air issue no. 4 - april 2011

CANADIAN AVIATION

INTELLIGENCE REPORT

IN THIS ISSUE:

CEO Update – p 1

Prescreening: Is the Best Defence a Good

Offence? – p 2

Airline Data – p 4

Airport Data – p 7

News – p 8

Asia Report – p 14

European Report – p 15

Washington Report – p 16

InterVISTAS News – p 18

APRIL 2011

InterVISTAS’ Canadian Aviation Intelligence Report April 2011 Copyright ©2011 InterVISTAS Consulting Inc., all rights reserved. Page 1

Gerry Bruno

CEO

CEO UPDATE April 2011

Welcome to the April 2011 edition of InterVISTAS Consulting Inc.’s Canadian Aviation Intelligence Report (CAIR). Below are some new projects that we are currently working on.

InterVISTAS in Conjunction with DHV Czech Republic to Undertake Global Accessibility Study InterVISTAS Consulting in collaboration with DHV Czech Republic was selected by the City of Brno, Czech Republic to undertake a Global Accessibility Study for the region. InterVISTAS’ role in the project will be to assess the air access to the southern part of the country and develop recommendations for improvement.

InterVISTAS to Conduct a Legal and Regulatory Review for the Civil Aviation Department of the Bahamas InterVISTAS has been asked to undertake a legal and regulatory review for the Civil Aviation Department of the Bahamas. This will entail working with the Director of Civil Aviation and the Bahamian Attorney General to ensure full ICAO compliance of their legal and regulatory infrastructure for aviation oversight.

InterVISTAS to Conduct a Safety Audit of Iraqi Civil Aviation Oversight System with Tim Neel & Associates Boeing has approved a comprehensive safety audit of the Iraqi Civil Aviation Oversight System to be conducted by InterVISTAS, with Tim Neel & Associates. The initial project will be comprised of a 5-day on-site audit in Baghdad and drafting of a comprehensive audit report and findings.

InterVISTAS to Conduct Regina Air Cargo Assessment InterVISTAS Consulting will be conducting an air cargo assessment for Regina International Airport. Given the growth and changing nature of the Saskatchewan economy in recent years, the airport authority feels it is timely to re-examine the air cargo potential of the region. InterVISTAS conducted the airport’s previous air cargo study back in 2001.

The April 2011 CAIR Line-Up In this month’s publication, our feature article is on airport security pre-screening. Our regular monthly columns are as follows:

Asia Report

European Report

Washington Report

We hope you enjoy this issue.


Aaron Beeson

Manager, Policy, Borders and Security

PRESCREENING: IS THE BEST

DEFENCE A GOOD OFFENCE? April 2011

As the threat risk to aviation evolves, many would argue they need to go on the offensive and pre-screen passengers before they arrive at a Port of Entry. In response, public and private entities are developing and implementing new solutions that utilize advance information and enhanced intelligence in coordination with the traditional Port of Entry inspection. Further, each country has different risks and issues that need to be evaluated in order to understand the solution that is best suited to their respective needs and limitations.

A particular system that is growing in popularity and benefit is the SITA iBorders Advance Passenger Processing (APP) solution. APP provides an interactive pre-screening solution for all passengers entering (or exiting) a country which enables the respective government to issue a board/no-board directive to airlines. Currently, APP is operating in 6 different countries around the world which each face a unique risk environment; Australia, New Zealand, South Africa, Bahrain, Kuwait and Qatar. Of particular note is the ability to deliver the system in advance of big-events; Sydney 2000 Summer Olympics, 2003 Bahrain Grand Prix and most recently the 2010 FIFA World Cup in South Africa.

The only system more advanced in the area of pre-screening passengers is that of the US Preclearance program which currently operates in Canada, Ireland, Aruba, Bahamas and Bermuda. However, the ability to physically station Border Inspection officials in a foreign country is a luxury that few countries can afford due to traffic volumes and the corresponding costs of stationing Officer's abroad.

With the integrated APP solution, when a passenger checks-in for their flight, their passport information is transmitted via the SITA network to the respective government system to validate against government records on the passenger eligibility to enter (or exit) the country. In response, a real-time board/no-board directive is issued back to the carrier for each traveller. In the event an issue arises (e.g. denied passenger confirmation, uncertainty or data entry error), the carriers' can contact a 24/7 Operations Centre each government operates to handle and respond to carrier inquiries.

The other option is to use an online carrier portal that was developed with small carriers in mind. Through the portal, carriers have the ability to input individual traveller details or a batch submission for all travellers.

In both circumstances, the required traveller information is the standard information contained within the Machine Readable Zone (MRZ) of the passport; full name, date of birth, gender, travel document type, nationality, travel document number, issuing state and expiry date. Fortunately, unlike the ongoing and lively debate on privacy issues surrounding Passenger Name Record (PNR), APP information is not as sensitive. That being said, proper safeguards and policies need to be in place to ensure the data is not being mishandled.


