Etihad Airways and Korean Air expand codeshare agreement

By BA Staff

Etihad Airways, the national airline of the United Arab Emirates, has expanded its codeshare agreement with Korean Air, South Korea’s largest airline, to include six new destinations.

In the second phase of cooperation, Etihad Airways will place its EY code on Korean Air services from Seoul Incheon to Honolulu, Vancouver and Hong Kong. Korean Air will place its KE code on Etihad Airways’ flights from Abu Dhabi to Johannesburg, Muscat and, subject to government approval, Khartoum.

The new arrangements augment the airlines’ existing codeshare services between Abu Dhabi and Seoul Incheon.

Etihad Airways’ President and Chief Executive Officer James Hogan said the expanded codeshare with Korean Air would enable both airlines to grow their networks in a mutually beneficial way and broaden their appeal to world travellers:

“The three new codeshare destinations enhance Etihad Airways’ business and leisure travel offering to the Asia Pacific and North America. The flights to Honolulu and Vancouver, in particular, will provide convenient one-stop access from Abu Dhabi to these two popular North American destinations. This is a natural development of the codeshare agreement with Korean Air which we signed in July this year, and we look forward to broadening the scope of cooperation even further in the future.” 

Mr Hogan noted that Etihad Airways’ strategy of partnerships with airlines such as Korean Air was helping grow tourism from around the world to its Abu Dhabi home and hub:

 “The introduction of new codeshare routes enables us to rapidly expand our network and drive more leisure and business traffic to and through our Abu Dhabi hub. Last year alone, Etihad Airways carried 10.2 million passengers through Abu Dhabi. Increasing international visitors to Abu Dhabi is key to enabling economic growth in the Emirate and helping realise the Government’s visionary Abu Dhabi 2030 plan. We forecast this trend will continue with the opening of new routes from Asia and North America.”

Etihad Airways and Korean Air have had a successful commercial partnership since August 2009 when the airlines signed a special pro rata agreement and interline partnership. The airlines commenced codeshare operations between Abu Dhabi and Seoul Incheon on July 22, 2013.

Members of Etihad Airways’ Etihad Guest and Korean Air’s SKYPASS loyalty programs enjoy reciprocal benefits. These include lounge access, priority check-in and excess baggage allowances for top tier program members and the ability to earn and burn frequent flyer points on Etihad Airways and Korean Air flights.
 

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Japan approves Finnair's inclusion in Japan Airlines British Airways joint venture

By BA Staff

Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has granted anti-trust immunity to the joint business venture between Japan Airlines, Finnair and British Airways.  This paves the way for Finnair to join the existing joint business venture between Japan Airlines and British Airways. The agreement will allow all three airlines to cooperate commercially on flights between Europe and Japan.

The new joint business is expected to be launched next Spring. The addition of Finnair will further enhance customer benefits by providing better links between the EU and Japan, with more flight choices and enhanced frequent flyer benefits. In addition, this new joint business will allow the three airlines to cooperate on expanding their presence within, to and from this important and growing market.

The revenue-sharing agreement will strengthen the oneworld® alliance and enable it to compete more effectively around the world with other global alliances.

President of JAL, Yoshiharu Ueki, said:

"We would like to thank the regulator for approving our application for ATI with Finnair joining Japan Airlines and British Airways in our current joint business between Europe and Japan. Amid the evolving Japanese aviation industry, the ATI will enable us to build a stronger value-creating relationship with British Airways and Finnair that can further benefit our customers as well as our business."

Keith Williams, chief executive of British Airways said:

"Today's decision by the MLIT will benefit the customers of all three airlines by allowing us to explore ways to improve the connections between East and West."

Pekka Vauramo, CEO of Finnair, said:

"We are glad we are now one step closer to starting the cooperation with JAL and British Airways to provide our customers with better connections between the EU Japan."

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oneworld takes its sixth 'best alliance' title of the year

By BA Staff

Readers of Business Traveller magazine have voted oneworld Best Airline Alliance in the magazine’s 2013 readers’ poll.

This is the sixth “best alliance” honor oneworld has received in major international industry award schemes in the past year, a record for any global airline alliance – and it comes as oneworld undergoes the biggest expansion program in its history.

