27 January 2009

ACCC final decision rejects Air Canada/Air New Zealand commercial alliance

On 27 January 2009 the Australian Competition & Consumer Commission (ACCC) issued its final decision and a statement announcing that it was rejecting the application from Air Canada and Air New Zealand to enter into a close commercial alliance (see previous post).

Air New Zealand has released a statement NEW reacting to the decision.

Reports on the decision have appeared in:
Robert Stockdill, author of the Flying High NEW weblog for Business Spectator, has been a critic of both the draft and final ACCC decisions in posts dated 25 November 2008 NEW and 28 January 2009 NEW.

25 January 2009

Container rates for Asia to Europe hit zero

On 14 January 2009 the Telegraph reported that the rate for shipping a container from Asia to Europe by sea had dropped to zero (see previous post). It would appear that there is a massive decline in exports out of North-East Asia.

Latest Air New Zealand fuel hedging position released

On 23 January 2009 Air New Zealand released its fuel hedge position as at 22 January to the stock exchanges in Australia and New Zealand (HT to the revived Anti-Dismal weblog). Platts reported on the announcement. (See previous post.)

24 January 2009

A third runway for London Heathrow?

In all the coverage of the UK Government's decision announced on 15 January 2009 to allow the go ahead of a process to construct a short third runway for Heathrow airport (LHR)(the Guardian, for example, has extensive coverage and GreenAir has a comprehensive report NEW with links), there has been some interesting analysis that goes beyond the expected reporting of NIMBYism and the kind of band-wagon environmentalism that saw the doors of the Department for Transport in London broken (the planned Heathrow expansion is certainly a lightning rod for wider concerns about climate change).

For example, anna.aero has analysis dated 23 January 2009 showing amongst other things the decline in the share of domestic air travel through Heathrow.

In a 27 May 2008 article The Economist took a critical look at the proposal.

The Liberty Scott weblog argues that transit traffic would simply fly from other airports if Heathrow is not expanded. On 16 January 2009 Aviation Week reported NEW that Frankfurt Airport NEW has just gained court approval for a fourth runway (for landings only)(see Information on Airport Expansion NEW for more details).

One of the more interesting plans is to also directly link Heathrow airport into the high-speed rail services network as is already the case with some other major airports around the world. This idea of creating a rail "hub" at Heathrow was the subject of a proposal by Arup, an engineering consultancy, announced on 16 May 2008.

Even here though there are questions with a 23 January 2009 posting on The Economist's Gulliver weblog looking at emissions from high-speed rail compared with aviation and pointing to a 22 January 2009 article in the Guardian by Fred Pearce.

Singapore concludes "open skies" agreements with the Czech Republic and Iceland

In separate media statements the Civil Aviation Authority of Singapore (CAAS) announced on 19 and 23 January 2009 that Singapore has negotiated "open skies" type air services agreements with the Czech Republic (Straits Times report) and separately with Iceland (Straits Times report). The latter includes an exchange of seventh freedom rights.

This brings the number of "open skies" partners Singapore has to more than 30, 16 of which are with European Union member states.

11 January 2009

Primary history sources on Aeropolitics in the 1940s

Those with an interest in international aeropolitics will know that some of the most critical decisions were made in the 1940s, during and in the aftermath of the Second World War.

This was the period that saw in 1944 the drafting of the Chicago Convention, that lead to the founding of the International Civil Aviation Organization (ICAO). Three of the key players in Chicago were the United Kingdom, the United States and Canada. In total 54 countries participated with the Soviet Union and Saudi Arabia deciding not to attend, Argentina not being invited, and Germany and Japan excluded.

It also saw the negotiation of bilateral air services arrangements UPDATED (note in particular the "resolution" at the end of the document) between the United Kingdom and the United States in Bermuda from 15 January to 11 February 1946. Bermuda 1, as it is now called, become a model for thousands of subsequent bilateral air services arrangements as attempts to establish a widely-accepted multilateral agreement covering all then five "freedoms of the air" failed.

With a particular interest in what happened about the "fifth freedom", a major subject of contention in Chicago, and limits on foreign ownership and control of international airlines (El Salvador was very far sighted on this at Chicago but gained no support), I have recently been hunting on the web for some of the primary history sources for this period and have found some interesting "nuggets", examples of which follow.