PRESCREENING: IS THE BEST

DEFENCE A GOOD OFFENCE? –

CON’T In response to the particular risk or issues that the country faces, the APP system is adaptable to process government records/databases as required. For example a government can elect to integrate:

National passport and/or visa issuance records to ensure that no national passports or foreign visas are being used which were not properly issued by the government;

National stop list to ensure that known undesirable individuals are not permitted to board their flight and thus have the opportunity to inflict harm during the flight (e.g. Umar Farouk Abdulmutallab on 25 December 2009) or upon arrival at the port-of-entry;

On-demand specialist lists which can be in response to major event occurrences that are upcoming and attract a particular set of undesirables (e.g. G-20 Summits);

National watch lists in order to provide an advance warning to the appropriate authorities of an individual which is of interest to the nation; and

International databases (e.g. Interpol watch list) which can prevent internationally known undesirable individuals from other countries being transported to your nation.

Beyond the security value that the APP solution can deliver to a nation, it also is of benefit to the air carriers in that they can assure their passengers that no known undesirable traveller is on-board. Further, because an individual without proper documentation is denied boarding, the air carrier is no longer liable for the penalties and cost of repatriation they otherwise would have realized if the passenger arrived at the intended Port of Entry.

Passengers realize the greatest benefit in the form of the enhanced security they can expect as well as the reduced number of inadmissibles that delay the Port of Entry processing flow.

Unlike PNR, which assists government in the identification of potential undesirables, APP enables them to respond effectively and efficiently to known individuals or circumstances. In order for APP (or any other border control system for that matter) to be successful, government must maintain accurate, up to date and consistent databases that can be used to validate national travel documents and restricted individuals. As we witnessed with Umar Farouk Abdulmutallab, if intelligence is not appropriately updated or shared with the responsible border systems, the best offence is not provided an opportunity to be the best defence.


AIRLINE DATA – CANADA Traffic and Load Factors on Canada’s Major Air Carriers

March 2011

Air Carrier

Passenger Traffic Revenue Passenger

Kilometres

Capacity Available Seat Kilometres

Load Factor

% Change over 2010

% Change from 2009

% Change over 2010

% Change from 2009

Change over 2010

Change from 2009

Air Canada1 +4.2% +14.2% +7.6% +15.9% -2.6pts

(to 79.5%) -1.2pts

(from 80.7%)

Domestic -1.2% +2.2% +0.7% +2.9% -1.5pts -0.6pts

International & Charter

+6.4% +19.5% +10.4% +21.6% -3.0pts -1.3pts

WestJet +13.3% +24.6% +12.1% +20.4% +1.0pts

(to 84.8%) +2.9pts

(from 81.9%)

Analysis:

Air Canada’s system-wide traffic increased by +4.2% and available capacity increased by +7.6% in March 2011 compared to March 2010.

While Air Canada’s domestic traffic decreased (-1.2%) year-over-year, available capacity increased slightly (+0.7%). This led to a decrease in domestic load factor (-1.5 percentage points to 80.0%).

Both Air Canada’s international traffic (+6.4%) and available capacity (+10.4%) grew year-over-year. The Atlantic region was the only region to experience a decrease in traffic (-2.3%).

WestJet reported a growth in both traffic (+13.3%) and available capacity (+12.1%) in March 2011 over March 2010. The carrier’s load factor increased by +1.0 percentage points (to 84.8%) year-over-year.

1 Air Canada Mainline consists of all Air Canada operations with the exception of Jazz.


AIRLINE DATA – U.S. U.S. Airlines Release March 2011 Traffic Figures

Airline Traffic (RPMs – millions)

Capacity (ASMs – millions)

Load Factor

2,626

7.1%

3,142

4.2%

83.6%

2.3 pts

789

18.8%

1,112

20.4%

71.0%

0.9 pts

1,2

17,380

2.2%

21,773

2.1%

79.8%

3.5 pts

10,661

0.8%

13,287

2.6%

80.2%

1.5 pts

16,144

0.5%

20,263

6.2%

79.7%

4.5 pts

1 5,098

3.9%

6,111

3.6%

83.4%

0.2 pts

1,833

5.2%

2,215

6.8%

82.8%

1.0 pts

Notes: 1. Load factor includes scheduled service only. 2. Consolidated results for United Continental Holdings. Sources: Carrier traffic reports.


AIRLINE DATA – INTERNATIONAL International Airlines Release March 2011 Traffic Figures

Airline Traffic (RPKs – millions)

Capacity (ASKs – millions)

Load Factor

1

16,951

1.0%

21,558

3.5%

78.6%

1.9 pts

2

15,558

0.3%

21,154

7.5%

73.5%

5.3 pts

9,064

11.9%

12.364

13.9%

73.3%

5.2 pts

3, 4

7,977

5.1%

10,244

7.2%

77.9%

1.6 pts

6,884

3.6%

9,401

6.4%

73.2%

7.6 pts

4

4,355

23.3%

6,306

22.5%

69.1%

0.7 pts

5

7,956

1.6%

10,346

9.8%

76.9%

8.8 pts

1. Includes Martinair. 2. Includes Lufthansa Passenger Airlines, SWISS from July 2009 onwards, British Midland from Sep 2009 onwards and Austrian Airlines. 3. Includes Qantas Domestic, QantasLink, Jetstar Domestic, Qantas International, Jetstar International, and Jetstar Asia. 4. Traffic results are for February 2011 – March 2011 results are not yet posted. 5. Includes Cathay Pacific and Dragonair.

