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Former Virgin boss John Borghetti appointed to Brisbane airport board

Borghetti Virgin Tigerair Tasmanstep down
Former Virgin boss John Borghetti.

Former Virgin Australia boss John Borghetti appears to have failed to get the Jet A1 out of his system and has rejoined the industry as a director of Brisbane Airport Corporation.

Borghetti, who headed Virgin Australia for nine years and worked his way through the Qantas ranks to become executive general manager, was appointed by BAC shareholder and global fund manager IFM Investors.

BAC chief executive  Gert-Jan de Graaff said the appointment brought decades of experience across the aviation industry to the role.

READ: Rolls-Royce expects fewer aircraft to be grounded by Trent 1000 problems.

“BAC is fortunate to enjoy the experience and insights of a Board with vast airport, investment, governance and infrastructure experience,” he said in a statement.

“John Borghetti’s appointment further strengthens our capacity and I know the BAC team will be excited to be able to learn and benefit from his insights.”

Borghetti joins the board as  BAC is poised to open its long-awaited new runway on July 12 and noted the airport had been “at the forefront of airport development and innovation in Australia”.

“With the opening of the much-awaited new runway in July this year the opportunities for Brisbane Airport are immeasurable and I look forward to working with the rest of the Board to support management to deliver on that enormous promise,” he said.

Borghetti became Virgin’s chief executive in May 2010 and set about reinventing Virgin as a full-service carrier, competing with Qantas for the premium market while acquiring low-cost carrier Tigerair Australia to cover the low-end Australian leisure market.

He came from Qantas where he held a number of senior executive positions after starting his career in the company’s mailroom. He was the executive general manager of Qantas for six years prior to leaving the airline.

Borghetti’s restructure brought a new level of competition to a domestic premium market that had been dominated by Qantas since the demise of the flying kangaroo’s long-standing rival, Ansett Australia.

But it was a strain on the airline’s resources, prompting Virgin to add a series of equity partners, boosting its costs and making profitability elusive.

He was appointed an officer of the Order of Australia in 2017 for his services to the aviation industry.

 

Rolls-Royce expects fewer aircraft to be grounded by Trent 1000 problems

Rolls-Royce trent
Photo: Rolls-Royce

Rolls-Royce expects to cut the number of Boeing 787s grounded at any one time for Trent 1000 engine repairs to below 10 by the end of this year’s second quarter.

The number of aircraft on the ground (AOG) spiked to 42 in the second half of 2019 due to a decision to proactively fit a small number of remaining intermediate pressure turbine modules on an engine variant known as package B.

It has since dropped to the mid-30s and Rolls-Royce said it had taken further positive steps to increase the availability of spare engines and further expand maintenance to reduce the AOG figure to 10 by the end of the second quarter.

READ: New Qantas fatigue systems sets stage for Sunrise.

The issue, which is forecast to cost the company £2.4bn across 2017-2023, has seen disruptions to airlines globally and dented the reputation of the iconic British engine-maker.

The Boeing 787 Dreamliner engines account for 13 percent of Rolls’ widebody engine fleet and there have been multiple problems with components such as fan blades and compressors.

The issues at various times have reduced the capability and availability of in-service aircraft and caused airlines significant inconvenience.

This is not the first time Rolls has seen light at the end of the tunnel, only to have problems emerge with its later Package C and TEN variants of the engine.

But comments in its full-year earnings release suggest a new level of confidence that it has the long-standing problem licked.

Rolls-Royce chief executive Warren East conceded that Trent 1000 engines weighed heavily in 2019 in terms of the financial cost and the unacceptable disruption caused to customers.

“As a result of the Trent 1000 and as announced in November, we are recognizing a net exceptional charge of £1,361m within our financials, contributing to a reported loss of £852m,’’ he said.

“We have fixes designed for all but one of the issues identified and are well advanced on certification and rolling them out into the fleet.

“As the year drew to a close, we carried out a detailed technical re-evaluation of our progress on the final fix, a new high-pressure turbine blade for the Trent 1000 TEN.

“Based upon that work and test activity, we reset our financial and operational expectations for the engine in November, based on a revised estimate of final blade durability, in order to provide certainty for customers and greater clarity for investors.

