InterVISTAS Aviation Intelligence Report April 2015

APRIL

2015 IN THIS ISSUE: PAGE 3

Feature Article PAGE 4

Regional Reports PAGE 8

Aviation News PAGE 12

Traffic Updates PAGE 15

InterVISTAS News

Foreword

FOREWORD

Hello and welcome to the second 2015 edition of the Aviation Intelligence Report.

Our feature article this month discusses the open skies debate between America’s biggest airlines and Persian Gulf carriers.

Steve Martin provides us with an overview of the key issues and stakeholder positions.

Our Regional Reports include: ■■ Austrian Airlines’ fleet renewal program, by Ian Kincaid, ■■ Proposed aviation policy changes in India, by Doris Mak, ■■ Expansion of Havana’s Jose Marti Airport, by Ken Currie ■■ New codeshare and interline agreements for Canadian carriers, by Debra Ward.

Deborah Meehan President and CEO InterVISTAS Consulting Group

We hope you enjoy this month’s edition.

Best regards, Deb Meehan and Vic Prins

Vic Prins Aviation Director/Managing Director Royal HaskoningDHV

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Feature Feature

THREE U.S. PASSENGER CARRIERS PUSH GOVERNMENT TO RECONSIDER OPEN SKIES; CARGO CARRIERS AND OTHERS URGE STABILITY

Steve Martin Senior Vice President Washington, DC The CEOs of American Airlines, Delta Air Lines, and United Airlines have initiated a significant campaign to convince the U.S. Government that it should reconsider the Open Skies agreements signed with the United Arab Emirates and Qatar. The “Big 3” U.S. airlines argue that the major carriers based there – Emirates, Etihad Airways, and Qatar Airways (the “Gulf carriers”) – have received US$40 billion in subsidies from their states. They claim the subsidies have created an unfair advantage – an un-level playing field – on which the U.S. carriers cannot compete. The Big 3 argue that the U.S. government should prevent the Gulf State carriers from adding any new capacity into U.S. markets while the matter is considered.

the U.S. government to review existing Open Skies agreements to ensure that state support cannot distort a fair international marketplace to the detriment of U.S. airlines and their workers.”

On the other side of the fence, the Gulf carriers have found sympathetic allies in a collection of U.S. parties, led by consumer groups, all-cargo carriers, and airport interests.

The Big 3 carriers alleged that the subsidies included loans, loan guarantees, grants of free land, government-funded airport infrastructure, government assumption of fuel hedges, favorable contracts with other government-owned entities and lower labor costs due to a lack of unionization in Qatar and the UAE.

Kevin Mitchell, Chairman of the Business Travel Coalition, said the three major U.S. airlines have “worked overtime” to communicate that they feel threatened by foreign carrier new entrants and disadvantaged by new customer-service oriented business models. “The overall impression is that the big U.S. network airlines want to lock out independent airlines that offer lower fares, newer airplanes, faster connections, more destinations and better service,” Mitchell said. He added that Open Skies policy had been “breathtakingly beneficial” for U.S. consumers and businesses.

Major airline labor groups also support the Big 3 and their position. Those include the Air Line Pilots Association (ALPA), The Teamsters’ Airline Division, the Association of Professional Flight Attendants, and the Allied Pilots Association. They argue that the “unfair competition” from the Gulf carriers threatens U.S. jobs. ALPA claimed that “…several Open Skies partner nations equip their airlines to do business globally through state policy and significant direct economic underwriting that undermines fair competition. Our union urges

Roger J. Dow, the head of the United States Travel Association, which represents airports, travel organizations and hotels, said that open skies have brought tremendous benefits for travelers via increased competition, especially since the major U.S. airlines have consolidated through bankruptcy and mergers. “This is one of many efforts where the big three U.S. carriers are trying to set the rules of who can do business here,” Mr. Dow said. “This is about stamping out competition, not about leveling the playing field.”

FedEx Express CEO David Bronczek said American, United and Delta “want the U.S. government to protect them from competition from able, attractive new entrants.” FedEx argues open skies agreements with Middle East states are crucial to its air cargo business and urges the U.S. government not to “capitulate to the interests of a few carriers who stand ready to put their narrow, protectionist interests” ahead of the U.S.’s broader economic interests.

FedEx is especially concerned about potential restrictions to its air cargo hub in Dubai. That hub serves as FedEx’s gateway to Africa. It also is a key connecting point for cargo to and from India and Asia.

The campaign waged by the major U.S. passenger airlines has created a new uncertainty in the aviation community about whether the U.S. will continue to honor the terms of any particular Open Skies aviation accord if certain U.S. interests believe that the competitive landscape has shifted. A total of 114 Open Skies agreements have been signed since the first accord in 1982.

Boeing 767-400 by Brian under CC BY 2.0

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Regional Reporta

EUROPE REPORT

Ian Kincaid Vice President, Economic Analysis London, UK London Airports Announce Development Plans Passenger traffic in southeast U.K. has been increasing in recent years. London’s Gatwick Airport experienced an increase in traffic volumes of over 3.8 million passengers in 2014, a 7.6% increase in traffic compared to 2013, while Stansted Airport served an additional 2.1 million passengers, equivalent to a 12% increase over the same time period.

Continued growth at both Gatwick and Stansted has led to announced developments at their respective facilities. Gatwick confirmed that by 2025 the airport intends to complete a second runway at the airport, which will be entirely privately funded. In addition, nearby residents who will be negatively impacted by the operations of a second runway, such as increased aircraft noise, will receive £1,000 ($1,469) per annum (adjusted for inflation) from Gatwick Airport towards their municipal taxes once the second runway opens.

Stansted airport by John Lord under CC BY 2.0

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With a capacity of 45 million passengers per annum, Stansted is currently completing renovations to the terminal building – a £80 million project which began in June 2013. In addition, the airport recently published its Sustainable Development Plan, which outlines improvements to its runway over the next 10-15 years, to assist Stansted Airport in operating more efficiently as it accommodates growth in traffic volumes.

