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Aviation News March 2006

Booming aviation industry

LONDON, March 29 /PRNewswire/ -- The tremendous growth in air traffic, characterised by the proliferation and emergence of new low-cost carriers (LCC) in Asia Pacific, has garnered the interest of foreign investors. Also, an increase in domestic and international fleet movements as well as fleet utilisation has hiked aviation stocks. These factors are supporting growth in the commercial aircraft and engine maintenance, repair and overhauling (MRO) markets in Asia Pacific. Frost & Sullivan finds that the Asian Pacific Commercial Aircraft & Engine MRO Markets totalled $8.71 billion in 2005 and can reach $12.90 billion in 2011.  

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants an overview of the latest analysis of the Asian Pacific Commercial Aircraft & Engine MRO Markets, then send an email to Srividhya Parthasarathy, Corporate Communications at with your full name, company name, title, telephone number, fax number and email. Upon receipt of the above information, an overview will be sent to you by e-mail. "Governments in Asia Pacific are striving hard to liberalise this sector by introducing open skies policies and permitting domestic airlines to fly abroad," explains Frost & Sullivan Industry Manager Subhranshu Sekhar Das. "This has created a rush of low-cost airlines entering the domestic market with competitive pricing in line with rising consumer disposal incomes, fuelling increased air travel demand."

Air traffic has made a rapid recovery following the September 11 terrorist attacks and has registered tremendous increase in revenues per miles (RPM) due to customer patronage of large commercial and cargo carriers. To meet this growing demand, airlines are commissioning new aircraft to expand their fleet. This is likely to have a significant impact on the engine MRO markets as an increase in air travel/aircraft utilisation hours directly correlates to a rise in aircraft maintenance to include major overhauls. Although air traffic is increasing, these markets are likely to register a moderate compound annual growth rate of 7.2 per cent. The possibility of additional terrorist attacks, the cost of increasingly sophisticated air travel security measures and the impact of future oil prices will contribute to this modest growth rate. In addition, airline affiliates are being pressured to offer high-quality, cost-effective MRO services to attract foreign airlines by offering lower labour rates. 

"The emergence of LCCs caused a shift in the balance of power and as a result, original equipment manufacturers (OEMs) should now provide round-the-clock services in line with operators' MRO requirements," notes Mr. Das. "In addition, OEMs need to form joint ventures and partnerships with local participants and properly utilise lower costs of labour as well as cater to different customer groups with higher value-added proposition." Moreover, significant capital investment with risk costs and extended return on investment (ROI) make setting up an independent world-class total MRO in Asia a challenge. Despite these challenges, the first airframe heavy checks and engine overhaul during 2006 and 2007 will contribute significantly to the growth of these markets. In addition, LCCs have forced legacy carriers in Asia Pacific to rethink and slash airfare dramatically by up to 30-40 per cent as well as assess and acquire in-house low-cost maintenance. A combination of these factors and the predicted tripling of air cargo traffic are likely to encourage steady revenues in these markets. 

Asian Pacific Commercial Aircraft & Engine MRO Markets is part of the Maintenance Repair & Overhaul subscription and it evaluates the competitive scenario of these markets to forecast potential business opportunities for participants. In addition, this study also analyses the present and future demand for the MRO markets by studying the revenues. Executive summaries and analyst interviews are available to the press. Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

German court gives Hamburg Airbus runway green light

HAMBURG, Germany, March 27 (Reuters) - A German court has lifted a suspension on the building of a runway extension in the northern city of Hamburg which will allow the new Airbus A380 superjumbo to land there, authorities said on Monday. A building ban had been imposed to protect the rights of those who owned land at the site and were opposed to the extension of the runway. The court ended the suspension after the city acquired the property in question and made changes to the building plans.  

US air crashes up in 2005, but fatalities drop

WASHINGTON, March 17 (Reuters) - Accidents in the United States involving commercial airlines and private aircraft rose last year, but fatalities declined, according to safety figures released on Friday. The National Transportation Safety Board, which is responsible for investigating transportation accidents, said in its annual review that civil aviation accidents rose to 1,779 last year from 1,717 in 2004. "The increase in accidents is disappointing," said the safety board's acting chairman, Mark Rosenker. "But the decrease in total fatalities is a hopeful sign." Fatalities fell to 600 last year from 636 in 2004. Virtually all of the accidents and deaths occurred in general aviation crashes, those involving small planes. The fatal accident rate and the fatality rate both increased for that group of aircraft. There were 32 accidents involving scheduled airline operations. Twenty-two deaths occurred in three incidents, including the first fatality involving a Southwest Airlines flight. In that accident last December, a Southwest jet skidded off a snowy runway at Chicago's Midway Airport and struck a car, killing a boy in the vehicle. Also in December, a Chalk Ocean Airways plane broke up in flight shortly after takeoff from Miami, killing 20 people. Last June at Washington's Reagan National airport, a ground worker operating a mobile baggage loader was killed after striking an aircraft being prepared for flight.   

