Saturday, March 28, 2009

China’s Private Airlines Succumb to Competition They Created

By Irene Shen

March 26 (Bloomberg) -- China’s private airlines created competition for state-controlled carriers, just as the government wanted. Now, they are the ones suffering from it.

United Eagle Airlines Co., the first private carrier to win government approval, agreed to a takeover by a state-controlled airline last week. East Star Airlines also halted flights two days after rejecting a bid from Air China Ltd.’s state-owned parent. From December, Okay Airways grounded passenger planes for more than a month because of a management dispute.

Private airlines “are no longer a threat,” said Zhou Chi, chairman of government-controlled Shanghai Airlines Co. “They are all in trouble themselves.”

China’s roughly 20 private carriers have stumbled amid a cooling economy, slowing demand and rising capacity. They have also received no government aid. By contrast, China Southern Airlines Co., the nation’s biggest carrier, and other state- controlled airline groups have won bailouts totaling more than 13 billion yuan ($1.9 billion) to help them weather the slowdown.

“Private airlines will never get the same treatment from the government as their state rivals,” said Li Lei, a China Securities Co. analyst in Beijing. “If they can’t overcome all these difficulties on their own, they have to either go bankrupt or agree to be acquired.”

1 Yuan Fares

Chengdu-based United Eagle and East Star both began services in 2005, the year that China first allowed private domestic airlines. The government took the measures to counter what it termed “a seller’s market.” The introduction of private airlines, which now account for about 10 percent of traffic, helped speed growth in Asia’s biggest air-travel market, as they added new routes and offered fares as low as 1 yuan (15 cents).

“Private airlines broke the pricing monopoly that ruled the market for decades,” said Ma Ying, an analyst at Haitong Securities Co. in Shanghai. “If the private carriers fail, the state airlines may go back to higher prices.”

State carriers have already benefited from private airlines’ troubles as it has helped slow a drain of staff, said Shanghai Air’s Zhou.

“None of them can afford to take our pilots any more,” he added. Private airlines’ recruitment “restricted our expansion, but it added to their financial difficulties.”

Government Bailouts

Chinese airlines are struggling after travel grew at the slowest pace in five years in 2008 and the industry reported a record 28 billion yuan loss. The government responded by giving 3 billion yuan to China Southern and 9 billion yuan to the parent of China Eastern Airlines Corp., the nation’s No. 3 carrier. Air China’s parent also expects a bailout of at least 3 billion yuan. Shanghai Air and Hainan Airlines Co.’s parent have won funds from local governments.

The aviation regulator will also block competition on new routes for three years to help carriers expand their networks. The protection will cover routes added between March 29 and Oct. 24, which aren’t currently served, the regulator said on its Web site yesterday. More than 90 percent of the routes included in the plan will be operated by state-owned carriers.

Private carriers have benefited from moves to stimulate industrywide demand including tax cuts and lower fuel prices. Still, they have only won direct support in return for ceding control. United Eagle, which operates five planes, sold a 200 million yuan stake to state-controlled Sichuan Airlines Co. because of losses and debts, it said in a statement. The deal raised Sichuan Air’s holdings to 76 percent from 20 percent.

“The capital injection will enable us to be reborn,” United Eagle said. Sichuan Air will appoint a new chairman and president, it added.

East Star Grounding

East Star announced its rejection of a bid from China National Aviation Holding Co., parent of Air China, in a March 13 statement, citing differing management philosophies and China National’s size. The airline, based in Wuhan, grounded its nine planes on March 15 at the request of the city’s government, according to a statement on the aviation regulator’s Web site.

China National will now develop Wuhan into an international hub in partnership with Hubei province, according to an announcement on the provincial government’s Web site. East Star spokesman Wang Yankun wasn’t available for comment in the past week.

Spring Air

Still, some private carriers are growing and avoiding state control. Spring Air, the largest private Chinese carrier by fleet size, spent 100 million yuan hiring more than 30 pilots at the end of last year, said Chairman Wang Zhenghua. It plans to recruit more this year, he added.

“The capital injections for the state carriers did shake up the market,” Wang said. “Still, we’re not too worried about our operations at the moment.”

The carrier, with 12 planes and a debt-to-asset ratio of about 50 percent, intends to take delivery of 16 Airbus SAS A320s in the coming three to four years. It will pay for the aircraft using banks loans, having put plans for a share sale on hold because of plunging stock markets, Wang said. None of the six airlines listed in Shanghai are privately controlled.

“I won’t resist financial aid from the government, but we surely won’t be turned into a state carrier,” Wang said.

Beijing-based Okay Air, which resumed passenger flights in January, is considering seeking new private investors to boost liquidity, said ChairmanWang Junjin.