Already in the past 12 months, oneworld has been named best airline alliance in:

• The 2013 World Airline Awards, staged by the Skytrax airline quality ratings agency.
• Global Traveler’s GT Tested Reader Survey 2012 Awards for the third year running.
• World Travel Awards 2012 for the 10th consecutive year.
• Australian Business Traveller 2012 for the second year running.
• The 2012 debut alliance Flight Stats On-Time Performance Awards.
• The Business Traveller award – which oneworld last won in 2005 – was presented at a ceremony in London.   oneworld Vice-President  Corporate Communications received the trophy on behalf of the alliance from BBC TV news anchor Fiona Bruce.

oneworld members also flew high in the individual airline categories of the Business Traveller 2013 awards.

British Airways took the overall top title as Best Airline, with Qatar Airways, which will join oneworld on 30 October, and Cathay Pacific also placed in the top five.

British Airways also took top honors as Best Shorthaul Airline, Best First Class, Best Frequent Flyer Programme and Best Airport Lounge.  Qatar Airways took the award for Best Business Class.

The awards, widely recognised as a benchmark for excellence, are based on a vote by readers of Business Traveller magazine – which has editions for the UK, USA, Asia-Pacific, Germany, Middle East, China, Africa, Hungary, Denmark and Poland – with the results authenticated by an independent auditing company.

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GOL and Delta achieve alliance milestones

Atlanta based American full service carrier Delta Air Lines and Brazilian low cost carrier (LCC) GOL Linehas Aereas Inteligentes recently detailed the benefits of their alliance 20 months after its inception. Find the details below.

22nd August, 2013

SAO PAULO, Aug. 22, 2013 /PRNewswire/ -- Twenty months after Delta Air Lines (NYSE: DAL) and GOL Linhas Aereas Inteligentes (BM&FBovespa: GOLL4 and NYSE: GOL) announced their enhanced, long-term, exclusive alliance, the companies highlight the milestones achieved.  Delta and GOL leveraged the strengths of both carriers to create additional value by establishing a seamless customer experience.

The Delta and GOL commercial team accomplished its immediate objectives: (1) expand the codeshare agreement; (2) provide additional benefits to the airlines' loyal customers; and (3) offer a consistent experience at airports.   

Codeshare Agreement

"Our strategic partnership with GOL greatly enhances Delta's network, providing access to 23 destinations in Brazil," said Ed Bastian, Delta's president and member of GOL's Board of Directors. "The codeshare will continue to expand pending regulatory approvals. Delta and GOL offer a U.S.-Brazil network unrivaled by any other U.S. flag carrier."

Currently GOL has the ability to offer its customers access to the 5 markets Delta serves between the U.S. and Brazil which are: Brasilia - Atlanta, Rio de Janeiro - Atlanta; and between Sao Paulo and Atlanta, Detroit and New York JFK.  Additionally, GOL's customers from the following local markets currently have access to Atlanta and will soon have access to Detroit and JFK: 

• Belo Horizonte
• Curitiba
• Goiana
• Porto Alegre

The Delta-GOL codeshare agreement provides Delta customers access beyond Brazil as well, including connections to Asuncion, Paraguay and Montevideo, Uruguay.

"We are achieving our goals and this is just the beginning," said Paulo S. Kakinoff, GOL's Chief Executive Officer. "The alliance has driven significant growth in traffic, with 28 percent of all Delta customers that travel to Brazil continuing on their journey with GOL. This represents an increase of nearly 100 percent more traffic year-over-year."

As of July, GOL started to offer Delta flights on GOL's website, voegol.com, Voe GOL stores, GOL's call center and travel agents. The alliance benefits commercial customers with joint contract agreement to serve corporate customers allowing them to have a single contract for service on both carriers.

Furthermore, the airlines have initiated a joint marketing campaign to promote GOL's ability to sell Delta on their channels.  As part of the joint branding efforts, customers traveling with GOL will now see the Delta logo and the phrase "in partnership with Delta" illustrated close to the boarding door of the GOL airplanes.  All GOL planes will soon carry the Delta brand.

Brazil is expected to become the fourth-largest aviation market in the world by 2014, with more than 100 million passengers.  The FIFA World Cup in 2014 and the Summer Olympics in 2016 will spotlight Brazil across the world. 

Airport Co-location and Customer Experience

One of the additional milestones of the alliance is the co-location of the airlines.  In April, Delta moved from Terminal 1, A Wing to Terminal 2 C Wing of the Sao Paulo-Guarulhos International Airport. For GOL and Delta customers co-location increases ease of connectivity and facilitates the process of re-checking bags after clearing customs since gol counters are located immediately after leaving the secured customs area.

