South Korea’s already busy low-cost market will get another player in 2018 when start-up  KAIR Airlines begins flying Airbus A320s.

Airbus announced on Monday that the start-up had signed a firm order for eight conventional A320s to operate from its base in Cheongju, in central South Korea. The airline will focus primarily on services to international destinations in North East Asia. 

 “We see enormous potential for the development of a low-cost model linking central South Korea with destinations in China, Taiwan and Japan”,  Byung Ho Kang, KAIR Airlines chairman, said in a statement. “KAIR Airlines will focus on point-to-point services at low fares while offering passengers a modern and fun product offering.”

KAIR Airlines joins a slew of  existing low-cost carriers in South Korea, including Eastar Jet, Jeju Air, Jin Air, Air Busan and T’way Airlines. Asiana Airlines Joined the fray last year with low-cost subsidiary Air Seoul, based at Incheon International Airport.

LCC’s enjoy a 22 per cent market share on South Korea’s international routes, up from 16.2 per cent in 2015, and experts predict they are heading quickly towards 30 per cent.

They dominate the domestic market with a combined market share of 56.6 per cent, according to November government statistics reported by the Pulse business news site.

That put them ahead of network carriers Korean Air and Asiana, which between them commanded 43.4 per cent of the market.

Jeju Air, Jin Air, T`way Airlines, Eastar Jet and Air Busan were profitable in 2016 with combined revenues estimated at more than 2.5 trillion won ($US2.08 billion).

Airbus backed the potential of its latest customer with chief operating officer customers John Leahy saying the European manufacturer had been impressed by KAIR’s business model.

 “We are confident that the efficiencies offered by the A320 will contribute to a successful launch by KAIR Airlines, bringing more choice for passengers flying in the North East Asian region,’’ he said.
 

Airberlin has urged striking unions in Berlin to return to the table after tens of thousands of passengers have been prevented from boarding their flights by a continuing wage dispute.

An extension of the strike involving ground handlers at Berlin’s two airports was extended until 5am Wednesday Berlin time and led to the cancellation of about 650 flights on Monday. This was in addition to more than 700 flights cancelled at the two airports, Tegel and Schoenefeld, on Friday.

Ground staff working in areas such check-in, baggage handling and directing aircraft are striking for a pay increase from the companies employing them.

Union are demanding a pay increase to 12 euros ($US12.80) an hour from about 11 euros. The demand was initially met by much lower offers which have since been increased to an 8 percent increase over three years.

Airberlin said it cancelled more than 200 flights on Friday and said hundreds more would be cancelled Monday and Tuesday. 

The only flights operated by the carrier were long-haul services to Abu Dhabi, the Caribbean and the US and Tel Aviv aswell as long-haul feeder flights to the carrier’s hub in Dusseldorf.

“Each day that this labour dispute continues is causing millions in damages to the airline sector and all other service providers at Berlin’s airports,”’ airberlin chief executive. Thomas Winkelmann and Chief human resources officer Martina Niemann said in a letter sent to unions.

“As the largest airline operating from Berlin-Tegel airport, this dispute is hitting airberlin particularly hard. 

"We therefore urge both parties involved in this wage dispute to take responsibility and return to the negotiating table without further delay.”

Among those affected by the strike were visitors to last week’s ITB International Travel Trade Show.

The Lufthansa Group says a completely new business class on its  Boeing 777-9X  aircraft will "be more than just a seat'' when the plane goes into service in 2020.

There are few details about the new product except that it will be a completely new design and passengers will be able to control functions such as seat position and inflight entertainment from their smartphones. 

However, if recent unveilings by other airlines are any indication, particularly Qatar, it would be reasonable to assume that the new seat will see amenities previously associated with first class move into business.

Read: Qatar sets new level in business class.

Lufthansa is a launch customer for the 777X and ordered 34  of the redesigned, fuel-efficient planes with options and purchase rights for 64 more.