Austrian Airlines Begins Fleet Renewal Program Austrian Airlines, a subsidiary of the Lufthansa Group, announced that it will be renewing its medium-haul fleet this fall. In particular, the renewal program involves replacement of its fleet of 21 Fokker 70/100 aircraft with 17 Embraer E-195s over the next two years.

The current Fokker aircraft each have 80- to 100-seats, averaging 21 years in age. By comparison, the E-195 jets have a 120 seat capacity, with an average age of four years each.

The larger and newer aircraft are expected to cut the airline’s operating costs, as the E-195 jets use approximately 18% less fuel per seat compared to the Fokker 70/100. The Embraer jets are expected to be in operation prior to the end of 2015.

The newer aircraft will be passed on to Austrian Airlines by Lufthansa CityLine, a regional airline headquartered in Munich and also a subsidiary of the Lufthansa group. The latter will obtain Bombardier CRJ900 NextGens from Lufthansa’s low-cost subsidiary, Eurowings, which has replaced its CRJ900 aircraft with used Airbus A320s.

Austrian Airlines had initially considered purchasing new C Series aircraft from Bombardier. However, the carrier opted to use aircraft from other members of the Lufthansa Group in order to launch its renewal program earlier.

CANADA REPORT Regional Feature Reports Debra Ward Executive Consultant Ottawa, Canada

New Codeshare and Interline agreements for Canadian carriers Canada’s carriers continue to extend their reach into key international markets through new codeshare and inter-airline agreements.

Air Canada announced a new codeshare agreement with Brazil’s domestic carrier, GOL Linhas Aereas Inteligentes. GOL will connect to Air Canada’s newly started, three-timesa-week non-stop service to Rio de Janeiro and non-stop daily service to São Paulo from Toronto. Brazil is a key emerging tourism market for Canada, with about $152 million in expenditures in 2012.

WestJet’s new codeshare agreement with Philippine Airlines’ (PAL) will allow PAL to begin marketing and selling WestJet-operated flights, and carry its passengers to key Canadian domestic points. The Philippines is a leading source of permanent residents in Canada and temporary foreign workers.

Last year, according to the government of Canada, close to 430,000 one-way trips were made between the two countries, making the Philippines Canada’s 14th largest air travel market.

Porter Airlines announced its first-ever interline agreement, a partnership with JetBlue Airways, with Boston Logan and Billy Bishop Toronto airports as the connecting hubs to multiple Canadian, U.S. and international markets with a leisure focus.

New Canada-U.S. Pre-Clearance announced for all modes Public Safety Minister Steven Blaney and U.S. Secretary of Homeland Security, Jeh Johnson

Air Canada A320 C-FKCO by BriYYZ under CC BY 2.0

signed the Agreement on Land, Rail, Marine and Air Transport Between the Government of Canada and the Government of the United States of America in mid-March. Referencing the positive outcomes and experience gained from U.S. pre-clearance services at Canada’s eight major airports, this new all-mode agreement would replace the current air transport agreement signed in 2001.

However, implementation will not come quickly. Both Canada and the U.S. must pass new legislation before the agreement can proceed, and it is likely that pre-clearance land solutions will vary widely from port to port depending on the availability of land and other factors. The government of Canada estimates that every day, about 400,000 people cross the Canada-U.S. land border.

Canadian tourism to re-invest in U.S. market With international tourism growth of about

10% in 2014, and a more forgiving Canadian dollar, the time is right for a re-investment in the U.S. market, according to federal tourism minister Maxime Bernier and Canadian Tourism Commission (CTS) CEO and president, David Goldstein.

Since 2001, travel from the U.S. declined by as much as a third. While the “thickening” of the U.S. border post-9/11 had a dampening effect, other issues, such as the relative strength of the Canadian dollar and the decision to pull away from marketing directly to Americans were likely contributing factors as well.

The current plan is to allocate about CA$5.7 million dollars, 10% of the CTC’s current budget to the U.S., and be bolstered by provincial marketing efforts and private sector contributions. Between 11.5 and 12 million Americans take trips of one night or longer to Canada every year.

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Regional Reports

ASIA PACIFIC REPORT

Doris Mak Director, Special Projects Vancouver, Canada

Qantas returns to profit in massive turnaround Qantas Airways reported its best first-half profit in four years as its turnaround program bore fruit and lower oil prices shaved fuel expenses.

Qantas said underlying profit before tax was A$367 million ($289 million), exceeding its own forecast in December of a profit between A$300 million and A$350 million. Shares in the company rose 6 percent to A$2.99 following the result – a five year high – and have more than tripled in value since hitting a record low of A$0.96 in late 2013.

Six months ago, Qantas reported a A$2.8 billion annual loss – the worst in the airline’s 94 year history. The result included an A$2.6 billion write down of the value of its aging international fleet of Boeing 747s. Excluding the write down and other one-off costs, Qantas

made an underlying pre-tax loss of A$646 million, compared to a A$186 million underlying profit a year earlier.

Qantas has faced tough challenges on several fronts due to increasing competition from rival Virgin Australia on domestic routes, intense competition from Middle Eastern and Asian carriers on international routes, high fuel prices and a strong Australian dollar. Last year, Standard & Poor’s downgraded Qantas credit rating to BB+, one level below investment grade, citing increased competition and forecasted losses.

The positive interim results have stemmed from a faster than expected implementation of a four-year A$2 billion efficiency plan that involves shedding 5,000 redundancies, early retirement of aircraft and wage freezes. Cost cutting

contributed A$374 million of the A$619 million improvement in underlying pre-tax profits in the first half of 2015, compared with a year earlier.

The carrier reported that unit costs fell 4.8 per cent in the first half. In comparison, lower oil prices delivered just A$33 million in benefits.

The drive towards greater efficiency also included canceling some aircraft orders and shutting down poorly performing international routes such as Singapore-London and SingaporeFrankfurt. After promising to put on two aircraft for every new Virgin jet on domestic routes to protect its 65 percent market share, Qantas and Virgin ended their capacity war last year.

In the last year, Virgin has canceled a number of domestic routes, including Exmouth-Perth and Albany-Busselton. Qantas claims that its yield and load factors are in the early stages of recovery.

