Archive for March, 2012
Friday, March 30th, 2012
International Airlines Group, the owner of British Airways, has said that it would be interested in negotiating the purchase of a stake in Japan Airlines. The Asian carrier was forced to apply for bankruptcy protection in 2010, but is expected to be back on the stock exchange in Tokyo before the end of the year.
An initial public offering is expected to generate between ¥500 billion and ¥1 trillion. JAL is part of the Oneworld alliance along with IAG, and the airline group’s boss, Willie Walsh, has been keen to develop closer ties with JAL for some time. Last month a joint venture was announced between the two on a number of routes between Japan and Europe.
In a statement IAG said that it was impressed at the restructuring work which has gone on at JAL since filing for bankruptcy protection and that there was definitely some interest in investment. Since 2010, the Asian carrier has cut a number of routes and reduced its workforce by around a third. Other members of Oneworld may also be interested in investing in JAL.
Mr Walsh is currently waiting for a decision to be made by the European Union as to whether IAG will be allowed to takeover bmi. According to reports, IAG has agreed to give up more of its landing and take-off slots at Heathrow in order to satisfy the competition regulators.
Virgin Atlantic has challenged the deal saying that there will be a loss of competition on European routes if it is allowed to go ahead.
Tags: bmi, British Airways, Heathrow, IAG, jal, Japan Airlines, Oneworld, virgin atlantic, willie walsh
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Thursday, March 29th, 2012
Since taking over as London’s Mayor from Ken Livingstone, Boris Johnson has seen a sharp decrease in the number of members of the Rail, Maritime and Transport union deciding to walk out on strike. According to figures leaked by the RMT, the number has dropped by 43 per cent.
During Mr Livingstone’s two terms in office there were eight strikes called by the RMT and 19,052 members of the union walked out. Under Mr Johnson there have been a total of 15 strikes called by RMT union leader Bob Crow, but only 10,865 members decided to take part.
Tony Travers an expert in transport at the LSE said that although the current state of the economy was having an effect on the number of union members choosing to strike, there is also the feeling that they are becoming slightly less militant.
Mr Johnson has taken the opportunity to say that the figures show that union bosses were becoming even more out of touch with transport workers. If he is re-elected, Mr Johnson has vowed to tackle the unions to make sure that they are unable to hold commuters to ransom through industrial action.
If he gets back into office, Mr Johnson wants to see a change in strike legislation that would cause a strike ballot to be invalid unless at least 50 per cent of union members cast their votes.
Tags: Bob Crow, boris johnson, Ken Livingstone, rmt, transport
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Wednesday, March 28th, 2012
A group representing the interests of American airlines has dropped its lawsuit against the European Union. The suit had initially been presented to the High Court in London by United Continental, American Airlines and the Air Transport Association of America and argued that a carbon tax on airlines was unlawful.
However, it was referred to the European Court of Justice where it was ruled that the EU’s scheme to tax airlines for the carbon emissions they produce was legal. The issue was due to return to London later this week but the Air Transport Association of America has decided that dropping the challenge is a more productive way to proceed with the matter.
Under the name Airlines for America, the association claimed that opposition to the law was so widespread throughout the world that it was now time for governments to intervene. The organisation has not taken its failure to convince the ECJ that the rules on emissions are contrary to international law to heart.
The body said that its actions had succeeded in bringing the matter to a wider audience and created an agenda for others who are opposed to the legislation.
Chief executive and president for Airlines for America, Nicholas Calio, said that the group’s action had been instrumental in showing that a scheme which was originally meant as an environmental safeguard had become nothing more than a money grabbing mechanism.
Tags: Airlines for America, american airlines, carbon emissions, EU, Transport Association of America, United Continental
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Tuesday, March 27th, 2012
Passengers travelling to Frankfurt on a Singapore Airlines Airbus A380 have had to return to Singapore after a fault occurred in one of the plane’s Rolls-Royce Trent 900 engines. All of the passengers have been transferred safely to another flight which took of from the airport for the German city.