InterVISTAS’ Canadian Aviation Intelligence Report April 2011 Copyright ©2011 InterVISTAS Consulting Inc., all rights reserved.

Page 7

Summary of Total Year-Over-Year Passenger Traffic Performance at Selected Canadian Airports

Toronto Vancouver Montréal Calgary Edmonton Ottawa Winnipeg Halifax Victoria Kelowna Saskatoon Regina

St. John’s

2010

February 0.0% +3.4% +0.9% +1.0% -2.7% +5.4% -3.6% +0.9% -6.8% -1.3% +5.8% +11.7% +4.1%

March +4.1% +3.0% +3.3% +5.0% +1.2% +8.1% +1.2% +5.8% +4.6% +4.4% +5.6% +13.5% +10.9%

1st Quarter +1.2% +1.5% +1.7% +2.8% -1.0% +6.2% -1.5% +2.9% -0.5% +4.4% +6.2% +11.9% +6.8%

April +2.7% +2.3% +3.6% +0.1% -3.8% +5.0% -4.4% +0.5% -1.6% +3.4% +4.9% +9.7% +9.3%

May +8.2% +7.3% +9.1% +7.5% +3.7% +3.9% +1.4% +5.0% +1.5% +0.3% +9.5% +11.0% +8.4%

June +7.9% +8.2% +11.4% +7.6% +3.8% +8.2% +2.4% +1.6% +0.7% -11.7% +6.4% +8.3% +11.2%

2nd Quarter +6.3% +6.0% +8.1% +5.0% +1.1% +5.7% -0.2% +2.8% +0.2% -3.0% +6.9% +9.6% +9.7%

July +7.3% +4.7% +7.1% +5.9% 0.0% +6.9% +2.4% +6.9% +0.8% +3.4% +2.8% +11.6% +12.0%

August +4.7% -0.3% +5.3% +1.1% -1.1% +6.7% -2.5% -1.6% -2.6% +4.1% +3.0% +6.3% +6.0%

September +6.8% +3.0% +10.3% +3.3% +2.1% +3.9% +1.9% -0.2% -2.8% -0.5% +5.1% +3.6% +1.4%

3rd Quarter +6.2% +2.4% +7.4% +3.4% +0.2% +5.8% +0.5% +1.6% -1.6% +2.5% +3.6% +7.1% +6.7%

October +8.6% +7.3% +8.1% +3.3% -1.8% +2.1% -1.0% +0.2% -2.0% +3.0% +2.2% +4.9% +4.4%

November +6.2% +5.8% +8.2% +8.1% +1.2% +7.1% +2.2% +3.9% -3.6% -6.1% +5.0% +9.5% +6.3%

December +5.8% +3.0% +6.0% +0.4% -2.2% +5.6% -0.6% +7.2% -3.0% +2.4% +3.3% +14.9% +8.8%

4th Quarter +6.9% +5.3% +7.4% +3.8% -1.0% +4.9% +0.1% +3.5% -2.8% -0.2% +3.5% +9.8% +6.3%

2011

January +6.8% +3.0% +8.5% +1.9% +0.7% +3.2% -2.7% +4.0% +1.6% -1.9% -2.6% +3.9% +1.9%

February +4.6% -3.5% +5.0% -1.2% +0.3% +3.2% -2.2% +12.3% +1.5% +4.9% -0.3% +2.4% +4.8%

Source: Transport Canada and individual airports’ traffic reports. Note: Subject to revision.


NEWS AIR CANADA UPDATE

AIR CANADA VACATIONS LAUNCHES FREE MOBILE APPLICATION

On 12 April 2011, Air Canada Vacations launched a free mobile application. The mobile application allows customers to access flight-related

information, such as Air Canada Vacations bookings, flight tracking notifications and online check-in using their mobile devices. It also offers vacation-planning features, such as Air Canada Vacations' Top 10 Deals of the Day and a search engine for vacation packages and destinations. Air Canada Vacations is the first Canadian tour operator to offer a free mobile application.

AIR CANADA TO LAUNCH SEPARATE LOW-COST CARRIER

According to a letter sent by Air Canada to the Air Canada Pilots Association as part of negotiations on a new contract, the carrier has been

developing business plans to launch a separate low-cost carrier (LCC). The LCC will offer services to popular travel destinations in Europe, Mexico, and the Caribbean. Its fleet will consist of four Boeing 767 aircraft and six Airbus A319 aircraft at the start, with plans of increasing the fleet to up to 50 aircraft. The letter was obtained by The Globe and Mail and other Canadian newspapers; however, it has not been confirmed by Air Canada or the Air Canada Pilots Association. Air Canada has launched two LCCs previously - Tango in November 2001 and Zip in September 2002. Tango has become the low-fare class on mainline flights, while Zip stopped offering services in September 2004.

