Pegasus Airlines seals $4.3 billion engine deal with CFM

By BA Staff

Pegasus Airlines has finalized its order for CFM International’s advanced LEAP-1A engine to power its 100 Airbus A320neo and A321neo aircraft on order.

The agreement is valued at approximately $4.3 billion U.S. at list price, including a long-term service agreement.

Under the terms of the 20-year Rate per Flight Hour (RPFH) maintenance agreement, CFM will guarantee maintenance costs on a dollar per engine flight hour basis.

The engine selection was announced in July 2013 and the airline is schedule to begin taking delivery of its new aircraft in 2016.

The Istanbul-based low cost airline has been a CFM customer since it began operations in 1990. The airline operates a fleet of 45 CFM-powered Boeing 737 aircraft on scheduled routes to 76 domestic and international destinations throughout Europe, Russia, Central Asia, Caucasus, the Middle East, and Africa.

Sertaç Haybat CEO of Pegasus Airlines said:

“We are pleased to have selected CFM to provide LEAP engines for our new Airbus A320neo and A321neo aircraft until 2022, in addition to the 20-year maintenance agreement. This will enable us to keep what is arguably the most significant cost for airlines — engine maintenance costs— in check by making these costs more predictable. With this order, we have now increased our total Airbus fleet investment to $16.3 billion U.S. — $12 billion for 100 new aircraft and $4.3 billion for the engines and long-term service agreement. Based on the delivery schedule for the fleet, our partnership with CFM will continue at least until the year 2042. Together, we are witnessing the signing ceremony for a collaboration that is set to last for another 30 years.”

Pierre Fabre, president & CEO of CFM parent company Snecma (Safran) said:

“This agreement marks an important milestone in our already 20-year relationship with Pegasus. Beyond the quality of the LEAP product comes our unwavering commitment to keep our promises and deliver the kind of performance, reliability, and operating economics Pegasus has come to rely on from CFM.”

The first LEAP-1A engine to test started for the first time on September 4, 2013, two days ahead of the schedule set in early 2010. The engine logged more than 300 hours and 400 cycles before coming off the test stand. The next major event is the icing tests that will take place in 2014. CFM is performing the test early, more than one year ahead of the engine certification timeline, to ensure that any potential issues are identified well in advance.

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Pakistan routes news and analysis: Gulf Air, Pakistan International Airlines, and Turkish Airlines

by Vinay Bhaskara

Several pieces of routes news from Pakistan emerged over the past week, and Bangalore Aviation has prepared a summary of these changes

Gulf Air increases frequency to Pakistan

• Bahrain based  Gulf Air has added 7 new weekly frequencies on its offering to Pakistan, from mid-December 2013, bringing its total Pakistani operation to 21 flights per week to four destinations. A summary of the changes is shown below
• Bahrain - Islamabad increases from 2x weekly to 3x weekly Airbus A330-200
• Bahrain - Karachi increases from daily to 10x weekly Airbus A320
• Bahrain - Lahore increases from 3x weekly to 4x weekly A330-200
• Bahrain - Peshawar increases from 2x weekly to 4x weekly, split as 2x weekly Airbus A321, 1x weekly A330-200, and 1x weekly A320

Pakistan International Airlines (PIA) increases service to Manchester/Toronto from November 2013

• Total frequency to Toronto increases to 4x weekly with addition of second weekly Karachi - Lahore - Toronto flights using Boeing 777-200LR equipment
• Total frequency to Manchester increases to 6x weekly with addition of third weekly Islamabad - Manchester on Boeing 777-200ER equipment
• Pakistan International Airlines continues to persist in operating a potpourri of routings for its intercontinental flights, by having low frequencies from each of Karachi, Islamabad, Lahore, and even Peshawar. This is certainly not unprecedented; Saudia has a similar setup out of Riyadh, Jeddah, and Dammam. But it would likely be more efficient for PIA to choose just one airport to serve as its gateway for long haul flights; either Karachi, which has the highest yielding traffic, or Islamabad, which has the highest volume of passengers. 

