respective strengths. Last year, the Changi family grew with five new airlines joining us, including long-haul airlines SWISS and Ethiopian. Excerpts from the speech at the 9th Changi Airline Awards ceremony, Singapore
The new runway investment
By Tim Johnson Head of Policy Civil Aviation Authority (CAA) UK
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ne of the major priority items for us is coordinating the CAA’s work on runway capacity and the Airport Commission. We have set out four criteria that we think will help the Commission to narrow their list from three (or perhaps four) to one. The case for new runway investment: how much capacity do we need, and when do we need it by? Today, Lon-
don, and the rest of the UK, is very well connected, and we compare well against every one of our international rivals. However, like many others, we do see the case for additional capacity in the UK. From the consumers’ perspective, there are three broad justifications for this – without additional capacity: prices will rise while; choice and service quality will fall. So from a consumer perspective, the CAA does support the need for new runway capacity. In the UK aviation system, there is no public subsidy of infrastructure development, which means we will only ever see runways developed where there is consumer demand. We do not have a system like the Gulf States or China where the state will support multi-billion investment projects to develop vast new airports. We expect the private sector to take the risk of funding runways. I don’t believe that is the key issue. We have seen global investment in the UK airports market
in recent years. The creation of one additional runway seems about right to serve the predicted demand scenarios up to the middle of the century. It is, of course, incredibly difficult to say how the aviation industry might look in 20 years’ time – in 1994, I don’t think anyone saw the meteoric rise of low cost airlines after EU aviation liberalization coming; and in 2004 few would have predicted that the Middle East would be providing so many services into the UK today. The changing shape of the aviation industry, coupled with the challenges of predicting accurately what consumer demand might look like, means we think that it is impossible to predict for certain what a new runway might be used for in a system where the government cannot dictate how infrastructure is used and where the global market holds sway. But what we do know is that the airline industry is incredibly agile, and good at making the most of opportunities to expand.
It goes without saying that whatever gets built needs to be paid for. There are key questions we feel that deserve focus. The first is how consumers might respond to any new capacity and what this might mean for airline market. The second is how and when the costs of any new capacity are reflected in user charges, and the role of economic regulation. CAA has to first assess whether an airport has significant market power and if it does, whether economic regulation is in the best interests of passengers and if so, what form should it take. At present, the two airports on the short list, Heathrow and Gatwick are economically regulated by the CAA and we announced our decision on their airport charges between 2014 and 2019 (for Heathrow) or 2021 (for Gatwick). Excerpts from the speech at Airport Development, Design and Engineering Conference, London
September 2014
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In Focus
Change the airport experience Technologies like wearables, geolocation and biometric immigration and security control is making the airport experience better for the travelers. Digital technologies are transforming the way airports and airlines connect with customers and how staff goes about their daily work. By 2015, most mobile apps could be syncing, collecting and analyzing ‘deep data’ about users and their interactions. Two studies look at the changing trends.
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ombining biometrics with other technologies like wearables, geolocation or identification at baggage drops and security checkpoints will truly enable the airport experience travelers are seeking today, asserts a study. This will require the combined efforts of technology companies, airlines, ground handlers, governments and airport operators who are willing to use and adopt the new technologies to enhance passenger experience. From single identification of a specific traveler to automated immigration and security control, biometrics offers a huge potential, argued business whitepaper published by the leading global technology giant, Hewlett-Packard Development Company (HP). Airport employees—facilitated by biometrics—will speed up identification and increase security within the airport, reducing the threat of fraud and identification misuse. The exploration of the technology’s potential has only just begun. One day soon, airlines will reach a very high level of comfort, which will enable consumers to move seamlessly and “touch-free” through an airport, asserted the study author, Daniel Friedli, senior product manager responsible for product strategy and innovations within HP Travel & Transportation.
Make it personal
The digital technologies are transforming the way airlines and airports connect with customers and how staff goes about their daily work. Airline travel is at a crossroad, needing to make airport processes more personalized, social, and virtual.
