London (CNN) – ANONYMOUS – Some violence and sexual content
Flying across the Atlantic I was browsing through the selection of movies on the Video on Demand. It soon became clear that the censor who rates the movies for United Airlines takes their job very seriously indeed. Not for them, the normal ratings 14, 16 or Adult. Oh no. That would be far too simple. These days the censors have to give us a real rundown of the experiences we might expect.
Delta Airlines' decision to buy an oil refinery has caught the imagination. It seems to make a lot of sense and if the numbers actually come true it will look like a stroke of genius.
Delta says that it could get savings of $300 million a year by cutting out the middle man and refining its own jet fuel, all for the cost of one medium-size new airliner. It sounds like a no-brainer so I put the question to a CEO of an Asia airline: did he think that individually or as a group that Asian airlines would get together to look at a similar arrangement.
It does make some sense. According to Cathay Pacific Airways, fuel costs accounted for 41.5% of total operating costs last year. That's a lot higher than the 30% average for global airlines. The reason why Cathay and other Asian arilines have proportionally higher fuel bills is that they are mainly long-haul operators, and the fuel component of a long-haul flight can be twice as high as a short-haul flight - 60% fuel cost on long-haul versus 30% on short haul.
Fuel costs were the main reason by long-haul budget airline AirAsia X to cut back its services. Its short-haul flights are still performing strongly.
But buying a refinery is not on anyone's agenda among Asian airlines. Not yet at least. But what is on the radar relating to fuel costs is fracking - the process of extracting gas and oil through hydraulic pressure fracturing of rocks. It has revolutionized the gas industry in the U.S. Gas prices are at a 10-year low, prompting oil-energy users such as power companies to look at switching to gas-fired plants, a relatively easy transtition.
As oil users switch to gas, airlines are hoping there could be a knock-on effect to the price of oil as demand starts to fall. It may be a long shot at this stage, but in the airline industry it's one of the very few bright spots on an otherwise bleak outlook for controlling one of the biggest costs in the business.
Hong Kong, China (CNN) – With a Greek debt deal successfully brokered on Tuesday, the world’s economic skies seem a bit less likely to fall. That new $173 billion bailout for Greece on the brink of bankruptcy is now staunching a bit of the hemorrhage of confidence in the continent.
As for the “stuff” that actually flies through those economic skies? The volume of that over our heads, homes and offices is, in fact, falling.
And Hong Kong is one of the best places to take a measure of it all.
This Asian hub of commerce boasts the busiest air cargo airport in the world. And air cargo volumes are an excellent thermometer to gauge the health of global trade.
According to Hong Kong airport data, 3.9 million tons of cargo passed through this Chinese territory in 2011. But for all that volume, the huge number actually revealed a drop of nearly 5% year on year.
Just as Hong Kong is the world’s number one cargo hub, Cathay Pacific Airways is the world’s number one air cargo carrier. In 2011, Hong’s Kong’s flagship airline transported more than 1.6 million tons of cargo around the world. But that represented a drop as well – of nearly 9% year on year.
The reason for this season of slumps is found not in Asia but halfway around the world: in the United States and Europe.
The U.S. is still clawing back from its Great Recession.
Europe, which buys 30% of all of China’s exports, is still focused on its highly-indebted nations. And for the next several months and years, Spain, Portugal, Ireland, Italy– and yes Greece- will still be the word.
It’s a decline in demand from all these places – for cheaper Asian-assembled electronics and your Wal-Mart apparel – that led to a slump in air cargo traffic last year.
And the 2012 skies don’t look much brighter.
The International Air Transport Association, more famously known as IATA, forecasts absolutely no growth for global air cargo traffic this year.
Cathay Pacific’s CEO John Slosar predicts his company’s air cargo business might not take off again until the second half. That’s not great news since the company relies on cargo for 30% of its annual profit.
And some oil analysts foretell of $150 per barrel ifIrantensions boil over into conflict.
All this may be conspiring for a collision course with catastrophe. But reroutes do exist.
To offset losses, airlines have successfully booked more people into their seats. Cathay reported nearly 12% more passengers this past January, year on year.
That’s on top of rising ticket prices as any flier – frequent or not – can attest.
And just this past December, Cathay announced it would delay the purchase of two new Boeing 747-8F freighters until 2013.
The bottom line for the air cargo industry? Despite short-term fixes, its long-term recovery will depend on the pace of improvement in the U.S. and Europe.
Until then, better profits from global air cargo will hang on a wing and a prayer.
(CNN) – Japan's first Boeing 787 Dreamliner is finally about to be delivered - three years late.
ANA should have taken delivery of the high-tech aircraft in May 2008, before a series of technical problems led to repeated delays.
But this is not the first time the Dreamliner has touched down in Japan.
Back in July, it landed amid much fanfare at Tokyo's Haneda airport during a week-long test run. It was greeted by reporters, fans and All Nippon Airways staff carrying a “Welcome to Japan” banner. A ripple of applause even broke out as the pilots stepped off the plane, emblazoned with the ANA’s blue and white logo. FULL POST
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