ICAO has now made available some of the original documents from the Chicago Conference (1 November - 7 December 1944) relating to its founding.

From the United States:

  • A large 259-page collection of papers relating to the Chicago Conference, including the lead up to it
  • A 27 June 1949 secret bulletin reporting on post-Bermuda British Commonwealth developments that were of concern to the United States
  • An oral history interview with George P. Baker
From the United Kingdom:

  • A 12 February 1946 oral question and answer in the House of Lords about the outcome of the Bermuda negotiations
  • A 21 February 1946 report from Flight magazine on the outcome of the Bermuda negotiations
  • The Hansard transcript of the 19 December 1946 House of Lords debate of the Air Navigation Bill that was among other things to implement to Chicago Convention
From Canada (there is more material available for the late 1940s in the civil aviation sections of Documents on Canadian External Relations):

  • A memorandum dated 13 February 1946 assessing the implications of the Bermuda agreement for Canada
From Australia (there is more material available in Documents on Australian Foreign Policy which has good indicies):

  • A secret cable from London on 2 January 1944 reporting on the UK government's assessment of the likely United States position
  • A cable from Hodgson (Secretary, Department of External Affairs and member of the Australian delegation) on 28 November 1946 reporting on progress at the Chicago Convention
  • A secret cable from Drakeford (Minister for Civil Aviation and head of the Australian delegation) on 5 December 1944 asking whether to sign the Chicago Convention
Australia, supported by New Zealand, had what was in retrospect one of the most idealistic/bizarre proposals at Chicago.

I have come across a reference to an article by Dutch aviation historian Marc Dierikx, "Shaping world aviation. Anglo-American civil aviation relations, 1944-1946", in: Journal of Air Law and Commerce 57(1992) nr. 4, p. 795-840 and suspect that he has made use of many of these sources.

I will look to add some more to this posting when I find more sources.

10 January 2009

Using Twitter

I have been playing around now with the increasingly popular social networking site Twitter for a year having set up a Profile and linked it through to my Facebook page. Twitter asks "What are you doing?" and limits postings to 140 characters. Among other things, it can be used with TinyURL to give short pointers to other web sites. Mashable has a posting dated 24 May 2008 with information about additional Twitter tools.

I recently came across a good posting on Shane Richmond's blog at the Telegraph dated 6 January 2009 about how to use Twitter better.

As well as being useful for quick pointers from some aviation writers (for example, Jon Ostrower) I am following for the latest happenings, postings that have grabbed my attention have included:
  • From English comedy actor Stephen Fry currently visiting New Zealand while making a wildlife documentary: "A kakapo tried to shag the back of my leg. Mark was roughly shagged on the back of his neck. It's mating time for kakapo: anyone'll do x" and "Leaving Codfish Island this morning and heading for Queenstown. Kakapo made 1 last alarming attempt to ravish me on way to loo last night x"
  • From the software programmer Mike Wilson a.k.a. 2drinksbehind who attracted media attention after sending out a message on Twitter having just survived his second air crash, this one on the Continental B737 that burnt at Denver in late 2008: "Holy [Two expletives deleted] I wasbjust in a plane crash!" He has subsequently advised that although his laptop was destroyed he was able to extract data off its hard drive.
Just don't expect anything too profound to appear as part of my twitterings.

Mauritius air services arrangements summary

The Government of Mauritius has a seven-page summary of its bilateral air services arrangements (ASAs and MoUs) dated 18 February 2008 available on its web site. Mauritius, located in the Indian Ocean, had arrangements with 25 other countries. At the time it was planning to hold air services negotiations in 2008 with Argentina, Mozambique, Seychelles and Comoros.

British Airways sold its 10.5% shareholding in Air Mauritius, the country's flag carrier, in 2008.

08 January 2009

Bilateralism versus Multilateralism in Air Transport

I have been having a look at The Air Transport Review at the WTO: Bilateralism versus Multilateralism written by Cecilia Genevieve Decurtins as her thesis for a doctorate in international relations. She completed it at the Graduate Institute of International Studies in Geneva in 2007.

She uses negotiation theory to examine aspects of the first review carried out under the GATS Air Transport Services Annex held at the World Trade Organization in Geneva (see previous post). (The second review is currently underway.)

Decurtins highlights the positions taken by Australia, Chile, the European Union, New Zealand, Brazil, Canada, Japan and the United States, and examines the probable reasons why each country adopted the positions that it did.