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The air travel industry is entering one of the most significant eras of change in its history. Across the globe, large and small enterprises are similarly navigating new business models enabled by mobile, cloud computing, Big Data, and social media. Airports, airlines, and ground handlers have a particular and visionary part to play in the new digital economy—they have everything to gain and the most to lose if they fail to grasp the digital opportunity. For the travel industry, these technologies can increase operational efficiency and promise to transform the customer journey into one seamless, personalized experience.
As organizations become better connected through their smartphones and other wearable devices, airports must become purveyors of not just the logistical journey, but an entire travel experience from the initial journey planning stages through to retail activities, the study opined.
Game changer
Mobility is the biggest game changer for all organizations as smartphones and tablets drive new expectations everywhere with “anywhere, anytime, anyplace” connectivity to products and services. Opportunities are richer for the air transport sector as airline seats are increasingly commoditized; carriers need new
These technologies can increase operational efficiency and promise to transform the customer journey into one seamless, personalized experience
ways to differentiate their service. Increasing the scope of ancillary services by offering them through additional channels, up to the last minute prior to flight and in flight through mobile services, is a very real prospect. Mobile connectivity means more flexible ways of deploying staff and managing tasks such as baggage handling, check-in, and inflight services. With over threequarters of travelers carrying smartphones and able to access information, there are new ways to engage with customers. These include airport retail activity, pushing personalized offers to travelers in the airport vicinity, and providing premium, enhanced customer service options.
Tablet as a Service
The high costs of customizing tablet applications (apps) for a narrow set of airline-specific capabilities combined with the complexity of managing a large number of devices can be offputting to airports and ground handlers. That’s where Tablet as a Service comes in. Hardware loaded with software adapted for airport use includes agent software for particular airline roles, plus an airline-hardened service, a security layer, and lifecycle management. Airlines and airports will be able to dynamically deploy a mobile concierge to bust the lines and sell services making the customer journey more enjoyable and profitable. At the departure gate, tablets come into their own, dispensing customer assistance and logistical checks. And once on board, they improve crew productivity, act as a point-of-sale device, and personalize the customer journey with in-flight entertainment options.
In Focus
Customers may or may not take to wearable technology, and appetite will probably depend on fashion trends. For non-watch-wearing customers, the device of choice will most likely remain the smartphone
Wearable computing
Wearable computing may seem in the realm of the futuristic and fantastical, but it’s simply another aspect in the trend toward mobility. The most talked about wearable devices right now are Google Glass and the Sony Smart Watch, which are relevant and applicable to the air travel sector. Whether consumers will wish to wear full-fledged computing devices strapped to their wrists or heads are debatable, there’s no doubt about their value to airport staff. Employees at check-in, duty free, and in flight will find these invaluable in helping them perform their role, particularly when it comes to flexibly switching between duties and “line busting.” SITA-sponsored Airport IT Trends Survey has found that airlines are committed to providing their travelers with more information about what is happening to their bags over the next three years. It also states, by the end of 2016, over 60 per cent of airlines expect to be sending bag location
updates and enabling missing bag reports via smart phones. Integrate wearables Alongside retail, check-in, and cabin crew staff, other employees likely to don wearables are baggage loaders. While these workers carry out scanning duties using an additional device, most of them are rather heavy and bulky. By using these devices, baggage tracking and reconciliation will become faster, easier, and more reliable. Customers may or may not take to wearable technology, and appetite will probably depend on fashion trends. For non-watchwearing customers, the device of choice will most likely remain the smartphone. However, there is potential for gadgets smaller than phones, which are clipped onto a handbag or belt. Longer term, take up will also be influenced by the fact that these devices are wearable personal information systems, whereas phones are a more personal communication system. With the launch of Google’s Android Wear—an operating system built specifically for wearable devic-
es—the industry most likely will see a myriad of new, innovative devices and functionality appear over the next months.