Transat to acquire Thomas Cook Travel in Canada

MONTREAL, March 13 /CNW Telbec/ - Transat A.T. Inc., one of the world's largest integrated tourism companies and Canada's holiday travel leader, announced today that it will acquire Canadian travel agency network Thomas Cook Travel Limited, for an amount of $7.4 million. This network includes 190 travel agencies, 124 of which are franchised and 66 owned, under the Thomas Cook and Marlin Travel banners, as well as 22 foreign exchange offices, 19 of which are located in the travel agencies. This transaction is subject to certain conditions. "With this acquisition, Transat is strengthening its presence in Ontario and Western Canada, which is in line with our growth strategy and our business model," said Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc. "Our customers will be the first to benefit from this acquisition, which will enhance our distribution efficiency and our product line.     

The transaction also means Transat is taking on board a team of experienced travel professionals whose knowledge and expertise our customers can rely on." The Thomas Cook Travel Limited acquisition makes Transat the country's largest travel agency network, with 430 outlets. Transat's affiliated distribution network in Canada includes 102 Club Voyages agencies, 62 Voyages en Liberté agencies, 53 TravelPlus agencies, in addition to 22 tripcentral.ca agencies, the exit.ca online agency and now the 190 Thomas Cook and Marlin Travel agencies and three stand alone foreign exchange offices. Thomas Cook travel Limited , headquartered in Mississauga, Ontario, employs 384 people across the country.

MIG chief to head Russia's new United Aviation Co.

MOSCOW,  March 6 (Reuters) - Russia's United Aviation Company (UAC), set up last month to revive the nation's ailing aviation industry, will be led by Alexei Fyodorov, the head of combat plane maker MiG, Prime Minister Mikhail Fradkov said on Monday. President Vladimir Putin decreed in February that all Russia's airplane makers be merged into the state-run UAC in which the state intends to hold no less than 75 percent. The decree gave the government until April 1, 2007 as the deadline for forming the UAC and establishing the shares of private shareholders in its charter capital. "We propose that Alexei Fyodorov who heads MiG ... takes up the post of future UAC chief, once the company has been registered," Russian news agencies quoted Fradkov as telling a government meeting chaired by Putin. 

Government officials have said that the UAC, with a forecast annual turnover of $7-8 billion, will compete with international aviation giants more successfully than individual planer-makers. Boeing and Airbus are both competing in the tendering for a $3 billion contract to deliver more than 20 long-haul airplanes to Russian airline Aeroflot. Industry analysts view the tendering as just the first major step taken by the two Western rivals in the lucrative market of the post-Soviet Commonwealth of Independent States. The UAC, apart from state-controlled Russian plane-makers will also feature private combat plane maker Irkut, which is working with Boeing on the Russian Regional Jet (RRJ) project. Fyodorov, a 53-year-old professional aviation engineer, worked for about 30 years for Irkut, rising to the position of its general director, before finally becoming MiG's chief in 2004.

Domodedovo airport traffic to double by 2015

MOSCOW, March 1 /PRNewswire/ -- EAST LINE Group - Moscow Domodedovo Airport, operated by EAST LINE Group, expects its passenger traffic to more than double by 2015, with the forecast based on the positive dynamics of growth since 2001. In 2001, passenger throughput of the airport amounted only to 3,859,402 people. However, active investment campaign along with marketing strategy aimed at attracting new airlines and widening route network brought their solid results. In 2002, passenger traffic grew to 6,661,721 passengers (a 72.6% increase over 2001), in 2003 - 9,364,162 passengers (40.6% growth against 2002), 2004 - 12,066,793 (a 28.9% increase comparing with 2003).

In 2005, overall passenger traffic of the airport reached 13,960,000 passengers, a 15.7% increase over 2004. Domodedovo became the leader in the Moscow aviation hub in terms of passenger throughput. Statistics for the period of 1991 through 2005 (passengers flown from airport) show that in the late 1990s EAST LINE Group broke a dramatic negative trend and the outgoing passenger traffic started to rise. According to the forecast unveiled by EAST LINE Group, in 2006 passenger traffic will reach 16,200,000 (16.1% year-on-year increase), in 2010 - it will amount to over 22,000,000 passengers and in 2015 - to about 30,000,000.

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