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CAPA DAILY | 3-JUN 2016 1Follow us @CAPA_Aviation

IATA 72nd AGM and World Summit 2016 wrap - CAPA News Briefs

IATA AGM - Friday 3 June 2016

CAPA DAILY

China is not the only game in town: Asia’s other high potential markets

ULCCs, hybrid airlines in the Americas. True LCCs start to look like a vanishing species

Norwegian Air’s NAI awaits final approval of US rights. Credibility of US-EU open skies is at stake

Africa Outlook: Ethiopian Airlines and Air Mauritius grow, but others face strong headwinds

India’s aviation market surges 20% on economic growth and low fuel prices

72nd IATA AGM World Air Transport

Summit wrap

CAPA publishes 400+ stories daily for our members. This newsletter showcases news briefs from the IATA AGM.

20%

of 2015’s attendees were

C-level Executives

VITAL CONTENTCAPA’s agendas explore the key foundational issues that are confronting our industry.

REVITALISED FORMATSCAPA will inject new levels of energy and engagement, innovative staging, seating, interview keynote and panel formats.

Past attendees include:

CAPA’s 2016 events will see record attendance:

Total attendees

1,80

0

2,39

5

3,60

0+

capaevents.com

26-28 October in AmsterdamCAPA-ACTE Global Aviation & Corporate Travel Summit

17 September in TehranIran Aviation Finance Summit

18-19 September in TehranIran Air Show & Expo

15-16 November in SingaporeCAPA Asia Aviation Summit

15 November in SingaporeCAPA-ACTE Southeast Asia Corporate Travel Conference

7-8 June in Narita LCCs in North Asia

3 August in Brisbane CAPA Airport Innovation Summit

3 August in Brisbane CAPA Aviation Training & Safety Summit

4 August in Brisbane CAPA Corporate Travel Innovation Summit

4-5 August in Brisbane CAPA Australia Pacific Aviation Summit

Upcoming 2017 CAPA Events:

Feb India Aviation SummitMar Airline Fleet & Finance SummitApr Airlines in TransitionMay Americas Aviation SummitJun LCCs in North AsiaAug Australia Pacific Aviation SummitSep Latin America Aviation Summit Oct Global Aviation Summit Nov Asia Aviation Summit

Remaining

2016 CAPA

Events28

% of 2015’s

attendees wereairline

representativesfrom 178 different

airlines

20%

of 2015’s attendees were

C-level Executives

VITAL CONTENTCAPA’s agendas explore the key foundational issues that are confronting our industry.

REVITALISED FORMATSCAPA will inject new levels of energy and engagement, innovative staging, seating, interview keynote and panel formats.

Past attendees include:

CAPA’s 2016 events will see record attendance:

Total attendees

1,80

0

2,39

5

3,60

0+

capaevents.com

26-28 October in AmsterdamCAPA-ACTE Global Aviation & Corporate Travel Summit

17 September in TehranIran Aviation Finance Summit

18-19 September in TehranIran Air Show & Expo

15-16 November in SingaporeCAPA Asia Aviation Summit

15 November in SingaporeCAPA-ACTE Southeast Asia Corporate Travel Conference

7-8 June in Narita LCCs in North Asia

3 August in Brisbane CAPA Airport Innovation Summit

3 August in Brisbane CAPA Aviation Training & Safety Summit

4 August in Brisbane CAPA Corporate Travel Innovation Summit

4-5 August in Brisbane CAPA Australia Pacific Aviation Summit

Upcoming 2017 CAPA Events:

Feb India Aviation SummitMar Airline Fleet & Finance SummitApr Airlines in TransitionMay Americas Aviation SummitJun LCCs in North AsiaAug Australia Pacific Aviation SummitSep Latin America Aviation Summit Oct Global Aviation Summit Nov Asia Aviation Summit

Remaining

2016 CAPA

Events

28%

of 2015’sattendees were

airline representatives

from 178 different airlines

IATA AGM wrap- CAPA News Briefs

ULCCs, hybrid airlines in the Americas. True LCCs start to look like a vanishing species

During the mid-2000s the term hybrid business model entered the North American aviation business vernacular as low cost airlines became more sophisticated... Fast forward to 2016, and the term hybrid is becoming outdated.

[Read full article centreforaviation.com/ 281884]

India’s aviation market surges 20% on economic growth and low fuel prices

Indian aviation is, after many years of promise, seemingly starting to deliver on its potential. It is currently the fastest-growing major aviation market in the world. With strong GDP growth of around 7.5% India is surging ahead of China in the economic growth stakes.


NORWEGIAN AIR’S NAI AWAITS FINAL APPROVAL OF US RIGHTS. CREDIBILITY OF US-EU OPEN SKIES IS AT STAKE

All objections and further comments on the tentative grant of a US foreign air carrier permit to Norwegian’s Irish subsidiary Norwegian Air International (NAI) by the Department of Transportation (DoT), on 15-Apr-2015, have now been made. Not surprisingly, a number of labour organisations and some US senators filed to reiterate their opposition. Many supportive comments were also received. The opponents’ central contention is that NAI’s business model contravenes the US-EU open skies agreement’s Article 17 bis, aimed at upholding labour standards.

[Read full article centreforaviation.com/283001]

Find out morecentreforaviation.com/analysis

CAPA ANALYSIS

China is not the only game in town: Asia’s other high potential markets

China necessarily captures the headlines in market growth potential - and rightly so; it will generate 100 million tourists annually by the end of this decade. But there are other markets in Asia that show high potential and in some cases remarkable promise.


Africa Outlook: Ethiopian Airlines and Air Mauritius grow, but others face strong headwinds

Africa is a region of huge opportunity - as has been observed for decades - but even bigger challenges. Africa’s airlines continue to struggle and collectively remain in the red while airlines in every other region in today’s favourable environment are profitable.


http://centreforaviation.com/281884



http://centreforaviation.com/analysis



Tony Tyler moves on – but IATA remains stuck in the same destructive groove

TO UNIVERSAL ACCLAIM, TONY TYLER IN HIS USUAL LOW-KEY STYLE, bid farewell to the IATA lead role after a successful five years as CEO/Director General at the 72nd AGM in Dublin. He

leaves in Sep-2016.It has been a very constructive term and, although he would

not claim full responsibility for it, the industry has gone from the doldrums to the most profitable year ever during his period in office.

IATA has made progress in the Tyler era; history will remember him most for establishing a leadership position for the aviation industry in the environmental area, achieving (almost) universal support for CORSIA, the Carbon Offset and Reduction Scheme for International Aviation. This will be put to the ICAO Assembly later this year. This was no small achievement – as Mr Tyler says, “balancing the interests of all those involved is a Herculean task”. Only the Chinese airlines, under instruction from their government, demurred from the consensus.

But there is one area where nothing has moved. Nor has there been any balancing of interests. Despite regular comparisons with Starbucks and the narrow margins of the price of a few cups of coffee that airlines make on each passenger, IATA still cannot bring itself to discuss the underlying reason: the impossibility of 1,000 airlines making an economic profit.

Seventy-one years on, the same old protectionist principles of 1945 still apply to the industry. A handful of powerful airlines, keen to protect the status quo, still prevents any change to the ownership and control and bilateral regime that has so successfully fragmented the industry all this time. And while a few, for various reasons – some through sheer strength of product and strategy, others helped by regulatory tailwinds – have made profits recently, open skies remain the stuff of dreams.

Meanwhile, all around, industries subject to consumer-unfriendly regulation are being disrupted in unexpected ways.

And when, during the next three years or so, the next downturn occurs as history suggests it will, the handwringing will intensify again, the trade barriers will be raised and Starbucks coffees will become even more unattainable.

Until IATA is able to address the issue of open skies and 21st century trade in aviation like grown-ups, there can be no prospect of a sustainable industry.

PETER HARBISONEXECUTIVE CHAIRMANCAPA – CENTRE FOR AVIATION

6 CAPA DAILY | 3-JUN 2016 View the latest headlines at centreforaviation.com/news


IATA: Industry waiting on new technology solutions for aircraft flight trackingIATA SVP for safety and flight operations Gilberto Lopez-Meyer said the cost of real time flight tracking for aircraft would be “enormous”, but the industry is willing to move forwards once new technology solutions are developed (runwaygirlnetowrk.com, 02-Jun-2016). According to Mr Lopez-Meyer, flight technology is “changing so fast” that more powerful and acceptable technology solutions may shortly be available. IATA prefers a ‘performance-based approach” to aircraft tracking and would like the flexibility to shift to technologies that offer superior tacking, lower cost or other advantages.

Lufthansa CEO: 2016 is ‘looking good’ as ‘summer bookings are not disappointing at all’Lufthansa CEO Carsten Spohr stated 2016 is looking like a “good year” for the airline and the Lufthansa Group as a whole, noting, “The summer bookings are not disappointing at all” (Reuters, 02-Jun-2016). As previously reported by CAPA, Mr Spohr said it was seeing signs of customers waiting longer waiting times to book, due to security concerns.

Brussels Airlines CEO: ‘I hope’ Lufthansa acquires the remaining stake in the airlineBrussels Airlines CEO Bernard Gustin stated he remains hopeful that Lufthansa will acquire the 55% in Brussels Airlines which it does not currently own, stating, “I hope for it” (Reuters, 02-Jun-2016). As previously reported by CAPA, Deutsche Lufthansa AG executive board chairman and CEO Carsten Spohr said in the wake of the 22-Mar-2016 Brussels attacks, “We have agreed with Brussels Airlines to give ourselves a further three months to conclude our negotiations on the acquisition terms and devise the migration concept required”.

IATA expects ‘concrete and definite position’ on aircraft trackingIATA SVP for safety and flight operations Gilberto Lopez-Meyer reported a “concrete and definite position” on the issue of tracking for aircraft in distress should be formed by the end of 2016 (Belfast Telegraph, 02-Jun-2016).

AAPA director general calls for cost-benefit analysis approach to aviation securityAssociation of Asia Pacific Airlines (AAPA) director general Andrew Herdman called for a cost-benefit analysis approach to aviation security, similar to the approach taken to safety (SMH, 03-Jun-2016). Mr Herdman said, “In security I’m afraid we are still stuck having too many decisions being made the day after the latest outrage...it is very hard to reverse those decisions because you lack evidence to say well, if it made sense to make that decision what is the new evidence that persuades us we can relax it.”

IATA SVP calls for harmonisation of drone standards, confirms works with ICAO, ACI and IFALPAIATA SVP safety and flight operations Gilberto Lopez-Meyer commented (02-Jun-2016) on IATA’s position regarding drones. Mr Meyer cited the drone industry has “tremendous potential” for economic opportunities globally, though acknowledged safety, security and airspace integration concerns. Mr Lopez-Meyer said 60 states have implemented “some kind” of drone regulations, though affirmed the need for the development of harmonised rules and regulations. Mr Lopez-Meyer said IATA is working with ICAO, Airports Council International (ACI) and IFALPA to develop the harmonised standards.

Passengers to bear brunt in payment to remove greenhouse gas emissions from aircraftICAO is to decide in the autumn on a trading scheme that will enable airlines to pay to reduce the impact of greenhouse gas emissions from aircraft (Irish Times, 02-Jun-2016). IATA CEO and director general Tony Tyler said at the 2016 AGM: “Ultimately customers will have to meet that cost. The overall cost to the industry will be affordable and will not adversely affect the price of tickets.”

“Ultimately customers will have to meet that cost.”

Finnair notes delays of one to two months on new A350s due to cabin seats, cabin elementsFinnair CEO Pekka Vauramo said the carrier is experiencing delays of one to two months on A350 deliveries, “primarily because of cabin seats and some other cabin elements” (Reuters, 01-Jun-2016). Mr Vauramo said the delays were troublesome, and the carrier had stopped advertising specific start dates for A350 routes to avoid disappointment. According to the CAPA Fleet Database, Finnair operate five A350-900XWB with 14 remaining on order.

IATA projects more European consolidation around three major airline groupsIATA DG and CEO Tony Tyler said he expects more airline consolidation in Europe around the three major airline groups of Air France-KLM, Lufthansa Group and IAG, following the consolidation seen in the US (Bloomberg, 02-Jun-2016).

Turkish Airlines enters into ‘early stage’ discussions with Ethiopian, says Africa is ‘future’MTurkish Airlines CEO Temel Kotil stated Turkish Airlines is interested in exploring additional frequencies to Africa, noting: “Africa is big, we are the second biggest after Ethiopian [Airlines] (The National/Gulf News, 02-Jun-2016). Subsaharan Africa is the “future” of Turkish Airlines, Mr Kotil said, noting the carrier has also entered into “early stage” discussions with Ethiopian to look at sharing revenue and other resources on Ethiopia-Turkey routes.




Turkish Airlines projects better months ahead in 2016, not dismayed over softening demandTurkish Airlines CEO Temel Kotil stated the carrier is not dismayed by a global softening in demand in 2016, pointing out: “It’s good that the prices are going down. We love it. We lower the cost, I keep the market share” (The National/Gulf News, 02-Jun-2016). He said the carrier is reporting a load factor of 78%-80%, and projects better months ahead in 2016 with Turkey to welcome more visitors in Jul/Aug-2016 when the “real summer” begins.

Turkish Airlines not ‘against’ A380, lacks frequencies to accommodate aircraftTurkish Airlines CEO Temel Kotil stated he is not “against” the A380 but the carrier lacks the frequencies to accommodate the aircraft: “That’s why the [Boeing] 777s and [Airbus] 330s are working everywhere” (The National, 02-Jun-2016).

Turkish Airlines optimistic about Turkey’s tourism industry, says Istanbul ‘is booming’Turkish Airlines CEO Temel Kotil expressed optimism in Turkey’s tourism industry, despite the recent dent due to terrorist attacks, saying: “Istanbul is booming. This year, Istanbul Ataturk has more passengers than Paris and Frankfurt … and it is growing” (The National/Gulf News, 02-Jun-2016). Mr Kotil anticipates Turkish Airlines will sell fares around 2%-3% less year-over-year in 2016, aiming to serve 72 million passengers for the year. He expects Turkish Airlines will report “a good profit” by YE2016, noting: “The biggest issue in the industry is security and also this terrorist effect. This is valid to everybody [because] after Brussels we learnt [that] this is not limited to Turkey.” Forward bookings beyond summer 2016 are “okay”, Mr Kotil added.

IATA SVP safety and flight operations calls for multilayer approach to mental health riskIATA SVP safety and flight operations Gilberto Lopez Meyer called for a multilayer approach to reducing mental health risk, including prescreening and recurring monitoring, while not stigmatising mental illness (Gulf News, 02-Jun-2016).

Jetstar notes continued capacity growth ahead of demand is driving down yieldJetstar Group CEO Jayne Hrdlicka said ongoing increases in capacity throughout Asia Pacific could look irrational if the trend continues (The Guardian, 03-Jun-2016). Ms Hrdlicka noted: “Capacity is growing ahead of underlying demand which is driving down yields,” adding: “[But] costs are well managed. The industry went through a very difficult period when every discretionary dollar was being taken out of airlines, so we we’re as fit as we’d ever been and we got the benefit of the falling oil price.”

AerCap sees Waha Capital as ‘tremendous supporters’, expects to expand in Middle EastAerCap executive director and CEO Gus Kelly described Waha Capital as, “tremendous supporters and great partners,”

adding: “That’s the kind of investor we want - someone who puts their money where their mouth is” (Arabian Business, 02-Jun-2016). Mr Kelly said AerCap expects to increase its business in the Middle East in the coming years as the region’s airlines expand. Waha Capital increased its stake in AerCap from 13.6% to 14.6% in Jan-2016.

AerCap expects to increase its business in the Middle East in the coming years as the region’s airlines expand.

IATA: Passenger expectations putting pressure on airlines to keep up with technology cycleIATA DG and CEO Tony Tyler commented that technology, particularly connectivity technology, is changing the expectations of airline passengers and putting pressure on them to “keep pace with the technology cycle” (tnooz.com, 02-Jun-2016).

IATA: Improving profits against weak economy is a sign of change for airline businessIATA chief economist Brian Pearce said the increase in the airline industry profit forecast for 2016 from USD36.3 billion to USD39.4 billion is an “impressive performance given the economy is pretty weak” and a “sign of change” (Airwise.com, 02-Jun-2016).

Boeing sees ‘very positive interest’ from Iranian airlines, considering multiple financing optionsBoeing SVP sales for the Middle East, Russia and Central Asia Marty Bentrott reported “very positive interest” from airlines in Iran and said the company is in talks with more than two Iranian carriers (Gulf News, 02-Jun-2016). Mr Bentrott said “a number of different options” could be explored in financing aircraft acquisitions by Iranian airlines, and did not rule out purchases in euros rather than US dollars. Mr Bentrott said, “We’re going to have to figure out a way collectively for them to be able to finance the assets.” Mr Bentrott said the company will “follow all the appropriate guidelines” in seeking US Treasury Department approval to commence sales in Iran.

Turkish Airlines ‘very keen’ to operate route-based JVs: CEOTurkish Airlines CEO Temel Kotil stated the carrier has commenced negotiations on Polish routes with LOT Polish Airlines, and is potentially interested in a similar arrangement with Iran Air: “We are very keen of doing many route based joint ventures” (The National/Gulf News, 02-Jun-2016).

Irish Transport Minister: Industry will ‘struggle environmentally reconcile its rapid growth’Ireland’s Minister of Transport, Tourism and Sport Shane Ross



stated (02-Jun-2016) while aviation brings about significant economic and social benefits, it is also contributing negatively to climate change, noise and local air quality. Mr Ross said a “significant upward shift in demand for air travel” has led to increased overall pressures on the environment, while stating he expects this trend to continue. Mr Ross acknowledged “rapid developments in aviation technology” and “strides that will likely be made in future years”, though stated the industry “will struggle to reconcile its rapid growth with its environmental footprint”.

Irish Transport Minister: Through ‘innovative approaches’, ATM will be able to improve efficiencyIreland’s Minister of Transport, Tourism and Sport Shane Ross stated (02-Jun-2016) the modernisation and commercial development of ATM is recognised as “a priority at both a global level in ICAO and at a regional level in Europe”. Mr Ross continued: “We must recognise that the provision of high-quality services and the maintenance of a modern aviation infrastructure represent a significant challenge for Ireland and other EU member States under the legislative provisions of the Single European Sky. The current ATM landscape, with the high number of ANSPs has resulted in a complex operational landscape. I believe that it is only through innovative approaches that we can expect to see a clear way forward to improved operational efficiencies”.

EC aims to commence talks on regional aviation agreements with Qatar and UAE in autumn 2016European Commission (EC) Director General for mobility and transport Henrik Hololei said the Commission expects to commence negotiations on regional aviation agreements with Qatar and the UAE in autumn 2016, following the expected adoption of mandates by EU Transport Ministers in Jun-2016 (Arabian Business/The National, 02-Jun-2016). Mr Hololei said the proposed agreements would seek to address competition and subsidy issues raised by European airlines. Mr Hololei said, “What we aim for is a good and balanced outcome taking into account the concerns and interests of both sides.”

‘The Mexican aviation is growing and is healthy’: IATA SVP safety and flight operationsIATA SVP safety and flight operations Gilberto Lopez-Meyer stated the Mexican aviation industry is enjoying one of its best moments in spite of facing constraints generated by airport infrastructure (El Economista, 02-Jun-2016). Mr Lopez-Meyer said: “The Mexican aviation is growing and is healthy”. The country’s fleet renewal reduced average fleet age by 10 years the. In addition, Mr Lopez-Meyer approved the decisions taken for the New Mexico City International Airport, however, reminded Cancun Airport should take preventive measures to ensure it doesn’t become affected by saturation.

Irish Transport Minister comments on travel taxes and chargesIreland’s Minister of Transport, Tourism and Sport Shane Ross commented (02-Jun-2016) on the government suspending the

airport travel tax in 2013 “as part of our efforts to encourage the development of new routes and services”. Mr Ross said responses were “very positive” to the initiative, however the tax was introduced during a “fiscal emergency”. Mr Ross concluded: “ I can appreciate why governments faced with the very difficult task of balancing the books, have chosen to introduce aviation taxes, given that in many cases airlines are exempt from other taxes such as VAT and fuel tax. Taxation is a sovereign matter for each government to decide on and no industry should feel that it is immune from contributing its fair share”.

“Taxation is a sovereign matter for each government to decide on and no industry should feel that it is immune from contributing its fair share.”

Emirates president: Brexit would send ‘shockwaves throughout the EU’Emirates president Sir Tim Clark said the UK’s potential exit from the EU would send “shockwaves throughout the EU” (Arabian Business, 03-Jun-2016). Sir Tim said the Brexit would “flatline demand” and have a “severe” impact. Sir Tim said: “For somebody that is running a business that has very, very high demand in our European countries and cities, to see destabilisation wouldn’t serve any purpose at all. I would say probably 30 per cent to 40 per cent of everything we do comes out of Europe - so it’s vital for us.” Sir Tim added, “I am forever the optimistic and would personally like to think that sense will prevail and this destabilising effect will not happen.”

