Further anti-trust action against British Airways

A 26 August 2007 article in the Sunday Telegraph gives a detailed account of the further anti-trust difficulties that British Airways is now in, involving price fixing of both cargo and passenger fuel surcharges, the latter with Virgin Atlantic and other airlines.

Philippines looking to hold air services negotiations with New Zealand and Singapore

An August 2007 story in the Manila newspaper, the Business Mirror, reports that the Philippines is looking to hold air services negotiations with New Zealand and Singapore in the near future.

Pacific Blue to start domestic operations in New Zealand

On 23 August 2007 details were announced by Brett Godfrey of domestic services to be operated by New Zealand-based Virgin Blue subsidiary, Pacific Blue. The initial operations will be on the AKL-WLG-CHC triangle commencing on 15 November 2007 with further destinations to follow. The aircraft to be used is the 180-seat Boeing 737-800.

With the airline being Australian-owned, this is a rare example of a cabotage service.

Air New Zealand responded almost immediately by dropping some of its fare levels. Pacific Blue will also be competing against Qantas subsidiary, JetConnect, which trades under the Qantas brand name.

I attended the launch in Wellington.

European paper on environment issues for ICAO Assembly

On 9 July 2007 the European Commission released a European working paper, "A comprehensive approach to managing aviation's environmental impacts," to be presented by Portugal at the triennial International Civil Aviation Organization (ICAO) Assembly (see previous post).

The 36th session of the Assembly is to be held in Montreal from 18 to 28 September 2007.

Japan and South Korea liberalise air services arrangements

Reports on 3 August 2007 in Bloomberg, Chosun Ilbo, Japan Today and Channel Newsasia outline the contents of new air services arrangements reached between Japan and South Korea. The exchange negotiated over two days last week in Tokyo includes a limited exchange of fifth freedom rights. Restrictions remain on access to the two slot-constrained Tokyo airports, Narita and Haneda.

These are the first such more open arrangements negotiated by Japan and clearly represent the implementation of a major change in policy (see previous post).

V Australia

Virgin Blue International Airlines Pty Ltd now has a trading name. On 25 July 2007 Virgin Blue announced that the proposed new international airline will be called V Australia (see previous post).

Canada and Iceland conclude "open skies" air services agreement

On 18 July 2007 the Canadian Minister of Transport announced the conclusion of a new bilateral "open skies" agreement between Canada and Iceland.

New Zealand's current air services negotiation priorities

In a 20 July 2007 speech to the annual conference of the Aviation Industry Association of New Zealand (AIA), the Minister of Transport Safety, Hon Harry Duynhoven, outlined some of New Zealand's current priorities for air services negotiations. These include holding negotiations with Canada, the European Union, the Philippines and Turkey.

Air New Zealand and the B787

A 16 July 2007 Herald article by David Stone points to the merits of the forthcoming B787-9 aircraft for Air New Zealand, noting the new non-stop route options from Auckland that will become available - he lists Bombay, Beijing, Johannesburg, Buenos Aires and Chicago. The airline now has eight of these aircraft on order.

Virgin Blue International Airlines application to US DoT

The application to the US Department of Transportation by Virgin Blue International Airlines Pty Ltd for an exemption and a foreign air carrier permit has now been posted on the web (the docket number is OST-2007-28705). Included is a diagram showing the structure of the Virgin Blue Group of Airlines.

Six B777-300ER aircraft have been ordered for use by the airline. The trading name of the airline has yet to be finalised with a short list having been publicised.

Scramble for London Heathrow runway slots

The Times of London has an article by Dominic O'Connell dated 1 July 2007 reporting on the high demand for slots at Heathrow airport following the signing of the new "open skies" air services agreement between the European Union and the United States. The grey market price is reported to have doubled since last year.

UK Government answer on stage two of the US/EU "open skies" negotiations

A 9 July 2007 story in Aviation Daily reports on the official UK position with respect to stage two of the EC/US "open skies" negotiations. The parliamentary question and answer given on 28 June 2007 by Gillian Merron MP is recorded in Hansard.

Standard Poodle family on front page of Wellington newspaper

A front page Dominion Post story reports on some strife involving the mother, father and sister of our two Standard Poodles.

