“The faint glimmer of a recovery is no more than that. Ticket prices are still low, so emerging growth has brought no significant financial boost yet,” says Finnair’s SVP Communications Christer Haglund.

Christer Haglund was responding to the latest Finnair traffic figures released earlier this week. Finnair’s scheduled traffic grew in February by just over 2 per cent, measured in passenger kilometres, and nearly 3 per cent more passengers were carried on scheduled flights than in February the previous year. Traffic overall declined, however, by more than 9 per cent, mainly due to trends in leisure traffic. In traffic overall, passenger numbers fell by 4 per cent.

A small pick-up was perceptible in Asian and European traffic. Asian traffic grew by more than 3 per cent and European traffic by more than 5 per cent. Business travel also increased outside Finland.

“There is good news,” says Haglund. “We are all the time getting more customers in business travel and in the international market, even if it’s at unfavourable prices. Just as in the Olympics, we are in tough international competition and we have to make our way in the conditions that prevail in the market. There is no alternative.”

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IATA also lowered its 2009 loss estimate to US$9.4 billion from the previously forecast US$11.0 billion loss.

Improvements are driven by economic recovery in the emerging markets of Asia-Pacific and Latin America whose carriers posted international passenger demand gains of 6.5% and 11.0% respectively in January. North America and Europe are lagging with international passenger demand gains of 2.1% and 3.1% respectively for the same month.

“We are seeing a definite two-speed industry. Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe which have continuously contracted since mid-2008,” said Giovanni Bisignani, IATA’s Director General and CEO.

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The survey is determined by freight forwarders who rate airlines on Customer Service, Performance, Value and Information Technology; airports are rated by airlines on Performance, Value, Facilities and Regulatory Operations. The survey results for the airlines and airports achieving an overall rating of 101 and higher are available online at www.aircargoworld.com and will be featured in the April issue of the monthly magazine, published by UBM Aviation (www.ubmaviation.com).

The top five airlines were honored with awards, ranging from Diamond to Bronze, at the March 9, Vancouver awards ceremony. Southwest Airlines garnered the highest overall airline score, led all airlines in the Performance and Value categories, and received the evening’s highest honor, the Diamond Award. FedEx Express, which came in second in overall score, was the recipient of the Platinum Award; and Emirates Sky Cargo came in third and received the Gold Award. The Silver Award went to Virgin Atlantic and Bronze to Nippon Cargo Airlines.

Airports rated highest by airlines and forwarders included Memphis in North America, Amsterdam in Europe, and Seoul Incheon in Asia & Middle East, in the one-million-or-more tons category. In the half-a-million to million ton category, Dallas/Ft. Worth, Luxembourg and Tokyo Haneda took the lead in each of their regions. For the half-a-million and less category, Athens (Europe) advanced to the top spot from 11th in 2009, and Rockford (North America) moved into first place, up from seven last year. Nagoya rated highest overall in Asia & Middle East.

Significant improvements made by airlines from 2009 to 2010, include Southwest Airlines’ jump to first place from 12th, FedEx Express to second from ninth, Nippon Cargo Airlines to the fifth position from 30th and Japan Airlines to sixth from 22nd place.

“The Air Cargo Excellence Awards ceremony gave us a great opportunity to honor the airlines and airports that strive to meet excellence and to exceed their past performances. The success of this inaugural event proves the importance and credibility of the Air Cargo Excellent survey, which has become an important benchmark of airline and airport performance,” said Steve Prince, publisher of Air Cargo World.

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“We are starting to see some signs of optimism on the horizon. But we cannot rebuild on the old foundations. This recession has changed global business. To remain competitive, air cargo must improve its quality and reduce its costs,” said Giovanni Bisignani, IATA’s Director General and CEO in a message to 750 industry experts attending the IATA World Cargo Symposium being held in Vancouver, Canada.

The global recession continues to challenge the global air cargo industry. Cargo revenues were down by one quarter in 2009 compared to the previous year—the most precipitous drop ever. The end of 2009 and the beginning of 2010, however, saw a strong upturn in cargo volumes to a level 28% higher than the low point seen in late 2008, according to the new IATA Cargo E-Chartbook released today.  This is still 3-4% below the early 2008 peak level. There are new signs of yield increases on specific routes and regions, with Asian markets bouncing back the strongest.

In 2009, the wide-body fleet saw utilization fall by 7% and the freighter fleet specifically is down by 160 aircraft. The industry is expected to take delivery of 50 freighters in 2010 and the wide-body fleet overall looks to expand by 4-5%.

