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Headwinds before takeoff for new THAI team

THAI is pinning hopes of a revival to its 1990s heyday on a new leadership team, jet purchases and improving its brand as tourism booms in the region. But the new president and chairman taking the helm are political appointees without aviation experience and several executives said the airline needs to adjust to a market where the good times of having a near-monopoly at home are long over. Challenges for the new team include cutting costs, managing a mixed fleet, coping with loss-making subsidiaries as well as healing long-time rifts between government-appointed management and airline veterans. Thailand has been the beneficiary of a boom in tourist arrivals, particularly from China, but as foreign airlines have rushed to add flights, THAI has reported annual losses for four of the last five years. “Thai Airways did not adapt quickly enough and competes in one of the world’s toughest industries,” former THAI president Piyasvasti Amranand said. The structure of state enterprises in Thailand slows decision-making because the carrier needs to seek approval from many agencies for decisions, he said. On paper, prospects are good for THAI. Air traffic is booming in Asia. Also, Thailand expects 37.5m visitors this year, up 6% from 2017, most of whom arrive by air. But Thai Airways’ new president, Sumeth Damrongchaitham, who started the job this month after an 18-month search, has his work cut out.
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Qatar Airways blames $69m annual loss on Gulf dispute

Qatar Airways reported on Tuesday a US$69m loss for the financial year ending March 31, citing a regional political dispute that has seen it banned from four Arab countries. Saudi Arabia, the United Arab Emirates (UAE), Egypt, and Bahrain have banned Qatar Airways since June 2017 as part of a dispute they have with the government of Qatar. “This turbulent year has inevitably had an impact on our financial results,” Qatar Airways CE Akbar al-Baker said. The airline said it carried 29.2m passengers in the year to March 31, down from 32m a year earlier. Qatar Airways lost access to 18 cities in the fall-out from the dispute, including to popular destinations in Saudi Arabia and the UAE. It has also had to increase costs and operate longer flights on some routes to avoid the airspace of the four countries. The airline said it had mitigated the impact of the dispute by launching flights to new destinations, increasing flights on existing routes, and leasing aircraft to other airlines. “New destinations come with launch costs and the necessity to establish market presence, which resulted in an overall net loss,” the airline said.
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US: Washington Dulles to lower airline costs with land deal

Washington Dulles International airport will use $237m from the sale of unused land on its western periphery to further lower airline costs. The Metropolitan Washington Airports Authority (MWAA) board approved the sale of 424 acres, acquired for the fourth runway that opened in 2008, to Digital Realty Trust for a new data centre at a meeting today. "The only thing the airport can do with the funds is re-invest them in airport activity – it's not roads or trains, it has to go to the benefit of airline operations," says Jack Potter, president of the airport operator, at the board meeting. That benefit will be further reducing the cost per enplanement, or the amount an airline pays to board a passenger on a flight, at Dulles, and not for capital improvements, MWAA confirms. Airline costs at Dulles are forecast to fall 6% to $17.82 per passenger this year, benefitting from $35m in revenues transferred from MWAA's other airport Ronald Reagan Washington National and a $25m grant from the Commonwealth of Virginia. The drop continues the trend that began in 2014, when CPE peaked at $26.55 per passenger. MWAA has not estimated the impact of the land sale yet but, based on the amount alone, the deal could have a more significant impact than either the revenue transfer or grant. Lower costs are likely music to United Airlines' ears. The largest carrier at Dulles, the airline is evaluating increasing the number of flights at the airport by half by creating two new connecting banks, or when a significant number of flights arrive and depart within a short time frame.
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United to fly 787s to Europe from Newark in 2019

United will fly Boeing 787s to Europe from its Newark Liberty International airport by next summer, as it preps for the introduction of its latest Dreamliner variant. The carrier plans to operate the 787 on "six international Atlantic routes" from Newark in its next summer schedule, which begins 31 March 2019, United says in an internal newsletter to pilots. The aircraft will be staffed with 160 pilots, including 55 captains and 105 first officers, at Newark, the airline says. United has considered a Newark base for its new 787-10s since at least May. At the time, the carrier suggested it could base them at the New York-area airport and fly them to Europe. The airline's president Scott Kirby called the 787-10 a "phenomenal European" aircraft in August, saying they would eventually fly out of Chicago, Newark and Washington Dulles without providing a timeline. The latest communique from United does not say if the 787s bound for Newark will be -10s or either of the smaller Dreamliner variants, the -8 and -9. The 787-10 is a stretch-of-a-stretch, offering airlines more seats – and improved economics – in exchange for slightly less range. United will configure its 787-10s with 318 seats, including its new Polaris business class and premium economy seats, compared to 252 seats on its -9s and 219 seats on its -8s.
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American Airlines considers ending ticket changes of Congress limits fees