Implications of the B787 for Air New Zealand

The New Zealand Herald carries an article by Liam Dann dated 9 July 2007 reporting on the implications of the new Boeing B787 for Air New Zealand. It quotes Group General Manager International Ed Sims from Air New Zealand as saying "If you put a blindfold on and tried to design the perfect aircraft for Air New Zealand, you couldn't come up with anything better than the 787."

Notable details include that the company is currently investigating 20 to 25 new routes and envisages launching around two new routes each year with more possible when the B787 is introduced.

The rollout of the Boeing B787

Sunday, 8 July 2007 (a little after 1030 on Monday New Zealand time) will see Boeing rollout the first new B787 aircraft. Already pictures of the aircraft in the paint shop have been published on the web. For me though the more significant event will be the first flight.

There will be massive media coverage of the rollout. I recommend having a look at a couple of blogs - those of Seattle Post-Intelligencer aerospace reporter James Wallace and of Boeing Commercial Airlines Vice President, Marketing, Randy Tinseth.

It is already clear that this aircraft and its engines have the potential to represent one of the major advances in the history of civil aviation technology. What I find stunning is that so many airlines have ordered the B787 even before its has flown - Air New Zealand was the second airline to do so back in 2004 and now has eight on order. The aircraft's combination of size and long range will make it particularly significant for remote countries like New Zealand and Australia.

Australia and Sri Lanka agree new air services arrangements

The Australian Minister of Transport and Regional Services, Mark Vaile, announced on 21 June 2007 new air services arrangements between Sri Lanka and Australia. A feature of the new arrangements is that there is no limit on cargo services.

Progress on implementing "open skies" in Africa

In a 5 June 2007 article Flight International reports on progress being made towards implementing "open skies" within Africa.

UK Office of Fair Trading sets deadline for action on air fare advertising

The Telegraph has a story dated 1 July 2007 that the United Kingdom Office of Fair Trading has set a 31 July 2007 deadline for action on misleading advertising of the cost of air travel by airlines and holiday companies (see previous post).

ASEAN Secretary General says progress towards regional "open skies" is slow

On 24 June 2007 Bloomberg reported comments by Association of South East Asian Nations (ASEAN) Secretary General Ong Keng Yong to a World Economic Forum meeting that progress on reaching a limited "open skies" air transport agreement covering routes between ASEAN capitals by 2008 was proving to be slow.

Canada and Kuwait conclude new air services agreement

On 17 May 2007 the Canadian Ministers of Transport and International Trade announced the conclusion of the first bilateral air transport agreement between Canada and Kuwait.

South Korea signs new air services arrangements with the Philippines

New air services arrangements have been signed between the Philippines and South Korea. A story dated 25 June 2007 carried by Yahoo, reports that the negotiations saw a large capacity increase to 19,000 seats per week for the airlines of each side.

A 21 June 2007 column in the Manila Standard Today outlines the Korean negotiating tactics. A opinion column dated 15 June 2007 in the Inquirer, highly critical of the Philippines delegation leader, Undersecretary Edward Pagunsan, suggests that there may have been considerable tensions within the Philippines delegation. A 7 June 2007 article in the Manila Times expands on this.

European Commission still seeking mandate to negotiate new air services agreement with New Zealand

A press release issued on 26 June 2007 ahead of a visit to New Zealand by European Commissioner for External Affairs, Benita Ferrero-Waldner, notes that "The European Commission is seeking a negotiating mandate from EU Member States to open talks on a more ambitious air transport agreement that would fully liberalize air services between the EU and New Zealand." (See previous post.)

Reported concerns about draft Indian civil aviation policy

A 26 June 2007 Times Now story outlines the concerns that some other Indian government agencies have about the draft civil aviation policy (see previous post).

Humans never domesticated cats - they adopted us

In a 29 June 2007 story the Washington Post reports on scientific research by Carlos Driscoll using genetics to determine that the origins of the domestic cat lie in the Near East.

European Parliament holding public hearing on including aviation in EU ETS

On 27 June 2007 the Committee on Transport and Tourism of the European Parliament is scheduled to hold a public hearing on including aviation in the European Union Emissions Trading Scheme. Papers for the meeting, including a 24 page draft report, are available here.