“The recession has hit the industry hard. We have lost two to three years of growth. We are starting to see some encouraging signs with traffic volumes improving. Volumes don’t automatically translate to profits. The challenges are many, including low yields, volatile fuel prices and matching capacity to demand,” said Bisignani.

E-Freight Improves Efficiency

Bisignani highlighted the work on the e-freight agenda as a way to accelerate the recovery and improve prospects for future profitability. “E-freight has the potential to eliminate US$4.9 billion in costs across the air cargo supply chain. In 12 months, e-freight volumes increased five fold. We have come a long way but we need to spread the capability of e-freight even wider,” said Bisignani. E-freight now operates in 24 countries or territories and at over 100 airports. So far, 16 of a planned 20 air cargo documents have been converted to electronic format.

“This year will be critical for e-freight. We will convert a further four documents to electronic format and add 20 countries to program. This will give us the capability to remove 64% of the paper from the system and cover 80% of international shipments. With this capability, now is the time for customers, customs and governments to insist on e-freight as the standard way to do business,” said Bisignani.

The electronic airway bill (e-AWB) is one of the 20 documents planned for conversion with e-freight. An industry standard e-AWB that will eliminate the need to print, handle and archive paper airway bills is being trialed by three airlines and 11 freight forwarders. In addition to greater efficiency, the trials are demonstrating that e-AWB can deliver faster air freight shipments with reduced delays because the electronic documents cannot be lost or misplaced. The e-AWB standard has been filed with governments around the world for approval. Importantly, earlier this month the US Department of Transportation endorsed the new standard.

Improving Quality

Global quality standards and process simplification are critical for air cargo. Under the IATA umbrella, Cargo 2000 is a group of over 70 major airlines, freight forwarders, ground handlers, trucking companies and IT providers. The organization has streamlined cargo processes and publishes global quality standards. “IATA e-freight can only be successful in the quality-controlled environment that Cargo 2000 is building. We need the whole supply chain to embrace Cargo 2000 as the quality standard for the entire industry,” said Bisignani.

More Effective Security

“Besides removing paper from the shipping process to improve efficiency, 2010 will also be a critical year for security. Our Secure Freight strategy focuses on a data-driven, risk-based approach with shared responsibility throughout the supply chain,” Bisignani said.  Secure Freight aims to secure the supply chain by defining, auditing and registering secure operators that act in compliance with a quality assurance system.  IATA’s target is US$468 million in cost savings with enhanced security through consistent standards and procedures.  The first pilot is in Malaysia and there are three more planned for this year.

The IATA World Cargo Symposium is taking place in Vancouver, Canada from 8-11 March 2010. Under the theme of “Bounce Back – Rebuild for the Future,” the World Cargo Symposium is looking at building a solid future for air cargo. IATA will release an updated industry financial forecast on 11 March.

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“As our aviation infrastructure priorities are debated and future funding questioned on Capitol Hill, it’s crucial to look at what matters most to the nation’s air travelers,” said Paul Yarossi, president of HNTB Holdings Ltd. “Clearly, the majority of Americans say safety and security is of utmost importance to them.”

More than six in ten (62 percent) Americans say they care most about improvements to either in-flight or pre-flight safety, rather than overall convenience (21 percent) or sustainability (12 percent).

“The challenge for those who design and operate airports is creating the highest level of security and convenience possible,” said Yarossi, who also serves as chairman of HNTB’s Aviation services.

Legislation reauthorizing the Federal Aviation Administration and related funding priorities for the nation’s aviation infrastructure has been pending since 2007.

A major component of future aviation infrastructure improvements is the Next Generation Air Transportation System, or NextGen, a satellite-based digital navigation and communication system designed to replace radar-based systems introduced in the 1940s. It has the potential to make modern air travel safer, more secure and more reliable. Currently, more than half of Americans (53 percent) support such a change.

“Some airports and airlines already are making investments in this necessary technology, even with returns years in the future,” Yarossi said. “Getting NextGen off the ground begins with an educated, supportive public and a commitment from Congress to a multi-year reauthorization bill.”

About the survey

HNTB’s America THINKS aviation security and safety survey polled a random nationwide sample of 1,007 Americans Feb. 1-7, 2010. It was conducted by Kelton Research, which used e-mail invitations and online surveys. Quotas were set to ensure reliable and accurate representation of the total U.S. population ages 18 and over. The margin of error is +/- 3.1 percent.