"We want to offer our customers a premium check-in area, improved signage to enhance customer experience and an enhanced VIP lounge," Kakinoff said.  "GOL has a significant presence in Brazil's main airports and together with Delta we will continue to provide customers a seamless experience."

Customer Benefits

The alliance set in motion a plan to increase shared benefits to Delta's and GOL's most loyal customers. Along with the ability to accrue and redeem flight awards, Delta customers now enjoy complimentary access to GOL's VIP Lounges in São Paulo and Rio de Janeiro-Galeão International airports.  Likewise, Delta Sky Clubs in Atlanta, New York-JFK and Detroit are available to SMILES Diamond members at no charge. 

GOL's SMILES Diamond elite members have now access to priority check-in and boarding on Delta's flights through Delta's Sky Priority. Delta's Diamond, Platinum and Gold Medallion members have access to the same benefits. Delta's Sky Priority is a series of distinctively branded priority airport services designed for high value customers, allowing them to move quickly through the airport.

"This is a period of rapid growth and transformation for Delta and GOL. Brazil is the leading engine for economic growth in Latin America and an increasingly popular travel destination from the U.S.," said Bastian. "These joint achievements represent furthering Delta's goal to become the best U.S. airline in Latin America and the Caribbean.  Our alliance is based on shared values, leveraging strengths and learning to benefit from each other to better serve our customers."

As part a $3 billion investment in enhanced global products, services and airport facilities, Delta offers fully flat-bed seating with direct aisle access in the BusinessElite cabin on its routes from Sao Paulo to Atlanta and JFK, as well as from Rio de Janeiro to Atlanta. These flights also offer Delta's popular Economy Comfort seating in the forward section of the economy cabin. Economy Comfort offers additional legroom and 50 percent more recline compared to standard economy seats. All cabins offer in-seat audio and video on demand with a broad range of in-flight entertainment options. Delta also will introduce in-flight Wi-Fi service on international flights beginning in 2014.

About GOL Linhas Aereas Inteligentes SA

GOL Linhas Aereas Inteligentes S.A. (BM&FBovespa: GOLL4 and NYSE: GOL), the largest low-cost and low-fare airline in Latin America, offers around 970 daily flights to 65 destinations in 10 countries in South America, Caribbean and the United States under the GOL and VARIG brands, using a young, modern fleet of Boeing 737-700 and 737-800 Next Generation aircraft, the safest, most efficient and most economical of their type. The SMILES loyalty program allows members to accumulate miles and redeem tickets to more than 560 locations around the world via flights with foreign partner airlines. The Company also operates Gollog, a logistics service which retrieves and delivers cargo and packages to and from more than 3,500 cities in Brazil and eight abroad. With its portfolio of innovative products and services, GOL Linhas Aereas Inteligentes offers the best cost-benefit ratio in the market.

About Delta Air Lines

Delta is working to become the best U.S. airline in Latin America and the Caribbean and was just recognized with the Best Airline to North America award by Premio Destaque Companhia de Viagem,  by Grupo Companhia.  As part of that goal Delta has established a long-term exclusive alliance with GOL Línhas Aereas Inteligentes investing more than US $100 million in GOL. Likewise, Delta has invested more than US $65 million in Aeromexico as part of a long-term exclusive commercial alliance and entered a code sharing agreement with Aerolineas Argentinas solidifying its footprint in Latin America. Executive Travel magazine recognized Delta with the Gold Leading Edge Award for the Best Flight Experience to Mexico. Delta provides service to 28 countries and 44 destinations in the region offering more than 1,200 weekly flights between Latin America/Caribbean and the U.S. Spanish speaking Delta customers can receive real-time, on-the-go travel assistance in Spanish and Portuguese through its Twitter channels @DeltaAssist_ES and @DeltaAjuda 9 a.m. to 7 p.m. EST. Brazilian customers can also access Delta´s dedicated Brazil Facebook page visiting http://www.facebook.com/DeltaAirLinesBrasil.

Delta Air Lines serves more than 160 million customers each year. Delta was named by Fortune magazine as the most admired airline worldwide in its 2013 World's Most Admired Companies airline industry list, topping the list for the second time in three years. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 327 destinations in 63 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Delta is investing more than $3 billion in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Additional information is available on delta.com, Twitter @Delta, Google.com/+Delta and Facebook.com/delta.