With many fuel hedging contracts expected to expire, Qantas stands to benefit further in the second half of the year. However, given the uncertainty of global economic conditions and foreign exchange rates, the carrier will likely continue to face many challenges ahead.

India proposes ‘domestic flying credits’ to replace ‘5/20 rule’ Proposed policy changes may provide some relief for India’s struggling airlines. The government is considering a considerable simplification of procedures aimed at increasing competition in foreign air travel, as well as improving connectivity in India. Over the past seven years, competition, combined with high fuel costs and restrictive aviation policy, has led

Qantas A380 VH-OQB by Brian under CC BY 2.0

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ASIA PACIFIC REPORT Regional Feature Reports

Indonesia AirAsia by Kentaro Iemoto under CC BY 2.0

to more than US$10 billion in aviation losses in India.

For the last 20 years, Indian carriers have been subject to the so-called ‘5/20 rule’, a policy that dictates that airlines must operate for at least five years and have a fleet of 20 aircraft before they can fly abroad. Carriers such as Vistara have argued that this fundamentally puts newer airlines at a disadvantage while giving older airlines with more experience a head start. However, the system allows foreign carriers to operate to India unhindered by any such restrictions. Nearly 70 percent of India’s international traffic is presently carried by foreign-owned airlines. India’s traffic rights are also highly underutilized. About 60 percent of India’s foreign traffic rights are unused.

Local airlines are also forced to deploy at least 10 percent of their capacity on links to India’s remote locations, such as Lakshadweep, Assam, Jammu and Kashmir. In some cases, loss-making carriers have had to fly large aircraft on nonviable routes, with load factors as low as 10 percent. This policy was originally instituted as a way to develop regional connectivity. Involving

smaller private operators likely would have been more effective in achieving this objective.

However, elevated customs duties, poor airport infrastructure, and mandatory training costs as high as for commercial airlines have resulted in a decline in the number of such aircraft.

A new system of ‘domestic flying credits’ (DFCs) is being proposed to address some of these structural inefficiencies. Airlines will have to accumulate DFCs by flying to more cities in India and will have the right to fly overseas once the credits cross a certain threshold. For new airlines, it is 200 DFCs while for existing carriers it is 300 DFCs. The credits are calculated on the basis of revenue per passenger kilometre flown

by an airline in a year. The ministry has also proposed a buy-and-sell arrangement under which 25 percent of such DFCs can be purchased from regional airlines or helicopter companies.

Vistara will be among the biggest beneficiaries of the new rules. Under the ‘5/20 rule’, the carrier would have had to wait until 2020 before starting international operations. New rules will allow it to start flying abroad next year.

AirAsia and GoAir will also benefit. The proposed changes may also help by relieving airlines of the necessity to operate in thin markets that may not match their fleet.

Dal Lake by Basharat Alam Shah under CC BY 2.0

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CEO’s Foreword message Aviation News

MIDDLE EAST/AFRICA

Etihad Airways Announced New East India Route On February 15th Etihad Airways commenced a new daily route between Abu Dhabi and Kolkata. This expands their Indian network to 11 destinations and 15 destinations in combination with their network partner Jet Airways. Moreover, the service to Kolkata allows connections to major North American hubs, such as San Francisco, New York, Chicago and Toronto. Utilizing an A320, the service can carry 136 passengers, with 16 business seats and 120 economy seats.

South African Airlines on Target with 90-Day Plan South African Airlines, the flag carrier of South Africa, has completed two-thirds of their 90-day action plan. This strategy, which began after responsibility for the state-owned company was transferred to the National Treasury, is designed to return the airline to financial stability. SAA projects financial performance to improve by R$ 1.25 billion due to this plan’s implementation.

Sanad Increases Investment in Etihad Holding Sanad Aero Solutions GmbH (Sanad) has further increased their stake in Etihad Airlines, enlarging their investment to US$450 million.

Sanad began their relationship with Etihad in 2011, financing 11 GE90 and Rolls-Royce

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Trent spare engines. In 2013 they expanded their investment to US$125 million in spare components and other equipment. “This latest financial agreement builds on the growing relationship between the two companies, enabling us to benefit from existing synergies, maximize the economics of our assets, and lease spare engines and components at very competitive costs” stated James Hogan, Etihad Airways President and CEO.

Qatar Airways Expands Ownership of IAG Beyond codeshare agreements with IAG and its membership in oneworld alliance, Qatar has increased its ownership of IAG to 9.99%. As part of EU regulation, non-EU shareholders can not own a majority share of IAG, limiting the current ownership potential for Qatar Airlines. “IAG represents an excellent opportunity to further develop our Westwards strategy. Having joined the oneworld alliance it makes sense for us to work more closely together in the near term and we look forward to forging a long-term relationship,” said His Excellency Mr. Akbar Al Baker, Group Chief Executive of Qatar Airways.

ASIA

Skymark Files For Bankruptcy Protection while Restructuring As of January 28, Skymark Airlines, Japan’s largest budget airline, filed for bankruptcy protection, with a liability of Y$71 billion.

They are currently negotiating with possible sponsors to keep afloat as they undergo restructuring. Two possible sponsors are

All Nippon Airways Co., a rival Japanese airline, and the Integral Corp., a Tokyo-based investment fund. The top three creditors are GE Capital Aviation Services Ltd., AWAS Aviation Trading Ltd. and Aviation Capital Group Corp., which collectively own 51% of the debt.

Air China Adding Colombo, Tokyo, Melbourne Routes Air China Limited, China’s national flag carrier, is expanding their Asian network. In 2015, new flights will be added to Colombo, Melbourne and Taipei, from Chengdu, Beijing and Nanchang respectively. The Colombo and Melbourne routes will be served by Airbus A330s, with 4 weekly flights, with the Melbourne route becoming a daily service on October 25, 2015. The Taipei-Nanchang route will run weekly and will be serviced by a Boeing 737-800.

