Week in brief 26 August 2010

Air New Zealand has announced normalised earnings before taxation of NZ$137 million for last financial year, a number that is down $8 million. "The uncertainty surrounding the global economic recovery has continued to suppress demand for air travel over the past 12 months," says Air New Zealand Chairman John Palmer. "The Board has strong confidence in the airline's ability to adapt to change and return stronger profitability in the medium term, while also recognising the need for preserving financial flexibility through this extended period of uncertainty."

Key highlights of the report include: Operating revenue down 12 per cent to $4 billion; passenger demand down 4.7 per cent; load factor up 2.8 points to 81.8 per cent; net cash position $1.1 billion; and a final dividend of 4 cents per share

IATA reports that Asia-Pacific carriers outperformed the industry average with a 10.9 per cent growth in July. This is consistent with the region’s 10.6 per cent growth measured year-to-date. A July capacity increase of less than half the demand growth (5.1 per cent) pushed load factors higher. Leading the industry recovery, the region’s carriers are expected to report a profit of US$2.2 billion. This will be the largest gain in dollar terms in 2010 compared to 2009. With cargo, IATA says that the two-speed recovery continues to see weak growth by European carriers of 12.1 per cent in July, less than half the 25.3 per cent increase by Asia-Pacific carriers or the 27.1 per cent growth recorded by North American carriers.

Qantas is adding premium economy product to six of its B744s for use on services to Tokyo and Frankfurt. That takes the number of premium economy destinations for the airline to 10 and underscores the increasing popularity of the product. CEO Alan Joyce has also suggested that the number of premium economy seats on the airline's A380s might also be increased.

And in another move that suggests Qantas is gearing up to withstand any challenge from the 'new' Virgin Blue, the airline has announced that it will increase domestic capacity by 9.6 per cent, or around 66,000 seats per week. The increase will include new aircraft and routes, as well as a higher tempo on some established routes. But within these 'group' figures is the most telling aspect of the strategy - an increase in Jetstar domestic capacity of "up to 30 per cent in this financial year". 

CASA has given approval to an Australian supplemental type certificate for the Cessna Conquest which can allow the aircraft to be operated for up to 40,000 hours flying time. This almost doubles the life span of the aircraft established by Cessna in 2007, when the manufacturer set a limit of 22,500 hours after deciding not to develop an ageing aircraft maintenance program. The life extension program for Australia was developed by TAE working in conjunction with Aeronautical Engineers Australia. There are 32 Conquests currently on the Australian register.

While progressing its previously announced inquiry into ageing aircraft, CASA has discovered that there are those who actually prefer to operate older aircraft - and not just because it saves the significant costs of investing in new aircraft. CASA Says that, "a number of people expressed the view that older 12 to 18 seat aircraft were more attractive to operate than more modern aircraft such as a Cessna Caravan. Factors influencing this view are performance, twin engines, two pilot operations and costs. Some people renting general aviation aircraft also expressed a preference for older aircraft, despite th clear safety advantages of newer models."

In the US, Embry-Riddle Aeronautical University has completed the first long-distance flight of a light aircraft using a lead-free renewable fuel which can be synthesized from a variety of biomass sources. The fuel, which had already passed the FAA detonation test, was used in one engine of a Seminole on a round trip from Dayton Beach to Oshkosh, while conventional 100LL avgas was used in the ohter engine. The aircraft required no modification to operate with the fuel.