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Analysis: Strong first quarter for Etihad bodes well for Jetihad deal

by Vinay Bhaskara

Abu Dhabi based full service carrier Etihad Airways reported record results for the first quarter of 2013.
Revenues grew a whopping 18.7% year over year to $900 million, up from $758 million in Q1 of 2012. In its 10th year of operations, Etihad also saw cargo revenues grow 17% to $193 million. Passenger figures also reached a new high of 2.8 million, growing 13% year over year from 2.3 million. Average seat factors grew 4 percentage points over 2012 to 80.5% despite a 12.5% increase in capacity. See the table at the bottom of the story for a full overview of key metrics for Etihad’s first quarter.

Said Eithad President and Chief Executive Officer James Hogan, “Our Q1 2013 results have again outstripped global trends, with our strongest ever first quarter results for passenger revenue… This performance demonstrates that Etihad Airways’ strategy of organic growth, wide-ranging partnerships, and strategic equity investments is delivering for us and our partners.”

More importantly for a future “Jetihad” partnership and equity investment, Etihad’s existing equity stakes are beginning to pay handsome dividends, with revenues growing 34% from $136 million to $182 million, and accounting for 20% of Etihad’s overall revenues.

The success of Etihad’s existing equity investments in airberlin, Air Seychelles, Virgin Australia, and Aer Lingus, who all reported profits in the first quarter of 2013 bodes well for a potential equity investment in Jet Airways because it shows that such an investment is viable.

However, the current macroeconomic pressures in India do give some pause. Demand growth continues to slow, with domestic demand falling 9% year over year in February. This, to some degree reduces the value of Jet Airways, and Naresh Goyal and other Jet Airways decision-makers will need to realize this and adjust their expectations accordingly.  Some of the valuation figures of Jet Airways at over a billion US dollars are unrealistic and out of line with the current strength of the industry and the Indian investment environment as a whole. That being said, the Indian Diaspora and international demand remain relatively robust, and thus Jet does offer significant value to Etihad as an Indian partner.

Jet Airways could sorely use the additional capital in order to solidify its restructuring efforts at a time of flux in the industry. Air India continues to flounder (and indeed a recapitalized Jet could win away some of Air India’s passengers), and Kingfisher is dead. SpiceJet appears to have found a pair of winner in its regional network of international destinations and fleet of Q400 turboprops serving Tier II/III destinations - while GoAir continues to fly under the radar as a presumably profitable airline. IndiGo meanwhile, is still humming along, though it has begun to rethink its growth strategy and must continue to do so. AirAsia’s new venture threatens to usurp the delicate balance of power that has emerged in the domestic industry, though much is yet to be determined.

We will learn a lot from the first quarter results of SpiceJet and Jet Airways. The domestic results in particular will indicate if the shrinking of demand has been made up for with increased fares on aggregate (a sign of a healthier industry). Regardless, a Jetihad deal is slowly getting closer and closer to fruition.

Etihad Key Metrics: First Quarter 2013

Key indicators	Q1 2013	Q1 2012	Variance
Passenger revenue	US$ 900 million	US$ 758.1 million	+19 per cent
Cargo revenue	US$ 193.1 million	US$ 165.4 million	+ 17 per cent
Total revenue	US$ 1,136.5 million	US$ 989 million	+ 15 per cent
Passengers	2,767,789	2,340,356	+ 18 per cent
Revenue passenger kilometres (RPKs)	12.9 billion	10.9 billion	+ 17 per cent
Available seat kilometres (ASKs)	15.9 billion	14.3 billion	+ 12 per cent
Seat factor	80.5 per cent	76.5 per cent	+ 4 points
Aircraft	73	66	+ 7

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Etihad Airways signs code share agreement with Kenya Airways; strengthened ties with SkyTeam?

by Vinay Bhaskara

Abu Dhabi based Etihad Airways has inked a code share with Nairobi based Kenya Airways, expanding access to second and third tier African destinations for its consumers. Etihad Airways will place its code on flights by Kenya Airways to 27 destinations across Kenya Airways' African network. Meanwhile, Kenya Airways will place its code onto 32 onward destinations from Etihad's global hub. The Kenya Airways code will also be placed onto Etihad's daily Abu Dhabi-Nairobi service with 136 seat (16J/120Y) Airbus A320 aircraft, while Kenya Airways will launch a thrice-weekly service Nairobi-Abu Dhabi from mid 2013 onwards.