Engage mobility in baggage handling
By enhancing how baggage handlers manage baggage using mobile devices for tracking and reconciliation, baggage location is not only better known, but baggage gone astray can be identified quicker and problems rectified sooner. Electronic bag-tag trials and airport-based self-service bag drops are a current focus for attention. A growing number of applications enable end-to-end baggage tracking to be integrated into existing smartphone and tablet apps, and promise to make the passenger journey ever smoother. By the end of 2016, over 60 per cent of airlines expect to be sending bag location updates and enabling missing bag reports via smartphones. HP estimates about one-quarter of airlines already provide real-time bag status information to their operational personnel. Various industry studies tend to conclude that the majority of airlines plan to offer this service to staff by 2016. Geolocation is another exciting facet of mobility and consumer attention. The technology tracks where people are— and it can be specific to individuals or anonymous, which aids in understanding human traffic flow through airports. Potential applications within the airport are numerous, and there’s enormous scope to
improve airport layout and design, increase security, make catering more effective, and enhance retailing activity. When geolocation capabilities are personalized, there are a host of further potential applications. Airport shops can advertise special deals and travelers can be informed of security lines and wait-times and given directions to alternative security checkpoints, check-in kiosks, or baggage drop locations. In airports, airport authorities or airlines can identify where people are, when, and how travelers flow through the airport, pinpointing bottlenecks and empty zones. This virtual map of human traffic opens up a host of applications including redirection of travelers to lounges and restaurants, and efficient staffing of these amenities.
Deep Data
A study by Gartner said wearable devices will drive up to 50 per cent of total app interactions by 2017. In addition, the research firm is predicting that, by 2015, most mobile apps could be syncing, collecting and analyzing ‘deep data’ about users and their interactions. Up to now, most apps have been developed to support specific business-to-consumer interactions. This could include the use of geo-location specific data to garner information about users, such as gender, age group, preferences. In return, this helps enterprises further refine their interactions with consumers. September September 2014 2014
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Cargo & Logistics
Freight-forwarding markets facing major challenges
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eclining in value by 3.3 per cent from 2012, the freight forwarding market is facing major challenges as it fights to stay viable in a changing global environment, a new market study has revealed. Published by Transport Intelligence, the Global Freight Forwarding 2014 report said trade lanes are shifting as freight forwarders look to emerging markets in Africa, Asia, the Middle East and South America for growth opportunities while at the same time modal shifts are underway. According to the report, troubling capacity concerns within the air and sea freight markets combined with manufacturers focusing away from globalization and towards regionalization are resulting in changes to
freight forwarding strategies and product solutions. It cited troubling capacity concerns in the sea-and air-freight markets, as well as manufacturers tending to focus on regional as opposed to global markets which in combination have resulted in changes to freight forwarding strategies and product solutions. The key dynamics cited for driving change in the freight forwarding sector are China no longer being the automatic choice in Asia for goods manufacture, given other emerging markets such as Africa, the Middle East, South America and southeast Asia; and the rise of near-sourcing markets such as Mexico and Turkey benefitting from their proximity to the US and Europe, respectively.
Thai Airways bans shark fin from cargo flights
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hai Airways has become the sixth international airline to ban shark fin from its cargo flights as part of a growing global campaign against the popular delicacy in Asia. The other carriers which have banned shark fin cargo are Philippine Airlines, Air New Zealand, Korean Air, Asiana and Cathay Pacific. Shark fin, highly prized by many in the region, especially in Hong Kong and Chi-
DHL Express to build Tokyo Gateway facility
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HL Express has broken ground on a new EUR67 million gateway facility at Shinkiba. The new 15,000 square metre custom-built facility will be the company’s fourth gateway in Japan and the largest DHL gateway in the world. The company said it was expecting the project to be completed in the first quarter of 2016 to boost capacity and service standards in the face of growing demand. Once complete, it should have the capability to sort 12,000 shipments per hour, and is expected to handle one of the highest volumes of any DHL gateway across the globe.
Cargolux receives 10th 747-8F C
argolux Airlines has taken delivery of its 10th 747-8 freighter from Boeing. Dirk Reich, President and CEO, said: “The delivery of the tenth 747-8F has helped us bring down the average age of our fleet – already one of the youngest in the industry – to a mere 5.8 years.” Apart from the increased fuel efficiency and reduced noise footprint, the 747-8F is the ideal aircraft for the implementation of the airline’s dual hub strategy between Zhengzhou and Luxembourg. The carrier’s goal is to operate multiple daily connections between both locations with the -8F. As a launch customer of the 7478F, Cargolux became the world’s first operator of the type in 2011.