Okay, which operates 11 planes, including freighters flown for FedEx Corp., may return to profit this year, Wang said. Juneyao Airlines Co., the carrier’s Shanghai-based affiliate, is also hiring staff and plans to add three or four Airbus SAS A320s to its fleet of 10 planes this year, he added.

“It’s up to you if you want the money from the government or to stay independent,” Wang said. “If you do the business well, you won’t be nationalized.”

To contact the reporters on this story: Irene Shen in Shanghai

Last Updated: March 26, 2009 05:47 EDT 

Jeppesen Enhances eLearning Strategy by Implementing Enterprise Knowledge Platform LMS

AUSTIN, Texas, March 26, 2009 /PRNewswire-Asia-FirstCall via COMTEX/ ----NetDimensions (London Stock Exchange, AIM: NETD), a global provider of performance, knowledge and learning management systems and its partner Intelladon, a premier provider of learning solutions, combining software and services announced today that Jeppesen has implemented the Enterprise Knowledge Platform (EKPundefined, undefined, undefined%) learning management system (LMS:undefined, undefined, undefined%) to deliver aviation training and courses to individual and corporate clients.

Customer satisfaction is very important to Jeppesen, a subsidiary of the Boeing Company. In order to provide the highest levels of response time, accessibility and overall service to their customers, the company needed an LMS that they can rely on.

Jeppesen will use EKP to provide training and courses either on a business-to-business basis or through its JeppDirect portal, which sells courses to flight schools and individuals. Users who purchase courses through JeppDirect will be automatically enrolled in EKP.

Jeppesen currently has a broad line of paper-based training products. Brad Newell, Project Manager at Jeppesen said, "As we move away from paper-based training, we will continue to leverage EKP as we bring more titles online from DVDs and textbooks to enhance our blended learning model."

Jeppesen also needed a stable and flexible system upon which to grow and expand their online course offerings. "We are excited that Jeppesen chose EKP as the platform for enhancing their e-learning strategy through our partner, Intelladon," noted Mark Sanmarco, NetDimensions' Vice President of Sales & Business Development for North America. "We are also glad to know that Jeppesen will be expanding their offering to allow other companies and trainers to deliver courses through JeppDirect using EKP."

Relationship between client and vendor is the key

The selection team at Jeppesen conducted a lot of research on LMS applications and solution providers. Their key requirements were stability and ability to scale globally, user-friendly interface for effective delivery of content and most importantly -- vendor partnership.

Jeppesen needed a vendor who would take the time to understand its requirements and respond quickly to its needs. The company was most impressed by the team from Intelladon who demonstrated their willingness to proactively work with them and their flexibility in crafting the solution from all angles including pricing, functionality and support. Intelladon's differentiator was their ability to bring all the components together for a total solution.

"The relationship we have with Intelladon and NetDimensions is fantastic. The EKP solution along with the consulting expertise Intelladon delivered has provided us with the on-going support and commitment to help us meet our objectives," explained Newell.

Marc Blumenthal, Managing Partner at Intelladon added: "We are excited to be partners with Jeppesen and NetDimensions in fulfilling the strategic vision for their worldwide growth of their eLearning initiatives. Jeppesen shares our belief that to be truly successful you need strong partnerships at all levels."

About NetDimensions

Established in 1999 and listed on the London Stock Exchange (AIM: NETDundefined, undefined, undefined%), NetDimensions is a global provider of performance, knowledge and learning management systems. The company's key products include the Enterprise Knowledge Platform (EKPundefined,undefined, undefined%), the Enterprise Assessment Platform (EAP4.75, 0, 0%) and the Enterprise Content Platform (ECPundefined, undefined, undefined%).

NetDimensions products and services help companies deliver and manage corporate training, career development, assessment and certification programs, as well as help clients around the world address growing regulatory compliance needs.

Recognized as one of the top-rated learning technology suppliers in overall customer satisfaction, NetDimensions has been chosen by multinational organizations worldwide including HSBC, ING and Cathay Pacific. Enterprise Knowledge Platform and EKP are trademarks of NetDimensions Ltd. For more information, visit .

About Intelladon

Intelladon Corporation is a premier provider of learning solutions, combining software and services to meet all your training needs. We meet the unique requirements of our customers in both the public and private sectors.

We are uniquely positioned to serve clients both large and small. Whether you have 500 learners or 50,000, Intelladon has a learning solution for you. Our customers are located throughout North America and include some of the best-known and most successful companies in the world. Intelladon partners closely with world class publishers including NetDimensions(R28.26, -1.5492, -5.2%), Articulate(R28.26, -1.5492, -5.2%) and Rapid Intake(TM65.48, -1.55, -2.31%), to offer their award winning products as part of a total learning solution.