“Since then, we have made good progress on the design of this blade and continue to expect certification of this component in the first half of 2021.”

In a run-down of its progress, Rolls said the intermediate pressure turbine fix was now fitted to almost 100 percent of in-service aircraft across all engine variants.

A revised intermediate compressor was fitted to more than 50 percent of package C engines and had been certified for the Trent 1000 TEN variant with package B planned for the second half of 2020.

A revised high-pressure turbine blade had been fitted in almost half of package B and C engines and design work for the TEN blades continued to progress well towards the 2021 certification.

Coronavirus: American the latest US carrier to waive change fees.

NEA
Image: American Airlines.

Airlines have lowered fares to encourage people to travel in the face of the coronavirus and now some US carriers are introducing a blanket waiver for hefty change fees.

American Airlines is the latest US carrier to waive all change fees on tickets bought in the coming weeks in a bid to shore up softening demand from nervous travelers.

JetBlue started the trend on February 27 when it offered to suspend change and cancellation fees for all new flight bookings made from that date to March 11 covering travel up to June 1.

READ: US upgrades coronavirus travel warnings to Italy, South Korea, Iran.

The change applies to all fares, including Blue Basic, which generally doesn’t allow changes.

“While authorities have not issued any travel restrictions to the locations we fly, we want to give our customers some peace of mind that we are ready to support them should the situation change,” said JetBlue chief executive Joanna Geraghty.

“Given our mission is to inspire humanity, we felt this suspension was an important way to live up to our crewmember and customer expectations during this uncertain time.

“We are committed to the health and safety of both our crewmembers and customers, and we are working directly with health and security officials as well as industry leaders for updates and best practices.”

Alaska Airlines followed with a “peace of mind waiver”.

“Don’t worry about booking your ticket,’’ it said. “A waiver is currently in place for new tickets booked February 27-March 12, for travel through June 1, 2020.”

In a terse statement, American said it would waive change fees up to 14 days before travel for customers who buy tickets between March 1 and March 16.

The deal is available for any of American’s public fares but there was no mention of a travel date limit.

The volatility of the coronavirus outbreak and the responses by authorities have spooked some passengers, particularly those in Asia.

Notwithstanding the fear of catching the virus, the probability of which is low on an aircraft, passengers are worried about the financial risks of traveling during the outbreak.

READ: Air travel still seen as safe as coronavirus fears spread.

Most insurance companies are now considering COVID-19 a “known event”, so people who buy tickets and insurance today are unlikely to be covered for medical or cancellation expenses due to the virus.

The cut-off date at which insurers designated the coronavirus as a known event was generally in late January but some passengers face an additional complication in that not all policies covered epidemics or pandemics before these dates.

The advice of experts is that people who bought insurance before late January but have yet to travel should check their policies to see what was included.

Australian Consumer group Choice also urged those unable to get coverage for the coronavirus for later bookings should still buy insurance to cover them for other events.

British Airways claims US first with autonomous wheelchairs

British Airways wheelchair
Photo: BA

British Airways says it has become the first airline in North America to trial fully autonomous wheelchairs aimed at helping disabled customers navigate an airport terminal.

The UK carrier has introduced the “electric mobility devices”  at New York’s JFK airport and says the trial is aimed at helping customers navigate the terminal freely and independently.

It is part of a push by BA to make itself the airline of choice for customers requiring additional assistance.

READ: Air New Zealand unveils revolutionary economy sleep pods.

The airline estimates 500,000 customers in this category fly with it each year and that this figure will rise by 10 percent by 2021.

The self-driving, self-navigating, electric vehicles from Japanese technology firm, WHILL, are equipped with anti-collision technology and allow customers to set their preferred destination anywhere within the airport.

British Airways wheelchair
PHOTO: BA

British Airways says the vehicle safely navigates the terminal without the need for assistance from travel companions or the airport support team, currently responsible for escorting customers from check-in directly to the boarding gate.

The high-tech wheelchairs have been tested in other parts of the world but the carrier says this is the first trial by an airline in a North American airport.

The mobility technology offers another option for passengers who are unable to walk long distances but may not need to travel with a wheelchair, giving the freedom to explore the airport at their leisure.

