Airlines increase baggage allowance: worth the weight?

Hot on the heels of Emirates and Qantas Airways, legacy carriers like Singapore Airlines and Garuda Indonesia recently announced a 10-kilogramme extra baggage allowance for passengers across all classes.

While analysts say other carriers might soon be pressured to do the same in order to keep up, at the end of the day, it still comes down to dollars and cents.

Asia Pacific airlines are hoping to hit the sweet spot with more customers by upping the baggage allowance, starting from at least an extra seven kilogrammes in economy class.

Qatar Airways also added an extra seven kilogrammes for its economy class passengers, from 23 to 30 kilogrammes in September 2013. Emirates extended the baggage allowance in 2009 and Etihad Airways upped theirs in 2012.

"It's ironic that many of these legacy carriers that have been picky with passengers for being overweight in terms of their baggage and suddenly, because of the intense competition from low-cost carriers, they're saying ‘here's another 10-kilogramme allowance’. I don't think it will make much of a difference," said Shukor Yusof, an analyst at Standard & Poor’s capital IQ.

"Most people travelling nowadays travel very lightly. They don't need a lot of baggage. But if you're allowing 10 kilogrammes, I think it is negligible. In the whole context of whether it is going to increase your bottom-line, I don't think it will have any impact at all. What will impact is whether or not fuel prices will stay low."

Travellers typically have to pay for checked-in baggage in a low-cost carrier (LCC). But that playing field is changing with the likes of Thai domestic LCCs such as Nok Air and Thai Lion Air that offer free 15-kilogramme baggage limits, effectively competing with the free 20-kilogramme allowance offered by most legacy carriers.

Besides Garuda Indonesia, Singapore Airlines and Malaysia Airlines, China Southern Airlines and Qantas Airways have also increased their baggage allowance for their customers on certain routes.

But analysts say this will not go very far in terms of increasing the airlines' bottom-line. Rather, they say these full serviced carriers should work on enhancing other product offerings to stand out from the competition.

“There are many other ways to compete. In-flight entertainment is one, more comfortable seating is another, greater choice in terms of selection of the type of services that you want and the type that you don't need, and this should result in a lower-price ticket,” said Paul Ng, global head of aviation at Stephenson Harwood.

"For SIA, they already provide the best service in economy in the region; you've got food, drink service, excellent in-flight entertainment,” said Greg Waldron, Asia managing editor at Flight Global.

“Unfortunately a lot of the time when people choose air tickets, they choose to buy on price and that's always going to be a challenge for airlines like this. You can always throw things at the customer but it's always going to come back to people's wallets. "

Baggage and ticket prices aside, experts say it all boils down to the cost of fuel that will ultimately affect the airlines' bottom-line. 

SOURCE

Week 36: PPL Flight School Week 5

Alas, I got scheduled for my virgin flight this week, just like many of my course mates. It was exciting and nervous for me, and I couldn't get much sleep the night before. I went through my notes and checklists to make sure I know my things well and did some mental flying by staring into space haha!! Ran through the flying in my mind, trying to piece together what I learned and experienced in the simulator.

On the day itself, the weather wasn't 100% ideal. Turbulence was reported and the flight before mine was quite bumpy. After hearing cases of airsickness from other trainees, it got me quite worried. Nevertheless, the instructor was very understanding, suggesting that we go up there to have a try. If I can't tolerate the turbulence, we will head back.

On to the tarmac I headed, doing the pre-flight checks under supervision from my instructor, with the winds blowing so hard the ailerons were flapping non-stop, scary stuff imagining how it will be like up there. Before I know it, I brought the propeller spinning at 1000rpm right in front of me. Put on my headset, release the park brake and the taxi starts.

Taxi isn't as hard as I expected, just minute adjustments needed using the rudder, keeping the pace under control is the key in not going zig-zag as the faster you go, the harder it is to manage the direction. More checklists to go through at the run-up bay before heading onto the runway.

Then the moment comes. Steering the yoke into the wind, 10degrees flaps, full throttle and pull up at 55kts rotate speed. The C172S lifted off the ground effortlessly with the wind blowing me off course instantly; I saw the runway just beside me right after rotating, instead of under me.