About Jeppesen

For 75 years Jeppesen has made it possible for pilots and their passengers to safely and efficiently reach their destinations. Today this pioneering spirit continues as Jeppesen delivers essential information and optimization solutions to improve the efficiency of air, sea and rail operations around the globe.

Headquartered in Englewood, Colorado and with offices located around the world, Jeppesen is a subsidiary of Boeing Commercial Aviation Services, a unit of Boeing Commercial Airplanes.

Boeing is the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Boeing has customers in more than 90 countries around the world and is one of the largest U.S. exporters in terms of sales.

   Enquiries:        NetDimensions    Mark Sanmarco    Tel:   +1-512-372-9551    Email:        Intelladon    Marc Blumenthal    Tel:   +1-813-814-2345    Email:        Arden Partners plc Nomad & Broker -- NetDimensions    Fred Walsh or Matthew Armitt    Tel:   +44-20-7398-1651    Email:        Parkgreen Communications Ltd (Financial PR -- NetDimensions)    Paul McManus    Tel:   +44-20-7933-8787 or +44-7980-541-893    Email:            

SOURCE NetDimensions

China’s AVIC Focuses on Military Expansion

China's J-10

China's J-10

Source: Xinhua
Date: 27 March 2009

China’s largest aircraft maker, Aviation Industry Corporation of China (AVIC), opened a defense branch Thursday in Beijing in an effort to make the company a first-class, worldwide manufacturer of aerial defense products.
The branch will take over most of the military-related business done by AVIC such as building combat aircraft, including China’s own third generation fighter J-10.
In addition, the defense branch will primarily develop and make training aircraft, and unmanned aerial vehicles.
It will also conduct research and manufacture business jets as well as sell its products internationally, a statement released by AVIC on Thursday said.
The defense branch, an integration of relevant departments within the corporation, will be an independent accounting unit of AVIC with total assets of nearly 50 billion yuan (7.35 billion U.S. dollars).
It has been authorized to manage AVIC’s 10 assembly plants and research institutes which are scattered in several cities across China such as Shenyang, Chengdu, Changsha and Shanghai.
The company has approximately 60,000 employees and a rough annual sales revenue of 30 billion yuan (4.4 billion U.S. dollars).
It has also exported more than 1,000 aircraft overseas and cooperated with foreign aviation makers to develop civilian planes.
“We are trying to become a world leading defense products supplier by expanding our overseas market for export,” Wang Yawei, general manager of the defense branch, told Xinhua Thursday.
According to Wang, the branch will promote AVIC’s L-15 Falcon, a supersonic training aircraft, and FC-1 Fierce Dragon, a light-weight multipurpose fighter, for export.
As for civilian products, AVIC is determined to develop, build and, if possible, export corporate jets.
China split the state-owned AVIC into AVIC I and AVIC II in 1999 in an effort make it more competitive in the global market.
However, the two parts were merged together in November of last year by the Chinese government to build up the aviation giant.
Currently, AVIC owns 22 listed companies in China.

PM asks Vietnam Airlines not to cut routes, jobs

Prime Minister Nguyen Tan Dung Wednesday asked Vietnam Airlines to keep flying all of its present routes and not lay off any employees.

In a meeting at the Government Office in Hanoi, Dung said the national carrier should keep close tabs on its spending and perhaps alter some routes to save time and fuel, thereby improving service quality and protecting the environment.

The Prime Minister told Vietnam Airlines to maintain its present course by ensuring safety and security, training its employees and investing in new planes.

In related news, Vietnam Airlines Wednesday announced that its ticket agents would receive no commission on international flight ticket sales from next month.

The airline also said its ticket offices in Vietnam would charge for the first issuance of international flight tickets.

The fees will vary depending on the routes and services, and must be paid in Vietnamese dong.

Ubon Ratchathani Ever Changing Air Travel

Ubon Ratchathani is the place where I first arrived here. If you travel by air it is the only option.

Since my initial experience flying to Ubon there have been many changes.  Some changes in the name of competition and others for economic reasons.

You could fly from Ubon to Danang, Viet Nam eight years ago but that service has since been cancelled. Thai Airways International increased daily service between Ubon and Bangkok from 2 to 3 times a day. Oh yes and air fares increased as well.

Air Asia flew onto the scene bringing competition and discount fares with their no-frill service. “Now, everyone can afford to fly” is their motto. If you are ok with boarding and finding your own seat and paying for any food or refreshment then it’s the service for you.

The happy travellers to and from Ubon had a choice. You could choose different times, different carriers and different levels of service.  Things were looking good with the local air travel.