4300 leased aircraft are managed from Ireland for economic value of USD125bn: Transport MinisterIreland’s Minister of Transport, Tourism and Sport Shane Ross said (02-Jun-2016) Ireland has “been at the heart” of aviation finance developments in recent years. Mr Ross confirmed as of 2015, approximately 4300 leased aircraft are managed from Ireland with a total estimated value in the region of USD125 billion. Mr Ross stated in order to maintain and grow Ireland’s position in the market, the Irish Government “will continue to keep Ireland competitive and an attractive location for aviation financial services”.

Visa on arrival would boost arrivals from China to South Africa: WTTC CEOWorld Travel and Tourism Council (WTTC) president and CEO David Scowsill said offering visas on arrival for Chinese tourists in South Africa (SA), “could be an important strategy for the SA tourism market growth” (Fin24, 02-Jun-2016). Mr Scowsill said a visa on arrival programme will result in increased visitor numbers from China to South Africa.




Aeromexico and Delta alliance approval expected still in 2016Aeromexico CEO Andrés Conesa, commenting on the carrier’s alliance with Delta Air Lines, stated US authorities’ approval are expected still in 2016, clamming the alliance “has benefits for consumers and the carriers, in growth and development” (El Financiero, 02-Jun-2016).

Irish Transport Minister welcomes daa plans for new runway at Dublin AirportIreland’s Minister of Transport, Tourism and Sport Shane Ross welcomed (02-Jun-2016) daa’s decision to commission the construction of a new runway at Dublin Airport. Mr Ross said: “The project is expected to create thousands of jobs and will be invaluable in allowing the airport to grow, which in turn allows the Irish economy to grow, by supporting employment, trade, FDI and tourism”.

Irish Transport Minister comments on Norwegian’s application for Cork-US servicesIreland’s Minister of Transport, Tourism and Sport Shane Ross commented (02-Jun-2016) on Norwegian Air International’s route application for services from Cork Airport to the US. Mr Ross commended the airline for “already providing new routes at low-cost between places on both sides of the Atlantic that have never had transatlantic services before” as a new entrant to the market, while stating he looks “forward to the US authorities confirming its tentative decision to grant a permit to the Irish airline as soon as possible”.

Deutsche Lufthansa AG and Air China expect to finalise JV by mid Jun-2016Deutsche Lufthansa AG CEO Carsten Spohr stated a joint venture with Air China is expected to be finalised in mid Jun-2016 (Business Times, 02-Jun-2016). The CEO admits the deal is “complex”, however the JV will help reduce its losses from long-haul routes to Asia. According to CAPA Traffic Data, both airlines currently has the highest capacity on routes between Europe and China, Air China with 10.09% and Lufthansa with 10.5%.

Brussels Airlines CEO: We need for go for a global solution for the carbon-offsetting schemeBrussels Airlines CEO Bernard Gustin discussed (02-Jun-2016) the importance of a global carbon-offsetting scheme, stating, “Europe is trying to have its own scheme, but I think we need for go for a global solution and so therefore I really hope that within ICAO that we can find a balanced and positive solution”. Mr Gustin stressed that to this very day, services from Amsterdam to Barcelona “still zig-zag instead of taking the straight/simplified route”. Mr Gustin said, “If we can count on a single European Sky, the average airline could save up to 15% of fuel”. Mr Gustin said this would be the biggest economic and ecologic project. “There I have difficulties to understand why its so difficult to come to a solution which is just so obvious. It would be such an inspiring project, to have a project that allows most airlines to substantially improve

their bottom line”. Mr Gustin said, “I really hope we can go forward with these types of measures”.

Brussels Airlines CEO: ‘We need to better position aviation towards our regulators’Brussels Airlines CEO Bernard Gustin stated (02-Jun-2016) the IATA AGM has highlighted the importance of the aviation industry to the global economy. In stating that, Mr Gustin said, “I think we need to better position aviation towards our regulators and governors, so they can understand the vital role we play on the world economy”.

Brussels Airlines: The aviation industry currently faces two major issues; environment and securityBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) the aviation industry faces two major challenges; environment and security. Mr Gustin said environment in that “how do we make sure that we basically contribute to the positive evolution of the environment, and we know aviation in that respect does not have the best reputation. This is not always the right reputation, but we can play our role in improving the environmental situation in the world”. In terms of security, Mr Gustin said, “I hope we can work together on global appropriate security solutions related to risk management, and [that] we avoid falling in individual measures that are not always appropriate. I think its important we learn from what happened and we continue to improve security without falling in disproportionate measures”.

The aviation industry faces two major challenges; environment and security.

WTTC CEO calls for South Africa to show leadership in liberalising African aviationWorld Travel and Tourism Council (WTTC) president and CEO David Scowsill called for South Africa to show leadership in liberalising African aviation (Fin24, 02-Jun-2016). Mr Scowsill said: “For years we have been talking about the liberalisation of African aviation. It is very important to stimulate economies and create jobs. It will also enable low-cost airlines to unlock value.”

African airlines disadvantaged by high fuel prices and passenger charges: AFRAAAfrican Airlines Association (AFRAA) secretary general Dr Elijah Chingosho said African airlines are at a competitive disadvantage as fuel prices in Africa have “hardly dropped” compared to the rest of the world (Fin24, 02-Jun-2016). Dr Chingosho also noted passenger charges in Africa are among the highest in the world, resulting in high airfares. Dr Chingosho said, “Air travel is supposed to be a means of mass transport... Governments need to get away from thinking that air transport is only a means of transport for the wealthy.”



blocking of funds would negatively impact cash flow for airlines, which may respond by reducing operations. Dr Chingosho said, “AFRAA is teaming up with IATA to reinforce the message and lobby states to look for alternative solutions to blocking airline funds. We are urging the affected states to accept payments in local currencies for some aviation services, for example ground handling, fuel and catering.”

Irish Transport Minister: Safety and security ‘underpin all other objectives’ in aviationIreland’s Minister of Transport, Tourism and Sport Shane Ross commented (02-Jun-2016) on safety and security in the aviation industry stating the factors “underpin all other objectives in this sector”. Mr Ross continued: “In recent times, the aviation industry has been faced with the sometimes seemingly insurmountable task of managing challenges such as terrorist attacks and the impact of global conflicts. Each of these situations has presented its own unique challenges to overcome. These events have highlighted that now, more than ever, we must be cognisant of the importance of maintaining the highest standards of security and safety in aviation”. Mr Ross concluded by commenting on the Irish National Aviation Policy, stating it “acknowledges the need for robust aviation safety and security management systems and for risk-based, outcomes focussed, aviation safety and security regulation”.

Irish Transport Minister comments on the role of regulatory bodies in the aviation industryIreland’s Minister of Transport, Tourism and Sport Shane Ross commented (02-Jun-2016) on the role of regulatory bodies in aviation, stating “there will always be debate as to what balance between regulation and self-regulation is best in different sectors”, though acknowledged IATA and ICAO have “been a great example of collaborative regulation”. Mr Ross said the implementation of ICAO’s Standards and Recommended Practices (SARPs) “would not be possible without the complementary suite of standards, practices and procedures developed within IATA”.

IATA appoints KLM CEO to board of governors3-Jun-2016 10:53 AMIATA appointed (02-Jun-2016) KLM president and CEO Pieter Elbers as a member of its board of governors.

More than USD1.4bn in airline revenue blocked in Angola, Egypt, Nigeria and Sudan: IATA CEOIATA director general and CEO Tony Tyler estimated airline revenue blocked by remittance issues in Angola, Egypt, Nigeria and Sudan totals more than USD1.4 billion (Fin24, 02-Jun-2016). Mr Tyler said oil-based economies in particular create revenue remittance problems for airlines.

Aer Lingus CEO comments on priorities for 2016Aer Lingus CEO Steven Kavanagh stated (02-Jun-2016) the priorities for the carrier in 2016 are “to continue our profitable expansion to maintain safe and efficient operations”. Mr Kavanagh said he expects to achieve this by relying on IATA

Brussels Airlines’ response to the 22-March events ‘gives me a lot of comfort for the future’: CEOBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) the carrier has taken away three “learnings” from the 22-Mar-2016 Brussels Airport event, the first is the vital role of airlines, particularly to the economy, the second the outstanding response of airline staff to resuming operations from other bases, and third and most importantly, the reputation of the company “has gone up” following the incident. Mr Gustin said, “That gives me a lot of comfort for the future, despite the difficult moment we continue to know”.

Irish Transport Minister comments on global airline and route liberalisationIreland’s Minister of Transport, Tourism and Sport Shane Ross commented (02-Jun-2016) on airline and route liberalisation, stating he has “always been pro-consumer and pro-competition”. Mr Ross believes an “open and competitive aviation sector is the best mechanism to meet the challenges ahead” and referred to the diverse business models of carriers based in Ireland. Mr Ross concluded: “Facing up to these new market forces has not been easy and many airlines that failed to keep up with developments are no more. However, the big picture shows that the liberalisation process has contributed hugely to the development of the sector as a whole. Most importantly it has provided the industry’s customers with new routes, new and better services and lower fares, whilst also facilitating general economic growth”.

“The liberalisation process has contributed hugely to the development of the sector as a whole.”

Brussels Airlines CEO: ‘We’ve had a fantastic story over the past two years’Brussels Airlines CEO Bernard Gustin reflected (02-Jun-2016) on the past 12 months, stating, “We’ve had a fantastic story over the past two years, despite heavy competition. We have been growing passenger by 30%, we had a strong profit improvement, and we had a 5% operational profit” noting “we’re very positive”. Mr Gustin said despite the fact, the carrier was “badly hit by the 22-Mar-2016 events. Of course we are going to recover and we still are”. Mr Gustin said the plan is to continue to “grow substantially our market and to keep a strong profit for 2016”.

AFRAA and IATA lobbying African governments to prioritise aviation in resolving remittance issuesAfrican Airlines Association (AFRAA) secretary general Dr Elijah Chingosho said AFRAA and IATA are lobbying African governments involved in airline revenue remittance issues to prioritise aviation companies in allocating foreign currency (Fin24, 02-Jun-2016). Dr Chingosho said the continued




Operational Safety Audits (IOSA) and ultimately continuing to simplify the carrier’s business.

AASA CEO notes lack of financial growth in South Africa, expresses concern about industry’s ‘image’Airlines Association of Southern Africa (AASA) CEO Chris Zweigenthal said airlines in South Africa, “must be able to compete on a sustainable and a profitable footing” (Fin24, 02-Jun-2016). Mr Zweigenthal said the South African aviation sector is in a phase of growth in passenger numbers without financial growth, noting low yields due to competition and excess capacity and high costs and low profit margins due to the weak rand. Mr Zweigenthal expressed concern about the South African aviation industry’s “image,” stating: “Consumers need certainty that if they buy a ticket, they will be able to fly...when a promise is made, it must be delivered on.”

IATA: Airlines are ‘engines of prosperity’ but are still just returning the minimum to investorsIATA DG and CEO Tony Tyler reported (02-Jun-2016) that “overall” it is a good time for the air transport industry, despite “generally adverse economic conditions”. According to Mr Tyler, airlines are “engines of prosperity” that have historically “struggled to turn a profit and reward investors”. This “is beginning to change”, with airlines forecast to make an aggregate return in excess of the cost of capital in 2016, for only the second year in the history of the industry. This is “still just the minimum performance that investors expect” said Mr Tyler and they are “beginning to see reasonable rewards for the capital they risk”. With improved profitability, “airlines are able to make critical investments and shore-up their resilience by paying down debt—although it will take several years of solid profitability to fix most balance sheets properly” Mr Tyler added.

IATA: Clear upside remaining for airline profitabilityIATA DG and CEO Tony Tyler said that airlines are expected to make USD10.42 profit for each passenger carried in 2016, and there is “clearly still upside for airlines”. Lower oil prices are helping profitability, although this is “tempered by hedging and exchange rates” and airlines are finding new value streams to increase ancillary revenues. Mr Tyler also observed that JVs and other forms of cooperation are “improving efficiency and increasing consumer choice while fostering robust competition”.

IATA sees ‘fervent support for a mandatory global carbon offset scheme from 2020’IATA DG and CEO Tony Tyler said (02-Jun-2016) that the aviation industry’s 2020 carbon-neutral growth target “cannot be met with improvements in technology, infrastructure and operations alone” and the establishment of a global market-based measure is clearly necessary. There is “fervent support for a mandatory global carbon offset scheme from 2020” in the aviation industry, although the industry “should not underestimate how difficult it will be to get ICAO’s 191 member states to align and agree”. A proposal called CORSIA - Carbon

Offset and Reduction Scheme for International Aviation - is on the table at ICAO. It has been developed with input from industry and civil society, it “will be the simplest and most cost-effective system to establish and manage offsets linked to real and permanent carbon reductions” according to Mr Tyler. He added that the proposal is still a work in progress and balancing the interests of all those involved “is a Herculean task”.

There is “fervent support for a mandatory global carbon offset scheme from 2020” in the aviation industry.

ICAO Council President comments on development of CORSIAICAO Council President Olumuyiwa Benard Aliu commented (02-Jun-2016) on the development of a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), stating he expects the scheme to be “fully operational” by 2020. Dr Aliu confirmed this includes the establishment of registries, the determination of the monitoring review and verification requirements, and emissions unit criteria. Dr Aliu concluded: “As always, our sector has relied on its historic strengths – cooperation and consensus – to reach this point. And we will need to preserve our highest respect for those values in the months ahead if we are to avoid an acrimonious and inefficient patchwork of emissions regime”.

ICAO Council President confirms revision to concept operations of GADSS to be ready by end-2016ICAO Council President Olumuyiwa Benard Aliu confirmed (02-Jun-2016) a new revision to the concept of operations for ICAO’s Global Aeronautical Distress and Safety System (GADSS) “should be ready” by end-2016. Dr Aliu also stated revisions to ICAO’s Global Plans for Safety and Air Navigation, the GASP and the GANP, were also recently approved by the ICAO Council and are expected to be adopted at the assembly.

Qantas Group ‘only really scratching the surface’ of what’s possible with data analyticsQantas Group CEO Alan Joyce said (31-May-2016) data is “hugely powerful if you know how to use it,” but noted: “I think we’re only really scratching the surface of what’s possible.” Mr Joyce explained: “There are 11 million Qantas frequent flyers and we’re talking to them all the time to get insights into what we could do differently. That feeds into the decisions we make on customer service, but it’s also helping us set up new ventures and move into areas.” Mr Joyce used the example of the recently-launched Qantas Assure programme, provides health insurance that incentivises people to earn frequent flyer points for exercising. Mr Joyce explained: “If you’d pitched that to me a few years ago



I would have said it was marginal, but, by looking at the insights and talking to our customers, we picked up that there was pent-up demand for something different in the insurance sector.”

“There are 11 million Qantas frequent flyers and we’re talking to them all the time to get insights into what we could do differently.”

Industry sends out ‘a lot of mixed messages’ leading to inconsistent government policy: QantasQantas Group CEO Alan Joyce said (31-May-2016) the industry gives out a lot of mixed messages that leads to inconsistent government policy. Mr Joyce explained: “A market like Hong Kong has made its name on being open to trade and investment, but the decision to knock back Jetstar’s application to set up an LCC there was widely seen as protectionist.” Mr Joyce added: “I think we’ve gone backwards a bit when it comes to aviation policies that allow airlines to compete on a level playing field.”

Qantas ‘big supporters’ of new Sydney Airport, but notes: ‘Let’s not build a Taj Mahal’Qantas Group CEO Alan Joyce said (31-May-2016) the group are “big supporters” of New Sydney (Badgerys Creek/Western Sydney) Airport, but noted: “It’s important to manage expectations around size and scale.” Mr Joyce explained: “This is going to be a secondary airport that caters mostly to LCCs [low cost carriers] and freight, so let’s not build a Taj Mahal. Let’s get the foundations right and grow from there.”

Qantas notes ‘there’s still a role for the multilateral alliances’Qantas Group CEO Alan Joyce said (31-May-2016) there is “still a role for the multilateral alliances,” noting: “We know that our frequent flyers get a lot of value out of our oneworld links and those relationships will always be important to us.” Mr Joyce added that bilateral partnerships will have “the biggest impact on the industry in the future,” noting: “The joint venture model works because it gives you a deep relationship without any of the complexity of taking equity. And over the longer term, I think our experience with these sorts of relationships will stand us in good stead as and when the time’s right to look at greater consolidation.”

Emirates partnership has ‘gone beyond our expectations’: Qantas GroupQantas Group CEO Alan Joyce said (31-May-2016) the carrier’s partnership with Emirates Airline has “gone beyond our expectations,” noting almost AUD2 billion (USD1.4 billion) in bookings on the partnership code and Qantas’ codeshare

bookings to Europe up four times. Mr Joyce added: “The other thing it’s done for Qantas is free us up to move our assets and investments to higher-growth regions in Asia and the Americas, rather than lower-growth markets in Europe.”

‘You can’t put an end date on the need to evolve’: Qantas GroupQantas Group CEO Alan Joyce said (31-May-2016) the carrier has achieved AUD1.4 billion (USD1 billion) of its AUD2 billion (USD1.4 billion) transformation programme since 2014, with AUD600 million (USD434 million) “of cost savings and revenue benefits still in the pipeline.” Mr Joyce added: “But, the reality is that you can’t put an end date on the need to evolve... I think airlines have woken up to the fact that we can’t go back to the old boom-bust cycle where you make hay in good times and ride out the bad times.”

ICAO Council President: Works on ATM efficiency and sustainable fuels ‘continue to progress’ICAO Council President Olumuyiwa Benard Aliu stated (02-Jun-2016) works on improving ATM efficiency and the use of sustainable aviation fuels “continues to progress”. Dr Aliu said he “firmly” believes the political will “exists to realise a global market-based measure (MBM) solution to complement these” measures. Dr Aliu confirms ICAO is reviewing concepts for its Global Aeronautical Distress and Safety System (GADSS), with air navigation objectives being considered including:

♦ Convergence on the “next generation of data communications”;

♦ Agreement on the system architecture for global system wide information management (SWIM);

♦ Consolidation of the work programme for the Block 2 Aviation System Block Upgrades (ASBUs) module;

♦ Development of a new Block 4 under the ASBUs, so that the GANP provides “greater planning and investment certainty both pre and post-2028.

Irish Transport Minister: Aviation industry played a ‘vital role’ in Ireland’s economic recoveryIreland’s Minister of Transport, Tourism and Sport Shane Ross stated (02-Jun-2016) the aviation industry has played a “vital role” in Ireland’s economic recovery. Mr Ross stated Ireland recognises the “importance of having a clear policy framework in place that will create the right conditions to encourage continued growth in the industry”. Mr Ross referred to the updated Irish National Aviation Policy as an example, while confirming “good progress” has been made on its implementation.

Venezuela ‘Obviously it’s not sustainable’: Aeromexico CEOAeromexico CEO Andrés Conesa revealed the carrier studies the possibility of ceasing operations in Venezuela (El Financiero, 02-Jun-2016). The carrier operates daily service to the country and disclosed Venezuela has blocked repatriation of funds in the last two years. Mr Conesa stated




“Obviously it’s not sustainable” adding: “Recently two other carriers withdrew [from Venezuela], however a lot more have withdrawn. It’s a subject we evaluate permanently. We have one daily service, but the situation is deteriorating by the second”.

Singapore Airlines Group ‘very bullish’ about India, despite cost and regulatory issuesSingapore Airlines CEO Goh Choon Phong said (02-Jun-2016) the Singapore Airlines Group is “very bullish about the Indian market” and its long-term growth. Mr Goh said, “There is no question that [India] will emerge to be one of the predominant, leading markets for travel.” Mr Goh also stated, “India is a difficult market to operate in,” noting cost issues and regulatory constraints, including the ‘5/20’ rule on international operations. Mr Goh said, “Vistara otherwise is doing very well.”

Singapore Airlines CEO outlines group strategySingapore Airlines CEO Goh Choon Phong said (02-Jun-2016) the Singapore Airlines Group strategy is based on the following four elements:

♦ Continued strengthening of its premium positioning and offering by developing Singapore Airlines’ product, service and network. The airline aims to achieve organic network growth, including launching routes made feasible by its new A350-900s, and expansion through partnerships;

♦ It’s four-airline structure, which provides the “nimbleness and flexibility” to deploy different products to different markets;

♦ Overseas investments and JVs, including NokScoot and Vistara;

♦ Other businesses, including the pilot training centre established with Airbus.

Singapore Airlines CEO: SE Asia a ‘particularly challenging environment’Singapore Airlines CEO Goh Choon Phong noted (02-Jun-2016) improvement in the global performance of airlines, but stated performance is not even. Mr Goh said Southeast Asia is a “particularly challenging environment” due to the proliferation of LCCs and “huge” capacity injection by full service carriers, including the Gulf carriers. Mr Goh said the Singapore Airlines Group is taking strategic steps to address these structural challenges.

Southeast Asia is a “particularly challenging environment” due to the proliferation of LCCs and “huge” capacity injection by full service carriers.

Qantas Group to exercise additional Boeing 787-9 options if performance on-specQantas Group CEO Alan Joyce said he expected the carrier would exercise some of its 15 purchase options and 30 purchase rights for the Boeing 787-9 if its first batch of eight perform as expected (The Australian, 03-Jun-2016). Mr Joyce noted: “If we can demonstrate that we can make good money out of those eight then the next thing we will do is order the rest of them.”