AIR CANADA REACHES NEW CONTRACT AGREEMENT WITH AIR CANADA PILOTS ASSOCIATION

On 18 March 2011, Air Canada announced that it had reached a tentative new contract agreement with the Air Canada Pilots Association.

According to Canadian newspapers, the agreement allegedly includes the proposal of a separate LCC. However, Air Canada has not released details of the agreement, as it is still pending ratification votes from the Association and approval by the carrier’s board of directors. Air Canada is also negotiating contracts with the other unions that represent its flight attendants (CUPE) and its customer service agents (CAW).

WESTJET UPDATE

WESTJET BOEING 737 NEXT GENERATION AIRCRAFT NOT INCLUDED IN FAA INSPECTION

On 6 April 2011, WestJet advised that its Boeing

Next-Generation 737 aircraft is not included in the airworthiness directive (AD) issued by the Federal Aviation Authority (FAA). The AD was issued by the FAA and Boeing on certain 737-300/-400/-500 series aircraft after a fuselage rupture on a Southwest Airlines B737-300 caused the aircraft to depressurize on 1 April 2011. Inspections on Boeing Next-Generation 737 aircraft are not required under the AD. Since WestJet’s fleet comprises of 94 Boeing Next-Generation 737 aircraft, its fleet will not be included in the FAA inspection.


NEWSWESTJET UPDATE – CON’T

WESTJET INTRODUCES NEW VENTILATION SYSTEM ON ALL FLIGHTS

As an Aprils Fools’ Day prank, WestJet issued a

press release that indicated that in response to rising jet fuel prices, WestJet implemented a new ventilation system on all of its flights on 1 April 2011, as a new cost-saving measure. The carrier said new ventilation system makes use of air mixed with helium, which is expected to lighten the weight of the aircraft since helium is approximately 85% lighter than nitrogen and would generate approximately 3%-4% of savings in fuel costs on the carrier’s Boeing Next-Generation 737 aircraft. A video of the announcement can be found on YouTube.

WESTJET DONATES $25,000 TO THE CANADIAN RED CROSS FOR JAPAN RELIEF EFFORTS

On 23 March 2011, WestJet donated $25,000

to the Canadian Red Cross to support the organization’s relief efforts in Japan following the earthquake and tsunami that affected the country on 11 March 2011. The carrier also entitled the week of 28 March 2011 “Japan Week” at all domestic airports across Canada. As part of the initiative, the carrier invited its customers at domestic airports to donate spare change for Japan relief efforts throughout the week.

U.S. AIRLINES UPDATE

US AIRWAYS PLACED FIRST IN U.S. DOT RANKING

According to the Air Travel Consumer Report released by the U.S. Department of

Transportation (DOT) on 5 April 2011, US Airways ranked first in on-time arrivals and baggage handling for the month of February compared to other hub-and-spoke carriers in the U.S. The carrier was ranked third-highest in customer satisfaction for the same month.

AMERICAN AIRLINES AND DELTA AIR LINES DECREASE SERVICES TO JAPAN

In light of low passenger traffic following the earthquake and tsunami that struck Japan, American Airlines and

Delta Air Lines have decreased their services to Japan. American Airlines suspended its daily flight from New York to Tokyo Haneda Airport and its daily flight from Dallas to Tokyo Narita Airport between 6 -26 April 2011. Delta Air Lines suspended services to Tokyo Haneda Airport from Los Angeles and Detroit on 23 March and 24 March, respectively, and is expected to resume these services in late May or early June.

AMERICAN AIRLINES LAUNCHES NEW INTERNATIONAL SERVICES

On 5 April 2011, American Airlines launched new international services. Its

new international services include flights between Los Angeles International Airport (LAX) and Shanghai Pudong Airport (PVG), and between New York John F. Kennedy International Airport (JFK) and Budapest Ferihegy International Airport (BUD) in Hungary. The new non-stop trans-Pacific service is the first flight to be offered to Shanghai by a U.S. airline, and will be offered daily using Boeing 777 aircraft. The nonstop service to Budapest from New York will be offered daily using Boeing 767 aircraft.


NEWSU.S. AIRLINES UPDATE – CON’T

CONTINENTAL AIRLINES ANNOUNCES CODESHARE AGREEMENT WITH LOT POLISH AIRLINES

Continental Airlines announced that it has

signed a codeshare agreement with LOT Polish Airlines on select flights between the U.S. and Europe. Since 2 April 2011, Continental Airlines has been placing its code on LOT’s flights from Warsaw Frederic Chopin Airport to London Heathrow, Frankfurt am Main and Amsterdam Schiphol. LOT has also been placing its code on Continental’s flights from Newark Liberty to Los Angeles, Miami, Orlando, San Francisco and Washington Dulles.