It is part of a range of initiatives, including a specialist accessibility support team, that has seen customer satisfaction more than double among British Airways travelers with accessibility needs.

“Our customers tell us they would like greater independence and control over their journey through the airport, so we were keen to trial autonomous devices and see our customers response to the very latest mobility technology in a real airport environment,’’ said British Airways’ head of innovation Ricardo Vidal.

“Over the next few months, we will be collaborating on a further trial at our busy home hub at Heathrow Terminal 5 to gather more feedback and explore the introduction of this technology alongside our team of customer service professionals to provide a truly seamless and accessible airport experience.

“I’m excited about the future of inclusive innovation to support the accelerating demand for accessible air travel.”

US upgrades coronavirus travel warnings to Italy, South Korea, Iran

airlines coronavirus
Photo: China News Service/Wikimedia Commons

The US has issued a “do not travel” warning to parts of Italy and South Korea and joined countries such as Australia in restricting travel to Iran because of the coronavirus.

The upgraded warnings were issued Saturday after the first death was recorded in the United States and researchers warned the virus may have been spreading in Washington state for weeks.

The Iranian restrictions mean US citizens or permanent residents must return to the US through an approved airport.

Foreign nationals who have traveled to Iran in the previous 14 days are banned from entering the country.

President Donald Trump also announced travelers would be screened prior to boarding on flights to the US from high-risk countries.

The restrictions came as American Airlines announced it was suspending operations to and from Milan, Italy, from New York and Miami until April 25 due to a reduction in demand.

Air New Zealand announced it was reducing flights to Samoa to comply with requests from the Samoan Health Ministry, which now requires all passengers to carry a medical certificate indicating they are well and able to travel.

In Europe, the Lufthansa Group said it was reducing short-haul operations by 25 percent in the coming weeks due to the accelerated spread of the coronavirus and its economic consequences.

The group is also continuing to reduce long-haul services and the number of long-haul aircraft currently not in operation has risen from 13 to 23.

The total confirmed COVID-19 cases worldwide continued to rise to 86, 986 as of March 1, according to live updates by Johns Hopkins University, with 2979 dead.

READ: Air travel seen as safe as coronavirus spreads.

This includes 17 deaths and 3,526 cases in South Korea and 1,258 cases and 29 deaths in Italy.

However, almost half of those infected worldwide have recovered, including more than 31,500 people in China’s Hubei province where the disease began.

A 78-year-old Perth man who spent time on the Diamond Princess cruise ship became the first Australian to die of the disease. Australia has 27 cases of the disease, which has been likened to the 1917 Spanish Flu.

Government officials around the world have been calling on people not to panic and the World Health Organization, which upgraded its warning on the coronavirus, has yet to label it a pandemic.

The disease has a lower fatality rate than the 2003 SARS epidemic but has spread further and kills more people than normal flu.

It has caused financial markets to plummet and is having a significant effect on airlines and the travel industry due to lower demand.

Airlines have been upgrading their disinfection procedures and monitoring of passengers in response to the disease and have cut back or suspended flights to countries such as South Korea and China.

Some airlines are no longer offering hot towels, pillows and blankets and have changed the way they prepare and deliver meals.

And the angst among travelers appears to be increasing: a Canadian family was reportedly kicked off an Air Transat flight in Canada because their coughing child caused alarm amongst passengers.

This was despite the fact two doctors gave the 21-month-old approval to travel.

Jetstar victory as ground workers accept pay increase

summer
Photo: Steve Creedy

A strategy to sidestep unions and take pay proposals directly to workers has scored a narrow victory with Jetstar ground workers.

Jetstar management decided to put a 3 percent pay proposal directly to the ground workers after stalled negotiations with the Transport Workers’ Union resulted in work stoppages and flight cancellations.

The results came in on Saturday with the company claiming a victory, revealing the majority of workers voted up the proposal.

It did not give figures but the TWU said it was just 51 percent of about 350 workers.

The ballot declaration showed the vote was 179-172.

READ: S&P downgrades Virgin Oz as Rex reports profit fall.