Qantas notes Boeing 787-9 fleet will be in ‘a very luxurious configuration’Qantas Group CEO Alan Joyce said the carrier’s Boeing 787-9 fleet will be in “a very luxurious configuration” given the expected focus on long-haul services (The Australian, 03-Jun-2016). Mr Joyce noted: “There’ll be a big business class, a big premium economy cabin and we’ll obviously be given some very good seat pitch for the economy seats given the lengths that we will be flying.”

Qantas ‘just starting’ to have dialogue about routes for incoming 787-9 fleetQantas Group CEO Alan Joyce said the carrier is “just starting” to have dialogue with airports and governments about new routes for its incoming Boeing 787-9 fleet (The Australian/Fairfax, 03-Jun-2016). Mr Joyce said: “We have the range for Sydney-Chicago, Melbourne-Dallas, Brisbane-Dallas and there’s the possibility of flying Perth to London.” Mr Joyce added: “They are all on the list but it depends on the support we get from the governments and airports to what network we will actually settle on. We are just starting to have that dialogue.” According to the CAPA Fleet Database, Qantas Airways will take delivery of the first four of eight Boeing 787-9s in 2H2017.

US market remaining strong despite increased level of competition: Qantas GroupQantas Group CEO Alan Joyce said the US remains a strong market for the carrier despite the increased level of competition (Fairfax, 03-Jun-2016). Mr Joyce noted the Sydney-San Francisco route, which Qantas resumed in Dec-2015, is performing above expectations. According to OAG, Qantas Airways operates 44.3% of seats between Australia and the US as of week starting 30-May-2016.

All indications that Virgin Australia will continue to operate rationally in domestic market: QantasQantas Group CEO Alan Joyce said indications are that Virgin Australia would continue to operate rationally in the domestic market (Fairfax, 03-Jun-2016). Mr Joyce explained: “When it comes to the competition, we want a stable competitive environment where the competition is acting commercially.” Mr Joyce continued: “I think it is very clear from what the shareholders in our competitor have said is that they want a return. There is nothing anybody is saying which is that the competitive dynamic is going to change and that [Virgin] is not going to be a commercial operation.”



Qantas Group not concerned about Virgin Australia/HNA tie-up: ‘We’ve seen this movie before’Qantas Group CEO Alan Joyce said the carrier is not concerned about a proposed Virgin Australia/HNA Group strategic alliance, noting: “We’ve seen this movie before” (Australian Aviation/Fairfax, 03-Jun-2016). Mr Joyce said he would rather have the partnerships Qantas has with China Eastern Airlines and China Southern Airlines: “We think our position in China and Asia is very, very strong given we have a massive network in Australia. We will play our own game.”

Air New Zealand to maintain Virgin Australia JV regardless of status as shareholderAir New Zealand CEO Christopher Luxon reiterated that the carrier would maintain its trans-Tasman JV with Virgin Australia regardless of its status as a shareholder (Fairfax, 03-Jun-2016). Mr Luxon explained: “The alliance is working incredibly strongly for both Virgin and Air New Zealand... I think both parties would strongly agree with that. The alliance preceded the shareholding.” Mr Luxon said ex-Australia passengers feature heavily on its long-haul services, noting 40% of passengers travelling to Buenos Aires originate in Australia while 20% on its Houston-bound passengers do the same. As previously reported by CAPA, Air New Zealand currently holds 25.9% of Virgin Australia and is exploring options for a part or full sale by 30-Jun-2016.

Air New Zealand confident it can dispose of Virgin Australia holding by 30-Jun-2016Air New Zealand CEO Christopher Luxon said he remains confident the carrier can sell all or part of its 25.9% holding in Virgin Australia by 30-Jun-2016 (Fairfax, 03-Jun-2016). Mr Luxon said: “Nothing has changed for us... We are right in the middle of the process and obviously have got to follow it through to its logical conclusion.” Mr Luxon continued: “I appreciate there is lots of speculation but there is a big process that is going to play out and there are going to be multiple phases to it and we are just working our way through that.”

Delta Air Lines has not changed position on Gulf carriersDelta Air Lines CEO Ed Bastian stated (02-Jun-2016) the airline’s position to the Gulf carriers has not changed since he took over on 02-May-2016. “It is with the government right now so it would not be appropriate to get into discussion,” he said.

Delta CEO: economy basic is technology, not a fareDelta Air Lines CEO Edward Bastian stated (02-Jun-2016) the airline’s introduction of the economy basic offering is still an experiment and that it is not a fare but a “technology solution”. “The technology on it is complicated,” Mr Bastian said of being able to offer the fare.

Delta Air Lines says a good airline is about soft goods not just the hard goods

Delta Air Lines CEO Edward Bastian noted (02-Jun-2016) the importance of the carrier’s people, saying a good airline is “about soft goods not just the hard goods”. He also noted that the carrier has just experienced over 400 hours in a row without a cancellation worldwide.

Delta has 10% premium in the US market: CEODelta Air Lines CEO Edward Bastian stressed (02-Jun-2016) the carrier’s strong position in the corporate market, stating the carrier has a “10% premium in the US market versus our competition.” He added: “We have done phenomenally well with the corporate travellers”.

Delta expects all time record in summer trafficDelta Air Lines CEO Edward Bastian stated (02-Jun-2016) demand is “very strong” and there will be “all time record this summer” for traffic in the US. The combination of strong demand and stable fuel prices has resulted in the carrier being in a “good place”. He also said the carrier keeps capacity generally in line with GDP growth.

Delta Air Lines says aircraft tracking is collective responsibility for the airline industryDelta Air Lines CEO Edward Bastian stated (02-Jun-2016) aircraft tracking is not a financial issue, and is a “responsibility we collectively in the industry have to take.”

Aircraft tracking is not a financial issue, and is a “responsibility we collectively in the industry have to take.”

Brussels Airlines: airlines cannot compete on luxuryBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) Brussels Airlines had to reduce costs to price attractively with LCCs. Mr Gustin said that, at least in a European context, airlines cannot hope for a significant yield premium. “If you believe in luxury product, you’re dead,” Mr Gustin said.

Delta Air Lines describes US security situation as ‘difficult’Delta Air Lines CEO Edward Bastian stated (02-Jun-2016) the security situation in the US is “difficult” with long line waits at present, which in itself creates a security risk. He said the carrier is working with the TSA on the issues, which relate to resource shortages. He noted that it will be a “busy summer” for the TSA, airlines and passengers given the “queue management” issues. He also noted: “We’ve done an awful lot on the airline side to manage the issue”. As part of this, the TSA has handed over some areas to be conducted in-house by the carrier. He said while the carrier is “not happy that our passengers are misconnecting or missing flights” he “won’t criticise the TSA publicly.”




Philippine Airlines may use new A321neo fleet to launch Delhi and nonstop to BrisbanePhilippine Airlines (PAL) president Jaimie Bautista, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that PAL plans to take delivery of its first two A321neos in 2H2017. Mr Bautista said PAL is looking at using the A321neo to resume service to Delhi. PAL is also considering using the A321neo to take over existing flights to Australia including Brisbane and Sydney. PAL now serves Brisbane via Darwin using the A320ceo but is interested in potentially using the improved range of the A321neo to launch nonstop flights from Manila to Brisbane. PAL may also potentially use the A321neo to serve Sydney. PAL currently operates one daily flight to Sydney using a mix of A330s and A340s but could increase Sydney to twice daily using the A321neo. PAL has orders for 30 A321neos. Mr Bautista said PAL will most likely opt for an additional fuel tank for the initial batch of aircraft, giving PAL the range to use the aircraft for Delhi and Sydney.

Thai Airways notes need to increased speed of data tracking of aircraftThai Airways CEO Charamporn Jotikasthira noted (02-Jun-2016) the need for increased speed of data tracking of aircraft. He said manufacturers need to help in this process.

Philippine Airlines to take delivery of three A321s and two 777-300ERs in 2H2016Philippine Airlines (PAL) president Jaimie Bautista, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that PAL plans to take delivery of three A321s and two 777-300ERs in 2H2016. PAL so far in 2016 has taken delivery of two A321s. PAL is leasing the two additional 777-300ERs and is planning a mix of finance leases and sale leasebacks to cover the five A321s.

Thai Airways on track with recovery effortThai Airways CEO Charamporn Jotikasthira, at the IATA Annual General Meeting, told the CEO Insight Debate (02-Jun-2016) that Thai is on track with its recovery effort. He said Thai managed a 12% profit margin in 1Q2016 and is currently about halfway through a two year reform programme. “We are pretty much on track,” he said, adding that Thai will maintain its position as a full serviced airline.

Cork Airport welcomes comments from Irish Transport Minster on airline and route liberalisationCork Airport MD Niall McCarthy welcomed (02-Jun-2016) comments from Ireland’s Minister for Transport, Tourism and Sport Shane Ross, whom called on the US DoT to confirm its tentative decision to grant a permit for Cork-US services to Norwegian Air International.

Avianca Brazil not yet decided on fleet expansionAvianca Brazil CEO Jose Efromovich, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA the airline is taking a wait and see approach to fleet expansion.

Avianca Brazil did not add any aircraft in 1H2016 and for now has no commitments for additional aircraft. However Avianca Brazil could still potentially add aircraft in 2H2016 depending on market conditions. Mr Efromvich said a decision on the 2H2016 fleet plan will be decided within the next month or so. “There are so many variables. As soon as it calms down we will see what direction we will go in,” he said. Avianca Brazil currently operates 43 A320 family aircraft, according to the CAPA Fleet Database. It phased out its last Fokker 100s in 2015. Mr Efromovich said Avianca Brazil grew ASKs by 14% last year as eight A320s replaced eight Fokker 100s.

Avianca open to new investorsAvianca Brazil CEO and Avianca Holdings board member Jose Efromovich, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that Avianca Holdings and Avianca Brazil are not actively seeking a new investor but are willing to consider any approaches. “We are not desperate for a girlfriend. We are happy to be a bachelor,” Mr Efromovich said. “We are open. It has to make sense. If it doesn’t make sense we will pass.” Avianca Brazil is currently a separate company from Avianca Holdings but the Efromovich-owned Synergy Group are the largest owners of both. “The two companies will merge one day or another,” he said, but adding there is no hurry to merge the two as Synergy controls both.

“We are not desperate for a girlfriend. We are happy to be a bachelor.”

New visa policy prompts Avianca to increase Bogota-MadridAvianca CEO Hernan Rincon, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the Colombia-based airline group is expanding on the Bogota-Madrid route in response to increasing demand. Mr Rincon said demand for Europe has increased significantly from Colombia and Peru after Europe’s Schengen region implemented a visa free policy for Colombians and Peruvians in 1Q2016. Avianca is increasing Bogota-Madrid from 11 to 18 weekly frequencies. Avianca also has seen an influx of transit passengers to continental Europe on its London service.

Avianca to take delivery of only two aircraft in 2H2016Avianca CEO Hernan Rincon, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA the Colombia-based airline group plans to take delivery of one 787-8 and one A320 over the remaining seven months of 2016. Avianca Holdings has deferred several aircraft deliveries in response to challenging market conditions. The 787 will be used to replace an A330-300. Mr Rincon said the group is planning to grow ASKs by 3% to 5% in 2016, driven primarily by frequency increases to Spain.



South African Airways may maintain codeshare partnership with EtihadSouth African Airways (SAA) CEO Musa Zwane, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that SAA may forge a new partnership agreement with Etihad. SAA dropped service to Abu Dhabi in Mar-2016 and announced it would also terminate its codeshare with Etihad. But Mr Zwane said that while SAA gave notice it would pull the Etihad codeshare it has not yet suspended the codeshare and Etihad has since asked SAA to reconsider. Discussions with Etihad took place at the IATA AGM and the two airlines plan to continue discussions to see if a new agreement can be forged. SAA is still not keen to continue with the original codeshare agreement as it thinks it is one-sided but would consider maintaining the relationship with Etihad if a new more favourable deal can be forged.

SAA is still not keen to continue with the original codeshare agreement as it thinks it is one-sided.

South African Airways considers new fifth freedom long-haul routes from West AfricaSouth African Airways (SAA) CEO Musa Zwane, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that SAA is looking at potentially launching new fifth freedom flights from West Africa to the UK and US. Mr Zwane said routes under consideration include Accra-London, Lagos-New York and Abuja-Washington Dulles. SAA currently operates from both Accra and Dakar to Washington Dulles. New York JFK and London Heathrow are currently only served nonstop from Johannesburg.

IATA DG and CEO: Association is in ‘strong and stable’ stateIATA DG and CEO Tony Tyler issued (02-Jun-2016) his report on the status of the association. Key highlights include:

♦ Membership: 264 airlines from 118 countries collectively providing 83% of global traffic. 16 airlines have joined IATA since the 2015 AGM. At least a third of these new members are “not traditional hub-and-spoke operators”;

♦ Management: IATA senior leadership team included the following changes over the last 12 months: » Nick Careen joined IATA as SVP responsible for airport,

passenger, cargo and security issues; » Gilberto López-Meyer has been appointed the SVP

leading the safety and flight operations division; » Anton Grove appointed VP for people, performance and

development department; » Hussein Dabbas, regional VP for Middle East and Africa,

left IATA after four years. A search is underway for his successor.

♦ Financial system: In 2015 the IATA financial systems processed USD363 billion in payments. Virtually 100% of all funds were delivered on time. Unrecovered debt was less than 0.025% of funds handled; » Total blocked funds now exceed USD5.5 billion, with

the top five countries involved are Venezuela (USD3.8 billion), Nigeria (USD600 million), Sudan, Egypt and Angola. IATA “will do all we can to facilitate full repatriation”. This is usually guaranteed in trade and air service agreements. IATA has strengthened it early alerting system so that airlines will have easy access to timely risk management information;

♦ Value chain: IATA “continues its efforts to rebalance the value chain”. In the Middle East, the lower oil price is “tempting some governments to look for ways to make-up for lost revenues” and IATA is “fighting charges increases there and elsewhere”. » IATA has filed as a complainant asking the European

Commission to ensure that OEMs do not abuse their dominant position in the after-market for MRO services and spare parts. IATA members “want to be able to negotiate contract terms more effectively and with more options than much of the OEM community will entertain today”;

♦ Other improvements: » Cargo transformation: The processes supporting

global cargo are “remnants of the last century” and e-air waybill is “spearheading a much-needed transformation of air cargo to paperless processes”. The IATA board wants 56% penetration on legally feasible trade lanes by the end of 2016. IATA is supporting that effort by working with airports to establish SOPs for implementation and regular operations;

» Ground safety: The cost of ground damage is “too high” and IATA has developed the IATA Ground Operations Manual and the IATA Safety Audit for Ground Operations to manage and improve performance;

» NewGen ISS: New settlement system aims to improve the safety of the USD230 billion handled by the Billing and Settlement Plan system. Features include improved intra-day agent risk reports and the implementation of ‘EasyPay’.

EVA Air plans Australia New Zealand expansion with 787sEVA Air president Derek Chen, on the sidelines of the IATA Annual General Meeting, said (02-Jun-2016) EVA Air plans to increase its footprint in Australia and New Zealand with the delivery of 787s from 2018. EVA Air is likely to open service to Sydney and Auckland. EVA Air already serves Brisbane. Fellow Taiwanese airline China Airlines serves Melbourne and Christchurch, but EVA Air does not plan to enter these markets.

South African Airways to take two growth A330s in 4Q2016South African Airways (SAA) CEO Musa Zwane, on the sidelines of the IATA Annual General Meeting, told (02-Jun-




2016) CAPA that SAA plans to take delivery of its first A330-300 in Oct-2016. SAA currently operates six A330-200s and has five A330-300s on order. Mr Zwane said two of these aircraft are slated to be delivered in 4Q2016 and the other three aircraft in 2017. He said the two A330-300s being delivered in 4Q2016 are growth aircraft but SAA is looking at returning one or two A340s in 2017, resulting in net fleet growth of one or two aircraft in 2017. Mr Zwane said SAA plans to use the additional A330s to grow regionally in Africa. SAA’s current widebody fleet consists of 14 A330-300s and nine A340-600s, according to the CAPA Fleet Database. The five A330-300s, which were converted from an earlier order for 10 additional A320s, are SAA’s only current new aircraft commitments.

TAP open to working with Hainan Airlines for China-Lisbon serviceTAP CEO Fernando Pinto, on the sidelines of the IATA Annual General Meeting, said (02-Jun-2016) TAP is interested to work with Hainan Airlines on a proposed China-Lisbon service to be operated by Hainan Airlines. TAP has no intent to serve China. Hainan Airlines shareholder HNA is taking equity of TAP and Azul.

Star Alliance receiving more interest in LCC platformStar Alliance CEO Mark Schwab said (02-Jun-2016) the alliance has received more interest in the alliance’s LCC platform since it was announced in Dec-2015.

SkyTeam outlines plans for better customer consistency, more growth and extra loungesSkyTeam CEO and MD Perry Cantarutti outlined (02-Jun-2016) some of the key highlights expected from across the alliance for 2016:

♦ SkyPriority Customer Audit: SkyTeam launched a customer feedback initiative, the SkyPriority Audit App, allowing premium customers to rate their travel experience, in an effort to ensure consistency in service delivery globally. The launch follows a nine-month pilot phase involving over 8000 frequent flyers. All eligible SkyTeam customers can provide feedback at more than 1000 airports. The app is available in English, Spanish and simplified Chinese, with a further 11 languages being rolled out through summer 2016;

♦ Network growth and collaboration: Intra-airline code-sharing and collaboration between SkyTeam members grew by more than 7% year-on-year to Mar-2016. Overall, the alliance footprint grew in terms of ASKs by more than 5% through Mar-2016. In northern summer 2016, SkyTeam will offer over 17,350 daily departures to more than 1062 cities across 177 countries;

♦ SkyTeam lounges: A new SkyTeam lounge at will be developed at Beijing Capital International Airport, with opening scheduled for 4Q2016. The lounge will be the sixth SkyTeam-branded facility and the alliance’s second in Greater China, complementing the Hong Kong lounge that opened in Oct-2015.

Star Alliance has given options for Juneyao Airlines to join the allianceStar Alliance CEO Mark Schwab said (02-Jun-2016) Shanghai-based Juneyao Airlines could join the alliance either as a full member or under the LCC partnership platform. The decision is with Juneyao’s management, Mr Schwab said.

Delta CEO: ‘I don’t get pre-occupied with yield’Delta Air Lines CEO Ed Bastian stated (02-Jun-2016) his financial performance focus is not exclusively on yield. The US stock analysts have been concerned about yield performance from most US airlines. Lower fuel prices have enabled lower pricing. Although yields have decreased, Mr Bastian cited upcoming record summer performance that would see Delta deliver on margins. “I don’t get pre-occupied with yield the way some do”.

“I don’t get pre-occupied with yield the way some do.”

Jetstar Group notes importance of understanding the customerJetstar Group CEO Jayne Hrdlicka noted (02-Jun-2016) the importance of understanding its customers, a key part to how the Jetstar-Qantas relationship works. She noted: “There is a part of the market which is hungry for full service and others which are dictated by price”. She also noted that the passenger experience is not just about the hard product but about the soft goods with Qantas and Jetstar investing heavily in “our people”.

Jetstar Group sees scope for more aircraft manufacturersJetstar Group CEO Jayne Hrdlicka remarked (02-Jun-2016) that she sees scope for more aircraft manufacturers in the market.

Jetstar and Delta claim yield premium over competitorsJetstar Group CEO Jayne Hrdlicka remarked (02-Jun-2016) how their airlines have moved away from having commodity products. Mr Bastian said Delta receives a 10% yield premium over its competitors while Ms Hrdlicka said Jetstar receives a 15% yield premium.

Jetstar working on eight new codesharesJetstar Group CEO Jayne Hrdlicka stated (02-Jun-2016) the group’s existing eight codeshare relationships will be complemented with others. Jetstar is working on adding five codeshare partners, all unspecified.

Jetstar waiting for ICAO solution before rolling out aircraft trackingJetstar Group CEO Jayne Hrdlicka stated (02-Jun-2016) the group’s Singapore-based Jetstar Asia unit is equipping aircraft



with tracking technology due to requirements from Singapore. Ms Hrdlicka denied Jetstar is not rolling it across the group due to costs concerns. Rather, she said, “we are waiting for an ICAO solution everyone will adopt” so Jetstar does not have to potentially change tracking equipment. She also noted that the carrier augments security where it is not up to the standards set by the carrier.

IATA calls for resolution of potential crisis over EU–US/Canada visa waiver programmeIATA called (02-Jun-2016) on EU and North American governments to resolve a “looming crisis” for the EU–US/Canada visa waiver programme. Presently, most EU citizens can visit the US and Canada without having to apply for a visa, with US and Canadian citizens being granted similar visa-free access to EU states. Canada and the US, however, require nationals from some EU states to obtain visas.

♦ Canada requires visas for nationals from Bulgaria and Romania.

♦ The US requires visas for nationals from Bulgaria, Romania, Croatia, Cyprus, and Poland.