SpiceJet Financial Plans Get Government Approval Following SpiceJet’s financial difficulty in December of 2014, the Indian government announced it will help defend the airline from its lessors. The government will help the airline to retain its aircraft by unilaterally preventing the owners from repossessing them. In the last quarter of 2014, SpiceJet reported a loss of US$ 44.1 million, forcing co-founder Ajay Singh to provide financial support to continue operations. Despite this infusion, some payments on their leased aircraft were not made, causing the owners to try and repossess the aircraft through court action.

Feature Aviation News

Australian Airlines End International Fuel Surcharges With the recent decline in crude oil prices, Qantas and Virgin Australia will be eliminating their passenger fuel surcharges. Currently, Qantas charges US$ 130 and Virgin Australia charges US$ 540. However, the removal of these fees will not result in lower ticket prices as the difference will be absorbed by base seat prices. As a result, Virgin Australia passengers will only see a reduction of US$ 32 while Qantas passengers will not see any change.

Fiji Airways Announces Record Profits in 2014 Fiji Airways has announced record profits for the 2014 financial year, ending on December 31. They reported an after-tax profit of US$ 55.6 million compared to US$ 8.7 million in 2013. This increase is reflected in their operational statistics, with a 4.5% increase in passenger volume, to 1,244,596 passengers flown, and an 8.2% improvement of load factor, to 83% in 2014. With these successes, Fiji Airways is planning to expand their network in 2015, with the addition of SuvaSydney and Suva-Apia routes, and increased frequencies on their Australia, New Zealand, Hong Kong, Tuvalu and Samoa routes.

CANADA

11-year contract with their pilots’ union. The agreement was tentatively agreed upon on January 13, 2015 and will be in effect until December 31, 2025. ALPA, the Air Line Pilots Association, has represented Jazz’s 1,380 pilots since 1997. “Reaching a new agreement with our pilots serves as a catalyst for our transformation to a stronger competitor in the regional aviation industry,” said Jolene Mahody, Chief Operating Officer of Jazz.

WestJet Reports Record Full-year and Fourth Quarter Results WestJet has reported strong yearly and quarterly results. The airline reported quarterly earnings of CA$91 million, up 34% year-over-year. In 2014, they earned CA$317 million, compared to CA$269 million in 2014.

This is WestJet’s the 39th consecutive quarter of profitability. As a result of these earnings, the airline has achieved a return on capital investment of 14.3% in the fourth quarter, up from 13.8% the previous quarter and is the 10th consecutive quarter exceeding 12%.

Laurent Beaudoin Retires as Bombardier CEO After 50 years on the Board of Directors of Bombardier, Mr. Laurent Beaudoin is retiring from his position as Chairman and taken on the honorary title of Chairman Emeritus. Mr. Pierre Beaudoin has been appointed to the position of Executive Chairman and Mr. Alain Bellemare joined the board as President and Chief Executive Officer. These changes were effective February 13, 2015.

Air Canada Top Airline in Customer Loyalty Air Canada has been named the top airline for customer loyalty in 2015, as measured

by Brand Keys 2015 Customer Loyalty Engagement Index. This is Brand Keys 19th annual survey, which measures a brand’s ability to fulfill customer expectations, compared to their competition. Over 36,000 U.S. and Canadian consumers were surveyed, to examine 540 brands across 64 different categories.

Cargojet Launches Air Cargo Network for Purolator & Canada Post Cargojet recently announced that they have completed the transition and are currently providing all air cargo services to Canada Post and Purolator (91% owned by Canada Post) across Canada. Cargojet has expanded its fleet, with the addition of twelve new generation Boeing 757-200F and Boeing 767-300F aircraft, to provide the capacity to take on this additional business. “The enhancements to our air cargo network will not only provide significant additional capacity but also provide operating efficiencies and improved service levels to all customers, with more direct flights; later departures and earlier arrivals, at locations across Canada”, said Ajay K. Virmani, President & CEO of Cargojet.

Jazz Pilots Ratify 11 Year Agreement Air Canada Jazz has successfully ratified an

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Aviation News Halifax Airport Partially Re-opens Runway On March 29th, Air Canada Flight 624 landed 335 meters short of the runway, skidding another 335 meters before coming to a rest.

Of the 133 passengers and five crewmembers, only 23 were taken to hospital for treatment, with no fatalities. As a result of this incident, Halifax’s main runway had to be closed for repairs. As of April 9th, the runway has passed surface tests, had its lighting checked and passed environmental assessment.

However NAV Canada has not yet had time to repair their antenna array, which was damaged. As such no timeline is given for the commencement of full flight services.

EUROPE

Lufthansa Passengers Experience Solar Eclipse In a rare opportunity, passengers on board the Lufthansa’s Chicago-Munich flight, experienced the total solar eclipse on March 20, 2015. This required a minor change in flight path, placing the flight southeast of Iceland when the eclipse occurred. This provided the passengers with four minutes of total eclipse time, a minute longer in duration than any point where the eclipse was visible on the ground. In addition to the normal inflight services, protective UV glasses and a special informational brochure were added to the seat back pockets.

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TAP’s Privatization Limits Layoffs Prospective buyers of Portugal’s flag carrier TAP will be prohibited from large scale layoffs as long as the state remains a shareholder.

These sales conditions were implemented after negotiations last Christmas, when the union threatened strike action. The privatization of TAP was mandated by the IMF under Portugal’s 2011 bailout plan. The airline has approximately a €1 billion of debt and the government is forbidden from injecting capital under European Union rules.

Air France Transform 2015 Results Air France has completed their Transform 2015 financial plan, reducing their ex-fuel unit cost by 7% compared to 2011. However, the airline has been under competitive and structural pressure. Notable pressures were the 2014 pilot strike, which cost the airline up to €500 million, and increased competition from Gulf carriers. As a result, Air France plans to cut approximately 500 ground staff and 300 flight attendants through a voluntary departure plan.

Ireland Applies for €2.5m from Globalization Fund to Support Former Workers Ireland has applied to the European Commission for €2.5 million from the European Globalization Adjustment Fund in order to assist former employees of Lufthansa Technik Airmotive Ireland Ltd. Due to increased competition for aircraft and

aircraft components from elsewhere in the world, Lufthansa dismissed 424 workers. The fund would be used to assist these workers with education, training and finding job opportunities.