As an active participant in the very small New Zealand delegation at the meetings concerned in Geneva, it is fascinating to see what an outsider made of them and the related papers. It is also an excellent example of how open the formal part of the WTO processes can be.

Decurtins has worked at IATA and knows her subject well.

New research into benefits of liberalising air services arrangements

New econometric research is starting to be published on the web that uses the World Trade Organization's QUASAR database which scores bilateral air services arrangements based on their key features. QUASAR is being developed by the WTO Secretariat and uses information from the thousands of air services agreements (treaties) deposited with ICAO (see previous post).

The abstract of a WTO staff working paper Liberalization of Air Transport Services and Passenger Traffic UPDATED by Roberta Piermartini from the WTO and Linda Rousova from the Munich Graduate School of Economics dated December 2008 states:

"Using a gravity-type model to explain bilateral passenger traffic, this paper estimates the impact of liberalizing air transport services on air passenger flows for a sample of 184 countries. We find robust evidence of a positive and significant relationship between the volumes of traffic and the degree of liberalization of the aviation market. An increase in the degree of liberalization from the 25th percentile to the 75th percentile increases traffic volumes between countries linked by a direct air service by approximately 30 per cent. In particular, the removal of restrictions on the determination of prices and capacity, cabotage rights and the possibility for airlines other than the flag carrier of the foreign country to operate a service are found to be the most traffic-enhancing provisions of air service agreements. The results are robust to the use of different measures of the degree of liberalization as well as the use of different estimation techniques."

Two working papers from an OECD economist focus on the results for APEC economies:
GEM is the Groupe d'Economie Mondial at Sciences Po in Paris.

The future stars of the economics profession?

I still remember reading twenty years ago in the UK weekly magazine The Economist, to which I have subscribed for many years, an article about who it considered the most promising young academic economists listing: Larry Summers, Jeffrey Sachs, Andrei Shleifer, Paul Krugman, Gregory Mankiw, Sanford Grossman, Alberto Alesina and Jean Tirole. They were very good picks, although I suspect that being selected for the list would have done no harm to their future careers.

The Economist repeated the exercise a decade later (17 December 1998) picking out: Michael Kremer, Edward Glaeser, Casey Mulligan, Steve Levitt, Caroline Hoxby, Glenn Ellison, Judith Chevalier, Wolfgang Pesendorfer, Timothy Feddersen, Matthew Rabin and David Laibson.

It has just done so for the third time (HT to Greg Mankiw). The latest article lists: Jesse Shapiro (Chicago), Roland Fryer, Esther Duflo, Amy Finkelstein, Raj Chetty, Iván Werning, Xavier Gabaix and Marc Melitz.

05 January 2009

Air New Zealand conducts biofuels experimental flight with B747

On 30 December 2008 an Air New Zealand B747-400 conducted a flight from Auckland using a 50:50 fuel mix of Jet A1 and biofuel to power one of its four engines (see a media release and here for details). The biofuel concerned came from the jatropha plant (see previous post). Boeing, Rolls Royce, Terasol Energy and Honeywell's UOP were involved in the test.

The test flight, which was said to be successful, received international media coverage including:

Enviro.aero (from ATAG) carried a number of blog postings (see here, Update, Update 2, Update 3 and Update 4).

04 January 2009

Boeing B787 deliveries delayed again as range drops

Just prior to Christmas Day 2008 Air New Zealand released a statement that it had been advised by Boeing that delivery of the B787-9 aircraft the airline has on order will not now commence until Q1 2013. The aircraft were initially expected to start to be delivered in late 2010.

One of the more revealing weblog scoops of 2008 was the publication by FlightGlobal's Jon Ostrower on 3 December 2008 of a presentation by Airbus on the B787. This raises a question mark over the final range of the B787, something that could significantly limit Air New Zealand's future route options (see previous post).

03 January 2009

New Zealand Commerce Commission taking action on international air cargo

On 15 December 2008 the New Zealand Commerce Commission issued a media release on legal action it is taking against 13 airlines:
  • Air New Zealand Limited
  • British Airways plc
  • Cargolux International Airlines S.A
  • Cathay Pacific Airways Limited
  • Emirates
  • PT Garuda Indonesia
  • Japan Airlines International Co Limited
  • Korean Airlines Co Limited
  • Malaysian Airline System Berhad Limited
  • Qantas Airways Limited
  • Singapore Airlines Cargo Pte Limited and Singapore Airlines Limited
  • Thai Airways International Public Company Limited
  • United Airlines Incorporated
relating to pricing practices and international air cargo.