In Jan-2014 a reciprocity clause was included in the Schengen legislation. Under that clause, visa-free access to EU countries (except UK and Republic of Ireland) can only be granted to citizens of a third country if that third country offers reciprocal visa-free access. The European Parliament and the European Council have until 12-Jul-2016 to advise the European Commission on whether the provisions of the 2014 reciprocity amendment should be enforced for Canadian and US citizens.

ICAO Council President: Political will exists to complete aviation’s carbon neutral growth strategyICAO Council president of the Dr Olumuyiwa Benard Aliu reported (02-Jun-2016) a key element of its carbon emission mitigation strategy should be adopted by member states at the 39th ICAO Assembly in Sep-2016. He said: “With respect to our shared objectives on aviation’s environmental performance, our common goal is to respond to the needs of civil society for safe and environmentally sustainable air travel, now and for the coming generations,” adding: “We continue to make progress on all elements in our basket of measures to reduce aviation emissions and their impact on climate change, and I still firmly believe that the political will exists to realise a global market-based measure (MBM) solution at our 39th Assembly to complement these measures.” In addition to agreeing to the proposed Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the ICAO Assembly is also expected to agree on the respective work required on behalf of ICAO, its states, and industry, in order for the scheme to be fully operational by 2020. This includes the establishment of registries, the determination of the monitoring review and verification requirements, and emissions unit criteria.

IATA: airlines should ultimately know almost immediately when an abnormal situation developsIATA senior vice president for safety and flight operations Gilberto Lopez Meyer stated (02-Jun-2016) airlines should ultimately know almost immediately when an abnormal situation develops, and the task facing investigators in the event of a crash should be made easier.

IATA says airlines oppose curbside screeningIATA stated (02-Jun-2016) airlines are opposed to screening passengers prior to entering the curbside screening, stating this would likely increase waiting times, be ineffective in preventing attacks and create large crowds that could themselves become the target of attacks. Carriers instead favour the streamlining of security through a risk-based approach and wider adoption of more modern systems including self-service technology, IATA CEO Tony Tyler said. Mr Tyler said states should make full use of “known-traveller” data provided by carriers. IATA also backs risk-assessment of passengers by providing governments with advance information on customers, Mr Tyler said. He said: “The current system of airport screening is effective but extremely expensive... Passengers routinely rate it as the worst aspect of their journey.”

The current system of airport screening is effective but extremely expensive.

IATA members urge governments to adopt a single global carbon offset mechanismIATA AGM overwhelmingly (02-Jun-2016) approved a resolution urging governments to adopt a single global carbon offset mechanism to address carbon emissions from international aviation at the 39th Assembly of the International Civil Aviation Organization (ICAO) later this year. In encouraging the adoption of a global carbon offset mechanism, the resolution endorses current aviation industry measures to manage its carbon footprint as part of global efforts to address climate change and safeguard sustainable development and calls on governments to:

♦ Consider 11 recommended design elements for the mechanism that would ensure environmental integrity and simplify implementation while avoiding market distortions;

♦ Ensure that existing economic measures (including taxes) on a national and regional basis to manage the industry’s climate change impact become redundant and that no new measures are introduced.

Under the leadership of ICAO, governments are considering a proposal for a Carbon Offset and Reduction Scheme for International Aviation (CORSIA) in preparation for the ICAO Assembly in Sep-2016. This resolution follows a resolution at




the 2013 IATA AGM, where the industry strategy to achieve carbon-neutral growth was agreed.

IATA: “The details of CORSIA are still being worked out. But as an industry we have a clear focus on what is needed. We want a cost-effective measure that leads to real and permanent carbon reductions. That mechanism should be simple, mandatory and applied on a global basis, avoiding the cost and complexity that a patchwork of uncoordinated measures would create. It must not lead to competitive or market distortions. And we can accept some flexibility in implementation, including the potential for a phasing-in of countries over time, if that is needed by governments to recognize the different levels of maturity of aviation markets,” Tony Tyler, DG and CEO. Source: IATA, 02-Jun-2016.

IATA: Aer Lingus CEO elected as president for AGMIATA elected (02-Jun-2016) Aer Lingus CEO Stephen Kavanagh as president of its 72nd AGM. Mr Kavanagh said: “It is a pleasure to welcome the world’s airline leaders to Dublin. Ireland has for many years played an important role in the development of the global airline industry through the innovation of its businesses and people. Today we are home to a strong airline sector, a growing North Atlantic gateway, a vibrant leasing industry and thriving activities in aerospace. We see the impact of this success in our economy where aviation and tourism support over 220,000 jobs and USD10.5 billion in GDP.

Emirates concedes that Etihad and Qatar Airways are raising the bar in the aviation productEmirates president Sir Tim Clark stated (02-Jun-2016) the carrier “spends an awful lot of time and money on the premium product”. He said this will continue as the carrier continues to raise the bar in service and product quality. He acknowledged that Etihad and Qatar Airways are “leapfrogging” and “raising the bar”, with the carrier to announce new efforts to compete with its Gulf rivals. He also stressed that economy passengers are also “extremely important for us.”

Etihad and Qatar Airways are “leapfrogging” and “raising the bar”, with the carrier to announce new efforts to compete with its Gulf rivals.

Emirates: LCCs are here to stay and will continue to growEmirates president Sir Tim Clark stated (02-Jun-2016) LCCs are here to stay and will continue to grow. He said LCCs have been a significant player in development of the aviation market in the past 20 years and that an increase in the

number of business models is “something we have to adapt to, accept and encourage”. He said Emirates has a good relationship with LCCs as they bring more customers to the market.

IATA: Closer collaboration with governments to tackle threat of terrorismIATA AGM unanimously (02-Jun-2016) adopted a resolution that denounces terrorism and calls for intensified cooperation among governments as well as with the air transport industry to keep flying secure. The resolution calls for airlines to work together with airports and other key stakeholders to counter the risk of terrorist threats and urges governments to:

♦ Work in partnership among themselves and with airlines to counter the risk of terrorist threats to aviation, recognising ICAO’s critical role in this effort;

♦ Commit all possible government resources, particularly intelligence resources, to fighting the use of aviation for terrorist acts;

♦ Share relevant information to ensure that measures to prevent and respond to terrorist acts are appropriate and effective.

The resolution reinforces the commitment of cooperation by the Global Travel Association Coalition (of which IATA is a member) following the Brussels attacks. The recent attack on Brussels Airport highlighted the importance of security in airport public areas landside. Keeping this area secure is fully the responsibility of governments and the most effective defense is government intelligence used to stop terrorists long before they reach airport property. IATA stated risk in airport public areas can be mitigated through use of efficient processes.

Emirates sees good choice between Airbus and Boeing for long-haul aircraftEmirates president Sir Tim Clark stated (02-Jun-2016) the carrier believes it has a “good choice” between Airbus and Boeing for long-haul aircraft with both developing products to give “ample choice” in terms of product and emissions. He noted it would be difficult to get through barriers of entry in this game for other manufactures.

IATA: Airline industry pledges to fight against wildlife traffickingIATA AGM unanimously endorsed (02-Jun-2016) a resolution denouncing the illegal trade in wildlife and wildlife products and pledging to partner with government authorities and conservation organizations in the fight against the traffickers of endangered animals. The resolution urges governments to commit additional resources to address illegal trafficking and calls on airlines to:

♦ Increase passenger, client, customer and employee awareness about the nature, scale and consequences of the illegal wildlife trade;



♦ Partner with airports, freight forwarders and other stakeholders to work proactively with enforcement agencies and conservation organisations to address the problem;

♦ Consider the adoption of appropriate policies and procedures to discourage trafficking through awareness programmes, information sharing and incident reporting.

Emirates Airline says recent series of security and safety events of late is a concernEmirates Airline president Sir Tim Clark stated (02-Jun-2016) the series of security and safety events of late is a concern and a “wake up call”. He said the industry is “not doing enough and “we have to be doing better than we are doing”. He noted the need for new protocols and commonality on a global level and a need to far more readily adopt the technological advantages now available, such as biometrics.

Emirates says standards of aircraft tracking ‘are a disgrace’Emirates president Sir Tim Clark stated (02-Jun-2016) standards of aircraft tracking “are a disgrace,” calling for more robust black boxes and improved location transmitters.

Emirates to add 14 more A380s by end of 2016Emirates Airline president Sir Tim Clark stated (02-Jun-2016) the carrier has 79 A380s in the fleet and will add 14 more by the end of 2016. He described the A380 as a “great aeroplane”.

Emirates on Gulf airlines in US: why deny travelling public?Emirates president Sir Tim Clark stated (02-Jun-2016) he “found distasteful” the “airing of dirty laundry” by US airlines in their rhetoric against Gulf airlines. “We’ve brought choice, product standards,” Sir Tim said. He asked “Why the travelling public should be denied” Gulf airline options. He said he remains “optimistic that sense will prevail” in the prolonged dispute with the United States’ major airlines who accuse it of receiving billions of dollars in state subsidies. He said the issue has been ongoing since autumn 2014. Sir Tim commented: “I remain optimistic that sense will prevail and that the governments, if there are going to be intergovernmental talks or discussions, that there will be a satisfactory solution to this... We [Gulf carriers] have brought choice… and I can’t see why the travelling public should be deprived of choice”. He added: “We got nowhere with this. An awful lot of time and money has been spent on this”.

“I can’t see why the travelling public should be deprived of choice.”

Emirates concerned about ‘long-time paradigm change’ of corporate sectorEmirates president Sir Tim Clark stated (02-Jun-2016) the airline is watching for signs that the drop in premium and corporate bookings is not for the short-term but actually represents a “long-time paradigm change” and those corporate bookings may not come back fully, as has occurred before. Mr Clark said Emirates could adjust to a change.

Emirates yields impacted by mix, currency and distanceEmirates president Sir Tim Clark stated (02-Jun-2016) the airline’s yields are impacted by three factors. First is change in mix as the airline saw a drop-off in oil/gas/resource sector traffic following the decrease in oil price. Second is impact from currency due to the strengthening dollar, which Emirates’ local currency – the dirham – is pegged to. Finally, as Emirates focuses on long-haul and ultra-long-haul growth, those services typically come with lower yield as fixed costs are spread over a longer distance, enabling lower yields.

Brussels Airlines CEO: yield will unlikely return to levels seen prior to recent fuel declinesBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) yield will unlikely return to levels seen prior to recent fuel declines. He noted the intense LCC competition the carrier faces in its home market, adding that it has been forced to reduce cost to be price competitive. He also noted that the airline needs the power of the Lufthansa Group to further reduce its cost base and obtain commercial critical mass outside of Belgium. He also said he is hopeful Lufthansa will decide on the call option to fully acquire Brussels Airlines’ parent company SN Airholding. He said the carrier will become more powerful with the power of a major aviation group behind it.

Brussels Airlines CEO hopeful Lufthansa proceeds with takeoverBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) he is hopeful Lufthansa will acquire the part of the Belgian carrier which it does not yet own.” I hope for it,” Mr Gustin said. Lufthansa owns 45% of Brussels Airlines owner SN Airholding and has a call option for the remaining 55%. Mr Gustin said he did not want to see the identity of Brussels Airlines to disappear, especially as it is a strong brand in Africa, where the German carrier does not offer so many routes. He said the carrier will become more powerful with the power of a major aviation group behind it.

Brussels Airlines sees no true business class in Europe anymoreBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) there is no true business class in Europe anymore, and that the product exists only for connecting passengers.




Ebola has resulted in a strengthened brand image for Brussels Airlines in Africa: CEOBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) Ebola has resulted in a strengthened brand image for the carrier in Africa, stating the brand is now “very strong” in the continent.

Brussels Airlines CEO: yield will unlikely return to levels seen prior to recent fuel declinesBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) yield will unlikely return to levels seen prior to recent fuel declines. He noted the intense LCC competition the carrier faces in its home market, adding that it has been forced to reduce cost to be price competitive. He also noted that the airline needs the power of the Lufthansa Group to further reduce its cost base and obtain commercial critical mass outside of Belgium.

Brussels Airlines notes need for ‘homogeneity’ among intelligence servicesBrussels Airlines CEO Bernard Gustin stated (02-Jun-2016) the carrier faced the most disruption after the Brussels Airport security attacks on 22-Mar-2016, adding that there must be more “homogeneity” among intelligence services battling the terrorist threat, especially since the attackers in Belgium were already known to security services. He noted the continued need for vigilance in airport security and a need to have an improved intelligence system. He said the airport’s closure for a period of 12 days highlighted the difficulties created without aviation. He however said the airline benefited from its position in the Lufthansa Group, which enabled the carrier to redeploy long-haul aircraft in Germany and Switzerland while also operating from regional bases in Belgium. He also said there is a need to continue to analyse the security process and apply global standards to its implementation.

Garuda Indonesia works to improve London Heathrow performanceGaruda Indonesia CEO Arif Wibowo, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA that Garuda’s load factor on London Heathrow was slightly under 50% in the initial two months. Garuda launched five times weekly service to Heathrow in late Mar-2016 on a Jakarta-Singapore-London Heathrow-Jakarta routing. Garuda previously served London Gatwick as a tag to its Amsterdam service. Mr Wibowo said the London market is “still quite tough” but with every new long-haul route there is always an investment stage. “We just need to speed up the investment stage,” Mr Wibowo said. This is being achieved by strengthening sales efforts on both the Jakarta and UK ends. In London Garuda is working on building up its brand. Mr Wibowo said so far UK point of sales has accounted for less than 50% of passengers and he believes this can be increased to 60%.

Garuda Indonesia to take first 737 MAX in 2017Garuda Indonesia CEO Arif Wibowo, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA that Garuda plans to take delivery of its first Boeing 737 MAX aircraft in 2017. He said Garuda is not adding any 737s in 2016 and has only one 737 delivery for 2017. The Garuda Group also has ordered A320neos for its budget airline subsidiary Citilink. Mr Wibowo said Citilink plans to take delivery of its first five A320neos in 2017.

Garuda still expects Jakarta runway to eventually accommodate more Europe non-stopsGaruda Indonesia CEO Arif Wibowo, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the Indonesian Government remains committed to upgrading the Jakarta Airport runway to support nonstop services to Europe. Garuda currently is not allowed by authorities to operate more than three weekly nonstop departures from Jakarta to Europe due to runway pavement issues, forcing it to route half of its outbound Amsterdam flights and all its London outbound flights via Singapore. All return flights from Europe to Jakarta currently operate nonstop. Mr Wibowo said a long delayed runway improvement project is now expected to commence in Jul-2016 and take approximately one year to be completed. “I have to be patient for the construction of the overlay,” he said. Garuda plans to transition all its Amsterdam and London flights to nonstop in both directions as soon the runway improvements are completed, potentially in 2H2017.

The Indonesian Government remains committed to upgrading the Jakarta Airport runway to support nonstop services to Europe.

Garuda to initially move three domestic routes to new Jakarta Terminal 3Garuda Indonesia CEO Arif Wibowo, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA that Garuda plans to begin the move to Jakarta Terminal 3 in mid-Jun-2016. He said the initial plan to move all Garuda flights at once is too risky and Garuda now instead plans to initially move flights on three domestic trunk routes. Mr Wibowo expects the rest of Garuda’s operation to move to Terminal 3 around mid-Jul-2016. Other SkyTeam members are also expected to move to Terminal 3 by the end of 2016. Mr Wibowo said Terminal 3 initially has the capacity to handle 20 million annual passengers but will have capacity for 25 million once the construction of additional piers is completed. Garuda handled 19 million passengers in Jakarta in 2015 and expects to handle 20 million at its main hub in 2016.



Synergy plans to launch new regional airline in Argentina in Dec-2016Synergy Group chairman German Efromovich, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA that Synergy plans to launch a new airline in Argentina on 01-Dec-2016. Mr Efromovich said the new airline will operate a fleet of 18 turboprops but Synergy has not yet decided on an aircraft type. Synergy is the main shareholder of Latin American airline group Avianca, which operates 15 ATR 72-600s in Colombia and Central America and has options for additional aircraft. But Mr Efromovich said the new airline in Argentina is being established by Synergy outside the Avianca family and therefore will not necessarily also operate ATR 72-600s. However, he said the new Argentinean airline will feed Avianca and other Star Alliance members in Buenos Aires and Cordoba. Mr Efromovich said the new airline will operate a combination of regional point to point routes and domestic trunk routes.

Aeromexico plans to take first 787-9 in Oct-2016Aeromexico chief revenue officer Anko van der Werff, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016)CAPA that Aeromexico’s first 787-9 is slated to be delivered in Oct-2016 and enter service in Nov-2016. He said Aeromexico has commitments for 10 787-9s, three of which are expected to be delivered in 4Q2016. Aeromexico plans to use the 10 787-9s for a combination of growth and 777 replacements. Aeromexico currently operates four 777-200ERs which Mr van der Werff said will be phased out between early 2017 and early 2018. The other six aircraft will be used for growth but the growth will be staggered over the next three years as the last 787-9 will be delivered in 2019. Aeromexico also operates nine 787-8s, the last of which was delivered in 2015, according to the CAPA Fleet Database.

SilkAir plans to take first 737 MAX in Sep-2017SilkAir chief executive Foo Chai Woo, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the airline plans to take delivery of its first 737 MAX 8 aircraft in Sep-2017. He said SilkAir has only one 737-800NG remaining on order which is slated to be delivered in Oct-2016. The Singapore Airlines full service regional subsidiary currently operates 16 737-800s, 11 A320s and four A319s, according to the CAPA Fleet Database. SilkAir is not planning to phase out any A319s or A320s in its current fiscal year ending 31-Mar-2017 but will eventually transition to an all 737 fleet.

Bangkok Airways to keep six ATR 72-500sBangkok Airways president Capt Puttipong Prasarttong-Osoth, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the airline intends to keep its six owned ATR 72-500s following the delivery of new ATR 72-600s. Bangkok Airways was initially planning to replace its original fleet of eight ATR 72-500s with nine ATR 72-600s. Capt Puttipong said the airline now plans to expand its turboprop fleet to 15 aircraft, including six ATR 72-500s and nine ATR 72-600s, once the last ATR 72-600 is delivered in 2017. Bangkok Airways has so far taken delivery of six of the ATR 72-600s

from its nine aircraft commitment and returned one of eight ATR 72-500s. Capt Puttipong said a second ATR 72-500 will be returned by the end of 2016. The airline’s other six ATR 72-500s are owned and will be retained but will not all be used for scheduled services. He said Bangkok Airways is now using some of its ATR 72-500s for charters and for aeromedical evacuations. It is also looking at potentially using one of the aircraft for cargo.

Bangkok Airways seeks to lease additional A319s and A320sBangkok Airways president Capt Puttipong Prasarttong-Osoth, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the airline is planning to add two or three A320 family aircraft in 2H2016. Capt Puttipong said Bangkok Airways is talking to leasing companies with available second hand aircraft and will likely take two A319s and one A320. Bangkok Airways currently operates 12 A320s and eight A319s, according to the CAPA Fleet Database. Bangkok Airways is currently not looking at acquiring A320neo aircraft as it believes its short average stage length do not justify the investment in new generation re-engined narrowbodies.

Bangkok Airways currently operates 12 A320s and eight A319s, according to the CAPA Fleet Database.

Bangkok Airways continues to work on approvals for Bagan and second Vientiane flightBangkok Airways executives, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the airline is still seeking approval from Myanmar authorities to launch Bagan and from Laos authorities to add a second flight to Vientiane. CAPA previously reported that Bangkok Airways aims to launch service to Bagan via Nay Pyi Taw and add a second daily flight on the Bangkok-Vientiane route during the next northern summer season. Bangkok Airways executives are still hopeful to secure the approvals in time for the planned second daily Bangkok-Vientiane flight, which the airline believes it needs to be competitive. However Bangkok Airways expects approval to serve Bagan, which would be Bangkok Airways’ fourth destination in Myanmar, could take about six months.

Luxair looks to acquire CSeries or E190-E2Luxair EVP Martin Isler, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the Luxembourg-based airline is evaluating the Bombardier CSeries or Embraer E190-E2. He said Luxair needs four to five new generation aircraft capable of operating at London City Airport for delivery in 2018 to 2020. Mr Isler said Luxair currently operates seven daily services to London City using Q400s and is keen to upgauge at least some to larger aircraft. The




four to five CSeries or E190-E2s will be used for a combination of growth and replacement. Luxair currently has just one outstanding order for a Dash 8 Q400 which will be delivered in Aug-2016 and used to replace its last Embraer ERJ-145. Luxair currently operates nine Q400s, two 737-700s and four 737-800s, according to the CAPA Fleet Database. Mr Isler said Luxair plans to phase out its two 737-700s, which are owned, over the next few years.

Luxair carries 1.7m passengers in 2015Luxair EVP Martin Isler, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the Luxembourg-based airline carried 1.7 million passengers in 2015. This includes approximately 500,000 passengers at Luxair Tours and 1.2 million at its scheduled operation. Luxair has more than a 60% share of its home market as Luxembourg Airport handled 2.7 million passengers in 2015. Luxair’s scheduled operation has been experiencing rapid growth over the last few years while traffic at its tour operation has been stagnant or declining slightly. Mr Isler said Luxair Tours has been impacted by the instability in North Africa and Turkey, particularly from passengers originating in France as French passengers account for 50% of Luxair Tours traffic. Approximately half of Luxair’s scheduled passengers also originate or are heading to Luxembourg’s three neighbouring countries – France, Germany or Belgium. It is primarily a point to point carrier with only 2% of overall traffic transiting Luxembourg.