 “This seat will be more than ‘just’ a seat,’’  Lufthansa executive board member Harry Hohmeister said at the ITB event in Berlin last week. “It will meet the specific needs of customers – no matter whether they prefer to work or sleep, or whether they are travelling with their families or on their own for business.’’

The new seat is being developed across the group with input Lufthansa, Austrian Airlines and Swiss as part of a move that has also seen the sales department restructured to make it easier to book across the carriers.

Lufthansa also revealed the group is planning to spend 500 million euros to develop and improve digital offerings for its services.

Those offerings already include the electronic availability of more than 250 newspapers and journals, a chatbot called Mildred and apps for the Apple Watch.

It is currently developing a new application for the Google Home personal assistant that will use text-to-speech technology to answer questions about flights.

“At Lufthansa, digitalisation is much more than just developing new apps,’’ Hohmeister said.   “It isn’t just about major innovations – it’s also about all the little things that make travelling with us more pleasant, more comfortable and more personalized.”
 

The global accident rate for commercial jets ticked up in 2016 but the chances of being in an air crash remained miniscule.

The accident rate for jetliners increased to 0.39 hull losses (where the plane is destroyed) per million flights last year from 0.32 in 2015 and was also above the five-year average of 0.36 losses per million flights.

But this translated to just one major accident for every 2.56 million flights to see aviation retain its mantle as the safest way to travel. By comparison, the US National Oceanic and Atmospheric Administration puts the odds of being struck by lightning in any one year at about one in a million.

Regions to see increases in the jet accident rate included Europe, North America, Latin America and the Caribbean and the Middle East/North Africa.

Those recording a fall were the Asia-Pacific, Africa and the Commonwealth of Independent States (CIS). North Asia recorded its second consecutive year of no hull losses.

The accident rate for all commercial aircraft was 1.61 accidents per million flights, an improvement on 1.79 in 2015, according to figures released Friday by the International Air Transport Association.

The world turboprop hull loss rate improved to 1.15 per million flights from 1.18 in 2015 and remained well below the five-year average of 2.85. Every region except the CIS recorded an improvement.

There were  10 fatal accidents and 268 fatalities among the  3.8 billion travellers taking 40.4 million flights. This was less than the average of 13.4 fatal accidents and 371 fatalities per year across the previous five years.

For IATA’s 256 member airlines, the jet hull loss rate of 0.35 was better than the global average but a deterioration of the 0.22 figure achieved in 2015.

“The number of total accidents, fatal accidents and fatalities all declined versus the five-year average, showing that aviation continues to become safer,’’ IATA director general Alexandre de Juniac said. 

“ We did take a step back on some key parameters from the exceptional performance of 2015; however, flying is still the safest form of long distance travel. And safety remains the top priority of all involved in aviation.  The goal is for every flight to depart and arrive without incident. And every accident redoubles our efforts to achieve that." 

Aviation authorities have worked hard to reduce the accident rate over recent decades to keep a lid on the number of accidents. They are aware that even if they manage to keep the rate stable the steady increase in the number of flights will see the number of accidents rise.

Initiatives to reduce the rate included requiring all member airlines to take a standardised global audit called IOSA and programs targeting accident black spots such as Africa and the CIS, both of which enjoyed an accident-free year for jets in 2016.

The overall accident rate for Africa was 2.3 per million departures compared to 9.73 for the previous five years with continuing improvement in turboprop safety. 

The accident rate for IOSA members, 1.25 hull losses per million flights, was nearly twice as good as for non-IOSA airlines and three times better than over the previous five years. 

IATA said the industry was continuing to target areas such as loss of control in flight, controlled flight into terrain and runway excursions that data show will have the biggest impact on reducing accident risks.

Australian carrier Qantas will open its newest lounge next week as it ushers in a new era of premium entry for top-tier Brisbane customers.

