Mubadala Breaks Ground on Airbus Deal
Lufthansa Systems is here (Stand A220) promoting its software programs for airline operations such as scheduling, crew management, flight planning, and weight and balance. The Middle East region currently accounts for 10 percent of the company’s sales, a proportion that is increasing, Stefan Auerbach, senior v-p for Europe, Middle East and Africa sales told AIN. A sales announcement is expected here tomorrow.
Kuwait-based Jazeera Airways expects to make a profit this year, even though it reported a $7.6 million first-half loss. “We are going to be profitable for the full year,” said chief executive Stefan Pichler, who joined the airline in June from a position as chief commercial officer at Virgin Blue. The low-cost carrier plans to open a second hub in 2010, having dropped routes to Beirut, Delhi, Mumbai, Salalah and Sanaa this year.
Publicly owned Air Arabia, the region’s largest low-cost carrier, operates 16 Airbus A320s, has ordered another 44 and plans to open a third operating hub in Alexandria, Egypt, in early 2010, perhaps at the beginning of the northern summer season in late March.
Continued eastward migration of low-cost carriers (LCCs) from North America and Europe to regions such as the Middle East and Asia arguably has established the credibility of this air transport business model.
AirAsiaX has placed firm orders for 10 Airbus A350-900 airliners. The Malaysian carrier will use the new widebodys to connect its Asian hub in Kuala Lumpur with cities in Europe and Australia. The value of the deal was not confirmed but at list prices it would be approximately $2.4 billion.
Short-haul operators in Europe have been seeing almost no growth in passenger numbers and have struggled to reduce capacity to offset lower traffic as the global economic downturn has turned to recession. After a disappointing 2008 that saw load factors fall, European Regions Airline Association (ERA) members now suffer “a considerable worsening” in demand.
Should anybody harbor any doubts, two recent events confirmed that the mid-decade airline-order boom has ended: Airbus announced A320 production cutbacks and Ryanair has come looking for bargain-basement prices for single-aisle airplanes. Airbus now plans to cut single-aisle production from 36 to 34 a month starting in October and possibly to a lower rate later.
European low-cost carrier Ryanair has entered “early negotiations” to order 200 to 300 new Boeing 737-800s or Airbus A320-series airliners in the coming two years. The equipment, which includes replacement capacity, would support continued expansion during the 2012 to 2017 timeframe, with Ryanair potentially benefiting from any decline in aircraft prices during the current recession.
UK regional airline Eastern Airways is “exactly on track, or slightly ahead” of projections for this year, according to COO Chris Holliday. Although he attributes continued profitability to tight financial controls, Eastern has “always been extremely focused on costs,” he said.