Luxair to take final Q400 in Aug-2016Luxair EVP Martin Isler, on the sidelines of the IATA Annual General Meeting, told (01-Jun-2016) CAPA the Luxembourg-based airline plans to take delivery of its last Bombardier Dash 8 Q400 turboprop in Aug-2016. Luxair currently operates nine Q400s, two of which were delivered earlier in 2016. Mr Isler said the three Q400 deliveries for 2016 are being used to replace its last batch of Embraer ERJ-145 regional jets. Luxair has pursuing growth over the last few years by upgauging routes from the ERJ-145 to Q400.

Increasing SkyTeam links with Jet Airways and Gol makes them attractive future membersSkyTeam CEO Perry Cantarutti said (02-Jun-2016) the increasing links between Jet Airways and Gol make them attractive members to SkyTeam to help the alliance fill white spots in India and Brazil respectively. Mr Cantarutti said Jet works with seven SkyTeam member airlines (including an extensive partnership with Delta and KLM) while Gol works with eight SkyTeam member airlines.

SkyTeam receives responses to RFP for lounge managementSkyTeam CEO Perry Cantarutti said (02-Jun-2016) the alliance is evaluating responses to a RFP for companies to build and design lounges. SkyTeam as a management company does not want to be involved in this process, Mr Cantarutti said. Six lounges will be open by the end of 2016 and SkyTeam wants to open three lounges a year from 2017.

SkyTeam has loosened rules on external cooperation; codeshares capped at 6%SkyTeam CEO Perry Cantarutti said (02-Jun-2016) SkyTeam spent 2.5 years deciding on a framework for member airlines to engage in cooperation with non-member airlines. Mr Cantarutti said alliance flexibility was designed for specific markets and not to allow JVs or significant long-haul cooperation. SkyTeam members are capped at having no more than 6% of ASKs carry a codeshare of a non-SkyTeam member airline.

Virgin Atlantic’s evolution under Delta changes alliance proposition: SkyTeamSkyTeam CEO Perry Cantarutti responded (02-Jun-2016) to a question about Virgin Atlantic’s suitability to join SkyTeam, remarked that global alliances typically benefit network airlines to help with feed. Under Delta, Virgin has changed from a network to point-to-point airline. Although Virgin Atlantic is a “good member of the family”, Mr Cantarutti said, it has to be seen “if alliance membership plays a role” in Virgin’s new strategy.

Virgin Atlantic is a “good member of the family”, it has to be seen “if alliance membership plays a role” in Virgin’s new strategy.

SkyTeam has app for passengers to provide feedback on Sky Priority serviceSkyTeam CEO Perry Cantarutti said (02-Jun-2016) SkyTeam has an app available to 10,000 passengers selected from member airlines’ frequent flyer databases who either fly with elite status or in business/first class. These passengers are invited to give feedback via the app about their experience with Sky Priority.

SkyTeam seeks to open three SkyTeam lounges a yearSkyTeam CEO Perry Cantarutti said (02-Jun-2016) SkyTeam will end 2016 with six SkyTeam-branded and operated lounges: Beijing, Dubai, Hong Kong, Istanbul, London Heathrow and Sydney. Mr Cantarutti said SKyTeam wants to open three lounges a year from 2017. Exact locations were not specified for future lounges but includes points in North America and Asia, and some in Europe.

SkyTeam member codeshare ASKs grew faster than organic growthSkyTeam CEO Perry Cantarutti said (02-Jun-2016) that in 2015 SkyTeam members grew ASKs 5.2% while the growth of ASKs with SkyTeam member codeshares grew at a faster 7.8%. Growth of ASKs with codeshares of a non-SkyTeam airline grew approximately under 2%. Codeshare RPKs were not disclosed.



Jetstar yield diverging in domestic and international marketsJetstar Group CEO Jayne Hrdlicka stated (02-Jun-2016) domestic yields have improved but are now being impacted by specific conditions in the Australia market. Internationally has seen greater yield weakness as a result of significant growth into the Australian market from numerous airlines.

IATA: Travel costs down 6% in 12 monthsIATA chief economist Brian Pearce stated (02-Jun-2016) underlying fares have come down a lot and overall cost of travel down 6% in the past 12 months.

IATA: Underlying labour costs leading to productivity agreementsIATA chief economist Brian Pearce stated (02-Jun-2016) underlying labour costs are the biggest cost now for many airlines with the reduction in fuel prices. This makes it critical that airlines and the workforce work carefully together. He however noted that these costs are “more or less staying under control”. He also noted that the workforce in some cases are sharing the financial success of airlines with productivity deals a key factor, and airlines are trying very carefully to make sure the right sort of productivity agreements are in place.

Underlying labour costs are the biggest cost now for many airlines.

IATA: Airline entry and exit a sign of health not failureIATA chief economist Brian Pearce stated (02-Jun-2016) the entry and exit of airlines in a market, such as India, is a sign of health rather than failure. He also noted that there has been an improvement in India performance in 2016.

IATA: a ‘lot of winners’ in trans-Atlantic marketIATA chief economist Brian Pearce stated (02-Jun-2016) there are a “lot of winners” on the trans-Atlantic market, which is now seeing a more rational structure. He also noted that trans-Atlantic JVs enable airlines to put schedules together and combine networks for higher load factors and deployment of larger aircraft for reduced cost base.

IATA: Cargo remains a challenge for the industryIATA chief economist Brian Pearce stated (02-Jun-2016) the cargo business has been “very tough” and remains a challenge for the industry. He said changes in the cargo sector are “structural” and the industry is going through a period of restructuring amid slower growth. The situation is further challenged by increased cargo capacity in passenger aircraft. In this sense, the success of the passenger business has had a negative impact on cargo, bringing new cargo capacity on

passengers aircraft so there is more competition in a weaker market. Mr Pearce however said there is no reason why there cannot be a profitable yet resized cargo business but it will “take time to achieve”.

IATA: GFC made airlines focus on making assets productiveIATA chief economist Brian Pearce stated (02-Jun-2016) the GFC gave the industry a “shock” and made airlines focus on making assets productive. “Airlines realised they need to pay investment for capital risk,” he said.

IATA: Load factors now averaging 80% across industryIATA chief economist Brian Pearce stated (02-Jun-2016) he is not concerned with the capacity situation at present and said there are no signs of returning to old days of very cyclical profitability. He said load factors are still very high despite coming off their peak, and are now averaging 80% across the industry in 2016. Breakeven load factors are also falling in 2016 due to the impact of fuel prices and hedging.

IATA: Forecasting 9.8% ROIC in 2016, a new recordIATA chief economist Brian Pearce stated (02-Jun-2016) IATA is forecasting a 9.8% ROIC in 2016, a new record. This however means that it has only been in 2015 and 2016 that airlines met the Cost of Capital (WACC). He also stressed that to attract significant capital requirements, investors need to be paid at least a normal return.

IATA: Asia Pacific airline returns decline due relative importance of struggling air cargoIATA chief economist Brian Pearce stated (02-Jun-2016) Asia Pacific airlines have seen returns decline in recent years due to the relative importance of the struggling air cargo business in this region, but the fall in fuel costs boosted returns in 2015. However, the situation is deteriorating for airlines in Latin America due to the deep recession in Brazil and currency weakness that for many airlines has meant they have seen very little fall in fuel costs in local currency terms.

IATA: Extent of debt remains a challenge for the aviation industryIATA chief economist Brian Pearce stated (02-Jun-2016) airlines in North America and Europe generated “unprecedented” double figure returns on capital in 2015. This is a “very marked” improvement, although is the norm for other industries and should be the norm in the airline industry. He also noted that the improved trend is now spreading beyond the US, where airlines are now approaching investment level grades. While noting the ROIC improvements, Mr Pearce also cautioned that “balance sheets take longer to repair” and the extent of debt remains a challenge for the aviation industry. This situation makes airlines vulnerable in times of downturn, he noted.




IATA: Airlines generate more revenue from capital, partly by extending aircraft livesIATA chief economist Brian Pearce stated (02-Jun-2016) slightly more than USD1.30 is generate for every USD1 in capital invested. He noted that operating margins are high because of low fuel costs but the substantial rise of capital productivity has occurred as airlines generate more revenue from their capital, partly by extending aircraft lives and but adding ancillary services.

Slightly more than USD1.30 is generate for every USD1 in capital invested.

IATA: Gap between breakeven and achieved load factor the driving force behind profitabilityIATA chief economist Brian Pearce stated (02-Jun-2016) there is a widening asset utilisation gap driving returns for airlines. This has been a trend post-GFC, with this gap between breakeven and achieved load factor the driving force behind profitability and improved ROIC, which has been widening in the last few years. Mr Pearce noted that this represents a buffer to worsening economic conditions and higher fuel costs. He also noted that in the past two years, lower fuel costs have brought breakeven load factors down sharply, adding to the improvement in returns that had begun several years earlier.

IATA sees ‘isolated’ impact from terrorist attacks on aviation and tourismIATA chief economist Brian Pearce stated (02-Jun-2016) the contrast between the airlines’ two main markets is shown starkly by revenues. Over the past decade, revenues in the passenger business have doubled while in 2016, IATA expects cargo revenues to fall back to where they were 10 years ago.

IATA: Unit costs falling further than falling unit revenuesIATA chief economist Brian Pearce stated (02-Jun-2016) unit costs are falling further than falling unit revenues, so airline cash flows and profitability are rising in this environment. He said falling unit revenues have not been a sign of weakness but a reflection of marketing conditions and falling fuel prices. Unit CASK is expected to fall further than decline in fares in 2016, Mr Pearce forecast. He also said airline investors are sharing the benefits of lower fuel prices with consumers. On a constant exchange rate basis, average global air fares are down around 6% year-on-year.

IATA: Passenger business ‘booming’ and growing ‘well above trend’IATA chief economist Brian Pearce stated (02-Jun-2016) the passenger business is “booming” and growing “well above trend”. He said the pace of air travel growth is starting to slow a little from the peaks of 2015 but is still “well above trend”.

IATA: Cargo struggling given both developed and developing economies now weakerIATA chief economist Brian Pearce stated (02-Jun-2016) it is “no surprise” that cargo is struggling given that both developed and developing economies are now weaker. He said the Asia Pacific has had a “much tougher time” than other regions, with Latin America also negatively impacted. Overall, it has been a “difficult” time for business, he said.

IATA: ‘Significant profits’ in 2016 ‘impressive’ given weak economic cycleIATA chief economist Brian Pearce stated (02-Jun-2016) the airline industry is expecting to report “significant profits” in 2016, with this achieved despite a “pretty subdued” economic background. He noted that this is an “impressive performance” given the weak economic cycle while noting there has been some decoupling of air travel growth and industry financial performance in recent years. He however noted that air transport remains closely linked to the economy cycle and so recent signs of a slowdown in various economic cycle indicators is worrying.

School of International Futures notes importance of strategic foresight and scenario planningSchool of International Futures co-founder Catarina Tully stated (02-Jun-2016) disruption will continue to occur in the future and most people and companies believe that they are underprepared for such a scenario. Ms Tully also noted the complexities of the environment in which we operate and the importance of strategic foresight and scenario planning is a way to engage in long-term risk. Building resilience to risk is key, she noted, adding that by predicting and understating the future better, companies and individuals can better shape the future and develop a transformative vision. She noted the need to identify the drivers of future change, where they be social, technological, economic, environmental and political forces that shape the future.

IATA urges governments to ensure airlines can recover locked revenueIATA urged (02-Jun-2016) governments to honour agreements to ensure airlines are able to recover revenue locked in other countries. The top two nations blocking recovery of airline’s revenue are Venezuela and Nigeria, followed by Sudan, Egypt and Angola. Venezuela holds USD3.8 billion, while Nigeria holds nearly USD600 million. Funds locked in Venezuela were caused by revenue recovery requiring government approval, while airline funds locked in Nigeria are due to demand for foreign currency in Nigeria outweighing demand, leading to the bank’s being unable to return foreign currency. IATA CEO and director general Tony Tyler stated: Blocked funds are a problem in a diverse group of countries, some of them undergoing significant economic challenges particularly with a fall-off in oil revenues. But one thing all five nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds. Strong connectivity is an economic enabler and generates



considerable economic and social benefits--something that struggling economies need more than ever. It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full.”

airBaltic plans to take first CS300 in Sep-2016airBaltic COO Martin Sedlacky, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA the Latvia-based airline’s first Bombardier CSeries CS300 aircraft is slated to be delivered in late Sep-2016 and enter service in Oct-2016. Mr Sedlacky said airBaltic expects to take delivery of another six CS300s by Jan-2016. Of the initial batch of seven CS300s, three will replace 737s and four will be for growth. airBaltic currently operates 12 737-300/500s and 12 Bombardier Dash 8 Q400 turboprops and has 20 CS300s on order, according to the CAPA Fleet Database. Mr Sedlacky said airBaltic plans to grow its total fleet from 24 aircraft currently to 34 aircraft over the next three years as the CS300s are delivered.

Thai Airways to take first A350-900 in Aug-2016Thai Airways CEO Charamporn Jotikasthira, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that Thai plans to take delivery of its first A350-900 in Jul-2016. Mr Jotikasthira said a second A350-900 is slated to be delivered in Aug-2016 and both aircraft will be deployed on the Bangkok-Melbourne route. Thai currently operates two daily frequencies between Bangkok and Melbourne with 777-200s. Mr Jotikasthira said Thai’s initial two A350-900s will be utilised an average of 18 hours per day and support the airline’s overall initiative to boost aircraft utilisation rates. Thai has selected a 321-seat two-class configuration for its A350-900s including 32 lie flat business class seats.

Thai Airways to phase out two 777-200s in 2016 and two A330-300s in 2017Thai Airways executives, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that Thai plans to phase out two 777-200s in 2016 and two A330-300s in 2017. The two 777-200s are being returned to leasing companies following the delivery of Thai’s first two A350-900s. Thai plans to take two A350-900s, its only aircraft deliveries in 2016, in Jul-2016 and Aug-2016. Thai plans to take five more A350-900s in 2017 and the final five from its 12-aircraft commitment in 2018. Thai also plans to take two 787-9s in 2017, resulting in seven aircraft deliveries, but its net fleet will grow by five aircraft as two Pratt & Whitney-powered A330-300s will be phased out. According to the CAPA Fleet Database, Thai currently operates 73 widebody aircraft – a mix of 777-200s, 777-200ERs, 777-300s, 777-300ERs, 787-8s and 747-400s – and has 14 aircraft on order including the 12 A350-900s and two 787-9s.

Turkish Airlines transit traffic reaches 60%Turkish Airlines CEO Temel Kotil, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that transit passengers now account for 60% of total traffic at

Turkish Airlines. Turkish has increased its transit ratio from 50% to 60% in recent years. While the local Turkish market is growing, Turkish will need to continue to rely heavily on transit traffic to support its expansion aspirations. The new airport in Istanbul, which is now under construction, supports Turkish’s initiative to continue growing transfer traffic and further bolster Istanbul’s position as a leading hub.

Turkish Airlines Iran expansion contingent on new Turkey-Iran air services agreementTurkish Airlines CEO Temel Kotil, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that the airline plans to expand in Iran as soon as Turkey and Iran forge an expanded air services agreement. The Iranian and Turkish governments have been discussing a new agreement and Mr Kotil is confident a new deal will be reached soon. Turkish is one of the largest airlines in the Iranian market with 68 weekly flights to seven Iranian destinations, according to CAPA and OAG data. Mr Kotil said the Iranian market “is booming” and Turkish is keen to leverage its longstanding strong position in Iran. While several foreign airlines have been pursuing growth in Iran, OAG data shows that Turkish has only been able to grow its Iranian operation over the last year by four weekly frequencies due to the bilateral constraints.

The Iranian market “is booming” and Turkish is keen to leverage its longstanding strong position in Iran.

Royal Brunei to configure A320neos with 150 seatsRoyal Brunei Airlines CEO Karam Chand, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA the carrier plans to configure its future A320neos with 150 seats in a two class configuration. Royal Brunei currently operates six A320ceos in two class 144-seat configuration with 12 business and 132 economy seats. It has seven A320neos on order which will be delivered from late 2017 with 12 business and 138 economy seats. The slightly higher density configuration with one extra economy row will result in a 4% capacity increase on flights which transitioned from the A320ceo to A320neo. However, Royal Brunei is planning a much more significant increase in capacity as four of the seven of its A320neos on order are growth aircraft.

Turkish Airlines plans to serve Bali from Istanbul and from AustraliaTurkish Airlines CEO Temel Kotil, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that Turkish Airlines plans to launch service to Bali in 2017. He said Turkish is also looking at later serving Australia via Bali, potentially in 2018. Istanbul-Bali-Sydney and Istanbul-Bali-Melbourne are both under consideration with fifth freedom rights for the




IRAN AVIATIONFinance Summit 2016

IRAN AIR SHOW& Expo 2016

Following the success of the historic CAPA Iran Aviation Summit in January 2016, CAPA has been invited back by Iran’s aviation authorities to hold a follow-up event to move beyond introductions to enabling business. This unique 3 day event - combining an aviation finance summit, trade expo and air show - will bring together all of the key decision-makers to identify solutions to facilitate transactions in Iran’s aircraft and aviation infrastructure sectors. With the strong cooperation of the Iran Civil Aviation Organization and the Iran Airports Company, the January event brought together more than 150 of the most influential people in Iranian aviation and travel, who will reconvene in September to meet with foreign delegates attending the summit and expo.

Attendees at the CAPA Iran Aviation Summit in January 2016 included:

• Iran Minister of Roads and Urban Development, Dr. Abbas Akhoundi

• Iran Deputy Minister Roads & Urban Development, Asghar Fakhrieh Kashan

• Iran Civil Aviation Organization, President, Ali Abedzadeh• Iran Airports Holding Company, CEO & Chairman, Rahmatollah

Mahabadi• Iran Air, Chairman & Managing Director, Farhad Parvaresh• Iran Aseman Airlines, CEO & Chairman, Dr. Hossein Alaei• Iran Airtour, Former CEO, Ahmad Khalili• Iranian Naft Airlines, CEO, Capt. Ghasemi Gholamreza• Kish Airlines, CEO, Capt. Sadat Akhavi• Qeshm Air, CEO, Mahmoud Shekarabi• Caspian Airlines, CEO, Samad Soleimani• ATA Airlines, CEO, Daghigh Kia• Taban Air, CEO, Capt. Asghar Abdollahpoor• Zagros Airlines, CEO, Capt. Sedigh

• Meraj Airlines, CEO, Capt. Touraj Zangeneh• Turkish Airlines, Temel Kotil, CEO• Tehran Imam Khomeini International Airport, GM, Hamid Reza

Seyedi• Tehran Mehrabad International Airport, GM, Ali Rostami• Mashhad International Airport, GM, Mohammad Bagher

Ghasemzadeh• Isfahan International Airport, GM, Ali Ghasemzadeh• Bandar-e Abas International Airport, GM, Ali Reza Matin• Tabriz International Airport, GM, Mostafa Safae• Zahedan International Airport, GM, Hassan Arabi• Shiraz International Airport, GM, Reza Badiefard• Qeshm International Airport, GM, Mojtaba Shamsnejad• Kish International Airport, GM, Kourosh Fattahi• Yazd International Airport, GM, Sa’dollah Vatankhah• Saman Air Services (Ground handler), CEO, Hossein Ali

Hoseinzade

For more information, please visit: www.capaevents.com/iranSEP16

Hosts

Sponsors of the January 2016 event:

Platinum Sponsors Official Carrier

Gold Sponsors ExhibitorCornerstone Partner

Tehran, 18-19 SeptemberTehran, 17 September

The largest aviation event in the world’s newest market

Registration will open shortly but in the meantime to register your interest in attending, exhibiting or sponsoring please email Jessica on: [email protected]



Indonesia-Australia leg. Turkish could potentially serve both Sydney and Melbourne either with two separate daily flights both via Bali. Turkish’s only Indonesian destination is currently Jakarta. Over the last few years it has looked at several options for entering the Australia market including services via Singapore, where it also has fifth freedom rights.

Copa considers further Argentina expansion with MendozaCopa Airlines CEO Pedro Heilbron, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA that the Panamanian airline could launch service to Mendoza in Argentina. Copa currently serves Buenos Aires and Cordoba in Argentina and is launching four times weekly service to Rosario on 01-Jul-2016. The Rosario launch comes after a long battle with Argentinean authorities, which for several years have blocked new international services to secondary cities by Copa and other foreign airlines. The opportunity to launch Rosario and other secondary cities such as Mendoza is made possible following the recent change of government in Argentina, which is taking a more liberal approach. Brazil’s Gol and Chile’s LAN are currently the only foreign airlines serving Mendoza with flights to Sao Paulo and Santiago respectively.