CARGO UPDATE

REVIEW OF COLOMBIA-CANADA FREE TRADE AGREEMENT COMPLETE

The Colombia Constitutional Court completed its review of the Colombia-Canada Free Trade Agreement (FTA), and the Colombian government expects the FTA to be implemented by 1 July 2011.

Bilateral trade between the two countries amounted to over $1.3 billion in 2010, which was a 38% increase over 2009. With improved access to markets through the FTA, the amount of trade is forecasted to increase even more. Under the agreement, tariffs on 98% of Canadian goods, such as wheat, beef, paper products, machinery and equipment, will be eliminated. Columbian exports to Canada, including coal, coffee, crude oil and cocoa, are also expected to increase once the FTA is implemented.

SOUTHWEST AIRLINES CARGO RANKS FIRST IN AIR CARGO EXCELLENCE (ACE) SURVEY

On 14 April 2011, Southwest Airlines Cargo announced that it ranked first in the "up to 199,999 tonnes" category in the

annual Air Cargo Excellence (ACE) Survey conducted by Air Cargo World. Furthermore, the cargo carrier also had the highest rating for customer service, performance, and value. Air Cargo World has been publishing the survey for the past six years and it includes a comparison of over 300 firms in the airline and freight forwarding industries.

FEDEX EXPRESS LAUNCHES NEW SERVICES TO SOUTH KOREA

On 28 March 2011, FedEx Express launched new services to Seoul, South Korea from the FedEx World hub in

Memphis, Tennessee. The new nonstop service will be offered four times a week and will be operated with Boeing 777F freighter aircraft. With the new service, customers will be able to deliver packages from the U.S., Canada and Latin America to Seoul within two to three business days. According to FedEx, deliveries to South Korea increased 35% (to $38.8 billion) in 2010 compared to 2009.


NEWSPEOPLE IN THE NEWS

US FAA AIR TRAFFIC ORGANIZATION COO HANK KRAKOWSKI RESIGNS

In light of serveral incidents involving air traffic controllers sleeping on the job, US FAA Air Traffic Organization (ATO) Chief Operating Officer (COO), Hank Krakowski, resigned on 14 April

2011. Mr. Krakowski has been serving as COO since 2007. He also has 30 years of experience at United Airlines, where he held key positions, including Vice President of Flight Operations and Vice President of Corporate Safety, Security and Quality Assurance.

US AIR TRANSPORT ASSOCIATION APPOINTS STEVE LOTT AS VICE PRESIDENT, COMMUNICATIONS

On 1 April 2011, the U.S. Air Transport Association (ATA) announced that Steve Lott has been appointed as Vice President Communications. Mr. Lott’s most recent position was Head of Communications for

North America for the International Air Transport Association (IATA), where he had served for the past four years. He also has more than a decade of experience as journalist and editor of two prominent global airline industry journals, Aviation Daily and Aviation Week & Space Technology.

LUFTHANSA GROUP EXECUTIVE VP-MARKETING AND SALES THIERRY ANTINORI RESIGNS

Lufthansa Group Board Member and Executive Vice President Marketing and Sales, Thierry Antinori, resigned on 31 March 2011. Mr. Antinori began his career with the carrier as an

area manager for Western and Southern Europe in August 1997.

SOUTHWEST AIRLINES PROMOTES MATT BUCKLEY TO VICE PRESIDENT CARGO & CHARTERS

On 25 March 2011, Southwest Airlines annouced that Matt Buckley has been promoted to Vice President Cargo and Charters. Mr. Buckley has been serving with Southwest Airlines since 1982, and started his

career as a Southwest Ramp Agent in Midland, Texas. Over the past 29 years, he has gained experience leading the carrier’s Cargo Management Group.

AIRPORTS UPDATE

REFURBISHED TERMINAL 2 OPENS AT SAN FRANCISCO INTERNATIONAL AIRPORT

On 14 April 2011, the refurbished Terminal 2 at the San Francisco International Airport

(SFO) opened to the public. The renovations at the 57-year-old terminal that began in 2008 amounted to approximately $383 million. The former terminal served as the international terminal at SFO until 2000, and the new rebuilt terminal will serve domestic flights operated by American Airlines and Virgin America. The 640,000 sq. ft. facility has 14 gates and a capacity for 5.5 million passengers each year. It also is the first airport terminal in the US to receive LEED (Leadership in Energy and Environmental Design) "gold" certification from the US Green Building Council.


NEWSAIRPORTS UPDATE – CON’T

VANCOUVER INTERNATIONAL AIRPORT RECEIVES BEST AIRPORT IN NORTH AMERICA AWARD

On 30 March 2011, it was announced at the 2011 World Airport Awards held in Copenhagen that

Vancouver International Airport (YVR) received the award for best airport in North America. This is the second consecutive year that YVR is receiving the top airport award in the region. It was followed by Cincinnati/Northern Kentucky International Airport in second place, and Denver International Airport in third place. The survey includes an assessment of 39 different airport service and product factors, such as check-in, arrivals and transfers. For this year’s awards, 11.4 million questionnaires were completed at over 240 airports. YVR also placed second in the Staff Service Excellence Award for North America.

