INSIDE AIR TRAVEL
Europe's Regional Carriers (ERA) Meet in Copenhagen
European Regions Airline Association members saw their passenger traffic increase 6.3% during 2005. Load factors averaged a record 61.5%. Eurocontrol's program to minimize en route delays appears to be working, delegates heard, reflected in airlines' average sector time increasing in line with average sector distance (74 minutes from 72 minutes in 2004, on distances of 550km, up 19kms from last year). Many members are in the throes of fleet expansion and there was a general mood of optimism as they gathered in Copenhagen last week.
ERA President Antonis Simigdalas noted: "We can stop talking of recovery and now talk about progress." His own airline, Aegean Airlines, is a case in point. Aegean saw its traffic grow 12.3% last year to carry 4.07m passengers. It moves into Airbus A320 operations from next year, (retiring older 737-300s and possibly some Avro RJs). It recently ordered up to 20 A320s (eight firm, 12 options) for delivery from next year through to 2009. Aegean also wants to add new routes from Athens to Tirana, Bucharest and Cairo, subject to securing traffic rights.
Aer Arran too, whose CEO Padriag O'Ceidigh delivered an impassioned, evangelical speech about motivating and empowering staff, confirmed his airline is adding more 70-seat turboprops to its 14-strong ATR fleet. Eleven years ago when O'Ceidigh, a trained teacher, accountant and lawyer, took over Aer Arran, it had a turnover of E250,000. Last year it topped 400 employees and turnover was E100m. "Your most important asset is not on your balance sheet &endash; it is your people," he said, going on to disclose that Aer Arran is currently searching for a new CEO. Aer Arran's management team will decide on the successful candidate, participating in the interviews, he said.
SAS partner Blue1 of Finland is preparing for the "biggest expansion in its history," welcoming into service from next week the first of three ex-SAS MD-90s and ten new routes from Helsinki to Stansted, Paris, Rome, Dublin, Barcelona, Dublin, Nice, Budapest and Warsaw. A move into 160-seat operations is a significant step, signaling a relaxation in the archaic scope clause rules, still prevalent elsewhere. "A medieval social practice that has got to be driven away," opines ERA director general Mike Ambrose.
Salenia, which owns Skyways Express of Sweden, is days away from securing an AOC for new company Air Express, which will specialize in 100-seat wet-lease operations. Two Fokker 100s are being acquired for longer sector charters, confirmed Skyways CEO Jan Palmer, who added there was a strong possibility of close collaboration with Denim Air, the leading regional airline ACMI specialist. Denim Air marked ten years of supporting ERA airlines in Copenhagen and CEO Matthijs Boertien disclosed it was close to ratifying agreement with Air Nostrum, a long term partner, to extend its agreement with them, flying up to 11 Bombardier Q300s through to 2011.
Fuel &endash; how to manage the high prices, coupled with mounting environmental pressures was on the agenda this week, with Lufthansa's Helmut Fredrich stating fuel costs now account for 32% of direct operating costs at a network carrier and 21% of that at a short haul airline. Delegates heard how important it was, more than ever, to operate efficiently. Airlines are focused 100% on reducing costs and airports, handling agents and other suppliers need to be sympathetic to this. Give airlines want they need with terminals that meet their needs, minimum connecting times, investment in low air bridges and covered baggage carts, not long walks to the furthest gate on a remote stand. Don't let business passengers be put off flying regional airlines because of a 'wet and sweat' experience, summarized Lufthansa CityLine's Robert Viertel, VP Ground Operations.
"The pendulum is certainly swinging back for turboprops," stated GECAS Senior VP RJ Programs Todd Freeman, pointing to the 150 orders placed last year. Production is up 30% up and there is a ten-year high order backlog. Fifty seat regional jets are fetching affordable lease rates now, he said, challenging too that they are competitive with the new turboprops on 200nm sectors. Both Saab Aircraft Leasing and Bombardier say they have few Saab 2000s and Q300s available. Fokker Aircraft Services reports it has less than ten Fokker 100s left to remarket. New European customers include Carpatair and Moldavian Airlines, plus Austrian Airlines-owned Slovak Airlines.
"You wouldn't have thought that ten years ago you could get lease rates of around $80,000 to $120,000 for a 100-seat jet and $50,000 for an older generation turboprop, Antonis Simigdalas told ABTN. He sees the next big growth area in Eastern Europe, where discussions between ERA, EU and their regulators is ongoing.
The next opportunity for ERA airlines and airports to meet will be at Routes' New Route Europe networking event in Warsaw during 21-23 May. ERA's 26th annual meeting will be held in Barcelona during 27-29 September. http://www.eraa.org http://www.newrouteeurope.com
By Alison Chambers
alison@emeraldmedia.co.uk
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