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na where it is commonly served as a soup at wedding banquets and corporate parties. Thai Airways, in a statement, said: “As part of the world community sharing in the great concern for the protection of endangered species and the environment, Thai Airways International has implemented its own official policy to place an embargo on the shipping of shark fin products.”
DHL said it has seen steady growth in the international express market in Japan, despite the kind of economic conditions in the country that have resulted in volatility in the air freight market. The new Tokyo Gateway facility was a strategic part of the company’s investment strategy for the whole Asia Pacific region.
Cargo & Logistics
New cargo terminal at Nairobi airport
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freight logistics company has opened a new air cargo terminal adjacent to the apron at Jomo Kenyatta International Airport (JKIA) in Nairobi. The construction of the $10 million facility was in response to customer demands for a safe, secure air cargo terminal on the airside of JKIA. Siginon Aviationpromoted facility has the longest access to the airside as well as
New technology eliminates fruit contamination risks
offers proximity to the passenger terminal. This therefore provides ease in handling cargo loaded in a freighter or passenger aircraft. The new 5,000-squaremeter air cargo terminal has a general cargo warehouse with an annual throughput of 60,000 tonnes. The terminal includes a perishables center with 2,000 square meters (21,527 square feet) of cold room floor space.
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he latest Electron Beam Pasteurization Technology will stave off the threat of rejection of fruit and food consignments. The Express Tribune says more than 40 countries had adopted the Electron Beam Technology to eliminate germs, pests and insects from food, fruits, vegetables, poultry meat, beef, mutton and packed food. It also prevents the growth of tiny branches in
The perishables center seeks to meet the growing need for cool chain facilities to handle Kenyan flowers. The new terminal
is Siginon’s second facility in addition to a similar terminal at Eldoret International Airport in Kenya.
vegetables, like potato and onion. The technology would also eliminate the need for chemical spray on food products that could have harmful effects on human health. A $3 million Electronic Beam Technology plant has the capacity to scan and treat a 15-ton packed consignment in an hour. The ideal place to install such a plant is the airport premises. Under the process, beta rays pass through pa-
per, cardboard and even plastic to reach packed food products and kill and eliminate germs, pests and insects. This way, goods consignment can be scanned at the last stage of clearance at the customs with no need to open the packaging. A couple of months ago, the European Union banned import of some types of Indian mangoes because of presence of fruit flies in the cargo.
Etihad to revive dormant Alitalia Cargo
JV launches Heathrow Logistics Park
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tihad Airways plans to revive and expand Alitalia’s dormant cargo business after acquiring a 49 percent stake in the perennially loss-making Italian airline. The carrier is paying €387.5 million to become Alitalia’s biggest shareholder and will invest an additional €112.5 million in related assets, including landing slots at London Heathrow airport. Etihad is expected to invest a further €600 million over the next three years to make Alitalia profitable by 2017. Relaunching and expanding Alitalia’s cargo business to serve the Italian market, Europe’s third largest, is a key part of the carrier’s strategy. Alitalia sharply reduced its cargo business and sold its three remaining MD-11 freighters to focus on passengers as part
of a financial restructuring in 2011. Cargoitalia, an Italian airline, moved in to plug the gap, acquiring the Alitalia aircraft and announcing plans to buy five Airbus A330 freighters, but it ceased operations at the end of the year, leaving the market to rival European all-cargo carriers, led by Cargolux and Lufthansa Cargo. Etihad’s freight wing, Etihad Crystal Cargo, boosted revenue by 30 percent to $928 million in 2013 as volume surged 32 percent in a flat global market to nearly 487,000 tonnes. The Alitalia deal will help Etihad, which has a fleet of 10 freighters, to close the gap with its competitors, Emirates and Qatar Airways, which are rapidly increasing their cargo businesses.