Turkish Airlines switches to 737-900ER

• Istanbul based Turkish Airlines is planning on switching aircraft for some of its flights to Pakistan, replacing the Boeing 737-800 with the Boeing 737-900ER
• Interestingly, the decision to replace the 737-800 with the 737-900ER actually represents a downgrade in capacity, as the 737-800s are configured with 165 seats (12Y+ / 153Y), while the 737-900ERs are configured for 151 seats (16C / 135Y) including a true regional business class product. This is an indication that Turkish Airlines is seeing strong premium demand on its Pakistani routes, but volumes are a bit soft (understandable given the residual weakness in the Pakistani economy)
• The routes affected are:
• All 4x weekly flights to Karachi, Pakistan's business capital
• One of 3x weekly flights to Islamabad, Pakistan's political capital

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Turkish Airlines increases Algiers frequencies

Middle Eastern full service carrier Turkish Airlines has announced an increase in frequencies to Algiers from seven flights per week to 11, beginning 13th September, 2013. Find the details below.

Flight No.	Start	End	Days	Departure		Arrival
TK 651	31 March 2013	26 October 2013	Everyday	Istanbul	12:40	Algiers	14:15
TK 652	31 March 2013	26 October 2013	Everyday	Algiers	15:55	Istanbul	21:05
TK 653	13 September 2013	25 October 2013	Monday, Wednesday, Friday, Sunday	Istanbul	08:30	Algiers	10:05
TK 654	13 September 2013	25 October 2013	Monday, Wednesday, Friday, Sunday	Algiers	11:40	Istanbul	16:50

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Turkish Airlines increases frequency in Valencia

Middle Eastern carrier Turkish Airlines has announced that it is increasing frequency to Valencia, Spain from five flights per week to seven per week on 27th October 2013. Flight schedules are as shown below.

TK 1301 Istanbul-Valencia 1010-1305 Daily
TK 1302 Valencia-Istanbul 1405-1850 Daily

The aircraft will have a one hour turnaround in Valencia, and Turkish Airlines will offer the quickest connection between India and Valencia, as it does for most of Spain. 

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Analysis: Emboldened by Etihad deal, Turkish Airlines seeks additional flying rights to India

by Vinay Bhaskara

Late last week, The Times of India reported Turkish Airlines, one of the world’s fastest growing airlines in the world, wanted to more than quintuple its Indian footprint, requesting an increase in weekly seat allocation from 4,000 to 20,000 seats per week, and gain access to Bangalore, Kolkata, Chennai, Hyderabad, Amritsar, and Ahmedabad.

Turkish is also requesting an increase in its weekly frequency allocation from 14 weekly flights (one daily each to Mumbai and Delhi), to 70 flights per week.

Reportedly, Turkish Airlines’ Indian general manager Adnan Aykac made the following statements with regards to his carrier’s requests:

We currently fly 14 flights a week — a daily from Delhi and Mumbai each to Istanbul. This is very limited capacity. We have asked the government for more destinations as we want to fly to all the six metros [Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai], Amritsar and Ahmedabad. We want to have 70 weekly flights from eight cities in India. We are ready to mount the flights that we seek to and from the new cities as early as possible. Delhi and Mumbai are among the most expensive airports in the world, with Delhi being costlier than Mumbai. But these are the two gateways to India and generate almost 70% of all international traffic to and from India. Indian carriers can start flights to Turkey whenever they want. This will be a commercial decision. There are many places whose airlines fly to India without an Indian carrier going there like Amsterdam, from where KLM flies without any Indian carrier going to Holland. 

Turkish Airlines may have some weight behind its request thanks to the timing. As a condition of the recent purchase of a 24% stake in full service carrier Jet Airways by Etihad Airways (with the Abu Dhabi government behind it), Etihad asked for and received a massive increase in seat allocation through the bilateral air service agreement (ASA). Etihad now controls more than 92,000 seats per week between India and Abu Dhabi, while other Middle Eastern rivals like Emirates (54,000) and Qatar Airways (24,292) control more than the 20,000 seats requested by Turkish Airlines. However, Turkish Airlines lacks the political clout of Jet Airways head Naresh Goyal, which might affect its chances of getting an expanded bilateral. And the so-called Jetihad deal is under further review by concerned parties in the Indian government.

