Dragonair to expand its fleet

Dragonair, a unit of Hong Kong's dominant carrier Cathay Pacific Airways, said on Wednesday that it plans to expand its fleet 20 percent this year by adding six aircraft and will hire more staff to meet growing demand in Asia. Strong demand from China, Dragonair's largest market, helped boost the regional carrier's passenger numbers by 7 percent to a record high last year despite deepening global economic uncertainty. Cathay Pacific reported in January that Dragonair alongside it carried a total of 27.58 million passengers in 2011, up 2.9 percent. It did not provide a breakdown for Dragonair.

The global aviation industry is expected to see a tough year ahead with industry body the International Air Transport Association (IATA) forecasting the industry could lose USD$8.3 billion if the European sovereign debt crisis evolves into a full-blown banking crisis and recession.

Malaysian onboard OneWorld

Malaysia Airlines is to join oneworld®, adding one of aviation's most frequent award winners to the world's leading quality airline alliance. Malaysia Airlines was unanimously elected a oneworld member designate by the Chief Executives of the alliance's member airlines, at a meeting on the sidelines of IATA's 2011 World Air Transport Summit, which opens in Singapore today. A formal alliance membership agreement will be completed soon.

Malaysia Airlines is expected to start flying as part of oneworld late next year. As it prepares for its alliance membership, Malaysia Airlines intends to develop bilateral links with a number of oneworld's established partners, who include some of the biggest and best names in the airline industry. It already codeshares with oneworld partners Cathay Pacific and Royal Jordanian. When it becomes part of oneworld, its customers will gain access to the alliance's truly global network. It will expand oneworld's global coverage to almost 950 destinations in 150 countries, served by a combined fleet of more than 2,600 aircraft operating some 10,000 flights a day and carrying 358 million passengers a year.

Three established oneworld member airlines currently serve Malaysia, with Cathay Pacific, Japan Airlines and Royal Jordanian flying to Kuala Lumpur, and Cathay Pacific also to Penang and, through its Dragonair affiliate, Kota Kinabalu. Opportunities for expanding the alliance's coverage of the country will be explored as Malaysia Airlines prepares to join. When it becomes part of oneworld, members of Malaysia Airlines Enrich frequent flyer program will be able to earn and redeem rewards on any of oneworld's 14 other top-class carriers, with top tier members able to use any of the group's 550 plus airport lounges, and its network will be covered by oneworld's range of alliance fares.

At the same time, frequent flyer cardholders of oneworld's established airlines will be able to earn and redeem rewards when flying on Malaysia Airlines. Qantas will serve a s sponsor of Malaysia Airlines entry into oneworld.Malaysia Airlines Chairman Tan Sri Dr Mohd Munir Abdul Majid said: "The Board of Malaysia Airlines had targeted entry into an alliance this year. I am glad we are at the stage where the initiation with oneworld is formalized."

Malaysia Airlines Managing Director and Chief Executive Officer Tengku Azmil Aziz said: "With the world airline industry increasingly focused on alliances, we have carried out careful analysis of the options now available to Malaysia Airlines. The time is clearly right for our company to join one of the global airline groups, and oneworld is clearly the best option for us. As a company highly focused on quality service, we are immensely proud to have been invited to join the highest quality alliance with the best airline partners offering a global network that best complements our own. We look forward to completing all joining requirements as soon as possible."