Royal Brunei to take first A320neo in 4Q2017Royal Brunei Airlines CEO Karam Chand, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA Royal Brunei plans to take its first A320neo in 4Q2017. The carrier currently has seven A320neos on order along with one additional 787-8. Mr Chand said the final six A320neos and the 787-8 will all be delivered in 2018. Royal Brunei currently operates four 787-8s and six A320ceos, according to the CAPA Fleet Database. Mr Chand said four of the A320ceos will be returned in 2018 as the six A320neos are delivered while the other two A320neos and the fifth 787-8 will be growth aircraft. Royal Brunei plans to use the three growth aircraft to expand regionally within Asia-Pacific through a combination of new routes and additional capacity on existing routes. Decisions on which markets to pursue growth will be made as the carrier finalises its new five-year business plan which runs from Apr-2016 to Mar-2021.

Copa unlikely to launch new longer routes with 737 MAXCopa Airlines CEO Pedro Heilbron, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA the Panama-based airline group has the flexibility to open new longer routes that are not possible with its current 737NG fleet. However, given the position of Copa’s hub in the middle of the Americas region there are very few potential new destinations that are opened up by 737 MAX. In continental North America only the Pacific Northwest region is now out of range from Panama City but Copa does not believe there is currently sufficient demand to support services to Vancouver or Seattle.

Copa to take first 737 MAX in 2H2018Copa Airlines CEO Pedro Heilbron, on the sidelines of the IATA Annual General Meeting, told (02-Jun-2016) CAPA the Panama-based airline group plans to take its first 737 MAX aircraft in 2H2018. Copa plans to use its initial batch of 737 MAX 9s to operate some of its longer routes where it now faces payload limitations with 737-800s including Buenos Aires, Montevideo and San Francisco. The Panama City to Buenos Aires, Montevideo and San Francisco routes have scheduled block times of more than seven hours, making them among the longest 737-800 routes in the world. The 737 MAX 9 also provides an opportunity to increase capacity without adding flights as Copa does not currently operate the 737-900. The group currently has a fleet of 77 737-700/800s. Copa ordered 61 737 MAX aircraft – a mix of MAX 8s and MAX 9s – in 2015. Copa has since been reducing its commitment for 737NGs in response to challenging market conditions. Mr Heilbron said Copa now plans to only take five about additional 737NGs before starting the transition to 737 MAX aircraft.

‘Fair competition’ no less clear ahead of EU mandate to negotiate with Gulf states, Turkey and ASEANCAPA - Centre for Aviation stated (02-Jun-2016) as the EC prepares to receive an expected mandate on 07-Jun-2016 to negotiate aviation liberalisation with Gulf states, Turkey and ASEAN, airlines at the IATA AGM are no less clear on what “fair competition” means and if there can be a consensus on it. A clause defining “fair competition” along with a procedure for recourse will significantly influence whether or not agreements can be reached. The ASEAN agreement is expected to have little controversy, in sharp contrast to the agreements with Gulf states and Turkey. An agreement with Qatar may be easier than with the UAE, where Abu Dhabi and Dubai have different approaches to the negotiations and their merit.

Airlines at the IATA AGM are no less clear on what “fair competition” means and if there can be a consensus on it.

Airlines seeking clarity on recent trend of Chinese regulator CAAC issuing safety disciplinesCAPA - Centre for Aviation noted (02-Jun-2016) airlines at the 72nd IATA AGM in Dublin are seeking clarity on a recent trend of Chinese regulator CAAC issuing safety disciplines. Further, whereas previously regulatory matters were dealt with privately, the CAAC is being vocal and publicly issuing statements about a range of disciplinary matters to domestic and foreign airlines. Airlines see the discipline being in regards to non-critical safety matters that were optionally reported. Airlines worry the result will be lower voluntary reporting. Some airlines do not read too much into




this, seeing the discipline having limited punitive effect as their main objective is to remind airlines of the paramount importance China places on aviation safety.

Record number of Chinese airlines attend IATA AGMCAPA - Centre for Aviation noted (02-Jun-2016) a record number of Chinese airlines are attending the IATA AGM in Dublin and are seeking partners for their international expansion. In Australia, which sees more Chinese airlines than any other long-haul market, the partnership dynamic is changing with the HNA group investing 13% in Virgin Australia (to be increased to 19.99%) and forming a partnership subject to regulatory approval. Australia’s only two airline groups now have significant partnerships with Chinese airlines (Qantas has a joint-venture with China Eastern). China Eastern and the Qantas Group account for approximately 32% of the Australia-China nonstop seat capacity in Jun-2016. HNA and Virgin do not have any flights. That leaves 78% of the market without a strategic partner. The largest, China Southern with 43% of the market, has a limited codeshare with Qantas. Air China, with 16% of the market, does not have a partner. Qantas and Virgin will need to evaluate where it is to their benefit, and permitted by their alliance conditions, to partner with the other airlines in the market. Both depend on the Australian domestic market for the bulk of their profits. Australia estimates Chinese visitors take two to three domestic Australia flights per visit.

ICAO notes renewed concerns on a number of safety and security challengesICAO Council President of the Dr Olumuyiwa Benard Aliu stated (02-Jun-2016) the recent terrorist incident at Brussels Airport and the loss of EgyptAir flight 804 have also brought forward renewed concerns on a number of safety and security challenges, for instance the better location finding of downed aircraft and the quick recovery of black boxes, landside security, insider threats and risk management. In this regard, ICAO is now in the process of consultation with our Member States in this regard and in the process of consultation with Member States on new aviation security related Standards and Recommended Practices (SARPs). Meanwhile, a new revision to the concept of operations for ICAO’s Global Aeronautical Distress and Safety System (GADSS) should be ready by the end of 2016.

IATA projects fuel to dip below 20% of airline operating cost for first time since 2004IATA forecast (02-Jun-2016) airline fuel costs will be less than 20% of operating costs in 2016, the first time below this level since 2004.

♦ Fuel price forecast: USD55.4 per barrel, -17% year-on-year; ♦ % spread over oil price: 23%, -0.7 ppts ♦ Fuel costs: USD127 billion, -29.6%; ♦ Fuel as a % of operating costs: 19.7%, -7.8 ppts; ♦ Fuel use: 307 billion litres, +4.7%; ♦ Fuel efficiency (litres/per 100 ATK): 23.7, -1.5%; ♦ CO2 emissions: 817 million tonnes, +4.7%;

IATA: Global commercial aircraft fleet to reach nearly 28,000 in 2016IATA forecast (02-Jun-2016) the global commercial aircraft fleet will expand 3.9% year-on-year in 2016, to 27,930. Available seats will expand 5.8% to 3.9 million, as average aircraft size continues to slowly increase. Seats per aircraft is forecast at 141, up 1.4% from 2015. Scheduled aircraft departures is forecast to reach 36.8 million for 2016, up 5.5%.

ICAO and IATA have recently been engaged on a number of important prioritiesICAO Council President of the Dr Olumuyiwa Benard Aliu stated (02-Jun-2016) IATA and ICAO have enjoyed several decades of productive collaboration, and respective participation at one another’s AGMs and Assemblies has become a helpful tradition. He noted that more recently, ICAO and IATA been engaged on a number of important priorities, including among others: Flight tracking procedures; Conflict zone risk management; The safe integration of remotely - piloted and suborbital flight operations; Cybersecurity preparedness; Increased airspace capacity and operational efficiency; The safe carriage of lithium batteries; and the environment.

Aer Lingus says aviation and tourism support over 220,000 jobs and USD10.5bn in GDP for IrelandAer Lingus CEO Stephen Kavanagh stated (02-Jun-2016) Ireland has for many years played an important role in the development of the global airline industry through the innovation of its businesses and people. He explained: “Today we are home to a strong airline sector, a growing North Atlantic gateway, a vibrant leasing industry and thriving activities in aerospace. We see the impact of this success in our economy where aviation and tourism support over 220,000 jobs and USD10.5 billion in GDP.” This is the second time the IATA AGM is being held in Ireland—the first being in 1962.

Aviation and tourism support over 220,000 jobs and USD10.5 billion in GDP.

IATA raises airline industry profit forecast to USD39.4bn, profit per passenger above USD10IATA forecast (02-Jun-2016) airlines will make net post tax profits of USD39.4 billion in 2016, raising its earlier forecast from USD36 billion. Airline EBITDA margin is forecast at 8.8%, up 0.5 ppts from 2015. Net profit per passenger is forecast at USD10.42, up from USD9.89 in 2015. According to IATA, airlines credit metrics are improving with recent significant free cash flows, particularly in North America, and a forecast further decline in debt ratios. 2016 ROIC is forecast at 9.8%, +0.5 ppts. ROIC at WACC is 3%, +0.7%. Investor value creation for 2016 is forecast at USD16.2 billion.



Aer Lingus does expect the Irish Government to reinstate departure taxAer Lingus CEO Stephen Kavanagh stated (02-Jun-2016) he does not expect the Irish Government to reinstate the departure tax, stating its removal in 2013 has been a “positive political decision” which has resulted in rewards to the government. He said economic activity has more than compensated from the reduction in tax revenue and as a result, he expects the current policy to continue.

IATA: Value of trade shipped by air to slip mildly in 2016IATA forecast (02-Jun-2016) that the value of international trade shipped by air this year will be USD5.5 trillion, down 1.7% year-on-year. The value of trade carried by air transport has declined from USD6.4 million in 2014 (because of the stronger USD). Tourists travelling by air in 2016 are forecast to spend USD657 billion.

Latin America lagging in profitability, airlines generally the ‘poor’ in value chain: Aeroméxico CEOIATA Board of Governors chairman and Aeroméxico CEO Andrés Conesa noted (02-Jun-2016) that Latin America is lagging in profitability, impacted by slower economic activity and currency pressures. On a more global level, he noted that airlines are significantly lower margins than others in the value chain, stating airlines are “the poor in the process”. He however noted that the industry is now healthier than it was a decade ago, with a stronger possibility for continued profitability even if oil prices increase.

The industry is now healthier than it was a decade ago.

IATA expresses concern about remittance issues in Venezuela, several African countriesIATA CEO and director general Tony Tyler expressed (02-Jun-2016) concern regarding the blocking of remittance of airline funds in markets such as Venezuela and several African countries which are “starting to show on our radar” for remittance problems. In Venezuela, he noted that the market effectively stopped with the blocking of remittance of USD3.8 billion in airline funds with just under USD600 million affected in Nigeria with other oil-based African economies also facing problems. He stressed that it is important that airlines are able to remit revenues, stressing that revenues not just profits are impacted. He noted that if airlines cannot meet operating costs, they will be forced with withdraw from the market. He stressed that governments should give priority to airlines, as it is a way to obtain forex, maintain connectivity and facilitate global trade.

IATA: 2016 will see slower growth, with weaker confidence from consumers and businesses

IATA reported (02-Jun-2016) consumers will see a “substantial increase in the value they derive from air transport” in 2016.

♦ Global air transport spending is forecast at USD740 billion, -1.3% year-on-year, following a 4.4% decline in 2015 (distorted downwards by the sharp rise of the USD);

♦ World GDP is forecast at 2.3%, while trade growth is forecast to increase at 2.5%. IATA has lowered its 2016 forecast for economic growth, as weaker confidence induces consumers and business to save lower energy costs rather than to increase spending;

♦ New destinations are forecast to rise by 2% or more. Airlines frequencies are forecast to grow as well;

♦ The average return fare (before surcharges and tax) for 2016 is forecast at USD366, down 10% from USD407 in 2015;

♦ RPKs forecast to increase 6.2%, a 1 percentage point decline from 2015;

♦ Freight rates are forecast at USD1.60 per kg, down 11.1%; ♦ Airline CFOs and heads of cargo reported in Apr-2016 that

they had become more positive about future growth in air travel, but were less positive about cargo.

IATA is working with governments on whole gambit of security issuesIATA CEO and director general Tony Tyler stated (02-Jun-2016) IATA is working with governments on whole gambit of security issues. He said current systems for airport screening is effective but is extremely expensive, cumbersome and time consuming. He noted that the current way of handling security cannot accommodate the volumes moving forward and that the system cannot work with forecast significant growth rates. Mr Tyler said he sees opportunities in risk-based systems and the use of more modern technology and the improved flow and provision of data and information with respective governments. He also noted opportunities to improve the flow of people through terminals, which would have a positive impact on airport security. He cited home printed baggage tags as an example of such an option.

IATA says NDC is ‘now a reality’ and ‘not just an idea’IATA CEO and director general Tony Tyler stated (02-Jun-2016) NDC is “now a reality” and “not just an idea”. It is used by 20 airlines and delivery value and is “here to stay”, he said. He however noted that more work needs to be done to see its use spread and develop. He also stressed that the NDC is a “pathway to other gateways” and there are significant and positive opportunities for the wider spread adoption of the NDC, with the accelerated development and rollout expected.IATA says airlines moving ahead of governments to prevent loss and timely retrieval of aircraftIATA CEO and director general Tony Tyler acknowledged (02-Jun-2016) that lack of sufficient procedures and technologies to prevent the loss and timely retrieval of aircraft. He however stressed that this is “not an easy problem to fix”. He said airlines are actively involved in this area and that “airlines are not waiting for regulation on this area”. Things which are




being considering include live streaming although he noted that with around 100,000 flights per day, the volumes of data is a key issue, among others.

IATA expects UK to remain in European Common Aviation Area regardless of BrexitIATA CEO and director general Tony Tyler stated (02-Jun-2016) it is plausible that the UK would remain in the wider European Common Aviation Area even if it votes to leave the EU. If this was the case, the potential exit “would have little expected impact”.

It is plausible that the UK would remain in the wider European Common Aviation Area even if it votes to leave the EU.

IATA says industry is now more resilient to rising fuel pricesIATA CEO and director general Tony Tyler stated (02-Jun-2016) IATA’s upward forecast revision from the previous Dec-2015 forecast was based on changes for fuel price expectations for 2016, which declined from USD51/bbl to USD45/bbl. He also noted that the industry is now more resilient to rising fuel prices, with airlines learning a way of managing in a high-cost environment, although it remains a “big element” of the cost base. He however noted that passenger yields are forecast to decline 7% and cargo yields are expected to decline 8% in 2016.

IATA says environment remains a key focus and agenda item in 2016IATA CEO and director general Tony Tyler stated (02-Jun-2016) the environment remains a key focus and agenda item in 2016, with it being crucial that a decision on the environment is made. He noted that any scheme to offset industry emissions will have a cost and customers will have meet that cost to bear the cost of their travel. He however was optimistic that a transparent and fair scheme could be implemented at a reasonable cost to the industry.

IATA: Airline industry revenue down, profits and passengers up in 2016IATA released (02-Jun-2016) its 2016 mid-year report for the airline industry. Key points include:

♦ Consumers benefit from lower fuel prices with lower fares, more routes, and will spend USD740 billion (-1.3% year-on-year), equivalent to 1% of world GDP on air transport;

♦ RPKs, which have been growing well above trend despite a sluggish world economy, are forecast to slow this year but remain above-trend at 6.2% (2015: 7.0%). Falling travel costs have been adding several percentage points to RPK growth over the past year;

♦ Load factors are forecast to slip a little (-0.4 ppts to 80%) as capacity accelerates, but breakeven load factor should fall even further (-0.9%, 60.4%) as fuel hedges unwind;

♦ The average return fare (before surcharges and tax) of for 2016 is forecast at USD366, 62% lower than 21 years earlier, after adjusting for inflation. Over the past 20 years, air transport city pairs have doubled and air transport costs have halved;

♦ Governments will collect an estimated USD118 billion in tax from aviation in 2016, up 5.5%;

♦ Jobs in the airline industry should reach 2.61 million (+2.4%), productivity will be up 3.4% and gross value add per employee is estimated at over USD100,000;

♦ Tourist industries will generate USD657 billion in revenue in 2016, -1.2%, and contribute almost 63 million ‘supply chain’ jobs;

♦ Equity owners see a far better 2015 and 2016 with a 9%+ average airline ROIC, above the cost of capital for the first time;

♦ Credit metrics improve further with net debt, adjusted for operating leases, forecast to decline from 4x to 3.6x EBITDAR for 2016;

♦ Infrastructure use costs are rising further, plus inefficiencies in Europe alone add EUR2.9 billion to airline costs next year;

♦ North American airlines perform best with a forecast 10.8% net post - tax profit margin in 2016. Africa is the weakest with a 3.5% loss.

IATA: Airlines will deliver 35% of global trade by value in 2016IATA DG and CEO Tony Tyler reported (02-Jun-2016) commercial aviation will deliver 35% of the value goods traded internationally in 2016, transporting 52 million tonnes of goods.

IATA: Airlines beginning to generate the profits expected from ‘normal’ businesses IATA revised (02-Jun-2016) its 2016 financial outlook for global air transport industry profits upwards to USD39.4 billion (from USD36.3 billion forecast in Dec-2015), with industry revenues of USD709 billion for an aggregate net profit margin of 5.6%. 2016 is expected to be the fifth consecutive year of improving aggregate industry profits. IATA outlook key highlights:

♦ All regions are making a contribution to the USD4.1 billion boost over 2015 profits with improved results; but there are stark regional differences in performance. Over half of the industry profits will be generated in North America (USD22.9 billion) while African carriers are forecast to continue generating an overall loss (USD500 million loss);

♦ On average, airlines will make USD10.42 for each passenger carried;

♦ For the second year in a row and only the second time in the airline industry’s history, the return on invested capital (9.8%) will exceed the cost of capital (estimated to be 6.8%). According to IATA this is the “minimum expectation level for investors” and the airline industry is “beginning



to generate profits that would be expected of any normal business”;

♦ Airlines in North America and in some parts of Europe have seen the gearing of their balance sheets fall towards investment grade levels. But for much of the rest of the industry, “it is a continuing challenge.”

♦ Fuel is expected to represent 19.7% of the industry’s expenses, down from a recent high of 33.1% in 2012-2013. Brent sea crude oil forecast is USD45 per barrel, significantly lower than the USD53.9 average price in 2015;

♦ Weak economic conditions prevail. GDP is expected to expand by 2.3% in 2016. That is down from 2.4% in 2015 and the weakest growth since 2008 when the global financial crisis hit. Consumer spending is relatively strong, but the corporate sector is conserving cash and, despite some easing of government austerity budgets and low interest rates, there is little evidence of an acceleration in infrastructure spending.

On average, airlines will make USD10.42 for each passenger carried.

IATA says aviation industry is ‘optimistic mixed with some caution’IATA CEO and Director General Tony Tyler stated (02-Jun-2016) the mood within the aviation industry is “optimistic mixed with some caution”. He noted that the industry is seeing high levels of efficiency and airlines are reporting “solid results” in a challenging environment.

IATA comments on ICAO Aircraft Tracking Standard and Distress Aircraft TrackingIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) the ICAO Aircraft Tracking Standard will be applicable in Nov-2018 having been adopted on 10-Nov-2015. He noted that while technology may allow for global surveillance coverage in coming years, it is important to maintain an immediate focus on leveraging the equipment already installed on aircraft and ensuring that all stakeholders adhere to established and well-defined roles and responsibilities for ANSPs and airlines. He also noted the adoption of Distress Aircraft Tracking on 07-Mar-2016 with the requirements applicable from 01-Jan-2021 for aircraft delivered on or after that date. This requires the ability to provide autonomous distress tracking of aircraft at least once every minute in distress circumstances. ICAO also extended the required duration of cockpit voice recordings to 25 hours from 2021.

Ireland’s Minister for Transport notes importance of air travel for IrelandIreland’s Minister for Transport, Tourism and Sport Shane Ross noted (02-Jun-2016) 80% of passengers movements are by air

to/from Ireland. He also welcomed the decision for a second runway at Dublin International Airport, stating it is “invaluable in allowing the airport to grow” which will impact the Irish economy as a whole. He also note that nine out of 10 lessors are based in Ireland with 4300 leased aircraft managed from Ireland valued at USD125bn. He however cautioned that there is “no place for complacency in highly competitive aviation sector. “

Ireland’s Minister of Transport frustrated with delays for Norwegian Air InternationalIreland’s Minister for Transport, Tourism and Sport Shane Ross noted (02-Jun-2016) Ireland has a “pro-competition aviation policy”. He noted that loosening bilaterals have resulted in increased competition and new airlines, mainly in the low-cost sector. At the same time, those airlines who have failed to keep up with these developments have disappeared from the market. However, Mr Ross noted that there are interests on both sides of the Atlantic which would like the reverse the process. He commented: “Norwegian Air Group appears to have fallen victim to this wider global debate”. Norwegian Air International is planning new routes at low cost that have never had trans-Atlantic services before such as Cork-Boston which was “unable to start operating these services because it is still waiting on a permit from the US authorities”. Representations on this issue have also been made at the “very highest level”. He however noted “we are still waiting” for approval which is “extremely frustrating in this new era of liberalisation”. He noted that this is the first time since the EU-US Open Skies in 2008 that an airline has announced new trans-Atlantic routes but has been unable to operate due to delayed government approval. He said this situation is not in the interest in the travelling public. He meanwhile also noted that EU-US open skies has been a “huge success” and a leading example of the benefits of open skies.

Ireland’s Minister for Transport notes significant challenge of terrorist attacks, global conflictsIreland’s Minister for Transport, Tourism and Sport Shane Ross noted (02-Jun-2016) the significant challenge of terrorist attacks and global conflicts on the sector, adding that there present “unique challenges” to overcome. Recent events also highlight the increasing importance of maintaining the highest standards of security and safety in aviation. Cyber attacks is also another key issue facing the sector.