Finally, the new Bangkok International Airport opened. It was billed as the gateway to Asia. Suvarnabhum Airport was state of the art and ready to serve the masses. It is a nice airport but when travelling from Ubon to Bangkok  the flight is just over an hour. The journey from Suvanaphum to the city could take 2 hours or more.

After that we experienced the split airport era. International flights arrived and departed from the new airport but domestic Thai flights originated and terminated at Don Muang. Oh that is Thai Airways and Nok Air, a subsidiary of Thai Airways, while Air Asia’s hub remained at Suvanaphum.

Nok Air, another value airline made a short lived appearance in Ubon. I used their service on several occassions and found it satisfactory.  They only lasted a few months and then had to cancel several routes, including service to Ubon. Their departure was for economic reasons, I guess you cannot Fly Smiles only.

The changes to Ubon Ratchathani air travel continue.  All Thai international and domestic flights are due to be reconsolidated at Suvarnabhumi Airport beginning the end of March 2009. That is good news for international travellers who must connect to domestic flights but bad news for in country air passengers.

What is the current state of air travel to Ubon Ratchathani? We are serviced by two airlines, Thai Airways and Air Asia. Thai Airways offers 3 daily flights, morning, afternoon and evening with stable fares. Air Asia has been reduced to a single flight a day. Their fares vary according to supply and demand. If you check their rates on the Internet you will often find promotions for future dates. People who want to travel to Ubon in October might be able to get a steep discount if act now.

The story of air travel to Ubon Ratchathani is constantly changing but has always been available.  Here is a place to go if you want to check out the latestUbon-BKK flight schedules.  Happy travels.

Related posts:

  1. Ubon Ratchathani has a New Bird in Town There’s a new bird in town now servicing Ubon Ratchathani....

Friday, March 27, 2009

CEVA maintains top rating in Thailand

CEVA Logistics maintained its number one position in the International Transport Air Association (IATA) air freight sales ranking in Thailand. This is the second consecutive year that CEVA tops the IATA ranking list after it announced a 27 per cent air  freight growth and achieved over 3.8 billion Baht of air freight sales volume in Thailand for 2008.

“Certainly, this is an impressive accomplishment that we are able to maintain our leading position in Thailand even during these tough times," said Roy Tan, CEVA’s country manager for freight  operations in Thailand. " I believe that the local demand for outsourcing logistics will continue to grow as companies look to consolidate their operations and focus on their primary business needs."

Wednesday, March 25, 2009

Boeing to help Vietnam assembly aircraft components in June

HANOI, March 25 (Xinhua) -- Boeing, the world's largest manufacturer of commercial jetliners and military aircraft, said that it will help Vietnam assembly aircraft components in June this year, the local newspaper New Hanoi reported Wednesday.

The announcement was made by Stanley A. Deal, Pacific-Asian Sale Executive Vice Chairman of Boeing Company at a working visit to Vietnam.

Stanley A. Deal highlighted Vietnam for its civil aviation safety, flight security and the opportunities and potential for Vietnamese civil aviation sector development, even in the context of the ongoing global economic downturn.

Therefore, the Boeing will cooperate closely with the national flag carrier Vietnam Airlines in the process of development, said Stanley.

Initially, the assembly for winglets of the aircraft will be kicked off at Hanoi-based Thang Long industrial zone in June. The Mitsubishi Heavy Industries Ltd (MHI), one of the big players in Japan's heavy industry sector, will partially involve in the manufacture.

Vietnam Airlines went on to record annual revenue of 15.3 million U.S. dollars in 2008, representing an increase of 31.32 percent over 2007.

'Sick' aviation industry on a flight path to $4.7bn losses, warns IATA

The aviation industry is "structurally sick" and heading for a $4.7bn (£3.2bn) net loss this year, the director general of the International Air Transport Association has warned.

Giovanni Bisignani said that, in the space of just three months, IATA had revised down December's forecast of $2.5bn losses to reflect "the rapid deterioration of global economic conditions".

Industry revenues are now expected to fall by 12pc, or $62bn, to $467bn in 2009 – far worse than the decline seen after the 2001 terrorist attacks when revenues fell $23bn to $306bn, a 7pc decline.

"The state of the airline industry today is grim. Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago," Mr Bisignani said. "Our loss forecast for 2009 is now $4.7bn. Combined with an industry debt of $170bn, the pressure on the industry balance sheet is extreme."

IATA reckons passenger traffic will fall 5.7pc, with a steeper drop in premium cabins. Cargo traffic is expected to fall by 13pc.