One of the speakers will be Andrew Steinberg, Assistant Secretary for Aviation & International Affairs from the US Department of Transportation.

Group of Ministers in India to consider draft civil aviation policy

A report dated 16 June 2007 in The Economic Times reports that a Group of Ministers will consider a draft civil aviation policy for India entitled "Vision 2020". A key issue is whether to reduce the five-year period of domestic services required before an airline from India can commence international operations.

China plans to liberalise domestic air transport

In an article dated 31 May 2007 China Daily reports that the Civil Aviation Administration of China (CAAC) intends to liberalise domestic air transport within China by 2010.

Scandinavian Airlines System licensed to serve New Zealand

The licensing of international airlines to serve New Zealand is done under the Civil Aviation Act 1990. Notification of the issue of new licences and those that have been amended appears in the weekly, official New Zealand Gazette.

Notice of the most recent international airline to be licensed, Star Alliance member Scandinavian Airlines System (SK), appeared on page 1507 of the 31 May 2007 issue of the Gazette. This follows its separate designation by Denmark, Norway and Sweden under their virtually identical bilateral air services agreements with New Zealand. SAS had announced last year its intention to code share on Thai (TG) operations to Auckland (AKL).

On the same page of the Gazette there is also notice that the licence held by Air China (CA) has been amended to permit the airline greater route and capacity flexibility when code sharing on a New Zealand airline.

Carbon Tax v Cap and Trade

An article dated 14 June 2007 in The Economist entitled "Doffing the cap" advocates for the use of carbon taxes rather than "cap and trade" to reduce CO2 emissions. Although there have been issues with how the European Union Emissions Trading Scheme (ETS) has been operating in practice, I did not think that this view in favour of such taxation was that widely shared by economists.

In any case, with respect to international aviation almost all international air services treaties prohibit the taxation of fuel.

On 8 May 2007 the New Zealand Minister Minister Responsible for Climate Change Issues, David Parker, announced that the New Zealand Government, having previously explored the option of a carbon tax, is now looking to introduce a "cap and trade" emissions trading scheme.

Canada-UAE air capacity restriction

An 8 June 2007 Aviation Daily article by Adrian Schofield reports that Emirates is to follow Etihad in commencing services to Canada. The article notes that Emirates would like to start daily services but the Canada-United Arab Emirates air services arrangements restrict services to six flights per week and Etihad is already using three of these.

Etihad started operating to Toronto via Brussels in October 2005 and from 2 June 2007 commenced non-stop services between Abu Dhabi and Toronto.

Paris Air Show 2007

This week sees the International Paris Air Show at Le Bourget, an event held every other year. As usual some major aircraft order announcements can be expected and there will be extensive coverage in the aerospace media.

In alternate years the focus of the aviation world is on the Farnborough International Airshow, held near London. I attended on a couple of days of the 1986 event.

More recently air shows in Dubai and Singapore have become more important events in the global aviation industry calendar.

Special Report on Air Travel in The Economist

This week The Economist magazine contains a special report on air travel entitled Fear of Flying with eight articles on the subject.

I have personally subscribed to The Economist for many years and keep all the back issues. For clear and concise writing on many of the subjects that interest me it has few if any equals.

UK Office of Fair Trading Threatens Action on Air Fare Advertising

On 16 June 2007 the BBC reported on the threat of action by the UK Office of Fair Trading against the advertising of air fares that exclude such items as fuel surcharges and per passenger taxes.

As noted in a 9 June 2007 post, such action has already been taken in New Zealand by the Commerce Commission.

US DoT gives final approval to Virgin America

On 18 May 2007 the US Department of Transportation gave its final approval for Virgin America to start service.

UK-New Zealand passenger travel by sea - avoiding sin?

Last year the Bishop of London, Richard Chartris, was reported in the Sunday Times on 23 July 2006, as part of the Church of England's "Shrinking the Footprint" campaign, to say that taking a holiday by air was a "symptom of sin". (Subsequently the Bishop was reported to have travelled to Wittenberg in Germany by train, no doubt using nuclear-generated electricity.) The attack on this view by Ryanair Chief Executive, Michael O'Leary, as reported in the Irish Independent on 27 July 2006, was particularly robust.