Ireland Transport Minister: innovation has been at the heart of the aviation sector in IrelandIreland’s Minister for Transport, Tourism and Sport Shane Ross stated (02-Jun-2016) innovation has been at the heart of the aviation sector in Ireland. He said aviation has played a key role in the economic recovery of Ireland and the government is supportive of continued growth in the sector across all regions of the country. He also noted that the regulation and self-regulation balance is a key issue to debate and that collaborative regulation is an even more important consideration in the future. He cited Ireland’s National Civil




Aviation Development Forum as an example of that, bringing together al interested stakeholders to develop shared understanding on regulatory factors.

Ireland has ‘proud record in aviation over the years’Ireland’s Minister for Transport, Tourism and Sport Shane Ross stated (02-Jun-2016) Ireland has a “proud record in aviation over the years.” He noted that role Ireland plays as a small island in global aviation. He noted IAG CEO Willie Walsh and Ryanair CEO Ryan O’Learly as two key aviation leaders on a global scale although he joked he is “not quite as proud of Michael O’Leary as I used to be” due to his stance and “outspoken moments” regarding Independent politicians.

IATA says aviation industry is at forefront of managing environment impacts as an industryIATA director general and CEO Tony Tyler stated (02-Jun-2016) the aviation industry is at forefront of industry in managing our environment impact. He said this is important to create a long-term licence to continue to grow and connect our world.

Ireland has a strong aviation history: IATAIATA director general and CEO Tony Tyler stated (02-Jun-2016) Ireland has a strong aviation history. He noted that there is an “impressive” footprint in Ireland and that Ireland will continue to be a star in aviation’s future.

IATA notes growth in drones in past decade, cautions on efficiency impactIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) drones, one decade ago, were a “virtually unknown phenomenon in civil airspace”. Today, tens of thousands of aerial vehicles are used worldwide and we are just beginning to take advantage of the great potential that drones offer”. He however cautioned: “We must not allow them to become a drag on on the efficiency of the airways or a safety threat to commercial aviation”.

CFIT, LOCI-I and runway excursions are top three threats in aviation for safety: IATAIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) a key aspect of 2017 priorities for IATA is using information generated by the analysis of operational data in order to identify an address issues in aviation which may affect safety of flight. Using a data-driven approach will ensure priority is given to the higher risk issues. He also said information can be used to participate in several programmes targeting risk reductions in the areas of CFIT, Loss of Control in flight (LOC-I) and runway excursions. These are the top three threats in aviation.IATA IOSA now has 404 airline membership, ISAGO has conducted over 1270 auditsIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) the IATA Operational Safety Audit (IOSA) now includes 404 airlines, of which more than one third (144) are non-IATA members. He also noted that IATA is evaluating the need for the digital transformation

of the IOSA programme. He also noted that in Apr-2016, IATA and the Finnish Transportation Safety Agency signed a MoU to allow the regulator to complement their safety oversight with results form the IOSA programme. He also noted the IATA Safety Audit for Ground Operations (ISAGO programme) has performance over 1270 audits of ground operations worldwide since its launch in 2008. Several major improvements to the programme will take place in coming months, culminating in a scheduled transition to the new ISAGO model by the end of 2017.

IATA notes maturity of operators’ systems if key factor to safetyIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) the maturity of an operators’ systems is a key factor which affects safety. Mr Lopez-Meyer said there was an all accident rate of 1.14 per million flights for IOSA operators versus 3.23 for non-IOSA operators in 2015. He noted: “While no operational standard can guarantee that an operator will never have an event, clearly, data show that operators who maintain there high IOSA standards have better safety performance over time. This trend is more apparent when a longer time frame is reviews. For 2011-2015, the all accident rate for IOSA members was more than three times better than that of non-IOSA members.

“Data show that operators who maintain there high IOSA standards have better safety performance over time.”

IATA sees improvement in six of the eight regions in turboprop safety performanceIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) looking at turboprop operational safety performance in 2015, IATA sees improvement in six of the eight regions. 2015’s turboprop hull loss rate was 1.29 which was an improvement on the previous five-year rate of 3.95 and the 2014 annual rate of 3.13. Mr Lopez-Meyer said: “it is important to note that turboprop safety numbers will vary a lot from period to period because the number of operations is quite small compared to jets”. He added: “Therefore, one accident can have a huge impact on the figures you see, particularly in the North Asia region”. IATA also noted that more smaller operators are adopting some of the proven best practices of the larger jet operators.

IATA says global jet accident rate was equivalent of one accident for every 3.1m flightsIATA senior vice president safety and flight operations Gilberto Lopez-Meyer stated (02-Jun-2016) 2015’s global jet accident rate (hull losses per 1 million flights) was 0.32, equivalent of one accident for every 3.1 million flights. This was an



improvement over the five-year rate (2010 to 2014) when the global hull loss rate stood at 0.46 but above the full year 2014 rate of 0.27, which was the lowest in aviation history.

CityJet to start Sukhoi SuperJet 100 charter services in early Jun-2016CityJet executive chairman Pat Byrne reported the carrier will start charter operations with its first Sukhoi SuperJet 100 in early Jun-2016 (Reuters, 02-Jun-2016).

CityJet to build fleet to 40-50 aircraft, seek IPO or sale in four to five yearsCityJet executive chairman Pat Byrne reported the carrier is considering either an IPO or a sale within four to five years (Reuters, 02-Jun-2016). CityJet plans to build its fleet to around 40 to 50 aircraft, making it one of the largest regional airline brands in Europe, according to Mr Byrne. According to the CAPA Fleet Database, the carrier is scheduled to take delivery of 19 aircraft - 14 Sukhoi SuperJet 100s and five Bombardier CRJ900s - over the next three years.

CityJet to lease SSJ 100s to major European carriersCityJet executive chairman Pat Byrne said the carrier plans to wet lease most of its fleet of Sukhoi SuperJet 100 (SSJ 100) regional jets to other carriers and he is “optimistic we would have our first other contract for summer 2017” (Reuters, 02-Jun-2016). CityJet expects to lease the aircraft to major European carriers and that this “is going to establish the credibility of the aircraft in Europe.” CityJet took delivery of its first SSJ 100s on 24-May-2016. According to the CAPA Fleet Database, the carrier has another 14 SSJ 100s on order, as well as options for another 16.

Turkish Airlines suggests open skies between Turkey and IndiaTurkish Airlines president and CEO Temel Kotil said he believes that Turkey should have an open skies policy with India (The Hindu Business Line, 02-Jun-2016).

Etihad Airways CEO: ‘biggest challenge for airlines this year is capacity’Etihad Aviation Group president and CEO James Hogan said: “the biggest challenge for airlines this year is capacity” (The National, 01-Jun-2016). Mr Hogan commented on currency fluctuations, the contracted global economy and the pending Brexit vote as determining factors. Mr Hogan highlighted: “The whole market has been impacted due to corporations tightening their belt, so corporate travel has been impacted.”

“The whole market has been impacted due to corporations tightening their belt.”

daa considering entrance into Iran: reportdaa CEO Kevin Toland reportedly referred to Iran as a “tremendously exciting opportunity”, while confirming the company is “actively looking” for terminal management and retail concessions in the region (Gulf News, 01-Jun-2016). Mr Toland stated an entrance into the market would be “over the medium term”, while stating the company is still “assessing what the opportunities are likely to be”.

Cathay Pacific expresses interest in stretched A350-1000 variantCathay Pacific expressed interest in the proposed stretched A350-1000 variant to facilitate plans expanding nonstop services to the East and West coast of the US such as Miami (Bloomberg, 02-Jun-2016). Cathay CEO Ivan Chu noted the current A350-1000 is not capable of reaching Miami or other regions in Latin America. As previously reported by CAPA, the airline has 26 A350-1000s on order.

Hawaiian Airlines says metal-neutral JVs constitute ‘virtual mergers’ between dominant airlinesHawaiian Airlines CEO Mark Dunkerly said he objected to JVs, such as the one proposed by Qantas Airways and American Airlines across the Pacific, as they constituted “virtual mergers” between dominant airlines (Fairfax, 02-Jun-2016). Mr Dunkerley explained: “That can have a very decisive impact in limiting the amount of competition from independent carriers...It is not so much that we have an issue with that alliance per se. I think the broader issue we have is essentially the direction of competition policy as it affects the airline industry.”

ATR looking forward to more stability with oil pricesATR CEO Patrick de Castelbajac said he is “looking forward to more stability in the oil price” as volatility is “never good” and has resulted in some fleet decisions being deferred by airlines (The Wall Street Journal, 01-Jun-2016).

Bombardier Commercial Aircraft: E-Jets E2 provides and opportunity to relook at the CRJBombardier Commercial Aircraft president Fred Cromer said the Embraer E-Jets E2 programme “will certainly provide an opportunity” for the company to relook at its own CRJ regional jet family (The Wall Street Journal, 01-Jun-2016). Mr Cromer added that there is potential for refinement for the CRJ aircraft family beyond the new cabin Bombardier unveiled in May-2016. According to Bombardier, the CRJ family backlog was 67 aircraft as of 31-Mar-2016, comprising 10 CRJ700, 34 CRJ900 and 23 CRJ1000.Bombardier Commercial Aircraft targeting LCCs for C Series salesBombardier Commercial Aircraft president Fred Cromer said the company is “looking at different business plans” to prove that the C Series aircraft works in a LCC operating environment (The Wall Street Journal, 01-Jun-2016).




Bombardier confident it will win more C Series orders from carriers like Delta Air LinesBombardier CEO Alan Bellemare said the company is “confident” that it will see more orders from major carriers like Delta Air Lines for the C Series, and that a “variety of different business models” will adopt the C Series aircraft (Reuters, 01-Jun-2016).

AerCap: Challenges in South America, but market has long term potentialAerCap CEO Aengus Kelly said the South American market “has challenges ahead of it” and has taken some of its Warcraft out of the region, but AerCap believes in the market in the longer term (Reuters, 01-Jun-2016).

Etihad Airways wants to expand into China’s secondary citiesEtihad Aviation Group president and CEO James Hogan stated the carrier is seeking regulatory approval to expand into China’s secondary cities, “With the exception of China, there aren’t too many gaps that we have in the network” (The National, 01-Jun-2016). The airline is also looking to expand into Africa however the CEO admits, poor airport infrastructure and tough regulatory process might hinder plans.

Embraer: Bombardier’s C Series discounting has impact on regional aircraft pricing expectationsEmbraer CCO John Slattery said that perceptions of discounting by Bombardier to win an order for 75 C Series aircraft from Delta Air Lines are “causing airlines to consider what that means for the marketplace” and having an impact on regional aircraft pricing expectations, including for the E-Jets E2 programme (Bloomberg, 01-Jun-2016). Mr Slattery said Bombardier’s announcement of a USD500 million onerous contract charge related to recent C Series orders “would lead us to believe that the aircraft were heavily subsidised” and the company is considering options for recourse at the World Trade Organization.

Bombardier C Series marketing has been ‘more aggressive’ on recent orders.Bombardier CEO Alain Bellemare said the company’ “took a more aggressive position on the recent orders” for the C Series and the aircraft is now “at the right stage” for change in the sales strategy (Bloomberg, 01-Jun-2016). The company will take a position that will offer “a bit more flexibility” but is wants to “keep trading-value for customers” said Mr Bellemare.

AerCap sees particularly strong demand for A320neo and Boeing 787AerCap CEO Aengus Kelly commented that the company has “never seen demand for a new technology asset that we are seeing” for the A320neo, and the leasing company is seeing demand that is “similar for the Boeing 787” (Bloomberg, 02-

Jun-2016). According to Mr Kelly, AerCap has already signed lease agreements for 100 A320neo aircraft, despite the fact that the company is yet to take delivery of its first example. According to the CAPA Fleet Database, AerCap has orders for 151 A320neo and 49 A321neo aircraft.

Airline industry still looking at flight data, real time tracking and black box solutionsIATA director general and CEO Tony Tyler said the aviation industry continues to look at solutions for aircraft tracking and the retrieval of information related to aircraft losses, although solutions such as real-time tracking and data streaming and ejectable flight data recorders are “necessarily a simple issue nor an enhancement of safety” (Bloomberg, 02-Jun-2016).

IATA sees ‘isolated’ impact from terrorist attacks on aviation and tourismIATA director general and CEO Tony Tyler said the business impact of events such as terrorist attacks against aircraft, airports and tourist sport “tends to be quite isolated and it’s often not as long-term as some people may think” and that if people want to travel then they will do so (Bloomberg, 02-Jun-2016).

Finnair considering additional A321s, will reach Asia traffic target two years ahead of scheduleFinnair CEO Pekka Vauramo said the carrier is considering additional A321s to meet increasing demand, noting Finnair will hit its target to double Asian traffic two years ahead of schedule (Reuters, 01-Jun-2016). Mr Vauramo said any decision on additional A321s would be made “step by step.” According to the CAPA Fleet Database, Finnair currently operates 11 A321s with six on order.

Cathay Pacific CEO: Slot constraint is not ‘a major problem’ for its expansionCathay Pacific CEO Ivan Chu said Hong Kong International Airport’s slot constraint is not “a major problem” for the carrier’s expansion strategy, “we’ve been in the business for 70 years…we actually have quite a lot of slots in different parts of the world, not just Hong Kong” (Bloomberg, 02-Jun-2016). Mr Chu added, our plan is to maintain “multiple service to key international and regional hub”, it is “supported and liked by our corporate customers so that’s something that we’ll continue to do”.

Hong Kong International Airport’s slot constraint is not “a major problem” for the carrier’s expansion strategy.



Malaysia Airlines to deploy four A350s on London route, phase out A380s by Jun-2018Malaysia Airlines CEO Christoph Mueller said the airline plans to deploy four of six A350-900s on order on Kuala Lumpur-London Heathrow service (Aviation Week, 01-Jun-2016). The two remaining aircraft will be used on Asia Pacific services, potentially including Auckland or Tokyo. The airline’s A380s will be phased out by Jun-2018. Mr Mueller said the A380s provide too much capacity to operate Kuala Lumpur-London service at maximum efficiency.

Cathay Pacific to focus on ‘organic expansion’Cathay Pacific CEO Ivan Chu said the carrier is focusing on “organic expansion” and has “about 70 aircraft on delivery between now and 2024” to help with this strategy (Bloomberg, 02-Jun-2016). As previously reported by CAPA, the airline received its first A350 XWB with 47 more on order. Mr Chu said there are huge plans to expand nonstop services to North America and Europe as well as increase capacity to Australia and New Zealand.

Malaysia Airlines to release fleet plan in mid 2016, considering long range narrowbodiesMalaysia Airlines CEO Christoph Mueller, speaking on the sidelines of the IATA AGM, confirmed the airline is considering acquiring long range narrowbody aircraft as part of a fleet plan to be released in mid 2016 (Reuters, 01-Jun-2016). The carrier is considering using the aircraft to operate more frequencies on China routes. Mr Mueller said, “Instead of flying to a destination once a day with an A330 which is a widebody, we could fly twice a day with a smaller aircraft.”

Dublin Aerospace wins contracts with Boeing in Europe and AirAsia in Southeast AsiaDublin Aerospace executive chairman Conor McCarthy stated (01-Jun-2016) the company has shown that with the right business model and investment in people, “you can deliver a very successful aircraft maintenance business here in Ireland”. He said the company has just won contracts with Boeing in Europe and AirAsia in Southeast Asia for Boeing 737/A320 landing gear overhaul against the “stiffest competition from Eastern Europe and China”.

Ireland has been at the forefront of aviation finance: AerCapAerCap CEO and executive director Aengus Kelly stated (01-Jun-2016) Ireland has been at the forefront of aviation finance and today 50% of the world’s leased aircraft are owned and managed from Ireland. He said AerCap has a long association with Ireland, dating back to the former Guiness Peat Aviation.

daa: ‘hugely positive about the future of Irish aviation’Dublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) daa is “hugely positive about the future of Irish aviation”. He noted strong growth from both existing and new carriers. He said: “Dublin is becoming an increasingly important hub for

transatlantic traffic with one million transferring/transiting passengers in 2015”. The airport will be the fifth largest airport in Europe for transatlantic connectivity in 2016. Traffic at Cork is also growing.

Aer Lingus sees potential to grow Atlantic fleet to 20 aircraft in 2021Aer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) the aviation industry in Ireland is “excited about the current opportunities to further develop our operations connecting Europe and North America through our Dublin gateway. Around 70 million passengers fly across the North Atlantic p/a, most of which travel through Irish aerospace and more than half make at least one stop”. He explained: “Dublin is therefore perfectly located to serve this one-stop intercontinental market”. He said the carrier has doubled its Atlantic fleet in the last few years and believe there “is potential over the next five years to bring our fleet from seven aircraft in 2010 to 20 aircraft in 2021”.

Irish Aviation Authority notes negative impact of security incidences on consumer confidenceIrish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) security incidences have a negative impact on consumer confidence in air travel. He said security is a significant threat at all times and getting worse.

Irish Aviation Authority: ‘biggest threat to security is people working at airports and airlines’Irish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) there is a need to get a sense of balance and ease with airport security. He said that profiling is just one of the security techniques that is implemented and there is a need to educate everyone in the aviation chain that everyone has security responsibility. He also noted that the “biggest threat to security is people working at airports and airlines not passengers”. He said security threats are continuously monitored and re-evaluated and that security and terrorism is a global phenomenon which “affects everyone”.

“...biggest threat to security is people working at airports and airlines not passengers.”

90% of all traffic between Europe and North America used Irish airspace on 31-May-2016Irish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) 90% of all traffic between Europe and North America used Irish airspace on 31-May-2016.

Irish Aviation Authority notes strong growth in Eastern European marketsIrish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) the biggest growth out of Ireland in past 10 years has




been to markets such as Poland, Lithuania- and other Eastern Europe markets. There are “good development opportunities” in these markets, he said. He also noted that LCCs have driven growth from non-traditional airports and recognised that not everyone lives in a capital city.

Norwegian Air International is ‘very legitimate’ operation: Irish Aviation AuthorityIrish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) there is no valid reason for the US to object to Norwegian Air International (NAI). He noted the “huge resistance” to change by the US airlines supported by labour interest in the US, a situation he labelled as “baffling to me”. He said NAI is regulated to the highest standards and will run a “very legitimate” operation from Europe. He said the idea of squashing competition “perplexes me” while claiming that NIA is “mixed up in the row with the Gulf carriers.” He stressed there is “absolutely no security or safety issue” and that all labour standards will be maintained. He noted the EU-US Open Skies agreement is a two-way relationship, one which needs to be honoured by the US.

Irish Aviation Authority boss ‘concerned’ at US delays on Norwegian Air InternationalIrish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) Norwegian Air International (NAI) is “running into a cloud with our friends in the US” but the Authority is “working our way through that”. NAI has been trying for two years to secure a permit that would enable it to operate from Ireland to the US, but intense political and union opposition has delayed the approval. Mr Brennan said he is “very concerned” that there will be further delay in NAI securing final approval. EU officials are set to meet their US counterparts next week to discuss the issue. Mr Brennan said US airlines want to stymie competition. “They want to stamp it out at birth,” he said. Mr Brennan said the delay in processing NAI’s application is “unprecedented”. He also said: “It’s a unique opportunity for Ireland...You’ll have a very large airline based in Ireland and what you’ll see in the future is airlines like Ryanair linking up with Norwegian.” He also noted that 82% of the North Atlantic is controlled by alliances and that NAI is trying to put innovation in the market, based out of Ireland. He said NAI would represent 2% of the North Atlantic market by capacity.

NAI has been trying for two years to secure a permit that would enable it to operate from Ireland to the US.

Irish Aviation Authority is ‘very supportive of aviation’Irish Aviation Authority CEO Eamonn Brennan stated (01-Jun-2016) the Irish Government is “very supportive of aviation” and is focused on supporting not constraining growth. “Aviation is in our blood,” he said. He also said the Authority is

focused on strong regulatory oversight while not impeding but encouraging competition.

Dublin Aerospace: Wage restraint means Western industries can compete against emerging marketsDublin Aerospace executive chairman Conor McCarthy stated (01-Jun-2016) emerging economies are experiencing annual wage growth in the 6%-8% range while there has been no wage growth in Ireland since 2009. The first wage growth since then was in 2016. He said that this wage restraint means Western industries can compete against the emerging markets, while noting the narrowing wage gap across the world.

Dublin Aerospace advertises for 40 of 120 trainee positionsDublin Aerospace executive chairman Conor McCarthy stated (01-Jun-2016) it has 90 people in training with another 120 trainees to be added in the next three years. The company, on 01-Jun-2016, has advertised for 40 of the 120 positions.

Dublin Aerospace says cost benefit in emerging markets is decliningDublin Aerospace executive chairman Conor McCarthy stated (01-Jun-2016) the company is “working smarter and harder than competitors based in other geographical markets”. He said that while cost will also be higher than Asia and Middle East, the company benefits from having a group of well motivated, experienced engineers with no union, just local employee representation. He explained that employees take 10% of profits every quarter and have shared in profits in the past 17 quarters. He also said that employees are rewarded on a monthly basis and during its busy time between September and April the company is operating at 100% efficiency levels. He also said the company has low overheads and a “Spartan existence” with all investments on the shop floor and for new tooling and technology.