6.55-acre logistics park at Heathrow has been launched through a joint venture partnership between Airport Industrial Property Unit Trust (AIPUT) and the Airport Property Partnership (APP). Altitute Heathrow, located near Terminal 4, can accommodate up to 150,000 sq. ft. of industrial space and provide flexible build-to-suit opportunities for a range of uses including air freight, urban logistics, light industrial, catering
production and car showroom. Heathrow Airport is investing £5 billion into its terminals and infrastructure to stimulate growth, whilst there is a backdrop of a constrained supply of grade A warehouse facilities in core Heathrow locations, with levels at an all-time low. AIPUT and APP own and manage over five million sq. ft. of prime logistics accommodation in the Heathrow industrial market.
Delta axes cargo unit
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he Atlanta-based Delta Air Lines will fold cargo sales into its global sales division and bring cargo operations under its airport customer service functions. Delta said the move would strengthen its cargo business by giving it access to resources on the much-larger
passenger side of the house. “With this new structure, Delta Cargo remains a highly valued part of our business, and these changes will provide each group with the resources they need to meet our cargo-related goals,” Delta President Ed Bastian said. September 2014
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Technology
BA develops ‘happiness blanket’ for passengers
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ritish Airways has developed a “happiness blanket”, which will analyze the “meditative state” of fliers and change colours according to the passenger’s mental state. Upon boarding, fliers will be required to affix a headband to their head. The headband will then send brain-waves via Bluetooth to the high-tech blanket, which is embedded with fibre-optic LEDs that change colour to reflect the person’s mood. When the wearer is calm and relaxed, the blanket will glow blue; when they are stressed or anxious, it will glow red. The airline will analyze data from the blankets to evaluate their in-flight services, including the timing of meals and movie options.It will also allow flight attendants to better improve their service, letting them know the best time to approach a potentially grumpy passenger. Dozens of premium-class volunteers tested the devices on trans-Atlantic flight, to some success - the airline found moods tended to fluctuate at the beginning of a flight, but improved when meals arrived and passengers were sleeping.
Honeywell developing new aviation technology
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ngineers with Phoenix-based Honeywell Aerospace are using high-tech simulation labs to create technology designed to make not only airplane cockpits safer, but airport taxiways as well. Virtually every aircraft from nose to tail includes technology from Honeywell Aerospace and its acquired companies. Honeywell is constantly working on new technology, said Bob Witwer, vice president of advanced technology for Honeywell Aerospace. Cockpit simulation labs, also called crew interface motion simulator labs, allow Honeywell pilots to try out new technology in 3-D motion simulation with hydraulic pistons to make the experience realistic. Trans-cranial neural sensing is one technology Honeywell is working on, where pilots can control the plane by thinking about certain ac-
tions. This technology could be out in the next nine to 10 years. In the flight deck of the future, a curved television is a temporary flight simulator that is testing moving 3-D maps of airports. This is an extension of Honeywell’s Smartview Synthetic Vision System, a 3-D terrain and digital map display that shows pilots what is ahead, including weather conditions. The 3-D airport maps give pilots a more realistic look while landing and taxiing, instead of the current 2-D maps.
Also in the lab, engineers are working on voice recognition for controls, expected to come out in the next five to 10 years for commercial use. This would allow pilots to voice their commands for manipulation of maps and other controls during all phases of flight. The challenges come when dealing with people’s varying speech and accents.Honeywell Aerospace is also working on changing displays simply by using hand gestures and eye trackers, according to a report in the Phoenix Business Journal.
Google Glass-style pilot gear could end plane delays T
he days of long flight delays due to terrible weather could soon be over with the introduction of virtual reality-style headgear for airline pilots. The latest advancements in head-up display (HUD) – devices that project aircraft data onto the pilots visor so they don’t need to look away from their normal line of vision – can create a 3D image of the view ahead. The technology means that no matter how bad the visibility is outside, pilots would still be land a plane. Elbit Systems and Rockwell Collins are two of the major players going head to head in this space. Elbit Systems’ Skylens look like a pair of ski goggles with several cameras placed on the plane capturing an
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image which is then used to create a 3D image of the view ahead. Rockwell Collins’ system works in a similar way, using infrared cameras placed on the plane’s fuselage to create a real-time image of what is ahead of the pilot. While Elbit Systems and Rockwell Collins both said their systems had been approved by aviation regulators, analysts said that further extensive use of the products might be difficult to achieve. Both the American and European regulators have demonstrated a reluctance to certify systems for new conditions without extensive proof that there are fail safe practices and what they refer to as equivalent safety using those devices.