"Fuel is the only good news. But the relief of lower fuel prices is overshadowed by falling demand and plummeting revenues," Mr Bisignani said. IATA has also revised down its estimates of losses for 2008, when high fuel prices took their toll, from $5bn to $8.5bn.

IATA expects Asia Pacific carriers to lose $1.7bn in 2009 and European airlines, $1bn, though North American operators could make a $100m profit.

Mr Bisignani said the industry was in dire need of regulatory change to give airlines the "ability to merge and consolidate", adding: "We are structurally sick. The historical margin of this hyper-fragmented industry is 0.3pc."

The industry has lost money every year since 2001, except for a $12.9bn net profit in 2007.

Tuesday, March 24, 2009

Bangkok to host new megajet A380

Published: 21/03/2009 at 12:00 AM
Newspaper section: Business

Suvarnabhumi Airport will start serving the Airbus A380 megajet on June 1.

Airbus employees at the manufacturing hub in Toulouse, France send off an A380 to Emirates last year.

Emirates Airline has confirmed that it will be the first carrier to operate the world's largest commercial passenger jetliner through Bangkok's new airport.

Other international airlines that have either ordered or deployed the aircraft - including Singapore Airlines and Lufthansa - have yet to announce definite plans to make Suvarnabhumi a port of call for their A380s.

Emirates aims to simultaneously introduce the double-decker A380 on routes to Bangkok and Toronto.

The debut comes as the Dubai-based airline takes its A380s off its daily flight from Dubai to New York's JFK airport due to weakened traffic demand.

The airline will instead run the route with the smaller Boeing 777-300ER, cutting capacity by 132 seats.

One of the two A380 planes on the NY-Dubai route will be redeployed to the Dubai-Toronto flight and the other to the Dubai-Bangkok route.

On the Toronto service the A380 will enable Emirates to address unmet need. On the Bangkok route it will support the Thai government's new tourism initiatives, Emirates president Tim Clark said in a statement.

The superjumbo will replace a Boeing 777-300ER on one of the daily services between Bangkok and Dubai (incoming flight EK 372 and outgoing EK 373). Switching to the A380 will increase capacity by about 30% on both this service and the Dubai-Toronto route.

The new services will also support popular transit markets. With the A380 now flying to London Heathrow, UK tourists travelling to and from Thailand can enjoy a seamless A380 experience. For Canada, the change means increased access to Dubai and the Gulf region, Emirates said.

Emirates' A380 can carry 489 passengers and features luxurious facilities such as onboard shower spas, onboard lounges, flat-beds, massage-equipped private suites in first class and a new generation of intelligent seating and flat-beds in business class.

From June 1, Emirates will operate five A380s on the following routes: Dubai-London Heathrow (daily), Dubai-Sydney/Auckland (daily), Dubai-Toronto (three times weekly) and Dubai-Bangkok (daily).

The airline will take delivery of another four A380 aircraft from the European planemaker Airbus into its fleet in the 2009/2010 financial year and has announced it will introduce services to Seoul in December.

So far, Emirates has ordered 58 A380s at an estimated cost of $1.5 billion. The company describes them as an essential part of its expansion plans.

The Dubai-New York route was the first where the A380 was introduced, in August 2008.

Emirates has been operating in Thailand for more than 18 years. It currently operates 21 flights per week to Dubai, seven flights per week to Hong Kong, and seven flights per week to Sydney and Christchurch.

