How would you define the current market situation in general?
Overall demand is finally reaching and starting to exceed the levels of 2001. But even this modest upturn in the MRO industry, linked especially to the strong growth of many new low-cost providers, is being diminished to some extent by counter-trends, with market consolidation occurring only slowly.
Worldwide, downward pressure on prices persists and market recovery per se does not mean yield is recovering. Size matters in MRO. High market penetration and a certain throughput level are key to success in this
Lufthansa Systems CEO Wolfgang Gohde announced Friday the global launch of a comprehensive solution called Future Airline Core Environment as LHS positions itself as a full-service IT provider of future-oriented applications in a rapidly evolving business environment. The new product, which Gohde claimed will deliver "significant cost savings" for airlines, supersedes the widely used Lufthansa Systems MultiHost passenger system.
Declining growth rates will take a mounting toll on European low-cost carriers, according to an analysis by McKinsey & Co. presented Thursday in Frankfurt.
Lucio Pompeo, author of the study, stated that the booming industry is at a crossroads; "Few will survive," he warned. The study cited three reasons for falling LCC profitability: Increasingly saturated markets, aircraft orders exceeding likely demand and the growing competition among scheduled airlines, charter companies and LCCs.
One does not have to go all the way back to the postwar era captured in Carol Reed's film noir masterpiece "The Third Man" to recall a time when Vienna was a popular conduit between East and West for the movement of people and goods.
Until the end of the Cold War, Austria's status as a member of the nonaligned community of nations and its geographic location astride the Iron Curtain enabled flag carrier Austrian Airlines to develop an effective route network into the East Bloc and USSR, while Vienna Airport itself became the preferred gateway for such journeys.
South African Airways this week named Kyrl Acton as its first-ever COO. The newly conceived position replaces that of deputy CEO, last held by Oyama Mabandla, whose resignation became effective March 31 (ATWOnline, April 19). SAA said Acton's duties will encompass cargo, scheduling and commercial services, which include revenue management, pricing, sales and marketing. An Irish national and former top executive at Aer Lingus and later at LanChile, Acton has worked for Unisys since 2002 as transportation VP overseeing aviation markets in Europe, the Middle East and Africa.
Executives of cash-strapped South African Airways told ATWOnline in Johannesburg that the carrier is laying plans to be a healthy global competitor while preparing for full membership in the Star Alliance, expected in April 2006.
Among issues to be sorted out before then is the fate of its codeshare relationship with SkyTeam member Delta Air Lines on flights to Atlanta and beyond.
Lufthansa Cargo generated €33.5 million ($42.9 million) in operating profits during 2004, reversing a loss of €16 million in 2003, but showed red ink on the bottom line, posting a net loss of €39.5 million, which it attributed partly to one-time charges and a 38.4% hike in fuel costs.
Comparisons with 2003 are complicated owing to the fact that in 2004 LHC consolidated accounts for all of its logistics business units within Lufthansa Group.
Gulf Air and Lufthansa Technik tomorrow are scheduled to reveal at the Aircraft Interiors 2005 conference in Hamburg the details of what LHT terms a "far-reaching" MRO contract to be signed by Gulf Air President and CEO James Hogan and Lufthansa Technik Executive Board Chairman August Henningsen.
Lufthansa marked the 50th anniversary of its 1955 rebirth with a festive ceremony March 31 in a hangar at its Hamburg base and a commemorative flight the next day in an A310 painted in nostalgic old-time LH livery that was prepared by Lufthansa Technik for the occasion. The flight was from Hamburg to Munich via Duesseldorf and Frankfurt along a route taken by an LH Convair 340 on April 1, 1955, in a 4-hr. flight that marked the beginning of a new era in German aviation. Lufthansa's history actually dates to the founding in 1926 of what was called Deutsche Luft Hansa.
Measured, prudent expansion is also key, with the accent on "close to home" training. In addition to its main Stockholm Arlanda base with 14 simulators and a smaller unit without full flight simulators at Copenhagen, the Flight Academy opened a spacious 5,000-sq.-m. purpose-built training center with 25 staff last August in Norway near Oslo Gardermoen's passenger terminal.
The rapid embrace of low-cost carriers by European travelers has sent shockwaves through the airline food chain, and although embattled former flag carriers may be shouting the loudest, the impact also is felt at those that formerly operated under the radar. Lacking a government owner/protector or a defendable niche, many of Europe's small privately owned airlines are in a competitive no man's land, caught up in the slugfest between money-losing legacy carriers and their LCC tormentors.
Managerial grit that sometimes borders on cockiness seems to keep El Al Israel Airlines aloft against all commercial odds as perhaps the ultimate ethnic niche carrier. Maybe it's a mindset composed of equal portions of self-reliance and chutzpah (a Yiddish expression loosely translated as utter nerve or supreme self-confidence) that somehow translates into viability for the small airline with the outsized reputation.
With losses of close to $58 million over the past two years-including an estimated $32 million in the fiscal year ended last July 31-Air Malta cannot continue to operate with a business-as-usual attitude. That is the message coming out of the executive office, where CEO Ernst Funk, a Swiss transplant who took over in fall 2002, and Air Malta Group Chairman Lawrence Zammit are shaking things up at this formerly sleepy Mediterranean carrier.
Lufthansa Technik, which pioneered installation and operation of Connexion by Boeing high-speed broadband Internet access aboard A330s and A340s, overcame an array of technical challenges en route from the prototype installed in a Lufthansa 747-400 for a four-month trial to the ongoing installation on the airline's long-haul fleet. "We've learned a lot since the proof-of-concept aircraft," says Ulf Hallmann, director-LHT engineering services, VIP and government jet maintenance. Involved are complex structural enhancements both inside and outside the aircraft.
Low-profile but profitable, Turkish Airlines is on a roll with an order for 51 new aircraft and plans to build a new $350 million technical base (see box, p. 42), soaring on the winds of a robust economy and rising demand for leisure and business travel. Earnings are at record highs and passenger traffic was up 26% in the first half of the current year.