Concern about the environmental impact of international air transport on the rise, but the only alternative means of international passenger transport for remote countries like New Zealand, Australia and those in the South Pacific would be by sea. It is still possible, but not cheap, to travel between the UK and New Zealand by sea with container ships offering a limited number of berths to paying passengers (see, for example, UK firm The Cruise People), as well as a few cruise ships like the QE2 operating annual round-the-world cruises. Of course, modern ships also have an environmental impact.

It was during the 1960s that air travel effectively replaced travel by ocean passenger liner as the main means of long-distance international travel and with good reason. Few people can now afford the time (what economists would call an opportunity cost) to spend weeks at sea getting to somewhere that would only take hours by aircraft.

In the 1960s, in the pre-containerisation days, I recall in Dunedin with my step-grandfather, Haxton Matthews, going on board a Union Steam Ship Company freighter that took a few passengers and was still serving the New Zealand-India route. He had served in the Royal New Zealand Navy during the Second World War and was taking a short trip by sea up the New Zealand coast. More recently I flew with my late father in a light aircraft over the QE2 as she passed down the East Coast of Northland, New Zealand - she was a truely magnificent sight.

Airline fuel surcharges illegal?

The Times of London has been reporting recently on the use of fuel surcharges by airlines and in particular British Airways:

"Airline drives up price of holidays" 9 June 2007

"BA chiefs face extradition over 'price fixing'" 27 May 2007

"Walsh says sorry for BA’s breach of price-fix standards" 19 May 2007

"BA admits it breached price fixing rules" 18 May 2007

According to a BBC story on 14 February 2006, an Associated Press story on 15 February 2006 and an Asia Times story on 22 February 2006, competition authorities from the European Commission, United Kingdom, the United States and Korea were investigating this issue in relation to cargo rates and searching airline offices.

A large number of class-action law suits targeting airlines followed in the United States, Canada and Australia. The Australian case taken by law firm Maurice Blackburn Cashman was reported in International Herald Tribune on 1 February 2007.

In New Zealand the Commerce Commission took court action on the airline practice of having separate fuel surcharges on top of advertised passenger fares and won its cases. In June 2006 Air New Zealand UPDATED was fined NZ$600,000 and in October 2006 Qantas UPDATED was fined NZ$380,000 over misleading advertising.

The "Food Miles" debate

Libertarian Liberty Scott has posted again on the food miles debate pointing to a 3 June 2007 Sunday Telegraph article that features Lincoln University research by Caroline Saunders, Andrew Barber and Greg Taylor on the carbon footprints of various food products sold in the UK.

The key message is don't assume that because food has been transported half way around the world the environmental impact is much worse than buying local European produce.

Scott is a transport expert and former colleague now based in London. Even if you don't agree with everything he writes, his weblog is well worth reading.

EU Transport Ministers endorse including aviation in emissions trading

Transport Ministers at the European Union (EU) Transport Council meeting on 8 June 2007 have concluded that aviation should be included of in emissions trading. EU member states will adopt a common position on the issue at the ICAO Assembly in September.

In a statement announcing the decisions the German Transport Minister, Wolfgang Tiefensee, who chaired the meeting noted that "aim of the conclusions was to convince the other ICAO countries of the need to include aviation in emissions trading ... there was likely to be a heated debate at the next ICAO Assembly in the autumn on the issue of including third countries with or without their consent."

IATA AGM

The Annual General Meeting of the International Air Transport Association (IATA) was held in Vancouver, Canada this week. A feature of the meeting was the 4 June 2007 State of the Air Transport Industry speech by IATA Director General Giovanni Bisignani.

A key theme of the AGM was responding to concerns about the impact of aviation on climate change. Bisignani made a statement that included setting a very challenging goal - "Air transport must aim to become an industry that does not pollute—zero emissions."

Swissair Trial Verdicts

On 7 June 2007 the BBC reported that all 19 defendants in the Swissair collapse trial have been found not guilty. The court in Bülach near Zurich also announced damages of SFr3 million (US$2.45 million) in favour of the defendants.

I previously posted about the trial on 20 and 24 January and 10 March 2007.