LATIN AMERICA

Aerolíneas Argentinas Signs Codeshare with Etihad Airways Aerolíneas Argentinas has announced a code share with Etihad Airways. This agreement permits Etihad Airways passengers to reach South American destinations through Buenos Aires. The EY code will be added to flights beyond Buenos Aires to regions including: Asunción, Bariloche, Bahía Blanca, Comodoro Rivadavia, Córdoba, El Calafate, Iguazú, Mar del Plata, Mendoza, Montevideo, Neuquén, Río Gallegos, Río Grande, Rosario, Salta, San Juan, Santiago de Chile, Trelew, Tucumán and Ushuaia.

Avianca Signs MoU for 100 A320neo Aircraft Avianca has signed a Memorandum of Understanding (MoU) for 100 A320neo aircraft, giving them a combined current order of 200 Airbus planes. Avianca has worked with Airbus on modernization and expansion programs for years. “After a thorough technical evaluation, we selected the A320neo Family for its excellent fuel efficiency, reliability and comfort,” said Fabio Villegas Ramirez, Avianca Chief Executive Officer.

Aviation News

LATAM Adds New Flights to Barcelona and Expands Operations to Madrid The LATAM Group has announced, as of October 1, three times weekly flights between Barcelona via São Paulo. The route will be serviced by Airbus A330s, configured for 183 Economy Class seats and 32 Premium Business seats. “This is excellent news for our passengers. We are inaugurating our sixth port of entry into Europe and our second destination in Spain, further expanding our connections with the continent and increasing products for customers that travel for tourism or business,” said Nicolas Goldstein, CEO of Long Haul Business at LATAM Group.

Delta Retains Haneda slots The U.S. Department of Transportation has ruled that Delta Airlines can retain their Haneda Airport slots, with specific conditions. The review was commenced in late 2014 following Delta’s 2014-15 winter cutback of their Seattle-Haneda route. The new conditions stipulate year round service, with a minimum of two flights per seven-day period. If Delta violates these conditions, absent of DOT approval, American Airlines has proposed to provide Haneda service through Los Angeles.

SFO Develops Technology To Track App-based Transportation The San Francisco International Airport (SFO) has announced the development of a program to track app-based forms of ground transportation. The system will allow airports to establish GPS-based “geo-fences” to track the activities of app-based forms of ground transport, such as Uber or Lyft. The data can then be used for road planning, fee comparison and facility improvements. “We are proud to be an industry leader, by creating a solution for tracking app-based airport ground transportation,” said Airport Director John L. Martin.

LaGuardia Reopens Runway After Aircraft Incident On March 6, 2015, Delta’s Atlanta to LaGuardia flight skidded into a fence at approximately 11:05 AM. All 125 passengers and five crew were safely taken off the plane with no reported injuries. Following this incident, Runway 13 was closed, as is standard procedure, in order for maintenance and investigation. The Port Authority, Delta and other personnel worked through the night, allowing the runway to be re-opened at 10:28AM the next day, less than 24 hours after the incident.

Boeing Delivers 250th Dreamliner On March 17, Boeing announced the delivery of the 250th 787 Dreamliner. The aircraft was assembled at Boeing’s North Charleston facility in South Carolina, the first such plane produced at this location, for United Airlines. “The Dreamliners have allowed us to fly longer distances with greater fuel efficiency and open new direct routes such as Los Angeles to Melbourne, while providing our customers and employees with a more comfortable flying experience” said United’s Vice President of Fleet Ron Baur.

UNITED STATES

FAA Streamlines UAS Waiver Process The FAA has released streamlined rules for authorization of commercial unmanned aircraft (UAS). Previously each application for the Section 333 exemption would have to be applied for and be processed individually which could take up to 60 days. The new process grants a Certificate of Waiver or Authorization for flights below 200 feet (61 m), for aircraft that weigh less than 55 pounds (25 kg). Additionally, operators have to comply with daytime Visual Flight Rules, operate with visual line of sights of the pilot and stay a certain distance away from air and heliports.

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Foreword Aviation Traffic

AIRLINE DATA – ASIA PACIFIC Asia-Pacific Airlines Release Traffic Figures for March 2015 Airline

Source: Note:

Traffic (RPKs – millions)

Capacity (ASKs – millions)

8,367

10,711

78.1%

h3.5%

h0.9%

h1.9pts

Load Factor

6,762

8,999

75.2%

i3.5%

i1.3%

i1.6 pts

4,615

6,377

72.3%

h3.7%

h4.7%

i0.7 pts

9,169

10,801

84.9%

h11.7%

h7.8%

h3.0 pts

Traffic (RPKs – millions)

Capacity (ASKs – millions)

Load Factor

18,6457

22,371

83.3%

i0.1%

i0.3%

h0.2 pts

n/a

n/a

n/a

16, 672

20, 963

79.5%

h7.4%

h4.8%

h1.9 pts

Carrier traffic reports.

Qantas December statistics not released at time of publication.

AIRLINE DATA – EUROPE European Airlines Release Traffic Figures for March 2015 Airline

1

2 Notes:

Source:

1. Includes Lufthansa Passenger Airlines, SWISS, and Austrian Airlines.

2. Includes British Airways, Iberia (including Iberia Express), and Vueling. Vueling traffic is currently accounted as non-premium traffic.

