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Airline Business Daily From NEWS FROM IATA AGM iN SEOUL l MONDAY 3 JUNE 2019 De Juniac sees above IATA to head cost-of-capital returns 3 in 2019, but only just to Amsterdam for 2020 AGM IATA will hold the 76th annual general meeting in Amster- dam in 2020, the association announced yesterday. The AGM will be held from 21-23 June 2020 in the Dutch city. KLM, which in October marks its 100th anniversary, will be the host airline. “For me it is an honour that Amsterdam has been decided to be the place for the IATA AGM in 2020 and at KLM we are proud to be the host air- line,” says KLM chief executive Pieter Elbers. “Hosting the AGM in the year of our 100th anniversary is very special. BillyPix “Having the AGM in Am- sterdam next year provides a great opportunity to embrace co-operation and to work to- PROFITS SQUEEZE gether in the field of sustaina- bility as a licence to operate Outlook for 2019 cut by a fifth to $28 billion as fuel costs and slowing demand take toll and as a licence to grow.” It marks the third time that ATA director general Alexan- also been revised downwards to as the US-China trade war inten- IATA will have held its annual Idre de Juniac warned that the $30 billion. sifies. This primarily impacts the meeting in the Netherlands airline sector’s hard won ability “The business environment for cargo business, but passenger and the first time since to create value for investors is at airlines has deteriorated with traffic could also be impacted as Amsterdam hosted the event risk after downgrading industry rising fuel prices and a substan- tensions rise.” back in 1969. profits expectations for 2019 by tial weakening in world trade,” “The good news is that airlines a fifth as headwinds mount. IATA says. have broken the boom-and-bust The association had projected a On the cost side IATA now cycle,” the IATA chief adds. “A net profit for the industry of $35.5 expects a higher fuel bill for downturn in the trading environ- billion in its first outlook for 2019, airlines, as well as more expendi- ment no longer plunges the made in December last year. But it ture on labour and infrastructure. industry into a deep crisis. has now cut this year’s expecta- IATA has also trimmed its reve- “But under current circum- tions to $28 billion, amid rising nue expectations for 2019 by $20 stances, the great achievement of costs and slowing demand stem- billion. It now sees industry turn- the industry-creating value for ming in part from weaker trade. over growing 6.5% at $865 billion. investors with normal levels of A revised profit of $28 billion “Stiff competition among air- profitability is at risk. Airlines will for this year would mark a $2 bil- lines keeps yields from rising,” still create value for investors in lion reduction on the 2018 indus- says de Juniac. “Weakening of 2019 with above cost-of-capital IATA AGM try net profit, which has itself global trade is likely to continue returns, but only just.” going Dutch REX/Shutterstock IATA OUtLOOK $28bn $15bn 2019 iN 7.4% NUMBERS Projected industry net profit Increase in costs expected Estimated profits for North in 2019, down a fifth on its this year driven by fuel, American carriers in 2019, previous forecast of $35.5bn infrastructure and labour $500m higher than last year THERE IS NO COMPARISON. NO EQUAL. THERE IS ONLY ONE. THE COMMERCIAL JET ENGINE IN A LEAGUE OF ITS OWN. Powered by an industry-fi rst geared architecture — and more than 40 other groundbreaking innovations — the Pratt & Whitney GTF is unlike any engine that’s come before it. EXPLORE THE FUTURE OF FLIGHT AT PW.UTC.COM NEWS Passur picks up Ourmieres- Widener will capacity crunch leave Flybe in July Passur Aerospace is exhibiting at the AGM for the first time and its chief executive Jim Barry believes collaborating with industry stake- holders to better use data and ana- lytics can play a central part in tackling capacity issues. Barry notes that IATA director general Alexandre de Juniac and others have flagged the capacity constraints the industry is facing Back to basics during the AGM here in Seoul. “What we’ve noticed, particu- key for Flybe larly at American airports, is demand is going up considera- going forward bly,” says Barry, noting capacity BillyPix is in many cases insufficient and Flybe has a “very profitable core” the right fleet” now that it will be world if you do not have the ap- often with particular times and on which its new owners can build a able to return its remaining leased propriate organisation and fleet periods having a disproportion- successful business, its outgoing Embraer 175s to their owners this and we never had that,” she says. ate impact – with a related impact