In-flight Gambling Special

Podcast Text:
Hello, and welcome to the GamblingCompliance weekly podcast. This week we’ll be taking to the skies and exploring the possibility of in-flight casino gambling at 30,000 feet. Leading European aircraft-maker Airbus said this week that it has been approached by a group of potential Asian buyers who are looking to convert Airbus’s A380 jet into the world’s first flying casino. An Airbus executive said the company had already begun discussions with casino operators and that a fully fitted flying casino could be ready sometime between 2012 and 2017. The casino jet would cater to mile-high rollers mainly from Asian countries, Airbus maintains. But with gambling restricted or prohibited outright in much of the region, including mainland China, it remains to be seen how the plans will be viewed by authorities down below on terra firma. It is not the first time that the idea of in-flight gambling services on commercial aeroplanes has been suggested. Singapore Airlines, Virgin Atlantic, Swissair and casino operators Harrah’s and MGM have all previously shown an interest. But plans have remained grounded due partly to the tragic crash of a Swissair jet in 1998 - which was widely attributed to a technical problem with video gambling machines – and partly to US aviation legislation that clearly reduces the economic viability of in-flight gambling to aviation manufactures and carriers. Gambling activity on aircraft is viewed as similar to gambling on a cruise ship. The casino can only be open while the craft is over international waters. But the so-called Gorton Amendment – passed by the US Congress in 1994 – prohibits any gambling machine even to be installed or transported on planes flying across US airspace. The prohibition on even installing or transporting a gambling device made in-flight gambling a commercial impossibility for any airline as it would effectively preclude that jet from ever entering US airspace. However, the Gorton Amendment applies only to commercial jets – and Las Vegas-based casino operators are now exploring the possibility of offering gambling on private jets used to fly high-rollers between resorts in Vegas and Asia. Las Vegas Sands announced last week that it has purchased and plans to refit two aeroplanes to serve as private jets to chauffeur big-spending gamblers from Asia to the company's two Strip resorts. In addition to the typical luxury items found on a casino company's private aircraft, customers will also have high-limit baccarat tables at their disposal to pass the time during the 14-hour direct flight between Vegas and Hong Kong. GamblingCompliance has learned that Las Vegas Sands has been training dealers for in-flight dealing duties for several months. The dealers are coming from the company’s two Macau casinos, the Sands Macau and Venetian Macau – but plans have already been squared with gaming regulators in Nevada. Las Vegas Sands officials told Nevada gaming regulators of their plans in a letter in mid-January. The Nevada Gaming Control Board conceded that there was nothing in state law that would halt the activity, adding that there are no requirements for Las Vegas Sands to report revenues earned from a foreign gaming operation and that revenue from gambling on Sands’ planes would not be subject to the 6.75 percent gaming tax in the state. Gaming Control Board chief Dennis Neilander said that the only restriction under Nevada law was that Sands had to conduct foreign gaming within the same standards the company would conduct its business in Nevada, and report that the in-flight gambling activity took place. Sands has also been given the thumbs up by the US Federal Aviation Administration. Representatives from the aviation regulator confirmed that the agency does not regulate activity aboard private jets and said that it would only be concerned with any safety issues that may arise from gambling equipment. It remains to be seen how Las Vegas Sands’ plans with be met by regulators in Asia. But in-flight gambling on private jets certainly seems to be more viable than on commercial flights. Offering gambling may be a long-standing dream of commercial airlines and manufacturers such as Airbus, but US legislation and problematic jurisdictional questions make predicting the future of in-flight gambling difficult. Will it ever truly take-off? Or do those gambling on midair gambling already have their heads in the clouds?

Bets on China demand will pay off with time

There is no end to the gloomy news, it seems. Take China's air cargo business: Last year, the mainland aviation industry posted its biggest loss in 30 years as the oil price soared to OPEC-pleasing levels and demand for exports from the world's engine room collapsed.

So far this year, freight volumes have continued to plummet and freighter operators and cargo divisions of the big airlines have long since said goodbye to profitability.

But the problem with dwelling on the current troubles is that it becomes too easy to forget predictions that China's air cargo market will grow by up to 10 percent a year for the next 20 years or more.

Okay, that prediction was made before 2008 ended in a dead stop and this year, and possibly the next few after that, is unlikely to produce any growth in the double digits. But don't forget that China remains the fastest growing air freight market in Asia, recession or no recession. If you have an airline, Asia is where you want to be based come the rebound.

There is good news around and it comes in the shape of China's economic arousal package to stimulate spending on transport infrastructure, with 10 percent - US$8.5 billion - being shunted (as it were) into airports. The big hubs of Guangzhou, Shanghai and Beijing will be strengthened and regional airports, mainly built in China's central and western regions, will see aviation networks being improved, encouraging further local economic development.

This economic Viagra certainly won't be a quick fix but by adding runways and terminal capacity the industry will have in place the infrastructure needed to support the kind of steady long-term growth that is expected.

Of course, there is plenty of short-term pain in store for anyone involved in China's export market. If you are searching for sobering reminders, look no further than February's stunning 25 percent plunge in year-on-year exports.

So how does a mainland airline stay in the black in this volatile and profit-unfriendly environment? It doesn't.
The Big Three - China Eastern, China Southern and Air China - have all lost money in 2008, as has the fourth-largest carrier, Hainan Airlines.

Nevertheless, despite what you read or see on television news, the world has not come to an end. What will end, however, is the current economic crisis, and when it does China's aviation sector will resume its rapid growth.

Because there is no better developed, manufacturing-ready nation on Earth. The country has an unlimited supply of low cost labour, an enormous economy and years spent fine-tuning the efficiency of its production lines.

Once consumer demand returns, all those retailers in China's biggest export markets in the US, Europe and Japan will once again have to place orders and the supply chain will rumble into life once again. The real question is how fast will it come back.