American Airlines Group would consider barring passengers from changing nonrefundable tickets if Congress limits what carriers can charge for the adjustments, CEO Doug Parker said Tuesday. “That non-refundable ticket is of value to us,” Parker said. “We knew that seat was going to be filled. It allowed us to do other things. We sold the rest of the airplane knowing that seat was going to be filled.” Doing away with changes to nonrefundable fares would make airline flights more like baseball games or concerts, where customers aren’t typically reimbursed if they buy tickets and can’t use them. Carriers currently consider the ability to change a nonrefundable ticket as a service that carries a cost. Such fees, which run up to $200, anger many passengers. The language limiting what carriers can charge for ticket changes is being supported by consumer groups as a bipartisan provision. It is in a version of an aviation-policy bill sponsored by Republican Senator John Thune of South Dakota, who is chairman of the Commerce, Science and Transportation Committee. Parker called the proposal “really bad for consumers” last week. While much of the bill has been agreed to by both parties, it hasn’t passed the committee yet as other issues are hashed out. The language on fees isn’t in a House version of the bill.
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Global economy to witness a major reset, Emirates president says

US President Donald Trump’s trade battles and the accumulation of global debt to pre-financial crisis levels are among factors that will drive a major reset of the world economy in the next two to three years, according to the head of the world’s biggest long-haul airline. “We have some extraordinary geopolitical forces at play,” Emirates President Tim Clark said. The industry could be facing a “mini” global financial crisis within two to three years and “there is going be a major reset,” he added. The US is set to impose tariffs on $200b of Chinese imports spanning bicycles and baseball gloves to digital cameras, two months after introducing a first round of levies. China has promised to respond in an ongoing tit-for-tat. There’s already intense competition in the Chinese market and declining passenger traffic from there to North America has prompted US airlines to withdraw from some core routes to the world’s second biggest economy. Air China has complained that subsidies for its rivals is distorting the market and lowering fares beyond what’s economically viable. Carriers will have to learn how to deal with dumping by heavily subsidized state-owned carriers, Clark added.
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US: FAA extends high-density restrictions at New York LaGuardia, JFK airports

The FAA has extended existing operating limitations at New York’s LaGuardia (LGA) and JFK airports until 2020. In dual order extensions published Sept. 18 in the Federal Register, the agency said it will continue restrictions dating to its 1968 high-density rule that limited arrivals and departures at the two airports during peak demand periods to reduce congestion. With the phase-out of the HDR in 2007, the FAA ordered temporary limits at LGA in December 2006 and JFK in January 2008 that have been periodically extended—most recently in 2016 at both airports. The metropolitan New York City airports figure prominently in the FAA’s Northeast Corridor initiative to reduce congestion and deconflict air traffic in the region between Boston and Washington DC, which accounts for nearly half of all delays in the US national airspace system. The FAA plans to implement a new round of air traffic management improvements in the region from 2019-2021. Both new order extensions are effective until Oct. 24, 2020.
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United courts fliers with fewer lines

United wants to cut delays. Its solution: Fewer lines. The airline Tuesday changed its boarding process: United reduced the number of boarding lines from five to two. Passengers in groups one and two will board in a single line. Remaining passengers will be asked to remain seated until they are called to board through the second line. They'll be announced by group. The new procedure is part of a long-term effort boost ticket sales. United hopes to please passengers by eliminating long lines at the gate, said Jack Atkins, a research analyst at Stephens Inc. Improving the boarding experience is a low cost way to improve United's customer service, Atkins said. New boarding procedures have helped its competitors. Delta has over the past several years boosted its on-time numbers, which has allowed it to boost its profit and to attract new customers, Atkins said. Over time that allowed them to hike fares. That's what United is shooting for. "It won't be faster, but the gates will be less confusing and have less of a cattle barn look," said Mike Boyd airline consultant at Boyd Group International. "The old procedures induced people to stand in line an hour ahead of time. This will be much better, but what people in Group 2 are going to do is still stand in their line an hour ahead of time to get overhead bin space." The overhaul was requested by a large number of customers, said Sarah Murphy, United's operations strategy chief.
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New national carrier for Albania launched

The small Balkan state of Albania, which has been without a national airline for seven years—has launched Air Albania. The new airline operates a single Airbus A319, but reportedly plans to acquire two A320s in the future. The former national carrier, Albanian Airlines, ceased operating in 2011 and the privately owned Belle Air closed down three years later. The small southern European nation has had a succession of short-lived national carriers since the country emerged from a pro-Beijing Communist dictatorship in the early 1990s. Details of the new airline are sketchy, but it has been something of a pet project for Albanian prime minister Edi Rama, whose Facebook page has provided many of the few details so far available.
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