Neha Jain: http://newzealandaviationnews.blogspot.com/23

Alliance ... Dannii Minogue arrives at the official party to celebrate V Australia and Etihad Airways inaugural Abu Dhabi flight at the Sydney Opera House.

Etihad Airways has grown rapidly, with a fleet of 54 planes flying to 66 destinations.

1. Auckland Airport announces interim results
Auckland Airport announces interim results for half-year ending 31 December 2010

· Strong growth strategy momentum delivering results

· Uplift in profits and dividends, and

· Improved outlook for the full 2011 year

Auckland Airport Chair, Joan Withers, said, “Over the last two years, our goal has been to transform the Company from a high-quality builder and operator of aviation infrastructure, to a sales-led engine of economic growth, powered by an expanded airport footprint in New Zealand and Australia, exposure to higher-growth markets, increased airline connectivity and active route development and promotional activity. The results we are announcing today reflect that focus.”

The half-year to 31 December 2010 saw Auckland Airport gain considerable momentum on its growth strategy and achieve an impressive 14.0% improvement in underlying earnings performance. The Chair commented that for the first time in a number of years, the Company had improved its level of profitability and was increasing its interim dividend to 4 cents per share to reflect the level of confidence the Board held that the strategy was delivering a step-change in performance.

Chief executive, Simon Moutter, said, “We have encouraged new air services, particularly from Asia, that will boost our aeronautical revenues, and will also stimulate demand for travel and deliver increased trade and tourism for New Zealand Inc. We have also invested heavily in those aspects of our businesses, such as retail and property, which leverage commercial opportunities from the growth we have attracted. We are now reaping the benefits from that investment.”

Travel Numbers

Improving global aviation market conditions are having a positive effect on travel demand, with international passenger movements at Auckland, inclusive of transits, up 5.0%, largely due to the continuing improvement in global conditions, and strong Asian visitor arrivals.

Domestic passenger movements at Auckland were up 2.6% in the six months to 31 December 2010, with a noticeable impact from October 2010 on growth as a result of the withdrawal of Pacific Blue.

Queenstown Airport saw significant growth of 36.9% international passengers and 12.1% domestic passengers in the six months to December 2010. Cairns Airport has also seen significant passenger growth of 29.4% in international passengers (including transits) and 7.1% in domestic passengers in the same period, while Mackay Airport grew its domestic passengers by 13.7%.

Half-year Financial Results

Total revenue for the six months to 31 December 2010 increased 8.7%, with airfield income increasing 11.7% to $36.653 million primarily due to a return to scheduled pricing on top of the volume growth effect.

Retail revenue increased in the period by 12.9%, up to $54.809 million. This excellent result was largely due to the investment in a high-quality retail environment within the airport’s international departures area and an increase in marketing activity and customer choice.

Earnings before interest, taxation, depreciation, fair value adjustments and investments in associates (EBITDAFI) were $151.001 million for the six-month period compared with $138.300 million in 2009 (an increase of 92%).

Market trends

It is clear that the rapidly developing economies of the World, particularly across Asia, are driving much of the growth in global travel demand.

Our expanded airport footprint offers us opportunities to work with airlines on route networks, with any increased international traffic potentially flowing on into domestic routes, particularly to Queenstown.

Auckland Airport and our airline customers have announced several new or expanded air services over the last six months. These include a strategically important direct service to the third largest city in China, Guangzhou, with the largest airline in Asia, China Southern Airlines, as well as a new Taipei service with China Airlines, and many expanded services with existing airlines such as Air New Zealand, Jetstar, Emirates, Malaysian Airlines, and Thai Airways.

“New Zealand’s tourism industry must continue to work and invest collectively to overcome our relative disadvantages of scale, funding and end-of-line location in order to win more than our natural share of visitors from these growth markets. We are far from alone in recognising the strategic importance of Asia – we are effectively in a global competition to become a preferred trade and tourism partner. We must ensure we have sufficient and varied air service capacity, competition and connectivity to reach into each market, stimulate in-bound passenger demand, and in turn make more routes economically viable.”

Looking ahead

“Last year we likened our plan to a ‘blueprint’. Today, it is a reality. With the foundations for success in place, and our business units implementing on a daily basis, we are very confident that this strategy is the right one for our Company and New Zealand. Ongoing shifts in global travel and economic trends only serve to reinforce our confidence”, added Ms Withers.

The board is optimistic about the full 2011 financial year and expects net profit after tax (excluding any fair value changes and other one-off items) to now be at the top end, or a little above, the previously stated guidance of $112.0 million to $118.0 million, noting with caution any potential impacts from rising fuel prices or impacts on travel demand as a result of the Christchurch earthquake disaster.