Regardless of the outcome of its request, Turkish Airlines already has a strong presence in the Indian market. As with much of its route network, the success is predicated on connectivity across its global hub at Istanbul. Currently, Turkish operate daily services to both Delhi and Mumbai, and each destination is primarily utilized for connecting Indian passengers westbound to Europe, Africa, North America, and (now) Latin America. In 2012, only 24% of Turkish Airlines passengers at Mumbai (where it had a seat factor of 82%) were origin and destination (O&D) passengers from Istanbul, while the figure was 23% at Delhi (on seat factors of 75%).

The five largest origin points for Turkish Airlines service to Mumbai in 2012 were Tel Aviv (despite nonstop service from Israeli national carrier), Stockholm Arlanda, London Heathrow, Washington Dulles, and Chicago O’hare. Arlanda, Dulles and O’hare all lack nonstop service from Mumbai. The market between Washington DC and Mumbai was sized at 38,232 passengers in 2011, while Chicago – Mumbai had nearly 62,367 annual passengers. The five largest origin points for the Delhi flights were Tel Aviv, Barcelona, Washington Dulles (an annual market size of nearly 61,235 passengers), Berlin Tegel, and Copenhagen. Mumbai and Delhi were of course the two largest inbound feeder markets for Turkish Airlines’ services to Washington Dulles, and both airports were amongst the top 5 feeders for Turkish Airlines service to Tel Aviv and Berlin. Delhi was a top 5 feeder market for Turkish Airlines flights to Sao Paulo, Barcelona, Bremen, Dusseldorf, Hamburg, Madrid, Nuremberg, Milan and Venice, while Mumbai was a top 5 feeder market for Chicago, Los Angeles, London Heathrow, and Rome. It is interesting to note that Turkish Airlines has won a large share of traffic between Germany and Delhi, despite the presence of German national carrier Lufthansa in Delhi with the largest aircraft available; the Boeing 747-8 Intercontinental. Perhaps this lost traffic is behind Lufthansa’s long standing request to operate the Airbus A380 to Delhi?

The services to Bangalore, Chennai, Kolkata, Chennai, Hyderabad, Amritsar, and Ahmedabad will likely follow much of the same pattern. While Bangalore and Chennai are reasonably well served to Europe, the remaining destinations all lack connectivity. Africa and Latin America are un-served, as is the United States, to which these destinations had more than 1.7 million passengers worth of annual demand in 2011 (436,881 – Bangalore, 481,748 – Hyderabad, 398,941 – Chennai, 244,185 – Ahmedabad, 108,581 – Kolkata, and 100,000 – Amritsar).

Turkish Airlines currently serves 235 destinations worldwide on a fleet of 218 passenger aircraft (carrying 39 million passengers in 2012), including 38 in Africa, seven in North America, two in Latin America, and 87 in Europe (with several more in each region announced). Its hub at Istanbul’s Ataturk International is one of the fastest growing airports in the world, with traffic having more than quadrupled to nearly 45 million passengers in 2012 from 11.3 million in 2002.

However, space is constrained at Ataturk, and the airport is now heavily congested, with airline on-time performance in June of 2013 at Istanbul Ataturk registering at an abysmal 38.02%. Turkish has already begun to develop Istanbul’s second airport, Sahiba Gokcen, as a secondary hub. Traffic there hit 14.5 million annual passengers in 2012, but these growth pressures should be resolved by the end of the decade, as Turkey has broken ground on the world’s largest airport in Istanbul.

Analyst's views are individual and may not necessarily reflect the views of Bangalore Aviation.

