EGYPTAIR News 15 June

سيمخلا 15/6/2023

Emirates' Airbus A380 Fleet Is Worth 10 Times More Than Any Other

It has been revealed that Emirates' fleet of Airbus A380s is worth ten times its next closest competitor. Sometimes synonymous with the giant aircraft, Emirates is the largest operator of the type in the world. The superjumbo's value has risen significantly this year as more operators return the widebody to active service. For instance, the market value for a twelve-year-old A380 has risen 14.3% yearly to over $37 million. A recent A380 sale in December 2022 has the aircraft going for £25.3 million )$32 million(, up significantly from its estimated value of $27.48 million.

Who is still flying the A380?

The total number of routes served by the A380 has increased significantly this year relative to 2022. Less than half of A380s fleets worldwide remain temporarily parked or in long-term storage this summer. Over 200 aircraft switched to inactive in 2020 as international passenger traffic dropped.

As the A380's largest world operator by a significant margin, Emirates relies heavily on the widebody. The airline previously indicated it intends to operate its A380 into the 2030s as they form a substantial part of its Dubai hub operations. Lufthansa has also returned the A380 to service until 2027 at the earliest. On daily flights from Munich to Boston, the airline substitutes the aircraft for its older and smaller Airbus A340-600s. The Star Alliance carrier is also selling six of its 14 Airbus A380 aircraft back to Airbus. The value of the aircraft has since dropped due to "storm damage not covered by insurance." Airbus will now only pay €302 million )$327 million( for the six jumbo jets, with the proceeds likely going towards the 20 Airbus A350-900s on order by the German flag carrier. British Airways recently announced changes to its A380 schedule for the winter. It has 12 A380s, which seat 469 passengers across four classes. Fellow oneworld carrier Qatar Airways is also increasing A380 services this year. The airline will fly its 517-seat A380s to Paris for the rest of the summer.

Also, from major Gulf carriers, Etihad reactivated its second A380 earlier this year. The aircraft will fly from Abu Dhabi to London Heathrow with triple daily service, up from the previously scheduled double daily. Who is buying Superjumbos?

Recent transactions are few and far between but include the launch of a new Airbus A380 airline. UK-based startup carrier Global Airlines purchased the 15-year-old MSN 006 from Doric Asset Finance in May. The price is undisclosed, but according to Gary Crichlow, Head of Commercial Analysts at Aviation Values, it is currently worth $28.5 million, using standard depreciation metrics.

Etihad to increase frequency of flights to Rome

UAE’s national carrier, Etihad Airways, will increase the frequency of its flights between Abu Dhabi and Rome from seven to 11 times per week starting later this year.

From November 4, the four extra services will allow business and leisure travellers with better access by way of double-daily connections between the Italian and UAE capitals on Mondays, Tuesdays, Thursdays and Saturdays.

“We’re delighted to announce the expansion of our Rome service, which underscores our commitment to providing more flexibility and better travel options to our guests in Italy, the UAE and across our network,” said Arik De, chief revenue officer at Etihad Airways.

“With Etihad Airways increasing its Rome flight frequency, visitors from the UAE will now have even more opportunities to get a taste of la dolce vita or connect onwards to one of 45 Italian, European or Americas destinations with our codeshare partner ITA Airways.

“Our second Rome service has also been timed to provide optimised local flight times for those visiting Abu Dhabi, with an evening departure and a convenient morning arrival that allows for maximised time in the capital.”

The airline’s services between Rome and Abu Dhabi will be operated using its Boeing 787 Dreamliner aircraft which has 28 seats in business and 262 seats in economy. It’s worth noting that Emirates Airline and Etihad Airways recently signed a Memorandum of Understanding )MoU( to expand their interline agreement and provide travellers additional itinerary options when visiting the UAE. This summer, customers of each airline will be able to purchase a single ticket to fly into either Dubai or Abu Dhabi, with a seamless return via the other airport. In the initial stages of the expanded interline, each carrier will focus on attracting visitors to the UAE by developing inbound interline traffic from select points in Europe and China. The ‘open jaw’ arrangement will allow visitors to cover as much ground as possible when exploring Abu Dhabi, Dubai or any other emirate, saving time by removing the need to fly home via their arrival airport.

Airlines announce cargo embargo from Hosea Kutako airport

Qatar Airways and Lufthansa Airlines have announced the termination of cargo operations from Hosea Kutako International Airport from yesterday.

The two air carriers’ announcements follow on a Supreme Court judgement at the end of last week which upheld a High Court order that ground handling services company Menzies Aviation )Namibia( should cease operations at the airport.

Qatar Airways cargo sales and service executive Rajiv Sarjoo made the announcement in an email sent to cargo clients.

He said the company has implemented a full embargo on cargo to and from Windhoek until further notice.

“All shipments booked will be cancelled,” he said.

Lufthansa cargo key account manager Loretta Hall made a similar announcement. “Operations on 4Y [Eurowings Discover] flights will be terminated from 13 June until further notice. The last cargo flight will depart on 12 June,” she stated The Namibia Airports Company )NAC( notified Menzies Aviation )Namibia( after the delivery of the Supreme Court’s judgement on Friday that the company had to hand over its operations at the airport to the Namibian company Paragon Investment Holdings at the end of Monday.