The premium entry allows at the new Brisbane domestic business lounge gives top-tier frequent flyers an exclusive check–in area with bag drop, security screening and an escalator to the lounge precinct.

The concept was pioneered in Australia by rival Virgin Australia and this is the first foray by Qantas into the space.

“This investment is all about offering our customers a premium experience from the moment they arrive at the airport,” Qantas head of domestic lounges Helen Gray said.

“Premium Lounge entry is a first for Qantas and will streamline the departure process, so our top tier Frequent Flyers can move through the terminal quickly and maximise their time in the lounge.

The new lounge is part of upgrade which began last year with the opening of new international lounge and will be completed in coming months with an upgraded Qantas Club and a new invitation-only Chairman’s Lounge for high-flyers.

The new lounge is 30 percent bigger than the previous facility and offers seating for 350 people. The décor uses local materials and was inspired by the Queensland landscape.

Features include seasonal menus designed by celebrity chef Neil Perry, a bar serving premium Australian wines, craft beers and cocktails as well as Mexican dining in “The Cantina”.

The lounge also features the “Quench” hydration station first introduced in the Brisbane international lounge and specialising in non-alcoholic beverages.

Business services include wireless printing, power and data outlets throughout, Wi-Fi, TVs with Foxtel cable services and shower suites.

The lounge is open to Qantas customers travelling in Business, Platinum and Platinum One frequent flyers, eligible oneworld Emerald members and Emirates and China Eastern Platinum customers.

It can be cramped to the point of discomfort, the food is bland or non-existent and free drinks on many flights are few and far between.

But economy passengers are currently enjoying one advantage over their smug, premium counterparts: global average fares at the back of the plane have fallen faster than they have at the front.

Average global return fares, before taxes and charges, fell almost 11 per cent last year from $US407 to $US363 and are expected to fall further to $US351 this year.

That made the average fare, when adjusted for inflation, 63 per cent less than what it was in 1995.

But the latest financial report by the International Air Transport Association reveals that premium fares fell by just 7 per cent on average on key routes in 2016.

“Premium airfares generally held up better than those in the economy last year,’’ the report says. “As a result, premium’s share of revenues on the important trans-Atlantic and Europe-Asia markets and this helped support airlines’ overall financial performance.’’

The new report shows that airline profitability globally is heading south, albeit from historically high levels, although industry share price rises in February outgunned with wider global equity market to the tune of 4.6 per cent compared to 2.7 per cent.

“Airline shares have risen by a solid 6.8% over the past year,’’ It says. “However, this has been driven entirely by the North American index (up 18 per cent) where market expectations about profitability have improved the most.”

Industry-wide profits declined for a second quarter but oil prices, which can lead to increases in airfares, remained stable with Brent crude trading in a tight band of $US55-$57 a barrel over February.

Despite moves by OPEC and non-OPEC companies to limit production, the report says financial markets expect only a modest rise in oil prices over the next two to three years with prices expected to remain below $US60 per barrel over this period.

Another parameter affecting fares, capacity growth, remains strong globally.

In terms of the industry measure of available seat kilometres, capacity rose 8 per cent year-on-year in January.  The number of available seats was 0.4 per cent higher than in December and 6.7 per cent higher than January a year ago.

Eighty-six new aircraft were delivered in the month, up from 75 the previous January but down from 203 delivered in December.

This left the passenger load factor — the number of seats filled by passengers —  at its highest annual average last year and t has remained elevated this year to hit a record high for the past three months.

Global airline yields, a measure of average fares defined in US dollars per revenue passenger kilometre, have been falling since 2014 and dropped 8.8 per cent last year.

However, IATA says that the measure increased in seasonally adjusted terms in December when corrected for US dollar exchange rate fluctuations.
It was unable to say, however,  whether this marked a turning point for the downward trend in yields.

Certianly that is not the expectation of some airline executives, who have warned that increased compeition, the gowth of low-cost carriers and ongoing apacity growth will continue to keep fares low.