This follows similar action by competition authorities in other jurisdictions.

Air New Zealand almost immediately issued a media release in response to the announcement.

"Outliers" by Malcolm Gladwell

I have recently finished the book "Outliers - the Story of Success" by Malcolm Gladwell. It was a quick and enjoyable read.

I was not so fast to read his first book "The Tipping Point" after its publication suspecting that other books I had read covered the point he was making better but in the end did not regret doing so either.

What first attracted me to buy Outliers was Chapter Seven "The Ethnic Theory of Plane Crashes". This focuses on cases where copilots sometimes have shown too much deference to the captains of the airliners leading to disastrous outcomes. Gladwell focuses on the terrible run of crashes that Korean Air had. He looks at something called the Power Distance Index (PDI) developed by Dutch psychologist Geert Hofstede as a partial explanation of why pilots from some cultures are safer than others, with a suggestion that those from New Zealand might be the safest (see page 209).

This led me to hunt on the web for some more serious reading on this subject and I came across a paper Culture, Error, and Crew Resource Management by Robert L. Helmreich, John A. Wilhelm, James R. Klinect, and Ashleigh C. Merritt from the University of Texas at Austin.

Other chapters also contained interesting ideas, some of which I could personally relate to. There are lessons for those interested in educational performance, particularly about the pay off from putting in hours of hard work to master mathematics, computer programming or music for example.

Reviews of Outliers have appeared in:

"Fire & Steam" by Christian Wolmer

I have recently finished reading "Fire & Steam - How the Railways Transformed Britain" by transport journalist Christian Wolmar.

It is a very good history of the development of rail transport in the United Kingdom. It is particularly interesting on the relationship between the rail industry and successive governments over the course of the nineteenth and twentieth centuries. It is a real lesson in the need to clarify objectives and not be surprised if an industry struggles when required to meet conflicting ones imposed by government. It is also a lesson in the complexities of the transport system.

One comment in the book in particular struck me as worth thinking about:

"... expenditure on roads has always been deemed to be investment, while rail spending has been classified as subsidy." (page 284)

Reviews of Fire & Steam have appeared in:
This book is clearly written by an advocate for rail but deserves to be read not just by rail enthusiasts.

"Traffic" by Tom Vanderbilt

I recently finished reading the book Traffic - Why we drive the way we do (and what it says about us) written by Tom Vanderbilt.

It was solid going but gave me an excellent insight into many of the issues my road transport colleagues at the New Zealand Ministry of Transport are grappling with, both on the safety and infrastructure sides of research and policy development, as we try to reduce the road toll and congestion.

The book is very good on the psychology of driving. The author also examines in some depth what we might regard as counter intuitive behaviour, like how removing traffic signs can make a road safer. His insights on cultural factors were also very interesting. Personally one of the key lessons I took out of the book is how unsafe it is to drive while talking on a cell phone, even a hands free one.

Reviews of Traffic have appeared in:
The author has a good web site including a weblog, How We Drive, relating to traffic issues.

Otago University research on New Zealand-related international aviation emissions being published

Exactly a year ago I posted on research by Otago University Physics Department academics Inga Smith and Craig Rodger. That research has now been accepted as a peer-reviewed paper, Carbon Emission Offsets for Aviation-Generated Emissions due to International Travel to and from New Zealand, to be published in the journal Energy Policy.

Last year we made contact and hosted them at the Ministry of Transport. It is proving to be a good example of how officials can cooperate with academia to address pressing public policy issues. Students from Otago are now working with us in research on emissions from international transport to and from New Zealand.

Another name for Jatropha is Black Vomit Nut

I have recently started following the Plane Talking weblog written by experienced Australian aviation journalist, Ben Sandilands.

In a 1 December 2008 post Ben notes that alternative names for the plant jatropha, a very promising source of biofuels for use in aircraft jet engines, are Black Vomit Nut and Bellyache Bush. Some how I can't see these plain English names catching on with airline industry public relations departments!

The post reports on comments made by Sebastian Remy, the head of alternative fuel research for Airbus, about the potential to grow jatropha, which is drought resistant, in Australia.