However, Menzies Aviation filed an urgent application in the court on Monday in an attempt to stave off eviction from the airport. The company was given a couple of days’ breathing space in an order that judge Shafimana Ueitele gave after 22h00 on Monday. Ueitele directed that a High Court order dating from June last year, in which it was ordered that Menzies Aviation should be evicted from premises it has been using at the airport, should not be carried out until he has delivered his judgement on the company’s urgent application, which he postponed to tomorrow morning.

Menzies Aviation is still challenging the NAC’s decision in December 2021 to award the airport ground handling services contract to Paragon, in a joint venture with Ethiopian Airways, in a case that is pending in the Windhoek High Court.

CAUGHT OFF GUARD

The news of the embargo has caught the freight forwarding industry off guard, resulting in them spending most of Monday contacting their clients and rerouting cargo via South Africa.

This situation is further exacerbated by the fact that once a new ground handler is appointed the airline must implement measures such as audits and staff training, which may take up to two months to complete.

Transworld Cargo business development manager Fritz Kaufmann said the announcement will greatly impact his company’s operations.

“We have been exporting fish with support from the airlines, and now all the fish will have to be routed via road to South Africa before being exported to the world market. Although Ethiopian Airlines may have some capacity, approximately 90% of the fish will move via South Africa,” he said.

Kaufmann said the company may have to temporarily lay off casual employees at the airport.

ST Freight managing director Stanley Thomas described the move by the airlines as a setback for exporters.

“Why are Qatar and Lufthansa placing an embargo on cargo? Do they not trust Paragon?” he said.

Paragon Investment Holdings executive director Desmond Amunyela and his management team have reportedly been engaged in meetings with different airlines, including South African Airways, Qatar Airways and Lufthansa, who have been auditing Paragon’s operations at the airport since Sunday.

In an affidavit filed at the High Court on Monday, Menzies Aviation )Namibia( manager Emile Smith is claiming NAC gave the company an unreasonably short period of four days to comply with the notice that Paragon was to take over ground handling services at Hosea Kutako International Airport yesterday. Smith claims Paragon does not have the required capacity to provide ground handling services at the airport, and that Namibia’s aviation industry “stands at the brink of disaster as a result of the NAC’s irresponsible and irrational conduct”. He also alleges in his affidavit that NAC’s decision that Paragon should take over ground handling services at the airport “will have a devastating effect on the Namibian fishing industry”, and says Menzies Aviation is the only ground handling operator in Namibia with RA3 certification, which is an aviation security validation that the European Union grants to qualifying cargo handlers. Without Menzies Aviation’s RA3 certification being available to Namibian exporters, many of the country’s fish exporters would be compelled to export their fish through South Africa, at great additional costs, Smith says.

Airbus raises 20-year forecast for new jet deliveries

Airbus raised its 20-year forecast for new aircraft deliveries as airline customers grow their fleet to meet soaring travel demand and replace older jets with more fuel-efficient models to reduce their emissions.

The world's biggest plane maker expects 40,850 deliveries of new passenger and freighter aircraft over the next 20 years, up from 39,490 handovers in its previous prediction in 2022, according to its latest Global Market Forecast revealed on Wednesday ahead of the Paris Airshow next week.

Of the 40,850 new deliveries through to 2042, about 58 per cent are expected for fleet growth and 42 per cent for replacement.

About 80 per cent of the new deliveries, or 32,630 aircraft, will be narrow-bodies such as the Airbus A320 Neo and Boeing's 737 Max. The remaining 20 per cent, or 8,220 aircraft, will be wide-bodies and the bulk of these will be delivered to the Middle East. Gulf airlines such as Emirates and Qatar Airways already operate huge long-haul fleets that connect their hubs with airports around the world.

Airbus said the world's fleet would more than double to 46,560 aircraft in 2042, from 22,880 at the beginning of 2020 before the Covid-19 pandemic.

About 17,170 older aircraft will be replaced by newer fuel-efficient models, up from the 15,440 jets predicted in the previous forecast, while 23,680 planes will be used for fleet growth, Airbus said.

“The proportion of demand to replace older aircraft is likely to increase further going ahead to achieve the sustainability ambitions and commitments by the sector,” Airbus said.

Only 25 per cent of the global fleet currently in service is the latest generation fuel efficient aircraft, according to Airbus.

“The short-term priority for decarbonising the sector is to replace the remaining 75 per cent of previous generation fleets,” it said.

The growth outlook is primarily driven by economic expansion, a growing middle class, first-time flyers and growing trade, according to Airbus.

The plane maker forecasts that passenger air traffic will grow annually by 3.6 per cent over the next 20 years.

This median scenario could be affected by headwinds such as environmental regulations, energy availability and geopolitical instability, while tailwinds could include a “more stable world order” and further liberalisation, it said. Asia and the Middle East, led by China and India, will power air traffic growth, further shifting aviation industry's “centre of gravity” eastward, Airbus said.

Middle East growth

Airbus predicts 3,420 new passenger and freighter aircraft deliveries to the Middle East by 2042, up from the previous forecast of 3,020 handovers.

About 47 per cent of these will be wide-bodies, the biggest regional share, with the region being home to the so-called super-connectors such as Emirates.

Global air freight

Airbus forecasts demand for around 2,510 freighters in the next 20 years. Of these, around 920 are new-built, up from 890 jets in last year's forecast. In terms of air cargo, volumes dropped below 2019 levels although revenue remains above the industry's pre-pandemic performance, according to Iata.

Cargo volume is expected to hit 57.8 million tonnes this year, slipping below the 61.5 million tonnes carried in 2019, due to a “sharp” slowdown in international trade volumes, the airline industry body said last week.

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