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For decades, the two were rivals: Singapore Airlines and Cathay Pacific cornered the market in long-haul business travel, connecting Asia to the rest of the world. Now both face headwinds from a similar direction. Cathay Pacific announced 600 job cuts at headquarters this week after months of turbulence that saw the Hong Kong carrier’s first annual loss for eight years and the departure of its chief executive. The rise of Chinese carriers has buffeted both of Asia’s marquee airlines at a time when they were already under pressure from Gulf airlines and low-cost alternatives.  Declining financing costs for new jets have encouraged airlines to add capacity. Analysts say weak passenger yields — a measure of the fare paid per kilometre travelled — are likely to persist as Chinese rivals expand aggressively.  Low fuel prices will intensify competition, encouraging rival airlines to cut fares in an already highly competitive Asian market.  “Overall, the airline industry is suffering from oversupply,” said Corrine Png, who runs independent equity research house Crucial Perspective.  “Traffic is growing but capacity is growing in excess of it. Airlines such as Singapore Airlines have had to discount [fares] to fill up the planes.” The broader narrative behind both airlines’ troubles is the shift away from reliance on Singapore and Hong Kong as connectors for outbound Asian travel.  Both airlines played an important role in their cities’ transformation from gritty, commercial centres into unlikely tourist destinations. But now, rather than stop over in Singapore on their way to Sydney, mainland Chinese tourists are flying directly to Australia on their domestic carriers. <br/>

Ethiopian Airlines was betting Airbus’s new A350 widebody would help it lure lucrative business-class passengers away from the likes of Emirates, but nagging delivery issues are putting Africa’s largest carrier behind schedule. The airline won’t receive 10 new planes by the end of June as planned, with some coming as late as next year, said Thomas Gabreyohannes, the carrier’s director for Germany and central Europe. Ethiopian is counting on the A350s to increase sales of premium tickets, similar to the boost it saw after becoming the first African airline to fly Boeing Co.’s 787 long-haul Dreamliners. “When we received the Dreamliner, our business-class traffic jumped,” Gabreyohannes said. “We hope the A350 will have the same impact.” The delay represents a stumbling block for state-owned Ethiopian, which despite regional political unrest and violence, is increasingly challenging bigger rivals that have extensive African routes. Ethiopian has built one of Africa’s rare corporate success stories with the continent’s only consistently profitable airline shuttling passengers from around the world to more than 50 African cities in addition to dozens of destinations in Europe, the Middle East and Asia, mimicking models like that of Emirates.<br/>

A direct flight has opened between Chengdu, capital of southwest China’s Sichuan Province, and Addis Ababa, the capital of Ethiopia. Operated by Ethiopian Airlines, it will depart from Chengdu every Tuesday, Thursday and Saturday with a travel time of 9.5 hours. It is the second direct air route from Chengdu to Africa, also the 100th international and regional air route to operate at Chengdu airport. Ethiopian Airlines has direct air routes to Beijing, Shanghai, Guangzhou and Hong Kong. The airline now serves 13 airports in Asia on 100 weekly flights.<br/>

United Airlines, in response to the reaction to the Flight 3411 incident, has come up with a plan to make sure it never happens again. Some of its new procedures were previously announced, such as not using law enforcement to remove passengers from planes except in cases of safety. However, many are new and important changes that should be copied by Delta, American and indeed all airlines. Key here is empowering the airlines’ employees to take whatever action necessary to help passengers who must be involuntarily bumped. This includes putting them on another airline’s flight. What’s good here: The airline for the first time spells out exactly how they choose passengers to be involuntarily bumped. I don’t believe any airline has done this so specifically. Consumers now know how to better protect themselves. Passengers without a seat assignment get bumped first, followed by fare class and estimated fare paid, followed by time of check-in, followed by frequent-flier status. Those with special needs do not get bumped. It increases maximum compensation for voluntary bumps to $10,000 which should make involuntarily bumps extremely rare, although there will always be passengers who will not miss a wedding or funeral even for $10,000. (Maximum payment for involuntary bumps is regulated by the DOT and remains the same). Delta has also boosted its maximum amount to $10,000. It empowers personnel to use competing airlines to transport bumped passengers (similar to the old Rule 240, which airlines were once required to include in their contracts of carriage). Story has more details.<br/>

Nok Air earlier announced a plan to increase its registered capital from 625m baht to 1.41b. It said 625m of the new shares will be allotted to existing shareholders at a ratio of one existing share to one new share. The shares were scheduled to be booked for purchase from May 16-19 and May 22. However, THAI, which holds a 39.25% stake in Nok Air, decided not to buy the shares, the source said, citing the company's extraordinary board meeting on May 21, a day before the closing date of the share purchase booking. In the meeting, the source said there were debates for and against the purchase of Nok Air shares, but finally they concluded not to buy any because the airline's plan to tackle losses is still unclear. The board also issued a condition that Nok Air must replace its CE Patee Sarasin before THAI would buy any shares, the source noted. The source said the board members who supported buying shares pointed out if THAI fails to raise Nok Air's capital, the budget carrier would seek more capital from a Singaporean partner.<br/>