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“I have enjoyed working for a company that is an industry leader in customer safety, convenience and trust. The team at Key Air shares a strong commitment to providing our clients with an exceptional product and it has been an honor to be a part of that team,” Mr. Kost said. “I am more than confident that Bob Marinace will provide excellent leadership to continue to grow the company.”

Mr. Marinace joined Key Air in August of 2009 as a Senior Vice President and was responsible for many of Key Air’s efforts in national expansion, client service and development of internal operating processes. An aviation industry veteran with over 30 years experience, Mr. Marinace has held several senior leadership positions across the aviation industry including Chief Operating Officer, Senior VP of Flight Operations, Business Development and VP of Integration. Prior to his career in private aviation, Mr. Marinace served in the United States Air Force as a Lockheed C-5A crewmember.

“Key Air is a company with an outstanding and experienced group of people who have dedicated themselves to providing the finest private aviation experience,” Mr. Marinace said. “I look forward to working with this team in building upon the solid foundation Brad helped to create.”

“We are very pleased to have a senior executive with Bob’s industry knowledge and experience leading the organization,” said Suhail Rizvi of Rizvi Traverse Management, the principal equity investor of Key Air. “Bob has significant experience with complex business aviation fleets which will serve us well as we expand over the next few years. Under his direction, we are well positioned to continue our current growth and national expansion.”

Mr. Marinace has been elected to serve on the National Air Transportation Association Board of Directors and is a former Chairman of its Air Charter Committee. Additionally, he sits on the Board of Governors for the Air Charter Safety Foundation and is a former member of its Executive Committee. Mr. Marinace has held board member and leadership positions in several regional business aviation interest groups and has served on several FAA rulemaking and advisory groups as well as a leading manufacturer’s aircraft certification committee. He is also a recipient of the Flight Safety Foundation/PAMA Joe Chase Award.

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“I expect it won’t be published tomorrow,” the source said. “Further confirmation is expected later in the day.”

On Friday, cabin crew rejected a cost savings plan recommended by their trade union and proposed by the carrier to stop it burning through its cash reserves.

Aer Lingus, which has fended off two hostile bids by rival Ryanair, wants to reduce its annual operating costs by €97 million euros ($132.7 million) by shedding up to a fifth of staff.

The company is expected to announce a 2009 operating loss of €87.7 million, in-house broker Goodbody said.

The airline said on Friday its pilots and middle management voted in favour of the plan and that it would comment on the results once it receives the remaining ballots of ground, support and maintenance staff, expected to be returned on Monday.

If it did not get agreement from unions, Aer Lingus has said it would push ahead with an alternative plan to streamline the company by imposing more redundancies and on a compulsory basis.

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Allegiant plans to take delivery of these aircraft and place them in service with Allegiant Air on the following schedule:

• Two aircraft delivered within the next two months to be placed into service in the fourth quarter of 2010
• One aircraft delivered in November 2010 and another in January 2011 to be placed into service in the first half of 2011
• Two aircraft delivered in the fourth quarter of 2011 with planned in-service dates in the first half of 2012

The six 757 aircraft are sister-ships and have been in service with a single European operator since original delivery from Boeing. The aircraft come equipped for extended twin-engine operations (ETOPS), as required for long overwater flights.

Allegiant expects to spend between $75 to 90 million through 2012 acquiring and preparing this fleet for service. While Allegiant is able to acquire and prepare the aircraft for cash, it believes it will finance some portion of the purchase.

Allegiant is acquiring this fleet with the express purpose of serving Hawaii, a major leisure destination that it cannot serve with its existing MD-80 fleet. Allegiant Air expects to launch service to Hawaii once appropriate regulatory requirements have been met.

Allegiant CEO & Chairman Maurice J. Gallagher Jr. commented, “Hawaii is the most prominent U.S. leisure destination currently un-served by Allegiant and our small city customers have been requesting this service. We are very optimistic about our ability to exploit the large third party ancillary revenue opportunity we believe exists in Hawaii. We expect the sale of hotels, rental cars, and many attraction and activities popular with Hawaii visitors will provide a very meaningful contribution to the success of the service.”

“The 757 is a new aircraft type for Allegiant but we otherwise see this program as consistent with our existing business model,” Allegiant President and CFO, Andrew C. Levy, stated. “This transaction will enable Allegiant to extend to Hawaii its strategy of serving large leisure destinations from smaller cities with no existing nonstop service.”

Allegiant Air currently operates 46 MD-80 aircraft and the 757 program will not affect its MD-80 growth plans. Allegiant expects to have 54 aircraft in service by the end of 2010 – 52 MD-80 aircraft and two 757 aircraft.

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