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Trip Report: India and Europe Summer 2013 - Introduction

Introduction
United Club Newark
United Economy Class Newark to Hamburg
Lufthansa Senator Lounge Hamburg
Turkish Airlines Economy Class Hamburg to Istanbul
Turkish Airlines CIP Lounge Istanbul
Turkish Airlines Economy Class Istanbul to Mumbai 
Lufthansa Senator Lounge Mumbai
Thai Airways Business Class Mumbai-Bangkok
Thai Airways First Class Lounge and Spa Bangkok
Thai Airways First Class Bangkok to Frankfurt
Lufthansa Senator Lounge Frankfurt
Lufthansa Business Class Frankfurt to Zurich
*tentative*
Swiss Business Lounge Zurich
Air Canada Executive First Zurich to Toronto
Air Canada Maple Leaf Club Toronto
Air Canada Business Class Toronto to Philadelphia
*tentative*
_________________________________________________________________________________

This post is meant to serve as an introduction to a trip I will be taking later this summer. The trip report will be updated as I actually do the flying.

So the genesis of this trip is that I am taking a trip to India in August of this year, and on the return I will be stopping over in Europe to visit with family.

Now within the parameters of a standard United Airlines award ticket, I booked the itinerary you see above, Economy Class going to India, and First Class on the return. My first step was finding award inventory in the India-US direction, which is incredibly difficult to do in the summer time, as this is a peak period for US origin travel to India. I eventually managed to find a one-stop from Newark via Munich to Mumbai on August 7th, but instead I opted for a more circuitous Newark-Hamburg-Istanbul-Mumbai routing. This routing would allow me to visit two new airports (Hamburg and Istanbul), and fly a new aircraft type (the Airbus A321 --  most of my short haul flying has been on United and American, neither of whom currently have A321s) in the spirit of a true aviation connoisseur.

The advantages of this routing are that I have a comfortable 4 hour layover in Hamburg (allowing me to shower in the lounge) as opposed to the hour long sprint I'd have to endure in Munich, as well as 4 hours to review the Turkish Airlines CIP lounge in Istanbul, considered by many to be the best business class lounge in the world. It also allows me to provide a review of Turkish Airlines' service offering in economy class on flights between India and the West. And the Istanbul-Mumbai sector is currently scheduled on a Boeing 777-300ER leased from Jet Airways.

Turkish Airlines Business Class (CIP) Lounge - Istanbul
Image Credit - One Mile at a Time

The return flights from Mumbai are also notable. On a first class award, I will have a business class flight overnight from Bangkok to Mumbai, and then I will be able to experience Thai Airways famed first class services in Bangkok- including a golf cart ride to the lounge, hour long complementary Thai massages, and a full service restaurant. Then I will be on to the highlight of my trip; First Class on the Thai Airways A380 between Bangkok and Frankfurt, my first time in international first class and my first time flying an A380. Then its a couple of hours of layover in Frankfurt and off to Zurich,.

Thai Airways Royal First Class on A380
Image Credit - Australian Business Traveler

Now its the flights home to the US that I am still unsure about. The only flight home I could find at the time of booking was the Air Canada itinerary displayed. However, what I am banking on is that Lufthansa tends to release its first class award inventory to United 14 days before departure; Lufthansa First Class and the First Class Terminal at Frankfurt would be  a perfect way to end this trip. Either way, I am excited for my journey!

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Timeline and Fleet Matrix of Turkish Airlines expansion

by Vinay Bhaskara

Istanbul-based Turkish Airlines has been pursuing a strategy of rapid fleet and destination growth over the past few years. Already, they are the airline which serves the most countries in the world, and  they have already announced plans to start 41 new destinations over the next two years.

The following table details Turkish Airlines' expansion plans over the next two years. Of the 41 destinations, 26 have definite start dates spread across the end of 2012 through June 2013 while the rest have more nebulous timelines. Geographically, there are 16 new destinations in Africa, 11 in Europe, 7 in the Americas, 6 in the Middle East and Central Asia, and 3 in Asia proper. These new flights would add a grand total of 147 new weekly frequencies to Turkish Airlines' already massive hub in Istanbul.