With a positive climb rate to 200ft above ground level, the flaps was retracted. I was climbing at a comfortable rate and all I could see in front of me was the sky and clouds without the horizon. The climb was smooth and I leveled off at 4500ft. Not much turbulence at this height but I was still pretty tensed up, anticipating for any crazy bumps.

The real lesson starts from here. Maintaining height, attitude and balance while flying straight&level and banking left/right. Finally I could see and feel whatever I've learned in the text. The experience was amazing, aside from a move that got my balls shrunk a little. Without much warning, I was subjected to a steep right turn at 60degrees. Oh my gosh, what I saw was just images of the ground flashing past my windscreen. The gravitational force was something new, maybe refreshing hahaha.

The view up there is really great. I could see so far ahead at the height I was in and showers of rain can be spotted very far ahead. Things on ground are small; wide roads become spaghetti thin. The feeling was totally surreal, that I'm up in the air having an aircraft in my control.

It sounds fun from here, but there's really lots of work to do before and after the lesson. I did a self evaluation after the flight and tried to find aspects of my flying which can be improved. Even though the instructor said nothing about my flying is having any issue, I felt there is a need to always do better.

• My taxi was good but it wasn't natural. I had to constantly remind my brain to do it correctly.
• My banking height wasn't consistent, my back pressure was either too little or too much. I need to find the sweet spot of amount of back pressure needed once I turn the yoke.
• Tendency of me looking at the G1000 is very high, depending on it highly during banks, making myself feeling very mechanical by not looking at the horizon to determine the angle of bank.
• I got lost. I had no idea of where was I after a while.
• My mind was very occupied with the flying. I could hear radio comms but I wasn't listening.

Oh, and I felt air sick towards the end of the lesson. Thank god we were already heading back to land by then. Hopefully it won't hit me on my second flight.

Lunch 301113. Starting to like lamb chop, only if it's marinated correctly

Sims of the PA-44 seminole. A plane which I will not be trained on, but would love a ride on

Dinner 301113

My issued headset

Dinner 011213. KL hokkien mee by my house mate!!

Magnum at only AUD 1.00

My maiden flight

Prata craving satisfied at home, yum~~

Weather here is erratic, but the rainbow always shows after the wets

Dinner 051213

One of the nights, the TV was showing Fast Five to commemorate the death of Paul Walker. Being an automobile enthusiast myself, his death was quite a shocker and I'm real sad about it

Lunch 061213

A glass of chilled coke to end the week

Russia fears that some pilots have fake licenses

Russian investigators are searching the state aviation agency to see if some pilots may have fake licenses — part of an investigation into a plane crash last month that killed all 50 people on board.

Investigative Committee spokesman Vladimir Markin said in a statement today (Dec 6) that investigators believe some pilots working for Russian airlines have received fake licenses in centres certified by the aviation agency.

Mr Markin said there were reasons to believe that the pilot who sent the Boeing 737 into a near-vertical dive after an aborted first landing attempt had received his license illegally in a small training centre that was no longer functioning.

No criminal charges have been filed yet in the crash, which took place in the city of Kazan, 720km east of Moscow.

SOURCE

Qantas downgraded to "junk" status by ratings agency S&P

Embattled Australian carrier Qantas' credit rating was downgraded by Standard & Poor's to "junk" status Friday after the airline issued a shock profit warning and slashed jobs.

Qantas on Thursday flagged a half-year loss of up to A$300 million (US$271 million) and said it would axe 1,000 jobs as it struggles under the weight of record fuel costs and fierce competition from subsidised rivals.

In response, S&P lowered the airline's rating from BBB-, the lowest investment grade, to BB+ and placed it on a creditwatch with negative implications.

That puts Qantas in what is known as "junk" status among professionals, increasing the cost of financing for the carrier and restricting access to investors that do not put their money in lower rated companies.

"The downgrades reflect our view that intense competition in the airline industry has weakened Qantas' business risk profile to 'fair' from 'satisfactory', and financial risk profile to 'significant' from 'intermediate'," S&P said in a statement.