Monday, March 23, 2009

Fed Ex MD-11 crash video

Fed Ex crash footage from Japanese TV









Federal Express cargo MD-11 crashes in Japan

Fiery Tokyo plane crash kills two

The crash and its aftermath

A cargo plane has crash-landed in high winds at Japan's largest airport, killing both crew members on board.

The accident happened as the Federal Express plane arrived at Narita international airport, near Tokyo, from Guangzhou in China.

Japan's public broadcaster NHK showed dramatic footage of the plane bouncing as it landed on the runway, then bursting into flames.

Dozens of flights have been cancelled as one runway at Narita remains closed.

Firefighters work to put out the flames after a FedEx cargo plane crashes on arrival at Narita airport, Tokyo, on Monday
The two pilots were taken to hospital but confirmed dead
It took firefighters about 30 minutes to bring the fire under control.

The accident happened at about 0650 local time on Monday (2150 GMT Sunday).

The two crew were taken to hospital but both were confirmed dead.

Officials said the pilot, Kevin Kyle Mosley, was 54 years old and the co-pilot, Anthony Stephen Pino, was 49. Both were American.

Flight delays

Footage of the crash shows the plane landing hard, tipping on to its left wing and bursting into flame as it then rolled over.

The plane landed in strong winds, of up to 72 km (45 miles) per hour, and Japan's meteorological agency had issued a gale warning for the area around Narita.

"We have information that strong winds caused the plane to divert from the runway," a Narita Airport spokeswoman told reporters.

But officials said it was too soon to confirm if the winds caused the crash.

The jet was a McDonnell Douglas MD-11, according to Japan's Kyodo News.

Airlines have cancelled more than 30 flights and diverted others to nearby airports, because Narita's longest runway remains closed.

Parts of the wreckage were still burning hours after the crash.

Kyodo News said it was the first fatal aircraft accident at Narita Airport since it opened in 1978.

Revolution in the air

A new era in budget travel has dawned with the first low-cost long-haul flight connecting South-East Asia to Europe. 