VANCOUVER AND TORONTO AIRPORT HOTELS WIN AWARDS

The Vancouver and Toronto airport hotels won awards at the 2011 World Airport Awards held in Copenhagen on 30 March 2011. The Fairmont Vancouver Airport Hotel

received the award as the Best Airport Hotel in North America, and ranked in fifth-place compared to other airport hotels worldwide. The Sheraton Gateway Toronto Airport Hotel was recognized as the ninth best airport hotel in North America. The awards were based on a survey conducted by Skytrax. It covered over 194 airport hotels around the world, and was completed by over 860,000 hotel guests.

BRUSSELS AIRPORT ANNOUNCES DEVELOPMENT PLAN FOR 2011-2016

On 17 March 2011, Brussels Airport (BRU) announced its

development plans for 2011-2016. The planned development at the airport is expected to cost approximately €460 million (US$669 million). According to the plans presented by the airport, its facilities will be expanded and upgraded within the next five years to meet the needs of passengers and to support the activities of airlines. However, the development plan does not include the construction of a low-cost terminal.

CHICAGO O’HARE INTERNATIONAL AIRPORT SIGNS MEMORANDUM OF UNDERSTANDING WITH AIRPORTS IN CHINA AND SOUTH KOREA

Chicago O’Hare International Airport (O’Hare) signed a memorandum of

understanding to become “Sister Airports” with four airports in China and South Korea last March 2011. Thes four airports were Beijing Capital, Shanghai Pudong, Hong Kong and Seoul Incheon. Through the partnerships, the airports will be able to share best practices on various areas, including airport management, customer service and information technology.


NEWSOTHER NEWS

COUNCIL OF TOURISM ASSOCIATIONS OF BC CHANGES NAME TO TOURISM INDUSTRY ASSOCIATION OF BC

The Council of Tourism Association of

BC (COTA) announced at the 2nd Annual BC Tourism Leaders' Summit that it is changing its name to the Tourism Industry Association of BC (TIABC). The new name and new bylaws were voted for by members of the association during the two-day summit held in Nanaimo, BC on 11-13 April 2011. According to the association, the new name will represent the association better, with the addition of several tourism firms to the association over the past few years.

BOEING 787 DREAMLINER TEST AIRCRAFT COMPLETES 1,000 HOURS OF FLIGHT

On 13 April 2011, Boeing announced that

the 787 Dreamliner test aircraft sucessfully completed 1,000 hours of flight, which is a significant milestone in the aircraft’s testing program. According to the aircraft manufacturer, the aircraft has completed 90% of the testing needed before it received certification. Boeing is expected to deliver its first 787 Dreamliner to All Nippon Airways in the third quarter of this year.

AIRBUS ADVANCES A320NEO AIRCRAFT EXPECTED ENTRY-INTO-SERVICE DATE

On 6 April 2011, Airbus announced that it will be advancing the expected entry-into-service date of the A320neo aircraft to October

2015. The aircraft manufacturer had previously indicated that the aircraft entry-into-service would occur in 2016. Airbus will aslo commence the indsutrial development phase of the aircraft. It also announced that the lead development engine for the A320neo will be Pratt & Whitney’s PW1100G turbofan.


Doris Mak

Director, Special Projects

THE ASIA REPORT April 2011

Commercial services resume at Sendai Airport Commercial services resumed at Sendai Airport, following the earthquake and tsunami that affected Japan last 11 March 2011. The first domestic flight since the airport had closed landed on 13 April 2011. The domestic passenger service had originated in Tokyo Haneda and was operated by Japan Airlines using B737-800 aircraft. In addition, the first civil international flight landed the following day. The international flight was a cargo service that transported a mobile medical vehicle from Miami. It was operated by Volga-Dnepr Airlines, on behalf of the Bascom Palmer Eye Institute, using an AN-124-100 freighter aircraft.

China Southern introduces new services to New Zealand On 8 April 2011, China Southern Airlines launched new services to New Zealand from Guangzhou. The new non-stop service operates three times a week with Airbus A330 aircraft. The carrier plans to increase the frequency of service on this route beginning in October 2011. China Southern Airlines has plans to expand its international network with more than 110 additional flights within the next four years. This includes the addition of 40 weekly flights to Oceania by the end of 2011. Other Chinese carriers, such as China Eastern Airlines and Air China, also intend to introduce new international routes this year.

Cargolux and British Airways fined by New Zealand High Court in price-fixing case The New Zealand High Court has fined Cargolux and British Airways NZ$7.6 million (US$6.0 million) in total for their participation in price fixing activities between 2000 and 2006. Last 18 March 2011, the two carriers had agreed to plead guilty to the charges; thus, their fines were discounted for their cooperation in the country’s Commerce Commission’s proceedings. Qantas also reached a settlement with the Commission last month with regards to the price fixing case. Other carriers involved in the investigation that have not agreed to cooperate include Cathay Pacific, Air New Zealand, Korean Air Lines, Singapore Airlines Cargo, Japan Airlines, Malaysian Airlines, PT Garuda Indonesia, Thai Airways, Emirates and Singapore Airlines. The price-fixing case is scheduled to begin in May 2011.