Jetstar is not the only member of the Qantas Group to adopt the strategy: Qantas International is threatening a similar move with its pilots if it cannot get their union to ratify a long-haul enterprise agreement.

A spokesman said the deal gave ground crew a pay increase of 12 percent over four years as well as improvements to rostering and allowances.

“This agreement rewards our people with a wage deal that is almost double the inflation rate but still lets us deliver the low fares our customers expect,” he said.

Jetstar chief executive Gareth Evans later described the vote as an important win in a “campaign of misinformation and inaccuracies by the TWU”.

“The TWU tried to dictate how we run our business by pushing us to guarantee some part-time workers more hours regardless of what work the airline actually needs,” he said.

“We’ve been very clear that no part of Jetstar or the Qantas Group will do a wage deal of more than three percent, and the TWU knew this because they’d already agreed to three percent deals in other parts of the business.

“It makes you question what their strategy and intention actually was”.

The TWU said the narrow result highlighted that the problem of underemployment had not gone away for the Jetstar workers.

It accused the company of resorting to blackmail and intimidation by threatening not to pay rate increases owed from March 2019, if workers did not vote for its proposal.

TWU national secretary Michael Kaine said many Jetstar workers would be forced on to contracts guaranteeing them no more than 20 hours a week.

Kaine said the work was there and Jetstar knew this because it continued to outsource work to “underpaid workers” at contractors such as Swissport.

“It is not easy to stand up at your workplace along with your mates and say no to your manager,” he said.

“Jetstar workers did this for as long as they could but for low-paid workers, the prospect of being denied money from a rate increase that was due a year ago was too much.

“The lack of hours these workers struggle with means many live pay-check to pay-check. Jetstar knows this and therefore chose to force this deal on workers using disgraceful blackmail tactics.”

The TWU also criticized the Federal Government for failing to hold airports and airlines to account over underemployment and poverty wages in aviation.

The union says a survey of Jetstar workers showed almost 80 percent struggled to pay household bills because of a lack of guaranteed hours.

The union now has airports in its sights and has threatened widespread industrial action this year as 200 enterprise agreements covering 38,000 transport workers expire.

“Thousands of workers across the airports are underemployed, some on as few as 60 hours a month,” he said. “They are left scrambling for extra hours to feed their families and pay their bills.”

S&P downgrades Virgin Oz as Rex reports profit fall

Rex
Photo: Rex.

The Australian aviation industry’s uncertain outlook was reinforced Friday when S&P Global Ratings downgraded Virgin Australia’s outlook to negative and Regional Express reported a 30 percent fall in profit.

The rating agency expects Virgin to be hit by a combination of issues — the COVID-19 outbreak, bushfires and a softer economy — that have reduced passenger demand in Australia.

It downgraded Virgin from stable to negative on concerns these factors would affect earnings and push its earnings-to debt ration beyond 6X for the full year.

READ: Coronavirus delivers “ridiculously good” $NZ69 Tasman fares.

This was despite moves to reduce capacity, exit loss-making routes and accelerate cost reduction.

But there was hope that the financial cloud could lift in the 2021 financial year.

“In our view, the length and severity of COVID-19 will largely determine Virgin Australia’s earnings recovery,” S&P said.

” At this stage, we expect the bulk of the COVID-19 fallout to occur over the first two quarters of calendar 2020.

“This implies that external conditions should recover in fiscal 2021. In addition, we expect benefits of the group’s transformation program to flow through earnings for fiscal 2021.”

Separately, Australia’s biggest independent regional airline blamed the nation’s worsening economic malaise for a 30 percent fall in interim after-tax profit but expressed confidence it would weather the storm.

Regional Express saw its net profit fall from $9.8 million last year’s first half to $6.9 million in the current period, despite a 1.5 percent rise in group revenue to $166.2 million.

Passenger numbers for the half fell almost 1 percent to 659,053 and the load factor fell 1.7 percentage points to 62.5 percent.

However, average fares were slightly higher at $A223 and fuel costs fell by 1.5 percent.

The airline group had predicted the fall at its annual meeting but said in its second-half outlook that it hoped profits did not fall further.

On the plus side, it predicted longer-term tailwinds would come from an NSW Air Ambulance contract awarded in February and that it would benefit from the acquisition of a pilot academy in Victoria.