AirAsia X founder Tony Fernandes’ dream to take passengers halfway across the world for half the price of other airlines was realised when his no-frills carrier’s first flight from Kuala Lumpur to London touched down at Stansted airport, Essex, on March 11. 
At a press conference shortly after flight D7 2006, carrying 286 passengers, landed at 2.35pm, 25 minutes ahead of schedule, Mr Fernandes declared: “Everyone said we were crazy. No one said this could be done.” 
Throwing his hands in the air, he added: “This is proof you should believe the unbelievable, dream the impossible and never take no for an answer.” 
AirAsia was founded in 2001 and is the biggest low-cost carrier in Asia, with about 400 flights a day from hubs in Malaysia, Thailand and Indonesia to more than 60 destinations. 
Its affiliate AirAsia X was launched in 2007 with a focus on budget long-haul services. There was a frenzy among travellers from both sides of the world when seats for the Kuala Lumpur to London route went on sale in November last year with all promotional tickets from $205 being snapped up within 48 hours. 
Mr Fernandes says the Air Asia X dream began in 1977 when, at the age of 12, he was sent to boarding school in London. The Malaysian entrepreneur remembers being overcome with homesickness when he first arrived at Epsom College and called his mother to ask if he could come home for half term. 
“She said no,” he recalled. “It was too expensive. And there began my quest to start a budget long-haul carrier.” 
In the wake of the September 11, 2001, terrorist attacks in the US, when the world became apprehensive about flying, he was told his company would fail miserably. Now he has proved those critics wrong. 
Mr Fernandes, considered the Richard Branson of Asia, admitted he was “a bundle of nerves” the day of the inaugural flight. “A lot of things can go wrong on a 13-hour flight and I was thrilled when I woke up in the middle of the night and saw the plane had taken off,” he said. 
“Then I was counting down the hours. One of the greatest feelings I ever had was watching the plane touch down. It was a very special day for me.” 
And it was a special day for passengers onboard the historic flight — among them VIPs including secretary-general of the Association of South-East Asian Nations Surin Pitsuwan, AirAsia X chief executive Azran Osman-Rani and British High Commissioner for Malaysia William Boyd McCleary. 
The morning began with a celebratory reception at Kuala Lumpur’s low-cost carrier terminal, where passengers were greeted by airline staff — dressed as traditional Tower of London Beefeaters — playing bongo drums. After a relatively quick check-in we were ushered through passport control and to the gate before the sound of bagpipes signalled time to walk on to the tarmac to board the plane. 
The flight was one of the smoothest I have been on and there was a party atmosphere on board as passengers mingled throughout the journey. 
The seats were more comfortable than on the Perth to Kuala Lumpur leg, although the A340 has yet to be given an AirAsia X makeover. The airline is considering whether to change the existing seats to the narrow, fixed-back leather type with less legroom, currently on the smaller planes, and to reconfigure the interior to accommodate more people. 
Most passengers, me included, didn’t seem to mind having to pay for “extras” such as food, in-flight entertainment and “comfort kits” (comprising a blanket, neck pillow and sleeping mask). 
Meals are cheaper when pre-booked. It also takes away the hassle of having to dip into your wallet every time you’re hungry, but you must still present your boarding pass during each service. 
For those who wish to order on the day, food is reasonably priced at RM18 ($7) for a hot dinner and RM9 ($3.50) for a sandwich or hot dog and drinks range from RM5 ($2) for a cola to RM10 ($4) for a beer. 
AirAsia X, however, accepts US dollars only, local currency of the country of origin/departure and Malaysian ringgit. All change is given in ringgit and credit cards are not accepted. 
The quality of the meals was not as good as I have experienced on some full-service carriers and I was a bit bemused when I was given a knife and spoon to eat with but the local Malaysian dishes were flavoursome enough and the service from the cabin staff couldn’t be faulted. The Kuala Lumpur to London route — dubbed the Kangaroo Route — has been hugely popular among Australian travellers who can travel to the Malaysian capital from the Gold Coast, Melbourne and Perth before catching the connecting flight. 
Among the 17 Australian guests on the inaugural flight was 50-year-old Ray Saunders from Mt Hawthorn. 
Mr Saunders, who was returning home to Dorset to visit family and friends, went so far as to say: “It was the best long-haul flight I have been on.” 
Indeed, passengers on board the plane broke into applause as the pilot, Capt. Adrian Jenkins, guided the plane to a soft landing. 
Moments later the captain announced: “Ladies and gentlemen, we are about to go through the world’s biggest car wash” as the plane was sprayed by water cannons. 
With the Malaysian and British flags flying proudly from the cockpit window, the plane taxied to the airport terminal where Prince Andrew was waiting to greet the airline crew. 
The prince, who was later given a tour of the aircraft, joked that not many international flights come in 25 minutes early these days. 
It was a historic day for AirAsia X and the celebrations continued well into the night with a party at London’s Altitude Bar where guests were treated to a performance by rising British girl band The Saturdays and Malaysian singer Noreen, who took to the stage in a skin-tight red sequinned number and belted out songs including You’re Just Too Good To Be True. 
So, is a return ticket from Perth to London for about $1000 on board AirAsia X too good to be true? Well, it all depends on what you want out of your travel experience. 
Having downloaded a couple of movies on to my iPod and armed myself with some good books, I didn’t really miss not having an in-flight entertainment system. It was also interesting to observe that people actually spoke to each other more than they would otherwise because they weren’t glued to the TV screen fixed in the seat in front of them. 
Nor did I really miss the food. While having a set meal does break up the monotony of the journey, I have found myself on recent international flights turning down dinner when I’ve climbed on board a plane in the early hours of the morning because I couldn’t stomach it. Having the option to eat when I wanted was quite refreshing. 
For me, the deciding factors on whether or not I would fly with AirAsia X again are the affiliated airports and the luggage allowance. 
Kuala Lumpur’s low-cost carrier terminal fares miserably compared to the nearby ultra-modern international airport, with just a handful of shops and no facilities to freshen up during a lengthy layover (I had to wait nine hours for my return flight to Perth). 
At the other end, Stansted, while bright and modern, is 64km from the centre of London and although there are connecting trains and buses to the city, travelling to other parts of Britain isn’t easy and can add a significant chunk of time on to your journey. 
The luggage allowance of 15kg is also a significant factor for the Imelda Marcos among us who have trouble travelling light. AirAsia X is strict if you go over your allowance, charging $9 a kilo (still cheaper than most other airlines), although you can pay extra when you book to “supersize” to either 20kg or 25kg. It was also a pain that we couldn’t check our luggage through to London as we boarded in Perth. Yet in the current economic climate such factors seemed to be minor inconveniences for most passengers, including several businessmen who said their companies, realising they needed to be more budget conscious, were trading down from full-service carriers. 
Also for people like Baghan Kaur, a schoolteacher from Malaysia, who was travelling to London for the first time with her husband Laban Singh, daughter Jagjit Kaur and son Jasmair Singh for just RM6000 ($2480). 
Ms Kaur explained that AirAsia X’s low-cost fares now made it possible for her entire family to visit relatives in England they had never met. “I haven’t been able to sleep I have been so excited,” she said. “An opportunity like this just wouldn’t have been possible before.”

Details: For more information on Air Asia X flights to Asia and on to Europe visit > The writer travelled from Perth to London as a guest of Air Asia X and Visit Britain.