2. Etihad to brighten Virgin's blues?
When flight VA29 releases the chocks and accelerates down Sydney tarmac for lift off to Abu Dhabi at 4.05pm, it'll consummate the marriage — indeed carriage — of convenience between two aspiring airlines, Virgin Blue and Etihad Airways.

The tie up will see 27 flights a week between Australia and the capital of the United Arab Emirates, Abu Dhabi, with Virgin Blue's international brand V Australia today starting the first of its three weekly Boeing 777 flights from Sydney.

Regulators have allowed Etihad and Virgin Blue to engage in a strong alliance, including joint scheduling and pricing, a full codeshare, reciprocal technical support, staff exchange, shared ground handling and allow passengers to earn and burn points on either airlines with reciprocal lounge access rights.
For Etihad, it gets an important feeder airline to its network with the prospect lots of ex-pat Australian passengers working in the Middle East.

Virgin Blue gets access to an entensive international network — to Europe, the Middle East, India, to North America — it could not afford to build itself.

"Had we gone out and decided to fly those routes on our own with an equivalent amount of capacity [to the joint venture] we would have had to buy, depending on the aircraft size, between 30 and 50 aircraft — that's a massive capital expenditure program," said Virgin Blue chief executive John Borghetti, estimating such a cost at $10 billion.

3. FAA Environmental Initiative Advances

FAA announced that the Asia and Pacific Initiative to Reduce Emissions (ASPIRE), a partnership with FAA's counterparts and airlines in Australia, New Zealand, Japan and Singapore to reduce aviation's impact on the environment, is moving beyond the demonstration stage with the launch of ASPIRE-Daily service in selected Pacific markets.

Air New Zealand was scheduled to begin ASPIRE-Daily service from Auckland to San Francisco on Feb. 21, using some of the flight procedures identified by the ASPIRE partners to help reduce fuel burn and carbon emissions.

"This is another significant step in our rollout of the Next Generation Air Transportation System," said FAA Administrator Randy Babbitt. "We're beginning to bring the green benefits of NextGen to the airlines and passengers in the Pacific on a daily basis." Over the next four months, other carriers are expected to join Air New Zealand in flying ASPIRE-Daily routes between additional city pairs, FAA said.

Airlines flying ASPIRE-Daily routes must be equipped with advanced avionics that allow them to use at least four of the environmentally friendly procedures per flight outlined in the ASPIRE program. These include the satellite-based Required Navigation Performance avionics, which automatically update an aircraft's precise position to air traffic controllers and provide an on-board system to monitor navigation performance. Another satellite-based system in use is the Future Air Navigation System, which transmits communications data directly from pilots to controllers.

Five ASPIRE demonstration flights have taken place since the agreement was signed on Feb. 12, 2008, FAA said.

4. Turmoil, calamities may hit tourism

MUMBAI: It has been one crisis after another for tourists and aviation industry. After the upheaval in Cairo and floods in Australia, it is now the earthquake in New Zealand that has cast its shadow on the industry. January to March is not peak tourist season, but a lot of business travel takes place around this time.

However, the political unrest in Gulf countries and natural calamities in some others may force travelers to knock these destinations off their list for summer holidays, too. Tour operators are expecting that countries like Turkey, Israel, and Bahrain may have to bear the brunt of political turmoil in the region.

"People are sceptical about travelling to Arab countries. The political turmoil will not die down soon. Business travel to these destinations is usually on even during off-season. Now, these seminars and meetings stand cancelledPeople who had booked for Bahrain for business or to watch Formula 1 race, are also backing out," said Rajesh Rateria, managing director, Cirrus Travels.

Pradip Lulla, who heads Cupid Travels, said that Australia has issued an advisory for its citizens not to travel to Turkey. "Though Turkey is safe, the fear that protests may spread is rampant. Flights to Egypt are going empty, there are talks of rescuing Indians from Libya. That's why even the neighbouring countries are being considered unsafe," said Lulla.

Lulla was also supposed to attend a business meet in Turkey. However, he is revising his options. Another agent said that the earthquake in New Zealand spells further bad news. "Though other places in New Zealand are still open, potential tourists will not want to travel there Currently, there are no bookings. By the start of summer, some late bookers may finally choose it as a tourist spot," said a Fort-based travel agent.

Tour operators said that people have started booking for their summer travel. However, there are no takers for New Zealand and Arab countries. If the situation continues to be hostile, even Turkey, Jordan, Iran and Israel may lose tourists. According to the Centre for Asia Pacific Aviation (CAPA) research, Cairo and Turkey are top five with respect to seat factors, in the Middle East and neighbouring countries. If the turmoil continues, oil prices may also be affected.

"The region is a major producer and key transportation nexus for petroleum industry. Oil prices have already risen around 5% since crisis began and touched $100 per barrel in London on January 31.

NEHA JAIN

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