Technology
Collaboration to turn new tobacco plant into jet fuel
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oeing, South African Airways (SAA) and SkyNRG have announced that they are collaborating to make sustainable aviation biofuel from a new type of tobacco plant. This initiative broadens cooperation between Boeing and SAA to develop renewable jet fuel in ways that support South Africa’s goals for public health as well as economic and rural development. South Africa is leading efforts to commercialize a valuable new
source of biofuel that can further reduce aviation’s environmental footprint and advance the region’s economy. SkyNRG is expanding production of the hybrid plant known as Solaris as an energy crop that farmers could grow instead of traditional tobacco. Test farming of the plants, which are effectively nicotinefree, is underway in South Africa with biofuel production expected from large and small farms in the next few years.
Initially, oil from the plant’s seeds will be converted into jet fuel. In coming years, Boeing expects emerging technologies to increase South Africa’s aviation biofuel production from the rest of the plant. In October 2013, Boeing and SAA said they would work together to develop a sustainable aviation biofuel supply
GE plans 3-D facility to make jet engine parts
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E Aviation said today that it will spend $50 million on a new 3-D printing initiative at its existing operations in Auburn, a first-of-its-kind project that will mass produce fuel nozzles for jet engines and help raise employment to more than 300 people later this decade. Additive manufacturing, also known as 3-D printing, represents a significant technology breakthrough for the company and the jet propulsion industry. Unlike traditional manufacturing that cuts away at a metal slab to produce parts, 3-D printing “grows” parts from a computer-aided design file using layers of fine metal powder and
chain in Southern Africa. As part of that effort, they are working with the Roundtable on Sustainable Biomaterials to position farmers with small plots of land to grow biofuel feed stocks that provide socioeconomic value to communities without harming food supplies, fresh water or land use.
Boeing’s new method for building 777 fuselages
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an electron beam or laser. It’s a faster way to produce parts, with less waste.GE Aviation’s 300,000-square-foot Auburn plant, which makes machined parts for jet engines, opened last year and now employs more than 70 people.
Equipment installation is expected to begin later this year, with production of the fuel nozzles starting next year. By the end of 2015, the plant could have up to 10 printing machines with the potential to grow to more than 50.
oeing has announced that it is in the final phases of testing and production readiness of a new method for building 777 fuselages as part of its ongoing technology investment strategy. Known as the Fuselage Automated Upright Build (FAUB), this Advanced Manufacturing technology improves workplace safety and increases product quality. This technology has been in development by Boeing since 2012.With this new technology, fuselage sections will be built using automated, guided robots that will fasten the panels of the fuselage together, drilling and filling the more than approximately 60,000 fasteners that are today installed by hand.
new software and sensor system, CASCADE, will reduce carbon emissions and energy costs by 20 percent in airports, the European ComNew system to Amission said. new system was supported by partners in Germany, Italy, Ireland reduce energy andTheSerbia with 2.6 million euros ($3.49 million) of EU funding. costs of airports 450Theairports, Airports Council International (ACI Europe), representing over also committed its support to the project. The pilot testing of the system in Rome’s Fiumicino Airport and Milan’s Malpensa Airport showed that it would save them at least some 6,000 MWh, which equates to 42,000 tons of CO2 and 840,000 euros a year. Nicolas Rehault, coordinator of the CASCADE project, explained that sensors and meters were placed on the infrastructure and communicated information to a central database. The innovative software can detect faults, and suggest corrective actions to the energy management and maintenance teams. Rehault said they want to replicate the solution at other airports, according to Xinhua News Agency. September 2014
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