In a statement, Singapore Airlines said that Flight SQ26 had turned back to Singapore approximately three hours into its journey to Frankfurt after crew experienced problems with one of the engines. A surge was reported in engine number three and it was shut down.
The statement added that this usually indicated that there was airflow disruption which can affect normal operation.
The airline was keen to stress that passenger safety had not been compromised because the A380 is perfectly capable of flying on just three engines. Singapore Airlines will now look into the problem with inspectors from Rolls-Royce. The British engine manufacturer has confirmed that it was working alongside the airline to discover what had gone wrong.
Rolls-Royce has been having trouble with its Trent 900 jet engines ever since a Qantas A380 was forced to turn back to Singapore after one of its engines exploded. The incident meant the grounding of the Australian flag-carriers entire fleet of A380s while inspections were carried out. In July last year, a Singapore Airlines A380 had to turn back after an engine shut down shortly after take off.
Tags: A380, airbus, airline, Qantas, Rolls Royce, Singapore Airlines, Trent 900
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Monday, March 26th, 2012
International Airlines Group, the carrier created through a merger of British Airways and Iberia, is reportedly keen to grab a stake of American Airlines in order to stop it from being taken over by a rival. American declared bankruptcy in November last year, and IAG has apparently been meeting with banks to look at options for investing in the carrier.
Willie Walsh, chief executive of the group, wants to protect a codeshare agreement IAG has with American on routes across the Atlantic. Other airlines also exploring the possibility of investing in American include Delta and US Airways.
If either takes over American, then it is unlikely that a cost sharing deal would no longer continue to be an option for Mr Walsh. Because ownership rules mean that foreign companies are not allowed to own more than a 49 per cent stake in a US airline, it is believed that Mr Walsh will start by going for a 25 per cent voting stake.
The IAG boss could also become a partner with and American firm such as private equity company Texas Pacific Group which could buy American completely. Mr Walsh has always considered that a codeshare agreement would be followed by a merger. If this happens then one of the largest airline groups on the planet will be created.
However, if a rival carrier acquires American it could be forced to leave the Oneworld alliance and severe all ties with IAG.
Tags: american airlines, British Airways, IAG, Iberia, willie walsh
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Friday, March 23rd, 2012
Troubled Indian carrier Kingfisher Airlines is hoping that the Delhi government will step in and offer a stay of execution. Having never succeeded in turning a profit and weighed down with debt Kingfisher is hoping that the authorities will not make the decision to revoke its operating licence.
Talks with the banks about bailout packages have not been successful and the airline is faced with large debts to oil providers. As the company struggles to find the cash with which it can pay its employees’ wages a number of crew and several pilots have already quit their jobs.
Currently the carrier is only managing to operate 18 of its fleet of 47 aircraft. Kingfisher is hoping that the government will decide to give it more time to streamline operations, raise funds and cut costs.
The aviation minister has said that he will be closely examining a regulatory report detailing the airline’s financial restructuring and make a decision on how to proceed over the next few days. If the authorities do decide to cancel Kingfisher’s licence then it is likely that public money will be lost because most of its debt is with government-owned financial institutions.
For years now the government has been supporting national carrier Air India, which is also a loss maker. However, a decision to bail out a privately owned carrier could set a dangerous precedent. High airport taxes and the cost of fuel have not made the situation easy for any of India’s airlines and Kingfisher continues to lose ground to budget rivals such as SpiceJet and IndiGo.
Tags: Air India, airline, banks, IndiGO, kingfisher airlines, SpiceJet
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Thursday, March 22nd, 2012
An increase in fuel tax announced by Chancellor George Osborne in his budget will see the price of petrol go up by almost 4p per litre. This is to be added at a time when customers are already paying record prices at the pumps.
Drivers’ groups are accusing the government of turning its back on families. As of 1 August fuel duty will rise to 60.97p per litre, an increase of 3.02p. When VAT is added on top the increase becomes 3.62p per litre.
The cost of filling up a standard 70-litre tank will be £2.54 more expensive than it is at the moment which will push the annual fuel bill by around £60. Currently the average price of petrol is 139.67p per litre with diesel costing 146.39 per litre. Mr Osborne said that road tax would also be going up in line with inflation.