James Hogan, Etihad Airways President and Chief Executive Officer, said: “The partnership agreement with Kenya Airways is in line with our strategy of forming alliances with airlines around the world to enhance our network and marketing reach. This agreement will also allow both airlines to benefit from cost savings achieved through synergies and economies of scale.

Dr. Titus Naikuni, Managing Director and Chief Executive Officer, Kenya Airways, said: “The new codeshare partnership with Etihad Airways is a significant strengthening of the global network of both airlines, which provides more choice to all our passengers. As part of the agreement we are looking for greater collaboration and coordination on cargo operations, training and procurement opportunities which will make us more cost efficient and customer responsive.”

Code share agreements in and of themselves aren't huge news, but this agreement is notable because it marks increased ties for Etihad with the SkyTeam alliance. After fellow Gulf rival Qatar Airways broke tradition and joined the oneworld alliance, it has become increasingly speculated that Etihad will follow suit and join SkyTeam (Star Alliance is seen as too crowded for another middle-eastern carrier with Turkish Airlines already in the fold).

Etihad now has code share partnerships with nine SkyTeam carriers, including its founder member, Air France. While Etihad touts the benefits of its so-called "equity alliances" composed of its investments and reciprocal codeshares in European LCC airberlin, African regional carrier Air Seychelles, Australian carrier Virgin Australia, and Irish national carrier Aer Lingus, it would undoubtedly benefit from the increased feed provided by membership in a global alliance. While this particular agreement does not mean that a deal is imminent, it does add incrementally to the likelihood of Etihad joining SkyTeam.

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Analysis: Malaysia Airlines entrance into OneWorld strengthens the alliance's network and Indian presence

by Vinay Bhaskara

Malaysia Airlines A330-300 9M-MTE in oneworld livery

On February 1st. 2013, Kuala  Lampur based Malaysian national carrier Malaysia Airlines will officially join the OneWorld alliance, a partnership of11 airlines around the world that serves more than 849 destinations globally. Malaysia Airlines serves 61 destinations on a fleet of 105 aircraft, and enjoys a strong reputation as one of the premier airlines in Southeast Asia, and the world. While it ran into some financial difficulties in 2010 and 2011, a successful restructuring program involving capacity cutbacks and fleet streamlining under the leadership of Malaysia Airlines Group chief executive Ahmad Jauhari Yahya has restored the airline towards a more optimal path.

From a OneWorld perspective, Malaysia Airlines fulfills an important strategic hole from a network perspective. Prior to its entry, OneWorld had very little presence in Southeast Asia outside of long haul service to major destinations like Singapore and Bangkok. Meanwhile Star Alliance has the networks of both Singapore Airlines and Thai Aiways International to leverage for travel to secondary and tertiary Southeast Asian destinations, while SkyTeam can tap into the fast growing markets of Vietnam and Indonesia through the newly minted membership of Vietnam Airlines and Garuda respectively. However, with Malaysia Airlines (and Sri Lankan to some degree) now in the fold, OneWorld instantly shoots into second place in the region, with the partnership of a world-class airline with a strong service reputation that has a strong network of Southeast Asian destinations.

The network improvement is especially important for OneWorld carriers because it now offers them another premium option with a strong onboard product and excellent ground service to offer to high yield frequent flyers and business travelers. It adds several new Southeast Asian destinations to OneWorld’s offering which makes OneWorld more attractive relative to SkyTeam and Star Alliance. Frequent flyers and high yield business travelers will now be more likely to fly OneWorld member airlines.

From an Indian perspective, Malaysia Airlines serves Bengaluru, Chennai, Dellhi, Hyderabad, and Mumbai; every major Indian Metro outside of Kolkata. But the real value comes in the fact that it offers the first easy connecting service  between India and Southeast Asia. Before, passengers flying between India and Vietnam, Indonesia, Cambodia, Thailand, the Philippines, and even Australia would have had to endure a significant detour to Hong Kong or Tokyo in order to fly OneWorld carriers. Now, there is a more direct option for Indian travelers. Best of all, they can earn rewards points in a OneWorld frequent flyer program, which can be redeemed for travel throughout the OneWorld network, and earn elite benefits. This should help shift customers with significant Indian travel onto other OneWorld flights to and from India as well, improving group profitability as a whole. The addition of Malaysia Airlines (and Sri Lankan to some degree) significantly strengthens OneWorld’s presence in the Indian market, and the alliance as a whole.

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