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

1. Virgin Blue warns of full-year loss on rising jet fuel prices
VIRGIN Blue Holdings has warned of subdued full-year profit as higher jet fuel prices, pushed up by turmoil in the Middle East and an earthquake in New Zealand hit demand for travel.

The airline group, comprising Virgin Blue, Polynesian Blue, Pacific Blue and V Australia, said today it expected to post a full-year before tax loss of between $30 million to $80m.

That would compare to last year's statutory net profit before tax figure of $34.3m and this year's first-half figure of $37m.

In early trade, Virgin Blue shares fell 2.5 cents, or 7.58 per cent, at 30.5c, the lowest since August 26, 2010.

At the airline's 2010-11 first half results presentation in February, Virgin Blue chief executive John Borghetti said the second half would be "challenging", but declined to issue specific earnings guidance, saying it was too early to do so.

2. Disasters and Costly Oil Take Toll on Asian Airlines

HONG KONG — Natural disasters and high fuel prices are taking a toll on airlines in the Asia-Pacific region.

Virgin Blue, the Australian airline, warned Wednesday that earthquakes and flooding in New Zealand and Australia earlier this year, combined with the recent sharp rise in oil prices, would tip it into a loss during the current financial year.

The carrier, which is based in Brisbane, forecast a loss of up to 80 million Australian dollars, or $80.7 million, for the 12 months ending June 30, prompting a drop of more than 6 percent in its share price on Wednesday.

“We have witnessed an unprecedented number of significant events in an extraordinarily short period of time, including natural disasters and a sharp spike in fuel prices,” the carrier’s chief executive John Borghetti, said in a statement, referring to a devastating quake that struck the city of Christchurch, New Zealand, last month, and to massive floods that hit Australia earlier this year.

“These events have severely impacted consumer confidence,” he added.

Virgin Blue’s profit warning comes only days after similar news from Air New Zealand, which warned last week that it expected to lose money during the second half of the year.

Air New Zealand, too, cited the soaring cost of fuel and the Christchurch quake — as well as the massive quake and tsunami that hit Japan on March 11 — for the warning.

The Japan earthquake, and the nuclear radiation fears that have followed it, is expected to cause a sharp slowdown for airlines in the $62.5 billion-a-year Japanese aviation market — which accounts for 10 percent of the global industry’s revenues — the International Air Transport Association said last week. A rebound is not expected to be felt until reconstruction gets under way later this year, I.A.T.A. said.

An additional, and potentially further-reaching, issue for the airline industry is the price of fuel. It has risen sharply this year because of the snowballing unrest in northern Africa and the Middle East, adding many millions of dollars to many carriers’ fuel bills.

Even before the March 11 disaster in Japan, I.A.T.A. had cut its 2011 net profit forecast for the global industry to $8.6 billion — down from the $9.1 billion it had forecast in December, and well below the $16 billion generated in 2010 — mainly because of high oil prices.

Cathay Pacific, one of the largest carriers in the Asia-Pacific region, reported record earnings for 2010 on March 9, but it also cautioned that the recent spike in oil prices was “a real concern” that could eat into its profits this year. Fuel accounts for 35.6 percent of Cathay’s operating costs, and fuel prices are now well above what it had forecast at the start of the year.

3. Boeing moves to fast-track jet biofuel certification

As fossil fuel prices continue to soar, Boeing is looking to accelerate the aviation industry's transition towards alternative biofuels, taking the reins of an effort to simplify certification standards for biofuels.
The aircraft giant yesterday announced it has teamed up with the Ecole Polytechnique Federale de Lausanne (EPFL) to launch the Sustainable Biomass Consortium (SBC), a group that will aim to make it cheaper for airlines and other users of biofuels to develop and adhere to effective standards.
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The organisations will work together with environmental groups and governments to "help align regional and regulatory requirements", Boeing said in a statement, adding that it would also aim to make it easier for biofuel sources to be independently verified as sustainable.
"With increasing environmental, regulatory and social pressures on aviation, having harmonised standards for sustainable biofuel development is crucial," said Billy Glover, vice president of environmental and aviation policy at Boeing Commercial Airplanes.
"Our industry needs these fuel sources and this consortium will help ensure we have a transparent way to collaborate among certification processes that guide us towards a more sustainable future."
The move comes as a number of regional biofuel certification schemes are beginning to emerge.
For example, last June the EU's Renewable Energy Directive issued guidelines on how biofuel certification should be implemented under that act. It called for guarantees that biofuels should not come from forests, wetlands and nature protection areas, while also demanding that biofuels offer significant greenhouse gas savings.
In addition, EPFL's Energy Centre had already established the Roundtable on Sustainable Biofuels, which focuses on creating global standards for biofuels production.
The unrest in the Middle East has contributed to an alarming rise in fuel prices, making it more important for already low-margin airlines to buy fuel from other sources. According to the International Air Transport Association, jet fuel prices are up 11 per cent this month compared to last month, and 47 per cent compared to a year ago.
The SBC will begin work next month, and will conduct projects over the next two years in China, Africa, the EU, Latin America, North America and Australasia, Boeing said.
The aircraft company is one of a number of firms in the aviation sector currently conducting biofuel trials, including airlines Virgin Atlantic, Air New Zealand, Quantas and Lufthansa.

4. Fly-by-night
Now, the regulatory body has announced a set of changes that aims to make the process more fool-proof. All current licences are under scrutiny. It plans third-party audits of all flying schools, to eliminate marksheets by simply hooking up its examination arm and its licensing arm, to run rigorous tests on pilots trained abroad, and step up its game on technology-aided identification of candidates. About time.

NEHA JAIN

International Airlines Training Expo