Motoring taxes contribute around £45 billion each year to the exchequer.
Mr Osborne said that he was aware that the continuing high price of oil was putting pressure on peoples’ finances, but that fuel duty was cut in last year’s budget in an attempt to ease the situation. The government also said that it has scrapped the fuel duty escalator of its predecessor, and confirmed that a fair fuel stabiliser is in place which means that above inflation increases in the price of fuel will only be made if the price of oil drops below £45.
Tags: Budget, fuel duty, George Osborne, petrol
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Wednesday, March 21st, 2012
Passengers travelling on a United Airlines jet to Shanghai from San Francisco have been forced to spend two days stranded in Alaska. A series of events including broken toilets and power failure meant that 262 people had to stop-over in Anchorage.
Around three hours after take-off it was found that flight 857 had a number of inoperable toilets, so the pilot made the decision to divert to Anchorage, according to United Airlines spokesman Charles Hobart.
The passengers were then made to wait in their seats until disembarking at around 8pm. Airline staff gave travellers vouchers for meals and hotel rooms. However, according to passenger Chen Chang from California, because there were only a handful of staff, getting hold of the tokens took a long time and when they had all been given out it was so late that most places had closed.
Passenger Camille Chen said that things were made worse because the hotels wanted credit cards from customers before checking them in and that some of those who were on their way to China did not have them.
The next day United flew in another plane and passengers were permitted to board at 3pm. However, a mechanical fault meant that the jet had no lights, no power, and again no toilets. Passengers were then asked to disembark and more vouchers were handed out. A third Boeing 777 was flown in on Tuesday and passengers were finally on their way.
Tags: Anchorage, boeing, United Airlines, vouchers
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Tuesday, March 20th, 2012
A deal is still to be struck between the unions and London Underground if possible disruption on the Tube during the Olympic Games in the summer is to be avoided.
The Rail, Maritime and Transport union has said that it cannot offer its members a £850 package unless LU concedes to remove all the strings it has attached to the deal.
Last week the other main unions, the TSSA and Unite said that they would be refusing to accept the agreement. London Underground chiefs said they were disappointed by the decisions and have invited the unions to return to talks.
Bob Crow the RMT’s general secretary said it was not the intention of the union to disrupt what should be a very successful Games. He said it was the job of the union to make sure that its members were compensated adequately for the extra effort and work they were being asked to put in.
Howard Collins, Chief operating officer for LU, said the offer of £850 compensation would be tied to customer satisfaction, levels of attendance and workers’ flexibility. Mr Crow wants LU to remove these clauses from the deal.
Mr Collins said he felt that the RMT had not fully understood what was on offer and how it was supposed to work. He added that an agreement had already been reached with drivers who may be required to work longer hours during the event.
Tags: Bob Crow, London Underground, Olympic Games, rmt, tube, Unite
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Monday, March 19th, 2012
David Cameron wants to see the UK’s road network receive a significant boost from private funding. He has asked the Department for Transport, as well as the Treasury, to look into the possibility of getting cash from sovereign wealth funds. He has also suggested that road tolls should be introduced.
The Prime Minister would also like to see congestion reduced at pinch-points with road widening schemes and more use of the hard shoulders on motorways at times when traffic is particularly heavy. He said it is important that the country builds for the future with ambition and confidence to reverse decades of degradation.
However, acknowledging that the financial situation is tight, Mr Cameron said he wanted to encourage innovative ideas on how to tackle the problems with the country’s infrastructure. Getting more goods and people onto the trains would be part of the solution, he added.
The proposals come as a poll suggests people are not impressed by the government’s pledge to be one of the greenest ever. The survey commissioned by the RSPB and Greenpeace found that only two per cent thought the promise was being kept.
RSPB chief executive Mike Clarke said this week’s budget could be bad news for the environment. He added that evidence showed that smart regulation of environmental concerns was not a hindrance, but a stimulus for growth.
Tags: David Cameron, Department for Transport, Greenpeace, roads, RSPB, trains, Treasury
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