"We don't expect Qantas to recover to a credit profile commensurate with a 'BBB-' rating in the near term."

The move comes after another ratings agency, Moody's, on Thursday put the airline's investment-grade Baa rating on review for a potential downgrade, saying the forecast conditions were "outside the rating expectation".

Qantas chief executive Alan Joyce on Thursday said the challenges facing the airline were "immense".

"Since the global financial crisis, Qantas has confronted a fiercely difficult operating environment -- including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas' high cost base," he said.

"The Australian international market is the toughest anywhere in the world."

As well as axing 1,000 jobs, Joyce said he would take a 38 per cent pay cut while the airline would conduct a review of spending with top suppliers and put in place a salary and bonus freeze.

Qantas chief financial officer Gareth Evans said the downgrade was not unexpected.

"It highlights the unprecedented pressures that the Qantas Group is facing from several external forces but particularly from an uneven playing field in the Australian aviation market," he said.

The airline claims domestic rival Virgin Australia, which is majority-owned by state-backed Singapore Airlines, Air New Zealand and Etihad, is waging a campaign to weaken it in the lucrative domestic market with cheap seats underwritten by foreign cash injections.

Joyce has been lobbying the government for the easing of restrictions that limit foreign ownership in the national carrier to 49 percent, or state intervention to shore up Qantas.

Despite the downgrade, Evans said Qantas retained a strong financial position, including a large cash balance and a significant asset base.

"The cost cutting and structural review we announced yesterday is aimed at leveraging these strengths to ensure the Qantas Group continues to deliver for its shareholders and customers," he said.

"It remains business as usual across the Qantas Group."

An update on the structural review is expected in February, prompting speculation a sell-off of its Jetstar assets in Asia could be on the cards.

SOURCE

Qantas to cut 1,000 jobs, says challenges "immense"

Australian carrier Qantas announced the axing of 1,000 jobs and warned of "immense" challenges ahead in a shock profit downgrade Thursday, flagging a half-year loss of up to A$300 million (US$271 million).

Chief executive Alan Joyce said conditions had seen a "marked" deterioration and the airline was battling "extraordinary circumstances" including record fuel costs, a strong Australian dollar and fierce competition from subsidised rivals.

Qantas shares plummeted up to 17 per cent to 99.5 cents on the news, which comes just months after the carrier returned to a modest A$5 million annual profit in August following a strategic tie-up with Emirates.

"The challenges we now face are immense," Joyce said in an update to the Australian stock exchange.

"Since the global financial crisis, Qantas has confronted a fiercely difficult operating environment -- including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas' high cost base," he added.

"The Australian international market is the toughest anywhere in the world."

Qantas was optimistic it had turned a corner after inking a major partnership with Dubai-based Emirates and reversing its 2012 annual loss -- the first since privatisation -- but Thursday's numbers show it is still facing significant headwinds.

Joyce said Qantas expected to report a loss before tax in the six months to December 31 of A$250-300 million, with passenger loads slipping significantly in November as increased competition drove down the Australian carrier's market share.

Fuel costs for the half-year were A$2.27 billion -- A$88 million higher than in the second half of 2012.

"Urgent" action was needed to salvage the Flying Kangaroo's profitability, Joyce said, including the sacking of "at least 1,000" staff, a cut to his own pay and that of the Qantas board, a review of spending with top suppliers and a salary and bonus freeze.

"We have reduced the group's unit costs, excluding fuel, by a total of 19 per cent since FY09, including by five per cent in FY13. But these actions are not enough to deal with the current situation," he said.

Joyce said "no options will be off the table" as he continues lobbying for a more even playing field in Australia's aviation sector, including the easing of foreign investment restrictions or government intervention to shore up Qantas.

"Political leaders recognise Qantas' strategic importance, its critical role in providing essential air services, and the benefits to Australia of a strong and viable national carrier," he said.

"Government action will, however, be key in enabling us to keep competing effectively on a level playing field."

Under the Qantas Sale Act, dating from 1995 when the airline was privatised, foreign ownership in the national carrier is limited to 49 per cent, and Joyce wants that revisited in the face of what he described as "unprecedented distortion" by foreign backers of the Australian market.