Emirates ranks third-largest carrier in terms of available seat capacity Based on available seat capacity for March 2011, Emirates ranked as the third-largest carrier in the world. According to Innovata schedules, Emirates’ available seat capacity increased 9.9% to 16.9 billion available seat kilometres (ASKs) in March 2011 compared to March 2010. The largest and second-largest carriers in terms of available seat capacity for March 2011 were Delta Air Lines and American Airlines, with 28.4 billion ASKs (+7.6% year-over-year) and 21.8 billion ASKs (+3.7% year over year), respectively. Emirates was followed by United Airlines, whose available seat capacity decreased 0.6% over the same period to 16.0 billion ASKs. Emirates is expected to maintain its position as the third-largest for the month of April 2011.


Ian Kincaid

Vice President, Economic Analysis

THE EUROPEAN REPORT April 2011

British Airways doubles frequency of services to Rio de Janeiro, Brazil On 19 April 2011, British Airways announced that it will be doubling the frequency of its services from London to Rio de Janeiro, Brazil to six flights each week, in response to an increase in passenger demand. Nonstop flights from London Heathrow to Rio de Janeiro/Galeão-Antonio Carlos Jobim International Airport will now be offered every day of the week, except on Mondays.

Scandinavian Airlines to lease new B737-800 New Generation aircraft On 11 April 2011, Scandinavian Airlines (SAS) announced that it will be leasing five new B737-800 New Generation aircraft from GE Capital Aviation Services (GECAS). Furthermore, under the memorandum of understanding signed by the two parties, SAS will also be leasing 12 B737-700 aircraft from GECAS. The new aircraft will be replacing the nine MD-80 and 11 B737 Classic aircraft that are based in Stockholm-Arlanda and Oslo. In addition, SAS will be replacing its 17 MD-80 aircraft based at Copenhagen with A320 aircraft. SAS’ current fleet based in Oslo and Stockholm comprises 67 B737 New Generation, 11 B737 Classic and nine MD-80 aircraft, and its current fleet based in Copenhagen consists of 12 A320 and 17 MD-80 aircraft.

European Commission to review air passenger rights regulation On 11 April 2011, Siim Kallas, Vice-President of the European Commission responsible for transport, announced that new measures will be implemented to increase the awareness and improve the enforcement of the air passenger rights Regulation 261. Kallas also announced that he intends to conduct a review of the regulation with stakeholders to clarify key issues, including liability limitations, mishandled luggage and flight re-scheduling. The announcements followed the release of the Commission’s review of the regulation over the past six years and of the regulation on passengers with reduced mobility.

Lufthansa expands U.S. flights served by A380 aircraft On 31 March 2011, Lufthansa announced that an additional U.S. destination from Frankfurt will be served by the carrier’s A380 aircraft – Miami, Florida. The flight between Miami and Frankfurt will be operated on a daily basis beginning 10 June 2011. It will be the first A380 to operate at Miami International Airport. Lufthansa has already announced that it will be operating its A380 aircraft on flights to five other destinations, including New York John F. Kennedy International Airport and San Francisco International Airport.

Air France-KLM and Delta Air Lines joint venture launches new international services Air France-KLM, together with Delta Air Lines through a joint venture agreement, will launch 14 new international services. The new services under the trans-Atlantic joint venture include nonstop flights from Miami to London Heathrow and Amsterdam Schiphol and from Orlando to Paris Charles de Gaulle. The nonstop flight from Miami to London will be operated by Delta Air Lines on a daily basis using B767-400 aircraft, and the nonstop flight from Miami to Amsterdam will be operated by KLM four times a week using MD-11 aircraft, while the nonstop flight from Orlando to Paris will be operated by Air France three days weekly using B777-300ER aircraft.


Steve Martin

Senior Vice President

THE WASHINGTON REPORT April 2011

DOT issues new consumer protection rules The U.S. DOT issued its new final rule on airline passenger protections that expands on the consumer protections issued by the Department in 2009. Those rules prohibited U.S. airlines operating domestic flights from permitting an aircraft to remain on the tarmac for more than three hours, with exceptions for safety, security and air traffic control related-reasons. The new rules add additional consumer protections – particularly concerning various hidden fees and charges – and extend to cover foreign airlines that operate into the U.S.

The Air Transport Association issued a statement saying that the industry supports increased communication and full transparency. “We share the DOT goal of continuously improving the customer experience and our member airlines will implement the new rules as efficiently as possible.” Noting that airlines have already made many service improvements, including prompt delay notification, one-way fare advertising, and irregular-operation contingency plans, ATA said that market forces rather than regulations are already providing customer benefits.

