Our roaming reporter Alison Chambers has been to Sweden to learn what is going on in the commuter airline industry. Here is her report.
”It is fitting that ERA should hold its 25th annual anniversary in Sweden, a country which has contributed so much to regional aviation, especially through Saab Aircraft,” said its founding president, Moritz Suter. He took to the stage at the organisation”s gala dinner last Thursday night to reflect on the formative years and to congratulate director general Mike Ambrose on what has been achieved. He also took the opportunity to share a little secret with the guests ” that the first appointed director general ran off with the association”s money.
This year's event in Gothenberg was a well-balanced mix of nostalgia and forward thinking with important items on the agenda. Airline of the Year went to Binter Canarias and here Eyrl Crump has captured the award presentation to managing director Andreas Blass by ATR CEO Fillippo Bagnato. For the first time ever there were more airline CEOs in attendance than exhibitors. Among the 50-strong executives were new members Air Atlantique, UK; from Switzerland Darwin Airline and Flybaboo (an Indian name, which means noble, in case you were wondering), CCM Airlines of France; Golden Air of Sweden, Air Iceland, Coast Air of Norway and Dau Air of Germany. From Eastern Europe, Hemus Air and DOT Danu Oro Transportas also signed up ” all bringing new life to the association.
The new arrivals, mostly ATR, Dash 8 and Saab customers, lend even more weight to the turboprop fraternity, underlining again that turboprop operations are very much back in vogue. New orders announced at ERA reinforced this. Of the total 1,071 aircraft flown by ERA member airlines, 55% is jet and 45% is turboprop, delegates heard, with the average fleet age being nine years and 12 years, respectively.
ERA”s member airlines, which collectively fly 75 million passengers a year, saw their traffic increase almost 10% in the first half of this year, with load factors bolstered to an average 60%. Scheduled traffic (in RPKs) was up 9.9%, double the growth of last year. ”The market is definitely returning,” said Mike Ambrose, with three out of four member airlines reporting strong growth in 2005. ”They are reaching levels of competitiveness, but they are still seeing costs rise and still have obstacles in their way.”
Fuel prices have soared and will probably never return to previous levels. Back in 1980, Saab Aircraft predicted that fuel prices would one day top $2 a gallon, but they didn”t know it would take 25 years to reach that. With countries like the US, China and India using oil to such an extent these crazy prices are not going to come down, opined Saab Aircraft Leasing”s Michael Magnusson. Since the beginning of this year, airlines have had to endure an 18% increase in fuel per block hour flown each quarter. ”This is enough of an incentive to burn less fuel without the need for additional, so-called environmental taxes, which do nothing but swell Government coffers,” challenged Ambrose.
ERA is also aggrieved over proposals for a Poverty Tax on airfares. There must be more constructive ways to raise money, the Association argues. ”This is an example of the paucity of imagination that exists in Europe”s politicians and administrations. Any kind of third world debt is the responsibility of the Community at large and should not fall on one industry.”
Passenger Compensation rules are also proving troublesome for airlines. ”Most of the things that ERA warned the European Commission (EC) about have happened, while the EC has shown an appalling lack of concern regarding the misleading information it provides to the public. This has been made worse by national and international media ignoring the facts,” stated Ambrose. He acknowledged it was impossible to express Passenger Compensation legislation in a simple sound-bite. Non-industry media simply cannot grasp the fact that the complexities of this Regulation cannot be captured within their customary requirement of 20 seconds or 100 words.”
Despite the concerns and issues, there were some positive stories emerging from ERA airlines last week. Swedish regional City Airline, airline host in Gothenburg, announced plans to base one of its Embraer 145s in Lyon (France), to develop new routes including the UK (most likely, Manchester where it already serves Gothenburg). The airline, which uniquely codeshares with bmi, Alitalia, Finnair and Malev, extends its nine-strong route network to Lulea (Sweden) and Bergen (Norway) from the winter schedule and it will also add another 145 to the fleet in summer 2006, to have three dedicated to charter work, said managing director Tom Ericsson. Timisoara-based Carpatair, one of ERA”s new expanding players, is adding two ex-Swiss Saab 2000s to its fleet. It now has 11 of the type. Georg Wiedekehr, ERA”s legal counsel for 25 years, is chairman and was this year”s recipient of the director general”s Award for his tireless dedication and support of ERA. The airline is also adding three Fokker 100s to the fleet, all ex-American Airlines/Jetsgo. The first jet will arrive in December and initially will serve on the airline”s Italian and German routes. When all three are flying in spring 2006, they will debut on proposed new services to France, Spain, UK and Ireland.
ACMI specialist Denim Air”s new CEO Matthijs Boertien confirmed the Eindhoven-based company was looking at 100-seat regional jets to complement its Fokker 50 and Dash 8 turboprop fleet, with the Embraer 170/190 a strong candidate. And despite facing Ryanair now on its 40-minute Cork ” Dublin route, Aer Arann says it will not withdraw. It has responded with a new schedule that skirts around the Ryanair departures, and MD Padraig O”Ceidagh says it will look at developing new routes from Ireland to northern France and break Ryanair”s monopoly. Aer Arann took bronze for the second year in ERA”s Airline of the Year Awards. Aegean Airlines of Athens, last year”s gold winner, took silver and Binter Canarias of Spain scooped gold.
It was a significant win for the Tenerife-based airline. Profitable and sporting a new strong brand, the award, judged by 11 international aviation journalists, was in recognition of its dramatic turnaround. Once part of state-owned Iberia, Binter was purchased by a group of private investors three years ago. This month, it adds new international services to Paris CDG and Milan Bergamo, to be served by a 737-400, wet-leased from Futura. In Gothenburg, managing director Andrea Blass announced an order for one more ATR72-500, taking its ATR fleet to 14.
ATR took the opportunity to reflect on what has been a ”remarkable year” to date, having logged over 60 new aircraft sales. It has now revised its sales forecasts and Filippo Bagnato says ATR expects to deliver 16 new aircraft this year; 24 in 2006 and at least 30 in 2007. The second user Saab 340 market has also been transformed in the last 12 months, according to both SAL and regional aircraft remarketing organisation, Skyways Aviation. Of the 54 340 transactions completed over the last 12 months, 38 have been sales and six operating leases. Bombardier announced that Royal Jordanian Airlines would become the first Middle East operator of the Q400. One initial Q400 will spearhead a new Xpress brand, upgrading the regional services that have been provided by Royal Wings since 1996.
Air Transport World”s Jay Donoghue was the recipient of this year”s ERA Hank McGonagle Award for an article which highlighted the dangers of poor environmental legislation to an already economically besieged industry. He went on to lobby for the right kind of industry action. Munich Airport scooped the Airport of the Year accolade. Runners up were London City and Cardiff International. Cardiff may yet scoop the main prize next year, with ERA”s director of communications Peter Philips bowing out of the Association to join the airport as head of public relations. ”I will miss working with ERA tremendously,” he says.
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