Meanwhile, Bangalore Aviation can also release the fleet matrix for Turkish Airlines' growth plans. Currently, the plan calls for Turkish Airlines to grow from a fleet of 192 aircraft today (37 widebody, 155 narrowbody) to a fleet of 220 aircraft (69 widebody, 151 narrowbody) by the end of 2017. With a current orderbook of 67 aircraft, this means that Turkish Airlines will be retiring more than 39 aircraft from the fleet (3 widbodies and 36 narrowbodies). The widebody fleet plans seem relatively definite, as the next generation Boeing 787 and A350 are sold out till past 2017. However, the fleet growth plans may change slightly, given that Turkish Airlines has expressed interest in ordering between 6-12 large widebodies (Boeing 747-8 intercontinental or Airbus A380). On the narrowbody side, Turkish Airlines will likely order both the 737 MAX and the Airbus A320neo reengined products, but the majority of such deliveries would take place after 2017 anyhow given the current respective orderbooks. Turkish Airlines could also add a smaller type such as the Embraer E190 or the Bombardier C-Series and those would be available more quickly, changing the dynamic of the fleet plan considerably. In fact, Bangalore Aviation thinks that it is likely that Turkish Airlines will order a smaller narrowbody (probably the C-Series given its longer range) as it vanquishes current expansion paths and adds even-thinner new routes.

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Turkish Airlines in discussions to acquire LOT Polish, what about India?

Over the weekend, it broke that Middle Eastern behemoth Turkish Airlines was in negotiations to acquire a controlling stake in Poland's national carrier, LOT Polish Airlines.

Hamdi Topcu, Turkish chairman, said: "We are starting negotiations to buy LOT. It should be a win-win situation for both sides."

LOT operates a fleet of 56 aircraft to 92 destinations around the globe, losing $17.2 million in 2010. They have had their recent struggles, and the Polish government is now looking to offload its 68% stake. LOT's largest hub is in Warsaw, and they have positioned themselves as a low-end transit hub with moderate success.

Meanwhile, Turkish Airlines' name has come up as a suitor for numerous troubled European carriers in the past year and a half or so, most notably Barcelona based Spanair.

Turkish has been actively seeking a reliever for their central hub in Istanbul, which is congested and rapidly approaching its max carrying capacity with no apparent expansion possible. However, Warsaw is not a great airport to relieve Istanbul with, so there's probably something else behind this deal.

According to Topucu, Turkish's continued growth and profitability [$189.3 million in 2010] had led to "13 or 14 airlines" approaching it for investment.

"We have worked on [acquisitions] for more than a year and have chosen LOT."

With India's government moving towards allowing 49% foreign direct investment in India's airlines, would Turkish Airlines be interested in purchasing a large stake in an Indian carrier?

There are certainly opportunities to be had in one of the world's fastest growing markets and the steady hand of Turkish Airlines would be beneficial to India's struggling airline management.

The question then arises, which airline would THY look to invest in and why? Share your thoughts via a comment.

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Singapore Airlines adds Kuwait, increases Abu Dhabi, Cairo frequencies

Singapore Airlines will begin a four-times-weekly service to Kuwait from 15 March 2009. Flying via Abu Dhabi, the service will operate on Tuesday, Thursday, Saturday and Sunday, using Boeing 777-200 aircraft.

As a consequence of the introduction of this service, Singapore Airlines will now fly between Singapore and Abu Dhabi daily, up from the existing three times weekly service.

From 12 March 2009, Singapore Airlines will increase flights between Singapore and Cairo from three times a week to four. All these flights will operate via Dubai.

The addition of Kuwait to the Singapore Airlines network comes after the conclusion and signing of a broad Open Skies Agreement between Singapore and Kuwait last month. Kuwait will be Singapore Airlines’ 68th destination, across 36 countries.

The addition of these flights brings Singapore Airlines’ frequency between Dubai and Singapore to 21 times weekly, of which 17 flights operate beyond to Istanbul, Cairo, Moscow and Riyadh. Service between Singapore and Abu Dhabi will operate daily, with the existing three flights continuing on to Jeddah, and the four new flights going on to Kuwait.

For more details visit the Singapore Airlines website.

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