Carrier traffic reports

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Feature Aviation Traffic

AIRLINE DATA – NORTH AMERICA North American Carriers Release Traffic Figures for March 2015 Traffic (RPMs – millions)

Airline

Capacity (ASMs – millions)

Load Factor

Canada 5,469

6,583

83.1%

h12.9%

h11.1%

h1.4 pts

1,930

2,373

81.3%

h1.5%

h4.8%

i2.7 pts

n/a

n/a

n/a

17,349

20,967

82.7%

i0.7%

i0.6%

i0.1 pts

18,400

22,413

82.1%

i0.6%

i0.9%

h0.3 pts

17,546

20,635

81.5%

h2.5%

h2.9%

i2.3 pts

10,24

12,113

84.5%

h6.7%

h4.4%

h1.8 pts

684

794

86.1%

h6.2%

h3.9%

h1.9 pts

United States

1

2

3

Notes:

Source:

1. Represents the combined traffic results of American and US Airways.

2. Results include flights operated under contract carrier arrangements.

3. Total system includes scheduled service, fixed fee contract.

Carrier traffic reports

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Aviation CEO’s Foreword message Traffic

AIRPORT TRAFFIC: SELECTED CANADIAN AIRPORTS

2014

Summary of Total Year-Over-Year Passenger Traffic Performance at Selected Canadian Airports Toronto

Vancouver

Montréal

Calgary

Edmonton

Ottawa

Winnipeg

Halifax

Victoria

Kelowna

Saskatoon

Regina

February

+6.5%

+6.7%

+2.7%

+9.4%

+4.8%

-0.2%

+2.2%

+0.2%

+5.4%

+8.5%

+6.6%

+3.9%

March

+2.0%

+6.9%

-2.8%

+6.4%

+5.0%

-3.5%

+0.8%

-6.5%

+3.7%

+7.5%

+5.5%

+2.7%

1st Quarter

+3.9%

+7.5%

+0.8%

+7.6%

+3.4%

-1.5%

+1.1%

-2.6%

+4.7%

+7.8%

+6.1%

+3.5%

April

+7.2%

+9.3%

+3.3%

+9.7%

+8.3%

-0.1%

+7.7%

+0.3%

+6.8%

+11.0%

+8.0%

-0.2%

May

+7.0%

+10.0%

+6.0%

+6.5%

+4.2%

+0.5%

N/A

+5.6%

+5.0%

+6.5%

+3.9%

-0.2%

June

+7.2%

+7.8%

+4.2%

+0.5%

+4.6%

+5.6%

+5.0%

+6.5%

+3.9%

+4.3%

+10.0%

4.3%

2nd Quarter

+7.2%

+9.0%

+5.3%

+8.0%

+6.3%

+1.3%

+6.0%

+3.5%

+4.8%

+7.8%

+7.3%

+2.6%

July

+10.8%

+7.3%

+7.4%

+6.4%

+5.9%

+2.0%

+6.3%

+3.7%

+8.0%

+5.7%

+10.0%

+6.2%

August

+9.8%

+8.0%

+6.5%

+5.9%

+6.9%

+0.5%

+8.8%

+6.0%

+7.7%

+6.4%

+8.5%

+2.8%

September

+7.5%

+8.8%

+6.0%

+6.1%

+8.6%

+2.7%

+7.2%

+5.9%

+6.3%

+8.7%

+6.7%

+5.6%

3rd Quarter

+9.5%

+8.0%

+6.6%

+6.3%

+7.1%

+1.7%

+7.4%

+5.2%

+7.3%

+6.8%

+8.5%

+4.8%

October

+8.6%

+7.0%

+6.5%

+7.1%

+8.3%

+3.5%

+7.3%

+4.5%

+7.3%

+6.1%

+7.9%

+7.0%

November

+7.0%

+6.0%

+5.7%

+4.5%

+1.7%

+0.9%

+5.6%

+2.1%

+5.5%

+4.4%

+4.8%

-2.4%

December

+6.1%

+6.6%

+4.4%

+4.4%

-0.6%

+1.0%

+7.4%

-0.8%

+3.5%

+6.8%

+4.3%

+0.7%

4th Quarter

+7.3%

+6.5%

+5.5%

+5.4%

+3.1%

+1.8%

6.9%

+2.0%

+5.4%

+5.8%

+5.6%

+1.7%

Full Year

+5.2%

+7.8%

+4.6%

+6.8%

+9.4%

+0.8%

+5.3%

+2.3%

+5.6%

+7.0%

+6.9%

+3.1%

January

+7.0%

+3.7%

+3.2%

+2.3%

+11.6%

+1.0%

n/a

-0.9%

+3.0%

+2.7%

+0.9

+2.8%%

AIRPORT TRAFFIC: SELECTED U.S. & INTERNATIONAL AIRPORTS Summary of Total Year-Over-Year Passenger Traffic Performance at Selected Canadian Airports