American Airlines Chairman and Chief Executive Gerard Arpey, Chairman of the oneworld Governing Board, said: "Today's agreement with Malaysia Airlines represents another significant milestone in our effort to establish oneworld firmly as the world's premier airline alliance with members unmatched in brand and service quality. Not only will Malaysia Airlines bolster oneworld's presence in Asia, in North America it will also further strengthen our alliance's position at Los Angeles, where American Airlines has significantly expanded with new international and domestic flights as well as enhanced facilities. We look forward to welcoming Malaysia Airlines to oneworld."

oneworld CEO Bruce Ashby said: "oneworld already features four of the best airlines in Asia-Pacific, including member elect Kingfisher Airlines. Adding another leading Asian carrier, in Malaysia Airlines, will greatly enhance oneworld's offering throughout the world's fast growing region for air travel demand." Qantas Chief Executive Officer Alan Joyce said: "Malaysia Airlines is an ideal candidate for oneworld, with its world-class reputation for customer service mirroring oneworld's own focus. Its Kuala Lumpur home will provide our customers with another of the world's best airports, geographically well placed between our existing hubs. Qantas is delighted to be serving as its sponsor in joining oneworld."

Airlines are slowly gaining from the global economic recovery - IATA

The International Air Transport Association (IATA) said on Thursday the global economy was recovering more slowly than expected, but was inching upward based on air traffic data, a key barometer of growth. High oil prices, the crisis in the Middle East and Japan's earthquake and tsunami dented growth, but the global economy appeared to be slowly overcoming the effects, said Giovanni Bisignani, director general of the global air industry body.

"From the numbers, the recovery is moving," he told a news conference in Singapore. "It is moving slower than expected because the recovery this year has been affected by many, many different situations (such as) the situation in the Middle East and the situation with the oil price. "What got spoilt in the situation is the price of fuel, because the record (average) price of USD$110 per barrel is not just affecting the profitability of aviation, but it’s affecting the profitability of the entire system."

According to the latest IATA figures, passenger traffic in April grew 11.9 percent year-on-year while freight traffic grew 3.3 percent. But these numbers were distorted because April 2010 was hit by severe air traffic disruptions following the volcanic ash eruption in Iceland. Air freight, which accounts for about one-third of global trade by value, was down 6 percent from a post-recession peak in May last year.

"The speed-up of last year was because you have to build the inventories," Bisignani said. "Once you have rebuilt your inventories, you have to sell your stuff. Now we have slowed down because of that reason." The airline industry itself will remain profitable, but IATA plans to revise its estimates from the latest forecast of USD$8.6 billion and will likely lower that estimate.

"Since (the last forecast), much has happened to make us less optimistic," Bisignani said. "Eliminating all distortions (passenger traffic) is growing at 3-4 percent. Unfortunately, two things are spoiling the party, demand shocks and high jet fuel prices." IATA has 230 member airlines and will hold its annual general meeting in Singapore next week and will announce its latest forecasts at that time.

When the group made the industry-wide profit forecast of USD$8.6 billion in March, it assumed an average oil price of USD$96 per barrel for Brent crude, but the year-to-date average of the oil price now has reached USD$110 per barrel. Load factors, or the amount freight or passenger capacity used, are key to airline profitability. In April, the overall passenger load factor was 77.4 percent, but the freight load factor was only 46.5 percent.

"Maintaining the high load factors needed to support profitable growth will be difficult given the ongoing challenge of matching capacity to volatile demand," Bisignani said. Disrupted supply chains after the Japan earthquake and tsunami disaster, slower growth in China and political unrest in Africa contributed to the slow take-up of freight space, IATA said.

Bisignani said airlines had built up freight capacity last year believing a strong recovery was imminent. "That was slowed down because of the cost of fuel, the Middle East, and all those kind of things. And it takes some time to adjust capacity to the new reality," he said.

Few flights resume services in Europe

3 flights bound to New York, Dubai and Shanghai left Amsterdam on Monday night with at least 800 passengers. The EU Transport Commissioner is confident that some more flights might resume services on Tuesday. The Volcanic ash cloud over the Europe has crippled all major airlines and has stranded 1000's of passengers in different parts of the world. British Airways and Lufthansa had carried out test flight's and see no problems in resuming services. The British Airways sent a B747 for its test flight, on board the test flight was their CEO.
The bad news is that the volcano eruption in Iceland has strengthen and is moving East towards UK. IATA sees losses worse than post 9/11 because of this airspace closure in Europe