Cathay Pacific buffeted by $160m loss

Cathay Pacific has suffered consecutive annual losses for the first time in its history, as Hong Kong’s flag carrier remains under pressure from rivals in China and the Gulf

The company, 45 per cent owned by the British conglomerate Swire and 30 per cent owned by Air China, said yesterday that it lost HK$1.26bn ($160m) in 2017. 

It lost HK$575m in 2016. China’s three main state-owned carriers — Air China, China Southern and China Eastern — have made substantial aircraft orders and have been adding more direct routes to Europe, the US and Australasia, partly cutting Cathay out of its lucrative role as a conduit for China’s fast-growing outbound travel

With Gulf airlines such as Emirates and low-cost regional rivals stepping up competition in east and south-east Asiaeconomy-class passenger fares have been squeezed, also hitting other legacy carriers including Singapore Airlines. 

IAG warns of air duty boycott for carrier LEVEL

The UK press have reported that IAG has warned that it could opt to keep new low-cost airline LEVEL out of the UK over air passenger duty (APD).

They note that IAG launched the low-cost, long-haul carrier last year with flights from Barcelona to the US, and in November announced plans to set up a new base from Paris, flying to the Caribbean and North America from July.

IAG’s chief executive Willie Walsh has spoken of expansion plans for the airline, and was initially weighing up Paris and Rome for the choice of its second base, though previously said he would consider the UK for the future. 

Recently though, Walsh said he had written to MPs, saying air passenger duty – which is levied against each passenger on every flight departing from the UK – undermines Britain’s position as a global trading nation post-Brexit, and reduces the chance of him bringing LEVEL to the UK.

He said: “In Spain and France, LEVEL can offer lower fares than it can in the UK – and that goes for other long-haul low-cost airlines too. MPs need to know that APD undermines our ability to introduce new low-cost flights that would benefit their constituents,” Walsh added. “If APD was axed, IAG could open new routes and operate LEVEL from regional airports.” Walsh has told MPs that abolishing APD would make it more likely that LEVEL could operate from Birmingham, Cardiff, Edinburgh and Manchester, saying it is not financially viable with LEVEL’s fares starting at around £88 one-way, when long-haul economy APD is £78. 

A spokesperson for the Treasury said: “We have frozen Air Passenger Duty for most flights, keeping the cost of travel down for 95 per cent of the population.”

Lauda teams up with Condor to sell flights for Niki relaunch 

Niki Lauda has teamed up with German holiday airline Condor to sell flights for Laudamotion, the airline created after he bought Austrian carrier Niki out of insolvency.

Lauda agreed a deal to buy Niki, a unit of collapsed Air Berlin, in January, beating a rival offer from IAG.

Lauda plans to restart the carrier with 15 planes by the end of March, scrap the Niki brand and integrate it into his Laudamotion business, which offers business charter flights

Air Belgium registers its first two planes

 Air Belgium’s first two planes were registered in mid-February, taking the airline a step further towards meeting an end-of-March target date for launching its first commercial flight. 

The two Airbus A340 planes were added to the national air register todayAir Belgium is still awaiting its Air Operator’s Certificate (AOC) which the airline is hoping to receive imminently.

Ukraine International Airlines to almost double fleet and passenger volume within four years 

Ukraine International Airlines plans to double its passenger volume over the next four years. By the end of 2021 the airline aims to carry 13.3 million passengers.

The chairman of the corporation’s supervisory board, Aron Mayberg, announced that the company intends to boost the volume of interlining passengers by 16 percentage points, to 60.4 per cent.

In 2017, the airline handled 6.9 million passengers, it expects the figure to rise to 8.2 million this year. Next year, the company expects to increase passenger handling to 9.9 million and to 11.4 million in 2020. 

The increase in passenger handling requires a proportional expansion of the airline’s fleet and the airline seeks to boost its fleet by 90 per cent over the course of the next four years – from 34 aircrafts in 2017 to 74 by the end of 2021. 

Emirates president hits back at US allegations of Open Skies violations 

Emirates’ president Sir Tim Clark has hit back at American carriers accusing the Gulf airline of unjustly benefiting from government subsidies, saying that his company “has nothing to hide.”

Sir Tim denied charges that Emirates has violated international Open Skies agreements, as alleged by the industry trade group Airlines for America. “We have provided our financials. We treat ourselves like a publicly listed company. We’re not, we’re a private company. The government of Dubai, which owns Emirates, doesn’t have to publish anything. But we publish everything to the sixth decimal place and we’re audited. We’ve never made anything secret because we have nothing to hide.” 