"Our competitors in the international market, almost all owned or generously supported by their governments, have increased capacity to pursue Australian dollar profits, changing the shape of the market permanently," the Qantas chief said.

He again took aim at domestic rival Virgin Australia, which is now majority owned by state-backed Singapore Airlines, Air New Zealand and Etihad, accusing it of a deliberate "strategy to weaken Qantas in the domestic market" with cheap seats underwritten by foreign cash injections.

Joyce has been locked in a bitter war of words with Virgin in recent weeks over what he has described as "predatory" behaviour by his rivals.

SOURCE

Dutch national carrier KLM cancels flights as storm looms

Dutch national carrier KLM said it has scrapped 84 flights to and from Amsterdam's Schiphol airport scheduled for Thursday after forecasters sounded a "code orange" extreme weather warning for the next 24 hours.

The Netherlands is preparing for heavy storms with surging tides and winds predicted to gust up to 130 kilometres per hour in places in the north.

In the south, the landmark Eastern Scheldt storm surge barrier has been closed off for the first time in six years, public broadcaster NOS reported.

"As a result of the extreme weather expected, we have cancelled 84 flights to and from Amsterdam," KLM (Royal Dutch Airlines) spokesman Joost Ruempol told AFP.

"These are flights going to and coming in from across the continent," he added.

Inter-continental flights will go ahead as scheduled, but travellers flying KLM to European destinations are advised to check for regular updates on the airline's website, Ruempol said.

Schiphol is Europe's fourth-busiest airport with between 120,000 to 140,000 passengers passing through daily.

The storm will approach the Netherlands from the west and was a result of a low-pressure system over Norway, bringing extreme weather to the Dutch coast by Thursday afternoon, a weather website said.

Coupled with a spring tide, high winds could result in a heavy storm surge and in many places, the Dutch have been taking measures including raising dykes and moving vehicles away from piers and quays.

The Eastern Scheldt storm surge barrier, part of fortifications to protect the low-lying Netherlands from the North Sea, has been closed off for the first time since 2007, the NOS said.

The flood barrier is part of the so-called Delta Works which were built after disastrous floods in 1953 which left almost 2,000 people dead.

Back then, sea defences were overwhelmed and dykes broke as a result of heavy storms, putting large swathes of the southern Dutch province of Zeeland under water.

A code orange warning is one level below a "code red alert" - given out by the Royal Dutch Meterological Institute (KNMI) for the worst possible weather conditions.

SOURCE

Kuwait Airways to buy 25 planes from Airbus

Kuwait Airways Co has signed a Memorandum of Understanding (MOU) with Airbus to buy 25 planes with an option for 10 more and to lease 12 planes, its acting chairman said on Tuesday.

"We have signed a Memorandum of Understanding with Airbus to purchase 25 planes to replace the existing ageing fleet," Jassar al-Jassar told a press conference.

He declined to reveal the value of the deal citing a confidentiality clause but local media, when talks of the deal first surfaced in May, estimated the cost at around $3 billion.

State-owned KAC, which is undergoing privatisation, signed a letter of acceptance for the deal in May.

He said the airline has obtained all the necessary authorisations from the government.

Financial consultant for the deal Amani Buresli, a former minister of commerce, said the agreement includes the purchase of 15 A320neo and 10 A350-900 planes with the option to buy 10 more, five from each category.

She said delivery of the purchased planes would start in 2019 and the last planes would be delivered in 2020.

In the meantime, KAC will lease 12 planes, seven A320 and five A330-200, from the European manufacturer.

The final contract for the deal, the first plane order by KAC in more than 20 years, will be signed after a month, she said.

Part of the financing will be done through a syndicated loan by international and local banks and for the other part KAC will issue bonds or Islamic Sukuk, she said.

In addition to modernising its fleet, the loss-making KAC wants to make the airline profitable before offering a local or foreign investor a 40 percent stake.

Kuwait Airways has posted losses in all but one of the past 21 years, amounting to a total of more than $2.7 billion, which has been covered by the government.

SOURCE