chief executive Christine year “allowing us to move to a net- While Ourmieres-Widener says it on performance “we have to be Ourmieres-Widener believes. work which is much more efficient”. will be up to her successor to decide able to anticipate these demand Ourmieres-Widener – who is The departure of the 175s is on Flybe’s future fleet make-up, she capacity crises”, he says. leaving the airline in July - flags to “definitely consistent with going says long-term analysis by the airline He believes there is interest the UK carrier’s domestic point-to- back to a much more profitable has identified the Bombardier Q400 from airlines, airports and service point business as a segment on operation”, she adds. She says the as the backbone of the Flybe fleet, providers to work collaboratively which its new shareholders Virgin decision to order jets a decade while the carrier’s remaining 190s to use predictive analytics to help Atlantic, the Stobart Group and ago stemmed from a belief that can also could play a role. address the issue. “And it can be Cyrus Capital can develop after Flybe could become the “number “I am very happy to see that done now,” adds Barry. they took over the regional carrier three low-cost carrier” in Europe Flybe has a great future and I am through the Connect consortium after Ryanair and EasyJet. doing my best before my depar- earlier this year. “You cannot compete with the ture to organise a smooth transfer KLM She says the carrier is “moving to Ryanair’s and EasyJet’s of this of the business plan,” she says. KLM concepts KLM has agreed to support ‘A321XLR’ by 2024: Airbus the development of a “Flying V” blended-wing concept Toulouse’s touted model could be available within five years, says commercial boss that promises up to 20% bet- ter fuel efficiency compared irbus says it could deliver single-aisle line-up. A321LR at this month’s Paris air with an Airbus A350. Aan extended-range “A321X- Asked when such a derivative show, backed by commitments The concept, developed LR” derivative within five years, could be available for delivery, he from customers. by Delft Technical University, but is yet to formally confirm the said: “The earliest you can expect The XLR variant is believed to features a V-shaped design status of the project. any new versions of an A321 with incorporate wing and weight that is passenger cabin, fuel Speaking at the IATA AGM, some serious work done on it upgrades to enable it carry around hold and wings in one, pow- Airbus chief commercial officer would be the 2023-24 timeframe.” 220 passengers over 4,000nm ered by a pair of rear-mount- Christian Scherer hinted at plans Airbus is widely expected to (7,410km). It could also feature a ed turbofan engines. for “extended-range versions announce the go-ahead for the revised cockpit incorporating the [plural]” of the A321 in its extended range version of the latest technology from the A350. ■ flightglobal.com/IATA WHERE TO FIND US Executive editor Graham Dunn Asia reporter Alfred Chua Printers Korean Studies Information Our editorial team is located Quadrant House, The Quadrant, Managing editor Lewis Harper Design & production Terence Executive director content in the Media Room Sutton, Surrey, SM2 5AS, UK Senior reporter Oliver Clark Burke, Chris Gardner, Lin Ning, Max Kingsley-Jones Americas managing editor Rachel Warner, Christine Zhang Commerical director Stuart Burgess Ghim-Lay Yeo Photography Ian Billinghurst Vice-president FlightGlobal Connect © Airline Business 2019 Deputy Asia editor Ellis Taylor Advertising Richard Perry and Conferences Mark Pilling flightglobal.com/airlines 3 June 2019 | Airline Business | 3 NEWS Executive viewpoints Senior airline chiefs were put through their paces again by CNN’s Richard Quest in the regular CEO panel debate at the World Air Transport Summit yesterday. While the grounding of the Boeing 737 Max was first on the agenda, the wide-ranging debate also tackled issues as diverse as competition, environment and ownershship Richard Quest Robin Hayes Christine News anchor Chief executive Ourmieres-Widener CNN JetBlue Chief executive Flybe Talking about my young generation Young aviation professionals shared their vision of what’s to come in the airline industry in a panel yesterday. In-flight connectivity and a seamless travel experience with the help of technology will top the wishlist of the younger generation of travellers, said the panel, comprising (left to right): moderator Andrew Stevens, Young African Aviation Professional Association founder and president Fadimatou Noutchemo Simo, CBS News transportation correspondent Kris Van Cleve, FlightGlobal Ameri- cas managing editor Ghim-Lay Yeo and Cathay Pacific GM of corporate affairs Kinto Chan.