American, Delta, and United Airlines have tried to block Emirates from expanding in the US, claiming that a purported $50 billion in subsidies received from the government of Dubai gives Emirates an unfair advantage over domestic carriers.

Ryanair to axe Glasgow Airport base 

Ryanair is to close its base at Glasgow Airport resulting in the loss of at least 300 jobs. 

The airline, which also operates out of Prestwick and Edinburgh, made the announcement as it unveiled its schedule for winter 2018. 

The company said 11 new routes would be added to its Edinburgh schedule.  

Chief commercial officer David O’Brien blamed the change on the cost of air passenger duty and said Glasgow “simply could not bear the burden”. Despite the closure of its Glasgow base, the airline will retain three routes out of Glasgow Airport – Dublin, Rostov, Krakov.

Rolls-Royce aircraft engine fix will take ‘some years’

Most media outlets are reporting that the aerospace giant Rolls Royce has said that parts in its Trent 1000 engines were wearing out faster than expected but that it “had a solution” to the problem. 

It came as Rolls-Royce reported better-than-expected results for 2017, following a record loss in 2016. However, it signalled job losses ahead as the firm continues to cut costs. 

In December, Air New Zealand became the latest airliner to ground some of its flights because of problems with its Rolls-Royce engines. Japan’s ANA, British Airways and Virgin Atlantic have also had problems. Rolls-Royce said up to 500 Trent 1000 engines – used on Boeing 787 planes – and some Trent 900 engines had technical problems. 

Boss Warren East told BBC Radio 4’s Today programme: “First you have to realise that all mechanical things wear out over time, and some of the parts in our Trent engines are wearing out faster than we originally forecast. “We’re having to manage the operational impacts because it’s quite disruptive for our customers.” He added: “We have a solution, we have a plan, it will take some years to fully implement the modifications in all the engines which are in service.”  

Ryanair to jettison UK investors 

In a recent interview with Ryanair chief executive Michael O’Leary, he warned that he will force British shareholders to sell their stock in the budget airline if there is a hard Brexit.

O’Leary has repeatedly claimed that flights between Britain and continental Europe are likely to be grounded in April next year in the event of a failure to strike a Brexit deal.

Ryanair has already started warning on passengers’ tickets of the risk that flights from April 1, 2019, could be cancelled. The interviewer has said that to keep his planes flying, O’Leary will need to demonstrate to European regulators that the majority of his investors are EU citizens and explained that at present, 56 per cent of its shareholders are European, and within that about 20 per cent are from the UK.

The airline boss is examining a number of ways to give incentives to non-EU investors to dump Ryanair shares. If he cannot persuade investors to cash out, he will force a sale. The Irish airline has applied for a British operating certificate to continue its domestic UK flights. O’Leary admitted that rules requiring European airlines to be majority owned by European shareholders are a ‘challenge’. O’Leary said he believes Willie Walsh, boss of British Airways owner IAG, is ‘ducking’ the ownership issue raised by Brexit, reiterating his claim that it will force IAG to sell Aer Lingus and Iberia. IAG has not said what percentage of its shareholders are European.  

In a separate article, the Ryanair boss talked about recent difficulties with Ryanair pilots. To avoid strikes over Christmas Mr O’Leary was forced to recognise union representation for pilots. A new pay deal with pilots and cabin crew will add €100m (£88m) to Ryanair’s costs, increasing pilots’ pay by 20 per cent. He said the airline had been hit with ‘laughable demands’ such as paying pilots €1,000 each when a flight finished after midnight.    

Vote secures easyJet’s right to fly after Brexit 

easyJet has pushed ahead with plans to protect its flying rights after Brexit following a shareholder vote in favour of legal changes to help ensure the airline meets EU ownership rules.

Shareholders have recently met at easyJet’s annual meeting and approved changes to its articles of association that will ensure it is EU-owned and controlled after Brexit.

The article suggests that the move means it has the power to force UK shareholders to divest their shares if the airline needs them to. John Barton, chairman, said: “Brexit is one of the biggest issues facing the European airline industry.” He said that while the airline had no ‘immediate intention’ of using these powers, they were an ‘important element in ensuring that easyJet has the ability to maintain EU ownership and control at all times should we need to do so’.

easyJet said close to 50 per cent of its shares were already held by European Economic Area nationals. It also said it expected the Civil Aviation Authority to grant it an air operator’s certificate in the coming weeks to cover its UK-based aircraft. It added that the government had confirmed that easyJet UK would be treated as a British carrier after Brexit even though its parent was EU-owned.