“Since the start of the financial year, the economy was severely impacted by the US-China trade war with a series of natural disasters further compounding the situation,’’ chairman Lim Kim Hai said.

“The very weak AUD also impacted earnings severely.”

“Although earnings were down by 30 percent in 1H FY20, we believe that the Rex Group remains fundamentally strong to weather the temporary setback.

“The devastating bush fires of the last three months and the COVID-19 outbreak since the end of January did not appear to have a very big impact on regional travel on Rex’s network.”

Although the airline expects the bushfires and COVID-19 outbreak to have “a significant negative impact” on the economy in the second half of fiscal 2020, it said the environment was too volatile to give an accurate forecast.

 

 

Coronavirus delivers ‘ridiculously good’ $NZ69 Tasman airfares

Air NZ
Photo: Steve Creedy

Every cloud has a silver lining and for people wanting to travel between New Zealand and Australia, it turns out to be airfares as low as $NZ69 ($US43.30) one-way.

Air New Zealand has slashed fares to fill some of the seats left empty by  Asian customers staying home because of the coronavirus for travel from mid-March 2020.

The cheapest advertised fares, available until the end of Monday,  include Auckland-Melbourne and Christchurch-Melbourne for $NZ69.

READ: Air New Zealand unveils revolutionary economy sleep pods.

There’s also  Auckland-Sydney, Auckland-Brisbane, Christchurch-Brisbane and Wellington-Sydney for $NZ79.

Air New Zealand is slashing the price of Tasman airfares to stimulate travel in the wake of softening demand due to the coronavirus.

“Customers are going to get some ridiculously good deals on flights across the Tasman,’’ said Air New Zealand chief revenue officer Cam Wallace.

“Like all airlines, we have seen some softness in demand on routes like the Tasman where we now have some empty seats due to travelers mainly from Asian destinations not connecting between New Zealand and Australia.

“Kiwis and Aussies are going to be able to head away for holidays or to see family and friends or do business for cheaper than a night’s accommodation at most hotels.

“We’d encourage customers to get in quick as the cheap seats are likely to sell faster than tickets for this weekend’s $50 million dollar Lotto draw.’’

Air New Zealand is cutting flights and expects to take a full-year earnings hit of up to $NZ75 million as a result of the virus.

It recently announced it would reduce flying to Asia by 17 percent until June, allowing it to redeploy Boeing 787s, as well as targeted reductions on some Tasman and domestic services.

The cuts included the suspension of flights to Shanghai and the new Seoul route as well as reductions in capacity to Hong Kong and Japan.

Meanwhile. Korean Air announced Friday it would be checking the temperatures of all passengers on its US-bound flights after the coronavirus spiked in its home country.

Those with a temperature of higher than 37.5C would be denied boarding as fever is one of the symptoms of the virus.

The airline is also using the heavy-duty MD-125 disinfectant, known to be effective against coronavirus, to sterilize its aircraft cabins.

“Korean Air plans to expand these procedures to other routes,” it said.

 

 

Cockpit recorder was not working in fatal Hercules bushfire crash

hercules bushfire crash
The C-130 Hercules. Photo: ATSB

A potentially crucial flight recorder on a US Lockheed  C-130  Hercules that crashed fighting bushfires in Australia did not record any information during the flight or while it was stationed in the country.

A preliminary factual report from the Australian Transport Safety Bureau reveals that the C-130s cockpit voice recorder (CVR) did not record any audio during the fatal flight in the Snowy Mountains on January 23.

Experienced fire-fighters Captain Ian McBeth, 45, first officer Paul Clyde Hudson, 43, and flight engineer Rick A DeMorgan Jr, 44, were all killed in the tragedy.

The C-130 was contracted to the New South Wales Rural Fire Service by North American aerial firefighting company Coulson Aviation.

“Although the recorder assembly was damaged in the accident, ATSB investigators were able to successfully recover all the data from the CVR’s crash protected memory module,” ATSB Chief Commissioner Greg Hood said Friday.

“However, unfortunately, the CVR had not recorded any audio from the accident flight.

“Instead, all recovered audio was from a previous flight when the aircraft was operating in the United States.”