2014

United States

International

Atlanta

Chicago

Los Angeles

Dallas

Denver

New York JFK

London Heathrow

Paris CDG

Frankfurt

Beijing

Tokyo Narita

Mexico City

February

-4.1%

3.2%

+6.5%

+1.6%

+2.2%

+1.7%

+1.0%

+3.4%

+1.8%

+3.6%

+4.7%

+10.4% +7.0%

March

+2.2%

4.7%

+4.3%

+3.0%

+2.0%

-1.3%

-2.8%

+0.0%

+0.9%

-3.5%

+7.9%

1st Quarter

-1.5%

0.3%

+5.8%

+3.5%

+1.7%

-0.9%

+0.5%

+2.8%

+2.0%

+2.9%

+7.8%

+9.1%

April

+3.1%

11.5%

+7.6%

+4.7%

+3.2%

+13.6%

+6.7%

+7.4%

+0.9%

2.1%

+2.0%

+12.4% +11.8%

May

+7.8%

+5.1%

+6.4%

+4.8%

+2.1%

+4.8%

+2.2%

+3.2%

+3.7%

+0.6%

+2.3%

June

+1.8%

+5.6%

+6.7%

+6.1%

+2.4%

+5.3%

+1.1%

+6.1%

+1.0

+.01%

-3.2%

+5.9%

2nd Quarter

+4.2%

+7.2%

+6.9%

+5.2%

+2.6%

+7.7%

+3.2%

+5.5%

+1.9%

+0.9

+0.3%

+10.0%

July

+3.6%

+7.7%

+6.3%

+6.7%

+2.2%

+5.2%

+0.5%

+3.9%

+2.3%

+3.7%

-1.7%

+4.8%

August

+2.6%

+4.8%

+6.1%

+6.3%

+2.2%

+7.6%

+1.3%

+6.2%

+5.4%

+0.7%

-1.9%

+9.2%

September

+2.9%

+3.1%

+5.0%

+10.1%

+3.3%

+8.3%

+0.3%

-12.3%

+5.9%

+1.2%

-3.0%

+6.9%

3rd Quarter

+3.0%

+5.3%

+5.8%

+7.6%

+2.5%

+7.0%

+0.7%

-0.4%

+4.5%

+1.9%

-2.2%

+6.9%

October

+4.3%

+4.7%

+6.3%

+2.1%

+3.1%

+6.9%

+0.4%

+4.5%

+1.4%

+2.9%

-2.4%

+10.3%

November

+3.9%

+5.1%

+6.4%

+1.0%

-0.1%

+6.5%

+1.1%

+2.8%

+2.6%

+9.1%

-2.2%

+8.8%

December

-0.5%

+5.7%

+2.6%

+8.7%

-2.6%

+3.3%

+2.4%

+3.9%

-2.0%

+6.7%

-4.2%

+7.5%

4th Quarter

+2.6%

+5.1%

+5.0%

+3.9%

+0.1%

+5.5%

+1.3%

+3.8%

+0.8%

+6.1%

-2.9%

+8.8%

Full Year

+2.1%

+4.6%

+5.9%

+5.1%

+1.7%

+5.1%

+1.4%

+2.8%

+2.4%

+2.9%

+0.6%

+8.6%

January

+6.6%

+15.8%

+0.4%

-0.4%

-1.7%

+5.8%

+1.3%

+2.5%

+1.3%

-1.2%

-6.7%

+6.4%

14 aviation intelligence report | InterVISTAS

Regional Tourism Organization Four Inc. (RTO4 Inc. - Waterloo, Wellington, Huron & Perth) in Ontario We are pleased to have been selected to provide destination development support to Regional Tourism Organization Four Inc., RTO4 Inc., (Waterloo, Wellington, Huron & Perth) in Ontario. This assignment includes a strategic planning session with all the four communities and as well as market development plans for two of them.

■■

■■

College Station, TX (CLL) Leakage Study We are pleased to have been chosen by CLL to provide a leakage study. College Station / Bryan is interestingly located at the center of a triangle formed by three interstate highways (10, 35, and 45). We look forward to working on this project and our continued relationship with CLL. Syracuse, NY (SYR) Leakage Study We are delighted to announce that we have been contracted by SYR to provide a leakage study to help better understand the passenger demand from airports in smaller communities.

We look forward to our continued relationship with SYR.

■■

All Nippon Airways (ANA) will begin daily nonstop service between its hub at Tokyo Narita Airport and Houston Bush Intercontinental Airport. This service will commence on June 12, 2015 and will be ANA’s 10th destination in North America, providing a gateway to Central and South America from Japan and many other Asian countries.

Southwest Airlines will begin its first phase destination list from Houston Hobby with new nonstop service between San Jose, Costa Rica and Houston Hobby in October 2015. Other destinations include Cancun, Mexico City, Puerto Vallarta, and San Jose del Cabo/Los Cabos, Mexico; San Jose, Costa Rica; and Belize City, Belize. Houston is one of Southwest Airlines’ original cities and supports the 5th busiest operation in the carrier’s network of more than 90 airports across six countries, with approximately 150 departures daily from Houston (Hobby).

Volaris will begin nonstop service between Houston Bush and Guadalajara

■■

InterVISTAS News

THE INTERVISTAS GROUP CONTINUES TO BE ACTIVE IN DELIVERING A DIVERSE RANGE OF CONSULTING PROJECTS AROUND THE WORLD. SOME OF THE NEW PROJECTS WE ARE WORKING ON ARE LISTED BELOW:

in March 2015. Service will operated three times weekly (Monday, Wednesday, Saturday) with a combination of Airbus A319 and Airbus A320 aircraft.

WestJet will commence new service between Houston Bush and Calgary on September 8, 2015. Service will operate daily with a Boeing 737 aircraft.

Congratulations Houston Airport System!

Congratulations to Prince Mohammad Bin Abdulaziz International Airport on their New Terminal Opening!

We are delighted to announce that our client, Prince Mohammad Bin Abdulaziz International Airport in Madinah, Saudi Arabia has opened its new terminal! Construction of the 1,615,000ft2, LEED Gold certified terminal was completed in December 2014 and after a 3 month testing period, was approved for commercial flights.

To read the articlew in Passenger Terminal and for a link to the interview with GMR Architects, click here.

We are delighted to announce that Houston Airport System has recently won the following new service: ■■

EVA Air will begin the first nonstop passenger flight since pre-2001 between Houston and Taiwan. The four times weekly Houston – Taipei service will begin on June 19, 2015. It will operate this route 3 times/week (Day 357 from TPE, Day 146 from IAH), and will add a 4th weekly flight on July 7, 2015. This will be the airline’s 5th destination in the United States.

InterVISTAS | aviation intelligence report 15

Speaking Engagements

held on April 29 – 30, 2015, at the Delta Grand Okanagan Resort and Conference Centre in Kelowna, British Columbia. Mike Tretheway will be the guest speaker at the workshop luncheon on April 30, 2015 and will present the State of the Industry.

Canadian Business Aviation Association 2015 Convention Mike Tretheway will present Economic Impact of Business Aviation in Canada at the Canadian Business Aviation Association (CBAA) 2015 Convention on June 15 to 18, 2015, at Fuel-H18 in Montreal, St Hubert Airport.

This year’s workshop topics include Capital Planning and Construction, People - Our Most Valuable Resource and Best Practices and Regulations. The BCAC Annual General Meeting will follow the workshop on April 30th.

Click here for the link to the study that was completed by InterVISTAS in 2014.

The BCAC was established in 1938 and is a member-driven organization that represents and promotes the shared interests of the British Columbia aviation community.

This year’s convention will deliver critical information on what is happening in business aviation straight from industry leaders and will highlight a made-in-Canada opportunity to network with suppliers, manufacturers, government officials, and fellow CBAA members.

In partnership with its members, the community and other stakeholders, the BCAC works hard to positively affect the well-being of British Columbia’s aviation sector.