Highlights of the new rules include:

Lost Bags and Bag Fees. Airlines will be required to refund any fee for carrying a bag if the bag is lost. Airlines will also be required to apply the same baggage allowances and fees for all segments of a trip, including segments with interline and code share partners.

Full Disclosure of Additional Fees. Airlines will have to prominently disclose all potential fees on their websites, including fees for baggage, meals, cancelling or changing reservations, or advanced or upgraded seating. DOT’s new rule announced that it will issue a supplemental notice of proposed rulemaking later this year that would require that ancillary fees be displayed at all points of sale.

Bumping. The rule doubles the amount of money passengers are eligible to be compensated for in the event they are involuntarily bumped from an oversold flight. Currently, bumped passengers are entitled to cash compensation equal to the value of their tickets, up to $400, if the airline is able to get them to their destination within a short period of time (i.e., within 1 to 2 hours of their originally scheduled arrival time for domestic flights and 1 to 4 hours of their originally scheduled arrival time for international flights). Bumped passengers are currently entitled to double the price of their tickets, up to $800, if they are delayed for a lengthy period of time (i.e., over two hours after their originally scheduled arrival time for domestic flights and over 4 hours after their originally scheduled arrival time for international flights). Under the new rule, bumped passengers subject to short delays will receive compensation equal to double the price of their tickets up to $650, while those subject to longer delays would receive payments of four times the value of their tickets, up to $1,300. Inflation adjustments will be made to those compensation limits every two years.

Tarmac Delays. The new rule expands the existing ban on lengthy tarmac delays to cover foreign airlines' operations at U.S. airports and establishes a four hour hard time limit on tarmac delays for international flights of U.S. and foreign airlines, with exceptions allowed only for safety, security or air traffic control-related reasons.


THE WASHINGTON REPORT –

CON’T Additionally, DOT states that the rule will make air travel simpler and easier in other ways, including:

Requiring airlines to allow reservations to be held at the quoted fare without payment, or cancelled without penalty, for at least 24 hours after the reservation is made, if the reservation is made one week or more prior to a flight's departure date.

Requiring airlines to promptly notify consumers of delays of over 30 minutes, as well as cancellations and diversions. This notification must take place in the boarding gate area, on a carrier's telephone reservation system and on its website.

Banning post-purchase fare increases unless they are due to government-imposed taxes or fees, and only if the passenger is notified of and agrees to the potential increase at the time of sale.

Requiring more airlines to report lengthy tarmac delays at U.S. airports with DOT, including data for international flights and charter flights.

According to DOT, most provisions of the rule will take effect 120 days after its publication in the Federal Register.


INTERVISTAS NEWS

Aaron Beeson Promoted to Manager, Policy, Borders and Security

InterVISTAS is pleased to announce that Aaron Beeson has been promoted to Manager, Policy, Borders and Security, effective immediately. In his expanded role, Aaron will assume greater responsibility for transportation and trade policy projects, while continuing to build on his experiences on border & security issues. He has demonstrated a greater role in delivering projects within the Border & Security practice and continues to build a good network of contacts in North America, Europe and now South Africa. This is Aaron’s third promotion since joining InterVISTAS as a Project Analyst in 2008.

Alex Welch Promoted to Manager, Route Development

InterVISTAS is pleased to announce that Alex Welch has been promoted to Manager, Route Development, effective 1 April 2011. In his new role, Alex will assume increasing client management responsibilities. He has become recognized by both airports and airlines for his professionalism and strategic thinking in network planning and route development. This is Alex’s third promotion since joining InterVISTAS in the summer of 2007 as a Project Analyst (and previously as a summer student in 2006).

Celina Ramirez Promoted to Senior Analyst

InterVISTAS is pleased to announce that Celina Ramirez has been promoted to Senior Analyst, effective 1 May 2011. Since joining InterVISTAS in March 2010, Celina has demonstrated excellent capability in conducting analyses in airport economic impact studies and research for various transportation related studies.

InterVISTAS Upcoming Speaking Engagements

Dr. Mike Tretheway, President, InterVISTAS Consulting Inc., Executive Vice President and Chief Economist, InterVISTAS Group

Marine Pilotage Association: Halifax, NS – 6 July 2011

Dr. Tretheway will be presenting on the status and future of economic and safety regulation, in general, and of marine transport in particular.

Kevin Schorr, Vice President, Air Service Development

Mississippi Gulf Coast Development Summit: Gulfport, MS – 12-13 May 2011

Mr. Schorr will be presenting the results of the GPT air service strategic plan update.


InterVISTAS’ Canadian Aviation Intelligence Report is a collection of information gathered from public sources, such as press releases, media articles, etc., information from confidential sources, and items heard on the street. Thus, some of the information is speculative and may not materialise.

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INTERVISTAS NEWS – CON’T

Mark Haneke, Vice President, Network and Strategic Planning

Terrapin Low Cost Airlines World Americas Conference: Miami, Florida – 3-4 May 2011

Mr. Haneke will be participating as a panel moderator on “Maximizing Passenger Yields with Effective Route Development Strategies”.

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air issue no. 4 - april 2011

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