The Hercules had been in Australia since November 2019 and the ATSB will investigate why the CVR was not working.

hercules
The crash site. Photo: ATSB.

“Audio from cockpit voice recorders often plays an important role in aircraft accident investigations, however, our investigators do have a range of other evidence, including witness videos, at their disposal in building a comprehensive understanding of the accident sequence,” Hood said.

The preliminary report found there were no distress calls prior to the crash and indicated the aircraft hit a tree in a left wing-down attitude before plunging into the ground.

It crashed on slightly sloping, partially wooded terrain in conditions with severe turbulence below 5000ft.

The aircraft had been tasked to drop retardant on a bushfire about 50km north-east of the Cooma Snowy Mountains Airport.

Witnesses reported seeing the Hercules completing a number of circuits prior to the drop, which was conducted on a heading of about 190° at a height of about 200ft above ground level and involved the release of about 1200 US gallons (4500 litres) of retardant.

Following the retardant drop, the report said, the aircraft was observed to bank left, before becoming obscured by smoke after about 5 seconds.

Hercules
Image: ATSB

It was seen flying at a very low height above the ground, in a left-wing down attitude.

The report added: “The ATSB’s on-site examination of the wreckage, damage to the surrounding vegetation, and ground markings indicated that the aircraft initially impacted a tree in a left-wing down attitude, before colliding with the ground.

“The post-impact fuel-fed fire destroyed the aircraft. The examination also found that an emergency dump of the fire retardant had not been activated.”

The ATSB has retained the engine propellers and several other components for further examination.

The investigation will consider environmental influences; the crew’s qualifications, experience and medical information; the nature of aerial fire-fighting operations; and operating policies and procedures.

“An investigation of this nature and complexity may take more than 18 months to complete,” Hood said.

“However, should any safety-critical information be discovered at any time during the investigation, we will immediately notify operators and regulators, and make that publicly known.”

Heathrow: We can build runway without jeopardizing planet

heathrow decision
London's Heathrow airport.

London’s Heathrow Airport plans to appeal a British court decision that has thrown its plans for a third runway into chaos and says it can still build the project “without jeopardizing the planet’s future”.

The Court of Appeals found that the third runway project was unlawful because it failed to take into account the UK’s climate commitments.

Plans to expand the slot-constrained airport to cope with increasing traffic have been debated for years and had been opposed by environmentalists and local residents.

Read: New Qantas fatigue system sets stage for Sunrise

The appeal was backed by environmental groups and London’s Mayor Sadiq Khan who called on the expansion plans to be abandoned.

The decision prompted jubilation outside the court but the judges left the way open for the project to proceed provided it fits in with the UK’s environmental commitments.

The British government has decided not to appeal the decision, leaving it up to the airport to take it further.

“The court’s judgment is complex and requires careful consideration,’’ Transport secretary Grant Shapps said. “We will set out our next steps in due course,”

A Heathrow Airport spokesman noted the court had dismissed most of the appeals against the government, including those based noise and air quality, and the remaining issue was “eminently fixable”

“We will appeal to the Supreme Court on this one issue and are confident that we will be successful,’’ the spokesperson said.

“In the meantime, we are ready to work with the Government to fix the issue that the court has raised.

“Heathrow has taken a lead in getting the UK aviation sector to commit to a plan to get to Net Zero emissions by 2050, in line with the Paris Accord.

Expanding Heathrow, Britain’s biggest port and only hub, is essential to achieving the Prime Minister’s vision of Global Britain.

“We will get it done the right way, without jeopardizing the planet’s future.”

UK MPs in 208 voted overwhelmingly in favor of the then £14 billion project as the airport ran close to capacity.  It handled 80.1m passengers in 2018.

The new Heathrow runway would be the first new full-length runway to be built in the south-east of England since World War II and would allow the airport to boost its capacity to 130 million passengers and 740,000 flight movements per year.

The extra runway, to be parallel to the existing runways and to the north-west, is also needed to allow Heathrow to keep up with European rivals such as Amsterdam’s Schiphol, which has six runways.

However, its flight paths cross many residential districts and the project threatens to destroy historic villages dating back to medieval times.

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