Dublin Airport Authority says continuation of security incidents globally will impact travelDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) airports are just one of the places targeted by terrorism. He said there is a very stringent security regime across Europe and in Irish airports and that the continuation of security incidents globally will impact travel. He said airports have to be prepared at all times and that there are 1000 security professionals at Irish airports as part of efforts to best mitigate security incidents. He however noted that security is a “daily concern”.

DAA International has recent success in travel retail in Middle EastDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) DAA International has had recent success in travel retail in the Middle East, with contract wins in Abu Dhabi and Muscat. He said the company is a “long-term operator and partner in Muscat”. DAA International in 2015 was awarded a



contract to manage the new Terminal 5 at Riyadh King Khaled International Airport. An affiliate company has also won the retail contracts for Abu Dhabi’s Midfield Terminal Building (MTB) and Muscat International’s new terminal. It has similar contracts at the two airport’s existing terminals and in Bahrain and in Lebanon. Over the near-term, Mr Toland said DAA is bullish on the Saudi Arabian market where the government is slowly moving to privatise parts of its aviation sector including its airports and in Bahrain where there is plans for a new airport. “It’s a long term business. Our focus in the first term instance is do a really good job with our partners in Riyadh and then there is actually a wonderful opportunity in Saudi,” he said.

Dublin Airport Authority looking at opportunities in US on the retail side with DAA InternationalDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) the company is looking at opportunities in the US on the retail side with DAA International.

Dublin Airport Authority: US airports approaching a time where they are needing to reinvest2-Jun-2016 9:16 AMDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) US airports were built in waves, mostly after WWII and in the 1960s and 1970s. They were mainly constructed as domestic airports so were not overly focused on the experience of travel retail and good F&B options until the last three to five years. He cited Minneapolis and the new terminal at New York JFK as examples of recent improvements in this field in the US. He also noted the airport industry in the US is approaching a time where they are needing to reinvent and reinvest.

Dublin Airport Authority clear that airlines are its main customerDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) the airport is clear that its main customers are airlines, and it is focused on relationships with its airline customers. The passenger experience flows from this, he explained. He noted that the airport has improved from being in the bottom five for passengers experience to being in the top five for past three to four years and at the top end of top five for past two years.

Dublin Airport Authority sees good growth, strong transfer paxDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) the airport had the fastest growth after Athens of any European airports in 2015. The airport is seeing good growth across its business, with double-digit growth on short-haul (+15%), long-haul (+19%), North America (+17%) and Middle East (+25%) routes. He noted the airport benefits from strong transfer passengers, aided by the nation’s geographical position and strong underlying position on North America routes, which is supportive by a deep and competitive short-haul network to the UK and Europe.

Dublin Airport Authority: Ireland offers better connecting from regional UK than LondonDublin Airport Authority CEO Kevin Toland stated (01-Jun-2016) connectivity from regional UK to North America is better via Ireland than London. He said: “If you want to go to North America from somewhere in the UK, you can find 33 cities in the UK connecting to Dublin, from Heathrow you can only go to eight other cities and towns in the UK, so there’s far deeper penetration. Unless you like a long car journey and an expensive car parking stop in one of the major UK airports, it’s easier and more straightforward and a far better experience to come through Dublin. Passengers are able to undertake all US immigration and customs inspections at Dublin Airport prior to departure, meaning they save time on arrival as they are treated as domestic travellers.

Aer Lingus sees ‘poor airports in North America’ as opportunityAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) “poor airports in North America are an opportunity for us to connect cities on the east coast directly to Dublin and flood those customers through to the UK and Europe.”

Aer Lingus sees ‘opportunity for us to flow passengers through Dublin as long-haul traffic’Aer Lingus CEO Stephen Kavanagh commented (01-Jun-2016) on Aer Lingus’s low-fare, long-haul operations, stating: “To be successful in creating a gateway in Dublin, we need to have efficient short-haul services – otherwise we have a gateway pointed in one direction, always. This creates the opportunity for us to flow passengers through Dublin as long-haul traffic.”

Ireland airports could take away traffic from Heathrow with potential BrexitAer Lingus CEO Stephen Kavanagh suggested (01-Jun-2016) that if London Heathrow became difficult for European passengers to pass through with a potential Brexit, Ireland would have the chance to route more customers through Dublin. He made the comments while explaining that Ireland should already be targeting passengers who want to travel to cities on the east coast of the US without having to endure the “poor” customer experience of the country’s largest airports. “If Heathrow or the UK becomes difficult to transfer through from a European perspective then that again escalates the opportunity for our expanding Irish airports,” he said.

Aer Lingus ‘struggling to keep up with level of opportunity’ since joining IAGAer Lingus CEO Stephen Kavanagh commented (01-Jun-2016) that the carrier has been “struggling to keep up with level of opportunity” since joining IAG in Sep-2015.

“We have been struggling to keep up with the level of opportunity at our disposal.”




Aer Lingus says market will be a better place with Norwegian Air InternationalAer Lingus CEO Stephen Kavanagh commented (01-Jun-2016) on the argument concerning Norwegian Air International (NAI) going transatlantic, stating: “We were the first carrier to make use of the Open Skies with agreement with our Washington–Madrid service. I’m suspicious of the US’ motivations to block NAI but I’m confident as a business we’ll respond [to Norwegian’s entry into the US] and the market will be a better place as a result of competition.”

Aer Lingus says competition keeps it relevantAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) competition from the likes of Ryanair and Norwegian is what keeps his carrier relevant. Instead of seeing Ireland’s geographical position as a disadvantage, Mr Kavanagh stated his belief that Ireland’s location is near-perfect in terms of serving transatlantic routes – beaten only by Iceland – and claimed their geography may be why Aer Lingus and Reykjavik-based WOW air are the fastest-growing carriers in terms of transatlantic services. Mr Kavanagh also Aer Lingus’s current success to three main points: managing cost base; maintaining low-entry prices; and providing a high standard of passenger experience. “If Ryanair didn’t exist, we’d have to invent it,” Mr Kavanagh remarked.

“If Ryanair didn’t exist, we’d have to invent them.”

Aer Lingus is ‘suspicious of the motivations to block NAI’Aer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) the carrier is “suspicious of the motivations to block NAI” adding that it is “supportive” of Norwegian Air International (NAI)’s application. He said Aer Lingus is focused on building a business which is robust and he is confident Aer Lingus has the ability to compete with NIA. The market would be a “better place as a result of more competition”.

Aer Lingus discusses expanding eastwards with Qatar AirwaysAer Lingus CEO Stephen Kavanagh commented (01-Jun-2016) on IAG’s relationship with Qatar Airways, noting that the carrier is in talks about expanding eastwards with Qatar Airways as a shareholder and partner. “Certainly, while we’re focused on exploiting the opportunities growing west...there’s certainly an opportunity for us in the future,” he said, adding: “We’ve been bereft of opportunity growing east, simply because of the control that Emirates and Etihad would have on the flow of traffic to the Middle East on to their networks...Now we have not just a shareholder, but also a partner, with a competitive network in Qatar. We would connect into the Qatar hub either on our metal (aircraft) or Qatar metal. It’s a natural way of exploiting the opportunities that both parties can bring.” Mr Kavanagh said it’s “only a matter of time”

before the link happens, which would enable the carrier to “exploit” the opportunities from the relationship. However he conceded it is a medium-term plan given Aer Lingus’ current focus on expanding its transatlantic network. He said there are “active talks at the moment” to connect Doha using either Qatar Airways or Aer Lingus metal. Qatar Airways owns a 15% stake in IAG.

Aer Lingus says airlines have become better businesses, IAG targetting 15% ROICAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) airlines have become better businesses with management teams and boards increasing focused on ROIC, led by the US industry post-Chapter 11. He said the post-Chapter 11 era in the US has seen sustainable levels of return in the US. He said IAG is targeting a 15% ROIC which is a “significant return rate”. He also said the company has confidence in sustainable, new business models, which are focused on capacity discipline where suitable. He also said Aer Lingus’ ROIC is around 12.5%, with confidence of this increasing to 15%.

Aer Lingus notes need for common security portals and smart initiativesAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) there is a real role for IATA in introducing common security portals and smart initiatives. He said more technology is available to solve these problems. He also said the Trusted Traveller Programme in the US represents a US protocol which “hasn’t been developed as far as it can” on a global level. IATA has a role in this to ensure global consistency, he also noted.

Aer Lingus CEO: Ireland needs to be ‘internationally relevant in everything we do’Aer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) with such a small home market, Ireland needs to be “internationally relevant in everything we do”. He used US pre-clearance as an example of this, noting that the convenience is facilities and enabled by the “type of infrastructure we have built in Ireland”.

Aer Lingus says Brexit would ‘create some difficulties for British-based carriers’Aer Lingus CEO Stephen Kavanagh noted (01-Jun-2016) the impact on European skies if the UK leaves the EU. He said it would “create some difficulties for British-based carriers” and that there may renegotiations in ASAs in the event of a UK exit. He said Aer Lingus, as part of IAG, does not have a definitive position on the issue but noted that is “creating uncertainty”. He said it would create economic uncertainty, which would impact a business which requires economic activity to be sustained. He also noted that there are “opportunities from disruption in the market” from a potential Bretxit, but the “uncertainty that it would create is unwelcome for all”. He however noted: “The lesson is to always look for opportunity and I think that is a distinctly Irish trait because we have such a small home market. We have to be internationally relevant in everything we do.”



Aer Lingus spends USD4m per day on overhaul globallyAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) the product provided by Dublin Aerospace is “as good as any product round the world that we deal with”. He noted that Aer Lingus spends USD4 million per day on overhaul globally.

Aer Lingus says fuel is around one-third of cost base; says complacency is an issue with low fuelAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) fuel is a “significant element of our cost base” and is around one-third of the carrier’s cost base. He said the industry is capable of delivering a return when oil is north of USD120 per barrel and that complacency at USD30/barrel “is what you have to be careful of”. He explained that airlines can be relaxed about other cost base elements when oil prices are low and airlines can “get very complacent” although the benefit of low oil prices for the carrier is that it gives the ability to accelerate growth plans. He also said the key is to design a business being cost competitive across all inputs.

The industry is capable of delivering a return when oil is north of USD120 per barrel.

Aer Lingus CEO says short-haul efficiency has benefit on trans-Atlantic marketAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) the efficiency of its short-haul services is a key factor in the carrier’s success in building a gateway from Dublin in the trans-Atlantic market. The pressures exerted on the short-haul has enabled the carrier to flow traffic through Dublin on long-haul market. The carrier has also benefited from its geographic advantage, with Mr Kavangh noting that the “geography of Ireland is perfect.”

Aer Lingus focused on managing cost base, notes importance of a competitive price pointAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) the carrier remains focused on managing its cost base, while also increasing the market, focusing on the guest experience and maintaining a competitive price point, a factor which is especially relevant in the short-haul market. These factors have “kept the carrier relevant”, according to Mr Kavanagh.

Aer Lingus CEO says Ryanair has made airline more competitiveAer Lingus CEO Stephen Kavanagh stated (01-Jun-2016) there have been changes in the European airline market in terms of competition. As the carrier marks its 80th anniversary, Mr Kavangh noted that the carrier has faced competition from Ryanair in the past 30 years. “If Ryanair didn’t exist, we’d have to invent them,” Mr Kavanagh said, noting that the discipline that competition exerts is positive for all involved.

The result of such competition has been an expanded market with the propensity to travel in Ireland “far higher than anywhere else” globally. In Ireland, six airlines seats are sold per her per population, compared to three in the UK, as an example.

AerCap buys, sells or lease one aircraft every 24 hoursAerCap CEO and executive director Aengus Kelly stated (01-Jun-2016) the company buys, sells or leases one aircraft every 24 hours. AerCap has 783 narrowbody, 286 widebody and 14 freighters in its in service fleet, according to the CAPA Fleet Database, with 300 narrowbody, 57 widebody and 50 regional aircraft on firm order.

Olympic Air could become second airline under Star’s Connection Partner ModelAegean Airlines stated (01-Jun-2016) it is looking to bring its subsidiary Olympic Air into the Star Alliance using Star’s Connection Partner Model (CPM). Star launched the CPM platform in Dec-2015 with South African LCC subsidiary Mango the first user. Star Alliance member sources told CAPA at the 01-Jun-2016 IATA Annual General Assembly that Olympic Air is the likely second user for the CPM, which is primarily intended for LCCs. Brazil’s Azul and China’s Juneyao Airilnes also have been looking at potentially joining Star as either a full member as an affiliate through the CPM platform.

Juneyao Airlines decision on Star Alliance not imminentJuneyao Airlines stated (01-Jun-2016) it continues to evaluate potential membership or affiliation with Star Alliance. Star Alliance member sources told CAPA on the sidelines of the 01-Jun-2016 IATA Annual General Assembly that Juneyao has not yet submitted an application to join Star. So far it has only shown interest in joining and is looking at joining either as a full member or as an affiliate through Star’s new Connection Partner Model (CPM). Air China would be Juneyao’s sponsor and is apparently trying to push Juneyao to join as a member.

Malaysia Airlines disappointed by Malaysia’s increase in navigational feesMalaysia Airlines head of regulatory affairs Suresh Singam told (01-Jun-2016) CAPA, on the sidelines of the 01-Jun-2016 IATA AGM, the large increase in fees implemented recently by Malaysia’s Department of Civil Aviation was “disappointing but understandable”. He pointed out that Malaysia had not increased fees since 1974 and that Malaysia’s DGAC annual expenses are MRY220 million (USD53 million) while revenues are only MYR40 million (USD10 million). As previously reported by CAPA, the Malaysian industry has been working with the Malaysian government to stagger the increase to reduce the impact on airlines.

Ethiopian makes another adjustment in BrazilEthiopian Airlines stated (01-Jun-2016) it is confident it can improve its performance in the Brazilian market, which it is now serving via Lome. Ethiopian resumed service from




Lome to Sao Paulo on 21-May-2016 with three times weekly service which originates in Addis Ababa. Ethiopian initially launched service to Brazil in 2013 with Addis Ababa-Lome-Rio de Janeiro-Sao Paulo-Lome-Addis Ababa routing. Ethiopian dropped the Rio de Janeiro stop in 2014 and the Lome stop in 2015. But after about a year of operating nonstop between Addis Ababa and Sao Paulo Ethiopian resumed the Lome stop in May-2016. Ethiopian CEO Tewolde Gebremariam, on the sidelines of the IATA AGM in Dublin on 01-Jun-2016, told CAPA the nonstop flight from Addis Ababa to Sao Paulo did not work due to payload limitations from Addis Ababa and the weak economy in Brazil. With the stop in Lome there are no payload limitations and Ethiopian can carry passengers in the growing West Africa-Brazil market using its regional Togo-based affiliate ASKY, which is expanding to provide increased feed to Ethiopian’s services to Sao Paulo and Newark.

ASKY expands 737 fleet to support Ethiopian’s new Newark flightEthiopian Airlines stated (01-Jun-2016) it is expanding its Togo-based affiliate ASKY Airlines ahead of Ethiopian’s launch of flights to New York via Lome and the resumption of Lome-Sao Paulo flights. Ethiopian CEO Tewolde Gebremariam told CAPA, on the sidelines of the IATA AGM in Dublin on 01-Jun-2016, that ASKY’s fleet is expanding by two Boeing 737s. One aircraft is for growth and one is to replace a Bombardier Q400 which will return to Ethiopian’s Addis Ababa-based fleet. ASKY’s 737 fleet will grow from three to five aircraft while the Q400 fleet will be reduced from four to three aircraft. Mr Gebremariam said ASKY is adding capacity on several routes from its hub in Lome through increased frequencies and upgauging. The additional capacity on regional routes within West Africa will support Ethiopian’s new three times weekly Addis Ababa-Tome-New York Newark route, which is launching on 03-Jul-2016, and the 21-May-2016 resumption of three times weekly Addis Ababa-Lome-Sao Paulo service.

Ethiopian to rely mainly on West African traffic for new Newark serviceEthiopian Airlines stated (01-Jun-2016) it plans to rely mainly on West Africa traffic for its new Addis Ababa-Lome-New York Newark route. Ethiopian CEO Tewolde Gebremariam told CAPA, on the sidelines of the IATA AGM in Dublin on 01-Jun-2016, that passengers heading to and from West Africa will “by and large” account for traffic on the Newark-Lome leg. Ethiopian expects strong sales from both West Africa and New York, which has a large West African community but relatively limited demand for East African services. Togo-US is a very small market but Ethiopian offers connections via its Lome-based affiliate ASKY Airlines to almost 20 regional destinations throughout West Africa. Ethiopian in particular expects strong demand from Ghana, Nigeria and Mali. Mr Gebremariam said Ethiopian initially was seeking to serve New York JFK as JFK is the preferred airport for New York’s West African community but it was unable to secure slots at JFK. Mr Tewolde said Ethiopian could potentially later move its New York-Lome flight to JFK if slots become available or operate from both JFK and Newark.

AerCap: Russia is a ‘country of the future’, talks recently held with Russian airlinesAerCap CEO and executive director Aengus Kelly stated (01-Jun-2016) he was recently in Moscow for the “first time in a while”, holding discussions with a number of airlines. He noted that “Russia is a country of the future”, and the market, “which lacks suitable land-based options”, will continue to grow. AerCap supplied 16% of the Russian fleet at the beginning of 2015, subsequently taking out around 35 aircraft, but that discussions with Russian airlines “no longer revolve around handing back capacity”. He asserted that the floor in the Russian market has been reached and there is “potential of adding capacity in the Russian market” despite the significant impact of events in Turkey. He said: “Russia we feel has hit the bottom. Discussions with Russian carriers we are having now no longer centre around handing capacity back”. He also noted: “ We will be in the Russian market for a long time” as the biggest supplier and owner of aircraft in Russia.

Ireland has aviation industry over and above the needs of the Irish populationIrish economist David McWilliams stated (01-Jun-2016) the geographical position of Ireland was previously seen as a “terrible disadvantage” but has become “quite an advantage”. He said Ireland has an aviation industry over and above the needs of the Irish population while half of all the aircraft leased globally have their business done out of Ireland. AerCap has a market capitalisation equating to a quarter of the Irish GDP. He commented that Aer Lingus is now the fastest growing carrier of the trans-Atlantic route and the trans-Atlantic route has been transformed with an explosion in connecting traffic out of Dublin.

The geographical position of Ireland was previously seen as a “terrible disadvantage” but has become “quite an advantage”.

AerCap supplies around 10%-12% of the fleet in the Middle EastAerCap CEO and executive director Aengus Kelly stated (01-Jun-2016) Waha Capital has been a “successful” partner for AerCap and “invested when others were not willing to do it”. He said AerCap is the biggest supplier to Emirates in terms of aircraft, and a “very large supplier” to Air Arabia, to Oman Air and to “pretty much most airlines in the Middle East”. The company supplies around 10%-12% of the fleet in the Middle East, a market Mr Kelly described as a “growing market”. He also said there are some small lessor entities in the Middle East and “I don’t see that changing”.



AerCap: Lessors own 42% of world’s fleetAerCap CEO and executive director Aengus Kelly noted (01-Jun-2016) that lessors own 42% of the world’s fleet, up from 12% around 15 years ago. The company is adding USD5 billion in assets p/a, which equates to USD100 million/week in asset additions to maintain market share in a market of air travel growth. “We have to grow a lot just to maintain market share,” he noted.

AerCap comments on ‘unusual’ issue of negative and low interest ratesAerCap CEO and executive director Aengus Kelly commented (01-Jun-2016) on the “unusual” and topical issue of negative and low interest rates, noting that such a situation encourages companies to purchase assets. This in turn pushes up the prices of such assets and may result in an inefficient allocation of capital and the pursuit of “poor ideas”. He also noted that interest expense is the biggest cost for AerCap, and a decline in interest rates reduces the cost of funding. He also noted that lease rates have also declined, so margins have remained relatively stable.

AerCap directly impacted by recent terrorism and security incidencesAerCap CEO and executive director Aengus Kelly noted (01-Jun-2016) the impact of terrorism and security incidences on the company, noting that AerCap has been impacted by recent events in the Sinai, Mogadishu and Malaysia. He also noted that security at airports is “vigorous” and profiling at airport is a “deeply sensitive” issue.

AerCap: ‘No matter what happens in 2017, there will be more people travelling’AerCap CEO and executive Director Aengus Kelly stated (01-Jun-2016) it is incumbent on the state to realise that aviation is a “significant business” and that aviation is a “business that lots of other countries want”. He noted that the good thing about the aviation industry is that it will “grow every year”. He said: “No matter what happens in 2017, there will be more people travelling”. He noted that every 15 years, the number of people travelling doubles, with traffic growth transcending cyclicality. This provides the confidence that there is a long-term future for the aviation business, which enables the development of world-class enterprises.

There is a long-term future for the aviation business, which enables the development of world-class enterprises.

AerCap sees opportunities in Europe, ‘awful lot of growth’ in Eastern Europe marketsAerCap CEO and executive director Aengus Kelly noted (01-Jun-2016) the “huge opportunity” which exists in European markets such as Romania, Poland, Czech Republic, Turkey and the Baltic states. He said there is an “awful lot growth” in these markets and significant opportunity in these emerging markets.




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