Check the CBAA Convention 2015 website registration will be open soon Airports Canada 2015 The 2015 Canadian Airports Canada Conference Exhibition was held on March 25 to 27, 2015, at the Fairmont Hotel Vancouver in Vancouver, British Columbia.

Mike Tretheway presented at Session #1 - The Connected World, an Aviation Outlook.

BCAC Airports Workshop 2015 The Annual BCAC Airports Workshop will be

16 aviation intelligence report | InterVISTAS

(Colorado Association of Destination Marketing Organization) CADMO Summer Retreat Paul Ouimet will speak at the Colorado Association of Destination Marketing Organization (CADMO) Annual Retreat in Pagosa Springs, Colorado on June 18 -19, 2015.

The retreat will bring together DMOs from all over the state to share information, challenge one another and learn about developing trends, changing practices and future opportunities for DMOs. (California Travel Summit) CTS 2015 The 2015 California Travel Summit will be held at Portola Plaza & Monterey Conference Center in Monterey, California on June 17 - 19, 2015.

Paul Ouimet will speak at this world-class convention where the best of quality education and development for travel, tourism and hospitality professionals can be found.

Registration is now open on the California Travel Association website.

Staff Announcements

InterVISTAS welcomes the following new team members:

Michael Crockatt, Senior Vice President, Air Service & Business Development, Ottawa/ Vancouver Offices Prior to joining InterVISTAS, Michael was Vice President, Business Development and Marketing for the Ottawa International Airport Authoritywhere his responsibilities included strategic planning, air services marketing to passenger and cargo airlines, retail and commercial development, customer service, airport planning, government relations, parking, ground transportation, and passenger facilitation. Before moving to Ottawa, Michael was the Director of Marketing for cargo and passenger services with the Winnipeg Airports Authority.

Michael and his teams in Winnipeg and Ottawa attracted dozens of new passenger and cargo flights to their respective communities, and helped to grow nonaeronautical revenue through new retail and dining concepts, and by strengthening the airport parking business. He spearheaded innovative passenger experience programs, targeting improved airport service quality results in critical areas important to airport users and led multiple boards and management teams through successful strategic planning processes.

Michael is very active within the tourism and transportation industries and other business groups. He is the immediate past-Chair of the Tourism Industry Association of Canada (TIAC)

Board of Directors and the immediate pastChair of the Board of Directors with Ottawa Tourism. He is the Chair of the organization’s Tourism Development Council and Vice Chair of the Board of Directors with the Ottawa Chamber of Commerce.

Michael has been recognized both nationally and internationally for his many accomplishments in the airport and tourism industries. In 2013, he was named one of Airport Business Magazine’s Top 40 under 40. In 2012, he was a recipient of the Queen Elizabeth II Diamond Jubilee Medal, recognizing his contributions to Canada. At the 2011 Ottawa Tourism Awards, he was named Tourism Volunteer of the Year, and in 2010, Michael received the Ottawa Business Journal Forty-Under-40 Awards.

Michael is a graduate of the University of Manitoba, with a Master’s degree focusing on the aviation industry and regional economic development.

We are delighted to welcome Michael to our team!

Daniel Chow, Analyst, Vancouver Office Daniel has a background in accounting finance and a passion for the aviation industry. Most recently, he worked with Whitewater West Industries, has worked for YVR as Passenger Service Lead Agent and was a research assistant for the Air Transportation Research Society at UBC. Daniel holds his Certification in transportation and logistics and is currently pursuing his CMA. Welcome aboard, Daniel!

Alexis Kereluk, Manager, Tourism Strategy, Vancouver Office Alexis has a strong background in business development and sales in the tourism industry. This experience makes her an ideal fit for our tourism group. Most recently, she worked at MCI Group Canada selling destination and event management consulting services to an international client base. Alexis brings with her skills in financial costing, strategic sales/business plans and project management and more. She holds a BBA (finance & management science) from SFU. Welcome to the team, Alexis!

Justin Yee, Reception/Admin Assistant, Vancouver Office Justin has a Bachelor of Art in International Relations from UBC. A highlight from his education is during one his internships he assisted the Speaker of the Selangor State Assembly, Malaysia and had the opportunity to examine Westminster parliamentary practices in Commonwealth countries and write a report with recommendations to improve the democratic process in the legislative assembly, which aided in democratic reform. Most recently, he was a Program Staff at Cantrav Services where he managed transportation of corporate groups and coordinated touristic and recreational activities. Justin is fluent in English and Malay with an intermediate background in Mandarin.

In addition to strong administrative skills he has great experience in research, report writing, and letter & speech drafting.

Welcome, Justin!

InterVISTAS | aviation intelligence report 17

THE HAGUE VANCOUVER

BATH

OTTAWA

SKOP JE

BOSTON WASHINGTON

SÃO PAULO

InterVISTAS Consulting Group is a management consulting company with extensive expertise in aviation, transportation and tourism. Our exceptional people have successfully delivered projects in over 70 countries around the world. We are committed to working collaboratively with our clients to apply vision and expertise to achieve results.

NACO, the Netherlands Airport Consultants, B.V. is one of the world’s leading independent airport consultancy and engineering firms offering integrated, full-service planning and design services. With more than 60 years of experience, they have the expertise that is instrumental in solving the increasing complexity of developing today’s airports.

NACO has assisted over 550 airports of all sizes in more than 100 countries with realizing their goals; goals that entail every aspect of airport design and development.

Royal HaskoningDHV combine global expertise with local knowledge to deliver a multidisciplinary range of professional engineering, consultancy and project management services in aviation, buildings, energy, industry, infrastructure, maritime, mining, rural areas, urban areas and water.

royalhaskoningdhv.com

InterVISTAS’ Aviation Intelligence Report is a collection of information gathered from public sources, such as press releases, media articles, etc., information from confidential sources, and items heard on the street. Thus, some of the information is speculative and may not materialise.

To provide comments/feedback on the InterVISTAS’ Aviation Intelligence Report, please contact Paul Ouimet at paul.ouimet@intervistas.com or 1-604-717-1800.

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